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C L A S S A C T I O N R E P O R T E R
Friday, June 4, 2021, Vol. 23, No. 106
Headlines
ALASKA AIRLINES: Bid for Summary Judgment in Clarkson Suit Granted
AMAG PHARMACEUTICALS: Zamfirova Suit Dismissed Without Prejudice
AMAZON.COM INC: Faces USERRA Suit Over Unpaid Military Leave
AMERICAN AIRLINES: July 23 Extension to File Class Cert. Bid Tossed
APPLE INC: Faces Class Action Suit Over Anti-Competitive App Store
APPLUS TECH: CT Drivers' License Holders Sue Over Data Breach
ARRAY BIOPHARMA: Voulgaris Class Cert. Bid Denied w/o Prejudice
ARRAY TECHNOLOGIES: ClaimsFile Reminds of July 13 Deadline
ARRAY TECHNOLOGIES: Howard G. Smith Discloses Securities Class Suit
BELMONT MANAGEMENT: Court OKs Final Collective Action Certification
CELLCO PARTNERSHIP: Court Confirms Arbitration Award in Adell Suit
CHEMOCENTRYX INC: ClaimsFiler Reminds Investors of July 6 Deadline
CHIME FINANCIAL: Class Settlement in Richards Suit Has Final Nod
CHURCHILL CAPITAL: Discloses Securities Class Action Lawsuit
CLOUDERA INC: Consolidated Amended Securities Class Suit Dismissed
CONTEXTLOGIC INC: ClaimsFiler Reminds of July 16 Deadline
CONTEXTLOGIC INC: Rosen Law Reminds Investors of July 16 Deadline
CREDIT SUISSE: Law Firm Joins Securities Class Action Lawsuit
CREE INC: Briefing on Class Certification in Wedra Suit Extended
DANIMER SCIENTIFIC: Glancy Prongay Reminds of July 13 Deadline
DAPPER LABS: Rosen Law Discloses Securities Class Action Lawsuit
DESIGNER BRANDS: Dismissal of Count I in LaGuardia TCPA Suit Denied
DEVON ENERGY: Class Settlement in Price FLSA Suit Gets Approval
DRESSER LLC: Court Denies Bid to Compel Depositions in Barton Suit
DXC TECHNOLOGY: Appeal on Class Action's Dismissal Pending
DXC TECHNOLOGY: Bid for Initial Certification in Forsyth Granted
DXC TECHNOLOGY: California Consolidated Class Suit Dismissed
EASTLAND MALL: Beaver Wins Final Class Certification Under FLSA
EMERGENT BIOSOLUTIONS: Thornton Law Reminds of June 18 Deadline
FIRST AMERICAN: Denial of Munro's Bid for Leave to Amend Affirmed
FLEX LIMITED: Dismissal of Putative Class Suit Under Appeal
FLINT, MI: Jones' Water Crisis Suit Dismissed With Prejudice
FRANKLIN, TN: Partial Summary Judgment in Clarke Suit Affirmed
GAIN CAPITAL: Zhang Suit Tossed Under Forum Non Conveniens Doctrine
GENERAL MOTORS: Court Certifies Idaho Class in Siqueiros Suit
GENIUS BRANDS: Hearing on Bid to Nix Class Suit Set for July 5
GGP INC: Court Dismisses Third Amended Stockholder Class Suit
GREG GOSSETT: Non-Party Bid for Reconsideration in Ross Suit Nixed
GX ACQUISITION: Celularity Merger Related Suits Underway
HARVEST CAPITAL: Portman Ridge Merger Related Suits Ongoing
HIDEAWAY HILLS: Residents One Step Closer to Class-Action Status
I360 LLC: Court Dismisses Tag Suit Over Invasion of Privacy
INTRUSION INC: Rosen Law Reminds Investors of June 15 Deadline
INTUIT INC: Free File Suit Resolved on Non-Class Basis
KONICA MINOLTA: Court Narrows Claims in Luense ERISA Class Suit
KS STATEBANK: Class Settlement in Saliba Suit Gets Initial Approval
LA SALLE UNIVERSITY: Title IX Attorney Hired by Volleyball Players
LEXISNEXIS RISK: Class Settlement in Gaston Suit Has Final Approval
LOUISIANA: Class of Medicaid-Eligible Youths Certified in AA v. LDH
MICROCHIP TECH: Discovery Ongoing in Jackson Putative Class Suit
MIDDLE TENNESSEE: Form of Class Notice in Hawkins Suit Approved
MIJ INC: Conditional Certification of Class in Ford Suit Denied
MYMD PHARMACEUTICALS: Liu Putative Class Suit Dismissed
NATIONS RECOVERY: Class Settlement in Esposito Wins Final Approval
NORDSON CORP: Settlement Reached in Ortiz Suit
NORTONLIFELOCK INC: June 14 Trial Date on Securities Suit Vacated
NVIDIA CORP: Dismissal of Securities Class Suit Under Appeal
PAPA JOHN'S: Faces Suit Over Delivery Drivers' Improper Wage Pay
PELOTON INTERACTIVE: Kessler Topaz Reminds of June 28 Deadline
PORCH GROUP: Former Employee's Suit v. HireAHelper Underway
PRECISION CASTPARTS: Judgment Issued on Murphy's Remaining Claims
PROJECT O.H.R.: Class Certification Order in Kurovskaya Affirmed
PROVENTION BIO: Pomerantz Law Reminds of July 20 Deadline
PURECYCLE TECHNOLOGIES: ClaimsFiler Reminds of July 12 Deadline
PURECYCLE TECHNOLOGIES: Theodore & Tennenbaum Suits Underway
RITE AID: Loses Bid to Arbitrate Drug Pricing Class Action
ROCK 'N PLAY: Opposition to Class Certification Bid Due June 16
SANDERSON FARMS: Broiler Chicken Grower Litigations Underway
SANDERSON FARMS: Discovery in Antitrust Suit Ongoing
SANDERSON FARMS: Discovery in La Fosse Putative Class Suit Ongoing
SANDERSON FARMS: Discovery Ongoing in Jien Putative Class Suit
SCWORX CORP: Bid to Nix Suit Over COVID-19 Rapid Test Kits Pending
STEVENS INSTITUTE: Court Narrows Claims in Mitelberg Class Suit
SUNWORKS INC: Vieyra Putative Class Suit Dismissed
TARGET CORP: Faces Class Action Lawsuit Over Tampered Gift Cards
TELIGENT INC: Continues to Defend Econazole Antitrust Litigation
TELIGENT INC: Generic Drug Price-Fixing Suit Underway in Canada
TELIGENT INC: Settlement Reached in Okla. Police Pension Fund Suit
THERMON GROUP: Settlement Reached in THS Heating Elements Suit
UNION INSURANCE: Deer Mountain Class Suit Dismissed With Prejudice
UNITED SERVICES: Court Upholds Substitution of Elter as Class Rep.
UNITED STATES: Class Certified in Scott FTCA Suit v. BOP's MDC
UNIVERSITY OF IOWA HOSPITALS: Judge Allows Workers to Join Suit
UNIVERSITY PHYSICIANS: Loses Bid to Dismiss Butterfield Class Suit
WEST VIRGINIA: Cheatham's Bid to Dismiss Class Complaint Junked
WIRBICKI LAW: Loses Bid to Dismiss Bandele FDCPA Class Suit
Asbestos Litigation
ASBESTOS UPDATE: AMETEK Still Defends Asbestos-Related Suits
ASBESTOS UPDATE: Chemours Co. Assumes 1,000 EID PI Lawsuits
ASBESTOS UPDATE: Crane Has 29,407 Pending Claims at March 31
ASBESTOS UPDATE: Exelon Had $88MM Est. Liabilities at March 31
ASBESTOS UPDATE: Freeport-McMoRan Still Defends Exposure Claims
ASBESTOS UPDATE: Harsco Faces 17,192 PI Claims at March 31
ASBESTOS UPDATE: Meritor Inc. Records $75MM in Future Claims
ASBESTOS UPDATE: ODP Corp.'s OfficeMax Faces Various PI Claims
ASBESTOS UPDATE: Park-Ohio Holdings Still Defends 121 Cases
ASBESTOS UPDATE: Roper Tech. Still Defends Asbestos Claims
ASBESTOS UPDATE: Sempra Energy's Subsidiaries Defends PI Lawsuits
ASBESTOS UPDATE: Trane Technologies' Subsidiaries Faces PI Suits
ASBESTOS UPDATE: Transocean's Subsidiary Defends 256 PI Lawsuits
ASBESTOS UPDATE: Xylem Inc. May Still Face Exposure Claims
BESTWALL LLC: Subpoenas Served on 9 Asbestos Trusts Quashed
*********
ALASKA AIRLINES: Bid for Summary Judgment in Clarkson Suit Granted
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In the case, CASEY CLARKSON, Plaintiff v. ALASKA AIRLINES, INC.,
HORIZON AIR INDUSTRIES, INC., and ALASKA AIRLINES PENSION/BENEFITS
ADMINISTRATIVE COMMITTEE, Defendants, Case No. 2:19-CV-0005-TOR
(E.D. Wash.), Judge Thomas O. Rice of the U.S. District Court for
the Eastern District of Washington granted the Defendants' Motion
for Summary Judgment.
The matter arises from Plaintiff Clarkson's class action filed
against Defendants Alaska and Horizon on Jan. 7, 2019. The
Plaintiff was employed as an airline pilot for Horizon from
November 2013 to November 2017, and thereafter was employed by
Alaska. During the Plaintiff's employment with both Horizon and
Alaska, he was an active member of the Washington Air National
Guard. He typically performed military duty for approximately 10
to 12 days per month from November 2013 through June 2018.
While employed by Horizon, the Plaintiff took the following periods
of military leave: June 8-July 8, 2017; Sept. 9-14, 2017; and Oct.
1-26, 2017. Before taking military leave in June 2017, the
Plaintiff was employed as a turboprop Captain; upon return from
leave in July 2017, the Plaintiff was once again employed as a
turboprop Captain. There is no evidence in the record that Horizon
employed the Plaintiff in any position other than a turboprop
Captain during the relevant time period.
For each of the months the Plaintiff took military leave while
employed by Horizon, he received 2.45 flight credit hours per day
for each day he was on leave pursuant to Horizon's Virtual Credit
policy, which was implemented in May 2017. The Virtual Credit
policy applied to all forms of leave, military or otherwise. The
Plaintiff's virtual credits were combined with his earned credits
to determine his flight schedules, which were built and assigned
using a Preferential Bidding System ("PBS"). He generated the
minimum required credit hours to be assigned a Line Holder schedule
for each month he took military leave, with the exception of July
2017; in that month, he was assigned a Reserve schedule.
The schedule to which a pilot was assigned was based, in part, on a
pilot's ability to meet a certain threshold of credit hours. Line
Holder schedules required at least 70 credit hours. If a pilot
could not meet the 70 credit hour minimum, a pilot would be
assigned a Reserve schedule. Pilots assigned to Line Holder
schedules fly specific trips whereas pilots assigned to Reserve
schedules are on call for specific days. According to the
Collective Bargaining Agreements ("CBAs"), a turboprop pilot
assigned to a Line Holder schedule was guaranteed a minimum pay of
70 credit hours. Reserve schedules were guaranteed a minimum pay
of 73 credit hours. In addition to provisions governing scheduling
and compensation, the CBAs also governed leaves of absence,
specifically for jury duty, sick leave, bereavement leave, military
leave, and personal leave, and any compensation awarded during
those leave periods.
The parties dispute whether the Defendants' compensation practices
for the covered forms of leave, including Horizon's Virtual Credit
policy, comply with the Uniformed Services Employment and
Reemployment Rights Act ("USERRA"), 38 U.S.C. Section 4301 et seq.
The Plaintiff alleges the Defendants practices violate USERRA by
continuing to pay employees who take comparable non-military leave
their full wages but failing to pay employees who take military
leave their full wages. He also alleges Defendant Horizon's
Virtual Credit policy forced him into a lesser status than he held
prior to his military leave, thereby denying him certain
seniority-based rights and benefits that would have accrued but for
his military leave. The Defendants argue they are not required to
pay employees who take military leave nor do they provide any
rights or benefits to employees who take non-military leave that
are not also provided to employees who take military leave.
Discussion
I. Count IV - Paid Leave Claim
Count IV alleges the Defendants fail to provide the Plaintiff and
the other members of the Paid Leave Class the same rights and
benefits for military leave that the Defendant provides to other
employees who take non-military leave in violation of 38 U.S.C.
Section 4316(b).
The Defendants move for summary judgment as to Count IV on the
grounds that neither USERRA nor its federal regulations require
employers to pay employees who take military leave. Specifically,
they argue there are no "rights and benefits" as defined by the
applicable CBAs that are provided to employees who take
non-military leave that are not also provided to employees who take
military leave. They further argue military leave is not
comparable to any other forms of leave provided in the applicable
CBAs for the purposes of determining entitlement to "rights and
benefits" under USERRA.
The Plaintiff asserts employees who take non-military leave are
provided the benefit of Loss of Pay protection while employees who
take military leave are not afforded the same, resulting in lost
wages. He also argues there are genuine issues of material fact as
to whether other forms of non-military leave are comparable to
military leave in terms of duration, purpose, and flexibility.
A. Rights and Benefits
Judge Rice explains that while the issue is not widely litigated,
there seem to be two competing views among the courts as to whether
the definition of "rights and benefits" includes a requirement for
paid military leave. Some courts have found "the definition of
'rights and benefits' under USERRA embraces paid leave," citing
White v. United Airlines, Inc., 987 F.3d 616, 621 (7th Cir. 2021).
Other courts have concluded "the text of the USERRA Act
unambiguously excludes paid military leave from its definition of
'rights and benefits,'" citing Travers v. FedEx Corp., 473
F.Supp.3d 421, 426 (E.D. Pa. 2020). The disagree ment among the
courts centers on statutory interpretation.
The Judge holds that both parties' arguments would require the
Court to adopt an interpretation of the "rights and benefits"
definition. However, he need not make such a determination. As
the White court indicated, a factual inquiry as to whether the
military leave is comparable to other forms of covered leave is
also required for a claim under Section 4316(b). Therefore, the
Judge will limit his ruling to the facts of this particular case
and declines to adopt a specific interpretation of the "rights and
benefits" definition.
B. Comparable Forms of Leave
The Department of Labor has identified several factors to assist in
evaluating whether non-military leave is comparable to military
leave. Those factors include the duration of the leave, the
purpose of the leave, and the ability of the employee to choose
when to take the leave. Id. Of those factors, the duration of the
leave "may be the most significant."
The Defendants argue the other forms of non-military leave covered
by the relevant CBAs -- jury duty, bereavement, and sick -- are not
comparable to military leave. The Plaintiff alleges there are
issues of fact as to whether any of the other non-military leaves
are comparable.
Judge Rice holds that because pilots have a greater degree of
control over their ability to take military leave and schedule
around such leave, military leave is not comparable to other forms
of leave covered by the CBAs. Military leave is automatically
granted. This is not true of bereavement, sick leave, and
vacation. Bereavement leave is granted with discretion or may be
taken using unpaid personal leave or accrued sick days. Likewise,
sick leave and vacation are not automatically granted, but can be
taken using accrued paid days or by taking unpaid personal leave
Based on the foregoing, there are no genuine issues of material
fact as to whether military leave is comparable to other forms of
leave covered by the CBAs; they are not comparable. Therefore, the
Defendants are entitled to summary judgment with respect to Count
IV.
II. Counts I - III - Virtual Credit Claims
Counts I to III pertain to Defendant Horizon's Virtual Credit
policy. The Plaintiff seeks relief in his individual capacity for
these claims. Count I alleges the Defendant's Virtual Credit policy
provided the Plaintiff with fewer credit hours than he would have
received but for his military leave, thereby failing to properly
reemploy him upon his return, in violation of 38 U.S.C. Sections
4312(a), 4313(a)(1). Count II alleges the Defendant's Virtual
Credit policy failed to treat military leave as continuous
employment, thereby denying the Plaintiff his seniority-based
rights and benefits, in violation of 38 U.S.C. Section 4316(a). It
alleges the application of the Defendant's Virtual Credit policy
led to the Plaintiff's demotion following his return from military
leave in violation of 38 U.S.C. Section 4316(c).
A. Counts I and III
The Defendants move for summary judgment on Counts I and III on the
grounds that the Plaintiff was never "demoted" or "discharged," he
has no damages, and because he lacks standing as he is no longer
employed by Horizon. The Plaintiff argues the Virtual Credit
policy forced him to take Reserve schedule status, which he alleges
is a lesser position than the Line Holder schedule he previously
held, and that Plaintiff was harmed by being forced to work
additional hours to achieve Line Holder status.
Judge Rice finds a pilot's assignment to a Reserve schedule is not
a demotion as contemplated by the statute and regulations. The
Plaintiff generally retained the same "opportunities for
advancement, working conditions, job location, shift assignment,
responsibility, and geographic location" upon reemployment. The
Plaintiff was a Captain of a turboprop aircraft when he left for
military leave and he was reemployed as a Captain of a turboprop
aircraft when he returned. The evidence shows the Plaintiff did
not experience a significant change in job duties or
responsibilities. His pay remained the same based on the number of
flight hours Plaintiff flew during a bid period. The Plaintiff
does not allege he was forced to relocate, that his working
conditions changed, or that he was denied opportunities for
advancement. His subjective preference for a certain flight
schedule cannot overcome the evidence that he was reemployed in the
same position he held prior to his military leave. Thus, the
Defendants are entitled to summary judgment as to Counts I and
III.
The Plaintiff's arguments regarding loss of pay or loss of credit
hours due to receiving a Reserve schedule are not relevant under
Sections 4312 and 4313, which apply only at the instant of
reemployment; the Plaintiff's alleged damages are better addressed
under Secton 4316, which applies to actions or conditions after
successful reemployment.
B. Count II
The Defendants seek summary judgment as to Count II on the grounds
that the benefit the Plaintiff seeks -- Line Holder assignment --
is not a seniority-based benefit under the statute and because he
was not disadvantage by Horizon's Virtual Credit policy. Te
Plaintiff argues Line Holder assignment is a seniority-based
benefit because it provides a greater minimum pay guarantee and a
more predictable schedule, which is not provided to Reserve Line
assignments.
Judge Rice holds that granting the Plaintiff an increased
recalculation and "premium pay" would effectively allow him to earn
double income for his military service from both the United States
military and the Defendant. USERRA requires only equal, but not
preferential treatment of employees who take military leave. Thus,
the Plaintiff is not entitled to compensation from Defendant beyond
what is already provided by the Virtual Credit policy.
Based on the foregoing, the Judge finds there are no genuine issues
of material facts as to whether the assignment of Line Holder
status is a seniority-based right or benefit. No reasonable fact
finder could conclude the assignment of a pilot's schedule, based
primarily on availability to fly in a Bid Period, was anything
other than a bona fide work requirement. Therefore, the Defendants
are entitled to summary judgment as to Count II.
III. Liquidated Damages
The Defendants seek summary judgment on the Plaintiff's claim for
liquidated damages. The Plaintiff contends there is sufficient
evidence to support a finding that the Defendants willfully
violated USERRA. A court may require an employer to pay liquidated
damages if the court determines the employer willfully failed to
comply with the USERRA provisions. Having determined the
Defendants did not violate the USERRA provisions at issue, the
Plaintiff's arguments for liquidated damages are moot. The
Defendants are entitled to summary judgment on the Plaintiff's
claim for liquidated damages.
Order
Judge Rice granted the Defendant's Motion for Summary Judgment. He
denied as moot the parties remaining motions. He vacated as moot
the trial and all other hearings and deadlines. The District Court
Executive is directed to enter the Order, enter Judgment for the
Defendants, furnish copies to the counsel, and close the file.
A full-text copy of the Court's May 24, 2021 Order is available at
https://tinyurl.com/4tvus893 from Leagle.com.
AMAG PHARMACEUTICALS: Zamfirova Suit Dismissed Without Prejudice
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In the case, ZAMFIROVA, et al., Plaintiffs v. AMAG PHARMACEUTICALS,
INC., Defendant, Civil Action No. 20-cv-00152 (D.N.J.), Judge John
Michael Vazquez of the U.S. District Court for the District of New
Jersey granted the Defendant's motion to dismiss the Plaintiffs'
Consolidated Amended Class Action Complaint.
The putative class action arises out of the Defendant's marketing
and sale of the prescription drug Makena to the Plaintiffs. AMAG
is a pharmaceutical company that currently holds the rights to
market and sell the prescription drug Makena. AMAG and previous
companies have marketed and sold Makena to prevent premature
births. The Plaintiffs are residents of California, New York, New
Jersey, Kansas, Missouri, and Wisconsin who were "prescribed,
injected with, and purchased Makena." They claim that AMAG
misrepresented the effectiveness of Makena.
The active chemical ingredient in Makena is hydroxyprogesterone
caproate, which has been on the market since 1956. The Plaintiffs
allege that hydroxyprogesterone caproate was initially developed in
the early 1950s. In 1956, a company named "Squib" acquired the
license to the patent and marketed it under the brand name
Delalutin to treat abnormal bleeding in patients with uterine
cancer and later to treat pregnant women who had tumorous ovaries
removed. In the 1990s, Delalutin was used to treat imminent
premature birth threat during pregnancy; however, in 1995, Bristol
Myers Squib voluntarily withdrew the drug from the market.
A company called Hologic then developed and obtained FDA approval
for Makena. On Feb. 3, 2011, the FDA approved the New Drug
Application ("NDA") that Hologic filed, seeking "accelerated
approval" for Makena. According to the Plaintiffs, the data used
to support Makena's fast-track application and subsequent approval
was insufficient to assess Makena's efficacy. They claim that the
FDA relied heavily on a single clinical trial published in 2003 by
the National Institute of Child Health and Human Development.
The Plaintiffs allege that a statistical review and evaluation by
the FDA in 2010 found that reliance on the 2003 study was
insufficient to establish the efficacy of Makena in preventing
preterm births. Nonetheless, the FDA approved Makena on a
fast-track basis, allowing the drug to hit the U.S. market.
The Plaintiffs assert that the previous owners of Makena have
overcharged for the drug and have also aggressively attacked the
efficacy of the generic form of Makena. They note that a 2013
study appeared to find that Makena might reduce the risk of preterm
births in at-risk mothers. Through a series of transactions, AMAG
acquired the exclusive rights to market and sell Makena. The
Plaintiffs add that AMAG followed its predecessors in overcharging
for Makena.
The fast-tracked approval of Makena was conditioned on a follow-up
clinical trial to confirm the drug's efficacy. On March 8, 2019,
AMAG revealed the results of that FDA mandated follow-up trial,
known as the PROLONG Study. The PROLONG Study revealed "no
statistically significant differences concerning miscarriage and
stillbirths between Makena and the placebo treatment. After the
PROLONG Study results were revealed, the FDA's Bone, Reproductive
and Urologic Drugs Advisor Committee recommended that Makena be
withdrawn from the market.
The Plaintiffs allege that on information and belief, both because
of the original problems with the Meiss study, and because the
incoming data for the PROLONG trial were showing Makena was
ineffective, AMAG knew far earlier than finalization of the PROLONG
study that Makena was ineffective. They continue that, after the
PROLONG Study, the health insurance industry signaled that it would
not pay claims for Makena treatment due to inefficacy. The
Plaintiffs assert that AMAG has responded with claims that removing
Makena from the market would exacerbate inequitable health outcomes
in healthcare. AMAG has not yet removed Makena from the market.
The Plaintiffs claim that certain statements by AMAG concerning
Makena violate the consumer protection laws of several states.
Their general theory is that AMAG's statements that Makena was
effective in reducing preterm births constitute unconscionable
commercial conduct. They contend that but for misleading
statements that Makena was effective, they would not have purchased
or been injected with Makena.
The Plaintiffs filed their initial Complaint on Jan. 3, 2020. On
April 2, 2020, they filed their FAC. The FAC is comprised of the
following counts: (1) violation of the New Jersey Consumer Fraud
Act, N.J.S.A. Section 56:8-2 ("NJCFA") (Count One); (2) violation
of the California Bus. & Prof. Code Section 17200 (Count Two); (3)
violation of the California Consumer Legal Remedies Act, Cal. Civ.
Code Section 1770 et seq. ("CCLRA") (Count Three); (4) violation of
the Kansas Consumer Protection Act, Kan. Stat. Section 50-623, et
seq., ("KCPA") (Count Four); (5) violation of the Missouri
Merchandising Practices Act, RSMo Section 407.010, et seq.,
("MMPA") (Count Five); (6) violation of New York General Business
Law Section 349(a) ("NYGBL") (Count Six); (7) violation of the
Wisconsin Deceptive Trade Practices Act ("WDTPA") (Count Seven);
and (8) unjust enrichment (Count Eight).
The matter comes before the Court by way of the Defendant's motion
to dismiss the Plaintiffs' FAC.
Discussion
A. AMAG's Motion to Dismiss Plaintiffs' Consumer Fraud Claims as
Preempted
AMAG first moves to dismiss all consumer fraud claims, Counts One
through Seven, based on preemption. It argues that the Plaintiffs'
claims concerning AMAG's marketing materials constitute an attack
on Makena's label itself.
Judge Vazquez opines that the Plaintiffs fail to allege specific
facts to support their allegation on information and belief that
AMAG knew the results of the PROLONG study "far earlier" than its
finalization. Similarly, they fail to indicate how it was possible
to ascertain the final results of the "double blinded,
placebo-controlled clinical trial," before all data was collected
and analyzed. As a result, the Plaintiffs have insufficiently
alleged the basis for their "on information and belief" claim.
The FAC alleges the results of the PROLONG study were released on
March 8, 2019. As to the Plaintiffs claims arising before that
date, the Judge holds that the Plaintiffs have failed to allege
sufficiently that AMAG was aware of "newly acquired information"
such that it could have availed itself of the CBE exception before
that date. Accordingly, the Plaintiffs consumer fraud-based claims
that arose before March 8, 2019 are dismissed as preempted.
Moreover, the Judge finds that the named Plaintiffs have failed to
allege the specific date on which they were "prescribed, injected
with, and purchased Makena." Instead, each named Plaintiff simply
alleges this occurred "during the class period" -- a time period
which, although undefined in the FAC, apparently could extend from
January 2014 to the present. Aside from the issues that these
vague allegations raise under the applicable pleading standards,
the Judge cannot determine which, if any, of the Plaintiffs' claims
survive his Court's finding that claims arising prior to March 8,
2019 are preempted. Because the named Plaintiffs have failed to
provide sufficient facts for the Court to determine whether or not
their claims are preempted, the Jduge dismisses all of the
Plaintiffs' consumer-fraud based claims (Counts One through Seven)
without prejudice.
B. Defendant's Motion to Dismiss Plaintiffs' Unjust Enrichment
Claim
The Plaintiffs' remaining claim is Count Eight, unjust enrichment,
which the Defendant moves to dismiss on several grounds. The
Plaintiffs do not appear to respond to the Defendant's arguments.
Judge Vaquez opines that their failure to respond could be
construed as a waiver. However, turning to the merits, the Judge
holds that the unjust enrichment claim is inadequately pled. He
says, when an individual purchases a consumer product from a
third-party store and not the manufacturer, the purchaser has not
conferred a benefit directly to the manufacturer such that the
manufacturer could be found to have been unjustly enriched. The
Plaintiffs have not alleged they purchased Makena directly from
AMAG. Therefore, they cannot maintain an unjust enrichment claim.
Count Eight is dismissed without prejudice.
Conclusion
For the foregoing reasons, Judge Vaquez granted the Defendant's
motion to dismiss. The dismissal is without prejudice, and the
Plaintiffs are granted 30 days to file an amended complaint that
cures the deficiencies noted. If they fail to file an amended
complaint within the allotted time, the dismissal will be with
prejudice. An appropriate Order accompanies the Opinion.
A full-text copy of the Court's May 25, 2021 Opinion is available
at https://tinyurl.com/c98na593 from Leagle.com.
AMAZON.COM INC: Faces USERRA Suit Over Unpaid Military Leave
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Daniel Wiessner at Reuters reports that Amazon.com Inc has been hit
with a proposed nationwide class action claiming it unlawfully
refuses to pay workers who take short-term military leave, even
while it provides paid leave for jury duty and bereavement.
Caonaissa Won, an Army reservist and former employee at an Amazon
warehouse in New York, filed a complaint in Brooklyn federal court
on accusing the online retail giant of violating the Uniformed
Services Employment and Reemployment Rights Act of 1994 (USERRA).
USERRA requires employers who provide paid leave to absent or
furloughed workers to also pay employees who take military leave.
But Won, represented by Virginia & Ambinder, says that since at
least 2004 Amazon has refused to pay workers who take 30 days or
less of military leave even while it covers the wages of employees
who take short-term, non-military leave.
In 2020 alone, at least 8,000 Amazon employees in the U.S.
performed about 20,000 days of military service, according to the
complaint.
Seattle-based Amazon did not immediately respond to a request for
comment.
The lawsuit is similar to a class action that Walmart Inc in
December agreed to pay $14 million to settle. Walmart, which denied
wrongdoing, also said that effective Jan. 1 it would offer 30 days
of fully paid military leave per year to service members. If
workers' service assignments continue beyond 30 days, they may be
eligible for an additional year of paid leave, the company said.
Won, the plaintiff in the lawsuit against Amazon, proposed a class
of current and former Amazon employees who have taken military
leave for 30 days or less since October 2004.
Won is seeking to recover unpaid wages, lost earnings and benefits,
and liquidated damages.
The case is Won v. Amazon.com Inc, U.S. District Court for the
Eastern District of New York, No. 1:21-cv-02867.
For Won: LaDonna Lusher of Virginia & Ambinder [GN]
AMERICAN AIRLINES: July 23 Extension to File Class Cert. Bid Tossed
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In the class action lawsuit captioned as WILLIAM CLEARY, ET AL., v.
AMERICAN AIRLINES INC., Case No. 4:21-cv-00184-O (N.D. Tex.), the
Hon. Judge Reed O'Connor entered an order denying the agreed motion
to extend the deadline for class certification, filed May 17, 2021.
Judge O'Connor says that the motion for class certification must be
filed no later than June 11, 2021. The Defendant must respond no
later than June 25, 2021, and Plaintiff may reply no later than
July 2, 2021.
The parties previously attempted to extend this deadline to
September 2021, but because the local rules require a motion to
certify a class within 90 days of filing a class action complaint,
the Court denied the motion for an extension and ordered the motion
for class certification to be filed no later than June 11, 2021.
The parties again moved to extend the deadline to July 23, 2021,
selectively quoting the Court's previous order as justification for
the extension. Previously, the Court stated that part of the reason
why the 90-day rule exists is so that "the parties have plenty of
time to conduct discovery and prepare for trial in accordance with
the Court’s ruling."
However, Plaintiff left out of the portion of the Court's order
that emphasized that the relevant concern for resolving the class
certification issue is so that the parties can prepare "in
accordance with the Court’s order."
The Plaintiffs argue that they have been conducting discovery,
therefore there is no need to hurry to file a motion for class
certification, but whether the parties have been conducting
discovery has no bearing on the Court’s need to have full
briefing on class certification with plenty of time for the Court
to resolve it prior to trial. The Court has a heavy docket and
needs sufficient time to resolve the motion.
A copy of the Court's order dated May 19, 2021 is available from
PacerMonitor.com at https://bit.ly/2R9eQc5 at no extra charge.[CC]
APPLE INC: Faces Class Action Suit Over Anti-Competitive App Store
------------------------------------------------------------------
patentlyapple.com reports that primary Productions LLC located in
Atlantic City, New Jersey, is an educational media producer that
has filed a detailed 8-count Class Action against Apple for its
anti-competitive App Store. The plaintiff claims in their complaint
that "Apple is a monopolist in the market for iOS app and payment
processing (IAP) distribution services. This is a lawsuit
representing the millions of independent entrepreneurs that serve
as the fabric connecting our modern economy."
Our report covers the Plaintiff's lengthy and angry complaint
against Apple along with the full formal filing with the court in
the form of a Scribd document. Whether the request for class action
status be granted to Primary Productions by a judge is unknown at
this time.
Plaintiff's Formal Complaint for Damages and Injunctive Relief
Below is the full formal complaint filed by Primary Productions.
The emphasis presented below in bold type is from Patently Apple.
"This class action seeks to redress injustices Apple imparts upon
the developer base that the monopoly necessarily relies upon to
exist. Documented herein are the anti-competitive business
practices that have become the norm at Apple, and how they have
harmed Plaintiff, an educational media producer, and countless
other class members that shall be identified in discovery. This is
a lawsuit representing the millions of independent entrepreneurs
that serve as the fabric connecting our modern economy. Counsel, a
Maine-native, is passionately devoted to protecting the rights of
these creative minds from the stifling and oppressive greed of
Apple. In contrast to cases like Epic, representing billion-dollar
gaming companies with expensive law firms like Quinn Emmanuel, here
Plaintiffs and the proposed class members are largely small
startups who break their back on Apple's terms to produce free apps
consumed by billions.
This class action charges Apple with six Sherman Act causes of
action applied to three proposed classes. It is first-to-file such
a class action representing and protecting the interests of small
developers. It does so by creating a proposed class for developers
of free apps, and a proposed class for developers who paid a $99
annual tax -the subject of a recent, groundbreaking Congressional
Subcommittee report. No other class action currently protects these
two classes - which counsel here does by asserting that Apple is a
monopsony retail buyer of Apps, and hence underpays developers,
even those of free apps, when it disallows them or suppresses their
ranking on the App Store to favor Apple's own apps or its cronies.
Alternatively, we assert that Apple holds a monopoly in the market
for smartphone enhanced internet backbone access devices, and
therefore improperly excludes developers of free apps from
publication. As the US House of Representatives Subcommittee on
Antitrust recently exposed, Apple, when it suited them with Chinese
developer Baidu, appointed two Apple employees to help them
navigate the murky waters of the Apple App Store. The Plaintiff and
class members in this case, however, weren't so lucky to obtain
such hand-holding-their thousands of person-hours of work were
tossed away by Apple, with illegal rejections that, according to
the same House report, even astonished many Apple employees. The
same report issued concerns over a $3 billion annual tax on
developers levied by Apple. Assuming a ten-year average developer
contract, this lawsuit seeks to refund an illicit $30 billion tax
to small developers. In addition, it is estimated at least two
thousand apps, amongst the millions which applied, were denied
because they competed with Apple's own rival apps, or the
monopoly's close cronies. Hence, class damages could total over
$230 billion, when combining improper taxes, rival exclusion, and
excessive rents on in-app payments -making this potentially the
largest class action in history. Expedited discovery will allow
further refinement of this estimate. While damages of this
magnitude are certainly difficult to grasp, it should be noted that
just last month, Apple announced a community initiative amounting
to $300 billion, and Apple itself is valued at $3 trillion. Hence,
in perspective, the alleged anti-competitive damages are
approximately 10% of the company's profit stream, or just one
focused charity campaign.
This is a rapidly evolving legal matter. Apple has become the
richest corporate entity in the world, thriving from 30%
commissions and deeply curated - and restricted - trade outputs in
the App Store that launched over a decade ago. Apple wants the
public to believe it is all in the name of safety and consumer
privacy. Last month, the New York Times asked Apple CEO Mr. Tim
Cook about the mounting concerns over Apple's unyielding power and
absolute control over the App Store. His response -"somebody has
to" control the internet, it might as well be Apple - certainly
sounds more like the divine right of kings than a new age
technology company.
[Patently Apple Note: the line of "somebody has to" control the
internet presented above by the Plaintiff is out of context. Cook
was talking about the App Store, not control over the internet.
Source: Podcast with NY Times.]
The complaint further states that "Mr. Cook's logic has one fatal
flaw. For over forty years, and still, the Apple Mac ecosystem
healthfully thrived without such policing. Mac users simply aren't
begging Apple to police their computer software due to an imaginary
flood of privacy violations and other scaremongering tactics.
Representing a class of developers who directly suffer from Apple's
ever-expanding power grab is Primary Productions LLC, a creative
studio with diverse work products. Counsel in the class action
endeavors to represent the best interests of, and provide a voice
to, other developers that have thus far been silenced by a company
that took a very wrong turn - at a steep cost to society - after
the passing of its legendary founder Steve Jobs.
In June 2018, the Plaintiff completed an iOS application ("the
app") that was seven years in the making. The app sought to give
away blockchain currency (i.e., Ethereum, Bitcoin, etc.) to users
through an entertaining and educational learning process where
users would learn the basics of creating digital wallets, making
deposits and tracking their wallet asset prices. The app was
completely free to use, funded through sponsorships and media
partnerships, and did not subject any user to any form of risk,
whatsoever. In fact, users were paid to use the app, in the form of
modern digital currency.
Apple, meanwhile, was developing the Apple Arcade, targeting
low-price and free to play games and entertainment software.
Primary Productions' app, as Apple recognized, was a sure hit in
the growing enthusiasm for blockchain encryption currency that
flourished in mid-2018. As such, Apple's growing tentacles into low
price gaming was directly threatened by Primary Productions' very
existence. Apple killed the Primary Productions app before the
public ever had a chance to enjoy it, using the typical pretextual
reasons they harass tens of thousands of developers with. In 2021
alone, as of filing, Apple has already rejected one million apps,
representing millions of person-hours of lost work, all to appease
the Apple giant.
This case centers on a form of censorship imposed by Apple, the
extent of which is largely unknown to the public, but evident to
nearly every small developer who lives under Apple's oppression.
Until about a decade ago, computer developers wrote software
applications and published their work to the public domain, or sold
it in brick-and-mortar software shops. Apple changed the game by
introducing the App Store, and a decade later, serious questions
exist for our society. Should every inventor - from creative labs
like Plaintiff, to Nobel laureate level inventors denied app
publication - have to gain Apple's approval, or were the
longstanding methods and freedoms enjoyed before the App Store
better for society? This is a critical antitrust matter that is
ripe for judicial scrutiny. Until the App Store was invented in
2008, and for the entire history of computing, software authors
effectively served as independent inventors and intellectual
property developers when they published their works in the public
domain or sold them in software shops. Over time, Apple's App Store
has so far distanced the independent developer-inventor from direct
access to his or her audience, that critical commerce is
restrained, in violation of the Sherman Act.
Nearly 60% of users and 80% of paid internet commerce access the
national internet backbone using Apple devices. For many millions
of these users, their de facto access to the internet relies upon
using an iOS device. Consider, for example, children or elderly who
have been taught to access the internet using a relative's Apple
device and have absolutely no reasonable alternative. As such,
Apple operates a de facto monopoly for access to the national
internet communication backbone. More precisely, this lawsuit uses
the novel market definition "smartphone enhanced national internet
commerce and information communicating devices." Essentially, we
argue that citizens make a substantial investment (around $1000) in
an amalgamation of hardware (camera, GPS, gyroscopes, heart
sensors, microphone, altimeter, etc.) to communicate with other
citizens, and Apple illegally restricts this de facto public
utility investment. In short, citizens own their network, and Apple
has no right to police it, as was the case for decades with
software shops and free markets uninhibited by Big Tech.
Alternatively, we incorporate and improve upon the "Kodak
downstream" antitrust app market theory, proceeding in numerous
other districts for paid apps, so as to avoid frivolous dilatory
motions by Defendant Apple - which scored a nine-year delay win in
Pepper, until a milestone SCOTUS mandate. Apple has restricted
trade, communication, and free information exchange, all in
violation of the Sherman Act, when it disallowed Plaintiff's
reasonable application." [GN]
APPLUS TECH: CT Drivers' License Holders Sue Over Data Breach
-------------------------------------------------------------
Amelia Yankovich and Joseph Allen, on behalf of themselves and all
others similarly situated, Plaintiffs, v. Applus Technologies,
Inc., Defendant, Case No. 21-cv-00720 (D. Conn., May 26, 2021),
seeks to recover damages and other relief resulting from a Data
Breach, including, but not limited to, compensatory damages,
reimbursement of costs of this case, declaratory judgment and
injunctive relief resulting from negligence and breach of implied
contract.
Applus Technologies manages and provides vehicle inspections and
emission testing and services to Connecticut drivers for the DMV.
On March 30, 2021, Applus learned that it had been the victim of a
malware attack which prompted it to shut down its vehicle emissions
testing programs in eight states, including Connecticut. Yankovich
and Allen are Connecticut drivers' license holders who claim that
their personal information has been compromised in the data breach.
[BN]
Plaintiff is represented by:
Sergei Lemberg, Esq.
LEMBERG LAW
43 Danbury Road
Wilton, CT 06897
Telephone: (203) 653-2250
Facsimile: (203) 653-3424
Email: slemberg@lemberglaw.com
ARRAY BIOPHARMA: Voulgaris Class Cert. Bid Denied w/o Prejudice
---------------------------------------------------------------
In the class action lawsuit captioned as PETER VOULGARIS, WENDELL
ROSE, and ROBERT NAUMAN, v. ARRAY BIOPHARMA INC., RON SQUARER,
VICTOR SANDOR, and JASON HADDOCK, Case No. 17-cv-02789-KLM (D.
Colo.), the Hon. Judge Kristen L. Mix entered an order denying
without prejudice Plaintiffs Peter Voulgaris and Wendell Rose's
motion for class certification and approval of notice.
If the settlement is not approved, Plaintiffs may refile the
Motion, says Judge Mix.
This motion was filed before the parties filed a Notice of
Settlement and Plaintiff filed a Motion for Preliminary Approval of
Settlement. The settlement was preliminarily approved by Order of
May 4, 2021, subject to further consideration at a hearing set for
October 29, 2021.
In light of the potential settlement, the Court need not address at
this time the Motion seeking full class certification. If the Court
ultimately chooses to accept and enforce the settlement as
reasonable, fair, and adequate, class certification will be
addressed only for purposes of the settlement.
A copy of the Court's minute order dated May 19, 2021 is available
from PacerMonitor.com at https://bit.ly/3fzZWFh at no extra
charge.[CC]
ARRAY TECHNOLOGIES: ClaimsFile Reminds of July 13 Deadline
----------------------------------------------------------
ClaimsFiler, a FREE shareholder information service, reminds
investors of pending deadline in the following securities class
action lawsuit:
Array Technologies, Inc. (ARRY)
Class Period: 10/14/2020 - 5/11/2021, or purchase of shares issued
either in or after the October 2020, December 2020 or March 2021
public offerings
Lead Plaintiff Motion Deadline: July 13, 2021
SECURITIES FRAUD, MISLEADING PROSPECTUS
To learn more, visit
https://www.claimsfiler.com/cases/view-array-technologies-inc-common-stock-arry-securities-litigation
If you wish to serve as a Lead Plaintiff in the class action, you
must petition the Court on or before the Lead Plaintiff Motion
deadline.
About ClaimsFiler
ClaimsFiler has a single mission: to serve as the information
source to help retail investors recover their share of billions of
dollars from securities class action settlements. At
ClaimsFiler.com, investors can: (1) register for free to gain
access to information and settlement websites for various
securities class action cases so they can timely submit their own
claims; (2) upload their portfolio transactional data to be
notified about relevant securities cases in which they may have a
financial interest; and (3) submit inquiries to the Kahn Swick &
Foti, LLC law firm for free case evaluations.
To learn more about ClaimsFiler, visit www.claimsfiler.com [GN]
ARRAY TECHNOLOGIES: Howard G. Smith Discloses Securities Class Suit
-------------------------------------------------------------------
Law Offices of Howard G. Smith announces that a class action
lawsuit has been filed on behalf of investors who purchased Array
Technologies, Inc. ("Array" or the "Company") (NASDAQ: ARRY): (a)
securities between October 14, 2020 and May 11, 2021, inclusive
(the "Class Period"); and/or (b) common stock pursuant and/or
traceable to the registration statement and prospectus issued in
connection with (1) the October 2020 initial public offering (the
"IPO"); or (2) the December 2020 secondary public offering (the
"December 2020 SPO"); or (3) the March 2021 secondary public
offering (the "March 2021 SPO," and together with the IPO and the
December 2020 SPO, the "Offerings"). Array investors have until
July 13, 2021 to file a lead plaintiff motion.
Investors suffering losses on their Array investments are
encouraged to contact the Law Offices of Howard G. Smith to discuss
their legal rights in this class action at 888-638-4847 or by email
to howardsmith@howardsmithlaw.com.
In October 2020, Array completed its initial public offering,
selling 7 million shares at $22 per share.
On May 11, 2021, after the close of trading, Array announced first
quarter 2021 results, reporting lower revenues year-over-year and
lower margins as a result of increased steel and shipping costs.
The Company also announced that Peter Jonna had resigned from the
Board of Directors effective May 10, 2021.
On this news, Array's stock price fell $11.49 per share, or 46%, to
close at $13.46 per share on May 12, 2021, significantly below the
IPO price.
The complaint filed alleges that in the registration statements for
the Offerings and throughout the Class Period, Defendants made
materially false and/or misleading statements, as well as failed to
disclose material adverse facts about the Company's business,
operations, and prospects. Specifically, Defendants failed to
disclose to investors that: (1) dating back to the first quarter of
2020, prices of certain commodities such as steel was in the
process of more than doubling, and Array was facing increasing
freight costs; (2) the increases in commodity and freight costs had
been negatively impacting the Company's business and operations;
and (3) as a result, Defendants' statements about its business,
operations, and prospects, were materially false and misleading
and/or lacked a reasonable basis at all relevant times.
If you purchased Array common stock pursuant and/or traceable to
the Offerings and/or securities during the Class Period, have
information or would like to learn more about these claims, or have
any questions concerning this announcement or your rights or
interests with respect to these matters, please contact Howard G.
Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol
Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at
(215) 638-4847, toll-free at (888) 638-4847, or by email to
howardsmith@howardsmithlaw.com, or visit our website at
www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some
jurisdictions under the applicable law and ethical rules. [GN]
BELMONT MANAGEMENT: Court OKs Final Collective Action Certification
-------------------------------------------------------------------
In the class action lawsuit captioned as TERESA WISNESKI AND
MILDRED JONES, each individually and on behalf of all others
similarly situated, v. BELMONT MANAGEMENT COMPANY, INC., Case No.
2:19-cv-02523-JAR-ADM (D. Kan.), the Hon. Judge Julie A. Robinson
entered an order granting the consent motion for final collective
action certification and final approval of settlement.
-- Final Collective Action Certification
Accordingly, the Court finds that the opt-in Plaintiffs are
similarly situated for final collective action
certification.
-- Fair Labor Standards Act (FLSA) Settlement Approval
The Court concludes that the terms of the settlement are fair
and equitable to all parties concerned.
-- Attorney Fees
The Plaintiffs seek, and Defendant does not oppose, $26,500
in attorney fees and expenses. The Plaintiffs' attorney fee
award does not impact Plaintiffs' recovery at all.
Accordingly, the Court finds that the amount of the attorney
fee request is reasonable.
The Plaintiffs Wisneski and Jones worked as hourly employees for
the Defendant at one of apartment complexes. They lived on the
premises and received a rent credit. They filed this lawsuit, on
behalf of themselves and others similarly situated, for alleged
violations of the FLSA. The Plaintiffs allege that the Defendant
failed to pay them a proper overtime premium because the Defendant
did not include the value of the rent credit in Plaintiffs' regular
hourly rate when calculating their overtime pay.
Belmont Management operates as an asset management company.
A copy of the Court's memorandum and order dated May 19, 2021 is
available from PacerMonitor.com at https://bit.ly/2SO4b7m at no
extra charge.[CC]
CELLCO PARTNERSHIP: Court Confirms Arbitration Award in Adell Suit
------------------------------------------------------------------
In the case, LORRAINE ADELL, etc., Plaintiff v. CELLCO PARTNERSHIP
d/b/a) VERIZON WIRELESS, Defendant, Case No. 1:18CV623 (N.D. Ohio),
Judge Christopher A. Boyko of the U.S. District Court for the
Northern District of Ohio, Eastern Division:
(i) denied Plaintiff Adell's Motion to Vacate July 22, 2020
Arbitration Award; and
(ii) granted the Defendant's alternative request to confirm
the Arbitration Award.
On March 19, 2018, the Plaintiff filed her Class Action Complaint.
She asserted a Breach of Contract Claim on behalf of a class of
Verizon Wireless customers, seeking damages arising from the
Defendant's practices in connection with the imposition of an
"administrative charge."
The Plaintiff also asserted a claim for Declaratory Relief on
behalf of all Verizon Wireless telephone customers. She contended
that the waiver of an Article III adjudication of her class-wide
Breach of Contract Claim against Defendant is not "voluntary"
because of the inability to refuse Federal Arbitration Association
("FAA") arbitration and still receive the Verizon equipment and
services. She also argued that the arbitration provision in the
wireless phone agreement is not enforceable because of the
"inherent conflict" between arbitration under the FAA and the
express purposes of the Class Action Fairness Act of 2005
("CAFA").
The Defendant filed a Motion to Compel Arbitration and to Stay
Proceedings and the Plaintiff moved for Partial Summary Judgment on
her individual Declaratory Judgment claims.
The Court issued an Opinion and Order holding: (1) that the
Plaintiff's consent to arbitrate disputes pursuant to the Verizon
Customer Agreement was knowing and voluntary; (2) that to allow the
Plaintiff to refuse to arbitrate disputes on an individual basis
but still retain the Verizon equipment and services would
necessarily deprive the Defendant of its rights and force Defendant
to accept contractual terms without its voluntary consent; and (3)
that the arbitration provision is enforceable because if Congress
had wanted to override the FAA and ban arbitration class action
waivers, it could have done so manifestly and expressly in the CAFA
statute. Accordingly, the Court granted the Motion to Compel
Arbitration and Stay Proceedings and denied the Plaintiff's Motion
for Partial Summary Judgment.
Next, the Plaintiff filed her Motion to Amend for Certification
Under 28 U.S.C. Section 1292(b) the District Court's March 5, 2019
Order Staying the Action, seeking to take an immediate appeal. By
its Opinion and Order dated Oct. 18, 2019, the Court denied the
Plaintiff's Motion to Amend for Certification.
Thereafter, the Plaintiff made a demand for arbitration with the
American Arbitration Association. After full briefing, the
Arbitrator issued an Award on July 22, 2020, agreeing with the
Defendant's position. The Arbitrator found that the plain language
of the Customer Agreement was unambiguous and did not require the
"administrative charge" to be limited to government-related costs.
Therefore, the Arbitrator entered an award denying all of the
Plaintiff's claims and finding entirely in the Defendant's favor.
Within the required 90-day period, the Plaintiff filed the instant
Motion to Vacate the Arbitrator's Award. She states that her
Motion to Vacate s brought under the fourth circumstance listed in
9 U.S.C. Section 10(a); and is based solely on the ground that the
arbitrator exceeded his authority in arbitrating the matter and
issuing the Award because Verizon's arbitration agreement is not
enforceable and the Plaintiff's claims are not arbitrable for the
reasons asserted in her motion for partial summary judgment denied
by the Court's Opinion.
The Plaintiff outlines her rationale for moving to vacate the July
22, 2020 Arbitrator's Award as follows: "Plaintiff's motion to
vacate is being filed anticipating that it will not be granted and
that the Court will issue a final decision denying Plaintiff's
motion to vacate brought under the same grounds as her prior motion
for partial summary judgment--which can then be appealed to the
Sixth Circuit as a final decision with respect to an arbitration
under FAA Section 16(a)(3) (and also under FAA Section 16(a)(1)(D),
assuming Verizon files a motion to confirm the Award that is
granted by the Court under FAA Section 9)."
In its Opposition, the Defendant contends that the sole basis the
Plaintiff cites in support of her Motion to Vacate is that the
Arbitrator "exceeded his authority" because Plaintiff should not
have been compelled to arbitrate this dispute in the first place.
It argues that this does not justify an order vacating the
Arbitration Award.
The Plaintiff counters that she is not asking for a re-hearing by
the District Court, but rather is preserving for review by the
Sixth Circuit, her challenges to the enforceability of Verizon's
arbitration agreement rejected by the Court in its Opinion.
Judge Boyko opines that the burden of proving that the arbitrators
exceeded their authority is very great, citing Nationwide Mut. Ins.
Co. v. Home Ins. Co., 330 F.3d 843, 846 (6th Cir. 2003). He finds
that the Plaintiff fails to meet that substantial burden and
basically concedes that her Motion is unsound.
Furthermore, the Plaintiff provides no legitimate argument against
confirmation of the Arbitrator's Award. In her Reply Brief, the
Plaintiff states: "Although Plaintiff does not concede that
Verizon's cross-motion should be granted, Plaintiff's grounds in
opposition are the same grounds in support of her motion to
vacate." The Judge finds that the Plaintiff's basis for opposing
confirmation fares no better than the basis she posits for vacating
the Award.
For these reasons, and because the Court's review of arbitration
awards is so narrow, Judge Boyko denied the Motion of the Plaintiff
to Vacate July 22, 2020 Arbitration Award and granted the
Defendant's alternative request to confirm the Arbitration Award.
A full-text copy of the Court's May 24, 2021 Opinion & Order is
available at https://tinyurl.com/2sns9fbv from Leagle.com.
CHEMOCENTRYX INC: ClaimsFiler Reminds Investors of July 6 Deadline
------------------------------------------------------------------
ClaimsFiler, a FREE shareholder information service, reminds
investors of pending deadline in the following securities class
action lawsuit:
ChemoCentryx, Inc. (CCXI)
Class Period: 11/26/2019 - 5/3/2021
Lead Plaintiff Motion Deadline: July 6, 2021
SECURITIES FRAUD
https://www.claimsfiler.com/cases/view-chemocentryx-inc-common-stock-ccxi-securities-litigation
If you wish to serve as a Lead Plaintiff in the class action, you
must petition the Court on or before the Lead Plaintiff Motion
deadline.
About ClaimsFiler
ClaimsFiler has a single mission: to serve as the information
source to help retail investors recover their share of billions of
dollars from securities class action settlements. At
ClaimsFiler.com, investors can: (1) register for free to gain
access to information and settlement websites for various
securities class action cases so they can timely submit their own
claims; (2) upload their portfolio transactional data to be
notified about relevant securities cases in which they may have a
financial interest; and (3) submit inquiries to the Kahn Swick &
Foti, LLC law firm for free case evaluations.
To learn more about ClaimsFiler, visit www.claimsfiler.com [GN]
CHIME FINANCIAL: Class Settlement in Richards Suit Has Final Nod
----------------------------------------------------------------
In the case, RYAN RICHARDS, et al., Plaintiffs v. CHIME FINANCIAL,
INC., et al., Defendants, Case No. 19-cv-06864-HSG (N.D. Cal.),
Judge Haywood S. Gilliam, Jr., of the U.S. District Court for the
Northern District of California:
(i) grants the Plaintiffs' motion for final approval of class
action settlement; and
(ii) grants in part the Plaintiffs' motion for attorneys' fees
and incentive award.
The Plaintiffs filed the putative class action against Defendant
Chime Financial, The Bancorp Inc., and Galileo Financial
Technologies, LLC based on a disruption in Defendant Chime's
online-only banking services. The Plaintiffs allege that on Oct.
16, 2019, Chime had a system-wide service outage that lasted
approximately 72 hours. During this Service Disruption, Chime's
customers, approximately 5 million people, could not access their
funds, including through card purchases and ATM withdrawals.
Following the Service Disruption, some customers reported incorrect
account balances and unauthorized charges.
The Plaintiffs bring the action on behalf of a putative nationwide
class of Chime customers who were denied access to their accounts
beginning on Oct. 16, 2019, as well as subclasses of customers
denied access to their accounts who reside in Florida, Texas,
Illinois, and Georgia. And based on these facts, the Plaintiffs
allege causes of action for negligence; unjust enrichment; breach
of contract; conversion; breach of fiduciary duty; violation of the
Florida Deceptive and Unfair Trade Practices Act, Fla. Stat.
Section 501.201; violation of the Illinois Consumer Fraud Act, 815
Ill. Comp. Stat. Sections 505/1 et seq.; and violation of the
Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp.
Stat. Sections 510/2 et seq.
The Plaintiffs initially filed the action on Nov. 22, 2019. The
parties did not engage in motions practice, and instead attended
two settlement conferences with Magistrate Judge Laurel Beeler.
With Judge Beeler's assistance, the parties reached an agreement in
principle on May 12, 2020. The parties entered into a written
settlement agreement in early August 2020. Following the hearing
on the unopposed motion for preliminary settlement approval, the
parties submitted a revised settlement agreement that addressed
concerns that the Court raised about the scope of the release, as
well as the process for any objectors to object to the proposed
settlement. The Court granted the motion on Oct. 28, 2020. The
parties now seek final approval of the class action settlement and
the Plaintiffs seek attorneys' fees, costs, and an incentive award
for the named Plaintiffs.
The key terms of the parties' settlement are:
a. The Settlement Class is defined as: All consumers who
attempted to and were unable to access or utilize the functions of
their accounts with Chime, as confirmed by a failed transaction or
a locked card as recorded in Chime's business records, beginning on
October 16, 2019 through October 19, 2019, as a result of the
Service Disruption.
b. Settlement Benefits:
i. The parties have agreed to monetary relief that
incorporates an offset for credits that Chime already provided to
the accounts of active customers because of the outage:
1. Approximately a month after the outage, Chime
credited $10 to the accounts of all active customers as a courtesy
payment because of the outage.
2. Chime also credited the accounts of those
customers who incurred certain transaction fees during the outage
to cover those fees as a transaction credit.
ii. The parties agree that these courtesy payments and
transaction credits total $5,960,563 already paid to active Chime
account holders due to the outage. The Defendants also concede
that this litigation was "a motivation" for making these payments.
Pursuant to the settlement agreement, the Defendants have agreed to
further compensate settlement class members who submit verified
claims under a two-tier system:
1. Tier 1: Class members who claim they suffered
loss due to the outage, but who do not have or do not wish to
provide documentation to substantiate their loss will be entitled
to up to $25 for verified claims. The Defendants' aggregate
maximum payment under Tier 1 is $4 million. If the amount of
verified claims under Tier 1 is less than $4 million, the
Defendants will retain any unclaimed amount, except to the extent
that such funds are necessary to fully or partially satisfy Tier 2
claims.
2. Tier 2: Class members who claim they suffered
loss due to the outage and have reasonable documentation to
substantiate their loss will be entitled to up to $750, but not
more than their verified loss. Those who fail to provide
documentation will be considered under Tier 1. Defendants'
aggregate maximum payment under Tier 2 is $1.5 million, and any
residual money unclaimed under Tier 1 can be used to pay Tier 2
claims in excess of the $1.5 million cap.
All claims under both Tiers will be verified using a
two-step system. Under both Tiers, the putative class members will
have to submit a brief explanation, under penalty of perjury, as to
how the outage caused them loss and what amount of loss they
purport to have suffered. Those submitting claims under Tier 2
will also be required to submit reasonable documentation to support
their claims. The Defendants and the settlement administrator will
then confirm through Chime's business records that the putative
class member (a) held a Chime account at the time; and (b) either
attempted a financial transaction that failed or had their card
locked as a result of the outage. During the hearing, the
Defendants confirmed that despite the service disruption, they have
accurate records of attempted transactions during the relevant time
period.
Under the settlement agreement, any prior money received
by a Settlement Class Member from Chime in connection with the
Service Disruption will be offset against" the payment. Thus, any
verified claims under Tier 1 and Tier 2 will be reduced by the
amount the class member already received as a (1) courtesy payment;
or (2) transaction credit. At a minimum, however, the Defendants
will pay $1.5 million under the settlement agreement.
c. Cy Pres Distribution: If the claim payments under Tiers 1
and 2 do not reach the $1.5 million minimum under the settlement
agreement, the Defendants will distribute funds to reach this
minimum to the East Bay Community Law Center as the cy pres
recipient. They will, however, keep any money available for
settlement but unclaimed above this $1.5 million threshold.
d. Class Notice: A third-party settlement administrator will
implement the "Notice Program," which includes (1) an email Notice
and (2) a Notice on the Settlement Website. The settlement
administrator will send the Notice to class members by email within
30 days of the Court's order preliminarily approving the
settlement. The settlement administrator will make reasonable
efforts to locate updated email addresses for class members whose
Notices are returned as undeliverable. The Notice will include:
the nature of the action, a summary of the settlement terms, and
instructions on how to object to and opt out of the settlement,
including relevant deadlines.
e. Opt-Out Procedure: The putative class members may opt out
of or object to the settlement and/or Class Counsel's application
for attorneys' fees, costs, and expenses.
f. Incentive Award: The Named Plaintiffs as class
representatives may apply for incentive awards of no more than $500
each.
g. Attorneys' Fees and Costs: The Class Counsel may file an
application for attorneys' fees not to exceed $750,000.
The Class Counsel seeks $750,000 in attorneys' fees, costs, and
expenses. Under the settlement agreement, this amount will not
reduce the monetary relief available to Class Members. The Class
Counsel acknowledges that its lodestar and accrued litigation
expenses are significantly less than the $750,000 requested. As of
the filing of the motion for attorneys' fees, the Class Counsel had
incurred $295,915.20 in fees for approximately 380 hours of work,
and $8,146.75 in litigation expenses. Nevertheless, the Class
Counsel urges that the full $750,000 is appropriate under the
"percentage of fund" method.
The Class Counsel also requests an incentive award of $500 for each
of the Named Plaintiffs.
Analysis
After considering and weighing the factors, Judge Gilliam finds
that the settlement agreement is fair, adequate, and reasonable,
and that the settlement Class Members received adequate notice.
Accordingly, the Plaintiff's motion for final approval of the class
action settlement is granted.
Turning to the attorneys' fees and costs, reducing the Plaintiffs'
lodestar calculation, Judge Gilliam calculates a revised lodestar
of $338,719.56. Considering the procedural posture of the case,
the amount of substantive litigation, the minimal issues in
dispute, and the lack of motion practice, he finds that an award of
this lodestar is reasonable under the circumstances. He also finds
that the $8,146.75 in costs that the counsel identified is also
reasonable. Accordingly, the Judge awards attorneys' fees and
costs in the total amount of $346,857.31.
With respect to the inventive awards, Judge Gilliam has concerns
about the requested incentive awards in a case in which the average
monetary recovery for each Class Member is $11.94. Thus, if he
were to grant the named Plaintiffs' request for incentive awards,
they would be receiving significantly more money as compared to the
other Class Members. The Judge further notes that the counsel has
not provided any detailed discussion of what the named Plaintiffs
did to contribute to the litigation or how long they spent doing
any particular task. Rather, the counsel devotes just two
sentences to summarizing at a high level the types of work that the
named Plaintiffs performed. The Judge accordingly denies the
request for incentive awards in its entirety.
Conclusion
Accordingly, Judge Gilliam grants the motion for final approval of
class action settlement and grants in part the motion for
attorneys' fees and incentive award. He awards attorneys' fees and
costs in the amount of $346,857.31, but denies the request for an
incentive award for the named Plaintiffs.
The parties and settlement administrator are directed to implement
the Final Order and the settlement agreement in accordance with the
terms of the settlement agreement. They are further directed to
file a short stipulated final judgment of two pages or less within
21 days from the date of the order. The judgment need not, and
should not, repeat the analysis in the Order.
A full-text copy of the Court's May 24, 2021 Order is available at
https://tinyurl.com/5afs2d2m from Leagle.com.
CHURCHILL CAPITAL: Discloses Securities Class Action Lawsuit
------------------------------------------------------------
The Thornton Law Firm alerts investors that a class action lawsuit
has been filed on behalf of investors of Churchill Capital Corp IV
(NYSE: CCIV). Investors who purchased CCIV stock or other
securities between January 11, 2021 and February 22, 2021 may
contact the Thornton Law Firm's investor protection team by
visiting www.tenlaw.com/cases/Churchill for more information.
Investors may also email investors@tenlaw.com or call
617-531-3917.
The complaint alleges that on February 22, 2021, a merger agreement
was announced between Churchill, a special purpose acquisition
company and Lucid, an American automotive company specializing in
electric cars. The transaction equity value was estimated at $11.75
billion. Churchill's share price closed at $57.37. It is alleged
that Lucid announced the production of its debut car would be
delayed until at least the second half of 2021, with no definite
date set for delivery of an actual vehicle. It is also alleged that
Lucid was projecting the production of only 557 vehicles in 2021,
rather than the 6,000 it had been touting before the merger
announcement.
The case is currently in the lead plaintiff stage. A lead plaintiff
acts on behalf of all other investor class members in managing the
class action. Investors do not need to be a lead plaintiff in order
to be a class member. If investors choose to take no action, they
can remain an absent class member. The class has not yet been
certified. Until certification occurs, investors are not
represented by an attorney. Thornton Law Firm is not currently
representing a plaintiff who filed a complaint but is investigating
the case on behalf of investors interested in being a lead
plaintiff.
Thornton Law Firm's securities attorneys are highly experienced in
representing investors in recovering damages caused by violations
of the securities laws. Its attorneys have established track
records litigating securities cases in courts throughout the
country and recovering losses on behalf of investors. This may be
considered Attorney Advertising in some jurisdictions. Prior
results do not guarantee or predict a similar outcome with respect
to any future matter. [GN]
CLOUDERA INC: Consolidated Amended Securities Class Suit Dismissed
------------------------------------------------------------------
In the case, IN RE CLOUDERA, INC. SECURITIES LITIGATION, Case No.
19-CV-03221-LHK (N.D. Cal.), Judge Lucy H. Koh of the U.S. District
Court for the Northern District of California, San Jose Division,
grants the Defendants two motions to dismiss the Consolidated
Amended Class Action Complaint with leave to amend.
The case is a putative securities class action against Cloudera,
Intel Corp., and numerous director and corporate officer
defendants. Lead Plaintiff Mariusz J. Klin & The Mariusz J. Klin
MD PA 401K Profit Sharing Plan and Named Plaintiffs Robert
Boguslawski and Arthur P. Hoffman bring the suit on behalf of "all
other persons similarly situated who purchased and/or otherwise
acquired shares of Cloudera common stock between April 28, 2017 and
June 5, 2019, inclusive.
Defendant Cloudera is a software company that purports to empower
organizations to become data-driven enterprises in the newly
hyperconnected world. Defendant Intel is a semi-conductor
technology company that held 17.6% of Cloudera's outstanding common
stock as of March 31, 2018. Defendant Thomas Reilly was formerly
Chairman of the Board of Directors of Cloudera and was Cloudera's
CEO until July 31, 2019. Defendant Jim Frankola has been
Cloudera's CFO since October of 2012. Defendant Michael Olson was
co-founder of Cloudera, former Chairman of the Cloudera Board of
Directors, and served as Cloudera's Chief Strategy Officer from
June of 2013 to June 5, 2019. Defendant Ping Li is a partner at
Accel and was a member of Cloudera's Board of Directors between
October of 2008 and July of 2018.
The Plaintiffs also named as defendants several members of the
Board of Directors of Cloudera and Hortonworks, Inc. at the time of
the merger between the two companies. These defendants are Martin
Cole, Kimberly Hammonds, Rosemary Schooler, Steve Sordello, Michael
Stankey, Priya Jain, Robert Bearden, Paul Cormier, Peter Fenton,
and Kevin Klausmeyer ("Director Defendants").
On June 7, 2019, a Cloudera shareholder filed a class action
securities complaint against Defendants Cloudera, Reilly, Frankola,
and Olson. On Dec. 16, 2019, pursuant to the Private Securities
Litigation Reform Act of 1995 ("PSLRA"), the Court appointed
Plaintiff Mariusz J. Klin and the Mariusz J. Klin MD PA 401K Profit
Sharing Plan as the Lead Plaintiff.
On Feb. 14, 2020, the Lead Plaintiff filed a consolidated class
action complaint that expanded the class definition, added new
claims under the Securities Act of 1933, and added Cade Jones and
Larry Lenick as the named Plaintiffs.
On Feb. 28, 2020, the Defendants requested that the Court reopens
the lead plaintiff appointment process because the consolidated
class action complaint added claims and new plaintiffs. On March
18, 2020, the Court vacated its order appointing lead plaintiff and
lead counsel; ordered publication of notice of the amended
complaint in compliance with the PSLRA; and reopened the lead
plaintiff appointment process.
On July 27, 2020, the Court appointed Mariusz J. Klin and the
Mariusz J. Klin MD PA 401K Profit Sharing Plan as the Lead
Plaintiff and Kahn Swick & Foti, LLC as the Lead Counsel.
On Sept. 22, 2020, the Lead Plaintiff filed a consolidated amended
class action complaint. The CAC alleges five causes of action: (1)
violation of Section 11 of the Securities Act of 1933 against
Cloudera, Intel, Director Defendants, and Insider Defendants; (2)
violation of Section 12(a)(2) of the Securities Act against
Cloudera; (3) violation of Section 15 of the Securities Act against
Intel, Director Defendants, and Insider Defendants; (4) violation
of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange
Act") and SEC Rule 10b-5 against Cloudera and Insider Defendants;
and (5) violation of Section 20(a) of the Exchange Act against
Insider Defendants.
On Sept. 27, 2020, the Cloudera Defendants filed a motion to
dismiss. They also filed a request for judicial notice. On Nov.
24, 2020, the Plaintiffs filed an opposition and on Dec. 22, 2020,
the Cloudera Defendants filed a reply.
On Sept. 27, 2020, Intel also filed a motion to dismiss. On Nov.
24, 2020, the Plaintiffs filed an opposition and on Dec. 22, 2020,
Intel filed a reply.
On March 5, 2021, the Plaintiffs filed an administrative motion for
leave to file a sur-reply. On March 9, 2021, both the Cloudera
Defendants and Intel filed oppositions.
On March 17, 2021, the Plaintiffs filed a request for judicial
notice.
Discussion
I. Request for Judicial Notice
In connection with their motion to dismiss, the Cloudera Defendants
request judicial notice of 25 documents, including excerpts of
sixteen documents Cloudera filed with the SEC and nine quarterly
earnings calls.
Judge Koh grants the Cloudera Defendants' request for judicial
notice of Exhibits 1, 3-9, 12-18, 20-23, 25, 27, 30 in support of
the motion to dismiss. However, to the extent any facts in these
documents are subject to reasonable dispute, the Judge does not
take judicial notice of those facts.
The Plaintiffs also seek judicial notice of one exhibit.
Specifically, the seek judicial notice of Cloudera's March 10, 2021
fourth quarter fiscal year 2021 earnings conference call
transcript. They admit that Exhibit A cannot be incorporated by
reference "as it was not cited in nor available when they filed
their Complaint." The Cloudera Defendants oppose the Plaintiffs'
request on the ground that the Court may not rely on Exhibit A to
decide the motions to dismiss because it was not cited or
referenced in the Plaintiffs' CAC.
Exhibit A is not cited in the CAC and therefore is not a proper
subject of incorporation by reference. Nonetheless, Exhibit A is
an SEC filing and a publicly-filed document whose accuracy cannot
reasonably be questioned and is therefore subject to judicial
notice. Therefore, the Judge grants the Plaintiffs' request for
judicial notice. However, she takes judicial notice of this
document solely for the fact that Cloudera made the statements
therein. She does not take judicial notice of the truth of any
facts asserted in Exhibit A.
II. Motion to Dismiss
A. Plaintiffs' Claims Under Section 10(b) of the Exchange Act and
Rule 10b-5
The Cloudera Defendants do contend that the Plaintiffs have failed
to allege (1) material misrepresentations or omissions, and (2)
scienter.
Judge Koh grants the Cloudera Defendants' motion to dismiss the
Plaintiffs' Section 10(b) claim because their allegedly false or
misleading statements are either (1) forward-looking statements
accompanied by meaningful cautionary language, and therefore
immunized under the PSLRA's Safe Harbor provision; (2) not
actionable as statements of corporate optimism; or (3) because the
Plaintiffs have failed to adequately allege that the statements
were false when made. Therefore, the Judge does not address the
Cloudera Defendants' arguments regarding scienter.
The Judge agrees that the Plaintiffs have failed to adequately
plead falsity with respect to some of the challenged statements.
First, the Plaintiffs have failed to adequately plead that the
Cloudera Defendants' statements regarding Cloudera's "cloud-native"
products and "cloud-native" architecture were false when made. As
such, she finds that, with respect to Statements 3-13, 18-21,
23-26, 28, and 33-39, the Plaintiffs have failed to adequately
plead falsity as required by the PSLRA.
Second, the Judge finds that, with respect to Statements 1-14,
16-21, 23-26, 28-29, and 33-39, the Plaintiffs have failed to
adequately plead falsity as required by the PSLRA. The Plaintiffs
have failed to plead falsity with respect to Statement 2, Statement
16, to Cloudera's lack of cloud-native products, Statement 17, and
Statement 29. Therefore, the Jduge grants the Cloudera Defendants'
motion to dismiss as to these statements.
Third, the Judge finds that Statements 15, 22, 40, and 41 are
non-actionable corporate puffery. Specifically, she agrees with
the Cloudera Defendants that Statements 15, 22, 40, and 41 fall
within this category of non-actionable statements, as these
statements are all general and vague remarks of corporate optimism.
Therefore, the Jduge grants the Cloudera Defendants' motion to
dismiss as to these statements.
Last, the Judge finds that Statements 27, 30, 31, and 32 are
forward-looking statements accompanied by meaningful cautionary
language. She holds that each of the four statements that the
Court has identified as forward-looking is not a mixed statement of
present facts and a forward-looking statement. Rather, each is
solely a forward-looking statement regarding the opportunities
presented by the merger of Cloudera and Hortonworks. Also, none of
the statements that the Court has found to be protected by the Safe
Harbor reference Cloudera's cloud offerings or cloud products.
Therefore, the Judge grants the Cloudera Defendants' motion to
dismiss as to these statements because these statements are
protected by the PSLRA Safe Harbor.
In sum, Judge Koh finds that none of the allegedly false or
misleading statements in the Plaintiffs' complaint survive the
instant motion to dismiss. Accordingly, she grants the Cloudera
Defendants' Motion to Dismiss Plaintiffs' Section 10(b) and Rule
10b-5 cause of action.
B. Plaintiffs' Claims Under Section 20(a) of the Exchange Act
Congress has established liability in Section 20(a) for every
person who, directly or indirectly, controls any person liable for
violations of the securities laws. To prove a prima facie case
under Section 20(a), a plaintiff must prove: (1) "a primary
violation of federal securities law;" and (2) "that the defendant
exercised actual power or control over the primary violator."
Because the Plaintiffs have failed to plead a primary securities
law violation, Judge Koh holds that they have also failed to plead
a violation of Section 20(a). Accordingly, the Cloudera
Defendants' motion to dismiss the Plaintiffs' Section 20(a) claim
is granted.
C. Plaintiffs' Claims Under Sections 11 and 12(a)(2) of the
Securities Act
The Cloudera Defendants next argue that the Plaintiffs have failed
to state a claim under Sections 11 and 12(a)(2) of the Securities
Act. The Plaintiffs challenge 14 statements under Sections 11 and
12(a)(2) of the Securities Act that are in Cloudera's Merger
Registration Statement or incorporated by reference into the Merger
Registration Statement. They argue that each challenged statement
was a materially false statement or omission when made.
Under the heightened pleading standards of Rule 9(b), Judge Koh
finds that the Plaintiffs must set forth what is false or
misleading about a statement, and why it is false. This
requirement is satisfied by pointing to inconsistent
contemporaneous statements or information (such as internal
reports) which were made by or available to the defendants.
The Judge finds that the Plaintiffs have failed to adequately plead
falsity with respect to Statements 42, 43, 44, 45, 46, 47, 48, 49
and 53. Construing the CAC in the light most favorable to the
Plaintiffs, he construes the CAC to allege that the Cloudera
Defendants failed to disclose that Cloudera lacked a viable cloud
product and that Cloudera's customers were not renewing their
contracts with Cloudera because Cloudera lacked a viable cloud
product. However, the Plaintiffs have failed to adequately plead
that either trend or uncertainty was "known to management" at the
time of the merger with Hortonworks. Accordingly, they have failed
to state a claim under Sections 11 and 12(a)(2) of the Securities
Act against Cloudera Defendants for failure to provide the
requisite Item 303 disclosures in the Merger Registration
Statement. The Judge grants the Cloudera Defendants and Intel's
motions to dismiss as to the Plaintiffs' Sections 11 and 12(a)(2)
claims.
D. Plaintiffs' Claim under Section 15 of the Securities Act
To state a claim against a control person under Section 15 of the
Securities Act, the Plaintiffs must plausibly allege (1) an
underlying violation of Sections 11 or 12, and (2) control. The
Plaintiffs have not plausibly alleged an underlying violation of
Sections 11 or 12. Therefore, their Section 15 claim is
dismissed.
Conclusion
For the foregoing reasons, Judge Koh granted the Cloudera
Defendants and Intel's motions to dismiss the Plaintiffs' complaint
in its entirety. Because granting the Plaintiffs an additional
opportunity to amend the complaint would not be futile, cause undue
delay, or unduly prejudice the Defendants, and the Plaintiffs have
not acted in bad faith, the Judge grants leave to amend.
Should the Plaintiffs choose to file an amended complaint, they
must do so within 30 days of the Order. Failure to do so, or
failure to cure the deficiencies identified in the Order and in the
Defendants' motions to dismiss, will result in dismissal of the
Plaintiffs' deficient claims with prejudice.
The Plaintiffs may not add new claims or parties without a
stipulation or leave of the Court. If they choose to file an
amended complaint, they must also file a redlined copy comparing
the second consolidated amended class action complaint with the
consolidated amended class action complaint. Finally, any amended
complaint must comply with the Court's Securities Class Action
Standing Order, effective Sept. 23, 2019.
A full-text copy of the Court's May 25, 2021 Order is available at
https://tinyurl.com/4hk5rc5v from Leagle.com.
CONTEXTLOGIC INC: ClaimsFiler Reminds of July 16 Deadline
---------------------------------------------------------
ClaimsFiler, a FREE shareholder information service, reminds
investors of pending deadline in the following securities class
action lawsuit:
ContextLogic Inc. (WISH)
Class Period: 12/16/2020 - 5/12/2021, or purchase of shares issued
either in or after the December 2020 Initial Public Offering
Lead Plaintiff Motion Deadline: July 16, 2021
SECURITIES FRAUD, MISLEADING PROSPECTUS
To learn more, visit
https://www.claimsfiler.com/cases/view-contextlogic-inc-wish-securities-litigation
If you wish to serve as a Lead Plaintiff in the class action, you
must petition the Court on or before the Lead Plaintiff Motion
deadline.
About ClaimsFiler
ClaimsFiler has a single mission: to serve as the information
source to help retail investors recover their share of billions of
dollars from securities class action settlements. At
ClaimsFiler.com, investors can: (1) register for free to gain
access to information and settlement websites for various
securities class action cases so they can timely submit their own
claims; (2) upload their portfolio transactional data to be
notified about relevant securities cases in which they may have a
financial interest; and (3) submit inquiries to the Kahn Swick &
Foti, LLC law firm for free case evaluations.
To learn more about ClaimsFiler, visit www.claimsfiler.com [GN]
CONTEXTLOGIC INC: Rosen Law Reminds Investors of July 16 Deadline
-----------------------------------------------------------------
WHY: Rosen Law Firm, a global investor rights law firm, announces
the filing of a class action lawsuit on behalf of purchasers of the
securities of ContextLogic Inc. (NASDAQ: WISH) who: (1) purchased
or otherwise acquired publicly traded ContextLogic securities
between December 16, 2020 and May 12, 2021, inclusive (the "Class
Period"); and/or (2) purchased or otherwise acquired ContextLogic
common stock pursuant and/or traceable to the offering documents
issued in connection with the Company's initial public offering
conducted on or about December 16, 2020 (the "IPO" or "Offering").
If you wish to serve as lead plaintiff, you must move the Court no
later than July 16, 2021.
SO WHAT: If you purchased ContextLogic securities during the Class
Period you may be entitled to compensation without payment of any
out of pocket fees or costs through a contingency fee arrangement.
WHAT TO DO NEXT: To join the ContextLogic class action, go to
http://www.rosenlegal.com/cases-register-2097.htmlor call Phillip
Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or
cases@rosenlegal.com for information on the class action. If you
wish to serve as lead plaintiff, you must move the Court no later
than July 16, 2021. A lead plaintiff is a representative party
acting on behalf of other class members in directing the
litigation.
WHY ROSEN LAW: We encourage investors to select qualified counsel
with a track record of success in leadership roles. Often, firms
issuing notices do not have comparable experience or resources. The
Rosen Law Firm represents investors throughout the globe,
concentrating its practice in securities class actions and
shareholder derivative litigation. Rosen Law Firm has achieved the
largest ever securities class action settlement against a Chinese
Company. Rosen Law Firm was Ranked No. 1 by ISS Securities Class
Action Services for number of securities class action settlements
in 2017. The firm has been ranked in the top 4 each year since 2013
and has recovered hundreds of millions of dollars for investors. In
2019 alone the firm secured over $438 million for investors. In
2020 founding partner Laurence Rosen was named by law360 as a Titan
of Plaintiffs' Bar. Many of the firm's attorneys have been
recognized by Lawdragon and Super Lawyers.
DETAILS OF THE CASE: According to the lawsuit, the Offering
documents and defendants made false and/or misleading statements
and/or failed to disclose that: (1) ContextLogic's fourth quarter
2020 monthly active users ("MAUs") had declined materially and were
not then growing; and (2) as a result of the foregoing, defendants
materially overstated the Company's business metrics and financial
prospects. When the true details entered the market, the lawsuit
claims that investors suffered damages.
To join the ContextLogic class action, go to
http://www.rosenlegal.com/cases-register-2097.htmlor call Phillip
Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or
cases@rosenlegal.com for information on the class action.
No Class Has Been Certified. Until a class is certified, you are
not represented by counsel unless you retain one. You may select
counsel of your choice. You may also remain an absent class member
and do nothing at this point. An investor's ability to share in any
potential future recovery is not dependent upon serving as lead
plaintiff.
Attorney Advertising. Prior results do not guarantee a similar
outcome.[GN]
CREDIT SUISSE: Law Firm Joins Securities Class Action Lawsuit
-------------------------------------------------------------
Brenna Neghaiwi at Reuters reports that law firm Frank R. Cruz said
it was participating in a lawsuit against Credit Suisse (CSGN.S)
over the Swiss bank's dealings with Archegos and Greensill.
The City of St. Clair Shores Police & Fire Retirement System, based
in St. Clair Shores, Michigan, in April filed a class action
lawsuit against the bank in federal court in Manhattan, accusing
the Swiss bank of misleading investors and mismanaging risk
exposure to high-risk clients, alleging violations of federal
securities laws.
Credit Suisse has been plunged into crisis after losing more than
$5 billion from the collapse of U.S. investment firm Archegos and
suspending funds linked to collapsed British supply chain finance
company Greensill Capital. The fallout has prompted internal and
external investigations, sackings and a capital raise at
Switzerland's second-largest lender, in what new chairman and
veteran banker Antonio Horta-Osorio had described as his biggest
challenge yet.
Its share price has fallen nearly 30% since the beginning of March,
when it first disclosed issues related to its Greensill-linked
supply chain finance funds.
Credit Suisse investors have until June 15 to file a lead plaintiff
motion in the lawsuit.
Credit Suisse declined comment.[GN]
CREE INC: Briefing on Class Certification in Wedra Suit Extended
----------------------------------------------------------------
In the case, STEPHANIE WEDRA, individually and on behalf of others
similarly situated, Plaintiff v. CREE, INC., Defendant, Case No. 19
CV 3162 (VB) (S.D.N.Y.), Judge Vincent L. Briccetti of the U.S.
District Court for the Southern District of New York:
(i) denied Cree's motion to dismiss for lack of subject
matter jurisdiction;
(ii) granted the Plaintiff's letter-motion for an extension of
the current class certification briefing schedule; and
(iii) terminated without prejudice the Plaintiff's motion for
class certification and Cree's two motions to strike two
of the Plaintiff's expert reports.
Plaintiff Wedra brings the putative class action against Defendant
Cree, under New York General Business Law Sections 349 and 350, and
for fraudulent misrepresentation and concealment, based on her
purchase of Cree's 60-Watt and 75-Watt LED light bulbs from a Home
Depot store in Westchester County. According to the Plaintiff,
although Cree's packaging and advertising claimed that "(1) the
bulbs would last 22+ or 45+ years"; (2) she would "save upwards of
hundreds of dollars per bulb over the lifetime of the bulbs"; and
(3) "the bulb would perform better than less expensive LED and
non-LED bulbs," the light bulbs she purchased burned out within six
months of her purchase.
Now pending are the following: (i) the Plaintiff's motion for class
certification; (ii) Cree's motion to dismiss for lack of subject
matter jurisdiction, pursuant to Rule 12(b)(1); (iii) Cree's two
motions to strike two of the Plaintiff's expert reports; and (iv)
the Plaintiff's motion for an extension of class certification
briefing schedule.
I. Rule 12(b)(1) Motion
Cree argues the Plaintiff lacks standing to bring this case because
she testified she bought the bulbs "using her mother's money for
her mother's use in her mother's home." According to Cree, this
means the Plaintiff's mother -- not the Plaintiff herself --
purchased the bulbs at issue, and therefore the Plaintiff has not
suffered an injury for Article III standing based upon expected
energy savings because her mother -- not the Plaintiff -- would
have realized such savings.
Judge Briccetti notes that the Plaintiff argues she was injured
because she paid a price premium for the light bulbs based on the
expectation of higher energy savings and a longer bulb-life.
During her deposition, when asked whose money she used to purchase
the light bulbs at issue in the case, she responded, "I used my
money." And although the Plaintiff did testify that her mother
sometimes gave her cash, she did not testify that her mother gave
her cash specifically for the purpose of buying the light bulbs at
issue or that her mother gave her the specific cash she used to buy
the bulbs. Rather, the Plaintiff testified that she had her cash
in her wallet and that she believed she used that cash to buy the
light bulbs. Hence, the Plaintiff has met her burden to establish
Article III standing.
II. Request for Extension
On Jan. 22, 2021, the Court issued the Second Revised Discovery
Plan and Scheduling Order, which set a briefing schedule for the
parties' class certification and related motions. On Feb. 26,
2021, the Plaintiff filed a motion for class certification. On
April 30, 2021, Cree filed two motions to strike.
By letter-motion dated May 11, 2021, the Plaintiff requests an
extension of the briefing schedules for the pending motions. She
notes that she might file a motion to strike. She also submitted a
proposed revised Civil Case Discovery Plan and Scheduling Order.
Cree consented to the proposed extended dates.
Judge Briccetti granted the requested briefing extensions. The
Judge will separately sign and docket the Third Revised Civil Case
Discovery Plan and Scheduling Order.
However, given the now lengthy briefing schedule, and in the
interest of judicial economy and efficiency, Judge Briccetti
terminated the pending motion for class certification and the
motions to strike without prejudice to re-filing. With respect to
these three terminated motions and the Plaintiff's contemplated
motion to strike, the parties will serve upon each other all papers
in support of these four motions in accordance with the Third
Revised Civil Case Discovery Plan and Scheduling Order. However,
the parties are ordered not to file their motion papers on the ECF
docket on their due dates. Rather, the parties are directed to
file all motion papers on the ECF docket on Oct. 1, 2021, or on the
date the motions are fully briefed, whichever is later.
As soon as practicable thereafter, the parties will submit courtesy
copies to the Court in accordance with Judge Briccetti's Individual
Practices. The courtesy copies will bear on the top of each page
the ECF header automatically printed by the Court's Electronic Case
Filing system.
The Clerk is instructed to terminate the motions.
A full-text copy of the Court's May 24, 2021 Memorandum Opinion &
Order is available at https://tinyurl.com/uv3et5tu from
Leagle.com.
DANIMER SCIENTIFIC: Glancy Prongay Reminds of July 13 Deadline
--------------------------------------------------------------
Glancy Prongay & Murray LLP ("GPM") reminds investors of the
upcoming July 13, 2021 deadline to file a lead plaintiff motion in
the class action filed on behalf of investors who purchased or
otherwise acquired Danimer Scientific Inc. ("Danimer" or the
"Company") (NYSE: DNMR) securities between October 5, 2020 and May
4, 2021, inclusive (the "Class Period").
If you suffered a loss on your Danimer investments or would like to
inquire about potentially pursuing claims to recover your loss
under the federal securities laws, you can submit your contact
information at
https://www.glancylaw.com/cases/danimer-scientific-inc/. You can
also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free
at 888-773-9224, or via email at shareholders@glancylaw.com to
learn more about your rights.
March 20, 2021, The Wall Street Journal published an article
entitled "Plastic Straws That Quickly Biodegrade in the Ocean? Not
Quite, Scientists Say" addressing, among other things, Danimer's
claims that Nodax, a plant-based plastic that Danimer markets,
breaks down far more quickly than fossil-fuel plastics. The article
alleges that according to several experts on biodegradable
plastics, "many claims about Nodax are exaggerated and misleading."
According to the article, Jason Locklin, the expert who co-authored
the study touted by Danimer as validating its material, stated that
Danimer's marketing is "sensationalized" and that making broad
claims about Nodax's biodegradability "is not accurate" and is
"greenwashing."
On this news, the Company's stock price fell $6.43 per share, or
roughly 13%, to close at $43.55 per share on March 22, 2021.
On April 22, 2021, Spruce Point Capital Management ("Spruce Point")
published a research report entitled "When the Tide Goes Out, What
Will Wash Ashore?" In addition to the concerns about Danimer's
product biodegradability claims, the report found "multiple
conflicting sources of Danimer's facility sizes and production
capacity" and "inconsistencies between reported figures and city
filings for Kentucky facility capital costs." The report also
raised doubts about the strength of the Company's purported
partnerships with Pepsi and Nestlé because Pepsi recently sold its
equity stake in Danimer and "both the top Pepsi and Nestlé
executives with close relationships to Danimer recently resigned."
On this news, the Company's stock price fell $2.01, or 8%, to close
at $22.99 per share on April 22, 2021, on unusually heavy trading
volume.
On May 4, 2021, Spruce Point published a follow-up report. Citing
information obtained via a Freedom of Information Act ("FOIA")
request from the Kentucky Department of Environmental Protection,
the report alleged that "Danimer's production figures, its pricing,
and rosy financial projections are wildly overstated" and that its
Kentucky facility received a notice of compliance violations from
the Division for Air Quality. Moreover, "Danimer's PHA average
selling price appears to be 30% - 42% below management's claims."
On this news, the Company's stock price fell $4.48, or 20%, over
three consecutive trading sessions to close at $17.66 per share on
May 6, 2021, on unusually heavy trading volume.
The complaint filed alleges that throughout the Class Period,
Defendants made materially false and/or misleading statements, as
well as failed to disclose material adverse facts about the
Company's business, operations, and prospects. Specifically,
Defendants failed to disclose to investors: (1) that biodegradable
materials such as Nodax could take years to break down; (2) that,
as a result, the Company's marketing claims that Nodax products
could biodegrade within months were exaggerated and misleading; (3)
that monthly biopolymer production and natural gas usage at the
Company's Kentucky and Georgia facilities were materially
overstated; (4) that Danimer faced compliance violations for its
Kentucky facility from the Division of Air Quality; and (5) that,
as a result of the foregoing, Defendants' positive statements about
the Company's business, operations, and prospects were materially
misleading and/or lacked a reasonable basis. The first-filed case
is pending in the United States District Court for the Eastern
District of New York, captioned Rosencrants v. Danimer Scientific,
Inc., et al., Case No. 1:21-cv-02708.
If you purchased or otherwise acquired Danimer securities during
the Class Period, you may move the Court no later than July 13,
2021 to request appointment as lead plaintiff in this putative
class action lawsuit. To be a member of the class action you need
not take any action at this time; you may retain counsel of your
choice or take no action and remain an absent member of the class
action. If you wish to learn more about this class action, or if
you have any questions concerning this announcement or your rights
or interests with respect to the pending class action lawsuit,
please contact Charles Linehan, Esquire, of GPM, 1925 Century Park
East, Suite 2100, Los Angeles, California 90067 at 310-201-9150,
Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com,
or visit our website at www.glancylaw.com. If you inquire by email
please include your mailing address, telephone number and number of
shares purchased.
This press release may be considered Attorney Advertising in some
jurisdictions under the applicable law and ethical rules. [GN]
DAPPER LABS: Rosen Law Discloses Securities Class Action Lawsuit
----------------------------------------------------------------
Rosen Law Firm, a global investor rights law firm, announces it has
filed a class action lawsuit on behalf of purchasers of the
non-fungible tokens ("NFTs") of Dapper Labs, Inc. - NBA Top Shot
Moments. The lawsuit seeks to recover damages for investors. A
class action lawsuit has already been filed.
To join the class action, go to
http://www.rosenlegal.com/cases-register-2096.htmlor call Phillip
Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or
cases@rosenlegal.com for information on the class action.
According to the lawsuit, the defendants: (1) reaped hundreds of
millions of dollars in profits by selling unregistered securities
to investors; (2) ensured that money stayed on the platform,
propping up the market for Moments as well as the overall valuation
of NBA Top Shot, by preventing investors from withdrawing their
funds for months on end; and (3) as a result of defendants'
issuance, promotion, and sale of unregistered securities, investors
have suffered significant damages.
A class action lawsuit has already been filed. If you wish to join
the litigation, go to
http://www.rosenlegal.com/cases-register-2096.htmlor to discuss
your rights or interests regarding this class action, please
contact Phillip Kim, Esq. of Rosen Law Firm toll free at
866-767-3653 or via e-mail at pkim@rosenlegal.com or
cases@rosenlegal.com.
NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS
IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN
ONE. YOU MAY RETAIN COUNSEL OF YOUR CHOICE. YOU MAY ALSO REMAIN AN
ABSENT CLASS MEMBER AND DO NOTHING AT THIS POINT. AN INVESTOR'S
ABILITY TO SHARE IN ANY POTENTIAL FUTURE RECOVERY IS NOT DEPENDENT
UPON SERVING AS LEAD PLAINTIFF.
Rosen Law Firm represents investors throughout the globe,
concentrating its practice in securities class actions and
shareholder derivative litigation. Rosen Law Firm was Ranked No. 1
by ISS Securities Class Action Services for number of securities
class action settlements in 2017. The firm has been ranked in the
top 4 each year since 2013. Rosen Law Firm has achieved the largest
ever securities class action settlement against a Chinese Company.
Rosen Law Firm's attorneys are ranked and recognized by numerous
independent and respected sources. Rosen Law Firm has secured
hundreds of millions of dollars for investors.
Attorney Advertising. Prior results do not guarantee a similar
outcome. [GN]
DESIGNER BRANDS: Dismissal of Count I in LaGuardia TCPA Suit Denied
-------------------------------------------------------------------
In the case, Eric LaGuardia, et al., Plaintiffs v. Designer Brands
Inc., et al., Defendants, Case No. 2:20-cv-2311 (S.D. Ohio), Judge
Sarah D. Morrison of the U.S. District Court for the Southern
District of Ohio, Eastern Division, denied the Defendants' Motion
to Dismiss Count I of the Amended Complaint.
Plaintiffs Eric LaGuardia, Sophia Wingate, Nicole Austin, and
Lindsey Rucker brought the class action lawsuit alleging Defendants
Designer Brands, Inc. and DSW Shoe Warehouse, Inc. violated the
Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. Section 227,
et seq., by sending them unwanted, automated spam text messages.
The Plaintiffs' Amended Complaint asserts two claims for relief;
only Count I is at issue and that claim alleges that DSW violated
the TCPA by sending spam text messages in July and August of 2019.
Relevant to Count I, the TCPA prohibits telephone calls made using
an automatic dialing system or prerecorded voice. The Plaintiffs
assert that Defendant DSW sent them text messages through the use
of a random or sequential number generator and these communications
were made en masse without the Plaintiffs' prior consent. Their
alleged injuries include invasion of privacy, costs associated with
receiving spam text messages, reduced phone storage due to the text
messages, decreased battery power, and slower cellular service.
After the Court denied a Motion for Judgment on the Pleadings, the
Defendants moved to dismiss Count I of the First Amended Complaint
on the grounds that the Court lacks subject matter jurisdiction
over that claim. The Plaintiffs responded in opposition and the
Defendants replied. Each side then filed numerous notices of
supplemental authority.
DSW moves to dismiss Count I for lack of subject matter
jurisdiction relying on the recent Supreme Court decision in Barr
v. Am. Ass'n of Political Consultants, ___ U.S. ___, 140 S.Ct. 2335
(2020) ("the AAPC decision") to argue that the TCPA was
unconstitutional from 2015 through July 2020 because it imposed an
impermissible content-based restriction on speech. The Plaintiffs
oppose dismissal, arguing that the AAPC decision left the portion
of the TCPA relevant to this action intact and enforceable.
Alternatively, the Plaintiffs move for leave to amend their
complaint in the event that the Motion to Dismiss is granted.
DSW contends that under AAPC, the robocall restriction is
unconstitutional retrospectively for the years between 2015 (when
the government exception was added to the TCPA) and July 2020
(after AAPC was decided) because the government debt exception
violated the First Amendment and equal protection principles.
Because the text messages at issue in this case were sent in the
summer of 2019, DSW claims the Court lacks subject matter
jurisdiction over Count I.
Judge Morrison opines that since the AAPC decision was issued less
than a year ago, district courts have split on the application of
AAPC to TCPA claims arising between 2015 and 2020. Two courts have
adopted DSW's argument that the severability of the government debt
exception is not retroactive so the entire statutory restriction
was invalid during the time that the amendment was in effect. The
general rule is that "an unconstitutional statutory amendment 'is a
nullity' and 'void' when enacted, and for that reason has no effect
on the original statute."
The original statute at issue, 47 U.S.C. Sect 227(b)(a)(A)(iii),
had no constitutional defects prior to the 2015 amendment. So when
the AACP Court concluded that it could sever the government debt
exemption from the rest of Section 227(b), that amendment was void
at its inception in 2015 and had no effect on the pre-2015 text of
the statute, Judge Morrison holds. In other words, the effect is
as if the amendment had never happened and the pre-2015 statute's
enforceability is unaffected by the amendment.
For these reasons, Judge Morrison denied the Defendants' Motion to
Dismiss Count I of the Amended Complaint. The Plaintiffs'
alternative request for leave to file an amended complaint is
moot.
A full-text copy of the Court's May 24, 2021 Opinion & Order is
available at https://tinyurl.com/ym43zemv from Leagle.com.
DEVON ENERGY: Class Settlement in Price FLSA Suit Gets Approval
---------------------------------------------------------------
In the case, JOHN PRICE, Individually and for others similarly
situated, Plaintiff v. DEVON ENERGY CORPORATION, Defendant, Case
No. 2:20-cv-00316-KWR-GJF (N.N.M.), Judge Kea W. Riggs of the U.S.
District Court for the District of New Mexico granted the
Plaintiff's Unopposed Motion to Approve FLSA Settlement, Attorneys'
Fees and Costs and Plaintiff's Service Award.
The parties are proceeding on the FLSA collective action and are
not proceeding on the Rule 23 class action claim.
In light of their response, Judge Riggs finds that the parties have
created an adequate record explaining why prior notice to the
opt-in class is not necessary. The parties will send notice to the
proposed collective action members to opt-in, and therefore the
settlement does not bind them unless they opt in. Each individual
will in effect receive an individual settlement offer, and each
person can decide to accept or reject the offer.
Judge Riggs notes that generally, the Court does not require
judicial approval of a settlement in an FLSA collective action. It
also does not require a fairness hearing under these circumstances.
The Judge finds no need to review the merits of settlement
agreement in the case. Alternatively, she finds that based on the
record created by the parties, she will approve the settlement,
proposed notice to opt-in collective action members, the attorneys'
fees, and the Plaintiff's service award.
In reaching this conclusion, Judge Riggs finds (i) a bona fide
dispute exists between the parties; (ii) there is no apparent
defect in the negotiation of the settlement; (iii) the settlement
is fair, reasonable, and equitable to all parties concerned; (iv)
the proposed settlement contains a reasonable award of attorneys'
fees based on a reasonable contingency fee of 40% and the Johnson
factors; and (v) the Plaintiff's requested service award of $5,000
is reasonable.
Moreover, the Judge approves the notice procedure and form proposed
by the parties.
Based on the foregoing, Judge Riggs granted the Plaintiff's
Unopposed Motion. The Court's Order to Show Cause is quashed.
A full-text copy of the Court's May 24, 2021 Order is available at
https://tinyurl.com/49hbezhb from Leagle.com.
DRESSER LLC: Court Denies Bid to Compel Depositions in Barton Suit
------------------------------------------------------------------
In the case, MICHELLE BARTON, ET AL. v. DRESSER, LLC, ET AL., Civil
Action No. 20-502-BAJ-RLB (M.D. La.), Magistrate Judge Richard L.
Bourgeois, Jr., of the U.S. District Court for the Middle District
of Louisiana:
(i) denied without prejudice the Plaintiffs' Motion to Compel
Depositions; and
(ii) denied as moot the Motion to Expedited Motion to Extend
Deadline to Respond to Plaintiffs' Motion to Compel filed
by Defendants Dresser, LLC and Baker Hughes Holdings LLC.
On June 11, 2020, Michelle Barton and William Barton, Jr. brought
the purported class action in state court naming as Defendant the
Louisiana Department of Environmental Quality. The Plaintiffs seek
damages on behalf of themselves and a proposed class of similarly
situated owners, renters and residents whose property was allegedly
contaminated by a toxic release of chlorinated compounds, including
Trichloroethylene ("TCE"), as a result of the operation of
Dresser's industrial valve manufacturing facility in Pineville,
Louisiana. The Plaintiffs amended the action to bring claims
against Dresser for negligence, negligence per se, trespass, strict
liability, and violations of the Louisiana Groundwater Act.
Dresser removed the action on Aug. 5, 2020.
On April 15, 2021, the Plaintiffs filed their Motion to Compel
Depositions, which seeks an order requiring Dresser to produce
certain fact witnesses for depositions relevant to class
certification.
On April 16, 2021, Dresser filed a Motion to Transfer Action to the
Alexandria Division of the U.S. District Court for the Western
District of Louisiana. The motion seeks transfer under 28 U.S.C.
Section 1404(a), which provides for the transfer of civil actions
to an otherwise proper forum that is more convenient for the
parties and witnesses and in the interests of justice. Among other
things, Dresser indicates that the lawsuit "is one of 14 federal
lawsuits concerning the presence of chlorinated solvents, including
TCE, in groundwater and other environmental media in Pineville,
Louisiana," and that 12 of the actions are proceeding in the
Alexandria Division of the U.S. District Court for the Western
District of Louisiana -- the division and district where the
alleged contamination exists.
On April 29, 2021, Dresser filed the instant Motion to Extend
Deadline, which seeks an extension of Dresser's deadline to respond
to the Plaintiffs' Motion to Compel Depositions until 14 days after
the district judge rules on Dresser's pending Motion to Transfer.
In essence, Dresser requests that the resolution of the Motion to
Compel (as well as the taking of any depositions) not occur unless
the Court denies the Motion to Transfer. Among other things,
Dresser notes that the magistrate judge presiding over the 12
related cases pending in the Alexandria Division of the U.S.
District Court for the Western District of Louisiana issued a case
management order on April 8, 2021, providing deadlines and
instructions regarding pre-certification discovery, including
limitations on the taking of depositions. Several of those related
cases, and the applicable case management order, involve the same
law firm representing the class representatives in the instant
matter.
On May 3, 2021, the Court found good cause to stay Dresser's
deadline to oppose the Plaintiffs' Motion to Compel Depositions
until resolution of Dresser's Motion to Extend Deadline. As
stated, the motion is unopposed as the Plaintiffs did not file a
timely opposition.
Judge Bourgeois has reviewed Dresser's Motion to Transfer and
associated briefing. Given the issues raised by the Motion to
Transfer and considering the various discovery related postures in
all of the referenced cases, the Judge will deny the Plaintiff's
Motion to Compel Depositions without prejudice to refile after the
district judge issues a ruling on the Motion to Transfer. This
will provide the parties an additional opportunity to
meet-and-confer regarding the depositions should the Motion to
Transfer be denied. The parties may continue with any other
"unobjected to" discovery that does not otherwise conflict with the
limitations set in the Western District of Louisiana Case
Management Order referenced above. A revised scheduling order may
be issued in the matter should the Motion to Transfer be denied.
Based on the foregoing, Judge Bourgeois denied the Plaintiffs'
Motion to Compel Depositions without prejudice to refile after the
district judge issues a ruling on Dresser's Motion to Transfer.
The Judge denied as moot Dresser's Expedited Motion to Extend
Deadline to Respond to Plaintiffs' Motion to Compel.
A full-text copy of the Court's May 24, 2021 Order is available at
https://tinyurl.com/4xv6x893 from Leagle.com.
DXC TECHNOLOGY: Appeal on Class Action's Dismissal Pending
----------------------------------------------------------
DXC Technology Company said in its Form 10-K report filed with the
U.S. Securities and Exchange Commission on May 28, 2021, for the
fiscal year ended March 31, 2021, that the appeal on the
order of dismissal of the purported class action suit entitled In
re DXC Technology Company Securities Litigation, is pending.
On December 27, 2018, a purported class action lawsuit was filed in
the United States District Court for the Eastern District of
Virginia against the Company and two of its current officers.
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and is premised on
allegedly false and/or misleading statements, and alleged
non-disclosure of material facts, regarding the Company's business,
operations, prospects and performance during the proposed class
period of February 8, 2018 to November 6, 2018.
The Company moved to dismiss the claims in their entirety, and on
June 2, 2020, the court granted the Company's motion, dismissing
all claims and entering judgment in the Company's favor.
On July 1, 2020, the plaintiffs filed a notice of appeal to the
U.S. Court of Appeals for the Fourth Circuit.
The appeal has been fully briefed and a decision on the appeal
remains pending.
DXC Technology Company, together with its subsidiaries, provides
information technology services and solutions primarily in North
America, Europe, Asia, and Australia. It operates through three
segments: Global Business Services (GBS), Global Infrastructure
Services (GIS), and United States Public Sector (USPS). DXC
Technology Company was founded in 1959 and is headquartered in
Tysons, Virginia.
DXC TECHNOLOGY: Bid for Initial Certification in Forsyth Granted
----------------------------------------------------------------
DXC Technology Company said in its Form 10-K report filed with the
U.S. Securities and Exchange Commission on May 28, 2021, for the
fiscal year ended March 31, 2021, that the court in Forsyth, et al.
v. HP Inc. and Hewlett Packard Enterprise granted Plaintiffs'
motion for preliminary certification and lifted the previously
imposed stay of the action, granted Plaintiffs' motion for
preliminary certification and lifted the previously imposed stay of
the action.
On August 18, 2016, this purported class and collective action was
filed in the U.S. District Court for the Northern District of
California, against HP and HPE alleging violations of the Federal
Age Discrimination in Employment Act ("ADEA"), the California Fair
Employment and Housing Act, California public policy and the
California Business and Professions Code.
Former business units of HPE now owned by the Company may be
proportionately liable for any recovery by plaintiffs in this
matter.
Plaintiffs seek to certify a nationwide class action under the ADEA
comprised of all U.S. residents employed by defendants who had
their employment terminated pursuant to a work force reduction
("WFR") plan and who were 40 years of age or older at the time of
termination.
The class seeks to cover those impacted by WFRs on or after
December 2014. Plaintiffs also seek to represent a Rule 23 class
under California law comprised of all persons 40 years of age or
older employed by defendants in the state of California and
terminated pursuant to a WFR plan on or after August 18, 2012.
In January 2017, defendants filed a partial motion to dismiss and a
motion to compel arbitration of claims by certain named and opt-in
plaintiffs who had signed release agreements as part of their WFR
packages.
In September 2017, the Court denied the partial motion to dismiss
without prejudice, but granted defendants' motions to compel
arbitration for those named and opt-in plaintiffs.
The Court stayed the entire action pending arbitration for these
individuals, and administratively closed the case.
A mediation was held in October 2018 with the 16 named and opt-in
plaintiffs who were involved in the case at that time. A settlement
was reached, which included seven plaintiffs who were employed by
former business units of HPE that are now owned by the Company.
In June 2019, a second mediation was held with 145 additional
opt-in plaintiffs who were compelled to arbitration pursuant to
their release agreements. In December 2019, a settlement was
reached with 142 of the opt-in plaintiffs, 35 of whom were employed
by former business units of HPE that are now owned by the Company,
and for which the Company was liable.
In December 2020, Plaintiffs filed a motion for preliminary
certification of the collective action, which Defendants opposed.
In April 2021, the court granted Plaintiffs' motion for preliminary
certification and lifted the previously imposed stay of the
action.
DXC said, "Former business units of the Company now owned by
Perspecta may be proportionately liable for any recovery by
plaintiffs in this matter."
DXC Technology Company, together with its subsidiaries, provides
information technology services and solutions primarily in North
America, Europe, Asia, and Australia. It operates through three
segments: Global Business Services (GBS), Global Infrastructure
Services (GIS), and United States Public Sector (USPS). DXC
Technology Company was founded in 1959 and is headquartered in
Tysons, Virginia.
DXC TECHNOLOGY: California Consolidated Class Suit Dismissed
------------------------------------------------------------
DXC Technology Company said in its Form 10-K report filed with the
U.S. Securities and Exchange Commission on May 28, 2021, for the
fiscal year ended March 31, 2021, that the court granted the
company's motion to dismiss the consolidated purported class action
suit in California.
On August 20, 2019, a purported class action lawsuit was filed in
the Superior Court of the State of California, County of Santa
Clara, against the Company, directors of the Company, and a former
officer of the Company, among other defendants.
On September 16, 2019, a substantially similar purported class
action lawsuit was filed in the United States District Court for
the Northern District of California against the Company, directors
of the Company, and a former officer of the Company, among other
defendants.
On November 8, 2019, a third purported class action lawsuit was
filed in the Superior Court of the State of California, County of
San Mateo, against the Company, directors of the Company, and a
former officer of the Company, among other defendants.
The third lawsuit was voluntarily dismissed by the plaintiff and
re-filed in the Superior Court of the State of California, County
of Santa Clara on November 26, 2019, and thereafter was
consolidated with the earlier-filed action in the same court on
December 10, 2019.
The California lawsuits assert claims under Sections 11, 12 and 15
of the Securities Act of 1933, as amended, and are premised on
allegedly false and/or misleading statements, and alleged
non-disclosure of material facts, regarding the Company's prospects
and expected performance. Plaintiff in the federal action filed an
amended complaint on January 8, 2020.
The putative class of plaintiffs in these cases includes all
persons who acquired shares of the Company's common stock pursuant
to the offering documents filed with the Securities and Exchange
Commission in connection with the April 2017 transaction that
formed DXC.
On July 15, 2020, the Superior Court of California, County of Santa
Clara, denied the Company's motion to stay the state court case but
extended the Company's deadline to seek dismissal of the state
action, until after a decision on the Company's motion to dismiss
the federal action. The Company has since moved to dismiss the
state action, and the court has continued the motion until after
the outcome of the federal action.
On July 27, 2020, the United States District Court for the Northern
District of California granted the Company's motion to dismiss the
federal action. The Court's order permitted plaintiffs to amend and
refile their complaint within 60 days, and on September 25, 2020,
the plaintiffs filed an amended complaint.
On November 12, 2020, the Company filed a motion to dismiss the
amended complaint.
On April 30, 2021, the Court granted the Company's motion to
dismiss the amended complaint, while granting Plaintiffs leave to
amend and refile their complaint within 30 days.
DXC Technology Company, together with its subsidiaries, provides
information technology services and solutions primarily in North
America, Europe, Asia, and Australia. It operates through three
segments: Global Business Services (GBS), Global Infrastructure
Services (GIS), and United States Public Sector (USPS). DXC
Technology Company was founded in 1959 and is headquartered in
Tysons, Virginia.
EASTLAND MALL: Beaver Wins Final Class Certification Under FLSA
---------------------------------------------------------------
In the case, KEJUANA BEAVER, Individually and on Behalf of All
Others Similarly Situated, Plaintiffs v. EASTLAND MALL HOLDINGS,
LLC, et al., Defendants, Case No. 2:20-cv-485 (S.D. Ohio), Judge
Edmund A. Sargus, Jr., of the U.S. District Court for the Southern
District of Ohio, Eastern Division, grants the Plaintiffs' Motion
for Final FLSA Class Certification and Request for Damages
Hearing.
The Named Plaintiffs filed the action on Jan. 28, 2020, alleging
violations of the Fair Labor Standards Act and Ohio wage law
against Defendants Eastland Mall Holdings, LLC, and Group 7
Staffing, LLC. The Defendants operate a shopping mall, Eastland
Mall, located in Franklin County, Ohio.
The Plaintiffs allege that they are employed at Eastland Mall in
various hourly, non-exempt positions. They allege that the
Defendants have failed to pay them overtime compensation at a rate
of one and one-half times their regular rates of pay for hours
worked in excess of 40 during a workweek. Instead, they allege,
the Defendants compensate them at their regular rates of pay for
all hours worked, even in excess of 40 hours per week. The
Plaintiffs have all requested paystubs from the Defendants, but the
Defendants have failed to provide the requested paystubs.
Count One of the Second Amended Complaint seeks relief under the
FLSA, 29 U.S.C. Section 201, et seq. The Plaintiffs pursue these
claims on behalf of themselves and all other similarly situated as
a representative action under the FLSA's opt-in provision, 29
U.S.C. Section 216(b). Count Two seeks relief under the Ohio
Minimum Fair Wage Standards Act, Ohio Rev. Code Section 4111, et
seq., and Fed. R. Civ. P. 23 as a class action on behalf of the
Plaintiffs and all other members of the class. Count Three alleges
that Defendants violated Ohio Rev. Code Section 4113.15 by failing
to compensate the Plaintiffs within 30 days of the performance of
compensable work. Count Four alleges on behalf of Named Plaintiff
Askia Champion that the Defendants engaged in unlawful retaliation
under the FLSA.
On Jan. 8, 2021, the Court granted the Plaintiffs' Motion for
Conditional FLSA Class Certification and Rule 23 Class
Certification.
In that Order, the Court conditionally certified the following FLSA
Class: All individuals currently and formerly employed by
Defendants at Eastland Mall during the previous three years, who
were paid on an hourly basis, and who did not receive overtime
payment at a rate of one and one-half times their regular rate pay
for all hours worked in a workweek in excess of 40 (Hourly
Employees).
The Court also approved distribution of the Plaintiffs' proposed
notice and a 45-day opt-in period. On March 22, 2021, the Court
granted the Plaintiffs' Motion for Default Judgment against the
Defendants, finding the Defendants liable under the FLSA and Ohio
law. It indicated that it would hold a damages hearing after the
Plaintiffs moved for final certification under the FLSA. Following
the opt-in period, the Plaintiffs move for final certification of
the opt-in class under the FLSA. Two opt-in Plaintiffs have joined
the action.
Judge Sargus opines that the Plaintiffs have met their burden to
show that the opt-in Plaintiffs are similarly situated. The
Plaintiffs have not been able to obtain discovery because that the
Defendants are in default and have not complied with the Court's
prior orders to produce documents related to that the Plaintiffs'
employment. Nonetheless, that the Plaintiffs have submitted
sufficient proof that they suffered from a "single, FLSA-violating
policy."
The Named Plaintiffs and that the opt-in Plaintiffs were employed
on an hourly basis in administrative, security, and maintenance
positions at Eastland Mall; all worked hours in excess of 40; none
were compensated at a rate of time and one-half for the hours
worked in excess of 40. Paystubs submitted by Plaintiff Baylor
document that the Defendants did not pay time-and-a-half for hours
worked in excess of 40. Indeed, the Court already granted class
certification under Fed. R. Civ. P. 23(b), which is a more
demanding standard than final certification under Section 216(b) of
the FLSA.
Accordingly, Judge Sargus grants the Plaintiffs' Motion for Final
FLSA Class Certification. As the Court indicated in its order
granting default judgment, the Judge will set the matter for a
hearing to determine that the Plaintiffs' damages, as well as that
the Plaintiffs' counsel's attorneys' fees and costs. A notice
setting a damages hearing will issue on the docket forthwith. The
case is to remain open.
A full-text copy of the Court's May 24, 2021 Opinion & Order is
available at https://tinyurl.com/ttfk3kp7 from Leagle.com.
EMERGENT BIOSOLUTIONS: Thornton Law Reminds of June 18 Deadline
---------------------------------------------------------------
The Thornton Law Firm alerts investors that a class action lawsuit
has been filed on behalf of investors of Emergent BioSolutions Inc.
(NYSE:EBS). The case is currently in the lead plaintiff stage.
Investors who purchased EBS stock or other securities between April
24, 2020 and April 16, 2021 may contact the Thornton Law Firm's
investor protection team by visiting www.tenlaw.com/cases/Emergent
to submit their information. Investors may also email
investors@tenlaw.com or call 617-531-3917.
The case alleges that Emergent and its senior executives made
misleading statements to investors and failed to disclose that: (i)
Emergent's Baltimore plant had a history of manufacturing issues
increasing the likelihood for massive contaminations; (ii) these
longstanding contamination risks and quality control issues at
Emergent's facility led to a string of U.S. Food and Drug
Administration citations; and (iii) Emergent previously had to
discard the equivalent of millions of doses of COVID-19 vaccines
after workers at the Baltimore plant deviated from manufacturing
standards.
Interested Emergent investors have until June 18, 2021 to retain
counsel and apply to be a lead plaintiff if they are interested to
do so. Investors do not need to be a lead plaintiff in order to be
a class member. A lead plaintiff acts on behalf of all other
investor class members in managing the class action. If investors
choose to take no action, they can remain an absent class member.
The class has not yet been certified. Until certification occurs,
investors are not represented by an attorney.
FOR MORE INFORMATION: www.tenlaw.com/cases/Emergent
Thornton Law Firm's securities attorneys are highly experienced in
representing investors in recovering damages caused by violations
of the securities laws. Its attorneys have established track
records litigating securities cases in courts throughout the
country and recovering losses on behalf of investors. This may be
considered Attorney Advertising in some jurisdictions. Prior
results do not guarantee or predict a similar outcome with respect
to any future matter. [GN]
FIRST AMERICAN: Denial of Munro's Bid for Leave to Amend Affirmed
-----------------------------------------------------------------
In the case, JASON MUNRO, Plaintiff and Appellant v. FIRST AMERICAN
TITLE COMPANY, Defendant and Respondent, Case No. B295805 (Cal.
App.), the Court of Appeals of California for the Second District,
Division Five, affirmed the trial court's order denying Munro's
motion for leave to amend complaint.
Plaintiff Munro sued Defendant First American Title Co. (FATCO) and
related entities in 2007, alleging various state law claims. Among
them was a claim under California's Unfair Competition Law (UCL)
that was predicated on an alleged violation of the Real Estate
Settlement Procedures Act (RESPA) (12 U.S.C. Section 2601, et
seq.). Some 12 years after the lawsuit was filed, Munro sought
leave to file a fourth amended complaint that would add a
freestanding RESPA claim (i.e., a violation of RESPA itself, not a
violation alleged as a UCL predicate).
Mr. Munro and another named Plaintiff, Elizabeth Wilmot, purchased
homes in California and received title and escrow services from
FATCO. In 2007, they filed a putative class action alleging, among
other things, they were referred to FATCO for title and escrow
services by third parties who received "unlawful inducements"
(alternately characterized as referrals or kickbacks) from FATCO.
The complaint alleged the inducements violated the UCL because they
are unlawful under RESPA, which prohibits giving or receiving
anything of value "pursuant to any agreement or understanding that
business incident to or a part of a real estate settlement service
involving a federally related mortgage loan will be referred to any
person." The complaint did not include a standalone RESPA claim,
however, and the complaint took care to assert federal jurisdiction
over the action does not exist.
After two intervening amendments, Munro filed the operative third
amended complaint in 2010. It defines a subclass of persons who
paid for title insurance or escrow services by FATCO for property
located in California "who were referred to FATCO by a home builder
or developer who received a commission, compensation, kickback, or
other consideration or thing of value from FATCO." Munro, the only
named Plaintiff belonging to this putative subclass, alleges he was
referred to FATCO by the developer of his property and the
developer received discounts and services from FATCO.
Like all the complaints that preceded it, the operative complaint
alleged these referrals or kickbacks constituted unfair competition
because they are unlawful under RESPA. No freestanding RESPA claim
was alleged, and the complaint continued to include an assertion
that "federal jurisdiction does not exist" -- plus the further
statement that Munro was seeking class-wide "damages, restitution,
and disgorgement of monies wrongfully taken" but not "fines or an
administrative penalty." The operative complaint additionally
alleged other state law causes of action for breach of fiduciary
duty, fraud, and constructive fraud, and these were based, in part,
on allegations of inducements paid to homebuilders and developers
for referrals.
Mr. Munro deposed witnesses employed by the developer of his
property and FATCO in 2008. He also served interrogatories and
requests for production of documents relating to the alleged RESPA
violations in 2010 and 2011. The case was stayed intermittently
between 2009 and 2016 as the result of a motion to disqualify
FATCO's attorneys, various motions in related cases, and appeals.
In April 2018, Munro moved for leave to file a fourth amended
complaint, adding a freestanding RESPA claim. Munro did not
explain why his earlier pleadings did not include a standalone
RESPA claim, but he contended there would be no prejudice to FATCO
because the amended complaint alleged no new facts and the alleged
RESPA violation was already a predicate for recovery under the
UCL.
The only statements bearing on when Munro determined further
amendment of the complaint was advisable and on the reasons why
leave to amend was not sought earlier came in declarations
submitted with Munro's reply brief in support of leave to amend. A
declaration, authored by Richard Friedman (Friedman), one of
Munro's attorneys, stated that after a review of all of the factual
information obtained in discovery, extensive legal research, and
many hours of consultation with experts, Munro's attorneys recently
reached the conclusion that there was no viable class-wide damages
theory available under the existing non-RESPA state causes of
action, and that a freestanding RESPA cause of action provides an
efficient, straightforward damages theory, readily susceptible to
class treatment. A declaration by another of Munro's attorneys,
Nazo Semerjian, stated, among other things, that FATCO "produced
thousands of documents relating to Munro's homebuilder inducement
claim, including communications with homebuilders evidencing the
negotiation of fees for title and escrow services" in late 2016.
After hearing argument from the counsel and soliciting supplemental
briefing, the trial court denied Munro's motion for leave to amend.
The trial court concluded Friedman's declaration was improperly
submitted only in reply but, regardless, there still was no
adequate explanation of when the facts giving rise to the proposed
amendment were discovered and why the amendment was not made
earlier. The court accordingly found that Munro's request for
leave to amend was plagued by delay and, further, that FATCO was
prejudiced by that delay.
As to prejudice specifically, the trial court found the proposed
amendment would prejudice FATCO in two related ways. First,
because the only relief available to Munro under the UCL was
restitution, FATCO had "focused its defensive efforts" and
discovery practice on "determining whether restitution could be
recovered, rather than on defending against the facts supporting
the RESPA claim itself." Second, the court found defending against
the statutory penalties recoverable under a freestanding RESPA
claim would require depositions of third party builders for more
than 600 developments concerning transactions that occurred as
early as 15 years before, in 2003. The court concluded the proposed
pleading change that would require FATCO to locate witnesses and
discover what recollection they had of events long ago to defend
against a RESPA claim was prejudicial.
After the trial court denied leave to file a fourth amended
complaint, Munro asked the trial court to dismiss his UCL claim
(the last remaining claim in the operative complaint) to enable him
to immediately take an appeal from the trial court's order denying
further leave to amend the complaint.
That is the appeal now before the Court for resolution. The Court
of Appeals considers whether the trial court abused its discretion
when it concluded Munro's delay in seeking leave to amend, and the
prejudicial effect of such delay on FATCO, warranted denial of
leave to amend.
The Court of Appeals holds that the trial court was correct to deny
Munro leave to file another amended complaint. In its view,
Munro's inadequately explained delay in seeking leave to allege a
standalone RESPA claim -- which smacks of a conscious, strategic
choice to avoid removal of the action to federal court -- is reason
enough to justify the trial court's decision. But the trial court
further found the long delay in alleging a direct RESPA claim would
prejudice FATCO, and this was undoubtedly correct: If yet another
amendment were permitted, FATCO's ability to defend against
assessment of statutory penalties would require the company to
undertake far more extensive discovery than it had (to probe
whether FATCO accepted any fee, kickback, or thing of value
pursuant to an "agreement or understanding" with a developer), and
undertaking such discovery would be more burdensome and less
productive at this late date.
For these reasons, the Court of Appeals affirmed the trial court's
order. FATCO will recover its costs on appeal.
A full-text copy of the Court's May 25, 2021 Opinion is available
at https://tinyurl.com/54hb9xpb from Leagle.com.
The Bernheim Law Firm, Steven J. Bernheim --
B@thebernheimlawfirm.com -- Nazo S. Semerjian --
N.Semerdjian@TheBernheimLawFirm.com; Friedman Rubin, Richard H.
Friedman -- info@friedmanrubin.com; Shernoff Bidart Echeverria,
Michael J. Bidart -- mbidart@shernoff.com -- and Steven P. Messner
-- smessner@scottglovskylaw.com -- for Plaintiff and Appellant.
Dentons US, Ronald D. Kent -- ronald.kent@dentons.com -- Joel D.
Siegel -- joel.siegel@dentons.com -- Susan M. Walker --
susan.walker@dentons.com -- and Paul M. Kakuske --
paul.kakuske@dentons.com -- for Defendant and Respondent.
FLEX LIMITED: Dismissal of Putative Class Suit Under Appeal
-----------------------------------------------------------
Flex Ltd. said in its Form 10-K report filed with the U.S.
Securities and Exchange Commission on May 19, 2021, for the fiscal
year ended April 3, 2021, that the appeal made by the plaintiff in
the putative class action suit filed before the Northern District
of California, is ongoing.
On May 8, 2018, a putative class action was filed in the Northern
District of California against the Company and certain officers
alleging violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5, promulgated thereunder,
alleging misstatements and/or omissions in certain of the Company's
financial results, press releases and SEC filings made during the
putative class period of January 26, 2017 through April 26, 2018.
On October 1, 2018, the Court appointed lead plaintiff and lead
plaintiff's counsel in the case.
On November 28, 2018, lead plaintiff filed an amended complaint
alleging misstatements and/or omissions in certain of the Company's
SEC filings, press releases, earnings calls, and analyst and
investor conferences and expanding the putative class period
through October 25, 2018.
On April 3, 2019, the Court vacated its prior order appointing lead
plaintiff and lead plaintiff's counsel and reopened the lead
plaintiff appointment process.
On September 26, 2019, the Court appointed a new lead plaintiff and
lead plaintiff's counsel in the case. On November 8, 2019, lead
plaintiff filed a further amended complaint.
On December 4, 2019, Defendants filed a motion to dismiss the
amended complaint. On May 29, 2020, the Court granted defendants'
motion to dismiss without prejudice and gave lead plaintiff 30 days
to amend.
On June 29, 2020, lead plaintiff filed a further amended complaint.
On July 27, 2020, defendants filed a motion to dismiss the amended
complaint. On December 10, 2020, the Court granted defendants'
motion to dismiss with prejudice and entered judgment in favor of
defendants.
On January 7, 2021, lead plaintiff filed a notice of appeal to the
Ninth Circuit Court of Appeals. Lead plaintiff's opening appeal
brief is due May 19, 2021, and defendants' answering brief is due
June 18, 2021.
Flex said, "Any existing or future lawsuits could be
time-consuming, result in significant expense and divert the
attention and resources of our management and other key employees,
as well as harm our reputation, business, financial condition or
results of operations."
Flex Ltd. provides design, engineering, manufacturing, and supply
chain services and solutions to original equipment manufacturers
worldwide. It operates through High-Reliability Solutions,
Industrial and Emerging Industries, Communications & Enterprise
Compute, and Consumer Technologies Group segments. The company was
formerly known as Flextronics International Ltd. and changed its
name to Flex Ltd. in September 2016. Flex Ltd. was founded in 1990
and is based in Singapore.
FLINT, MI: Jones' Water Crisis Suit Dismissed With Prejudice
------------------------------------------------------------
In the case, In re Flint Water Cases. This Order Relates To: Melvin
Jones, Jr. v. Veolia North, Case No. 21-10937 (E.D. Mich.), Judge
Judith E. Levy of the U.S. District Court for the Eastern District
of Michigan, Southern Division, granted the Plaintiff's application
to proceed without prepaying fees and costs, and dismissed the case
with prejudice.
On April 27, 2021, the Plaintiff filed a complaint against
Defendant Veolia North, and the case was assigned to the Hon.
Arthur J. Tarnow. That same day, the Plaintiff applied to proceed
in forma pauperis ("IFP"). He did not request a summons and has
not served the complaint on any Defendant. Within the next three
business days, the Plaintiff filed eight docket entries, ranging
from a "notification of an upcoming confidential (via email)
attempt at conciliation of the instant matter with Veolia and need
to utilize Zoom platform for hearings," to a "Statement to
Honorable Judge Tarnow as to allowing the case to go forward per
continuing harm which relates to both Jones' IFP Motion and relates
to his Motion for Class Certification."
Judge Tarnow issued an order on May 3, 2021 indicating that, the
facts set forth in the Plaintiff's Complaint are too vague for the
Court to determine, at this juncture. He ordered the Plaintiff to
amend his complaint to include a more definite statement on or
before June 18, 2021, or the case would be dismissed.
Following Judge Tarnow's Order, the Plaintiff's docket entries
included the following: (1) a request that the Court amend the
Plaintiff's complaint for him; (2) an amended complaint; (3) a
supplemental amended complaint; and (4) an amended complaint. On
May 10, 2021, the Case was reassigned to Judge Levy as a companion
to the Flint Water Cases.
The Plaintiff's original complaint is difficult to follow. He does
not cite to any laws that he alleges were violated, nor does he set
forth any other bases for sustaining his complaint.
On the same day Judge Tarnow ordered the Plaintiff to submit a more
definite statement, the Plaintiff filed an amended complaint
against Defendant Veolia North. In it, he seeks appointment of
counsel and he indicates that he is unable to determine if his
lawsuit is appropriate for class certification.
Days later, on May 6, 2021, the Plaintiff filed a Supplemental
First Amended Complaint. He again includes a request for the
appointment of counsel to assist him in ascertaining whether his
case is eligible to proceed as a class action. In addition to
Veolia North, the Plaintiff adds an additional claim against a new
Defendant, the Napoli Law Firm, which he indicates is brought under
42 U.S.C. Section 1981 and 1982.
The Plaintiff filed yet another amended complaint on May 17, 2021.
This complaint lists even more parties and sets forth different
legal theories from earlier iterations of his complaint. He lists
the Plaintiffs as himself, "Federal EPA, City of Flint, Wells Fargo
Bank, HUD, and The State of Michigan," and he lists Defendants as
"Napoli Law Firm, attorney Patrick Lanciotti and attorney Hunter
and Attorney Corey Stern." There is no indication that any of the
Plaintiffs listed, besides himself, have joined the litigation, and
in any event, he cannot serve as counsel to these entities because
he is not a lawyer.
As to the original Defendant Veolia North, he states that it is
appropriate that Veolia be dismissed from the case. As to the
named Defendants, the Plaintiff cites to 42 U.S.C. Sections 1981,
1982, 1983, 3613, and the Americans with Disabilities Act, with no
further elaboration as to these specific statutes. He also states
the following regarding the relief sought:
1. He seeks to have the State of Michigan Attorney General
'weigh-in' on her (e.g. AG Nessel's opinion in detail about the
approximately over $200 million in attorney fees which the
Plaintiffs' Attorneys are seeking as to the 'companion' case;
2. He seeks to have the Court ask the Michigan Attorney
General (e.g. Dana Nessel) to 'weigh in' regarding named
Defendants' alleged lack of compliance with Michigan State LARA
regulation; and
3. He indicates that he also seeks the SAME 'weighing in'
(e.g. Advisory Opinion) from the Michigan State Supreme Court as to
the above two items set forth.
In addition to the 79 docket entries the Plaintiff has filed as of
the date of the Order, Plaintiff began emailing the Court and its
staff beginning on Jan. 26, 2021. As of May 21, 2021, he has sent
over 350 e-mails.
The Plaintiff's IFP application is still pending. He has also
filed the following motions: (1) a motion/application for
appointment of counsel; (2) a motion for summary judgment on the
pleadings; (3) an amended motion for class certification related to
request for declaratory relief; (4) a motion to recuse/challenge
for cause/a preemptory challenge to the Court; (5) a corrected
motion to recuse/a preemptory challenge to the Court; (6) a motion
to amend the case caption; (7) a motion for the Court to ask for
advisory opinions from the State of Michigan Attorney General's
office and the Michigan Supreme Court; (8) an "additional" motion
as to ethical issues for the Michigan Supreme Court and Attorney
General's office; (9) a motion that the Napoli Law Firm's "false
claims not be tolerated" (ECF No. 65); and (10) a motion as to harm
and damages.
Analysis
A. Plaintiff's IFP Application is Granted
As an initial matter, Judge Levy granted the Plaintiff's
application for IFP. The Plaintiff indicated that he is disabled,
receives $794 for "food welfare and welfare" each month, is not
employed, has $3 in his checking account and $21 in his savings
account. He also has a MI-ABLE account and a Charles Schwab stock
account that each carry a very small balance. The Judge finds that
the Plaintiff has satisfied the requirements of Section 1915(a).
B. Plaintiff's Complaint is Dismissed
Judge Levy's independent inquiry regarding the Plaintiff's claims
under Section 1915(a) mandates that the case be dismissed with
prejudice. The Plaintiff has already dismissed Veolia North, so
the Judge need not address whether this entity exists or whether
the Plaintiff has set forth a claim against it.
The Judge grants leave to permit the May 17, 2021 complaint to
serve as the operative complaint. As set forth, the Plaintiff has
set forth three items that he seeks as remedies in he case, namely,
that the Michigan Attorney General and Michigan Supreme Court
"weigh in" on two topics. He does not cite any statute that would
authorize such relief.
Where the Plaintiff does cite to statutes, he lists: 42 U.S.C.
Sections 1981, 1982, 1983, 3613, and the Americans with
Disabilities Act. But the Plaintiff does not describe how the
Defendants are alleged to have violated these statues. Nor does he
set forth facts that could support a viable claim under any of
these statues. Accordingly, the Plaintiff's complaint is dismissed
with prejudice.
The Plaintiff is enjoined from further filings, as the case is now
closed. To be clear: no further filings will be accepted from
Plaintiff absent leave of the Court. In order to obtain leave, the
Plaintiff must certify that the filings he presents have not been
raised and disposed of in the Court or in the Court of Appeals and
that they set forth a claim for relief as well as the basis for
that claim. Any proposed filing must be described in a summary of
no more than two pages.
Moreover, the Plaintiff is enjoined from e-mailing, faxing, or
otherwise contacting the Court, Court staff, or any United States
District Court employee unless he complies with the requirements
set forth above for seeking leave. His many emails to the Court
are unauthorized and improper ex parte communications.
C. Plaintiff's pending motions are denied because the case has been
dismissed.
The Plaintiff's case has been dismissed, and accordingly, all
pending motions are denied as moot.
Conclusion
For the reasons she set forth, Judge Levy granted the Plaintiff's
motion to proceed without prepayment of fees and costs. She
dismissed his case with prejudice. All pending motions are denied
as moot. No further filings or proceedings will take place in the
matter without prior approval of the Court, as set forth.
A full-text copy of the Court's May 24, 2021 Opinion & Order is
available at https://tinyurl.com/yfb7u4ss from Leagle.com.
FRANKLIN, TN: Partial Summary Judgment in Clarke Suit Affirmed
--------------------------------------------------------------
In the case, JENNIFER CLARKE, ET AL. v. CITY OF FRANKLIN, Case No.
M2020-00662-COA-R3-CV (Tenn. App.), the Court of Appeals of
Tennessee at Nashville affirms in part, reverses in part, and
vacates in part the trial court's order granting partial summary
judgment in favor of the Plaintiffs and denying the Plaintiffs'
request for an award of the attorney fees.
The appeal arises from a class action lawsuit against the City of
Franklin. The Plaintiffs are the owners of 188 properties, in five
subdivisions, whose properties are subject to liens in connection
with improvement assessments for sanitary sewer services.
The City of Franklin is an incorporated municipality located in
Williamson County, Tennessee, governed by a mayor and board of
aldermen. Beginning in 2009, the City passed a series of
ordinances and resolutions attempting to recoup the cost of
sanitary sewer improvements for various subdivisions in accordance
with Tennessee Code Annotated section 7-33-301, et seq.
On May 26, 2009, the City passed the first of the resolutions and
ordinances at issue. The resolution established an improvement
assessment for the Highgate Subdivision. It provided that the
sanitary sewer improvements for the Highgate Subdivision had been
completed at a cost of $204,586.50. The resolution then
calculated, for each of the benefited properties in the
subdivision, a "Total Assessment" that would be owed by each
property. The "Total Assessment" for each property varied, but the
highest for any single property was $9,844. The resolution then
designated the "Total Assessments" as "the 2009 Highgate
Subdivision Area property assessments."
The Highgate resolution never mentioned Tennessee Code Annotated
section 7-33-301, et seq. Nevertheless, the City claims that the
resolution was passed under the authority of these statutes.
Two months later, the City passed a separate resolution for the
Hooper Lane Subdivision. This time, the resolution specifically
invoked Tennessee Code Annotated sections 7-33-101 to 314 and
closely tracked the language of many of the applicable statutes.
The Hooper Lane resolution did not calculate any "total assessment"
amounts that would be owed by each property. Instead, the Hooper
Lane resolution listed only the total estimated cost of the
sanitary sewer improvement for the entire subdivision, and it
provided that one hundred percent of the cost of the improvement
would be assessed against the benefited properties.
Thereafter, the City passed three ordinances addressing three
additional subdivisions: Country Road Estates Subdivision, Boyd
Mill Avenue Area, and Monticello Subdivision. Like the Hooper Lane
resolution, each of these ordinances specifically invoked and
tracked the language of Tennessee Code Annotated sections 7-33-101
to 314. The ordinances for the Country Road Estates Subdivision,
the Boyd Mill Avenue Area, and the Monticello Subdivision all
provided that the benefited property owners were given twenty years
to pay off the assessments authorized by the ordinances. However,
all of the ordinances specifically provided that "improvement
assessments will be made annually by the Board when the levy of
municipal property taxes is made and such assessments will be due
at the same time or times as the municipal property taxes are due,
and will be subject to the same penalties and interest, in the
event of nonpayment, as are municipal property taxes."
Despite the marked differences between the language in the Highgate
resolution and the four resolutions and ordinances that followed,
the City implemented them all in the same manner, using the
approach described in the Highgate resolution. The resolutions and
ordinances were all drafted by the city engineer for the City of
Franklin, who was not an attorney. He was of the opinion that
there was "no difference" between the resolutions and ordinances as
far as the way they were established or how they operated.
In all, there were 188 properties in the subdivisions that were
benefited by the sanitary sewer improvements. For each benefited
property, the City filed a "Notice of Lien" with the Register of
Deeds, stating that the City had a lien against that property in
the full amount of the total assessment that would be owed by each
property over the life of the repayment period, according to the
initial calculations of the City, not just the amount that would be
due annually. The parties agree that the City was not required to
file any notices of the liens because the liens attach
automatically pursuant to the statute. The City claims that it
made a business decision to file the notices of liens in order to
notify potential purchasers of the benefited properties and any
other lienholders about the City's lien.
According to the complaint, the Plaintiffs had demanded that the
City remove the lien for the full amount, but the City refused.
The complaint alleged that the Plaintiffs were suffering
irreparable injury in that the liens prevented the sale,
refinancing, or transfer of their properties without payment of the
full assessment amounts calculated by the City.
The complaint proposed that the class of Plaintiffs include all
current and former owners of the affected properties against which
the City had recorded notices of liens for the total amounts of the
assessments for sanitary sewer improvements. The two proposed
subclasses would include those who had not yet suffered monetary
damages but needed injunctive relief to avoid suffering damages,
and those who had already suffered monetary damages in connection
with a completed or attempted sale, refinancing, or transfer of
title because of the outstanding liens.
Essentially, the complaint alleged that the City had obtained
illegal liens "through" its assessments. It requested a
declaratory judgment that any lien against the benefited properties
was limited to the amounts of annual assessments. The Plaintiffs
pointed out that the City was purportedly acting pursuant to
Tennessee Code Annotated sections 7-33-101 through 314. They
quoted numerous statutes within that statutory scheme in an effort
to demonstrate that improvement assessments are to be made "each
year" and "assessed annually," with the liens attaching "at the
time the annual improvement assessment is made."
The Plaintiffs asserted that the ordinance addressing the
Monticello Subdivision likewise provided that the assessments were
to be made annually and concurrent with the levy of municipal
property taxes. Thus, they alleged that the City "cannot attach a
lien on property for which future annual assessments have not yet
been made, and is therefore prevented from imposing a lien on a
property for the full amount of the special assessment." The
Plaintiffs sought a declaratory judgment to that effect and an
injunction prohibiting the City from maintaining liens in the full
amounts of the assessments, lifting the liens already imposed by
the City, and limiting any future liens to annual liens authorized
by the statutes. They also sought monetary damages for class
members who had suffered economic loss as a result of their
inability to sell or refinance existing mortgages on the properties
due to the liens. The Plaintiffs also sought an award of their
attorney fees.
The City filed an answer and a motion to dismiss, which the trial
court denied. The Plaintiffs then filed a motion for class
certification, claiming that the City had imposed liens on all of
the properties using the same criteria. Specifically, they alleged
that the unlawful liens were for special sewer assessments that
were not yet due under the applicable statutes. They claimed that
the liens should be for hundreds of dollars but that the City was
generally imposing liens of at least $6,000 per property.
In response to the motion for class certification, the City
insisted that there were some material differences in the
ordinances and resolutions, and therefore, the motion should be
denied or the class should be limited to a particular subdivision.
After a hearing, the trial court entered an order granting the
motion for class certification. It found that all of the
Plaintiffs' claims arose from the same practice and course of
conduct -- the City's creation of special assessment districts and
filing of disputed liens. It certified the class to include all
property owners whose affected properties were being or had been
subject to the disputed liens.
The parties filed cross-motions for summary judgment and "Joint
Stipulations of Fact" to aid the court in resolving the motions.
Based on the undisputed facts, the City moved for summary judgment,
claiming that it had properly interpreted and implemented Tennessee
Code Annotated section 7-33-301, et seq. The Plaintiffs filed a
motion for partial summary judgment, addressing the issues of
statutory interpretation but excluding the issue of damages. They
sought an order declaring that the City's "lien program related to
its special assessment districts" violated Tennessee Code Annotated
section 7-33-314. They defined the issue as whether the City
violated the statute by filing liens against the properties in the
full amount of "initial improvement assessments instead of the
annual amounts due and owing each year."
After a hearing on the cross-motions, the trial court entered an
order granting partial summary judgment to the Plaintiffs and
denying the City's motion for summary judgment. It concluded that
the City violated section 7-33-314 by filing notices of liens in
the full amount of the assessments assigned to each benefitted
property rather than the amount of annual assessments. The trial
court declared the notices of liens null and void and directed the
City to file amended notices of liens. The next phase of the
proceeding focused on damages. The owners of eight properties
filed claims for monetary damages allegedly caused by the City's
error when the property owners had attempted to refinance or sell
their properties. The trial court concluded that a hearing on
damages was not necessary and denied all claims, finding that none
of the claimants suffered an injury as a result of the City's
actions.
The Plaintiffs subsequently filed a motion for attorney fees in the
amount of $250,572.50. They argued that such an award was
appropriate because they had conferred a substantial benefit on the
members of an ascertainable class within the meaning of Mills v.
Electric Auto-Lite Co., 396 U.S. 375 (1970).
The trial court also denied the Plaintiffs' request for an award of
the attorney fees they had incurred. The Plaintiffs appeal,
asserting that the trial court erred in denying their claims for
damages and attorney fees. The City of Franklin argues that the
trial court erred in granting partial summary judgment in favor of
the Plaintiffs on the substantive issue regarding the validity of
the notices of liens.
Discussion
I. Issues Presented
The Plaintiffs present the following issues, which the Appellate
Court has slightly reworded, for review on appeal:
1. Did the trial court err in denying the claims for monetary
damages where the Plaintiffs provided proof of damages and would
not have incurred damages but for the City's illegal liens; and
2. Did the trial court err in denying the claim for attorney
fees where the litigation conferred a substantial benefit on an
ascertainable class and the award was not barred by sovereign
immunity.
In its posture as appellee, the City presents the following
additional issue, also restated:
1. Did the trial court err in determining that the City's
notices of liens were illegal where the City filed the notices in
the amount of improvement assessments for each Plaintiff's
proportionate share of the cost of the sewer improvement and
Tennessee law provides that the City's improvement assessment
constitutes a lien on each property.
For the following reasons, the decision of the chancery court is
affirmed in part, reversed in part, vacated in part, and remanded
for further proceedings.
II. Partial Summary Judgment
First, the Court of Appeals affirms the decision of the chancery
court entering partial summary judgment in favor of the Plaintiffs,
finding that the City's notices of liens in the full amount of the
total assessments were illegal and ultra vires. It finds that the
annual improvement assessments are due at the same time as
municipal property taxes. It finds no support for the City's
position that an "initial assessment" and indebtedness is fully due
and owing as soon as the resolution or ordinance is passed. The
benefited properties are not subject to liens in the full amount
claimed by the City. A lien created by statute is limited in
operation and effect by its terms and can be enforced only in the
circumstances provided for in the legislation.
Next, the Court of Appeals holds that the trial court reviewed the
parties' briefs and concluded that a damages hearing was
unnecessary, finding that "none of the 8 claimants had suffered an
injury as a result of the City's filing notices of liens for an
improper amount." The Appellate Court has determined that this
conclusion was erroneous. From its review of the record, though,
it is not clear to the Court whether the parties and the trial
court would have proceeded with a full evidentiary hearing had the
trial court not announced that "a damages hearing was unnecessary."
As such, it deems it appropriate to remand the damage claims to
the trial court for further consideration to determine whether the
claimed damages were otherwise properly recoverable. The trial
court may decide the claims on the written materials submitted, or
it may hold an evidentiary hearing, in its discretion. The Court of
Appeals simply holds that the trial court erred in dismissing all
of the claims on the basis that "none of the 8 claimants suffered
an injury as a result of the City's actions."
III. Attorney Fees
The remaining issue raised by the Plaintiffs was whether the trial
court erred in denying their request for attorney fees. In light
of the Court of Appeals' conclusion that all of the claims for
damages must be remanded for further consideration, it deems it
premature to consider any issue regarding an attorney fee award at
this juncture. It, therefore, vacates the trial court's holding on
attorney fees and direct the trial court to reconsider the issue as
part of the proceedings on remand.
Conclusion
For these reasons, the Court of Appeals affirmed in part, reversed
in part, and vacated in part the decision of the chancery court,
and remanded for further proceedings. Costs of the appeal are
taxed to the appellee, City of Franklin, for which execution may
issue if necessary.
A full-text copy of the Court's May 24, 2021 Opinion is available
at https://tinyurl.com/yp4zx4ep from Leagle.com.
J. Gerard Stranch, IV -- gerards@bsjfirm.com -- and Benjamin A.
Gastel -- beng@bsjfirm.com -- in Nashville, Tennessee, for the
Appellants, Jennifer Clarke and Samuel Clarke.
Shauna R. Billingsley, City Attorney, and William E. Squires,
Assistant City Attorney, in Franklin, Tennessee, for the Appellee,
City of Franklin, Tennessee.
GAIN CAPITAL: Zhang Suit Tossed Under Forum Non Conveniens Doctrine
-------------------------------------------------------------------
In the case, JUN ZHANG, a.k.a., JUNE ZHANG, individually and on
behalf of all others similarly situated, Plaintiff v. GAIN CAPITAL
HOLDINGS, INC., a Delaware corporation, Defendant, Case No.
3:20-cv-09426 (BRM) (TJB) (D.N.J.), Judge Brian R. Martinotti of
the U.S. District Court for the District of New Jersey issued an
Opinion:
a. granting Defendant Gain Capital Holdings ("GCH")'s Motion
to Dismiss pursuant to the doctrine of forum non
conveniens; and
b. denying as moot GCH's Motion to Dismiss Plaintiff Jun
Zhang's Complaint for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6).
GCH is a global provider of trading services and solutions with
customers located in over 180 countries. Its shares are traded on
the New York Stock Exchange and it has offices in New York,
Illinois, Ohio, the United Kingdom, Japan, Australia, China,
U.A.E., Poland, and Singapore. GCH uses a global digital trading
platform that can be accessed through the internet and mobile
devices. Its retail customers are composed of "self-directed
traders" who execute trades on their own behalf.
In 2018, these self-directed traders represented approximately
99.7% of GCH's retail trading volume. Trades are executed through
GCH's GAIN Trader proprietary trading platform. GCH has several
operating subsidies, including a Cayman Islands company named Gain
Global Market, Inc. ("GGMI").
The Plaintiff is a self-directed trader who has been using GCH's
GAIN Trader platform to trade derivatives of commodity futures
since 2017. When the Plaintiff opened his account through GCH's
website, forex.com, he had to fill in his personal information and
set up a username and password. The Plaintiff does not remember
signing any contract for opening the account, and the entire
process took him only a few minutes. To his understanding, GCH's
platform allows its users to buy and sell futures derivatives
offered by GCH -- it is not an agent which buys and sells futures
on behalf of the users.
The Plaintiff understands the deposit account he opened with GCH is
a trust account that entrusts GCH to manage and to debit or credit
Plaintiff according to his trading activities on the platform.
After opening his account, he received an email from
cn.support@forex.com informing him he had completed his account
opening but needed to deposit funds into his account before he
started trading. The owner of the New York bank account to which
the Trust Account money was wired was shown to have a physical
address at the same address. Since activating his account and
depositing the funds necessary to begin trading, the Plaintiff made
innumerable deposits and withdrawals from the Trust Account, all
under GCH's management.
One of the Plaintiff's major trading activities using GCH's
platform concerns a futures contract named "US_OIL" with a Chinese
name literally meaning U.S. Crude Oil. US_OIL trades crude oil
futures through commodity future exchanges in the United States,
which are primarily exchanges controlled by the Chicago Mercantile
Exchange Group. The US_OIL monthly contracts closely track the
monthly futures contracts of the U.S. crude oil benchmark -- West
Texas Intermediate ("WTI") -- which are administered by the CME
Group. On the Plaintiff's information and belief, the US_OIL
contracts are crude oil futures derivative products that GCH
offered through its trading platform, forex.com, at all relevant
times to non-U.S. residents including Chinese residents like him.
For the US_OIL trading, GCH provides its customers with real time
quotes from the CME Group for WTI and other oil-related futures in
the United States, and general research and guidance for the U.S.
oil market. By allowing the Plaintiff and the other customers to
buy and sell US_OIL as a derivative of the WTI futures of the CME
Group, the Plaintiff alleges GCH has been acting as his investment
dealer and advisor for U.S.-based investments.
The Plaintiff alleges the action arose from the negative pricing of
WTI futures. On April 3, 2020, the CME Group announced to its CME
Globex and Market Data customers that effective April 5, 2020,
futures and options including crude oil will be flagged as eligible
to trade at negative prices. Historically, negative pricing for
commodity trading has existed for many years, but the CME Group did
not allow it until April 5, 2020. On April 8, 2020, CME Group
published an advisory notice which stated, in relevant part, that
if major energy prices continued to fall towards zero in the
following months, CME Clearing had a tested plan to support the
possibility of negative options and enable markets to continue to
function normally. The notice specifically mentioned WTI Crude Oil
futures, RBOB Gasoline futures, and Heating Oil futures for
possible negative pricing.
On April 20, 2020, the day the WTI May 2020 contracts were set to
expire, their prices dropped into the negatives, reaching -$40.32
per barrel at its lowest point, and closing at -$37.63 per barrel.
However, GCH's US_OIL contract pricing remained in the positives,
with the lowest price shown as $0.01 per barrel and the closing
price at $0.05 per barrel. On the same day, approximately 22
minutes before the closing of U.S. crude oil trading, GCH's US_OIL
trading halted, thus dissociating the derivative from its
underlying WTI future contracts. On April 21, 2020, GCH's platform
showed the settlement pricing of US_OIL for the May contracts as
$0.01.
On April 23, 2020, the Plaintiff received an email from GCH
announcing that his US_OIL account had been assessed an
"adjustment" of -$143,032.00 due to the negative pricing of WTI's
May 2020 contract and that GCH had withdrawn that adjustment amount
from his Trust Account. After inquiring about the adjustment with
GCH's customer service, the Plaintiff was told the adjustment was a
decision made by GCH's trading platform management.
The Plaintiff complained several times to GCH and as part of this
complaint process, GCH sent the Plaintiff and its other customers a
contract which he allegedly executed by opening an account on GCH's
forex.com platform. According to the Plaintiff, this was the first
time Plaintiff had ever heard of such a contract. He then
complained to the National Futures Association ("NFA"), the
regulatory group for the futures trading industry based in Chicago
and New York, which stated that the US_OIL trading on GCH's
platform was conducted by GCH's subsidiary, GGMI. GCH is a member
of the NFA, but GGMI is not. The Plaintiff alleges this was the
first time he was made aware of GGMI being the market maker for
US_OIL and of "the artificial distinction between GCH and GGMI."
On July 24, 2020, the Plaintiff filed a three-count putative class
action Complaint alleging breach of fiduciary duty (Count I);
negligence (Count II); and consumer fraud under N.J. Stat. Ann.
Sections 56:8-1, et seq. (Count III).
On Oct. 2, 2020, GCH filed two Motions: (1) a Motion to Dismiss
pursuant to the doctrine of forum non conveniens; and (2) a Motion
to Dismiss for failure to state a claim pursuant to Federal Rule of
Civil Procedure 12(b)(6). On Nov. 6, 2020, the Plaintiff opposed
both Motions and on Nov. 24, 2020, GCH replied to both oppositions
Analysis
GCH asserts when the Plaintiff opened his trading accounts on
forex.com, he assented to the Customer Agreement, which contains a
forum selection clause. This forum selection clause provides the
courts of the Cayman Islands will have "exclusive jurisdiction"
over any claim arising under the Customer Agreement. GCH makes two
arguments in relation to the forum selection clause: (1) the forum
selection clause is enforceable and (2) the forum selection clause
applies to the action. Because of both these arguments, GCH
submits the doctrine of forum non conveniens justifies dismissal of
the action.
A. The Forum Selection Clause's Enforceability
GCH argues the forum selection clause applies to the action because
the Plaintiff had reasonable notice of the clause and affirmatively
assented to the Customer Agreement containing the clause. It also
argues the Plaintiff cannot demonstrate the forum selection clause
is unreasonable. The Plaintiff argues the Customer Agreement did
not provide adequate notice of the clause because it does not
qualify as enforceable clickwrap.
Judge Martinotti disagrees with the Plaintiff. He holds that the
Plaintiff testified he remembered seeing the statement with the
Customer Agreement hyperlinks and checking the box indicating his
assent to the terms of the Customer Agreement. Because the
Plaintiff affirmatively checked a box confirming acknowledgment of
the Customer Agreement and because the Customer Agreement was
conspicuously presented twice in blue hyperlinked text against a
background of black text, the application is an enforceable
clickwrap agreement.
Because the Judge found the format and layout of the application
provided the Plaintiff with reasonable notice of the Customer
Agreement, he holds that the Plaintiff's argument that GCH's
interface "buried" the terms of the Customer Agreement is
unavailing. To the extent the Plaintiff argues he "did not pay any
attention" to the Customer Agreement, the Court is unpersuaded, as
a failure to read the terms and conditions, and specifically, the
forum selection clause, does not render the forum selection clause
invalid or diminish its force and effect. Therefore, the forum
selection clause is not procedurally unconscionable.
Regarding substantive unconscionability, the Judge finds that the
"About Us" page the Plaintiff relies upon -- even the one provided
by his own translator -- lists GCH as subject to the regulatory
authority of the Cayman Islands Monetary Authority. The fact that
the Cayman Islands is listed as one of GCH's regulators forecloses
the Plaintiff's argument that the forum selection clause was so
unexpected as to render it substantively unconscionable.
B. The Application of the Forum Selection Clause
GCH argues the forum selection at issue applies to the action
because it covers all of the Plaintiff's claims. The Plaintiff
argues nearly all of the loss at issue in this case arises out of
his first account opened with GCH in 2017 ("Account I"), which is
not subject to the forum selection clause. Additionally, the
Plaintiff contends GCH has no standing to evoke the forum selection
clause under the second account Plaintiff opened in 2019 ("Account
II").
Judge Martinotti agrees with GCH. First, courts routinely find
forum selection clauses properly apply to claims arising out of
contractual relationships, like the Plaintiff's tort and contract
claims. Therefore, the forum selection clause applies to the
Plaintiff's claims. Second, the Plaintiff attempts to avoid
application of the forum selection clause by arguing the clause
cannot apply to Account I, the Judge holds that the account that
makes up "95% of loss at issue in the case." By manifesting assent
to the Customer Agreement when opening Account II in 2019, the
terms within the Customer Agreement applied to all accounts the
Plaintiff had with GCH at the time, including Account I. Lastly,
due to the Customer Agreement's explicit terms, it is foreseeable
that GCH, as GGMI's corporate parent, could enforce the forum
selection clause against the Plaintiff. Accordingly, the forum
selection clause applies to both Account I and II.
C. Forum Non Conveniens Analysis
Because the forum-selection clause was not unreasonable and applies
to the Plaintiff's claims, Judge Martinotti must analyze the
Atlantic Marine factors. First, he opines that GCH is amenable to
process in the Cayman Islands. Additionally, while the Plaintiff
repeatedly disputes his claims' connection to the Cayman Islands,
he does not argue his claims would not be cognizable in Cayman
courts. Because the Plaintiff has not demonstrated he would be
"deprived of any remedy" if required to litigate his claims in the
Cayman Islands, the Judge finds the Cayman Islands is an adequate
alternative forum.
Second, since Cayman law applies to the claims in the action,
having a trial of a diversity case in a forum that is at home with
the law that must govern also favors the Cayman Islands in the
diversity action. Therefore, the Plaintiff has not carried his
burden under either prong of the forum non conveniens inquiry.
Because the Plaintiff has not carried his burden, the Judge
dismisses the action for forum non conveniens and need not reach
the issue of whether the Complaint should be dismissed for failure
to state a claim under Rule 12(b)(6).
Conclusion
For the reasons he set forth, Judge Martinotti granted GCH's Motion
to Dismiss pursuant to the doctrine of forum non conveniens and
denied as moot its Motion to Dismiss for failure to state a claim.
A full-text copy of the Court's May 25, 2021 Opinion is available
at https://tinyurl.com/m8d632dk from Leagle.com.
GENERAL MOTORS: Court Certifies Idaho Class in Siqueiros Suit
-------------------------------------------------------------
In the case, RAUL SIQUEIROS, et al., Plaintiffs v. GENERAL MOTORS
LLC, Defendant (N.D. Cal.), Judge Edward M. Chen of the U.S.
District Court for the Northern District of California issued an
order:
(1) granting in part and denying in part GM's second motion
for partial summary judgment pursuant to Federal Rule of
Civil Procedure 56;
(2) granting in part and denying in part the Plaintiffs'
second motion for class certification pursuant to Federal
Rules of Civil Procedure 23(a) and (b)(3); and
(3) granting the Plaintiffs' motion for determination of
Manuel Fernandez's adequacy to serve as California class
representative pursuant to Federal Rule of Civil Procedure
23(a)(4).
The Plaintiffs allege that Defendant GM knowingly manufactured and
sold a car engine with inherent defects that caused excessive oil
consumption and engine damage. The alleged defects affect 2011 to
2014 model-year GM vehicles.
The Plaintiffs allege that GM's Gen IV Vortec 5300 LC9 engine
suffers from an "inherent" oil-consumption defect. The "primary
cause" of the alleged defect is the piston rings installed by GM.
These piston rings do not maintain sufficient tension to keep oil
in the crankcase, and the oil migration that occurs as a result
allows oil to "burn or accumulate as carbon buildup on the
combustion chamber's surfaces."
The Plaintiffs allege that the oil-consumption defect causes safety
problems in three ways: (1) oil consumption can lead to a lack of
adequate lubrication in the engine and dropping oil pressure levels
in vehicles; (2) the presence of excess oil in the combustion
chamber can cause spark plug fouling, which can cause engine
problems; and (3) when drivers experience these problems while
driving, they may be forced to pull over and stop alongside a road
or highway (or they may be stranded in such a location with an
inoperable vehicle), which places them in danger.
The Plaintiffs assert claims under various state
consumer-protection and fraud statutes on behalf of a nationwide
class as well as various statewide classes. They filed their class
action complaint on Dec. 19, 2016. They have since amended their
pleadings several times; the operative complaint is the seventh
amended complaint.
On April 23, 2020, the Court certified the following classes in the
three remaining bellwether states:
a. California Class: All current owners or lessees of a Class
Vehicle that was purchased or leased in the State of California.
The Court certifies the claims of the California Class for
violation of the Song-Beverly Consumer Warranty Act for breach of
implied warranty, Cal. Civ. Code Section 1790 et seq. The Court
appoints Raul Siqueiros as the class representatives for the
California Class.
b. North Carolina Class: All current owners or lessees of a
Class Vehicle that was purchased or leased in the State of North
Carolina. The Court certifies the claims of the North Carolina
Class for breach of implied warranty of merchantability. It
appoints William Davis, Jr. as the class representative for the
North Carolina Class.
c. Texas Class: All current owners or lessees of a Class
Vehicle that was purchased or leased in the State of Texas. The
Court certifies the claims of the Texas Class for breach of implied
warranty of merchantability. It appoints Rudy Sanchez as the class
representative for the Texas Class.
On Sept. 14, 2020, the Court granted the Plaintiff's motion for
permissive intervention, substituting Plaintiffs Manuel Fernandez
and Robert May for Mr. Siqueiros as California class
representatives.
On Nov. 6, 2020, the parties stipulated to amend the California
class as follows: All current owners or lessees of a Class Vehicle
that was who purchased or leased the vehicle in new condition in
the State of California. The Court certifies the claims of the
California Class for violation of the Song-Beverly Consumer
Warranty Act for breach of implied warranty, Cal. Civ. Code Section
1790, et seq.
That same day, the Plaintiffs filed their seventh amended
complaint, the operative complaint, as well as their second motion
to certify classes in Arkansas, Idaho, Pennsylvania, and Tennessee,
see Second Class Cert. They also filed a motion for determination
of Mr. Fernandez's adequacy to serve as California class
representative.
On Dec. 2, 2020, GM filed its second motion for partial summary
judgment.
Discussion
I. Partial Summary Judgment
Analysis
A. Consumer Fraud Claims
1. Arkansas: Arkansas Deceptive Trade Practices Act (ADTPA) (Count
8) and Fraudulent Omission (Count 11)
GM argues that the ADTPA and common law fraud claims in Arkansas
require "actual injury" beyond diminution in value. Indeed, in
Wallis v. Ford Motor Co., the Arkansas Supreme Court squarely held
that "common law fraud claims not resulting in injury are not
actionable" and that a plaintiff "does not state a cognizable cause
of action under ADTPA where the only injury complained of is a
diminution in value of the vehicle." Under this bright-line rule,
Arkansas Plaintiff Larry Wayne Goodwin's ADTPA and fraudulent
omission claims fail as a matter of law because he does not allege
any injury except diminution in value of his vehicle.
The Plaintiffs attempt to distinguish Wallis by pointing out that
Mr. Wallis did not allege that his vehicle malfunctioned in any
way, whereas Mr. Goodwin is alleging that his vehicle suffers from
the oil-consumption defect that the Court already determined to be
a significant safety defect. They also argue that GM's unique
knowledge of the oil-consumption defect gives rise to a duty to
disclose under Arkansas law.
Judge Chen holds that although the duty of disclosure arises where
one person is in position to have and to exercise influence over
another who reposes confidence in him whether a fiduciary
relationship in the strict sense of the term exists between them or
not, there was no special relationship -- fiduciary, contractual,
or confidential -- between Mr. Goodwin and GM. Accordingly, the
Judge grants GM's motion for summary judgment as to Counts 8 and 11
because fraud claims in Arkansas require allegations of injury
beyond the mere diminution in value of the allegedly defective
product and Mr. Goodwin was not in a special relationship with GM
that would require GM to disclose its knowledge of the alleged
oil-consumption defect.
2. Idaho: Idaho Consumer Protection Act (ICPA) (Count 13) and
Fraudulent Omission (Count 16)
GM challenges Idaho Plaintiff Gabriel Del Valle's standing to bring
an ICPA claim because he purchased his used vehicle from an
independent dealership and had no direct contact with GM. It also
challenges Mr. Del Valle's fraudulent omission claim by arguing
that oil consumption was not material to his decision to purchase
his vehicle.
Taking the testimony in the light most favorable to Mr. Del Valle,
Judge Chen finds that there is at least a genuine issue of material
fact as to whether the oil-consumption defect was material to Mr.
Del Valle's decision to purchase the Chevrolet Avalanche.
Accordingly, he denies GM's motion for summary judgment as to
Counts 13 and 16 because Mr. Del Valle had a contract with the
dealer that resulted in the purchase of his vehicle and there is a
question of material fact as to whether the oil-consumption defect
was material to his decision to purchase the vehicle.
3. Massachusetts: Massachusetts Regulation of Business Practices
for Consumer Protection Act (RBPCPA) (Count 18) and Fraudulent
Omission (Count 21)
According to GM, Massachusetts Plaintiff Scott Smith's claim under
the RBPCPA fails as a matter of law because he did not serve GM
with the required pre-suit demand letter. It also contends that
Mr. Smith's fraudulent omission claim fails because GM had no duty
to disclose the oil-consumption defect.
Judge Chen holds that the Court already concluded that GM was aware
of the oil-consumption problem with GenIV engines as early as the
end of 2008 or 2009, and that there is at least a genuine issue of
material fact as to whether GM actively concealed information about
the alleged defect to induce the Plaintiffs into purchasing their
vehicles. The fact that GM and Mr. Smith are not in a fiduciary
relationship is therefore not fatal to Mr. Smith's fraudulent
omission claim under Massachusetts law. Accordingly, the Judge
GM's motion for summary judgment as to Counts 18 and 21 because Mr.
Smith properly notified GM of his suit and GM had a duty to
disclose the oil-consumption defect.
4. Pennsylvania: Unfair Trade Practices and Consumer Protection Law
(UTPCPL) (Count 28) and Fraudulent Omission (Count 31)
GM contends that it had no duty to disclose the alleged
oil-consumption defect because Pennsylvania Plaintiff John Graziano
admits that he did not suffer any physical injury or harm as a
result of the defect. The Plaintiffs respond that, under
Pennsylvania law, "a duty to speak exists, in the context of a
business transaction with an ordinary non-business consumer, when
the seller has superior knowledge of a material fact that is
unavailable to the consumer."
Judge Chen holds that there is no evidence that the oil-consumption
defect in the Class Vehicles is "likely to cause significant bodily
harm," even though there is a possibility -- albeit quite remote --
that "when drivers experience this defect while driving, they may
be forced to pull over and stop alongside a road or highway (or
they may be stranded in such a location with an inoperable
vehicle), which places a person in danger." Put a different way,
the defect in Zwiercan II and III is much more likely to cause
significant bodily harm than the oil-consumption defect at issue.
Accordingly, the Judge grants GM's motion for summary judgment as
to Counts 28 and 31 because GM had no duty to disclose the
oil-consumption defect.
5. Tennessee: Tennessee Consumer Protection Act (TCPA) (Count 33)
and Fraudulent Omission (Count 36)
GM argues that the duty to disclose under Tennessee law is limited
to fiduciary relationships. Therefore, because Tennessee Plaintiff
Joshua Byrge does not allege that GM owed him a fiduciary duty, GM
argues his TCPA and fraudulent omission claims fail as a matter of
law under the rule in EPAC Techs., Inc. v. HarperCollins Christian
Publ'g, Inc., 398 F.Supp.3d 258, 270 (M.D. Tenn. 2019) (quoting
Walker v. First State Bank, 849 S.W.2d 337, 241 (Tenn. Ct. App.
1992)).
The Plaintiffs cite to Odom v. Oliver to respond that, even if GM
did not have a fiduciary relationship with Mr. Byrge, "contracting
parties have a duty to disclose material facts affecting the
essence of a contract's subject matter" in Tennessee. They also
argue that Mr. Byrge's TCPA and fraudulent concealment claims
survive, even if GM had no duty to disclose the oil-consumption
defect, because Tennessee courts also recognize an alternative
actionable type of concealment: a "trick or contrivance."
Judge Chen holds that the Plaintiffs submitted evidence that GM
issued Technical Service Bulletins (TSBs) in August 2010
instructing dealers to tell customers that a piston cleaning would
remedy the oil-consumption defect, even though GM knew that
cleaning was ineffective as early as February 2010. These TSBs
arguably constitute a "trick or contrivance" under Odom and
Continental Land, because they falsely represented to customers
that the oil-consumption defect was easily fixable.
Weighing evidence of the TSBs in the light most favorable to Mr.
Byrge, and drawing every inference in his favor, the Judge
concludes there is, at the very least, a genuine issue of material
fact as to whether Mr. Byrge's "damages were caused by his
reasonable reliance on" GM's suggestion that piston cleaning
remedied the oil-consumption defect. Summary judgment on Mr.
Byrge's TCPA and fraudulent omission claims is therefore
inappropriate. Accordingly, the Judge denies GM's motion for
summary judgment as to Counts 33 and 36 because, even though GM was
not in a fiduciary relationship with Mr. Byrge, there is a question
of material fact as to whether GM engaged in a trick or contrivance
to conceal the oil-consumption defect.
B. Economic Loss Doctrine
1. California: Fraudulent Omission (Count 5)
The Court granted summary judgment for GM on the fraudulent
omission claims of the then-California class representatives. The
Plaintiffs concede that Mr. Fernandez, the new California class
representative, likewise does not allege personal injury or
property damage to avoid the economic loss doctrine. Accordingly,
Judge Chen GM's motion for summary judgment as to Count 5 because
Mr. Fernandez does not allege personal injury or damage to
property.
2. Tennessee: Fraudulent Omission (Count 36)
It is undisputed that the Mr. Byrge does not claim personal injury
or property damage. Therefore, GM also contends that the economic
loss doctrine bars Mr. Byrge's fraudulent omission claim. GM only
cites to Milner v. Windward Petroleum Inc., where the Western
District of Tennessee held that "because Windward's actions did not
result in personal injury or property damage, Milner and Star
Service can adequately be compensated for their economic losses
through contract law."
There are two reasons Judge Chen declines to apply Milner. First,
he says the analysis in Milner is unpersuasive because the court
did not rely on any binding Tennessee law to conclude that the
economic law doctrine applies to fraud claims. Second, the fraud
at issue in Milner had to do with the performance of the contract
-- the plaintiffs alleged defendant delivered a mixture of several
motor oils even though the contract required defendant to deliver
pure Pennzoil motor oil. In the case, by contrast, the allegation
is that GM did not mention to Mr. Byrge the existence of the
oil-consumption defect before he purchased the vehicle,
fraudulently inducing him into purchasing his vehicle.
Accordingly, the Judge denies GM's motion for summary judgment as
to Count 36 because GM has not established as a matter of law that
the economic loss doctrine applies to fraudulent omission claims in
Tennessee.
C. Unjust Enrichment Claims Barred By Express Contract: California:
Unjust Enrichment (Count 6); Arkansas: Unjust Enrichment (Count
12); Idaho: Unjust Enrichment (Count 17); Massachusetts: Unjust
Enrichment (Count 22); Pennsylvania: Unjust Enrichment (Count 32);
Tennessee: Unjust Enrichment (Count 37)
The Court already granted GM summary judgment on the Plaintiffs'
unjust enrichment claims in the bellwether states because numerous
cases indicate that the mere existence of a contract that defines
the parties' rights bars a claim for unjust enrichment. The
Plaintiffs argue that the same is not true for their unjust
enrichment claims under Arkansas, Idaho, Massachusetts, and
Tennessee law.
The Plaintiffs' arguments are not persuasive, Judge Chen finds. He
holds that Mr. Del Valle's and Mr. Smith's unjust enrichment claims
are not barred by the existence of their contract with GM because
that contract does not cover the oil-consumption defect, which is
the basis of their unjust enrichment claim. Even if Mr. Del
Valle's and Mr. Smith's unjust enrichments claims are not barred by
their contract with GM, however, they are barred because Plaintiffs
have adequate legal remedies in their consumer protection,
fraudulent omission, and warranty claims.
The Plaintiffs have not presented persuasive authority to the
contrary. Accordingly, the Judge grants GM's motion for summary
judgment as to Counts 6, 12, 17, 22, 32, and 37 because unjust
enrichment claims are barred by either the parties' express
contract or the Plaintiffs' ability to pursue other adequate legal
remedies.
D. Implied Warranty Claims
1. No Privity
GM first challenges the validity of the Idaho and Tennessee
Plaintiffs' implied warranty claims on the grounds that they lack
privity with GM. The parties do not dispute that Messrs. D el Valle
and Byrge are not in privity with GM because they purchased their
vehicles from dealerships that were not associated with GM. The
Plaintiffs instead argue that, as a matter of law, implied warranty
claims in Idaho and Tennessee do not require plaintiffs to be in
privity with the defendant.
Judge Chen holds that grants GM's motion for summary judgment as to
Count 15 because Mr. Del Valle is not in privity with GM. Mr. Del
Valle's implied warranty claim fails as a matter of law because he
is not in privity with GM, and the only prejudice he would suffer
if the court enforces this privity requirement is the inability to
recover for the diminished value of his vehicle.
Judge Chen also grants GM's motion for summary judgment as to Count
35 because Mr. Byrge is not in privity with GM. Under section
29-34-104 and the common law that precedes it, Mr. Byrge's lack of
privity with GM is fatal to his implied warranty claim because he
is not alleging property damage or personal injury as a result of
the oil-consumption defect.
2. No Pre-Suit Notice
GM also contends that Mr. Graziano's failure to provide GM pre-suit
notice is fatal to his implied warranty claims. The Plaintiffs
argue that Mr. Graziano notified GM of his implied warranty claims
through filing of the suit.
In Pennsylvania the filing of a complaint has been held to satisfy
the notice requirement for a breach of warranty claim. GM does not
cite any Pennsylvania appellate court overruling Precision Towers.
Mr. Graziano's filing of the complaint is therefore sufficient
under Pennsylvania law to notify GM of his implied warranty claim.
Accordingly, Judge Chen denies GM's motion for summary judgment as
to Count 30 because GM has not established as a matter of law that
Mr. Graziano did not properly notify GM of his implied warranty
claims.
3. No Evidence of Unmerchantability
GM finally challenges the validity of the Plaintiffs claims for
breach of the implied warranty of merchantability on the grounds
that there is no evidence that Plaintiffs' vehicles are
unmerchantable.
As to California's Implied Warranty (Count 4), GM recycles its
argument that Mr. Fernandez's implied warranty claim fails because
he drove his car for years and tens of thousands of miles before
experiencing any problems related to the oil-consumption defect.
The Court squarely rejected this argument in its first summary
judgment order because "safety-related defects which may be slow to
emerge may nonetheless furnish a basis for a breach of implied
warranty claim" under California law. GM does not offer any new
evidence or cite to any legal authority to disturb this prior
ruling. Thus, the fact that Mr. Fernandez did not experience any
issue related to excessive oil consumption until five years after
purchasing his vehicle does not foreclose his implied warranty
claim as a matter of law. Accordingly, the Judge denies GM's
motion for summary judgment as to Count 4.
With respect to Massachusetts' Implied Warranty (Count 20), GM
argues that Mr. Smith's breach of implied warranty claim fails
because he drove his car for more than six years and 110,000 miles
without experiencing any problems related to the oil-consumption
defect.
Viewing all of the expert evidence in the light most favorable to
Mr. Smith, and drawing all justifiable inferences in his favor, the
Judge concludes that GM has failed to establish as a matter of law
that Mr. Smith's vehicle was not defective at the time of sale.
Accordingly, he denies GM's motion for summary judgment as to Count
20 because there is a genuine issue of material fact as to whether
Mr. Smith's vehicle was defective at the time of sale.
Last, as to Pennsylvania's Implied Warranty (Count 30), GM relies
on Hornberger v. Gen. Motors Corp. for the proposition that, under
Pennsylvania law, "where a car can provide safe, reliable
transportation, it is generally considered merchantable."
According to GM, Mr. Graziano's vehicle was merchantable because he
drove it for 6,000 miles before noticing that the engine was
overconsuming oil, and because he does not allege that his engine
ever stalled or failed.
The Judge holds that Mr. Graziano also alleges that the
oil-consumption defect existed at the time the vehicle was
manufactured and that it caused his vehicle to suffer from sluggish
performance due to oil-consumption-induced spark plug fouling.
Therefore, summary judgment on his implied warranty claim is
inappropriate. Accordingly, the Judge denies GM's motion for
summary judgment as to Count 30 because there is a genuine issue of
material fact as to whether Mr. Graziano's vehicle was
merchantable.
E. Statute of Limitations: Pennsylvania: Implied Warranty (Count
30)6
The statute of limitations for an implied warranty claim in
Pennsylvania is four years. GM contends that Mr. Graziano's implied
warranty claim is time barred, even though he first noticed that
his Silverado was over-consuming oil in 2012, because he has not
alleged "an independent affirmative act of concealment" which
caused him "to relax his vigilance or deviate from his right of
inquiry through fraud or concealment."
The Plaintiffs respond that Mr. Graziano's implied warranty claim
is timely for two reasons. First, they contend that Mr. Graziano
did not discover the excessive oil consumption caused by the
alleged defect until approximately 2016, shortly before he joined
the action. Second, they also argue that GM's fraudulent
concealment tolls the limitations period for Mr. Graziano's
claims.
Judge Chen denies GM's motion for summary judgment as to Count 30
because that claim is timely. He finds that Mr. Graziano's claims
are timely under Pennsylvania's discovery rule because, despite
reasonable diligence, he was unable to discover the alleged oil
consumption was caused by a design defect until 2016, shortly
before he joined the action. Also, the statute of limitations for
Mr. Graziano's claims is tolled until he discovered the
oil-consumption defect in 2016.
F. Individual MMWA Claims (1)
Because the Plaintiffs' individual MMWA claims rely on their
underlying state-law warranty claims, the parties' MMWA arguments
focus exclusively on whether the Court should dispose of those
state-law warranty claims. In other words, the MMWA claims survive
or fail with the Court's decisions regarding the corresponding
implied warranty claims, discussed. Accordingly, Judge Chen grants
summary judgment to GM on the individual MMWA claims of the Idaho
and Tennessee Plaintiffs; and denies summary judgment to GM on the
individual MMWA claims of the California, Massachusetts, and
Pennsylvania Plaintiffs.
Conclusion as to Summary Judgment
In summary, Judge Chen grants summary judgment to GM on all but the
following nine state-law claims: California: (1) implied warranty
claim (Count 4); Idaho: (2) ICPA claim (Count 13), and (3)
fraudulent omission claim (Count 16); Massachusetts: (4) RBPCPA
claim (Count 18), (5) implied warranty claim (Count 20), and (6)
fraudulent omission claim (Count 21); Pennsylvania: (7) implied
warranty claim (Count 30); and Tennessee: (8) TCPA claim (Count
33), and (9) fraudulent omission claim (Count 36).
The Judge also summary judgment to GM on the individual MMWA claims
of the Idaho and Tennessee Plaintiffs; and denies summary judgment
to GM on the individual MMWA claims of the California,
Massachusetts, and Pennsylvania Plaintiffs.
II. Motion for Class Certification
The Plaintiffs seek to certify the following classes as part of
Phase II of their class certification process:
1. Arkansas Class: All current owners or lessees of a Class
Vehicle that was purchased or leased in the State of Arkansas. The
Arkansas Class seeks class certification of claims for: (a)
violation of the Arkansas Deceptive Trade Practices Act, Ark. Code
Ann. Sections 4-88-101, et seq; (b) breach of implied warranty of
merchantability; (c) fraudulent omission; and (d) unjust
enrichment. The Plaintiffs move for the appointment of Larry
Goodwin as the class representative for the Arkansas Class.
2. Idaho Class: All current owners or lessees of a Class
Vehicle that was purchased or leased in the State of Idaho. The
Idaho Class seeks class certification of claims for: (a) violation
of the Idaho Consumer Protection Act, Idaho Code Ann. Sections
48-601 et seq.; (b) breach of implied of merchantability; (c)
fraudulent omission; and (d) unjust enrichment. The Plaintiffs
move for the appointment of Gabriel Del Valle as the class
representative for the Idaho Class.
3. Pennsylvania Class: All current owners or lessees of a
Class Vehicle that was purchased or leased in the State of
Pennsylvania. The Pennsylvania Class seeks class certification of
claims for: (a) violation of the Pennsylvania Unfair Trade
Practices & Consumer Protection Law, 73 Pa. Cons. Stat. Ann.
Section 201-1, et seq.; (b) breach of implied warranty of
merchantability; (c) fraudulent omission; and (d) unjust
enrichment. The Plaintiffs move for the appointment of John
Graziano as the class representative for the Pennsylvania Class.
4. Tennessee Class: All current owners or lessees of a Class
Vehicle that was purchased or leased in the State of Tennessee.
The Tennessee Class seeks class certification of claims for: (a)
breach of implied warranty of merchantability; (b) fraudulent
omission; and (c) unjust enrichment. They move for the appointment
of Joshua Byrge as the class representative for the Tennessee
Class.
However, the Court granted summary judgment to GM on all but four
of the claims listed in these proposed classes, including all the
claims in the proposed Arkansas Class. Therefore, Judge Chen only
considers whether it is appropriate to certify a class as to the
remaining four claims that survive summary judgment.
The Judge concludes that only Mr. Del Valle's ICPA claim is
sufficiently susceptible to common answers to merit class
certification. He therefore certifies the Idaho Class defined as
"All current owners or lessees of a Class Vehicle that was
purchased or leased in the State of Idaho." The Judge certifies
the claims of the Idaho Class for violation of the Idaho Consumer
Protection Act, Idaho Code Ann. Sections 48-601-48-619. He
appoints Gabriel Del Valle as the class representative for the
Idaho Class.
III. Motion for Determination of Mr. Fernandez's Adequacy
GM makes two unavailing arguments as to why Mr. Fernandez is not an
adequate class member. First, GM recycles its argument that Mr.
Fernandez's vehicle is merchantable because he has not experienced
any engine trouble or other safety issue, and because he drove the
vehicle for 78,000 miles before experiencing the effects of the
oil-consumption defect. Judge Chen again rejects this argument
for the reasons stated, namely, because "safety-related defects
which may be slow to emerge may nonetheless furnish a basis for a
breach of implied warranty claim" under California law.
Second, and strangely, GM argues that Mr. Fernandez cannot
adequately establish standing for the putative California class
members whose claims are barred by the four-year statute of
limitations because his claims are timely. Again, this argument is
foreclosed by Ramirez and longstanding Ninth Circuit precedent that
"only the representative plaintiff need allege standing at the
motion to dismiss and class certification stages." Therefore, Mr.
Fernandez is adequate precisely because he has standing to sue.
Accordingly, the Judge grants the Plaintiffs' motion to determine
that Mr. Fernandez is an adequate representative for the California
class.
Order
For the foregoing reasons, Judge Chen grants in part and denies in
part GM's motion for partial summary judgment.
Judge Chen also grants in part the Plaintiffs' second motion for
class certification. Certification is with the following terms:
Class Vehicles are 2011-2014 Chevrolet Avalanches; 2011-2014
Chevrolet Silverados; 2011-2014 Chevrolet Suburbans; 2011-2014
Chevrolet Tahoes; 2011-2014 GMC Sierras; 2011-2014 GMC Yukons; and
the 2011-2014 GMC Yukon XLs with LC9 engines (whether purchased new
or used) and manufactured on or after Feb. 10, 2011 (the date upon
which the redesigned rocker cover was incorporated into vehicle
production). Any vehicle that has already received adequate piston
replacement (i.e. piston replacement in which the new pistons were
not merely new versions of the same defective pistons) is excluded
from the class.
The Idaho Class is defined as follows: All current owners or
lessees of a Class Vehicle that was purchased or leased in the
State of Idaho. The Court certifies the claims of the Idaho Class
for violation of the Idaho Consumer Protection Act, Idaho Code Ann.
Sections 48-601-48-619. The Court appoints Gabriel Del Valle as the
class representative for the Idaho Class.
Finally, the Judge grants the Plaintiffs' motion to determine that
Mr. Fernandez is an adequate representative for the California
class.
The Order disposes of Docket Nos. 287, 289, and 291.
A full-text copy of the Court's May 25, 2021 Order is available at
https://tinyurl.com/rf24kcvm from Leagle.com.
GENIUS BRANDS: Hearing on Bid to Nix Class Suit Set for July 5
--------------------------------------------------------------
Genius Brands International, Inc. said in its Form 10-Q Report
filed with the Securities and Exchange Commission on May 18, 2021,
for the quarterly period ended March 31, 2021, that the briefing on
the motion to dismiss the case, In re Genius Brands International,
Inc. Securities Litigation, Master File No. 2:20-cv-07457 DSF
(RAOx), by court-ordered schedule, is expected to extend into June
2021, with a hearing currently scheduled for July 5, 2021.
On August 18, 2020, the Company and its Chief Executive Officer
Andy Heyward were named as defendants in a putative class action
lawsuit filed in the U.S. District Court for the Central District
of California and styled Salvador Verdin v. Genius Brands
International, Inc. and Andy Heyward, Case No. 2:20-cv-07457 DSF
(RAOx).
The company was later served with a similar lawsuit Sumit Garg v.
Genius Brands International, Inc. and Andy Heyward, Case No.
2:20-cv-07764.
Both suits allege generally that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 by making
materially false or misleading statement regarding the Company's
business and business prospects, artificially inflating the
Company's stock price during an alleged class period running from
March 11 through July 5, 2020.
Plaintiffs seek unspecified damages on behalf of the alleged class
of persons who invested in our common stock during the alleged
class period.
The securities suits have been consolidated into a single
proceeding before Judge Dale Fischer in the U.S. District Court for
the Central District of California. The proceeding will now be
known as, styled In re Genius Brands International, Inc. Securities
Litigation, Master File No. 2:20-cv-07457 DSF (RAOx).
The Lead Plaintiffs filed an amended complaint in the consolidated
actions on February 1, 2021.
While asserting the same legal claims and class period, the amended
complaint added a new defendant, Chief Financial Officer Robert
Denton.
On March 17, 2021, the defendants filed a motion to dismiss the
amended complaint.
Briefing of that motion is, by court-ordered schedule, expected to
extend into June 2021, with a hearing currently scheduled for July
5, 2021.
Pending resolution of the motion to dismiss, neither discovery nor
other substantive proceedings are expected.
Genius Brands International, Inc., is a content and brand
management company. The Company provides entertaining and enriching
content and products with a purpose for toddlers to tweens. The
Company produces original content and licenses the rights to that
content to a range of partners. The company is based in Beverly
Hills California.
GGP INC: Court Dismisses Third Amended Stockholder Class Suit
-------------------------------------------------------------
In the case, IN RE GGP, INC. STOCKHOLDER LITIGATION, Consolidated
C.A. No. 2018-0267-JRS (Del. Ch.), Judge Joseph R. Slights, III, of
the Court of Chancery of Delaware granted the Defendants' Motion to
Dismiss the Plaintiffs' Consolidated Verified Third Amended
Stockholder Class Action Complaint.
In the Delaware post-closing shareholder litigation, over the past
seven years, a rhythm has emerged in the assertion of claims and
defenses as courts have clarified and refined the application of
standards for reviewing fiduciary conduct. In hopes of securing
more rigorous judicial scrutiny of fiduciary conduct, stockholders
invoke the sounds of minority blockholders who act as if they are
controlling stockholders, fiduciary decisionmakers who are overcome
by allegiances to the controller, and stockholders who are coerced
to sell their shares while starved of accurate and complete
information. In hopes of securing more judicial deference to
fiduciary decision making, the Defendants invoke the sounds of
passive minority blockholders and presumptively disinterested,
independent (and often exculpated) fiduciaries who have faithfully
served fully informed, uncoerced stockholders. When laid down on
the same track, the sounds can be perceived as noise. But to the
accustomed ear, there is rhythm.
On Aug. 28, 2018, GGP entered into a merger with Defendants,
Brookfield Property Partners, L.P. ("BPY") and its affiliates.
Prior to the Transaction, Brookfield owned 35.3% of GGP's shares.
As a result of the Transaction, Brookfield acquired all of the
Company's shares it did not own in exchange for a combination of
cash and either of two forms of equity, representing 61% and 39% of
the consideration, respectively.
Structurally, the deal consideration would be paid in two parts:
(1) a pre-closing dividend of cash and shares, amounting to about
98.5% of the deal consideration (the "Pre-Closing Dividend"), and
(2) $0.312 per share in cash at closing, representing the balance
of the deal consideration, capped at $200 million.
The Transaction was the culmination of negotiations that began in
2017, when Brookfield extended an offer to GGP's board of directors
to acquire the balance of the Company's outstanding shares. As if
striking a well-worn key on the piano, Brookfield asked GGP to
appoint a committee of independent directors to evaluate the offer
and negotiate the Transaction, and clarified that any final deal
would "be subject to customary approvals including approval of a
majority of the Company's stockholders not affiliated with
Brookfield." The Board did not miss a beat and appointed a special
committee the next day. At the same time, the three Board members
affiliated with Brookfield, each Defendants in the case, formally
recused themselves from the process.
From Nov. 15, 2017 through March 26, 2018, the date the Merger
Agreement was executed, the Special Committee held over 30 meetings
to consider Brookfield's various proposals while also evaluating
GGP's strategic options. On June 27, 2018, GGP and Brookfield
jointly filed a Proxy soliciting a "yes" vote on the Transaction
from GGP's stockholders unaffiliated with Brookfield. Stockholders
resoundingly (by vote of 94% of stockholders unaffiliated with
Brookfield) approved.
With the benefit of books and records obtained in an action brought
under 8 Del. C. Section 220, the Plaintiffs, three stockholders of
GGP, filed the action alleging the Transaction was the product of
actionable breaches of fiduciary duties by GGP's Special Committee,
its Board and its allegedly controlling stockholder, Brookfield.
According to the Plaintiffs, if the Court finds they have not well
pled that Brookfield was GGP's controlling stockholder, then
Brookfield is liable as an aider and abettor of the fiduciary duty
breaches committed by GGP's conflicted Board, a majority of whom
were beholden to Brookfield.
The Plaintiffs' allegations, and the defenses to them, summon the
familiar rhythm of contemporary stockholder post-closing litigation
in standard 4/4 time. In motions to dismiss the Complaint, the
Defendants answer the Plaintiffs' refrain by arguing Brookfield's
controller status is not well pled. Brookfield was a minority
blockholder who neither controlled GGP generally nor with respect
to the Transaction specifically.
If the Court agrees it is not reasonably conceivable that
Brookfield was GGP's controlling stockholder, then, say the
Defendants, the defendant fiduciaries are entitled to business
judgment deference because an overwhelming majority of GGP
stockholders approved the Transaction in an informed, uncoerced
vote and thereby "cleansed" any breaches of fiduciary duty. If the
Court disagrees, the Defendants say all fiduciaries are nonetheless
entitled to business judgment deference because the controller's
influence was neutralized by a well-functioning, independent
special committee of the Board and the informed, uncoerced approval
of the Transaction by a majority vote of GGP's minority
stockholders. And the beat goes on.
Following the announcement of the Merger Agreement, two putative
class actions were filed and subsequently consolidated. The
Plaintiffs thereafter moved to expedite and for a preliminary
injunction based principally on alleged disclosure violations.
After GGP responded to the Plaintiffs' concerns by filing its June
11, 2018 Amendment No. 1 to the preliminary proxy, the Plaintiffs
withdrew their motions.
After the definitive Proxy was issued and the Transaction
consummated, the Plaintiffs filed a Consolidated Verified Second
Amended Shareholder Class Action Complaint on Jan. 7, 2019. On
April 6, 2019, before the Plaintiffs responded to the Defendants'
opening briefs in support of their motions to dismiss, the Court
granted Plaintiff Kosinski's motion to intervene in the action for
the limited purpose of staying the action while he pursued GGP
books and records under 8 Del. C. Section 220.
On Aug. 28, 2019, then-Vice Chancellor McCormick ruled that
Kosinski had "demonstrated proper purposes" for the inspection of
GGP's books and records and directed the parties to meet and confer
regarding the scope of the inspection. GGP produced documents
including Board and Special Committee meeting minutes and
materials, director questionnaires, as well as emails.
On Feb. 10, 2020, the Court entered final judgment in the 220
Action. After motion practice and responsive amendments under
Chancery Rule 15(aaa), the Plaintiffs filed the operative Complaint
on May 4, 2020, stating six causes of action.
Count I alleges breach of fiduciary duty against BPY in its
capacity as controlling stockholder of GGP. Count II alleges
breach of the fiduciary duty of loyalty against the Director
Defendants for approving the Transaction. Count III alleges breach
of the fiduciary duty of loyalty against all the Defendants for
failing to provide GGP stockholders with a fair summary of their
appraisal rights and disclosing all material information relevant
to GGP stockholders when deciding whether to vote in favor of the
Transaction or pursue appraisal. Count IV alleges breach of
fiduciary duty against Mathrani, BPY and the Brookfield Defendants
for each party's role in the negotiation of Mathrani's
post-Transaction employment contract, thereby facilitating
Brookfield's control over Mathrani and allowing him to be
objectively compromised as he participated in negotiating the
Transaction. Count V alleges unjust enrichment against Brookfield
as the party on the other side of an allegedly unfair Transaction.
Finally, Count VI alleges aiding and abetting breaches of fiduciary
duties in the alternative against BPY if it is deemed not to be
GGP's controlling stockholder.
Four groups of Defendants filed separate opening briefs in support
of motions to dismiss the Complaint on July 6, 2020. The
Plaintiffs filed their consolidated answering brief on Sept. 4,
2020, to which the Defendants replied on Oct.19, 2020. Oral
argument was held on Nov. 16, 2020. After a request for
supplemental briefing on Dec. 31, 2020, the matter was deemed
submitted for decision on Feb. 18, 2021.
Analysis
Chancery Rule 12(b)(6) requires dismissal of a complaint if the
plaintiff could not recover under "any reasonably conceivable set
of circumstances susceptible of proof" based on the complaint's
well-pled facts. While the Court need not accept conclusory
allegations or "every strained interpretation of the allegations
proposed by plaintiff," it "must accept as true all well-pled
allegations in the complaint and draw all reasonable inferences
from those facts in plaintiff's favor."
A. Brookfield is Not a Controller
The Plaintiffs argue they have well pled that Brookfield controlled
the Board both with respect to the Transaction and GGP's business
affairs more generally. They have attempted to set a stage for
their breach of fiduciary duty claims that has Brookfield, despite
its minority ownership stake, playing the role of GGP's controlling
stockholder by virtue of its domination over GGP's fiduciaries in
the negotiation and approval of the Transaction. The gambit, of
course, is intended to ratchet up the scrutiny under which the
conduct of GGP's fiduciaries will be measured.
Even if Brookfield's control over GGP cannot be surmised from the
Transaction itself, the Plaintiffs maintain they have alleged facts
sufficient to support a reasonable inference that Brookfield
controlled GGP generally.
Judge Slights determined that Brookfield was not a controlling
shareholder of GGP at the time of the Transaction. That finding
has two consequences. First, neither Brookfield nor any
Brookfield-affiliated Defendant owed fiduciary duties to GGP's
shareholders, and so Count I alleging breach of fiduciary duty
against BPY must be dismissed. Counts III and IV must also be
dismissed as to BPY, as they are both predicated on the existence
of BPY's fiduciary duties. Second, Corwin applies because the
Transaction did not involve a conflicted controller. The
Plaintiffs planned for this contingency, arguing that, even under
Corwin, the Transaction cannot be blessed on the pleadings because
stockholder approval was uninformed and coerced.
B. Stockholder Approval Was Fully Informed and Uncoerced
The Delaware Supreme Court affirmed in Corwin v. KKR Fin. Hldgs.
LLC, 125 A.3d 304 (Del. 2015) that, when a transaction not subject
to the entire fairness standard is approved by a fully informed,
uncoerced vote of the disinterested stockholders, the business
judgment rule applies. Thus, in the absence of a controller, to
avoid the application of the business judgment presumption under
Corwin, a plaintiff must well-plead that the stockholder vote
approving a transaction was either coerced or uninformed.
Judge Slights opines that the Plaintiffs have failed to invoke
either basis to avoid Corwin. The Judge is satisfied the
Plaintiffs have failed to well-plead that the stockholder vote was
uninformed or coerced. The legal effect of a fully-informed
stockholder vote of a transaction with a non-controlling
stockholder is that the business judgment rule applies and
insulates the transaction from all attacks other than on the
grounds of waste, even if a majority of the board approving the
transaction was not disinterested or independent. As the Supreme
Court explained, the "long-standing policy" of Delaware law has
been to avoid the uncertainties and cost of judicial
second-guessing when the disinterested stockholders have had the
free and informed chance to decide on the economic merits of a
transaction for themselves.
No waste has been pled. Accordingly, Counts II (breach of
fiduciary duty of loyalty against Director Defendants) and IV (bad
faith and breach of the duty of loyalty concerning Mathrani's
Employment Agreement against Mathrani, Brookfield and the other
Brookfield Defendants) are dismissed.
C. Aiding and Abetting
In Count VI, the Plaintiffs plead in the alternative that, even if
the Court finds Brookfield was not a controller, they have stated a
viable claim that Brookfield aided and abetted the Special
Committee's breach of fiduciary duties.
To state a claim of aiding and abetting, Judge Slight notes that a
plaintiff must allege: (1) the existence of a fiduciary
relationship, (2) a breach of the fiduciary's duty, (3) knowing
participation in that breach by the defendants, and (4) damages
proximately caused by the breach. Accordingly, a well-pled claim
of breach of fiduciary duty is a predicate to stating an aiding and
abetting claim. Having found the Plaintiffs have failed to state a
claim for breach of fiduciary duty against the Special Committee,
it follows Count VI must also be dismissed.
D. No Unjust Enrichment
In Count V, the Plaintiffs allege that Brookfield was unjustly
enriched by the Transaction. To obtain restitution for unjust
enrichment, the Plaintiffs must show that the Defendants were
unjustly enriched, that they secured a benefit, and that it would
be unconscionable to allow them to retain that benefit. The
Plaintiffs' legal theory is that Brookfield was unjustly enriched
because the Transaction is the product of a misleading Proxy and
conflicts among members of the Audit Committee and Special
Committee.
Because Judge Slights has determined the Plaintiffs have not
adequately pled the Proxy was misleading or that the Audit or
Special Committee functioned ineffectively, he holds that their
claim that Brookfield has been unjustly enriched fails as a matter
of law.
Conclusion
For the foregoing reasons, Judge Slights concludes that he cannot
reasonably infer from the Complaint that Brookfield was GGP's
controlling stockholder at the time of the Transaction, so Corwin,
not MFW, is the appropriate paradigm under which to determine the
applicable standard of review. He has also determined that the
Complaint does not well plead that the stockholder vote approving
the Transaction was either uninformed or coerced. The upshot is
that the business judgment rule is the operative standard of
review.
Having determined that GGP stockholders were informed when they
voted to approve the Transaction, including with respect to their
right to seek statutory appraisal, the Judge holds that the
Plaintiffs' claim for quasi-appraisal fails. Having declined to
plead waste, the Plaintiffs' claims for breach of fiduciary duty
against Brookfield, the Board and Mathrani also fail. And, from
all of this, it follows that the Plaintiffs' claim in the
alternative against Brookfield for aiding and abetting fails for
lack of a predicate breach of fiduciary duty. Finally, because the
Transaction was duly executed, the Plaintiffs' unjust enrichment
claim against Brookfield fails.
The Defendants' motions to dismiss, therefore, must be granted in
full.
A full-text copy of the Court's May 25, 2021 Memorandumm Opinion is
available at https://tinyurl.com/2v45a4xx from Leagle.com.
Ronald A. Brown Jr., Esquire -- rabrown@prickett.com -- Stephen D.
Dargitz, Esquire, J. Clayton Athey, Esquire -- jcathey@prickett.com
-- Marcus E. Montejo Esquire, and Samuel L. Closic Esquire --
slclosic@prickett.com -- of Prickett Jones & Elliott, P.A., in
Wilmington, Delaware; Carl L. Stine Esquire --
cstine@wolfpopper.com -- and Adam J. Blander Esquire --
ablander@wolfpopper.com -- of Wolf Popper LLP, in New York City;
and Frank P. DiPrima Esquire -- diprimalaw@aol.com -- of Law
Office of Frank DiPrima, P.A., in Morristown, New Jersey, Co-Lead
Attorneys for Plaintiffs.
Seth D. Rigrodsky Esquire -- sdr@rl-legal.com -- and Gina M. Serra
Esquire, of Rigrodsky Law, P.A., Wilmington, Delaware and Aaron
Brody Esquire -- abrody@ssbny.com -- and Patrick Slyne Esquire, of
Stull, Stull & Brody, in New York City, Attorneys for Plaintiffs'
Executive Committee.
Kevin G. Abrams, Esquire -- abrams@abramsbayliss.com -- John M.
Seaman Esquire -- Seaman@AbramsBayliss.com -- and Matthew L.
Miller, Esquire -- Miller@AbramsBayliss.com -- of Abrams & Bayliss
LLP, Wilmington, Delaware and John A. Neuwirth, Esquire --
john.neuwirth@weil.com -- Evert J. Christensen, Jr., Esquire --
evert.christensen@weil.com -- Seth Goodchild Esquire
seth.goodchild@weil.com -- and Matthew S. Connors Esquire --
matthew.connors@weil.com -- of Weil, Gotshal & Manges LLP, in New
York City, Attorneys for Defendant Brookfield Property Partners
L.P.
David J. Teklits, Esquire -- dteklits@morrisnichols.com -- and
Thomas P. Will Esquire -- twill@morrisnichols.com -- of Morris,
Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, Attorneys
for Defendants Richard Clark, Bruce Flatt and Brian W. Kingston.
Raymond J. DiCamillo, Esquire -- dicamillo@rlf.com -- and Susan M.
Hannigan Esquire -- twill@morrisnichols.com -- of Richards, Layton
& Finger, P.A., Wilmington, Delaware and Brian T. Frawley Esquire,
and Y. Carson Zhou Esquire, of Sullivan & Cromwell LLP, in New York
City, Attorneys for Defendant Sandeep Mathrani.
Peter J. Walsh, Jr., Esquire -- pwalsh@potteranderson.com -- Berton
W. Ashman Jr., Esquire -- bashman@potteranderson.com -- and Jaclyn
C. Levy Esquire -- jlevy@potteranderson.com -- of Potter Anderson &
Corroon LLP, Wilmington, Delaware and Peter E. Kazanoff, Esquire,
Michael J. Garvey, Esquire, Sara A. Ricciardi Esquire, and Eamonn
W. Campbell Esquire, of Simpson Thacher & Bartlett LLP, in New York
City, Attorneys for Defendants Mary Lou Fiala, Janice R. Fukakusa,
John K. Haley, Daniel B. Hurwitz and Christina M. Lofgren.
GREG GOSSETT: Non-Party Bid for Reconsideration in Ross Suit Nixed
------------------------------------------------------------------
In the class action lawsuit captioned as DEMETRIUS ROSS, on behalf
of himself and all others similarly situated, v. GREG GOSSETT, et
al., Case No. 3:15-cv-00309-SMY (S.D. Ill.), the Hon. Judge Staci
M. Yandle entered an order denying the non-party Dennis L. Bailey's
Motion for extension of time and motion for reconsideration.
The Court said, "Bailey previously sought to intervene in this
case. However, his request was denied because his claim alleging a
deprivation of property while he was by the Illinois Department of
Corrections is unrelated to this class action lawsuit. In his
motion for reconsideration, Bailey now asserts that he suffered the
same injuries during the same institutional shakedowns that are at
the heart of this case."
Pursuant to Federal Rule of Civil Procedure 24(b)(1)(B), "on timely
motion, the court may permit anyone to intervene who has a claim or
defense that shares with the main action a common question of law
or fact." Even if Bailey does have similar claims, as a purported
class member, he may intervene in this lawsuit and protect his
individual interests only if class certification is denied. Class
certification was granted on March 26, 2020; accordingly, Bailey's
motions are denied, the Court adds.
A copy of the Court's order dated May 19, 2021 is available from
PacerMonitor.com at https://bit.ly/34CD1Tv at no extra charge.[CC]
GX ACQUISITION: Celularity Merger Related Suits Underway
--------------------------------------------------------
GX Acquisition Corp. said in its Form 10-K/A report filed with the
U.S. Securities and Exchange Commission on May 24, 2021, for the
fiscal year ended April 3, 2021, that the company continues to
defend putative class action suits related to its merger with
Celularity Inc.
On January 8, 2021, the company entered into a Merger Agreement and
Plan of Reorganization with Alpha First Merger Sub, Inc., a
Delaware corporation, and the company's direct, wholly-owned
subsidiary, Alpha Second Merger Sub, LLC, a Delaware limited
liability company and the company's direct, wholly-owned
subsidiary, and Celularity Inc., a Delaware corporation.
Pursuant to the Merger Agreement, at the closing of the
transactions contemplated by the Merger Agreement, and in
accordance with the Delaware General Corporation Law, as amended
(DGCL), (i) First Merger Sub will merge with and into Celularity,
with Celularity surviving the First Merger as the company's
wholly-owned subsidiary; and (ii) immediately following the First
Merger and as part of the same overall transaction as the First
Merger, the Surviving Corporation will merge with and into Second
Merger Sub, with Second Merger Sub being the surviving entity of
the Second Merger.
On February 4, 2021, a putative class action lawsuit was filed in
the Supreme Court of the State of New York by a purported
stockholder of the Company in connection with the Celularity
Business Combination: Spero v. GX Acquisition Corp., et al., Index
No. 650812/2021 (N.Y. Sup Ct. Feb 04, 2021).
On February 26, 2021, the same purported stockholder filed an
amended complaint in the lawsuit removing the class action
allegations and certain of the other allegations.
On February 8, 2021, a complaint was filed with the Supreme Court
of the State of New York by a purported stockholder of the Company
in connection with the Celularity Business Combination: Rogalla v.
GX Acquisition Corp., et al., Index No. 650877/2021 (N.Y. Sup Ct.
Feb 08, 2021).
The Complaints name the Company and current members of the
Company's board of directors as defendants.
Additionally, the Rogalla Complaint names First Merger Sub, Second
Merger Sub and Celularity as defendants. The Rogalla Complaint
alleges breach of fiduciary duty claims against the Company's board
of directors in connection with the Business Combination and aiding
and abetting the Company's board of directors' breaches of
fiduciary duties claims against the Company, First Merger Sub,
Second Merger Sub and Celularity.
These claims are based on allegations that the S-4 Registration
Statement related to the Celularity Business Combination is
materially misleading and/or omits material information concerning
the Celularity Business Combination.
The Spero Complaint alleges breach of fiduciary duty claims against
the Company's board of directors in connection with the Business
Combination and aiding and abetting the Company's board of
directors' breaches of fiduciary duties claims against the Company.
The claims are based on the sales process and valuation of the
Company, as well as allegations that the S-4 Registration Statement
related to the Celularity Business Combination is materially
misleading and/or omits material information concerning the
Celularity Business Combination.
The Complaints generally seek injunctive relief or rescission,
unspecified damages and awards of attorneys' and experts' fees,
among other remedies.
The Company believes that these allegations are without merit.
GX Acquisition said, "These cases are in the early stages and the
Company is unable to reasonably determine the outcome or estimate
the loss, and as such, has not recorded a loss contingency.
However, if the plaintiffs are successful in enjoining the
Celularity Business Combination, the Celularity Business
Combination would not be completed. In addition, the Company could
be held liable for damages."
GX Acquisition Corp. is an early-stage blank check company
incorporated as a Delaware corporation and formed for the purpose
of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with
one or more businesses. The company is based in New York, New
York.
HARVEST CAPITAL: Portman Ridge Merger Related Suits Ongoing
-----------------------------------------------------------
Harvest Capital Credit Corporation said in its Form 8-K filing with
the U.S. Securities and Exchange Commission filed on May 27, 2021,
that the company continues to defend putative class action
complaints, related to its merger with Portman Ridge Finance
Corporation.
On December 23, 2020, Harvest Capital Credit Corporation, a
Delaware corporation (HCAP), entered into an Agreement and Plan of
Merger with Portman Ridge Finance Corporation, a Delaware
corporation (PTMN), Rye Acquisition Sub Inc., a Delaware
corporation and a direct wholly-owned subsidiary of PTMN
(Acquisition Sub), and Sierra Crest Investment Management LLC, a
Delaware limited liability company and the external investment
adviser to PTMN (Sierra Crest).
The Merger Agreement provides that, subject to the conditions set
forth therein, (i) Acquisition Sub will merge with and into HCAP
(the First Merger), with HCAP continuing as the surviving
corporation and as a wholly-owned subsidiary of PTMN, and (ii)
immediately after the effectiveness of the First Merger, HCAP will
merge with and into PTMN, with PTMN continuing as the surviving
corporation.
In February and March of 2021, four purported HCAP stockholders
filed complaints against HCAP, certain officers and directors of
HCAP's Board of Directors, and/or certain affiliates of HCAP, among
others, in the Court of Chancery in the State of Delaware, the
Supreme Court of the State of New York and the United States
District Court for the Eastern District of New York.
The complaints filed in Chancery Court were filed as putative class
action complaints. The Merger Complaints allege, among other
things, that the registration statement on Form N-14 first filed by
PTMN with the SEC on January 27, 2021 (which includes the
preliminary proxy statement of HCAP) contains materially misleading
and incomplete disclosures. The complaints seek, among other
things, that HCAP make supplemental disclosures to address the
alleged materially misleading and incomplete disclosures and to
enjoin the closing of the Mergers.
On March 30, 2021 and April 19, 2021, PTMN filed with the SEC
amendments to the Preliminary Proxy Statement/Prospectus, and on
April 21, 2021, HCAP filed the definitive merger proxy statement.
HCAP and the individual defendants believe that HCAP has previously
disclosed all information required to be disclosed to ensure that
its stockholders can make an informed vote at the Special Meeting
and that the additional disclosures requested by the plaintiffs are
not required by the federal securities laws or Delaware law, and
are otherwise immaterial. Accordingly, HCAP and the individual
defendants believe the claims asserted in the Merger Complaints are
without merit.
However, in order to reduce the costs, risks and uncertainties
inherent in litigation, HCAP has determined voluntarily to
supplement the Proxy Statement.
A copy of the supplemental disclosure is available at
https://bit.ly/34AuiBd.
Harvest Capital Credit Corporation is an externally managed,
closed-end, non-diversified management investment company that has
elected to be regulated as a business development company, or
"BDC", under the Investment Company Act of 1940, or the 1940 Act.
The company is based in New York, New York.
HIDEAWAY HILLS: Residents One Step Closer to Class-Action Status
----------------------------------------------------------------
Siandhara Bonnet at rapidcityjournal.com reports that a circuit
court judge rejected the state's argument that the Hideaway Hills
homeowners lack legal standing to seek damages due to a sinkhole.
Judge Kevin Krull made the ruling May 14 in the beginning steps of
a lawsuit that can now proceed with becoming class-action status.
Class-action status would include any resident affected by the
sinkhole that exposed an abandoned gypsum mine in April 2020.
More than 40 people from 15 homes were forced to evacuate due to
the sinkhole and mine.
"The named plaintiffs have demonstrated that their injuries likely
will be redressed by a favorable decision - i.e., an award of
damages, based on their constitutional right to individually bring
an inverse condemnation case against the state," Krull wrote.
Thirty residents signed onto the lawsuit against the state in Meade
County in October. The complaint says the state should compensate
residents with money from the South Dakota Cement Plant Trust,
which had $333,808,945 as of Sept. 30, 2020.
Attorney Kathleen Barrow with the Fox Rothschild law firm
representing the residents, along with Terence Quinn of The Quinn
Law Firm, said they will now proceed with the class-certification
process.
Barrow said the state can't appeal the decision unless "for some
reason our standing was not viable and should not be allowed to go
forward, but the issue for now is closed."
She also said the court could decide if sovereign immunity is an
issue during the class-action certification process, but it isn't
an issue right now. If the court decides it is an issue, plaintiffs
and other residents that would seek to join the possible
class-action lawsuit would have to file lawsuits against the state
and other defendants separately.
Barrow said they now have a motion for leave to conduct a
precertification discovery and will seek elements necessary to have
a class-action status. The elements would have to show there are
numerous plaintiffs similarly situated to those in the lawsuit,
that they have the same kind of damages and legal claims, and have
to show that the counsel who represents the plaintiffs are adequate
to do the job.
If a judge certifies the request, it will continue like any other
lawsuit.
"I think the most important thing here and what we're most excited
about is that the court made it clear that the state does own the
subsurface and had certain obligations to maintain the surface,"
Barrow said. "The people that have been harmed have standing to
bring claims to be made financially whole and to be safe in their
homes, to be able to leave homes, find safety and live the rest of
their lives."
She said this opens the door so Hideaway Hills residents can be
made whole and safe again.
A second lawsuit is on hold as plaintiffs wait for the South Dakota
Supreme Court to decide on overturning a Meade County judge's
decision to dismiss the county and former commissioners from the
lawsuit.
Hideaway Hills residents are also seeking answers to a potential
loss of sewage service due to the mine. The Northdale Sanitary
District, which oversees water and sewage for the Hideaway Hills
and Northdale subdivisions, has yet to decide on the next course of
action pending further research to reroute a sanitary sewer main.
[GN]
I360 LLC: Court Dismisses Tag Suit Over Invasion of Privacy
-----------------------------------------------------------
Judge M. James Lorenz of the U.S. District Court for the Southern
District of California dismissed the case, JENNIFER TAG, Plaintiff
v. i360, LLC et al., Defendants, Case No. 21cv975-L (MDD) (S.D.
Cal.), for lack of subject matter jurisdiction.
In the putative class action alleging invasion of privacy, the
Plaintiff bases federal jurisdiction on the minimal diversity of
citizenship required by the Class Action Fairness Act of 2005, 28
U.S.C. Section 1332(d) ("CAFA").
Because it is not possible to determine on the face of the
complaint that minimal diversity is present, Judge Lorenz dismissed
the action with leave to amend to allege subject matter
jurisdiction.
The Judge explains that the Plaintiff relies on CAFA which provides
for jurisdiction over class actions where the matter in controversy
exceeds $5 million and requires that any member of a class of
plaintiffs is a citizen of a State different from any defendant.
The complaint must affirmatively allege the state of citizenship of
each party.
The Judge finds that individuals like the Plaintiff are citizens of
the state where they are domiciled. The Plaintiff alleges she is a
California citizen. One named Defendant, Joe Leventhal, is an
individual. The Plaintiff does not allege his citizenship.
Also, the two named Defendants, i360, LLC and GC Strategies, LLC,
are limited liability companies. The citizenship of a limited
liability company for purposes of diversity jurisdiction is
determined by examining the citizenship of each of its members.
The Plaintiff does not allege the citizenship of the Defendants'
members. Accordingly, the citizenship of these Defendants cannot
be determined from the face of the complaint.
Because the Plaintiff does not allege any Defendant's citizenship,
Judge Lorenz concludes that she has not alleged minimal diversity
as required for subject matter jurisdiction under CAFA. Therefore,
the complaint is dismissed for lack of subject matter jurisdiction.
Pursuant to 28 U.S.C. Section 1653, the Plaintiff is granted leave
to file an amended complaint to supplement her jurisdictional
allegations. If she chooses to file an amended complaint, she must
do so no later than June 18, 2021.
A full-text copy of the Court's May 24, 2021 Order is available at
https://tinyurl.com/a54nhyjn from Leagle.com.
INTRUSION INC: Rosen Law Reminds Investors of June 15 Deadline
--------------------------------------------------------------
WHY: New York, N.Y., May 21, 2021. Rosen Law Firm, a global
investor rights law firm, reminds purchasers of the securities of
Intrusion Inc. (NASDAQ: INTZ) between January 13, 2021 and April
13, 2021, inclusive (the "Class Period"), of the important June 15,
2021 lead plaintiff deadline.
SO WHAT: If you purchased Intrusion securities during the Class
Period you may be entitled to compensation without payment of any
out of pocket fees or costs through a contingency fee arrangement.
WHAT TO DO NEXT: To join the Intrusion class action, go to
http://www.rosenlegal.com/cases-register-2082.htmlor call Phillip
Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or
cases@rosenlegal.com for information on the class action. A class
action lawsuit has already been filed. If you wish to serve as lead
plaintiff, you must move the Court no later than June 15, 2021. A
lead plaintiff is a representative party acting on behalf of other
class members in directing the litigation.
WHY ROSEN LAW: We encourage investors to select qualified counsel
with a track record of success in leadership roles. Often, firms
issuing notices do not have comparable experience or resources. The
Rosen Law Firm represents investors throughout the globe,
concentrating its practice in securities class actions and
shareholder derivative litigation. Rosen Law Firm has achieved the
largest ever securities class action settlement against a Chinese
Company. Rosen Law Firm was Ranked No. 1 by ISS Securities Class
Action Services for number of securities class action settlements
in 2017. The firm has been ranked in the top 4 each year since 2013
and has recovered hundreds of millions of dollars for investors. In
2019 alone the firm secured over $438 million for investors. In
2020, founding partner Laurence Rosen was named by law360 as a
Titan of Plaintiffs' Bar. Many of the firm's attorneys have been
recognized by Lawdragon and Super Lawyers.
DETAILS OF THE CASE: According to the lawsuit, defendants
throughout the Class Period made false and/or misleading statements
and/or failed to disclose that: (1) Intrusion's Shield product was
merely a repackaging of existing technology in the Company's
portfolio; (2) Shield lacked the patents, certifications, and
insurance critical to the sale of cybersecurity products; (3)
Intrusion had overstated the efficacy of Shield's purported ability
to protect against cyberattacks; (4) as a result of the foregoing,
Intrusion's Shield was reasonably unlikely to generate significant
revenue; and (5) as a result of the foregoing, defendants' positive
statements about Intrusion's business, operations, and prospects
were materially misleading and/or lacked a reasonable basis. When
the true details entered the market, the lawsuit claims that
investors suffered damages.
To join the Intrusion class action, go to
http://www.rosenlegal.com/cases-register-2082.htmlor call Phillip
Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or
cases@rosenlegal.com for information on the class action.
No Class Has Been Certified. Until a class is certified, you are
not represented by counsel unless you retain one. You may select
counsel of your choice. You may also remain an absent class member
and do nothing at this point. An investor's ability to share in any
potential future recovery is not dependent upon serving as lead
plaintiff.
Attorney Advertising. Prior results do not guarantee a similar
outcome. [GN]
INTUIT INC: Free File Suit Resolved on Non-Class Basis
------------------------------------------------------
Intuit Inc. said in its Form 10-Q Report filed with the Securities
and Exchange Commission on May 25, 2021, for the quarterly period
ended April 30, 2021, that the company entered into an agreement
that resolved the Intuit Free File Litigation on an individual
non-class basis, without any admission of wrongdoing, for a
non-material amount.
Beginning in May 2019, various legal proceedings were filed and
certain regulatory inquiries were commenced in connection with the
company's provision and marketing of free online tax preparation
programs.
The company believes that the allegations contained within these
legal proceedings are without merit. The company is vigorously
defending its interests in the legal proceedings and cooperating in
the inquiries.
These proceedings include, among others, multiple putative class
actions that were consolidated into a single putative class action
in the Northern District of California in September 2019 (the
"Intuit Free File Litigation") and demands for arbitration that
were filed beginning in October 2019.
In August 2020, the Ninth Circuit Court of Appeals ordered that the
putative class action claims be resolved through arbitration.
Intuit entered into a proposed settlement agreement in November
2020 to resolve the putative class action, which was rejected by
the court.
On May 20, 2021, Intuit entered into an agreement that resolved the
Intuit Free File Litigation on an individual non-class basis,
without any admission of wrongdoing, for a non-material amount.
Intuit Inc. provides financial management and compliance products
and services for small businesses, consumers, self-employed, and
accounting professionals in the United States, Canada, and
internationally. Intuit Inc. was founded in 1983 and is
headquartered in Mountain View, California.
KONICA MINOLTA: Court Narrows Claims in Luense ERISA Class Suit
---------------------------------------------------------------
In the case, RAY ALLEN LUENSE, PAMELA PEARSON, DANIEL F. SETTNEK,
and NEIL ROSE, Individually and as representatives of a class of
participants and beneficiaries on behalf of the Konica Minolta
401(k) Plan, Plaintiffs v. KONICA MINOLTA BUSINESS SOLUTIONS
U.S.A., INC., BOARD OF DIRECTORS OF KONICA MINOLTA BUSINESS
SOLUTIONS U.S.A., INC., KONICA MINOLTA 401(K) PLAN COMMITTEE,
SANDRA SOHL, SUSAN MCCARTHY, and JOHN DOES 1-30, Defendants, Civil
Action No. 20-6827 (JMV) (MF) (D.N.J.), Judge John Michael Vazquez
of the U.S. District Court for the District of New Jersey granted
in part and denied in part the Defendants' motion to dismiss the
Plaintiffs' Complaint.
The putative class action, brought under the Employee Retirement
Income Security Act ("ERISA"), arises out of allegations that
fiduciaries of Konica Minolta's 401(k) plan breached their duties
of loyalty and prudence and engaged in a prohibited transaction.
The named Plaintiffs are four individuals who participated in the
Plan. They bring the action on behalf of themselves and a proposed
class defined as "all persons, except the Defendants and their
immediate family members, who were participants in or beneficiaries
of the Plan, at any time between June 4, 2014 and the present."
Defendant Konica is a New York corporation with its principal place
of business in New Jersey. Konica is the sponsor, administrator,
and a fiduciary of the Plan, within the meaning of 29 U.S.C.
Section 1002(21)(A). Defendant Sandra Sohl "has been the Director,
Compensation, Benefits & HRIS at Konica" since April 2013.
Defendant Susan McCarthy has been the Manager, Compensation & HRIS
at [Konica] since April 2014." The "Board Defendants" are a group
comprised of Konica's Board of Directors and each of its individual
members during the Class Period (John Does 1-10). The "Committee
Defendants" are a group comprised of both the Plan Committee to
which Konica delegated certain administrative and investment
related duties, and each of its members during the Class Period
(John Does 11-20). The remaining Defendants, John Does 21-30,
"include but are not limited to, Konica officers and employees
where are/were fiduciaries of the Plan during the Class Period."
The Plan is a single-employer "defined contribution" or "individual
account" plan, within the meaning of 29 U.S.C. Section 1002(34).
This type of plan "confers tax benefits on participating employees
to incentivize saving for retirement." The Plan provides for
individual accounts for each participant and for benefits based
solely upon the amount contributed to those accounts, and any
income, expense, gains and losses, and any forfeitures of accounts
of the participants which may be allocated to such participant's
account." As a result, the Plan's retirement benefits "are based
solely on the amounts allocated to each individual's account."
The Plaintiffs allege that the Defendants were fiduciaries of the
Plan and that, pursuant to 29 U.S.C. Section 1104(a)(1), they were
required to manage and administer the Plan in the interest of the
Plan's participants and bound by the duties of loyalty and
prudence. As fiduciaries, 29 U.S.C. Section 1105(a) provides that
Defendants could be liable for another fiduciary's breach of
responsibility.
The Defendants breached these duties, the Plaintiffs allege, by
including "many mutual fund investments that were more expensive
than necessary and otherwise were not justified on the basis of
their economic value to the Plan"; failing "to have a proper system
of review in place to ensure that participants in the Plan were
being charged appropriate and reasonable fees for the Plan's
investment options"; and failing "to leverage the size of the Plan
to negotiate lower expense ratios for certain investment options
maintained and/or added to the Plan during the Class Period."
The Plaintiffs filed their Complaint on June 4, 2020. The
Complaint asserts three claims: Count One alleges that Konica and
the Committee Defendants breached the fiduciary duties of loyalty
and prudence; Count Two alleges that Konica and the Board
Defendants failed to adequately monitor other fiduciaries; and
Count Three alleges a prohibited transaction based on excessive and
unreasonable compensation in violation of ERISA.
Presently before the Court is the Defendants' motion to dismiss the
Plaintiffs' Complaint.
Analysis
A. Article III Standing
The Defendants argue that the Plaintiffs lack standing to assert
claims related to the 18 investment options in which they did not
invest because they suffered no personal injury as a result of
those investments. They further contend that the Plaintiffs lack
standing with respect to their allegations that the Plan should
have included more index funds and their allegations concerning the
expense of the Plan's investment options; the Defendants allege
that the Plaintiffs have failed to plausibly allege that they were
injured or suffered losses in connection with these allegations.
In opposition, the Plaintiffs submit that this argument has been
rejected by courts across the country because their losses in their
Plan investment options, as well as the higher recordkeeping fees
they paid along with all other participants in the Plan are fairly
and properly traceable to the Defendants' breaches of the duties of
prudence and loyalty as described in the Complaint.
Pursuant to Thole v. U.S. Bank N.A., ___ U.S. ___, 140 S.Ct. 1615
(2020), Judge Vazquez holds that the Plaintiffs have standing with
respect to the investment funds in which they invested. As for the
remaining investment funds in which the Plans were invested but the
named Plaintiffs were not, Thole suggests that a plaintiff has
standing to sue on behalf of the Plan, even if that particular
plaintiff was not invested in each one of the Plan's investment
vehicles.
B. Defendants' Fiduciary Status
As a threshold matter, the Court must first consider whether
Defendants were acting as fiduciaries under ERISA when taking the
actions of which the Plaintiffs complain. The the Plaintiffs
allege that it is the Plan sponsor, administrator, and a fiduciary
of the Plan within the meaning of 29 U.S.C. Section 1002(21)(A)
because it is a named fiduciary under the Plan; it exercised
discretionary authority and control over Plan management and/or
over disposition of Plan assets; and it appointed Plan
fiduciaries.
The Defendants argue that the Plaintiffs' allegations that Konica
is the Plan's sponsor is insufficient to create fiduciary status,
and the Plaintiffs' allegations that Konica was a named fiduciary
and the Plan's administrator are insufficient because Konica
delegated these responsibilities to the Committee. Similarly,
theDefendants contend, appointing fiduciaries did not confer
fiduciary responsibilities upon Konica.
Judge Vazquez finds that the Plaintiffs have plausibly alleged that
Defendant Konica had a fiduciary responsibility to monitor the
Committee's actions but have not adequately pled that Konica
maintained any additional fiduciary responsibilities with respect
to the alleged conduct. He finds that the Plaintiffs fail to
sufficiently allege that the Board is a fiduciary with respect to
the relevant actions. The Complaint is also devoid of plausible
allegations that any individual member of the Board possessed or
exercised discretionary authority over the appointment of Plan
fiduciaries. Hence, the Plaintiffs have failed to sufficiently
plead that the individual members of the Board were fiduciaries.
The Judge concludes that, in addition to the Committee -- which the
Defendants agree is a fiduciary -- the Plaintiffs have plausibly
alleged that Konica had a duty to monitor the Committee. The
Plaintiffs fail to plausibly allege that any other Defendants were
fiduciaries with respect to the actions challenged in the
Complaint.
C. Breach of the Fiduciary Duties of Prudence and Loyalty (Count
One)
Count One is brought against Konica and the Committee Defendants.
Because the Plaintiffs failed to plausibly allege that the
individual Committee members were fiduciaries, or that Konica had
fiduciaries responsibilities beyond a duty to monitor the
Committee, Count One fails to state a claim as to those Defendants.
The Defendants do not argue that the Plaintiffs failed to
adequately allege the causation element. Therefore, Judge Vazquez
considers only whether the Plaintiffs adequately stated a claim
that the Committee breached its fiduciary duties of prudence and
loyalty.
Viewing the Plaintiffs' overall allegations of the Plan's
mismanagement, Judge Vazquez concludes that dismissal of the
Plaintiffs' duty of prudence claim as against the Committee at this
early stage would be inappropriate. First, the Plaintiffs
adequately plead that the Plan included funds with higher expense
ratios than comparable funds, and the Plan's funds failed to
outperform the less-expensive comparable funds. Second, the
Plaintiffs sufficiently allege that many funds were retained in the
Plan despite their underperformance as compared to their
benchmarks.
However, the Judge holds that although the Plaintiffs' opposition
brief includes arguments that the Committee was acting for the
benefit of Prudential, it is axiomatic that the complaint may not
be amended by the briefs in opposition to a motion to dismiss, and
the Plaintiffs' Complaint does not include sufficient factual
allegations to support these contentions. As a result, the
Defendants' motion to dismiss is granted as to Count One with
respect to the duty of loyalty.
D. Failure to Adequately Monitor Other Fiduciaries (Count Two)
Count Two is brought against Defendants Konica, the Board, and the
individual members of the Board; however, the Complaint
sufficiently alleges only that Konica had a duty to monitor the
Committee. Judge Vazquez therefore analyzes Count Two solely as to
Konica. Because the Complaint sufficiently pleads that the
Committee breached the duty of prudence, the Plaintiffs' failure to
monitor claim also survives. The Defendants' motion is denied as
to Count Two vis-a-vis Konica.
E. Prohibited Transaction - Excessive and Unreasonable Compensation
for Services (Count Three)
Count Three alleges a violation of 29 U.S.C. Section 1108(b)(2)
based on excessive and unreasonable compensation paid to the Plan's
recordkeeper, Prudential. As an initial matter, unlike Counts One
and Two, the Plaintiffs do not specify against which the
Defendant(s) Count Three is brought. One allegation under Count
Three refers to the "Defendants," while another refers to the
"Defendant." Because "prohibited transaction claims require that
an action be taken by an ERISA fiduciary," and the Complaint
plausibly alleges only that the Committee was a fiduciary with
respect to any duties beyond monitoring, Judge Vazquez construes
Count Three as against the Committee.
The Judge finds that the Plaintiffs' prohibited transaction claim
actually appears to focus on allegations that the Defendants cannot
satisfy exceptions to 29 U.S.C. Section 1106(a)(1). The Complaint
invokes certain provisions within the Code of Federal Regulations
interpreting these exceptions -- the Plaintiffs suggest that the
Defendants cannot satisfy these exceptions and, therefore, this was
a prohibited transaction because Prudential's compensation was not
reasonable. But the provisions the Plaintiffs discuss concern
exceptions to Section 1106(a) -- i.e., the regulations provide
guidance as to how some transactions that appear to violate Section
1106(a) may be exempt from Section 1106(a)'s requirements and,
therefore, not prohibited transactions.
While the Plaintiffs allege that the Defendants do not satisfy
these exceptions, the Plaintiffs failed to meet their threshold
burden, that is, providing sufficient allegations of a violation of
Section 1106(a) in the first instance. As a result, Judge Vazquez
concludes that the Plaintiffs failed to state a prohibited
transactions claim and Count Three is dismissed.
Conclusion
For the reasons set forth, Judge Vazquez granted in part and denied
in part the Defendants' motion to dismiss. Count One is dismissed
as against Konica and the individual Committee members and, insofar
as it invokes the duty of loyalty, it is dismissed as to the
Committee. Count Two is dismissed as to the Board of Directors and
the individual members of the Board. Count Three is dismissed.
The dismissals are without prejudice and the Plaintiffs will have
30 days to file an amended complaint that cures the deficiencies
noted herein. If the Plaintiffs do not file an amended complaint
within that time, the claims dismissed without prejudice will be
dismissed with prejudice. An appropriate Order accompanies the
Opinion.
A full-text copy of the Court's May 24, 2021 Opinion is available
at https://tinyurl.com/we4tj357 from Leagle.com.
KS STATEBANK: Class Settlement in Saliba Suit Gets Initial Approval
-------------------------------------------------------------------
In the case, Ricci Saliba, individually and on behalf of all others
similarly situated, Plaintiff v. KS Statebank Corporation,
Defendant, Case No. CV-20-00503-PHX-JAT (D. Ariz.), Judge James A.
Teilborg of the U.S. District Court for the District of Arizona
granted the Plaintiff's Unopposed Motion for Preliminary Approval
of Class Settlement.
The Plaintiff, on behalf of herself and a class of similarly
situated persons, and the Defendant have requested entry of an
order granting preliminary approval of their class action
settlement. Per the Unopposed Motion for Preliminary Approval of
Class Settlement, the Parties have agreed to settle the Action
pursuant to the terms and conditions set forth in an executed
Settlement Agreement. Subject to the terms and conditions of the
Settlement and subject to Court approval, the Plaintiff and the
proposed Settlement Class will fully, finally, and forever resolve,
discharge, and release their claims.
The Settlement has been filed with the Court, and the Plaintiff and
the Class Counsel have filed an Unopposed Motion for Preliminary
Approval of Class Settlement.
Upon considering the Motion, the Settlement and all exhibits
thereto, the record in these proceedings, the representations and
recommendations of counsel, and the requirements of law, Judge
Teilborg finds that: (1) the Court has jurisdiction over the
subject matter and the Parties to the Action; (2) the proposed
Settlement Class meets the requirements of Federal Rule of Civil
Procedure 23 and should be conditionally certified for settlement
purposes only; (3) the persons and entities identified below should
be appointed Class Representative and Class Counsel; (4) the
Settlement is the result of informed, good-faith, arm's-length
negotiations between the Parties and their capable and experienced
counsel, and is not the result of collusion; (5) the Settlement is
within the range of reasonableness and should be preliminarily
approved; (6) the proposed Notice program and proposed forms of
Notice satisfy Federal Rule of Civil Procedure 23 and
constitutional due process requirements, and are reasonably
calculated under the circumstances to apprise the Settlement Class
of the pendency of the Action, class certification, terms of the
Settlement, Class Counsel's application for an award of attorneys'
fees and expenses and request for a Service Award for Plaintiff,
and their rights to opt-out of the Settlement Class or object to
the Settlement, Class Counsel's Fee Application, and/or the request
for a Service Award for Plaintiff; (7) good cause exists to
schedule and conduct a Final Approval Hearing, pursuant to Federal
Rule of Civil Procedure 23(e), to assist the Court in determining
whether to grant Final Approval of the Settlement and enter the
Final Approval Order, and whether to grant Class Counsel's Fee
Application and request for a Service Award for Plaintiff; and (8)
the other related matters pertinent to the Preliminary Approval of
the Settlement should also be approved.
Based on the foregoing, Judge Teilborg granted the motion for
preliminary approval of the settlement. He therefore provisionally
certifies the following Settlement Class: All persons, and their
respective marital communities, within the United States who, (1)
within the four years prior to the filing of Plaintiff's Complaint
in the Lawsuit, (2) received a text message from Roy Meshel while
he was employed by Defendant, (3) advertising and/or promoting one
or more of Defendant's mortgage loan products and/or mortgage loan
rates, (4) using the texting software provided by Skipio LLC, (5)
to said person's cellular telephone number, (6) where the person's
telephone number was not obtained by Defendant from a non-party
lead generator, and was instead obtained by Mr. Meshel.
The Judge appointed Plaintiff Ricci Saliba as the Class
Representative and the following firms and people as the Class
Counsel for the Settlement Class: Manuel Hiraldo: Hiraldo, P.A.,
Michael Eisenband: Eisenband Law, PA, and Ignacio Hiraldo: IJH
Law.
The Judge recognizes that the Defendant reserves its defenses and
objections against the Plaintiff's claims, and rights to oppose any
request for class certification on Plaintiff's underlying claims,
in the event that the proposed Settlement does not become final for
any reason.
Judge Teilborg preliminarily approved that Settlement, together
with all exhibits thereto, as fair, reasonable, and adequate. He
also approved the form and content of the Class notices,
substantially in the forms attached as Exhibits 1 and 2 to the
Settlement Agreement.
Epiq Class Action & Claims Solutions, Inc. will serve as the
Administrator. Within 10 days of this Order, the Parties will
provide the Administrator with Settlement Class Data, which will be
treated as Confidential Information, so that the Administrator can
carry out its duties as identified herein and pursuant to the
Parties' Settlement.
The Administrator will implement the Class Notice program, as set
forth in the Preliminary Approval Order and in the Settlement,
using the Class notices substantially in the forms attached as
Exhibits to the Settlement and approved by the Preliminary Approval
Order. Notice will be provided to the members of the Settlement
Class pursuant to the Class Notice program, as specified in the
Settlement and approved by this Preliminary Approval Order.
The Administrator will administer Mail Notice as set forth in the
Settlement. The Administrator will also establish a Settlement
Website as a means for the Settlement Class members to obtain
notice of, and information about, the Settlement. The Settlement
Website will be established as soon as practicable following
Preliminary Approval, but no later than before commencement of the
Class Notice program. It will include hyperlinks to the
Settlement, the Long-Form Notice, the Preliminary Approval Order,
and other such documents as the Class Counsel and the counsel for
the Defendant agree to include. These documents will remain on the
Settlement Website until at least 60 days following the deadline
for submitting objections and opt-out requests.
The Administrator is directed to perform all substantive
responsibilities with respect to effectuating the Class Notice
program, as set forth in the Settlement.
A Final Approval Hearing will be held before the Court on Oct. 6,
2021, at 11:00 a.m. Any person within the Settlement Class who
wishes to be excluded from the Settlement Class may exercise their
right to opt-out of the Settlement Class by following the opt-out
procedures set forth in the Settlement and in the Notices at any
time during the Opt-Out Period. To be valid and timely, opt-out
requests must be received by those listed in the Long-Form Notice
on or before the last day of the Opt-Out Period, which is 60 days
from mailing of the Notice, as specified in the Notice.
Any Settlement Class Member may object to the Settlement, the Class
Counsel's Fee Application, or the request for a Service Award for
Plaintiff. Any such objections must be mailed to the Clerk of the
Court, the Defendant's Counsel and the Class Counsel at the
addresses indicated in the Long-Form Notice. For an objection to
be considered by the Court, the objection must be postmarked no
later than 60 days from mailing of the Notice, as set forth in the
Notice.
The Plaintiff and the Class Counsel will file their Motion for
Final Approval of the Settlement, Fee Application, and request for
a Service Award for Plaintiff no later than 45 days before the
Final Approval Hearing. They will file their responses to timely
filed objections to the Motion for Final Approval of the
Settlement, the Fee Application and/or request a Service Award for
Plaintiff no later than 15 days before the Final Approval Hearing.
All proceedings in the Action are stayed until further order of the
Court, except as may be necessary to implement the terms of the
Settlement.
Based on the foregoing, Judge Teilborg set the following schedule
for the Final Approval Hearing and the actions which must take
place before and after it:
a. Deadline for Completion of Mailed Notice Program - 60 days
after Preliminary Approval; no later than 90 days before the Final
Approval Hearing
b. Deadline for filing papers in support of Final Approval of
the Settlement and Class Counsel's application for an award of
attorneys' fees and expenses - 45 days prior to the Final Approval
Hearing
c. Deadline for opting-out of Settlement and submission of
objections - 60 days from mailing of Notice; no later than 30 days
prior to the Final Approval Hearing
d. Responses to Objections - 15 days prior to the Final
Approval Hearing
e. The Final Approval Hearing - Oct. 6, 2021
A full-text copy of the Court's May 25, 2021 Order is available at
https://tinyurl.com/4n4zdjjc from Leagle.com.
LA SALLE UNIVERSITY: Title IX Attorney Hired by Volleyball Players
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Mike Jensen at inquirer.com reports that members of La Salle
University's volleyball team have retained an attorney experienced
in Title IX cases, according to a letter from the attorney sent by
email to La Salle's president threatening a class-action lawsuit
due to what he claimed were Title IX violations as a result of
women's sports teams being included in cuts announced last year.
Last September, La Salle announced it was cutting seven sports at
the end of the academic year, with 130 current students being
impacted by the cuts.
Sports being cut initially were to include four men's programs and
three women's programs. Earlier this month, the school announced it
would be reinstating one of the men's programs, swimming and
diving, after a fundraising drive by alumni of the program.
The letter written, shared with the Inquirer, was sent by Arthur
Bryant of Bailey & Glasser LLP to La Salle president Colleen
Hanycz, claiming La Salle is "depriving women athletes and
potential athletes of equal participation opportunities and
treatment in violation of Title IX of the Education Amendments of
1972."
It further added, "Please respond to this letter as soon as
possible and, in any event, no later than Thursday, May 27, 2021."
The school acknowledged the letter was received. A statement was
provided by school spokesman Christopher Vito: "Title IX was a
critical factor in the University's decision in September and the
reinstatement of men's swimming and diving in May. This is the
first notice we have received from a standpoint of perceived
noncompliance with Title IX. Beyond that, we do not comment on
potential or ongoing litigation."
Bryant, who began his legal career in Philadelphia but now works in
Oakland, Calif., was part of the legal team that won a Title IX
settlement against Temple in the 1980s and a suit filed against
Brown in 1991 that prevailed in the courts.
In a phone interview, he said he couldn't say how many members of
the volleyball team he represented, noting that when team members
transfer to another school seeking an opportunity to play, "only
the women who are left are in position to sue." He said he was
contacted "a day or two after they reinstated the men's swimming
and diving team."
His letter stated that "the elimination of the women's volleyball,
softball, and tennis teams constitutes illegal sex discrimination
in violation of Title IX."
Title IX prohibits educational institutions receiving federal funds
from eliminating women's teams for which interest, ability, and
competition are available, Bryant said in the letter, "unless
'intercollegiate level participation opportunities for male and
female students are provided in numbers substantially proportionate
to their respective enrollments."
"La Salle fails this test," Bryant wrote in the letter, noting that
in the most recent publicly available data, La Salle's
undergraduate population was 64% women in 2019-20 while the
school's intercollegiate varsity athletic team rosters that year
had 237 men and 276 women, or 53.8% women -- "creating a 10.2% gap
between the women's undergraduate enrollment rate and their
intercollegiate athletic participation rate."
Given those previous numbers, Bryant said in the letter, La Salle
needed to add opportunities for 145 women to its intercollegiate
athletic program to reach gender equity.
Bryant told the Inquirer: "It's not complicated, it's real simple.
The programs are separate, they have to be equal. You can't
discriminate against women to make money, to avoid losing money, or
because of COVID."
Bryant has been involved in recent legal talks involving planned
sports cuts at William and Mary, East Carolina, Dartmouth, and
Clemson, each school ultimately deciding to restore the women's
sports that had been designated to be cut, he noted. Fresno State
declined to go that route and a suit brought by members of the
women's lacrosse team is currently in litigation, Bryant
representing the players. Last month, a judge declined to issue a
preliminary injunction restoring the sport while the case is being
decided.
In an interview last September when La Salle's cuts were initially
announced, athletic director Brian Baptiste said COVID-19 pandemic
financial issues did "accelerate the process," but suggested that
it only played a part in the cuts.
"This was really about how do we create a better experience, how do
we align with our peers?" Baptiste said, adding that this was not a
cost-cutting measure, that resources saved would be "reinvested" in
other sports.
La Salle's baseball program, which just set a season record for
victories, also has been attempting to save itself from being cut
by fundraising. The school said this month in a statement that La
Salle's board of trustees considered that matter closed.
As a result of reinstating the one men's sport, Bryant said in the
letter, "the school's intercollegiate athletic participation will
be approximately 172 men and 236 women, or 57.84% women-creating a
6.16% participation gap. Therefore, with the announced
reinstatement of the men's team, La Salle now needs to add
approximately 70 women to reach gender equity under Title IX. This
participation gap is large enough that La Salle could reinstate all
three of the eliminated women's teams, which offer opportunities
for approximately 40 women combined."
Bryant noted in the letter, "I would like to meet with you and/or
the school's lawyers and discuss the relevant facts and the law, as
well as the likely outcome if a lawsuit is filed. It is my hope
that, considering these factors, La Salle will agree to reinstate
the women's volleyball, softball, and tennis teams and come into
compliance with Title IX to avoid the need for a lawsuit." [GN]
LEXISNEXIS RISK: Class Settlement in Gaston Suit Has Final Approval
-------------------------------------------------------------------
In the case, DELORIS GASTON, et al., Plaintiffs v. LEXISNEXIS RISK
SOLUTIONS INC., et al., Defendants, Civil Action No.
5:16-cv-00009-KDB-DCK (W.D.N.C.), Judge Kenneth D. Bell of the U.S.
District Court for the Western District of North Carolina,
Statesville Division, granted the Parties' Joint Motion for Final
Approval of Proposed Settlement, and the Plaintiffs' Motion for
Attorneys' Fees, Expenses and Service Awards.
On Jan. 25, 2021, the Court granted the Parties' Motion for
Preliminary Approval of the Proposed Settlement and conditionally
certified the settlement class pending final approval of the
settlement. The cause came before the Court upon the Parties'
Joint Motion for Final Approval and the Plaintiffs' Motion for
Attorneys' Fees and Incentive Awards.
After careful consideration of the proposed Settlement Agreement
and its exhibits, the Motions and supporting Memoranda and
arguments of counsel and finding that no opposition to the proposed
settlement has been expressed, Judge Bell finds that Final Approval
of the Settlement Agreement should be granted, as well as the
Motion for Attorneys' Fees and Incentive Awards.
For the sole purpose of determining: (i) whether the Court should
finally approve the proposed settlement as fair, reasonable, and
adequate; and (ii) whether the Court should dismiss the litigation
with prejudice as to the Defendants, Judge Bell finally certifies a
settlement class and subclass as follows:
a. Settlement Class: All persons who: (i) at any time within
the four years prior to the date the Complaint was filed through
the date of Final Judgment, (ii) had his or her personal
information (including a driver identification number, name,
address, or telephone number) appear on a Crash Report, and (iii)
that Crash Report was available for purchase via an online portal
or other online means supported, owned or operated by or on behalf
of PoliceReports.US, LLC or LexisNexis Claims Solutions Inc.
b. Settlement Subclass: All persons who: (i) are members of
the Rule 23(b)(2) Settlement Class, and (ii) whose Crash Report was
prepared by the CMPD.
If the Settlement Agreement is not upheld on appeal, or is
otherwise terminated for any reason, the Rule 23(b)(2) Settlement
Class and Rule 23(b)(2) CMPD Settlement Subclass will be
decertified; the Settlement Agreement and all negotiations,
proceedings, and documents prepared, and statements made in
connection therewith, will be without prejudice to any party and
will not be deemed or construed to be an admission or confession by
any party of any fact, matter, or proposition of law; all parties
will stand in the same procedural position as if the Settlement
Agreement had not been negotiated, made, or filed with the Court;
and the Parties will be permitted to pursue their respective
appeals to the United States Court of Appeals for the Fourth
Circuit.
Having certified the class under Rule 23(b)(2), and having
considered the work Named Plaintiffs' counsel have done in
identifying and investigating potential claims in the action, the
counsel's experience in handling complex litigation, the counsel's
knowledge of the applicable law, and the resources the counsel have
committed to representing the class and subclass, the following
attorneys are designated the Class Counsel under Rule 23(g)(1): (i)
David M. Wilkerson and Larry S. McDevitt of The Van Winkle Law
Firm; (ii) Christopher L. Cogdill of Christopher L. Cogdill P.A.;
and (iii) Eugene Clark Covington, Jr., of Eugene C. Covington,
P.A.
The Court has regrettably been informed of the death of Deloris
Gaston, who died after the proposed settlement was preliminarily
approved by the Court. In light of Ms. Gaston's death, and upon
consent of the Defendants, Leonard Gaston is designated as the
Class Representative.
Judge Bell finds that the terms of the proposed settlement are
adequate and reasonable for purposes of final approval and the
proposed settlement as set forth in the Settlement Agreement is
finally approved as fair, reasonable, and adequate.
The Judge appointed American Legal Claim Services LLC ("ALCS") as
the Settlement Administrator for the purpose of providing the
required notice under CAFA and administering the Notice Program.
With regard to attorneys' fees, expenses and an incentive award in
connection for the Rule 23(b)(2) settlement, the Class Counsel has
requested a total award of $5.15 million, which the Defendants have
agreed to pay in addition to their other obligations under the
Settlement Agreement. With respect to attorneys' fees, the Judge
finds that a lodestar of $2,755,405 and a multiplier of
approximately 1.85 is applicable and reasonable, and an award of
$5,098,094.31 is appropriate. The Judge also finds that the Class
Counsel's expenses of $31,905.69 in support of the litigation are
reasonable, for a total award to the class counsel for fees and
expenses of $5.13 million.
Finally, Judge Bell finds that an incentive award of $20,000 to
Leonard Gaston is an appropriate award for his service as a Class
Representative. Mr. Gaston acted for the benefit of the class,
reviewed documents provided to him by his Counsel, discussed with
Counsel aspects of the case, discovery issues, and settlement
negotiations, and was deposed at length. As with attorneys' fees
and expenses, the Defendants do not oppose the award. Therefore,
the Judge finds that a service award in the amount of $20,000 to
Mr. Gaston is appropriate.
In light of the foregoing, Judge Bell granted (i) the Motion for
Final Approval of Proposed Settlement and (ii) the Motion for
Attorneys' Fees, Expenses and Service Awards, consistent with his
Order.
A full-text copy of the Court's May 24, 2021 Order is available at
https://tinyurl.com/ybsyuhsa from Leagle.com.
LOUISIANA: Class of Medicaid-Eligible Youths Certified in AA v. LDH
-------------------------------------------------------------------
In the case, A. A., by and through his mother, P.A., ET AL. v. DR.
COURTNEY N. PHILLIPS, in her official capacity, as Secretary of the
Louisiana Department of Health, ET AL., Case No. 19-00770-BAJ-SDJ
(M.D. La.), Judge Brian A. Jackson of the U.S. District Court for
the Middle District of Louisiana granted the Plaintiffs' renewed
motion for class certification.
The putative class action challenges whether the Louisiana
Department of Health ("LDH") is fulfilling its statutory duty to
provide medically necessary mental health interventions to
Medicaid-eligible children with diagnosed mental health disorders.
Similar class-action lawsuits are proceeding against state agencies
across the country.
The Plaintiffs' core allegation is that LDH maintains a policy of
not providing "intensive home and community-based services"
("IHCBS") -- defined as "intensive care coordination, crisis
services, and intensive behavioral services and supports that are
necessary to correct or ameliorate the Plaintiffs' mental illnesses
or conditions." They allege that, instead, LDH only provides basic
mental health interventions, such as medication management and
infrequent counseling.
As a result, Medicaid-eligible children requiring intensive mental
health care are untreated and, when they inevitably experience
mental health crises, are forced to seek emergency care or, worse,
psychiatric institutionalization. Plaintiffs contend that LDH's
failure to provide IHCBS violates their right to medically
necessary treatment under Title XIX of the Social Security Act, 42
U.S.C.A. Section 1396a ("Medicaid Act"), and, further, violates
their right to treatment in the least restrictive setting under
Title II of the Americans With Disabilities Act, 42 U.S.C. Section
12132, et seq. ("ADA"), and Section 504 of the Rehabilitation Act,
29 U.S.C. Section 701 ("RA").
The Plaintiffs filed their original class action complaint on Nov.
7, 2019. Based on the foregoing allegations, the Plaintiffs
contend that Defendants have violated the Medicaid Act's EPSDT
Services provisions discussed, and the Medicaid Act's requirement
that all ESPDT Services be provided with "reasonable promptness,"
42 U.S.C. Section 1396a(a)(8) (Counts I, II). They further contend
that the Defendants' failure to provide IHCBS violates their right
to mental health treatment in the most integrated setting
appropriate, under the ADA and RA (Counts III, IV).
The Plaintiffs seek certification of an injunction class under
Federal Rule of Civil Procedure 23(a) and (b)(2); a declaration
that Defendants have violated the Medicaid Act, the ADA, and the
RA; and a permanent injunction requiring the Defendants to
"establish and implement policies, procedures, and practices to
ensure the provision of intensive home and community-based mental
health services to the Plaintiffs and the Class in the most
integrated setting appropriate to their needs."
On Nov. 27, 2019, the Plaintiffs' filed their First Amended
Complaint, adding Plaintiff F.F.
On June 23, 2020, the Court granted in part the Defendants' Motion
for More Definite Statement Pursuant to Rule 12(e), and ordered the
Plaintiffs to supplement their First Amended Complaint to provide
"additional information regarding specific discriminatory acts
allegedly committed by the Defendants." Consistent with the
Court's June 23 Order, the Plaintiffs filed the operative SAC on
July 7, 2020.
On July 21, 2020, Defendants filed their Answer to the Plaintiffs'
SAC.
On Sept. 28, 2020, the Plaintiffs' filed the instant Renewed Motion
for Class Certification. They seek class certification to pursue
claims on behalf of: "All Medicaid-eligible youth under the age of
21 in the State of Louisiana who are diagnosed with a mental
illness or condition, not attributable to an intellectual or
developmental disability, and who are eligible for, but not
receiving, intensive home and community based (mental health)
services."
The Defendants oppose the Plaintiffs' Motion.
Judge Jackson concludes that the Plaintiffs have demonstrated that
the proposed class meets all requirements of Rule 23(a) and Rule
23(b)(2). Further, judicial economy is served by certification of
the class. The evidence needed to prove the systemic failures and
discriminatory impact of the Defendants' policies will be
substantially the same for all putative class members. Class
certification allows for both sides to conserve resources and
efficiently resolve the factual and legal issues presented by the
class.
Accordingly, Judge Jackson grants the Plaintiffs' Renewed Motion
For Class Certification.
The class is defined as follows: All Medicaid-eligible youth under
the age of 21 in the State of Louisiana (1) who have been diagnosed
with a mental health or behavioral disorder, not attributable to an
intellectual or developmental disability, and (2) for whom a
licensed practitioner of the healing arts has recommended intensive
home- and community-based services to correct or ameliorate their
disorders.
The Named Plaintiffs, by and through their legal representatives,
are designated as the class representatives, and the Plaintiffs'
counsel are designated as the class counsel.
Pursuant to Rule 23(c)(2)(A), within 30 days of the date of the
Order, the Plaintiffs will file a motion for approval of their
proposed form of class notice and their notice program. If the
Notice Motion is opposed by any party, that party will file a brief
in opposition to the Notice Motion no later than 14 days after the
filing of the Notice Motion.
The matter is referred to the Magistrate Judge for entry of a
Scheduling Order.
A full-text copy of the Court's May 25, 2021 Ruling & Order is
available at https://tinyurl.com/2r28v86w from Leagle.com.
MICROCHIP TECH: Discovery Ongoing in Jackson Putative Class Suit
----------------------------------------------------------------
Microchip Technology Inc. said in its Form 10-K report filed with
the U.S. Securities and Exchange Commission on May 18, 2021, for
the fiscal year ended March 31, 2021, that discovery is ongoing in
the putative class action suit entitled, Jackson v. Microchip
Technology Inc., et al., Case No. 2:18-cv-02914-JJT.
Beginning on September 14, 2018, the Company and certain of its
officers were named in two putative shareholder class action
lawsuits filed in the United States District Court for the District
of Arizona, captioned Jackson v. Microchip Technology Inc., et al.,
Case No. 2:18-cv-02914-ROS and Maknissian v. Microchip Technology
Inc., et al., Case No. 2:18-cv-02924-JJT.
On November 13, 2018, the Maknissian complaint was voluntarily
dismissed.
On December 11, 2018, the Court issued an order appointing the lead
plaintiff in the Jackson matter. An amended complaint was filed on
February 22, 2019.
The complaint is allegedly brought on behalf of a putative class of
purchasers of Microchip common stock between March 2, 2018 and
August 9, 2018.
The complaint asserts claims for alleged violations of the federal
securities laws and alleges that the defendants issued materially
false and misleading statements and failed to disclose material
adverse facts about the Company's business, operations, and
prospects during the putative class period.
The complaint seeks, among other things, compensatory damages and
attorneys' fees and costs on behalf of the putative class.
Defendants filed a motion to dismiss the amended complaint on April
1, 2019, which motion was granted in part and denied in part on
March 11, 2020.
Plaintiff filed a motion for class certification, which was granted
by the Court.
Discovery is ongoing.
Microchip Technology Inc. develops and manufactures semiconductor
products for various embedded control applications worldwide. The
company, which was incorporated in 1989, is based in Chandler,
Arizona.
MIDDLE TENNESSEE: Form of Class Notice in Hawkins Suit Approved
---------------------------------------------------------------
In the case, ALVIN HAWKINS, Plaintiff v. MIDDLE TENNESSEE PIZZA,
INC., et al., Defendant, Case No. 3:21-cv-00266 (M.D. Tenn.), Judge
Waverly D. Crenshaw, Jr., of the U.S. District Court for the Middle
District of Tennessee, Nashville Division, granted the parties'
unopposed Motion to Approve Stipulated Form of Notice of Collective
Action and to Stay Proceedings.
Plaintiff Hawkins worked as a Middle Tennessee Pizza delivery
driver. Middle Tennessee Pizza operates at least eleven Domino's
Pizza locations in Tennessee. Hawkins filed the action on behalf
of himself and similarly situated employees consisting of delivery
drivers at the Middle Tennessee Pizza locations in Tennessee. He
Plaintiff argues that the Defendant "repeatedly and willfully
violated the Fair Labor Standards Act by failing to adequately
reimburse delivery drivers for their delivery-related expenses,"
and accordingly "failing to pay them the legally mandated minimum
wages for all hours worked."
Hawkins brought the collective action against the Defendants on
March 31, 2021, alleging that they violated the FLSA. On May 19,
2021, the parties brought the instant, unopposed Motion to
conditionally certify and to stay the proceedings pending
settlement.
Analysis
A. Conditional Certification
The Defendant consents to an Order conditionally certifying this
case as a collective action under the FLSA.
Judge Crenshaw nonetheless notes that the Plaintiff has satisfied
the low bar and met the "modest factual showing" required for the
conditional certification stage. The Plaintiff alleges that the
Defendants' stores require their delivery drivers to drive their
personal cars to complete deliveries for them. He also alleges
that the Defendants' stores failed to properly reimburse delivery
drivers for their delivery-related expenses, and instead have
adopted a policy of reimbursing drivers a routinely-evaluated
per-mile rate based on store location and existing gas prices that
is less than the IRS standard business mileage rate. He alleges
that all delivery drivers at the Defendants' Domino's stores,
including the Plaintiff, have been subject to the same or similar
employment policies and practices.
Accordingly, the Judge will grant conditional certification of a
collective action by a class defined as all current and former
delivery drivers employed by the Defendant's Domino's stores owned,
operated, and controlled by the Defendants in the state of
Tennessee from May 10, 2018 to the present.
B. Notice, Method of Dissemination, and Opt-In Period
The Plaintiff next asks the Court to approve the stipulated form of
notice. The parties request the Court authorizes the Notice of
Opportunity to Join Unpaid Wage Lawsuit.
Having reviewed the notice, Judge Crenshaw finds it is timely,
accurate, and informative. The stipulated notice clearly informs
putative class members of their rights and how they can elect to
participate in the action. The notice also adequately describes
the legal claims, notes that the Defendant is defending against
those claims, and references the legal effects of joining and not
joining the suit. Accordingly, the Judge approves the notice.
The parties desire to send the notice by email and U.S. mail
"unless the notice is returned as undeliverable." In that case,
the Plaintiff's counsel or a case management administrator, at the
Plaintiff's expense, will process the name of the delivery driver
through a Change of Address database, and will re-send the notice
to any new address identified. Neither party objects to this form
of notice. Accordingly, the Judge finds that such notice is
appropriate in the case.
The proposed notice suggests a 60-day opt-in period. As with dual
notice, courts within the Sixth Circuit have routinely approved
60-day op-in periods. The Judge finds this opt-in period to be
reasonable, especially in light of the case law and because neither
party objects.
Last, the parties request that the Court stay proceedings,
including the Defendants' obligation to file an Answer, while they
attempt to reach a settlement. Accordingly, the Judge will stay
the proceedings.
Conclusion
For the foregoing reasons, Judge Crenshaw grants the parties'
unopposed Motion to Approve Stipulated Form of Notice of Collective
Action and to Stay Proceedings.
Judge Crenshaw conditionally certifies the following collective
action class: All current and former delivery drivers employed by
Defendant's Domino's stores owned, operated, and controlled by
Defendants in the state of Tennessee from May 10, 2018 to the
present.
The Judge approves the stipulated Form of Notice of Collective
Action. The notice will be sent by regular mail and email in the
form stipulated by the parties, and putative opt-in Plaintiffs will
have 60 days from the date they receive notice to return the
consent form to the Plaintiffs' counsel.
The action is stayed pending the parties' settlement negotiations.
As agreed by the parties, the parties will file a notice with the
Court in the event settlement is not achieved to schedule a case
management conference no later than 75 days after the close of the
opt-in period.
A full-text copy of the Court's May 24, 2021 Memorandum Opinion &
Order is available at https://tinyurl.com/2p763zwv from
Leagle.com.
MIJ INC: Conditional Certification of Class in Ford Suit Denied
---------------------------------------------------------------
In the case, ROBERTA FORD, On Behalf of Herself and All Other
Similarly Situated Individuals, Plaintiff v. MIJ, INC., d/b/a
WIGGLES GENTLEMEN'S CLUB, Defendant, Cause No. 2:20-CV-353-HAB
(N.D. Ind.), Judge Holly A. Brady of the U.S. District Court for
the Northern District of Indiana, Fort Wayne Division, denied:
(i) the Plaintiff's Motion for Conditional Certification of
for Notice to Potential Plaintiffs and for Conditional
Certification; and
(ii) the Defendant's Motion to Strike Portions of Plaintiff's
Sworn Declaration in Support of Plaintiff's Motion for
Conditional Certification.
According to the Plaintiff, the Defendant mischaracterized her and
other strippers as independent contractors rather than employees.
To right this alleged wrong, the Plaintiff has brought two causes
of action: a collective action under the Fair Labor Standards Act
("FLSA"); and a class action asserting violations of Indiana
statute.
The Plaintiff worked as an exotic dancer at Wiggles Gentlemen's
Club from 2006 through March 2019. From September 2017 through the
end of her employment, at least 50 other women worked as exotic
dancers at Wiggles. Because Wiggles characterized all exotic
dancers as independent contractors, Wiggles paid these women no
wages.
Wiggles had the full right and authority to control and direct all
aspects of the dancers' job duties. This included customer pricing
for performances, scheduling, the promulgation of rules and
policies, and discipline for violation of those rules and policies.
Wiggles also had the sole discretion to hire and fire dancers.
On Oct. 2, 2020, the Plaintiff filed her Class and Collective
Action Complaint asserting claims on her own behalf and on behalf
of all other similarly situated individuals under the FLSA and
Indiana's wage payment statutes. She filed the instant motion for
conditional certification of the FLSA collective action on Dec. 30,
2020. The motion has now been fully briefed.
Judge Brady concedes that the Plaintiff has provided her own
declaration in support of her motion. The Plaintiff's declaration,
however, is little more than a less-detailed recitation of the
allegations in her Complaint. It does not identify a single
putative plaintiff other than herself. It makes broad allegations
regarding the Defendant's treatment of other dancers without the
slightest indication of how the Plaintiff came about this
information. The Judge finds, as other courts have, that this kind
of unsupported, under-oath regurgitation of the complaint is
insufficient to carry the Plaintiff's burden.
Perhaps the Plaintiff's allegations are supported by stacks of
documents. It may be that she has evidence regarding how the
Defendant treated other dancers. Dozens of other women may be
waiting in the wings, each with stories like those of the
Plaintiff. But none of those scenarios are before the Court.
Instead, Judge Brady has little more than the vague,
uncorroborated, conclusory statements of the Plaintiff that do
little more than parrot the allegations in the Complaint. At this
stage, then, conditional certification is inappropriate.
For these reasons, Judge Brady denied the Plaintiff's Motion for
Conditional Certification and the Defendant's Motion to Strike.
A full-text copy of the Court's May 25, 2021 Opinion & Order is
available at https://tinyurl.com/4sxyx34u from Leagle.com.
MYMD PHARMACEUTICALS: Liu Putative Class Suit Dismissed
-------------------------------------------------------
MyMD Pharmaceuticals, Inc. said in its Form 10-Q Report filed with
the Securities and Exchange Commission on May 18, 2021, for the
quarterly period ended March 31, 2021, that the merger related
suits including Danny Lui v. Akers Biosciences, Inc., et al., No.
GLO-C-000006-21 (N.J. Super. Ct., Ch. Div.), a putative class
action suit, has been dismissed.
On April 16, 2021, pursuant to the previously announced Agreement
and Plan of Merger and Reorganization, dated November 11, 2020 (the
"Original Merger Agreement"), as amended by Amendment No. 1
thereto, dated March 16, 2021, by and among MyMD Pharmaceuticals,
Inc., a New Jersey corporation previously known as Akers
Biosciences, Inc., XYZ Merger Sub Inc., a Florida corporation and a
wholly owned subsidiary of the Company ("Merger Sub"), and MyMD
Pharmaceuticals (Florida), Inc., a Florida corporation previously
known as MyMD Pharmaceuticals, Inc. ("MyMD Florida"), Merger Sub
was merged with and into MyMD Florida, with MyMD Florida continuing
after the merger as the surviving entity and a wholly owned
subsidiary of the Company.
Between January 22, 2021 and March 18, 2021, nine alleged Akers
Biosciences, Inc. stockholders filed separate actions in the state
and federal courts of New York, New Jersey, and Pennsylvania
against Akers Biosciences, Inc. and the members of its board of
directors, respectively captioned as follows: (i) Douglas McClain
v. Akers Biosciences, Inc., et al., No. 650497/2021 (Sup. Ct., N.Y.
Cty.); (ii) Owen Murphy v. Akers Biosciences, Inc., et al., No.
650545/2021 (Sup. Ct., N.Y. Cty.); (iii) Sue Gee Cheng v. Akers
Biosciences, Inc., et al., No. 1:21-cv-01110 (S.D.N.Y.); (iv) Danny
Lui v. Akers Biosciences, Inc., et al., No. GLO-C-000006-21 (N.J.
Super. Ct., Ch. Div.); (v) Alan Misenheimer v. Akers Biosciences,
Inc., et al., No. 1:21-cv-02310 (D.N.J.); (vi) Robert Wilhelm v.
Akers Biosciences, Inc., et al., No. 1:21-cv-04616 (D.N.J.); (vii)
Adam Franchi v. Akers Biosciences, Inc., et al., No. 1:21-cv-04696
(D.N.J.); (viii) Cody McBeath v. Akers Biosciences, Inc., et al.,
No. 2:21-cv-01151 (E.D. Pa.); and (ix) Ray Craven v. Akers
Biosciences, Inc., et al., No. 1:21-cv-05762 (D.N.J.)
(collectively, the "MYMD Merger Complaints").
The Lui action is styled as a putative class action brought on
behalf of the plaintiff and other similarly situated stockholders,
while the other eight actions are brought solely on behalf of the
individual stockholders.
The MYMD Merger Complaints generally assert that Akers Biosciences,
Inc. and its board of directors failed to disclose allegedly
material information in the joint proxy and consent solicitation
statement/prospectus and seek an order enjoining or unwinding the
consummation of the Merger Agreement and awarding damages.
As reflected on page 61 of the Company's Amendment No. 1 to Form
S-4, Registration No. 333-252181, filed on March 19, 2021, each of
the nine MYMD Merger Complaints sought an order enjoining or
unwinding consummation of the Merger Agreement on the basis of
alleged material omissions in the Company's preliminary S-4 filed
on January 15, 2021. The Amended S-4 contains, among other things,
supplemental disclosures addressing these purported material
omissions.
Prior to the April 15, 2021 special meeting of Akers Biosciences,
Inc.'s stockholders to approve the proposed merger, none of the
plaintiffs sought to enjoin the transaction, which was approved at
the special meeting.
As of May 17, 2021, eight of the nine MYMD Merger Complaints have
been voluntarily dismissed (the remaining pending case is Ray
Craven v. Akers Biosciences, Inc., et al., No. 1:21-cv-05762
(D.N.J.)).
The defendants believe that the claims asserted in the remaining
MYMD Merger Complaint are without merit and intend to appropriately
defend themselves against them. Accordingly, the Company does not
expect that these claims will have a material adverse effect on its
financial condition or results of operations. All legal fees
incurred were expensed as and when incurred.
MyMD Pharmaceuticals, Inc. is a developer of rapid health
information technologies but since March 2020, have been primarily
focused on the development of a vaccine candidate against
SARS-CoV-2, a coronavirus currently causing a pandemic throughout
the world ("COVID-19"). The company is based in Baltimore
Maryland.
NATIONS RECOVERY: Class Settlement in Esposito Wins Final Approval
------------------------------------------------------------------
In the case, BRUCE F. ESPOSITO, INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED, Plaintiff v. NATIONS RECOVERY CENTER,
INC., Defendant, Case No. 3:18-cv-02089 (VLB) (D. Conn.), Judge
Vanessa L. Bryant of the U.S. District Court for the District of
Connecticut granted the Plaintiff's request for final approval of
class action settlement, attorneys' fees, and class representative
fees.
Before the Court is the Plaintiff's request for final approval of
class action settlement, attorneys' fees, and class representative
fees.
The matter was initiated by a complaint filed on Dec. 20, 2018, by
the named Plaintiff, Bruce F. Esposito, individually and on behalf
of all other similarly situated. The Plaintiffs allege that
Nations Recovery engaged in unauthorized collection activity by
sending collection letters to Connecticut residents that improperly
assessed post-judgment interest. By doing so, the Plaintiffs
allege that Nations Recovery violated the Fair Debt Collection
Practices Act ("FDCPA"), 15 U.S.C. Section 1692, et seq., in that
the "natural consequence of" its activity was "to harass, oppress,
or abuse any person in connection with the collection of a debt" in
violation of 15 U.S.C. Section 1692d, its actions constituted "an
attempt to collect an amount not authorized by agreement or
permitted by law" in violation of 15 U.S.C. Section 1692f(1), and
constituted an improper "statement that an amount certain is owing,
which includes interest not awarded by a court or interest at a
rate not awarded by a court," in violation of 15 U.S.C. Section
1692e(2)(A).
The class action has been brought on behalf of all Connecticut
residents from whom Defendant attempted to collect money with
post-judgment interest allegedly improperly added to the amount
owed. On June 26, 2020, the Court entered an order preliminarily
approving the proposed settlement agreement, form, and manner of
notice. It held a remote fairness hearing on Dec. 10, 2020. As of
that date, no class member objected to the settlement or requested
exclusion. The Defendant has objected to the request for
attorneys' fees in certain respects but not the request for class
representative fees.
The class consists of 61 consumers in Connecticut from whom
Defendant attempted to collect debts in the year before the filing
of the class action complaint. Of the 61, there were 33 members
that were unreachable. None of the members objected or opted out.
There were 28 timely claim checks cashed and zero untimely claims.
The Defendant agreed to establish a settlement fund of $10,000 for
the class members which could be claimed by cashing the check sent
to each member. The 28 class members that cashed their checks are
therefore entitled to a payment of $357.14 each. Additionally, the
Defendant has agreed that the named plaintiff, Bruce F. Esposito,
is to receive $3,000 for a class representative fee. The Defendant
has also agreed to assume the $3,194.89 in costs it incurred in
settlement administration costs.
Under the FDCPA, there is a statutory limit on the amount a
successful class may recover. A successful class may recover
damages up to the lesser of $500,000 or 1% of a Defendant's net
worth. At the time of the settlement agreement, Defendant Nations
Recovery had a net worth of approximately $1 million, making
$10,000 in settlement funds available to the class.
Analysis
A. Class Certification
As discussed in the Court's June 26, 2020 Order certifying the
class, the numerosity, commonality, typicality, and adequacy of
representation requirements of Federal Rule of Civil Procedure 23
for class certification were, and continue to be, met. In
addition, it found, and continues to find, that a class action is
the superior method for a fair and efficient adjudication of this
controversy under Federal Rule of Civil Procedure 23(b)(3). In
sum, nothing has changed since the Court certified the proposed
class, including during the conduct of the December 2020 Fairness
Hearing, that might call into question the Court's decision to
certify the proposed class. The class remains certified.
B. Settlement Agreement
Judge Bryant holds that the settlement is more than fair. As
noted, the settlement confers a substantial cash benefit upon the
Class -- a relatively low number of class members will receive 1%
of Defendant's net worth, the maximum permitted by federal statute.
Experienced counsel, who negotiated at arm's length and possess
all the relevant information, strongly recommend the settlement to
the Court. Each side recognizes the risk of failure and the high
costs attendant to continued litigation. The legal and factual
difficulties that Plaintiff foresees with respect to liability and
damages already have been described. Add to those predictable
difficulties the unpredictability of a jury trial -- where
witnesses or jurors could react in unforeseen ways -- and the
tremendous benefit to the Class of the present settlement becomes
even more apparent.
Litigation risk, moreover, does not end with the trial. In the
case, post-trial motions and appeals would not be unlikely. Where
liability is highly contested, it is likely that any judgment
entered would have been the subject of post-trial motions and
appeals, further prolonging the litigation and reducing the value
of any recovery.
C. Attorneys' and Class Representative Fees
As an initial matter, Judge Bryant holds that it appears to be good
news that the Defendant contests the Plaintiff's application for
attorneys' fees as it indicates that it is unlikely that the
parties are colluding to settle the case to the detriment of the
class. Additionally, the Defendant does not contest that the
Plaintiff's attorneys' fee requests is in any way improper or
unwarranted, but rather simply requests an approximately 10%
reduction based on hourly rate and another 5% based on vague or
block-billed entries.
The Judge finds that an hourly rate of $450/hour for Attorney
Faulkner is not unreasonable, especially given the extremely
efficient and successful way in which Attorney Faulkner handled the
case. As for Attorney Foster, the Judge finds that his requested
$400/hour is reasonable given his 30 years' experience in complex
litigation matters, his prior service as a Partner at Squire,
Patton Boggs in New York where he billed out at $585/hour, and his
excellent and successful work in the case.
Since the Judge has found that (i) the requested hourly rates by
Attorneys Faulkner and Foster and their staff to be reasonable; and
(ii) the time spent by Attorneys Faulkner and Foster and their
staff to be reasonable, the presumptively reasonable fee is
appropriately set at $30,492.50 plus costs of $454.95, for a total
of $30,947.45. Further, the Judge sees no reason why the
presumptively reasonable fee should be further adjusted downward,
apart from the paralegal clerical work previously noted.
The Plaintiff submits a supplemental fee request seeking an award
of $5,920 for work performed by Attorney Foster, but not Attorney
Faulkner, in preparing a Reply to the Defendant's Opposition to
Plaintiff's Motion for Attorneys' Fees, in preparing for and
attending the Fairness Hearing conducted by the Court on December
10, 2020, and in preparing the supplemental fee application.
The Defendant does not object to the time spent or the adequacy of
the billing entries for Attorney Foster's time. Its only objection
is to Attorney Foster's hourly rate of $400/hour. But, the Judge
has already found Attorney Foster's hourly rate to be reasonable,
and so grants the Plaintiff's Supplemental Motion for Attorneys'
Fees.
The Settlement Agreement also includes an award of $3,000 to the
class representative in recognition of his efforts on behalf of the
class. The requested award is consistent with the range of awards
made in similar cases. Therefore, the Judge approves the $3,000
class representative fee for the named Plaintiff.
Conclusion
Judge Bryant finally approves the settlement as set forth in the
Settlement Agreement as well as the requested attorneys' and class
representative fees, minus the fees for paralegal clerical work.
The total attorneys' fee award is $36,867.45, consisting of 29.25
hours for Attorney Faulkner at $450/hour = $13,162.50, 40.9 hours
for Attorney Foster at $400/hour = $16,360, 9.7 hours for Law Clerk
Kayla Tenore at $100/hour = $970, plus costs of $454.95, plus the
supplemental fee award of $5920. For the foregoing reasons, the
Plaintiff's motion for final approval is granted. The Clerk is
directed to close the case.
A full-text copy of the Court's May 25, 2021 Memorandum of Decision
is available at https://tinyurl.com/2ppfmvhn from Leagle.com.
NORDSON CORP: Settlement Reached in Ortiz Suit
----------------------------------------------
Nordson Corporation said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 28, 2021, for the
quarterly period ended April 30, 2021, that the parties in a class
action lawsuit initiated by a former employee named Ortiz have
agreed to settle the dispute, subject to the execution of a written
settlement agreement and court approval.
On February 22, 2019, a former employee, Mr. Ortiz, filed a
purported class action lawsuit in the San Diego County Superior
Court, California, against Nordson Asymtek, Inc. and Nordson
Corporation, alleging various violations of the California Labor
Code.
Plaintiff seeks, among other things, an unspecified amount for
unpaid wages, actual, consequential and incidental losses,
penalties, and attorneys' fees and costs.
Following mediation in June 2020, the parties agreed to settle the
lawsuit, subject to the execution of a written settlement agreement
and court approval. If the settlement agreement is approved, the
class action lawsuit will be resolved.
Management believes, based on currently available information, that
the ultimate outcome of the proceeding described above will not
have a material adverse effect on the Company's financial condition
or results of operations.
No further updates were provided in the Company's SEC report.
Nordson Corporation engineers, manufactures, and markets products
and systems to dispense, apply, and control adhesives, coatings,
polymers, sealants, biomaterials, and other fluids worldwide.
Nordson Corporation was founded in 1935 and is headquartered in
Westlake, Ohio.
NORTONLIFELOCK INC: June 14 Trial Date on Securities Suit Vacated
-----------------------------------------------------------------
NortonLifeLock, Inc. said in its Form 10-K report filed with the
U.S. Securities and Exchange Commission on May 21, 2021, for the
fiscal year ended April 2, 2021, that the Court vacated the June
14, 2021 trial date and the trial is now continued indefinitely.
Securities class action lawsuits, which have since been
consolidated, were filed in May 2018 against the company and
certain of its former officers, in the U.S. District Court for the
Northern District of California.
The lead plaintiff's consolidated amended complaint alleged that,
during a purported class period of May 11, 2017 to August 2, 2018,
defendants made false and misleading statements in violation of
Sections 10(b) and 20(a), and that certain individuals violated
Section 20A, of the Securities Exchange Act.
Defendants filed motions to dismiss, which the Court granted in an
order dated June 14, 2019.
Pursuant to that order, plaintiff filed a motion seeking leave to
amend and a proposed first amended complaint on July 11, 2019.
The Court granted the motion in part on October 2, 2019 and the
first amended complaint was filed on October 11, 2019. The Court's
order dismissed certain claims against certain of our former
officers. Defendants filed answers on November 7, 2019.
On April 20, 2021, to resolve an alleged conflict of interest
raised with respect to the lead plaintiff and its counsel, the
Court ordered a second Class Notice disclosing the circumstances of
the alleged conflict and providing a further period for class
members to opt out, which will conclude on July 2, 2021. The
initial class opt out period closed on August 25, 2020.
In an April 29, 2021 Order, the Court vacated the June 14, 2021
trial date and the trial is now continued indefinitely. A
settlement conference has been set for May 24, 2021.
NortonLifeLock, Inc. engages in the provision of security, storage,
and systems management solutions. It operates through Enterprise
Security and Consumer Digital Safety segments. The Consumer Digital
Safety segment provides solutions to protect information, devices,
networks and the identities of consumers. The company is based in
Tempe, Arizona.
NVIDIA CORP: Dismissal of Securities Class Suit Under Appeal
------------------------------------------------------------
NVIDIA Corporation said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 26, 2021, for the
quarterly period ended May 2, 2021, that the appeal in the in the
putative class action suit entitled, In Re NVIDIA Corporation
Securities Litigation, is pending.
The plaintiffs in the putative securities class action lawsuit,
captioned 4:18-cv-07669-HSG, initially filed on December 21, 2018
in the United States District Court for the Northern District of
California, and titled In Re NVIDIA Corporation Securities
Litigation, filed an amended complaint on May 13, 2020.
The amended complaint asserted that NVIDIA and certain NVIDIA
executives violated Section 10(b) of the Securities Exchange Act of
1934, as amended, or the Exchange Act, and SEC Rule 10b-5, by
making materially false or misleading statements related to channel
inventory and the impact of cryptocurrency mining on GPU demand
between May 10, 2017 and November 14, 2018.
Plaintiffs also alleged that the NVIDIA executives who they named
as defendants violated Section 20(a) of the Exchange Act.
Plaintiffs sought class certification, an award of unspecified
compensatory damages, an award of reasonable costs and expenses,
including attorneys' fees and expert fees, and further relief as
the Court may deem just and proper.
On March 2, 2021, the district court granted NVIDIA's motion to
dismiss the complaint without leave to amend, entered judgment in
favor of NVIDIA and closed the case.
On March 30, 2021, plaintiffs filed a notice of appeal from
judgment in the United States Court of Appeals for the Ninth
Circuit, case number 21-15604.
NVIDIA Corporation operates as a visual computing company
worldwide. It operates in two segments, GPU and Tegra Processor.
The company was founded in 1993 and is headquartered in Santa
Clara, California.
PAPA JOHN'S: Faces Suit Over Delivery Drivers' Improper Wage Pay
----------------------------------------------------------------
nvdaily.com reports that a federal judge approved a class-action
lawsuit against a company that owns 22 Papa John's franchises.
The lawsuit, filed in October in U.S. District Court in
Harrisonburg by a former delivery driver in Staunton and
Waynesboro, claims that drivers were not properly compensated by
the pizza chain for using their personal vehicles.
"Instead of reimbursing its delivery drivers for the reasonably
approximate costs of the business use of their vehicles, defendant
uses a flawed method to determine reimbursement rates that provides
such an unreasonably low rate beneath any reasonable approximation
of the expenses they incur that the delivery drivers' unreimbursed
expenses cause their net wages to fall below the federal minimum
wage during some or all workweeks," the lawsuit states.
The lawsuit was filed by attorney Cary Powell Moseley on behalf of
Michael Derek Compton against Winchester-based North Central
Virginia Restaurants.
The company owns nearly two dozen franchises in Maryland, Virginia
and West Virginia.
Attorneys in the case couldn't be reached for comment.
The lawsuit states Compton worked for Papa John's from August 2019
through September 2020.
His weighted hourly wage was about $7.75. The federal minimum wage
is $7.25 an hour.
The lawsuit states that Compton received $1.34 per delivery for
reimbursement for vehicle use. An average delivery for Compton,
according to the lawsuit, was about 6 miles, bringing the average
reimbursement to $0.22 per mile.
Compton, according to the lawsuit, averaged two deliveries per
hour.
At the IRS business mileage rate of roughly $0.57, the lawsuit
claims Compton was under-reimbursed by $2.13 or more per delivery,
effectively giving the difference to the company.
"Thus, [Compton] consistently 'kicked back' to the defendant
approximately $4.26 per hour ($2.13 per delivery x 2 deliveries per
hour), for an effective hourly wage rate of about $3.49 ($7.75 -
$4.26 per hour 'kick back') or less," the lawsuit says.
The plaintiff asked for class-action filing because the lawsuit
claims all drivers were reimbursed the same or in a similar manner.
[GN]
PELOTON INTERACTIVE: Kessler Topaz Reminds of June 28 Deadline
--------------------------------------------------------------
The law firm of Kessler Topaz Meltzer & Check, LLP reminds
investors of Peloton Interactive, Inc. that a securities fraud
class action lawsuit has been filed on behalf of those who
purchased or acquired Peloton securities between September 11, 2020
and May 5, 2021, inclusive (the "Class Period").
Peloton provides interactive fitness products such as the Peloton
Bike and the Peloton Tread+ and Tread, which include touchscreens
that stream live and on-demand classes. Peloton also provides
connected fitness subscriptions and access to all live and
on-demand classes. Peloton launched the Tread+ treadmill in 2018.
At that time, it was called the "Tread." Peloton renamed its
signature treadmill in September 2020 to "Tread +."
The Class Period commences on September 11, 2020, when Peloton
filed its annual report on a Form 10-K for the year ended June 30,
2020. Throughout the Class Period, the defendants asserted that the
safety and well-being of its customers was a priority.
However, the truth was revealed on April 17, 2021, a day the market
was closed, when the U.S. Consumer Product Safety Commission
("CPSC") issued a press release entitled "CPSC Warns Consumers:
Stop Using the Peloton Tread+" alerting the public to dangers,
including death, associated with the Peloton Tread+. In the press
release, the CPSC warned "consumers about the danger of popular
Peloton Tread+ exercise machine after multiple incidents of small
children and a pet being injured beneath the machines. The [CPSC]
has found that the public health and safety requires this notice to
warn the public quickly of the hazard." The CPSC further stated
that it "is aware of 39 incidents including one death. CPSC staff
believes the Peloton Tread+ poses serious risks to children for
abrasions, fractures, and death. In light of multiple reports of
children becoming entrapped, pinned, and pulled under the rear
roller of the product, CPSC urges consumers with children at home
to stop using the product immediately."
On April 18, 2021, a day the market was closed, John Foley,
Peloton's Chief Executive Officer, wrote a letter that was emailed
to Tread+ owners and published on Peloton's website stating that
Peloton had "no intention" to stop selling or to recall the Tread+.
Following this news, Peloton's stock price fell $16.28 per share,
or more than 14%, over the next three trading days to close at
$99.93 per share on April 21, 2021.
Then, on Wednesday, May 5, 2021, Peloton announced voluntary
recalls of both its Tread+ and Tread treadmill machines over safety
concerns. Peloton also advised customers who have the products to
immediately stop using them and contact Peloton for a full refund.
Peloton's Chief Executive Officer, John Foley said in a statement,
"I want to be clear, Peloton made a mistake in our initial response
to the Consumer Product Safety Commission's request that we recall
the Tread+."
On this news, Peloton's stock price fell $14.08 per share, or 14%,
to close at $82.62 per share on May 5, 2021.
The complaint alleges that throughout the Class Period, the
defendants made false and/or misleading statements and/or failed to
disclose that: (1) in addition to the tragic death of a child,
Peloton's Tread+ had caused a serious safety threat to children and
pets as there were multiple incidents of injury to both; (2) safety
was not a priority to Peloton as the defendants were aware of
serious injuries and death resulting from the Tread+ yet did not
recall or suggest a halt of the use of the Tread+; (3) as a result
of the safety concerns, the CPSC declared the Tread+ posed a
serious risk to public health and safety resulting in its urgent
recommendation for consumers with small children to cease using the
Tread+; (4) the CPSC also found a safety threat to Tread+ users if
they lost their balance; and (5) as a result of the foregoing, the
defendants' statements about Peloton's business, operations, and
prospects, were materially false and misleading and/or lacked a
reasonable basis at all relevant times.
Peloton investors may, no later than June 28, 2021, seek to be
appointed as a lead plaintiff representative of the class through
Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose
to do nothing and remain an absent class member. A lead plaintiff
is a representative party who acts on behalf of all class members
in directing the litigation. In order to be appointed as a lead
plaintiff, the Court must determine that the class member's claim
is typical of the claims of other class members, and that the class
member will adequately represent the class. Your ability to share
in any recovery is not affected by the decision of whether or not
to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actiaons in
state and federal courts throughout the country involving
securities fraud, breaches of fiduciary duties and other violations
of state and federal law. Kessler Topaz Meltzer & Check, LLP is a
driving force behind corporate governance reform, and has recovered
billions of dollars on behalf of institutional and individual
investors from the United States and around the world. The firm
represents investors, consumers and whistleblowers (private
citizens who report fraudulent practices against the government and
share in the recovery of government dollars). The complaint in this
action was not filed by Kessler Topaz Meltzer & Check, LLP. For
more information about Kessler Topaz Meltzer & Check, LLP please
visit www.ktmc.com. [GN]
PORCH GROUP: Former Employee's Suit v. HireAHelper Underway
-----------------------------------------------------------
Porch Group, Inc said in its Form 10-K/A report filed with the U.S.
Securities and Exchange Commission on May 19, 2021, for the fiscal
year ended December 31, 2020, that HireAHelper(TM) continues to
defend a putative class action suit initiated by its former
employee.
A former employee of HireAHelper(TM) filed a complaint in San Diego
County Superior Court asserting putative class action claims for
failure to pay overtime, failure to pay compensation at the time of
separation and unfair business practices in violation of California
law.
HireAHelper(TM) was served with the complaint in December 2020 and
on January 28, 2021 Defendants removed the case to the United
States District Court for the Southern District of California.
The plaintiff seeks to represent all current and former non-exempt
employees of HireAHelper(TM) and Legacy Porch in the State of
California during the relevant time period. This action is at an
early stage in the litigation process.
This action is at an early stage in the litigation process and
Porch is unable to determine the likelihood of an unfavorable
outcome, although it is reasonably possible that the outcome may be
unfavorable.
Porch is unable to provide an estimate of the range or amount of
potential loss (if the outcome should be unfavorable), however the
parties have agreed to explore resolution by way of a private
non-binding mediation in the summer or fall of 2021.
Porch intends to contest this case vigorously In addition, in the
ordinary course of business, Porch and its subsidiaries are (or may
become) parties to litigation involving property, personal injury,
contract, intellectual property and other claims, as well as
stockholder derivative actions, class action lawsuits and other
matters. The amounts that may be recovered in such matters may be
subject to insurance coverage.
Porch said, "Although the results of legal proceedings and claims
cannot be predicted with certainty, neither Porch nor any of its
subsidiaries is currently a party to any legal proceedings the
outcome of which, we believe, if determined adversely to us, would
individually or in the aggregate have a material adverse effect on
our business, financial condition or results of operations."
Porch Group, Inc is a vertical software platform for the home,
providing software and services to approximately 11,000 home
services companies, such as home inspectors, moving companies,
utility companies, home insurance, warranty companies, and others.
The company is based in Seattle, Washington.
PRECISION CASTPARTS: Judgment Issued on Murphy's Remaining Claims
-----------------------------------------------------------------
In the case, KEVIN MURPHY, Individually and Behalf of All Others
Similarly Situated, Plaintiff v. PRECISION CASTPARTS CORP., MARK
DONEGAN, and SHAWN R. HAGEL, Defendants, Case No. 3:16-cv-00521-SB
(D. Or.), Magistrate Judge Stacie F. Beckerman of the U.S. District
Court for the District of Oregon grants the Defendants' motion for
reconsideration, and enters summary judgment for the Defendants on
all remaining counts.
AMF Pensions forsakring AB and the Oklahoma Firefighters Pension
and Retirement System ("Lead Plaintiffs") filed an Amended Class
Action Complaint for Violation of the Federal Securities Laws on
behalf of all persons or entities who purchased or otherwise
acquired the publicly traded securities of Precision Castparts
Corp. ("PCC") between May 9, 2013 and Jan. 15, 2015, seeking
remedies under the Securities Exchange Act of 1934, as amended by
the Private Securities Litigation Reform Act of 1995 ("PSLRA").
The Lead Plaintiffs allege that PCC, PCC's Chairman and CEO Mark
Donegan, and PCC's Executive VP and CFO Shawn Hagel, violated
Sections 10(b) and 20(a) of the Exchange Act and Securities and
Exchange Commission ("SEC") Rule 10b-5 promulgated thereunder.
The Lead Plaintiffs allege that the Defendants made 44 statements
during the Class Period that were materially false and misleading,
primarily with respect to PCC's earnings guidance for Fiscal Year
2016 ("FY16"). Their theory of liability is that the Defendants
always knew the FY16 earnings guidance was unattainable because
their financial projections were based on unrealistic assumptions,
and Defendants knew throughout the Class Period that PCC was
failing to achieve the organic growth necessary to meet the target,
in part because PCC's practice of pulling in sales to earlier
quarters was unsustainable and a large customer was continuing to
destock its inventory. The Lead Plaintiffs allege that the
Defendants nevertheless made statements throughout the Class Period
misrepresenting that PCC was achieving anticipated benchmarks en
route to its FY16 target, which created an impression of a state of
affairs materially different from the one that existed.
The Lead Plaintiffs and Defendants filed cross motions for summary
judgment pursuant to FED. R. CIV. P. 56. In its July 3, 2020
Opinion, the Court denied Lead Plaintiffs' motion for partial
summary judgment, and granted in part and denied in part the
Defendants' motion for summary judgment. The Court granted the
Defendants' motion for summary judgment with respect to 26 of the
alleged misstatements (entering summary judgment with respect to
Statements 1-7, 10, 13-14, 16-17, 20-21, 27, 29-33, 35, 38, 40-41,
and 43-44). However, the Court denied the motion with respect to
18 of the challenged statements (denying summary judgment with
respect to Statements 8-9, 11-12, 15, 18-19, 22-26, 28, 34, 36-37,
39, and 42). On Oct. 5, 2020, the Court denied the Defendants'
motion for reconsideration of the Court's July 3, 2020 Opinion.
The Defendants now move the Court to reconsider its opinion in
light of the Ninth Circuit's recent opinion in Wochos v. Tesla,
Inc., 985 F.3d 1180 (9th Cir. 2021). They argue that the Ninth
Circuit's Tesla opinion requires the Court to reconsider its July
3, 2020 Opinion with respect to its analysis of the PSLRA's Safe
Harbor for forward-looking statements and the falsity element of
Section 10(b) of the Exchange Act.
In Tesla, the plaintiffs alleged that Tesla, its Chairman and Chief
Executive Officer Elon Musk, and another officer misled the market
about Tesla's progress in producing its Model 3 in 2017. The
plaintiffs alleged that 15 of the defendants' public statements
about Tesla's goal of manufacturing 5,000 vehicles per week by the
end of 2017 were materially false and misleading because the
defendants knew that the projected level of production was
unattainable. The Ninth Circuit affirmed the district court's
dismissal of the second amended complaint without leave to amend,
holding that the plaintiffs "failed to plead sufficient facts to
avoid the PSLRA's safe harbor or to establish falsity."
Discussion
A. Mr. Donegan's FY16 Target Statements
Judge Beckerman agrees with the Defendants that Musk's
non-actionable statements in Tesla (e.g., "it's coming in as
expected"; "getting pretty close to the bull's-eye"; "there are no
issues"; "preparations are progressing"; "we are on-track") are
indistinguishable from Donegan's FY16 target statements in the
instant case (e.g., "we're on that slope"; "we're pretty much on
that drum beat"; "we hover around that line"; "the framework is all
intact"; "nothing has gone negative"; "we've been able to stay on
that continuum"; and "there is no change to the framework we laid
out"). Specifically, although the Court previously held that the
Safe Harbor does not protect Donegan's "on the line" statements
because they contained facts about PCC's current circumstances, it
is clear from the Ninth Circuit's reasoning in Tesla that Donegan's
relatively generic statements do not include sufficiently "concrete
descriptions" of present facts to fall outside the protection of
the Safe Harbor.
As in Tesla, where the plaintiffs alleged that Musk knew Tesla's
announced target was close to impossible to attain but continued to
make statements that Tesla was progressing toward the target, in
the case, the Plaintiffs have presented evidence that suggests
Donegan knew the announced target was close to impossible to attain
but continued to make statements that PCC was progressing toward
its target. In light of Tesla, the Defendants' statements that
remain at issue here were not sufficiently concrete to qualify as
"a concrete factual assertion about a specific present or past
circumstances," nor specific enough for the Lead Plaintiffs to
establish falsity. Accordingly, the Judge reconsiders the Court's
prior opinion, and grants the Defendants' motion for summary
judgment on the Lead Plaintiffs' remaining FY16 statements
(Statements 11, 15, 22, 24, 26, 28, 34, 36, and 39; and Statement
19).
B. Mr. Donegan's Other Statements
The Defendants argue that the Court should enter summary judgment
on all of the remaining statements that do not fall under the FY16
target category because the Lead Plaintiffs' loss causation
evidence identified corrective disclosure events only with respect
to alleged misrepresentations regarding the FY16 target. The Lead
Plaintiffs appear to accept that they have not established loss
causation with respect to these other statements.
Judge Beckerman opines that Coffman's opinion established loss
causation with respect to the Lead Plaintiffs' primary theory of
liability on the FY16 target statements, but did not establish loss
causation for the other challenged statements relating to
destocking if those statements were to stand alone. Now that the
Court has entered summary judgment with respect to the FY16 target
statements, the Lead Plaintiffs have failed to establish loss
causation with respect to any of the remaining statements.
Accordingly, the Judge enters summary judgment for the Defendants
with respect to all of the remaining statements at issue
(Statements 8-9, 12, 18, 23, 25, 37, and 42).
Disposition
For the reasons she set forth, Judge Beckerman grants the
Defendants' Motion for Reconsideration of the Court's July 3, 2020
Opinion and Order, reconsiders the Court's opinion in light of the
Ninth Circuit's opinion in Tesla, and enters summary judgment for
the Defendants on all of the Lead Plaintiffs' remaining claims.
A full-text copy of the Court's May 24, 2021 Opinion & Order is
available at https://tinyurl.com/yahyca5z from Leagle.com.
PROJECT O.H.R.: Class Certification Order in Kurovskaya Affirmed
----------------------------------------------------------------
In the case, NATALYA KUROVSKAYA ET AL., Plaintiffs-Respondents v.
PROJECT O.H.R. (OFFICE FOR HOMECARE REFERRAL), INC.,
Defendant-Appellant, Index No. 150480/16, Appeal No. 13908-13908A,
Case Nos. 2020-04902, 2021-00285 (N.Y. App. Div.), the Appellate
Division of the Supreme Court of New York, First Department,
affirmed the Dec. 2, 2020 order of the Supreme Court of New York
County, which granted the Plaintiffs' motion for class
certification and leave to amend the complaint.
Judge Lynn R. Kotler of the Supreme Court of New York County
entered on Dec. 2, 2020 an order, which, to the extent appealed
from as limited by the briefs, granted the Plaintiffs' motion for
class certification and leave to amend the complaint, unanimously
affirmed, with costs. Same court and Justice entered on Jan. 14,
2021 an order which approved the form and publication of notice of
the class action, unanimously dismissed, without costs, as
abandoned.
The Plaintiffs and the putative class members are former
nonresidential home health aides and/or personal care assistants
who worked for defendant in New York between Jan. 20, 2010 and the
present. The Plaintiffs allege, inter alia, that the Defendant
regularly underpaid the putative class members for time worked, as
it paid the same rate for regular work and overtime. They also
allege that they were paid flat "per diem" rates for 24-hour or
"live-in" shifts, which compensated approximately 12 hours of work,
even though they worked most of the 24-hour shifts and were given
neither three one-hour meal breaks nor allowed eight hours of sleep
with five hours uninterrupted. The Plaintiffs allege that the
Defendant failed to maintain adequate records, compensate them for
hours worked, and ensure that they received appropriate sleep
facilities.
The Appellate Division holds that the motion court properly found
that the Plaintiffs submitted sufficient evidence to satisfy the
requirements of CPLR 901. The Plaintiffs showed numerosity by
providing evidence that at least 1,000 home health aides worked for
defendant and that 25 different people attended each of the
twice-yearly mandatory training sessions attended by them. They
alo provided competent evidence to show that there were issues of
law and fact common to the class that predominated over any
individual member's issues. The Plaintiffs submitted sworn
testimony from three former employees, the Defendant's policy
manual, and paystubs to show that it did not provide different wage
rates for regular work and overtime and that it did not have any
system to ensure that home health aides received meal breaks and
appropriate sleep benefits, despite the fact that it was only
paying them for 12 hours out of a 24-hour shift. This evidence,
according the Appellate Division, satisfies the minimum threshold
of establishing that their claim is not a sham.
Moreover, the Appellate Division finds that the claims of uniform
systemwide wage violations are particularly appropriate for class
certification. Both the named Plaintiffs submitted evidence to
show that they were not paid proper wages by the Defendant due to
its policies, and the motion court properly determined that these
claims are typical of the claims of the proposed class. As this is
a wage dispute and the cost of litigation would likely be
prohibitive for individuals, given their individual damages, the
court properly found that a class action was the superior vehicle
for resolving these disputes. Finally, the CPLR 902 factors weigh
in favor of class certification; there may be significant discovery
and litigation required to prosecute the class action, but the
burden on the litigants and the courts would be significantly
increased if 1,000 potential individual lawsuits were pursued.
Finally, the Appellate Division holds that the court properly
granted the Plaintiffs leave to amend the complaint. The Living
Wage Law (Administrative Code of City of NY Section 6-109) claim is
based upon the same factual allegations as the Labor Law claims and
is not futile on the face of the record. The Defendant has failed
to show prejudice as a result of the proposed amendment, as
discovery is ongoing.
A full-text copy of the Court's May 25, 2021 Order is available at
https://tinyurl.com/aypdbzym from Leagle.com.
Peckar & Abramson, P.C., New York (Kevin J. O'Connor --
KOConnor@pecklaw.com -- of counsel), for appellant.
Virginia & Ambinder, LLP, New York (LaDonna M. Lusher --
llusher@vandallp.com -- of counsel), for respondents.
PROVENTION BIO: Pomerantz Law Reminds of July 20 Deadline
---------------------------------------------------------
Pomerantz LLP announces that a class action lawsuit has been filed
against Provention Bio, Inc. ("Provention" or the "Company")
(NASDAQ: PRVB) and certain of its officers. The class action, filed
in the United States District Court for the District of New Jersey,
and docketed under 21-cv-11613, is on behalf of a class consisting
of all persons and entities other than Defendants that purchased or
otherwise acquired Provention securities between November 2, 2020
and April 8, 2021, both dates inclusive (the "Class Period"),
seeking to recover damages caused by Defendants' violations of the
federal securities laws and to pursue remedies under Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 10b-5 promulgated thereunder, against the Company
and certain of its top officials.
If you are a shareholder who purchased Provention securities during
the Class Period, you have until July 20, 2021 to ask the Court to
appoint you as Lead Plaintiff for the class. A copy of the
Complaint can be obtained at www.pomerantzlaw.com. To discuss this
action, contact Robert S. Willoughby at newaction@pomlaw.com or
888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who
inquire by e-mail are encouraged to include their mailing address,
telephone number, and the number of shares purchased.
[Click https://bit.ly/2TJZOux for information about joining the
class action]
Provention is a clinical stage biopharmaceutical company that
focuses on the development and commercialization of therapeutics
and solutions to intercept and prevent immune-mediated diseases.
The Company's product candidates include, among others, PRV-031
teplizumab and monoclonal antibodies, in Phase III clinical trial
for the interception of type one diabetes ("T1D").
In November 2020, Provention completed the rolling submission of a
Biologics License Application ("BLA") to the U.S. Food and Drug
Administration ("FDA") for teplizumab for the delay or prevention
of clinical T1D in at-risk individuals (the "teplizumab BLA").
The complaint alleges that, throughout the Class Period, Defendants
made materially false and misleading statements regarding the
Company's business, operations, and compliance policies.
Specifically, Defendants made false and/or misleading statements
and/or failed to disclose that: (i) the teplizumab BLA was
deficient in its submitted form and would require additional data
to secure FDA approval; (ii) accordingly, the teplizumab BLA lacked
the evidentiary support the Company had led investors to believe it
possessed; (iii) the Company had thus overstated the teplizumab
BLA's approval prospects and hence the commercialization timeline
for teplizumab; and (iv) as a result, the Company's public
statements were materially false and misleading at all relevant
times.
On April 8, 2021, Provention issued a press release "announc[ing]
that the Company received a notification on April 2, 2021 from the
[FDA], stating that, as part of its ongoing review of the Company's
[BLA] for teplizumab for the delay or prevention of clinical [T1D],
the FDA has identified deficiencies that preclude discussion of
labeling and post-marketing requirements/commitments at this
time."
On this news, Provention's stock price fell $1.73 per share, or
17.78%, to close at $8.00 per share on April 9, 2021.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles,
and Paris is acknowledged as one of the premier firms in the areas
of corporate, securities, and antitrust class litigation. Founded
by the late Abraham L. Pomerantz, known as the dean of the class
action bar, the Pomerantz Firm pioneered the field of securities
class actions. Today, more than 80 years later, the Pomerantz Firm
continues in the tradition he established, fighting for the rights
of the victims of securities fraud, breaches of fiduciary duty, and
corporate misconduct. The Firm has recovered numerous
multimillion-dollar damages awards on behalf of class members. See
www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980 [GN]
PURECYCLE TECHNOLOGIES: ClaimsFiler Reminds of July 12 Deadline
---------------------------------------------------------------
ClaimsFiler, a FREE shareholder information service, reminds
investors of pending deadline in the following securities class
action lawsuit:
PureCycle Technologies, Inc. (PCT) f/k/a Roth CH Acquisition I Co.
(ROCH)
Class Period: 11/16/2020 - 5/5/2021 and/or were holders of Roth
securities entitled to participate in the March 16, 2021
shareholder vote on the merger with PureCycle.
Lead Plaintiff Motion Deadline: July 12, 2021
SECURITIES FRAUD, MISLEADING PROSPECTUS
To learn more, visit
https://www.claimsfiler.com/cases/view-purecycle-technologies-inc-common-stock-pct-securities-litigation
If you wish to serve as a Lead Plaintiff in the class action, you
must petition the Court on or before the Lead Plaintiff Motion
deadline.
About ClaimsFiler
ClaimsFiler has a single mission: to serve as the information
source to help retail investors recover their share of billions of
dollars from securities class action settlements. At
ClaimsFiler.com, investors can: (1) register for free to gain
access to information and settlement websites for various
securities class action cases so they can timely submit their own
claims; (2) upload their portfolio transactional data to be
notified about relevant securities cases in which they may have a
financial interest; and (3) submit inquiries to the Kahn Swick &
Foti, LLC law firm for free case evaluations.
To learn more about ClaimsFiler, visit www.claimsfiler.com [GN]
PURECYCLE TECHNOLOGIES: Theodore & Tennenbaum Suits Underway
------------------------------------------------------------
PureCycle Technologies, Inc. (PCT) said in its Form 10-Q Report
filed with the Securities and Exchange Commission on May 19, 2021,
for the quarterly period ended March 31, 2021, that the company
continues to defend two putative class action suits initiated by
William C. Theodore and David Tennenbaum, respectively.
Beginning on or about May 11, 2021, two putative class action
complaints were filed against PCT, certain senior members of
management and others, asserting violations of federal securities
laws under Section 10(b) and Section 20(a) of the Exchange Act.
The complaints generally allege that the applicable defendants made
false and/or misleading statements in press releases and public
filings regarding the Technology, PCT's business and PCT's
prospects.
The first putative class action complaint was filed in the U.S.
District Court for the Middle District of Florida by William C.
Theodore against PCT and certain senior members of management.
The second putative class action complaint was filed in the U.S.
District Court for the Middle District of Florida by David
Tennenbaum against PCT, certain senior members of management and
others.
The plaintiffs in the Lawsuits seek to represent a class of
investors who purchased or otherwise acquired PCT's securities
between November 16, 2020 and May 5, 2021.
The plaintiffs in the Tennenbaum Lawsuit also seek to represent a
class of all holders of ROCH CH Acquisition I Co. securities
entitled to participate in the March 16, 2021 shareholder vote on
the Business Combination.
The complaints seek certification of the alleged class and
compensatory damages. The Theodore Lawsuit also seeks punitive
damages. The complaints rely on information included in a research
report published by Hindenburg Research LLC.
PureCycle said, "The time for the applicable defendants to answer,
move or otherwise respond has not yet been scheduled. PCT and the
individual defendants constituting senior members of management
intend to vigorously defend the Lawsuits. Given the stage of the
litigation, PCT cannot reasonably estimate at this time whether
there will be any loss, or if there is a loss, the possible range
of loss, that may arise from the unresolved Lawsuits."
PureCycle Technologies, Inc. provides recycling services. The
Company develops patented recycling process which separates color,
odor, and contaminants from plastic waste feedstock to transform it
into ultra-pure recycled polypropylene. PureCycle Technologies
serves customers worldwide. The company is based in Orlando,
Florida.
RITE AID: Loses Bid to Arbitrate Drug Pricing Class Action
----------------------------------------------------------
Brendan Pierson at Reuters reports that Rite Aid must face a
proposed class action accusing it of fraudulently inflating the
prescription drug prices it negotiated with insurance companies in
court, a federal appeals court ruled, denying the pharmacy
operator's bid to send the case to arbitration.
A unanimous 9th U.S. Circuit Court of Appeals panel found that Rite
Aid's arbitration agreements with the pharmacy benefit managers
(PBMs) that negotiate prices between it and insurance companies do
not bind health plan beneficiaries, like plaintiff Bryon Stafford,
affirming a ruling by a lower court.
Rite Aid and its attorney Stephanie Schuster of Morgan, Lewis &
Bockius did not immediately respond to requests for comment. Nor
did Andrew Love of Robbins Geller Rudman & Dowd, a lawyer for
Stafford.
Stafford sued Rite Aid in San Diego federal court in 2017, alleging
that Rite Aid inflated the "usual and customary" prices of
prescription drugs that it reported to PBMs.
Usual and customary prices are used as the basis of the
negotiations between pharmacies, PBMs and insurers that determine
the rates insurers ultimately pay. Stafford said that Rite Aid's
reported prices were higher than the prices it charged customers
without insurance who paid in cash, which he said represented the
true usual and customary prices.
As a result, many health plan beneficiaries overpaid, since their
share of prescription drug costs is based on the price paid by the
insurer, Stafford said. He brought claims under California's Unfair
Competition Law and Consumer Legal Remedies Act, as well as common
law unjust enrichment and negligent misrepresentation, and sought
to represent a nationwide class and California subclass of
similarly situated people.
Rite Aid moved to compel arbitration, arguing that Stafford's
claims were intertwined with its contracts with PBMs, which contain
arbitration clauses. It said equitable estoppel prevented Stafford
from suing in court over claims arising from contracts with
arbitration clauses.
U.S. District Judge Anthony Battaglia denied the motion, finding
the claims were independent of Rite Aid's contracts, and Rite Aid
appealed.
Circuit Judge Milan Smith, writing for the panel, agreed that
Stafford's claims did not arise from Rite Aid's contracts with
PBMs.
"Even if the contracts contained no provision requiring Rite Aid to
report the usual and customary price, the fact remains that Rite
Aid did report that information and allegedly purposely inflated
it," the judge wrote. "Rite Aid's duty not to commit fraud is
independent from any contractual requirements with the pharmacy
benefit managers."
Smith was joined by Circuit Judges Sandra Ikuta and District Judge
Kathryn Vratil of the District of Kansas, sitting by designation.
The case is Stafford v. Rite Aid Corp, 9th U.S. Circuit Court of
Appeals, No. 20-55333.[GN]
ROCK 'N PLAY: Opposition to Class Certification Bid Due June 16
---------------------------------------------------------------
In the class action lawsuit re: ROCK 'N PLAY SLEEPER MARKETING,
SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION (MDL No.
1:19-md-2903), Case No. 1:19-cv-01107-GWC (W.D.N.Y.), the Hon.
Judge Geofrrey W. Crawford entered an order as follows:
1. The Defendant's Motion to Compel Plaintiffs to Produce or
Identify Specific Webpages Considered by Expert Colin Weir is
denied.
-- The court requires plaintiffs' counsel to confer with Mr.
Weir and confirm that he does not have notes or an
electronic record of the webpages he visited. Plaintiffs'
counsel shall advise defendant of the expert's answer
within 10 days. If there is a record of the webpages, it
shall be provided within 10 days. In other respects, the
motion is denied.
2. The Defendants' Motion to Compel re: Plaintiffs' production
of documents. Not later than May 27, 2021, plaintiffs shall
complete the production of baby photos, emails concerning the
Rock 'N Play Sleeper, and other product information. The
deposition of plaintiff Wray shall proceed on the agreed
dates of May 27 and 28.
3. The Defendants' Opposition to Class Certification is due June
16, 2021. The parties will file a revised pre-trial schedule
moving later dates out in a consistent manner.
4. The court grants the defendants' motion to file an over-sized
brief (additional 25 pages).
5. The court will schedule a status conference around July 1,
2021 by video to discuss the timing of plaintiffs' reply,
including expert depositions.
A copy of the Court's order dated May 19, 2021 is available from
PacerMonitor.com at https://bit.ly/2Twmq1n at no extra charge.[CC]
SANDERSON FARMS: Broiler Chicken Grower Litigations Underway
------------------------------------------------------------
Sanderson Farms, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 27, 2021, for the
quarterly period ended March 31, 2021, that company continues
to defend putative class suits related to the sharing data on
compensation paid to broiler farmers, with the purpose and effect
of suppressing the farmers' compensation below competitive levels.
On January 27, 2017, Sanderson Farms, Inc. and its subsidiaries
were named as defendants, along with four other poultry producers
and certain of their affiliated companies, in a putative class
action lawsuit filed in the United States District Court for the
Eastern District of Oklahoma.
On March 27, 2017, the Company was named as a defendant, along with
four other poultry producers and certain of their affiliated
companies, in a second putative class action lawsuit filed in the
United States District Court for the Eastern District of Oklahoma.
The Court ordered the suits consolidated into one proceeding, and
on July 10, 2017, the plaintiffs filed a consolidated amended
complaint. The consolidated amended complaint alleges that the
defendants unlawfully conspired by sharing data on compensation
paid to broiler farmers, with the purpose and effect of suppressing
the farmers' compensation below competitive levels. The
consolidated amended complaint also alleges that the defendants
unlawfully conspired to not solicit or hire the broiler farmers who
were providing services to other defendants.
The consolidated amended complaint seeks treble damages, costs and
attorneys' fees.
On September 8, 2017, the defendants filed a motion to dismiss the
amended complaint, on October 23, 2017, the plaintiffs filed their
response, and on November 22, 2017, the defendants filed a reply.
On January 19, 2018, the Court granted the Sanderson Farms
defendants' motion to dismiss for lack of personal jurisdiction.
On February 21, 2018, the plaintiffs filed a substantially similar
lawsuit in the United States District Court for the Eastern
District of North Carolina against the Company and another poultry
producer. The plaintiffs subsequently moved to consolidate this
action with the Eastern District of Oklahoma action in the Eastern
District of Oklahoma for pretrial proceedings, with the defendants
in support thereof. That motion was denied.
On July 13, 2018, the defendants moved to dismiss the lawsuit in
the Eastern District of North Carolina, and briefing was completed
on September 4, 2018. On January 15, 2019, the Court granted in
part the defendants' motion to dismiss by staying the action in the
Eastern District of North Carolina under the first-to-file rule,
pending resolution of the action in the Eastern District of
Oklahoma.
On January 6, 2020, the Court in the Eastern District of Oklahoma
denied the remaining defendants' motion to dismiss. On January 27,
2020, plaintiffs in the Oklahoma case moved for leave to amend
their complaint. The Court in the Eastern District of Oklahoma
granted the plaintiffs' motion, and the plaintiffs filed a second
amended consolidated complaint on February 21, 2020.
On May 27, 2020, the Company moved to dismiss the action in the
Eastern District of North Carolina under the first-to-file rule.
Plaintiffs filed their opposition on June 17, 2020, and the Company
filed its reply on July 1, 2020.
On September 11, 2020, additional named grower plaintiffs filed an
identical putative class action in the United States District Court
for the District of Colorado against Sanderson Farms, Inc. and its
Foods, Production, and Processing Divisions, as well as the other
initial poultry producer defendants in the Oklahoma action. On
October 14, 2020, defendants moved to dismiss the case under the
first-to-file doctrine because it is substantively identical to the
earlier-filed cases pending in Oklahoma and North Carolina.
Briefing on that motion was completed on December 16, 2020.
On September 18, 2020, another named grower plaintiff filed another
duplicate class action in the United States District Court for the
District of Kansas against the same defendants as the Colorado
action. On October 13, 2020, defendants moved to dismiss the case
under the first-to-file doctrine because it is substantively
identical to the earlier-filed cases pending in Oklahoma, North
Carolina, and Colorado. Briefing on that motion was completed on
December 15, 2020.
On October 8, 2020, new named grower plaintiffs filed another
duplicate class action in the United States District Court for the
Northern District of California against the same defendants as the
Colorado and Kansas actions. The Company waived service of the
complaint on December 11, 2020.
On October 23, 2020, the District Court of Kansas stayed
proceedings in that action (other than those related to the
first-to-file motion) pending resolution of the first-to-file
motion and the multi-district litigation ("MDL") consolidation
motion.
On November 12, 2020, the District Court of Colorado stayed
proceedings in that action (other than those related to the
first-to-file motion) pending resolution of the first-to-file
motion and the MDL consolidation motion.
On October 6, 2020, Plaintiffs in the Oklahoma action moved to
consolidate all of these duplicative cases into a MDL before the
judge presiding over the Oklahoma case. Briefing on that motion was
completed on November 6, 2020, and oral argument on the motion
occurred on December 3, 2020.
On December 15, 2020, the panel ordered that all actions be
consolidated in the Eastern District of Oklahoma for pretrial
proceedings. The cases are consolidated as In re Broiler Chicken
Grower Antitrust Litigation, No. 6:20-md-2977-RJS-CMR (E.D. Okla.).
On February 12, 2021, the MDL Court held a status conference and
entered a scheduling order for the MDL.
On February 16, 2021, the first-to-file motions in the various
actions described above were denied without prejudice. On February
19, 2021, Plaintiffs filed a consolidated amended complaint before
the MDL Court. On March 31, 2021, the Company filed its answers to
Plaintiffs' consolidated amended complaint. Discovery in the case
is underway.
Sanderson said, "We intend to defend these cases vigorously;
however, the Company cannot predict the outcome of these actions.
If the plaintiffs were to prevail, the Company could be liable for
damages, which could have a material, adverse effect on our
financial position and results of operations."
Sanderson Farms, Inc., an integrated poultry processing company,
produces, processes, markets, and distributes fresh, frozen, and
prepared chicken products in the United States. Sanderson Farms,
Inc. was founded in 1947 and is headquartered in Laurel,
Mississippi.
SANDERSON FARMS: Discovery in Antitrust Suit Ongoing
----------------------------------------------------
Sanderson Farms, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 27, 2021, for the
quarterly period ended April 30, 2021, that discovery is ongoing in
the class action lawsuit entitled, In re Broiler Chicken Antitrust
Litigation.
Between September 2, 2016 and October 13, 2016, Sanderson Farms,
Inc. and our subsidiaries were named as defendants, along with
thirteen other poultry producers and certain of their affiliated
companies, in multiple putative class action lawsuits filed by
direct and indirect purchasers of broiler chickens in the United
States District Court for the Northern District of Illinois.
The complaints allege that the defendants conspired to unlawfully
fix, raise, maintain, and stabilize the price of broiler chickens,
thereby violating federal and certain states' antitrust laws, and
also allege certain related state-law claims.
The complaints also allege that the defendants fraudulently
concealed the alleged anticompetitive conduct in furtherance of the
conspiracy.
The complaints seek damages, including treble damages for the
antitrust claims, injunctive relief, costs, and attorneys' fees.
The Court has consolidated all of the direct purchaser complaints
into one case, and the indirect purchaser complaints into two
cases, one on behalf of commercial and institutional indirect
purchaser plaintiffs and one on behalf of end-user consumer
plaintiffs.
The cases are part of a coordinated proceeding captioned In re
Broiler Chicken Antitrust Litigation.
On October 28, 2016, the direct and indirect purchaser plaintiffs
filed consolidated, amended complaints, and on November 23, 2016,
the direct and indirect purchaser plaintiffs filed second amended
complaints. On December 16, 2016, the indirect purchaser plaintiffs
separated into two cases.
On that date, the commercial and institutional indirect purchaser
plaintiffs filed a third amended complaint, and the end-user
consumer plaintiffs filed an amended complaint.
On January 27, 2017, the defendants filed motions to dismiss the
amended complaints in all of the cases, and on November 20, 2017,
the motions to dismiss were denied.
On February 7, 2018, the direct purchaser plaintiffs filed their
third amended complaint, adding three additional poultry producers
as defendants.
On February 12, 2018, the end-user consumer plaintiffs filed their
second amended complaint, adding three additional poultry producers
as defendants, along with Agri Stats, Inc. On February 20, 2018,
the commercial and institutional indirect purchaser plaintiffs
filed their fourth amended complaint.
On November 13, 2018, the commercial and institutional indirect
purchaser plaintiffs filed their fifth amended complaint, adding
three additional poultry producers as defendants. On November 28,
2018, the end-user consumer plaintiffs filed their third amended
complaint.
On January 15, 2019, the direct purchaser plaintiffs filed their
fourth amended complaint, and the commercial and institutional
indirect purchaser plaintiffs filed their sixth amended complaint.
Both the direct purchaser plaintiffs and the commercial and
institutional indirect purchaser plaintiffs added two new poultry
producers as defendants, as well as Agri Stats, Inc. On August 6,
2020, the end-user consumer plaintiffs filed a motion for leave to
file a fifth amended complaint. The Court granted the end-user
consumer plaintiffs' motion on September 22, 2020 and deemed the
version of the complaint filed on August 7, 2020 operative on
October 19, 2020.
On October 23, 2020, the direct purchaser plaintiffs filed their
fifth amended complaint and the commercial and institutional
indirect purchaser plaintiffs filed their seventh amended
complaint, both of which include bid-rigging allegations.
Between December 8, 2017 and May 18, 2021, additional purported
direct-purchaser entities individually brought seventy-three
separate suits against twenty poultry producers, including the
Company, as well as Agri Stats, Inc. and Utrecht-America Holdings,
Inc. ("Rabobank") in the United States District Court for the
Northern District of Illinois, the United States District Court for
the District of Kansas, the United States District Court for the
Western District of Arkansas, and the United States District Court
for the District of Puerto Rico. These suits allege substantially
similar claims to the direct purchaser class complaint described
above; certain of the suits additionally allege related state-law
and common-law claims, and related claims under federal and Georgia
RICO statutes.
In addition, certain direct action complaints filed since June 12,
2020 include allegations of federal bid rigging.
Those suits filed in the Northern District of Illinois are now
pending in front of the same judge as the putative class action
lawsuits. On June 26, 2018, the defendants filed a motion to
transfer the case filed in the District of Kansas to the Northern
District of Illinois, and that motion was granted on September 13,
2018. On June 7, 2019, the plaintiffs filed a motion to transfer
the case filed in the Western District of Arkansas to the Northern
District of Illinois, and that motion was granted on June 11, 2019.
On July 24, 2019, one of the defendants filed a motion to transfer
the case filed in the District of Puerto Rico to the Northern
District of Illinois, and that motion was granted on July 25, 2019.
On July 22, 2019, the Company moved to dismiss in part those
direct-purchaser complaints that allege claims under federal and
Georgia RICO statutes against it. The motion was fully briefed on
September 20, 2019, and the Court heard argument on the motion on
December 18, 2019. On March 3, 2020, the Court denied the Company's
motion. On October 18, 2019, defendants moved to dismiss the case
filed by the Commonwealth of Puerto Rico on its behalf and on
behalf of its citizens. The motion was fully briefed on January 21,
2020. On July 15, 2020, the Court dismissed Puerto Rico's claims on
behalf of its citizens.
On July 2, 2020 and August 6, 2020, certain defendants, including
the Company, moved to exclude bid rigging allegations and claims
from the consolidated In re Broiler Chicken Antitrust Litigation.
Plaintiffs filed oppositions on August 6, 2020 and August 20, 2020.
Defendants filed replies on August 20, 2020 and September 3, 2020.
On September 22, 2020, the Court ordered that plaintiffs'
bid-rigging allegations are bifurcated and any discovery on such
claims is stayed until plaintiffs' supply reduction and Georgia
Dock Index theories are resolved. On October 20, 2020, certain
direct action plaintiffs filed a motion for leave to amend their
complaints. On October 23, 2020, certain direct action plaintiffs
filed a consolidated complaint. Defendants filed an opposition to
certain direct action plaintiffs' motion to amend on November 4,
2020. Briefing was completed on November 16, 2020.
The Court granted the motion to amend on January 6, 2021, and all
direct action plaintiffs consolidated in the In re Broilers Chicken
Antitrust Litigation before or on January 29, 2021 filed an amended
consolidated complaint on January 29, 2021 incorporating those
allegations.
On October 30, 2020, direct purchaser plaintiffs, commercial and
institutional indirect purchaser plaintiffs, and end-user consumer
plaintiffs filed motions for class certification. Defendants filed
their oppositions to class certification on January 22, 2021. Class
plaintiffs filed replies in support of class certification on March
29, 2021.
The parties are currently engaged in discovery. Fact discovery is
scheduled to close on July 30, 2021, subject to limited extensions
for certain direct action discovery. It is possible that additional
individual actions will be filed.
Sanderson Farms, Inc., an integrated poultry processing company,
produces, processes, markets, and distributes fresh, frozen, and
prepared chicken products in the United States. Sanderson Farms,
Inc. was founded in 1947 and is headquartered in Laurel,
Mississippi.
SANDERSON FARMS: Discovery in La Fosse Putative Class Suit Ongoing
------------------------------------------------------------------
Sanderson Farms, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 27, 2021, for the
quarterly period ended March 31, 2021, that discovery is ongoing in
the putative class action suit entitled, La Fosse, et al. v.
Sanderson Farms, Inc.
On October 11, 2019, three named plaintiffs (Daniel Lentz, Pam La
Fosse, and Marybeth Norman) filed, in the United States District
Court for the Northern District of California, a nationwide class
action against the Company on behalf of a putative class of all
individuals and businesses throughout the United States who
purchased one or more of the Company's chicken products in the
prior four years. The lawsuit alleges that the named plaintiffs and
other class members purchased the Company's chicken products based
on misleading representations in the Company's advertising.
Specifically, the plaintiffs in this case allege that the Company's
advertising (including, but not limited to, on its website,
television commercials, radio advertisements, social media, print
magazines, billboards, and trucks) misleads consumers into
believing that (i) the Company's chickens were not given
antibiotics or other pharmaceuticals, (ii) the Company's chickens
were raised in a "natural" environment, (iii) there is no evidence
that the use of antibiotics or other pharmaceuticals in poultry
contributes to the evolution of antibiotic-resistant bacteria, and
(iv) the Company's chicken products do not contain antibiotic or
pharmaceutical residues.
Plaintiffs allege that (i) the Company "routinely" feeds
antibiotics and pharmaceuticals to its chickens, (ii) the Company
raises its chickens indoors in "unnatural" indoor conditions
amounting to "intensive confinement" and without natural light
(iii) there is "extensive" reliable evidence that the use of
antibiotics in poultry contributes to antibiotic-resistant
bacteria, and (iv) the Company's chickens have been found to
contain antibiotic and pharmaceutical residue.
The original complaint asserted five causes of action under
California and North Carolina law. The plaintiffs sought injunctive
relief directing the Company to correct its practices and to comply
with consumer protection laws nationwide. The plaintiffs also
sought monetary damages, as well as fees and costs. On December 20,
2019, the Company filed a motion to dismiss. On February 10, 2020,
the Court granted the motion to dismiss in part, denied it in part,
and granted the plaintiffs leave to amend the complaint.
On March 23, 2020, two of the three original plaintiffs (Pam La
Fosse and Marybeth Norman) filed a first amended complaint in which
they were joined by five additional named plaintiffs purporting to
assert claims on behalf of a putative nationwide class of consumers
and businesses who purchased the Company's chicken products in the
prior four years.
The core allegations and theories set forth in the first amended
complaint are the same as in the original complaint. The first
amended complaint asserted one cause of action under federal law
and sixteen causes of action under the laws of various states.
The plaintiffs again sought injunctive relief directing the Company
to correct its practices and to comply with consumer protection
laws nationwide, as well as monetary damages, fees and costs. On
May 6, 2020, the Company filed a partial motion to dismiss the
first amended complaint, which the Court granted on July 2, 2020
with leave to amend.
On July 23, 2020, plaintiffs Pam La Fosse and Sharon Manier filed a
second amended complaint on behalf of a putative class of consumers
who purchased the Company's chicken in California in the prior four
years. Like the earlier iterations of the complaint, the second
amended complaint alleges that the remaining plaintiffs and other
class members purchased the Company's chicken products based on
misleading representations in the Company's advertising, including
for the reasons set forth in their prior complaints.
The plaintiffs again seek injunctive relief, monetary damages, fees
and costs. On August 6, 2020, the Company moved to dismiss the
second amended complaint in part, requesting dismissal of
plaintiffs' new implied warranty of merchantability claim. On
August 20, 2020, plaintiffs voluntarily agreed to withdraw their
new implied warranty claim.
Discovery commenced in October 2020 and is ongoing.
Sanderson said, "We intend to defend this case vigorously; however,
the Company cannot predict the outcome of this action. If the
plaintiffs were to prevail, the Company could be liable for
damages, which could have a material, adverse effect on our
financial position and results of operations."
Sanderson Farms, Inc., an integrated poultry processing company,
produces, processes, markets, and distributes fresh, frozen, and
prepared chicken products in the United States. Sanderson Farms,
Inc. was founded in 1947 and is headquartered in Laurel,
Mississippi.
SANDERSON FARMS: Discovery Ongoing in Jien Putative Class Suit
--------------------------------------------------------------
Sanderson Farms, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 27, 2021, for the
quarterly period ended March 31, 2021, that discovery is ongoing in
the consolidated putative class action suit entitled, Judy Jien v.
Perdue Farms, Inc., et al.
On August 30, 2019, Sanderson Farms, Inc. and its Foods and
Processing Divisions, as well as seventeen other poultry producers
and their affiliates; Agri Stats, Inc.; and Webber, Meng, Sahl and
Company, Inc. ("WMS"), were named in a putative class action filed
in the United States District Court for the District of Maryland.
Three other nearly identical putative class action complaints, each
seeking to represent the same putative class, also were filed.
The complaints, brought on behalf of non-supervisory production and
maintenance employees at broiler chicken processing plants, alleged
that the defendants unlawfully conspired by agreeing to fix and
depress the compensation paid to them, including hourly wages and
compensation benefits, from January 1, 2009 to the present.
Plaintiffs claim that broiler producers shared competitively
sensitive wage and benefits compensation information in three ways:
(1) attending in-person meetings in Destin, Florida; (2) receiving
Agri Stats reports, as well as surveys taken and published by WMS;
and (3) directly exchanging wage and benefits information with
plant managers at other defendant broiler producers. Plaintiffs
allege that this conduct violated the Sherman Antitrust Act.
On November 12, 2019, the Court ordered that the four putative
class action complaints would be consolidated for all pretrial
purposes. The Court ordered plaintiffs to file their consolidated
complaint on or before November 14, 2019. Defendants' motions to
dismiss the consolidated complaint were filed on November 22, 2019.
Briefing was scheduled to be completed on or before February 28,
2020; however, after the defendants filed their motions to dismiss,
on November 26, 2019, plaintiffs notified defendants that they
intended to file an amended consolidated complaint.
Plaintiffs filed an amended consolidated complaint on December 20,
2019. Plaintiffs named as defendants Sanderson Farms, Inc. and its
Foods and Processing Divisions, as well as ten other broiler
chicken producers and their affiliates; three turkey producers and
their affiliates; Agri Stats, Inc.; and WMS.
Plaintiffs brought their amended consolidated complaint on behalf
of employees at broiler chicken and turkey processing plants and
allege that the defendants unlawfully conspired by agreeing to fix
and depress the compensation paid to them.
On January 9, 2020 and January 27, 2020, the Court approved the
voluntary dismissal without prejudice of two of the three nearly
identical putative class action lawsuits. On March 12, 2020, the
Court approved the voluntary dismissal without prejudice of the
third nearly identical putative class action lawsuit.
On March 2, 2020, defendants moved to dismiss the amended
consolidated complaint. The Company also filed an individual motion
to dismiss plaintiffs' claims against the Company. Plaintiffs filed
their omnibus opposition to defendants' motions to dismiss on July
17, 2020. Defendants filed their reply briefs on August 13, 2020.
On September 16, 2020, the Court granted in part and denied in part
defendants' motion without prejudice, finding that plaintiffs'
allegations against certain corporate defendant families, including
the Company, were deficient.
Plaintiffs filed a second amended consolidated complaint against
the Company on November 2, 2020. The Company filed a renewed motion
to dismiss resisting plaintiffs' amended allegations on December
18, 2020. The Court denied that motion on March 10, 2021. Discovery
in the case is underway.
Sanderson said, "We intend to defend this case vigorously; however,
the Company cannot predict the outcome of these actions. If the
plaintiffs were to prevail, the Company could be liable for
damages, which could have a material, adverse effect on our
financial position and results of operations."
Sanderson Farms, Inc., an integrated poultry processing company,
produces, processes, markets, and distributes fresh, frozen, and
prepared chicken products in the United States. Sanderson Farms,
Inc. was founded in 1947 and is headquartered in Laurel,
Mississippi.
SCWORX CORP: Bid to Nix Suit Over COVID-19 Rapid Test Kits Pending
------------------------------------------------------------------
SCWorx Corp. said in its Form 10-K report filed with the U.S.
Securities and Exchange Commission on May 19, 2021, for the fiscal
year ended December 31, 2020, that the motion to dismiss the
consolidated class action suit related to the company's April 13,
2020 press release with respect to the sale of COVID-19 rapid test
kits, is pending.
On April 29, 2020, a securities class action case was filed in the
United States District Court for the Southern District of New York
against the company and its CEO. The action is captioned Daniel
Yannes, individually and on behalf of all others similarly
situated, Plaintiff vs. SCWorx Corp. and Marc S. Schessel,
Defendants.
On May 27, 2020, a second securities class was filed in the United
States District Court for the Southern District of New York against
the company and its CEO. The action is captioned Caitlin Leeburn,
individually and on behalf of all others similarly situated,
Plaintiff v. SCWorx Corp. and Marc S. Schessel, Defendants.
On June 23, 2020, a third securities class was filed in the United
States District Court for the Southern District of New York against
us and our CEO. The action is captioned Jonathan Charles Leonard,
individually and on behalf of all others similarly situated,
Plaintiff v. SCWorx Corp. and Marc S. Schessel, Defendants.
All three lawsuits allege that the company and its CEO mislead
investors in connection with its April 13, 2020 press release with
respect to the sale of COVID-19 rapid test kits. The plaintiffs in
these actions are seeking unspecified monetary damages. These three
class actions were consolidated on September 18, 2020 and Daniel
Yannes was designated lead plaintiff.
A consolidated Amended Complaint was filed on October 19, 2020.
The Defendants filed a motion to dismiss the CAC on November 18,
2020, and the briefing on that motion was complete on January 8,
2021.
SCWorx said, "We are still awaiting a ruling on the motion, and we
intend to continue vigorously defending against this lawsuit."
SCWorx Corp. provides software solutions for the management of
health care providers' foundational business applications. The
company is based in New York, New York.
STEVENS INSTITUTE: Court Narrows Claims in Mitelberg Class Suit
---------------------------------------------------------------
In the case, LEAH MITELBERG, individually and on behalf of all
others similarly situated, Plaintiff v. STEVENS INSTITUTE OF
TECHNOLOGY, Defendant, Civil Action No. 21-1043 (SDW) (MAH)
(D.N.J.), Judge Susan D. Wigenton of the U.S. District Court for
the District of New Jersey granted in part and denied in part the
Defendant's Motion to Dismiss Plaintiff Leah Mitelberg's Class
Action Complaint.
The class action is one of many similar cases throughout the U.S.
involving a monetary dispute over the transition to virtual higher
education during the COVID-19 pandemic. The Plaintiff was enrolled
as an undergraduate in the cyber security program at Stevens
Institute of Technology in Hoboken, New Jersey, when COVID-19 swept
across the U.S. in early 2020. As a result, the Defendant switched
to remote learning on March 11, 2020, which continued through the
end of the Spring Semester.
The Plaintiff's coursework in cyber security purportedly entails
extensive in-person instruction, student presentations, peer
collaboration, and access to university facilities such as
laboratories. Accordingly, the Plaintiff maintains that the
Defendant's virtual instruction was "subpar" because it deprived
students of (i) collaborative and hands-on learning, (ii) in-person
dialogue, feedback, critique, networking, and mentorship, (iii)
access to materials and facilities such as laboratories, libraries,
and study rooms, (iv) participation in extra-curricular activities,
sports, and clubs, and (v) opportunities for social development and
independence.
Although the Defendant partially refunded students' housing costs
following the suspension of in-person instruction, it did not
refund the Plaintiff any portion of her Spring Semester tuition
(approximately $31,671) or fees comprised of a General Services Fee
($710) and a Student Activity Fee ($230). The Plaintiff contends
she contracted with Defendant for in-person instruction and access
to services and facilities -- specifically by way of Defendant's
2020 Spring Semester Course Catalog, Course Scheduler, Academic
Policies, and course syllabi —- and intends to recover a prorated
portion of tuition and fees for the period in which virtual
learning commenced.
The Plaintiff seeks to represent a class of similarly situated
individuals who remitted, but were never refunded, tuition and/or
fees to Defendant for the 2020 Spring Semester, as well as a
subclass of class members who live in New Jersey.
After the Court dismissed a nearly identical case brought by the
Plaintiff's parent for lack of standing -- Ilya Mitelberg v.
Stevens Institute of Technology, No. 20-5748 (D.N.J. Jan. 22, 2021)
-- the Plaintiff filed the instant lawsuit asserting claims for
breach of contract (Count I), unjust enrichment (Count II),
conversion (Count III), and money had and received (Count IV).
The Defendant moved to dismiss the Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6) on March 29, 2021, and all briefs
were timely filed.
Discussion
A. Count I: Breach of Contract
As a preliminary matter, the Court must determine the appropriate
standard to apply when faced with a breach of contract claim
against an educational institution for its failure to render
in-person learning. A recent decision in our District involving a
nearly identical dispute against another New Jersey-based
university provides apt guidance. Ordinarily, under New Jersey
law, a breach of contract claim is established by showing: (1) a
valid contract; (2) failed performance; and (3) causation between
the alleged breach and the claimant's damages. However, New Jersey
courts undertake a context-specific approach to breach of contract
claims against universities because, typically, deference is
afforded to academic institutions so that they can fulfill their
educational responsibilities.
Under traditional breach of contract principles, Judge Wigenton
opines that the Plaintiff has plausibly alleged (i) a valid
contract for access to general student services and activities,
(ii) the Defendant breached its contractual obligations by failing
to provide access to such services and activities, and (iii) a
causal connection between the Defendant's breach and the
Plaintiff's damages. She says, although the Plaintiff does not
allege her fee payments were made under a written agreement, the
Court may infer the existence of a contract. Thus, the Defendant's
Motion to Dismiss Count I is granted with respect to the
Plaintiff's tuition claim and denied as it applies to her request
for fees.
B. Count II: Unjust Enrichment
Next, the Plaintiff brings a claim for unjust enrichment. Unjust
enrichment is an equitable cause of action that imposes liability
when a defendant received a benefit' and defendant's retention of
that benefit without payment would be unjust. Unjust enrichment is
resorted to when a claimant cannot establish the existence of an
express or implied contract.
Judge Wigenton finds no reason to deviate from this standard as it
applies to the Plaintiff's unjust enrichment claim for tuition
reimbursement. Thus, the Plaintiff's unjust enrichment claim is
dismissed as it pertains to tuition.
Notwithstanding the above, Count II for fees the Plaintiff paid to
the Defendant survives. In the event a contract between the
Plaintiff and the Defendant does not exist as it relates to the
General Services Fee and Student Activity Fee, the Judge holds that
the Plaintiff may pursue unjust enrichment as a quasi-contract
theory. The Plaintiff plausibly alleges that the Defendant
received the benefit of her fee payments and that retention of
those payments would be unjust because Defendant did not render
in-person services or activities from March 11, 2020 through the
semester's end. Accordingly, the Defendant's Motion to Dismiss
Count II for tuition reimbursement is granted and the same is
denied with respect to fees.
C. Count III: Conversion
The Plaintiff raises a third count for conversion. Conversion is
the 'unauthorized' exercise of the right of ownership over goods or
personal chattels belonging to another, to the alteration of their
condition or the exclusion of an owner's right. The Plaintiff
alleges that she had an ownership right to the Defendant's
in-person educational services which the Defendant intentionally
interfered with when it transitioned to virtual learning. In
addition, the Plaintiff's conversion claim can be interpreted to
allege that the Defendant unlawfully retained her property in the
form of paid tuition.
Judge Wigenton applies the Beukas standard to Count III. The
Plaintiff's conversion claim for tuition is dismissed, however,
because Count III merely restates her claim for breach of contract.
Accordingly, the Defendant's Motion to Dismiss Count III is
granted.
D. Count IV: Money Had and Received
Lastly, the Plaintiff lodges a claim for money had and received.
Because the elements to establish a claim for money had and
received mirror unjust enrichment, Count IV is dismissed in its
entirety for the same reasons articulated in Section III.B. Thus,
the Defendant's Motion to Dismiss Count IV is granted
Order
For the reasons she set forth, Judge Wigenton granted in part and
denied in part the Defendant's Motion to Dismiss. An appropriate
order follows.
A full-text copy of the Court's May 25, 2021 Opinion is available
at https://tinyurl.com/4kj9dfdm from Leagle.com.
SUNWORKS INC: Vieyra Putative Class Suit Dismissed
--------------------------------------------------
Sunworks Inc. said in its Form 8-K filing with the U.S. Securities
and Exchange Commission filed on May 21, 2021, that the putative
class action suit entitled, Vieyra v. Cargile, et al., C.A. No.
2020-0882-MTZ, has been dismissed and the company agrees to pay
$500,000 to Plaintiff's counsel for attorneys' fees and expenses in
full satisfaction of the anticipated Fee and Expense Application.
On August 10, 2020, Sunworks, Inc. entered into an Agreement and
Plan of Merger with The Peck Company Holdings, Inc. and Peck
Mercury, Inc., which contemplated the merger of Peck and the
Company in an all-stock transaction.
On October 15, 2020, the Company filed with the Securities and
Exchange Commission a definitive proxy statement to solicit the
votes of its stockholders to approve the Merger at a special
stockholder meeting to be held on November 12, 2020.
On October 12, 2020, Plaintiff Gustavo Vieyra, a stockholder of the
Company, filed a putative class action lawsuit captioned Vieyra v.
Cargile, et al., C.A. No. 2020-0882-MTZ and named as Defendants the
members of the Company's Board of Directors.
The complaint alleged, among other things, that the Board violated
its fiduciary duties under Delaware law by failing to disclose
purportedly material information regarding the proposed Merger. As
relief, the complaint sought, among other things, an injunction
against the Merger, damages and an award of attorneys' and experts'
fees.
Also on October 13, 2020, Plaintiff filed a motion for expedited
proceedings and a motion for a preliminary injunction. Thereafter,
Plaintiff conducted expedited discovery, including review of
documents and conducting depositions.
The Company and the other defendants have denied that they
committed any violation of law or engaged in any of the wrongful
acts that were or could have been alleged in the Action, and
expressly maintain that they diligently and scrupulously complied
with their fiduciary and other legal duties.
After the complaint was filed and without admitting that the
allegations in the complaint had any merit, the Company determined
to supplement the Proxy Statement, including with projections
prepared in connection with the Merger, to address the allegations
in the Action in a Form 8-K, filed with the SEC on October 30, 2020
(the "Supplemental Disclosures").
On November 24, 2020, the Court approved a stipulation under which
the Plaintiff voluntarily dismissed the Action.
The Court retained jurisdiction solely for the purpose of
adjudicating the anticipated application of Plaintiff's counsel for
an award of attorneys' fees and reimbursement of expenses in
connection with the Action (the "Fee and Expense Application").
Following negotiations, the Company, while denying any and all
liability, and maintaining that the Proxy Statement already
contained all material information required for stockholders to
cast an informed vote regarding the Merger prior to the
Supplemental Disclosures, decided it was in its and the
stockholders' best interests to resolve the Plaintiff's counsel's
anticipated Fee and Expense Application and avoid further
litigation of the issue by agreeing to pay $500,000 to Plaintiff's
counsel for attorneys' fees and expenses in full satisfaction of
the anticipated Fee and Expense Application.
The Court has not been asked to review, and will pass no judgment
on, the payment of attorneys' fees and expenses or their
reasonableness.
Sunworks Inc. provides solar energy projects operations and
development services. The Company offers project management, solar
performance assessment, procurement, installation, and financing
services. Sunworks serves residential, commercial, agricultural,
and municipal sectors. The company is based in Roseville,
California.
TARGET CORP: Faces Class Action Lawsuit Over Tampered Gift Cards
----------------------------------------------------------------
Patrick Rehkamp at bizjournals.com reports that a group of roughly
30 individuals have filed a class action lawsuit against Target
Corp., claiming the retailer sold compromised gift cards.
The plaintiffs say Target sold Apple iTunes gift cards that were
tampered with and cost customers to collectively lose millions of
dollars, according to the complaint was filed in U.S. District
Court in Minneapolis.
"Target knew that scammers would enter its stores, remove the
security tape from gift cards, log each card's secret 16-digit
activation code . . . . and use the activation code to remove
customer funds after the customer loaded money onto the gift
cards," according to the complaint. "Consumers have lost millions
of dollars that they loaded onto the gift cards because Target
failed to take adequate and reasonable measures to ensure that
scammers did not tamper with the gift cards and failed to disclose
to its customers the material fact that it was possible that the
gift cards had been tampered with."
Target refused to replenish the balance on plaintiffs' gift cards
or refund the money, according to the complaint. The plaintiffs
also say Target refused to properly warn customers about the issue
and the retailer did not have adequate security to safeguard
against data breaches.
Representatives of Minneapolis-based Target (NYSE: TGT) could not
be reached for comment.
The plaintiffs say it's likely tens of thousands of customers were
impacted by the alleged issue. The total amount lost exceeds $5
million, according to the complaint.
The lawsuit has an example of plaintiff and California resident
Shukai Chen, who bought multiple iTunes gift cards and loaded
$1,000 in total on them. Chen went to use one of the cards and
found it was already drained by an unknown third party, according
to the complaint. [GN]
TELIGENT INC: Continues to Defend Econazole Antitrust Litigation
-----------------------------------------------------------------
Teligent, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 24, 2021, for the
quarterly period ended March 31, 2021, that the company continues
to defend antitrust litigation related to the pricing of econazole
nitrate pharmaceutical products.
To date, thirteen putative class action antitrust lawsuits have
been filed against the Company along with co-defendants, including
Taro Pharmaceuticals U.S.A., Inc. and Perrigo New York Inc.,
regarding the pricing of generic pharmaceuticals, including
econazole nitrate.
The class plaintiffs seek to represent nationwide or state classes
consisting of persons who directly purchased, indirectly purchased,
paid and/or reimbursed patients for the purchase of generic
pharmaceuticals from as early as July 1, 2009 until the time the
defendants' allegedly unlawful conduct ceased or will cease.
The class plaintiffs seek treble damages for alleged overcharges
during the alleged period of conspiracy, and certain of the class
plaintiffs also seek injunctive relief against the defendants.
The actions have been consolidated by the Judicial Panel on
Multidistrict Litigation to the U.S. District Court, Eastern
District of Pennsylvania for pre-trial proceedings as part of the
In re Generic Pharmaceuticals Pricing Antitrust Litigation matter.
On October 16, 2018 the court dismissed the class plaintiffs'
claims against the Company with leave to replead.
On December 21, 2018 the class plaintiffs filed amended complaints,
which the Company moved to dismiss on February 21, 2019. On
December 19, 2019 certain class plaintiffs filed a further
complaint that included additional claims against the Company based
on the Company's sales of fluocinolone acetonide.
On October 16, 2020 and October 21, 2020, class plaintiffs amended
or moved to amend their complaints to add additional allegations,
mooting the motion to dismiss.
No further updates were provided in the Company's SEC report.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical, branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, New Jersey.
TELIGENT INC: Generic Drug Price-Fixing Suit Underway in Canada
---------------------------------------------------------------
Teligent, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 24, 2021, for the
quarterly period ended March 31, 2021, that the company and its
Canadian subsidiary, Teligent Canada, are defendants in a putative
class action suit related to alleged generic drug price-fixing.
In addition, on June 3, 2020, a putative class action lawsuit was
filed in the Federal Court of Canada against the Company and its
Canadian subsidiary, Teligent Canada, along with over fifty other
pharmaceutical defendant companies. The Canadian lawsuit alleges
that the generic drug manufacturer defendants conspired to allocate
the Canadian market and customers, fix prices and maintain the
supply of generic drugs in Canada to artificially maintain market
share and higher generic drug prices in violation of Canada's
Competition Act.
In terms of the Company and Teligent Canada, without limiting the
general allegation of a general conspiracy over the generic drug
market, the lawsuit specifically asserts allegations in relation to
econzaole dating back to September 2013 and continuing to the
present.
The representative individual plaintiff seeks to represent a class
comprised of all persons and entities in Canada who, from January
1, 2012 to the present, purchased generic drugs in the private
sector (i.e. purchases made by individuals out-of-pocket and by
individuals and businesses through private drug plans). The
plaintiff is alleging aggregate damages of CDN$2.75 billion for
harm caused to class members being charged increased prices as a
result of the alleged conspiracy.
The Canadian lawsuit is at a very early stage and the Company is
unable to form a judgment at this time as to whether an unfavorable
outcome is probable or remote or to provide an estimate of the
amount or range of potential loss.
The Company believes this lawsuit is without merit and it intends
to vigorously defend against the claim.
No further updates were provided in the Company's SEC report.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical, branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, New Jersey.
TELIGENT INC: Settlement Reached in Okla. Police Pension Fund Suit
------------------------------------------------------------------
Teligent, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on May 24, 2021, for the
quarterly period ended March 31, 2021, that a settlement has been
reached in the class action suit initiated by Oklahoma Police
Pension Fund and Retirement System.
On April 15, 2019 a federal class action was filed the Oklahoma
Police Pension Fund and Retirement System against the Company and
certain individual defendants in the U.S. District Court, Southern
District of New York.
The lawsuit was brought on behalf of persons or entities who
purchased or otherwise acquired publicly-traded Teligent, Inc.
securities from March 7, 2017 through November 6, 2017.
The complaint alleges that defendants made false or misleading
statements regarding the Company's business, operational, and
compliance policies in violation of U.S. securities laws.
The plaintiff seeks to recover compensable damages.
On June 17, 2020, the court, deeming pre-motion letters as a motion
to dismiss, granted in part and denied in part the Company's motion
to dismiss.
On Wednesday, May 5, 2021, the parties reached a settlement in
principal to resolve this dispute and no additional accrual was
required to be recognized, as the company had satisfied its
self-insurance retention.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical, branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, New Jersey.
THERMON GROUP: Settlement Reached in THS Heating Elements Suit
--------------------------------------------------------------
Thermon Group Holdings, Inc. said in its Form 10-K/A report filed
with the U.S. Securities and Exchange Commission on May 27, 2021,
for the fiscal year ended March 31, 2021, that a settlement has
been reached in the purported class action suit related to certain
heating elements previously
manufactured by Thermon Heating Systems, Inc. (THS).
In January 2020, the Company received service of process in a class
action application in the Superior Court of Quebec, Montreal,
Canada related to certain heating elements previously
manufactured by THS and incorporated into certain portable
construction heaters sold by certain manufacturers.
The Company believes this claim is without merit and intends to
vigorously defend itself against the claim.
While the Company continues to dispute the allegations, in March
2021, it reached an agreement in principle with the plaintiff and
other defendants to resolve this matter without admitting to any
liability; such agreement remains subject to the agreement of the
parties on the terms of a definitive settlement agreement.
Settlement of this matter on the agreed terms will require the
Company to contribute an amount that would not have a material
impact on the Company's consolidated financial position, results of
operations or cash flows.
The settlement is subject to, among other things, approval by the
Superior Court.
Thermon Group Holdings, Inc. provides highly engineered thermal
solutions (heating cables, tubing bundles and control systems) and
services (design optimization, engineering, installation and
maintenance services) required to deliver comprehensive solutions
to complex projects.
UNION INSURANCE: Deer Mountain Class Suit Dismissed With Prejudice
------------------------------------------------------------------
In the case, DEER MOUNTAIN INN LLC, Individually and on Behalf of
All Others Similarly Situated, Plaintiff v. UNION INSURANCE
COMPANY, Defendant, Case No. 1:20-cv-0984 (BKS/DJS) (N.D.N.Y.),
Judge Brenda K. Sannes of the U.S. District Court for the Northern
District of New York granted the Defendant's motion to dismiss the
Plaintiff's complaint.
Plaintiff Deer Mountain Inn, on behalf of itself and a putative
multi-state class and New York sub-class of similarly situated
businesses, brings the action against the Defendant seeking damages
and declaratory relief in connection with the Defendant's denial of
insurance coverage for certain of the Plaintiff's business losses
associated with the COVID-19 pandemic.
The Plaintiff operates the Deer Mountain Inn, a country inn and
restaurant located in Tannersville, New York. Like many businesses
in New York and across the country, the Plaintiff has been impacted
by the global pandemic caused by COVID-19, a highly contagious
coronavirus that was discovered in China in December 2019 and has
since spread across the world, infecting millions of people in the
U.S. and globally. In order to curb the spread of COVID-19 through
human-to-human and surface-to-human transmission, civil authorities
around the country have issued orders temporarily closing or
restricting the operations of a broad range of businesses
The Plaintiff's complaint does not describe or attach the specific
closure orders that impacted its own business in New York.
However, in connection with its motion, the Defendant submitted
copies of Executive Order No. 202.8 issued by New York Governor
Andrew Cuomo on March 20, 2020, with accompanying guidance
published on the New York State government's website. The
Plaintiff has not contested the accuracy of these documents, nor
has it pointed to any other specific Closure Orders that allegedly
caused its losses.
As relevant to the Plaintiff, the New York Closure Order requires
"all businesses and not-for-profit entities in the state" to
"reduce the in-person workforce at any work locations by 100%," but
specifically exempts "any essential business or entity providing
essential services or functions" from this requirement. The
guidance on the state website specifically defines "essential
business" to include "restaurants and bars (but only for
take-out/delivery)," as well as "hotels, and places of
accommodation." Thus, on its face, the New York Closure Order
allowed the Plaintiff's hotel business to remain open and permitted
its restaurant business to operate take-out and delivery services
at its premises, but forbade it from offering in-person dining.
At the time of the New York Closure Order, the Plaintiff was
insured by Policy Number CPA 5100237-16 issued by the Defendant for
the policy period of June 6, 2019 through June 6, 2020. The
Policy, which is a "standard form that is used by the Defendant for
all insureds having applicable coverage," is an "'all-risk'
commercial property policy which covers loss or damage to the
covered premises resulting from all risks other than those
expressly excluded." The Plaintiff alleges that the Policy (as
well as similar policies Defendant has issued to other businesses
in New York and around the country) provides coverage for business
losses incurred as a result of the Closure Orders, including those
issued in New York.
Plaintiff claims coverage under the Policy's business income
insurance provision ("Business Income Provision"), which provides,
in relevant part: "We will pay for the actual loss of Business
Income you sustain due to the necessary suspension of your
operations during the period of restoration. The suspension must
be caused by direct physical loss of or damage to property at
premises which are described in the Declarations and for which
Business Income Limit of Insurance is shown in the Declarations.
The loss or damage must be caused by or result from of a Covered
Cause of Loss."
The Plaintiff alleges that the Defendant "does not intend to cover
losses caused by the Closure Orders as part of" the Policy, and
that the Defendant has denied similar claims by other Class members
across-the-board, a practice which is belied by not only the
express terms of the insurance policies, but also by: (a) the Small
Business Administration's requirement that reimbursement from
business interruption insurance be submitted along with an
application for an Economic Injury Disaster Loan]; and (b)
America's Small Business Development Center, whose COVID-19
newsletter expressly states, Business interruption insurance also
applies if government actions cause operations to cease
temporarily, which results in a loss for a firm.
On behalf of itself and a putative multi-state class and New York
sub-class of other businesses insured by the Defendant, the
Plaintiff brings anticipatory breach of contract claims seeking
damages for Defendant's denial of coverage under the Business
Income Provision (Count II), the Extra Expense Provision (Count
IV), and the Civil Authority Provision (Count VI)
The Plaintiff also brings claims for declaratory relief with
respect to each of those provisions (Counts I, III and V), asking
the Court to issue declarations that that:
a. The Plaintiffs' and the other Class Members' Business
Income losses incurred in connection with the Closure Orders and
the necessary interruption of their businesses stemming from those
Orders are insured losses under their Policies;
b. The Defendant is obligated to pay the Plaintiffs and other
Class Members for the full amount of the Business Income losses
incurred and to be incurred in connection with the Closure Orders
during the period of restoration and the necessary interruption of
their businesses stemming from those Orders;
c. The Plaintiffs' and other Class Members' Extra Expense
losses incurred in connection with the Closure Orders and the
necessary interruption of their businesses stemming from those
Orders are insured losses under their Policies;
d. The Defendant is obligated to pay the Plaintiff and the
other Class Members for the full amount of the Extra Expense losses
incurred and to be incurred in connection with the covered losses
related to the Closure Orders during the period of restoration and
the necessary interruption of their businesses stemming from those
Orders;
e. The Plaintiffs' and the other Class Members' Civil
Authority losses incurred in connection with the Closure Orders are
insured losses under their Policies; and
f. The Defendant is obligated to pay the Plaintiff and the
other Class members the full amount of the Civil Authority losses
incurred and to be incurred in connection with the covered losses
related to the Closure Orders and the necessary interruption of
their businesses stemming from those Orders.
Presently before the Court is the Defendant's motion to dismiss the
Plaintiff's complaint pursuant to Fed. R. Civ. P. 12(b)(6). The
Plaintiff has opposed the Defendant's motion, and the Defendant has
replied. Both parties have also filed multiple notices of
supplemental authority in support of their respective positions.
The Court heard oral argument on the motion on May 24, 2021.
Analysis
A. Business Income and Extra Expense Coverage
The Defendant argues that the Plaintiff's claims under the Business
Income and Extra Expense Provisions must be dismissed because the
Plaintiff has not plausibly alleged any "direct physical loss of or
damage to property" at its premises, as required to trigger both
types of coverage. The Plaintiff argues that the loss it suffered
-- the interruption of its business operations as a result of the
Closure Orders, which deprived it of the ability to use its
property for its intended purpose -- is the type of "direct
physical loss of property" contemplated by the Policy.
Judge Sannes holds that the Policy's Business Income and Extra
Expense Provisions use the precise language that courts applying
New York law have consistently held unambiguously does not cover
mere "loss of use" that is unconnected to any physical damage,
alteration or compromise to the insured property. The qualifiers
"direct" and "physical" make clear that the "loss of property"
contemplated by the Policy is restricted to losses that are direct
and physical in nature, and does not include "forced closure of the
premises for reasons exogenous to the premises themselves, or the
adverse business consequences that flow from such closure."
Moreover, as in the foregoing cases, the Policy as a whole supports
this interpretation.
Because the Judge finds that the Policy's Business Income and Extra
Expense Provisions unambiguously do not provide coverage for the
losses the Plaintiff complains of, and that the Defendant's denial
of such coverage therefore does not constitute a breach of the
Policy, the Plaintiff's claims for declaratory relief (Counts I and
III) and anticipatory breach of contract (Counts II and IV) under
these provisions must be dismissed.
B. Civil Authority Coverage
The Defendant also argues that the Plaintiff's claims under the
Civil Authority Provision must be dismissed because the Plaintiff
has not plausibly alleged any of the "core elements" required to
trigger coverage under that provision, namely that: (1) an action
of a civil authority "prohibits access" to the insured premises;
(2) the action of that civil authority was issued as a result of
"damage" to property not more than one mile from the insured
premises caused by a Covered Cause of Loss (which, as noted
previously, the Policy defines as a "direct physical loss"); and
(3) the action of the civil authority was "taken in response to
dangerous physical conditions resulting from the damage or
continuation of the Covered Cause of Loss that caused the damage,
or to enable a civil authority to have unimpeded access to the
damaged property."
The Plaintiff does not meaningfully respond to the Defendant's
substantive arguments, other than to state that, "putting aside
that it would be improper on a Rule 12(b)(6) motion to find as a
matter of law that no business in the proximity of the Plaintiff's
business suffered a physical loss of or damage to their properties,
if the Closure Orders caused physical loss of the Plaintiff's
property, they likewise caused physical loss to property in the
vicinity of its property." Moreover, at oral argument, the
Plaintiff's counsel appeared to abandon the Plaintiff's argument
that its losses are covered by the Civil Authority Provision,
conceding that the New York Closure Order it was subject to did not
"prohibit access" to its property, as required to trigger
coverage.
Judge Sannes finds that the Plaintiff's complaint refers in general
terms to "stay-at-home" and "shelter-in-place" orders issued by
civil authorities nationwide that have "suspended or severely
curtail[ed] business operations of non-essential businesses,"
including by "closing restaurants and bars for services other than
take-out and delivery," and alleges that "as a result of the
Closure Orders the Plaintiff's business had to cease operations."
But the Plaintiff fails to point to any specific Closure Order that
forced it to shut down its business or curtail its activities, much
less allege that the relevant Closure Order met the particular
requirements for coverage under the Civil Authority Provision. For
this reason alone, the Judge holds that the Plaintiff's complaint
falls far short of stating a claim for coverage under the Civil
Authority Provision.
Even if the Judge were to consider the New York Closure Order --
which is the only Closure Order the parties discuss in their
briefing or present any record evidence of -- that order alone
would not provide a basis for coverage under the Civil Authority
Provision. By its plain terms, the New York Closure Order allowed
the Plaintiff's operations to remain open for hotel, take-out and
delivery services, while specifically exempting those services from
the capacity reduction requirements applied to businesses deemed
"non-essential."
Because the Judge finds that the Policy's Civil Authority Provision
unambiguously does not provide coverage for the losses Plaintiff
complains of, and that the Defendant's denial of such coverage
therefore does not constitute a breach of the Policy, Plaintiff's
claims for declaratory relief (Count V) and anticipatory breach of
contract (Counts VI) under this provision must be dismissed.
C. Exclusions
The parties also present arguments as to whether, assuming the
losses the Plaintiff complains of are insured under the Policy,
coverage is nonetheless barred by the Policy's Virus Exclusion or
other exclusions in the Policy. These exclusions only apply if
entitlement to coverage under one of the Policy's provisions is
first established, and therefore, because Judge Sannes concludes
that the Plaintiff fails to establish entitlement to coverage under
the Policy, she need not reach the question of whether these
various exclusions would apply.
D. Dismissal of Plaintiff's Complaint with Prejudice
Because Judge Sannes has found that all of the Plaintiff's
individual claims for damages and declaratory relief must be
dismissed, the Plaintiff's class claims must be dismissed as well.
Therefore, the Plaintiff's complaint must be dismissed in its
entirety.
The Plaintiff has not requested leave to amend its complaint. In
any event, the Judge finds that any amendment would be futile, as
based on the Policy's plain language and the legal principles
reviewed throughout the Decision, the Policy unambiguously does not
cover the Plaintiff's losses, and it does not appear that the
Plaintiff could plead any set of facts that would give rise to a
plausible claim for the relief it seeks. Therefore, the Judge
dismisses the Plaintiff's complaint with prejudice.
Conclusion
For these reasons, Judge Sannes granted the Defendant's motion to
dismiss the Plaintiff's complaint pursuant to Fed. R. Civ. P.
12(b). She dismissed the Plaintiff's complaint with prejudice in
its entirety.
A full-text copy of the Court's May 24, 2021 Memorandum-Decision &
Order is available at https://tinyurl.com/2r4nvy4w from
Leagle.com.
James E. Cecchi -- JCecchi@carellabyrne.com -- Lindsey H. Taylor --
LTaylor@carellabyrne.com -- Carella, Byrne, Cecchi, Olstein, Brody
& Agnello, P.C., in Roseland, New Jersey.
Christopher A. Seeger -- cseeger@seegerweiss.com -- Stephen A.
Weiss -- sweiss@seegerweiss.com -- Seeger Weiss LLP, in Ridgefield
Park, New Jersey.
Samuel H. Rudman -- srudman@rgrdlaw.com -- Mark S. Reich --
mreich@rgrdlaw.com -- Robbins Geller Rudman & Dowd LLP, in
Melville, New York.
Paul J. Geller -- PGeller@rgrdlaw.com -- Stuart A. Davidson --
SDavidson@rgrdlaw.com -- Robbins Geller Rudman & Dowd LLP, in Boca
Raton, Florida, For Plaintiff.
Antonia B. Ianniello, Lisa M. Southerland --
lsoutherland@steptoe.com -- Steptoe & Johnson LLP, in Washington,
D.C.
Jonathan M. Bernstein -- jbernstein@goldbergsegalla.co -- Goldberg
Segalla LLP, in Albany, New York, For Defendant.
UNITED SERVICES: Court Upholds Substitution of Elter as Class Rep.
------------------------------------------------------------------
In the case, JARRON ELTER, individually, and as the representative
of ALL PERSONS similarly situated, Respondent(s), v. UNITED
SERVICES AUTOMOBILE ASSOCIATION, USAA CASUALTY INSURANCE COMPANY,
USAA GENERAL INDEMNITY COMPANY, and GARRISON PROPERTY AND CASUALTY
INSURANCE COMPANY, Petitioners, Case No. 53196-8-II (Wash. App.),
the Court of Appeals of Washington, Division Two, holds that the
trial court did not err by substituting Plaintiff Elter as the
class representative and that the class was properly certified
under CR 23.
The case involves the measure of loss of use benefits payable for
property damage to insured vehicles under the
uninsured/underinsured motorist coverage of auto insurance policies
issued by United Services Automobile Association, USAA Casualty
Insurance Company, USAA General Indemnity Company, and Garrison
Property and Casualty Insurance Company (collectively USAA).
David and Marissa Turk filed a class action lawsuit against USAA,
claiming that USAA had breached its insurance policies regarding
the payment of loss of use benefits, and the trial court certified
the class. In November 2013, Marissa Turk was rear-ended by an
uninsured driver, causing her to rear-end the vehicle in front of
her. At the time of the accident, Marissa had automobile insurance
through USAA, which included uninsured/underinsured motorist (UIM)
coverage. USAA's policy provided coverage for property damage
caused by a UIM driver and for loss of use during the period of
repair. T
Marissa was without the use of her vehicle while her vehicle was
being repaired. In 2014, the Turks filed a class action lawsuit
against USAA for breach of contract based on USAA's failure to pay
loss of use damages under its UIM coverage.
In May 2016, the Turks moved for certification of a class to
include: All USAA insureds with Washington policies issued in
Washington State, where USAA determined the loss to be covered
under the MM coverage, and their vehicle suffered a loss requiring
repair, or the vehicle was totaled, during which time they were
without the use of their vehicle, for a clay or more.
After the Court of Appeals reversed the class certification because
the Turks were not proper class representatives, the trial court
entered an order substituting Jarron Elter as class representative
and left the original certification order intact. USAA appeals,
claiming that the substitution was improper and that the class was
improperly certified under CR 23.
Analysis
The Court of Appeals addresses as a threshold issue: Whether the
March 15, 2019 order substituting the class representative was
proper under CR 23. If the trial court did not err in substituting
Mr. Elter, the Court of Appeals will address whether the class was
properly certified under CR 23.
I. Substitution of Class Representative
USAA argues that the trial court erred by simply substituting Elter
as the new representative for the old representative without
requiring the Plaintiffs to file an amended complaint. It claims
that the substitution of the named Plaintiff is permissible only if
the class has already been certified and that the substitution was
improper here because we vacated the previous class certification.
The Court of Appeals disagrees. It opines that the trial court was
required to take the substantive allegations in the complaint as
true, including the allegations in Elter's declaration filed in
support of the motion for substitution. Thus, it properly relied
on Elter's declaration and the allegations in the complaint to
determine whether Elter was an appropriate class representative.
USAA also argues that substitution of the class representative
cannot occur until the class is certified. But the unpublished
opinions that USAA cites do not support such a rule.
For these reasons, the Court of Appeals holds that the trial
court's order granting substitution of Elter as the class
representative was proper and it did not err.
II. Damages for Loss of Use
At that time, the Plaintiffs requested certification based on the
test for loss of use damages stated in Straka Trucking, Inc. v.
Estate of Peterson, 98 Wn.App. 209, 211, 989 P.2d 1181 (1999), not
the inconvenience test in Holmes v. Raffo, 60 Wn.2d 421, 431, 374
P.2d 536 (1962). The trial court adopted the Straka loss of use
standard, under which loss of use may be measured by (1) lost
profits, (2) the cost of renting a substitute vehicle, (3) the
rental value of the plaintiff's car, or (4) interest. The court
ruled that evidence of the value of a rental car is one method of
measuring loss of use.
The parties dispute the applicable measure for loss of use damages.
USAA argues that the trial court erred by adopting the Straka test
for the measure of damages rather than the Holmes test. Elter
argues that the court correctly applied the Straka test for loss of
use damages and that the Holmes test for damages is consistent with
Straka.
The Court of Appeals finds that the court in Holmes made it clear
that the cost of renting a substitute vehicle was not the measure
of loss of use damages. Instead, the measure is the amount that
will compensate the plaintiff for the inconvenience of not having
an automobile. However, it is significant that under Holmes,
evidence of the cost of a rental vehicle is admissible at trial and
is sufficient for the jury to award loss of use damages.
The Court of Appeals also finds that Straka is not necessarily
inconsistent with Holmes. It did not contradict the statement in
Holmes that "proof of what it reasonably would have cost to hire a
substitute automobile is sufficient evidence to carry this item of
damages to the jury." In other words, Straka stated that one
method of proving loss of use damages is evidence of the cost of a
rental, but it did not state that this was the sole method.
On remand, the Court of Appeals directs the trial court to rely on
Holmes for determining the proper measure of damages for loss of
use. But applying Holmes also means recognizing that evidence
regarding the costs of a rental automobile is relevant and
admissible to prove loss of use damages.
III. Class Certification Under CR 23
USAA claims that class certification is improper because under
Holmes, there would need to be testimony from each class member and
damages would vary from insured to insured. It argues that the
commonality, predominance, and superiority requirements in CR 23
were not satisfied.2
The Court of Appeals disagrees. It holds that the Plaintiffs have
demonstrated that the class members share common issues of law and
fact. Accordingly, the trial court did not en" by finding
commonality was met.
In addition, the difference in the amount of loss of use damages
owed to the individuals does not defeat the point that USAA did not
pay its insureds loss of use damages. The Plaintiff class members
have demonstrated that common issues predominate over individual
issues. Accordingly, the trial court did not err by finding that
the predominance requirement was met.
Lastly, the trial court also considered the CR23(b)(3) factors and
determined that the class was as potentially small as 6,000 people
or as large as 11,000 people, and that a class action was a fair
and efficient adjudication of the action, superior to conducting
individualized inquiries. On this record, the Court of Appeals
holds that the trial court did not err by finding that the
superiority requirement was met.
Conclusion
The Court of Appeals holds that the trial court did not err by
substituting Elter as the class representative and that the class
was properly certified under CR 23. It also clarifies the proper
standard for the measurement of loss of use damages. Thus, it
remands for further proceedings consistent with its opinion.
Nothing in the decision prevents the trial court from revisiting
various CR 23 requirements in the future, including typicality or
other requirements of Elter as a class representative, if further
factual developments warrant reconsideration.
A full-text copy of the Court's May 25, 2021 Opinion is available
at https://tinyurl.com/c9ut83bp from Leagle.com.
Michael A. Moore -- mmoore@corrcronin.com -- Corr Cronin LLP, at
1001 4th Ave., Ste. 3900, in Seattle, Washington 98154-1051; Jay
Williams -- jwilliams@schiffhardin.com -- Schiff Hardin LLP, at 233
S Wacker Drive, Suite 6600, in Chicago, Illinois 60606; Victoria
Elizabeth Ainsworth -- tainsworth@corrcronin.com -- Corr Cronin
LLP, at 1001 4th Ave., Ste. 3900, in Seattle, Washington
98154-1051, Counsel for Petitioner(s).
Stephen Michael Hansen -- info@stephenmhansenlaw.com -- Law Offices
of Stephen M Hansen PS, at 1821 Dock St., Unit 103, in Tacoma,
Washington 98402-3201; Scott Nealey, at 71 Stevenson Street #400,
in San Francisco, California 94105, Counsel for Respondent(s).
UNITED STATES: Class Certified in Scott FTCA Suit v. BOP's MDC
--------------------------------------------------------------
In the case, DAVID SCOTT, JEREMY CERDA, OSMAN AK, MERUDH PATEL,
GREGORY HARDY, and LARRY WILLIAMS, individually and on behalf of
all others similarly situated, Plaintiffs v. FORMER WARDEN HERMAN
E. QUAY, FACILITIES MANAGER JOHN MAFFEO, and THE UNITED STATES OF
AMERICA, Defendants, Case No. 19-cv-1075 (ERK) (PK) (E.D.N.Y.),
Judge Edward R. Korman of the U.S. District Court for the Eastern
District of New York granted the Plaintiffs' motion to certify a
class pursuant to Rule 23 of the Federal Rules of Civil Procedure.
The Plaintiffs brought the Federal Tort Claims Act (FTCA) action
for negligence on behalf of a putative class of persons
incarcerated at the Bureau of Prisons' (BOP) Metropolitan Detention
Center (MDC) facility in Brooklyn during a power outage. The
complaint alleged that on Jan. 27, 2019, during a period of severe
winter weather, the West Building at the MDC lost power because of
an electrical fire. MDC staff were unable to restore power until
Feb. 3, 2019, a week later. As a result of the power outage, those
held in the West Building were allegedly subjected to inhumane
conditions that posed unreasonable and substantial risks to their
health and safety, which the complaint referred to as the
"Conditions Crisis."
The Plaintiffs allege that After the power outage, MDC staff
"ordered a lockdown of everyone in their cells." West Building
residents spent the Conditions Crisis "immersed in complete
darkness." All the Plaintiffs endured "frigid temperatures." They
were deprived of hot food during the Conditions Crisis. The
Plaintiffs also lacked access to hot water for cleaning, bathing,
and laundry. The MDC staff also restricted communication and
visitation with family and counsel and failed to communicate with
West Building residents. And, the power outage further disrupted
access to medical care.
The Plaintiffs now move to certify a class pursuant to Federal Rule
of Civil Procedure 23. They seek to certify a class "consisting of
all those people who were confined in the Metropolitan Detention
Center's West Building from January 27, 2019 until February 3,
2019, and who have or will in the future have satisfied the
exhaustion requirement imposed by the FTCA."
Putative class representatives David Scott and Jeremy Cerda, as
well as Plaintiffs Osman Ak, Merudh Patel, Gregory Hardy, and Larry
Williams, were incarcerated in the West Building when the power
went out. The Plaintiffs support their motion to certify a class
with declarations and two documents incorporated by reference: A
report from the Office of the Inspector General within the
Department of Justice and congressional testimony by the Executive
Director of the Federal Defenders of New York, David E. Patton.
Taken together, the evidence paints a harrowing picture of prison
conditions in the wake of the fire and power outage. In
particular, the evidence describes a series of inhumane and
potentially dangerous conditions that affected residents throughout
the West Building during the week without power.
Judge Korman concludes that the Plaintiffs have demonstrated that
the proposed class is ascertainable and complies with the Rule
23(a) prerequisites. They have also shown compliance with the
requirements to maintain a class pursuant to Rule 23(b)(3).
Therefore, the Judge granted the Plaintiffs' motion to certify a
class pursuant to Federal Rule of Civil Procedure 23.
Accordingly, a class consisting of "all those people who were
confined in the Metropolitan Detention Center's West Building from
January 27, 2019 until February 3, 2019, and who have or will in
the future have satisfied the exhaustion requirement imposed by 28
U.S.C. Section 2675," is certified. The Plaintiffs' counsel is
appointed the class counsel in light of the work they have already
done on the case, as well as their experience, knowledge, and
resources.
A full-text copy of the Court's May 25, 2021 Memorandum & Order is
available at https://tinyurl.com/5xxt2ehy from Leagle.com.
UNIVERSITY OF IOWA HOSPITALS: Judge Allows Workers to Join Suit
---------------------------------------------------------------
Kelly Gooch at beckershospitalreview.com reports that a federal
judge has ruled that a lawsuit alleging Iowa City-based University
of Iowa Hospitals and Clinics failed to pay wages and overtime in a
timely manner should have class-action status for two more groups,
The Gazette reported May 20.
U.S. District Judge Stephanie Rose in Iowa certified two classes.
The classes include union members and blue-collar workers who were
not paid until more than a dozen days after their pay period ended,
according to the report. They have worked for the health system
since 2017, the year the employee union lost collective bargaining
rights.
The judge also certified class status for union and blue-collar
workers who have worked for the health system since 2017, and were
since terminated and have not received certain accrued or unused
accumulated benefits by what would have been the next regular day
on which they got paid, according to the report.
Certification of the two classes came after the judge had already
certified a class of University of Iowa Hospitals and Clinics
workers alleging the health system did not pay wage adjustments for
overtime work in a timely fashion.
In a statement shared with Becker's, University of Iowa hospital
officials said they made payroll changes in the last year,
including making staff nurse and select professional
classifications "nonexempt" positions to comply with the federal
Fair Labor Standards Act.
"This change resulted in a transition to four-week work schedules,
as opposed to the previously available six-week work schedule,
which assisted in the alignment of schedules to payroll dates," the
health system said. "UI Health Care also transitioned to a biweekly
payment period for employees eligible to receive overtime and other
pay adjustments. These changes have helped UI Health Care better
align its pay practices with other healthcare providers across the
country."
The lawsuit was originally filed in August 2019 by two nurses and a
physical therapist. It accuses University of Iowa Hospitals and
Clinics of not paying wage adjustments for overtime until one to
two months after the overtime had been worked. [GN]
UNIVERSITY PHYSICIANS: Loses Bid to Dismiss Butterfield Class Suit
------------------------------------------------------------------
In the case, MICHELLE BUTTERFIELD, individually and on behalf of
all others similarly situated, Plaintiff v. UNIVERSITY PHYSICIANS &
SURGEONS, INC., d/b/a Marshall Health, Defendant, Civil Action No.
3:20-0759 (S.D.W. Va.), Judge Robert C. Chambers of the U.S.
District Court for the Southern District of West Virginia,
Huntington Division:
(i) denies the Defendant's Motion to Dismiss; and
(ii) denies as moot the Defendant's Motion to Stay Litigation
Pending Decision Regarding Defendant's Motion to Dismiss.
In the Complaint, the Plaintiff alleges that she was an employee of
the Defendant as defined by the Fair Labor Standards Act (FLSA), 29
U.S.C. Section 203(e)(1) and (g), from August 2016 to July 2020.
She states that she and others similarly situated as her served as
health care workers at the Defendant's health care facilities in
West Virginia. The Plaintiff asserts that they were paid by the
Defendant on an hourly and/or per diem basis.
During her employment, the Plaintiff states that she and the other
employees worked more than 40 hours per week without being paid one
and one-half their regular rate as required by FLSA. She alleges
that, during the summer of 2020, there were several occasions she
reported overtime hours, but she was not provided overtime pay.
The Plaintiff claims that the Defendant told her it could not
afford to pay overtime.
Therefore, the Plaintiff filed her action individually, and on
behalf of all healthcare employees paid on an hourly and/or per
diem basis who have been employed by the Defendants at any time
since three years prior to the filing of the Complaint until the
date of the final judgment in the matter.
The Defendant seeks to dismiss the Complaint on two grounds.
First, it argues the Complaint is insufficient to state a cause of
action under Section 207 of FLSA. Second, the Defendant asserts
the Complaint fails to allege sufficient facts identifying a
putative class.
In Hall v. DIRECTTV, LLC, 846 F.3d 757 (4th Cir. 2017), the Fourth
Circuit considered how detailed claims under FLSA must be to avoid
dismissal. In doing so, the Fourth Circuit rejected the notion
that a plaintiff is required to approximate the number of
uncompensated hours to survive a Rule 12(b)(6) motion. Instead,
the Fourth Circuit adopted the more lenient approach taken by the
First, Second, and Ninth Circuit Courts of Appeals, "requiring
plaintiffs only to 'sufficiently allege 40 hours of work in a given
workweek as well as some uncompensated time in excess of the 40
hours.'"
Judge Chambers opines that although the Defendant argues that the
allegations in the Plaintiff's Complaint are insufficient to show
she has a plausible claim under FLSA, he disagrees. He notes that
the Fourth Circuit has adopted the more liberal pleading standard.
In her Complaint, the Plaintiff alleges that the Defendant
permitted her to work over 40 hours per week. She further states
that, during a limited and defined period during the summer of
2020, she reported overtime hours to Defendant for several pay
periods that were in excess of forty hours. According to the
Plaintiff, the Defendant refused to provide her the overtime pay,
purportedly because it told her it could not afford it.
These allegations, according to Judge Chambers, are more than the
Plaintiff simply alleging she regularly worked more than 40 hours a
week without receiving overtime pay. Instead, the Plaintiff has
identified, as an example, a narrow timeframe in which she asserts
she reported overtime hours, was not paid for those hours, and the
Defendant excused its failure to pay her by claiming lack of funds.
Assuming the truth of these allegations for purposes of a motion
to dismiss, the Judge finds the Plaintiff has stated sufficient
facts to nudge her "claim from conceivable to plausible." She
easily finds the Defendant has fair notice of the Plaintiff's
individual FLSA claim. Therefore, the Judge denies the Defendant's
motion to dismiss this claim.
The Defendant next argues that the Plaintiff has failed to
sufficiently allege a collective action under FLSA. Although FLSA
permits a plaintiff to maintain a class action on behalf of
similarly situated employees, it asserts the Plaintiff's
accusations with respect to the class are merely a formulaic
recitation of the elements and the Plaintiff has no actual
knowledge about wages paid to other employees. In response, the
Plaintiff argues it is reasonable to infer that, if the Defendant
told her it did not have enough funds to pay her overtime during
the summer of 2020, it also could not pay other employees who
worked overtime. She also alleged the nonpayment of overtime was
pursuant to a policy of the Defendant.
As the Court recently explained in Fain v. Crouch, No. 3:20-0740,
2021 WL 2004793 (S.D.W. Va. May 19, 2021), class certification
"requires a 'rigorous' factual and legal analysis," making it "rare
for a court to make a class determination at the pleadings stage."
Therefore, "class allegations should be stricken only when it is
clear from the face of the complaint that the plaintiff cannot and
could not meet Fed. R. Civ. P. 23's requirements for
certification." Although the Plaintiff in the case does not
identify any other specific employees not paid overtime wages, that
information, if true, rests in the hands of the Defendant and is a
matter for discovery.
Despite not having this very specific information from the outset,
assuming the truth of the allegations the Plaintiff has made, the
Judge finds the Plaintiff's allegations that the Defendant had a
policy of not paying overtime, that the Defendant told the
Plaintiff it did not have funds to pay overtime, and that the
Plaintiff and similarly situated employees worked overtime without
being paid those wages are sufficient to state a plausible claim
and survive a motion to dismiss. Therefore, the Judge denies the
Defendant's motion to dismiss the class claim. Whether or not the
Plaintiff ultimately will be able to certify a class and the
details of any proposed certified class is a matter to address
following discovery.
Accordingly, for the foregoing reasons, Judge Chambers denies the
Defendant's Motion to Dismiss. Having denied the motion, the Judge
denies as moot the Defendant's Motion to Stay. She directs the
Clerk to send a copy of the Order to the counsel of record and any
unrepresented parties.
A full-text copy of the Court's May 24, 2021 Memorandum Opinion &
Order is available at https://tinyurl.com/dmsfwumw from
Leagle.com.
WEST VIRGINIA: Cheatham's Bid to Dismiss Class Complaint Junked
---------------------------------------------------------------
In the class action lawsuit captioned as CHRISTOPHER FAIN; ZACHARY
MARTELL; and MCNEMAR, individually and on behalf of all others
similarly situated, v. WILLIAM CROUCH, in his official capacity as
Cabinet Secretary of the West Virginia Department of Health and
Human Resources; CYNTHIA BEANE, in her official capacity as
Commissioner for the West Virginia Bureau for Medical Services;
WEST VIRGINIA DEPARTMENT OF HEALTH AND HUMAN RESOURCES, BUREAU FOR
MEDICAL SERVICES; TED CHEATHAM, in his official capacity as
Director of the West Virginia Public Employees Insurance Agency;
and THE HEALTH PLAN OF WEST VIRGINIA, INC., Case No. 3:20-cv-00740
(S.D.W.Va.), the Hon. Judge Robert C. Chambers entered an order:
1. denying the Defendant Cheatham's Motion to Dismiss the
Complaint, and WVDHHR Defendants' Motion for Partial
Dismissal of Plaintiffs' Class Action and Motion to Dismiss;
2. granting the Plaintiffs' Motion for Leave to file Sur-Reply;
and
3. directing the Clerk to send a copy of the Opinion to counsel
of Record and any unrepresented party.
The Court said, "Cheatham's last argument is that the Plaintiffs
failed to state an Equal Protection claim upon which relief may be
granted because the PEIA policy passes heightened scrutiny. In
short, Cheatham argues that there are three important government
interests which are substantially related to PEIA's policies: (1)
"guarantee[ing] the health and safety of the enrollees," (2)
"maintain[ing] the medical standards of physicians and other
entities that accept the insurance of enrollees," and (3) "sav[ing]
taxpayer dollars from use for procedures that are not medically
necessary, or FDA approved." As Plaintiffs argue in their Response,
Cheatham's argument is improper because it relies on facts outside
of the Complaint. For example, Cheatham's representations regarding
patient "safety" and "medically necessary [procedures]" assume
facts that are neither in the Complaint nor the record. In fact,
the Complaint alleges the opposite: that gender-confirming care is
medically necessary and safe. Therefore, the Court will not
entertain Cheatham's fact-based arguments at this stage and denies
Cheatham's Motion to Dismiss."
The West Virginia Department of Health and Human Resources is a
government agency of the U.S. state of West Virginia. The
department administers the state's health, social, and welfare
programs.
A copy of the Court's memorandum, opinion and order dated May 19,
2021 is available from PacerMonitor.com at https://bit.ly/3wN4Lkc
at no extra charge.[CC]
WIRBICKI LAW: Loses Bid to Dismiss Bandele FDCPA Class Suit
-----------------------------------------------------------
In the case, KAI BANDELE, Plaintiff v. THE WIRBICKI LAW GROUP, LLC,
and BAYVIEW LOAN SERVICING, LLC, Defendants, Case No. 20 C 4104
(N.D. Ill.), Judge Jorge L. Alonso of the U.S. District Court for
the Northern District of Illinois, Eastern Division:
(i) grants in part and denies in part Defendant Bayview's
motion to dismiss; and
(ii) denies Defendant Wirbicki Law Group, LLC's motion to
dismiss.
The Plaintiff took out a mortgage to purchase her home in Chicago
but ultimately defaulted on that loan. Defendant Bayview is the
mortgage servicer for the Plaintiff's mortgage loan. Bayview hired
Defendant Wirbicki to file a foreclosure action.
Wirbicki filed the foreclosure action in May 2018. The Plaintiff
hired an attorney to represent her in the foreclosure action, and
that attorney filed an appearance on her behalf. Because the
attorney served a copy of the appearance on Wirbicki, both Wirbicki
and Bayview knew that the Plaintiff was represented by counsel.
Notwithstanding this knowledge, Wirbicki mailed the Plaintiff two
dunning letters, copies of which the Plaintiff attached to her
complaint.
Specifically, on July 15, 2019, Wirbicki mailed the first letter to
the Plaintiff. The Plaintiff alleges that the letter confused her.
She alleges that an "unsophisticated consumer would not know the
amount that would be required to pay off the loan, though Bayview
was required to provide an accurate payoff amount."
The Plaintiff alleges Wirbicki mailed her a second letter on Dec.
2, 2019. On March 6, 2018, JPMorgan Chase Bank, N.A. assigned the
Plaintiff's mortgage to Bayview.
Based on these allegations, the Plaintiff filed a purported
class-action complaint, in which she asserts claims for violation
of the Fair Debt Collection Practices Act ("FDCPA"). The
Defendants move to dismiss.
Discussion
In Count I, the Plaintiff asserts that the Defendants violated the
FDCPA Section 1692e in sending the first letter, because the letter
threatened late charges when the loan had already been accelerated
but she had not sought reinstatement. The Plaintiff alleges the
letter constituted a threat to take action that could not legally
be taken and constituted false, deceptive or misleading
representations.
In Count II, the Plaintiff asserts that the first and second
letters were false, deceptive or misleading in how they described
the amount due for payoff (in the first letter) or reinstatement
(in the second). Specifically, she alleges she was confused that
the letters said a specific amount was valid through a date certain
and then said the amount might change on that date certain.
In Count III, the Plaintiff asserts the Defendants violated the
FDCPA by sending her the first letter despite knowing that she was
represented by counsel.
A. Consent
In Count III, the Plaintiff asserts that the Defendants violated
Section 1692c(a) of the FDCPA when "Wirbicki, on behalf of Bayview"
sent the first letter to her. The Defendants move to dismiss this
count, arguing that the Plaintiff pleaded herself out of court on
this claim by attaching a document that proves she consented.
Specifically, they point to the first letter itself, which the
Plaintiff attached to the complaint.
Judge Alonso does not agree with the Defendants that the Plaintiff,
by attaching the letter, has admitted the truth of every statement
defendant included in the letter. It is clear that the Plaintiff
attached the letter in support of her FDCPA claims. She attached
the letter to show the letter was sent to her and to show the
language she alleges violated the FDCPA. The Judge agrees that he
may consider each letter in its entirety when considering whether
the language violates the FDCPA. What he will not do is assume the
truth of every fact the Defendant included in those letters.
For these reasons, the Judge holds that the first dunning letter
does not, by its nature, imply credibility, and the Plaintiff was
not vouching for the facts the Defendant included therein when she
attached it to show that the letter was sent to her and to show the
language she claims violates the FDCPA. She has not, by attaching
it, admitted the truth of the Defendant's statement in the letter
that the letter was solicited. She has not admitted that she
consented to the letter. The Judge will not dismiss Count III on
this basis at the 12(b)(6) stage.
B. Notice and cure
The Defendants argue that the Plaintiff's claims must be dismissed,
because she has failed to allege that she gave notice and allowed a
reasonable time for corrective action.
Judge Alonso opines that, as the Plaintiff points out, the
notice-and-cure provision applies only to suits against the Lender.
It is clear that Bayview counts as Lender. The mortgage defined
Lender as JP Morgan Chase Bank, N.A., which assigned the mortgage
to Bayview on March 6, 2018, as it was allowed to do under the
mortgage. At that point, Bayview became the Lender and was
entitled to notice. Because the Plaintiff has not alleged that she
gave such notice, Count I is dismissed without prejudice as to
Bayview.
As the Plaintiff also points out, the Judge finds that Defendant
Wirbicki (who did not file its own brief but instead merely adopted
Bayview's) has not explained why the notice-and-cure provision
would apply to claims against it. Accordingly, he will not dismiss
Count I against Wirbicki on the basis of the notice-and-cure
provision at this time.
C. Rizzo
In Count I, the Plaintiff asserts that the Defendants violated the
FDCPA Section 1692e in sending the first letter, because the letter
threatened late charges when the loan had already been accelerated
and when plaintiff had not sought reinstatement.
The Defendant cites Rizzo v. Pierce & Assoc., 351 F.3d 791 (7th
Cir. 2003) and argues that late charges could be assessed in the
event a mortgage was reinstated after acceleration. In Rizzo, the
Seventh Circuit concluded that defendant had not violated the FDCPA
by charging late fees for past-due payments on an accelerated
mortgage after reinstatement, because the mortgage allowed those
fees to be charged in the event of reinstatement.
In the case, though, the Plaintiff's claim is that the Defendants
threatened to charge late fees after acceleration even though the
Plaintiff did not ask to have the mortgage reinstated. The
Defendants have not convinced Judge Alonso that Count I should be
dismissed on this basis.
Conclusion
For the reasons he set forth, Judge Alonso grants in part and
denies in part Defendant Bayview's motion to dismiss. The Judge
dismisses without prejudice Count I against Bayview. The Judge
denies Defendant Wirbicki's motion to dismiss. The Plaintiff is
granted until June 14, 2021 to file an amended complaint should she
so choose. The Defendants' deadline to answer or otherwise plead
is July 6, 2021. The case is set for status on July 7, 2021, at
9:30 a.m.
A full-text copy of the Court's May 25, 2021 Memorandum Opinion &
Order is available at https://tinyurl.com/ypcmy4zu from
Leagle.com.
Asbestos Litigation
ASBESTOS UPDATE: AMETEK Still Defends Asbestos-Related Suits
------------------------------------------------------------
AMETEK, Inc. (including its subsidiaries), has been named as a
defendant in a number of asbestos-related lawsuits, according to
the Company's Form 10-Q filing with the U.S. Securities and
Exchange Commission.
The Company states, "Certain of these lawsuits relate to a business
which was acquired by the Company and do not involve products which
were manufactured or sold by the Company. In connection with these
lawsuits, the seller of such business has agreed to indemnify the
Company against these claims (the "Indemnified Claims"). The
Indemnified Claims have been tendered to, and are being defended
by, such seller. The seller has met its obligations, in all
respects, and the Company does not have any reason to believe such
party would fail to fulfill its obligations in the future. To date,
no judgments have been rendered against the Company as a result of
any asbestos-related lawsuit. The Company believes that it has good
and valid defenses to each of these claims and intends to defend
them vigorously."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3g4fAHS
ASBESTOS UPDATE: Chemours Co. Assumes 1,000 EID PI Lawsuits
-----------------------------------------------------------
The Chemours Company, due to the terms of the Separation-related
agreements with EID, has been assigned to approximately 1,000 and
1,100 lawsuits pending at March 31, 2021 and December 31, 2020,
respectively, against Chemours from E. I. du Pont de Nemours and
Company (EID) alleging personal injury from exposure to asbestos,
according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission.
The Company states, "In the Separation, EID assigned its asbestos
docket to Chemours. These cases are pending in state and federal
court in numerous jurisdictions in the U.S. and are individually
set for trial. A small number of cases are pending outside of the
U.S. Most of the actions were brought by contractors who worked at
sites between the 1950s and the 1990s. A small number of cases
involve similar allegations by EID employees or household members
of contractors or EID employees. Finally, certain lawsuits allege
personal injury as a result of exposure to EID products.
"At March 31, 2021 and December 31, 2020, Chemours had an accrual
of $34 related to these matters."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3wOtFQG
ASBESTOS UPDATE: Crane Has 29,407 Pending Claims at March 31
------------------------------------------------------------
Crane Co., as of March 31, 2021, is a defendant in cases filed in
numerous state and federal courts alleging injury or death as a
result of exposure to asbestos, according to the Company's Form
10-Q filing with the U.S. Securities and Exchange Commission.
The Company states, "Of the 29,407 pending claims as of March 31,
2021, approximately 18,000 claims were pending in New York of which
approximately 16,000 are non-malignancy claims that were filed over
15 years ago and have been inactive under New York court orders.
"We have tried several cases resulting in defense verdicts by the
jury or directed verdicts for the defense by the court. We further
have pursued appeals of certain adverse jury verdicts that have
resulted in reversals in favor of the defense. We have also tried
several other cases resulting in plaintiff verdicts which we paid
or settled after unsuccessful appeals.
"The gross settlement and defense costs incurred (before insurance
recoveries and tax effects) by us for the three months ended March
31, 2021 and 2020 totaled $9.1 million and $12.6 million,
respectively. In contrast to the recognition of settlement and
defense costs, which reflect the current level of activity in the
tort system, cash payments and receipts generally lag the tort
system activity by several months or more, and may show some
fluctuation from period to period. Cash payments of settlement
amounts are not made until all releases and other required
documentation are received by us, and reimbursements of both
settlement amounts and defense costs by insurers may be uneven due
to insurer payment practices, transitions from one insurance layer
to the next excess layer and the payment terms of certain
reimbursement agreements. Our total pre-tax payments for settlement
and defense costs, net of funds received from insurers, for the
three months ended March 31, 2021 and, 2020 totaled $10.8 million
and $11.7 million, respectively.
"Cumulatively through March 31, 2021, we have resolved (by
settlement or dismissal) approximately 142,000 claims. The related
settlement cost incurred by us and our insurance carriers is
approximately $684 million, for an average settlement cost per
resolved claim of approximately $4,800. The average settlement cost
per claim resolved during the years ended December 31, 2020, 2019
and 2018 was $13,900, $15,800, and $11,300, respectively. Because
claims are sometimes dismissed in large groups, the average cost
per resolved claim, as well as the number of open claims, can
fluctuate significantly from period to period. In addition to large
group dismissals, the nature of the disease and corresponding
settlement amounts for each claim resolved will also drive changes
from period to period in the average settlement cost per claim.
Accordingly, the average cost per resolved claim is not considered
in our periodic review of our estimated asbestos liability."
"A full-text copy of the Form 10-Q is available at
https://bit.ly/3p91Q2E
ASBESTOS UPDATE: Exelon Had $88MM Est. Liabilities at March 31
--------------------------------------------------------------
Exelon Corporation and Generation, at March 31, 2021 and December
31, 2020, had recorded estimated liabilities of approximately $88
million and $89 million, respectively, in total for
asbestos-related bodily injury claims, according to the Company's
Form 10-Q filing with the U.S. Securities and Exchange Commission.
The Company states, "As of March 31, 2021, approximately $24
million of this amount related to 243 open claims presented to
Generation, while the remaining $64 million is for estimated future
asbestos-related bodily injury claims anticipated to arise through
2055, based on actuarial assumptions and analyses, which are
updated on an annual basis. On a quarterly basis, Generation
monitors actual experience against the number of forecasted claims
to be received and expected claim payments and evaluates whether
adjustments to the estimated liabilities are necessary.
"It is reasonably possible that additional exposure to estimated
future asbestos-related bodily injury claims in excess of the
amount accrued could have a material, unfavorable impact on
Exelon's and Generation's financial statements. However, management
cannot reasonably estimate a range of loss beyond the amounts
recorded."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3yNKxJ7
ASBESTOS UPDATE: Freeport-McMoRan Still Defends Exposure Claims
---------------------------------------------------------------
Freeport-McMoRan Inc.'s various affiliates, since approximately
1990, have been named as defendants in a large number of lawsuits
alleging personal injury from, among other things, exposure to
asbestos or talc allegedly contained in industrial products, and
more recently alleging the presence of asbestos contamination in
talc-based cosmetic and personal care products, according to the
Company's Form 10-Q filing with the U.S. Securities and Exchange
Commission.
The Company states, "Cyprus Amax Minerals Company (CAMC), an
indirect wholly owned subsidiary of FCX, and Cyprus Mines
Corporation (Cyprus Mines), a wholly owned subsidiary of CAMC, are
among the targets of such lawsuits. Cyprus Mines and subsidiaries
were engaged in talc mining and processing from 1964 until 1992
when Cyprus Mines exited its talc business. On February 13, 2019,
Imerys Talc America (Imerys), the current owner of the talc
business assets and liabilities previously owned by Cyprus Mines,
filed for Chapter 11 bankruptcy protection. On December 22, 2020,
Imerys filed an amended bankruptcy plan disclosing a global
settlement with Cyprus Mines and CAMC, which provides a framework
for a full and comprehensive resolution of all current and future
potential liabilities arising out of the Cyprus Mines talc
business, including claims against FCX, its affiliates, Cyprus
Mines, and CAMC. On January 21, 2021, in connection with the
proposed global settlement, Imerys sought an injunction temporarily
staying up to approximately 950 talc-related lawsuits against CAMC
and Cyprus Mines. On February 22, 2021, the bankruptcy court
granted the requested preliminary injunction, which is currently in
place until June 30, 2021. The global settlement is subject to,
among other things, bankruptcy court approvals of both the Imerys
bankruptcy plan and the Cyprus Mines bankruptcy plan, and there can
be no assurance that the global settlement will be successfully
implemented."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3g37nUm
ASBESTOS UPDATE: Harsco Faces 17,192 PI Claims at March 31
----------------------------------------------------------
Harsco Corporation had approximately 17,192 pending asbestos
personal injury actions filed against the Company at March 31,
2021, according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission.
The Company states, "Of those actions, approximately 16,602 were
filed in the New York Supreme Court (New York County),
approximately 119 were filed in other New York State Supreme Court
Counties and approximately 471 were filed in courts located in
other states.
"The Company believes that the claims against it are without merit.
The Company has never been a producer, manufacturer or processor of
asbestos fibers. Any asbestos-containing part of a Company product
used in the past was purchased from a supplier and the asbestos
encapsulated in other materials such that airborne exposure, if it
occurred, was not harmful and is not associated with the types of
injuries alleged in the pending actions.
"The complaints in most of those actions generally follow a form
that contains a standard damages demand of $20 million or $25
million, regardless of the individual plaintiff’s alleged medical
condition, and without identifying any specific Company product.
"At March 31, 2021 approximately 16,549 of the actions filed in New
York Supreme Court (New York County) were on the Deferred/Inactive
Docket created by the court in December 2002 for all pending and
future asbestos actions filed by persons who cannot demonstrate
that they have a malignant condition or discernible physical
impairment. The remaining approximately 53 cases in New York County
are pending on the Active or In Extremis Docket created for
plaintiffs who can demonstrate a malignant condition or physical
impairment.
"The Company has liability insurance coverage under various primary
and excess policies that the Company believes will be available, if
necessary, to substantially cover any liability that might
ultimately be incurred in the asbestos actions referred to above.
The costs and expenses of the asbestos actions are being paid by
the Company's insurers.
"In view of the persistence of asbestos litigation in the U.S., the
Company expects to continue to receive additional claims in the
future. The Company intends to continue its practice of vigorously
defending these claims and cases. At March 31, 2021 the Company has
obtained dismissal in approximately 28,324 cases by stipulation or
summary judgment prior to trial.
"It is not possible to predict the ultimate outcome of
asbestos-related actions in the U.S. due to the unpredictable
nature of this litigation, and no loss provision has been recorded
in the Company's condensed consolidated financial statements
because a loss contingency is not deemed probable or estimable.
Despite this uncertainty, and although results of operations and
cash flows for a given period could be adversely affected by
asbestos-related actions, the Company does not expect that any
costs that are reasonably possible to be incurred by the Company in
connection with asbestos litigation would have a material adverse
effect on the Company's financial condition, results of operations
or cash flows.
"The Company is subject to various other claims and legal
proceedings covering a wide range of matters that arose in the
ordinary course of business. In the opinion of management, all such
matters are adequately covered by insurance or by established
reserves, and, if not so covered, are without merit or are of such
kind, or involve such amounts, as would not have a material adverse
effect on the financial position, results of operations or cash
flows of the Company.
Insurance liabilities are recorded when it is probable that a
liability has been incurred for a particular event and the amount
of loss associated with the event can be reasonably estimated.
Insurance reserves have been estimated based primarily upon
actuarial calculations and reflect the undiscounted estimated
liabilities for ultimate losses, including claims incurred but not
reported. Inherent in these estimates are assumptions that are
based on the Company's history of claims and losses, a detailed
analysis of existing claims with respect to potential value, and
current legal and legislative trends. If actual claims differ from
those projected by management, changes (either increases or
decreases) to insurance reserves may be required and would be
recorded through income in the period the change was determined.
When a recognized liability is covered by third-party insurance,
the Company records an insurance claim receivable to reflect the
covered liability."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3c6CvBq
ASBESTOS UPDATE: Meritor Inc. Records $75MM in Future Claims
------------------------------------------------------------
Meritor, Inc. has recognized a liability for pending and future
claims over the next 38 years of $75 million as of March 31, 2021,
according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission.
The Company states, "The ultimate cost of resolving pending and
future claims is estimated based on the history of claims and
expenses for plaintiffs represented by law firms in jurisdictions
with an established history with Rockwell.
"The company engaged a third-party advisor with extensive
experience in assessing asbestos-related liabilities to conduct a
study to estimate its potential undiscounted liability for pending
and future asbestos-related claims as of September 30, 2020.
Management continuously monitors the underlying claims data and
experience for the purpose of assessing the appropriateness of the
assumptions used to estimate the liability.
"AM has insurance coverage that management believes covers
indemnity and defense costs, over and above self-insurance
retentions, for a significant portion of these claims. The company
recognizes insurance recoveries when the claim for recovery is
deemed probable and to the extent an insurable loss has been
recognized in the financial statements. The company’s
determination is based on analysis of the underlying insurance
policies, historical experience with insurers, ongoing review of
the solvency of insurers, and consideration of any insurance
settlements The insurance receivables for Rockwell asbestos-related
liabilities totaled $59 million and $62 million as of March 31,
2021 and September 30, 2020, respectively.
"The amounts recorded for the asbestos-related reserves and
recoveries from insurance companies are based upon assumptions and
estimates derived from currently known facts. All such estimates of
liabilities and recoveries for asbestos-related claims are subject
to considerable uncertainty because such liabilities and recoveries
are influenced by variables that are difficult to predict. The
future litigation environment for Rockwell could change
significantly from its past experience, due, for example, to
changes in the mix of claims filed against Rockwell in terms of
plaintiffs' law firm, jurisdiction and disease; legislative or
regulatory developments; the company's approach to defending
claims; or payments to plaintiffs from other defendants. Estimated
recoveries are influenced by coverage issues among insurers and the
continuing solvency of various insurance companies. If the
assumptions with respect to the estimation period, the nature of
pending claims, the cost to resolve claims and the amount of
available insurance prove to be incorrect, the actual amount of
liability for Rockwell asbestos-related claims, and the effect on
the company, could differ materially from current estimates and,
therefore, could have a material impact on the company's financial
condition and results of operations. However, the amount of
reasonably possible and estimable losses in excess of the recorded
asbestos-related liabilities was determined to be immaterial."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3i6fKkR
ASBESTOS UPDATE: ODP Corp.'s OfficeMax Faces Various PI Claims
--------------------------------------------------------------
The ODP Corporation's operating subsidiary, OfficeMax, is named as
a defendant in a number of lawsuits, claims, and proceedings
arising out of the operation of certain paper and forest products
assets prior to those assets being sold in 2004, for which
OfficeMax agreed to retain responsibility, according to the
Company's Form 10-Q filing with the U.S. Securities and Exchange
Commission.
The Company states, "Also, as part of that sale, OfficeMax agreed
to retain responsibility for all pending or threatened proceedings
and future proceedings alleging asbestos-related injuries arising
out of the operation of the paper and forest products assets prior
to the closing of the sale. The Company has made provision for
losses with respect to the pending proceedings. Additionally, as of
March 27, 2021, the Company has made provision for environmental
liabilities with respect to certain sites where hazardous
substances or other contaminants are or may be located. For these
liabilities, the Company's estimated range of reasonably possible
losses was approximately $15 million to $25 million. The Company
regularly monitors its estimated exposure to these liabilities. As
additional information becomes known, these estimates may change,
however, the Company does not believe any of these OfficeMax
retained proceedings are material to the Company's financial
position, results of operations or cash flows."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3z4Q2Do
ASBESTOS UPDATE: Park-Ohio Holdings Still Defends 121 Cases
-----------------------------------------------------------
Park-Ohio Holdings Corp. is a co-defendant in approximately 121
cases asserting claims on behalf of approximately 222 plaintiffs
alleging personal injury as a result of exposure to asbestos,
according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission.
The Company states, "These asbestos cases generally relate to
production and sale of asbestos-containing products and allege
various theories of liability, including negligence, gross
negligence and strict liability, and seek compensatory and, in some
cases, punitive damages.
"In every asbestos case in which we are named as a party, the
complaints are filed against multiple named defendants. In
substantially all of the asbestos cases, the plaintiffs either
claim damages in excess of a specified amount, typically a minimum
amount sufficient to establish jurisdiction of the court in which
the case was filed (jurisdictional minimums generally range from
$25,000 to $75,000), or do not specify the monetary damages sought.
To the extent that any specific amount of damages is sought, the
amount applies to claims against all named defendants.
"There are four asbestos cases, involving 20 plaintiffs, that plead
specified damages against named defendants. In each of the four
cases, the plaintiff is seeking compensatory and punitive damages
based on a variety of potentially alternative causes of action. In
two cases, the plaintiff has alleged three counts at $3.0 million
compensatory and punitive damages each; one count at $3.0 million
compensatory and $1.0 million punitive damages; one count at $1.0
million. In the third case, the plaintiff has alleged compensatory
and punitive damages, each in the amount of $20.0 million, for
three separate causes of action, and $5.0 million compensatory
damages for the fifth cause of action. In the fourth case, the
plaintiff has alleged compensatory and punitive damages, each in
the amount of $10.0 million, for ten separate causes of action.
"Historically, we have been dismissed from asbestos cases on the
basis that the plaintiff incorrectly sued one of our subsidiaries
or because the plaintiff failed to identify any asbestos-containing
product manufactured or sold by us or our subsidiaries. We intend
to vigorously defend these asbestos cases, and believe we will
continue to be successful in being dismissed from such cases.
However, it is not possible to predict the ultimate outcome of
asbestos-related lawsuits, claims and proceedings due to the
unpredictable nature of personal injury litigation. Despite this
uncertainty, and although our results of operations and cash flows
for a particular period could be adversely affected by
asbestos-related lawsuits, claims and proceedings, management
believes that the ultimate resolution of these matters will not
have a material adverse effect on our financial condition,
liquidity or results of operations. Among the factors management
considered in reaching this conclusion were: (a) our historical
success in being dismissed from these types of lawsuits on the
bases mentioned above; (b) many cases have been improperly filed
against one of our subsidiaries; (c) in many cases the plaintiffs
have been unable to establish any causal relationship to us or our
products or premises; (d) in many cases, the plaintiffs have been
unable to demonstrate that they have suffered any identifiable
injury or compensable loss at all or that any injuries that they
have incurred did in fact result from alleged exposure to asbestos;
and (e) the complaints assert claims against multiple defendants
and, in most cases, the damages alleged are not attributed to
individual defendants. Additionally, we do not believe that the
amounts claimed in any of the asbestos cases are meaningful
indicators of our potential exposure because the amounts claimed
typically bear no relation to the extent of the plaintiff's injury,
if any.
"Our cost of defending these lawsuits has not been material to date
and, based upon available information, our management does not
expect its future costs for asbestos-related lawsuits to have a
material adverse effect on our results of operations, liquidity or
financial position."
"A full-text copy of the Form 10-Q is available at
https://bit.ly/34AnN1p
ASBESTOS UPDATE: Roper Tech. Still Defends Asbestos Claims
----------------------------------------------------------
Roper Technologies, Inc. or its subsidiaries have been named
defendants along with numerous industrial companies in
asbestos-related litigation claims in certain U.S. states,
according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission.
The Company states, "No significant resources have been required by
Roper to respond to these cases and Roper believes it has valid
defenses to such claims and, if required, intends to defend them
vigorously. Given the state of these claims, it is not possible to
determine the potential liability, if any."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3vTPLAU
ASBESTOS UPDATE: Sempra Energy's Subsidiaries Defends PI Lawsuits
-----------------------------------------------------------------
Sempra Energy's certain indirect subsidiaries, which were acquired
as part of the EFH merger, are defendants in personal injury
lawsuits brought in state courts throughout the U.S., according to
the Company's Form 10-Q filing with the U.S. Securities and
Exchange Commission.
The Company states, "As of April 30, 2021, four such lawsuits are
pending, all of which have been served. These cases allege illness
or death as a result of exposure to asbestos in power plants
designed and/or built by companies whose assets were purchased by
predecessor entities to the EFH subsidiaries, and generally assert
claims for product defects, negligence, strict liability and
wrongful death. They seek compensatory and punitive damages.
Additionally, in connection with the EFH bankruptcy proceeding,
approximately 28,000 proofs of claim were filed on behalf of
persons who allege exposure to asbestos under similar circumstances
and assert the right to file such lawsuits in the future. None of
these claims or lawsuits were discharged in the EFH bankruptcy
proceeding. The costs to defend or resolve these lawsuits and the
amount of damages that may be imposed or incurred could have a
material adverse effect on Sempra Energy's cash flows, financial
condition and results of operations."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3fGveu1
ASBESTOS UPDATE: Trane Technologies' Subsidiaries Faces PI Suits
----------------------------------------------------------------
Trane Technologies plc's certain wholly-owned subsidiaries and
former companies were named as defendants in asbestos-related
lawsuits in state and federal courts, according to the Company's
Form 10-Q filing with the U.S. Securities and Exchange Commission.
The Company states, "In virtually all of the suits, a large number
of other companies have also been named as defendants. The vast
majority of those claims were filed against predecessors of Aldrich
and Murray and generally allege injury caused by exposure to
asbestos contained in certain historical products sold by
predecessors of Aldrich or Murray, primarily pumps, boilers and
railroad brake shoes. None of the Company's existing or
previously-owned businesses were a producer or manufacturer of
asbestos.
"On June 18, 2020, Aldrich and Murray each filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code to
resolve equitably and permanently all current and future asbestos
related claims in a manner beneficial to claimants, Aldrich and
Murray. As a result of the Chapter 11 filings, all asbestos-related
lawsuits against Aldrich and Murray have been stayed due to the
imposition of a statutory automatic stay applicable in Chapter 11
bankruptcy cases. In addition, at the request of Aldrich and
Murray, the Bankruptcy Court has entered an order temporarily
staying all asbestos-related claims against the Trane Companies
that relate to claims against Aldrich or Murray (except for
asbestos-related claims for which the exclusive remedy is provided
under workers' compensation statutes or similar laws).
"The goal of these Chapter 11 filings is an efficient and permanent
resolution of all current and future asbestos claims through court
approval of a plan of reorganization, which would establish, in
accordance with section 524(g) of the Bankruptcy Code, a trust to
which all asbestos claims would be channeled for resolution.
Aldrich and Murray intend to seek an agreement with representatives
of the asbestos claimants on the terms of a plan for the
establishment of such a trust.
"Prior to the Petition Date, predecessors of each of Aldrich and
Murray had been litigating asbestos-related claims brought against
them. No such claims have been paid since the Petition Date, and it
is not contemplated that any such claims will be paid until the end
of the Chapter 11 cases. At this point in the Chapter 11 cases of
Aldrich and Murray, it is not possible to predict whether or how
long the Bankruptcy Court order temporarily staying
asbestos-related claims against the Trane Companies will be
extended, whether or when any agreement with representatives of the
asbestos claimants on the terms of a plan for the establishment of
a trust will be reached, what the terms of any plan of
reorganization or the extent of the asbestos liability will be or
how long the Chapter 11 cases will last.
"From an accounting perspective, the Company no longer had control
over Aldrich and Murray as of the Petition Date as their activities
are subject to review and oversight by the Bankruptcy Court.
Therefore, Aldrich and its wholly-owned subsidiary 200 Park and
Murray and its wholly-owned subsidiary ClimateLabs were
deconsolidated as of the Petition Date and their respective assets
and liabilities were derecognized from the Company's Condensed
Consolidated Financial Statements. Amounts derecognized primarily
related to the legacy asbestos-related liabilities and
asbestos-related insurance recoveries and $41.7 million of cash.
However, in connection with the 2020 Corporate Restructuring,
certain subsidiaries of the Company entered into funding agreements
with Aldrich and Murray (collectively the Funding Agreements),
pursuant to which those subsidiaries are obligated, among other
things, to pay the costs and expenses of Aldrich and Murray during
the pendency of the Chapter 11 cases to the extent distributions
from their respective subsidiaries are insufficient to do so and to
provide an amount for the funding for a trust established pursuant
to section 524(g) of the Bankruptcy Code, to the extent that the
other assets of Aldrich and Murray are insufficient to provide the
requisite trust funding."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3i6vgwT
ASBESTOS UPDATE: Transocean's Subsidiary Defends 256 PI Lawsuits
----------------------------------------------------------------
Transocean Ltd.'s subsidiary, as of March 31, 2021, is a defendant
in approximately 256 lawsuits with a corresponding number of
plaintiffs, according to the Company's Form 10-Q filing with the
U.S. Securities and Exchange Commission.
The Company states, "One of our subsidiaries has been named as a
defendant, along with numerous other companies, in lawsuits arising
out of the subsidiary's manufacture and sale of heat exchangers,
and involvement in the construction and refurbishment of major
industrial complexes alleging bodily injury or personal injury as a
result of exposure to asbestos. For many of these lawsuits, we
have not been provided sufficient information from the plaintiffs
to determine whether all or some of the plaintiffs have claims
against the subsidiary, the basis of any such claims, or the nature
of their alleged injuries. The operating assets of the subsidiary
were sold in 1989. In September 2018, the subsidiary and certain
insurers agreed to a settlement of outstanding disputes that
provided the subsidiary with cash and an annuity. Together with a
coverage-in-place agreement with certain insurers and additional
coverage issued by other insurers, we believe the subsidiary has
sufficient resources to respond to both the current lawsuits as
well as future lawsuits of a similar nature.
"As of March 31, 2021, nine plaintiffs have claims pending in
Louisiana and 14 plaintiffs have claims pending in Illinois and
Missouri, in which we have or may have an interest. We intend to
defend these lawsuits vigorously, although we can provide no
assurance as to the outcome. We historically have maintained broad
liability insurance, although we are not certain whether insurance
will cover the liabilities, if any, arising out of these claims.
Based on our evaluation of the exposure to date, we do not expect
the liability, if any, resulting from these claims to have a
material adverse effect on our condensed consolidated statement of
financial position, results of operations or cash flows."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3c9Ioh4
ASBESTOS UPDATE: Xylem Inc. May Still Face Exposure Claims
----------------------------------------------------------
Xylem Inc., from time to time, may be asserted by claims alleging
injury caused by any of its products resulting from asbestos
exposure, according to the Company's Form 10-Q filing with the U.S.
Securities and Exchange Commission.
The Company states, "We believe there are numerous legal defenses
available for such claims and would defend ourselves vigorously.
Pursuant to the Distribution Agreement among ITT Corporation (now
ITT LLC), Exelis (acquired by Harris Corporation, now L3Harris
Technologies, Inc.) and Xylem, ITT Corporation (now ITT LLC) has an
obligation to indemnify, defend and hold Xylem harmless for
asbestos product liability matters, including settlements,
judgments, and legal defense costs associated with all pending and
future claims that may arise from past sales of ITT's legacy
products. We believe ITT Corporation (now ITT LLC) remains a
substantial entity with sufficient financial resources to honor its
obligations to us.
"Although the ultimate outcome of any legal matter cannot be
predicted with certainty, based on present information, including
our assessment of the merits of the particular claims, we do not
believe it is reasonably possible that any asserted or unasserted
legal claims or proceedings, individually or in aggregate, will
have a material adverse effect on our results of operations, or
financial condition. We have estimated and accrued $5 million and
$6 million as of March 31, 2021 and December 31, 2020,
respectively, for these general legal matters.
Indemnifications
"As part of our 2011 spin-off from our former parent, ITT
Corporation (now ITT LLC), Exelis Inc. (acquired by Harris
Corporation, now L3Harris Technologies, Inc.) and Xylem will
indemnify, defend and hold harmless each of the other parties with
respect to such parties' assumed or retained liabilities under the
Distribution Agreement and breaches of the Distribution Agreement
or related spin agreements. ITT LLC's indemnification obligations
include asserted and unasserted asbestos and silica liability
claims that relate to the presence or alleged presence of asbestos
or silica in products manufactured, repaired or sold prior to
October 31, 2011, the Distribution Date, subject to limited
exceptions with respect to certain employee claims, or in the
structure or material of any building or facility, subject to
exceptions with respect to employee claims relating to Xylem
buildings or facilities. The indemnification associated with
pending and future asbestos claims does not expire. Xylem has not
recorded a liability for material matters for which we expect to be
indemnified by the former parent or Exelis Inc. through the
Distribution Agreement and we are not aware of any claims or other
circumstances that would give rise to material payments from us
under such indemnifications."
A full-text copy of the Form 10-Q is available at
https://bit.ly/3i3KNxE
BESTWALL LLC: Subpoenas Served on 9 Asbestos Trusts Quashed
-----------------------------------------------------------
Delaware District Judge Colm F. Connolly granted the request of
nine asbestos settlement trusts to quash subpoenas, which have been
served upon them and the Delaware Claims Processing Facility, by
Bestwall LLC, seeking production of electronically stored claimant
information.
Judge Connolly acknowledged that Bestwell has demonstrated a
legitimate purpose in requesting the Claimant data to aid in plan
formulation and estimation proceedings, and the protections set in
place by the Bankruptcy Court for the Western District of North
Carolina, where Bestwall's Chapter 11 case is pending, will go a
long way toward protecting Trust Claimants' sensitive data.
However, Judge Connolly continued, Bestwell has not sought relief
from the bankruptcy court that issued the orders establishing and
governing the Settlement Trusts. It appears that additional
safeguards must be included in order to comply with previous
protections granted by the Delaware Bankruptcy Court in those
cases, including, but not limited to, appointment of an independent
facilitator to oversee production, he said.
The Motion to Quash is granted without prejudice to Bestwell's
right to seek reissuance of the subpoenas seeking a narrower
document production that is consistent with the protections
afforded by the Bankruptcy Court, Judge Connolly ruled.
Judge Connolly also denied Bestwall's Motion to Transfer
Proceedings and Supplemental Motion to Transfer Proceedings, which
together seek orders transferring all of the Motions to Quash to
the North Carolina Bankruptcy Court.
A copy of the District Court's June 1, 2021 Memorandum is available
at https://bit.ly/3ieerjV from Leagle.com.
The Trusts are:
* Armstrong World Industries, Inc. Asbestos Personal Injury
Settlement Trust;
* Celotex Asbestos Settlement Trust;
* Flintkote Asbestos Trust;
* Pittsburgh Corning Corporation Personal Injury Settlement
Trust;
* WRG Asbestos PI Trust;
* Federal-Mogul Asbestos Personal Injury Trust;
* Babcock & Wilcox Company Asbestos PI Trust;
* United States Gypsum Asbestos Personal Injury Settlement
Trust; and
* Owens Corning/Fibreboard Asbestos Personal Injury Trust.
Beth Moskow-Schnoll -- moskowb@ballardspahr.com -- at Ballard Spahr
LLP in Wilmington, Del., serves as counsel to the Trusts.
About Bestwall LLC
Bestwall LLC -- http://www.Bestwall.com/-- was created in an
internal corporate restructuring and now holds asbestos
liabilities. Bestwall's asbestos liabilities relate primarily to
joint systems products manufactured by Bestwall Gypsum Company, a
company acquired by Georgia-Pacific in 1965. The former Bestwall
Gypsum entity manufactured joint compounds containing small amounts
of chrysotile asbestos. The manufacture of these
asbestos-containing products ceased in 1977.
Bestwall's non-debtor subsidiary, GP Industrial Plasters LLC
develops, manufactures, sells and distributes gypsum plaster
products.
Bestwall sought Chapter 11 protection (Bankr. W.D.N.C. Case No.
17-31795) on Nov. 2, 2017, in an effort to equitably and
permanently resolve all its current and future asbestos claims. The
Debtor estimated assets and debt of $500 million to $1 billion. It
has no funded indebtedness.
The Hon. Laura T. Beyer is the case judge.
The Debtor tapped Jones Day as general bankruptcy counsel, Robinson
Bradshaw & Hinson P.A. as local counsel, Schachter Harris LLP as
special litigation counsel for medicine science issues, King &
Spalding as special counsel for asbestos matters, and Bates White
LLC as asbestos consultant. Donlin Recano LLC is the claims and
noticing agent.
On Nov. 8, 2017, the U.S. bankruptcy administrator appointed an
official committee of asbestos claimants in the Debtor's case. The
committee retained Montgomery McCracken Walker & Rhoads LLP as its
legal counsel, Hamilton Stephens Steele + Martin, PLLC and JD
Thompson Law as local counsel, and FTI Consulting, Inc., as
financial advisor.
On Feb. 22, 2018, the court approved the appointment of Sander L.
Esserman as the future claimants' representative in the Debtor's
case. Mr. Esserman tapped Young Conaway Stargatt & Taylor, LLP as
his legal counsel and Alexander Ricks PLLC as his North Carolina
counsel.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Fernandez, Joy A. Agravante, Psyche A. Castillon, Julie Anne L.
Toledo, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN 1525-2272.
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