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/raid1/www/Hosts/bankrupt/CAR_Public/120123.mbx C L A S S A C T I O N R E P O R T E R Monday, January 23, 2012, Vol. 14, No. 16 Headlines AMERICAN DENTAL: Signs MOU to Settle Merger-Related Class Suits CARLYLE GROUP: Revises Governing Documents to Avert Class Actions CLOROX CO: Fresh Step Ads Mislead Consumers, Calif. Suit Claims CONVERIUM HOLDINGS: Dutch Approves Class Action Settlements DAVEY TREE: Trial in "Ely" Class Suit vs. Unit Reset to March 26 FOREVER 21: Two Law Firms File Employment Class Action in Calif. GENERAL ELECTRIC: Motions to Dismiss Class Action Denied in Part GIANT BICYCLE: Recalls 900 Advanced Bicycles Due to Fall Hazard GOOGLE INC: Faces Class Action Over "Google Tags" Ad Service GREAT ATLANTIC: Continues to Defend "Dudley" Suit in New Jersey GREAT ATLANTIC: "LaMarca" Suit Still Stayed Due to Bankruptcy KRAFT FOODS: Time Spent Donning Work Gear Not Compensable LEE BACA: ACLU Files Class Action Over Inmate Beatings MIDWEST GENERATION: Faces Class Action Over Toxic Emissions NETFLIX: Royal Oak Retirement System Files Class Action OBESITY RESEARCH: Sued Over Bogus Claims on "Lipozene" Products OCZ TECHNOLOGY: Hearing on Bid to Dismiss SSD Suit on Feb. 2 SAMSUNG: Gilman Files Class Action Over Galaxy S Phone Defect SAPS: Faces Class Action Over Police Brutality SKECHERS: Faces Class Action Over Shape-Ups Injuries STEELCASE INC: Recalls 11,000 Amia Desk Chairs Due to Fall Hazard WISDOMTREE INVESTMENTS: Awaits Development in "Steinhardt" Suit YASSINE ENTERPRISES: May Face Class Action Over Unpaid Overtime ZAPPOS.COM: Faces Class Action Over Customer Data Breach * Lawyer Says Sexual Abuse Victims Must File Own Lawsuits ********* AMERICAN DENTAL: Signs MOU to Settle Merger-Related Class Suits --------------------------------------------------------------- American Dental Partners, Inc. in a Form 8-K filed with the U.S. Securities and Exchange Commission on January 17, 2012, disclosed that it entered into a memorandum of understanding dated January 16, 2012, regarding settlement of certain litigation relating to an Agreement and Plan of Merger by and among American Dental Partners, Inc. (the "Company"), JLL Crown Holdings, LLC ("Buyer"), and JLL Crown Merger Sub, Inc. ("Merger Sub"), dated as of November 4, 2011. On December 20, 2011, the Company, its directors, JLL Partners, Inc. ("JLL"), Buyer and Merger Sub have been named as defendants in a purported stockholder class action filed in the Superior Court, Middlesex County, Commonwealth of Massachusetts, on December 12, 2011, captioned Atoll Advisors v. Gregory A. Serrao, et al., CV 11-442. On December 16, 2011, the Company, its directors, JLL, Buyer and Merger Sub were named as defendants in another purported stockholder class action filed in the Superior Court, Middlesex County, Commonwealth of Massachusetts, captioned John Chew v. American Dental Partners, Inc., et al., CV11-4489. The complaints in both lawsuits (collectively, the "Shareholder Litigations") allege, among other things, that the Company's directors violated their fiduciary duties to the Company's stockholders through materially inadequate disclosures and material omissions in the preliminary proxy statement filed by the Company with the SEC on November 29, 2011, and that JLL, Buyer and Merger Sub aided and abetted the Company's directors in breaching their fiduciary duties. The plaintiffs in both lawsuits seek to enjoin the consummation of the merger and seek an award of the costs of the action, including attorneys' and experts' fees, among other relief. While the Company and the other defendants believe that each of the lawsuits is without merit, in an effort to minimize the cost and expense of any litigation relating to such lawsuits, on January 16, 2012, the Company and other defendants entered into a memorandum of understanding ("MOU") with the plaintiffs in the Shareholder Litigations pursuant to which the parties agreed in principle, and subject to certain conditions, to settle the Shareholder Litigations. Subject to approval of the Superior Court of the Commonwealth of Massachusetts, Middlesex County, and further definitive documentation, the MOU establishes a framework to resolve the allegations against the Company and other defendants in connection with the merger agreement and contemplates a release and settlement by the Company's shareholders of all claims against the Company and other defendants in connection with the merger agreement. In exchange for such release and settlement, pursuant to the terms of the MOU, the parties agreed, after arm's-length discussions, that the Company would file this Current Report on Form 8-K supplementing the applicable disclosures in its Definitive Proxy Statement. The settlement is also contingent upon, among other things, consummation of the merger. In addition, in connection with the settlement and as provided in the MOU, the parties contemplate that plaintiffs' counsel will seek an award of attorneys' fees and expenses as part of the settlement. The Company says there can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the MOU may be terminated. The settlement will not affect the amount of the merger consideration that the Company's shareholders are entitled to receive in the merger. In the event that the MOU is not approved and such conditions are not satisfied, the Company will continue to vigorously defend these actions. CARLYLE GROUP: Revises Governing Documents to Avert Class Actions ----------------------------------------------------------------- Miles Weiss, writing for Bloomberg News, reports that Carlyle Group LP, the Washington-based buyout company that's preparing to go public, is seeking to bar its future shareholders from filing individual and class- action lawsuits. The firm revised its governing documents to say that investors who purchase company shares must settle any subsequent claims against Carlyle through arbitration in Wilmington, Delaware. That could limit the ability of stockholders to win big awards for securities-law violations such as fraud, several attorneys said. The U.S. Supreme Court has issued a series of rulings in recent years upholding the right of companies to require the use of arbitration to resolve disputes with consumers. Carlyle is seeking to extend this principle to public shareholders, a move that could run up against a bedrock of U.S. securities law, the ability of investors to seek redress in federal court. "What we are talking about is legally uncharted territory," said Donald Langevoort, a law professor at Georgetown University in Washington who previously worked for the U.S. Securities and Exchange Commission. "I would be surprised if the courts allow any company to entirely foreclose shareholder rights to sue under federal securities laws." Chris Ullman, a spokesman for Carlyle, declined to comment. At issue are provisions of U.S. securities laws that bar investors from waiving their rights to seek damages. After the Supreme Court ruled in the late 1980s that this language applied only to substantive rights and not to procedural ones, brokerages began including mandatory-arbitration clauses in their customer contracts, according to a 2006 report by the independent Committee on Capital Markets Regulation. The committee said the court had yet to rule on whether securities litigation against a public company can be brought to arbitration. "If you really could enforce it, you would see every publicly traded company having that, and you don't," said Kevin LaCroix, an executive vice president at OakBridge Insurance Services LLC, a Bloomfield, Connecticut, firm that helps corporations obtain officers' and directors' liability insurance. Arbitration clauses have primarily been used in bilateral contracts between companies and their customers, Mr. LaCroix said. The capital markets committee, in a November 2006 report requested by then-U.S. Treasury Secretary Henry Paulson, recommended that public companies be allowed to hold shareholder votes on the use of arbitration to resolve securities law and other claims. The threat of class-action suits was discouraging private as well as foreign companies from going public in the U.S., the committee said. "Carlyle would be highly sensitive to this question because they have looked at it over and over again in the context of whether to take private companies public," Hal Scott, a professor at Harvard Law School in Cambridge, Massachusetts and the committee's director, said in a telephone interview. "There are powerful reasons to do what Carlyle is trying to do." The SEC must approve Carlyle's registration statement before the private-equity firm can sell shares to the public. The agency has historically refused to permit a public offering by a company whose charter mandates arbitration and precludes class actions, John Coffee, a professor at Columbia Law School in New York, said in an e-mail response to questions. Carlyle may be considered different because it's a limited partnership rather than a corporation, Mr. Coffee said. "It will be a difficult precedent to contain if the SEC permits this," he said. Florence Harmon, a spokeswoman for the SEC, declined to comment. Carlyle, co-founded by David Rubenstein, William Conway and Daniel D'Aniello, is at least the fifth buyout firm to go public since Fortress Investment Group LLC held an initial public offering in February 2007, followed by Blackstone Group LP, KKR & Co., and Apollo Global Management LLC. Carlyle would be the first to impose an arbitration requirement, according to copies of the limited-partnership agreements the companies have on their Web sites or in SEC filings. Blackstone was named in six 2008 lawsuits that were later consolidated into a class-action complaint alleging that the prospectus for the company's IPO was false and misleading, in part because it overstated the value of the firm's private- equity and real estate investments. The plaintiffs seek damages and costs, as well as other relief, Blackstone said in its latest quarterly report, adding that the case is "totally without merit" and that the firm intends to "vigorously" defend itself. Blackstone shares trade at about half the company's June 2007 IPO price of $31 each. From 2009 through 2011, Carlyle was targeted in lawsuits tied to Carlyle Capital Corp. Ltd., a publicly traded bond fund the buyout firm shuttered at a cost of more than $152 million after its assets plummeted in value. The plaintiffs include Carlyle Capital's liquidators, who sought $1 billion in damages through four complaints filed in July 2010 in Delaware, New York, the District of Columbia and Guernsey, two of which have since been dismissed. When Carlyle initially filed for the stock sale in September, the firm said its limited-partnership agreement would require any shareholder lawsuits be filed in Delaware Chancery court, which is known for its expertise in adjudicating such claims. Carlyle revamped the agreement, according to an amended registration filed Jan. 10, to say that arbitration would be the "exclusive manner" for the resolution of any claims, suits, actions or proceedings, including those made under federal securities laws. Investors won't be able to bring claims in federal or state court, or file or participate in class-action suits, even through arbitration, Carlyle said in the IPO filing. All proceedings and awards will be confidential, according to the document. Investors who buy Carlyle shares will have automatically agreed to the provision, the filing said. Requiring the arbitration of individual claims in lieu of class- action lawsuits makes it more expensive for plaintiffs to pursue damages and more difficult to win big awards, said James Hill, who runs the private-equity practice for the Cleveland law firm Benesch LLP. That's partly because attorneys are limited in their ability to take depositions from senior executives and to demand internal documents that can provide facts to support larger claims, he said. "If you are on the moneyed side, you would like to put an arbitration clause in every contract," Mr. Hill said in a telephone interview. "It's a far more limited opportunity for the plaintiff." The SEC blocked a 1990 IPO by a Philadelphia savings and loan that had included a shareholder-arbitration clause in its corporate charter, according to Carl Schneider, a former securities attorney who represented the thrift. The SEC said the provision seriously impaired the "deterrent function" of shareholder lawsuits and acted as a "collective waiver of rights" without giving adequate notice to investors who bought shares in the secondary market, according to an article he wrote that year in InSights magazine. "The commission went ballistic," Mr. Schneider said in a telephone interview. "They refused to let the offering go public" until the clause was removed, said Mr. Schneider, who was a partner at the onetime Philadelphia law firm Wolf, Block, Schorr & Solis-Cohen and is now retired. The business environment has changed since 1990, with the Supreme Court issuing a number of decisions during the past several years favoring arbitration as a means of resolving disputes, according to Mr. Schneider. The court ruled in April that an AT&T Inc. unit could bar wireless customers from bringing class-action claims under mandatory-arbitration clauses in their cell-phone contracts. "It's the class issue that was important," said Harvard's Mr. Scott. "Class arbitration is even worse than class litigation" because certain rights, such as the ability to appeal, are more limited, he said. Publicly traded limited partnerships have also been granted more leeway than corporations in restricting the ability of investors to make claims, said John Olson, a securities attorney in the Washington office of Gibson, Dunn & Crutcher LLP. While these limited partnerships have primarily been in the energy and mineral resources businesses, Mr. Olson said buyout firms should be eligible for similar treatment. Mr. Hill can be reached at: James Hill, Esq. BENESCH LLP 200 Public Square, Suite 2300 Cleveland, OH 44114-2309 Telephone: (216) 363.4444 E-mail: jhill@beneschlaw.com - and - Carl Schneider, Esq. WOLF, BLOCK, SCHORR & SOLIS-COHEN Packard Bldg, S.E. Corner 15th and Chestnut Street Twelfth Floor Philadelphia, PA 19102-2678 Telephone: (215) 9772000 - and - John Olson, Esq. GIBSON, DUNN & CRUTCHER LLP 1050 Connecticut Avenue, N.W. Washington, DC 20036-5306 Telephone: (202) 955-8500 E-mail: jolson@gibsondunn.com CLOROX CO: Fresh Step Ads Mislead Consumers, Calif. Suit Claims --------------------------------------------------------------- Megan Sterritt, Individually and on Behalf of All Others Similarly Situated v. The Clorox Company, Case No. 3:12-cv-00280 (N.D. Calif., January 18, 2012) alleges that through an extensive and comprehensive nationwide marketing campaign, the Defendant has conveyed the misleading and deceptive message that: (a) Clorox's carbon-containing Fresh Step Cat Litter is more effective at eliminating odors than other cat litters, and (b) cats "choose" Fresh Step over other cat litters. Put simply, the Defendant's advertising and marketing campaign is designed to cause consumers to buy Fresh Step over other brands because Fresh Step's carbon-based litter is more effective at eliminating odor than competitor's ingredients, and because cats themselves "chose" Fresh Step, Ms. Sterritt says. The truth, however, is that the Defendant's claims are false because Fresh Step is not better at eliminating odor and cats do not prefer Fresh Step over other litters, she points out. Ms. Sterritt is a resident of Miami, Florida. Clorox is a Delaware corporation with headquarters in Oakland, California. Clorox manufactures and markets consumer and institutional products. Clorox has approximately 8,100 employees worldwide and net sales of $5.2 billion for fiscal year 2011. The Plaintiff is represented by: Shawn Williams, Esq. ROBBINS GELLER RUDMAN & DOWD LLP Post Montgomery Center One Montgomery Street, Suite 1800 San Francisco, CA 94104 Telephone: (415) 288-4545 Facsimile: (415) 288-4534 E-mail: shawnw@rgrdlaw.com - and - Robert M. Rothman, Esq. ROBBINS GELLER RUDMAN & DOWD LLP 58 South Service Road, Suite 200 Melville, NY 11747 Telephone: (631) 367-7100 Facsimile: (631) 367-1173 E-mail: RRothman@rgrdlaw.com - and - Paul J. Geller, Esq. Stuart A. Davidson, Esq. Mark Dearman, Esq. Kathleen L. Barber, Esq. Bailie L. Heikkinen, Esq. Christopher Martins, Esq. ROBBINS GELLER RUDMAN & DOWD LLP 120 East Palmetto Park Road, Suite 500 Boca Raton, FL 33432 Telephone: (561) 750-3000 Facsimile: (561) 750-3364 E-mail: PGeller@rgrdlaw.com jdavidson@rgrdlaw.com mdearman@rgrdlaw.com kbarber@rgrdlaw.com bheikkinen@rgrdlaw.com cmartins@rgrdlaw.com CONVERIUM HOLDINGS: Dutch Approves Class Action Settlements ----------------------------------------------------------- Spector Roseman Kodroff & Wills, P.C., Bernstein Litowitz Berger & Grossmann LLP, and Cohen Milstein Sellers & Toll, PLLC, co-lead counsel in the historic Converium/SCOR securities class action (the first such case settled on a Trans-Atlantic basis), announced that on January 17, 2012, the Amsterdam Court of Appeal declared binding the two international settlement agreements in the litigation -- an aggregate recovery of $58,400,000. In its first landmark ruling, on November 12, 2010, the Court of Appeal announced that it had jurisdiction to declare the international settlements of the Converium action binding. In addition to showing its willingness to provide an effective forum for European and other investors to settle their claims on a pan- European or even global basis, the Court of Appeal in Converium substantially broadened its jurisdictional reach -- to the benefit of investors in this case and in future actions. In Converium, the Court of Appeal secured jurisdiction even though the claims were not brought under Dutch law, the alleged wrongdoing took place outside the Netherlands, and none of the potentially liable parties and only a limited number of the potential claimants are domiciled in the Netherlands. That decision, which is now final, recognizes that all other European Union Member States, as well as Switzerland, Iceland and Norway, must recognize the Court of Appeal's ruling, under the Brussels I Regulation and the Lugano Convention. As a result of the two decisions by the Amsterdam Court of Appeal, the Netherlands has taken the most pragmatic approach within Europe to aid investors and other claimants by enacting a law (the Dutch Act on the Collective Settlement of Mass Claims (the "Dutch Collective Settlement Act")) that allows them to reach a collective settlement with a defendant or group of defendants. In addition, the ruling allows for the settlement to be declared binding on an entire class on an "opt out" basis which is the same under U.S. class action procedure. The Dutch Collective Settlement Act requires that claimants' interests be represented through a Dutch foundation or association and the Court of Appeal will only declare a settlement binding if, among other things, the amount of the settlement is reasonable and foundation members are sufficiently representative of all participating investors. On February 18, 2009, the Stichting Converium Securities Compensation Foundation (the "Foundation") was incorporated to represent the interests of all legal and natural persons who, during the period from January 7, 2002 through September 2, 2004, purchased Converium common stock on a non-U.S. stock exchange and were not residents of the United States at the time of purchase. The Foundation is governed by a Board of Directors, each of whom is independent of Converium and Zurich Financial Services (ZFS). Pursuant to its articles of association, the Foundation is structured to include a number of participating parties, which signed agreements to become registered participants of the Foundation. Because the Netherlands is the only European country with such a collective settlement procedure it has become an attractive venue for settling international mass claims, irrespective of whether any litigation has taken place in the Netherlands. The approach taken in the Netherlands is important for all investors. This was underscored by the U.S. Supreme Court's recent decision in Morrison v. National Australia Bank, which restricted the rights of investors to bring claims before U.S. courts for shares not purchased on a U.S. exchange. Thus, when U.S. courts will not hear their claims, European (and American) investors will more readily look to resolve them in European courts. The Dutch Collective Settlement Act, and the Court of Appeal's recent ruling in the Converium case, will make it easier for them to do so. The Court of Appeal noted the significance of its judgment in creating an alternative venue to declare international collective settlements in mass claims binding on all class members. The Court of Appeal explicitly referred to the limitations of the U.S. courts in securities cases as a result of the U.S. Supreme Court's decision in Morrison v. National Australia Bank. Background of the Case Converium Holdings AG ("Converium"), a major multi-line re- insurance company based in Switzerland, was spun-off from its former parent, ZFS, in December 2001. The Converium securities litigation began in October 2004 when Converium investors sued Converium and ZFS for violating U.S. securities laws. (Converium was acquired in 2007 by the French company SCOR and is now known as SCOR Holding (Switzerland) AG.) The lead plaintiffs alleged that, when ZFS spun off Converium in an initial public offering and over subsequent quarters, Converium's earnings were materially overstated because Converium concealed a massive deficiency in its North American loss reserves. This allegedly caused the price of Converium's stock and American Depositary Shares (ADS) to be artificially inflated from December 11, 2001 through September 2, 2004. Ultimately, in September 2004, Converium increased its loss reserves by $562 million, reported a loss for 2004 of $761 million and announced that it would place its North American operations into "run-off" and would no longer write reinsurance policies out of its U.S. offices. This caused the price of Converium's stock and ADS to drop, resulting in losses to investors. Settlements on Two Continents The action was originally brought on behalf of all investors who purchased Converium common stock on the SWX Swiss Exchange and American Depository Shares in New York. However, on March 6, 2008, the U.S. federal court certified a class that excluded all non-U.S. purchasers who bought their shares on the SWX Swiss Exchange, concluding that there was insufficient evidence of subject matter jurisdiction over their claims. Converium and ZFS ultimately agreed to settle investors' claims for a total of $143 million. Because of the U.S. court's decision, this settlement was split between those who purchased Converium shares in the U.S. and those who purchased them on the SWX Swiss Exchange. The U.S. federal judge presided over the former and the Amsterdam Court of Appeal is currently presiding over the latter. Contacts: Robert M. Roseman, Esq. SPECTOR ROSEMAN KODROFF & WILLIS, P.C. Telephone: (215) 496-0300 E-mail: rroseman@srkw-law.com -- or -- Steven Singer, Esq. BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP E-mail: ssinger@blbglaw.com -- or -- Daniel S. Sommers, Esq. COHEN MILSTEIN SELLERS & TOLL, PLLC E-mail: dsommers@cohenmilstein.com DAVEY TREE: Trial in "Ely" Class Suit vs. Unit Reset to March 26 ---------------------------------------------------------------- Trial in a class action lawsuit against a subsidiary has been rescheduled to March 26, 2012, according to The Davey Tree Expert Company's January 17, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. With reference to the previously reported lawsuit, "Peter Ely et al. v. Davey Tree Surgery Company, et al.," Davey Tree Surgery Company, a subsidiary of The Davey Tree Expert Company named in the purported class-action lawsuit filed on July 15, 2008, in California state Superior Court in Alameda County, has entered into a nonbinding mediation process with the plaintiffs and Local Union 1245 of the International Brotherhood of Electrical Workers. As a result of the recently initiated mediation process, trial in the case, previously scheduled for January 30, 2012, has been rescheduled to March 26, 2012. If the mediation process were to result in agreement between the parties on the terms of a settlement, any final settlement would require court approval, a process that could take several months to complete. The Company says it can offer no assurances that the mediation process will result in a settlement agreement or, if it does, that any resulting settlement agreement would be approved by the court. As previously reported, the plaintiffs allege on behalf of themselves and a putative class that Davey Tree Surgery Company has failed to comply with California law concerning off-duty meal periods and the required content of paycheck stubs. The plaintiffs also allege that they and the putative "meal periods" class have not been provided with uninterrupted, duty-free 30- minute meal periods. In addition, plaintiffs allege that because they were supposedly made to work during their meal breaks, Davey Tree Surgery Company violated California's minimum wage law because they and the putative members were not paid minimum wage for their alleged work during meal breaks. Plaintiffs also contend Davey Tree Surgery Company violated California law by not including the time they and the putative "wage statement" class members worked during their meal periods, their hourly rates of pay and number of hours worked at each hourly rate on their paycheck stubs. The Court granted plaintiffs' motion for class certification and certified both the "meal periods" class and the "wage statements" class; some individuals are members of both classes, while others are members of only one class. FOREVER 21: Two Law Firms File Employment Class Action in Calif. ---------------------------------------------------------------- Norton & Melnik, APC, and Kitchin Legal announced that they filed a class action lawsuit in San Francisco Superior Court on Jan. 18 against the California-based retailer, Forever 21. The lawsuit alleges Forever 21 required its employees to perform work without compensation and denied them meal breaks. The lead plaintiffs, Jazzreeal Jones, Jessica Ramos, Shanelle Thompson, Alyssa Elias and Tiffinee Linthicum, say the company routinely detained them and their co-workers inside Forever 21 stores on lunch breaks and after their shifts were over so managers could search them for company merchandise. The suit alleges these delays resulted in substantial unpaid labor every day for thousands of Forever 21 employees in California. The workers' lawyers are also asking the State of California to appoint them as private attorneys general so they may prosecute penalty claims on behalf of the State. The lawsuit is similar to one brought against Polo Ralph Lauren that led to a $4 million settlement in 2010. Patrick Kitchin, who served as co-lead counsel in the Polo case, explained, "Bag checks are meant to protect retailers from employee theft. Ironically, the delays associated with this industry-wide practice often result in the theft of employees' wages." "Sales associates at Forever 21 stores are often still in high school and under the age of 18 when they begin their employment," said Geoffrey Norton, one of the workers' lead attorneys. "These young people are vulnerable and often do not understand their employment rights. This lawsuit is meant to give these young people a voice about how they were treated while employed by Forever 21 in California." This is not the first time Forever 21 has come under criticism for its employment practices. In 2001 workers from six factories sued the company and called for a boycott of Forever 21 products for what they called "unsafe and unsanitary working conditions." That lawsuit was dropped after Forever 21 agreed to change its labor practices in its factories and pay the workers the wages they had earned. Forever 21 was formed in 1984 by South Korean immigrants, Do Won and Jin Sook Chan. Begun as a single store in Los Angeles called Fashion 21, it now operates nearly 500 stores in eight countries. One hundred of those stores are in California. Forever 21 employees more than 33,000 people worldwide and projects revenues of over $3 billion for 2011. Forever 21 employees are encouraged to contact attorney Geoffrey P. Norton at 818-999-9500 or attorney Patrick R. Kitchin at 415- 677-9058. For additional information, including a copy of Plaintiffs' complaint, please visit http://www.Forever21ClassAction.com Contact: Patrick R. Kitchin, Esq. KITCHIN LEGAL Telephone: (415) 677-9058 E-mail: prk@kitchinlegal.com GENERAL ELECTRIC: Motions to Dismiss Class Action Denied in Part ---------------------------------------------------------------- Adam Klasfeld at Courthouse News Service reports that General Electric is still on the hook for charges that it misled investors during the 2008 financial crisis, a judge ruled in a federal class action. Lead plaintiff State University Retirement System of Illinois claimed that General Electric hid its financial decline from investors in GE and its subsidiary GE Capital, from Sept. 25, 2008 to March 19, 2009, at the height of the financial crisis. The class claims CEO Jeffrey Immelt and CFO Keith Sherin misled investors about GE's Oct. 7, 2008 stock offering. Executives from GE Capital allegedly contributed to the deception, including CEO Michael Neal, CFO Jeffery Bornstein, and Chief Operating Officer William Cary. These executives and "various companies that underwrote the October offering" are the defendants. "According to plaintiff, during a time when the financial markets were crumbling and companies across the United States were scrambling to disclose their holdings in subprime loans, GE withheld information regarding its substantial holdings in subprime and non-investment grade loans and touted GE as safe in comparison to its competitors, despite the fact that GE was also feeling the impact of the financial crisis," U.S. District Judge Richard Holwell summarized in a 53-page Memorandum Opinion and Order. In particular, GE was accused of concealing "its difficulty issuing commercial paper; the quality of many of its investments; the fact that many of its assets were overvalued; its inability to pay the full dividend promised; the fact that business at GE Capital was drying up; and the precariousness of its AAA rating," according to the ruling. The retirement fund culled evidence for the lawsuit from former Secretary of the Treasury Henry Paulson's book "On the Brink." "According to Paulson, Immelt called him on September 8, 2008, and again on September 14, 2008, and informed him that GE 'was finding it very difficult to sell its commercial paper for any term longer than overnight.' Paulson concluded based on these conversations that GE was having difficulty funding itself. Paulson also reported that Immelt called him on October 13, 2008, to lobby him to allow GE to participate in the Temporary Loan Guarantee Program ('TLGP'). The initial plan for the TLGP was that it would guarantee the short-term unsecured loans of banks. Immelt expressed his concern to Paulson that the program as it was then conceived would place GE at a competitive disadvantage to the banks because investors would prefer to lend money to entities whose loans were guaranteed by the government. In response to this conversation, Paulson worked to alter the terms of the TLGP so that GE Capital could also participate, and the FDIC eventually changed the program to incorporate this change," Judge Holwell wrote. The second amended complaint also drew upon confidential witnesses, one of whom testified that commercial paper markets were "frozen" as of Sept. 25, 2008. GE finally disclosed that GE Capital's portfolio had lower quality investments in a March 19, 2009 statement that "approximately 42 percent of GE Capital's $183 billion in total consumer loans were made to non-prime borrowers," the judge wrote, citing the second amended complaint. Messrs. Holwell blasted Immelt for his "categorical" statements that investors could count on the company's financial health. "Immelt's categorical statements that investors could 'count on' a dividend and that GE was having 'no difficulties' issuing commercial paper are not the sort of cautious statements one would expect of a CEO attempting to come to grips with the effects of the economic crisis on his company," Mr. Holwell wrote. He added that the retirement fund plausibly argued that this misleading was intentional. "Of course, a CEO is allowed to convince the public to invest in his company, but not at the expense of providing it with accurate information about the company's financial health," Mr. Holwell wrote. "Taking the factual allegations in the SAC as true, the inference that Immelt acted with scienter is at least as compelling as the inference that he did not." Mr. Holwell added that GE could not be sued for every wide-eyed "puffery" it made about its financial health, and therefore dismissed a handful of claims. "Certain types of statements are generally not materially misleading. 'Puffery' is one such type. Puffery is an optimistic statement that is so vague, broad, and non-specific that a reasonable investor would not rely on it, thereby rendering it immaterial as a matter of law," Mr. Holwell wrote. However, he added: "Although the GE prospectus does contain some cautionary language regarding the possibility of write-downs within GE Capital's loan portfolio, this language is not particularly specific. The statements from which defendants quote describe how the faltering economy could hurt GE and how GE could lose money if borrowers defaulted. These statements do not disclose that GE allegedly had shifted its assets around on the books in order to avoid writing them down. As such, defendants did not provide adequate cautionary language regarding the valuation of GE's assets, and these statements survive a motion to dismiss." A copy of the Memorandum Opinion and Order in In re General Electric Co. Securities Litigation, Case No. 09-cv-01951 (S.D.N.Y.), is available at: http://www.courthousenews.com/2012/01/18/GE.pdf GIANT BICYCLE: Recalls 900 Advanced Bicycles Due to Fall Hazard --------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Giant Bicycle, Inc., of Newbury Park, California, announced a voluntary recall of about 900 2012 Model Year Giant Defy Advanced and Avail Advanced Bicycles. Consumers should stop using recalled products immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. The fork can crack, posing a fall hazard to riders. No incidents or injuries have been reported. This recall involves all 2012 model year men's Giant Defy Advanced 0, 1 and 2 model bicycles and the women's Giant Avail Advanced 0, 1, and 2 model bicycles. "Giant" and the model name are printed on the bicycle. The bicycles are various colors and sizes. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12088.html The recalled products were manufactured in Taiwan and sold by authorized Giant Bicycle dealers nationwide from August 2011 through November 2011 for between $3,000 and $4,550. Consumers should immediately stop riding the recalled bicycles and contact any authorized Giant Bicycle dealer for a free inspection and replacement of the fork. For additional information, contact Giant Bicycle toll-free at (866) 458-2555 between 9:00 a.m. and 4:00 p.m. Pacific Time Monday through Friday or visit the firm's Web site at http://www.giant-bicycles.com/ GOOGLE INC: Faces Class Action Over "Google Tags" Ad Service ------------------------------------------------------------ William Dotinga at Courthouse News Service reports that Google duped businesses and consumers by offering free trials of the now- defunct "Google Tags" ad service, then charging for it, according to a federal class action. Even worse, the plaintiffs say, Google refused to delete their credit card information from its billing system, violating California law and putting them at risk of identity theft and fraud. Google's company slogan is "Don't Be Evil." It launched Google Tags in February 2010 as a way for businesses to set themselves apart visually in a Google search or on Google Maps. Google charged a $25 flat monthly fee per listing. In July 2010, Google offered a "free 30-day trial" of Google Tags. Consumers could append a Google Tag to one or more of their listings, for free. To activate the service, however, consumers had to supply their credit card information. Lead plaintiffs Rachel Frezza and Mauro Rodriguez say Google charged them for their use of multiple tags during the free trial period. Ms. Frezza used the service to advertise her small holistic healing business, Mr. Rodriguez to promote his employer's auto dealership. When they contact Google's customer service, they say they were told that the free trial offer "consisted merely of a one-time, $25 discount -- as opposed to the genuinely 'free' use of the tags during the 30-day period. This was not disclosed in the terms of Google's promotional offer," according to the complaint. Google killed the service in April 2011. But the class claims Google kept the credit card information of those who signed up for the trial offer, and refused to provide them a way to delete the sensitive information from its billing records, other than to advise them to cancel the credit card. Since Google required customers to enter credit card information before accepting the not-so-free trial offer, the class claims a contract was created -- and that Google breached it by charging them. The class claims Google also violated California's Customer Records Act: "The members of the Credit Card Class canceled their 'free' trial of Google Tags prior to, or upon, the expiration of the 30-day promotional period, and Google subsequently retired its Google Tags feature altogether. Thus, Google no longer needs to retain the credit card number of the class members. "Nonetheless, Google has continued to retain this personal information in its electronic billing records. "Worse yet, Google has stated to plaintiffs and the Credit Card Class that Google will not delete their credit card information without first requiring that the members either cancel their credit card altogether or replace the existing credit-card number with the number of a new credit card." Google took in more than $28 billion from its advertising programs and products in 2010, accounting for 99 percent of the company's revenue, according to industry estimates. The class seeks compensatory, statutory and punitive damages for breach of contract, unjust enrichment, and consumer law violations. A copy of the Complaint in Frezza, et al. v. Google Inc., Case No. 12-cv-00237 (N.D. Calif.), is available at: http://www.courthousenews.com/2012/01/18/GoogleTags.pdf The Plaintiffs are represented by: Todd C. Atkins, Esq. ATKINS & DAVIDSON, APC 701 B Street, Suite 1170 San Diego, CA 92101 Telephone: (619) 255-2380 E-mail: tatkins@atkinsdavidson.com - and - Joseph J. Siprut, Esq. James M. McClintick, Esq. SIPRUT PC 122 South Michigan Ave., Suite 1850 Chicago, IL 60603 Telephone: (312) 588-1440 E-mail: jsiprut@siprut.com jmcclintick@siprut.com GREAT ATLANTIC: Continues to Defend "Dudley" Suit in New Jersey --------------------------------------------------------------- The Great Atlantic & Pacific Tea Company, Inc. continues to defend a securities class action lawsuit pending in New Jersey, according to the Company's January 17, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 3, 2011. The matter styled Dudley v. Haub, Claus, Galgano et al. United States District Court - District of New Jersey is a securities class action lawsuit that alleges on behalf of purchasers of the Company's securities during the period between July 23, 2009, and December 10, 2010, that certain of the Company's former and current executives violated the securities laws by making fraudulent or misleading statements with respect to material adverse facts about the Company's financial condition, business and prospects. The Company is not named as a defendant in this lawsuit. However, the Company's current CEO and two members of the Board of Directors are individually named defendants. The Company views this lawsuit as lacking merit, as the statements and disclosures forming the basis for the allegations are forward- looking statements subject to "safe harbor" protections, or are otherwise not actionable. GREAT ATLANTIC: "LaMarca" Suit Still Stayed Due to Bankruptcy ------------------------------------------------------------- On June 24, 2004, a class action complaint, captioned LaMarca et al v. The Great Atlantic & Pacific Tea Company, Inc., was filed in the Supreme Court of the State of New York against The Great Atlantic & Pacific Tea Company, Inc., d/b/a A&P, The Food Emporium, and Waldbaum's alleging violations of the overtime provisions of the New York Labor Law. Three named plaintiffs, Benedetto LaMarca, Dolores Guiddy, and Stephen Tedesco, alleged on behalf of a class that the Company failed to pay overtime wages to full-time hourly employees who were either required or permitted to work more than 40 hours per week. This matter has been stayed by the Company's Bankruptcy Filing and is a claim that is subject to compromise. No further updates were reported in the Company's January 17, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 3, 2011. KRAFT FOODS: Time Spent Donning Work Gear Not Compensable --------------------------------------------------------- Rose Bouboushian at Courthouse News Service reports that Kraft Foods employees cannot sue the conglomerate for failing to pay them for time spent donning and doffing work gear, thanks to a longstanding collective bargaining agreement, a federal judge ruled. Kraft Foods employees brought a class action against the company in July 2011, for not paying them for time spent donning and doffing protective work gear. Before entering the production floor of Kraft's Naperville plant, which produces Triscuit crackers, workers must don "shoes, safety glasses, hearing protection, hairnets, beard nets, Kraft-issued T- shirt or snap shirt, and work pants," U.S. District Judge Virginia Kendall wrote in her Memorandum Opinion and Order. The plaintiffs acknowledged in their complaint that the "work time claimed herein is not compensable under the collective bargaining agreements pursuant to which the plaintiffs and members of the putative class are employed." However, the complaint alleged violations of the Illinois Minimum Wage Act and Illinois Wage Payment and Collection Act, rather than the collective bargaining agreement. Judge Kendall certified the class in September 2011. In a previous case against Kraft, the 7th Circuit found in 2010 that federal labor law governing collective bargaining agreements does not pre-empt a Wisconsin law mandating wages for donning and doffing required work gear. There is no comparable law in Illinois. Judge Kendall granted Kraft's motion for summary judgment "because the longstanding custom of non-compensation for donning and doffing between the plaintiffs and Kraft makes such pay unrecoverable." "The Illinois statutes under which plaintiffs assert their claims are silent with respect to the issue of whether donning or doffing time is compensable," and the court must look to federal labor statutes for guidance, Judge Kendall said. "The default rule under the Fair Labor Standards Act is that donning and doffing time is compensable as time worked. However, section 203(o) allows for management and the union to enter into a collective bargaining agreement that excludes from 'Hours Worked' any time spent changing clothes." Judge Kendall found that "the undisputed material facts show that Kraft and the unions have developed a custom or practice of non- payment for the time spent donning and doffing the items at issue here. . . . Since it acquired the facility roughly 20 years ago, Kraft has never paid for time spent donning or doffing. It is no stretch to say that the hourly employees acquiesced in a policy of non-payment for clothes changing." Judge Kendall concluded that the longstanding custom of non- payment for donning and doffing clothes "is the kind of understanding between a union and an employer that section 203(o) is designed to protect." In December 2009, the 4th Circuit came to the same conclusion in a substantively similar case against Allen Family Foods, finding that donning and doffing protective gear can be excluded from paid time according to union negotiations. In that case, Appellate Judge J. Harvie Wilkinson wrote: "We stress that our decision does not leave these employees without protection. It simply recognizes that Congress has made a policy choice that, when it comes to time spent changing clothes and washing, the respective interests involved are best protected through the collective bargaining process and the agreements negotiated pursuant thereto." A copy of Memorandum Opinion and Order in Curry v. Kraft Foods Global, Inc., Case No. 10-cv-01288 (N.D. Ill.), is available at: http://www.courthousenews.com/2012/01/18/Kraft.pdf LEE BACA: ACLU Files Class Action Over Inmate Beatings ------------------------------------------------------ Christina Villacorte, writing for Contra Costa Times, reports that the American Civil Liberties Union slapped Los Angeles County Sheriff Lee Baca and his top brass with a federal class-action suit on Jan. 18, accusing them of condoning "savage" beatings of inmates by deputies at county jails. Filed on behalf of pretrial detainees Alex Rosas and Jonathan Goodwin, as well as current and future inmates, the lawsuit does not seek monetary damages. Instead, the plaintiffs want a federal court order to end the alleged "long-standing and widespread pattern of violence" at county jails, according to Margaret Winter, associate director of the ACLU National Prison Project. "(The plaintiffs) are not asking to be recompensed for what happened in the past," she said. "They're just asking that the judge enter an injunction requiring the sheriff to stop violence like this from happening so that they and all other inmates in the jail, currently and in the future, are protected." ACLU legal director Peter Eliasberg said Baca, Undersheriff Paul Tanaka, Assistant Sheriff Cecil Rhambo and Dennis Burns, chief of custody operations, "allowed deputies to go unpunished, covered up their behavior and for years made no effort to reform this broken system." The lawsuit alleges violations of inmates' rights under the Eighth Amendment prohibition of cruel and unusual punishment, and of pretrial detainees' rights under the 14th Amendment's prohibition of punishment prior to conviction. Mr. Baca's spokesman, Steve Whitmore, denied the ACLU's claims. "Violence is not condoned in the Sheriff's Department," he said. "Don't forget: violence is perpetrated by the inmates," Mr. Whitmore added. "The inmates begin the violent act and the deputies contain it. Regrettably, sometimes they have to use force." Mr. Whitmore added Mr. Baca recently installed dozens of cameras inside the jails as a preventive measure and followed other recommendations by the Board of Supervisors and the recently created Citizens Commission on Jail Reforms. Supervisor Zev Yaroslavsky, who proposed the Commission, acknowledged there were problems at the jails but was skeptical of claims that Mr. Baca condoned abuse. "These kinds of problems don't take place without someone being asleep on the job or worse, but I think it's a stretch to say that the sheriff has personally condoned this kind of activity," he said. "I think Baca takes this very seriously, but he has to communicate that concern and his expectations down the chain of command," Mr. Yaroslavsky added. The lawsuit, filed in U.S. District Court in Los Angeles, listed allegations by dozens of inmates over a period of several years. Both plaintiffs Messrs. Rosas and Goodwin claimed to have witnessed deputies beating a handcuffed and nonresisting inmate in 2011. They said the same deputies later went into their cells and punched them in the head and other parts of the body. One also was sent to solitary confinement. "It is typical for deputies to subject unresisting inmates to grossly excessive force by slamming inmates' heads into walls, punching them in the face with their fists, kicking them with their boots, and shooting them multiple times with their Tasers -- and for these beatings to result in serious injuries to the inmates, including broken legs, fractured eye sockets, shattered jaws, broken teeth, severe head injuries, nerve damage, dislocated joints, collapsed lungs, and wounds requiring dozens of stitches and staples," the formal complaint stated. "Deputies sadistically beat inmates with serious mental illness," it continued. "They have beaten inmates who are already in fragile medical condition, including inmates in wheelchairs. Deputies have beaten inmates asking for medical treatment, for the color of their skin, or for no apparent reason at all." The ACLU said one inmate even accused a deputy of raping him in his cell. The alleged victim gave videotaped testimony about the alleged incident, which is posted on the ACLU's Web site. MIDWEST GENERATION: Faces Class Action Over Toxic Emissions ----------------------------------------------------------- Courthouse News Service reports that a class action claims Midwest Generation severely pollutes the air and damages property with toxic emissions from its coal-fired electric plant, the Fisk Facility. A copy of the Complaint in Paraday, et al. v. Midwest Generation, LLC, et al., Case No. 12CH01575 (Ill. Cir. Ct., Cook Cty.), is available at: http://www.courthousenews.com/2012/01/18/Filthy.pdf The Plaintiffs are represented by: Arturo Jauregui, Esq. Anselmo Duran, Esq. JAUREGUI & ASSOCIATES, P.C. 120 West Madison St., Suite 400 Chicago, IL 60602 Telephone: (312) 781-9103 - and - Peter W. Macuga, Esq. Steven D. Liddle, Esq. Kevin J. McGiness, Esq. MACUGA, LIDDLE & DUBIN, P.C. 975 East Jefferson Avenue Detroit, MI 48207-3101 Telephone: (313) 392-001 NETFLIX: Royal Oak Retirement System Files Class Action ------------------------------------------------------- Ashley C. Woods, writing for MLive.com, reports that customers raged and journalists scorned when Netflix decided to institute a whopping 60% pay hike last July on viewers who rent DVDs and utilize the company's online streaming content. According to Deadline.com, the online DVD-rental company has lost 67% of its stock value and 1 million subscribers since the new price scheme went into effect. But movie buffs and TV addicts aren't the only ones steaming mad about the new Netflix pricing. In Michigan, the City of Royal Oak Retirement System, which handles benefits and pensions for retired municipal employees, filed suit on Jan. 13 in a northern California district court. The complaint alleges Netflix concealed negative business trends in 2011, which helped gouge the stock price to $300 a share before the news was announced. The suit also alleges that investors in the know -- including company officials -- collected over $90 million by selling 388, 661 shares with insider information. Netflix is based in Los Gatos, California. The complaint specifically names, in addition to Netflix, Chairman and CEO Reed Hastings, CMO David Wells, Chief Content Officer Ted Sarandos, Chief Product Officer Neil Hunt and CMO Leslie Kilgore. CEO Hastings reportedly made $43 million selling shares of Netflix. The plaintiffs, shareholders in the company, allege that Netflix officials knew the business couldn't afford to keep short-term contracts with streaming content providers like Starz, especially in the wake of the announcement. In effect, they say Netflix deliberately misled shareholders in regards to their 2011 earnings estimates. Jan. 17, Deadline: The suit alleges that through mid-2011 CEO Reed Hastings and other company officials made over-optimistic forecasts about Netflix's financial performance and scoffed at critics who questioned the company's ability to pay for slew of programming commitments it was making for its video streaming service. The defendants "recognized that Netflix's pricing would have to dramatically increase to maintain profit margins given the streaming content costs they knew the Company would soon be incurring," the suit says. Things got worse for Netflix, and quickly. In September, the company acknowledged that it had lost 1 million subscribers since announcing the new pay scheme, which went into effect on Sept. 1. Jan. 13, Bloomberg: Netflix . . . fell $39.46, or 19 percent, to $169.25 on Sept. 15 after cutting its U.S. subscriber forecast following a price increase. The shares plunged 35 percent, to $77.37, on Oct. 25 after the video-rental service said it lost 800,000 U.S. subscribers in the third quarter, more than expected, and predicted more cancellations over a price increase. However, the company's stock surged 11% in early January, after Netflix announced that subscribers had collectively logged two billion hours of streaming television time, making the company's site the 15th most-watched television channel in the United States. But Netflix hasn't released new data on subscribers since last fall. The City of Royal Oak Retirement System has retained Darren J. Robbins, a founding partner of California law firm Robbins Geller Rudman & Dowd. Mr. Robbins, a veteran plaintiff's lawyer in class-action lawsuits, wants the court to grant them class-action status. If the motion is granted, any shareholder would be able to join in the case. But a class-action lawsuit might be an uphill battle, according to tech blog Mashable, which spoke with an anonymous securities advisor. Jan. 17, Mashable: "Another issue is damage," the source pointed out. "How would a judge define them? Typically one's stock being 'overvalued' does not create a cause of action, the logic being that even if the stock was overvalued with respect to fundamentals, it was nevertheless trading at that price so the investor could have sold at the right time and reaped the benefit." OBESITY RESEARCH: Sued Over Bogus Claims on "Lipozene" Products --------------------------------------------------------------- Courthouse News Service reports that a federal class action claims the Obesity Research Institute pushes its "Lipozene" products with bogus claims. A copy of the Complaint in Conde v. Obesity Research Institute, LLC, et al., Case No. 12-cv-00413 (C.D. Calif.), is available at: http://www.courthousenews.com/2012/01/18/Obesity.pdf The Plaintiff is represented by: Scott J. Ferrell, Esq. James B. Hardin, Esq. Ryan M. Ferrell, Esq. NEWPORT TRIAL GROUP 895 Dove Street, Suite 425 Newport Beach, CA 92660 Telephone: (949) 706-6464 E-mail: sferrell@trialnewport.com jhardin@trialnewport.com rferrell@trialnewport.com OCZ TECHNOLOGY: Hearing on Bid to Dismiss SSD Suit on Feb. 2 ------------------------------------------------------------ OCZ Technology Group, Inc.'s motion to dismiss a class action lawsuit pending in California is scheduled for hearing on February 2, 2012, according to the Company's January 17, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended November 30, 2011. On March 24, 2011, a purported class action lawsuit was filed in the United States District Court for the Northern District of California San Jose Division alleging that certain of OCZ's solid state drives ("SSDs") sold after January 1, 2011, did not meet certain performance criteria and as a result OCZ engaged in certain deceptive practices and violated various laws. As of November 30, 2011, the Company has not recognized this contingency within the financial statements presented as OCZ believes that the lawsuit has no merit and intends to vigorously defend against this litigation. On May 18, 2011, OCZ filed a Motion to Dismiss Plaintiff's Complaint, or Alternatively, to Strike Certain Allegations. The Motion was granted in part and denied in part on October 4, 2011. On November 18, 2011, plaintiff filed an amended complaint and, on December 20, 2011, the Company again filed a Motion to Dismiss or Alternatively to Strike Certain Allegations. The Motion is scheduled for hearing on February 2, 2012. A tentative class certification hearing is set for May 21, 2012 (assuming the plaintiff moves for certification and depending upon when the plaintiff does so), and a trial date of May 28, 2013 has been set. SAMSUNG: Gilman Files Class Action Over Galaxy S Phone Defect ------------------------------------------------------------- Gilman Law LLP has filed a class action lawsuit in U.S. District Court for the Middle District of Florida, Fort Myers Division, alleging Samsung's Galaxy S smartphones, including the Captivate, Fascinate, Vibrant and Epic 4G, are defective, rendering them worthless. The lawsuit seeks, among other things, at least $5 million in damages for all purchasers of the allegedly defective phones (Case No. 2:11-cv-00696). Ken Gilman, a partner with Gilman Law, is named lead plaintiff in the complaint. According to the lawsuit, Mr. Gilman spent hundreds of dollars on a Fascinate smartphone in December 2010. The complaint alleges that shortly after it was purchased, the phone began to malfunction. As a result, Mr. Gilman missed many phone calls, alerts, messages, e-mails and alarms, and lost the ability to access or save data to his phone. The lawsuit further alleges that Samsung refused to replace the device, despite his repeated attempts to procure a working phone. As an attorney, Mr. Gilman has been working to protect consumer rights for more than 30 years, and has successfully pursued product liability claims against a number of large companies. As an attorney, and a consumer himself, Mr. Gilman has long been disturbed at the continuing rollback of laws that once protected the public from shoddy and defective products, as well as corporate wrongdoing. Just 8 months ago, for example, the U.S. Supreme Court issued a ruling in a case entitled AT&T Mobility LLC v. Concepcion that could allow any company to block class-action suits arising from disputes with customers and instead force those customers into binding arbitration. The type of arbitration clauses that sparked the AT&T decision are widely used by cellphone carriers, cable providers, credit card companies, stock brokerage firms and other businesses. "That cuts off a person's rights," Mr. Gilman recently told the Naples Daily News. "Now what they have done is preclude you from going to court. Companies can treat citizens any way they please because there's nothing consumers can do about it." Mr. Gilman suspects that Samsung will try to use the arbitration decision to have his lawsuit dismissed, but believes he can win. Such a victory would not only benefit purchasers of Galaxy S smartphones, but would help to restore some protection to all U.S. consumers. Mr. Gilman emphasized that "the principles involved in this case, and in other cases interpreting the AT&T-Mobility Supreme Court decision, will effect consumer rights in nearly every consumer product purchased by contract-from cell phones, to loans, to credit cards, to home purchases-virtually any consumer transaction." Gilman Law LLP is national law firm with offices in Florida and Massachusetts. The consumer attorneys at Gilman Law have over 32 years of experience representing individuals in consumer class action lawsuits and all aspects of consumer litigation. If you wish to discuss this action, obtain further information and participate in this or any other consumer law matter, please contact our firm. SAPS: Faces Class Action Over Police Brutality ---------------------------------------------- Alfred Moselakgomo, writing for Sowetan Live, reports that Police Minister Nathi Mthethwa is facing a ZAR10-million lawsuit after 16 people at Leandra in Mpumalanga were allegedly brutalized by members of the SAPS Tactical Response Team last month. Lawyers representing the 16, who include police officers, lawyers and traffic officers, told Sowetan on Jan. 17 that their clients were assaulted for no reason by the controversial unit. The victims also allege they had unsuccessfully tried to open cases at the local police station. "We have been unable to open a case at Leandra police station so we have decided to instead sue the minister. If the police cannot help us, then he should," said one of the victims. They have accused the provincial Tactical Response Team of randomly beating them up "for nothing". The victims claim the response unit, which is based in Nelspruit, travels all over Mpumalanga leaving chaos in its wake. People in the area call this unit "Amaberete" because of the distinctive black and red berets they don. The unit is under the command of safety and security MEC Vusi Shongwe. Jabulani Motsoene, 32, a traffic officer at Trichardt, claims he was assaulted by the officers when he questioned them about scratches on his car. "I had left the car at the car wash when I received a call that there was a fight between members of the community and the TRT next to where I had left my car," Mr. Motsoene said. "When I got to the car, I found that it had rubber bullet marks and when I tried to ask them who had damaged my car, they started assaulting me." Another resident, Herman Ntuli, said: "Police found us next to the car wash and without saying any word started beating us. It was chaos. This TRT is treating every member of the community as a criminal and they have harmed even the innocent." Lawyer Mafika Sihlali said Mr. Shongwe appeared to be encouraging the unit's "barbaric behaviour". "Shongwe has endorsed the brutality of this police unit by saying that people found in taverns should not expect to be treated like people who are in church," Mr. Sihlali said. Mr. Shongwe on Jan. 17 denied he was behind the terror unleashed by the unit. "The unit was acting on the instruction of the provincial commissioner and I was not even aware that they were in Leandra on that day," Mr. Shongwe said. On the other hand, Mr. Mthethwa's office said it was not aware of the claims. Spokesman Zweli Mnisi said it was every citizen's right to sue the state "if they felt their rights have been violated". SKECHERS: Faces Class Action Over Shape-Ups Injuries ---------------------------------------------------- Carmel Lobello, writing for death + taxes, reports that Skechers is facing a class action over its walking sneakers with fat, curved soles , which promise to help you "get in shape without setting foot in a gym." As with many such products, the claims brands make about toning sneakers are largely unsubstantiated. Now Skechers, which avoided using specific numbers in their ads, is coming under fire for a different reason, namely that the curvy-soled shoes cause injury. According to 10 News, a San Diego law firm is filing a class- action suit against the shoemaker, naming 37 customers who were injured while using Shape-ups or Tone-ups to get fit. In addition to claims of negligence and fraud, all customers in the suit cited serious injuries, from torn cartilage to hip fractures. Attorney Mike Bomberger said some injuries were caused by a fall, while others were hurt after wearing the shoes for months. "Man has been walking the same way for many years, and this changes the way you walk. It's not a surprise people are going to have problems," said Mr. Bomberger. "In a previous published statement, the company said: 'Millions of people wear Shape-ups without experiencing (serious injuries).'" Torn cartilage and hip fractures are serious injuries, but it's still hard to know how unsafe Shape-ups really are. STEELCASE INC: Recalls 11,000 Amia Desk Chairs Due to Fall Hazard ----------------------------------------------------------------- About 11,000 Amia desk chairs were voluntarily recalled by Steelcase Inc., of Grand Rapids, Michigan in cooperation with the CPSC. Consumers should stop using the product immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. The pivot pins installed in the control mechanism under the chair seat can fall out, posing a fall hazard to the user. No incidents or injuries have been reported. This recall includes the model 482 Series Steelcase Amia desk chairs manufactured between March 1, 2011, and June 6, 2011. The model number and manufacture date are printed on a label on the underside of the chair seat. The seats are available in various colored fabric options as well as leather. A picture of the recalled products is available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12712.html The recalled products were manufactured in the United States of America and sold at authorized Steelcase dealers and retail outlets including Healthy Back Store, CSN, Home Office Solutions, Office & Company and Sam Flax stores nationwide and online at http://www.store.steelcase.com/from March 2011 through June 2011 for between $350 and $700. Consumers should immediately stop using the chairs and contact Steelcase to receive adhesive covers to apply over the pivot pins on their chairs. These pin adhesive covers can be applied without the use of a tool in less than five minutes. The firm is contacting all known purchasers. For additional information, contact Steelcase toll-free at (800) 391-7194 between 8:00 a.m. and 5:00 p.m. Eastern Time Monday through Friday. Consumers can also e-mail the firm at retrofits@steelcase.com WISDOMTREE INVESTMENTS: Awaits Development in "Steinhardt" Suit --------------------------------------------------------------- WisdomTree Investments, Inc., is awaiting Michael Steinhardt's next course of action in his lawsuit against Occam Networks, Inc., according to the Company's January 17, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. The Chairman of the Company's board of directors, Michael Steinhardt, was the plaintiff in a civil class action filed in the Court of Chancery of the State of Delaware, in a case entitled Michael Steinhardt, Herbert Chen, Derek Sheeler, Steinhardt Overseas Management, L.P., and Ilex Partners, L.L.C., v. Robert Howard-Anderson, Steven Krausz, Robert Abbott, Robert Bylin, Thomas Pardun, Brian Strom, Albert Moyer, and Occam Networks, Inc., C.A. No. 5878-VCL. Occam Networks, Inc., was a publicly traded Delaware corporation that announced on September 16, 2010, that it had entered into a merger agreement with Calix, Inc., another publicly traded company in the telecommunications equipment industry. Plaintiffs, Occam shareholders, filed the class action challenging the merger. As part of these proceedings, the court entered a confidentiality order to protect the non-public information that would be exchanged in discovery. This order contained both a general requirement that non-public information produced in the action be used solely for purposes of the litigation and a specific restriction against purchasing, selling, or otherwise trading in the securities of Occam or Calix on the basis of such information. Beginning on December 28, 2010, Mr. Steinhardt began short-selling Calix stock as a way to exit his Occam position. The Defendants filed a motion for sanctions on the basis that Delaware law prohibits plaintiff-fiduciaries from trading stock while they are in possession of non-public information they obtained in discovery. After conducting an evidentiary hearing, the court granted the defendants' motion for sanctions. The court dismissed Mr. Steinhardt and his affiliated funds from the case with prejudice, barred them from receiving any future recovery in the lawsuit, required them to self-report their improper trading to the Securities and Exchange Commission and disclose it in any future application to serve as lead plaintiff, and ordered them to disgorge profits of over $530,000. Mr. Steinhardt's actions did not involve the Company or trading in the Company's securities and, based on the facts currently known, the Company does not believe Mr. Steinhardt's actions will have a material impact on its business, although there can be no assurance that this will be the case. Mr. Steinhardt has informed the Company that he believes that his actions were entirely appropriate and lawful and is still evaluating the court's recent opinion to determine his course of action. YASSINE ENTERPRISES: May Face Class Action Over Unpaid Overtime --------------------------------------------------------------- Jim Bergamo, writing for KVUE News, reports that more than 200 people could join a class action lawsuit against the owner of several Austin clubs. Some current and former employees of eight downtown Austin nightclubs owned by Yassine Enterprises claim the company didn't pay them a dime. A former employee of Roial filed the lawsuit. He is being represented by Dan Byrne. In Texas, bartenders, waiters and waitresses can make the minimum wage of $7.25 an hour or agree to a wage of $2.13 an hour plus tips. That's what the former employee of Roial thought he was earning during his several months at Roial. "When his employment ended he went in to the human resource person and made an inquiry, 'Where is my paycheck?'" said Dan Byrne, the attorney representing the claimants in the class action lawsuit. "He was told, 'We do not issue paychecks.'" The employee did not know he had been working for tips only. "No wages, no paycheck, nothing," said Mr. Byrne. "This is pretty rare. You see these federal wage cases on a fairly regular basis but zero wages being paid I have never seen it before." Roial, is one of eight establishments named in the class action suit. All are owned by Mike Yassine of Yassine Enterprises. An attorney representing Yassine released a statement saying, in part, ". . . Yassine is cooperating in the class action, and is committed to complying with all laws regarding the payment of tipped employees. We are not commenting on the merits of the Plaintiffs wage claims in the lawsuit . . ." Bartender Danny Langley doesn't work for Yassine Enterprises but says he's concerned for those who do. "I have got friends of mine that work at Pure, one of the bars that is in question," said Mr. Langley. "They do not know what is going to happen." At the moment, there are nine people who have joined the class action lawsuit. The attorneys for the claimants are hoping the hundreds of notices they've sent out will result in many former and current employees opting in. ZAPPOS.COM: Faces Class Action Over Customer Data Breach -------------------------------------------------------- Courthouse News Service reports that a federal class action claims Zappos.com and its corporate parent Amazon.com compromised 24 million people's personal information by letting hackers into "unprotected servers" in western Kentucky. The class claims: "On January 16, 2012, plaintiff and over 24 million class members received an e-mail from Zappos.com notifying them that their PCAI [personal customer account information] had been stolen and/or compromised. "According to Tony Hsieh, the Zappos.com CEO, plaintiff's and class members' PCAI including, inter alia, their names, account numbers, passwords, e-mail addresses, billing and shipping address, phone numbers, and the last four digits of the credit cards used to make purchases was stolen by hackers who gained access to Zappos.com's internal network through its unprotected servers located in, on information and believe, Shepherdsville, Kentucky." Amazon bought Zappos in 2009. The class seeks damages and exemplary for privacy invasion, negligence, and willful and negligent violation of the Fair Credit Reporting Act, plus costs and credit monitoring. A copy of the Complaint in Stevens v. Amazon.com, Inc. d/b/a Zappos.com, Case No. 12-cv-00032 (W.D. Ky.), is available at: http://www.courthousenews.com/2012/01/18/Zappos.pdf The Plaintiffs are represented by: Mark K. Gray, Esq. GRAY & WHITE 713 E. Market Street, Second Floor Louisville, KY 40202 Telephone: (502) 805-1800 E-mail: mgray@grayandwhitelaw.com - and - Ben Barnow, Esq. Erich P. Schork, Esq. Blake A. Strautins, Esq. BARNOW AND ASSOCIATES, P.C. One N. LaSalle Street, Suite 4600 Chicago, IL 60602 Telephone: (312) 621-2000 E-mail: b.barnow@barnowlaw.com e.schork@barnowlaw.com b.strautins@barnowlaw.com - and - Richard L. Coffman, Esq. THE COFFMAN LAW FIRM First City Building 505 Orleans Street, Suite 505 Beaumont, TX 77701 Telephone: (409) 833-7700 E-mail: rc@cofflaw.com * Lawyer Says Sexual Abuse Victims Must File Own Lawsuits --------------------------------------------------------- Ian Fairclough, writing for Herald News, reports that victims of serial sexual abusers should consider filing their own lawsuits instead of getting involved in class actions, says an Ontario lawyer who has represented people assaulted by priests. "Some of it has to be based upon your personal philosophy; I just don't believe in class-action suits for victims of sexual abuse, and particularly childhood victims who have been abused by priests," Paul Ledroit said on Jan. 17. "I can't think of a worse thing that you could do to a child." Mr. Ledroit represents half a dozen people in southwestern Nova Scotia who are suing the Roman Catholic Archdiocese of Halifax- Yarmouth and an Inverness County man who is suing the Diocese of Antigonish. He said his prime aim is to help people with their personal healing. "If a person just wants money, I tell them to go elsewhere," Mr. Ledroit said. But he will help someone "if they're interested in working through the process of the hours that it takes to tell me their story and write it down and to go through the discovery process and be cross-examined by the other lawyer as to what happened and to get into therapy." He said victims of sexual abuse by priests "all suffer, to a greater or lesser extent, from a myriad of post-traumatic stress disorder problems." "Working through it and coming clean and facing the demons is the only way that you can lessen the wound. A class action just doesn't provide that; it's not individualistic enough." While class actions pay out on the basis of the type of abuse, Mr. Ledroit said that doesn't provide for other factors, such as whether there was family support that let someone talk about the abuse, or whether they kept it to themselves and they were susceptible to mental health issues. "To put people on a meat chart on a sexual abuse case is not in keeping with my personal philosophy." He said some class actions include a clause that if the number of claimants gets over a certain number, both parties can bail out of the agreement. But once the payments start, that can't be undone. Mr. Ledroit's comments come after word that an influx of claimants was cutting into the amount of money from the Diocese of Antigonish available to the original list of victims of sexual abuse by priests. Last November, a letter sent to members of a class action against the diocese said the number of alleged victims joining the suit had reached 140, almost double the predicted 80 claimants. That meant the original victims are only getting about 60 per cent of the amount they thought they would receive. The $15-million settlement was reached in September 2009 for people victimized by clerical abuse in the diocese between 1950 and 2009. The last of the three payments to members of the class action is due in November. ********* 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. Noemi Irene A. Adala, Joy A. Agravante, Ivy B. Magdadaro, Psyche A. Castillon, Julie Anne L. Toledo, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2012. 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 Peter Chapman at 240/629-3300. * * * End of Transmission * * *