/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/100202.mbx C L A S S A C T I O N R E P O R T E R Tuesday, February 2, 2010, Vol. 12, No. 22 Headlines AT&T MOBILITY: Settles D. N.J. Early Termination Fee Litigation CITIZENS FINANCIAL: N.D. Ill. Suit Complains About Overdraft Fees CITY OF FARGO: State Entitled to List of Class-Action Claimants COMMONWEALTH LAND: Court Says Title Insurance RICO Suits Proceed COVIDIEN PLC: 9th Cir. Affirms Pulse Oximetry Antitrust Dismissal COVIDIEN PLC: "Natchitoches" Settlement Hearing Set for March 10 DIEDRICH COFFEE: Court Denies TRO to Stall Green Mountain Merger DIEDRICH COFFEE: Paid Full Settlement in "Willems" Suit in Oct. DRINK: Former Servers & Bartenders File Class Action Lawsuit EHARMONY, INC: Settles Same-Sex Matching Class Action Litigation FIRSTPLUS HOME: Class Action Litigation Pulls Down Credit Rating ILLINOIS BELL: Argues Right to Receive Unclaimed Settlement Funds MDL 1715: Ameriquest Settles 712,000 Borrowers for $22 Million MGIC INVESTMENT: Motion to Dismiss Consolidated Suit Pending PETLAND INC: 29 Ariz. Puppy Mill Claims Dismissed & 2 Survive PFIZER INC: Pa. Super. Ct. Upholds Class Decertification Decision SEARS ROEBUCK: Lawn Mower Status Conference Adjourned to March ST. JOSEPH'S MEDICAL: Lawsuit Levies Unnecessary Surgery Charges STAPLES INC: Inks $42 Million Global Labor Litigation Settlement TOYOTA MOTOR: Halts U.S. Sales of Camry & Seven Other Models TOYOTA MOTOR: Lawyers Are Busy Fielding Calls & Filing Lawsuits UNION CITY: Class Action Suit Accuses Police of Racial Bias UNITED AIRLINES: Small Chicago Firm Gets Most of Pilot Case Fees UNITED STATES: Govt. To Pay $7.4 Mil. in Debt Collection Lawsuit * J. Kevin Snyder to Lead Dykema's Class Action Defense Team ********* AT&T MOBILITY: Settles D. N.J. Early Termination Fee Litigation --------------------------------------------------------------- Venuri Siriwardane at The Star-Ledger reports that AT&T Mobility told its customers via e-mail today that it has settled all claims and causes of action in Hall, et al. v. AT&T Mobility LLC fka Cingular Wireless LLC, et al., Case No. 07-cv-05325 (D. N.J.) (Linares, J.). The suit alleged AT&T's flat-rate early termination fee -- usually between $150 and $175 -- was unlawful. Though the telecommunications giant strongly denied any wrongdoing, it agreed to settle "to avoid the burden and cost of further litigation," the notice said. If the settlement is approved, AT&T will pay New Jersey customers a total of $16,000,000 in cash and $2,000,000 in "non-cash benefits." Company spokesman Marty Richter said it is not yet clear how the settlement fund would be divided among customers. The settlement would affect customers who were charged a flat- rate ETF between Jan. 1, 1998 and Nov. 4, 2009, or customers whose contract included a flat-rate ETF provision at any time after Jan. 1, 1998. "It's important to note that the litigation involves old early termination fee policies of the old AT&T Wireless and Cingular," said Richter, adding that the firm now prorates its ETF to decrease fees over the life of the contract. The Federal Communications Commission today asked four major wireless carriers -- AT&T, Verizon Wireless, Sprint Nextel, T- Mobile U.S.A. -- and Google to explain their ETF policies and how they communicate them to consumers. In the past, carriers have said the fees are necessary to subsidize the cost of mobile phones. Critics say they stifle competition and generate revenue for carriers. Between now and June 14, 2010, AT&T customers can submit claim forms at http://www.ATTMETFSettlement.com/-- a specialized Web site hosted by Rust Consulting, Inc., which serves as the Claims Administrator in this litigation. The Plaintiff Class is represented by: Brian R. Strange, Esq. STRANGE & CARPENTER 12100 Wilshire Blvd., Suite 1900 Los Angeles, CA 90025 - and - James E. Cecchi, Esq. CARELLA, BYRNE, BAIN, GILFILLAN, ET AL. 5 Becker Farm Road Roseland, NJ 07068 Defense Counsel is: Andrew B. Joseph, Esq. DRINKER BIDDLE & REATH LLP 500 Campus Drive Florham Park, NJ 07932 CITIZENS FINANCIAL: N.D. Ill. Suit Complains About Overdraft Fees ----------------------------------------------------------------- A class action lawsuit filed last week would require Citizens Bank to refund hundreds of millions of dollars in allegedly unlawful overdraft charges -- which Citizens Bank often charged even when the customers had enough funds in their accounts to pay for the purchase. The Complaint in Duval v. Citizens Financial Group, Inc., Case No. 10-cv-00533 (N.D. Ill.) (Bucklo, J.), was filed on behalf of Jessica Duval, of Goffstown, N.H., and other bank customers who say they were unfairly and illegally charged overdraft fees by Citizens Financial Group Inc., for charges she made on her ATM/debit card. CFG is the parent company of Citizens Bank and Charter One Bank. The class action lawsuit alleges that these charges violate federal and state law, as well as the contractual relationship the bank has with its customers. The lawsuit seeks certification of a class action on behalf of Citizens Bank and Charter One Bank customers who were improperly charged overdraft fees or who received insufficient disclosures about such overdraft fees. "While the federal government has begun to regulate overdraft fees, Citizens Bank and other banks continue to abuse customers and improperly charge overdraft fees. Moreover, customers must be compensated for bank practices that caused hundreds of millions of dollars in improperly charged fees," said: Hassan Zavareei, Esq. TYCKO & ZAVAREEI LLP 2000 L Street, N.W., Suite 808 Washington, DC 20036 Telephone: (202) 973-0900 who represents the plaintiff. Counsel of record to Ms. Duval is: Jeffrey D. Kaliel, Esq. TYCKO & ZAVAREEI LLP 2000 L Street, N.W., Suite 808 Washington, DC 20036 Telephone: (202) 973-0900 "Citizens Bank manipulates the posting of transactions to incur $37 overdraft fees on accounts, and customers cannot stop the bank from making arbitrary decisions that their accounts have been 'overdrawn.' The bank punishes customers and their families with these charges, causing further pain for families already stressed by the poor economic situation," Mr. Zavareei said. Citizens Financial Group, Inc., is a $151 billion commercial bank holding company. It is headquartered in Providence, R.I., and, through its subsidiaries, has more than 1,500 branches and approximately 3,500 ATMs and approximately 22,600 employees. Its two bank subsidiaries are RBS Citizens, N.A. and Citizens Bank of Pennsylvania. They operate a 12-state branch network under the Citizens Bank brand in Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont, and the Charter One brand in Illinois, Michigan and Ohio. The complaint alleges that Citizens Bank and Charter One manipulates debit transaction posting to cause overdraft fees even when there are sufficient funds to pay for a certain purchase. Citizens Bank uses several different methods to cause a customer to incur an overdraft fee even when her account has never been overdrafted. The complaint also alleges that Citizens Bank directly violates the terms of its account agreement by allowing purchases and withdrawals even when a customer has an insufficient balance. For example, one contractual provision states that the bank will not allow withdrawals when there are insufficient funds. In fact, the class action alleges that the bank does allow withdrawals on insufficient funds even at its own ATMs -- and it does so without any prior warning to the customer. According to the complaint, the bank does this for the sole purpose of charging its own customers an overdraft charge. The complaint also alleges that Citizens Bank has not allowed its customers to opt out of "overdraft protection," as recommended by Federal regulators. CITY OF FARGO: State Entitled to List of Class-Action Claimants --------------------------------------------------------------- The Associated Press reports that U.S. District Judge Ralph Erickson says North Dakota's child support enforcement program should receive a list of people who joined in a class action lawsuit over excessive traffic fines in Fargo. The ruling in Sauby v. City of Fargo, Case No. 07-cv-00010 (D. N.D.), affects about 14,000 people who filed valid claims for reimbursement because the city was charging more for traffic fines than state law allows. As reported in the Class Action Reporter on Dec. 17, 2009, the state asked for the list of participating class members to see if any of them are behind on child support payments. Lawyers for the class argued that the information should not be released. COMMONWEALTH LAND: Court Says Title Insurance RICO Suits Proceed ---------------------------------------------------------------- Shannon P. Duffy at The Legal Intelligencer reports that in a major setback for several title insurers, a federal judge has refused to dismiss a trio of class action consumer RICO suits that accuse the companies of engaging in a pervasive pattern of overcharging for title insurance by systematically ignoring entitlement to statutory discounts. Although title insurers have been battling a wave of consumer litigation in recent years, the three decisions by U.S. District Judge Joel H. Slomsky mark the first time that a court has green- lighted RICO claims. Defense lawyers had urged Judge Slomsky to dismiss the RICO claims, arguing that the plaintiffs failed to plead a proper RICO enterprise since an insurer and its agents cannot be considered legally "distinct." Judge Slomsky disagreed, saying "plaintiffs have satisfied the minimum 'person' and 'enterprise' distinctiveness requirement because the combination of Commonwealth Land and the title agents constitute a single 'enterprise' separate and distinct from the 'person' of defendant Commonwealth Land and this combination is permissible under RICO jurisprudence." In a footnote to his 38-page opinion in Coleman v. Commonwealth Land Title Insurance Co., Case No. 09-cv-00679 (E.D. Pa.), Judge Slomsky noted that he had handed down nearly identical opinions in two other cases -- Schwartz v. Lawyers Title Insurance Co., Case No. 09-cv-00841 (E.D. Pa.), and Levine v. First American Title Insurance Co., Case No. 09-cv-00842 (E.D. Pa.) -- changing "only the factual averments and the names of the parties in appropriate places." In the suits, homeowners claim they were overcharged for title insurance when they purchased or refinanced because they were never told that they qualified for a discounted premium. Under Pennsylvania law, title insurance rates are governed by a statute that calls for a 10 percent "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 percent "refinance rate" discount if the property owner applies for title insurance within three years of obtaining a previous policy. The plaintiffs team in all three cases: Todd S. Collins, Esq. Elizabeth W. Fox, Esq. BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103-6365 Telephone: 215-875-3000 - and - Ann Miller, Esq. ANN MILLER, LLC 834 Chestnut St., Suite 206 Philadelphia, PA 19107 Telephone: 215-238-0468 - and - Daniel M. Harris, Esq. Anthony P. Valach, Esq. THE LAW OFFICES OF DANIEL HARRIS 150 N. Wacker Drive, Suite 300 Chicago, IL 60606 Telephone: 312-960-1802 contend that the routine and systematic overcharging of consumers is exactly the sort of conduct the civil RICO statute was designed to address. "Title insurers and their agents take advantage of consumers' ignorance and trust by (1) deliberately misrepresenting and overstating the amount of money due for title insurance; (2) concealing from consumers that they are being overcharged; and (3) having title agents, acting in their capacity as settlement agents, pay the inflated bills on the consumers' behalf out of the consumers' mortgage loan proceeds -- monies that have been entrusted to the title agents in their capacity as settlement agents," the plaintiffs wrote. But defense lawyers argued that the RICO claims were riddled with fatal flaws and failed to satisfy the strict requirements imposed by both the U.S. Supreme Court and the 3rd U.S. Circuit Court of Appeals. Commonwealth Title and Lawyers Title are represented by: Darryl J. May, Esq. Paul Lantieri, III, Esq. Jessica M. Anthony, Esq. BALLARD SPAHR ANDREWS & INGERSOLL LLP 1735 Market Street, 51st Fl. Philadelphia, PA 19103 Telephone: 215-864-8340 First American is represented by: Charles A. Newman, Esq. SONNENSCHEIN NATH & ROSENTHAL One Metropolitan Square, Suite 3000 St. Louis, MO 63102-2741 Telephone: 314-241-1800 In their briefs, the defense teams argued that title insurers have no fiduciary duty to disclose the alleged entitlement to the discounted rate or to inform plaintiffs of the non-disclosure. Judge Slomsky disagreed, saying, In "light of the complexity of title insurance rates and the expertise of defendant and title agents . . . the argument that defendant had no duty to disclose the right to the discounted rate is not persuasive." Instead, Judge Slomsky found, the insurers and their agents "had the responsibility to charge the correct rate, and disclosure of the correct rate is part and parcel of that responsibility." But the main thrust of the defense motions was to challenge the plaintiffs' RICO theory by attacking their pleading of an "association-in-fact" enterprise. The RICO enterprise alleged by the plaintiffs, they argued, does not satisfy the "distinctiveness" requirement of RICO as explained in copious federal case law. To satisfy the "distinctiveness" requirement under 1962(c), the defense team said, a plaintiff must allege that the RICO "enterprise" is distinct from the defendant "person" alleged to have violated RICO and that the "enterprise" is distinct from the alleged pattern of racketeering activity. But the plaintiffs lawyers argued that the insurers are the liable "person" and the "enterprise" is an association-in-fact between the insurers and their title agents in Pennsylvania. The title agents are subject to the insurers' control and take a percentage of the premiums collected as their remuneration for their services. But defense lawyers insisted that since the insurers acted only through their agents, the "person" and "enterprise" are one and the same and therefore fail to satisfy RICO's distinctiveness requirement. Judge Slomsky sided with the plaintiffs, finding that their allegations are valid, at least in theory, because "these title agents are independent and distinct entities and individuals." The title agents "are not employees" of the insurers, Judge Slomsky noted, "but rather they are non-exclusive agents who work with different title insurance companies." Although title agents have an "agency agreement" with the insurer, Judge Slomsky said, "they are still separate, independent entities who do not function as subsidiaries or employees." COVIDIEN PLC: 9th Cir. Affirms Pulse Oximetry Antitrust Dismissal ----------------------------------------------------------------- The U.S. Court of Appeals for the Ninth Circuit has affirmed the decision of the U.S. District Court for the Central District of California dismissing all claims in a consolidated class action against Covidien plc, according to the company's Jan. 26, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 25, 2009. Beginning on Aug. 29, 2005, with Allied Orthopedic Appliances, Inc. v. Tyco Healthcare Group, L.P., and Mallinckrodt Inc., 12 consumer class actions have been filed in the U.S. District Court for the Central District of California. In all of the complaints, the putative class representatives, on behalf of themselves and others, seek to recover overcharges they allege they paid for pulse oximetry products as a result of anticompetitive conduct by the company in violation of the federal antitrust laws. The 12 complaints were subsequently consolidated into a single proceeding styled In re: Pulse Oximetry Antitrust litigation. By stipulation among the parties, six putative class representatives dismissed their claims against the company, leaving six remaining putative class representatives as plaintiffs in the consolidated proceeding. On Dec. 21, 2007, the district court denied the plaintiffs' motion for class certification. On March 14, 2008, the U.S. Court of Appeals for the Ninth Circuit denied the plaintiffs' request for leave to appeal the district court's denial of their motion for class certification. On July 9, 2008, the district court granted the company's motion for summary judgment which resulted in the dismissal of all claims. The plaintiffs have appealed both rulings to the U.S. Court of Appeals for the Ninth Circuit. On Jan. 6, 2010, the Court of Appeals affirmed the district court's order granting summary judgment dismissing all claims against the company. Covidien Public Limited Company -- http://www.covidien.com/-- formerly Covidien Ltd. is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. The company operates in three business segments: medical devices, pharmaceuticals and medical supplies. COVIDIEN PLC: "Natchitoches" Settlement Hearing Set for March 10 ---------------------------------------------------------------- A settlement hearing is scheduled for March 10, 2010, in Natchitoches Parish Hospital Service District v. Tyco International, Ltd., et al., Case No. 05-12024 (D. Mass.) (Saris, J.), which names Covidien, Ltd. (nka Covidien plc), as a defendant, according to the company's Jan. 26, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 25, 2009. The class-action suit was filed against the company on Sept. 15, 2005. In the complaint, the putative class representative, on behalf of itself and others, seeks to recover overcharges it alleges that it and others paid for sharps containers as a result of anticompetitive conduct by the company in violation of federal antitrust laws. The district court held hearings on the plaintiff's motion for class certification on April 13, 2007, and on Sept. 18, 2007. On Aug. 29, 2008, the district court granted the plaintiffs' motion for class certification. On Dec. 5, 2008, the U.S. Court of Appeals for the First Circuit denied the company's request for leave to appeal the district court's granting of the plaintiffs' motion for class certification. On Jan. 8, 2010, the company reached a settlement agreement pursuant to which the company will pay the certified class $32.5 million to resolve all claims in the suit. The Plaintiff is represented by: Daniel Berger, Esq. BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: 215-875-3026 - and - Brett Cebulash, Esq. GARWIN GERSTEIN & FISHER LLP 1501 Broadway, Suite 1416 New York, NY 10036 Phone: 212-398-0055 The defendants are represented by: Margaret Branick-Abilla, Esq. COOLEY GODWARD LLP Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306-2155 Phone: 650-843-5067 - and - Christopher D. Dusseault, Esq. GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071-3197 Phone: 213-229-7855 DIEDRICH COFFEE: Court Denies TRO to Stall Green Mountain Merger ---------------------------------------------------------------- The Superior Court of the State of California has denied the plaintiff's application for a temporary restraining order on Diedrich Coffee, Inc.'s planned merger with Green Mountain Coffee Roasters, Inc., according to the company's Jan. 25, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 9, 2009. On Nov. 10, 2009, an action entitled George Mendenhall, individually and on behalf of all others similarly situated v. J. Russell Phillips, et al., was filed in the Superior Court of the State of California for the County of Orange. In this action, the plaintiff named as defendants Diedrich, the members of the Board, Peet's and Peet's wholly owned subsidiary, Marty Acquisition Sub, Inc. Among other things, the Complaint alleges that the members of the Board breached their fiduciary duties to Diedrich's stockholders in connection with the transactions previously contemplated by the terminated Peet's Agreement, allegedly resulting in an unfair process and unfair price to such stockholders. The Complaint seeks class certification and certain forms of equitable relief, including enjoining the completion of the transactions previously contemplated by the terminated Peet's Agreement. Diedrich believes that the allegations of the complaint are without merit and intends to vigorously contest the action. On Dec. 23, 2009, an amendment to the Complaint was filed in the Court. The Amended Complaint names as defendants Diedrich, the members of the Board, GMCR and Acquisition Sub. Among other things, the Amended Complaint alleges that the members of the Board breached their fiduciary duties to Diedrich stockholders by failing to provide adequate disclosures of material information concerning the transaction and also seeks an equitable assessment of attorneys' fees and expenses for the benefit allegedly conferred by Plaintiff's counsel on Diedrich stockholders through Plaintiff's alleged involvement in the transaction. The Amended Complaint seeks class certification, certain forms of equitable relief, including enjoining the completion of the transaction contemplated by the Merger Agreement with GMCR until additional disclosures are provided, and an award of attorneys' fees and expenses. On Dec. 30, 2009, plaintiff filed an application with the Court for a temporary restraining order, a schedule for a motion for preliminary injunction and expedited discovery. On Dec. 31, 2009, the Court denied the Application in its entirety. Diedrich Coffee, Inc. -- http://www.diedrich.com/-- is a specialty coffee roaster, wholesaler and retailer. The company sells brewed, espresso-based and various blended beverages primarily made from its own fresh roasted premium coffee beans, as well as light food items, whole bean coffee and accessories, through company operated and franchised retail locations. DIEDRICH COFFEE: Paid Full Settlement in "Willems" Suit in Oct. --------------------------------------------------------------- Diedrich Coffee, Inc., in October 2009, paid approximately $384,000 to fully settle the purported class-action suit styled Deborah Willems, et al. v. Diedrich Coffee., et al., according to the company's Jan. 25, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 9, 2009. The complaint was filed Feb. 2, 2007, in Orange County, California Superior Court on behalf of another former employee who worked in the position of general manager. The case involves the issue of whether employees and former employees who worked in California stores during specified time periods were deprived of overtime pay, missed meal and rest breaks. In addition to unpaid overtime, this case seeks to recover waiting time penalties, interest, attorneys' fees and other types of relief on behalf of the current and former employees in the purported class. In October 2009, the Company paid approximately $384,000 to fully settle this lawsuit. Diedrich Coffee, Inc. -- http://www.diedrich.com/-- is a specialty coffee roaster, wholesaler and retailer. The company sells brewed, espresso-based and various blended beverages primarily made from its own fresh roasted premium coffee beans, as well as light food items, whole bean coffee and accessories, through company operated and franchised retail locations. DRINK: Former Servers & Bartenders File Class Action Lawsuit ------------------------------------------------------------ Jessica Chapman at The Culinary Underbelly reports that six former Drink servers and bartenders say their former employer made them eat the costs of walk-outs, unsigned credit card receipts, and register shortages in a class action filed this week in Hennepin County District Court in Minnesota. The suit says supervisors also altered time sheets in order not to pay them all the hours they worked. Since they only made minimum wage to begin with, the practice meant they made even less than minimum wage. Among other things, the suit says management would sporadically "announce that the 'till was off' and would require all bartenders who were working to pay . . . to make up for the alleged shortages, which generally ranged from $40 to $200" and "refused to provide documentation of the . . . shortages." Drink has locations in both Uptown and downtown. Spin Nightclub, which is under the same ownership as Drink, is also named in the suit. The six employees worked for both the Updown and downtown Drink locations. EHARMONY, INC: Settles Same-Sex Matching Class Action Litigation ---------------------------------------------------------------- eHarmony, Inc., has entered into an agreement to settle a class action lawsuit brought against the company. The action, Carlson, et. al., v. eHarmony, Inc., et al., Case No. _______ (Calif. Super. Ct., Los Angeles Cty.), was filed in 2007 on behalf of a class of gay, lesbian and bisexual individuals in California who alleged that they were unable to use the company's website to be matched with same-sex partners. The company has not admitted any wrongdoing or liability. The proposed settlement is subject to approval by the Court, following notice to members of the class. In March 2009, eHarmony launched a same-sex matching service called Compatible Partners. The settlement agreement includes provisions by which eHarmony will modify and maintain certain features on the eHarmony.com and Compatible Partners websites to make them even more welcoming to people who seek same-sex matches. These provisions include: (A) Maintain the Compatible Partners website and the ability for people to select "man seeking man" or "woman seeking woman" options from a drop-down menu on the eHarmony.com homepage (B) Identify Compatible Partners as a service "Brought to you by eHarmony" instead of "Powered by eHarmony" (C) Display eHarmony's trademark logo on the Compatible Partners page (D) Indicate in the URL line, HTML line or a tab to first- time Compatible Partners users that they are on an eHarmony website (E) Include a "Gay Dating" link on the bottom of eHarmony.com alongside other links to "Jewish Dating," "Senior Dating," "Hispanic dating," and the like The Settlement Agreement also provides for individuals seeking both same-sex matches and opposite-sex matches to pay a single subscription fee. Additionally under the settlement, all claims will be dismissed and a $2 million settlement fund will be established. Approximately $500,000 will be designated as a fund for claims by the class. Any unclaimed portion of this fund will be donated to a charity designated by the court. Fees to the class counsel will be awarded by the court. Terms for distribution of the settlement fund and other settlement terms will be disclosed in a notice to be sent to class members after preliminary court approval. "We are delighted that eHarmony is making its remarkable technology available to the gay and lesbian community in a way that is more welcoming and inclusive," said co-lead counsel for the plaintiff class: Todd M. Schneider, Esq. SCHNEIDER WALLACE COTTRELL BRAYTON KONECKY LLP 180 Montgomery Street, Suite 2000 San Francisco, CA 94104 Telephone: (415) 421-7100 "eHarmony can be proud of the reputation that it has built as the best dating site on the Internet and it can be proud of the relationship that it is building with the gay and lesbian community," said co-lead counsel for the plaintiff class: Jeremy Pasternak, Esq. LAW OFFICE OF JEREMY PASTERNAK 445 Bush St., 6th Floor San Francisco, CA 94108 Telephone: (415) 693-0300 "This is an excellent agreement. It is gratifying to see eHarmony, Inc. support matching for the gay and lesbian community, which makes the Internet a more open place," said co- lead counsel for the plaintiff class: Joshua G. Konecky, Esq. SCHNEIDER WALLACE COTTRELL BRAYTON KONECKY LLP 180 Montgomery Street, Suite 2000 San Francisco, CA 94104 Telephone: (415) 421-7100 "eHarmony is happy to move beyond this litigation so it can continue building Compatible Partners into a successful service," said outside counsel to eHarmony: Robert E. Freitas, Esq. ORRICK, HERRINGTON & SUTCLIFFE LLP 1000 Marsh Road Menlo Park, CA 94025-1015 Telephone: (650) 614-7400 About eHarmony, Inc. Pasadena, Calif.-based eHarmony, Inc. -- http://www.eharmony.com/ -- was founded in 2000 and is a pioneer in using relationship science to match singles seeking long-term relationships. Its service, available in the United States, Canada, Australia and United Kingdom, presents users with compatible matches based on key dimensions of personality that are scientifically proven to predict highly successful long-term relationships. FIRSTPLUS HOME: Class Action Litigation Pulls Down Credit Rating ---------------------------------------------------------------- Fitch Ratings has downgraded to 'C' -- junk status -- all 35 classes in eight FirstPlus Home Loan Owner Trust residential mortgage backed security (RMBS) transactions listed below. The affected classes have an aggregate balance of approximately $34 million. The downgrades are a result of the ongoing suspension of interest and principal to bondholders by US Bank National Association (the Trustee). Amounts otherwise payable to bondholders are being retained in the trust pending further developments resulting from litigation involving the transactions. The revised ratings reflect both the increased likelihood of both permanent interest shortfalls and principal writedowns. Since bond loss amounts cannot be estimated at this time, Recovery Ratings have not been assigned to the bonds. Over the past several years, there has been litigation involving the FirstPlus Home Loan Owner Trusts based on consumer protection statutes in various states. Most of these class action lawsuits have been settled. However, on Aug. 7, 2009, the Eighth Circuit Court of Appeals reversed a district court's decision and thus significantly increased the amount of potential liability to the trusts in four Missouri class actions. The Trustee petitioned for a rehearing in these cases but was subsequently denied. In separate Arkansas litigation, the Greene County District Court most recently ruled in December 2009 in favor of the plaintiffs stating that the interest paid on the mortgage notes was exorbitant and that the class members are entitled to recovery from the Trusts. As a result of the ongoing litigation and the possibility that the Trust and the Trustee could be held liable for the alleged actions of the originators, the Trustee decided to suspend all distributions to holders in October 2009 pending further developments. This status continued in effect as of the January 2010 remittance date. At this time, it is undetermined when or if these transactions will receive distributions of interest and principal. In addition, all funds that are retained will first be distributed as a payment of fees and costs incurred by the Trustee in performing its duties. The fees and costs due to the Trustee will increase the likelihood that the bonds will incur non-recoverable interest shortfalls and/or principal writedowns resulting in a default. Fitch will continue to monitor these transactions for ongoing developments and their potential impact on the bonds' outstanding ratings. ILLINOIS BELL: Argues Right to Receive Unclaimed Settlement Funds ----------------------------------------------------------------- Amelia Flood at The Madison County Record reports that Madison County Circuit Judge Daniel Stack is set to hear a defense motion asking him to modify an order that settled a seven-year old class action case for more than $21 million last November. Defendant Illinois Bell Telephone Company (AT&T Illinois) seeks an appeal of the award and a cross appeal is in the works from the plaintiffs' side. Judge Stack's Nov. 10 order granted the plaintiffs in the suit summary judgment. The suit was brought against Illinois Bell Telephone and Ameritech Corp. over improper rates the companies charged customers. Lead plaintiff Big Sky Excavating sued the companies in 2003 alleging that they made mistakes in distributing $90 million in refunds and favored certain customers over others. The $90 million was part of a legistlative compromise about redressing the overcharges in 2001. The Theis Law Firm P.C. was later added as another lead plaintiff. Madison County Circuit Judge Phillip Kardis certified the class action in 2004, finding the compromise violated Illinois' constitution. The Illinois Supreme Court later reversed that ruling. Judge Stack inherited the case when Judge Kardis retired. In February 2009, Stack granted Big Sky's move for summary judgment. The plaintiffs' legal team had argued that the phone companies had only returned about $60 of the $90 million at issue. Judge Stack's Nov. 10 order found the remaining damages to total just under $22 million. In the order, he divided the damages. The lead plaintiffs were each to receive $10,000. Stack granted the attorneys $7,223,952.00 in legal fees for more than 3,000 hours of work on the case. The remaining refund available to class members was a total of $14,427,905.00 or $21.20 per phone line, as noted in Stack's order. Any unpaid funds were to be deposited with the Circuit Clerk's Office to be distributed to the Land of Lincoln Legal Assistance Foundation. The plaintiffs had sought an award closer to $30 million. In the Dec. 9, 2009 motion, Illinois Bell asks Judge Stack to modify the Nov. 10 order to allow the company to keep the unclaimed funds. It argues that distributing unused funds to the foundation should only be approved in limited circumstances. "These circumstances are not present here," the motion reads. It goes on to argue that other courts have allowed the company to keep unclaimed refunds in the past. The lead plaintiffs and class is represented by Glenn Bradford and Terrence O'Leary. The defendants are represented by John Papa and others. The case is Madison case number 03-L-715. MDL 1715: Ameriquest Settles 712,000 Borrowers for $22 Million -------------------------------------------------------------- E. Scott Reckard at the Los Angeles Times reports that to settle 29 class-action lawsuits consolidated in In re Ameriquest Mortgage Co. Mortgage Lending Practices Litigation, MDL No. 1715; Master Docket No. 05-cv-07097 (N.D. Ill.) (Aspen, J.), alleging predatory lending, the Ameriquest group of subprime lenders has pledged $22 million to repay aggrieved borrowers and their lawyers -- a fraction of its payments in previous suits before it shut down as the mortgage meltdown set in. The agreement potentially affects 712,000 borrowers from what once was the nation's largest subprime lender, based in Orange County. Many of the loans were from Argent Mortgage Co., an arm that funded borrowers through mortgage brokers. Also settling were AMC Mortgage Services Inc., Bedford Home Loans Inc., Town & Country Credit Corp., Olympus Mortgage Co. and Ameriquest Mortgage itself. The proposal, filed in U.S. District Court in Chicago last month, bars parties from discussing it. Its terms were spelled out in the letters mailed to borrowers beginning last week and online at: http://www.AmeriquestMDLSettlement.com/ The agreement covers loans as far back as Dec. 14, 2001, and sorts claims into five categories, including hefty upfront charges, interest rates that were higher than promised by nine- tenths of a percentage point or more, and loans with variable rates when fixed rates were promised. Payments to borrowers will vary depending on the relative strengths and potential damages of each type of claim. The proposal excludes borrowers who accepted previous individual and class-action settlements. Those include Ameriquest's 2006 payment of $325 million to end an investigation by 49 state attorneys general who alleged it had deceived borrowers, falsified loan documents and pressured appraisers to overstate home values; and a San Mateo County private-party lawsuit on behalf of California, Texas, Alabama and Alaska borrowers that the company settled for $50 million in 2005. The attorneys general settlement provided an average of more than $900 for borrowers who accepted it. By contrast, the class-action settlement, which must be approved by a federal judge, works out to a bit more than $30 for each potential class member, and only $20 after administrative costs and the proposed distribution of $7.3 million in legal fees. Because nonbank lenders such as Ameriquest sold their loans, they maintained very little capital and had few assets to recover when they closed up shop, said Benjamin G. Diehl, a deputy attorney general for California who helped craft the states' agreement with Ameriquest. "Unfortunately, there isn't much left for borrowers," Diehl said. The borrowers have until Feb. 22 to opt out of the settlement if they wish to pursue their own lawsuits. To receive settlement funds, they must fill out and submit a claim form no later than March 9. If they do neither, they would get no money and give up all rights to pursue damages. Class-action lawyer Robert Green of San Francisco said about 20% of such claim forms typically are returned. If that occurs in the Ameriquest class actions, it would boost recovery to an average of about $100 per claim. The settlement includes no payment from the estate of Ameriquest founder Roland E. Arnall, a billionaire who died in 2008, or from the Wall Street firms that funded subprime lenders and transformed the loans into securities that proved toxic when the housing bubble burst. The Plaintiff Class is represented by: Kelly M. Dermody, Esq. LIEFF CABRASER HEIMANN & BERNSTEIN LLP Embarcadero Center West 275 Battery Street, Suite 3000 San Francisco, CA 94111 - and - Rachel Geman, Esq. LIEFF CABRASER HEIMANN & BERNSTEIN LLP 250 Hudson Street, 8th Floor New York, NY 10013 - and - Gary Klein, Esq. Shennan Kavanagh, Esq. RODDY KLEIN & RYAN 727 Atlantic Avenue, 2nd Floor Boston, MA 02111 - and - Jill Bowman, Esq. JAMES HOYER ET. AL. One Urban Centre, Suite 550 4830 West Kennedy Blvd. Tampa, FL 33609-2589 The Defendants are represented by: Bernard E. LeSage, Esq. BUCHALTER NEMER, P.C. 1000 Wilshire Blvd., Suite 1500 Los Angeles, CA 90017 MGIC INVESTMENT: Motion to Dismiss Consolidated Suit Pending ------------------------------------------------------------ MGIC Investment Corp.'s motion to dismiss a consolidated class action complaint remains pending in the U.S. District Court for the Eastern District of Wisconsin, according to the company's Jan. 26, 2010, Form 8-K filing with the U.S. Securities and Exchange Commission. Five previously-filed purported class action complaints filed against the company and several of its executive officers were consolidated in March 2009 in the U.S. District Court for the Eastern District of Wisconsin and Fulton County Employees' Retirement System was appointed as the lead plaintiff. The lead plaintiff filed a Consolidated Class Action Complaint on June 22, 2009. Due in part to its length and structure, it is difficult to summarize briefly the allegations in the Complaint but it appears the allegations are that the company and its officers named in the Complaint violated the federal securities laws by misrepresenting or failing to disclose material information about: (i) loss development in the company's insurance in force, and (ii) C-BASS, including its liquidity. The Complaint also names two officers of C-BASS with respect to the Complaint's allegations regarding C-BASS. The purported class period covered by the Complaint begins on Oct. 12, 2006 and ends on Feb. 12, 2008. The Complaint seeks damages based on purchases of the company's stock during this time period at prices that were allegedly inflated as a result of the purported misstatements and omissions. With limited exceptions, the company's bylaws provide that its officers are entitled to indemnification from the company for claims against them of the type alleged in the Complaint. The company filed a motion to dismiss the Complaint in August 2009 and briefing related to this motion was completed in November 2009. MGIC -- http://www.mgic.com/-- the principal subsidiary of MGIC Investment Corporation, is the nation's leading provider of private mortgage insurance coverage with $212.2 billion primary insurance in force covering 1.36 million mortgages as of December 31, 2009. MGIC serves over 3,300 lenders with locations across the country, Puerto Rico, and other locations helping families achieve homeownership sooner by making affordable low-down- payment mortgages a reality. PETLAND INC: 29 Ariz. Puppy Mill Claims Dismissed & 2 Survive ------------------------------------------------------------- Chris Balusik at the Chillicothe Gazette reports that just two of 31 claims made against Chillicothe, Ohio-based Petland Inc. under the Racketeer Influenced and Corrupt Organizations Act will be allowed to move forward in court, with the remaining 29 claims against the company having been dismissed last week. Petland said it is "pleased, but not surprised," with the Court's ruling in Martinelli, et al. v. Petland, Inc., et al., Case No. 09-cv-00529 (D. Ariz.). "Despite (the Humane Society of the United States') deceptive press release touting a legal win, the court's ruling leaves only two claimants who will be permitted to present the facts of their case to determine if they are entitled to any reimbursement of money based upon the claimed illnesses of their dogs." U.S. District Court Judge David Campbell, in the ruling out of Arizona filed Tuesday, declared that further court action will be needed to resolve claims by the two individual Petland customers who think they bought puppies from company stores based on alleged misrepresentations of the animals' breeding and health made by Petland employees. The lawsuit is an amended complaint that followed dismissal of a similar class action lawsuit filed in March 2009 by six Petland customers. Those customers claimed they bought Petland puppies with the understanding they were bred by legitimate breeders, but later they thought the animals came from substandard "puppy mills." That lawsuit was dismissed because the court thought allegations of misleading actions by Petland were not specific enough to warrant the lawsuit moving forward. The door was left open by the court, however, for plaintiffs to refile the lawsuit with more specifics included. As reported in the Class Action Report on Sept. 13, 2009, with a number of new plaintiffs added, it was. Judge Campbell, in his most recent ruling, indicated 29 of the claims still lacked any specific indications that any Petland employee, Web site or brochure misrepresented the breeding or health of the animals sold or that the customers' beliefs about the puppies' origins were the determining factor in their decision to buy the pets. "The basis for this (puppy origin) belief was not provided, and the complaint did not otherwise allege that Plaintiffs relied on misrepresentations about the origin of Petland puppies when they made their purchases," the ruling says. "In fact, not a single Plaintiff has alleged that he or she ever visited the Defendant's websites, received Defendant's written brochures or relied on a written health certificate or warranty." The judge also said the court cannot assign motives as to why each person decides to buy a pet. "A person might buy a puppy because he falls in love with it in the store window, he has heard it will make a good guard dog, he likes the price, he is referred to the store by a friend or he finds the store convenient," Campbell wrote. "It is not necessarily true that every purchaser would base his or her decision on the fact that the puppy was 'the finest available' or was bred by professional, hobby or USDA-approved breeders -- key misrepresentations identified in the amended complaint." Those 29 complaints were dismissed. The two that survived involved puppy purchases by Elliott Moskow from a Petland store in Topsham, Me., and Karen Galatis in Manchester, N.H. The two stores involved with the claims, according to Petland, were individually owned and operated franchise stores and not corporate-run and have since closed. Petland also indicated Wednesday that it has found no evidence that either Mr. Moskow or Ms. Galatis contacted Petland Inc. to discuss resolution of their complaints prior to the filing of the lawsuit. Mr. Moskow alleges that he specifically asked before purchase whether Petland receives puppies from "puppy mills" and was told the company does not. Ms. Galatis said a Petland employee specifically assured her that her puppy had "never been sick, was up to date on his shots, was not hypoglycemic and was lethargic and quiet only because he was stuck in a cage all day long." Without making a decision on the validity of their claims, Judge Campbell ruled that their questioning prior to purchase and the specifics of the exchanges provided to the court put their two claims on a different level than the others. "In both cases, the factual allegations of the amended complaint reasonably suggest that the Plaintiffs relied on what they were told by Petland employees," he wrote. The court, therefore, indicated it would allow the two plaintiffs' RICO claim to move forward. It also ruled that an unjust enrichment claim -- asserting Petland profited and benefitted from an intent to defraud the two plaintiffs -- will be considered, as will a claim by Mr. Moskow against Petland under the Maine Unfair Trade Practices Act. The claims brought by the other plaintiffs in the case cannot be refiled, with the court concluding they had "been afforded an adequate opportunity to plead their cases." The court will be setting a scheduling conference for the case at a later date. All claims against The Hunte Corp., a puppy breeder also named in both the original and amended lawsuits, were dismissed. The Humane Society of the United States, an animal rights activist group not affiliated with local Humane Society shelters, supported the class action claim and provided attorneys with its Animal Protection Litigation section to help the legal team preparing the case. "Unscrupulous puppy sellers like Petland reap massive profits by pushing unhealthy puppies on well-intentioned dog-lovers who would never knowingly buy a puppy mill dog," said Jonathan Lovvorn, vice president and chief council for Animal Protection Litigation. "This industry has been systematically lying to consumers for decades about the source of the dogs they sell, and it's time for a major correction." Petland said the rejection of the larger class action in the case reinforced its position that it does not use substandard breeders. "Petland is also pleased to report that the Court rejected plaintiffs' broad claims relating to the sale of pets from substandard breeders, referred to by HSUS as 'puppy mills,'" the company indicated. "Petland supports humane breeding practices and the humane treatment of all animals and has provided such support for more than 40 years." PFIZER INC: Pa. Super. Ct. Upholds Class Decertification Decision ----------------------------------------------------------------- Gina Passarella at The Legal Intelligencer reports that a class of plaintiffs in a case against Pfizer over its alleged off-label marketing of an epilepsy drug was properly decertified when Pfizer presented new evidence that the class's main expert didn't prove class members' individual doctors relied on the marketing, the Pennsylvania Superior Court said. The appellate court also ruled a class can be decertified after a decision on the merits if new evidence comes to light. The three- judge Superior Court panel vacated a summary judgment motion in favor of Pfizer now that the class is decertified because leaving the judgment intact would preclude absent class members from bringing individual suits on the same issue. John K. Weston of Sacks & Weston in Jenkintown, Pa., represents the former class led by Gregory Clark and Linda Meashey in Clark v. Pfizer Inc. He argued before the Superior Court in November that Philadelphia Common Pleas Court Judge Mark I. Bernstein improperly decertified the class in February -- a month before trial. Mr. Weston said depositions of a sampling of Pennsylvania doctors who said they prescribed Neurontin for off-label uses but weren't influenced to do so by any Pfizer marketing campaign were not enough to overturn the class. He said it doesn't matter if the doctors said they weren't affected by such a campaign because that is an issue for the jury to decide. Mr. Weston also took issue with the fact that decisions were made in the case between the time the class was certified in 2007 and when it was decertified in 2009. In March 2008, Bernstein granted Pfizer's motion for summary judgment as to the breach of express warranty claims by purchasers of the generic form of Neurontin, gabapentin, which was made by manufacturers not owned by Pfizer. In the same Feb. 9 motion where the class was decertified, Bernstein also granted a summary judgment motion by Pfizer on the plaintiffs' class claims for breach of warranty and Pfizer's motion for summary judgment regarding members of the class who benefited from the off-label use of Neurontin. In arguing the class couldn't be decertified after a partial summary judgment, Weston relied on language in Pennsylvania Rule of Civil Procedure 1710(d), which states "an order under this rule may be conditional and, before a decision on the merits, may be revoked, altered or amended. . . ." Dechert's Robert C. Heim, Esq., argued on behalf of Pfizer and said the courts have to make class certification decisions early in a case and can always decertify later. He said certifications are made on the presumption that injury could be shown on a classwide basis. In citing the Pennsylvania Supreme Court's 2009 decision in Basile v. H&R Block as well as a 3rd U.S. Circuit Court of Appeals decision in Barnes v. American Tobacco, Superior Court Judge Cheryl Lynn Allen said that while there is a general rule under Rule 1710 that classes can't be decertified after rulings on the merits, there is also a long-standing exception. Courts can decertify after a ruling on the merits when new facts or circumstances arise. "In this case, after the trial court certified the class, defendants discovered and produced the deposition testimony of various doctors to establish that Neurontin was prescribed for reasons other than defendant's misrepresentations," Allen said. "This evidence constituted the changed circumstances necessary to empower a trial court to revisit its prior certification order, as it called into question the feasibility and manageability of the class." The class had relied on an expert report by Meredith Rosenthal, an assistant professor of health, economics and policy at Harvard School of Public Health. She concluded in her national study that Pfizer's alleged unlawful conduct "'would likely have resulted in impact'" to the class members because "'economic theory and empirical evidence suggests'" such marketing activities increase off-label prescriptions, according to the opinion. In Clark, the plaintiffs relied on the report to prove classwide causation and reliance for the Pennsylvania class members. Rosenthal said in depositions that she didn't consult or review testimony of Pennsylvania doctors. In a similar case in Massachusetts, a district court judge denied certification based on Rosenthal's statistical model, Allen said. She said Pfizer produced evidence to show Pennsylvania doctors prescribed Neurontin for other reasons aside from marketing pitches, so the class had to show doctor-by-doctor that Pfizer's alleged misrepresentations caused them to prescribe the medicine. Allen said Rosenthal's report doesn't fulfill that requirement. "In sum, statistical probability does not substitute for actual inquiry, as a general showing of percentages does not tend to prove that the class members' specific doctors relied upon defendants' statements or that defendants' statements were the proximate cause of an injury," Allen said. The judge said the plaintiffs didn't meet their burden of showing commonality and typicality in order to certify the class. Allen invoked res judicata principles in vacating the entry of summary judgment in the class's breach of warranty claim. Under the facts and procedure of Clark, she said it would be unfair to bind the absent class members to what would ultimately be a final judgment. "The trial court ruled against the absent class members on only one of their four claims and then decided to dissolve the entire class, thus terminating the class action litigation and the absent class members' ability to proceed with their cause of action," Allen said. "As a result, the absent class members, having received the requisite notice, are bound by the judgment entered against them even though the trial court ruled that the class action was unsustainable under the law." SEARS ROEBUCK: Lawn Mower Status Conference Adjourned to March -------------------------------------------------------------- Amelia Flood at the The St. Clair Record reports that a January status conference in a St. Clair County class action brought over lawn mower horsepower marketing has been moved to March. According to a letter and signed order from Jan. 5, the Jan. 11 status conference in Rhonda Lemay v. Sears Roebuck Company, et. al., has been moved to March 4, 2010, at 10:00 a.m. Lemay's class action is one of a number filed nationwide against Sears and other lawnmower makers. It alleges that the company mismarked lower power machines and sold them as their higher powered counterparts. Lemay had moved to consolidate her case with another suit pending in St. Clair County filed by lead plaintiff Andrew Stone. However, Mr. Stone opposes the move. He filed a motion late last year arguing that Lemay's move to consolidate the case was improper and his case, as the older suit, should take precedence and proceed. Lemay's class action is one of the four 2009 class action cases that remain in St. Clair County. St. Clair County Circuit Judge Michael O'Malley is presiding. Mr. Lemay is represented by JoDee Favre and others. Sears is represented by Charles Swartwout and others. Mr. Stone is represented by Richard Burke. The Lemay case is St. Clair case number 09-L-085. ST. JOSEPH'S MEDICAL: Lawsuit Levies Unnecessary Surgery Charges ---------------------------------------------------------------- Baltimore's WBAL-TV 11 News and WBALTV.com report a class action lawsuit has been filed against St. Joseph's Medical Center after a doctor was accused of performing unnecessary surgeries. It's part of a federal investigation and hospital review that found cases where Dr. Mark Midei placed stents in patients' arteries that weren't medically necessary. At least one victim filed a claim with the Healthcare Alternative Dispute Resolution Office. More than 350 patients were informed they may have received unnecessary stents. The procedure costs about $10,000. In a statement sent to WBAL-TV Thursday evening, the hospital said: "SJMC continues to put our patients' best interests first. Since first becoming aware of these issues involving a single physician, SJMC has taken aggressive action to correct the problem, including by providing information to the patients who are potentially affected. "Based on medical review, the hospital does not believe that patients who were treated and received a stent that was not supported by their catheterization film are at immediate risk. As part of its effort, SJMC also has notified the patients' primary care physicians and cardiologists to inform them of the situation. Patients and their physicians have been contacted by letter sent via overnight delivery." A hospital representative said recently that the physician is no longer employed or affiliated with the hospital. A representative for Dr. Midei told 11 News that the doctor wasn't ready to comment yet. STAPLES INC: Inks $42 Million Global Labor Litigation Settlement ---------------------------------------------------------------- Staples, Inc. (Nasdaq: SPLS) has reached a global settlement in several retail wage and hour class action lawsuits related to the alleged misclassification of its assistant store managers concerning overtime pay. Under the terms of the global settlement, which is subject to court approval, the Company has agreed to pay $42 million to resolve the allegations and avoid further distraction from litigation that has been ongoing for the past three years. The Company has also agreed to drop its appeal of a verdict against it last year in New Jersey. The amounts associated with the previous verdict will be included in the settlement amount, as will interest and class counsel's attorney fees. Staples believes that its store labor model, which is based on a commitment to fair and respectful treatment of its associates, is fully compliant with applicable state and federal law. The global settlement involves no admission of wrongdoing in connection with the allegations, which claimed that assistant store managers were misclassified as exempt from overtime pay. The settlement amount resolves claims for damages dating back as far as 2002 in some cases and covers more than 5,500 current and former associates. About Staples Staples, the world's largest office products company, is committed to making it easy for customers to buy a wide range of office products, including supplies, technology, furniture, and business services. With 2008 sales of $23 billion and 91,000 associates worldwide, Staples serves businesses of all sizes and consumers in 27 countries throughout North and South America, Europe, Asia and Australia. In July 2008, Staples acquired Corporate Express, one of the world's leading suppliers of office products to businesses and institutions. Staples invented the office superstore concept in 1986 and is headquartered outside Boston. TOYOTA MOTOR: Halts U.S. Sales of Camry & Seven Other Models ------------------------------------------------------------ Yuri Kageyama, a Business Writer for The Associated Press, reports from Tokyo that Toyota's decision to suspend U.S. sales of eight of its most popular models -- including the Camry, America's best-selling car -- to fix faulty gas pedals is a stunning blow to the automaker's reputation and endangers its fledgling earnings recovery. The move, unprecedented in scale for an automaker, is also a symbol of the dramatic failings of the aggressive growth strategy Toyota Motor Corp. pursued under former President Katsuaki Watanabe, a cost-cutting expert, who led the Japanese automaker to the No. 1 spot in global vehicle sales, dethroning General Motors Co. in 2008, analysts say. The sales suspension to fix gas pedals that could stick and cause acceleration without warning was announced in the U.S. late Tuesday. Last week, Toyota recalled the same eight models, involving 2.3 million vehicles. Toyota is also halting production at six North American car- assembly plants, beginning the week of Feb. 1, and gave no date on when production could restart. Although Toyota's Japan plants are not affected, the problem could spread to Europe, where a similar accelerator part is being used, and could affect millions more vehicles. The problem part comes from one U.S. supplier and does not affect models that use parts from different suppliers, said a Toyota official who spoke on condition of anonymity. Analysts said the production stoppage signaled a more serious crisis for Toyota than recalls, which are fairly routine for automakers. TOYOTA MOTOR: Lawyers Are Busy Fielding Calls & Filing Lawsuits --------------------------------------------------------------- Nathan Koppel the The Wall Street Journal says that Toyota Motor Corp., it is safe to say, will keep lawyers busy for months to come, reporting that plaintiffs' lawyers across the county are fielding calls from consumers who complain that they have been injured -- or fear they will be -- by unintended acceleration in a range of Toyota vehicles. "We are investigating a number of fatalities and various injuries across the country," Fabrice Vincent, Esq., a lawyer with San Francisco's Lieff Cabraser Heimann & Bernstein LLP, which has fielded about two dozen calls from Toyota owners, told Mr. Koppel. In San Diego, attorney Tim Pestotnik, Esq., said he has been retained in connection with an August crash that killed off-duty California highway patrolman Mark Saylor and three family members, who were riding in a Lexus that allegedly accelerated beyond control and hit another vehicle. "The brakes didn't work," said Mr. Pestotnik. Mostly, though, consumers are complaining about minor injuries or, more commonly, a fear that they might be injured, according to attorneys. Product recalls typically lead to a spike in litigation, said James O'Gara, Esq., a New York attorney who specializes in product-liability suits. The tendency among consumers is to think "everything that goes wrong has something to do with" a recall, he said. Many owners who haven't been injured are still claiming that they have been damaged by a drop in the resale value of their Toyota and Lexus vehicles. Attorneys are jockeying to bring class actions on behalf of potentially thousands of such owners. Consumers also will seek to recover the costs of securing alternate transportation while they await repairs for the problem, said California attorney Michael Louis Kelly, Esq. "The question is whether Toyota will reimburse them," said Mr. Kelly, who added that his firm, Kirtland & Packard LLP, is fielding about 100 calls and 100 emails a day from concerned consumers, and has already filed two suits seeking class-action status. UNION CITY: Class Action Suit Accuses Police of Racial Bias ----------------------------------------------------------- KCBS-TV in California reports that the Union City Police Department has not protected black kids from a Latino gang, according to a class action suit filed by the family of a murdered teenager. Vernon Eddins, 14, was shot to death outside Barnard-White Middle School on December 21, 2007. His mother, Angelique Paige, claims she was discouraged from filing police reports when she complained that her son had been assaulted by alleged members of a group known as the Decoto Gang. "The police told Miss Page that Union City was the Decoto's city and suggested that she move away," said her attorney, Arnold Woods, at a news conference last week. Mr. Eddins murder was committed before several eye witnesses and no arrests have been made. That situation was all the more egregious, Woods said, because Decoto gang members have bragged about the slaying online. Union City., Calif., Police Chief Greg Stewart said he could not comment on the specifics of pending litigation. The department has a "long-standing record of being responsive to and defending the rights of all members of our diverse community," he said in a prepared statement. Mr. Stewart said the department would continue to devote resources to the Eddins case and to other violent crime investigations. UNITED AIRLINES: Small Chicago Firm Gets Most of Pilot Case Fees ---------------------------------------------------------------- Lynne Marek at The National Law Journal reports that the $44 million payday coming for some United Airlines pilots next week from the settlement of a pension dispute will include a $16.4 million payout for their Illinois lawyers. Myron M. Cherry & Associates of Chicago will get the lion's share of the Feb. 3 payment, raking in $9.8 million as class counsel in the long-shot labor dispute. Korein Tillery, a St. Louis-based firm, will take home $6.6 million for chipping in over three years. They represented 2,200 senior United pilots who claimed in a December 2006 federal lawsuit filed in Chicago that they were shortchanged by their union in a distribution of pension benefits related to the airline's bankruptcy. "We thought that was a wrong that was so clear that we could squeeze it into some legal theory," said Myron "Mike" Cherry, who said the award is among the top three biggest ever for his firm. The two small firms triumphed over big-law rivals. Once the pilot plaintiffs defeated a motion for summary judgment last July by the union Air Line Pilots Association International, which was represented by Mayer Brown, and won denial of a motion for reconsideration in September, the case preliminarily settled in October and reached final settlement last month. The settlement was announced last week after a period for appeals had lapsed. The union's bid fell short despite assistance from United and its counsel at Kirkland & Ellis and Reed Smith. The case may represent the biggest award ever in a fair representation case, in which unions are sued over their responsibility to fairly represent their members. "There are relatively few successful fair representation cases, and this is a very significant amount of recovery," said Harry Rissetto, Esq., senior counsel at Morgan, Lewis & Bockius in Washington, D.C. While Mr. Rissetto wasn't involved in the United case, he has represented major airlines. Stephen Tillery, Esq., said he got his firm into the case because it had "some very good facts," namely the skewed distribution of funds that negatively affected older pilots. Mr. Cherry's firm had two full-time lawyers and three part-time attorneys on the case, while Korein Tillery assigned one full- time lawyer and three occasional attorneys. UNITED STATES: Govt. To Pay $7.4 Mil. in Debt Collection Lawsuit ---------------------------------------------------------------- insideARM.com reports that the United States will pay some $7.4 million to settle a class action lawsuit brought by military veterans over the government's debt collection tactics in recovering money owed for on-base purchases. More than 6,700 former members of the military will receive $10,000 each in the settlement. A Federal judge in San Francisco approved the settlement Thursday. At issue in the case was the government's practice of "administrative offset," or intercepting certain federal payments -- like income tax refunds and social security benefits -- to pay down other debts owed to the U.S. In the case, the lead plaintiff argued that the debt he incurred on a base in 1993 had reached the 10 year statute of limitations for the offset program before the government began withholding income tax refunds in 2004. Julius Briggs, a disabled Army veteran, filed the case in 2007 after the U.S. had kept some $2,300 in tax refunds over the previous three years to pay down a $1,857 charge account debt he ran up buying uniforms and other items on a military base in 1993. Once the class was certified, other veterans complained that the Army and Air Force Exchange Service (AAFES), which grants credit to military members for on-base purchases, miscalculated interest and fees and failed to send proper notices after they left the military. Many more also alleged that the offset was used after the statute of limitations had passed. The court sided with the class earlier, agreeing that Briggs' debt had passed the allowable time for the government to use the offset. The 10-year statute of limitations was lifted in 2008. According to the Wall Street Journal, the case is among the first class actions ever to challenge the debt collection tactics of a federal agency. * J. Kevin Snyder to Lead Dykema's Class Action Defense Team ------------------------------------------------------------ The Metropolitan News-Enterprise reports that Los Angeles attorney: J. Kevin Snyder, Esq. DYKEMA GOSSETT PLLC 333 South Grand Avenue, Suite 2100 Los Angeles, CA 90071 Telephone: 213-457-1800 Telephone: 213-457-1850 has been appointed team leader of the firm's Class Action Defense Team. Mr. Snyder's practice focuses on complex business and intellectual property litigation in state and federal court, defending class actions including cases brought under consumer and unfair competition statutes, wage and hour laws, the Fair Credit Reporting Act, the Real Estate Settlement Practices Act, and the Truth in Lending Act, the firm said. The attorney said that the team consists of a core group of about 50 lawyers nationwide who handle class action cases. He explained that his role was to "facilitate putting together our response" when lawsuits are filed against clients by coordinating staffing and "marshalling all the various resources across the country to make sure we're doing the best job for the client." He said he was looking forward to "being able to coordinate our resources and more effectively market the firm's expertise in the class action area." Mr. Snyder estimated that the firm is currently handling about 50 class actions across the country. The 27-year veteran attorney emphasized that class action defense "has been a significant part of my practice since the beginning," adding that there is "a lot of challenge working on cases where there is typically much at stake, clients who are sophisticated, and in an area that's complex and challenging." Mr. Snyder began his legal career with Buchalter Nemer after earning his under graduate and law degrees from USC. He then moved on to spend about 10 years at Robins, Kaplan, Miller & Ciresi LLP before joining Dykema about four and a half years ago. The Midwest-based Dykema maintains offices in California, Illinois, Michigan, Texas and Washington, D.C., and a national practice focused on serving domestic and foreign-based companies and institutions on a variety business issues including corporate governance, litigation, growth strategies and risk reduction, financial services, mergers and acquisitions, international trade, and e-commerce. ********* 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. Gracele D. Canilao, Leah Felisilda and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *