/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/060711.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 11, 2006, Vol. 8, No. 136 Headlines AMERICAN INTERCONTINENTAL: Continues to Face Wage Suit in Ill. CALIFORNIA: Appeals Court Dismisses Some Claims in SVP Lawsuit CANADA: Court Allows Lesbian Mothers to Become Legal Co-Parents CANADA: Dismissal of Suit Over Youbou Sawmill Closure Appealed CMS ENERGY: Mich. Court Approves $28M ERISA Suit Settlement DISTRICT OF COLUMBIA: Taxpayers Seek $40B IRS Phone Tax Refund DITECH COMMUNICATIONS: Seeks Dismissal of Calif. Securities Suit FELT BICYCLES: Recalls Mountain Bicycles with Defective Brakes FLORIDA: Court Says Hollywood Car Seizures Don't Clash With Law HOMEOWNERS FOR JUSTICE: Former Lawyer Ordered to Return $265T HYUNDAI MOTOR: Recalls 2006 Sonata with Missing Air Bag Labels ILLINOIS: Bill Proposes Penalty for Overtime Pay Violations KENTUCKY: Lexington Continues to Pay Cost of Micro-City Lawsuit LA ESPERANZA: Labor Lawsuit in Santa Cruz County Remains Pending LEXAR MEDIA: Computer Storage Devices Recalled for Burn Hazard MORGAN STANLEY: Faces Gender Discrimination Lawsuit in Calif. MORGAN STANLEY: Securities Brokers File Wage, Hour Suit in Conn. NEW MEXICO: Santa Fe Jail Strip-Search Suit Settled for $5.5M NORTH DAKOTA: Appeal on Suit Over Joint Custody in Divorce Nixed PALACE BACKPACKER: Faces Lawsuit Over Hostel Fire Deaths in 2000 PUBLIX SUPER: Recalls Cookie Dough with Undeclared Tree Nuts ROYAL OASIS: Sued Over Alleged Illegal Random Faxing in Ohio SMALL WORLD: Recalls Baby Toy Vehicles Posing Choking Hazard TASER INT'L: N.D. Calif. Court Shelves Product Liability Lawsuit TENET HEALTHCARE: Hilton Medical Patients to Get Reimbursement TENNESSEE: Motorists Sue Oakland Over Fines, Allege Extortion TOBACCO LITIGATION: Fitch Ratings Welcomes Ruling in "Engle" TOBACCO LITIGATION: American Legacy Criticizes Engle Decision UNITED STATES: Products Liability Suits Decline, Research Says New Securities Fraud Cases HOME SOLUTIONS: Glancy Binkow Files Tex. Securities Fraud Suit ********* AMERICAN INTERCONTINENTAL: Continues to Face Wage Suit in Ill. -------------------------------------------------------------- American Intercontinental University Online remains a defendant in a federal class action in the U.S. District Court for the Northern District of Illinois over alleged overtime pay abuses. Paul Vander Vennet filed the suit on Aug. 24, 2005 under the caption, "Vennet et al v. American Intercontinental University Online et al." Plaintiff alleges overtime violations pursuant to Section 6(b) of the Fair Labor Standards Act of 1928, the Illinois Minimum Wage Law, and the Illinois Wage Payment and Collection Act. The suit seeks to recover unpaid regular and overtime compensation, liquidated damages, attorney' fees costs and other relief for defendants violations of the state and federal labor statutes. The company is a subsidiary of Career Education Corp. In a written statement, Stuart Chanen, an attorney for the online education company, denied the lawsuit's claims. Mr. Chanen also wrote that the company has paid overtime to hundreds of workers, including those who did not meet their recruitment quotas. Furthermore, the company conducted its own investigation into the allegations after the lawsuit was filed and "found them to be without merit," Mr. Chanen wrote. The complaint is available free of charge at: http://researcharchives.com/t/s?d77. The suit is "Vennet et al v. American Intercontinental University Online et al., Case No. 1:05-cv-04889," filed in the U.S. District Court for the Northern District of Illinois under Judge William T. Hart with referral to Judge Michael T. Mason. Representing the plaintiff is Robin B. Potter of Robin Potter & Associates, P.C., 111 East Wacker Drive, Suite 2600, Chicago, IL 60601, Phone: (312) 861-1800, E-mail: robinpotter@igc.org. Representing the company is James M. Gecker of Katten Muchin Rosenman, LLP, 525 West Monroe Street, Suite 1600, Chicago, IL 60661, Phone: (312) 902-5200, E-mail: james.gecker@kattenlaw.com. CALIFORNIA: Appeals Court Dismisses Some Claims in SVP Lawsuit -------------------------------------------------------------- The U.S. Circuit Court of Appeals for the Ninth Circuit upheld, in part, an order by Judge Terry Hatter of the U.S. District Court for the Central District of California denying a motion to dismiss a putative class action brought on behalf of 600 persons who were committed or were awaiting commitment to Atascadero State Hospital, The Metropolitan News-Enterprise reports. In its ruling, the appellate court stated that California officials do not have qualified immunity from claims of various constitutional violations brought by plaintiffs who have been civilly committed pursuant to the state's Sexually Violent Predators Act. Judge Harry Pregerson wrote on behalf of the appellate panel. Defendants in the class action were the hospital's executive director, the directors of the California departments of Mental Health and Corrections and a plethora of state officials, including Gov. Arnold Schwarzenegger. Plaintiffs, who are seeking declaratory and injunctive relief, as well as monetary damages, alleged that they were forced to live in squalid conditions that were inhumane and posed a serious health risk, were deprived of privacy when showering, sleeping, using the toilets or participating in therapy sessions, and were force-medicated in non-emergency situations. In addition, plaintiffs alleged that they were subjected to unreasonable searches, were not allowed to speak to their attorneys in private, and were punished in retaliation for filing grievances. Since the law governing civil commitment of sexual predators is still evolving, defendants argued that they were entitled to qualified immunity. Due to continuing evolution of the law, defendants also argued that they could not have violated clearly established constitutional rights. On that account, the appellate panel agreed in part, thus it reversed Judge Hatter's ruling that defendants were not entitled to dismissal of plaintiffs' ex post facto and double jeopardy claims, as well as claims based on the Eighth Amendment. Furthermore, the panel also found that the defendants have qualified immunity from plaintiffs' claims that they were forced into participating in treatment in violation of their First Amendment right of free speech, since the law on this point is not clearly established. However, on all other claims, the panel agreed with Judge Hatter. Persons convicted of a sexually violent offense against two or more victims for which they receive a determinate sentence and those who have diagnosed mental disorder that make them dangerous to the health and safety of others are subjected to evaluations of the departments of Corrections and Mental Health six month before their sentence is complete. If the two departments agree that a person might be a sexually violent predator, the county counsel or district attorney may file a petition for commitment. If a jury finds that the person is a predator who poses a danger to the health and safety of others, he is civilly committed for an indefinite period to commence after his criminal sentence. Persons who have been committed undergo a five-phase treatment program. The appellate court decision is available free of charge at: http://researcharchives.com/t/s?d6c. The suit is "James A. Hydrick, et al. v. Peter Wilson, et al., Case No. 2:98-cv-07167-TJH-RNB," on appeal from the U.S. District Court for the Central District of California under Judge Terry J. Hatter, Jr. with referral to Judge Robert N. Block. Representing the plaintiffs are Wayne S. Flick and Matthew B. Hayes of Latham & Watkins, 633 W 5th St, Ste 4000, Los Angeles, CA 90071-2007, Phone: 213-485-1234. Representing the defendants are Karen Ackerson-Brazille and Eric D. Bates of CAAG Office of Attorney General of California, 300 S Spring St, Suite 1700, Los Angeles, CA 90013-1230, Phone: 213- 897-2000, Fax: 213-897-2805. CANADA: Court Allows Lesbian Mothers to Become Legal Co-Parents --------------------------------------------------------------- A Canadian Superior Court ruled that the Vital Statistics Act discriminates against lesbian mothers in preventing them from being registered as co-parents on their children's birth records, according to The Hamilton Spectator. Justice Paul Rivard of the Superior Court of Justice has given the Ontario provincial government a year to change the VSA, so that lesbian partners will be legally registered as parents on birth records, the report said. The suit stemmed from a class action brought by three lesbian couples, including Dundas couple Melanie Parish and Dr. Mel Rutherford. Using Dr. Rutherford's ova and donated sperm, Parish carried and gave birth to twin sons. CANADA: Dismissal of Suit Over Youbou Sawmill Closure Appealed -------------------------------------------------------------- The Youbou Timberless Society has filed an appeal on the dismissal of its class action over the closure of the Youbou sawmill in 2001, according to Peace, Earth & Justice News In June, Supreme Court Justice R.D. Wilson dismissed the suit, saying it was too similar to an Industrial, Wood and Allied Workers of Canada lawsuit launched in 2001 against the British Columbia government. The union, now United Steelworkers, filed the suit in 2003. It later voted to dismiss the case based on its legal counsel. In the same year, Society board member Ken James carried the suit forward on behalf of 200 displaced workers after TimberWest closed the Youbou sawmill. The society needs to raise between $15,000 and $20,000 to cover lawyer expenses, according to The Pictorial (Class Action Reporter, July 5, 2006). The suit stems from the government's removal in 1997 of the clause that tied Tree Farm License 46 to the Youbou sawmill, allowing TimberWest Forest Corp. to continue harvesting the timber while shutting down the mill. The suit is "James v. Crown." Mr. James' lawyer is Joseph Arvay of Arvay Finlay -- http://www.arvayfinlay.com/-- Victoria, British Columbia (Vancouver Island Co.). CMS ENERGY: Mich. Court Approves $28M ERISA Suit Settlement ----------------------------------------------------------- The Honorable George Caram Steeh of the U.S. District Court for the Eastern District of Michigan entered an Order and Final Judgment on June 27 approving an agreement to settle two consolidated lawsuits filed in 2002 as putative class actions on behalf of participants and beneficiaries of CMS Energy's Employees' Savings Plan who participated in the Plan between Aug. 3, 2000 and Dec. 27, 2004. CMS Energy, Consumers, CMS Marketing, Services and Trading Company, nka now known as CMS Energy Resource Management Company, and certain officers and directors were defendants in the lawsuits. On Mar. 1, 2006, the company and consumers reached an agreement, subject to court and independent fiduciary approval, to settle the lawsuits. The court issued an order on Mar. 23, 2006, granting preliminary approval of the settlement (Class Action Reporter, May 25, 2006). The settlement agreement requires a $28 million cash payment by CMS Energy's primary insurer that will be used to pay plan participants and beneficiaries for alleged losses, as well as any legal fees and expenses. In addition, the company agreed to certain other steps regarding administration of the plan. A full-text copy of Judge Steeh's order is available for free at: http://researcharchives.com/t/s?d32 Headquartered in Jackson, Michigan, Consumers Energy Company -- http://www.consumersenergy.com/-- the primary subsidiary of CMS Energy, is a combination electric and natural gas utility that serves more than 3.3 million customers in Michigan's Lower Peninsula. One of the suits is "Schilling v. CMS Energy Corp., et al., 2:02-cv-72834-GCS," filed in the U.S. District Court for the Eastern District of Michigan under Judge George Caram Steeh. Representing the plaintiffs are: (1) Barry D. Adler of Adler and Assoc. (Farmington Hills), 30300 Northwestern Highway, Suite 304, Farmington Hills, MI 48334, Phone: 248-855-5090, E-mail: badler@adlerfirm.com; and (2) Ellen M. Doyle of Malakoff, Doyle, 437 Grant St., Suite 200, Pittsburgh, PA 15219, Phone: 412-281-8400, E-mail: edoyle@mdfpc.com. Representing the defendants are: (i) Wilber H. Boies of McDermott, Will, (Chicago), 227 W. Monroe Street, Suite 4400, Chicago, IL 60606-5096, Phone: 312-372-2000, E-mail: bboies@mwe.com; and (ii) James E. Brunner of Consumers Power Company, Legal Department, 212 W. Michigan Avenue, Jackson, MI 49201, Phone: 517-788-0550, Fax: 517-788-0550. DISTRICT OF COLUMBIA: Taxpayers Seek $40B IRS Phone Tax Refund -------------------------------------------------------------- Taxpayers filed an amended complaint in the U.S. District Court for the District of Columbia asserting the Internal Revenue Service devised rules that will effectively deny refunds to and shortchange American taxpayers entitled to refunds by billions of dollars. The IRS allegedly devised these rules without public input. The tax refund and credit rules released May 25 will harm the interests of all consumers of phone services and leave millions with nothing, the lawsuit states. The amended class action, "Sloan, et al. v. United States of America, acting by and through the Internal Revenue Service," was originally filed on March 15, 2006 to end the illegal three percent federal excise tax upon long distance phone calls. It sought the return of all money unlawfully exacted through the excise "tax" upon certain long distance and wireless telephone charges added to consumers' monthly bills for more than eight years. Two months after the case was filed -- with motions for preliminary injunction and class certification pending and in the face of five U.S. District Courts of Appeal declaring the excise tax to be illegal -- the government announced it would stop collecting the tax and refund the money to taxpayers. Now, the Sloan plaintiffs, including individual and small business taxpayers, call for an accounting and fair, efficient and accurate restitution, with interest, to all taxpayers of the tens of billions of dollars unlawfully exacted before the government acknowledged that the tax was illegal. "Unfortunately, after years of illegally 'nickel and diming' Americans on their phone bills, the IRS would now shortchange everyone and arbitrarily impose huge burdens on small businesses and many low income individuals especially senior citizens," explained Jonathan Cuneo of Cuneo Gilbert & LaDuca, LLP of Washington, DC, a co-lead attorney for the plaintiffs. "Behind closed doors, the IRS by fiat made demographic choices in designing the tax refund rules that will effectively deny the less affluent the ability to recover their own money." The IRS rules governing the excise tax refund or credit published May 25 as Notice 2006-50 were devised without the public review or input required by the Federal Administrative Procedure Act, the lawsuit said. The IRS would allow for a refund/credit of taxes paid during only three of the eight years the tax was illegally exacted. And, by requiring all taxpayers to file income tax forms to receive the refund/credit they are entitled to, the rules allegedly effectively exclude millions of non-filers such as senior citizens and other low income consumers of phone services whose level of earnings fall below the minimum filing requirement. Finally, unlike individual taxpayers who may opt to accept a flat "safe harbor" refund/credit dollar amount (yet to be determined by the IRS), small businesses are reportedly required to compile years of monthly phone bills and calculate the actual amount of taxes they illegally paid before receiving anything. "For no stated reason and with no legal authority to do so, the IRS unilaterally acted to sharply cut the payback of taxpayers' own money," Mr. Cuneo continued. "It is simply unfair to exclude millions of non-filers from the payback and force small 'mom and pop' businesses to expend hours and hours collecting and analyzing over years of records in order to receive their own money." According to AARP, at least 37 percent of those aged 65 or older, or 13 million Americans, did not file income tax returns in 1998 because they did not earn enough money to be required to do so. But, most of those seniors and millions of other Americans with low incomes had telephones and paid the illegal excise tax on their monthly bills during that year and in each successive year. The class's attorneys contend most of those taxpayers will not benefit from the refund rules as now constructed because they do not file income tax returns. The federal appeals courts in the Second, Third, Sixth, Eleventh and District of Columbia circuits have ruled in lawsuits brought by major corporations that the communications excise tax was never authorized by Congress as required by the Constitution. The Congressional Research Service, which in an April 24 report described the tax as "regressive" because it did not "treat similarly situated taxpayers equally" and "reduces overall economic welfare," estimates the tax exacted a total of about $6 billion each year from virtually all Americans with long- distance telephone service. "Using the CRS annual estimate, between $30 and $40 billion was collected unlawfully by the government since 1998," according to Nicholas Chimicles of Chimicles & Tikellis LLP of Haverford, PA, another co-lead counsel for the plaintiffs. "A long series of Supreme Court decisions demonstrate taxpayers are entitled to the 'clear and certain' remedy of full restitution of taxes, plus interest, collected in violation of federal law." The three percent federal excise tax is levied upon toll charges for long distance service as defined in 1965 and should have been applied only where the charge for a toll call varied on the basis of both the distance and elapsed time of each individual call. But, most long-distance carriers now charge a flat per minute rate for calls to anywhere in the nation. AT&T, for instance, had abandoned distance and time formulas by 1997 and MCI followed in 2000. "As technology changed and more telephone services were billed at flat rates, the government never went back to Congress to seek a three percent excise tax on long distance service based on elapsed time only," explained Robert Cynkar of Egan, Fitzpatrick, Malsch & Cynkar, PLLC, a Deputy Assistant Attorney General of the U.S. during the Reagan Administration and another attorney representing the plaintiffs. "Instead, in a clear violation of the Constitution, the government simply imposed the tax, which was small and went unnoticed by most individuals. Now, by promulgating unfair refund rules without public input, the government has arrogantly violated federal law yet again. Conservatives should be out-raged." Among the corporations that had earlier won federal appeals court decisions finding the tax illegal and that won tax refunds are AOL, Hewlett Packard, OfficeMax and Honeywell. "These companies that challenged the tax -- and won -- performed a valuable service," said Hank Levine of Levine, Blaszak, Block & Boothby, LLP, one of the Sloan class action plaintiffs' lawyers and lead counsel in most excise taxpayer court victories to date. "But, even as companies were winning relief from this unauthorized tax, it is only through a class action like ours that smaller taxpayers can gain relief from being systematically fleeced by this illegal tax. And, ours is the first case to point out the fatal flaws in the Government's new refund rules." For a copy of the complaint and other documents, contact Jonathan Cuneo at 202-789-3960, Nicholas Chimicles at 610-642- 8500, or Jeff McCord at 540- 364-4769. The suit is "Sloan et al. v. United States of America, Case No. 1:06-cv-00483-RMU," filed in the U.S. District Court for the District of Columbia under Judge Ricardo M. Urbina. Representing the plaintiffs are: (1) Steven N. Berk and Jonathan Watson Cuneo both of Cuneo Gilbert & Laduca, 507 C Street, NE, Washington, DC 20002, Phone: (202) 789-3960, Fax: (202) 789-1813, E- mail: stevenb@cuneolaw.com and jonc@cuneolaw.com; (2) Nicholas E. Chimicles and Benjamin F. Johns both of Chimicles & Tikellis, LLP, 361 West Lancaster Avenue, Haverford, PA 19041, Phone: (610) 6422-8500, Fax: (610) 649-3633, E-mail: nick@chimicles.com or benjohns@chimicles.com; (3) Robert J. Cynkar of Egan Fitzpatrick Malsch & CynKar, PPLC, 8300 Boone Boulevard, Suite 340, Vienna, VA 22182, Phone: (703) 891-4066, Fax: 703-891-4055, E- mail: rcynkar@nuclearlawyer.com; (4) Charles J. LaDuca of Cuneo Waldman & Gilbert, LLP, 317 Massachusetts AVenue, NE, Suite 300, Washington, DC 20002, Phone: (202) 789-3960, E-mail: charlesl@cuneolaw.com; (5) Kevin T. Peters of Tony & Weld, 28 State Street, Boston, MA 02109, Phone: (617) 720-2626; and (6) Christopher Weld, Jr. of Todd & Weld, LLP, 28 State Street, Boston, MA 02110, Phone: (617) 720-2626. Representing the defendant is Ivan C. Dale of The U.S. Department of Justice, Trial Attorneys, Tax Division, Post Office Box 227, Washington, DC 20044, Phone: (202) 307- 6615, Fax: (202) 514-6866, E-mail: Ivan.c.dale@usdoj.gov. DITECH COMMUNICATIONS: Seeks Dismissal of Calif. Securities Suit ---------------------------------------------------------------- Ditech Communications Corp. filed a motion to dismiss the consolidated securities fraud class action pending against it in the U.S. District Court for the Northern District of California. Beginning on June 14, 2005, several purported class actions were filed purportedly on behalf of a class of investors who purchased the company's stock between Aug. 25, 2004 and May 26, 2005. The complaints allege claims under Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 against Ditech and its chief executive officer and chief financial officer in connection with alleged misrepresentations concerning Voice Quality Assurance orders and the potential effect on the company's of the merger between Sprint and Nextel. All of the lawsuits were consolidated into a single action, "In re Ditech Communications Corp. Securities Litigation, Case No. C 05-02406-JSW." A consolidated amended complaint was filed on Feb. 2, 2006. Defendants moved to dismiss the complaint, and the motion was heard and taken under submission by the court on June 9, 2006. No discovery has taken place and no trial date has been set. The suit is "In re Ditech Communications Corp. Securities Litigation, Case No. 3:05-cv-02406-JSW," filed in the U.S. District Court for the Northern District of California under Judge Jeffrey S. White. Representing the plaintiffs is Christopher T. Heffelfinger of Berman DeValerio Pease & Tabacco, P.C., 425 California Street, Suite 2025, San Francisco, CA 94104, Phone: 415/433-3200, Fax: 415-433-6382, E-mail: cheffelfinger@bermanesq.com. Representing the defendants is William S. Freeman of Cooley Godward, LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, CA 9406-2155, Phone: 650 843-5000, Fax: 650 857-0663, E- mail: freemanws@cooley.com. FELT BICYCLES: Recalls Mountain Bicycles with Defective Brakes -------------------------------------------------------------- Felt Bicycles, of Lake Forest, California, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 700 units of Felt mountain bicycles. The company said the steel brake boss can detach from the frame, causing the rider to lose control and fall. Felt Bicycles has received three reports of the brake boss coming loose. No injuries were reported. This recall involves all model year 2005 and 2006 Kinesis made RXC bicycles. The frames on these bicycles are made with carbon fiber rear seat stays and are equipped with V-style brakes, and not equipped with disk brakes from the factory. Frames affected by this recall were shipped to dealers between October 2004 and April 2006. The mountain bicycles were manufactured in Taiwan and were being sold at bicycle specialty stores nationwide from October 2004 through April 2006 for between $1,050 and $5,000. Picture of the recalled mountain bicycle: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06206.jpg Consumers are advised to stop using the bicycles immediately and contact your local Felt bicycle dealer to receive a free inspection and repair. For more information, contact Felt Bicycles at (866) 433-5887 between 8 a.m. and 5 p.m. PT Monday through Friday, or visit http://www.feltracing.com FLORIDA: Court Says Hollywood Car Seizures Don't Clash With Law --------------------------------------------------------------- The Florida Supreme Court ruled that the city of Hollywood's practice of seizing cars during misdemeanor drug and prostitution arrests doesn't conflict with state law, though the way it carries out the procedure poses serious constitutional concerns, according to South Florida Sun-Sentinel. The ruling was in the class action "Colon B. Mulligan v. the City of Hollywood." Mr. Mulligan sued the city in 2000 after Hollywood police arrested him in a prostitution sting. Police seized his car and returned it only after he paid costs, towing fees and a fine. In the recent ruling, the court found that impounding a vehicle and returning it after the defendant pays a fee typically about $500 plus other costs did not constitute a true forfeiture. With the high court's ruling, the suit is now back to the 4th District Court of Appeal, which already expressed doubts about the practice. It is questioning whether the procedures being used deny drivers their due process rights. Attorney Ronald Guralnick, who represents Mr. Mulligan and other class action plaintiffs, said that the court's ruling is the first step to finding the taking of property without a full trial to be unconstitutional. He pointed out that felons charged with serious drug crimes have the right to a judge, a trial and full rules of civil procedure in forfeiture cases, which are denied in each of the local ordinances. The Supreme Court ruling also validated ordinances in Hollywood, West Palm Beach and other cities that let police impound vehicles used to commit certain misdemeanor offenses. A declaration that the process is unconstitutional stands to give way to dozens of lawsuits seeking millions of dollars in damages from several South Florida cities, according to the report. For more details, contact Ronald S. Guralnick, P.A., 550 Brickell Ave., Ste. 1, Miami, FL 33133-4741, Phone: (305) 358- 6001, Fax: (305) 358-5507. HOMEOWNERS FOR JUSTICE: Former Lawyer Ordered to Return $265T ------------------------------------------------------------- A state appeals court has ordered a former lawyer for Homeowners for Justice Inc. to return a settlement money he received in a lawsuit involving defective plastic plumbing, according to The Star-Banner. The 5th District Court of Appeals ordered Stephen Spivey, now a Circuit Judge, to pay nearly $265,000 to his former employer in affirmation of an earlier jury verdict and a circuit judge ruling. In 2003, Mr. Spivey received $495,000 in settlement of a class action that was supposed to go to a Homeowners client, Newport Development Corp. According to the report, Judge Spivey, who was then Homeowners' lawyer, withheld 20 percent as a legal fee, sent part to Newport Development and kept the rest, saying it was money Homeowners owed to him. In late 2003, he filed a suit against his employer asking a judge to clarify what he was entitled to. A jury later ruled that Judge Spivey didn't have a valid contract with Homeowners when he withheld the funds. Senior Circuit Judge Richard Weinberg ordered him to pay the money withheld, plus interest, to Homeowners. On July 5, the 5th District Court of Appeals upheld the jury verdict and Judge Weinberg's ruling. Judge Spivey was fired from Homeowners in February 2001, court documents show. He practiced law independently before being elected to a circuit judgeship in 2004. HYUNDAI MOTOR: Recalls 2006 Sonata with Missing Air Bag Labels -------------------------------------------------------------- Hyundai Motor Co., in cooperation with the U.S. National Traffic Safety Administration, will recall about 43,926 units of 2006 Hyundai Sonata in September. The company said certain passenger vehicles have air bag warning labels installed on the sun-visors that had lost adhesion to the sun-visors and had distorted or separated from the sun-visors. If the labels are distorted or missing, the driver or front seat passenger will not have the information available that may help protect them in the event of a crash. Consumers are advised to call Hyundai at 1-800-633-5151 for replacement of sun-visor assemblies, free of charge. ILLINOIS: Bill Proposes Penalty for Overtime Pay Violations ----------------------------------------------------------- The state of Illinois may soon have one of the toughest laws aimed at companies that failed to pay overtime, Chicago Tribune reports. A bill, which is to be signed into law by Gov. Rod Blagojevich soon, according to his aides, would impose a penalty of 2 percent of the amount of overtime due per month for the length of the violation. Christopher Williams, the attorney who advised one of the bill's key sponsors, state Sen. Miguel del Valle (D-Chicago), said that currently there is no penalty for such offense. Attorneys predict an increase in overtime pay cases in Illinois in the wake of the law change. These are expected to be an incentive for workers and attorneys alike. Experts blame the increase in overtime lawsuits in Illinois abd in the country as a whole to a lack of clarity in federal law, which has set rules for overtime wages since 1938. An update in 2004 to that law was supposed to clarify eligibility requirements and extend protections to an additional 6 million workers. Experts though pointed out that the revisions only made it more complicated and invited litigation. Traditionally, all workers were eligible for time-and-a-half overtime, except for those in the executive, administrative and professional categories. The 2004 federal changes sought to define more clearly those exempt categories by using new job descriptions, but the new descriptions can seem just as unclear, according to the report. KENTUCKY: Lexington Continues to Pay Cost of Micro-City Lawsuit --------------------------------------------------------------- Lexington city in Fayette County is continuing to pay private attorneys and law firms for their services in the sexual abuse case against the founder and head of Micro-City Government, although the suits have already been settled years ago, Action News 36 has found out. Ron Berry, the man who previously ran a program for inner city youth, was convicted in 2000 on 12-counts of sodomy for having sex with young boys in the Micro-City program. He served three years in prison, and was released in October. Mr. Berry's victims filed a series of lawsuits against the city starting in 1998. Two of the lawsuits were settled for a total of $2.85 million. Other class actions followed but were eventually dismissed. The suits that were dismissed by the lower court were appealed by plaintiffs to the 6th U.S. Circuit Court of Appeals. A three-judge panel of the courts decided that the first class action against the city was not properly dismissed because other possible parties in the class action should have been notified before the case was dismissed. The panel ruled that former participants in the Micro-City Government program who claim they were sexually and emotionally abused by Mr. Berry can pursue claims against the city. The city filed its own appeal with the 12-member 6th U.S. Circuit Court of Appeals, claiming that the three-judge panel erred when it said previous class actions against the city were not properly dismissed. Plaintiffs allege that city administrators and four previous mayors knew or should have known that Mr. Berry was abusing children in the program for disadvantaged youths. They further allege that the city knowingly concealed Mr. Berry's conduct for political reasons. The suit went to the United State Supreme Court, but the city lost the appeal. Recently, Action News 36 found out from public records that the city has already paid out $2.85 million to settle two lawsuits from 20-alleged victims. Nearly 100 others have since come forward with the same claim against the city. Also, the city of Lexington has paid more than $1.7 million to private attorneys and law firms, some for previous lawsuits and others for the current $2 billion class action, according to the report. The city's Law Department explained in writing that lawyers are still being paid for settled cases because the suits were still open on appeal until February of this year. The city reportedly hired private lawyers and law firms because its attorneys didn't have the time or in some cases expertise to handle such a complex legal case. LA ESPERANZA: Labor Lawsuit in Santa Cruz County Remains Pending ---------------------------------------------------------------- La Esperanza Markets in California continues to defend itself against a class action by workers alleging they were not paid for overtime work at the store, it emerged at a Santacruzsentinel.com report. San Francisco lawyer Mark Telamantes was contacted by Watsonville Law Center after Guillermo Mendez and Jose Contreras Moreno, who worked at the Watsonville stores on Main Street, raised their complaint against their employer late last year (Class Action Reporter, March 29, 2006). The suit was filed in January in Santa Cruz County Superior Court. The suit also alleged that owners of the chain of stores, Javier and Emilia Vazquez, rarely granted workers their 10-minute and 30-minute lunch breaks in violation of California labor laws. In March, Mr. Telamantes was waiting for the grocery chain to respond to the case. Mr. Telamantes said Mr. Mendez worked as a janitor, a butcher and a stocker at La Esperanza Markets from May 2000 to October 2003. Mr. Contreras worked in the same capacity from June 2003 to August 2004. Both claim they worked 10-hour days for six days a week, but were never paid for the overtime. La Esperanza stores serve mostly Latino consumers in San Jose, Salinas, Santa Cruz and Watsonville. LEXAR MEDIA: Computer Storage Devices Recalled for Burn Hazard -------------------------------------------------------------- Lexar Media Inc., of Fremont, California, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 66,000 units of Lexar JumpDrive FireFly and 1GB Secure II. The company said the JumpDrives FireFly and Secure II products could overheat, posing a risk of burns to consumers and property damage. No incidents or injuries have been reported. The recalled drives are high-speed flash drives used to store, transfer and carry data from one computer to another. This recall only includes Lexar JumpDrive FireFly which is sold in various colors, and Lexar JumpDrive Secure II 1GB which has a metallic silver housing. "Lexar" is embossed on the front of the plastic housing and the capacity is marked on the back. The part number is located on the FireFly's packaging, and on the back of the Secure II 1GB drive. The models included in the recall are: (1) JumpDrive FireFly Capacity Part Number -------- ----------- 256MB (red) JDFF256-431RU JDFF256-264 JDFF256-445RU 512MB (lime green) JDFF512-431EM 1GB (blue) JDFF1GB-431TO 2GB (black) JDFF2GB-431BK (2) JumpDrive Secure II 1GB Part Number JDSE1GB-00-500 Rev H and 3052-1GBA-2006 3052-1GBA-2106 3052-1GBA-1906 3052-1GBA-1806 The recalled JumpDrive Firefly drives were manufactured in China and are being sold at discount department, office supply, and electronics stores, and by Web retailers, including http://www.lexar.com,between April and May 2006 for between $30 and $110. The recalled JumpDrive Secure II 1GB drive was sold exclusively at Fry's Electronics in May 2006 for about $80. Pictures of the recalled drives: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06205a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml06/06205b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml06/06205c.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml06/06205d.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml06/06205e.jpg Consumers are advised to immediately stop using the recalled JumpDrive Firefly and Secure II devices and contact Lexar to receive a free replacement product. For additional information, contact Lexar at (800) 248-2798 anytime, or visit http://www.lexar.com. MORGAN STANLEY: Faces Gender Discrimination Lawsuit in Calif. ------------------------------------------------------------- Morgan Stanley DW Inc. is a defendant in a purported class action in the U.S. District Court for the District of Columbia, alleging gender discrimination under state and federal law. The purported class action was filed on June 22, 2006 and, captioned, "Joanne August-Johnson et al. v. Morgan Stanley DW Inc." Plaintiffs, who seek damages in law and in equity, are: -- Cheryl Guistiniano, -- Debra Shaw, -- Joanne August-Johnson, -- Laurie Blackburn, and -- Nancy Reeves According to the complaint, the case arises out of the company's alleged systematic discriminatory treatment of its female financial advisors in violation of federal and applicable state civil rights laws. The suit was brought under Title VII of the Civil Rights Act of 1964 and under the Age Discrimination in Employment Act of 1967. The complaint is available free of charge at: http://researcharchives.com/t/s?d76. The suit is "August-Johnson et al. v. Morgan Stanley DW, Inc., Case No. 1:06-cv-01142-RWR," filed in the U.S. District Court for the Northern District of California under Judge Richard W. Roberts. Representing the plaintiffs are: (1) Cyrus Mehri of Mehri & Skalet, PLLC, 1300 19th Street NW, Washington, DC 20036, Phone: (202) 822-5100, E- mail: cmehri@findjustice.com; and (2) Steven M. Sprenger of Sprenger & Lang, PLLC, 1400 I Street, NW, Suite 500, Washington, DC 20005, Phone: (202) 265-8010, Fax: (202) 332-6652, E-mail: ssprenger@sprengerlang.com. MORGAN STANLEY: Securities Brokers File Wage, Hour Suit in Conn. ---------------------------------------------------------------- Morgan Stanley & Co., Inc. is a defendant in a purported class action in the U.S. District Court for the District of Connecticut over wage and work time claims. The suit, "Janemarie Lenihan v. Morgan Stanley & Co., Inc. and Morgan Stanley DW Inc.," was filed on May 22, 2006. The class action was brought on behalf of a securities broker, and two classes of similarly situated persons composed of: -- all employees or former employees who have worked for the defendants who are or were engaged in, or are, were training to be in, the business of selling securities, and who have taken or have trained to take registration exams, at any time after may 23, 2004 (federal class); and -- all employees or former employees who have worked for the defendants in the state of Connecticut and who are or were engaged in, or are or were training to be in, the business of selling securities, and who have taken or have trained to take registration exams, at anytime after May 22, 2004 (Connecticut class). According to the complaint, the defendants violated section 207 of the Fair Labor Standards Act by not paying the federal class overtime pay for a week longer than 40 hours. It also alleges that defendants violated the rights of the Connecticut class under Connecticut General Statute Section 31- 60(a) and Section 31-76(c). A copy of the complaint is available free of charge at: http://researcharchives.com/t/s?d75. The suit is "Lenihan v. Morgan Stanley & Co. Inc. et al., Case No. 3:06-cv-00794-AWT," filed in the U.S. District Court for the District of Connecticut under Judge Alvin W. Thompson. Representing the plaintiffs is Nancy A. Kulesa of Schatz & Nobel-Htfd., One Corporate Center, 20 Church St., Suite 1700 Hartford, CT 06103, Phone: 860-493-6292, Fax: 860-493-6290, E- mail: nancy@snlaw.net. NEW MEXICO: Santa Fe Jail Strip-Search Suit Settled for $5.5M ------------------------------------------------------------- Parties in a suit filed by former jail inmates who were strip- searched at Santa Fe County jail have reached a $5.5 million settlement, according to the Management and Training Corp., the Utah-based firm that used to run the jail, the Associated Press reports. The suit, filed in January 2005, concerns the jail's blanket strip search policy. It seeks to permanently end the practice as well as the inspections of all inmates admitted to the jail (Class Action Reporter, July 7, 2006). It alleges that none of the plaintiffs named were admitted to the jail for violent offenses, and none were found to be in possession of any contraband after they were subjected to a strip search, according to the Web site of Lawyers and Settlements. Former warden Kerry Dixon has said the policy was scrapped in December 2004. The sheriff's department has since taken jail operations. NORTH DAKOTA: Appeal on Suit Over Joint Custody in Divorce Nixed ---------------------------------------------------------------- An appeals court has dismissed a bid by two local advocates for joint custody of children in divorce situations, according to GrandForksHerald.com. In 2005, Roland Riemers, Emerado of North Dakota, and Mitchell Sanderson of Grand Forks filed a class action complaint over custody issues involving 44 states. The suit accuses the state of discriminating against non-custodial parents and of violating their constitutional right to be parents. In North Dakota, District Court Judge Ralph Erickson dismissed their complaint. In his ruling, Judge Erickson cited the 11th Amendment, saying: "The Judicial power of the U.S. shall not be construed to any suit in law or equity, commenced or prosecuted against one of the U.S. by Citizens of another State, or by Citizens or Subjects of any Foreign State." Mr. Riemers and Mr. Sanderson appealed the case to the 8th Circuit Court of Appeals. In a June ruling, the court of appeals upheld the district court's decision, saying the 11th Amendment bars the suit. According to Mr. Sanderson, most of the suits filed against the states have been thrown out. PALACE BACKPACKER: Faces Lawsuit Over Hostel Fire Deaths in 2000 ---------------------------------------------------------------- Families of seven Britons killed in a 2000 fire in Queensland, Australia, will launch a class action against the owner and operators of the backpacker hostel where they died, The Guardian reports. Their move follows Queensland state coroner Michael Barnes' decision not to file criminal charges against the hostel's operators for allegedly failing to provide adequate emergency escape routes from Palace Backpacker Hostel. Detective Sergeant Robert Campbell said that the century-old hostel had never had a fire inspection. A fire alarm at the hostel was faulty and was turned off. Windows were barred or nailed or painted shut and escape exits were blocked. At the time of the fatal blaze, 87 people were reportedly at the hostel despite a local law limiting occupancy to 53 people. The Palace Backpackers Hostel in Childers, Queensland, was engulfed in flames on June 23, 2000 after one of the occupants - - Robert Long -- set fire to it, claiming the lives of young tourists from Britain, Australia, Ireland, Japan, South Korea and Holland. He was convicted of murder and sentenced to life imprisonment. But relatives of the victims claim that poor safety procedures contributed to the magnitude of the disaster. A spokeswoman for the British high commission confirmed that families of at least 11 victims, including all those from the U.K., were expected to support the class action. Hostel operators John Dobe and Christian Atkinson both refused to give evidence before the coroner on the grounds that any evidence they gave might be self-incriminating. The coroner accepted their case and agreed they should not face questioning. At the end of last week's inquest, Coroner Michael Barnes found that the hostel operators were not so negligent in their lack of safety measures that they should face manslaughter charges. PUBLIX SUPER: Recalls Cookie Dough with Undeclared Tree Nuts ------------------------------------------------------------ Publix Super Markets of Lakeland, Florida is issuing a voluntary allergen warning on refrigerated packages of Publix Chocolate Chip Cookie Dough for making baked cookies. The dough is 18 oz. 'Chub' size, with a date code of Sept. 17, 2006 and an item code (UPC) of 41415-00703. The dough was sold at Publix stores in Florida, Georgia, South Carolina, Alabama and Tennessee. The ingredient label does not declare a tree nut (pecans) that may exist in the dough. The company said individuals who have an allergy or severe sensitivity to pecans run the risk of serious or life- threatening allergic reaction if they consume these products. "The chocolate chip dough may contain pecans," said Maria Brous director of media and community relations. "As a food safety precaution, we are recalling the product. There have been no reported cases of illness. Customers who have purchased the product may return it to their store for a full refund or replacement." The U.S. Food and Drug Administration has been informed of the recall. Publix is owned and operated by its 138,000 employees, with 2005 sales of $20.6 billion. Currently Publix has 882 stores in Florida, Georgia, South Carolina, Alabama and Tennessee. The company has been named one of Fortune's "100 Best Companies to Work For in America" for nine consecutive years. In addition, Publix's dedication to superior quality and customer service is recognized as tops in the grocery business, most recently by an American Customer Satisfaction Index survey. For more information, visit http://www.publix.com,or contact Maria Brous at 863-688-1188 x55339. ROYAL OASIS: Sued Over Alleged Illegal Random Faxing in Ohio ------------------------------------------------------------ Bahamas' defunct resort operator Royal Oasis is facing a class action over what is called in the U.S. as blast faxing, The Freeport News reports. The suit was filed in June 2005. It alleges that Royal Oasis Casino and Coral Travel and Tours Driftwood illegally transmitted thousands of faxes to random fax machine owners in Ohio between 2001 and 2004. Defendants in the suit are Driftwood Corp., Driftwood Ltd., Driftwood Freeport, Driftwood Casinos, Royal Oasis casino and Coral Beach and Travel, according to George Melnyk, senior staff investigator for the law offices of Joseph Compoli of Cleveland, Ohio. The Hospitality Management of Jupiter, Florida, and its president David Buddemeyer are also named as defendants, according to the report. The law firm suspects that the companies sent the faxes advertising availability of very low-cost flights to The Bahamas and stays at the Royal Oasis in a junk mail without the recipients' permission, according to Mr. Melnyk. He said the act is a violation of American law, and merits civil and criminal fines within the U.S. According to him, there is a $500 penalty for each fax page received. The Royal Oasis closed in September 2004 due to Hurricane Frances. That time, its owners reportedly owed $2.7 million to the Grand Bahama Port Authority; $2.5 million to National Insurance; $4.1 million to the Workers Pension Fund; $13 million in casino taxes; and more than $55,000 to vendors in Ohio. The government is trying to sell the resort. SMALL WORLD: Recalls Baby Toy Vehicles Posing Choking Hazard ------------------------------------------------------------ Small World Toys, of Culver City, California, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 92,300 units of toy vehicles in the IQ Baby Pillow Soft Activity Blocks, IQ Baby Travelin' Train Blocks, IQ Baby Vroom Vroom Vehicles and Discovery Channel Vroom Vroom Vehicles. The company said the plastic wheels on the toys can detach, posing a choking hazard to young children. It has received 11 reports of incidents in which a wheel detached from one of these toys. No injuries have been reported. IQ Baby Pillow Soft Activity Blocks are a set of 19 foam cloth- covered blocks of various shapes with plastic carrying cases. Two of the blocks are car-shaped and have four 1-inch diameter plastic wheels with a black and white bull's eye pattern. Some cars have tags or labels that say "IQ Baby." IQ Baby Travelin' Train Blocks are a set of four brightly patterned stuffed cloth-covered vehicles, an engine and three cars that attach to each other with Velcro connectors. Each piece is about 4-inches long, 2 1/2-inches wide, and 3-inches tall, and has four 1-inch diameter plastic wheels with a black and white spoke pattern. Some pieces have tags or labels that say "IQ Baby." IQ Baby and Discovery Channel Vroom Vroom Vehicles are sets of six soft, stuffed, brightly colored trucks that come in a plastic carrying case. Each truck is about 5 inches long, 3 inches tall, and 2 1/2 inches wide and has four 1-inch diameter plastic wheels with a black and white bull's eye pattern. Some of the trucks in the sets have labels that read "IQ Baby" or "Discovery Channel." These toy vehicles were manufactured in China and are being sold at toy stores and various retailers nationwide, as well as through catalogues. The Discovery Channel Vroom Vroom Vehicles were sold at Discovery Channel stores nationwide and online. IQ Baby Pillow Soft Activity Blocks were sold from March 2005 through May 2006 for about $40. The Travelin' Train Blocks were sold from July 2005 through May 2006 for about $20. The Vroom Vroom Vehicles were sold from January 2003 through May 2006 for about $25. Pictures of the recalled toy vehicles: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06203a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml06/06203b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml06/06203c.jpg Consumers are advised to stop using the recalled toy vehicles immediately and contact Small World Toys for information on how to obtain a free replacement toy. For additional information please contact Small World Toys at (800) 421-4153 between 8 a.m. and 5 p.m. PT Monday through Friday, visit http://www.smallworldtoys.comor E-mail: recall@smallworldtoys.com. TASER INT'L: N.D. Calif. Court Shelves Product Liability Lawsuit ---------------------------------------------------------------- Judge James Ware of the U.S. District Court for the Northern District of California denied Taser International, Inc.'s motion to dismiss claims arising from the Feb. 20, 2005 death of a Monterey County, California man following repeated shocks from one of its electric weapons. On Feb. 20, 2005, Robert Heston, Jr. began acting erratically inside his family's Salinas, California home. His father, believing his son might be under the influence of drugs, called the police reporting his bizarre behavior. Officers from the Salinas Police Department responded to the Heston home and confronted Mr. Heston. Approximately four to five police officers used their Taser electric weapons repeatedly as other officers restrained Heston on the ground. Mr. Heston stopped breathing, and then died shortly thereafter. The "Taser" is a weapon that shoots darts into skin or clothing, delivering 50,000 volts of electricity, which temporarily immobilizes people, causing them to drop a weapon. Some critics of the device claim it can be used excessively and may cause death and injury when used improperly. Individual police departments nationwide also have been the targets of legal action as a result of Taser use (Class Action Reporter, Feb. 3, 2005) In the lawsuit, "Heston v. City of Salinas, et al., N.D. Cal. Case No. 5:05-cv-03658-JW," Mr. Heston's parents alleged that Taser electric shock weapons are unreasonably dangerous and defective for use on human beings because they are sold without warning about the effect of multiple shocks for extended durations, the danger of shocking people who are under the influence of drugs, and the effects of Taser shocks on respiration. The weapon, when used repeatedly and in combination with aggressive police restraints, causes unnecessary deaths. Taser International, Inc., asked the district court to dismiss the claims of the Heston family, contending that: -- Robert Heston's death was not reasonably foreseeable, -- its product is not inherently dangerous, and -- it had no duty to warn of the dangers of its product Judge Ware denied Taser International's motion to dismiss without comment. His ruling follows on the heals of a similar ruling by U.S. District Judge Jeremy Vogel on March 7, 2006 in the case of "Rosa v. City of Seaside, N.D. Cal. Case No. C 05- 03577 JF." That case, which is also being litigated by Messrs. Burton and Williamson, involves the death of Michael Rosa on Aug. 29, 2004 after he had been repeatedly subjected to multiple uses of Taser electric weapons by police officers from several police agencies. In denying Taser International's motion to dismiss, Judge Fogel ruled that Taser has a duty to design and manufacture its products to avoid foreseeable dangers arising from their use, and to warn its customers and users of any foreseeable dangers that could arise when people such as Michael Rosa are shocked repeatedly and then subjected to aggressive restraint procedures. No trial date has been set in this case either. In January 2005, the Securities and Exchange Commission launched an informal inquiry into Taser International (Class Action Reporter, January 11, 2005). The company was named as defendant in 35 lawsuits in which the plaintiffs alleged either wrongful death or personal injury in situations in which the TASER device was used (or present) by law enforcement officers or during training exercises (Class Action Reporter, Feb. 28, 2005). The suit is "Heston et al v. City of Salinas et al., Case No. 5:05-cv-03658-JW," filed in the U.S. District Court for the Northern District of California under Judge James Ware, with referral to Judge Richard Seeborg. Representing the plaintiffs are: (1) John Christopher Burton of The Law Offices of John Burton, 414 South Marengo Avenue, Pasadena, CA 91101, Phone: 626-449-8300, Fax: 626-449-4417, E-mail: jb@johnburtonlaw.com; and (2) Peter M. Williamson of Williamson & Krauss, 18801 Ventura Blvd., Suite 206, Tarzana, CA 91356, Phone: 818-344-4000, Fax: 818-344-4899, E-mail: pmw@williamson-krauss.com. Representing the defendants are: (1) Vincent P. Hurley of the Law Offices of Vincent P. Hurley, 38 Seascape Village, Aptos, CA 95003, Phone: 831-661-4800, Fax: 831-661-4804, E-mail: vhurley@hurleylaw.com; and (2) Mildred K. O'Linn of Kass Ellrod Ramirez LLP, Figueroa Tower, 660 South Figueroa Street, 23rd Floor, Los Angeles, CA 90017, Phone: 213-624-6900, Fax: 213-624- 6999, E-mail: mko@mmker.com. TENET HEALTHCARE: Hilton Medical Patients to Get Reimbursement -------------------------------------------------------------- Tenet Healthcare Corp., which owns Hilton Head Regional Medical Center, agreed to refund money to uninsured patients who were treated at the South Carolina hospital between Oct. 7, 2001, and May 22, 2006, the Island Packet reports. Under a proposed settlement to a class action, Tenet will grant refunds to some who used two other Tenet-owned hospitals in the state, East Cooper Regional Medical Center in Mount Pleasant and Piedmont Medical Center in Rock Hill. According to a legal notice, uninsured patients could be reimbursed for up to 20 percent of their medical bills by filling out a claim form and becoming a part of the settlement class, which is free (Class Action Reporter, July 5, 2006). A copy of the settlement notice is available free of charge at: http://ResearchArchives.com/t/s?d74 Case Background In 2005, a lawsuit was brought against East Cooper Regional Medical Center, Hilton Head Regional Medical Center and Piedmont Healthcare System in the Charleston County, South Carolina Court of Common Pleas. It alleged that patients at the Hospitals were not provided with a statutory discount to which they were allegedly entitled. Plaintiffs Robert A. Singletary, Sr. and R. Allen Singletary, Jr. have brought these actions on behalf of themselves and similarly situated persons who were patients of East Cooper Regional Medical Center, Hilton Head Regional Medical Center, and Piedmont Healthcare System. The plaintiffs claim that the hospitals did not provide plaintiffs and other patients with a statutory discount to which they were allegedly entitled under South Carolina Code Section 38-71-120. The two actions: -- "R. Allen Singletary, Jr. et al. v. East Cooper Community Hospital et al., Civil Action No. 04-CP-10- 4211," and -- "Robert A. Singletary, Sr. et al. v. East Cooper Community Hospital, Inc. et al., Civil Action No. 04-CP- 10-4212," have been consolidated for the purposes of administering this settlement. The case is now known as the "South Carolina Tenet Class Action." Class certification as to each of the consolidated actions was granted by Orders of the Court dated June 20, 2005, and filed on June 28, 2005. The hospitals deny that they acted improperly or wrongfully in any way and deny any and all allegations of wrongdoing, fault, liability, or damage of any kind to plaintiffs or other patients. On May 25, 2006, a settlement agreement in the South Carolina Tenet Class Action received preliminary approval. TENNESSEE: Motorists Sue Oakland Over Fines, Allege Extortion ------------------------------------------------------------- The Town of Oakland, Tennessee faces a purported class action in Fayette County Circuit Court, accusing it of running an illegal traffic enforcement and fines operation that extorts money and is violating the civil rights of motorists, according to The Commercial Appeal. Eddie McKinney Jr., Brandon Alan Massey, Susan Hinsley and Melissa Ferge filed the lawsuit. While passing through Oakland last October, Mr. McKinney said he was asked $273 in traffic fines and court costs. Mr. Massey, Ms. Hinsley and Ms. Ferge, on the other hand, said they were told if they paid court costs and a $50 fine, their tickets would be dismissed and go unreported to the state. According to the suit, police improperly threatened Mr. McKinney with arrest when there was confusion over a court date, citing a nonexistent state code, and did not provide him documentation needed to appeal. Plaintiff attorneys are asking the court to count Mr. Massey, Ms. Hinsley and Ms. Ferge as part of a class action complaint. Oakland officials strongly dispute the lawsuit's claims and are seeking its dismissal. Town attorney Richard Myers said that the case is going to boil down to whether or not a municipal judge has the discretion to dismiss a traffic ticket under certain conditions. Mr. McKinney's ticket fine was high because he missed two court dates, according to Mr. Myers. His official response filed with the court indicates that Mr. McKinney and Hardeman County officials sought to get Mr. McKinney's ticket fixed. Mr. Myers explained that Mr. McKinney is a deputy jailer in Hardeman County and his lawyer, Charles Cary, is a General Sessions judge in that county. Mr. Cary, acting as an attorney for Mr. Myers, and Andrew Steven Johnson of Memphis, filed the lawsuit. For more details, contact Charles M. Cary of Denton & Cary, P.O. Box 306, 118 Warren Street, Bolivar, TN 38008-2329, Phone: (901) 658-5170, Fax: (731) 658-6806. TOBACCO LITIGATION: Fitch Ratings Welcomes Ruling in "Engle" ------------------------------------------------------------ The Supreme Court of Florida's approval of the Third District Court's reversal of the $145 billion class action punitive damages award against the domestic tobacco industry is an extremely favorable development, according to Fitch Ratings. Fitch is maintaining its current ratings and outlooks for Altria Group, Inc. (parent of Philip Morris USA), Reynolds American Inc. (parent of R.J. Reynolds Tobacco Company and the former Brown and Williamson Tobacco Corp.) and Loews Corp. (parent of Lorillard Tobacco Company), which had incorporated a high likelihood of the July 6 decision. The Supreme Court of Florida unanimously concluded that 'the punitive damages award is excessive as a matter of law'. Fitch's assessment of the domestic tobacco industry centers on class action with the greatest risk in the near-to intermediate term. The three major cases that Fitch has followed are the Price 'light' cigarettes case in Illinois, the Engle smoking and health case in Florida and the U.S. Department of Justice case in Washington D.C. Fitch's ratings upgrades for Altria and Loews in May 2006 were based on positive legal developments over the past three years. Judge Kessler's opinion in the DoJ case is expected in the near term, following the conclusion of the trial in June 2005. The final proposal the government is seeking includes $14 billion over five-to-ten years for the tobacco industry to provide programs for smoking cessation, public education and counter- marketing. The Stable Outlook for the domestic tobacco companies reflect recent improvements in the litigation environment, including today's ruling. The operating environment has also improved and the major firms have regained pricing flexibility. The risk of a substantial payout due to an adverse legal decision has diminished with favorable rulings at the state Supreme Court levels in Engle and Price. Nonetheless, some risk remains until the conclusion of any remaining appeals. Beyond the legal issues, there are a number of continuing negative pressures on the industry including extensive smoking bans which dampen demand, rising excise taxes which continue to raise per pack costs and reduce pricing flexibility, and a competitive operating environment. Overall domestic consumption continues to decline at low single digit levels annually, resulting in tobacco companies battling for market share with a shrinking pool of consumers. Fitch will continue to analyze the impact of these factors and may review the ratings if accelerated decline in industry operating earnings and cash flows occur. The positive ruling in Engle brings Altria closer to splitting up into two or three independent entities. The credit ratings would depend on how the separation is executed and the new capital structures. Ratings would be based on the entities' individual litigation risk profiles and operating environments. Fitch maintains ratings on 61 tobacco settlement securitizations, the ratings of which are linked to and will move with Fitch's future assessment of the tobacco industry's overall credit quality. Fitch had revised the domestic tobacco industry's Rating Outlook to Stable from Negative on May 16, 2006. At this time, Fitch maintains the existing ratings and will concurrently review the ratings with its Corporate Group. -- 'Fitch Upgrades Altria IDR to 'BBB+', Kraft to 'A-'; Revises Tobacco Sector Outlook to Stable ' dated May 16, 2006; -- 'Fitch Upgrades Loews' IDR to 'A'; Outlook Stable ', dated May 16, 2006; -- 'Fitch Affirms Reynolds American's IDR at 'BB'; Outlook Stable', dated April 27, 2006; -- 'Fitch Rates RAI's $1.65B Senior Sec. Nts. Offering 'BB+'; Lowers RJR's Senior Notes to 'BB-'', dated May 19, 2006; -- ' Fitch Affirms R.J. Reynolds' Guaranteed Unsecured Notes At 'BB'; Outlook Stable', dated June 23, 2006. A copy of the Florida High Court's opinion on "Engle" is at: http://ResearchArchives.com/t/s?d78 TOBACCO LITIGATION: American Legacy Criticizes Engle Decision ------------------------------------------------------------- A decision by the Florida Supreme Court in the Engle suit effectively leaves 700,000 Florida smokers with little or no redress against U.S. tobacco companies that have profited by selling highly addictive cigarettes, which most smokers begin using before they are old enough to legally purchase the products, according to American Legacy Foundation. Ironically, this is in spite of the fact that the court upheld findings about the grave dangers and addictiveness of cigarettes as well as the actions of the tobacco companies in misrepresenting these dangers, the group said in a statement. The ruling underscores the fact that Big Tobacco will literally be able to litigate to death a smoker's claim for justice, it said. The court decision said that compensatory damages must be paid to two of three individual plaintiffs in the case, but that tobacco companies do not have to pay $145 billion in punitive damages to smokers included in the class action portion of the case. Those dollars had been requested on behalf of Florida citizens and residents (and their survivors) who have suffered, presently suffer or who have died from diseases caused by their addiction to cigarettes that contain nicotine. Few individuals can withstand the financial and time-consuming hardships associated with years of expensive and lengthy litigation against these huge companies. The American Legacy Foundation notes the dangerous message that this ruling makes about public health. It said that it knows that cigarettes include highly addictive nicotine and that more than 80 percent of smokers start before they are adults, but that the companies who manufacture and market the products responsible for the nation's number-one cause of preventable death -- tobacco use -- can hide behind procedural roadblocks to avoid most liability. Requiring smokers to file individual cases, instead of benefiting from our legal system's ability to address large- scale issues through class actions, allegedly places a great burden on individuals already suffering the adverse effects of tobacco, including the costs associated with treating tobacco- related disease. Yet again, the group said, it is an example of Goliath standing on David's neck -- a bellwether decision that is bad for public health and even worse for American smokers. A copy of the Florida High Court's opinion on "Engle" is at: http://ResearchArchives.com/t/s?d78 UNITED STATES: Products Liability Suits Decline, Research Says -------------------------------------------------------------- After peaking in 2004, the number of total federal products liability lawsuits filed in the U.S. declined by 14% last year and is on pace to decline an additional 16% in 2006. The data was compiled with information gathered from the LexisNexis Market Intelligence database and released in May by LexisNexis U.S. According to the LexisNexis Market Intelligence report, a gradual rise in federal lawsuits filed under Nature of Suit 365, the designation for personal injury-products liability claims, began in 2001, when just over 5,000 NOS 365 filings were made. That number grew to more than 13,000 cases filed in 2002, rose to 17,000 in 2003 and then soared to nearly 28,000 lawsuits in 2004. A slight falloff occurred in 2005, when the number of products liability filings declined to less than 24,000, and the year-to- date lawsuits in 2006 are on pace for less than 20,000 cases to be filed this year. "According to the latest data from Market Intelligence, products liability litigation filings came down a bit in 2005 but are still at very high levels in an historical context," said Mason White, vice president of Market Intelligence at LexisNexis. "The question that legal experts will be attempting to answer in the coming months is whether this recent decline is just a temporary blip or the beginning of a downturn in products liability filings." Mr. White pointed out that it has now been [] months since President Bush signed into law the Class Action Fairness Act of 2005, an ambitious bill that sought to curb abusive class action and products liability litigation. Although most observers don't foresee a substantial long-term decline in products liability cases, some experts hold out the possibility that 2004 was a peak year and that CAFA is helping to produce a slight downturn. New Securities Fraud Cases HOME SOLUTIONS: Glancy Binkow Files Tex. Securities Fraud Suit -------------------------------------------------------------- Glancy Binkow & Goldberg LLP has filed a class action in the U.S. District Court for the Northern District of Texas on behalf of a class consisting of all persons or entities that purchased or otherwise acquired securities of Home Solutions Of America, Inc. (AMEX:HOM) between April 11, 2006 and June 6, 2006, inclusive. The Complaint charges Home Solutions and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning Home Solutions' business and prospects caused the Company's stock price to become artificially inflated, inflicting damages on investors. Home Solutions offers recovery, restoration, rebuilding/remodeling and specialty interior services to commercial and residential properties in the U.S. The Complaint alleges that during the Class Period defendants announced that the Company had been awarded a contract valued at up to $20 million to provide infrastructure support for Hurricane Katrina rebuilding efforts, including contracts with Home Depot Inc. and American Renaissance Homes. Then, on June 6, 2006, a company-issued press release revealed that Home Solutions actually was lending up to $800,000 to American Renaissance Homes for "working capital," secured by its modular homes and land. The Complaint alleges that defendants' prior representations concerning the Company's financial performance and prospects, based, among other things, on the American Renaissance Homes' contract, were false and misleading and concealed from the investors the Company's actual performance and prospects. As a result of this news, Home Solutions' stock price plummeted 29.1%, or $2.80, to close on June 6, 2006 at $6.80, on extremely heavy trading volume of 26.2 million shares. For more details, contact Michael Goldberg and Lionel Z. Glancy of Glancy Binkow & Goldberg, LLP, Phone: (310) 201-9150, Fax: (888) 773-9224, E-mail: info@glancylaw.com, Web site: http://www.glancylaw.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. 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