/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/140611.mbx C L A S S A C T I O N R E P O R T E R Wednesday, June 11, 2014, Vol. 16, No. 115 Headlines AMERICAN REALTY: Reaches MoU in "Quaal" Suit Over ARCT III Merger AMERICAN REALTY: CapLease Merger Suits Junked; "Tarver" Remains AMERICAN REALTY: Dismissal Motion in "Poling" Lawsuit Opposed AMERICAN REALTY: MoU Entered in Md. Lawsuit Over Cole Merger APPLE REIT: 2nd Cir. Affirms Dismissal of Securities Suit AURORA LOAN: Resolves Mortgage Modification Class Action BANKRATE INC: Seeks Approval for Epicor Acquisition Suit Accord BLACKSTONE GROUP: Trial in "Dahl" Case to Begin November 2014 BODY CENTRAL: Amended Complaint Filed in "Mogensen" Stock Suit CARLYLE GROUP: Certification Hearing Date in Mass. Securities CARLYLE GROUP: Shareholders Blocked from Amending D.C. Lawsuit CREDIT CONTROL: Accused of Violating Fair Debt Collection Act CRESTWOOD EQUITY: Awaits Approval of Settlement in Merger Lawsuit CRESTWOOD EQUITY: Hearing in Suit v. Arrow Midstream Set for June CROSS COUNTRY: CC Staffing Seeks to Settle Cal. Labor Lawsuit DUNHAM'S SPORTS: Ex-Store Managers File Overtime Class Action DYNEGY INC: N.Y. Court Junks "Silsby" Suit Over DMG Transfer ENDO HEALTH: Faces Class Suit Alleging Antitrust Law Violations ENERGY TRANSFER: Approval Sought for Accord in Merger Suit ENERGY TRANSFER: Regency Still Faces Suits Over Eagle Rock Deal ENSIGN GROUP: Settles Staffing Suits Over Health, Safety Code ENSIGN GROUP: Considers Medicare Coverage Settlement Favorable EQUAL ENERGY: Motion to Consolidate Okla. Securities Suits Filed FIDELITY & GUARANTY: Amended Settlement Filed in Insurance Suit FIRST MARBLEHEAD: Seeks to Dismiss "Smith" Securities Lawsuit FITFLOP USA: Settles Deceptive Ad Class Action for $5.3 Million FORGE GROUP: Bentham IMF Plans to Fund Shareholder Class Action FUSION-IO INC: Still Faces Securities Lawsuits in California GENERAL MOTORS: Plaintiffs' Lawyers Criticize Internal Report GENERAL MOTORS: Two AM 100 Law Firms Issue Recall Probe Report GENERAL MOTORS: No Conspiracy in Ignition-Switch Recall GENERAL MOTORS: To Launch Compensation Program for Crash Victims GENERAL MOTORS: Plaintiffs' Attorneys Argue Over Case Venue GENERAL MOTORS: Meltons File New Suit Over 2005 Cobalt Crash GENERAL MOTORS: 2006 Crash Victim Not on Confirmed Deaths List GLAXOSMITHKLINE PLC: Georgia to Get $2.6MM in Drug Settlement GNC HOLDINGS: Court Approval Sought for Hydroxycut Suit Accord GNC HOLDINGS: Still Faces Suits Over DMAA-Containing Products GNC HOLDINGS: Still Faces Certified Labor Suit in California GNC HOLDINGS: Pa. Suit Related to Overtime Pay in Discovery GREAT-WEST LIFE: Sued in California for Charging Excessive Fees GROWLIFE INC: Served with "Romero" Securities Lawsuit in Calif. HERE TO THERE: Accused of Not Paying Overtime Premiums in Indiana HIGHER ONE: Executives Among Defendants in Class Action IMPERIAL HOLDINGS: Warrants Issued as Part of Fuller Settlement INFOBLOX INC: Fails to Disclose Heavy Discounting, Suit Claims INTERCONTINENTALEXCHANGE GROUP: Still Faces Securities Lawsuits JAZZ PHARMACEUTICALS: Still Faces Suit Over Gentium Acquisition KERYX BIOPHARMACEUTICALS: Securities Suit in New York Now Closed LENDER PROCESSING: 6th Cir. Affirms Dismissal of Foreclosure Suit LIBERTY MEDIA: Cases Now Moot After Bid to Buy Sirius Dropped LONG BEACH, CA: Faces "Ochoa" Suit Alleging Violations of ADA MALLINCKRODT PUBLIC: Faces Suits Over Plan to Acquire Cadence MALLINCKRODT PUBLIC: Faces Suits Over Plan to Purchase Questcor MERCK & CO: Sued in California Over Coppertone Sunscreen Products MICHAEL FOODS: "Tag-along" Cases Over Food Products in Discovery MUNI: Judge Certifies Drivers' Minimum Wage Class Action NELNET INC: Settlement Process Ongoing in Suit v. Peterson's NELNET INC: Settling "Than Zaw" Suit Over Unlawful Phone Calls NELNET INC: No Class Yet in "Keating" Suit Over Spam Text NTS REALTY: Suits by Ky. & Delaware Unitholders Settled, Junked OCLARO INC: No Trial Set for "Westley" Securities Suit in Calif. PADBURY MINING: Investors Mull Class Suit Over Oakajee Agreement PEOPLES HOME: Did Not Properly Pay Overtime to LPNs, Nurse Claims PEOPLES TRUST: Faces Class Action Over Illegal Credit Card Fees PETROLOGISTICS LP: Faces "Basaraba" Merger-Related Suit in Texas PORTFOLIO RECOVERY: Files Motion to Stay Consolidated TCPA Suit PROSPECT CAPITAL: Block & Leviton Files Securities Class Action PRUDENTIAL FINANCIAL: Court Mulls Damage Award in Veterans Suit PRUDENTIAL FINANCE: "Huffman" Suit by Beneficiaries Stayed PRUDENTIAL FINANCIAL: Loses Bid to Dismiss Retirees' Suit in N.J. PRUDENTIAL FINANCIAL: Agents File New Certification Motion QC HOLDINGS: Review on Dismissal of N.C. Payday Loans Suit Mulled QC HOLDINGS: Direct Credit Enters Accord in Suit Over Interest QC HOLDINGS: Briefing in TCPA Violation Suit Expected in Q2 RITE AID: Faces Class Action in Calif. Over Spam Text Messages RYCO CONSTRUCTION: Class Suit Seeks to Recover Unpaid Back Wages SAGAL MEAT: Class Is Entitled to Unpaid Overtime Wages, Suit Says SILVER SPRING: No Class Status in Cal. Suit Over Smart Meters STATE FARM: Seeks Protective Order in $7-Bil. RICO Class Action UNI-PIXEL INC: Still Faces Shareholder Suits in New York, Texas UNIVERSAL MUSIC: Files Summary Judgment Suits in Royalties Action URBAN OUTFITTERS: Court Says Insurance Don't Cover ZIP Code Suit VERTEX PHARMACEUTICALS: Scott+Scott Files Securities Class Action WASHINGTON KENNEL CLUB: Sued for Improperly Claiming Tip-Credit WR GRACE: Bares Updates on Management of Property Damage Claims ZAGG INC: Dismissal of Utah Securities Litigation Under Appeal * Plaintiff's Bar Focuses on Injunctive Relief Class Actions ********* AMERICAN REALTY: Reaches MoU in "Quaal" Suit Over ARCT III Merger ----------------------------------------------------------------- The parties in a suit filed by Randell Quaal over the ARCT III Merger agreed to a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of ARCT III stockholders, according to American Realty Capital Properties, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. After the announcement of the ARCT III Merger Agreement on December 17, 2012, Randell Quaal filed a putative class action lawsuit filed on January 30, 2013 against the Company, ARC Properties Operating Partnership, L.P. (the OP), ARCT III, ARCT III OP, the members of the board of directors of ARCT III and certain subsidiaries of the Company in the Supreme Court of the State of New York. The plaintiff alleges, among other things, that the board of ARCT III breached its fiduciary duties in connection with the transactions contemplated under the ARCT III Merger Agreement. In February 2013, the parties agreed to a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of ARCT III stockholders. In connection with the settlement contemplated by that memorandum of understanding, the class action and all claims asserted therein will be dismissed, subject to court approval. The proposed settlement terms required ARCT III to make certain additional disclosures related to the ARCT III Merger, which were included in a Current Report on Form 8-K filed by ARCT III with the SEC on February 21, 2013. The memorandum of understanding also added that the parties will enter into a stipulation of settlement, which will be subject to customary conditions, including confirmatory discovery and court approval following notice to ARCT III's stockholders. If the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. AMERICAN REALTY: CapLease Merger Suits Junked; "Tarver" Remains --------------------------------------------------------------- Among the cases filed against American Realty Capital Properties, Inc. after an announcement of the CapLease Merger Agreement, the only remaining suit to date is that filed by Dewey Tarver, after a Consolidated Action was dismissed, according to American Realty's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Since the announcement of the CapLease Merger Agreement on May 28, 2013, the following lawsuits have been filed: On May 28, 2013, Jacquelyn Mizani filed a putative class action lawsuit in the Supreme Court for the State of New York against the Company, ARC Properties Operating Partnership, L.P. (the OP), Safari Acquisition LLC, CapLease, CapLease LP, CLF OP General Partner, LLC and the members of the CapLease board of directors (the "Mizani Action"). The complaint alleges, among other things, that the merger agreement at issue was the product of breaches of fiduciary duty by the CapLease directors because the proposed merger transaction (the "CapLease Transaction") purportedly does not provide for full and fair value for the CapLease shareholders, the CapLease Transaction allegedly was not the result of a competitive bidding process, the merger agreement allegedly contains coercive deal protection measures and the merger agreement and the CapLease Transaction purportedly were approved as a result of improper self-dealing by certain defendants who would receive certain alleged employment compensation benefits and continued employment pursuant to the merger agreement. The complaint also alleges that CapLease, the Company, the OP and Safari Acquisition LLC aided and abetted the CapLease directors' alleged breaches of fiduciary duty. On July 3, 2013, Fred Carach filed a putative class action and derivative lawsuit in the Supreme Court for the State of New York against the Company, the OP, Safari Acquisition LLC, CapLease, CapLease LP, CLF OP General Partner, LLC and the members of the CapLease board of directors (the "Carach Action"). The complaint alleges, among other things, that the merger agreement was the product of breaches of fiduciary duty by the CapLease directors because the merger purportedly does not provide for full and fair value for the CapLease shareholders, the CapLease Transaction allegedly was not the result of a competitive bidding process, the merger agreement allegedly contains coercive deal protection measures and the merger agreement and the CapLease Transaction purportedly were approved as a result of improper self-dealing by certain defendants who would receive certain alleged employment compensation benefits and continued employment pursuant to the merger agreement. The complaint also alleges that with respect to the Registration Statement and draft joint proxy statement issued in connection with the proposed CapLease Transaction on July 2, 2013, that disclosures made therein were insufficient or otherwise improper. The complaint also alleges that CapLease, the Company, the OP and Safari Acquisition LLC aided and abetted the CapLease directors' alleged breaches of fiduciary duty. On June 25, 2013, Dewey Tarver filed a putative class action and derivative lawsuit in the Circuit Court for Baltimore City against the Company, the OP, Safari Acquisition LLC, CapLease, CapLease LP, CLF OP General Partner, LLC and the members of the CapLease board of directors (the "Tarver Action"). The complaint alleges, among other things, that the merger agreement was the product of breaches of fiduciary duty by the CapLease directors because the CapLease Transaction purportedly does not provide for full and fair value for the CapLease shareholders, the CapLease Transaction allegedly was not the result of a competitive bidding process, the merger agreement allegedly contains coercive deal protection measures and the merger agreement and the CapLease Transaction purportedly were approved as a result of improper self-dealing by certain defendants who would receive certain alleged employment compensation benefits and continued employment pursuant to the merger agreement. The complaint also alleges that CapLease, CapLease LP, CLF OP General Partner, LLC, the Company, the OP and Safari Acquisition, LLC aided and abetted the CapLease directors' alleged breaches of fiduciary duty. Counsel who filed each of these three cases reached an agreement with each other as to who will serve as lead plaintiff and lead plaintiffs' counsel in the cases and where they will be prosecuted. Thus, on August 9, 2013, counsel in the Tarver Action filed a motion for stay in the Baltimore Court, informing the court that they had agreed to join and participate in the prosecution of the Mizani and Carach Actions in the New York Court. The Defendants consented to the stay of the Tarver Action in the Baltimore Court, and on September 5, 2013, Judge Pamela J. White issued an order granting that stay. Consequently, there has been no subsequent activity in the Baltimore Court in the Tarver Action. Also on August 9, 2013, all counsel involved in the Mizani and Carach Actions filed a joint stipulation in the New York Court, reflecting agreement among all parties that the Mizani and Carach Actions should be consolidated (jointly, "the Consolidated Actions") and setting out a schedule for early motion practice in response to the complaints filed (the "Consolidation Stipulation"). Pursuant to the Consolidation Stipulation, an amended complaint was also filed in the New York court on August 9, 2013 and was designated as the operative complaint in the Consolidated Actions ("Operative Complaint"). Pursuant to the Consolidation Stipulation, all Defendants filed a motion to dismiss all claims asserted in the Operative Complaint on September 23, 2013. Plaintiffs' response was due on or before November 7, 2013. On November 7, 2013, Plaintiffs filed a motion seeking leave to file a second amended complaint, which the Defendants have opposed. On March 24, 2014, Plaintiffs' counsel in the Consolidated Actions dismissed those claims without prejudice. Consequently, only the Tarver Action currently remains pending among these cases, although it remains stayed. AMERICAN REALTY: Dismissal Motion in "Poling" Lawsuit Opposed ------------------------------------------------------------- Plaintiffs' counsel in a suit filed by John Poling in the Circuit Court for Baltimore City against American Realty Capital Properties, Inc. over the CapLease Merger Agreement has opposed a motion to dismiss, according to American Realty's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On October 8, 2013, John Poling filed a putative class action lawsuit in the Circuit Court for Baltimore City against the Company, the OP, Safari Acquisition LLC, CapLease, CapLease LP, CLF OP General Partner, LLC and the members of the CapLease board of directors (the "Poling Action"). The complaint alleges that the merger agreement breaches the terms of the CapLease' 8.375% Series B Cumulative Redeemable Preferred Stock ("Series B") and the terms of the 7.25% Series C Cumulative Redeemable Preferred Stock ("Series C") and is in violation of the Series B Articles Supplementary and the Series C Articles Supplementary. The Complaint alleges claims for breach of contract and breach of fiduciary duty against the CapLease entities and the CapLease board of directors. The complaint also alleges that the Company, the OP and Safari Acquisition, LLC aided and abetted CapLease and the CapLease directors' alleged breach of contract and breach of fiduciary duty. On November 13, 2013, all counsel involved in the Poling Action filed a joint stipulation, reflecting agreement among all parties concerning a schedule for early motion practice in response to the complaint filed (the "Scheduling Stipulation"). Pursuant to the Scheduling Stipulation, all Defendants filed a motion to dismiss all claims asserted in the Operative Complaint on December 20, 2013. Plaintiffs' counsel has opposed that the motion to dismiss, and a hearing on the motion is currently scheduled for May 15, 2014. AMERICAN REALTY: MoU Entered in Md. Lawsuit Over Cole Merger ------------------------------------------------------------ The parties to a Consolidated Action filed in the Circuit Court for Baltimore City, Maryland over the merger of a wholly owned subsidiary of Cole Real Estate Investments, Inc. (Cole) and Cole Holdings Corporation, entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of Cole stockholders, according to American Realty Capital Properties, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Three putative class action and/or derivative lawsuits, which were filed earlier this year, assert claims for breach of fiduciary duty, abuse of control, corporate waste, unjust enrichment, aiding and abetting breach of fiduciary duty and other claims relating to the merger between a wholly owned subsidiary of Cole Real Estate Investments, Inc. (Cole) and Cole Holdings Corporation, pursuant to which Cole became a self-managed REIT. On October 22, 2013, the Circuit Court for Baltimore City granted all defendants' motion to dismiss with prejudice the action pending before the court, but the plaintiffs have appealed that dismissal. The other two lawsuits, which also purport to assert shareholder class action claims under the Securities Act of 1933, as amended (the "Securities Act"), are pending in the United States District Court for the District of Arizona. Defendants filed a motion to dismiss both complaints on January 10, 2014. Subsequently, both of those lawsuits have been stayed by the Court pursuant to a joint request made by all parties pending final approval of the consolidated Baltimore Cole Merger Actions. To date, eleven lawsuits have been filed in connection with the Cole Merger. Two of these suits -- Wunsch v. Cole, et al ("Wunsch"), No. 13-CV-2186, and Sobon v. Cole, et al ("Sobon") -- were filed as putative class actions on October 25, 2013 and November 18, 2013, respectively, in the U.S. District Court for the District of Arizona. Between October 30, 2013 and November 14, 2013, eight other putative stockholder class action or derivative lawsuits were filed in the Circuit Court for Baltimore City, Maryland, captioned as: (i) Operman v. Cole, et al ("Operman"); (ii) Branham v. Cole, et al ("Branham"); (iii) Wilfong v. Cole, et al. ("Wilfong"); (iv) Polage v. Cole, et al. ("Polage"); (v) Corwin v. Cole, et al ("Corwin"); (vi) Green v. Cole, et al ("Green"); (vii) Flynn v. Cole, et al ("Flynn") and (viii) Morgan v. Cole, et al. ("Morgan"). All of these lawsuits name the Company, Cole and Cole's board of directors as defendants; Wunsch, Sobon, Branham, Wilfong, Flynn, Green, Morgan and Polage also name CREInvestments, LLC, a Maryland limited liability company and a wholly-owned subsidiary of the Cole, as a defendant. All of the named plaintiffs claim to be Cole stockholders and purport to represent all holders of Cole's stock. Each complaint generally alleges that the individual defendants breached fiduciary duties owed to plaintiff and the other public stockholders of Cole in connection with the Cole Merger, and that certain entity defendants aided and abetted those breaches. The breach of fiduciary duty claims asserted include claims that the Cole Merger does not provide for full and fair value for the Cole shareholders, that the Cole Merger was the product of an "inadequate sale process," that the Cole Merger Agreement contains coercive deal protection measures and the Cole Merger Agreement and that the Cole Merger were approved as a result of or in a manner which facilitates improper self-dealing by certain defendants. In addition, the Flynn, Corwin, Green, Wilfong, Polage and Branham lawsuits claim that the individual defendants breached their duty of candor to shareholders and the Branham and Polage lawsuits assert claims derivatively against the individual defendants for their alleged breach of fiduciary duties owed to Cole. The Polage lawsuit also asserts derivative claims for waste of corporate assets and unjust enrichment. The Wunsch and Sobon lawsuits also assert claims against Cole and the individual defendants under Section 14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), based on allegations that the proxy materials omitted to disclose allegedly material information, and a claim against the individual defendants under Section 20(a) of the Exchange Act based on the same allegations. Among other remedies, the complaints seek unspecified money damages, costs and attorneys' fees. In January 2014, the parties to the eight lawsuits filed in the Circuit Court for Baltimore City, Maryland ("the consolidated Baltimore Cole Merger Actions") entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of Cole stockholders. In connection with the settlement contemplated by that memorandum of understanding, the class action and all claims asserted therein will be dismissed, subject to court approval. The proposed settlement terms required Cole to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8-K filed by Cole with the SEC on January 14, 2014. The memorandum of understanding also contemplated that the parties will enter into a stipulation of settlement, which will be subject to customary conditions, including confirmatory discovery and court approval following notice to Cole's stockholders. If the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding, therefore any losses that may be incurred to settle this matter are not determinable. The Sobon lawsuit was voluntarily dismissed on February 3, 2014. The Company believes that the Wunsch lawsuit in connection with the Cole Merger is without merit and that it has substantial meritorious defenses to the claims set forth in the complaint. On December 27, 2013, Realistic Partners filed a putative class action lawsuit against the Company and the members of its board of directors in the Supreme Court for the State of New York. Cole was later added as a defendant also. The plaintiff alleges, among other things, that the board of the Company breached its fiduciary duties in connection with the transactions contemplated under the Cole Merger Agreement and that Cole aided and abetted those breaches. In January 2014, the parties entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of the Company's stockholders. In connection with the settlement contemplated by that memorandum of understanding, the class action and all claims asserted therein will be dismissed, subject to court approval. The proposed settlement terms required the Company to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8-K filed by the Company with the SEC on January 17, 2014. The memorandum of understanding also contemplated that the parties will enter into a stipulation of settlement, which will be subject to customary conditions, including confirmatory discovery and court approval following notice to the Company's stockholders. If the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding, therefore any losses that may be incurred to settle this matter are not determinable. APPLE REIT: 2nd Cir. Affirms Dismissal of Securities Suit --------------------------------------------------------- The United States Court of Appeals for the Second Circuit (the "Second Circuit") entered a summary order in the consolidated class action referred to in the Company's prior filings as the In re Apple REITs Litigation matter, on April 23, 2014, according to Apple REIT Ten, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In the summary order, the Second Circuit affirmed the dismissal by the United States District Court for the Eastern District of New York (the "District Court") of the plaintiffs' state and federal securities law claims and the unjust enrichment claim. The Second Circuit also noted that the District Court dismissed the plaintiffs' remaining state common law claims based on its finding that the complaint did not allege any losses suffered by the plaintiff class, and held that, to the extent that the District Court relied on this rationale, its dismissal of the plaintiffs' state law breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, and negligence claims is vacated and remanded for further proceedings consistent with the summary order. The Company will defend against the claims remanded to the District Court vigorously. AURORA LOAN: Resolves Mortgage Modification Class Action -------------------------------------------------------- Philip R. Stein, Esq. -- pstein@bilzin.com -- and Anthony Narula, Esq. -- anarula@bilzin.com -- at Bilzin Sumberg Baena Price & Axelrod LLP, in an article for The National Law Review, report that a former goliath of the non-prime lending market, Aurora Loan Services, LLC, recently resolved a class-action lawsuit alleging that it fraudulently induced distressed California borrowers to enter into purported "workout" agreements to extract unearned payments. ALS was one of many servicing affiliates of big banks that created, and profited off of, various reduced documentation programs, which correspondent lenders originating and funding residential home loans sold to Aurora Bank FSB were required to follow. A subsidiary of Aurora Bank FSB, and affiliate of Lehman Brothers Holdings, Inc., ALS left the mortgage servicing business in the aftermath of the financial crisis of 2007-2008, selling the majority of its remaining servicing rights to Nationstar Mortgage LLC in 2012. The class-action lawsuit against ALS was pending before Judge Saundra Brown Armstrong of the United States District Court for the Northern District of California. The Amended Complaint contains accusations that ALS took advantage of homeowners who fell behind on their mortgage payments, drawing them into deceptive contracts that required borrowers to make monthly payments in exchange for delaying impending foreclosures. The agreements promised an opportunity for borrowers to obtain mortgage modifications, but ALS allegedly failed to follow through. The lawsuit was consolidated with two other cases and survived various dispositive motions brought by ALS. The settlement fund containing $5.3 million is expected to be split among 15,000 mortgagors in California who were allegedly duped into entering illusory agreements with ALS that induced them to continue making payments with the false hope of curing their deficiencies. Borrowers claimed they were under the impression that their foreclosures were on hold while they were considered for a loan modification. In actuality, any such modification allegedly would have violated ALS' policies and procedures. The plaintiffs contend that the workout agreement program was an improper attempt to generate additional funds from non-performing loans, allowing ALS to continue to reap servicing fees. Defeating Demands for Repurchase Following the collapse of the housing market, it has become all too common for correspondent lenders to be inundated with repurchase demands and indemnification requests made by big banks and their servicing affiliates, such as Aurora and ALS. When litigating or settling repurchase demands, loan originators should consider whether residential servicers improperly serviced any defaulted loans. To the extent that residential servicers used deceptive or fraudulent practices, the affirmative defense of unclean hands (among others) may prove to be successful. Likewise, if residential servicers entered into modification agreements with distressed borrowers, loan originators may be able to take the position that a loan modified without the originator's involvement is not the same loan that was sold, and therefore is no longer subject to repurchase claims. BANKRATE INC: Seeks Approval for Epicor Acquisition Suit Accord --------------------------------------------------------------- Court approval is being sought for a settlement reached in a lawsuit over the proposed acquisition of Epicor Software Corporation by funds advised by Apax Partners, according to Bankrate, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In connection with the announcement of the proposed acquisition of Epicor Software Corporation ("Legacy Epicor") by funds advised by Apax in April 2011, four putative stockholder class action suits were filed in the Superior Court of California, Orange County, and two such suits were filed in Delaware Chancery Court. The actions filed in California were entitled Kline v. Epicor Software Corp. et al., (filed Apr. 6, 2011); Tola v. Epicor Software Corp. et al., (filed Apr. 8, 2011); Watt v. Epicor Software Corp. et al., (filed Apr. 11, 2011), and Frazer v. Epicor Software et al., (filed Apr. 15, 2011). The actions filed in Delaware were entitled Field Family Trust Co. v. Epicor Software Corp. et al., (filed Apr. 12, 2011) and Hull v. Klaus et al., (filed Apr. 22, 2011). Amended complaints were filed in the Tola and Field Family Trust actions on April 13, 2011 and April 14, 2011, respectively. Plaintiff Kline dismissed his lawsuit on April 18, 2011 and shortly thereafter filed an action in federal district court. Kline then dismissed his federal lawsuit on July 22, 2011. The state court suits alleged that the Legacy Epicor directors breached their fiduciary duties of loyalty and due care, among others, by seeking to complete the sale of Legacy Epicor to funds advised by Apax through an allegedly unfair process and for an unfair price and by omitting material information from the Solicitation/Recommendation Statement on Schedule 14D-9 that Legacy Epicor filed on April 11, 2011 with the SEC. The complaints also alleged that Legacy Epicor, Apax Partners, L.P. and Element Merger Sub, Inc. aided and abetted the directors in the alleged breach of fiduciary duties. The plaintiffs sought certification as a class and relief that included, among other things, an order enjoining the tender offer and merger, rescission of the merger, and payment of plaintiff's attorneys' fees and costs. On April 25, 2011, plaintiff Hull filed a motion in Delaware Chancery Court for a preliminary injunction seeking to enjoin the parties from taking any action to consummate the transaction. On April 28, 2011, plaintiff Hull withdrew this motion. On December 30, 2011, Hull dismissed his Delaware suit. On May 2, 2011, after engaging in discovery, plaintiffs advised that they did not intend to seek injunctive relief in connection with the merger, but would instead file an amended complaint seeking damages in California Superior Court following the consummation of the tender offer. On May 11, 2011, the Superior Court for the County of Orange entered an Order consolidating the Tola, Watt, and Frazer cases pursuant to a joint stipulation of the parties. Plaintiffs filed a Second Amended Complaint on September 1, 2011, which made essentially the same claims as the original complaints. Plaintiffs Kline and Field Family Trust have both joined in the amended complaint. The company filed a demurrer (motion to dismiss) to this amended complaint on September 29, 2011. The demurrers were heard on December 12, 2011, and the Court overruled them. The Defendants answered the Complaint on December 22, 2011. On June 22, 2012, the court granted plaintiff's motion for class certification and dismissed Mr. Hackworth as a defendant. After the parties had completed fact discovery and begun expert discovery, plaintiffs sought leave to amend their complaint to add two new defendants, the Company's former chief financial officer and the Company's former financial advisor, Moelis & Company. On February 22, 2013, the Court granted plaintiffs leave, and plaintiffs' Third Amended Complaint was filed. On April 5, 2013, pursuant to a stipulation between the parties, the Court dismissed Legacy Epicor from this action with prejudice. On April 29, 2013, the Court overruled demurrers by the new defendants to the Third Amended Complaint. Although the company believes this lawsuit is without merit and are prepared to vigorously defend against the claims, the parties engaged in a mediation on October 21, 2013. Following the mediation, the parties reached an agreement in principle to settle the action, subject to the approval of the Court. If approved by the Court, a settlement fund of $18 million will be created by the various defendants. The Court set a preliminary approval hearing for May 23, 2014. As of March 31, 2014, the company has recorded a $7.8 million liability which is included in the company's unaudited consolidated balance sheet within accrued expenses and other current liabilities, which represents the company's portion of the settlement. BLACKSTONE GROUP: Trial in "Dahl" Case to Begin November 2014 ------------------------------------------------------------- A hearing on plaintiffs' class certification motion in Kirk Dahl, et al. v. Bain Capital Partners, LLC, et al. will take place after May 19, 2014; the Court has directed that new summary judgment motions be filed by August 1, 2014; and any trial of the action is scheduled to begin in early November 2014, according to The Blackstone Group L.P.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In December 2007, a purported class of shareholders in public companies acquired by one or more private equity firms filed a lawsuit against a number of private equity firms and investment banks, including The Blackstone Group L.P., in the United States District Court in Massachusetts (Kirk Dahl, et al. v. Bain Capital Partners, LLC, et al.). The suit alleges that, from mid-2003 through 2007, eleven defendants violated the antitrust laws by allegedly conspiring to rig bids, restrict the supply of private equity financing, fix the prices for target companies at artificially low levels, and divide up an alleged market for private equity services for leveraged buyouts. After the conclusion of discovery, the plaintiffs filed an amended complaint in June 2012, in which the plaintiffs sought damages on behalf of public shareholders that tendered their shares in connection with 17 leveraged buyouts. In March 2013, the court denied defendants' joint motion for summary judgment and all but one individual motion for summary judgment on plaintiffs' overarching conspiracy claim but narrowed the scope of plaintiffs' allegations. Consequently, the number of transactions for which plaintiffs are seeking damages has been reduced from 17 to eight transactions. The court has previously dismissed claims against Blackstone with respect to three of these eight transactions because Blackstone was released from any and all claims by the same shareholders in prior litigation. In July 2013, the court denied all but two defendants' renewed individual motions for summary judgment, and in August 2013, the court granted another defendant's motion for reconsideration and ordered summary judgment in favor of that defendant. In July 2013, the court also denied the motion by Blackstone and three other defendants for summary judgment on plaintiffs' claim of a conspiracy with respect to the Hospital Corporation of America (HCA). On October 21, 2013, plaintiffs filed a motion for class certification and defendants filed an opposition to that motion on January 24, 2014. On March 28, 2014, plaintiffs filed a reply in support of their motion for class certification. A hearing on plaintiffs' class certification motion will take place after May 19, 2014. The Court has directed that new summary judgment motions be filed by August 1, 2014. Any trial of the action is scheduled to begin in early November 2014. BODY CENTRAL: Amended Complaint Filed in "Mogensen" Stock Suit -------------------------------------------------------------- A second amended complaint was filed in a securities suit Mogensen v. Body Central Corp. et al., 3:12-cv-00954, pending in the United States District Court for the Middle District of Florida, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. On August 27, 2012, a securities class action, Mogensen v. Body Central Corp. et al., 3:12-cv-00954, was filed in the United States District Court for the Middle District of Florida against the Company and certain of the Company's current and former officers and directors. An amended complaint, filed on February 22, 2013, on behalf of persons who acquired the Company's stock between November 10, 2011 and June 18, 2012, alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by making false or misleading statements about the business and operations, thereby causing the stock price to be artificially inflated during that period. The amended complaint seeks monetary damages in an unspecified amount, equitable relief, costs and attorney's fees. On March 19, 2014, the United States District Court for the Middle District of Florida granted the defendants' motion to dismiss the amended complaint. The court gave plaintiffs leave to file an amended complaint. A second amended complaint was subsequently filed on April 23, 2014, which, in addition to the allegations previously filed, further alleges that one of the defendants, a former officer and director, violated Section 20A of the Securities and Exchange Act of 1934. CARLYLE GROUP: Certification Hearing Date in Mass. Securities ------------------------------------------------------------- The case management order in the suit Police and Fire Retirement System of the City of Detroit v. Apollo Global Management, LLC calls for a hearing on class certification sometime after May 19, 2014, and a jury trial commencing in November 2014, which could be delayed in the event an appeal to the U.S. Court of Appeals for the First Circuit on the class certification issue should become necessary, according to The Carlyle Group L.P.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On February 14, 2008, a private class-action lawsuit challenging "club" bids and other alleged anti-competitive business practices was filed in the U.S. District Court for the District of Massachusetts (Police and Fire Retirement System of the City of Detroit v. Apollo Global Management, LLC). The complaint alleges, among other things, that certain global alternative asset firms, including the Partnership, violated Section 1 of the Sherman Act by forming multi-sponsor consortiums for the purpose of bidding collectively in company buyout transactions in certain going private transactions, which the plaintiffs allege constitutes a "conspiracy in restraint of trade." Count One of the complaint alleges an overarching conspiracy relating to certain large buyout transactions. Count Two of the complaint alleges a conspiracy with regard to the buyout of Healthcare Corporation of America. The plaintiffs seek damages as provided for in Section 4 of the Clayton Act and an injunction against such conduct in restraint of trade in the future. The defendants moved for summary judgment on both counts. On March 13, 2013, the U.S. District Court for the District of Massachusetts ruled that plaintiffs could proceed on Count One solely on the basis of an alleged conspiracy to refrain from "jumping" announced proprietary (i.e., non-auction) deals. The Court stated that it would entertain further summary judgment motions by individual defendants as to their participation in the more narrowly defined alleged conspiracy. The Court also denied summary judgment as to Count Two. On April 16, 2013, Carlyle filed a consolidated motion, renewing its motion for summary judgment on Count One, and moving for reconsideration on Count Two. On April 22, 2013, Carlyle joined a motion seeking reconsideration on Count Two filed on behalf of all Count Two defendants. On June 20, 2013, the Court denied the motion for reconsideration on Count Two filed by the Count Two defendants. On July 18, 2013, the Court denied Carlyle's individual summary judgment motion regarding its participation in the conspiracy alleged in Count One. The plaintiffs moved to certify the class on October 21, 2013. The case management order calls for a hearing on class certification sometime after May 19, 2014 and a jury trial commencing in November 2014, which could be delayed in the event an appeal to the U.S. Court of Appeals for the First Circuit on the class certification issue should become necessary. Carlyle believes that reasonable litigation and settlement costs that are not covered by applicable insurance are indemnifiable by one or more of the company's investment funds. CARLYLE GROUP: Shareholders Blocked from Amending D.C. Lawsuit -------------------------------------------------------------- The plaintiffs' previously filed notice of appeal in a securities suit against The Carlyle Group L.P. in the United States District Court for the District of Columbia was automatically reinstated after the court refused a motion to amend the suit, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On June 21, 2011, August 24, 2011 and September 1, 2011, respectively, three putative shareholder class actions were filed against Carlyle, certain of its affiliates and former directors of Carlyle Capital Corporation Limited alleging that the fund offering materials and various public disclosures were materially misleading or omitted material information. Two of the shareholder class actions (Phelps v. Stomber, et al. and Glaubach v. Carlyle Capital Corporation Limited, et al.) were filed in the United States District Court for the District of Columbia. Phelps v. Stomber, et al. was also filed in the Supreme Court of New York, New York County and was subsequently removed to the United States District Court for the Southern District of New York. The two original D.C. cases were consolidated into one case under the caption of Phelps v. Stomber and the Phelps named plaintiffs were designated "lead plaintiffs" by the Court. The New York case was transferred to the D.C. federal court and the plaintiffs requested that it be consolidated with the other two D.C. actions. The plaintiffs were seeking compensatory damages sustained as a result of the alleged misrepresentations, costs and expenses, as well as reasonable attorney's fees. On August 13, 2012, the United States District Court for the District of Columbia dismissed both the D.C. and New York shareholder class actions. The plaintiffs moved for leave to amend their complaint and/or for amendment of the Court's decision, but the trial court denied that motion on June 4, 2013. The plaintiffs' previously filed notice of appeal to the Court of Appeals for the District of Columbia Circuit was then automatically reinstated and oral arguments on this appeal were held on February 19, 2014. CREDIT CONTROL: Accused of Violating Fair Debt Collection Act ------------------------------------------------------------- Rick Mansour, Individually and on Behalf of All Others Similarly Situated v. Credit Control, LLC, Case No. 8:14-cv-00862 (C.D. Cal., June 4, 2014) alleges violations of the Fair Debt Collection Practices Act. The Plaintiff is represented by: Seyed Abbas Kazerounian, Esq. Matthew M. Loker, Esq. KAZEROUNI LAW GROUP APC 245 Fischer Avenue, Suite D1 Costa Mesa, CA 92626 Telephone: (800) 400-6808 Facsimile: (800) 520-5523 E-mail: ak@kazlg.com ml@kazlg.com CRESTWOOD EQUITY: Awaits Approval of Settlement in Merger Lawsuit ----------------------------------------------------------------- The United States District Court for the Southern District of Texas is yet to approve a settlement reached in In re Crestwood Midstream Partners Unitholder Litigation, Lead Case No. 4:13-cv- 01528, according to Crestwood Equity Partners LP's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Five putative class action lawsuits challenging the Crestwood Merger have been filed, four in federal court in the United States District Court for the Southern District of Texas: (i) Abraham Knoll v. Robert G. Phillips, et al. (Case No. 4:13-cv-01528); (ii) Greg Podell v. Crestwood Midstream Partners, LP, et al. (Case No. 4:13-cv-01599); (iii) Johnny Cooper v. Crestwood Midstream Partners LP, et al. (Case No. 4:13-cv-01660); and (iv) Steven Elliot LLC v. Robert G. Phillips, et al. (Case No. 4:13-cv-01763), and one in Delaware Chancery Court, Hawley v. Crestwood Midstream Partners LP, et al. (Case No. 8689-VCL). All of the cases name Legacy Crestwood (since merged into the Company), Crestwood Gas Services GP LLC, Crestwood Holdings LLC, the current and former directors of Crestwood Gas Services GP LLC, the Company, Inergy Midstream, Crestwood Midstream GP LLC (formerly NRGM GP, LLC), and Intrepid Merger Sub, LLC as defendants. All of the suits are brought by a purported holder of common units of Inergy Midstream, both individually and on behalf of a putative class consisting of holders of common units of Inergy Midstream. The lawsuits generally allege, among other things, that the directors of Crestwood Gas Services GP LLC breached their fiduciary duties to holders of common units of Inergy Midstream by agreeing to a transaction with inadequate consideration and unfair terms and pursuant to an inadequate process. The lawsuits further allege that the Company, Inergy Midstream, Crestwood Midstream GP LLC, and Intrepid Merger Sub, LLC aided and abetted the Legacy Crestwood directors in the alleged breach of their fiduciary duties. The lawsuits seek, in general, (i) injunctive relief enjoining the merger, (ii) in the event the merger is consummated, rescission or an award of rescissory damages, (iii) an award of plaintiffs' costs, including reasonable attorneys' and experts' fees, (iv) the accounting by the defendants to plaintiffs for all damages caused by the defendants, and (v) such further equitable relief as the court deems just and proper. Certain of the actions also assert claims of inadequate disclosure under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and the Elliot case also names Citigroup Global Markets Inc. as an alleged aider and abettor. The plaintiff in the Hawley action in Delaware filed a motion for expedited proceedings but subsequently withdrew that motion and then filed a stipulation voluntarily dismissing the action without prejudice (which has not yet been approved by the Court). The plaintiffs in the Knoll, Podell, Cooper, and Elliot actions filed an unopposed motion to consolidate these four cases, which the Court granted and captioned the consolidated matter as In re Crestwood Midstream Partners Unitholder Litigation, Lead Case No. 4:13-cv-01528 (the "Consolidated Action"). The plaintiffs entered into a Memorandum of Understanding (MOU) on September 24, 2013 to settle the Consolidated Action whereby the defendants denied liability. The settlement contemplated by the MOU is subject to a number of conditions, including notice to the class and final court approval following completion of a settlement hearing, which is scheduled for May 16, 2014. The defendants expect the Court to approve the final settlement. CRESTWOOD EQUITY: Hearing in Suit v. Arrow Midstream Set for June ----------------------------------------------------------------- The motion to authorize a class action linked to the derailment of a train transporting crude oil in Lac Megantic, Quebec, Canada, including Arrow Midstream Holdings, LLC, will be heard in June 2014, according to Crestwood Equity Partners LP's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Prior to the completion of the Arrow Acquisition on November 8, 2013, a train transporting over 50,000 barrels of crude oil produced in North Dakota derailed in Lac Megantic, on July 6, 2013. The derailment resulted in the death of 47 people, injured numerous others, and caused severe damage to property and the environment. In October 2013, certain individuals suffering harm in the derailment filed a motion to certify a class action lawsuit in the Superior Court for the District of Megantic, Province of Quebec, Canada, on behalf of all persons suffering loss in the derailment. In March 2014, the plaintiffs filed their fourth amended motion to name Arrow and numerous other energy companies as additional defendants in the class action lawsuit. The plaintiffs have named at least 53 defendants purportedly involved in the events leading up to the derailment, including the producers and sellers of the crude being transported, the midstream companies that transported the crude from the well head to the rail system, the manufacturers of the rail cars used to transport the crude, the railroad companies involved, the insurers of these companies, and the Canadian Attorney General. The plaintiffs allege, among other things, that Arrow (i) was a producer of the crude oil being transported on the derailed train, (ii) was negligent in failing to properly classify the crude delivered to the trucks that hauled the crude to rail loading terminal, and (iii) owed a duty to the petitioners to ensure the safe transportation of the crude being transported. The motion to authorize the class action will be heard in June 2014. CROSS COUNTRY: CC Staffing Seeks to Settle Cal. Labor Lawsuit ------------------------------------------------------------- CC Staffing, Inc., a subsidiary of Cross Country Healthcare, Inc., is seeking approval for the settlement of a labor suit pending in the United States District Court, Northern District of California, according to Cross Country's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On December 4, 2012, the Company's subsidiary, CC Staffing, Inc. (now known as Travel Staff, LLC) became the subject of a purported class action lawsuit (Alice Ogues, on behalf of herself and all others similarly situated, Plaintiffs, vs. CC Staffing, Inc., a Delaware corporation; and DOES 1-50, inclusive, Defendants) filed in the United States District Court, Northern District of California. Plaintiff alleges that traveling employees were denied meal periods and rest breaks, that they should have been paid overtime on reimbursement amounts, various other wage and hour claims, and that they are entitled to associated penalties. In 2013, the parties have agreed to settle this lawsuit for $0.8 million with the understanding that such settlement is not an admission by the Company of any liability, negligence or wrong doing. The settlement amount has been accrued for and is included in other current liabilities on its consolidated balance sheets. The United States District Court, Northern District of California granted preliminary approval of the settlement on January 17, 2014, subject to the inclusion of language requiring a five-day cure period for deficient requests for exclusion from class members. On February 6, 2014, the parties amended the settlement agreement to include such language. A hearing for final approval of the settlement agreement was scheduled for May 16, 2014. DUNHAM'S SPORTS: Ex-Store Managers File Overtime Class Action ------------------------------------------------------------- Brian Bowling, writing for TribLive, reports that a Troy, Mich., sports retailer with at least 14 stores in Western Pennsylvania refuses to pay its assistant store managers overtime even though most of their work is not managerial, a former Mercer County man claims in a proposed class-action lawsuit filed on June 4 in federal court. Jason D. Vasil of Surprise, Ariz., claims that he regularly worked at least 50 hours a week while living in Sharon and working at the Dunham's Sports store in Hermitage between July 2012 and April 2014. Most of his work consisted of helping customers and performing manual labor such as restocking shelves and cleaning bathrooms, the lawsuit says. When Dunham's Sports opened a store, it would send a team of assistant store managers who would work 12 to 15 hours a day setting up displays and equipment and stocking shelves. Using them allowed the company to avoid the overtime it would have had to pay regular employees to do the work, the lawsuit says. DYNEGY INC: N.Y. Court Junks "Silsby" Suit Over DMG Transfer ------------------------------------------------------------ The U.S. District Court for the Southern District of New York dismissed the remaining claims in Charles Silsby v. Carl C. Icahn, et al., Case No. 12CIV2307, according to Dynegy Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In connection with the prepetition restructuring and corporate reorganization of the DH Debtor Entities and their non-debtor affiliates in 2011 (the "2011 Prepetition Restructuring"), and specifically the DMG Transfer, a putative class action stockholder lawsuit captioned Charles Silsby v. Carl C. Icahn, et al., Case No. 12CIV2307 (the "Securities Litigation"), was filed in the U.S. District Court for the Southern District of New York. The lawsuit challenged certain disclosures made in connection with the DMG Transfer. As a result of the filing of the voluntary petition for bankruptcy by Dynegy Inc., this lawsuit was stayed as against Dynegy Inc. and as a result of the confirmation of the Joint Chapter 11 Plan (the "Plan"), the claims against Dynegy Inc. in the Securities Litigation are permanently enjoined. On August 24, 2012, the lead plaintiff in the Securities Litigation filed an objection to the confirmation of the Plan asserting, among other things, that lead plaintiff should be permitted to opt-out of the non-debtor releases and injunctions (the "Non-Debtor Releases") in the Plan on behalf of all putative class members. The company opposed that relief. On October 1, 2012, the Bankruptcy Court ruled that lead plaintiff did not have standing to object to the Plan and did not have authority to opt- out of the Non-Debtor Releases on behalf of any other party-in- interest. Accordingly, the Securities Litigation may only proceed against the non-debtor defendants with respect to members of the putative class who individually opted out of the Non-Debtor Releases. The lead plaintiff filed a notice of appeal on October 10, 2012. On June 4, 2013, the District Court dismissed the appeal. On July 3, 2013, the lead plaintiff filed a notice of appeal with the U.S. Court of Appeals for the Second Circuit and filed a brief on November 4, 2013. On July 19, 2013, the defendants filed a substantive motion to dismiss the plaintiff's remaining claims. On April 30, 2014, the District Court granted the defendants' motion and dismissed the action. ENDO HEALTH: Faces Class Suit Alleging Antitrust Law Violations --------------------------------------------------------------- Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund, individually and on behalf of all others similarly situated v. Endo Health Solutions Inc., Endo Pharmaceuticals Inc., Penwest Pharmaceuticals Co. and Impax Laboratories Inc., Case No. 2:14-cv- 03190 (E.D. Pa., June 4, 2014) alleges violations of The Clayton Antitrust Act of 1914. The Plaintiff is represented by: Natalie Finkelman Bennett, Esq. SHEPHERD FINKELMAN MILLER & SHAH LLC 35 E. State St. Media, PA 19063 Telephone: (610) 891-9880 Facsimile: (610) 891-9883 E-mail: NFINKELMAN@sfmslaw.com ENERGY TRANSFER: Approval Sought for Accord in Merger Suit ---------------------------------------------------------- Certain plaintiffs in lawsuits over the acquisition of PVR Partners LP by Regency Energy Partners LP, a subsidiary of Energy Transfer Equity, L.P., entered a settlement with defendants and the parties are awaiting approval of the agreement, according to Energy Transfer's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Five putative class action lawsuits challenging the merger have been filed and are currently pending. All of the cases name PVR, PVR GP and the current directors of PVR GP, as well as Regency and the General Partner of Regency (collectively, the "Regency Defendants"), as defendants. Each of the lawsuits has been brought by a purported unitholder of PVR, both individually and on behalf of a putative class consisting of public unitholders of PVR. The lawsuits generally allege, among other things, that the directors of PVR GP breached their fiduciary duties to unitholders of PVR, that PVR GP, PVR and the Regency Defendants aided and abetted the directors of PVR GP in the alleged breach of their fiduciary duties, and, as to the actions in federal court, that some or all of PVR, PVR GP, and the directors of PVR GP violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and Section 20(a) of the Exchange Act. The lawsuits purport to seek, in general, (i) injunctive relief, (ii) disclosure of certain additional information concerning the transaction, (iii) in the event the merger is consummated, rescission or an award of rescissory damages, (iv) an award of plaintiffs' costs and (v) the accounting for damages allegedly caused by the defendants to these actions, and, (vi) such further relief as the court deems just and proper. The styles of the pending cases are as follows: David Naiditch v. PVR Partners, L.P., et al. (Case No. 9015-VCL) in the Court of Chancery of the State of Delaware); Charles Monatt v. PVR Partners, LP, et al. (Case No. 2013-10606) and Saul Srour v. PVR Partners, L.P., et al. (Case No. 2013-011015), each pending in the Court of Common Pleas for Delaware County, Pennsylvania; Stephen Bushansky v. PVR Partners, L.P., et al. (C.A. No. 2:13-cv-06829- HB); and Mark Hinnau v. PVR Partners, L.P., et al. (C.A. No. 2:13- cv-07496-HB), pending in the United States District Court for the Eastern District of Pennsylvania. On January 28, 2014, the defendants entered into a Memorandum of Understanding ("MOU") with Monatt, Srour, Bushansky, Naiditch and Hinnau pursuant to which defendants and the referenced plaintiffs agreed in principle to a settlement of their lawsuits ("Settled Lawsuits"), which will be memorialized in a separate settlement agreement, subject to customary conditions, including consummation of the PVR Acquisition, which occurred on March 21, 2014, completion of certain confirmatory discovery, class certification and final approval by the Court of Common Pleas for Delaware County, Pennsylvania. If the Court approves the settlement, the Settled Lawsuits will be dismissed with prejudice and all defendants will be released from any and all claims relating to the Settled Lawsuits. ENERGY TRANSFER: Regency Still Faces Suits Over Eagle Rock Deal --------------------------------------------------------------- Regency Energy Partners LP, a subsidiary of Energy Transfer Equity, L.P., continues to face lawsuits challenging its acquisition of Eagle Rock Energy Partners, L.P. midstream assets, according to Energy Transfer's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Two putative class action lawsuits challenging Regency's acquisition of the Eagle Rock Energy Partners, L.P. midstream assets are currently pending in federal district court in Houston, Texas. Both cases name Eagle Rock and its current directors, as well as Regency and a subsidiary (collectively, the "Regency Defendants"), as defendants. Each of the lawsuits has been brought by a purported unitholder of Eagle Rock (collectively, the "Plaintiffs"), both individually and on behalf of a putative class consisting of public unitholders of Eagle Rock. The Plaintiffs in each case seek to enjoin the transaction, claiming, among other things, that it yields inadequate consideration, was tainted by conflict and constitutes breaches of common law fiduciary duties or contractually imposed duties to the shareholders. The Regency Defendants are named as "aiders and abettors" of the allegedly wrongful actions of Eagle Rock and its board. ENSIGN GROUP: Settles Staffing Suits Over Health, Safety Code ------------------------------------------------------------- The Ensign Group, Inc. is settling staffing suits in California, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. A class action staffing suit was previously filed against the Company in the State of California, alleging, among other things, violations of certain Health and Safety Code provisions and a violation of the Consumer Legal Remedies Act at certain of the Company's California facilities. In 2007, the Company settled this class action suit, and the settlement was approved by the affected class and the Court. The Company has been defending a second such staffing class-action claim filed in Los Angeles Superior Court; however, a settlement was reached with class counsel and has received Court approval. The total costs associated with the settlement, including attorney's fees, estimated class payout, and related costs and expenses, are projected to be approximately $6,500, of which, approximately $1,500 of this amount was recorded during the year ended December 31, 2013, with the balance having been expensed in prior periods. ENSIGN GROUP: Considers Medicare Coverage Settlement Favorable -------------------------------------------------------------- Implementation of the provisions of the Medicare Coverage Settlement Agreement could favorably impact Medicare coverage reimbursement for the services of The Ensign Group, Inc., according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. A proposed federal class action settlement was filed in federal district court on October 16, 2012 that would end the Medicare coverage standard for skilled nursing, home health and outpatient therapy services that a beneficiary's condition must be expected to improve. The settlement was approved on January 24, 2013, which tasked Centers for Medicare and Medicaid Services (CMS) with revising its Medicare Benefit Manual and numerous other policies, guidelines and instructions to ensure that Medicare coverage is available for skilled maintenance services in the home health, skilled nursing and outpatient settings. CMS must also develop and implement a nationwide education campaign for all who make Medicare determinations to ensure that beneficiaries with chronic conditions are not denied coverage for critical services because their underlying conditions will not improve. At the conclusion of the CMS education campaign, the members of the class will have the opportunity for re-review of their claims, and a two- or three- year monitoring period will commence. Implementation of the provisions of this settlement agreement could favorably impact Medicare coverage reimbursement for the company's services. EQUAL ENERGY: Motion to Consolidate Okla. Securities Suits Filed ---------------------------------------------------------------- Plaintiffs in securities lawsuits against Equal Energy Ltd. in the U.S. District Court for Western District of Oklahoma have moved to consolidate the cases, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On January 14, 2014, Equal Energy shareholder Johan Van Weelden brought a separate lawsuit in the U.S. District Court for Western District of Oklahoma against Equal Energy, its directors and Petroflow: Van Weelden v. Equal Energy Ltd., et al., No. 14-cv- 0047-C. Subsequently three putative class actions were also filed by shareholders in the same federal court: Montemarano et al. v. Equal Energy Ltd., et al., No. 14-cv-0058-C; Cooke v. Equal Energy, Ltd., et al., No. 14-CV-0087-C; Scripture v. Equal Energy Ltd., et al., No. 14-cv-0114-C. These cases allege that disclosures relevant to the proposed Arrangement Agreement with Petroflow violate Section 14(a) and 20(a) of the Securities Exchange Act. Defendants have only recently been served in these matters, and litigation is still in its initial stages. Plaintiffs have moved to consolidate the cases, and the various plaintiffs' counsel are engaging in motion practice regarding who should be appointed as lead counsel. Plaintiff Montemarano has also moved to obtain early discovery from Equal Energy. Briefing of these matters is ongoing. FIDELITY & GUARANTY: Amended Settlement Filed in Insurance Suit --------------------------------------------------------------- An amended Settlement Agreement was filed in a suit for a California class consisting of all persons who own or owned an OM Financial/Fidelity & Guaranty Life Insurance indexed universal life insurance policy, according to Fidelity & Guaranty's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On July 18, 2011, a putative class action Complaint was filed in the United States District Court for the Central District of California, captioned Eddie L. Cressy v. OM Financial Life Insurance Company, et. al., Case No. 2:2011-cv-05871. The Plaintiff asked the Court to certify the action as a class action on behalf of both a nationwide and a California class defined as certain persons who were sold OM Financial Life Insurance equity- indexed universal life insurance policies. The Plaintiff alleged, inter alia, that the Plaintiff and members of the putative class relied on defendants' advice to purchase unsuitable insurance policies. After extensive motion practice, the federal court dismissed the federal causes of action, with prejudice, and, on May 9, 2013, declined to exercise supplemental jurisdiction over the state law claims, dismissed the state law claims, without prejudice, and granted the Plaintiff leave to re- file the state law claims in California state court. On July 5, 2013, the Plaintiff filed a putative class action captioned Eddie L. Cressy v. Fidelity Guaranty [sic] Life Insurance Company, et. al. in the Superior Court of California, County of Los Angeles, at No. BC-514340. The state court Complaint asserts, inter alia, that the Plaintiff and members of the putative class relied on Defendants' advice in purchasing unsuitable equity-indexed insurance policies. The Plaintiff seeks to certify a class defined as "all persons who reside or are located in the state of California who were sold OM Financial/FGL Insurance equity-indexed universal life insurance policies as an investment." On April 4, 2014, the Plaintiff, FGL Insurance and the other two defendants signed a Settlement Agreement, pursuant to which FGL Insurance has agreed to pay a total of $5.3 to settle the claims of a nationwide class consisting, with certain exclusions, of all persons who own or owned an OM Financial/FGL Insurance indexed universal life insurance policy issued from January 1, 2007 through March 31, 2014, inclusive. As part of the settlement, FGL Insurance agreed to certification of the nationwide class for settlement purposes only. An amended Settlement Agreement was filed with the Court on April 23, 2014 as part of the Plaintiff's Unopposed Motion for Preliminary Approval of Settlement and Conditional Class Certification, which is scheduled to be heard by the Court on May 21, 2014. FGL Insurance has the right to unilaterally terminate the settlement if either: (i) 100 policyholders or (ii) policyholders representing more than one percent (1%) of the total premiums paid opt out of or object to the settlement. The settlement is subject to other conditions and the Court's final approval. At March 31, 2014, the Company estimated the total cost for the settlement, legal fees and other costs related to this class action would be $9.2 and established a liability for the unpaid portion of the estimate of $7.1. Based on the information currently available the Company does not expect the actual cost for settlement, legal fees and other related cost to differ materially from the amount accrued. The Company is seeking indemnification from OM Group (UK) Limited ("OMGUK") under the First Amended and Restated Stock Purchase Agreement, dated February 17, 2011 (the "F&G Stock Purchase Agreement") between HFG and OMGUK related to the settlement and the costs and fees in defending the Cressy litigation in both the federal and state courts. The Company has established an amount recoverable from OMGUK for the amount of $4.5, the collection of which the Company believes is probable. The actual amount recovered from OMGUK could be greater or less than the Company's estimate, but the Company anticipates that the amount recovered will not be materially different than its current estimate. The settlement, legal fees and other costs related to this class action and the amount recoverable from OMGUK is presented net in the income statement in the caption "Benefits and other changes in policy reserves." FIRST MARBLEHEAD: Seeks to Dismiss "Smith" Securities Lawsuit ------------------------------------------------------------- Plaintiff's opposition to a motion to dismiss the securities suit Smith v. The First Marblehead Corp. et al., Civ. A. No. 13-cv- 12121-PBS is due to be filed in May 2014, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On August 28, 2013, a purported class action was filed in the United States District Court for the District of Massachusetts against FMD, Daniel Meyers, FMD's Chief Executive Officer and Chairman of the FMD Board of Directors, and Kenneth Klipper, FMD's Chief Financial Officer and one of FMD's Managing Directors. The action is entitled Smith v. The First Marblehead Corp. et al., Civ. A. No. 13-cv-12121-PBS (D. Mass.). The plaintiff alleges, among other things, that the defendants made false and misleading statements and failed to disclose material information in various SEC filings, press releases and other public statements concerning the company's corporate income tax filings. The complaint alleges various claims under the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint seeks, among other relief, class certification, unspecified damages, fees and such other relief as the court may deem just and proper. In December 2013, the court appointed a lead plaintiff and lead counsel. On February 20, 2014, an amended complaint was filed by the lead plaintiff and contained similar allegations as the earlier complaint. On April 7, 2014, the company filed a motion to dismiss the amended complaint. Plaintiff's opposition to the company's motion to dismiss is due to be filed in May 2014. A class has not been certified in the action as of May 8, 2014. FITFLOP USA: Settles Deceptive Ad Class Action for $5.3 Million --------------------------------------------------------------- Kyla Asbury, writing for Legal Newsline, reports that FitFlop USA has agreed to settle a class action lawsuit claiming its footwear was deceptively advertised for $5.3 million. The settlement resolves claims that FitFlop was deceptively advertising its footwear as providing health benefits that they did not allegedly deliver. Class members who purchased FitFlop footwear in the United States between Jan. 1, 2007 and Jan. 8 are eligible to receive between $25 and $100 from the settlement. FitFlop has denied the allegations, but agreed to a settlement that was approved on April 28, according to court documents. The proposed settlement creates a $5.3 million settlement fund to provide monetary relief to class members for their purchases of FitFlop footwear and to pay for attorneys' fees, expenses and notice and administration costs, according to the order granting final approval for the class action settlement that was filed April 28 in the U.S. District Court for the Southern District of California. If the settlement fund is not exhausted, the remainder will go to Consumers Union of the United States, a non-profit group that says it is dedicated to fighting false advertising, and Consumer Watchdog, a non-profit civic entity that says it fights to expose, confront and change deceptive corporate practices through policy research, investigation, public education and advocacy. The settlement fund was reached after the parties engaged in settlement discussions at the early neutral evaluation conference held before Magistrate Judge Karen S. Crawford and after attending two private mediations with Martin Quinn of JAMS San Francisco on Oct. 9, 2012, and June 19, according to settlement documents. Following the parties' last mediation session, they continued to engage in numerous telephonic conferences until a tentative settlement was reached in July. Charlice Arnold, a named plaintiff in the suit, will receive a $5,000 service award and Barbara Glaberson and Angie Ojeda will receive awards of $1,500, according to the settlement document. The court founds that class counsel's request for $1.325 million in attorneys' fees and $180,000 in expenses is fair and reasonable. "Through an extensive and comprehensive nationwide marketing campaign, defendant claims that its expensive FitFlop Footwear . . . with its patent-pending 'Microwobbleboard Technology' will provide to anyone who wears it a variety of health benefits ordinary footwear cannot provide," according to the complaint, which was filed May 4, 2011, in the U.S. District Court for the Southern District of California. The defendant promised that its shoes improve posture, increase muscle activation and toning and reduce joint strain, the complaint stated. FitFlops range from approximately $50 to $240, according to the complaint. The plaintiffs were represented by Timothy Gordon Blood -- tblood@bholaw.com -- Leslie E. Hurst -- lhurst@bholaw.com -- and Thomas J. O'Reardon II of Blood Hurst & O'Reardon LLP; Janine L. Pollack -- pollack@whafh.com -- Michael Liskow -- liskow@whafh.com -- Francis M. , Gregorek -- gregorek@whafh.com -- Betsy C. Manifold -- manifold@whafh.com -- Rachele R. Rickert -- rickert@whafh.com -- and Maris C. Livesay -- livesay@whafh.com -- of Wolf Haldenstein Adler Freeman & Herz LLP; Elaine A. Ryan and Patricia N. Syverson -- psyverson@bffb.com -- of Bonnett, Fairbourn, Friedman & Balint, PC; James C. Shah of Shepherd Finkelman Miller & Shah LLP; John F. Edgar of Edgar Law Firm LLC; and Jayne A. Goldstein of Pomerantz Grossman Hufford Dahlstrom & Gross LLP. FitFlop was being represented by Brooke A. Alexander -- balexander@bsfllp.com -- Laura J. McKay and William S. Ohlemeyer - - wohlemeyer@bsfllp.com -- of Boies, Schiller & Flexner LLP. The case was assigned to District Judge Thomas J. Whelan. U.S. District Court for the Southern District of California case number: 3:11-cv-00973 FORGE GROUP: Bentham IMF Plans to Fund Shareholder Class Action --------------------------------------------------------------- Oliver Probert, writing for Australian Journal of Mining, reports that Bentham IMF, which in February said it would consider funding a shareholder class action lawsuit against the collapsed mining supply firm Forge, confirmed it would go ahead with that action to AJM on May 27. More than 1700 workers were made redundant when Forge Group was forced into liquidation earlier this year, after costs blew out on the Diamantina and West Angelas power station projects it was contracted to build. The company's stock price dropped more than 80% in a single day when it announced the cost issues and an AU$127 million profit writedown last November. That announcement was followed on February 11 this year with the decision by Forge's board of directors to place the company into voluntary administration, appointing KordaMentha Restructuring as receivers and managers of the business. A day later KordaMentha announced the redundancy of much of Forge's workforce, and the loss of many of the company's projects to other contractors. Soon after, Ferrier Hodgson, the firm appointed to liquidate Forge, announced that remaining shareholders in the ASX-listed business would receive nothing more out of their investment. The stunning collapse, which saw the Perth-based engineer's stock fall from around AU$4.10 to around AU$0.60 in a single day in November, enraged shareholders. Some alleged that the company's directors had not been as honest and up-front with their shareholders as they could or should have been, and left it too late to break the bad news of cost overruns. That's where Bentham IMF, an Australian funder of litigation suits, has stepped in. "It is simply not believable that Forge directors waited until late November 2013 to tell investors of problems with the power station contracts, when it [allegedly] knew or ought to have known about them much earlier in the year," IMF investment manager Tania Sulan said in February, before the company confirmed it would go ahead in funding the lawsuit. "This is a classic case of a company and its directors breaching fundamental obligations to shareholders and the market," she alleged. IMF appealed to all shareholders to join the class action, and as first reported in AJM's sister publication, the Australian Bulk Handling Review, Ms. Sulan confirmed on May 27 that IMF will go ahead with funding the lawsuit. "We have decided that the claim size is sufficient to confirm funding," Ms. Sulan said. Ben Phi, practice group leader for Slater & Gordon, the legal firm which was appointed to run the proposed action back in February, said at that time: "Based on our investigations to date, we believe that the proposed allegations against Forge have strong grounds." Current and former shareholders who acquired Forge shares on or after January 1, 2013 and held some or all of these shares at any time between November 4, 2013 and February 11, 2014 are eligible to participate in the action, IMF said. FUSION-IO INC: Still Faces Securities Lawsuits in California ------------------------------------------------------------ Fusion-Io, Inc. continues to face securities lawsuits filed in the United States District Court for the Northern District of California, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Beginning on November 19, 2013, the Company and certain of its current and former officers were named in three putative class action lawsuits filed in the United States District Court for the Northern District of California (Denenberg v. Fusion-io, Inc. et al.; Miami Police Relief & Pension Fund v. Fusion-io, Inc. et al.; Marriott v. Fusion-io, Inc. et al.). Two of the complaints are allegedly brought on behalf of a class of purchasers of the Company's common stock between August 10, 2012 and October 23, 2013, and one is brought on behalf of a purported class of purchasers between January 25, 2012 and October 23, 2013. The complaints generally allege violations of the federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class periods. The complaints seek, among other things, compensatory damages and attorneys' fees and costs on behalf of the putative class. GENERAL MOTORS: Plaintiffs' Lawyers Criticize Internal Report ------------------------------------------------------------- Amanda Bronstad, writing for The National Law Journal, reports that plaintiffs lawyers who have sued General Motors Co. over its ignition switch recalls on June 5 criticized the automaker's internal investigative report as biased and incomplete. The 315-page report, released on June 5, concluded that GM failed to identify ignition switch defects -- which have been linked to 13 deaths -- due to incompetence among its employees, not a cover- up by senior executives. GM fired 15 employees and disciplined five others. "The ignition switch issue was touched by numerous parties at GM -- engineers, investigators, lawyers -- but nobody raised the problem to the highest levels of the company," said CEO Mary Barra, who described the report as "extremely thorough, brutally tough and deeply troubling." The report, conducted by former U.S. Attorney Anton Valukas -- avalukas@jenner.com -- chairman of Jenner & Block, is GM's explanation as to why it recalled 2.6 million vehicles for ignition switch problems this year. Documents that GM submitted to Congress indicate the company knew about the defects for the past decade. Mark Robinson, senior partner of Robinson, Calcagnie, Robinson Shapiro Davis Inc. in Newport Beach, Calif., said the Valukas report, some of which is redacted, is just a start. "The report [Thurs]day makes us think there's a lot more questions that we want answered," he said. "There are a lot of apologies in here, a lot of admissions of wrongdoing, and I commend GM for that, making this public. On the other hand, these admissions are shocking. It makes me wonder what more we're going to get out of these documents." For instance, Mr. Robinson said, the report concluded that Ms. Barra and GM general counsel Mike Milliken didn't know about the ignition switch problems until after GM made the decision to institute this year's recalls. But senior attorney Bill Kemp, who the report said is "widely regarded as GM's most knowledgeable, experienced, and trusted safety lawyer," could not explain to GM's investigators why he failed to tell Mr. Milliken about known ignition switch problems until earlier this year. Mr. Kemp was among those employees GM fired, according to a Bloomberg report on June 5. (The report recommends a series of changes to GM's legal department.) "The highest, most knowledgeable product liability lawyer at GM knew. As far as I'm concerned, GM knew," Mr. Robinson said. "Whether he told Milliken or not . . . doesn't really matter. It might be a deficiency in the way they're running the office, but clearly the most knowledgeable product liability lawyer at GM knew." Mr. Robinson and other plaintiffs lawyers also questioned the independence of the report itself. Mr. Valukas of Jenner spearheaded the investigation with the assistance of King & Spalding -- firms that have long served as outside counsel to GM. Jenner & Block's previous work for GM includes its $15.8 billion initial public offering in 2010. "Let's not lose sight of the fact that GM commissioned and paid for the report, and its primary author is an attorney who represents GM," Steve Berman, managing partner of Seattle's Hagens Berman Sobol Shapiro, said in a written statement on June 5. With more than 60 lawsuits filed against GM, plaintiffs lawyers said they have more faith that their own cases will tell the entire story, even though discovery has been stayed pending resolution of issues related to GM's 2009 bankruptcy. Lance Cooper, founding partner of The Cooper Firm in Marietta, Ga., whose case on behalf of the parents of Brooke Melton has been credited for uncovering the ignition switch defects, said in a statement on Thursday that documents and the testimonies of employees showed that GM chose not to fix the ignition switch defects for cost reasons. "That is why it is critical that the civil cases move forward so that the American public may learn the whole truth, not just the truth GM chooses to disclose," Mr. Cooper said. GENERAL MOTORS: Two AM 100 Law Firms Issue Recall Probe Report -------------------------------------------------------------- Brian Baxter, writing for The Am Law Daily, reports that for General Motors, the mounting legal problems that began with a suit brought by a four-lawyer firm in Marietta, Ga., took a new turn on June 5, when two Am Law 100 firms with close ties to the company issued their verdict on what caused GM's current recall crisis. In a 315-page investigative report filed with the National Highway Traffic Safety Administration, GM's lawyers from Jenner & Block and King & Spalding detail a "pattern of incompetence and neglect" at the automaker, but found no widespread conspiracy among top executives to cover up an ignition switch defect that has been linked to 13 deaths and sparked the recall of 2.6 million vehicles. The report -- the product of an internal inquiry led by Jenner chairman Anton "Tony" Valukas -- specifically cleared CEO Mary Barra of any wrongdoing related to GM's efforts to uncover and address the mechanical flaw, according to sibling publication The National Law Journal. Ms. Barra, recently named one of Time's 100 Most Influential People and set to earn $14.4 million in compensation this year after becoming the first woman to move into GM's top leadership role in January, said publicly that the report's findings implicated a "disproportionate number" of senior executives. She also announced that 15 employees have left the company as a result of what the Valukas-led team uncovered. While Ms. Barra didn't name the individuals in question, various news reports soon identified several of those affected. Among them is William Kemp Jr., a longtime GM in-house lawyer who had led the company's safety and recall unit. Kemp's name has surfaced in connection with internal GM emails pointing to ignition switch problems with the company's Pontiac G5 and Chevrolet Cobalt models. (The Cobalt has been Google's preferred vehicle for its Streetview cameras. The Internet search giant is now developing its own self-driving cars.) Mr. Kemp, who works out of a GM's engineering and technical center in the Detroit suburb of Warren, Mich., did not respond to a request for comment. In the early 1990s, he helped lead a robust GM response to a flawed Dateline NBC News report about the allegedly explosive nature of the automaker's "sidesaddle" fuel tanks. The network later settled a suit filed by company over that report. (Bloomberg noted Mr. Kemp's role in the Dateline drama in a story last month about GM's efforts to overhaul its in- house legal department to avoid further recall delays.) As noted in a series of stories over the past two months by sibling publication Corporate Counsel, GM's general counsel Michael Millikin has been at the heart of the recent recall crisis, which has increased scrutiny on the company's in-house legal operations. Corporate Counsel reported on June 5 that Mr. Millikin's name is conspicuously absent as an author of the massive report filed with NHTSA. Only Mr. Valukas, who served as the top federal prosecutor in Chicago from 1985 to 1989, is listed on the document's title page. While the absence of Mr. Millikin's name is notable given that GM said previously he would lead the inquiry alongside Mr. Valukas, a GM spokesman told Corporate Counsel that the report was prepared independently by the Valukas-led team. Mr. Millikin, a 65-year-old Michigan native and former federal narcotics prosecutor who spent more than 30 years at GM before becoming its in-house legal chief in 2009, has appeared with Ms. Barra as she endured congressional grillings over the past few months. He did not respond to a request for comment about how much GM is paying Jenner and King & Spalding for their work on the matter or why they were picked to handle the investigation. Such internal investigations -- for embattled companies, nonprofits, politicians or labor unions -- have become a lucrative source of revenue for large firms in recent years. In 2010 Mr. Valukas, hired the year before as a court-appointed examiner in the massive Lehman Brothers bankruptcy case, released a 2,200-page report detailing what caused the financial services giant to implode. (Mr. Jenner reaped $58 million in fees and expenses for its work in the Lehman matter.) In the GM report released on June 5, the company's lawyers state that their investigation "covered a time period of more than [15] years, involved hundreds of witness interviews and the review of millions of documents. Throughout the entire investigation, GM provided unfettered access and cooperation." The report describes Jenner's role as being focused on "the knowledge of specific senior executives, as well as GM's board." The firm, which notes that its investigation focused solely on the ignition switch and not other recalls, also did not seek to "reconstruct accidents or determine which injuries or fatalities were or were not caused by the safety defect in the Cobalt and other cars." Mr. Jenner identified more than 300 document custodians and then subjected their files to a "document production process and an investigative process" that resulted in two different levels of review to "identify documents potentially responsive to government requests." (GM is currently coping with at least four different federal investigations.) The report states that than 230 witnesses were interviewed over a period of 70 days by at least two Jenner attorneys. The only exceptions were former GM in-house legal chiefs Robert Osborne, who is currently of counsel with Jenner in Washington, D.C., and his predecessor Thomas Gottschalk, now of counsel with Kirkland & Ellis in the same city. The two former GCs were interviewed by an unidentified outside firm. It is unclear whether that firm was King & Spalding, which, according to the GM report, was retained to "assist in responding to requests from government agencies." King & Spalding lawyers also assisted in searches for documents and conducted "first- level" document review, as well as participated in a "limited number" of witness interviews in the "initial phase of the investigation." A King & Spalding spokesman and Jenner spokeswoman both referred requests for comment to GM, whose spokesman Greg Martin told The Am Law Daily in an email that the company had "nothing additional to provide" beyond the report itself. Besides its ties to Mr. Osborne, a former cochair of the corporate department at Jenner, the Chicago-based Am Law 100 firm has enjoyed a longtime relationship with GM. The firm received roughly $23 million for its role advising the company five years ago during its 40-day stint in Chapter 11 and subsequent initial public offering that raised $23.1 billion in late 2010. (Joseph Gromacki, who joined Jenner from Kirkland in 2003 and now chairs the firm's corporate practice, was named an American Lawyer Dealmaker of the Year in 2011 for his GM work.) Asked about the firm's current work for GM, newly elected Jenner managing partner Terry Truax told The Am Law Daily earlier this year that "we're very proud to represent GM, and the GM in-house community is looking to Valukas to give an unvarnished report." The NLJ reported on June 5 that several plaintiffs lawyers suing GM -- some of whom have banded together to take on the automaker -- have assailed the Valukas report as a whitewash by conflicted counsel. "Let's not lose sight of the fact that GM commissioned and paid for the report, and its primary author is an attorney who represents GM," said a statement by Steve Berman, a founding partner of Seattle-based plaintiffs firm Hagens Berman Sobol Shapiro. "I see this as nothing more than a cynical attempt at masking the truth, at the expense of GM owners." King & Spalding also did some bankruptcy work for GM and has long handled product liability litigation for the company, including incidents over faulty fuel tanks and ignition switches. GM hired former Kaye Scholer partner Kenneth Feinberg -- kfeinberg@feinbergrozen.com -- in April to advise on a compensation fund for recall victims. Mr. Feinberg, now a founder and name partner of Washington, D.C.'s Feinberg Rozen, will be now tasked with administering a compensation fund to dole out payments to potential victims of GM's ignition switch failure. The company has said it is preparing for more recalls, and as such the automaker has added to its recall-related payroll. Earlier last week, The NLJ reported the company hired Holland & Knight to lobby on "oversight and legislation pertaining to [the] automobile recall." Holland & Knight partners Richard Gold -- rich.gold@hklaw.com -- the head of the firm's public policy and regulation practice, and Paul Bock, who heads its government section group, are leading a team working on the matter for the auto giant, according to records on file with the U.S. Senate. GM has paid outside and in-house lobbyists nearly $3 million through the first quarter of this year. Besides seeking to make inroads on Capitol Hill, GM, which has had its defenders as it seeks to weather the recall storm, now must also rebuild its relationships with customers and some business partners. A lawyer with a large firm in Michigan with close ties to the auto industry, who sought anonymity in order to speak freely, says the company sought last year to issue new terms and conditions for auto parts suppliers that would increase the suppliers' potential exposure to future recall costs. After a supplier "revolt," GM withdrew its proposed modifications to contracts with companies that provide the company with the necessary parts to make its myriad vehicles in February, says the lawyer, who notes that suppliers still share some liability for future recalls, though not under the stiffer terms GM sought to push through last year. Perhaps not surprisingly, Reuters reported in May on a survey of "tier 1" auto parts suppliers finding that GM was the worst OEM -- or original equipment manufacturer, an acronym used to identify Detroit's big automakers -- to have as a customer. GM earned the dubious distinction by beating out Chrysler, which Reuters reports had held the title since 2008. Chrysler -- which like GM emerged from government-backed bankruptcy proceedings five years ago -- is currently the subject of its own NHTSA investigation related to a 2012 recall prompted by faulty air bags in its Jeep sport utility vehicles. GENERAL MOTORS: No Conspiracy in Ignition-Switch Recall ------------------------------------------------------- Todd Ruger, writing for The National Law Journal, reports that an exhaustive internal investigation of General Motors Co.'s ignition-switch recall shortcomings revealed a "pattern of incompetence and neglect," but no overarching conspiracy to conceal information from the public, the company said on June 5. The investigation, led by former U.S. Attorney Anton Valukas, chairman of Jenner & Block, found GM's handling of the recall was "riddled with failures which led to tragic results for many," the company's chief executive office said in a statement. The Valukas report concluded that no one at GM took responsibility to fix the issue on the Chevy Cobalt, GM CEO Mary Barra said in the statement. The report, Ms. Barra said, "revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost." The report was sent to Congress on June 5, according to The New York Times. "The ignition-switch issue was touched by numerous parties at GM -- engineers, investigators, lawyers -- but nobody raised the problem to the highest levels of the company," Ms. Barra said. Ms. Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling," the press release stated. Kenneth Feinberg of Feinberg Rozen will administer a compensation program for victims of crashes related to faulty ignition switches. Ms. Barra said 15 individuals who were determined to have acted inappropriately are no longer with the company. Disciplinary actions have been taken against five other employees. GM Chairman Tim Solso said in a statement the company will implement recommendations made in the Valukas report. "In addition, the board also retained independent counsel to advise us with respect to this situation and governance and risk management issues," Mr. Solso said. "We will establish a stand- alone risk committee to assist in overseeing these efforts." GM has recalled 2.6 million cars and acknowledged that 13 people have died due to the ignition defects, which could shut off engines and prevent air bags from deploying in accidents. The U.S. National Highway Traffic Safety Administration on May 16 announced that GM had agreed to pay the maximum $35 million for its failure to promptly report the defects to the public. GM faces more than 60 lawsuits over the ignition-switch recalls. GM has pushed to coordinate those cases in New York, where the automaker has moved in bankruptcy court to bar most of the cases under its 2009 Chapter 11 reorganization. A U.S. Judicial Panel on Multidistrict Litigation ruling, expected within a few weeks, will decide the identity of the judge who will issue critical rulings in the GM litigation. The plaintiffs lawyers, at a recent session, outlined key facts in the litigation and focused attention on GM's lawyers, including general counsel Michael Millikin, who signed off on settlements in earlier cases involving accidents that could have been caused by the ignition-switch defects. Mr. Solso said on June 5 the Valukas report "confirmed" that Ms. Barra and Mr. Millikin "did not learn about the ignition- switch safety issues and the delay in addressing them until after the decision to issue a recall was made on Jan. 31, 2014." The plaintiffs lawyers also said the problems go beyond the ignition switch, involving GM's long culture of cost cutting, and they believe the number of deaths is much greater than the company has acknowledged. NHTSA officials in May declared that the defects could be responsible for more than 13 deaths. Mr. Jenner collected more than 41 million documents for the investigation, and conducted more than 350 interviews. The report details roundtable discussions about litigation and cases that GM lawyers worked on. The report includes nine recommendations for the GM legal staff, such as holding regular discussions between each product litigation attorney and the higher-level attorneys about potential safety issues. It also recommends a member of the legal staff be designated a liaison to the "Global Vehicle Safety" group at the company. GM lawyers should also meet monthly with engineers, and should create guidance concerning the types of issues that should be elevated to the general counsel, the report found. GENERAL MOTORS: To Launch Compensation Program for Crash Victims ---------------------------------------------------------------- The Associated Press reports that General Motors plans to launch a program to compensate crash victims or families affected by an ignition switch problem that is linked to at least 13 deaths in crashes of older GM cars. The company said it expects the program will start accepting claims Aug. 1, but didn't specify how much money will be involved. Guidelines and other details will be developed in the coming weeks by compensation expert Kenneth Feinberg, GM said. GM has recalled 2.6 million older small cars to repair the ignition switches. A report issued on June 5 said it took GM more than a decade to issue the recall partly because employees improperly viewed the switch defect as a "customer satisfaction" issue instead of a safety problem. GM announced the hiring of Mr. Feinberg in April. He previously handled the Sept. 11 Victim Compensation Fund as well as funds for victims of the Boston Marathon bombing and the BP oil spill. Mr. Feinberg told The Associated Press that the timeline means "I have my work cut out for me." During the next few weeks, he said he'll speak with plaintiff's lawyers, lawmakers, public interest groups and GM officials. "I'll propose some ideas based on my experience that will form the basis for a . . . compensation program," he said. CEO Mary Barra said on June 5 that the report by former U.S. Attorney Anton Valukas found a pattern of incompetency and neglect, but not a cover-up, at the heart of the Detroit automaker's long delay in dealing with the faulty switches. Ms. Barra said the company would "do the right things for those who were harmed" and "everything in our power to make sure this never happens again." The internal investigation and Ms. Barra's remarks don't deter Lance Cooper, a Georgia-based personal injury attorney who represents victims suing GM. Mr. Cooper said in a statement that documents produced in one lawsuit show that GM opted not to fix the safety defects in cars "for cost reasons." "This is why it is critical that the civil cases move forward so that the American public may learn the whole truth, not just the truth GM chooses to disclose," he said. Mr. Feinberg said he's been focused on his task, not the investigation, so he can't comment on the latter's findings or how they might affect those suing GM. "That's up to them -- it's a voluntary program I'm establishing," he said. "The alternative is protracted litigation." GENERAL MOTORS: Plaintiffs' Attorneys Argue Over Case Venue ----------------------------------------------------------- Jeff Bennett at The Wall Street Journal reports that 15 attorneys with product-liability cases pending against General Motors Co. each got two minutes on June 5 in federal court to make the case for consolidating the cases before a federal judge in their home states. As lawyers argued for their venues -- Florida offers speed; California is home to a judge with recent experience handling large-scale automotive product liability litigation -- a traffic signal-style device shifted from green to yellow to red, counting down each lawyer's remaining time. In addition to California and Florida, lawyers argued for New York, Texas, Louisiana, Pennsylvania and Michigan, where GM is based. Newport Beach, Calif., Attorney Mark Robinson of Robinson Calcagnie Robinson Shapiro Davis Inc. argued that the GM cases should be assigned to California. He was the lead attorney for plaintiffs in cases brought against Toyota Motor Corp. over defects related to sudden acceleration. Those cases were consolidated in Orange County, Calif., and Toyota agreed to a $1.6 billion settlement in 2013. Mr. Robinson said there is no need to assign the case to New York, where the GM bankruptcy case is being handles. The bankruptcy and the civil litigation deal with different issues, he argued. The panel is expected to make decisions within the next two weeks. Consumers have filed 59 cases, claiming that they've suffered economic loss because the Chevrolet Cobalt and other older models have been deemed by GM to be defective. The auto maker has recalled 2.6 million cars to fix faulty ignition switches, linked by the company to 13 deaths. A GM attorney ran into a wall of questions from the seven member panel when he argued that none of these claims can move forward until a bankruptcy court rules on whether most of the claims that occurred before the auto maker's 2009 bankruptcy are nullified. GM argues that the company's bankruptcy settlement diverts such claims to an "Old GM" entity set up to dispose of liabilities and assets that aren't part of the restructured "New GM." One panel member asked whether it is, in fact, GM's view that even product liability cases filed after 2009 cannot proceed. The lawyer agreed that was GM's position. Other attorneys asked the panel to not wait on the bankruptcy court and move ahead so lawyers can begin discovery. They argued that any post June 2009 claim should be heard. GENERAL MOTORS: Meltons File New Suit Over 2005 Cobalt Crash ------------------------------------------------------------ Gregory Wallace, Poppy Harlow and Amanda Hobor, writing for CNNMoney, report that the first time Brooke Melton's car stalled while driving, her father insisted they take it to the dealership to be fixed. But it happened again three days later, on March 10, 2010 -- her 29th birthday. This time, she lost control of the car. It spun out, hydroplaned, hit an oncoming vehicle and rolled off the road, dropping 15 feet into a creek. Before her parents could get to the hospital, Brooke Melton was dead. Police concluded her 2005 Chevrolet Cobalt was "traveling too fast for the roadway conditions;" she was doing 58 miles per hour in a 55 zone. But her parents doubted she was to blame. "She was just so responsible about driving. I mean, we even called her scaredy cat because she was so responsible about driving," Ken Melton said. "I knew in my heart and in my gut there was something wrong with the car, that it wasn't her fault." Their skepticism, and the findings of an engineering expert they hired, first alerted the public to an ignition switch flaw. General Motors (GM) went on to recall 2.6 million vehicles for the problem. The Meltons had already settled their lawsuit against GM by the time the recall was issued. Now that the automaker has admitted it knew of ignition switch issues 10 years before the recall, the family has filed a new lawsuit asking a judge to reopen the case, and accused a GM engineer of lying about his knowledge of the flaw. General Motors told CNNMoney it "denies the assertion that GM fraudulently concealed relevant and critical facts in connection with the Melton matter." It said the results of an internal investigation into the circumstances will be released Thursday. The GM engineer did not return CNNMoney's calls. 'Not about the money' Ken and Beth Melton are convinced their daughter's death was due to the flawed ignition switch. They say her car's data recorder shows that the ignition was switched out of "run," to the "accessory" position, seconds before the crash, citing an expert they hired. That can disable power steering, anti-lock braking and the airbags. The airbag in Melton's Cobalt did not deploy. The GM dealership that worked on the car days earlier received a bulletin that GM distributed to dealerships in 2006 about the problem and should have fixed it, the Meltons claim. Their lawsuit also names the dealership, which declined through its attorney to speak with CNNMoney. Brooke Melton isn't on General Motors' list of 13 ignition switch- related deaths, GM CEO Mary Barra said, because the company is only counting head-on crashes where air bags did not deploy. Federal regulators say the death toll is likely higher. Beth Melton accuses the automaker of "playing with numbers." "Enough of this posturing. Enough of trying to say 'we didn't do anything wrong,'" Ken Melton said. The Meltons say they thought the case was behind them when they settled with GM in September 2013. Revelations emerging from the 2014 recall changed their mind. "Not only did General Motors' defect cause their daughter's death, but then (GM) withheld evidence," their attorney, Lance Cooper, said. The Meltons "did not have all the information that was necessary before they settled their case." They acknowledge that persuading a judge to reopen the case is difficult. But Cooper said the "evidence is overwhelming" and shows that GM "fraudulently entered into" a settlement. The terms of the Melton's settlement were not disclosed. And the Meltons say the effort to reopen the lawsuit isn't about the money. "We want to know who at General Motors knew, and what General Motors is going to do in the future, and what happened to Brooke and who allowed it," Beth Melton said. This time, the Meltons say they won't settle, and intend to fight all the way up to the Georgia Supreme Court if necessary. Brooke's legacy Not far from their home, Brooke Melton's battered 2005 Cobalt still sits in storage, its steering wheel removed by investigators. The Meltons took CNNMoney to see it -- the couples' first time seeing their daughter's car since they cleared it of her belongings four years ago. "I want people to see how violent the impact was and that her death is not being counted -- it means like it doesn't matter," he said. The Meltons insist GM should have notified owners earlier, and the dealership should have fixed Brooke's car. And they believe that her crash led to the recall. Mr. Cooper's law firm hired engineering expert Mark Hood, who collected GM ignition switches from cars and junkyards and discovered the problem. In February, General Motors began the ignition switch recalls. "Every time I see a recall from General Motors, I give a nod to Brooke," Beth said. "These people need to know that there are problems with their cars and people are finding out -- and I think it has a lot to do with the case that started with our daughter." GENERAL MOTORS: 2006 Crash Victim Not on Confirmed Deaths List -------------------------------------------------------------- CNN Wire reports that Natasha Weigel, 18, and her friend Amy Rademaker, 15, died from car crash injuries in October 2006, after their Chevy Cobalt hit a tree in St. Croix County, Wisconsin. Amy was sitting in the passenger seat in the front. Natasha was in the back. However, General Motors counts only Amy's death among the 13 caused by ignition switch failures, which are at the center of a massive recall and have led to Congressional hearings and multiple investigations into the auto company. Natasha's family learned last month from government safety regulators that she is not on GM's list of confirmed deaths. And the parents of both Amy and Natasha are at a loss to understand the distinction. "I don't understand how Amy can be on that list and not Natasha," said Ken Rimer, Natasha's step father. "Had the ignition switch not failed, they'd both be alive." General Motors has yet to reach out to either girls' parents directly. They both say they learned about the tie between the accident and the ignition switch problem earlier this year. They are represented by the same lawyer, Robert Hilliard of Texas, and joined a lawsuit with other victims suing GM in March. Last month, both families asked the National Highway Traffic Safety Administration whether GM had included their daughters on the list of 13 confirmed deaths. Amy's name was on it. Natasha's wasn't. The Rimers say they can only guess why Natasha was excluded. Amy's front-seat airbag didn't activate, a problem with the ignition switch failures. Since Natasha was in the backseat, which didn't have airbags, her death was not tied to an unactivated airbag. She died 11 days after the accident from head injuries. The driver was also injured but survived. GM confirmed to CNNMoney that its list includes only those in the front seat of cars whose airbags didn't inflate. But the pain and loss for Natasha's family isn't any different. "I just don't understand," Mr. Rimer said. Amy's mother, Margie Beskau, received an email from the government around April 11 that her daughter was one of the victims. She was surprised that Natasha's name wasn't on that list. "GM is trying to pass this off as an airbag problem, and it's not," Ms. Beskau said. GM declined to comment on the lawsuit. But spokesman Greg Martin said that "GM has taken responsibility for its actions and will keep doing so." GLAXOSMITHKLINE PLC: Georgia to Get $2.6MM in Drug Settlement ------------------------------------------------------------- Lawrence Viele Davidson, writing for Daily Report, reports that GlaxoSmithKline reached a $105 million settlement with Georgia and 44 other states last week for misrepresenting uses and qualities of its drugs Advair, Paxil and Wellbutrin. Georgia will get $2.62 million from the settlement, said John Sours, the administrator of the Governor's Office of Consumer Protection. The money goes in the state's general fund. The Office of Consumer Protection is charged with prosecuting violations of the Fair Business Practices Act. The company is accused of giving financial incentives to its sales force to market drugs for off-label use. Sales representatives also provided samples of the drugs to doctors who were likely to only prescribe the drugs for off-label use, according to the settlement. GSK reached a related settlement with the federal government in 2012. It agreed to pay $3 billion to resolve criminal and civil liabilities for rewarding doctors who promoted the drugs for off-label use with lavish trips, according to the U.S. Department of Justice. "GSK is the first pharmaceutical company to commit to fundamental reforms to our business model in the U.S. and around the world by stopping payments to doctors to speak about our products, stopping payments to doctors to attend medical conferences and cutting the tie linking the pay of our sales representatives who call on prescribers to the number of prescriptions issued," the company said in a press release. The company did not admit liability in the state settlement agreement. Illinois and Oregon state prosecutors led the executive committee in the multi-state litigation, according to a Georgia press release. Mr. Sours' office works with the state Attorney General's office, which gets information about any push for consumer protection lawsuits from the National Attorneys General Association. "We will continue to collaborate in order to protect Georgia consumers from unfair business conduct," Attorney General Sam Olens said in the press release. GNC HOLDINGS: Court Approval Sought for Hydroxycut Suit Accord -------------------------------------------------------------- The parties in In re: Hydroxycut Marketing and Sales Practices Litigation, MDL No. 2087 have since reached a revised settlement, which remains subject to Court approval, according to GNC Holdings, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On May 1, 2009, the FDA issued a warning on several Hydroxycut- branded products manufactured by Iovate Health Sciences U.S.A., Inc. ("Iovate") based on 23 reports of liver injuries from consumers who claimed to have used the products between 2002 and 2009. As a result, Iovate voluntarily recalled 14 Hydroxycut- branded products. Following the recall, the Company was named, among other defendants, in multiple lawsuits related to Hydroxycut-branded products in several states. Iovate previously accepted the Company's tender request for defense and indemnification under its purchasing agreement with the Company in these matters. The Company's ability to obtain full recovery in respect of any claims against the Company in connection with products manufactured by Iovate under the indemnity is dependent on Iovate's insurance coverage, the creditworthiness of its insurer, and the absence of significant defenses by such insurer. To the extent the Company is not fully compensated by Iovate's insurer, it can seek recovery directly from Iovate. The Company's ability to fully recover such amounts may be limited by the creditworthiness of Iovate. As of March 31, 2014, there were 76 pending lawsuits related to Hydroxycut in which the Company had been named: 70 individual, largely personal injury claims and six putative class action cases, generally inclusive of claims of consumer fraud, misrepresentation, strict liability and breach of warranty. The United States Judicial Panel on Multidistrict Litigation consolidated pretrial proceedings of many of the pending actions in the Southern District of California (In re: Hydroxycut Marketing and Sales Practices Litigation, MDL No. 2087). In May 2013, the parties to the individual personal injury cases signed a Master Settlement Agreement, under which the Company is not required to make any payments. Settlement payments will be made exclusively by Iovate and dismissals are expected to be entered in these actions on or before June 1, 2014. The parties in the consolidated class actions reached a settlement, but the Court denied final approval of that settlement in December 2013. The parties have since reached a revised settlement, which remains subject to Court approval. The Company is not required to make any payments under the current settlement agreement. Following the resolution of the individual personal injury cases and the settlement of the consolidated class action suits, all of the Hydroxycut claims currently pending against the Company will be resolved without any payment by the Company. GNC HOLDINGS: Still Faces Suits Over DMAA-Containing Products ------------------------------------------------------------- GNC Holdings, Inc. was named in 18 lawsuits involving products containing derivatives from geranium, including 15 personal injury cases and three putative class action cases as of March 31, 2014, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Prior to December 2013, the Company sold products manufactured by third parties that contained derivatives from geranium known as 1.3-dimethylpentylamine/ dimethylamylamine/13-dimethylamylamine, or "DMAA," which were recalled from its stores in November 2013. As of March 31, 2014, the Company was named in 18 lawsuits involving products containing DMAA, including 15 personal injury cases and three putative class action cases. The proceedings associated with these cases, which generally seek indeterminate money damages, are in the early stages, and any liabilities that may arise from these matters are not probable or reasonably estimable at this time. The Company is contractually entitled to indemnification by its third-party vendor with regard to these matters, although the Company's ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of the vendor and/or its insurance coverage and the absence of any significant defenses available to its insurer. GNC HOLDINGS: Still Faces Certified Labor Suit in California ------------------------------------------------------------ GNC Holdings, Inc. continues to face a certified class action in the U.S. District Court, Northern District of California, alleging violation of the Fair Labor Standards Act, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On July 21, 2011, Charles Brewer, on behalf of himself and all others similarly situated, sued General Nutrition Corporation in federal court, alleging state and federal wage and hour claims (U.S. District Court, Northern District of California, Case No. 11CV3587). On October 7, 2011, plaintiff filed an eight-count amended complaint alleging, inter alia, meal, rest break and overtime violations. On October 21, 2011, the Company filed a motion to dismiss the complaint and on December 14, 2011 the court dismissed count six (the federal overtime claim) giving plaintiffs an opportunity to amend the complaint within thirty days. On January 13, 2012, plaintiff filed a Second Amended complaint. On September 18, 2012, Plaintiff filed a Motion for Conditional Certification and on January 7, 2013, the Court conditionally certified a Fair Labor Standards Act class with respect to one of Plaintiff's claims. GNC HOLDINGS: Pa. Suit Related to Overtime Pay in Discovery ----------------------------------------------------------- Discovery regarding opt-in plaintiffs is ongoing in a labor suit filed against GNC Holdings, Inc. in the U.S. District Court, Western District of Pennsylvania, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On June 29, 2010, Dominic Vargas and Anne Hickok, on behalf of themselves and all others similarly situated, sued General Nutrition Corporation and the Company in federal court (U.S. District Court, Western District of Pennsylvania, Case No. 2:05- mc-02025). The two-count complaint alleges, generally, that plaintiffs were required to perform work on an uncompensated basis and that the Company failed to pay overtime for such work. The second count of the complaint alleges the Company retaliated against plaintiffs when they complained about the overtime policy. The Company filed a motion to dismiss count II of the Complaint and on January 6, 2011 the court granted the motion. In fall, 2011, plaintiffs filed their Motion for Class Certification. On August 16, 2012, the Court ruled on the motion, granting in part and denying in part, the motion. Class notice was mailed to putative class members in November 2012 and discovery regarding opt-in plaintiffs is ongoing. As of March 31, 2014, an immaterial liability has been accrued in the accompanying financial statements. GREAT-WEST LIFE: Sued in California for Charging Excessive Fees --------------------------------------------------------------- John Teets v. Great-West Life & Annuity Insurance Company, Case No. 2:14-at-00725 (E.D. Cal., June 4, 2014) alleges that Great- West breached its fiduciary duties, and engaged in transactions prohibited under the Employee Retirement Income Security Act of 1974 by unilaterally setting its own compensation and by charging excessive fees incident to administering the Contracts. Guaranteed Investment Contracts are a financial product offered by insurance companies. Investors -- in this case retirement plans -- pay money in exchange for a contract promising a return on the investment. A GIC is a type of group annuity contract. Great-West Life & Annuity Insurance Company operates the Great- West Key Guaranteed Portfolio Fund. Retirement plans in which the Plaintiff and the proposed class are participants and beneficiaries invest in the Fund pursuant to a GIC that governs the relationship between the plans and Great-West, referred to as "the Contract." The Contract enables Great-West to set its own compensation as a service provider to the plans. Great-West is an indirect wholly-owned subsidiary of Great-West Lifeco, Inc. Great-West is headquartered in Greenwood Village, Colorado. The Plaintiff is represented by: Todd F. Jackson, Esq. Nina Wasow, Esq. Julie Wilensky, Esq. LEWIS, FEINBERG, LEE, RENAKER & JACKSON P.C. 476 9th Street Oakland, CA 94607 Telephone: (510) 839-6824 Facsimile: (510) 839-7839 E-mail: tjackson@lewisfeinberg.com nwasow@lewisfeinberg.com jwilensky@lewisfeinberg.com - and - Garrett W. Wotkyns, Esq. Michael McKay, Esq. SCHNEIDER WALLACE COTTRELL KONECKY LLP 8501 N. Scottsdale Rd., Suite 270 Scottsdale, AZ 85253 Telephone: (480) 428-0145 Facsimile: (866) 505-8036 E-mail: gwotkyns@schneiderwallace.com mmckay@schneiderwallace.com - and - Scot Bernstein, Esq. LAW OFFICES OF SCOT D. BERNSTEIN, A PROFESSIONAL CORPORATION 101 Parkshore Drive, Suite 100 Folsom, CA 95630 Telephone: (916) 447-0100 Facsimile: (916) 933-5533 E-mail: swampadero@sbernsteinlaw.com - and - Todd Schneider, Esq. Mark Johnson, Esq. SCHNEIDER WALLACE COTTRELL KONECKY LLP 180 Montgomery Street, Suite 2000 San Francisco, CA 94104 Telephone: (415) 421-7100 Facsimile: (415) 421-7105 E-mail: tschneider@schneiderwallace.com mjohnson@schneiderwallace.com GROWLIFE INC: Served with "Romero" Securities Lawsuit in Calif. --------------------------------------------------------------- Growlife, Inc. was served with the securities complaint Randy Romero v. Growlife, Inc. et al; Case No.: CV14-03015, according to the company's May 8, 2014, Form 8-K filing with the U.S. Securities and Exchange Commission. On April 18, 2014, a class action lawsuit (the "Complaint") was filed against GrowLife, Inc., a Delaware corporation (the "Company") in the United States District Court, Central District of California (Randy Romero v. Growlife, Inc. et al; Case No.: CV14-03015). The Complaint alleges two claims: (1) Violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (the "Act") against the Company and the individual executive officers and board of directors (collectively, the "Board"); and (2) Violation of Section 20(a) of the Act against the members of the Board. On May 2, 2014, the Company was served with the Complaint. The Complaint alleges (among other things) that the Company and the Board published certain documents and filings that were inaccurate and/or inadequate, causing Company securities to be traded at an inflated price. The Complaint further alleges that the Company's and Board's actions caused the members in the class action to suffer damages in an amount to be proven at trial. The Complaint also claims that members of the Board are in violation of Section 20(a) of the Act due to their position and relationship with the Company and their alleged involvement with the Company's violation of Section 10(b) and Rule 10b-5 of the Act. HERE TO THERE: Accused of Not Paying Overtime Premiums in Indiana ----------------------------------------------------------------- W. Edward Kriete on Behalf of Himself and All Others Similarly Situated v. Here to There, Inc. and Joshua Baxter, Case No. 1:14- cv-00917-JMS-DKL (S.D. Ind., June 4, 2014) is a proposed class and collective actions brought on behalf of all former and current employees of the Defendants, who were not paid overtime premiums and had funds deducted for alleged illegal reasons. Here to There, Inc., is an incorporated business. Joshua Baxter is the president of Here to There, Inc. The Plaintiff is represented by: Ronald E. Weldy, Esq. WELDY & ASSOCIATES 8383 Craig Street, Suite 330 Indianapolis, IN 46250 Telephone: (317) 842-6600 Facsimile: (317) 842-6933 E-mail: weldy@weldylaw.com HIGHER ONE: Executives Among Defendants in Class Action ------------------------------------------------------- Christopher Hoffman, writing for New Haven Register, reports that a class-action lawsuit alleges that Higher One and some of its top executives knowingly misled shareholders about its finances and the legality of its business practices. As a result, shareholders suffered significant financial losses when the company announced May 12 that it faces Federal Reserve penalties so large it could default on a loan, the suit alleges. The revelations caused the company's stock to tumble 14 percent to $5.51 a share, says the action filed by Goldman, Gruber & Woods of Trumbull and Pomerantz LLC of New York. "As a result of the dissemination of the aforementioned false and misleading reports, releases and public statements, the market price of Higher One securities was artificially inflated," the action claims. "In ignorance of the adverse facts concerning Higher One's business and financial condition which were concealed by defendants, plaintiff and the other members of the class purchased or otherwise acquired Higher One securities at artificially inflated prices." In addition to Higher One, the action names as defendants company co-founder and former CEO Mark Volchek, Chief Financial Officer Christopher Wolf and Vice President of Finance Jeffrey Wallace. The suit seeks unspecified damages for hundreds of thousands of Higher One shareholders. Founded in 2000 by three Yale undergraduates, Higher One specializes in distributing financial aid refunds, money left over after a student's fees are paid. Critics say Higher One uses deceptive practices to lure students into signing up for its bank accounts and then charges them abusive fees. The company denies the charges. The lawsuit notes that Higher One twice has settled claims over allegedly illegal practices. In August 2012, it paid $11 million in restitution to 60,000 students and a $110,000 fine to the Federal Deposit Insurance Corp. About 14 months later, it settled six class-action lawsuits for $15 million. In both instances, the company pledged as part of the settlements to cease any improper practices and touted that fact repeatedly in public financial filings, the suit says. But on May 12, Higher One revealed in a financial filing that the Federal Reserve had found the firm's marketing and disclosure practices violate the Federal Trade Commission Act, the lawsuit says. The central bank is proposing fines so severe that they could cause a loan default, the filing said. "Thus, while the company actively touted that it had 'substantially revised (the) compliance management system,' since the 2012 settlement, and had 'agreed to make and/or maintain certain practice changes,' in fact, the company continued its improper marketing and disclosure practices," the lawsuit says. "These practices ultimately placed the company at risk of further sanctions." The company's and the defendants' "wrongful acts and omissions" precipitated a decline in stock value that caused shareholders to suffer "significant losses and damages," the lawsuit reads. Higher One's stock price declined further since the May 12 announcement, closing at $3.68 a share on May 28. IMPERIAL HOLDINGS: Warrants Issued as Part of Fuller Settlement --------------------------------------------------------------- Warrants to purchase two million shares of Imperial Holdings, Inc. stock as part of a settlement in the suit Fuller v. Imperial Holdings et al., were issued into an escrow account in April 2014, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On December 16, 2013, final approval of the settlement to the class action designated Fuller v. Imperial Holdings et al. was granted by the United States District Court for the Southern District of Florida. The terms of the class action settlement included a cash payment of $12.0 million, with $11.0 million contributed by the Company's primary and excess director and officer liability insurance carriers, with such amounts paid during the quarter ended March 31, 2014. The terms of the settlement also include the issuance of warrants to purchase two million shares of the Company's stock. The estimated fair value at March 31, 2014 of such warrants was $5.4 million. The warrants, which were issued into an escrow account in April 2014 will have a five-year term from the date they are distributed to class participants and have an exercise price of $10.75. INFOBLOX INC: Fails to Disclose Heavy Discounting, Suit Claims -------------------------------------------------------------- Safedin Beqaj, Individually and on Behalf of All Others Similarly Situated v. Infoblox Inc., Robert D. Thomas, and Remo E. Canessa, Case No. 3:14-cv-02564 (N.D. Cal., June 4, 2014) alleges that the Defendants made false or misleading statements and failed to disclose that: (1) the Company was discounting heavily to maintain market share; (2) the Company's Federal business prospects were weak and would continue to be weak for the foreseeable future; and (3) the Company was having difficulty closing big-ticket deals that had previously driven revenue growth. Infoblox is a Delaware corporation headquartered in Santa Clara, California. Infoblox provides a broad family of enterprise and service provider-class solutions to automate management of the critical network infrastructure services needed for secure, scalable and fault-tolerant connections between applications, devices and users. The Individual Defendants are directors and officers of the Company. The Plaintiff is represented by: Lionel Z. Glancy, Esq. Michael M. Goldberg, Esq. Robert Vincent Prongay, Esq. GLANCY BINKOW & GOLDBERG LLP 1925 Century Park East, Suite 2100 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 E-mail: lglancy@glancylaw.com mmgoldberg@glancylaw.com rprongay@glancylaw.com - and - Howard G. Smith, Esq. LAW OFFICES OF HOWARD G. SMITH 3070 Bristol Pike, Suite 112 Bensalem, PA 19020 Telephone: (215) 638-4847 Facsimile: (215) 638-4867 E-mail: howardsmith@howardsmithlaw.com INTERCONTINENTALEXCHANGE GROUP: Still Faces Securities Lawsuits --------------------------------------------------------------- Intercontinentalexchange Group, Inc. continues to face the securities lawsuits City of Providence v. BATS Global Markets, Inc. et al., Case No. 14-cv-2811 (S.D.N.Y.), and American European Insurance Company v. BATS Global Markets, Inc. et al., Case No. 14-cv-3133 (S.D.N.Y.), according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. 2 On April 18, 2014, a purported class action lawsuit was filed in the U.S. District Court for the Southern District of New York (the "Southern District") by the City of Providence, Rhode Island, against more than 40 defendants, including "Exchange Defendants", "Brokerage Defendants" and "HFT [High Frequency Trading] Defendants". New York Stock Exchange LLC and NYSE Arca, Inc., two of the company's subsidiaries, are among the named Exchange Defendants. Plaintiff is suing on behalf of a class of "all public investors" who bought or sold stock on a U.S.-based exchange or alternative trading venue from April 18, 2009 to the present. The complaint asserts violations by all Exchange Defendants of Sections 10(b) and 6(b) of the Securities Exchange Act of 1934. The complaint seeks unspecified compensatory damages against all defendants, jointly and severally, as well as various forms of equitable relief. On May 2, 2014, a purported class action lawsuit with similar allegations and legal claims was filed in the Southern District by American European Insurance Company against most of the same entities (including New York Stock Exchange LLC and NYSE Arca, Inc.) named as defendants in the City of Providence lawsuit. Additional information may be obtained from the complaints, which are styled, respectively, as City of Providence v. BATS Global Markets, Inc. et al., Case No. 14-cv-2811 (S.D.N.Y.), and American European Insurance Company v. BATS Global Markets, Inc. et al., Case No. 14-cv-3133 (S.D.N.Y.). JAZZ PHARMACEUTICALS: Still Faces Suit Over Gentium Acquisition --------------------------------------------------------------- Jazz Pharmaceuticals Public Limited Company continues to face a securities suit in the U.S. District Court for the Southern District of New York in connection with the Gentium S.P.A. Acquisition, according to Jazz Pharmaceuticals' May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In January 2014, the company became aware of a purported class action lawsuit filed in the U.S. District Court for the Southern District of New York in connection with the Gentium Acquisition. The lawsuit, captioned Xavion Jyles, Individually and on Behalf of All Others Similarly Situated v. Gentium S.P.A. et al., names Gentium, each of the Gentium's directors, the company and the company's Italian subsidiary as defendants. The lawsuit alleges, among other things, that Gentium's directors breached their fiduciary duties to Gentium's shareholders in connection with the Gentium tender offer agreement that Gentium entered into with the company and the company's Italian subsidiary valuing Gentium ordinary shares and ADSs at $57.00 per share, and that the company and the company's Italian subsidiary violated Sections 14(e) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, by allegedly overseeing Gentium's preparation of an allegedly false and misleading Section 14D-9 Solicitation/Recommendation Statement. The lawsuit seeks, among other relief, class action status, rescission, and unspecified costs, attorneys' fees and other expenses. KERYX BIOPHARMACEUTICALS: Securities Suit in New York Now Closed ---------------------------------------------------------------- The case styled In re Keryx Biopharmaceuticals, Inc. Securities Litigation, Case No. 1:13-CV-0755-KBF in the U.S. District Court for the Southern District of New York is now concluded after plaintiffs did not file an objection to the dismissal of the case, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On February 1, 2013, a lawsuit was filed against the company and the company's chief executive officer on behalf of a putative class of all of the company's shareholders (other than the defendants) who acquired the company's shares between June 1, 2009 and April 1, 2012. Smith v. Keryx Biopharmaceuticals, Inc., et al., Case No. 1:13-CV-0755-TPG (S.D.N.Y.). On February 26, 2013, a substantially similar lawsuit was filed against the company and the company's chief executive officer as well as the company's chief financial officer. Park v. Keryx Biopharmaceuticals, Inc., et al., Case No. 1:13-CV-1307-TPG (S.D.N.Y.). On June 10, 2013, the Court entered an Order consolidating the two lawsuits and appointing a lead plaintiff. The case was styled In re Keryx Biopharmaceuticals, Inc. Securities Litigation, Case No. 1:13-CV- 0755-KBF (S.D.N.Y.). On July 10, 2013, the lead plaintiff filed a Consolidated Amended Complaint that, in substance, repeated the claims alleged in the consolidated lawsuits. The Consolidated Amended Complaint asserted claims against (i) the company for alleged violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder and (ii) the company's chief executive officer for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. The claims in the Consolidated Amended Complaint were premised on general allegations that the company and the individual defendant participated directly or indirectly in the preparation and/or issuance of purportedly false and misleading earnings reports, SEC filings, press releases, and other public statements, which allegedly caused the company's stock to trade at artificially inflated prices. On August 26, 2013, the company filed a motion to dismiss the Consolidated Amended Complaint. On February 14, 2014, the Court entered an Opinion and Order granting the motion to dismiss. The Court entered Judgment for the Defendants on February 24, 2014. The lead plaintiff did not appeal the Judgment and this matter is now concluded. LENDER PROCESSING: 6th Cir. Affirms Dismissal of Foreclosure Suit ----------------------------------------------------------------- Hale Yazicioglu, Esq. -- hyazicioglu@hinshawlaw.com -- at Hinshaw & Culbertson, in an article for Lexology.com, reports that Ohio homeowners who were defendants in judicial foreclosure suits brought a class action against the loan processing companies and law firms who commenced foreclosure actions. Plaintiffs asserted claims under the FDCPA and the Ohio Consumer Sales Practices Act (OCSPA) based on the defendants filing of state court foreclosure actions on behalf of the trustees of securitized trusts. The district court previously dismissed a number of the plaintiffs' claims at the motion to dismiss stage, including several claims under FDCPA. With respect to the one remaining FDCPA claim, the Sixth Circuit concluded that because under Ohio law, possession of either a note or mortgage gives a party standing to foreclose, and because there was no dispute that the foreclosing entity validly held the note, there was no false or misleading statement made when the lender commenced foreclosure proceedings that would give rise to liability under the FDCPA. The Sixth Circuit also affirmed dismissal of the OCSPA claims finding that the defendants were not "suppliers engaged in a consumer transaction" for purposes of establishing liability under the statute. Clark v. Lender Processing Services, --- Fed. Appx. ---, 2014 WL 1408891 (6th Cir. Apr. 14, 2014) LIBERTY MEDIA: Cases Now Moot After Bid to Buy Sirius Dropped ------------------------------------------------------------- Cases over a former proposal of Liberty Media Corporation to acquire the remaining shares of Sirius XM became moot after the withdrawal of the proposal, according to Liberty's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In early to mid-January 2014, a series of stockholder class actions were filed in Delaware and New York state courts against Sirius XM, Liberty, Liberty Radio LLC, and certain present and former Sirius XM board members (Joan L. Amble, Anthony J. Bates, George W. Bodenheimer, David J.A. Flowers, Eddy W. Hartenstein, James P. Holden, Gregory B. Maffei, Evan D. Malone, John C. Malone, James E. Meyer, James F. Mooney, Carl E. Vogel, Vanessa A. Wittman. David Zaslav). In Delaware, the cases are captioned: Roy v. Meyer, et al., Case No. 9248-VCN (Del. Ch.); Ebenau v. Meyer, et al., Case No. 9249-VCN (Del. Ch.); Ricciardi v. Sirius XM Holdings Inc., et al., Case No. 9253-VCN (Del. Ch.); Western Washington Laborers-Employers Pension Trust v. Sirius XM Holdings Inc., et al., Case No. 9269-VCN (Del. Ch.); and Varvolis v. Malone, et al., Case No. 9283-VCN (Del. Ch.). In New York, the cases are captioned: Freedman v. Sirius XM Holdings Inc., et al., Index No. 650038/2014 (N.Y. Sup. Ct.); Adoni v. Amble, et al., Index No. 650085/2014 (N.Y. Sup. Ct.); Goodman v. Amble, et al., Index No. 650141/2014 (N.Y. Sup. Ct.); Hartleib v. Sirius XM Holdings Inc., et al., Index No. 650158/2014 (N.Y. Sup. Ct.); Shenk v. Sirius XM Holdings Inc., et al., Index No. 650188/2014 (N.Y. Sup. Ct.); The Booth Family Trust v. Meyer, et al., Index No. 650235/2014 (N.Y. Sup. Ct.); Corso v. Sirius XM Holdings Inc., et al., Index No. 650253/2014 (N.Y. Sup. Ct.); and Sciortino v. Sirius XM Holdings Inc., et al., Index No. 650268/2014 (N.Y. Sup. Ct.). The cases involved Liberty's former proposal (the "Proposal") to acquire the remaining shares of Sirius XM that it does not already own (which was subsequently withdrawn). The plaintiffs alleged that in pursuing this Proposal, Liberty and the individual director defendants breached their fiduciary duties to the Sirius XM shareholders. On January 13, 2014, a notice of voluntary discontinuance was filed in the Adoni case. On January 27, 2014, a motion for consolidation (of all of the New York cases) and appointment of lead counsel was filed in the Shenk case. On January 31, 2014, defendants filed a cross-motion to dismiss the New York actions, or in the alternative to stay the New York actions, in favor of the substantially similar actions pending in Delaware. On March 13, 2014, before the New York Supreme Court heard oral argument on the pending motion and cross-motion, Liberty issued a press release stating that it had withdrawn the Proposal. In light of this withdrawal, plaintiffs' cases became moot. On April 1, 2014, notices of voluntary discontinuances were filed in the Freedman, Goodman, Hartleib, The Booth Family Trust, Corso, and Sciortino cases. In the Shenk case, a stipulation of voluntary discontinuance was faxed to the court on April 2, 2014, and on April 10, 2014, Judge Lawrence Marks "So Ordered" the stipulation. LONG BEACH, CA: Faces "Ochoa" Suit Alleging Violations of ADA ------------------------------------------------------------- Hector Ochoa, Cynde Soto, Cathy Shimozono, Ben Rockwell, Sharon Parker, on behalf of themselves and all others similarly situated v. City of Long Beach, a public entity; Bob Foster, in his official capacity as Mayor; Robert Garcia, in their official capacities as members of the Long Beach City Council; Suja Lowenthal, in their official capacities as members of the Long Beach City Council; Gary DeLong, in their official capacities as members of the Long Beach City Council; Patrick O'Donnel, in their official capacities as members of the Long Beach City Council; Gerrie Schipske, in their official capacities as members of the Long Beach City Council; Dee Andrews, in their official capacities as members of the Long Beach City Council; James Johnson, in their official capacities as members of the Long Beach City Council; Al Austin, in their official capacities as members of the Long Beach City Council; and Steven Neal, in their official capacities as members of the Long Beach City Council, Case No. 2:14-cv-04307 (C.D. Cal., June 4, 2014) accuses the Defendants of violating the Americans with Disabilities Act. The Plaintiffs are represented by: Richard Brian Diaz, Esq. DISABILITY RIGHTS LEGAL CENTER 800 South Figueroa Street, Suite 1120 Los Angeles, CA 90017 Telephone: (213) 252-7406 Facsimile: (213) 736-1428 E-mail: richard.diaz@lls.edu MALLINCKRODT PUBLIC: Faces Suits Over Plan to Acquire Cadence ------------------------------------------------------------- Mallinckrodt public limited company faces lawsuits in connection with its proposed acquisition of Cadence Pharmaceuticals, Inc., according to Mallinckrodt's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Nine purported class action lawsuits have been filed in February 2014 and March 2014 by purported holders of Cadence common stock in connection with the Company's acquisition of Cadence, six in the Delaware Court of Chancery (consolidated under the caption In re Cadence Pharmaceuticals, Inc. Stockholders Litigation), and three in California State Court, San Diego County (Denny v. Cadence Pharmaceuticals, Inc., et al., Militello v. Cadence Pharmaceuticals, Inc., et al., and Schuon v. Cadence Pharmaceuticals, Inc., et al.). The actions bring claims against, and generally allege that, the board of directors of Cadence breached their fiduciary duties in connection with the acquisition by, among other things, failing to maximize shareholder value, and the Delaware and Schuon actions further allege that Cadence omitted to disclose allegedly material information in its Schedule 14D-9. The lawsuits also allege, among other things, that the Company aided and abetted the purported breaches of fiduciary duty. The lawsuits seek various forms of relief, including but not limited to, rescission of the transaction, damages and attorneys' fees and costs. On March 7, 2014, following expedited discovery, the parties in the consolidated Delaware action entered into a Memorandum of Understanding ("the MOU"), which sets forth the parties' agreement in principle for a settlement of those actions. The settlement contemplated by the MOU will include, among other things, a release of all claims relating to the Company's acquisition of Cadence as set forth in the MOU. MALLINCKRODT PUBLIC: Faces Suits Over Plan to Purchase Questcor --------------------------------------------------------------- Mallinckrodt public limited company faces lawsuits in connection with its proposed acquisition of Questcor Pharmaceuticals, Inc., according to Mallinckrodt's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. Eight purported class action lawsuit were filed in April 2014 in the California State Court, Orange County by purported holders of Questcor Pharmaceuticals, Inc. ("Questcor") common stock in connection with the Company's proposed acquisition of Questcor (Hansen v. Thompson, et al., Heng v. Questcor Pharmaceuticals, Inc., et al., Buck v. Questcor Pharmaceuticals, Inc., et al., Yokem v. Questcor Pharmaceuticals, Inc., et al., Ellerbeck v. Questcor Pharmaceuticals, Inc., et al., Richter v. Questcor Pharmaceuticals, Inc., et al., Tramantano v. Questcor Pharmaceuticals, Inc., et al., and Crippen v. Questcor Pharmaceuticals, Inc., et al.). The actions bring claims against, and generally allege that, the board of directors of Questcor breached their fiduciary duties in connection with the acquisition by, among other things, agreeing to sell Questcor for inadequate consideration and pursuant to an inadequate process. Some of the lawsuits also allege, among other things, that the Company aided and abetted the purported breaches of fiduciary duty. The lawsuits seek various forms of relief, including but not limited to, an order enjoining the shareholder vote relating to the acquisition, rescission of the transaction if consummated, damages and attorneys' fees and costs. In addition, plantiffs in a prior- pending derivative litigation, In re Questcor Pharmaceuticals, Inc. Shareholder Derivative Litigation, pending in the U.S. District Court for the Central District of California, have filed an application to lift the stay of that action in order to file an amended complaint alleging that the board of directors of Questcor breached their fiduciary duties in connect with the acquisition. MERCK & CO: Sued in California Over Coppertone Sunscreen Products ----------------------------------------------------------------- Danika Gisvold, On Behalf of Herself and All Others Similarly Situated v. Merck & Co., Inc., a Delaware corporation, MSD Consumer Care Inc., a Delaware corporation and Merck Sharp & Dohme Corp., a New Jersey corporation, Case No. 3:14-cv-01371-DMS-JLB (S.D. Cal., June 4, 2014), is brought relating to the Defendants' Coppertone sunscreen products. Law360 reports that the lawsuit claims Merck overcharges for its Coppertone sunscreen products with Sun Protection Factors of 55 and above because they have "virtually identical" active ingredients as the Coppertone SPF 50 products. The Plaintiff is represented by: James Richard Patterson, Esq. PATTERSON LAW GROUP, APC 402 West Broadway, 29th Floor San Diego, CA 92101 Telephone: (619) 398-4760 Facsimile: (619) 756-6991 E-mail: jim@pattersonlawgroup.com MICHAEL FOODS: "Tag-along" Cases Over Food Products in Discovery ---------------------------------------------------------------- Discovery is underway in "tag-along" cases against Michael Foods, Inc. over alleged violations of federal and state antitrust laws in connection with the production and sale of shell eggs and egg products, according to Michael Foods Group, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. In late 2008 and early 2009, some 22 class-action lawsuits were filed in various federal courts against Michael Foods, Inc. and approximately 20 other defendants (producers of shell eggs, manufacturers of processed egg products, and egg industry organizations), alleging violations of federal and state antitrust laws in connection with the production and sale of shell eggs and egg products, and seeking unspecified damages. Plaintiffs seek to represent nationwide classes of direct and indirect purchasers, and allege that defendants conspired to reduce the supply of eggs by participating in animal husbandry, egg-export and other programs of various egg-industry associations. In December 2008, the Judicial Panel on Multidistrict Litigation ordered the transfer of all cases to the Eastern District of Pennsylvania for coordinated and/or consolidated pretrial proceedings. Between late 2010 and early 2012, a number of companies, each of which would be part of the purported class in the antitrust action, brought separate actions against defendants. These "tag-along" cases, brought primarily by various grocery chains and food companies, assert essentially the same allegations as in the main action. All but one of the tag-along cases were either filed in or transferred to the Eastern District of Pennsylvania where they are being treated as related to the main action; discovery is underway in these matters. The one tag-along case where pretrial proceedings are not under the jurisdiction of the Eastern District of Pennsylvania was brought by a retail grocery chain in Kansas state court under Kansas law. Claims against Michael Foods in that particular matter were resolved through a confidential settlement agreement on April 11, 20 The company received a Civil Investigative Demand ("CID") issued by the Florida Attorney General on November 17, 2008, regarding an investigation of possible anticompetitive activities "relating to the production and sale of eggs or egg products." The CID requested information and documents related to the pricing and supply of shell eggs and egg products, as well as the company's participation in various programs of United Egg Producers. The company fully cooperated with the Florida Attorney General's Office to date. Further compliance is suspended pending discovery in the civil antitrust litigation. MUNI: Judge Certifies Drivers' Minimum Wage Class Action -------------------------------------------------------- Joe Eskenazi, writing for SFWeekly, reports that a U.S. District Court judge certified some 2,500 drivers -- every man and woman who has slipped behind the wheel of a bus, train, trolley, or cable car since July 2009 -- as a class in a federal suit against Muni. And, like Muni, that suit is moving forward with extreme slowness -- and may cost the city an arm and a leg. Judge Yvonne Gonzalez Rogers affirmed the drivers have "provided substantial evidence" they've been stiffed in the myriad ways they claim Muni is stiffing them. These include interludes spent performing post-driving inspections; travels from one bus or train to another when switching runs; and time expended wandering from the final bus or train run of the day to their personal vehicles. Muni, the drivers claim, pays them based upon "a predetermined amount of driving time," yet "has a practice of designing its routes in a manner that makes it impossible for Operators to stay on schedule." Management demurred, stating operators' experiences are varied -- and, in nonlegal jargon, their own damn fault; a driver who failed to submit overtime cards due to "laziness" was prominently cited. "The Court finds Defendant's arguments unavailing," wrote the judge. The plaintiffs accuse Muni -- and the city -- of failing to adhere to the Minimum Wage Ordinance en masse, since July 16, 2009, for the class of 2,500 workers. While yes, Muni drivers are paid significantly more than minimum wage, this claim is based upon the notion that Muni failed to compensate its drivers for the aforementioned time periods. The city, incidentally, claims that, per the city's Minimum Wage Ordinance, "the City . . . is not an 'employer' as that term is defined." There's a lot of money riding on this determination. Multiply the $50 daily penalty for violating the Minimum Wage Ordinance by five years worth of days and 2,500 workers. The total: $228 million. That's a lot of cash. And a lot of leverage, if a settlement is in the offing. Muni spokesman Paul Rose declined to comment, deferring to the City Attorney's Office -- which declined to comment. So did plaintiffs' attorney Steve Tidrick. The warring parties are next scheduled to meet on Aug. 8. If Mr. Tidrick is right, by that time, the city will owe his clients roughly $10 million more. NELNET INC: Settlement Process Ongoing in Suit v. Peterson's ------------------------------------------------------------ Peterson's Nelnet, LLC, a subsidiary of Nelnet, Inc., is in the process of settling a lawsuit filed by Bais Yaakov of Spring Valley in the U.S. Federal District Court for the District of New Jersey, alleging that Peterson sent unsolicited advertising faxes, according to Nelnet, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On January 4, 2011, a complaint against Peterson's Nelnet, LLC ("Peterson's"), a subsidiary of Nelnet, Inc. ("Nelnet"), was filed in the U.S. Federal District Court for the District of New Jersey (the "New Jersey District Court"). The complaint alleges that Peterson's sent six advertising faxes to the named plaintiff in 2008-2009 that were not the result of express invitation or permission granted by the plaintiff and did not include certain opt out language. The complaint also alleges that such faxes violated the Federal Telephone Consumer Protection Act (the "TCPA"), purportedly entitling the plaintiff to $500 per violation, trebled for willful violations for each of the six faxes. The complaint further alleges that Peterson's had sent putative class members more than 10,000 faxes that violated the TCPA, amounting to more than $5 million in statutory penalty damages and more than $15 million if trebled for willful violations. The complaint seeks to establish a class action. On September 13, 2013, the named plaintiff filed a motion for class certification, and on October 7, 2013, Peterson's filed a motion to dismiss the named plaintiff's motion for class certification. As of the filing date of this report, the New Jersey District Court has not established, recognized, or certified a class. On January 23, 2014, Peterson's and the named plaintiff reached an agreement in principle whereby Peterson's would, without admitting any wrongdoing or liability, settle all claims in the lawsuit, including potential class action claims, for payment of an immaterial amount. The settlement agreement in principle is subject to finalization and court approval. NELNET INC: Settling "Than Zaw" Suit Over Unlawful Phone Calls -------------------------------------------------------------- Nelnet, Inc. is in the process of settling a complaint claiming that it violated Section 632 of the California Penal Code by allegedly recording one or more telephone calls to the plaintiff without the plaintiff's consent, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On January 18, 2013, a Third Amended Complaint was served on Nelnet in connection with a lawsuit by Than Zaw against Nelnet (erroneously referred to in the lawsuit as Nelnet Business Solutions, Inc.) in the Superior Court of the State of California, Contra Costa County (the "California State Court"). The lawsuit was originally instituted on December 30, 2010, and alleges that Nelnet violated the California Fair Debt Collection Practices Act in its interactions with the plaintiff, a California resident. The plaintiff's Third Amended Complaint added additional allegations claiming that Nelnet violated Section 632 of the California Penal Code by allegedly recording one or more telephone calls to the plaintiff without the plaintiff's consent, and sought $5,000 in statutory damages per alleged violation. The Third Amended Complaint further alleged that Nelnet improperly recorded telephone calls to other California residents without such persons' consent, and sought to establish a class action with respect to the California Section 632 claim. As of the filing date of this report, the California State Court has not established, recognized, or certified a class. On October 16, 2013, Nelnet and the named plaintiff reached an agreement in principle whereby Nelnet would, without admitting any wrongdoing or liability, settle all claims in the lawsuit, including potential class action claims, for payment of an immaterial amount. The settlement agreement in principle is subject to finalization and court approval. NELNET INC: No Class Yet in "Keating" Suit Over Spam Text --------------------------------------------------------- The U.S. Federal District Court for the Northern District of Ohio has not established, recognized, or certified a class in a suit filed by Grant Keating against Nelnet, Inc., alleging it sent unsolicited advertising text message to plaintiffs, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On August 6, 2012, an Amended Complaint was served on Peterson's, CUnet, LLC ("CUnet"), a subsidiary of Nelnet, and on Nelnet (collectively, the "Keating Defendants"), in connection with a lawsuit by Grant Keating in the U.S. Federal District Court for the Northern District of Ohio (the "Ohio District Court"). The lawsuit was originally instituted on August 24, 2011, and alleges that the Keating Defendants sent an advertising text message to the named plaintiff in June 2011 using an automatic telephone dialing system, and without the plaintiff's express consent. The complaint also alleges that this text message violated the TCPA, purportedly entitling the plaintiff to $500, trebled for a willful violation. The complaint further alleges that the Keating Defendants sent putative class members similar text messages using an automatic telephone dialing system, without such purported class members' consent. The complaint seeks to establish a class action. On August 29, 2013, the Keating Defendants filed motions for summary judgment, and the named plaintiff filed a motion for class certification. As of the filing date of this report, the Ohio District Court has not established, recognized, or certified a class. NTS REALTY: Suits by Ky. & Delaware Unitholders Settled, Junked --------------------------------------------------------------- The lawsuits In re NTS Realty Holdings Limited Partnership Unitholders Litigation, Consol. C.A. No. 8302-VCP in the Delaware Court of Chancery and Stephen J. Dannis, et al. v. J.D. Nichols, et al., Case No. 13-CI-00452 in Jefferson County Circuit Court of the Commonwealth of Kentucky are now settled and dismissed, according to NTS Realty's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. On February 4, 2014, NTS Realty Holdings Limited Partnership, together with the other defendants in a class action lawsuit, entered into a Stipulation and Agreement of Compromise, Settlement and Release (the "Settlement Agreement") with the plaintiffs in the class action (the "Kentucky Action") captioned, Stephen J. Dannis, et al. v. J.D. Nichols, et al., Case No. 13-CI-00452, which was pending in Jefferson County Circuit Court of the Commonwealth of Kentucky against the Company, NTS Realty Capital, Inc., the company's managing general partner, each of the members of the board of directors of Realty Capital, NTS Realty Partners, LLC and NTS Merger Parent, LLC. The Settlement Agreement provides for the full and complete compromise, settlement, release and dismissal of the Kentucky Action as well as the class action lawsuit pending in the Delaware Court of Chancery under the consolidated case caption of In re NTS Realty Holdings Limited Partnership Unitholders Litigation, Consol. C.A. No. 8302-VCP (the "Delaware Action" and with the Kentucky Action, the "Actions"). Also, as previously disclosed, in accordance with the terms of the Settlement Agreement, on April 24, 2014, the court in the Kentucky Action entered an Order and Final Judgment, pursuant to which, among other things, all actions asserted against the defendants in the Kentucky Action were dismissed with prejudice. The Settlement Agreement provides that, after entry of the Order and Final Judgment in the Kentucky Action, the parties to the Settlement Agreement will file a stipulation and order dismissing the Delaware Action with prejudice. On May 5, 2014 the stipulation and order dismissing the Delaware Action was filed with the court, and on May 6, 2014, the court in the Delaware Action entered an order dismissing, with prejudice, all actions asserted against the defendants in the Delaware Action. Generally, if there are no appeals filed to the orders dismissing the respective Actions, then each respective order will become final and no longer be subject to appeal after expiration of 30 days following the date of entry of such order. On May 8, 2014, the company issued a press release announcing the Delaware court's dismissal of the Delaware Action. OCLARO INC: No Trial Set for "Westley" Securities Suit in Calif. ---------------------------------------------------------------- Discovery has commenced, and no trial has been scheduled in the securities action Westley v. Oclaro, Inc., No. 11 Civ. 2448 EMC in the United States District Court for the Northern District of California, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. On May 19, 2011, Curtis and Charlotte Westley filed a purported class action complaint in the United States District Court for the Northern District of California, against the company and certain of the company's officers and directors. The Court subsequently appointed the Connecticut Laborers' Pension Fund ("Pension Fund") as lead plaintiff for the putative class. On April 26, 2012, the Pension Fund filed a second amended complaint, captioned as Westley v. Oclaro, Inc., No. 11 Civ. 2448 EMC, allegedly on behalf of persons who purchased the company's common stock between May 6 and October 28, 2010, alleging that the company and certain of the company's officers and directors issued materially false and misleading statements during this time period regarding the company's current business and financial condition, including projections for demand for the company's products, as well as the company's revenues, earnings, and gross margins, for the first quarter of fiscal year 2011 as well as the full fiscal year. The complaint alleges violations of section 10(b) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b-5, as well as section 20(a) of the Securities Exchange Act. The complaint seeks damages and costs of an unspecified amount. On September 21, 2012, the Court dismissed the second amended complaint with leave to amend. After the Pension Fund moved for reconsideration, on January 10, 2013, the Court allowed plaintiffs to take discovery regarding statements made in May and June 2010. On March 1, 2013 the Pension Fund filed a third amended complaint, attempting to cure pleading deficiencies with regard to statements allegedly made in July and August 2010. On April 1, 2013, defendants moved to dismiss the third amended complaint with respect to the statements made in July and August 2010. On May 30, 2013, the Court granted Defendants' motion to dismiss the complaint's claims based on statements made in July and August 2010. Discovery has commenced, and no trial has been scheduled in this action. PADBURY MINING: Investors Mull Class Suit Over Oakajee Agreement ---------------------------------------------------------------- Andrew Burrell, writing for The Australian, reports that investors who bought shares in Padbury Mining after it announced a AU$6.5 billion funding agreement in April to build the Oakajee port and rail project are close to launching a class action against the company and its directors for allegedly misleading the market. The disgruntled Padbury shareholders -- who watched in horror as the share price plummeted when the deal later collapsed -- are expecting to sign a costs agreement on May 29 with Melbourne law firm Lander & Rogers. The likely litigation follows a string of major class actions brought against other listed companies -- including Leighton Holdings, Treasury Wine Estates and WorleyParsons -- over their disclosure practices. The Padbury shareholder who has helped organize the potential legal action told The Australian last night so far he had signed up about 50 angry investors, whose losses ranged from AU$5000 to AU$80,000. He said the case might be run by a specialist litigation funder. "It's not just about the money, it's about the reputation of the market which is being manipulated day in and day out," said the shareholder, who asked not to be named. "Someone's head needs go on the chopping block over this." When asked why he invested heavily in Padbury on the back of its announcement, the shareholder said he believed that the company had raised AU$6.5 billion to build Oakajee as it had claimed. Lander & Rogers commercial disputes partner Greg McKenzie confirmed he was in talks with the Padbury shareholders. "Lander & Rogers has been requested to advise a group of investors on the prospects of bringing a claim -- possibly a class action -- against Padbury and its directors," he said. Padbury was forced to abandon its plan to revive the Oakajee project in Western Australia after it was unable to substantiate its claim that it had "secured" 100% of the equity needed to build the infrastructure. The junior told the Australian Securities Exchange on April 11 it had raised the money through an agreement with an unnamed entity, later revealed to be companies linked to Sydney entrepreneur Roland Frank Bleyer. Padbury's share price soared as much as 170% on April 11, with about 200 million shares changing hands before trading was halted. The announcement sparked scrutiny of Mr. Bleyer's past business dealings amid revelations of a string of failed business deals as well as civil and criminal cases brought against him in the US. When trading resumed late in April, the share price fell 85% on the day. In response to a string of queries from the ASX, Padbury admitted it should have told investors on April 11 that it was required to procure a bank to issue a demand guarantee in relation to 20 per cent of the AUD6.5 billion funding package to build Oakajee. The company also admitted that its April 11 announcement was not reviewed by external legal counsel. Padbury is also facing an investigation by the Australian Securities & Investments Commission into whether it misled the market over its botched funding deal. PEOPLES HOME: Did Not Properly Pay Overtime to LPNs, Nurse Claims ----------------------------------------------------------------- Joyce Evans v. Peoples Home Health, LLC, Edward P. Stone and Timothy Buttell, Case No. 3:14-cv-00254-RS-CJK (N.D. Fla., June 4, 2014) alleges that as a licensed practical nurse, the Plaintiff worked in excess of 40 hours per week for the Defendants, but was not properly paid for all hours worked in excess of 40 hours per week. Peoples Home Health, LLC, is a Florida for Profit Corporation and transacts business in the state of Florida, including Escambia County, Florida. The Individual Defendants are owners, officers or managers of the Company. The Defendants operate Peoples Home Health facilities in various locations in the state of Florida. The Plaintiff is represented by: Jeremiah J. Talbott, Esq. LAW OFFICES OF J.J. TALBOTT, P.A. 900 East Moreno Street Pensacola, FL 32503 Telephone: (850) 437-9600 Facsimile: (850) 437-0906 E-mail: jjtalbott@talbottlawfirm.com PEOPLES TRUST: Faces Class Action Over Illegal Credit Card Fees --------------------------------------------------------------- Goldblatt Mitchell disclosed that a proposed class action was delivered May 26 2014, against Peoples Trust Company and Peoples Card Services LLP on behalf of a class of consumers in Ontario. The Statement of Claim (which has not been proven in Court) alleges that the defendants breached the Ontario Consumer Protection Act by extracting unauthorized and illegal fees from prepaid credit cards they sold. The claim seeks damages of $100,000,000.00. A copy of the Statement of Claim can be found at www.prepaidcreditclassaction.com The lead plaintiff is Joyce Bernstein, who in September, 2010 obtained a prepaid visa card branded with the name "Vanilla Prepaid Visa". The Vanilla Prepaid Visa card, which the defendants issued, stated on it that it was "valid thru to 04/14". In September, 2013, and despite never having used her card, Ms. Bernstein learned that all the amounts on her card had been seized by Peoples. Ms. Bernstein alleges, on behalf of the class, that Peoples' seizure of funds from prepaid credit cards was illegal, and impermissible under the Ontario Consumer Protection Act. The claim alleges that the defendants' prepaid credit cards were governed by the Ontario Consumer Protection Act, which set out when certain fees could be charged against the cards, and the permissible amounts. The claim alleges that the charges levied against the Peoples prepaid credit cards were not permissible under the Consumer Protection Act. Ms. Bernstein is represented by Jordan Goldblatt and Christine Davies -- cdavies@sgmlaw.com -- of Sack Goldblatt Mitchell LLP and Louis Sokolov -- lsokolov@sotosllp.com -- of Sotos LLP. Sack Goldblatt Mitchell LLP and Sotos LLP are currently co-counsel in a $100,000,000.00 class action against Bell Mobility Inc. alleging that expiry dates on its pre-paid wireless services are illegal. "We believe that people in Ontario are entitled to be treated fairly and transparently in all their consumer transactions," said Mr. Goldblatt. "The Consumer Protection Act exists to prevent companies from engaging in 'unfair business practices' that harm their customers," said Mr. Sokolov. "We are asking the Court to decide whether the systemic practice of seizing money from prepaid credit cards is unlawful. If it is, then the practice must stop and the money must be returned." Information on this action, and for prospective class members is available at www.prepaidcreditclassaction.com PETROLOGISTICS LP: Faces "Basaraba" Merger-Related Suit in Texas ---------------------------------------------------------------- Gloria Basaraba, On Behalf of Herself and All Others Similarly Situated v. Petrologistics LP, Petrologistics GP LLC, Propylene Holdings LLC, Jaime Buehl-Reichard, Alan E. Goldberg, Lance L. Hirt, Zalmie Jacobs, Phillip D. Kramer, Robert D. Lindsay, David Lumpkins, Nathan L. Ticatch, John B. Walker, Andrew S. Weinberg, Hallie A. Vanderhider, Flint Hills Resources, LLC, and FHR Propylene LLC, Case No. 4:14-cv-01558 (S.D. Tex., June 4, 2014) arises from Flint Hill's proposed acquisition of all the outstanding common units of PetroLogistics. Headquartered in Houston, Texas, PetroLogistics is a major producer of propylene and is the only independent dedicated propylene producer in the United States. PetroLogistics owns and operates the world's largest propane dehydrogenation facility, based on production capacity, located in the vicinity of the Houston Ship Channel. The Individual Defendants are directors and officers of the Company. Flint Hills is a Delaware limited liability company headquartered in Wichita, Kansas, and is a subsidiary of Koch Industries, Inc. Flint Hills is an independent refining, chemicals and biofuels company. Flint Hills' petrochemicals are used to manufacture goods from plastics to building products to packaging materials. FHR Propylene LLC is a Delaware limited liability company, wholly owned by Flint Hills, and was created for the purposes of effectuating the Proposed Transaction. The Plaintiff is represented by: Thomas E. Bilek, Esq. THE BILEK LAW FIRM, L.L.P. 700 Louisiana, Suite 3950 Houston, TX 77002 Telephone: (713) 227-7720 Facsimile: (713) 227-9404 E-mail: tbilek@bileklaw.com - and - Juan E. Monteverde, Esq. FARUQI & FARUQI, LLP 369 Lexington Avenue, 10th Floor New York, NY 10017 Telephone: (212) 983-9330 Facsimile: (212) 983-9331 E-mail: jmonteverde@faruqilaw.com PORTFOLIO RECOVERY: Files Motion to Stay Consolidated TCPA Suit --------------------------------------------------------------- Portfolio Recovery Associates, Inc. filed a motion to stay the suit In re Portfolio Recovery Associates, LLC Telephone Consumer Protection Act Litigation, case No. 11-md-02295, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. The Company has been named as defendant in a number of putative class action cases, each alleging that the Company violated the Telephone Consumer Protection Act ("TCPA") by calling consumers' cellular telephones without their prior express consent. On December 21, 2011, the United States Judicial Panel on Multi- District Litigation entered an order transferring these matters into one consolidated proceeding in the United States District Court for the Southern District of California. On November 14, 2012, the putative class plaintiffs filed their amended consolidated complaint in the matter, now styled as In re Portfolio Recovery Associates, LLC Telephone Consumer Protection Act Litigation, case No. 11-md-02295 (the "MDL action"). The Company has filed a motion to stay this litigation until such time as the Federal Communications Commission has ruled on various petitions concerning the TCPA. PROSPECT CAPITAL: Block & Leviton Files Securities Class Action --------------------------------------------------------------- Block & Leviton LLP on May 28 disclosed that it has filed a class action lawsuit against Prospect Capital Corporation and certain of its officers. The lawsuit, captioned Willey v. Prospect Capital Corporation et al., No. 14 CV 3796,is pending in the United States District Court for the Southern District of New York. The lawsuit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, on behalf of investors who purchased or otherwise acquired Prospect's securities during the period September 14, 2009, through May 6, 2014, inclusive. The complaint asserts that Prospect, through its officers and directors, made false and misleading statements and omissions regarding the Company's internal financial controls and its accounting for certain of its subsidiaries and the consolidation of those subsidiaries. These statements are alleged to have been false and misleading when made because: (i) the Company was suffering from grossly deficient internal controls and therefore was susceptible to accounting fraud; (ii) Defendants failed to disclose the true nature of the accounting irregularities regarding the accounting for its subsidiaries; and (iii) the Company's financial statements during the Class Period were inaccurate in numerous material respects. The improper accounting has been the subject of an SEC inquiry, and was done in violation of SEC policies. If you are a member of the Class, you may, no later than July 28, 2014, request that the court appoint you as Lead Plaintiff for the Class. You may contact the attorneys at Block & Leviton to discuss your rights in the case. You may also retain counsel of your choice and you need not take any action at this time to be a class member. If you have any questions regarding your rights related to this action or have information relevant to the claims asserted in the complaint, please contact attorney Steven P. Harte of Block & Leviton, LLP at (617) 398-5600 or email him at steven@blockesq.com PRUDENTIAL FINANCIAL: Court Mulls Damage Award in Veterans Suit --------------------------------------------------------------- The United States District Court for the District of Massachusetts is dealing with the issue of whether nominal damages should be awarded and whether any equitable relief should be granted in In re Prudential Insurance Company of America SGLI/VGLI Contract Litigation, according to Prudential Financial, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. From July 2010 to December 2010, four purported nationwide class actions were filed challenging the use of retained asset accounts to settle death benefit claims of beneficiaries of a group life insurance contract owned by the United States Department of Veterans Affairs that covers the lives of members and veterans of the U.S. armed forces. In 2011, the cases were consolidated in the United States District Court for the District of Massachusetts by the Judicial Panel for Multi-District Litigation as In re Prudential Insurance Company of America SGLI/VGLI Contract Litigation. The consolidated complaint alleges that the use of the retained assets accounts that earn interest and are available to be withdrawn by the beneficiary, in whole or in part, at any time, to settle death benefit claims is in violation of federal law, and asserts claims of breach of contract, breaches of fiduciary duty and the duty of good faith and fair dealing, fraud and unjust enrichment and seeks compensatory and punitive damages, disgorgement of profits, equitable relief and pre and post- judgment interest. In March 2011, the motion to dismiss was denied. In January 2012, plaintiffs filed a motion to certify the class. In August 2012, the court denied plaintiffs' class certification motion without prejudice pending the filing of summary judgment motions on the issue of whether plaintiffs sustained an actual injury. In October 2012, the parties filed motions for summary judgment. In November 2013, the Court issued a Memorandum and Order stating that the named plaintiffs: (1) did not suffer a cognizable legal injury; (2) are not entitled to any damages based on allegations of delay in payment of benefits; and (3) are not entitled to disgorgement of profits as a remedy. The Court ordered further briefing on whether nominal damages should be awarded and whether any equitable relief should be granted. In February 2014, the parties filed briefs on the issues addressed in the Court's order. PRUDENTIAL FINANCE: "Huffman" Suit by Beneficiaries Stayed ---------------------------------------------------------- The United States District Court for the Eastern District of Pennsylvania stayed the case Huffman v. The Prudential Insurance Company pending the outcome of a case involving another insurer that is before the Third Circuit Court of Appeals, according to Prudential Financial, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. In September 2010, Huffman v. The Prudential Insurance Company, a purported nationwide class action brought on behalf of beneficiaries of group life insurance contracts owned by ERISA- governed employee welfare benefit plans was filed in the United States District Court for the Eastern District of Pennsylvania, challenging the use of retained asset accounts in employee welfare benefit plans to settle death benefit claims as a violation of ERISA and seeking injunctive relief and disgorgement of profits. In July 2011, the Company's motion for judgment on the pleadings was denied. In February 2012, plaintiffs filed a motion to certify the class. In April 2012, the Court stayed the case pending the outcome of a case involving another insurer that is before the Third Circuit Court of Appeals. PRUDENTIAL FINANCIAL: Loses Bid to Dismiss Retirees' Suit in N.J. ----------------------------------------------------------------- The United States District Court for the District of New Jersey denied Prudential Financial, Inc.'s motion to dismiss the suit City of Sterling Heights General Employees' Retirement System v. Prudential Financial, Inc., et al., according to Prudential Financial, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. In August 2012, a purported class action lawsuit, City of Sterling Heights General Employees' Retirement System v. Prudential Financial, Inc., et al., was filed in the United States District Court for the District of New Jersey, alleging violations of federal securities law. The complaint names as defendants the Company's Chief Executive Officer, the Chief Financial Officer, the Principal Accounting Officer and certain members of the Company's Board of Directors. The complaint alleges that knowingly false and misleading statements were made regarding the Company's current and future financial condition based on, among other things, the alleged failure to disclose: (i) potential liability for benefits that should either have been paid to policyholders or their beneficiaries, or escheated to applicable states; and (ii) the extent of the Company's exposure for alleged state and federal law violations concerning the settlement of claims and the escheatment of unclaimed property. The complaint seeks an undetermined amount of damages, interest, attorneys' fees and costs. In May 2013, the complaint was amended to add three additional putative institutional investors as lead plaintiffs: National Shopmen Pension Fund, The Heavy & General Laborers' Locals 472 & 172 Pension & Annuity Funds, and Roofers Local No. 149 Pension Fund. In June 2013, the Company moved to dismiss the amended complaint. In February 2014, the Court denied the Company's motion to dismiss. PRUDENTIAL FINANCIAL: Agents File New Certification Motion ---------------------------------------------------------- A renewed motion for class certification is filed in a consolidated lawsuit claiming that Prudential Financial, Inc. failed to pay overtime to insurance agents, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. In October 2006, a purported class action lawsuit, Bouder v. Prudential Financial, Inc. and Prudential Insurance Company of America, was filed in the United States District Court for the District of New Jersey, claiming that Prudential failed to pay overtime to insurance agents in violation of federal and Pennsylvania law, and that improper deductions were made from these agents' wages in violation of state law. The complaint sought back overtime pay and statutory damages, recovery of improper deductions, interest, and attorneys' fees. In March 2008, the court conditionally certified a nationwide class on the federal overtime claim. Separately, in March 2008, a purported nationwide class action lawsuit was filed in the United States District Court for the Southern District of California, Wang v. Prudential Financial, Inc. and Prudential Insurance, claiming that the Company failed to pay its agents overtime and provide other benefits in violation of California and federal law and seeking compensatory and punitive damages in unspecified amounts. In September 2008, Wang was transferred to the United States District Court for the District of New Jersey and consolidated with the Bouder matter. Subsequent amendments to the complaint resulted in additional allegations involving purported violations of an additional nine states' overtime and wage payment laws. In February 2010, Prudential moved to decertify the federal overtime class that had been conditionally certified in March 2008 and moved for summary judgment on the federal overtime claims of the named plaintiffs. In July 2010, plaintiffs filed a motion for class certification of the state law claims. In August 2010, the district court granted Prudential's motion for summary judgment, dismissing the federal overtime claims. In January 2013, the Court denied plaintiffs' motion for class certification in its entirety. In July 2013, the Court granted plaintiffs' motion for reconsideration, permitting plaintiffs to file a motion to certify a class of employee insurance agents seeking recovery under state wage and hour laws. In September 2013, plaintiffs filed a renewed motion for class certification. QC HOLDINGS: Review on Dismissal of N.C. Payday Loans Suit Mulled ----------------------------------------------------------------- QC Holdings, Inc. will know by mid-2014 if the Supreme Court will review the dismissal of a case connected to its origination of payday loans in North Carolina, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. On February 8, 2005, the Company, two of its subsidiaries, including its subsidiary doing business in North Carolina, and Mr. Don Early, the Company's Chairman of the Board, were sued in Superior Court of New Hanover County, North Carolina in a putative class action lawsuit filed by James B. Torrence, Sr. and Ben Hubert Cline, who were customers of a Delaware state-chartered bank for whom the Company provided certain services in connection with the bank's origination of payday loans in North Carolina, prior to the closing of the Company's North Carolina branches in fourth quarter 2005. The lawsuit alleges that the Company violated various North Carolina laws, including the North Carolina Consumer Finance Act, the North Carolina Check Cashers Act, the North Carolina Loan Brokers Act, the state unfair trade practices statute and the state usury statute, in connection with payday loans made by the bank to the two plaintiffs through the Company's retail locations in North Carolina. The lawsuit alleges that the Company made the payday loans to the plaintiffs in violation of various state statutes, and that if the Company is not viewed as the "actual lenders or makers" of the payday loans, its services to the bank that made the loans violated various North Carolina statutes. Plaintiffs are seeking certification as a class, unspecified monetary damages, and treble damages and attorney fees under specified North Carolina statutes. Plaintiffs have not sued the bank in this matter and have specifically stated in the complaint that plaintiffs do not challenge the right of out-of- state banks to enter into loans with North Carolina residents at such rates as the bank's home state may permit, all as authorized by North Carolina and federal law. In July 2011, the parties completed a weeklong hearing on the Company's motion to enforce its class action waiver provision and its arbitration provision. In January 2012, the trial court denied the Company's motion to enforce its class action and arbitration provisions. The Company has appealed that ruling to the North Carolina Court of Appeals. On February 4, 2014, the Court of Appeals ruled that the trial court erred, and ordered the trial court to dismiss the lawsuit and that the parties proceed to arbitration. It is now expected that plaintiffs will seek review of this decision by the North Carolina Supreme Court. That review is discretionary, however, so there is a possibility that the Supreme Court will refuse review. It is expected that the Company will know if the Supreme Court will review the case by mid-2014. If the Supreme Court accepts review, the parties will file briefs and argue the matter before the Supreme Court. That would likely result in an issued decision from the Supreme Court no earlier than mid-2015. There were three similar purported class action lawsuits filed in North Carolina against three other companies unrelated to the Company. The plaintiffs in those three cases were represented by the same law firms as the plaintiffs in the case filed against the Company. Settlements in each of the three companion cases were reached by the end of 2010; however, the settlements do not provide reasonable guidance on settlements in the Company's case, especially in light of the favorable decision by North Carolina Court of Appeals on the Company arbitration clause. QC HOLDINGS: Direct Credit Enters Accord in Suit Over Interest -------------------------------------------------------------- An oral settlement was reached in a suit filed by a Canadian resident against Direct Credit over interest charges on loans, according to QC Holdings, Inc.'s May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. On September 30, 2011, the Company acquired all the outstanding shares of Direct Credit, a British Columbia company engaged in short-term, consumer Internet lending in certain Canadian provinces. On October 18, 2011, Matthew Lee, an alleged Alberta, Canada resident sued Direct Credit, all of its subsidiaries and three former directors of those subsidiaries in the Supreme Court of British Columbia in a purported class action. The plaintiff alleges that Direct Credit and its subsidiaries violated Canada's criminal usury laws by charging interest on its loans at rates higher than 60%. The plaintiff purports to represent all Canadian borrowers of the subsidiary who resided outside of British Columbia. Plaintiff sought (i) class certification for the class described, (ii) a declaration that loan fees collected in excess of the 60% limit in the cited usury statute are held by the defendants in constructive trust for the benefit of the class members, (iii) an accounting and restitution to plaintiff and class members of all loan fees received by the defendants, (iv) a declaration that the collection of the loan fees in excess of 60% per annum constitutes an unconscionable trade act or practice under the Canadian Business Practices Consumer Protection Act, (v) an order to restore to the class members the loan fees collected by defendants in excess of 60% per annum, and (vi) interest thereon. On March 19, 2014, the Supreme Court of British Columbia entered a judgment regarding certain procedural matters relating to the class action, including (i) a formal rule certifying the class (which Direct Credit had not opposed), (ii) setting a 10-year statute of limitation period for the covered claims from the date the complaint was filed on October 18, 2011, (iii) setting end dates for the class period, which varies from province and territory, (iv) providing that all class members that entered into loan agreements on or after June 20, 2009 will be class members unless they opt out of the class, (v) proving that all other class members must opt into the class within three months after the notice of class certification is issued, and (vi) certain related matters. The parties have reached an oral settlement of this matter, subject to negotiation and execution of a written settlement agreement and receipt of required court approval of the settlement terms. The Company's share of the proposed settlement amount and ancillary expenses, net of indemnification from the prior owners of Direct Credit, is expected to be approximately $500,000. The Company has reserved in the accompanying financial statements the estimated gross liability for settling this litigation or the agreed upon terms and recorded an indemnification asset due from the prior owners. QC HOLDINGS: Briefing in TCPA Violation Suit Expected in Q2 ----------------------------------------------------------- Class briefing was expected to be conducted in the second quarter of 2014 in a suit alleging that QC Holdings, Inc. violated the Telephone Consumer Protection Act by using an "artificial or prerecorded voice," according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. On August 13, 2012, the Company was sued in the United States District Court for the South District of California in a putative class action lawsuit filed by Paul Stemple. Mr. Stemple alleges that the Company used an automatic telephone dialing system with an "artificial or prerecorded voice" in violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, et seq. The complaint does not identify any other members of the proposed class, nor how many members may be in the proposed class. This matter is in the early stages of litigation. The Company has filed an answer denying all claims. It is expected that class briefing will occur in the second quarter of 2014. RITE AID: Faces Class Action in Calif. Over Spam Text Messages -------------------------------------------------------------- Legal Newsline reports that a class action lawsuit has been filed against Rite Aid alleging the company sent repeated spam text messages about a prescription alert service to cell phones in violation of the Telephone Consumer Protection Act. The complaint alleges in February 2013, Rite Aid began sending texts to the cell phone of Clinton Rooney, a resident of San Diego, inviting him to subscribe to the company's prescription alerts. Mr. Rooney claims Rite Aid continued sending messages despite repeated requests to stop, according to a complaint filed May 20 in the U.S. District Court for the Southern District of California. "To begin with, many people do not realize that spam text messages, which are regulated by the federal TCPA, are a cheap, easy-to-use method for companies to market to consumers," said Robert L. Hyde, an attorney for the plaintiff. "Because of this, businesses are very tempted to abuse this medium." Mr. Hyde said spam text messaging is in its infancy. "If these text messages are not addressed, they will become the same problem tomorrow that spam e-mail messaging has become today," Mr. Hyde said. "The TCPA requires prior express consent to receive these messages. However, many businesses, like Rite Aid, view text messaging as an opportunity to spam users on their cellular telephones. "Currently, at the urging of these corporations, the FCC is considering relaxing that the TCPA in an effort to provide these businesses the ability to spam users, an effort that, in my view, must be resisted by all consumers. "Lawsuits like Rooney v. Rite Aid . . . are for this very purpose -- to protect consumers across the country." Mr. Rooney claims the TCPA was designed to prevent calls like the ones he received, and to protect the privacy of citizens like himself. In enacting the TCPA, Congress intended to give consumers a choice as to how creditors and telemarketers may call them, the complaint states. Mr. Rooney claims the defendant's acts and omissions constitute numerous and multiple negligent violations of the TCPA and that he and the class are entitled to an award of $500 in statutory damages for each and every violation. The defendant's acts and omissions also constitute numerous and multiple knowing and/or willful violations of the TCPA, which entitles Rooney and the class to an award of $1,500 in statutory damages for each and every violation. Mr. Rooney is seeking damages, injunctive relief and any other available legal or equitable remedies. He is being represented by Hyde and Joshua B. Swigart of Hyde & Swigart and Stephen G. Recordon of Recordon & Recordon. The case has been assigned to District Judge John A. Houston. U.S. District Court for the Southern District of California case number: 3:14-cv-01249 RYCO CONSTRUCTION: Class Suit Seeks to Recover Unpaid Back Wages ---------------------------------------------------------------- Gabriel Quintero, on behalf of himself, and all other plaintiffs similarly situated, known and unknown v. Ryco Construction Company d/b/a Ryco Landscaping, Ryan Taheny, Individually, and Colin Taheny, Individually, Case No. 1:14-cv-04135 (N.D. Ill., June 4, 2014) is brought under the Fair Labor Standards Act, the Portal- to-Portal Act, the Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act seeking to recover unpaid back wages. Ryco Construction Company, doing business as Ryco Landscaping, provides landscaping and maintenance services. The Individual Defendants are the owners of the Company. The Plaintiff is represented by: John William Billhorn, Esq. Meghan A. VanLeuwen, Esq. BILLHORN LAW FIRM 120 S. State Street, Suite 400 Chicago, IL 60603 Telephone: (312) 853-1450 E-mail: jbillhorn@billhornlaw.com mvanleuwen@billhornlaw.com SAGAL MEAT: Class Is Entitled to Unpaid Overtime Wages, Suit Says ----------------------------------------------------------------- Julio Anibal Mejia Sanchez, on behalf of himself and others similarly situated v. Sagal Meat Market, Inc., 134th Meat Market, Inc., Sagal Meat Market II, Inc., Sagal Meat Market III, Inc., Sagal Meat Market VI, Inc., Sagal Meat Market VII, Inc., Lenin Sanchez, Jose Sanchez, and Zuli Sanchez, Case No. 1:14-cv-03522 (E.D.N.Y., June 4, 2014) alleges that pursuant to the Fair Labor Standards Act and the New York Labor Law, the Plaintiff is entitled to recover from the Defendants: (1) unpaid overtime compensation; (2) liquidated damages; (3) prejudgment and post- judgment interest; and (4) attorneys' fees and costs. Sagal Meat Market, Inc., is a New York domestic business corporation headquartered in Brooklyn, New York. 134th Meat Market, Inc., Sagal Meat Market II, Inc., and Sagal Meat Market III, Inc., are New York domestic business corporations headquartered in Bronx, New York. Sagal Meat Market VI, Inc., and Sagal Meat Market VII, Inc., are New York domestic business corporations headquartered in Brooklyn, New York. The Individual Defendants are owners, officers, directors or managing agents of the Corporate Defendants. The Plaintiff is represented by: Peter Hans Cooper, Esq. CILENTI & COOPER, PLLC 708 Third Avenue, 6th Floor New York, NY 10017 Telephone: (212) 209-3933 Facsimile: (212) 209-7102 E-mail: pcooper@jcpclaw.com SILVER SPRING: No Class Status in Cal. Suit Over Smart Meters ------------------------------------------------------------- The Superior Court of the State of California, San Mateo County denied a revised class certification motion in a suit claiming that the smart meters used by Silver Spring Networks, Inc. are defective and generate incorrect bills, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 29, 2014. The company was named in a lawsuit filed in September 2010 in the Superior Court of the State of California, San Mateo County (Edwards v. Silver Spring Networks). The lawsuit claims to be a "class action" on behalf of California consumers, and alleges that smart meters are defective and generate incorrect bills. The company filed a motion to dismiss this case and, in September 2011, the San Mateo Superior Court granted the company's motion without leave to amend as to two of the plaintiffs' causes of action and with leave to amend as to a third claim. In February 2012, the plaintiffs filed an amended complaint, to which the company filed an answer denying the plaintiffs' allegations in May 2012. In August 2012, the plaintiffs filed a second amended complaint, and in September 2012, the company filed a demurrer to one of the two claims asserted in the second amended complaint, which was overruled by the court. In November 2012, the plaintiffs filed a motion for class certification. In April 2013, the court denied the class certification motion without prejudice, but allowed the plaintiffs to file a revised class certification motion, which the plaintiffs filed in June 2013. The court denied the revised class certification motion in December 2013. STATE FARM: Seeks Protective Order in $7-Bil. RICO Class Action --------------------------------------------------------------- The Madison-St. Clair Record reports that State Farm will raise First Amendment objections document by document if it doesn't obtain an order protecting the privacy of records in a $7 billion class action, according to its lawyers. In a May 23 reply to plaintiffs who prefer publicity to privacy, they called on U.S. Magistrate Stephen Williams to adopt a protective order they proposed on May 2. "Most of plaintiffs' discovery requests seek information that is potentially protected by the First Amendment associational privilege," Patrick Cloud of HeplerBroom in Edwardsville wrote. "When a court enters a protective order like that defendants propose, it is not rendering a decision that any particular document is in fact confidential," he wrote. "Instead, the order serves as an efficiency measure, by expediting production and avoiding the burden on the court of document by document adjudication," he wrote. He filed the brief jointly with two other defendants, Ed Murnane of Illinois Civil Justice League and State Farm employee William Shepherd. Plaintiffs who claim State Farm, Messrs. Murnane and Shepherd corruptly secured the election of Illinois Supreme Court Justice Lloyd Karmeier opposed the order on May 16. Lead lawyer Robert Clifford of Chicago wrote, "The public has a significant interest in access to filed information pertaining to the impartiality of a state supreme court justice and to an alleged scheme to funnel corporate money through the courthouse's back door." Clifford wrote that defendants failed to show any likelihood that identifying donors to groups which supported Karmeier would result in threats, harassment or reprisals. Cloud argued in reply that defendants don't plan to assert privilege as to contributions to candidates, committees, and parties, which are matters of public record. He wrote that they planned to assert privilege as to contributions to trade associations and advocacy organizations and communications with those groups. "Plaintiffs offer no authority holding that such associational activities lose their privileged character merely because one party asserts they are 'political,' and no such authority exists," Cloud wrote. He wrote that defendants do not seek an abstract ruling on privilege issues now. "Instead, defendants have proposed provisions that would allow plaintiffs relevant discovery without defendants risking privilege waiver," he wrote. He wrote that plaintiffs offered no explanation of why that proposal was inadequate. "If the court rejects defendants' proposal, the First Amendment's application necessarily will have to be addressed on a document by document basis, which will delay discovery, create additional burden and waste judicial resources on unnecessary disputes," he wrote. He wrote that plaintiffs have yet to produce a shred of proof of their allegations. "State Farm served subpoenas on plaintiffs' investigators months ago seeking documents related to their supposed investigations, and have yet to receive anything," Cloud wrote. Russell Scott of Belleville signed the brief for Mr. Shepherd, and Scott Berliant of Chicago signed for Mr. Murnane. Magistrate Williams has set a hearing June 17. Chief District Judge David Herndon presides over the action. UNI-PIXEL INC: Still Faces Shareholder Suits in New York, Texas --------------------------------------------------------------- Uni-Pixel, Inc. continues to face securities lawsuits in the United States District Court, Southern District of New York and the United States District Court, Southern District of Texas, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. In June 2013, two purported class action complaints were filed in the United States District Court, Southern District of New York and the United States District Court, Southern District of Texas against the Company and the company's CEO, CFO, and Chairman. The Southern District of New York complaint was voluntarily dismissed by plaintiff on July 2, 2013. The surviving complaint alleges that the company and the company's officers and directors violated the federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by making purportedly false and misleading statements concerning the company's licensing agreements and product development. The complaint seeks unspecified damages on behalf of a purported class of purchasers of the company's common stock during the period from December 7, 2012 to May 31, 2013. UNIVERSAL MUSIC: Files Summary Judgment Suits in Royalties Action ----------------------------------------------------------------- Eriq Gardner, writing for The Hollywood Reporter, reports that over the past few years, major record labels have been attempting to put out a legal firestorm from recording artists who claim to have been cheated on digital music. Some labels like Sony and Warner have agreed to pay millions of dollars to settle class actions. Not Universal Music Group. The major has been fighting tooth and nail, and on May 23, Universal Music lodged a pair of summary judgment motions in an attempt to defeat its own suing artists. The litigation inferno stems from a 2010 appellate ruling in F.B.T. Productions v. Aftermath that suggested that record labels should be treating digital download income off of venues like Apple's iTunes as "licenses" rather than "sales." The difference could mean a lot of money because under typical licensing or leasing provisions of artist-label contracts, about 50 percent of collected revenue gets handed over to artists. Under sales provisions, it's usually not more than 15 percent. After F.B.T. Productions -- which did a lot of work on Eminem's seminal recordings -- experienced some success, many other artists filed class actions against Universal Music. Many of the cases were then consolidated, and along the way, some artists like Rob Zombie and Otis Williams of The Temptations have withdrawn their claims while others like Chuck D. of Public Enemy, Rick James (by way of trust), Dave Mason of Traffic, Whitesnake, Andres Titus of Black Sheep, Ron Tyson of The Temptations and Bo Donaldson have remained in the case to challenge Universal Music's accounting. In one of its summary judgment motions, Universal Music writes its own view of the history of these digital royalty claims. "In 2002, with online piracy still ravaging the music industry, UMGR sought to enlist support from recording artists for legal online music sales by announcing to the music community a new 'royalties model' for calculating artists' royalties for Downloads," says a memorandum authored by the label's attorneys at the law firm of Jeffer Mangels Butler & Mitchell. Universal Music says it saw iTunes downloads as the "equivalent of a physical sale through a new distribution channel," an interpretation it says would have entitled the label to make packaging deductions when calculating royalties. But supposedly, the label had a generous heart. "UMGR determined it would not to take such contractual royalty deductions for Downloads, even when an artist's contract allowed it," continues the memorandum. The defendant nods to some of the press that this new "royalties model" received at the time. Some recording artists reps "hailed" it. Others expressed ambivalence. And yet, a few didn't think it had gone far enough. A few artist attorneys are said to have brought forward the argument that these downloads were "licenses," an interpretation which Universal Music rejected. Then came the F.B.T. decision, and subsequently the firestorm of litigation. After a couple years of discovery in this massive case, which produced some 665,000 pages of documents, Universal Music says the claims now must be rejected by the judge. The label brings a few arguments to support their cause. In reference to the plaintiffs' claim for violation of California's unfair competition law, Universal Music says such claim is defective because there is no sufficient connection to the public being harmed. "The record remains devoid of evidence that the industry discussion about Download royalties in the early 2000s had anything to do with the general public, let alone even reached consumers or would have been comprehensible to them," states the memorandum. "Plaintiffs assert UMGR made various allegedly inaccurate public statements. As a threshold matter, there is no evidence that a single consumer heard any such statements, let alone understood them, was harmed by them, or needs 'protection' from them." Universal Music challenges the lawsuit on other grounds. Some of the artists like Chuck D and Titus are said to have agreed that their business relationship would be governed by New York law, making their assertion of a California law out of bounds. The label also believes that the statute of limitations precludes the plaintiffs' breach of contract claims and points to a 2004 letter from artists' lawyers to Universal Music over the issue of digital music that "amply demonstrates that Plaintiffs could have asserted the theory they advance in this case . . . at least seven years before filing these suits." In Universal Music's other summary judgment memorandum, the defendant objects to the claims of Donaldson and Tyson -- each for interesting reasons. As far as Donaldson, who was the lead singer of Bo Donaldson and The Heywoods, the defendant says the musical group is a "partnership that agreed to take action only by majority vote, and Donaldson has never obtained the required majority consent to pursue this action." But even if that's not correct, Universal Music introduces another wrinkle to the whole licenses vs. sales dispute. "Few, if any, recording contracts have the starkly dichotomous structure of the contract in F.B.T.," writes Universal Music's lawyers. "None of Plaintiffs' contracts do. Certainly the contract on which plaintiff Bo Donaldson is suing does not. To the contrary, when Plaintiffs' theory that UMGR 'licenses' Downloads to Download Providers is applied to Donaldson's contract, this actually dictates a lower royalty for Downloads than UMGR is paying under that contract. Of course, if, under Plaintiffs' theory, Donaldson has been overpaid royalties, he cannot maintain claims for underpayment of royalties." Finally, there's Tyson, a tenor in The Temptations, whose digital royalties claim has gotten a good deal of press. According to the summary judgment, he joined the singing group in 1983 and therefore wasn't a member of the contracts that entailed the hit recordings from the '60s and '70s. And as for contracts in the '80s and '90s, Tyson might have been "mentioned" in them, says Universal Music, but he's allegedly just an employee of founding member Otis Williams. "It is eminently unfair for the owner of A Song For You and Tall Temptations, Williams, to dismiss his claims (without prejudice) while one of his employees, Tyson, continues to prosecute the claims ostensibly on Williams' corporations' behalf," says the defendant. "Presumably, if Tyson wins, Williams' corporations will claim the benefit of that victory; if Tyson loses, they will claim the right to disavow the loss as unauthorized by and inapplicable to them, and to sue UMGR again on the same claim Tyson just lost." And thus, the claim over digital music from The Temptations remains in some sort of odd standing limbo. The plaintiffs -- being represented by nearly a half dozen prominent entertainment law firms -- will likely respond soon to the summary judgment arguments. URBAN OUTFITTERS: Court Says Insurance Don't Cover ZIP Code Suit ---------------------------------------------------------------- Rose Bouboushian, writing for Courthouse News Service, reports that OneBeacon and Hanover Insurance Cos. need not defend Urban Outfitters in three class actions alleging they illegally gathered credit card customers' ZIP codes, a federal judge ruled. Whitney Hancock sued Urban Outfitters and Anthropologie in D.C. federal court, alleging they illegally collected customer ZIP codes on three occasions since June 21, 2010. The defendants allegedly have a corporate policy to "train and require" employees to ask credit card customers for their ZIP codes, despite knowing that it is illegal to do so. Urban Outfitters can use the info "for their own pecuniary benefit, including by engaging in direct marketing campaigns without customers' permission," the D.C. plaintiffs claim. Andrew Dremak filed a similar suit in San Diego County Court, which was later consolidated with five other suits filed in California from Feb. 15 to March 21, 2011. The California plaintiffs allege that Urban Outfitters "systematically and intentionally" had cashiers gather customer names, credit card numbers, and ZIP codes -- info not required to complete transactions -- on at least eight occasions since Feb. 15, 2010. Urban Outfitters then used the data for targeted marketing and sold it to other businesses, the California plaintiffs claimed. Lauren Miller filed similar claims in Massachusetts, asserting that the store has used ZIP codes to send customers junk mail since Aug. 15, 2009. Plaintiffs of all three suits allege violations of various state consumer protection and privacy laws, and seek damages and other monetary awards. Though the D.C. complaint was dismissed on March 14, 2014, those plaintiffs appealed. After Urban Outfitters requested defense coverage from OneBeacon America Insurance Co., the latter sought a declaration that it need not defend the defendants in the three suits. The defendants joined The Hanover Insurance Co. as a third-party defendant on Oct. 25, 2013, which, in turn, sought a declaration that it has no obligation to indemnify the stores. Urban Outfitters then moved for partial summary judgment for the opposite declaration. But Senior U.S. District Judge Stewart Dalzell of the Eastern District of Pennsylvania ruled in the insurers' favor May 15. The judge tossed aside Urban Outfitters' claim that the three suits allege oral or written publication of private customer information, which is covered under the insurance policies. "The Hancock plaintiffs make no such allegation," Dalzell wrote. "Rather, they allege only that the retailers used their ZIP code information 'to determine their home or business addresses,' where '[d]efendants sent unsolicited mailings or other material.' Although the complaint stated that the retailers could identify customers' home or business addresses 'by matching the customers' names with their ZIP codes . . . via commercially available databases,' that claim notably does not allege that the information gathered from Urban Outfitters customers was publicly disseminated." The insurance policies exclude coverage of the Dremak allegations, the ruling states. "The language of the exclusion, which bars collecting and recording information, is consonant with the Song-Beverly [Credit Card Act of 1971] prohibition against 'request[ing], require[ing]' or 'record[ing]' ZIP code data as a condition of purchase," Dalzell wrote. "Accordingly, we find that because the Dremak allegations arise out of the alleged violation of the statutory right to privacy that prohibits collecting or recording information, the exclusions bar coverage under the policies." The policies neither cover the Massachusetts plaintiffs' claims that Urban Outfitters breached their privacy by sending them junk mail, according to the ruling. VERTEX PHARMACEUTICALS: Scott+Scott Files Securities Class Action ----------------------------------------------------------------- Scott+Scott, Attorneys at Law, LLP on May 28 disclosed that it filed a securities class action complaint against Vertex Pharmaceuticals, Incorporated, the Company's Chief Executive Officer, and certain of its officers and directors in the United States District Court for the District of Massachusetts. The lawsuit alleges violations of the Securities Exchange Act of 1934 and was filed on behalf of all purchasers of Vertex common stock between May 7, 2012 and May 29, 2012, inclusive. The complaint alleges that Vertex issued false and misleading public statements concerning a pharmaceutical study of its products, VX-809 and Kalydeco. Specifically, the complaint alleges that at the start of the Class Period on May 7, 2012, Vertex announced positive "interim data" from its Phase 2 study of VX-809 and Kalydeco. This caused a significant increase in the Company's stock price -- from $37.41 to $58.12 per share. As Defendants continued heralding the positive and "unexpected" interim Phase 2 study results, the Company's stock traded as high as $64.94 on May 25, 2012. Certain of the individual Defendants took advantage of this stock price increase to sell approximately $30 million of Vertex stock. On May 29, 2012, the Company announced that the exceptional results of the Phase 2 study of the two medications were grossly overstated. On this news, the Company's stock price fell from a close of $64.85 on May 25, 2012 to a close of $57.80 on May 29, 2012. You can view a copy of the complaint filed by Scott+Scott at: http://is.gd/qLUsmd If you purchased Vertex common stock during the Class Period, you may move the Court no later than July 28, 2014 to serve as lead plaintiff. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Michael Burnett, Esq. at Scott+Scott -- mburnett@scott-scott.com -- (800) 404-7770, (860) 537-5537), or visit the Scott+Scott website, http://www.scott-scott.comfor more information. There is no cost or fee to you. Scott+Scott is a class action law firms in the United States, with offices in New York, Connecticut, Ohio, and California. The firm has been directly responsible for the recovery of hundreds of millions of dollars on behalf of its clients through the prosecution of major securities, antitrust and employee retirement plan class action lawsuits. The firm represents pension funds, foundations, individuals, businesses, and other entities worldwide. WASHINGTON KENNEL CLUB: Sued for Improperly Claiming Tip-Credit --------------------------------------------------------------- Charles Smith and Jordan Biddle, on behalf of themselves and all others similarly situated v. Washington County Kennel Club, Incorporated, a Florida Profit Corporation d/b/a Ebro Greyhound Park & Poker Room, and Stockton Hess, an individual, Case No. 5:14-cv-00139-RS-GRJ (N.D. Fla., June 4, 2014) alleges that during the Plaintiffs' employment, the Defendants improperly claimed a 'tip-credit' for the Plaintiffs and others similarly situated, and illegally paid these employees below the statutorily required minimum wage under the Fair Labor Standards Act. The Plaintiffs and others similarly situated, were poker dealers at the Defendants' casino, and were 'tipped' employees under the FLSA through a tip pool. The Plaintiffs are represented by: Christopher J. Whitelock, Esq. WHITELOCK & ASSOCIATES, P.A. 300 Southeast Thirteenth Street Fort Lauderdale, Florida 33316 Telephone: (954) 463-2001 Facsimile: (954) 463-0410 E-mail: cjw@whjitelocklegal.com - and - Chad E. Levy, Esq. LEVY & LEVY, P.A. 300 Southeast Thirteenth Street Fort Lauderdale, Florida 33316 Telephone: (954) 763-5722 Facsimile: (954) 763-5723 E-mail: chad@levylevylaw.com WR GRACE: Bares Updates on Management of Property Damage Claims --------------------------------------------------------------- In its May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014, W.R. Grace & Co. provides updates on the management of the Zonolite Attic Insulation (ZAI) PD Account. On April 2, 2001, Grace and 61 of its United States subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. The cases were consolidated under case number 01-01139 (the "Chapter 11 Cases"). Grace's non- U.S. subsidiaries and certain of its U.S. subsidiaries were not included in the filing. In September 2008, Grace and other parties filed the Joint Plan with the Bankruptcy Court to address all pending and future asbestos-related claims and all other pre-petition claims as outlined therein. On January 31, 2011, the Bankruptcy Court issued an order (the "Confirmation Order") confirming the Joint Plan. On January 31, 2012, the United States District Court for the District of Delaware (the "District Court") issued an order affirming the Confirmation Order and confirming the Joint Plan in its entirety. On February 3, 2014 (the "Effective Date"), the U.S. Court of Appeals for the Third Circuit (the "Third Circuit") dismissed the sole remaining appeal challenging the Confirmation Order and the Joint Plan became effective. Under the Joint Plan, two asbestos trusts were established and funded under Section 524(g) of the Bankruptcy Code. The Confirmation Order contains a channeling injunction which provides that all pending and future asbestos-related personal injury claims and demands ("PI Claims") have been channeled for resolution to an asbestos personal injury trust (the "PI Trust") and all pending and future asbestos-related property damage claims and demands ("PD Claims"), including PD Claims related to Grace's former attic insulation product ("ZAI PD Claims"), have been channeled to a separate asbestos property damage trust (the "PD Trust"). Canadian ZAI PD Claims have been channeled to a separate Canadian claims fund. The trusts are the sole recourse for holders of asbestos-related claims; the channeling injunctions prohibit holders of asbestos-related claims from asserting such claims directly against Grace. Under the terms of the Joint Plan, Asbestos-Related Property Damage Claims under the Chapter 11 Cases were satisfied as: The plaintiffs in asbestos property damage lawsuits generally seek to have the defendants pay for the cost of removing, containing or repairing the asbestos-containing materials in commercial and public buildings. Various factors can affect the merit and value of PD Claims, including legal defenses, product identification, the amount and type of product involved, the age, type, size and use of the building, the legal status of the claimant, the jurisdictional history of prior cases, the court in which the case is pending, and the difficulty of asbestos abatement, if necessary. Several class action lawsuits also were filed on behalf of homeowners alleging damage from ZAI. Based on Grace's investigation of the claims described in these lawsuits, and testing and analysis of this product by Grace and others, Grace believes that ZAI was and continues to be safe for its intended purpose and poses little or no threat to human health. The plaintiffs in the ZAI lawsuits dispute Grace's position on the safety of ZAI. In December 2006 the Bankruptcy Court issued an opinion and order holding that, although ZAI is contaminated with asbestos and can release asbestos fibers when disturbed, there is no unreasonable risk of harm from ZAI. At Grace's request, in July 2008, the Bankruptcy Court established a claims bar date for U.S. ZAI PD Claims and approved a related notice program that required any person with a U.S. ZAI PD Claim to submit an individual proof of claim no later than October 31, 2008. Approximately 17,960 U.S. ZAI PD Claims were filed prior to the October 31, 2008, claims bar date and, as of the Effective Date, an additional 1,310 U.S. ZAI PD Claims were filed. Under the Joint Plan, all PD Claims have been channeled to the PD Trust for resolution. The PD Trust contains two accounts, the PD Account and the ZAI PD Account. U.S. ZAI PD Claims are to be paid from the ZAI PD Account and non-ZAI PD Claims are to be paid from the PD Account. Canadian ZAI PD Claims are to be paid by a separate fund established in Canada. Each account has a separate trustee and the assets of the accounts may not be commingled. PD Account On the Effective Date, the PD Account of the PD Trust was funded with $39.9 million in cash from Grace and $111.4 million in cash from Cryovac and Fresenius to pay allowed non-ZAI PD Claims settled as of the Effective Date, and CDN$8.6 million in cash from Grace to fund the Canadian ZAI PD Claims fund. Following the Effective Date, unresolved non-ZAI PD Claims are to be litigated in the Bankruptcy Court and any future non-ZAI PD Claims are to be litigated in a federal district court, in each case pursuant to procedures to be approved by the Bankruptcy Court. To the extent any such PD Claims are determined to be allowed claims, they are to be paid in cash by the PD Trust. Grace is obligated to make a payment to the PD Trust every six months in the amount of any non-ZAI PD Claims allowed during the preceding six months plus interest (if applicable) and, except for the first six months, the amount of PD Trust expenses for the preceding six months (the "PD Obligation"). The aggregate amount to be paid under the PD Obligation is not capped and Grace may be obligated to make additional payments to the PD Account in respect of the PD Obligation. Grace has accrued for those unresolved non- ZAI PD Claims that it believes are probable and estimable. Grace has not accrued for other unresolved or unasserted non-ZAI PD Claims, as it does not believe that payment on any such claims is probable. As of March 31, 2014, Grace had made no other payments to the PD Trust since the Effective Date. On the Effective Date, the PD Trust contributed CDN$8.6 million to a separate Canadian ZAI PD Claims fund through which Canadian ZAI PD Claims are to be resolved. Grace has no continuing or contingent obligations to make additional payments into this fund. ZAI PD Account On the Effective Date, the ZAI PD Account was funded with approximately $34.4 million in cash from Cryovac and Fresenius. Grace is obligated to make a payment of $30 million in cash to the ZAI PD Account on the third anniversary of the Effective Date, and Grace is obligated to make up to 10 contingent deferred payments of $8 million per year to the ZAI PD Account during the 20-year period beginning on the fifth anniversary of the Effective Date, with each such payment due only if the assets of the ZAI PD Account fall below $10 million during the preceding year. The amounts that Grace will be obligated to pay to the ZAI PD Account under the Joint Plan are capped amounts. Grace is not obligated to make additional payments to the PD Trust in respect of the ZAI PD Account beyond the payments described. Grace has accrued for the $30 million payment due on the third anniversary of the Effective Date, but has not accrued for the 10 additional payments since Grace does not currently believe they are probable. The PD Trust is to resolve U.S. ZAI PD Claims that qualify for payment under specified trust distribution procedures by paying 55% of the claimed amount, but in no event is the PD Trust to pay more per claim than $4,125 (as adjusted for inflation each year after the fifth anniversary of the Effective Date). All payments to the PD Trust required after the Effective Date are secured by the Company's obligation to issue 77,372,257 shares of Company common stock to the asbestos trusts in the event of default, subject to customary anti-dilution provisions. Grace has the right to conduct annual audits of the books, records and claim processing procedures of the PD Trust. ZAGG INC: Dismissal of Utah Securities Litigation Under Appeal -------------------------------------------------------------- Plaintiffs in In re: Zagg, Inc. Securities Litigation are appealing the dismissal of the case, according to the company's May 8, 2014, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2014. James H. Apple, et al. v. ZAGG Inc, et al., U.S. District Court, District of Utah, 2:12-cv-00852; Ryan Draayer, et al. v. Zagg Inc, et al., U.S. District Court, District of Utah, 2:12-cv-00859. On September 6 and 10, 2012, two putative class action lawsuits were filed by purported Company shareholders against the Company, Randall Hales, Brandon O'Brien, and Cheryl Larabee, as well as Robert G. Pedersen II, the Company's former Chairman and CEO, and Edward Ekstrom and Shuichiro Ueyama, former members of the Company's Board of Directors. These lawsuits were subsequently amended by a complaint filed on May 6, 2013. The plaintiffs seek certification of a class of purchasers of the Company's stock between October 15, 2010 and August 17, 2012. The plaintiffs claim that as a result of Mr. Pedersen's alleged December 2011 margin account sales, the defendants initiated a succession plan to replace Mr. Pedersen as the Company's CEO with Mr. Hales, but failed to disclose either the succession plan or Mr. Pedersen's margin account sales, in violation of Sections 10(b), 14(a), and 20(a), and SEC Rules 10b-5 and 14a-9, under the Securities Exchange Act of 1934 (the "Exchange Act"). On March 7, 2013, the U.S. District Court for the District of Utah (the "Court") consolidated the Apple and Draayer actions and assigned the caption In re: Zagg, Inc. Securities Litigation, and on May 6, 2013, plaintiffs filed a consolidated complaint. On July 5, 2013, the defendants moved to dismiss the consolidated complaint. On February 7, 2014, the Court entered an order granting the Company's motion to dismiss the consolidated complaint. On February 25, 2014, plaintiffs filed a notice of appeal. * Plaintiff's Bar Focuses on Injunctive Relief Class Actions ------------------------------------------------------------ Robert J. Herrington, Esq., at Greenberg Traurig, LLP, in an article for The National Law Review, wrote that as the Supreme Court has tightened the requirements for certifying a damages class action, some in the plaintiff's bar have responded by focusing on class actions seeking injunctive relief, particularly in cases against consumer products companies. To certify a class under Rule 23(b)(2), a plaintiff does not have to demonstrate predominance or superiority, and thus an injunctive class should, at least in theory, be easier to certify. But a class action seeking injunctive relief has its own challenges, one of which is establishing that the named plaintiff has standing. Standing to seek an injunction In the context of a consumer fraud class action, standing can be a particular challenge. A plaintiff seeking injunctive relief "must demonstrate that he has suffered or is threatened with a 'concrete and particularized' legal harm, coupled with 'a sufficient likelihood that he will again be wronged in a similar way.'" Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). The plaintiff must "establish a 'real and immediate threat of repeated injury' " that "must be likely to be redressed by the prospective injunctive relief." Id. "Unless the named plaintiffs are themselves entitled to seek injunctive relief, they may not represent a class seeking that relief." Hodgers-Durgin v. de la Vina, 199 F.3d 1037, 1045 (9th Cir. 1999). Thus, without a threat of future harm, injunctive relief is not available. Under this standard, a plaintiff suing for consumer fraud or false advertising should have a difficult time seeking injunctive relief. After filing suit, the plaintiff is obviously aware of the allegedly false statement, and it is difficult to see how, given that knowledge, she could establish a "real and immediate threat of repeated injury." The plaintiff either is not going to buy the consumer product in the future, or, if she did, would be aware of the misstatement. What must a plaintiff allege to have standing for injunctive relief? Courts have reached different conclusions about whether plaintiffs suing for consumer fraud have standing to seek an injunction. Some hold that a plaintiff does not have standing if she is not likely to buy the product again. See, e.g., Rahman v. Mott's LLP, No. 13-cv-3482-SI, 2014 WL 325241, at *10 & n.9 (N.D. Cal. Jan. 29, 2014) ("to establish standing, plaintiff must allege that he intends to purchase the products at issue in the future."); Morgan v. Wallaby Yogurt Co., Inc., 13-CV-00296-WHO, 2014 WL 1017879, at *6 (N.D. Cal. Mar. 13, 2014) (relief limited to damages where plaintiffs "stated that they would not have purchased the product had they known it contained added sugar");Delarosa v. Boiron, Inc., No. 10-1569, 2012 WL 8716658, at *5 (C.D. Cal. Dec. 28, 2012) (no threat of future injury because plaintiff would not purchase ineffective homeopathic product again); Bohn v. Boiron, Inc., No. 11-8704, 2013 WL 3975126, at *4 (N.D. Ill. Aug. 1, 2013) (same); Wang v. OCZ Tech. Grp., Inc., 276 F.R.D. 618 (N.D. Cal.2011) (no threat of future injury because plaintiff already purchased electronics and did not allege he would purchase again); Robinson v. Hornell Brewing Co., No. 11-2183, 2012 WL 1232188, at *4 (D.N.J. Apr. 11, 2012) (no threat of future injury because plaintiff stated intent never to purchase product again). Other courts have concluded that a plaintiff does have standing even if he is not going to buy the product again. See, e.g., Koehler v. Litehouse, Inc., No. 12-cv-4055-SI, 2012 WL 6217635, at *6 (N.D. Cal. Dec. 13, 2012) ("To do otherwise would eviscerate the intent of the California legislature in creating consumer protection statutes because it would effectively bar any consumer who avoids the offending product from seeking injunctive relief."); Larsen v. Trader Joe's Co., No. 11-5188, 2012 WL 5458396, at *4 (N.D. Cal. June 14, 2012) (plaintiffs had standing even though they would not purchase the products again); Lanovaz v. Twinings N. Am., Inc., No. 12-cv-2646-RMW, 2014 WL 46822, at *10 (N.D. Cal. Jan. 6, 2014) (same); Ries v. Ariz. Beverages USA LLC, 287 F.R.D. 523, 533 (N.D. Cal. 2012) (same); Henderson v. Gruma Corp., No. 10-4173, 2011 WL 1362188, at *7-8 (C.D. Cal. Apr. 11, 2011) (plaintiffs had standing even though they likely would not purchase the products again). Establishing standing may preclude materiality If a plaintiff does allege that she is, or plans on, continuing to buy the product, she faces another problem -- materiality. To be actionable, a misstatement generally must be "material," meaning "a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question." Fairbanks v. Farmers New World Life Ins. Co., 197 Cal. App. 4th 544, 565 (2011). Where a plaintiff continues to buy a consumer product notwithstanding the mislabeling or false advertising, she may not be able to establish that the misstatement was material. See, e.g., Leong v. Square Enix of Am. Holdings, Inc., No. CV09-4484, 2010 WL 1641364, at *4, 8 (C.D. Cal. Apr. 20, 2010) aff'd, 462 F. App'x 688 (9th Cir. 2011) (dismissing UCL, FAL, and CLRA claims because plaintiff continued to pay subscription fees after learning of the allegedly fraudulent practice, which precluded showing of materiality). Takeaways Consumer products companies that are defending class actions seeking injunctive relief will want to keep these standards in mind. They can be used to force a plaintiff into a Hobson's choice. If the plaintiff does not allege that she plans to purchase the product again, the company may want to ask the court to dismiss any request for injunctive relief. If the plaintiff does allege that she plans to purchase the product, that may be a basis to challenge whether the alleged misstatement is material. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Ma. Cristina Canson, Noemi Irene A. Adala, Joy A. Agravante, Valerie Udtuhan, Julie Anne L. Toledo, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $775 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *