/raid1/www/Hosts/bankrupt/CAR_Public/130903.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, September 3, 2013, Vol. 15, No. 174
Headlines
AIRBNB: Hotel Industry Mulls Rental Tax Class Action
AMBASSADORS GROUP: Received Insurance Reimbursement in 2nd Qtr.
ASSURANT INC: Defends Suits Over Lender-Placed Insurance Programs
AT&T MOBILITY: 9th Circuit Vacates Remand of Class Suit to State
BIG 5 SPORTING: Considering Deal in Credit Card Purchases Suit
BP PLC: Settles Class Action Over Tainted Gasoline for $7 Million
CALIFORNIA: District Court Ruling in "Missud" Suit Upheld
CAMPBELL SOUP: Faces Class Action Over "Heart-Check Mark"
CARDTRONICS INC: Awaits Report in Suit Over Voice-Guided ATMs
CHOBANI INC: Wants Judge to Reconsider Class Action Ruling
COMCAST CORP: Awaits Initial OK of Settlement in Antitrust Suit
COMCAST CORP: Continues to Defend Antitrust Suits by Customers
CUPID PLC: Sued for Spamming Kids With Explicit & Profane Ads
DOW CHEMICAL: Liable in Civil Asbestos Lawsuit, Court Rules
EBAY INC: Judge Rejects $4.75MM Consumer Class Action Settlement
EL PASO PIPELINE: "Allen" Class Suit Remains Pending in Delaware
FANNIE MAE: Settles Securities Fraud Class Action for $153 Million
FIRST ENERGY: Sued for Dust & Odor Pollution From Hatfields Plant
FONTERRA COOP: Resumes Operations in Sri Lanka Plant
FONTERRA COOP: Botulism Scare Likely False Alarm, NZ Officials Say
FORD MOTOR: Appeals Court Overturns $29MM Class Action Verdict
GOOGLE INC: Consumer Watchdog Balks at Cy Pres Recipients
GRUMA CORP: Faces Class Action Over Tortilla Chip False Ad Claims
HAWAII: 9th Cir. Tosses Age Limit to Attend High School
HOSPIRA INC: Defends "Sterling" Securities Suit in Illinois
IMH FINANCIAL: Has Final Approval of Unitholders Suit Settlement
JOHN HANCOCK: Judge Dismisses Unclaimed Property Class Action
KAISER PERMANENTE: Blumenthal Nordrehaug Files Class Action
KMART CORP: Court Gives Preliminary OK to Seating Case Settlement
MASTERCARD INC: Awaits Order in ATM Operators and Consumers Suits
MASTERCARD INC: Defends Interchange Fee Suits Pending in Canada
MASTERCARD INC: Approval of US Merchant Suits Deal Under Appeal
MASTERCARD INC: Objectors Appeal Approval of "Attridge" Suit Deal
MASTERCARD INC: Sept. Hearing Set on U.S. Interchange Suits Deals
MB FINANCIAL: Faces Merger-Related Class Suit in Illinois
MERRILL LYNCH: Settles Racial Discrimination Suit for $160-Mil.
MOOREHEAD COMMS: "Garcia" Suit Gets Conditional Certification
NEW YORK, NY: Calls Upheaval of Stop & Frisk Premature
OILSANDS QUEST: Court OKs Securities Fraud Class Action Settlement
PALM BEACH AGGREGATES: Residents Can Join Cancer Cluster Suit
PENNSYLVANIA: 3rd Cir. Vacates Ruling in FLSA Suit v. SEPTA
PILOT FLYING J: Explains Consolidation of Rebate Class Actions
PIPER JAFFRAY: Continues to Defend Consolidated Antitrust Suit
PORTFOLIO INVESTMENT: "Havens" Suit Dismissed With Prejudice
SOUTHWEST AIRLINES: Court Okays $29MM Settlement of Drink Coupon
TOYOTA MOTOR: U.S. Executive Testifies in Sudden Acceleration Suit
TRUMP NATIONAL: Settles Employees' Class Action for $475,000
UNIVERSAL MUSIC: Faces Class Action Over Unpaid Internship
VANDA PHARMACEUTICALS: Faces Securities Class Suits in D.C.
VIGO COUNTY, IN: Former Inmate Speaks About Jail Conditions
VITAL PHARMA: Bid to Bifurcate Discovery in "Karhu" Suit Denied
WHITEWAVE FOODS: Seeks Dismissal of Food Labeling Class Action
* About 70% of Supplement Companies Violate FDA Rules
* "Offer of Judgment" Mechanism Useful in Wage-Hour Class Action
*********
AIRBNB: Hotel Industry Mulls Rental Tax Class Action
----------------------------------------------------
Lisa Fickenscher, writing for Crain's New York Business, reports
that city regulators and Attorney General Eric Schneiderman are
looking into cracking down on companies that help folks rent out
their apartments to tourists.
Each week, Mayor Michael Bloomberg's Office of Special Enforcement
fields about 10 complaints about residential apartments that are
being rented out to tourists for overnight stays -- which is
illegal in New York but one of the hardest laws to enforce.
While thousands of New Yorkers advertise their apartments on
Airbnb, OneFineStay.com and VRBO (which stands for Vacation
Rentals by Owner) as an alternative to pricey hotel rooms, some of
their neighbors are complaining about the coterie of strangers
filing into their buildings on a nightly basis. Government
agencies are looking at new ways to regulate this shadow industry,
while hoteliers are mapping out strategies to punch back at what
they see as unfair competition.
Recent well-publicized cases have fed a new urgency to do
something about this segment of the so-called sharing economy.
One involved a tenant who was fined $2,400 by a court for renting
out his East Village apartment; another case highlighted the
effort of landlord Ken Podziba to evict a tenant in his building
who reportedly made $500,000 over four years running a business
renting her apartment to tourists.
"These people [who rent out their apartments] don't pay taxes,"
said Vijay Dandapani, chief executive of Apple Core Hotels in New
York, "The web sites may tell them they need to pay all taxes, but
they don't require it."
Airbnb, however, does submit tax information on the rental income
of its hosts to the federal government.
City officials say they are driven by concerns over public safety
issues, apartments, for example, that don't meet the fire
prevention standards that hotels are required to comply with. But
enforcing a 2010 state law that makes it illegal to rent out an
apartment for less than 30 days when the owner is not at home,
falls to a meager staff at the Office of Enforcement, which
investigates cases when a complaint is filed.
"This office focuses on quality of life issues citywide, but
illegal hotels takes up most of our time," said a city official.
The agency has logged 3,200 complaints and 6,600 violations since
2006 when Mayor Michael Bloomberg expanded enforcement to handle
the illegal hotel issue.
About two months ago, a city hall official met with executives
from San Francisco-based Airbnb, asking the five-year-old company
to work with the city on a new business model that doesn't run
afoul of the law. Nothing yet has come of those conversations.
Airbnb fought passage of the law three years ago and is lobbying
for new legislation that allow people to rent their apartments as
hotels if they pay hotel occupancy taxes and make safety
modifications to their apartments like adding smoke detectors
among other stipulations.
Airbnb says that 87% of its hosts are renting out their primary
residence for less than four weeks a year and that many of them
are home during the rental, according to a survey the company
asked its hosts to complete.
For now, enforcement has focused on landlords and tenants who rent
out residential buildings or units rather than on the companies
like Airbnb that facilitate the rentals.
The problem is that many hosts are unaware that they may be
violating the law -- if they even know that one exists. Earlier
this year, an East Village resident, Nigel Warren, who advertised
his apartment on Airbnb, was fined $2,400 by an administrative law
judge. Later, Mr. Warren blogged about his experience complaining
that Airbnb should have been more explicit in informing hosts
about the laws. Airbnb responded by defending him in court.
Airbnb acknowledges that its hosts were lacking knowledge about
local laws concerning illegal hotels.
In May, the company added a pop-up screen when hosts register
their apartments, advising users to "review their local laws
before listing their space on Airbnb." It says the company "is
working with governments around the world to clarify these rules
so that everyone has a clear understanding of what the laws are."
Industry sources say a chief reason Airbnb and its competitors
have not been targeted by regulatory authorities is that they are
protected under section 230 of the federal Communications and
Decency Act of 1996, which originally sought to regulate Internet
pornography. Section 230 provides safe harbor for Internet
service providers that simply provide a platform for online
content, exempting them from liability.
According to sources who have met with the attorney general's
office, Mr. Schneiderman's staff is looking at ways to get around
this legal conundrum. A spokeswoman for the attorney general
declined to comment for this story.
The hotel industry is hoping to organize a class action lawsuit
against Airbnb, said Mr. Dandapani, a director of the Hotel
Association of New York City and a member of its executive
committee. He believes the government could also compel Airbnb
and its competitors to collect disclosure of tax forms,
essentially forcing the companies to prove that their hosts are
paying all of their taxes.
"We are not sitting still," Mr. Dandapani said. "They are
violating the law and we are the affected class."
AMBASSADORS GROUP: Received Insurance Reimbursement in 2nd Qtr.
---------------------------------------------------------------
During the second quarter of 2013, Ambassadors Group, Inc.
received an insurance reimbursement for previously expensed legal
costs related to its settlement of a class action lawsuit,
according to the Company's July 31, 2013, Form 8-K filing with the
U.S. Securities and Exchange Commission.
On July 14, 2009, a securities class action was filed against the
Company and certain of its executive officers on behalf of all
persons or entities who purchased the Company's common stock
between February 8, 2007, and October 23, 2007, in the United
States District Court for the Eastern District of Washington. On
February 11, 2010, the Company, and certain of its executive
officers, moved to dismiss the class action. On June 2, 2010, the
Court issued an order denying these motions to dismiss. The
amended complaint alleged that the defendants violated federal
securities laws by making untrue statements of material fact
and/or omitting to state material facts, thereby artificially
inflating the price of the Company's common stock. On March 17,
2011, the class was certified for persons who purchased the
Company's common stock between July 24, 2007, and October 23,
2007. The parties had commenced discovery when, on April 14,
2011, an agreement was reached to settle the action following a
mediation before a retired federal judge. Under the terms of the
settlement, the Company's insurance carriers agreed to pay the
settlement amount of $7.5 million, in complete settlement of all
claims, without any admission of wrongdoing or liability by the
Company or any party in the action. Throughout the litigation,
the Company and the individual defendants have denied, and
continue to deny, the allegations made against them.
The Company agreed with the insurance carriers to settle the
action on these terms, because it was in the best interests of the
Company to avoid the burdens, risk, uncertainties and expense that
would be inherent in continued litigation. The settlement
agreement included a release for all defendants and other
provisions common in such agreements. On June 28, 2012, the Court
entered a final order approving the settlement and related
matters. On October 9, 2012, the Court entered an order directing
entry of judgment and dismissal of the complaint and the claims
therein with prejudice.
As the settlement is covered and was funded by the Company's
insurance carrier, the settlement is not expected to have a
material adverse effect on the Company's business, financial
condition or results of operations.
During the second quarter of 2013 and 2012, the company received
an insurance reimbursement for previously expensed legal costs
related to these matters.
Ambassadors Group, Inc. -- http://www.AmbassadorsGroup.com/-- is
a provider of educational travel experiences and online education
research materials. The Company was founded in 1967 and
reincorporated in Delaware in 1995. The Company is headquartered
in Spokane, Washington.
ASSURANT INC: Defends Suits Over Lender-Placed Insurance Programs
-----------------------------------------------------------------
Assurant, Inc. is defending itself against class action lawsuits
relating to its lender-placed insurance programs, according to the
Company's July 31, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended June 30, 2013.
The Company is a defendant in class actions in a number of
jurisdictions regarding its lender-placed insurance programs.
These cases allege a variety of claims under a number of legal
theories. The plaintiffs seek premium refunds and other relief.
The Company has accrued an estimated loss for this litigation.
The possible loss or range of loss resulting from such litigation,
if any, in excess of the amounts accrued is inherently
unpredictable and involves significant uncertainty. Consequently,
no estimate can be made of any possible loss or range of loss in
excess of the accrual.
Although the Company cannot predict the outcome of any action, it
is possible that such outcome could have a material adverse effect
on the Company's consolidated results of operations or cash flows
for an individual reporting period. However, based on currently
available information, management does not believe that any
pending matter is likely to have a material adverse effect,
individually or in the aggregate, on the Company's financial
condition.
New York-based Assurant, Inc. -- http://www.assurant.com/-- has
four operating segments: Assurant Solutions, Assurant Specialty
Property, Assurant Health, and Assurant Employee Benefits; and a
fifth segment, Corporate & Other, that engages in activities of
the holding company, financing and interest expenses, net realized
gains and losses on investments and others. The operating
segments provide, among other things, warranties and service
contracts, pre-funded funeral insurance, debt protection
administration, credit-related insurance, lender-placed homeowners
insurance, renters insurance.
AT&T MOBILITY: 9th Circuit Vacates Remand of Class Suit to State
----------------------------------------------------------------
Elizabeth Warmerdam, writing for Courthouse News Service, reports
that Supreme Court precedent invalidates efforts to have a state
court preside over a putative labor class action against AT&T
Mobility, the 9th Circuit ruled.
Robert Rodriguez had sued AT&T in Los Angeles Superior Court for
unpaid wages, overtime compensation, and damages for statutory
violations under California law. He seeks to represent all other
similarly situated retail sales managers for AT&T wireless stores
in Los Angeles and Ventura counties.
After AT&T removed the case to federal court, however, Rodriguez
sought remand on the basis that the total amount in controversy
did not exceed the $5 million federal jurisdiction threshold. He
also waived the right to claim more than that amount.
A federal judge rejected AT&T's argument that the actual amount in
controversy could not be less than $5.5 million based on the
potential number of class numbers and the size of their claims,
and ordered the case to be remanded to state court.
In making its decision, the District Court noted that, based on
the 9th Circuit's decision in Lowdermilk v. U.S. Bank, AT&T bore
the burden of proving to "a legal certainty" that more than $5
million was at issue. Rodriguez's "disclaimer" to any money over
that amount "effectively foreclosed the jurisdictional issue," the
court found.
The Supreme Court upset this holding, however, by finding in
Standard Fire Insurance Company v. Knowles that such waivers are
ineffective. In that March 2013 decision, the Supreme Court said
that "a plaintiff who files a proposed class action cannot legally
bind members of the proposed class before the class is certified."
The Supreme Court noted that a plaintiff's precertification
stipulation binds only the single plaintiff.
Rodriguez conceded that Standard Fire poses a hurdle to the remand
order must, according the 9th Circuit's ruling on Aug. 27.
"His waiver no longer has legal effect," Judge Richard Clifton
wrote for a three-member panel. "Because the order to remand the
case to state court relied solely on that waiver, it must be
vacated and the matter remanded to district court for further
consideration."
Standard Fire effectively overruled the circuit's decision in
Lowdermilk, the Pasadena-based appellate judges said.
Under Lowdermilk, "when a class action complaint alleges damages
below the jurisdictional minimum, the removing defendant must
establish to a 'legal certainty' that the amount in controversy in
fact exceeds the jurisdictional requirement," Clifton wrote.
Lowdermilk "adopted the legal certainty standard to reinforce
plaintiff's prerogative, as master of the complaint, to avoid
federal jurisdiction by forgoing a portion of the recovery on
behalf of the putative class," he added. "That choice has been
taken away by Standard Fire. Further, Standard Fire instructs
courts to look beyond the complaint to determine whether the
putative class action meets the jurisdictional requirements."
Under Standard Fire, a defendant seeking removal of a putative
class need not prove to a legal certainty that the aggregate
amount in controversy exceeds the jurisdictional minimum, but
rather by a preponderance of evidence, the court added.
"This standard conforms with a defendant's burden of proof when
the plaintiff does not plead a specific amount in controversy,"
Clifton wrote.
In the case at hand, the District Court's decision that AT&T had
to prove to a legal certainty that Rodriguez's claim would exceed
$5 million was correct at the time based on Lowdermilk. In light
of Standard Fire, however, that decision cannot stand. The
District Court must now apply the preponderance standard to the
amount-in-controversy evidence AT&T provided to determine venue.
Defendant-Appellant was represented by:
George W. Abele (argued)
Elizabeth A. Brown
Mario C. Ortega
PAUL HASTINGS LLP
515 South Flower Street, 25th Floor
Los Angeles, CA 90071
Tel: (213) 683-6000
Fax: (213) 627-0705
E-mail: georgeabele@paulhastings.com
elizabethbrown@paulhastings.com
marioortega@paulhastings.com
- and -
Laurie E. Barnes, Esq.
AT&T Mobility Services LLC
Los Angeles, California
Plaintiff-Appellee was represented by:
Michael S. Morrison, Esq. (argued)
ALEXANDER KRAKOW & GLICK, LLP
401 Wilshire Boulevard, Suite 1000
Santa Monica, CA 90401
Tel: (310) 394-0888
Fax: (310) 394-0811
- and -
Thomas W. Falvey, Esq.
J.D. Henderson
LAW OFFICES OF THOMAS W. FALVEY
301 North Lake Avenue, Suite 800
Pasadena, CA 91101
Tel: (626) 795-0205
Fax: (626) 795-3096
- and -
Jason W. Wucetich, Esq.
Dimitrios V. Korovilas, Esq.
WUCETICH & KOROVILAS LLP
222 North Sepulveda Boulevard, Suite 2000
El Segundo, CA
Tel: (310) 335-2001
Fax: (310) 364-5201
E-mail: jason@wukolaw.com
dimitri@wukolaw.com
A copy of the 15-page Opinion dated Aug. 27, 2013, is available
from Courthouse News Service at http://is.gd/VwD4ns.
BIG 5 SPORTING: Considering Deal in Credit Card Purchases Suit
--------------------------------------------------------------
Big 5 Sporting Goods Corporation said in its July 31, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013, that it is currently considering
the settlement terms offered by the plaintiffs of a consolidated
class action lawsuit over credit card purchases.
The Company was served on these dates with these nine complaints,
each of which was brought as a purported class action on behalf of
persons who made purchases at the Company's stores in California
using credit cards and were requested or required to provide
personal identification information at the time of the
transaction:
(1) on February 22, 2011, a complaint filed in the California
Superior Court in the County of Los Angeles, entitled
Maria Eugenia Saenz Valiente v. Big 5 Sporting Goods
Corporation, et al., Case No. BC455049;
(2) on February 22, 2011, a complaint filed in the California
Superior Court in the County of Los Angeles, entitled
Scott Mossler v. Big 5 Sporting Goods Corporation, et al.,
Case No. BC455477;
(3) on February 28, 2011, a complaint filed in the California
Superior Court in the County of Los Angeles, entitled
Yelena Matatova v. Big 5 Sporting Goods Corporation, et
al., Case No. BC455459;
(4) on March 8, 2011, a complaint filed in the California
Superior Court in the County of Los Angeles, entitled Neal
T. Wiener v. Big 5 Sporting Goods Corporation, et al.,
Case No. BC456300;
(5) on March 22, 2011, a complaint filed in the California
Superior Court in the County of San Francisco, entitled
Donna Motta v. Big 5 Sporting Goods Corporation, et al.,
Case No. CGC-11-509228;
(6) on March 30, 2011, a complaint filed in the California
Superior Court in the County of Alameda, entitled Steve
Holmes v. Big 5 Sporting Goods Corporation, et al., Case
No. RG11563123;
(7) on March 30, 2011, a complaint filed in the California
Superior Court in the County of San Francisco, entitled
Robin Nelson v. Big 5 Sporting Goods Corporation, et al.,
Case No. CGC-11-508829;
(8) on April 8, 2011, a complaint filed in the California
Superior Court in the County of San Joaquin, entitled
Pamela B. Smith v. Big 5 Sporting Goods Corporation, et
al., Case No. 39-2011-00261014-CU-BT-STK; and
(9) on May 31, 2011, a complaint filed in the California
Superior Court in the County of Los Angeles, entitled
Deena Gabriel v. Big 5 Sporting Goods Corporation, et al.,
Case No. BC462213.
On June 16, 2011, the Judicial Council of California issued an
Order Assigning Coordination Trial Judge designating the
California Superior Court in the County of Los Angeles as having
jurisdiction to coordinate and to hear all nine of the cases as
Case No. JCCP4667. On October 21, 2011, the plaintiffs
collectively filed a Consolidated Amended Complaint, alleging
violations of the California Civil Code, negligence, invasion of
privacy and unlawful intrusion. The plaintiffs allege, among
other things, that customers making purchases with credit cards at
the Company's stores in California were improperly requested to
provide their zip code at the time of such purchases. The
plaintiffs seek, on behalf of the class members, the following:
statutory penalties; attorneys' fees; expenses; restitution of
property; disgorgement of profits; and injunctive relief. On
February 6, 2013, February 19, 2013, and April 2, 2013, the
Company and plaintiffs engaged in Mandatory Settlement Conferences
conducted by the court in an effort to negotiate a settlement of
this litigation.
On July 15, 2013, the Company and plaintiffs engaged in mediation
conducted by a third party mediator in an effort to negotiate a
settlement of this litigation. In connection with the settlement
efforts, the Company received from the plaintiffs an offer to
settle this litigation, which the Company is currently
considering. Based on the terms of the settlement offer, the
Company currently believes that a settlement of this litigation
will not have a material negative impact on the Company's results
of operations or financial condition. However, if the plaintiffs
and the Company are unable to negotiate a settlement, the Company
intends to defend this litigation vigorously. If this litigation
were to be resolved unfavorably to the Company, such litigation
and the costs of defending it could have a material negative
impact on the Company's results of operations or financial
condition.
El Segundo, California-based Big 5 Sporting Goods Corporation --
http://www.big5sportinggoods.com/-- is a sporting goods retailer
in the western United States, operating stores in various states
under the "Big 5 Sporting Goods" name. The Company provides a
full-line product offering in a traditional sporting goods store
format. The Company's product mix includes athletic shoes,
apparel and accessories, as well as a broad selection of outdoor
and athletic equipment for team sports, fitness, camping, hunting,
fishing, tennis, golf, snowboarding and roller sports.
BP PLC: Settles Class Action Over Tainted Gasoline for $7 Million
-----------------------------------------------------------------
CBS reports that customers of BP could be in line for a few bucks,
if they unknowingly bought tainted gasoline last summer.
WBBM Newsradio's Bernie Tafoya reports thousands of motorists
already had received reimbursement checks from BP for bad gas
bought between mid-August and early September last year at gas
stations in Illinois, Indiana, Wisconsin, and Ohio.
Other motorists were waiting out a class-action lawsuit, which
recently was settled for $7 million.
As part of the settlement, BP will cut checks for up to $50 for
people who can prove -- with a receipt -- that they bought any of
the bad gas. BP also will pay out up to $1,500 for repairs to fix
engine problems caused by the tainted fuel.
Nearly 600 gas stations in the Midwest received the tainted
gasoline, which had been contaminated with high levels of a
polymer reside that is difficult to burn in car engines. In
total, approximately 4.7 million gallons of bad gasoline were sold
at stations in Indiana, Illinois, Wisconsin, and Ohio.
More than 7,900 car owners filed claims for repairs to their
vehicles, many of which ended up stalling or having hard-starting
issues caused by the bad gas. Many vehicles ended up crippled,
and in need of significant repairs.
CALIFORNIA: District Court Ruling in "Missud" Suit Upheld
---------------------------------------------------------
The United States Court of Appeals for the Ninth Circuit affirmed
a district court ruling in MISSUD v. STATE.
Patrick Alexandre Missud, I, appealed pro se from the district
court's judgment dismissing his 42 U.S.C. Section 1983 putative
class action alleging claims for judicial and civic corruption in
the fraudulent enforcement of local regulations concerning towing,
tree root services, sidewalk repairs, building inspections, and
related tax assessments.
The Third Circuit held that:
* the district court properly dismissed Mr. Missud's claims
against the State of California on the basis of Eleventh
Amendment immunity.
* the district court properly dismissed Mr. Missud's claims
against the City and County of San Francisco, and its affiliated
departments and agencies, because he failed to allege sufficient
facts to state a cognizable claim under federal law or raise a
substantial federal issue.
* the district court did not abuse its discretion in denying
Mr. Missud's first motion for reconsideration because he failed
to establish grounds for such relief.
The Third Circuit did not review the district court's order
denying Mr. Missud's second motion for reconsideration because he
did not file an amended notice of appeal from that order.
Mr. Missud's motions dated July 17 and 24, 2013 for judicial
notice of voluminous irrelevant documents filed with the district
court, including those filed during the pendency of this appeal,
are denied, the Third Circuit concluded.
Mr. Missud's contentions regarding alleged corruption in the
federal and state judiciaries, fraud, and conspiracies against him
are unpersuasive, The Third Circuit added.
The case is PATRICK ALEXANDRE MISSUD, I, Plaintiff-Appellant, v.
STATE OF CALIFORNIA; et al., Defendants-Appellees, NO. 13-15357.
A copy of the Appeals Court's August 19, 2013 Memorandum is
available at http://is.gd/H1OeRifrom Leagle.com.
CAMPBELL SOUP: Faces Class Action Over "Heart-Check Mark"
---------------------------------------------------------
Mark Anstoetter and Madeleine McDonough, Esq. at Shook Hardy &
Bacon LLP report that a New Jersey resident has filed a putative
nationwide class action against the Campbell Soup Co. and American
Heart Association (AHA) claiming that the "Heart-Check Mark" which
AHA allows Campbell to place on more than 30 varieties of its
canned soups in exchange for a fee misleads consumers into
believing that these products meet AHA's heart-healthy nutritional
guidelines when a single serving actually contains nearly three
times the amount of sodium permitted under those guidelines.
O'Shea v. Campbell Soup Co., No. 13-4887 (U.S. Dist. Ct., D.N.J.,
filed August 13, 2013). According to the plaintiff, "Properly
characterized, the real meaning of the AHA's Heart-Check Mark
certification is, 'Unhealthy, but maybe not as bad for you as
other products.'"
Also characterizing the certification program as a "scheme," the
plaintiff alleges, "By the AHA selling, and Campbell's buying, the
right to affix the AHA's seal of approval to its products, they
falsely represent to the public that AHA-certified products
manufactured by Campbell's possess some cardiovascular benefit not
enjoyed by products that have not been certified by the AHA. In
truth, however, the only difference between AHA-certified
Campbell's products and non-certified competing products is that
Campbell's has paid money to the AHA to license its logo." The
plaintiff contends that she and class members paid a premium price
for the soup in reliance on the certification. Alleging violation
of the New Jersey Consumer Fraud Act, breach of express warranty
and unjust enrichment, the plaintiff seeks injunctive relief,
actual and treble damages, restitution and/or disgorgement,
attorney's fees, costs, and interest.
CARDTRONICS INC: Awaits Report in Suit Over Voice-Guided ATMs
-------------------------------------------------------------
Cardtronics, Inc., awaits the filing of a report and
recommendation to be issued by a court-appointed special master in
the class action lawsuit commenced by the National Federation of
the Blind related to voice-guided ATMs, according to the Company's
July 31, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended June 30, 2013.
Through its acquisition of the E*Trade ATM portfolio, the Company
became the sole defendant in the 2003 lawsuit filed by the
National Federation of the Blind, the Commonwealth of
Massachusetts, et al. and certain individuals representing a class
of similarly situated persons (the "Plaintiffs") against E*Trade
Access, Inc., et al. in the United States District Court for the
District of Massachusetts: Civil Action No. 03-11206-NMG (the
"Lawsuit"). The Plaintiffs sought to require, among other things,
that ATMs deployed by E*Trade be voice-guided. In December 2007,
the Company and Plaintiffs entered into a settlement agreement (as
modified in November 2010, the "Settlement Agreement"). In 2011,
the Plaintiffs filed a motion of contempt with the District Court
alleging that the Company had failed to fully comply with the
requirements of the Settlement Agreement. On December 15, 2011,
the District Court issued an order that required the Company to
bring all of its ATMs in compliance with the terms of the
Settlement Agreement by March 15, 2012. In August 2012, the
Plaintiffs filed their second motion of contempt, which alleged,
among other things, that the Company had failed to meet the
District Court's deadline and sought a fine of $50 per ATM for
each month that the District Court determined the Company was not
in compliance. The Company filed its response on September 28,
2012, in which it asserted that while the Company's ATMs are in
substantial compliance with the accessibility rules issued under
the American with Disabilities Act, as amended (the "ADA"),
compliance with certain terms of the Settlement Agreement would
conflict with the requirements of the ADA. The Company also asked
the District Court to appoint a special master to assist the
Company and the Plaintiffs in resolving these conflicting
requirements.
In April 2013, the District Court held a hearing in which it
indicated that it would appoint a special master to assist the
District Court in determining what sanctions should be imposed
upon the Company, but also to assist the parties in resolving the
remaining issues in the Settlement Agreement. On May 22, 2013,
the District Court issued an order appointing a special master.
Among other matters, the order requires the special master within
120 days of his appointment to issue a report and recommendation
to the District Court concerning the amount of the contempt
sanction to be assessed against the Company, which recommendation
may allocate some or all of such sanctions toward further
compliance efforts.
The Company says it is uncertain of the ultimate outcome of this
matter, but does not believe it will have a material adverse
effect upon the Company's financial statements.
Cardtronics, Inc., together with its subsidiaries, provides
automated consumer financial services through its network of
automated teller machines (ATMs) and multi-function financial
services kiosks.
CHOBANI INC: Wants Judge to Reconsider Class Action Ruling
----------------------------------------------------------
Jessica M. Karmasek, writing for Legal Newsline, reports that the
maker of a popular line of Greek yogurt is asking a federal judge
to reconsider her decision refusing to dismiss a class action
lawsuit against the company over its use of the term "evaporated
cane juice" to describe sugar.
Chobani Inc. filed its notice of motion and motion to reconsider
the court's order on its motion to dismiss the plaintiffs' second
amended complaint in the U.S. District Court for the Northern
District of California San Jose Division on Aug. 21.
Dale Giali -- dgiali@mayerbrown.com -- an attorney for Mayer Brown
LLP, who is representing Chobani in the lawsuit Kane v. Chobani
Inc. argues that the court's order recognizing an evaporated cane
juice, or ECJ, claim is predicated on a theory -- the theory that
the plaintiffs were mislead to believe that ECJ was a healthier
form of sugar -- the plaintiffs never pleaded, that contradicts
their actual allegations and that the plaintiffs have disavowed.
Chobani also contends the court's order rejecting its primary
jurisdiction as to the plaintiffs' ECJ claims did not take into
account a recent decision in Hood v. Wholesoy & Co.
In that case, a federal judge granted Wholesoy's motion to
dismiss. The issue was the company's use of the evaporated cane
juice term, and that it cannot call its product "yogurt" because
it contains soy.
Like Wholesoy argued, Chobani contends that the court should defer
to the Food and Drug Administration.
"First, the FDA is uniquely suited to interpret and apply its
technical and integrated regulations to determine if ECJ may be
listed as an ingredient and in particular whether ECJ is the
'common or usual name' of an ingredient," Mr. Giali wrote in the
yogurt maker's 15-page motion.
"Second, judicial resolution of ECJ claims based on a given
state's law would defeat the important policies underlying a
national uniform labeling standard.
"Conflicting decisions on a given state's law would expand the
chaos."
Judge Lucy Koh is overseeing the case. A hearing has been set for
Sept. 12.
COMCAST CORP: Awaits Initial OK of Settlement in Antitrust Suit
---------------------------------------------------------------
Comcast Corporation is awaiting preliminary approval of its
comprehensive settlement agreement for antitrust class action
lawsuits filed in federal district courts throughout the country,
according to the Company's July 31, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
June 30, 2013.
The Company is the defendant in 22 purported class actions filed
in federal district courts throughout the country. All of these
actions have been consolidated by the Judicial Panel on
Multidistrict Litigation in the United States District Court for
the Eastern District of Pennsylvania for pre-trial proceedings.
In a consolidated complaint filed in November 2009 on behalf of
all plaintiffs in the multidistrict litigation, the plaintiffs
allege that the Company improperly "tie" the rental of set-top
boxes to the provision of premium cable services in violation of
Section 1 of the Sherman Antitrust Act, various state antitrust
laws and unfair/deceptive trade practices acts in California,
Illinois and Alabama. The plaintiffs also allege a claim for
unjust enrichment and seek relief on behalf of a nationwide class
of the Company's premium cable customers and on behalf of
subclasses consisting of premium cable customers from California,
Alabama, Illinois, Pennsylvania and Washington. In January 2010,
the Company moved to compel arbitration of the plaintiffs' claims
for unjust enrichment and violations of the unfair/deceptive trade
practices acts of Illinois and Alabama. In September 2010, the
plaintiffs filed an amended complaint alleging violations of
additional state antitrust laws and unfair/deceptive trade
practices acts on behalf of new subclasses in Connecticut,
Florida, Minnesota, Missouri, New Jersey, New Mexico and West
Virginia. In the amended complaint, plaintiffs omitted their
unjust enrichment claim, as well as their state law claims on
behalf of the Alabama, Illinois and Pennsylvania subclasses. In
June 2011, the plaintiffs filed another amended complaint alleging
only violations of Section 1 of the Sherman Antitrust Act,
antitrust law in Washington and unfair/deceptive trade practices
acts in California and Washington. The plaintiffs seek relief on
behalf of a nationwide class of the Company's premium cable
customers and on behalf of subclasses consisting of premium cable
customers from California and Washington.
In July 2011, the Company moved to compel arbitration of most of
the plaintiffs' claims and to stay the remaining claims pending
arbitration. The West Virginia Attorney General also filed a
complaint in West Virginia state court in July 2009 alleging that
the Company improperly "tie" the rental of set-top boxes to the
provision of digital cable services in violation of the West
Virginia Antitrust Act and the West Virginia Consumer Credit and
Protection Act. The Attorney General also alleges a claim for
unjust enrichment/restitution. The Company removed the case to
the United States District Court for West Virginia, and it was
subsequently transferred to the United States District Court for
the Eastern District of Pennsylvania and consolidated with the
multidistrict litigation.
In June 2013, a comprehensive settlement agreement for all 23
cases was submitted to the District Court for preliminary
approval. Regardless of whether this settlement agreement is
approved, the Company does not expect these cases to have a
material effect on its results of operations, cash flows or
financial position.
The Company believes the claims in each of the pending actions in
this item are without merit and intends to defend the actions
vigorously. The Company says it cannot predict the outcome of any
of the actions, including a range of possible loss, or how the
final resolution of any such actions would impact the Company's
results of operations or cash flows for any one period or its
consolidated financial position. In addition, as any action nears
a trial, there is an increased possibility that the action may be
settled by the parties. Nevertheless, the final disposition of
any of the actions is not expected to have a material adverse
effect on the Company's consolidated financial position, but could
possibly be material to its consolidated results of operations or
cash flows for any one period.
Headquartered in Philadelphia, Pennsylvania, Comcast Corporation
is a global media and technology company with two primary
businesses, Comcast Cable and NBCUniversal. The Company presents
its operations in five reportable business segments: Cable
Communications, Cable Networks, Broadcast Television, Filmed
Entertainment and Theme Parks.
COMCAST CORP: Continues to Defend Antitrust Suits by Customers
--------------------------------------------------------------
Comcast Corporation continues to defend itself against antitrust
class action lawsuits brought by customers, according to the
Company's July 31, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended June 30, 2013.
The Company is defendants in two purported class actions
originally filed in December 2003 in the United States District
Courts for the District of Massachusetts and the Eastern District
of Pennsylvania. The potential class in the Massachusetts case,
which has been transferred to the Eastern District of
Pennsylvania, is the Company's customer base in the "Boston
Cluster" area, and the potential class in the Pennsylvania case is
the Company's customer base in the "Philadelphia and Chicago
Clusters," as those terms are defined in the complaints. In each
case, the plaintiffs allege that certain customer exchange
transactions with other cable providers resulted in unlawful
horizontal market restraints in those areas and seek damages under
antitrust statutes, including treble damages.
Classes of Chicago Cluster and Philadelphia Cluster customers were
certified in October 2007 and January 2010, respectively. The
Company appealed the class certification in the Philadelphia
Cluster case to the Third Circuit Court of Appeals, which affirmed
the class certification in August 2011 and denied the Company's
petition for a rehearing en banc in September 2011. In March
2010, the Company moved for summary judgment dismissing all of the
plaintiffs' claims in the Philadelphia Cluster. In April 2012,
the District Court issued a decision dismissing some of the
plaintiffs' claims, but allowing two claims to proceed to trial.
The plaintiffs' claims concerning the other two clusters are
stayed pending determination of the Philadelphia Cluster claims.
In June 2012, the U.S. Supreme Court granted the Company's
petition to review the Third Circuit Court of Appeals' ruling and
in September 2012, the trial court stayed all proceedings pending
resolution of the Supreme Court appeal.
In March 2013, the Supreme Court ruled that the class had been
improperly certified and reversed the judgment of the Third
Circuit. The matter has been returned to the District Court for
action consistent with the Supreme Court's opinion.
Headquartered in Philadelphia, Pennsylvania, Comcast Corporation
is a global media and technology company with two primary
businesses, Comcast Cable and NBCUniversal. The Company presents
its operations in five reportable business segments: Cable
Communications, Cable Networks, Broadcast Television, Filmed
Entertainment and Theme Parks.
CUPID PLC: Sued for Spamming Kids With Explicit & Profane Ads
-------------------------------------------------------------
Jonny Bonner, writing for Courthouse News Service, reports that a
"safe email" service for children claims in court that an online
dating service and others spammed kids with 110,200 ads, some of
them "explicit and profane," causing server crashes, damaged
hardware and lost profits.
ZooBuh sued eight companies and two people, in Federal Court.
Named as defendants are Cupid PLC, emarketcoupons.com, FTD.com
Inc., Lead Services Group Inc., Scoop Interactive LLC, Thompson
and Company Inc., Triangle Media Corp., Zeus Media, and Micah
Thompson and William Waggoner.
ZooBuh charges parents $1 a month for its safe-email service,
through which parents can control and monitor their children's
accounts.
Zoobuh claims the defendants began their spam attacks in January
2011.
ZooBuh filed a similar lawsuit against other defendants in June
2011. In that lawsuit, against Better Broadcasting LLC, its alter
ego Iono Interactive, and California-based Envoy Media, the court
ruled that ZooBuh was "a bona fide Internet access service and
satisfies the first part of the standing test under the CAN-SPAM
Act," Zoobuh claims in its new lawsuit.
CAN-SPAM stands for the Controlling the Assault of Non-Solicited
Pornography and Marketing Act.
In its new lawsuit, Zoobuh states: "From January 2011 to the date
of this complaint, ZooBuh has received a total of approximately
110,211 electronic-mail messages sent and/or initiated by the
defendants collectively, which independently and collectively
caused significant adverse effect to ZooBuh and which
independently and collectively, contributed to an overall spam
problem which the court recognized in Better Broadcasting
satisfied the second part of the standing test under CAN-SPAM for
ZooBuh.
"In Better Broadcasting, the court stated 'the harm ZooBuh . . .
continues to suffer, as the result of its collective spam problem
is much more significant than the mere annoyance of having to deal
with spam or the process of dealing with spam in the ordinary
course of business (i.e., installing a spam filter to flag and
discard spam) . . . ZooBuh is adversely affected by a collective
spam problem, which includes the emails in question, and . . . the
second part of the standing test is satisfied.'"
Defendants in the new include an operator of multiple online
dating websites, a floral service and tobacco sellers. Each is
identified as a sender or initiator.
Defendant Cupid, of New York, owns and operates multiple high-
volume online dating websites and, ZooBuh claims, is responsible
for sending 2,248 of the emails in question.
"The Cupid plc emails were sent to minors under the age of 18 and
contained advertisements for adult themed dating websites.
Additionally, many of the subject headings used explicit and
profane language inappropriate for the targeted recipients," the
complaint states.
FTD.com, founded as Florists' Telegraph Delivery in 1910, and
operating as Florists' Transworld Delivery, is a floral wire
service, retailer and wholesaler based in Illinois. It sent 9,188
emails, ZooBuh claims.
Lead Services Group, a California-based marketing company,
allegedly sent 1,126 unspecified emails.
Scoop Interactive, also of California, claims to operate "numerous
websites focused on the insurance and credit verticals." It sent
7,317 unspecified emails, ZooBuh says.
Thompson and Company, of Florida, sent 3,841 emails containing ads
for cigars and other smoking products, the complaint states.
Zoobuh says Triangle Media, of Delaware, sent 622 similar emails.
Zeus Media, a web marketing and development company of California,
initiated 31,700 unspecified emails.
Waggoner and Thompson initiated 46,113 and 5,883 unspecified
emails, respectively, ZooBuh claims.
Emarketcoupons.com is not described in the complaint. Its web
address, checked last week Tuesday, yielded a dead page. The
company sent 2,173 of the emails, ZooBuh claims.
"As the result of the receipt of the emails message that violate
CAN-SPAM, including the receipt of the emails at issue herein,
which, in significant part, also violate CAN-SPAM, ZooBuh has
suffered harm in the form of the following: financial expense and
burden; lost time; lost profitability; decreases in the life span
of ZooBuh's hardware; server and bandwidth spikes; server crashes;
and pre-mature hardware replacements," the complaint states.
"Each of the emails in question violates multiple CAN-SPAM
provisions.
"The majority of emails received by ZooBuh, including the emails
in question, violate the CAN-SPAM Act in one or more ways, and
contributed to a larger spam problem."
The CAN-SPAM Act, of 2003, set national standards for commercial
email distribution and is enforced by the Federal Trade
Commission.
The law prohibits email recipients from suing spammers or filing
class-action lawsuits.
ZooBuh seeks an injunction, damages of a total of $250 for each
violation of four sections of the CAN-SPAM Act, treble damages and
costs.
It is represented by:
William Kelly Nash, Es q.
Durham, Jones & Pinegar
4844 North 300 West, Suite 300
Provo, UT 84604
Tel: (801) 655-4781
Fax: (801) 375-3865
E-mail: knash@djplaw.com
DOW CHEMICAL: Liable in Civil Asbestos Lawsuit, Court Rules
-----------------------------------------------------------
LawyersandSettlements.com reports that while this settlement is
good news for the asbestos mesothelioma victim, such as it can be,
the implications are shocking given what we know about the dangers
of asbestos. The Dow Chemical Company was found liable on all
counts in a civil asbestos lawsuit filed in Louisiana state court
relating to its use of asbestos and allegedly causing cancer in
its workers. The case was decided by a Plaquemine, Louisiana
jury, which awarded $5.95 million in damages.
Dow Chemical's Louisiana division is headquartered in Plaquemine,
LA. The Dow Plaquemine Plant is the largest chemical plant in the
petro-chemical industry rich state.
The lawsuit alleged that exposures to asbestos at Dow Chemical
caused Sidney Mabile's terminal asbestos cancer, mesothelioma.
Mr. Mabile's attorneys alleged in the suit that Dow has exposed
thousands of workers to asbestos, and that Mr. Mabile is only one
of hundreds of future asbestos cancer victims also exposed at Dow.
Court documents revealed that Dow has continued to use tons of raw
asbestos in its chemical manufacturing facilities throughout the
world. Internal Dow documents showed that Dow lobbied to oppose
the Environmental Protection Agency's proposed ban of asbestos.
Court documents suggested that Dow performed a "cost per cancer"
analysis and determined that it would cost Dow over $1.2 billion
to switch all of its plants to non-asbestos processing methods.
Dow was successful in lobbying the Environmental Protection Agency
to allow Dow to continue using raw asbestos in its United States
chemical plants. Dow has continued to fight the ban of asbestos
in other countries. The European Trade Union Confederation
explains that an "[o]pposition to a blanket asbestos ban now seems
to come only from Dow Chemicals."
EBAY INC: Judge Rejects $4.75MM Consumer Class Action Settlement
----------------------------------------------------------------
Max Taves, writing for The Recorder, reports that a federal judge
on Aug. 27 rejected a proposed $4.75 million settlement between
eBay Inc. and a class of consumers, pointing to several defects
including a plan to pay some claims by crediting class members'
eBay accounts.
"The proposed settlement has obvious deficiencies, appears to
grant preferential treatment to segments of the class, and does
not appear to fall within the range of possible approval," wrote
U.S. District Judge Jon Tigar in his order in Custom LED v. EBay,
12-350. "Accordingly, the parties' motion for approval of the
settlement must be denied."
San Jose-based eBay, represented by Cooley, struck the settlement
with plaintiffs lawyers during a June mediation session and
submitted it for preliminary approval earlier this month.
But Judge Tigar took issue with several aspects of the deal,
focusing particular attention on the settlement's default method
of payment, which would be to issue eBay account credits to active
users, rather than cash payments. Under the terms of the deal,
the company would reduce credits by any amount users might owe to
eBay -- a scenario which Judge Tigar questioned. Meanwhile,
claimants without eBay accounts would be paid by check and not
subject to a reduction, creating a potential inequity among class
members, he wrote.
Custom LED, a manufacturer of motorcycle lights, sued eBay and its
subsidiaries in January 2012 for breach of contract, fraud, and
violating California's unfair competition and false advertising
laws with its "Featured Plus!" listing upgrade.
Lawyers for the class contend the upgrade did not place listings
at the top of searches across all of the company's sites as
promised and worked only for search results that were organized by
"best match," not by price, time or location. The conditions of
the upgrade were not adequately explained to users, who paid as
much as $39.95 to be boosted to the top of search results,
plaintiffs alleged.
eBay denied wrongdoing, insisting the "Featured Plus!" program
delivered what it promised. The company's lead lawyer, Cooley
partner John Dwyer, declined to comment.
The proposed settlement allocated roughly $3.35 million for class
members after attorney fees and other costs and provided that any
funds remaining would be distributed to the National Cyber
Forensics & Training Alliance and the National Consumer Law
Center, both nonprofits focused on consumer protection.
Judge Tigar questioned the cy pres distributions, requesting the
parties demonstrate a clear nexus between those organizations and
the claims of class members. The recently seated Obama-appointee
also sought fixes to a multitude of other problems he identified
with the settlement.
He said the scope of the settlement's release was "overly broad,"
improperly releasing all claims relating to "Featured Plus!"
regardless of whether they were raised in the suit. Additionally,
Judge Tigar wrote, the notice of settlement did not properly
disclose to class members key pieces of information, including how
class members can receive payment, opt out or object to the
settlement.
"The proposed notice merely instructs class member to 'follow the
specific details' listed in the notice website," Judge Tigar
complained.
Parker Young of Dallas-based Figari & Davenport, who represented
the plaintiffs, said, "the order speaks for itself." He declined
further comment.
EL PASO PIPELINE: "Allen" Class Suit Remains Pending in Delaware
----------------------------------------------------------------
The class action lawsuit styled Allen v. El Paso Pipeline GP
Company, L.L.C., et al., remains pending, according to El Paso
Pipeline Partners, L.P.'s July 31, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
June 30, 2013.
In May 2012, a unitholder of the Company filed a purported class
action in Delaware Chancery Court, alleging both derivative and
non derivative claims, against the Company, and its general
partner and its board. The Company was named in the lawsuit as
both a "Class Defendant" and a "Derivative Nominal Defendant."
The complaint alleges a breach of the duty of good faith and fair
dealing in connection with the March 2011 sale to the Company of a
25% ownership interest in Southern Natural Gas Company, L.L.C.
The Defendants' motion to dismiss was denied. The Defendants
continue to believe this action is without merit and intend to
defend against it vigorously.
El Paso Pipeline Partners, L.P., is a Delaware master limited
partnership formed in 2007 to own and operate interstate natural
gas transportation and terminaling facilities. The Company owns
Wyoming Interstate Company, L.L.C., Southern LNG Company, L.L.C.,
Elba Express Company, L.L.C., Southern Natural Gas Company,
L.L.C., Colorado Interstate Gas Company, L.L.C., Southern
Liquefaction Company, L.L.C., and Cheyenne Plains Investment
Company, L.L.C., which owns Cheyenne Plains Gas Pipeline Company,
L.L.C.
FANNIE MAE: Settles Securities Fraud Class Action for $153 Million
------------------------------------------------------------------
According to an article posted by Zoe Tillman at The Blog of Legal
Times, earlier this year, Fannie Mae and its former auditor, KPMG
LLP, reached a $153 million settlement in a securities fraud class
action. As the agreement moves towards final court approval,
lawyers for the class members are seeking more than $44 million in
fees and expenses.
The plaintiffs' lawyers are seeking 22 percent of the settlement
fund -- about $29.1 million, after certain expenses and costs are
subtracted, the maximum the lawyers said they'd request in the
settlement notice sent to class members. According to a motion
for fees filed August 16 in U.S. District Court for the District
of Columbia, the plaintiffs' lawyers are also seeking about $15.2
million for expenses.
The quest for attorney fees has been smooth so far. No class
members have filed an objection to the settlement, which included
notice that their lawyers would be seeking a maximum of 22 percent
of the settlement in fees and up to $17 million in expenses.
Class members have until September 30 to file objections. As part
of the agreement, the defendants said they wouldn't take a
position on fees.
W.B. Markovits -- bmarkovits@msdlegal.com -- of Markovits, Stock &
DeMarco in Cincinnati, Ohio, served as lead counsel for the
plaintiffs in recent years. He was not immediately available for
comment. Until 2011, prominent lawyer Stanley Chesley led the
plaintiffs' legal team, but he stepped down in the face of
disciplinary proceedings in Kentucky. He was disbarred in Kentucky
in March.
Besides Markovits' firm, Bernstein Liebhard and Cohen Millstein
Sellers & Toll served as lead counsel for the plaintiffs.
Former Fannie Mae investors, led by the Ohio attorney general's
office on behalf of state pension plans, sued Fannie Mae and its
auditor, KPMG, in 2004. The class accused the mortgage giant of
violating federal securities laws by manipulating earnings and
violating guidelines known as generally accepted accounting
principles.
In their motion for fees, the plaintiffs' lawyers said they
deserved the fees after nine years of complex litigation. The
settlement -- which they described as the largest securities class
action recovery in Washington -- "did not come without a massive
investment of resources, both time and treasure."
The plaintiffs' lawyers said they spent nearly 300,000 hours on
the case, which they handled on a contingency fee basis, according
to the motion. They said their lodestar -- the calculation of
fees -- came out to about $94 million.
"A high risk of non-payment generally counsels in favor of
increasing the fee award to attorneys who secure a recovery for
their client," they argued. "Courts are aware that without such
an incentive, plaintiffs' lawyers might be less willing to take on
cases that involve either unsettled legal issues or clients who
might otherwise go unrepresented."
The risks facing plaintiffs' counsel escalated in the months
leading up to the settlement. U.S. District Judge Richard Leon had
dismissed several former Fannie executives as individual
defendants in the case, finding the plaintiffs didn't produce
enough evidence that they acted with intent to deceive, and he was
weighing the defendants' joint motion to dismiss.
The settlement is still pending final approval by Leon, who
preliminarily approved the deal in June. A fairness hearing on
the settlement is scheduled for October 31.
FIRST ENERGY: Sued for Dust & Odor Pollution From Hatfields Plant
-----------------------------------------------------------------
Courthouse News Service reports that Hatfields Ferry Power
Station, First Energy Corp.'s coal-fired electric plant in
Masontown, Pa., pollutes the area with property-damaging dust and
foul odors, a class action claims in Federal Court.
FONTERRA COOP: Resumes Operations in Sri Lanka Plant
----------------------------------------------------
Bharatha Mallawarachi, writing for The Associated Press, reports
that New Zealand diary giant Fonterra said on Aug. 28 that it has
resumed operations in Sri Lanka after temporarily closing its
plant out of concern for the safety of its staff.
Operations in Colombo were temporarily halted to ensure the safety
of about 755 employees after members and supporters of a
government-allied political party held a protest near Fonterra's
office, accusing the company of selling tainted milk.
"I am now confident that our people are safe and the business is
ready to resume operations and continue selling high quality dairy
nutrition to Sri Lankan people," said Fonterra Chief Executive
Theo Spierings in a statement posted on the company's web site.
Fonterra recalled infant formula earlier this month after
announcing it discovered the presence of botulism bacteria in some
of its products. The company has since retested the product and
found it free of the bacteria.
In mid-August, a nurses' trade union won a court order forcing
Fonterra to suspend sales and advertising of its products after
Sri Lanka's Health Ministry said tests showed that some imported
Fonterra milk products contained traces of the agricultural
chemical dicyandiamide.
Health authorities asked Fonterra to recall the tainted batches
from the market. The company says it complied.
The court lifted the suspension on Aug. 23.
FONTERRA COOP: Botulism Scare Likely False Alarm, NZ Officials Say
------------------------------------------------------------------
Nick Perry, writing for The Associated Press, reports that a
botulism scare that damaged New Zealand's international reputation
for providing top quality and safe dairy products was likely a
false alarm.
New Zealand government officials said on Aug. 28 they had found no
sign of botulism bacteria after retesting ingredients used in
recalled milk products.
Dairy company Fonterra sparked a global recall of infant formula
this month after announcing it had discovered the presence of
botulism bacteria in some of its whey protein concentrate.
But New Zealand's Ministry of Primary Industries announced on
Aug. 28 that its own extensive retesting of the concentrate
indicated the presence of another, less dangerous type of bacteria
but not the botulism bacteria.
Officials said the bacteria they found poses no health risk but
could spoil the product in high quantities.
Officials sought to reassure international markets on Aug. 28 by
lifting their own warnings about affected Fonterra products.
Several countries have instituted limited bans on New Zealand
dairy products.
New Zealand officials said they conducted 195 tests in
laboratories in New Zealand and the United States. They concluded
that the bacteria in the whey concentrate were Clostridium
sporogenes, and not the Clostridium botulinum initially identified
by Fonterra's tests.
Fonterra Chief Executive Theo Spierings said he was "very
relieved" at the latest results.
"It's good news it's all clear for us regarding this recall," he
said.
Mr. Spierings said the company acted quickly and out of an
abundance of caution in triggering the recall and he didn't regret
that. He said the initial Fonterra tests were performed by
government agency AgResearch. He declined to discuss what may have
gone wrong in those tests.
Mr. Spierings said Fonterra remained concerned about the
contamination of its products, even though it wasn't as bad as
first thought.
The company earlier identified dirty pipes in a Waikato factory as
causing the contamination.
Earlier in August, Mr. Spierings traveled to China to perform
damage control in that key market. New Zealand relies on dairy
exports to power its economy.
FORD MOTOR: Appeals Court Overturns $29MM Class Action Verdict
--------------------------------------------------------------
David Gialanella, writing for New Jersey Law Journal, reports that
a federal appeals court has overturned a $29 million jury verdict
against Ford Motor Co. in a class-action suit over its withdrawal
from the heavy-truck market in 1997.
The U.S. Court of Appeals for the Third Circuit held on Aug. 26
that the company did not breach sales contracts with dealers when
it ceased production of the trucks because it continued to
manufacture and distribute "company products" as required.
The term "company products" as used in the contract "includes not
only heavy trucks, but also Ford parts and accessories," the
judges said in Bayshore Ford Truck Sales Inc. v. Ford Motor Co.
The 11 dealers who sued claimed the discontinuance of Ford's
heavy-truck manufacturing operation, which years earlier had
become unprofitable, constituted a breach of contract. Heavy
trucks include semitrailers used to haul freight.
In 2005, U.S. District Judge Jose Linares in Newark granted the
dealers summary judgment on liability, finding the contract
allowed Ford to change or discontinue product lines but, without
properly terminating the contracts, the company "did not have the
right to stop supplying heavy trucks altogether."
The $29 million award came after a bellwether damages trial in May
and June 2012. Ford appealed both.
U.S. Circuit Judges Jane Roth, Marjorie Rendell and D. Brooks
Smith called "unpersuasive" the plaintiffs' claim that the
contract required Ford to provide parts and vehicles, not just
parts.
Ford's "obligation to provide one product . . . is severable from
its obligation to provide other products," Judge Roth wrote for
the panel.
The litigation began in 1999, two years after Ford sold its heavy-
truck manufacturing operation to Portland, Ore.-based Freightliner
for $300 million and agreed to stay out of that line for at least
10 years. In 1996 alone, Ford lost $131 million on its heavy-
truck business.
However, Ford continued distributing parts and accessories, which
the dealers continued to sell and to use in performing lucrative
warranty work on Ford vehicles.
GOOGLE INC: Consumer Watchdog Balks at Cy Pres Recipients
---------------------------------------------------------
Consumer Watchdog disclosed that it joined the Electronic Privacy
Information Center (EPIC) and three other public interest groups
on Aug. 22 in opposing a proposed $8.5 million settlement in a
class action suit against Google for privacy violations in the way
it handled users' search data because of at least "three obvious
deficiencies" in the proposal.
In a letter to Judge Edward J. Davila, the groups wrote that the
proposed settlement should be rejected because: "(1) it fails to
require Google to make any substantive changes to its business
practices; (2) it provides no monetary relief to the class; and
(3) the proposed cy pres allocations do not meet the Ninth
Circuit's requirements for alignment with the interests of class
members."
The letter from EPIC, Consumer Watchdog, the Center for Digital
Democracy, Patient Privacy Rights, and Privacy Rights
Clearinghouse concluded:
"The absence of a benefit to the class combined with the proposed
allocation of awards to institutions not aligned with the
interests of class members is not accidental. Proposed class
counsel, seeking to settle the matter and obtain their fees, have
prioritized their own personal financial interests above the
interests of the Class. It may serve their interests to have the
preliminary settlement approved; it serves the putative Class
members not all. For these reasons, the preliminary settlement
agreement should be rejected."
A copy of the public interest groups' letter is available at:
http://is.gd/x1j1HJ
"Bad settlements seriously undermine the effectiveness of class
action suits in protecting consumers against corporate
wrongdoing," said John M. Simpson, Consumer Watchdog's Privacy
Project director. "They do nothing but fatten the pockets of the
attorneys."
The suit charges that Google shared search queries with third
parties without the searchers knowing about it or giving them
permission to do so.
A copy of the proposed settlement is available at:
http://is.gd/GBRluq
Under the proposed settlement, Google won't change its business
practices, but will change its Privacy Policy. "It is absurd to
argue that a benefit is provided to the class where the company
makes no material change in its business practices and is allowed
to continue the practice that provides the basis for the putative
class action," the letter said.
The letter noted that the suit was brought under laws that provide
statutory damages of as much as $1,000 per violation. "Given the
potential statutory damages at stake, the omission of any monetary
relief to class members is a glaring deficiency," the letter said.
Cy pres awards are a "next best" way of distributing settlement
funds when it would be difficult to distribute the money to class
members, but the recipients should further the interests of the
class. "In fact, of the seven organizations that would receive
the cy pres funds under the Parties' preliminary proposal, only
one of these organizations -- the World Privacy Forum -- has the
protection of privacy as a mission and is aligned with the
interests of class members," the groups wrote.
Besides the World Privacy Forum, the settlement proposes giving
money to Carnegie-Mellon, Chicago-Kent College of Law Center for
Information, Society, and Policy, Berkman Center for Internet and
Society at Harvard University, Stanford Center for Internet and
Society, MacArthur Foundation, and AARP, Inc.
Commenting on the choice of the cy pres recipients the groups
wrote:
"It may be significant that several of the proposed recipients of
cy pres funds are favored charities of defendant Google, which
routinely provides funding to these organizations for the benefit
of Google. As the Ninth Circuit has stated, 'it seems somewhat
distasteful to allow a corporation to fulfill its legal and
equitable obligations through tax-deductible donations to third
parties.' Furthermore, in terms of deterrence, the Ninth Circuit
considers such schemes a 'paper tiger.' We also note a disturbing
amount of overlap between the proposed cy pres recipients and the
alma maters of the counsel in this matter: proposed class counsel
Michael J. Aschenbrener (J.D., Chicago-Kent College of Law) and
Kassra P. Nassiri (M.A., Stanford; J.D., Harvard); and defense
counsel Eric Butler Evans (A.B., A.M., Harvard University). That
such ties exist does not preclude the award of cy pres funds to
these institutions, but they clearly cannot properly provide the
basis."
The groups recommended the court use a cy pres application process
to protect the interests of the class. "We also note that in
other similar matters, courts have asked parties to set up an
objective application process that provides a basis to select
cy pres recipients to ensure that the interests of the class are
served and to protect against conflicts of interest. For example,
in In re Google Buzz Privacy Litigation the court established a
formal application process and asked each organization to provide
detailed information that would justify the cy pres award," they
wrote.
A hearing on the case, In re Google Referrer Header Privacy
litigation, Case 5:10-cv-04809-EJD, was scheduled before Judge
Edward J. Davila at 9 am Friday, Aug. 23, in Federal District
Court in San Jose, CA.
GRUMA CORP: Faces Class Action Over Tortilla Chip False Ad Claims
-----------------------------------------------------------------
LawyersandSettlements.com reports that a consumer fraud class
action lawsuit was recently filed against Gruma Corp., the
manufacturers of Mission Tortilla Chips, alleging the chips
contain GMOs, contrary to the advertising claims that the product
is all natural.
Nichole Griffith, who filed the tortilla chips lawsuit entitled,
Mission Tortilla Chips Class Action Lawsuit is Griffith v. Gruma
Corporation, Case No. 9:13-cv-80791, in the U.S. District Court
for the Southern District of Florida, alleges that Gruma
deliberately misleads customers by promising that its Mission
tortilla chips are natural even though they are allegedly made
with genetically modified corn.
Specifically, the lawsuit states "The product is simply not 'All
Natural,' and it would be unreasonable for defendant to contend
otherwise." Additionally, "Genetically modified corn products
contain genes and/or DNA that would not normally be in them, and
that cannot be achieved through traditional crossbreeding, and are
thus not natural, thereby causing the product to fail to be 'all
natural.'" Ms. Griffith alleges Gruma knew, or should have known,
that its products contain genetically modified ingredients.
According to her lawsuit, Ms. Griffith claims that had she been
aware that GMO corn was allegedly used in the production of
Mission tortilla chips, she would not have purchased the products,
and especially not at the premium price. Instead, the lawsuit
contends that Griffiths relied on Gruma's representations that the
chips were "all natural" and she assumed that they did not contain
GMO ingredients.
HAWAII: 9th Cir. Tosses Age Limit to Attend High School
-------------------------------------------------------
Tim Hull, writing for Courthouse News Service, reports that a
Hawaiian law that bars all students from public school after age
20 violates federal law, the 9th Circuit ruled Aug. 28, 2013.
The federal appeals court in Honolulu found that Act 163, which
the Hawaii Legislature passed in 2010, contradicts the federal
Individuals with Disabilities Education Act (IDEA) because it
applies to all students, including those with special needs.
The measure prohibits students from attending public high schools
in Hawaii if they turn 20 before the first day of classes. Most
students who are aged-out of regular school may attend adult-
education diploma programs that the state offers, but these
programs provide no services for special-needs and disabled
students.
Four such students and the Hawaii Disability Rights Center filed a
putative class action alleging that the law ran counter to the
IDEA, the Americans with Disabilities Act (ADA) and the
Rehabilitation Act. A federal judge agreed to certify the class,
but eventually ruled for the state on all of its claims.
U.S. District Judge David Ezra found, among other things, that the
law did not violate the IDEA because the adult-education classes
were not meant to "provide the equivalent of a secondary school
education to general education students."
A unanimous three-judge appellate panel found otherwise and partly
reversed and remanded on Aug. 28. The adult-education programs are
indeed secondary schools, offering as they do a free education up
to grade 12, according the ruling. This being the case, Hawaii, by
enacting Act 163, now offers students between the ages of 20 and
22 a free education only if they are not disabled, the panel
found.
"Act 163 makes some 20- year-old and all 21-year-old students
ineligible for public education in Hawaii," Judge D.W. Nelson
wrote for the panel. "For disabled students, the Act functions as
an age limit on eligibility for IDEA services."
Plaintiffs-Appellants were represented by:
Paul Alston, Esq.
ALSTON HUNT FLOYD & ING
1001 Bishop Street, Suite 1800
Honolulu, HI 96813
Tel: (808) 524-1800
Fax: (808) 524-4591
- and -
Jason H. Kim, Esq. (argued)
SCHNEIDER WALLACE COTTRELL BRAYTON KONECKY, LLP
180 Montgomery Street, Suite 2000
San Francisco, CA 94104
Tel: (415) 421-7100
Fax: (415) 421-7105
- and -
Matthew C. Bassett, Esq.
Jennifer V. Patricio, Esq.
HAWAII DISABILITY RIGHTS CENTER
1132 Bishop Street, Suite 2102
Honolulu, HI 96813
Tel: (808) 949-2922
Fax: (808) 949-2928
Defendant-Appellee was represented by:
David M. Louie, Esq.
Carter K. Siu, Esq. (argued)
Holly T. Shikada, Esq.
Department of the Attorney General
Honolulu, Hawaii
A copy of the 23-page Opinion dated Aug. 28, 2013, is available
from Courthouse News Service at: http://is.gd/fG4ok6
HOSPIRA INC: Defends "Sterling" Securities Suit in Illinois
-----------------------------------------------------------
Hospira, Inc., is defending a securities class action lawsuit
brought by the City of Sterling Heights General Employees'
Retirement System, according to the Company's July 31, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013.
Hospira and certain of its corporate officers and former corporate
officers are defendants in a lawsuit alleging violations of the
Securities and Exchange Act of 1934: City of Sterling Heights
General Employees' Retirement System, Individually and on behalf
of all others similarly situated vs. Hospira, Inc., F. Michael
Ball, Thomas E. Werner, James H. Hardy, Jr., and Christopher B.
Begley, second amended complaint filed March 15, 2013, and pending
in the United States District Court for the Northern District of
Illinois. James Hardy has been dismissed as a defendant in the
lawsuit. The lawsuit alleges, generally, that the defendants
issued materially false and misleading statements regarding
Hospira's financials and business prospects and failed to disclose
material facts affecting Hospira's financial condition. The
lawsuit alleges a class period from February 4, 2010 (announcement
of Q4, 2009 financial results) through October 17, 2011 (Hospira
announced preliminary financial results for Q3, 2011 on October
18, 2011). The lawsuit seeks class action status and damages
including interest, attorneys' fees and costs.
Headquartered in Lake Forest, Illinois, Hospira, Inc., is a
provider of injectable drugs and infusion technologies that it
develops, manufactures, distributes and markets globally. Through
a broad, integrated portfolio, Hospira is uniquely positioned to
Advance WellnessTM by improving patient and caregiver safety while
reducing healthcare costs.
IMH FINANCIAL: Has Final Approval of Unitholders Suit Settlement
----------------------------------------------------------------
IMH Financial Corporation received final approval of its
settlement of a lawsuit titled In re IMH Secured Loan Fund
Unitholders Litigation, according to the Company's July 31, 2013,
Form 8-K filing with the U.S. Securities and Exchange Commission.
Following a Settlement Hearing held on July 18, 2013, the Court of
Chancery in the State of Delaware entered a Final Order and
Judgment on July 26, 2013, in In re IMH Secured Loan Fund
Unitholders Litigation ("Litigation") which was pending against
IMH Financial Corporation ("IMH"), certain affiliated and
predecessor entities, and certain former and current officers and
directors of IMH. The Final Order and Judgment approves the terms
of the settlement of the Litigation with slight modifications,
which was memorialized in a Memorandum of Understanding ("MOU").
IMH's obligations under the settlement and Final Order are
contingent upon Final Approval of the settlement. Final Approval
will occur at the expiration of the period to file appeals or, if
any appeal is filed, upon the final resolution of any appeal.
Scottsdale, Arizona-based IMH Financial Corporation --
http://www.imhfc.com/-- is a real estate investor and finance
company based in the southwest United States with over a decade of
experience in various and diverse facets of the real estate
lending and investment process, including origination,
acquisition, underwriting, documentation, servicing, construction,
enforcement, development, marketing, and disposition.
JOHN HANCOCK: Judge Dismisses Unclaimed Property Class Action
-------------------------------------------------------------
Arthur D. Postal, writing for LifeHealthPro, reports that a
federal district court judge in Massachusetts has called into
question the very basis for the aggressive efforts of states to
collect the unclaimed proceeds of life insurance policies.
In a decision handed down on Aug. 20, Judge Joseph Tauro said that
Massachusetts and Illinois allow insurance companies to require a
beneficiary to furnish proof of death before paying policy
proceeds.
The case is Richard Feingold v. John Hancock Life Insurance Co.
The judge acted in dismissing a class action lawsuit against John
Hancock Life Insurance Co.
A lawsuit filed in July in California against state Comptroller
John Chiang makes a similar claim.
An industry lawyer who asked not to be named noted that the
Feingold decision is the second recent instance where a court has
rejected a plaintiff's attempt to impart liability on a life
insurer for breach of an alleged obligation to engage in efforts
to determine whether insureds have died before a claim for death
benefits is submitted.
The first was in Andrews v. Nationwide Mutual Insurance Company,
another putative class action, where, in October 2012, Ohio's
Court of Appeals affirmed dismissal of the complaint, holding that
the defendant companies did not have a duty under the insurance
contract to search the Social Security Death Master File for
potentially deceased insureds, the lawyer said.
All courts addressing this issue have ruled that insurers do not
have a duty to search the Social Security Administration's Death
Master File. The law provides no support for a "duty to search"
in states which have not adopted NCOIL type legislation," said
Phillip E. Stano -- phillip.stano@sutherland.com -- a partner at
Sutherland, Asbill & Brennan in Washington. Mr. Stano represents
a number of clients in litigation and negotiations with state
regulators on this issue.
In this most recent decision, Judge Tauro relied on "established
principles of insurance law," including that an insurance policy
may require a beneficiary to furnish proof of death before paying
policy proceeds, according to an alert on this decision issued by
Jorden Burt LLP's Unclaimed Property Task Force.
The alert said that the court found that "Hancock's practice of
requiring the life insurance policy beneficiary to submit proof of
death before payment comports with both Massachusetts and Illinois
law."
As a result, the judge held that "plaintiff's claim that Hancock
engaged in unfair and deceptive conduct in violation of state
consumer protection laws failed," according to the alert.
It also said Judge Tauro concluded that the same established
principles of insurance law undermined the unjust enrichment,
conversion, and declaratory relief claims.
Because the insurance policy and state law permitted Hancock to
hold policy proceeds until proof of death was provided, plaintiff
could not establish that Hancock's actions violated "fundamental
principles of justice, equity and good conscience" sufficient to
state an unjust enrichment claim, Judge Tauro said in his
decision.
The alert said the court also rejected plaintiff's argument that a
Global Resolution Agreement (GRA) between Hancock and the
unclaimed property administrators of several states altered
Hancock's obligations under established law.
In addition to noting that this issue was not raised in
plaintiff's complaint, the court held that nothing suggests
Hancock and the states intended plaintiff to be a third party
beneficiary of the GRA.
Unclaimed property probes are the No. 1 regulatory issue for
insurance companies at this time.
More than 40 states are conducting audits of insurance companies.
Chiang also recently filed suit making the same claims against
Kemper Insurance Co. of Chicago, formerly Unitrin, the parent of
three debit insurance companies, or those that issue small face-
value policies.
At least 44 states are using outside auditors to conduct probes of
the unclaimed property practices of the largest insurers.
In addition, a hearing is scheduled in September in a lawsuit
filed by the West Virginia treasurer against 68 insurance
companies nationwide.
The probes are on three tracks: State insurance regulators, state
treasurers/unclaimed property agencies and a market conduct exam.
They are dealing with two sets of regulators: Unclaimed property
administrators or treasures vs. state insurance commissioners.
And there are two sets of agreements per company: A Global
Resolution Agreement (GRA) with administrators/state treasurers
and a Resolution Settlement Agreement (RSA) with insurance
commissioners.
"Moreover, GRAs look backwards; RSA look forward," according to
one industry lawyer. "The outside auditors make more money -- 10
percent to 13 percent on the GRAs -- so they are more willing to
work with state administrators/treasurers," according to another
industry lawyer.
The suit was filed on behalf of Feingold as lead plaintiff in
February. It said Feingold was the beneficiary of a life
insurance policy purchased in1945 by his mother, Mollie.
She died in 2006, but he learned that she had the policy only in
2010, through a website on unclaimed property that said he was
owed $459.
According to the lawsuit, he took that money, but, only received
an additional $1,349.71 "without explanation as to why this money
was not escheated to the state of Illinois when the dividend
monies were escheated or explaining with any degree of certainty
what the check was for."
It was likely prompted by the settlement John Hancock reached last
November regarding its unclaimed property policies with the
insurance departments of six states.
KAISER PERMANENTE: Blumenthal Nordrehaug Files Class Action
-----------------------------------------------------------
On August 9, 2013, the San Francisco labor lawyers at Blumenthal,
Nordrehaug & Bhowmik filed a class action complaint claiming
Kaiser Permanente failed to pay their Operations Specialist
employees overtime wages as a result of classifying these
employees as exempt form overtime pay. Kaye v. Kaiser Foundation
Health Plan, Inc., Case No. RG13691161 is currently pending in the
Alameda County Superior Court for the State of California.
The overtime class action filed against the health care behemoth
alleges Kaiser Permanente wrongfully classified people employed in
the position of "Operations Specialist" as exempt v. non-exempt
employees and that the Operations Specialists should have been
paid overtime wages for all their overtime hours worked.
Specifically the Complaint states that the Operations Specialists
employed by Kaiser spent the vast majority of their working day
printing, folding, and mailing health authorization forms and that
this work allegedly did not meet the level of work necessary to
exempt an employee from overtime pay. As a result, the lawsuit
claims that current and former Operations Specialists employed by
Kaiser Permanente should now be able to seek back overtime pay for
all their overtime hours worked.
The San Francisco employment attorneys at Blumenthal, Nordrehaug &
Bhowmik have represented thousands of employees in the State of
California in various lawsuits including wrongful termination in
California, class actions for unpaid overtime, unpaid business
expenses, and missed meal and rest breaks. If you would like free
California labor law advice, call one of their experienced
attorneys today at (415) 935-3957
KMART CORP: Court Gives Preliminary OK to Seating Case Settlement
-----------------------------------------------------------------
Jonny Bonner, writing for Courthouse News Service, reports Kmart
can pay $280,000 to California cashiers who were allegedly denied
"suitable" seats, a federal judge ruled, giving preliminary
approval to a settlement.
Lisa Garvey sued the store's owner, Sears Holding Management, in
April 2011, and the case later morphed into a federal class action
against Kmart.
Garvey claimed the big-box store violated California's wage order
since Labor Code Section 1198 and Section 14(A) of Industrial
Welfare Commission Wage Order 7-2001 provide that: "All working
employees shall be provided with suitable seats when the nature of
the work reasonably permits the use of seats."
U.S. District Judge William Alsup refused, however, to order
summary judgment against the store in April 2012, concluding the
wage order did not require employees to affirmatively request a
seat. The decision also found that the wage order did apply to
Kmart cashiers and that there was a genuine issue as to whether
the work of Kmart cashiers reasonably permitted seats.
Though Garvey had sought to represent 5,600 cashiers from 100
Kmart stores in California, the court narrowed that number to 71
cashiers from the Tulare location where Garvey worked.
In June 2013, Alsup certified Collette Delbridge to represent a
class of cashiers from the Kmart in Redlands, Calif.
On Aug. 23, Alsup granted preliminary approval of the proposed
settlement.
Terms require Kmart to pay $280,000 to cover a California Labor &
Workforce Development Agency payment, class members' settlement
shares, incentive awards for named plaintiffs and class counsel
expenses.
Counsel is expected to seek reimbursement of $150,600, the five-
page ruling states.
Tulare class members will receive a $100 settlement share on
average, and Redlands members will receive about $150, according
to the ruling.
"No class members shall receive a settlement share under $25 or
over $200," settlement terms state.
Notice of the settlement must be mailed to class members by
Sept. 23, and objections must be made in writing and postmarked by
Nov. 22.
A class member's failure to opt out in a timely manner releases
Kmart from "the claim that Kmart should have provided them with
suitable seats while working at Kmart," including "all other
claims for civil or statutory penalties . . . all claims for lost
wages and benefits, emotional distress, punitive damages and
attorney's fees," according to the settlement terms.
Such release does not, however, include future claims.
Parties must move for final approval of the settlement by Nov. 29,
Alsup ruled, and counsel must move for expenses and incentive
awards to named plaintiffs by Jan. 3, 2014.
The motion for expenses and incentive awards is scheduled to be
heard on Jan. 9, 2014.
A copy of Judge Alsup's 5-page order is available from Courthouse
News Service at: http://is.gd/vo19PD
MASTERCARD INC: Awaits Order in ATM Operators and Consumers Suits
-----------------------------------------------------------------
MasterCard Incorporated is awaiting a court decision in connection
with the request of the plaintiffs in the ATM-related lawsuits to
amend their complaints, according to the Company's July 31, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended June 30, 2013.
In October 2011, a trade association of independent Automated
Teller Machine ("ATM") operators and 13 independent ATM operators
filed a complaint styled as a class action lawsuit in the U.S.
District Court for the District of Columbia against both
MasterCard and Visa (the "ATM Operators Complaint"). The
Plaintiffs seek to represent a class of non-bank operators of ATM
terminals that operate ATM terminals in the United States with the
discretion to determine the price of the ATM access fee for the
terminals they operate. The Plaintiffs allege that MasterCard and
Visa have violated Section 1 of the Sherman Act by imposing rules
that require ATM operators to charge non-discriminatory ATM
surcharges for transactions processed over MasterCard's and Visa's
respective networks that are not greater than the surcharge
charged for transactions over other networks accepted at the same
ATM. The Plaintiffs seek both injunctive and monetary relief
equal to treble the damages they claim to have sustained as a
result of the alleged violations and their costs of lawsuit,
including attorneys' fees. The Plaintiffs have not quantified
their damages although they allege that they expect damages to be
in the tens of millions of dollars.
Subsequently, multiple related complaints were filed in the U.S.
District Court for the District of Columbia alleging both federal
antitrust and multiple state unfair competition, consumer
protection and common law claims against MasterCard and Visa on
behalf of putative classes of users of ATM services (the "ATM
Consumer Complaints"). The claims in these actions largely mirror
the allegations made in the ATM Operators Complaint, although
these complaints seek damages on behalf of consumers of ATM
services who pay allegedly inflated ATM fees at both bank and non-
bank ATM operators as a result of the defendants' ATM rules. The
Plaintiffs seek both injunctive and monetary relief equal to
treble the damages they claim to have sustained as a result of the
alleged violations and their costs of lawsuit, including
attorneys' fees. The Plaintiffs have not quantified their damages
although they allege that they expect damages to be in the tens of
millions of dollars.
In January 2012, the plaintiffs in the ATM Operators Complaint and
the ATM Consumer Complaints filed amended class action complaints
that largely mirror their prior complaints. MasterCard moved to
dismiss the complaints for failure to state a claim. In February
2013, the district court granted MasterCard's motion to dismiss
the complaints and the plaintiffs have since filed a motion
seeking approval to amend their complaints.
Based in Purchase, New York, MasterCard Incorporated and its
consolidated subsidiaries, including MasterCard International
Incorporated, is a technology company in the global payments
industry that connects consumers, financial institutions,
merchants, governments and businesses worldwide, enabling them to
use electronic forms of payment instead of cash and checks.
MasterCard offers a wide range of payment solutions, that enable
the development and implementation of credit, debit, prepaid,
commercial and related payment programs and solutions for
consumers and merchants. MasterCard manages a family of well-
known, widely accepted payment brands, including MasterCard(R),
Maestro(R) and Cirrus(R), which its customers use in their payment
programs and solutions.
MASTERCARD INC: Defends Interchange Fee Suits Pending in Canada
---------------------------------------------------------------
MasterCard Incorporated continues to defend itself against class
action lawsuits over interchange fees in Canada, according to the
Company's July 31, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended June 30, 2013.
Interchange fees represent a sharing of payment system costs among
the financial institutions participating in a four-party payment
card system such as MasterCard's. Typically, interchange fees are
paid by the acquirer to the issuer in connection with purchase
transactions initiated with the payment system's cards. These
fees reimburse the issuer for a portion of the costs incurred by
it in providing services which are of benefit to all participants
in the system, including acquirers and merchants. MasterCard or
its customer financial institutions establish default interchange
fees in certain circumstances that apply when there is no other
interchange fee arrangement between the issuer and the acquirer.
MasterCard establishes a variety of interchange rates depending on
such considerations as the location and the type of transaction,
and collects the interchange fee on behalf of the institutions
entitled to receive it and remits the interchange fee to eligible
institutions. MasterCard's interchange fees and other practices
are subject to regulatory and/or legal review and/or challenges in
a number of jurisdictions, including several proceedings. At this
time, the Company says it is not possible to determine the
ultimate resolution of, or estimate the liability related to, any
of these interchange proceedings (except as indicated), as the
proceedings involve complex claims and/or substantial
uncertainties and, in some cases, could include unascertainable
damages or fines. Except as described, no provision for losses
has been provided in connection with them. Some of the
proceedings could have a significant impact on the Company's
customers in the applicable country and on MasterCard's level of
business in those countries. The proceedings reflect the
significant and intense legal, regulatory and legislative scrutiny
worldwide that interchange fees and acceptance practices have been
receiving. When taken as a whole, the resulting decisions,
regulations and legislation with respect to interchange fees and
acceptance practices may have a material adverse effect on the
Company's prospects for future growth and its overall results of
operations, financial position and cash flows.
In December 2010, the Canadian Competition Bureau (the "CCB")
filed an application with the Canadian Competition Tribunal to
strike down certain MasterCard rules related to point-of-sale
acceptance, including the "honor all cards" and "no surcharge"
rules. On July 23, 2013, the Competition Tribunal issued a
decision in MasterCard's favor and dismissed the CCB's
application. The CCB has the right to appeal the decision.
In December 2010, a complaint styled as a class action lawsuit was
commenced against MasterCard in Quebec on behalf of Canadian
merchants. That lawsuit essentially repeated the allegations and
arguments of the CCB application to the Canadian Competition
Tribunal and sought compensatory and punitive damages in
unspecified amounts, as well as injunctive relief. In March 2011,
a second purported class action lawsuit was commenced in British
Columbia against MasterCard, Visa and a number of large Canadian
financial institutions, and in May 2011 a third purported class
action lawsuit was commenced in Ontario against the same
defendants. These lawsuits allege that MasterCard, Visa and the
financial institutions have engaged in a conspiracy to increase or
maintain the fees paid by merchants on credit card transactions
and establish rules which force merchants to accept all MasterCard
and Visa credit cards and prevent merchants from charging more for
payments with MasterCard and Visa premium cards. The British
Columbia lawsuit seeks compensatory damages in unspecified
amounts, and the Ontario lawsuit seeks compensatory damages of $5
billion. The British Columbia and Ontario lawsuits also seek
punitive damages in unspecified amounts, as well as injunctive
relief, interest and legal costs. In April 2012, the Quebec
lawsuit was amended to include the same defendants and similar
claims as in the British Columbia and Ontario lawsuits. With
respect to the status of the proceedings: (1) the Quebec lawsuit
has been stayed, (2) the Ontario lawsuit is being temporarily
suspended while the British Columbia lawsuit proceeds, and (3) the
British Columbia court held a class certification hearing in April
2013.
Additional complaints styled as class actions have been filed in
Saskatchewan and Alberta. The claims in these complaints largely
mirror the claims in the British Columbia and Ontario lawsuits.
If the CCB's challenge and/or the class action law lawsuits are
ultimately successful, negative decisions could have a significant
adverse impact on the revenue of MasterCard's Canadian customers
and on MasterCard's overall business in Canada and, in the case of
the private lawsuits, could result in substantial damage awards.
Based in Purchase, New York, MasterCard Incorporated and its
consolidated subsidiaries, including MasterCard International
Incorporated, is a technology company in the global payments
industry that connects consumers, financial institutions,
merchants, governments and businesses worldwide, enabling them to
use electronic forms of payment instead of cash and checks.
MasterCard offers a wide range of payment solutions, that enable
the development and implementation of credit, debit, prepaid,
commercial and related payment programs and solutions for
consumers and merchants. MasterCard manages a family of well-
known, widely accepted payment brands, including MasterCard(R),
Maestro(R) and Cirrus(R), which its customers use in their payment
programs and solutions.
MASTERCARD INC: Approval of US Merchant Suits Deal Under Appeal
---------------------------------------------------------------
Objectors have appealed from the final order approving MasterCard
Incorporated's settlement of the U.S. Merchant and Consumer
Litigations, according to the Company's July 31, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended June 30, 2013.
Commencing in October 1996, several class action lawsuits were
brought by a number of U.S. merchants against MasterCard
International and Visa U.S.A., Inc. challenging certain aspects of
the payment card industry under U.S. federal antitrust law. The
plaintiffs claimed that MasterCard's "Honor All Cards" rule (and a
similar Visa rule), which required merchants who accept MasterCard
cards to accept for payment every validly presented MasterCard
card, constituted an illegal tying arrangement in violation of
Section 1 of the Sherman Act. In June 2003, MasterCard
International signed a settlement agreement to settle the claims
brought by the plaintiffs in this matter, which the Court approved
in December 2003. Pursuant to the settlement, MasterCard agreed,
among other things, to create two separate "Honor All Cards" rules
in the United States -- one for debit cards and one for credit
cards.
In addition, individual or multiple complaints have been brought
in 19 states and the District of Columbia alleging state unfair
competition, consumer protection and common law claims against
MasterCard International (and Visa) on behalf of putative classes
of consumers. The claims in these actions largely mirror the
allegations made in the U.S. merchant lawsuit and assert that
merchants, faced with excessive interchange fees, have passed
these overhead charges to consumers in the form of higher prices
on goods and services sold. MasterCard has successfully resolved
the cases in all of the jurisdictions except California, where
there continues to be outstanding cases. In September 2009, the
parties to the California state court actions executed a
settlement agreement which required a payment by MasterCard of $6
million, subject to approval by the California state court. In
August 2010, the court granted final approval of the settlement,
subsequent to which MasterCard made the payment required by the
settlement agreement. The plaintiff from the Attridge action and
three other objectors filed appeals of the settlement approval
order. In January 2012, the Appellate Court reversed the trial
court's settlement approval and remanded the matter to the trial
court for further proceedings. In August 2012, the parties in the
California consumer actions filed a motion seeking approval of a
revised settlement agreement. The trial court granted final
approval of the settlement in April 2013, to which the objectors
have appealed.
Based in Purchase, New York, MasterCard Incorporated and its
consolidated subsidiaries, including MasterCard International
Incorporated, is a technology company in the global payments
industry that connects consumers, financial institutions,
merchants, governments and businesses worldwide, enabling them to
use electronic forms of payment instead of cash and checks.
MasterCard offers a wide range of payment solutions, that enable
the development and implementation of credit, debit, prepaid,
commercial and related payment programs and solutions for
consumers and merchants. MasterCard manages a family of well-
known, widely accepted payment brands, including MasterCard(R),
Maestro(R) and Cirrus(R), which its customers use in their payment
programs and solutions.
MASTERCARD INC: Objectors Appeal Approval of "Attridge" Suit Deal
-----------------------------------------------------------------
Objectors have appealed the final approval of MasterCard
Incorporated's settlement of the "Attridge" Action, according to
the Company's July 31, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended June 30,
2013.
In October 1998, the U.S. Department of Justice ("DOJ") filed a
lawsuit against MasterCard International, Visa U.S.A., Inc. and
Visa International Corp. in the U.S. District Court for the
Southern District of New York alleging that both MasterCard's and
Visa's governance structure and policies violated U.S. federal
antitrust laws. The DOJ challenged (1) "dual governance", where a
financial institution has a representative on the Board of
Directors of MasterCard or Visa while a portion of its card
portfolio is issued under the brand of the other association, and
(2) both MasterCard's Competitive Programs Policy ("CPP") and a
Visa bylaw provision that prohibited financial institutions
participating in the respective associations from issuing
competing proprietary payment cards (such as American Express or
Discover). In October 2001, the judge issued an opinion upholding
the legality and pro-competitive nature of dual governance.
However, the judge also held that MasterCard's CPP and the Visa
bylaw constituted unlawful restraints of trade under the federal
antitrust laws. The judge subsequently issued a final judgment
that ordered MasterCard to repeal the CPP and enjoined MasterCard
from enacting or enforcing any bylaw, rule, policy or practice
that prohibits its issuers from issuing general purpose credit or
debit cards in the United States on any other general purpose card
network.
In April 2005, a complaint was filed in California state court on
behalf of a putative class of consumers under California unfair
competition law (Section 17200) and the Cartwright Act (the
"Attridge action"). The claims in this action seek to piggyback
on the portion of the DOJ antitrust litigation with regard to the
District Court's findings concerning MasterCard's CPP and Visa's
related bylaw. The Court granted the defendants' motion to
dismiss the plaintiffs' Cartwright Act claims but denied the
defendants' motion to dismiss the plaintiffs' Section 17200 unfair
competition claims. The parties have proceeded with discovery.
In September 2009, MasterCard executed a settlement agreement that
is subject to court approval in the separate California consumer
litigations ("U.S. Merchant and Consumer Litigations"). The
agreement includes a release that the parties believe encompasses
the claims asserted in the Attridge action. In August 2010, the
Court in the California consumer actions granted final approval to
the settlement. The plaintiff from the Attridge action and three
other objectors filed appeals of the settlement approval. In
January 2012, the Appellate Court reversed the trial court's
settlement approval and remanded the matter to the trial court for
further proceedings. In August 2012, the parties in the
California consumer actions filed a motion seeking approval of a
revised settlement agreement. The trial court granted final
approval of the settlement in April 2013, to which the objectors
have appealed.
Based in Purchase, New York, MasterCard Incorporated and its
consolidated subsidiaries, including MasterCard International
Incorporated, is a technology company in the global payments
industry that connects consumers, financial institutions,
merchants, governments and businesses worldwide, enabling them to
use electronic forms of payment instead of cash and checks.
MasterCard offers a wide range of payment solutions, that enable
the development and implementation of credit, debit, prepaid,
commercial and related payment programs and solutions for
consumers and merchants. MasterCard manages a family of well-
known, widely accepted payment brands, including MasterCard(R),
Maestro(R) and Cirrus(R), which its customers use in their payment
programs and solutions.
MASTERCARD INC: Sept. Hearing Set on U.S. Interchange Suits Deals
-----------------------------------------------------------------
A final approval hearing on MasterCard Incorporated's settlement
of lawsuits over interchange fees in the U.S. is scheduled for
September 2013, according to the Company's July 31, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013.
Interchange fees represent a sharing of payment system costs among
the financial institutions participating in a four-party payment
card system such as MasterCard's. Typically, interchange fees are
paid by the acquirer to the issuer in connection with purchase
transactions initiated with the payment system's cards. These
fees reimburse the issuer for a portion of the costs incurred by
it in providing services which are of benefit to all participants
in the system, including acquirers and merchants. MasterCard or
its customer financial institutions establish default interchange
fees in certain circumstances that apply when there is no other
interchange fee arrangement between the issuer and the acquirer.
MasterCard establishes a variety of interchange rates depending on
such considerations as the location and the type of transaction,
and collects the interchange fee on behalf of the institutions
entitled to receive it and remits the interchange fee to eligible
institutions. MasterCard's interchange fees and other practices
are subject to regulatory and/or legal review and/or challenges in
a number of jurisdictions, including several proceedings. At this
time, the Company says it is not possible to determine the
ultimate resolution of, or estimate the liability related to, any
of these interchange proceedings (except as indicated), as the
proceedings involve complex claims and/or substantial
uncertainties and, in some cases, could include unascertainable
damages or fines. Except as described, no provision for losses
has been provided in connection with them. Some of the
proceedings could have a significant impact on the Company's
customers in the applicable country and on MasterCard's level of
business in those countries. The proceedings reflect the
significant and intense legal, regulatory and legislative scrutiny
worldwide that interchange fees and acceptance practices have been
receiving. When taken as a whole, the resulting decisions,
regulations and legislation with respect to interchange fees and
acceptance practices may have a material adverse effect on the
Company's prospects for future growth and its overall results of
operations, financial position and cash flows.
In June 2005, the first of a series of complaints were filed on
behalf of merchants (the majority of the complaints are styled as
class actions, although a few complaints are filed on behalf of
individual merchant plaintiffs) against MasterCard International
Incorporated, Visa U.S.A., Inc., Visa International Service
Association and a number of customer financial institutions.
Taken together, the claims in the complaints are generally brought
under both Sections 1 and 2 of the Sherman Act, which prohibit
monopolization and attempts or conspiracies to monopolize a
particular industry, and some of these complaints contain unfair
competition law claims under state law. The complaints allege,
among other things, that MasterCard, Visa, and certain of their
customer financial institutions conspired to set the price of
interchange fees, enacted point of sale acceptance rules
(including the no surcharge rule) in violation of antitrust laws
and engaged in unlawful tying and bundling of certain products and
services. The cases have been consolidated for pre-trial
proceedings in the U.S. District Court for the Eastern District of
New York in MDL No. 1720. The plaintiffs have filed a
consolidated class action complaint that seeks treble damages, as
well as attorneys' fees and injunctive relief.
In July 2006, the group of purported merchant class plaintiffs
filed a supplemental complaint alleging that MasterCard's initial
public offering of its Class A Common Stock in May 2006 (the
"IPO") and certain purported agreements entered into between
MasterCard and its customer financial institutions in connection
with the IPO: (1) violate U.S. antitrust laws and (2) constitute a
fraudulent conveyance because the customer financial institutions
are allegedly attempting to release, without adequate
consideration, MasterCard's right to assess them for MasterCard's
litigation liabilities. In November 2008, the district court
granted MasterCard's motion to dismiss the plaintiffs'
supplemental complaint in its entirety with leave to file an
amended complaint. The class plaintiffs repled their complaint.
The causes of action and claims for relief in the complaint
generally mirror those in the plaintiffs' original IPO-related
complaint although the plaintiffs have attempted to expand their
factual allegations based upon discovery that has been garnered in
the case. The class plaintiffs seek treble damages and injunctive
relief including, but not limited to, an order reversing and
unwinding the IPO. In July 2009, the class plaintiffs and
individual plaintiffs served confidential expert reports detailing
the plaintiffs' theories of liability and alleging damages in the
tens of billions of dollars. The defendants served their expert
reports in December 2009 rebutting the plaintiffs' assertions both
with respect to liability and damages.
In February 2011, MasterCard and MasterCard International
Incorporated entered into each of: (1) an omnibus judgment sharing
and settlement sharing agreement with Visa Inc., Visa U.S.A. Inc.
and Visa International Service Association and a number of
customer financial institutions; and (2) a MasterCard settlement
and judgment sharing agreement with a number of customer financial
institutions. The agreements provide for the apportionment of
certain costs and liabilities which MasterCard, the Visa parties
and the customer financial institutions may incur, jointly and/or
severally, in the event of an adverse judgment or settlement of
one or all of the cases in the merchant litigations. Among a
number of scenarios addressed by the agreements, in the event of a
global settlement involving the Visa parties, the customer
financial institutions and MasterCard, MasterCard would pay 12% of
the monetary portion of the settlement. In the event of a
settlement involving only MasterCard and the customer financial
institutions with respect to their issuance of MasterCard cards,
MasterCard would pay 36% of the monetary portion of such
settlement.
In October 2012, the parties entered into a definitive settlement
agreement with respect to the merchant class litigation and
separately also entered into a settlement agreement with the
individual merchant plaintiffs (the terms of which were consistent
with a memorandum of understanding that was executed by the
parties in July 2012). The settlements included cash payments
that were apportioned among the defendants pursuant to the omnibus
judgment sharing and settlement sharing agreement. MasterCard
also agreed to provide class members with a short-term reduction
in default credit interchange rates and to modify certain of its
business practices, including its No Surcharge Rule. The merchant
class litigation settlement agreement is subject to court
approval. The court granted preliminary approval of the
settlement in November 2012 and scheduled a final approval hearing
for September 2013. Rule practice changes required by the
settlement were implemented in late January 2013.
Pursuant to the terms of the class settlement agreement, the final
day for merchants to have opted out of the settlement was May 28,
2013. Based upon a report filed by the class administrator with
the court, approximately 8,000 merchants opted out from the
settlement class, representing slightly more than 25% of the
MasterCard and Visa purchase volume over the relevant period as
calculated by MasterCard and Visa. The defendants had the right
to terminate the settlement agreement because this volume
threshold was reached, but elected not to do so. MasterCard
anticipates that most of the larger merchants who opted out of the
settlement will initiate separate actions seeking to recover
damages, and a number of merchants have already initiated such
actions. Those cases are in the early stages and the defendants
are seeking to consolidate the matters in front of the same court
that is overseeing the approval of the settlement. In addition,
certain competitors have raised objections to the settlement,
including Discover. Discover's objections include a challenge to
the settlement on the grounds that certain of the rule changes
agreed to in the settlement constitute a restraint of trade in
violation of Section 1 of the Sherman Act. The defendants filed
responses to all objections to the settlement in August 2013.
MasterCard recorded a pre-tax charge of $770 million in the fourth
quarter of 2011 and an additional $20 million pre-tax charge in
the second quarter of 2012 relating to the settlement agreements.
In 2012, MasterCard paid $790 million with respect to the
settlements, of which $726 million was paid into a qualified cash
settlement fund related to the merchant class litigation. The
class settlement agreement provides for a return to the defendants
of up to 25% of the total class cash settlement fund, based upon
the percentage of class purchase volume represented by the opt out
merchants (the "takedown payment"). As a result, if the
settlement receives final court approval, MasterCard anticipates
that it would receive back approximately $165 million from the
cash settlement fund (procedurally, the accuracy of the takedown
payment calculation is subject to review by the class). The cash
received would result in a reclassification from "restricted cash
for litigation settlement" to "cash and cash equivalents." As of
June 30, 2013, MasterCard recognized its estimated reserve for the
merchant class litigation as "accrued litigation", including the
portion of the reserve related to merchants who opted out of the
settlement. MasterCard will continue to assess this reserve and
adjust as appropriate.
In the event that the merchant class litigation settlement
agreement is not approved by the court, or if the class settlement
agreement is otherwise terminated by the defendants pursuant to
the conditions in the settlement agreement and the litigations are
not settled, the Company says a negative outcome in the litigation
could have a material adverse effect on MasterCard's results of
operations, financial position and cash flows.
Based in Purchase, New York, MasterCard Incorporated and its
consolidated subsidiaries, including MasterCard International
Incorporated, is a technology company in the global payments
industry that connects consumers, financial institutions,
merchants, governments and businesses worldwide, enabling them to
use electronic forms of payment instead of cash and checks.
MasterCard offers a wide range of payment solutions, that enable
the development and implementation of credit, debit, prepaid,
commercial and related payment programs and solutions for
consumers and merchants. MasterCard manages a family of well-
known, widely accepted payment brands, including MasterCard(R),
Maestro(R) and Cirrus(R), which its customers use in their payment
programs and solutions.
MB FINANCIAL: Faces Merger-Related Class Suit in Illinois
---------------------------------------------------------
MB Financial, Inc., is facing a merger-related class action
lawsuit in Illinois, according to the Company's July 31, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended June 30, 2013.
On July 14, 2013, the Company and Taylor Capital Group, Inc.
("Taylor Capital") entered into an Agreement and Plan of Merger
(the "Merger Agreement") whereby the Company will acquire Taylor
Capital. The Merger Agreement provides that, upon the terms and
subject to the conditions set forth therein, Taylor Capital will
merge with and into the Company, with the Company as the surviving
corporation in the Merger. Immediately following the Merger,
Taylor Capital's wholly owned subsidiary bank, Cole Taylor Bank,
will merge with the Company's wholly owned subsidiary bank, MB
Financial Bank. Cole Taylor Bank is a commercial bank
headquartered in Chicago with $5.9 billion in assets, $3.3 billion
in loans and $3.7 billion in deposits as of June 30, 2013.
On July 26, 2013, a purported stockholder of Taylor Capital Group,
Inc. ("Taylor Capital") filed a putative class action lawsuit on
behalf of the public stockholders of Taylor Capital in the Circuit
Court of Cook County, Illinois, against Taylor Capital, the
individual directors of Taylor Capital and MB Financial, Inc. ("MB
Financial"). The complaint generally alleges that the directors
of Taylor Capital breached their fiduciary duties in connection
with entering into the merger agreement with MB Financial and that
MB Financial aided and abetted such alleged breach of fiduciary
duties. The plaintiff seeks class action status for the lawsuit,
and further seeks (i) to enjoin the merger or, in the event the
merger is completed before entry of a final judgment, to rescind
the merger or be awarded an unspecified amount of rescissory
damages, (ii) an unspecified amount of additional damages and
(iii) costs, including the fees and expenses of attorneys and
experts. MB Financial believes the claim against it is without
merit and intends to contest this matter vigorously.
MB Financial, Inc. -- http://www.mbfinancial.com/-- is the
holding company of MB Financial Bank, a locally-operated financial
institution that has been delivering competitive personalized
service for over 100 years to businesses and individuals, who live
and work in the Chicago metropolitan area. The Company was
incorporated in Maryland and is headquartered in Chicago,
Illinois.
MERRILL LYNCH: Settles Racial Discrimination Suit for $160-Mil.
---------------------------------------------------------------
Michael Tarm, writing for The Associated Press, reports that
lawyers for hundreds of black financial advisers have reached a
$160 million settlement in a lawsuit accusing Wall Street
brokerage giant Merrill Lynch of racial discrimination, a
plaintiffs' attorney said on Aug. 28.
If approved by a federal judge in Chicago as expected, the payout
by Merrill Lynch to around 1,200 plaintiffs would be one of the
largest ever in a racial discrimination case, Chicago-based
attorney Suzanne E. Bish said.
Bank of America-owned Merrill Lynch -- one of the world's largest
brokerages with more than 15,000 financial advisers -- issued a
statement on Aug. 28 saying only, "We're not at this point
commenting on the existence of the settlement nor the status of a
settlement."
The primary plaintiff, George McReynolds, alleged a pattern of
discrimination that resulted in blacks having lower production and
making less money than white men at the company. Mr. McReynolds,
of Nashville, Tenn., is still employed at Merrill Lynch, Ms. Bish
said.
The settlement coincides with the 50th anniversary of Martin
Luther King Jr.'s "I Have a Dream Speech," Ms. Bish noted. She
said she hopes the case will help ensure the kind of equal
opportunity King spoke about in Washington, D.C.
"I'm getting goose bumps thinking about it," she said about the
coincidence the settlement came around the anniversary. "What
(the plaintiffs) wanted to achieve was the same opportunities for
the next generation -- for their children."
Ms. Bish said the settlement should force changes beyond the
company singled out as the defendant in the eight-year-old
lawsuit.
"They are leaders on Wall Street," she said. "And increasing
opportunities for African-Americans at Merrill Lynch should spill
over to the rest of Wall Street."
Plaintiffs claimed discrimination pervaded Merrill Lynch, at least
partly because the company employed relatively few African-
Americans overall. In a 2009 plaintiffs' filing, they contended
that fewer than 2 percent of the brokers at Merrill Lynch were
black.
"Far from being a colorblind meritocracy, race permeates policy
and practice in a way that creates substantial obstacles to equal
employment opportunity for Merrill Lynch's African-American
employees," William T. Bielby, a professor of sociology, said in
the filing.
Merrill Lynch sometimes relied on stereotypes, the filing also
asserted, once allegedly suggesting managers encourage black
brokers to "learn to play golf or other activities designed to
learn how business gets done in manners (they) might not be
familiar with."
The black brokers at Merrill Lynch claimed they were
systematically steered away from the most lucrative assignments;
consequently, under a compensation system emphasizing production,
they couldn't earn what white counterparts made, plaintiffs
alleged.
When attorneys filed the lawsuit 2005, Mr. McReynolds was the lone
plaintiff, though hundreds of others signed on as the suit wound
its way through the court, at times appearing as if it might be
doomed.
Robert Gettleman, the U.S. district judge overseeing the case in
Chicago, had denied the suit class-action status. But the Court
of Appeals for the Seventh Circuit in Chicago granted the status
in 2012 -- reviving the case and vastly extending its reach.
Mr. Gettleman must formally approve the deal, a process that could
take months. A status hearing in the case is scheduled for
Sept. 3.
MOOREHEAD COMMS: "Garcia" Suit Gets Conditional Certification
-------------------------------------------------------------
District Judge Jon E. Deguilio conditionally granted a motion to
certify the collective action captioned ALEX GARCIA and ANDY
WILKERSON, on behalf of themselves and others similarly situated,
Plaintiffs, v. MOOREHEAD COMMUNICATIONS, INC., Defendant, CAUSE
NO. 1:12-CV-208-JD, (N.D. Ind.).
The Court provisionally deems the FLSA claims as a collective
action, and defines the conditionally approved collective class
as:
Present and former Satellite Installer Technicians and Field
Service Managers employed by Moorehead Communications, Inc. for
any period of time from August 19, 2010 to August 25, 2012, and
who have not been paid overtime wages for all time spent working
beyond 40 hours per week.
Messrs. Garcia and Wilkerson will conditionally serve as the class
representatives of the conditionally certified collective class,
and be represented by current counsel of record.
The Court orders the Defendant, Moorehead Communications, Inc., to
provide Plaintiffs' counsel with a list in electronic format and
within ten days of the Order, which contains the names of all
former and current Satellite Installer Technicians and Field
Service Managers, who have worked during the time frame specified.
The list will include the individual's full name, employee number,
home address, job titles, and dates of employment. The information
provided by Moorehead is to be given to Plaintiffs' counsel only,
and may only be used as needed for this litigation.
The Court further orders Plaintiffs to file, after conferring with
defense counsel, any supporting brief, the notice of collective
action, and the opt-in consent form, within 14 days from the date
of the Order. Moorehead will have ten days to object or
supplement Plaintiffs' filings and Plaintiffs will then have five
days to file any reply
A copy of the District Court's August 19, 2013 Memorandum Opinion
and Order is available at http://is.gd/ucsxxlfrom Leagle.com.
Alex Garcia, on behalf of themselves and others similarly-
situated, Plaintiff, represented by:
Bradley L. Wilson, Esq.
Ryan Patrick Sink, Esq.
John H. Haskin, Esq.
JOHN H. HASKIN & ASSOCIATES, LLC
255 N. Alabama Street
Indianapolis, IN 46204
Tel: 317-955-9500
Fax: (317) 955-2570
Andy Wilkerson, on behalf of themselves and others similarly-
situated, Plaintiff, is represented by Bradley L Wilson, John H
Haskin & Associates, Ryan Patrick Sink, John H Haskin & Associates
& John H Haskin, John H Haskin & Associates.
Moorehead Communications Inc, Defendant, represented by Brian R
Garrison -- brian.garrison@FaegreBD.com -- at Faegre Baker Daniels
LLP & Edward E Hollis -- edward.hollis@faegrebd.com -- at Faegre
Baker Daniels LLP.
NEW YORK, NY: Calls Upheaval of Stop & Frisk Premature
------------------------------------------------------
Adam Klasfeld, writing for Courthouse News Service, reports that
the 2nd Circuit should have a say before a federal judge's plan to
curb racial disparities in stop-and-frisk police tactics takes
effect, lawyers for New York City said.
U.S. District Judge Shira Scheindlin had found earlier in August
that the ongoing practice of stopping innocent minority youth --
mostly men -- and frisking them for weapons or drugs before
letting them go is a violation of the Fourth Amendment. She also
said the practice violates the 14th Amendment's equal protection
clause.
Statistics from Columbia University professor Jeffrey Fagan show
that the roughly 80 percent of the 4.4 million stops made between
2004 and 2012 targeted black and Latino New Yorkers and visitors,
Scheindlin said.
The federal judge's recipe for curbing such disparities involves
forcing police officers to wear video cameras while stopping and
frisking suspects, document why they made every stop, and face the
scrutiny of a court-appointed monitor on guard for racial
profiling.
New York City Mayor Michael Bloomberg vowed to appeal the ruling
and his lawyers signaled the course of that opposition on Aug. 27
with a six-page letter to Scheindlin, a copy of which is available
from Courthouse News Service at http://is.gd/fOHB0K
The city lawyers claim to be confident that the 2nd Circuit will
rule in their favor because Scheindlin's reforms have "no
discernable end point or standards to measure success."
Without a stay to her order, the NYPD will have to retrain the
rank-and-file on the dictates of the court's ruling, and then
revert to the old protocols if the appellate court disagrees with
Scheindlin's conclusions, according to the letter signed by Heidi
Grossman.
"Thus, not only will defendants be harmed by having to train on
what they believe are errors of law, should defendants later
prevail on the appeal, the officers will have to be retrained
again, undoubtedly leading to severe and possibly irreparable
disruption and confusion among the rank and file," Grossman wrote.
Scheindlin's requirement for police to wear body cameras during
stops also implicates the "privacy rights of the public," she
added.
The letter attributes stop-and-frisk tactics for plummeting crime
rates that New York City has experienced in the last 15 years. "As
that crime reduction has been most heavily felt in minority
communities, it is those communities that will suffer the most,"
Grossman wrote.
Criminologists dispute what role stop-and-frisk policing played in
New York City's declining crime rates. A recent New York
University study found little correlation between those drops and
the NYPD's CompStat computer modeling program or other police
initiatives.
Indeed, the NYPD's latest data shows that the drop in the city's
murder rate has coincided with a steep decline in the number of
stop-and-frisk encounters, the New York Civil Liberties Union
announced Aug. 28.
"For years, Mayor Bloomberg and Commissioner [Ray] Kelly have
rejected all criticism of the NYPD's stop-and-frisk practices by
claiming that any reduction in the number of street stops would
cause a spike in violent crime," NYCLU Executive Director Donna
Lieberman said in a statement. "The latest numbers demonstrate an
opposite pattern: as street stops plummeted, the murder rate fell.
"It's time that Mayor Bloomberg and Commissioner Kelly abandon the
scare tactics and engage New Yorkers in a meaningful discussion
about reforming the practice of targeting black and Latino New
Yorkers for unjustified and abusive police stops."
The group says street stops in the second quarter of 2013
represent a 57 percent decline from the same period last year.
Murders in the same period declined about 27 percent, the group
said.
Judge Scheindlin meanwhile said the effectiveness of the tactic
was not the court's concern.
"This court's mandate is solely to judge the constitutionality of
police behavior, not its effectiveness as a law enforcement tool,"
she wrote. "Many police practices may be useful for fighting crime
-- preventive detention or coerced confessions, for example -- but
because they are unconstitutional they cannot be used, no matter
how effective," she wrote.
David Floyd, Lalit Clarkson, Deon Dennis and David Ourlicht -- all
of whom are black or Hispanic -- filed the federal class action
five years ago in Manhattan.
OILSANDS QUEST: Court OKs Securities Fraud Class Action Settlement
------------------------------------------------------------------
Sean Kilpatrick, writing for The Canadian Press, reports that a
U.S. court has approved a multimillion-dollar settlement in a
securities fraud class-action lawsuit against a bankrupt energy
exploration company for which embattled Sen. Pamela Wallin was a
director.
Between June 2007 and December 2011, Sen. Wallin was a paid member
of the board of Oilsands Quest Inc., a Calgary-based exploration
company. As a director, the Saskatchewan senator was named in the
lawsuit along with fellow board members, TD Securities and Calgary
consulting firm McDaniel and Associates.
The lawsuit, filed by investors in United States District Court in
New York in 2011, alleged that Oilsands Quest and its directors
overstated the value of the company's assets by US$136 million.
"Through a series of false and misleading press releases, investor
presentations and accounting manipulations, defendants
fraudulently pumped up Oilsands Quest's stock price by portraying
Oilsands Quest as the largest owner of valuable rights to bitumen
in Saskatchewan's oilsands, creating a modern-day gold rush for
what defendants knew to be largely worthless mining rights," reads
the original court document.
It goes on to say company officials knew that the vast majority of
the land contained no bitumen and "defendants engaged in contrived
exploration and testing activities to justify the retention of
worthless mining rights in order to mislead investors about the
value of the company's properties."
The lawsuit, filed by investors in United States District Court in
New York in 2011, alleged that Oilsands Quest and its directors
overstated the value of the company's assets by US$136 million.
While most oil sands development is focused in the area around
Fort McMurray in northern Alberta, Saskatchewan has significant
oil sands deposits. But the oil is considerably more difficult to
extract because the deposits are capped by a glacial till rather
than the shale typically found in Alberta.
Still, Oilsands Quest led a charge to develop on the eastern side
of the boundary.
The firm filed for bankruptcy protection in an Alberta court in
November 2011 and for Chapter 15 protection in a U.S. bankruptcy
court in February 2012. Its assets have been sold to Cenovus
Energy.
In August, United States District Judge Jed Rakoff signed off on a
US$10.2-million settlement which gave claimants about 36 cents on
the dollar.
PALM BEACH AGGREGATES: Residents Can Join Cancer Cluster Suit
-------------------------------------------------------------
Deirdra Funcheon, writing for The Pulp, reports that on Aug. 20,
the law firm of Searcy, Denney, Scarola, Barnhart, and Shipley
held a news conference about lawsuits related to a cluster of
pediatric brain cancer in the residential neighborhood Acreage,
located in western Palm Beach County.
Five couples who lived in the area and whose children developed
brain tumors are serving as plaintiffs in a class-action suit that
seeks damages for local residents whose property value plummeted
after the cancer cluster was publicized. The lawsuit extends to
"every current or former Acreage area landowner who owns or owned
an Acreage property at any time since August 24, 2009." There are
about 10,000 houses in the area.
The families are also filing individual lawsuits for damages.
Though health officials confirmed a cluster of pediatric brain
cancers, the lawsuit alleges that adults have been affected too:
"According to self-reported data from the community, the 2008-2010
incidence of brain tumors for the entire Acreage population is
above 30. From 1997-2007, the highest number of cases that should
be expected in any three year period based on both state and
county comparisons is 5.1. Based on the self-reported data the
pediatric cancer cluster declared by the State for the years 2004-
2008 would be expanded to a general brain cancer cluster from
2004-2010."
The lawsuit blames Palm Beach Aggregates, a mining company, and
Pratt & Whitney, an aerospace and engines manufacturer, for
radioactive waste that allegedly caused the cancers:
"Two types of ionizing radiation, including gamma and/or beta
emitting radionuclides, have been detected throughout the Acreage:
naturally occurring and non-naturally occurring. Note, "naturally
occurring" does not mean naturally present -- only that fission is
not required to cause the isotope to be in existence.
Those radionuclides that have been detected in the Acreage at
above natural background rates but may be termed naturally
occurring include Uranium-234, Uranium-235 Uranium-236, and
elevated levels of the decay products of Thorium, particularly
Lead-214 and Bismuth-214 and Actinium-228. (Naturally Occurring
Radioactive Material or NORM.) The presence of technologically
enhanced concentrations of NORM products (TE-NORMS) in water
systems can be associated with the metal processing industry,
particularly airplane engine and turbine manufacturing; however,
high concentrations of these radionuclides in an environment are
more readily associated with mining operations, including the type
of shell rock mining conducted by the Aggregates.
In addition to TE-NORM, radionuclides have been detected in the
Acreage that are not naturally occurring. These include Cesium-
137, Iridium-191, and Cadmium-109. Contamination of Iridium-191
and Cadmium-109 is particularly associated with tge metal
processing industry generally and with airplane engine and turbine
manufacturing and testing of the type conducted by Pratt Whitney
at its Palm Beach Facility.
Contamination spread to the nearby aquifer and canals, and the
lawsuit blames the two companies.
A copy of the complaint is available at:
http://www.scribd.com/doc/161746414/Class-Action-Complaint
PENNSYLVANIA: 3rd Cir. Vacates Ruling in FLSA Suit v. SEPTA
-----------------------------------------------------------
The United States Court of Appeals for the Third Circuit issued an
opinion vacating a district court ruling in DAVID BELL, et al.,
Appellants, v. SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY,
NO. 12-4031.
The action was brought by former and current bus drivers and
trolley operators employed by defendant Southeastern Pennsylvania
Transportation Authority under the Fair Labor Standards Act to
recover unpaid wages and overtime compensation for work performed
during morning "pre-trip" inspections required before the start of
each Operator's daily run.
The District Court granted SEPTA's motion to dismiss on the ground
that the FLSA claim required the interpretation of provisions of
three collective bargaining agreements between SEPTA and the
unions representing the Operators and was, therefore, subject to
those agreements' grievance and arbitration provisions.
The Third Circuit, however, found that the Operators' FLSA claim
does not require the interpretation of the collective bargaining
agreements; vacated the order of the District Court; and remanded
the case for further proceedings.
A copy of the Appeals Court's August 19, 2013 Opinion is available
at http://is.gd/iPyh6Ofrom Leagle.com.
Counsel for Appellants:
Bruce Bodner, Esq.
Howard J. Kaufman, Esq.
KAUFMAN, COREN & RESS
2001, Market Street
Two Commerce Square, Suite 3900
Philadelphia, PA 19103
E-mail: bbodner@kcr-law.com
hkaufman@kcr-law.com
Counsel for Appellee:
Jo Bennett, Esq.
Michael G. Tierce, Esq.
STEVENS & LEE
1818 Market Street, 29th Floor
Philadelphia, PA 19103-0000
E-mail: jb@stevenslee.com
mgt@stevenslee.com
- and -
Zachary R. Davis, Esq.
HANGLEY, ARONCHICK, SEGAL, PUDLIN & SCHILLER
One Logan Square
18th & Cherry Streets, 27th Floor
Philadelphia, PA 19103-0000
E-mail: zdavis@hangley.com
PILOT FLYING J: Explains Consolidation of Rebate Class Actions
--------------------------------------------------------------
CSP Daily News reports that Pilot Flying J is explaining the
consolidation of the lawsuits in which it is defending itself
related to the federal investigation alleging fraud in the fuel
retailer's rebate and discount programs.
The company posted the following Q&A with attorney Aubrey Harwell,
counsel for Pilot Flying J from Neal & Harwell, Nashville, Tenn.,
on its Rebate Education website.
Q: What is the class settlement all about?
A: Attorneys representing a number of Pilot Flying J customers and
attorneys representing Pilot Flying J asked the federal court in
Little Rock to consolidate all class-action lawsuits against Pilot
Flying J into one suit with a proposed settlement in an effort to
expedite any and all claims in the best interest of all parties,
in the shortest amount of time and in the most cost-efficient
manner.
Q: Is the consolidation and settlement final?
Aubrey HarwellA: A fairness hearing, which many believe will
result in final approval, is scheduled in Little Rock on Monday,
Nov. 25. In the meantime, members of the eligible class of Pilot
Flying J customers have until Tuesday, Oct. 15, to opt-out of the
class.
Q: Which Pilot Flying J customers are eligible?
A: The court defined the eligible class as any Pilot Flying J
customer who between Jan. 1, 2005, and April 15, 2013, bought
over-the-road diesel fuel for commercial use from Pilot Flying J
under a rebate or discount program.
Q: What does "opt out" mean?
A: According to the court, an eligible Pilot Flying J customer
that does nothing automatically is a member of the class. Any
customer that wants to pursue its own remedy outside of the class
should notify the court by Oct. 15 that they do not want to be a
member of the class, in which case the customer will "opt out."
Q: What does the class settlement mean to Pilot Flying J customers
that stay in the class?
A: Simply stated, it means every Pilot Flying J customer
potentially owed an additional rebate or discount has an
opportunity to be paid promptly, and with minimum effort, every
dollar plus interest. More specifically, the settlement states
that all Pilot Flying J customers that are part of the class and
stay in the class will have their accounts audited from Jan. 1,
2005, through July 15, 2013, at no cost to the class member. Each
class member then will be paid 100% of the amount owed, plus 6%
interest. A notice regarding the settlement was mailed to class
members in early August, and detailed information about the
settlement, as well as the settlement agreement and certain court
documents, can be found at www.DieselRebateSettlement.com.
Q: Why should a customer stay in the settlement?
A: The United States District Court in Little Rock has made a
preliminary finding that this settlement "appears to be fair,
reasonable and adequate." A number of plaintiffs and their
lawyers have also said that they think this settlement is fair and
have agreed to it; one prominent lawyer representing trucking
companies called it "the best settlement he had ever negotiated."
Nonetheless, Pilot Flying J does not want any customer that is
uncomfortable with the settlement to feel it has to participate.
Pilot Flying J values and appreciates its customers' opinions and
right to do as they believe best.
On July 16, the U.S. District Court in Little Rock, Ark., gave
preliminary approval to the consolidation and oversight of all
class-action lawsuits filed against Pilot Flying J in conjunction
with the federal investigation alleging fraud in Pilot Flying J's
diesel fuel sales rebate and discount programs. A fairness
hearing is scheduled in Little Rock on Nov. 25, at which time many
observers expect the court to give final approval to the
settlement proposed in this case.
Pilot Flying J said it believes the proposed settlement is good
for its customers and that they should participate in the
settlement because:
* It provides that all Pilot Flying J customers who are owed
money will be paid quickly every dollar owed plus interest.
* It provides a complete and fair review of each Pilot Flying
J customer's account from 2005 forward.
* Pilot Flying J customers will know that their accounts are
being audited with court oversight and that they have options if
they do not agree with the audit results.
* Pilot Flying J customers do not need to hire and pay a
lawyer to receive any payment owed.
PIPER JAFFRAY: Continues to Defend Consolidated Antitrust Suit
--------------------------------------------------------------
Piper Jaffray Companies continues to defend itself against a
consolidated antitrust class action lawsuit, according to the
Company's July 31, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended June 30, 2013.
The U.S. Department of Justice Antitrust Division, the SEC and
various state attorneys general are conducting broad
investigations of numerous firms, including the Company, for
possible antitrust and securities violations in connection with
the bidding or sale of guaranteed investment contracts and
derivatives to municipal issuers from the early 1990s to date.
These investigations commenced in November 2006. In addition,
several class action complaints were brought on behalf of a
proposed class of government entities that purchased municipal
derivatives. The complaints, which have been consolidated into a
single class action, allege antitrust violations and are pending
in the U.S. District Court for the Southern District of New York
under the multi-district litigation rules. Several California
municipalities also brought separate class action complaints in
California federal court, and approximately 18 California
municipalities and two New York municipalities filed individual
lawsuits that are not part of class actions, all of which have
been transferred to the Southern District of New York and
consolidated for pretrial purposes.
No loss contingency has been reflected in the Company's
consolidated financial statements as this contingency is neither
probable nor reasonably estimable at this time. Management is
currently unable to estimate a range of reasonably possible loss
for these matters because alleged damages have not been specified,
the proceedings remain in the early stages, there is uncertainty
as to the likelihood of a class or classes being certified or the
ultimate size of any class if certified, and there are significant
factual issues to be resolved.
Based in Minneapolis, Minnesota, Piper Jaffray Companies --
http://www.piperjaffray.com/-- is an investment bank and asset
management firm, serving the needs of corporations, private equity
groups, public entities, non-profit entities and institutional
investors in the U.S. and internationally. Founded in 1895, Piper
Jaffray provides a broad set of products and services, including
equity and debt capital markets products; public finance services;
financial advisory services; equity and fixed income institutional
brokerage; equity and fixed income research; and asset management
services.
PORTFOLIO INVESTMENT: "Havens" Suit Dismissed With Prejudice
------------------------------------------------------------
Chief District Judge Philip P. Simon dismissed the case captioned
SUSAN HAVENS, on behalf of herself and a class, Plaintiff, v.
PORTFOLIO INVESTMENT EXCHANGE INC. and CREDIT CONTROL, LLC,
Defendants, CASE NO. 3:12-CV-671-PPS, (N.D. Ind.).
Susan Havens racked up more than $11,000 in credit card debt, and
when she didn't pay her bill, the debt was sold by the credit card
company to an out of state debt collector who then attempted to
collect the debt. Havens purports to represent a group of
similarly situated people in this putative class action brought
under the Fair Debt Collection Practices Act, the crux of which
involves the validity of the assignment and attempted collection
of the debt by an out-of-state debt collector. There are two
defendants, Portfolio Investment Exchange Inc., the out-of-state
entity who originally bought the debt from the bank, and Credit
Control, LLC, the company Portfolio Investment Exchange hired to
collect the debt. Both Defendants seek dismissal of the complaint.
"I will grant the motions to dismiss, albeit without prejudice,"
ruled Judge Simon.
Judge Simon denied as moot pending motions for class certification
and motion to strike. The Court gave Ms. Havens 30 days to amend
her complaint if she so desires.
A copy of the District Court's August 15, 2013 Order and Opinion
is available at http://is.gd/o5TcpGfrom Leagle.com.
Susan Havens, Plaintiff, represented by:
James O. Latturner, Esq.
Tiffany N. Hardy, Esq.
Cathleen M. Combs, Esq.
Daniel A. Edelman, Esq.
Heather A. Kolbus, Esq.
EDELMAN COMBS LATTURNER & GOODWIN LLC
120 S. La Salle Street, #1800
Chicago, IL 60603
Tel: 312-739-4200
Fax: 312-419-0379
Portfolio Investment Exchange Inc, Defendant, represented by David
M Schultz, Hinshaw & Culbertson LLP & Jennifer J Kalas, Hinshaw &
Culbertson LLP.
Credit Control LLC, Defendant, represented by David M Schultz --
dschultz@hinshawlaw.com -- at Hinshaw & Culbertson LLP & Jennifer
J Kalas -- jkalas@hinshawlaw.com -- at Hinshaw & Culbertson LLP.
SOUTHWEST AIRLINES: Court Okays $29MM Settlement of Drink Coupon
----------------------------------------------------------------
Jack Bouboushian, writing for Courthouse News Service, reports
Southwest Airlines will replace free drink coupons that it no
longer honors, a federal judge ruled, approving a settlement
valued at $29 million.
Under its old policy, Southwest rewarded customers who bought
Business Select tickets with free-drink coupons that had no
expiration date.
After finding that its flexible policy was hurting its bottom
line, however, Southwest announced in August 2010 that Business
Select drink coupons could now be redeemed only on the day of
travel on which they were issued.
Adam Levitt and Herbert Malone filed a class action in November
2011 on behalf of all persons with unredeemed Southwest drink
coupons for alcoholic beverages obtained with the purchase of
Business Select tickets.
After mediation, the parties reached a settlement agreement.
Class members will receive a replacement drink voucher for each
unredeemed drink coupon, which expires one year after its date of
issuance, and they may sell them or give them away if they do not
desire to use them.
In addition, Southwest agreed that if it issues any drink coupons
in the future without an expiration date, it must honor the
coupons on any Southwest flight at any time. For all coupons with
an expiration date, it agreed to include conspicuous language
indicating dates for which the coupon is valid to flyers.
Levitt and Malone will receive incentive awards of $15,000 each,
and Southwest agreed not to oppose an attorneys' fee request of up
to $3 million, and expenses of $30,000, subject to court approval.
U.S. District Judge Matthew Kennelly granted final approval of the
settlement on Aug. 26.
"The key factor in this particular case is that the proposed
settlement calls for a full-value, one-to-one reimbursement of
drink vouchers for class members and allows class members to sell
or otherwise transfer the new vouchers should they desire,"
Kennelly wrote. "Though the replacement vouchers will have a
limited duration, that duration is sufficiently long to permit the
vast majority of class members to redeem the vouchers if they wish
to do so, or to sell them or give them away if they do not want to
use them or lack the opportunity to do so. In short, even if
plaintiffs faced few uncertainties in proving their claims, the
fact that they get back almost exactly what they lost weighs
heavily in favor of approval of the proposed settlement."
In addition, only 13 class members of 2.4 million objected to the
settlement, less than 0.01 percent.
"Such a low level of opposition supports the reasonableness of the
settlement," the 22-page opinion states.
Kennelly approved the incentive awards to the two lead plaintiffs,
finding the $15,000 awards reasonable given the significant amount
of time they dedicated to the case.
He reserved ruling on the petition for attorney's fees and costs
for a separate opinion.
Plaintiff's counsel Joseph Siprut called the approval of the
"excellent result" gratifying.
"Class members are made completely whole through the settlement
(valued at a minimum of $29 million), which we're very proud of,"
Siprut said in an email (parentheses in original). "The court also
disposed of the overheated rhetoric directed at the settlement,
which was mostly based on fundamental misunderstandings of the
facts or the actual settlement terms."
A copy of the 22-page Memorandum Opinion and Order dated Aug. 26,
2013, is available from Courthouse News Service at:
http://is.gd/SMv7j9
TOYOTA MOTOR: U.S. Executive Testifies in Sudden Acceleration Suit
------------------------------------------------------------------
Amanda Bronstad, writing for The National Law Journal, reports
that Toyota's highest ranking U.S. executive has testified before
jurors for the first time in a trial over sudden acceleration
defects, but there's no certainty he will show up for future
trials.
For two hours in Los Angeles on Aug. 27, plaintiffs' lawyer
Garo Mardirossian probed James Lentz, chief executive officer of
Toyota of North America Inc., about whether installing a brake
override system in his client's 2006 Camry would have prevented
her death. Such systems are designed to stop a car when the brake
and accelerator pedals are pressed at the same time.
Mr. Lentz acknowledged the company considered marketing a brake
override feature under the name "Safe Stop" but decided against
it. He told jurors he feared the name was "overpromising, because
it wouldn't necessarily reduce the accelerator in all cases,"
according to an online video feed of the proceedings broadcast by
the Courtroom View Network.
But when shown a replica of a brake override system in the
courtroom, Mr. Lentz acknowledged he wasn't familiar with the
technology or the costs of installing the feature.
Toyota unsuccessful fought to keep Lentz out of the trial. And
that was probably for good reason, since there's rarely an
advantage for defendants in having their top executive on the
stand, said Howard Erichson, professor of law at Fordham
University School of Law, who specializes in complex litigation.
"If the executive is very knowledgeable, then the plaintiffs'
argument can be, 'Look how much they knew about the risks and yet
they went forward,'" he said. "But if the witness is
unknowledgeable, then the plaintiffs can make it look like the
defendant doesn't have its act together."
The case, brought by the husband and son of Noriko Uno, who died
following a 2009 crash in Upland, Calif., is the first bellwether
case to go to trial over sudden acceleration defects. As a
bellwether, it is expected to set the tone for related litigation.
But unlike that case, which focuses on brake override systems,
three pending trials are expected to center on alleged defects in
the electronic throttle control systems. It's unclear whether
Lentz, who testified before Congress during the recalls about
electronic defects, would appear in those cases.
"We intend to have him testify in all of the upcoming trials,"
Todd Walburg -- twalburg@lchb.com -- a lead plaintiffs' lawyer in
the federal multidistrict litigation against Toyota in Santa Ana,
Calif., said via email. The first bellwether trial in that raft
of cases is scheduled for November 5.
So far in that case, brought on behalf of a woman who suffered
back injuries when her Camry lurched at a stop sign and crashed
into an elementary school in Columbus, Ga., no requests have been
made to have him testify. Toyota has not moved to prevent him
from doing so.
TRUMP NATIONAL: Settles Employees' Class Action for $475,000
------------------------------------------------------------
Nicole Mooradian, writing for Palos Verdes Patch, reports that a
judge on Aug. 28 approved a $475,000 class action settlement of
employment claims by nearly 1,000 current and former golf course
employees at the Trump National Golf Club in Rancho Palos Verdes.
"This was a hard-fought, but well-considered resolution," Los
Angeles Superior Court Judge Mark Mooney said as he signed the
settlement agreement, which puts a stop to a trial of consolidated
lawsuits brought by lead plaintiffs and class representatives Lucy
Messerschmidt and Dave Perry.
The settlement involves 913 golf course employees who worked for
Trump National from December 2004 until February this year.
According to the plaintiffs, 298 class members submitted claim
forms. About a third of the total award, or nearly $160,000, will
go to attorneys for their work, the same court papers stated.
Employee complaints generally included non-payment for missed meal
and rest breaks. Some employees said they were not reimbursed for
business expenses and objected to managers and supervisors getting
tips.
Ms. Messerschmidt, a restaurant hostess at Trump National, also
was taken off the schedule while Donald Trump was on the premises,
because he "likes to see fresh faces" and "young girls," according
to her lawsuit, which was filed in December 2008.
Ms. Messerschmidt alleged she was fired after speaking out against
alleged age discrimination and meal and rest period violations at
the golf course, where she was hired in August 2006.
Ms. Messerschmidt claimed she was berated in front of co-workers
after complaining, and that her manager falsely claimed that she
had given a notice of resignation and unsuccessfully tried to
coerce her to sign a document stating that she was quitting her
job.
Mr. Perry, a Trump National valet who sued the golf course in
March 2009, alleged that he was suspended twice in 2008 after
insisting on taking meal breaks.
Outside the courtroom, the attorneys declined to comment on the
settlement. However, in their court papers the plaintiffs'
lawyers stated that the parties "repeatedly tried to resolve this
litigation for more than four years before reaching a settlement."
Both sides took part in four mediation discussions before an
agreement was reached, according to the plaintiffs' attorneys
court papers.
"The courage it took to stand up to (Trump) here should not be
underestimated," the plaintiffs' lawyers court papers stated.
"Few people want to confront their employers, let alone sue them.
This is especially true where plaintiffs' former employer is an
entity owned by Donald Trump."
The plaintiffs' attorneys stated in their court papers that a
trial would not have been easy to win.
"Trump contends that the class would not be able to establish its
entitlement to the full extent of the relief it is seeking and
promised to mount a vigorous defense," according to the
plaintiffs' lawyers' court papers. "On the other hand, plaintiffs
believe there is ample evidence to support the class allegations.
Under these circumstances, and in light of the risks inherent in
further litigation, it is reasonable for plaintiffs and class
counsel to elect to settle the action."
UNIVERSAL MUSIC: Faces Class Action Over Unpaid Internship
----------------------------------------------------------
Tim Kenneally and Pamela Chelin, writing for The Wrap, report that
the legal battle over unpaid interns has opened up a couple of new
fronts, with two separate class-action lawsuits filed against
Universal Music Group, Sean Combs' Bad Boy Entertainment, MTV and
Viacom.
The suits were both filed in U.S. District Court in Southern New
York by Lloyd R. Ambinder ad Suzanne B. Leeds of Leeds Brown Law,
P.C., and bear similar allegations.
In the suit against MTV and Viacom, which like its counterpart
cites the Fair Labor Standards Act and New York labor law,
Casey Ojeda claims to have worked for the defendants from
September 2011 to January 2012, typically three days a week for
seven or eight hours a day. Mr. Ojeda performed tasks such as
updating and rebooting the defendants' mobile website, coding,
creating weekly spreadsheets and program design, according to the
complaint.
Mr. Ojeda received no wages in exchange for the work, the suit
says.
The second suit, filed against Universal Music Group and Bad Boy
Entertainment on Aug. 20, alleges that Rashida Salaam toiled for
those companies from January to May 2012, working three or four
days a week, from 9:00 a.m. until 6:00 or 7:00 p.m. Despite
performing duties including answering phones, copying, filing and
scanning documents, Ms. Salaam was not paid.
Universal and Viacom have not yet responded to TheWrap's request
for comment.
Unpaid internships have become a topic of hot debate -- and a
growing number of lawsuits -- within entertainment and media
recently, with companies such as Gawker, Conde Nast, Hearst and
others being dinged with lawsuits.
In December, interns on Charlie Rose's PBS show were awarded more
than $207,900. And in May, a judge ruled that two interns on the
Fox Searchlight film "Black Swan" were entitled to pay for their
work on the movie.
VANDA PHARMACEUTICALS: Faces Securities Class Suits in D.C.
-----------------------------------------------------------
Vanda Pharmaceuticals Inc. is facing securities class action
lawsuits in D.C., according to the Company's July 31, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013.
On June 24, 2013, a securities class action complaint was filed in
the United States District Court for the District of Columbia,
naming the Company and certain of its officers as defendants. The
complaint, filed on behalf of purported stockholders of the
Company, seeks to assert violations of Section 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, in connection with allegedly false and misleading
statements and alleged omissions regarding the Company's Phase III
trial results for tasimelteon and other disclosures between
December 18, 2012, and June 18, 2013 (the "Class Period"). The
plaintiff seeks to represent a class comprised of purchasers of
the Company's common stock during the Class Period and seeks
damages, costs and expenses and such other relief as determined by
the Court. A similar complaint was filed on July 8, 2013.
The Company's management believes that Vanda has meritorious
defenses and intends to defend these lawsuits vigorously. The
Company does not anticipate that this litigation will have a
material adverse effect on its business, results of operations or
financial condition. However, these lawsuits are subject to
inherent uncertainties, the actual cost may be significant, and
the Company may not prevail. The Company believes it is entitled
to coverage under its relevant insurance policies, subject to a
retention, but coverage could be denied or prove to be
insufficient.
Washington, D.C.-based Vanda Pharmaceuticals Inc. is a
biopharmaceutical company focused on the development and
commercialization of products for the treatment of central nervous
system disorders. The Company's product portfolio includes
tasimelteon, a compound for the treatment of circadian rhythm
sleep disorders, which is currently in clinical development,
Fanapt(R) (iloperidone), a compound for the treatment of
schizophrenia, the oral formulation of which is currently being
marketed and sold in the U.S. by Novartis Pharma AG, and VLY-686,
a small molecule neurokinin-1 receptor (NK-1R) antagonist.
VIGO COUNTY, IN: Former Inmate Speaks About Jail Conditions
-----------------------------------------------------------
Katie Hargitt, writing for MyWabashValley.com, reports that a
class action lawsuit against the Vigo County Sheriff's Office and
County Commissioner says the jail is often over the 268 inmate
capacity in a 2002 agreement and that inmates do not get the
required three hours of recreation per week.
A 2012 jail inspection report backs up many of current prisoner
Aaron Hos' claims.
It says the jail holds 267 beds, but there were 293 inmates in the
jail at the time of the inspection, meaning many people were left
sleeping on mats on the floor.
Other issues include improper staffing. The number of showers in
the jail also is not proportional to the number of inmates.
Kyle Ward spent four months in the Vigo County Jail in 2010 and
was back in the jail in 2012. He says his experience was much
like Hos'. "There was a two man cell, there was a prisoner on
top, prisoner on bottom, three people on the floor on mats and
then I was in a four man cell and there was two in a bunk here,
two in a bunk here and then three on the floor so that would be
seven. There's very little room to move around," Mr. Ward said.
"I remember going months without rec actually."
One claim from the law suit not supported by the inspection report
is jail cleanliness. While the suit claims insects and black mold
are a problem, the inspection report states an exterminator was on
site and areas were clean.
The Vigo County Sheriff's office and County Commissioner said they
will not be making a statement on the class action law suit at
this time.
VITAL PHARMA: Bid to Bifurcate Discovery in "Karhu" Suit Denied
---------------------------------------------------------------
District Judge James I. Cohn denied a motion to bifurcate
discovery and amend schedule filed in the case captioned ADAM
KARHU, on behalf of himself and all others similarly situated,
Plaintiff, v. VITAL PHARMACEUTICALS, INC., d/b/a VPX SPORTS,
Defendant, CASE NO. 13-60768-CIV-COHN/SELTZER, (S.D. Fla.)
The Defendant moved to bifurcate discovery in the case between
discovery related to class certification, and discovery related
to the merits of the claims. The Defendant further asked the
Court to modify the current case schedule for an earlier deadline
for Plaintiff's class certification motion, presently set for
October 11, 2013.
Judge Cohn denied the request saying the "Defendant does not
explain why it would be fairer or more efficient to bifurcate
discovery. Nor does Defendant indicate specifically what type of
information Plaintiff is seeking from Defendant that is merits-
related and would impose a significant burden on Defendant to
produce. Defendant's bare assertion that Plaintiff is attempting
to engage in a fishing expedition is insufficient to support the
relief requested. Accordingly, because Defendant has failed to
show good cause for bifurcating discovery or amending the
scheduling order, the motion will be denied."
A copy of the District Court's August 16, 2013 Order is available
at http://is.gd/utyJaXfrom Leagle.com.
Adam Karhu, Plaintiff, represented by Daniel R. Lever --
lever@tdflaw.com -- at Thornton Davis & Fein, Scott A Bursor --
scott@bursor.com -- at Bursor & Fisher, P.A. & Barry L. Davis --
davis@tdflaw.com -- at Thornton Davis & Fein.
Vital Pharmaceuticals, Inc., Defendant, represented by Victoria
Nicole Godwin -- victoria.godwin@vpxsports.com -- Vital
Pharmaceuticals, Inc.
WHITEWAVE FOODS: Seeks Dismissal of Food Labeling Class Action
--------------------------------------------------------------
Jessica M. Karmasek, writing for Legal Newsline, reports that a
group of soy milk makers want a federal judge to toss a putative
class action filed against them, arguing that a prior settlement
precludes the suit.
Defendants WhiteWave Foods Company, Dean Foods Company, WWF
Operating Company and Horizon Organic Dairy LLC filed their motion
to dismiss in the U.S. District Court for the Northern District of
California San Francisco Division Aug. 1.
"This case was over before it started," wrote Angela Agrusa --
aagrusa@linerlaw.com -- an attorney for Los Angeles law firm Liner
Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP, who is
representing the companies.
"In nearly identical litigation before the U.S. District Court for
the Southern District of Florida, Defendants, faced with
substantially the same allegations as have been alleged in this
lawsuit, reached a settlement involving a nationwide class of
consumers, including plaintiffs Alex Ang and Kevin Avoy.
"In settling the prior case, WhiteWave Foods agreed to remove all
references to evaporated cane juice ('ECJ') from all of its
product labels nationwide and to refund class members between 25
percent and 100 percent of the prices they paid for products with
ECJ on their labels. In return, the plaintiff class released all
claims against WhiteWave Foods and all of its past and present
affiliates, including defendant Dean Foods Co."
Ten days after the federal court in Florida preliminarily approved
the class settlement, certified a class for settlement purposes
and enjoined any class members from filing related lawsuits, the
plaintiffs filed the instant action.
In it, they allege many of the same claims -- "with a couple new
twists," Ms. Agrusa wrote -- against almost all of the same
defendants.
"As such, preclusion principles prevent Plaintiffs from proceeding
any further with this case," the companies argue in their motion.
"But even if they were allowed to get to the merits of their
claims, these baseless allegations should be dismissed as a matter
of law. This lawsuit does not allege that Plaintiffs were tricked
into purchasing something other than what they received -- the
harm that California's unfair competition and consumer protection
statutes were meant to redress -- but rather that WhiteWave Foods'
labels aren't playing by the FDA's rules.
"The main thrust of Plaintiffs' Complaint is the same as about two
dozen lawsuits filed nationwide in the last 15 months, at least 17
of which are spearheaded by Plaintiffs' counsel in this action,
Pierce Gore."
The plaintiffs argue in their complaint, the original filed in
April, that the companies deceptively labeled sugar as evaporated
cane juice.
The defendants point out that ECJ is made by extracting the juice
from sugar cane and then evaporating or removing the water
therefrom.
"Unlike common refined sugar, it has a lower impact on taste
profiles and food coloration and cannot be made from sugar beets,"
Ms. Agrusa noted in the companies' motion.
"In hoping to force WhiteWave Foods to call ECJ something else, it
could not be clearer that this lawsuit is an attempt to step into
the shoes of the FDA and impose Plaintiffs' own misguided
interpretations of labeling regulations upon the food industry."
The plaintiffs have until Sept. 3 to file a response to the
defendants' motion. The defendants must submit their reply by
Sept. 18.
Judge Samuel Conti has scheduled a hearing for Oct. 11.
* About 70% of Supplement Companies Violate FDA Rules
-----------------------------------------------------
Delthia Ricks, writing for 7News, reports that about 70 percent of
the nation's supplement companies have run afoul of the U.S. Food
and Drug Administration's manufacturing regulations over the past
five years, according to a top agency official.
Recall notices and agency inspection records have shown that
consumers are put at risk by poorly measured ingredients,
uncleaned manufacturing equipment, pesticides in herbal products,
supplements contaminated with illegal prescription medications --
even bacteria in pediatric vitamins.
"We're seeing some real problems out there," said Dr. Daniel
Fabricant, who heads the FDA's Division of Dietary Supplement
Programs.
While most vitamins and supplements are not harmful -- and at
least one vitamin brand was credited with an 8 percent reduction
in cancer among men over 50 -- the industry is beset by repeated
recalls, manufacturing problems and adverse reactions caused by
tainted products, health experts and regulatory officials say.
And there is little the FDA can do to improve the situation,
Dr. Fabricant said, unless Congress legislates more regulatory
authority for the agency.
Roughly half the U.S. population -- 150 million people -- consumes
multivitamins, mineral tablets, weight-loss aids, herbal remedies,
protein powders and a host of other products that fall under the
vast rubric of dietary supplements.
Supplements, a $28 billion industry made up of about 450 U.S.
companies, are deemed "food" by law and are not subject to the
tough regulatory scrutiny of prescription drugs.
Sixteen nationwide recalls and warnings have been issued in the
past month and a half, including vitamins that contained the risky
steroids dimethazine, dimethyltestosterone and methasterone. More
than 3,000 products were recalled nationwide last year.
Written product recipes at numerous supplement companies are
nonexistent, Dr. Fabricant said, and many recipes -- known as
master manufacturing records -- are apparently cobbled together
when owners learn that government inspectors are on their way.
Worse, drums in which products are mixed are not always
appropriately cleaned, Dr. Fabricant added, and in some firms
these vessels are damaged from age and/or overuse. Debris left
from previous batches sometimes winds up in newly made products,
he said.
Too often, dangerous drugs of all kinds -- from male sexual
enhancement compounds to weight-loss medications -- are turning up
in vitamins and other supplements nationwide.
A report in the Journal of the American Medical Association in
April noted that potent drugs are sometimes purposely added to
supplements to increase strength, usually weight loss remedies and
sleep aids.
Sibutramine, for example, which is now banned, causes weight loss
but also can lead to heart attack or stroke.
Consumers also are put at risk, Dr. Fabricant said, by raw
products from foreign sources because of pervasive pesticide usage
abroad. Most of what he calls "the alphabet vitamins" -- A, B, C,
D and E -- have provenance in China. The same is true of
botanicals, Dr. Fabricant said, some of which are found to be
tainted with pesticides.
"What we're finding is that people (manufacturers) are not testing
their products," Dr. Fabricant said.
Approximately 6,300 people nationwide complained about adverse
reactions to dietary supplements between 2008 and 2012, according
to FDA statistics. But the actual number may be more than eight
times higher, some experts say, because most people don't believe
health products can make them sick.
The FDA began inspecting how vitamins and other dietary
supplements are manufactured only in 2008. And there is little
the FDA can do to exercise more power over supplement safety
without an act of Congress, Dr. Fabricant said.
U.S. Senate lawmakers reintroduced a measure this month to grant
the agency more power. The bill was initially introduced in 2011.
Cara Welch, senior vice president of scientific and regulatory
affairs for the Natural Products Association, a trade group in
Washington, D.C., noted "the industry is trying to comply with the
FDA's GMP requirements," she said of good manufacturing practice
rules.
"This is an industry with a relatively new regulatory framework,"
she said.
Here is a list of recent FDA warnings, recalls and seizures:
July 19 -- Recall of Herbal Give Care LLC's weight loss and
vitamin supplements. The products contain sibutramine, which is
banned for heart attack risks, and two derivatives.
July 24 -- USPLabs destroys $8.5 million worth of weight loss
supplements, Jack3D and OxyElite Pro. The products contained the
dangerous heart stimulant, DMAA.
July 26 -- Recall of vitamin B-50 supplement distributed by Purity
First Health Products. The supplements contained anabolic
steroids.
July 31 -- Recall of Purity First products expanded to include
multi-mineral and vitamin C.
Aug. 3 -- Recall of weight loss supplement made by CTV Best Group
because it contains sibutramine.
Aug. 5 -- Recall for weight loss supplements made by Bethel
Nutritional Consulting. The supplements contain sibutramine and
phenolphthalein, which is a laxative and possible carcinogen.
Aug. 8 -- Recall of sleep aid made by Health and Beyond LLC. The
supplement contains doxepin, a prescription sleep medication and
chlorpromazine, a drug for psychotic disorders.
Aug. 16 -- Multiple warning letters issued to makers of energy,
sleep aid and vitamin D products for manufacturing violations
* "Offer of Judgment" Mechanism Useful in Wage-Hour Class Action
----------------------------------------------------------------
Mark Temple and Peter J. Stuhldreher, writing for Forbes, report
that the biggest threat facing employers in recent years is the
wage-hour class action. In these cases, current and former
employees, individually or collectively, seek to recover damages
for unpaid overtime wages under the Fair Labor Standards Act
(FLSA). They turn the grievances of a few employees into a
lawsuit on behalf of hundreds or thousands. When faced with these
suits, companies often look for the cheapest settlement possible,
rather than risk that the stakes may grow exponentially as the
employee class size increases.
In its recent decision in Genesis Healthcare Corp. v. Symczyk,
found here, the U.S. Supreme Court gave employers another weapon
to limit the cost of an FLSA collective action by allowing them to
capitulate early on, before the grievances of a few employees turn
into a class action. In Genesis Healthcare, the employer gave the
named plaintiff an "offer of judgment" -- it agreed to pay all
employees suing the company what they demanded, effectively
shutting down the entire case before a class was approved by the
court. Under the "offer of judgment" mechanism, a defendant makes
a settlement offer to resolve the case. If accepted, the offer is
filed at the courthouse and the case ends. However, if the
receiving party rejects the offer, prevails at trial, and recovers
an amount that is less than the offer, the rejecting party must
pay the offeror's costs incurred after the offer was made.
In Genesis Healthcare, the Supreme Court decided that if an offer
of judgment makes the plaintiff(s) whole (pays them everything
they are claiming), the lawsuit is moot and cannot go forward.
Left unresolved, however, is whether an unaccepted offer of
judgment moots the claim of the individual who initiated the
lawsuit.
This strategy may prove particularly useful in cases where: (1)
there is a potential for a lot of people (known as opt-ins) to
join the case; (2) there are very few claimants early in the case;
and (3) the damages of the individuals already in the case are
minimal. If carefully crafted so as to provide the individuals
making claims with complete relief, the offer of judgment may moot
the entire lawsuit before it grows large, expensive, and difficult
to resolve.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Washington, D.C., USA. Noemi Irene
A. Adala, Joy A. Agravante, Valerie Udtuhan, Julie Anne L. Toledo,
Christopher Patalinghug, Frauline Abangan and Peter A. Chapman,
Editors.
Copyright 2013. All rights reserved. ISSN 1525-2272.
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