/raid1/www/Hosts/bankrupt/CAR_Public/131014.mbx
C L A S S A C T I O N R E P O R T E R
Monday, October 14, 2013, Vol. 15, No. 203
Headlines
AMAG PHARMA: High Court Denies Petitions for Writ of Certiorari
ALCO STORES: Facing Class Suit in Kansas Over Merger Agreement
APPLE INC: Must Show Cause Why "Hilton" Suit Should Not be Moved
BAYER: Thousands of Women Suffer Pelvic Pain From Essure Device
BELMONT MEATS: Recalls Frozen Beef Burgers Over E. Coli Risk
BERKSHIRE HATHAWAY: Allegedly Delays, Denies Asbestos Claims
BLUE DIAMOND: Bid to Dismiss "Werdebaugh" Suit Denied
BP EXPLORATION: Dismissal of Suit vs. Claims Administrator Upheld
CHILDREN'S WISH: Gives Only Little Funds to Needy Kids, Suit Says
CR BARD: Agrees to Settle One of Vaginal-Mesh Injury Cases
CSL: Settles Price-Fixing Class Action for $64 Million
DAIMLER AG: Recalls 9 Business Class M2 Model Trucks
DELL INC: Forced 401(k) Plan Members to Sell Shares, Suit Claims
DISTRICT OF COLUMBIA: Class Certification Bid in "Fox" Suit Denied
DOMINO'S PIZZA: Attorney's Fees Reduced in FCRA Suit Settlement
EAST RAMAPO: Judge Allows Key Claims in Class Action to Proceed
FACEBOOK INC: Norton Rose Discusses Class Action Ruling
FEDEX CORPORATION: 19 Cases Remain Stayed Pending Court Decision
FIRST AMERICAN: Unaccepted Judgment Offer Did Not Moot Claims
FRED DEELEY: Recalls 20 Tri Glide Ultra Model Motorcycles
FRIGIDAIRE: Recalls Blenders Over Laceration Hazard
GENERAL MOTORS: Recalls 2,575 Sierra and Silverado Model Vans
GEORGE BROWN: Gowling Lafleur Discusses Class Action Ruling
GLOBE UNIVERSITY: 3 Sioux Falls Residents Join Class Action
HANKOOK: Recalls 97 DYNAPRO MT LT325/60R18 Model Tires
HARTFORD CASUALTY: 7th Cir. Reverses Remand Order in Addison Suit
HITACHI AUTOMOTIVE: Faces Suit After Price-Fixing Guilty Plea
HOUSEHOLD INT'L: Loses Motion for New Class Action Trial
INTERGROUP CORP: Subsidiary Agreed to Settle Suit for $525,000
INTUIT INC: Gets Final Approval of Settlement in Customers' Suit
LEGZ CLUBS: Plaintiffs' Lawyers Get $138,000 From Settlement
LEIGHTON HOLDINGS: Disputes Class Action Over Kickback Claims
LUNA TRADING: Recalls Certain Kujawianka Raisins in Chocolate
M&M TWINS: CFIA Recalls Certain MD Pineapple Marmalade
MACK: Recalls 113 CXU and GU Models Trucks
MACK: Recalls 61 Multiple Vehicle Models
MAZDA: Recalls 161,400 Midsize Cars Over Door Latch Defect
MCKESSON CORP: Dist. Court Stays Proceedings in "Ashley" Suit
MEADOWBROOK INSURANCE: Extends Class Period in Class Action
NAT'L FOOTBALL: Terry Bradshaw Comments on Concussion Class Action
NEW ELK COMPANY: "Gerard" Suit Plaintiffs May Amend Complaint
NEW ENGLAND COMPOUNDING: Steriod Compensation Process Complex
NORMA'S WHOLESOME: Recalls Banana Bread and Cookies
NORVELL SKIN: Recalls Tanning Products Over Misleading Labels
NUTREX RESEARCH: Accused of Falsely Advertising Efficacy of Niox
REXFORD INDUSTRIAL: Berger & Montague, Kreindler File Class Action
RUAN TRANSPORT: "Williams" Suit to be Remanded to State Court
SAN FRANCISCO UNIFIED: Court Nixes Jurisdiction in "Lopez" Suit
SANTA CRUZ NATURAL: Scheduling Order Entered in "Swearingen" Suit
SENTINEL OFFENDER: Mantooth to Serve as Class Representative
ST. GEORGE, UT: Attorney Mulls Class Action Over Ordinances
STANFORD INT'L: Supreme Court Hears Ponzi Class Action Arguments
SYKES ENTERPRISES: Court Grants Conditional Class Certification
YAHOO! INC: Eavesdrops Upon Users' Communications, Suit Says
ZOLTEK COMPANIES: Sells Itself Too Cheaply to Toray, Suits Claim
*********
AMAG PHARMA: High Court Denies Petitions for Writ of Certiorari
---------------------------------------------------------------
Daniel Wilson, writing for Law360, reports that the U.S. Supreme
Court on Oct. 7 refused to hear an appeal of the First Circuit's
revival of a putative class action accusing AMAG Pharmaceuticals
Inc. and its bank underwriters of misleading investors about the
risks associated with its iron deficiency treatment Feraheme.
In a brief order, the high court denied AMAG's petitions for writ
of certiorari without comment, but noted that Justice Samuel Alito
took no part in the decision.
The investors, led by Silverstrand Investments LLC, Safron Capital
Corp. and Briarwood Investments Inc., filed the suit in March 2010
after reports of serious adverse reactions to Feraheme arose soon
after a January 2010 stock offering that allegedly caused AMAG's
stock price to plummet.
The plaintiffs accused AMAG, several of the company's officers and
directors and its underwriters -- Morgan Stanley & Co. Inc., JP
Morgan Securities Inc., Goldman Sachs & Co., Leerink Swann LLC,
Robert W. Baird & Co. Inc. and Canaccord Genuity Inc. -- of
omitting material facts about the risks of Feraheme in the
offering documents.
Feraheme, AMAG's brand name for ferumoxytol, is an injection used
to treat anemia in patients with chronic kidney disease. The drug
was launched in the U.S. in July 2009.
In January 2010, AMAG sold 3.6 million shares of common stock at
$48.25 per share for net proceeds of $174 million. But after the
reports of serious adverse reactions emerged, AMAG's stock price
declined 24 percent by early February 2010.
In November 2010, AMAG reached an agreement with the U.S. Food and
Drug Administration to update Feraheme's label to include
information about the observed risks and to advise doctors to
watch for signs of hypersensitivity after patients received the
drug. By that time, AMAG's share price had spiraled down 71
percent since the January offering.
U.S. District Judge Nathaniel M. Gorton threw out the case in
August 2011, saying although AMAG knew of at least 23 instances of
severe reactions to Feraheme that occurred after the drug was
launched but before the stock offering, that fact alone was not
sufficient since it did not constitute a known trend or
uncertainty meriting disclosure.
Furthermore, the 23 adverse events, which included life-
threatening hypersensitivity reactions and clinically significant
hypotension, "were consistent with the previously and publicly
disclosed rates observed in the clinical trial," Judge Gorton
held.
The offering documents already contained extensive disclosures of
the risks associated with Feraheme, including data from the
clinical trials and how adverse reactions might impair the drug's
success, according to Judge Gorton.
The First Circuit, however, revived the suit in February, ruling
the investors had made a reasonable claim that AMAG had failed to
disclose relevant information on those risks.
According to a three-judge panel, the investors had made a
plausible claim that AMAG had wrongly failed to tell investors
about the serious post-market adverse reactions to the drug in
offering documents for the 2010 stock offering.
"Taking the [investors'] factual allegations as true, we have no
trouble drawing the reasonable inference that before the offering,
AMAG knew that a death, two life-threatening reactions, and 14
hospitalizations would have been relevant to consumers when
deciding whether to use Feraheme, as opposed to another proven and
safer alternative," the panel said.
Representatives for the parties could not immediately be reached
for comment on Oct. 7.
The investors are represented by Mitchell M.Z. Twersky --
mtwersky@aftlaw.com -- of Abraham Fruchter & Twersky LLP.
AMAG is represented by John C. Dwyer -- dwyerjc@cooley.com -- of
Cooley LLP.
The case is AMAG Pharmaceuticals Inc. et al. v. Silverstrand
Investments et al., case number 12-1457, in the U.S. Supreme
Court.
ALCO STORES: Facing Class Suit in Kansas Over Merger Agreement
--------------------------------------------------------------
On September 3, 2013, a class action petition was filed in the
Third Judicial District Court of Kansas, challenging the actions
causing Alco Stores, Inc., to enter into a Merger Agreement,
according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarterly period ended
August 4, 2013.
Alco Stores, Inc. is engaged in the business of retailing general
merchandise throughout the central portion of the United States of
America through a range of department store outlets. The Company's
ALCO stores offer a range of merchandise consisting of
approximately 35,000 items, including automotive, commodities,
crafts, domestics, electronics, furniture, hardware, health and
beauty aids, housewares, jewelry, ladies', men's and children's
apparel and shoes, pre-recorded music and video, sporting goods,
seasonal items, stationery and toys. As of February 3, 2013, the
Company operated 217 stores in 23 states located in mostly smaller
communities in the central United States. The stores average
approximately 21,000 square feet of selling space, with an
additional 5,000 square feet utilized for merchandise processing,
temporary storage and administration.
APPLE INC: Must Show Cause Why "Hilton" Suit Should Not be Moved
----------------------------------------------------------------
Plaintiff Debra Hilton filed the putative class action against
Apple Inc. on May 10, 2013, alleging that Apple's iPhone 4
contains a latent defect which causes the power button on the
phone to stop working. Before the Court are three motions:
Defendant's Motion to Dismiss And/Or Strike Complaint, Defendant's
Motion to Dismiss, or in the Alternative Stay Proceedings in Favor
of First-Filed Action, and Defendant's Motion to Compel
Arbitration of Claims and to Stay.
In an October 1, 2013 Order available at http://is.gd/BWzt7Mfrom
Leagle.com, District Judge Edward M. Chen held that the first-to-
file rule applies and that the case of Missaghi v. Apple, Inc., et
al., No. 13-CV-2003-GAF, before the Central District of California
is the earlier filed action. Although Apple has only moved to have
the Hilton action dismissed or stayed in favor of the Missaghi
action, the parties are ordered to show cause why the Hilton
action should not be transferred to the Central District of
California. Because the Court finds that the first-to-file rule
applies, the Defendant's other motions are denied as moot, said
Judge Chen.
The case is DEBRA HILTON, on Behalf of Herself and All Others
Similarly Situated, Plaintiff, v. APPLE INC., Defendant, NO. C-13-
2167 EMC. (N.D. Calif.).
BAYER: Thousands of Women Suffer Pelvic Pain From Essure Device
---------------------------------------------------------------
CBSLA.com reports that a Ventura County mother of two says a
permanent contraception device called Essure has caused her and
thousands of other women excruciating pain.
"I was literally walking around hunched over holding onto my
stomach for three weeks out of the month," Tanya Lovis said. "The
pain was just too much to bear."
For 10 months, doctors were mystified by Ms. Lovis' symptoms:
"excruciating pelvic pain, sharp stabbing pains in my left and
right side, I started bleeding very heavily and I would literally
vomit from the spinning sensation."
"My body was telling me something was wrong," the mother said.
Ms. Lovis began researching online and discovered approximately
1,800 women on Facebook who also had opted for Essure and were
experiencing similar symptoms.
Back in December 2011, Ms. Lovis decided she didn't want any more
children and visited Planned Parenthood to discuss permanent
contraception. They offered her Essure, which claims to be less
invasive and more effective than having the Fallopian tubes tied.
A pair of coils are inserted into a woman's Fallopian tubes,
prompting tissue to grow around the coils and seal the tubes.
Essure does not require surgery.
"They said you'll have a little bit of cramping afterwards and you
can go back to work tomorrow. Clearly these things did something
to me and I knew it," Ms. Lovis said.
A different doctor recently performed a pelvic exam on Ms. Lovis
and told her radical surgery was needed. After a full
hysterectomy, which included the Essure coils, Ms. Lovis says all
her painful symptoms have disappeared.
"Oh, I feel amazing. I feel like a new woman. I feel like
they've replaced my body with another woman's body," Ms. Lovis
said.
Consumer advocate Erin Brockovich says the amount of emails she's
received about Essure have raised a red flag.
"I started a website and was actually very overwhelmed how quickly
it built from 50 to a couple 100 to now thousands of stories of
women throughout the United States, and by the way in Europe as
well, who were experiencing the same problems," Ms. Brockovich
said.
Dr. Amanda Yunker, a gynecologist at Vanderbilt University, thinks
Essure is safe.
"It has very few complications. It's an excellent alternative for
permanent contraception when you compare it to something like
laparoscopic tubal ligation," said Dr. Yunker, who specializes in
pelvic pain.
Bayer, the parent company of Essure, says 750,000 women worldwide
have used the device but Dr. Yunker acknowledges it's not for
everyone.
"And then when I started taking them out and found that their pain
resolved, then we realized that, yes, Essure can cause pain in a
small subset of patients," the gynecologist said.
Dr. Brockovich said she's frustrated that when the Food and Drug
Administration approved Essure in 2002, it gave what's known as
preemption status, meaning women who experience negative symptoms
can't sue the company that makes it.
"This is a law that will protect the company and if the product's
defective, the people who've been harmed by it basically have no
recourse," Ms. Brockovich said. "That's not fair."
Ms. Brockovich is trying to collect 5,000 signatures on her
website from women who've had problems with Essure, hoping it will
make lawmakers reevaluate the device's preemption status.
Bayer says Essure has been reviewed favorably in hundreds of
publications. The company issued the following statement:
"At Bayer, we care about patients and take the safety of our
products very seriously. We are saddened to hear of any serious
health condition affecting a patient using one of our products,
irrespective of the cause. Essure was approved by the FDA in
2002, and has a well-documented benefit-risk profile, with over
400 peer-reviewed publications and abstracts supporting Essure's
safety, efficacy and cost-effectiveness. Approximately 750,000
women worldwide rely upon the Essure procedure for permanent birth
control. A recent practice bulletin issued by the American
College of Obstetricians and Gynecologists (ACOG) has recognized
that hysteroscopy tubal occlusion for sterilization has high
efficacy and low procedure-related risk, cost, and resource
requirements.
"No form of birth control is without risk or should be considered
appropriate for every woman. It is important that women discuss
the risks and benefits of any birth control option with their
physicians."
BELMONT MEATS: Recalls Frozen Beef Burgers Over E. Coli Risk
------------------------------------------------------------
Starting date: October 8, 2013
Type of communication: Recall
Alert sub-type: Updated Health Hazard Alert
Subcategory: Microbiological - E. coli O157:H7
Hazard classification: Class 1
Source of recall: Canadian Food Inspection Agency
Recalling firm: Belmont Meats Ltd.
Distribution: National
Extent of the product
distribution: Retail
The public warning issued on October 2, 2013 has been updated to
include additional products.
The Canadian Food Inspection Agency (CFIA) and Belmont Meats Ltd.
(Est. 112) are warning the public not to consume the beef burgers
because they may be contaminated with E. coli O157:H7.
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 or best before dates as the
food safety investigation at this facility continues.
The manufacturer, Belmont Meats Ltd., Toronto, Ontario, is
voluntarily recalling all affected products from the marketplace.
The CFIA is monitoring the effectiveness of the recall.
Affected products:
Brand name Common name Size UPC
---------- ----------- ---- ---
Compliments Super 6 8 x 170 g 0 55742 34129 4
Beef Burgers (6 oz)/1.36 kg
President's Choice Beef Burgers 4.54 kg 0 60383 37167 8
Webers Bucket Beef Burgers 1.02 kg 6 27843 06456 5
of Burgers
BERKSHIRE HATHAWAY: Allegedly Delays, Denies Asbestos Claims
------------------------------------------------------------
Mark Greenblatt, writing for Scripps News, reports that for
months, mysterious white flakes and construction dust fell on
Nancy Lopez's desk in the Jackson County Courthouse in Kansas
City, Mo.
No question the debris was worse after renovation crews worked the
weekend. But really, the mess was getting out of hand. On that
Monday in 1983, Ms. Lopez grabbed a rag and started dusting.
The impeccably dressed young administrative assistant finished
tidying her office and set to work. Unknowingly, she had brushed
off her desk, into the air and into her lungs deadly asbestos
fibers.
Those tiny fibers stayed with Lopez for decades, and, in 2009, at
age 54, she learned she was dying from mesothelioma, an asbestos-
caused cancer. She sued the construction company and the county
for negligence and punitive damages.
Ms. Lopez didn't realize her suit would eventually pit her against
the empire built by acclaimed investor and philanthropist Warren
Buffett. Mr. Buffett's Berkshire Hathaway Inc. of Omaha, Neb.,
has become one of the most powerful forces in asbestos and
pollution litigation in the world.
Berkshire's reach has grown so vast that if you or a loved one
files an asbestos- or pollution-related lawsuit in America, like
Lopez, you're likely to encounter a Berkshire subsidiary.
Scripps interviewed more than 20 sources -- some confidential --
reviewed dozens of lawsuits and spoke with former insiders, who
all allege the Berkshire-owned companies that handle its asbestos
and pollution policies -- National Indemnity Co. and Resolute
Management Inc. -- wrongfully delay or deny compensation to cancer
victims and others to boost Berkshire's profits. In multiple
cases, courts and arbitrators have ruled that the Berkshire
subsidiaries' tactics have been in "bad faith" or intentional.
Through 25 known deals, insurers like American Insurance Group,
CNA Financial Corp. and Lloyd's of London have paid Berkshire to
assume their risk for tens of billions of dollars in future
asbestos and pollution claims.
"I do believe we have the largest single exposure to asbestos and
pollution claims of any insurer today," Berkshire Hathaway
Reinsurance Division President Ajit Jain told Scripps via email.
He and Warren Buffett declined repeated requests for interviews.
Until Berkshire has to pay those claims, it can invest and
potentially profit from the money. And it gets to decide when
claims get paid.
Ms. Lopez's attorney Louis Accurso said the number of policies
Berkshire's subsidiaries control could create a dangerous amount
of influence over payouts to victims like his client.
"Whenever there is a concentration of power like that you have
enormous potential for abuse," Mr. Accurso said.
Asbestos defendants often drag out court proceedings, Mr. Accurso
said -- a strategy he called "delay, deny until they die."
Juries, for their part, often award more money to sympathetic
victims they can actually see on the stand.
Nancy Lopez died before insurers controlled by Resolute "made a
single offer," Mr. Accurso said. Like many mesothelioma victims,
Ms. Lopez succumbed just 18 months after her diagnosis.
"Of all the cases in my career, what happened and how that played
out . . . gave me the most anger I can ever remember," said
Mr. Accurso, who also delivered Ms. Lopez's eulogy.
Dozens of large corporations are angry, too.
Ford Motor Co., Estee Lauder Inc. and others allege wrongdoing by
Berkshire-owned National Indemnity and Resolute. These companies
bought commercial policies to protect against long-term claims for
pollution and health-related problems linked to their products or
services. They're suing for reimbursement of fines, legal fees
and payments of injury claims.
The idea of "float" is at the core of Berkshire's overall success.
In short, float is the money an insurance company gets to hold
between the time customers pay premiums and the time they make
claims on their policies.
And it is something that Warren Buffett celebrates in his well-
known annual letters to shareholders.
In his 2009 message he wrote: "Our float has grown from $16
million in 1967, when we entered the business, to $62 billion at
the end of 2009." By 2012, that number had grown to $73 billion.
Part of the growth has come from asbestos and pollution liability.
Fifteen years ago, Berkshire started acquiring those policies
because they offer so-called "long-tail float." Asbestos and
pollution policies take a long time to pay out because the hazards
they cover cause cancer and other illnesses that can take years or
even decades to manifest. That allows Berkshire's money to stay
invested longer and potentially generate bigger returns.
In 2011, Mr. Buffett wrote to shareholders: "We will profit just
as we would if some party deposited $70.6 billion with us, paid us
a fee for holding its money and then let us invest its funds for
our own benefit."
It is this long-term float that is raising concerns.
As a former claims executive, Robert Burns took his orders from
Resolute. In August of this year, he testified in Estee Lauder's
ongoing New York lawsuit that Resolute routinely based claims-
payment decisions on the company's financial goals, not the merits
of each case.
Mr. Burns declined an interview. But Scripps exclusively obtained
a copy of the recent video deposition in which Mr. Burns said
under oath Resolute President Thomas Ryan set "targets" that were
tracked by Berkshire executives.
"The entire operation was driven by the target numbers," Burns
testified. "They wanted to hit the projected numbers in the books
of business so they could maximize their return on investment."
Mr. Burns said company targets and projections ran 20 to 25 years
into the future, designed for Berkshire to ensure its rate of
return on its money.
And he testified that Ryan told him those targets had to be hit
for Ryan to get his bonus.
Ajit Jain told Scripps, "Mr. Ryan, as well as others who work at
the reinsurance division, are not paid based on a bonus structure;
compensation is based on a fixed salary that is reviewed each
year."
Mr. Jain did not respond to questions about any additional forms
of compensation or incentives Ryan received or may receive, and
said Ryan declined an interview.
Mr. Burns also testified that claims adjusters felt "extreme
frustration" when bosses balked at paying what adjusters viewed as
reasonable settlements. "We were told, 'You're not paying it.
Find a way to avoid paying it.' "
On one asbestos deal, Mr. Burns said, he was instructed "it was
cheaper to litigate than pay."
He gave similar testimony in a Massachusetts trial between
Celanese International Corp. and Resolute over nonpayment of
claims. In December 2009, the court ruled Resolute had committed
a "willful or knowing" act that was "unfair or deceptive." The
court awarded double damages against Resolute, a ruling Resolute
did not appeal.
In an email exchange with Scripps, Mr. Jain declined to say how
many bad-faith allegations have been lodged or settled against
Resolute, National Indemnity or the insurance companies they
manage asbestos and pollution claims for.
Berkshire's Jain said he was disappointed by the Celanese ruling,
but insists "few insurance organizations have a higher
reputational concern than we do. In administering these books,
then, we need to be vigilant to pay valid claims, protect valid
insurance policy defenses, and in the many instances where
reasonable minds differ, seek to achieve reasonable compromises
where possible."
But in courtrooms across the country, there are allegations that
Berkshire has little interest in compromise.
In Kansas City, Charles Lute and two fellow building engineers
sued the owner of the BMA Tower for injuries, after years of
working around an asbestos-filled fire retardant they were told
was "safe enough to eat for breakfast." Court documents say the
building's owner, Liberty Life Insurance Co., wanted to settle and
blamed Resolute when a mediated deal fell through. Resolute's
offer was so low, court documents say, Liberty paid the three men
at the higher level, without knowing if it would be reimbursed by
its insurer.
"Rarely in asbestos litigation are the injured victims and
asbestos companies on the same side," New York asbestos attorney
Joe Belluck told Scripps.
In 2009, a New York court ordered a "prompt" payment to Estee
Lauder. Three years later, Resolute cut a $5 million check.
Estee Lauder attorney John Schryber --
schryberj@dicksteinshapiro.com -- in a June 2013 interview said
the delay led N.Y. Supreme Court, Appellate Division, Judge Carol
Edmead to allow the cosmetics giant to add an allegation: one of
"bad faith."
"What's going on here is a very sophisticated, legally oriented
regimen by insurance companies and a mastermind at business in
Warren Buffett," said Mr. Schryber of Dickstein Shapiro LLP in
Washington.
In a 2010 California ruling in favor of Pepsi-Cola Metropolitan
Bottling Co., U.S. District Judge Stephen Wilson found a "pattern
of delays" and no evidence justifying why claims weren't paid
promptly.
"I don't think there's anything wrong with making money as long as
you do it fairly," said J. Robert Hunter, head of the Consumer
Federation of America's insurance division and former Texas
insurance commissioner.
"Where the Buffett thing goes wrong -- the only way they're going
to make money is to have them pay (claims) a little slower,"
Mr. Hunter said.
He points to Mr. Buffett's 2006 letter to shareholders in which
Berkshire's own chairman links the timing of claims payments to
potential profits.
"How will Berkshire fare?" Mr. Buffett wrote. "That depends on
how much 'known' claims will end up costing us and how many yet-
to-be presented claims will surface and what they will cost, how
soon claim payments will be made and how much we earn on the cash
we receive before it must be paid out. Ajit and I think the odds
are in our favor."
Mr. Hunter spotted another area of concern in Mr. Buffett's 2011
shareholder letter where he writes that Berkshire gets to invest
the float "for our own benefit."
Mr. Hunter says laws in most states require investment earnings
from the float be used "to make policies cheaper for people buying
insurance" and not go "to the benefit of the insurer, as
Mr. Buffett seems to be bragging about."
He cites a California rule that reads: ". . . the commissioner
shall consider whether the rate mathematically reflects the
insurance company's investment income."
George Washington University law professor Lawrence Cunningham
cautions that float is an "inherent feature" of insurance, and
it's not unusual to see lawsuits in which policyholders or
claimants say an insurer or claims administrator acted in bad
faith by delaying payment.
Mr. Cunningham, who is also a Berkshire shareholder and has edited
several editions of "The Essays of Warren Buffett," said Berkshire
corporate culture rests on "unwavering commitment to integrity."
He said it would be "antithetical for the company to jeopardize
that reputation by wrongfully delaying or denying claims or acting
in any way inconsistent with faithful administration and payment
of claims."
According to Berkshire executive Jain, his division pays $1.4
billion annually for asbestos claims and expenses. And "as is the
case with any insurance company, the vast majority of claims are
settled without trials," he said.
But Berkshire will be back in court in late October, this time
against Ford Motor Co. over unpaid claims related to rollover
deaths. Schryber represents Ford, but declined to answer
questions about that case.
Nancy Lopez spent most of her shortened life -- she died at age 56
-- working in the Circuit Court in Kansas City. At her funeral in
October 2010, she was remembered as the "heart of the division."
But she never got her own day in court. The money her attorney
eventually won on Lopez's behalf went to her family more than a
year after her death.
BLUE DIAMOND: Bid to Dismiss "Werdebaugh" Suit Denied
-----------------------------------------------------
District Judge Lucy H. Koh denied a motion to dismiss a first
amended complaint and a motion to strike plaintiff's damages claim
in CHRIS WERDEBAUGH, individually and on behalf of all others
similarly situated, Plaintiff, v. BLUE DIAMOND GROWERS, Defendant,
CASE NO. 12-CV-02724-LHK, (N.D. Calif.).
Plaintiff Chris Werdebaugh brought this putative class action
against Blue Diamond Growers, alleging that Defendant's package
labeling is unlawful and deceptive and thus misbranded in
violation of federal and state law. The Defendant moved to
dismiss Werdebaugh's First Amended Complaint and moved to strike
Werdebaugh's claim for damages under the California Consumers
Legal Remedies Act, Cal. Civ. Code (CLRA) Sections 1750 et seq.
The Court denied the Defendant's Motion to Dismiss on the basis
that (1) Plaintiff's claims are preempted by the Federal Food,
Drug, and Cosmetic Act or subject to the doctrine of primary
jurisdiction; (2) Plaintiff lacks constitutional and statutory
standing; (3) Plaintiff's claims are not pleaded with the
particularity required by Federal Rule of Civil Procedure 9(b);
and (4) California's conflict-of-laws analysis prohibits the
nationwide class from bringing a claim under the Unfair
Competition Law, California's False Advertising Law, or CLRA. The
Court denied the Defendant's Motion to Strike Plaintiff's claim
for monetary damages under the CLRA.
A copy of the District Court's October 2, 2013 Order is available
at http://is.gd/ft1J8Mfrom Leagle.com.
BP EXPLORATION: Dismissal of Suit vs. Claims Administrator Upheld
-----------------------------------------------------------------
The United States Court of Appeals for the Fifth Circuit affirmed
the district court's dismissal for failure to state a claim of BP
Exploration & Production, Inc.'s suit against the claims
administrator in the lawsuit over the Deepwater Horizon oil spill.
BP appealed the district court's decision upholding the Claims
Administrator's interpretation of the settlement agreement between
it and the class of parties injured in the Deepwater Horizon oil
spill. BP also appealed the district court's dismissal of its
action for breach of contract against the Administrator and denial
of its motion for a preliminary injunction.
The Fifth Circuit reversed the district court's denial of BP's
motion for a preliminary injunction and the district court's order
affirming the Administrator's interpretation of the Settlement.
The Fifth Circuit remanded the case to the district court for
further consideration.
The case is IN RE: DEEPWATER HORIZON LAKE EUGENIE LAND &
DEVELOPMENT, INCORPORATED; BON SECOUR FISHERIES, INCORPORATED;
FORT MORGAN REALTY, INCORPORATED; LFBP 1, L.L.C., doing business
as GW Fins; PANAMA CITY BEACH DOLPHIN TOURS & MORE, L.L.C.; ZEKES
CHARTER FLEET, L.L.C.; WILLIAM SELLERS; KATHLEEN IRWIN; RONALD
LUNDY; CORLISS GALLO; JOHN TESVICH; MICHAEL GUIDRY, on behalf of
themselves and all others similarly situated; HENRY HUTTO; BRAD
FRILOUX; JERRY J. KEE, Plaintiffs-Appellees,
v.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION
COMPANY; BP PIPE LINE COMPANY, Defendants-Appellants.
IN RE: DEEPWATER HORIZON LAKE EUGENIE LAND & DEVELOPMENT,
INCORPORATED; BON SECOUR FISHERIES, INCORPORATED; FORT MORGAN
REALTY, INCORPORATED; LFBP 1, L.L.C., doing business as GW Fins;
PANAMA CITY BEACH DOLPHIN TOURS & MORE, L.L.C.; ZEKES CHARTER
FLEET, L.L.C.; WILLIAM SELLERS; KATHLEEN IRWIN; RONALD LUNDY;
CORLISS GALLO; JOHN TESVICH; MICHAEL GUIDRY, on behalf of
themselves and all others similarly situated; HENRY HUTTO; BRAD
FRILOUX; JERRY J. KEE, Plaintiffs-Appellees,
v.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION
COMPANY; BP, P.L.C., Defendants-Appellants.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION
COMPANY, Plaintiffs-Appellants,
v.
LAKE EUGENIE LAND & DEVELOPMENT, INCORPORATED; BON SECOUR
FISHERIES, INCORPORATED; FORT MORGAN REALTY, INCORPORATED; LFBP 1,
L.L.C., doing business as GW Fins; PANAMA CITY BEACH DOLPHIN TOURS
& MORE, L.L.C.; ZEKES CHARTER FLEET, L.L.C.; WILLIAM SELLERS;
KATHLEEN IRWIN; RONALD LUNDY; CORLISS GALLO; JOHN TESVICH; MICHAEL
GUIDRY, on behalf of themselves and all others similarly situated;
HENRY HUTTO; BRAD FRILOUX; JERRY J. KEE, Intervenor Defendants-
Appellees.
DEEPWATER HORIZON COURT SUPERVISED SETTLEMENT PROGRAM; PATRICK A.
JUNEAU, in his official capacity as Claims Administrator of the
Deepwater Horizon Court Supervised Settlement Program
administering the Deepwater Horizon Economic and Property Damages
Settlement Agreement, and in his official capacity as Trustee of
the Deepwater, Defendants-Appellees, NO. 13-30315, CONSOLIDATED
WITH: 13-30329.
A copy of the Appeals Court's October 2, 2013 Opinion is available
at http://is.gd/4ywVsmfrom Leagle.com.
CHILDREN'S WISH: Gives Only Little Funds to Needy Kids, Suit Says
-----------------------------------------------------------------
Slammed in one article as one of the worst charities, Children's
Wish Foundation gives only a small fraction of the funds it
collects to needy children, Matt Reynolds at Courthouse News
Service reports, citing a federal class claims filed in
California.
Not to be confused with the Make a Wish Foundation of Arizona, the
defendant Children's Wish Foundation International (CWFI) is based
in Georgia and holds itself out as a charity for children with
life-threatening diseases.
Jesse Unruh, of Los Angeles, notes that CNN, the Center for
Investigative Reporting and the Tampa Bay Times called the charity
America's third worst charity, behind Kids Wish Network and Cancer
Fund of America.
In the last 10 years, less than 11 percent of the $96.8 million
contributed to the charity has been given to children as direct
aid, according to the complaint.
"Instead of the millions of dollars raised in the name of sick,
dying, and needy children going to direct relief and aid, the vast
majority of the millions raised goes to defendant CWFI's operators
and the for-profit companies," the complaint states.
The 14-page lawsuit estimates that the charity spent $600,000 on
"wishes" for children and donated $3 million in goods but spent $6
million on fundraisers to solicit the donations.
"Perhaps even more egregious, founder and Executive Director Linda
Dozoretz of defendant CWFI took an annual salary of more than a
quarter million dollars in 2010," the complaint states.
Unruh says he "reasonably relied" on the charity's representations
when he made a contribution and expected that it would "directly
aid children in need."
The class seeks at least $5 million in damages for false
advertising and unfair competition.
After studying 10 years' worth of federal tax returns, the Tampa
Bay Times reported that, of the $127.8 million Kids Wish Network
raised, $109.8 million was spent to solicit donations, with 2.5
percent spent on direct cash aid. Cancer Fund of America raised
$98 million, spent $80.4 million on fundraisers and 0.9 percent on
aid, the paper said.
The Plaintiff is represented by:
Michael Louis Kelly, Esq.
Behram V. Parekh, Esq.
Heather Marie Baker, Esq.
KIRTLAND AND PACKARD LLP
2041 Rosecrans Avenue, Suite 300
El Segundo, CA 90245
Telephone: (310) 536-1000
Facsimile: (310) 536-1001
E-mail: mlk@kirtlandpackard.com
bvp@kirtlandpackard.com
hmb@kirtlandpackard.com
The case is Unruh v. Children's Wish Foundation International
Inc., et al., Case No. 2:13-cv-07305-ODW-FFM, in the United States
District Court for the Central District of California (Western
Division - Los Angeles).
CR BARD: Agrees to Settle One of Vaginal-Mesh Injury Cases
----------------------------------------------------------
Bloomberg News reports that C.R. Bard Inc. agreed to settle a
woman's claims that one of its vaginal-mesh implants caused
internal problems before a trial set for this month in New Jersey,
two people familiar with the accord said.
Bard officials agreed to pay an undisclosed sum to resolve
Melanie Virgil's claims that Bard's Avaulta Plus insert caused
urinary problems, said the people, who asked not to be named
because they weren't authorized to speak publicly about the
settlement. Ms. Virgil's case had been set for a Sept. 23 trial
in state court in Atlantic City, according to court dockets.
It's the second vaginal-mesh case Bard settled since a federal
jury in Charleston, West Virginia, ordered the device maker last
month to pay $2 million to a woman who blamed the company's
Avaulta devices for her injuries.
Bard, based in Murray Hill, New Jersey, faces more than 8,000
claims over the Avaulta line of inserts, which women allege can
cause organ damage and make sexual intercourse painful when the
devices erode. Johnson & Johnson, Endo Health Solutions Inc. and
Boston Scientific Corp. face similar claims that their implants,
threaded in place through vaginal incisions, shrink over time.
Scott Lowry, a Bard spokesman, didn't immediately return phone and
email messages on Sept. 28 seeking comment on the settlement.
Don Migliori, one of Ms. Virgil's lawyers, declined to comment on
Sept. 28 on the settlement.
Many of the implant cases against Bard and other manufacturers
have been consolidated before U.S. District Judge Joseph Goodwin
in Charleston for pretrial information exchanges. Other cases
have been filed in state courts in New Jersey, Missouri and
California.
Bard officials pulled the Avaulta implants off the market last
year after the U.S. Food and Drug Administration ordered all
makers of the devices to study rates of organ damage, infection
and pain during sex linked to their products.
A California state court jury last year found Bard liable for a
woman's injuries related to an Avaulta implant in the first case
to go trial in a U.S. court. Jurors said the company should pay
$5.5 million in damages. Bard is liable for only $3.6 million
under that state's law.
The West Virginia jury concluded Aug. 15 that Bard should pay
$250,000 in compensatory damages and $1.75 million in punitive
damages to Donna Cisson, a nurse from Georgia who had an Avaulta
Plus device implanted. Ms. Cisson said the mesh damaged her
organs and caused other ailments, in the first case to be tried in
federal court.
Ms. Virgil, a junior high school music teacher in Colorado, sued
Bard after her Avaulta Plus device began to erode, according to
court filings. The 56-year-old women said she needed three
surgeries to address urinary problems created by the insert,
according to the filings.
The case is Virgil v. C.R. Bard Inc. (BCR), ATL-L6917-10, Superior
Court of New Jersey Law Division, Atlantic County (Atlantic City).
The Bard consolidated cases are In re C.R. Bard Inc. Pelvic Repair
System Products Liability Litigation, 10-md-02187, U.S. District
Court, Southern District of West Virginia (Charleston).
CSL: Settles Price-Fixing Class Action for $64 Million
------------------------------------------------------
John Dagge, writing Herald Sun, reports that blood products and
vaccine maker CSL has agreed to pay more than $60 million to
settle a long-running price fixing class action in the US.
The agreement, which still needs to be approved by the US Federal
Court, will bring to an end a four-year battle between the company
and American and Puerto Rican healthcare groups.
The groups, which include private hospitals and the University of
Utah, launched the antitrust class action in July 2009 claiming
CSL and other plasma therapy manufacturers operating in the US had
conspired to push up the price of treatments by restricting
supply.
CSL has always denied the allegations and previously pledged to
vigorously defend the class action.
It will pay $US64 million ($68 million) to settle.
On Oct. 6, chief executive Paul Perreault said that while the
Melbourne-based biotech continued to "strongly reject" any
allegation of wrongdoing, a negotiated settlement was in the best
interests of the company and shareholders.
"To pursue the case further would have required several more years
of management time and focus as well as substantial additional
legal costs with no absolute certainty of the outcome,"
Mr. Perreault said.
The company has spent about $20 million to date defending the case
and both Mr. Perreault and his predecessor, Brian McNamee, have
been interviewed by class action lawyers.
If approved, the settlement will reduce CSL's net profit after tax
in the current financial year by $41 million.
CSL on Oct. 6 revised down its growth forecast for the year to
next June.
It now expects net profit after tax come in 7% higher this
financial year at 2012-13 exchange rates, down from an earlier
forecast that put year-on-year growth at 10%.
The class action was launched after the US Federal Trade
Commission blocked CSL's $US3.1 billion takeover bid for rival
Talecris Therapeutics in June 2009.
The commission said the plasma therapy manufacturers already
operated as a "tight oligopoly" and engaged in market rigging
practices.
According to BusinessDay, the decision will force CSL to take a
$US39 million one-off charge to its fiscal 2014 full-year results,
although the blood plasma group reaffirmed its profit guidance as
provided to investors on the release of its latest earnings report
in August.
It brings to an end a protracted four-year court battle that began
under the leadership of former CSL boss Brian McNamee and which
revolved around allegations that the company conspired with its
major competitor in the US, Baxter International, to push up the
prices of life-saving blood plasma from as long ago as the 1990s,
BusinessDay reports.
BusinessDay on Oct. 7 contacted Dr. McNamee, who was unaware CSL
had decided to settle the lawsuit, and he declined to comment
other than to say Mr. Perreault was doing a good job.
Mr, Perreault, who grew up in the US, said the company had not
made an admission of guilt but decided to settle to remove a major
distraction to the company. "It removes a lot of management
distraction and we can get on [with] running the business," he
said.
"Just the depositions themselves were a huge distraction, weeks
and weeks . . . to go through depositions and hundreds and
hundreds of pages of documentation that they pulled out and all
the rest of it to try to prove their case.
"And you have all types of crap in there, just trying to get your
way through."
He said it was also the best decision for shareholders.
"It stops the clock on our costs of this lawsuit," Mr. Perreault
said. "While we believe the lawsuit lacks merit, it could
actually drag on for several more years with absolutely no
certainty as to the outcome based on the way the US legal system
operates."
Mr. Perreault said he was frustrated about the decision to settle.
According to BusinessDay, CSL believed the chances of US
regulatory officials launching their own case against the company
were very slim, given the US Federal Trade Commission raised
allegations of cartel behavior in the industry four years ago --
naming CSL -- and never took any action.
DAIMLER AG: Recalls 9 Business Class M2 Model Trucks
----------------------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Subcategory: Truck - Med. & H.D.
Notification type: Safety Mfr
System: Engine
Units affected: 9
Source of recall: Transport Canada
Identification number: 2013349
TC ID number: 2013349
Manufacturer recall
number: FL-648
Affected products: 2014 Freightliner Business Class M2
Certain vehicles destined for emergency vehicle applications may
have been configured inappropriately. Software intended to
protect the engine may not have been disabled at time of
manufacture. Under certain conditions, unintended engine shutdown
could hamper rescue operations and put the public at risk.
Dealers will update engine software to disable engine shutdown
protocols.
DELL INC: Forced 401(k) Plan Members to Sell Shares, Suit Claims
----------------------------------------------------------------
Carl Camera v. Dell Inc., Michael S. Dell, Shantanu Narayan, James
W. Breyer, Donald J. Carty, Janet F. Clark, Laura Conigliaro,
Kenneth M. Duberstein, H. Ross Perot, Jr., Alex J. Mandl, Klaus S.
Luft, Gerald J. Kleisterlee, Thomas W. Luce, III, Samuel A. Guess,
Janet Wright, Gary Bischoping, and John Does 1-10, Case No. 1:13-
cv-00876-SS (W.D. Tex., October 2, 2013) is brought on behalf of
(i) the Dell Inc. 401(k) Plan for Plan-wide relief, and (ii) all
Plan participants, whose individual accounts in the Plan was
invested in the Dell Inc. Stock Fund and whose holdings in the
Fund were partially liquidated in October 2012.
This case arises out of Dell's decision to force investors in its
own retirement plan to sell shares in the Dell Inc. Stock Fund at
an unfair price, at a time when Dell was actively negotiating a
private buyout of the Company and knew those market prices did not
reflect fair value, Mr. Camera alleges. He contends that it was
imprudent to impose a mandatory reallocation on participants in
the Dell Inc. Stock Fund by the mandatory deadline, in effect
forcing certain Fund participants to sell at prices, which Plan
fiduciaries knew to be unfair and which did not reflect market-
moving information of which the Defendants were aware.
Mr. Camera is a resident of Austin, Texas. He is a participant in
the Plan.
Dell is a Delaware corporation headquartered in Round Rock, Texas.
Dell develops, manufactures and markets computer products. Dell
is the Plan's sponsor and a fiduciary of the Plan. The Individual
Defendants are directors and officers of the Company, and members
of the Benefits Administration Committee. The Doe Defendants are
members of the Committee and, therefore, are fiduciaries of the
Plan and exercised authority or control over the Plan, Plan assets
and the Fund.
The Plaintiff is represented by:
Jeffrey S. Edwards, Esq.
EDWARDS LAW
1101 E. 11th St.
Austin, TX 78702
Telephone: (512) 623-7727
Facsimile: (512) 623-7729
E-mail: jeff@edwards-law.com
- and -
Michael Singley, Esq.
THE SINGLEY LAW FIRM, PLLC
4131 Spicewood Springs Rd., Suite O-3
Austin, TX 78759
Telephone: (512) 334-4302
Facsimile: (512) 727-3365
E-mail: mike@singleylawfirm.com
DISTRICT OF COLUMBIA: Class Certification Bid in "Fox" Suit Denied
------------------------------------------------------------------
Barbara Fox and Hamilton P. Fox III brought an action on
December 15, 2010, against the District of Columbia and two
Metropolitan Police Department officers in their individual
capacities. They alleged claims arising out of Mr. Fox's arrest
for disorderly conduct and his release pursuant to a "post-and-
forfeit" procedure whereby an arrestee simultaneously posts and
forfeits collateral in return for his release from jail without
prosecution. In addition to their claims against the individual
officers, Mr. Fox also brought a class action against the District
challenging the constitutionality of the post and forfeit
procedure. On March 30, 2012, and February 15, 2013, the Court
granted the District's motions to dismiss the post-and-forfeit
counts. Since the orders dismissing the post-and-forfeit claims
adjudicate fewer than all the claims in the case, they are
interlocutory orders that are non-appealable.
On April 26, 2013, Mr. Fox moved for an order directing entry of
final judgment on his post-and-forfeit class claims under Federal
Rule of Civil Procedure 54(b). The Defendants opposed Mr. Fox's
motion, arguing that the instant case is not "one of those
exceptional and rare cases" where such relief is appropriate.
District Judge Amy Berman Jackson agreed and said she will deny
the motion.
"Since judicial administration interests weight against Rule 54(b)
certification, and Mr. Fox has failed to demonstrate that
equitable concerns compel a contrary result, the Court will, in
its broad discretion, deny Mr. Fox's motion to certify the class
claims under Rule 54(b)," Judge Jackson added.
The case is BARBARA FOX, et al., Plaintiffs, v. DISTRICT OF
COLUMBIA, et al., Defendants, CIVIL ACTION NO. 10-2118 (ABJ),
(D.D.C.).
A copy of the District Court's October 3, 2013 Memorandum Opinion
is available at http://is.gd/eMuhnkfrom Leagle.com.
DOMINO'S PIZZA: Attorney's Fees Reduced in FCRA Suit Settlement
---------------------------------------------------------------
District Judge Deborah K. Chasanow granted final approval of an
Amended Settlement Agreement, with a change in the amount for
attorneys' fees, in the case captioned ADRIAN SINGLETON, et al. v.
DOMINO'S PIZZA, LLC, CIVIL ACTION NO. DKC 11-1823, (D. Md.)
A reduction of the attorneys' fees award to 25% percent of the
common fund would be more reasonable in light of competing public
policy concerns, says Judge Chasanow.
Mr. Singleton filed this Fair Credit Reporting Act lawsuit against
Domino's as a putative class action on July 1, 2011. The
Plaintiffs are former employees of Domino's.
A copy of the District Court's October 2, 2013 Memorandum Opinion
is available at http://is.gd/l1pR0ffrom Leagle.com.
EAST RAMAPO: Judge Allows Key Claims in Class Action to Proceed
---------------------------------------------------------------
Gary Stern writing for The Journal News, reports that a federal
judge allowed key claims in a lawsuit against current and former
East Ramapo school officials to move forward on Sept. 30, even as
she dismissed most other claims.
U.S. District Judge Cathy Seibel gave life to a much smaller, but
potentially revealing class-action lawsuit against a dozen
defendants, who had sought to have the claims against them
dismissed.
The lawsuit can now confront several of the most divisive issues
in East Ramapo, including the placement of Hasidic and other
Orthodox students in private special-education schools at public
expense, the alleged purchase of religious textbooks for private
schools, and whether the school board tried to sell two schools at
below-market rates.
Judge Seibel also allowed the lawsuit to look at whether the
school board hired Long Island-based lawyer Albert D'Agostino in
2009 as part of a conspiracy to place special-education students
in private schools in a manner that forfeits state reimbursements.
The allegations "suffice, at this stage, to show, at least
plausibly, a tacit agreement," Seibel said.
The board announced plans to replace Mr. D'Agostino's firm after a
video of one of his lawyers, Christopher Kirby, spewing a
profanity-laced tirade against several parents went viral in July.
Seibel dropped numerous claims advanced by the plaintiffs, often
concluding that they did not have standing to make the claims or
offered a lack of evidence.
"I think the judge was fair," said Emilia White, a parent whose
son graduated from East Ramapo a few years ago.
"There is a chance for justice. We wanted to be able to move
forward so the children have a chance."
The federal class-action lawsuit, filed on behalf of about 400
parents, contends that the school board has improperly funneled
tax money to private schools.
The board has long been dominated by men from Hasidic and other
Orthodox communities who send their children to yeshivas.
The public-interest law firm Advocates for Justice filed the suit
in August 2012.
Lawyer Laura Barbieri of Advocates for Justice said that the heart
of the case will be heard. She noted that individual defendants
are still subject to restitution.
"They can be held liable for damages," she said. "We can hold
them liable to put that money back into the district coffers."
David Butler, lawyer for most of the defendants, declined comment
until he read the decision.
Advocates for Justice also filed a petition with state Education
Commissioner John King last year asking for the removal of
Orthodox board members and the appointment of a state monitor to
oversee district spending. Mr. King has not yet responded.
East Ramapo serves about 9,000 public-school students. About
21,000 students who live in the district attend private schools.
FACEBOOK INC: Norton Rose Discusses Class Action Ruling
-------------------------------------------------------
Dominic Dupoy, Esq. -- dominic.dupoy@nortonrosefulbright.com -- at
Norton Rose Fulbright reports that on September 4, 2013, Justice
David R. Collier of the Quebec Superior Court dismissed a motion
for authorization to institute a class action against Facebook
Inc., its directors and the underwriters involved in the Facebook
Inc. IPO. The petitioner claimed to be acting on behalf of all
Quebecers who had bought shares of Facebook Inc. and subsequently
suffered a loss on reselling them. In her motion, the petitioner
alleged, among other things, that the respondents had failed to
disclose certain material facts in the documents filed with US
securities authorities and that the documents contained
misrepresentations.
Facebook Inc. and the other respondents argued that the Superior
Court did not have jurisdiction to hear such a lawsuit. In this
regard, it is important to note that the following facts were not
contested by the petitioner: (i) the respondents were all
domiciled in New York or California (ii) the events giving rise to
the dispute had all occurred in the United States, not in Quebec,
and (iii) Facebook Inc. was not a reporting issuer under the
Quebec Securities Act and had not distributed securities in Quebec
within the meaning of section 236.1 of the Securities Act.
Thus the Court's analysis was limited to applying the test under
article 3148 of the Civil Code of Quebec, more specifically
whether the petitioner had suffered damage in Quebec within the
meaning of subsection 3 of that article. Following a brief review
of the relevant case law, Justice Collier concluded that the
petitioner had not suffered damage in Quebec merely because the
loss she sustained may have been recorded in Quebec.
The Court then cited article 1734 of the Civil Code of Quebec,
which states that a buyer is bound to take delivery of the
property sold, and to pay the price, at the time and place of
delivery. In this case, the Court found that the shares of
Facebook Inc. would have been notionally delivered either in New
York or at Facebook Inc.'s head office in California. In the
absence of evidence to the contrary, it followed that payment for
the shares had been made elsewhere than in Quebec.
Since no fault had been committed in Quebec and no damage had been
suffered in Quebec, Justice Collier concluded that the Quebec
Superior Court did not have jurisdiction to hear the action.
Subsidiarily, the Court added that even if it had had
jurisdiction, it would have declined that jurisdiction in favour
of the New York courts, as the record showed that 41 suits related
to Facebook Inc.'s IPO had been centralized and were proceeding
before the New York courts. Since those suits included residents
of Quebec and were based on the same allegations, the Court
considered that the New York courts were better placed to dispose
of the matter.
The Court also noted that the prospectus filed by Facebook Inc.
was subject to the laws of New York and the evidence
substantiating the petitioner's allegations was likely to be found
in New York. Moreover, even if the Superior Court were to hand
down judgment against the respondents, that judgment would have to
be executed in the United States. In short, the New York courts
appeared to be the natural forum for hearing the actions against
the respondents and no advantage was to be gained from proceeding
in Quebec.
This judgment is of interest in that it examines the question of
whether a Quebec resident may bring suit before the Quebec courts
against a foreign company following the purchase of shares issued
on a foreign stock exchange. It remains to be seen whether the
petitioner will appeal the decision.
FEDEX CORPORATION: 19 Cases Remain Stayed Pending Court Decision
----------------------------------------------------------------
FedEx Corporation disclosed that 19 multidistrict litigation cases
that had been certified as class actions claiming that the
Company's owner-operators should be treated as employees, rather
than independent contractors, remain stayed pending a decision of
the Kansas Supreme Court, according to the Company's Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarterly period ended August 31, 2013.
The Company states: "We are a defendant in a number of lawsuits
containing various class-action allegations of wage-and-hour
violations. The plaintiffs in these lawsuits allege, among other
things, that they were forced to work "off the clock," were not
paid overtime or were not provided work breaks or other benefits.
The complaints generally seek unspecified monetary damages,
injunctive relief, or both. We do not believe that a material loss
is reasonably possible with respect to any of these matters.
"FedEx Ground is involved in numerous class-action lawsuits
(including 30 that have been certified as class actions),
individual lawsuits and state tax and other administrative
proceedings that claim that the company's owner-operators should
be treated as employees, rather than independent contractors.
Most of the class-action lawsuits were consolidated for
administration of the pre-trial proceedings by a single federal
court, the U.S. District Court for the Northern District of
Indiana. The multidistrict litigation court granted class
certification in 28 cases and denied it in 14 cases.
"On December 13, 2010, the court entered an opinion and order
addressing all outstanding motions for summary judgment on the
status of the owner-operators (i.e., independent contractor vs.
employee). In sum, the court has now ruled on our summary judgment
motions and entered judgment in favor of FedEx Ground on all
claims in 20 of the 28 multidistrict litigation cases that had
been certified as class actions, finding that the owner-operators
in those cases were contractors as a matter of the law of 20
states. The plaintiffs filed notices of appeal in all of these 20
cases. The Seventh Circuit heard the appeal in the Kansas case in
January 2012 and, in July 2012, issued an opinion that did not
make a determination with respect to the correctness of the
district court's decision and, instead, certified two questions to
the Kansas Supreme Court related to the classification of the
plaintiffs as independent contractors under the Kansas Wage
Payment Act. The other 19 cases that are before the Seventh
Circuit remain stayed pending a decision of the Kansas Supreme
Court.
"The multidistrict litigation court remanded the other eight
certified class actions back to the district courts where they
were originally filed because its summary judgment ruling did not
completely dispose of all of the claims in those lawsuits. Three
of those cases are now on appeal with the Court of Appeals for the
Ninth Circuit. The other five remain pending in their respective
district courts, but two of these five matters have been settled
for immaterial amounts, subject to court approval.
"While the granting of summary judgment in favor of FedEx Ground
by the multidistrict litigation court in 20 of the 28 cases that
had been certified as class actions remains subject to appeal, we
believe that it significantly improves the likelihood that our
independent contractor model will be upheld. Adverse
determinations in matters related to FedEx Ground's independent
contractors, however, could, among other things, entitle certain
of our owner-operators and their drivers to the reimbursement of
certain expenses and to the benefit of wage-and-hour laws and
result in employment and withholding tax and benefit liability for
FedEx Ground, and could result in changes to the independent
contractor status of FedEx Ground's owner-operators in certain
jurisdictions.
"We believe that FedEx Ground's owner-operators are properly
classified as independent contractors and that FedEx Ground is not
an employer of the drivers of the company's independent
contractors. While it is reasonably possible that potential loss
in some of these lawsuits or such changes to the independent
contractor status of FedEx Ground's owner-operators could be
material, we cannot yet determine the amount or reasonable range
of potential loss. A number of factors contribute to this. The
number of plaintiffs in these lawsuits continues to change, with
some being dismissed and others being added and, as to new
plaintiffs, discovery is still ongoing. In addition, the parties
have conducted only very limited discovery into damages, which
could vary considerably from plaintiff to plaintiff.
"Further, the range of potential loss could be impacted
considerably by future rulings on the merits of certain claims and
FedEx Ground's various defenses, and on evidentiary issues. In any
event, we do not believe that a material loss is probable in these
matters.
"In addition, we are defending contractor-model cases that are not
or are no longer part of the multidistrict litigation, two of
which have been certified as class actions. These certified class
actions were settled for immaterial amounts in the first quarter
of fiscal year 2014, subject to court approval. The other cases
are in varying stages of litigation, and we do not expect to incur
a material loss in any of these matters."
FedEx Corporation (FedEx) is a holding company. The Company
provides a portfolio of transportation, e-commerce and business
services under the FedEx brand. Federal Express Corporation (FedEx
Express) is an express transportation company, offering time-
certain delivery within one to three business days and serving
markets. FedEx Ground Package System, Inc. (FedEx Ground) is a
provider of small-package ground delivery service. FedEx Freight
Inc (FedEx Freight) is a provider of less-than-truckload (LTL)
freight services. FedEx Corporate Services, Inc. (FedEx Services)
provides the Company's other companies with sales, marketing,
information technology, communications and back-office support. In
June 2012, the Company acquired Polish courier company Opek Sp.
z.o.o. In July 2012, the Company acquired TATEX. In July 2012, the
Company's, FedEx Express business unit, acquired Rapidao Cometa, a
transportation and logistics company.
FIRST AMERICAN: Unaccepted Judgment Offer Did Not Moot Claims
-------------------------------------------------------------
Tim Hull at Courthouse News Service reports that a California
woman's refusal to accept an offer of judgment does not moot her
claims against a home warranty company, the 9th Circuit ruled
Friday, October 4, 2013.
Emily Diaz filed a class action lawsuit in San Diego District
Court against First American Home Buyers Protection Corporation,
claiming that the company had failed to repair her home as agreed
and that the contractors it had hired were not up to the job,
among other things.
U.S. District Judge Marilyn Huff denied class certification and
dismissed Diaz's claims for unfair competition and concealment on
procedural grounds, but let stand her individual state law claims
for unfair competition, misrepresentation, concealment, breach of
contract and bad faith.
Thereafter, First American made an offer of judgment under Rule 68
of the Federal Rules of Civil Procedure that the company argued
would have settled all of her claims, offering $7,019.32 plus
costs. Diaz refused the offer, and First American moved to
dismiss the claims, contending that they were now moot.
Judge Huff agreed and tossed the rest Diaz's claims, but the 9th
Circuit reversed on Friday, October 4, 2013.
The unanimous, three-judge panel of the federal appeals court
agreed with Diaz's argument that "an unaccepted Rule 68 offer does
not render a claim moot, even if the offer would have fully
satisfied the plaintiff's claim."
In doing so, the panel cited U.S. Supreme Court Justice Elena
Kagan's dissenting opinion in this year's Healthcare Corp. v.
Symczyk, in which she wrote that "an unaccepted offer of judgment
cannot moot a case. When a plaintiff rejects such an offer --
however good the terms -- her interest in the lawsuit remains just
what it was before. And so too does the court's ability to grant
her relief. An unaccepted settlement offer -- like any unaccepted
contract offer -- is a legal nullity, with no operative effect."
The panel found that the offer of judgment, had Diaz accepted it,
would not have settled her claims for injunctive and declaratory
relief.
"We are persuaded that Justice Kagan has articulated the correct
approach," wrote Judge Raymond Fisher for the Pasadena-based
panel. "We therefore hold that an unaccepted Rule 68 offer that
would have fully satisfied a plaintiff's claim does not render
that claim moot. This holding is consistent with the language,
structure and purposes of Rule 68 and with fundamental principles
governing mootness."
The panel revived Diaz's claims for misrepresentation, breach of
contract and breach of the implied covenant of good faith and fair
dealing and remanded them to San Diego District Court.
The Plaintiff-Appellant is represented by:
Francis A. Bottini, Jr., Esq.
BOTTINI & BOTTINI, INC.
7817 Ivanhoe Avenue
La Jolla, CA 92037
Telephone: (858) 914-2001
E-mail: mail@bottinilaw.com
The Defendant-Appellee is represented by:
Leanna Anderson, Esq.
Paul Kakuske, Esq.
Joel David Siegel, Esq.
DENTONS US LLP
601 South Figueroa Street
Los Angeles, CA 90017-5704
Telephone: (213) 623-9300
E-mail: leanna.anderson@dentons.com
paul.kakuske@dentons.com
joel.siegel@dentons.com
- and -
Charles A. Newman, Esq.
Denton US LLP
One Metropolitan Square Bldg.
St. Louis, MO 63102
Telephone: (314) 241-1800
E-mail: charles.newman@dentons.com
- and -
Edward Patrick Swan, Jr., Esq.
JONES DAY
12265 El Camino Real
San Diego, CA 92130
Telephone: (858) 703-3132
E-mail: pswan@jonesday.com
The appellate case is Emily Diaz v. First American Home Buyers
Protection Corporation, Case No. 11-57239, in the United States
Court of Appeals for the Ninth Circuit. The original case is
Emily Diaz v. First American Home Buyers Protection Corporation,
Case No. 3:09-cv-00775-H-WMC, in the U.S. District Court for the
Southern District of California, San Diego.
FRED DEELEY: Recalls 20 Tri Glide Ultra Model Motorcycles
---------------------------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Subcategory: 3 Wheel Motorcycle
Notification type: Safety Mfr
System: Brakes
Units affected: 20
Source of recall: Transport Canada
Identification number: 2013347
TC ID number: 2013347
Manufacturer recall
number: 0152
Affected products: 2014 Harley-Davidson Tri Glide Ultra (FLHTCUTG)
On certain vehicles, the upper fork stem bracket was machined
incorrectly and could allow more steering angle than intended.
This could allow the fairing to contact the rear brake reservoir,
which could result in a loss of brake fluid and a reduction in
braking performance, and damage the steering damper, affecting
vehicle handling. Both these issues could increase the risk of a
crash causing injury and/or property damage.
Dealers will inspect the fork stem bracket and replace if
necessary.
FRIGIDAIRE: Recalls Blenders Over Laceration Hazard
---------------------------------------------------
HuntingtonNews.Net reports that Frigidaire is recalling Frigidaire
Professional blenders sold nationwide from March 2012 to July
2013. The blender's blade shaft assembly can break during use,
posing a laceration hazard.
This recall involves Frigidaire Professional(C) brand blender
model FPJB56B7MS with a serial number between FFP 49 1203 0001 and
FFP 49 1237 00974. The model and serial numbers are located on a
serial plate on the underside of the blender's motor base.
Consumers should contact Frigidaire at (888) 747-7637 from 8 a.m.
to 7:30 p.m. CT Monday through Friday and from 10:00 a.m. to
6:30 p.m. CT on Saturday and Sunday, or online at
http://www.frigidaire.comfor instructions on returning the
blenders for a free replacement blender. More info at
http://www.recalls.org
GENERAL MOTORS: Recalls 2,575 Sierra and Silverado Model Vans
-------------------------------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Subcategory: Light Truck & Van
Notification type: Compliance Mfr
System: Seats and Restraints
Units affected: 2575
Source of recall: Transport Canada
Identification number: 2013350
TC ID number: 2013350
Manufacturer recall
number: 13323
Affected products:
Maker Model Model year(s) affected
----- ----- ----------------------
GMC SIERRA 2014
CHEVROLET SILVERADO 2014
Certain vehicles equipped with manual reclining seatbacks may not
conform to Canada Motor Vehicle Safety Standard 202 - Head
Restraints. On some vehicles, either front seat may display
seatback movement. If the vehicle were struck from behind, the
head restraint may not meet the requirements of the standard,
which could increase the risk of injury.
Dealers will inspect the seatback recliner mechanism and make
adjustments as necessary.
GEORGE BROWN: Gowling Lafleur Discusses Class Action Ruling
-----------------------------------------------------------
Matthew Marinett, Esq. -- matthew.marinett@gowlings.com -- at
Gowling Lafleur Henderson LLP, reports that on November 16, 2012,
the Ontario Superior Court of Justice decided in favor of the
plaintiffs in a class action against George Brown College (GBC)
for misleading advertising (Ramdath et al v The George Brown
College of Applied Arts and Technology, 2012 ONSC 6173). The
Court held that GBC had made misleading representations in their
course calendars to the effect that certain industry
certifications could be received while completing an international
business program. The decision was recently affirmed by the
Ontario Court of Appeal. While damages have not yet been
assessed, the case represents the possibility of class actions in
cases of misleading advertising.
The impugned representations appeared in the course calendars for
the school years 2007-2008 and 2008-2009, and stated that the
International Business Management program "provides students with
the opportunity to complete three industry designations/
certifications." However, GBC did not have any authority to offer
the certifications, nor did they have any agreements in place to
allow their students to obtain them. The GBC course did not count
as credit towards the certification requirements. A number of
students, including a large number of international students, were
attracted to the program solely in order to receive these industry
designations, and stated they would not have enrolled otherwise.
After graduating, when it became clear to the students that the
certifications would not be offered, a complaint was brought to
GBC by the students. In response, GBC modified the wording in the
course calendar, but denied that the original text had been
misleading.
The students formed a class and brought an action for negligent
misrepresentation, violation of the Consumer Protection Act (CPA),
and breach of contract. At trial, GBC insisted that the course
calendar had not been misleading on the basis that the students
had received what the advertisement offered, namely a GBC
certificate and the opportunity in the future to obtain the
industry certifications if the students chose to do so. The Court
disagreed, finding that the wording clearly implied that the
certifications, or at least credit towards them, could be obtained
during the course.
The Court also dismissed the argument that if the students had
diligently researched the industry certifications, they would have
realized that GBC could not offer the certifications nor credit
towards them. The possibility that such diligent research may
have dispelled the clear implication that taking the International
Business Management program could lead directly to obtaining the
industry certifications was not an adequate defense. Indeed, the
evidence revealed that a number of professors told the plaintiff
students that completion of certain classes in the program would
result in receiving the industry certifications.
The Court had no difficulty in finding that GBC owed a duty of
care to its students and that it knew or should have known that
the representations were false, thereby constituting a negligent
misrepresentation. On the issue of a violation of the CPA, the
Court found that the students were "consumers" for the purposes of
the Act, and did not fall under the exception for individuals
"acting for a business purpose," even if the courses were taken to
advance career opportunities. The CPA prohibits "unfair
practices," which include "false, misleading or deceptive
representations." The Court found a clear breach of this
provision. The Court only briefly addressed breach of contract,
finding that the terms of the contract between GBC and the
students had not strictly been breached.
The Court concluded that monetary damages were the appropriate
remedy, but that these would be assessed in the next phase of
litigation.
The Ontario Court of Appeal provided only brief reasons in
affirming the decision of the Superior Court, but a few holdings
stand out from the decision. Firstly, the Court of Appeal held
that course calendars are created with the intention that students
will rely upon them to determine which academic programs to
pursue, and that therefore a duty of care was owed by GBC to the
students. Secondly, the Court of Appeal gave deference to the
trial judge's holding that the students were "consumers" for the
purpose of the CPA, and did not fall within the exception for
individuals "acting for a business purpose." Finally, the Court
held that the CPA does not require that a consumer show reliance
on an unfair practice in order to be entitled to remedies. The
appeal was dismissed with costs to the respondents.
This case illustrates the potential dangers of making misleading
representations even in limited publications such as course
calendars. It also reaffirms the possibility of class actions
being brought against advertisers under both common law rights and
under provincial consumer protection laws.
GLOBE UNIVERSITY: 3 Sioux Falls Residents Join Class Action
-----------------------------------------------------------
Nick Lowrey, writing for The Argus Leader, reports that three
Sioux Falls residents are plaintiffs in a class-action lawsuit
against the for-profit colleges Globe University and the Minnesota
School of Business.
The complaint, filed in Minnesota state court, accuses both
schools of consumer fraud, unlawful and deceptive trade practices
and false advertising. The lawsuit was filed two months after
former Globe University dean Heidi Weber won a Minnesota whistle-
blower lawsuit against the for-profit universities.
Globe and Minnesota School of Business are privately owned by the
same organization based in Woodbury, Minn.
The class-action lawsuit lists Sarah Beck, Melissa Beck and
Reginald Holmes of Sioux Falls as plaintiffs. The three attended
classes at Globe University's Sioux Falls campus. Cherida Brom of
Monroe, Wis., and Alexandria Romig-Palodichuk of Woodbury, Minn.,
also are plaintiffs in the suit.
When Ms. Weber prevailed in her lawsuit in August, the students
realized they might have a case, said Scott Carlson, their
Minneapolis lawyer.
"During the coverage of that trial, students began to call us
about their mistreatment," said Mr. Carlson, who also represented
Weber. "We began to hear the same story from every student that
called us."
A spokeswoman for Globe University said by email that the
university is saddened the students filed the lawsuit and is
committed to defending the reputations of current students,
faculty and staff. She also said the university does not think
the five students in the lawsuit typify prevailing thinking among
Globe students.
"This is unfortunate, and we are saddened that these students
chose to handle their concerns in this way," Naomi McDonald said.
"Lawsuit aside, as a college, you never want to hear that a
student is unhappy with their education."
The students' complaint says Globe deliberately misrepresented the
potential value of a degree from the school and the
transferability of the academic credits they earned as students.
The complaint also accuses the Globe of deliberately targeting
low-income people for recruitment because they are eligible for
more federal financial aid.
Students at for-profit institutions typically have received
disproportionately high share of federal student aid. The Obama
administration has taken steps to hold low-performing schools
accountable for the employability of graduates, pledging to
withhold financial aid.
HANKOOK: Recalls 97 DYNAPRO MT LT325/60R18 Model Tires
------------------------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Subcategory: Tire
Notification type: Safety Mfr
System: Tires
Units affected: 97
Source of recall: Transport Canada
Identification number: 2013348
TC ID number: 2013348
Certain tires may develop a separation at the tread/belt edge.
Tread separation could affect vehicle stability and control,
increasing the risk of injury and/or damage to property.
Dealers will replace affected tires.
Affected products: Hankook Dynapro MT LT325/60R18 2011, 2012, 2013
models
HARTFORD CASUALTY: 7th Cir. Reverses Remand Order in Addison Suit
-----------------------------------------------------------------
ADDISON AUTOMATICS, INCORPORATED, Plaintiff-Appellee, v. HARTFORD
CASUALTY INSURANCE COMPANY, Defendant-Appellant, NO. 13-2729 is an
appeal from the district court's decision remanding the case to
state court.
Plaintiff Addison Automatics, Inc. filed a complaint in state
court seeking a declaratory judgment that defendant Hartford
Casualty Insurance Company owed a duty to defend and indemnify a
third party against whom Addison had earlier brought and settled a
class action on terms that included an assignment to the class of
the third party's rights against its insurers. Addison's
complaint stated that it intended to proceed solely in its
individual capacity rather than on behalf of the previously
certified class.
The question before the United States Court of Appeals for the
Seventh Circuit is whether Addison's follow-on suit is a class
action removable under the Class Action Fairness Act, 28 U.S.C.
Sections 1332(d) and 1453. The district court thought not,
concluding that it should not look past Addison's assertion that
it was suing only as an individual.
In an October 2, 2013 Opinion available at http://is.gd/6P5abR
from Leagle.com, the Seventh Circuit reversed the remand order.
"Despite Addison's disclaimer of its status and duties as class
representative, it has standing to pursue relief against Hartford
only as class representative," the Seventh Circuit said. "The
declaratory judgment action is in substance a class action that
was properly removed to federal court," it added.
HITACHI AUTOMOTIVE: Faces Suit After Price-Fixing Guilty Plea
-------------------------------------------------------------
Lorraine Bailey at Courthouse News Service reports that days after
pleading guilty to price-fixing and agreeing to pay a $195 million
criminal fine, Hitachi Automotive was hit with a federal consumer
class action.
Ifeoma Adams and 51 others sued Hitachi Automotive Systems,
Hitachi Automotive Systems America, Denso Corporation and Denso
International America in Detroit.
The consumers accuse Hitachi and Denso of "engaging in a long-
running conspiracy to unlawfully fix, artificially raise, maintain
and/or stabilize prices, rig bids for, and allocate the market and
customers in the United States for air flow meters."
An air flow meter is an automotive part that measures the volume
of air flowing into a car's engine, which determines how much fuel
is needed to inject into the engine's cylinders.
Hitachi and eight other Japanese auto parts companies pleaded
guilty to criminal conspiracy, and agreed to pay a total of $740
million in fines for inflating the costs on more than $5 billion
worth of automotive parts, including air flow meters, the
Department of Justice announced on September 26, 2013.
The price-fixed automobile parts were sold to Chrysler, Ford and
General Motors, as well as U.S. subsidiaries of Honda, Mazda,
Mitsubishi, Nissan, Toyota and Subaru.
Hitiachi itself will pay a $195 million fine for its role in the
conspiracy.
"The automotive parts investigation is the largest criminal
investigation the Antitrust Division has ever pursued, both in
terms of its scope and the potential volume of commerce affected
by the alleged illegal conduct," the class says. "The ongoing
cartel investigation of price-fixing and bid-rigging in the
automotive parts industry has yielded more than $1.6 billion in
criminal fines, already surpassing the total amount in criminal
fines obtained by the DOJ's Antitrust Division for all of last
fiscal year."
The Justice Department has also said there is "no doubt" that
consumers were hurt financially, the complaint says.
"Plaintiffs and the members of the classes have sustained injury
to their businesses or property, having paid higher prices for air
flow meters than they would have paid in the absence of the
defendants' and their co-conspirators' illegal contract,
combination, or conspiracy, and, as a result, have suffered
damages in an amount presently undetermined," according to the
suit. "This is an antitrust injury of the type that the antitrust
laws were meant to punish and prevent."
The plaintiffs say their claims are not untimely because they had
no way of discovering the conspiracy until the Justice Department
announced Hitachi's anticipated guilty plea.
They seek damages as well as restitution for violation of anti-
trust laws.
Canadian consumers filed suit over the price-fixing in July.
The Plaintiffs are represented by:
E. Powell Miller, Esq.
THE MILLER LAW FIRM
950 W. University Drive, Suite 300
Rochester, MI 48307
Telephone: (248) 841-2200
E-mail: epm@millerlawpc.com
The case is Adams, et al. v. Hitachi Automotive Systems, Ltd., et
al., Case No. 2:13-cv-14226-SFC-MKM, in the U.S. District Court
for the Eastern District of Michigan (Detroit).
HOUSEHOLD INT'L: Loses Motion for New Class Action Trial
--------------------------------------------------------
Bloomberg News reports that the HSBC Holdings Plc unit once known
as Household International Inc lost its bid to undo a 2009
securities fraud trial verdict and is liable for about US$1.5
billion in damages plus interest, a judge ruled.
US District Judge Ronald Guzman in Chicago on Oct. 5 denied the
lender's motions for a new trial or a decision in its favor and
ordered plaintiffs' lawyers to submit a proposed final judgment
within five days.
"This court expressly determines that there is no just reason for
delay and directs that a final judgment be entered" in favor on
almost 11,000 claims, Judge Guzman said in his ruling. He awarded
almost US$968 million in prejudgment interest.
Household stockholders sued in 2002, alleging the company and
three executives made misleading statements about its mortgage-
lending practices. The lender had earlier agreed to pay US$484
million in fines to settle claims lodged by more than a dozen
states.
In May 2009, a jury decided the company, former Chief Executive
Officer William Aldinger and two other people made recklessly
misleading comments 16 times, and in one instance involving
Mr. Aldinger did so knowingly.
Neil Brazil, a spokesman for HSBC, didn't immediately respond to
phone and e-mail messages on Oct. 5 after regular business hours
seeking comment on the ruling.
Class-action plaintiffs' lawyer Spencer A. Burkholz --
spenceb@rgrdlaw.com -- a partner in San Diego-based Robbins Geller
Rudman & Dowd LLP, said he couldn't immediately comment on the
judge's order.
Four-year evaluation
While the trial jury had determined that stockholder losses from
March 23, 2001, to October 11, 2002, could be as much as US$23.94
a share, it made no lump-sum award. The ensuing claims evaluation
process lasted four years.
In a separate order on Oct. 4, Judge Guzman ratified a special
master's report that determined the damages to be awarded to four
different groups of claimants. The judge's ruling directs entry
of the largest sum of damages. The other claims remain to be
resolved.
A follow-up status conference with the court is scheduled for
October 23, according to Guzman's order.
Household was acquired by London-based HSBC in March 2003 for
US$15.5 billion. It is now known as HSBC Finance Corp.
The case is Lawrence E. Jaffe Pension Plan v. Household
International Inc., 1:02-cv-05893, US District Court, Northern
District of Illinois (Chicago).
INTERGROUP CORP: Subsidiary Agreed to Settle Suit for $525,000
--------------------------------------------------------------
In February 2013, a subsidiary of the InterGroup Corporation,
Justice Investors limited partnership, agreed to settle a putative
wage and hour class action against the Partnership for $525,000,
according to the Company's Form 10-K filing with the U.S.
Securities and Exchange Commission for the fiscal year ended June
30, 2013.
In August 2012, two current and four former employees of
InterGroup's Hotel segment commenced a putative wage and hour
class action against the Partnership. The Complaint alleged that
the Partnership failed to provide compliant meal periods, failed
to authorize and permit compliant rest periods, failed to pay all
regular and overtime wages due, failed to provide accurate
itemized wage statements, and failed to pay all wages owed upon
termination of employment.
In February 2013, the Partnership agreed to settle the class
action lawsuit for $525,000. The amount was accrued as of June 30,
2013 and is included as part of "Accounts payable and accrued
liabilities" in the Balance Sheets. Prism Hotels L.P. agreed to
reimburse the Partnership for 50% of the total amount of the
settlement and pay up to $300,000 of legal fees and defense costs
incurred in defense of the lawsuit. During fiscal 2013, the
Company incurred legal costs of $365,000 associated with the
lawsuit, of which Prism agreed to pay $300,000 in accordance with
the agreement. The amount due to Prism at June 30, 2013, for the
management fee was applied against the receivable for the
reimbursement of the settlement and legal costs. The Partnership
insurance carrier awarded $225,000 in insurance proceeds as a
result of a claim related to the settlement. Of the total
proceeds, 50% or $112,500 was allocated to the Partnership and the
remaining amount was allocated to Prism. The insurance
reimbursement awarded to the Partnership was offset against the
related legal expense.
The Company is involved from time to time in various claims in the
ordinary course of business. Management does not believe that the
impact of such matters will have a material effect on the
financial conditions or result of operations when resolved.
The InterGroup Corporation was organized to buy, develop, operate,
rehabilitate and dispose of real property of various types and
descriptions, and to engage in such other business and investment
activities. The Company operates in three segments: the operation
of the hotel (Hotel Operations), the operation of its multi-family
residential properties (Real Estate Operations) and the investment
of its cash in marketable securities and other investments
(Investment Transactions). As of June 30, 2012, the Company owned
approximately 79.9% of the common shares of Santa Fe Financial
Corporation (Santa Fe). Santa Fe's revenue is generated through
its 68.8% owned subsidiary, Portsmouth Square, Inc. (Portsmouth).
The Company also directly owns approximately 12.5% of Portsmouth.
Portsmouth's principal business is conducted through its general
and limited partnership interest in the Justice Investors limited
partnership (Justice).
INTUIT INC: Gets Final Approval of Settlement in Customers' Suit
----------------------------------------------------------------
District Judge Edward J. Davila granted final judgment and final
approval of the class action settlement in TASHA SMITH and
FREDIERICK SMITH, Plaintiffs, v. INTUIT INC., a Delaware Corp.,
Defendant, CASE NO. 12-CV-00222-EJD, (N.D. Calif.).
The Settlement is in all respects fair, reasonable, adequate and
in the best interests of the Class, said Judge Davila.
The Class consists of all Intuit customers in the United States
who used Intuit's TurboTax online and utilized the Refund
Processing Service from the time period from and including January
12, 2008, through May 28, 2013. Excluded from the class are all
persons who elected to exclude themselves from the class, Intuit,
the Court and staff to whom the case is assigned, and any member
of the Court's or staff's immediate family.
A copy of the District Court's October 1, 2013 Order is available
at http://is.gd/1lChVVfrom Leagle.com.
LEGZ CLUBS: Plaintiffs' Lawyers Get $138,000 From Settlement
------------------------------------------------------------
Kyla Asbury, writing for The West Virginia Record, reports that a
class action lawsuit filed by two former exotic dancers has been
settled.
Entertainment of the Eastern Panhandle Inc. is doing business as
the Legz Clubs.
The Legz Club Inc.; Legz Morgantown Inc.; and Troy W. Erickson
were also named as defendants in the suit.
An amended order granting joint motion for final settlement
approval was filed Oct. 1.
The parties jointly moved for an order granting final approval to
a Fair Labor Standards Act Collective and Rule 23 Class Action
Settlement, according to the order.
Of the $347,000 Gross Settlement Amount, $194,500 shall be paid to
the FLSA Collective Members and Rule 23 Class Members over time.
The plaintiffs' attorneys received $138,000 for attorneys fees.
Arielle Jordan, also known as Queen, and Patrice Ruffin, also
known as Karma, were exotic dancers at the defendants' club,
according to a complaint filed March 8, 2011, in the U.S. District
Court for the Northern District of West Virginia at Martinsburg.
The plaintiffs claimed Jordan worked approximately four nights per
week and Ruffin worked approximately five nights per week.
During the plaintiffs' employment, the defendants required the
plaintiffs to arrive at work at approximately 6:30 p.m. and
allowed them to conclude their work duties at approximately 3:30
a.m., according to the suit.
The plaintiffs claimed they defendants did not pay either of them
any wages for work duties performed and the defendants implemented
and utilized a system whereby each of them was required and
compelled to pay the defendants, out of personal tips, $10 for
each private dance performed.
The defendants also required each plaintiff to pay $40 out of her
personal tips for each session in the Champagne Room, $30 for each
session in the "shower room" and $10 each night to the bartender
and $10 to the disk jockey, according to the suit.
The plaintiffs claimed the defendants failed to pay them at an
hourly rate at least equal to the minimum wage and failed to do
so.
The defendants violated the Fair Labor Standards Act and the West
Virginia Wage Payment and Collection Act, according to the suit.
The plaintiffs were seeking compensatory damages. They were being
represented by Garry G. Geffert -- geffert@wvdsl.net -- and
Gregg C. Greenberg of the Zipin Law Firm LLC.
The case was assigned to District Judge Gina Groh.
U.S. District Court for the Northern District of West Virginia at
Martinsburg case number: 3:11-cv-00019
LEIGHTON HOLDINGS: Disputes Class Action Over Kickback Claims
-------------------------------------------------------------
Jared Lynch, writing for BusinessDay, reports that Leighton
Holdings rejected claims of impropriety amid allegations that its
staff were aware of multimillion-dollar kickbacks paid to Iraqi
officials.
Even so the construction company is facing a shareholder class
action seeking to recover some of the losses as almost AU$1
billion was wiped off its market capitalization.
It comes after a Fairfax Media investigation revealed a
handwritten note by former managing director David Stewart that
suggests he and former chief executive Wal King knew of a
AU$42 million kickback paid to Iraqi officials to secure a AU$750
million oil pipeline project.
Fairfax Media also published a preliminary tender document that
showed the signature of former Leighton senior executive David
Savage that included an alleged kickback to win a lucrative
project in Iraq.
Advertisement
High-profile lawyer Mark Elliott lodged a writ on behalf of
shareholders in the Victorian Supreme Court. Mr. Elliott, a
Leighton shareholder, said the company should have been more
upfront about the extent of the allegations, being investigated by
the Australian Federal Police.
Leighton group secretary Vanessa Rees attacked the media coverage
in The Age, The Sydney Morning Herald and The Australian Financial
Review, saying in a statement it was important that media reports
about the AFP investigation were "fair and balanced".
"Leighton does not propose to correct all of the inaccuracies
contained in a number of media articles," Ms. Rees said, but was
not specific. She said it was not appropriate for Leighton "to
descend to debate over matters of errors" when those matters were
subject to court processes.
The statement said Leighton's board and management "condemn any
form of corrupt or fraudulent behavior".
"When the Leighton board became aware of David Stewart's
handwritten file note it referred the matter to the AFP and has
been co-operating with the AFP since that time."
In regards to the class action, Ms Rees dismissed the claims by
Mr. Elliott, who said he lodged the writ on behalf of more than
10,000 shareholders. "The company denies there is a proper basis
for the alleged claim and will vigorously defend this class
action," the Leighton statement said.
The writ also alleges that Leighton failed to notify the market
about misbehavior involving senior officers responsible for
"important aspects" of its business in Indonesia, which the
company investigated internally and has begun action in the NSW
Supreme Court seeking AU$5.6 million damages from the former
employee.
Leighton informed the Australian Stock Exchange of the AFP
investigation in February last year, saying it was "fully
co-operating on possible breach of code of ethics".
Mr. Elliott said the Leighton statement appeared more of a public
relations exercise than a company fulfilling its legal obligations
under the Corporations Act.
"It was all sort of in a governance-type context and soft words,"
he said. "It said nothing. And I think the key to it all is the
market took it as such. If you look at the historical share price
it didn't blip."
Mr. Elliott, who is running the class action over collapsed
debenture issuer Banksia Securities, said he decided to act
swiftly on the Leighton writ because "enough was enough".
"It's gone on for three years. I just think it's time for
Leighton's to come clean and they have had plenty of time to
investigate."
Jenny Tallis at class action lawyers Maurice Blackburn said "the
market has been surprised by these serious corruption allegations
made over the past few days".
"We are of the view that our clients have strong prospects of
succeeding in a claim for compensation for Leighton's breaches of
the continuous disclosure laws," she said. "Given the strength of
our clients' claim we have been engaging in a pre-litigation
settlement process since May 2013."
According to The Australian Associated Press, Mr. Elliott said
that if more revelations emerged, the value of Leighton's shares
might be permanently diminished, he said.
Analysts warned that Leighton faced significant reputational and
financial damage from fines and Mr. Elliott speculated it might be
prohibited from tendering for government, World Bank or
international contracts, The Australian Associated Press reports.
LUNA TRADING: Recalls Certain Kujawianka Raisins in Chocolate
-------------------------------------------------------------
Starting date: October 8, 2013
Type of communication: Recall
Alert sub-type: Allergy Alert
Subcategory: Allergen - Milk
Hazard classification: Class 3
Source of recall: Canadian Food Inspection Agency
Recalling firm: Luna Trading
Distribution: Ontario
Extent of the product
distribution: Retail
CFIA reference number: 8379
Affected products: 500 g. Kujawianka Raisins in Chocolate with
Date of Production: 15.04.2013 and Best Before date of 15.10.2013
M&M TWINS: CFIA Recalls Certain MD Pineapple Marmalade
------------------------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Alert sub-type: Notification
Subcategory: Microbiological - Non harmful
(Quality/Spoilage)
Hazard classification: Class 3
Source of recall: Canadian Food Inspection Agency
Recalling firm: M&M Twins Limited
Distribution: Ontario
Extent of the product
distribution: Retail
CFIA reference number: 8347
Affected products: 375 ml. MD Pineapple Marmalade with Batch
Number: A01010601 MM70 7 71528 73044 0 and Date of Manufacture on
01/06/2013 and Best Before: 01/06/2015
MACK: Recalls 113 CXU and GU Models Trucks
------------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Subcategory: Truck - Med. & H.D.
Notification type: Safety Mfr
System: Steering
Units affected: 113
Source of recall: Transport Canada
Identification number: 2013345
TC ID number: 2013345
Manufacturer recall
number: SC0372
On certain vehicles, the tie rod end clamp bolts may not have been
torqued to specification. As a result, the tie rod ends could
separate from the tie rod, resulting in a loss of steering
control, increasing the risk of a crash causing injury and/or
damage to property.
Dealers will inspect repair vehicles as required.
Affected products:
Maker Model Model year(s) affected
----- ----- ----------------------
MACK CXU 2014
MACK GU 2014
MACK: Recalls 61 Multiple Vehicle Models
----------------------------------------
Starting date: October 7, 2013
Type of communication: Recall
Subcategory: Truck - Med. & H.D.
Notification type: Safety Mfr
System: Powertrain
Units affected: 61
Source of recall: Transport Canada
Identification number: 2013346
TC ID number: 2013346
Manufacturer recall
number: SC0371
On certain vehicles, spindle nuts may have been installed
incorrectly and could loosen, possibly resulting in the hub, wheel
and tire assembly separating from the vehicle. This could
increase the risk of a crash causing injury and/or property
damage. Also, should a wheel separate from the vehicle, it could
pose a danger to nearby motorists or bystanders, which could
result in injury and/or property damage.
Dealers will inspect and repair vehicles as required.
Affected products:
Maker Model Model year(s) affected
----- ----- ----------------------
MACK CXU 2013, 2014
MACK CHU 2013, 2014
MACK GU 2013, 2014
MACK LEU 2013, 2014
MACK MRU 2013, 2014
MAZDA: Recalls 161,400 Midsize Cars Over Door Latch Defect
----------------------------------------------------------
The Associated Press reports that Mazda is recalling 161,400
midsize cars in the U.S. because the doors can open while they're
being driven.
The recall affects Mazda6 cars from the 2009 through 2013 model
years. The company says the door latch mounting screws can
loosen. That can stop the doors from latching. If the latches
come loose, a door ajar light will warn drivers.
Mazda traced the problem to improper tightening at the factory or
uneven door surfaces. The company will notify owners and dealers
will put on a thread-locking adhesive and tighten the screws. The
recall will start around Oct. 18. Mazda says the problem hasn't
caused any crashes or injuries.
MCKESSON CORP: Dist. Court Stays Proceedings in "Ashley" Suit
-------------------------------------------------------------
In the case, MARVIN ASHLEY, et al., Plaintiffs, v. McKESSON
CORPORATION, a corporation, et al., Defendants, CASE NO. C 13-
03173 SBA, (N.D. Calif.), District Judge Saundra Brown Armstrong
granted the motion of Defendant SmithKline Beecham Corporation
d/b/a GlaxoSmithKline to stay all proceedings pending the transfer
by the Judicial Panel on Multidistrict Litigation to MDL 1871.
Judge Armstrong denied without prejudice the Plaintiffs' motion to
remand to state court.
A copy of the District Court's October 1, 2013 Order is available
at http://is.gd/UnyDK4from Leagle.com.
MEADOWBROOK INSURANCE: Extends Class Period in Class Action
-----------------------------------------------------------
Abbey Spanier, LLP on Oct. 7 disclosed that it has filed a class
action lawsuit against Meadowbrook Insurance Group, Inc. The
class action complaint, filed in the United States District Court,
Southern District of New York, and docketed under 13 CV 7094, is
on behalf of all those who purchased or otherwise acquired
Meadowbrook common stock during the period between January 25,
2012 and August 14, 2013, inclusive, and who were damaged thereby.
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.
The complaint was filed as a related case to another class action,
filed in the United States District Court, Southern District of
New York. The complaint filed on Oct. 7 by Abbey Spanier extends
the class period to include all those who purchased or otherwise
acquired Meadowbrook common stock during the period between
January 25, 2012 and August 14, 2013.
If you are a shareholder who purchased Meadowbrook securities
during the Class Period, you have until October 14, 2013 to ask
the Court to appoint you as Lead Plaintiff for the Class.
The Complaint brought by Abbey Spanier alleges that throughout the
Class Period, Defendants knowingly made material false and
misleading statements about the Company's financial condition and
operating results. Specifically, Defendants failed to disclose
that adverse market conditions materially impaired Meadowbrook's
business operations and the value of its intangible assets. The
value of Meadowbrook's assets included the acquisition of
ProCentury Corporation's excess and surplus lines of business.
Defendants also touted the way Meadowbrook operated its business
lines including its reserve process. The Defendants specifically
led investors to believe that it had a culture of disciplined
claims handling and reserve processing. In truth, throughout the
Class Period, Defendants' failed to disclose and misrepresented
the following material adverse facts which were known to them: (a)
that Meadowbrook's reported goodwill and intangible assets were
materially overstated; (b) that, as a result of its failure to
timely write-down goodwill, the Company's financial results during
the Class Period were materially overstated; (c) that the
Company's financial statements were not prepared in accordance
with GAAP and, therefore, were materially false and misleading;
(d) that the impairment charges were understated, and goodwill,
total assets, stockholders equity, net income and deferred income
and taxes were overstated; and (e) that the Company failed to
develop and implement adequate internal controls to insure that
the Company's financial results were adequately reported.
On August 2, 2013, A.M. Best Company downgraded the Company's
financial strength rating from "A-" (Excellent) to "B++" (Good).
Following the downgrade, on August 14, 2013, the Company announced
that it would take a non-cash impairment of goodwill of $115.4.
The impairment charge wiped out 95% of the Company's goodwill on
its balance sheet, and caused the Company to violate "financial
covenants" applicable to the certain credit facilities.
NAT'L FOOTBALL: Terry Bradshaw Comments on Concussion Class Action
------------------------------------------------------------------
Joe Soriano, writing for NFL Spin Zone, reports that former
Pittsburgh Steelers legendary quarterback Terry Bradshaw played
the game with the sort of toughness that marked the NFL of the
1970s and '80s, and Bradshaw was able to take some hard shots
without showing so much as a grimace afterwards. One of the
things that stands out to me about Bradshaw's playing style was
his attitude; he knew he had a strong enough arm to get it past
any defensive player. It was a point of pride for Bradshaw to gun
the ball into a window without having to look off the safety, and
that sort of tough attitude was one of the marks of Mr. Bradshaw's
career (the other has to do with those Super Bowl victories).
Terry Bradshaw spoke to the New York Daily News's Christian Red
about the class-action lawsuit on the NFL by thousands of former
players, and his thoughts are extremely interesting. Although
Mr. Bradshaw seems glad his peers took action, he stated that he
never considered joining the suit. Why? "I knew what I signed up
for."
That's what Mr. Bradshaw told the NYDN, and he expanded on that
quote by saying he knew that the "byproduct" of playing football
is injuries. He also spoke about adding guaranteed medical
insurance for former players following their retirement, which was
a suggestion made by another legendary player in Tony Dorsett.
Mr. Bradshaw said, "It's too late now. That could have been part
of it and they threw it out. (Retirees) needed money right now and
that's good. Could they have gotten more? Probably. But who
knows how long it would have taken and how many more of our former
athletes would have died or committed suicide. So if this money's
going to save lives and give comfort to a lot of players, then
OK."
Players had to have known that playing football equates to
injuries, and injuries, especially recurring ones, will definitely
have an adverse effect on a person later on in life. However, the
reason for the suit and the reason why the NFL is trying to
protect its players with more zeal is the fact that concussions
and head injuries carry severe long-term issues. What angers some
former players is the fact that the NFL covered up the magnitude
of the long-term ramifications of these injuries, but Mr.
Bradshaw's "I knew what I signed up for" assessment is both blunt
and true.
NEW ELK COMPANY: "Gerard" Suit Plaintiffs May Amend Complaint
-------------------------------------------------------------
Magistrate Judge Kathleen M. Tafoya granted a "Motion for Leave to
File First Amended Complaint Pursuant to Fed. R. Civ. P. 15(a)(2)"
in JAMES GERARD, JR., and MICHAEL COX, on behalf of themselves and
all others similarly situated, Plaintiffs, v. NEW ELK COAL
COMPANY, LLC, and STRATEGIC STAFFING SOLUTIONS, Defendants, CIVIL
ACTION NO. 13-CV-00277-RM-KMT, (D. Colo.).
Plaintiffs seek to amend the complaint to add Cline Mining
Corporation as defendant, and to make allegations that Cline,
Defendant New Elk Coal Company, LLC, and Defendant Strategic
Staffing Solutions should be held jointly and severally liable for
the Worker Adjustment and Retraining Notification (WARN) Act
violation alleged in the proposed amended complaint under the
"single employer" theory of liability.
A copy of the District Court's October 1, 2013 Order is available
at http://is.gd/w0z1I8from Leagle.com.
NEW ENGLAND COMPOUNDING: Steriod Compensation Process Complex
-------------------------------------------------------------
Todd Wallack, writing for The Boston Globe, reports that within
weeks after Dee Morell received a tainted shot to treat arthritis
in her left hip in September last year, she knew something was
horribly wrong.
The 49-year-old X-ray technician started to feel worse, not
better. Walking grew difficult, she needed constant painkillers,
and for the past 10 months she has been too weak to work, making
it a struggle to pay the mortgage.
But a year after federal investigators traced a nationwide fungal
meningitis outbreak to contaminated steroids made by a
Massachusetts pharmacy, Ms. Morell and hundreds of others who
received the drugs are still waiting to find out how much
compensation they will collect and when they will receive the
money.
"Everything about this is frustrating," said Ms. Morell, who was
diagnosed with a hip infection. "It would be of great help if the
money was released immediately. I wouldn't have to worry about
losing my home."
One of the biggest cases of drug contamination in recent American
history has sparked a long and complicated legal case to win
relief for victims. The Framingham pharmacy that made the drugs,
New England Compounding Center, surrendered its license Oct. 3
last year and soon afterward filed for bankruptcy following a
deluge of lawsuits, raising questions of when and how victims will
ultimately be paid.
"It's a not a simple process," said Fredric L. Ellis, a Boston
attorney representing several other victims who have sued the
pharmacy. "It's going to take time."
It is going to take a lot of money, too. Already, at least 619
victims have sued or filed a legal claim against New England
Compounding, and attorneys say thousands of victims could come
forward with total damages amounting to hundreds of millions of
dollars.
US Bankruptcy Court Judge Henry J. Boroff recently gave victims
until Jan. 15 to file a claim and signed off on plans to advertise
the deadline in more than 60 newspapers.
The US Centers for Disease Control and Prevention estimates that
750 people in 20 states have suffered fungal meningitis or other
complications linked to the methylprednisolone acetate injections,
including 64 people who died.
In addition, many of the 14,000 others who received tainted shots
have also reported various other maladies, such as headaches and
blurred vision, that do not fit within the CDC's official
definitions of the outbreak but could still register legal claims.
But New England Compounding reported it had just $1.3 million in
cash when it filed for bankruptcy, prompting plaintiffs' attorneys
to widen their search for anyone else who might be liable, from
the company that cleaned the pharmacy's clean room to the pain
clinics that administered the shots.
"Your theories of liability tend to stretch when the finances are
tight," said Seattle attorney William Marler, who has represented
victims of several major food contamination cases in which the
original manufacturer filed for bankruptcy.
It is a process that can take years, however. Mr. Marler and
other attorneys launched a similar search for compensation after a
2011 listeria outbreak that killed 33 people was traced to tainted
cantaloupes from Jensen Farms, prompting the Colorado farm to file
for bankruptcy. Within a year, plaintiffs' lawyers had collected
$4 million from Jensen Farms' estate and insurance policies to
begin paying victims, but are still pursuing claims against
retailers that sold the cantaloupes and other companies.
So far, government regulators have publicly blamed only one firm
for the tainted steroid injections, New England Compounding,
making it the most obvious target for lawsuits. Government
investigators said they found black material floating in some drug
vials and dirty equipment at the company's lab in Framingham,
indicating it was probably the source of the tainted drugs. They
also uncovered evidence the pharmacy knew the clean room was
contaminated and did not properly test the drugs before shipping
them to clinics.
But with New England Compounding in bankruptcy, attorneys are also
going after the pharmacy's owners and other companies owned by the
family that founded the firm, including a real estate firm and
recycling business in the same office complex in Framingham,
arguing the finances and operations were intertwined.
A judge agreed earlier in the year to freeze up to $21 million in
profits and other payments that New England Compounding made to
owners and other insiders in the year leading up to its
bankruptcy, some of which could potentially be recovered to pay
victims.
As much as $29 million more could potentially come from insurance
policies purchased by New England Compounding and its pharmacists,
according to two attorneys involved in the case. A spokesman for
New England Compounding and the owners declined comment.
But that is just the beginning of the hunt for money.
Plaintiffs' lawyers have already subpoenaed about 80 health care
providers across the country who administered the injections and
could potentially be liable, including Ocean State Pain Management
of Woonsocket, R.I., and Dr. O'Connell's Pain Care Center of
Somersworth, N.H.
In addition, attorneys have subpoenaed several of New England
Compounding's vendors that could potentially share some legal
exposure. Some of those companies include Wilmington-based
UniFirst, whose UniClean subsidiary cleaned the pharmacy's clean
room; Liberty Industries of East Berlin, Conn., which helped
design the pharmacy's clean room; and Analytical Research
Laboratories of Oklahoma City, which tested some drugs New England
Compounding distributed.
Plaintiffs' attorneys hope to encourage these and other companies
to contribute money to a fund for victims in exchange for a
promise of immunity from further litigation, something they
believe the courts are likely to approve as part of the bankruptcy
process. At the same time, they are seeking the names of patients
who received the injections, so they can be notified about their
right to make a claim.
But many of the companies have resisted the subpoenas or argued
they should not be blamed for the outbreak, raising questions of
how much they will be willing to contribute to a victims fund.
UniFirst spokesman Adam Soreff said the company only cleaned
portions of the pharmacy's clean room once a month.
"UniClean was not responsible for NECC's day-to-day operations,
its overall facility cleanliness, or the integrity of the products
it produced," Mr. Soreff said. "Therefore, we believe any claims
that may be brought against UniFirst or UniClean with respect to
the NECC matter are without merit."
Liberty Industries, meanwhile, objected to a subpoena it received,
arguing that all the work it did to design some clean rooms for
New England Compounding was completed years ago and was of "little
relevance" to the recent contamination.
"Liberty had no further involvement with NECC and had no
involvement with ongoing maintenance of the clean rooms," said the
company's attorney, Nicole D. Dorman. "This case arises from a
gross failure of maintenance" of the facilities.
But plaintiffs' lawyers are hoping the threat of costly litigation
that could drag on for years will prompt many companies to offer
to settle, even if they do not feel they are liable.
Most of the lawsuits filed in state and federal courts around the
country already have been consolidated in US District Court in
Boston, where Judge F. Dennis Saylor IV has approved a voluntary
mediation process for health care providers and other potential
defendants to work out settlements with the injured.
Only about five companies agreed to enter mediation by the initial
deadline last week, including the testing company and some health
clinics, according to Kimberly Dougherty, an attorney at the
Boston office of Janet, Jenner & Suggs, which is representing
about 100 victims.
Ms. Doughtery said she is hopeful more potential defendants will
opt to participate later. But Saint Thomas West Hospital of
Nashville, which is facing at least 100 lawsuits, complained in
court documents last week that victims' attorneys were trying to
"force them into its one-sided mediation program."
Many attorneys expect a quicker resolution with people and
companies directly tied to New England Compounding.
Thomas Sobol, lead counsel for the plaintiffs in the consolidated
litigation, said he believes the trustee handling the New England
Compounding bankruptcy will reach an agreement with the pharmacy's
principals and related entities this fall, paving the way to make
initial payments to patients as early as next spring.
But Mr. Sobol, who is based in Boston, predicted it will be
"nowhere near enough to compensate victims for their injuries" and
said it will probably take much longer to resolve claims against
all the other potential defendants.
Of course, as the case grinds on, some money that potentially
could go toward victims is likely to be eaten up by professional
fees in the bankruptcy case. Personal injury attorneys typically
keep between one-third to 40 percent of money they collect for
clients in pharmaceutical liability cases.
Paul D. Moore, the bankruptcy trustee in the case, said attorneys
are earnestly working together to limit the fees to maximize the
amount left for victims.
"I think it will be a meaningful amount of money" for patients,
Moore said, "but given the deaths and the injuries, there is no
amount adequate to compensate them for their losses."
In fact, lawyers said it is difficult to estimate exactly how much
victims are owed, based on their medical expenses, pain, lost
income, and other factors. Mr. Marler, the Seattle attorney, said
he has resolved death claims for anywhere from $100,000 to $10
million.
But one thing is certain: Many victims who survived the injections
are still waiting for help.
Mary Jo Tolbert was hospitalized for three weeks, had to be put on
dialysis when her kidneys stopped functioning, and did not fully
recover from her tainted injection for months.
"I have never been so sick," said Ms. Tolbert, 82, who lives in
Edwardsburg, Mich., and sued New England Compounding last October.
"For all I went through, I would like to be compensated."
NORMA'S WHOLESOME: Recalls Banana Bread and Cookies
---------------------------------------------------
Starting date: October 8, 2013
Type of communication: Recall
Alert sub-type: Allergy Alert
Subcategory: Allergen - Milk
Hazard classification: Class 1
Source of recall: Canadian Food Inspection Agency
Recalling firm: Norma's Bakery Ltd.
Distribution: Alberta, British Columbia, Manitoba,
Saskatchewan, Ontario, May be National
Extent of the product
distribution: Retail
The Canadian Food Inspection Agency (CFIA) and Norma's Bakery Ltd.
are warning people with allergies to milk not to consume the
banana bread and cookies. The affected products contain milk
which is not declared on the label.
There have been no reported illnesses associated with the
consumption of these products.
Consumption of these products may cause a serious or life-
threatening reaction in persons with allergies to milk.
The manufacturer, Norma's Bakery Ltd., Chilliwack, BC, is
voluntarily recalling the affected products from the marketplace.
The CFIA is monitoring the effectiveness of the recall.
Affected products:
Brand name Common name Size UPC
---------- ------------ ---- ----
-- Norma's Wholesome Banana Bread 100 g 7 73510 00231 3
Bakery Goods 7 73510 00231 3
-- Norma's Wholesome
Bakery Goods Chocolate Chip 100 g 7 73510 00232 0
Banana Bread
-- The Goodyman Chunky chocolate 100 g 6 83978 00003 8
(cookies)
NORVELL SKIN: Recalls Tanning Products Over Misleading Labels
-------------------------------------------------------------
Starting date: October 8, 2013
Posting date: October 8, 2013
Type of communication: Consumer Product Recall
Subcategory: Cosmetics
Source of recall: Health Canada
Issue: Labelling and Packaging
Audience: General Public
Identification number: RA-36093
Affected products: Various Tanning Products
The recall involves the following five tanning products
manufactured by Norvell Skin Solutions:
-- Professional Sunless Mist;
-- 360 Sunless Eco Mist;
-- ONE Hour Rapid ONE Sunless Mist;
-- Wash Away Instant Bronze Airfoam Mousse; and
-- Amber Sun Self Tanning Spray with Instant Bronzers
Health Canada has identified these products that do not have the
mandatory labelling as required under Canadian law.
The products lack the symbol and warnings required for potentially
flammable and explosive products. The lack of labelling
information, including appropriate warnings, could potentially
result in the misuse of these products and lead to serious injury.
Health Canada has not received any reports of incidents or
injuries related to the use of these products.
Approximately 948 units of the affected products were sold at
various distributors throughout Canada.
The recalled tanning products were manufactured in the United
States and sold between October 1, 2012 and September 10, 2013 in
Canada.
Companies:
Manufacturer Novell Skin Solutions
Alexandria
Tennessee
United States
Consumers should immediately stop using the recalled products and
return them to place of purchase for a full refund.
NUTREX RESEARCH: Accused of Falsely Advertising Efficacy of Niox
----------------------------------------------------------------
Michael Ayon, on behalf of himself and all others similarly
situated v. Nutrex Research, Inc., a Florida Corporation, and Does
1-10, inclusive, Case No. 2:13-cv-07268-R-AS (C.D. Cal.,
October 1, 2013) accuses the Defendants of violating the False
Advertising Law, California's Unfair Competition Law and
California's Consumer Legal Remedies Act.
In connection with its marketing of its product, Niox, the Company
claims that the Product's efficacy in producing Nitric Oxide is
derived from the ingredient L-Arginine, a conditionally essential
amino acid that serves as a pre-cursor for Nitric Oxide, Mr. Ayon
says. The Company adds that that boosting Nitric Oxide levels
leads to vasodilation, augmenting the delivery of nutrients to
working muscles.
The Defendants make these claims on the label of the Product: (i)
"Nitric Oxide Stimulator," (ii) "Super Nitric Oxide Formula," and
(iii) "Swells Muscles With Super-Pump Effect." In reality, the
Product contains such trace amounts of L-Arginine that the Product
is completely ineffective at stimulating Nitric Oxide production,
as the Company represents, Mr. Ayon alleges. Thus, he contends,
the Company's representations as to the efficacy of the Product at
utilizing L-Arginine to stimulate Nitric Oxide production are
completely false and misleading.
Mr. Ayon is a resident of Los Angeles County, California. He
purchased Niox from Vitamin Shoppe in Northridge, California,
towards the end of 2012.
Nutrex is a Florida corporation that manufactures, markets and
sells Niox. Mr. Ayon does not know the true names and capacities
of the Doe Defendants.
The Plaintiff is represented by:
Michael Louis Kelly, Esq.
Behram V. Parekh, Esq.
Heather Marie Baker, Esq.
Amir David Benakote, Esq.
KIRTLAND AND PACKARD LLP
2041 Rosecrans Avenue, Suite 300
El Segundo, CA 90245
Telephone: (310) 536-1000
Facsimile: (310) 536-1001
E-mail: mlk@kirtlandpackard.com
bvp@kirtlandpackard.com
hmb@kirtlandpackard.com
adb@kirtlandpackard.com
REXFORD INDUSTRIAL: Berger & Montague, Kreindler File Class Action
------------------------------------------------------------------
On October 4, 2013, the law firm of Berger & Montague, P.C. and
Kreindler & Kreindler LLP filed a class action Complaint in the
Los Angeles County Superior Court on behalf of investors in
Rexford Industrial Fund III, LLC, alleging breach of fiduciary
duty, violation of the California Corporate Securities Laws of
1968, negligent misrepresentation, and fraud on the part of the
managers of Rexford III in connection with a July 2013 rollup
transaction where Units of Rexford III were converted into shares
or Units convertible into shares of Rexford Industrial Realty,
Inc.
Rexford III was a California Limited Liability Company formed in
2005 for the purpose of investing in Southern California
industrial real estate. From 2005 to 2013, it was managed by
Rexford Industrial, LLC. In 2013, the principals of Rexford
Industrial, LLC initiated a transaction through which the Units of
Rexford III would be converted into common shares (or Units
convertible into common shares) of a new publicly traded Real
Estate Investment Trust, Rexford Industrial Realty, Inc.
The Complaint alleges that the rollup transaction resulted in the
Rexford III investors losing over 95% of the value of their
capital investments, while the three principal officers of Rexford
Industrial, LLC received shares worth over $42 million. The
Complaint further alleges that Rexford Industrial, LLC and its
three principals breached their fiduciary duties to the Unit
Holders of Rexford III by arranging for a rollup transaction that
resulted in the huge losses, grossly undervalued Rexford III and
unlawfully overvalued the interests of the manager and affiliated
entities. It further alleges that the same defendants are also
liable for fraud and negligent misrepresentation for their role in
drafting or disseminating disclosure documents through which
investors' consent to the rollup transaction was procured. As
alleged in the Complaint, those documents did not disclose either
the value of the consideration that Rexford III Unit Holders would
receive, or the amount by which the principals of Rexford
Industrial, LLC would be enriched, and they were otherwise
materially misleading.
The attorneys listed below represent the plaintiffs in the class
action lawsuit:
Sherrie R. Savett, Esq.
Arthur Stock, Esq.
Russell Paul, Esq.
BERGER & MONTAGUE, P.C.
1622 Locust Street
Philadelphia, PA 19103
Telephone: 800-424-6690
E-mail: info@bm.net
Web site: http://www.bergermontague.com
- and -
Gretchen M. Nelson, Esq.
Gabriel S. Barenfeld, Esq.
KREINDLER & KREINDLER LLP
707 Wilshire Boulevard, Suite 3600
Los Angeles, CA 90017
Telephone: (213) 622-6469
E-mail: gnelson@kreindler.com
barenfeld@kreindler.com
Web site: http://www.kreindler.com
Berger & Montague, P.C., founded in 1970, is a pioneer in class
action litigation and have extensive expert in securities
litigation and a long track record of success in such cases. The
firm's 60 attorneys concentrate their practice in complex
litigation, including securities fraud, whistleblower and false
claims actions and have recovered several billion dollars for
consumers and investors.
Kreindler & Kreindler LLP, based in Los Angeles, also concentrate
their practice in class action and multi-district litigation.
RUAN TRANSPORT: "Williams" Suit to be Remanded to State Court
-------------------------------------------------------------
KEVIN WILLIAMS, et al., Plaintiffs, v. RUAN TRANSPORT CORPORATION,
et al., Defendants, CASE NO. 1:13-CV-01157-LJO-SAB (E.D. Calif.),
is a class action filed on October 10, 2008, in Alameda County
Superior Court. On February 3, 2009, the action was transferred
to Tulare County Superior Court. On July 23, 2013, Defendant Ruan
Transport Corporation (RTC) removed this action to the Eastern
District of California. Plaintiffs filed a motion to remand on
August 19, 2013. On September 4, 2013, Defendants filed an
opposition to the motion to remand and request for judicial
notice. Plaintiffs filed a reply on September 11, 2013.
In an October 2, 2013 Findings and Recommendations available at
http://is.gd/HdGQIbfrom Leagle.com, Magistrate Judge Stanley A.
Boone finds that RTC's removal of the action was not within the 30
days required by 28 U.S.C. Section 1446 under any of the theories
advanced by RTC. Accordingly, the Court recommends that:
1. Plaintiffs' motion to remand be granted:
2. Plaintiffs' motion for attorney fees be granted; and
3. the action be remanded to state court.
SAN FRANCISCO UNIFIED: Court Nixes Jurisdiction in "Lopez" Suit
---------------------------------------------------------------
In the case, ROXANNE LOPEZ, as guardian ad litem of L.L.; et al.,
on behalf of themselves and all others similarly situated,
Plaintiffs, v. THE SAN FRANCISCO UNIFIED SCHOOL DISTRICT, CARLOS
GARCIA, in his official capacity as SUPERINTENDENT, and the SCHOOL
BOARD, in their official capacities, Defendants, CASE NO. C99-3260
SI, (N.D. Calif.), District Judge Susan Illston ruled that
pursuant to a stipulation of the parties, the Court's jurisdiction
over the matter is terminated with the exception of any issues to
be resolved regarding any dispute concerning reasonable attorneys'
fees and costs with respect to monitoring the performance of the
stipulated judgment resolving all of the class claims of the
certified classes in the case.
A copy of the District Court's October 1, 2013 Order is available
at http://is.gd/pK9eybfrom Leagle.com.
DENNIS J. HERRERA -- cityattorney@sfgov.org -- State Bar #139669
City Attorney, JAMES M. EMERY -- jim.emery@sfgov.org -- State Bar
#153630 Deputy City Attorney, San Francisco, California, Attorneys
for Defendants THE SAN FRANCISCO UNIFIED SCHOOL DISTRICT
("SFUSD"), CARLOS GARCIA, in his official capacity as
SUPERINTENDENT, And the SCHOOL BOARD.
SCHNEIDER WALLACE COTTRELL KONECKY LLP GUY B. WALLACE --
gwallace@schneiderwallace.com -- Counsel for Plaintiff Classes.
SANTA CRUZ NATURAL: Scheduling Order Entered in "Swearingen" Suit
-----------------------------------------------------------------
District Judge Susan Illston issued a scheduling order pursuant to
a stipulation by the parties in MARY SWEARINGEN and ROBERT FIGY,
individually and on behalf of all others similarly situated,
Plaintiffs, v. SANTA CRUZ NATURAL, INC., Defendant, CASE NO.
13-CV-4291-SI, (N.D. Calif.)
Judge Illston directed the Defendant to respond to the Complaint
by December 6, 2013. Plaintiffs' opposition to any motion to
dismiss filed by the Defendant is due January 10, 2014, and the
Defendant's reply is due January 24, 2014. Motion hearing is set
for February 7, 2014 at 9 a.m.
A copy of the District Court's October 3, 2013 Order is available
at http://is.gd/I71YQ8from Leagle.com.
Robert B. Hawk -- robert.hawk@hoganlovells.com -- (Bar No.
118054), J. Christopher Mitchell -- jcmitchell@hhlaw.com -- (Bar
No. 215639), Stacy Hovan -- stacy.hovan@hoganlovells.com -- (Bar
No. 271485), HOGAN LOVELLS US LLP, Palo Alto, California,
Attorneys for Defendant, SANTA CRUZ NATURAL, INC.
SENTINEL OFFENDER: Mantooth to Serve as Class Representative
------------------------------------------------------------
Sandy Hodson, writing for The Augusta Chronicle, reports that
Nathan Mantooth is an unlikely candidate to be the face for a
class action lawsuit against the private probation company
Sentinel Offender Services, but he never thought he would find
himself handcuffed and hauled off to jail.
A quiet, polite man intent on working hard and taking care of his
family, Mr. Mantooth doesn't want to be in the center of a
contentious legal battle, but what happened to him wasn't right,
he said.
"I know I was driving badly, but I did everything I was supposed
to do," said Mr. Mantooth, whose trouble started with a traffic
offense.
The 20-year-old is one of more than a dozen plaintiffs in lawsuits
challenging the constitutionality of a private, for-profit company
performing a judicial function. The suits also accuse Sentinel
employees of causing the false arrest and jailing of thousands of
people.
A series of lawsuits were filed in late 2012, and on Sept. 16, a
judge ruled that Mr. Mantooth and others should never have been
arrested and jailed.
On March 18, Mr. Mantooth was driving with his 2-year-old daughter
when he was stopped in Harlem for not wearing a seat belt. After
the officer ran the normal check for outstanding warrants, a hit
came back for a probation violation.
A warrant for Mr. Mantooth's arrest was granted because a Sentinel
probation officer told Richmond County State Court Judge Patricia
Booker that he hadn't complied with any of the conditions that
Judge Booker set when he pleaded guilty Jan. 23 to improper lane
change.
The judge imposed a fine and surcharges of $420 and ordered him to
complete the state-mandated safe-driving class and serve one year
on probation. But Judge Booker also said that once he paid his
fine and completed his class, he wouldn't have to report to
probation.
That was important to Mr. Mantooth. He was already out $400 to
$500 for the lawyer, the $420 fine and $75 for the class. If he
could cut out a $35 monthly probation fee, he intended to do that.
Mr. Mantooth paid the fine before leaving the courthouse Jan. 23
and signed up for the class that afternoon. He completed the
course Jan. 30, and the next day he took time off work to take his
certificate to the Sentinel office.
Mr. Mantooth said he was told his information hadn't been entered
into the computer system yet. He said they wouldn't make a copy
of his certificate. On Feb. 15, he took more time off work to
make a second visit to Sentinel. Again he was told he wasn't in
the computer yet.
On Feb. 27, the warrant for Mr. Mantooth's arrest was issued
because he allegedly hadn't paid the fine or restitution, attended
the class or reported to probation. However, Mr. Mantooth didn't
owe any restitution and his sentencing documents show he had
already paid the fine.
At later court hearings, Sentinel attorneys contended that the
company had no record that Mr. Mantooth came to its office. They
said Sentinel had only a previous address for Mr. Mantooth and
that it was his responsibility to provide current contact
information.
Mr. Mantooth is adamant that he gave his new address to the court
clerk and Sentinel when he paid his fine and that his lawyer also
forwarded the information to Sentinel.
Donna Mantooth was incredulous when her son's girlfriend called
March 18 saying Nathan was being arrested. She insisted on
talking to the officer, who said he had no choice. She went to
the Richmond County jail to find out why her son had been arrested
and how to get him out. It took all day and cost her $103 -- not
a fine, but the money Sentinel claimed it was owed for providing
probation services to Mr. Mantooth.
"I was thinking (while in jail): What am I going to do? I got a
2-year-old and a girlfriend at home depending on me," Nathan
Mantooth said. He was worried about his job and missing work. "I
didn't know anything about what was going on."
The Mantooth family aren't people who sue, Donna Mantooth said,
and they taught their sons to respect the law. What she wants the
most is for it to have never happened, so that her son wouldn't
have a memory of being arrested in front of his child, she said.
Mr. Mantooth said he would like for the city to cancel its
contract with Sentinel and hire a company that would follow the
rules, or Georgia should go the way of other states and
decriminalize traffic offenses. He had to borrow the money to pay
for ticket. He's since paid it back.
If the class action suit is successful, the Mantooth family can
recover the $103 Donna Mantooth paid to get her son out of jail.
Many others will also get back any money paid to Sentinel after
the expiration date of their original sentence.
Sentinel is appealing the Sept. 16 ruling by Superior Court Judge
Daniel J. Craig, contending that he has misinterpreted the state
statute governing private probation.
As Judge Craig noted at a recent hearing, the Legislature might
change the law on private probation companies next year. During
the 2012-13 session, Sentinel lobbied for changes to allow private
companies to seek the suspension of a probation sentence when a
probation violation warrant is obtained.
According to the Private Probation Association of Georgia, during
the last quarter of 2012, there were more than 254,000 people
serving misdemeanor probation terms.
According to an application to renew its insurance, Sentinel's
revenue in the month of June 2012 was more than $5.58 million.
Judge Craig's ruling is limited to Richmond and Columbia counties.
Other judges, including Superior Court judges in Cobb County, are
following his lead in misdemeanor cases and recalling several
hundred probation violation warrants.
In Richmond County, about 5,000 such warrants have been issued but
haven't been served. Judge Craig's ruling will keep those
warrants from being enforced for anyone whose original sentence
has expired. They will be among the people Mr. Mantooth will
serve as the class representative.
ST. GEORGE, UT: Attorney Mulls Class Action Over Ordinances
-----------------------------------------------------------
Dallas Hyland, writing for St. George News, reports that on
Sept. 27, St. George attorney Aaron Prisbey sent a letter to St.
George City attorney Shawn Guzman advising him of the intent to
file a federal lawsuit on behalf of his client and others affected
by continuous and egregious Fourth Amendment violations by city
code enforcement officers, namely, warrantless searches of citizen
properties.
The City's code enforcement ordinances include the following
provision on which it claims its authority to inspect property:
he ACE (Administrative Code Enforcement) administrator or any
enforcement official is authorized to enter upon any property or
premises to ascertain whether the provisions of this code or
applicable state codes are being obeyed and to make any
examinations and surveys as may be necessary in the performance of
the enforcement duties. This may include the taking of
photographs, samples, or other physical evidence. All
inspections, entries, examinations, and surveys shall be done in a
reasonable manner based upon cause. If the responsible person
refuses to allow the ACE administrator or enforcement official to
enter the property, the ACE administrator or enforcement official
shall obtain a search warrant.
The threatened lawsuit comes in light of the current city statute;
the code enforcement division's argument has been that it will not
conduct searches if told by the property owner to leave. But this
is not a proper application of law. Civil rights under the
Constitution are assumed, they do not have to be asserted in order
for the constitutional rights to apply. This is to say that a
citizen does not have to tell an officer to observe their rights
in order for the officer to be required by law to do so. This
should be obvious.
The operative word here being obvious. Apparently, the city does
not think so.
At present, according to records obtained from the city by
Mr. Prisbey, he said that it has been ascertained that the
officers conducted warrantless searches on private property some
3,600 times in the last five years. At present, there is ample
evidence to proceed with the lawsuit, Mr. Prisbey said, and he
intends to do so unless some kind of resolution can be reached.
In an October 3 letter to the St. George City Attorney's office,
Mr. Prisbey offered to discuss with the city a possible remedy and
resolution before going forth with the lawsuit. This is to say
that at present, Mr. Prisbey is willing to listen to what the city
has to say and was willing to defer filing the lawsuit to allow
for discussions on certain conditions.
Late on Oct. 3, the city did ask Mr. Prisbey to hold off on filing
the suit until Oct. 8, suggesting that a repeal of the ordinance
was on the table. The city representatives said they will only
discuss the illegal search and seizures. Nothing more.
Mr. Prisbey said he responded offering his own conditions that the
repeal, as well as accountability and compensatory damages be
discussed.
On Oct. 4, Mr. Prisbey said the city first agreed late in the
afternoon to acceptable meet and discuss terms, with a proposed
meeting for Oct. 8. Later in the afternoon, he said the city
recanted those conditional terms but remained willing to meet and
discuss the issues on Oct. 8. In other words, the city made no
promises as it first did to conform the existing code to one that
is defensible under the Constitution and to remedy fines and other
damages suffered by Prisbey's proposed class action plaintiffs.
STANFORD INT'L: Supreme Court Hears Ponzi Class Action Arguments
----------------------------------------------------------------
Jesse J. Holland, writing for The Associated Press, reports that
the Supreme Court on Oct. 7 debated whether to allow continued
class-action lawsuits from investors who lost billions in former
Texas tycoon R. Allen Stanford's massive Ponzi scheme.
Justices listened to lawyers argue over whether lawsuits should
proceed against individuals, law firms and investment companies
that allegedly aided Stanford's fraud.
Stanford was sent to prison for 110 years after being convicted of
what prosecutors termed a $7.2 billion Ponzi scheme on investors.
The fraud stemmed from the sale of certificates of deposits from
the Stanford International Bank that supposedly were backed by
safe investments in securities issued by governments,
multinational companies and international banks. But those
investments did not exist.
At issue before the court is whether the federal Securities
Litigation Uniform Standards Act, a federal law aimed at limiting
private lawsuits that allege securities fraud, can be used to
block the suits investors filed in Louisiana and Texas. The law
says class-action suits related to securities fraud cannot be
filed under state law, as these suits were.
A federal judge initially threw them out, but the 5th U.S. Circuit
Court of Appeals in New Orleans said the suits could go forward.
The appeals court found that the investment scheme is not covered
by SLUSA because the main part of the fraud involved the
certificates of deposit, not stocks and other securities.
"What has to be bought here is a stock, and instead, what was
bought here was a CD," lawyer Thomas Goldstein said. "This is a
case of a massive fraud. He could well have said, this is a case
of a massive securities fraud. But it was not a case of a covered
securities fraud. The plaintiffs here bought something that
Congress specifically excluded from preclusion under SLUSA."
A couple of the justices suggested that because there had been no
actual purchase or sale of a covered security -- only promises --
this case could not fall under the federal law.
The law "could have read 'in connection with the purchase or
sale,' or the 'promised purchase or sale', or the 'contemplated
purchase or sale,' but it doesn't. It says, 'in connection with
the purchase or sale,'" said Justice Antonin Scalia. "I don't
know how you can make that stick to a situation where there has
been no purchase or sale."
"That's true, your honor, but it also doesn't say the consummated
purchase or sale. And so I think the purported, intended,
consummated, all those things are swept up in the text,"
Justice Department lawyer Elaine J. Goldenberg said.
Lawyer Paul Clement warned justices against creating an artificial
line. "You don't want to draw a line that basically says, look,
if you buy different securities than you were supposed to or you
sell fewer than you were supposed to, that's covered, but if
you're a Madoff and you go all the way and simply lie about the
whole thing and there never were any securities purchases at all,
that that's somehow better," Mr. Clement said.
Justices will make a ruling sometime next year.
SYKES ENTERPRISES: Court Grants Conditional Class Certification
---------------------------------------------------------------
Sommers Schwartz, P.C. on Oct. 7 disclosed that in a decision
filed October 3, 2013, in Williams, et al. v. Sykes Enterprises,
Inc., et al, No. 13-0946 (D. Minn.), Magistrate Judge Jeanne J.
Graham granted Plaintiffs' motion seeking "conditional
certification of a class numbering approximately 51,000 employees,
including former employees" pursuant to the Fair Labor Standards
Act, 29 U.S.C. Sec. 216(b). The Plaintiffs, who are a collection
of call-center and at-home customer service agents ("CSAs"),
"alleged that Defendants refused to pay them for pre-shift login
time, including boot-up time, as well as post-shift
responsibilities, including call completion."
Noting the standard for certification is a "fairly lenient
standard," the Court ruled that Plaintiffs "met their relatively
low burden in conditionally certifying this collective action."
Although Sykes has denied a company-wide policy exists requiring
CSAs to work prior to their compensable time starting, the Court
reasoned that, "with affidavits from eleven of twenty-two call
centers at the time of the hearing, there is evidence that it was,
in fact, a company-wide policy." In conditionally certifying the
case as a collective action, the Court additionally allowed
potential class members the ability to opt-in electronically or in
hardcopy form.
Sykes, which currently employs approximately 38,000 call-center
representatives, is a large publically traded company that
provides call center services for Fortune 1000 companies. It
currently operates twenty-two call centers in eleven states while
employing at-home agents in forty-fives states since their
acquisition of Alpine Access, Inc., a named-Defendant in the
current litigation. Sykes's recent Second-Quarter 2013 Financial
Results showed revenues from continuing operations of $304.7
million, including $25.1 million in revenue contribution from the
Alpine Access acquisition.
The case, filed by Johnson Becker, PLLC based in Minneapolis, MN,
is currently pending before Judge John R. Tunheim and Magistrate
Jeanne J. Graham in the United States District Court for the
District of Minnesota. The Court has appointed Timothy J. Becker,
Jacob R. Rusch, and David H. Grounds of Johnson Becker, PLLC;
Jason J. Thompson and Jesse L. Young of Sommers Schwartz, P.C.;
and Steven R. Maher of The Maher Law Firm as interim class
counsel.
Johnson Becker, P.L.L.C. http://www.johnsonbecker.com-- is a law
firm located in Minneapolis, Minnesota. It represents individuals
injured as the result of defective drugs and faulty medical
devices, automobile negligence, workers' compensation,
construction site accident litigation, products liability
litigation, premises liability litigation, wrongful death cases,
and fall cases involving collapsing scaffolding and scissor lifts.
Sommers Schwartz, P.C. -- http://www.sommerspc.com-- is a law
firm located in Southfield, Michigan. It represents individuals
in Michigan and across the country who have been harmed as a
result of medical errors, defective products, loss of employment,
and other forms of negligence or intentional injury, as well as
businesses involved in complex litigation matters that jeopardize
their existence.
YAHOO! INC: Eavesdrops Upon Users' Communications, Suit Says
------------------------------------------------------------
John Kevranian and Tammy Zapata, individually and on behalf of
those similarly situated v. Yahoo! Inc., a California Corporation,
Case No. 5:13-cv-04547-HRL (N.D. Cal., October 2, 2013) accuses
Yahoo! of unlawful, wrongful and intentional reading and learning
of the contents and meaning of the Plaintiffs' and Class Members'
communications and, in the alternative, eavesdropping upon or
recording their communications, in violation of the California's
Invasion of Privacy Act and the Electronic Communications Privacy
Act of 1986.
The Plaintiffs and the Class allege that Yahoo! intentionally and
as part of a common practice, reads, scans, processes, copies,
acquires content from, makes copies of content from, creates or
gathers data and information from the content of e-mails. They
argue that at the time Yahoo! reads, attempts to read, learns the
content or meaning of, eavesdrops upon, intercepts, and records
their electronic communications, Yahoo! does so without the
consent or authorization of any or all parties to the
communications, including the Plaintiffs and members of the Class.
The Plaintiffs are residents of San Bruno, California, County of
San Mateo.
Yahoo! is a Delaware Corporation headquartered in Sunnyvale,
County of Santa Clara, in the state of California. Yahoo! is the
owner and operator of an e-mail service known as "Yahoo! Mail."
The Plaintiffs are represented by:
Ara Jabagchourian, Esq.
Brian M. Schnarr, Esq.
COTCHETT, PITRE & McCARTHY, LLP
San Francisco Airport Office Center
840 Malcolm Road, Suite 200
Burlingame, CA 94010
Telephone: (650) 697-6000
Facsimile: (650) 697-0577
E-mail: ajabagchourian@cpmlegal.com
bschnarr@cpmlegal.com
ZOLTEK COMPANIES: Sells Itself Too Cheaply to Toray, Suits Claim
----------------------------------------------------------------
Courthouse News Service reports that carbon fiber manufacturer
Zoltek is selling itself too cheaply, $584 million, to Toray
Industries, shareholders claim in two class actions filed by the
law firm Shamburg Johnson.
*********
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
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A. Adala, Joy A. Agravante, Valerie Udtuhan, Julie Anne L. Toledo,
Christopher Patalinghug, Frauline Abangan and Peter A. Chapman,
Editors.
Copyright 2013. All rights reserved. ISSN 1525-2272.
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