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/raid1/www/Hosts/bankrupt/CAR_Public/111215.mbx C L A S S A C T I O N R E P O R T E R Thursday, December 15, 2011, Vol. 13, No. 248 Headlines AIR CANADA: Class Action Over Extra Seat Charges Gets Go-Ahead ALLSTATE CORP: More Than 1,400 Coloradans to Get Compensation APPLE INC: European Commission Probes Alleged E-Book Cartel APPLE INC: Faces Class Action Over "Yellow Dog Contracts" CHICAGO TRIBUNE: Sued Over Undisclosed Subscription Rate Hike CLARK & WASHINGTON: Ex-Client Seeks Class Cert. for Fraud Action COLGATE-PALMOLIVE: Sued Over False Claims on Antibacterial Soap DIGI INTERNATIONAL: Awaits Ruling in IPO Suit Appeal vs. Unit DISTRICT OF COLUMBIA: Ruling Issued on Bid to Lift 1995 Injunction FINCORP INVESTMENTS: Investors to Receive Settlement Payments GRUNENTHAL: Court Reserves Decision on Thalidomide Class Action HORIZON LINES: Settles Puerto Rico Antitrust Suit Opt Out Claims INTERNATIONAL GAME: "Atlantic" Suit Hearing Will Be Set in April INTERNATIONAL GAME: Discovery Still Ongoing in ERISA Class Suit INTERNATIONAL GAME: Discovery Still Ongoing in "IBEW" Class Suit J.CREW GROUP: Awaits Results of Dec. 14 Hearing on Del. Suit Deal K. HOVNANIAN: Court Approves Class Settlement in Sewell Suit KEYUAN PETROCHEMICALS: Lead Plaintiff Deadline Nears KIA MOTORS: Pa. High Court Reverses Counsel Fee Award LIBERTY BEHAVIORAL: 11th Cir. Upholds Class Settlement Approval NCAA: Faces Class Action Over Concussion Prevention Negligence NOAH EDUCATION: Consolidated IPO-Related Suit Fully Settled PANDORA MEDIA: Continues to Face Class Suits Over Privacy Issues PRIMO WATER: Law Firms Seek Lead Plaintiffs in Class Action ROY MARTIN LUMBER: La. High Court Vacates Class Certification SAIC INC: Faces Class Action Over Data Security Breach SAKS INC: Continues to Defend FLSA-Violations Suit in California SIEMENS AKTIENGESELLSCHAFT: Securities Suit Dismissed in March SIGNATURE GROUP: 9th Cir. Affirms Dismissal of Securities Suit SONESTA INTERNATIONAL: Faces Merger-Related Stockholder Suit SOUTH AFRICAN BREAD MAKERS: Cartel Class Action Faces Hurdles SYCAMORE NETWORKS: Awaits Decision on Motion to Dismiss Appeal ULTA SALON: Still Awaits Final Okay of Calif. Suit Settlement UNITED STATES: App. Ct. Vacates Dismissal of Russell Suit * Tax Class Actions Raise Questions on Lawyer's Liability ********* AIR CANADA: Class Action Over Extra Seat Charges Gets Go-Ahead -------------------------------------------------------------- Sidhartha Banerjee, writing for The Canadian Press, reports that disabled travelers across the country who had to pay extra for seats on Air Canada could be in line for compensation as part of a class action lawsuit authorized in Quebec. A judge has approved a suit against Air Canada on behalf of disabled Canadians who had to pay extra for seats over a three- year period. Quebec City law firm BGA Barristers & Solicitors LLP made the announcement public on Dec. 12 after getting the go-ahead from the court. The suit covers disabled individuals and also those with a functional disability related to obesity who faced extra charges for seats adapted to their condition. The suit also includes those travelers who had to pay extra fees when acting as the attendant for a person with a disability. The class action is specifically for people who travelled on a domestic flight from Dec. 5, 2005, to Dec. 5, 2008. Lawyer David Bourgoin, who is representing the plaintiffs, says he's actively seeking someone to represent WestJet Airlines Ltd. clients in the same claim. The initial motion included a WestJet passenger too, but in her ruling, Justice Catherine La Rosa didn't believe the claimant qualified under the "one-person, one-fare" policy. Mr. Bourgoin said the time frame is short to find a WestJet claimant and they are actively looking for one across the country. "The fundamental reasons for the Air Canada judgment apply to WestJet," Mr. Bourgoin said. "It's only because of the representative that WestJet is not part of the class action. "We only have just a couple of weeks to reintroduce WestJet because after that the rights will be definitely lost for all people who flew with WestJet and paid for an extra seat." Since January 2009, disabled or obese people who fly in Canada have been exempt from having to pay for a second seat if they have a medical certificate. The Canadian Transportation Agency ruled in January 2008 that domestic airlines must offer the policy. It estimated it would cost Air Canada about C$7 million a year and WestJet about C$1.5 million a year. The country's top court refused to hear a case put forth by Air Canada and WestJet, which battled the policy through various boards and courts. The Supreme Court of Canada upheld that regulatory ruling in late 2008. Mr. Bourgoin said it's impossible to know just how many people may have flown during the prescribed period, but they'd be entitled to compensation for the flights as well as moral and punitive damages. In the case of Paul Arsenault, who sued Air Canada on behalf of his wheelchair-bound brother Normand, reimbursement for flights and damages amounted to C$2,500. Justice La Rosa's judgment came down in October but the court authorized an official notice to members this week. A spokesman for Air Canada says the company won't comment as the action is before the courts. A spokesman for WestJet also had no comment. ALLSTATE CORP: More Than 1,400 Coloradans to Get Compensation ------------------------------------------------------------- According to Northern Colorado Business Report, more than 1,400 Colorado consumers may be eligible for compensation under a class- action settlement reached in Oklahoma involving Allstate Corp. and American Heritage Life Insurance Co., also known as Allstate Workplace Division. According to the Department of Regulatory Agencies Division of Insurance, more than 226,000 consumers may be affected nationwide. The settlement was approved on Dec. 5 by a federal judge in the U.S. District Court, Western District of Oklahoma. The lawsuit involves denial of claims related to a "Cancer and Dread Disease Expense Policy," and substantially similar policies sold by the defendants and issued between Oct. 24, 2003 and Sept. 30. The original plaintiff, Lona Buck, claimed in her 2008 lawsuit that the policy's language was ambiguous on whether it would cover non-cancercidal drugs, medicines, chemical substances, instruments or devices that could be used in radiation therapy, chemotherapy or immunotherapy. Non-cancercidal treatment is used to build up or support a patient's health prior to or during cancer treatment. Consumers who invested in one of these policies should contact Tony Gould at Brown & Gould at 405-595 0504. APPLE INC: European Commission Probes Alleged E-Book Cartel ------------------------------------------------------- Sonya Angelica Diehn at Courthouse News Service reports that the European Commission is investigating Apple and five publishers over a potential e-books cartel, following the lead of federal class action claims in the United States. The publishers at issue are France-based Hachette Livre, Rupert Murdoch's Harper Collins, U.S.-owned Simon & Schuster, U.K.-based Penguin and Germany's Verlagsgruppe Georg von Holzbrinck, which owns Macmillan. The probe by the European Union's executive branch, announced last week, follows a federal antitrust class action filed against the same companies in California this past August. The investigation is looking at whether so-called agency agreements brokered between Apple and the publishers increased the price of electronic books after Apple's release of the iPad and iBookstore in 2010. In the agency model, vendors sacrifice consumer discounts by allowing publishers to directly set retail prices. Once one retailer implements this model, others may be forced to follow suit in order to secure sales rights. Apple's actions have forced Amazon to switch over to this model, the class action claims. This has made the price of e-books increase by as much as half, the suit says. Apple allegedly implemented the agreements to dominate the e-book market and prevent devices such as Amazon's Kindle e-book reader from breaking into other media markets. The U.S. class action accuses Apple of using "a virtually identical strategy to gain a virtual monopoly on the distribution of digital music files" through iTunes. The European Commission had raided several e-book publishers across Europe this past March. The U.K.'s trade office ran a parallel investigation, which it closed before the commission made its announcement. The AP reported that Pearson and Holtzbrinck have denied any wrongdoing. Harper Collins and Simon & Schuster are apparently cooperating with the investigation, while Apple and Hachette Livre declined to comment. The five publishers dominate that sector, while Apple has become one of the world's largest technology companies. APPLE INC: Faces Class Action Over "Yellow Dog Contracts" --------------------------------------------------------- Courthouse News Service reports that a class action claims Apple uses "yellow dog contracts" to make its call-center help workers pay for their own training, business expenses, taxes, Medicare and unemployment insurance. A copy of the Complaint in Hilton v. Apple Inc., et al., Case No. 111CV214597 (Calif. Super. Ct., Santa Clara Cty.), is available at: http://www.courthousenews.com/2011/12/12/SuingApple.pdf The Plaintiff is represented by: Norman B. Blumenthal, Esq. Kyle R. Nordrehaug, Esq. Aparajit Bhowmik, Esq. BLUMENTHAL, NORDREHAUG & BHOWMIK 2255 Calle Clara La Jolla, CA 92037 Telephone: (858) 551-1223 - and - Mark A. Osman, Esq. LAW OFFICES OF MARK A. OSMAN 401 West A Street, 17th Floor San Diego, CA 92101 Telephone: (619) 232-8862 CHICAGO TRIBUNE: Sued Over Undisclosed Subscription Rate Hike ------------------------------------------------------------- Courthouse News Service reports that a class action claims the Chicago Tribune increased its quarterly subscription rate this year from $42.50 to $97.50 and billed subscribers' debit or credit cards for it without informing them of the increase or getting their consent. A copy of the Complaint in Naedler v. Chicago Tribune Company, Case No. 11CH42347 (Ill. Cir. Ct., Cook Cty.), is available at: http://www.courthousenews.com/2011/12/12/Tribune.pdf The Plaintiff is represented by: Daniel A. Edelman, Esq. Cathleen M. Combs, Esq. James O. Latturner, Esq. Francis R. Greene, Esq. EDELMAN, COMBS, LATTURNER & GOODWIN, L.L.C. 120 S. LaSalle Street, 18th Floor Chicago, IL 60603 Telephone: (312) 739-4200 CLARK & WASHINGTON: Ex-Client Seeks Class Cert. for Fraud Action ---------------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that a Georgia man claiming Clark & Washington PC's advertisements are misleading and its fee structure for consumer bankruptcy representation is fraudulent asked a federal judge on Dec. 9 to certify his putative class action. Law360 relates that Richard Lundquist III filed the suit against the firm in September on behalf of Clark clients that paid the firm to represent them in their Chapter 7 bankruptcies and were instructed to fill out postdated checks that allegedly were not cashed when the firm said they would be. COLGATE-PALMOLIVE: Sued Over False Claims on Antibacterial Soap --------------------------------------------------------------- David Gialanella, writing for New Jersey Law Journal, reports that a putative class action claims Colgate-Palmolive's antibacterial liquid hand soap has a dirty little secret: It's not a better germ killer than ordinary soap. The suit points to government findings that Softsoap Antibacterial's active ingredient gives no edge over other soaps and may be harmful. DIGI INTERNATIONAL: Awaits Ruling in IPO Suit Appeal vs. Unit ------------------------------------------------------------- Digi International Inc. is awaiting a court decision on plaintiffs' motion to dismiss an appeal in the consolidated shareholder lawsuit involving a Company subsidiary, according to the Company's November 29, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended September 30, 2011. On April 19, 2002, a consolidated amended class action complaint was filed in the United States District Court for the Southern District of New York asserting claims relating to the initial public offering ("IPO") of the Company's subsidiary NetSilicon, Inc. and approximately 300 other public companies. The Company acquired NetSilicon on February 13, 2002. The complaint names the Company as a defendant along with NetSilicon, certain of its officers and certain underwriters involved in NetSilicon's IPO, among numerous others, and asserts, among other things, that NetSilicon's IPO prospectus and registration statement violated federal securities laws because they contained material misrepresentations and/or omissions regarding the conduct of NetSilicon's IPO underwriters in allocating shares in NetSilicon's IPO to the underwriters' customers. The Company believes that the claims against the NetSilicon defendants are without merit and have defended the litigation vigorously. Pursuant to a stipulation between the parties, the two named officers were dismissed from the lawsuit, without prejudice, on October 9, 2002. As previously disclosed, the parties advised the District Court on February 25, 2009, that they had reached an agreement-in-principle to settle the litigation in its entirety. A stipulation of settlement was filed with the District Court on April 2, 2009. On June 9, 2009, the District Court preliminarily approved the proposed global settlement. Notice was provided to the class, and a settlement fairness hearing, at which members of the class had an opportunity to object to the proposed settlement, was held on September 10, 2009. On October 6, 2009, the District Court issued an order granting final approval to the settlement. Ten appeals initially were filed objecting to the definition of the settlement class and fairness of the settlement. Five of those appeals were dismissed with prejudice on October 6, 2010. On May 17, 2011, the Court of Appeals dismissed four of the remaining appeals and remanded the final appeal to the District Court to determine whether the appellant has standing to object to the settlement. On August 25, 2011, the District Court ruled that the last remaining objector lacks standing to object to the settlement. That objector has appealed that ruling to the Court of Appeals, and the plaintiffs have moved to dismiss that appeal. Under the settlement, the Company's insurers are to pay the full amount of settlement share allocated to the Company, and the Company would bear no financial liability beyond the Company's deductible of $250,000 per claim. While there can be no guarantee as to the ultimate outcome of this pending lawsuit, the Company expects that its liability insurance will be adequate to cover any potential unfavorable outcome, less the applicable deductible per claim. As of September 30, 2011, the Company has an accrued liability for the anticipated settlement of $300,000, which the Company believes is adequate and reflects the amount of loss that is probable, and a receivable related to the insurance proceeds of $50,000. This $50,000 represents the anticipated settlement of $300,000 less the Company's $250,000 deductible. In the event the Company should have losses that exceed the limits of the liability insurance, the losses could have a material adverse effect on the Company's business and its consolidated results of operations or financial condition. DISTRICT OF COLUMBIA: Ruling Issued on Bid to Lift 1995 Injunction ------------------------------------------------------------------ The U.S. Court of Appeals, District of Columbia Circuit, reversed and remanded the case captioned Nikita Shonta Petties, by her parent and next friend, Judy Martin, et al. v. District of Columbia, et al., Case No. 10-7149, for the district court to determine whether, in view of changed circumstances, the District of Columbia's motion to vacate a preliminary injunction and related payment orders should be granted. The injunction was issued in 1995 in response to the class action complaint alleging that the District of Columbia was violating the Individuals with Disabilities Education Act, 20 U.S.C. Sec. 1400 et seq., by failing to timely pay private providers of special education services and thereby jeopardizing students' special education placements. In its request, the District of Columbia argued that after 14 years, it had "cured the systemic violations of law upon which the preliminary injunction and other payment orders were predicated" and was "in compliance with the [latest] payment order." A copy of the Appeals Court's Dec. 2, 2011 order is available at http://is.gd/9UJ7Lqfrom Leagle.com. FINCORP INVESTMENTS: Investors to Receive Settlement Payments ------------------------------------------------------------- 4-traders reports that investors who participated in a class action settlement negotiated by Slater & Gordon with Sandhurst Trustees, who acted as trustee for failed financial company Fincorp Investments, will receive their settlement payments in time for Christmas. The payments will mark an end to the Fincorp class action for the predominantly mum and dad investors who lost their investments when Fincorp collapsed in 2007. The AUD29 million class action settlement was approved by the Federal Court of Australia in May this year. Slater & Gordon litigation lawyer Odette McDonald said the payments would offer some closure to more than 5,000 people who were part of the class action. "For the last four years, through no fault of their own, many people who put their savings and their trust in Fincorp have had a difficult time financially and emotionally," Ms. McDonald said. "We are proud to be able to give these people some sort of resolution as they receive their settlement payments this month." The class action settlement covers investors who had purchased secured and/or unsecured notes issued by Fincorp on or after 7 December 2004 and held those notes as at March 23, 2007, or who purchased secured and/or unsecured notes prior to December 7, 2004 and rolled the investment over after that date. Ms. McDonald said that while the vast majority of group members had been sent checks, there was a small group of investors who Slater & Gordon had been unable to contact and these people may not realize that they are eligible to receive a settlement payment. "As it stands, we have processed checks for approximately 4,400 of our 5,390 class action group members," Ms. McDonald said. "It is expected that these people will receive their checks within the next week. "There are, in addition, several hundred class action members who are in the later stages of finalizing their documentation necessary to receive their settlement payment. "However, there are a small number of people eligible to recover compensation who we have been unable to contact. "While we are making every effort to locate these people, relevant Fincorp investors who have moved in recent years and have not updated their details should contact us no later than January 20, 2012 to ensure that they receive the funds they are entitled to," Ms. McDonald said. GRUNENTHAL: Court Reserves Decision on Thalidomide Class Action --------------------------------------------------------------- Peta Carlyon, writing for ABC News, reports that the maker of the drug thalidomide is fighting to defend an Australian class action in Germany. The drug was prescribed for pregnant women in the 1950s and '60s and caused large numbers of deaths and birth defects. Victorian woman Lynette Rowe was born without limbs and is leading a new class action on behalf of Australian victims against thalidomide manufacturer Grunenthal. But the company wants the case heard in its homeland under German laws. Lawyers for Grunenthal have told the court that having the case heard in Australia would be vexatious and an abuse of process. They said although Ms. Rowe would find travelling to Europe extremely difficult, her circumstances should not be a major consideration. The drug company's lawyers say there is no need for her to even attend the trial. The Victorian Supreme Court has reserved its decision. HORIZON LINES: Settles Puerto Rico Antitrust Suit Opt Out Claims ---------------------------------------------------------------- Horizon Lines, Inc., entered into a settlement agreement to resolve the claims of those who opted out of a certain Puerto Rico direct purchaser settlement, according to the Company's November 29, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. On November 23, 2011, Horizon Lines, Inc. and certain of its subsidiaries (collectively, "Horizon") and attorneys representing those shippers who opted out of the Puerto Rico direct purchaser settlement and have indicated an intention to pursue an antitrust claim against Horizon related to the Puerto Rico tradelane (such persons referred to collectively as the "Settling Claimants") entered into a Settlement Agreement (the "Settlement Agreement"). Numerous Puerto Rico direct purchaser antitrust class action lawsuits were filed against Horizon in 2008 on behalf of customers who purchased domestic ocean shipping services from Horizon and other ocean carriers in the Puerto Rico tradelane between May 2002 and April 2008. Horizon entered into a settlement agreement with the class in June 2009, and final court approval was granted in September 2011. The Settling Claimants elected to opt-out of the settlement class to preserve their rights, if any, against Horizon relating to the Puerto Rico tradelane, and the Settlement Agreement resolves the claims of all of the Settling Claimants. Pursuant to the terms of the Settlement Agreement, in exchange for the full, complete and final settlement of the alleged claims from the Settling Claimants, Horizon agreed to pay the Settling Claimants an aggregate amount of $13,750,000, as follows: (a) $5,750,000 on or before December 8, 2011; (b) $4,000,000 on or before June 30, 2012; and (c) $4,000,000 on before December 24, 2012. Horizon's Statement In a statement dated November 29, 2011, Horizon Lines, Inc. announced that it has entered into a settlement agreement with all of the remaining significant shippers who opted out of the Puerto Rico direct purchaser antitrust class action settlement. Horizon Lines agreed to settle with these shippers at a total cost to the company of $13.75 million in exchange for full release of all antitrust claims. Under the terms of the settlement agreement, Horizon Lines will make a payment of $5.75 million within 10 business days of the November 23, 2011, effective date, a payment of $4.0 million by June 30, 2012, and a final payment of $4.0 million by December 24, 2012. "We are very pleased with this settlement, which brings to closure our last known major financial exposure relating to antitrust claims involving the Puerto Rico tradelane," said Michael T. Avara, Executive Vice President and Chief Financial Officer. "It also eliminates the potential for protracted and costly litigation." The agreement effectively resolves claims related to class action lawsuits that were filed against Horizon Lines in 2008 on behalf of customers who purchased domestic ocean shipping services from the company and other ocean carriers in the Puerto Rico tradelane between May 2002 and April 2008. Horizon Lines entered into a settlement agreement with the class in June 2009, which received final court approval in September 2011. Some shippers opted out of the class settlement, and Horizon has previously announced settlement with a number of them. The November 29 announcement resolves claims of all the remaining significant opt outs. About Horizon Lines Horizon Lines, Inc. is a domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.- flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii and Puerto Rico. The Company also provides integrated, reliable and cost competitive logistics solutions. Horizon Lines, Inc., is based in Charlotte, N.C., and trades on the OTCQB Marketplace under symbol HRZL. INTERNATIONAL GAME: "Atlantic" Suit Hearing Will Be Set in April ---------------------------------------------------------------- Argument on a motion to certify a class in the lawsuit involving subsidiaries of International Game Technology will be scheduled for hearing in April 2012, according to the Company's November 30, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended October 1, 2011. In May 2010, Atlantic Lotteries commenced an action against International Game Technology, VLC, Inc. and IGT-Canada, wholly- owned subsidiaries of International Game Technology, and other manufacturers of video lottery machines in the Supreme Court of New Foundland and Labrador seeking indemnification for any damages that may be awarded against Atlantic Lotteries in a class action lawsuit, captioned Rice (formerly Piercey) v. Atlantic Lotteries, also filed in the Supreme Court of New Foundland and Labrador. A motion for class certification has been filed by plaintiff. Argument of the motion will be scheduled for hearing in April 2012. International Game Technology is a global company specializing in the design, manufacture, and marketing of electronic gaming equipment and systems products. The Company is a supplier of gaming products in substantially all legal jurisdictions worldwide and provides a diverse offering of quality products and services at competitive prices, designed to increase the potential for gaming operator profits by enhancing the player's experience. INTERNATIONAL GAME: Discovery Still Ongoing in ERISA Class Suit --------------------------------------------------------------- On October 2, 2009, two putative class action lawsuits were filed on behalf of participants in International Game Technology's employee pension plans, naming as defendants the Company, the IGT Profit Sharing Plan Committee, and several current and former officers and directors. The actions, filed in the U.S. District Court for the District of Nevada, are captioned Carr et al. v. International Game Technology et al., Case No. 3:09-cv-00584, and Jordan et al. v. International Game Technology et al., Case No. 3:09-cv-00585. The actions were consolidated. The consolidated complaint (which seeks unspecified damages) asserts claims under the Employee Retirement Income Security Act, 29 U.S.C Sections 1109 and 1132. The consolidated complaint is based on allegations similar to those in securities and derivative lawsuits against the Company, and further alleges that the defendants breached fiduciary duties to Plan Participants by failing to disclose material facts to Plan Participants, failing to exercise their fiduciary duties solely in the interest of the Participants, failing to properly manage Plan assets, and permitting Participants to elect to invest in Company stock. In March 2011, defendants' motion to dismiss the consolidated complaint was granted in part and denied in part. Discovery is proceeding. No further updates were reported in the Company's November 30, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended October 1, 2011. International Game Technology is a global company specializing in the design, manufacture, and marketing of electronic gaming equipment and systems products. The Company is a supplier of gaming products in substantially all legal jurisdictions worldwide and provides a diverse offering of quality products and services at competitive prices, designed to increase the potential for gaming operator profits by enhancing the player's experience. INTERNATIONAL GAME: Discovery Still Ongoing in "IBEW" Class Suit ---------------------------------------------------------------- On July 30, 2009, International Brotherhood of Electrical Workers Local 697 filed a putative securities fraud class action in the U.S. District Court for the District of Nevada, alleging causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act against International Game Technology and certain of its current and former officers and directors. The complaint alleges that between November 1, 2007, and October 30, 2008, the defendants inflated IGT's stock price through a series of materially false and misleading statements or omissions regarding IGT's business, operations, and prospects. In April 2010, plaintiffs filed an amended complaint. In March 2011, defendants' motion to dismiss that complaint was granted in part and denied in part. The Court found that the allegations concerning statements about the seasonality of game play levels and announcements of projects with Harrah's and City Center were sufficient to state a claim. Plaintiffs did not state a claim based on the remaining statements about earnings, operating expense, or forward-looking statements about play levels and server-based technology. Discovery is proceeding. No further updates were reported in the Company's November 30, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended October 1, 2011. International Game Technology is a global company specializing in the design, manufacture, and marketing of electronic gaming equipment and systems products. The Company is a supplier of gaming products in substantially all legal jurisdictions worldwide and provides a diverse offering of quality products and services at competitive prices, designed to increase the potential for gaming operator profits by enhancing the player's experience. J.CREW GROUP: Awaits Results of Dec. 14 Hearing on Del. Suit Deal ----------------------------------------------------------------- J.Crew Group, Inc. is awaiting results of a December 14, 2011 hearing over a proposed settlement resolving a consolidated class action lawsuit pending in Delaware, according to the Company's December 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended October 29, 2011. J.Crew Group, Inc. and its wholly owned subsidiaries was acquired on March 7, 2011, through a merger 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"). 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 its common stock traded on the New York Stock Exchange. In connection with the Acquisition, between November 24, 2010, and December 16, 2010, sixteen purported class action complaints were filed against some or all of the following: the Company, certain officers of the Company, members of the Company's Board of Directors, Parent, J.Crew Group, Inc., TPG, TPG Fund VI and LGP. The plaintiffs in each of these complaints alleged, among other things, (1) that certain officers of the Company and members of the Company's Board breached their fiduciary duties to the Company's public stockholders by authorizing the Acquisition for inadequate consideration and pursuant to an inadequate process, and (2) that the Company, TPG and LGP aided and abetted the other defendants' alleged breaches of fiduciary duty. The purported class action complaints sought, among other things, an order enjoining the consummation of the Acquisition, an order rescinding the Acquisition to the extent it is consummated and an award of compensatory damages. 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 says it 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 has been submitted to the Delaware Court of Chancery. The parties have agreed to stay the MOU Enforcement Action pending approval of the Proposed Settlement by the Court of Chancery. On November 15, 2011, the plaintiffs in the Delaware Action filed their opening brief in support of the Proposed Settlement, in which they also sought an award of attorneys' fees and expenses in the total amount of $9.0 million. A hearing on whether to approve the Proposed Settlement will be held before the Court of Chancery on December 14, 2011. If the Proposed Settlement is approved, the Delaware Action and the MOU Enforcement Action will be dismissed, on the merits, with prejudice. 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. In the third quarter of fiscal 2011, the Company (i) recognized a receivable of $10.7 million for estimated insurance recovery of the litigation settlement and (ii) recorded an expense, net of estimated insurance recovery, of $7.1 million for attorneys' fees. 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 its financial condition or results of operations. K. HOVNANIAN: Court Approves Class Settlement in Sewell Suit ------------------------------------------------------------ Judge John E. Steele approved a settlement agreement resolving the class action captioned Randolph Sewell, Daphne Sewell, Moses Eshkenazi and Therese Eshkenazi, individually and on behalf of all others similarly situated vs. D'Alessandro & Woodyard, Inc.; Gates, D'Alessandto & Woodyard, LLC; K. Hovnanian First Homes, LLC; First Home Builders of Florida; First Home Builders of Florida I, LLC; Jan Baillargeon, as personal representative of the estate of Frank D'Alessandro, deceased; Samir Cabrera; Honora Kreitner; Bruce A. Robb; and Patrick Logue, Case No. 2:07-cv-343- FtM-29SPC (M.D. Fla.). The settlement provides for payment of an agreed amount plus mutual exchange of releases. On October 18, 2011, the Court conditionally certified a Class of all persons who purchased one or more real properties for investment purposes from First Home Builders of Florida either in Cape Coral or Lehigh Acres, Florida, between September 1, 2003, and July 31, 2005, who suffered a monetary loss on their properties. In its December 6, 2011 ruling, the Court granted final certification of the Class for purposes of the settlement. Randolph Sewell, Daphne Sewell, Moses Eshkenazi, and Therese Eshkenazi serve as Class Representatives. Becker & Poliakoff, P.A. is approved to serve as Class Counsel. The Court awarded Becker & Poliakoff $1,080,000 in attorney fees and $50,000 in costs and expenses, all to be paid from the Settlement Payment. A copy of the District Court's December 6, 2011 final order is available at http://is.gd/mrO784from Leagle.com. KEYUAN PETROCHEMICALS: Lead Plaintiff Deadline Nears ---------------------------------------------------- The Rosen Law Firm, P.A. reminds investors of the important January 17, 2012 lead plaintiff deadline in the class action lawsuit filed by the firm on behalf of investors who purchased the common stock of Keyuan Petrochemicals, Inc. during the period from August 16, 2010 through October 7, 2011. To join the Keyuan class action, visit the firm's Web site at http://rosenlegal.comor call Phillip Kim, Esq., toll-free, at 866-767-3653; you may also e-mail pkim@rosenlegal.com for information on the class action. The Complaint asserts violations of the federal securities laws against Keyuan and its officers and directors, for issuing materially false and misleading financial information. The Complaint asserts that during the Class Period the Company failed to properly disclose material related party transactions that rendered the Company's periodic reports filed with the SEC false and misleading. The Complaint alleges that this adverse information caused Keyuan's stock price to lose nearly half of its value -- devastating investors. If you wish to serve as lead plaintiff, you must move the Court no later than January 17, 2012. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact: Laurence Rosen, Esq. Phillip Kim, Esq. The Rosen Law Firm P.A. 275 Madison Avenue, 34th Floor New York, NY 10016 Telephone: (212) 686-1060 Weekends Telephone: (917) 797-4425 Toll Free: 1-866-767-3653 Fax: (212) 202-3827 E-mail: lrosen@rosenlegal.com pkim@rosenlegal.com The Rosen Law Firm -- http://www.rosenlegal.com-- represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. KIA MOTORS: Pa. High Court Reverses Counsel Fee Award ----------------------------------------------------- The Supreme Court of Pennsylvania, Eastern District, affirmed in part and reversed in part the decisions of the Superior Court dated October 24, 2007, and February 8, 2008 in the lawsuit entitled, Shamell Samuel-Bassett v. Kia Motors America, Inc. The reversal, the Supreme Court clarified, is limited to the lower courts' decision to permit application of a risk of loss multiplier to enhance the attorneys' fee award beyond the amount of the lodestar. The Supreme Court remanded to the trial court for adjustment of the attorneys' fees. Ms. Samuel-Bassett filed the class action lawsuit, on her behalf and other similarly situated, in January 2011 in the Philadelphia Court of Common Please in relation to alleged defective brakes of the 2000 Sephia vehicle model sold by Kia Motors. Kia Motors unsuccessfully defended the lawsuit as the Superior Court affirmed certification of the class by the trial court and the amount of damages and litigation costs awarded to the class. The State Supreme Court concluded that the trial court did not abuse its discretion in approving certification of the class. Chief Justice Ronald D. Castille penned the Supreme Court opinion. Justices J. Michael Eakin, Max Baer, Debra Todd, and Seamus P. McCaffery joined the opinion. Justice Thomas G. Saylor, in a dissenting opinion, criticized the trial court for failing to manage the class action proceedings fairly and efficiently to account for differences in out-of-pocket damages incurred by the individual class members. The trial court agreed with the plaintiff that class counsel was entitled to an attorneys' fee award equal to a risk multiplier of 1.375 times the $3 million lodestar, for a total of $4.125 million. However, the Supreme Court stated that the lower courts considered impermissible factors in enhancing the attorney's fee award. A copy of the Supreme Court's Dec. 2, 2011 opinion is available at http://is.gd/z5V1gZfrom Leagle.com. LIBERTY BEHAVIORAL: 11th Cir. Upholds Class Settlement Approval --------------------------------------------------------------- The U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court's decision approving a class-action settlement agreement in a conditions-of-confinement suit. Michael C. Donovan, proceeding pro se, appeals the district court's judgment approving the settlement in the lawsuit, which was brought pursuant to 42 U.S.C. Sec. 1983, against the Florida Civil Commitment Center. Mr. Donovan argues (1) that the FCCC is violating federal law by failing to provide an effective sex offender treatment program that would allow him to meet the requirements for release from involuntary civil commitment; (2) that the FCCC is providing inadequate mental health services that would allow him to meet the requirements for release from involuntary civil commitment; and (3) that the FCCC is violating his right to procedural due process through its use of punitive confinement. The appellate case is is ROGER G. CANUPP, individually and on behalf of a Class of all persons similarly situated, et al., Plaintiffs-Appellees, MICHAEL C. DONOVAN, Movant-Appellant, v. LIBERTY BEHAVIORAL HEALTHCARE CORP., et al., Defendants, GEORGE H. SHELDON, Secretary of the Department of Children and Families, Defendant-Appellee, No. 10-10135 (11th Cir.). The panel consists of Circuit Judges Gerald Bard Tjoflat, James Larry Edmondson and Phyllis A. Kravitch. A copy of the Eleventh Circuit's Dec. 1, 2011 order is available at http://is.gd/EpRqUcfrom Leagle.com. NCAA: Faces Class Action Over Concussion Prevention Negligence -------------------------------------------------------------- Adam Sweeney, writing for The Courier, reports that former Russellville High School football standout Derek Owens is one of four plaintiffs in a class action lawsuit against the NCAA, alleging the organization has been negligent in raising awareness and implementing proper treatment of brain injuries. Mr. Owens, who was selected to The Courier's Tri-County Team in 2007, led the Cyclones in receptions and yards in '07 with 91 catches for 1,164 yards and 14 touchdowns. Mr. Owens, who also participated in baseball and basketball at RHS, received a college scholarship from the Arkansas Activities Association's Scholar- Athlete Program and was inducted into the RHS Athletic Hall of Fame in 2008. Mr. Owens played football at the University of Central Arkansas (UCA) until sustaining a concussion during a punt return against the University of Tulsa. According to the lawsuit, Mr. Owens was not checked out on the sidelines following the play, and he did not recognize the symptoms of head injury or concussion until being diagnosed with post-concussion syndrome after his grades began to drop. After Mr. Owens, who scored a 32 on his ACT, lost his academic scholarship at the university, he visited his family doctor who said his symptoms were linked to concussion. According to the lawsuit filed Nov. 21, Mr. Owens and the other plaintiffs -- Adrian Arrington, a former football player with Eastern Illinois University; Mark Turner, a former football player at Fordham University in New York; and Angela Palacios, a former soccer player at Ouachita Baptist University in Arkadelphia -- are seeking award of compensatory damages, injunctive relief requiring the NCAA to adopt corrective measures and the establishment of a medical monitoring program. Among the corrective measures sought in the lawsuit are the change of coaching tackling methodologies which can cause head injuries, the implementation of system-wide "return to play" guidelines for student-athletes who have sustained concussions, the implementation of system-wide guidelines for screening and detection of head injuries and the implementation of legislation addressing the treatment and eligibility of student-athletes who have sustained multiple concussions. Features of the proposed medical monitoring program include establishing a trust fund to pay for medical monitoring of all past, current and present NCAA student athletes, notifying medical monitoring class members in writing they may require frequent medical monitoring and providing information to team physicians to aid them in detecting concussions or sub-concussions and to assist them in determining when a player is subjected to an increased risk of harm. The lawsuit states the NCAA has failed to meet an item in its own constitution stating its responsibility of each member institution "to protect the health of and provide a safe environment for each of its participating student athletes." The suit also notes shortcomings in all areas discussed in the desired corrective measures. Dr. Jason Warnick, an assistant professor of psychology at Arkansas Tech University who holds a Ph.D. in experimental psychology with an emphasis in behavioral neuroscience and has conducted extensive research on biomedical topics and sports psychology, said the symptoms of concussion are wide-ranging. "The symptoms are pretty vast," Dr. Warnick said. "That's what makes this such a potentially troubling condition. You can have anything from headaches, nausea, vomiting. One of the classic or hallmark features is kind of fuzzy thinking. It affects executive functioning -- the ability to plan tasks, order tasks properly -- which of course probably comes into play with this lawsuit. . . . It could definitely harm someone who is in an educational environment -- their ability to study, memorize things, complete things on time. One of the occasional features is some memory loss and memory problems that can go on for some time." Dr. Warnick said, in some cases, victims of concussion may undergo drastic personality changes. "One of the biggest problems with football injuries is you're going headfirst into another player," Dr. Warnick said. "When you have that kind of impact to the front of the head, sometimes there's a propensity to have frontal lobe injuries. The frontal lobe is so important for a lot of things. One of the things is personality changes. One of the things the frontal lobe is important for is our ability to inhibit our behavior. If our boss were to come in and yell at me for five minutes, I could sit here and think, 'What a jerk!' and still go about the business of getting my job done. Without that ability to inhibit those thoughts, your boss may come in, yell at you and you're going to be more likely to say, 'Shut up, jerk!' You're not going to be able to inhibit that. As far as improving screening procedures, Dr. Warnick said teams could implement pre-game and post-game screenings. "You have to have a baseline to work off of," Dr. Warnick said. "You need to know what this player is like when they're healthy, not just, 'Are you feeling OK?' but an objective test to gauge when this individual is acting differently. That is the key thing that has to be done. It falls back on coaches and trainers using objective methods to protect their players. We know a lot of football players are too brave for their own good. They're going to go out on the field whether they can walk or not, let alone if they have a headache. It's very hard to see those symptoms. If they ask, 'Do you feel OK after that hit?' they'll say, 'Sure, send me back out.' There are a lot of screening methods that can be done in just a matter of minutes -- very fast accurate screening techniques to look for signs of a concussion. But the key is having those baseline screenings so you know what your player is like before the game ever starts to see if there is a difference." Dr. Warnick said setting specific guidelines for when a player who suffered a concussion could safely return to play would be difficult based on the varied nature of the injury. "The time can vary so drastically," Dr. Warnick said. "You can see someone that maybe after a week on a very minor concussion where all of a sudden their ratings on these tests for concussion start returning normal. Then sometimes people can be out for over six months, depending on the severity of the concussion. That really is the key thing. It's individual based. If we had someone come in and say, 'I have a cold.' We know that within five to seven days, they'll be back to normal. With a concussion, it is so varied and so individualized. It is a fairly major medical event. It has to be very closely watched." NOAH EDUCATION: Consolidated IPO-Related Suit Fully Settled ----------------------------------------------------------- A consolidated securities class action lawsuit arising from Noah Education Holdings Ltd.'s 2007 initial public offering has been fully settled, the Company disclosed in its November 30, 2011, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended June 30, 2011. On October 27, 2008, a securities class action lawsuit, entitled Seidel v. Noah Education Holdings, Ltd. et al., Case No. 08-Civ- 9203 was filed in the United States District Court for the Southern District of New York against the Company in connection with its October 2007 initial public offering. The plaintiffs in this case allege that the registration statement of the Company's October 2007 initial public offering purported to warn about the potential impact of increases in component costs, but failed to disclose that the Company was then experiencing increased raw material costs. The plaintiffs allege federal securities law violations and seek unspecified damage. On November 3, 2008, two additional securities class action lawsuits, entitled Schapiro v. Noah Education Holdings, Ltd. et al., Case No. 08-Civ-9427 and Sebik v. Noah Education Holdings, Ltd. et al., Case No. 08-Civ- 9509 were filed in the United States District Court for the Southern District of New York against the Company with substantially the same allegation. The court has consolidated these complaints into a single action and the consolidated complaint added a new allegation, claiming the registration statement of the Company's October 2007 initial public offering failed to disclose that one model of its digital learning device (DLD) products did not include a recycling warning sticker required under Chinese laws. The Company filed a motion to dismiss the consolidated case. The court granted the Company's motion, finding that plaintiffs' complaint failed to state a claim as a matter of law. The court dismissed the complaint with prejudice. Plaintiffs filed a notice of appeal. On September 9, 2010, the Company signed a memorandum of understanding, agreeing to settle the case for US$1.75 million, which will be covered by the Company's insurance policy. As of November 30, 2011, the Company says the case has been fully settled. PANDORA MEDIA: Continues to Face Class Suits Over Privacy Issues ---------------------------------------------------------------- Pandora Media, Inc., continues to face class action lawsuits relating to its iPhone and iPad applications and Android mobile applications, according to the Company's November 29, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended October 31, 2011. Between December 2010 and February 2011, three putative class action lawsuits were filed against Pandora in the U.S. District Court for the Northern District of California, alleging that it, along with other defendant corporations, unlawfully accessed and transmitted personally identifiable information of the plaintiffs in connection with their use of iPhone and iPad applications, and seeking damages and injunctive relief. These three cases were subsequently consolidated into one matter, In re iPhone Application, and Pandora was not named as a defendant in the amended consolidated complaint, although the Company is still subject to discovery requests. On December 30, 2010, a similar putative class action lawsuit was filed in the Superior Court of the Province of Quebec, District of Montreal, Canada. On April 1, 2011, plaintiffs' counsel confirmed to Pandora's counsel that plaintiffs concede Pandora's application cannot be downloaded in Canada and therefore plaintiffs will, as soon as the court's procedures permit, file a voluntary dismissal of the complaint as against Pandora. On January 7, 2011, a putative class action lawsuit was filed against Pandora in the Circuit Court of Washington County, Arkansas, seeking damages for the alleged unauthorized access and use of plaintiffs' computers through the placement of embedded Adobe Flash cookies. Between March and June 2011, six putative class action lawsuits were filed against Pandora in the U.S. District Courts for the Southern District of New York, the District of Alabama, the Central District of California, and the District of Puerto Rico alleging that it, along with other defendant corporations, unlawfully accessed and transmitted personally identifiable information of the plaintiffs in connection with their use of iPhone and iPad applications, and seeking damages and injunctive relief. Petitions have been filed to transfer all of these actions to the Northern District of California to be litigated together with the In re iPhone Application case. In May 2011, a putative class action lawsuit was filed in the United States District Court for the Middle District of Florida against Google, Inc. In June 2011, the complaint was amended to name Pandora as a defendant. The complaint alleges that the defendant class created, collected or transferred user location data or other sensitive user information to Google and seeks damages and injunctive relief. The complaint has not been served upon Pandora. In June 2011, a putative class action lawsuit was filed against Pandora in the United States District Court for the Northern District of California alleging that it unlawfully accessed and transmitted personally identifiable information of the plaintiffs in connection with their use of the Company's Android mobile application. In July 2011, a putative class action lawsuit was filed against Pandora in the United States District Court for the Northern District of California alleging that it, along with other defendant corporations, unlawfully accessed and transmitted personally identifiable information of the plaintiffs in connection with their use of iPhone and iPad applications. In September 2011, a putative class action lawsuit was filed against Pandora in the United States District Court for the Northern District of California alleging that it violated Michigan's video rental privacy law and consumer protection statute by allowing Pandora listeners' listening history to be visible to the public. In addition to civil liability, the Company disclosed that certain of the privacy lawsuits include allegations of violations of criminal statutes, and if the Company were found liable, there would be additional risk of criminal penalties. Each of these cases is at an early stage and the Company is investigating the allegations. However, the Company currently believes that it has substantial and meritorious defenses to these claims and intends to vigorously defend its position. PRIMO WATER: Law Firms Seek Lead Plaintiffs in Class Action ----------------------------------------------------------- Matt Evans, writing for The Business Journal, reports that several law firms are looking for investors in Primo Water to take part in a planned class-action lawsuit against the beverage company. At least eleven law firms are publicly soliciting potential lead plaintiffs in a suit filed in the U.S. District Court for the Middle District of North Carolina. Primo is based in Winston- Salem and sells bottled water, water coolers and in-home carbonated beverage dispensers. The complaint alleges that Primo and some of its executives and officers misrepresented the company's business prospects from the time of its initial public offering in November 2010 through Aug. 10 of this year, when its stock price got hammered after the company announced a delay in promotional campaigns and the release of its new carbonated beverage appliance. Primo issued a statement saying it intends to "vigorously defend" against the allegations, and it said the suit's claims are without merit. ROY MARTIN LUMBER: La. High Court Vacates Class Certification ------------------------------------------------------------- In the lawsuit Roger E. Price, et al. v. Roy O. Martin, et al., the Supreme Court of Louisiana found that the lower courts erred in concluding that common questions of law or fact exist, that questions of law or fact common to members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for a fair and efficient adjudication of that matter. The Supreme Court thus reversed the judgment of the district court, which granted plaintiffs' motion for class certification. The case is remanded for further proceedings. In February 2003, five individuals residing and owning property in Alexandria, Louisiana, in the vicinity of the Dura-Wood Treating Company, filed on their own behalf and as representatives of a class of persons, who allegedly suffered damages as a result of operations at the wood-treating facility, a "Class Action Petition for Damages." The petition was filed in the Twenty-third Judicial District Court, Parish of Ascension, but the matter was subsequently transferred to the Ninth Judicial District Court, Parish of Rapides, pursuant to a judgment sustaining exceptions of improper venue. Named as defendants in the original petition were prior owners of the Dura-Wood facility, Roy O. Martin Lumber Company, L.P., and Beazer East, Inc. The plaintiffs allege that the defendants engaged in environmentally unsound practices that caused a significant amount of hazardous chemicals to be released into the environment. A copy of the Louisiana Supreme Court's Dec. 6, 2011 order is available at http://is.gd/59yLuZfrom Leagle.com. SAIC INC: Faces Class Action Over Data Security Breach ------------------------------------------------------ Courthouse News Service reports that a class action claims SAIC allowed computer tapes to be stolen containing personally identifiable, protected health information of about 4.9 million members of the armed forces. A copy of the Complaint in Losack v. SAIC Inc., Case No. 37-2011- 00102318 (Calif. Super. Ct., San Diego Cty.), is available at: http://www.courthousenews.com/2011/12/12/Privacy.pdf The Plaintiff is represented by: Brian J. Robbins, Esq. Kevin A. Seely, Esq. Gregory E. del Gaizo, Esq. ROBBINS UMEDA LLP 600 B Street, Suite 1900 Telephone: (619) 525-3990 - and - Timothy G. Blood, Esq. Thomas J. O'Reardon II, Esq. BLOOD HURST & O'REARDON, LLP 600 B Street, Suite 1550 San Diego, CA 92101 Telephone: (619) 338-1100 SAKS INC: Continues to Defend FLSA-Violations Suit in California ---------------------------------------------------------------- On February 2, 2011, the plaintiffs in Dawn Till and Mary Josephs v. Saks Incorporated et al., filed a complaint, with which the Company was served on March 10, 2011, in a purported class and collective action in the U.S. District Court for the Northern District of California. The complaint alleges that the plaintiffs were improperly classified as exempt from the overtime pay requirements of the Fair Labor Standards Act ("FLSA") and the California Labor Code and that the Company failed to pay overtime, provide itemized wage statements and provide meal and rest periods. On March 8, 2011, the plaintiffs filed an amended complaint adding a claim for penalties under the California Private Attorneys General Act of 2004. The plaintiffs seek to proceed collectively under the FLSA and as a class under the California statutes on behalf of individuals who have been employed by OFF 5TH as Selling and Service Managers, Merchandise Team Managers, or Department Managers. The Company believes that its managers at OFF 5TH have been properly classified as exempt under both federal and state law and intends to defend the lawsuit vigorously. It is not possible to predict whether the court will permit this action to proceed collectively or as a class. No further updates were reported in the Company's December 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended October 29, 2011. SIEMENS AKTIENGESELLSCHAFT: Securities Suit Dismissed in March -------------------------------------------------------------- Dismissal of a securities class action lawsuit filed against Siemens Aktiengesellschaft became final in March because plaintiffs did not appeal the dismissal order, according to the Company's November 30, 2011, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended September 30, 2011. As previously reported, a securities class action was filed in December 2009 against Siemens AG with the United States District Court for the Eastern District of New York seeking damages for alleged violations of U.S. securities laws. In March 2011, the Court granted the Company's motion to dismiss the action. The plaintiffs' motion to reconsider was denied by the court. Plaintiffs did not appeal the court's decision. Accordingly, the dismissal is final. SIGNATURE GROUP: 9th Cir. Affirms Dismissal of Securities Suit -------------------------------------------------------------- On November 29, 2011, the United States Court of Appeals for the Ninth Circuit (the "Appellate Court") affirmed the dismissal with prejudice by the United States District Court for the Central District of California (the "Trial Court") of the Third Amended Consolidated Class Action Securities Complaint (the "TAC") filed by the New York State Teachers' Retirement Systems, et al. (the "Plaintiffs") against Signature Group Holdings, Inc., formerly known as Fremont General Corporation, and various former officers and directors of Fremont, according to the Company's December 1, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. This proceeding initially commenced in September 2007, with the filing of three separate complaints in the Trial Court, each of which was seeking class certification for alleged violations of federal securities laws in connection with published statements made by Fremont regarding its loan portfolio and loans held for resale during the period from October 27, 2005, through March 2, 2007. The three class action lawsuits were consolidated into a single proceeding with the filing by the Plaintiffs of a consolidated class action complaint on March 3, 2008, as amended. On March 29, 2010, the Trial Court entered an Order Granting Fremont's Motion to Dismiss the TAC with prejudice (the "Court Order"). The Plaintiffs appealed the Court Order to the Appellate Court. The Appellate Court's decision affirming the Court Order stated that the Trial Court correctly dismissed the TAC because the Plaintiffs failed to allege a securities fraud violation under Section 10(b) of the Securities Exchange Act of 1934, as amended, with the specificity required by the Private Securities Litigation Reform Act and Federal Rule of Civil Procedure 9(b). The Appellate Court further stated in its decision that the dismissal of the TAC with prejudice was appropriate, as the Trial Court previously identified specific deficiencies in the various versions of the Plaintiffs' complaint, including the TAC, and gave the Plaintiffs many opportunities to correct such deficiencies. The Appellate Court noted that the Plaintiffs' inability to correct the deficiencies was a strong indication that the Plaintiffs had no additional facts to plead. SONESTA INTERNATIONAL: Faces Merger-Related Stockholder Suit ------------------------------------------------------------ Sonesta International Hotels Corporation is facing a putative class action lawsuit over its proposed merger with PAC Merger Corp., according to the Company's December 1, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. Sonesta entered into a proposed transaction contemplated by an Agreement and Plan of Merger, dated as of November 2, 2011, by and among Sonesta Acquisition Corp. (f/k/a Property Acquisition Corp.) ("Parent"), a Maryland corporation, PAC Merger Corp., a New York corporation and a wholly owned subsidiary of Parent, and Sonesta, a New York corporation. On November 21, 2011, a putative class action complaint captioned Broadbased Fund v. Peter Sonnabend, et al., Index No. 653236/2011 was filed in the New York Supreme Court, New York County, Commercial Division against Sonesta, each member of Sonesta's Board of Directors, Hospitality Properties Trust, Parent and Merger Sub. The action was filed by a purported stockholder of Sonesta, on its own and on behalf of a putative class of Sonesta stockholders. The complaint alleges, among other things, that defendants have breached their fiduciary duties to plaintiff and to other stockholders, or aided and abetted such breaches, due to a failure to conduct a thorough and adequate sales process designed to maximize stockholder value and the failure to disclose material information in connection with the proposed merger. The complaint seeks a judgment requiring Sonesta to make corrective disclosures, awarding the plaintiff and class compensatory and/or rescissory damages, and an award of all costs and disbursements of the action, including reasonable attorneys' fees. On November 28, 2011, plaintiff filed a request for judicial intervention and proposed order to show cause, requesting that the court allow expedited discovery and issue a preliminary injunction to enjoin a stockholder vote on the proposed merger pending completion of expedited discovery and trial of this action. SOUTH AFRICAN BREAD MAKERS: Cartel Class Action Faces Hurdles ------------------------------------------------------------- Amanda Visser, writing for Business Day, reports that jubilation by the Black Sash and other organizations intent on making legal history in SA could be short-lived as there are still serious hurdles ahead before their proposed class action against major bread companies can be heard. Last month, the group was granted leave to appeal a decision by the Western Cape High Court dismissing its application to be certified as a class in its lawsuit against bread producers Tiger Brands -- which makes Albany bread -- Pioneer Foods (Sasko) and Premier Foods (Blue Ribbon). The Competition Tribunal also found Foodcorp (Sunbake) guilty but the company was not included in the lawsuit. Should the case go ahead, it would be the first class action claiming damages for contraventions of the Competition Act. The Competition Tribunal found the bread producers guilty of cartel conduct, paving the way for civil claims by those harmed. Tiger Brands was slapped with an administrative penalty of ZAR98,7 million, Pioneer ZAR197 million and Foodcorp ZAR45 million. Premier was granted corporate leniency by the Competition Commission and escaped a fine, but can be held liable for civil claims. In November last year, a group consisting of the trustees for the Children's Resource Centre, the Black Sash Trust, the Congress of South African Trade Unions (Cosatu) and others brought an application for a "class certification order" to court. The group had asked the high court to accept it as class representatives for consumers prejudicially affected by the bread producers' anticompetitive conduct. The application was dismissed. The group then petitioned the Supreme Court of Appeal, which granted it leave to appeal against the high court's decision. The group also went ahead with a summons for damages against Tiger Brands to prevent the claim from prescribing. On November 30, the Supreme Court of Appeal granted the group leave to appeal. Nick Altini, legal representative for Pioneer Foods and head of competition practice at Cliffe Dekker Hofmeyer says: "There may be a shift towards facilitating class actions in specific circumstances, but there is no general legislative enabling mechanism." He referred to the case of Ngxuza and others against the Eastern Cape government and its welfare department, where the court set out some guidelines for class certification prior to a class action. The applicants should be certified to represent a class, and the class must be defined. They also have to ascertain who could be included in the court action and in turn notify other potential members of the class asking if they want to be part of the proceedings by an opt-in or opt-out mechanism. The group wants to argue that the anticompetitive conduct was a breach of constitutional rights. The relevant rights are socioeconomic rights to food and water, and in the case of children, to nutrition. "The question is whether these rights apply horizontally, as between citizens (such as the bakers and their consumers) or merely in a vertical context, between the state and its citizens. This may be a point of contention as the matter unfolds," Mr. Altini says. The group says that its being granted leave to appeal is a "significant victory" in its battle for compensation. The Children's Resources Centre co-ordinator, Marcus Solomon, says: "It was morally abhorrent that these bread producers profited illegally by the sale of a staple food." According to Cosatu's Mike Louw: "The accumulative damage of inflated bread prices is devastating, especially in a country battling to cope with such high levels of poverty and unemployment." While the proposed court action has its supporters, some -- fearful of being chastised as insensitive to the needs of the poor -- have chosen to remain anonymous as they feel the claims by the applicants are exaggerated. The harm caused by the collusive behavior, based on some economic evidence, was in fact quite small, according to this argument. But for many this is an uncomfortable situation to accept. Even then, determining the harm suffered by the applicants and the calculation of the claim against the bread producers will be no easy task. There will be reams of economic data, with expert economists and actuaries who may be called upon to make calculations on both sides. The amount of loaves of bread sold to members of the class over the period that the cartel conduct existed could be used to calculate how much, on average, was overpaid by class members because of the collusive behavior. Mr. Altini says based on the summons issued against Tiger Brands, the claim against each bread producer could run into hundreds of millions. "A court will have to be satisfied that such amounts do, in fact, represent actual damages suffered by class members," he says. "This is not an argument that has even yet begun, so the last word on the damages issue -- if it is ever heard -- is a very long way off." SYCAMORE NETWORKS: Awaits Decision on Motion to Dismiss Appeal -------------------------------------------------------------- Sycamore Networks, Inc. is awaiting a court decision on a motion to dismiss an appeal filed by a settlement objector, according to the Company's December 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended October 29, 2011. Beginning on July 2, 2001, several purported class action complaints were filed in the United States District Court for the Southern District of New York against the Company and several of its officers and directors (the "Individual Defendants") and the underwriters for the Company's initial public offering on October 21, 1999. Some of the complaints also include the underwriters for the Company's follow-on offering on March 14, 2000. An amended complaint, which is the operative complaint, was filed on April 19, 2002, on behalf of persons who purchased the Company's common stock between October 21, 1999, and December 6, 2000. The amended complaint alleges claims against the Company, several of the Individual Defendants and the underwriters for violations under Sections 11 and 15 of the Securities Act of 1933, as amended (the "Securities Act"), primarily based on the assertion that the Company's lead underwriters, the Company and several of the Individual Defendants made material false and misleading statements in the Company's Registration Statements and Prospectuses filed with the Securities and Exchange Commission, or the SEC, in October 1999 and March 2000 because of the failure to disclose (a) the alleged solicitation and receipt of excessive and undisclosed commissions by the underwriters in connection with the allocation of shares of common stock to certain investors in the Company's public offerings and (b) that certain of the underwriters allegedly had entered into agreements with investors whereby underwriters agreed to allocate the public offering shares in exchange for which the investors agreed to make additional purchases of stock in the aftermarket at pre-determined prices. It also alleges claims against the Company, the Individual Defendants and the underwriters under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), primarily based on the assertion that the Company's lead underwriters, the Company and the Individual Defendants defrauded investors by participating in a fraudulent scheme and by making materially false and misleading statements and omissions of material fact during the period in question. The amended complaint seeks damages in an unspecified amount. The action against the Company is being coordinated with approximately three hundred other nearly identical actions filed against other companies. Due to the large number of nearly identical actions, the court has ordered the parties to select up to twenty "test" cases. The Company's case has been selected as one such test case. As a result, among other things, the Company will be subject to broader discovery obligations and expenses in the litigation than non-test case issuer defendants. On October 9, 2002, the court dismissed the Individual Defendants from the case without prejudice. This dismissal disposed of the Section 15 and Section 20(a) claims without prejudice, because these claims were asserted only against the Individual Defendants. On October 13, 2004, the court denied the certification of a class in the action against the Company with respect to the Section 11 claims alleging that the defendants made material false and misleading statements in the Company's Registration Statement and Prospectuses. The certification was denied because no class representative purchased shares between the date of the IPO and January 19, 2000 (the date unregistered shares entered the market), and thereafter suffered a loss on the sale of those shares. The court certified a class in the action against the Company with respect to the Section 10(b) claims alleging that the Company and the Individual Defendants defrauded investors by participating in a fraudulent scheme and by making materially false and misleading statements and omissions of material fact during the period in question. On December 5, 2006, the Second Circuit vacated the district court's class certification decision. On April 6, 2007, the Second Circuit panel denied a petition for rehearing filed by the plaintiffs, but noted that the plaintiffs could ask the district court to certify a more narrow class than the one that was rejected. On August 14, 2007, the plaintiffs filed a Second Amended Class Action complaint against the Company. The Company and the underwriters filed separate motions to dismiss the amended complaint on November 14, 2007. On March 26, 2008, the Court denied the motion to dismiss the Section 10(b) claims but dismissed certain Section 11 claims against the Company. On June 5, 2008, the Court dismissed the remaining Section 11 claims against the Company in response to a motion for partial reconsideration. The parties in the approximately 300 coordinated cases, including the Company's case, reached a settlement. The insurers for the issuer defendants in the coordinated cases will make the settlement payment on behalf of the issuers, including the Company. On October 5, 2009, the Court granted final approval of the settlement. The settlement approval was appealed to the United States Court of Appeals for the Second Circuit. One appeal was dismissed and the second appeal was remanded to the district court to determine if the appellant was a class member with standing to appeal. The district court ruled that the appellant has no standing to object to the settlement. The appellant has appealed the district court's decision. On October 25, 2011, plaintiff/appellees filed a motion to dismiss the appellant objector's appeal and have requested that the Second Circuit consider the motion on an expedited basis. Due to the inherent uncertainties of litigation, the Company says it cannot accurately predict the ultimate outcome of the matter. If the settlement does not survive appeal, the litigation continues, and the Company is found liable, the Company is unable to estimate or predict the potential damages that might be awarded, whether such damages would be greater than the Company's insurance coverage, and whether such damages would have a material impact on its results of operations or financial condition in any future period. ULTA SALON: Still Awaits Final Okay of Calif. Suit Settlement ------------------------------------------------------------- In May 2010, a putative employment class action lawsuit was filed against Ulta Salon, Cosmetics & Fragrance, Inc., and certain unnamed defendants in state court in California. The plaintiff and members of the proposed class are alleged to be (or have been) non-exempt hourly employees. The lawsuit alleges that Ulta violated various provisions of the California labor laws and failed to provide plaintiff and members of the proposed class with full meal periods, paid rest breaks, certain wages, overtime compensation and premium pay. The lawsuit seeks to recover damages and penalties as a result of these alleged practices. On June 21, 2010, the Company filed its answer to the lawsuit. On January 12, 2011, the Company and plaintiffs engaged in a voluntary mediation. Although the Company continues to deny plaintiffs' allegations, in the interest of putting certain of the claims behind it, the Company agreed in principle to settle all claims of the putative class consisting of non-exempt hourly hair designers in the salon department within the California retail stores. The settlement, which is not an admission of liability, is subject to final documentation and Court approval. Counsel for the plaintiffs has agreed to dismiss without prejudice the claims of all other putative class members. The proposed settlement amount is not material. No further updates were reported in the Company's December 1, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended October 29, 2011. UNITED STATES: App. Ct. Vacates Dismissal of Russell Suit --------------------------------------------------------- The U.S. Court of Appeals for the Federal Circuit vacated a district court order dismissing the lawsuit captioned Taylor Russell, on behalf of himself and all other similarly situated v. United States; and remanded the case for further consideration. Mr. Russell filed the class action complaint against the United States seeking relief for himself and a class of similarly situated persons regarding interest charges that the government had assessed against him and the other putative class members on military credit accounts. Prior to ruling on Mr. Russell's motion for class certification, the district court dismissed his individual action as moot on the ground that the government, by issuing a payment to Mr. Russell during the pendency of the lawsuit, had satisfied his individual claim. A copy of the Appeals Court's Dec. 1, 2011 order is available at http://is.gd/v4iNCOfrom Leagle.com. S. Chandler Visher, Esq. -- chandler@visherlaw.com -- at the Law Office of S. Chandler Visher, in San Francisco, California, represented Mr. Russell. Of counsel on the brief was Marie Noel Appel, Esq. -- marie@consumerlaw.ws -- of San Francisco, California. Alicia M. Hunt, Esq., Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, appeared for the United States. With her on the brief were Tony West, Esq., Assistant Attorney General, J. Christopher Kohn, Director, Ruth A. Harvey, Assistant Director, and Michael J. Quinn, Esq., Trial Attorney. * Tax Class Actions Raise Questions on Lawyer's Liability --------------------------------------------------------- Kendyl Sebesta, writing for Law Times, reports that a recent ruling from the Ontario Superior Court and a new class action settlement, both involving Bay Street law firms, have raised questions about lawyers' liability in matters involving charity- based tax opinions that several experts say could open a Pandora's box of legal issues. The settlement last month involved Fraser Milner Casgrain LLP in a matter that first arose more than three years ago after nearly 3,000 people took part in the Banyan Tree Foundation gift program from 2003 to 2007. A negative pronouncement by the Canada Revenue Agency about the program eventually led to a class action lawsuit in which the donors went after FMC, which had provided opinions on the charity's compliance with tax rules. This month, FMC, the Banyan Tree Foundation, and three related companies agreed to contribute C$11 million to settle the lawsuit with donors who are part of the class action receiving pro-rated shares of the settlement fund. The settlement agreement states that the defendants make no admission of liability or wrongful conduct. The settlement is pending court approval next month. "The defendants agreed to this settlement in order to end the ongoing distraction and cost of a complex litigation process," FMC said in a statement last week. "Fraser Milner Casgrain has a well-earned reputation for consistently delivering the highest-quality legal services to our clients, and we firmly stand behind our lawyers and the quality of their counsel." In light of the settlement and a recent court ruling dismissing a similar class action against Cassels Brock & Blackwell LLP as statute-barred, tax lawyers say indirect answers from the courts and a lack of concrete case law on the issue are leading to a more cautious approach. "It appears that tax lawyers who provide opinions on these types of issues will have to be much more careful about what they write in the future," says Adam Aptowitzer, a charity and tax lawyer at Drache Aptowitzer LLP. "There are more factors to consider now. If the CRA decides to pursue third-party civil litigation penalties, LawPRO may not cover these penalties. They then become the law firms' or partners' responsibilities. It'll also open up the issue of having to carry enough insurance to cover the cost if those opinions go south." The issue may open up other questions as well. "If you are a lawyer and you write an opinion and later it turns out that the opinion is wrong, you would essentially be stuck," says Mr. Aptowitzer. "The question then becomes what can the implications be and what will it mean to other lawyers who provide opinions down the road and that is where we reach much more uncharted territory." But Adam Parachin, a professor at the University of Western Ontario who focuses on charity law, says many law firms avoid that kind of work anyway. "While many law firms do not provide opinions on tax shelter-style donation arrangements, this is generally not due to concerns over negligence claims from donors relying to their detriment on the opinions," says Mr. Parachin. "Tax lawyers routinely provide advice on highly complex structured transactions where there is a real risk of getting it wrong. Since the presence of a charitable dimension to a planned transaction does not alter the fact that lawyers are required to live up to an exacting standard of professional competence, it has not tended to be a key consideration over whether a firm should accept a retainer in this area. In any event, many opinions provided in this area are heavily qualified to minimize a firm's exposure." Mr. Parachin notes law firms may refuse to do opinion work in the area of charity tax law for reasons apart from avoiding lawsuits. "The primary reason is that firms are concerned over not squandering reputational capital. The economics of many mass-marketed donation schemes would appear to work only if donors receive inflated donation receipts and/or substantial portions of the receipted donations are somehow circulated back to private hands. Advising clients of tax loopholes is one thing . . . but facilitating or being seen as facilitating such seemingly abusive charitable gift arrangements is quite another. Firms are often keen to avoid the stigma of being associated with these schemes as it can undermine a firm's brand." Mr. Parachin adds that many law firms also provide negative opinions on tax shelter-style donation arrangements. However, the programs' promoters rarely feature those opinions, he points out. Last month, the Ontario Superior Court touched on some of the liability issues in Lipson v. Cassels Brock & Blackwell LLP. Superior Court Justice Paul Perell, addressing the issue of liability, referred to his colleague Justice Joan Lax' ruling in Robinson v. Rochester last year, the matter that named FMC as a defendant. "The Robinson case is not distinguishable from the case at bar, and, indeed, the case at bar is a stronger case for her [Lax'] analysis, which posits that it is arguable that the law firm had a duty of care and that the other constituent elements of negligence claim might be established; i.e. it is not plain and obvious that Mr. Lipson and the class members do not have a free-standing claim for negligence that is discrete from a claim for negligent misrepresentation," Justice Perell, who ruled the plaintiffs' claim was statute-barred, wrote in Lipson. According to Justice Perell, the key difference between Lipson and Robinson was that Cassels Brock "wrote its opinions so that they might be relied on by potential donors, their agents, and professional advisers for the purpose of the transactions contemplated by this opinion . . . while in Robinson the opinion was for the promoters, although it was foreseeable that they would use it to market the donation program to potential donors." But questions around liability remain, according to a lawyer involved in Lipson. "Ultimately, the practice should be aware that their opinions are subject to scrutiny down the road," says Adam Dewar, a partner at Roy Elliott O'Connor LLP who represented representative plaintiff Jeffrey Lipson. "People should also be aware that what they write at one stage may be used in another in the future." Mr. Dewar calls the Lipson judgment disappointing in terms of the finding that class members' claims were statute-barred and its imposition of a heavy burden on Mr. Lipson to prove that the law firm was negligent. He notes there will be an appeal. Lipson involved roughly 900 taxpayers who participated in a charitable timeshare program between 2000 and 2003. Participants donated both cash and resort timeshares to Canadian athletic associations in anticipation of tax credits. In 2004, the CRA disallowed all of these anticipated tax credits, causing Lipson and several other donors to begin litigation against the government in 2006 as a litmus test for what it would permit. In 2008, the case settled, and the CRA allowed tax credits for the cash donations but not the timeshares. To recover the remaining losses, Mr. Lipson launched a class action against Cassels Brock in 2009 for alleged negligence and negligent misrepresentation. He claimed he wouldn't have participated in the program if it weren't for the law firm's opinions. Justice Perell, determining that the case had exceeded the limitation period, dismissed Mr. Lipson's case last month. Mr. Dewar says he plans to appeal. "How do you tell people they can't rely on tax opinions from legal professionals?" says Mr. Aptowitzer. "I don't think that's a fair statement. Maybe a better statement would be that they should get additional, independent legal advice in these matters in the future. Ultimately, I think it could make people much more careful of their opinions in the future." ********* 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 * * *