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C L A S S A C T I O N R E P O R T E R
Monday, May 23, 2011, Vol. 13, No. 100
Headlines
ADDUS HOMECARE: Court Sets Final Settlement Hearing for July 21
AMBAC FINANCIAL: To Pay $2.5 Mil. to Settle Securities Class Suit
BAYER CORP: Faces Wrongful Death Suit Over "Yaz" Contraceptive
CABLEVISION SYSTEMS: Awaits Ruling on Motion to Dismiss Suit
CALIFORNIA: Homeless to Testify in Property Seizure Class Action
CELERA CORP: BVF Partners to Opt Out of MOU in Delaware Action
CELERA CORP: BVF Partners to Opt Out of "Lauver v. Ordonez" MOU
CELERA CORP: Court Stays "McCreary" Suit Pending Delaware Actions
CELERA CORP: Continues to Face "Andal" Suit in California
CELERA CORP: Continues to Defend "Korngold" Suit in California
CELERA CORP: Continues to Defend "Washtenaw" Suit in California
CIGNA: Supreme Court Reverses Two Rulings in SPD Class Action
CNO FINANCIAL: Appeal in Pipefitters Union Suit Remains Pending
CNO FINANCIAL: Gets Prelim. OK of Deal in Annuity Marketing Suit
CNO FINANCIAL: Appeals in "Yue" Class Suit Remain Pending
CNO FINANCIAL: Appeal in "Ruderman" Suit Remains Pending in Fla.
CNO FINANCIAL: Trial in "Lifetrend" Suit Set for May 7, 2012
CNO FINANCIAL: Continues to Defend "Rowe" Class Suit in Illinois
COMCAST CORP: Antitrust Class Suit Remains Pending in Pennsylvania
COMCAST CORP: Appeal in California Suit Remains Pending
COMCAST CORP: Continues to Defend Multi-District Suit in Pa.
COVENTRY HEALTH: Awaits Ruling on Motion for Reconsideration
COVENTRY HEALTH: Awaits Rulings in ERISA-Violations Suit
COVENTRY HEALTH: Court to Consider Settlement Approval on May 27
DIAL CORP: Sued Over False Claims on Antibacterial Hand Wash
DORCHESTER MINERALS: Hearing in Texas Suit Set for June
DUKE ENERGY: Settles Retirement Plan Class Action for $30 Mil.
ECOLAB INC: Wage & Hour Lawsuits Still in Initial Phases
EURONET WORLDWIDE: Unit Continues to Defend Wage Violation Suit
FORTINET INC: Stockholder Suit Remains Pending in California
IKANOS COMMUNICATIONS: To File Brief in IPO Suit Appeal on June 17
IMPAX LABORATORIES: Discovery in Budeprion Suit Closes on May 27
INT'L COAL: Shareholder Damian Walker Files Class Action
JORDAN DANIELS: Sued for Diverting JDECI Trust Funds
JUNIPER NETWORKS: Motions to Dismiss IPO Suit Appeals Pending
KKR & CO: Second Phase of Discovery in Mass. Suit Still Ongoing
KKR & CO: Continues to Defend Del Monte Transaction-Related Suits
KKR & CO: Judgment in "Charter Township " Suit Declared Final
LAN AIRLINES: Continues to Defend Price-Fixing Class Suits
LENDER PROCESSING: Continues to Defend Default Services Suits
LENDER PROCESSING: "St. Clair" Suit Still Pending in Florida
MASSEY ENERGY: Sued in Va. Over Failure to Pay for Overtime Work
MEIJER INC: Recalls 7,600 Katie Brown Tea Light Candle Sets
ONLINE TRAVEL COS: Ordered to Pay Occupancy Taxes to Atlanta
PIEDMONT OFFICE: 11th Circuit Cancels Class Status of Georgia Suit
PIEDMONT OFFICE: Continues to Defend Maryland Securities Suit
RALCORP HOLDINGS: Awaits Ruling on Motions for Class Status
REDDY ICE: Continues to Defend Antitrust Lawsuit
REDDY ICE: Ontario Class Certification Proceedings Ongoing
REDDY ICE: Continues to Defend Alberta Class Suit
REDDY ICE: Awaits Court Approval of Canada Suits Settlement
REDDY ICE: Court Consolidates Kansas Suit With Michigan Suits
REDDY ICE: Faces Two Putative Class Suits in Tennessee & Arkansas
SANTARUS INC: Awaits Approval of Motion to Transfer New York Suit
SIRIUS XM: Settles Antitrust Class Action
SOUTHERN COPPER: Consolidated Derivative Suit to Go to Trial June
SOUTHERN COPPER: Awaits Ruling on Motion to Consolidate Suits
SUNRISE SENIOR: Class Discovery Ongoing in "Purnell" Lawsuit
SUNTRUST MORTGAGE: Faces Mortgage Loan Class Action in Calif.
TJX COMPANIES: Removes "Korn" Song-Beverly Suit to N.D. Calif.
TOYOTA MOTOR: Economic Damages in Acceleration MDL Can Proceed
UMB FINANCIAL: Continues to Defend Suits Over Posting Practices
UNITED STATES: DOJ Seeks Dismissal of Gay Military Class Action
VISA INC: Court Proposes Sept. 12, 2012 Trial Date in IPO Suit
VISA INC: Continues to Face "Watson" Suit in British Columbia
VISA INC: Plaintiff in Call Center Suit Seeks to Add Company
VISA INC: Remains a Defendant in Data Pass Litigation
* Bill S.F. 149 Takes Away Consumers' Right to Join Class Actions
* Madison & St. Clair Counties Class Action Destination
* Securities Class Actions Rise in 2010, PwC Study Shows
*********
ADDUS HOMECARE: Court Sets Final Settlement Hearing for July 21
---------------------------------------------------------------
A federal court in Illinois scheduled for July 21, 2011, a final
hearing to consider approval of a settlement entered in a class
action arising from Addus Homecare Corporation's initial public
offering, according to the Company's May 5, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On March 26, 2010, a class action lawsuit was filed in the United
States District Court for the Northern District of Illinois on
behalf of a class consisting of all persons or entities who
purchased or otherwise acquired the Company's common stock between
October 27, 2009, and March 18, 2010, in connection with the
Company's IPO. The complaint, which was amended on August 10,
2010, asserts claims against the Company and individual officers
and directors pursuant to Sections 11 and 15 of the Securities Act
of 1933 and alleges, inter alia, that the Company's registration
statement was materially false and/or omitted the following: (1)
that the Company's accounts receivable included at least $1.5
million in aging receivables that should have been reserved for;
and (2) that the Company's home health segment's revenues were
falling short of internal forecasts due to a slowdown in
admissions from the Company's integrated services program due to
the State of Illinois' effort to develop new procedures for
integrating care. A motion to dismiss the complaint was filed on
behalf of the defendants on September 20, 2010. The Company and
the other defendants have denied and continue to deny all charges
of wrongdoing or liability arising out of any conduct, statements,
acts or omissions alleged in the complaint. In addition, on
April 16, 2010, Robert W. Baird & Company, on behalf of the
underwriters of the IPO, notified the Company that the
underwriters are seeking indemnification in respect of the action
pursuant to the underwriting agreement entered into in connection
with the IPO.
On March 21, 2011, the Company and the other named defendants
entered into a stipulation of settlement with the plaintiffs with
respect to the class action, pursuant to which they are to cause
$3 million to be paid into a settlement fund. The monetary amount
of this settlement is covered by insurance.
On March 22, 2011, the United States District Court for the
Northern District of Illinois preliminarily approved the
settlement and scheduled a July 21, 2011, hearing to consider,
among other things, whether to finally approve the settlement of
the class action. If the settlement is given final approval by the
court, the class action will be dismissed with prejudice.
The effectiveness of the stipulation of settlement and the
settlement incorporated therein is conditioned on the following
remaining conditions: (i) the court finally approving the
settlement, (ii) any judgment of dismissal entered by the court
becoming final and (iii) any judgment of dismissal entered in the
derivative action becoming final. There can be no assurance the
settlement will be approved or become effective.
AMBAC FINANCIAL: To Pay $2.5 Mil. to Settle Securities Class Suit
-----------------------------------------------------------------
Bill Rochelle, Bankruptcy Columnist for Bloomberg News, reports
that Ambac Financial Group Inc., the holding company for an
insurance company partially in rehabilitation, tentatively agreed
to pay $2.5 million in cash to settle several securities class-
action lawsuits first filed in January 2008.
The settlement must be approved by the bankruptcy court in New
York, where the Ambac parent filed for Chapter 11 protection.
Insurance companies that provided directors' and officers'
liability insurance will provide an additional $24.6 million in
the settlement.
The class actions were settled following a fifth mediation that
took place after Ambac's Chapter 11 filing in November. In one of
the class suits, the U.S. district judge in New York dismissed
claims based on a March 2008 securities offering while sustaining
claims related to a February 2007 offering.
Ambac's insurance subsidiary stopped paying dividends to the
parent in 2007 and stopped writing new business entirely in mid-
2008. The Ambac parent filed under Chapter 11 in November and
listed assets of $90.7 million and liabilities totaling $1.62
billion, virtually all unsecured. Almost all of the debt is made
of up of $1.62 billion owing on seven note issues. One issue for
$400 million is subordinated.
The class actions being settled are In re Ambac Financial Group
Inc. Securities Litigation, 08-00411, U.S. District Court,
Southern District of New York (Manhattan).
The state insurance rehabilitation case is In re The
Rehabilitation of Segregated Account of Ambac Assurance Corp.,
2010cv001576, Dane County, Wisconsin, Circuit Court (Madison).
The parent's Chapter 11 case is In re Ambac Financial Group Inc.,
10-15973, U.S. Bankruptcy Court, Southern District of New York
(Manhattan).
BAYER CORP: Faces Wrongful Death Suit Over "Yaz" Contraceptive
--------------------------------------------------------------
Lieff Cabraser Heimann & Bernstein, LLP and Lisa Rodriguez of the
New Jersey-firm, Trujillo, Rodriguez, and Richards, LLC, disclosed
that Joan Cummins of Hackettstown, New Jersey, on May 10 filed a
wrongful death lawsuit against Bayer Corporation charging that its
oral contraceptive, Yaz, caused the sudden death of her eighteen-
year old daughter, Michelle Pfleger.
On September 24, 2010, Michelle Pfleger collapsed on the way to
her morning class at Elon University in North Carolina. The
emergency team rushed Michelle to a nearby hospital, but despite
all of their efforts, they were unable to save her. The autopsy
report showed that Michelle died from cardiac arrest triggered by
a pulmonary emboli, which is a blood clot in the lungs that can
lead to abnormally low blood pressure and sudden death. Michelle
was prescribed Yaz for the treatment of acne. The Complaint
charges that Yaz caused the fatal blood clot in Ms. Pfleger's
lungs.
"One day she was a freshman at college so full of hope and promise
and the next she was gone," said Michelle's mother, Joan Cummins.
"I can only hope that by publicizing what happened to Michelle, I
can keep another family from having to go through this."
"As alleged in the Complaint, Yaz is a dangerous prescription drug
sold without adequate warnings about the risks of serious and
fatal injuries," stated attorney Wendy R. Fleishman, Esq. "Bayer
failed to warn doctors and patients that Yaz poses a greater risk
of serious side effects than previous generations of oral
contraceptives."
The filing of the wrongful death lawsuit follows the publication
last month of two studies in the British Medical Journal finding
that women taking oral contraceptives with the hormone
drospirenone, which includes Bayer's Yaz and Yasmin, have a three-
fold or two-fold increased risk of developing serious blood clots
than women taking earlier-generation oral contraceptives that do
not contain drospirenone. In one study, the risk of blood clots
in the veins and the lungs was more than three times greater for
women prescribed contraceptives containing drospirenone.
"The FDA's adverse event database for Yaz reveals many serious
adverse events associated with use of the drug, including many
deaths, strokes, heart attacks, blood clots in young and healthy
women," added Fleishman. "Bayer must take legal responsibility
for injuries Yaz has inflicted on young women and teenagers across
America."
The law in most states provides several personal injury claims for
persons who have been seriously injured by a medical device or
prescription drug with dangerous, undisclosed side effects.
If you or a family member have suffered a serious injury or a
loved one died after taking Yaz, or similar drugs Yasmin and
Ocella, please read our Yaz side effects FAQ Web page to learn
more about your legal rights and submit a complaint.
About Lieff Cabraser Heimann & Bernstein, LLP
Recognized as "one of the nation's premier plaintiff's firms,"
Lieff Cabraser Heimann & Bernstein, LLP is a sixty-plus attorney
law firm with offices in San Francisco, New York and Nashville.
For the last eight consecutive years, the National Law Journal has
recognized Lieff Cabraser as one of the top plaintiffs' law firms
in America.
Contacts: Wendy R. Fleishman, Esq.
LIEFF CABRASER HEIMANN & BERNSTEIN, LLP
Telephone: (212) 355-9500
E-mail: wfleishman@lchb.com
CABLEVISION SYSTEMS: Awaits Ruling on Motion to Dismiss Suit
------------------------------------------------------------
Cablevision Systems Corporation is awaiting a ruling on its motion
to dismiss a consolidated class action lawsuit filed by customers
seeking recovery for lack of Fox programming, according to the
Company's May 5, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
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 the Company, and as a result, those stations and networks
were unavailable on the Company's cable television systems. On
October 30, 2010, the Company and Fox reached an agreement on new
affiliation agreements for these stations and networks and
carriage was restored. Several class action lawsuits were
subsequently filed on behalf of the Company's customers seeking
recovery for the lack of Fox programming. Those lawsuits were
consolidated in an action before the United States District Court
for the Eastern District of New York and a consolidated complaint
was filed in that court on February 22, 2011. The plaintiffs 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. The Company has filed a motion
to dismiss the complaint.
CALIFORNIA: Homeless to Testify in Property Seizure Class Action
----------------------------------------------------------------
Huffington Post reports that dozens of homeless people will soon
take the stand in a Sacramento, Calif. courtroom to share their
experiences of having their personal possessions seized by local
authorities.
The rare case highlights the often untold struggles of homeless
Americans attempting to create makeshift homes for themselves in a
climate where law enforcement policies target them and their
rights are ambiguous.
The civil class action lawsuit brought before federal court
represents all homeless people in Sacramento whose possessions
were taken in police sweeps since 2005, The Sacramento Bee
reports. The period of time includes the highly publicized
closure of the "Tent City" homeless encampment.
Approximately 20 people are expected to testify, but the case
touches many more. So far, over 60 homeless men and women have
filed depositions and the case could end up including 2,000
plaintiffs total, KCRA reports.
Each one has their own story of how their belongings were taken
and what they lost. Some had tents, sleeping bags and other
necessities confiscated; others lost sentimental possessions.
According to The Sacramento Bee, among the items a certain Linda
McKinley lost that day were her identification card, eyeglasses,
medication, legal papers and photographs.
"I just lost everything," she said. "It was really devastating.
It was like losing my house in a sense. It was like I had been
stripped."
A homeless veteran, Kendall Gabriel, told The Sacramento Bee that
his medals, a Silver Star and a Purple Heart, were among the items
police confiscated from him.
Prosecuting attorney Mark Merin, Esq., charges that Sacramento
authorities violated the constitutional rights of the plaintiffs
by seizing property. Mr. Merin says that items were taken without
sufficient notification and destroyed -- instead of giving the
homeless opportunities to reclaim them. California law mandates
property be kept for 90 days so that owners are able to retrieve
their possessions.
In an interview with KCRA News, Mr. Merin said: "I think the city
had a mandate to clean up areas where homeless people were living.
And it felt that the easiest way to do it was just to take the
stuff and toss it."
City officials meanwhile argue that police officers were only
doing their job by enforcing laws that restrict people from
camping for more than 24 hours in areas not designated as
campgrounds. They also deny that the police force routinely
destroyed or discarded property.
In the case of the dissolution of the tent city specifically, the
city says that residents were given weeks of advanced notice --
and had the opportunity to relocate their belongings, but chose
not to.
In its most simplistic form, the case begs the question: what
rights do the homeless have?
While the prosecution says rights were violated, Sacramento
government officials say that the constitutional rights of the
homeless were upheld and they were treated no differently that any
other citizens.
While instances of homeless people claiming the confiscation of
their property is common across America, cases like this rarely
make it to trial for a variety of reasons.
The homeless are socially ostracized, making it difficult for them
to have proper venues to take issues of discrimination to court.
Even if legal advocates want to help, organizing a group of
individuals without permanent addresses or contact information can
be a challenge to pulling together a case.
A similar class action suit filed by the ACLU in San Diego was
settled out of court. Like the Sacramento case, the lawsuit
charged that police conducted raids in which they illegally
confiscated and destroyed things belonging to the homeless.
The city of San Diego agreed to open a storage facility to house
all confiscated property, so that homeless owners would be able to
get back their items.
Whether this solution will play a part in the Sacramento decision
is unclear, but the groundbreaking case's outcome could have
wider-reaching implications for the homeless beyond California's
capital.
CELERA CORP: BVF Partners to Opt Out of MOU in Delaware Action
-------------------------------------------------------------
A third party indicated its intent to opt out of a memorandum of
understanding reached among parties in a consolidated class action
involving Celera Corporation in Delaware, according to the
Company's May 5, 2011 Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 26, 2011.
On March 18, 2011, Celera announced that it had entered into an
Agreement and Plan of Merger, dated March 17, 2011 (as amended
effective April 18, 2011), with Quest Diagnostics Incorporated and
Spark Acquisition Corporation (Purchaser), a wholly owned
subsidiary of Quest. Pursuant to the Merger Agreement and upon the
terms and subject to the conditions thereof, on March 28, 2011,
Purchaser commenced a tender offer to acquire all of the issued
and outstanding shares of the common stock of Celera for $8.00 per
share, net to the holder thereof in cash, without interest and
subject to applicable withholding taxes. The Merger Agreement
provides that, among other things, upon its terms and subject to
the satisfaction or written waiver of certain conditions,
following completion of the Tender Offer, and in accordance with
the applicable provisions of the Delaware General Corporation Law,
Purchaser will be merged with and into Celera, with Celera
continuing as the surviving corporation in the Merger.
On May 4, 2011, Quest announced that it had successfully completed
the Tender Offer and accepted for payment 52.38% of the Company's
outstanding shares of common stock on a fully diluted basis.
During March 2011, the following putative class action lawsuits
were filed in the Delaware Court of Chancery: New Orleans
Employees Retirement System v. Ayers, et al. (filed on March 22,
2011), Ariel Holdings LLC v. Ayers, et al. (filed on March 24,
2011) and Henderson, et al. v. Ayers, et al. (filed on March 29,
2011). The Delaware Complaints named as defendants the members of
the Company's Board of Directors, as well as the Company, Quest
and Purchaser. The plaintiffs in the Delaware Complaints alleged
that members of the Company Board breached their fiduciary duties
to the Company's stockholders in connection with the Tender Offer
and the Merger, and further claimed that Quest aided and abetted
those alleged breaches of fiduciary duty. The Delaware Complaints
alleged that the Tender Offer and the Merger involve an unfair
price, an inadequate sales process and unreasonable deal
protection devices and that defendants agreed to the transactions
to benefit themselves personally. The Delaware Complaints sought
compensatory damages and injunctive relief, including to enjoin
the Tender Offer and the Merger, and an award of attorneys' and
other fees and costs, in addition to other relief. On April 1,
2011, the Delaware Complaints were consolidated into one as In re
Celera Corporation Shareholder Litigation, Consolidated C.A. No.
6304-VCP.
On April 1, 2011, a verified consolidated amended class action
complaint was filed in the Amended Delaware Complaint, which
superseded the existing complaints pending in the Delaware Court
of Chancery, and named as defendants the members of the Company
Board, as well as the Company, Quest and Purchaser. The Amended
Delaware Complaint alleged that the members of the Company Board
breached their fiduciary duties to the Company's stockholders in
connection with the Tender Offer and the Merger, and further
claimed that the Company, Quest and Purchaser aided and abetted
those alleged breaches of fiduciary duty. The Amended Delaware
Complaint alleged that the Tender Offer and Merger between the
Company and Quest involves an unfair price, an inadequate sales
process and unreasonable deal protection devices and that
defendants agreed to the transactions to benefit themselves
personally. The Amended Delaware Complaint further alleged that
the Company's Schedule 14D-9 filed with the SEC on March 28, 2011
(the Schedule 14D-9) failed to fully and fairly disclose all
material information relating to the background of the Tender
Offer, the Company's financial projections, and the fairness
opinion of Credit Suisse directed to the Company Board. The
Amended Delaware Complaint sought compensatory damages and
injunctive relief, including to enjoin the Tender Offer and
Merger, and an award of attorneys' and other fees and costs, in
addition to other relief.
On April 18, 2011, the Company and other defendants entered into a
memorandum of understanding with the parties to the actions
pending in the Delaware Court of Chancery and the three cases
pending in the Alameda County Superior Court consolidated as
Lauver v. Ordo¤ez, et al., pursuant to which the Company and such
parties agreed in principle, and subject to certain conditions, to
settle those stockholder lawsuits. Subject to approval of the
Delaware Court of Chancery and further definitive documentation,
the MOU establishes a framework to resolve the allegations by the
settling plaintiffs against the Company and other defendants in
connection with the Tender Offer and the Merger Agreement and
contemplates a release and settlement by the Company's
stockholders of all claims against the Company and other
defendants and their affiliates and agents in connection with the
Tender Offer and the Merger Agreement (including release of those
claims brought in the non-settling actions). In exchange for the
release and settlement, pursuant to the terms of the MOU, the
parties agreed, after arm's length discussions, that (i) the
Company would provide certain additional disclosures in an
amendment to the Schedule 14D-9, (ii) the Company, Quest and
Purchaser would amend the Merger Agreement, (iii) the Company
would release third parties currently subject to confidentiality
agreements with the Company from any standstill restrictions
contained in such agreements and (iv) the Company would file a
Current Report on Form 8-K and related press release disclosing
the amendment of the Merger Agreement and the terms of the MOU.
The Company filed the foregoing Current Report on Form 8-K on
April 18, 2011. The settlement is also contingent upon, among
other things, consummation of the Tender Offer and the Merger. As
part of the settlement, the Company agreed that counsel to the
plaintiffs in the settling actions established a right to an award
of attorneys' fees and expenses based upon the benefits that the
settlement provided to the class, which award would be paid by the
Company or its successors. It is not possible to estimate at this
time what amount of fees and expenses may be awarded by the court.
In the event that the settlement is not approved or otherwise does
not become final, the Company will resume its vigorous defense of
the actions.
On May 2, 2011, BVF Partners L.P. filed a Notice of Intention to
Object to Proposed Settlement with the Delaware Court of Chancery
indicating its intent to object to approval of the proposed
settlement, to seek appraisal for their shares, and to seek to
opt-out of the proposed settlement, if approved by the court.
CELERA CORP: BVF Partners to Opt Out of "Lauver v. Ordonez" MOU
---------------------------------------------------------------
BVF Partners L.P. indicated its intent to object to a memorandum
of understanding, if approved by the court, reached among parties
in a consolidated class action captioned Lauver v. Ordonez, et
al., involving Celera Corporation in California, according to the
Company's May 5, 2011 Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 26, 2011.
On March 18, 2011, Celera announced that it had entered into an
Agreement and Plan of Merger, dated March 17, 2011 (as amended
effective April 18, 2011), with Quest Diagnostics Incorporated and
Spark Acquisition Corporation (Purchaser), a wholly owned
subsidiary of Quest. Pursuant to the Merger Agreement and upon the
terms and subject to the conditions thereof, on March 28, 2011,
Purchaser commenced a tender offer to acquire all of the issued
and outstanding shares of the common stock of Celera for $8.00 per
share, net to the holder thereof in cash, without interest and
subject to applicable withholding taxes. The Merger Agreement
provides that, among other things, upon its terms and subject to
the satisfaction or written waiver of certain conditions,
following completion of the Tender Offer, and in accordance with
the applicable provisions of the Delaware General Corporation Law,
Purchaser will be merged with and into Celera, with Celera
continuing as the surviving corporation in the Merger.
On May 4, 2011, Quest announced that it had successfully completed
the Tender Offer and accepted for payment 52.38% of the Company's
outstanding shares of common stock on a fully diluted basis.
During March 2011, the following putative class action lawsuits
were filed in the Alameda County Superior Court: Lauver v. Celera
Corp., et al. (filed on March 23, 2011), Hobby v. Celera Corp., et
al. (filed on March 23, 2011) and Eric Wolf v. Celera Corporation,
et al., (filed on March 29, 2011). The Lauver and Wolf complaints
named as defendants the members of the Company Board, the Company,
Quest and Purchaser. The Hobby complaint named as defendants the
members of the Company Board, the Company and Quest. The Alameda
County Complaints alleged that the Company and its directors
breached their fiduciary duties to the Company's stockholders in
connection with the Tender Offer and the Merger, and further
claimed that Quest aided and abetted those alleged breaches of
fiduciary duty. The Alameda County Complaints alleged that the
Tender Offer and the Merger involve an unfair price, an inadequate
sales process and unreasonable deal protection devices and that
defendants agreed to the transactions to benefit themselves
personally. The Lauver complaint further alleged that the
Company's Schedule 14D-9 failed to disclose material information
relating to the Company's financial forecasts, the fairness
opinion of Credit Suisse directed to the Company Board, and the
background of the Tender Offer and the Merger. The Wolf complaint
further alleged that the fairness opinion of Credit Suisse
directed to the Company Board was materially false and misleading.
The Alameda County Complaints sought injunctive relief, including
to enjoin the Tender Offer and the Merger, and an award of
attorneys' and other fees and costs, in addition to other relief.
On April 5, 2011, the Alameda Superior Court consolidated the
Alameda County Complaints as Lauver v. Ordo¤ez, et al.
On April 18, 2011, the Company and other defendants entered into a
memorandum of understanding (the MOU) with the parties to the
actions pending in the Delaware Court of Chancery and the three
cases pending in the Alameda County Superior Court consolidated as
Lauver v. Ordo¤ez, et al., pursuant to which the Company and such
parties agreed in principle, and subject to certain conditions, to
settle those stockholder lawsuits. Subject to approval of the
Delaware Court of Chancery and further definitive documentation,
the MOU establishes a framework to resolve the allegations by the
settling plaintiffs against the Company and other defendants in
connection with the Tender Offer and the Merger Agreement and
contemplates a release and settlement by the Company's
stockholders of all claims against the Company and other
defendants and their affiliates and agents in connection with the
Tender Offer and the Merger Agreement (including release of those
claims brought in the non-settling actions). In exchange for the
release and settlement, pursuant to the terms of the MOU, the
parties agreed, after arm's length discussions, that (i) the
Company would provide certain additional disclosures in an
amendment to the Schedule 14D-9, (ii) the Company, Quest and
Purchaser would amend the Merger Agreement, (iii) the Company
would release third parties currently subject to confidentiality
agreements with the Company from any standstill restrictions
contained in such agreements and (iv) the Company would file a
Current Report on Form 8-K and related press release disclosing
the amendment of the Merger Agreement and the terms of the MOU.
The Company filed the Current Report on Form 8-K on April 18,
2011. The settlement is also contingent upon, among other things,
consummation of the Tender Offer and the Merger. As part of the
settlement, the Company agreed that counsel to the plaintiffs in
the settling actions established a right to an award of attorneys'
fees and expenses based upon the benefits that the settlement
provided to the class, which award would be paid by the Company or
its successors. It is not possible to estimate at this time what
amount of fees and expenses may be awarded by the court. In the
event that the settlement is not approved or otherwise does not
become final, the Company will resume its vigorous defense of the
actions.
On May 2, 2011, BVF Partners L.P. filed a Notice of Intention to
Object to Proposed Settlement with the Delaware Court of Chancery
indicating its intent to object to approval of the proposed
settlement, to seek appraisal for their shares, and to seek to opt
out of the proposed settlement, if approved by the court.
CELERA CORP: Court Stays "McCreary" Suit Pending Delaware Actions
-----------------------------------------------------------------
A California federal court stayed a putative class action lawsuit
captioned McCreary v. Celera Corp., et al., pending the resolution
of the consolidated class action pending in Delaware, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 26,
2011.
On March 18, 2011, Celera announced that it had entered into an
Agreement and Plan of Merger, dated March 17, 2011 (as amended
effective April 18, 2011), with Quest Diagnostics Incorporated and
Spark Acquisition Corporation (Purchaser), a wholly owned
subsidiary of Quest. Pursuant to the Merger Agreement and upon the
terms and subject to the conditions thereof, on March 28, 2011,
Purchaser commenced a tender offer to acquire all of the issued
and outstanding shares of the common stock of Celera for $8.00 per
share, net to the holder thereof in cash, without interest and
subject to applicable withholding taxes. The Merger Agreement
provides that, among other things, upon its terms and subject to
the satisfaction or written waiver of certain conditions,
following completion of the Tender Offer, and in accordance with
the applicable provisions of the Delaware General Corporation Law,
Purchaser will be merged with and into Celera, with Celera
continuing as the surviving corporation in the Merger.
On May 4, 2011, Quest announced that it had successfully completed
the Tender Offer and accepted for payment 52.38% of the Company's
outstanding shares of common stock on a fully diluted basis.
On April 1, 2011, the putative class action lawsuit was filed in
the United States District Court for the Northern District of
California. The complaint names as defendants the members of the
Company Board, as well as the Company, Quest and Purchaser. The
plaintiff alleges that the Company and its directors violated
sections 14(d)(4) and 14(e) of the Securities Exchange Act of
1934, as amended (the Exchange Act) by filing a materially
misleading Schedule 14D-9, that the Company's directors breached
their fiduciary duties to the Company's stockholders in connection
with the Tender Offer and the Merger, and further claims that the
Company and Quest aided and abetted those alleged breaches of
fiduciary duty. The complaint alleges that the Tender Offer and
Merger between the Company and Quest involves an unfair price, an
inadequate sales process and unreasonable deal protection devices,
that the Company's directors agreed to the transactions to benefit
themselves personally, and that the Schedule 14D-9 fails to
adequately disclose information relating to the opinion provided
by Credit Suisse to the Company Board. The complaint seeks
injunctive relief, including to enjoin the Tender Offer and
Merger, and an award of attorneys' and other fees and costs, in
addition to other relief. On April 13, 2011, the United States
District Court for the Northern District of California entered an
order staying the McCreary case pending the resolution of the
consolidated class action pending in the Delaware Court of
Chancery.
The Company will continue to vigorously defend the McCreary case.
CELERA CORP: Continues to Face "Andal" Suit in California
---------------------------------------------------------
Celera Corp. continues to face a putative class action captioned
Andal v. Celera Corp., et al., before a California court,
according to the Company's May 5, 2011 Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 26, 2011.
On March 18, 2011, Celera announced that it had entered into an
Agreement and Plan of Merger, dated March 17, 2011 (as amended
effective April 18, 2011), with Quest Diagnostics Incorporated and
Spark Acquisition Corporation (Purchaser), a wholly owned
subsidiary of Quest. Pursuant to the Merger Agreement and upon the
terms and subject to the conditions thereof, on March 28, 2011,
Purchaser commenced a tender offer to acquire all of the issued
and outstanding shares of the common stock of Celera for $8.00 per
share, net to the holder thereof in cash, without interest and
subject to applicable withholding taxes. The Merger Agreement
provides that, among other things, upon its terms and subject to
the satisfaction or written waiver of certain conditions,
following completion of the Tender Offer, and in accordance with
the applicable provisions of the Delaware General Corporation Law,
Purchaser will be merged with and into Celera, with Celera
continuing as the surviving corporation in the Merger.
On May 4, 2011, Quest announced that it had successfully completed
the Tender Offer and accepted for payment 52.38% of the Company's
outstanding shares of common stock on a fully diluted basis.
On April 11, 2011, a putative class action lawsuit captioned Andal
v. Celera Corp., et al., was filed in the United States District
Court for the Northern District of California. The complaint names
as defendants the members of the Company Board, as well as the
Company, Quest and Purchaser. The plaintiff alleges that the
Company and its directors violated section 14(e) of the Exchange
Act by filing a materially misleading Schedule 14D-9, that the
Company's directors breached their fiduciary duties to the
Company's stockholders in connection with the Tender Offer and the
Merger, that Quest, the Company and its directors aided and
abetted those alleged breaches of fiduciary duty, and further
claims that the Company and its directors violated section 20(a)
of the Exchange Act by aiding and abetting those alleged breaches
of fiduciary duty. The complaint alleges that the Tender Offer and
Merger between the Company and Quest involves an unfair price, an
inadequate sales process and unreasonable deal protection devices,
that defendants agreed to the transactions to benefit themselves
personally, and that the Schedule 14D-9 fails to adequately
disclose information relating to the opinion provided by Credit
Suisse to the Company Board. The complaint seeks injunctive
relief, including to enjoin the Tender Offer and Merger, and an
award of attorneys' and other fees and costs, in addition to other
relief.
The Company will continue to vigorously defend the Andal case.
CELERA CORP: Continues to Defend "Korngold" Suit in California
--------------------------------------------------------------
Celera Corp. continues to face a putative class action captioned
Korngold v. Ayers, et al., before a California court, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 26,
2011.
On March 18, 2011, Celera announced that it had entered into an
Agreement and Plan of Merger, dated March 17, 2011 (as amended
effective April 18, 2011), with Quest Diagnostics Incorporated and
Spark Acquisition Corporation (Purchaser), a wholly owned
subsidiary of Quest. Pursuant to the Merger Agreement and upon the
terms and subject to the conditions thereof, on March 28, 2011,
Purchaser commenced a tender offer to acquire all of the issued
and outstanding shares of the common stock of Celera for $8.00 per
share, net to the holder thereof in cash, without interest and
subject to applicable withholding taxes. The Merger Agreement
provides that, among other things, upon its terms and subject to
the satisfaction or written waiver of certain conditions,
following completion of the Tender Offer, and in accordance with
the applicable provisions of the Delaware General Corporation Law,
Purchaser will be merged with and into Celera, with Celera
continuing as the surviving corporation in the Merger.
On May 4, 2011, Quest announced that it had successfully completed
the Tender Offer and accepted for payment 52.38% of the Company's
outstanding shares of common stock on a fully diluted basis.
On April 7, 2011, a putative class action lawsuit captioned
Korngold v. Ayers, et al., was filed in the Alameda County
Superior Court. The complaint names as defendants the members of
the Company Board, as well as the Company, Quest and Purchaser.
The plaintiff alleges that the Company's directors breached their
fiduciary duties to the Company's stockholders in connection with
the Tender Offer and the Merger, and that Quest and Purchaser
aided and abetted those alleged breaches of fiduciary duty. The
complaint alleges that the Tender Offer and Merger between the
Company and Quest involves an unfair price, an inadequate sales
process and unreasonable deal protection devices, and that
defendants agreed to the transactions to benefit themselves
personally. The complaint seeks compensatory damages and
injunctive relief, including to enjoin the Tender Offer and
Merger, and an award of attorneys' and other fees and costs, in
addition to other relief.
The Company will continue to vigorously defend the Korngold case.
CELERA CORP: Continues to Defend "Washtenaw" Suit in California
---------------------------------------------------------------
A California federal court ordered the lead plaintiff in a
purported class action captioned Washtenaw County Employees'
Retirement System v. Celera Corporation to file a second amended
complaint by May 6, 2011, according to the Company's May 5, 2011
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 26, 2011.
On June 14, 2010, a purported class action captioned Washtenaw
County Employees' Retirement System v. Celera Corporation was
filed in the United States District Court for the Northern
District of California against Celera and certain of its directors
and current and former officers. On September 23, 2010, the court
appointed a lead plaintiff and renamed the action In re Celera
Corp. Securities Litigation. An amended complaint was filed on
October 15, 2010. The amended complaint alleged that, from
April 24, 2008, through July 22, 2009, the defendants set
inadequate allowances for doubtful accounts, concealed the extent
to which Celera's accounts receivable were impaired, and made
other false and misleading statements regarding the Company's
business and financial results with an intent to defraud
investors. The amended complaint sought unspecified damages on
behalf of an alleged class of purchasers of the Company's stock
during the period in which the alleged misrepresentations were
made, as well as an award to the lead plaintiff of its costs and
attorneys' fees. On March 24, 2011, pursuant to the parties'
stipulation, the Court ordered the lead plaintiff to file a second
amended complaint on or before May 6, 2011. Celera believes that
plaintiffs' claims are without merit and intends to vigorously
defend the action.
CIGNA: Supreme Court Reverses Two Rulings in SPD Class Action
-------------------------------------------------------------
David McCann, writing for CFO.com, reports that the Supreme Court
on May 16 reversed two lower-court rulings in a class-action case
that arose after Cigna switched from a traditional defined-
benefits retirement plan to a cash-balance plan in 1998.
As CFO reported in December, Cigna employees had argued that the
new summary plan description (SPD) misled them into thinking they
would be getting the full value of the first plan plus new
benefits accruing from the date of the change. But, as stated in
the detailed plan document, and as is common practice with such
plan changes, each worker's cash-balance account had a starting
balance that was less than the value of his or her defined-benefit
account.
A federal district court sided with the employees. In its appeal,
the insurance company did not deny that the SPD was misleading,
but rather took issue with the lower court's finding that all
27,000 class members suffered "likely harm." Employees who were
not likely to have done anything differently had the SPD been
crystal clear should not get the higher retirement benefits, Cigna
argued. But the appeals court upheld the original ruling, and the
plaintiffs brought the case to the Supreme Court.
The May 16 ruling overturns the two earlier decisions, which
enforced the terms of the SPD, as understood by the participants,
instead of the terms of the plan itself. "The lower-court ruling
had posed a substantial threat to plan sponsors by subjecting them
to classwide relief for a miscommunication without requiring any
showing of harm," says Myron Rumeld of the global law firm
Proskauer. "But the Supreme Court correctly concluded that the
SPD is merely meant as a summary of the plan, and its mistaken
terms should not be enforced as a contractual matter."
The high court did remand the case back to district court to
consider whether the relief it had imposed could still be
fashioned as an equitable matter. But it placed significant
obstacles to such relief by making clear that any equitable relief
must be conditioned on a showing of fraud or harm to plan
participants.
"In short, the court rejected the notion that there is a 'one-
size-fits-all' approach to claims based on faulty communications,
such that all participants automatically recover additional
benefits that were never intended under the terms of the plan,"
Mr. Rumeld says.
CNO FINANCIAL: Appeal in Pipefitters Union Suit Remains Pending
---------------------------------------------------------------
An appeal from an order dismissing the class action complaint
filed by Plumbers and Pipefitters Local Union No. 719 Pension
Trust Fun against CNO Financial Group, Inc., remains pending,
according to the Company's May 5, 2011 Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
On August 6, 2009, a purported class action complaint was filed in
the United States District Court for the Southern District of New
York, Plumbers and Pipefitters Local Union No. 719 Pension Trust
Fund, on behalf of itself and all others similarly situated v.
Conseco, Inc., et al., Case No. 09-CIV-6966, on behalf of
purchasers of the Company's common stock during the period from
August 4, 2005 to March 17, 2008. The complaint charges CNO and
certain of its officers and directors with violations of the
Securities Exchange Act of 1934. On June 2, 2010, the lead
plaintiff filed a second amended complaint. The amended complaint
alleges that, during the Class Period, the defendants issued
numerous statements regarding the Company's financial performance.
As alleged in the complaint, these statements were materially
false and misleading because the defendants misrepresented and
failed to disclose the following adverse facts, among others: (i)
that the Company was reporting materially inaccurate revenue
figures; (ii) that the Company's reported financial results were
materially misstated and did not present the true operating
performance of the Company; (iii) that the Company's shareholders'
equity was materially overstated during the Class Period,
including the overstatement of shareholders' equity by $20.6
million at December 31, 2006; and (iv) as a result of the
foregoing, the defendants lacked a reasonable basis for their
positive statements about the Company, its corporate governance
practices, its prospects and earnings growth. On August 2, 2010,
the Company filed a motion to dismiss the amended complaint. On
March 29, 2011, the court granted the Company's motion to dismiss,
and on April 29, 2011, the lead plaintiff filed a notice of
appeal. The Company believes the complaint is without merit and
intends to defend it vigorously. The ultimate outcome of the
action cannot be predicted with certainty.
CNO Financial Group, Inc. -- http://www.CNOinc.com/-- is a
holding company. The company's insurance subsidiaries --
principally Bankers Life and Casualty Company, Colonial Penn Life
Insurance Company and Washington National Insurance Company --
serve working American families and seniors by helping them
protect against financial adversity and provide for a more secure
retirement.
CNO FINANCIAL: Gets Prelim. OK of Deal in Annuity Marketing Suit
----------------------------------------------------------------
A California court granted preliminary approval of a settlement
reached in a consolidated class action against CNO Financial
Group, Inc.'s annuity marketing and sales practices, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On November 17, 2005, a complaint was filed in the United States
District Court for the Northern District of California, Robert H.
Hansen, an individual, and on behalf of all others similarly
situated v. Conseco Insurance Company, an Illinois corporation
f/k/a Conseco Annuity Assurance Company, Cause No. C0504726.
Plaintiff in this putative class action purchased an annuity in
2000 and is claiming relief on behalf of the proposed national
class for alleged violations of the Racketeer Influenced and
Corrupt Organizations Act; elder abuse; unlawful, deceptive and
unfair business practices; unlawful, deceptive and misleading
advertising; breach of fiduciary duty; aiding and abetting of
breach of fiduciary duty; and unjust enrichment and imposition of
constructive trust. On January 27, 2006, a similar complaint was
filed in the same court entitled Friou P. Jones, on Behalf of
Himself and All Others Similarly Situated v. Conseco Insurance
Company, an Illinois company f/k/a Conseco Annuity Assurance
Company, Cause No. C06-00537. Mr. Jones had purchased an annuity
in 2003. Each case alleged that the annuity sold was
inappropriate and that the annuity products in question are
inherently unsuitable for seniors age 65 and older. On March 3,
2006 a first amended complaint was filed in the Hansen case adding
causes of action for fraudulent concealment and breach of the duty
of good faith and fair dealing. In an order dated April 14, 2006,
the court consolidated the two cases under the original Hansen
cause number and retitled the consolidated action: In re Conseco
Insurance Co. Annuity Marketing & Sales Practices Litig. A
settlement in principle has been reached in this case, and on
April 22, 2011, the court granted preliminary approval of the
settlement.
CNO Financial Group, Inc. -- http://www.CNOinc.com/-- is a
holding company. The company's insurance subsidiaries --
principally Bankers Life and Casualty Company, Colonial Penn Life
Insurance Company and Washington National Insurance Company --
serve working American families and seniors by helping them
protect against financial adversity and provide for a more secure
retirement.
CNO FINANCIAL: Appeals in "Yue" Class Suit Remain Pending
---------------------------------------------------------
Appeals in the class action lawsuits filed by Celedonia X. Yue
against CNO Financial Group, Inc., remain pending, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On March 4, 2008, a complaint was filed in the United States
District Court for the Central District of California, Celedonia
X. Yue, M.D. on behalf of the class of all others similarly
situated, and on behalf of the General Public v. Conseco Life
Insurance Company, successor to Philadelphia Life Insurance
Company and formerly known as Massachusetts General Life Insurance
Company, Cause No. CV08-01506 CAS. Plaintiff in this putative
class action owns a Valulife universal life policy insuring the
life of Ruth S. Yue originally issued by Massachusetts General
Life Insurance Company in 1995. Plaintiff is claiming breach of
contract on behalf of the proposed national class and seeks
injunctive and restitutionary relief pursuant to California
Business & Professions Code Section 17200 and declaratory relief.
The putative class consists of all owners of Valulife and Valuterm
universal life insurance policies issued by either Massachusetts
General or Philadelphia Life and that were later acquired and
serviced by Conseco Life. Plaintiff alleges that members of the
class will be damaged by increases in the cost of insurance (a
non-guaranteed element) that are set to take place in the twenty
first policy year of Valulife and Valuterm policies. No such
increases have yet been applied to the subject policies. During
2010, Conseco Life voluntarily agreed not to implement the cost of
insurance rate increase at issue in this litigation and is
following a process with respect to any future cost of insurance
rate increases as set forth in the regulatory settlement
agreement. Plaintiff filed a motion for certification of a
nationwide class and a California state class. On December 7,
2009, the court granted that motion. On October 8, 2010, the
court dismissed the causes of actions alleged in the California
state class. On January 19, 2011, the court granted the
plaintiff's motion for summary judgment as to the declaratory
relief claim and on February 2, 2011, the court issued an advisory
opinion, in the form of a declaratory judgment, as to what, in its
view, Conseco Life could consider in implementing future cost of
insurance rate increases related to its Valulife and Valuterm
block of policies. On February 17, 2011, Conseco Life filed
notice that it is appealing the court's January 19, 2011 decision.
On March 3, 2011, the plaintiff filed notice that she is appealing
the court's decision to dismiss the California causes of action.
The Company believes the action is without merit, and intends to
defend it vigorously. The ultimate outcome of the action cannot
be predicted with certainty.
CNO Financial Group, Inc. -- http://www.CNOinc.com/-- is a
holding company. The company's insurance subsidiaries --
principally Bankers Life and Casualty Company, Colonial Penn Life
Insurance Company and Washington National Insurance Company --
serve working American families and seniors by helping them
protect against financial adversity and provide for a more secure
retirement.
CNO FINANCIAL: Appeal in "Ruderman" Suit Remains Pending in Fla.
----------------------------------------------------------------
An appeal in the class action lawsuit filed by Sydelle Ruderman
against CNO Financial Group, Inc., remains pending in a Florida
court, according to the Company's May 5, 2011 Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On December 8, 2008, a purported Florida state class action was
filed in the U.S. District Court for the Southern District of
Florida, Sydelle Ruderman individually and on behalf of all other
similarly situated v. Washington National Insurance Company, Case
No. 08-23401-CIV-Cohn/Selzer. The plaintiff alleges that the
inflation escalation rider on her policy of long-term care
insurance operates to increase the policy's lifetime maximum
benefit, and that Washington National breached the contract by
stopping her benefits when they reached the lifetime maximum. The
Company takes the position that the inflation escalator only
affects the per day maximum benefit. Plaintiffs filed their
motion for class certification, and the motion has been fully
briefed by both sides. The court has not yet ruled on the motion
or set it for hearing. Additional parties have asked the court to
allow them to intervene in the action, and on January 5, 2010, the
court granted the motion to intervene and granted the plaintiff's
motion for class certification. The court certified a (B) (3)
Florida state class alleging damages and a (B) (2) Florida state
class alleging injunctive relief. The parties have reached a
settlement in principle of the (B) (3) class. The plaintiffs
filed a motion for summary judgment as to the (B) (2) class which
was granted by the court on September 8, 2010. The Company filed
a notice of appeal on October 6, 2010. The Company believes the
action is without merit, and intends to defend it vigorously. The
ultimate outcome of the action cannot be predicted with certainty.
CNO Financial Group, Inc. -- http://www.CNOinc.com/-- is a
holding company. The company's insurance subsidiaries --
principally Bankers Life and Casualty Company, Colonial Penn Life
Insurance Company and Washington National Insurance Company --
serve working American families and seniors by helping them
protect against financial adversity and provide for a more secure
retirement.
CNO FINANCIAL: Trial in "Lifetrend" Suit Set for May 7, 2012
------------------------------------------------------------
Trial in the consolidated class action lawsuit relating to CNO
Financial Group, Inc.'s "Lifetrend" products is set for May 7,
2012, according to the Company's May 5, 2011 Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
On December 24, 2008, a purported class action was filed in the
U.S. District Court for the Northern District of California,
Cedric Brady, et. al. individually and on behalf of all other
similarly situated v. Conseco, Inc. and Conseco Life Insurance
Company Case No. 3:08-cv-05746. The plaintiffs allege that
Conseco Life and Conseco, Inc. committed breach of contract and
insurance bad faith and violated various consumer protection
statutes in the administration of various interest sensitive whole
life products sold primarily under the name "Lifetrend" by
requiring the payment of additional cash amounts to maintain the
policies in force and by making changes to certain non-guaranteed
elements in their policies. On April 23, 2009, the plaintiffs
filed an amended complaint adding the additional counts of breach
of fiduciary duty, fraud, negligent misrepresentation, conversion
and declaratory relief. On May 29, 2009, Conseco, Inc. and
Conseco Life filed a motion to dismiss the amended complaint. On
July 29, 2009, the court granted in part and denied in part the
motion to dismiss. The court dismissed the allegations that
Conseco Life violated various consumer protection statutes, the
breach of fiduciary duty count, and dismissed Conseco, Inc. for
lack of personal jurisdiction. On October 15, 2009, Conseco Life
filed a motion with the Judicial Panel on Multidistrict Litigation
seeking the establishment of an MDL proceeding consolidating this
case and the McFarland case described below into a single action.
On February 3, 2010, the Judicial Panel on MDL ordered this case
be consolidated for pretrial proceedings. On July 7, 2010,
plaintiffs filed an amended motion for class certification of a
nationwide class and a California state class. The Company filed
its motion in opposition on July 21, 2010. On October 6, 2010,
the court granted the motion for certification of a nationwide
class and denied the motion for certification of a California
state class. Trial is set for May 7, 2012. The Company believes
the action is without merit and intends to defend it vigorously.
The ultimate outcome of the action cannot be predicted with
certainty.
On July 2, 2009, a purported class action was filed in the U.S.
District Court for the Middle District of Florida, Bill W.
McFarland, and all those similarly situated v. Conseco Life
Insurance Company, Case No. 3:09-cv-598-J-32MCR. The plaintiff
alleges that Conseco Life committed breach of contract and has
been unjustly enriched in the administration, including changes to
certain non-guaranteed elements, of various interest sensitive
whole life products sold primarily under the name "Lifetrend."
The plaintiff seeks declaratory and injunctive relief,
compensatory damages, punitive damages and attorney fees. On
February 3, 2010, the Judicial Panel on MDL ordered this case be
consolidated with the Brady case for pretrial proceedings in the
Northern District of California Federal Court. On July 7, 2010,
plaintiffs filed an amended motion for class certification of a
nationwide class and a California state class. The Company filed
its motion in opposition on July 21, 2010. On October 6, 2010,
the court granted the motion for certification of a nationwide
class and denied the motion for certification of a California
state class. Trial is set for May 7, 2012. The Company believes
the action is without merit and intends to defend it vigorously.
The ultimate outcome of the action cannot be predicted with
certainty.
CNO Financial Group, Inc. -- http://www.CNOinc.com/-- is a
holding company. The company's insurance subsidiaries --
principally Bankers Life and Casualty Company, Colonial Penn Life
Insurance Company and Washington National Insurance Company --
serve working American families and seniors by helping them
protect against financial adversity and provide for a more secure
retirement.
CNO FINANCIAL: Continues to Defend "Rowe" Class Suit in Illinois
----------------------------------------------------------------
CNO Financial Group, Inc., continues to defend itself in the class
action complaint filed by Samuel Rowe and Estella Rowe in an
Illinois court, according to the Company's May 5, 2011 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
On January 26, 2009, a purported class action complaint was filed
in the United States District Court for the Northern District of
Illinois, Samuel Rowe and Estella Rowe, individually and on behalf
of themselves and all others similarly situated v. Bankers Life &
Casualty Company and Bankers Life Insurance Company of Illinois,
Case No. 09CV491. The plaintiffs are alleging violation of
California Business and Professions Code Sections 17200 et seq.
and 17500 et seq., breach of common law fiduciary duty, breach of
implied covenant of good faith and fair dealing and violation of
California Welfare and Institutions Code Section 15600 on behalf
of the proposed national class and seek injunctive relief,
compensatory damages, punitive damages and attorney fees. The
plaintiff alleges that the defendants used an improper and
misleading sales and marketing approach to seniors that fails to
disclose all facts, misuses consumers' confidential financial
information, uses misleading sales and marketing materials,
promotes deferred annuities that are fundamentally inferior and
less valuable than readily available alternative investment
products and fails to adequately disclose other principal risks
including maturity dates, surrender penalties and other
restrictions which limit access to annuity proceeds to a date
beyond the applicants actuarial life expectancy. Plaintiffs have
amended their complaint attempting to convert this from a
California only class action to a national class action. In
addition, the amended complaint adds causes of action under the
Racketeer Influenced and Corrupt Organization Act; aiding and
abetting breach of fiduciary duty and for unjust enrichment. On
September 13, 2010, the court dismissed the plaintiff's RICO
claims. On October 25, 2010, the plaintiffs filed a second
amended complaint re-alleging their RICO claims. A hearing date
on the motion for class certification has not been set. The
Company believes the action is without merit, and intends to
defend it vigorously. The ultimate outcome of the action cannot
be predicted with certainty.
CNO Financial Group, Inc. -- http://www.CNOinc.com/-- is a
holding company. The company's insurance subsidiaries --
principally Bankers Life and Casualty Company, Colonial Penn Life
Insurance Company and Washington National Insurance Company --
serve working American families and seniors by helping them
protect against financial adversity and provide for a more secure
retirement.
COMCAST CORP: Antitrust Class Suit Remains Pending in Pennsylvania
------------------------------------------------------------------
A consolidated class action lawsuit filed by customers of Comcast
Corporation remain pending in a Pennsylvania court, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
The Company is defendant in two purported class actions originally
filed in December 2003 in the United States District Courts for
the District of Massachusetts and the Eastern District of
Pennsylvania. The potential class in the Massachusetts case, which
has been transferred to the Eastern District of Pennsylvania, is
the Company's customer base in the "Boston Cluster" area, and the
potential class in the Pennsylvania case is the Company's customer
base in the "Philadelphia and Chicago Clusters," as those terms
are defined in the complaints. In each case, the plaintiffs allege
that certain customer exchange transactions with other cable
providers resulted in unlawful horizontal market restraints in
those areas and seek damages under antitrust statutes, including
treble damages.
Classes of Philadelphia Cluster and Chicago Cluster customers were
certified in May 2007 and October 2007, respectively. In March
2009, as a result of a Third Circuit Court of Appeals decision
clarifying the standards for class certification, the order
certifying the Philadelphia Cluster class was vacated without
prejudice to the plaintiffs filing a new motion. In January 2010,
in its decision on the plaintiffs' new motion, the Eastern
District of Pennsylvania certified a class subject to certain
limitations. In June 2010, the Third Circuit Court of Appeals
granted the Company's petition for an interlocutory appeal from
the class certification decision. Oral agreement on the appeal was
held in January 2011. In March 2010, the Company moved for summary
judgment dismissing all of the plaintiffs' claims in the
Philadelphia Cluster; the summary judgment motion is stayed
pending the class certification appeal. The plaintiffs' claims
concerning the other two clusters are stayed pending determination
of the Philadelphia Cluster claims.
Comcast is a leading provider of video, high-speed Internet and
phone services to residential and business customers in the United
States.
COMCAST CORP: Appeal in California Suit Remains Pending
-------------------------------------------------------
An appeal in a class action lawsuit filed against several
companies, including Comcast Corporation, remains pending in a
California court, according to the Company's May 5, 2011 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
The Company is also among the defendants in a purported class
action filed in the United States District Court for the Central
District of California in September 2007. The potential class is
comprised of all persons residing in the United States who have
subscribed to an expanded basic level of video service provided by
one of the defendants. The plaintiffs allege that the defendants
who produce video programming have entered into agreements with
the defendants who distribute video programming via cable and
satellite (including us), which preclude the distributor
defendants from reselling channels to customers on an "unbundled"
basis in violation of federal antitrust laws. The plaintiffs seek
treble damages and injunctive relief requiring each distributor
defendant to resell certain channels to its customers on an
"unbundled" basis. In October 2009, the Central District of
California issued an order dismissing the plaintiffs' complaint
with prejudice. The plaintiffs have appealed that order to the
Ninth Circuit Court of Appeals. Oral argument on the appeal was
held in March 2011.
Comcast is a leading provider of video, high-speed Internet and
phone services to residential and business customers in the United
States.
COMCAST CORP: Continues to Defend Multi-District Suit in Pa.
------------------------------------------------------------
Comcast Corporation continues to defend itself in the purported
class actions that have been consolidated by the Judicial Panel on
Multidistrict Litigation in the United States District Court for
the Eastern District of Pennsylvania, according to the Company's
May 5, 2011 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
The Company is the defendant in 22 purported class actions filed
in federal district courts throughout the country. All of these
actions have been consolidated by the Judicial Panel on
Multidistrict Litigation in the United States District Court for
the Eastern District of Pennsylvania for pre-trial proceedings. In
a consolidated complaint filed in November 2009 on behalf of all
plaintiffs in the multidistrict litigation, the plaintiffs allege
that the Company improperly "tie" the rental of set-top boxes to
the provision of premium cable services in violation of Section 1
of the Sherman Antitrust Act, various state antitrust laws and
unfair/deceptive trade practices acts in California, Illinois and
Alabama. The plaintiffs also allege a claim for unjust enrichment
and seek relief on behalf of a nationwide class of the Company's
premium cable customers and on behalf of subclasses consisting of
premium cable customers from California, Alabama, Illinois,
Pennsylvania and Washington. In January 2010, the Company moved to
compel arbitration of the plaintiffs' claims for unjust enrichment
and violations of the unfair/deceptive trade practices acts of
Illinois and Alabama. In September 2010, the plaintiffs filed an
amended complaint alleging violations of additional state
antitrust laws and unfair/deceptive trade practices acts on behalf
of new subclasses in Connecticut, Florida, Minnesota, Missouri,
New Jersey, New Mexico and West Virginia. In the amended
complaint, plaintiffs dropped their unjust enrichment claim, as
well as their state law claims on behalf of the Alabama, Illinois
and Pennsylvania subclasses. In November 2010, the court stayed
the case until the United States Supreme Court renders its
decision in AT&T Mobility LLC v. Concepcion.
The West Virginia Attorney General also filed a complaint in West
Virginia state court in July 2009 alleging that the Company
improperly "tie" the rental of set-top boxes to the provision of
premium cable services in violation of the West Virginia Antitrust
Act and the West Virginia Consumer Credit and Protection Act. The
Attorney General also alleges a claim for unjust
enrichment/restitution. The Company removed the case to the United
States District Court for West Virginia, and it was subsequently
transferred to the United States District Court for the Eastern
District of Pennsylvania and consolidated with the multidistrict
litigation. In March 2010, the Eastern District of Pennsylvania
denied the Attorney General's motion to remand the case back to
West Virginia state court. In June 2010, the Attorney General
moved to sever and remand the portion of the claims seeking civil
penalties and injunctive relief back to West Virginia state court.
The Company filed a brief in opposition to the motion in July
2010.
Comcast is a leading provider of video, high-speed Internet and
phone services to residential and business customers in the United
States.
COVENTRY HEALTH: Awaits Ruling on Motion for Reconsideration
------------------------------------------------------------
Coventry Health Care, Inc., is awaiting a ruling on its motion for
reconsideration of an order that denied its motion to dismiss a
putative securities class action lawsuit, according to the
Company's May 5, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
On September 3, 2009, a shareholder, who owned less than 5,000
shares, filed a putative securities class action against the
Company and three of its current and former officers in the
federal district court of Maryland. Subsequent to the filing of
the complaint, three other shareholders and/or investor groups
filed motions with the court for appointment as lead plaintiff and
approval of selection of lead and liaison counsel. By agreement,
the four shareholders submitted a stipulation to the court
regarding appointment of lead plaintiff and approval of selection
of lead and liaison counsel. In December 2009, the court approved
the stipulation and ordered the lead plaintiff to file a
consolidated and amended complaint. To date, no consolidated and
amended complaint has been filed. The purported class period is
February 9, 2007 to October 22, 2008. The complaint alleges that
the Company's public statements contained false, misleading and
incomplete information regarding the Company's profitability,
particularly the profit margins for its Medicare Private-Fee-For-
Service products.
The Company says it will vigorously defend against the allegations
in the lawsuit and filed a motion to dismiss the complaint. By
Order, dated March 31, 2011, the court granted in part and denied
in part the Company's motion to dismiss the complaint. The
Company has filed a motion for reconsideration of that part of the
court's March 31, 2011 Order which denied the Company's motion to
dismiss the complaint. Although it cannot predict the outcome,
the Company believes this lawsuit will not have a material adverse
effect on its financial position or results of operations.
COVENTRY HEALTH: Awaits Rulings in ERISA-Violations Suit
--------------------------------------------------------
Coventry Health Care, Inc., is awaiting a ruling on its motion for
reconsideration of an order denying its motion to dismiss a
consolidated class action lawsuit alleging violations of ERISA,
and an alternative motion to certify that order for interlocutory
appeal, according to the Company's May 5, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On October 13, 2009, two former employees and participants in the
Coventry Health Care Retirement Savings Plan filed a putative
class action lawsuit against the Company and several of its
current and former officers, directors and employees in the U.S.
District Court for the District of Maryland. Plaintiffs allege
that defendants breached their fiduciary duties under the Employee
Retirement Income Security Act of 1974 by offering and maintaining
Company stock in the Plan after it allegedly became imprudent to
do so and by allegedly failing to provide complete and accurate
information about the Company's financial condition to plan
participants in SEC filings and public statements. Three similar
actions by different plaintiffs were later filed in the same court
and were consolidated on December 9, 2009. An amended
consolidated complaint has been filed. The Company intends to
vigorously defend against the allegations in the consolidated
lawsuit and filed a motion to dismiss the complaint. By Order,
dated March 31, 2011, the court denied the Company's motion to
dismiss the amended complaint. The Company has filed a motion for
reconsideration of the court's March 31, 2011 Order and has filed
an Alternative Motion to Certify the Court's March 31, 2011 Order
For Interlocutory Appeal to the Fourth Circuit Court of Appeals.
Although it cannot predict the outcome, the Company believes this
lawsuit will not have a material adverse effect on its financial
position or results of operations.
COVENTRY HEALTH: Court to Consider Settlement Approval on May 27
----------------------------------------------------------------
A hearing to consider final approval of a settlement with
plaintiffs of a class action lawsuit against Coventry Health Care,
Inc.'s subsidiary, First Health Group Corporation, is scheduled
for May 27, 2011, according to the Company's May 5, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2011.
First Health Group Corporation, a subsidiary of the Company, is a
party to various lawsuits filed in the state and federal courts of
Louisiana involving disputes between providers and workers'
compensation payors who access FHGC's contracts with these
providers to reimburse them for services rendered to injured
workers.
Four providers who have contracts with FHGC filed a state court
class action lawsuit against FHGC and certain payors alleging that
FHGC violated Louisiana's Any Willing Provider Act, which requires
a payor accessing a preferred provider network contract to give a
one time notice 30 days before that payor uses the discounted rate
in the preferred provider network contract to pay the provider for
services rendered to a member insured under that payor's health
benefit plan. These provider plaintiffs allege that the Act
applies to medical bills for treatment rendered to injured workers
and that the Act requires point-of-service written notice in the
form of a benefit identification card. If a payor is found to
have violated the Act's notice provision, the court may assess up
to $2,000 in damages for each instance when the provider was not
given proper notice that a discounted rate would be used to pay
for the services rendered. In response to the state court class
action, FHGC and certain payors filed a suit in federal court
against the same four provider plaintiffs in the state court class
action seeking a declaratory judgment that FHGC's contracts are
valid and enforceable, that its contracts are not subject to the
Act since the Act does not apply to medical services rendered to
injured workers and that FHGC is exempt from the notice
requirements of the Act because it has contracted directly with
each provider in its network. The federal district court ruled in
favor of FHGC and declared that its contracts are not subject to
the Act, that FHGC was exempt from the Act's notice provision
because it contracted directly with the providers and that FHGC's
contracts were valid and enforceable, i.e., the four provider
plaintiffs were required to accept the discounted rate in
accordance with the terms of their written contracts with FHGC.
Despite the federal court's decision, the provider plaintiffs
continued to pursue their state court class action against FHGC
and filed a motion for partial summary judgment seeking damages of
$2,000 for each provider visit where the provider was not given a
benefit identification card at the time the service was performed.
In response to the motion for partial summary judgment filed in
the state court action, FHGC obtained an order from the federal
court which enjoined, barred and prevented any of the four
provider plaintiffs or their counsel from pursuing any claim
against FHGC before any court or tribunal arising under the Act.
Despite the issuance of this federal court injunction, the
provider plaintiffs and their counsel pursued their motion for
partial summary judgment in the state court action. Before the
state court held a hearing on the motion for partial summary
judgment, FHGC moved to decertify the class on the basis that the
four named provider plaintiffs had been enjoined by the federal
court from pursuing their claims against FHGC. The state court
denied the motion to decertify the class but did enter an order
permitting FHGC to file an immediate appeal of the state court's
denial of the motion. Even though FHGC had filed its appeal and
there were no class representatives since all four named
plaintiffs had been enjoined from pursuing their claims against
FHGC, the state court held a hearing and granted the plaintiffs'
motion for partial summary judgment. The amount of the partial
summary judgment was $262 million. FHGC appealed both the partial
summary judgment order and the denial of class decertification
order to the state's intermediate appellate court. Both appeals
were denied by the intermediate appellate court. FHGC has filed
an application for a writ of appeal with the Louisiana Supreme
Court with respect to the class decertification order and the
partial summary judgment order. The decision to grant or deny the
application for a writ of appeal is at the discretion of the
Louisiana Supreme Court. The Louisiana Supreme Court has not yet
issued a decision on either of these applications. FHGC also
filed a motion with the federal court to enforce the federal
court's prior judgments and for sanctions against the provider
plaintiffs for violating those judgments which barred and enjoined
them from pursuing their claims against FHGC in the state courts.
That motion also sought to enjoin the state courts from proceeding
in order to protect and effectuate the federal court's judgments.
FHGC's motion was denied by the federal court.
As a result of the Louisiana appellate court's decision on July 1,
2010 to affirm the state trial court's summary judgment order, the
Company recorded a $278 million pre-tax charge to earnings and a
corresponding accrued liability during the quarter ended June 30,
2010. This amount represents the $262 million judgment amount
plus post judgment interest and is included in "accounts payable
and other accrued liabilities" in the accompanying balance sheets.
The Company has accrued for legal fees expected to be incurred
related to this case as well as post judgment interest subsequent
to the second quarter charge, which are included in "accounts
payable and other accrued liabilities" in the accompanying balance
sheets.
On December 6, 2010, FHGC entered into a Memorandum of
Understanding with attorneys representing the four plaintiffs and
the class setting forth the settlement terms of the $262 million
partial summary judgment entered in the class action lawsuit. The
Memorandum of Understanding provides that, subject to the
execution of a settlement agreement acceptable to FHGC and final
non-appealable approval of such settlement by the Louisiana state
court, FHGC will pay $150.5 million to satisfy in full the amount
of the partial summary judgment and to resolve and settle all
claims of the class, including claims for pre and post judgment
interest, attorneys fees and costs. In addition, Coventry will
assign to the class certain rights it has to the proceeds of
FHGC's insurance policies relating to the claims asserted by the
class. Pursuant to the Memorandum of Understanding, the parties
have also agreed to request that the appropriate courts stay all
related proceedings and consideration of any pending appellate
writ applications, and to stay the effect of any outstanding
judgments until the settlement agreement is prepared, executed and
receives final court approval.
In exchange for the settlement payment by FHGC, class members will
release FHGC and all of its affiliates and clients for any claims
relating in any way to re-pricing, payment for, or reimbursement
of a workers' compensation bill, including but not limited to
claims under the Act. Plaintiffs have also agreed to a notice
procedure that FHGC may follow in the future to comply with the
Act. As noted, the Memorandum of Understanding is contingent upon
the execution of a definitive settlement agreement acceptable to
FHGC. Under Louisiana law, once the parties have executed such a
settlement agreement, they must apply to the court for approval of
the settlement following a court-supervised process of notice to
the class and an opportunity for the class to be heard about the
fairness of the settlement or exclude themselves from the
settlement.
On February 2, 2011, FHGC, counsel for the class representatives
and the class representatives executed a definitive settlement
agreement which was acceptable to FHGC. The settlement agreement
contains the same terms and conditions as were set forth in the
Memorandum of Understanding. Accordingly, the Company made a
$150.5 million cash payment into escrow. As noted and as set
forth in the settlement agreement, certain contingencies such as
preliminary court approval; resolutions of objections filed by
class members challenging the fairness of the settlement; class
members excluded from the settlement not exceeding a materiality
threshold; and final court approval, must be satisfied before the
settlement becomes final. The hearing date for final approval of
the settlement is scheduled for May 27, 2011. Given these various
contingencies, which must be satisfied before the settlement
becomes final, no changes have been made to the previously
recorded amounts.
In a related matter, FHGC has filed another lawsuit in Louisiana
federal district court against 85 Louisiana providers seeking a
declaratory judgment that its contracts are valid and enforceable,
its contracts are not subject to the Louisiana's Any Willing
Provider Act because its contracts pertain to payment for services
rendered to injured workers, and FHGC is exempt from the notice
provision of the Any Willing Provider Act because it has
contracted directly with the providers. As a result of the
Memorandum of Understanding and the settlement agreement executed
in connection with the provider class action lawsuit in Louisiana,
this lawsuit has been stayed and will be dismissed if the
settlement agreement of the class action lawsuit becomes final.
DIAL CORP: Sued Over False Claims on Antibacterial Hand Wash
------------------------------------------------------------
Sarah Fenske, writing for Daily RFT, reports that Michelle Carter
of St. Louis alleges that a misleading ad campaign convinced her
to give Dial's Complete Foaming Antibacterial Hand Wash a try.
Ms. Carter filed the lawsuit in federal court on May 13, alleging
that the Dial Corporation made "false and misleading" claims while
selling her its foaming antibacterial hand wash.
The suit, which hopes to attain class-action status, says that the
active ingredient in Dial Complete hand soap, triclosan, has never
been shown in a "reliable" study to provide any benefit greater
than one achieved by washing with regular soap and water. The
suit argues that triclosan belongs in a class of chemicals
"suspect of causing cancer in humans." It's been restricted in
the European Union, the suit says.
But Dial didn't disclose any of that in the ad campaign, argues
Eric D. Holland, Esq., of Holland, Groves Schneller & Stolze.
Mr. Holland filed the suit on behalf of Ms. Carter, who lives in
the Lou.
The suit alleges that a nationwide marketing campaign claimed that
Dial Complete "kills 99.99 percent of germs" and was "the No. 1
doctor-recommended" brand.
Yet any claims about triclosan's efficacy, the suit alleges, are
based on a single in-house study, Mr. Holland said.
"Contrary to Dial's self-serving research, in connection with a
review of 27 studies conducted over the past 30 years, scientists
from the University of Michigan, Columbia University and Tufts
University, determined (and published in the academic journal
Clinical Infectious Diseases), that soaps containing added
ingredients such as triclosan in liquid soap and triclocarban in
bar soap do not show a benefit above and beyond plain soap in the
consumer environment.
The independent scientists concluded that: "The lack of an
additional health benefit associated with the use of triclosan-
containing consumer soaps over regular soap, coupled with
laboratory data demonstrating a potential risk of selecting for
drug resistance, warrants further evaluation . . .."
Dial, which is based in Scottsdale, Arizona, is owned by Henkel
North America, a German-owned corporation. Germany, a leader in
the European Union, recently began prohibiting the use of
triclosan in products intended to "come into contact with food."
DORCHESTER MINERALS: Hearing in Texas Suit Set for June
-------------------------------------------------------
A hearing on a revised motion for summary judgment in the class
action lawsuit filed against Dorchester Minerals, L.P.'s operating
partnership in a Texas court is set for June 2011, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
In January 2002, some individuals and an association called Rural
Residents for Natural Gas Rights sued Dorchester Hugoton, Ltd.,
along with several other operators in Texas County, Oklahoma
regarding the use of natural gas from the wells in residences.
Dorchester Minerals Operating LP, the operating partnership, now
owns and operates the properties formerly owned by Dorchester
Hugoton. These properties contribute a major portion of the NPI
amounts paid to the Company. On April 9, 2007, plaintiffs, for
immaterial costs, dismissed with prejudice all claims against the
operating partnership regarding such residential gas use. On
October 4, 2004, the plaintiffs filed severed claims against the
operating partnership regarding royalty underpayments, which the
Texas County District Court subsequently dismissed with a grant of
time to replead. On January 27, 2006, one of the original
plaintiffs again sued the operating partnership for underpayment
of royalty, seeking class action certification. On October 1,
2007, the Texas County District Court granted the operating
partnership's motion for summary judgment finding no royalty
underpayments. Subsequently, the District Court denied the
plaintiff's motion for reconsideration, and the plaintiff filed an
appeal. On March 31, 2010, the appeal decision reversed and
remanded to the Texas County District Court to resolve material
issues of fact. A hearing on a revised motion for summary
judgment is set for June 2011. An adverse decision could reduce
amounts the Company receives from the NPIs.
Dorchester Minerals, L.P. -- http://www.dmlp.net/-- is the
owner of producing and non-producing natural gas and crude oil
royalty, net profits, and leasehold interests in 573 counties
and 25 states.
DUKE ENERGY: Settles Retirement Plan Class Action for $30 Mil.
--------------------------------------------------------------
Bruce Henderson, writing for The Charlotte Observer, reports that
Duke Energy will pay $30 million to settle a class action over
changes to its retirement plan.
The lawsuit representing 20,000 Duke retirees and employees was
filed in 2006. A federal judge in Anderson, S.C., approved the
settlement on May 16.
The plaintiffs claimed Duke broke federal age-discrimination laws
when it converted its defined-benefit pension plan to a cash
balance plan in 1997.
Instead of receiving retirement benefits based on years of
service, the lawsuit said, the new plan would combine the
characteristics of a traditional pension plan with that of a
401(k) plan, to which employees contribute a portion of their
salaries.
Workers have lost up to half of their accrued benefits under such
changes, the suit charged, saying it disproportionately harms
people older than 40. The change allowed Duke to cut its annual
contributions to the pension plan from $54 million a year in 1995
and 1996 to zero from 1997 through 2002, it said.
Duke denied those claims. The company said it never misled
workers about the change and didn't reduce accrued benefits for
participants. Duke said cash-balance plans "provide for a more
even accrual of benefits over an employee's working career" than
traditional plans.
U.S. District Judge Michelle Childs accepted a settlement in which
Duke does not admit wrongdoing. Judge Childs awarded the
plaintiffs' attorneys $9 million in fees to come out of the $30
million settlement.
ECOLAB INC: Wage & Hour Lawsuits Still in Initial Phases
--------------------------------------------------------
Ecolab Inc. disclosed that three wage and hour lawsuits filed
against it remain in their initial phases, according to the
Company's May 5, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
The Company is a defendant in three wage hour lawsuits claiming
violations of the Fair Labor Standards Act or a similar state law.
Two of the suits seek certification of a state class of certain
Institutional division associates. One of the suits seeks
certification of a national class of certain independent
contractors in the Company's U.S. Other Services segment, as well
as the granting of certain employment benefits. None of the suits
have been certified for class-action status. The suits are still
in their initial phases.
EURONET WORLDWIDE: Unit Continues to Defend Wage Violation Suit
---------------------------------------------------------------
Euronet Worldwide, Inc.'s indirect, wholly-owned subsidiary,
Continental Exchange Solutions Inc., doing business as Ria
Financial Services, continues to defend a class action lawsuit
alleging wage violations, according to the Company's May 5, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2011.
During 2010, CES was served with a class action lawsuit filed by a
former employee for alleged wage and hour violations related to
overtime and meal and rest period requirements under California
law. California law regarding an employer's obligations to
provide lunch and rest periods is under review by the California
Supreme Court.
The Company says the proceeding is in the preliminary stages and
it intends to vigorously defend the lawsuit. At the current stage
of the proceedings, the Company considers that it is not possible
to determine a range of loss, if any, that may arise from this
lawsuit.
FORTINET INC: Stockholder Suit Remains Pending in California
------------------------------------------------------------
A class action lawsuit filed by a former stockholder of Fortinet,
Inc., remains pending in California, according to the Company's
May 5, 2011 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
In April 2010, an individual, a former stockholder of Fortinet,
filed a class action lawsuit against the Company in the Superior
Court of the State of California for the County of Los Angeles
alleging violation of various California Corporations' Code
sections and related tort claims alleging misrepresentation and
breach of fiduciary duty regarding the 2009 repurchase by Fortinet
of shares of its stock while the Company was a privately-held
company. In September 2010, the Court granted the Company's motion
to transfer the case to the California Superior Court for Santa
Clara County and the plaintiff has filed an amended complaint in
the Superior Court to add individual defendants, among other
amendments. The Company cannot currently predict the outcome of
this dispute nor determine the amount or a reasonable range of
potential loss, if any.
Fortinet Inc. -- http://www.fortinet.com/-- is a worldwide
provider of network security appliances and a market leader in
unified threat management. The company's products and
subscription services provide broad, integrated and high-
performance protection against dynamic security threats while
simplifying the IT security infrastructure. The company's
customers include enterprises, service providers and government
entities worldwide, including the majority of the 2009 Fortune
Global 100. Fortinet's flagship FortiGate(R) product delivers
ASIC-accelerated performance and integrates multiple layers of
security designed to help protect against application and network
threats. Fortinet's broad product line goes beyond UTM to help
secure the extended enterprise -- from endpoints, to the perimeter
and the core, including databases and applications. Fortinet is
headquartered in Sunnyvale, Calif., with offices around the world.
IKANOS COMMUNICATIONS: To File Brief in IPO Suit Appeal on June 17
------------------------------------------------------------------
Ikanos Communications, Inc.'s opposition brief in the appeal in
the consolidated class action lawsuit related to the Company's
initial and secondary public offerings will be filed on June 17,
2011, according to the Company's May 5, 2011 Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
April 3, 2011.
In November 2006, three putative class action lawsuits were filed
in the United States District Court for the Southern District of
New York against the Company, its directors and two former
executive officers, as well as the lead underwriters for its
initial and secondary public offerings. The lawsuits were
consolidated and an amended complaint was filed on April 24, 2007.
The amended complaint sought unspecified damages for certain
alleged misrepresentations and omissions made by the Company in
connection with both its initial public offering in September 2005
and its follow-on offering in March 2006. On June 25, 2007, the
Company filed motions to dismiss the amended complaint, and on
March 10, 2008, the Court dismissed the case with prejudice. On
March 25, 2008, plaintiffs filed a motion for reconsideration, and
on June 12, 2008, the District Court denied the motion for
reconsideration. On October 15, 2008, plaintiffs appealed the
District Court's dismissal of the amended complaint and denial of
its motion for reconsideration to the United States Court of
Appeals for the Second Circuit. On September 17, 2009, the Court
of Appeals affirmed the District Court's dismissal of the amended
complaint, but vacated its judgment on the motion for
reconsideration and remanded the case to the District Court for
further proceedings. On May 13, 2010, the District Court granted
plaintiffs leave to file a motion to amend the pleadings.
Plaintiffs filed a motion for leave to amend the complaint on
June 11, 2010. The Company opposed on July 11, 2010, and on
November 23, 2010, the District Court denied the motion. On
January 6, 2011, plaintiffs filed a notice of appeal with the
United States Court of Appeals for the Second Circuit and, on
March 18, 2011, filed Appellant's Opening Brief. The Company will
file its opposition brief by June 17, 2011. The Company cannot
predict the likely outcome of its opposition brief, and an adverse
result in the litigation could have a material effect on its
financial statements.
Ikanos Communications Inc. -- http://www.ikanos.com/-- engages
in the development and provision of programmable semiconductors
that enable fiber-fast broadband services over telephone
companies' existing copper lines. The company offers very-high-
bit-rate digital subscriber lines that are designed to address
different segments of the broadband semiconductor market for
carrier networks and subscriber premises equipment.
IMPAX LABORATORIES: Discovery in Budeprion Suit Closes on May 27
----------------------------------------------------------------
Expert discovery with respect to the multidistrict litigation
against Impax Laboratories, Inc., brought by purchasers of
Budeprion XL will close on May 27, 2011, according to the
Company's May 5, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
In June 2009, the Company was named a co-defendant in class action
lawsuits filed in California state court in an action titled Kelly
v. Teva Pharmaceuticals Indus. Ltd, et al., No. BC414812 (Calif.
Superior Crt. L.A. County). Subsequently, additional class action
lawsuits were filed in Louisiana (Morgan v. Teva Pharmaceuticals
Indus. Ltd, et al., No. 673880 (24th Dist Crt., Jefferson Parish,
LA.)), North Carolina (Weber v. Teva Pharmaceuticals Indus., Ltd.,
et al., No. 07 CV5002556, (N.C. Superior Crt., Hanover County)),
Pennsylvania (Rosenfeld v. Teva Pharmaceuticals USA, Inc. et al.,
No. 2:09-CV-2811 (E.D. Pa.)), Florida (Henchenski and Vogel v.
Teva Pharmaceuticals Industries Ltd., et al., No. 2:09-CV-470-FLM-
29SPC (M.D. Fla.)), Texas (Anderson v. Teva Pharmaceuticals
Indus., Ltd., et al., No. 3-09CV1200-M (N.D. Tex.)), Oklahoma
(Brown et al. v. Teva Pharmaceuticals Inds., Ltd., et al., No. 09-
cv-649-TCK-PJC (N.D. OK)), Ohio (Latvala et al. v. Teva
Pharmaceuticals Inds., Ltd., et al., No. 2:09-cv-795 (S.D. OH)),
Alabama (Jordan v. Teva Pharmaceuticals Indus. Ltd et al., No.
CV09-709 (Ala. Cir. Crt. Baldwin County)), and Washington (Leighty
v. Teva Pharmaceuticals Indus. Ltd et al., No. CV09-01640 (W. D.
Wa.)). All of the complaints involve Budeprion XL, a generic
version of Wellbutrin XL(R) that is manufactured by the Company
and marketed by Teva, and allege that, contrary to representations
of Teva, Budeprion XL is less effective in treating depression,
and more likely to cause dangerous side effects, than Wellbutrin
XL. The actions are brought on behalf of purchasers of Budeprion
XL and assert claims such as unfair competition, unfair trade
practices and negligent misrepresentation under state law. Each
lawsuit seeks damages in an unspecified amount consisting of the
cost of Budeprion XL paid by class members, as well as any
applicable penalties imposed by state law, and disclaims damages
for personal injury. The state court cases have been removed to
federal court, and a petition for multidistrict litigation to
consolidate the cases in federal court has been granted. These
cases and any subsequently filed cases will be heard under the
consolidated action entitled In re: Budeprion XL Marketing Sales
Practices, and Products Liability Litigation, MDL No. 2107, in the
United States District Court for the Eastern District of
Pennsylvania. T he Company filed a motion to dismiss and a motion
to certify that order for interlocutory appeal, both of which were
denied. Plaintiffs have filed a motion for class certification
and the Company has filed an opposition to that motion. The class
certification hearing is set for May 17, 2011, and expert
discovery closes on May 27, 2011. No trial date has been
scheduled.
INT'L COAL: Shareholder Damian Walker Files Class Action
--------------------------------------------------------
Andrea Lannom, writing for WTRF, reports that a class action
lawsuit seeking equitable relief against International Coal Group,
Inc. and Arch Coal Inc. alleges that Arch's proposed acquisition
of ICG will undervalue shareholders.
ICG and Arch Coal announced in a joint press release dated May 2
that Arch will acquire ICG for $3.4 billion.
The lawsuit was filed on May 9 in Putnam County Circuit Court by
class action representative and ICG shareholder Damian Walker.
Defendants are listed as International Coal Group Inc.; Bennett K.
Hatfield; Wilbur L. Ross Jr.; Maurice E. Carino Jr.; Cynthia B.
Bezik; William J. Catacosinos; Stanley Gaines; Samuel A. Mitchell;
Wendy L. Teramoto; and Arch Coal.
The complaint states that the offer price of $14.60 per share
"materially undervalues the company and is unfair to its
shareholders." There are approximately 200 million shares of
common stock outstanding, the complaint states.
Plaintiffs state the offered price merely represents a premium of
"just 32% over ICG's closing share price of 11.03."
According to the complaint, plaintiffs allege that defendants
tilted the sales process in favor of Arch and that the merger
agreement's no solicitation of transaction clause "discourages the
company from considering alternative proposals from other bidders
and contains a $115 million termination fee," which they say
discourages individual defendants from rejecting the acquisition.
The suit cites an article by an investment analyst from "The
Motley Fool," which states that ICG's profits along with its share
price have been increasing. This article states the share price
has increased "109.1% versus an S&P 500 return of 13.7%" over the
past year.
ICG also announced recently that it had experienced substantial
profits for this year's first quarter. According to a Bloomberg
article, a suit was also filed against ICG in Delaware Chancery
Court in Wilmington by another ICG shareholder, Teri Kirby.
Mr. Kirby also sued certain executives such as ICG chairman and
investor Wilbur Ross, the article states.
JORDAN DANIELS: Sued for Diverting JDECI Trust Funds
----------------------------------------------------
WESCO Distribution, Inc., individually and on behalf of others
similarly situated v. Jordan Daniels Electrical Contractors, Inc.,
et al., Case No. 651303/2011 (N.Y. Sup. Ct., New York Cty.),
brought an action pursuant to Article 3A of the lien law, to
impose a trust upon, and obtain the recovery of, all monies held
by JDECI and/or diverted by the defendants which are rightly due
and owing to WESCO and others who supplied labor and materials to
JDECI for the construction project located at 452 Fifth Avenue,
New York, N.Y. (the "HSBC Project").
Pursuant to Article 3-A of the Lien Law, any sums received by,
paid or owed to JDECI in connection with the improvement and
construction of the HSBC Project constitute trust funds to be
applied to the payment of claims of subcontractors, laborers, and
materialmen, such as WESCO, accrued during and in connection with
the construction of the HSBC Project.
Between approximately October 2010 through and including
February 2011, WESCO sold and delivered electrical supplies and
materials for use by JDEIC in connection with its work at the HSBC
Project.
WESCO says it is owed the principal sum of approximately $151,000
for the electrical materials it sold and delivered to JDECI.
WESCO Distribution, Inc., is a corporation organized and
existing under the laws of the State of Delaware, maintaining a
place of business located at 60 Hoffman Avenue, in Hauppauge, New
York. WESCO is in the business of, among other things, the sale
of electrical equipment and related supplies and materials.
Defendant Jordan Daniels Electrical Contractors is, and at all
material times hereinafter mentioned was, a corporation organized
and existing under the laws of the State of New York, maintaining
a principal place of business at 151 West 25th Street, 7th Floor,
New York City, and is engaged in business, among other things, as
a electrical contractor.
The Plaintiff is represented by:
Jill Levi, Esq.
TODD & LEVI, LLP
444 Madison Avenue, Suite 1202
New York, NY 1022
Telephone: (212) 308-7400
JUNIPER NETWORKS: Motions to Dismiss IPO Suit Appeals Pending
-------------------------------------------------------------
Motions to dismiss appeals from the settlement of class action
lawsuits involving the initial public offering of Juniper
Networks, Inc., are pending, according to the Company's May 6,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarterly period ended March 31, 2011.
In December 2001, a class action complaint was filed in the United
States District Court for the Southern District of New York
against the Goldman Sachs Group, Inc., Credit Suisse First Boston
Corporation, FleetBoston Robertson Stephens, Inc., Royal Bank of
Canada (Dain Rauscher Wessels), SG Cowen Securities Corporation,
UBS Warburg LLC (Warburg Dillon Read LLC), Chase (Hambrecht &
Quist LLC), J.P. Morgan Chase & Co., Lehman Brothers, Inc.,
Salomon Smith Barney, Inc., Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, Juniper Networks and certain of Juniper Networks'
officers. This action was brought on behalf of purchasers of the
Company's common stock in its initial public offering in June 1999
and the Company's secondary offering in September 1999.
Specifically, among other things, this complaint alleged that the
prospectus pursuant to which shares of common stock were sold in
the Company's initial public offering and the Company's subsequent
secondary offering contained certain false and misleading
statements or omissions regarding the practices of the
Underwriters with respect to their allocation of shares of common
stock in these offerings and their receipt of commissions from
customers related to such allocations. Various plaintiffs have
filed actions asserting similar allegations concerning the initial
public offerings of approximately 300 other issuers. These
various cases pending in the Southern District of New York have
been coordinated for pretrial proceedings as In re Initial Public
Offering Securities Litigation, 21 MC 92. In April 2002, the
plaintiffs filed a consolidated amended complaint in the action
against the Company, alleging violations of the Securities Act of
1933 and the Securities Exchange Act of 1934. The defendants in
the coordinated proceeding filed motions to dismiss. On February
19, 2003, the Court granted in part and denied in part the motion
to dismiss, but declined to dismiss the claims against the
Company.
The parties have reached a global settlement of the litigation. On
October 5, 2009, the Court entered an Opinion and Order granting
final approval of the settlement. Under the settlement, the
insurers are to pay the full amount of settlement share allocated
to the Company, and the Company will bear no financial liability.
The Company and other defendants will receive complete dismissals
from the case. Certain objectors have appealed the Court's
October 5, 2009, final order to the Second Circuit Court of
Appeals. Plaintiffs have filed motions to dismiss the appeals.
KKR & CO: Second Phase of Discovery in Mass. Suit Still Ongoing
---------------------------------------------------------------
The second phase of a court-permitted discovery in a class lawsuit
involving KKR & Co. L.P. is still ongoing in Massachusetts,
according to the Company's May 5, 2011 Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
In December 2007, the Company, along with 15 other private equity
firms and investment banks, were named as defendants in a
purported class action complaint filed in the United States
District Court for the District of Massachusetts by shareholders
in certain public companies acquired by private equity firms since
2003. In August 2008, the Company, along with 16 other private
equity firms and investment banks, were named as defendants in a
purported consolidated amended class action complaint. The suit
alleges that from mid-2003 defendants have violated antitrust laws
by allegedly conspiring to rig bids, restrict the supply of
private equity financing, fix the prices for target companies at
artificially low levels, and divide up an alleged market for
private equity services for leveraged buyouts. The amended
complaint seeks injunctive relief on behalf of all persons who
sold securities to any of the defendants in leveraged buyout
transactions and specifically challenges nine transactions. The
first stage of discovery concluded on or about April 15, 2010. On
August 18, 2010, the court granted plaintiffs' motion to proceed
to a second stage of discovery in part and denied it in part.
Specifically, the court granted a second stage of discovery as to
eight additional transactions but denied a second stage of
discovery as to any transactions beyond the additional eight
specified transactions. On October 7, 2010, the plaintiffs filed
under seal a fourth amended complaint that includes new factual
allegations concerning the additional eight transactions and the
original nine transactions. The fourth amended complaint also
includes eight purported sub-classes of plaintiffs seeking
unspecified monetary damages and/or restitution with respect to
eight of the original nine challenged transactions and new
separate claims against two of the original nine challenged
transactions. On January 13, 2011, the court granted a motion
filed by the Company and certain other defendants to dismiss all
claims alleged by a putative damages sub-class in connection with
the acquisition of PanAmSat Corp. and separate claims for relief
related to the PanAmSat transaction. The second phase of discovery
permitted by the court is ongoing.
KKR & CO: Continues to Defend Del Monte Transaction-Related Suits
-----------------------------------------------------------------
KKR & Co. L.P. continues to defend itself in several purported
shareholder class actions arising out of the acquisition of Del
Monte Foods Company by an entity backed by KKR, according to the
Company's May 5, 2011 Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
KKR, along with two other private equity firms, is a defendant in
purported shareholder class actions arising out of the proposed
acquisition of Del Monte Foods Company by Blue Acquisition Group,
Inc. and Blue Merger Sub Inc., entities controlled by private
equity funds affiliated with the Sponsors. The complaints
generally allege, among other things, that the Del Monte directors
breached their fiduciary duties to Del Monte stockholders by
agreeing to sell Del Monte at an unfair price and through an
unfair process and by filing an allegedly materially misleading
and incomplete proxy statement. The complaints also generally
allege that the Sponsors, the Acquisition Entities and Del Monte
aided and abetted the directors' breaches of fiduciary duties. The
complaints all seek injunctive relief, rescission of the merger
agreement, damages and attorneys' fees. The various complaints
filed in the Delaware Chancery Court were consolidated on
December 31, 2010, under the caption In re Del Monte Foods Company
Shareholders Litigation, No. 6027-VCL. On February 14, 2011, the
Delaware Chancery Court issued a ruling which, among other things,
found on the preliminary record before the court that the
plaintiff had demonstrated a reasonable likelihood of success on
the merits of its aiding and abetting claim against the Sponsors,
including KKR. The ruling enjoined defendants from proceeding
with the Del Monte stockholder vote, previously scheduled for
February 15, 2011, for twenty days and preliminarily enjoined
certain deal protection provisions of the merger agreement pending
the stockholder vote. On February 18, 2011, an amended complaint
was filed in the Delaware action. The amended complaint asserts
claims for: (i) breach of fiduciary duty against the Del Monte
directors, (ii) aiding and abetting the directors' breaches of
fiduciary duty against the Sponsors, the Acquisition Entities, and
Barclays Capital, Inc., which served as a financial advisor to Del
Monte in connection with the proposed acquisition, (iii) breach of
contract against the Sponsors arising from a confidentiality
agreement between the Sponsors and Del Monte, and (iv) tortuous
interference with contract against Barclays arising from the
aforementioned confidentiality agreement between the Sponsors and
Del Monte. Similar shareholder actions are pending against the Del
Monte directors, Sponsors and/or the Acquisition Entities in
California Superior Court and the United States District Court for
the Northern District of California. On March 4, 2011, KKR
received a request from the SEC for information regarding issues
relating to the Del Monte transaction. KKR is cooperating with the
SEC's inquiry. On March 7, 2011, a purported class action
complaint captioned Pipe Fitters Local Union No. 120 Pension Fund
v. Barclays Capital Inc. et al. (Case No. 3:10-cv-01064-EDL) was
filed in the United States District Court for the Northern
District of California. The complaint names as defendants the
Sponsors, Barclays, a managing director at Barclays, and Goldman
Sachs Group, Inc. and alleges that the defendants violated federal
and California state antitrust laws by, among other things,
allegedly conspiring to suppress the transaction price. The
complaint seeks, among other things, injunctive relief, damages
and attorneys' fees. The transaction closed on March 8, 2011.
KKR & CO: Judgment in "Charter Township " Suit Declared Final
-------------------------------------------------------------
KKR & Co. L.P. reported that the judgment in a putative class
action complaint filed by Charter Township of Clinton Police and
Fire Retirement System against it and its subsidiary is now final,
according to the Company's May 5, 2011, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
In August 2008, KKR Financial Holdings LLC, the members of its
board of directors and certain of its former executive officers,
including certain of the Company's current and former personnel,
were named in a putative class action complaint filed by the
Charter Township of Clinton Police and Fire Retirement System in
the United States District Court for the Southern District of New
York. In March 2009, the lead plaintiff filed an amended
complaint, which deleted as defendants the members of KFN's board
of directors and named as individual defendants only KFN's former
chief executive officer, KFN's former chief operating officer, and
KFN's former chief financial officer. The amended complaint
alleges that KFN's April 2007 registration statement and
prospectus and the financial statements incorporated therein
contained material omissions in violation of Section 11 of the
Securities Act of 1933, as amended, regarding the risks and
potential losses associated with KFN's real estate-related assets,
KFN's ability to finance its real estate-related assets, and the
adequacy of KFN's loss reserves for its real estate-related
assets. The amended complaint further alleges that, pursuant to
Section 15 of the Securities Act, the KFN Individual Defendants
have legal responsibility for the alleged Section 11 violation.
The amended complaint seeks judgment in favor of the lead
plaintiff and the putative class for unspecified damages allegedly
sustained as a result of the KFN Defendants' alleged misconduct,
costs and expenses incurred by the lead plaintiff in the action,
rescission or a rescissory measure of damages, and equitable or
injunctive relief. In April 2009, the KFN Defendants filed a
motion to dismiss the amended complaint for failure to state a
claim under the Securities Act. In November 2010, the court
granted the defendants' motion and dismissed the case with
prejudice. Plaintiffs' time to take an appeal has run, and the
judgment is now final.
LAN AIRLINES: Continues to Defend Price-Fixing Class Suits
----------------------------------------------------------
Lan Airlines S.A.'s subsidiary, Lan Cargo S.A., remains a
defendant in lawsuits against international cargo airlines
alleging price fixing of cargo fuel surcharges and other fees,
according to the Company's May 5, 2011, Form 20-F filing with the
U.S. Securities and Exchange Commission for the year ended
December 31, 2010.
In February 2006, the European Commission, in conjunction with the
Department of Justice of the United States, initiated a global
investigation of a large number of international cargo airlines,
among them Lan Cargo S.A., LAN's cargo subsidiary, for possible
price fixing of cargo fuel surcharges and other fees in the
European and United States air cargo markets. On December 26,
2007, the European competition authorities notified Lan Cargo and
LAN of the initiation of proceedings against twenty-five cargo
airlines, among them Lan Cargo, for allegations of anti-
competitive behavior in the airfreight business.
The investigation by the DOJ prompted the filing of numerous civil
class actions by freight forwarding and shipping companies against
many airlines, including Lan Cargo and Lan Airlines, including
fifty-four in the United States. The cases filed in the United
States were consolidated in the United States District Court,
Eastern District of New York and the original complaint was
subsequently amended to include additional airlines, including
Aerolinhas Brasileiras S.A.
In February 2006, the Canadian Competition Bureau, in conjunction
with the DOJ, initiated a global investigation of a large number
of international cargo airlines (among them Lan Cargo) for
possible price fixing of cargo fuel surcharges and other fees in
the Canadian air cargo markets. The CCB's investigation prompted
the filing of four separate civil class actions by freight
forwarding and shipping companies against many airlines, including
Lan Cargo and Lan Airlines in Canada.
Given the current stage of the both proceedings, the Company says
it is not possible at this time to anticipate with any precision
the outcome of the civil actions.
LENDER PROCESSING: Continues to Defend Default Services Suits
-------------------------------------------------------------
Lender Processing Services, Inc., continues to defend itself in
eight putative class actions alleging unauthorized practice of law
and unlawful fee splitting with attorneys, according to the
Company's May 5, 2011 Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
The Company has been named in eight putative class actions filed
in Alabama, Florida and Mississippi that generally allege that the
defendants engaged in the unauthorized practice of law and
unlawful fee splitting with attorneys representing creditors in
bankruptcy proceedings. Each of these individual complaints was
filed by the same plaintiff's attorney. In seven of these cases,
the Company did not provide the default administrative services
alleged in the complaint. Each of these cases is in the
preliminary stages and none of these cases has been certified as a
class action. Lawsuits containing similar allegations previously
filed against the Company were dismissed with prejudice.
LENDER PROCESSING: "St. Clair" Suit Still Pending in Florida
------------------------------------------------------------
A putative class action entitled St. Clair Shores General
Employees' Retirement System v. Lender Processing Services, Inc.,
et al., remains pending in Florida, according to the Company's
May 5, 2011 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
On December 1, 2010, the Company was served with a complaint
entitled St. Clair Shores General Employees' Retirement System v.
Lender Processing Services, Inc., et al., which was filed in the
United States District Court for the Middle District of Florida.
The putative class action seeks damages for alleged violations of
federal securities laws in connection with the Company's
disclosures relating to its default operations. On December 29,
2010, the court entered an order granting a temporary suspension
of filing deadlines pending a determination of the lead plaintiff
and lead counsel. A scheduling order was entered by the court on
April 4, 2011.
MASSEY ENERGY: Sued in Va. Over Failure to Pay for Overtime Work
----------------------------------------------------------------
Chris Stratton, writing for For The State Journal, reports that
six former and current Massey Energy employees from four West
Virginia counties claim the coal company failed to follow the
federal Fair Labor Standards Act multiple times costing the men
thousands of dollars, according to a recently filed lawsuit in the
U.S. District Court for the Southern District of West Virginia.
The miners claim that Massey routinely failed to pay them for
overtime they worked. They claim that these actions did not only
affect the six miners, but affected all Massey employees, and the
plaintiffs are seeking to be appointed class representatives in a
federal class action.
Robert D. Harper Jr., of Putnam County; Ted Morrison, of Nicholas
County; James Treadway of Fayette County and Michael James, John
O'Neil and Clifton Scott, all of Kanawha County, are the original
plaintiffs in the putative class action. Massey Energy is the
only named defendant.
The complaint alleges Massey management was aware of the
plaintiffs' job duties, but despite that the men say the company
failed to pay them minimum wage of $7.25 and that the company knew
they were required to pay minimum wage. The plaintiffs allege
Massey, "willfully and/or negligently refused to correct the
illegal payments made to those employees."
The plaintiffs also allege they routinely worked more than 40
hours per week, but were never paid overtime.
Mr. Harper worked for Massey from May 1, 2008, until Nov. 1, 2009.
James was employed from Nov. 1, 2004, until Dec. 1, 2009.
Mr. Morrison was with Massey from March 31, 2008, until he was
terminated on Nov. 17, 2009. Mr. O'Neal's tenure at Massey
stretched from Aug. 1, 2006, to March 19, 2009. Mr. Scott began
work on June 1, 2005, until his termination on July 1, 2009. Only
Mr. Treadway remains employed by Mr. Massey. He began working for
the company on April 20, 2007.
The allegations in the complaint also involve, to some degree, the
federal Mine Act.
"Without limitation the defendant [Massey] would have the
employees report to work to attend meetings without payment . . .
do pre-shift inspections off the clock and without payment and do
post-trip inspections off the clock and without payment," the
complaint alleges.
The miners also complained Massey would force them to report to
work, get ready to go underground, drive underground on whatever
equipment they were using and arrive at the work section of the
mine before they would be considered "on the clock" and begin
accruing payment.
The men are suing on grounds of multiple violations of the Federal
Violation of the Fair Labor Standards Act, violations of the West
Virginia Wage Payment and Collection Act for themselves and on
behalf of others.
Their lawsuit requests an award of all lost wages plus interest,
liquidated damages, attorneys' fees and costs.
"This appears to be related to a case that was previously filed
and dismissed," said Massey general counsel Shane Harvey. "We'll
review it and answer in court at the appropriate time."
J. Michael Ranson, Esq., of the Ranson Law Offices in Charleston
is representing the miners.
The case is Robert Harper Jr., et al v. Massey Energy Co. in the
U.S. District Court for the Southern District of West Virginia. It
is case number 2:11-cv-0305.
MEIJER INC: Recalls 7,600 Katie Brown Tea Light Candle Sets
-----------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
Meijer Inc., of Grand Rapids, Michigan, announced a voluntary
recall of about 7,600 Katie Brown 12-piece tea light candle sets.
Consumers should stop using recalled products immediately unless
otherwise instructed. It is illegal to resell or attempt to
resell a recalled consumer product.
The clear plastic candle holder can ignite, posing a serious burn
and fire hazard to consumers.
Meijer has received one report of the resin cup catching fire and
melting. No injuries or property damage have been reported.
The recalled wax tea light candles in clear plastic holders were
sold in five different colors/scents: vanilla, spruce, snappy
spice, sunny tuscany and sweet love. Model numbers are 50181MKB,
50182MKB, 50183MKB, 50184MKB and 50185MKB printed on the bottom of
the tea light holder. The wax tea light candles measure
approximately 2 inches in diameter. The Katie Brown logo is
printed on the clear packaging cover of the tea lights. Printed
on a label on the bottom of each 12-piece pack of tea light
candles is "Distributed by Wholesale Merchandisers, Inc. 2929
Walker Ave NW, Grand Rapids, MI 49544. Made in India.
www.katiebrown.meijer.com"
Picture of the recalled products is available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml11/11223.html
The recalled products were manufactured in India and sold
exclusively at Meijer Stores in Michigan, Ohio, Kentucky, Illinois
and Indiana from October 2010 through March 2011 for about $8.
Consumers should stop using the tea light candles immediately and
return all tea light candles sets to any Meijer Store for a full
refund. For additional information, contact Meijer at (800) 927-
8699 between 8:00 a.m. and 5:00 p.m. Eastern Time Monday through
Friday, or visit the firm's Web site at http://www.meijer.com/
ONLINE TRAVEL COS: Ordered to Pay Occupancy Taxes to Atlanta
------------------------------------------------------------
Bill Rankin and Leon Stafford, writing for The Atlanta Journal-
Constitution, report that online travel companies that book hotel
rooms in Atlanta must pay more in occupancy taxes, the Georgia
Supreme Court ruled in a May 16 decision expected to generate
millions of dollars in revenue for the city.
But the court stopped short of handing the city a complete victory
by also ruling that the city cannot recover back taxes the
companies have failed to pay.
The May 16 decision involves only the city of Atlanta, but Fulton,
Gwinnett, Cobb, DeKalb and Clayton counties are part of a federal
class action suit over the same issue, and the online travel
industry faces similar suits nationwide.
Cities and counties contend the online travel companies illegally
pocket hotel occupancy tax revenue by paying the tax only on the
wholesale rate they pay to reserve blocks of rooms, rather than on
the rate they charge customers.
Atlanta's deputy city attorney, Eric Richardson, Esq., said the
city is pleased the court agreed that online companies must now
pay "the full amount of owed occupancy taxes going forward." The
city also will continue to pursue past unpaid taxes, he said.
A spokesman for the online travel industry expressed
disappointment and suggested online companies might reduce the
amount of advertising dollars they spend to promote Atlanta as a
travel destination.
Justice Robert Benham, writing for a unanimous court in the May 16
ruling, said the retail rate charged the customer is what should
be taxed under the city's ordinance. For example, he noted, if an
online travel company pays $60 to a hotel for the right to market
a room, then charges consumers $100 for the room, the full $100
room rate is subject to the tax, not just the wholesale rate. In
Judge Benham's example, that would mean an additional $2.80 for
the city.
The city in 2006 sued 17 online companies, including Hotels.com,
Expedia, Travelocity and Orbitz.
Atlanta's occupancy tax is 7%, and in past years the city has
collected more than $40 million a year. The revenue goes to the
city of Atlanta, the Atlanta Convention and Visitors Bureau and
the Georgia World Congress Center, and is also used to help pay
down debt on the Georgia Dome, said Gregory Pierce, ACVB executive
vice president.
"It's not a lot of money, but it adds to the funds available for
marketing the city," said ACVB board member, Ken Bernhardt.
"Every dollar that goes to promoting Atlanta is a dollar that
benefits the economy multiple times over."
Andrew Weinstein, a spokesman for the Interactive Travel Services
Association, said the online companies are "confounded and
disappointed" with the court's decision, though pleased that it
blocked collection of back taxes.
"This is judicial activism at its worst, and we hope the
legislature will review the policy implications of such a court-
created tax," he said.
Mr. Weinstein said he could not predict the ruling's effect on
hotel rates and bookings. He noted that the association's members
spend hundreds of millions of dollars each year promoting travel
destinations, and they may begin deciding where to spend that
money based on factors including the legal and tax climates in
certain areas.
Bob Lamar, who represents 259 Georgia cities and counties in the
federal class-action suit, filed in Rome, said the ruling should
"reinforce what we've always claimed -- that the online travel
companies owe those taxes." In March, U.S. District Judge Harold
Murphy granted class-action status to the lawsuit.
PIEDMONT OFFICE: 11th Circuit Cancels Class Status of Georgia Suit
------------------------------------------------------------------
The Court of Appeals for the Eleventh Circuit invalidated the
United States District Court for the Northern District of
Georgia's order certifying a class and remanded the securities
class action lawsuit against Piedmont Office Realty Trust, Inc.,
to the district court for further proceedings, according to the
Company's May 5, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
On October 25, 2007, the same stockholder that commenced the
securities litigation in Maryland filed a second purported class
action in the United States District Court for the Northern
District of Georgia against Piedmont and its board of directors.
The lawsuit is captioned In Re Piedmont Office Realty Trust, Inc.
Securities Litigation, Civil Action No. 1:07-cv-02660-CAP. The
complaint attempts to assert class action claims on behalf of (i)
those persons who were entitled to tender their shares pursuant to
the tender offer filed with the SEC by Lex-Win Acquisition LLC, a
former stockholder, on May 25, 2007, and (ii) all persons who are
entitled to vote on the proxy statement filed with the SEC on
October 16, 2007.
The complaint alleges, among other things, violations of the
federal securities laws, including Sections 14(a) and 14(e) of the
Exchange Act and Rules 14a-9 and 14e-2(b) promulgated thereunder.
In addition, the complaint alleges that defendants have also
breached their fiduciary duties owed to the proposed classes.
On December 26, 2007, the plaintiff filed a motion seeking that
the court designate it as lead plaintiff and its counsel as class
lead counsel, which the court granted on May 2, 2008.
On May 19, 2008, the lead plaintiff filed an amended complaint
which contained the same counts as the original complaint. On
June 30, 2008, defendants filed a motion to dismiss the amended
complaint.
On March 30, 2009, the court granted in part the defendants'
motion to dismiss the amended complaint. The court dismissed two
of the four counts, Counts III and IV, of the amended complaint in
their entirety. The court dismissed the remaining two counts with
the exception of allegations regarding (i) the failure to disclose
information regarding the likelihood of a listing in the Company's
amended response to the Lex-Win tender offer and (ii) purported
misstatements or omissions in the Company's proxy statement
concerning then-existing market conditions, the alternatives to a
listing or extension that were explored by the defendants, the
results of conversations with potential buyers as to the Company's
valuation, and certain details of the Company's share redemption
program. On April 13, 2009, defendants moved for reconsideration
of the court's March 30, 2009 order or, alternatively, for
certification of the order for immediate appellate review. The
defendants also requested that the proceedings be stayed pending
consideration of the motion. On June 19, 2009, the court denied
the motion for reconsideration and the motion for certification of
the order for immediate appellate review.
On April 20, 2009, the plaintiff, joined by a second plaintiff,
filed a second amended complaint, which alleges violations of the
federal securities laws, including Sections 14(a) and 14(e) of the
Exchange Act and Rules 14a-9 and 14e-2(b) promulgated thereunder.
The second amended complaint seeks, among other things,
unspecified monetary damages, to nullify and void any
authorizations secured by the proxy statement, and to compel a
tender offer. On May 11, 2009, the defendants answered the second
amended complaint.
On June 10, 2009, the plaintiffs filed a motion for class
certification. The court granted the plaintiffs' motion for class
certification on March 10, 2010. Defendants sought and received
permission from the Eleventh Circuit Court of Appeals to appeal
the class certification order on an interlocutory basis. On
April 11, 2011, the Eleventh Circuit Court of Appeals invalidated
the district court's order certifying a class and remanded the
case to the district court for further proceedings.
The Company believes that the allegations contained in the
complaint are without merit, and as such, have determined that the
risk of material loss associated with this lawsuit is remote.
Further, the Company says it will continue to vigorously defend
this action. Due to the uncertainties inherent in the litigation
process, the Company's assessment of the ultimate potential
financial impact of the case notwithstanding, the risk of
financial loss does exist, as with any litigation.
PIEDMONT OFFICE: Continues to Defend Maryland Securities Suit
-------------------------------------------------------------
Piedmont Office Realty Trust, Inc., continues to defend itself
from a class action lawsuit alleging violations of the Exchange
Act, according to the Company's May 5, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
On March 12, 2007, a stockholder filed a purported class action
and derivative complaint in the United States District Court for
the District of Maryland against, among others, Piedmont,
Piedmont's previous advisors, and the officers and directors of
Piedmont prior to the closing of the Internalization. The action
is captioned In Re Wells Real Estate Investment Trust, Inc.
Securities Litigation, Civil Action No. 1:07-cv-00862-CAP. The
complaint attempts to assert class action claims on behalf of
those persons who received and were entitled to vote on the proxy
statement filed with the SEC on February 26, 2007.
The complaint alleges, among other things, (i) that the
consideration to be paid as part of the Internalization is
excessive; (ii) violations of Section 14(a), including Rule 14a-9
thereunder, and Section 20(a) of the Exchange Act, based upon
allegations that the proxy statement contains false and misleading
statements or omits to state material facts; (iii) that the board
of directors and the current and previous advisors breached their
fiduciary duties to the class and to Piedmont; and (iv) that the
proposed Internalization will unjustly enrich certain directors
and officers of Piedmont.
The complaint seeks, among other things, (i) certification of the
class action; (ii) a judgment declaring the proxy statement false
and misleading; (iii) unspecified monetary damages; (iv) to
nullify any stockholder approvals obtained during the proxy
process; (v) to nullify the Internalization; (vi) restitution for
disgorgement of profits, benefits, and other compensation for
wrongful conduct and fiduciary breaches; (vii) the nomination and
election of new independent directors, and the retention of a new
financial advisor to assess the advisability of Piedmont's
strategic alternatives; and (viii) the payment of reasonable
attorneys' fees and experts' fees.
On June 27, 2007, the plaintiff filed an amended complaint, which
contains the same counts as the original complaint, described
above, with amended factual allegations based primarily on events
occurring subsequent to the original complaint and the addition of
a Piedmont officer as an individual defendant.
On March 31, 2008, the court granted in part the defendants'
motion to dismiss the amended complaint. The court dismissed
Counts III through VII, which are five of the seven counts of the
amended complaint in their entirety. The court dismissed the
remaining two counts with the exception of allegations regarding
the failure to disclose in Piedmont's proxy statement details of
certain expressions of interest by a third party in acquiring
Piedmont. On April 21, 2008, the plaintiff filed a second amended
complaint, which alleges violations of the federal proxy rules
based upon allegations that the proxy statement to obtain approval
for Internalization omitted details of certain expressions of
interest in acquiring Piedmont. The second amended complaint
seeks, among other things, unspecified monetary damages, to
nullify and rescind Internalization, and to cancel and rescind any
stock issued to the defendants as consideration for
Internalization. On May 12, 2008, the defendants answered the
second amended complaint.
On June 23, 2008, the plaintiff filed a motion for class
certification. On September 16, 2009, the court granted the
plaintiff's motion for class certification. On September 30,
2009, the defendants filed a petition for permission to appeal
immediately the court's order granting the motion for class
certification with the Eleventh Circuit Court of Appeals, which
the Eleventh Circuit Court of Appeals denied on October 30, 2009.
On April 13, 2009, the plaintiff moved for leave to amend the
second amended complaint to add additional defendants. The court
denied the motion for leave to amend on June 23, 2009.
On December 4, 2009, the parties filed motions for summary
judgment. On August 2, 2010, the court entered an order denying
the defendants' motion for summary judgment and granting, in part,
the plaintiff's motion for partial summary judgment. On August
12, 2010, the defendants filed a motion seeking to certify the
court's decision on the parties' motions for summary judgment for
immediate appeal. On November 1, 2010, the court denied the
defendants' motion to certify its order on the parties' motions
for summary judgment for immediate appeal. No trial date has been
set.
The Company believes that the allegations contained in the
complaint are without merit, and as such, have determined that the
risk of material loss associated with this lawsuit is remote.
Further, the Company says it will continue to vigorously defend
this action. Due to the uncertainties inherent in the litigation
process, the Company's assessment of the ultimate potential
financial impact of the case notwithstanding, the risk of
financial loss does exist, as with any litigation.
RALCORP HOLDINGS: Awaits Ruling on Motions for Class Status
-----------------------------------------------------------
The California state courts have not ruled on the motions for
class certifications on the separate class action lawsuits against
Ralcorp Holdings, Inc.'s subsidiaries, according to the Company's
May 5, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2011.
In June 2010, two former employees of a subsidiary of the Company
filed a lawsuit in California state court alleging, among other
things, that employees did not receive sufficient meal breaks
resulting in incorrect wage statements, unpaid overtime and
untimely payments to terminated employees. In March 2011, one
former employee of a separate subsidiary of the Company filed a
lawsuit in a different California state court containing similar
allegations. Each of these suits was filed as a class action and
seeks to include in the class certain current and former employees
of the respective subsidiary involved. In each case, the
plaintiffs are seeking unpaid wages, interest, attorneys' fees,
compensatory and other monetary damages and injunctive relief. No
determination has been made by either court regarding class
certification and there can be no assurance as to whether a class
will be certified or, if a class is certified, as to the scope of
such class.
The Company says its liability, if any, relating to these lawsuits
cannot be reasonably estimated at this time, yet is not likely to
be material to its consolidated financial position, results of
operations or cash flows.
REDDY ICE: Continues to Defend Antitrust Lawsuit
------------------------------------------------
Reddy Ice Holdings Inc. continues to defend itself in the
consolidated class action lawsuits alleging violations of
antitrust laws of various states, according to the Company's
May 5, 2011 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
In 2008 a number of lawsuits, including putative class action
lawsuits, were filed against the Company, Reddy Ice Corporation,
Home City Ice Company, Arctic Glacier Income Fund, Arctic Glacier,
Inc. and Arctic Glacier International, Inc., in various federal
courts in multiple jurisdictions alleging violations of federal
and state antitrust laws and related claims and seeking damages
and injunctive relief. Pursuant to an Order from the Judicial
Panel on Multidistrict Litigation, the civil actions pending in
federal courts have been transferred and consolidated for pretrial
proceedings in the United States District Court for the Eastern
District of Michigan. Home City entered into a settlement
agreement with the direct purchaser plaintiffs that was approved
by the Court on February 22, 2011. In March 2011, Arctic Glacier
announced that it has entered into a proposed settlement agreement
with the direct purchaser plaintiffs. Discovery is ongoing
regarding the claims asserted on behalf of direct purchasers. On
March 11, 2011, the Court entered an Order granting in part and
denying in part motions to dismiss the indirect purchaser claims.
On April 26, 2011, the indirect purchaser plaintiffs filed an
amended complaint asserting violations of the antitrust laws of
various states and related claims.
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
REDDY ICE: Ontario Class Certification Proceedings Ongoing
----------------------------------------------------------
Proceedings relating to a motion for class certification in a
lawsuit filed against Reddy Ice Holdings Inc. in an Ontario court
are ongoing, according to the Company's May 5, 2011 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
On March 1, 2010, a putative class action Statement of Claim was
filed against the Company in the Ontario Superior Court of Justice
in Canada alleging violations of Part VI of the Competition Act
and seeking general damages, punitive and exemplary damages, pre-
judgment and post-judgment interest, and costs. Proceedings
relating to Plaintiffs' Motion for Certification of a Class are
ongoing in that matter.
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
REDDY ICE: Continues to Defend Alberta Class Suit
-------------------------------------------------
Reddy Ice Holdings Inc. continues to defend itself in a class
action lawsuit pending in an Alberta, Canada court, according to
the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On March 8, 2010, a putative class action Statement of Claim was
filed against the Company in the Court of Queen's Bench of
Alberta, Judicial District of Calgary, in Canada, alleging
violations of Part VI of the Competition Act and seeking general
damages, special and pecuniary damages, punitive and exemplary
damages, interest and costs. On March 4, 2011, the Company was
served with an Amended Statement of Claim in that matter, which
asserts similar claims.
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
REDDY ICE: Awaits Court Approval of Canada Suits Settlement
-----------------------------------------------------------
An agreement has been reached to resolve the class actions filed
in Canada by direct purchasers of packaged ice in Canada against
Reddy Ice and Arctic Glacier Inc. alleging anti-competitive
behavior in the United States and Canada, the Company disclosed in
a May 5, 2011 Form 8-K filing with the U.S. Securities and
Exchange Commission. The agreement provides that Arctic Glacier
will pay C$2,000,000, all claims asserted against Reddy Ice and
Arctic Glacier in both Ontario and Alberta will be dismissed, and
Reddy Ice and Arctic Glacier will be granted full and final
releases with regard to those claims. Reddy Ice is not making any
payment in connection with this settlement. The agreement is
subject to the execution of final settlement documents and court
approval.
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
REDDY ICE: Court Consolidates Kansas Suit With Michigan Suits
-------------------------------------------------------------
A federal court entered an order transferring and consolidating a
class action lawsuit filed against Reddy Ice Holdings Inc. in
Kansas with other class action lawsuits pending in a Michigan
court, according to the Company's May 5, 2011 Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On March 4, 2011, a putative class action lawsuit was filed
against the Company and other defendants in state court in Kansas.
That lawsuit alleges violation of the Kansas Restraint of Trade
Act, violation of the Kansas Consumer Protection Statute, and
Unjust Enrichment, and seeks treble overcharge damages, full
consideration damages, compensatory damages, penalties, costs, and
attorney fees. That lawsuit was removed to federal court and, on
April 26, 2011, an order was entered transferring and
consolidating it with other pending cases for pre-trial
proceedings in the United States District Court for the Eastern
District of Michigan.
Beginning on August 8, 2008, purported class action complaints
were filed in the United States District Court for the Eastern
District of Michigan asserting claims under the federal securities
laws against the Company and certain of its current or former
senior officers. On July 17, 2009, the Court consolidated the
actions and appointed a lead plaintiff and interim lead
plaintiff's counsel. The lead plaintiff filed a consolidated
amended complaint on November 2, 2009. That complaint purports to
assert claims on behalf of an alleged class of purchasers of the
Company's common stock and alleges that the defendants
misrepresented and failed to disclose the existence of, and the
Company's alleged participation in, an alleged antitrust
conspiracy in the packaged ice industry. The Company and the other
defendants have filed an answer in that case.
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
REDDY ICE: Faces Two Putative Class Suits in Tennessee & Arkansas
-----------------------------------------------------------------
Reddy Ice Holdings Inc. was named a defendant in two putative
class action lawsuits filed in federal courts in Tennessee and
Arkansas, according to the Company's May 5, 2011 Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On April 28, 2011, two putative class actions were filed against
the Company and other defendants in federal courts in Tennessee
and Arkansas alleging violations of federal and state antitrust
statutes and seeking injunctive relief, damages, disgorgement,
costs, and attorney fees. The Company has not been served with
these lawsuits. The Company anticipates that these lawsuits will
be transferred and consolidated with other pending cases for pre-
trial proceedings in the United States District Court for the
Eastern District of Michigan.
Beginning on August 8, 2008, purported class action complaints
were filed in the United States District Court for the Eastern
District of Michigan asserting claims under the federal securities
laws against the Company and certain of its current or former
senior officers. On July 17, 2009, the Court consolidated the
actions and appointed a lead plaintiff and interim lead
plaintiff's counsel. The lead plaintiff filed a consolidated
amended complaint on November 2, 2009. That complaint purports to
assert claims on behalf of an alleged class of purchasers of the
Company's common stock and alleges that the defendants
misrepresented and failed to disclose the existence of, and the
Company's alleged participation in, an alleged antitrust
conspiracy in the packaged ice industry. The Company and the other
defendants have filed an answer in that case.
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
SANTARUS INC: Awaits Approval of Motion to Transfer New York Suit
-----------------------------------------------------------------
Santarus, Inc., is awaiting court approval of its motion to
transfer a class action lawsuit filed in a New York court to a
California court, according to the Company's May 5, 2011 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
In December 2010, a complaint styled as a putative class action
was filed against the Company in the U.S. District Court for the
Southern District of New York by a person employed by the Company
as a sales representative and on behalf of a class of similarly
situated current and former employees. The complaint seeks damages
for alleged violations of the New York Labor Law Sections 650 et
seq. and the federal Fair Labor Standards Act. The alleged
violations include failure to pay for overtime work. The complaint
seeks an unspecified amount for unpaid wages and overtime wages,
liquidated and punitive damages, attorneys' fees and other
damages. The Company denies all claims asserted in the complaint.
In April 2011, the Company filed a motion to transfer the case to
the United States District Court for the Southern District of
California. The Company's motion to transfer is currently pending.
Over the last few years, similar class action lawsuits have been
filed against other pharmaceutical companies alleging that the
companies' sales representatives have been misclassified as exempt
employees under the Federal Fair Labor Standards Act and
applicable state laws. There have been varying outcomes in these
cases to date, and it is too early to predict an outcome in the
Company's matter at this time.
Although the Company intends to vigorously defend against the
litigation filed against it, litigation often is expensive and
diverts management's attention and resources, which could
adversely affect the Company regardless of the outcome.
Based in San Diego, Calif., Santarus Inc. focuses on acquiring,
developing, and commercializing products that address the needs of
patients treated by gastroenterologists or primary care
physicians.
SIRIUS XM: Settles Antitrust Class Action
-----------------------------------------
TWICE reports that subscription-price increases that Sirius XM
could have imposed after the July 28 lapse of a voluntary price
cap won't happen until next year at the earliest because of a
settlement in a class-action lawsuit that alleged antitrust
violations.
The suit, filed in the U.S. District Court for the Southern
District of New York, charged the satellite-radio company abused
its monopoly position by imposing a music-royalty fee, raising the
price for additional-radio subscriptions from $6.99 to $8.99, and
charging for its previously free Internet streaming service.
Under the settlement, still to be approved by the court, Sirius XM
agreed through December 31 not to raise rates on its basic
programming package, other programming packages, its internet
streaming services, and its U.S. music royalty fee. Under the
settlement, however, the company won't have to decrease its
subscription discounts for owning multiple radios.
Also under the settlement, former subscribers who ended their
subscriptions after July 29, 2009, will be able to go to the
company's Web site to receive for free either one month of basic
satellite radio service or one month of Internet streaming.
Sirius XM will pay up to $13 million to pay the costs of providing
notice to the plaintiff class and reimburse plaintiffs' fees and
expenses. The settlement does not require the company to make any
other cash payments in the suit, which sought treble damages.
"Despite our belief that the claims asserted by the plaintiffs
were untrue, we entered into this settlement because we believe it
was in the best interest of our stockholders to avoid further
legal expense and inconvenience and eliminate the distraction of
this protracted litigation," the company said in a SEC filing.
Rate caps were one of many conditions required by the Federal
Communications Commission to approve the 2008 merger of Sirius and
XM into a single company. The rate caps are to expire July 28.
Although the FCC has asked for public comments on whether the
satellite-radio rate caps should be extended, Sirius XM has
previously said the caps would likely expire as planned.
Sirius XM executives have also said they would likely raise the
$12.95/month basic subscription rate in the future after holding
it steady since the launch of service 10 years ago.
In the meantime, the company's lawsuit with personality Howard
Stern continues.
In March, Mr. Stern's production company and his agent filed a
suit in the New York State Supreme Court claiming the company
didn't live up to the performance-based compensation provisions of
an employment contract dated October 2004. Mr. Stern's
compensation was linked to the number of Sirius subscribers
exceeding certain levels. Mr. Stern contends the number of post-
merger XM subscribers should be counted in his compensation.
This suit seeks damages, plus interest and costs, in an amount to
be determined. SiriusXM claims the suit is without merit.
SOUTHERN COPPER: Consolidated Derivative Suit to Go to Trial June
-----------------------------------------------------------------
Southern Copper Corporation expects the consolidated derivative
class action lawsuit over the merger transaction between the
Company and Minera Mexico, S.A. de C.V. to go to trial in June,
according to the Company's May 6, 2011, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarterly period
ended March 31, 2011.
Three purported class action derivative lawsuits were filed in the
Delaware Court of Chancery (New Castle County) late in December
2004 and early January 2005 relating to the proposed merger
transaction between the Company and Minera Mexico, S.A. de C.V..
On January 31, 2005, the three actions -- Lemon Bay, LLP v.
American Mining-Corporation, et al., Civil Action No. 961-N,
Therault Trust v. Luis Palomino Bonilla, et al., and Southern Peru
Copper Corporation et al., Civil Action No. 969-N, and James Sousa
v. Southern Peru Copper Corporation, et al., Civil Action No. 978-
N -- were consolidated into one action, captioned In re Southern
Peru Copper Corporation Shareholder Derivative Litigation, Consol.
Civil Action No. 961-N; the complaint filed by Lemon Bay was
designated as the operative complaint in the consolidated lawsuit.
The consolidated action purports to be brought on behalf of the
Company and its common stockholders; the defendants in the
consolidated action are AMC, German Larrea Mota-Velasco, Genaro
Larrea Mota-Velasco, Oscar Gonzalez Rocha, Emilio Carrillo Gamboa,
Jaime Fernando Collazo Gonzalez, Xavier Garcia de Quevedo Topete,
Armando Ortega Gomez and Juan Rebolledo Gout -- AMC Defendants;
Carlos Ruiz Sacristan, Harold S. Handelsman, Gilberto Perezalonso
Cifuentes, and Luis Miguel Palomino Bonilla -- Special Committee
Defendants. The consolidated complaint alleges, among other
things, that the Transaction was the result of breaches of
fiduciary duties by the Company's directors and was not entirely
fair to the Company and its minority stockholders. Fact discovery
closed in early 2010 and expert discovery closed on June 18, 2010.
On June 30, 2010, the plaintiff moved for partial summary
judgment. On August 10, 2010, the AMC Defendants and the Special
Committee Defendants filed separate cross-motions for summary
judgment. On
December 21, 2010, the Court denied the plaintiff's motion and the
AMC Defendants' cross-motion, but granted the Special Committee
Defendants' motion, dismissing the Special Committee Defendants
from the action. As of May 6, 2011, the case is expected to go to
trial in June 2011.
The complaint seeks, among other things, a preliminary and
permanent injunction to enjoin the Transaction, the award of
damages to the plaintiff and the class, and such other relief that
the court deems equitable, including interest, attorneys' and
experts' fees and costs. The defendants believe that the lawsuit
is without merit and are vigorously defending against the action.
SOUTHERN COPPER: Awaits Ruling on Motion to Consolidate Suits
-------------------------------------------------------------
Southern Copper Corporation is awaiting a ruling on motions and
cross-motions to consolidate derivative class action lawsuits
relating to the proposed combination of the Company with American
Mining-Corporation, according to the Company's May 6, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarterly period ended March 31, 2011.
Four purported class action derivative lawsuits have been filed in
the Delaware Court of Chancery (Oklahoma Firefighters Pension &
Retirement System et al. v. SCC et al., Gary Martin et al. v. SCC
et al., Thomas Griffin et al. v. SCC et al., and Sheet Metal
Workers Pension Plan of Northern California et al. v. SCC et al.)
from August 2010 to October 2010 relating to the proposed
combination of the Company with American Mining-Corporation, the
parent company of Asarco. The complaints name SCC, its current
and certain former directors, AMC and Grupo Mexico as defendants.
Two of the actions also name Asarco as a defendant. The actions
purport to be brought on behalf of the Company's common
stockholders. A previously reported complaint filed in the
Superior Court of Arizona, City of North Miami Beach Police
Officers' and Firefighters' Retirement Plan et al. v. SCC et al.,
has been voluntarily dismissed.
The complaints allege, among other things, that the proposed
transaction would result in breaches of fiduciary duties by the
defendants and is not entirely fair to the Company and its
minority stockholders. The complaints seek, among other things, a
preliminary and permanent injunction to enjoin the transaction,
the award of damages to the plaintiffs and the class, and such
other relief that the court deems equitable, including interest,
attorneys' and experts' fees and costs. On January 25, 2011, the
Oklahoma Firefighters and Sheet Metal Workers plaintiffs filed an
amended and joint motion to consolidate and have Firefighters'
counsel appointed lead counsel. Plaintiffs also moved to stay the
Martin and Griffin actions. The Sheet Metal plaintiffs have
withdrawn their prior motion to consolidate in connection with the
new motion. Oral argument on all plaintiffs' motions and cross-
motions to stay or consolidate and appoint lead counsel was
scheduled for May 5, 2011.
The Firefighters' plaintiffs also moved for leave to file an
amended complaint to add or supplement factual allegations
concerning the summary judgment ruling in the Lemon Bay action.
On April 1, 2011, the plaintiffs' motion was granted.
The defendants believe that these lawsuits are without merit and
are vigorously defending against the actions.
SUNRISE SENIOR: Class Discovery Ongoing in "Purnell" Lawsuit
------------------------------------------------------------
Class discovery in the lawsuit against Sunrise Senior Living,
Inc., is proceeding, according to the Company's May 6, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarterly period ended March 31, 2011.
On May 14, 2010, Plaintiff LaShone Purnell filed a lawsuit on
behalf of herself and others similarly situated in the Superior
Court of the State of California, Orange County, against Sunrise
Senior Living Management, Inc., captioned LaShone Purnell as an
individual and on behalf of all employees similarly situated v.
Sunrise Senior Living Management, Inc. and Does 1 through 50, Case
No. 30-2010-00372725 (Orange County Superior Court). Plaintiff's
complaint is styled as a class action and alleges that Sunrise
failed to properly schedule the purported class of care givers and
other related positions so that they would be able to take meal
and rest breaks as provided for under California law. The
complaint asserts claims for: (1) failure to pay overtime wages;
(2) failure to provide meal periods; (3) failure to provide rest
periods; (4) failure to pay wages upon ending employment; (5)
failure to keep accurate payroll records; (6) unfair business
practices; and (7) unfair competition. Plaintiff seeks unspecified
compensatory damages, statutory penalties provided for under the
California Labor Code, injunctive relief, and costs and attorneys'
fees. On June 17, 2010, Sunrise removed this action to the United
States District Court for the Central District of California (Case
No. SACV 10-897 CJC (MLGx)). On July 16, 2010, plaintiff filed a
motion to remand the case to state court. On August 10, 2010, the
Court stayed all proceedings pending early mediation by the
parties. Early mediation was unsuccessful, and on January 18,
2011, the United States District Court for the Central District of
California denied plaintiff's motion to remand the action to state
court. Class discovery is proceeding. Sunrise believes that
Plaintiff's allegations are not meritorious and that a class
action is not appropriate in this case, and intends to defend
itself vigorously. Because of the early stage of this suit,
Sunrise cannot at this time estimate an amount or range of
potential loss in the event of an unfavorable outcome.
SUNTRUST MORTGAGE: Faces Mortgage Loan Class Action in Calif.
-------------------------------------------------------------
Keller Rohrback L.L.P. on May 11 disclosed that two class action
lawsuits were filed in the United States District Court for the
Southern District of California. One case was filed against
SunTrust Mortgage, Inc., and SunTrust Banks, Inc. The other case
was filed against Chase Home Finance LLC and JPMorgan Chase Bank,
N.A. The complaints were filed on behalf of California homeowners
who have pursued mortgage loan modifications with SunTrust or
Chase, and allege that the Defendants violated California consumer
protection laws and breached contracts and other duties by, among
other things:
-- Taking advantage of mortgagors' defaults;
-- Verbally promising modification and forbearance, soliciting
modification applications, and representing that certain written
materials are part of the modification process;
-- Failing to grant promised modifications or reneging on
contractual modifications;
-- Unduly delaying modifications;
-- Repeatedly telling mortgagors that documents are lost,
missing, incomplete, or otherwise defective;
-- Proceeding with foreclosures based on mortgagors' failure to
meet shifting demands;
-- Increasing principal balances and imposing late charges and
other fees and expenses on mortgagors;
-- Hanging foreclosure over mortgagors' heads as they are
dragged through the modification process;
-- Substantially increasing debts by incorrectly applying
payments; and
-- Failing to keep accurate records.
Keller Rohrback's investigation of the practices alleged in the
complaints is ongoing, particularly regarding homeowners whose
houses were sold in foreclosure sales after they tried to have
their loans modified by SunTrust or Chase.
If you live in California and your home mortgage loan is, or was
serviced by SunTrust or Chase, and if your house was sold in a
foreclosure sale after you pursued a loan modification or you have
information about SunTrust's or Chase's loan modification
practices, please contact paralegal Nicholas Wallace or attorneys
Sharon Hritz or Lynn Sarko at 800.776.6044 or 805.456.1496, or via
email at info@kellerrohrback.com
Keller Rohrback, with offices in Santa Barbara, Seattle, Phoenix
and New York, is committed to helping individuals protect their
investments. Keller Rohrback has successfully provided class
action representation for over a decade. Its litigators have
obtained judgments and settlements on behalf of clients in excess
of seven billion dollars.
CONTACT: Keller Rohrback L.L.P.
Nick Wallace, Paralegal
Telephone: (800) 776-6044
E-mail: info@kellerrohrback.com
Web site: http://www.krclassaction.com
TJX COMPANIES: Removes "Korn" Song-Beverly Suit to N.D. Calif.
--------------------------------------------------------------
Matt Korn, on behalf of himself and others similarly situated v.
The TJX Companies, Inc., et al., Case No. CGC-11-509477 (Calif.
Super. Ct., San Francisco Cty.), was filed on March 23, 2011. The
plaintiff accuses defendants' cashiers of requesting and recording
personal identification information, in the form of zip codes, and
credit card numbers from customers using credit cards at the
point-of-sale in defendants' retail establishments, a practice
that is prohibited under California Civil Code section 1747.08
(Song-Beverly Credit Card Act of 1971).
The TJX Companies, Inc., and T.J. Maxx of CA, LLC, operate retail
stores under the names T.J. Maxx, Marshalls and HomeGoods
throughout California.
Mr. Korn is a resident of California, and entered into a retail
transaction with defendants at one of defendants' California
stores.
On the basis of diversity jurisdiction, the defendants, on May 12,
2011, removed the lawsuit to the Northern District of California,
and the Clerk assigned Case No. 11-cv-02357 to the proceeding.
The Plaintiff is represented by:
Gene J. Stonebarger, Esq.
Richard D. Lambert, Esq.
STONEBARGER LAW
A Professional Corporation
75 Iron Point Circle, Suite 145
Folsom, CA 95630
Telephone: (916) 235-7140
E-mail: gstonebarger@stonebargerlaw.com
rlambert@stonebargerlaw.com
The Defendants are represented by:
Michelle C. Doolin, Esq.
Leo P. Norton, Esq.
COOLEY LLP
4401 Eastgate Mall
San Diego, CA 92121
Telephone: (858) 550-6000
E-mail: doolinmc@cooley.com
lnorton@cooley.com
TOYOTA MOTOR: Economic Damages in Acceleration MDL Can Proceed
--------------------------------------------------------------
Amanda Bronstad, writing for The National Law Journal, reports
that a federal judge has ruled that class claims for economic
damages against Toyota Motor Corp. in the sudden, unintended
acceleration multidistrict litigation can go forward based on the
injuries alleged.
U.S. District Judge James Selna issued his final order on May 13
in the MDL, which involves more than 200 lawsuits brought on
behalf of consumers. The ruling mirrored a tentative order
Judge Selna issued on April 29.
Judge Selna also issued a tentative ruling against Toyota on the
issue of whether California law, which is being asserted by
plaintiffs across the nation in the consolidated complaint, can be
applied to both Toyota and its subsidiary, Toyota Motor Sales USA
Inc., which is based in California, without depriving the company
of its due process rights. Judge Selna scheduled a late hearing
on May 16 regarding that issue.
The dismissal ruling marked the second time that Judge Selna
refused to dismiss the economic-loss master consolidated
complaint, a nationwide action filed on behalf of consumers who
allege economic losses due to sudden acceleration defects. On
Nov. 30, Judge Selna denied a motion to dismiss the complaint,
ruling that consumers who overpaid for their vehicles, made lease
payments that were too high or sold their vehicles at a loss had
established sufficient economic injuries. But he dismissed claims
by some consumers who failed to assert sufficient injuries beyond
the fact that they had purchased a Toyota vehicle that was later
recalled.
In his May 13 order, Judge Selna allowed claims to proceed based
on the amended claims that the consumers had relied on advertising
materials promoting the safety of Toyota's vehicles and that the
vehicles lacked a fail-safe mechanism that would have prevented
them from accelerating out of control.
"We believe -- and intend to prove -- that Toyota was aware of the
defect, and chose not to take action to protect consumers," said
Steve Berman, Esq., managing partner of Seattle's Hagens Berman
Sobol Shapiro and co-lead counsel on the plaintiffs' steering
committee for the economic loss class actions, in a prepared
statement on May 16. "Aside from the overall victory in allowing
the case to move forward, Judge Selna agreed with many of our
underlying arguments in the case, including our contention that
Toyota owners who did not attempt to sell their vehicle could
still bring a claim because they overpaid for their vehicles,
buying cars that were not worth as much as a car free of these
defects."
Toyota spokeswoman Celeste Migliore also issued a formal
statement: "Although Toyota is confident that no defect exists in
its Electronic Throttle Control System, at this early stage of the
litigation the Court is required to accept as true all of the
factual allegations made by plaintiffs' counsel in ruling on
Toyota's Motion to Dismiss. The burden is now squarely on
plaintiffs' counsel to prove their allegations, and Toyota is
confident that no such proof exists."
The ruling did not address claims of personal injuries or wrongful
deaths caused by accidents allegedly caused by sudden
acceleration.
Judge Selna refused to grant Toyota's motion to strike consumer
claims based on violations of the Transportation Recall
Enhancement, Accountability and Documentation Act, which imposed
stricter reporting requirements on manufacturers following the
Ford/Firestone recalls.
"The fact that Toyota had a duty to disclose to [the National
Highway Traffic Safety Administration] rather than consumers does
not exonerate the statutory duty to disclose material facts to
consumers," he wrote.
He also refused to take judicial notice of a Feb. 8 report by the
NHTSA and the National Aeronautics & Space Administration
concluding there was insufficient proof of electronic defects in
Toyota vehicles. Rather, the agencies concluded that mechanical
defects -- specifically, faulty floor mats and accelerator pedals
-- caused the sudden acceleration. Toyota has recalled nearly 10
million vehicles because of the problems and has paid $48.8
million in related civil penalties.
But Judge Selna dismissed some warranty claims, as well as
revocation claims and claims of unjust enrichment.
On the choice of law issue, plaintiffs have argued that California
law should dictate the consolidated complaint. "Nearly all of the
economic loss claims arise from statements and omissions made by
[Toyota Motor Sales] on behalf of itself and [Toyota Motor
Corp.]," they wrote in court documents. They noted that all of
the company's marketing and advertising is directed by Toyota
Motor Sales.
Toyota has argued that California law should not dictate the
economic loss claims for 148 lawsuits filed outside the state.
Ms. Migliore noted that about 70% of the economic loss cases in
the MDL were originally filed outside California in states with
different consumer laws. "We believe applying California law to
plaintiffs who purchased, drove, and maintained their vehicles
outside the state would fly in the face of Supreme Court precedent
and trample on each state's right to create and enforce its own
laws," she said. "Just as important, California simply was not
the epicenter of the events in these lawsuits." She noted that
most of the vehicles in the litigation were not designed or
manufactured in California.
In a May 16 memo, Judge Selna temporarily ruled against Toyota on
the due process argument but said the issue was a "complex
undertaking" that is "subject of more recent elucidation."
UMB FINANCIAL: Continues to Defend Suits Over Posting Practices
---------------------------------------------------------------
UMB Financial Corporation continues to defend itself from class
action lawsuits alleging that its checking account posting
practices resulted in excessive overdraft fees, according to the
Company's May 5, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2011.
During 2010, two suits were filed against UMB Bank, N.A. in
Missouri state court. The first suit was made by a customer
alleging that the Bank's checking account posting practices
resulted in excessive overdraft fees in violation of Missouri's
consumer protection statute and the account agreement. The suit
seeks class-action status for Bank customers who may have been
similarly affected. The Bank removed this action to the U.S.
District Court for the Western District of Missouri. This action
was then transferred to the multidistrict litigation in the U.S.
District Court for the Southern District of Florida, where similar
claims against other financial institutions are pending. A second
suit was filed in Missouri state court by another Bank customer
alleging the substantially identical facts and also seeking class
action status. During the first quarter of 2011, a third suit was
filed in the U.S. District Court of Oklahoma by another bank
customer alleging similar facts and also seeking class action
status.
At this early stage of the litigation, the Bank says it is not
possible for its management to determine the probability of a
material adverse outcome or reasonably estimate the amount of any
potential loss.
UNITED STATES: DOJ Seeks Dismissal of Gay Military Class Action
---------------------------------------------------------------
The Department of Justice on May 10 filed a motion to dismiss a
class action lawsuit filed by the American Civil Liberties Union
and the ACLU of New Mexico which seeks full separation pay for
service members who were honorably discharged but had their
separation pay cut in half because of "homosexuality." In the
past six years, 142 honorably discharged veterans had their
separation pay cut in half because of the discriminatory policy.
The total amount of separation pay withheld from those veterans is
approximately $2.1 million.
The lawsuit was filed in November 2010, before Congress repealed
the "Don't Ask, Don't Tell" policy that barred gay or lesbian
service members from the military. The lead plaintiff in the case
is Richard Collins, a former staff sergeant in the Air Force who
served for nine years until he was discharged under "Don't Ask,
Don't Tell." Mr. Collins was stationed at Cannon Air Force Base
in New Mexico. In its response, the DOJ states that the half-
separation pay policy applies not only to those who engage in
"Homosexual Conduct," but also those discharged from the military
for drug and alcohol abuse or being deemed a national security
risk.
The following can be attributed to Joshua Block, staff attorney
with the ACLU Lesbian Gay Bisexual and Transgender Project:
"The government's decision to contest these claims is baffling.
These honorably discharged veterans were forced out of the
military under the unconstitutional and discriminatory 'Don't Ask,
Don't Tell' policy, which is in the process of being repealed.
All that these veterans are asking for is to receive the same
separation pay that any other honorably discharged veteran would
have received. It is outrageous to equate these service members
with those who were discharged for threats to national security
and drug abuse. The government's treatment of these veterans is
shameful and adds insult to injury."
The following can be attributed to Laura Ives, staff attorney with
the ACLU of New Mexico: "The Department of Justice's action [Tues]
day is profoundly disappointing. The government must treat our
veterans with the fairness and dignity they deserve, especially if
those veterans were discharged from the armed forces under a
policy that is in the process of being dismantled for being
unconstitutional."
For more information on the ACLU's case, please visit
http://is.gd/SX2c8N
VISA INC: Court Proposes Sept. 12, 2012 Trial Date in IPO Suit
--------------------------------------------------------------
Unless there are objections, September 12, 2012, will be the trial
date in the Interchange Litigation involving Visa Inc., according
to the Company's May 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On February 7, 2011, the Company entered into an omnibus agreement
that confirmed and memorialized the signatories' intentions with
respect to the loss sharing agreement, the judgment sharing
agreement and other agreements relating to certain interchange
litigation. Under the omnibus agreement, the monetary portion of
any settlement of the interchange litigation covered by the
omnibus agreement would be divided into a MasterCard portion at
33.3333% and a Visa portion at 66.6667%. In addition, the monetary
portion of any judgment assigned to Visa-related claims in
accordance with the omnibus agreement would be treated as a Visa
portion. The Company would have no liability for the monetary
portion of any judgment assigned to MasterCard-related claims in
accordance with the omnibus agreement, and if a judgment is not
assigned to Visa-related claims or MasterCard-related claims in
accordance with the Omnibus agreement, then any monetary liability
would be divided into a MasterCard portion at 33.3333% and a Visa
portion at 66.6667%. The Visa portion of a settlement or judgment
covered by the omnibus agreement would be allocated in accordance
with specified provisions of the Company's retrospective
responsibility plan. The litigation provision on the consolidated
statements of operations is not impacted by the execution of the
omnibus agreement.
On February 11, 2011, the parties filed motions for summary
judgment on a number of issues. The Company, jointly with other
defendants, moved for summary judgment against the claims in the
Supplemental Complaint and the Second Consolidated Amended Class
Action Complaint. The Company and other defendants also moved for
summary judgment against the claims in the individual plaintiffs'
complaints. The class plaintiffs sought summary judgment on all of
their intra-network damages claims under Section 1 of the Sherman
Act in the Second Consolidated Amended Class Action Complaint,
including by arguing that Visa's post-IPO conduct constitutes a
continuing conspiracy. Finally, the individual plaintiffs moved
for partial summary judgment on their claims that (i) agreements
by banks to enforce certain Visa rules are per se unlawful under
Section 1 of the Sherman Act, and (ii) Visa's imposition of those
rules post-IPO constitutes a continuing conspiracy under Section 1
of the Sherman Act.
On February 17, 2011, the Court ordered that the parties identify
any objections to a trial date of September 12, 2012.
VISA INC: Continues to Face "Watson" Suit in British Columbia
-------------------------------------------------------------
Visa Inc. continues to face a class action lawsuit filed by Mary
Watson before a British Columbia court, according to the Company's
May 5, 2011 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
On March 28, 2011, Ms. Watson filed the class action lawsuit in
the Supreme Court of British Columbia, Canada, on behalf of
merchants and others in Canada that accept payment by the Company
and MasterCard. The suit, filed against Visa Canada, MasterCard,
and ten financial institutions, alleges conduct contrary to
section 45 of the Competition Act and also asserts claims of civil
conspiracy, interference with economic interests, and unjust
enrichment, among others. Plaintiff alleges that the Company and
MasterCard each conspired with their member financial institutions
to set supra-competitive default interchange rates and merchant
discount fees, and that the Company and MasterCard's respective
"no-surcharge" and "honour all cards" rules had the
anticompetitive effect of increasing merchant discount fees. The
lawsuit seeks unspecified monetary damages and injunctive relief.
VISA INC: Plaintiff in Call Center Suit Seeks to Add Company
------------------------------------------------------------
On April 28, 2011, Francisco Marenco filed a request in the U.S.
District Court for the Central District of California to amend his
class action complaint to name Visa, Inc., as the defendant. The
lawsuit alleges that Visa recorded telephone calls to call center
representatives without providing a disclosure that the calls may
be recorded, in alleged violation of state law in California and
several other states. Together with the proposed complaint, the
plaintiff filed notice that the parties had reached a settlement,
which is subject to court approval, in an amount that is not
material to the Company's consolidated financial statements. This
matter relates to and resolves the previously reported contractual
indemnity claim tendered to Visa by a processing client in October
2010m, according to the Company's May 5, 2011 Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
VISA INC: Remains a Defendant in Data Pass Litigation
-----------------------------------------------------
Visa Inc. remains a defendant in a purported class action known as
data pass litigation, alleging violations of consumer protection
statutes and state common law, according to the Company's May 5,
2011 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
On November 19, 2010, the plaintiff filed an amended complaint,
adding GameStop Corporation as a defendant, asserting additional
claims against Visa under federal and state consumer protection
statutes and state common law, and seeking certification of a
class of persons and entities whose credit card or debit card data
was improperly accessed by Webloyalty.com since October 1, 2008.
On December 23, 2010, Webloyalty.com, GameStop, and Visa each
filed motions to dismiss the amended complaint. Webloyalty.com
also has asked the Judicial Panel on Multi-district Litigation to
consolidate with this case, for pretrial proceedings, a case
pending in federal district court in California in which
Webloyalty.com and Movietickets.com (but not Visa) are named as
defendants. On February 8, 2011, the Judicial Panel on Multi-
district Litigation denied Webloyalty.com's application to
consolidate the case.
* Bill S.F. 149 Takes Away Consumers' Right to Join Class Actions
-----------------------------------------------------------------
Republicans in the Minnesota Senate voted on May 14 to strip
consumers and small businesses of their ability to seek justice.
State Sen. Ron Latz, DFL-St. Louis Park, said the legislation
approved on May 14 takes away the ability of consumers to join
together to take on big corporations, and tilts the legal playing
field in favor of big special interests.
The bill, S.F. 149, sponsored by Sen. Julianne Ortman, R-
Chanhassen, aims to take away Minnesotans' ability to join class-
action lawsuits against corporations that have harmed consumers
through fraud or negligence. The bill sets up impossible hurdles
for consumers that seek to hold corporations accountable through a
class-action suit, forcing each individual member joining the suit
to go through the lengthy and complicated process of proving exact
out-of-pocket loss in court before joining the suit.
"Class-action suits play a crucial role in protecting consumers by
holding corporations accountable for fraudulent and negligent
actions," said Sen. Latz. "This bill creates an undue burden on
the courts by forcing each victim to establish monetary loss in
court, making it virtually impossible for consumers to seek
justice and ultimately defeats the purpose of having consumer
protection class action lawsuits in Minnesota."
Sen. Latz said the bill is part of a nation-wide effort to weaken
consumer rights, led by big insurance and big business special
interests through the American Legislative Exchange Council.
Minnesota's legislators are introducing cookie-cutter bills
written in D.C. and claiming them as their own.
"This bill makes it perfectly clear that Minnesota Republicans
choose to protect big business and insurance companies rather than
defend the rights of Minnesotans," said Sen. Latz. "Republicans
make the wrong choice. Across the country, we see Republican
legislatures teaming up with big business and insurance companies
to trample the rights of consumers. Even in Minnesota, this bill
is just one of many Republican bills that will hurt consumers
while protecting large corporate interests."
* Madison & St. Clair Counties Class Action Destination
-------------------------------------------------------
Travis Akin, writing for The Madison St. Clair Record, reports
that on April 20, a news report from the British Broadcasting
Corporation revealed that Apple Inc. could track the location of
iPhone users through the iOS 4 operating system. On April 29, an
Illinois resident working with a Metro East lawyer proposed a
statewide class action against Apple Inc.
All it took was nine days for lawyers in the Metro East to begin
the process of starting a class action lawsuit. Isn't it amazing
how a report comes out and in only nine days, plaintiffs'
attorneys have already started work on building a class action
lawsuit. No one even knew that Apple Inc. was tracking locations
until just a few weeks and suddenly lawyers are lining up to sue.
The facts are still coming out on the Apple controversy, but the
litigation industry has already sprung into action.
Cookie cutter class action lawsuits such as this one are
unfortunately a way of life in our litigious society and certainly
they have been a way of life in the Metro East for years. It
really should not be all that surprising to find a Metro East
connection to what will undoubtedly become yet another cookie
cutter class action lawsuit that will provide little compensation
to the plaintiffs but a windfall of cash to the lawyers.
Despite a few recent improvements in the legal environment in
Madison and St. Clair Counties, the region continues to be a
destination for plaintiffs' lawyers all across the country looking
to win the lawsuit lottery.
Specifically, Madison County continues to be a destination
jurisdiction for asbestos cases from all across the country. In
fact, in the first quarter alone, there have 154 asbestos lawsuits
filed in Madison County.
And in recent months, the issue of out-of-state asbestos cases has
become a growing concern in St. Clair County. Last December,
former Circuit Judge Patrick Young accepted four mesothelioma
cases from Missouri, Indiana, Wisconsin and Pennsylvania a day
before he was set to retire. Currently, Fifth District appellate
justices are in the process of making a decision on whether or not
the cases will remain in St. Clair County.
The legal climate in Madison and St. Clair Counties is no laughing
matter. The culture of lawsuit has an impact that goes beyond the
courtroom. As the two counties inch closer and closer to once
again becoming full-fledged "Judicial Hellholes," the local
economy continues to flounder.
The unemployment rate of 10.2% in St. Clair County and the 9.2%
unemployment rate in Madison County are both higher than the 8.8%
unemployment rate statewide.
What the Metro East region needs is jobs -- not more lawsuits.
* Securities Class Actions Rise in 2010, PwC Study Shows
--------------------------------------------------------
Karen M. Kroll, writing for CFOworld, reports that last year was
lacking -- fortunately -- in the kind of outsize corporate
accounting and financial frauds that a few years ago filled the
headlines with names like Enron, Worldcom, and AIG. Even so,
reviewing the annual reports from organizations that study trends
in securities litigation reveals a significant increase in recent
class-action activity.
And now, as companies enter shareholder meeting season, is a
particularly good time to take notice.
Last year 174 federal securities class action lawsuits were filed,
12% more than in 2009, according to the PwC annual Securities
Litigation Study -- marking the second highest level in the past
five years. "Securities class action litigation is alive and
well," says William Baker, Esq., partner with the law firm of
Latham & Watkins LLP, and a contributor to the PwC report.
At the same time, only 86 settlements were reported, a drop of 15%
from 2009, and the lowest level in more than a decade, according
to "Securities Class Action Settlements -- 2010 Review and
Analysis," by consultancy Cornerstone Research. That report said
the average settlement amount also slipped, from $37.2 million to
$36.3 million, although the median settlement jumped by nearly
half, to $11.3 million, because of some mega-awards that skewed
the result. "When adjusted for inflation, [the median] was the
highest in 10 years," says Laura Simmons, a senior advisor with
Cornerstone, and an accounting professor at the College of William
and Mary in Williamsburg, Va.
The increase in securities litigation runs counter to what's
happening in other areas of class action -- where the Supreme
Court recently sided with corporations to make plaintiff chances
slimmer, for example, in the product-claim arena. In the case of
aggrieved shareholders, however, their large numbers in certain
cases -- all experiencing the same alleged damages during a
specific time period -- continue to make the class action "the
most common form . . . for securities suits," says Ms. Simmons.
A few trends of great interest to CFOs stand out in the PwC
securities-litigation study. In what might be viewed as a welcome
change, the percentage of cases alleging an accounting
misstatement -- such as an overstatement of revenue or an
understatement of liabilities, or a failing in internal controls -
- dropped to a low of 35%. In 2002, and thus pre-Sarbanes-Oxley,
the percentage of these types of cases peaked at 77%.
And after several years in which the financial sector dominated
filings, last year plaintiffs targeted a wider range of
industries. "Financial services is still the most sued, but now
it's comparative with other industries," says Grace Lamont, a
partner and leader of the securities litigation and investigation
group within PwC. Lawsuits against financial services firms
accounted for 22% of the filings in 2010, down from 41% last year.
Coming in second was health care, including pharmaceutical,
medical device and health services companies. More than one-fifth
(21%) of the 2010 filings focused there, with many cases
concerning the efficacy of the products the companies sold,
Ms. Lamont says.
A Jump in M&A Cases
Filings involving mergers and acquisitions also jumped, accounting
for nearly one-quarter of cases in 2010, up from 4% a year
earlier. "Almost every deal is challenged," Mr. Baker says.
These cases often allege a breach of duty by directors and
officers of the target firms, says Indiana University law
professor, Donna Nagy. "In M&A, the challenges tend to come in
three categories," she says: conflicts of interest among the
officers negotiating a deal, failure to obtain an appropriate
price, and inadequate exploration of alternatives.
Another industry finding itself on the receiving end of securities
lawsuits was the for-profit educational sector, which attracted 13
filings. All were filed between August and December, PwC reports,
and appear to have been driven by an August 2010 Government
Accountability Office report, "For-Profit Colleges: Undercover
Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive
and Questionable Marketing Practices." Among other findings:
Personnel associated with all 15 for-profit colleges studied made
deceptive or otherwise questionable statements to GAO's undercover
applicants.
While the flurry of cases was specific to this sector, other
industries aren't immune. "We could see this in other industries,
as new reports are released or an issue comes up," Ms. Lamont
says.
No Major Rise in Cases Singling Out CFOs
In one more shift that might hearten finance chiefs, the
percentage of cases specifically targeting the CFO held fairly
steady at 63%. That's up slightly from 62% in 2009, but down
significantly from 2006, when 84% of lawsuits targeted the CFO.
The decline, says Ms. Lamont, seems to correlate to the drop in
accounting-related cases.
Whether one can reasonably give Sarbanes-Oxley credit for the
reduction in financial-misstatement cases is unclear. "You can't
conclude that Sarbanes-Oxley helped, but you can speculate," says
Hillary Sale, professor of law and management at Washington
University in St. Louis. While many people charged with
implementing the law have complained about its cost and
administrative burden, they also acknowledge an improvement in the
quality of the information their companies produce, she adds.
Looking more deeply into the securities-litigation settlement
picture, Laura Simmons cites several factors as contributing to
the sharp rise in median awards. One element is the increasing
participation of institutional investors, such as public pension
plans, as lead or co-lead plaintiff. In fact, institutions were
lead plaintiffs in more than two-thirds of settlements in 2010,
the highest proportion to date since the passage of the Private
Securities Litigation Reform Act of 1995. "We find that the
presence of public pension plans as lead plaintiffs is associated
with significantly higher settlement amounts," the Cornerstone
report notes. This could be due to the fact that they would
choose to pursue cases that are stronger and/or larger to begin
with.
What's more, the percentage of settlements that involved a
corresponding SEC action, such as an administrative proceeding,
rose from 20% to 30% between 2009 and 2010. "Cases that involve
SEC actions are associated with significantly higher settlements,"
the Cornerstone report notes.
During 2009 and 2010, 15 suits that related to the credit crisis
were settled -- out of more than 200 filed. These settlement
amounts tend to be dramatically higher than for other lawsuits,
according to Cornerstone's research. The median amount tops $31
million, compared with $10 million for other suits.
'Increased Vigor'
The increase in the number of securities lawsuits filed, along
with the bump in the median settlement amounts, "deserve some
attention" from CFOs and senior executives, says Ms. Lamont, who
believes they should be more aware of the changing regulatory
landscape.
In addition, the SEC's "increased vigor" when it comes to
enforcing securities regulations is likely to be sustained.
"Dodd-Frank enhanced the SEC's enforcement authority, and I think
the SEC can be expected to use it," says Ms. Nagy of the effect of
the Wall Street Reform and Consumer Protection Act. For instance,
the law expands the SEC's ability to seek civil monetary penalties
in administrative proceedings, as well as its ability to pay for
tips that lead to enforcement actions -- the whistleblower
provision.
"Companies really need to be sure that their governance and
compliance programs are as strong as possible," says Ms. Lamont.
"If there are issues, they'll be in the best position to defend
themselves."
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Felisilda, Noemi Irene A. Adala, Rousel Elaine Fernandez, Joy A.
Agravante, Ronald Sy, Julie Anne Lopez, Christopher Patalinghug,
Frauline Abangan and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN 1525-2272.
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