/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/110912.mbx C L A S S A C T I O N R E P O R T E R Monday, September 12, 2011, Vol. 13, No. 180 Headlines BEAM WINES: Faces Class Action Over False Claims on Skinnygirl BRIGGS & STRATTON: Continues to Defend Horsepower Suits in Canada BRIGGS & STRATTON: Court Vacates Dismissal of Retirees' Suit CIRCLE K: Faces Class Action in Florida Over Unpaid Overtime CITY OF PORTLAND, OR: Police, Firefighters Sue Over Pension DIRECTV: Court Denies Motion to Compel Arbitration DRUG STORES: Appeal Ruling in W.Va. AG's Drug-Pricing Case EMDEON INC: Being Sold to Blackstone for Too Little, Suit Claims H&R BLOCK: Appeal in "Basile" Class Suit Still Pending H&R BLOCK: Class Certification Bid in "Drake" Suit Still Pending H&R BLOCK: Final Settlement Hearing Set for Oct. 20 in EquiCo Deal H&R BLOCK: First Circuit Refuses to Hear Appeal in "Barrett" Suit H&R BLOCK: Wage and Hour Class Action Suits Remain Pending J.CREW GROUP: Awaits OK of Sale-Related Delaware Suit Settlement KASHI CO: Sued Over Misleading "All Natural" Product Labels KERZNER INT'L: Disputes Class Suit Over Housekeeping Gratuity Fee ONLINE TRAVEL COS: Town of Vail May Take Part in Class Action PINNACLE GROUP: Settles Tenants' Harassment Class Action PRET A MANGER: Faces Class Action Over Labor Law Violations STATE OF FLORIDA: ACLU Files Suit Over Welfare Drug Testing SWIFT TRANSPORTATION: Truckers' Class Action Set for Trial TORO CO: Continues to Defend Lawnmower Suit in Canada TOYOTA MOTOR: Plaintiffs' Lawyers Want to Limit Depositions TURLOCK IRRIGATION DISTRICT: Case Conference Set for Sept. 19 UNITED STATES: Keepseagle Class Action Members Get Assistance WAL-MART STORES: Calif. Court Extends Tolling in "Dukes" Suit WAL-MART STORES: Court Denies Rehearing Bid in "Braun/Hummel" Suit ********* BEAM WINES: Faces Class Action Over False Claims on Skinnygirl -------------------------------------------------------------- Courthouse News Service reports that a federal class action claims Beam Wines & Spirits falsely advertises its Skinnygirl Margarita as "all-natural," though it contains preservatives, including sodium benzoate. A copy of the Complaint in Bonar v. Beam Global Spirits & Wine, Inc., et al., Case No. 11-cv-_____ (S.D. Calif.), is available at: http://www.courthousenews.com/2011/09/07/Skinnygirl.pdf The Plaintiff is represented by: George Rikos, Esq. THE LAW OFFICES OF GEORGE RIKOS 1307 Stratford Court Del Mar, CA 92014 Telephone: (858) 342-9161 E-mail: geore@georgerikoslaw.com BRIGGS & STRATTON: Continues to Defend Horsepower Suits in Canada ----------------------------------------------------------------- Briggs & Stratton Corporation is subject to various unresolved legal actions that arise in the normal course of its business. These actions typically relate to product liability (including asbestos-related liability), patent and trademark matters, and disputes with customers, suppliers, distributors and dealers, competitors and employees. Starting with the first complaint in June 2004, various plaintiff groups filed complaints in state and federal courts across the country against the Company and other engine and lawnmower manufacturers alleging that the horsepower labels on the products they purchased were inaccurate and that the Company conspired with other engine and lawnmower manufacturers to conceal the true horsepower of these engines ("Horsepower Class Actions"). On December 5, 2008, the Multidistrict Litigation Panel coordinated and transferred the cases to Judge Adelman of the U. S. District Court for the Eastern District of Wisconsin (In Re: Lawnmower Engine Horsepower Marketing and Sales Practices Litigation, Case No. 2:08-md-01999). On February 24, 2010, the Company entered into a Stipulation of Settlement ("Settlement") that resolves all of the Horsepower Class Actions. The Settlement resolves all horsepower-labeling claims brought by all persons or entities in the United States who, beginning January 1, 1994, through the date notice of the Settlement is first given, purchased, for use and not for resale, a lawn mower containing a gas combustible engine up to 30 horsepower provided that either the lawn mower or the engine of the lawn mower was manufactured or sold by a Defendant. On August 16, 2010, Judge Adelman issued a final order approving the Settlement as well as the settlements of all other defendants. In August and September 2010, several class members filed a Notice of Appeal of Judge Adelman's final approval order to the U. S. Court of Appeals for the Seventh Circuit. All of those appeals were settled as of February 16, 2011, with no additional contribution from Briggs & Stratton. As part of the Settlement, the Company denies any and all liability and seeks resolution to avoid further protracted and expensive litigation. The settling defendants as a group agreed to pay an aggregate amount of $51 million. However, the monetary contribution of the amount of each of the settling defendants is confidential. In addition, the Company, along with the other settling defendants, agreed to injunctive relief regarding their future horsepower labeling, as well as procedures that will allow purchasers of lawnmower engines to seek a one-year extended warranty free of charge. Under the terms of the Settlement, the balance of settlement funds were paid, and the one-year warranty extension program began to run, on March 1, 2011. As a result of the Settlement, the Company recorded a total charge of $30.6 million in the third quarter of fiscal year 2010 representing the total of the Company's monetary portion of the Settlement and the estimated costs of extending the warranty period for one year. On March 19, 2010, new plaintiffs filed a complaint in the Ontario Superior Court of Justice in Canada (Robert Foster et al. v. Sears Canada, Inc. et al., Docket No. 766-2010). On May 3, 2010, other plaintiffs filed a complaint in the Montreal Superior Court in Canada (Eric Liverman, et al. v. Deere & Company, et al., Docket No. 500-06-000507-109). Both Canadian complaints contain allegations and seek relief under Canadian law that are similar to the Horsepower Class Actions. The Company is evaluating the complaints and has not yet filed an answer or other responsive pleading to either one. No further updates were reported in the Company's September 1, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended July 3, 2011. BRIGGS & STRATTON: Court Vacates Dismissal of Retirees' Suit ------------------------------------------------------------ The U.S. District Court for the Eastern District of Wisconsin vacated its dismissal of a putative class action lawsuit commenced by Briggs & Stratton Corporation's retirees, according to the Company's September 1, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended July 3, 2011. On May 14, 2010, the Company notified retirees and certain retirement eligible employees of various changes to the Company- sponsored retiree medical plans. The purpose of the amendments was to better align the plans offered to both hourly and salaried retirees. On August 16, 2010, a putative class of retirees who retired prior to August 1, 2006, and the United Steel Workers filed a complaint in the U.S. District Court for the Eastern District of Wisconsin (Merrill, Weber, Carpenter, et al; United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC v. Briggs & Stratton Corporation; Group Insurance Plan of Briggs & Stratton Corporation; and Does 1 through 20, Docket No. 10-C- 0700), contesting the Company's right to make these changes. In addition to a request for class certification, the complaint seeks an injunction preventing the alleged unilateral termination or reduction in insurance coverage to the class of retirees, a permanent injunction preventing defendants from ever making changes to the retirees' insurance coverage, restitution with interest (if applicable) and attorneys' fees and costs. The Company moved to dismiss the complaint and believes the changes are within its rights. On April 21, 2011, the district court issued an order granting the Company's motion to dismiss the complaint. The plaintiffs filed a motion with the court to reconsider its order on May 17, 2011. On August 24, 2011, the Court granted the plaintiffs' motion and vacated the dismissal of the case, and discovery will therefore proceed in the matter. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes the unresolved legal actions will not have a material adverse effect on its results of operations, financial position or cash flows. CIRCLE K: Faces Class Action in Florida Over Unpaid Overtime ------------------------------------------------------------ Courthouse News Service reports that Circle K Stores stiff workers for overtime, according to a federal class action. A copy of the Complaint in Dominguez, et al. v. Circle K Stores, Inc., Case No. 11-cv-23196 (S.D. Fla.), is available at: http://www.courthousenews.com/2011/09/07/CircleK.pdf The Plaintiffs are represented by: R. Martin Saenz, Esq. THE SAENZ LAW FIRM, P.A. 20900 N.E. 30th Avenue, Ste. 800 Aventura, FL 33180 Telephone: (305) 503.5131 E-mail: msaenz@saenzlawfirm.com CITY OF PORTLAND, OR: Police, Firefighters Sue Over Pension ----------------------------------------------------------- Maxine Bernstein, writing for The Oregonian, reports that more than 500 retired Portland police and firefighters and their spouses have brought a class action lawsuit against the city, arguing that the Portland's public safety retirement fund breached their contract by trying to recoup nearly $3 million the fund mistakenly overpaid them in pension benefits. The lawsuit, filed initially by five plaintiffs in Multnomah County Circuit Court, seeks to stop the Portland Fire and Police Disability and Retirement Fund from withholding pension payments that the fund's board says its members owe the city for miscalculations that occurred for over a decade. The suit asks the court to award damages of $25,000 per retiree, as well as attorney fees. Attorney Henry J. Kaplan is representing three retired police officers and two retired firefighters who filed the complaint Aug. 25 on behalf of themselves and all the affected retirees. "In most normal contexts, an employer who has a claim against an employee would file a lawsuit," Mr. Kaplan said Sept. 7. But in this case, the public safety fund moved ahead to recoup the money without taking legal action, not giving the retirees an opportunity to assert their rights, Mr. Kaplan said. "Given the large number of plaintiffs, and the elderly status of many of the claimants, a class action is the only reasonable method by which to adjudicate this matter," Mr. Kaplan wrote in the complaint. Michael Cullivan, 65, a retired Portland police lieutenant, said the fund has started taking $150 a month from his pension. "The pension board made the mistake. We didn't," Mr. Cullivan said, adding that he believes Portland's public safety retirees don't owe the city because he contends they saved the city millions 30 years ago by not joining the state public employee pension system. He added that the form letter informing each retiree of the money owed didn't show how it was calculated. Ken McGair, a deputy city attorney who advises the fund, declined to comment. Jeffery Robertson, a fund board member, said "it's concerning" that retirees are suing the city when the city is simply trying to fix an error. "And I have every belief and hope that if the mistake was the other way, if we had paid less than what we owed the members, the firefighters or the police would be asking for the money even if they had made the mistake." The board, Mr. Robertson added, did not make this decision in a vacuum, but was advised by the IRS. "We are attempting to correct the problem via the IRS' express edict," he said. In 2008, the pension fund discovered that for 13 years it had overpaid pension benefits to 940 retirees and surviving beneficiaries, costing the fund an extra $2.89 million. The public safety fund's board of trustees debated how to remedy the mistake. The board sought the approval of the Internal Revenue Service, concerned that the mistake could put the fund's tax-qualified status in jeopardy. If the status was lost, benefits now taxable only when received would instead become taxable when the member becomes vested. The board corrected payments in 2008. But the IRS said more was needed to be done and offered this choice: either ask voters to forgive the overpayments or reduce benefit payments until the money is repaid. The Portland Fire and Police Disabilty and Retirement Fund began in July moving to recoup nearly $3 million in miscalculated pension payments from retirees. This spring, the fund staff sent letters to retirees, alerting them of their plan to defer cost-of-living increases for about 850 retirees until the amount they were overpaid is recovered. For some that will last one month; others more than three years. "They paid it out in 13 years. Now they want it back in two and a half," Mr. Cullivan complained. For fewer than 50 retirees who were overpaid a total of $54,000, the fund will recoup the money monthly over an extended period of time, based on an actuarial calculation. Retirees also have had the option of writing a check to the fund for the full amount. The average overpayment is about 2.38%; the monthly impact ranges from more than $100 a month, to less than a dollar a month. Besides Mr. Cullivan, the other plaintiffs named are retired firefighters Tim Anderson and James Leinweber and retired officers Clara Renfro and Terry Wagner. The class-action suit comes as an appellate court has reversed another challenge by fund members, this time to the fund's return- to-work program for disabled firefighters. Oregon's appellate court reversed a ruling by the state Employment Relations Board, which held the city committed unfair labor practices by adopting a return-to-work program for disabled firefighters without bargaining the impact of the program with the union. The court sent the matter back to the state board for reconsideration. DIRECTV: Court Denies Motion to Compel Arbitration -------------------------------------------------- Lieff Cabraser represents subscribers of DirecTV that were assessed fees ranging from $100 to $500 for the early cancellation of their service. The class action lawsuit alleges that these fees were illegal because DirecTV failed to inform subscribers that they were under any contractual obligation to maintain service for a given period of time (usually 18 months or two years) when they signed up for the service. Within DirecTV's customer agreement is a section providing for the arbitration of most claims. In November 2010, the District Court stayed the multi-district litigation pending the U.S. Supreme Court's decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). In Concepcion, by a 5 to 4 vote, the Supreme Court enforced a clause in an arbitration agreement prohibiting consumers from seeking to vindicate their rights through class actions. Lower courts had rejected AT&T Mobility's request, holding that the class-action ban was unconscionable under California law because it would exculpate the company from accountability for wrongdoing. After the Supreme Court ruled on Concepcion, the District Court in the DirecTV matter lifted the stay, and DirecTV moved to compel arbitration. In an order issued September 8, 2011, U.S. District Court Judge Andrew J. Guilford held that while he was bound by Concepcion to reject plaintiffs' argument that the arbitration clause was unconscionable (and on that basis compelled arbitration of plaintiffs' claims for monetary damages), DirecTV's motion to compel arbitration must be denied with respect to plaintiffs' claims for injunctive relief under two California statutes: the Consumer Legal Remedy Act ("CLRA") and the Unfair Competition Law ("UCL"). The holding is the first of its kind by a California federal judge since Concepcion came down this past Spring, and an important step in limiting the reach of Concepcion. The District Court found that "Plaintiffs bring their UCL and CLRA claims as private attorneys general, seeking to vindicate a public right. These claims are not intended to remedy a primarily private right or rights merely incidental to the public benefit." "California law vigorously protects consumers by insisting, regardless of what is stated in the one-sided contracts consumers are forced to sign, that judges, not private arbitrators, are entrusted with deciding whether broad public rights have been violated," stated Lieff Cabraser attorney Jonathan D. Selbin, who argued the motion for plaintiffs. "Today's order affirms that this case law remains operative following Concepcion and provides a powerful legal tool to hold accountable corporations that commit fraud and deceive consumers." For questions or further information, please contact Jonathan S. Selbin at jselbin@lchb.com Lieff Cabraser serves on the Plaintiffs' Executive Committee in the litigation, entitled In Re DirecTV Early Cancellation Fee Marketing and Sales Practices Litigation, MDL No. 09-2093. The plaintiffs are represented by: Stephen H. Cassidy, Esq. LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: 415-956-1000 E-mail: scassidy@lchb.com DRUG STORES: Appeal Ruling in W.Va. AG's Drug-Pricing Case ---------------------------------------------------------- John O'Brien, writing for Legal Newsline, reports that a group of pharmacies has appealed to the U.S. Supreme Court a decision that permits West Virginia Attorney General Darrell McGraw's lawsuit against it to be heard in state court. The group submitted its petition that asks for review of a decision by the U.S. Court of Appeals for the Fourth Circuit on Aug. 18, and it was placed on the Supreme Court's docket six days later. The pharmacies are claiming Mr. McGraw's drug-pricing case against them is essentially a class action and should be heard in federal court. The case alleges six drug stores -- Wal-Mart, CVS, Kmart, Kroger, Target and Walgreen -- did not pass savings on generic drugs to consumers. "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 Fourth Circuit's 2-1 judgment 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." After the judgment, the drug stores unsuccessfully asked for a rehearing of the case before all of the Fourth Circuit judges. The Fourth Circuit then chose, by a 2-1 vote of the same three judges who heard the case, not to issue a stay of its decision, allowing the case to proceed in Boone County Circuit Court. A petition for a full rehearing of that ruling was also denied. Judge Ronald Lee Gilman dissented in the judgment and was the only member of the three-judge panel to vote for a stay. Even though the action was brought under state statutes, it doesn't take away the "essence" of the case, he wrote in his dissent. "(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 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. EMDEON INC: Being Sold to Blackstone for Too Little, Suit Claims ---------------------------------------------------------------- Courthouse News Service reports that shareholders say Emdeon, a health-care payment manager, is selling itself too cheaply through an unfair process to Blackstone Capital Partners, for $19 a share or $3 billion. A copy of the Complaint in Rohrbacher v. Emdeon Inc., et al., Case No. 11-cv-00845 (M.D. Tenn.), is available at: http://www.courthousenews.com/2011/09/07/SCA.pdf The Plaintiff is represented by: George E. Barrett, Esq. Douglas S. Johnston, Esq. Timothy Miles, Esq. BARRETT JOHNSTON, LLC 217 Second Avenue North Nashville, TN 37201 Telephone: (615) 244-2202 E-mail: tmiles@barrettjohnston.com - and - Brian J. Robbins, Esq. Arshan Amiri, Esq. Lauren E. Rosner, Esq. ROBBINS UMEDA LLP 600 B Street, Suite 1900 San Diego, CA 92101 Telephone: (619) 525-3990 E-mail: brobbins@robbinsumeda.com aamiri@robbinsumeda.com lrosner@robbinsumeda.com - and - Willie Briscoe, Esq. THE BRISCOE LAW FIRM, PLLC 8117 Preston Road, Suite 300 Dallas, TX 75225 Telephone: (214) 706-9314 E-mail: wbriscoe@thebriscoelawfirm.com - and - Patrick Powers, Esq. POWERS TAYLOR LLP 8150 N. Central Expressway, Suite 1575 Dallas, TX 75206 Telephone: (214) 239-4565 E-mail: patrick@powerstaylor.com H&R BLOCK: Appeal in "Basile" Class Suit Still Pending ------------------------------------------------------ H&R Block, Inc.'s appeal from the reversal of class decertification in the lawsuit commenced by Sandra J. Basile, et al., remains pending, according to the Company's September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. The Company has been named in multiple lawsuits as defendants in litigation regarding its refund anticipation loan program in past years. All of those lawsuits have been settled or otherwise resolved, except for one. The sole remaining case is a putative class action styled Sandra J. Basile, et al. v. H&R Block, Inc., et al., April Term 1992 Civil Action No. 3246 in the Court of Common Pleas, First Judicial District Court of Pennsylvania, Philadelphia County, instituted on April 23, 1993. The plaintiffs allege inadequate disclosures with respect to the RAL product and assert claims for violation of consumer protection statutes, negligent misrepresentation, breach of fiduciary duty, common law fraud, usury, and violation of the Truth In Lending Act. Plaintiffs seek unspecified actual and punitive damages, injunctive relief, attorneys' fees and costs. A Pennsylvania class was certified, but later decertified by the trial court in December 2003. An appellate court subsequently reversed the decertification decision. The Company is appealing the reversal. The Company has not concluded that a loss related to this matter is probable nor has it accrued a loss contingency related to this matter. Plaintiffs have not provided a dollar amount of their claim and the Company is not able to estimate a possible range of loss. The Company believes it has meritorious defenses to this case and intends to defend it vigorously. There can be no assurances, however, as to the outcome of this case or its impact on the Company's consolidated results of operations. H&R BLOCK: Class Certification Bid in "Drake" Suit Still Pending ---------------------------------------------------------------- Plaintiffs' motion for class certification in the putative class action lawsuit commenced by Jeanne Drake, et al., remains pending, according to H&R Block, Inc.'s September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. H&R Block, Inc.'s portfolio includes loans originated by Sand Canyon Corporation (SCC) and purchased by H&R Block Bank (HRB Bank) which constitute 63% of the Company's total loan portfolio at July 31, 2011. On December 9, 2009, a putative class action lawsuit was filed in the United States District Court for the Central District of California against SCC and H&R Block, Inc. styled Jeanne Drake, et al. v. Option One Mortgage Corp., et al. (Case No. SACV09-1450 CJC). Plaintiffs allege breach of contract, promissory fraud, intentional interference with contractual relations, wrongful withholding of wages and unfair business practices in connection with the failure to pay severance benefits to employees when their employment transitioned to American Home Mortgage Servicing, Inc. in connection with the sale of certain assets and operations of Option One. Plaintiffs seek to recover severance benefits of approximately $8 million, interest and attorney's fees, in addition to penalties and punitive damages on certain claims. Plaintiffs' motion for class certification is pending. All parties have filed motions for summary judgment. The court has set a hearing on all pending motions on August 29, 2011. The Company has not concluded that a loss related to this matter is probable nor has it established a loss contingency related to this matter. The Company believes it has meritorious defenses to the claims in this case and intends to defend the case vigorously, but there can be no assurances as to its outcome or its impact on the Company's consolidated results of operations. H&R BLOCK: Final Settlement Hearing Set for Oct. 20 in EquiCo Deal ------------------------------------------------------------------ A final approval hearing is set for October 20, 2011, with respect to an agreement to settle a lawsuit against H&R Block, Inc.'s subsidiary, according to the Company's September 1, 2011, Form 10- Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. The Company's subsidiary, RSM EquiCo, Inc. (EquiCo), EquiCo's parent and certain of its subsidiaries and affiliates, are parties to a class action filed on July 11, 2006, and styled Do Right's Plant Growers, et al. v. RSM EquiCo, Inc., et al. (the "RSM Parties"), Case No. 06 CC00137, in the California Superior Court, Orange County. The complaint contains allegations relating to business valuation services provided by EquiCo, including allegations of fraud, conversion and unfair competition. Plaintiffs seek unspecified actual and punitive damages, in addition to pre-judgment interest and attorneys' fees. On March 17, 2009, the court granted plaintiffs' motion for class certification on all claims. To avoid the cost and inherent risk associated with litigation, the parties reached an agreement to settle the case, subject to approval by the California Superior Court. The settlement requires a maximum payment of $41.5 million, although the actual cost of the settlement will depend on the number of valid claims submitted by class members. The California Superior Court preliminarily approved the settlement on July 29, 2011. A final approval hearing is set for October 20, 2011. The defendants believe they have meritorious defenses to the claims in this case and, if for any reason the settlement is not approved, they will continue to defend the case vigorously. Although the Company has a liability recorded for expected losses, there can be no assurance regarding the outcome of this matter. H&R BLOCK: First Circuit Refuses to Hear Appeal in "Barrett" Suit ----------------------------------------------------------------- The First Circuit Court of Appeals declined to hear the defendants' appeal from the approval of class certification in the lawsuit commenced by Cecil Barrett, et al., according to H&R Block, Inc.'s September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. H&R Block, Inc.'s portfolio includes loans originated by Sand Canyon Corporation (SCC) and purchased by H&R Block Bank (HRB Bank) which constitute 63% of the Company's total loan portfolio at July 31, 2011. On February 1, 2008, a class action lawsuit was filed in the United States District Court for the District of Massachusetts against SCC and other related entities styled Cecil Barrett, et al. v. Option One Mortgage Corp., et al. (Civil Action No. 08- 10157-RWZ). Plaintiffs allege discriminatory practices relating to the origination of mortgage loans in violation of the Fair Housing Act and Equal Credit Opportunity Act, and seek declaratory and injunctive relief in addition to actual and punitive damages. The court dismissed H&R Block, Inc. from the lawsuit for lack of personal jurisdiction. In March 2011, the court issued an order certifying a class, which defendants sought to appeal. On August 24, 2011, the First Circuit Court of Appeals declined to hear the appeal, noting that the district court could reconsider its certification decision in light of a recent ruling by the United States Supreme Court in an unrelated matter. The Company does not believe losses in excess of its accrual would be material to its financial statements, although it is possible that the losses could exceed the amount it has accrued. The Company believes it has meritorious defenses to the claims in this case and intends to defend the case vigorously, but there can be no assurances as to its outcome or its impact on the Company's consolidated results of operations. H&R BLOCK: Wage and Hour Class Action Suits Remain Pending ---------------------------------------------------------- H&R Block, Inc., continues to defend wage and hour class action lawsuits pending in different states, according to the Company's September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. The Company has been named in several wage and hour class action lawsuits throughout the country, including Alice Williams v. H&R Block Enterprises LLC, Case No. RG08366506 (Superior Court of California, County of Alameda, filed January 17, 2008) (alleging improper classification of office managers in California); Arabella Lemus v. H&R Block Enterprises LLC, et al., Case No. CGC- 09-489251 (United States District Court, Northern District of California, filed June 9, 2009) (alleging failure to timely pay compensation to tax professionals in California and to include itemized information on wage statements); Delana Ugas v. H&R Block Enterprises LLC, et al., Case No. BC417700 (United States District Court, Central District of California, filed July 13, 2009) (alleging failure to compensate tax professionals in California for all hours worked and to provide meal periods); and Barbara Petroski v. H&R Block Eastern Enterprises, Inc., et al., Case No. 10-CV-00075 (United States District Court, Western District of Missouri, filed January 25, 2010) (alleging failure to compensate tax professionals nationwide for off-season training). A class was certified in the Lemus case in December 2010 (consisting of tax professionals who worked in company-owned offices in California from 2007 to 2010); in the Williams case in March 2011 (consisting of office managers who worked in company-owned offices in California from 2004 to 2011); and in the Ugas case in August 2011 (consisting of tax professionals who worked in company-owned offices in California from 2006 to 2011). A conditional class was certified in the Petroski case in March 2011 (consisting of tax professionals nationwide who worked in company-owned offices and who were not compensated for certain training courses occurring on or after April 15, 2007). The plaintiffs in the wage and hour class action lawsuits seek actual damages, pre-judgment interest and attorneys' fees, in addition to statutory penalties under California and federal law, which could equal up to 30 days of wages per tax season for class members who worked in California. A portion of the Company's loss contingency accrual is related to these lawsuits for the amount of loss that the Company considers probable and estimable. For those wage and hour class action lawsuits for which the Company is able to estimate a range of possible loss, the current estimated range is $0 to $70 million in excess of the accrued liability related to those matters. This estimated range of possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions and uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Because this estimated range does not include matters for which an estimate is not possible, the range does not represent the Company's maximum loss exposure for the wage and hour class action lawsuits. The Company believes it has meritorious defenses to the claims in these lawsuits and intends to defend them vigorously. The amounts claimed in these matters are substantial in some instances and the ultimate liability with respect to these matters is difficult to predict. There can be no assurances as to the outcome of these cases or their impact on the Company's consolidated results of operations, individually or in the aggregate. J.CREW GROUP: Awaits OK of Sale-Related Delaware Suit Settlement ---------------------------------------------------------------- J.Crew Group, Inc., is awaiting court approval of an agreement to settle a consolidated shareholder class action lawsuit pending in Delaware arising from its sale to an affiliate of TPG Capital, L.P. and Leonard Green & Partners, L.P., according to the Company's September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 30, 2011. J.Crew Group, Inc., and its wholly owned subsidiaries (the "Company" or "Group") was acquired on March 7, 2011, through a merger transaction with Chinos Acquisition Corporation ("Merger Sub"), a wholly-owned subsidiary of Chinos Holdings, Inc. (the "Parent"). The Parent was formed by investment funds affiliated with TPG Capital, L.P. ("TPG") and Leonard Green & Partners, L.P. ("LGP" and together with TPG, the "Sponsors"). The acquisition was accomplished through a reverse subsidiary merger of Chinos Acquisition Corporation with and into J.Crew Group, Inc., with J.Crew Group, Inc. being the surviving company (the "Acquisition"). Subsequent to the Acquisition, Group became an indirect, wholly owned subsidiary of Parent, which is owned by affiliates of the Sponsors, co-investors and members of management. Prior to March 7, 2011, the Company operated as a public company with common stock traded on the New York Stock Exchange. Delaware Actions Between November 24, 2010, and December 8, 2010, seven of the purported class action complaints concerning the Acquisition were filed in the Delaware Court of Chancery. On December 14, 2010, these cases were consolidated into the Delaware Action. On January 16, 2011, the Company entered into a binding Memorandum of Understanding ("MOU") with the other parties in the Delaware Action. The MOU provided for the settlement of all claims asserted in the Delaware Action against the Company and the other defendants. The Company and the other defendants agreed to the MOU pending the execution of a more formal settlement agreement. The MOU provided for, among other things, a one-time settlement payment of $10 million by J.Crew or its insurers to be distributed pro rata among the members of the class of Company shareholders on whose behalf the plaintiffs in the Delaware Action purport to act. Once the MOU was signed, the parties removed from the Court's docket a preliminary injunction hearing that had been scheduled for February 24, 2011. By letter dated January 31, 2011, the plaintiffs in the Delaware Action attempted to repudiate the MOU and informed the Court that they were no longer in a position to support or pursue the settlement and indicated that they intended to seek monetary damages following the closing of the Acquisition. By letter dated February 1, 2011, the defendants informed the Court that they believe they have honored their obligations under the MOU and that they intended to seek specific performance of the MOU. The court held a conference on February 11, 2011, during which it stated that it would not entertain any applications in the litigation until after the shareholder vote. Following the shareholders' approval of the Acquisition, the plaintiffs filed a Status Report and Motion to Resume Litigation. In that motion, the plaintiffs requested leave to recommence discovery concerning the merits of the Delaware Action. The Defendants opposed that motion, and at a March 15, 2011 hearing the Court ruled that discovery concerning the merits of the Delaware Action would be stayed until after the parties concluded litigation concerning the enforceability of the MOU. On May 12, 2011, the Company, TPG, LGP and Parent filed an action (the "MOU Enforcement Action") in the Delaware Court of Chancery asking the Court to order the plaintiffs in the Delaware Action to perform their legal commitment in the MOU to provide a "full and appropriate release of all claims that were asserted or could have been asserted" in the Delaware Action. If such specific performance is unavailable, the MOU Enforcement Action seeks, only as an alternative remedy, money damages from the plaintiffs in the Delaware Action. Also on May 12, 2011, the parties to the Delaware Action jointly submitted a proposed scheduling order for the Court's approval that provides for a trial on the MOU Enforcement Action in October 2011. If the MOU is not enforced, the Company intends to defend against the allegations asserted in the Delaware Action vigorously. On June 10, 2011, the plaintiffs in the Delaware Action moved to dismiss the MOU Enforcement Action. The Company and the other defendants who are parties to the MOU Enforcement Action filed a brief opposing dismissal on July 11, 2011. A reply brief was filed by the plaintiffs in the Delaware Action on July 26, 2011. Between late July and August 30, 2011, the parties discussed the terms and conditions of a resolution of the Delaware Action. On August 30, 2011, the parties announced the terms of a proposed settlement (the "Proposed Settlement") pursuant to which J.Crew or its insurers and TPG and Leonard Green or their insurers will make a one-time settlement payment of $16 million total (including the previously agreed-upon $10 million settlement payment which was announced on January 18, 2011), to be distributed pro rata among the members of the class of Company shareholders who are members of the settlement class and who held J.Crew shares as of the closing of the Acquisition on March 7, 2011. The Proposed Settlement will release all claims that were asserted or could have been asserted in the Delaware Action or that relate to the MOU or the Acquisition. The parties to the Delaware Action have executed a formal Stipulation of Settlement documenting the Proposed Settlement, which will be submitted to the Delaware Court of Chancery. The Proposed Settlement remains subject to approval of the Court of Chancery. The parties have agreed to stay the MOU Enforcement Action pending approval of the Proposed Settlement by the Court of Chancery. If the Proposed Settlement is approved, the Delaware Action and the MOU Enforcement Action will be dismissed, on the merits, with prejudice. With respect to the Delaware Action, the Company recorded an expense for litigation settlement of $10 million and $6 million in the fourth quarter of fiscal 2010 and second quarter of fiscal 2011, respectively. The Company expects to recover an amount of the litigation settlement expense from certain other parties. New York Actions Between November 24, 2010, and December 16, 2010, seven of the purported class action complaints concerning the Acquisition were filed in the Supreme Court of the State of New York. Those complaints are captioned respectively as Church v. J.Crew Group, Inc., et al., No. 652101-2010; Taki v. J.Crew Group, Inc., et al., No. 65125-2010; Weisenberg v. J.Crew Group, Inc., et al., No. 10115564-2010; Hekstra v. J.Crew Group, Inc., et al., No. 652175- 2010; St. Louis v. J.Crew Group, Inc., et al., No. 652201-2010; Peoria Police Pension Fund v. Drexler, et al., No. 652239-2010; KBC Asset Management NV v. J.Crew Group, Inc., et al., No. 6522870-2010 (collectively, the "New York Actions"). At a hearing on February 24, 2011, the New York court denied a request from plaintiffs to enjoin the shareholder vote, and denied the plaintiffs' request to lift the stay of proceedings, except to order the seven cases consolidated and to appoint the plaintiffs' agreed-upon lead plaintiff structure. The cases otherwise remain stayed. Federal Actions On December 1, 2010, a purported class action complaint, captioned Brazin v. J.Crew Group, Inc., No. 10 Civ. 8988, was filed in the United States District Court for the Southern District of New York. On December 14, 2010, another purported class action complaint, captioned Caywood v. Drexler, No. 10 Civ. 9328, was also filed in the United States District Court for the Southern District of New York (together with the Brazin Action, the "Federal Actions"). The plaintiffs in the Federal Actions assert claims that are largely duplicative of the claims asserted in the Delaware Action and New York Actions, but also allege that the defendants violated multiple federal securities statutes in connection with the filing of the Preliminary Proxy Statement on Schedule 14A. On March 16, 2011, the parties to the Federal Actions entered into a stipulation that stayed the Federal Actions until a final resolution or settlement of the Delaware Action. With respect to the New York and Federal Actions, the Company assessed the probability of estimable amounts related to the matters and believes the resolution of them, individually or in the aggregate, would not have a material adverse effect on the Company's financial condition or results of operations. KASHI CO: Sued Over Misleading "All Natural" Product Labels ----------------------------------------------------------- Kimberly S. Sethavanish, James Colluci, Skye Astiana, on behalf of themselves and all others similarly situated v. Kashi Company, a California Corporation, Case No. 3:11-cv-04453 (N.D. Calif., September 7, 2011), is a class action lawsuit brought on behalf of a nationwide class of consumers, who purchased Kashi food products containing artificial and synthetic ingredients, including Ascorbic Acid, Disodium Phosphate, Glycerin or Vegetable Glycerin, Monocalcium Phosphate, Potassium Carbonate, also known as Cocoa processed with Alkali, Sodium Acid Pyrophosphate, Sodium Citrate and Xantham Gum, beginning September 7, 2007, through the present. The Plaintiffs allege that since at least 2007, Kashi has packaged, marketed and sold the food products as being "All Natural" despite the fact that the products contain one or more of the artificial ingredients, each of which has been decreed a recognized synthetic chemical or ingredient by Food and Drug Administration regulations. The Plaintiffs contend that Kashi's false and misleading labeling gives rise to common law fraud, violates the unlawful, unfair, and fraudulent prongs of California's Business and Professions Code, and violates the Consumers Legal Remedies Act of the California Civil Code. Ms. Sethavanish and her fiance, Mr. Colucci, are residents of Windsor, California. Ms. Astiana is previously a resident of Mill Valley, California, and now lives in Klamath Falls, Oregon. The Plaintiffs are consumers of Kashi's "All Natural" products. Kashi is a California corporation, and touts itself as the "leading natural foods company in the US and the largest in the world." Kashi sells, markets, manages and develops a full spectrum of "ALL NATURAL" cereal and snack food products, and has expanded its offerings to include frozen entrees and pizzas. From its beginnings in 1984 to the present day, Kashi claims to produce a variety of food products made entirely with natural ingredients and all natural flavors. The Plaintiffs are represented by: Janet Lindner Spielberg, Esq. LAW OFFICES OF JANET LINDNER SPIELBERG 12400 Wilshire Boulevard, #400 Los Angeles, CA 90025 Telephone: (310) 392-8801 Facsimile: (310) 278-5938 E-mail: jlspielberg@jlslp.com - and - Michael D. Braun, Esq. BRAUN LAW GROUP, P.C. 10680 West Pico Boulevard, Suite 280 Los Angeles, CA 90064 Telephone: (310) 836-6000 Facsimile: (310) 836-6010 E-mail: service@braunlawgroup.com - and - Joseph N. Kravec, Jr., Esq. Maureen Davidson-Welling, Esq. Wyatt A. Lison, Esq. STEMBER FEINSTEIN DOYLE & PAYNE, LLC Allegheny Building, 17th Floor 429 Forbes Avenue Pittsburgh, PA 15219-1639 Telephone: (412) 281-8400 Facsimile: (412) 281-1007 E-mail: jkravec@stemberfeinstein.com mdavidsonwelling@stemberfeinstein.com wlison@stemberfeinstein.com KERZNER INT'L: Disputes Class Suit Over Housekeeping Gratuity Fee ----------------------------------------------------------------- Neil Hartnell, writing for Tribune Business, reports that Kerzner International is vigorously fighting -- and denying -- a class action lawsuit alleging that it engaged in "unfair and deceptive practices" relating to the 'mandatory housekeeping gratuity and utility service fee' it charges Atlantis guests. An amended complaint, filed in the U.S. District Court for the Southern District of Florida on June 30, 2011, by a Jennifer Costa on behalf of the class action plaintiffs alleges that the 'mandatory' fee is "deceptive" because Kerzner International does not pass all of it on to either housekeeping staff or to cover utility fees. "By labelling the gratuity and utility charge something that it is not, Kerzner is deceiving consumers into paying more for their hotel room than they bargained," the class action lawsuit alleged. "Plaintiff has suffered actual damages and economic losses as a direct result of defendants' wrongful acts because the gratuity and utility charge that is not passed through to the housekeeping staff as a gratuity or paid for the utility service fee is money she would not otherwise have paid." The action focuses on all guests who stayed at the Atlantis resort, including The Cove and The Reef, from March 28, 2007, and lists as defendants four Kerzner International reservation and marketing entities based in the U.S. -- Kerzner International Resorts, Kerzner International North America, Kerzner International Marketing and PIV Inc, which does business as Destination Atlantis. Not surprisingly, Kerzner International has been vigorously contesting the allegations, and enjoyed some success against the initial class action complaint. This, though, led to the filing of an amended complaint and the action, if not resolved, is currently set for trial in the Florida courts in December 2011. Justice James Cohn, in ruling on Kerzner International's efforts to dismiss the initial claim, noted that the Atlantis resort owner had said Costa "cannot allege she suffered an injury because she paid mandatory charges beyond the room rate that were disclosed in advance". Distribution of those charges within Atlantis' operating structure "had no impact" on what was disclosed and charged to Costa, the Kerzner International defendants argued, and "causation cannot be shown" because no itemised breakdown of the percentage that went to housekeeping staff, and the percentage that went to utility fees, was provided by the class action group. Justice Cohn backed Kerzner International's case, but left the door open for an amended class action lawsuit to be filed. The opportunity was gratefully accepted. The case is interesting because it again raises the issue of 'mandatory' gratuities and tips, often set at 15%, being charged and imposed on tourists to the Bahamas. Apart from inflating costs, critics have argued that it encourages poor service, work ethic and attitudes, and made the Bahamian tourism product uncompetitive from a cost perspective. Indeed, the amended class action lawsuit alleged: "In the face of shrinking revenues and eroding profits in the current economic climate, hotels and resorts have turned to the unscrupulous practice of imposing additional fees and surcharges on consumers designed to appear as innocent expenses. "One such charge is the Kerzner defendants' imposition of a 'mandatory housekeeping gratuity and utility service fee'." In response this time, Kerzner International has again urged the Florida courts to dismiss the action, arguing numerous grounds on which it should be barred or dismissed. "Plaintiff's complaint rests on the theory that she has been injured if [Kerzner] failed to distribute certain unspecified portion of a 'mandatory housekeeping gratuity' to hotel employees that was charged as part of her vacation package price," the Kerzner International defendants said. "Plaintiff provides no authority for the proposition that a consumer patron has any interest in the amounts of money that are paid to a hotel's employees." Kerzner International said the 'mandatory housekeeping gratuity and utility service fee' was made clear to potential guests up- front in marketing materials, with many choosing to pre-pay it. "Plaintiff acknowledges in her [filings] that the contract provides that she will be charged a combined 'mandatory housekeeping gratuity and utility service fee' up to a specified combined amount," the Kerzner International defendants alleged. "Because the contract did not state how much would be charged for the mandatory housekeeping gratuity alone -- as opposed to the utility service fee -- customers could not have had any expectations regarding the amount of the charge (e.g, that it would compensate in magnitude for any voluntary gratuity plaintiff may otherwise have wished to leave." ONLINE TRAVEL COS: Town of Vail May Take Part in Class Action ------------------------------------------------------------- Lauren Glendenning, writing for Vail Daily, reports that the town of Vail could become part of a class action lawsuit against multiple online travel companies who are accused of not paying full sales and lodging tax amounts due to municipalities. The defendants include popular Web site companies such as Expedia, Hotwire, Orbitz, Hotels.com, Priceline and Travelocity, among others. The town of Breckenridge filed the class-action lawsuit in July and is named as the primary plaintiff in the case. The lawsuit claims municipalities could be owed back taxes covering the span of 10 or more years. Vail could become one of 80 Colorado towns and cities to join in on the lawsuit, although the Vail Town Council tabled a resolution Tuesday that would have allowed the town to have attorney-client confidentiality privileges with Rothberger, Johnson & Lyons LLP, the Denver law firm representing Breckenridge in the suit. The Vail Town Council had more questions about the costs associated with signing on for such a suit, as well as what the town's potential recovery from the suit could total. Town Attorney Matt Mire advised the council to table the resolution, which would make Vail a part of the lawsuit, until representatives from the Denver law firm could be present to answer specific questions. PINNACLE GROUP: Settles Tenants' Harassment Class Action -------------------------------------------------------- Cara Buckley, writing for The New York Times, reports that a settlement deal has been reached between lawyers for a large New York City landlord and its rent-regulated tenants, who claimed in a class-action lawsuit that they had been subjected to harassment, unlawful rent increases and aggressive eviction attempts during the real estate boom. Under the terms of the deal, the landlord, the Pinnacle Group, will pay $2.5 million to legal and tenant-rights groups to help current and former tenants make legal claims for damages. The $2.5 million is separate from any damage awards. A court- appointed claims administrator will hear the complaints and decide whether to award compensation. The Pinnacle Group, which owns about 15,000 apartment units citywide, must also set up a help line and follow new protocols like carefully notifying tenants of plans to increase rents or start evictions. Tenant advocates and housing experts hailed the settlement deal, which was reached in early August, for strengthening tenants' legal rights in cases claiming harassment and unlawful evictions. "This settlement seems to be a significant admission of wrongdoing by Pinnacle," said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development, which represents housing groups. He added that the deal confirmed tenants' assertions that Pinnacle's "misbehavior, harassing" and causing tenants to overpay their rents "was a key part of their business model." But Kenneth K. Fisher, a lawyer for Pinnacle, said the company had settled to avoid the cost of a potentially long trial. "The company has been proud of its record of providing housing for thousands of New York families," he said, "and never felt the allegations had merit." Advocates for residents' and tenants' rights have long claimed that people in rent-regulated apartments owned by the Pinnacle Group were widely intimidated as part of the owner's efforts to empty its buildings to make way for higher-paying tenants. During the housing boom, scores of apartment buildings in far- flung pockets of the city were bought by what housing advocates described as predatory equity buyers, who paid more than what the buildings' rent rolls could support. Tenants routinely found themselves showered with eviction notices, and new owners often ended up walking away from buildings after defaulting on their mortgages. The Pinnacle Group, which spent hundreds of millions of dollars buying hundreds of apartment buildings from May 2004 to May 2006, has consistently denied any wrongdoing, saying it was trying to improve conditions in deteriorating buildings. Yet its practices were scrutinized by lawmakers and law enforcement. In 2006, Pinnacle and the state attorney general's office reached a settlement in which a forensic auditor examined rents for each of Pinnacle's rent-stabilized units. As a result, Pinnacle paid $1 million in rent overcharges and interest to about 300 tenants. In the class-action case, the plaintiffs claimed that Pinnacle had schemed to harass them. They also said Pinnacle had skirted the state's rent regulation and other housing laws and had violated federal racketeering laws. In 2010, a federal judge granted the class-action status without addressing whether Pinnacle had violated the racketeering statute. But the judge said that if the tenants' claims were true, racketeering could indeed have happened. "It means that if you conspire to violate New York laws and displace tenants from a place you are running, you are subject to violating federal RICO conspiracy laws, and you can be sued," said Andrew Scherer, author of "Residential Landlord-Tenant Law in New York" and a consultant to the plaintiffs. News of the deal, which is expected to be completed at a fairness hearing in October, drew mixed reactions from tenants. Bobby Jones, president of the tenant association at Dunbar, a large complex in Harlem that Pinnacle recently lost to foreclosure, said that the deal was "better than nothing," but that Pinnacle had wrought lasting damage on the place. About 45 percent of Dunbar's tenants left their homes or were forced out during Pinnacle's five-year ownership, he said. Mr. Fisher said that the claim was "factually inaccurate," and that during Pinnacle's ownership no units were removed from rent stabilization and that turnover averaged 6 percent a year. Kim Powell, a tenant leader at an existing Pinnacle building, said she and other named plaintiffs were "totally disappointed" with the deal. Among the issues it left unclear, she said, was who would be eligible for compensation. "The two attorneys may be happy with it, but we're not," Ms. Powell said. Yet Richard F. Levy of the firm Jenner & Block, the plaintiffs' lawyer, said the deal was in the best interest of the estimated 22,000 people who could be affected. "Certain matters needed to be compromised," he said, "but this is a very good compromise." PRET A MANGER: Faces Class Action Over Labor Law Violations ----------------------------------------------------------- Rebecca Prescott, writing for FoodBev.com, reports that a class action lawsuit has been filed against Pret a Manger in the US District Court for the Southern District of New York, alleging that the restaurant chain routinely violated federal labor laws. The suit alleges that Pret regularly requires its managers-in- training to work shifts and schedules that result in work weeks of between 40 to 65 hours, but doesn't properly compensate them with overtime pay. By bringing this suit, attorneys McLaughlin & Stern hope to end that practice and recover the wages and overtime pay each manager in training is due under the law. STATE OF FLORIDA: ACLU Files Suit Over Welfare Drug Testing ----------------------------------------------------------- According an article posted at Sunshine State News by Kenric Ward's blog, as threatened, the American Civil Liberties Union has sued the state of Florida in a bid to end drug testing of welfare recipients. The screening program, which went into effect July 1, was branded by the ACLU as a violation of Fourth Amendment rights against unreasonable search and seizure. Filing the case as a class action in U.S. District Court in Orlando, the ACLU listed Luis Lebron as the plaintiff. Mr. Lebron is described as an Orlando-area Navy veteran who applied for benefits from the Temporary Assistance for Needy Families. The state Department of Children and Families, which administers the program, did not have an immediate comment. "We received the notice this morning and are reviewing," DCF spokesman Joe Follick said on Sept. 7. Lane Wright, spokesman for Gov. Rick Scott, said, "It's important we make sure taxpayer money isn't going to help pay for someone's drug habit, but that the money is going to help the children for whom it was intended. That's what this law does. "We're confident we're on solid legal ground. And Congress seems confident too, since they passed a law authorizing states to drug test those who would receive cash assistance," Mr. Wright said. SWIFT TRANSPORTATION: Truckers' Class Action Set for Trial ---------------------------------------------------------- David Tanner, writing for Land Line Magazine, reports that the Arizona Supreme Court ruling guarantees that truckers will get their day in court in a breach-of-contract lawsuit against Swift Transportation Corp. The plaintiffs in the class action claim the company routinely shorts drivers on mileage -- and therefore pay -- and are entitled to compensation. The state's high court moved on Tuesday, Sept. 6, to vacate an appellate decision, which allows a lower court's decision to stand that allows the class to be certified and protected. There are no trial dates yet, but the lead attorney for the plaintiffs is hopeful about truckers' chances in court. "We are pleased that the court agreed with us that Swift drivers deserve to take this case to trial," Rob Carey, a partner in the Phoenix office of Seattle law firm Hagens Berman, said in a statement. "We believe that the company illegally took millions in unpaid wages from its drivers." The plaintiffs claim that the software Swift uses to calculate mileage has been shortchanging drivers by an average of 7 to 10 percent since 1998. "We've got a very good set of facts," Mr. Carey told Land Line Magazine. Mr. Carey's firm filed the lawsuit on Jan. 30, 2004, in Maricopa County, AZ, where Swift is based. The Maricopa County Superior Court initially denied class-action status for the drivers, but after years of going back and forth through the courts, the state's high court action affirms the class and paves the way for a trial. "The effect is we end up with a class certification in place that they (Swift) can't touch now," Mr. Carey said. The plaintiff class includes drivers, contractors or owner- operators that have worked for Swift at any time since Jan. 30, 1998. "All of those people up until today and in the future would be included if the same practice is occurring," Mr. Carey said. "Because of the changes in some of the proportions of legacy contracts versus new contracts and owner-operator contracts, it's important that people who have objective information about what their promises were or the practices, or copies of their contracts, should contact us." Drivers or former drivers can contact the Hagens Berman law firm by e-mailing Swift@hbsslaw.com or by calling 602-840-5900. More information is available at hbsslaw.com/swift_transportation_lawsuit Mr. Carey said the lawsuit could affect more than 10,000 people. He anticipates the discovery period could last eight or nine months leading up to trial. "We're essentially at the very front end of the case," Mr. Carey said. Mr. Carey says his firm could take up additional legal challenges against large motor carriers on the issue of driver compensation. "We're looking at other carriers, by the way. It's not just Swift," he said. TORO CO: Continues to Defend Lawnmower Suit in Canada ----------------------------------------------------- The Toro Company continues to defend a class action lawsuit commenced by purchasers of lawnmowers in Canada, according to the Company's September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 29, 2011. In March 2010, individuals who claim to have purchased lawnmowers in Canada filed class action litigation against the Company and other defendants that (i) contains allegations under applicable Canadian law that are similar to the allegations made by United States plaintiffs, (ii) seeks certification of a class of all persons in Canada who, beginning January 1, 1994, purchased a lawnmower containing a gas combustible engine up to 30 horsepower that was manufactured or sold by the Company and other defendants, and (iii) seeks under applicable Canadian law unspecified compensatory and punitive damages, attorneys' costs and fees, and equitable relief. Management continues to evaluate this Canadian litigation. In the event the Company is unable to favorably resolve this litigation, management is unable to assess at this time whether this litigation would have a material adverse effect on the Company's annual consolidated operating results or financial condition, although an unfavorable resolution or outcome could be material to the Company's consolidated operating results for a particular period. TOYOTA MOTOR: Plaintiffs' Lawyers Want to Limit Depositions ----------------------------------------------------------- Moira Herbst, writing for Reuters, reports that Toyota Motor Corp is battling with plaintiffs' lawyers over how many vehicle owners the company can interview ahead of a potential trial over sudden unintended acceleration claims. Owners of the cars brought suit against Toyota, claiming their cars lost value because they were recalled for safety concerns. Lawyers for the complaining owners are seeking class-action status for the complaints. The lawyers say Toyota wants too much latitude in deposing up to 250 so-called economic loss plaintiffs through 2013. The plaintiffs want to limit the depositions to 50 Toyota owners named in the lawsuit. Toyota and attorneys for the owners presented arguments in court filings on Sep. 6 ahead of a hearing on Sept. 12 before U.S. District Judge James Selna in Santa Ana, California. "The sheer scope of Toyota's proposed discovery is nothing short of stunning," plaintiffs' attorneys wrote. "Proceeding in this blunderbuss fashion is not an efficient mechanism for preparing for the class certifications proceedings." Toyota said in a filing that plaintiffs' proposed plan to limit depositions is unfair. They cite a recent Supreme Court decision in a sex discrimination lawsuit against Wal-Mart that emphasizes the due process rights for corporate defendants in class action lawsuits. "Plaintiffs' proposal unfairly prevents Toyota from creating a full record to oppose class certification and thus infringes on Toyota's due process rights," company lawyers wrote. Claims alleging economic loss are among hundreds of others against the Japanese automaker consolidated in litigation before Judge Selna's court. Plaintiffs allege they were harmed when Toyota failed to disclose or repair problems that made their cars surge forward unexpectedly. Other claims before the court include wrongful death and personal injury lawsuits. The opposing sides differ on other issues, the Sept. 6 filings show. Plaintiffs want a hearing and ruling on class certification -- that is, which plaintiffs can group together in a lawsuit or lawsuits -- by the end of 2012. They also want an economic loss bellwether trial to follow the first bellwether, which will be a personal injury/wrongful death case. A bellwether case is one considered to be representative of others that can act as an indicator of how cases will proceed. Toyota, on the other hand, wants an initial hearing on class certification in January 2013. The company also wants the second bellwether case to be a product liability lawsuit. The plaintiffs' filing said Toyota's proposal "puts the economic loss class actions not just on the 'back burner,' but off the stove completely . . . The Court should reject Toyota's plan and its call for incessant delay." In May, the judge ruled that plaintiffs arguing they lost money because Toyota failed to disclose or repair problems that caused their cars to surge forward unexpectedly could move forward with their claims. But in a setback for plaintiffs the following month, Judge Selna ruled that Toyota owners outside California who seek to recover losses from their vehicles' value cannot pursue their claims under California law. California consumer protection laws are more favorable for plaintiffs than those of most other states. The case is In re Toyota Motor Corp Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, U.S. District Court, Central District of California, No. 10-ml-02151. TURLOCK IRRIGATION DISTRICT: Case Conference Set for Sept. 19 ------------------------------------------------------------- Jonathan Partridge, writing for Patterson Irrigator, reports that despite promises that electric rates would drop after Turlock Irrigation District took over Pacific Gas and Electric Co.'s West Side facilities in December 2003, Patterson Auto Care owner J. Wells said his bills increased due to a facilities fee TID charges its West Side customers. When Mr. Wells reached out to both the state Public Utilities Commission and TID, he learned that he and other West Side customers had no specified elected official to represent them about such matters. "I thought it was a total travesty, and the fact that we don't have anyone on our side was even worse," he said. "It's taxation without representation, basically." Now, Mr. Wells and his wife, Pat, are representing more than 10,000 West Side electric customers in a class-action lawsuit, alleging that the district wrongly avoided annexing the 225- square-mile Westside Service Area before providing power there. Because it was never annexed, residents in the area -- which includes Patterson, Crows Landing, Diablo Grande and Del Puerto Canyon -- do not have the right to vote for board directors as other TID customers do, the suit contends. Patterson attorney Dennis Beougher of Lombardo & Gilles LLP spent about a year researching the matter before drafting the lawsuit, which J. and Pat Wells filed Jan. 5. Mr. Beougher has concluded that the district intentionally avoided annexation because of fears that it would expand its service area beyond legal limits and jeopardize its water rights. Mr. Beougher, one of seven contenders for Patterson's city attorney position, also filed a legal challenge with the state Attorney General's office in December and has helped the city of Patterson complete paperwork to be annexed into TID's service provision district. "All things are proceeding to force TID to come to the table to handle this situation," he said. TID officials would not comment on the matter because of the ongoing litigation. The district's legal counsel has contended in court documents, however, that TID had no legal obligation to get approval from the Local Agency Formation Commission to provide electric service to the West Side, nor did it need to annex the area. If TID had annexed the Westside Service Area, it would be forced to provide all of its services to western Stanislaus County, including water, according to court documents filed by TID's assistant general counsel, David Hobbs. Even if TID had gone through the LAFCo approval process, West Side residents would not automatically be allowed to vote for a board director, Mr. Hobbs stated. The district's legal counsel also contended that the deal that allowed TID to buy PG&E's West Side assets and serve electricity to that region without LAFCo approval was made in accordance with state law. "Plaintiffs have alleged that TID 'ignored' the LAFCo statutory framework with respect to its decision to enter into various agreements such that it could provide electrical services to the Westside Zone," Mr. Hobbs wrote in a March 3 legal response from TID. "In reality, TID relied upon the well-structured statutory framework in determining to first enter into the Westside Agreement with Pacific Gas & Electric Company . . . and to then have PG&E seek the approval of the California Public Utilities Commission." Mr. Hobbs cited agreements with outside jurisdictions made by Modesto Irrigation District and South San Joaquin Irrigation District as proof that annexation was unnecessary for TID to provide electricity outside the district. The district's legal defense also notes that the Public Utilities code provides exemptions for irrigation districts from the LAFCo process under certain conditions, arguing that those conditions apply in this case. Mr. Beougher says that exemption is supposed to be for districts that make contracts directly with end users, such as a city or a business, rather than for a district providing service to a general area, but TID officials say that is not true. One particular beef that several West Side residents have with TID is its Westside Facilities Charge, which the district collects from West Side customers to pay for equipment it bought from PG&E when taking over the Westside Service Area in 2003. As of Dec. 31, $6.9 million had been paid of that fee, with a $12.8 million balance remaining, according to TID officials. While TID officials told city officials and the media back in 2003 that most customers would pay less for electric service from the district than they had under PG&E, some business owners said their bills have risen as a result of the facilities fee. Mr. Wells said the facilities charge cost him $500 to $600 per month at one point. If TID ever decided to allow another utility to provide electricity for the Westside Service Area, it seems West Side residents would not be able to recoup the fees they have paid for the district to buy PG&E's assets, he added. Patterson City Councilman Dominic Farinha has similarly expressed concern about the facilities fee. "It's always been a matter of contention," he said. "Once that fee goes away, are they going to raise their rates in order to compensate for the additional tax flows that they're not getting? Mr. Farinha also is upset that the district is now talking about raising rates even further, and he thinks the West Side should have an advocate on the TID board. TID spokeswoman Michelle Reimers noted that TID has raised its rates twice since taking over the West Side's electric services, but PG&E has raised its rates in recent years, too. While a few customers are paying more than they would pay to PG&E, because the two utilities charge different fees, most customers are paying less, she said. At the same time, TID has improved both its customer service and its electric service infrastructure. City officials are seeking representation on the TID board through annexation efforts of their own. Stanislaus County's LAFCo formally accepted the city's application for annexation Aug. 24, after the City Council voted June 21 in favor of the move. TID has until mid-October to formally oppose the process, if district leaders wish to prevent the process from moving forward. As of Wednesday, Sept. 7, the agency had not received a response from TID about the city's request, said Marjorie Blom, Stanislaus County LAFCo's executive officer. LAFCo was also waiting on some clarifications about the application from Patterson city officials. "It's still really early in the process," Ms. Blom said. So far, the city has spent $7,500 on maps that were submitted to LAFCo, as well as an $8,000 deposit to LAFCo for staff time, most of which city officials expect to get back. Mr. Beougher has briefed council members several times about the issue, and all council members are on board with moving toward annexation, City Manager Rod Butler said. "It's really an issue of trying to use this legal process to make sure that our residents and even residents in other areas that are served have a chance to get on the board of directors," Mr. Butler said. Meanwhile, the case is moving forward in the courts. On March 22, Judge Roger Beauchesne of the Stanislaus County Superior Court dismissed a pleading from TID to throw out the suit. A case management conference is scheduled for Sept. 19. Mr. Beougher speculated that the case might end up resolved in mediation, as TID is between a rock and a hard place because of federal limitations on its boundaries. The Raker Act of 1913, which gave MID, TID and the city of San Francisco access to water from the Hetch Hetchy water system, stipulates that the Modesto and Turlock districts can have only a combined 300,000 acres within their districts. District maps from LAFCo indicate that TID has 308 square miles (or 197,120 acres) within its boundaries and Modesto Irrigation District has about 101,700 acres within its irrigation service area, adding up to nearly 299,000 acres. TID's electric service area alone contains 423,500 acres. Though he would not comment on the litigation, TID spokesman Herb Smart encouraged West Side residents to show up to the district's board meetings in Turlock or to visit its Patterson customer service office, 34 N. Third St. "TID staff and the board of directors are always interested in listening to their customers, whether they reside within or outside of TID's irrigation boundaries," he said. But Mr. Beougher said West Side customers are continually disenfranchised, and the situation needs to be resolved. "The West Side has been the redheaded stepchild of the county for so many years," he said. "I just thought it was another wrong happening to the West Side." UNITED STATES: Keepseagle Class Action Members Get Assistance ------------------------------------------------------------- NewsOn6.com reports that Native American farmers and ranchers met with attorneys on Sept. 7 in the $760 million Keepseagle class action lawsuit settlement. The lawyers were in Oklahoma to help some Native American farmers and ranchers get their part of a settlement from a class-action lawsuit. The settlement comes after a lawsuit claiming that the U.S. Department of Agriculture discriminated against Native Americans in farm loan applications and servicing. Class members who want to file a claim for cash and loan forgiveness must do so by Dec. 27, 2011, according to a release from the Cohen Millstein Sellers & Toll law firm. The groups received assistance in filing claims in meetings held at a Muskogee hotel. The meetings were scheduled to continue from 9:00 a.m. to 5:00 p.m. Thursday, Sept. 8. To find out more or register for a claims package, go to IndianFarmClass.com or call 1-888-233-5506. WAL-MART STORES: Calif. Court Extends Tolling in "Dukes" Suit ------------------------------------------------------------- The United States District Court for the Northern District of California granted in part plaintiffs' motion to extend tolling of the statute of limitations in the gender discrimination class action lawsuit against Wal-Mart Stores, Inc., according to the Company's September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. The Company is a defendant in Dukes v. Wal-Mart Stores, Inc., which was commenced as a class-action lawsuit in June 2001 in the United States District Court for the Northern District of California, asserting that the Company had engaged in a pattern and practice of discriminating against women in promotions, pay, training and job assignments, and seeking, among other things, injunctive relief, front pay, back pay, punitive damages, and attorneys' fees. On June 21, 2004, the district court issued an order granting in part and denying in part the plaintiffs' motion for class certification. As defined by the district court, the class included all women employed at any Wal-Mart domestic retail store at any time since December 26, 1998, who have been or may be subjected to Wal-Mart's challenged pay and management track promotions policies and practices. On August 31, 2004, the United States Court of Appeals for the Ninth Circuit granted the Company's petition for discretionary review of the ruling. On February 6, 2007, a divided three-judge panel of the court of appeals issued a decision affirming the district court's certification order. On February 20, 2007, the Company filed a petition asking that the decision be reconsidered by a larger panel of the court. On December 11, 2007, the three- judge panel withdrew its opinion of February 6, 2007, and issued a revised opinion. As a result, the Company's Petition for Rehearing En Banc was denied as moot. The Company filed a new Petition for Rehearing En Banc on January 8, 2008. On February 13, 2009, the court of appeals issued an Order granting the Petition. On April 26, 2010, the Ninth Circuit issued a divided (6-5) opinion affirming certain portions of the district court's ruling and reversing other portions. On August 25, 2010, the Company filed a petition for a writ of certiorari to the United States Supreme Court seeking review of the Ninth Circuit's decision. On December 6, 2010, the Supreme Court granted the Company's petition for writ of certiorari. On June 20, 2011, the Supreme Court issued an opinion reversing the Ninth Circuit and decertifying the class. On June 24, 2011, the plaintiffs filed a Motion to Extend Tolling of the Statute of Limitations, indicating that they intend to pursue both individual claims and "a more narrowly defined class that would comply with the certification standards set forth by the Supreme Court." On August 19, 2011, the district judge entered an Order granting the motion in part and specifying dates by which any additional claims must be filed. The Company says it cannot reasonably estimate the possible loss or range of loss that may arise from this litigation. WAL-MART STORES: Court Denies Rehearing Bid in "Braun/Hummel" Suit ------------------------------------------------------------------ The court denied Wal-Mart Stores, Inc.'s application for rehearing en banc with regard to the portions of a court opinion that held in favor of the plaintiffs in a wage-and-hour class action lawsuit, according to the Company's September 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2011. The Company is a defendant in Braun/Hummel v. Wal-Mart Stores, Inc., a class action lawsuit commenced in March 2002 in the Court of Common Pleas in Philadelphia, Pennsylvania. The plaintiffs allege that the Company failed to pay class members for all hours worked and prevented class members from taking their full meal and rest breaks. On October 13, 2006, a jury awarded back-pay damages to the plaintiffs of approximately $78 million on their claims for off-the-clock work and missed rest breaks. The jury found in favor of the Company on the plaintiffs' meal-period claims. On November 14, 2007, the trial judge entered a final judgment in the approximate amount of $188 million, which included the jury's back-pay award plus statutory penalties, prejudgment interest and attorneys' fees. By operation of law, post-judgment interest accrues on the judgment amount at the rate of six percent per annum from the date of entry of the judgment, which was November 14, 2007, until the judgment is paid, unless the judgment is set aside on appeal. The Company believes it has substantial factual and legal defenses to the claims at issue, and on December 7, 2007, the Company filed its Notice of Appeal. The Company filed its opening appellate brief on February 17, 2009, plaintiffs filed their response brief on April 20, 2009, and the Company filed its reply brief on June 5, 2009. Oral argument was held before the Superior Court of Appeals on August 19, 2009. On June 10, 2011, the Superior Court of Appeals issued an opinion upholding the trial court's certification of the class, the jury's back pay award, and the awards of statutory penalties and prejudgment interest, but reversing the award of attorneys' fees and remanding it back to the trial court for a downward adjustment. On July 10, 2011, the Company filed an Application for Rehearing En Banc with regard to the portions of the opinion that held in favor of the plaintiffs, which was denied on August 11, 2011. The Company believes it has substantial factual and legal defenses to the claims at issue, and plans to continue pursuing appellate review. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Leah Felisilda, Noemi Irene A. Adala, Joy A. Agravante, Julie Anne Lopez, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2011. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *