/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/110222.mbx C L A S S A C T I O N R E P O R T E R Tuesday, February 22, 2011, Vol. 13, No. 37 Headlines 3M CO: Suits Over Chemical Exposure in Alabama Still Pending 3M CO: Suits Over Perfluorochemicals in Morgan County Still Stayed 3M CO: Class Certification Issue Still Pending in "Whitaker" Suit 3M CO: "Garcia" Lawsuit Still Pending in Minnesota AMAZON.COM: Sued for Illegally Collecting Customer Information AMR CORP: Turner Plaintiffs' Plan to Pursue Claims Still Unclear AMR CORP: Awaits Final Court Approval of Air Cargo Suit Settlement APPLE INC: Sued Over Unauthorized Transmission of Personal Data AT&T MOBILITY: Supreme Court to Decide on Consumer Class Action BANK OF HAWAII: Faces Class Action Over Overdraft Fee Practices BAYER CORP: Supreme Court to Decide on Baycol Class Action BELL MOBILITY: Judge Authorizes Class Action Over Cellphone Fees CABLEVISIONS SYSTEMS: Continues to Defend Fox Programming Suits CELL THERAPEUTICS: Continues to Defend Securities Suit in Wash. CHILDREN'S HOSPITAL: Dr. Levine Dies Following Sexual Abuse Suit DELTA AIR: Certification of Section 1 Class Status Still Pending ENCORE CAPITAL: Settles Class Action for $5.7 Million EXPRESS SCRIPTS: Motion to Decertify Class Remains Pending EXPRESS SCRIPTS: Continues to Defend Suits in Missouri EXPRESS SCRIPTS: Oral Argument in "Beeman" Suit Set for March 8 FIRSTENERGY CORP: Continues to Defend Suits Over Air Emissions FIRSTENERGY CORP: Penelec Faces Lawsuit Over Air Emissions FIRSTENERGY CORP: Unit Awaits Ruling on Motion to Appeal Order FIRSTENERGY CORP: Allegheny Merger-Related Lawsuits Now Resolved FIRSTENERGY CORP: Appeal From Class Suit Dismissal Still Pending HOSPIRA INC: Still Awaits Ruling on Plaintiffs' Appeal IKEA HOME: Recalls 26,000 SNIGLAR Cribs JAMES PERSE: Recalls 6,700 Units of Men's and Women's Jackets LIQUID COMBUSTION: Recalls 1,800 Sno-Tek Snow Blowers MAY TRUCKING: Sued for Failing to Pay Proper Wages to Drivers MEAD JOHNSON: Still Defends Suits Over "False Claims" for Enfamil NUCOR CORP: Judge Certifies Employee Discrimination Class Action NYSE EURONEXT: Being Sold to Deutsche Borse for Too Little ONTARIO: Faces Class Action Over Abuse at Chatham Institution PERFECT FITNESS: Recalls 7,000 Perfect Pullup PRINCIPAL FINANCIAL: Continues to Defend ERISA Lawsuit in Iowa PRINCIPAL FINANCIAL: Still Defends "Cruise & Mullaney" Suit PRINCIPAL FINANCIAL: Stipulate Dismissal of "Hurd" Class Action QUEST DIAGNOSTICS: Still Defends Suit Over Defective NID Test Kits QUEST DIAGNOSTICS: Still Defends Age Discrimination Suit in N.J. REHABCARE GROUP: Being Sold to Kindred for Too Little, Suit Says SALLIE MAE: Class Action Over Student Loans Can Proceed SAN FRANCISCO, CA: Judge Dismisses Discrimination Claims v. MTC SATYAM COMPUTER: Settles Class Action for $125 Million TIFFANY & CO: Faces Class Action Over Zip Code Policy TOYOTA MOTOR: Seeks Dismissal of Acceleration Class Action U.S. RETAILERS: Calif. Zip Code Ruling Spurs Class Actions WELLCARE HEALTH: Final Settlement Hearing Set for May 4 * Proposed Kansas Bill to Restrict Consumer Class Actions ********* 3M CO: Suits Over Chemical Exposure in Alabama Still Pending ------------------------------------------------------------ 3M Company continues to defend purported class-action lawsuits involving perfluorooctanyl chemistry exposure at or near the company's Decatur, Alabama, manufacturing facility, according to the Company's Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. A former employee filed a purported class action lawsuit in 2002 in the Circuit Court of Morgan County, Alabama, involving perfluorooctanyl chemistry, seeking unstated damages alleging that the plaintiffs suffered fear, increased risk, subclinical injuries, and property damage from exposure to perfluorooctanyl chemistry at or near the Company's Decatur, Alabama, manufacturing facility. The Circuit Court in 2005 granted the Company's motion to dismiss the named plaintiff's personal injury-related claims on the basis that the claims are barred by the exclusivity provisions of the state's Workers Compensation Act. The plaintiffs' counsel filed an amended complaint in November 2006, limiting the case to property damage claims on behalf of a purported class of residents and property owners in the vicinity of the Decatur plant. Also, in 2005, the judge in a second purported class action lawsuit (filed by three residents of Morgan County, Alabama, seeking unstated compensatory and punitive damages involving alleged damage to their property from emissions of perfluorooctanyl compounds from the Company's Decatur, Alabama, manufacturing facility that formerly manufactured those compounds) granted the Company's motion to abate the case, effectively putting the case on hold pending the resolution of class certification issues in the first action filed in the same court in 2002. Despite the stay, plaintiffs filed an amended complaint seeking damages for alleged personal injuries and property damage on behalf of the named plaintiffs and the members of a purported class. No further action in the case is expected unless and until the stay is lifted. 3M Co. -- http://www.3M.com/-- is a diversified technology company with a global presence in various businesses, including industrial and transportation, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications. 3M CO: Suits Over Perfluorochemicals in Morgan County Still Stayed ------------------------------------------------------------------ A purported class-action lawsuit involving perfluorochemicals pending in Morgan County, Alabama, remains stayed, according to 3M Co.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. In February 2009, a resident of Franklin County, Alabama, filed a purported class action lawsuit in the Circuit Court of Franklin County seeking compensatory damages and injunctive relief based on the application by the Decatur wastewater treatment plant of wastewater treatment sludge to farmland and grasslands in the state that allegedly contain perflurooctanoic acid (PFOA), perfluorooctane sulfonate (PFOS) and other perfluorochemicals. The named defendants in the case include 3M, Dyneon LLC, Daikin America, Inc., Synagro-WWT, Inc., Synagro South, LLC and Biological Processors of America. The named plaintiff seeks to represent a class of all persons within the State of Alabama, Inc. who have had PFOA, PFOS and other perfluorochemicals released or deposited on their property. In March 2010, the Alabama Supreme Court ordered the case transferred from Franklin County to Morgan County. In May, 2010, consistent with its handling of the other matters, the Morgan County Circuit Court abated this case, putting it on hold pending the pending the resolution of the class certification issues in the first case filed there. No updates were reported in the Company's latest SEC filing. 3M Co. -- http://www.3M.com/-- is a diversified technology company with a global presence in various businesses, including industrial and transportation, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications. 3M CO: Class Certification Issue Still Pending in "Whitaker" Suit ----------------------------------------------------------------- A request for class certification in a lawsuit alleging employment discrimination against 3M Co. remains pending in Minnesota, according to the Company's Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. In December, 2004, one current and one former employee of the Company filed a purported class action in the District Court of Ramsey County, Minnesota, seeking to represent a class of all current and certain former salaried employees employed by the Company in Minnesota below a certain salary grade who were age 46 or older at any time during the applicable period to be determined by the Court -- the Whitaker Lawsuit. The complaint alleges the plaintiffs suffered various forms of employment discrimination on the basis of age in violation of the Minnesota Human Rights Act and seeks injunctive relief, unspecified compensatory damages (which they seek to treble under the statute), including back and front pay, punitive damages (limited by statute to $8,500 per claimant) and attorneys' fees. In January 2006, the plaintiffs filed a motion to join four additional named plaintiffs. This motion was unopposed by the Company and the four plaintiffs were joined in the case, although one plaintiff's claim was dismissed following an individual settlement. A class certification hearing was held in December 2007. On April 11, 2008, the Court granted the plaintiffs' motion to certify the case as a class action and defined the class as all persons who were 46 or older when employed by 3M in Minnesota in a salaried exempt position below a certain salary grade at any time on or after May 10, 2003, and who did not sign a document on their last day of employment purporting to release claims arising out of their employment with 3M. On April 28, 2009, the Minnesota Court of Appeals reversed the District Court's class certification decision. The Court of Appeals found that the District Court had not required plaintiffs to meet the proper legal standards for certification of a class under Minnesota law and incorrectly had deferred resolving certain factual disputes that were relevant to the class certification requirements. The Court of Appeals remanded the case to the District Court for further proceedings in line with the evidentiary standards defined in its opinion. The trial court took expert testimony on the class certification issue on May 5-6, 2010, and held a hearing on the issue on August 25, 2010. A new decision on whether the case should proceed as a class action is pending. 3M Co. -- http://www.3M.com/-- is a diversified technology company with a global presence in various businesses, including industrial and transportation, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications. 3M CO: "Garcia" Lawsuit Still Pending in Minnesota -------------------------------------------------- The Garcia lawsuit is still in the initial phase of discovery before a Minnesota district court, according to 3M Co.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. The Company was served on May 7, 2009, with a purported class action/collective action age discrimination lawsuit, which was filed in United States District Court for the Northern District of California, San Jose Division -- Garcia Lawsuit. The case has since been transferred to the U.S. District Court for the District of Minnesota. The case is still in the initial phase of discovery. In this case, five former and one current employee of the Company are seeking to represent all current and former salaried employees employed by the Company in the United States during the liability period, which plaintiffs define as 2001 to the present. In addition to the six named plaintiffs, there are presently 86 other current or former employees who have signed "opt-in" forms, seeking to join the action. This number has changed since the case was filed and is likely to change again as the case progresses. The Garcia lawsuit expressly excludes those persons encompassed within the proposed class in the Whitaker lawsuit. The same firm, joined by additional California counsel and local Minnesota counsel for the Garcia lawsuit, represents the plaintiffs in both cases. The allegations of the complaint in the Garcia lawsuit are similar to those in the Whitaker lawsuit. Plaintiffs claim that they and other similarly situated employees suffered various forms of employment discrimination on the basis of age in violation of the federal Age Discrimination in Employment Act. In regard to these claims, plaintiffs seek to represent "all persons who were 46 or older when employed by 3M in the United States in a salaried position below the level of director, or salary grade 18, during the liability period." Because federal law protects persons age 40 and older from age discrimination, with respect to their claim of disparate impact only, plaintiffs also propose an alternative definition of similarly situated persons that would begin at age 40. On behalf of this group, plaintiffs seek injunctive relief, unspecified compensatory damages including back and front pay, benefits, liquidated damages and attorneys' fees. Certain of the plaintiffs' and putative class members' employment terminated under circumstances in which they were eligible for group severance plan benefits and in connection with those plans they signed waivers of claims, including age discrimination claims. Plaintiffs claim the waivers of age discrimination claims were invalid in various respects. This subset of release-signing plaintiffs seeks a declaration that the waivers of age discrimination claims are invalid, other injunctive, but non- monetary, remedies, and attorneys' fees. 3M Co. -- http://www.3M.com/-- is a diversified technology company with a global presence in various businesses, including industrial and transportation, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications. AMAZON.COM: Sued for Illegally Collecting Customer Information -------------------------------------------------------------- Courthouse News Service reports that a class action filed in Los Angeles Superior Court claims Amazon.com illegally collects personal information from customers "for such purposes as marketing and advertising." AMR CORP: Turner Plaintiffs' Plan to Pursue Claims Still Unclear ---------------------------------------------------------------- It remains unclear whether the plaintiffs in the matter Turner v. American Airlines, et al., will pursue their claims, according to AMR Corporation's Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. Approximately 52 purported class action lawsuits have been filed in the U.S. against the Company and certain foreign and domestic air carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation. On October 25, 2006, these cases, along with other purported class action lawsuits in which the Company was not named, were consolidated in the United States District Court for the Northern District of California as In re International Air Transportation Surcharge Antitrust Litigation, Civ. No. 06-1793 (the Passenger MDL). On July 9, 2007, the Company was named as a defendant in the Passenger MDL. On August 25, 2008, the plaintiffs dismissed their claims against the Company in this action. On March 13, 2008, and March 14, 2008, an additional purported class action complaint, Turner v. American Airlines, et al., Civ. No. 08-1444 (N.D. Cal.), was filed against the Company, alleging that the Company violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation in Japan and certain European countries, respectively. The Turner plaintiffs have failed to perfect service against the Company, and it is unclear whether they intend to pursue their claims. In the event that the Turner plaintiffs pursue their claims, the Company will vigorously defend these lawsuits, but any adverse judgment in these actions could have a material adverse impact on the Company, according to the SEC filing. AMR Corporation operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. AMR CORP: Awaits Final Court Approval of Air Cargo Suit Settlement ------------------------------------------------------------------ AMR Corporation is awaiting final approval of its settlement of a consolidated class action lawsuit alleging U.S. antitrust law violations, according to AMR Corp.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. Forty-five purported class action lawsuits have been filed in the U.S. against the Company and certain foreign and domestic air carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to set prices and surcharges on cargo shipments. These cases, along with other purported class action lawsuits in which the Company was not named, were consolidated in the United States District Court for the Eastern District of New York as In re Air Cargo Shipping Services Antitrust Litigation, 06-MD-1775 on June 20, 2006. Plaintiffs are seeking trebled money damages and injunctive relief. To facilitate a settlement on a class basis, the company agreed to be named in a separate class action complaint, which was filed on July 26, 2010. The settlement of that complaint, in which the company does not admit and denies liability, was given preliminary approval by the court on September 8, 2010. The settlement has not yet received final approval, and some members of the class have elected to opt out, thereby preserving their rights to sue the Company separately. AMR Corporation operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. APPLE INC: Sued Over Unauthorized Transmission of Personal Data --------------------------------------------------------------- Daniel Rodimer, et al., on behalf of themselves and others similarly situated v. Apple, Inc., et al., Case No. 11-cv-00700 (N.D. Calif. February 15, 2011), asserts claims for privacy violations and unfair business practices against the multinational giant. The plaintiffs allege that Apple, acting independently and in concert with "Application Developers and Application Developer's Affiliates," knowingly disclosed personal information obtained from the plaintiffs' mobile devices using their Unique Device Identifiers ("UDIDs"), to third party advertisers, in violation of federal computer and privacy laws. The plaintiffs add these violations were made for commercial gain and without plaintiffs' consent. The Complaint says that Apple failed to block access to, and void the licensing agreements of defendant Application Developers even after it received notice of individual and concerted actions. The plaintiffs are represented by: William M. Audet, Esq. Michael McShane, Esq. Jonas P. Mann, Esq. AUDET & PARTNERS, LLP 221 Main Street, Suite 1460 San Francisco, CA 94105 Telephone: (415) 568-2555 E-mail: waudet@audetlaw.com mmcshane@audetlaw.com jmann@audetlaw.com - and - Richard Lockridge, Esq. Robert Shelquist, Esq. LOCKRIDGE GRINDAL NAUEN P.L.L.P. 100 Washington Avenue South, Suite 2200 Minneapolis, MN 55401 Telephone: (612) 339-6900 E-mail: ralockridge@locklaw.com rkshelquist@locklaw.com - and - Joseph H. Malley, Esq. LAW OFFICE OF JOSEPH H. MALLEY 1045 North Zang Blvd. Dallas, TX 75208 Telephone: (214) 943-6100 E-mail: malleylaw@gmail.com AT&T MOBILITY: Supreme Court to Decide on Consumer Class Action --------------------------------------------------------------- Carol Bengle Gilbert, writing for Yahoo News, reports that in AT&T Mobility v. Concepcion, the Supreme Court will decide whether a company has the right to require customers doing business with it to sign away their right to participate in class action lawsuits. What led to the lawsuit? The Concepcions signed a contract and thought they were getting a package discount on two phones, only to pay sales tax on the full price of the phones, which resulted in a $30 claim. They sued, contending it was a fraud for AT&T to advertise the discounted package then charge them tax on the full-price of both phones. Why does it matter whether this case is heard as a class action? Every consumer signing the same contract with potentially had an identical claim against AT&T. Individually, each of those claimants, including the Concepcions, were out so little money, it would cost more to hire a lawyer than they could recover if they won. But AT&T collected millions of dollars through these charges. By pooling their resources on legal representation, consumers can afford to pursue their legal claims. How did the case come to be before the U.S. Supreme Court? The Concepcions filed suit against AT&T in the U.S. District Court for the Southern District of California. The court combined their case a class action case known as Laster that raised the same issues. AT&T tried to get the case dismissed, arguing that its contract both required the Concepcions to resolve disputes through arbitration (which resolves the dispute outside of the court system) and forbid the Concepcions to pursue a class action. The district court refused to dismiss the case, and AT&T filed an appeal of that ruling to the 9th U.S. Circuit Court of Appeals. The 9th Circuit upheld the district court's opinion, and AT&T appealed to the U.S. Supreme Court. What is the basis of the Circuit Court decision? The 9th Circuit said based on earlier court rulings, the Concepcions had to meet three criteria in order for the clause barring class actions to be ruled unconscionable and, therefore, unenforceable. The contracts must be contracts of adhesion, meaning one party unilaterally created the contract and imposed it on the other; the dispute must be over relatively small sums of money; and the party that drafted the contract must be found to have used its superior bargaining power to cheat large numbers of people out of small amounts of money. What is the key issue before the U.S. Supreme Court? The Federal Arbitration Act governs arbitration agreements and determines whether and under what conditions they are enforceable. Generally, that law says arbitration agreements are enforceable unless the state law requirements for revoking a contract are met. When a specific provision of an arbitration agreement, like a class-action ban, is unenforceable under state law, does the state law or the FAA determine the outcome? Why does this case matter? When a consumer does business with a corporation, the contract setting out the terms is generally a standard one imposed by the corporation. With increasing frequency, such contracts contain arbitration clauses, requiring a customer to resolve any claim against the company through arbitration rather than a lawsuit. The rationale behind such clauses is that arbitration is less expensive and procedurally simpler than a court case. Courts have upheld such arbitration clauses where they don't unfairly limit the consumer's rights to recover damages due them. If the court rules for the Concepcions, AT&T argues that companies will not be willing to enter into arbitration agreements because they will no longer offer advantages over traditional litigation. If the court rules for AT&T, plaintiffs whose individual legal fees would exceed their potential recovery in litigation will be deterred from seeking recompense due them, allowing corporations to help themselves to millions of dollars by getting small sums from large numbers of people. BANK OF HAWAII: Faces Class Action Over Overdraft Fee Practices --------------------------------------------------------------- Dave Segal, writing for Star Adviser, reports that Bank of Hawaii has been sued by customers alleging the bank used "unfair and deceptive overdraft fee practices." The complaint, filed as a class action on Feb. 15 in state Circuit Court on behalf of Honolulu residents Lodley and Tehani Taulava, accuses Bank of Hawaii of engaging in a systematic policy of re-ordering debit card transactions from highest dollar amount to lowest dollar amount. The suit said this practice allowed the bank to deplete the customer's available funds as quickly as possible while maximizing the number of overdraft fees. Bank of Hawaii spokesman Stafford Kiguchi said on Feb. 16 that the bank changed its policy last month and now generally posts transactions from lowest dollar amount to highest. "This minimizes overdraft fees paid by customers," Mr. Kiguchi said. The suit cited an example involving the Taulavas in which they were charged four overdraft fees of $26 each, or a total of $104, from debits that were posted on the same day (Aug. 18, 2010). The Taulavas had five transactions that day, including an ATM withdrawal, totaling $115.11. The debits were processed from highest to lowest. The suit said that if the bank had processed the transactions from lowest to highest or chronologically (based on time of day), the Taulavas would have been assessed only one overdraft fee of $26. "Banks should not be allowed to gouge customers by unfairly manipulating the manner in which transactions are posted and overdrafts are charged," said John Perkin, a partner with Perkin & Faria LLLC, which represents the plaintiffs. "Such practices make it more difficult for thousands of Hawaii families to make ends meet. We are continuing to investigate other banks in Hawaii." Mr. Kiguchi said the bank is aware of customers' concerns about overdraft fees. He said that until the bank changed its policy that this had been a common practice based on the belief that the higher debits were someone's mortgage, tuition or car payments. Mr. Kiguchi said there are also many other ways customers can avoid overdraft fees. "To ensure that customers know how much money they have to spend without overdrawing their account, Bank of Hawaii provides account balances through Internet banking, mobile banking, Bankoh by Phone and at ATMs," Mr. Kiguchi said. "The bank provides ways to avoid having transactions denied and offers customers the ability to avoid overdrafts by linking a line of credit or savings account to their checking account." This is the first such lawsuit against a Hawaii bank, but several mainland banks were recently sued over similar practices, Perkin & Faria said in a news release. In August 2010, a California judge awarded Wells Fargo customers in that state $203 million in damages related to the bank's overdraft fee practices. Last month, a judge in Washington, D.C., approved a settlement in which National City Bank agreed to pay its customers $12.5 million. Earlier this month, Bank of America agreed to pay its customers $410 million. The three mainland firms that are assisting Perkin & Faria in the Honolulu suit -- Tycko & Zavareei LLP, Kopelowitz Ostrow and Chitwood Harley Harnes LLP -- also were involved in one or all of those other recent settlements. BAYER CORP: Supreme Court to Decide on Baycol Class Action ---------------------------------------------------------- Carol Bengle Gilbert and Carol Bengle Gilbert, writing for Yahoo News, report that the U.S. Supreme Court is to decide on Smith v. Bayer class action. The U.S. Supreme Court on Jan. 18 took a close look at a federal court's jurisdiction in class-action cases. The court must decide whether a federal court that denied class certification can prevent individuals who were not the named representatives of the proposed class from seeking class action certification in state, instead of federal, court. What is this case about? This case involves a federal court order stopping parties from seeking class-action certification in state court. Normally, the Anti-Injunction Act forbids a federal court from issuing an injunction affecting state court proceedings. There are exceptions to the rule, including the relitigation exception at issue in this case. The 8th U.S. Circuit Court decision is based on this exception; the court determined that its ruling in the federal case involved the same issues as those in the state cases and that the state plaintiffs were prospective members of the class proposed by the federal plaintiff. One important nuance is that the named parties for the two would- be classes -- the one denied by the federal court and the one proposed in state court -- are different. The court will decide whether this is significant in determining the proper scope of the relitigation exception. How did this case develop? George McCollins sought to certify a class-action suit against Bayer, the maker of Baycol, a prescription drug used to lower cholesterol, in a West Virginia state court. Bayer successfully petitioned to have the case moved to federal district court. Before being pulled from the market, Baycol was linked to 31 deaths in the United States. However, Mr. McCollins did not suffer adverse side effects from Baycol. Instead, he sued under state law claiming a breach of warranty and violation of the Consumer Protection Act. The court found that these consumer economic loss claims depended on an assessment of individual issues of fact and denied his motion to pursue a class action. Two other former Baycol users, Keith Smith and Shirley Sperlazza, had filed a case similarly premised on economic losses in a West Virginia state court one month after Mr. McCollins. Because the grounds for removal to federal court were not met in that case, it remained in state court. After the federal district court refused to certify the McCollins class, and the time for appealing that decision expired, Mr. Smith and Ms. Sperlazza sought class action certification in their case in state court. Bayer sought an injunction to prevent the state court action, and the district court granted its motion on the grounds that the issue had already been decided by the federal court. Had the class proposed by Mr. McCollins been certified, Mr. Smith and Ms. Sperlazza would have been included within its scope. Mr. Smith and Ms. Sperlazza filed an appeal to the 8th Circuit, which affirmed the district court decision. What will the Supreme Court decide? The Supreme Court will decide whether the proposed class action filed by Mr. Smith and Ms. Sperlazza falls under the Anti- Injunction Act's exception that allows a federal court to stop a state court action when the state court would be relitigating an issue decided in federal court. Mr. Smith and Ms. Sperlazza contend that they had no knowledge of the McCollins case, were not parties, and were deprived of procedural protections they would have had had the class been certified. Therefore, they contend that the federal court's decision should not be binding on them. The Supreme Court's decision will determine whether Mr. Smith and Ms. Sperlazza may proceed with their bid to obtain state court certification of a class action or must litigate their claims individually. Why is the case significant? The case is important because it construes the right of a federal court to enjoin state court action under the relitigation exception. Of particular significance is the fact that the parties enjoined at the circuit level were not involved in the federal litigation and did not receive any notice or right to participate since the proposed class was never certified. This case potentially affects not only the rights of individuals to sue in state courts but the rights of state courts to proceed on cases when similar claims have been rejected in the federal court system. BELL MOBILITY: Judge Authorizes Class Action Over Cellphone Fees ---------------------------------------------------------------- Kathryn Leger, writing for Montreal Gazette, reports that the fees consumers have to pay to cellphone companies will again come under court scrutiny following the authorization of a Quebec class- action lawsuit against Bell Mobility that became public last week. Superior Court Justice Francine Nantel authorized the class action launched by former Bell Mobility customer Denis Gagnon over early- termination fees he was billed. According to the suit, Mr. Gagnon was not told when a salesperson offered to exchange a newer model for his older one that he was signing a contract for 36 months of service or that he would have to pay contract cancellation charges. He was subsequently charged $220 when he decided to change service providers. Under changes to Quebec's Consumer Protect Act that came into force last June 30, companies must disclose more information to consumers and there are set limits on how much a client can be billed for ending a contract. Benoit Gamache, of BGA Avocats LLP, the law firm that filed the class action on behalf of Gagnon, said the authorization is intended to cover all clients who had to pay early termination fees from Jan. 1, 2007 to when the new consumer protection law came into force. "These fees are excessive and illegal and are not mentioned in the contract," said Mr. Gamache, who estimates upward of 10,000 people in Quebec could stand to win reimbursement if the class action suit is won. "In the case of a small company, such fees could reach thousands of dollars," he added. BGA Avocats has filed a similar case against Rogers and Telus - also over early-termination fees. Last year, BGA Avocats reached an out-of-court settlement in a class action filed on behalf of Bell Canada and Bell Mobility clients who paid late payment charges on payments made before the payment deadline provided on their bill. Lawyers Valerie Beaudin and Jeanne Morency, of Beaudin & Associes, are representing Bell Mobility in the latest certification. Quebec has a new Court of Appeal judge and three Montreal lawyers have been named to the bench of Quebec Superior Court by Canadian justice minister and attorney general Rob Nicholson. Richard R. Wagner, a judge with the Montreal division of Quebec Superior Court, will now serve on the Quebec Court of Appeal. Wagner, a former batonnier of the Barreau de Montreal and an accredited mediator, moves to Quebec's highest court after six years ruling at the Montreal division of Quebec Superior Court. Before that, he practiced civil litigation and commercial law with Lavery LLP. Louis J. Gouin, a lawyer with Ogilvy Renault LLP in Montreal since 1975, will replace Wagner as a judge of Quebec Superior Court. As a lawyer, Gouin specialized in corporate reorganizations, bankruptcy and insolvency, banking law and litigation. Another bankruptcy and insolvency specialist also joins the bench. Mark Schrager, a lawyer with Davies Ward Phillips & Vineberg LLP since 2004, has been appointed a judge at Montreal's Quebec Superior Court. Mr. Schrager also practiced in financial- restructuring and asset-based lending with Goldstein, Flanz & Fishman LLP for 24 years before joining Davies. Montreal solo practitioner Michael Stober joins the Montreal division of Quebec Superior Court as judge. Mr. Stober was recently in the news representing Montreal's police brotherhood in the court case resulting from the 2008 shooting of Montreal teenager Fredy Villanueva. Before setting up his own practice with a specialty in criminal, penal and disciplinary law in 2001, Stober was an associate with Yarosky, Daviault, La Haye, Stober & Issacs. He is a former attorney for the Surete du Quebec, the provincial police force, and also worked as a Crown prosecutor and agent of the Attorney General. E. Paul Legault, a business lawyer with a specialty in international business, trade and investment, has left Fraser Milner Casgrain LLP after 12 years to join the corporate commercial law group at Miller Thomson Pouliot LLP in Montreal. Legault has advised European manufacturing and service businesses and has a special connection with Italy. The Italian-fluent Legault is co-president of the Canada-Italy Business Council, created in 2002 by the Italian and Canadian international trade government departments, and is a member of the board of directors of the Italian Chamber of Commerce in Canada. The Lawyer of the Week profiled in an upcoming interview on Legal Matters, The Gazette's online legal page at www.montrealgazette.com/legalmatters, is Suzanne Cote, the head of the litigation team at Osler, Hoskin & Harcourt LLP in Montreal. Cote, who joined Osler late last year after leading the litigation team at Stikeman Elliott LLP for almost nine years, is one of under a handful of Canadian lawyers named as a 2011 Client Service All-Star by BTI Consulting, Inc., a Wellesley, Mass-provider of survey research to law firms and general counsel. It bases its choice of All-Stars on interviews with corporate counsel. CABLEVISIONS SYSTEMS: Continues to Defend Fox Programming Suits --------------------------------------------------------------- Cablevisions Systems Corporation continues to defend itself from class action lawsuits filed by Cablevisions customers seeking recovery for lack of Fox programming, according to the Company's February 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2010. Following expiration of the affiliation agreements for carriage of certain Fox broadcast stations and cable networks on October 16, 2010, News Corporation terminated delivery of the programming feeds to Cablevision, and as a result, those stations and networks were unavailable on the Company's cable television systems. On October 30, 2010, Cablevision and Fox reached an agreement on new affiliation agreements for these stations and networks and carriage was restored. Several class action lawsuits have been filed on behalf of Cablevision customers seeking recovery for lack of Fox programming. The plaintiffs in those lawsuits have asserted claims for breach of contract, unjust enrichment, and consumer fraud. The Company believes these claims are without merit and intends to defend these lawsuits vigorously. Cablevision and CSC Holdings, as the case may be, will accept for payment all notes that were validly tendered at or prior to the Expiration Time. Subject to the satisfaction of the conditions to the tender offers, the final settlement date for notes validly tendered after the Early Tender Premium Deadline but at or prior to the Expiration Time was on March 16, 2009. Notes validly tendered at or prior to the Early Tender Premium Deadline were settled on March 2, 2009. CELL THERAPEUTICS: Continues to Defend Securities Suit in Wash. --------------------------------------------------------------- Cell Therapeutics, Inc., continues to defend itself from an amended consolidated class action complaint pending in Washington, according to the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 31, 2010. On March 12, 2010, a purported securities class action complaint was filed in the United States District Court for the Western District of Washington against Cell Therapeutics, Inc., and certain of the Company's officers and directors, styled Cyril Sabbagh, individually and on behalf of all others similarly situated v. Cell Therapeutics, Inc., Dr. James A. Bianco, M.D., and Dr. Jack W. Singer (Case No. 2:10-sv-00414). On March 19, 2010, a substantially similar class action complaint was filed in the same court, styled Michael Laquidari, individually and on behalf of all others similarly situated v. Cell Therapeutics, Inc., Dr. James A. Bianco, M.D., and Dr. Jack W. Singer (Case No. 2:10-cv-00480). On March 31, 2010, a third substantially similar class action complaint was filed in the same court, styled William Snyder, individually and on behalf of all others similarly situated v. Cell Therapeutics, Inc., James A. Bianco, Phillip M. Nudelman, Louis A. Bianco, John H. Bauer, Richard L. Love, Mary O. Mundinger, Jack W. Singer, Frederick W. Telling and Rodman & Renshaw, LLC (Case No. 2:10-cv-00559). The securities actions are pending before Judge Marsha Pechman in the Western District of Washington. The securities complaints allege that the defendants violated the federal securities laws by making certain alleged false and misleading statements. The plaintiffs in the Sabbagh and Laquidari actions seek unspecified damages on behalf of a putative class of purchasers of the Company's securities from May 5, 2009, through February 8, 2010. The plaintiffs in the Snyder action seek unspecified damages on behalf of a putative class of purchasers of the Company's securities from May 5, 2009, through March 19, 2010, including purchasers of securities issued pursuant to or traceable to the Company's July 22, 2009, public offering. On May 11, 2010, motions were filed to consolidate the securities actions and to appoint lead plaintiff and lead plaintiffs' counsel. On August 2, 2010, the court consolidated the three securities actions, appointed lead plaintiffs, and approved lead plaintiffs' counsel. On September 27, 2010, lead plaintiff filed an amended consolidated complaint. On October 27, 2010, the defendants filed a motion to dismiss the amended consolidated complaint. Plaintiffs filed an opposition on December 3, 2010, and defendants filed their reply on December 22, 2010. The hearing on the motion to dismiss was held on January 28, 2011. On Feb. 4, 2011, the court issued an order denying in large part the defendants' motion. Defendants' deadline to file an answer to the remaining claims in the amended consolidated complaint was February 18, 2011. CHILDREN'S HOSPITAL: Dr. Levine Dies Following Sexual Abuse Suit ---------------------------------------------------------------- Bostonist reports that just one day after being named in a class action lawsuit over sexual abuse allegations against him, Dr. Melvin D. Levine has died, his attorney Edward Mahoney said Friday. No details on his death were released and his family had no comment. On Feb. 17, 40 people filed suit against Dr. Levine and Children's Hospital in Suffolk Superior Court on Feb. 16 for alleged molestation while he worked at Children's Hospital from 1966 through 1985. Dr. Levine was accused of medical malpractice and sexual abuse and the hospital is accused of negligence. Boston lawyer Carmen L. Durso alleged that there are about 5,000 boys who were victims. Dr. Levine's attorney, Edward Mahoney, said he denied the allegations. Children's Hospital said the only complaint it received against Dr. Levine was made after he left the hospital. That complaint, Children's Hospital said, was investigated, and no inappropriate conduct was found. Dr. Levine did surrender his license to practice medicine in 2009 due to other allegations of misconduct. David Abel and Martin Finucane, writing for The Boston Globe, report that Children's Hospital has issued a statement, saying it was "a national leader in child protection and we are committed to protecting all children, including those treated at the hospital. Children's Hospital would not, and did not, cover up any inappropriate conduct relating to Dr. Levine." The hospital said Dr. Levine hadn't practiced there for 25 years and the allegations went back further than that. It also said it never received a complaint while he was there. One complaint after he left was investigated, his actions were found appropriate, and a court dismissed the claims, the hospital said. "The fact of the matter is that except for the one complaint we investigated, no one alerted the hospital to any concerns regarding Dr. Levine. The hospital supervised Dr. Levine's practice in accordance with the applicable standards of the time," the hospital said. At the same time, the statement said, "If the allegations of these former patients are true, we are devastated and our most heartfelt sympathies go out to the victims of Dr. Levine's wrongdoing." In March 2009, Dr. Levine signed an agreement with the medical board in North Carolina, where he now lives, saying that he would never practice medicine again, the Globe reported. The agreement came after allegations were brought that he had performed improper genital examinations on boys there. A lawsuit filed by Ms. Durso in 2008 in Superior Court accused Dr. Levine of abusing at least seven boys who came to him for treatment. DELTA AIR: Certification of Section 1 Class Status Still Pending ---------------------------------------------------------------- Plaintiffs' motion to certify the Section 1 class in the case entitled In Re Delta/AirTran Baggage Fee Antitrust Litigation is still pending, according to Delta Air Lines, Inc.'s February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. In May, June and July, 2009, a number of purported class action antitrust lawsuits were filed in the U.S. District Courts for the Northern District of Georgia, the Middle District of Florida, and the District of Nevada, against Delta and AirTran Airways. The plaintiffs originally alleged that Delta and AirTran engaged in collusive behavior in violation of Section 1 of the Sherman Act in November 2008 based upon certain public statements made in October 2008 by AirTran's CEO at an analyst conference concerning fees for the first checked bag, Delta's imposition of a fee for the first checked bag on November 4, 2008 and AirTran's imposition of a similar fee on November 12, 2008. The plaintiffs sought to assert claims on behalf of an alleged class consisting of passengers who paid the first bag fee after December 5, 2008 and seek injunctive relief and unspecified treble damages. All of these cases have been consolidated for pre-trial proceedings in the Northern District of Georgia by the Multi-District Litigation Panel. In February 2010, the plaintiffs in the MDL proceeding filed a consolidated amended class action complaint which substantially expanded the scope of the original complaint. In the consolidated amended complaint, plaintiffs added new allegations concerning alleged signaling by both Delta and AirTran based upon statements made to the investment community by both carriers relating to industry capacity levels during 2008-2009. Plaintiffs also added a new cause of action against Delta alleging attempted monopolization in violation of Section 2 of the Sherman Act, paralleling a claim previously asserted against AirTran but not Delta. In August 2010, the District Court issued an order granting Delta's motion to dismiss the Section 2 claim, but denying its motion to dismiss the Section 1 claim. Plaintiffs have filed a motion to certify the Section 1 class, which Delta has opposed. This motion remains pending. The Company believes that the claims in these cases are without merit and are vigorously defending these lawsuits. ENCORE CAPITAL: Settles Class Action for $5.7 Million ----------------------------------------------------- Jessica Silver-Greenberg, writing for The Wall Street Journal, reports that Encore Capital Group Inc. said it agreed to settle all pending class-action lawsuits accusing the nation's largest buyer of distressed consumer debt of using flawed or even phony affidavits to collect money it was owed. J. Brandon Black, Encore's president and chief executive, said in an interview on Feb. 17 that the San Diego company reached agreements to settle an unspecified number of suits across the U.S. for as much as $5.7 million. In the most prominent case, an Ohio federal judge ruled in 2009 that Encore violated federal and state laws by trying to collect credit-card debt using a fake affidavit. Encore disclosed its settlement of the Ohio suit on Feb. 14 in a Securities and Exchange Commission filing. The Ohio lawsuit was part of a page-one article in November in The Wall Street Journal about the surge in lawsuits filed against people who aren't paying their bills. Encore and rival debt- collection firms buy delinquent credit-card obligations and other loans in large batches, sometimes filing lawsuits to recover the money. In the interview, Mr. Black said the article led to "more and more lawsuits related to the company's affidavit practices." "We were subjected to copycat lawsuits because of that article and other articles, so we decided to settle all pending class-action lawsuits related to our affidavit practices," he said. Mr. Black said there is nothing wrong with Encore's paperwork procedures, adding that executives decided a nationwide settlement would allow the company to avoid distracting, costly litigation. An attorney representing plaintiffs didn't respond to a request for comment. Some regulators and judges have complained that documents submitted to courts by debt collectors as proof of what a borrower owes frequently are sloppy or fraudulent. The accounts bought by debt-collection firms often lack information about the underlying debts, such as contracts or payment histories, according to judges who rule on collection cases. In the securities filing Monday, Encore said Texas Attorney General Greg Abbott ordered the company last month to turn over some documents related to an ongoing investigation of its "methods of collecting consumer debts" in the state. California's attorney general also is conducting a probe of Encore's collection practices. Encore said it "intends to cooperate fully" with both investigations. In the Ohio case, U.S. District Judge David A. Katz concluded that Encore employees determined the validity of debt "based entirely" on a printout. He rejected Encore's request to throw out the suit. As part of the suit, an employee of Encore subsidiary Midland Funding LLC testified in a deposition that he signs 200 to 400 affidavits a day, and few of them are reviewed for accuracy. "As far as what I deal with, they just come from the printer as far as where we get them," the employee said. Encore is the largest publicly traded debt-buying firm by revenue in the U.S. In 2010, the company collected $266.7 million through lawsuits, up 15% from $232.7 million a year earlier. The number of suits filed against borrowers rose 27% to 425,000 last year from 334,000 in 2009. Monday, Encore reported 2010 net income of $49.1 million, up 50% from $33 million in 2009. Revenue climbed 21% to $381.3 million from $316.4 million. EXPRESS SCRIPTS: Motion to Decertify Class Remains Pending ---------------------------------------------------------- Express Scripts, Inc.'s motion to decertify the class in the matter North Jackson Pharmacy, Inc., et al. v. Express Scripts, Civil Action No. CV-03-B-2696-NE, remains pending, according to the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 31, 2010. The suit was filed Oct. 1, 2003, and purports to be a class action against the company on behalf of independent pharmacies within the United States. The complaint alleges that certain of the company's business practices violate the Sherman Antitrust Act, 15 U.S.C Section 1, et. seq. The suit seeks unspecified monetary damages (including treble damages) and injunctive relief. Plaintiffs' motion for class certification was granted on March 3, 2006. A motion filed by the plaintiffs in an antitrust matter against Medco and Merck in the Eastern District of Pennsylvania before the Judicial Panel on Multi-District Litigation requesting transfer of this case and others to the Eastern District of Pennsylvania for MDL treatment was granted on Aug. 24, 2006. The company filed a motion to decertify the class on Jan. 16, 2007, and it has been fully briefed and argued. The company is awaiting the Court's decision on its motion. Express Scripts, Inc. -- http://www.express-scripts.com/-- one of the largest pharmacy benefit management companies in North America, is leading the way toward creating better health and value for patients through ConsumerologySM, the advanced application of the behavioral sciences to healthcare. This approach is helping millions of members realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior. Headquartered in St. Louis, Express Scripts provides integrated PBM services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services. EXPRESS SCRIPTS: Continues to Defend Suits in Missouri ------------------------------------------------------ Express Scripts, Inc., continues to defend itself from various lawsuits pending in Missouri, according to the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2010. The Judicial Panel on Multi-District Litigation on April 29, 2005, transferred a number of previously disclosed cases to the Eastern District of Missouri for coordinated or consolidated pretrial proceedings was transferred in 2008: -- Minshew v. Express Scripts (Case No.Civ.4:02-CV-1503, United States District Court for the Eastern District of Missouri) (filed December 12, 2001); -- Lynch v. National Prescription Administrators, et al. (Case No. 03 CV 1303, United States District Court for the Southern District of New York) (filed February 26, 2003); -- Mixon v. Express Scripts, Inc. (Civil Action No. 4:03CV1519, United States District Court for the Eastern District of Missouri) (filed October 23, 2003); -- Cameron v. Express Scripts, Inc. (Civil Action No. 4:03CV001520; United States District Court of the Eastern District of Missouri) (filed October 23, 2003); -- Food Employers Labor Relations Association and United Food and Commercial Workers Health and Welfare Fund (Weiss) v. Express Scripts, Inc. (Civil Action No. 4:06CV01612 for the United States District Court Eastern District of Missouri)(filed November 6, 2006); -- United Food and Commercial Workers Unions and Participating Employers Health and Welfare Fund (Lowthers) (Civil Action No. 4:06CV01541 for the United States District Court for the Eastern District of Missouri) (filed October 20, 2006); -- United Food and Commercial Workers Health and Welfare Fund of Northeastern Pennsylvania (Kessler) v. Express Scripts, Inc. (Civil Action No. 4:06CV01526 for the United States District Court Eastern District of Missouri) (filed October 17, 2006); -- Washington Wholesalers Health and Welfare Fund v. Express Scripts, Inc. (Civil Action No. 4:06CV01007 for the United States District Court Eastern District of Missouri) (filed June 30, 2006); -- Local 888 Health Fund (Bruny) v. Express Scripts, Inc. (Civil Case No. 4:06CV01611 for the United States District Court Eastern District of Missouri) (filed November 6, 2006); -- Wagner et al. v. Express Scripts (Case No.04cv01018 (WHP), United States District Court for the Southern District of New York) (filed December 31, 2003); -- Scheuerman, et al v. Express Scripts (Case No.04-CV-0626 (FIS) (RFT), United States District Court for the Southern District of New York) (filed April 27, 2004); -- Correction Officers' Benevolent Association of the City of New York, et al. v. Express Scripts, Inc. (Case No.04-Civ- 7098 (WHP), United States District Court for the Southern District of New York) (filed August 5, 2004); -- United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund, et al v. National Prescription Administrators, Inc., et al. (Case No.04-CV-7472, United States District Court for the Southern District of New York) (filed September 21, 2004); -- Central Laborers' Welfare Fund, et al v. Express Scripts, Inc., et al (Case No.B04-1002240, United States District Court for the Southern District of Illinois) (filed September 27, 2004); -- 1978 Retired Construction Workers Benefit Plan (Nagle) v. Express Scripts, Inc. (Civil Action No. 4:06-CV01156 for the United States District Court Eastern District of Missouri) (filed August 1, 2006); -- Fulton Fish Market Welfare Fund (Circillo) v. Express Scripts, Inc. (Civil Action No. 4:06-cv-01458 for United States District Court for the Eastern District of Missouri) (filed October 3, 2006); -- Philadelphia Corporation for the Aging v. Benecard Services, Inc., et al. (Civil Action No. 06CV2331 for the United States District Court Eastern District of Pennsylvania) (filed June 2, 2006); -- New England Health Care Employees Welfare Fund (Brown) v. Express Scripts, Inc. (Case No.4:05-cv-1081, United States District Court for the Eastern District of Missouri) (filed October 28, 2004); -- Local 153 Health Fund, et al. v. Express Scripts Inc. and ESI Mail Pharmacy Service, Inc. (Case No.B05-1004036, United States District Court for the Eastern District of Missouri) (filed May 27, 2005); -- Fidelity Insurance Company, et al. v. Express Scripts, Inc., et al., (Case No. 4:03-CV-1521-HEA, United States District Court for the Eastern District of Missouri) (filed March 20, 2003); and -- Brynien, et al. v. Express Scripts, Inc. and ESI Mail Services, Inc. (Case No. 1:08-cv-323 (GLS/DRH), United States District Court for the Northern District of New York) (filed February 18, 2008). The plaintiffs assert that certain of the company's business practices, including those relating to its contracts with pharmaceutical manufacturers for retrospective discounts on pharmaceuticals and those related to the company's retail pharmacy network contracts, constitute violations of various legal obligations including fiduciary duties under the Federal Employee Retirement Income Security Act, common law fiduciary duties, state common law, state consumer protection statutes, breach of contract, and deceptive trade practices. The putative classes consist of both ERISA and non-ERISA health benefit plans as well as beneficiaries. The various complaints seek money damages and injunctive relief. On July 30, 2008, the plaintiffs' motion for class certification of certain of the ERISA plans for which the company was the PBM was denied by the Court in its entirety. Additionally, the company's motion for partial summary judgment in the Minshew and Brown cases on the issue of the company's ERISA fiduciary status was granted in part. The Court found that the company was not an ERISA fiduciary with respect to MAC (generic drug) pricing, selecting the source for AWP (Average Wholesale Price) pricing, establishing formularies and negotiating rebates, or interest earned on rebates before the payment of the contracted client share. The Court, in partially granting plaintiffs' motion for summary judgment, found that the company was an ERISA fiduciary only with respect to the calculation of certain amounts due to clients under a therapeutic substitution program that is no longer in effect. On Dec. 18, 2009, ESI filed a motion for partial summary judgment on the remaining ERISA claims and breach of contract claims on the cases brought against ESI on behalf of ERISA plans. The company is awaiting the Court's decision on this motion. On Feb. 16, 2010, in accordance with the Schedule under the case management order, Plaintiffs in the Correction Officers and Lynch matters filed a motion for summary judgment alleging that National Prescription Administrators (NPA) was a fiduciary to the Plaintiffs and breached its fiduciary duty. Plaintiffs also filed a class certification motion on behalf of self-funded non-ERISA plans residing in New York, New Jersey, and Pennsylvania for which NPA was PBM and which used the NPASelect Formulary from Jan. 1, 1996 through April 13, 2002. On July 2, 2010, ESI filed a motion for partial summary judgment as to certain non-ERISA claims being made in various cases. On December 21, 2010, the Court granted in part and denied in part ESI's motion for partial summary judgment pertaining to certain ERISA cases and granted plaintiffs leave to file amended complaints, which were filed on January 21, 2011. On Jan. 10, 2011, Central Laborers, one of three purported class representatives among the NPA ERISA cases, voluntarily dismissed all claims against ESI and NPA, with prejudice. On Jan. 18, 2011, plaintiffs filed a motion for reconsideration pertaining to the Court's December 21, 2010 Order. On Jan. 28, 2011, NPA filed a cross motion for summary judgment seeking a ruling that it was not a fiduciary under common law. Fidelity was set for trial on July 11, 2011. Express Scripts, Inc. -- http://www.express-scripts.com/-- one of the largest pharmacy benefit management companies in North America, is leading the way toward creating better health and value for patients through ConsumerologySM, the advanced application of the behavioral sciences to healthcare. This approach is helping millions of members realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior. Headquartered in St. Louis, Express Scripts provides integrated PBM services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services. EXPRESS SCRIPTS: Oral Argument in "Beeman" Suit Set for March 8 --------------------------------------------------------------- The U.S. Court of Appeals for the Ninth Circuit set oral argument on Express Scripts, Inc.'s appeal from an order denying its motion to dismiss a class action lawsuit filed by Jerry Beeman, et al., for March 8, 2011, according to the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the quarter ended Dec. 31, 2010. On Dec. 12, 2002, a complaint was filed against Express Scripts, Inc., and NextRX LLC f/k/a Anthem Prescription Management LLC and several other pharmacy benefit management companies, entitled Jerry Beeman, et al. v. Caremark, et al. (Case No.021327, United States District Court for the Central District of California). The complaint, filed by several California pharmacies as a putative class action, alleges rights to sue as a private attorney general under California law. The complaint alleges that the Company, and the other defendants, failed to comply with statutory obligations under California Civil Code Section 2527 to provide California clients with the results of a bi-annual survey of retail drug prices. On July 12, 2004, the case was dismissed with prejudice on the grounds that the plaintiffs lacked standing to bring the action. On June 2, 2006, the U.S. Court of Appeals for the Ninth Circuit reversed the district court's opinion on standing and remanded the case to the district court. The district court's denial of defendants' motion to dismiss on first amendment constitutionality grounds is currently on appeal to the Ninth Circuit. Plaintiffs have filed a motion for class certification, but that motion has not been briefed pending the outcome of the appeal. The Ninth Circuit scheduled oral argument on March 8, 2011. Express Scripts, Inc. -- http://www.express-scripts.com/-- one of the largest pharmacy benefit management companies in North America, is leading the way toward creating better health and value for patients through ConsumerologySM, the advanced application of the behavioral sciences to healthcare. This approach is helping millions of members realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior. Headquartered in St. Louis, Express Scripts provides integrated PBM services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services. FIRSTENERGY CORP: Continues to Defend Suits Over Air Emissions -------------------------------------------------------------- FirstEnergy Generation Corp. continues to defend a class action complaint in connection with air emissions at its Bruce Mansfield Plant, according to FirstEnergy Corp.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. FGCO is a subsidiary of FirstEnergy Corp. In July 2008, three complaints were filed against FGCO in the U.S. District Court for the Western District of Pennsylvania seeking damages based on Bruce Mansfield Plant air emissions. Two of these complaints also seek to enjoin the Bruce Mansfield Plant from operating except in a "safe, responsible, prudent and proper manner", one being a complaint filed on behalf of 21 individuals and the other being a class action complaint seeking certification as a class action with the eight named plaintiffs as the class representatives. FGCO believes the claims are without merit and intends to defend itself against the allegations made in those three complaints. FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, based on 4.5 million customers served within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity. FIRSTENERGY CORP: Penelec Faces Lawsuit Over Air Emissions ---------------------------------------------------------- Pennsylvania Electric Company is facing a lawsuit in connection with air emissions at its Homer City Station, according to FirstEnergy Corp.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. In January 2011, a complaint was filed against Penelec in the U.S. District Court for the Western District of Pennsylvania seeking damages based on the Homer City Station's air emissions. The complaint was also filed against the former co-owner, New York State Electric and Gas Corporation and various current owners of the Homer City Station, including EME Homer City Generation L.P. and affiliated companies, including Edison International. The complaint also seeks certification as a class action and to enjoin the Homer City Station from operating except in a "safe, responsible, prudent and proper manner." Penelec believes the claims are without merit and intends to defend itself against the allegations made in the complaint. FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, based on 4.5 million customers served within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity. FIRSTENERGY CORP: Unit Awaits Ruling on Motion to Appeal Order -------------------------------------------------------------- Jersey Central Power & Light Company is awaiting a ruling on a motion to appeal a decision upholding a New Jersey trial court's decision decertifying a class in a consolidated lawsuit to the New Jersey Supreme Court, according to FirstEnergy Corp.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. In July 1999, the Mid-Atlantic States experienced a severe heat wave, which resulted in power outages throughout the service territories of many electric utilities, including Jersey Central Power & Light Company. Two class action lawsuits (subsequently consolidated into a single proceeding) were filed in New Jersey Superior Court in July 1999 against JCP&L, GPU, Inc., and other GPU companies, seeking compensatory and punitive damages due to the outages. After various motions, rulings and appeals, the Plaintiffs' claims for consumer fraud, common law fraud, negligent misrepresentation, strict product liability and punitive damages were dismissed, leaving only the negligence and breach of contract causes of actions. On July 29, 2010, the Appellate Division upheld the trial court's decision decertifying the class. Plaintiffs have filed, and JCP&L has opposed, a motion for leave to appeal to the New Jersey Supreme Court. JCP&L is waiting for the Court's decision. FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, based on 4.5 million customers served within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity. FIRSTENERGY CORP: Allegheny Merger-Related Lawsuits Now Resolved ---------------------------------------------------------------- Lawsuits filed in connection with the merger agreement between FirstEnergy Corp. and Allegheny Energy, Inc., have now been resolved, according to FirstEnergy's Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. On February 10, 2010, FirstEnergy Corp. entered into an Agreement and Plan of Merger, subsequently amended on June 4, 2010, with Element Merger Sub, Inc., a Maryland corporation, its wholly owned subsidiary (Merger Sub) and Allegheny Energy, Inc. In connection with the proposed merger, purported shareholders of Allegheny have filed putative shareholder class action or derivative lawsuits against Allegheny and its directors and certain officers, referred to as the Allegheny Energy defendants, FirstEnergy and Merger Sub. Four putative class action and derivative lawsuits were filed in the Circuit Court for Baltimore City, Maryland (Maryland Court). One was withdrawn. The Maryland Court has consolidated the remaining three cases under the caption: In re Allegheny Energy Shareholder and Derivative Litigation, C.A. No. 24-C-10-1301. Three shareholder lawsuits were filed in the Court of Common Pleas of Westmoreland County, Pennsylvania and the court has consolidated these actions under the caption: In re Allegheny Energy, Inc. Shareholder Class and Derivative, Litigation, Lead Case No. 1101 of 2010. One putative shareholder class action was filed in the U.S. District Court for the Western District of Pennsylvania and is captioned Louisiana Municipal Police Employees' Retirement System v. Evanson, et al., C.A. No. 10-319 NBF. In summary, the lawsuits allege, among other things, that the Allegheny Energy directors breached their fiduciary duties by approving the merger agreement, and that Allegheny, FirstEnergy and Merger Sub aided and abetted in these alleged breaches of fiduciary duty. The complaints seek, among other things, jury trials, money damages and injunctive relief. While FirstEnergy believes the lawsuits are without merit and has defended vigorously against the claims, in order to avoid the costs associated with the litigation, the defendants have agreed to the terms of a disclosure-based settlement of all these shareholder lawsuits and have reached agreement with counsel for all of the plaintiffs concerning fee applications. Under the terms of the settlement, no payments are being made by FirstEnergy or Merger Sub. A formal stipulation of settlement was filed with the Maryland Court on October 18, 2010, and it was approved and became final on January 12, 2011. The separate Pennsylvania federal and state proceedings were dismissed on January 14, 2011, and January 18, 2011, respectively. The shareholder actions have been fully and finally resolved. FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, based on 4.5 million customers served within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity. FIRSTENERGY CORP: Appeal From Class Suit Dismissal Still Pending ---------------------------------------------------------------- An appeal of a ruling dismissing a class action lawsuit related to the reduction of a discount that had previously been in place for residential customers in Ohio remains pending, according to FirstEnergy Corp.'s Feb. 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. On February 16, 2010, a class action lawsuit was filed in Geauga County Court of Common Pleas against FirstEnergy Corp., The Cleveland Electric Illuminating Company and Ohio Edison Company seeking declaratory judgment and injunctive relief, as well as compensatory, incidental and consequential damages, on behalf of a class of customers related to the reduction of a discount that had previously been in place for residential customers with electric heating, electric water heating, or load management systems. The reduction in the discount was approved by the Public Utilities Commission of Ohio. On March 18, 2010, the named-defendant companies filed a motion to dismiss the case due to the lack of jurisdiction of the court of common pleas. The court granted the motion to dismiss on September 7, 2010. The plaintiffs appealed the decision to the Court of Appeals of Ohio, which has not yet rendered an opinion. FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, based on 4.5 million customers served within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity. HOSPIRA INC: Still Awaits Ruling on Plaintiffs' Appeal ------------------------------------------------------ Hospira, Inc., and Abbott Laboratories are still awaiting a ruling on an appeal filed by plaintiffs in the matter Myla Nauman, Jane Roller and Michael Loughery v. Abbott Laboratories and Hospira, Inc., on a decision of the U.S. District Court for the Northern District of Illinois in favor of the defendants, according to the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. Hospira has been named as a defendant in a lawsuit alleging generally that the spin-off of Hospira from Abbott resulted in a mass termination of employees so as to interfere with the future attainment of benefits in violation of the Employee Retirement Income Security Act of 1974. The lawsuit was filed on Nov. 8, 2004, in the U.S. District Court for the Northern District of Illinois. Plaintiffs generally seek reinstatement in Abbott benefit plans, disgorgement of profits and attorneys fees. On Nov. 18, 2005, the complaint was amended to assert an additional claim against Abbott and Hospira for breach of fiduciary duty under ERISA. Hospira has been dismissed as a defendant with respect to the fiduciary duty claim. By Order dated Dec. 30, 2005, the Court granted class action status to the lawsuit. As to the sole claim against Hospira, the court certified a class defined as: "all employees of Abbott who were participants in the Abbott Benefit Plans and whose employment with Abbott was terminated between August 22, 2003, and April 30, 2004, as a result of the spin-off of the HPD [Hospital Products Division]/creation of Hospira announced by Abbott on August 22, 2003, and who were eligible for retirement under the Abbott Benefit Plans on the date of their terminations." Hospira denies all material allegations asserted against it in the complaint. Trial of this matter has concluded. On April 22, 2010, the court issued a ruling in favor of Hospira and Abbott on all counts. Plaintiffs have appealed that verdict. In 2008, Hospira received notice from Abbott requesting that Hospira indemnify Abbott for all liabilities that Abbott may incur in connection with this litigation. Hospira denies any obligation to indemnify Abbott for the claims asserted against Abbott in this litigation. IKEA HOME: Recalls 26,000 SNIGLAR Cribs --------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with IKEA Home Furnishings, of Conshohocken, Pa., announced a voluntary recall of about 20,000 SNIGLAR cribs in the United States and 6,000 in Canada. Consumers should stop using recalled products immediately unless otherwise instructed. The four bolts provided with some SNIGLAR cribs to secure the mattress support are not long enough. This can cause the mattress support to detach and collapse, creating a risk of entrapment and suffocation to a child in the crib. No injuries or incidents have been reported. This recall involves SNIGLAR non-drop-side, full-size cribs with model number 60091931. SNIGLAR, IKEA and the model number are printed on a label attached to the mattress support. The crib frame and mattress support are made of natural/light-colored wood. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11135.html The recalled products were manufactured in Romania and sold through IKEA stores nationwide from October 2005 through June 2010 for about $80. Consumers should stop using the crib immediately and check the crib. If the mattress support bolts extend through the nut, the bolts are the proper length and the crib is not included in the recall. If the bolt does not extend through the nut, the crib is included in the recall. Contact IKEA for a free repair kit for recalled cribs. In the meantime, find an alternate, safe sleep environment for the child, such as a bassinet, play yard or toddler bed depending on the child's age. For additional information, contact IKEA toll-free at (888) 966-4532 anytime, or visit the firm's Web site at http://www.ikea-usa.com/ JAMES PERSE: Recalls 6,700 Units of Men's and Women's Jackets ------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with fashion house James Perse, announced a voluntary recall of about 6,700 units of men's and women's jackets. Consumers should stop using recalled products immediately unless otherwise instructed. The jackets fail to meet the federal flammability standard for wearing apparel, posing a fire hazard to consumers. No injuries or incidents have been reported. This recall involves men's jacket is corduroy and is fully lined with Sherpa fleece. It has a five-button front closure, two side pockets and two breast pockets. The style number is MV2156. Two styles of women's jackets are subject to this recall. One is a zip-front jacket with two pockets, a hood lined with Sherpa fleece and a drawstring at the waist. The style number is WOY2443. The other is a belted, wrap jacket with a Sherpa fleece-lined collar. It has two side pockets and wide knit cuffs at the wrist. The style number is WOY2444. Each jacket is made of 100% cotton and was manufactured in various colors. A label with the style number is located on the side seam of the inside of the jackets. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11134.html The recalled products were manufactured in China and sold through Bloomingdales, Neiman Marcus, Nordstrom, Saks Fifth Avenue, Barneys of New York, and James Perse Boutiques from July 2010 to December 2010 for $225 to $350. Consumers should immediately stop using the recalled jackets and return them to the store where they were purchased for a full refund. For additional information, contact James Perse toll free at (800) 430-8559 between 9:00 a.m. and 5:00 p.m., Pacific Time, Monday through Friday or visit the firm's Web site at http://www.jamesperse.com/ LIQUID COMBUSTION: Recalls 1,800 Sno-Tek Snow Blowers ----------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Liquid Combustion Technology, LLC (LCT), of Travelers Rest, S.C., announced a voluntary recall of about 1,500 Sno-Tek snow blowers and 300 in Canada. Consumers should stop using recalled products immediately unless otherwise instructed. The snow blower's engine is missing a safety shield above the side mounted electric starter, posing a laceration hazard to consumer's fingers No injuries or incidents have been reported. This recall involves snow blowers have a LCT StormForce engine with "Sno-Tek" printed across a metal handlebar plate. Snow blowers with model numbers 920402 and 920403 and UPC codes 5105803094 and 5105803095 are included in this recall. Only snow blowers with engine model number PW1HK18650781DE-ABGOQUVE1M with serial numbers ranging from 1065H04008325A through 1065H04012104A are affected by this recall. The product model number and UPC codes are printed on a label attached to the outside of the gear box near the left wheel. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11137.html The Snow blower were manufactured in United States and the engine in China and sold through home Depot and Ariens authorized dealers nationwide and HD.com in Canada from August 2010 through September 2010 for between about $700 and $800. Consumers should stop using these snow blowers and contact LCT for a free repair kit and installation instructions or return them to an authorized LCT service center location for a free repair. LCT's Service Network toll free number is (800) 558-5402. For additional information, contact LCT at (800) 552-8094 between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday or visit the firm's Web site at http://www.LCTUSA.com/ MAY TRUCKING: Sued for Failing to Pay Proper Wages to Drivers ------------------------------------------------------------- Glynis Farrell at Courthouse News Service reports that a class action makes a welter of complaints against May Trucking Co., including unfair wages, overtime violations, illegal deductions -- and even charging drivers to cash their paychecks. Lead plaintiff Scott Nance says May Trucking, based in Salem, Ore., paid him just $50 a day during his "entry level driving program," during which he and other drivers work more than 10 hours a day for 2 months. He says May pays drivers only for time behind the wheel -- not for time spent loading and unloading trucks -- and that it stiffed him for his last paycheck. Mr. Nance claims that May, which operates a fleet of more than 900 trucks nationwide, illegally deducts money itemized as "Oregon Work Co." from truckers' paychecks to cover its own costs of doing business. He claims that May's wage statements are inaccurate, to the company's advantage: "The wage statements that defendant provides to truck drivers do not identify all wages owed. . . . Defendant . . . does not provide its truck drivers with itemized timely wage statements that accurately identify the numbers of hours worked or the amount of compensation due to them for their work." And, Mr. Nance says, truckers cannot collect their wages until the day after payday, and must use a company-issued Comdata card and pay a fee to collect it: "Defendant pays truck drivers using a 'Comdata' card. Wages are automatically transferred to a Comdata account, but funds are not readily available to the employees without charge. If truck drivers want to withdraw funds from the Comdata account via an ATM machine, for example, truck drivers must pay a fee. In addition, funds were not available in the plaintiff's Comdata accounts until the following business day after the pay date." The Superior Court complaint describes May's policies as "unfair . . . immoral, unscrupulous, unethical [and] deceitful," and claims it "causes substantial injury to the plaintiff and the class, and provides defendant with an unfair competitive advantage over those employers who abide by the law and properly compensate their employees in accordance with the law." Mr. Nance seeks class damages and restitution on seven counts, including failure to pay wages, failure to provide itemized wage statements, failure to indemnify for employee's expenses, and violations of California Business & Professions Code. A copy of the Complaint in Nance v. May Trucking Company, et al., Case No. 37-2011-00051488 (Calif. Super. Ct., San Diego Cty.), is available at: http://www.courthousenews.com/2011/02/17/MayTruck.pdf The Plaintiff is represented by: Allison H. Goddard, Esq. JACZKO GODDARD LLP 4401 Eastgate Mall San Diego, CA 92121 Telephone: (858) 404-9205 MEAD JOHNSON: Still Defends Suits Over "False Claims" for Enfamil ----------------------------------------------------------------- Mead Johnson Nutrition Co. is still defending itself against purported class-action suits alleging that the Company made false advertising claims that Enfamil is the only baby formula with two drugs that promote brain and eye development in babies, according to the Company's February 16, 2011, Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2010. PBM Products, LLC (PBM), a manufacturer and distributor of store brand infant formulas and nutritionals, obtained a judgment in the amount of $13.5 million in a suit against the Company's subsidiary, Mead Johnson & Company, LLC, in the U.S. District Court (Eastern District of Virginia), alleging, among other things, false and misleading advertising with respect to certain Enfamil LIPIL infant formula advertising. After post-trial briefing, the court confirmed the award and also ordered limited injunctive relief. The Company has filed an appeal with the U.S. Court of Appeals for the Fourth Circuit with respect to various aspects of the district court proceedings, including both the jury award and injunction. That appeal remains pending. In addition, six putative consumer class action suits have been filed and served against the Company's subsidiary, Mead Johnson & Company, LLC, two of which also name the Company as a defendant. (The Company has been dismissed as a party from the other suits, and the Company either has sought or will seek to be dismissed from the remaining two.) The Company also is aware of two additional putative class actions that have been filed in the U.S. District Court (Northern District of California) that have not yet been served. All of these cases cite the PBM matter as support for allegations that certain false and misleading advertising of Enfamil LIPIL infant formula has resulted in financial injury to consumers. A class of Florida consumers was certified in one of the actions (Nelson v. Mead Johnson & Company, LLC), pending in the U.S. District Court (Southern District of Florida), but the U.S. Court of Appeals for the Eleventh Circuit has granted defendant's petition for interlocutory appeal of that certification decision. The Company denies all allegations in the cases, which have been consolidated for adjudication in the U.S. District Court (Southern District of Florida) by the Joint Panel on Multidistrict Litigation. The Company also has entered into a memorandum of understanding with plaintiffs' counsel in several of the cases, with the goal of presenting a stipulation of settlement and a joint motion for preliminary approval of settlement to the U.S. District Court (Southern District of Florida). Although the terms of the settlement are not finalized and remain confidential, it is expected that they will resolve all claims on a nationwide basis and not have a material adverse effect on the Company's results of operations or financial condition. NUCOR CORP: Judge Certifies Employee Discrimination Class Action ---------------------------------------------------------------- A U.S. District Court Judge who denied class certification to seven Nucor employees four years ago reversed his prior ruling on Feb. 17 without the introduction of any new testimony or evidence. Judge C. Weston Houck followed the order of the Fourth U.S. Circuit Court of Appeals to certify the lawsuit as a class action. The Feb. 17 ruling does not concern the legal merits of the case, just how it will proceed. "We believe Judge Houck made the correct decision when he denied class certification in 2007 on allegations that were isolated and many of which allegedly occurred over a decade ago. He had a lot of time and information to make the correct ruling," said Giff Daughtridge, Vice President and General Manager of Nucor Steel-Berkeley. "However, [Thurs]day's ruling has been made and now we look forward to the opportunity to pursue all avenues of appeal of this procedural decision. The allegations of discrimination are simply that -- allegations. We plan to appeal this procedural ruling. We are certain that even if the case does proceed, once the facts are finally examined by a jury, it will be clear that Nucor has always treated its employees fairly and given them every opportunity to succeed, regardless of the color of their skin." Judge Houck denied class certification to seven plaintiffs in Brown et al. v. Nucor on August 7, 2007, characterizing plaintiffs' statistical evidence of discrimination as "insignificant" and of "diminish[ed] probative value." But a divided three-judge panel of the Fourth Circuit reversed Judge Houck's initial ruling and instructed him to certify the lawsuit as a class action. One of the three judges dissented, arguing that the appellate court had inappropriately substituted its own opinion of the facts by reversing Judge Houck's findings. The order certifying the class reflects that the Court had little alternative in light of the Fourth Circuit's opinion. And the Fourth Circuit's opinion was based on a standard for certifying class actions that is currently being challenged in the United States Supreme Court in perhaps the most significant class action case in history -- Dukes v. Wal-Mart. The Supreme Court's decision in the Wal-Mart case may require this current case to be re-evaluated under a clarified procedural standard, and Nucor will continue to fight this class certification decision. While these seven individual cases have now been converted to a class action, no discrimination at the Berkeley facility has ever been proven. "Nucor's success has always been dependent upon the individuals who make up our team," Mr. Daughtridge said. "Our pay system rewards everyone's teamwork by sharing the financial success of the company with every person in Nucor, making fair treatment of our team a top priority. These programs and policies result in Nucor historically paying some of the highest wages in the State of South Carolina. This is in addition to the fact that Nucor has never had a layoff, a distinction that few employers in today's tough economy can match." Nucor Corporation (NYSE: NUE) and affiliates are manufacturers of steel products, with operating facilities primarily in the United States and Canada. Nucor is North America's largest recycler. A FORTUNE 500 company, Nucor is based in Charlotte, NC and employs more than 20,000 people at approximately 200 operating facilities across the country. Nucor is dedicated to the success of its team. All team members participate in profit sharing and receive an excellent benefits package that includes comprehensive health insurance and tuition reimbursement. Additionally, every child of every Nucor employee is entitled to scholarship money through the Nucor Foundation. The foundation has awarded more than $52 million in scholarships since 1974. Nucor Steel-Berkeley and its team members are actively involved in the community, providing support to the United Way, MUSC Children's Hospital, the American Cancer Society's "Relay for Life", East Cooper Community Outreach's "Out of Poverty" initiatives and many other worthy causes. NYSE EURONEXT: Being Sold to Deutsche Borse for Too Little ---------------------------------------------------------- Courthouse News Service reports that shareholders say NYSE EuroNext is selling itself too cheaply to Deutsche Borse -- for 0.47 shares of the new company for each NYSE share -- in a deal valued at $10 billion. A copy of the Complaint in KT Investments II, LLC v. Hessels, et al., Case No. 650407/2011 (N.Y. Sup. Ct., N.Y. Cty.), is available at http://www.courthousenews.com/2011/02/17/NYSE.pdf The Plaintiff is represented by: Gregory M. Nespole, ESq. Matthew M. Guiney, Esq. WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 270 Madison Avenue New York, NY 10016 Telephone: (212) 545-4600 ONTARIO: Faces Class Action Over Abuse at Chatham Institution ------------------------------------------------------------- The Crown has been served with a claim alleging that severe and systemic abuse occurred at the Southwestern Regional Centre, a former government institution, near Chatham, Ontario, for people living with developmental disabilities. The claim, submitted by Rosalind Bechard, litigation guardian for former Southwestern resident Mary Ellen Fox, is the first step towards class action approval by the court. Kirk Baert of the law firm Koskie Minsky LLP represents the plaintiff. He said he is pleased that this third and final class action, on behalf of Ontario's institutional survivors, is moving forward. "As with the class actions launched by former residents at the Huronia and Rideau institutions," says Mr. Baert, "we are moving to trial to seek justice for those who suffered both physical and psychological abuse while living at these centers, and to ensure that this kind of institutional mistreatment does not happen again." From 1961 to 2008, the Southwestern Regional Centre, also known as Cedar Springs, provided a residential program for developmentally delayed and disabled persons. Thousands lived at the facility over the years, many of them children. Fox alleges that residents were physically, mentally and emotionally traumatized by their experiences at Southwestern. In her Statement of Claim, she alleges being overmedicated and subjected to shocks with a "cattle prod" like device as punishment. Only after leaving Southwestern did she learn to read and write. In the claim, it is alleged that the Province of Ontario breached its fiduciary duties through the operation, control and management of Southwestern. In particular, it is alleged that the province's failure to care for and protect residents resulted in physical injury, psychological trauma, depression, anxiety, emotional distress and mental anguish. A similar class proceeding with respect to the Huronia Regional Centre, in Orillia, Ontario was certified on July 30, 2010. Koskie Minsky LLP represents the plaintiffs in that action as well. Additionally, a Statement of Claim has been issued in respect of the Rideau Regional Centre near Smith Falls, Ontario. PERFECT FITNESS: Recalls 7,000 Perfect Pullup --------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Perfect Fitness, of Mill Valley, Calif., announced a voluntary recall of about 7,000 Perfect Pullup. Consumers should stop using recalled products immediately unless otherwise instructed. The plastic handle on the recalled product can crack posing a fall injury hazard for the user. Perfect Fitness received approximately 2,200 reports of cracking of the original handles, with 38 complaints of injuries that included bruises, strains and sprains. This recall involves Perfect Pullup, an adjustable height pull-up bar that is installed in a doorway with screw-in holders. The recalled handles have a rectangular shape, are silver colored with a red hook, and display the Perfect Pullup logo in white lettering across the top. The recalled models were manufactured between December 2007 and April 2008. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11136.html The recalled products were manufactured in China and sold through sporting goods stores nationwide, on their websites and on Amazon.com from January 2008 through present for about $90. Consumers should immediately stop using the recalled handles and contact Perfect Fitness to order a free handle replacement kit. For additional information, contact the firm toll-free at (877) 974-7733 between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday, or visit the firm's Web site at http://www.perfectonline.com/handleexchange/ PRINCIPAL FINANCIAL: Continues to Defend ERISA Lawsuit in Iowa -------------------------------------------------------------- Principal Life Insurance Company continues to defend itself from a lawsuit alleging ERISA violations pending in the United States District Court for the Southern District of Iowa. On November 8, 2006, a trustee of Fairmount Park Inc. Retirement Savings Plan filed a putative class action lawsuit in the United States District Court for the Southern District of Illinois against Principal Life. Principal Life's motion to transfer venue was granted and the case is now pending in the Southern District of Iowa. The complaint alleged, among other things, that Principal Life breached its alleged fiduciary duties while performing services to 401(k) plans by failing to disclose, or adequately disclose, to employers or plan participants the fact that Principal Life receives "revenue sharing fees from mutual funds that are included in its pre-packaged 401(k) plans" and allegedly failed to use the revenue to defray the expenses of the services provided to the plans. Plaintiff further alleged that these acts constitute prohibited transactions under ERISA. Plaintiff sought to certify a class of all retirement plans to which Principal Life was a service provider and for which Principal Life received and retained "revenue sharing" fees from mutual funds. On August 27, 2008, the plaintiff's motion for class certification was denied. The plaintiff's new motion for class certification, filed May 11, 2009, was stricken by the court on March 31, 2010. Principal Life continues to aggressively defend the lawsuit. No updates were reported in Principal Financial Group, Inc.'s February 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. PRINCIPAL FINANCIAL: Still Defends "Cruise & Mullaney" Suit ----------------------------------------------------------- Principal Financial Group Inc., Principal Life, Principal Global Investors, LLC, and Principal Real Estate Investors, LLC, are still defending themselves against a lawsuit filed by Cruise and Mullaney for ERISA violations, according to Principal Financial Group Inc.'s February 16, 2011 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. On December 2, 2009 and December 4, 2009, two plaintiffs, Cruise and Mullaney, each filed putative class action lawsuits in the United States District Court for the Southern District of New York against Principal Financial Group Inc., Principal Life, Principal Global Investors, LLC, and Principal Real Estate Investors, LLC. The lawsuits alleged the Cruise & Mullaney Defendants failed to manage the Principal U.S. Property Separate Account in the best interests of investors, improperly imposed a "withdrawal freeze" on September 26, 2008, and instituted a "withdrawal queue" to honor withdrawal requests as sufficient liquidity became available. Plaintiffs allege these actions constitute a breach of fiduciary duties under ERISA. Plaintiffs seek to certify a class including all qualified ERISA plans and the participants of those plans that invested in PUSPSA between September 26, 2008, and the present that have suffered losses caused by the queue. The two lawsuits, as well as two subsequently filed complaints asserting similar claims, have been consolidated and are now known as In re Principal U.S. Property Account Litigation. On April 22, 2010, an order was entered granting the motion made by the Cruise & Mullaney Defendants for change of venue to the United States District Court for the Southern District of Iowa. The plaintiffs have filed a Consolidated Complaint adding five new plaintiffs. The Cruise & Mullaney Defendants are aggressively defending the lawsuit. PRINCIPAL FINANCIAL: Stipulate Dismissal of "Hurd" Class Action --------------------------------------------------------------- Principal Financial Group, Inc., and Principal Life entered into a stipulation with plaintiffs to resolve a class action lawsuit alleging ERISA violations, according to Principal Financial Group Inc.'s February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. On July 1, 2010, Debra and Russell Hurd filed a putative class action lawsuit in the United States District Court for the Southern District of Iowa against Principal Financial Group, Inc., and Principal Life. The complaint alleges the Hurd Defendants underpay out-of-network health claims by using an allegedly flawed database to calculate usual and customary charges. Plaintiffs are suing on behalf of "all participants and/or beneficiaries in group health plans in the United States issued, insured or administered by [us] as to which [we] have administered claims and/or paid or denied benefits for out-of-network benefit claims." The complaint alleges four causes of action, all based on violations of ERISA. The Hurd Defendants filed a stipulated dismissal with prejudice on December 8, 2010. QUEST DIAGNOSTICS: Still Defends Suit Over Defective NID Test Kits ------------------------------------------------------------------ Quest Diagnostics Inc. and its subsidiary, Nichols Institute Diagnostics, are still defending themselves against a putative class action filed in the U.S. District Court for the Eastern District of New York. In April 2010, a putative class action was filed against the Company and NID in the U.S. District Court for the Eastern District of New York on behalf of entities that allegedly purchased or paid for certain of NID's test kits. The complaint alleges that certain of NID's test kits were defective and that defendants, among other things, violated RICO and state consumer protection laws. The complaint alleges an unspecified amount of damages. No updates were reported in the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. Quest Diagnostics Inc. -- http://www.QuestDiagnostics.com/-- is the world's leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics is a pioneer in developing innovative diagnostic tests and advanced healthcare information technology solutions that help improve patient care. QUEST DIAGNOSTICS: Still Defends Age Discrimination Suit in N.J. ---------------------------------------------------------------- Quest Diagnostics Incorporated continues to defend itself from a class action lawsuit alleging violations of age discrimination laws in New Jersey. In November 2010, a putative class action was filed against the Company and certain present and former officers of the Company in the Superior Court of New Jersey, Essex County, on behalf of the Company's sales people nationwide who were over forty years old and who either resigned or were terminated after being placed on a performance improvement plan. The complaint alleges that the defendants' conduct violates the New Jersey Law Against Discrimination, and seeks, among other things, unspecified damages. The defendants removed the complaint to the United States District Court for the District of New Jersey. No updates were reported in the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. REHABCARE GROUP: Being Sold to Kindred for Too Little, Suit Says ---------------------------------------------------------------- Courthouse News Service reports that shareholders say RehabCare Group is selling itself too cheaply to Kindred Healthcare, for $1.3 billion, or $26 plus .471 shares of Kindred stock for each RehabCare share. A copy of the Complaint in Norfolk County Retirement System v. Rich, et al., Case No. 6197 (Del. Ch. Ct.), is available at: http://www.courthousenews.com/2011/02/17/SCA.pdf The Plaintiff is represented by: Christopher J. Keller, Esq. Jonathan Gardner, Esq. Matthew C. Moehlman, Esq. Iona M. Evans, Esq. LABATON SUCHAROW LLP 140 Broadway New York, NY 10005 Telephone: (212) 907-0700 - and - Christine S. Azar, Esq. LABATON SUCHAROW LLP One Commerce Center 1201 N. Orange St., Suite 801 Wilmington, DE 19801 Telephone: (302) 573-2530 E-mail: cazar@labaton.com SALLIE MAE: Class Action Over Student Loans Can Proceed ------------------------------------------------------- Maria Dinzeo at Courthouse News Service reports that a class action can proceed against Sallie Mae, a federal judge ruled, declining to dismiss claims that the lender illegally charged collection fees of 25% on student loans that had entered default before summoning debt collectors. The four class members, all of whom took out private student loans to attend the California Culinary Academy in San Francisco between 2002 and 2004, claimed Sallie Mae added a collection charge of 25% to their loan balances and reported the loans to third-party debt collectors, who then tried to collect the principals, interest and the 25% charge. In one case, plaintiff Shawnee Silva paid collection costs of at least $1,000 on each of her two loans. U.S. District Judge Laurel Beeler rejected Sallie Mae's contention that the class needed to be more specific in its allegations that the costs were unreasonable. She also threw out "Sallie Mae's argument that plaintiffs must show losses of money or property eligible for restitution." Judge Beeler did dismiss two of the class's claims with leave to amend. Since the students could not prove the loans were goods or services, or that Sallie Mae itself unfairly attempted to collect on debts, the class can claim neither unfair charges under the Consumer Legal Remedies Act nor unfair debt collection practices under the Rosenthal Act. The culinary school attended by the students is an affiliate of Le Cordon Bleu, like the California School of Culinary Arts, which has seen its own share of fraud lawsuits. A copy of the Order Re Motion to Dismiss in Bottoni, et al. v. Sallie Mae, Inc., et al., Case No. 10-cv-03602 (N.D. Calif.), is available at: http://www.courthousenews.com/2011/02/17/Sallie%20Mae.pdf SAN FRANCISCO, CA: Judge Dismisses Discrimination Claims v. MTC --------------------------------------------------------------- Tim Hull at Courthouse News Service reports that a class action accusing the San Francisco Bay Area's transportation planning commission of discriminating against minorities by emphasizing rail projects over bus lines is based on a "logical fallacy" and smacks of desperation, the United States Court of Appeals for the Ninth Circuit ruled. The federal appeals panel in San Francisco affirmed a lower court's ruling in favor of the Metropolitan Transportation Commission, finding that the class of minority transit riders, the advocacy group Communities for a Better Environment, and the Amalgamated Transit Union No. 192 had failed to show that they were treated differently than nonminority riders. In a separate concurring opinion to the panel's unanimous decision published on Feb. 16, Jude John Noonan went so far as to state that the kind of endemic, institutional racism suspected by the plaintiffs no longer exists in the famously liberal Bay Area. "The twentieth century racial categories so confidently deployed no longer correspond to American life among the young," Judge Noonan wrote in a concurrence on Feb. 16. "What is true of the young is already characteristic of the Bay Area where social change has been fostered by liberal political attitudes, and a culture of tolerance. An individual bigot may be found, perhaps even a pocket of racists. The notion of a Bay Area board bent on racist goals is a specter that only desperate litigation could entertain." The plaintiffs sued the commission in 2005, alleging that its multibillion-dollar, long-range plans for bay-area transit projects favored white riders over minorities by concentrating on rail projects over bus lines. They claimed that Bay Area rail service had historically been used by whites, and buses by minorities. The plaintiffs also argued that they had lost job opportunities and were forced to cut expenses because the commission had neglected the city's bus service while at the same time raising fares. Finding that the class had failed to prove intentional discrimination, the District Court granted summary judgment to the commission, but allowed the plaintiffs' disparate impact claims to go to trial. The lower court, after a trial, found that while the plaintiffs had shown that the commission's allocation of funding to rail projects could be construed as discriminatory, the commission had successfully countered with a legitimate justification for its plans. On appeal, the three-judge appeals panel affirmed the District Court, but rejected its finding that the plaintiffs had demonstrated intentional discrimination by the commission. "The statistical measure upon which plaintiffs relied to establish a prima facie case is unsound, and their claim rests upon a logical fallacy," the majority opinion, authored by Judge Barry Silverman, states. "Although plaintiffs' statistical evidence shows that minorities make up a greater percentage of the regional population of bus riders than rail riders, it does not necessarily follow that an expansion plan that emphasizes rail projects over bus projects will harm minorities. Plaintiffs' theory forecloses altogether the possibility that [the commission] could devise any rail-centered expansion that could benefit minority transit riders, while the evidence shows that Bay Area minorities already benefit substantially from rail service. Without a more precise statistical measure of how the particular projects included in the [long-range plans] will serve the Bay Area's transit ridership, no court could possibly determine whether [the commission's] long- term expansion plan will help or harm the region's minority transit riders." Commission Chairman Scott Haggerty lauded the panel's ruling in a statement released on Feb. 16. "We are pleased with this victory and happy that after nearly six years of litigation we can finally put this matter behind us," Haggerty said. "MTC has been forced to spend millions of scarce public dollars defending itself from a misguided lawsuit at a time when there is an urgent need to stabilize and improve all Bay Area transit systems." A copy of the Opinion in Darensburg, et al. v. Metropolitan Transportation Commission, No. 09-15878 (9th Cir.), is available at http://is.gd/AlgfoJ The Plaintiffs-Appellants are represented by: Linda Lye, Esq. Peter D. Nussbaum, Esq. P. Casey Pitts, Esq. Daniel Purtell, Esq. ALTSCHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 - and - Bill Lann Lee, Esq. Margaret Hasselman, Esq. Angelica Kristen Jongco, Esq. Sacha C. Steinberger, Esq. LEWIS FEINBERG LEE RENAKER & JACKSON, PC 476 9th Street Oakland, CA 94607 Telephone: (510) 839-6824 - and - Matthew Brigham, Esq. Heather Dunn Navarro, Esq. Brandon Kimura, Esq. Neha M. Marathe, Esq. Jessica Valenzuela Santamaria, Esq. COOLEY LLP Hanover Campus 3175 Hanover Street Palo Alto, CA 94304-1130 Telephone: (650) 843-5677 - and - Richard A. Marcantonio, Jr., Esq. Guillermo Mayer, Esq. PUBLIC ADVOCATES, INC. 131 Steuart Street, Suite 300 San Francisco, CA 94105 Telephone: (415) 431-7430 - and - Adrienne Bloch, Esq. Communities for a Better Environment 1904 Franklin Street, Suite 600 Oakland, CA 94612 Telephone: (510) 302-0430 Metropolitan Transportation Commission is represented by: Kimon Manolius, Esq., Julia H. Veit, Esq. Warren Richmond Webster, Esq. Megan O. Thompson, Esq. Emily M. Charley, Esq. HANSON BRIDGETT LLP 425 Market Street, 26th Floor San Francisco CA 94105 Telephone: (415) 777-3200 - and - Francis F. Chin, Esq. Cynthia E. Segal, Esq. METROPOLITAN TRANSPORTATION COMMISSION Office of the General Counsel 101 8th St. Oakland, CA 94607-4700 Telephone: (510) 817-5700 SATYAM COMPUTER: Settles Class Action for $125 Million ------------------------------------------------------ Satyam Computer Services Ltd. has informed BSE that the Company has entered into a Stipulation and Agreement of Settlement with the Lead Plaintiffs in the putative class action filed against the Company in the United States District Court, Southern District Court of New York. The Company has agreed to pay to the Class members as consideration, US$125 million, subject to the approval of the Reserve Bank of India and the determination of the Authority for Advance Ruling, and 25% of any net recovery that the Company may in the future obtain against any of the PwC-related entities. The Settlement amount includes taxes, compliance costs, attorney's fees and expenses. The Settlement is subject to the approval of the Court and may be terminated prior to Court approval pursuant to the grounds for termination set forth in the Settlement. If the Settlement is approved by the Court, in exchange for the settlement consideration, the Lead Plaintiffs and the members of the Class who do not opt-out of the Class, would release, among other things, their claims against the Company. The obligations incurred pursuant to the Settlement are in full and final disposition of the Action with respect to the Released Parties and any and all Released Claims. This Settlement does not cover the Aberdeen Action in the same Court, wherein a trustee of two trusts, who are assignees of the claims of 20 investors, sought recovery from the Company. However the investors who have assigned the claim to the two trusts are entitled to participate in the proceeds of the Settlement. Further, the Settlement is exclusively for and on behalf of the Company and does not affect the other defendants to the class action litigation. TIFFANY & CO: Faces Class Action Over Zip Code Policy ----------------------------------------------------- Rob Bates, writing for Jewelers' Circular Keystone, reports that class action lawyers are targeting Tiffany & Co. and a host of other retailers after the California Supreme Court ruled that asking for customer zip codes violates a state law governing credit cards. Class action lawyers Jeffrey Krinsk of Finkelstein & Krinsk told Reuters his firm recently filed a class action suit against Tiffany & Co. over its zip code policy. Suits have also been suits filed against 20 other retailers, including Target, Walmart, and Victoria's Secret, the news agency said. The move comes after the California Supreme Court ruled in Pineda v. Williams-Sonoma Stores that requesting a customer's zip code violates the state's Song-Beverly Credit Card Act. The case was filed in June 2008 by California resident Jessica Pineda, who bought an item at Williams-Sonoma, and was subsequently asked her zip code by the cashier. "Believing she was required to provide the requested information to complete the transaction, plaintiff provided it," the court wrote. According to the court, Williams-Sonoma used computer software to match the plaintiff's name and zip code with her previously undisclosed address, providing the retailer information for its database. That database is then used to market products and is sold to other businesses, the court said. The Supreme Court concluded that zip codes constitute "personal identification information" and noted the law forbids inquiring for such information. This decision overturns a previous decision in favor of Williams- Sonoma by a California Court of Appeals. TOYOTA MOTOR: Seeks Dismissal of Acceleration Class Action ---------------------------------------------------------- Ken Bensinger, writing for Money & Company, reports that Toyota HQ Toyota Motor Corp. is using a new NASA study finding no fault with its electronics as evidence that a sudden acceleration class action suit against it should be dismissed. In a filing in federal court in Santa Ana last week, the automaker argued that the study, conducted at the behest of the National Highway Traffic Safety Administration and released Feb. 8, is proof that its vehicles have no defects and the lawsuits are therefore without merit. "Plaintiffs are chasing a phantom theory of defect that only last week NASA and NHTSA, after an extensive investigation, jointly confirmed does not exist," Toyota outside counsel Lisa Gilford wrote in a motion filed on Feb. 14. She asked Judge James Selna to dismiss the suit, which consolidates scores of claims from Toyota and Lexus owners alleging that the presence of defects in their vehicles negatively affected the value of their vehicles. News of the filing was first published by the National Law Journal. This is the second time Toyota has sought dismissal of the economic damages suit. In November, Judge Selna refused to drop the allegations based on the evidence present by Toyota at the time; in December he also turned down a motion by Toyota to dismiss personal injury and death claims related to sudden acceleration claims. By holding up the NASA and NHTSA reports in court, Toyota is showing an aggressive push to use the government's research into sudden acceleration not only to clear its name with the public but also to climb out from under its legal problems as well. Toyota spokeswoman Celeste Migliore declined to comment on the company's legal strategy, but pointed to the plaintiffs' "continued inability to provide a coherent theory of an alleged defect and their blatant attempts to shift the focus of this case" as important developments. The NASA probe, unvelied by Transporation Secretary Ray LaHood last week, focused on nine Toyota vehicles over a period of 10 months, finding no electronic defects that could cause unintended acceleration. And although it stopped short of clearing the automaker, pointing to what it called mechanical defects that can cause acceleration problems, the news was widely interpreted as a vindication. (Toyota has issued two recalls to address the defects, for floor mats that can entrap the gas pedal and for sticking accelerator pedals.) On its newsroom site, the automaker hailed the findings, saying they "should further reinforce confidence in the safety of Toyota and Lexus vehicles," and its stock price has risen nearly 6% since the reports were released. Judge Selna's consideration of the motion to dismiss will be an early test of whether the study will have a similarly positive influence for Toyota in the courtroom. Steve Berman, co-lead counsel in the economic damages suits, points out that government studies, such as National Transporation Safety Board reports on airplane crashes, are almost never admitted as evidence in court because the facts are in dispute. He said he would oppose admitting the NASA and NHTA reports on the same grounds. "I don't think it will be admissable," said Mr. Berman. He said the report is "a contested issue" rather than proven fact, and that he does not agree with either the findings or the methodology of the government studies. One of his specific complaints was that the study is heavily redacted, making it difficult for his researchers to understand how the research was conducted. Mr. Berman said that he wrote Toyota last week asking it for an unredacted copy but has not yet heard back. Even if the NASA and NHTSA findings hold up, plaintiff attorneys argue that Toyota still could be on the hook for the lack of a brake override feature in its vehicles, which is designed to prevent sudden acceleration in cars with electronic throttle. That technology has been employed by other automakers, including Nissan and Volkswagen, for years, but Toyota did not begin adopting it until last year. Toyota attorney Gilford, in her filing this week, addressed that argument, saying it "conveniently ignores a host of other fail- safes and disingenuously suggests that a brake override system was somehow an industry standard." A hearing to review the dismissal motion is scheduled for April 29, court filings show. U.S. RETAILERS: Calif. Zip Code Ruling Spurs Class Actions ---------------------------------------------------------- Terry Baynes, writing for Reuters Legal, reports that the California Supreme Court's decision to bar merchants from requesting customer zip codes has set off a frenzy of class action lawsuits against big-name retailers, including Target, Wal-Mart and Victoria's Secret. At least 20 class action lawsuits have been filed in California courts since Feb. 10, when the state's high court ruled that Williams-Sonoma had violated state law by requesting consumer zip codes. The Song-Beverly Credit Card Act of 1971 prohibits retailers from recording a customer's "personal identification information" during a credit card transaction and imposes a civil penalty of up to $1,000 per violation. For the first time, the Supreme Court ruled that such private information includes a cardholder's zip code. The Supreme Court reversed two lower court opinions and stated that its ruling would apply retroactively even though California appellate courts had previously ruled that zip codes were fair game for merchants. As a result, many retailers that were requesting and recording customer zip codes before last Thursday are now targets of class action suits. Plaintiffs lawyers reacted quickly to the court's new precedent. Jeffrey Krinsk of the class action litigation firm Finkelstein & Krinsk said his firm has filed four separate class action suits in the past week against Tiffany & Co., The Container Store, Shell and Radio Shack. "I wasn't anticipating the extent and emphatic nature of (the court's privacy) protections," Mr. Krinsk said of the Pineda v. Williams-Sonoma decision. "We thought we had to bring some cases in order to reaffirm the validity of the rule." He said each suit was filed on behalf of different plaintiffs -- all of whom contacted the firm with complaints of retailers requesting their zip codes. He said the firm does not advertise to recruit clients. MOST CASES SETTLE San Francisco firm, Nassiri & Jung, filed six class action suits on Monday in San Francisco Superior Court on behalf of a single named plaintiff, Heather Robertson. Defendants in those suits include Old Navy LLC, Target Corp and Macy's. Mr. Krinsk downplayed the burden the decision imposes on retailers. He pointed to a section of the opinion that emphasized the trial court's power to set the penalty anywhere between "a penny" and the maximum $1,000 per violation. "I'm sure the court will exercise its discretion so as not to provide a windfall (to plaintiffs)," Mr. Krinsk said. "The intent isn't about putting people out of business or to approach that level of vindictiveness." Most Song-Beverly suits end up settling, said Stephanie Sheridan of Sedgwick, Detert, Moran & Arnold who has represented numerous retailers in such cases. Defendants don't want to face the risks of a trial, she said, because of the potentially huge penalties and because plaintiffs don't have to prove that they have been harmed. Sheridan said she did not know of a single Song-Beverly case that has made it all the way through trial. David Faustman of Fox Rothschild in San Francisco said the decision is wreaking havoc for retailers doing business in California. "It's a very unfortunate opinion that's going to plague retailers who collect zip codes for very innocent purposes that have nothing to do with tracking somebody down," Mr. Faustman said. "And the potential damages are just massive, amounting to a violation of due process." Mr. Faustman won a dismissal of a similar class action suit against his client, Party City Corp, in 2008 when the California appeals court ruled that merchants could collect zip codes under the statute. In the prior case, the plaintiffs were unable to prove that Party City was using the customers' zip codes to track down their home addresses -- a fact Williams-Sonoma conceded. Mr. Faustman now has to defend Party City again over the same conduct in a class action suit filed in Los Angeles Superior Court on Feb. 14. Mr. Faustman said the Williams-Sonoma decision will force defense lawyers to shift their focus and come up with creative new arguments about the scope of damages and the propriety of certifying a class. Nassiri & Jung Files Class Action Over Zip Codes Kate Moser, writing for The Recorder, reports that a San Francisco plaintiff firm filed six proposed class actions on Feb. 14 seeking to penalize retailers for requesting ZIP codes from customers paying with a credit card, less than a week after the state Supreme Court ruled that practice is illegal. Kassra Nassiri of Nassiri & Jung filed the suits -- targeting Old Navy, Target Corp., Macy's Inc., Cost Plus Inc., Toys "R" Us Inc. and Trader Joe's Co. -- on behalf of named plaintiff Heather Robertson. California Supreme Court Justice Carlos Moreno, writing for the unanimous court, said retailers violate a consumer protection statute when they ask card-using customers for ZIP codes. ZIP codes constitute personal identification information, the court held, and requesting and recording that data from cardholders violates The Song-Beverly Credit Card Act of 1971. When paired with the cardholder's name, the ZIP code allows retailers to find a home mailing address. Another 10 class actions making similar claims were filed by a handful of other law firms in Los Angeles on Feb. 14, said Michael Burns, a partner in Seyfarth Shaw's San Francisco office who's tracking the litigation and has handled a similar case in the past. The San Francisco suits filed on Feb. 14 contend that "if successful, this action will enforce an important right affecting the public interest and will confer a significant benefit, whether pecuniary or non-pecuniary, on a large class of persons." Retailers can be forced to pay up to $1,000 for each violation of the act. "The potential statutory damages could be what they call 'annihilating,'" Mr. Burns said. Mr. Nassiri didn't respond to messages on Feb. 15. The high court's decision last week emphasized that the statute lists maximum penalties but that courts have discretion over how badly retailers get penalized. Retailers are bracing for those penalties and for more class actions. After the Feb. 14 "banner day" for the ZIP-code litigation, Mr. Burns said, "I have a feeling there's a lot more coming." WELLCARE HEALTH: Final Settlement Hearing Set for May 4 ------------------------------------------------------- The hearing to consider final approval of WellCare Health Plans, Inc.'s settlement agreement resolving the consolidated securities class action Eastwood Enterprises, L.L.C. v. Farha, et al., Case No. 8:07-cv-1940-VMC-EAJ is set for May 4, 2011, according to the Company's February 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2010. Putative class action complaints were filed in October 2007 and in November 2007. These putative class actions, entitled Eastwood Enterprises, L.L.C. v. Farha, et al. and Hutton v. WellCare Health Plans, Inc. et al., respectively, were filed in Federal Court against the Company, Todd Farha, its former chairman and chief executive officer, and Paul Behrens, the Company's former senior vice president and chief financial officer. Messrs. Farha and Behrens were also officers of various subsidiaries of the Company. The Eastwood Enterprises complaint alleged that the defendants materially misstated the Company's reported financial condition by, among other things, purportedly overstating revenue and understating expenses in amounts unspecified in the pleading in violation of the Securities Exchange Act of 1934, as amended. The Hutton complaint alleged that various public statements supposedly issued by the defendants were materially misleading because they failed to disclose that the Company was purportedly operating its business in a potentially illegal and improper manner in violation of applicable federal guidelines and regulations. The complaint asserted claims under the Exchange Act. Both complaints sought, among other things, certification as a class action and damages. The two actions were consolidated, and various parties and law firms filed motions seeking to be designated as Lead Plaintiff and Lead Counsel. In an Order issued in March 2008, the Federal Court appointed a group of five public pension funds from New Mexico, Louisiana and Chicago as Lead Plaintiffs. In October 2008, an amended consolidated complaint was filed in this class action asserting claims against the Company, Messrs. Farha and Behrens, and adding Thaddeus Bereday, the Company's former senior vice president and general counsel, as a defendant. In January 2009, the Company and certain other defendants filed a joint motion to dismiss the amended consolidated complaint, arguing, among other things, that the complaint failed to allege a material misstatement by defendants with respect to the Company's compliance with marketing and other health care regulations and failed to plead facts raising a strong inference of scienter with respect to all aspects of the purported fraud claim. The Federal Court denied the motion in September 2009 and the Company and the other defendants filed their answer to the amended consolidated complaint in November 2009. In April 2010, the Lead Plaintiffs filed their motion for class certification. On June 18, 2010, the USAO filed motions seeking to intervene and for a temporary stay of discovery of this matter. Discovery has been stayed through March 17, 2011. In August 2010, the Company reached agreement with the Lead Plaintiffs on the material terms of a settlement to resolve these matters. In December 2010, the terms of the settlement were documented in a formal settlement agreement that is subject to approval by the Federal Court following notice to all class members. On February 9, 2011, the Federal Court entered an order preliminarily approving the settlement and scheduled the final Settlement hearing for May 4, 2011. The settlement provides that the Company will make cash payments to the class of $52,500,000 within thirty business days following the Federal Court's preliminary approval of the settlement and $35,000,000 by July 31, 2011. The settlement also provides that the Company will issue to the class tradable unsecured subordinated bonds having an aggregate face value of $112,500,000, with a fixed coupon of 6% and a maturity date of December 31, 2016. The bonds shall also provide that, if the Company incur debt obligations in excess of $425,000,000 that are senior to the bonds, the holders of the bonds have the right to accelerate payment of the bonds. The Company will have the right to redeem the bonds at 102% of face value during the first year and at 100% of face value thereafter. The settlement has two further contingencies. First, it provides that if, within three years following the date of the settlement agreement, the Company is acquired or otherwise experiences a change in control at a share price of $30 or more, it will pay to the class an additional $25,000,000. Second, the settlement provides that the Company will pay to the class 25% of any sums it recovers from Messrs. Farha, Behrens and/or Bereday as a result of claims arising from the same facts and circumstances that gave rise to this matter. The Company may terminate the settlement if a certain number or percentage of the class opts out of the settlement class. The settlement agreement also provides that the settlement does not constitute an admission of liability by any party and such other terms as are customarily contained in settlement agreements of similar matters. As a result of this settlement having been reached, the Company's current estimate for the resolution of this matter is $200,000,000. The Company has discounted the $200,000,000 liability for the resolution of this matter and accrued this amount at its estimated fair value, which amounted to approximately $196,903,000 at December 31, 2010. Approximately $84,538,000 and $112,365,000 have been included in the current and long-term portions, respectively, of Amounts accrued related to investigation resolution in the Company's Consolidated Balance Sheet as of December 31, 2010. There can be no assurance that the settlement will be approved by the Federal Court and the actual outcome of this matter may differ materially from the terms of the settlement. * Proposed Kansas Bill to Restrict Consumer Class Actions --------------------------------------------------------- Rebecca Zepick, writing for Kake, reports that Kansas Consumer Protection Laws could be in for a big change. A proposed bill would remove class action lawsuits, and allow only government regulators to prosecute bad businesses. Imagine buying a car and it turns out to be a lemon. Imagine a debt collector calling at all hours of the night. Under the current law, the Consumer Protection Act allows people to hire a lawyer and sue to get their money back or stop the bad business practices. A new bill would change that, allowing only government regulators to prosecute the businesses. The Kansas Chamber of Commerce, a group that represents businesses across Kansas, introduced the bill saying frivolous lawsuits are a problem across the country. "If there's merit to the case, then we obviously want the consumer to have the right to go after that claim through the Consumer Protection Act, but if there's no merit to the court case then we feel it shouldn't be allowed to go forward, Eric Stafford of the Kansas Chamber of Commerce said. The proposed bill would remove class actions, or lawsuits brought by a group of people and would grant greater authority to the Federal Trade Commission in Washington. Supporters say the law will protect businesses from spending time and money in court. But opponents say the bill will undermine the Consumer Protection Act, taking away the power to protect Kansans from scams and unscrupulous businesses. The bill removes financial penalties against bad businesses, takes away protection from the agricultural buyers and other business consumers, and if passed, would be retroactive applying to all cases currently pending. "Russ Hazelwood, a consumer attorney and a spokesperson for the Kansas Association of Justice, said the bill would federalize consumer protection and leave victims with few good options. "Currently I can say either way you should call the district attorney or the attorney general and we will look at perhaps pursuing a case for you. "Now I'll say here's the 800 number for the FTC in Washington, D.C. give them a call and I'm sure you won't here back." Testimony on the new bill will continue Thursday at the Kansas Statehouse. ********* 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. Leah Felisilda, Neil U. Lim, Rousel Elaine Fernandez, Joy A. Agravante, Ronald Sy, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2011. 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 * * *