/raid1/www/Hosts/bankrupt/CAR_Public/080205.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, February 5, 2008, Vol. 10, No. 25
Headlines
BEAR STEARNS: High Court Grants Certiorari Bid in Antitrust Suit
BEAR STEARNS: Second Circuit Reverses Decision in IPO Litigation
BEAR STEARNS: Still Faces N.Y. Suit Over Mutual Funds Investment
BEAR STEARNS: Delaware Court Approves Investors' Suit Settlement
BEAR STEARNS: N.Y. Court Nixes Short-Selling Transactions Suit
BEAR STEARNS: Faces Suits by Investors of Bankrupt Hedge Funds
BEAR WAGNER: Still Faces NYSE Floor Specialist Activities Suit
BRIDGESTONE FIRESTONE: Continues to Face Liberian Workers' Suit
CARIBOU COFFEE: Settles Minn. Labor Violations Lawsuit For $2.7M
CITIZENSHIP & IMMIGRATION: Faces US$702MM Suit for Overcharging
COMMONWEALTH LAND: "Alberton" Insurance Rates Suit Certified
FIDELITY NATIONAL: Title Insurance Suit in Ohio Court Certified
FORD MOTOR: Chester County EMS Joins Lawsuit as Plaintiff
GLASS MANUFACTURERS: Burhans Glass Files Suit Over Price-Fixing
INDIAN TRUST: Interior Can't Account for Owed Money, Judge Says
IOWA OFFICIALS: Deny Discrimination Allegations in Lawsuit
KIDS II: Recalls Soothing Seascape Crib Toys Due to Choking Risk
MIAMI: Car Owners Seek $12 Million in Impound Fees Refund
MICH. DEP'T OF CORRECTIONS: Prisoners Get US$10MM for Sex Abuse
MULCAHY INC: Faces Minn. Suit Over Exploitation of Latino Crews
NEW MEXICO: Alamogordo, Others Face Litigation Over 2006 Floods
VEGAS STRIP CLUBS: S.C. Gives Stripper Lawsuit Go Signal
WELLS FARGO: Accused of Taking Kickbacks for Mortgage Insurance
* CEO Compensation Practices are Indicators of Securities Suits
New Securities Fraud Cases
CELLCYTE GENETICS: Cohen Milstein Files WA Securities Fraud Suit
HUNTINGTON BANCSHARES: Wolf Haldenstein Files OH Securities Suit
MORGAN KEEGAN: Chitwood Harley Files Securities Fraud Suit in TN
SUNOPTA INC: Schiffrin Barroway Files N.Y. Securities Fraud Suit
*********
BEAR STEARNS: High Court Grants Certiorari Bid in Antitrust Suit
----------------------------------------------------------------
The U.S. Supreme Court granted defendants' petition for
certiorari to appeal the decision issued by the U.S. Court of
Appeals for the Second Circuit in a purported antitrust class
action that names Bear, Stearns & Co. Inc., as a defendant.
In January 2002, Bear Stearns was named as a defendant, along
with nine other financial services firms, in an antitrust
complaint filed with the same court on behalf of a putative
class of purchasers who, either in initial public offerings or
in the aftermarket, purchased technology-related securities
during the period March 1997 to December 2000.
The Plaintiffs allege that the defendants conspired to require
that customers, in return for an allocation in the IPOs:
-- pay charges in addition to the IPO price, such as non-
competitively determined commissions on the purchase
or sale of other securities, and
-- agree to purchase the IPO securities in the
aftermarket at prices above the IPO price.
The Plaintiffs claim that these alleged practices violated
Section 1 of the Sherman Act and state antitrust laws and seek
compensatory and treble damages.
On Nov. 6, 2003, the District Court granted the defendants'
(including Bear Stearns') motion to dismiss all claims asserted
against them by the antitrust plaintiffs.
The plaintiffs appealed the decision to the U.S. Court of
Appeals for the Second Circuit and on Sept. 28, 2005, the Court
of Appeals vacated the dismissal and remanded this matter to the
lower court for further proceedings.
On Dec. 7, 2006, the U.S. Supreme Court granted defendants'
petition for certiorari to appeal the decision issued by the
Second Circuit.
On June 18, 2007, the U.S. Supreme Court reversed the Second
Circuit Court of Appeals' decision, according to Bear Stearns'
Jan. 29, 2008 Form 10-K Filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Nov. 30, 2007.
The Bear Stearns Companies, Inc. -- http://www.bearstearns.com/
is a holding company, which through its broker-dealer and
international bank subsidiaries, Bear, Stearns & Co. Inc. (Bear
Stearns), Bear, Stearns Securities Corp. (BSSC), Bear, Stearns
International Limited (BSIL); Bear Stearns Bank plc (BSB); Bear
Stearns Global Lending Limited; Custodial Trust Company; Bear
Stearns Financial Products Inc.; Bear Stearns Capital Markets
Inc.; Bear Stearns Credit Products Inc.; Bear Stearns Forex
Inc.; EMC Mortgage Corporation; Bear Stearns Commercial
Mortgage, Inc.; Bear Stearns Investment Products Inc. and Bear
Energy L.P is an investment banking, securities and derivatives
trading, clearance and brokerage firm serving corporations,
governments, institutional and individual investors globally.
BEAR STEARNS: Second Circuit Reverses Decision in IPO Litigation
----------------------------------------------------------------
The U.S. C-ourt of Appeals for the Second Circuit reversed a
decision that denied class certification of one of several
consolidated antitrust class actions relating to IPO
underwriting fees, which names Bear, Stearns & Co. Inc., as a
defendant.
Bear Stearns, along with numerous other financial services
firms, is a defendant in several consolidated class actions
currently pending in the U.S. District Court for the Southern
District of New York.
The first consolidated action, filed on March 15, 2001, purports
to be brought on behalf of a putative class of purchasers of
stock in initial public offerings (Purchaser Action).
The second consolidated action, filed on July 6, 2001, purports
to be brought on behalf of a putative class of issuers of stock
in initial public offerings (Issuer Action).
Each suit alleges that Bear Stearns violated federal antitrust
laws by fixing underwriting fees at 7% for initial public
offerings with an aggregate issuance value of $20-$80 million
for the time period 1994 to the present.
The plaintiff in each action seeks injunctive relief and treble
damages.
On Feb. 24, 2004, the Court granted defendants' motion to
dismiss the complaint in the Purchaser Action in part,
dismissing plaintiffs' claim for treble damages under Section 4
of the Clayton Act.
However, the District Court denied defendants' motion to dismiss
the plaintiffs' claim for injunctive relief.
On Sept. 16, 2004, plaintiffs in the Purchaser Action and the
Issuer Action moved for class certification.
On Oct. 25, 2005, plaintiffs in both actions moved for partial
summary judgment against defendants on liability.
By Order dated April 18, 2006, the District Court denied the
Issuer plaintiffs' motion for class certification. The Issuer
plaintiffs appealed the District Court's ruling to the U.S.
Court of Appeals for the Second Circuit.
By Order dated Sept. 11, 2007, the Second Circuit reversed the
District Court's denial of class certification and remanded the
matter back to the District Court for further consideration of
certain questions specified in the Second Circuit's Order,
according to Bear Stearns' Jan. 29, 2008 Form 10-K Filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Nov. 30, 2007.
The Bear Stearns Companies, Inc. -- http://www.bearstearns.com/
is a holding company, which through its broker-dealer and
international bank subsidiaries, Bear, Stearns & Co. Inc. (Bear
Stearns), Bear, Stearns Securities Corp. (BSSC), Bear, Stearns
International Limited (BSIL); Bear Stearns Bank plc (BSB); Bear
Stearns Global Lending Limited; Custodial Trust Company; Bear
Stearns Financial Products Inc.; Bear Stearns Capital Markets
Inc.; Bear Stearns Credit Products Inc.; Bear Stearns Forex
Inc.; EMC Mortgage Corporation; Bear Stearns Commercial
Mortgage, Inc.; Bear Stearns Investment Products Inc. and Bear
Energy L.P is an investment banking, securities and derivatives
trading, clearance and brokerage firm serving corporations,
governments, institutional and individual investors globally.
BEAR STEARNS: Still Faces N.Y. Suit Over Mutual Funds Investment
----------------------------------------------------------------
The Bear Stearns Cos. Inc., along with numerous other financial
services firms and other unnamed persons, continues to face a
purported class action titled "In re: Mutual Funds Investment
Litigation, MDL 1586," according to Bear Stearns' Jan. 29, 2008
Form 10-K Filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Nov. 30, 2007.
On Nov. 7, 2003, Bear Stearns Securities Corp., and Bear
Stearns, together with 18 other entities and individuals, were
named as defendants in a purported class action filed in the
U.S. District Court for the Southern District of New York by a
mutual fund investor on behalf of persons who purchased and/or
sold ownership units of mutual fund in the Janus or Putnam
families of mutual funds between Nov. 1, 1998, and July 3, 2003.
On Jan. 26, 2004, the plaintiff filed a first amended complaint,
again on behalf of persons who traded in the Janus or Putnam
families of mutual funds, against the same Bear Stearns
defendants and 16 other entities and individuals, including
mutual funds and other financial institutions.
On Oct. 22, 2003, another purported class action was filed on
behalf of the general public of the state of California against
multiple defendants, and subsequently included the company as a
defendant, with respect to various mutual funds.
Both of these actions allege that the defendants violated
federal and state laws by allowing certain investors to market
time and late trade mutual fund shares and seek various forms of
relief including damages of an indeterminate amount.
On March 19, 2004, these actions were transferred to the U.S.
District Court for the District of Maryland for coordinated and
consolidated pre-trial proceedings as part of "In re: Mutual
Funds Investment Litigation, MDL 1586."
On or subsequent to Sept. 29, 2004, 15 new and amended class
action or derivative complaints were filed in MDL-1586 naming as
defendants the Bear Stearns defendants, various mutual fund
companies, certain broker-dealers, and others.
The plaintiffs who have brought actions, either directly or
derivatively, against one or more of the Bear Stearns defendants
are shareholders in these families of mutual funds:
-- AIM,
-- Invesco,
-- PIMCO/Allianz Dresdner,
-- Excelsior,
-- Alliance,
-- Franklin Templeton,
-- One Group,
-- Strong,
-- Columbia,
-- Pilgrim Baxter,
-- Alger,
-- Janus,
-- RS, and
-- MFS.
Among other things, the actions allege that the defendants
violated federal and state laws by allowing certain investors to
market time and late trade mutual fund shares and seek various
forms of relief including damages of an indeterminate amount.
The Bear Stearns defendants, along with certain other
defendants, filed an omnibus motion to dismiss the consolidated
class action and derivative claims against them.
On Nov. 3, 2005, the derivative claims against the Bear Stearns
defendants were dismissed. As of Dec. 31, 2005, the Bear
Stearns defendants' motion to dismiss was otherwise granted in
part and denied in part as to direct investor claims in these
families of mutual funds: Janus, AIM/Invesco, RS, One Group,
MFS, Columbia, PIMCO/Allianz Dresdner, Alger, Excelsior, and
Strong.
The suit is "In re Mutual Funds Investment Litigation, Case No.
1:04-md-15862-AMD," filed with the U.S. District Court for the
District of Maryland under Judge Andre M. Davis.
Representing the plaintiffs is:
H. Adam Prussin, Esq.
Pomerantz Haudek Block Grossman and Gross LLP
100 Park Ave 26th Fl.
New York, NY 10017-5516
Phone: 1-212-661-1100
Fax: 1-212-661-8665
e-mail: haprussin@pomlaw.com
BEAR STEARNS: Delaware Court Approves Investors' Suit Settlement
----------------------------------------------------------------
The Delaware Chancery Court approved the settlement in the
matter, "In re Prime Hospitality, Inc. Shareholders Litigation,"
which names The Bear Stearns Cos., Inc. as defendant.
The suit, "In re Prime Hospitality, Inc. Shareholders
Litigation," was filed on July 15, 2005, on behalf of
shareholders of Prime Hospitality Corp. It also names as
defendants the directors of Prime, the Blackstone Group, and
certain affiliates of Blackstone.
As amended, the complaint alleges that the company acted as a
financial advisor to Prime in connection with the sale of Prime
to Blackstone, and that the company aided and abetted a breach
of fiduciary duty by the directors of Prime in connection with
that transaction.
The amended complaint seeks compensatory damages in an
unspecified amount, as well as various forms of equitable
relief, including, but not limited to, rescissory damages, the
imposition of a constructive trust and an accounting.
On Oct. 3, 2005, Bear Stearns filed its answer to the
consolidated amended class action complaint denying all
allegations of wrongdoing and asserted affirmative defenses.
The parties have reached an agreement in principle to settle the
action against all defendants, including Bear Stearns, subject
to confirmatory discovery.
On Sept. 19, 2007, the Court approved the settlement and the
case was dismissed with prejudice, according to Bear Stearns'
Jan. 29, 2008 Form 10-K Filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Nov. 30, 2007.
The Bear Stearns Companies, Inc. -- http://www.bearstearns.com/
is a holding company, which through its broker-dealer and
international bank subsidiaries, Bear, Stearns & Co. Inc. (Bear
Stearns), Bear, Stearns Securities Corp. (BSSC), Bear, Stearns
International Limited (BSIL); Bear Stearns Bank plc (BSB); Bear
Stearns Global Lending Limited; Custodial Trust Company; Bear
Stearns Financial Products Inc.; Bear Stearns Capital Markets
Inc.; Bear Stearns Credit Products Inc.; Bear Stearns Forex
Inc.; EMC Mortgage Corporation; Bear Stearns Commercial
Mortgage, Inc.; Bear Stearns Investment Products Inc. and Bear
Energy L.P is an investment banking, securities and derivatives
trading, clearance and brokerage firm serving corporations,
governments, institutional and individual investors globally.
BEAR STEARNS: N.Y. Court Nixes Short-Selling Transactions Suit
--------------------------------------------------------------
The U.S. District Court for the Southern District of New York
dismissed the matter, "In re Short Sale Antitrust Litigation,
Case No. 1:06-cv-02859-VM," which named The Bear Stearns Cos.,
Inc., along with numerous other financial services firms and
other unnamed persons, as defendants.
The purported class action was filed by customers who engaged in
short-selling transactions in equity securities since April 12,
2000.
The complaint generally alleged that the customers were charged
fees in connection with the short sales but that the applicable
securities were not necessarily borrowed to effect delivery,
which resulted in failed deliveries of the securities and/or
excess charges to the customers.
The complaint alleged that this conduct constituted a conspiracy
in violation of the federal antitrust laws, and also asserts New
York state-law claims.
Defendants moved to dismiss the complaint on March 15, 2007. On
Dec. 20, 2007, the District Court dismissed the complaint in its
entirety, dismissing the federal antitrust claims with
prejudice, and the state-law claims without prejudice, as to all
defendants, and directing that the case be closed, according to
Bear Stearns' Jan. 29, 2008 Form 10-K Filing with the U.S.
Securities and Exchange Commission for the fiscal year ended
Nov. 30, 2007.
The suit is "In re Short Sale Antitrust Litigation, Case No.
1:06-cv-02859-VM," filed with the U.S. District Court for the
Southern District of New York, Judge Victor Marrero presiding.
Representing the plaintiffs are:
Vincent R. Cappucci, Esq.
Entwistle & Cappucci LLP
280 Park Avenue, 26 Floor West
New York, NY 10017
Phone: (212) 894-7200
Fax: (212) 894-7272
e-mail: http://www.entwistle-law.com
Representing the defendants are:
William Joseph Fenrich, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Phone: (212)-450-4000
Fax: (212)-450-3800
e-mail: william.fenrich@dpw.com
BEAR STEARNS: Faces Suits by Investors of Bankrupt Hedge Funds
--------------------------------------------------------------
The Bear Stearns Companies Inc., Bear, Stearns & Co. Inc., Bear
Stearns Asset Management, Bear, Stearns Securities Corp., and
certain individual current or former employees face two
purported class action complaints relating to the Bear Stearns
High Grade Structured Credit Strategies Master Fund, Ltd., and
the Bear Stearns High Grade Structured Credit Strategies
Enhanced Leverage Master Fund, Ltd., according to Bear Stearns'
Jan. 29, 2008 Form 10-K Filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Nov. 30, 2007.
First Litigation
The first action, titled, "Navigator Capital Partners, L.P. v.
BSAM, et al.," was filed on Aug. 6, 2007, with the New York
State Supreme Court.
The action is styled as both a purported class action on behalf
of purchasers of partnership interests in Bear Stearns High
Grade Structured Credit Strategies Fund, L.P., also known as a
"feeder fund," which invested substantially all of its assets in
the High Grade Fund, as well as a derivative action on behalf of
the HG Partnership as a nominal defendant.
The Complaint asserts claims for breaches of fiduciary duty
against BSAM and the individual defendants. The remaining
defendants are alleged to have aided and abetted in the breaches
of fiduciary duty.
The named plaintiff in this action alleges that it purchased in
excess of $700,000 of Partnership interests. The relief being
sought by the plaintiff is unspecified damages, costs and fees.
Second Litigation
The second action, titled, "FIC, L.P. v. BSAM, et al.," was
filed on Dec. 21, 2007, with the U.S. District Court for the
Southern District of New York.
The action was brought by a purchaser of partnership interests
in the Bear Stearns High Grade Structured Credit Strategies
Enhanced Leverage Fund, L.P., also known as a "feeder fund,"
which invested substantially all its assets synthetically
through a leverage instrument to conduct activities indirectly
through an investment in the Enhanced Leverage Fund.
The Complaint asserts claims for breach of contract and breaches
of fiduciary duty against BSAM and the individual defendants.
The remaining defendants are charged with having aided and
abetted in the breaches of fiduciary duty.
The relief being sought by the plaintiff is unspecified damages,
costs and fees.
The Bear Stearns Companies, Inc. -- http://www.bearstearns.com/
is a holding company, which through its broker-dealer and
international bank subsidiaries, Bear, Stearns & Co. Inc. (Bear
Stearns), Bear, Stearns Securities Corp. (BSSC), Bear, Stearns
International Limited (BSIL); Bear Stearns Bank plc (BSB); Bear
Stearns Global Lending Limited; Custodial Trust Company; Bear
Stearns Financial Products Inc.; Bear Stearns Capital Markets
Inc.; Bear Stearns Credit Products Inc.; Bear Stearns Forex
Inc.; EMC Mortgage Corporation; Bear Stearns Commercial
Mortgage, Inc.; Bear Stearns Investment Products Inc. and Bear
Energy L.P is an investment banking, securities and derivatives
trading, clearance and brokerage firm serving corporations,
governments, institutional and individual investors globally.
BEAR WAGNER: Still Faces NYSE Floor Specialist Activities Suit
--------------------------------------------------------------
Bear Wagner Specialists LLC, a subsidiary of the The Bear
Stearns Companies, Inc., along with several others, continue to
face a consolidated class action with the U.S. District Court
for the Southern District of New York, alleging violations of
the federal securities laws in connection with NYSE floor
specialist activities.
Beginning in October 2003, several lawsuits, brought on behalf
of investors, were filed in connection with Bear Wagner
activities. These actions seek unspecified compensatory
damages, restitution, and disgorgement on behalf of purchasers
and sellers of unspecified securities between Oct. 17, 1998, and
Oct. 15, 2003.
Bear Wagner, and Bear Stearns are also among the defendants in a
purported class action filed in December 2003 in California
Superior Court, Los Angeles County alleging violation of
California law in connection with the same conduct.
This case was transferred to the U.S. District Court for the
Southern District of New York.
The district court consolidated these purported class actions
under the caption, "In re NYSE Specialists Securities
Litigation, No. 03 Civ. 8264 (RWS)."
On Sept. 15, 2004, a consolidated amended complaint was filed in
this action on behalf of a putative class of persons who held
American Depository Receipts between Oct. 18, 2001, and Oct. 15,
2003.
Bear Stearns reported no development in the matter in its
Jan. 29, 2008 Form 10-K Filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Nov. 30, 2007.
The suit is "In Re: NYSE Specialists Securities Litigation, Case
No. 1:03-cv-08264-RWS," filed with the U.S. District Court for
the Southern District of New York, Judge Robert W. Sweet
presiding.
Representing the plaintiffs are:
Mario Alba, Jr., Esq.
Lerach, Coughlin, Stoia, Geller, Rudman & Robbins, LLP
655 West Broadway, Suite 1900
San Diego, CA 92101
Phone: 619-231-7423
Fax: 631-367-1173
e-mail: malba@lerachlaw.com
Christopher Lovell, Esq.
Lovell Stewart Halebian LLP
500 Fifth Avenue
New York, NY 10110
Phone: (212) 608-1900
Fax: (212) 719-4677
e-mail: LSHLLP@LSHLLP.COM
Stephen D. Oestreich, Esq.
Entwistle & Cappucci, L.L.P.
299 Park Avenue
New York, NY 10171
Phone: (212) 894-7200
- and -
Curtis V. Trinko, Esq.
Law Offices of Curtis V. Trinko, L.L.P.
16 West 46th Street, 7th Floor
New York, NY 10036
Phone: (212) 490-9550
Representing the defendants are:
E. Michael Bradley, Esq.
John E. Lavelle, Esq.
38 Willis Avenue
Mineola, NY 11501
Phone: (212) 326-3863
Fax: (212) 755-7306
e-mail: embradley@jonesday.com;
Deborah S. Burstein, Esq.
King & Spalding, L.L.P.
1185 Avenue of the Americas
New York, NY 10036
Phone: (212) 556-2347
Fax: (212) 556-2222
- and -
Andrew C. Curley, Esq.
Wolf, Block, Schorr and Solis-Cohen, L.L.P.
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
Phone: 215-977-2000
Telecopier: 215-977-2334
Web site: http://www.wolfblock.com
BRIDGESTONE FIRESTONE: Continues to Face Liberian Workers' Suit
---------------------------------------------------------------
Bridgestone Firestone North American Tire LLC continues to face
a purported class action with the U.S. District Court for the
Southern District of Indiana over its treatment of Liberian
workers at it rubber plantation.
The suit was filed by the International Labor Rights Forum, a
Washington-based advocacy organization, on April 14, 2006,
accusing defendants of committing human rights abuses at its
plantation in Liberia.
It specifically names as defendants:
-- Bridgestone Firestone;
-- BFS Diversified Products, LLC;
-- Bridgestone Americas Holding, Inc.;
-- Firestone Natural Rubber Co.;
-- Bridgestone Firestone Corporate Does 1-10; and
-- Individual Bridgestone Firestone Does 11-20.
The ILRF, a Washington-based advocacy group, filed the class
action over what it calls "a gulag of misery" on the 200-square-
mile estate in Harbel, which is believed to be the largest
rubber plantation in the world (Class Action Reporter, Dec. 28,
2006).
The suit alleges that the defendants' Liberian employees are
overworked, underpaid, exposed to pesticides and other hazardous
chemicals, and risk injury because of inadequate safety
measures, such as a lack of protective gear to guard against
latex dripping into their eyes.
ILRF also describes harsh living conditions for the workers,
known as "tappers," and their families. The group says that
much of the housing is decades old with extended families
sharing one-room shacks without electricity or toilets.
On the other hand, managers live nearby on a comfortable
compound featuring a golf course, according to the suit.
The suit is "ROE I et al v. Bridgestone Corporation et al., Case
No. 1:06-cv-00627-DFH-JMS," filed with the U.S. District Court
for the Southern District of Indiana, Judge David Frank Hamilton
presiding.
Representing the plaintiffs are:
Terrence P. Collingsworth, Esq.
International Rights Advocates
218 D St SE, 3rd Floor
Washington, DC 20003
Phone: 202-470-1654
Fax: 206-338-2674
e-mail: tc@ilrf.org
- and -
Paul L. Hoffman, Esq.
Schonbrun Desimone Seplow Harris & Hoffman
723 Ocean Front Walk, Suite 100
Venice, CA 90291
Phone: 310-396-0731
Representing the defendants are:
David J. DiMeglio, Esq.
Jones Day
555 West 5th Street, 50th Floor
Los Angeles, CA 90071
Phone: 213-489-3939
- and -
Mark J. R. Merkle, Esq.
Krieg Devault LLP
One Indiana Square, Suite 2800
Indianapolis, IN 46204
Phone: (317)238-6219
Fax: (317)636-1507
e-mail: mmerkle@kdlegal.com
CARIBOU COFFEE: Settles Minn. Labor Violations Lawsuit For $2.7M
----------------------------------------------------------------
Caribou Coffee Co. Inc. agreed to pay over $2.7 million to
settle a class action with the U.S. District Court for the
District of Minnesota that former and current employees who are
alleging that Caribou Coffee violated the Minnesota Fair Labor
Standards Act, the federal FLSA, and state common law.
Settlement
The company said in an SEC filing that it would settle the suit,
by agreeing to pay $2.7 million, plus its share of payroll
taxes, according to a report by The Dayton Business Journal.
It stated in the SEC filing that it if the settlement is
approved by the courts, it would pay the settlement out in two
installments of $1.75 million by March 15, 2007, and $950,000 by
Dec. 29, 2007 along with interest.
The company also added that payments will be made to all
participating class members and all attorney's fees would be
paid from the $2.7 million.
Case Background
The suit was filed on July 26, 2005 by three former employees of
the company in the State of Minnesota District Court for
Hennepin County. It is seeking monetary and equitable relief
(Class Action Reporter, April 10, 2007).
The suit primarily alleges that the company misclassified its
retail coffeehouse managers and managers in training as exempt
from the overtime provisions of the Minnesota FLSA and the
federal FLSA and that these managers and managers in training
are therefore entitled to overtime compensation for each week in
which they worked more than 40 hours from May 2002 to the
present with respect to the claims under the federal FLSA and
for weeks in which they worked more than 48 hours from May 2003
to the present with respect to the claims under the Minnesota
FLSA.
The plaintiffs are seeking to represent themselves and all of
the company's allegedly similarly situated current and former
(within the foregoing periods of time) coffeehouse managers.
In addition, the plaintiffs are also seeking payment of an
unspecified amount of allegedly owed and unpaid overtime
compensation, liquidated damages, prejudgment interest, civil
penalties under the Minnesota FLSA, a full accounting of the
amount allegedly owed to the putative class, temporary and
injunctive relief, attorney's fees and costs.
On Aug. 15, 2005, the company removed the lawsuit to the U.S.
District for the District of Minnesota and filed its answer to
the complaint.
On Oct. 31, 2005, the court granted the plaintiffs' motion to
conditionally certify an alleged nationwide class of current and
former coffeehouse managers since May 25, 2002 for purposes of
pursuing the plaintiffs' claim that the coffeehouse managers
were and are misclassified as exempt under the FSLA.
By order dated Dec. 21, 2005, the court approved a notice to be
sent to all members of the conditionally certified class.
The suit is "Nerland et al v. Caribou Coffee Co., Inc., Case No.
05-cv-01847-PJS-JJG," filed in the U.S. District Court for the
District of Minnesota, Judge Patrick J. Schiltz.
Representing plaintiffs are:
Jonathan W. Cuneo, Esq.
Cuneo Gilbert & LaDuca, LLP
507 C. St., NE
Washington, DC 20002
Phone: 202-789-3960
e-mail: jonc@cuneolaw.com
Clayton D. Halunen, Esq.
Halunen & Associates
220 South 6th Street, Ste. 2000
Minneapolis, MN 55402
Phone: (612) 605-4098
Fax: (612) 605-4099
e-mail: halunen@halunenlaw.com
- and -
Charles N. Nauen, Esq.
Lockridge Grindal Nauen, P.L.L.P.
100 Washington Avenue South, Suite 2200
Minneapolis, MN 55401
Phone: 612-339-6900
Fax: 612-339-0981
e-mail: cnnauen@locklaw.com
Representing defendants are:
Peter N. Hall, Esq.
King & Spalding, LLP
191 Peachtree St.
Atlanta, GA 30303-1763
Phone: 404-572-4698
e-mail: phall@kslaw.com
- and -
Joseph M. Sokolowski, Esq.
Parsinen Kaplan Rosberg & Gotlieb
100 S. 5th St., Ste. 1100
Minneapolis, MN 55402-1298
Phone: 612-333-2111
Fax: 612-333-6798
e-mail: jsokolowski@parlaw.com
CITIZENSHIP & IMMIGRATION: Faces US$702MM Suit for Overcharging
---------------------------------------------------------------
Citizenship and Immigration Canada has been served a
CDN$702-million class-action lawsuit for overcharging on
immigration application fees, thestar.com reports.
The lawsuit, the report relates, will cover those who, during
the period April 1, 1994, to March 31, 2004, paid a fee or
charge to Canada Immigration on any of the 43 application types
from visitor status extension to permanent resident applications
and employment authorizations.
According to thestar, the lawsuit was filed by Alan Hinton and
Irene Popapova of Coquitlam, B.C., under the Federal Financial
Administration Act, which provides that user fees may not exceed
the cost of providing the public service or the use of the
facility.
Court documents, thestar notes, stated that 2 million to
3 million people paid application fees for some 9 million to 10
million visas, authorizations or permits to Canada during the
period. The fees range from CDN$75 for a temporary resident
visa to CDN$1,050 for a permanent resident visa.
Ottawa, according to thestar, had already appealed an earlier
certification decision, but the class action continues until the
Federal Court of Appeal rules otherwise.
The agency has until Feb. 18 to file a statement of defense, the
report says.
COMMONWEALTH LAND: "Alberton" Insurance Rates Suit Certified
------------------------------------------------------------
Judge Eduardo C. Robreno of the U.S. District Court for the
Eastern District of Pennsylvania certified a consumer class
action suit filed by A. D. Alberton on July 24, 2006, against
Commonwealth Land Title Insurance Co., a wholly owned subsidiary
of LandAmerica Financial Group, Shannon P. Duffy of the The
Legal Intelligencer reports.
The suit alleges that Commonwealth charged rates for title
insurance in excess of statutorily mandated rates and failed to
disclose to consumers that they were entitled to reduced title
insurance premiums and seeks. The suit sought to certify a
class on behalf of all consumers who paid premiums for the
purchase of title insurance on Pennsylvania properties from
Commonwealth at any time during the year 2000 until August 2005
and qualified for a discounted refinance or reissue rate
discount and did not receive such discount (Class Action
Reporter, Aug. 13, 2007).
The plaintiffs asserted these claims:
1. breach of express contract,
2. breach of implied contract,
3. money had and received,
4. violation of the Pennsylvania Unfair Trade Practices and
Consumer Protection Law,
5. fraudulent misrepresentation,
6. negligent misrepresentation,
7. negligent supervision, accounting and
8. unjust enrichment.
The plaintiffs demanded an unspecified amount of compensatory
damages, declaratory relief, triple damages, restitution, pre-
judgment and post-judgment interest and expert fees, plus
attorneys fees and costs.
The Legal Intelligencer explains that under Pennsylvania law,
title insurance rates are governed by a statute that calls for a
10% "reissue rate" discount whenever a property owner purchases
title insurance within 10 years of obtaining a policy issued on
the same property and a 20% "refinance rate" discount if the
property owner applies for title insurance within three years of
obtaining a previous policy.
The plaintiffs' lawyers, led by attorney Steven A. Schwartz,
Esq., of Chimicles & Tikellis in Haverford, Pa., argued that
property owners are entitled to the discounted rates whenever
the title search, which the insurer is required by law to
conduct, reveals events in the chain of title that "would lead
any reasonable title agent to conclude that a prior title policy
was issued."
Defense attorneys Samuel W. Braver and Stanley J. Parker of
Buchanan Ingersoll & Rooney's Pittsburgh office argued that the
law imposes no such duty, The Legal Intelligencer relates.
Instead, the defense argued, the law requires the insurance
purchaser to provide evidence of the prior insurance policy
rather than relying on the insurer to uncover the policy in its
title search.
The Legal Intelligencer says that in his recent decision, Judge
Robreno found that:
-- the suit satisfies the numerosity requirement since the
plaintiffs estimate that the class includes tens or even
hundreds of thousands of individuals and that Commonwealth
Land Title has estimated that it issued an average of
40,000 policies per year in Pennsylvania;
-- the class satisfies the commonality requirement, because
all of the class members share the factual question of
whether a past mortgage necessarily meant a past purchase
of title insurance;
-- the lead plaintiff is also typical of the class, because
Mr. Alberton's claims arise from the "identical practice"
of charging a nondiscounted rate unless the purchaser
presented evidence of previous title insurance and
regardless of whether the title search revealed a prior
mortgage or refinancing. Judge Robreno rejected the
argument that the lead plaintiff cannot be considered
typical because he purchased his title insurance from an
agent and not from Commonwealth Land Title directly. He
said that whether or not Commonwealth is responsible for
the actions of its agents is itself a question raised by
the claims of many class members and that by asserting a
claim of negligent supervision, the plaintiffs had imputed
responsibility for the agents' actions to the insurer;
-- the lead plaintiff could not represent the entire class
because the statutory language for the reissue discount
and the refinance discount are markedly different. For
the refinance discount, the statute says the rate will be
the discounted rate, while the reissue rate applies "when
evidence of the prior policy is produced." As a result,
Judge Robreno found that Commonwealth Land Title could be
found to have violated the first section but not the
second;
-- the conflict did not defeat typicality and that the proper
cure was to establish two subclasses, conditioned on the
plaintiffs adding a representative for the reissue
discount class.
-- all of the plaintiffs' claims were amenable to class
treatment. The claims for unjust enrichment and money had
and received could be handled on a classwide basis,
because neither requires inquiry into the individual
circumstances of a transaction, the judge ruled.
-- although Pennsylvania's consumer protection law at one
time required plaintiffs to prove all the elements of
common law fraud, a 1996 amendment made to the law made it
"less restrictive" and plaintiffs must now show only
conduct that is "deceptive to the ordinary consumer."
Judge Robreno said that "Individualized proof of
justifiable reliance is no longer required to succeed on a
claim under the UTPCPL. Instead, a policy of not applying
published insurance rates, if proven, would satisfy the
requirement of a deceptive practice under the UTPCPL;" and
-- the misrepresentation claims may also be amenable to class
treatment because individualized proof of reliance is
excused for such claims where the defendant has a
fiduciary relationship with the plaintiffs.
The plaintiffs' lawyers had earlier argued that the relationship
between the insurer and the class members excuses the need for
individualized proof of reliance. To this, Judge Robreno
tentatively agreed, but cautioned that if it were later
determined that proving a special relationship would require an
examination of each purchaser's relationship with Commonwealth
Land Title or that no such special relationship existed,
"individualized proof of reliance will be required and the class
will be de-certified as to the fraudulent and negligent
misrepresentation claims."
According to the report, Judje Robreno also rejected the
defense's argument that a class action would be unmanageable
because an individual review of each file would be necessary to
determine whether an insurance purchaser is even a class member
and also to compute individual damages awards. He said that
under plaintiff's theory, this will be a virtually automatic
process that looks only at whether the title search showed a
prior mortgage or refinancing and whether the customer received
a discounted rate.
The suit is "Alberton v. Commonwealth Land Title Insurance
Company, Case No. 2:06-cv-03755-ER," filed with the U.S.
District Court for the Eastern District of Pennsylvania under
Judge Eduardo C. Robreno.
Representing the plaintiffs is:
Joseph Goldberg, Esq.
Freedman Boyd Daniels Hollander & Goldberg PA
20 First Plaza Suite 700,
Albuquerque, NM 87102
Phone: 505-842-9960
Fax: 505-842-0761
e-mail: jg@fbdlaw.com
Representing the defendants is:
Samuel W. Braver, Esq.
Buchanan Ingersoll PC
301 Grant St., 20th Fl.
Pittsburgh, PA 15219-1410
Phone: 412-562-8939
e-mail: braversw@bipc.com
FIDELITY NATIONAL: Title Insurance Suit in Ohio Court Certified
---------------------------------------------------------------
Judge James Carr of the U.S. District Court of Ohio granted
class-action status to a lawsuit filed against Jacksonville,
Florida-based Fidelity National Title Insurance Co. by an Ohio
couple for keeping them in the dark regarding discounts in their
title insurance, The Blade reports.
Jerry and Dianne Randleman paid full when they refinanced their
Huron County home in 2004, but it turned out that under rates
filed by their insurer with the Ohio Insurance Department in
Columbus, they were entitled to a discount (Class Action
Reporter, Feb. 28, 2006).
The Randlemans should have availed of the discount because their
house was already covered by a title insurance policy purchased
when the couple first closed on their New London home, The Blade
notes.
The couple's lawsuit alleges that Fidelity National knowingly
and routinely overcharged its customers.
In a written opinion, Judge Carr said, "The interests of
fairness, efficiency, and judicial economy are all best served
by a class action. Certification in this case is important
because each individual class member's claim may be small,
resulting in a diminished incentive to sue to enforce his or her
rights."
No trial date has been set, but a pre-trail conference is
scheduled for Feb. 21, the report says.
The suit is "Randleman et al v. Fidelity National Title
Insurance Company, Case No. 3:06-cv-07049-JGC," filed with the
U.S. District Court of Ohio, Judge James G. Carr, presiding.
Representing the plaintiffs are:
Mark R. Koberna, Esq.
Sonkin & Koberna, Esq.
Ste. 400, 3401 Enterprise Parkway
Cleveland, OH 44122
Phone: 216-514-8300
Fax: 216-514-4467
e-mail: mark@sonkinkoberna.com
- and -
David D. Yeagley, Esq.
Ulmer & Berne
1100 Skylight Office Tower
1660 West Second Street
Cleveland, OH 44113-1448
Phone: 216-583-7216
Fax: 216-583-7217
e-mail: dyeagley@ulmer.com
Representing the defendant are:
Michael C. Cohan, Esq.
Alexander E. Goetsch, Esq.
Cavitch, Familo, Durkin & Frutkin
Fourteenth Floor
The East Ohio Building
1717 East Ninth Street
Cleveland, OH 44114
Phone: 216-621-7860
Fax: 216-621-3415
e-mail: mcohan@cfdf.com
agoetsch@cfdf.com
FORD MOTOR: Chester County EMS Joins Lawsuit as Plaintiff
---------------------------------------------------------
Chester County Emergency Medical Service joined a national class
action lawsuit against Ford Motor Company over an ambulance that
frequently breaks down, WCNC.com says.
Maria Kotula of WCNC writes that Britt Lineberger, assistant EMS
director, said they have had problems since the Ford truck came
in, referring to one of their ambulances.
WCNC relates that although patients have done fine despite the
ambulance failing, Mr. Lineberger worries about how much worse
it could have been.
Chester EMS transports patients to hospitals in Rock Hill,
Lancaster and Columbia, the report explains.
According to WCNC, Mr. Lineberger stated that "Ford changed the
engine from a 7.3 power stroke to the 6.0, and when they did
that the 6.0 engine is the problem."
Mr. Lineberger told WCNC that he hopes to recoup some money that
the county has spent in maintenance and tows. However, he said,
it would be better if Ford could get the county a reliable
engine.
WCNC notes that Chester County EMS has seven ambulances, two
having a Ford engine.
GLASS MANUFACTURERS: Burhans Glass Files Suit Over Price-Fixing
---------------------------------------------------------------
Burhans Glass Co. Inc. of King of Prussia, Pa., has commenced a
class-action suit with the U.S. District Court for the Eastern
District of Michigan on Jan. 29, 2008, against several major
glass manufacturers, including:
-- Guardian Industries,
-- PPG Industries,
-- Pilkington North America,
-- Saint-Gobain Corp.,
-- Asahi Glass Co., and
-- AGC Flat Glass North America
alleging anti-trust violations, GlassBYTES reports.
GlassGYTES relates that Burhans' complaint specifically alleges
that as early as October 2000 until present "defendants and
their co-conspirators engaged in a combination and conspiracy in
unreasonable restraint of the aforesaid interstate trade and
commerce in violation of Section 1 of the Sherman Act."
According to the report, the complaint further asserts that the
glass manufacturers conspired "to fix, raise, maintain and
stabilize the price of construction flat glass throughout the
United States" and "to fix, raise, maintain and stabilize the
terms and conditions of sale of construction flat glass in the
United States."
GlassBYTES notes that Burhans cites energy surcharges instated
shortly after a meeting of the Flat Glass Manufacturing Division
of the Glass Association of North America in 2000 and diesel
fuel surcharges instated in 2005.
The plaintiff is represented by Elwood S. Simon & Associates in
Birmingham, Mich., and Meredith Cohen Greenfogel & Skirnick
P.C., with offices in Philadelphia and New York.
INDIAN TRUST: Interior Can't Account for Owed Money, Judge Says
---------------------------------------------------------------
Judge James Robertson ruled Wednesday last week that the
Interior Department is unable to complete an accounting of
billions of dollars owed to Indian landholders across the United
States, FederalTimes.com reports.
Federal Times notes that Judge Robertson's 165-page decision on
a lawsuit alleging that Interior officials mismanaged Indian
trust funds stated that "[i]t is now clear that completion of
the required accounting is an impossible task."
According to the Detroit Free Press, the federal lawsuit alleged
mismanagement of more than $100 billion in oil, gas, timber and
other royalties held in trust from Indian lands dating to 1887.
SeattlePI.com further cites Judge Robertson as saying that the
Interior Department has unreasonably delayed an accounting of
how many billions it owes. He also noted considerable effort by
Interior, and blamed the Congress in part for failing to provide
adequate funding for the difficult research.
Case Background
SeattlePI recounts that the lawsuit began in 1996 with a filing
by Elouise Cobell, a member of the Blackfeet Tribe of Montana.
The 11-year-old class action, titled "Cobell v. Kempthorne," is
based on the government's admitted mismanagement of what
Congress has called a "Broken Trust" that was established in
1887. The Broken Trust was to handle the proceeds from the
government-arranged leasing of 11 million acres of Indian lands,
mostly in the West. As the papers presented to Judge Robertson
noted, the trust was mismanaged by the government almost from
its inception. Despite repeated orders from Congress and the
Courts, the government is still years away from its long-
promised accounting of the accounts, (Class Action Reporter
Jan. 8, 2008).
The government, the Associated Press recounts, had proposed in
March 2007 to pay $7 billion partly to settle the lawsuit.
However, the proposal was rejected by the plaintiffs, who
estimate the government's liability could exceed $100 billion.
The Interior Department estimates that it has spent $127 million
on its accounting in the past five years, AP adds.
Hearing to be Scheduled
Judge Robertson, however, clarified that the resolution of the
11-year lawsuit is not hopeless, Federal Times relates.
Judge Robertson said he will schedule a hearing this month to
discuss a way to solve the problem, SeattlePI says.
Judge Robertson, AP points out, took over the case after Judge
Royce Lamberth was removed by the U.S. Court of Appeals for the
District of Columbia Circuit, which said he had lost his
objectivity. The government had asked that Judge Lamberth be
replaced after the judge lambasted the Interior Department.
Interior Won't Comment
Federal Times notes that Tina Kreisher, a spokeswoman for the
Interior Department, said that department officials were
reviewing the ruling and would not comment before they could
carefully examine it.
Federal Times recalls that Jim Cason, associate deputy Interior
secretary, has previously stated that systemic problems do not
persist throughout the department and that staff has worked
diligently to do an accounting of the trust lands.
The agency manages more than $300 million a year in royalties
and leases for 300,000 Indians nationally, Federal Times
relates.
The suit is "Elouise Pepion Cobell, et al. v. Dirk Kempthorne,
Secretary of the Interior, et al., Case No. 1:96-cv-01285-JR,"
filed in the U.S. District Court for the District of Columbia
under Judge James Robertson.
Representing the plaintiffs are:
Mark Kester Brown, Esq.
607 14th Street, NW Washington, DC
20005-2000
Phone: (775) 542-4938
Fax: 202-318-2372
e-mail: mkesterbrown@attglobal.net
Dennis M. Gingold, Esq.
607 14th Street, NW 9th Floor, Washington, DC
20005
Phone: (202) 824-1448
Fax: 202-318-2372
e-mail: dennismgingold@aol.com
Richard A. Guest, Esq.
Keith M. Harper, Esq.
Native American Rights Fund
1712 N Street, NW Washington, DC 20036-2976
Phone: (202) 785-4166
Fax: 202-822-0068
e-mail: richardg@narf.org
harper@narf.org
Elliott H. Levitas, Esq.
Kilpatrick Stockton, LLP
607 14th Street, NW Suite 900, Washington, DC 20005
Phone: (202) 508-5800
Fax: 202-508-5858
e-mail: elevitas@kilpatrickstockton.com
Representing the defendants are:
Robert E. Kirschman, Jr., Esq.
Sandra Peavler Spooner, Esq.
U.S. Department of Justice
1100 L Street, NW Suite 10008
Washington, D.C. 20005
Phone: (202) 616-0328
e-mail: robert.kirschman@usdoj.gov
sandra.spooner@usdoj.gov
IOWA OFFICIALS: Deny Discrimination Allegations in Lawsuit
----------------------------------------------------------
Iowa State officials have denied all allegations of racial
discrimination in a lawsuit commenced by black persons with the
Polk County District Court on October 29, 2007, Des Moines
Register reports.
The lawsuit alleges Iowa officials of being biased in the
state's hiring practices, the report says. The lawsuit seeks to
represent any black person who has faced state hiring
discrimination.
The petition names 14 plaintiffs:
1. Beverly Clark
2. Linda Pippen
3. Violet LeFlore
4. Sandra Brown
5. Carter LeFlore
6. Ylonda Shook
7. Shane Shook
8. Dorothea Polk
9. Alex Walker
10. Sandy Henderson
11. Theresa A. Jefferson
12. Robert Simmons
13. Denise Foley-Parker
14. Steve Bowman.
The report notes that five more black Iowans have come forward
since the petition to claim that they were also discriminated
against.
According to Des Moines Register, the plaintiffs contended that
they each had a resume that was more than sufficient for the job
they applied for, yet were denied an interview, or were given an
interview but did not get the job. Some of the plaintiffs said
that they were fired or not promoted because they are black.
Court documents received by the plaintiffs' attorneys last week
stated that the officials argued that the workers failed to
demonstrate that the state uses "a particular practice" that
causes racial discrimination, Des Moines Register relates. The
practices identified in the lawsuit were "job-related and
consistent with business necessity."
The state officials also stated in their response that some of
the 14 plaintiffs' claims were filed too late. Des Moines
Register points out that complaints under Iowa civil rights law
must be filed within 180 days of the alleged discriminatory act,
and complaints under the federal statute must be filed in 300
days.
Moreover, defense lawyers asserted that any claim by Plaintiff
Beverly Clark is barred because the state already paid her
$247,000 after she alleged that she was passed over for
promotions at Iowa Workforce Development 56 times in four years.
That settlement "unconditionally and forever" released the state
from any future liability, the state's response said.
However, civil rights attorney Thomas Newkirk, who is
representing the plaintiffs, countered that Ms. Clark is not
seeking damages for discrimination claims she already resolved
in 2005, but that "Ms. Clark represents African-Americans who
have had continued problems getting interviews consistent with
evidence of racial discrimination."
"The state clearly understands that Ms. Clark's settlement
should have placed it on notice of the statewide discrimination
way back in 2005. One major focus of this class action is to
put a stop to future discrimination, not just seek compensation
for past harm," Mr. Newkirk avers.
The state officials further contended that some of the
plaintiffs failed to take or did not complete the proper
administrative steps necessary before filing a lawsuit, the
report says.
The plaintiffs' attorney can be reached at:
Thomas Newkirk, Esq.
Fiedler & Newkirk P.L.C.
2900 100th Street, Suite 209
Urbandale, Iowa 50322
Phone: (515) 254-1999
Fax: (515) 254-9923
e-mail: tnewkirk@fiedlernewkirk.com
KIDS II: Recalls Soothing Seascape Crib Toys Due to Choking Risk
----------------------------------------------------------------
Kids II Inc., of Alpharetta, Ga., in cooperation with the U.S.
Consumer Product Safety Commission, is recalling about 15,000
Baby Einstein Baby Neptune soothing seascape crib toys.
The company said that the anchors holding the straps to the back
of the turtle can detach, posing a choking hazard to young
children.
Kids II has received 23 reports of anchors breaking. No
injuries have been reported.
The Baby Einstein Baby Neptune Soothing Seascape crib toy is a
plastic molded turtle with a toy aquarium body that has woven
fabric straps that attach to the side rails of a crib. The toy
turtle has a stuffed fabric head and feet. Model number 30858 is
printed on the label on the leg of the turtle. Only crib toys
manufactured in October 2007 with date code BJ7 printed on the
back of the battery compartment, are included in the recall.
These recalled crib toys were manufactured in China and were
being sold at discount department stores and on-line retailers
nationwide from November 2007 through January 2008 for between
$25 and $30.
Pictures of the recalled crib toys are found at:
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08176a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08176b.jpg
Consumers are advised to immediately stop using the recalled
crib toys and contact Kids II to receive a free replacement toy.
For additional information, contact Kids II toll-free at (866)
203-6788 between 8:00 a.m. And 5:00 p.m. ET Monday through
Friday or visit the firm's Web site: http://www.kidsii.com/
MIAMI: Car Owners Seek $12 Million in Impound Fees Refund
---------------------------------------------------------
Miami is facing a purported class action over its 10-year
vehicle impound program, which allows police to confiscate cars
owned by individuals caught soliciting a prostitute or buying
drugs from a street dealer, Local10.com reports.
The report says that Miami may have to refund some $12 million
in impound fees collected over the past decade after the 3rd
District Court of Appeals last week found the program
unconstitutional.
Thousands of people who had their cars towed, including some who
were found not guilty, joined hands and initiated a class-action
lawsuit against the city, asserting that the impound program was
unfair, Rad Berky writes for Local 10.
The report cites one unnamed plaintiff as recalling that she had
no money and had to borrow to get her car back. The said
plaintiff was not the one driving her car the night it was
seized. The car was driven by her son, who was arrested and
later found not guilty of soliciting a prostitute. However the
car owner could no longer get back the money that she paid to
get her car back.
According to Local 10, the appeals court found it unfair that
victims were being punished.
The report cites Ron Guralnick, Esq., the plaintiffs'
representative in the class-action suit, as saying that Miami
may now have to pay back the $12 million in fees collected and
maybe more in court and attorney's fees, unless an out-of-court
settlement is reached by the parties.
Miami City Manager Pete Hernandez told Local 10 that there would
be no out-of-court settlement and that the city will try a legal
appeal.
"Financially, the city is not in any position to pay that
amount. Our city attorneys feel we have a defensible position,"
Local 10 quotes Mr. Hernandez.
The plaintiffs' are represented by:
Ronald S. Guralnick, Esq.
Ronald S. Guralnick, P.A.
550 Brickell Ave., Ste. 1
Miami, FL 33133-4741
Phone: (305) 358-6001
Fax: (305) 358-5507
MICH. DEP'T OF CORRECTIONS: Prisoners Get US$10MM for Sex Abuse
---------------------------------------------------------------
Ten female inmates at the Michigan Department of Corrections who
claimed that male guards raped and sexually abused them in a
state prison were awarded $15.5 million on Feb. 1, 2008, the
Associated Press reports.
According to The Ann Arbor News, before a Washtenaw County jury
announced its verdict on Friday, they asked if they could read a
letter. It was a letter of apology on behalf of Michigan
citizens to 10 current and former female inmates who said that
they suffered years of abuse, humiliation, harassment and sexual
assaults at the hands of male guards.
Ann Arbor News relates that including interest, the jury award
could reach $30 million in the 12-year-old lawsuit against the
Department of Corrections, a former MDOC director and a retired
warden.
AP says that the jury's decision was unanimous. The jurors,
according to USA Today, found that there was a sexually hostile
atmosphere at the prison and the state did not act to protect
the prisoners.
The lawsuit was a representative sample of a class of about 500
current and former inmates in Michigan women's prisons, Ann
Arbor News says. Two similar lawsuits are pending in state
court, and another was filed in federal court.
According to USA Today, seven of the women are still prisoners
at the Robert Scott Correctional Facility in Plymouth, one of
Michigan's three female prisons, and three have already been
released.
Ann Arbor News writes that the attorneys for the plaintiffs had
asked for an award of up to $14.6 million for the 10 women
inmates, based on factors such as their age when the alleged
abuse began, the frequency, and whether sexual penetration was
involved.
USA Today writes that the verdicts in favor of the plaintiffs
ranged from $335,000 to $3.6 million.
The Department of Corrections plans to appeal its case, AP
notes.
Ann Arbor News cites Russ Marlan, spokesman for the Department
of Corrections, as saying that he was not surprised by the
jury's verdict. He contended that Judge Timothy Connors
prevented the state from putting on its defense based on various
rulings during the three-week trial.
Mr. Marlan says that "[t]he case was riddled with errors, and we
believe it will be reversed on appeal."
None of the corrections workers accused of abuse are still
working for the department and the state has made changes
including no longer allowing male officers to escort female
prisoners to medical exams, AP cites Mr. Marlan as saying. He
had argued that the women did not complain until many years
later.
AP recounts that in recent years, male guards have been moved
out of female prisons in Michigan as required by an agreement
reached with the U.S. Justice Department in 1999, which came
after the state was sued based on a federal investigation into
sexual abuse complaints.
The plaintiffs' representative, Deborah LaBelle, had earlier
explained that state attorneys had earlier called the women
liars, AP notes. Moreover, according to Ann Arbor News, the
women admitted that most of them did not report the abuse
because they had first thought there was no point and that
reporting it only placed them at great risk.
The suit is captioned "Jane Doe v. Michigan Department of
Corrections, et al." filed with the Circuit Court, Washtenaw
County, Michigan. Judge Timothy Connors presiding.
Representing the Plaintiffs' is:
Deborah A. LaBelle, Esq.
Law Offices of Deborah LaBelle
Suite 300, 221 N Main St.
Ann Arbor, MI 48104-1412
Phone: (734) 996-5620
Fax: (734) 996-5620
(313) 961-5495
Representing the Defendants is:
Allan J. Soros, Esq.
Eaton & Ingham Cos.
Lansing, Michigan
MULCAHY INC: Faces Minn. Suit Over Exploitation of Latino Crews
---------------------------------------------------------------
Mulcahy, Inc., is facing a class action with the U.S. District
Court for the District of Minnesota alleging labor violations.
The suit, "Doe I et al v. Mulcahy, Inc. et al., Case No. 0:08-
cv-00306-DWF-SRN," was filed on Feb. 4, 2008, by eight
unidentified Latinos, who are alleging exploitation and labor
violations by Mulcahy and several other defendants, who are
working on the Mall of America, and several Minneapolis
condominium projects.
Aside from Mulcahy, other defendants named in the suit, who are
all represented by the law firm of Frederikson & Byron, include:
-- Mulcahy Development,
-- Mulcahy Family Limited Liability Limited Partnership,
and
-- Gary T. Mulcahy Sr.
The plaintiffs -- identified only as John Does -- are
represented by The Law Firm of Miller O'Brien Cummins, which is
currently seeking court approval to use pseudonyms for its
clients, since they fear retaliation.
The plaintiffs claim that they were among a class of Latino
workers who were paid below minimum wage, required to work
overtime at a substandard rate, denied economic and health
benefits, and denied work breaks.
They also claimed that "threats of severe bodily harm and other
reprisals have already been threatened or occurred," according
to a report by Dan Browning of The Minneapolis Star Tribune.
According to Bill O'Brien, Esq., a partner at Miller O'Brien
Cummins, the alleged abuse has been going on for at least a
year. He pointed out that the crews, which are being exploited
are exclusively Latino crews.
Mr. O'Brien explains that the defendants are hiring Latino
bosses, who in turn recruit in the Latino community. Those
recruited are formed into what Mr. O'Brien term as a "shadow
work force," which works alongside of the defendants non-Latino
crews.
Mr. O'Brien, who estimates that there could be 100 or more
plaintiffs in the class, alleges that the Latinos are paid
generally a day rate, generally cash, and a fraction of what the
others are paid.
The suit is "Doe I et al v. Mulcahy, Inc. et al., Case No. 0:08-
cv-00306-DWF-SRN," filed in the U.S. District Court for the
District of Minnesota, Judge Donovan W. Frank presiding.
Representing the plaintiffs are:
Maurice W O'Brien, Esq.
Miller O'Brien
120 S. 6th St., Ste 2400
Minneapolis, MN 55402
Phone: 612-333-5831
Fax: 612-342-2613
e-mail: bobrien@m-o-c-law.com
NEW MEXICO: Alamogordo, Others Face Litigation Over 2006 Floods
---------------------------------------------------------------
The City of Alamogordo, the Otero County Commission, Bobby
Martinez, and Molzen-Corbin & Associates P.A. face a class
action with the 12th Judicial Court over the city's alleged
failure to properly prepare for floods that occurred in June,
July, and August of 2006, Karl Anderson of The Alamogordo Daily
News reports.
The suit -- filed by by 56 plaintiffs -- states "This class
action suit arises from the damages to property received by the
public and plaintiffs. . .causing substantial damage to
plaintiffs and the class they represent, which damage will on
information and belief recur again due to the defendants actions
and inactions."
The plaintiffs are being represented by attorneys Mark Reeves,
Esq., of Reeves & Associates P.C., of Alamogordo, and Steven K.
Sanders, Esq., of Steven K. Sanders & Associates LLC, of
Albuquerque.
They are requesting payment of damages against all defendants
"who caused or contributed to the nuisance," defined as "a
trespass of rock, sand, aggregate and surface water upon
plaintiffs' property."
The suit notes that "Seventy years ago, the New Mexico Supreme
Court determined that the city of Alamogordo had caused a
trespass on its citizens' property by gathering water in its
ditches and failing to provide an outlet for it during a flood
so that the water went upon the land if its citizens."
The plaintiffs are also asserting a claim for damages to their
property through "inverse condemnation" defined as the taking of
a property by a government agency through damages, to the point
where the property is all but condemned and unusable by the
owner.
Those claims were being made against the city of Alamogordo, and
the county commission. The plaintiffs are requesting payment
for the loss of their property.
Damages under claims for negligence, nuisance, and trespass was
also being sought by the plaintiffs against defendants Bobby
Martinez and Molzen-Corbin & Associates P.A.
The unnamed designer or contractor who did the culvert for Mr.
Martinez is named as a "John Doe" in the suit, according to The
Alamogordo Daily News.
The suit states that Molzen-Corbin & Associates designed a
culvert or bridge which was installed just prior to the floods
of 2006 "which negligently reduced the size of the culvert."
The plaintiffs allege Bobby Martinez built a culvert across
Marble Canyon, and that the county approved the culvert without
requiring any engineering studies concerning the impact of the
culvert on the flow of water down Marble Canyon.
Since the culvert was not engineered but was simply built with
an old culvert, it provided inadequate flow volume for large
quantities of storm water and debris, the suit claims.
As a result, according to the suit, aggregate backed up behind
the culvert, which caused the surface waters to back up behind
the culvert until the waters and aggregate broke through the
culvert in what one person has described as "a 90-foot-high
burst of water."
The plaintiffs also assert that "the placement of the culvert
across Marble Canyon thus caused the storm waters of June 22,
2006, to rise to heights and quantities larger than would have
occurred had the culvert not been installed." They contend that
maintenance made it worse.
The suit charges the water then rushed down the ditch and
flooded the plaintiffs' property.
According to Mr. Sanders, "Another cause of the flooding of the
plaintiffs' property was the failure of the city and county to
properly maintain the Marble Canyon Ditch."
For more details, contact:
Steven K. Sanders, Esq.
Steven K. Sanders & Associates, LLC
820 2nd Ave. N.W.
Albuquerque, NM 87102-2212
Phone: (505) 243-7170
Fax: (505) 243-7755
- and -
Mark A. Reeves, Esq.
Reeves & Associates, PC
1115 Ohio Avenue
Alamogordo, NM 88311
Phone: (505) 439-5500
Fax: (505) 439-0493
VEGAS STRIP CLUBS: S.C. Gives Stripper Lawsuit Go Signal
--------------------------------------------------------
The Nevada Supreme Court said that Tucson, Arizona-based lawyer
Mick Rusing may pursue a class-action lawsuit that would force
Las Vegas strip clubs to classify dancers as club employees and
pay them wages, Ed Vogel writes for the Review Journal.
The report says that many of the estimated 10,000 strippers in
Las Vegas pay a fee to dance at clubs and sign agreements
classifying themselves as independent contractors. The
strippers receive no pay or benefits and earn only tips.
According to the Review Journal, justices ruled 3-0 allowing
Mr. Rusing to bring a class-action lawsuit on behalf of the
strippers seeking to change the current arrangement.
"This is going to force employers to stop living off the backs
of these women," the report quotes Sean Brearcliffe, a lawyer at
Mr. Rusing's firm. "Some of the clubs don't pay them anything
and force them to pay as much as $50 to $100 per hour out of
their tips. Nevada law does not let employers take tips earned
by their employees," Mr. Brearcliffe adds.
The Review Journal further notes Mr. Brearcliffe as saying that
he plans to file a class-action lawsuit with the District Court
to force strip clubs to hire dancers as they do other employees.
He hopes that if the class action succeeds, it will allow
dancers to keep their tips and receive wages.
Mr. Brearcliffe, according to the report, suggests that clubs
raise revenue through higher entrance fees, drink prices
and other means if the court eventually prohibits the
independent contractor arrangement.
The Review Journal cites Mr. Brearcliffe as recounting that
judges and labor commissioners in Texas and Florida have already
thrown out the independent contractor agreements dancers signed
with strip clubs. His firm won a favorable decision for
strippers in California.
The firm, the report relates, has been trying since 2000 to
secure approval to represent Las Vegas strippers in a class-
action lawsuit.
Strippers will be notified of the litigation and their right to
participate if a class action is commenced against the clubs
where they work, the report says. A dancer automatically will
be considered part of the litigation unless she signs an
agreement that she is "opting out" of the case.
Many dancers, Mr. Brearcliffe pointed out, have been reluctant
to join the litigation out of fear of retaliation from club
owners.
Mr. Rusing and Mr. Brearcliffe's firm would represent the
strippers on a contingency-fee basis, the Review Journal writes.
The report recalls that in oral arguments before the Supreme
Court in September, Girls of Glitter Gulch lawyer Mario Lovato
argued that dancers prefer being independent contractors. He
said they take home hundreds of dollars in tips a night and do
not have to tell clubs what they are earning. He added that if
clubs had to pay dancers wages and benefits, they would be
required by law to keep track of their tips.
Mr. Lovato's contentions prompted Justice Mark Gibbons to ask
whether dancers preferred the current arrangement because they
could avoid paying taxes on all of the tips they receive. To
this, Mr. Brearcliffe said there is no evidence that strippers
have not paid taxes.
The Review Journal says that the Supreme Court ruled that
Mr. Rusing and Mr. Brearcliffe's has found a client -- a legal
secretary who moonlighted as a Girls of Glitter Gulch stripper
-- who is an adequate representative of strippers as a class.
Any case brought on her and other strippers' behalf must be
considered under the Nevada Wage and Hour Law, which prohibits
employers from using tips as credit against the $5.85-per-hour
minimum wage, according to the court decision.
WELLS FARGO: Accused of Taking Kickbacks for Mortgage Insurance
---------------------------------------------------------------
Wells Fargo Bank, N.A., and its wholly owned subsidiary, North
Star Mortgage Guaranty Reinsurance Co., are facing a class-
action complaint filed with the U.S. District Court for the
Eastern District of Pennsylvania accusing it of violating
lending laws by conspiring to receive kickbacks from private
mortgage insurers through "captive reinsurance arrangements,"
the CourtHouse News Service reports.
According to CourtHouse News Service, the plaintiffs challenge a
secretive conspiracy to circumvent the prohibitions in the Real
Estate Settlement Procedures Act of 1974 (RESPA) against
kickbacks and unearned fees.
Named plaintiff Kyle L. Liguori claims that Wells Fargo made
$400 million from 1999-2006 "by arranging for the private
mortgage insurer(s) to pay an excessive portion of borrowers'
private mortgage insurance premiums to North Star in the form of
purported reinsurance premiums" while paying "zero" in claims.
CourtHouse News Service says that Mr. Liguori brings the action
pursuant to Federal Rules of Civil Procedure 23(a) and 23(b)(1),
(b)(2) and/or (b)(3) on behalf of all persons who obtained
residential mortgage loans originated and acquired by Wells
Fargo and its affiliates and, in that connection, purchased
private mortgage insurance and whose loans were included within
Wells Fargo's captive mortgage insurance and whose loans were
included within Wells Fargo's captive mortgage reinsurance
arrangements.
Mr. Liguori wants the court to rule on:
(a) whether defendants' captive reinsurance arrangements
involved sufficient transfer of risk;
(b) whether payments to Wells Fargo's captive reinsurer
were bona fide compensation and solely for services
actually performed;
(c) whether payments to Wells Fargo's captive reinsurer
exceeded the value of any services actually performed;
(d) whether Wells Fargo's captive reinsurance arrangements
constituted unlawful kickbacks from private mortgage
insurers;
(e) whether Wells Fargo accepted a portion, split or
percentage of borrowers' private mortgage insurance
premiums other than for services actually performed;
and
(f) whether defendants are liable to plaintiff and the
class for statutory damages pursuant to RESPA Section
2607(d)(2).
Mr. Liguori requests that the court enter a judgment:
-- certifying the lawsuit as a class action pursuant to
Rule 23 of the Federal Rules of Civil Procedure,
declaring plaintiff as a representative of the class and
plaintiff's counsel as counsel for the class;
-- declaring, adjudging, and decreeing the defendant's
conduct as unlawful;
-- awarding the plaintiff and the class statutory damages
pursuant to RESPA Section 8(d)(2), 12 USC Section
2607(d)(2);
-- granting plaintiff and the class costs of suit,
including reasonable attorneys' fees and expenses; and
-- granting plaintiff and the class such other, further and
different relief as the nature of the case may require
or as may be determined to be just, equitable and proper
by the court.
The suit is "Kyle J. Liguori et al. v. Wells Fargo & co., et
al," filed with the U.S. District Court for the Eastern District
of Pennsylvania.
Representing the plaintiffs are:
Joseph H. Meltzer, Esq.
Edward W. Ciolko, Esq.
Mark K. Gyandoh, Esq.
Joseph A. Weeden, Esq.
Schiffrin Barroway Topaz & Kessler, LLP
280 King of Prussia Road
Radnor, PA 19087
Phone: (610) 667-7706
Fax: (610) 667-7056
* CEO Compensation Practices are Indicators of Securities Suits
---------------------------------------------------------------
CEO compensation practices that are poorly aligned with
shareholder interests remain a powerful indicator of potential
securities litigation, according to The Corporate Library, as
the firm reported in its latest securities class action (SCA)
study, Predicting Securities Litigation: 2007 Year-End Report.
In a year when new securities class actions filings rose 43%,
claims in new areas rose to prominence, including subprime
mortgage and related real estate and homebuilder cases, cases
involving risk exposure outside the United States, and failed
IPOs and mergers. The report points to another year of increased
litigation in 2008 and the growing involvement of institutional
investors.
The study examines the second-year effectiveness of The
Corporate Library's SCA Risk Ratings to identify and predict the
probability of companies being hit with securities class action
suits. The findings include:
-- The most poorly-rated companies in mid-2006 were five
times more likely to experience an SCA in 2007, matching
the results from The Corporate Library's previous SCA
studies.
-- CEO base pay and annual bonus levels were more
predictive than long-term incentives.
-- More than 35% of companies in The Corporate Library's
coverage universe that were unable to achieve compliance
with Section 404 of Sarbanes-Oxley experienced at least
one SCA in the past three years.
-- Institutional investors hold more than 60% of the traded
stock at nearly all companies subject to SCAs.
-- Growing numbers of small- and mid-cap companies are
being hit with suits.
"Effective prediction is the only real defense against
securities litigation, and that is the primary focus of the
present report," said Ric Marshall, Chief Analyst and author of
the study. The compensation link is so important that The
Corporate Library will release a separate report to focus on
that issue specifically in the first quarter of 2008, he said.
The Corporate Library's mission is to provide independent
corporate governance research and analysis to enable its clients
to enhance value. The company's corporate governance information
products, research services and data are sold to the full
spectrum of corporate governance stakeholders. Corporate
governance research is compiled by market-leading analysts using
a proprietary database of over 3,200 public companies and over
40,000 executives and directors.
The Corporate Library on the net:
http://www.thecorporatelibrary.com
New Securities Fraud Cases
CELLCYTE GENETICS: Cohen Milstein Files WA Securities Fraud Suit
----------------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
filed a class action complaint with the United States District
Court for the Western District of Washington on behalf of
purchasers of CellCyte Genetics Corporation common stock from
April 6, 2007, through Jan. 9, 2008, inclusive.
The complaint charges CellCyte, certain of its officers and
directors, and two others who were primary participants in the
sale of the Company's stock with violations of the Securities
Exchange Act of 1934. During the Class Period, CellCyte held
itself out to be "a company focused on the discovery and
development of stem cell enabling therapeutic products."
The complaint alleges that CellCyte executives and business
partners misled investors during the Class Period by publishing
false information about the history and experience of the
company's chief executive officer Gary A. Reys. Reys' background
was called into question after published news reports called out
alleged discrepancies relating to Reys' finance degree from the
University of Washington, a CPA designation, ties to the
Washington Society of Certified Public Accountants, and a strong
track record within the pharmaceutical industry.
According to the complaint, CellCyte made misleading and false
statements about Reys to potential investors and the SEC. These
published statements had the cause and effect of creating an
unrealistically positive assessment of CellCyte's prospects for
investors. As a result, stock prices for the company were
artificially inflated during the Class Period. Soon after Reys'
credibility came into question the suit claims CellCyte took
some of Reys' biographical information off its Web site. Within
days of the removal company stock fell 55 percent to $2.20 a
share. CellCyte traded at a high of $7.02 per share just days
before.
Interested parties may move the court no later than March 14,
2008 for lead plaintiff appointment.
For more information, contact:
Steven J. Toll, Esq.
Dana Frusco
Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
1100 New York Avenue, N.W.
West Tower, Suite 500
Washington, D.C. 20005
Telephone: (888) 240-0775 or (202) 408-4600
e-mail: stoll@cmht.com or dfrusco@cmht.com
HUNTINGTON BANCSHARES: Wolf Haldenstein Files OH Securities Suit
----------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a class action
lawsuit with the United States District Court, Southern District
of Ohio, on behalf of all persons who purchased the common stock
of Huntington Bancshares, Inc. between July 20, 2007 and
Jan. 10, 2008, inclusive, against the Company and Thomas E.
Hoaglin, the Company's Chairman and CEO, alleging fraud pursuant
to Sections 10(b) and 20(a) of the Exchange Act (15 U.S.C.
ss.ss. 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder
by the SEC (17 C.F.R. ss. 240.10b-5).
Throughout the Class Period, Defendants issued materially false
and misleading statements regarding the Company's business and
financial results. As a result of the dissemination of the false
and misleading statements set forth in the complaint, the market
price of Huntington common stock was artificially inflated
during the Class Period.
In ignorance of the false and misleading nature of the
statements described above, and the deceptive and manipulative
devices and contrivances employed by said defendants, plaintiff
and the other members of the Class relied, to their detriment,
on the integrity of the market price of Huntington common stock.
Had plaintiff and the other members of the Class known the
truth, they would not have purchased said common stock, or would
not have purchased them at the inflated prices that were paid.
On July 1, 2007, Huntington acquired Sky Financial for $3.3
billion (the "Acquisition").
The Acquisition exposed the Company to losses of more than $1.5
billion in losses because of Sky Financial's investments in sub-
prime mortgages. Contrary to Defendants' assurances, Huntington
failed to properly prepare and implement defensive measures to
integrate Sky Financial and weather the dismal real estate and
credit markets inherited as part of the Acquisition. As a
result of Defendants' assurances of ongoing financial stability,
which were false statements, Huntington's stock traded at the
artificially inflated price of approximately $18 per share
during much of the Class Period Defendants' concealment of
Huntington's growing exposure to the housing and credit crisis
caused the Company's stock to be artificially inflated and was
the proximate cause of Plaintiff's injuries.
Interested parties may move the court no later than February 19,
2008 for lead plaintiff appointment.
For more information, contact:
Gregory M. Nespole, Esq.
Fred T. Isquith, Esq.
George T. Peters, Esq.
Derek Behnke
Wolf Haldenstein Adler Freeman & Herz LLP
270 Madison Avenue, New York, New York 10016
Phone: 800-575-0735
e-mail: classmember@whafh.com
Web site: http://www.whafh.com
MORGAN KEEGAN: Chitwood Harley Files Securities Fraud Suit in TN
----------------------------------------------------------------
Chitwood Harley Harnes LLP announced the filing of a class
action with the United States District Court for the Western
District of Tennessee on behalf of all persons who, during the
period of Dec. 6, 2004, through Nov. 7, 2007, purchased or
otherwise acquired the shares of certain mutual funds offered by
Morgan Keegan Select Fund Inc. including:
-- the Regions Morgan Keegan Select High Income Fund
-- the Regions Morgan Keegan Select Intermediate Bond Fund
and
-- the Regions Morgan Keegan Select Short Term Bond Fund
or shares of the RMK Multi-Sector High Income Fund, Inc.,
pursuant and/or traceable to MK Select's and the RHY Fund's
false and misleading Registration Statements and Prospectuses.
The complaint charges the Funds' registrants, the Funds'
administrator, Morgan Keegan & Company, Inc. (Morgan Keegan),
the Funds' adviser, Morgan Asset Management, Inc., Regions
Financial Corp. and certain of Morgan Keegan's officers and/or
directors with violations of the Securities Act of 1933.
The complaint alleges that parts of the Funds' portfolios have
been invested in collateralized debt obligations, including CDOs
backed by sub-prime mortgages to higher-risk borrowers. For
years, shares of the Funds traded within narrow ranges. Then in
early March 2007, as the sub-prime crisis began to emerge, the
Funds began to trend lower as the market learned of their
exposure to the sub-prime market. Nonetheless, the shares of
the Funds continued to trade at artificially inflated prices as
the full extent of the Funds' exposure had not yet been
revealed. As late as the summer of 2007, as the housing and
credit crisis deepened, MK Select and the RHY Fund continued to
play down and conceal the Funds' growing exposure to the
problems in the sub-prime market. Beginning in early July 2007,
the Funds began to acknowledge serious problems in their
portfolios related to the Funds' exposure to the sub-prime
market. Eventually, on November 7, 2007, Portfolio Manager
James C. Kelsoe wrote a letter to investors in which he
acknowledged the full extent of the problems the portfolios
faced due to the deterioration in the housing sector and the
sub-prime mortgage crisis.
As a result of this series of partial disclosures, the price of
the Select Funds' shares collapsed. The High Income Fund Class
A shares closed at $4.53 per share on November 8, 2007, a
decline of 51% from early July 2007. Likewise, the Intermediate
Fund Class A shares closed at $5.88 per share on November 8,
2007, a decline of 38% from early July 2007. Additionally, the
Short Term Fund Class A shares closed at $8.84 per share on
November 8, 2007, a decline of 12% from early August 2007. The
price of the RHY Fund shares also collapsed. The RHY Fund
shares closed at $5.41 per share on November 8, 2007, a decline
of 63% from early July 2007.
According to the complaint, the true facts which were omitted
from the Registration Statements/Prospectuses were as follows:
(a) the Funds lacked adequate controls and hedges to
minimize the risk of loss from mortgage delinquencies
which affected a large part of their portfolios;
(b) the Funds' portfolios were materially misstated due to
their failure to properly value CDOs; and
(c) the extent of the Funds' risk exposure to mortgage-
backed assets was misstated.
Plaintiffs seek to recover damages on behalf of all persons who
purchased or otherwise acquired shares of the Select Funds
and/or the RHY Fund pursuant and/or traceable to MK Select's and
the RHY Fund's false and misleading Registration Statements and
Prospectuses.
For more information, contact:
Nikole Davenport
Michael Peacock
Chitwood Harley Harnes
2300 Promenade II, 1230 Peachtree Street
Atlanta, Georgia 30309
Phone: 404-272-8439 or 404-234-3488
Fax: 404-876-4476 fax
e-mail: NDavenport@chitwoodlaw.com or
MPeacock@chitwoodlaw.com
SUNOPTA INC: Schiffrin Barroway Files N.Y. Securities Fraud Suit
----------------------------------------------------------------
The law firm of Schiffrin Barroway Topaz & Kessler, LLP filed a
class action with the United States District Court for the
Southern District of New York on behalf of all purchasers of
securities of SunOpta Inc. between Aug. 8, 2007, through
Jan. 25, 2008, inclusive.
The Complaint charges SunOpta and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. SunOpta is an operator of high-growth businesses,
focusing on integrated business models in the natural and
organic food, supplements and health and beauty markets.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that defendants artificially inflated the Company's
financial results and failed to properly account for
results of operations, which resulted in an
overstatement of the Company's profitability;
(2) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles;
(3) that the Company lacked adequate internal and financial
controls;
(4) that, as a result of the foregoing, the Company's
financial statements were materially false and
misleading at all relevant times; and
(5) that, as a result of the foregoing, the Company's
statements about its financial well-being and future
business prospects were lacking in any reasonable basis
when made.
On Jan. 24, 2008, after the market closed, the Company shocked
investors when it reported its anticipated financial results for
2007, disclosing for the first time that it expected to incur
write-downs and provisions in the range of $12 million to
$14 million. Moreover, the Company stated that it would likely
restate financial results from previous quarters. The Company
attributed the write-downs to inventory within the SunOpta Fruit
Group's berry operations, as well as difficulties in collecting
for services and equipment provided to a customer of the SunOpta
BioProcess Group. Finally, the Company stated that it was not
able to give revenue and earnings guidance for 2008. Upon the
release of this news by the Company, the Company's shares
declined $3.51 per share, or 36.72 percent, to close on Jan. 25,
2008, at $6.05 per share, on unusually heavy trading volume.
The Plaintiff seeks to recover damages on behalf of class
members.
Interested parties may move the court no later than March 28,
2008, for lead plaintiff appointment.
For more information, contact:
Darren J. Check, Esq.
Richard A. Maniskas, Esq.
Schiffrin Barroway Topaz & Kessler, LLP
280 King of Prussia Road
Radnor, PA 19087
Phone: 1-888-299-7706 (toll free) or 1-610-667-7706
e-mail: info@sbtklaw.com
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Janice Mendoza, Freya Natasha Dy, and
Peter Chapman, Editors.
Copyright 2008. All rights reserved. ISSN 1525-2272.
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