/raid1/www/Hosts/bankrupt/CAR_Public/140107.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, January 7, 2014, Vol. 16, No. 4
Headlines
24 HOUR FITNESS: Violates Consumer Law on Cancellation, Suit Says
AARON'S INC: Motion Briefing in "Kunstmann" Suit Began in July
AARON'S INC: Discovery in "Jewell" Suit to Continue Until April
AARON'S INC: Denied Appeal in "Korrow" Consumer Litigation
AARON'S INC: "PC Rental Agent" Suit Hearing Expected in 2013 Q4
AK STEEL: Paying $30.8MM to VEBA to Settle Retirees Lawsuits
AK STEEL: Appeals Court Upheld Remand Ruling in "Schumacher" Case
AK STEEL: To Settle "Patrick" Suit in Ohio for $2.5 Million
AK STEEL: Class Cert. Issue in Direct Buyers' Suit Proceeds
ASSOCIATED BANC-CORP: Bank Unit Wins Approval of $13MM Settlement
AVIS BUDGET: Continues Settlement Process in Antitrust Suit
AVIS BUDGET: California Labor Lawsuit Won't Proceed as Class
BLYTH INC: Files Memorandum to Support Securities Suit Dismissal
BMO NESBITT: Denied Leave to Appeal Class Action Cert. Ruling
BROCKTON, MA: Sued Over Discriminatory Hiring Practices
CAMBREX CORP: Insurers' Suit Over Lorazepam & Clorazepate Pending
DEUTSCHE SECURITIES: Dismissed From Class Action Over $7BB in MBS
DISCOVER FINANCIAL: Awaits Final OK of Accord in "Bradley" Suit
ELECTRONIC ARTS: Misleads Class on Battlefield Rollout, Suit Says
FACEBOOK INC: Seeks to Dismiss Securities Lawsuit in New York
FIDELITY NATIONAL: California Court Revives UCL Class Action
FIRST SOLAR: Ariz. Court Certifies "Smilovits" Securities Suit
GENERAL NUTRITION: Accused of Using Illegal Fluctuating Work Week
GENWORTH FINANCIAL: Bares Status of Suits Alleging RESPA Breach
HERTZ GLOBAL: Made Millions From Prepaid Fuel Customers, Suit Says
INSYS THERAPEUTICS: Faces Suit Over Illegal Marketing of Subsys
INTELLIQUENT INC: Faces Securities Lawsuit in Illinois Court
LAWRENCE COUNTY, AL: Sued Over High Garbage Collection Fees
LIFETIME ENTERTAINMENT: Loses Bid to Dismiss Class Action
LSI CORP: Being Sold to Avago for Too Little, "Tolar" Suit Claims
LSI CORP: Faces "Waber" Suit Over Proposed Acquisition by Avago
LSI CORP: "Tansey" Class Seeks to Enjoin Sale at Unfair Price
MELLANOX TECHNOLOGIES: Still Faces Securities Suit in New York
MELLANOX TECHNOLGIES: Israeli Court Stays "Weinberger" Lawsuit
MELLANOX TECHNOLOGIES: Faces Israeli Claim Over TASE Delisting
OSI SYSTEMS: Glancy Binkow & Goldberg Files Class Action in Calif.
RIVERBED TECHNOLOGY: Class of Former Zeus Shareholders Approved
TEVA PHARMACEUTICAL: Faces Securities Class Action in New York
TREX COMPANY: Court Okays Decking Product Class Action Settlement
TURQUOISE HILL: Pomerantz Law Firm Files Class Action in New York
VIOLIN MEMORY: Kaplan Fox Files Class Action in California
WATTS GUERRA: Accused by BP of Brazen Fraud and Phantom Clients
WELLCARE HEALTH: Settlement in Securities Suit Remains in Place
*********
24 HOUR FITNESS: Violates Consumer Law on Cancellation, Suit Says
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David Lee, writing for Courthouse News Service, reports that
24 Hour Fitness contracts violate consumer protection laws on
cancellation and refunds, a class action claims in Federal Court.
Lead plaintiff Russell Wendt sued 24 Hour Fitness USA, claiming
its illegal contracts take advantage of customers' "lack of
knowledge, ability, experience, or capacity to a grossly unfair
degree." Wendt claims the health clubs violate Texas consumer
laws and the Health Spa Act.
"24 Hour Fitness failed to include all of the mandatory language
in its purported contracts with plaintiffs and the other members
of the class and also materially changed mandatory language in the
contracts," the 26-page complaint states.
"24 Hour Fitness also violated the venue provision, the anti-
waiver provision and the voiding provision of the Health Spa Act.
Accordingly, the purported contracts between 24 Hour Fitness and
plaintiffs and the other members of the class are void," the
complaint states.
Under the Texas Health Spa Act, health club operators must inform
members of their right to cancel within three days of signing.
The Act also requires language on refunds by mail if a health spa
is not fully open and does not provide another facility within 10
miles.
"However, the Wendt contract states that a customer is entitled to
a full refund only 'if the location of your club enrollment does
not fully open' within one year after the date 24 Hour pre-sells
memberships," the complaint states.
The law also requires language on cancellation of contracts in the
event of death or permanent disability. Wendt claims 24 Hour
Fitness contracts illegally limit refunds.
"Prorated refunds shall be based on the number of paid months and
does not include bonus time," the complaint states, citing a
contract. "You are not entitled to any refund after the
expiration of the paid period or for used fitness services."
24 Hour Fitness did not immediately respond to a request for
comment. It operates more than 400 health clubs in 18 states,
including 89 in Texas.
Wendt seeks class certification, disgorgement, an injunction and
actual and punitive damages for violations of the Texas Health Spa
Act and the Texas Deceptive Trade Practices Act.
The Plaintiffs are represented by:
Roger L. Mandel, Esq.
Bruce E. Bagelman, Esq.
LACKEY HERSHMAN LLP
3102 Oak Lawn, Suite 777
Dallas, TX 75219
Telephone: (214) 560-2201
Facsimile: (214) 560-2203
E-mail: rlm@lhlaw.net
beb@lhlaw.net
- and -
David V. Marchand, Esq.
MARCHAND & MORAINE LLP
10000 N Central Expressway, Suite 1043
Dallas, TX 75231
Telephone: (214) 378-1043
Facsimile: (214) 378-6399
E-mail: david@smithmarchand.com
The case is Wendt, et al. v. 24 Hour Fitness USA Inc., Case No.
3:13-cv-04910-K, in the U.S. District Court for the Northern
District of Texas (Dallas).
AARON'S INC: Motion Briefing in "Kunstmann" Suit Began in July
--------------------------------------------------------------
Briefing on motions for summary judgment in Kunstmann et al v.
Aaron Rents Inc. began in July 2013, according to the company's
Nov. 1, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended Sept. 30, 2013.
In Kunstmann et al v. Aaron Rents, Inc., filed with the United
States District Court, Northern District of Alabama (Case No.:
2:08-CV-01969-KOB-JEO) on October 22, 2008, plaintiffs alleged
that the Company improperly classified store general managers as
exempt from the overtime provisions of the Fair Labor Standards
Act ("FLSA"). The case was conditionally certified as an FLSA
collective action on January 25, 2010, and it now includes 227
individuals, nearly all of whom terminated from the general
manager position more than two years ago. Plaintiffs seek to
recover unpaid overtime compensation and other damages. On October
4, 2012, the Court denied the Company's motion for summary
judgment as to the claims of Kunstmann, the named plaintiff. On
January 23, 2013, the Court denied the Company's motion to
decertify the class. The Company has since filed two additional
motions for summary judgment, including one that seeks summary
judgment in the entirety on all class members' claims, or
alternatively, on matters that will reduce the size of the class
or exposure arising from the class claims. Briefing on these
motions began in July 2013.
AARON'S INC: Discovery in "Jewell" Suit to Continue Until April
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Discovery is expected to continue until April 2014 in the suit
Kurtis Jewell v. Aaron's, Inc. pending in the United States
District Court for the Northern District of Georgia, according to
the company's Nov. 1, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2013.
The matter of Kurtis Jewell v. Aaron's, Inc. was originally filed
in the United States District Court, Northern District of Ohio,
Eastern Division on October 27, 2011 and was transferred on
February 23, 2012 to the United States District Court for the
Northern District of Georgia (Civil No.:1:12-CV-00563-AT).
Plaintiff, on behalf of himself and all other non-exempt employees
who worked in Company stores, alleges that the Company violated
the FLSA when it automatically deducted 30 minutes from employees'
time for meal breaks on days when plaintiffs allegedly did not
take their meal breaks. Plaintiff claims he and other employees
actually worked through meal breaks or were interrupted during the
course of their meal breaks and asked to perform work.
As a result of the automatic deduction, plaintiff alleges that the
Company failed to account for all of his working hours when it
calculated overtime, and consequently underpaid him.
Plaintiffs seek to recover unpaid overtime compensation and other
damages for all similarly situated employees nationwide for the
applicable time period. On June 28, 2012, the Court issued an
order granting conditional certification of a class consisting of
all hourly store employees from June 28, 2009 to the present. The
class size is approximately 1,788 opt-in plaintiffs, which is less
than seven percent of the potential class members. The parties are
engaging in discovery. Discovery is expected to continue until
April 2014.
AARON'S INC: Denied Appeal in "Korrow" Consumer Litigation
----------------------------------------------------------
The Court of Appeals denied the request of Aaron's Inc. for an
interlocutory appeal of the class certification issue in Margaret
Korrow, et al. v. Aaron's, Inc., according to the company's Nov.
1, 2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Sept. 30, 2013.
In Margaret Korrow, et al. v. Aaron's, Inc., originally filed in
the Superior Court of New Jersey, Middlesex County, Law Division
on October 26, 2010, plaintiff filed suit on behalf of herself and
others similarly situated alleging that the Company is liable in
damages to plaintiff and each class member because the Company's
lease agreements issued after March 16, 2006 purportedly violated
certain New Jersey state consumer statutes.
Plaintiff's complaint seeks treble damages under the New Jersey
Consumer Fraud Act, and statutory penalty damages of $100 per
violation of all contracts issued in New Jersey, and also claim
that there are multiple violations per contract. The Company
removed the lawsuit to the United States District Court for the
District of New Jersey on December 6, 2010 (Civil Action No.: 10-
06317(JAP)(LHG)). Plaintiff on behalf of herself and others
similarly situated seeks equitable relief, statutory and treble
damages, pre- and post-judgment interest and attorneys' fees.
Discovery on this matter is closed. On July 31, 2013, the Court
certified a class comprising all persons who entered into a rent-
to-own contract with the Company in New Jersey from March 16, 2006
through March 31, 2011. In August 2013, the Court of Appeals
denied the Company's request for an interlocutory appeal of the
class certification issue.
AARON'S INC: "PC Rental Agent" Suit Hearing Expected in 2013 Q4
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A hearing on plaintiffs' motion for class certification in the
suit In Crystal and Brian Byrd v. Aaron's, Inc., Aspen Way
Enterprises, Inc. was expected in the fourth quarter of 2013,
according to Aaron's Nov. 1, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2013.
In Crystal and Brian Byrd v. Aaron's, Inc., Aspen Way Enterprises,
Inc., John Does (1-100) Aaron's Franchisees and Designerware, LLC,
filed on May 16, 2011, in the United States District Court,
Western District of Pennsylvania (Case No. 1:11-CV-00101-SPB),
plaintiffs alleged that the Company and its independently owned
and operated franchisee Aspen Way Enterprises ("Aspen Way")
knowingly violated plaintiffs' privacy in violation of the
Electronic Communications Privacy Act and the Computer Fraud Abuse
Act and sought certification of a putative nationwide class.
Plaintiffs based these claims on Aspen Way's use of a software
program called "PC Rental Agent."
The District Court dismissed the Company from the lawsuit on March
20, 2012. On September 14, 2012, plaintiffs filed a second amended
complaint against the Company and its franchisee Aspen Way,
asserting claims for violation of the Electronic Communications
Privacy Act and common law invasion of privacy by intrusion upon
seclusion. Plaintiffs also asserted certain vicarious liability
claims against the Company based on Aspen Way's alleged conduct.
On October 15, 2012, the Company filed a motion to dismiss the
amended complaint, and on February 27, 2013, plaintiffs filed a
motion for leave of the Court to file a third amended complaint
against the Company.
On May 23, 2013, the Court granted plaintiffs' motion for leave to
file a third amended complaint, which asserts the same claims
against the Company as the second amended complaint but also adds
a request for injunction and names additional independently owned
and operated Company franchisees as defendants. Plaintiffs filed
the third amended complaint, and the Company has moved to dismiss
that complaint on substantially the same grounds as it sought to
dismiss plaintiffs' second amended complaint. That motion remains
pending.
Plaintiffs filed their motion for class certification on July 1,
2013, and the Company's response was filed in August 2013. A
hearing on plaintiffs' motion for class certification has not been
held, but is expected in the fourth quarter of 2013. Plaintiffs
seek monetary damages as well as injunctive relief.
AK STEEL: Paying $30.8MM to VEBA to Settle Retirees Lawsuits
------------------------------------------------------------
AK Steel Holding Corporation made payments to Voluntary Employees
Beneficiary Association ("VEBA") trusts totaling $30.8 million
pursuant to settlements of class actions filed on behalf of
certain retirees from the Company's Butler Works and Zanesville
Works, according to the company's Nov. 1, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended Sept. 30, 2013.
The Company provides noncontributory pension and various
healthcare and life insurance benefits to most employees and
retirees. The pension plan is not fully funded. The Company
contributed $181.1 million to the master pension trust during
2013. Of this total, $140.2 million was made in the nine months
ended September 30, 2013 and the remaining $40.9 million was made
in October 2013. In July 2013, the Company made payments to
Voluntary Employees Beneficiary Association ("VEBA") trusts
totaling $30.8 million pursuant to settlements of class actions
filed on behalf of certain retirees from the Company's Butler
Works and Zanesville Works relating to the Company's other
postretirement benefit ("OPEB") obligations to such retirees. This
included the final payment to the Butler VEBA, and effective
January 1, 2015, all future OPEB obligations for these Butler
Works retirees will become the responsibility of the Butler VEBA
trust.
Remaining payments to the Zanesville Works VEBA will be $3.1
million in July 2014 and July 2015. Based on current actuarial
valuations, the Company estimates that its required annual pension
contributions will be approximately $210.0 million in 2014 and
$125.0 million in 2015.
AK STEEL: Appeals Court Upheld Remand Ruling in "Schumacher" Case
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The parties in the suit filed by William Schumacher against the AK
Steel Corporation Retirement Accumulation Pension Plan are in the
process of negotiating a distribution plan for payment of the
final judgment to the plaintiffs, according to the company's Nov.
1, 2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Sept. 30, 2013.
On October 20, 2009, William Schumacher filed a purported class
action against the AK Steel Corporation Retirement Accumulation
Pension Plan, or AK RAPP, and the AK Steel Corporation Benefit
Plans Administrative Committee in the United States District Court
for the Southern District of Ohio, Case No. 1:09cv794. The
complaint alleges that the method used under the AK RAPP to
determine lump sum distributions does not comply with ERISA and
the Internal Revenue Code and resulted in underpayment of benefits
to him and the other class members. The plaintiff and the other
individuals on whose behalf the plaintiff filed suit were excluded
by the Court in 2005 from similar litigation previously reported
and now resolved (the class action litigation filed January 2,
2002 by John D. West) based on previous releases of claims they
had executed in favor of the Company. There were a total of 92
individuals who were excluded from the prior litigation. On
January 24, 2011, this case was certified as a class action. On
June 27, 2011, the Court granted a motion filed by the plaintiff
for partial summary judgment on the issue of liability. On
December 12, 2011, the Court entered a final judgment in an amount
slightly in excess of $3.0 million, which included pre-judgment
interest at the statutory rate through that date.
The defendants filed an appeal from that final judgment to the
United States Court of Appeals for the Sixth Circuit and the
plaintiff filed an appeal on the issue of how the pre-judgment
interest was calculated. On March 28, 2013, the Court of Appeals
issued an opinion in which it upheld the District Court's decision
with respect to liability and reversed and remanded the District
Court's decision with respect to pre-judgment interest.
On May 29, 2013, Plaintiffs' counsel filed a motion for a
determination of the new rate for pre-judgment interest with
respect to the final judgment amount of $3.0 million. An order
deciding that motion was issued by the court on July 29, 2013 and
on August 27, 2013, the Court entered a final judgment of $4.4
million in accordance with that pre-judgment interest order. The
parties are in the process of negotiating a distribution plan for
payment of the final judgment to the plaintiffs. Because the final
judgment will be paid out of the Company's pension assets, the
Company has not recorded an accrual related to this matter.
AK STEEL: To Settle "Patrick" Suit in Ohio for $2.5 Million
-----------------------------------------------------------
AK Steel Corp. and the AK Steel Corporation Benefit Plans
Administrative Committee are in the process of settling a suit
filed by Judith A. Patrick in the United States District Court for
the Southern District of Ohio for $2.5 million, according to AK
Steel's Nov. 1, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended Sept. 30, 2013.
On October 20, 2005, Judith A. Patrick and another plaintiff filed
a purported class action against AK Steel and the AK Steel
Corporation Benefit Plans Administrative Committee in the United
States District Court for the Southern District of Ohio, Case No.
1:05-cv-681 (the "Patrick Litigation"). Like the complaint in
similar litigation previously reported and now resolved in the
Company's favor (the action filed May 27, 2009 by Margaret A.
Lipker, hereinafter referred to as the "Lipker Litigation"), the
complaint in the Patrick Litigation alleges that the defendants
incorrectly calculated the amount of surviving spouse benefits due
to be paid to the plaintiffs under an applicable pension plan.
The parties filed cross-motions for summary judgment on the issue
of whether the applicable plan language had been properly
interpreted. On September 28, 2007, the United States Magistrate
Judge assigned to the case issued a Report and Recommendation in
which he recommended that the plaintiffs' motion for partial
summary judgment be granted and that the defendants' motion be
denied. On March 31, 2008, the court issued an order adopting the
Magistrate's recommendation and granting partial summary judgment
to the plaintiffs on the issue of plan interpretation. The
plaintiffs also filed a motion for class certification and that
motion was granted on October 27, 2008. The case proceeded
thereafter with respect to discovery on the issue of damages. In
November 2011 the plaintiffs submitted an expert report in which
their expert contends that the total damages, excluding interest,
for the class could total as much as $28.9 million. With interest,
the amount could have exceeded $42.0 million. The defendants
believe that the damage calculation in the plaintiffs' expert
report is incorrect and have contested that calculation. Trial
with respect to damages previously was scheduled to begin January
14, 2013, but that date was vacated at the request of defendants
in light of the decision issued in AK Steel's favor in the Lipker
Litigation.
Defendants filed a Motion for Reconsideration with the District
Court in the Patrick Litigation on the ground that the plan
interpretation issues in the Lipker Litigation and the Patrick
Litigation are materially the same and that the Sixth Circuit
decision issued in AK Steel's favor in the Lipker Litigation
likewise requires a decision in favor of the defendants in the
Patrick Litigation. Plaintiffs opposed AK Steel's Motion for
Reconsideration. That motion was fully briefed by the parties and
oral argument occurred on February 20, 2013. While the parties
were awaiting a decision on that motion, the District Court called
a settlement conference and through that process, the parties
reached a settlement, subject to court approval.
A formal settlement agreement has been executed and on July 1,
2013, the parties filed a Motion for Preliminary Approval of Class
Settlement. An order providing such preliminary approval was
entered on July 29, 2013. Under the proposed settlement, the named
plaintiffs and other participating class members would be paid
$1.7 million and $0.8 million would be paid to plaintiffs'
attorneys for fees and costs, for a total payment of $2.5 million.
The payments would be made from the applicable pension plan
assets. The proposed settlement is subject to final court approval
after notice to the class members and a fairness hearing. That
fairness hearing has been scheduled for November 20, 2013. Class
members have the option to object to, opt out of, or participate
in the settlement.
The settlement will become effective only if the District Court
approves it following the fairness hearing and certain other
requirements are met, including that the number of class members
who opt out does not exceed a specified amount. If the settlement
is not approved or the other requirements are not met, the
litigation will resume. In that instance, if judgment is entered
in favor of defendants pursuant to the Motion for Reconsideration,
that would conclude the Patrick Litigation without any liability
on the part of defendants, subject to plaintiffs' right of appeal.
If judgment is not entered in favor of defendants, it is expected
that the District Court will reschedule the damages trial
previously scheduled for January 14, 2013, in which case
defendants would continue to contest this matter vigorously.
Because a final judgment, if any, in favor of the plaintiff class
members would be paid out of the Company's pension assets, the
Company has not recorded an accrual related to this matter.
AK STEEL: Class Cert. Issue in Direct Buyers' Suit Proceeds
-----------------------------------------------------------
Discovery in the action filed by direct purchaser plaintiffs
against nine steel manufacturers, including AK Steel Holding Corp.
has proceeded only with respect to issues relating to class
certification, according to the company's Nov. 1, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended Sept. 30, 2013.
In September and October 2008, several companies filed purported
class actions in the United States District Court for the Northern
District of Illinois, against nine steel manufacturers, including
AK Holding. The case numbers for these actions are 08CV5214,
08CV5371, 08CV5468, 08CV5633, 08CV5700, 08CV5942 and 08CV6197. An
additional action, case number 10CV04236, was filed in the same
federal district court on July 8, 2010. On December 28, 2010
another action, case number 32,321, was filed in state court in
the Circuit Court for Cocke County, Tennessee. The defendants
removed the Tennessee case to federal court and filed a motion to
transfer the case to the Northern District of Illinois. That
motion was granted on March 28, 2012. The plaintiffs in the
various pending actions are companies which claim to have
purchased steel products, directly or indirectly, from one or more
of the defendants and they purport to file the actions on behalf
of all persons and entities who purchased steel products for
delivery or pickup in the United States from any of the named
defendants at any time from at least as early as January 2005.
The complaints allege that the defendant steel producers have
conspired in violation of antitrust laws to restrict output and to
fix, raise, stabilize and maintain artificially high prices with
respect to steel products in the United States. Discovery has
commenced. On May 24, 2012, the direct purchaser plaintiffs filed
a motion for class certification. On February 28, 2013, the
defendants filed a memorandum in opposition to the motion for
class certification and motions to exclude the opinions of the
plaintiffs' experts. The motion for class certification and the
motions to exclude the opinions of the plaintiffs' experts remain
pending. No trial date has been set. AK Holding intends to contest
this matter vigorously. To date, discovery in this action has
proceeded only with respect to issues relating to class
certification.
Accordingly, the Company does not have adequate information
available to determine that a loss is probable or to reliably or
accurately estimate its potential loss in the event that the
plaintiffs were to prevail. Because the Company has been unable to
determine that the potential loss in this case is probable or
estimable, it has not recorded an accrual related to this matter.
In the event that the Company's assumptions used to evaluate
whether a loss in this matter is either probable or estimable
prove to be incorrect or change in future periods, the Company may
be required to record a liability for an adverse outcome.
ASSOCIATED BANC-CORP: Bank Unit Wins Approval of $13MM Settlement
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Associated Bank, N.A. received final court approval of a
settlement agreement which requires payment by the Bank of $13
million, according to Associated Banc-Corp's Nov. 1, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended Sept. 30, 2013.
A putative class action lawsuit, Harris v. Associated Bank, N.A.
(the "Bank"), was filed in the United States District Court for
the Western District of Wisconsin in April 2010, alleging that the
Bank unfairly assessed and collected overdraft fees and seeking
restitution of the overdraft fees, compensatory, consequential and
punitive damages, and costs. The case was subsequently
consolidated into the Multi District Litigation ("MDL"), In re:
Checking Account Overdraft Litigation MDL No. 2036 in the United
States District Court for the Southern District of Florida. A
settlement agreement which requires payment by the Bank of $13
million for a full and complete release of all claims brought
against the Bank received final approval from the court on August
1, 2013. By entering into such an agreement, the Bank has not
admitted any liability with respect to the lawsuit. The settlement
amount was previously accrued for in the financial statements. In
the second quarter of 2012, the Bank settled with an insurer for a
$2.5 million contribution to the settlement amount and partial
reimbursement of defense costs of up to $2.1 million.
AVIS BUDGET: Continues Settlement Process in Antitrust Suit
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Parties in the suit Michael Shames v. The Hertz Corp. et al. (S.D.
Cal.) have begun fulfilling their obligations under the terms of a
May 2012 settlement agreement, according to Avis Budget Group,
Inc.'s Nov. 1, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended Sept. 30, 2013.
In the putative class action lawsuit against the Company,
captioned Michael Shames v. The Hertz Corp. et al. (S.D. Cal.),
which alleged violations of federal and state antitrust and unfair
competition laws, the Company agreed to a settlement in May 2012.
Certain members of the class appealed the settlement, and the
appeal was denied by the court in September 2013. The parties
have begun fulfilling their obligations under the terms of the May
2012 settlement agreement and the cost to the Company of such
obligations is not significant.
AVIS BUDGET: California Labor Lawsuit Won't Proceed as Class
------------------------------------------------------------
Avis Budget Group, Inc. is involved in various legal proceedings
related to wage and hour and employee classification claims. A
putative class action which is pending against the company in
California, alleging violations of state law regarding meal breaks
taken by the company's employees, was denied class certification
in September 2013, according to the company's Nov. 1, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended Sept. 30, 2013.
BLYTH INC: Files Memorandum to Support Securities Suit Dismissal
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Blyth, Inc. and other defendants in a securities suit pending in
federal district court in Connecticut filed a reply memorandum in
support of a motion to dismiss a second amended complaint,
according to the company's Nov. 1, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
Sept. 30, 2013.
Blyth, certain of its officers, FVA Ventures, Inc. ("FVA"),
ViSalus Holdings, LLC, ViSalus and one of its Founders were named
as defendants in a putative class action filed in federal district
court in Connecticut on behalf of purchasers of the Company's
common stock during the period March to November 2012. On June 3,
2013, the Company and the other defendants moved to dismiss the
then-operative amended complaint. In lieu of responding to the
motion to dismiss, on June 24, 2013 plaintiff filed a second
amended complaint, which is currently operative and names as
defendants the Company, certain of its officers, ViSalus Holdings,
LLC, ViSalus, and a ViSalus co-founder/promoter. The second
amended complaint, which seeks unspecified damages and asserts
violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder, alleges certain
misstatements and omissions by certain defendants, including
concerning ViSalus's operations and prospects, and further alleges
that certain defendants engaged in a fraudulent or deceptive
"scheme." On August 2, 2013, the Company and the other defendants
filed a memorandum of law in support of the company's motion to
dismiss the second amended complaint. On September 12, 2013,
plaintiff filed a memorandum of law opposing defendants' motion to
dismiss its second amended complaint, and on October 3, 2013 the
Company and the other defendants filed a reply memorandum in
support of the company's motion to dismiss the second amended
complaint. The Company believes that it has meritorious defenses
to the claims asserted against it and it intends to defend itself
vigorously.
BMO NESBITT: Denied Leave to Appeal Class Action Cert. Ruling
-------------------------------------------------------------
Koskie Minsky LLP on Dec. 18 disclosed that in reasons released
December 17, 2013, Madam Justice Sachs of The Divisional Court
denied BMO Nesbitt Burns Inc. leave to appeal from an earlier
decision certifying a class action against Nesbitt Burns for
overtime compensation. The denial of leave to appeal means that
the earlier order of Justice Belobaba certifying the class action
against BMO Nesbitt Burns Inc. stands.
Class Counsel believes that up to 1,500 current and former
Investment Advisors, Associate Investment Advisors and Investment
Advisor Trainees, employed by Nesbitt Burns since 2002, may
potentially be class members.
The class action claim alleges that Nesbitt Burns breached its
duties to the class members by systematically and improperly
denying overtime to the class. The allegations have not yet been
proven in court. The decision denying leave to appeal will allow
this case to proceed as a class action.
Yegal Rosen, a former Investment Advisor with Nesbitt Burns, has
been appointed as the lead representative plaintiff in the action.
Mr. Rosen worked as an Investment Advisor for Nesbitt Burns Inc.
from 2002-2006. Mr. Rosen alleges that during this period he
never received overtime compensation, while working between 60-80
hours per week.
This class action follows several other "off the clock" overtime
class actions by employees in the banking sector. This is the
first "misclassification" case in this area to be certified as a
class action, and with leave to appeal denied, this case will now
continue.
BROCKTON, MA: Sued Over Discriminatory Hiring Practices
-------------------------------------------------------
Edward Donga, writing for The Enterprise, reports that a former
Brockton resident has brought a class-action lawsuit against the
city over allegedly discriminatory hiring practices within the
Department of Public Works.
The complaint, which was filed in Plymouth County Superior Court
on Dec. 16, was brought by Russell Lopes, who lived in Brockton
for 20 years before moving to Virginia in July 2012.
The defendants are the City of Brockton, DPW Commissioner Michael
Thoreson and Personnel Director Maureen Cruise.
In August 2010, Mr. Lopes applied for a job with the DPW as a
"Motor Equipment Repairman," but was not hired.
Mr. Lopes, a black man from Cape Verde, claims in his lawsuit that
the white man who was eventually hired had filed an incomplete
application.
Among the minimum requirements for applicants interested in the
position, according to the lawsuit, were "three to five years of
light and heavy truck and equipment maintenance and repair
experience" and a "notarized letter from a former employer
verifying in detail the job description and dates of employment."
In the lawsuit, Mr. Lopes states that he had at least six years of
experience and an associate's degree in mechanical engineering.
He is also a certified outdoor power technician.
"He has a degree in mechanical engineering. He's spent years
doing motor equipment repair. There's no reason he's not prepared
to do the job," said Philip Gordon, Mr. Lopes attorney.
In the lawsuit, Messrs. Lopes and Gordon claim that white
applicant who was hired for the position submitted an incomplete
application.
According to the complaint, the applicant who was hired allegedly
failed to provide any dates of employment for his listed work
experience, a notarized letter verifying his employment history
and answers to several application questions.
The lawsuit also makes reference to an event in July 2011, when
one day after speaking to The Enterprise for a series on hiring
practices at the DPW, a police officer and fire lieutenant
inspected Mr. Lopes' home to investigate a complaint that he was
running a car-repair business from his house.
The lawsuit also claims that over the past 10 years, the
department has hired 41 employees, 39 of whom were white, none
were black, none were Asian and two were listed as "other."
The complaint also states that of the 117 employees working at the
DPW, 109 are white.
"We think it's systemic," said Mr. Gordon. "We think there's a
bigger issue than just one guy."
As a class-action lawsuit, "all qualified, non-white applicants to
the Department of Public Works from October 8, 2003 to the date of
final judgment" can join the lawsuit and are an eligible party to
the suit.
Although not all of the applicants are known to Messrs. Lopes and
Gordon at this time, the lawsuit states that they believe there
are over 40 possible class members.
Mr. Lopes had previously brought the case to the Massachusetts
Commission Against Discrimination, which found probable cause on
an appeal.
However, the city is disputing Mr. Lopes claims that the DPW's
hiring practices are discriminatory.
"I believe the allegations to be baseless," said City Solicitor
Philip Nessralla. "My review of the city records and documents
suggests no impropriety or discriminatory practice."
Mr. Nessralla said he was unable to comment on specifics in the
complaint because it had not been served to the city yet.
CAMBREX CORP: Insurers' Suit Over Lorazepam & Clorazepate Pending
-----------------------------------------------------------------
All cases against Cambrex Corporation over Lorazepam and
Clorazepate were resolved except for one brought by four health
care insurers currently pending before the United States District
Court for the District of Columbia, which has yet to rule whether
the court has jurisdiction over certain self-funded customer
plaintiffs, according to the company's Nov. 1, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended Sept. 30, 2013.
In 1998, the Company and a subsidiary were named as defendants
along with Mylan Laboratories, Inc. ("Mylan") and Gyma
Laboratories, Inc. ("Gyma") in a proceeding instituted by the
Federal Trade Commission in the United States District Court for
the District of Columbia (the "District Court"). Suits were also
commenced by several State Attorneys General and class action
complaints by private plaintiffs in various state courts. The
suits alleged violations of the Federal Trade Commission Act
arising from exclusive license agreements between the Company and
Mylan covering two active pharmaceutical ingredients (Lorazepam
and Clorazepate).
All cases have been resolved except for one brought by four health
care insurers. In the remaining case, the District Court entered
judgment after trial in 2008 against Mylan, Gyma and Cambrex in
the total amount of $19,200,000, payable jointly and severally,
and also a punitive damage award against each defendant in the
amount of $16,709,000. In addition, at the time, the District
Court ruled that the defendants were subject to a total of
approximately $7,500,000 in prejudgment interest.
The case is currently pending before the District Court following
a January 2011 remand by the Court of Appeals where briefing
related to whether the court has jurisdiction over certain self-
funded customer plaintiffs has been completed and the parties are
currently waiting for a ruling by the court.
In 2003, Cambrex paid $12,415,000 to Mylan in exchange for a
release and full indemnity against future costs or liabilities in
related litigation brought by the purchasers of Lorazepam and
Clorazepate, as well as potential future claims related to the
ongoing matter. Mylan has submitted a surety bond underwritten by
a third-party insurance company in the amount of $66,632,000. In
the event of a final settlement or final judgment, Cambrex expects
any payment required by the Company to be made by Mylan under the
indemnity.
DEUTSCHE SECURITIES: Dismissed From Class Action Over $7BB in MBS
-----------------------------------------------------------------
Michael Lipkin, Evan Weinberger and David McAfee, writing for
Law360, report that a New York federal judge on Dec. 18 dismissed
Deutsche Securities Inc. from a class action against a host of
issuers and underwriters over about $7 billion in mortgage-backed
securities, finding a recent Second Circuit decision meant
intervening plaintiffs could not join the suit.
U.S. District Judge Harold Baer Jr. had ruled in January that the
intervening plaintiffs were not barred by the Securities Act of
1933's statute of repose language even though they had filed more
than three years after the securities were offered, relying on the
Supreme Court's 1974 American Pipe & Construction Co. v. Utah
decision.
In the Dec. 18 opinion, Judge Baer ruled that the Second Circuit's
decision in Police & Fire Retirement System of City of Detroit v.
IndyMac MBS Inc. found that American Pipe did not apply to the
Securities Act's statute of repose.
"It is well-settled that I must apply the IndyMac holding to this
matter," Judge Baer wrote. "Further, I decline to postpone
IndyMac's application pending the Supreme Court's decision on the
cert petition."
The plaintiffs, including the intervenors, are institutional
investors who bought MBS known collectively as RALI certificates
in 2006 and 2007. The suit involves the sale of MBS to a New
Jersey pension fund and other investors in 59 offerings. The
plaintiffs say the prospectuses issued in connection with the
securities contained material misstatements and omissions.
The intervening plaintiffs, including pension funds from New
Jersey and Iowa, had filed separate cases against the defendants
over the relevant securities before the three-year statutory
period had expired, according to court documents. They dropped
those cases and moved to intervene in the instant case after the
expiration.
The defendants also wanted Citigroup Global Markets Inc. and
Goldman Sachs & Co. offerings dropped from the suit, admitting the
claims would survive under current Second Circuit law but arguing
a dismissal would avoid the need for "further intercession" by the
court in case precedential decisions are overturned.
"While I appreciate the defendants' concern for any further
extension of this litigation and their noticeable bashfulness at
coming to court, these claims will not be dismissed at this
juncture," Judge Baer wrote.
The investors claim the RALI certificates' seller, Residential
Capital LLC, and their underwriters, a group of big banks, are
liable for disclosing weaknesses in the underlying loans.
The certificates all collapsed in value and received junk ratings
when many of the underlying loans went into default or were
foreclosed on, the plaintiffs say. They claim the offering
statements Residential Capital put out lied about how stringent
the mortgage originators' lending guidelines were.
The plaintiffs settled with RALI and its affiliates in July for
$100 million, but did not include the underwriter defendants
Goldman Sachs, Citigroup, Deutsche Bank and UBS Securities LLC.
An attorney for the plaintiffs said they were pleased the ruling
did not dismiss two of the four offerings at issue.
"The ruling is not unexpected given the change in Second Circuit
law on the statute of repose, but eliminates only a limited number
of offerings in the cases," said Joel P. Laitman --
jlaitman@cohenmilstein.com -- of Cohen Milstein Sellers & Toll
PLLC.
Representatives for the defendants did not immediately respond to
requests for comment on Dec. 18.
The plaintiffs are represented by Joel P. Laitman of Cohen
Milstein Sellers & Toll PLLC and Robin F. Zwerling --
rzwerling@zsz.com -- of Zwerling Schachter & Zwerling LLP.
The underwriter defendants are represented by William G. McGuiness
-- william.mcguinness@friedfrank.com -- Israel David --
israel.david@friedfrank.com -- Alfred L. Fatale III --
alfred.fatale@friedfrank.com -- Mark Siegmund --
mark.siegmund@friedfrank.com -- and Chelsea P. Hall --
chelsea.hall@friedfrank.com -- of Fried Frank Harris Shriver &
Jacobson LLP.
The case is New Jersey Carpenters Health Fund v. RALI Series 2006-
QO1 Trust et al., case number 2:08-cv-08781, in the U.S. District
Court for the Southern District of New York.
DISCOVER FINANCIAL: Awaits Final OK of Accord in "Bradley" Suit
---------------------------------------------------------------
Discover Financial Services is awaiting final approval of a
settlement it entered into in the case filed in U.S. District
Court for the Northern District of California by Walter Bradley et
al., according to the company's Nov. 1, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended Sept. 30, 2013.
There are two class action cases pending in relation to the
Telephone Consumer Protection Act ("TCPA"). The cases were filed
in the U.S. District Court for the Northern District of California
on November 30, 2011 (Walter Bradley et al. v. Discover Financial
Services) and on March 6, 2012 (Andrew Steinfeld v. Discover
Financial Services, DFS Services LLC and Discover Bank).
The plaintiff in each case alleges the Company contacted him, and
members of the class he seeks to represent, on their cellular
telephones without their express consent in violation of the TCPA.
The plaintiff in each case seeks statutory damages for alleged
negligent and willful violations of the TCPA, attorneys' fees,
costs and injunctive relief. The TCPA provides for statutory
damages of $500 for each violation ($1,500 for willful
violations). The Company and class counsel entered into a
preliminary settlement of both pending class actions. On September
10, 2013, the court granted preliminary approval of the
settlement. The settlement remains subject to final approval by
the court following completion of notice to the settlement class.
ELECTRONIC ARTS: Misleads Class on Battlefield Rollout, Suit Says
-----------------------------------------------------------------
Ryan Kelly, Individually and on Behalf of All Others Similarly
Situated v. Electronic Arts, Inc., Andrew Wilson, Blake Jorgensen,
Patrick Soderlund, Frank D. Gibeau and Peter Robert Moore, Case
No. 3:13-cv-05837 (N.D. Cal., December 17, 2013) is a securities
class action on behalf of all purchasers of the common stock of
Electronic Arts between July 24, 2013, and December 4, 2013,
inclusive.
During the Class Period, the Defendants issued materially false
and misleading statements highlighting the purported strength of
the Company's rollout of version 4 of Electronic Arts' all-
important Battlefield video game series that had provided
approximately 11% of its revenues in fiscal 2012, the Plaintiff
alleges.
Redwood City-based Electronic Arts develops, markets, publishes,
and distributes video game software content and services that can
be played by consumers on a variety of Internet based electronic
devices for video game consoles, personal computers, mobile
phones, tablets and electronic readers. The Individual Defendants
are directors and officers of the Company.
The Plaintiff is represented by:
Shawn A. Williams, Esq.
ROBBINS GELLER RUDMAN & DOWD LLP
Post Montgomery Center
One Montgomery Street, Suite 1800
San Francisco, CA 94104
Telephone: (415) 288-4545
Facsimile: (415) 288-4534
E-mail: shawnw@rgrdlaw.com
- and -
Samuel H. Rudman, Esq.
Mary K. Blasy, Esq.
58 South Service Road, Suite 200
Melville, NY 11747
Telephone: (631) 367-7100
Facsimile: (631) 367-1173
E-mail: srudman@rgrdlaw.com
mblasy@rgrdlaw.com
- and -
Corey D. Holzer, Esq.
Marshall P. Dees, Esq.
HOLZER & HOLZER, LLC
200 Ashford Center North, Suite 300
Atlanta, GA 30338
Telephone: (770) 392-0090
Facsimile: (770) 392-0029
E-mail: cholzer@holzerlaw.com
mdees@holzerlaw.com
FACEBOOK INC: Seeks to Dismiss Securities Lawsuit in New York
-------------------------------------------------------------
The United States District Court for the Southern District of New
York heard argument on a motion to dismiss the consolidated
securities class action filed against Facebook, Inc., according to
the company's Nov. 1, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2013.
Starting on May 22, 2012, multiple putative class actions,
derivative actions, and individual actions were filed in state and
federal courts in the United States and in other jurisdictions
against the company, the company's directors, and/or certain of
the company's officers alleging violation of securities laws or
breach of fiduciary duties in connection with the company's IPO
and seeking unspecified damages. The company believes these
lawsuits are without merit, and the company intends to continue to
vigorously defend them.
On October 4, 2012, on the company's motion, the vast majority of
the cases in the United States, along with multiple cases filed
against The NASDAQ OMX Group, Inc. and The Nasdaq Stock Market LLC
(collectively referred to herein as NASDAQ) alleging technical and
other trading-related errors by NASDAQ in connection with the
company's IPO, were ordered centralized for coordinated or
consolidated pre-trial proceedings in the United States District
Court for the Southern District of New York. On February 13, 2013,
the court granted the company's motion to dismiss four derivative
actions against the company's directors and certain of the
company's officers with leave to amend. On October 8, 2013, the
court heard argument on the company's motion to dismiss the
consolidated securities class action, as well as the company's
motion to dismiss, and the plaintiffs' motion to remand to state
court, certain other derivative actions. In addition, the events
surrounding the company's IPO have become the subject of various
government inquiries, and the company is cooperating with those
inquiries.
FIDELITY NATIONAL: California Court Revives UCL Class Action
------------------------------------------------------------
Bibeka Shrestha, writing for Law360, reports that relying on the
California Supreme Court's recent ruling in Zhang, a state appeals
court decided on Dec. 17 to give plaintiffs another shot at a
certified class action accusing Fidelity National Home Warranty
Co. of unfairly denying claims.
According to the ruling, a California trial court was mistaken
when it tossed the entire class action and refused to allow the
plaintiffs to amend their complaint, partly because of a mistaken
pre-Zhang view of the law on unfair competition claims.
"Under Zhang, it is likely the proposed amendment could withstand
Fidelity's challenge to the pleadings on the UCL claim," the
appeals court said. "In refusing to permit an amendment, the
trial court was viewing the case through the lens of pre-Zhang law
regarding the viability of a UCL claim."
Fidelity had initially argued that the plaintiff's UCL claim
should be extinguished because it was an "artfully fram[ed]" claim
under the Unfair Insurance Practices Act disguised as a UCL claim,
which was not allowed under the California Supreme Court's 1988
decision in Moradi-Shalal v. Fireman's Fund Insurance Cos.
But the California high court in August found that Moradi-Shalal
did not block unfair competition claims in the Zhang case. The
Supreme Court clarified in the Zhang case that plaintiffs can sue
insurers that run afoul of the Unfair Insurance Practices Act, if
the conduct at issue also violates other statutes or the common
law.
"Plaintiff alleges causes of action for false advertising and
insurance bad faith, both of which provide grounds for a UCL claim
independent from the UIPA," the Dec. 17 ruling said.
The appeals court rejected Fidelity's argument that Zhang did not
apply because it held only that a false advertising claim could
support a UCL cause of action. According to the ruling, Fidelity
claimed that the Zhang court did not hold that a bad faith claim
could prop up a UCL claim.
Finding that argument was based on a misread of Zhang, the appeals
court said the Zhang court recognized that insurance bad faith
allegations can be a sufficient predicate to plead a valid UCL
cause of action.
The appeals court also rejected Fidelity's argument that the Zhang
holding applied only to individual, not class, claims.
In a win for Fidelity, however, the California appeals court
upheld the lower court's decision to toss the plaintiffs' claims
under the Consumer Legal Remedies Act, finding that Fidelity's
home warranty contracts were akin to insurance plans -- which are
not goods or services that are covered by that statute.
Steven Goldfarb -- sagoldfarb@hahnlaw.com -- a Hahn Loeser & Parks
LLP attorney for Fidelity, said the more important part of the
decision was the appeals court's decision to toss the CLRA claim.
"The CLRA allows a way more directly to recover damages and
attorneys' fees that you don't have directly under the UCL,"
Mr. Goldfarb said. "That was the bigger issue in the case."
Attorneys for the plaintiffs were not immediately available to
comment on Dec. 18.
The class certified in the case includes all U.S. persons and
entities who made a claim under a home warranty plan from Fidelity
from July 2002 to the present -- though the plaintiffs
unsuccessfully tried to reshape the class into one involving all
those who bought home warranty plans from Fidelity.
Kaplan and Baker are represented by Francis Bottini Jr. and Yury
Kolesnikov of Bottini & Bottini Inc.
Fidelity is represented by Michael Gleason -- mgleason@hahnlaw.com
-- Steven Goldfarb -- sagoldfarb@hahnlaw.com -- and Kelly Kosek --
kkosek@hahnlaw.com -- of Hahn Loeser & Parks LLP.
The case is Dan Kaplan et al. v. Fidelity National Home Warranty
Co., case numbers D062531 and D062747, in the California Court of
Appeal, Fourth Appellate District.
FIRST SOLAR: Ariz. Court Certifies "Smilovits" Securities Suit
--------------------------------------------------------------
The United States District Court for the District of Arizona
granted the motion of Mineworkers' Pension Scheme and British Coal
Staff Superannuation Scheme for class certification in the suit
Smilovits v. First Solar, Inc., et al., Case No. 2:12-cv-00555-
DGC, according to the company's Nov. 1, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended Sept. 30, 2013.
On March 15, 2012, a purported class action lawsuit titled
Smilovits v. First Solar, Inc., et al., Case No. 2:12-cv-00555-
DGC, was filed in the United States District Court for the
District of Arizona (hereafter "Arizona District Court") against
the Company and certain of the company's current and former
directors and officers. The complaint was filed on behalf of
purchasers of the Company's securities between April 30, 2008, and
February 28, 2012. The complaint generally alleges that the
defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 by making false and misleading statements
regarding the Company's financial performance and prospects. The
action includes claims for damages, and an award of costs and
expenses to the putative class, including attorneys' fees. The
Company believes it has meritorious defenses and will vigorously
defend this action.
On July 23, 2012, the Arizona District Court issued an order
appointing as lead plaintiffs in the class action the Mineworkers'
Pension Scheme and British Coal Staff Superannuation Scheme
(collectively, the "Pension Schemes"). The Pension Schemes filed
an amended complaint on August 17, 2012, which contains similar
allegations and seeks similar relief as the original complaint.
Defendants filed a motion to dismiss on September 14, 2012. On
December 17, 2012, the court denied Defendants' motion to dismiss.
On February 26, 2013, the court directed the parties to begin
class certification discovery, and ordered a further scheduling
conference to set the merit discovery schedule after the issue of
class certification has been decided. On June 21, 2013, the
Pension Schemes filed a motion for class certification.
On October 8, 2013, the Arizona District Court granted the Pension
Schemes' motion for class certification, and scheduled a case
management conference to set the fact discovery schedule on
November 22, 2013.
The action is still in the initial stages and there has been no
merits discovery. Accordingly, the company is not in a position to
assess whether any loss or adverse effect on the company's
financial condition is probable or remote or to estimate the range
of potential loss, if any.
GENERAL NUTRITION: Accused of Using Illegal Fluctuating Work Week
-----------------------------------------------------------------
General Nutrition Centers cheat workers of overtime by using an
illegal "fluctuating work week," a class action claims in the
Philadelphia Court of Common Pleas.
GENWORTH FINANCIAL: Bares Status of Suits Alleging RESPA Breach
---------------------------------------------------------------
In its Nov. 1, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended Sept. 30, 2013,
Genworth Financial, Inc. provided updates regarding the status of
lawsuits filed against one of its U.S. mortgage insurance
subsidiaries.
The lawsuits allege that certain "captive reinsurance
arrangements" were in violation of The Real Estate Settlement
Procedures Act.
Starting in December 2011 and continuing through January 2013,
one of the company's U.S. mortgage insurance subsidiaries was
named along with several other mortgage insurance participants and
mortgage lenders as a defendant in 12 putative class action
lawsuits alleging that certain "captive reinsurance arrangements"
were in violation of RESPA. The so-called Barlee case was
dismissed by the Court with prejudice as to the company's
subsidiary and certain other defendants on February 27, 2013. In
the so-called Riddle case, the defendants' motion to dismiss was
denied, but the Court limited discovery at this stage to issues
surrounding the statute of limitations. The Manners case was
voluntarily dismissed by the plaintiffs in March 2013. In the
Moriba BA case, the Court denied defendants' motion to dismiss by
order dated June 26, 2013. In the White case, plaintiffs filed a
second amended complaint to address the deficiencies that the
Court identified in previously dismissing the action. On July 22,
2013, the company's mortgage insurance subsidiary moved to dismiss
the second amended complaint. In the Hill case, the defendants'
motion to dismiss was denied on June 27, 2013, but the Court
limited discovery at this stage to issues surrounding the statute
of limitations.
In the Samp and Orange cases, the plaintiffs have appealed the
dismissals to the U.S. Court of Appeals for the Ninth Circuit. The
Menichino case was dismissed by the Court without prejudice as to
the company's subsidiary and certain other defendants on July 19,
2013. In the Riddle case, on July 19, 2013, the company moved for
summary judgment dismissing the case. The company intends to
vigorously defend the remaining actions.
HERTZ GLOBAL: Made Millions From Prepaid Fuel Customers, Suit Says
------------------------------------------------------------------
Courthouse News Service reports that Hertz/Dollar Thrifty made
millions from "prepaid fuel" customers by "charging them for an
amount of fuel in excess of the capacity of the rental vehicle's
fuel tank," a class action claims in Hillsborough County Court,
Florida.
INSYS THERAPEUTICS: Faces Suit Over Illegal Marketing of Subsys
---------------------------------------------------------------
Mike W. Hillier, Individually and On Behalf of All Others
Similarly Situated v. Insys Therapeutics, Inc.; Michael Babich;
and Darryl S. Baker, Case No. 2:13-cv-02563-HRH (D. Ariz.,
December 16, 2013) is a federal securities class action brought on
behalf of a class consisting of all persons other than the
Defendants, who purchased or otherwise acquired Insys securities
between May 1, 2013, and December 12, 2013, seeking to recover
damages caused by the Defendants' alleged violations of the
federal securities laws.
Throughout the Class Period, the Defendants made materially false
and misleading statements regarding the Company's business and
operations, Mr. Hillier alleges. Specifically, he points out, the
Defendants made false and misleading statements concerning, among
other things, that the Company engaged in illegal and unethical
marketing of Subsys and that the Company was exposed to potential
fines and other disciplinary actions as a result of its Subsys
marketing practices.
Insys is a Delaware corporation headquartered in Chandler,
Arizona. Insys is a commercial-stage specialty pharmaceutical
company that develops and commercializes innovative supportive
care products, primarily intended to assist cancer patients cope
with the symptoms of their disease and treatment or therapy. The
Company has two marketed products, Subsys and Dronabinol SG
Capsule, which utilize Insys' sublingual spray drug delivery
technology and dronabinol formulation and manufacturing
capabilities.
Michael Babich has been the Company's President, Chief Executive
Officer, and a member of the Company's board of directors at all
relevant times. Darryl S. Baker has been the Company's Chief
Financial Officer at all relevant times.
The Plaintiff is represented by:
Susan Martin, Esq.
Jennifer L. Kroll, Esq.
MARTIN & BONNETT, P.L.L.C.
1850 N. Central Ave., Suite 2010
Phoenix, AZ 85004
Telephone: (602) 240-6900
E-mail: smartin@martinbonnett.com
jkroll@martinbonnett.com
- and -
Jeremy A. Lieberman, Esq.
Lesley F. Portnoy, Esq.
POMERANTZ GROSSMAN HUFFORD DAHLSTROM & 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 GROSSMAN HUFFORD DAHLSTROM & GROSS LLP
Ten South LaSalle Street, Suite 3505
Chicago, IL 60603
Telephone: (312) 377-1181
E-mail: pdahlstrom@pomlaw.com
- and -
Peretz Bronstein, Esq.
BRONSTEIN GEWIRTZ & GROSSMAN LLP
60 East 42nd Street, Suite 4600
New York, NY 10165
Telephone: (212) 697-6484
Facsimile: (212) 697-7296
E-mail: peretz@bgandg.com
INTELLIQUENT INC: Faces Securities Lawsuit in Illinois Court
------------------------------------------------------------
A federal securities class action lawsuit was filed on August 9,
2013, against the Company in the United States District Court for
the Northern District of Illinois (Costas Stamatiades,
individually and on behalf of All Other Persons Similarly Situated
v. Inteliquent, Inc., f/k/a Neutral Tandem Inc., G. Edward Evans,
Robert Junkroski, and David Zwick, 13-CV-5701), according to the
company's Nov. 1, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended Sept. 30, 2013.
The plaintiff alleges violations of Sections 10(b) and 20(a) of
the Exchange Act and Rule 10b-5 promulgated thereunder relating to
the matters addressed in the Audit Committee's internal
investigation. The Company intends to vigorously defend itself in
this lawsuit. No reasonable estimate of the loss, if any,
associated with this litigation is possible.
LAWRENCE COUNTY, AL: Sued Over High Garbage Collection Fees
-----------------------------------------------------------
Meredith Qualls, writing for Decatur Daily.com, reports that a
Lawrence County resident has filed a lawsuit accusing the County
Commission of overcharging for garbage services.
A class-action lawsuit filed Dec. 9 by Dalton McCreless claims the
county misrepresented the true cost of garbage collection and
unjustly charged high fees.
Lawrence County residents are charged $15 a month for weekly
garbage pickup, which is higher than most surrounding counties.
The county has been providing in-house garbage services since
April and has about 13,000 customers, Solid Waste Director Willie
Allen said.
The plaintiffs are asking the judge to issue an injunction to stop
collections and are demanding a jury trial. If the county is
found guilty, the plaintiffs want the city to refund excess
revenue.
Commission Chairman Prentis Davis admitted the current and former
commissioners used solid waste money for other purposes in the
past.
A local act passed in 2010 allows Lawrence County to use landfill
money for any purpose if it is not needed for solid waste.
Landfill money, however, is different from the service fees the
county collects for garbage pickup. Commissioners said landfill
fees were put in a separate account earlier this year.
"We're trying now to keep it specifically for solid waste," said
Davis, explaining the county took out a $400,000 line of credit
this past summer to avoid spending solid-waste money for general
fund purposes.
"The ultimate goal was to lower the garbage rate or provide more
services," Mr. Davis said.
The county was served with a letter of intent to sue regarding its
service fees in August, but denied the claim. The Lawrence County
Circuit Court filing argues garbage fees exceed reasonable cost
and the county "has collected money for this improper tax from
hundreds of customers in Lawrence County."
A 1989 state Supreme Court case states money collected beyond the
reasonable cost of service amounts to an illegal tax. In a 2011
opinion to Winston County, Attorney General Luther Strange said
using sanitation funds for purposes other than solid waste
conflicts with the stipulated use of those funds.
Mr. McCreless is being represented by Craig Lowell, of Birmingham-
based Wiggins, Childs, Quinn and Pantazis.
The claim also questions if the county commingled solid waste
money with other accounts and misappropriated funds by using
service fees to pay expenses not related to the solid waste
program.
In July, the county transferred $65,000 from solid waste to meet
general fund payroll, but repaid it the same month.
Commissioner Mose Jones said the county is charging the same
amount for garbage pickup as it did when it contracted services
with Waste Management. He said the county spent money to hire
employees and buy trucks and garbage cans to start their in-house
service.
"At the time we were charging $15, Lawrence County did not have
their own garbage pickup," he said. "If we should reduce cost or
not, I think we should look at (it) as if the county is making
profits."
LIFETIME ENTERTAINMENT: Loses Bid to Dismiss Class Action
---------------------------------------------------------
Kira Lerner, writing for Law360, reports that a New York federal
judge on Dec. 17 refused to toss a proposed class action alleging
Lifetime Entertainment Services LLC placed automated telephone
calls advertising its "Project Runway" television program to
thousands of recipients, finding that the television network's
motion was premature.
U.S. District Judge Alvin K. Hellerstein shot down Lifetime's
argument that the suit brought by plaintiff Mark Leyse failed to
prove violations of the Telephone Consumer Protection Act because
the automated telephone calls did not have a commercial purpose
and were not an advertisement. The order and motion to dismiss
were heard during oral arguments Dec. 11.
The court rejected Lifetime's arguments and denied the motion to
dismiss without prejudice, finding that without a factual record,
the motion was premature.
Mr. Leyse alleged in the complaint that Lifetime left a message on
his answering machine in 2009 explaining that the "Project Runway"
reality show competition, which had previously aired on the cable
channel Bravo, was about to begin its sixth season on Lifetime and
that Time Warner Cable had moved Lifetime to a different channel
number.
The lawsuit, filed in August, seeks statutory damages of $500 per
recipient and an increase to $1,500 if the court finds that
Lifetime was willful in its infringement. Lifetime is a
subsidiary of A&E Television Networks LLC.
In its motion to dismiss, Lifetime argued that the voicemail
message left on Mr. Leyse's machine was purely informational in
its intent and the TCPA does not prohibit calls that are not made
for a commercial purpose. Lifetime does not sell its programming
directly to views, so the calls could not have been attempting to
advertise anything.
"Four silent years after the alleged single offending call, it is
difficult to imagine how this case remotely threatens, or even
implicates, privacy rights and public safety interests especially
in light of constitutionally based freedoms accorded to speech,"
Lifetime said in its memorandum.
Additionally, Lifetime argued that the court should dismiss the
suit pending reconsideration by the Federal Communications
Commission of its previous orders as to whether informational
calls about cable television programming are automatically
considered advertising based solely on the medium of initial
transmission.
Sharon L. Schneier -- sharonschneier@dwt.com -- counsel for
Lifetime, said it is A&E's policy not to comment on pending
litigation.
Representatives for plaintiffs could not immediately be reached on
Dec. 18.
Lifetime is represented by Camille Calman -- camillecalman@dwt.com
-- Edward J. Davis -- eddavis@dwt.com -- and Sharon L. Schneier
of Davis Wright Tremaine LLP.
Plaintiffs are represented by Todd C. Bank of the Law Office of
Todd C. Bank.
The case is Leyse v. Lifetime Entertainment Services, LLC, case
number 1:13-cv-05794, in the U.S. District Court for the Southern
District of New York.
LSI CORP: Being Sold to Avago for Too Little, "Tolar" Suit Claims
-----------------------------------------------------------------
Joseph Tolar, Individually and on Behalf of All Others Similarly
Situated v. LSI Corporation, Avago Technologies Limited, Avago
Technologies Wireless (U.S.A.) Manufacturing Inc., Leopold Merger
Sub, Inc., Gergorio Reyes, Abhi Talwalkar, Charles A. Haggerty,
Richard S. Hill, John H.F. Miner, Arun Netravalli, Charles C.
Pope, Michael G. Strachan, Susan M. Whitney, and Does 1-25,
inclusive, Case No. 1-13-CV-257939 (Cal. Super. Ct., Santa Clara
Cty., December 18, 2013) is brought on behalf of holders of LSI
common stock against the Defendants for breaches of fiduciary duty
and other violations arising out of the Defendants' efforts to
complete the sale of the Company to Avago pursuant to an unfair
process and for an unfair price.
In pursuing the unlawful plan to sell LSI to Avago, each of the
Defendants violated applicable law by directly breaching and
aiding the other Defendants' breaches of their fiduciary duties of
loyalty, due care, candor, independence, good faith and fair
dealing, the Plaintiff contends.
LSI is a Delaware corporation headquartered in San Jose,
California. LSI designs semiconductors and software that
accelerate storage and networking in datacenters, mobile networks
and client computing. The Individual Defendants are directors and
officers of the Company.
Avago is a Singaporean limited company. Avago Technologies
Wireless (U.S.A.) Manufacturing Inc. is a Delaware corporation and
an indirect wholly owned subsidiary of Avago. Leopold Merger Sub,
Inc., is a Delaware corporation and a direct wholly owned
subsidiary of Avago USA. The true names and capacities of the Doe
Defendants are currently unknown to the Plaintiff.
The Plaintiff is represented by:
Randall J. Baron, Esq.
A. Rick Atwood, Jr., Esq.
David T. Wissbroecker, Esq.
Edward M. Gergosian, Esq.
ROBBINS GELLER RUDMAN & DOWD LLP
655 West Broadway, Suite 1900
San Diego, CA 92101
Telephone: (619) 231-1058
Facsimile: (619) 231-7423
E-mail: randyb@rgrdlaw.com
ricka@rgrdlaw.com
DWissbroecker@rgrdlaw.com
EGergosian@rgrdlaw.com
- and -
Richard A. Maniskas, Esq.
RYAN & MANISKAS, LLP
995 Old Eagle School Road, Suite 311
Wayne, PA 19087
Telephone: (484) 588-5516
Facsimile: (484) 450-2582
E-mail: rmaniskas@rmclasslaw.com
LSI CORP: Faces "Waber" Suit Over Proposed Acquisition by Avago
---------------------------------------------------------------
Michael Waber, Individually and on Behalf of All Others Similarly
Situated v. LSI Corporation, Avago Technologies Limited, Avago
Technologies Wireless (U.S.A.) Manufacturing Inc., Leopold Merger
Sub, Inc., Gergorio Reyes, Abhi Talwalkar, Charles A. Haggerty,
Richard S. Hill, John H.F. Miner, Arun Netravalli, Charles C.
Pope, Michael G. Strachan, Susan M. Whitney, and Does 1-25,
inclusive, Case No. 1-13-CV-257859 (Cal. Super. Ct., Santa Clara
Cty., December 17, 2013) is a stockholder class action lawsuit
brought on behalf of holders of LSI common stock against the
Defendants for breaches of fiduciary duty and other violations
arising out of the Defendants' efforts to complete the sale of the
Company to Avago pursuant to an unfair process and for an unfair
price.
LSI is a Delaware corporation headquartered in San Jose,
California. LSI designs semiconductors and software that
accelerate storage and networking in datacenters, mobile networks
and client computing. The Individual Defendants are directors and
officers of the Company.
Avago is a Singaporean limited company. Avago Technologies
Wireless (U.S.A.) Manufacturing Inc. is a Delaware corporation and
an indirect wholly owned subsidiary of Avago. Leopold Merger Sub,
Inc., is a Delaware corporation and a direct wholly owned
subsidiary of Avago USA. The true names and capacities of the Doe
Defendants are currently unknown to the Plaintiff.
The Plaintiff is represented by:
Randall J. Baron, Esq.
A. Rick Atwood, Jr., Esq.
David T. Wissbroecker, Esq.
Edward M. Gergosian, Esq.
ROBBINS GELLER RUDMAN & DOWD LLP
655 West Broadway, Suite 1900
San Diego, CA 92101
Telephone: (619) 231-1058
Facsimile: (619) 231-7423
E-mail: randyb@rgrdlaw.com
ricka@rgrdlaw.com
DWissbroecker@rgrdlaw.com
EGergosian@rgrdlaw.com
- and -
Marc S. Henzel, Esq.
LAW OFFICES OF MARC S. HENZEL
431 Montgomery Ave., Suite B
Merion Station, PA 19066
Telephone: (610) 660-8000
Facsimile: (610) 660-8080
E-Mail: mhenzel@henzellaw.com
LSI CORP: "Tansey" Class Seeks to Enjoin Sale at Unfair Price
-------------------------------------------------------------
Edward Tansey, Individually on Behalf of Himself and All Others
Similarly Situated v. LSI Corporation, Abhijit Y. Talwalkar,
Gergorio Reyes, Charles A. Haggerty, John H.F. Miner, Richard S.
Hill, Arun Netravalli, Susan M. Whitney, Michael G. Strachan,
Charles C. Pope, Avago Technologies Limited, Avago Technologies
Wireless (U.S.A.) Manufacturing Inc., Leopold Merger Sub, Inc.,
and Does 1 Though 25, Inclusive, Case No. 1-13-CV-257860 (Cal.
Super. Ct., Santa Clara Cty., December 17, 2013) is a shareholder
class action lawsuit brought on behalf of holders of LSI common
stock.
The lawsuit seeks to enjoin the Defendants from further breaching
their fiduciary duties in their pursuit of a sale of the Company
at unfair price through an unfair and self-serving process to
Avago, Mr. Tansey argues.
LSI is a Delaware corporation headquartered in San Jose,
California. LSI designs, develops and markets complex, high-
performance storage and networking semiconductors. The Individual
Defendants are directors and officers of the Company.
Avago is a Singaporean limited company headquartered in Yishun
Avenue, Singapore. Avago is a leading designer, developer and
global supplier of a broad range of analog semiconductor devices
with a focus on III-V based products. Avago Technologies Wireless
(U.S.A.) Manufacturing Inc. is a Delaware corporation and an
indirect wholly owned subsidiary of Avago. Leopold Merger Sub,
Inc., is a Delaware corporation and a direct wholly owned
subsidiary of Avago USA. The true names and capacities of the Doe
Defendants are currently unknown to the Plaintiff.
The Plaintiff is represented by:
Brian J. Robbins, Esq.
Stephen J. Oddo, Esq.
Edward B. Gerard, Esq.
Justin D. Rieger, Esq.
ROBBINS ARROYO LLP
600 B Street, Suite 1900
San Diego, CA 92101
Telephone: (619) 525-3990
Facsimile: (619) 525-3991
E-mail: brobbins@robbinsarroyo.com
soddo@robbinsarroyo.com
edwardgerard@gmail.com
jrieger@robbinsarroyo.com
MELLANOX TECHNOLOGIES: Still Faces Securities Suit in New York
--------------------------------------------------------------
Mellanox Technologies, Ltd. continues to face In re Mellanox
Technologies, Ltd. Securities Litigation, Case No. 13-cv-00925
(AKH) filed in the U.S. District Court for the Southern District
of New York, according to the company's Nov. 1, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended Sept. 30, 2013.
On February 7, February 14 and February 22, 2013, Mellanox
Technologies, the Company's President and CEO, former CFO and CFO
were sued in three separate legal complaints filed in the United
States District Court for the Southern District of New York naming
the Company and them each as defendants and respectively entitled,
Patrick Barnicle, on behalf of himself and others similarly
situated v. Mellanox Technologies, Ltd., Eyal Waldman, Michael
Gray and Jacob Shulman, Case No. 13 CIV 925, David R. Ryan, Jr.,
on behalf of himself and others similarly situated v. Mellanox
Technologies, Ltd., Eyal Waldman, Michael Gray and Jacob Shulman,
Case No. 13 CV 1047 and Valentin Petrov, on behalf of himself and
others similarly situated v. Mellanox Technologies, Ltd., Eyal
Waldman, Michael Gray and Jacob Shulman, Case No. 13 CV 1225. The
complaints were filed by Patrick Barnacle, David R. Ryan and
Valentin Petrov, respectively, each for himself as a plaintiff
and, purportedly, on behalf of persons purchasing the Company's
ordinary shares between April 19, 2012 and January 2, 2013 (the
"Class Period").
On May 14, 2013, the Court consolidated the Barnicle, Ryan and
Petrov complaints and appointed lead plaintiffs and lead counsel.
The consolidated case is captioned, In re Mellanox Technologies,
Ltd. Securities Litigation, Case No. 13-cv-00925 (AKH). On July
12, 2013, an Amended Consolidated Complaint was filed against the
same defendants. The Amended Consolidated Complaint alleges
violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.
The Amended Consolidated Complaint alleges that, during the Class
Period, the defendants made false or misleading statements (or
failed to disclose certain facts) regarding the Company's business
and outlook.
In the amended complaint, plaintiffs seek unspecified damages, an
award of reasonable costs and expenses, including reasonable
attorney's fees, and any other relief deemed just and proper by
the court. Based on currently available information, the Company
believes the resolution of this proceeding is not likely to have a
material adverse effect on the Company's business, financial
position, results of operations or cash flows.
MELLANOX TECHNOLGIES: Israeli Court Stays "Weinberger" Lawsuit
--------------------------------------------------------------
The Economic Division of the District Court of Tel Aviv-Jaffa
approved a procedural agreement to stay a case filed by Mr.
Avigdor Weinberger against Mellanox Technologies, Ltd. pending the
completion of three other lawsuits, according to the company's
Nov. 1, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended Sept. 30, 2013.
On February 20, 2013, a request for approval of a class action was
filed in the Economic Division of the District Court of Tel Aviv-
Jaffa against Mellanox Technologies, Ltd., the Company's President
and CEO, former CFO, CFO and each of the members of the Company's
board of directors (the "Israeli Claim"). The Israeli Claim was
filed by Mr. Avigdor Weinberger (the "Claimant"). The Israeli
Claim alleges that the Company, the board members, the Company's
President and CEO, its former CFO and its current CFO are
responsible for making misleading statements (or failing to
disclose certain facts) and filings to the public, as a result of
which the shares of the Company were allegedly traded at a higher
price than their true value during a period commencing on April
19, 2012 and ending January 2, 2013 and, therefore, these parties
are responsible for damages caused to the purchasers of the
Company's shares on the Tel Aviv Stock Exchange during this time.
The Claimant seeks an award of compensation to the relevant
shareholders for all damages caused to them, including attorney
fees and Claimant's fee and any other relief deemed just and
proper by the court. On April 24, 2013, the Claimant and the
Company filed a procedural agreement with the court to stay the
Israeli Claim pending the completion of the Barnicle, Ryan and
Petrov cases. On April 24, 2013, the Israeli court approved this
procedural agreement and stayed the Israeli proceedings.
Based on currently available information, the Company believes
that the resolution of this proceeding is not likely to have a
material adverse effect on the Company's business, financial
position, results of operations or cash flows.
MELLANOX TECHNOLOGIES: Faces Israeli Claim Over TASE Delisting
--------------------------------------------------------------
Mellanox Technologies, Ltd. was served with the complaint
Mordechay Turgeman v. Mellanox et. al. (Case No.: 13189-06-13),
according to the company's Nov. 1, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
Sept. 30, 2013.
On September 6, 2013, a request to certify a class action claim
(along with the claim itself) was filed against the Company and
its board of directors relating to the delisting of the Company's
shares from the Tel Aviv Stock Exchange (the "TASE"). The name of
the claim is Mordechay Turgeman v. Mellanox et. al. (Case No.:
13189-06-13) (the "Claim"). The Claim states that the decision to
delist from the TASE was a breach of the duty of care of the
directors, as well as a breach of fiduciary duty and duty of care
by the Company's President and CEO. The Company was served with
the complaint on September 16, 2013. Based on currently available
information, the Company believes that the resolution of this
claim is not likely to have a material adverse effect on the
Company's business, financial position, results of operations or
cash flows.
OSI SYSTEMS: Glancy Binkow & Goldberg Files Class Action in Calif.
------------------------------------------------------------------
Glancy Binkow & Goldberg LLP, representing investors of OSI
Systems, Inc., on Dec. 18 disclosed that it has filed a class
action lawsuit in the United States District Court for the Central
District of California on behalf of a class comprising all
purchasers of OSI securities between January 24, 2012 and December
6, 2013, inclusive.
A COPY OF THE COMPLAINT IS AVAILABLE FROM THE COURT OR FROM GLANCY
BINKOW & GOLDBERG LLP. PLEASE CONTACT US TOLL-FREE AT (888) 773-
9224, OR AT (212) 682-5340, OR BY EMAIL TO
SHAREHOLDERS@GLANCYLAW.COM TO DISCUSS THIS MATTER. IF YOU INQUIRE
BY EMAIL PLEASE INCLUDE YOUR MAILING ADDRESS, TELEPHONE NUMBER AND
NUMBER OF SHARES PURCHASED.
OSI designs and manufactures electronic systems and components for
homeland security, healthcare, defense and aerospace markets. One
of the Company's largest customers is the United States Department
of Homeland Security and the Transportation Security
Administration (TSA). The Complaint alleges that the defendants
made false and/or misleading statements and failed to disclose
material adverse facts about the Company's business, operations
and compliance policies. Specifically, defendants misrepresented
or failed to disclose that:
-- The Company manipulated an operational test of its Advanced
Imaging Technology, causing the test not to be representative of
the scanners already deployed at airports.
-- The Company's products raised strong privacy concerns and
were subject to disqualification for use in airport security
checkpoints.
-- The Company manufactured its products with parts that
directly violated contracts with the TSA, thereby risking
cancellation of the contracts.
If you are a member of the Class described above you may move the
Court no later than February 10, 2014, to serve as lead plaintiff;
however, you must meet certain legal requirements. If you wish to
learn more about this action, or have any questions concerning
this announcement or your rights or interests with respect to
these matters, please contact Michael Goldberg, Esquire, of Glancy
Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los
Angeles, California 90067, Toll Free at (888) 773-9224, or contact
Gregory Linkh, Esquire, of Glancy Binkow & Goldberg LLP at 122 E.
42nd Street, Suite 2920, New York, New York 10168, at (212) 682-
5340, by e-mail to shareholders@glancylaw.com or visit our
website at http://www.glancylaw.com
If you inquire by email please include your mailing address,
telephone number and number of shares purchased.
RIVERBED TECHNOLOGY: Class of Former Zeus Shareholders Approved
---------------------------------------------------------------
The Superior Court of the State of California has approved a class
treatment of the former shareholders of Zeus Technology, Ltd.,
according to Riverbed Technology, Inc.'s Nov. 1, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended Sept. 30, 2013.
In October 2012, the company served the representative of the Zeus
shareholders, as lead defendant and proposed defendant class
representative for all other similarly situated former
shareholders of Zeus, with a lawsuit, filed in the Superior Court
of the State of California, for declaratory relief.
The lawsuit seeks declaratory judgment that, among other things,
(a) Riverbed is not in breach of the share purchase agreement, and
(b) Riverbed does not owe any acquisition-related contingent
consideration under the share purchase agreement because the
necessary conditions precedent to the payment of acquisition-
related contingent consideration did not occur.
In November 2012, the representative of the Zeus shareholders
filed a cross-complaint against Riverbed and Riverbed Technology
Limited in the Superior Court of the State of California. The
cross-complaint claims breach of contract and breach of the
covenant of good faith and fair dealing, and seeks declaratory
judgment that Riverbed has breached the share purchase agreement
and that the entire $27.0 million in contingent consideration is
payable to Zeus shareholders. Discovery is ongoing, and the Court
has approved a class treatment of the former shareholders, though
several have declined to participate. The company believes that
the contention of the representative of the Zeus shareholders, and
the Court-appointed class representatives for shareholders, is
without merit and intend to vigorously defend the company's
determination.
In November 2012, the company received a grand jury subpoena
issued by the United States District Court for the Eastern
District of Virginia. The subpoena requests documents related to
certain federal government contracting matters, including a $19
million transaction involving the sale of the company's products
and services by a Riverbed reseller to an agency of the federal
government in 2009. The company is cooperating fully with this
inquiry.
TEVA PHARMACEUTICAL: Faces Securities Class Action in New York
--------------------------------------------------------------
Kat Greene, writing for Law360, reports that Teva Pharmaceutical
Industries Inc. was slapped with a putative class action in
New York federal court on Dec. 18 when a shareholder alleged the
company intentionally misled the media and investors about a
dispute between the CEO and the board of directors.
Jill Edison alleged the unexpected resignation of CEO
Jeremy Levin -- just days after the company denied he would resign
-- caused the company to lose $2.8 billion in market
capitalization, according to the suit.
"Plaintiff and the class purchased Teva securities at artificially
inflated prices and were damaged thereby," Mr. Edison wrote in the
Dec. 18 complaint. "The price of Teva's securities significantly
declined when the misrepresentations were made to the market . . .
were revealed."
Mr. Levin took over for Shlomo Yanai as CEO of the world's leading
generic drugmaker in May 2012, and by December of that year, the
company announced a cost-cutting program that, Teva said would
save the company at least $1.5 billion by 2018, according to the
suit.
But in early October 2013, the company said it would accelerate
that program by laying of thousands of workers, 800 of whom were
at the company's Israel headquarters, according to the suit.
Israeli officials were displeased at the news, calling the move
"cannibalism," because the company had accepted so many tax breaks
and benefits from the country, according to the suit.
Then, on Oct. 28, an Israeli TV station reported that Mr. Levin
was considering resigning because of disagreements with the board,
and because the board was allegedly intervening in the day-to-day
business of the company, according to the suit.
Later that day, Mr. Levin "categorically denied" that he was
resigning, according to the suit. The company released a
statement that detailed the symbiotic relationship between Levin
and the board, saying it was "customary."
But on Oct. 30, the company announced that Mr. Levin would step
down, citing the inability of the CEO and the board to reconcile.
After the news came out, the company's stock price dropped 8
percent, erasing $2.8 billion in total value of all the shares in
the market, according to the suit.
"We believe this case lacks merit and intend to vigorously defend
the class action," a Teva spokeswoman told Law360 on Dec. 18.
Mr. Edison's suit is on behalf of investors who held stock in Teva
from Jan. 1, 2012, to Oct. 29, 2013, the time span between when
Yanai announced he would step down until the day before Levin
resigned, according to the complaint.
Mr. Edison is represented by Seth E. Rigrodsky -- sdr@rl-legal.com
-- and Timothy J. MacFall -- tjm@rl-legal.com -- of Rigrodsky &
Long PA and J. Elazar Fruchter -- jfruchter@wohlfruchter.com --
and Ethan D. Wohl -- ewohl@wohlfruchter.com -- of Wohl & Fruchter
LLP.
Counsel information for Teva could not be immediately determined.
The case is Jill Edison et al. v. Teva Pharmaceutical Industries
Ltd. et al., case number 13-cv-08963, in the U.S. District Court
for the Southern District of New York.
TREX COMPANY: Court Okays Decking Product Class Action Settlement
-----------------------------------------------------------------
Sarah Halzack, writing for The Washington Post, reports that
Winchester-based manufacturer Trex said on Dec. 18 that a court
has approved a settlement in a nationwide class-action lawsuit
that alleged that some of the company's composite decking products
were defective.
According to the terms of the settlement, Trex is to provide
qualified claimants with a cash payment or the chance to receive
other relief, such as a rebate certificate for its more recent
product lines.
"We are pleased to have a final resolution of this matter, with
terms we feel are fair to both Trex and our consumers," chief
executive Ronald W. Kaplan said in a statement.
The suit alleged that certain Trex decking products were prone to
mold growth or experienced color fading or color variation. To
qualify for the relief, claimants must have purchased first-
generation Trex composite products between August 1, 2004 and
August 27, 2013 and must have experienced mold or color problems
with the decking.
The settlement could cost Trex up to $8.3 million, plus $1.5
million in attorney fees for the plaintiffs.
In a filing with the Securities and Exchange Commission, Trex said
it "denied any liability in the settlement and agreed to the
settlement in order to avoid additional expensive, time consuming
litigation."
TURQUOISE HILL: Pomerantz Law Firm Files Class Action in New York
-----------------------------------------------------------------
Pomerantz Grossman Hufford Dahlstrom & Gross LLP on Dec. 18
disclosed that it has filed a class action lawsuit against
Turquoise Hill Resources, Ltd. and certain of its officers. The
class action, filed in United States District Court, Southern
District of New York, and docketed under 13-cv-8992, is on behalf
of a class consisting of all persons or entities who purchased or
otherwise acquired Turquoise Hill securities between May 14, 2010
and November 8, 2013 both dates inclusive. This class action
seeks to recover damages against the Company and certain of its
officers and directors as a result of alleged violations of the
federal securities laws pursuant to Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
If you are a shareholder who purchased Turquoise Hill securities
during the Class Period, you have until February 11, 2014 to ask
the Court to appoint you as Lead Plaintiff for the class. A copy
of the Complaint can be obtained at http://www.pomerantzlaw.com
To discuss this action, contact Robert S. Willoughby at
rswilloughby@pomlaw.com or 888-476-6529 (or 888-4-POMLAW), toll
free, x237. Those who inquire by e-mail are encouraged to include
their mailing address, telephone number, and number of shares
purchased.
Turquoise Hill is an international mineral exploration and
development company. The Company's principal mineral resource
property is the Oyu Tolgoi Project located in Mongolia.
The Complaint alleges that throughout the Class Period, Defendants
made materially false and misleading statements regarding the
Company's business and operations. Specifically, during the Class
Period, Defendants overstated its revenues for the fiscal years
2010, 2011, 2012 and certain quarters of 2013; the Company
prematurely reported revenues; and the Company lacked internal
accounting controls.
On November 8, 2013, Turquoise Hill issued a press release
disclosing that the Company would be restating its consolidated
financial results for the years ending December 31, 2010, 2011,
2012 and the affected quarters, including 2013, due to errors
related to the timing of revenue recognition from sales to certain
distributors as a result of its SouthGobi subsidiary's decision to
change the way it recognizes revenue. The Company further
disclosed that some sales were booked after delivery to the
customers' stockpiles at the Ovoot Tolgoi mine instead of upon
customer collection. In addition, the Company stated that the
financial statements should no longer be relied upon. On this
news, the Company's stock price dropped from $4.87 per share on
November 7, 2013 to close at $4.09 per share by November 14, 2013.
With offices in New York, Chicago, Florida, and San Diego,
The Pomerantz Firm -- http://www.pomerantzlaw.com-- concentrates
its practice in the areas of corporate, securities, and antitrust
class litigation.
VIOLIN MEMORY: Kaplan Fox Files Class Action in California
----------------------------------------------------------
Kaplan Fox & Kilsheimer LLP on Dec. 18 disclosed that it has filed
a class action suit in the United States District Court for the
Northern District of California against Santa Clara, California-
based Violin Memory, Inc.
The complaint is brought on behalf of persons and/or entities who
purchased or otherwise acquired the common stock of Violin Memory
pursuant and/or traceable to the Company's registration statement
filed with the U.S. Securities and Exchange Commission on Form S-
1/A on September 16, 2013, and prospectus filed with the SEC on
Form 424(b)(4) on September 27, 2013, in the Company's initial
public offering of 18 million shares of common stock at a price of
$9.00 per share.
Defendants named in the action include the Company, its former
President and Chief Executive Officer, Don Basile, Violin Memory's
directors who signed the Registration Statement, as well as the
underwriters of Violin Memory's IPO, including J.P. Morgan
Securities LLC, Deutsche Bank Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Robert
W. Baird & Co., and Pacific Crest Securities LLC.
The complaint alleges that the defendants violated Sections 11,
12(a)(2) and 15 of the Securities Act of 1933 because the
Registration Statement contained untrue statements of material
facts or omitted to state material facts necessary to make the
statements made not misleading, and was not prepared in accordance
with the applicable SEC rules and regulations governing its
preparation.
In particular, the complaint alleges that the Registration
Statement failed to disclose that at the time of the IPO, Violin
Memory was experiencing material difficulties building and
developing PCIe Flash Memory Cards that were compliant with
Toshiba's specifications, and the Company was experiencing
material difficulties optimizing its PCIe Flash Memory Cards for
its customers; and further, that at the time of the IPO, the
Company's sales and revenues had already been negatively affected
by the reprioritization of federal agencies' budgets ahead of the
federal government shutdown, which caused the Company to lose
material federal projects, or caused revenue from such projects to
be indefinitely deferred.
If you are a member of the proposed Class, you may move the court
no later than January 27, 2014 to serve as a lead plaintiff for
the Class. You need not seek to become a lead plaintiff in order
to share in any possible recovery.
Plaintiff seeks to recover damages on behalf of the Class and is
represented by Kaplan Fox & Kilsheimer LLP. Our firm, with
offices in New York, San Francisco, Los Angeles, Chicago and New
Jersey, has many years of experience in prosecuting investor class
actions and actions involving violations of the Federal securities
laws.
For more information about Kaplan Fox, or to review a copy of the
complaint filed in this action, you may visit our website at
http://www.kaplanfox.com
If you have any questions about this Notice, the action, your
rights, or your interests, please e-mail attorneys
Jeff Campisi -- jcampisi@kaplanfox.com -- or Larry King --
lking@kaplanfox.com -- or contact them by phone or regular mail:
Jeffrey P. Campisi, Esq.
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
Toll-Free Telephone: (800) 290-1952
Telephone: (212) 687-1980
Fax: (212) 687-7714
E-mail: jcampisi@kaplanfox.com
Laurence D. King, Esq.
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California 94104
Telephone: (415) 772-4700
Fax: 415-772-4707
E-mail: lking@kaplanfox.com
Web site: http://www.kaplanfox.com
WATTS GUERRA: Accused by BP of Brazen Fraud and Phantom Clients
---------------------------------------------------------------
In a scorching federal lawsuit, BP accused a well-known attorney
of "brazen fraud" involving "phantom clients," that could cost the
oil company more than $2 billion in unfair oil-spill payments,
according to Sabrina Canfield, writing for Courthouse News
Service.
BP sued lead defendants Mikal C. Watts his San Antonio law firm,
Watts Guerra, 15 of their clients, "and all others similarly
situated."
BP claims in the 35-page lawsuit that Watts gained a seat on the
coveted oil spill plaintiff steering committee by claiming to
represent tens of thousands of oil spill claimants and helping to
create an oil spill compensation fund large enough to accommodate
the fake clients, resulting in "windfall" payments from the fund.
Watts resigned his position on the committee at the court's
insistence in March.
BP claims that Watts engaged in "brazen fraud" by purporting to
represent more than 40,000 deckhands who allegedly suffered
economic injuries as a result of the April 2010 Deepwater Horizon
oil spill.
It claims Watts' alleged misrepresentations could cost it $2.3
billion because of the way the terms of its oil spill settlement
were crafted.
All told, Watts wound up with more than 44,000 purported clients,
though just eight so far have had payable claims, and another 17
claims are pending, BP says in the lawsuit.
"We now know that over half of Watts' alleged clients were
phantoms: individuals never represented by Watts, in a number of
cases not even commercial fishermen, and in some instances
individuals who are deceased," BP says in its lawsuit.
The plaintiff steering committee is an exclusive group of
attorneys selected by U.S. District Judge Carl Barbier, who is
overseeing the oil spill litigation. Steering committees are
known to be lucrative for attorneys involved, and the oil spill
litigation is no exception. As part of its global settlement, BP
earmarked an historic $600 million for attorneys.
As a member of the plaintiff steering committee Watts, was in a
position to help construct the compensation settlement between BP
and hundreds of thousands of claimants.
According to the terms of the settlement, if Watts' clients opt
out, BP says, it could save up to $2.3 billion.
If Watts' clients do not opt out of the settlement, the agreement
was based on "rounds" of payment. A select number of seafood
workers would be paid in the first round, then another select
group, and if money remains, it will be divided among remaining
claimants.
If the number of legitimate claimants is unexpectedly small, the
structure provided not a premium, "but a windfall to the claimants
who received compensation in the first round," BP says in the
complaint.
It claims that Watts' claims to have more than 40,000 clients
inflated the value of the seafood compensation program.
"But when fewer than 1,000 persons from that group filed claims,
and the other 42,000 Watts 'clients' did not opt out, Watts'
phantom clients created an unjustifiable, fraud-based windfall for
the first-round claimants," BP says in the complaint.
"In short, more than 98 percent of the Watts claimants never filed
a claim with the Seafood Compensation Program," and 96 percent of
the claims Watts did file have been denied, BP says in the
lawsuit.
Claims filed with the BP Compensation Fund require Social Security
numbers for all claimants. When the fund sought to verify Social
Security numbers from Watts' claimants, it was able to identify
just 42 percent of the numbers, BP claims.
And of names that matched with Social Security numbers, more than
95 percent never filed a claim with the program, BP claims.
"The inference of fraud is overwhelming," it says.
BP has filed a motion with the court seeking to halt payments from
the fund pending investigation.
The New York Times reported in 2011 that Vietnamese workers on the
Gulf Coast finally decided to file claims with the compensation
fund, only to be told they could not file on behalf of themselves
because they were already being represented by an attorney.
According to the Times article: "numerous Vietnamese households --
including some who say they were not even affected by the spill --
received letters signed by Mr. Watts, of San Antonio. The
letters, in Vietnamese, addressed some recipients by name and
others as: 'Dear Client.' The letters directed people to send
their financial records and added, 'Do not sign anything from BP
or anyone else except Watts Guerra Craft,' the name of the firm."
In July 2012, Watts hosted a $35,800-a plate event for President
Obama in the basketball court at his home in San Antonio.
Watts' two law offices in San Antonio were raided in February by
Secret Service agents, likely on a mission related to the BP
compensation fund, Department of Justice officials suggested.
After the raids, Watts resigned from the oil spill plaintiff
steering committee but has kept his oil spill clients.
"The facts in this case shout fraud. Tens of thousands of Mikal
Watts' clients have proved to be phantoms," according to a
statement from Geoff Morrell, senior vice president for U.S.
communications at BP.
Watts' attorney, Robert McDuff of Jackson, Miss., where the
federal investigation is based, issued a statement: "In another of
a series of efforts to walk away from the settlement to which it
agreed, BP has now launched an attack on Mikal Watts, an attorney
who has spent his life representing the victims of corporate
wrongdoing."
McDuff added: "Mr. Watts never committed identity theft and did
not defraud BP or anyone else. He made various filings on behalf
of people to preserve their rights to pursue claims. All actions
were taken in good faith that legitimate claims were being filed
for real people who had been hurt by BP's gross negligence. With
respect to those who applied to the settlement, he forwarded the
documentation they provided to the independent special master in
charge of reviewing settlement claims."
Attorneys who worked with Watts on the oil spill steering
committee called BP's lawsuit another of its many attempts to
stall compensation payments.
Attorneys Stephen J. Herman and James P. Roy said in a statement:
"The notion that the number of deckhands was the driving factor
during negotiations in determining the overall amount is absurd,"
and that just $130 million was allocated to deckhands from the
compensation program.
"BP's overreaching attempt to hold the entire seafood program
hostage is part of its continuing effort to rewrite history and
the settlement agreement, and is unfair to the hardworking men and
women of the seafood industry whose livelihoods were destroyed by
BP's reckless conduct," the attorneys said.
McDuff was more terse: "BP is a recidivist corporate felon," he
said in the statement.
Defendants in BP's recent lawsuit, in addition to Watts and his
law firm, are the named plaintiffs in the consolidated class
actions filed by Watts in the wake of the oil spill.
"It is not alleged in this complaint that the class engaged in any
wrongful conduct," BP says in its lawsuit, "only that it unjustly
benefitted from the wrongdoing of Watts."
The Plaintiff is represented by:
Kevin M. Downey, Esq.
F. Lane Heard III, Esq.
Margaret A. Keeley, Esq.
WILLIAMS & CONNOLLY LLP
725 Twelfth Street, N.W.
Washington, D.C. 20005
Telephone: (202) 434-5000
Facsimile: (202) 434-5029
E-mail: kdowney@wc.com
lheard@wc.com
mkeeley@wc.com
- and -
James J. Neath, Esq.
Mark Holstein, Esq.
BP AMERICA INC.
501 Westlake Park Boulevard
Houston, TX 77079
Telephone: (281) 366-2000
Facsimile: (312) 862-2200
- and -
Daniel A. Cantor, Esq.
Andrew T. Karron, Esq.
ARNOLD & PORTER LLP
555 Twelfth Street, NW
Washington, DC 20004
Telephone: (202) 942-5000
Facsimile: (202) 942-5999
E-mail: Daniel.Cantor@aporter.com
Andrew.Karron@aporter.com
- and -
Robert C. "Mike" Brock, Esq.
COVINGTON & BURLING LLP
1201 Pennsylvania Avenue, NW
Washington, DC 20004
Telephone: (202) 662-5985
Facsimile: (202) 662-6291
E-mail: mbrock@cov.com
- and -
Jeffrey Lennard, Esq.
Keith Moskowitz, Esq.
DENTONS US LLP
233 South Wacker Drive, Suite 7800
Chicago, IL 60606
Telephone: (312) 876-8000
Facsimile: (312) 876-7934
E-mail: jeffrey.lennard@dentons.com
keith.moskowitz@dentons.com
- and -
S. Gene Fendler, Esq.
Don Keller Haycraft, Esq.
R. Keith Jarrett, Esq.
LISKOW & LEWIS
One Shell Square
701 Poydras Street, Suite 5000
New Orleans, LA 70139
Telephone: (504) 581-7979
Facsimile: (504) 556-4108
E-mail: sgfendler@liskow.com
dkhaycraft@liskow.com
rkjarrett@liskow.com
- and -
Richard C. Godfrey, P.C., Esq.
J. Andrew Langan, P.C., Esq.
David J. Zott, P.C., Esq.
Jeffrey J. Zeiger, Esq.
Wendy L. Bloom, Esq.
KIRKLAND & ELLIS LLP
300 North LaSalle Street
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
E-mail: richard.godfrey@kirkland.com
andrew.langan@kirkland.com
david.zott@kirkland.com
jeffrey.zeiger@kirkland.com
wendy.bloom@kirkland.com
- and -
Jeffrey Bossert Clark, Esq.
Steven A. Myers, Esq.
KIRKLAND & ELLIS LLP
655 Fifteenth Street, N.W.
Washington, D.C. 20005
Telephone: (202) 879-5000
Facsimile: (202) 879-5200
E-mail: jeffrey.clark@kirkland.com
steven.myers@kirkland.com
The case is BP Exploration & Production, Inc., et al. v. Watts, et
al., Case No. 2:13-cv-06674-CJB-SS, in the U. S. District Court
for the Eastern District of Louisiana (New Orleans).
WELLCARE HEALTH: Settlement in Securities Suit Remains in Place
---------------------------------------------------------------
Wellcare Health Plans, Inc. remains subject to the Stipulation and
Agreement of Settlement it entered in the consolidated securities
class action Eastwood Enterprises, L.L.C. v. Farha, et al., Case
No. 8:07-cv-1940-VMC-EAJ, according to the company's Nov. 1, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended Sept. 30, 2013.
In December 2010, the company entered into a Stipulation and
Agreement of Settlement (the "Stipulation Agreement") with the
lead plaintiffs in the consolidated securities class action
Eastwood Enterprises, L.L.C. v. Farha, et al., Case No. 8:07-cv-
1940-VMC-EAJ. The Stipulation Agreement included two
contingencies to which WellCare remains subject. If, on or before
December 17, 2013, the company is acquired or otherwise experience
a change in control at a share price of $30.00 or more, the
company must pay an additional $25,000 to the class.
The Stipulation Agreement also requires the company to pay to the
class 25% of any sums the company recovers from Todd Farha, Paul
Behrens and/or Thaddeus Bereday related to the same facts and
circumstances that gave rise to the consolidated securities class
action. Messrs. Farha, Behrens and Bereday are three former
executives that were implicated in the government investigations
of the Company that commenced in 2007.
The company has also previously advanced legal fees and related
expenses to some or all of these five individuals regarding
disputes in Delaware Chancery Court related to whether the company
was legally obligated to advance fees or indemnify certain of
these executives; the class actions titled Eastwood Enterprises,
L.L.C. v. Farha, et al. and Hutton v. WellCare Health Plans, Inc.
et al. filed in federal court; six stockholder derivative actions
filed in federal and state courts between October 2007 and January
2008; an investigation by the United States Securities & Exchange
Commission (the "Commission"); and an action by the Commission
filed in January 2012 against Messrs. Farha, Behrens and Bereday.
The Delaware Chancery Court cases have concluded. The company
settled the class actions in May 2011. In 2010, the company
settled the stockholder derivative actions and the company was
realigned as the plaintiff to pursue the company's claims against
Messrs. Farha, Behrens and Bereday. These actions, as well as the
action by the Commission, have been stayed until at least 90 days
after the conclusion of the criminal trial (including post-trial
motions and proceedings).
In connection with these matters, the company advanced, to the
five individuals, cumulative legal fees and related expenses of
approximately $149,002 from the inception of the investigations to
September 30, 2013. The company incurred $5,712 and $7,180 of
these legal fees and related expenses during the three months
ended September 30, 2013 and 2012, respectively, and $39,115 and
$25,930 of these legal fees during the nine months ended September
30, 2013 and 2012, respectively. The company expense these costs
as incurred and classify the costs as selling, general and
administrative expense incurred in connection with the
investigations and related matters.
In August 2010, the company entered into an agreement and release
with the carriers of the company's directors and officers ("D&O")
liability insurance relating to coverage the company sought for
claims relating to the previously disclosed government
investigations and related litigation. The company agreed to
accept payment of $32,500 in satisfaction of the $45,000 face
amount of the relevant D&O insurance policies and the carriers
agreed to waive any rights they may have to challenge the
company's coverage under the policies. As a result, the company
exhausted the company's insurance policies related to
reimbursement of the company's advancement of fees related to
these matters. The company received payment and recorded the
receipt of the insurance proceeds as a reduction to selling,
general and administrative expense prior to 2012.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Copyright 2014. All rights reserved. ISSN 1525-2272.
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