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/raid1/www/Hosts/bankrupt/CAR_Public/170529.mbx C L A S S A C T I O N R E P O R T E R Monday, May 29, 2017, Vol. 19, No. 106 Headlines 1MDB: Class Action Mulled Over US$1.2 Billion Payments to IPIC ABBVIE: Judge Limits Expert Testimony in Androgel Class Action ADVANCE TANK: Faces "Hennigan" Lawsuit Alleging FLSA Violation AKARI THERAPEUTICS: July 11 Lead Plaintiff Motion Deadline Set ALLSTATE CORPORATION: Appeal in "Williams" Suit Pending ALLSTATE CORPORATION: "Jimenez" Parties Await Trial Plan Approval ALLSTATE CORPORATION: Discovery Underway in "Perez" Suit ALLSTATE CORPORATION: "Rosenberg" Suit Dismissed ALLSTATE CORPORATION: Briefing in Romero Proceedings Underway ALTRIA GROUP: Faces 7 Smoking and Health Class Actions in Canada ALTRIA GROUP: 6 Engle Progeny Cases Set for Trial Thru June 30 ALTRIA GROUP: Class Certification Denied in 60 Cases v. PM USA ALTRIA GROUP: Class Certification Denied in 21 "Lights" Cases ALTRIA GROUP: Appeal in "Larsen" Suit Still Pending ALTRIA GROUP: Still Defends "Carroll" Suit in Delaware ALTRIA GROUP: "Gwynn" Lawsuit Still Pending in California ARCHER-DANIELS-MIDLAND: Seeks Dismissal of Farmers' Suit AT&T: Faces Customer Complaints Over Promotions Overcharging AVALONBAY COMMUNITIES: Settlement Fairness Hearing in July BAKER HUGHES: Booth Family Trust Files Suit Over GE Merger BARRICK GOLD: "Broadfoot" Seeks Damages Over Share Price Drop BAYFRONT HMA: MSPA Claims Suit Removed to S.D. Florida BIMBO FOODS: Faces "Franze" Lawsuit Alleging Misclassification BUMBLE BEE: Walmart's Price Fixing Suit Amended to Add Defendants CANADA: Six Nations Class Action Against HDI Can Proceed CANADA: CFB Esquimalt Blocks Ad Seeking Sexual Assault Victims CARDINAL HEALTH: 58 IVC Product Liability Lawsuits Pending CELADON GROUP: "Depickere" Sues Over Share Price Drop CELADON GROUP: Block & Leviton Expands Class Period CEMIG: Chairman da Silva Faces Class Suit over Misconduct CEMIG: Awaits Judgment in Consumer Classification Case Appeal CEMIG: Unit Still Faces Suit over Excessive Tariffs CEMIG: To Appeal Judgment in Favor of CET Employees CEMIG: AMAR's Class Action Appeal Tossed CEMIG: Class Suits Want Funding for Environmental Protection CEMIG: Class Suits Want Formation of Preservation Areas COLUMBINE EMERGENCY: "Nitzkorski" Seeks to Recover Upaid OT Wages COREPOWER: Yoga Students Want $1.65MM Wage Settlement Approved CVS HEALTH: Discovery Underway in Indiana Pension Fund Suit CVS HEALTH: Still Defends Corcoran & Podgorny Suits in N.D. Ill. CVS HEALTH: Amended Complaint in "Barchock" Suit Dismissed CVS HEALTH: Still Defends Barnett & Boss Suits in New Jersey DAVITA INC: Faces Class Suit by Peace Officers' Annuity Fund DEMOCRATIC NATIONAL: Judge Has Yet to Rule on Class Action DEMOCRATIC NATIONAL: Judge Hears Motion to Dismiss Class Action DIAMOND RESORTS: Fournier Seeks to Terminate Timeshare Membership DIGITALGLOBE INC: "Bussey" Sues Over Shadowy Merger Deal F. MILLER: "Hannon" Sues Over FLSA Violations FERNANDEZ BROTHERS: Faces Class Action Over Labor Law Violations FRESNO, CA: Second Group of Residents Joins Water Class Action GENERAL MOTORS: Defends Subpoena in Ignition Switch MDL GERBER PRODUCTS: "Hobbs" Alleges False Ad of Good Start Gentle HALYARD HEALTH: To Challenge $450MM Surgical Gown Suit Verdict HALYARD HEALTH: Motion to Dismiss "Jackson" Suit Pending HCP INC: Boynton Beach Action in Early Stages HERSHEY'S: Motion to Dismiss Reese Slack Fill Class Action Denied JPMORGAN CHASE: Plaintiffs' Appeal in ERISA Action Pending JPMORGAN CHASE: Settlement of Quebec Action Remains Pending JPMORGAN CHASE: Still Faces Interchange Litigation JPMORGAN CHASE: Still Defends LIBOR & Other Benchmark Rate Suits K & C ENTERPRISE: "Broscious" Action Seeks Minimum, Overtime Pay KIA MOTORS: "Centko" Sues Over Defective Bearings MAJOR LEAGUE: Appeals Ruling in Calif. Wage & Hour Class Action MDC PARTNERS: Class Action Litigation in Canada Underway MGM: Plaintiff Fights Bid to Dismiss James Bond DVD Box Lawsuit MISONIX INC: "Scalfani" Class Suit in Earliest Stages MURRAY GOULBURN: Federal Court New Venue for Class Action NATIONAL HOCKEY: Two Retired Buffalo Players Join Concussion Case NEXUS BUSINESS: "Brown" Labor Suit Seeks Overtime Pay NHCASH.COM: Suit Alleges Misrepresentation in Debt Collection PACIFIC COAST OIL: Final Approval Hearing Continued to June 12 PIZZA HUT: Allan Myers Represents Franchisees in Appeal Case POP WARNER: Calif. Court Dismisses Concussion Class Action PRIDE MOBILITY: Class Representative Withdraws Scooter Suit QUEST DIAGNOSTICS: Faces Class Action Over Excessive Charges RACKSPACE HOSTING: Pension Fund Sues Over Share Price Drop RDAP LAW: Hormozdi Law Sues Over Faxed Ad, Alleges TCPA Violation REGIONAL MANAGEMENT: Appellate Brief Due June 13 RETAILMENOT INC: Boening Files Suit Over Sale to Harland SABRE CORPORATION: Still Defends Class Suit in New York SABRE CORPORATION: Suits over Hotel Reservation Fees Pending SCHLUMBERGER TECH: Class Action Alleges Wrongful Termination SCOTTRADE: Consumer Class Actions Remanded to State Court SEC ENERGY: Faces "Martinez" Lawsuit Alleging FLSA Violation SHASTA COUNTY, CA: Inmates' Lawsuit Granted Class Action Status SNAP INC: Pomerantz LLP Files Securities Class Action SPENDSMART NETWORKS: "Marchelos" TCPA Class-Action Stayed SWIFT TRANSPORTATION: Awaits Court Approval of PAGA Case Deal SWIFT TRANSPORTATION: Class Cert. Bid Pending in Mares & McKinsty SWIFT TRANSPORTATION: Barker and Fritsch Complaints in Discovery SWIFT TRANSPORTATION: Settlement in "Castro" Suit Pending SWIFT TRANSPORTATION: Class Cert. Bid in "Julian" Suit Pending SWIFT TRANSPORTATION: "Hedglin" Class Suit in Discovery SWIFT TRANSPORTATION: "Garza" Suit Pending in Maricopa Court SWIFT TRANSPORTATION: Appeal in "Sheer" Class Suit Pending SWIFT TRANSPORTATION: Settlement Finalized in "Ciluffo" Suit SWIFT TRANSPORTATION: Class Cert. Motion in "Banks" Suit Pending SWIFT TRANSPORTATION: No Trial Date Set Yet in "Anderson" Suit THAILAND: Civil Court Can Consider BTS Accessibility Class Action TRINET GROUP: Sept. 20 Hearing on Motion to Dismiss Class Suit UCP INC: Faces "Tola" Lawsuit Over Century Communities Merger UNITED STATES: High Court Set to Decide on Immigration Cases UNITED STATES: Judge Brown Derides $380MM Cy Pres Decision VALEANT PHARMA: Objects to Class Action Notification Procedures VIRTUS INVESTMENT: Class Certification Granted in Securities Suit WAL-MART: Court Okays $7.5MM Settlement in Same-Sex Benefits Case WEHNER MULTIFAMILY: Faces "Long" Suit Alleging FLSA Violation WELLS FARGO: Judge Questions $142MM Sham Accounts Settlement WERNER ENTERPRISES: Still Defends Drivers' Suit in Nebraska WERNER ENTERPRISES: Still Defends Meal and Rest Breaks Suit XG SECURITY: Faces Class Action Over Unpaid Overtime Wages ZILLOW: Homeowner Files Class Action Over "Zestimate" Tool ZIMBABWE: Mbare Families File Class Action v. Harare City Council * Securities Class Action Defendants Face Challenges * Securities Case Spike Attributed to Change in Legal Strategy * Slater & Gordon's Top Class Action Lawyers Quit ********* 1MDB: Class Action Mulled Over US$1.2 Billion Payments to IPIC -------------------------------------------------------------- V Anbalagan, writing for Free Malaysia Today, reports that a letter of demand will be sent to Najib Razak and the 1MDB board of directors to stop making US$1.2 billion in payments to International Petroleum Investment Company (IPIC) to cover the default in interest payments on bonds. Lawyer Mohamed Haniff Khatri Abdulla said a notice would be issued and a suit would be filed here if the demands are not complied with. "We will go to the court to obtain a declaration that the settlement between 1MDB and IPIC is against public policy. We will also get an injunction to stop the payment," he said at a news conference here on May 15. On May 4, Amanah deputy youth chief Muhammad Faiz Fadzil had submitted a memorandum to Najib in his capacity as finance minister, questioning the delay in action against those responsible for the 1MDB money trail. Faiz said seven years after 1MDB began operations, its debts had now mounted to RM50 billion and the money trail was being investigated globally in the United States, Singapore, Switzerland and Hong Kong. Following the expiry of the 10-day deadline, a new group, Gerakan Anakmuda Tolak Najib (Ganti) has emerged to take the matter to the people and to the court. Ganti comprises youth members from DAP, PKR, PPBM and Deklarasi Rakyat. Haniff, who previously represented PPBM chairman Dr Mahathir Mohamad, has been appointed lawyer to conduct the legal proceedings on behalf of Ganti and Deklarasi Rakyat. 1MDB previously claimed it had paid IPIC's subsidiary, British Virgin Island-registered Aabar Investment PJS Limited ("Aabar BVI"), a total of RM3.51 billion between 2012 and 2014, something that IPIC disputed last year, claiming it never received the money. The question in the minds of many is this: If 1MDB claimed it had made the payment before, why did the company agree to make another payment? According to filings with the London Stock Exchange, IPIC said it will receive US$1.2 billion in two equal payments on July 31 and Dec 31. The agreement is conditional on the Arbitration Tribunal in London making a "consent award" by May 31. The filing indicates that the settlement involved only part of the total US$6.5 billion sought by IPIC, the remainder of which is believed to be subject to further negotiations. On May 15, Faiz and Ganti said they would form a secretariat to begin legal action against Najib and 1MBD's board of directors. "We call upon the public, irrespective of their political affiliations to sign the petition so that they could be included as plaintiffs in the suit," he said. He said a class-action could be filed to demonstrate that the right of the people, who were also taxpayers, could not be trampled upon. "The youth must also understands that they will in future bear the burden of 1MDB debts due to the financial mismanagement and abuse of power by Najib," Faiz said. Deklarasi Rakyat coordinator Khairuddin Abu Hassan said 1MDB was set up to steal the people's money through dubious means. "Now, Najib is using funds from public institutions and imposing the GST to settle the 1MDB debts," he added. Khairuddin, who together with his lawyer Matthias Chang, was cleared of sabotaging the Malaysian financial system, said the people should lodge police reports nationwide over the 1MDB scandal. "We must put pressure on the enforcement agencies to take action against the culprits involved," he said. Khairuddin said as coordinator of Deklarasi Rakyat, he would get the people to sign the petition during political meetings and also explain the matter for better understanding of the masses. [GN] ABBVIE: Judge Limits Expert Testimony in Androgel Class Action -------------------------------------------------------------- Eric Palmer, writing for FiercePharma, reports that a federal judge hearing the bellwether lawsuit for "low-T" drug marketing decided the plaintiff's case was suffering from a lack of support for some of its claims. U.S. District Judge Matthew Kennelly said the plaintiffs couldn't support their contention the drugs had a "negligent design defect," tossing those claims, the Cook County Record reports. But the judge denied AbbVie's effort to dismiss off-label marketing claims that contend the drugs not only didn't work, but increased patients' risk of heart attack. "Plaintiffs here have presented evidence sufficient to permit a reasonable jury to find that AbbVie had knowledge that its advertisements contained false or misleading statements," Kennelly ruled recently. The decision came in the cases of six plaintiffs against AbbVie's testosterone replacement drug Androgel, that are set to go to trial next month in Chicago and which will serve as a test for about 2,000 other cases in class-action litigation against AbbVie and other testosterone drug makers, including Eli Lilly and GlaxoSmithKline. The judge also agreed to limit the testimony of six medical experts lined up by the plaintiffs to testify. The cases began popping up in 2014 after studies suggested the class of drugs, which includes Eli Lilly's Axiron and GlaxoSmithKline's Testim, might be tied to increased risks of heart attack or stroke. Up to that point the drugs were big sellers, led by AndroGel, which became a $1-billion-plus hit, driven by AbbVie's ad campaign that popularized the term "low-T" and talked up the benefits of taking a testosterone replacement to relieve fatigue and improve sexual function. AndroGel sales started plummeting in 2014 after the FDA ordered drugmakers to note the cardio risks on their labels and to spell out that the drugs were approved only to treat hypogonadism, a serious testosterone deficiency. AbbVie and others have defended their drugs as supported by clinical and safety data. Recent studies have been mixed on the risks of taking a testosterone replacement. One showed the drugs contributed to a build-up of plaque in the heart, an early sign of heart disease. Another that followed men with the androgen deficiency found that those taking the testosterone replacements actually had a lower risk of heart attack than patients who never took the drugs. [GN] ADVANCE TANK: Faces "Hennigan" Lawsuit Alleging FLSA Violation -------------------------------------------------------------- SHAWN HENNIGAN, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. ADVANCE TANK AND CONSTRUCTION CO., Defendant, Case No. 4:17-cv-01456 (S.D. Tex., May 10, 2017), alleges that Defendant failed to take into account all remunerations when calculating employees' regular hourly and overtime rates. Consequently, Defendant's compensation policy violates the mandate of the Fair Labor Standards Act, the complaint asserts. Advance Tank is a fully integrated industrial construction company that specializes in the design, fabrication and erection of above ground welded steel plate structures. Plaintiff was employed by Defendant as a manual laborer.[BN] The Plaintiff is represented by: Todd Slobin, Esq. Ricardo J. Prieto, Esq. SHELLIST, LAZARZ, SLOBIN LLP 11 Greenway Plaza, Suite 1515 Houston, TX 77046 Phone: (713) 621-2277 Fax: (713) 621-0993 E-mail: tslobin@eeoc.net rprieto@eeoc.net AKARI THERAPEUTICS: July 11 Lead Plaintiff Motion Deadline Set -------------------------------------------------------------- Kahn Swick & Foti, LLC ("KSF") and KSF partner, the former Attorney General of Louisiana, Charles C. Foti, Jr., remind investors that they have until July 11, 2017 to file lead plaintiff applications in a securities class action lawsuit against Akari Therapeutics, Plc (Nasdaq:AKTX), if they purchased the Company's securities between March 30, 2017, and May 11, 2017, inclusive (the "Class Period"). This action is pending in the United States District Court for the Southern District of New York. What You May Do If you purchased securities of Akari Therapeutics and would like to discuss your legal rights and how this case might affect you and your right to recover for your economic loss, you may, without obligation or cost to you, call toll-free at 1-877-515-1850 or email KSF Managing Partner Lewis Kahn (lewis.kahn@ksfcounsel.com). If you wish to serve as a lead plaintiff in this class action, you must petition the Court by July 11, 2017. About the Lawsuit Akari Therapeutics and certain of its executives are charged with failing to disclose material information during the Class Period, violating federal securities laws. The alleged false and misleading statements and omissions include, but are not limited to, that: (i) the Company's CEO, and possibly others, caused false information about the Company to be published, including but not limited to, false information regarding the Phase 2 PNH trial of Coversin; (ii) the Company lacked adequate measures to prevent such behavior; and (iii) as a result of the foregoing, Akari Therapeutics' financial statements were materially false and misleading at all relevant times. On this news, the price of Akari Therapeutics' shares plummeted. About Kahn Swick & Foti, LLC KSF -- http://www.ksfcounsel.com-- whose partners include the Former Louisiana Attorney General Charles C. Foti, Jr., is a law firm focused on securities, antitrust and consumer class actions, along with merger & acquisition and breach of fiduciary litigation against publicly traded companies on behalf of shareholders. The firm has offices in New York, California and Louisiana. [GN] ALLSTATE CORPORATION: Appeal in "Williams" Suit Pending ------------------------------------------------------- The appeal in the case, Christopher Williams, et al. v. Allstate Insurance Company, remains pending, The Allstate Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. The case, Christopher Williams, et al. v. Allstate Insurance Company, is pending in Los Angeles Superior Court and was filed in December 2007. The case involves two classes. The first class includes auto field physical damage adjusters employed in the state of California from January 1, 2005 to the date of final judgment, to the extent the Company failed to pay for off-the- clock work to those adjusters who performed certain duties prior to their first assignments. The other class includes all non- exempt employees in California from December 19, 2006 until June 2011 who received pay statements from Allstate which allegedly did not comply with California law. On April 13, 2016, the court granted the Company's motion to decertify both classes; both classes are thus dissolved unless and until the appellate court orders the classes recertified. On May 17, 2016, plaintiffs filed their notice of appeal. Plaintiff's opening brief was filed on November 22, 2016. Allstate's response was due May 9, 2017. ALLSTATE CORPORATION: "Jimenez" Parties Await Trial Plan Approval ----------------------------------------------------------------- In the case, Jack Jimenez, et al. v. Allstate Insurance Company, no trial date has been scheduled because the parties continue to wait for the court's approval of a trial plan, The Allstate Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. The case, Jack Jimenez, et al. v. Allstate Insurance Company, was filed in the U.S. District Court for the Central District of California in September 2010. The plaintiffs allege that they worked off-the-clock; they also allege other California Labor Code violations resulting from purported unpaid overtime. In April 2012, the court certified a class that includes all adjusters in the state of California, except auto field adjusters, from September 29, 2006 to final judgment. Allstate appealed the court's decision to certify the class, first to the Ninth Circuit Court of Appeals and then to the U.S. Supreme Court. On June 15, 2015, the U.S. Supreme Court denied Allstate's petition for a writ of certiorari. The case was scheduled for trial on September 27, 2016. On May 4, 2016, the court vacated that trial date in part because the court had not approved a trial plan. No trial date has been scheduled because the parties continue to wait for the court's approval of a trial plan. ALLSTATE CORPORATION: Discovery Underway in "Perez" Suit -------------------------------------------------------- The parties in the case, Maria Victoria Perez and Kaela Brown, et al. v. Allstate Insurance Company, are currently engaged in discovery, The Allstate Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. The case of Maria Victoria Perez and Kaela Brown, et al. v. Allstate Insurance Company was filed in the U.S. District Court for the Eastern District of New York. Plaintiffs allege that no- fault claim adjusters have been improperly classified as exempt employees under New York Labor Law and the Fair Labor Standards Act. The case was filed in April 2011, and the plaintiffs are seeking unpaid wages, liquidated damages, injunctive relief, compensatory and punitive damages, and attorneys' fees. On September 16, 2014, the court certified a class of no-fault adjusters under New York Labor Law and refused to decertify a Fair Labor Standards Act class of no-fault adjusters. There are 105 members of the Fair Labor Standards Act class and 137 members of the New York Labor Law class. ALLSTATE CORPORATION: "Rosenberg" Suit Dismissed ------------------------------------------------ The Allstate Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the case, Randy Rosenberg, et al. v. Allstate Fire & Casualty Insurance Company, Allstate Insurance Company, and Allstate Property & Casualty Insurance Company, in the U.S. District Court for the Northern District of Illinois, has been dismissed. The Florida personal injury protection statute permits insurers to pay personal injury protection benefits for reasonable medical expenses based on certain benefit reimbursement limitations which are authorized by the personal injury protection statute (generally referred to as "fee schedules") resulting from automobile accidents. The Company has been involved in litigation challenging whether the Company's personal injury protection policies include sufficient language providing notice of the Company's election to apply the fee schedules. On January 26, 2017, the Florida Supreme Court issued its decision in Allstate Insurance Company v. Orthopedic Specialists, et al., holding that Allstate's language was clear and unambiguous and provided adequate notice of its intent to use the fee schedules. On February 7, 2017, Orthopedic Specialists filed a motion for rehearing, which the Florida Supreme Court denied on March 27, 2017. Thus, the Florida Supreme Court's decision is final. In light of this ruling, the fee schedule issue will be resolved favorably to Allstate in other pending cases. There are three cases with petitions for leave to appeal to the Florida Supreme Court pending. In those cases, three District Courts of Appeal had previously ruled in favor of Allstate. The Florida Supreme Court has issued "show cause" orders in each of those appeals directing the providers to file a response explaining why the Orthopedic Specialists decision is not controlling and why the Florida Supreme Court should not decline to exercise jurisdiction. In one appeal, the provider has acknowledged that Orthopedic Specialists governs. In the other two appeals, the providers assert that their petitions to appeal should be granted because Orthopedic Specialists was wrongly decided, repeating the arguments previously asserted. Allstate's responses are due May 8, 2017. "We expect the Florida Supreme Court to decline exercising jurisdiction," the Company said. The Company was also litigating one class action on this issue, Randy Rosenberg, et al. v. Allstate Fire & Casualty Insurance Company, Allstate Insurance Company, and Allstate Property & Casualty Insurance Company, in the U.S. District Court for the Northern District of Illinois. This case had been stayed by the Illinois federal court pending a decision on this issue by the Florida Supreme Court. On March 31, 2017, the court entered an order pursuant to the parties' joint stipulation, dismissing this case with prejudice. ALLSTATE CORPORATION: Briefing in Romero Proceedings Underway ------------------------------------------------------------- The Allstate Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that briefing in the Romero I and II consolidated proceedings is scheduled to be completed by May 30, 2017. The Company is defending certain matters in the U.S. District Court for the Eastern District of Pennsylvania relating to the Company's agency program reorganization announced in 1999. The principal focus in these matters has related to a release of claims signed by the vast majority of the former agents whose employment contracts were terminated in the reorganization program. The court recently entered a schedule for determining the merits of certain claims asserted in the matters described below, with the release issue to be addressed in unspecified future proceedings. Romero I In 2001, approximately 32 former employee agents, on behalf of a putative class of approximately 6,300 former employee agents, filed a putative class action alleging claims for age discrimination under the Age Discrimination in Employment Act ("ADEA"), interference with benefits under ERISA, breach of contract, and breach of fiduciary duty. Plaintiffs also assert a claim for a declaratory judgment that the release of claims constitutes unlawful retaliation and should be set aside. Plaintiffs seek broad but unspecified "make whole relief," including back pay, compensatory and punitive damages, liquidated damages, lost investment capital, attorneys' fees and costs, and equitable relief, including reinstatement to employee agent status with all attendant benefits. Romero II A putative nationwide class action was also filed in 2001 by former employee agents alleging various violations of ERISA ("Romero II"). This action has been consolidated with Romero I. The Romero II plaintiffs, most of whom are also plaintiffs in Romero I, are challenging certain amendments to the Agents Pension Plan and seek to have service as exclusive agent independent contractors count toward eligibility for benefits under the Agents Pension Plan. Plaintiffs seek broad but unspecified "make whole" or other equitable relief, including loss of benefits as a result of their conversion to exclusive agent independent contractor status or retirement from the Company between November 1, 1999 and December 31, 2000. They also seek repeal of the challenged amendments to the Agents Pension Plan with all attendant benefits revised and recalculated for thousands of former employee agents, and attorneys' fees and costs. The court granted the Company's initial motion to dismiss the complaint. The Third Circuit Court of Appeals reversed that dismissal and remanded for further proceedings. Romero I and II Consolidated Proceedings In 2004, the court ruled that the release was voidable and certified classes of agents, including a mandatory class of agents who had signed the release, for purposes of effectuating the court's declaratory judgment that the release was voidable. In 2007, the court vacated its ruling and granted the Company's motion for summary judgment on all claims. Plaintiffs appealed and in July 2009, the U.S. Court of Appeals for the Third Circuit vacated the trial court's entry of summary judgment in the Company's favor, remanded the case to the trial court for additional discovery, and instructed the trial court to address the validity of the release after additional discovery. Following the completion of discovery limited to the validity of the release, the parties filed cross motions for summary judgment with respect to the validity of the release. On February 28, 2014, the trial court denied plaintiffs' and the Company's motions for summary judgment, concluding that the question of whether the releases were knowingly and voluntarily signed under a totality of circumstances test raised disputed issues of fact to be resolved at trial. Among other things, the court also held that the release, if valid, would bar all claims in Romero I and II. On May 23, 2014, plaintiffs moved to certify a class as to certain issues relating to the validity of the release. The court denied plaintiffs' class certification motion on October 6, 2014, stating, among other things, that individual factors and circumstances must be considered to determine whether each release signer entered into the release knowingly and voluntarily. The court entered an order on December 11, 2014, (a) stating that the court's October 6, 2014 denial of class certification as to release-related issues did not resolve whether issues relating to the merits of plaintiffs' claims may be subject to class certification at a later time, and (b) holding that the court's October 6, 2014 order restarted the running of the statute of limitation for any former employee agent who wished to challenge the validity of the release. In an order entered January 7, 2015, the court denied reconsideration of its December 11, 2014 order and clarified that all statutes of limitations to challenge the release would resume running on March 2, 2015. Since the court's January 7, 2015 order, a total of 459 additional individual plaintiffs have filed separate lawsuits similar to Romero I or sought to intervene in the Romero I action. Trial proceedings commenced to determine the question of whether the releases of the original named plaintiffs in Romero I and II were knowingly and voluntarily signed. Additionally, plaintiffs asserted two equitable defenses to the release which were to be determined by the court and not the jury. As to the first trial proceeding involving ten plaintiffs, the jury reached verdicts on June 17, 2015 finding that two plaintiffs signed their releases knowingly and voluntarily and eight plaintiffs did not sign their releases knowingly and voluntarily. On January 28, 2016, the court entered its opinion and judgment finding in Allstate's favor as to all ten plaintiffs on the two equitable defenses to the release. The trial result is not yet final and may be subject to further proceedings. The remaining two trials for the original Romero I and II plaintiffs were scheduled to commence in the fourth quarter of 2015; however, the order setting these trials was subsequently vacated. On February 1, 2016, these cases were reassigned to a new judge who initially entered orders addressing pending motions for reconsideration of the dismissal of plaintiffs' state law claims, but then vacated those orders. On April 12, 2016, these cases were again reassigned to a new judge. On May 2, 2016, the new judge entered an order vacating the setting of additional release trials, consolidating all of the original and intervening plaintiffs' claims, and granting leave to file a Consolidated Amended Complaint by May 20, 2016. The court entered a second order on May 2, 2016, scheduling deadlines for completion of discovery and filing of summary judgment motions on the merits of plaintiffs' ERISA and ADEA claims, and setting a non-jury ERISA trial to occur in December 2016. The court's order also set deadlines for completion of discovery and summary judgment motions with regard to the remaining claims and defenses by the first quarter of 2017, with a jury trial on those claims and defenses to occur in May 2017. The court subsequently clarified the scope of the scheduled trials, ruling that (a) the December 2016 non-jury trial shall only resolve liability on plaintiffs' claims challenging certain plan amendments under ERISA ("Phase I"); (b) the second trial was scheduled for May 2017 to resolve alleged interference with employee benefits under ERISA and disparate impact under the ADEA, with the court deciding the ERISA claim ("Phase II"); and (c) plaintiffs' ADEA disparate treatment claims will not be resolved in the second trial but will be resolved in a manner to be determined at a later date. On May 4, 2016, the court entered an order denying Allstate's post-trial motion for judgment as a matter of law with respect to the jury's June 17, 2015 verdicts in favor of eight plaintiffs on the issue whether they knowingly and voluntarily signed their releases. On May 20, 2016, a Consolidated Amended Complaint was filed on behalf of 499 plaintiffs, most of whom had previously filed separate lawsuits or intervened in Romero I. Allstate filed a partial motion to dismiss the Consolidated Amended Complaint, which the court granted in part and denied in part on July 6, 2016. Among other things, the court denied without prejudice Allstate's motion to dismiss the state law claims, granted dismissal of plaintiffs' retaliation claims under the ADEA and ERISA. Phase I discovery closed and the Company filed a motion for summary judgment as to all Phase I claims. Plaintiffs did not move for summary judgment. On November 22, 2016, the court granted in part, and denied in part, Allstate's Phase I summary judgment motion. The court determined that there were material issues of disputed fact requiring a trial on plaintiffs' claim challenging certain Plan amendments. The court granted the motion with respect to one plaintiff whose claim the court determined was barred by the statute of limitations. Further, the court granted the motion with respect to two other claims: 1) a claim that a 1993 Plan amendment resulted in an unlawful cutback of benefits; and 2) a claim for breach of fiduciary duty. The parties thereafter proceeded to a bench trial on December 5-6, 2016. On April 27, 2017, the court issued its Phase I findings and opinion and ruled that (a) the Company's 1991 amendments to the Plan did not violate ERISA by improperly cutting back on plaintiffs' benefits, and (b) the Company's interpretation of the Plan's definition of "retire" violated ERISA's anti-cutback rule. The court's order requires the parties to provide further information to determine whether any plaintiffs suffered a loss based on any such cutback. Discovery in Phase II closed, and the Company filed motions for summary judgment on plaintiffs' ADEA claims and ERISA interference with employee benefits claim. Plaintiffs filed a cross-motion for summary judgment on the ERISA claim. On April 21, 2017, the court entered an order granting Allstate's motion for summary judgment on plaintiffs' disparate impact claim under the ADEA. The court reserved resolution of plaintiffs' disparate treatment claim under the ADEA for later individual proceedings. The court also entered an order granting Allstate's motion for summary judgment, and denying plaintiffs' motion for summary judgment, on the ERISA claim. The Phase II trial which had been scheduled to commence on May 8, 2017, was canceled. With respect to the claims not included in Phase I or II, the Company filed a motion requesting that the court sever the claims of all individual plaintiffs who reside outside the Eastern District of Pennsylvania and then transfer those claims to each respective plaintiff's home jurisdiction. The court has not yet ruled on that motion. On April 27, 2017, the court issued an order allowing the parties to file supplemental memoranda addressing their positions on severance and case management in light of the Phase I and II rulings. Briefing on this issue is scheduled to be completed by May 30, 2017. On September 2, 2016, in two cases asserting similar claims to those asserted in Romero I that had been filed on May 15, 2015, the U.S. District Court for the Southern District of Texas entered judgment in Allstate's favor on statute of limitations and other grounds. Plaintiffs did not appeal the judgments. Based on the trial court's February 28, 2014 order in Romero I and II, if the validity of the release is decided in favor of the Company for any plaintiff, that would preclude any damages or other relief being awarded to that plaintiff. The final resolution of these matters is subject to various uncertainties and complexities including how trials, post trial motions, possible appeals with respect to the validity of the release, and any rulings on the merits will be resolved. In the Company's judgment, a loss is not probable. ALTRIA GROUP: Faces 7 Smoking and Health Class Actions in Canada ---------------------------------------------------------------- Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that as of April 27, 2017, Philip Morris USA is a named defendant in 10 health care cost recovery actions in Canada, eight of which also name Altria Group, Inc. as a defendant. PM USA and Altria Group, Inc. are also named defendants in seven smoking and health class actions filed in various Canadian provinces. As of April 27, 2017, PM USA and Altria Group, Inc. are named as defendants, along with other cigarette manufacturers, in seven class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan, British Columbia and Ontario. In Saskatchewan, British Columbia (two separate cases) and Ontario, plaintiffs seek class certification on behalf of individuals who suffer or have suffered from various diseases, including chronic obstructive pulmonary disease, emphysema, heart disease or cancer, after smoking defendants' cigarettes. In the actions filed in Alberta, Manitoba and Nova Scotia, plaintiffs seek certification of classes of all individuals who smoked defendants' cigarettes. Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ALTRIA GROUP: 6 Engle Progeny Cases Set for Trial Thru June 30 -------------------------------------------------------------- Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that as of April 27, 2017, six Engle progeny cases are set for trial through June 30, 2017. There are no individual smoking and health cases and no "Lights/Ultra Lights" class actions or medical monitoring cases against Philip Morris USA set for trial during this period. Cases against other companies in the tobacco industry are scheduled for trial during this period. Trial dates are subject to change. Since January 1999, excluding the Engle progeny cases, verdicts have been returned in 61 smoking and health, "Lights/Ultra Lights" and health care cost recovery cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 41 of the 61 cases. These 41 cases were tried in Alaska (1), California (7), Florida (10), Louisiana (1), Massachusetts (2), Mississippi (1), Missouri (4), New Hampshire (1), New Jersey (1), New York (5), Ohio (2), Pennsylvania (1), Rhode Island (1), Tennessee (2) and West Virginia (2). A motion for a new trial was granted in one of the cases in Florida and in the case in Alaska. In the Alaska case (Hunter), the trial court withdrew its order for a new trial upon PM USA's motion for reconsideration. In December 2015, the Alaska Supreme Court reversed the trial court decision and remanded the case with directions for the trial court to reassess whether to grant a new trial. In March 2016, the trial court granted a new trial and PM USA filed a petition for review of that order with the Alaska Supreme Court, which the court denied in July 2016. The retrial began in October 2016. In November 2016, the court declared a mistrial after the jury failed to reach a verdict. The plaintiff subsequently moved for a new trial, which is scheduled to begin October 16, 2017. Of the 20 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 18 have reached final resolution. As of April 27, 2017, 108 state and federal Engle progeny cases involving PM USA have resulted in verdicts since the Florida Supreme Court's Engle decision as follows: 60 verdicts were returned in favor of plaintiffs; 45 verdicts were returned in favor of PM USA. Three verdicts in favor of plaintiffs were partially or entirely reversed on appeal. Judgments Paid and Provisions for Tobacco and Health Litigation Items (Including Engle Progeny Litigation) After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid in the aggregate judgments and settlements (including related costs and fees) totaling approximately $474 million and interest totaling approximately $183 million as of March 31, 2017. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $83 million, interest totaling approximately $21 million and payment of approximately $43 million in connection with the Federal Engle Agreement. Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ALTRIA GROUP: Class Certification Denied in 60 Cases v. PM USA -------------------------------------------------------------- Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that class certification has been denied or reversed by courts in 60 smoking and health class actions involving Philip Morris USA. Since the dismissal in May 1996 of a purported nationwide class action brought on behalf of allegedly addicted smokers, plaintiffs have filed numerous putative smoking and health class action suits in various state and federal courts. In general, these cases purport to be brought on behalf of residents of a particular state or states (although a few cases purport to be nationwide in scope) and raise addiction claims and, in many cases, claims of physical injury as well. Class certification has been denied or reversed by courts in 60 smoking and health class actions involving PM USA in Arkansas (1), California (1), the District of Columbia (2), Florida (2), Illinois (3), Iowa (1), Kansas (1), Louisiana (1), Maryland (1), Michigan (1), Minnesota (1), Nevada (29), New Jersey (6), New York (2), Ohio (1), Oklahoma (1), Oregon (1), Pennsylvania (1), Puerto Rico (1), South Carolina (1), Texas (1) and Wisconsin (1). Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ALTRIA GROUP: Class Certification Denied in 21 "Lights" Cases ------------------------------------------------------------- Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that as of April 27, 2017, 20 state courts in 21 "Lights" cases have refused to certify class actions, dismissed class action allegations, reversed prior class certification decisions or have entered judgment in favor of Philip Morris USA. Plaintiffs in certain pending matters seek certification of their cases as class actions and allege, among other things, that the uses of the terms "Lights" and/or "Ultra Lights" constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment or breach of warranty, and seek injunctive and equitable relief, including restitution and, in certain cases, punitive damages. These class actions have been brought against PM USA and, in certain instances, Altria Group, Inc. or its other subsidiaries, on behalf of individuals who purchased and consumed various brands of cigarettes, including Marlboro Lights, Marlboro Ultra Lights, Virginia Slims Lights and Superslims, Merit Lights and Cambridge Lights. Defenses raised in these cases include lack of misrepresentation, lack of causation, injury and damages, the statute of limitations, non-liability under state statutory provisions exempting conduct that complies with federal regulatory directives, and the First Amendment. As of April 27, 2017, a total of 5 such cases are pending in various U.S. state courts. Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ALTRIA GROUP: Appeal in "Larsen" Suit Still Pending --------------------------------------------------- Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that one certified class action remains pending on appeal. In August 2005, a Missouri Court of Appeals affirmed the class certification order. In December 2009, the trial court denied plaintiffs' motion for reconsideration of the period during which potential class members can qualify to become part of the class. The class period remains 1995-2003. In June 2010, PM USA's motion for partial summary judgment regarding plaintiffs' request for punitive damages was denied. In April 2010, plaintiffs moved for partial summary judgment as to an element of liability in the case, claiming collateral estoppel from the findings in the case brought by the Department of Justice. The plaintiffs' motion was denied in December 2010. In June 2011, PM USA filed various summary judgment motions challenging the plaintiffs' claims. In August 2011, the trial court granted PM USA's motion for partial summary judgment, ruling that plaintiffs could not present a damages claim based on allegations that Marlboro Lights are more dangerous than Marlboro Reds. The trial court denied PM USA's remaining summary judgment motions. Trial in the case began in September 2011 and, in October 2011, the court declared a mistrial after the jury failed to reach a verdict. In January 2014, the trial court reversed its prior ruling granting partial summary judgment against plaintiffs' "more dangerous" claim and allowed plaintiffs to pursue that claim. In October 2014, PM USA filed motions to decertify the class and for partial summary judgment on plaintiffs' "more dangerous" claim, which the court denied in June 2015. Upon retrial, in April 2016, the jury returned a verdict in favor of PM USA. In May 2016, plaintiffs filed a motion for a new trial, which PM USA opposed in June 2016. In August 2016, the trial court denied plaintiffs' motion for a new trial, plaintiffs filed a notice of appeal and PM USA cross-appealed. In November 2016, the court of appeals dismissed PM USA's cross-appeal without prejudice upon joint motion of the parties. Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ALTRIA GROUP: Still Defends "Carroll" Suit in Delaware ------------------------------------------------------ Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the "Carroll" lawsuit remains pending in Delaware court. In December 2009, the state trial court in Carroll (formerly known as Holmes) (pending in Delaware) denied Philip Morris USA's motion for summary judgment based on an exemption provision in the Delaware Consumer Fraud Act. In January 2011, the trial court allowed the plaintiffs to file an amended complaint substituting class representatives and naming Altria Group, Inc. and PMI as additional defendants. In February 2013, the trial court approved the parties' stipulation to the dismissal without prejudice of Altria Group, Inc. and PMI, leaving PM USA as the sole defendant in the case. In March 2015, plaintiffs moved for class certification and, in July 2015, PM USA filed a summary judgment motion seeking to dismiss plaintiffs' claims in their entirety on preemption grounds. No further updates were provided in the Company's SEC report. Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ALTRIA GROUP: "Gwynn" Lawsuit Still Pending in California --------------------------------------------------------- Altria Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the company continues to defend against the "Gwynn" lawsuit in California. UST and/or its tobacco subsidiaries have been named in certain actions in West Virginia brought by or on behalf of individual plaintiffs against cigarette manufacturers, smokeless tobacco manufacturers and other organizations seeking damages and other relief in connection with injuries allegedly sustained as a result of tobacco usage, including smokeless tobacco products. Included among the plaintiffs are three individuals alleging use of USSTC's smokeless tobacco products and alleging the types of injuries claimed to be associated with the use of smokeless tobacco products. USSTC, along with other non-cigarette manufacturers, has remained severed from such proceedings since December 2001. UST and/or its tobacco subsidiaries also have been named in a number of other individual tobacco and health suits over time. Plaintiffs' allegations of liability in these cases are based on various theories of recovery, such as negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, breach of implied warranty, addiction and breach of consumer protection statutes. Plaintiffs seek various forms of relief, including compensatory and punitive damages, and certain equitable relief, including but not limited to disgorgement. Defenses raised in these cases include lack of causation, assumption of the risk, comparative fault and/or contributory negligence, and statutes of limitations. In July 2016, USSTC and Altria Group, Inc. were named as defendants, along with other named defendants, in one such case in California (Gwynn). In August 2016, defendants removed the case to federal court. In September 2016, plaintiffs filed a motion to remand the case back to state court, which the court granted in January 2017. Altria Group, Inc.'s wholly-owned subsidiaries included Philip Morris USA Inc. ("PM USA"), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. ("Middleton"), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly-owned subsidiary of PM USA; Sherman Group Holdings, LLC and its subsidiaries ("Nat Sherman"), which are engaged in the manufacture and sale of super premium cigarettes and the sale of premium cigars; and UST LLC ("UST"), which through its wholly-owned subsidiaries, including U.S. Smokeless Tobacco Company LLC ("USSTC") and Ste. Michelle Wine Estates Ltd. ("Ste. Michelle"), is engaged in the manufacture and sale of smokeless tobacco products and wine. Altria Group, Inc.'s other operating companies included Nu Mark LLC ("Nu Mark"), a wholly-owned subsidiary that is engaged in the manufacture and sale of innovative tobacco products, and Philip Morris Capital Corporation ("PMCC"), a wholly-owned subsidiary that maintains a portfolio of finance assets, substantially all of which are leveraged leases. Other Altria Group, Inc. wholly-owned subsidiaries included Altria Group Distribution Company, which provides sales, distribution and consumer engagement services to certain Altria Group, Inc. operating subsidiaries, and Altria Client Services LLC, which provides various support services in areas such as legal, regulatory, finance, human resources and external affairs, to Altria Group, Inc. and its subsidiaries. ARCHER-DANIELS-MIDLAND: Seeks Dismissal of Farmers' Suit -------------------------------------------------------- Archer-Daniels-Midland Company said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the Company has moved to dismiss state court actions by farmers and other parties pending in Illinois state court. The Company is a party to numerous lawsuits pending in various U.S. state and federal courts arising out of Syngenta Corporation's (Syngenta) marketing and distribution of genetically modified corn products, Agrisure Viptera and Agrisure Duracade, in the U.S. First, the Company brought a state court action in Louisiana against Syngenta in 2014, alleging that Syngenta was negligent in commercializing its products before the products were approved in China. Second, the Company is a putative class member in a number of purported class actions filed beginning in 2013 by farmers and other parties against Syngenta in federal courts and consolidated for pretrial proceedings in a multidistrict litigation (MDL) proceeding in federal court in Kansas City, Kansas, again alleging that Syngenta was negligent in commercializing its products. In the fourth quarter of 2015, Syngenta filed third-party claims against the Company and other grain companies seeking contribution in the event that Syngenta is held liable in these lawsuits; the courts dismissed these third-party claims on April 4, 2016, and the Company is therefore no longer a third-party defendant in the MDL. Third, the Company and other grain companies have been named as a defendant in numerous individual and purported class action suits filed by farmers and other parties in state and federal courts beginning in the fourth quarter of 2015, alleging that the Company and other grain companies were negligent in failing to screen for genetically modified corn. On September 6, 2016, the court in the Minnesota state MDL proceedings granted the Company's motion to dismiss the complaints against the Company in those actions, and on January 4, 2017, a federal court in the Southern District of Illinois similarly dismissed all of the pending complaints against the Company there. Currently, the Company remains a defendant in only certain state court actions by farmers and other parties pending in Illinois state court, which the Company has moved to dismiss as well. The Company denies liability in all of the actions in which it has been named as a third-party defendant or defendant and is vigorously defending itself in these cases. All of these actions are in pretrial proceedings. At this time, the Company is unable to predict the final outcome of this matter with any reasonable degree of certainty, but believes the outcome will not have a material adverse effect on its financial condition, results of operations, or cash flows. AT&T: Faces Customer Complaints Over Promotions Overcharging ------------------------------------------------------------ Anna Werner and Megan Towey, writing for CBS News, reports that Gary Raia signed up for an AT&T promotion -- internet and DirecTV for around a $100 a month for two years. When his first bill in July was nearly double that, he complained to AT&T. "Every month you open up your envelope and you go, 'OK, what's the surprise this month?'" "As I am talking to them, I get on the internet and I look at the special," Raia told CBS News. "Their special is $99.99 and I say, 'can you just look at the internet?'" Months later, he was still paying a lot more. "That tells me that they're cheating people," he said. In an AT&T commercial a voiceover can be heard advertising: The bundle price you sign up for is guaranteed to stay the same price for two years. AT&T told CBS News they "fully honor the terms" of their promotions. But CBS News' investigation uncovered more than 4,000 complaints against AT&T and DirecTV related to deals, promotions and overcharging in the past two years. One woman in Florida tried to call AT&T to have them explain her account charges. "I keep getting bills for $79.49 and my contract says I was only going to pay $24.99 for two years," she told AT&T over the phone. Over three hours, five different representatives gave her five different explanations. A female AT&T representative is heard saying: "There's some specials on discounts that I'm thinking was actually being removed in error. Your bills are no longer combined. It wasn't done on our end -- it was done on your end." A second female representative said: "The pricing you were getting was because you were a new customer with the services, now you are an existing customer." The customer then declares: "But you guys gave me a two-year agreement." And that lower price she was promised? A male AT&T representative is heard saying: "I know this is no shape or form it is your fault. But that's an expired promotion. Once it's gone . . . it's gone now." And customers who then decide to cancel the service often have to pay an early termination fee, which can cost hundreds of dollars. Paul Bland is a lawyer who specializes in consumer law. He told CBS News all of AT&T's contracts require customers to use arbitration -- paid for by AT&T. "There's nothing they're going to be able to do for you," said Bland, who works for Public Justice. The company says it's faster and cheaper for consumers. But CBS News found that -- out of nearly 150 million customers -- only 18 went through arbitration for small claims in the past two years. "So it turns out to be a license to steal," he said. "In my experience, when a large company has a lot of consumers coming forward and saying we feel like we were bait and switched. We were promised one thing and then we got something else. The company knows about it." That's something customers might claim in a class-action lawsuit - - except AT&T's contract also forbids class actions. CBS News reached out to AT&T multiple times for comment. They sent us this statement but otherwise would not comment: "Like other companies, we frequently introduce promotions to provide our customers with the best services and products at the best price. These special offers vary in terms of pricing and duration. If a customer signs up for one of these offers, we fully honor the terms through the promotion's completion. Customers who enrolled in one of our promotional offers and believe they did not receive the full benefits should contact customer service." [GN] AVALONBAY COMMUNITIES: Settlement Fairness Hearing in July ---------------------------------------------------------- Avalonbay Communities, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that a fairness hearing will be held in July 2017 to determine whether the settlement of the Edgewater Casualty Loss class action will receive final approval. In January 2015, a fire occurred at the Company's Avalon at Edgewater apartment community located in Edgewater, New Jersey ("Edgewater"). Edgewater consisted of two residential buildings. One building, containing 240 apartment homes, was destroyed. The second building, containing 168 apartment homes, suffered minimal damage and has been repaired. The Company has established protocols for processing claims from third parties who suffered losses as a result of the fire, and many third parties have contacted the Company's insurance carrier and settled their claims. Three class action lawsuits have been filed against the Company on behalf of occupants of the destroyed building and consolidated in the United States District Court for the District of New Jersey. The Company has agreed with class counsel to the terms of a proposed settlement which would provide a claims process (with agreed upon protocols for instructing the adjuster as to how to evaluate claims) and, if needed, an arbitration process to determine damage amounts to be paid to individual claimants covered by the class settlement. In March 2017 the District Court granted preliminary approval of the class action settlement and in July 2017 a fairness hearing will be held to determine whether the settlement will receive final approval. A fourth class action, being heard in the same federal court, was filed against the Company on behalf of residents of the second Edgewater building that suffered minimal damage. Recently, a fifth class action lawsuit was filed against the Company seeking to certify a class on behalf of both buildings and other third parties. That action is currently stayed pending the decision by those plaintiffs either to be included in the class settlement or to formally opt-out. In addition to the class action lawsuits described, 19 lawsuits representing approximately 146 individual plaintiffs have been filed and are currently pending in the Superior Court of New Jersey Bergen County -- Law Division. All of these state court cases have been consolidated by the court. These plaintiffs, if eligible to be class members under the class settlement that has been preliminarily approved as described above, must formally opt- out of that class action settlement by May 17, 2017 if they want to continue their individual actions. The Company believes that it has meritorious defenses to the extent of damages claimed in all of the suits. There are also five subrogation lawsuits that have been filed against the Company by insurers of Edgewater residents who obtained renters insurance; it is the Company's position that in the majority of the applicable leases the residents waived subrogation rights. One of these lawsuits has been dismissed on that basis and the other four are currently pending in the United States District Court for the District of New Jersey. The District Court recently denied the Company's motions seeking dismissal on this basis. The Company will reassess the viability of this defense after conducting additional discovery. Having settled many third party claims through the insurance claims process, the Company currently believes that any potential remaining liability to third parties (including any potential liability to third parties determined in accordance with the class settlement described above, if approved) will not be material to the Company and will in any event be substantially covered by the Company's insurance policies. However, the Company can give no assurances in this regard and continues to evaluate this matter. AvalonBay Communities, Inc., is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986 (the "Code"). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. BAKER HUGHES: Booth Family Trust Files Suit Over GE Merger ---------------------------------------------------------- Booth Family Trust, on behalf of itself and all others similarly situated, Plaintiff, v. Baker Hughes Incorporated, Martin S. Craighead, Gregory D. Brenneman, Clarence P. Cazalot, Jr., William H. Easter III, Lynn L. Elsenans, Anthony G. Fernandes, Claire W. Gargalli, Pierre H. Jungels, James A. Lash, J. Larry Nichols, James W. Stewart and Charles L. Watson, Defendants, Case No. 4:17- cv-01457 (S.D. Tex., May 10, 2017), seeks to enjoin the stockholder vote on the merger of Baker Hughs with General Electric. Baker Hughes will combine with General Electric Company's oil and gas business wherein Newco LLC will own the combined businesses of Baker Hughes and GE Oil and Gas. The complaint asserts that Merger documents fails to set forth any of the employment related discussions and negotiations that occurred between GE and Baker Hughes' executive officers, whether any of GE's prior proposals or indications of interest mentioned management retention or the potential for Board members to sit on the combined company's board of directors as well as communications regarding post-transaction employment during the negotiation of the merger and confidentiality agreements with a subsidiary of GE and other strategic companies and financial sponsors that expressed an interest in an acquisition of Baker Hughes' core completions business, and control business in the Gulf of Mexico and offshore cementing businesses. Baker Hughes is a Delaware corporation with its principal executive offices located at 17021 Aldine Westfield Road, Houston, Texas, 77073. The Company is a supplier of oilfield services, products, technology and systems for the oil and natural gas industry. [BN] Plaintiff is represented by: Thomas E. Bilek, Esq. THE BILEK LAW FIRM, L.L.P. 700 Louisiana, Suite 3950 Houston, TX 77002 Tel: (713) 227-7720 - and - Richard A. Acocelli, Esq. Michael A. Rogovin, Esq. Kelly C. Keenan, Esq. WEISSLAW LLP 1500 Broadway, 16th Floor New York, NY 10036 Tel: (212) 682-3025 Fax: (212) 682-3010 BARRICK GOLD: "Broadfoot" Seeks Damages Over Share Price Drop ------------------------------------------------------------- Shepard Broadfoot, individually and on behalf of all others similarly situated, Plaintiff, v. Barrick Gold Corporation, Kelvin Dushnisky, Catherine Raw, Richard Williams and Jorge Palmes, Defendants, Case No. 1:17-cv-03507 (S.D.N.Y., May 10, 2017), seeks compensatory damages in favor of Plaintiff, including interest thereon, reasonable costs and expenses incurred in this action, including counsel fees and expert fees and such other and further relief for violation of the Securities and Exchange Act. Barrick is a gold mining company that purportedly engages in exploration and mine development and also produces and sells gold and copper. Company has a history of pipe ruptures and chemical spills at its Valedero mine in the San Juan Province of Argentina. On March 28, 2017, the Veladero pipe carrying gold-bearing solution ruptured. On this news, the Company's share price declined $2.15 per share, or 11.3%, to close at $16.89 per share on April 25, 2017, on unusually heavy trading volume. Defendants failed to disclose that the pipes and safety systems at the Veladero mine were not robust enough to prevent spills, and that Argentinian authorities would restrict the addition of cyanide to the Veladero mine's heap leach facility and require remedial work. [BN] Plaintiffs are represented by: Lesley F. Portnoy, Esq. GLANCY PRONGAY & MURRAY LLP 122 East 42nd Street, Suite 2920 New York, NY 10168 Telephone: (212) 682-5340 Facsimile: (212) 884-0988 Email: lportnoy@glancylaw.com - and - Lionel Z. Glancy, Esq. Robert V. Prongay, Esq. Casey E. Sadler, Esq. Charles H. Linehan, Esq. GLANCY PRONGAY & MURRAY LLP 1925 Century Park East, Suite 2100 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 BAYFRONT HMA: MSPA Claims Suit Removed to S.D. Florida ------------------------------------------------------ The action styled MSPA Claims I, LLC v. Bayfront HMA Medical Center, LLC d/b/a Bayfront Medical Center, pending in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, has been removed to the United States District Court for the Southern District of Florida on May 10, 2017, and assigned Case No. 17-005774 CA. The case is originally captioned MSPA CLAIMS 1, LLC, a Florida limited Liability company, as assignee of Florida Healthcare Plus, on behalf of itself and all other similarly situated Medicare Advantage Organizations in the State of Florida, Plaintiff, v. BAYFRONT HMA MEDICAL CENTER, LLC, d/b/a BAYFRONT MEDICAL CENTER, a Florida Profit Corporation, Defendant, Case No. 1:17-cv-21733-DPG. Plaintiff asserted three claims against Bayfront in the complaint: (i) a private cause of action under the Medicare Secondary Payor Act, (ii) a claim for violation of the Florida Deceptive and Unfair Trade Practices Act and (iii) a claim for unjust enrichment.[BN] The Defendant is represented by: Alan D. Lash, Esq. Greg J. Weintraub, Esq. LASH & GOLDBERG LLP Suite 1200, Miami Tower 100 Southeast Second Street Miami, FL 33131-2100 Phone: (305) 347-4040 Fax: (305) 347-4050 E-mail: alash@lashgoldberg.com gweintraub@lashgoldberg.com BIMBO FOODS: Faces "Franze" Lawsuit Alleging Misclassification -------------------------------------------------------------- NICHOLAS FRANZE & GEORGE SCHRUFER, JR. on behalf of themselves, And of all similarly situated individuals, Plaintiffs, against BIMBO FOODS BAKERIES DISTRIBUTION, INC., FiKlA GEORGE WESTON BAKERIES DISTRIBUTION, INC., Defendants, Case No. 7:17-cv-03556 (S.D.N.Y., May 12, 2017), challenges Defendant's alleged unlawful misclassification of Plaintiffs as independent contractors instead of employees. Plaintiffs allege violations of the Fair Labor Standards Act, and New York Labor Law. Defendant Bimbo is in the business of wholesale distribution of fresh bakery products to retail and food outlets, restaurants and institutions. Plaintiffs delivered and picked up baked goods and performed merchandising duties of retail bakery products on behalf of Defendants in New York. Bimbo calls these Distributors "Independent Operators".[BN] The Plaintiff is represented by: Randy J. Perlmutter, Esq. KANTROWITZ, GOLDHAMER & GRAIFMAN, P.C. 747 Chestnut Ridge Road - Suite 200 Chestnut Ridge, NY 10977 Phone: (845) 356-2570 Fax: (845) 356-4335 E-mail: rperlmutter@kgglaw.com BUMBLE BEE: Walmart's Price Fixing Suit Amended to Add Defendants ----------------------------------------------------------------- Dave Rice, writing for San Diego Reader, reports that a class- action lawsuit filed by retail giant Walmart accuses canned tuna's three biggest players -- including San Diego's Bumble Bee and Chicken of the Sea -- of conspiring to fix prices on "shelf stable" seafood products. While the suit has been pending since late last year, it was amended recently, naming 56 alleged parties involved. These include a host of senior vice presidents, as well as John Signorino, former President and CEO of Chicken of the Sea, and Chris Lischewski, who occupies the same role at Bumble Bee. Starkist, a Pittsburg-based competitor, also had its CEO and President In Soo Cho listed among the accused. The CEOs, which also include current Chicken of the Sea/Thai Union leader Shue Wing Chan, allegedly "spoke frequently" in order to "discuss pricing and customers." According to the suit, plaintiffs claim that the defendants colluded to reduce can sizes across the industry, issue secret price lists, limit promotions and discounts, and collectively refuse to offer consumer products containing tuna without fish aggregating devices. The last practice is among those that drew criticism from environmentalists at Greenpeace in a report rating the industry last month. The Department of Justice announced that two defendants at Bumble Bee, former executives Ken Worsham and Walter Scott Cameron, had agreed to plead guilty to federal price fixing charges between 2011 and 2013, and to cooperate with investigators. The company has agreed to pay a $25 million criminal fine, which could rise as high as $81.5 million, while Cameron is expected to personally be fined $25,000 and face a 10-to-16-month prison sentence. Though the offenses carry a sentence of up to 10 years, Cameron is expected to testify against other defendants in exchange for leniency. The class action, however, accuses the canners of much more widespread corruption, dating back to "at least" the beginning of 2003, and continuing into 2015, when lawsuits against the big three began to emerge. The main suit has been split into four parts, with tracks for wholesalers, consumer purchases, restaurateurs, and those who choose to opt out of any class action settlement. [GN] CANADA: Six Nations Class Action Against HDI Can Proceed -------------------------------------------------------- Jim Windle, writing for, reports that Ontario Justice R.A. Lococo has been assigned the class action case against the HDI and lawyer Aaron Detlor on behalf of members of the Men's Fire and Six Nations people at large. The date is yet to be set; however, Mr. Justice Arrel has assigned the case to Justice Lococo, who is this region's only class action justice. Contrary to reports elsewhere, the class action case is not dead and is in fact making its way through the courts. When the case is opened by Justice Lococo, lawyer Aaron Detlor and financial advisor Elvera Garlow will be cross examined on statements made earlier in discovery regarding the affairs of the Haudenosaunee Development Institute which Mr. Detlor was instrumental in establishing on behalf of the Confederacy Chiefs. For several years since its inception at around the same time as the Caledonia standoff, Six Nations band members have been trying to get answers from the HDI relative to specific financial arrangements it has made with developers and energy companies. But more so, about who is making what from the HDI deals, including Mr. Detlor's retainer agreement with the HCCC, the money paid to Turtle Island News publisher Lynda Powless' to act as HDI's media person. They also want answers about any other unspecified salaries or funds paid to individuals. Frustrated with stonewalls, Wilfred Davie and Bill Monture launched a class action suit on behalf of the community. The men themselves insist they are not seeking any kind of personal financial reward, only that the HDI become transparent with the people they are supposed to represent. It has been the HDI's stance that they work for the Haudenosaunee Confederacy Chiefs Council and not the people, per se. As such, they believe a forensic investigation of the HDI's finances is in order. The court agreed and moved the case on to Justice Lococo to determine if the HDI will be ordered to reveal certain aspects of their operation that until now, which the Men's Fire and others allege have been kept secret from the Six Nations public at large. [GN] CANADA: CFB Esquimalt Blocks Ad Seeking Sexual Assault Victims -------------------------------------------------------------- Amy Smart and Katie Derosa, writing for Times Colonist, report that Canadian Forces Base Esquimalt has blocked an advertisement in the base newspaper asking survivors of sexual harassment, assault and discrimination to come forward, saying it might "amplify the sexual harassment issue." The rejection conflicts with statements by Canadian Forces top brass that they are committed to rooting out sexual misconduct in the military ranks, lawyer Rajinder Sahota said. His law firm, Acheson, Sweeney, Foley, Mr. Sahota, attempted to place the ad in the Lookout in December, but was told it didn't meet the intent of the newspaper. "If their words matched their deeds, they would permit this type of advertisement to be published within the Lookout, as opposed to trying to censor it," Mr. Sahota said. The law firm is preparing a class-action lawsuit on behalf of survivors of sexual misconduct in the military. Mr. Sahota said more than 100 survivors have come forward. He said the ad offered support to survivors beyond legal advice, including counselling and psychiatric support and "a safe, open, honest and privileged or confidential space to share your story." It quoted Gen. Jonathan Vance, chief of the defence staff, saying: "Harmful sexual behaviour is a real and present threat in our institution. Those who commit such acts are betraying the values of the country they are sworn to defend." Mr. Sahota said he went back and forth with the editor of the Lookout, who suggested changes to the ad. "Our newspaper cannot be used as a vehicle to further amplify the sexual harassment issue currently in the mainstream media," editor Melissa Atkinson said in an email to Mr. Sahota. "We welcome a generic ad that makes no reference to CAF, DND, and the military." An earlier email forwarded from an advertising representative said the paper can't quote uniformed personnel in a business advertisement, regardless of subject, since the military can't be seen to support one business over others. The ad request was forwarded up the command chain to the base commander's office and the public affairs department. Capt. Jenn Jackson, public affairs officer for CFB Esquimalt, said the proposed advertisement did not meet the intent of the base newspaper. "It is important to note that Canadian Armed Forces newspapers are a public affairs tool for the chain of command, and in reviewing ads, we seek to strike the most appropriate balance between meeting the information needs of the military community and the potential impact on the Department of National Defence and the Canadian Armed Forces," she said in an email. The topic itself wasn't considered controversial, she said. "The chain of command takes this issue extremely seriously and continues to employ a variety of strategies and approaches to instil institutional change." In December, Mr. Sahota also filed a notice of civil claim against the attorney general of Canada, on behalf of client Nicola Peffers, alleging sexual assault and harassment of women and LGBTQ members of the Canadian Armed Forces. The proposed suit alleges the institutional culture of the military fosters an environment where assault and harassment are the norm, and lack of effective leadership permits a culture of abuse to fester. Ms. Peffers, the lead plaintiff, said she was sexually assaulted by her supervisors and peers. Mr. Sahota said the law firm hopes to certify the class action this year. Although the ad never ran, the firm has connected with more than 100 complainants, he said, through social media and word of mouth. Almost all of those are from B.C., with the majority on Vancouver Island, he said. A Statistics Canada survey released in November found 4.8 per cent of female Canadian Forces members reported being sexually assaulted over the past year, compared with 1.2 per cent of male members. "If I'm in a position with DND, I shouldn't be concerned about a lawsuit, I should be concerned about how to stop this kind of behaviour from being pervasive in the ranks," Mr. Sahota said. Two law firms in Ontario and one in the Maritimes have also filed class actions, Mr. Sahota said. [GN] CARDINAL HEALTH: 58 IVC Product Liability Lawsuits Pending ---------------------------------------------------------- Cardinal Health, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that as of April 28, 2017, the Company and its Cordis business have been named as defendants in 58 product liability lawsuits involving claims by approximately 500 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. These lawsuits seek a variety of remedies, including unspecified monetary damages. "We are vigorously defending ourselves in these lawsuits," the Company said. Cardinal Health, Inc. is an Ohio corporation formed in 1979 and is a globally integrated healthcare services and products company providing customized solutions for hospital systems, pharmacies, ambulatory surgery centers, clinical laboratories and physicians' offices. CELADON GROUP: "Depickere" Sues Over Share Price Drop ----------------------------------------------------- Sven Depickere, Individually and on behalf of all others similarly situated, Plaintiff, v. Celadon Group, Inc., Bobby L. Peavler and Paul A. Will, Defendants, Case 2:17-cv-03319 (D.N.J. Sup., May 10, 2017) seeks damages in the amount of her respective unpaid overtime compensation, prejudgment interest, and attorneys' fees and costs pursuant to New York Labor Laws. Celadon provides long-haul, full-truckload freight service across the United States, Canada, and Mexico. Its subsidiary, Celadon Trucking Service, Inc., also provides supply chain management solutions such as warehousing and dedicated fleet services, as well as freight brokerage services. Defendants failed to disclose that Celadon's equity contribution to its joint venture with Element Financial Corp. was $68.2 million, rather than the $100 million contribution as reported in its public filings; that Celadon is being actively investigated by the SEC; and that its financial statement for quarter ended December 31, 2016 could not be relied upon. Shares of the Company fell $0.85 per share or approximately 14% from its previous closing price to close at $5.40 per share on April 5, 2017, damaging investors including the Plaintiff, says the complaint. [BN] Plaintiff is represented by: Laurence M. Rosen, Esq. THE ROSEN LAW FIRM, P.A. 609 W. South Orange Avenue, Suite 2P South Orange, NJ 07079 Tel: (973) 313-1887 Fax: (973) 833-0399 Email: lrosen@rosenlegal.com CELADON GROUP: Block & Leviton Expands Class Period --------------------------------------------------- Block & Leviton LLP, a securities litigation firm representing investors nationwide, on May 17 announced an expanded Class Period in securities class actions against Celadon Group Inc. ("CGI" or the "Company") (NYSE: CGI) and reminds shareholders of the June 19, 2017 lead plaintiff deadline. On May 17, 2017, Block & Leviton filed a securities fraud lawsuit against CGI, expanding the class period from January 27, 2016 through May 2, 2017, inclusive ("Class Period"). Shareholders who purchased or otherwise acquired CGI securities during the Class Period and have questions about their legal rights or want to become involved in the litigation are encouraged to contact attorney Bradley Vettraino at (617) 398-5600, by email at Bradley@blockesq.com or by visiting www.blockesq.com/cgi. On April 5, 2017, Prescience Point Research Group published a report on the investor website Seeking Alpha alleging that "CGI has used . . .. manipulative accounting practices to hide its insolvent condition from investors and creditors." On this news, CGI shares fell nearly 14%, to close at $4.20 on April 19, 2017. On April 19, the same research group published a follow-up report claiming that the research group was denied information about CGI from the government due to an apparent ongoing SEC investigation. On this news, shares to fall another 5% to close at $4.20 on April 19, 2017. Then, on May 1, 2015, CGI disclosed that "the Company's financial statements for the fiscal year ended June 30, 2016 and quarters ended September 30 and December 31, 2016, and related reports of [CGI's auditor], should not be relied upon." On this news, shares plunged 55% to close at $1.80 on May 2, 2017, causing tens of millions in losses to investors. The lead plaintiff deadline in the securities actions against CGI is June 19, 2017. As a member of the class, you may seek to file a motion to serve as a lead plaintiff by June 19, 2017, or take no action and remain an absent class member. Confidentiality assured to whistleblowers or others with information relevant to this investigation is assured. Block & Leviton LLP -- -- http://www.blockesq.com-- is a Boston- based law firm representing investors nationwide. The firm's lawyers have collectively been prosecuting securities cases on behalf of individual and institutional investors for over 50 years, and have recovered billions of dollars on their behalf. Block & Leviton's investigations into corporate wrongdoing were recently covered by the New York Times. [GN] CEMIG: Chairman da Silva Faces Class Suit over Misconduct --------------------------------------------------------- Companhia Energetica De Minas Gerais disclosed in its Form 20-F report filed with the Securities and Exchange Commission on May 16, 2017, for the fiscal year ended December 31, 2016, that Mr. Jose Afonso Bicalho Beltrao da Silva is a defendant in a Civil Class Action involving administrative misconduct. On October 20, 2015, Mr. Jose Afonso Bicalho Beltrao da Silva, the Chair of CEMIG Holding's Board of Directors, was convicted in Brazilian federal court (1st Federal Circuit) for reckless management in connection with the granting of irregular loans when he was the CEO of Banco do Estado de Minas Gerais, between 1995 and 1998. As a result of this conviction, Mr. Da Silva was prohibited from holding executive or management positions at financial institutions in Brazil for a period of eight years. Immediately thereafter, Mr. Da Silva appealed to the Court of Appeals of the 1st Federal Circuit, on the grounds that the ruling judge did not have the necessary authority to hear the case, as Mr. Da Silva is currently the Secretary of Minas Gerais State Treasury and, therefore, the case should have been heard and trialed by the Minas Gerais State Court of Appeals, and not by a Brazilian federal court. The appeal is currently pending. CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. CEMIG: Awaits Judgment in Consumer Classification Case Appeal ------------------------------------------------------------- Companhia Energetica De Minas Gerais disclosed in its Form 20-F report filed with the Securities and Exchange Commission on May 16, 2017 for the fiscal year ended December 31, 2016, that CEMIG Distribuicao S.A. and Agencia Nacional de Energia Eletrica continue to await judgment in an appeal from a consumer classification case filed by the Federal Public Attorneys' Office. The Federal Public Attorneys' Office filed a class action against CEMIG D and ANEEL, to avoid exclusion of consumers from classification in the Low-income Residential Tariff Sub-category, and also requesting an order for CEMIG D to pay 200% of the amount allegedly paid in excess by consumers in that sub-category. Judgment at first instance was given in favor of the Federal Public Attorneys, and CEMIG D and ANEEL have filed an appeal with TRF. A decision by the Court in this case has been pending since March 2008. As of December 31, 2016 the amount involved in this case was approximately R$ 254 million. The chance of loss has been classified as 'possible' due to the existence of other judgments, both in the judiciary and in the administrative sphere, that are in favor of the argument put forward by CEMIG D. CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. CEMIG: Unit Still Faces Suit over Excessive Tariffs --------------------------------------------------- Companhia Energetica De Minas Gerais disclosed in its Form 20-F filed with the Securities and Exchange Commission on May 16, 2017 for the fiscal year ended December 31, 2016, that CEMIG Distribuicao S.A. still faces class action over post-2002 tariffs. CEMIG D is a defendant in several legal actions, and in particular a class action filed by the Municipal Association for Protection of the Consumer and the Environment (Associacao Municipal de Protecao ao Consumidor e ao Meio Ambiente, or "Amprocom"), challenging amounts of tariffs charged by CEMIG D after 2002 and its method of calculation, and applying for restitution, to all the consumers allegedly damaged in the processes of Periodic Review and Annual Adjustment of tariffs, in the period 2002 to 2009, of any amounts allegedly unduly charged. As of December 31, 2016, the amount involved in this action was R$ 317 million. The chance of loss in this action has been assessed as 'possible', due to the fact that there is no precedent for the matter in dispute in this case. CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. CEMIG: To Appeal Judgment in Favor of CET Employees --------------------------------------------------- Companhia Energetica De Minas Gerais disclosed in its Form 20-F report filed with the Securities and Exchange Commission on May 16, 2017 for the fiscal year ended December 31, 2016, that the company intends to appeal a judgment against CEMIG Distribuicao S.A. that requires it to pay damages for pain and suffering to employees of a subcontractor. On November 7, 2016 subsidiary judgment was given in the first instance against CEMIG D in a class action brought by the Federal Public Attorneys' Office for Labor-related Cases (Ministerio Publico do Trabalho), in which a turnkey subcontractor, CET Engenharia Ltda, and its shareholders, were also defendants, ordering them to pay damages for pain and suffering to employees of CET, and R$ 2,500 (two thousand five hundred Reais) as indemnity to each of the employees named in the action, who had allegedly been subjected to working conditions analogous to slavery that violated Employment Ministry Regulatory Rules No. 7 and 10. The court found that the employees had not been subject to any restraint on their freedom of movement. The judgment also ordered that, after passing of any final appeal, communicating documents should be issued to the Federal Public Attorneys and the State Public Attorneys of Minas Gerais, due to the conclusion that workers had been submitted to conditions analogous to slavery. The Company will appeal against the judgment in relation to payment of the amounts stated in it, based on all the inspection documentation made during the execution of the contract entered into with the service providing company, and also on the understanding that there was no demonstration of any act practiced by CEMIG D related to the case in question, nor was there any procedural weakness on its part during the execution of the agreement, capable of turning the Company's liability under the terms of the Precedent No. 331 of the Superior Labor Court. Also, in relation to the order to pay indemnity for non-compliance with Employment Ministry Rules, the STF has already stated the position that there can be no characterization of work as being in conditions analogous to slavery when there is no restriction upon the workers' freedom of movement. As of December 31, 2016, the total amount involved in this lawsuit was approximately R$ 1.4 million and the chance of loss was assessed as 'possible' in the light of the above statement. CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. CEMIG: AMAR's Class Action Appeal Tossed ---------------------------------------- Companhia Energetica De Minas Gerais disclosed in its Form 20-F report filed with the Securities and Exchange Commission on May 16, 2017, for the fiscal year ended December 31, 2016, that AMAR's appeal in a class action lawsuit has been denied by the 2nd Civil Chamber of the Minas Gerais Appeal Court. The Company, CEMIG Geracao e Transmissao S.A., Southern Electric and FEAM are defendants in a class action filed on February 5, 2007, by the Regional Environmental Association of Patrocinio, which involves a claim for indemnifying and redressing environmental damages caused by the Nova Ponte hydroelectric power plant. As of December 31, 2013, the amount involved in this action was approximately R$1.8 billion. However, taking into account the phase of the case, and the changes in the legislation subsequent to the distribution of the action, it was possible for the technical staff to reappraise the claims and for the amount to be disbursed in the event of loss in the action to be re-evaluated, and reduced. As of December 31, 2015, the amount involved in this case was approximately R$ 1.3 billion. Of this total, the part for which the chance of loss was assessed as 'possible' was R$ 314 million; and the part for which the chance of loss was assessed as 'remote' was approximately R$ 1 billion. On March 11, 2016, judgment was given against the application by the plaintiff AMAR. Therefore, AMAR filed an appeal, which was denied by the 2nd Civil Chamber of the Minas Gerais Appeal Court on March 3, 2017. As of December 31, 2016, the total amount involved in this case was approximately R$ 1.5 billion, and the chance of loss was assessed as 'remote.' CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. CEMIG: Class Suits Want Funding for Environmental Protection ------------------------------------------------------------ Companhia Energetica De Minas Gerais disclosed in its Form 20-F filed with the Securities and Exchange Commission on May 16, 2017 for the fiscal year ended December 31, 2016, that the Company is facing class action lawsuits requiring it to invest for environmental protection. The Public Attorney's Office of the State of Minas Gerais has brought class actions requiring the Company to invest at least 0.5% of the gross annual operational revenue, since 1997, of the Emborcacao, Pissarrao, Funil, Volta Grande, Poquim, Parauna, Miranda, Nova Ponte, Rio de Pedras and Peti plants, in environmental protection and preservation of the water tables of the municipalities where Cemig's power plants are located, and proportional indemnity for allegedly irreparable environmental damage caused, arising from omission to comply with Minas Gerais State Law 12503/97. CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. CEMIG: Class Suits Want Formation of Preservation Areas ------------------------------------------------------- Companhia Energetica De Minas Gerais disclosed in its Form 20-F filed with the Securities and Exchange Commission on May 16, 2017 for the fiscal year ended December 31, 2016, that the Public Attorneys' Office of Minas Gerais State has filed class actions requiring the formation of a Permanent Preservation Area (APP) around the reservoir of the Capim Branco hydroelectric plant, suspension of the effects of the environmental licenses, and recovery of alleged environmental damage. Based on the opinion of its legal advisors in relation to the changes that have been made in the new Forest Code and in the case law on this subject, the Company has classified the probability of loss in this dispute as 'possible'. The estimated value of the contingency is R$ 71 million (R$ 64 million on December 31, 2015). CEMIG is a Brazilian power company headquartered in Belo Horizonte capital of the state of Minas Gerais. The company is one of the largest power generators and distributors in Brazil being responsible for 12% of the national distribution. COLUMBINE EMERGENCY: "Nitzkorski" Seeks to Recover Upaid OT Wages ----------------------------------------------------------------- GUNNAR NITZKORSKI, in his individual capacity and on behalf of others similarly situated, Plaintiffs, v. COLUMBINE EMERGENCY MEDICAL SERVICES INC., d/b/a Columbine Ambulance Service, COLUMBINE OXYGEN SERVICE, INC. d/b/a Columbine Oxygen and Medical, and VINCENT CISSELL, an individual, Defendants, Case No. 1:17-cv- 01158 (D. Col., May 10, 2017), alleges that Defendants paid Plaintiff and others similarly situated a set amount per shift, but neglected to pay them overtime premium pay for all hours over 40 worked in the workweek. The case alleges violation of the Fair Labor Standards Act, the Colorado Wage Claim Act, and the Colorado Minimum Wage Act, as implemented by the Colorado Minimum Wage Order. Plaintiff Gunnar Nitzkorski worked for Columbine Ambulance Service as a paramedic and ambulance driver.[BN] The Plaintiff is represented by: Penn A. Dodson, Esq. ANDERSONDODSON, P.C. 11 Broadway, Suite 615 New York, NY 10004 Phone: 212.961.7639 E-mail: (646) 998-8051 E-mail: penn@andersondodson.com - and - Alexander L. Gastman, Esq. ANDERSONDODSON, P.C. 11 Broadway, Suite 615 New York, NY 10004 Phone: 212.961.7639 Fax: (646) 998-8051 E-mail: alex@andersondodson.com COREPOWER: Yoga Students Want $1.65MM Wage Settlement Approved -------------------------------------------------------------- Robert Iafolla, writing for Reuters, reports that yoga students have asked a federal judge in San Francisco to approve a $1.65 million settlement to resolve allegations that a national chain of yoga studios violated wage and hour laws with two clean-for-yoga programs. In a motion filed on May 16, the students told U.S. Magistrate Judge Maria-Elena James that the settlement would fairly compensate class members who participated in CorePower Yoga's cleaning programs. One program, which ended in 2015, allowed students to exchange cleaning services for free classes, while the second paid students but required them to spend a large portion of those wages to buy discounted memberships, the students said. [GN] CVS HEALTH: Discovery Underway in Indiana Pension Fund Suit ----------------------------------------------------------- CVS Health Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that discovery has commenced in the case, Indiana State District Council of Laborers and HOD Carriers Pension and Welfare Fund v. Omnicare, Inc. et al. (U.S. District Court for the Eastern District of Kentucky). In February 2006, two substantially similar putative class action lawsuits were filed and subsequently consolidated. The consolidated complaint was filed against Omnicare, three of its officers and two of its directors and purported to be brought on behalf of all open-market purchasers of Omnicare common stock from August 3, 2005 through July 27, 2006, as well as all purchasers who bought shares of Omnicare common stock in Omnicare's public offering in December 2005. The complaint alleged violations of the Securities Exchange Act of 1934 and Section 11 of the Securities Act of 1933 and sought, among other things, compensatory damages and injunctive relief. After dismissals and appeals to the United States Court of Appeals for the Sixth Circuit, the United States Supreme Court remanded the case to the district court. In October 2016, Omnicare filed an answer to plaintiffs' third amended complaint, and discovery commenced. CVS Health Corporation, together with its subsidiaries, is a pharmacy innovation company helping people on their path to better health. CVS HEALTH: Still Defends Corcoran & Podgorny Suits in N.D. Ill. ---------------------------------------------------------------- CVS Health Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the Company continues to defend against the cases, Corcoran et al. v. CVS Health Corporation (U.S. District Court for the Northern District of California) and Podgorny et al. v. CVS Health Corporation (U.S. District Court for the Northern District of Illinois). These putative class actions were filed against the Company in July and September 2015. The cases were consolidated in United States District Court in the Northern District of California. Plaintiffs seek damages and injunctive relief on behalf of a class of consumers who purchased certain prescription drugs under the consumer protection statutes and common laws of certain states. Several third-party payors filed similar putative class actions on behalf of payors captioned Sheet Metal Workers Local No. 20 Welfare and Benefit Fund v. CVS Health Corp. (U.S. District Court for the District of Rhode Island) and Plumbers Welfare Fund, Local 130 v. CVS Health Corporation (U.S. District Court for the District of Rhode Island) in February and August 2016. In all of these cases the plaintiffs allege the Company overcharged for certain prescription drugs by not submitting as the pharmacy's usual and customary price the price available to members of the CVS Health Savings Pass program. In the consumer case (Corcoran), the Court denied plaintiffs' motion for certification of an 11-state class without prejudice. The Company continues to defend these actions. CVS Health Corporation, together with its subsidiaries, is a pharmacy innovation company helping people on their path to better health. CVS HEALTH: Amended Complaint in "Barchock" Suit Dismissed ---------------------------------------------------------- CVS Health Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the court recently granted the Company's motion to dismiss the plaintiffs' amended complaint in the case, Barchock et al. v. CVS Health Corporation et al. (U.S. District Court for the District of Rhode Island). In February 2016, an ERISA class action lawsuit was filed against the Company, the Benefit Plans Committee of the Company, and Galliard Capital Management, Inc., by Mary Barchock, Thomas Wasecko, and Stacy Weller, purportedly on behalf of the 401(k) Plan and the Employee Stock Ownership Plan of the Company (the "Plan"), and participants in the Plan. The complaint alleges that the defendants breached fiduciary duties owed to the plaintiffs and the Plan by investing too much of the Plan's Stable Value Fund in short-term money market funds and cash management accounts. CVS Health Corporation, together with its subsidiaries, is a pharmacy innovation company helping people on their path to better health. CVS HEALTH: Still Defends Barnett & Boss Suits in New Jersey ------------------------------------------------------------ CVS Health Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the Company continues to defend against the cases, Barnett et al. v. Novo Nordisk Inc., et al. and Boss, et al. v. CVS Health Corporation, et al.(both pending in the U.S. District Court for the District of New Jersey). These putative class actions were filed against the Company and other pharmacy benefit managers ("PBMs") and manufacturers of insulin in March 2017. Plaintiffs in both cases allege that the PBMs and manufacturers have engaged in a conspiracy whereby the PBMs sell access to their formularies by demanding the highest rebates, which in turn causes increased list prices for insulin. The primary claims are antitrust claims, claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), violations of state unfair competition and consumer protection laws and in Boss, claims pursuant to the Employee Retirement Income Security Act ("ERISA"). The Barnett plaintiffs seek to represent a nationwide class of all persons who paid any portion of the purchase prices for a prescription for certain insulin products at a price calculated by reference to a benchmark. The Boss plaintiffs purport to represent multiple nationwide classes including a non-ERISA Employee/Exchange Plan class, an ERISA class, a Medicare class and an uninsured class. CVS Health Corporation, together with its subsidiaries, is a pharmacy innovation company helping people on their path to better health. DAVITA INC: Faces Class Suit by Peace Officers' Annuity Fund ------------------------------------------------------------ DaVita Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the Company is defending against the Peace Officers' Annuity and Benefit Fund of Georgia Securities Class Action Civil Suit. On February 1, 2017, the Peace Officers' Annuity and Benefit Fund of Georgia filed a putative federal securities class action complaint in the U.S. District Court for the District of Colorado against the Company and certain executives. The complaint covers the time period of August 2015 to October 2016 and alleges, generally, that the Company and its executives violated federal securities laws concerning the Company's financial results and revenue derived from patients who received charitable premium assistance from an industry-funded non-profit organization. The complaint further alleges that the process by which patients obtained commercial insurance and received charitable premium assistance was improper and "created a false impression of DaVita's business and operational status and future growth prospects." The Company disputes these allegations and intends to defend this action accordingly. DaVita operates two major divisions, DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG, formerly known as HealthCare Partners or HCP). DEMOCRATIC NATIONAL: Judge Has Yet to Rule on Class Action ---------------------------------------------------------- Chris Riotta, writing for Newsweek, reports that a class action lawsuit alleging the Democratic National Committee worked in conjunction with Hillary Clinton's 2016 campaign to keep Bernie Sanders out of the White House has been raging on in the courtrooms for months on end--and yet, most people have no idea of its existence, in large part thanks to the mainstream media's total lack of coverage. Jared Beck, a Harvard Law graduate and one of the several attorneys who filed the suit against the DNC and its former chairperson Debbie Wasserman Schultz, wants retribution for donations made by supporters to the Vermont senator's campaign, citing six legal claims of the DNC's deceptive conduct, negligent misrepresentation and fraud. The DNC violated Article 5, Section 4 of its own charter by working with a single campaign to effectively choose who would win the Democratic ballot, the attorneys stated in the suit. Sanders' supporters have faced an uphill battle in the courts ever since August, when the DNC managed to block hearings from beginning by successfully claiming it wasn't served the lawsuit correctly. The committee then immediately requested the lawsuit be dismissed after it was refiled September 2, according to Observer. Since then, Schultz and the DNC's attorneys have defended the organization against accusations that it failed in its duties to maintain neutrality throughout last year's Democratic primaries. The most recent court hearing on the case was held on April 25, during which the DNC reportedly argued that the organization's neutrality among Democratic campaigns during the primaries was merely a "political promise," and therefore it had no legal obligations to remain impartial throughout the process. Attorneys behind the lawsuit also said the DNC failed to properly secure Sanders' donor information. A pending order from the judge will determine whether the court sides with the DNC, which faced backlash after leaked emails showed CNN allegedly gave the Clinton campaign planned questions ahead of a debate between the former secretary of state, and Sanders, who quickly rose to prominence and popularity among liberals but failed to garner enough votes to secure the Democratic ticket. The court decision could have major consequences for a party internally grappling with how to define itself in Trump's America. Sanders, who represented a leftward shift from the Clinton and Obama centrists who typically receive large backings from wealthy Democratic donors, has become the symbolic face of the resistance under the new White house administration. He's also the most popular politician alive in the U.S., according to recent polling. At a time when most Americans no longer feel represented by the Democratic or Republican Party, a class action lawsuit could prove millions of supporters of an embattled progressive campaign right, or further support President Donald Trump's notion that the 2016 election was, in fact, rigged. [GN] DEMOCRATIC NATIONAL: Judge Hears Motion to Dismiss Class Action --------------------------------------------------------------- Leslie Eastman, writing for Legal Insurrection, reports that, by now, every Legal Insurrection reader will likely have been exposed to a deluge of media related to the Washington Post's assertions about President Donald Trump disclosing highly classified information in his meeting with Russian Foreign Minister and Ambassador. However, the intense media focus on the White House has meant substantially less ink, electrons and time have been spent covering two, significant class action lawsuits against the Democratic National Committee: (1) It's shenanigans during the primary to weigh the nomination in Hillary Clinton's favor. (2) Failure to pay its campaign workers for overtime. DNC'S MOTION TO DISMISS HEARING This class action lawsuit has been making its way through the court system since October of 2016, and reports are now available covering the hearing in the U.S. District Court of Southern Florida in which the DNC requested the base be dismissed. The lawsuit alleges that the DNC and DNC chair Debbie Wasserman Schultz violated the DNC charter and helped tip the scales in favor of Hillary Clinton. As most conservatives usually have little interest in liberal politics, and the media has even less desire to cover this topic, it took some searching to discover interesting analysis from Bernie supporter and Washington DC show host Tim Black and Huffington Post author H.A. Goodman: Seven Jaw-Dropping Revelations From DNC Fraud Lawsuit's Motion to Dismiss. The article they discuss was a report on the hearing itself that discussed these seven revelations, and analyzed them in full. 1. The crux of the Motion to Dismiss asserts the Judge is not in a position to determine how the Democratic Party conducts its nominating process. 2. The Democratic Party views itself as having authority to favor a candidate without any legal repercussions. 3. Judge Zloch appeared skeptical, noting the Democrats' interest to obscure the guarantee of the Party's impartiality clause. 4. The Democrats insist that "impartial" cannot be defined, so the DNC's impartiality clause is akin to a political promise in that it can not be guaranteed. 5. DNC's legal counsel appeared unaware of any procedures in place to determine how the DNC supports state parties as they conduct individual primary nominating contests. 6. The Democrats' lawyers takes the position that while the Democrats are not legally obligated to conduct the primary fairly, they did in fact conduct the 2016 primary fairly. 7. In closing remarks, U.S. Federal Court district judge emphasized: "Democracy demands the truth". To the 7th point, the DNC is likely to be a bit unhappy with the judge's line of questioning. FAILURE TO PAY OVERTIME The second class-action lawsuit charges that the DNC and others involved in the 2016 national convention in Philadelphia failed to pay overtime wages to some 50 national field organizers. The DNC adopted an official plank at the convention calling for a $15 an hour national minimum wage, more than double the current federal level of $7.25 an hour. "The Democratic Party believes that supporting workers through higher wages, workplace protections, policies to balance work and family, and other investments," it said. That apparently didn't extend to the organizers, many of whom worked 80-hour weeks, according to Justin Swidler, a Cherry Hill, Pa., lawyer who filed the lawsuit. "They got paid a flat salary of $3,000 a month, which isn't even minimum wage for some of the hours that they were working," Mr. Swidler told CBS. Meanwhile, the Philadelphia 2016 Host Committee used some of the leftover money it raised for the DNC to pay nearly $1 million bonuses to staff and volunteers. The rewards ranged from $500 for interns to $310,000 for executive director Kevin Washo. It looks as if I will have to monitor the developments because it seems our elite media has no desire to report on real scandals involving Democrats. [GN] DIAMOND RESORTS: Fournier Seeks to Terminate Timeshare Membership ----------------------------------------------------------------- Gisele Fournier and Rejean Fournier, individually and on behalf of all others similarly situated, Plaintiffs, v. Diamond Resorts International Club, Inc. and Does 1 through 10, inclusive, Defendants, Case No. 5:17-cv-00911 (C.D. Cal., May 10, 2017), seeks statutory, actual and treble damages, equitable and injunctive relief, restitution, costs and reasonable attorney's fees and such other and further relief for violations of the Truth in Lending Act, Telephone Consumer Protection Act of 1991, California False Advertising Act of the California Business and Professions Code, Consumers Legal Remedies Act and the California Welfare and Institutions Code. Defendant sells timeshare contracts where Plaintiffs obtained a membership whereby they would acquire timeshare that could then be redeemed in exchange for the right to use and occupy accommodations at various resorts. Plaintiffs grew dissatisfied with their membership due to the unavailability of accommodations and inability to make reservations at certain times of the year. Plaintiffs also contest the fees and their confusing statement of account which reflected unexpected dues and interests. Fournier now wants to terminate their timeshare and get a refund of their 2016 payments. Their calls were met with answering machines. [BN] The Plaintiff is represented by: Amir J. Goldstein, Esq. 8032 West Third Street, Suite 201 Los Angeles, CA 90048 Tel (323) 937-0400 Fax (866) 288-9194 DIGITALGLOBE INC: "Bussey" Sues Over Shadowy Merger Deal -------------------------------------------------------- Royce Bussey, individually and on behalf of all others similarly situated, Plaintiffs, v. Digitalglobe, Inc., General Howell M. Estes III, Nick S. Cyprus, Roxanne Decyk, Lawrence A. Hough, Warren C. Jenson, L. Roger Mason, Jr., Jeffrey R. Tarr, Kimberly Till, Eddy Zervigon, Defendants, Case No. 1:17-cv-01159, (D. Colo., May 10, 2017), seeks to preliminarily and permanently enjoin defendants from proceeding with, consummating, or closing the acquisition of DigitalGlobe by MacDonald, Dettwiler and Associates Ltd. The suit further seeks rescissory damages in case the merger is consummated, costs of this action, including reasonable allowance for plaintiff's attorneys' and experts' fees and such other and further relief under the Securities and Exchange Act. McDonald will acquire all of the outstanding shares of DigitalGlobe common stock for $17.50 in cash. Transaction was valued at approximately $35 per share, or $2.4 billion. The merger deal is allegedly marred with conflicts of interest on the part of the management during the negotiation process, rendering it unfair to Plaintiff. DigitalGlobe provides imagery solutions and other services to customers for a wide variety of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration, and infrastructure management. [BN] Plaintiff is represented by: Richard A. Acocelli, Esq. Michael A. Rogovin, Esq. Kelly C. Keenan, Esq. WEISSLAW LLP 1500 Broadway, 16th Floor New York, NY 10036 Tel: (212) 682-3025 - and - Donald J. Enright, Esq. LEVI & KORSINSKY, LLP 1101 30th Street, N.W., Suite 115 Washington, DC 20007 Tel: (202) 524-4290 F. MILLER: "Hannon" Sues Over FLSA Violations --------------------------------------------- SHANNON HANNON, MELISSA TORRES, SHELLY GUIDRY, Plaintiffs VERSUS F. MILLER PROPERTIES, LLC, Defendant, Case No. 3:17-cv-00304-JWD- EWD (M.D. La., May 10, 2017), was brought on behalf of Plaintiff and all other similarly situated employees, including but not limited to (a) Class I: all persons employed by Miller at any location as a waiter/server who suffered deductions from cash wages for employee meal credit, (b) Class II: all employees who were told they had to make up in tips the difference between their cash wage and $7.25 per hour in order to earn minimum wage, and/or (c) Class III: all employees subject to minimum wage tip credit who regularly spent more than 20% of their work time bussing tables, washing dishes and performing janitorial work not directly related to customer service. The Defendant operates restaurants. Plaintiffs were employed as servers.[BN] The Plaintiff is represented by: Christopher Zaunbrecher, Esq. 413 Travis Street, Suite 200 Post Office Drawer 51367 Lafayette, LA 70505-1367 Phone: (337) 237-4070 Fax: (337) 233-8719 FERNANDEZ BROTHERS: Faces Class Action Over Labor Law Violations ---------------------------------------------------------------- Wadi Reformado, writing for Northern California Record, reports that employees have filed a class-action lawsuit against Fernandez Brothers Inc., citing alleged unpaid wages and violation of minimum wage and workers' compensation laws. Regina Gonzales Gomez and Fidel Guerrero Comofort filed a complaint on April 4 in the U.S. District Court for the Northern District of California alleging that the defendants failed to pay them fair wages. According to the complaint, the plaintiffs allege that they suffered damages from not being paid minimum wages and from not being paid all wages upon termination. The plaintiffs hold the defendants responsible for allegedly failing to provide adequate meals and rest breaks to the plaintiffs. The plaintiffs request a trial by jury and seek damages for unpaid minimum wages, liquidated damages, unpaid rest period wages, unpaid premium wages, restitution, penalties for inaccurate wage statements, unpaid wages, actual damages, statutory damages, interest, all legal fees and any other relief as the court deems just. They are represented by Gregory N. Karasik -- greg@karasiklawfirm.com -- of Karasik Law Firm in Los Angeles. U.S. District Court for the Northern District of California Case number 5:17-cv-01863-HRL [GN] FRESNO, CA: Second Group of Residents Joins Water Class Action -------------------------------------------------------------- Tim Sheehan, writing for Fresno Bee, reports that a second group of northeast Fresno residents are suing the city over water problems -- including lead and discoloration -- that they say lasted for years before officials took concerted action to solve the concerns. Brian Kabateck, an attorney from Los Angeles, is leading the team representing homeowners Jackie Flannery, Guadalupe Meza, Ronda Rafidi, Shann Conner, Marirose Larkin, Patricia Wallace-Rixman, Harry Rixman and Kelly Unruh in the potential class-action suit filed on May 17 in Fresno County Superior Court. The case revolves around water provided by the city's Northeast Surface Water Treatment Facility. It treats canal water from Millerton and Pine Flat lakes to distribute to about 15,000 homes and other water customers throughout that part of the city. The suit alleges that the city for years ignored reports from residents about discolored water coming from faucets in homes plumbed with galvanized pipes since shortly after the plant opened in 2004. In early 2016, social media posts sparked a realization among homeowners that problems were not isolated to only a few residences, but were more widespread than they had realized. The grounds for the suit are similar to one filed last fall by a legal team led by Raymond Boucher, an attorney in Woodland Hills - - the problems are related to water chemistry issues at the treatment plant and how the treated water differs from pumped well water that for years exclusively served city residents. Experts last fall said the differences in the water likely caused deposits of scale and rust to be dislodged from inside of galvanized pipes, causing discoloration. Testing of some homes indicated the presence of lead in the water, in some instances at levels higher than "action levels" set by the U.S. Environmental Protection Agency. Both suits assert that the city knew before it built the plant, from a consultant's 1998 report, that a change in the water supply could cause problems for homeowners. "This case shines a spotlight on how the city, rather than protecting its residents from the dangers of lead in its drinking water, actively promoted, designed and approved changes to its water supply systems that it knew would lead to the risk of corrosion and leaching of metals in its piping, including the introduction of iron and lead into residents' drinking water," the new lawsuit states. Mr. Kabateck told The Bee on May 17 that he believes it is "very likely" that the two cases will ultimately be merged into one. His team, which includes attorney Frank Pitre of Burlingame and Michael Gatto of Oakland, has been working collaboratively with Mr. Boucher, New Jersey attorney Esther Berezofsky and Stuart Chandler of Fresno since last year. The second lawsuit aims to represent owners of homes built with galvanized pipes before 2004, when the treatment plant began producing water. The number of potential clients is unknown, Mr. Kabateck said, "but we believe it's a fairly large number in the thousands." Messrs. Kabateck and Boucher both worked on a 2001 case in Southern California's Santa Clarita Valley, where more than 4,600 home and condo owners sued developers and pipe manufacturers over defective galvanized pipes imported from South Korea. The case eventually led to a $41 million settlement in which each plaintiff received up to $9,000 to cover the cost of repairs to their homes for damage caused by the faulty plumbing. The water chemistry issues at the core of the lawsuit could reverberate well beyond northeast Fresno. The city is in the process of building another surface water treatment plant in southeast Fresno that would serve many more residents in areas where there is likely a greater concentration of homes plumbed with galvanized pipes. Since last year, Fresno's public utilities department has been tinkering with treatment strategies to reduce the instances of water discloration; experts are continuing to conduct tests in hopes of prevent a repeat of the problems when the southeast plant becomes operational in 2018. [GN] GENERAL MOTORS: Defends Subpoena in Ignition Switch MDL ------------------------------------------------------- Ryan Boysen, John Kennedy and Cara Salvatore, writing for Law360, report that GM fought back on May 16 against efforts to quash a subpoena it issued to a class action website for information about ads placed there by attorneys representing drivers suing the automaker over allegedly defective ignition switches, saying the information is both relevant and not privileged. GM subpoenaed all documents involving communications between Top Class Actions and the drivers' attorneys two weeks ago, after several plaintiffs recently testified they'd found out about the ongoing ignition switch multidistrict litigation through ads on the site. The drivers' attorneys shot back, saying the information was subject to attorney-client privilege and also irrelevant, calling the subpoena a fishing expedition for "evidence of improper solicitation of plaintiffs." GM said in the May 16 letter that's not true, pointing to several disclaimers on TCA's site to back up its claims. "The TCA website warns plaintiffs and all others that 'LEGAL INFORMATION IS NOT LEGAL ADVICE' . . . [and] advises TCA's users that 'content and/or information provided by user to TCA through this web site is non-confidential and non-proprietary," GM said. The site "further cautions users that TCA 'cannot guarantee that the information you submit to us will not end up in the hands of the company . . . that you are complaining about." GM says facts such as whether or not drivers claimed to have experienced an alleged defect when corresponding with attorneys through the site, and whether they claimed their vehicles had lost value as a result of the alleged defects are "clearly relevant" to the MDL. GM also claims that, because TCA is a third-party, the drivers' attorneys have no standing to quash the subpoena. A spokeswoman for TCA told Law360 the company is still reviewing GM's response. TCA's president, Scott Hardy, said this is the first time in its 10-year existence that it has ever been subpoenaed for information relating to a court case that's been covered on the site. "Frankly, we're not sure why we were subpoenaed in this case, but we're working closely with legal counsel to make sure that our viewers, clients and business are protected," Mr. Hardy told Law360. TCA is a website that provides class action news and other resources to consumers, and describes itself as a service aimed at helping consumers find, submit claims for and get compensation for class action settlements. GM says the warnings described above and various others that appear on TCA's site clearly indicate to its users that their information is not protected by attorney-client privilege, contrary to what the drivers' attorneys argued, and therefore it should be allowed to subpoena them. The faulty switch suits, which have since been consolidated into an MDL, allege that design defects in certain models of GM cars led keys to slip out of the ignition switch in car crashes, shutting off the car and preventing the air bags from deploying, among other things. Hundreds of deaths have been attributed to the design flaws, which vary from model to model, and GM initiated an extensive recall of the affected cars in 2014. GM has been fighting the suits tooth-and-nail for years, and the next round of bellwether trials, which centers on the switches placed in Cadillacs, is set to begin later this year. As is customary, both sides have been pulling out all the stops in preparation for those trials, hotly contesting what evidence will be admitted and what arguments are permissible, among other things. Last month, GM even tried to resurrect an earlier defense that had been shot down by the Second Circuit last year, saying a subsequent ruling by the same court meant the MDL claims should be thrown out wholesale, because GM's 2009 bankruptcy process shielded the automaker from them. That argument was strongly denounced by the drivers' attorneys, and it doesn't appear U.S. District Judge Jesse M. Furman has addressed it yet one way or the other. GM declined to comment on May 17, and the drivers' counsel did not respond to a request for comment. The drivers are represented by Steve W. Berman of Hagens Berman, Elizabeth J. Cabraser of Lieff Cabraser and Bob Hilliard of Hilliard Munoz. GM is represented by Richard Godfrey -- richard.godfrey@kirkland.com -- and Andrew Bloomer -- andrew.bloomer@kirkland.com -- of Kirkland & Ellis LLP. The case is In re: General Motors LLC Ignition Switch Litigation, case number 1:14-md-02543, in the U.S. District Court for the Southern District of New York. [GN] GERBER PRODUCTS: "Hobbs" Alleges False Ad of Good Start Gentle -------------------------------------------------------------- LINDA HOBBS, individually and as a representative of the class, Plaintiff, vs. GERBER PRODUCTS CO., a corporation, d/b/a NESTLE NUTRITION, NESTLE INFANT NUTRITION, AND NESTLE NUTRITION NORTH AMERICA, Defendant, Case No. 1:17-cv-03534 (N.D. Ill., May 10, 2017), accuses Defendants of committing a pattern of deceit and unfair business practices in the marketing and sale of Good Start Gentle, a line of infant formula. Gerber Products Company, doing business as Nestle Infant Nutrition, manufactures and markets food and care items for infants and children from birth through age 3.[BN] The Plaintiff is represented by: Edward A. Wallace, Esq. Adam Prom, Esq. WEXLER WALLACE LLP 55 W. Monroe St. #3300 Chicago, IL 60603 Phone: 312-346-2222 Fax: 312-346-0022 Email: eaw@wexlerwallace.com Email: ap@wexlerwallace.com - and - Stephen J. Fearon, Jr., Esq. Paul V. Sweeny, Esq. SQUITIERI & FEARON, LLP 32 East 57th St., 12th Floor New York, NY 10022 Phone: (212) 421-6492 Fax: (212) 421-6553 Email: stephen@sfclasslaw.com Email: paul@sfclasslaw.com - and - Daniel Keller, Esq. Dan C. Bolton, Esq. KELLER, FISHBACK & JACKSON LLP 28720 Canwood Street, Suite 200 Agoura Hills, CA 91301 Phone: (818) 342-7442 Fax: (818) 342-7616 Email: dkeller@kfjlegal.com Email: dbolton@kfjlegal.com HALYARD HEALTH: To Challenge $450MM Surgical Gown Suit Verdict -------------------------------------------------------------- Halyard Health, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the Company intends to file a motion for judgment notwithstanding the verdict, which will argue that the court should reverse a jury's verdict in related to the surgical gown litigation. The Company said, "We have an Indemnification Obligation for, and have assumed the defense of, the matter styled Bahamas Surgery Center, LLC v. Kimberly-Clark Corporation and Halyard Health, Inc., No. 2:14-cv-08390-DMG-SH (C.D. Cal.) ("Bahamas"), filed on October 29, 2014. In that case, the plaintiff brought a putative class action asserting claims for common law fraud (affirmative misrepresentation and fraudulent concealment) and violation of California's Unfair Competition Law in connection with our marketing and sale of MicroCool surgical gowns. On November 8, 2016, the court certified a California-only class arising from fraud by omission, but it rejected certification of a California- only class for damages and injunctive relief arising from affirmative fraud, and it also rejected certification of a nationwide "issue" class. The court also rejected the plaintiff's request for "full restitution" damages, meaning the full value of the gowns. Instead, the court determined that damages, if any, would be based on the difference between the actual purchase price of the gowns and what the purchase price would have been had the allegedly omitted information been known by the purchasers at the time of purchase." "On April 7, 2017, after a two-week trial, a jury returned a verdict for the plaintiff, finding that Kimberly-Clark was liable for $4 million in compensatory damages (not including prejudgment interest) and $350 million in punitive damages, and that Halyard was liable for $0.3 million in compensatory damages (not including prejudgment interest) and $100 million in punitive damages. We intend to challenge the verdict through post-trial motions and, if necessary, appeal to a higher court. For instance, we intend to file a motion for judgment notwithstanding the verdict, which will argue that the court should reverse the jury's verdict in whole or in part because it was based on insufficient facts and/or did not correctly apply the law. As an alternative, we may seek a new trial. "Additionally, we intend to challenge the jury's punitive damages award as not being supported by the facts and for being excessive in violation of due process under the U.S. Constitution. The U.S. Supreme Court has stated that the Constitutional outer limit for the ratio between punitive damages and compensatory damages in cases such as ours is approximately 9 to 1 or lower, and we believe that in a case such as this one the ratio should be lower. We intend to rely on this and other legal authority in seeking to reduce the jury's punitive damages award, which totaled more than 100 times the compensatory damages assessed against the defendants (including a ratio of approximately 382 to 1 as to the Company). We intend to continue our vigorous defense of the Bahamas matter. "We have notified Kimberly-Clark that we have reserved our rights to challenge any purported obligation to indemnify Kimberly-Clark for the punitive damages awarded against them. In connection with our reservation of rights, on May 1, 2017, we filed a complaint in the matter styled Halyard Health, Inc. v. Kimberly-Clark Corporation, Case No. BC659662 (County of Los Angeles, Superior Court of California). In that case, we seek a declaratory judgment that we have no obligation, under the Distribution Agreement or otherwise, to indemnify, pay, reimburse, assume, or otherwise cover punitive damages assessed against Kimberly-Clark in Bahamas Surgery Center, LLC, et al. v. Kimberly-Clark Corporation and Halyard Health, Inc., No. 14-CV-08390 (C.D. Cal., originally filed on October 29, 2014), or any Expenses or Losses (as defined in the Distribution Agreement) associated with an award of punitive damages. "On May 2, 2017, Kimberly-Clark filed a complaint in the matter styled Kimberly-Clark Corporation v. Halyard Health, Inc., Case No. 2017-0332-____ (Court of Chancery of the State of Delaware). In that case, Kimberly-Clark seeks a declaratory judgment that (1) we must indemnify them for all damages, including punitive damages, assessed against them in the Bahamas matter, (2) we have anticipatorily and materially breached the Distribution Agreement by our failure to indemnify them, and (3) we are estopped from asserting, or have otherwise waived, any claim that we are not required to indemnify them for all damages, including punitive damages, that may be awarded in the Bahamas matter." Halyard Health, Inc. is a medical technology company focused on eliminating pain, speeding recovery and preventing infection for healthcare providers and patients. HALYARD HEALTH: Motion to Dismiss "Jackson" Suit Pending -------------------------------------------------------- A motion to dismiss the case, Jackson v. Halyard Health, Inc., Robert E. Abernathy, Steven E. Voskuil, et al., remains pending, Halyard Health, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. The Company said, "We were served with a complaint in a matter styled Jackson v. Halyard Health, Inc., Robert E. Abernathy, Steven E. Voskuil, et al., No. 1:16-cv-05093-LTS (S.D.N.Y.), filed on June 28, 2016. In that case, the plaintiff brings a putative class action against the Company, our Chief Executive Officer, our Chief Financial Officer and other defendants, asserting claims for violations of the Securities Exchange Act, Sections 10(b) and 20(a). The plaintiff alleges that the defendants made misrepresentations and failed to disclose certain information about the safety and effectiveness of our MicroCool gowns and thereby artificially inflated the Company's stock prices during the respective class periods. The alleged class period for purchasers of Kimberly-Clark securities who subsequently received Halyard Health securities is February 25, 2013 to October 21, 2014, and the alleged class period for purchasers of Halyard Health securities is October 21, 2014 to April 29, 2016." "On February 16, 2017, we moved to dismiss the case. We intend to continue our vigorous defense of this matter." Halyard Health, Inc. is a medical technology company focused on eliminating pain, speeding recovery and preventing infection for healthcare providers and patients. HCP INC: Boynton Beach Action in Early Stages --------------------------------------------- HCP, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the class action lawsuit by Boynton Beach Firefighters' Pension Fund is in its early stages. On May 9, 2016, a purported stockholder of the Company filed a putative class action complaint, Boynton Beach Firefighters' Pension Fund v. HCP, Inc., et al., Case No. 3:16-cv-01106-JJH, in the U.S. District Court for the Northern District of Ohio against the Company, certain of its officers, HCRMC, and certain of its officers, asserting violations of the federal securities laws. The suit asserts claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and alleges that the Company made certain false or misleading statements relating to the value of and risks concerning its investment in HCRMC by allegedly failing to disclose that HCRMC had engaged in billing fraud, as alleged by the U.S. Department of Justice in a pending suit against HCRMC arising from the False Claims Act. The plaintiff in the suit demands compensatory damages (in an unspecified amount), costs and expenses (including attorneys' fees and expert fees), and equitable, injunctive, or other relief as the Court deems just and proper. As the Boynton Beach action is in its early stages and a lead plaintiff has not yet been named, the defendants have not yet responded to the complaint. The Company believes the suit to be without merit and intends to vigorously defend against it. HCP, Inc., a Standard & Poor's ("S&P") 500 company, is a Maryland corporation that is organized to qualify as a real estate investment trust ("REIT") which, together with its consolidated entities (collectively, "HCP" or the "Company"), invests primarily in real estate serving the healthcare industry in the United States ("U.S."). The Company acquires, develops, leases, manages and disposes of healthcare real estate and provides financing to healthcare providers. The Company's diverse portfolio is comprised of investments in the following reportable healthcare segments: (i) senior housing triple-net ("SH NNN"); (ii) senior housing operating portfolio ("SHOP"); (iii) life science and (iv) medical office. HERSHEY'S: Motion to Dismiss Reese Slack Fill Class Action Denied ----------------------------------------------------------------- Dan Margolies, writing for KCUR, reports that a federal judge has denied Hershey's motion to dismiss a class-action lawsuit alleging Reese's Pieces boxes are deceptively packaged. What would Elliot, dear friend of E.T. the Extra Terrestrial, say? When Elliot scattered a trail of Reese's Pieces for his alien friend in Stephen Spielberg's classic movie, he probably wasn't thinking about the candy's packaging. But Columbia, Missouri, resident Robert Bratton was. Mr. Bratton bought several boxes of Reese's Pieces and Whoppers malted milk balls at a Gerbes grocery story in Columbia for $1 apiece. He says he was influenced by the size of the opaque boxes, which led him to believe he was buying more candy than he did. Turns out the boxes, as is commonplace in the industry, had a lot of "slack-filled" -- or empty -- space. So Mr. Bratton did what any candy-loving American would do: He sued the maker of the candies, The Hershey Company. The class- action lawsuit, originally filed in state court last year, was moved by Hershey to federal court. And in a setback for the company on May 17, the judge denied its motion to throw out the case. Although surviving a motion to dismiss is a fairly low bar -- Mr. Bratton only had to allege facts stating a plausible claim for relief -- it means that Mr. Bratton may yet get his day in court. Mr. Bratton sued Hershey under the Missouri Merchandising Practices Act (MMPA), a 50-year-old law aimed at protecting consumers from unfair and deceptive business practices. In her 22-page ruling, U.S. District Judge Nanette Laughrey found that Mr. Bratton had "plausibly alleged, at minimum, that the packaging unfairly suggests the boxes contain more product than they actually do, or tends to or has the capacity to mislead consumers or to create a false impression, which is sufficient for purposes of alleging an unlawful practice under the MMPA." "The Court cannot conclude as a matter of law and at this stage of the litigation that the packaging is not misleading," Judge Laughrey wrote. Judge Laughrey made her finding even as she noted that the boxes specifically list their net weight, the number of pieces per serving (51 in Reese's Pieces' case, 18 in Whoppers' case) and the number of servings per container ("about 3" in Reese's Pieces' case, "about 3.5" in Whoppers' case). But as Mr. Bratton complained, about 29 percent of the Reese's Pieces boxes and about 41 percent of the Whoppers boxes consisted of "slack-filled," or empty, space. That, he said, led him to suffer "an ascertainable loss" because "the actual value of the Products as purchased was less than the value of the Products as represented." Hershey joins several other candy makers, including Nestle USA Inc. Mondelez International Inc., that have been sued recently for allegedly under-filling their candy boxes. Hershey can take some consolation in the May 16 ruling. Judge Laughrey deferred a decision on whether Bratton could pursue his claims for unjust enrichment on behalf of others. And unless Laughrey decides to certify the case as a class action, it's unlikely Bratton will be able to pursue it as an individual case. That's because his individual damages would likely be so miniscule as to make it economically unfeasible. [GN] JPMORGAN CHASE: Plaintiffs' Appeal in ERISA Action Pending ---------------------------------------------------------- JPMorgan Chase & Co. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that an appeal by plaintiffs related to the dismissal of one ERISA class action remains pending. The Firm is one of a number of foreign exchange dealers defending a class action filed in the United States District Court for the Southern District of New York by U.S.-based plaintiffs, principally alleging violations of federal antitrust laws based on an alleged conspiracy to manipulate foreign exchange rates (the "U.S. class action"). In January 2015, the Firm entered into a settlement agreement in the U.S. class action. Following this settlement, a number of additional putative class actions were filed seeking damages for persons who transacted FX futures and options on futures (the "exchanged-based actions"), consumers who purchased foreign currencies at allegedly inflated rates (the "consumer action"), participants or beneficiaries of qualified ERISA plans (the "ERISA actions"), and purported indirect purchasers of FX instruments (the "indirect purchaser action"). Since then, the Firm has entered into a revised settlement agreement to resolve the consolidated U.S. class action, including the exchange-based actions, and that agreement has been preliminarily approved by the Court. The District Court has dismissed one of the ERISA actions, and the plaintiffs have filed an appeal. The consumer action, a second ERISA action and the indirect purchaser action remain pending in the District Court. JPMorgan Chase & Co., a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America ("U.S."), with operations worldwide; the Firm had $2.5 trillion in assets and $255.9 billion in stockholders' equity as of March 31, 2017. JPMORGAN CHASE: Settlement of Quebec Action Remains Pending ----------------------------------------------------------- JPMorgan Chase & Co. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that Court approval of the settlement of a Quebec class action lawsuit remains pending. In September 2015, two class actions were filed in Canada against the Firm as well as a number of other FX dealers, principally for alleged violations of the Canadian Competition Act based on an alleged conspiracy to fix the prices of currency purchased in the FX market. The first action was filed in the province of Ontario, and seeks to represent all persons in Canada who transacted any FX instrument. The second action was filed in the province of Quebec, and seeks authorization to represent only those persons in Quebec who engaged in FX transactions. In late 2016, the Firm settled the Canadian class actions, subject to Court approval. The Court in the Ontario action granted approval of that settlement in April 2017, and Court approval of the settlement of the Quebec action remains pending. JPMorgan Chase & Co., a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America ("U.S."), with operations worldwide; the Firm had $2.5 trillion in assets and $255.9 billion in stockholders' equity as of March 31, 2017. JPMORGAN CHASE: Still Faces Interchange Litigation -------------------------------------------------- JPMorgan Chase & Co. continues to defend the Interchange Litigation, the Company said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. A group of merchants and retail associations filed a series of class action complaints alleging that Visa and MasterCard, as well as certain banks, conspired to set the price of credit and debit card interchange fees, enacted respective rules in violation of antitrust laws, and engaged in tying/bundling and exclusive dealing. The parties entered into an agreement to settle the cases for a cash payment of $6.1 billion to the class plaintiffs (of which the Firm's share is approximately 20%) and an amount equal to ten basis points of credit card interchange for a period of eight months to be measured from a date within 60 days of the end of the opt-out period. The agreement also provided for modifications to each credit card network's rules, including those that prohibit surcharging credit card transactions. In December 2013, the District Court granted final approval of the settlement. A number of merchants appealed to the United States Court of Appeals for the Second Circuit, which, in June 2016, vacated the District Court's certification of the class action and reversed the approval of the class settlement. Both the plaintiffs and the defendants filed petitions seeking review by the U.S. Supreme Court of the Second Circuit's decision, and those petitions were denied in March 2017. The case has been remanded to the District Court for further proceedings consistent with the appellate decision. JPMorgan Chase & Co., a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America ("U.S."), with operations worldwide; the Firm had $2.5 trillion in assets and $255.9 billion in stockholders' equity as of March 31, 2017. JPMORGAN CHASE: Still Defends LIBOR & Other Benchmark Rate Suits ---------------------------------------------------------------- JPMorgan Chase & Co. continues to defend against LIBOR and Other Benchmark Rate litigation, the Company said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. JPMorgan Chase has received subpoenas and requests for documents and, in some cases, interviews, from federal and state agencies and entities, including the U.S. Department of Justice ("DOJ"), the U.S. Commodity Futures Trading Commission ("CFTC"), the U.S. Securities and Exchange Commission ("SEC") and various state attorneys general, as well as the European Commission ("EC"), the U.K. Financial Conduct Authority ("FCA"), the Canadian Competition Bureau, the Swiss Competition Commission ("ComCo") and other regulatory authorities and banking associations around the world relating primarily to the process by which interest rates were submitted to the British Bankers Association ("BBA") in connection with the setting of the BBA's London Interbank Offered Rate ("LIBOR") for various currencies, principally in 2007 and 2008. Some of the inquiries also relate to similar processes by which information on rates is submitted to the European Banking Federation ("EBF") in connection with the setting of the EBF's Euro Interbank Offered Rates ("EURIBOR") and to the Japanese Bankers' Association for the setting of Tokyo Interbank Offered Rates ("TIBOR"), as well as processes for the setting of U.S. dollar ISDAFIX rates and other reference rates in various parts of the world during similar time periods. The Firm is responding to and continuing to cooperate with these inquiries. As previously reported, the Firm has resolved EC inquiries relating to Yen LIBOR and Swiss Franc LIBOR. In December 2016, the Firm resolved ComCo inquiries relating to these same rates. ComCo's investigation relating to EURIBOR, to which the Firm and other banks are subject, continues. In December 2016, the EC issued a decision against the Firm and other banks finding an infringement of European antitrust rules relating to EURIBOR. The Firm has filed an appeal with the European General Court. In June 2016, the DOJ informed the Firm that the DOJ had closed its inquiry into LIBOR and other benchmark rates with respect to the Firm without taking action. Other inquiries have been discontinued without any action against JPMorgan Chase, including by the SEC, FCA and the Canadian Competition Bureau. In addition, the Firm has been named as a defendant along with other banks in a series of individual and putative class actions filed in various United States District Courts. These actions have been filed, or consolidated for pre-trial purposes, in the United States District Court for the Southern District of New York. In these actions, plaintiffs make varying allegations that in various periods, starting in 2000 or later, defendants either individually or collectively manipulated the U.S. dollar LIBOR, Yen LIBOR, Swiss franc LIBOR, Euroyen TIBOR, EURIBOR, Singapore Interbank Offered Rate ("SIBOR"), Singapore Swap Offer Rate ("SOR") and/or the Bank Bill Swap Reference Rate ("BBSW") by submitting rates that were artificially low or high. Plaintiffs allege that they transacted in loans, derivatives or other financial instruments whose values are affected by changes in U.S. dollar LIBOR, Yen LIBOR, Swiss franc LIBOR, Euroyen TIBOR, EURIBOR, SIBOR, SOR or BBSW and assert a variety of claims including antitrust claims seeking treble damages. These matters are in various stages of litigation. The Firm has agreed to settle the putative class actions related to Yen LIBOR, Euroyen TIBOR and Swiss franc LIBOR. Those settlements are subject to further documentation and approval by the Court. In the EURIBOR action, the District Court dismissed all claims except a single antitrust claim and two common law claims, and dismissed all defendants except the Firm and Citibank. In the U.S. dollar LIBOR-related actions, the District Court dismissed certain claims, including the antitrust claims, and permitted other claims under the Commodity Exchange Act and common law to proceed. In May 2016, the United States Court of Appeals for the Second Circuit vacated the dismissal of the antitrust claims and remanded the case to the District Court to consider, among other things, whether the plaintiffs have standing to assert antitrust claims. In July 2016, JPMorgan Chase and other defendants again moved in the District Court to dismiss the antitrust claims, and in December 2016, the District Court granted in part and denied in part defendants' motion, finding that certain plaintiffs lacked standing to assert antitrust claims. The Firm is one of the defendants in a number of putative class actions alleging that defendant banks and ICAP conspired to manipulate the U.S. dollar ISDAFIX rates. Plaintiffs primarily assert claims under the federal antitrust laws and Commodity Exchange Act. In April 2016, the Firm settled the ISDAFIX litigation, along with certain other banks. Those settlements have been preliminarily approved by the Court. JPMorgan Chase & Co., a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America ("U.S."), with operations worldwide; the Firm had $2.5 trillion in assets and $255.9 billion in stockholders' equity as of March 31, 2017. K & C ENTERPRISE: "Broscious" Action Seeks Minimum, Overtime Pay ---------------------------------------------------------------- Monique Broscious, Individually and on behalf of others similarly situated, Plaintiff, v. K & C Enterprise Group LLC (d/b/a 656 SPORTS Bar) and Kina Jackson, Defendants, 1:17-cv-01688 (N.D. Ga., May 10, 2017), seeks payment of federally mandated minimum wages and overtime wages to Plaintiff under the Fair Labor Standards Act of 1938. 656 Sports Bar is a restaurant and bar located at 656 Pryor Street, Atlanta, Georgia, 30312 owned by Defendants. Plaintiff, worked as a bartender for Defendants between May 2015 and February 2017. [BN] The Plaintiff is represented by: Paul J. Sharman, Esq. THE SHARMAN LAW FIRM LLC 11175 Cicero Drive, Suite 100 Alpharetta, GA 30022 Phone: (678) 242-5297 Fax: (678) 802-2129 Email: paul@sharman-law.com KIA MOTORS: "Centko" Sues Over Defective Bearings ------------------------------------------------- Cara Centko and Jenn Lazar, on behalf of themselves and all others similarly situated, Plaintiff, v. Kia Motors America, Inc., Defendant, Case No. 8:17-cv-00838 (C.D. Cal., May 10, 2017), seeks actual, general, special, incidental, statutory, punitive and consequential damages, pre-judgment and post-judgment interest on monetary relief, injunctive or declaratory relief including repair, recall or replacement of defective vehicles and extend the applicable warranties to a reasonable period of time, reasonable attorneys' fees and costs and such further relief resulting from breach of the duty of good faith and fair dealing, fraud, breach of express and implied warranty of merchantability, and for violation of California's Fair Advertising Law and Unfair Competition Law. Kia vehicles equipped with the connecting rod bearings in the GDI engines undergo a prolonged failure as metal debris circulates throughout the engine via the engine oil. Over time, the connecting rod bearings begin to fracture with metal debris beginning to accumulate in the engine oil until the oil filter clogs. Additionally, as the connecting rod bearings continue to fracture, the acceptable tolerances between the bearings, the connecting rod, and the crankshaft rapidly deteriorate, producing a knocking sound, says the complaint. [BN] Plaintiffs are represented by: Todd D. Carpenter, Esq. CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP 402 W Broadway, 29th Floor San Diego, CA 92101 Phone: (619) 756-6994 Fax: (619) 756-6991 Email: tcarpenter@carlsonlynch.com - and - Edwin J. Kilpela, Esq. CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP 1133 Penn Avenue, 5th Floor Pittsburgh, PA 15222 Telephone: (412) 322-9243 Fax: (412) 231-0246 Email: ekilpela@carlsonlynch.com - and - Jason P. Sultzer, Esq. Adam Gonnelli, Esq. THE SULTZER LAW GROUP, P.C. 85 Civic Center Plaza, Suite 104 Poughkeepsie, NY 12601 Telephone: (854) 705-9460 Facsimile: (888) 749-7747 Email: sultzerj@thesultzerlawgroup.com Gonnellia@thesultzerlawgroup.com - and - Melissa W. Wolchansky (to be admitted pro hac vice) Amy E. Boyle, Esq. HALUNEN LAW 1650 IDS Center 80 South 8th Street Minneapolis, MN 55402 Telephone: (612) 605-4098 Facsimile: (612) 605-4099 Email: boyle@halunenlaw.com Wolchansky@halunenlaw.com - and - Bonner C. Walsh, Esq. WALSH PLLC PO Box 7 Bly, OR 97622 Telephone: (541) 359-2827 Facsimile: (866) 503-8206 Email: bonner@walshpllc.com MAJOR LEAGUE: Appeals Ruling in Calif. Wage & Hour Class Action --------------------------------------------------------------- Gordon Gibb, writing for California Labor Law News, reports that as the major league baseball season continues to roll along, a wage & hour lawsuit against Major League Baseball brought by minor leaguers over rates of pay and other issues continues to traverse a rocky path akin to the bases loaded in the 9th, with nobody out in a tie game and you're the team pitching . . . Earlier in the proposed class action lawsuit US Chief Magistrate Judge Joseph C. Spero had denied the plaintiffs' efforts to secure class action status, suggesting that there were flaws in the plaintiffs' submission, and that there was insufficient continuity of activity amongst all the proposed class members to warrant status as a class, due to the degree of difficulties involved. The plaintiffs came back with changes to their wage & hour lawsuit, removing claims associated with off-site winter conditioning, amongst other alterations. Plaintiffs also narrowed the class to include only minor league players in the state of California, making it a California wage and hour lawsuit. Plaintiffs scored a small victory in March, when Judge Spero reversed an earlier decision and agreed to certify the plaintiffs' claims as a class action, as well as a collective action under the Fair Labor Standards Act. But now everything is in limbo again, as Major League Baseball has appealed the ruling to the Ninth Circuit, with Judge Spero giving the defendants pause to facilitate their appeal. The proposed class action lawsuit is itself now on pause -- call it an extended rain delay -- until the appellate panel of the Ninth Circuit has the opportunity to hear the appeal. It could be a long delay, according to court records and those conversant with the case load of the Ninth Circuit: "Given the state of the Ninth Circuit's docket," writes Nathaniel Grow, professor of legal studies at the University of Georgia, "if the circuit court doesn't expedite the appeal, it could easily take a year and a half or longer just to get an appellate ruling on the class certification issue," he said. "So instead of looking at a possible trial later this year, you're probably into 2019, maybe even 2020 before this goes to trial." The wage and hour lawsuit was originally filed early in 2014, with minor league ball players claiming, through their wage and hour lawyer, unpaid overtime and wages that did not meet minimum wage standards, or so it has been alleged. Some players assert they collected as little as $1,100 per month in spite of working 200 hours in an average month, or 50 hours in a week. At issue is a uniform player contract observed by teams in the minor leagues -- and plaintiffs assert this has been going on for some time now: the wage and hour class action seeks to represent players having played under the uniform contract dating back to 2010. Some 2,200 minor league players had opted into the wage and hour lawsuit before it was decertified in 2016. When plaintiffs narrowed their focus, Judge Spero reversed his earlier decision and in March of this year gave the green light to the California wage and hour class and collective action. But now Major League Baseball -- the defendant in the case -- wants to appeal and Judge Spero maintains the defendants have the right to do that. "The court concludes that these questions involve controlling questions of law as to which there is substantial ground for difference of opinion because of the dearth of relevant case law and tension in the relevant legal standards," the judge said. "Because these questions have crucial implications for whether a collective may be certified in this action, the court concludes that an immediate appeal from its March 7, 2017, order may materially advance the ultimate termination of the litigation." Major League Baseball and its clubs could suffer 'significant harm' depending upon which way the Ninth Circuit rules -- and that's if the Ninth Circuit agrees to hear the appeal at all. "Should the Ninth Circuit reverse this court's [order], defendants will suffer substantial harm if this action is not stayed pending appeal as they will have devoted very substantial time and resources on the litigation, particularly with respect to the completion of discovery, dispositive motions and trial preparation on class claims," the judge said. For now, the plaintiffs wait in a rain delay. . . The case is Aaron Senne et al. v. Office of the Commissioner of Baseball et al., Case No. 3:14-cv-00608, in the US District Court for the Northern District of California. [GN] MDC PARTNERS: Class Action Litigation in Canada Underway -------------------------------------------------------- MDC Partners Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that MDC has served a motion to address the scope of the proposed class definition in the class action litigation in Canada. On August 7, 2015, Roberto Paniccia issued a Statement of Claim in the Ontario Superior Court of Justice in the City of Brantford, Ontario seeking to certify a class action suit naming the following as defendants: MDC, former CEO Miles S. Nadal, former CAO Michael C. Sabatino, CFO David Doft and BDO U.S.A. LLP. The Plaintiff alleges violations of section 138.1 of the Ontario Securities Act (and equivalent legislation in other Canadian provinces and territories) as well as common law misrepresentation based on allegedly materially false and misleading statements in the Company's public statements, as well as omitting to disclose material facts with respect to the SEC investigation. The Company intends to continue to vigorously defend this Canadian suit on the same basis as which the U.S. class action was previously dismissed. A first case management meeting has been held. The plaintiff has served his material for leave to proceed under the Securities Act. MDC has served a motion to address the scope of the proposed class definition. MGM: Plaintiff Fights Bid to Dismiss James Bond DVD Box Lawsuit --------------------------------------------------------------- Ashley Cullins, writing for Hollywood Reporter, reports that the definitions of "all" and "every" are at the center of the suit. Do Sean Connery, George Lazenby, Roger Moore, Timothy Dalton, Pierce Brosnan and Daniel Craig constitute all of the onscreen personifications of charismatic super spy James Bond, or must one include David Niven? That question is before a Washington federal judge, as he evaluates whether a class action over a 50th anniversary DVD box set should be allowed to move forward. Mary Johnson sued MGM and 20th Century Fox Home Entertainment in April, claiming that she was promised all the Bond films when she bought the set but it was missing two of them: Casino Royale (1967) and Never Say Never Again (1983). Bond connoisseurs may argue that the two films are not actually true 007 flicks. The original Casino Royale is a Columbia Pictures spoof starring Niven, Peter Sellers and Woody Allen that isn't associated with Bond producer Eon Productions or MGM. Meanwhile, Never Say Never Again was made by screenwriter Kevin McClory who worked with iconic Bond author Ian Fleming to create the Thunderball story and was given the green light by a London court to make his own film after claiming co-authorship of the characters and elements. That debate aside, in a motion to dismiss MGM argued that "no reasonable purchaser would expect that a box set would contain films that are not included on the list of titles clearly printed on its packaging." Johnson's attorney Alexander Kleinberg says that argument is factually and legally defective, relying on the assumption that the customer would be able to "decipher the list of films printed in barely readable print" on the back of the box. "More importantly, it impermissibly imposes on that reasonable purchaser the obligation to be a James Bond expert who would know every single James Bond film ever produced, marketed, and sold," writes Kleinberg. He also argues that MGM is twisting the meanings of the wording it used to describe the set. "It presumes that the reasonable purchaser will interpret the all-inclusive language that Defendants chose to use to describe the Sets -- 'All of the Bond films gathered for the first time in this one-of-a-kind box set -- every gorgeous girl, nefarious villain and charismatic star from Sean Connery, the legendary actor who started it all' -- to mean that 'all' means some and that 'every' means only certain. Johnson says were it not for her belief that those two films would be included in the Bond 50 set she wouldn't have paid $106.44 to order it on Amazon.com. "To prove that a practice is deceptive, neither intent to deceive nor actual deception is required," writes Kleinberg. "The question is whether the conduct has the capacity to deceive a substantial portion of the public." Kleinberg also argues that it would be premature for the court to determine at this stage whether MGM Holdings or 21st Century Fox should be dismissed. The parent companies are named as defendants, he argues, because Johnson claims all four of the corporations are responsible for marketing and selling the sets and each profits from them. If U.S. District Judge Ricardo Martinez denies MGM's motion to dismiss, the studio's attorney John Devlin has alternatively asked him to strike the nationwide class allegations, arguing that the class definition, which essentially includes anyone who bought the box set, is "impermissibly overbroad." Kleinberg disagrees, adding that would chill class certification in false advertising cases. A hearing on the motion to dismiss, the full reply to which is posted below, was currently set for May 26. [GN] MISONIX INC: "Scalfani" Class Suit in Earliest Stages ----------------------------------------------------- Misonix, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the class action lawsuit by Richard Scalfani is at its earliest stages. On September 19, 2016, Richard Scalfani, an individual shareholder of Misonix, filed a lawsuit against the Company and its former CEO and CFO in the U.S. District Court for the Eastern District of New York, alleging violations of the federal securities laws. The complaint alleges that the Company's stock price was artificially inflated between November 5, 2015 and September 14, 2016 as a result of alleged false and misleading statements in the Company's securities filings concerning the Company's business, operations, and prospects and the Company's internal control over financial reporting. Scalfani filed the action seeking to represent a putative class of all persons (other than defendants, officers and directors of the Company, and their affiliates) who purchased publicly traded Misonix securities between November 5, 2015 and September 14, 2016. Scalfani seeks an unspecified amount of damages for himself and for the putative class under the federal securities laws. On March 24, 2017, the Court appointed Scalfani and another individual Misonix shareholder, Tracey Angiuoli, as lead plaintiffs for purposes of pursuing the action on behalf of the putative class. The Company believes it has various legal and factual defenses to the allegations in the complaint, and intends to vigorously defend the action. The case is at its earliest stages; there has been no discovery and there is no trial date. The Company is not able to estimate the amount of potential loss it may recognize, if any, from this claim. The Company believes that its insurance coverage is sufficient to cover a potential loss, after payment of the policy retention of $250,000. Misonix designs, manufactures, develops and markets therapeutic ultrasonic devices. These products are used for precise bone sculpting, removal of soft tumors, and tissue debridement in the fields of orthopedic surgery, plastic surgery, neurosurgery, podiatry and vascular surgery. In the United States, the Company sells its products through a network of commissioned agents assisted by Company personnel. Outside of the United States, the Company sells to distributors who then resell the product to hospitals. The Company operates as one business segment. MURRAY GOULBURN: Federal Court New Venue for Class Action --------------------------------------------------------- John Durie, writing for The Australian, reports that the ACCC will push ahead with its legal actions against former Murray Goulburn executives and the co-op despite the recent decision to forgive the debt at the centre of the case. The regulator is alleging unconscionable conduct and misleading statements by the co-op and former chief Gary Helou and former finance chief Brad Hingle. The ACCC is not seeking damages against the co-op because this would only hurt the farmers it is trying to help. And now the co- op has reversed the decision under attack, arguably there is no need for the action. The case is being managed in the Federal Court by Competition Tribunal chief John Middleton. The Federal Court will also now be the venue for a class action brought on behalf of shareholders and unit holders. This was previously scheduled to be heard in the Victorian Supreme Court. ASIC is also still pursuing a potential case against the co-op on behalf of unit holders alleging misleading statements. The court moves come as Murray Goulburn has denied competitor claims that it has refused to consider selling its proposed closed plants to rivals. Earlier this month it said it would shut three of its plants, in Rochester and Kiewa in Victoria and Edith Creek in Tasmania. The Rochester Plant near Echuca is considered the most desirable option but the view within MG is it wants to rationalise production plants in the region so handing the facility onto a competitor would negate that effect. Arguably a competitor sale would maximise returns to dairy farmer members. Rochester is a cheese and dryer facility and MG says it is first looking to see whether the plant can be used elsewhere before it decides what to do with the land. The Tasmanian Government is considering what alternate uses may be possible for the Edith Creek facility ACCC action is aimed as deterrence to the entity involved and also to other companies, which explains why it is pursuing the case even though the policy has changed. It is also seeking court declarations that the behaviour in question was unacceptable if that is how the court decides. The ACCC is seeking penalties against the former executives. [GN] NATIONAL HOCKEY: Two Retired Buffalo Players Join Concussion Case ----------------------------------------------------------------- John Vogl, writing for Buffalo News, reports that if the retired players suing the NHL about concussions win in court this summer, everyone who played in the league will become part of the class action lawsuit. Until then, it's a personal decision to join. Two more players who skated in Buffalo have signed up. Paul Andrea, who was part of the inaugural Sabres, and Jim Krulicki, who played for the Buffalo Bisons of the American Hockey League, have become part of the lawsuit. They are among 12 players who have joined more than 100 others in suing the NHL. The former players allege the league was negligent in its care and fraudulently concealed the long-term risks of head injuries. They are seeking medical monitoring and compensatory damages. Mr. Andrea had 11 goals and 32 points in 47 games with Buffalo in 1970-71. The 75-year-old claims to have suffered multiple head traumas in the NHL, which included stints with the New York Rangers, Pittsburgh Penguins and California Golden Seals. He suffers daily from depression, sleeplessness, dizziness, memory loss, impulse control, neurocognitive disorder, irritability/anxiousness, numbness in calves and feet, anger issues and ringing of the ears, according to court documents filed in U.S. District Court in Minnesota. Mr. Krulicki joined the Bisons for the 1970 AHL playoffs. He played in seven games, recording three goals and five points. The 69-year-old claims to have suffered multiple head injuries while playing for the Rangers and Detroit Red Wings. Mr. Krulicki, according to the lawsuit, suffers from loss of judgment, decision making, multitasking and planning capabilities, and he has lost awareness and insight regarding his own condition. He suffers from mood swings, disinhibition, impulsivity and change of personality. He was diagnosed with frontotemporal lobar degeneration (a form of dementia), probable behavioral variant frontotemporal dementia (a neurodegenerative disease) and idiopathic focal dystonia (perception and reflex problems). Like the others in the lawsuit, Andrea and Krulicki believe they have enhanced risk of developing the brain disorder known as chronic traumatic encephalopathy (CTE). Mr. Krulicki joins friend and former teammate Mike Robitaille in the lawsuit. They played together with Kitchener of the Ontario Hockey Association and Omaha of the Central Hockey League in the 1960s. There are 17 former Sabres suing the NHL, including Mr. Robitaille, Grant Ledyard, Shawn Anderson, Craig Muni, Mike Hartman and the family of late defenseman Steve Montador. The first lawsuit against the league was filed in 2013. A motion for class certification is scheduled to be heard July 11 in Minnesota. If the class is certified, it will include all living and deceased NHL hockey players (plus their spouses, dependents and estates) who suffered a concussion or repeated, sub-concussive blows. [GN] NEXUS BUSINESS: "Brown" Labor Suit Seeks Overtime Pay ----------------------------------------------------- Alicia Brown, individually and on behalf of all others similarly situated who consent to their inclusion in a collective action, Plaintiff, v. Nexus Business Solutions, LLC, Defendant Case 1:17- cv-01679 (N.D. Ga., May 10, 2017) seeks overtime wages, compensatory, exemplary and punitive damages, declaratory and injunctive relief including costs and attorneys' fees under the federal Fair Labor Standards Act. Plaintiffs were employed by Nexus as Business Development Managers, working as marketers promoting GM cars. [BN] Plaintiffs are represented by: Mitchell L. Feldman, Esq. MITCHELL L. FELDMAN, ESQ., P.A. 1201 Peachtree Street, NE 400 Colony Square, #200 Atlanta, GA 30361 Tel: (877) 946-8293 Fax: (813) 639-9376 Email: mlf@feldmanlegal.us NHCASH.COM: Suit Alleges Misrepresentation in Debt Collection ------------------------------------------------------------- Mike Torres, writing for Legal Newsline, reports that five consumers have filed a class action lawsuit against a New Hampshire financial business, alleging misrepresentation in debt collection. Tine Hunter, Steven Pike, Dawn Mays-Johnson, Julie Johnson and Dianne Turner filed a complaint, individually and on behalf of all others similarly situated, May 8 in U.S. District Court for the Eastern District of Virginia against NHCash.com, LLC, NHCash SPV LLC, NHCash Holdings Inc., Steven Mello and LTD Financial Services LP, alleging false representations regarding the status of the debt of the plaintiffs. According to the complaint, the plaintiffs were damaged due to the high-interest loans and unlawful collection practices by the defendants. The plaintiffs allege the defendants made loans to the plaintiffs without a consumer finance license. The plaintiffs seek damages, declaratory and injunctive relief, attorney fees and court costs and all other proper relief. They are represented by attorneys Kristi C. Kelly -- kkelly@kellyandcrandall.com -- and Andrew J. Guzzo -- aguzzo@kellyandcrandall.com -- of Kelly & Crandall, PLC in Fairfax, Virginia, and by James Speer of Virginia Poverty Law Center in Richmond.[GN] U.S. District Court for the Eastern District of Virginia Case number 3:17-cv-00348-HEH PACIFIC COAST OIL: Final Approval Hearing Continued to June 12 -------------------------------------------------------------- The final hearing to approve the settlement of a class action lawsuit against Pacific Coast Oil Trust has been continued until June 12, 2017, Pacific Coast Oil Trust said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. On July 1, 2014, Thomas Welch, individually and on behalf of all others similarly situated, filed a putative class action complaint in the Superior Court of California, County of Los Angeles, against the Trust, PCEC, PCEC (GP) LLC, Pacific Coast Energy Holdings LLC, certain executive officers of PCEC (GP) LLC and others. The complaint asserts federal securities law claims against the Trust and other defendants and states that the claims are made on behalf of a class of investors who purchased or otherwise acquired Trust securities pursuant or traceable to the registration statement that became effective on May 2, 2012 and the prospectuses issued thereto and the registration statement that became effective purportedly on September 19, 2013 and the prospectuses issued thereto. The complaint states that the plaintiff is pursuing negligence and strict liability claims under the Securities Act and alleges that both such registration statements contained numerous untrue statements of material facts and omitted material facts. The plaintiff seeks class certification, unspecified compensatory damages, rescission on certain of plaintiff's claims, pre-judgment and post-judgment interest, attorneys' fees and costs and any other relief the Court may deem just and proper. On October 16, 2014, Ralph Berliner, individually and on behalf of all others similarly situated, filed a second putative class action complaint in the Superior Court of California, County of Los Angeles, against the Trust, PCEC, PCEC (GP) LLC, Pacific Coast Energy Holdings LLC, certain executive officers of PCEC (GP) LLC and others. The Berliner complaint asserts the same claims and makes the same allegations, against the same defendants, as are made in the Welch complaint. In November 2014, the Welch and Berliner actions were consolidated into a single action. On December 8, 2015, the parties agreed in principle to settle the consolidated action. On September 14, 2016, the Court entered an order granting preliminary approval of the settlement, and set a hearing for March 2, 2017 to determine whether to grant final approval of the settlement and enter final judgement. On March 2, 2017, the final approval hearing was continued until June 12, 2017. The Trust believes that it is fully indemnified by PCEC against any liability or expense it might incur in connection with the consolidated action. Pacific Coast Oil Trust (the "Trust") is a statutory trust formed in January 2012 under the Delaware Statutory Trust Act pursuant to a Trust Agreement among Pacific Coast Energy Company LP ("PCEC"), as trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the "Trustee"), and Wilmington Trust, National Association, as Delaware Trustee (the "Delaware Trustee"). The Trust was created to acquire and hold net profits and royalty interests in certain oil and natural gas properties located in California (the "Conveyed Interests") for the benefit of the Trust unitholders pursuant to the Trust Agreement. The Conveyed Interests represent undivided interests in underlying properties consisting of PCEC's interests in its oil and natural gas properties located onshore in California (the "Underlying Properties"). The Conveyed Interests were conveyed by PCEC to the Trust concurrently with the initial public offering of the Trust's units of beneficial interest ("Trust Units") in May 2012. PIZZA HUT: Allan Myers Represents Franchisees in Appeal Case ------------------------------------------------------------ Adele Ferguson, writing for The Australian Financial Review, reports that the $170 billion franchise industry -- and its lobbyists -- will nervously watch a court case about to be unleashed in the Federal Court between Pizza Hut franchisees and their former franchisor, US-based fast food giant Yum! The appeal case, which was set to begin on May 15, comes as the relationship between franchisors and franchisees is being scrutinised by experts, regulators and politicians. It is a topic that has been doing the rounds of senators in the past few weeks after a Protecting Vulnerable Workers Bill was introduced into parliament earlier this year. The bill was designed to beef up penalties for wage fraud and make franchisors jointly responsible for workplace abuses if they have a "significant degree of influence or control" over the franchisee's affairs. The stakes are high. There are more than 1000 franchise networks and 79,000 franchisees creating more than 460,000 jobs. Until now franchisors have enjoyed a disproportionate amount of power, with some franchisees likening the relationship to indentured slavery. The relationship between franchisees and franchisors hit the spotlight after a series of wage fraud scandals were exposed in high profile franchise networks 7-Eleven, Domino's, Caltex, United Petroleum, Pizza Hut and many others. The scandals highlighted limitations in the law, which Minister for Employment Michaelia Cash sought to fix in the new bill. In 7-Eleven's case, the Fair Work Ombudsman found that the franchisor "compounded" the problems of wage fraud by failing to use systems and processes to detect or address deliberate worker exploitation. Nobody is suggesting franchisors should be automatically liable for the wrongdoings of a franchisee, but if the business model creates a situation that encourages wage fraud or the franchisor knows, or should know, what is going on, they should be held accountable. However, not all franchisors see it that way. The franchise industry, most notably the Franchise Council of Australia, is fighting to dilute the bill before it passes through the senate. The industry is also studying the legal battle Pizza Hut franchisees have launched against Yum! The action was initiated by liquidator Bob Jacobs at Auxilium Partners late last year. Mr. Jacobs had witnessed the plight of Pizza Hut franchisees when he became liquidator of eight stores in 2014. The stores collapsed after the franchisor, Yum! rolled out a "value strategy" that required its franchisees slash the prices of a range of pizzas by 50 per cent. More than 90 per cent of Pizza Hut franchisees joined the original class action, alleging unconscionable conduct, losses and business collapses as a direct consequence of the price war. But the case was lost in 2016 and months later Yum! sold the Pizza Hut business to private equity operator Allegro, which has embarked on a strategy to reinvigorate demand and take on Domino's. Allegro went on to buy another franchised pizza chain Eagle Boys, which got into strife due to fierce competition and questionable strategies. Jacobs decided to appeal the case, putting up $50,000 of his own money to lodge the claim. He then cleverly filed an application with the Australian Taxation Office for an indemnity available to insolvency practitioners under The Financial Management and Accountability Act 1997. Allan Myers, QC, will represent the franchisees. Yum! is defending its actions. In its outline of submissions to the Federal Court it says the half-price pizza strategy was designed to improve franchisee profitability and grow its own business and revenues. At the end of the day, the court of appeal will make its own decisions, but the appellant's outline of submissions captures the current environment: "holding franchisors to account for the adverse impact of the exercise of their powers has been the subject of increased focus by policy makers." It goes on to say "the proper application of an objective test of reasonableness, rather than a subjective test of honesty, will have significant social utility in ensuring competent decisions are made by franchisors in the interests of the sector as a whole." There's a lot at stake for the franchise industry besides a potential damages claim of tens of millions of dollars. It is why the sector will be watching closely the legal action and the final wording of Vulnerable Workers Bill legislation. The bill attracted a number of submissions, including one from the Franchise Council of Australia (FCA) which has been lobbying senators that the legislation is heavy-handed and unnecessary because accessorial liability provisions are working and in "heavy use". In its submission it wheels out the argument that the bill needs to be amended to "avoid serious harm" to the franchise sector. It says if the bill is adopted in its current form it will reduce franchising activity, growth and investment in Australia. It also argues that the legislation currently catches all franchise systems due to the breadth of the definition of "responsible franchisor entity" and where there hasn't been any evidence of systematic Fair Work Act contraventions. However, in the past year there have been a multitude of cases of systemic wage fraud in different franchise models and by small and large franchisors. For example, last year Paul Sadler Swimland, a franchise network that runs 15 swimming schools, was caught underpaying hundreds of young swimming instructors over six years. In its submissions, the FCA suggests a number of amendments to the wording of the bill. It wants it changed from "the person has a significant degree of influence or control over the franchisee entity's affairs" to read "the person has a substantial degree of control over the franchisee entity's workplace terms and conditions". Independent Contractors Australia has studied the FCA's suggested wording changes and warns that if the senate adopts them, it would make it meaningless. These word changes would allow franchisors to go to court and argue that they didn't have substantial control over the workplace terms and conditions of the franchisee and therefore shouldn't bear any responsibility or liability for wage fraud across its network. "These changes would essentially retain the status quo, where franchisors could deliberately seek not to exercise any influence over workplace terms and conditions and therefore avoid any responsibility for worker underpayment," it says. The ICA also rejects the assertion that the bill would create high compliance costs. "Remember that franchisors create, own and control a business system . . . They require franchisees to comply with strict marketing, product, pricing, shop design, purchasing, supply chain and many other imposed private sector regulations," the ICA says. The franchisors monitor and audit franchisees to ensure compliance. It also points out that franchisors must comply with regulations such as food safety, workplace safety, competition laws, zoning regulations and financial regulations. In turn, franchisors must ensure their franchisees comply with these regulations otherwise the franchisor will be in breach. "The business of franchisors is to specialise in the running of their own private and government- created regulations. That is their expertise. Yet when it comes to the realm of worker wage rates the FCA seems to want franchisors to avoid any exercise of that very expertise." The ICA believes if the language of the bill is changed it will become a legislative sham. "The legislation would give the appearance of doing something to prevent franchise wage fraud but do essentially nothing to achieve that aim. Parliament would have been conned into conning Australians." Between the class action and legislative reform, the franchise industry has been under the microscope like never before. There have been some shocking cases of wage fraud across the franchise sector, which has raised questions about the balance of power. It's time this was properly dealt with. [GN] POP WARNER: Calif. Court Dismisses Concussion Class Action ---------------------------------------------------------- Steven M. Sellers, writing for Bloomberg BNA, reports that concussion claims against USA Football, the governing body of youth football leagues nationwide, must be dismissed for lack of jurisdiction, the Central District of California ruled May 12 (Archie v. Pop Warner Little Scholars, Inc., C.D. Cal., No. 16-cv- 06603, 5/12/17). The ruling ends concussion litigation against three defendants in the would-be class action brought by the parents of two young men diagnosed with chronic traumatic encephalopathy after their deaths, and two others who claim their sons are at increased risk of developing the disease. CTE is a degenerative brain disease associated with repetitive head traumas, such as those the occur in football. The condition can only be diagnosed after death. The would-be class action isn't over yet. The dismissed allegations may be revived and four other California Pop Warner leagues, who weren't parties to the dismissal motions, remain in the litigation. "We are not surprised by the court's ruling and we look forward to amending the complaint," plaintiffs' counsel Robert Finnerty, of Girardi & Keese, Los Angeles, told Bloomberg BNA May 15 in an email. Gary Wolensky, of Buchalter in Irvine, California, who represents USA Football Inc., declined to comment on the ruling May 15. Requests for comment sent to counsel for two other defendants in the case, Pop Warner Little Scholars Inc. and the National Operating Committee on Standards for Athletic Equipment, didn't receive an immediate response May 15. CTE Alleged in Former Youth Players Paul Bright Jr. and Tyler Cornell played youth football beginning in the 1990s. Both died in 2014 and autopsies showed they had CTE, according to the complaint. The boys' parents, Kimberly Archie and Jo Cornell, claim Pop Warner Little Scholars Inc. and USA Football Inc. misled them about the safety of youth football and the helmets used in the sport. Debra McCrae and Shannon Barnes, parents of two other players, claim their sons are at risk of chronic brain diseases because of playing in California Pop Warner leagues. The proposed class action would extend to all youths "who participated in the Pop Warner youth tackle football program between 1997 to the present and are suffering or have suffered from brain injuries, damage or disease." A second class would consist of adults who enrolled their children in the program those years. Ms. Barnes's claimed risk of developing CTE didn't show an injury- in-fact necessary for the court to hear the case, the court said. And Archie, Cornell and McCrea couldn't show any wrongful conduct by USA Football, which launched coaching education programs in Pop Warner leagues years after the players participated, the court said. The claims against NOCSAE, a national commission formed in 1969 to reduce sports injuries through helmet performance standards, weren't viable because its contacts with the state of California were too limited to confer jurisdiction. "Here, there are no allegations that NOCSAE's promotion of safety standards or licensing of its logo is at all targeted at California manufacturers, retailers or football leagues, let alone youth tackle football programs involved in this case," the court said. Nor could federal jurisdiction be exercised over Pop Warner Little Scholars Inc., based in Langhorn, Pennsylvania, the U.S. District Court for the Central District of California said. That organization, based in Langhorn, Pennsylvania, presented evidence that youth football leagues in the state are independent corporations over which Pop Warner has no control. U.S. District Judge Philip S. Gutierrez wrote the decision. The law offices of Giraldi & Keese represented the plaintiffs. Boornazian Jensen & Garthe, as well as Wilson Elser Moskowitz Edelman & Dicker and Lewis Brisbois Bisgaard and Smith represented Pop Warner Little Scholars. Dentons represented NOCSAE. [GN] PRIDE MOBILITY: Class Representative Withdraws Scooter Suit ----------------------------------------------------------- Eric Kroh, writing for Law360, reports that the proposed representative of a class of mobility scooter purchasers has declined to move forward with a collective price-fixing proceeding against Pride Mobility Products Ltd. in a case that had been touted as the first under the U.K.'s class action regime, her lawyer confirmed on May 16. Dorothy Gibson decided to withdraw her request for an opt-out collective proceedings order from the U.K.'s Competition Appeal Tribunal, after the panel found in March that the estimated losses in the case exceeded those attributable to Pride's infractions and adjourned Gibson's application to allow her to amend the claim. "After reassessing the value of the claim as required with her expert, she decided the case is not worth enough to proceed given the costs versus potential benefits for class members," Leigh Day associate solicitor Chris Haan -- chaan@leighday.co.uk -- said in an email. The CAT will now determine how much, if any, of Pride's legal costs Gibson must pay, Mr. Haan said. The action is a follow-on suit to a 2014 decision by the country's Office of Fair Trading, which had found that Pennsylvania-based Pride and eight U.K. dealers of mobility scooters agreed that the dealers would not advertise certain models of Pride scooters online at rates below a price set by Pride. Ms. Gibson, the general secretary of a national pensioners group, sought authorization to represent a class of some 30,000 people who had purchased a Pride scooter between February 2010 and February 2012. In its March ruling on Ms. Gibson's request of an order authorizing an opt-out collective proceeding, the CAT determined there was no obstacle under European Union law to allowing the claim to go forward, but said that Ms. Gibson's expert did not correctly approach the definition of subclasses in the case and that the estimate of the losses sustained by the class was therefore too great. The panel also noted that should the claim be amended, it could still face "considerable difficulties." Pride did not respond to a request for comment on May 16. The OFT, which was superseded by the U.K. Competition and Markets Authority, in 2014 found that the agreements Pride made with the dealers infringed competition law. A market study by the agency found that prices for the same model of scooter could vary by as much as GBP3,000 (now equivalent to $3,875). Ms. Gibson's case was the first to be brought under the U.K.'s class action rules, which went into effect in October 2015. In another case to come forward under the new regime, U.K. consumers hit MasterCard Inc. with a GBP14 billion antitrust suit alleging they overpaid on credit and debit card transactions from 1992 to 2008 because of anti-competitive interchange fees. [GN] QUEST DIAGNOSTICS: Faces Class Action Over Excessive Charges ------------------------------------------------------------ Open Minds reports that on April 6, 2017, lawsuits were filed against Quest Diagnostics Inc. and Laboratory Corporation of America Holdings (LabCorp) alleging that the two laboratories charged consumers excessively high rates for diagnostic tests not covered by the consumers' health plans. The plaintiffs had no agreement with the respective labs, and when their insurance companies did not pay their claims, the labs unilaterally charged the consumers excessive, non-market based rates. No hearing date has been set. Both complaints seek class-action status. The plaintiffs' attorney is Robert Finkel with the law firm Wolf Popper LLP. [GN] RACKSPACE HOSTING: Pension Fund Sues Over Share Price Drop ---------------------------------------------------------- City of Warwick Municipal Employees Pension Fund, individually and on behalf of all others similarly situated, Plaintiff, v. Rackspace Hosting, Inc., William Taylor Rhodes and Karl Pichler, Defendants, Case No. 1:17-cv-03501 (S.D.N.Y., May 10, 2017), seeks compensatory damages including interest, reasonable costs and expenses incurred including counsel fees and expert fees, rescission or a rescissory measure of damages and such equitable/injunctive or other relief for violation of the Securities Exchange Act of 1934. Rackspace is a cloud computing company that provides data hosting and other related services to business customers around the world. Its cloud computing services offer public, private, and hybrid cloud hosting, that include dedicated servers, databases, storage and networking. Its biggest client is Vodafone Group PLC, a U.K.- based multinational telecommunications provider. Defendants intentionally concealed the impending loss of the Vodafone contract and the attendant impact on the company's growth prospects. It never disclosed the financial impact of the Vodafone Contract non-renewal on Rackspace's reported financial results and future growth. The Vodafone deal represented 32 percent of the company's 2015 revenue. The price of Rackspace shares stock dropped upon this news. Plaintiff purchased Rackspace securities at artificially-inflated price and lost substantially. [BN] Plaintiff is represented by: Christopher J. Keller, Esq. Eric J. Belfi, Esq. Francis P. McConville, Esq. LABATON SUCHAROW LLP 140 Broadway New York, NY 10005 Tel: (212) 907-0700 Email: ckeller@labaton.com ebelfi@labaton.com fmcconville@labaton.com RDAP LAW: Hormozdi Law Sues Over Faxed Ad, Alleges TCPA Violation ----------------------------------------------------------------- HORMOZDI LAW FIRM, LLC, a Georgia Limited Liability Company, on behalf of itself and all others similarly situated, Plaintiff, v. RDAP LAW CONSULTANTS, LLC, Defendant, Case No. 1:17-cv-01687-SCJ (N.D. Ga., May 10, 2017), alleges that Defendant transmitted by facsimile machine a one-page unsolicited advertisement to Plaintiff in violation of the Telephone Consumer Protection Act. Defendant, RDAP Law Consultants, LLC, is a limited liability company that specializes in supporting federal sentencing, post- conviction, and prison consulting for criminal defendants throughout the United States.[BN] The Plaintiff is represented by: Charles M. Clapp, Esq. 5 Concourse Parkway NE, Suite 3000 Atlanta, GA 30328 Phone: 404.585.0040 Fax: 404.393.8893 E-mail: charles@lawcmc.com REGIONAL MANAGEMENT: Appellate Brief Due June 13 ------------------------------------------------ Regional Management Corp. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that Plaintiffs/Appellants' appellate brief is due on or before June 13, 2017. On May 30, 2014, a securities class action lawsuit was filed in the United States District Court for the Southern District of New York (the "Court") against the Company and certain of its current and former directors, executive officers, and stockholders (collectively, the "Defendants"). The complaint alleged violations of the Securities Act of 1933 (the "1933 Act Claims") and sought unspecified compensatory damages and other relief on behalf of a purported class of purchasers of the Company's common stock in the September 2013 and December 2013 secondary public offerings. On August 25, 2014, Waterford Township Police & Fire Retirement System and City of Roseville Employees' Retirement System were appointed as lead plaintiffs (collectively, the "Plaintiffs"). An amended complaint was filed on November 24, 2014. In addition to the 1933 Act Claims, the amended complaint also added claims for violations of the Securities Exchange Act of 1934 (the "1934 Act Claims") seeking unspecified compensatory damages on behalf of a purported class of purchasers of the Company's common stock between May 2, 2013 and October 30, 2014, inclusive. On January 26, 2015, the Defendants filed a motion to dismiss the amended complaint in its entirety. In response, the Plaintiffs sought and were granted leave to file an amended complaint. On February 27, 2015, the Plaintiffs filed a second amended complaint. Like the prior amended complaint, the second amended complaint asserts 1933 Act Claims and 1934 Act Claims and seeks unspecified compensatory damages. The Defendants' motion to dismiss the second amended complaint was filed on April 28, 2015, the Plaintiffs' opposition was filed on June 12, 2015, and the Defendants' reply was filed on July 13, 2015. On March 30, 2016, the Court granted the Defendants' motion to dismiss the second amended complaint in its entirety. On May 23, 2016, the Plaintiffs moved for leave to file a third amended complaint. The Defendants' opposition brief was filed on June 9, 2016, and the Plaintiffs' reply was filed on June 20, 2016. On January 27, 2017, the Court denied the Plaintiffs' motion for leave to file a third amended complaint and directed entry of final judgment in favor of the Defendants. On January 30, 2017, the Court entered final judgment in favor of the Defendants. On March 1, 2017, Plaintiffs filed a notice of appeal to the United States Court of Appeals for the Second Circuit. Plaintiffs/Appellants' appellate brief is due on or before June 13, 2017. The Company believes that the claims against it are without merit and will continue to defend against the litigation vigorously. Regional Management is are a diversified consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other traditional lenders. RETAILMENOT INC: Boening Files Suit Over Sale to Harland -------------------------------------------------------- Ashley Boening, on behalf of himself and all others similarly situated, Plaintiff, v. Retailmenot, Inc., Thomas Ball, Jeff Crowe, Eric Korman, Jules Maltz, Gokul Rajaram, Greg Santora, Brian Sharples, Tamar Yehoshua, Cotter Cunningham, Harland Clarke Holdings Corp. and R Acquisition Sub, Inc., Defendants, Case No. 1:17-cv-00474, (D. Del., May 10, 2017), seeks to enjoin defendants and all persons acting in concert with them from proceeding with, consummating, or closing the acquisition by Harland Clarke Holdings, or rescinding it and setting it aside or awarding rescissory damages in case defendants consummate the merger. The suit further seeks costs of this action, including reasonable allowance for plaintiff's attorneys' and experts' fees and such other and further relief under the Securities Exchange Act of 1934. RetailMeNot, Inc. will be acquired by Harland Clarke Holdings Corp. and its wholly-owned subsidiary, R Acquisition Sub, Inc. and parent, Harland Clarke Holdings for $11.60 per share in cash. Plaintiff allege that the acquisition by Harland Clarke is inadequate given the current financial standing and forecast of the company, stating that the intrinsic value of the company is materially in excess of the amount offered. Boening also disputes the legality of the lock-in and no-solicitation clause of the said transaction. RetailMeNot is a savings destination that connects consumers with retailers, restaurants, and brands, both online and in store. The Company enables consumers to find hundreds of thousands of digital offers to save money while they shop or dine out. [BN] Plaintiff is represented by: Seth D. Rigrodsky, Esq. Brian D. Long, Esq. Gina M. Serra, Esq. RIGRODSKY & LONG, P.A. 2 Righter Parkway, Suite 120 Wilmington, DE 19803 Telephone: (302) 295-5310 Email: sdr@rl-legal.com bdl@rl-legal.com gms@rl-legal.com - and - Donald J. Enright, Esq. Elizabeth K. Tripodi, Esq. 1101 30th Street, N.W., Suite 115 Washington, D.C. 20007 Telephone: (202) 524-4290 Facsimile: (202) 333-2121 Email: denright@zlk.com etripodi@zlk.com SABRE CORPORATION: Still Defends Class Suit in New York ------------------------------------------------------- Sabre Corporation said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that plaintiffs in a class action lawsuit may appeal the court's dismissal of their state law claims upon a final judgment. The Company said, "In July 2015, a putative class action lawsuit was filed against us and two other GDSs, in the United States District Court for the Southern District of New York. The plaintiffs, who are asserting claims on behalf of a putative class of consumers in various states, are generally alleging that the GDSs conspired to negotiate for full content from the airlines, resulting in higher ticket prices for consumers, in violation of various federal and state laws. The plaintiffs sought an unspecified amount of damages in connection with their state law claims, and they requested injunctive relief in connection with their federal claim." "In July 2016, the court granted, in part, our motion to dismiss the lawsuit, finding that plaintiffs' state law claims are preempted by federal law, thereby precluding their claims for damages. The court declined to dismiss plaintiffs' claim seeking an injunction under federal antitrust law. The plaintiffs may appeal the court's dismissal of their state law claims upon a final judgment. "We believe that the claims associated with this case are neither probable nor estimable and therefore have not accrued any losses as of March 31, 2017. We may incur significant fees, costs and expenses for as long as this litigation is ongoing. We intend to vigorously defend against the remaining claims." Sabre Corporation is a technology solutions provider to the global travel and tourism industry. It operates through two business segments: (i) Travel Network, its global travel marketplace for travel suppliers and travel buyers, and (ii) Airline and Hospitality Solutions, an extensive suite of travel industry leading software solutions primarily for airlines and hoteliers. SABRE CORPORATION: Suits over Hotel Reservation Fees Pending ------------------------------------------------------------ Sabre Corporation continues to defend two class action lawsuits related to misrepresentations concerning the description of the fees received in relation to facilitating hotel reservations, the Company said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. The Company said, "Two consumer class action lawsuits have been filed against us in which the plaintiffs allege that we made misrepresentations concerning the description of the fees received in relation to facilitating hotel reservations. Generally, the consumer claims relate to whether Travelocity provided adequate notice to consumers regarding the nature of our fees and the amount of taxes charged or collected. One of these lawsuits is pending in Texas state court, where the court is currently considering the plaintiffs' motion to certify a class action; and the other is pending in federal court, but has been stayed pending the outcome of the Texas state court action. We believe the notice we provided was appropriate and therefore have not accrued any losses related to these cases." Sabre Corporation is a technology solutions provider to the global travel and tourism industry. It operates through two business segments: (i) Travel Network, its global travel marketplace for travel suppliers and travel buyers, and (ii) Airline and Hospitality Solutions, an extensive suite of travel industry leading software solutions primarily for airlines and hoteliers. SCHLUMBERGER TECH: Class Action Alleges Wrongful Termination ------------------------------------------------------------ Michael Abella, writing for Louisiana Record, reports that a DT&R field specialist recently filed a class-action lawsuit against Schlumberger Technology Corporation and Metropolitan Life Insurance Company for alleged denial of benefits and wrongful termination. Jack Venable Jr. filed a complaint on September 22 in the U.S. District Court for the Western District of Louisiana Lafayette Division alleging that the defendants violated the Louisiana Employment Discrimination Law. According to the complaint, the plaintiff alleges that he was forced to take disability leave due to chronic ankle and back pain on Sept. 23, 2015. He immediately informed defendant MetLife and made his claim for benefits. Hours after he made the claim, he was allegedly terminated without explanation. The defendants' alleged actions resulted in lost wages and employment benefits. The plaintiff holds the defendants responsible for allegedly rejecting his claim for benefits because his employment had already ended. It also denied his appeal on April 6, 2016 for the same reason. The plaintiff requests a trial by jury and seeks judgment against each defendant for all disability benefits due, interest, attorney fees, costs of suit and all other relief as the facts may provide. He is represented by James F. Willeford and Reagan L. Toledano of Willeford & Toledano in New Orleans. U.S. District Court for the Western District of Louisiana Lafayette Division Case number 6:16-cv-01336 [GN] SCOTTRADE: Consumer Class Actions Remanded to State Court --------------------------------------------------------- Alison Frankel, writing for Reuters, reports that the discount brokerage Scottrade did everything right when it was hit with multiple class actions after a 2013 hack exposed the personal information of some of its customers. Scottrade persuaded plaintiffs' lawyers to agree to transfer their cases to a single federal district, St. Louis, Missouri. Then the brokerage moved for the dismissal of its customers' consolidated class action, arguing that plaintiffs could not establish their constitutional right to sue in federal court because they couldn't show a concrete injury. Scottrade's strategy worked perfectly. Citing the U.S. Supreme Court's 2016 ruling in Spokeo v. Robins, U.S. Magistrate Judge Shirley Mensah tossed the consolidated class action last July. When she entered judgment for Scottrade a few weeks later, she dismissed the case with prejudice. End of litigation, right? Wrong. One group of plaintiffs appealed the dismissal to the 8th U.S. Circuit Court of Appeals, as you'd expect given uncertainty in the appellate courts about interpreting Spokeo. But more intriguingly, two other sets of plaintiffs, in Florida and California, filed class actions in state court that essentially repeated allegations from the dismissed federal-court class action, albeit on behalf of statewide customer classes. As you would expect, Scottrade defense lawyers from Thompson Coburn removed the Florida and California class actions to federal court under the Class Action Fairness Act. Scottrade then asked for the cases to be dismissed, arguing that customer claims have already been dismissed with prejudice in the St. Louis federal magistrate's decision. Plaintiffs, who are represented by the same lawyers in both the state court class actions and the 8th Circuit appeal, responded that federal judges in California and Florida can't dismiss the cases at all but must remand them to state court for lack of jurisdiction. According to the plaintiffs' theory, Scottrade is absolutely right that Judge Mensah's decision in the consolidated federal-court class action in St. Louis has a res judicata effect. Her finding that Scottrade customers lack constitutional standing binds all federal courts. But the proper course for federal judges overseeing follow-on statewide class actions removed to federal court, according to the Scottrade plaintiffs, is to remand the cases to state court. There's case law to back that theory. The most important precedent for plaintiffs is the 9th Circuit's 2016 in Polo v. Innoventions International, in which the 9th Circuit reversed a federal trial judge's grant of summary judgment for a defendant facing a consumer class action originally filed in state court. The appeals court said, in language that applies to situations like those in the Scottrade data breach litigation, that once the trial judge determined the plaintiffs did not have standing to sue in federal court, she should have remanded the class action to state court. "Remand is the correct remedy because a failure of federal subject-matter jurisdiction means only that the federal courts have no power to adjudicate the matter," the 9th Circuit said in Polo. "State courts are not bound by the constraints of Article III." That rule, the appeals court added, applies to class action removed to federal court under CAFA as well as to any other case. Last January, in the California wing of the Scottrade data breach case, U.S. District Judge Jeffrey Miller of San Diego agreed with plaintiffs that their class action should be sent back to California state court, not dismissed outright. Judge Miller acknowledged that the 9th Circuit has previously allowed federal judges to dismiss removed cases if they conclude the litigation would undoubtedly fail in state court, he said the 9th Circuit's Polo ruling cast doubt on the futility doctrine. Moreover, the judge held, the case raises "legitimate issues" about whether the St. Louis dismissal precludes a California state-court class action -- and no federal court can answer the question because they don't have jurisdiction under the St. Louis standing decision. The Florida branch of the case is several months behind California. Plaintiffs' lawyers from Blood Hurst & O'Reardon, Siprut, Cohelan Khoury & Singer and other firms asked U.S. District Judge James Whittemore of Tampa to remand their state- court class action, noting, of course, that his California counterpart did just that in January. (The remand brief also refutes a new argument by Scottrade that the Florida class action belongs in federal court under the Securities Litigation Uniform Standards Act.) Defendants ought to be watching to see whether Judge Whittemore agrees with Judge Miller and sends the statewide class action back to state court. The implications, if federal judges allow class actions to proceed in state court after they've been bounced out of federal court on Article III grounds could undermine whatever benefit defendants have received from CAFA and Spokeo. Consumer class action defendants will be stuck right back in state court, exactly the venue they've worked so hard to escape. Timothy Blood of Blood Hurst, who's leading all of the Scottrade cases, told me the Florida and California state class actions were less a stroke of brilliance than a necessity after the brokerage won dismissal of the consolidated class action in federal court in St. Louis. "Calling it a strategy overstates it," he said. "It was just the logical conclusion of what the defendants are doing." Mr. Blood agreed that the state court strategy will have to change if the 8th Circuit finds they had federal court standing after all. (Covering all of his bases, Blood actually argued the 8th Circuit case for plaintiffs in April.) But in the meantime, he said, if defendants intend to bounce class actions out of federal court for lack of standing, he'll keep filing statewide class actions asserting the same claims. "This is one of those times you can say, 'Hey defendants! Be careful what you ask for,'" Mr. Blood said. Scottrade's counsel is Brandi Burke of Thompson. [GN] SEC ENERGY: Faces "Martinez" Lawsuit Alleging FLSA Violation ------------------------------------------------------------ DANIEL MARTINEZ, on behalf of himself individually, and ALL OTHERS SIMILARLY SITUATED Plaintiffs, v. SEC ENERGY PRODUCTS & SERVICES, L.P., Defendant, Case No. 4:17-cv-01444 (S.D. Tex., May 10, 2017), alleges that SEC Energy does not pay its welders overtime as required by the Fair Labor Standards Act. Instead, SEC Energy Products & Services, L.P. pays its Welders straight time, not time and a half for overtime hours worked. SEC Energy Products & Services, L.P. is a full-service compression design and manufacturing company. Daniel Martinez worked for SEC Energy Products & Services, L.P. as a welder.[BN] The Plaintiff is represented by: Taft L. Foley, II, Esq. THE FOLEY LAW FIRM 3003 South Loop West, Suite 108 Houston, TX 77054 Phone: (832) 778-8182 Fax: (832) 778-8353 E-mail: Taft.Foley@thefoleylawfirm.com SHASTA COUNTY, CA: Inmates' Lawsuit Granted Class Action Status --------------------------------------------------------------- On April 5, 2017, a federal judge granted class-action status to a lawsuit filed by inmates of the Shasta County Jail to protest the jail's lack of accommodation for disabilities. The class includes all current and future detainees and prisoners at Shasta County Jail with mobility disabilities who, because of their disabilities, need appropriate accommodations, modifications, services, and and/or physical access in accordance with federal and state disability laws. A settlement conference is to take place in May 2017. The complaint, Jewett v. California Forensic Medical Group, et al., was filed in 2016 by the inmates. [GN] SNAP INC: Pomerantz LLP Files Securities Class Action ----------------------------------------------------- Gene Maddaus, writing for Variety, reports that a law firm filed a securities class action suit on May 16 against Snap Inc., alleging the company made false and misleading statements about its user growth. Pomerantz LLP, which specializes in such cases, is seeking to represent shareholders in the company which went public just two months ago. The suit notes that Snap's stock price plunged $4.93, or 21.45%, after its first quarterly report showed disappointing user growth. The suit also cites the claims of Anthony Pompliano, a former growth lead for Snapchat, who has filed his own lawsuit alleging that the company was using inflated metrics during his brief tenure there in 2015. A Snap Inc. spokesman issued this response: "Lawsuits like this are not uncommon and we are focused on growing our business." Snap has rebounded somewhat since its precipitous drop after the report. The stock closed the day on May 16 at $20.78, up $2.73 a share from its low on May 11. The Pomerantz law firm filed a similar suit last year against Twitter, alleging that the company had likewise made misleading statements about its user metrics. That case was subsequently consolidated with a similar case and the firm of Motley Rice was named lead counsel for the plaintiffs. Twitter recently filed a motion to dismiss. [GN] SPENDSMART NETWORKS: "Marchelos" TCPA Class-Action Stayed --------------------------------------------------------- SpendSmart Networks, Inc., disclosed in its Form 20-F report filed with the Securities and Exchange Commission on May 16, 2017, for the fiscal year ended December 31, 2016, that the case captioned, Peter Marchelos, et al v. Intellectual Capital Management, et al, remains stayed. On July 8, 2015, the Company and Intellectual Capital Management, LLC d/b/a SMS Masterminds were named in a potential class-action lawsuit entitled Peter Marchelos, et al v. Intellectual Capital Management, et al, filed in the United States District Court Eastern District of New York relating to alleged violations of the Telephone Consumer Protection Act of 1991. The complaint alleges that SMS Masterminds sent unsolicited text messages to the plaintiff and other recipients without the prior express invitation or permission of the recipients and such plaintiff is now seeking unspecified monetary damages, injunctive relief, costs and attorneys' fees. The case is currently stayed. The Company believes Plaintiff's allegations have no merit and will vigorously defend against Plaintiff's claims. SpendSmart Networks, Inc is a national full-service mobile and loyalty marketing agency that offers a means for small and large business owners alike to better connect with their consumers and generate sales. The Company does business under the name "SMS Masterminds." SWIFT TRANSPORTATION: Awaits Court Approval of PAGA Case Deal ------------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "California Private Attorneys General Act ("PAGA") Class Action." The plaintiff alleges that the Company violated California law by failing to timely pay wages and failing to reimburse employees for business expenses. Plaintiff: Theron Christopher Defendant: Swift Transportation Co. of Arizona, LLC Date instituted: July 8, 2016 Court or agency currently pending in: Superior Court of California, County of Riverside Recent Developments and Current Status: The parties have agreed to a settlement of this matter and are currently seeking court approval of the settlement. The expected settlement amount is not material to the Company's financial statements. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Class Cert. Bid Pending in Mares & McKinsty ----------------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "California Wage, Meal, and Rest: Driver Class Actions" The plaintiffs generally allege one or more of the following: that the Company 1) failed to pay the California minimum wage; 2) failed to provide proper meal and rest periods; 3) failed to timely pay wages upon separation from employment; 4) failed to pay for all hours worked; 5) failed to pay overtime; 6) failed to properly reimburse work-related expenses; and 7) failed to provide accurate wage statements. Plaintiff(s) Defendant(s) Date instituted ------------ -------------- --------------- John Burnell Swift Transportation Co., Inc March 22, 2010 James R. Rudsell Swift Transportation Co. of Arizona, LLC and Swift Transportation Company April 5, 2012 Lawrence Peck Swift Transportation Co. of Arizona, LLC September 25, 2014 Lawrence Peck Swift Transportation Co. of Arizona, LLC, et al. November 20, 2014 Sadashiv Mares Swift Transportation Co. of Arizona, LLC February 27, 2015 Rafael McKinsty Swift Transportation Co. of Arizona, LLC, et al. April 15, 2015 Thor Nilsen Swift Transportation Co. of Arizona, LLC October 15, 2015 Court or agency currently pending in: United States District Court for the Central District of California Recent Developments and Current Status: Before and during 2016, the Rudsell, Peck, Peck PAGA, Mares, McKinsty, and Nilsen complaints were stayed, pending resolution of earlier-filed cases. In May 2016, the Burnell plaintiffs were denied class certification. Their subsequent petition to appeal the decertification order was also denied. Following the Burnell plaintiffs' failure to certify the class, the stays on certain cases were lifted. The Peck case is currently in discovery. The parties in the Mares and McKinsty cases are currently completing class certification briefing. Based on the current procedural nature of the cases, the final disposition of the matter and impact to the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Barker and Fritsch Complaints in Discovery ---------------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "California Wage, Meal, and Rest: Yard Hostler Class Actions" The plaintiffs, representing yard hostlers employed by the Company in California, generally allege one or more of the following: that the Company 1) failed to pay minimum wage; 2) failed to pay overtime and doubletime wages required by California law; 3) failed to provide accurate, itemized wage statements; 4) failed to timely pay wages upon separation from employment; 5) failed to reimburse for business expenses; and 6) failed to provide proper meal and rest periods. Plaintiff: Grant Fritsch Defendants: Swift Transportation Company of Arizona, LLC and Swift Transportation Company Date instituted: January 28, 2016 Court or agency currently pending in: Superior Court of California, County of San Bernardino Plaintiff: Bill Barker, Tab Bachman, and William Yingling Defendant: Swift Transportation Company of Arizona, LLC Date instituted: April 1, 2016 Court or agency currently pending in: United States District Court for the Eastern District of California Recent Developments and Current Status: The Barker and Fritsch complaints are currently in discovery. The Company retains all of its defenses against liability and damages related to these lawsuits. Additionally, the Company intends to vigorously defend against the merits of the claims and to challenge certification. The final disposition of these matters and the impact on the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Settlement in "Castro" Suit Pending --------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "National Customer Service Misclassification Class Action" The plaintiff, a former Customer Service Representative IV, alleges that the Company failed to pay overtime under the FLSA. Additionally, with respect to California state law, the plaintiff alleges that the Company: 1) failed to pay overtime; 2) failed to pay timely final wages; 3) failed to provide meal and rest periods; and 4) violated the unfair competition law. Plaintiff: Salvador Castro Defendant: Swift Transportation Co. of Arizona, LLC Date instituted: May 11, 2016 Court or agency currently pending in: United States District Court for the Central District of California Recent Developments and Current Status: Castro, along with five other former Customer Service Representative IV employees opted into this collective action lawsuit, which was being pursued under the FLSA. In addition to the Castro collective action, thirteen Customer Service Representative IV employees pursued similar claims in individual arbitrations. The parties conducted three arbitrations regarding the individual claimants. The parties agreed to mediation, which was held in January 2017. The parties have reached a global settlement to the collective action and the individual arbitrations. The individual arbitration claimants have been paid pursuant to this settlement and the parties are seeking court approval of the settlement in the collective action. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Class Cert. Bid in "Julian" Suit Pending -------------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "Arizona Fair Labor Standards Act Class Action" The plaintiff alleges that the Company violated the FLSA by failing to pay its trainee drivers minimum wage for all work performed and by failing to pay overtime. Plaintiff: Pamela Julian Defendant: Swift Transportation Inc., et al. Date instituted: December 29, 2015 Court or agency currently pending in: United States District Court for the District of Arizona Recent Developments and Current Status: In March 2016, the Company filed a motion to dismiss the plaintiff's overtime claims, which was granted by the district court in May 2016. The parties recently completed briefing on the plaintiff's Motion for Conditional Class Certification and are awaiting a ruling on the Motion from the Court. The Company retains all of its defenses against liability and damages for the remaining claims. Additionally, the Company intends to vigorously defend against the merits of the claims and to challenge certification. The final disposition of the matter and the impact on the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: "Hedglin" Class Suit in Discovery ------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "Washington Overtime Class Actions" The plaintiffs allege one or more of the following, pertaining to Washington state-based drivers: that the Company 1) failed to pay minimum wage; 2) failed to pay overtime; 3) failed to pay all wages due at established pay periods; 4) failed to provide proper meal and rest periods; 5) failed to provide accurate wage statements; and 6) unlawfully deducted from employee wages. Plaintiff: Troy Slack Defendant: Swift Transportation Company of Arizona, LLC and Swift Transportation Corporation Date instituted: September 9, 2011 Court or agency currently pending in: United States District Court for the Western District of Washington Plaintiff: Julie Hedglin Defendant: Swift Transportation Company of Arizona, LLC and Swift Transportation Corporation Date instituted: January 14, 2016 Court or agency currently pending in: United States District Court for the Western District of Washington Recent Developments and Current Status: The parties in the Slack matter are currently completing dispositive motion briefing. The case is scheduled for trial in September 2017. The Hedglin matter is currently in discovery. The Company retains all of its defenses against liability and damages for both matters. Additionally, the Company intends to vigorously defend against the merits of the claims and to challenge certification. The final disposition of the matter and the impact on the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: "Garza" Suit Pending in Maricopa Court ------------------------------------------------------------ In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "Arizona Owner-operator Class Action" The putative class alleges that the Company improperly compensated owner-operators (later expanding the class to include employee drivers) using the contracted and industry standard remuneration based upon dispatched miles, instead of using a method of calculating mileage that the plaintiffs allege would be more accurate. Plaintiff: Leonel Garza Defendant: Swift Transportation Co., Inc. Date instituted: January 30, 2004 Court or agency currently pending in: Maricopa County Superior Court Recent Developments and Current Status: The original trial court's decision was to deny class certification of the owner-operators, which was reversed and reinstated several times by various courts prior to 2016. The class is currently certified, based on an appellate court's decision from July 2016. The Company filed a petition for review with the Arizona Supreme Court in August 2016, which was denied in January 2017. The matter will now proceed in the Maricopa County Superior Court. The final disposition of the matter and impact to the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Appeal in "Sheer" Class Suit Pending ---------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "Ninth Circuit Owner-operator Misclassification Class Action" The putative class alleges that the Company misclassified owner- operators as independent contractors in violation of the FLSA and various state laws, and that such owner-operators should be considered employees. The lawsuit also raises certain related issues with respect to the lease agreements that certain owner- operators have entered into with IEL. Plaintiff: Joseph Sheer, Virginia Van Dusen, Jose Motolinia, Vickii Schwalm, Peter Wood Defendant: Swift Transportation Co., Inc., Interstate Equipment Leasing, Inc., Jerry Moyes, and Chad Killebrew Date instituted: December 22, 2009 Court or agency currently pending in: United States District Court of Arizona and Ninth Circuit Court of Appeals Recent Developments and Current Status: For several years, the parties have been arguing over the proper venue in which to proceed. The plaintiffs argue that they signed contracts of employment, thus exempting them from arbitration under the Federal Arbitration Act, and claim that their case should be heard in court by a judge. The Company takes the position that these individuals signed independent contractor agreements and therefore can properly be required to submit their claims to arbitration. In January 2017, the district court issued an order finding that the plaintiffs had signed contracts of employment and thus the case could properly proceed in court. The Company has appealed this decision to the Ninth Circuit and the district court stayed the proceedings, pending resolution of the appeal. The Company intends to vigorously defend against any proceedings. The final disposition of the matter and impact to the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Settlement Finalized in "Ciluffo" Suit ------------------------------------------------------------ In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "Utah Collective and Individual Arbitration" The plaintiffs allege that the Central Parties (defined below) misclassified owner-operator drivers as independent contractors and were therefore liable to these drivers for minimum wages and other employee benefits under the FLSA. The complaint also alleges a federal forced labor claim under U.S.C. Sec. 1589 and Sec. 1595, as well as fraud and other state-law claims. Plaintiff: Gabriel Ciluffo, Kevin Shire, and Bryan Ratterree Defendant: Central Refrigerated Service, Inc., Central Leasing, Inc., Jon Isaacson, and Jerry Moyes (the "Central Parties"), as well as Swift Transportation Company Date instituted: June 1, 2012 Court or agency currently pending in: American Arbitration Association Recent Developments and Current Status: In June 2016, mediation commenced, but there was ultimately no settlement of the matter. In October 2016, the arbitrator ruled that approximately 1,300 Central Refrigerated Service, Inc. drivers were improperly classified as independent contractors, when they should have been classified and compensated as employees. The arbitrator ruled that damages could ultimately be assessed in a collective proceeding and denied the Company's motion to decertify the collective proceeding. Based upon the October 2016 arbitration ruling, the Company increased its legal accrual related to this matter for the quarter ended September 30, 2016. On April 14, 2017, the Company proposed a tentative settlement arrangement, which was finalized by and between the parties on April 28, 2017, subject to final court approval. As such, the Company increased its legal accrual again for the quarter ended March 31, 2017. The likelihood that a loss has been incurred is probable. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: Class Cert. Motion in "Banks" Suit Pending ---------------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "Indiana Fair Credit Reporting Act Class Action" The plaintiff alleges that Central Refrigerated Service, Inc. violated the Fair Credit Reporting Act by failing to provide job applicants with adverse action notices and copies of their consumer reports and statements of rights. Plaintiff: Melvin Banks Defendant: Central Refrigerated Service, Inc. Date instituted: March 18, 2015 Court or agency currently pending in: United States District Court for the District of Utah Recent Developments and Current Status: The first phase of discovery, regarding potential for identifying and certifying a class of affected job applicants, has been completed. The parties recently completed class certification briefing and the Company filed a Motion for Summary Judgment. Rulings on these Motions are pending from the court. The Company retains all of its defenses against liability and damages. Additionally, the Company intends to vigorously defend against the merits of the claims and to challenge certification. The final disposition of the matter and the impact on the Company cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. SWIFT TRANSPORTATION: No Trial Date Set Yet in "Anderson" Suit -------------------------------------------------------------- In its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, Swift Transportation Company provided updates on the case: "California Class and Collective Action for Pre-employment Physical Testing" The plaintiff alleges that pre-employment tests of physical strength administered by a third party on behalf of Central Refrigerated Service, Inc. had an unlawfully discriminatory impact on female applicants and applicants over the age of 40. The suit seeks damages under Title VII of the Civil Rights Act of 1964, the age Discrimination Act, and parallel California state law provisions, including the California Fair Employment and Housing Act. Plaintiff: Robin Anderson Defendant: Central Refrigerated Service, Inc., Workwell Systems, Inc., and Swift Transportation Company Date instituted: October 6, 2014 Court or agency currently pending in: United States District Court for the Central District of California Recent Developments and Current Status: Litigation is at a very preliminary stage and no trial date has been set. Additionally, there is a motion for class certification pending, for which the Company is preparing a response. The Company intends to vigorously defend against the merits of the plaintiff's claims and to oppose certification of any class of plaintiffs. The final disposition of this case and the financial impact cannot be determined at this time. The likelihood that a loss has been incurred is remote. Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. As of March 31, 2017, the Company's fleet of revenue equipment included 18,656 tractors (comprised of 14,017 company tractors and 4,639 owner-operator tractors), 63,207 trailers, and 9,130 intermodal containers. The Company's four reportable segments are Truckload, Dedicated, Refrigerated (formerly "Swift Refrigerated"), and Intermodal. THAILAND: Civil Court Can Consider BTS Accessibility Class Action ----------------------------------------------------------------- Sasiwan Mokkhasen, writing for Khaosod English, reports that the Civil Court said on May 18 it has the authority to consider a class-action suit filed against City Hall for failing to make the BTS Skytrain system accessible to people with disabilities. Rejecting a motion filed by the Bangkok Metropolitan Administration that the case did not fall within its purview, the Civil Court said it is the proper legal venue because the suit seeks financial compensation for violating the disabled welfare law and not for action by officials, which would have placed it in the Administrative Court. "It calls for compensation, not for action," said Sonthipong Mongkonsawat, the attorney representing the disabled rights group, which brought the suit. "We don't have the channel to seek compensation under the procedure of Administrative Court." In January, Transportation for All filed the class-action suit on the second anniversary of the landmark 2015 court decision decided in their favor. The suit demands compensation because City Hall failed to satisfy an Administrative Court giving it one year to install elevators at all of the original 23 BTS Skytrain stations. It seeks 1,000 baht for each plaintiff to join the class for each day that passed since the court-ordered deadline for the work to be completed passed on Jan. 21, 2016. It seeks four times that amount, or 4,000 baht, for every day since they filed the suit on Jan. 21, plus 7.5 percent annual interest. In March, a city lawyer filed a motion challenging the Civil Court as the proper arena for the suit. It said the dispute belonged back in the Administrative Court because it was between officials and private parties. The Civil Court's decision will go to the Administrative Court who can register any objections before a final decision is rendered by the Adjudication Committee for Power and Duty of Court, which has authority over the courts. Both City Hall and the activist group were due to go to the court again on Aug. 7 which Sonthipong believed the judgement should be made on which court is authorized to consider the suit. As of May 17, only three of the original 23 BTS stations have a sable elevators, according to disabled rights group Accessibility is Freedom. City Hall has promised that all stations would be fully equipped by the end of the year, citing problems with land ownership and underground infrastructure. [GN] TRINET GROUP: Sept. 20 Hearing on Motion to Dismiss Class Suit -------------------------------------------------------------- TriNet Group, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the court set September 20, 2017, for a hearing on the motion to dismiss a class action lawsuit. The Company said, "In August 2015, Howard Welgus, a purported stockholder, filed a putative securities class action lawsuit, Welgus v. TriNet Group, Inc. et al., under the Securities Exchange Act of 1934 in the United States District Court (the Court) for the Northern District of California. The complaint was later amended in April 2016. The amended complaint generally alleges that TriNet and the other defendants caused damage to purchasers of our stock by misrepresenting and/or failing to disclose facts generally pertaining to alleged trends affecting health insurance and workers' compensation claims. The other defendants include certain of our officers and directors, General Atlantic, LLC, a former significant shareholder, and the underwriters of our IPO." "In November 2016, the parties appeared at a hearing before the Court on our motion to dismiss the amended complaint in its entirety. "In January 2017, the Court issued an order granting TriNet's and the other defendants' motions to dismiss. The Court dismissed the plaintiff's claims in part with prejudice and in part without. As a result, the Court gave the plaintiff until March 3, 2017 to file a second amended complaint with respect to claims not dismissed with prejudice. "The plaintiff filed his second amended complaint on March 3, 2017. The defendants filed a motion to dismiss on April 17, 2017. The court set September 20, 2017 for a court hearing on the motion to dismiss. "We are unable to reasonably estimate the possible loss or range of losses, if any, arising from this litigation." TriNet Group Inc., a professional employer organization (PEO) founded in 1988, provides comprehensive human resources (HR) solutions for small to midsize businesses (SMBs) under a co- employment model. UCP INC: Faces "Tola" Lawsuit Over Century Communities Merger ------------------------------------------------------------- JOSEPH TOLA, On Behalf of Himself and All Others Similarly Situated, Plaintiff, v. UCP, INC., MICHAEL C. CORTNEY, DUSTIN L. BOGUE, ERIC H. SPERON, PETER H. LORI, KATHLEEN R. WADE, MAXIM C.W. WEBB, CENTURY COMMUNITIES, INC., and CASA ACQUISITION CORP., Defendants, Case No. 3:17-cv-02713-WHA (N.D. Cal., May 10, 2017), seeks to enjoin a proposed transaction announced on April 11, 2017, pursuant to which UCP will be acquired by Century Communities, Inc. through its wholly-owned subsidiary, Casa Acquisition Corp. Pursuant to the terms of the Merger Agreement, stockholders of UCP will receive $5.32 in cash and 0.2309 of a share in the newly combined company for each share they own. Plaintiff alleges that defendants filed a Form S-4 Registration Statement that omits material information with respect to the Proposed Transaction, which renders the Registration Statement false and misleading. Specifically, says the complaint, the Registration Statement omits material information regarding the Company's financial projections, Century's financial projections, and the analyses performed by the Company's financial advisor, Citigroup Global Markets Inc.; material information regarding potential conflicts of interest of the Company's officers and directors and Citi; and material information regarding the background of the Proposed Transaction. UCP, INC. is a homebuilder and land developer with expertise in residential land acquisition, entitlement, and development, as well as home design, construction, and sales.[BN] The Plaintiff is represented by: Rosemary M. Rivas, Esq. LEVI & KORSINSKY LLP 44 Montgomery Street, Suite 650 San Francisco, CA 94104 Phone: (415) 291-2420 Fax: (415) 484-1294 E-mail: rrivas@zlk.com - and - Brian D. Long, Esq. Gina M. Serra, Esq. RIGRODSKY & LONG, P.A. 2 Righter Parkway, Suite 120 Wilmington, DE 19803 Phone: (302) 295-5310 Fax: (302) 654-7530 UNITED STATES: High Court Set to Decide on Immigration Cases ------------------------------------------------------------ Mark Sherman, writing for The Associated Press, reports that Supreme Court decisions in a half-dozen cases dealing with immigration over the next two months could reveal how the justices might evaluate Trump administration actions on immigration, especially stepped up deportations. Some of those cases could be decided as early as May 15, when the court was set to meet to issue opinions in cases that were argued over the past six months. The outcomes could indicate whether the justices are retreating from long-standing decisions that give the president and Congress great discretion in dealing with immigration, and what role administration policies, including the proposed ban on visits to the United States by residents of six majority Muslim countries, may play. President Donald Trump has pledged to increase deportations, particularly of people who have been convicted of crimes. But Supreme Court rulings in favor of the immigrants in the pending cases "could make his plans more difficult to realize," said Christopher Hajec, director of litigation for the Immigration Reform Litigation Institute. The group generally supports the new administration's immigration actions, including the travel ban. For about a century, the court has held that, when dealing with immigration, the White House and Congress "can get away with things they ordinarily couldn't," said Temple University law professor Peter Spiro, an immigration law expert. "The court has explicitly said the Constitution applies differently in immigration than in other contexts." Two of the immigration cases at the court offer the justices the possibility of cutting into the deference that courts have given the other branches of government in this area. One case is a class-action lawsuit brought by immigrants who've spent long periods in custody, including many who are legal residents of the United States or are seeking asylum. The court is weighing whether the detainees have a right to court hearings. In the other case, the court has taken on a challenge to an unusual federal law that makes it easier for children born outside the United States to become citizens if their mother is an American and harder for them if their father is the U.S. citizen. Even after legislation in 1986, children of American fathers face higher hurdles claiming citizenship for themselves. Both cases were argued before Trump became president in January, and the Obama administration opposed the detainees' claims and the citizenship challenge. Even if the positions haven't changed, the context has, Spiro said. "The court has got to be conscious of how these rulings are going to apply to Trump administration activity," Spiro said. The decisions may directly affect people who are targeted by immigration authorities for quick deportation, or expedited removal, and immigrants who were brought to the United States as children and offered protection from deportation by the Obama administration, said Steven Vladeck, a University of Texas law professor. "An open question in immigration law concerns how much authority the government has and how strong the Constitution is as a constraint," Mr. Vladeck said. For Trump, he said a major question is how much discretion the president has. "It's at the heart of a lot of what the Trump administration wants to do," Mr. Vladeck said. Other cases involve discrete sections of the immigration law in which the decisions either will free or constrain immigration authorities from deporting people convicted of certain crimes. In one case, a Mexican immigrant is facing deportation after he was convicted in California of having sex with someone under 18 and more than three years younger than he was. The charge covered a period before and after his 21st birthday when the woman, his girlfriend, was 16. That's a crime in California, but not in most of the rest of the country and the immigrant says it should not count as sexual abuse of a minor, which under immigration law would subject him to deportation. In another case, an immigrant convicted of burglary is challenging a provision of immigration law that counts the crime as serious enough to warrant automatic deportation. Several federal appeals courts have sided with immigrants who have contended the provision is too vague. Another issue before the court also involves sending people back to their native countries, in a case in which an immigrant received bad legal advice that led to a guilty plea and certain deportation. Immigration almost certainly will continue to be a very active part of the Supreme Court's docket. The travel ban itself could be at the court in the coming months. On May 15, the federal appeals court in San Francisco is hearing the administration's appeal of an order striking down the ban. Appellate judges in Richmond, Virginia, heard a similar case recently. [GN] UNITED STATES: Judge Brown Derides $380MM Cy Pres Decision ---------------------------------------------------------- Cogan Schneier, writing for The National Law Journal, reports that is it legal to direct leftover funds from a class action settlement to nonprofit groups? One D.C. federal judge offered a resounding "no" in her dissenting opinion on May 16. The 2-1 decision from the U.S. Court of Appeals for the D.C. Circuit allows the use of the controversial practice, known as cy pres, in a decades-old class action discrimination case. The majority opinion, written by Judge Harry Edwards on May 16, upheld the District Court's approval of a revised settlement agreement to distribute the bulk of the $380 million in unclaimed compensation funds to nonprofits working with American Indian farmers. But Judge Janice Rogers Brown, in a red-hot dissent, wrote that only Congress has the power to distribute government funds -- not the courts -- and that the leftover money should be returned to the Treasury. "Cy pres permits the judiciary to take more than half the taxpayer money Congress authorized to pay claims in this case and appropriate the money for something else," Judge Brown wrote. "This is not justice. It is not even law." The majority opinion in this case did not address the legality of cy pres because the plaintiffs never raised the issue in the lower court, Judge Edwards wrote. And Judge Brown's dissent does not inherently side with the appellants, who want all of the remaining funds to be distributed to successful class action claimants. But Judge Brown wrote that allowing the executive branch to direct money from the Treasury violates the promise of the Constitution's appropriations clause that only Congress has the power to disburse money. "Perhaps one day, I will possess my colleagues' schadenfreude toward the Executive Branch raiding hundreds-of-millions of taxpayer dollars out of the Treasury, putting them into a slush fund disguised as a settlement, and then doling the money out to whatever constituency the Executive wants bankrolled. But, that day is not today," Judge Brown wrote. Judge Robert Wilkins, in a concurring opinion, criticized Judge Brown's dissent. He wrote the settlement was reached via the rule of law and good-faith negotiations. "The dissent spins a tale of corruption and conspiracy, in which the plaintiffs and the Government were complicit in bilking the nation's taxpayers to pay a political ransom," Wilkins wrote. The use of cy pres settlements has met with mixed support from circuit courts, and judges have been quick to blast the agreements when most or all settlement funds go to a charity, leaving little or nothing for class members. Joseph Sellers -- jsellers@cohenmilstein.com -- a partner at Cohen Milstein Sellers & Toll who represents the underlying class of farmers, said he doesn't think the use of cy pres in this case is something to be concerned about. "The successful claimants got somewhere between $50,000 and $250,000 a piece," Mr. Sellers said. "That's hardly a situation where what they received was negligible or nothing." The lawsuit, Keepseagle v. Perdue, was originally filed in 1999 and accused the U.S. Department of Agriculture of discriminating against American Indian farmers and ranchers when processing loan applications. A decade of litigation followed, and a $680 million settlement was reached in 2011. But more than half the money was leftover once the claims were processed, and a provision in the settlement called for those funds to be distributed to nonprofit organizations that serve Native American farmers. The plaintiffs' lawyers initially expected a fraction of the settlement would remain, so they sought to renegotiate with USDA. The district court in D.C. approved a revised settlement reached by the class counsel and the government in April 2016. It gives some of the money back to claimants, some will go to the nonprofits right away, and roughly $265 million will go to a trust to be distributed to nonprofits over time. Two members of the class were unhappy with the revised agreement and appealed the district court's decision last June. They're now considering options to appeal the D.C. Circuit's decision, too. A lawyer for one of the appellants, William Sherman -- william.sherman@dinsmore.com -- of Dinsmore & Shohl, declined to say whether they will submit a petition for an en banc review, or submit a writ of certiorari to the U.S. Supreme Court. But Mr. Sherman did say there are "plenty of issues for appeal." Attorney Donivon Craig Tingle, the other appellant who represented himself, said he plans to petition the high court, saying the original agreement was supposed to give the leftover money to charity on the assumption it would be a residual amount. "$380 million? No one could ever consider that to be residue," Mr. Tingle said. The Justice Department did not immediately return a request for comment. Mr. Sellers said he hopes the case has come to a close since the leftover money continues to sit unused. The money will continue to sit unused if an appeal moves forward. "I hope, in the end, this is the last chapter and we can put aside the differences that divided people before. It's a lot of money, and I think it makes an enormous difference," Mr. Sellers said. [GN] VALEANT PHARMA: Objects to Class Action Notification Procedures --------------------------------------------------------------- Jon Hill and Melissa Daniels, writing for Law360, report that Valeant Pharmaceuticals and Pershing Square Capital Management LP have objected to the notification procedures proposed in a newly certified class action over insider trading claims related to an attempted $55 billion takeover of Allergan Inc., telling a California federal court on May 15 that the investors behind the suit aren't giving derivative traders an adequate chance to participate. The firms urged the court to require the investors to provide individual notices of the class action to derivatives traders who might have been harmed by the alleged scheme involving Allergan stock and derivatives, even though they are not covered in the class of Allergan common stock holders that was certified by the court in March. "Given that plaintiffs seek a judgment that would, in practical effect, bar further recovery for the absent derivatives traders, the same standards that apply to providing notice to the class should also apply to derivative traders," the firms told the court. Because civil penalties for these insider trading claims are capped at the amount of the allegedly ill-gotten gains, the firms have argued that a victory by the investor class would wipe out any potential award for the derivatives traders before they ever had a chance to bring their own claims. To mitigate these due process concerns, the investors said during the certification process that derivatives traders could be notified of the action at the same time as the common stock holders. They proposed in April to alert the traders collectively via summary notices published through The New York Times, The Wall Street Journal, Financial Times and PR Newswire, which they said would constitute the "best notice that is practicable under the circumstances." But Valeant and Pershing said these published notices would not reliably reach enough potentially affected derivatives traders to fulfill the investors' pledge to provide proper notice. "Plaintiffs offer no evidence that they made any reasonable effort to ascertain the identities of derivatives sellers," the firms told the court. "Instead, they simply speculate that it will be too difficult. That is not enough." Valeant and Pershing also objected to the language included in the draft notices, which the firms said did not satisfactorily disclose that an investor win could effectively preclude claims by others. The firms asked the court to require their suggested edits be adopted by the investor class, and they requested more time for filing summary judgment motions so that those deadlines would fall after the 60-day opt-out period included in the draft notices. The suit, first brought in December 2014, said Allergan investors were damaged by the "straightforward" scheme in which Valeant allegedly tipped off Bill Ackman's Pershing Square Capital about its hostile takeover of Allergan in exchange for $400 million. Ackman and his fund "covertly" acquired a massive 10 percent stake and gleaned billions in illegal profits by selling on the news of the takeover bid, which caused a surge in Allergan's share price, the investors have alleged. Counsel for the investors could not be reached for comment on May 16. A representative for Pershing Square declined to comment. Counsel and representatives for Valeant were also not immediately available for comment. The investor class is represented by Richard D. Gluck, Mark Lebovitch, Jeremy P. Robinson, Michael D. Blatchley and Edward G. Timlin of Bernstein Litowitz Berger & Grossman LLP and Eli R. Greenstein, Stacey M. Kaplan, Paul A. Breucop and Rupa Nath Cook of Kessler Topaz Meltzer & Check LLP. Valeant is represented by Robert A. Sacks, Edward E. Johnson and Brian T. Frawley of Sullivan & Cromwell LLP. Pershing Square and Ackman are represented by Mark Holscher -- mark.holscher@kirkland.com -- Robert Boldt and Michael Shipley -- michael.shipley@kirkland.com -- of Kirkland & Ellis LLP, and John P. Coffey -- scoffey@kramerlevin.com -- Seth F. Schinfeld -- sschinfeld@kramerlevin.com -- and Eileen M. Patt -- epatt@kramerlevin.com -- of Kramer Levin Naftalis & Frankel LLP. The case is In re Allergan Inc. Proxy Violation Securities Litigation, case number 8:14-cv-02004, in the U.S. District Court for the Central District of California. [GN] VIRTUS INVESTMENT: Class Certification Granted in Securities Suit ----------------------------------------------------------------- Cara Salvatore, writing for Law360, reports that a New York federal judge on May 15 granted class certification in a securities class action against Virtus Investment Partners Inc. over alleged public misstatements, but simultaneously denied certification in another suit with similar allegations. Investors in Virtus common stock claimed they were misled by financial assurances based on F-Squared Investment Inc.'s AlphaSector investment strategy, pointing to revelations that AlphaSector's success claims were based on simulations. F-Squared eventually went bankrupt. U.S. District Judge William Pauley III granted class certification to investors who owned Virtus common stock from January 2013 to May 2015 over claims that the company misstated by seven years the launch date of a fund family and neglected in 2013 to tell investors that the company's good performance was based, at least partially, on the misstatement. Virtus had argued that the truth came out in the news before stock drops on three specific days in late 2014 and early 2015, which must mean the drops had nothing to do with the revelations. But Judge Pauley said he wasn't convinced that supposed revelations in December 2013 and May 2014 actually did get the bad news out to investors beforehand, because they may have named F-Squared but not Virtus. "Defendants' theory is undermined by evidence that investors were still in the dark throughout the class period. First, it is not clear that the December 2013 and May 2014 articles revealed the truth to Virtus Partners investors. Those news articles focused on an SEC probe into F-Squared, not Virtus, regarding possible wrongdoing based on buy/sell signals generated by an unnamed wealth management firm," the judge said. The allegations state, in essence, that Virtus told investors that AlphaSector's strategy was confirmed by live trading back to 2001. But it was later discovered that the trading strategy was developed through a "back-testing" simulation and wasn't developed until 2008, according to the complaints. The judge also shot down Virtus' questions about the would-be lead plaintiff's qualifications for the job. Virtus had taken issue with the fact that lead plaintiff Arkansas Teacher Retirement System bought and sold Virtus shares multiple times during the class period. But the judge said that didn't violate Federal Rule of Civil Procedure 23, which contains the guidelines for class certification, because it's not necessarily atypical of all class members' behavior. Virtus had also pointed to the fact that ATRS bought Virtus stock again after the dates when Virtus said the market knew fully of the issues with Virtus' public statements. Judge Pauley disagreed. "Even though lead plaintiff's final purchase of Virtus stock occurred just 16 days after news of F-Squared's Wells notice, that purchase preceded the time in May 2015 when the truth was fully revealed to the market," he said. Meanwhile, however, Judge Pauley denied class certification in another suit, this one by mutual fund investors in Virtus Opportunities Trust and led by Mark Youngers, saying that they'd missed the boat on alleging one key element of such securities class claims: reliance on the supposed misstatement in their investing decisions. "Without a class-wide presumption of reliance, each plaintiff will have to prove reliance individually. As a result, because individual issues of reliance will predominate, class certification under Rule 23(b)(3) is inappropriate," the judge said. Representatives for the Youngers and ATRS plaintiffs were not immediately available for comment. A lawyer for Virtus declined to comment. Virtus is represented by Joseph McLaughlin -- jmclaughlin@stblaw.com -- and George Wang -- gwang@stblaw.com -- of Simpson Thacher & Bartlett LLP. Mr. Youngers is represented by Laurence Rosen and Jonathan Stern of The Rosen Law Firm PA. ATRS is represented by John Esmay and Michael Rogers of Labaton Sucharow LLP and John Browne and Jesse Jensen of Bernstein Litowitz Berger & Grossmann LLP. The cases are Mark Youngers v. Virtus Investment Partners Inc. et al., case number 1:15-cv-08262, and In re Virtus Investment Partners Inc. Securities Litigation, case number 1:15-cv-01249, both in the U.S. District Court for the Southern District of New York. [GN] WAL-MART: Court Okays $7.5MM Settlement in Same-Sex Benefits Case ----------------------------------------------------------------- The Associated Press reports that a $7.5 million class action settlement between Wal-Mart and a former employee who challenged the retail chain's lack of health insurance benefits for her same- sex spouse was approved by a federal judge on May 15. The settlement will pay for claims by current and former Wal-Mart associates in the U.S. and Puerto Rico that they were unable to obtain health insurance for their same-sex spouses from 2011 to 2013. About 380 claims have been submitted. U.S. District Judge William Young approved the settlement after a brief hearing in federal court in Boston. The lawsuit was filed in 2015 by Jacqueline Cote, a Wal-Mart associate from Massachusetts who said the company denied medical insurance for her wife. Bentonville, Arkansas-based Wal-Mart Stores Inc. began offering benefits for same-sex spouses in 2014. Cote, whose wife died of ovarian cancer in 2016, said she was pleased Wal-Mart was willing to resolve the issue for her and other associates who are married to someone of the same sex. "It's a relief to bring this chapter of my life to a close," she said in a statement. Wal-Mart's senior vice president for global benefits, Sally Welborn, said the company was happy to resolve the case. "We will continue to not distinguish between same and opposite sex spouses when it comes to the benefits we offer under our health insurance plan," Welborn said in a statement. Cote was represented by the Boston-based group GLBTQ Legal Advocates & Defenders, the Washington Lawyers' Committee for Civil Rights & Urban Affairs and private law firms. [GN] WEHNER MULTIFAMILY: Faces "Long" Suit Alleging FLSA Violation ------------------------------------------------------------- LISA LONG, Individually, and on behalf of all others similarly situated, Plaintiffs, v. WEHNER MULTIFAMILY, LLC, Defendant, Case No. 3:17-cv-01258-N (N.D. Tex., May 10, 2017), alleges that Wehner failed to compensate Ms. Long fully for the overtime she worked, and moreover, failed to pay her the overtime during the pay period in which the work was performed in violation of the Fair Labor Standards Act. Wehner Multifamily is a full-service property management company.[BN] The Plaintiff is represented by: Javier Perez, Esq. Matthew R. Scott, Esq. SCOTT, PEREZ LLP Founders Square 900 Jackson Street, Suite 550 Dallas, TX 75202 Phone: 214-965-9675 / 214-965-9680 E-mail: matt.scott@scottperezlaw.com javier.perez@scottperezlaw.com WELLS FARGO: Judge Questions $142MM Sham Accounts Settlement ------------------------------------------------------------ James Rufus Koren, writing for Los Angeles Times, reports that a San Francisco federal judge is leaning toward rejecting some of the terms of a $142-million settlement aimed at ending a bevvy of class-action lawsuits against Wells Fargo & Co. over its sham accounts scandal. In a filing on May 17, U.S. District Judge Vince Chhabria asked attorneys on both sides for more information about claims made by plaintiffs' attorneys that as many as 3.5 million bogus checking, savings and credit card accounts may have been created by the bank. That figure is far more than the 2.1 million accounts the bank had estimated when it reached a $185-million settlement with regulators in September. Judge Chhabria, in a request for additional information, questioned whether the parties have the ability to accurately estimate the number of bank customers who may be eligible to participate in the settlement. "If so, what are those estimates and how were they reached? If not, why not?" asked Judge Chhabria, who was set to preside over a hearing on the proposed settlement on May 18. The estimate of 2.1 million was based on a review by the bank of accounts created between May 2011 and July 2015, while the new figure is an estimate of unauthorized accounts created between 2002 and this year. The higher figure was predicated on a recent internal investigation by the bank that concluded the practice of opening unauthorized accounts may have started as early as 2002. Bank spokesman Ancel Martinez has called the higher figure an unverified estimate that is "based on a hypothetical scenario." Judge Chhabria has other issues with the proposed settlement too, suggesting that some terms will have to be changed. For instance, attorneys representing clients in a separate class- action lawsuit over improper bank overdraft practices argued in a recent filing that the terms of the unauthorized accounts settlement could force their clients to give up their claims against the bank. Judge Chhabria said he thinks the settlement agreement should be rewritten to make clear that the overdraft claims are separate and not covered by the unauthorized accounts settlement. Alexandra Lahav, a professor at the University of Connecticut School of Law, said Judge Chhabria's demand for additional information from the parties suggests there's at least a chance the settlement could be in trouble. "I think the judge is signaling that he sees problems," Ms. Lahav said. "This sometimes happens and the parties fix the settlement. However, depending on the answers the lawyers give, he may reject the settlement." Attorneys for the plaintiffs did not respond to a request for comment. Martinez said the bank supports the settlement as is. "We believe this agreement is an important step in our journey to make things right for our customers and rebuild trust," he said. "We are reviewing the questions from the court and preparing a response." [GN] WERNER ENTERPRISES: Still Defends Drivers' Suit in Nebraska ----------------------------------------------------------- Werner Enterprises, Inc. continues to defend a class action lawsuit by drivers in the U.S. District Court for the District of Nebraska, the Company said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017. The Company said, "We are involved in class action litigation in the U.S. District Court for the District of Nebraska, in which the plaintiffs allege that we owe drivers for unpaid wages under the Fair Labor Standards Act (FLSA) and the Nebraska Wage Payment and Collection Act and that we failed to pay minimum wage per hour for drivers in our student driver training program, related to short break time and sleeper berth time. The period covered by this class action suit dates back to 2008 through March 2014." "In August 2015, the court denied our motion for summary judgment and granted the plaintiff's motion for summary judgment, ruling in plaintiff's favor on both theories of liability (short breaks and sleeper berth time). During second quarter 2016, the court issued two rulings, the first of which dismissed plaintiff's claims under the Nebraska Wage Payment and Collection Act (but not the FLSA) and the second of which granted our motion to strike plaintiff's untimely damages calculations. "As a result, we reduced our accrual in second quarter 2016, and we had a $1.2 million estimated liability at March 31, 2017 related to the short break matter. "In February 2017, the court revised the decision from August 2015 and denied summary judgment to the plaintiffs on the sleeper berth issue. In doing so, the court also ruled that the Company had not willfully violated the law on the sleeper berth claim and dismissed the liquidated damages portion of the case, related to the sleeper berth claim. "Based on the knowledge of the facts related to the sleeper berth matter, management does not currently believe a loss is probable, thus we have not accrued for the sleeper berth matter. We are currently unable to determine the possible loss or range of loss. We intend to vigorously defend the merits of these claims and to appeal any adverse verdict in this case." Werner operates in the truckload and logistics sectors of the transportation industry. WERNER ENTERPRISES: Still Defends Meal and Rest Breaks Suit ----------------------------------------------------------- Werner Enterprises, Inc. said in its Form 10-Q Report filed with the Securities and Exchange Commission on May 2, 2017, for the quarterly period ended March 31, 2017, that the Company is involved in certain class action litigation in which the plaintiffs allege claims for failure to provide meal and rest breaks, unpaid wages, unauthorized deductions and other items. "Based on the knowledge of the facts, management does not currently believe the outcome of these class actions is likely to have a material adverse effect on our financial position or results of operations. However, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time," the Company said. Werner operates in the truckload and logistics sectors of the transportation industry. XG SECURITY: Faces Class Action Over Unpaid Overtime Wages ---------------------------------------------------------- Lhalie Castillo, writing for Louisiana Record, reports that a former field technician has filed a class-action lawsuit against a software company over allegations that he was not paid the appropriate rate for overtime work. Joseph Young, individually and on behalf of all others similarly situated, filed a complaint on May 5 in the U.S. District Court for the Eastern District of Louisiana against XG Security Services LLC alleging that the software company violated the Fair Labor Standards Act. According to the complaint, the plaintiff alleges that he worked for the defendant from January to March of this year at its Elmwood office. The plaintiff holds XG Security Services LLC responsible because the defendant allegedly failed to pay overtime wages at a rate of time-and-one-half and reimburse costs he incurred when driving his personal vehicle to perform work, and retaliated against him by terminating his employment when he kept inquiring about unpaid mileage. The plaintiff seeks an order certifying this action as a collective action, award for unpaid wages, liquidated damages, costs and attorneys' fees and all further relief as the court deems just and equitable. He is represented by Amanda Hilgendorf and Gregory Miller of Miller, Hampton & Hilgendorf in Baton Rouge and Michele R. Fisher -- fisher@nka.com -- and Jason D. Friedman - - jfriedman@nka.com -- of Nichols Kaster PLLP in Minneapolis, Minnesota. U.S. District Court for the Eastern District of Louisiana Case number 2:17-cv-04749 [GN] ZILLOW: Homeowner Files Class Action Over "Zestimate" Tool ---------------------------------------------------------- Kenneth R. Harney, writing for Washington Post, reports that it was bound to happen: A homeowner has filed suit against online realty giant Zillow, claiming the company's "Zestimate" tool repeatedly undervalued her home, creating a "tremendous road block" to its sale. The suit, which may be the first of its kind, was filed in Cook County Circuit Court in Chicago by Barbara Andersen, the Glenview, Illinois, homeowner and also a real-estate lawyer. She alleges that despite Zillow's denial that Zestimates constitute "appraisals," they meet that state's definition of an appraisal, given that they offer market-value estimates and "are promoted as a tool for potential buyers." Not only should Zillow be licensed to perform appraisals before offering such estimates, the suit argues, but it should obtain "the consent of the homeowner" before posting them online for everyone to see. In an interview, Andersen said she had been approached about turning the matter into a class-action lawsuit, but she's not seeking monetary damages, for the time being. In the suit, Andersen said that she has been trying to sell her townhouse, which is in a prime location, for $626,000 -- roughly what she paid for it in 2009. Homes across the street, but with more square footage, sell for $100,000 more. But Zillow's valuation system has apparently used sales of newly built houses from a less costly part of town as comparables in valuing her townhouse, she says. The most recent Zestimate is $562,000. Emily Heffter, a spokeswoman for Zillow, dismissed Andersen's litigation as "without merit." A publicly traded real-estate marketing company based in Seattle, Zillow has been offering Zestimates since 2006 and it has more than 110 million -- whether the homes are for sale or not. The estimates are based on public records and other data using "a proprietary formula," according to Zillow. The Zestimate feature is the cornerstone of Zillow's business model. Its website pulls in millions of home shoppers, allowing the company to sell advertising space to real-estate agents. In the first quarter of this year, Zillow reported $245.8 million in revenue. Zillow acknowledges estimate errors. Nationwide, Ms. Heffter said, it has a median error rate of 5 percent. Zestimates are within 5 percent of the sale price 53.9 percent of the time, within 10 percent 75.6 percent of the time and within 20 percent 89.7 percent of the time, Zillow claims. Though the 5 percent median error rate sounds modest, that can translate into tens of thousands of dollars or more. And in some counties, error rates zoom beyond the 5 percent median -- 33.9 percent, for example, in Ogle County, Illinois, and 10 to 20 percent in a handful of counties in Ohio, Florida and Illinois. "They've been playing appraiser without being licensed for years and doing a bad job," said Pat Turner, a Richmond, Virginia, appraiser. "It's about time they got called on it." [GN] ZIMBABWE: Mbare Families File Class Action v. Harare City Council ----------------------------------------------------------------- Paidamoyo Muzulu, writing for News Day, reports that forty-seven Mbare families have taken a class action against the Harare City Council and are demanding $100 000 compensation after their properties were damaged by flash floods believed to have been caused by the city's poor drainage system. The residents, through their lawyers Allen Moyo Attorneys, claimed they lost various movable and immovable properties in last year's flash floods in the populous high-density suburb. The residents' class action was filed under case number HC4127/17. Tressie Taruvinga and 46 others accused the city authorities of negligently approving construction of Sunshine Bazaar Mall along Simon Mazorodze Road without conducting a proper environmental impact assessment of the project. The residents further argue that the construction of the mall congested the drainage system, resulting in the flash floods that destroyed their homes and household goods. "As a result of the defendant's negligence in properly assessing the construction of the said Sunshine Bazaar Mall, the plaintiffs suffered loss and defendant has the obligation to compensate for the loss suffered," the lawyers said. They added: "Our clients are seeking compensation in the sum of $100 556,70. The money is broken down as $57 556,70 for property and items damaged and swept away while $43 000 as compensation for shock, loss of sleep and alternative accommodation." The flash floods affected Mbare residents, particularly those who reside along Dumbutshena, Mwamuka, Mbirimi and Chinamhora streets. The residents also argued the city, through its chief engineer Jonathan Mutimukulu, the city did not inspect the clogged pipes caused by the construction of the complex and if they had noted the fault in time they would have fixed it. The city is yet to respond to the summons. [GN] * Securities Class Action Defendants Face Challenges ---------------------------------------------------- Douglas W. Greene, Esq. -- greened@lanepowell.com -- of Lane Powell PC, in an article for Lexology, analyzes why plaintiffs are winning the securities class action war and what defendants can do about it. At stake is a system of securities litigation that sets up one side or the other to win more cases in the long term. It has real-world consequences for directors and officers -- they expect companies, D&O insurers and brokers, and the securities defense bar to fight for a system of securities litigation defense that will allow them to get through a securities case comfortably and safely. But despite winning many battles, defendants are losing the war. Part I of this three-part post explained that the plaintiffs' bar is back, and better than ever. It comprises a small group of about a dozen firms with lead partners who are full-time national securities litigators. Given the size and focus, the plaintiffs' bar is specialized and has the capacity to coordinate. Part II explained that, in contrast, the defense bar is splintered, relatively inexperienced, and highly inefficient. This third and final part discusses how defendants can overcome these disadhttp://www.dandodiscourse.com/2017/01/31/be-careful- what-you-wish-for-part-i-does-the-reform-act-need- reforming/vantages and close the gap between the plaintiffs' bar and defense bar. The Potential Paths Forward Because the current path is leading to a strategic and economic cliff -- as I've mapped out in Part I and Part II -- we need to backtrack, examine the landscape, and pick the right path forward. What are the possible paths? Elimination or Further Reform of Securities Class Actions One alternative path is to try to kill securities class actions, or further undermine them. Over the years, various constituents have sought to eliminate or reform securities cases. Most recently, in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014), the U.S. Chamber of Commerce and others supported Halliburton in trying to abolish the fraud-on-the-market presumption established in Basic Inc. v. Levinson, 485 U.S. 224 (1988) -- the legal mechanism that allows securities cases to proceed as class actions. And, of course, industry groups achieved a significant legislative victory in 1995, through the Private Securities Litigation Reform Act. Continuing to try to kill securities class actions would be an enormous error. Securities class actions are far superior for defendants than the alternatives. If securities class actions didn't exist, the plaintiffs' bar would adjust, not perish. In place of class actions, they would file non-class securities actions that would be vastly less manageable than class actions. For evidence of what would happen without a class action mechanism, we need look no further than the global securities class action landscape in the wake of Morrison v. National Australia Bank, 561 U.S. 247 (2010). And without securities class actions as an enforcement safety net, the SEC would doubtless increase enforcement. Companies are better off with one of a handful of plaintiffs' lawyers as an adversary than an often- unknown and aggressive SEC enforcement lawyer. (I examined this question in depth, in my post "Be Careful What You Wish For, Part II: Would Companies Be Better Off Without the Fraud-on-the-Market Doctrine?") Further legislative reform could be helpful. The Reform Act mostly has helped defendants -- though it has come with a steep price tag, as I mentioned in Part I. Although I could come up with some additional defendant-friendly reforms, they would mostly be about correcting problems the Reform Act has caused (see, for example, my post "Be Careful What You Wish For, Part I: Does the Reform Act Need Reforming?") or improving litigation procedures (see, for example, my post "5 Wishes for Securities Litigation Defense: Early Damages Analysis and Discovery"). Most defense lawyers would probably suggest further raising the pleading standards. I don't think that would help much. I've always believed that the top of the plaintiffs' bar isn't really bothered by higher pleading burdens -- at core, pleading a fraud claim involves convincing a judge that the defendants are bad- guys, and a good motion to dismiss involves convincing a judge that the defendants are good-guys. The pleading standards are just a way to convey those arguments. Plaintiffs' lawyers are still able to get past motions to dismiss in a high percentage of cases and certainly in the lion's share of difficult cases. Even with even higher pleading standards, the plaintiffs would still file cases they think are the right ones, and I'd predict they'd defeat motions to dismiss at roughly the same rate. Formation of Industry Groups to Oversee Securities Class Actions Another alternative path is to form industry groups to create cohesion among groups of defendants -- for example, technology companies, biotechs, retailers, etc. Many years ago, this type of securities-litigation cohesion worked for accounting firms who, as a group, were a formidable foe. They were represented by a small group of lawyers -- there were just a few key lawyers. Although the accounting firms were fierce competitors in the business of auditing, they took a big-picture approach to the industry's litigation risk. Together, they basically chased off the plaintiffs' securities bar. Indeed, today accounting firms are typically joined as a securities class action defendant along with its audit client only in the very largest cases. Part of accounting firms' success, and the reason they aren't sued much anymore, is the Supreme Court's abolition of aiding-and- abetting liability, in Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164 (1994). But it's more than that. Auditors make statements that can still yield primary liability -- most typically, by opining that a company's financial statements conform with GAAP and the audit was performed in accordance with GAAS. But accounting firms, with their small bar of specialized lawyers, helped to largely insulate those statements from attack under the securities laws. And when accounting firms were sued along with their audit clients, the accounting firms' specialized and experienced lawyers brought significant firepower to the defense group--making the claim against the main defendants, the company and their officers and directors, more difficult. As a result, plaintiffs' firms have sued accounting firms less and less. Can public companies adopt this type of cohesive approach as a path forward? Unfortunately, a number of factors suggest it wouldn't work. The types of companies sued in securities class actions are far more numerous and diverse than the Big-X accounting firms. I watch the cases come over the transom, and the companies sued are a real mishmash, even if the types of cases seem to align in a dozen or so buckets. Even the technology industry -- historically the most frequently sued type of company, and the industry that primarily spurred the adoption of the Reform Act -- isn't sued with the consistency it once was. Biotech companies are probably the best candidate for a cohesive approach, but most of those companies have their heads down working on their drug candidates, without the time or resources necessary to coordinate. But most fundamentally, it's hard to imagine that any group of potential-defendant companies could come together and agree on a small, focused set of securities defense specialists to defend cases against them -- or to engage in enough repeat hiring that such a set would naturally develop. Once again, one of the core problems with securities litigation defense is the hordes of lawyers who comprise the so-called "securities defense bar." Until that fundamental problem is fixed, the quality of defense will continue to suffer, and the cost of even the current low-quality defense will remain ridiculously high. Greater Control by D&O Insurers Is the Only Clear Path While there is no group of defendants that can replicate the accounting-firm model, D&O insurers can play a similar unifying role across all categories of defendants. In nearly every securities class action, there is a group of D&O insurer representatives associated with the defense of the litigation. D&O insurers are the only repeat players on the defense side and as a group, they see the big picture in a way no defense firm ever could. They have the greatest economic interest in the outcome -- both overall and in individual cases. A victory for the defendants is a victory for them. They employ highly experienced claims professionals, many of whom have been involved in exponentially more securities class actions than even the most experienced defense lawyers. I have achieved superior results for many clients by working collegially with insurers -- from helping shape motion-to-dismiss arguments, to learning insights about particular plaintiffs' lawyers and their latest tricks, to selecting the right mediator for a particular case, to achieving favorable settlements that don't leave the impression of guilt. Given this expertise and alignment of interests, defense counsel should involve insurers in the defense of the case as part of their responsibility to their clients. Defense counsel should involve insurers in key strategic decisions -- working with them to help find the right defense counsel for the particular case, to help shape the overall defense strategy at the inception of the case, and to help make good decisions about the use of policy proceeds. And defense counsel who involve insurers undoubtedly help their clients make it through securities cases more successfully, efficiently, and comfortably than those who don't. Yet insurers usually are shut out of meaningful involvement in the defense, with most defense lawyers treating them almost like adverse parties and other defense lawyers merely humoring them as they would a rich relative. Although this dysfunction is rooted in a complex set of factors, it could easily be fixed. When the general public thinks about insurance, they usually think of auto insurance or other duty-to-defend insurance, under which the insurer assumes the defense of the claim for the insureds. But public-company D&O insurance is indemnity insurance: The insurer is obligated to reimburse the company and its directors and officers for reasonable and necessary defense costs and settlement payments, up to the policy's liability limit. Indemnity insurance gives the defendants control over the litigation, including counsel selection and strategic approach, with the insurer retaining limited rights to participate in key decisions. Although those rights give insurers a foot in the door, the rights are not robust or frequently exercised. Insurers often take a relatively hands-off approach to D&O claims because they assume that their customers want them to stay out of the defense of the claim. But in my experience, this is a misconception. The priority for most companies and their directors and officers is simply the greatest protection possible, including assurances that they will not be left to pay any uncovered legal fees or settlement payments. In fact, not only do most insureds not want to be stuck paying their lawyers for short- pays, they don't even want to write any checks at all after satisfying the deductible. Instead, they prefer that the insurer take charge of the bills and pay the lawyers and vendors directly. In other words, most public companies actually want their D&O insurance to respond more like duty-to-defend insurance, particularly if it were offered at a slightly lower price or with lower self-insured retentions. This is especially so for smaller public companies, for which the cost of D&O insurance and the self-insured retention can be real hardships and who often lack the resources of larger companies, such as in-house counsel. Significantly, these are the types of companies against which the plaintiffs' bar is bringing more and more securities class actions. Outside directors also lack intense allegiance to any particular defense firm. Loyalty to particular law firms is typically rooted at the level of in-house counsel, who are often beholden to particular law firms for personal reasons. In contrast, smaller public companies and outside directors typically just want to be defended well, at no cost to them. So why do insurers mistakenly think that the insureds would rather have them stay out of the defense of the claim? To be sure, after a claim is filed, the insurer often gets an earful from the insureds' lawyers and broker about the insureds' indemnity- insurance freedoms. But these aggressive positions are typically not the positions of the insureds themselves. Instead, these positions are driven by defense counsel, usually for self- interested reasons: to get hired, to justify excessive billing, or to settle a case for a bloated amount because the defense is compromised by mounting costs or the defense lawyer's inability to take the case to trial. Frequently, defense lawyers will set the stage for their clients to have a strained relationship with their insurers by feeding them a number of stock lines: "This is a bet-the-company case that requires us to go all-out to defend you, so we have to pull out all the stops and do whatever is necessary, no matter what the insurer has to say." "The insurer may ask you to interview several defense firms before choosing your lawyers. Don't do that. They'll just want to get some inferior, cut-rate firm that will save them money. But you'll get what you pay for -- we're expensive for a reason! And don't forget that we've stood by you through thick and thin since before your IPO, back when you were a partner here. Plus, we gave you advice on your disclosures and stock sales, so we're in this thing together." "The business of any insurance company is to try to avoid paying on claims, so the insurer may try to curtail our level of effort and even refuse to pay for some of our work. But trust us to do what we need to do for you. You might need to make up the difference between our bills and what the insurer pays, but we can go after the insurer later to try to get them to pay you back for those amounts." "We'll need you to support us in these insurance disputes. You don't have to get involved directly -- we can work with the insurer and broker directly if you agree. Agree? Good." That's how defense lawyers set the insurer up as an adversary, but these self-serving talking points get several key things wrong: Most importantly, D&O insurers are not the insured's adversaries in the defense of a securities class action. To the contrary, insurers' economic interests are aligned with those of the insureds. Insurers want to help minimize the risk of liability through good strategic decisions. Although keeping defense costs to a reasonable level certainly benefits the insurer, it also benefits the insureds by preserving policy proceeds for related or additional claims on the policy, so that the insureds will not need to pay any defense or settlement costs out-of-pocket, and will avoid a significant premium increase upon renewal. Insurers want their insureds to have superior lawyers -- inferior lawyers would increase their exposure. Their interest in counsel selection is to help their insureds choose the defense counsel that is right for the particular case. The key to defense counsel selection in securities class actions, for insureds and insurers alike, is to find the right combination of expertise and economics for the particular case--in other words, to find good value. A D&O insurer's business is not to avoid paying claims. D&O insurance is decidedly insured-friendly, which isn't surprising given its importance to a company's directors and officers. D&O insurers pay billions of dollars in claims each year, and there is very little D&O insurance coverage litigation. Although D&O insurance excludes coverage for fraud, the fraud exclusion typically requires a final adjudication -- it does not even come into play when the claim is settled, and even if the case went to trial and there was a verdict for the plaintiffs, it would only be triggered under limited circumstances. If utilized correctly, D&O insurers can be highly valuable colleagues in securities class action defense. Because they are repeat players in securities class actions, they are able to offer valuable insights in defense-counsel selection, motion-to-dismiss strategy, and overall defense strategy. They have the most experience with securities class action mediators and plaintiffs' counsel, and they often have key strategic thoughts about how to approach settlement. The top outside lawyers and senior claims professionals for the major insurers have collectively handled many thousands of securities class actions. Although their role is different from that of defense counsel, these professionals are more sophisticated about securities litigation practice than the vast majority of defense lawyers. D&O insurers most definitely have the practical ability to effect these changes. Although the number of insurers may seem large to many, from my perspective it is a relatively small and close-knit group. Every major D&O insurer has highly experienced internal or external claims personnel who track securities litigation developments very closely, in individual cases and the big picture. There is a relatively small number of primary insurers who write the lion's share of primary D&O policies. And there is a handful of professionals who drive thought leadership. Without question, the D&O insurance community is well-suited to be the glue that fixes the fractured defense bar. All that would be necessary are a few simple D&O insurance contract modifications. A duty to defend structure for a "Securities Claim" would work best, and I am certain it would be highly attractive to smaller companies, if offered at a lower premium or with a lower self-insured retention. Since very few cases actually involve exclusion of coverage under the fraud exclusion, the lurking problem of conflicts of interest is often not present, and in any event can be cured by Cumis counsel (i.e., an attorney employed by a defendant in a lawsuit when there is a liability insurance policy covering the claim and there is a conflict between the defendant and the insurer arising from a coverage issue). But even within the current indemnity structure, D&O insurers could easily tweak terms to give insurers a stronger voice in three areas: Select the right defense counsel for the particular case -- which would tend to create a defense bar that rivals the specialization of the plaintiffs' bar. Insurers don't need to choose counsel for defendants to make sure that they have the right counsel in place. They can require insureds to conduct an interview process that includes firms that they believe would be right for the case for strategic and/or economic reasons. Currently, insurers can't unreasonably refuse to consent to the insureds' choice of counsel. Although stronger counsel-selection language could easily be added--for example, that the insurer can propose a range of firms, and the insureds can't unreasonably refuse to consent to the insurers' options -- even the current formulation allows insurers to reasonably refuse to consent to counsel who aren't sufficiently experienced or are too expensive for the particular case. Make defendant-focused strategic and settlement decisions--which would approximate the strategic coherence of the plaintiffs' bar. Insurers don't need to have an attorney-client relationship with defense counsel to have a meaningful say in strategic decisions. The current cooperation clause already gives them this right, and it could be slightly enhanced to make clear that insurers can and should provide strategic input about the full range of decisions. In this way, insurers could not only make a difference in individual cases, but in the big picture, similar to a portfolio manager's investment decision-making. Use policy proceeds only for defense costs that further the defendants' interests -- which would allow defendants to approach the efficiency the plaintiffs' bar achieves through their contingent- fee structure. Insurers should be allowed to refuse to pay defense expenses that are not in the interests of the defendants -- including billing rates and staffing practices that exceed what is reasonable and necessary. Insurers simply need the contractual right to require a defense firm to live with the insurers' decisions and prevent a defense firm from seeking reimbursement of unpaid amounts from the defendants. In my experience, defendants actually believe that insurers are better able to judge what is reasonable than they are and are perfectly willing to defer to the insurer. The rancor typically comes from defense counsel, not the insureds. Again, a duty-to-defend option would be the very best way to accomplish necessary change. But even these types of modest changes within the current indemnity-contract framework would enable D&O insurers to greatly improve securities class action defense. A key consideration, of course, is whether brokers would be motivated to sell policies with these modifications. I'm absolutely certain that directors and officers would want to buy them. And I'm confident that client-focused brokers would want to give their clients the option to purchase a policy that would help the particular client and the broader public-company community to defend securities class actions better. Conclusion The only way for defendants to win the securities class action war is to make the defense bar more effective and efficient. And the only way to do so is for D&O insurers to have greater control of claims. Defendants are entitled to a defense that allows them to get through securities litigation safely and comfortably, and without any real financial risk. Indeed, they already expect that their D&O insurers will take care of them. Giving insurers a greater role in defending securities class actions will allow insurers to do exactly that. [GN] * Securities Case Spike Attributed to Change in Legal Strategy -------------------------------------------------------------- Judy Greenwald, writing for Business Insurance, reports that a dramatic increase in class action securities lawsuits can be attributed partly to a handful of plaintiff law firms that are pursuing smaller companies, say experts. But, at least in the immediate future, the rise in litigation is not expected to affect the directors and officers liability insurance market, where rates are still declining, because of the high amount of capital in the market and the fact that many of the claims fall within policyholders' retentions. In 2016, the number of federal securities class action litigation filings rose to their highest level in 20 years. That trend continued in the first quarter of 2017, with plaintiffs filing a record 127 federal class action securities cases, which was almost twice the 64 filed in 2016's first quarter, according to a report issued by Boston-based Cornerstone Research and Stanford Law School Securities Class Action Clearinghouse in Stanford, California. "It's an interesting phenomenon because we typically see an increase in securities litigation filings when the market is more volatile," said Glenn K. Vanzura -- gvanzura@irell.com -- a partner with Irell & Manella L.L.P. in Los Angeles. Given the eight-year bull market, litigation rates would typically be expected to decline "or at best remain steady," he said. Experts say at least one factor contributing to the trend is a handful of plaintiff law firms that are pursuing litigation against smaller companies. "There's a segment of the plaintiffs bar" consisting of smaller firms "that were less active prior to 2009, but they've gotten to the point where they're filing nearly half of the (Securities and Exchange Commission) class action lawsuits," particularly against life sciences companies, said Kevin LaCroix, executive vice president of RT ProExec, a division of R-T Specialty L.L.C. in Beachwood, Ohio. "You almost have this split in the plaintiffs bar between larger, more established firms that are filing relatively fewer cases and these more active, emerging firms that are pursuing a high-volume case strategy," he said. One reason these law firms may be targeting smaller companies is they are less likely to attract larger firms' attention, making the smaller firms more likely to be named as class counsel in litigation rather than being pushed aside, Mr. LaCroix said. The lawsuits targeting smaller companies "may not be as attractive to some of the marquee plaintiff firms," because they may not consider it worthwhile to invest in the litigation, said Jackie Waters, Chicago-based managing director and practice leader of Aon Risk Solutions' financial services group legal and claims practice. Lawsuits are being filed "any time there seems to be any bad news, or any noticeable decline in the stock price, frankly, without regard to the merit of their claims," said Mr. Vanzura of Irell & Manella. Ms. Waters said, however, "The dismissal rate is still very high, so it remains to be seen how successful that group will be." Experts say there are other factors contributing to rise in litigation, including the shift of merger-objection lawsuits from federal to state courts, following the rejection in January 2016 of a disclosure-only settlement by the Delaware Chancery Court. A disclosure-only lawsuit is litigation filed by plaintiff attorneys following a merger or acquisition that results in them being awarded legal fees when all they did was force defendants to provide largely immaterial disclosures about the deal. "Rather than pushing and pushing in the state of Delaware" many moved to federal court, said Ms. Waters. Increasing M&A activity has also contributed to the increase in shareholder litigation, said Mr. Vanzura. As those deals continue, "one would expect to see increased filings," he said. Mr. LaCroix said the increase also reflects the large number of lawsuits being filed against life science companies, particularly biotechnology and pharmaceutical firms. "The plaintiff lawyers seem to be targeting that industry class," said Mr. LaCroix. Although these firms have always been litigation targets, "it just seems like part of the plaintiffs bar is really bearing down," on this segment. But the rise in filings over the past quarter may not reflect a trend, he said. "A single calendar quarter might be too short to use as a basis for generalization," he said. "I think we need to keep an eye on it and see how it's going to develop as the rest of the year progresses." A continuation of the rise will likely depend on future developments, said Mr. Vanzura. For example, if the there is a "bursting of the bubble" and a stock market slide, there will be more "traditional" shareholder litigation. "But if the market continues its run, we can expect to see some of the plaintiffs firms continue their business approach of filing any time there is the slightest decline" in individual companies' stock price, he said. And the outcome of the M&A suits filed in federal courts will also affect the volume of future litigation, Ms. Waters said. In addition, "if there's some traction" by the lawsuits being filed against smaller firms "then maybe the larger plaintiffs firms will be interested in driving those as well, but I still think the dismissal rate is good," she said. Meanwhile, excess insurance capacity and higher self-insured retentions than in the past will likely suppress rate increases, despite the rise in litigation, experts said. A survey issued earlier this month by Aon Risk Solutions reported lower D&O insurance rates for both the fourth quarter of 2016 and the entire year. Mark Weintraub, Atlanta-based vice president, insurance, and claims counsel for Lockton Cos. L.L.C., said, "The market has set retentions at such a point," certainly for merger objection lawsuits, that insurers are "not feeling the pain at this point." The retentions "are doing what they're designed to do," and there are not a disproportionate number of claims breaching their retention levels from the additional claims, he said. "Because a number of these cases either settle for small dollars, or never make it beyond the pleading stage in many instances, it's the companies that are out of pocket, because the defense costs only marginally exceed, or don't exceed, the retention amount," said Mr. Vanzura. "You haven't shifted the landscape much for D&O insurers." [GN] * Slater & Gordon's Top Class Action Lawyers Quit ------------------------------------------------- Sarah Thompson, Anthony Macdonald and Joyce Moullakis, writing for Australian Financial Review, report that Slater & Gordon's top class actions lawyers including team leader Ben Phi are quitting the beleaguered firm, according to sources. The listed law firm, which posted a $425.1 million half-year loss in February, is understood to have put Phi and two other leading class actions lawyers on gardening leave while they serve out their notice. A Slater & Gordon spokeswoman said the firm would not "comment on employee matters, as per our policy". The dramatic departures come as the firm finalises critical recapitalisation plans with hedge funds. The four core funds driving the process -- Anchorage Capital, Davidson Kempner, York Capital Management and Taconic Capital -- are set to finalise a scheme of arrangement before June-end that will see them take about 95 per cent of the company's equity. There are questions over what the funds might want to do in the multi-million dollar class actions space. Slaters was a market leader in the zone when it listed in 2007 -- becoming the first law firm in the world to go public -- but the risks associated with high-stakes claims and the lumpy nature of settlements may make it a less attractive enterprise for shareholders. On its website, Slaters touts "experience in running some of Australia's most complex and large-scale class actions", claiming title as "one of Australia's leading class action law firms". The firm has over 20 class actions on foot, including against infant formula maker Bellamy's for misleading the market on regulatory change in China and a number of banks for financial planning failures including ANZ, National Australia Bank and NAB. Phi's scorecard London-based Phi has led the class actions team across Australia and the UK since August 2016, and the national team for almost two years before that. He has worked at Slaters for his entire career, beginning in 2003. Significant wins brokered for the firm include a $75 million settlement against GPT Group, $57.5 million against Sigma Pharmaceuticals and $46.6 million against Nufarm. It is not known whether any other lawyers or clerks among the 35- strong class actions team at Slaters will join the three who are leaving. It was revealed the firm is chasing GBP600 million ($1 billion) in damages from Watchstone, the UK company which sold it the plagued Quindell. The firm first flagged it would take legal action on the disastrous acquisition in September. [GN] ********* 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. Marion Alcestis A. Castillon, Ma. Cristina Canson, Noemi Irene A. Adala, Joy A. Agravantefor, Valerie Udtuhan, Julie Anne L. Toledo, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2017. 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 Joseph Cardillo at 856-381- 8268. * * * End of Transmission * * *