/raid1/www/Hosts/bankrupt/CAR_Public/131022.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, October 22, 2013, Vol. 15, No. 209
Headlines
1ST STOP: Fails to Pay Employee's Overtime Premium, Suit Claims
950 ATLANTIC: Employee Seeks Overtime Wage and Other Relief
BANKRATE INC: Faces Suit in Minnesota Over Telemarketing Calls
BLACKBERRY LTD: Issued False and Misleading Statements, Suit Says
BLACKBERRY LTD: Canadian Shareholders Launch Class Action
BMW AG: Plaintiffs' Attorneys Oppose Bid to Dismiss Class Action
BORAH GOLDSTEIN: Accused of Violating Fair Debt Collection Law
CAL-MAINE FOODS: Awaits Okay of Direct Purchaser Suits Accord
CAMPBELL COUNTY, KY: State Law Claims in "Bramble" Suit Dismissed
CHELSEA THERAPEUTICS: Consolidated Securities Class Suit Dismissed
CONAGRA FOODS: Court Approved Settlement of Shareholder Lawsuits
CVS PHARMACY: Bradford Plaintiff's Summary Judgment Bid Denied
DARDEN RESTAURANTS: Court Certified Class for Fair Labor Claims
DEPUY ORTHOPAEDICS: Settles Hip Replacement Bellwether Cases
DIRECTV INC: Seeks Dismissal of Class Action Over Unwanted Texts
EQT PRODUCTION: AG Accused of Providing Inappropriate Legal Advice
FIREPOWER: Court Orders Mediation in Investor Class Action
GNC HOLDINGS: Bid to Stay Discovery in "Toback" Suit Denied
HALLIBURTON CO: U.S. Chamber of Commerce Files Amicus Brief
HERR FOODS: Delivery Drivers File Overtime Class Action
JTH HOLDING: Consolidated ERC Complaint at Early Procedural Stage
JTH HOLDING: Martin v. JTH Tax Case Settled in June 2013
KEYUAN PETROCHEMICALS: Rosen Lawsuit Currently at Discovery Stage
LIGHTINTHEBOX HOLDING: Levi & Korsinsky Declares Class Action
MALTA: PL Class Action Seeks Car Registration VAT Refund
MICROSOFT CORP: Xbox One's Terms Include Class Action Waiver
MIDAS CANADA: Osler Hoskin Discusses Class Action Settlement
OVERSEAS SHIPHOLDING: Claims Against Former Officers Dismissed
PILOT FLYING J: Nov. 25 Settlement Fairness Hearing Set
RENEGADE WIRELINE: Sued by Operator Over Unpaid Overtime Wages
RITE AID: Lawsuit Filed by Managers Still Pending
SP AUSNET: Bushfire Victims Seek to Exclude Tests as Evidence
SPI ELECTRICITY: Denies Allegations of Duping Bushfire Victims
STERICYCLE: Hagens Berman Appointed Lead Counsel in Class Action
U.S. AUTO: Bid to Dismiss Some Plaintiffs in "Rikard" Suit Denied
UNITED STATES: Southern Baptists Sue Over Contraception Regulation
WEALTHSURE PTY: Jones Day Discusses Class Action Dismissal
WELLS FARGO: Sued Over "Force-Placed" Hazard Insurance Policies
* Chinese Paper Says Class Action System Not Good for Hong Kong
* McGuireWoods Discusses Inconsistency in Class Action Treatment
*********
1ST STOP: Fails to Pay Employee's Overtime Premium, Suit Claims
---------------------------------------------------------------
Ernesto Manzanillo, on his own behalf and others similarly
situated v. 1st Stop Grocery, Inc., a Florida Corporation & David
Manzu, Individually, Case No. 8:13-cv-02595-RAL-TGW (M.D. Fla.,
October 8, 2013) accuses the Defendants of violating wage and hour
laws and the Fair Labor Standards Act.
From at least June 2012 and continuing through April 2013, the
Company failed to properly compensate him, Mr. Manzanillo alleges.
He contends that he received no premium compensation for hours
worked in excess of 40 hours in a single work week. He adds that
he was only paid his salary, regardless of the amount of actual
hours he worked.
Mr. Manzanillo is a resident of Pasco County, Florida. He worked
as a non-exempt, salary paid 1st Stop "grocery associate" from
June 2013 through April 2013.
1st Stop is engaged in business as a full service grocery store
with two locations in Florida. Mr. Manzu is a resident of the
state of Florida, who owned and operated the Dade City location of
1st Stop.
The Plaintiff is represented by:
Cecilia M. Barber, Esq.
MORGAN & MORGAN, PA
600 N Pine Island Rd., Suite 400
Plantation, FL 33324
Telephone: (954) 318-0268
Facsimile: (954) 333-3515
E-mail: CBarber@forthepeople.com
950 ATLANTIC: Employee Seeks Overtime Wage and Other Relief
-----------------------------------------------------------
Hector Flores v. 950 Atlantic Collision, Inc., a Florida
corporation, Case No. 1:13-cv-23627-JEM (S.D. Fla., October 8,
2013) is brought on behalf of current and former employees of the
Defendant seeking overtime compensation and other relief under the
Fair Labor Standards Act.
This action is brought to recover from the Defendant overtime
compensation, liquidated damages, an enforceable judgment, and the
costs and reasonable attorney's fees of this action under the
provisions of the FLSA, Mr. Flores contends. He asserts that the
lawsuit is also a civil action against the Defendant, whereby he
seeks a Declaratory Judgment as the Defendant have placed in doubt
his right to receive overtime wages; Preliminary and
Permanent Injunctive Relief enjoining the Defendant and other
conspirators, agents, servants and employees from engaging in
further violations of the FLSA.
Mr. Flores is a resident of Miami Dade County, Florida.
950 Atlantic Collision Inc. owns and operates a business in Miami
Dade County. The Company has two or more employees, who have
regularly sold, handled, or otherwise worked on goods and
materials that had been moved in or produced for commerce.
The Plaintiff is represented by:
Richard J. Caldwell, Esq.
LAW OFFICES OF RICHARD J. CALDWELL, P.A.
2151 S. Le Jeune Road, Suite #300
Coral Gables, FL 33134
Telephone: (305) 529-1040
Facsimile: (305) 424-2690
E-mail: caldwelllaw@bellsouth.net
BANKRATE INC: Faces Suit in Minnesota Over Telemarketing Calls
--------------------------------------------------------------
Steven Nicoski, an individual on behalf of himself and all others
similarly situated v. Bankrate, Inc., a Delaware corporation, Case
No. 0:13-cv-02783-JRT-SER (D. Minn., October 8, 2013) accuses the
Defendant of violating the Telephone Consumer Protection Act
("TCPA").
For over four years preceding this action, the Defendant engaged
in a campaign of invasively marketing to consumers, who placed
their telephone numbers on the National Do Not Call Registry, Mr.
Nicoski asserts. He notes that over the past four years, the
Defendant or some third party on its behalf has placed thousands,
perhaps millions, of telemarketing calls in violation of the TCPA.
By effectuating these calls, he continues, the Defendant has
caused consumers actual harm, not only because consumers were
subjected to the aggravation that necessarily accompanies
unsolicited telephone marketing, but also because consumers
frequently have to pay their cell phone service providers for
"minutes" of wireless telephone usage.
Steven Nicoski is a citizen of the state of Minnesota, residing in
Dakota County.
Bankrate, Inc. is a Delaware corporation headquartered in North
Palm Beach, Florida. Bankrate operates nationally through a brand
and division known as "Bankrate Insurance," which is headquartered
in Denver, Colorado.
The Plaintiff is represented by:
Mark L. Heaney, Esq.
HEANEY LAW FIRM, LLC
13911 Ridgedale Drive, Suite 110
Minnetonka, MN 55305-1773
Telephone: (952) 933-9655
Facsimile: (952) 544-1308
E-mail: mark@heaneylaw.com
- and -
Alexander H. Burke, Esq.
BURKE LAW OFFICES, LLC
155 N. Michigan Ave., Suite 9020
Chicago, IL 60601
Telephone: (312) 729-5288
Facsimile: (312) 729-5289
E-mail: ABurke@BurkeLawLLC.com
BLACKBERRY LTD: Issued False and Misleading Statements, Suit Says
-----------------------------------------------------------------
Benyamin Kohanim, Individually and on Behalf of All Others
Similarly Situated v. Blackberry Limited (formerly known as
Research In Motion Limited), Thorsten Heins and Brian Bidulka,
Case No. 1:13-cv-07132-UA (S.D.N.Y. October, 8, 2013) is a
securities class action lawsuit brought on behalf of the
purchasers of Blackberry common stock between September 27, 2012,
and September 19, 2013, against Blackberry and certain of its
officers and directors.
The Defendants published a series of materially false and
misleading statements during the Class Period, the Plaintiff
alleges. Specifically, the Plaintiff contends, Blackberry failed
to inform investors that, contrary to the Defendants' statements
touting the Company's new Blackberry 10 line of smart phones and
the financial strength of Blackberry, the Company was not on the
road to recovery and re-emerging as a lead player in the wireless
communications industry. In reality, the Plaintiff adds, the
Blackberry 10 was not well-received by the market, and the Company
was forced to write down a nearly $1 billion charge related to
unsold Blackberry 10 devices and to layoff around 4,500 employees,
which totals approximately 40% of its total workforce.
Benyamin Kohanim purchased Blackberry common stock at an alleged
artificially inflated price during the Class Period and was harmed
when the price of Blackberry stock dropped as a result of the
revelations of the truth at the end of the Class Period.
Blackberry was incorporated under the laws of Canada and is
headquartered in Ontario. Blackberry is a designer, manufacturer
and marketer of wireless solutions for the worldwide mobile
communications market. The Company provides platform and
solutions for access to e-mail, voicemail, instant messaging,
short message service, Internet and Intranet-based applications,
and browsing through the development of integrated hardware,
software and services.
Thorsten Heins is the president and chief executive officer of the
Company. Brian Bidulka is chief financial officer of the Company.
They personally certified all Blackberry financial reports during
the Class Period.
The Plaintiff is represented by:
Jeremy Alan Lieberman, Esq.
Lesley Frank Portnoy, Esq.
POMERANTZ HAUDEK BLOCK GROSSMAN & GROSS LLP
600 Third Avenue, 20th Floor
New York, NY 10016
Telephone: (212) 661-1100
Facsimile: (212) 661-8665
E-mail: jalieberman@pomlaw.com
lfportnoy@pomlaw.com
- and -
Patrick V. Dahlstrom, Esq.
POMERANTZ HAUDEK BLOCK GROSSMAN & GROSS LLP
10 South La Salle Street, Suite 3505
Chicago, IL 60603
Telephone: (312) 377-1181
Facsimile: (312) 377-1184
E-mail: pdahlstrom@pomlaw.com
- and -
Peretz Bronstein, Esq.
BRONSTEIN GEWIRTZ & GROSSMAN LLP
60 E. 42nd Street, Suite 4600
New York, NY 10165
Telephone: (212) 697-6484
Facsimile: (212) 697-7296
E-mail: peretz@bgandg.com
BLACKBERRY LTD: Canadian Shareholders Launch Class Action
---------------------------------------------------------
Merchant Law Group disclosed that shareholders launched class
action litigation before the Quebec Superior Court on Oct. 15
against BlackBerry Limited on behalf of Canadian shareholders who
purchased BlackBerry stock between September 27, 2012 and
September 20, 2013.
"For almost a full year, BlackBerry management made market
statements based on prophecy rather than fact. Thousands of
Canadians who invested in BlackBerry Limited in the past year have
lost hundreds of millions of dollars." said Tony Merchant, Q.C.,
referencing the class action litigation launched in Quebec on
Oct. 15 seeking compensation for current and former BlackBerry
Limited shareholders.
The class action lawsuit alleges that BlackBerry Limited and its
senior management knowingly or negligently misrepresented that the
BlackBerry 10 line of smartphones were being received well by
international consumers and the public at large, and that
BlackBerry Limited was in a strong financial position.
Only with the announcement of BlackBerry Limited's preliminary
quarterly results (for the three months ending August 31, 2013) on
September 20, 2013, did a realistic picture of BlackBerry
Limited's situation get revealed to the public, which included the
announcement an almost $1 billion write-down and BlackBerry's plan
to layoff 4,500 staff or approximately 40% of BlackBerry's
workforce.
BlackBerry Limited's TSX share price immediately slid from a
previous closing price of C$10.82 per share on September 19, 2013
to a closing price of C$8.26 by September 25, 2013.
BlackBerry Limited 52-week high on the TSX was C$17.80 in January
2013.
The class action lawsuit commenced on Oct. 15 in Quebec is similar
to a lawsuit recently filed in Ontario. Like many Canadian
investors who relied on the previous public statements made by
BlackBerry Limited and its management, the Ontario representative
plaintiff lost over C$55,000 due to purchasing BlackBerry Limited
shares in the last year. Together, these class actions are the
only litigation seeking compensation on behalf of TSX BlackBerry
Limited investors.
People seeking further information about the 2013 BlackBerry
Limited Class Action should provide their contact information at
https://www.merchantlaw.com/classactions/blackberry.php
Merchant Law Group LLP is a Canadian class action firm with 12
offices across Canada from Montreal to Victoria. Merchant Law
Group LLP is well known for its involvement in mass tort and class
action cases in Canada including Residential Schools, Cellular
System Access Fees, Hollinger, Maple Leaf Foods, Toyota, Vioxx,
and many other cases.
BMW AG: Plaintiffs' Attorneys Oppose Bid to Dismiss Class Action
----------------------------------------------------------------
Jenna Reed, writing for glassBYTES.com, reports that attorneys
representing two BMW owners have opposed the automaker's motion
for the court to dismiss the class action status in a lawsuit over
an alleged sunroof defect in the U.S. Northern District Court of
California, San Francisco division. The owners allege their
vehicles suffered water damage after the drainage tubes installed
to pull water away from the sunroofs did not properly work.
Monita Sharma and Eric Anderson, BMW owners and California
residents, claim the class should include California residents who
have "owned or leased any BMW X5 series vehicles, X3 series
vehicles and 5 series vehicles."
BMW attorneys claim that the class action status should be
dismissed as "unsuitable."
In opposition, the plaintiffs' attorneys claim, "Despite well-
settled case law disfavoring motions to strike class allegations
at the pleading stage and discussing the premature nature of such
motions, BMW of North America LLC has nevertheless decided to
bring this motion to entice the court into an unnecessary
examination of class certification issues. . . . However, BMW
makes this argument by ignoring and contorting the core issues
that in fact make this case well-positioned for class treatment.
While it would be procedurally inappropriate to consider BMW's
premature challenge to a class certification motion that
plaintiffs have yet to bring, plaintiffs' well-pleaded FAC readily
demonstrates the viability of class certification based on claims
involving: a uniform safety defect present across all class
vehicles, BMW's uniform written warranties and its wholesale
refusal to honor its warranties, the standard written materials
that accompany all class vehicles and BMW's failure to disclose
and active concealment of the uniform defect."
". . . Plaintiffs have alleged that class vehicles are equipped
with defective sunroof drains that are prone to clogging and
rupturing and are routed through the trunk compartment," attorneys
claim. "These defective sunroof drain tubes provide a common
source of water ingress to the trunk compartment, where class
vehicles' electronic components are housed. This defect presents
a serious safety hazard and makes the vehicles 'unreasonably
dangerous to consumers because of the danger of catastrophic
electrical system failure . . . the vehicles are unsafe to drive."
"Had plaintiffs and class members known of the defects, they never
would have purchased or leased their vehicles and/or would have
refused to pay for repairs that BMW was obligated to cover,"
attorneys claim. "Plaintiffs and class members have suffered loss
of money and loss in the value of their vehicles, while BMW has
profited and continues to profit from the marketing and sale of a
product known by it to be defective. These allegations and
plaintiffs' claims are readily susceptible to class treatment."
The plaintiffs also allege that they never received a copy of
BMW's Certified Pre-Owned Warranty when they purchased the
vehicles. BMW's attorneys claim the warranty specifies that the
automaker will not cover the water damage alleged by the
plaintiffs.
"BMW contents that exhibit C is a 'true and correct copy of BMW
North America's Certified Pre-Owned Warranty as issued with
plaintiff Sharma and Anderson's purchases of used BMW vehicles.'
However, as stated in the declarations attached hereto, neither
plaintiff Sharma nor plaintiff Anderson received the CPOW attached
to BMW's request with the purchase of their certified pre-owned
vehicles," plaintiffs' attorneys claim.
The judge had not issued any decisions at press time.
BORAH GOLDSTEIN: Accused of Violating Fair Debt Collection Law
--------------------------------------------------------------
Shimshon Wexler, on behalf of himself and all others similarly
situated v. Borah, Goldstein, Altschuler, Nahins & Goidel, PC;
Stephen C. Shulman, Case No. 1:13-cv-07134-MGC (S.D.N.Y.,
October 8, 2013) alleges violations of the Fair Debt Collection
Practices Act ("FDCPA").
In December 2007, Mr. Wexler signed a residential lease with
Acquisition America VII. He notes that the lease does not allow
for the collection of attorney's fees for either (i) sending a
rent demand to a tenant, or (ii) filing a petition for non-payment
of rent. Borah Goldstein, however, demanded legal fees of $75, he
alleges. He adds that in a petition for non-payment of rent dated
April 23, 2013, Borah Goldstein demanded legal fees of $235.
Mr. Wexler is an individual.
Borah Goldstein is a debt collection law firm. Stephen C. Shulman
is a senior partner at Borah Goldstein.
The Plaintiff is represented by:
Aaron Cohen, Esq.
THE COHEN LAW OFFICE, PC
300 East 42nd St., 10th Floor
New York, NY 10017
Telephone: (212) 813-2000
Facsimile: (212) 537-6861
E-mail: acohen@cohenlawpc.net
CAL-MAINE FOODS: Awaits Okay of Direct Purchaser Suits Accord
-------------------------------------------------------------
Cal-Maine Foods, Inc., on August 2, 2013, entered into a
settlement agreement in the direct purchaser putative class action
and agreed to pay $28 million to fully and finally resolve these
claims, 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.
Since September 25, 2008, the Company has been named as one of
several defendants in numerous antitrust cases involving the
United States shell egg industry. In some of these cases, the
named plaintiffs allege that they purchased eggs or egg products
directly from a defendant and have sued on behalf of themselves
and a putative class of others who claim to be similarly situated.
In other cases, the named plaintiffs allege that they purchased
shell eggs and egg products directly from one or more of the
defendants but sue only for their own alleged damages and not on
behalf of a putative class. In the remaining cases, the named
plaintiffs are individuals or companies who allege that they
purchased shell eggs and egg products indirectly from one or more
of the defendants - that is, they purchased from retailers that
had previously purchased from defendants or other parties -- and
have sued on behalf of themselves and a putative class of others
who claim to be similarly situated.
The Judicial Panel on Multidistrict Litigation consolidated all of
the putative class actions (as well as certain other cases in
which the Company was not a named defendant) for pretrial
proceedings in the United States District Court for the Eastern
District of Pennsylvania. The Pennsylvania court has organized the
putative class actions around two groups (direct purchasers and
indirect purchasers) and has named interim lead counsel for the
named plaintiffs in each group.
There are now seven non-class suits pending. Six of the non-class
suits are pending in the United States District Court for the
Eastern District of Pennsylvania. The other non-class suit is
pending in District Court of Wyandotte County, Kansas. The
plaintiffs in two other non-class suits originally filed in the
Eastern District of Pennsylvania voluntarily dismissed their suits
without prejudice.
Direct Purchaser Cases
The direct purchaser cases were consolidated into In re: Processed
Egg Products Antitrust Litigation, No. 2:08-md-02002-GP, in the
United States District Court for the Eastern District of
Pennsylvania. The court granted with prejudice the defendants'
motion to dismiss the direct purchaser class plaintiffs' damages
claims arising before September 24, 2004.
On July 23, 2013, the Company announced that it reached an
agreement in principle to settle all direct purchaser class claims
against the Company in the direct purchaser putative class action.
The settlement agreement was entered into August 2, 2013, and the
Company agreed to pay $28 million to fully and finally resolve
these claims. The other terms and conditions of the proposed
settlement are not expected to have a material impact to the
Company's results of operations. A motion for preliminary approval
of the Company's settlement has been filed with the court. The
court has not yet set a hearing on that motion. All proceedings
against the Company in the direct purchaser putative class action
are stayed pending resolution of the request for approval of the
Company's settlement.
This settlement does not affect the indirect purchaser putative
class action and does not necessarily resolve the seven non-class
cases still pending.
Indirect Purchaser Cases
The indirect purchaser cases were consolidated into In re:
Processed Egg Products Antitrust Litigation, No. 2:08-md-02002-GP,
in the United States District Court for the Eastern District of
Pennsylvania. The court granted with prejudice the defendants'
renewed motion to dismiss damages claims arising outside the
limitations period applicable to most causes of action.
The court recently issued an order staying all discovery and
deadlines set forth in the Case Management Order No. 20 until
January 3, 2014, pending the outcome of case-wide mediation
efforts.
Some Cases Stayed Pending Mediation
Six of the cases in which plaintiffs do not seek to certify a
class have been consolidated with the putative class actions into
In re: Processed Egg Products Antitrust Litigation, No. 2:08-md-
02002-GP, in the United States District Court for the Eastern
District of Pennsylvania.
The court granted with prejudice the defendants' renewed motion to
dismiss the non-class plaintiffs' claims for damages arising
before September 24, 2004.
The court's order staying all discovery and deadlines set forth in
the Case Management Order No. 20 until January 3, 2014, also
applies to these cases pending the outcome of various mediation
efforts.
On January 27, 2012, the Company filed its answer and affirmative
defenses in the non-class case pending in Kansas state court
styled as Associated Wholesale Grocers, Inc., et al., v. United
Egg Producers, et al., No. 10-CV-2171, and the Company joined
other defendants in the Kansas case in moving to dismiss all
claims for damages arising outside the three-year statute of
limitations period and all claims for damages arising from
purchases of eggs and egg products outside the state of Kansas.
The court took under advisement the limitations motion, pending a
ruling in another case that will determine whether the limitations
period in the Kansas case will be three or five years. The court
reserved judgment on the motion to dismiss claims for damages
arising from purchases of eggs and egg products outside the state
of Kansas until discovery reveals which sales occurred within
Kansas. In reserving judgment, the court stated that only sales
within Kansas would be relevant to any calculation of alleged
damages. Discovery is ongoing in this case.
In all of the antitrust cases, the plaintiffs allege that the
Company and certain other large domestic egg producers conspired
to reduce the domestic supply of eggs in a concerted effort to
raise the price of eggs to artificially high levels. In each case,
plaintiffs allege that all defendants agreed to reduce the
domestic supply of eggs by (a) manipulating egg exports and (b)
implementing industry-wide animal welfare guidelines that reduced
the number of hens and eggs.
Both groups of named plaintiffs in the putative class actions seek
treble damages and injunctive relief on behalf of themselves and
all other putative class members in the United States. Both groups
of named plaintiffs in the putative class actions allege a class
period starting on January 1, 2000 and running "through the
present." The direct purchaser putative class action case alleges
two separate sub-classes -- one for direct purchasers of shell
eggs and one for direct purchasers of egg products. The direct
purchaser putative class action case seeks relief under the
Sherman Act. The indirect purchaser putative class action case
seeks injunctive relief under the Sherman Act and damages under
the statutes and common-law of various states and the District of
Columbia.
Seven non-class cases remain pending. In five of the remaining
non-class cases, the plaintiffs seek damages and injunctive relief
under the Sherman Act. In one of the remaining non-class cases,
the plaintiff seeks damages and injunctive relief under the
Sherman Act and the Ohio antitrust act (known as the Valentine
Act). In the other remaining non-class case, the plaintiffs seek
damages and injunctive relief under the Kansas Restraint of Trade
Act.
The Pennsylvania court has not set a trial date for any of the
consolidated cases. The Kansas state court has entered a schedule
for discovery and dispositive motions. The Kansas state court case
is set for trial starting June 16, 2014.
The Company intends to continue to defend these cases as
vigorously as possible based on defenses which the Company
believes are meritorious and provable. While management believes
that the likelihood of a material adverse outcome in the overall
egg antitrust litigation has been significantly reduced as a
result of the settlement in the direct purchaser putative class
action, assuming the court approves the proposed settlement, there
is still a reasonable possibility of a material adverse outcome in
the remaining egg antitrust litigation. At the present time,
however, it is not possible to estimate the amount of monetary
exposure, if any, to the Company because of these cases.
Accordingly, adjustments, if any, which might result from the
resolution of these remaining legal matters, have not been
reflected in the financial statements.
Cal-Maine Foods, Inc. is a producer and marketer of shell eggs in
the United States. During the fiscal year ended June 1, 2013
(fiscal 2013), the Company sold approximately 948.5 million dozen
shell eggs. Its primary business is the production, grading,
packaging, marketing and distribution of shell eggs. It sells most
of its shell eggs in the southwestern, southeastern, mid-western
and mid-Atlantic regions of the United States. The Company markets
its shell eggs through its distribution network to a group of
customers, including national and regional grocery store chains,
club stores, foodservice distributors and egg product
manufacturers. It sells shell eggs to a majority of the food
retailers in the United States. It is also a producers and
marketers of specialty shell eggs in the United States. Specialty
shell eggs include nutritionally enhanced, cage free and organic
eggs. The Company owns 100% of Benton County Foods, LLC.
CAMPBELL COUNTY, KY: State Law Claims in "Bramble" Suit Dismissed
-----------------------------------------------------------------
WILLIAM J. BRAMBLE, JR., ET AL., Plaintiffs v. CAMPBELL COUNTY,
KENTUCKY, ET AL., Defendants, CIVIL ACTION NO. 2010-183 (WOB-JGW),
(E.D. Ky.), is a class action by former detainees at the Campbell
County Detention Center (CCDC) against the jail, and against
Southern Health Partners (SHP), alleging cruel and unusual
punishment in violation of the 5th, 8th, and 14th Amendment and
plaintiffs' civil rights under 42 U.S.C. Section 1983. Plaintiffs
also allege various state law claims.
The Campbell County defendants filed a motion for summary judgment
as to plaintiff, Kimberly Eversole, both individually and as the
Administratrix of Michael Webb's estate, and the motion for
partial summary judgment of Southern Health Partners, as to
plaintiff, Kimberly Eversole, both individually and as the
Administratrix of Michael Webb's estate.
On March 25, 2011, the parties stipulated to the dismissal of
plaintiffs' class action allegations. Discovery ensued and, after
numerous extensions, the pending motions for summary judgment were
filed and briefed.
District Judge William O. Bertelsman ruled that (1) the motion of
the Campbell County Defendants for summary judgment as to
Plaintiff Kimberly Eversole is, granted as to Plaintiff's federal
claim; (2) the motion of Southern Health Partners for partial
summary judgment as to Plaintiff Kimberly Eversole is granted as
to Plaintiff's federal claim; and (3) Plaintiff Kimberly
Eversole's state law claims are dismissed without prejudice.
A copy of the District Court's October 10, 2013 Memorandum Opinion
and Order is available at http://is.gd/Yn8Xowfrom Leagle.com.
CHELSEA THERAPEUTICS: Consolidated Securities Class Suit Dismissed
------------------------------------------------------------------
District Judge Max O. Cogburn, Jr. granted the defendants' motion
to dismiss, with prejudice, the consolidated securities class
action complaint captioned CAMERON MCINTYRE, Plaintiff, v. CHELSEA
THERAPEUTICS INTERNATIONAL, LTD., et al., Defendants, NO. 3:12-CV-
213-MOC-DCK, (W.D. N.C.). A copy of the District Court's October
9, 2013 Order is available at http://is.gd/F9h9jHfrom Leagle.com.
CONAGRA FOODS: Court Approved Settlement of Shareholder Lawsuits
----------------------------------------------------------------
In its Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarterly period ended August 25, 2013, ConAgra
Foods, Inc., reported that shareholder derivative class action
lawsuits against the Company were settled during the third quarter
of fiscal 2013 and the Court approved the settlement during the
first quarter of fiscal 2014.
According to the Company, "during the third quarter of fiscal
2013, we were named a defendant in several shareholder derivative
class action lawsuits brought in the Circuit Court of the City of
St. Louis against directors of Ralcorp alleging breaches of
fiduciary obligations by them in connection with their approval of
the acquisition of Ralcorp. We were alleged to be an aider and
abettor of those breaches. The suits sought injunctive relief,
damages, attorney's fees, and other relief. There were other cases
pending in the same Court, which were consolidated and made
similar allegations against directors of Ralcorp to which we were
not named a defendant. All of these cases were settled during the
third quarter of fiscal 2013 for immaterial amounts. The
settlement of these lawsuits was approved by the Court during the
first quarter of fiscal 2014."
ConAgra Foods, Inc. (ConAgra Foods) is a food company. The Company
operates in two segments: Consumer Foods and Commercial Foods. The
Consumer Foods segment includes branded, private label, and
customized food products, which are sold in various retail and
foodservice channels, principally in North America. The products
include a variety of categories across frozen, refrigerated, and
shelf-stable temperature classes. The Commercial Foods segment
includes commercially branded foods and ingredients, which are
sold to foodservice, food manufacturing and industrial customers.
In January 2013, it acquired Ralcorp Holdings Inc. In September
2013, Brynwood Partners VI L.P. announced that its portfolio
company, Lightlife Foods, Inc., had acquired Lightlife, one of
ConAgra Foods' brands with product lines that include vegetarian-
based burgers, hotdogs and other meatless frozen and refrigerated
items. The acquisition includes the Lightlife manufacturing
operation in Turners Falls.
CVS PHARMACY: Bradford Plaintiff's Summary Judgment Bid Denied
--------------------------------------------------------------
District Judge Thomas W. Thrash, Jr., denied Plaintiff Bradford's
motion for summary judgment, granted Defendant CVS Pharmacy,
Inc.'s cross-motion for summary judgment, and denied Defendant CVS
Pharmacy's motion to decertify a collective action.
PHILIP BRADFORD on behalf of himself and others similarly
situated, Plaintiff, v. CVS PHARMACY, INC., Defendants, CIVIL
ACTION FILE NO. 1:12-CV-1159-TWT, (N.D. Ga.), is an action under
the Fair Labor Standards Act. The basis of the FLSA claim was an
allegation that CVS mislabeled certain employees as "Regional Loss
Prevention Managers" to avoid having to make pay overtime as
required by the FLSA. On July 3, 2012, Bradford moved for
conditional certification of a collective action, which was
granted on February 4, 2013.
A copy of the District Court's October 10, 2013 Opinion and Order
is available at http://is.gd/sFpX2lfrom Leagle.com.
DARDEN RESTAURANTS: Court Certified Class for Fair Labor Claims
---------------------------------------------------------------
In September 2013, the United States District Court for the
Southern District of New York conditionally certified a nationwide
class for the Fair Labor Standards Act claims only of tipped
employees who worked in The Capital Grille at any point from
November 17, 2008, through September 19, 2013, according to Darden
Restaurants, Inc.'s Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarterly period ended August 25,
2013.
In September 2012, a collective action under the Fair Labor
Standards Act was filed in the United States District Court for
the Southern District of Florida, Alequin v. Darden Restaurants,
Inc., in which named plaintiffs claim that the Company required or
allowed certain employees at Olive Garden, Red Lobster, LongHorn
Steakhouse, Bahama Breeze and Seasons 52 to work off the clock and
required them to perform tasks unrelated to their tipped duties
while taking a tip credit against their hourly rate of pay. The
plaintiffs seek an unspecified amount of alleged back wages,
liquidated damages, and attorneys' fees.
In July 2013, the United States District Court for the Southern
District of Florida conditionally certified a nationwide class of
servers and bartenders who worked in the aforementioned
restaurants at any point from September 6, 2009, through September
6, 2012. Unlike a class action, a collective action requires
potential class members to "opt in" rather than "opt out"
following the issuance of a notice. The notice period to "opt in"
as a class member commenced on August 12, 2013 and will close on
November 12, 2013. The Company will have an opportunity to seek to
have the class de-certified and/or seek to have the case dismissed
on its merits.
"We believe that our wage and hour policies comply with the law
and that we have meritorious defenses to the substantive claims
and strong defenses supporting de-certification. An estimate of
the possible loss, if any, or the range of loss cannot be made at
this stage of the proceeding," the Company said.
In November 2011, a lawsuit entitled ChHab v. Darden Restaurants,
Inc. was filed in the United States District Court for the
Southern District of New York alleging a collective action under
the Fair Labor Standards Act and a class action under the
applicable New York state wage and hour statutes. The named
plaintiffs claim that the Company required or allowed certain
employees at The Capital Grille to work off the clock, share tips
with individuals who polished silverware to assist the plaintiffs,
and required the plaintiffs to perform tasks unrelated to their
tipped duties while taking a tip credit against their hourly rate
of pay. The plaintiffs seek an unspecified amount of alleged back
wages, liquidated damages, and attorneys' fees.
In September 2013, the United States District Court for the
Southern District of New York conditionally certified a nationwide
class for the Fair Labor Standards Act claims only of tipped
employees who worked in the aforementioned restaurants at any
point from November 17, 2008, through September 19, 2013.
Potential class members are required to "opt in" rather than "opt
out" and members of the class will have 60 days to "opt in"
following the issuance of a notice. As with the Alequin matter,
the Company will have an opportunity to seek to have the class de-
certified and/or seek to have the case dismissed on its merits.
The Company said, "We believe that our wage and hour policies
comply with the law and that we have meritorious defenses to the
substantive claims in this matter. An estimate of the possible
loss, if any, or the range of loss cannot be made at this stage of
the proceeding."
Darden Restaurants, Inc. is a full service restaurant company. As
of May 26, 2013, the Company operated through subsidiaries 2,138
restaurants in the United States and Canada. In the United States,
it operated 2,105 restaurants in all 50 states, including 822
Olive Garden, 678 Red Lobster, 430 LongHorn Steakhouse, 49 The
Capital Grille, 44 Yard House, 33 Bahama Breeze, 31 Seasons 52,
nine Eddie V's Prime Seafood, six test synergy restaurants (which
house both a Red Lobster and Olive Garden restaurant in the same
building) and three Wildfish Seafood Grille restaurants. As of May
26, 2013, it operated 33 restaurants, including 27 Red Lobster and
six Olive Garden restaurants in Canada. Through subsidiaries, the
Company owns and operates all of its restaurants in the United
States and Canada, except for three restaurants located in Florida
and three restaurants in California.
DEPUY ORTHOPAEDICS: Settles Hip Replacement Bellwether Cases
------------------------------------------------------------
Amanda Bronstad, writing for The National Law Journal, reports
that DePuy Orthopaedics Inc. has quietly settled bellwether cases
that had been scheduled for trial over its hip implant device.
The abrupt resolution of cases that had been set for trial in
September and October came after a Los Angeles jury awarded $8.3
million against DePuy on March 8, but the company won a defense
verdict in Chicago on April 16.
According to Bloomberg News, Johnson & Johnson, DePuy's parent
company, is weighing an offer to pay $3 billion to settle more
than 10,000 cases over its ASR device.
Spokespeople for DePuy did not respond to requests for comment.
In the first trial, a California state jury awarded Loren Kransky
$8.3 million but rejected his bid for punitive damages. The
second trial, in state court in Illinois, found no liability
against DePuy, which was allowed for the first time to put on
evidence that the U.S. Food and Drug Administration had cleared
the ASR device for sale.
The next cases that had been set to go before jurors in state
courts have settled. Bergen County, N.J., Judge Brian Martinotti
issued an October 8 order indicating that the first bellwether
trial in that docket "has been resolved." No settlement terms
were disclosed; trial had been scheduled for October 21.
Judge Martinotti scheduled a case management conference for
November 21.
In the Kransky case, which took place in Los Angeles County,
Calif., Superior Court, DePuy was scheduled to file an opening
brief before the state's Second District Court of Appeals this
month. That brief was put off until December. The case was part
of the California state court consolidated litigation, pending
before San Francisco County, Calif., Superior Court Judge Richard
Kramer. On October 1, plaintiffs' attorneys filed a notice that
the next case scheduled for trial had settled. Terms of that deal
were not disclosed. Trial in that case had been scheduled for
October 15.
One of those plaintiffs' attorneys, Brian Panish of Panish Shea &
Boyle in Los Angeles, who represented Ms. Kransky, said the delay
in the appeal was "just part of normal appellate process." He
said other cases are settling because DePuy "is afraid of a
punitive damages award. Any hope of settlement will be dampened
if a big punitive damage award is received."
The next bellwether case in the California state litigation is
scheduled for January in Los Angeles, he said.
Meanwhile, in multidistrict litigation in Cleveland, Ohio, U.S.
District Judge David Katz adjourned for 90 days a September 24
trial in the first bellwether case on the federal docket, saying
that "scheduling of expert witnesses by both parties has become an
extremely difficult task." No new date has been scheduled.
Ellen Relkin of Weitz & Luxenberg in New York, co-lead counsel for
the plaintiffs' steering committee in the MDL, did not respond to
a request for comment.
More than 93,000 ASR metal-on-metal hip replacements worldwide
have been implanted in patients. DePuy voluntarily recalled its
device in 2010, but plaintiffs claim the company knew about
problems long before that and failed to warn doctors. Those
problems allegedly include pain, grinding or clicking in the hips
and a high metal content in blood tests.
DIRECTV INC: Seeks Dismissal of Class Action Over Unwanted Texts
----------------------------------------------------------------
Juan Carlos Rodriguez, Gavin Broady and Carolina Bolado, writing
for Law360, report that DirecTV Inc. on Oct. 11 asked a Florida
federal judge to toss a proposed class action accusing it of
sending unwanted texts to consumers' cellphones, saying the
complaint doesn't allege that the company actually sent the text
messages in question.
Plaintiff Bill Cooke alleges the satellite TV provider violated
the Telephone Consumer Protection Act by sending the text messages
and failing to stop its authorized dealers from employing
robodialing campaigns to advertise DirecTV's products. But
DirecTV says Cooke has not been able to show a connection between
the company and the text.
"Cooke complains that more than a year and four months ago, he
received a single text message (in Spanish) that mentioned the
DirecTV brand name and encouraged him to call a phone number with
an area code of 810," the company said in its motion to dismiss.
It said that Cooke has not alleged any facts that would show that
DirecTV itself sent the text or caused the message to be sent on
its behalf. As such, the complaint -- amended after a prior
motion to dismiss filed in August -- fails to satisfy the pleading
standard established by the U.S. Supreme Court in Bell Atlantic
Corp. v. Twombly.
"DirecTV demonstrated in this original response that plaintiff's
proposed class (which excluded all those who provided 'consent,' a
term used in the statute to provide a complete defense) could not
be certified because it was an impermissible fail-safe class that
was not ascertainable on its face," the motion said. "Plaintiff's
FAC attempts to 'solve' this problem by excising the word
'consent' and stating instead that the proposed class will consist
of persons called on a cellphone 'where the called party had not
previously provided such phone number to DirecTV.'"
But the company said Mr. Cooke's new turn of phrase, is simply a
longer way of saying "no consent."
"Plaintiff's ill-conceived effort to redefine a non-fail safe
class does not solve the problem of ascertainability because the
same individualized inquiry is still required: did this individual
provide the number (consent) or did he not (no consent). The
ascertainability problem remains and no amount of word-smithing
can fix it," the motion said.
And DirecTV said that other than some alterations to the class
definition, changing the caption to name a viable DirecTV
corporate entity, and adding a "conclusory" paragraph asserting
the superiority of class treatment, Mr. Cooke's amended complaint
is identical to his original complaint and does not address any of
the other problems identified by DirecTV in its original motion to
dismiss.
Mr. Cooke alleged that DirecTV is aware of the TCPA's prohibitions
against autodialed and prerecorded voice calls to cellphones, but
systematically uses the devices as part of calling campaigns to
gain customers, in spite of the knowledge.
Mr. Cooke, who has never been a DirecTV customer, says he received
an unsolicited automated text message in May 2012 that advertised
DirecTV's products. The TCPA bars such text messages, according
to the complaint. He says DirecTV knew its marketing agents were
acting in a way that violated federal law because the company has
been hit with a number of consumer complaints and lawsuits.
DirecTV is represented by Joshua Spoont, Alan Greer and Manuel
Garcia-Linares of Richman Greer PA.
Mr. Cooke is represented by Scott D. Owens PA, Alexander H. Burke
of Burke Law Offices LLC, Edward A. Broderick and Anthony I.
Paronich of Broderick Law PC, and the Law Office of Matthew P.
McCue.
The case is Cooke et al. v. DirecTV Inc., number 1:13-cv-22696, in
the U.S. District Court for the Southern District of Florida.
EQT PRODUCTION: AG Accused of Providing Inappropriate Legal Advice
------------------------------------------------------------------
The Associated Press reports that an assistant state attorney
general improperly advised two energy companies on how to defend
themselves against class-action lawsuits filed by southwest
Virginia landowners, but she did so without her bosses' knowledge,
according to a report issued on Oct. 15 by the Inspector General's
Office.
Inspector General Michael F. A. Morehart wrote that the attorney
"inappropriately used commonwealth resources in support" of
private litigation and provided legal strategy to the two
companies.
The attorney, whose name was redacted in the report, claimed she
was involved in the litigation to defend the constitutionality of
a law that is at the center of the case.
The class actions have been filed by attorneys representing
landowners who say they were cheated out of tens of millions of
dollars in royalties by the companies, which had drilled for
coalbed methane gas on their properties.
The inspector general's report said it uncovered no evidence that
the assistant AG received instructions from her bosses at the
Attorney General's Office and that she acted alone.
A spokesman for Attorney General Ken Cuccinelli, the Republican
candidate for governor, said the report backs what Mr. Cuccinelli
has said all along.
"Attorney General Cuccinelli had no prior knowledge of the content
of these emails and he did not authorize them," spokesman
Brian Gottstein said. "The attorney general has, however, taken
steps to ensure this doesn't happen again."
The investigation was sparked by the assistant attorney general's
email correspondence with EQT Production Co. and CNX Gas Co.,
which prompted a federal magistrate to write in June that she was
shocked by the advice to the companies on how to fight the
lawsuits. U.S. Magistrate Pamela Meade Sargent identified the
assistant state attorney in court papers as Sharon Pigeon, counsel
for the Virginia Gas and Oil Board.
Mr. Morehart examined dozens of emails from Pigeon to the
companies and found that while some pertained to the
constitutionality of a state law, others offered advice to the
energy companies on how to defend themselves in the class actions.
In one of the emails, for instance, she "provided advice to the
defense counsel on how to defeat a claim to coalbed methane
against the energy companies . . . based on procedural challenges
that (she) believed could be filed in a state court proceeding."
The report also cited other instances which Pigeon provided
"litigation strategy" to attorneys for the energy companies when
she claimed to be defending the constitutionality of a state law,
the report concluded.
The report quoted Pigeon as saying "you don't intervene and stand
over the corner somewhere. You intervene on one side or the
other."
Some of Pigeon's emails, however, were dated after the court
affirmed the constitutionality of the Virginia Gas and Oil Act.
Mr. Cuccinelli's office said Pigeon continued to be involved in
the case after the law had been upheld because attorneys for the
landowners continued to challenge it.
The inspector general's report said it interviewed the chairman of
the Gas and Oil Board and he did not request that Pigeon provide
any counsel to the companies beyond "the constitutionality of the
Virginia statute."
The board, the report said, did not request that Pigeon support
the companies "in any litigation or discussions dealing with
potential class action by the plaintiffs."
Mr. Morehart said Pigeon's superiors became aware of her emails
only after attorneys filed a discovery motion in the case, which
led to Sargent's criticism. She was removed from the case.
Democrats had seized on the disclosure because Mr. Cuccinelli has
received more than $100,000 from CONSOL Energy, the parent company
of CNX. Mr. Cuccinelli rejected "in the strongest possible terms"
any suggestion that campaign donations from CONSOL had influenced
his office's handling of the case.
"The innuendo and outright accusations by some that the attorney
general was working against landowners have been proven to be
patently false," Gottstein said in a statement.
Despite the report, a spokesman for Democratic gubernatorial
candidate Terry McAuliffe said Mr. Cuccinelli's office "improperly
used taxpayer dollars to help out-of-state energy companies in
their efforts to avoid paying Southwest Virginians natural gas
royalties."
Spokesman Josh Schwerin said Mr. Cuccinelli should return CONSOL's
campaign contributions.
FIREPOWER: Court Orders Mediation in Investor Class Action
----------------------------------------------------------
9News reports that a class action against failed fuel pill company
Firepower has been ordered to enter mediation, says litigation
funder IMF Australia.
The company advised the Australian Securities Exchange on
Oct. 15 that the Supreme Court of Western Australia had ordered
parties in the action to attend mediation on Dec. 5. But it
should not be taken to mean any more than the parties proposing to
discuss settlement in good faith, IMF said.
Perth-based Firepower promoted unproven fuel-saving pills until it
collapsed in 2008, leaving investors more than AUD100 million out
of pocket.
In May last year, liquidator Bryan Hughes of Pitcher Partners said
an investigation into the personal assets of disgraced former
Firepower boss Tim Johnston had been wound up because he and the
creditors did not want to sink more money into it. That
effectively ended any bid to recoup money lost by duped private
investors, Mr. Hughes said. He said Mr. Johnston was believed to
have squirrelled away millions of dollars offshore despite being
declared bankrupt after the company's fuel pill scandal.
In 2011, Justice John Gilmour of Perth's Federal Court banned
Johnston from managing any company for 20 years.
The Australian Securities and Investments Commission has estimated
AUD80 million was raised from Firepower share sales to about 1400
investors.
GNC HOLDINGS: Bid to Stay Discovery in "Toback" Suit Denied
-----------------------------------------------------------
District Judge James I. Cohn denied a motion to stay discovery in
ROBERT TOBACK, on behalf of himself and all others similarly
situated, Plaintiff, v. GNC HOLDINGS, INC., GNC CORPORATION, and
GENERAL NUTRITION CENTERS, INC., Defendants, CASE NO. 13-80526-
CIV-COHN/SELTZER, (S.D. Fla.).
The class action arises from the Defendants' alleged
misrepresentations regarding the health benefits of their TriFlex
line of products. The action is one of a handful of lawsuits
across the country alleging that Defendants' representations
pertaining to the TriFlex products harmed consumers.
Judge Cohn said a stay of the action is not warranted, and it is
unfair to the Plaintiff to stay resolution of the case
indefinitely.
A copy of the District Court's October 10, 2013 Order is available
at http://is.gd/kV0Bqkfrom Leagle.com.
HALLIBURTON CO: U.S. Chamber of Commerce Files Amicus Brief
-----------------------------------------------------------
Jessica M. Karmasek, writing for Legal Newsline, reports that
business groups are urging the U.S. Supreme Court to review a case
that, they argue, challenges a key precedent in securities class
action cases.
On Oct. 10, the U.S. Chamber of Commerce and the National
Association for Manufacturers filed an amicus brief in support of
the petitioners in Halliburton Co. v. Erica P. John Fund Inc. In
the case at hand, Halliburton allegedly made misrepresentations
concerning its accounting practices, the projected efficiencies of
a merger and its projected asbestos liability.
The plaintiffs claim that Halliburton's stock dropped in price
when the truth regarding these alleged misrepresentations was
revealed, and sued as a putative class in 2002.
In their brief, the Chamber and NAM noted they have a "keen
interest" in the case because private securities class action
litigation puts a burden on American businesses and adversely
affects access to capital markets.
The Chamber's Institute for Legal Reform owns Legal Newsline.
"We hope that the U.S. Supreme Court will take up this important
case that would help to address the scourge of securities class
action lawsuits that siphon productive capital out of the
manufacturing economy while enriching a narrow group of trial
lawyers," NAM Senior Vice President and General Counsel Linda
Kelly said in a statement.
"Private securities class action litigation imposes a significant
cost burden on manufacturers, impairing their ability to grow and
create jobs by diverting financial resources toward legal fees and
settlements, often with no net benefit to shareholders."
The case involves the "fraud on the market" theory of liability in
securities class actions.
The theory has greatly facilitated securities class actions and
has contributed to their exponential growth since the late 1980s,
the business groups argue.
DRI -- The Voice of the Defense Bar also filed an amicus brief in
support of the petitioners.
"To ensure consistency in class-action jurisprudence and to give
securities-fraud defendants a realistic opportunity to test the
propriety of class certification, this Court should grant
Halliburton's petition and make clear that a defendant can seek to
rebut the presumption of reliance at any time -- including at the
class-certification stage -- with evidence that the alleged
misrepresentations did not affect the stock price," the defense
bar wrote in its brief, filed on Oct. 11.
HERR FOODS: Delivery Drivers File Overtime Class Action
-------------------------------------------------------
Chelsea Naso, writing for Law360, reports that potato chip
manufacturer Herr Foods Inc. was hit with a proposed class action
in Pennsylvania federal court on Oct. 14 claiming it failed to pay
its delivery drivers overtime despite the drivers' workload
amounting to an average of 50 hours a week.
Former employee Kalvin Drummond, who worked for Herr's between
October 2005 and December 2012, said the snack manufacturer paid
delivery drivers -- known as route sales representatives -- a
salary with commission based on the amount raised through sales to
retailers along their delivery routes, but did not compensate
employees for overtime.
Herr's "failed to pay [the proposed class] proper overtime
compensation and failed to implement a system to track the number
of hours worked each workweek in violation of the [Fair Labor
Standards Act] as well as the Pennsylvania Minimum Wage Act and
the Pennsylvania Wage Payment and Collection Law," the complaint
said.
Route sales representatives are responsible for driving a delivery
truck along established routes to deliver Herr's snack foods to
retailers and to encourage retailers to carry more Herr's
products. Individuals employed as route sales representatives
regularly worked an average of 50 hours of per week, the complaint
alleged.
The proposed class includes all individuals who are currently
employed by Herr's as route sales representatives or who were
employed in that role at some point within the last three years.
The class includes a proposed subclass for residents of
Pennsylvania, where the factory is housed.
Citing the FLSA and the two Pennsylvania wage laws, Mr. Drummond
argued that Herr's was responsible for compensating employees for
all hours worked beyond 40 a week at a rate of 1.5 times their
hourly wage.
Mr. Drummond is seeking financial damages on behalf of the class
and a court order mandating that Herr's change its compensation
policies.
"Defendants are to be prohibited from continuing to maintain their
illegal policy, practice or customs in violation of federal and
state wage and hour laws," the complaint said.
The complaint also names 10 unidentified defendants who Drummond
cannot name but believes are responsible for executing Herr's
compensation policies as well as for exercising control over
payroll processing.
A Herr's representative was not immediately available for comment
on Oct. 15.
Herr's is a national snack manufacturer based in Pennsylvania that
operates sales routes to deliver their potato chips, pretzels and
other food items directly to retailers. The company's history
dates back to James Stauffer Herr's 1946 decision to purchase a
small potato chip company in Lancaster, Pa.
The putative class is represented by Justin Swidler, Richard
Swartz and Matthew Miller of Swartz Swidler LLC.
Counsel information for Herr's was not immediately available.
The case is Drummond v. Herr Foods Inc. et al., case number 2:13-
cv-05991, in the U.S. District Court for the Eastern District of
Pennsylvania.
JTH HOLDING: Consolidated ERC Complaint at Early Procedural Stage
-----------------------------------------------------------------
JTH Holding, Inc., reported that the consolidated complaint
against the Company alleging that an electronic refund check (ERC)
represents a form of refund anticipation loan is at the early
procedural stage, according to the Company's Form 10-K filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended April 30, 2013.
The Company was sued in November 2011 in federal courts in
Arkansas, California, Florida and Illinois, and additional
lawsuits were filed in federal courts in January 2012 in Maryland
and North Carolina, in February 2012 in Wisconsin, and in May 2012
in New York and Minnesota, since the initial filings. In April
2012, a motion to consolidate all of the then-pending cases before
a single judge in federal court in the Northern District of
Illinois was granted, and in June 2012, the plaintiffs filed a new
complaint in the consolidated action. The consolidated complaint
alleges that an electronic refund check (ERC) represents a form of
refund anticipation loan (RAL) because the taxpayer is "loaned"
the tax preparation fee, and that an ERC is therefore subject to
federal truth-in-lending disclosure and state law requirements
regulating RALs. The plaintiffs therefore allege violations of
state-specific RAL and other consumer statutes. The lawsuit
purports to be a class action, and the plaintiffs allege potential
damages in excess of $5 million, but we may be able to recover any
damages from the providers of the financial products that designed
the programs and related disclosures.
The Company is aware that virtually identical lawsuits have been
filed against several of its competitors. The Company has not
concluded that a loss related to this matter is probable, nor has
the Company accrued a loss contingency related to this matter.
The Company believes it has meritorious defenses to the claims in
this case, and intends to defend the case vigorously, but there
can be no assurances as to the outcome or the impact on the
Company's consolidated financial position, results of operations
and cash flows. The case is at an early procedural stage.
JTH Holding, Inc. (JTH Holding) is a holding company engaged
through its subsidiaries as a franchisor and operator of a system
of income tax preparation offices located in the United States and
Canada. The Company is a retail preparer of individual tax
returns. JTH Holding's principal operations are conducted through
its subsidiary, JTH Tax, Inc. (JTH Tax). Through this system of
income tax preparation offices, JTH Holding also facilitates to
its customer refund-based tax settlement financial products, such
as refund anticipation loans, electronic refund checks, and
personal income tax refund discounting. On September 30, 2010, JTH
Tax entered into an Agreement of Merger and Plan of Reorganization
with JTH Holding. At the closing of the merger on September 30,
2010, JTH Tax merged with and became a wholly owned subsidiary of
JTH Holding.
JTH HOLDING: Martin v. JTH Tax Case Settled in June 2013
--------------------------------------------------------
JTH Holding, Inc., reported that the Martin v. JTH Tax, Inc., case
was settled in June 2013, according to the Company's Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended April 30, 2013.
In November 2010, several former customers of one of the JTH
Holding, Inc.'s South Carolina franchisees initiated a purported
class action against the Company, its chief executive officer and
another of the Company's employees in the United States District
Court for the District of South Carolina, in a case styled Martin
v. JTH Tax, Inc. Class action status was denied in February 2013,
and the case was settled in June 2013. The settlement amount is
immaterial and has been included in the accompanying consolidated
financial statements.
JTH Holding, Inc. (JTH Holding) is a holding company engaged
through its subsidiaries as a franchisor and operator of a system
of income tax preparation offices located in the United States and
Canada. The Company is a retail preparer of individual tax
returns. JTH Holding's principal operations are conducted through
its subsidiary, JTH Tax, Inc. (JTH Tax). Through this system of
income tax preparation offices, JTH Holding also facilitates to
its customer refund-based tax settlement financial products, such
as refund anticipation loans, electronic refund checks, and
personal income tax refund discounting. On September 30, 2010, JTH
Tax entered into an Agreement of Merger and Plan of Reorganization
with JTH Holding. At the closing of the merger on September 30,
2010, JTH Tax merged with and became a wholly owned subsidiary of
JTH Holding.
KEYUAN PETROCHEMICALS: Rosen Lawsuit Currently at Discovery Stage
-----------------------------------------------------------------
Keyuan Petrochemicals, Inc., disclosed that on November 15, 2011,
the Rosen Law Firm filed a class action suit, alleging "we had
violated federal securities laws by issuing materially false and
misleading statements and omitting material facts with regard to
disclosure of related party transactions and effectiveness of
internal controls in past public filings. The case is currently at
the discovery stage, originally located in the United States
District Court for the Central District of California and
currently been transferred to United States District Court for the
Southern District of New York. We believe there is no basis to the
suit filed by the Rosen Law Firm and intend to contest the case
vigorously."
No further updates were reported in the Company's Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarterly
period ended June 30, 2013.
Keyuan Petrochemicals, Inc. (Keyuan) through its operating
subsidiaries, Ningbo Keyuan and Ningbo Keyuan Petrochemicals, are
engaged in the manufacture and sale of petrochemical products in
the People's Republic China. The Company's operations include
production facility with an annual petrochemical production
capacity of 720,000 metric tons of a variety of petrochemical
products, and facilities for the storage and loading of raw
materials and finished goods. It manufactures and supply a variety
of petrochemical products, including BenzeneToluene-Xylene
Aromatics (BTX Aromatics), propylene, styrene, liquid petroleum
gas (LPG), Methyl Tertiary Butyl Ether (MTBE) and other
petrochemicals. Its BTX Aromatics consists of benzene, toluene,
xylene and other chemical components used for further processing
into plastics, gasoline and solvent materials used in paint, ink,
construction coating and pesticide.
LIGHTINTHEBOX HOLDING: Levi & Korsinsky Declares Class Action
-------------------------------------------------------------
SinoCast Daily Business reports that US law office Levi &
Korsinsky declared the beginning of class action against
Lightinthebox Holding LITB on behalf of investors purchasing
stocks of the defendant from June 6 to August 19, 2013.
The defendant was accused of releasing false and misleading
statements in the period, having not notified investors of
information that it has suffered from slower sales growth in the
second quarter and production costs had faster growth than sales
value. As a result, the company cannot fulfill performance
outlook made earlier.
MALTA: PL Class Action Seeks Car Registration VAT Refund
--------------------------------------------------------
Neil Camilleri, writing for Malta Independent, reports that the PL
class action suit calling for a refund on VAT paid on registration
tax by car owners is "ongoing on procedural points", PL deputy
leader Toni Abela told this newspaper. Replying to questions sent
by The Malta Independent, Dr. Abela said that there could be some
developments in "the coming months".
The Labour Party had filed a collective case after gathering more
than 18,000 signatures in 2009.
It had requested the court to rule that drivers who bought their
cars after Malta joined the EU, and before the registration tax
system was amended in 2009, should be given a refund on the VAT
they had paid on their registration tax. The PL had always argued
that paying tax on a tax was illegal under EU law.
A PL signature collecting campaign was launched after former EU
Commissioner Laszlo Kovacs stated that VAT should not have been
charged on registration tax but that the matter was to be decided
upon by the national courts, as EU laws were not clear on the
matter.
However, the PN government had insisted that there was no
automatic refund on VAT and had accused the PL of being
irresponsible in promising people a refund. It had also said that
all applicants should file an individual case.
If the courts decide in the motorists' favor, the government would
have to fork out some EUR50 million in refunds. However the
process has been lengthy, and four years down the line there is
still no end in sight.
A few years ago, Joseph Muscat, then Leader of the Opposition, had
stated that if this situation was not righted by the Maltese
courts, the PL would present the case to the European Court of
Justice. And last June, Transport Minister Joe Mizzi told
Parliament that the government was undertaking a technical
exercise in order to ensure that whoever paid VAT on car
registration is given a refund.
The registration tax saga was revived again a few days ago after a
court ruled that Transport Malta should refund a Ferrari owner who
was taxed twice. But this was a different case as it was about a
car owner who had paid registration tax and VAT for the car in the
UK and was then requested to pay the same taxes in Malta. The
court said that this meant that the owner should not have paid
taxes in Malta as he had already paid them in the UK.
Petition for lower registration tax
In other developments the Malta Automobile Club has started
collecting signatures for an online petition asking the government
to lower the registration tax on new and second hand cars. MAC
spokesman Alfred Farrugia said that recent EU studies showed that
Malta has the highest registration and VAT tax rates.
The MAC said that there is no justification for such a high burden
on car owners and drivers. In its petition the club is requesting
that the vehicle registration tax be reduced to 10% of the car
pre-tax price, if not completely abolished. The club is also
requesting that the Annual Circulation Tax, or vehicle licence, be
considerably reduced where it is too high.
Mr. Farrugia insisted that as long as a car passed the emissions
test, the license fee should not increase by age.
Mr. Farrugia also said that, with the money collected from taxes
and fees, the government should be investing in new roads, but no
one knows where the money is going. "This year's budget estimates
showed that the government made more than EUR92 million from taxes
and fees, not including EU funds. Where has the money gone?" he
asked.
Registration tax was lowered for Euro V cars, in November 2012,
and again on March 1, 2013. But Mr. Farrugia insists that taxes
should be lowered for everyone, or at least not increase every
year for older cars.
MICROSOFT CORP: Xbox One's Terms Include Class Action Waiver
------------------------------------------------------------
Maximum PC reports that Microsoft has already received a bunch of
negative press over various aspects of the Xbox One, much of which
has been addressed to gamers' satisfaction (such as removing the
requirement to dial home every 24 hours). However, there remains
a point of possible contention that you'll find on Microsoft's
Xbox One Pre-Order Production Information website. Among the list
of requirements to use the Xbox One, gamers must waive their right
to participate in a class action lawsuit against Microsoft.
This isn't the first we've seen of this behavior. Sony also
sought to protect itself from class action lawsuits by introducing
a mandatory wavier to its terms and conditions for its PlayStation
Network after it was hacked a couple of years ago.
In this case, Microsoft may have been influenced by the so-called
Red Ring of Death (RRoD) that affected several early Xbox 360
models. Should something similar happen with the Xbox One, gamers
would have to sue Microsoft individually rather than in a class
action suit.
According to Paul A. Herman, an attorney and consumer advocacy
expert, the matter is "completely objectionable," IBTimes reports.
Herman said clauses like the one Microsoft is using gives them a
"totally stacked deck" that makes it easy to screw customers.
"Arguments can be made that would not even be considered evidence
in a real court of law," Mr. Herman told IBTimes. "If they pick
the arbitration company, it's easy to skew the judgment in their
favor."
MIDAS CANADA: Osler Hoskin Discusses Class Action Settlement
------------------------------------------------------------
Gillian Scott, Esq. -- gscott@osler.com -- at Osler, Hoskin &
Harcourt LLP reports that on September 12, 2013, in 405441 Ontario
Limited v. Midas Canada Inc., the Ontario Superior Court of
Justice approved an C$8.5 million settlement in favor of class
members in the class action brought by Midas franchisees against
Midas Canada Inc. (Midas) in May 2007. While Justice Lax
unequivocally held that the proposed settlement was fair,
reasonable and in the best interests of the class members, the
franchise bar won't have the benefit of seeing judicial
consideration of the application of the duty of good faith and
fair dealing in the context of system-wide change under section 3
of the Arthur Wishart Act (Franchise Disclosure), 2000 (the AWA).
Background of the Action and Approved Settlement
While this class action against Midas by certain Midas franchisees
was initially brought on broader terms, as well as against Midas's
U.S. parent company, certification was granted solely against
Midas on a much narrower set of issues. The certified issues
centered on whether or not Midas had acted in breach of its duties
of good faith and fair dealing under section 3 of the AWA by
making certain system-wide changes to its franchise. A key issue
was whether Midas ought to have adjusted the royalties payable by
its franchisees when it stopped distributing parts and outsourced
that distribution to a third party in 2003.1
Highlights of the proposed settlement approved by Justice Lax
include the following:
-- an $8.5M payment (inclusive of interest, legal fees,
disbursements, administration expenses and taxes) by Midas for the
benefit of class member franchisees;
-- distribution of the settlement payment to class member
franchisees based on a formula applied to gross sales figures with
a progressive adjustment reduction favoring smaller franchisees
(who suffered proportionately greater harm than larger franchisees
who were able to negotiate volume discounts from the new parts
distributor); and
-- counsel fees of C$2,125,000 plus HST and disbursements
(representing approximately 25% of the total settlement payment,
which was both in line with the retainer agreement between counsel
and the representative plaintiffs, and a 1.3 multiplier premium on
actual rates for hours docketed on the case).
Reasons for Settlement Approval
In order to approve a class settlement, the Court must be
satisfied that the settlement is fair, reasonable and in the best
interests of the class members. Justice Lax held unequivocally
that the proposed settlement in this case was all of these things,
primarily because it offered class members a reasonable
alternative to the significant risk they would have assumed by
proceeding to trial, particularly in light of the complexity of
applying the section 3 AWA duties of good faith and fair dealing
to the issue of system-wide change.
In her reasons, Justice Lax emphasized in particular:
-- Justice Cullity's recognition on certification that
balancing the "detriment suffered by the franchisees as a result
of the change in the products supply system, in light of the
undoubted right of Midas to give consideration and weight to its
own interests would be a difficult task";
-- the high level of uncertainty inherent in assessing the
amount of damages that might flow to franchisees, even if they
were able to establish such a breach of section 3 of the AWA;
-- that the plaintiffs' risk inherent in moving forward with
the action had increased in light of developments in franchise law
since the inception of the Midas case, and in particular the
decision in Fairview Donut Inc. v. The TDL Group Corp2 (TDL);3
-- that each class member could expect to recover between
approximately C$14,000 and C$392,000 under the settlement; and
-- that class counsel fees were reasonable given the risks it
undertook in conducting the litigation and the result achieved for
the class. Justice Lax emphasized that the risk assumed by class
counsel was magnified since the action was not certified against
the U.S. parent, and that any judgment against Midas may not have
been enforceable if Midas had filed for bankruptcy or restructured
its operations.
It is also worth noting, however, that Justice Lax emphasized
several procedural points in her decision that weighed in the
balance of her approval of the settlement, namely that the action
was a "mature" one that had been ongoing for seven years and that
although the action was ready to be set down for trial, it would
be another two before it could be heard, given the bottleneck on
Toronto's long trial list. In this case, the realities of the
civil trial list in Toronto appear to have weighed significantly
in the balance of a decision that proceeding to trial was not the
preferable procedure.
Implications
While Justice Lax held that the settlement was clearly to the
advantage of class members, the franchise bar has missed an
opportunity for a full hearing on the application of section 3 of
the Arthur Wishart Act, and the balancing act between a
franchisee's rights and a franchisor's rights to make changes to
its system in a post TDL world. This settlement-approval decision
also highlights the disadvantages of a busy civil trial list,
which means that despite an action being ready for trial, no trial
could be heard for another two years at the earliest. The
settlement was considered fair and reasonable and in the best
interest of the parties in lieu of a risk of "justice postponed"
for at least another two years.
OVERSEAS SHIPHOLDING: Claims Against Former Officers Dismissed
--------------------------------------------------------------
The district court in the Southern District of New York on
September 10, 2013, dismissed the claims against the former
President and former Chief Financial Officer of Overseas
Shipholding Group, Inc., arising under the Securities Exchange Act
alleging that documents that the Company filed with the Securities
and Exchange Commission were defective, inaccurate and misleading,
according to the Company's Form 10-Q filing with the SEC for the
quarterly period ended March 31, 2013.
Shortly after the Company filed a Current Report on Form 8-K on
October 22, 2012 disclosing that on October 19, 2012 the Audit
Committee of the Board of Directors of the Company, on the
recommendation of management, concluded that the Company's
previously issued financial statements for at least the three
years ended December 31, 2011, and associated interim periods, and
for the fiscal quarters ended March 31, 2012 and June 30, 2012,
should no longer be relied upon, several putative class action
suits were filed in federal court in the Southern District of New
York against the Company, its then President and Chief Executive
Officer, its then Chief Financial Officer, its then current and
certain former members of its Board of Directors, its current
independent registered public accounting firm, and underwriters of
the Company's public offering of notes in March 2010 (the
"Offering"). The Company's former independent registered public
accounting firm was later added as a defendant. Subsequent to the
Company's filing for relief under Chapter 11, these suits were
consolidated and the plaintiffs filed an amended complaint that
does not name the Company as a defendant. The consolidated suit is
on behalf of purchasers of Company securities between March 1,
2010, and October 19, 2012, and purchasers of notes in the
Offering. The plaintiffs allege that documents that the Company
filed with the SEC were defective, inaccurate and misleading, that
the plaintiffs relied on such documents in purchasing the
Company's securities, and that, as a result, the plaintiffs
suffered losses. The plaintiffs assert claims under the Securities
Act of 1933 (the "Securities Act") against all defendants and
claims under the Securities Exchange Act of 1934 (the "Exchange
Act") against the former President and former Chief Financial
Officer of the Company. The plaintiffs seek recovery of such
losses from the defendants. The Bankruptcy Court stayed the
consolidated suit against the individual defendants (the former
President and former Chief Financial Officer of the Company and
certain current and certain former directors of the Company),
except with respect to motions to dismiss, through September 17,
2013, subject to the Company's right to request further
extensions. The Company has not sought such extension. On
September 10, 2013, the district court in the Southern District of
New York dismissed the claims against the former President and
former Chief Financial Officer of the Company arising under the
Exchange Act in the consolidated suit for failure to adequately
allege scienter but granted plaintiffs leave to replead their
Exchange Act claims within 30 days. The district court denied the
motions to dismiss the claims against all defendants arising under
the Securities Act.
Overseas Shipholding Group, Inc. (OSG) is a tanker company engaged
primarily in the ocean transportation of crude oil and petroleum
products. As of December 31, 2011, the Company owned or operated a
fleet of 111 double-hulled vessels (aggregating 10.9 million
deadweight tons and 864,800 cubic meters) of which 89 vessels
operated in the international market and 22 operated in the United
States Flag market. OSG's new building program of owned and
chartered-in vessels totaled five International Flag vessels,
bringing the Company's total owned, operated and new build fleet
to 116 double-hulled vessels. The Company's vessel operations are
organized into strategic business units and focused on market
segments: crude oil, refined petroleum products and the United
States Flag. On November 14, 2012, the Company filed a petition
with the United States Bankruptcy Court for the District of
Delaware for relief under Chapter 11 of the United States
Bankruptcy Code.
PILOT FLYING J: Nov. 25 Settlement Fairness Hearing Set
-------------------------------------------------------
WBIR reports that Oct. 15, was the last day for companies to opt
out of the class action lawsuit filed against Pilot Flying J.
Pilot asked the federal court in Little Rock, Ark. to consolidate
all class action lawsuits against the company into one suit.
Pilot's attorneys said this was an effort to speed up the court
process in order to save companies time and money. The proposed
settlement will go before a fairness hearing for final approval in
Little Rock on Nov. 25.
The class action lawsuit comes after a federal investigation
revealed that Pilot allegedly cheated hundreds of trucking
companies out of money they were owed in a fuel rebate program.
The customers eligible for the class action lawsuit bought diesel
fuel for commercial purposes, using Pilot's rebate or discount
program between January 2005 and April 2013.
RENEGADE WIRELINE: Sued by Operator Over Unpaid Overtime Wages
--------------------------------------------------------------
Curtis Tvrdovsky, on behalf of himself and all others similarly
situated v. Renegade Wireline Services (RWLS), Case No. 2:13-cv-
01463-JFC (W.D. Pa., October 8, 2013) is an individual and
collective/class action under the Fair Labor Standards Act of
1938, and the Pennsylvania Minimum Wage and hour Act to recover
damages for non-payment of overtime wages for the Plaintiff and
all others similarly situated.
Mr. Tvrdovsky alleges that he regularly worked overtime (more than
40 hours in a workweek) and has unpaid overtime for at least 10
hours each week. He asserts that the Defendant did not use a time
clock or maintain time sheets but rather used driver log books,
which he turned in once per month. He contends that these driver
log books were not a time or pay document and were only used to
show clients (e.g., Shell, Chevron, Range Resources) the hours
worked on the activities being performed by RWLS for those
clients, and not the actual number of hours worked by the
Plaintiff or the other employees for RWLS.
Curtis Tvrdovsky is a resident of Leechburg, Pennsylvania. He was
employed by RWLS as a Junior Wireline Operator and Crane Operator
Trainee from October 2012 until March 13, 2013. As a Junior
Wireline Operator, he worked in the Defendant's shop(s) assembling
explosive devices used in the drilling process for natural gas and
worked at well sites during the use of the devices. During the
course of his employment, he drove motor vehicles of less than
10,001 pounds Gross Vehicle Weight weekly, on a regular basis. He
worked from the Defendant's Ruffs Dale, Pennsylvania location.
Renegade Wireline Services (RWLS) is a company providing services
to the oil and gas industry, and is headquartered in Levelland,
Texas, and has maintained an office in Ruffs Dale, during the
Plaintiff's employment from where it conducted business throughout
Pennsylvania. The local office is now in Pittsburgh,
Pennsylvania.
The Plaintiff is represented by:
Joseph H. Chivers, Esq.
THE EMPLOYMENT RIGHTS GROUP
100 First Avenue, Suite 1010
Pittsburgh, PA 15222
Telephone: (412) 227-0763
Facsimile: (412) 281-8481
E-mail: jchivers@employmentrightsgroup.com
- and -
John R. Linkosky, Esq.
JOHN LINKOSKY & ASSOCIATES
715 Washington Avenue
Carnegie, PA 15106-4107
Telephone: (412) 278-1280
Facsimile: (412) 278-1282
E-mail: linklaw@comcast.net
RITE AID: Lawsuit Filed by Managers Still Pending
-------------------------------------------------
Rite Aid Corporation has been named in a collective and class
action lawsuit alleging that the Company failed to pay overtime to
store managers as required under the FLSA and under certain New
York state statutes, 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 has been named in a collective and class action
lawsuit, Indergit v. Rite Aid Corporation et al pending in the
United States District Court for the Southern District of New
York, filed purportedly on behalf of current and former store
managers working in the Company's stores at various locations
around the country. The lawsuit alleges that the Company failed to
pay overtime to store managers as required under the FLSA and
under certain New York state statutes. The lawsuit also seeks
other relief, including liquidated damages, punitive damages,
attorneys' fees, costs and injunctive relief arising out of state
and federal claims for overtime pay.
On April 2, 2010, the Court conditionally certified a nationwide
collective group of individuals who worked for the Company as
store managers since March 31, 2007. The Court ordered that Notice
of the Indergit action be sent to the purported members of the
collective group (approximately 7,000 current and former store
managers) and approximately 1,550 joined the Indergit action.
Discovery as to certification issues has been completed. The
parties have fully briefed the issues of Rule 23 class
certification of the New York store manager claims and
decertification of the nationwide collective action claims and are
awaiting a ruling from the Court.
At this time, the Company is not able to either predict the
outcome of this lawsuit or estimate a potential range of loss with
respect to the lawsuit. The Company's management believes,
however, that this lawsuit is without merit and not appropriate
for collective or class action treatment and is vigorously
defending this lawsuit.
The Company also is a defendant in several putative class action
lawsuits filed in state courts in California alleging violations
of California wage and hour laws, rules and regulations pertaining
primarily to failure to pay overtime, pay for missed meals and
rest periods and failure to provide employee seating. These suits
purport to be class actions and seek substantial damages. At this
time, the Company is not able to either predict the outcome of
these lawsuits or estimate a potential range of loss with respect
to the lawsuits.
The Company's management believes, however, that the plaintiffs'
allegations are without merit and that their claims are not
appropriate for class action treatment. The Company is vigorously
defending all of these claims.
The Company was served with a United States Department of Health
and Human Services Office of the Inspector General ("OIG")
subpoena dated March 5, 2010 in connection with an investigation
being conducted by the OIG and the United States Attorney's Office
for the Central District of California. The subpoena requests
records related to any gift card inducement programs for customers
who transferred prescriptions for drugs or medicines to the
Company's pharmacies, and whether any customers who receive
federally funded prescription benefits (e.g. Medicare and
Medicaid) may have benefited from those programs. The Company has
substantially completed its production of records in response to
the subpoena. In June 2013, the government contacted the Company,
and the Company is involved in ongoing discussions with the
government regarding the matter.
Rite Aid Corporation is a retail drugstore chain in the United
States. As of March 3, 2013, it operated 4,623 stores in 31 states
across the country and in the District of Columbia. In the
Company's stores, it sells prescription drugs and a range of other
merchandise, which it calls front end products. During the fiscal
year ended March 3, 2013 (fiscal 2013), prescription drug sales
accounted for 67.6% of its total sales. It carries a range of
front end products, which accounted for 32.4% of its total sales
in fiscal 2013. Front end products include over-the-counter
medications, health and beauty aids, personal care items,
cosmetics, household items, beverages, convenience foods, greeting
cards, seasonal merchandise and other everyday and convenience
products, as well as photo processing. It offers a variety of
products under its private brands. Effective August 5, 2013, Rite
Aid Corp acquired Kings Pharmacy East Inc, which owns and operates
pharmacy.
SP AUSNET: Bushfire Victims Seek to Exclude Tests as Evidence
-------------------------------------------------------------
Jane Lee, writing for The Age, reports that Bushfire victims in a
class action against electricity company SP AusNet are asking the
court to exclude evidence that the company collected from a test
on a dummy power line, because they argue it was done without
landowners' consent.
About 10,000 people affected by the Kilmore East fire on
February 7, 2009, are suing SP AusNet, which owned and operated
the power line that sparked the fire. They claim the fire could
have been prevented if SP AusNet had performed simple safety
inspections and serviced the damaged power line years before 2009.
The court is expected to hear expert evidence on the power line's
failure next month. But the claimants' lawyers argue that the
evidence should be excluded because it was obtained improperly or
illegally.
Last year, SP AusNet set up dummy conductors to mimic the
conditions experienced on the original power line over a number of
months.
The Supreme Court heard on Oct. 14 that some of the people who
owned the land on which the tests were performed did not know they
were being conducted to gather evidence for SP AusNet in the class
action.
Blanche Beel, one of the class action members, said the police and
SP AusNet had visited her property after the fire, saying they
needed to check the power poles.
While the company had told her husband that the test spans would
be erected and work would be done on her property, she had thought
it was "just doing some work on poles and wires."
If she had been told SP AusNet was using the test results for its
defense: "I would have said no and then I am sure I would have
gone and got some legal advice if I was able to say no, but nobody
did tell us about it. Nobody mentioned it."
Another landowner, Philip Sullivan, said he only found out about
the purpose of the tests when he made his affidavit this month.
Lawyers for the claimants argued in written submissions that the
company did not have the right to access the land because
Mrs. Beel and Mr. Sullivan were not its customers when the tests
were performed.
SP AusNet had only limited powers to enter land and interrupt
electricity supply under the Electricity Distribution Code, which
did not extend to "solicitors and experts acting as agents of [SP
AusNet] accessing land for the sole purpose of litigation".
SP Ausnet was expected to argue on Oct. 15 that it had contacted
the landowners about the tests and that lawyers for the claimants
had known it was conducting tests for the class action for more
than 12 months.
The claimants in the state's largest class action are also suing
Utility Services Corporation, which inspected the power line, the
Department of Sustainability and Environment, Country Fire
Authority and the state government in the state's largest class
action.
The case continues.
According to 9News, lawyers for the plaintiff said in their
submission "At no stage did SPI inform the landowners of the true
purpose of the test, being that it was to be used in its defense
for the class action."
Justice John Forrest will rule on the matter at a later date,
9News reports.
Class action members are also taking action against the CFA,
Victoria Police and the Department of Sustainability and
Environment over their failure to warn communities, according to
9News.
All defendants deny the allegations and are fighting the claims.
SPI ELECTRICITY: Denies Allegations of Duping Bushfire Victims
--------------------------------------------------------------
The Australian Associated Press reports that SPI Electricity says
it didn't need to inform residents it was conducting tests on
their land as part of its legal defense in a massive class action
from victims of Victoria's Black Saturday bushfires.
More than 10,000 people are suing SPI Electricity over the Kilmore
East blaze that killed 119 people in 2009.
Class action members have applied to the Victorian Supreme Court
to have key evidence on which SPI relies removed from the trial.
The members have accused the company of failing to get consent
from landowners to run tests on electricity poles after the blaze,
saying SPI either trespassed or was not open about the fact the
test results were being used for its legal defense. But in a
sworn affidavit, SPI design engineer Noel Baumgartner says he
tried to phone all the affected landowners to tell them about the
tests, even though he wasn't required to do so.
"I did not think it was legally necessary to obtain landowner
permission or consent to enter on to land for the purposes of the
field test," Mr. Baumgartner said.
Mr. Baumgartner said he was not in the habit of telling residents
specific details about works being done because it was often quite
technical.
Barrister for SPI Jonathan Beach QC said law firm Maurice
Blackburn, which is running the class action, had known about the
tests since April last year but was trying to "spring a tactical
surprise" by raising them as an issue.
The case is continuing and Justice John Forrest will rule on the
matter at a later date.
The class action, led by Victorian woman Carol Matthews, is
claiming SPI was negligent in failing to maintain power lines that
sparked the fire.
Class action members are also taking action against the CFA,
Victoria Police and the Department of Sustainability and
Environment over their failure to warn communities.
All defendants deny the allegations and are fighting the claims.
STERICYCLE: Hagens Berman Appointed Lead Counsel in Class Action
----------------------------------------------------------------
Hagens Berman on Oct. 15 disclosed that it has been appointed lead
counsel in a class-action lawsuit brought against Stericycle on
behalf of small companies who contracted with Stericycle, claiming
the hazardous-waste disposal company defrauded them by improperly
raising their rates contrary to contract terms.
The original suit, filed in the United States District Court for
the Northern District of Illinois on April 3, 2013, accuses
Stericycle of illegally increasing the amount it charged customers
by as much as 18 percent a year, while the contracts state that
increases can occur only when "operational changes" are
implemented "to comply with documented changes in the law" or to
"address cost escalation."
According to the complaint, filed April 3, 2013, Stericycle
instead raises prices automatically, programming its billing
system to regularly increase rates regardless of any external
conditions.
"We intend to show in court that Stericycle's practice of
automatically boosting prices without informing customers was part
of a well-planned scheme to overcharge its smaller customers,"
said Steve Berman, managing partner of Hagens Berman and the lead
attorney on the case.
The named plaintiff, Lyndon Veterinary Clinic, contracted with
Stericycle but saw its charges increase 21.1 percent in 2009, 17.8
percent in 2010, and 25.4 percent in 2012.
In an order dated October 11, 2013, Senior United States District
Judge Milton I. Shadur -- who is overseeing a consolidation of a
number of similar suits -- appointed Seattle-based Hagens Berman
as interim lead counsel to the case against Stericycle. Hagens
Berman will be charged with setting legal strategy for the multi-
district litigation.
In his nine-page order, Judge Shadur writes: "Because of its
access to that whistleblower's perspective and the sharing of
information with her qui tam counsel, Hagens Berman's Complaint
provided more information than any other as to Stericycle's
methodology and organizational structure."
The judge also cited Hagens Berman and its lead partner, Steve
Berman, for their major legal accomplishments, including a $1.6
billion settlement in the Toyota Unintended Acceleration
Litigation and a substantial number of "outstanding big-ticket
results," as well as the strength of their Chicago office and team
of false claims attorneys.
"In sum, this Court is pleased to designate the Hagens Berman firm
as the interim lead counsel, and it looks forward to that firm's
prompt pursuit of the matter in the manner outlined in its
submissions."
In the previous case against Stericycle, United States ex rel.
Perez v. Stericycle, Inc., Perez's supervisors routinely admitted
that they were aware that Stericycle's practices were improper
with respect to the governmental accounts, yet Stericycle
continued these practices with its smaller, individual clients,
court documents claim.
The proposed class includes non-governmental entities that had
flat-fee contracts with Stericycle, Inc., for medical waste
disposal services and saw fee increases.
You can learn more about this case at
http://www.hbsslaw.com/cases-and-investigations/cases/stericycle
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP --
http://www.hbsslaw.com-- represents consumers, workers,
whistleblowers and investors in complex litigation.
U.S. AUTO: Bid to Dismiss Some Plaintiffs in "Rikard" Suit Denied
-----------------------------------------------------------------
In the case, LATEASE RIKARD, individually and on behalf of others
similarly situated, Plaintiff, v. U.S. AUTO PROTECTION, LLC, et
al., Defendant, NO. 4:11CV1580 JCH, (E.D. Mo.), the defendants
filed a motion to dismiss individual plaintiffs who violated the
court's order to provide discovery.
In an October 10, 2013 Memorandum and Order is available at
http://is.gd/poAMjTfrom Leagle.com, District Judge Jean C.
Hamilton found dismissal, either with or without prejudice,
inappropriate at this juncture. Accordingly, Judge Hamilton
denied defendants' motion to dismiss.
UNITED STATES: Southern Baptists Sue Over Contraception Regulation
------------------------------------------------------------------
Tony Gonzalez, writing for The Tennessean, reports that three
non-profit religious organizations, including a division of the
Nashville-based Southern Baptist Convention, are suing the federal
government over a controversial contraceptives regulation that is
a part of the Affordable Care Act.
The organizations on Oct. 15 announced the class-action lawsuit
against the federal requirement that employers cover the cost of
contraceptives, including drugs that can cause abortions. The
groups argue the requirement infringes on religious liberty.
The mandate has attracted dozens of similar lawsuits.
This latest filing, targeting the Department of Health and Human
Services, was brought by GuideStone Financial Resources, the
Dallas-based provider of health benefits to Southern Baptist
churches.
GuideStone also provides benefits to more than 100 non-profit
ministries. Those include Oklahoma City-based Reaching Souls
International and Truett-McConnell College in Cleveland, Ga., two
organizations that signed on to the lawsuit in order to represent
the types of ministries expected to join in the class action, said
Rod Miller, an attorney for GuideStone.
In the face of the criticism, the government created an exemption
to its rule for churches and some church auxiliaries so they would
not have to pay for contraception. But religious organizations
such as those suing still fell under the mandate based on the
federal tax code, and their leaders are objecting to the
regulations on the grounds that they violate religious freedom,
Miller said.
"We know the other ministry organizations that we serve share the
same views on the sanctity of life," he said.
The lawsuit asks for an injunction to block the mandate, which is
scheduled to take effect Jan. 1.
The lawsuit, filed in federal court in Oklahoma by the Becket Fund
for Religious Liberty and Locke Lord LLP, is the 74th against the
government over its mandate, the groups said.
Earlier this year, the Catholic Diocese of Nashville sued over the
same requirements, arguing that all Catholic groups should be
exempt. The case was dismissed, and after briefly contesting the
ruling, the diocese withdrew its appeal in April.
WEALTHSURE PTY: Jones Day Discusses Class Action Dismissal
----------------------------------------------------------
John Emmerig, Esq. -- jemmerig@jonesday.com -- and Michael Legg,
Esq. -- mlegg@jonesday.com -- at Jones Day report that in Larsson
v WealthSure Pty Ltd. [2013] FCA 926, a class action had been
commenced against WealthSure Pty Ltd. in relation to financial
services provided by an authorized representative of WealthSure,
Mr. Oberg.
Members of the group on whose behalf the representative
proceedings were commenced were identified by reference to three
criteria:
-- Persons who were clients of Mr. Oberg and who, between
November 2008 and May 2012, provided monies to Mr. Oberg to invest
on their behalf;
-- Persons who, by reason of matters referred to in the
pleadings, suffered loss and damage as a consequence of providing
monies to Mr. Oberg to invest; and
-- Persons who "have appointed" Maddocks Lawyers to act for
them in the proceedings.
The third criteria was subject to challenge on the basis that it
impermissibly allowed for an opt-in approach to class actions.
Background: Opt-In and Closed Class Group Definitions
The class action regime under Part IVA of the Federal Court of
Australia Act 1976 (Cth) requires that the group on whose behalf
the proceedings are being brought must be defined in the pleadings
but there is no need to identity particular group members.
Further, group members do not need to consent to their inclusion
in a class action, but group members must be given an opportunity
to opt out, or exclude themselves, from the proceedings.[1]
This open form of group definition, although specifically adopted
as a way to provide access to justice, was problematic for
litigation funders. Litigation funders recover a proportion of
group members' damages pursuant to a contractual arrangement.
Consequently, litigation funders sought to limit or control who
was able to be part of a class action in Australia so as to
prevent free-riding, i.e. participating in the class action but
not being required to pay a share of their recovery to the funder.
The mechanisms employed were an opt-in group definition, which was
rejected by the courts, and a "closed class" definition, which was
ultimately accepted by the courts.
In Dorajay Pty Ltd v Aristocrat Leisure Ltd. (2005) 147 FCR 394, a
shareholder class action sought to employ the following group
definition:[2]
This proceeding is commenced by the Applicant on its own behalf
and on behalf of the other persons for whom the solicitors for the
Applicant have instructions to act at any particular time, who at
some time during the period between September 20, 2002 and
May 26, 2003 inclusive . . . acquired an interest in shares in
Aristocrat and who suffered loss and damage by or resulting from
the conduct of Aristocrat referred to below.
It was a term of the retainer agreement that the person also enter
into a funding agreement with Insolvency Litigation Fund Pty Ltd,
which was a wholly owned subsidiary of IMF (Aust) Ltd.
Justice Stone identified at least two grounds for objection to the
above group definition. First, rather than being able to be a
member of the group without taking any positive step, a person is
required to opt in to the group by retaining a specified firm of
lawyers. This is antithetical to an opt-out procedure.[3] Second,
the court found it an extraordinary proposition that the group
definition should be used to confine a group to the clients of one
solicitor. Stone J stated that there was no support in principle
or authority for this proposition, and it was repugnant to the
policy of Part IVA of the Federal Court of Australia Act 1976
(Cth).[4]
However, the use of a "closed class" method of group definition
was permitted by the Full Federal Court of Australia in Multiplex
Funds Management Ltd v P Dawson Nominees Pty Ltd. (2007) 164 FCR
275. A closed class is where the group membership is defined, not
just by their being a member of the group who claims a right to a
remedy, but by a limiting characteristic, such as having also
entered into a funding agreement with a litigation funder or a
retainer with a particular law firm, prior to the commencement of
the class action. In Multiplex, the represented group was defined,
inter alia, on the basis that they "had as at the commencement of
the . . . proceeding entered a litigation funding agreement with
International Litigation Funding Partners, Inc. (ILF)."[5]
Justice Jacobson considered the group definition in the Aristocrat
class action and found that it impermissibly defined the group by
reference to persons who retained a specific law firm both before
and after the commencement of the relevant proceeding.[6]
Individuals were able to take a positive step that would enable
them to become part of (i.e. opt in) a class action already on
foot. A group definition framed that way was inconsistent with
one or more sections of Part IVA and therefore would not be
permissible.[7] This, Justice Jacobson observed, was quite
different from the Multiplex class action group definition, which
limited the group at the time the proceedings were commenced.[8]
As such, in the Multiplexclass action, there was no possibility of
an individual opting in to existing proceedings.
Validity of Criteria Based on Group Members Appointing Particular
Solicitors
Counsel for the applicant in Larsson v WealthSure Pty Ltd.
submitted that the third criterion in the group definition should
be read as a reference to persons who had, at the date of
commencement of the proceedings, directly appointed Maddocks
Lawyers to act for them, so that the reasoning in Multiplex
applied and the reasoning in Aristocrat did not.
Justice Buchanan had difficulties with this reasoning. The
language used to define the group clearly allowed the possibility
of joining the group by appointing Maddocks Lawyers to act, even
after the proceedings were commenced. The situation was analogous
to Aristocrat and not Multiplex.
Two other circumstances were taken into account by the judge. It
was the case that one of the persons identified as a group member
did not appoint Maddocks Lawyers until after the proceedings were
commenced. Further, the applicant and all other group members had
changed solicitors. Maddocks Lawyers were no longer appointed to
act for them. The applicant contended that the third criterion was
nevertheless satisfied by all but one of the group members at the
time the proceedings were commenced. However, the judge thought
that it could also be argued that the condition required by the
third criterion was a continuing one. On that view, no member of
the group satisfied the third criterion.
Consequently the applicant was prepared to amend the pleading to
make it comply with the approach in Multiplex.
Discontinuance of Class Action
Having identified the difficulties that the class action faced due
to an impermissible group definition, Justice Buchanan turned to
consider section 33N(1)(b) of the Federal Court of Australia Act
1976 (Cth) which provides for a class action to be discontinued if
it is in the interests of justice to do so because all the relief
sought can be obtained by means of a proceeding other than a class
action.
Justice Buchanan observed on a number of occasions that the claims
pressed by group members would require evidence of individual
circumstances, including the advice furnished to each by Mr. Oberg
and the loss suffered.[9] Further, the only significance of the
proceedings remaining as a class action was that group members
other than the applicant would be immunized from the possibility
of a costs order in favor of the respondent if the case with
respect to that group member was unsuccessful.[10]
Justice Buchanan found that:[11]
the proceedings in their present form are flawed. I have given
consideration to whether I should permit them to be amended to
overcome those flaws but, ultimately, I think that the proceedings
are not by their nature proceedings which are innately suitable to
proceed as representative proceedings. . . . The proceedings
are, in reality, proceedings which seek to vindicate the
individual interests of a limited and known group of persons who
might ordinarily be expected to advance their claims as applicants
in their own right.
His Honour further found that the costs protection for group
members did not favor the continuation of the proceedings as a
class action.
WELLS FARGO: Sued Over "Force-Placed" Hazard Insurance Policies
---------------------------------------------------------------
Thomas and Kimberly Butler, individually and on behalf of all
others similarly situated v. Wells Fargo Bank, N.A., Wells Fargo
Insurance, Co., QBE Insurance Corporation, and QBE First Insurance
Agency, Inc., Case No. 3:13-cv-01057-JPG-SCW (S.D. Ill.,
October 8, 2013) is brought on behalf of all persons, who have or
had residential mortgage loans originated or serviced by Wells
Fargo Bank, N.A. ("WFBNA"), which at times does business as Wells
Fargo Home Mortgage ("WFHM").
In connection with those loans, the Plaintiffs and the Class
members were required to pay for lender-placed or "force-placed"
hazard insurance policies provided by QBE Insurance Corporation
("QBE IC"), or QBE First Insurance Agency, Inc. ("QBE First")
(together, "QBE"), which involved the payment of a kickback in the
form of below-market-rate portfolio tracking, or a commission,
fee, and reinsurance premium or any other monetary and nonmonetary
remuneration to a WFBNA affiliate, including but not limited to
Wells Fargo Insurance, Inc. ("WFI").
The Plaintiffs challenge Wells Fargo's practice of purchasing
force-placed hazard insurance from QBE pursuant to agreements that
return a financial benefit to Wells Fargo or its affiliates, and
QBE, that is unrelated to any contractual or other bona fide
interest in protecting the lender's interest in the loan, and
which results in unauthorized, unjustified and unfairly inflated
costs to the borrower for force-placed hazard insurance in
violation of law.
The Butlers are residents of Herrin, Illinois. On May 26, 1998,
the Butlers obtained a mortgage loan in the amount of $28,320 from
The Money Store secured by their primary residence. On
September 1, 2010, Wells Fargo began servicing the mortgage
securing the loan on the Plaintiffs' property.
WFBNA is a national banking association chartered in South Dakota
with its principal place of business in San Francisco, California.
WFBNA is registered to do business in the state of Illinois. WFHM
is an unincorporated division of WFBNA. WFHM handles the mortgage
servicing business for Wells Fargo, including the mortgage loans
and lines of credit of Illinois homeowners and homeowners across
the United States. At all relevant times, WFHM's conduct was
approved, authorized and ratified by WFBNA. WFI is an affiliate
of WFBNA based in St. Louis Park, Minnesota. WFI receives
commissions, kickbacks and reinsurance premiums associated with
Wells Fargo's force-placed insurance scheme from the QBE
Defendants.
QBE IC is an active Pennsylvania Corporation headquartered in New
York. QBE First is a Delaware Corporation headquartered in
Atlanta, Georgia. QBE First is a leading provider of force-placed
hazard insurance.
The Plaintiffs are represented by:
Eric D. Holland, Esq.
Gerard B. Schneller, Esq.
HOLLAND, GROVES, SCHNELLER & STOLZE, LLC
300 N Tucker, Suite 801
St. Louis, MO 63101
Telephone: (314) 241-8111
Facsimile: (314) 241-5554
E-mail: eholland@allfela.com
gschneller@allfela.com
- and -
Edward W. Ciolko, Esq.
Peter A. Muhic, Esq.
Tyler S. Graden, Esq.
KESSLER TOPAZ MELTZER & CHECK, LLP
280 King of Prussia Road
Radnor, PA 19087
Telephone: (610) 667-7706
Facsimile: (610) 667-7056
E-mail: eciolko@ktmc.com
pmuhic@ktmc.com
tgraden@ktmc.com
- and -
Brad Seidel, Esq.
Chris Johnson, Esq.
NIX PATTERSON & ROACH, LLP
205 Linda Drive
Daingerfield, TX 75638
Telephone: (903) 645-7333
Facsimile: (903) 645-4415
E-mail: bseidel@npraustin.com
cjohnson@npraustin.com
- and -
Shanon J. Carson, Esq.
Patrick Madden, Esq.
BERGER & MONTAGUE, P.C.
1622 Locust Street
Philadelphia, PA 19103
Telephone: (215) 875-4656
Facsimile: (215) 875-4604
E-mail: scarson@bm.net
pmadden@bm.net
* Chinese Paper Says Class Action System Not Good for Hong Kong
---------------------------------------------------------------
Shirley Yuen, writing for South China Morning Post, reports that
it is argued by some that Hong Kong needs a class action system,
which will give people better access to justice and consumers a
fairer share of settlements. And the argument is made, of course,
that other jurisdictions have, or are introducing, class action,
so why not Hong Kong?
This argument may sound attractive in principle. However, there
is a real risk that, in the zeal to expand opportunities for
private litigation, we will open a Pandora's box of litigation
abuse and move to a legal system that is less fair, less
accessible and which makes it harder for meritorious claims to be
heard, because the courts are clogged with claims motivated by
class action lawyers seeking to make a quick buck.
There are different ways to structure a class action system, but
in a nutshell it allows a named plaintiff or a number of named
plaintiffs to file a claim on behalf of a "class" of people or
businesses who claim to have suffered a common injury.
The plaintiffs get their "class" certified by the court and they
are then able to sue not only on their own behalf, but also on
behalf of all other people in that class.
Ultimately, litigation is expensive. Not all defendants have deep
pockets
A closer look at how they have worked in the US, which opened the
door to class action many decades ago and which is now well known
for its litigious excesses, might give us cause to look more
critically at the costs, the potential pitfalls and who really
benefits.
The recent Facebook class action lawsuit in the US provides a
stark example. In this highly controversial settlement, the class
action lawyers walked away with US$2.3 million while the class
members received absolutely nothing.
Instead of paying out the class members, Facebook agreed that it
would make a US$6.5 million payment to a new foundation it would
partly control.
In the now-infamous Bank of Boston class action, class members
actually lost money in the settlement; they received between
US$2.19 and US$8.76, but also had their accounts debited by up to
US$91 to pay the US$8.5 million fees for lawyers that many never
even knew they had "hired".
The argument often put is that allowing such a system increases
the efficiency of litigation and that this outweighs the injustice
to individuals who have lost control of their legal rights.
There is a fundamental question whether "efficiency" is a
sufficient justification for taking away fundamental legal rights
that are guaranteed to us under the Basic Law and the Hong Kong
Bill of Rights.
One must also ask whether the current system is really
inefficient.
Hong Kong has a number of different tiers to its court system,
from the Small Claims Tribunal through to the district and high
courts. The tribunal will hear claims up to HK$50,000 and has
fewer procedural rules, based on the recognition that claims
involving smaller sums should be run in a manner that is
proportionate to what is at stake. Lawyers are also not allowed
to appear in the tribunal, to encourage parties to keep costs
proportionate to what is in dispute.
On the other hand, where a number of people want to make a claim
about the same issue, they may run the case as joint plaintiffs or
start separate claims, giving them the freedom to choose who
represents them and how their case will be presented (likewise for
parties running a common defense).
Where separate claims involving similar facts or legal issues have
been made, there are also processes for allowing the claims to be
addressed together or in a manner that is more efficient (for
example, by seeking an order for joinder of claims or allowing a
legal point that is common to both cases to be decided before the
cases proceed further).
Ms. Yuen said "Ultimately, litigation is expensive. Not all
defendants have deep pockets and one of the more pernicious
aspects of US experience is that smaller firms, faced with an
aggressive class action, sometimes choose to settle out of court
rather than rack up expensive legal fees. That is not justice and
it is not something we would wish to see inflicted on Hong Kong
businesses."
"Like any legal system in the world, ours is not without its
shortcomings and nor is it a panacea for the issues that naturally
arise in complex, modern societies. However, it is a system that
has served Hong Kong very well.
"Derived from our common law history, it draws on many hundreds of
years of accumulated experience and wisdom in balancing the need
for procedural fairness against the relative importance of the
issue in dispute.
"We should always strive to find ways to improve our current
system. However, we need to ask ourselves whether class action,
which would comprise a radical and wholesale change to our system,
is the way to do this."
* McGuireWoods Discusses Inconsistency in Class Action Treatment
----------------------------------------------------------------
Andrew J. Trask, Esq. -- atrask@mcguirewoods.com -- at
McGuireWoods LLP reports that in her new article Symmetry & Class
Action Litigation, 60 UCLA L. Rev. 1494 (2013), Connecticut law
professor Alexandra Lahav has spotted what appears to be an
interesting inconsistency in the way modern courts treat class
action: despite case law to the contrary, courts often treat
certification of a litigation class more rigorously than
certification of a settlement class. One can think of any number
of reasons for this: courts favor settlements of large disputes;
they like clean dockets; there are fewer possible parties to
appeal. Professor Lahav believes that it reveals a pro-defendant
bias in the courts:
The courts' leniency toward class settlements leads to a paradox.
While judges are concerned that a litigated class will exert undue
pressure on the defendant to settle, they readily approve of
settlements of claims they believe lack merit. One might respond
that defendant has consented to the settlement, but arguably
courts should also be concerned that the defendant's purported
consent is in fact a response to the duress imposed by the threat
of a class action. I suggest that the reason for courts'
exclusive concern over defendant's duress in litigated classes is
that litigated class actions upend the status quo ante whereas
settlement classes reinforce it. Ultimately, if judges continue
to treat settlement and litigation classes differently, the courts
will reflect the asymmetry between plaintiffs and defendants in
the real world.
(Emphasis added.) This broad-brush critique of defendants and
courts, however, is based on a blinkered view of class action
practice. In particular, Professor Lahav's argument suffers from
three flaws:
-- She cherry picks the case law. Like Professor Erichson
before her, Professor Lahav focuses on only two cases in arguing
for a new trend favoring settlement classes: In re AIG and
Sullivan v. DB Investments. It's not fair to criticize Professor
Lahav for leaving out Rodriguez v. National City Bank, which had
not come out yet. But one can't say the same about Dewey v.
Volkswagen Atkiengesellschaft, which found the named plaintiffs in
a settlement inadequate. Nor did she mention the various district
court opinions like Tijero v. Aaron Bros., Inc. which have
restrained settlements that could not meet the requirements of
Rule 23(a) and 23(b). Focusing on a few exemplars is fine. Using
them to declare a trend while ignoring contrary evidence is less
so. And the fact that the Third Circuit (of DB Investments fame)
issued the Rodriguezopinion--which rejected a settlement where the
plaintiffs made no commonality showing--at roughly the same time
this article was published highlights that cherry-picking cases
will often undermine your predictive abilities.
-- She never mentions plaintiff's lawyers. Professor Lahav
spends much of her time arguing that plaintiffs need class actions
to give them equality against corporate defendants. And she
spends much of the rest of her time trying to debunk the
"blackmail" model of class action settlement. But defendants'
(and courts') concerns about blackmail are not what she thinks
they are. Defendants are not usually worried that a named
plaintiff with a legitimate grievance is trying to "extort" $100
from them. They worry that entrepreneurial counsel recruit
plaintiffs to represent theories they believe may result in
settlements that contain lucrative fee agreements.
-- She doesn't address the asymmetry in discovery costs.
Professor Lahav argues that class actions don't cost defendants
much more than $300,000 to litigate. Her source for this
assertion is a 2009 study by the excellent Federal Judicial
Center. But things have changed since 2009. E-discovery (rules for
which went into effect in 2006) has only increased the costs of
litigation, particularly for defendants. In fact, several courts
have noted that class actions offer a peculiar asymmetry of
discovery costs (favoring the plaintiffs), and that plaintiffs'
counsel often try to leverage that asymmetry to extract settlement
agreements favorable to them (if not always the class). In the
1990s, courts were concerned about the in terrorem effect of class
liability; now they are usually more concerned with the overall
cost of the litigation.
"There is certainly something to the critique that courts often
favor class action settlements, even when they will not benefit
absent class members. I've said as much myself. But taking on an
issue without looking at all sides of it will lead to a shallow
(and incorrect) analysis, one that lacks predictive power and
leads to poor policy," McGuireWoods' Mr. Trask said.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Washington, D.C., USA. Noemi Irene
A. Adala, Joy A. Agravante, Valerie Udtuhan, Julie Anne L. Toledo,
Christopher Patalinghug, Frauline Abangan and Peter A. Chapman,
Editors.
Copyright 2013. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The CAR subscription rate is $775 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact
Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
* * * End of Transmission * * *