/raid1/www/Hosts/bankrupt/CAR_Public/130919.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, September 19, 2013, Vol. 15, No. 186
Headlines
ADVOCATE MEDICAL: Faces Second Patient Data Breach Class Action
AU OPTRONICS: Amicus Curie Briefs Filed Before High Court
AUSTRALIA: Scraps Planned 50% Rent Hike After Class Action
BANK OF AMERICA: Judge Okays $4MM Accord in Late Fee Class Action
BLACKSTONE GROUP: December 18 Settlement Fairness Hearing Set
BP PLC: Deepwater Horizon Questions Forwarded to Texas High Court
BRANCH BANKING: Court Compels Arbitration in "Hunter" Class Action
CATHAY FOREST: Settles Class Action; November 22 Hearing Set
CHESAPEAKE APPALACHIA: Settlement Gets Preliminary Court Approval
CHILDREN'S PLACE: Recalls Children's One-Piece Footed Pajamas
CHOBANI: FDA Receives Complaints Over Recalled Yogurt
CITY HOMES: Files Chapter 11 Bankruptcy Amid Lead-Paint Lawsuits
CLEAR CHANNEL: Outdoor Unit Wins OK of Settlement in Investor Suit
CROCS INC: February 2014 Fairness Settlement Hearing Set
DELL FINANCIAL: Loses Bid to Dismiss Improper Billing Class Action
DURCO AND CRANE: Jury Awards $38 Million in Garvin Asbestos Case
EASON LAW FIRM: Faces Class Action for Hiding Settlement Funds
EQT PRODUCTION: Judge Vows to Rule Promptly on Gas Royalty Suit
FIDELITY NATIONAL: Court Decertifies Homeowners' Class Action
FLORIDA: Faces Class Action Over Disabled Kids Nursing Home Care
FORD MOTOR: Obtains Favorable Ruling in Truck Dealer Class Action
FRITO-LAY: Morrison & Foerster Discusses Class Action Ruling
GAMESTOP CORP: Judge Denies Bid to Dismiss Game Codes Suit
GEORGIA POWER: Faces Multiple Suits Over Executive Jet Crash
GORT'S GOUDA: Recalls Certain Raw Milk Cheeses
HEWLETT-PACKARD: Faces Overtime Class Action in California
HIAR HOLDING: Insurer Must Honor Indemnity Obligation
HUDSON'S BAY: Judge Refuses to Appoint Lead Class Counsel
INVENTURE FOODS: Defends Two Suits Over "All Natural" Claims
JOHNSON & JOHNSON: New Recalls Raise Concern About Quality
KNIGHT TRANSPORTATION: Continues to Defend Wage & Hour Litigation
LEUCADIA NATIONAL: To Seek Stay of "Sykes" Suit Pending Appeal
LEUCADIA NATIONAL: Trial in Del. Merger Suit Set for June 2014
LIBERTY SILVER: Federman & Sherwood Files Securities Class Action
MERCK & CO: N.J. Court Certifies Vioxx Securities Class Action
MERRILL LYNCH: Loses Arbitration Bid in Wage Class Action
MICROSOFT CORP: Pomerantz Law Firm Files Securities Class Action
MIMEDX GROUP: Robbins Geller Files Securities Class Action
MOTOROLA SOLUTIONS: 7th Cir. Affirms Ruling in "Silverman" Suit
NAT'L COLLEGIATE: Faces Concussion-Related Class Action
NAT'L COLLEGIATE: Concussion Class Action Plaintiffs List May Grow
NORDSTROM INC: Court Limits Class in "Balasanyan" Suit
NUVERRA ENVIRONMENTAL: Curtis V. Trink Law Firm Files Class Action
PANTRY INC: Appeal in Suit Over Use of Card Info Remains Pending
PANTRY INC: Continues to Defend Suits Over Fuel Temperature
PAPA JOHN'S: Awaits Ruling on Bid for Certification in FLSA Suit
PAPA JOHN'S: TCPA Suit Settlement Approval Expected in Late 2013
PEPSICO: Settles Naked Juice False Labeling Class Action
PETROCHINA COMPANY: Morrison & Foerster Discusses Class Action
PLAINS ALL AMERICAN: Faces $750-Mil. Shareholder Class Action
PRICELINE.COM: Westchester County May Join Hotel Tax Class Action
PROVIDENT SAVINGS: Court Certifies Class in "McKeen-Chaplin" Case
RAS & ASSOCIATES: Faces Class Action Over Investment Fraud
RASHIDA SAMJI: Ponzi Scheme Class Action to Proceed in Canada
RECONTRUST COMPANY: Court Vacates Dismissal of "Dutcher" Suit
RITE AID: Judge Denies Motion to Strike Background-Check Suit
SIBERONI: Recalls Meat and Poultry Ravioli Products
STANDARD FIRE: Bryan Cave Discusses Supreme Court Ruling
STATE STREET: Continues to Defend Shareholder Suits in Mass.
STATE STREET: Continues to Defend Suits Over SSgA-Managed Funds
STATE STREET: Suits Over Foreign Exchange Remain Pending in Mass.
TOSHIBA AMERICA: Monetary Sanctions Ruling vs. Sklar Affirmed
TREX COMPANY: $8.25MM Settlement Gets Preliminary Court Approval
UNION BANK: Employees' Overtime Class Action in Calif. Can Proceed
UNION PACIFIC: Faces Class Actions Over Lawtell Train Derailment
UNITED STATES: "Kobe" Suit Defendants Get Summary Judgment Ruling
UNITED STATES: Malpractice Claims Cost Veterans Affairs $91.7MM
VISA INC: Judge Hears Class Action Settlement Objections
VISA INC: NACS Comments on Settlement Fairness Hearing
WATERLOGIC COMMERCIAL: Recalls Water Cooling, Heating Systems
WESTERN HEALTH: Clerk Removed as Defendant in Privacy Class Action
ZUNGUI HAIXI: Bennett Jones Discusses Class Action Settlement
* Australia's Coalition Govt Needs to Address Class Action Issues
*********
ADVOCATE MEDICAL: Faces Second Patient Data Breach Class Action
---------------------------------------------------------------
Sun-Times Media Wire reports that Advocate Medical Group is facing
a second class-action lawsuit, alleging the health care group was
negligent in protecting patients' private data after computers
were stolen from its offices.
In a burglary July 15, two men stole four computers from an
Advocate building in the 200 block of West Touhy Avenue in Park
Ridge that contained identifying information including names,
addresses, dates of birth and Social Security numbers.
The computers also had limited clinical information, such as
health insurance data, Advocate officials said. A total of 4.03
million patients were being notified of the burglary.
Advocate Lutheran General Hospital patients Heather Wanderski and
Sharon Lewert filed a class-action lawsuit on Sept. 11, the second
such suit filed against Advocate. The women claim they would have
gone to a different heath care provider if they had known about
what they call Advocate's "substandard security procedures."
Northbrook resident Pierre Petrich and her daughter, a minor,
filed a separate class-action suit on Sept. 5 over the breach of
patient data, according to a statement from their attorneys.
The Sept. 11 lawsuit alleges the Downers Grove-based health group
failed to live up to industry standards regarding sensitive
information, and failed to use encryption and other basic security
measures to safeguard patient data, the suit said. The suit
claims breach of contract, unjust enrichment and breach of
fiduciary duty. It seeks an unspecified amount in damages.
"We deeply regret any inconvenience this incident has caused our
patients who have entrusted us with their care," Advocate
spokeswoman Kelly Jo Golson said in a statement, sent in response
to the Sept. 5 lawsuit.
"We are also committed to providing all individuals impacted by
this incident with resources to answer their questions and tools
to protect their personal information," she said.
"Although we are unable to comment specifically on active
litigation matters, we want to reassure our patients that we do
not believe the data was targeted and we have no information that
leads us to believe that the information has been misused,"
Ms. Golson said in the statement.
AU OPTRONICS: Amicus Curie Briefs Filed Before High Court
---------------------------------------------------------
Melissa Lipman, Eric Hornbeck and Bill Donahue, writing for
Law360, report that several electronics companies pushing the U.S.
Supreme Court to apply the Class Action Fairness Act to suits
brought by state attorneys general got a boost on Sept. 10 from a
variety of trade groups for manufacturers, pharmaceutical
companies and the defense bar.
The National Association of Manufacturers, Access to Courts
Initiative Inc., Allstate Insurance Co., DRI - The Voice of the
Defense Bar, Washington Legal Foundation, Pharmaceutical Research
and Manufacturers of America and American Bankers Association all
weighed in on the case in a series of amicus curie briefs.
The justices are considering whether CAFA's requirement that both
class and mass actions belong in federal court applies to
so-called parens patrie suits filed by state attorneys general in
a dispute between Mississippi Attorney General Jim Hood and a
group of liquid crystal display panel makers accused of fixing
prices.
Though the details varied, the amici generally argued that
attorneys general who are essentially bringing damages claims that
strongly resemble private class actions shouldn't be able to
escape CAFA's reach.
"In recent years, amici's members have faced a marked increase in
state-court litigation brought by state attorneys general in
collaboration with private counsel," PhRMA and ABA wrote in their
brief. "These lawsuits frequently bear many if not all of the
hallmarks of class actions."
The justices have agreed to examine a Fifth Circuit decision,
which parted ways from other circuits in finding that Mr. Hood's
suit counts as a mass action under CAFA, meaning that the case can
be moved to federal court.
Mr. Hood has argued that the Fifth Circuit's decision clashes with
four other cases brought by state attorneys general over the same
electronics cartel. He and other attorneys general have also said
the Fifth Circuit ruling is an "affront" to state sovereignty and
their ability to bring so-called parens patriae cases, among other
arguments.
The manufacturers said in their brief, however, that their
interpretation of CAFA doesn't limit states' sovereign powers,
saying that the issue is only one of the forum the suit is brought
in and that federal courts can enforce state laws. Congress
considered an amendment to exempt state attorneys general from the
provisions but didn't do so, they said.
In fact, they said the case is one of simple statutory
interpretation. CAFA defines mass actions as cases "in which
monetary relief claims of 100 or more persons are proposed to be
tried jointly on the ground that the plaintiffs' claims involve
common questions of law or fact." But the attorney general is
improperly trying to modify that requirement to define "persons"
as "named plaintiffs" to get around the fact that individual
consumers, and not the state of Mississippi, are the real parties
in interest, the companies argued.
For their part, NAM and ACI argued that these kinds of suits
should be able to be removed to federal court under the
Constitution's diversity of citizenship provisions, arguing that
"an unduly constrained view of federal jurisdiction has helped
fuel the litigation explosion of the last fifty years."
Allstate, meanwhile, weighed in to support the earlier Fifth
Circuit decision on which the panel in the current case based its
decision, Caldwell v. Allstate Ins. Co., a suit involving
insurance claims stemming from Hurricane Katrina.
"The Fifth Circuit's ruling in Caldwell was a sound judicial
determination that CAFA jurisdiction could not be defeated merely
by disguising private damage claims as an action by a state
attorney general," Allstate wrote. "Caldwell not only advances
CAFA's broad remedial purposes, but it is fully consistent with
the plain text of CAFA."
For its part, DRI argued that if the Supreme Court reversed the
Fifth Circuit's decision, it would let plaintiffs attorneys shield
suits with "national implications" from federal courts by working
with state attorneys general, a collaboration which the defense
group said has "resulted in a number of serious problems for the
civil justice system."
WLF likewise said out-of-state defendants should be able to remove
their cases to federal court to ensure that they can make their
arguments before an impartial court.
A representative for the Mississippi attorney general's office was
not immediately available for comment on Sept. 11.
As with many other attorneys general, Mr. Hood sued on behalf of
Mississippi residents after a 2006 U.S. Department of Justice
investigation revealed that AU Optronics Corp. and other LCD
makers orchestrated a global conspiracy to fix prices on the
displays, which are widely used in laptops, monitors and other
electronic devices.
But when the rest of the states signed a $539 million settlement,
Mississippi, California, Illinois, South Carolina and Washington
opted to pursue parens patriae cases in their respective state
courts instead. The defendants removed each of the cases, but
each state successfully fought to have the cases sent back to
state court, except for Mississippi.
Access to the Courts Initiative and NAM are represented by in-
house counsel and Cooper & Kirk PLLC. Allstate is represented by
Dentons US LLP. DRI is represented by in-house counsel and
Plunkett Cooney. WLF is represented by in-house counsel. PhRMA
and American Bankers Association are represented by WilmerHale LLP
Mississippi is represented by the attorney general's office as
well as attorneys from Massey & Gail LLP, Abraham & Rideout and
Zimmerman Reed PLLP.
Toshiba is represented by White & Case LLP and Wise Carter Child &
Caraway PA. HannStar Display Corp. is represented by Freitas
Tseng & Kaufman LLP. AU Optronics Corp. is represented by
Nossaman LLP and Phelps Dunbar LLP. Chi Mei Corp. is represented
by Davis Polk & Wardwell LLP and Cummings LLP. LG Display Co.
Ltd. is represented by Paul Hastings LLP, Butler Snow O'Mara
Stevens and Cannada PLLC and Wyche PA. Samsung Electronics Co.
Ltd. is represented by Covington & Burling LLP. Sharp Corp. is
represented by Pillsbury Winthrop Shaw Pittman LLP.
The case is State of Mississippi v. AU Optronics Corp. et al.,
case No. 12-1036, in the U.S. Supreme Court.
AUSTRALIA: Scraps Planned 50% Rent Hike After Class Action
----------------------------------------------------------
Peninsula Weekly reports that residents with a disability are
celebrating after the state government scrapped a planned 50 per
cent rise in rent for people living in supported accommodation.
The decision followed class action by thousands of Victorians with
disabilities.
Villamanta Disability Rights Legal Service represented more than
2000 residents at an initial hearing and was given the green light
to begin legal action on September 13 to demand the government
reverse its decision to increase board and lodging fees to levels
that threatened to eat up 75 per cent of the disability pension.
The government backed down after the Victorian Civil and
Administrative Tribunal (VCAT) said each resident would have to
present their case individually.
Roslyn Fitton, whose son, Michael, has cerebral palsy and an
intellectual disability and lives in supported accommodation in
Deer Park, welcomed the decision.
She told the Weekly she feared her son's active social life would
have changed drastically with less money.
"The past few weeks have been hard. I've been stressed and sick
myself; it gets to you," she said.
The government said the higher fees would have put Victoria on par
with other states. It said the changes would have saved $44
million over four years and funnelled more money into support
packages for people with disabilities waiting for accommodation.
"The government remains concerned that the current fee structure
is unfair, inequitable and lacks transparency for people with a
disability," a spokesman for Mental Health Minister Mary
Wooldridge said.
Kevin Stone, chief executive of the Victorian Advocacy League for
Individuals with Disability, said the planned hike was "grossly
unfair, deeply unjust and poorly constructed".
"This is a victory for people with disabilities and their
families," he said.
BANK OF AMERICA: Judge Okays $4MM Accord in Late Fee Class Action
-----------------------------------------------------------------
David McAfee and Megan Stride, writing for Law360, report that a
Rhode Island federal judge on Sept. 12 approved Bank of America
Corp.'s revised $4 million settlement aimed at resolving a class
action over allegedly unfair late fees imposed on credit card
customers, finding that the new agreement properly awards the
parties without excessive attorneys' fees.
U.S. District Judge Joseph A. DiClerico Jr., sitting by
designation from the District of New Hampshire, approved the
settlement after rejecting an earlier $2.2 million deal last year,
finding that its $1.5 million in class counsel fees and expenses
dwarfs class members' recovery.
Judge DiClerico denied without prejudice lead plaintiffs Bruce J.
Trombley and Ryan Sukaskas' bid for attorneys' fees and costs,
class certification, and final approval of the settlement,
concluding that the proposed attorneys' fees made up too great a
proportion of the award.
But the parties have now agreed that class counsel would submit a
request for fees and costs in an amount that does not exceed 30
percent of the $4 million fund. Judge DiClerico on Sept. 12
approved the agreement, along with an award of $1.2 million in
fees and costs.
"While the requested attorneys' fees and costs are 30 percent of
the entire settlement fund, they are slightly less than 50 percent
of the benefit to the class," Judge DiClerico wrote in the order.
"In the circumstances of this case, however, where the individual
loss to each class member was small and the case has consumed
nearly five years in litigation, the amount of fees and costs
requested is reasonable."
The deal would resolve the suit Messrs. Trombley and Sukaskas
launched in November 2008 alleging the bank imposed late fees and
other penalties when they made timely credit card payments on or
close to the due date.
The plaintiffs initially brought claims for breach of contract,
breach of the duty of good faith and fair dealing, violation of
the Truth in Lending Act, and unconscionability of BofA's credit
card agreements -- but later stipulated to the dismissal of the
unconscionability claim without prejudice.
The court also previously ruled in favor of BofA on the breach of
contract and TILA claims, leaving only the plaintiffs' claim that
the bank violated the duty of good faith and fair dealing by
failing to post their payments on the day they were received and
without imposing additional fees.
Under the terms of the revised settlement agreement, the 3,591
class members who submitted approved claims will each receive $40,
for a total of nearly $144,000. Other BofA cardholders who
received notice of the class action settlement but did not submit
a claim will each receive a pro rata share of what is left of the
settlement fund after the approved claims, administrative costs
and attorneys' fees are paid, according to the order.
Representatives for the parties didn't immediately return requests
for comment on Sept. 12.
The plaintiffs are represented by Peter N. Wasylyk of the Law
Offices of Peter N. Wasylyk and Michael D. Donovan and Noah Axler
of Donovan Axler LLC.
Bank of America is represented by Robert G. Flanders Jr. --
rflanders@hinckleyallen.com -- and Adam M. Ramos --
aramos@hinckleyallen.com -- of Hinckley Allen & Snyder LLP and
Mark P. Ladner -- mladner@mofo.com -- and David J. Fioccola --
dfioccola@mofo.com -- of Morrison & Foerster LLP.
The case is Bruce J. Trombley v. Bank of America Corp., case
number 1:08-cv-00456, in the U.S. District Court for the District
of Rhode Island.
BLACKSTONE GROUP: December 18 Settlement Fairness Hearing Set
-------------------------------------------------------------
The following statement is being issued by Robbins Geller Rudman &
Dowd LLP pursuant to an order of the United States District Court
for the District of New York (Southern Division):
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
LANDMEN PARTNERS INC., Individually
and On Behalf of All Others Similarly Situated,
Plaintiff,
vs.
THE BLACKSTONE GROUP L.P., et al.,
Defendants.
Civil Action No. 08-cv-03601-HB-FM
CLASS ACTION
SUMMARY NOTICE
TO: ALL PERSONS AND ENTITIES WHO PURCHASED THE COMMON
UNITS OF THE BLACKSTONE GROUP L.P. IN ITS INITIAL PUBLIC OFFERING
OF SUCH COMMON UNITS IN THE UNITED STATES OR IN THE OPEN MARKET ON
THE NEW YORK STOCK EXCHANGE BETWEEN JUNE 21, 2007 AND MARCH 12,
2008, INCLUSIVE
YOU ARE HEREBY NOTIFIED that pursuant to an Order of the United
States District Court for the Southern District of New York, a
hearing will be held on December 18, 2013, at 11:00 a.m., before
the Honorable Harold Baer, Jr., at the Daniel Patrick Moynihan
United States Courthouse, Courtroom 23B, 500 Pearl Street, New
York, New York 10007, for the purposes of determining: (1) whether
the proposed settlement of this securities class action for the
sum of.$85,000,000 (U.S.) in cash should be approved by the Court
as fair, reasonable, and adequate; (2) whether, thereafter, this
Action should be dismissed with prejudice against Defendants, as
set forth in the Settlement Agreement, dated August 28, 2013; (3)
whether the Plan of Distribution of settlement proceeds is fair
and reasonable, and therefore should be approved; (4) whether the
application by Lead Counsel for an award of attorneys' fees and
expenses incurred in connection with prosecution of the Action,
together with interest thereon, should be granted; and (5) whether
the Court should approve an award to the Lead Plaintiffs for their
costs and expenses (including lost wages) incurred in representing
the Class.
If you purchased Blackstone common units in its initial public
offering of such common units in the United States or in the open
market on the New York Stock Exchange between June 21, 2007 and
March 12, 2008, inclusive, your rights may be affected by this
Action and the settlement thereof. If you have not received a
detailed Notice of Proposed Settlement of Class Action and a copy
of the Proof of Claim and Release form, you may obtain copies by
writing to Blackstone Securities Litigation, Claims Administrator,
c/o Gilardi & Co. LLC, P.O. Box 8040, San Rafael, CA 94912-8040,
or by downloading this information at http://www.gilardi.comor
http://www.BlackstoneIPOCase.comwhere you can obtain additional
information about this Settlement and the Action. If you are a
Class Member, in order to share in the distribution of the Net
Settlement Fund, you must submit a Proof of Claim and Release form
postmarked no later than December 10, 2013, establishing that you
are entitled to a recovery. You will be bound by any judgment
rendered in the Action unless you request to be excluded, in
writing, to the above address, postmarked by November 12, 2013.
Any objection to any aspect of the Settlement, Plan of
Distribution, request for an award of attorneys' fees and expenses
to Lead Counsel and/or the application for reimbursement of costs
and expenses to Lead Plaintiffs, must be filed, with all
supporting papers and documentation, with the Clerk of the Court
no later than November 12, 2013, and received by the following no
later than November 12, 2013:
ROBBINS GELLER RUDMAN & DOWD LLP
Joseph Russello, Esq.
58 South Service Road, Suite 200
Melville, New York 11747
Telephone: 619-231-1058
E-mail: jrussello@rgrdlaw.com
BROWER PIVEN
A PROFESSIONAL CORPORATION
Brian C. Kerr, Esq.
475 Park Avenue South, 33rd Floor
New York, New York 10016
E-mail: kerr@browerpiven.com
Counsel for Lead Plaintiffs and the Class
SIMPSON THACHER & BARTLETT LLP
Bruce D. Angiolillo, Esq.
425 Lexington Avenue
New York, New York 10017
Counsel for Defendants
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING
THIS NOTICE.
THIS IS ONLY A SUMMARY NOTICE. IF YOU BELIEVE YOU MAY BE A MEMBER
OF THE CLASS, YOU ARE URGED TO OBTAIN A COPY OF THE FULL NOTICE,
WHICH IS ACCESSIBLE AT WWW.GILARDI.COM OR
WWW.BLACKSTONEIPOCASE.COM, OR BY CALLING 1-888-283-8021.
DATED: August 30, 2013
BY ORDER OF THE COURT UNITED STATES DISTRICT COURT SOUTHERN
DISTRICT OF NEW YORK
BP PLC: Deepwater Horizon Questions Forwarded to Texas High Court
-----------------------------------------------------------------
John Council, writing for Texas Lawyer, reports that fundamental
questions about the reach of commercial-liability policies in
massive pollution cases are headed to the Texas Supreme Court,
after the 5th U.S. Circuit Court of Appeals sent an appeal
involving the Deepwater Horizon explosion to the state's highest
civil court for consideration.
The certified questions the 5th Circuit forwarded to the Supreme
Court arise out of the 2010 explosion of the Deepwater Horizon, an
offshore drilling platform that sank in the Gulf of Mexico and
caused the largest oil spill in U.S. history.
At the time of the disaster, the Deepwater Horizon was engaged in
exploratory drilling under a contract with BP American Production
Co. (BP), which later sought indemnity for the pollution-related
liabilities under an insurance policy purchased by the Deepwater
Horizon's owner, Transocean Offshore Deepwater Drilling Inc.
(Transocean). The question the Texas Supreme Court ultimately
will have to consider is whether to look at the insurance
contract, the drilling contract or both in determining whether
Transocean's insurance policy covers BP's pollution liabilities,
according to the 5th Circuit's Aug. 29 decision in In Re:
Deepwater Horizon.
"It's a very, very important issue to the industry," says
John Elsley -- john.elsley@roystonlaw.com -- of counsel at Royston
Rayzor in Houston, who represents Transocean in the case. He
notes that it's common for oil companies to assume greater
insurance risks for well blow-outs than drilling contractors do.
To answer the questions, the Supreme Court will have to revisit
its 2008 opinion Evanston Insurance Co. v. ATOFINA Petrochemicals
Inc. ATOFINA examined whether a commercial umbrella policy --
which the insured purchased to secure its indemnity obligations as
part of a service contract with a third party -- also provides
direct liability coverage for the third party, according to the
5th Circuit's decision in In Re: Deepwater Horizon.
In ATOFINA, the Supreme Court found that ATOFINA was covered for a
wrongful-death claim that occurred at its oil refinery as an
additional insured under an umbrella policy purchased by one of
its contractors. To arrive at its conclusion, the Supreme Court
noted that, instead of looking at the "service agreement" between
ATOFINA and its contractor to determine coverage, it based its
decision "on the terms of the umbrella insurance policy itself,"
writes the 5th Circuit.
The 5th Circuit notes in its decision that Transocean, BP and the
insurer parties in the case agree that ATOFINA is instructive, but
they offer different applications of how its holdings should apply
to their coverage dispute.
The 5th Circuit also suggests that the doctrine of contra
proferentem -- which holds that, if an insurance-coverage
provision is susceptible of more than one reasonable
interpretation, a court must interpret that provision in favor of
the insured -- may apply to the case.
The questions the Supreme Court will have to answer, if it accepts
In Re: Deepwater Horizon for review, include:
1. Whether ATOFINA compels a finding that BP is covered for the
damages at issue, because the language of the umbrella policies
alone determines the extent of BP's coverage as an additional
insured if, and so long as, the additional insured and indemnity
provisions of the drilling contract are "separate and
independent"; and
2. Whether the doctrine of contra proferentem applies to the
interpretation of the insurance coverage provision of the drilling
contract under the ATOFINA case, given the facts of this case?
David Goodwin -- dgoodwin@cov.com -- a partner in the San
Francisco office of Covington & Burling who represents BP, did not
return a call for comment. Neither did Richard Dicharry --
evan.dicharry@phelps.com -- a partner in New Orleans' Phelps
Dunbar who argued the case on behalf of insurers Lloyd's of London
and Ranger Insurance at the 5th Circuit.
Mr. Elsley believes the Supreme Court will have to look at the
drilling contract between BP and Transocean that required the
liability coverage -- and not the insurance policy alone -- to
determine whether BP is covered for the pollution claims.
"The drilling contractors like Transocean only take responsibility
for the drilling rig itself. And that's what the drilling
contract explicitly says," Mr. Elsley says. "And there's no
dispute about that. And because the policy incorporates the
drilling contract, they have to be read together."
BRANCH BANKING: Court Compels Arbitration in "Hunter" Class Action
------------------------------------------------------------------
In HUNTER v. BRANCH BANKING AND TRUST COMPANY, the Defendant's
motion to dismiss under Fed. R. Civ. P. 12(b)(1), or compel
arbitration, presents questions concerning individual and
associational standing arising from litigation complaining of
automated teller machines that Plaintiffs allege are not compliant
with federal and Texas disability laws.
Chief District Judge Sidney A. Fitzwater concluded that the
Plaintiffs have standing. Accordingly, the court denied the
Defendant's motion to dismiss but granted its unopposed motion to
compel arbitration.
The case is ELENA HUNTER, on behalf of herself and all others
similarly situated, et al., Plaintiffs, v. BRANCH BANKING AND
TRUST COMPANY d/b/a BB&T, Defendant, CIVIL ACTION NO. 3:12-CV-
2437-D, (N.D. Tex.).
A copy of the District Court's August 12, 2013 Memorandum Opinion
and Order is available at http://is.gd/3vD3xJfrom Leagle.com.
CATHAY FOREST: Settles Class Action; November 22 Hearing Set
------------------------------------------------------------
Cathay Forest Products Corp. on Sept. 13 disclosed that it and
others have entered into an agreement to settle the proposed class
action litigation previously brought in the Ontario Superior Court
of Justice by Mac Killoran and originally disclosed by the Company
in a news release dated September 12, 2011. The settlement
agreement is subject to approval by the Ontario Superior Court of
Justice. If approved, the settlement will have a value of C$1.9
million to class members, before deductions for legal fees and
expenses to administer the settlement. The payment of such amount
will be funded by the Company's insurer.
As previously disclosed by the Company, the Class Action advances
a number of claims against the Company and six of its former
directors and officers as named defendants, primarily relating to
financial information disclosed by the Company in 2009 and 2010
that was the subject of the financial restatement announced by the
Company in February 2011.
On September 13, 2013, the Ontario Superior Court of Justice
issued an order certifying the Class Action solely for settlement
purposes. The certification of the Class Action is conditional
upon the Court's approval of the settlement agreement at a hearing
scheduled to take place on November 22, 2013.
The proposed settlement is a compromise of disputed claims and is
not an admission of liability, wrongdoing or fault on the part of
any of the settling defendants, including the Company. Further
information regarding the settlement and the settlement approval
hearing may be found at http://www.classaction.cafrom
September 17, 2013.
CHESAPEAKE APPALACHIA: Settlement Gets Preliminary Court Approval
-----------------------------------------------------------------
Terrie Morgan-Besecker, writing for The Times-Tribune, reports
that a federal judge on Sept. 12 granted preliminary approval to a
$7.5 million settlement of a class-action lawsuit filed against
natural gas producer Chesapeake Appalachia by several thousand
Pennsylvania leaseholders.
U.S. District Judge Malachy Mannion said he reviewed the terms of
the proposed settlement and agrees it adequately represents the
interests of potential claimants.
Attorneys for the leaseholders and Chesapeake agreed on Aug. 30 to
settle a lawsuit that alleged the company, the second largest
natural gas producer in the nation, wrongly charged them post-
production fees related to the refinement and transportation of
gas extracted from Marcellus Shale wells drilled on their
properties.
According to the suit, Chesapeake deducted post-production fees
from royalties paid the leaseholders, despite terms in the leases
that preclude them from doing so. The suit further alleged the
fees charged were in excess of the actual and reasonable costs the
company incurred.
In his ruling, Judge Mannion said the agreement adequately
compensates leaseholders, providing a payment of 55 percent of all
post-production cost deductions made before Sept. 1 and a 27.5
percent payment of deductions made after that date. The
settlement also negates the need for leaseholders to file
individual lawsuits, which will save both sides a potentially
protracted and expensive legal battle, the judge said.
The order clears the way for attorneys to move forward with
implementing the settlement.
The judge directed the settlement administrator, Total Class
Solutions, to mail notice of the proposed settlement to all
potential class members by Oct. 10. A hearing regarding final
approval of the settlement is set for Dec. 10.
CHILDREN'S PLACE: Recalls Children's One-Piece Footed Pajamas
-------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
The Children's Place, of Secaucus, N.J., announced a voluntary
recall of about 38,000 children's one-piece footed pajamas.
Consumers should stop using this product unless otherwise
instructed. It is illegal to resell or attempt to resell a
recalled consumer product.
The footed pajamas fail to meet the federal flammability standard
for children's sleepwear, posing a burn hazard to children. The
garments are being recalled because they do not meet the tight-
fitting sizing requirements.
There were no incidents that were reported.
The recall involves three styles of The Children's Place bunny-
themed one-piece cotton footed pajamas. One style is pink with
dark pink bunnies and a ruffle at the neck. It was sold in size
9-12 months. This style has a sewn-in label at the side seam with
both 2158 and one or more of the following numbers: 042521,
042523, 042571, 042572, 042774 or 042816. The other two styles
are both blue/green with bunnies on the feet and bunny print
fabric. They were sold in sizes 9-12 months, 12-18 months, 18-24
months, 2T and 3T. One style has bunnies with eyeglasses. The
other has bunnies and yellow chicks. Both styles have a sewn-in
label at the side seam with both 2598 and one or more of the
following numbers: 030647, 030779, 038826, 670409, 670602, 670603
or 945210. "Made with love by PLACE" with a heart outline is
printed at the neck of the pajamas.
Pictures of the recalled products are available at:
http://is.gd/hsn4vk
The recalled products were manufactured in China and sold
exclusively at The Children's Place stores nationwide and online
at http://www.childrensplace.comfrom January 2012 through May
2013 for about $15.
Consumers should immediately take the recalled pajamas away from
children and return them to any The Children's Place store for a
full refund.
CHOBANI: FDA Receives Complaints Over Recalled Yogurt
-----------------------------------------------------
WKRB News reports that complaints are being received by the U.S.
Food and Drug Administration about Chobani yogurt that has been
recalled. As of September 13, over 170 people had been in contact
with the regulatory agency to say they had become sick after
ingesting the yogurt that had been recalled.
The FDA to date has not yet tested any individuals that called in
to complain. In addition, it has not linked an association
between the illnesses and the yogurt in question, said a
spokesperson from the agency on Sept. 13.
Chobani, on Sept. 5, issued its own voluntary recall of its yogurt
products due to product concerns. Scattered reports of illnesses
associated with the yogurt that was in containers that appeared
swollen or bloated.
Some of its customers reported a hissing sound, exploding
containers and an odd taste to the yogurt.
It was found that the yogurt was contaminated with a type of mold
known as Mucor circinelliodes, which causes spoilage in dairy
products.
For the majority of people, the mold does not pose any serious
risk to a person's health. However, if can, particularly if it is
inhaled, sicken those who have compromised or weakened immune
systems. Included in that group are pregnant women, small
children, senior citizens, people receiving chemotherapy and those
on a daily antacid regimen.
Those who suspect the yogurt they have has something wrong should
not sniff to check if it has bad odor.
The products that were recalled had best by date of Sept. 11 to
Oct. 7.
Included in the recalled products were every flavor of 6-ounce
cups of Chobani, every flavor of 16-ounce cups, every flavor of
its 32-ounce tubs and every flavor of its cups that are 3.5 ounces
in size. Also included in the recalled products are 2.25-ounce
tubes of Chobani Champions in 8, 16 as well as 32 count in all
flavors.
CITY HOMES: Files Chapter 11 Bankruptcy Amid Lead-Paint Lawsuits
----------------------------------------------------------------
City Homes Inc., the non-profit owner of 327 affordable housing
units in Baltimore, filed a petition for Chapter 11 reorganization
(Bankr. D. Md. Case 13-25371) to deal with 70 lead-paint lawsuits.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the tax-exempt company said in a court filing that it
started the first project in 1987. Although tenants are "very low
income," the vacancy rate ranges from 2 percent to 6 percent in
"troubled neighborhoods," a court filing shows.
The losses in 2011 and 2012 were $783,000 and $431,000,
respectively. Litigation expense contributed to the losses.
CLEAR CHANNEL: Outdoor Unit Wins OK of Settlement in Investor Suit
------------------------------------------------------------------
Jef Feeley, writing for Bloomberg News, reports that Clear Channel
Outdoor Holdings Inc. won approval of a settlement calling for the
provider of outdoor-advertising displays to pay a $200 million
dividend to resolve a shareholder lawsuit over cash transfers to
its former parent company.
San Antonio, Texas-based Clear Channel Outdoor provided a
"substantial benefit" to investors by agreeing to pay the dividend
to end litigation over loan agreements with Clear Channel
Communications Inc., Delaware Chancery Court Judge Leo Strine said
on Sept. 9 at a hearing in Wilmington. Clear Channel Outdoor was
spun off from the radio broadcaster in 2005.
The dividend, which amounts to more than 63 cents per share, "is
not a trifle," Judge Strine said. Public investors stand to get
about $22 million of the dividend with the rest going to Clear
Channel Communications, the judge said. The broadcaster owns 89
percent of the billboard provider.
A Florida pension fund sued the outdoor-advertising provider last
year accusing directors of improperly refusing to renege on
agreements requiring them to transfer more than $600 million in
cash to Clear Channel Communications. That company is owned by
private-equity funds Bain Capital LLC and Thomas H. Lee Partners
LP.
Reserves Depleted
The transfers had so depleted Clear Channel Outdoor's cash
reserves that it had to borrow $2 billion to fund a special
dividend, the fund's lawyers alleged in the case.
The Florida pension fund also alleged the cash-transfer amounts to
a sweetheart deal and forces the unit and public shareholders to
become "an involuntary source of capital" for the private-equity
funds that own its former parent.
Judge Strine also approved $6 million in fees for the fund's
lawyers. Those fees will be paid by Clear Channel Communications
in addition to the settlement, Stuart Grant, one of the fund's
attorneys, told Judge Strine on Sept. 9.
The case is the City of Pinellas Park Firefighters Pension Board
v. Covell, 7315, Delaware Chancery Court (Wilmington).
CROCS INC: February 2014 Fairness Settlement Hearing Set
--------------------------------------------------------
The following statement is being issued by Brower Piven, A
Professional Corporation regarding the In re Crocs, Inc.
Securities Litigation.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO
Civil Action No. 07-cv-02351-PAB-KLM (consolidated with:Civil
Action No. 07-cv-02412-MSK)(consolidated with:07-cv-02454-
EWN)(consolidated with:07-cv-02465-WYD)(consolidated with:and 07-
cv-02469-DME)
In re Crocs, Inc., Securities Litigation
SUMMARY NOTICE
TO: ALL PERSONS WHO PURCHASED OR ACQUIRED CROCS, INC. ("CROCS")
PUBLICLY TRADED SECURITIES DURING THE PERIOD BETWEEN APRIL 2, 2007
THROUGH APRIL 14, 2008, INCLUSIVE
YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States
District Court for the District of Colorado, that a hearing will
be held on February 13, 2014, at 9 a.m., before the Honorable
Philip A. Brimmer at the United States Courthouse, 901 19th
Street, Courtroom A701, Denver, Colorado, for the purpose of
determining (1) whether the proposed partial settlement of the
claims in the Action for the sum of $10,000,000 in cash should be
approved by the Court as fair, reasonable, and adequate; (2)
whether a proposed settlement class should be certified for the
purposes of the Settlement; (3) whether, thereafter, the Action
should be dismissed with prejudice as to the Settling Defendants
pursuant to the terms and conditions set forth in the Stipulation
and Agreement of Partial Class Settlement dated May 14, 2012; (4)
whether the proposed plan of allocation is fair, reasonable, and
adequate and therefore should be approved; and (5) whether
Plaintiffs' Counsel's request for an award of attorneys' fees of
up to 33 1/3% of the Settlement Fund and up to $250,000.00 in
reimbursement of expenses incurred in connection with the Action
should be approved.
If you purchased or acquired Crocs securities during the period
April 2, 2007 through April 14, 2008, inclusive, your rights may
be affected by the Settlement of this Action. If you have not
received a detailed Notice of Pendency and Proposed Partial
Settlement of Class Action and a copy of the Proof of Claim and
Release form, you may obtain copies by writing to:
Crocs Securities Litigation
Claims Administrator
c/o GCG PO Box 9889
Dublin, OH 43017-5789
Telephone: (888) 331-9141
If you are a Settlement Class Member, in order to share in the
distribution of the Net Settlement Fund, you must submit a
complete and valid Proof of Claim and Release form postmarked no
later than December 26, 2013, establishing that you are entitled
to recovery.
IF YOU BELIEVE YOU MIGHT BE A SETTLEMENT CLASS MEMBER, YOU ARE
STRONGLY URGED TO OBTAIN THE NOTICE AND PROOF OF CLAIM AND RELEASE
FORM AS THIS IS ONLY A SUMMARY NOTICE AND THE FULL DETAILS OF THE
PROPOSED SETTLEMENT, PLAN OF ALLOCATION, REQUEST FOR ATTORNEYS'
FEES AND REIMBURSEMENT OF EXPENSES, AND THEIR POTENTIAL IMPACT ON
YOU AND YOUR RIGHTS ARE SET FORTH IN THAT NOTICE.
If you wish to be excluded from the Settlement Class, you must
submit a request for exclusion postmarked no later than November
26, 2013, in the manner and form explained in the detailed Notice
referred to above. All Members of the Settlement Class who do not
timely and validly request exclusion from the Settlement Class
will be bound by any judgment entered in the Action pursuant to
the terms and conditions of the Stipulation.
If you wish to object to the proposed settlement, the proposed
plan of allocation and/or Plaintiffs' Counsel's request for an
award of attorneys' fees and/or reimbursement of expenses, you
must file any objection in the manner and with the content
explained in the detailed Notice referred to above, no later than
November 26, 2013, with:
The Court:
CLERK OF THE COURT
UNITED STATES DISTRICT COURT
DISTRICT OF COLORADO
Alfred A. Arraj
United States Courthouse
Room A-105901
19th Street
Denver, CO 80294-3589
Plaintiffs' Counsel:
Charles J. Piven, Esq.
BROWER PIVEN
A Professional Corporation
1925 Old Valley Road
Stevenson, MD 21153
E-mail: piven@browerpiven.com
and
Counsel for Settling Defendants:
Paul T. Friedman, Esq.
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, CA 94105
E-mail: pfriedman@mofo.com
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING
THIS NOTICE. If you have any questions about the settlement, you
may contact Plaintiffs' Counsel or the Claims Administrator at the
addresses listed above or go to the following website:
http://www.gcginc.com/cases/CrocsSecuritiesLitigation
DATED: AUGUST 28, 2013
BY ORDER OF THE COURT
UNITED STATES DISTRICT COURT
DISTRICT OF COLORADO
DELL FINANCIAL: Loses Bid to Dismiss Improper Billing Class Action
------------------------------------------------------------------
Jeff Sistrunk and Sean McLernon, writing for Law360, report that a
New York federal judge on Sept. 12 left largely intact Belsito
Communications Inc.'s putative class action against Dell Financial
Services LLC over allegations it has caused its business
customers' credit ratings to suffer by sending billing statements
to incorrect addresses, saying Belsito sufficiently alleged DFS
breached its contract with the company.
U.S. District Judge Cathy Seibel largely denied DFS' motion to
dismiss Belsito's complaint, leaving intact the breach of
contract, breach of implied covenant of good faith and fair
dealing, and defamation of credit claims. The judge also refused
DFS' motion to strike the class claims, finding the proposed class
is not impossible to define as a matter of law.
However, Judge Seibel dismissed DFS' parent company, Dell Inc.,
several Dell subsidiaries and collection agency ARS National
Services Inc. from the suit, saying Belsito presented no evidence
they were involved in DFS' actions.
Belsito claims DFS' failure to send bills for a $6,500 laptop to
its correct address caused KeyBank NA to suspend its business line
of credit, resulting in the loss of a $75,000 investment in one of
its news publications. The company is seeking to represent a
class of all Dell business customers damaged by the company's
alleged billing miscues.
According to the suit, Belsito President Joseph P. Belsito
conducted "Internet research" following his company's trouble with
DFS and allegedly discovered that the computer maker had
systemically sent billing statements to incorrect addresses that
were never authorized by customers. The problem may have to do
with a computer glitch in DFS' software, the complaint maintained.
Upon purchasing the laptop from Dell in October 2010, Belsito
Communications confirmed current contact information, including
phone number and mailing address, with a company representative,
according to the lawsuit. But instead of sending statements to
the address provided, DFS mailed the charges to an old Belsito
address that hadn't been in use for more than five years,
according to the complaint. The charges were also levied
prematurely because the deal for the laptop required no payments
for the first six months, the suit contended.
In her order, Judge Seibel said Belsito Communications has
plausibly alleged DFS breached its contract by billing it for the
laptop within the first six months and by failing to send bills to
the plaintiff's new address. The judge rejected DFS' contention
that the breach of contract claim should be dismissed because
Belsito failed to uphold its end of the contract -- that is, by
not making payments on the laptop.
"Because plaintiff has plausibly alleged that DFS materially
breached the modified [credit agreement], plaintiff's performance
thereunder plausibly is excused and its nonpayment is plausibly
not a bar to its breach of contract claim," the order said.
The plaintiff has adequately pled that DFS breached the implied
covenant of good faith and fair dealing because DFS had an implied
duty to not treat Belsito as being delinquent on the bill payments
unless it was really delinquent, the judge wrote. Moreover, DFS
could have taken steps to undo the damage from the false report of
Belsito's delinquency but did not, the order said.
"Although it is less clear that plaintiff has plausibly alleged
that it was deprived of the fruits of the contract -- to the
contrary, it seems to have been using the laptop computer without
having paid anything -- nevertheless it arguably was deprived of
the fruits of the contract via the damage to its business from the
false report," the order said.
Belsito's defamation of credit claim can proceed because the facts
in the complaint support its contention DFS acted knowingly or
recklessly in reporting an erroneous charge-off on the laptop to
consumer credit reporting agency Equifax. A year before that
report was filed, a DFS manager spoke with Belsito and agreed the
charge-off was erroneous, according to the order. Belsito has
presented facts to show DFS failed to take any action to correct
the error, the judge wrote.
Judge Seibel dismissed Belsito's state law claims of negligence
and gross negligence, saying the plaintiff didn't show DFS has any
legal duty independent of the contract that would support those
claims.
Belsito is represented by Kevin D. Bloom of Bloom & Bloom PC and
Robert N. Isseks.
Dell is represented by John F. Cambria -- john.cambria@alston.com
-- Christina Spiller -- christina.spiller@alston.com -- and
Scott A. Elder -- scott.elder@alston.com -- of Alston & Bird LLP.
The case is Belsito Communications Inc. v. Dell Inc. et al., case
number 7:12-cv-06255, in the U.S. District Court for the Southern
District of New York.
DURCO AND CRANE: Jury Awards $38 Million in Garvin Asbestos Case
----------------------------------------------------------------
John Monk, writing for The State, reports that a Richland County
jury has awarded a Wagener equipment worker and his wife $38
million in damages for health problems linked to exposure to
asbestos.
Following a 21/2-week trial, the jury awarded plaintiff Lloyd
Strom Garvin, 74, $10 million in actual damages and another $1
million in actual damages to his wife of 50-plus years,
Velda Garvin, for loss of consortium.
The jury also ordered defendants Durco and Crane Co. to pay $11
million each in punitive damages to Lloyd Garvin. It ordered a
third defendant, Byron Jackson, to pay $5 million in punitive
damages.
A spokesman for Crane said on Sept. 12 the company will appeal.
Among possible grounds for appeal are "no credible evidence" and
excessive and unwarranted jury awards, said Terry Budd, a
Pittsburgh lawyer who represents Crane.
"The verdict is flawed," Mr. Budd said. "We're definitely
appealing."
Efforts to reach Charleston attorney Tim Bouch, who represented
Durco and Byron Jackson during the trial, were unsuccessful on
Sept. 5.
Durco, Byron Jackson and Crane are major companies that
manufacture pumps and valves. Mr. Garvin contended his years of
exposure to their asbestos-containing gaskets and packing in
valves and pumps that he used in factory and farm work caused him
to develop mesothelioma, a rare form of cancer that plaintiffs
said was nearly always caused by asbestos exposure.
The jury was out some four hours and returned a final verdict
around 9:00 p.m. on Sept. 11. Circuit Judge Garrison Hill of
Greenville presided.
Originally, Mr. Garvin's lawsuit named 13 defendants, but most had
been dropped or settled by the time the trial began Aug. 26.
Mr. Garvin's lawyers, Jessica Dean of Dallas and Theile McVey of
the Columbia firm Kassel McVey, argued at trial that defendants
Crane, Durco and Byron Jackson used asbestos in their products,
should have known about its dangers and failed to take action to
warn and protect people like Garvin who work around their
products.
Mr. Garvin's testimony and cross-examination during trial was
presented to the jury by a video recording displayed on a large
courtroom screen.
He is currently recovering from double pneumonia. His lawyers
contended at trial that he has less than a year to live because of
his cancer.
During closing arguments, Mr. Garvin's attorney Dean asked the
jury to award $1 million in actual damages for each year of life
that Garvin was expected to miss because of his fatal disease.
Garvin's life expectancy would have been another 10 to 11 years,
she argued.
Attorney Robert Meriwether of the Columbia firm Nelson Mullins and
Bouch were the defendants' attorneys during trial.
According to a complaint in 2012 action, some of Lloyd Garvin's
exposure to asbestos-containing equipment and products came in
Wagener while working on his family farm, as well as while working
as a heavy equipment operator in West Columbia and Aiken.
The trial took place in Richland County because the complaint,
filed in 2012, alleged some of the exposure had a Richland County
connection.
EASON LAW FIRM: Faces Class Action for Hiding Settlement Funds
--------------------------------------------------------------
The Missouri Collectors Association on Sept. 13 disclosed that a
class action lawsuit filed in St. Louis City Circuit Court on
September 9, 2013 by former clients of Missouri-based consumer
attorneys James Eason and Richard Voytas as well as The Eason Law
Firm (formerly known as Eason & Voytas) outlines serious
allegations that serve as a reminder for consumers to be aware of
a wolf in sheep's clothing.
"This lawsuit showcases that far too often occurrence of so-called
consumer advocates seeking to exploit lawful debt collection
activities in Missouri and throughout the country," said Missouri
Collectors Association spokesperson Mark Schiffman. "Legal action
taken on behalf of Missouri consumers should help resolve
legitimate wrongdoing and not be used as a vehicle to take
advantage of them in order to put money in their own pockets."
The class action suit potentially representing hundreds of
consumers filed by St. Louis, Mo. law firm The Barton Law Group
alleges that The Eason Law Firm withheld from its clients
thousands of dollars in settlement funds and judgment awards
relating to Fair Debt Collection Practices Act (FDCPA) and
Telephone Consumers Protection Act (TCPA) claims against debt
collection agencies. Conversion of these funds are a significant
breach of fiduciary duty to the clients they had pledged to serve.
According to the lawsuit, the plaintiffs are seeking to recover
the withheld funds, punitive damages, attorney's fees and court
costs.
"Legitimate debt collectors are not an enemy of consumers,"
Mr. Schiffman said. "They are advocates for protecting consumer
rights while balancing the difficult job of recovering rightfully
owed obligations that maintain America's credit-based economy."
More information about working with a debt collector can be found
at http://www.askdoctordebt.org
Missouri debt collectors provide significant economic impact in
the state and those who violate the law should be held fully
responsible for their actions. They annually recover more than
$1.3 billion on behalf of public, private and non-profit sector
clients; employ more than 7,500 Missourians with a payroll of $252
million; donate more than $1 million to local charitable causes
and volunteer nearly 14,000 hours to community-based
organizations.
EQT PRODUCTION: Judge Vows to Rule Promptly on Gas Royalty Suit
---------------------------------------------------------------
The Associated Press reports that a federal judge said on Sept. 12
he will rule promptly on whether natural gas royalty claims by
southwest Virginia landowners will move forward as a series of
class-action lawsuits.
U.S. District Judge James P. Jones heard arguments in the cases,
saying he was frustrated by how long the claims have been tied up
in court.
"I had hoped that over the three years this has been pending,
there would be some attempt at settlement that would in some way
solve this recognized problem, or that the Virginia legislature
. . . would have solved the issue, but nothing has happened,"
Judge Jones said.
The landowners are seeking release of more than $27 million in
royalties from state escrow and a full accounting from two
Pittsburgh-area energy companies, EQT Production Co. and CNX Gas
Co. The plaintiffs have said the companies have cheated them out
of their royalties. According to state law, they are entitled
one-eighth of the value of methane extracted from the coal seams
beneath their land. Their lawyers argued that after more than 20
years of being shortchanged, class-action litigation is the only
way to resolve the issue.
The energy companies, which operate thousands of gas wells in
Virginia's southwestern coalfield counties, argue that they've
followed the law and done nothing wrong. Their lawyers argued
that the individual claims are too diverse and complicated to be
handled as a class and that class-action litigation would not
provide resolution for these individual cases.
Don Barrett, lead attorney for the plaintiffs, laid out a road map
for how the cases would proceed following a class certification.
Within a week of the court order, he said, the plaintiffs would
file three motions for summary judgment.
The first would be to find that surface owners -- not coal owners
-- own the gas, a determination many believe was made in a 2004
Virginia Supreme Court ruling. This would allow the Virginia Gas
and Oil Board to release the money held in escrow because of the
presumed ownership conflict. The second would be to stop coal
owners from continuing to contest ownership of the gas.
The third motion would be for a full fiduciary accounting to every
gas owner. Mr. Barrett said if the court were to order such an
accounting, it might spur the companies to discuss a settlement.
David Stellings, another attorney for the landowners, said the
amount owed to each landowner would be determined in an orderly
process overseen by the court and similar to that used in other
class-action cases.
Jonathan Blank said after the hearing that the plaintiffs are
wrong in the claim that gas companies haven't been accountable.
FIDELITY NATIONAL: Court Decertifies Homeowners' Class Action
-------------------------------------------------------------
Igor Kossov, writing for Law360, reports that an Arizona federal
court on Sept. 11 decertified a homeowner's class action against
Fidelity National Title Insurance Co., finding that lead plaintiff
Miguel Ramirez has no straightfoward way to prove the insurer
charged excessive mortgage refinancing fees to tens of thousands
of customers.
Mr. Ramirez told the court in his 2011 motion for class
certification that he had a simple and effective way to comb
through Fidelity's records to determine eligible class members.
However, he later admitted that class criteria are more numerous
and complicated than he had originally stated, the court found.
Also, of a random sample of 194 names from Mr. Ramirez's putative
class list, more than half were ineligible for discounted fees and
thus ineligible as class members, according to the Sept. 11
decertification order.
"As evidenced by the 194 files sampled by the parties, the data
fields identified by plaintiff do not resolve issues common to the
class in a single stroke," Arizona federal judge Jennifer G. Zipps
wrote in the Sept. 11 order.
Mr. Ramirez refinanced his home in 2005 and bought a title
insurance policy from Fidelity, which charged him a premium rate
instead of a discounted reissue rate, Ramirez alleged in his
initial complaint. Per Arizona law, reissue rates are supposed to
be lower than rates for multi-party sales and cannot exceed
certain maximum amounts.
Mr. Ramirez launched his suit against Fidelity in March 2009,
alleging the company "routinely and systematically" overcharges
people who are eligible for discounted rates, according to court
documents. He filed a motion for class certification in May 2010,
which was granted in March 2011.
According to court documents, Mr. Ramirez said that he had found
52,000 eligible transactions but could only identify 17,800 by
name and address. Discovery disputes arose between the parties
after Ramirez demanded electronic versions of all records, with
Fidelity arguing it only had hard copies of certain records. The
court gave Mr. Ramirez several deadline extensions to continue
discovery.
In March, Mr. Ramirez gave Fidelity his class list. The insurer
randomly sampled 194 names and found that 114 of those were
correctly charged, which Mr. Ramirez agreed with, according to the
Sept. 11 order. Fidelity found that it overcharged only three of
the 194 people in the sample.
Mr. Ramirez told the court that he would need more time to
identify class members within the records he got from Fidelity,
saying there were multiple criteria that needed to be met.
Fidelity argued in its June motion to decertify that such
contradicted Mr. Ramirez's earlier assertions that he had a
workable method to identify the class. The court agreed with the
insurer on Sept. 11 and decertified the homeowner class.
Counsel for Mr. Ramirez wasn't immediately available for comment
on Sept. 12. Fidelity didn't immediately respond to requests for
comment.
Miguel Ramirez is represented by Richard J. Burke and Jeffrey A.
Leon of Complex Litigation Group; Stephen I. Leshner of Stephen I
Leshner PC; Jennifer Rust Murray -- jmurray@tmdwlaw.com -- and
Beth Ellen Terrell -- bterrell@tmdwlaw.com -- of Terrell Marshall
Daudt & Willie PLLC; and Benjamin A. Schwartzman --
bas@andersenbanducci.com -- of Andersen Banducci PLLC.
Fidelity National Title Insurance Company is represented by Sean
M. Ansberry, Derek E. Diaz, Robert J Fogarty --
rjfogarty@hahnlaw.com -- Michael J. Gleason --
mgleason@hahnlaw.com -- and Steven A. Goldfarb --
sagoldfarb@hahnlaw.com -- of Hahn Loeser & Parks LLP and
Christopher L. Callahan, Sherry Janssen Downer --
sdowner@fclaw.com -- and Margaret Olek Esler of Fennemore Craig
PC.
The case is Ramirez v. Fidelity National Title Insurance Company,
case number 4:09-cv-00230, in the U.S. District Court for the
District of Arizona.
FLORIDA: Faces Class Action Over Disabled Kids Nursing Home Care
----------------------------------------------------------------
The Associated Press reports that attorneys asked a federal judge
on Sept. 13 to grant class-action status to a lawsuit that says
the state is unnecessarily institutionalizing about 200 disabled
children in nursing homes and cutting services that would allow
them to receive care at home.
The children are kept in cold, hospital-like facilities, rarely
leave or go outside and share a common area with elderly patients,
the lawsuit says. The children are not exposed to social,
educational or recreational activities critical to development and
many of the their families live hundreds of miles away, according
to the lawsuit filed in 2012 on behalf of eight children.
It says the children could remain at home if the state paid for
private duty nursing care or could live more comfortably in a
group home setting but are unable to because Florida has
systematically slashed in-home services leaving parents with no
choice other than nursing homes. At the same time, the state
implemented policies that expanded nursing home care, by offering
facilities a $500 enhanced daily rate for caring for children,
which is more than double than what the state pays for adults.
"Nursing homes are not being viewed as the last possible
alternative to put a child," said Matthew Dietz, an attorney for
the children.
The state's goal is to reduce the need for private duty nursing
and to put most of the burden on the parents even though many of
the children require ventilators, feeding tubes and other
complicated machinery, he said.
Attorneys for the state argued that the children in the lawsuit
represent individual cases and are not indicative of a broader
state policy or "conduct that causes injury to every member of the
class," said attorney George Meros.
He said the state has granted the vast majority of requests for
private duty nursing and noted the state is mandated to save money
by not providing unnecessary services so that it can afford to
care of as many people as possible.
U.S. District Judge Robin S. Rosenbaum questioned at which point
the scale tips where enough individual cases accumulate to
underscore a policy.
"Is there some threshold where you could concede it stops becoming
a mistake and crosses that line to becoming a policy or unofficial
policy," she asked. She planned to make a ruling in the next few
weeks after further reviewing the cases.
Attorneys for the Justice Department also attended the Sept. 13
hearing. The agency filed a similar lawsuit against Florida in
July after visiting roughly 200 children in six nursing homes.
The DOJ said the state is violating the federal Americans with
Disabilities Act by unnecessarily institutionalizing children,
often for long periods of time.
"This is a civil rights case . . . they should not be segregated
from the community," said attorney H. Justin Park.
Officials for the Agency for Health Care Administration have
repeatedly said children should be cared for in the least
restrictive setting as possible and that the parents ultimately
decide to put their children in a facility.
Secretary Liz Dudek has said the state had recently improved an
"already strong program" and that 31 children with disabilities
have been discharged from nursing facilities this year. She also
chastised President Barack Obama's administration for the lawsuit
in a statement in July. She said it "shows that Washington is not
interested in helping families improve but instead is determined
to file disruptive lawsuits with the goal of taking over control
and operation of Florida's Medicaid and disability programs."
FORD MOTOR: Obtains Favorable Ruling in Truck Dealer Class Action
-----------------------------------------------------------------
The Associated Press reports that a jury has rejected a claim by
commercial truck dealers that Ford Motor Co. overcharged them over
11 years by offering discounts to other dealerships. The jury
returned the verdict on Sept. 11 in the class-action lawsuit filed
by Westgate Ford Truck Sales of Youngstown in 2002.
Dealers had won a nearly $2 billion award on the first trial in
2011. Last year, an appeals court threw out the ruling and said
Ford's defense must have more leeway.
No decision has been made on an appeal, attorney James Lowe,
representing dealers, said on Sept. 12. "It has been a long fight
and I suspect that it's not over," he said.
A message seeking comment was left for Ford's defense team.
The earlier award included a judgment of about $781 million and
about $1.2 billion in interest. It covered more than 3,000
dealerships and 474,000 trucks.
The appeals court had ruled that the trial judge abused his
discretion in excluding possible evidence in Ford's favor at the
first trial.
The appeals court called the dealership contracts in question
"ambiguous" and said it can be interpreted in different ways. It
said jurors, who originally only heard certain arguments because
some were excluded, should have heard all key arguments in the
case.
Mr. Lowe said the appeals court ruling was a factor in the second
trial. "It certainly did make a difference. There was much more
expansive presentation of evidence this time," he said.
The appeals court also ruled the trial judge erred in not allowing
Ford attorneys to challenge expert testimony from the plaintiffs
when it was determining damages in the case.
FRITO-LAY: Morrison & Foerster Discusses Class Action Ruling
------------------------------------------------------------
Rebekah Kaufman, Esq. -- rkaufman@mofo.com -- at Morrison &
Foerster LLP reports that a New York federal court dismissed
numerous claims against Frito-Lay North America, Inc. in a
multidistrict class action over "all natural" labels on Frito-Lay
products such as Tostitos, SunChips and Fritos Bean Dip that
allegedly contain genetically modified organisms (GMOs). In re
Frito-Lay North America, Inc. All Natural Litigation, 12-MD-2413
(RRM)(RLM).
U.S. District Judge Roslynn Mauskopf threw out warranty claims
under the federal Magnuson-Moss Warranty Act and Florida and New
York law as well as intentional misrepresentation claims under
Florida, New York and California statutes. The court refused to
dismiss plaintiffs' claims under California's Unfair Competition
and False Advertising laws as well as claims under the Florida
Deceptive and Unfair Practices Act. The court denied Frito Lay's
bid to dismiss or stay the action under the primary jurisdiction
doctrine, rejecting the recent trend by other courts to refer the
issue to the FDA of whether products containing GMOs can be
labeled "all natural."
''"Against this regulatory backdrop, Frito-Lay's request to
dismiss, or stay, this action for the FDA to address whether foods
containing bioengineered ingredients may be labeled 'natural' is
unwarranted. First, and foremost, the primary jurisdiction
doctrine does not apply when 'the issue at stake is legal in
nature and lies within the traditional realm of judicial
competence.' . . . 'This case is far less about science than it is
about whether a label is misleading,' and the reasonable-consumer
inquiry upon which some of the claims in this case depends is one
to which courts are eminently well suited, even well versed."
Judge Mauskopf expressed skepticism that the FDA would act in a
timely manner if at all:
"Here too, the agency would need far more than six months to
define the term 'natural,' or pass on whether foods containing
bioengineered ingredients may be labeled as 'natural,' and would
likely open that deliberation to public notice and comment. In an
analogous situation, the FDA took nine years to define the
requirements a manufacturer must meet before it can label a food
'gluten-free.'"
The court also rejected Frito-Lay's argument that the named
plaintiffs lacked Article III standing because their claims
included products they had not purchased. The court held that
each individual plaintiff had alleged sufficient facts
demonstrating standing and that the issue of whether they could
assert claims on behalf of purchasers of products that plaintiffs
themselves had not bought was an issue for class certification.
See our prior posts here and here discussing this issue.
GAMESTOP CORP: Judge Denies Bid to Dismiss Game Codes Suit
----------------------------------------------------------
Rebecca Freeman, writing for Finance Post, reports that a federal
judge has denied a motion by GameStop to dismiss a class action
lawsuit filed against the video game retailer regarding the
absence of single-use downloadable content codes for used games.
The lawsuit alleges that selling used video games without the
single use downloadable content codes violates the New Jersey
Consumer Fraud Act.
United States District Judge Robert Kugler made the opinion on the
lawsuit that was based on the three plaintiffs believing "their
pre-owned video games would include all of the content of a new
video game." The plaintiffs also alleged that purchasing a used
game then purchasing a single-use code separately would be more
expensive than purchasing the entire new $60 video game.
According to the lawsuit, the plaintiffs claim that GameStop knew
"DLC was not included with the purchase of pre-owned games, but
did not reveal this fact to plaintiffs." The plaintiffs also
allege that GameStop "induced" them to purchase the used games by
stating that its "used game trade program creates value for
customers" and by printing a tally of the savings on receipts.
According to the lawsuit, GameStop did not disclose that the used
video games did not include some downloadable content. The
content is included in the purchase price of new games.
Downloadable content can include "extra game characters, levels,
maps, screens, weapons, adventure scenarios" and the ability to
play against other gamers online, according to the lawsuit.
In the class action lawsuit, the plaintiffs allege "because the
pre-owned video games were missing DLC, they did not 'work in the
same manner as a copy of the same game' because 'significant
aspects of the original game'" were not included with the
purchase.
The lawsuit was originally filed in New Jersey state court in June
2012 before GameStop asked for the case to be moved to federal
court in August of that year. According to court documents,
GameStop sold 437,000 used games at its New Jersey stores between
October 2010 and July 2012. GameStop has made the argument that
it has posted signs in its stores that explain the downloaded
contents could require an additional purchase.
The plaintiffs are seeking refunds of $10 to $15 for each used
game purchased from New Jersey GameStop locations between October
2010 and July 2012. The retailer claims the video game boxes
disclose there could be additional costs associated with online
downloads for the video games, however, the plaintiffs disagree,
and claiming that GameStop never disclosed an additional purchase
would be required.
GEORGIA POWER: Faces Multiple Suits Over Executive Jet Crash
------------------------------------------------------------
Greg Land, writing for Daily Report, reports that the families of
four of the five passengers killed when an executive jet crashed
while trying to land at Thomson-McDuffie County Airport in
February have sued multiple defendants in Fulton County Superior
Court, including the airport authority, its municipal owners and
the Georgia Power Co., which owned a power pole and lines the
plane hit.
One pilot walked away and the other suffered serious injuries
after the Beechcraft Premier 1 crashed at about 8 p.m. on Feb. 20.
According to the complaints and contemporaneous news accounts, the
plane was arriving from Nashville's John C. Tune Airport and
preparing to touch down when the pilots aborted the landing to
circle around for another attempt. Then it struck a tree and an
unlighted 60-foot concrete utility pole about a quarter-mile from
the end of the runway, shearing off a wing and catching fire
before it crashed into the ground, where most of the wreckage
burned.
Killed were Dr. Steven Roth, a vascular surgeon, nurse anesthetist
Lisa Volpitto, ultrasound technicians Heidi McCorkle and Tiffany
Porter, and Kim Davidson, a secretary. All worked for The Vein
Guys, a vascular practice with offices in Atlanta, Augusta and
Nashville.
Rescuers found the pilot, Jeremy Hayden, walking near the wreckage
of the plane. The co-pilot, Richard Trammell, was still strapped
into his cockpit seat and was hospitalized with critical injuries.
On Sept. 9, the survivors of Ms. Volpitto, Ms. McCorkle,
Ms. Porter and Ms. Davidson filed suit, naming as defendants
Georgia Power and its parent, Southern Co.; the city of Thomson
and McDuffie County, joint owners of the airport and the airport
authority; Milliken & Co., the chemical and textile company whose
Kingsley Plant at the end of the runway provided the easement for
the utility pole; Spirit Aviation, the airport's operator; and The
Sky's the Limit d/b/a Executive Shuttle, a company owned by
Trammell that employed both pilots.
Three of the suits also name Pavilion Group, the company that
owned the aircraft, and the estate of victim Dr. Roth, who owned
Pavilion; his widow and executrix, Mary Anne Roth, is also named.
The fourth was filed on behalf of Ms. Volpitto's daughter and
husband, Augusta anesthesiologist G. David Volpitto, who --
according to a story in The Augusta Chronicle -- also worked with
The Vein Guys.
All four suits, filed simultaneously, accuse all the defendants of
negligence leading to the accident. Moraitakis & Kushel partner
Nicholas Moraitakis, representing the McCorkle and Porter
survivors, said that there had been "some cooperation and
coordination" among the plaintiffs.
"The only thing I can say is that it's very early in the process,
and I'm not in any position to offer any other comment," said
Mr. Moraitakis.
The attorneys for Ms. Davidson and Ms. Volpitto, John Clark of
Macon's Clark & Smith and Turner Padget Graham & Laney partner
Wayne Byrd of Myrtle Beach, S.C., respectively, did not respond to
requests from comment.
According to a public probate notice, Dr. Roth's estate is
represented by William Fletcher of Augusta's Fletcher, Harley &
Fletcher. He could not be reached.
A spokesman for Georgia Power said he could not comment on the
litigation.
The cases are Davidson v. Georgia Power Co., No. 2013CV236154;
McCorkle v. Georgia Power Co., No. 2013CV236158; Porter v. Georgia
Power Co., No. 2013CV236151; and Volpitto v. Georgia Power Co.,
No. 2013236150
GORT'S GOUDA: Recalls Certain Raw Milk Cheeses
----------------------------------------------
Starting date: September 17, 2013
Type of communication: Recall
Alert sub-type: Health Hazard Alert
Subcategory: Microbiological - E. coli O157:H7
Hazard classification: Class 1
Source of recall: Canadian Food Inspection Agency
Recalling firm: Gort's Gouda Cheese Farm
(EST 4478)
Distribution: Alberta, British Columbia
Extent of the product
distribution: Retail
The Canadian Food Inspection Agency (CFIA) and Gort's Gouda Cheese
Farm (EST 4478) are warning the public not to consume cheese
products described below because they may be contaminated with E.
coli O157:H7.
Affected products:
-- Quaso de Prato;
-- Aged Quaso de Prato;
-- X Aged Quaso de Prato;
-- Cumin Quaso de Prato;
-- Greek Blend: Onion, Paprika, Parsley, Pepper, Thyme, Oregano
Quaso de Prato;
-- Gouda Cheese with Jalapeno Peppers Quaso de Prato;
-- Smoked Gouda Cheese Quaso de Prato;
-- Gouda Cheese with Red Peppers, Ginger Onions & Garlic Quaso
de Prato;
-- Peppercorn, Ginger, Paprika, Onion & Garlic Quaso de Prato
Parsley, Celery, Onion, Garlic, Dill & Chives Quaso de Prato
-- Maasdammer;
-- Beaufort;
-- Parmesan; and
-- Mazouda
The recall is the result of an ongoing food safety investigation
initiated as a result of a recent outbreak investigation. There
may be recalls of additional products as the investigation at this
facility continues.
All sizes of the raw milk cheeses listed below are affected by
this recall.
These affected products were sold at the manufacturer's outlet, at
retail stores in Alberta and British Columbia, and through
internet sale from May 27 to September 14, 2013, inclusive.
Lot codes 122 to 138 are affected by this recall.
Some product packages may not bear a lot code or indicate that the
cheese was made with raw milk. These products were also sold
clerk-served from deli counters with or without a label or coding.
Consumers who are unsure if they have purchased the affected
product are advised to contact their retailer.
There have been reported illnesses associated with the consumption
of these products.
The manufacturer, Gort's Gouda Cheese Farm, Salmon Arm, BC is
voluntarily recalling the affected products from the marketplace.
The CFIA is monitoring the effectiveness of the recall.
HEWLETT-PACKARD: Faces Overtime Class Action in California
----------------------------------------------------------
Kat Greene, writing for Law360, reports that a putative class of
Hewlett-Packard Co. employees suing the computer giant for
skimping on overtime pay slapped the company and the Sidley Austin
LLP attorneys representing it with a motion for sanctions on
Sept. 9, claiming they had made false statements about the named
plaintiff.
Lieff Cabraser Heimann & Bernstein LLP attorneys representing
former HP employee Eric Benedict in his wage-and-hour class action
claim HP and its attorneys intentionally made false statements
about Benedict in a counterclaim. The worker's attorneys say the
counterclaim was intended to punish him for stepping forward.
The Lieff Cabraser attorneys filed the motion against Sidley
Austin's Wendy Lazerson, Caryn Horner and Max Fischer on Sept. 9
in California federal court, alleging the trio and their client
had violated Rule 11 of the Federal Rules of Civil Procedure by
knowingly making false statements in the counterclaim.
"HP's insistence on asserting ill-founded counterclaims against
Mr. Benedict, despite already being given fair warning about the
problems associated with filing first and investigating later,
serves only to highlight HP's ongoing effort to harass a former
employee," the Lieff attorneys wrote in the motion. "Sanctions
against HP and its counsel are warranted."
Mr. Benedict filed suit against HP in January, claiming he and
other employees were not properly compensated for overtime hours
worked.
During the trial process, HP discovered Benedict had made a copy
of the hard drive of the laptop issued to him by the company while
he still worked there, according to the Sept. 9 motion. The
computer giant contacted Benedict's attorneys demanding the copy
be handed over immediately, the motion said.
But the copy had some of Benedict's private documents on it, the
motion said. Mr. Benedict's attorneys offered to hand over all
copies of HP's material, but not Benedict's private information,
according to the motion.
In a May deposition, Benedict said the only other people who'd
seen what was on the hard drive copy were his attorneys. In light
of that, his attorneys argued, HP had no immediate need for the
hard drive to be returned.
But HP insisted the attorneys immediately hand over the full copy,
including Benedict's private documents, according to the motion.
Benedict's attorneys asked HP for legal reasoning to support its
demand, but HP simply told them to "figure it out," the motion
said.
Despite Mr. Benedict's repeated on-record admissions that only his
attorneys had seen what was on the hard drive and that he had
repeatedly attempted to return HP's materials to the company, HP
in May filed a temporary restraining order and in June a
counterclaim against Mr. Benedict, alleging he was keeping the
hard drive copy illegally, according to the motion.
Representatives for the parties did not immediately respond to
requests for comment on Sept. 11.
Mr. Benedict is represented by Kelly M. Dermody --
kdermody@lchb.com -- Jahan C. Sagafi -- jsagafi@lchb.com -- and
Marc A. Pilotin -- mpilotin@lchb.com -- of Lieff Cabraser Heimann
& Bernstein LLP, and Adam T. Klein, Juno Turner and Jennifer L.
Liu of Outten & Golden LLP.
HP is represented by Wendy M. Lazerson -- wlazerson@sidley.com --
Caryn F. Horner -- chorner@sidley.com -- and Max Fischer --
mfischer@sidley.com -- of Sidley Austin LLP.
The case is Eric Benedict v. Hewlett-Packard Co., case number
5:13-cv-00119, in the U.S. District Court for the Northern
District of California.
HIAR HOLDING: Insurer Must Honor Indemnity Obligation
-----------------------------------------------------
Chief Justice Mary R. Russell of the Supreme Court of Missouri
affirmed judgments entered in favor of the class in COLUMBIA
CASUALTY COMPANY v. HIAR HOLDING, L.L.C.
In this complaint, an insurer that refused to defend its insured
challenged its liability for damages that were agreed to in a
settlement between the insured and a class of plaintiffs that
brought suit alleging that the insured violated the Telephone
Consumer Protection Act. After the class and the insured reached
a settlement, the class filed a garnishment action against the
insurer. The insurer sought a declaratory judgment that its
policy with the insured did not provide coverage, and its
arguments included that there was no coverage for damages awarded
related to the TCPA. The trial court ultimately entered judgments
in favor of the class, holding that the insurer wrongly had
refused to defend the insured and was liable to indemnify the
insured by paying the settlement amount plus interest. The insurer
appealed.
The case is COLUMBIA CASUALTY COMPANY, Appellant, v. HIAR HOLDING,
L.L.C., and HMA RIVERPORT, L.L.C., and KAREN S. LITTLE, L.L.C.,
Individually and on Behalf of the Other Members of the Certified
Class, as Assignees, Respondents, NO. SC93026.
A copy of the Supreme Court's August 13, 2013 Opinion is available
at http://is.gd/QSxvMkfrom Leagle.com.
HUDSON'S BAY: Judge Refuses to Appoint Lead Class Counsel
---------------------------------------------------------
Eric Hornbeck, writing for Law360, reports that the "unseemly"
bickering among plaintiffs firms to lead class action litigation
over Hudson's Bay Co.'s planned $2.9 billion takeover of Saks Inc.
"resembles young ruffians contesting control of their school
yard," a New York state judge said on Sept. 12, refusing to
appoint lead counsel.
Judge Charles E. Ramos chastised the law firms, including Faruqi &
Faruqi LLP, Wolf Haldenstein Adler Freeman & Herz LLP, Morgan &
Morgan PC, Robbins Arroyo LLP and others, for squabbling to lead
the case.
INVENTURE FOODS: Defends Two Suits Over "All Natural" Claims
------------------------------------------------------------
Inventure Foods, Inc., is defending two class action lawsuits in
connection with "all natural" claims, according to the Company's
August 6, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended June 29, 2013.
In March 2012, the Company learned that the Jamba Juice Company
was named as a defendant in a putative class action filed in the
Federal Court for the North District of California and captioned
Kevin Anderson v. Jamba Juice Company which claims that the use of
the words "all natural" to describe the Smoothie Kits is
misleading and deceptive to consumers and violates various
California consumer protection statutes and unfair competition
statutes. The lawsuit is one of several "all natural" lawsuits
recently brought against various food manufacturers and
distributors in California. In an amended complaint the plaintiff
also alleged violations of the federal Magnuson-Moss Warranty Act,
but the court dismissed those claims in a ruling issued in August
2012. In a second amended complaint filed in September 2012, the
Company were added as a defendant. Under the Company's license
agreement with the Jamba Juice Company, the Company is obligated
and has agreed to indemnify and defend Jamba Juice in the lawsuit,
and Jamba has tendered defense of the claim to the Company. While
the Company currently believes the "all natural" claims on the
Smoothie Kits are not misleading and in full compliance with FDA
guidelines, the Company is investigating the claims asserted in
the action, and intend to vigorously defend against them.
The plaintiff filed a motion on July 15, 2013, seeking to certify
a class of all persons in California who bought certain of the
Jamba Juice Smoothie Kits. The Company's opposition to the motion
is due on September 30, 2013, and the court has scheduled a
hearing on the motion on December 5, 2013.
On June 28, 2013, two new plaintiffs filed a separate class action
complaint against Jamba Juice Company and Inventure Foods
captioned Lily v. Jamba Juice Company in the same court, using the
same plaintiff's counsel and making nearly identical allegations
as in the prior Anderson case. On July 15, 2013, the plaintiff in
Anderson filed a motion to consolidate the Lily case with
Anderson. The Company's response to the motion to consolidate was
due on July 29, 2013, and its response to the Lilly complaint is
due September 16, 2013.
Inventure Foods, Inc. -- http://www.inventurefoods.com/-- a
Delaware corporation is a marketer and manufacturer of
healthy/natural and indulgent specialty snack food brands. The
Company is headquartered in Phoenix, Arizona, with plants in
Arizona, Indiana and Washington.
JOHNSON & JOHNSON: New Recalls Raise Concern About Quality
----------------------------------------------------------
Katie Thomas, writing for The New York Times, reports that after
years of struggling to improve its image after major quality
lapses, the consumer giant Johnson & Johnson announced two recalls
of well-known products in the space of a week, raising questions
about the extent to which it has moved on from its past problems.
The company's pharmaceutical unit, Janssen, informed doctors and
patients on Sept. 11 that it was recalling one lot of Risperdal
Consta, an injectable antipsychotic treatment, after routine
testing turned up evidence of mold.
Johnson & Johnson also recalled 200,000 bottles of liquid Motrin
for infants because they may contain tiny particles of plastic.
In both cases, the recalls involved products or ingredients that
were made by outside companies.
Risperdal Consta, a long-acting version of the pill form of
Risperdal that is typically administered in a doctor's office or
clinic, is made by the company Alkermes, based in Ireland. It
referred all questions to Johnson & Johnson.
McNeil Consumer Healthcare, the over-the-counter division at
Johnson & Johnson, said the plastic particles in Motrin -- which
were about the size of a poppy seed -- originated at a third-party
manufacturer of Motrin's active ingredient, ibuprofen. The company
did not name the manufacturer.
The company said in both cases that the risk to patients was low
and it had received no reports of serious harm.
Still, some experts said the two recalls, announced over such a
short span, raised questions about how well the company has
improved its oversight after a string of manufacturing problems
threatened its image as one of the world's most trusted brands.
The company has recalled everything from Tylenol to contact lenses
and artificial hips in recent years, and is operating under a
consent decree with the Food and Drug Administration in which it
has promised to overhaul production at three manufacturing plants.
One plant, in Fort Washington, Pa., has been closed since 2010.
"Even the most careful company is occasionally going to have a
recall," said Erik Gordon, who teaches business at the University
of Michigan and follows the pharmaceutical industry. But given
Johnson & Johnson's history, he said, the recalls indicate
"they're not there yet. They have not repaired the damage that
was done to Johnson and Johnson's quality control infrastructure."
Ernie Knewitz, a spokesman for Johnson & Johnson, said the company
had been working to improve quality by creating a single,
streamlined supply chain and shifting focus to the early detection
of potential problems. This heightened attention, he said, has
led to several product recalls. He added, "Our goal is to
minimize recalls, and yet when we recall a product, we are acting
in the best interest of the consumers of our products."
Johnson & Johnson has worked hard to repair its image and returned
some of its best-known over-the-counter brands to the market. It
named a new chief executive, Alex Gorsky, to replace William C.
Weldon, who had been criticized for focusing too much attention on
cost-cutting and too little on quality. Mr. Gorsky, a longtime
company executive, has said he would place fixing the quality
problems among his highest priorities.
Johnson & Johnson officials said over the summer that they plan to
return three-quarters of the company's over-the-counter brands to
pharmacy shelves by the end of the year, and that they are meeting
the F.D.A.'s requirements under the consent decree.
But even as it has sought to move past its difficulties, the
company has continued to encounter problems. In May, the company
recalled Children's Tylenol in South Korea after discovering that
levels of the pain reliever's active ingredient, acetaminophen,
were too high. Then, a month later, it recalled millions of packs
of birth-control pills in Latin America, Europe and Asia after
finding that one of the hormones in the pills was not releasing
properly into the body. Other company recalls this year include
blood glucose meters and some versions of the personal lubricant
K-Y Jelly.
Some manufacturing experts said that the recent recalls may
indicate that Johnson & Johnson is being extra cautious. The
company estimates that only about 5,000 units of Risperdal Consta
out of the original 70,000 in the lot remain unused, and said the
risk to patients from the mold, which is commonly found in the
environment, was low. In the case of Motrin for infants, the
plastic particles were detected in another lot of the same product
-- one-half fluid ounce bottles of Concentrated Motrin Infant
Drops, in "Original Berry Flavor" -- which was not distributed.
The company said it was recalling the three lots that were
distributed out of "an abundance of caution."
"Maybe a company under less scrutiny would choose to wait these
out as opposed to issuing a voluntary recall," said John Gray, an
associate professor at the Fisher College of Business at Ohio
State University. Mr. Gray formerly worked in operations
management at the consumer-products company Procter & Gamble, and
focuses his research on pharmaceutical manufacturing quality.
"Given everything that's happened, I would expect that Johnson &
Johnson has a pretty heavy focus on quality right now."
KNIGHT TRANSPORTATION: Continues to Defend Wage & Hour Litigation
-----------------------------------------------------------------
Knight Transportation, Inc. is involved in certain class action
litigation in which the plaintiffs allege claims for failure to
provide meal and rest breaks, unpaid wages, unauthorized
deductions, and other items. Based on its knowledge of the facts
and advice of outside counsel, management does not believe the
outcome of this litigation is likely to have a materially adverse
effect on the Company. However, the final disposition of these
matters and the impact of such final dispositions cannot be
determined at this time.
No further updates were reported in the Company's August 6, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended June 30, 2013.
Phoenix, Arizona-based Knight Transportation, Inc. --
http://www.knighttrans.com/-- is a provider of multiple truckload
transportation services, which generally involve the movement of
full trailer or container loads of freight from origin to
destination for a single customer.
LEUCADIA NATIONAL: To Seek Stay of "Sykes" Suit Pending Appeal
--------------------------------------------------------------
Leucadia National Corporation disclosed in its August 6, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended June 30, 2013, that it will seek a stay of
proceedings in the "Sykes action" pending its appeal.
The Company and certain of its subsidiaries and officers are named
as defendants in a consumer class action captioned Sykes v. Mel
Harris & Associates, LLC, et al., 09 Civ. 8486 (DC), in the United
States District Court for the Southern District of New York (the
"Sykes action"). The named defendants include the Mel Harris law
firm, certain individuals and members associated with the law
firm, and a process server, Samserv, Inc. and certain of its
employees. The action arises out of the law firm's obtaining
default judgments against approximately 124,000 individuals in New
York City Civil Court with respect to consumer debt purchased by
subsidiaries of the Company. The Company asserts that it was an
investor with respect to the subject purchased consumer debt and
was regularly informed of the amounts received from debt
collections, but otherwise had no involvement in any alleged
illegal debt collection activities.
The complaint alleges that the defendants fraudulently obtained
the default judgments in violation of the Fair Debt Collection
Practices Act, the Racketeer Influenced and Corrupt Organizations
Act, the New York General Business Law and the New York Judiciary
Law (alleged only as to the law firm) and seeks injunctive relief,
declaratory relief and damages on behalf of the named plaintiffs
and others similarly situated. The Defendants' motions to dismiss
were denied in part (including as to the claims made against the
Company and its subsidiaries) and granted in part (including as to
certain of the claims made against the Company's officers) (the
"Dismissal Decision"). In September 2012, the Court granted
plaintiffs' motion to certify the following classes: (i) a class
under Federal Rule of Civil Procedure 23(b)(2) with respect to
injunctive and declaratory relief comprised of all persons who
have been or will be sued by the Mel Harris law firm in actions
commenced in New York Civil Court where a default judgment has
been or will be sought in connection with this debt collection
activity and (ii) a class under Federal Rule of Civil Procedure
23(b)(3) with respect to liability comprised of all persons
against whom a default judgment has been entered in New York Civil
Court in connection with this debt collection activity (the
"Certification Decision"). Neither the Dismissal Decision nor the
Certification Decision addresses the ultimate merits of the case.
At a November 2012 status conference, the parties advised the
Court of their intention to attempt to resolve the dispute through
mediation. Those efforts have not been successful to date and the
parties have so advised the Court. The Company intends to seek an
appeal of the Certification Decision to the United States Court of
Appeals for the Second Circuit. Because an appeal of the
Certification Decision at this time (short of a full judgment on
the merits) is discretionary, there can be no assurance that the
Second Circuit will agree to hear this appeal. If the Second
Circuit rejects this appeal, the Company will continue to defend
the case vigorously on the merits.
The Company recorded a litigation reserve of $20,000,000 related
to its being named as defendants in the Sykes action, which arises
out of another party's obtaining default judgments against
approximately 124,000 individuals in New York City Civil Court
with respect to consumer debt purchased by the Company's
subsidiaries. On July 19, 2013, the United States Court of
Appeals for the Second Circuit granted the Company's leave to
appeal the District Court's September 2012 certification decision.
No date has been set for the appeal to be heard in the Second
Circuit. In connection with the appeal, the Company will seek a
stay of proceedings in the District Court, although there can be
no assurance such a stay will be granted.
New York-based Leucadia National Corporation --
http://www.leucadia.com/-- is a diversified holding company
engaged through its consolidated subsidiaries in a variety of
businesses, including beef processing, manufacturing, gaming
entertainment, real estate activities, medical product development
and winery operations. The Company also owns approximately 28% of
the outstanding common stock of Jefferies Group, Inc., a full-
service investment bank.
LEUCADIA NATIONAL: Trial in Del. Merger Suit Set for June 2014
--------------------------------------------------------------
Trial in the consolidated merger-related lawsuit in Delaware is
currently scheduled for June 9, 2014, according to Leucadia
National Corporation's August 6, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
June 30, 2013.
Seven putative class action lawsuits have been filed in New York
and Delaware concerning the merger transactions whereby Jefferies
Group LLC became a wholly owned subsidiary of Leucadia. The class
actions, filed on behalf of Jefferies shareholders prior to the
merger transactions, name as defendants Jefferies, the members of
the board of directors of Jefferies, Leucadia and, in certain of
the actions, certain merger-related subsidiaries. The New York
actions were consolidated and have been stayed through pretrial
discovery in deference to the Delaware actions, which also have
been consolidated. The consolidated Delaware action alleges that
the Jefferies directors breached their fiduciary duties in
connection with the merger transactions by engaging in a flawed
process and agreeing to sell Jefferies for inadequate
consideration pursuant to an agreement that contains improper deal
protection terms. The action also alleges breaches of fiduciary
duty against Messrs. Handler and Friedman in their capacities as
officers of Jefferies, and against Leucadia and Messrs. Handler,
Friedman, Cumming and Steinberg, collectively, as purported
controlling shareholders of Jefferies. On July 23, 2013, the
defendants filed motions to dismiss the Delaware complaint in its
entirety. Trial in the Delaware action is currently scheduled for
June 9, 2014. The Company says it is unable to predict the
outcome of this litigation or to estimate the amount of or range
of any reasonably possible loss.
New York-based Leucadia National Corporation --
http://www.leucadia.com/-- is a diversified holding company
engaged through its consolidated subsidiaries in a variety of
businesses, including beef processing, manufacturing, gaming
entertainment, real estate activities, medical product development
and winery operations. The Company also owns approximately 28% of
the outstanding common stock of Jefferies Group, Inc., a full-
service investment bank.
LIBERTY SILVER: Federman & Sherwood Files Securities Class Action
-----------------------------------------------------------------
Federman & Sherwood on Sept. 11 filed the first securities class
action lawsuit against Liberty Silver Corp., Robert Donald Bruce
Genovese, Tiffeni Aliece Graves, Marnie Markin, Geoffrey Browne,
BG Capital Group Ltd and Look Back Investments, Inc. in the United
States District Court for the Southern District of Florida. The
complaint alleges violations of federal securities laws, Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5, including allegations of issuing a series of false or
material misrepresentations to the market, as well as effectuating
a "pump and dump" scheme, all of which had the effect of
artificially inflating the market price of Liberty Silver Corp.'s
common stock during the Class Period of April 1, 2008 through
October 5, 2012.
Plaintiff seeks to recover damages on behalf of all Liberty Silver
shareholders who purchased common stock during the Class Period
and are therefore a member of the Class as described above. You
may move the Court no later than Tuesday, November 12, 2013 to
serve as a lead plaintiff for the entire Class. However, in order
to do so, you must meet certain legal requirements pursuant to the
Private Securities Litigation Reform Act of 1995.
If you wish to discuss this action, obtain further information or
participate in this litigation, or should you have any questions
or concerns regarding this notice or preservation of your rights,
please contact:
K. Lynn Nunn, Esq.
FEDERMAN & SHERWOOD
10205 North Pennsylvania Avenue
Oklahoma City, OK 73120
E-mail to: kln@federmanlaw.com Or, visit the firm's website at
http://www.federmanlaw.com
MERCK & CO: N.J. Court Certifies Vioxx Securities Class Action
--------------------------------------------------------------
The following statement is being issued by Bernstein Litowitz
Berger & Grossmann LLP; Milberg LLP; Brower Piven, A Professional
Corporation; and Stull, Stull & Brody.
United States District Court
District Of New Jersey
IN RE MERCK & CO., INC. SECURITIES, DERIVATIVE & "ERISA"
LITIGATION
MDL No. 1658 (SRC)
Case No. 2:05-CV-01151 (SRC) (CLW)
THIS DOCUMENT RELATES TO: THE CONSOLIDATED SECURITIES ACTION
Case No. 2:05-CV-02367 (SRC) (CLW)
SUMMARY NOTICE OF PENDENCY OF CLASS ACTION
To: All persons and entities who, from May 21, 1999 to September
29, 2004, inclusive, purchased or otherwise acquired Merck & Co.,
Inc. common stock or call options, or sold Merck put options.
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules
of Civil Procedure and an Order of the United States District
Court for the District of New Jersey, that the above-captioned
action has been certified as a class action.
IF YOU ARE A MEMBER OF THE CLASS, YOUR RIGHTS WILL BE AFFECTED BY
THIS ACTION. A full printed Notice of Pendency of Class Action is
currently being mailed to known potential Class members. If you
have not yet received the full printed Notice, you may obtain
copies of this document by downloading it from
http://www.MerckVioxxSecuritiesLitigation.comor by contacting the
Notice Administrator:
In re Merck & Co., Inc. Securities, Derivative & "ERISA"
Litigation
c/o The Garden City Group, Inc.
P.O. Box 10014
Dublin, OH 43017-6614
If you did not receive the Notice by mail, and you are and decide
to remain a member of the Class, please send your name and address
to the Notice Administrator so that if any further notices are
disseminated in connection with the Action, you will receive them.
Inquiries other than requests for the Notice, may be made to
Plaintiffs' Class Counsel:
Salvatore J. Graziano, Esq.
David Wales, Esq.
BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (800) 380-8496
Jules Brody, Esq.
Mark Levine, Esq.
STULL, STULL & BRODY
6 East 45th Street, 5th Floor
New York, NY 10017
Telephone: (800) 337-4983
David A.P. Brower, Esq.
BROWER PIVEN
A Professional Corporation
475 Park Avenue South, 33rd Floor
New York, NY 10016
Telephone: (212) 501-9000
Matthew A. Kupillas, Esq.
MILBERG LLP
One Penn Plaza
New York, NY 10119-0165
Telephone: (877) 692-1965
If you are a Class member, you have the right to decide whether to
remain a member of the Class. If you choose to remain a member of
the Class, you do not need to do anything at this time other than
to retain your documentation reflecting your transactions and
holdings in Merck common stock and options during the period from
May 21, 1999 through and including September 29, 2004. You will
automatically be included in the Class. If you are a Class member
and do not exclude yourself from the Class, you will be bound by
the proceedings in this Action, including all past, present and
future orders and judgments of the Court, whether favorable or
unfavorable.
If you ask to be excluded from the Class, you will not be bound by
any order or judgment in this Action, and you will not be eligible
to receive a share of any money which might be recovered for the
benefit of the Class. To exclude yourself from the Class, you
must submit a written request for exclusion postmarked no later
than November 3, 2013 in accordance with the instructions set
forth in the full printed Notice. Please note if you decide to
exclude yourself from the Class, you may be time-barred from
asserting the claims covered in the Action by a statute of repose.
Pursuant to Rule 23(e)(4) of the Federal Rules of Civil Procedure,
it is within the Court's discretion as to whether a second
opportunity to request exclusion from the Class will be allowed if
there is a settlement or judgment in the Action. This Action has
not yet been scheduled for trial, and there is no judgment,
settlement or monetary recovery at this time.
Further information may be obtained by directing your inquiry in
writing to the Notice Administrator.
PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE.
BY ORDER OF THE COURT
United States District Court for the District of New Jersey
MERRILL LYNCH: Loses Arbitration Bid in Wage Class Action
---------------------------------------------------------
Dan Prochilo, writing for Law360, reports that Merrill Lynch & Co.
Inc. failed to convince a New York federal judge to force
financial advisers who filed a proposed wage-and-hour class action
against the company to arbitrate their dispute, after the judge
found the Financial Industry Regulatory Authority rules that
governed the agreement between the parties forbade arbitration.
U.S. District Judge Harold Baer Jr. rejected the financial
services company's argument that the employees agreed to
individually arbitrate their claims upon registering with FINRA,
and that they were therefore obligated to enter into arbitration
in lieu of going to court under the Federal Arbitration Act, which
Merrill Lynch said preempted any FINRA arbitration provisions.
"Neither the Supreme Court nor the Second Circuit has held that
FINRA is preempted by the FAA in a fact pattern such as the one
before me here," Judge Baer said. "Without precedent to the
contrary, this court will follow the language of the [FINRA]
statute, buttressed by its legislative history, notice provisions
and agency interpretation, all of which support plaintiffs' view
that arbitration should not be compelled."
Ex-Merrill Lynch advisers Roman Zeltser and Anna Tyutyunik filed
suit against the company and its parent Bank of America Corp. in
March, alleging they violated the Fair Labor Standards Act and New
York Labor Law by refusing to pay financial advisers for overtime
work.
Mr. Zeltser and Ms. Tyutyunik alleged Merrill Lynch misclassified
its financial advisers as overtime-exempt even though their work
consisted of sales, customer service, meeting attendance and
clerical work, and it involved "little or no independent
discretion and judgment."
The advisers frequently had to work several hours beyond their
scheduled shifts in order to participate in meetings with bank
staff, had to work through their unpaid lunch breaks and were also
regularly required to work on Saturdays without being compensated,
the suit said.
In April, Merrill Lynch filed a motion to compel arbitration,
saying that when the advisers registered with FINRA, they signed a
document pledging to arbitrate "any dispute, claim or controversy
that may arise" between them and the company that FINRA rules and
bylaws deem arbitrable.
But Judge Baer said one of those rules prohibited the enforcement
of an arbitration agreement against any member of a class or
collective action, until a court denied class certification,
decertified the class or, in the case of class actions, excluded
the aggrieved FINRA member from the class.
According to the judge's order, the U.S. Securities and Exchange
Commission says the rule is designed to provide plaintiffs "access
to the courts to resolve class actions efficiently." He also
cited a notice published by the SEC just before the rule in
question was amended -- broadening it to also apply to members of
FLSA collective actions -- saying that "FINRA believes collective
actions, like class actions, should be handled by the judiciary
system, which has extensive procedures to manage such claims."
The judge said FINRA's anti-arbitration rule and its legislative
history barred Merrill Lynch's motion to compel, and he disagreed
with the company that the FAA trumped the authority's rule.
While the Supreme Court and Second Circuit have handed down recent
opinions favoring arbitration of FLSA claims, "none of these
opinions touch on whether arbitration should be compelled for
class and collective actions where FINRA rules bind the parties,"
according to the judge's order.
Bill Halldin, a spokesman for Bank of America Merrill Lynch,
described the ruling as "a procedural decision" on the venue where
the case would be heard.
"The underlying fact remains that these employees are exempt" from
overtime, Mr. Halldin said.
The advisers are represented by Justin M. Swartz, Ossai Miazad and
Jennifer L. Liu of Outten & Golden LLP and by Gregg I. Shavitz and
Susan H. Stern of Shavitz Law Group PA.
Merrill Lynch is represented by Michael D. Mandel --
mmandel@mcguirewoods.com -- Bethany A. Pelliconi --
bpelliconi@mcguirewoods.com -- and Philip A. Goldstein --
pagoldstein@mcguirewoods.com -- of McGuireWoods LLP.
The case is Zeltser et al. v. Merrill Lynch & Co. Inc. et al.,
case number 1:13-cv-01531, in the U.S. District Court for the
Southern District of New York.
MICROSOFT CORP: Pomerantz Law Firm Files Securities Class Action
----------------------------------------------------------------
Pomerantz Grossman Hufford Dahlstrom & Gross LLP on Sept. 12
disclosed that it has filed a class action lawsuit against
Microsoft Corporation MSFT and certain of its officers. The class
action, filed in United States District Court, District of
Massachusetts, and docketed under 13-cv-12266, is on behalf of a
class consisting of all persons or entities who purchased or
otherwise acquired securities of Microsoft between April 18, 2013
and July 18, 2013 both dates inclusive. This class action seeks
to recover damages against the Company and certain of its officers
and directors as a result of alleged violations of the federal
securities laws pursuant to Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
If you are a shareholder who purchased Microsoft securities during
the Class Period, you have until October 11, 2013 to ask the Court
to appoint you as Lead Plaintiff for the class. A copy of the
Complaint can be obtained at http://www.pomerantzlaw.com
To discuss this action, contact Robert S. Willoughby at
rswilloughby@pomlaw.com or 888-476-6529 (or 888-4-POMLAW), toll
free, x237. Those who inquire by e-mail are encouraged to include
their mailing address, telephone number, and number of shares
purchased.
Microsoft is the world's largest software company, primarily as a
result of its near-monopoly Windows personal computer operating
system software and its Microsoft Office collection of
productivity programs. In addition, the Company produces a wide
range of software for desktop computers and servers and is active
in Internet search with its Bing search engine; the video game
market with its Xbox and Xbox 360 products; the digital services
market with its Microsoft Network, or MSN; and in mobile phones
via its Windows Phone operating system.
The Complaint alleges that throughout the Class Period, Defendants
made materially false and misleading statements regarding the
Company's business and operations. Specifically, Defendants: (a)
employed devices, schemes, and artifices to defraud; (b) made
untrue statements of material fact and/or omitted to state
material facts necessary to make the statements made not
misleading; and (c) engaged in acts, practices, and a course of
business which operated as a fraud and deceit upon the purchasers
of the Company's common stock during the Class Period.
On July 18, 2013, Microsoft issued a press release announcing that
its financial results for the quarter ended June 30, 2013 had been
adversely impacted by a 900 million charge related to a write-down
in the value of its Surface RT inventory. In truth, however, the
value of such inventory was materially impaired by March 31, 2013.
On this news, Microsoft shares fell 4.04 approximately 11.4% to
close at 31.40 per share on July 18, 2013.
With offices in New York, Chicago, Florida, and San Diego, The
Pomerantz Firm -- http://www.pomerantzlaw.com-- concentrates its
practice in the areas of corporate, securities, and antitrust
class litigation.
MIMEDX GROUP: Robbins Geller Files Securities Class Action
----------------------------------------------------------
Robbins Geller Rudman & Dowd LLP on Sept. 13 disclosed that a
class action has been commenced in the United States District
Court for the Northern District of Georgia on behalf of purchasers
of MiMedx Group, Inc. stock during the period between March 7,
2013 and September 4, 2013.
If you wish to serve as lead plaintiff, you must move the Court no
later than 60 days from September 9, 2013. If you wish to discuss
this action or have any questions concerning this notice or your
rights or interests, please contact plaintiff's counsel,
Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058,
or via e-mail at djr@rgrdlaw.com
If you are a member of this class, you can view a copy of the
complaint as filed or join this class action online at
http://www.rgrdlaw.com/cases/mimedx/
Any member of the putative class may move the Court to serve as
lead plaintiff through counsel of their choice, or may choose to
do nothing and remain an absent class member.
The complaint charges MiMedx and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
MiMedx is a manufacturer of patented regenerative biomaterial
products that are, in essence, designed to treat inflammation and
help wounds heal.
The complaint alleges that on September 4, 2013, the U.S. Food and
Drug Administration posted an "Untitled Letter," dated August 28,
2013, on its website describing regulatory violations committed by
the Company. The letter concerned MiMedx's amniotic/chorionic-
based products, including AmnioFix Injectable, AccelShield
Injectable, and EpiFix Injectable, all of which are intended for
use in reducing inflammation and scar tissue formation, as well as
for enhancing soft tissue wound healing.
Among other things, the Untitled Letter stated that because these
products were micronized -- and thus had the original relevant
characteristics of the structural tissue altered -- they were
drugs. Because MiMedx did not possess a valid biologics license,
the Untitled Letter concluded the Company was unable to lawfully
market these products. It stated that "[n]one of the
amniotic/chorionic-based products described in this letter are the
subject of an approved biologics license application . . . , nor
are there [investigational new drug applications] in effect for
any of these products. Based on this information, we have
determined that your actions have violated the [Federal Food,
Drug, and Cosmetic] Act and the [Public Health Service] Act."
The FDA's disclosure of the Untitled Letter -- which the Company
did not disclose during the period between August 28, 2013 and
September 4, 2013 -- caused a 36% drop in the price of MiMedx
common stock, which fell $2.21 per share to close at $3.85 per
share on September 4, 2013, a decline of 48% from the stock's
Class Period high.
According to the complaint, the true facts, which were known by
defendants but concealed from the investing public during the
Class Period, were are follows: (a) MiMedx did not possess the
necessary licensing to manufacture certain of its products; (b)
the Company was manufacturing certain of its products unlawfully
and in violation of FDA rules and regulations; (c) at all relevant
times, MiMedix's revenues from these products were substantially
and materially threatened due to the Company's lack of licensure;
(d) because a portion of its revenues were subject to termination,
MiMedx's revenue guidance issued during the Class Period lacked a
reasonable basis when made; and (e) as a result of the foregoing,
defendants' statements regarding the Company's financial
performance and expected earnings were false and misleading and
lacked a reasonable basis when made.
Plaintiff seeks to recover damages on behalf of all purchasers of
MiMedx stock during the Class Period. The plaintiff is
represented by Robbins Geller, which has extensive experience in
prosecuting investor class actions and actions involving financial
fraud.
MOTOROLA SOLUTIONS: 7th Cir. Affirms Ruling in "Silverman" Suit
---------------------------------------------------------------
The United States Court of Appeals for the Seventh Circuit issued
a ruling on appeals filed by Edward Falkner and Paul A. Liles to a
settlement in SILVERMAN v. MOTOROLA SOLUTIONS, INC.
In this complaint, a class of Motorola's investors contended that
during the second half of 2006, the firm made false statements to
disguise its inability to deliver a competitive mobile phone that
could employ 3G protocols. When the problem became public, the
price of Motorola's stock declined. After the suit had been
pending for four years, the district court denied Motorola's
motion for summary judgment. The parties then settled for $200
million. None of the class members contends that this is
inadequate -- but two argue that the judge abused her discretion
by approving counsel's proposal that they receive 27.5% of the
fund.
The Seventh Circuit dismissed Paul Liles' Appeal No. 12-2339 for
lack of a justiciable controversy, and affirmed the decision with
respect Edward Falkner's Appeal No. 12-2354.
The Seventh Circuit pointed out that Paul Liles protested almost a
month after the deadline. And although he filed a belated
objection to the award of legal fees, he did not file a claim to
his share of the recovery. He thus lacks any interest in the
amount of fees, since he would not receive a penny from the fund
even if counsel's take should be reduced to zero, says the Court.
The class representatives' appellate brief flags this problem but
Mr. Liles' reply brief ignores it, the Court added. Accordingly,
the Seventh Circuit dismissed Mr. Liles' appeal on the ground that
he lacks any interest in the outcome.
Meanwhile, Edward Falkner, the other objector, contended that the
award is improper because it was fixed at the end of the
litigation. He maintained that fee schedules should be set at the
outset, preferably by auction in which law firms competing to
represent the class tell the judge how much they will accept, and
the judge picks the low bidder.
The Seventh Circuit said it agrees with Mr. Falkner's premise that
attorneys' fees in class actions should approximate the market
rate that prevails between willing buyers and willing sellers of
legal services. However, none of the institutional investors has
protested -- either by filing a motion asking the judge to reduce
the fees or by supporting Mr. Falkner's position in the court.
"This award may be at the outer limit of reasonableness, but,
given the way the subject was litigated in the district court,
deferential appellate review means that the decision must stand,"
ruled the Seventh Circuit.
The case is ERIC SILVERMAN, et al., Plaintiffs-Appellees, v.
MOTOROLA SOLUTIONS, INC., et al., Defendants-Appellees, NOS.
12-2339 & 12-2354.
A copy of the Appeals Court's August 14, 2013 Decision is
available at http://is.gd/NgFZGqfrom Leagle.com.
NAT'L COLLEGIATE: Faces Concussion-Related Class Action
-------------------------------------------------------
Aaron Kase, writing for Lawyers.com, reports that a class action
federal lawsuit has been filed against the NCAA by former football
players alleging that the collegiate athletic organization did not
do enough to prevent, diagnose and treat brain injuries. The
class could cover every former college football player who didn't
go on to play professionally.
"Plaintiffs and the members of the Class have no adequate remedy
at law in that monetary damages alone cannot compensate them for
the increased risks of long-term physical and economic losses
associated with brain injury," the complaint says, requesting
money to set up medical monitoring for the players. "Such relief
should have been provided by the NCAA decades ago to its players
but even today it is sorely needed for former players."
"We will review and evaluate it," an NCAA spokesperson said in a
statement. "It appears that it has been filed by one of the same
law firms that appears in many other cases. It is not unusual to
see this action from plaintiff's attorneys trying to secure a lead
position in litigation of similar cases."
The filing came little more than a week after the National
Football League agreed to shell out $765 million to settle a
series of similar lawsuits filed by thousands of former players
alleging that the league covered up evidence about the dangers of
head injuries.
The NCAA is already facing a different concussion suit filed by
two football players, a hockey player and a soccer player.
Clear Duty of Care
The latest lawsuit alleges not just a lack of protection and
follow-up care for student athletes, but also that the NCAA fell
down on its duty to educate them about the potential consequences
of brain injuries.
"They didn't do enough to inform them, to monitor them or to make
medical resources available to them, especially as they get
older," says Richard S. Lewis -- rlewis@hausfeldllp.com -- an
attorney at Hausfeld LLP, one of nine law firms representing the
plaintiffs. "The problems are really surfacing as they get older.
The main form of relief sought in our complaint is to get medical
monitoring to accomplish early diagnosis if there is a problem, or
to get some peace of mind if there isn't."
Two big differences stand out in the NFL suit vs. the NCAA suit.
For one, most of the plaintiffs in the NFL class action were
covered under a collective bargaining agreement which the judge in
the case indicated gave the league a very strong defense.
Furthermore, professional players are very well compensated for
their services and arguably take on the concussion risks as a
hazard of the job. NCAA players are not paid; on the contrary
their schools can make big bucks promoting their likenesses and
selling tickets and TV packages while players that don't make the
pros walk away empty handed.
"These are amateur athletes who the NCAA and schools are taking
responsibility for their well being as it relates to athletics,"
says Mr. Lewis, "so there's a very clear duty of care."
"There are well known medical protocols that are available to help
athletes or people who are in this high-risk situation," the
attorney says. "There has been a lot of research over the past
20-30 years and we're really trying to make sure that these
players get the benefit of that medical knowledge to help them,
especially the ones that will be facing problems down the road."
NAT'L COLLEGIATE: Concussion Class Action Plaintiffs List May Grow
------------------------------------------------------------------
Jeremy Fowler, writing for CBSSports.com, reports that the class-
action lawsuit against the NCAA filed by three former players over
concussions could grow its plaintiff list exponentially based on
early research from one of the nine lawyers involved.
Michael Hausfield -- mhausfeld@hausfeldllp.com -- with Hausfield
LLP -- which also represents plaintiffs in the Ed O'Bannon case
over player likeness that could shake up the NCAA amateurism model
-- told CBSSports.com his firm is fielding calls from scores of
former players asking to evaluate their situations and possibly
join the case.
The suit alleges, in part, the NCAA failed to provide players with
proper protocols and long-term education over the effects of brain
trauma.
Former Tennessee players Chris Walker and Ben Martin and former
North Carolina State player Dan Ahern are part of the suit filed
in federal court in Chattanooga, Tenn., earlier this month The
plaintiffs seek an NCAA-funded medical monitoring program for
former football players.
Mr. Hausfield said the potential new plaintiffs have expressed
cases from "stingers to bell-ringers to where the athlete
collapsed on the field, immobile."
"These are athletes who played at their schools and went on to
distinguish themselves in other careers but have noticed they have
had defects consistent with what has been related to repeated head
trauma," Mr. Hausfield said.
NCAA concussion litigation hasn't reached the levels of the NFL,
which settled its case with the league's 4,500-plus plaintiffs for
$765 million.
The NCAA is considering a settlement with the plaintiffs in a
concussion suit filed in Illinois in 2011 brought by former
Eastern Illinois player Adrian Arrington. That case is currently
seeking class-action approval. The Tennessee case applies to 50
states and former players while the Arrington case covers 18
states, Mr. Hausfield said.
The scope of NCAA litigation potential over head trauma is broad
when considering the volume of players (rosters of 105 players on
126 FBS schools) and no federal labor exemptions for schools (NCAA
athletes aren't employees).
As the Birmingham New points out, lawyers heatedly jockey for NCAA
concussion litigation positioning nearly 100 years after Theodore
Roosevelt, the original NCAA point man, urged the game to become
safer.
"Given the number of schools and players involved, this directly
connects to high schools and pee wee leagues, and this becomes the
major national lynchpin to football in general," Mr. Hausfield
said.
Several athletic directors that spoke to CBSSports.com acknowledge
the awareness all schools must have over not just concussion
treatment and protocol -- but a trickle-down effect of litigation
that affects NCAA members.
The NCAA provides catastrophic insurance, which activates once an
athlete's injury-related expenses exceed $90,000.
No athletic directors interviewed said their schools have sought
concussion-specific insurance to protect from litigation if
lawsuits target individual schools, though some public schools are
part of in-state insurance programs.
"We're in a lot of conversations that could help put the
university in a good position relative to lawsuits, but that's not
the driving force for it," said Cal athletic director Sandy
Barbour, who is collaborating with Cal's dean of the graduate
school on in-depth concussion initiatives and research. "What are
we doing to help (players)? What are we doing to protect?"
Charlotte athletic director Judy Rose, whose 49ers debuted their
football program this year, says the school has stringent protocol
on players with concussion-like symptoms, including at least two
mandatory doctor visits and no practice until at least six days
from any incident, minor or severe. "We think we're giving it our
best shot," she said.
No doubt, the recent report from the Chronicle of Higher Education
uncovering the way coaches often overpower trainers on decisions
about concussed players returning to the field has garnered
attention in the athletic community.
C-USA commissioner Britton Banowsky said a systemic shift is
necessary to "empower our trainers."
Conferences should constantly push for effective concussion
treatment, Mr. Banowsky said.
"We talk a good game, but we're not really being highly
innovative," Mr. Banowsky said. "We're still doing things old
school. I think we have a higher responsibility to our student-
athletes."
NORDSTROM INC: Court Limits Class in "Balasanyan" Suit
------------------------------------------------------
In BALASANYAN v. NORDSTROM, INC., District Judge Jeffrey T. Miller
granted plaintiffs' motions for class certification of the
proposed California Classes, denied plaintiffs' motion for
certification of the nationwide class, and struck Boedeker's
report.
The Court held that the motions for certification are granted for
the proposed Maraventano and Balasanyan California Classes and
denied for Balasanyan's proposed California Subclass and
Nationwide Class. The court also strikes the Boedeker Declarations
from the record.
The case is GINA BALASANYAN; NUNE NALBANDIAN, on behalf of
themselves all others similarly situated, Plaintiffs,
v.
NORDSTROM, INC., a Washington corporation; and DOES 1-100,
inclusive, Defendants.
GINO MARAVENTANO; and NEESHA KURJI, Plaintiffs,
v.
NORDSTROM, INC., a Washington corporation; and DOES 1-100,
inclusive, Defendants, CASE NO. 3:11-CV-2609-JM (WMC), NO. 3:10-
CV-2671-JM (WMC), (S.D. Cal.)
A copy of the District Court's August 12, 2013 Order is available
at http://is.gd/JmUhAvfrom Leagle.com.
Gina Balasanyan, Plaintiff, represented by Kathryn Lee Boyd --
lboyd@srbr-law.com -- at Schwarcz Rimberg Boyd and Rader LLP,
Sherli Shamtoub -- sshamtoub@srbr-law.com -- at Schwarcz Rimberg
Boyd and Rader LLP, Darcy R Harris -- dharris@srbr-law.com -- at
Schwarz Rimberg Boyd & Rader LLP & Jeff D Neiderman --
neiderman@srbr-law.com -- at Schwarcz Rimberg Boyd & Rader LLP.
Nune Nalbandian, Plaintiff, represented by Kathryn Lee Boyd,
Schwarcz Rimberg Boyd and Rader LLP, Sherli Shamtoub, Schwarcz
Rimberg Boyd and Rader LLP, Darcy R Harris, Schwarz Rimberg Boyd &
Rader LLP & Jeff D Neiderman, Schwarcz Rimberg Boyd & Rader LLP.
Nordstrom Inc, Defendant, represented by Joshua D. Levine --
jdlevine@littler.com -- at Littler Mendelson, Julie A Dunne --
jdunne@littler.com -- at LITTLER MENDELSON & Lara K Strauss --
lstrauss@littler.com -- at Litter Mendelson.
NUVERRA ENVIRONMENTAL: Curtis V. Trink Law Firm Files Class Action
------------------------------------------------------------------
Law Offices of Curtis V. Trinko, LLP on Sept. 11 disclosed that it
has filed a securities fraud class action lawsuit in the United
States District Court for the District of Arizona against Nuverra
Environmental Solutions, Inc. on behalf of investors who purchased
or otherwise acquired the common stock of the Company during the
period from August 6, 2012 through August 23, 2013.
Nuverra purports to be an environmental solutions company that
provides services to customers in energy and industrial end-
markets. The Company states that its focus is on the delivery,
collection, treatment, recycling and disposal of restricted
solids, water, waste water, used motor oil, spent antifreeze,
waste fluids and hydrocarbons. Nuverra operates in approximately
70 locations across 26 states.
The complaint sets forth claims for violations of the Securities
Exchange Act of 1934. Specifically, throughout the Class Period,
Defendants made false and misleading statements and/or failed to
disclose: (a) that the Company was suffering from a severe
liquidity crisis; (b) that the Company was experiencing a
significant decline in its operational results, particularly in
the Eagle Ford Shale area; (c) that as a result of the Company's
poor financial performance, Nuverra's default risk materially
increased and the Company faces potential defaults on its
covenants; and (d) based upon the above, Defendants lacked a
reasonable basis for their positive statements about the Company
during the Class Period
If you purchased Nuverra common stock during the Class Period of
August 6, 2012 through August 23, 2013, and wish to apply to be
the lead plaintiff in this action, a motion on your behalf must be
filed with the Court no later than November 4, 2013. You may
contact the Trinko Firm to discuss your rights regarding the
appointment of lead plaintiff and your interest in the class
action. Please note that you may also retain counsel of your
choice and need not take any action at this time to be a class
member.
Contact: Law Offices of Curtis V. Trinko, LLP
Curtis V. Trinko, Esq.
Telephone: 212-490-9550
E-mail: ctrinko@trinko.com
PANTRY INC: Appeal in Suit Over Use of Card Info Remains Pending
----------------------------------------------------------------
An appeal in the class action lawsuit over the use of information
on debit and credit card receipts remains pending, according to
The Pantry, Inc.'s August 6, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended June 27,
2013.
On October 19, 2009, Patrick Amason, on behalf of himself and a
putative class of similarly situated individuals, filed a lawsuit
against The Pantry in the United States District Court for the
Northern District of Alabama, Western Division (Patrick Amason v.
Kangaroo Express and The Pantry, Inc. No. CV-9-P-2117-W). On
September 9, 2010, a first amended complaint was filed adding
Enger McConnell on behalf of herself and a putative class of
similarly situated individuals. The plaintiffs seek class action
status and allege that The Pantry included more information than
is permitted on electronically printed credit and debit card
receipts in willful violation of the Fair and Accurate Credit
Transactions Act, codified at 15 U.S.C. Section 1681c(g). The
amended complaint alleges that: (i) plaintiff Patrick Amason seeks
to represent a subclass of those class members as to whom the
Company printed receipts containing the first four and last four
digits of their credit and/or debit card numbers; and (ii)
plaintiff Enger McConnell seeks to represent a subclass of those
class members as to whom the Company printed receipts containing
all digits of their credit and/or debit card numbers. The
plaintiffs seek an award of statutory damages of $100 to $1,000
for each alleged willful violation of the statute, as well as
attorneys' fees, costs, punitive damages and a permanent
injunction against the alleged unlawful practice.
On July 25, 2011, the court denied the plaintiffs' initial motion
for class certification but granted the plaintiffs the right to
file an amended motion. On October 3, 2011, the Plaintiff filed
an amended motion for class certification seeking to certify two
classes. The first purported class, represented by Mr. Amason,
consists of (A) all natural persons whose credit and/or debit card
was used at an in-store point of sale owned or operated by the
Company from June 4, 2009, through the date of the final judgment
in the action; (B) where the transaction was in a Company store
located in the State of Alabama; and (C) in connection with the
transaction, a receipt was printed by Retalix software containing
the first four and last four digits of the credit/debit card
number on the receipt provided to the customer. The second
purported class, represented by Ms. McConnell, consists of (A) all
natural persons whose credit and/or debit card was used at an in-
store point of sale owned or operated by the Company from June 1,
2009 through the date of the final judgment in the action; and (B)
in connection with the transaction, a receipt was printed
containing all of the digits of the credit/debit card numbers on
the receipt provided to the customer. The Company opposed the
plaintiffs' motion for class certification and moved to dismiss
the plaintiffs' claims on the basis that the plaintiffs lack
standing.
On March 11, 2013, the court denied the Company's Motion to
Dismiss For Lack of Standing and certified the issue for
interlocutory appeal to the United States Court of Appeals for the
11th Circuit. The Company filed a petition with the 11th Circuit
to take up the appeal of its Motion to Dismiss at this juncture,
rather than at the end of the case and on June 20, 2013, the 11th
Circuit granted the Company's petition. The trial court has
stayed the case pending the resolution of the appeal. If,
following the appeal, there are further proceedings before the
trial court, the trial court has indicated that it will schedule a
hearing on the plaintiffs' pending motion for class certification.
At this stage of the proceedings, losses are reasonably possible,
however; the Company says it cannot reasonably estimate its loss,
range of loss or liability, if any, related to this lawsuit
because there are a number of unknown facts and unresolved legal
issues that will impact the amount of the Company's potential
liability, including, without limitation: (i) whether the
plaintiffs have standing to assert their claims; (ii) whether a
class or classes will be certified; (iii) if a class or classes
are certified, the identity and number of the putative class
members; and (iv) if a class or classes are certified, the
resolution of certain unresolved statutory interpretation issues
that may impact the size of the putative class(es) and whether or
not the plaintiffs are entitled to statutory damages. An adverse
outcome in this litigation could have a material effect on the
Company's business, financial condition, results of operations and
cash flows.
The Pantry, Inc. -- http://www.pantry.com/-- operates a chain of
convenience stores in the southeastern United States. The
Company's stores offer a selection of merchandise, fuel, and
ancillary products and services. Its merchandise products include
cigarettes, grocery and other tobacco products, packaged
beverages, beer, and wine. The Company operates stores under
various selected banners, which primarily include Kangaroo
Express. The Company was founded in 1967 and is headquartered in
Cary, North Carolina.
PANTRY INC: Continues to Defend Suits Over Fuel Temperature
-----------------------------------------------------------
The Pantry, Inc., continues to defend lawsuits over fuel
temperature in which it has been named a defendant, according to
the Company's August 6, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended June 27,
2013.
Since the beginning of fiscal 2007, over 45 class action lawsuits
have been filed in federal courts across the country against
numerous companies in the petroleum industry. Major petroleum
companies and significant retailers in the industry have been
named as defendants in these lawsuits. Initially, the Company was
named as a defendant in eight of these cases, three of which have
recently been dismissed without prejudice. The Company remains as
a defendant in five cases: one in North Carolina (Neese, et al. v.
Abercrombie Oil Company, Inc., et al., E.D.N.C., No. 5:07-cv-
00091-FL, filed 3/7/07); one in Alabama (Cook, et al. v. Chevron
USA, Inc., et al., N.D. Ala., No. 2:07-cv-750-WKW-CSC, filed
8/22/07); one in Georgia (Rutherford, et al. v. Murphy Oil USA,
Inc., et al., No. 4:07-cv-00113-HLM, filed 6/5/07); one in
Tennessee (Shields, et al. v. RaceTrac Petroleum, Inc., et al.,
No. 1:07-cv-00169, filed 7/13/07); and one in South Carolina
(Korleski v. BP Corporation North America, Inc., et al., D.S.C.,
No 6:07-cv-03218-MDL, filed 9/24/07).
Pursuant to an Order entered by the Joint Panel on Multi-District
Litigation, all of the cases, including those in which the Company
is named, have been transferred to the United States District
Court for the District of Kansas and consolidated for all pre-
trial proceedings. The plaintiffs in the lawsuits generally
allege that they are retail purchasers who received less motor
fuel than the defendants agreed to deliver because the defendants
measured the amount of motor fuel they delivered in non-
temperature adjusted gallons which, at higher temperatures,
contain less energy. These cases seek, among other relief, an
order requiring the defendants to install temperature adjusting
equipment on their retail motor fuel dispensing devices. In
certain of the cases, including some of the cases in which the
Company is named, the plaintiffs also have alleged that because
defendants pay fuel taxes based on temperature adjusted 60 degree
gallons, but allegedly collect taxes from consumers on non-
temperature adjusted gallons, defendants receive a greater amount
of tax from consumers than they paid on the same gallon of fuel.
The plaintiffs in these cases seek, among other relief, recovery
of excess taxes paid and punitive damages. Both types of cases
seek compensatory damages, injunctive relief, attorneys' fees and
costs and prejudgment interest. The defendants filed motions to
dismiss all cases for failure to state a claim, which were denied
by the court on February 21, 2008. A number of the defendants,
including the Company, subsequently moved to dismiss for lack of
subject matter jurisdiction or, in the alternative, for summary
judgment on the grounds that plaintiffs' claims constitute non-
justiciable "political questions." The Court denied the
defendants' motion to dismiss on political question grounds on
December 3, 2009, and defendants request to appeal that decision
to the United States Court of Appeals for the Tenth Circuit was
denied on August 31, 2010.
In May 2010, in a lawsuit in which the Company is not a party, the
Court granted class certification to Kansas fuel purchasers
seeking implementation of automated temperature controls and/or
certain disclosures, but deferred ruling on any class for damages.
The Defendants sought permission to appeal that decision to the
Tenth Circuit in June 2010, and that request was denied on
August 31, 2010. On November 12, 2011, the Defendants in the
Kansas case filed a motion to decertify the Kansas classes in
light of a new favorable United States Supreme Court decision. On
January 19, 2012, the Judge denied the Defendants' motion to
decertify and granted the Plaintiffs' motion to certify a class as
to liability and injunctive relief aspects of Plaintiffs' claims.
The court has continued to deny certification of a damages class.
On September 24, 2012, the jury in the Kansas case returned a
verdict in favor of defendants finding that defendants did not
violate Kansas law by willfully failing to disclose temperature
and its effect on the energy content of motor fuel. On October 3,
2012, the judge in the Kansas case also ruled that defendants'
practice of selling motor fuel without disclosing temperature or
disclosing the effect of temperature was not unconscionable under
Kansas law.
On March 27, 2013, the judge ordered that the plaintiffs' claims
against Chevron U.S.A. be severed in the three cases venued in
California and indicated that only the claims against Chevron
would be remanded for trial. On April 5, 2013, and April 9, 2013,
the judge granted class certification to plaintiffs on the
liability and injunctive relief aspects of their claims against
the nonsettling defendants in the California cases. At this time,
it appears that all remaining cases will be stayed while the
California cases are pending. On July 19, 2013, the court granted
summary judgment in favor of Chevron on all the substantive claims
in the California cases and issued an Order to Show Cause
requiring the parties to address whether and to what extent the
Chevron ruling should apply to the other non-settling defendants
in the California cases. The Company is not a defendant in the
California cases. The Company has opposed class certification and
filed dispositive motions in each of the cases in which the
Company has been sued.
At this stage of proceedings, losses are reasonably possible,
however, the Company cannot estimate the Company's loss, range of
loss or liability, if any, related to these lawsuits because there
are a number of unknown facts and unresolved legal issues that
will impact the amount of any potential liability, including,
without limitation: (i) whether defendants are required, or even
permitted under federal and state law, to sell retail motor fuel
with reference to temperature adjustment or disclosure; (ii) the
amounts and actual temperature of fuel purchased by plaintiffs;
and (iii) whether or not class certification is proper in cases to
which the Company is a party. An adverse outcome in this
litigation could have a material effect on the Company's business,
financial condition, results of operations and cash flows.
The Pantry, Inc. -- http://www.pantry.com/-- operates a chain of
convenience stores in the southeastern United States. The
Company's stores offer a selection of merchandise, fuel, and
ancillary products and services. Its merchandise products include
cigarettes, grocery and other tobacco products, packaged
beverages, beer, and wine. The Company operates stores under
various selected banners, which primarily include Kangaroo
Express. The Company was founded in 1967 and is headquartered in
Cary, North Carolina.
PAPA JOHN'S: Awaits Ruling on Bid for Certification in FLSA Suit
----------------------------------------------------------------
Papa John's International, Inc. is awaiting a court decision on a
motion to certify five additional state classes in the class
action lawsuit alleging violation of the Fair Labor Standards Act,
according to the Company's August 6, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
June 30, 2013.
Perrin v. Papa John's International, Inc. and Papa John's USA,
Inc. is a conditionally certified collective action filed in
August 2009 in the United States District Court, Eastern District
of Missouri, alleging that delivery drivers were reimbursed for
mileage and expenses in violation of the Fair Labor Standards Act.
Approximately 3,900 drivers out of a potential class size of
28,800 have opted into the action. A motion to certify five
additional state classes is pending and could result in another
14,000 plaintiffs if granted.
The Company says it intends to vigorously defend against all
claims in this lawsuit. However, given the inherent uncertainties
of litigation, the outcome of this case cannot be predicted and
the amount of any potential loss cannot be reasonably estimated.
A negative outcome in this case could have a material adverse
effect on the Company.
Based in Louisville, Kentucky, Papa John's International, Inc.,
began operations in 1985. At June 30, 2013, there were 4,252 Papa
John's restaurants (705 Company-owned and 3,547 franchised)
operating in all 50 U.S. states and 34 countries. The Company's
revenues are principally derived from retail sales of pizza and
other food and beverage products to the general public by Company-
owned restaurants, franchise royalties, sales of franchise and
development rights, sales to franchisees of food and paper
products, printing and promotional items, risk management
services, and information systems and related services used in
their operations.
PAPA JOHN'S: TCPA Suit Settlement Approval Expected in Late 2013
----------------------------------------------------------------
Papa John's International, Inc., said in its August 6, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013, that the final court approval of
its settlement of a class action lawsuit alleging violations of
the Telephone Consumer Protection Act is not expected until later
in the year.
Agne v. Papa John's International, Inc. et al. is a class action
filed on May 28, 2010, in the United States District Court for the
Western District of Washington seeking damages for violations of
the Telephone Consumer Protection Act and Washington State
telemarketing laws alleging, among other things that several Papa
John's franchisees retained a vendor to send unsolicited
commercial text message offers primarily in Washington and Oregon.
The court granted plaintiff's motion for class certification in
November 2012; the Company filed a petition for permission to
appeal the court's ruling on class certification to the United
States Court of Appeals for the Ninth Circuit.
On February 13, 2013, the parties tentatively agreed to the
financial terms of a settlement of the litigation. The court
preliminarily approved the terms in June 2013 but final court
approval is not expected until later in the year. A reasonable
estimate of the total cost of the settlement was provided for at
December 30, 2012. Actual costs will be impacted by the claimant
participation rate, but the Company does not expect actual costs
to be materially different from the Company's estimates. The
Company expects the majority of the settlement payments to be made
in 2013.
Based in Louisville, Kentucky, Papa John's International, Inc.,
began operations in 1985. At June 30, 2013, there were 4,252 Papa
John's restaurants (705 Company-owned and 3,547 franchised)
operating in all 50 U.S. states and 34 countries. The Company's
revenues are principally derived from retail sales of pizza and
other food and beverage products to the general public by Company-
owned restaurants, franchise royalties, sales of franchise and
development rights, sales to franchisees of food and paper
products, printing and promotional items, risk management
services, and information systems and related services used in
their operations.
PEPSICO: Settles Naked Juice False Labeling Class Action
--------------------------------------------------------
Alex Harris, writing for The Independent Florida Alligator,
reports that Naked Juice may be leaving its customers feeling a
little less bare after the conclusion of a class action legal
settlement, and UF students may reap the benefits.
The company, a subsidiary of PepsiCo, advertises its products
using phrases like "100% Fruit," "All Natural" and "Non-GMO."
Recently, plaintiffs in the lawsuit settled out of court with
PepsiCo about false labeling of the beverages, according to the
website for the lawsuit. The suit alleges that some of the
ingredients used in several of the products are not as pure as
advertised, including genetically modified soy.
But UF students like Otto Akin, a 21-year-old economics senior,
were unmoved.
"I understand it's false advertising, but it doesn't bother me
that they use genetically modified soy in their products," he
said. "I don't necessarily equate safety with organic like some
people do."
As part of the settlement, Naked customers can apply for up to $75
in reimbursement for qualifying products with proof of purchase.
Without it, customers can still net up to $45. But along with
this consumer friendly format comes worries of fraud.
"It sounds a bit easily gamed," said Mr. Akin. "You can just go
on there, some random person, and get $45?"
Frank Torres, a 20-year-old business management junior, said he
agrees that the easy money could be tempting to students.
"I'd take the money," he said. "I'm fairly certain I've bought
Naked Juice sometime in the last few years."
The wide scope of the claim, for any individuals who purchased
Naked Juice between Sept. 27, 2007, and Aug. 19, 2013, leaves
plenty of room for guessing over whether or not an individual
purchased the drink, said Mr. Torres.
But Mr. Akin, unlike many of his peers, said he probably won't
take advantage of the deal. "I'd feel bad," he said. "I'm
interested in the story but not in making $45 from Pepsi."
PETROCHINA COMPANY: Morrison & Foerster Discusses Class Action
--------------------------------------------------------------
Timothy W. Blakely, Esq. -- tblakely@mofo.com -- Stacey M.
Sprenkel, Esq. -- ssprenkel@mofo.com -- and Caitlin Sinclaire
Blythe, Esq. -- cblythe@mofo.com -- at Morrison & Foerster LLP
report that the filing of a shareholder class action has become
routine following a drop in stock price after the revelation of
adverse news about a company. Allegations of corruption at a
public company are proving to be no different, as the recently
filed putative shareholder class action against oil and gas
company PetroChina Company Ltd. demonstrates.
THE CHINESE GOVERNMENT INITIATES A CORRUPTION INVESTIGATION
Evidencing the Chinese government's continued campaign against
graft, on August 27, 2013, the Communist Party's Central
Commission for Discipline Inspection reportedly disclosed its
investigation into the alleged "severe disciplinary violations" of
a deputy general manager of China National Petroleum Corporation
("CNPC"), PetroChina's controlling shareholder. In China, a
"severe disciplinary violation" is considered to be a euphemistic
term for corruption. That same day, PetroChina filed a Form 6-K
with the U.S. Securities and Exchange Commission ("SEC"),
announcing that three PetroChina senior executives were under
investigation by "relevant PRC authorities." PetroChina stated
that all three had resigned, effective immediately, from their
respective positions "due to personal reasons." The three
executives include a vice president of both PetroChina and CNPC;
an executive director, vice president and head of PetroChina's
Changqing oil field; and a chief geologist.
Three days later, Hong Kong's newspaper South China Morning Post
reported that "[t]op Communist Party leaders" had agreed to
initiate a corruption investigation into the conduct of a former
CNPC senior manager, who also was a former member of the Politburo
Standing Committee and a purported ally of Bo Xilai (whose own
trial for corruption only recently concluded after very public
hearings and intense public interest). And as of September 1,
2013, the Central Commission for Discipline Inspection appears to
have extended its investigation to include the former chairman of
PetroChina and CNPC, resulting in his removal on September 2, 2013
as head of the State-Owned Assets Supervision and Administration
Commission ("SASAC"), a commission charged with oversight of
China's state-owned companies.
There is speculation in the global press that the Chinese
investigation may trigger the interest of U.S. regulatory
authorities. PetroChina's controlling shareholder, CNPC, is a
state-owned entity. Thus, U.S. regulators would view the relevant
executives as "foreign officials" under the Foreign Corrupt
Practices Act ("FCPA"). And at the same time, those same "foreign
officials" are executives of an "issuer" subject to jurisdiction
under the FCPA because PetroChina's American Depository Shares
("ADSs") trade on the New York Stock Exchange.
DAYS LATER, A PUTATIVE SHAREHOLDER CLASS ACTION FOLLOWS
Just days after the announcement of the PRC corruption
investigation, on September 4, 2013, a putative shareholder class
action was filed against PetroChina and four of its current and
former officers in the Southern District of New York. The
complaint alleges violations of the Securities Exchange Act of
1934 and SEC regulations.
The crux of the complaint is that the purported corruption-related
activities of PetroChina's senior executives render false and
misleading several of PetroChina's public statements regarding the
executives' compliance with U.S. securities laws and with
PetroChina's ethical and corporate governance codes. These are
precisely the types of allegations one would expect following
disclosure of corruption-related issues, i.e. allegations that the
company and its directors and officers made false and misleading
statements or omissions by failing properly to disclose the
corruption issues, or by affirmatively stating that it was in
compliance with securities laws and company codes of conduct.10
PetroChina is not the first PRC-based company with stock listed on
a U.S. exchange to face a shareholder class action alleging
failure to disclose corruption, further evidencing that Chinese
companies have been, and remain, on the radar screen of the U.S.
securities plaintiffs' bar.11
CHINA'S CAMPAIGN AGAINST CORRUPTION CONTINUES
The anticorruption investigation into PetroChina has been widely
characterized as an example of President Xi Jingping's "campaign"
against public corruption. It also is particularly notable that
China is targeting corruption involving a major state-owned entity
and high-level officials -- seemingly reinforcing China's promise
to target both "tigers" and "flies" in its anti-graft campaign.
THE HIGH COST OF CORRUPTION FOR PUBLIC COMPANIES
The events over the past two weeks, culminating in the PetroChina
class action lawsuit, serve as a stark reminder to public
companies of the many risks and broad exposure to liability posed
by corruption, especially in challenging markets like China. As
China's campaign against corruption continues and as governments
around the world step up enforcement of anti-bribery laws, the
risk of facing law enforcement and regulatory scrutiny for corrupt
activities is higher than ever before. And, as the PetroChina
lawsuit demonstrates, the potential liability extends beyond
regulatory scrutiny. For public companies, shareholders also will
seek to hold companies and their executives accountable for
shareholder losses as a result of alleged corruption and its
fallout. The costs of defending government investigations,
litigating shareholder class action lawsuits, and the possible
sanctions, fines and damages that could follow are significant --
yet vastly understate the cost of corruption, which includes the
severe reputational damage that a company can suffer as
allegations of wrongdoing play out in the press around the world.
PLAINS ALL AMERICAN: Faces $750-Mil. Shareholder Class Action
-------------------------------------------------------------
Jeremy Heallen and Liz Hoffman, writing for Law360, report that
Houston-based Plains All American Pipeline LP was hit with a
proposed class action in Texas state court on Sept. 9 by unit
holders of a listed subsidiary who claim the company's $750
million bid to buy them out is too low.
Putative lead plaintiffs Robert and Teresa Vicars say Plains'
offer to swap 0.435 shares of its own stock for each unit of PAA
Natural Gas Storage LP it does not already own will yield a
"paltry" return for unit holders while enriching Plains and its
executives.
"As a result of the conflicted and unfair process leading to the
proposed acquisition, the proposed offer price is unfair," the
suit said.
The suit comes about two weeks after Plains proposed the deal
that, based on PNG's recent stock price, shakes out to $22.74 per
share. Plains already controls 46 percent of PNG, which was
formed as a master limited partnership in 2010 to house the
company's gas storage business.
PNG owns three facilities in Louisiana, Mississippi and Michigan
with 97 billion cubic feet of capacity, as well as a marketing
business that makes short-term plays on commodity prices. Net
income, primarily from storage fees, has tripled since 2010 to $73
million last year, according to regulatory filings.
Plains also owns PNG's general partner and about 25 million
subordinated units, as well as the rights to any excess cash
distributions.
Because of the conflicts, the deal needs to be approved by a
special committee of PNG's independent directors. Half of PNG's
board comprises Plains directors, with the remainder drawn from
outside the company.
The Vicars say the deal is unreasonably low, noting that PNG units
traded at a 52-week high of $23.10 and are projected to be on the
upswing.
"Despite the market's positive long-term view of the natural gas
storage market, PAA timed the proposed acquisition to take
advantage of the unpredictable timing and extent of recovery of
the natural gas storage business," the suit said.
Colder temperatures later this year will drive natural gas
consumption, according to the suit, along with PNG's unit price.
The upward trajectory of PNG's value prompted Plains to buy the
company at a discount price and harvest future growth for itself,
the suit says.
And the PNG unit holders claim the conflicts committee that will
eventually review the deal is nothing more than a ruse designed to
rubber stamp Plains' offer.
"[T]he lowball offer and special committee -- which is comprised
of directors who are dominated and controlled by [Plains] -- are
all part of a prearranged fa‡ade designed to give the proposed
acquisition the false appearance of legitimacy when the conflicts
committee, a few days or weeks from now, is able to 'extract' a
higher but still unfairly low price from [Plains], which the
conflicts committee will approve," the suit said.
The suit alleges breach of fiduciary duty and aiding and abetting,
among other things. The Vicars want a court to block the deal and
are seeking injunctive and declaratory relief.
Representatives for Plains were not immediately available for
comment on Sept. 11.
The Vicars are represented by Andrew M. Edison --
andrew.edison@emhllp.com -- of Edison McDowell & Hetherington LLP.
Counsel information for Plains was not immediately available.
The case is Vicars et. al. v. PNGS GP LLC et. al., case number
2013-52687, in the 152nd Judicial District Court of Harris County,
Texas.
PRICELINE.COM: Westchester County May Join Hotel Tax Class Action
-----------------------------------------------------------------
Cara Matthews, writing for LoHud.com, reports that Westchester
County is considering whether to join a class action that alleges
multiple online travel companies are not remitting all the hotel
taxes they collect to local governments.
The lawsuit, filed two years ago by Nassau County, claims Expedia,
Priceline.com, Orbitz and similar businesses charge hotel taxes
based on discounted rates they buy rooms for, not the higher rates
they charge their consumers.
"While Defendants charge and collect Hotel Taxes from occupants
based on the marked up room rates, they only remit to the Class
members, if anything, tax amounts based on the lower, negotiated
room rates," the filing said. "Defendants unlawfully pocket the
difference."
The lawsuit, which was designated in April as a class action,
comes at a time when local governments are struggling to find new
revenues. All local governments that have imposed hotel taxes at
any time since 1995 are plaintiffs unless they opt out by Oct. 11.
Eighty local governments in New York have hotel taxes, the state
Comptroller's Office said.
Westchester County Executive Rob Astorino is recommending the
county not opt out of the lawsuit. The county has a 3 percent
hotel tax and collected $5.3 million in 2012. The Board of
Legislators is reviewing his recommendation.
"These companies are hitting taxpayers and visitors with a double
whammy," county spokeswoman Diana Costello said. "They collect a
higher tax from consumers, and then put the profits in their own
pockets instead of passing along what is due to Westchester."
Rye Brook, White Plains, New Rochelle and the city of Rye also
have 3 percent hotel taxes. Rye Brook estimates it will collect
$630,000 in taxes this year from its two hotels, the Hilton
Westchester and Doral Arrowwood, said Chris Bradbury, village
administrator.
Rockland County is opting out because officials "figured it wasn't
going to benefit us in any real way," said Stephen DeGroat, county
finance commissioner. The county implemented a 3 percent hotel
tax in April 2012, which yields about $1 million a year. Most
people who stay in hotels and motels in Rockland book directly
with hotels, he said.
Putnam County Executive MaryEllen Odell vetoed legislation last
year that would have enacted a 4 percent hotel occupancy tax.
Attorney Robert Schachter -- rschachter@greenbaumlaw.com -- of
Zwerling, Schachter & Zwerling, a Manhattan law firm that is
counsel to the class, said he's confident Nassau will win the
lawsuit. No damage analysis has been performed yet, but it's safe
to say the class stands to receive millions of dollars, he said.
Class members are not financially responsible for legal fees.
William Savino -- william.savino@rivkin.com -- of Rivkin Radler
LLP in Uniondale, Nassau County, which is representing the
defendants, did not respond to a request for comment.
A May 2012 report by the nonpartisan Tax Foundation said online
travel companies prevailed in 18 of 25 states where governments
filed lawsuits on the same issue. Governments won three cases.
Customers already pay full taxes on room rates, and hotels remit
them to local governments, Robin Reck, spokeswoman for the trade
group Travel Technology Association, said in an email. "The
misunderstanding of the business model appears to be based on
efforts to expand the bed tax to the gross transaction, which
includes the OTCs' service fees, making it a new tax on our
services," she wrote.
Online travel companies facilitate the booking of hotel rooms,
increasing the volume and boosting the tourism and travel
industries, she said.
Daniel Conte, general manager at the Westchester Marriott Hotel in
Greenburgh, estimated that use of the 444-room hotel's website and
online travel companies to book rooms has quadrupled in five
years.
"Most people who travel, they do it all online now. In the
future, that will continue to increase, there's no doubt about
it," he said.
PROVIDENT SAVINGS: Court Certifies Class in "McKeen-Chaplin" Case
-----------------------------------------------------------------
Senior District Judge Garland E. Burrell, Jr., granted motions to
certify a class action and conditionally certify a collective
action in the case captioned GINA MCKEEN-CHAPLIN, individually, on
behalf of all others similarly situated, and on behalf of the
general public, Plaintiff, v. PROVIDENT SAVINGS BANK, FSB, and
DOES 1-50, inclusive, Defendants, NO. 2:12-CV-03035-GEB-JFM, (E.D.
Cal.).
The Plaintiff sought certification of a state law class action
under Federal Rule of Civil Procedure 23 and conditional
certification of a collective action under the Fair Labor
Standards Act. The Plaintiff alleges state law claims against the
Defendant for (1) failure to pay overtime compensation under Cal.
Lab. Code Sections 510, 1194, 1198 and the Industrial Welfare
Commission Wage Orders; (2) waiting time penalties under Cal. Lab.
Code Sections 201-203; (3) failure to provide itemized wage
statements under Cal. Lab. Code Section 226; (4) failure to
provide and/or authorize second meal periods under Cal. Lab. Code
Section 226.7; and (5) unfair business practices under Cal. Bus. &
Prof. Code Sections 17200 et seq. The Plaintiff sought
certification of these claims on behalf of a class of "[a]ll
persons who have been employed by [Defendant] as mortgage
underwriters in the State of California from December 17, 2008
until the trial of this case." The Plaintiff also alleges a
federal overtime claim under the FLSA, 29 U.S.C. Section 216(b)
for failure to pay overtime due. She seeks to conditionally
certify this claim on behalf of a collective class of "all
mortgage underwriters who are, or were, employed by Provident
Savings Bank at any time from three years prior to the date of the
Court's order granting conditional certification and continuing to
the present."
A copy of the District Court's August 12, 2013 Order is available
at http://is.gd/F4n0fefrom Leagle.com.
Gina McKeen-Chaplin, Plaintiff, represented by Matthew C. Helland
-- helland@nka.com -- at Nichols Kaster & Anderson, LLP.
Provident Savings Bank, F.S.B., Defendant, represented by Howard
M. Knee -- Knee@BlankRome.com -- at Blank Rome LLP & Michael
Lester Ludwig -- ludwig@blankrome.com -- at Blank Rome LLP.
RAS & ASSOCIATES: Faces Class Action Over Investment Fraud
----------------------------------------------------------
Pat Munsey, writing for Kokomo Perspective, reports that once
Richard Schwartz took his own life, it wasn't difficult to guess
what would happen next. A flood of lawsuits have been filed or
are being prepared in an attempt to recover what little money
remained from the so-called "wealth manager's" years of fraud.
But one Carmel-based attorney cast a broader net recently, filing
a class action suit against Mr. Schwartz's RAS & Associates, along
with contracted employee Tennis Guyer, who served as The Schwartz
Group's lead Kokomo representative when the boss was in Kentucky
or Arizona.
The suit, filed Aug. 27 in Howard Superior Court IV, alleges that
Messrs. Schwartz and Guyer worked to separate Grant County
resident Lenora Jean Eastes from her life savings over the course
of 11 years. She is seeking judgments against the defendants
based upon violations of the Indiana Uniform Securities Act,
negligence, and conversion.
Mr. Guyer, who to this point had avoided being included in the
legal tangle surrounding Mr. Schwartz, is named specifically in
the class action because he allegedly acted as an agent by
providing advice and information to Eastes and prepared tax
returns on her behalf, resulting in severe penalties from the IRS
because of what the suit terms as negligence on Mr. Guyer's part.
Ms. Eastes and her husband purchased three annuities from Midland
National Life Insurance through Schwartz in 2002. Those
investments remained secure until Oct. 15, 2011, at which time
Schwartz "presented to Jean an alternative investment which he
described as one which would provide her with a guaranteed rate of
return in a safe and efficient manner."
Ms. Eastes alleges that she made it clear to Schwartz that any
change in investment must take place in a tax qualified vehicle,
and Mr. Schwartz allegedly claimed that the liquidated Midland
annuities would, indeed, be placed in such an investment. She
agreed, and Mr. Schwartz presented her with a "Real Estate Savings
Portfolio" with RAS & Associates.
The product was purported to have a five-year term, paying a
guaranteed annual rate of six percent on a $239,100 principal
investment, and Eastes received $1,500 monthly payments from the
investment. This continued until July 2013. The August check
didn't come.
At the same time the IRS sent notice to Eastes, claiming that she
owed more than $69,000 in taxes and penalties because she failed
to report the liquidation of the Midland securities in 2011.
Ms. Eastes contacted Mr. Guyer, who had prepared her taxes, and
the suit claims that he pledged to contact the IRS on her behalf.
It is not known if he did so.
"Contrary to the assurances of RAS and its principal, the late
Richard Schwartz, the annuities were not invested in a tax
qualified vehicle, and the IRS notice indicates as much," the suit
states. "Instead, the annuities were simply cashed, triggering
the recognition of significant, ordinary income. The IRS assessed
on $215,566 of unreported income, not shown on Jean's 2011 tax
return.
"Jean's 2011 tax return was prepared by Tennis Guyer of the
Schwartz Group. Jean relied upon guyer to property prepare and
file her return, and he was provided, or had access to, all of
Jean's relevant financial information necessary to prepare an
accurate return."
Ms. Eastes contacted RAS about the missing check and spoke to
Schwartz Group employee Nancy West, who told her that Mr. Schwartz
was ill and that a wire transfer was forthcoming which would allow
them to send her a payment. No money was sent, and a demand to
withdraw the entire investment receive no response.
The suit goes on to allege that Ms. Eastes was not alone in her
experience, and that Messrs. Schwartz and Guyer, through RAS,
perpetrated the same scheme on "perhaps hundreds of persons." This
is the basis for the class action that is included in the suit.
Messrs. Schwartz and Guyer are alleged to "directly or indirectly
employing a device, scheme, or artifice to defraud the Plaintiff
and others similarly situated in connection with the offer, sale,
or purchase of a security."
Also, they allegedly violated the Indiana Uniform Securities Act
by directly or indirectly making an untrue statement and
perpetrating a fraud in connection with the security sale. The
law allows such victims to recover the principal of their
investment along with a minimum of eight percent annual interest.
The pair are further alleged to have been negligent by failing to
provide Ms. Eastes with a prospectus on the investment vehicle, by
failing to invest her money in a tax qualified investment, and by
failing to submit accurate tax documents on her behalf.
Finally Messrs. Guyer and Schwartz are accused of conversion --
taking Ms. Eastes' money and failing to honor requests to return
it. These accusations are similarly alleged on behalf of any
other victim who wishes to take part in the class action.
Attempts to reach Mr. Guyer for comment were unsuccessful.
RASHIDA SAMJI: Ponzi Scheme Class Action to Proceed in Canada
-------------------------------------------------------------
Keven Drews, writing for The Canadian Press, reports that a class-
action lawsuit will proceed in B.C. Supreme Court against a
former notary public and several major financial institutions over
an alleged ponzi scheme that bilked investors out of tens of
millions of dollars.
Among the defendants named are Rashida Samji, Arvin Patel, Royal
Bank of Canada, Toronto-Dominion Bank, Coast Capital Savings
Credit Union, Vancouver City Savings and Worldsource Financial
Management Inc.
Plaintiffs Lawrence Brian Jer, Jun Jer and Janette Scott are
alleging breach of trust, knowing assistance in breach of trust,
fraud and negligence.
The allegations have yet to be proven, but a court document states
the plaintiffs invested money into a private opportunity that was
promoted by Ms. Samji but didn't actually exist, and the minimum
investments ranged between $50,000 and $100,000.
"These class members' prospects for recovery of their losses rest
largely on the claims against the financial institutions," said
Justice Laura Gerow, in her ruling posted online.
"I agree with the plaintiffs that these claims will not be
addressed in the individual actions and are appropriate claims for
resolution in the class proceeding."
She said bankruptcy proceedings against Ms. Samji, an
investigation by the British Columbia Securities Commission
investigation, a criminal probe by the RCMP and a disciplinary
hearing by the Society of Notaries Public of BC do not provide a
"means of adjudicating the claim."
The plaintiffs allege, based on bankruptcy proceedings against
Ms. Samji, that there were about 203 investments into the scheme,
and many of those were made jointly.
The court document states about 50 other lawsuits have been
launched by investors, and the plaintiffs say about 96 investors
have not commenced legal action for about $22.7 million. It states
about 10 per cent of those losses were for less than $50,000.
Not all the defendants responded to requests for comment, but
Sheira Hallam, a spokeswoman for Coast Capital Savings, said
Justice Gerow's ruling was not a judgment on the merits of the
case but a decision that the class-action lawsuit is the best way
to resolve the issue.
"We will be guided by that process," she said "We'll let the
courts guide us there."
Paul Bennett, legal counsel for the plaintiffs, said he believe
the class claims are in the range of $30 to $40 million.
"We're pleased that the case has been certified, and we'll pursue
to try and recover a secure relief for the benefit of the class
members," he said, noting a trial date has been set for May 2014.
He said his clients are resident of Metro Vancouver and for most
of the investors, the money represented their savings.
According to the court document, Ms. Samji promoted the Mark
Anthony Investment, which had no affiliation to the Mark Anthony
Group, an importer and distributor of premium beer, fine wine and
specialty beverages.
The B.C. Securities Commission announced in an April 4, 2012 news
release the money was to be used as collateral for a winery in
Kelowna.
But the court document states Ms. Samji deposited the funds she
received, not into a trust account, but into her general or
personal account, or an account under the name of Samji Holdings.
The money was then used for the benefit of Ms. Samji, her notary
company or her holding company and used to make payments to
investors without their knowledge or authorization, states the
document.
Ms. Samji, her notary company or holdings company maintained
accounts at each of the financial institutions.
"Between April 2010 and January 2012, when the scheme was exposed,
approximately $34 million flowed through Samji Holdings' account
with TD," states the document.
Meantime, Mr. Patel, who was a financial adviser at Coast Capital
and a mutual-fund representative for Worldsource, recommended the
scheme to the Jers and other Coast Capital employees, the court
document says.
The Society of Notaries Public of B.C. suspended Ms. Samji on
Feb. 7, 2012 and obtained a court order appointing a custodian
over Ms. Samji's practice on Feb. 8.
She subsequently submitted her resignation on March 6, 2012.
In April 2012, the B.C. Securities Commission announced Mr. Patel
had been given a permanent ban from B.C. markets for his role in
the scheme.
Naked Juice settles GMO class-action lawsuit, consumers can be
reimbursed
RECONTRUST COMPANY: Court Vacates Dismissal of "Dutcher" Suit
-------------------------------------------------------------
DUTCHER v. MATHESON is a class-action lawsuit filed in state
court, alleging that the defendants -- including ReconTrust, a
Texas-based national bank -- had conducted non-judicial
foreclosure sales that did not comply with Utah law. After
removal, the district court dismissed the complaint for failure to
state a claim, concluding that whether federal law "incorporates
Utah or Texas law, Recon[Trust] has not operated beyond the law by
acting as a foreclosure trustee in Utah."
Plaintiffs appealed.
The United States Court of Appeals for the Tenth Circuit has held
that the district court erred in determining it had jurisdiction
to hear the case. Exercising jurisdiction under 28 U.S.C. Section
1291, the Tenth Circuit vacated the district court's order of
dismissal and its rulings on the plaintiffs' motion for
reconsideration and motion to amend. The case is remanded for
proceedings consistent with the Tenth Circuit's opinion.
The case is RICHARD DUTCHER; GWEN DUTCHER; RICHARD FERGUSON;
MICHELLE FERGUSON; CATHERINE RICHARDS AHLERS, on their own behalf
and on behalf of a class of similarly situated persons,
Plaintiffs-Appellants, v. STUART T. MATHESON; MATHESON, MORTENSEN,
OLSEN & JEPPSON, P.C.; RECONTRUST COMPANY, N.A.; BAC HOME LOANS
SERVICING, LP; BANK OF AMERICA, N.A., Defendants-Appellees. STATE
OF UTAH; OFFICE OF COMPTROLLER OF THE CURRENCY, Amici Curiae, NO.
12-4150.
A copy of the Appeals Court's August 13, 2013 Opinion is available
at http://is.gd/ZhIrDwfrom Leagle.com.
Marcus R. Mumford -- rm@mumfordrawson.com -- of Mumford Rawson
LLC, Salt Lake City, Utah, for Plaintiff-Appellants.
Amy Miller -- amiller@mcguirewoods.com -- of McGuireWoods, LLP,
Washington, D.C., (Brian Emory Pumphrey --
bpumphrey@mcguirewoods.com -- of McGuireWoods LLP, Richmond,
Virginia, and Craig Robert Mariger -- cmariger@joneswaldo.com --
of Jones Waldo Holbrook & McDonough, PC, Salt Lake City, Utah,
with her on the briefs), for Defendants-Appellees.
Thom D. Roberts, (Mark L. Shurtleff with him on the brief), Salt
Lake City, Utah, for Amicus Curiae, State of Utah.
Amy S. Friend, Chief Counsel; Daniel P. Stipano, Deputy Chief
Counsel; Horace G. Sneed and Douglas B. Jordan, Attorneys, Office
of the Comptroller of the Currency, Washington, D.C., filed an
Amicus Curiae brief for the Office of the Comptroller of the
Currency.
RITE AID: Judge Denies Motion to Strike Background-Check Suit
-------------------------------------------------------------
Kelly Knaub, writing for Law360, reports that job applicants to
Rite Aid Corp. won a round in their fight over the company's
pre-employment background checks, when a Pennsylvania federal
judge on Sept. 11 denied the company's motion to strike the
designation of the putative class action as related to a similar
case, saying both suits share a central core of common facts.
When plaintiff Kyra Moore filed the putative class action against
Rite Aid in March, she designated the case as related to a similar
putative class action filed in May 2011. Both suits allege Rite
Aid violated the Fair Credit Reporting Act when it collected
information and created reports from a LexisNexis database of
retail theft during its background checks of employee candidates.
Rite Aid had asserted that the two cases are unrelated because the
parties, allegations, time period and requested remedies are
different. But U.S. District Judge Jan DuBois refuted that
argument, saying the only requirement was that both cases contain
a central event with a similar core and they need not be
identical.
"The cases are related because the harm alleged to have been
sustained by both putative classes stems from the same facts --
the use of LexisNexis' employment adjudication services and
whether such conduct violates the FCRA," Judge DuBois wrote.
According to Ms. Moore's complaint, she alleged that Rite Aid
violates the FCRA by using consumer reports generated from the
LexisNexis database to make unfavorable employment decisions
without providing applicants with a copy of the report or
sufficient time to dispute the report before taking adverse
action.
The database, which allows companies to share incidents of theft
and fraud among employees or customers, interprets any ambiguity
of a voluntary admissions statement signed by an employee
admitting to theft or fraud in favor of the contributing employer,
Moore claimed.
Moore designated the case as related to Goode v. LexisNexis Risk &
Information Analytics Group Inc., in which plaintiffs alleged that
LexisNexis violated the FCRA's notice requirements by making
adverse employment decisions without first notifying employee
candidates of the contents of retail theft reports.
Judge DuBois said the question before the court was whether both
cases contained central events with a core of similarity or arose
out of the same transaction. Since both class actions concern
multiple transactions, the question that remained was whether the
cases contained a central event with a core of similarity,
according to Judge DuBois.
The judge ruled that Ms. Moore's action shares a central core of
common facts with the Goode case since both are putative class
actions that concern LexisNexis' employment evaluations using its
retail theft database.
"The central legal question in each," Judge DuBois wrote, "is
whether LexisNexis's employment evaluations, as structured,
violate provisions of the FCRA."
The rule governing the designation of related cases is intended to
promote judicial efficiency and prevent parties from being exposed
to contradictory judgments, according to the judge.
Representatives for the parties did not immediately respond to a
request for comment by Law360.
Kyra Moore is represented by David Searles, Erin Novak, John
Soumilas and James Francis of Francis & Mailman PC; Irv Ackelsberg
-- iackelsberg@langergrogan.com -- of Langer Grogan & Diver PC,
and Nadia Hewka and Sharon Dietrich of Community Legal Services
Inc.
Rite Aid is represented by Jonathan Wetchler --
jwetchler@duanemorris.com -- Alison Morris, Caroline Austin --
caustin@duanemorris.com -- and Sean Zabaneh --
SSZabaneh@duanemorris.com -- of Duane Morris LLP.
The case is Moore v. Rite Aid Hdqtrs Corp. et al, case number
2:13-cv-01515, in the U.S. District Court for the Eastern District
of Pennsylvania.
SIBERONI: Recalls Meat and Poultry Ravioli Products
---------------------------------------------------
Siberoni, a Portland, Ore. firm, is recalling 169,655 pounds of
raw and frozen meat and poultry "pelmeni" (Eastern European-style
ravioli products) which were produced without the benefit of
inspection, the U.S. Department of Agriculture's Food Safety and
Inspection Service (FSIS) announced.
The following products are subject to recall:
-- 1 lb. packages, in 40 pound cases, of "Siberoni" brand
Chicken Pelmeni;
-- 1 lb. packages, in 40 pound cases, of "Siberoni" brand Beef
Pelmeni; and
-- 1 lb. packages, in 40 pound cases, of "Siberoni" brand Beef
and Pork Pelmeni
All these products bear the establishment number "33788" or
"P-33788" inside a USDA mark of inspection or elsewhere on the
package. The products were produced prior to September 6, 2013
and were sold directly from the firm's storefront and, via a
distributor, to retail outlets in Oregon and Washington State.
The problem was discovered when an FSIS investigator found, at a
distributor, product that the firm had produced while under
suspension. Further investigation found that more products had
been produced prior to the suspension period, but also without
benefit of inspection. FSIS has received no reports of illnesses
associated with consumption of these products. Individuals
concerned about an illness should contact a healthcare provider.
There were no child nutrition, Department of Defense, or
internet/Catalog sales of the product.
FSIS routinely conducts recall effectiveness checks to verify
recalling firms notify their customers (including restaurants) of
the recall and to ensure that steps are taken to make certain that
the product is no longer available to consumers. When available,
the retail distribution list(s) will be posted on the FSIS website
at: http://www.fsis.usda.gov/recalls.
Media and consumers with questions regarding the recall should
contact Siberoni at 503-335-5843 or visit the firm's website at
http://www.siberoni.com
Consumers with food safety questions can "Ask Karen," the FSIS
virtual representative available 24 hours a day at AskKaren.gov or
via smartphone at m.askkaren.gov. "Ask Karen" live chat services
are available Monday through Friday from 10 a.m. to 4 p.m. ET. The
toll-free USDA Meat and Poultry Hotline 1-888-MPHotline (1-888-
674-6854) is available in English and Spanish and can be reached
from l0 a.m. to 4 p.m. (Eastern Time) Monday through Friday.
Recorded food safety messages are available 24 hours a day.
STANDARD FIRE: Bryan Cave Discusses Supreme Court Ruling
--------------------------------------------------------
Michael G. Biggers, Esq. -- mgbiggers@bryancave.com -- and
Sarah April, Esq. -- sarah.april@bryancave.com -- at Bryan Cave
LLP report that the U.S. Supreme Court unanimously held March 19
in Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013),
that putative class counsel cannot avoid removal of a state case
through a precertification stipulation purporting to limit damages
to less than the federal jurisdictional threshold amount.
In Knowles, the plaintiff filed a class action in Arkansas state
court against Standard Fire Insurance. The complaint stipulated
that the class would seek less than $5 million in damages; this
was an attempt to prevent the case from being removed to federal
court under the Class Action Fairness Act (CAFA), which permits
class actions to be removed when the aggregated amount of claims
in the case exceeds $5 million.
Standard Fire nonetheless sought removal, but the federal court
remanded the case to state court based on the stipulation to limit
damages.
The Supreme Court, in a concise ruling by Justice Breyer, held
that removal to federal court was appropriate because
"stipulations must be binding." This holding is based on the
narrow reasoning that a class representative cannot legally bind
unnamed class members until the class is certified. Id. at 1350.
Plaintiff as Master of Complaint v. Fairness to Absent Class
Members
Lurking in Knowles, however, is a tension between the long-
standing precedent that a plaintiff is the master of his complaint
and the judicial system's interest in various principles,
including fairness to absent class members. Knowles's counsel
argued that removal was inappropriate because the Supreme Court
precedent has long recognized that a plaintiff is the master of
his complaint and can limit his claims.
Addressing concerns related to protecting the silent class
members, Knowles's counsel argued that other procedures are in
place to protect the class -- the named plaintiff can be removed
if inadequate; absent class members can opt out; and a defendant
can seek removal again if the complaint is amended to increase the
amount in controversy. Transcript for Oral Argument in Standard
Fire Ins. Co. v. Knowles, No. 11-1450, at 50:2-24 (U.S. Jan. 7,
2013).
Conversely, Standard Fire's counsel argued that the plaintiff in a
putative class is in fact not the master of absent putative class
members prior to certification and therefore cannot bind them
through a damages stipulation. Id. 9:23-10:22. Standard Fire
relied on a recent Supreme Court decision -- Smith v. Bayer Corp.,
131 S. Ct. 2368, 2382 (2011) -- for the proposition that class
members are not parties to the litigation prior to certification,
and therefore the plaintiff has no ability to bind them through
stipulation. Id. 10:23-11:18.
The Knowles decision failed to directly address this tension.
However, during arguments, Justice Kagan foreshadowed that the
Supreme Court may have to address the tension in the near future.
In response to Standard Fire's arguments, she expressed concern
that although the case purportedly addressed only stipulations
limiting damages, there is a slippery slope and future cases may
need to address stipulations regarding the named plaintiff's
ability to define the claims and to name defendants. Id. at 15:4-
21.
Justice Kagan's concerns are well-warranted. For years, courts
have been attempting to strike a balance in a class context
between acknowledging a plaintiff's right to control his or her
own complaint, such as control in defining claims or naming
defendants, and judicial protection of absent class members.
On the one hand, judicial protection of the absent class members
is an important factor in the certification process because courts
are directed to ensure that "parties will fairly and adequately
protect the interests of the class." In re Teflon Products
Liability Litigation, 254 F.R.D. 354, 368 (S.D. Iowa 2008)
(quoting Fed. R. Civ. P. 23(a)(4)). Rule 23(a) requires courts to
determine whether the named plaintiffs are appropriate
representatives of the class whose claims they wish to litigate
and seeks to uncover conflicts of interest between named parties
and the class they seek to represent. Wal-Mart v. Dukes, 131 S.
Ct. 2541, 2550 (2011); Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 625 (1997). "[A] class representative must be part of the
class and 'possess the same interest and suffer the same injury'
as the class members." Amchem, 521 U.S. at 625-26
(quotingSchlesinger v. Reservists Comm. to Stop the War, 418 U. S.
208, 216 (1974)).
Similarly, courts are concerned with the adequacy of counsel and
ensuring counsel do not place their own interests ahead of class
members. This issue most often comes up in the early settlement
context. The class action mechanism can often tempt class counsel
to settle early to "avoid substantial risk and maximize their
hourly return." Louis W. Hensler, Class Counsel Self-Interest and
Other People's Money, 35 U. Mem. L. Rev. 53, 69 (2004).
If class counsel takes a case all the way to trial and the class
loses, the attorney receives no fee. Id. Thus, the Supreme Court
has recognized that "with an already enormous fee within counsel's
grasp, zeal for the client may relax sooner than it would in a
case brought on behalf of one claimant." Id. (citing Ortiz v.
Fibreboard Corp., 527 U.S. 815, 852 n.30 (1999)); see also In re
Gen. Motors Corp. Pick-Up Truck Fuel Tank Products Liab. Litig.,
55 F.3d 768, 801 (3d Cir. 1995) (stating that the conventional
method in calculating class attorneys' fees gives class counsel
"incentives to act earlier than [the class] would deem optimal,"
and that "the settlement process may amount to a covert exchange
of a cheap settlement for a high award of attorney's fees").
On the other hand, it is historically understood in various
contexts that the law allows a plaintiff and plaintiff's counsel
to be the masters of their own complaint, as the plaintiff in
Knowles made clear in his argument. A tension between these
interests comes to a boil when a class representative and counsel
make decisions that could sacrifice the rights or interests of
absent class members.
Courts Struggle Over Claim Splitting
One persistent issue that courts struggle with in this context is
claim splitting. Where a class representative and his or her
counsel choose to pursue only certain claims to improve the
prospects for certification, that choice could result in
precluding some of the class members from pursuing any of the
dropped claims under the theory of claim preclusion.
A number of courts have held that where a class representative
chooses to pursue only some of the available legal theories in
order to facilitate certification that choice renders the
representative inadequate. See, e.g., Feinstein v. Firestone Tire
and Rubber Co., 535 F. Supp. 595, 606-07 (S.D.N.Y. 1982) (denying
certification for representatives asserting limited set of
claims); Brown v. Kerkhoff, 279 F.R.D. 479, 495-96 (S.D. Iowa
2012); Fosmire v. Progressive Max Ins. Co., 277 F. R.D. 625, 634
(W.D. Wash. 2011).
These holdings are based on court views that a class
representative seeking only partial available relief for the class
is possibly "waiving, on behalf of hundreds of class members, any
possible recovery of potential substantial damages -- present or
future." Krueger v. Wyeth, Inc., No. 03cv2496 JLS (AJB), 2008 BL
298174, at *3 (S.D. Cal. Feb. 19, 2008).
This possibility of waiver calls into question whether the class
has "adequate representation," because the decision could possibly
prejudice some class members, and prevents the class
representative's interests from being fully aligned with those of
the entire class. In re Teflon Products Liability Litigation, 254
F.R.D. 354, 368 (S.D. Iowa 2008); see also Thompson v. American
Tobacco Co., 189 F.R.D. 544, 550-51 (D. Minn. 1999) ("[T]he
possible prejudice to class members is simply too great . . . to
conclude that the named Plaintiffs' interest are aligned with
those of the class.").
Moreover, even assuming splitting claims would not subsequently
bar class members from obtaining further relief through the
dropped claims, some courts feel that the class representative who
dropped the claims "holds different priorities and litigation
incentives than a typical class member." Drimmer v. WD-40 Co., No.
06-CV-900 W (AJB), 2007 BL 198124, at *3 (S.D. Cal. Aug, 24,
2007); see also Thompson, 189 F.R.D. at 550 (finding that when
plaintiffs have jeopardized a class member's potential claims for
personal injury damages, their interests are "antagonistic" to
those of the class). Thus, some courts determine that simply the
"the existence of claim splitting constitutes a compelling reason
to deny class certification" under Rules 23 because it shows that
the class has inadequate representation. Krueger, 2008 BL 298174,
at * 3.
Notwithstanding these policy concerns, denial of certification in
these circumstances can be considered harsh where the
representative is simply attempting to craft a complaint that will
have the highest likelihood of overcoming any certification
challenges.
Seventh Circuit Ruling May Offer a Compromise
With these competing interests in mind, the Seventh Circuit has
attempted to devise a compromise by which courts can assess
whether a class representative is truly inadequate when crafting a
class complaint and certification motion by limiting certified
claims to overcome barriers to certification. In Murray v. GMAC
Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), the court held that
a class representative was not inadequate where she sought purely
statutory damages and not compensatory damages under a negligence
theory.
The court stated that "[r]efusing to certify a class because the
plaintiff decided not to make the sort of person-specific
arguments that render class treatment infeasible would throw away
the benefits of consolidated treatment." Id. at 953. The court
then instructed that "[u]nless a court finds that personal
injuries are large in relation to statutory damage," a class
representative should be allowed to drop claims for compensatory
damages so that he or she can attain class certification. Id.
This resolution, according to the court, would allow class members
with large compensatory injuries to opt out when their numbers are
few, preventing class certification when all or almost all of the
claims are likely to be large enough to justify individual
litigation. Id.
While this solution attempts to resolve the claim-splitting issue,
it fails to address certain problematic aspects of the situation:
The standard is subjective. What is a substantial enough number
of class members with other valuable claims to justify rejection
of the class? Conversely, what is a small enough number of such
class members to justify proceeding as a class, with those
potential members free to opt out and pursue their own claims?
Without a clear standard, courts and parties necessarily find it
difficult to know when certification is appropriate.
What happens when the few members with larger claims fail to opt
out because they do not understand their claims or the
implications of preclusion and then later seek to pursue their own
claims? Their subsequent claims would still be subject to
dismissal as claim splitting, leaving these members that had a
potentially large recovery unable to pursue those claims. See,
e.g., Feinstein, 535 F. Supp. at 606-07.
While arguably flawed, and non-binding on other circuits, more
than anything the Seventh Circuit decision exemplifies the courts'
struggle to find a resolution to "an inherently insoluble
certification problem." Feinstein, 535 F. Supp. at 606-07. It is
a problem that arises in contexts beyond defendants' efforts to
defeat certification.See In re Uponor, Inc. F1807 Plumbing
Fittings Products Liability Litig., Nos. 12-2761, 12-3179, 2013 BL
150623, at *5-7 (8th Cir. June 7, 2013) (rejecting objection to
settlement by group of class members protesting failure to assert
California statutory cause of action). Knowles acknowledged this
issue, yet failed to give clear guidelines.
In light of lower courts grappling with these certification
issues, Justice Kagan's concerns are likely prophetic. The
Supreme Court will probably again be confronted with these issues,
and in order to create greater consistency and predictability in
the class certification process the Court will need to shed more
light on how lower courts should resolve the tension between a
plaintiff's right to control his or her own complaint and the
judicial system's interest in fairness to absent class members.
STATE STREET: Continues to Defend Shareholder Suits in Mass.
------------------------------------------------------------
State Street Corporation continues to defend itself against four
shareholder-related lawsuits in Massachusetts, according to the
Company's August 6, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended June 30,
2013.
Four shareholder-related complaints are currently pending in
federal court in Boston. One complaint purports to be a class
action on behalf of State Street shareholders. A second complaint
is a purported shareholder derivative action on behalf of State
Street. The two other complaints purport to be class actions on
behalf of participants and beneficiaries in the State Street
Salary Savings Program who invested in the program's State Street
common stock investment option. The complaints variously allege
violations of the federal securities laws, common law and the
Employee Retirement Income Security Act of 1974 ("ERISA") in
connection with the Company's foreign exchange trading business,
its investment securities portfolio and its asset-backed
commercial paper conduit program. The Company says it has not
established a reserve with respect to these matters.
State Street Corporation -- http://www.statestreet.com/-- a
financial holding company, provides various financial products and
services to institutional investors worldwide. It was founded in
1832 and is headquartered in Boston, Massachusetts. The Company
offers investment servicing and investment management services.
STATE STREET: Continues to Defend Suits Over SSgA-Managed Funds
---------------------------------------------------------------
State Street Corporation continues to defend itself against two
class action lawsuits related to funds managed by State Street
Global Advisors, according to the Company's August 6, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013.
The Company is currently defending two related ERISA (Employee
Retirement Income Security Act of 1974) class actions by investors
in unregistered SSgA-managed collective trust funds and common
trust funds, which challenge the division of the Company's
securities lending-related revenue between those funds and State
Street in its role as lending agent. The first action alleges,
among other things, that State Street breached its fiduciary duty
to investors in those funds. The plaintiff contends that other
State Street agency lending clients received more favorable fee
splits than did the SSgA lending funds. In August 2012, the Court
certified a class consisting of ERISA plans that invested in SSgA
collective trust funds between April 2004 and the present. The
second action, filed in January 2013, challenges the division of
the Company's securities lending-related revenue between common
trust funds and State Street in its role as lending agent. It
alleges, among other things, that State Street breached its
fiduciary duty under ERISA and state common law to investors in
those funds. The Company says it has established a reserve of $15
million in connection with these matters.
State Street Corporation -- http://www.statestreet.com/-- a
financial holding company, provides various financial products and
services to institutional investors worldwide. It was founded in
1832 and is headquartered in Boston, Massachusetts. The Company
offers investment servicing and investment management services.
STATE STREET: Suits Over Foreign Exchange Remain Pending in Mass.
-----------------------------------------------------------------
Class action lawsuits arising from certain foreign exchange
transactions with State Street Corporation remains pending in
Massachusetts, according to the Company's August 6, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended June 30, 2013.
The Company offers indirect foreign exchange services such as
those it offers to the California pension plans to a broad range
of custody clients in the U.S. and internationally. The Company
has responded and is responding to information requests from a
number of clients concerning its indirect foreign exchange rates.
In February 2011, a putative class action was filed in federal
court in Boston seeking unspecified damages, including treble
damages, on behalf of all custodial clients that executed certain
foreign exchange transactions with State Street from 1998 to 2009.
The putative class action alleges, among other things, that the
rates at which State Street executed foreign currency trades
constituted an unfair and deceptive practice under Massachusetts
law and a breach of the duty of loyalty.
Two other putative class actions are currently pending in federal
court in Boston alleging various violations of the Employee
Retirement Income Security Act of 1974 ("ERISA") on behalf of all
ERISA plans custodied with the Company that executed indirect
foreign exchange transactions with State Street from 1998 onward.
The complaints allege that State Street caused class members to
pay unfair and unreasonable rates for indirect foreign exchange
transactions with State Street. The complaints seek unspecified
damages, disgorgement of profits, and other equitable relief.
The Company says it has not established a reserve with respect to
any of the pending legal proceedings related to its indirect
foreign exchange services. The Company cannot provide any
assurance as to the outcome of the pending proceedings, or whether
other proceedings might be commenced against the Company by
clients or government authorities. The Company expects that the
plaintiffs will seek to recover their share of all or a portion of
the revenue that the Company has recorded from providing indirect
foreign exchange services.
State Street Corporation -- http://www.statestreet.com/-- a
financial holding company, provides various financial products and
services to institutional investors worldwide. It was founded in
1832 and is headquartered in Boston, Massachusetts. The Company
offers investment servicing and investment management services.
TOSHIBA AMERICA: Monetary Sanctions Ruling vs. Sklar Affirmed
-------------------------------------------------------------
The Court of Appeals of California for the Second District,
Division One, issued an order modifying an August 7, 2013 court
opinion to reflect a change in judgment entered in ELLIS v.
TOSHIBA AMERICA INFORMATION SYSTEMS, INC.
Lori J. Sklar represented the plaintiffs in a class action against
Toshiba America Information Systems. Ms. Sklar appealed from the
trial court's orders awarding monetary sanctions against her and
the court's order awarding her no attorney fees. Toshiba cross-
appealed the order awarding staff fees to Sklar Law Offices.
The Calif. Appeals Court affirms the order awarding monetary
sanctions against Sklar. The portion of the attorney fee order
awarding $179,600 in fees for work by Sklar Law Offices staff is
reversed, and is remanded to the trial court for correction of the
amount of fees due for the work of Missy Mouser, and for a
determination by the trial court of the amount, if any, of costs
to be awarded to Sklar Law Offices, with a maximum cost award of
$114,900. The Appeals Court also directed the trial court to award
monetary sanctions to Toshiba America Information Systems in the
amount of its attorney fees and costs related to Toshiba America
Information Systems's motion to strike. In all other respects, the
attorney fee award is affirmed. Costs on appeal are to be awarded
to Toshiba America Information Systems, ruled the Court.
The case is JEFFERY L. ELLIS et al., Plaintiffs, v. TOSHIBA
AMERICA INFORMATION SYSTEMS, INC., Defendant and Respondent; LORI
J. SKLAR, Objector and Appellant, NOS. B220286, B227078.
A copy of the Appeals Court's August 14, 2013 Order is available
at http://is.gd/9SH2tbfrom Leagle.com.
Lori J. Sklar, in pro. per.; Murphy, Pearson, Bradley & Feeney,
Harlan B. Watkins -- hwatkins@mpbf.com -- and John P. Girarde --
jgirarde@mpbf.com -- for Objector and Appellant.
Manatt, Phelps & Phillips, Dean J. Zipser -- dzipser@manatt.com --
Benjamin G. Shatz -- bshatz@manatt.com -- Carole E. Reagan --
creagan@kruzlaw.com -- and Adina L. Witzling --
awitzling@manatt.com -- for Defendant and Respondent.
TREX COMPANY: $8.25MM Settlement Gets Preliminary Court Approval
----------------------------------------------------------------
Hagens Berman Sobol Shapiro LLP on Sept. 11 disclosed that a
federal judge on Aug. 27, 2013, granted preliminary approval for
an $8.25 million settlement in a class-action lawsuit brought by
the law firm against Trex Company, Inc. alleging that the nation's
largest manufacturer of wood-alternative decking sold defective
products.
Consumers filed a consolidated complaint on Dec. 3, 2010, after
many claimed that Trex's first-generation, non-shelled wood-
plastic composite decking, railing, and fencing products were
defective and prone to mold spotting and color variation.
Consumers allege that Trex failed to compensate them for the
defective product in violation of warranty and consumer protection
laws.
More information about the proposed settlement is available at
http://www.hbsslaw.com/cases-and-investigations/cases/trex
"We are pleased the judge provided initial approval to the
proposed settlement, which we think is a fair and reasonable
solution to make things right for Trex customers," said
Steve Berman, managing partner of Hagens Berman and one of the
attorneys for the consumers. "This settlement is good news for
the many thousands of consumers who will be eligible to receive
compensation under the proposed settlement."
The certified, nationwide class-action suit includes anyone in the
U.S. or its territories who own Trex decking, railing, or fencing
built with Trex non-shelled products purchased between Aug. 1,
2004 and Aug. 27, 2013.
The Court has set a hearing for final approval on Dec. 13, 2013.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP --
http://www.hbsslaw.com-- represents consumers, workers,
whistleblowers and investors in complex litigation. The firm has
offices in nine cities and has been named one of the top
plaintiffs' law firms in the country by the National Law Journal
six times. Founded in 1993, HBSS continues to successfully fight
for consumer rights in class-action litigation.
UNION BANK: Employees' Overtime Class Action in Calif. Can Proceed
------------------------------------------------------------------
Blumenthal, Nordrehaug & Bhowmik disclosed that on September 11,
2013, the Honorable Judge Peter J. Busch ruled a lawsuit brought
on behalf of Union Bank Service Staff Officers and Customer
Service Managers should be able to proceed as a class action.
This means that all employees who held the above mentioned job
titles will now be able to seek back overtime wages against Union
Bank. The case entitled Mathies, et al. v. Union Bank, N.A., Case
No. CGC-10-498077 is currently pending in the Superior Curt of
California for the County of San Francisco.
The class action lawsuit was filed by the San Francisco Employment
Lawyers at Blumenthal, Nordrehaug & Bhowmik. The class action
complaint, originally filed in March of 2010, alleged that Union
Bank misclassified their Service Staff Officers and Customer
Service Managers as exempt from overtime pay and as a result,
allegedly, did not pay these employees overtime wages, failed to
provide the legally mandated meal and rest breaks, and accurate
wage statements as required by California law.
Under California law, all workers who are classified as non-exempt
employees and paid on an hourly basis are entitled to be paid
overtime wages at one and a half times their regular rate of pay
for all hours worked in excess of eight hours in a workday and
forty hours in a workweek.
Norm Blumenthal, managing partner of Blumenthal, Nordrehaug &
Bhowmik, stated "any other company involved in this alleged
illegal practice of not paying employees overtime wages is
something that needs to be looked at very closely by the
California courts."
The court has certified the following classes in the case:
"All those individuals employed by Defendant Union Bank, N.A. as
Customer Service Managers in California who were classified as
exempt and who worked between March 24, 2006 and July 31, 2013
(the "Class Period")." The Judge's Order certifying the class of
Customer Service Managers can be read here.
"All those individuals employed by Defendant Union Bank, N.A. as
Service Staff Officers in California who were classified as exempt
and who worked between March 24, 2006 and March 27, 2010 (the
"Class Period")." The Judge's Order certifying the class of
Service Staff Officers can be read here.
In the coming months, all individuals who part of the class will
be notified of their rights. If you work in California and are
not being paid overtime wages by your employer call an experienced
San Francisco labor attorney today at Blumenthal, Nordrehaug &
Bhowmik at (415) 935-3957.
The firm dedicates its practice to contingency fee employment law
work for issues involving misclassification as a salaried worker
exempt from overtime, failure to pay vacation wages,
misclassification as an independent contractor, off-the-clock
work, wrongful termination, discrimination and other California
labor laws.
UNION PACIFIC: Faces Class Actions Over Lawtell Train Derailment
----------------------------------------------------------------
Caroline Balchunas, writing for Acadiana's Multi-Media News,
reports that it's been over a month since nearly 20% of Lawtell
residents were forced to evacuate their homes after a chemical
train derailment. Residents are back in their homes, but several
class action lawsuits have been filed from plaintiffs seeking
monetary damages.
Lawsuits are expected after any disaster and the Union Pacific
train derailment is no exception. Three class action suits have
been filed, including one in the hands of attorney
Charles Cravins. Mr. Cravins is representing nearly 200 people
who are seeking damages which may result from the chemical spill.
"Property damage has been done in that area. We don't know how
many farmers and we don't know how much livestock are going to be
impacted or products that are marketed in that area," said
Mr. Cravins.
Last month, the Department of Environmental Quality confirmed the
substances found in water near the site to be lube oil and
dodecanol. While the DEQ says those are not considered toxic,
there are still potential side-effects. News 10 obtained a copy
of research funded by Union Pacific. It claims the chemicals
involved in the spill pose little to no long term harm to humans
or livestock that may have consumed water from the nearby ditches
or Bayou Mallet.
But Mr. Cravins says he doesn't agree with their findings.
"I think that you can expect Union Pacific will paint the rosiest
picture that they possibly can. Is that to say that they're just
going to lie? I would never accuse them of that. But, they're
going to paint the rosiest picture possible," said Mr. Cravins.
The claims range from being inconvenienced by the short evacuation
to millions of dollars in property damage.
"The facts are going to come out," said Mr. Cravins. "Experts are
going to testify and those affected will be made whole."
The case is expected to go to Federal District Court on May 19th.
UNITED STATES: "Kobe" Suit Defendants Get Summary Judgment Ruling
-----------------------------------------------------------------
In an amended complaint filed in KOBE v. HALEY, Plaintiffs seek
actual and punitive damages, and declaratory and injunctive relief
for violations of Title II of the Americans with Disabilities Act,
42 U.S.C. Section 12132; Section 504 of the Rehabilitation Act of
1973; the Medicaid Act; and 42 U.S.C. Sections 1983 and 1985.
Plaintiffs state they are bringing this action as a class action
pursuant to Rule 23, Fed. R. Civ. P. However, the action has not
been declared a class action and, at this time, there has been no
motion filed seeking to certify this action as such.
Defendants Hugh Leatherman and Richard Eckstrom have filed a
motion to dismiss, or alternatively for summary judgment.
District Judge Timothy M. Cain granted the Defendants' Motion for
Summary Judgment, and dismissed Defendants Leatherman and Eckstrom
from the action.
The case is Kobe and Mark, Plaintiffs, v. Nikki Haley, in her
capacity as Governor and Chairman of the South Carolina Budget and
Control Board; Daniel Cooper, Converse Chellis and Mark Sanford,
in their capacities as former members of the South Carolina Budget
and Control Board; Hugh Leatherman and Richard Eckstrom, in their
capacities as members of the South Carolina Budget and Control
Board; Curtis Loftis and Brian White, as members of the South
Carolina Budget and Control Board, Anthony Keck, in his capacity
as the Director of the South Carolina Department of Health and
Human Services, Emma Forkner, in her capacity as the former
Director of the South Carolina Department of Health and Human
Services, Beverly Buscemi in her capacity as Director of the South
Carolina Department of Disabilities and Special Needs, Eugene A.
Laurent, former Interim Director of the South Carolina Department
of Disabilities and Special Needs; Stanley Butkus, former Director
of the South Carolina Department of Disabilities and Special
Needs; Richard Huntress, in his capacity as Commissioner of the
South Carolina Department of Disabilities and Special Needs; Kathi
Lacy, Thomas P. Waring and Jacob Chorey, in their capacities as
employees of the South Carolina Department of Disabilities and
Special Needs, Mary Leitner, in her capacity as the Director of
the Richland Lexington Disabilities and Special Needs Board; the
Babcock Center, Judy Johnson, in her capacity as the Director of
the Babcock Center and other Unnamed Actors Associated with the
Babcock Center, Defendants, C/A NO. 3:11-1146-TMC, (D. S.C.).
A copy of the District Court's August 12, 2013 Opinion & Order
is available at http://is.gd/LX2EI4from Leagle.com.
UNITED STATES: Malpractice Claims Cost Veterans Affairs $91.7MM
---------------------------------------------------------------
Kathleen Miller, writing for Bloomberg News, reports that
Christopher Ellison went to a veterans medical center in
Philadelphia to get eight teeth extracted in 2007. What should
have been a routine dentist visit left him permanently
incapacitated.
The $17.5 million Mr. Ellison and his family received in a
malpractice judgment against the Department of Veterans Affairs
was the largest against the agency in a dozen years -- and one of
more than 400 payments the U.S. government made last year to
resolve VA malpractice claims, according to agency records
obtained through a Freedom of Information Act request. The total
cost came to $91.7 million, also the highest sum in at least 12
years.
The cases against the VA have included missed diagnoses, delayed
treatment and procedures performed on wrong body parts. Lawmakers
and veterans' advocates say they reflect deep flaws in the
agency's health-care system even as the department tends to treat
more former troops, including those who fought in Iraq and
Afghanistan.
A House committee held a hearing in Pittsburgh on Sept. 9 to probe
lapses that include a Legionnaires' disease outbreak at a VA
hospital that killed at least five veterans and that also have led
to malpractice claims.
"The rapid rise in malpractice judgments against VA mirrors the
emerging pattern of preventable veteran deaths and other patient-
safety issues at VA hospitals," said Rep. Jeff Miller, a Florida
Republican and chairman of the House veterans committee holding
the hearing. "What's missing from the equation is not money or
manpower -- it's accountability."
More veterans are taking advantage of VA medical care, including
those requiring more-complex treatment. As many as 1.2 million
additional troops are due to become veterans in the next four
years. Some of the troops from the wars in Iraq and Afghanistan
are suffering post-traumatic stress disorder while others are
living with injuries that would have been fatal in World War II or
the Vietnam War.
The age of recent veterans may be a contributing factor in the
rise of claims payments, said W. Robb Graham, an attorney in
Cherry Hill, N.J., who has represented former troops filing claims
against the agency. Younger claimants tend to get larger
malpractice payouts, often tied to how long victims will suffer,
he said.
The median age range of veterans who served after the Sept. 11,
2001, terror attack in New York and Washington was 25 to 34 years
old, according to a 2011 Labor Department study. That compares
with veterans who served during the World War II, Korean War and
Vietnam eras, whose median age range was 65 and older, the study
said.
"If the VA cuts off the wrong leg of a veteran who is 70 years old
and his life expectancy is 75, he's entitled to five years' of
damages," Mr. Graham said. "If they cut off the wrong leg of a
veteran who is 25, you're now dealing with someone who is entitled
to 50 years' of damages."
The department has 152 hospitals and about 19,000 doctors. Last
year, the VA tended to 5.6 million veterans, a 32 percent increase
from fiscal 2002, according to agency data.
"It's the largest health-care system in the U.S., and they do an
incredible amount of good work," said Jerry Manar, deputy director
of national veterans service at the Kansas City, Mo.-based
Veterans of Foreign Wars. "However, there are so many more things
they could do in terms of oversight that they don't appear to be
doing now. As a consequence, sometimes you wind up with poor
results that were avoidable."
The department is "deeply committed to providing the quality care
and benefits our nation's veterans have earned and deserve," said
Gina Jackson, a VA spokeswoman, in an email. "If employee
misconduct or failure to meet performance standards is found to
have been a factor, VA will take appropriate corrective action
immediately."
The 2012 malpractice payments stemmed from both court judgments
and administration settlements. The payouts, made by the U.S.
Treasury's Judgment Fund, rose 28 percent last year from about $72
million in 2011, VA records showed. Taxpayers have spent at least
$700 million to resolve claims filed against the veterans agency
since 2001, according to the data.
Many valid VA malpractice claims never get paid, said attorney
Graham, who served as a judge advocate general in the Navy in the
1980s. Some are rejected because paperwork isn't filed properly,
he said.
"My strong belief is a lot of lawyers don't know how to sue the
VA," he said.
Some law firms aren't interested in representing people suing the
federal government because of laws that limit attorney fees to 25
percent of malpractice awards, Mr. Graham said.
In a May letter, Ms. Miller asked President Barack Obama to help
address "an alarming pattern of serious and significant patient-
care issues" at VA medical facilities.
The House panel is reviewing the Legionnaires' outbreak in
Pennsylvania and the department's handling of two overdose deaths
and two suicides at an Atlanta veterans hospital. Also under
scrutiny are poor sterilization procedures and possible patient
exposure to infectious diseases such as HIV at VA locations.
The agency isn't holding employees, especially executives,
accountable for preventable deaths, Ms. Miller said. Department
officials also gave bonuses to doctors even if they practiced
without a license or left residents unsupervised during surgery,
according to a Government Accountability Office report last month.
The recipients of $150 million in bonuses to VA health-care
providers in fiscal 2011 included a radiologist unable to read a
mammogram and an emergency-room doctor who refused to see
patients, the report found.
Ms. Miller has said the VA employees should be punished -- not
rewarded -- for their incompetence.
The number of malpractice claims filed with the VA has remained at
1,544 for the past two years, said Ms. Jackson, the agency
spokeswoman. The leveling off came after a 33 percent spike in
cases to 1,670 between 2010 and 2005, according to an October 2011
GAO report.
The VA's malpractice-payment rates may be similar to the national
average, said Anupam B. Jena, an assistant professor at Harvard
Medical School and a physician at Massachusetts General Hospital.
Less than 25 percent of the claims filed against the veterans
agency result in payment, according to the VA. About 20 percent
of malpractice claims filed with the largest insurer of physicians
between 1991 and 2005 resulted in a payment, according to a 2011
study published in the New England Journal of Medicine, said Jena,
who worked on the report.
Last year's "noticeable increase" in medical malpractice payments
was partly due to an "exceptionally large" $17.5 million court
judgment, Jackson said in an email.
That record judgment went to Mr. Ellison, who was honorably
discharged from the Marines in 2001. He was a 49-year-old
electronics technician from Bridgeport, Pa., in 2007 when he
visited the dentist to have eight teeth extracted because of tooth
decay and gum disease.
During the procedure at a VA facility in Philadelphia,
Mr. Ellison's blood pressure dropped several times to "unusually
low" levels, his attorney, Shanin Specter, said during a 2011
trial.
Mr. Ellison wasn't sent to the emergency room, and the dentist
continued with the extractions, said Mr. Specter, son of Arlen
Specter, the former Republican senator from Pennsylvania who died
last year.
Mr. Ellison had a "catastrophic" stroke while driving his car
shortly after leaving the dentist office, Mr. Specter said.
The government argued that the veteran's existing health problems
caused the stroke. Mr. Ellison had a history of smoking,
diabetes, hypertension and many other risk factors, Thomas
Johnson, an assistant U.S. attorney, said during the trial.
After the stroke, Mr. Ellison was left with limited vocabulary and
"severe and pervasive deficits in all mental abilities," according
to court documents.
"He wound up being totally incapacitated, requiring 24- hour-a-day
care," Mr. Specter said, "and that's what the award reflects."
VISA INC: Judge Hears Class Action Settlement Objections
--------------------------------------------------------
Andrew Longstreth, writing for Reuters, reports that a U.S.
federal judge on Sept. 12 heard a diverse parade of objectors
seeking to derail a record $7.2 billion class action settlement he
is weighing between merchants and credit companies Visa Inc. and
MasterCard Inc. over credit card fees.
U.S. District Judge John Gleeson of Brooklyn reserved final
judgment at the conclusion of a roughly 5 1/2-hour hearing, saying
he had been presented with "very important and difficult issues."
His decision could take several months to deliver.
Were Judge Gleeson to approve the deal, it would be the largest
federal antitrust settlement in history.
Merchants first sued Visa and MasterCard in 2005, accusing the two
companies of fixing the fees charged to merchants each time their
customers used their credit or debit cards. They were accused
also of preventing merchants from steering customers to cheaper
forms of payments and other anti-competitive behavior.
Visa and MasterCard have denied the allegations.
Judge Gleeson gave preliminary approval to the settlement in
November 2012. But the deal has been opposed by thousands of
objectors.
In a packed courtroom, Judge Gleeson heard complaints about the
deal from more than a dozen representatives of the objectors,
including retailers Wal-Mart Stores Inc. and Target Corp., the
states of Ohio and California, consumer groups and owners of a gas
station in Minneapolis.
They revived concerns about a litigation release in the settlement
that benefits Visa and MasterCard. The release forces merchants
who accepted Visa or MasterCard as of last November or will do so
at any time in the future to give up their right to sue the credit
card companies over certain rules or similar ones indefinitely.
Stephen Neuwirth -- stephenneuwirth@quinnemanuel.com -- of Quinn
Emanuel Urquhart & Sullivan, an attorney representing Home Depot
Inc., told Judge Gleeson that the provision violated the Due
Process Clause of the Fifth Amendment of the U.S. Constitution.
Mr. Neuwirth argued that Home Depot and other merchants that
object to the deal should be able to "decide for themselves
whether to tie their fate with the class representatives or go it
alone."
With the broad litigation release, Mr. Neuwirth argued that Visa
and MasterCard would be forever protected from lawsuits involving
any of the rules they require merchants to follow.
Kenneth Gallo -- kgallo@paulweiss.com -- of Paul, Weiss, Rifkind,
Wharton & Garrison, an attorney for MasterCard, countered that
rules not predicated on the same facts as the existing rules would
not be covered by the release.
Judge's Concerns Over Releases
But the judge said he had concerns that the release may cover
territory that could not be foreseen. At one point, he asked the
lead counsel for the class plaintiffs, Craig Wildfang --
kcwildfang@rkmc.com -- of Robins, Kaplan, Miller & Ciresi, whether
he viewed the release the same way as the defendants.
"We're close," Mr. Wildfang said.
Mr. Wildfang conceded that he wished the release had "fewer
words," but he said it was the result of a necessary compromise.
Objectors to the settlement also complained that the changes Visa
and MasterCard were required to make as a result of the settlement
would not benefit them.
The settlement allows merchants to surcharge customers who use
Visa and MasterCard in certain situations to try to drive price
competition from the credit card providers. But lawyers for the
objectors noted that more than 10 states prohibited surcharging.
Jeffrey Shinder -- jshinder@constantinecannon.com -- of
Constantine Cannon, an attorney for several objectors including
Amazon.com Inc., said that to certify a mandatory injunctive
relief class in which some merchants would not benefit violated
holdings made by the U.S. Supreme Court in a case known as Wal-
Mart v. Dukes.
During the hearing, Judge Gleeson asked for changes that could be
made to the settlement that would entice some objectors to
participate in the settlement.
But at one point, while hearing objections made by a
representative from 7-Eleven Inc., he voiced frustration. He said
some objectors appeared to be seeking more than what they could
expect to obtain than if they won at a trial.
"To get relief, you've got to win," he said. "A settlement
reflects the uncertainty about the ability to win."
Visa and Mastercard have said they are confident the deal will
receive Gleeson's support.
The case is In Re Payment Card Interchange Fee and Merchant
Discount Antitrust Litigation, U.S. District Court for the Eastern
District of New York, No. 05-1720.
For the plaintiffs (co-lead class counsel): Laddie Montague --
hlmontague@bm.net -- of Berger & Montague; Craig Wildfang of
Robins, Kaplan, Miller & Ciresi; Patrick Coughlin --
patc@rgrdlaw.com -- of Robbins Geller Rudman & Dowd.
For Visa: Robert Vizas -- Bob.Vizas@aporter.com -- of Arnold &
Porter.
For MasterCard: Keila Ravelo -- kravelo@willkie.com -- of Willkie
Farr & Gallagher and Kenneth Gallo of Paul Weiss Rifkind Wharton &
Garrison.
VISA INC: NACS Comments on Settlement Fairness Hearing
------------------------------------------------------
NACS President and CEO Henry Armour delivered testimony on
Sept. 13 before U.S. District Judge John Gleeson in Brooklyn, New
York at the fairness hearing to consider granting approval to a
proposed settlement of a long-standing antitrust class action
filed by merchants against Visa, MasterCard and the largest banks.
The hearing is the latest contentious step in moving forward the
proposed settlement of longstanding antitrust litigation between
merchants and the credit card industry proposed settlement of the
case, which is known as "In Re Payment Card Interchange Fee and
Merchant Discount Antitrust Litigation." NACS expressed its
opposition to the terms of the proposed settlement on the day that
it was announced in July 2012. Following are Mr. Armour's
remarks:
"NACS and the majority of the named plaintiffs have filed
objections to the settlement. NACS has opted out of the monetary
portion of it. We have also filed a response to correct
inaccuracies in a recent declaration from class counsel.
From the beginning of this litigation, our principal concern has
been to obtain meaningful reforms of the credit card market to
restrain the undue market power being used to set fees.
Anti-competitive practices have resulted in our industry paying
more in card fees than it makes in pre-tax profits every year
since 2006. The vast majority of our industry is made up of small
businesses. In fact, 60% are single store operators. Because our
industry pays such huge fees, $11.2 billion in 2012, NACS has had
thousands of conversations with our members about interchange fees
and discussed the problems and potential solutions in depth.
This settlement, unfortunately, ignores the views of NACS, the
majority of named plaintiffs and other merchants including NACS'
30-member board of directors made up of small and large retailers
from around the country. We raised our concerns early and often,
and we have now been joined by merchants far and wide. The
primary rules relief in the settlement, surcharging, is completely
unworkable because of negative consumer reactions to surcharging,
state laws that prohibit it, and the level-the-playing field
provisions. Most telling is the fact that since February when
retailers have had the ability to surcharge under the settlement
there has been virtually no movement in that direction. That is
compelling evidence that the ability to surcharge has no value to
the class.
Further this settlement has the potential to make things much
worse by giving the Defendants an incredibly broad release of
claims for future bad conduct.
This settlement is worse than losing at trial.
Losing would not bar the courthouse door to merchant challenges to
future unfair card industry practices including current bad
practices being applied to new technologies like mobile payments.
The settlement provides nothing of any real value beyond the
money. And the scope of the release will allow the Defendants to
raise rates and recoup the money before it is even distributed to
merchants, which is precisely what happened in the Visa check
case.
We strongly urge the Court to reject this settlement."
WATERLOGIC COMMERCIAL: Recalls Water Cooling, Heating Systems
-------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
Waterlogic Commercial Products, LLC, of Omaha, Neb., announced a
voluntary recall of about 48,000 chiller-based water dispensers.
Consumers should stop using this product unless otherwise
instructed. It is illegal to resell or attempt to resell a
recalled consumer product.
The hot water tank can stop functioning and cause the machine to
overheat, posing a fire hazard.
Waterlogic received 16 reports of fire and smoke within the water
dispensers. No injuries or property damage have been reported.
Chiller-based water filtration systems provide hot and cold water
dispensers for home and workplace. The units come in three sizes,
18, 40 and 48 inches high, and in white, black or stainless steel.
One of the following brand names is printed on the front of the
unit: AquaMark, Coolersmart, Culligan, Innowave, Waterlogic and
Xstream Water. Recalled products have serial numbers printed on a
label on the back of the machines.
Pictures of the recalled products are available at:
http://is.gd/jBgKUL
The recalled products were manufactured in China and sold at
distributors and dealers, including AquaPure Water Systems,
Culligan, CWC, Farmer Brothers, Filterfresh, First Choice Services
and others selling water and coffee systems nationwide from
January 2005 to December 2008 for approximately $500 to $1500.
The units are sold to dealers and leased to consumers.
Waterlogic is contacting its distributors and providing a list of
affected units and all technical instructions and necessary parts
for repairing the units. Consumers who have not been contacted by
their distributer for a free repair should contact Waterlogic.
WESTERN HEALTH: Clerk Removed as Defendant in Privacy Class Action
------------------------------------------------------------------
Diane Crocker, writing for The Western Star, reports that the
woman alleged to have inappropriately accessed the files of over
1,000 people while employed as a clerk with Western Health at
Western Memorial Regional Hospital in Corner Brook has been
removed as a defendant in a class-action lawsuit over the privacy
breach.
That leaves Western Health as the sole defendant in the matter.
Lawyers for all sides met in Supreme Court in the city on Sept. 12
for a case management meeting with Justice William Goodridge.
Following the meeting, Scott Burden --
sburden@brothersandburden.com -- of Brothers and Burden Law Office
said Donna Colbourne's removal was really for the purpose of
convenience.
"Both the plaintiffs and the current defendant, Western Health,
decided to do what might make the action more efficient in terms
of the procedure," he said. "We allege that she is vicariously
liable as an employee acting on behalf of an employer anyway, so
to name her individually was not necessary."
While Ms. Colbourne, who was fired from her job after the breach
was discovered, was represented by counsel, who appeared via
telephone, in court, Mr. Burden expects they will just move on.
The case management meeting was set to update all involved on the
progress of the case.
Originally, the court was asked to consider two class-actions, one
brought forward by Brothers and Mr. Burden and the second by St.
John's lawyer Bob Buckingham. Both of those have now been
consolidated and Buckingham will act as lead counsel on the case.
With that process complete Justice Goodridge scheduled a
certification hearing for the matter for Dec. 4 and 5. He gave
Buckingham until Oct. 18 to file the necessary paperwork for the
hearing and lawyers for Western Health have until Nov. 8 to file
any affidavits or briefs.
Meanwhile, Ms. Colbourne's legal issues surrounding the June 2011
to May 2012 breach are not over yet. She's been charged with
violating the Personal Health Information Act by the Office of the
Information and Privacy Commissioner and is expected to enter a
plea on that charge when she appears in provincial court on
Nov. 29.
ZUNGUI HAIXI: Bennett Jones Discusses Class Action Settlement
-------------------------------------------------------------
Michael A. Eizenga, Esq. -- eizengam@bennettjones.com -- Rebecca
Huang, Esq. -- huangr@bennettjones.com -- and Christiaan A.
Jordaan, Esq. -- jordaanc@bennettjones.com -- at Bennett Jones
report that on August 27, 2013, Justice Perell of the Ontario
Superior Court of Justice released a decision in Zaniewicz v
Zungui Haixi Corporation approving a class action settlement, but
which varied the proposed plan of distribution based on a class
member's objections. Justice Perell had sufficient leeway to make
the modifications because the settlement was not conditional upon
approval of the particular plan of distribution proposed by class
counsel. Furthermore, the defendants were largely indifferent to
the issue as the settlement was for a fixed amount that would not
revert to them in any circumstances. While these facts limit the
potential significance of the decision for other types of
settlements, the case is still notable because Justice Perell held
that it would not be "fair and reasonable" to release the claims
of some class members who had suffered damages without including
those persons in the distribution of benefits.
The case involved Zungui securities that were listed on the TSX
Venture Exchange following an IPO in December 2009. On August 22,
2011, the Zungui shares dropped 77 percent in value after Zungui
announced that Ernst & Young (E&Y) had suspended its audit of the
company's 2011 financial statements. Before the opening of trading
on the following day, the shares were cease-traded and never
traded again.
Additional disconcerting facts came to light thereafter. On
September 22, 2011, Zungui's chief financial officer and all
independent members of the board of directors resigned, in part
because they felt the investigation into E&Y's concerns was being
stymied. The following day, E&Y resigned as the company's auditor
and advised that all its prior audit opinions could no longer be
relied upon.
One of the key issues for the class action commenced in respect of
these facts was the division of compensation as between different
groups of purchasers. The proposed class included those who had
purchased the Zungui shares in the IPO, those who received Zungui
shares prior to the IPO in exchange for securities of a
subsidiary, and those who purchased Zungui shares in the secondary
market. In order to determine a fair distribution as between
these three groups, the plaintiffs conducted extensive
negotiations in which each group was separately represented by
counsel. The result was a complex scheme that would determine
compensation to class members based on: (i) the particular group
to which a class member belonged; (ii) when the Zungui shares were
acquired or sold; and (iii) the net loss suffered by the class
member.
Notably, the proposed plan of distribution would have provided no
compensation to class members who purchased shares after Zungui's
disclosure that E&Y was suspending its audit. However, the
settlement would have released any claims that those purchasers
would have otherwise had against the defendants.
Like all class members, persons who purchased Zungui shares on
August 22, 2011, had the opportunity to opt-out of the settlement.
However, one class member who bought a significant block of Zungui
shares on August 22, 2011, chose instead to challenge the fairness
of the plan of distribution at the settlement approval hearing.
The shareholder argued that the August 22, 2011, disclosure did
not tell shareholders enough to correct all prior
misrepresentations:
While it is true that the announcement indicated that Ernst &
Young suspended procedures until Zungui "clarifies and
substantiates its position with respect to issues pertaining to
the current and prior year" this does not clearly foreshadow the
events that followed, which turned out to be devastating to the
investors who held the stock and represented a "worst case
scenario"[.]
These submissions proved to be persuasive, as Justice Perell
ultimately modified the distribution plan in accordance with the
objector's suggestions. In particular, Justice Perell held that it
was inappropriate to include August 22, 2011, purchasers in the
class (to provide the defendants with a broad release) but prevent
them from obtaining any benefits:
Notwithstanding that it was the Defendants who urged that these
purchasers be included as Class Members as part of the bargaining
for the settlements, once Class Counsel and the Representative
Plaintiffs agreed to the joinder of these Class Members, it was
unfair and inappropriate for Class Counsel and the Representative
Plaintiffs to advocate a theory of the case that August 22, 2011
purchasers were not eligible for any compensation at all.3
Accordingly, Justice Perell included August 22, 2011, purchasers
in the plan of distribution, but discounted their claims for the
increased investment risk.
Although the modifications to the distribution plan in Zungui will
likely have a minor impact on the compensation payable to other
class members, the decision does raise questions for future cases
-- particularly for cases where a judicial modification could have
a greater effect on other class members.
For example, unlike most class action settlements in Canada, the
right to opt out of the Zungui settlement expired before the
settlement approval hearing. In making the decision whether to
opt, class members in Zungui could have considered whether the
compensation available through the settlement was greater than
that available by bringing an individual claim. An objector who
successfully challenges the fairness of a proposed distribution
plan in a case that proceeds similarly may undermine the value of
other class members' opt-out rights by changing the benefit
calculus after the fact. It is an open question whether fairness
would dictate that affected class members be provided with further
notice and an opportunity to object to the modified plan.
A further problem could arise in cases where the total quantum of
the settlement is small, but the class to be certified includes
many members with nothing more than nuisance-value claims.
Defendants are not likely to settle unless the claims are
released, but the inclusion of those claims in the plan of
distribution may dilute the settlement to the point that it risks
not being approved.
While the likely reach of the Zungui decision is limited, further
guidance from the courts may be necessary where judicial
modification of a distribution plan raises these kinds of
collateral fairness concerns.
* Australia's Coalition Govt Needs to Address Class Action Issues
-----------------------------------------------------------------
Jason Betts, writing for The Australian, reports that the incoming
Coalition government faces the challenge of addressing the burden
on Australian businesses, which increasingly are the target of
class actions. Shareholder class actions alone reportedly
accounted for $480 million of settlements last year.
The previous government's refusal to regulate the deepening third-
party funding industry has allowed the proliferation of class
action claims which are becoming increasingly expensive for
corporate Australia to defend.
Promoters of class actions argue that this should be celebrated
because it demonstrates increased access to justice for "mum and
dad" consumers exploited by the big end of town.
That ignores the fact that the growth in class actions is driven
by profit, not simply the vindication of legal rights. This is
precisely why most shareholder class actions exclude retail
investors and focus on recovery for major institutions with
significant resources.
Also forgotten is the question of what Australian consumers and
investors are actually recovering from class action litigation
after the litigation funders and lead-plaintiffs' lawyers extract
their 25 per cent to 40 per cent in commissions and fees.
What then, are the major policy challenges to be addressed by the
Coalition? We think there are four.
First, should third-party funders be required to hold a license
and maintain basic capital requirements, similar to promoters of
managed investment schemes?
The last government expressly exempted funders from that
requirement, despite support for licensing from Australia's
largest class-action funder, IMF.
Licensing is a good idea because a healthy funding industry
requires funders with sufficient assets to support the costs
immunity they grant to claimants and to meet adverse costs orders
should the class action fail.
This is important because respondents are often faced with the
high costs of defending the action but limited recourse to
recovering those expenses.
Those who have defended a class action know that security for
costs only ever addresses a small fraction of the total costs and
foreign funders may have no real asset presence in the
jurisdiction.
Equally important are the questions around the independence of
funders, their lawyers and the claimants to whom they owe
fiduciary duties.
A licensing regime would better address the potential conflicts of
interest, for instance, between a funder's commercial priorities
in settling for a profitable sum and claimants' interests in
proceeding to judgment.
Second, should plaintiffs' law firms be permitted to establish
their own funding businesses? The most recent development in the
funding landscape is the establishment of Claims Funding
Australia. CFA's beneficiaries are the principals of plaintiffs'
law firm Maurice Blackburn.
It is proposing to co-fund several current class actions in the
Federal Court, which has yet to approve the arrangement. The court
is grappling with the potential for conflict between Maurice
Blackburn's fiduciary duties to its clients and its business
interests in funding their claims.
This is an issue worthy of policy debate and possibly regulation
by the new government.
Third, how should the new government approach the growing demand
for contingency fee arrangements?
A recent report of the Law Society of NSW recommended the
introduction of contingency fees in that state. Much support
comes from plaintiffs' lawyers, who are unsurprisingly enticed by
the prospect of receiving a large percentage of whatever they
recover for their client. The debate around contingency fees
rarely addresses the unsavory possibility of lawyers being driven
to settle or maintain claims for their own interests rather than
their clients. Yet these are precisely the issues raised by
third-party funding and the debate deserves to be a national one
where a uniform approach is taken.
If there is a government prepared to accept the risk of
contingency fees spiking the levels of class actions (and other
litigation), regulation will still be necessary to determine the
amount and method of charging and basis for advertising the
contingency fee.
Fourth, is there potential for reform of insurance funding
arrangements? The legal market appears to be revisiting the use of
"after the event" (or ATE) legal expenses insurance to fund class-
action insurance. This type of insurance is designed to cover a
claimant's legal costs and any adverse costs order should their
claim fail.
The legal expenses insurer will carry out a review of the claim,
typically including an independent assessment of prospects, to
determine the level of premium. The claimant ordinarily seeks to
recover the premium from the defendant if successful.
The policy can provide for a contingent premium, or at times an
"uplift premium", which only becomes payable if the claimant
succeeds. In addition, the insurer will usually negotiate a
fixed- or capped-fee arrangement with the claimant's lawyers to
limit its exposure to costs.
This model has a great deal in common with the model adopted by
litigation funders, and raises similar issues, particularly where
overseas insurers are involved.
The British government, as part of the Jackson reforms on
litigation costs this year, has legislated to prevent claimants
from recovering ATE insurance premiums from defendants. The
British approach could serve as an example if the new government
considers reform.
This is the perfect time for a fresh approach to class action and
funding regulation.
Coalition legal affairs spokesman George Brandis has already
foreshadowed a greater level of regulatory scrutiny for the class-
action industry in this country and, with the Coalition's mandate,
it may be time for an Australian government to have the courage of
its convictions.
The developments in third-party funding have made class actions
easier to prosecute, but this should not come at the expense of
sensible regulation now, before the cost of class actions becomes
a burden most Australian businesses can no longer bear.
*********
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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The CAR subscription rate is $775 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact
Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
* * * End of Transmission * * *