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C L A S S A C T I O N R E P O R T E R
Monday, July 18, 2011, Vol. 13, No. 140
Headlines
BANNER SUPPLY: Aug. Opt-Out Deadline Set for Drywall Settlement
CITIMORTGAGE: Sued Over Foreclosures of Servicemembers' Homes
CLASSMATES.COM: Class Action Settlement Gets Temporary Approval
FEDERATED PAYMENTS: Committed Tortious Acts in Ill., Suit Says
FEDEX CORP: Appeal in "Anfinson" Suit Remains Pending
FEDEX CORP: Awaits Court Decision in Paystub Suit
FEDEX CORP: Continues to Defend "Bibo" Suit in California
FEDEX CORP: "Rascon" Suit Still Pending in Colorado
FEDEX CORP: Files Petition for Mandamus in Contractor Suits
FEDEX CORP: Hearing on "Taylor" Suit Accord Anticipated in 2012
FEDEX CORP: Unit Settles Wage and Hour Suit in Massachusetts
FRED MEYER: Employees File Class Action Over Sexual Harassment
IMMUCOR INC: Faces Suit Over Proposed Sale to TPG Partners
KNOWLES PUBLISHING: Sued Over Unauthorized Automated Calls
KRAFT FOODS: Wage Class Action Can Advance in State Court
LIVING ESSENTIALS: Sued Over Bogus Claims on Hangover Medicines
MEIJER INC: Recalls 13T Touch Point Oscillating Ceramic Heaters
MICRON TECHNOLOGY: Appeal in Quebec Suit Still Pending
MICRON TECHNOLOGY: Awaits OK of Settlements in Price-Fixing Suits
MICRON TECHNOLOGY: Gets Final OK of Accord in Shareholder Suit
NAT'L FOOTBALL LEAGUE: Brady Plaintiffs Can Speak for Retirees
PRESCRIPTION DRUG RETAILERS: WLF Seeks Review of W.Va. AG's Case
UNITED STATES: Aug. 12 Pigford Settlement Opt-Out Deadline Set
WELLS FARGO: Settles MBS Securities Class Action for $125 Mil.
* Canada Has Yet to Draw Up Indirect Purchaser Class Suit Rules
* Wal-Mart Ruling No Impact on Other Employment Class Actions
*********
BANNER SUPPLY: Aug. Opt-Out Deadline Set for Drywall Settlement
---------------------------------------------------------------
Naples Daily News reports that Nicole Rodriguez hasn't gotten a
dime to replace her tainted Chinese drywall. Yet, the East Naples
resident is considering opting out of a proposed $54.5 million
settlement agreement with Banner Supply Co., the Miami-based
company that supplied the corrosive wall board discovered in her
home and thousands of others across Florida.
While the proposed multimillion-dollar settlement might sound
generous, some attorneys are questioning whether it's enough money
to truly help homeowners.
At the same time, the settlement is opposed by builders and
installers who are facing claims because they used Chinese drywall
supplied by Banner. They say they were unfairly excluded from
negotiations as defendants in the class-action case.
The settlement would include attorney fees, which could eat up as
much as 32% of the total, and it would cover other "administrative
costs." Some estimate the settlement might get homeowners only
$4,000 to $6,000.
Her Coral Gables attorney, David Durkee, who represents 300
Chinese drywall victims across the state, is telling his clients
they may want to opt out of the settlement as proposed because it
lacks transparency and appears to be unfair to homeowners.
Homeowners have until August to decide whether to be part of the
settlement.
A hearing on the settlement agreement was set to be held before a
federal judge, Eldon Fallon, on July 14 in New Orleans. The
proposed settlement was announced last month.
"It is standard practice for agreements such as these to be
reviewed by the court for fairness, and this is exactly what is
going to occur here," said Michael Peterson, with Peterson &
Espino in Miami, who represents Banner Supply. "Importantly, no
homeowner, nor attorney representing any homeowner, has filed any
objection with the court to the settlement agreement."
Mr. Durkee, with Roberts & Durkee, said he's not filed an
objection because the standard for preliminary approval is so low.
"In the future, there will be another opportunity to object to
final approval. Legally, an objection at final approval has a
greater chance of being granted," he said.
More than half of his clients will be directly affected by the
proposed settlement with Banner, if approved, Mr. Durkee said.
Banner, the company's insurers and the homeowners' attorneys
involved in negotiating the settlement describe it as "fair,
reasonable and adequate."
Leonard A. Davis, a partner in Herman, Herman, Katz & Cotlar LLP
in New Orleans -- ldavis@hhkc.com -- who represented homeowners in
the negotiations, said he expected the judge to consider and
discuss at the July 14 hearing all the concerns that have been
raised about the agreement.
"Stay tuned to the hearing," he said.
Mr. Durkee and other attorneys who weren't involved in the
negotiations -- including Victor Diaz, a Miami Beach attorney who
also represents hundreds of Chinese drywall victims in Florida --
question why the settlement is solely funded by Banner's insurers
and why the supplier isn't being asked to "pitch in" any money.
Mr. Peterson, Banner's attorney, said the small company has
suffered greatly itself because of the tainted drywall it
acquired.
"Banner plans to pursue all available remedies and to seek
recovery of the substantial damages Banner has suffered both to
Banner's business and Banner's 58-year reputation in the
construction industry from all parties who are responsible for
such damages," he said.
More than 20 builders and a group of installers have filed motions
objecting to the proposed settlement.
In its objection, Lennar Homes Inc., headquartered in Miami,
argues it has spent tens of millions of dollars repairing hundreds
of homes that had defective Chinese drywall supplied by Banner and
that as a result, it is the largest member of the settlement
class, stepping into the shoes of its home buyers in property
damage claims.
"Lennar was not informed of or even provided a copy of the
proposed Banner settlement agreement until after it was executed,"
the court filing says.
At a court hearing last month, Hilarie Bass, a Miami attorney
representing Lennar and a steering committee for home builders
involved in the case, said, "I understand it's a complicated deal.
It may be the best deal possible. But I can assure you, it is
much easier to cut a deal when you're excluding one of the most
important classes or subclasses of relevant interested parties,
and that's what I believe has been done."
Other builders that haven't fixed homes with Chinese drywall fear
"they have nothing to gain and everything to lose" by
participating in the proposed settlement. As part of the
settlement, it appears builders would forego any right to
settlement funds and release claims against all other parties,
except manufacturers, an attorney for Excel Construction of
Southwest Florida Inc. argues in a court filing.
There are still so many unanswered questions for all parties
involved in the lawsuit, Mr. Durkee said.
Those questions include how many homeowners will receive money
from the settlement and exactly how much they'll get.
From 2004 to 2008, it's estimated that 60,000 to 100,000 homes
were built throughout the country using the defective Chinese
drywall from a number of suppliers. The Banner settlement could
cover thousands of people in Florida.
The cost to repair Mrs. Rodriguez's 2,000-square-foot home in East
Naples could be as much as $200,000. That amount doesn't include
other damages her family has suffered, including paying rent for
another home because they can't live in the one they bought.
Nicole and her husband, Leo, 38, moved out of their three-bedroom
villa off Sanctuary Drive more than a year ago after discovering
the Chinese drywall. Their son spent the first 2-1/2 years of his
life living in the home before the couple realized it was the root
of their many problems, from corroded air-conditioning coils to
damaged electrical wiring.
"I can tell you my son has battled asthma and respiratory problems
since he was born," Mrs. Rodriguez said. "If you are breathing
toxic chemicals as a newborn, what is that going to do to you?"
The Banner settlement may cover less than 5% of the cost of
repairing the Rodriguez home.
"The ultimate objective of this would be to get these people back
in their homes," Mr. Durkee said. "We are hopeful and we are
fighting at least for the minimum of trying to get these folks'
houses back."
Though Banner isn't the only company to blame for the Chinese
drywall, some homeowners fear it will be the only company that
will step to the plate to help them fix their problems.
Town Hall on Chinese Drywall
Mrs. Rodriguez is a student and a waitress; her husband is a
firefighter. They've struggled to pay rent, while trying to keep
up with a mortgage and the monthly fees they're charged for owning
a home in Blue Heron. They bought their home in 2007.
"We were trying to do the right thing, live the American dream,
buy a house," Mrs. Rodriguez said. "We did the right thing. We
always paid our mortgage on time, Then it all came around to bite
us."
For the Rodriguez family and other Chinese drywall victims, the
clock is ticking.
"Some of these victims are going to start losing their homes,"
Mr. Durkee said. "Some of the victims are going to have to live
in these homes because they don't want to go into foreclosure and
therefore they are going to get sick."
When the proposed settlement was announced, Judge Fallon ordered
that all state court cases involving Banner be halted. That put
the Rodriguez case, pending in Collier Circuit Court, on hold.
Attorneys have filed objections to the judge's order, saying it
was a dangerous precedent and not legally appropriate.
"Justice delayed is justice denied," said Mr. Diaz, the Miami
Beach attorney with V.M. Diaz & Partners representing Chinese
drywall victims in Florida.
It's still unclear whether homeowners will be able to pursue their
cases in state court if they opt out of the federal class-action
settlement.
"Ultimately, that will be determined by the court," Mr. Diaz said.
CITIMORTGAGE: Sued Over Foreclosures of Servicemembers' Homes
-------------------------------------------------------------
Iulia Filip at Courthouse News Service reports that a federal
class action accuses CitiMortgage of illegally foreclosing on the
homes of "thousands" of military men and women on active duty, in
violation of the Servicemembers Civil Relief Act. The lead
plaintiff, an Army sergeant, says CitiMortgage filed a false
affidavit stating that he "was not on active duty," though he was,
and was "on lock down," and had no way to communicate with the
outside world.
"This was not an isolated incident," Sgt. Jorge Rodriguez says.
"From Dec. 19, 2003 to date CitiMortgage initiated thousands of
foreclosure proceedings across the United States without adequate
safeguards to ensure that servicemembers on active duty were not
targeted by CitiMortgage's foreclosures."
Sergeant Rodriguez Rodriguez bought a house in Del Valle, Texas in
2003, before he entered military service. CitiMortgage, which
took over his loan from another mortgage company, foreclosed on
and sold his home in 2006, when "Sergeant Rodriguez was engaged in
a period of military service in the Texas Army National Guard or
was otherwise entitled to the protections of the Servicemembers
Civil Relief Act," he says in his complaint.
"Sergeant Rodriguez was ordered to active duty in support of
Operation Iraqi Freedom on January 6, 2006," the complaint states.
"His period of active military service began February 1, 2006. On
February 4, 2006, he was ordered to Fort Hood for mission training
in dessert and urban warfare tactics, including how to respond to
I.E.D. attacks, how to handle enemy ambushes, and how to clear
buildings of enemy combatants. During training, Sergeant
Rodriguez could not leave the base and had no communication with
the outside world. He describes the training environment as being
'on lock down.'
"While Sergeant Rodriguez was on lock down training at Fort Hood,
CitiMortgage initiated foreclosure proceedings against his
property and sold it at a foreclosure sale on May 2, 2006. The
foreclosure sale was not conducted pursuant to a court order and
was not approved by a court. That same day, CitiMortgage's
lawyers filed an affidavit in the real property records of Travis
County, Texas, stating that Sergeant Rodriguez was 'not on active
duty with any branch of the Armed Forces of the United States or
w[as] not protected by the Servicemembers Civil Relief Act.' Those
statements were false."
Sergeant Rodriguez completed his tour in Iraq in 2007, earning
several distinctions for honorable service, then came home to find
that CitiMortgage had foreclosed on and sold his house.
He adds that CitiMortgage sold the house for $13,000 more than he
owed on it, but never paid him the difference.
He says he was unable to make his mortgage payments while on
active duty.
"Serving in the Armed Forces of the United States often
compromises the ability of servicemembers to fulfill their
financial obligations and to assert their legal rights.
Recognizing the hardships faced by servicemembers serving on
active duty, Congress has long recognized the need for legislation
to protect servicemembers," the complaint states.
President George W. Bush signed the Servicemembers Civil Relief
Act into law in December 2003. It expanded the Soldiers' and
Sailors' Civil Relief Act of 1940.
"The purpose of the act is 'to provide for, strengthen and
expedite the national defense through protection extended by this
act . . . to servicemembers of the United States to enable such
persons to devote their entire energy to the defense needs of the
nation,'" the complaint states.
"The SCRA accomplishes this goal by providing for the 'temporary
suspension of judicial and administrative proceedings and
transactions that may adversely affect the civil rights of
servicemembers during their military service.'"
The SCRA, which protects active members of the Army, Navy, Air
Force, Marine Corps, Coast Guard and the National Guard, sets a 6
percent cap on pre-service loans and bans foreclosures against
active service members' properties without court approval, among
other provisions.
"Specifically, lenders may not foreclose on a covered
servicemember's mortgage while he or she is on active duty, or
within a specified grace period thereafter, without court
approval. Any such prohibited foreclosure, sale or seizure of
property is invalid under the SCRA," the complaint states.
In July 2008, the grace period was extended to 9 months.
Sergeant Rodriguez claims that "CitiMortgage foreclosed upon
Sergeant Rodriguez's property, and on the property of other class
members, during their period of active military service or within
the applicable grace period thereafter," without a court order or
written waiver.
Sergeant Rodriguez seeks class certification, compensatory and
punitive damages for unlawful foreclosure of service members'
property and an order restoring possession of the properties
foreclosed in violation of the SCRA.
His lead counsel is Scott Bursor with Bursor & Fisher.
CLASSMATES.COM: Class Action Settlement Gets Temporary Approval
---------------------------------------------------------------
Wendy Davis, writing for MediaPost News, reports that a federal
judge has tentatively approved a revised settlement of a class-
action lawsuit against Classmates.com that calls for the company
to pay up to $15 each to individual members.
But the settlement contains a big catch: It caps damages at
$2.5 million. That maximum means that any individual's rebate
will depend on how many of Classmate's 60 million users put in
claims on the fund. If all of them make claims, they will receive
only 4 cents each.
"In short, the revised settlement will provide meaningful cash
relief only if all but a miniscule fraction of class members fail
to make claims," U.S. District Court Judge Richard Jones in
Seattle wrote. "This is a significant shortcoming."
Still, Judge Jones granted the settlement preliminary approval,
stating that it marked an improvement over a previous deal that
would have given many members "coupons" they could apply toward
subscription fees.
The deal would resolve a 2009 lawsuit alleging that United
Online's Classmates.com tricked people into purchasing "gold"
premium memberships by sending deceptive e-mail ads. The messages
allegedly told recipients they were being sought out by former
schoolmates.
The prior agreement, which Judge Jones scuttled, called for
Classmates to pay $3 each to the estimated 3.16 million users who
purchased premium memberships after allegedly receiving such
messages. Classmates, which recently rebranded as MemoryLane.com,
also agreed to provide other members with $2 credits toward the
purchase of a gold membership.
When Judge Jones rejected that deal in March, he wrote that $2
"will either go unused, or it will transform a non-paying
registered user into a paying Classmates customer."
FEDERATED PAYMENTS: Committed Tortious Acts in Ill., Suit Says
--------------------------------------------------------------
Mark Slutsky, on behalf of plaintiff and the class defined below
v. Federated Payments Systems, LLC and Federated Payments Systems
USA, Inc., Case No. 2011-CH-24437 (Ill. Cir. Ct., Cook Cty.,
July 12, 2011) is brought to secure redress from unlawful credit
and collection practices by the Defendants in violation of the
Telephone Consumer Protection Act. The Plaintiff contends that
the TCPA restricts the use of automated equipment to dial cellular
telephones.
Mr. Slutsky is a resident of the Chicago Metro area, in Illinois.
The Defendants are New York limited liability corporations with
principal offices in Melville, New York. Mr. Slutsky asserts that
the Defendants are related corporations, which do businesses using
the telephone number 866-912-8771 without clearly distinguishing
which entity, or both, is legally responsible for the number.
The Plaintiff is represented by:
Daniel A. Edelman, Esq.
Cathleen M. Combs, Esq.
James O. Latturner, Esq.
Zachary A. Jacobs, Esq.
EDELMAN, COMBS, LATTURNER & GOODWIN, L.L.C.
120 S. LaSalle Street, 18th Floor
Chicago, IL 60603
Telephone: (312) 739-4200
Facsimile: (312) 419-0379
E-mail: courtecl@edcombs.com
ccombs@edcombs.com
jlatturner@edcombs.com
FEDEX CORP: Appeal in "Anfinson" Suit Remains Pending
-----------------------------------------------------
FedEx Corporation's appeal in the lawsuit captioned Anfinson v.
FedEx Ground Package System, Inc., remains pending, according to
the Company's July 12, 2011, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended May 31,
2011.
FedEx Ground Package System, Inc., one of FedEx Corp.'s primary
operating companies, is involved in numerous class-action lawsuits
(including 30 that have been certified as class actions),
individual lawsuits and state tax and other administrative
proceedings that claim that the company's owner-operators should
be treated as employees, rather than independent contractors.
Most of the class-action lawsuits were consolidated for
administration of the pre-trial proceedings by a single federal
court, the U.S. District Court for the Northern District of
Indiana.
In January 2008, one of the contractor-model lawsuits that is not
part of the multidistrict litigation, Anfinson v. FedEx Ground
Package System, Inc., was certified as a class action by a
Washington state court. The plaintiffs in Anfinson represent a
class of single-route, pickup-and-delivery owner-operators in
Washington from December 21, 2001, through December 31, 2005, and
allege that the class members should be reimbursed as employees
for their uniform expenses and should receive overtime pay. In
March 2009, a jury trial in the Anfinson case was held, and the
jury returned a verdict in favor of FedEx Ground, finding that all
320 class members were independent contractors, not employees.
The plaintiffs appealed the verdict. In December 2010, the
Washington Court of Appeals reversed and remanded for further
proceedings, including a new trial. The Company filed a motion to
reconsider, and this motion was denied. In March 2011, the
Company filed a discretionary appeal with the Washington Supreme
Court.
FEDEX CORP: Awaits Court Decision in Paystub Suit
-------------------------------------------------
FedEx Corporation is awaiting a court decision in a class action
lawsuit filed by a former courier seeking damages on behalf of
herself and all other FedEx Express employees in California that
allegedly received noncompliant paychecks, according to the
Company's July 12, 2011, Form 10-K filing with the U.S. Securities
and Exchange Commission for the year ended May 31, 2011.
A federal court in California ruled in April 2011 that paystubs
for certain Federal Express Corporation employees in California
did not meet that state's requirements to reflect pay period begin
date, total overtime hours worked and the correct overtime wage
rate. The ruling came in a class action lawsuit filed by a former
courier seeking damages on behalf of herself and all other FedEx
Express employees in California that allegedly received
noncompliant paychecks. The court certified the class in June
2011. The court has ruled that FedEx Express is liable to the
State of California, and there will be a ruling as to whether
FedEx Express is liable to class members who can prove they were
injured by the paystub deficiencies. The judge has not yet
decided on the amount, if any, of liability to the State of
California or to the class, but has wide discretion.
The Company says a material loss in this matter is reasonably
possible but not estimable because both the number of class
members and the amount, if any, to which some class members may be
entitled is uncertain, and in ruling the judge may consider some
or all of the following: whether employees suffered injury;
whether remedial action was undertaken; whether there was
knowledge of any violation; whether any violation was intentional;
and whether any award would be unjust under the circumstances.
FEDEX CORP: Continues to Defend "Bibo" Suit in California
---------------------------------------------------------
FedEx Corporation continues to defend a class action lawsuit
against a subsidiary in California, according to the Company's
July 12, 2011, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended May 31, 2011.
In April 2009, in Bibo v. Federal Express Corporation, a
California federal court granted class certification, certifying
several subclasses of FedEx Express couriers in California from
April 14, 2006, (the date of the settlement of the Foster class
action) to the present. The plaintiffs allege that FedEx Express
violated California wage-and-hour laws after the date of the
Foster settlement. In particular, the plaintiffs allege, among
other things, that they were forced to work "off the clock" and
were not provided with required meal breaks or split-shift
premiums. The U.S. Court of Appeals for the Ninth Circuit has
refused to accept a discretionary appeal of the class
certification order at this time. In April 2011, the court
granted the Company's motion for partial summary judgment
regarding the proper method for calculating a split-shift premium,
effectively eliminating the certified subclass for split-shift
premiums.
Although the claims for alleged off-the-clock work and missed meal
periods are still pending, the Company does not believe that a
material loss is reasonably possible with respect to these
remaining claims. The Company has denied any liability and
intends to vigorously defend itself in this matter.
FEDEX CORP: "Rascon" Suit Still Pending in Colorado
---------------------------------------------------
A class action lawsuit filed against a subsidiary in Colorado
remains pending, according to FedEx Corporation's July 12, 2011,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended May 31, 2011.
FedEx Ground Package System, Inc., one of FedEx Corp.'s primary
operating companies, is involved in numerous class-action lawsuits
(including 30 that have been certified as class actions),
individual lawsuits and state tax and other administrative
proceedings that claim that the company's owner-operators should
be treated as employees, rather than independent contractors.
Most of the class-action lawsuits were consolidated for
administration of the pre-trial proceedings by a single federal
court, the U.S. District Court for the Northern District of
Indiana.
In August 2010, another one of the contractor-model lawsuits that
is not part of the multidistrict litigation, Rascon v. FedEx
Ground, was certified as a class action by a Colorado state court.
The plaintiff in Rascon represents a class of single-route,
pickup-and-delivery owner-operators in Colorado who drove vehicles
weighing less than 10,001 pounds at any time from August 27, 2005,
through the present. The lawsuit seeks unpaid overtime
compensation, and related penalties and attorneys' fees and costs,
under Colorado law. The Company's applications for appeal
challenging this class certification decision have been rejected.
No further updates were reported in the Company's latest SEC
filing.
Other contractor-model cases that are not or are no longer part of
the multidistrict litigation are in varying stages of litigation.
FEDEX CORP: Files Petition for Mandamus in Contractor Suits
-----------------------------------------------------------
FedEx Corporation filed a petition for mandamus to the U.S. Court
of Appeals for the Seventh Circuit asking certain cases to be
returned to the multidistrict litigation court for issuance of a
final judgment, according to the Company's July 12, 2011, Form
10-K filing with the U.S. Securities and Exchange Commission for
the year ended May 31, 2011.
The Company's subsidiary, FedEx Ground Package System, Inc., is
involved in numerous class-action lawsuits, including 30 that have
been certified as class actions, individual lawsuits and state tax
and other administrative proceedings that claim that the company's
owner-operators should be treated as employees, rather than
independent contractors.
Most of the class-action lawsuits were consolidated for
administration of the pre-trial proceedings by a single federal
court, the U.S. District Court for the Northern District of
Indiana. The multidistrict litigation court granted class
certification in 28 cases and denied it in 14 cases. On
December 13, 2010, the court entered an opinion and order
addressing all outstanding motions for summary judgment on the
status of the owner-operators (i.e., independent contractor vs.
employee). In sum, the court has now ruled on the Company's
summary judgment motions and entered judgment in favor of FedEx
Ground on all claims in 20 of the 28 multidistrict litigation
cases that had been certified as class actions, finding that the
owner-operators in those cases were contractors as a matter of the
law of the following states: Alabama, Arizona, Georgia, Indiana,
Kansas (the court previously dismissed without prejudice the
nationwide class claim under the Employee Retirement Income
Security Act of 1974 based on the plaintiffs' failure to exhaust
administrative remedies), Louisiana, Maryland, Minnesota, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Texas, Utah, West Virginia and
Wisconsin. The plaintiffs filed notices of appeal in all of these
20 cases.
In the other eight certified class actions in the multidistrict
litigation, the court ruled in favor of FedEx Ground on some of
the claims and against FedEx Ground on at least one claim in three
of the cases (filed in Kentucky, Nevada and New Hampshire) and
then remanded all eight cases back to district court in the
following states for resolution of the remaining claims: Arkansas,
California, Florida, Kentucky, Nevada, New Hampshire and Oregon
(two certified classes). In January 2011, the Company asked the
court to issue final judgments in these eight cases, and the court
denied the motion. In July 2011, the Company filed a petition for
mandamus to the Seventh Circuit asking the appeals court to
require these cases to be returned to the multidistrict litigation
court for issuance of a final judgment so that all appeals of the
December 2010 summary judgment rulings would be heard by the
Seventh Circuit.
While the granting of summary judgment in favor of FedEx Ground by
the multidistrict litigation court in 20 of the 28 cases that had
been certified as class actions remains subject to appeal, the
Company believes that it significantly improves the likelihood
that the Company's independent contractor model will be upheld.
Adverse determinations in the remaining matters related to FedEx
Ground's independent contractors, however, could, among other
things, entitle certain of the Company's contractors and their
drivers to the reimbursement of certain expenses and to the
benefit of wage-and-hour laws and result in employment and
withholding tax and benefit liability for FedEx Ground, and could
result in changes to the independent contractor status of FedEx
Ground's owner-operators in certain jurisdictions. The Company
believes that FedEx Ground's owner-operators are properly
classified as independent contractors and that FedEx Ground is not
an employer of the drivers of the company's independent
contractors. While it is reasonably possible that potential loss
in some of these lawsuits or such changes to the independent
contractor status of FedEx Ground's owner-operators could be
material, the Company says it cannot yet determine the amount or
reasonable range of potential loss. A number of factors
contribute to this. The number of plaintiffs in these lawsuits
continues to change, with some being dismissed and others being
added and, as to new plaintiffs, no discovery has been conducted.
In addition, the parties have not yet conducted any discovery into
damages, which could vary considerably from plaintiff to
plaintiff. Further, the range of potential loss could be impacted
considerably by future rulings on the merits of certain claims and
FedEx Ground's various defenses, and on evidentiary issues. In
any event, the Company does not believe that a material loss is
probable in these matters.
FEDEX CORP: Hearing on "Taylor" Suit Accord Anticipated in 2012
---------------------------------------------------------------
A hearing to approve an agreement to settle a lawsuit against
FedEx Corporation's subsidiary is anticipated to occur during the
first half of fiscal 2012, according to the Company's July 12,
2011, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended May 31, 2011.
In September 2009, in Taylor v. FedEx Ground Package System, Inc.,
a California state court granted class certification, certifying a
class of all current and former drivers employed by FedEx Freight
in California who performed linehaul services since June 2003.
The plaintiffs alleged, among other things, that they were forced
to work "off the clock" and were not provided with required rest
or meal breaks.
The Company entered into a tentative settlement agreement with the
plaintiffs in June 2011 for an immaterial amount, and the court's
hearing to approve the settlement is anticipated to occur during
the first half of fiscal 2012.
FEDEX CORP: Unit Settles Wage and Hour Suit in Massachusetts
------------------------------------------------------------
A FedEx Corporation subsidiary has reached an agreement to settle
a lawsuit alleging wage and hour law violations in Massachusetts,
according to the Company's July 12, 2011, Form 10-K filing with
the U.S. Securities and Exchange Commission for the year ended May
31, 2011.
In September 2008, in Tidd v. Adecco USA, Kelly Services and FedEx
Ground Package System, Inc., a Massachusetts federal court
conditionally certified a class limited to individuals who were
employed by two temporary employment agencies and who worked as
temporary pickup-and-delivery drivers for FedEx Ground in the New
England region within the past three years. Potential claimants
must voluntarily "opt in" to the lawsuit in order to be considered
part of the class. In addition, in the same opinion, the court
granted summary judgment in favor of FedEx Ground with respect to
the plaintiffs' claims for unpaid overtime wages. The court has
since granted judgment in favor of the other two defendants with
respect to the overtime claims. Accordingly, the conditionally
certified class of plaintiffs was limited to a claim of failure to
pay minimum wage due under the federal Fair Labor Standards Act.
During the fourth quarter of fiscal 2011, FedEx Ground reached an
agreement to settle this action for an immaterial amount.
FRED MEYER: Employees File Class Action Over Sexual Harassment
--------------------------------------------------------------
Kristian Foden-Vencil, writing for OPB News, reports that three
Fred Meyer employees have filed a class-action lawsuit against the
company over a sexual harassment claim. The U.S. Equal
Opportunity Employment Commission is handling the plaintiff's
case.
EEOC lawyer Bill Tamayo says there's little question at this point
that a Fred Meyer customer named Charles Janac repeatedly groped
plaintiff Laura Morrow and other workers at the store.
"He was convicted in December of 2009 of criminal charges that
were filed by our charging party, Miss Morrow and other employees.
And the harassing customer was convicted on 2 counts of sexual
abuse in the 3rd degree," Mr. Tamayo explained.
But Mr. Tamayo's filing for this case alleges store managers
failed to talk to the women to get details. It also claims
managers told workers to go on serving the customer.
A spokeswoman for Fred Meyer says the company is reviewing the
lawsuit, and could not comment yet. But she says store policy
clearly states store managers can tell a customer to leave and not
come back for harassing staff.
The suit seeks an unspecified amount of money for punitive
damages.
IMMUCOR INC: Faces Suit Over Proposed Sale to TPG Partners
----------------------------------------------------------
Hilary Kramer v. Immucor, Inc., Joseph E. Rosen, Joshua H. Levine,
James F. Clouser, Paul V. Holland, Ronny B. Lancaster, Paul D.
Mintz, G. Mason Morfit, Chris E. Perkins, TPG Capital, TPG
Partners VI, L.P., IVD Holdings Inc. and IVD Acquisition
Corporation, Case No. 2011CV203124 (Ga. Super. Ct., Fulton Cty.,
July 12, 2011) is a shareholder class action brought on behalf of
Immucor's public shareholders.
The proposed buyout of Immucor by TPG Partners (i) for $27-per-
share price is unfair, and (ii) is designed to benefit Immucor's
insiders to the detriment of Plaintiff and the Class, the lawsuit
alleges.
Ms. Kramer is an Immucor shareholder.
Immucor, a Georgia corporation, manufactures and sells reagents
and systems used by hospitals, reference laboratories and donor
centers to detect and identify certain properties of the cell and
serum components of blood prior to transfusion. The individual
defendants are Immucor directors. TPG is a private investment
firm that has public and private investments executed through
leveraged buyouts, recapitalizations and restructurings. IVD
Holdings, a Delaware corporation, and IVD Acquisition, a Georgia
corporation, are affiliated with TPG and are being used to
facilitate the merger with Immucor.
The Plaintiff is represented by:
Martin D. Chitwood, Esq.
Christi A. Cannon, Esq.
Molly A. Havig, Esq.
CHIT WOOD HARLEY HARNES LLP
1230 Peachtree Street, NE
2300 Promenade II
Atlanta, GA 30309
Telephone: (404) 873-3900
Facsimile: (404) 876-4476
E-mail: mchitwood@chitwoodlaw.com
ccannon@chitwoodlaw.com
mhavig@chitwoodlaw.com
- and -
Mark C. Gandy, Esq.
James S. Notis, Esq.
Charles A. Germershausen, Esq.
GARDY & NOTIS, LLP
560 Sylvan Avenue
Englewood Cliffs, NJ 07632
Telephone: (201) 567-7377
Facsimile: (201) 567-7337
E-mail: mgardy@gardylaw.com
jnotis@gardylaw.com
cgermershausen@gardylaw.com
KNOWLES PUBLISHING: Sued Over Unauthorized Automated Calls
----------------------------------------------------------
Mark Slutsky, on behalf of plaintiff and the class defined below
v. Knowles Publishing, Inc., Case No. 2011-CH-24439 (Ill. Cir.
Ct., Cook Cty., July 12, 2011) accuses the Defendant of violating
the Telephone Consumer Protection Act by placing an automated
telephone call on the Plaintiff's cell phone. The Plaintiff
contends that he did not authorize placement of such calls.
Mr. Slutsky is a resident of the Chicago Metro area, in Illinois.
Knowles Publishing is a Texas corporation with principal offices
located at 5535 Airport Freeway, Fort Worth, Texas 76111.
The Plaintiff is represented by:
Daniel A. Edelman, Esq.
Cathleen M. Combs, Esq.
James O. Latturner, Esq.
Zachary A. Jacobs, Esq.
EDELMAN, COMBS, LATTURNER & GOODWIN, L.L.C.
120 S. LaSalle Street, 18th Floor
Chicago, IL 60603
Telephone: (312) 739-4200
Facsimile: (312) 419-0379
E-mail: courtecl@edcombs.com
ccombs@edcombs.com
jlatturner@edcombs.com
KRAFT FOODS: Wage Class Action Can Advance in State Court
---------------------------------------------------------
Jack Bouboushian at Courthouse News Service reports that a class
action seeking back pay from Kraft Foods Global for the time
workers spend donning and doffing protective gear can advance in
state court, a federal judge ruled.
Lead plaintiff Steven Whitmore filed suit in Cook County Circuit
Court, seeking wages for time spent putting on and taking off
equipment to work at Kraft's Chicago plant.
At the start of each work day, Mr. Whitmore said he must put on
"safety footwear, white frocks, hairnets, earplugs, hardhats, bump
hats and protective aprons" before walking to his work location.
At the end of the work day, Mr. Whitmore returns to that room
where he donned the equipment and undress.
Kraft does not pay employees for the time spent donning and
doffing protective work gear, and the workers' union contract
specifically states that employees cannot seek compensation for
"time spent in changing clothes, washing and engaging in any other
non-productive activities at the beginning or end of each
workday."
Mr. Whitmore's complaint, however, alleges violations of the
Illinois Minimum Wage Act and the Illinois Wage Payment and
Collection Act, rather than the collective bargaining agreement
(CBA).
Kraft removed the complaint to federal court, which delayed the
case as the United States Court of Appeals for the Seventh Circuit
resolved a similar dispute also involving Kraft, Spoerle v. Kraft.
By August 2010, the federal appeals court decided that a section
of federal labor law governing CBAs does not pre-empt a Wisconsin
law mandating wages for doffing and donning gear.
As such, U.S. District Judge Edmond Chang agreed to remand
Mr. Whitmore's case to state court.
"In other words, a CBA cannot trump rights to which employees are
entitled under state law: 'Management and labor acting jointly
(through a CBA) have no more power to override state substantive
law than they have when acting individually,'" Judge Chang wrote.
Though Kraft argued that Illinois does not have a relevant law on
the topic, compared to Wisconsin, Judge Chang rejected the
contention that "silence automatically equals non-coverage."
"Federal preemption of state laws has generally applied when
'state laws create a risk of taking away employee rights provided
by collective bargaining . . . not when state laws add a right
that is independent from the agreement," the 14-page ruling
states.
Where this is not the case, and where uniformity of interpretation
is not at issue, the Fair Labor Standards Act "does not convert
state law complaints into federal claims merely because the
parties have entered into a CBA."
A copy of the Memorandum Opinion and Order in Whitmore v. Kraft
Foods Global, Inc., Case No. 10-cv-02518 (N.D. Ill.), is available
at:
http://www.courthousenews.com/2011/07/13/whitmore.pdf
LIVING ESSENTIALS: Sued Over Bogus Claims on Hangover Medicines
---------------------------------------------------------------
Courthouse News Service reports that a Los Angeles Superior Court
class action claims Living Essentials sells "hangover medicines"
with bogus claims that they will prevent hangovers.
MEIJER INC: Recalls 13T Touch Point Oscillating Ceramic Heaters
---------------------------------------------------------------
* Additional Retail Sales Prompt CPSC and Meijer to Reannounce
Touch Point Heater Recall; Fire Hazard Posed
The U.S. Consumer Product Safety Commission, in cooperation with
Meijer Inc., of Grand Rapids, Michigan, announced a voluntary
recall of about 13,000 units of Touch Point oscillating ceramic
heaters; 6,700 units were originally recalled in November 2010.
Consumers should stop using recalled products immediately unless
otherwise instructed. It is illegal to resell or attempt to
resell a recalled consumer product.
The oscillating mechanism in the heaters can short out, posing a
fire hazard to consumers.
Meijer has received two reports of incidents involving fires that
resulted in property damage. No injuries have been reported.
This announcement involves previously recalled Touch Point
oscillating ceramic heaters with model number PTC-902. The
grey/silver color heaters are about 10-inches tall, have a black
screen across the front and controls on the top. The model number
and UPC code 7-60236-58339 are printed on a metal label/plate on
the bottom of the heater. Some models have an additional digit in
the UPC code, making it a 12-digit code. In addition, some
heaters will have a UPC code 7-13733-29222 sticker on the bottom
of the packaging box. A picture of the recalled products is
available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml11/11277.html
The recalled products were manufactured in China and sold at
Meijer stores in Illinois, Indiana, Kentucky, Michigan and Ohio
from October 2009 through April 2011 for about $25. Discount
retailers, dollar stores, flea markets and retail liquidators
nationwide sold the heaters from November 2010 through April 2011
for various prices. The heaters were sold after the original
recall was announced in November 2010.
Consumers should immediately stop using the recalled heaters and
return them to the nearest Meijer retail store for a full refund
of the purchase price. Consumers who purchased heaters from other
retailers should contact Meijer to arrange a refund. For
additional information, contact Meijer at (800) 927-8699 between
9:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday, or
visit the firm's Web site at http://www.meijer.com/
MICRON TECHNOLOGY: Appeal in Quebec Suit Still Pending
------------------------------------------------------
An appeal in the price-fixing lawsuit against Micron Technology,
Inc., in Quebec remains pending, according to the Company's
July 12, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended June 2, 2011.
Three putative class action lawsuits alleging price-fixing of DRAM
products have been filed against the Company in Quebec, Ontario,
and British Columbia, Canada, on behalf of direct and indirect
purchasers, asserting violations of the Canadian Competition Act
and other common law claims. The claims were initiated between
December 2004 (British Columbia) and June 2006 (Quebec). The
plaintiffs seek monetary damages, restitution, costs, and
attorneys' fees. The substantive allegations in these cases are
similar to those asserted in the DRAM antitrust cases filed in the
United States. Plaintiffs' motion for class certification was
denied in the British Columbia and Quebec cases in May and June
2008, respectively. Plaintiffs subsequently filed an appeal of
each of those decisions. On November 12, 2009, the British
Columbia Court of Appeal reversed the denial of class
certification and remanded the case for further proceedings. The
appeal of the Quebec case is still pending.
The Company says it is unable to predict the outcome of these
lawsuits and, therefore, cannot estimate the range of possible
loss, except as noted in the U.S. indirect purchasers cases. The
final resolution of these alleged violations of antitrust laws
could result in significant liability and could have a material
adverse effect on the Company's business, results of operations or
financial condition.
MICRON TECHNOLOGY: Awaits OK of Settlements in Price-Fixing Suits
-----------------------------------------------------------------
Micron Technology, Inc., is awaiting court approval of settlements
of lawsuits alleging violations of antitrust laws, according to
the Company's July 12, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended June 2,
2011.
At least 68 purported class action price-fixing lawsuits have been
filed against the Company and other DRAM suppliers in various
federal and state courts in the United States and in Puerto Rico
on behalf of indirect purchasers alleging price-fixing in
violation of federal and state antitrust laws, violations of state
unfair competition law, and/or unjust enrichment relating to the
sale and pricing of DRAM products during the period from April
1999 through at least June 2002. The complaints seek joint and
several damages, trebled, in addition to restitution, costs and
attorneys' fees. A number of these cases have been removed to
federal court and transferred to the U.S. District Court for the
Northern District of California for consolidated pre-trial
proceedings. In July 2006, the Attorneys General for
approximately forty U.S. states and territories filed suit in the
U.S. District Court for the Northern District of California. The
complaints allege, among other things, violations of the Sherman
Act, Cartwright Act, and certain other states' consumer protection
and antitrust laws and seek joint and several damages, trebled, as
well as injunctive and other relief. On October 3, 2008, the
California Attorney General filed a similar lawsuit in California
Superior Court, purportedly on behalf of local California
government entities, alleging, among other things, violations of
the Cartwright Act and state unfair competition law. On June 23,
2010, the Company executed a settlement agreement resolving these
purported class-action indirect purchaser cases and the pending
cases of the Attorneys General relating to alleged DRAM price-
fixing in the United States. Subject to certain conditions,
including final court approval of the class settlements, the
Company agreed to pay a total of approximately $67 million in
three equal installments over a two-year period.
The Company says it is unable to predict the outcome of these
lawsuits and, therefore, cannot estimate the range of possible
loss, except as noted in the U.S. indirect purchasers cases. The
final resolution of these alleged violations of antitrust laws
could result in significant liability and could have a material
adverse effect on the Company's business, results of operations or
financial condition.
MICRON TECHNOLOGY: Gets Final OK of Accord in Shareholder Suit
--------------------------------------------------------------
The U.S. District Court for the District of Idaho granted final
approval on April 2011 of the settlement in the shareholder
lawsuit against Micron Technology, Inc., according to the
Company's July 12, 2011, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended June 2, 2011.
On February 24, 2006, a putative class action complaint was filed
against the Company and certain of its officers in the U.S.
District Court for the District of Idaho alleging claims under
Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended, and Rule 10b-5 promulgated thereunder. Four
substantially similar complaints subsequently were filed in the
same Court. The cases purport to be brought on behalf of a class
of purchasers of the Company's stock during the period
February 24, 2001, to February 13, 2003. The five lawsuits have
been consolidated and a consolidated amended class action
complaint was filed on July 24, 2006. The complaint generally
alleges violations of federal securities laws based on, among
other things, claimed misstatements or omissions regarding alleged
illegal price-fixing conduct. The complaint seeks unspecified
damages, interest, attorneys' fees, costs, and expenses. On
December 19, 2007, the Court issued an order certifying the class
but reducing the class period to purchasers of the Company's stock
during the period from February 24, 2001, to September 18, 2002.
On August 24, 2010, the Company executed a settlement agreement
resolving these purported class-action cases. Subject to certain
conditions, including final court approval of the class
settlement, the Company agreed to pay $6 million as its
contribution to the settlement. On April 28, 2011, the Court
entered final approval of the class settlement.
NAT'L FOOTBALL LEAGUE: Brady Plaintiffs Can Speak for Retirees
--------------------------------------------------------------
According to an article posted by Mike Florio at ProFootballTalk,
lawyer Michael Hausfeld, who represents the plaintiffs in the Carl
Eller class action, explained on July 8 at PFT Live that his
clients are in position to speak for the retired players because
the Tom Brady class action has no plaintiffs who are retired
players.
With one of the Brady plaintiffs -- Mike Vrabel -- reportedly
retiring, the Brady class action now has that base covered.
And so the Brady plaintiffs immediately should file a motion for
leave to amend the complaint to assert on behalf of Mr. Vrabel,
and, thus, on behalf of all retired players, any and all claims
that retired players may be able to assert.
Frankly, it's still doubtful that retired players have any claims
to assert. But to the extent that the Brady plaintiffs represent
all current and former players, the Brady class can settle all
claims without having to worry about the Eller plaintiffs screwing
up the process.
PRESCRIPTION DRUG RETAILERS: WLF Seeks Review of W.Va. AG's Case
----------------------------------------------------------------
John O'Brien, writing for Legal Newsline, reports that The
Washington Legal Foundation claims West Virginia Darrell McGraw is
acting like a class action lawyer and a decision saying otherwise
should be reviewed.
WLF was joined by the Allied Educational Foundation in an amicus
brief accepted last month by the U.S. Court of Appeals for the
Fourth Circuit, which ruled in May that Mr. McGraw's lawsuit
against a group of prescription drug retailers is not a class
action and should be heard in state court.
The group of pharmacies -- which includes Wal-Mart, Target, CVS,
Walgreen, Kroger and Kmart -- has petitioned for a review of the
decision by entire roster of Fourth Circuit judges. May's
decision was a 2-1 ruling.
WLF's brief says the decision put the Fourth Circuit in conflict
with a decision from the Fifth Circuit in Louisiana Attorney
General Buddy Caldwell's lawsuit against Allstate Insurance Co.
"The panel held that for a representative suit to constitute a
'class action' within the meaning of (the Class Action Fairness
Act), 'the representative party must be part of the class and
possess the same interest and suffer the same injury as the class
members,'" the brief says.
"Thus, the panel held, because the West Virginia Attorney General
does not possess claims typical of those held by consumers who
allegedly were overcharged by CVS, this suit is not a 'class
action' as defined by (federal law). The Fifth Circuit has
concluded precisely the opposite."
Mr. Caldwell alleged Allstate was cheating its policyholders, and
the Fifth Circuit ruled the policyholders were the real parties in
interest in the case. That meant the lawsuit was removable to
federal court under CAFA.
Mr. McGraw's case alleges the drug stores didn't pass savings on
generic drugs on to consumers.
"En banc review is warranted to allow the Court to determine
whether it really intended to create such a direct conflict with
another federal circuit court," the brief says.
The brief adds that no defendant in the case is a citizen of West
Virginia -- "Protecting out-of-state defendants . . . from the
discriminatory treatment it was feared they would suffer in state
courts was one of the Framers' (of the Constitution) primary
rationales for establishing a federal court system and creating a
right of removal from state court."
WLF says its mission is to "maintain balance in the Courts and
help our government strengthen America's free enterprise system."
In its appeal brief, the group of pharmacies claimed Mr. McGraw's
lawsuit satisfies the jurisdictional requirements of the federal
CAFA.
"The AG's allegations make abundantly clear that more than $5
million and the interests of more than 100 persons are at issue.
If the rightful interests of the West Virginia consumers on whose
behalf the AG has brought suit are recognized, there also is
undeniably minimal diversity between at least some plaintiffs (who
are West Virginia citizens) and all defendants (as none of the
defendants reside in or is a citizen of West Virginia."
The pharmacies added that any consumer who was allegedly
overcharged is a real party in interest to the case.
The decision says the West Virginia statutes on which Mr. McGraw
relies contain none of the essential requirements for a class
action. Mr. McGraw is not designated as a member of the class and
he is not required to give notice to overcharged customers, the
decision says.
"Indeed, the West Virginia Attorney General's role here is more
analogous to the role of the EEOC or other regulator when it
brings an action on behalf of a large group of employees or a
segment of the public," the decision says. "Yet, the Supreme
Court has concluded that such a regulator's action is not a class
action of the kind defined in Rule 23."
Judge Ronald Lee Gilman dissented. Even though the action was
brought under state statutes, it doesn't take away the "essence"
of the case, he wrote.
"(T)he elements of numerosity, commonality, typicality and
adequacy of representation have not been specifically pleaded,"
Judge Gilman wrote. "But I submit that these are subsidiary
factors that do not detract from the essence of the action.
"They are, in other words, 'bells and whistles' whose absence in
the pleadings do not prevent the Attorney General's suit from
being considered a class action under CAFA."
Judge Gilman wrote that similar lawsuits filed by Mr. McGraw's
outside counsel in other states are undisputed class actions.
Mr. McGraw hired two private firms -- Bailey & Glasser and
DiTrapano Barrett & DiPiero -- for the case. The two firms have
contributed more than $60,000 to Mr. McGraw's campaign fund over
the years, including $11,800 for his 2008 race against Republican
Dan Greear.
Bailey & Glasser brought similar lawsuits in Michigan and
Minnesota. The Michigan suits were dismissed by a state judge
because the only specific pricing information was obtained by a
West Virginia whistleblower who worked at Kroger.
The Minnesota lawsuit, brought on behalf of unions that provide
health care for their members, was initially dismissed in
November 2009 by former U.S. District Judge James Rosenbaum, who
had harsh words for the plaintiffs attorneys.
Judge Rosenbaum was peeved that the complaint, filed against 13
defendants, only contained specific pricing information about two
of them.
"(T)his Complaint utterly fails to state a cause of action on any
basis. There are no, none, factual allegations touching any
defendant other than CVS and Walgreen's," Judge Rosenbaum said
Nov. 20, 2009.
"There being no facts from which a fact finder could infer any
liability concerning (the other defendants), and you asked me to
sustain a complaint based upon that. It's not only laughable,
it's absolutely reprehensible."
A federal magistrate judge is currently deciding if that lawsuit
will be remanded to a Minnesota court.
UNITED STATES: Aug. 12 Pigford Settlement Opt-Out Deadline Set
--------------------------------------------------------------
Ebony Horton, writing for Dothan Eagle, reports that a $1.25
billion class action lawsuit that could award thousands of dollars
to black farmers who were denied federal loans or claims by the
U.S. Department of Agriculture could affect hundreds of farmers in
the Wiregrass, according to a local attorney.
According to documents filed in the U.S. District Court of
Washington, D.C., black farmers have until Aug. 12 to either
object to the "Pigford II" class action settlement or speak at a
hearing relating to the black farmers' discrimination litigation
in Washington. According to a Web site --
http://www.BlackFarmerCase.com-- farmers eligible for the
settlement include those whose families farmed or attempted to
farm between Jan. 1, 1981, and Dec. 31, 1996, but were prevented
from applying for a USDA farm loan, denied a loan, or were given a
loan with unfair terms.
Farmers and their families are also eligible if they filed or
attempted to file a late claim between Oct. 13, 1999, and June 18,
2008, according to the Web site.
Final approval of the settlement is expected in Washington by
Sept. 1, and monies could be disbursed to class members sometime
between 2012 and 2013.
Eufaula attorney, Michael Rutland, who is listed on the Web site
with Eufaula attorney, Jimmy Calton, Jr., as local counsel on the
suit, said earlier there were about 1,700 to 1,800 claims filed in
Barbour County in relation to the case, while Alabama farmers make
up anywhere between 15,000 and 20,000 of the 66,000 that could be
affected.
Mr. Rutland said local counsel has traveled for training on how to
proceed with the claims.
WELLS FARGO: Settles MBS Securities Class Action for $125 Mil.
--------------------------------------------------------------
Alison Frankel, writing for Thomson Reuters, reports that every
case between investors who bought mortgage-backed securities and
the banks that issued and underwrote the instruments seems to
break new ground. In just the last few weeks, OTC has looked at
Bank of America's intriguing use of New York state trust laws as a
vehicle for its $8.5 billion settlement with bond investors and
Manhattan federal judge Jed Rakoff's certification of the first-
ever class of mortgage-backed securities investors in a
megabillion case against Merrill Lynch. Now comes word that Wells
Fargo and a group of underwriters have agreed to a $125 million
settlement of a class action brought by investors in 28 mortgage-
backed securities offerings. This deal is believed to be the
first MBS securities class action settlement.
The Wells Fargo settlement is vindication for the strategy of
class counsel from Bernstein Litowitz Bernstein & Grossmann.
Plaintiffs lawyers have brought MBS cases under a wide variety of
theories: state-court securities claims, state-court breach-of-
contract claims, and federal court fraud claims, among others.
They've sued to force issuers to "put back" underlying mortgage
loans that have gone into default; demanded banks buy back
allegedly deficient mortgage-backed bonds; asserted damages for
breaches of pooling and servicing agreements. I could go on, but
you get the idea: There's no definitive roadmap for investors even
to bring mortgage-backed securities cases, let alone to win them.
Bernstein Litowitz is, in the main, a securities class action
firm, so it's not surprising that it has styled MBS cases against
host of defendants -- including Goldman Sachs, Merrill Lynch,
Morgan Stanley, and JPMorgan -- as federal class actions.
Bernstein Litowitz's suits center on Section 11 of the 1933
Securities Act, which governs offering statements. And although
it's a good bet that Congress never dreamed of the complexities of
mortgage-backed trust certificates when Section 11 was drafted,
the law has certain provisions that make it a very smart vehicle
for MBS claims. First of all, investors don't have to show that
issuers intended to defraud the market. Section 11 instead holds
issuers to a strict liability standard, meaning investors just
have to show that an offering statement contained false
representations about the securities. And second, Section 11
permits investors to go after underwriters as well, under a due
diligence standard that requires a showing that the underwriters
didn't exercise reasonable care.
Lawyers for the defendants in the Wells Fargo MBS class action --
Munger, Tolles & Olson for Wells Fargo; Fried, Frank, Harris,
Shriver & Jacobson for the underwriters -- mounted the now-
standard challenge to the investors' standing, arguing that the
class can only bring claims based on offerings in which name
plaintiffs had invested. San Francisco federal judge Susan
Illston agreed, so the case was reduced from more than 50
offerings to 17, with the class appealing its standing to sue for
another 11 offerings. Bernstein Litowitz's initial claims against
the credit rating agencies were also dismissed. But last October,
Judge Lucy Koh (who had taken over the case) denied defense
motions to toss most of the class's claims against Wells Fargo and
the underwriters. At the time of the settlement, she hadn't ruled
on summary judgment and class certification motions.
Lead lawyers for all of the parties told OTC they couldn't
comment, and much of the discovery in the case was conducted under
a protective order. Bernstein Litowitz and lawyers for other
named plaintiffs, including Cohen Milstein Sellers & Toll and
Labaton Sucharow, undoubtedly looked at some of the mortgages
underlying the securities Wells Fargo offered. But because the
class action centered on Section 11-and not allegations that the
bank's trustee breached its contracts with investors -- they
didn't have to make the loan-by-loan analysis that investors in
put-back cases face (unless they're permitted to take a sampling
of loans).
There's no damages valuation in the public record, but considering
that the settlement covers 28 offerings (the 17 that withstood
Judge Koh's dismissal ruling and the 11 on appeal) with a face
value of $35 billion, it's pretty much a certainty that the
investors originally asked for a lot more than $125 million.
Nevertheless, it's a coup for Bernstein Litowitz to score an MBS
settlement at all. It should be very interesting to see what
impact the deal has on the firm's many similar cases against other
issuers.
* Canada Has Yet to Draw Up Indirect Purchaser Class Suit Rules
---------------------------------------------------------------
Mark Katz, writing for The Lawyers Weekly, reports that private
competition litigation, particularly class action litigation, is
of growing importance in Canada. Like any developing area of law,
however, it is prone to fits and starts, as courts struggle to
establish fundamental principles and doctrines.
Much of the litigation surrounding the scope of competition class
actions in Canada has involved whether "indirect purchasers" are
entitled to recover damages in class actions based on allegations
of illegal price fixing or other anti-competitive conduct (such as
market allocation and output restriction). "Direct purchasers" in
these types of actions are plaintiffs who purchased the product in
question directly from the persons alleged to have engaged in the
anti-competitive conduct. In contrast, "indirect purchasers" are
plaintiffs who are one or more steps removed from the defendants
in the chain of distribution? -- for example, distributors,
retailers and consumers.
For many years, Canadian courts refused to certify class actions
on behalf of indirect purchasers. In several of these cases,
certification was refused on the ground that the plaintiffs had
failed to demonstrate a workable methodology for establishing loss
or damage on a class-wide basis, meaning that the proposed class
proceedings would become unmanageable and therefore would not be
the preferable procedure for resolving the asserted claims.
More recently, however, Ontario and B.C. courts issued decisions
that relaxed the standard required for certification of class
actions on behalf of indirect purchasers. In Irving Paper Ltd. v.
Atofina Chemicals Inc., [2010] O.J. No. 2472 (Ont. S.C.J.) and
Pro-Sys Consultants Ltd. v. Infineon Technologies AG, [2009]
B.C.J. No. 2239 (B.C.C.A.), the courts departed from the approach
taken in previous cases and held that at the certification stage,
a judge need only be satisfied that there is some credible basis
in fact for concluding that damages can be proven on a class-wide
basis at trial; it is not necessary to subject the claim to
rigorous scrutiny and decide if it accords with sound principles
of economics as a pre-condition for certification.
These decisions appeared to mark the advent of a much more liberal
judicial attitude toward competition class actions in Canada. But
the situation has now been clouded with the release in May of two
decisions of the British Columbia Court of Appeal which held that
indirect purchasers of allegedly cartelized products "have no
cause of action maintainable in law." The two decisions, Pro-Sys
Consultants Ltd v. Microsoft, [2011] B.C.J. No. 688 and Sun-Rype
Products Ltd v. Archer Daniels Midland Co., [2011] B.C.J. No. 689
(heard together by a single panel of the British Columbia Court of
Appeal), mark the first time that a court has held conclusively
that indirect purchaser actions are not available in Canada as a
matter of law.
In Sun-Rype, the plaintiffs alleged that the defendants had
conspired to fix the price of high fructose corn syrup (HFCS), a
sweetener used in various food products. The proposed class
consisted of both direct and indirect purchasers resident in B.C.
who purchased HFCS or products containing HFCS in the period
between Jan. 1, 1988, and June 30, 1995.
In Microsoft, the proposed class was comprised exclusively of
indirect purchasers, namely persons resident in B.C. who
indirectly acquired Microsoft operating systems and applications
software (for example, through new computers pre-installed with
Microsoft's software) on or after Jan. 1, 1994. The plaintiffs
alleged that Microsoft had engaged in various kinds of anti-
competitive behavior with original equipment manufacturers and
others, which permitted it to overcharge for its products.
The British Columbia Supreme Court certified both proposed class
actions. On appeal, however, Justices Lowry and Frankel of the
British Columbia Court of Appeal (Justice Donald dissenting), held
that the plaintiffs' claims in both actions should be struck down.
Basing their opinion on a Supreme Court of Canada (SCC) decision
involving the law of restitution, the majority held that indirect
purchasers to whom an overcharge was allegedly passed on cannot,
as a matter of law, maintain a cause of action for any
corresponding loss which they allegedly suffered. Otherwise,
defendants could face the impermissible prospect of double
recovery, i.e. they could be liable to direct purchasers for 100%
of the overcharge they paid and also to indirect purchasers for
whatever amount of the overcharge may have been passed on.
Sun-Rype and Microsoft represent yet another 180 degree turn in
the treatment of indirect purchaser class actions in Canada.
Ultimately, the SCC will have to decide this issue.
Given the roller coaster ride experienced to date, there is no
telling what will happen. The outcome is critical because many
cartel violations affecting Canada involve sales to indirect
purchasers (sometimes principally or even exclusively). As such,
a rule excluding or substantially curtailing indirect purchaser
actions could have a significant impact on the civil exposure
faced by cartel participants in Canada.
* Wal-Mart Ruling No Impact on Other Employment Class Actions
-------------------------------------------------------------
Moira Herbst at Reuters reports that the end of the road for a
class-action discrimination lawsuit brought by female employees of
Wal-Mart Stores Inc. has not spelled doom for employment lawsuits
facing other big U.S. companies.
A landmark U.S. Supreme Court decision last month siding with the
world's largest retailer was widely seen as a blow to many other
would-be class-action plaintiffs.
But some employment class-action lawsuits, particularly those
involving disputes over overtime and other wage-and-hour claims,
are surviving and have even been strengthened by the ruling, as
judges have issued opinions arguing the Wal-Mart decision does not
apply to a given case.
The Wal-Mart case centered on whether a group of up to 1.5 million
current and former workers at the retailer, who contended they
were paid less than men and denied promotions, was properly
certified as a class. The Supreme Court said the women could not
sue jointly, finding they did not have enough in common to band
together.
Plaintiffs who sue en masse have more power, because they can pool
resources and combine claims into one lawsuit. Following the
Supreme Court's June 20 ruling, Wal-Mart workers will now have to
sue in smaller groups or as individuals.
In the past three weeks, courts and attorneys have rushed to
interpret the ruling. A day after the decision, a federal judge
in New York ruled that about 600 employees of Tyco International
Ltd unit SimplexGrinnell can sue jointly on their claims that they
were underpaid.
On June 29, a federal judge in Florida denied Starbucks Corp.'s
attempt to decertify a class of more than 700 workers in a lawsuit
on overtime pay, saying there were enough similarities to justify
keeping class members together.
That same week, a federal judge in California denied trucking
company C.R. England Inc.'s attempt to decertify a class of up to
1,000 drivers in a wage-and-hour class action, and a federal judge
in Ohio upheld class certification in a similar case against
nursing home company HCR ManorCare.
To be sure, the plaintiff classes so far kept intact or certified
are small compared with the Wal-Mart group, and their lawsuits do
not involve the same type of sex bias allegations. The Wal-Mart
case is expected to have more of an impact in other nationwide
discrimination class actions, including pending cases against
Costco Wholesale Corp., Toshiba Corp., Goldman Sachs Group Inc.,
Cigna Corp. and Bayer.
At least one wage-and-hour case has come apart in the wake of the
Wal-Mart decision. Citing the ruling, a federal judge in
California on July 7 decertified a class of several hundred Dollar
Tree Inc. employees that accused the discount chain of denying
them overtime pay.
Lawyers defending companies in other types of lawsuits, including
cases accusing banks of misleading investors about complex
mortgage investments, are also citing the Wal-Mart ruling as they
try to block plaintiffs from linking together to sue.
But plaintiffs' attorneys contend that class actions involving
alleged wage-and-hour violations should not be affected by the
ruling in the Wal-Mart case, formally known as Dukes v. Wal-Mart
Stores. They cite legal arguments about the federal Fair Labor
Standards Act and state labor laws.
"Plaintiffs' lawyers are looking for ways to distinguish their
cases from the Wal-Mart case," said Howard M. Erichson, a
professor at Fordham Law School. "They're using other case law to
show it's easier to establish commonality than it was in Dukes vs.
Wal-Mart."
In cases involving state labor law, plaintiffs' lawyers argue that
classes of proposed plaintiffs are much narrower than the
sprawling one in the Wal-Mart case. In the SimplexGrinnell case,
U.S. District Judge Steven Gold upheld class certification for
about 600 workers who allege the Tyco fire and safety equipment
unit violated New York labor law.
"The relevant facts and circumstances in Wal-Mart have little
bearing here," Judge Gold concluded.
Cases brought under the federal Fair Labor Standards Act are also
proceeding. Class certification for these cases do not have to
satisfy the same strict requirements as discrimination cases, such
as the Wal-Mart lawsuit, brought under Title VII of the Civil
Rights Act.
Both the Starbucks and the HCR ManorCare lawsuits faced the less
stringent certification standard. HCR attorneys asked Ohio
federal Judge Jack Zouhary to consider the impact of the Wal-Mart
ruling to their wage-and-hour case. "This Court concludes the
concerns expressed in Dukes simply do not exist here," Judge
Zouhary wrote in a July 1 order.
Employer-side attorneys say some judges are misinterpreting the
Wal-Mart ruling, keeping alive class-actions that do not merit
certification.
"A lot of the judges are reading the Dukes case narrowly," said
Allan King, an employment lawyer at Littler Mendelson. "If they
were to read it more broadly, plaintiffs would have to make a much
stronger case much earlier in the litigation."
*********
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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Chapman, Editors.
Copyright 2011. All rights reserved. ISSN 1525-2272.
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