/raid1/www/Hosts/bankrupt/CAR_Public/120418.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, April 18, 2012, Vol. 14, No. 76
Headlines
ANGLOGOLD ASHANTI: 6,876 Miners to Join Silicosis Class Action
APPLE INC: Siskinds Files E-Book Price Fixing Class Action
APPLE INC: Hagens Berman Issues Statement on E-Book Class Action
ARCHIPELAGO LEARNING: Faces Plato Merger-Related Suit in Texas
ART INSTITUTE: Faces Class Action in Calif. Over Student Loans
BRILL SECURITIES: Denial of Motion to Compel Arbitration Upheld
BRINKER INTERNATIONAL: Class Action Over Rest Breaks Can Proceed
BUMBLE BEE: Faces Class Action Over Misbranded Food Products
CANADA: Nova Scotia Faces Class Action Over Orphanage Abuses
CSR PLC: Settled Three Class Suits Over Acquisition of Zoran
CYTOSPORT INC: False Advertising Class Action Can Proceed
ENERGYSOLUTIONS INC: Awaits Ruling in "Pennington" Class Suit
ENERGYSOLUTIONS INC: IPO-Related Suit in Initial Discovery Phase
FBR & CO: Expects Thornburg Suit Appeal Briefing to End in June
FBR & CO: Continues to Defend "MHC" Suit vs. Unit in Colorado
FBR & CO: Continues to Defend Suits vs. Unit Over Imperial IPO
FEDERAL SIGNAL: Trial in Consolidated Suit Set for September 4
FERRERO USA: Nutella Class Action Settlement Gets Prelim. Approval
FIRST CALIFORNIA: Continues to Defend Suit Over Bank Charges
FIRST UNITED: Bank Faces Suit Over Residential Mortgage Loans
FULL TILT: Poker Players File Class Action Over Frozen Accounts
GMAC MORTGAGE: 9th Cir. Vacates Injunction on Mayo Plaintiffs
HARLEYSVILLE GROUP: Defends Consolidated Merger-Related Suit
HARLEYSVILLE GROUP: Objections to Policyholders Suit Pending
KADANT INC: Accrued $2.5-Mil. for Payment of Unit's Settlement
KOHLBERG CAPITAL: Time to Appeal N.Y. Suit Dismissal Has Passed
LASKO PRODUCTS: Judge Dismisses Class Action Over Fans
MMODAL INC: Consolidated Shareholder Suit vs. Unit Dismissed
NORFOLK SOUTHERN: La. Sup. Ct. Reverses Certification of 2011 Suit
PHI INC: Appeal From "Superior" Suit Dismissal Remains Pending
SINO-FOREST CORP: Seek To Lift Stay to Proceed with Settlement
U.S. INSURANCE COMPANIES: Ark. Jurisdiction Battle Intriguing
UNION FIRST: Maryland Class Suit vs. Unit Dismissed in 2011
USA TRUCK: Paid "Cerdenia" Suit Settlement Amount in November
VERIZON: Faces Class Action Over False Claims on DSL Speed
W. ROSS MACDONALD: Court Set to Decide on Student Abuse Suit
*********
ANGLOGOLD ASHANTI: 6,876 Miners to Join Silicosis Class Action
--------------------------------------------------------------
New York Amsterdam News reports that a class action lawsuit on
behalf of thousands of former miners who say they contracted
silicosis, a debilitating lung disease, through negligent health
and safety is being prepared against leading South African gold
mining firms.
Attorney Richard Spoor, who won a $100 judgment against a South
African asbestos-mining company in 2003, said he would file class
action papers with the High Court in Johannesburg "within the next
few months".
The lawyer told Reuters news service that some 6,876 plaintiffs
from South Africa and Lesotho, the landlocked kingdom that
provided hundreds of thousands of migrant workers to South
Africa's gold mines over the last century, had signed up so far.
The principal targets of the suit are AngloGold Ashanti, Gold
Fields and Harmony Gold -- South Africa's three biggest gold
miners -- and minor producer DRD Gold, Mr. Spoor said.
The planned suit has its roots in a landmark ruling by the
Constitutional Court a year ago that for the first time allowed
lung-diseased miners to sue their employers for damages.
Speaking to Reuters staffer Ed Cropley, over a dozen former miners
in Lesotho said they had never received protective gear such as
face-masks in the mines.
"The only safety gear they gave us was gloves," said 55-year-old
Tele Nchaka, who now makes a living growing vegetables on a small
plot outside Lesotho's capital, Maseru. Mr. Nchaka was laid off
from Gold Fields' Kloof mine in 2008 after 33 years of service.
"We didn't have masks. To stop the dust, we just had old T-shirts
that we used to make wet."
Mr. Nchaka said he and his colleagues "were never made aware of
the dangers of the dust."
At their peak in the 1980s, South Africa's gold mines employed
500,000 people. Medical research suggests as many as a third of
gold miners have silicosis.
Gold Fields declined to comment on either compensation or health
and safety practices.
APPLE INC: Siskinds Files E-Book Price Fixing Class Action
----------------------------------------------------------
On April 10, 2012, Siskinds LLP, on behalf of eBook consumers,
filed in the Ontario Superior Court of Justice a proposed class
action against Apple Inc., Hachette Book Group, Inc.,
HarperCollins Publishers, Inc., Holtzbrinck Publishers, LLC
carrying on business as Macmillan Publishers, Inc., Penguin Group
(USA) Inc., Simon & Schuster, Inc. and their Canadian subsidiaries
for the price-fixing of eBooks. Camp Fiorante Matthews Mogerman
(CFM) has filed a related claim in British Columbia. The claims
allege that the defendants agreed on changing the method by which
eBooks were sold to retailers and consumers by adopting an
"agency" model. The claims also allege that the defendants agreed
to a thirty percent commission rate to Apple for each eBook sold
and to a retail price-matching "most favored nation" provision,
specifying that no other eBook retailer would sell an eBook title
at a lower price than Apple. The claims allege that the
conspiracy resulted in consumers paying millions of dollars more
for their eBooks.
On April 11, 2012, the United States Department of Justice
announced that it had reached settlements with Hachette,
HarperCollins and Simon & Schuster with regards to the eBooks
price-fixing conspiracy, but would be continuing litigation
against Apple, Macmillan and Penguin.
Siskinds and CFM are experienced class action firms and together
have prosecuted a number of competition law class actions in
Canada. Siskinds and CFM will be working together to pursue the
eBooks litigation on a national basis. Siskinds and CFM will also
be working closely with a top United States class actions law
firm, Hagens Berman Sobol Shapiro LLP, whose main office is in
Seattle, Washington. Hagens Berman Sobol Shapiro LLP is co-lead
counsel in the related U.S. litigation.
Partner Charles Wright of Siskinds stated, "This is a case about
getting fair prices for consumers and ensuring real competition in
Canada. We have been working with Hagens Berman for some time to
benefit from their diligent investigation of this case. The
structure of the Canadian eBook business is similar to that in the
United States and we believe the recent actions by the Department
of Justice in the United States support the allegations made in
our case."
Contacts:
Siskinds LLP
Charles M. Wright
Telephone: (519) 660-7753
(519) 660-7754 (FAX)
E-mail: charles.wright@siskinds.com
Siskinds LLP
680 Waterloo Street
London, ON N6A 3V8
APPLE INC: Hagens Berman Issues Statement on E-Book Class Action
----------------------------------------------------------------
Steve W. Berman of Hagens Berman Sobol Shapiro LLP on April 11
issued a statement regarding the U.S. Justice Department's action
on its e-book antitrust class-action against Apple.
"We are pleased that the U.S. Justice Department and Attorney
General Holder agreed with our analysis that Apple and some of the
nation's largest publishers engaged in anticompetitive practices.
"We've long held that Apple and this group of book publishers
formed a cabal with the sole intent of extinguishing any
competitive influences in the e-book marketplace.
"While Attorney General Holder's actions, if successful, will put
an end to the anticompetitive actions, our class-action is
designed to pry the ill-gotten profits from Apple and the
publishers and return them to consumers.
"One of the main engines of our economy today is technological
innovation, including devices such as the iPad and Kindle. Any
company -- or conspiracy of companies -- trying to illegally limit
the benefit of these technologies is guilty of more than
anticompetitive behavior. They are guilty of stanching future
innovation in the marketplace.
"We are eager to move forward with our civil action against Apple
and the publishers, and to show the court and the public the depth
and breadth of the conspiracy they concocted at the expense of
consumers."
Steve Berman, managing partner of Seattle-based Hagens Berman,
filed a civil class-action complaint on Aug. 9, 2011, alleging
that Apple conspired with the nation's largest publishers to fix
the price of e-books. The lawsuit seeks damages for the purchase
of e-books, an injunction against pricing e-books with the agency
model and forfeiture of the illegal profits received by the
defendants as a result of their anticompetitive conduct which
could total tens of millions of dollars. Mr. Berman was
subsequently named lead counsel of the consolidated case, unifying
a number of similar actions filed across the country.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP --
http://www.hbsslaw.com-- represents workers, whistleblowers,
investors and consumers in complex litigation. The firm has ten
offices.
ARCHIPELAGO LEARNING: Faces Plato Merger-Related Suit in Texas
--------------------------------------------------------------
Archipelago Learning, Inc. is facing a shareholder class action
lawsuit in Texas over its proposed merger with Plato Learning,
Inc., according to the Company's March 15, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011.
On March 3, 2012, the Company entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Plato Learning, Inc., a
Delaware corporation ("Plato") and Project Cayman Merger Corp., a
wholly owned Subsidiary of Plato, providing for the merger of
Project Cayman Merger Corp. with and into the Company, with the
Company continuing as the surviving corporation (the "Merger").
Upon the Merger becoming effective, the Company will become a
wholly owned subsidiary of Plato and each share of Archipelago
common stock issued and outstanding immediately prior to the
effective time will be converted into the right to receive $11.10
in cash, without interest, on the terms and subject to the
conditions set forth in the Merger Agreement.
In connection with the proposed Merger with Plato, on March 7,
2012, the Company, Plato, Merger Sub and members of the Company's
board of directors were named as defendants in a class action
lawsuit (the "Shareholder Lawsuit") filed in the County Court at
Law Number 3 in Dallas County, Texas, on behalf of the Company's
public shareholders. The Shareholder Lawsuit alleges: (i)
breaches of fiduciary duties by members of the Company's board of
directors in connection with the proposed Merger, (ii) a claim for
aiding and abetting the breach of fiduciary duty against all
defendants, (iii) that the proposed Merger is inadequate, unfair
and unreasonable, and (iv) that the Merger Agreement unfairly
deters competitive offers. The Shareholder Lawsuit seeks to
enjoin the proposed Merger, to recover damages in the event that
the proposed Merger is consummated and to award the named
plaintiff in such lawsuit its fees and expenses in connection with
the Shareholder Lawsuit, including reasonable attorneys' and
experts' fees and expenses. The Company has also become aware of
at least one additional potential shareholder lawsuit related to
the proposed Merger.
The Company believes that the Shareholder Lawsuit and any
potential similar lawsuits are without merit and intends to assert
appropriate defenses.
ART INSTITUTE: Faces Class Action in Calif. Over Student Loans
--------------------------------------------------------------
Matt Reynolds at Courthouse News Service reports that the Art
Institute of California misleads students into thinking that
government loans can cover the cost of tuition at the for-profit
college, then leaves them without a degree and saddled with debt,
a class claims in Federal Court.
Lead plaintiff Chinea Washington says she pursued a bachelor's
degree in interior design at the Art Institute of California,
Hollywood, (AICH) after an admissions advisor assured her that
federal loans, grants and scholarships would cover the $89,000
tuition.
"Importantly, no one at AICH ever advised plaintiff that federal
student loans for her AICH bachelor's degree were subject to an
aggregate limit of approximately $57,500 which would not cover the
full cost of tuition," the complaint states.
"During plaintiffs pre-admission interview with the ADA, the ADA
never disclosed that credits earned at AICH were non-transferable
to other institutions of higher learning," Ms. Washington says,
abbreviating assistant director of admissions.
For three years beginning in early 2008, the Art Institute
allegedly provided Washington with a yearly statement estimating
her tuition and fee charges. She says the balance on those
statements usually showed a zero balance, and never mentioned that
federal student aid did not cover the cost of her degree.
Nevertheless in late 2011, Ms. Washington says she received an
e-mail from the school notifying her that she had reached the
limit of her federal student loans.
"On the notice date, when plaintiff first learned of the aggregate
limit, AICH had collected approximately $52,340 in tuition and
fees through federal student loans, for which plaintiff was, and
is, indebted," the suit says. "In addition, approximately $3,822
in interest had accrued on said debt. Moreover, as of the notice
date, approximately 78 credits remained to be completed for
plaintiffs bachelor's degree, at an approximate cost of $37,000."
Since Ms. Washington did not qualify for private student loans,
and could not afford the school's $650 monthly payment plan, she
says she was forced to dropout of school with a $52,162 debt.
In August 2011, the U.S. Department of Justice and four states
filed suit against The Art Institutes' owner, Education Management
Corp., for fraudulently receiving $11 billion in state and federal
aid.
Ms. Washington is represented by Armond Marcarian of Sherman Oaks,
Calif. She seeks restitution, an injunction and compensatory
damages for unfair competition and fraud.
Six Art Institute of California campuses are named as defendants,
along with TAIC - San Diego and TAIC San Francisco Inc.
An Art Institutes spokesman could not immediately be reached for
comment.
A copy of the Complaint in Washington v. The Art Institute of
California Hollywood, Inc., et al., Case No. BC482733 (Calif.
Super. Ct., Los Angeles Cty.), is available at:
http://www.courthousenews.com/2012/04/13/Art%20Institute.pdf
The Plaintiff is represented by:
Armond Marcarian, Esq.
Marc L. McCulloch, Esq.
MARCARIAN LAW FIRM
15260 Ventura Boulevard
Penthouse Suite 2250
Sherman Oaks, CA 91403
Telephone: (818) 995-8787
BRILL SECURITIES: Denial of Motion to Compel Arbitration Upheld
---------------------------------------------------------------
The Appellate Division of the Supreme Court of New York, First
Department, affirmed a trial court's June 2011 order denying
defendants' motion to dismiss the complaint or compel arbitration
in the class lawsuit captioned Hugo Gomez, et al. v. Brill
Securities, Inc., et al., Case No. 652113/10,5914.
Brill Securities is a broker-dealer offering a range of financial
and wealth management services for retail investors. The
plaintiffs are brokers employed by Brill who allege that the
company failed to pay them overtime wages; made illegal wage
deductions; and failed to pay them commissions as agreed.
The Appellate Court decision is concurred by Judges Luis A.
Gonzalez, Peter Tom, and Nelson S. Roman; and dissented by Judges
John Sweeny and Dianne Renwick.
A copy of the Appellate Court's March 15, 2012 opinion is
available at http://is.gd/5Ud8ERfrom Leagle.com.
BRINKER INTERNATIONAL: Class Action Over Rest Breaks Can Proceed
----------------------------------------------------------------
Terry Baynes, writing for Reuters, reports that part of a class-
action lawsuit against Brinker International Inc. can proceed, the
California Supreme Court ruled on April 12, in a closely watched
case about employee meal and rest breaks at the company's
restaurants.
The California high court authorized a class of workers in the
state to proceed with claims that they were denied proper rest
breaks by Brinker. With respect to the meal break claims, the
court ruled that employers only have to provide meal periods to
workers, not make sure employees actually take them.
"An employer must relieve the employee of all duty for the
designated period, but need not ensure that the employee does no
work," Associate Justice Kathryn Werdegar wrote for the unanimous
court.
Workers first sued Brinker, which owns Chili's and Romano's
Macaroni Grills, in 2004 on behalf of a proposed class of around
60,000 non-unionized, hourly employees. They claimed that
managers pressured them to skip their breaks by failing to
adequately staff the restaurants or by threatening to cut or
change their hours.
Brinker's attorneys argued that employees should have flexibility
in choosing whether to take their scheduled breaks.
A California appeals court sided with Brinker in 2008, finding
that the restaurant company only had to "make available" the meal
and rest breaks, but not "ensure" they were taken. The state's
Supreme Court agreed that employers do not have to police meal
breaks but do need to relieve workers of duties at those times.
The court also resolved uncertainty over whether employers need to
enforce a "rolling five-hour" rule, which gives workers a right to
an uninterrupted meal break after five consecutive hours of work.
The first meal break must fall no later than five hours into an
employee's shift, but employers do not have to schedule additional
meal breaks every five hours, the court ruled.
The court also set out clear guidelines for the number and timing
of rest breaks, upholding a lower court's decision to authorize a
class action on those claims.
Tracee Lorens, a lawyer for the plaintiffs, welcomed the opinion
as a win for low-wage workers across the state.
"We never argued employers had to police breaks. We just argued
that they had an affirmative obligation to relieve the employees
of duty so that they could take their lunch break if they wanted
to," she said. She said the case would now go back to the trial
court to determine whether the meal break claims can remain part
of the class action.
A spokeswoman for Brinker said the company was still reviewing the
ruling and could not immediately comment.
California employers and labor lawyers have waited for three years
for the high court to clarify ambiguities in the state's wage
laws, which require extra pay for meal and rest break violations.
"We had an epidemic of meal and rest-break cases where virtually
every employer in the state was being sued," said Scott Witlin --
scott.witlin@BTLaw.com -- a Los Angeles employment lawyer at
Barnes & Thornburg who is not involved in the case. The lawsuits
have continued to flow in, claiming millions in damages. Many
have resulted seven-figure settlements due to uncertainty in the
law, he said, adding that the ruling helps businesses by
clarifying the law.
Joseph Liburt, an employment lawyer at Orrick in Silicon Valley,
said most businesses have been taking a conservative approach,
paying the extra penalty whenever an employee's timecard shows a
potential meal break issue. Many employers have also tried to
make sure workers actually take their breaks, he said.
The case is Brinker Restaurant Corp v. Superior Court (Hohnbaum),
California Supreme Court, No. S166350.
BUMBLE BEE: Faces Class Action Over Misbranded Food Products
------------------------------------------------------------
Courthouse News Service reports that Bumble Bee Foods
misrepresents its products as "rich in natural Omega-3" without
specifying the type of fatty acid, a federal class claims.
A copy of the Complaint in Ogden v. Bumble Bee Foods, LLC, Case
No. 12-cv-01828 (N.D. Calif.), is available at:
http://www.courthousenews.com/2012/04/13/tuna.pdf
The Plaintiff is represented by:
Ben F. Pierce Gore, Esq.
PRATT & ASSOCIATES
1901 S. Bascom Avenue, Suite 350
Campbell, CA 95008
Telephone: (408) 429-6506
E-mail: pgore@prattattorneys.com
- and -
Jay Nelkin, Esq.
Carol Nelkin, Esq.
Stuart M. Nelkin, Esq.
NELKIN & NELKIN, P.C.
5417 Chaucer Drive
P.O. Box 25303
Houston, TX 77005
Telephone: (713) 526-4500
E-mail: jnelkin@nelkinpc.com
cnelkin@nelkinpc.com
snelkin@nelkinpc.com
- and -
Don Barrett, Esq.
David McMullan, Jr., Esq.
Brian Herrington, Esq.
Katherine B. Riley, Esq.
BARRETT LAW GROUP, P.A.
P.O. Box 927
404 Court Square North
Lexington, MS 39095
Telephone: (662) 834-2488
E-mail: dbarrett@barrettlawgroup.com
donbarrettpa@yahoo.com
bherrington@barrettlawgroup.com
kbriley@barrettlawgroup.com
krbriphone@yahoo.com
dmcmullan@barrettlawgroup.com
- and -
Charles Barrett, Esq.
CHARLES BARRETT, P.C.
6518 Hwy. 100, Suite 210
Nashville, TN 37205
Telephone: (615) 515-3393
E-mail: charles@cfbfirm.com
- and -
Richard Barrett, Esq.
LAW OFFICES OF RICHARD R. BARRETT, PLLC
2086 Old Taylor Road, Suite 1011
Oxford, MS 38655
Telephone: (662) 380-5018
E-mail: rrb@rrblawfirm.net
- and -
J. Price Coleman, Esq.
COLEMAN LAW FIRM
1100 Tyler Avenue, Suite 102
Oxford, MS 38655
Telephone: (662) 236-0047
E-mail: colemanlawfirmpa@bellsouth.net
- and -
Dewitt M. Lovelace, Esq.
Alex Peet, Esq.
LOVELACE LAW FIRM, P.A.
12870 U.S. Hwy 98 West, Suite 200
Miramar Beach, FL 32550
Telephone: (850) 837-6020
E-mail: dml@lovelacelaw.com
- and -
David Shelton, Esq.
ATTORNEY AT LAW
1223 Jackson Avenue East, Suite 202
Oxford, MS 38655
Telephone: (662) 281-1212
E-mail: david@davidsheltonpllc.com
- and -
Keith M. Fleischman, Esq.
Frank Karam, Esq.
Ananda N. Chaudhuri, Esq.
FLEISCHMAN LAW FIRM
565 Fifth Avenue, 7th Floor
New York, NY 10017
Telephone: (212) 880-9571
E-mail: keith@fleischmanlawfirm.com
frank@fkaramlaw.com
achaudhuri@fleischmanlawfirm.com
CANADA: Nova Scotia Faces Class Action Over Orphanage Abuses
------------------------------------------------------------
Douglas Quan, writing for Postmedia News, reports that two weeks
after appealing to the public for information, police in Nova
Scotia say they have received 17 complaints of alleged abuse at a
former long-running orphanage that catered mostly to black
children.
Authorities say they were moved to act after former residents of
the Nova Scotia Home for Colored Children in Dartmouth went to the
media with allegations of rampant sexual and physical abuse going
back a number of decades. A proposed class-action lawsuit, as
well as dozens of individual lawsuits, have been filed against the
home and the province.
One former resident who lived at the home from 1955 to 1959, has
alleged in court documents that he was sexually assaulted by "the
matron" of the home, forced to eat feces and that a staff member
forced his face into a maggot-infested rabbit carcass.
Another former resident, who was at the home from 1976 to 1979,
said in an affidavit that she had to perform "sexual favors" for
one male staff member in order to get rides to places and that he
would withhold allowances unless girls kissed him on the lips.
Staff members told some of the children they were "stupid" and
"useless," she said.
RCMP Sgt. Bridgit Leger said a sergeant and three detectives from
the RCMP-Halifax Regional Police Integrated Sexual Assault
Investigative Team have been assigned to investigate the
complaints.
They also are digging through police records to look for
allegations that may have been made against the home in the past.
Halifax lawyer Raymond Wagner, whose firm is handling the proposed
class-action, as well as 56 individual lawsuits, said he is
pleased the police finally are investigating but they should have
acted years ago.
"You can't fathom how severe the abuse is," Mr. Wagner said. "It
became systemic. It was just the way of life."
Mr. Wagner said the province also needs to launch an inquiry into
why years of allegations went ignored by provincial staff.
"Bring everything out and bring it to a resolution. The problem
has been suppression."
A spokeswoman for the Nova Scotia Department of Community Services
declined on April 11 to respond to calls for an inquiry.
"This is a matter that is before the courts. We have to let the
legal process unfold," Kristen Tynes said. "We are hopeful that
the outcome will see justice served and bring closure for everyone
involved."
Halifax lawyer John Kulik, who is representing the home, said it
is the home's position that the plaintiffs waited too long to
submit their claims.
Many of the employees in question have died, he added.
A statement of defense in one of the individual lawsuits states
that the home adequately investigated, evaluated and monitored its
employees and provided appropriate supervision to all its
residents.
Opened with great fanfare in 1921, the home took in children who
had been orphaned, neglected or abused.
The home received per diem funding from the province. It also
generated revenues by operating a farm and selling eggs, poultry
and produce.
Residents were made to work on the farm, according to the
statement of claim in the proposed class-action.
After the farm closed in the 1960s, the home generated revenue by
having residents participate in radio broadcasts, travelling
choirs and an annual Christmas fundraising broadcast. Promoting a
"positive public image" was important, the court documents state.
But a very different picture was unfolding behind the scenes,
plaintiffs assert.
Records obtained by the plaintiffs' lawyers and filed in support
of the claim show that provincial staff expressed concerns about a
range of issues, including deprivation of food, physical abuse and
lack of staff training.
Following a site visit, a staff person wrote a letter dated Feb.
4, 1948, to then-provincial child welfare director Fred MacKinnon,
reporting there was nothing on the table except fish chowder. It
was only after talking to the cook that bread and milk appeared on
the table. "I feel sure that the children would have received no
other item for lunch except the fish chowder if we had not come on
the scene."
On March 22, 1954, A.P. Hunt, of the Yarmouth County Children's
Aid Society, wrote a letter to Mr. MacKinnon stating "it is time"
for a thorough investigation into complaints of abuse. The letter
refers to a girl who has a "number of stripes on her back and also
a bad bruise on her leg. The girl claims that she has been beaten
exceedingly with a switch and with a broom handle." Hunt also
expresses concerns about the children's attire, stating that the
girl was sent out of the home "looking like a tramp" with a ragged
coat that was too short and too tight.
In a report dated May 16, 1966, Rosemary Rippon, then-co-ordinator
of foster home services, wrote that none of the staff was trained
in child care or had any nursing experience. The same report,
however, noted that staff seemed to be "doing their best" and that
the children were "happy and healthy."
In a letter to Mr. MacKinnon dated March 20, 1973, J.A. MacKenzie,
then-director of research and planning, recommended the province
not take part in a study of the home. To fund the study "is
simply paying for a stick to beat ourselves," he wrote. He added
that if the board of the home decided to proceed on its own, "we
should make it quite clear that departmental files will not be
made available to the study group. Otherwise, we are simply
asking for another 'scourging at the public pillar.'"
Jane Earle, who served as executive director of the home for 10
months starting in 1980, said in an affidavit in support of the
class-action that the home suffered from chronic underfunding and
that per diems paid by the province to "white" group homes were
"significantly higher."
Ms. Earle added that the facility offered no programming, that
staff were paid very low wages, and that she never saw a childcare
worker come to the home to meet the children.
The proposed class-action suit names two representative
plaintiffs: Deanna Smith of Calgary and Aubrey Pelley of Toronto.
Including those who have filed individual lawsuits, there are now
close to 90 former residents who have come forward with
allegations of abuse, Mr. Wagner said.
Hearings to have the lawsuit certified as a class-action are set
to take place in October.
Today, the Nova Scotia Home for Colored Children is still active,
but its mandate has evolved.
Mr. Kulik, the facility's lawyer, said during the 1960s, '70s and
'80s, the facility became less of a long-term residential facility
and more of a transitional one.
Now, the organization operates the Akoma Family Centre. According
to its Web site, the centre provides short-term residential care
for children of all races and cultures -- a "safe place where
brothers and sisters can stay together until that special foster
family is found for them."
Ms. Tynes, the spokeswoman for the Department of Community
Services, which funds the operation, said licensing staff conduct
site visits to ensure standards are met and that staff regularly
review programs.
"The system described has been in place for more than a decade,"
she said.
CSR PLC: Settled Three Class Suits Over Acquisition of Zoran
------------------------------------------------------------
CSR plc has settled three class action lawsuits over its
acquisition of Zoran Corporation, which became a subsidiary in
August 2011, according to the Company's March 15, 2012, Form 20-F
filing with the U.S. Securities and Exchange Commission for the
year ended December 30, 2011.
In connection with the acquisition of Zoran, CSR was named in
three class action lawsuits in the U.S. including In Re Zoran Corp
Shareholders Litigation, Lawrence Zucker vs. Zoran Corp et. al.
and Clal Finance Mutual Funds Corporation vs. Zoran Corporation,
et. al. A comprehensive settlement amount for all three lawsuits
has been reached with no liability to the CSR Group for the
settlement amount, and which has received court approval.
CYTOSPORT INC: False Advertising Class Action Can Proceed
---------------------------------------------------------
On April 11, 2012, the United States District Court for the
Northern District of California ruled that a false advertising
lawsuit against Cytosport, Inc., producer of the popular Muscle
Milk line of products and energy bars, could proceed.
However, the woman who claims she was duped into believing Muscle
Milk products were healthy and would help her lose weight must
improve her misrepresentation claims in order to proceed with the
class action, a federal judge ruled, reports William Dotinga at
Courthouse News Service.
In her suit against Cytosport Inc., Claire Delacruz alleged
violations of California's consumer protection, unfair
competition, and false advertising laws, as well as fraud and
negligent misrepresentation. She also said that Cytosports'
extensive media campaign leads consumers to believe that its
products are healthy and nutritious, and "should be regularly
consumed to help them diet and live a healthy lifestyle."
To increase sales figures, Cytosport intentionally misrepresents
the purported health benefits of Muscle Milk, and actively draws
consumer attention away from the significant amount of saturated
fats in the products, notes the lawsuit.
"[W]ith almost 50 percent of their caloric content coming from
fats, the products are equivalent to fat-laden junk food," Ms.
Delacruz said, while going on to allege that Cytosport's Muscle
Milk Ready-to-Drink contains the same number of calories and
almost as much fat and saturated fat as a cream-filled Krispy
Kreme doughnut.
The lawsuit alleges that Cytosport profits significantly from its
deceptive marketing of Muscle Milk because the company's depiction
of the products as "healthy" plays into consumers' increasing
interest in health-conscious foods.
Baron and Budd attorneys Roland Tellis and Mark Pifko serve as
counsel in the lawsuit.
"Cytosport is preying on a community that wants to be healthy, but
instead of helping it is contributing to America's obesity
epidemic," said Mark Pifko, attorney at Baron and Budd's Los
Angeles office. "You can't just whip-up a blend of saturated fat
and fractionated oil, and slap a 'healthy' label on it."
U.S. District Judge Claudia Wilken agreed that Cytosports' claim
that "healthy fats" on its Muscle Milk Ready-to-Drink packaging
might mislead consumers.
"This representation is more specific than simply that the product
is healthy. As between saturated and unsaturated fats, the latter
is the healthy fat. A reasonable consumer would be likely to
believe that the drink contains unsaturated, not saturated, fats,"
Judge Wilken wrote.
"The drink container also states that it is a 'nutritional shake.'
This representation, while 'difficult to measure concretely' . . .
contributes to a sufficient claim of deceptive product labeling .
. . the injury to the consumer class as a whole could be
substantial, even if the injury to individual consumers is
minimal. No benefit is served by false and misleading
advertising," she added.
"Cytosport is preying on a community that wants to be healthy, but
instead of helping it is contributing to America's obesity
epidemic," said Mark Pifko, attorney at Baron and Budd's Los
Angeles office. "You can't just whip-up a blend of saturated fat
and fractionated oil, and slap a 'healthy' label on it."
But Ms. Delacruz's complaint is lacking in detail, according to
Judge Wilken.
"Plaintiff alleges that the 'healthy, sustained energy' claim on
the [Ready-to-Drink] seventeen ounce container is false and
misleading. However, the term 'healthy' is difficult to define
and plaintiff has not alleged that the drink contains unhealthy
amounts of fat, saturated fat or calories from fat, compared to
its protein content, based on any objective criteria.
"While plaintiff alleges that Muscle Milk [Ready-to-Drink]
contains unspecified amounts of saturated fat that are equal to or
exceed that in certain Krispy Kreme doughnuts, this analogy is not
helpful," Judge Wilken said, objecting to the lack of
clarification as to the fat content of Krispy Kremes in Delacruz's
complaint.
And Cytosport's ad campaign of "Go from cover it up to take it
off," "From invisible to OMG!" and "From frumpy to fabulous" are
"non-actionable puffery," Judge Wilken said.
However, Ms. Delacruz has alleged an economic injury because of
the alleged misrepresentations, even if she didn't adequately
plead a reliance on the ad campaign according to the judge.
"In sum, plaintiff's claim that the 'healthy fats' and 'nutritious
snacks' statements on the label for 14 ounce Muscle Milk RTD were
misleading, her implication that she read the label and her claim
that she relied on the label in deciding to buy the drink when she
otherwise would not have is sufficient to state her claims," Judge
Wilken wrote.
Ms. Delacruz's reading of Muscle Milk's label claims also helped
her plead an unfair business practice claim, the judge concluded.
Ms. Delacruz has seven days to file an amended complaint that
remedies the defects in her arguments, but may not add additional
causes without Judge Wilken's permission.
A copy of the Order Granting in Part and Denying in Part
Cytosport's Motion to Dismiss Plaintiff's First Amended Complaint
in Delacruz v. Ctysport, Inc., Case No. 11-cv-03532 (N.D. Calif.),
is available at http://is.gd/lTSVTD
ENERGYSOLUTIONS INC: Awaits Ruling in "Pennington" Class Suit
-------------------------------------------------------------
EnergySolutions, Inc. is awaiting a court decision on a motion to
dismiss a class action lawsuit captioned Pennington et al. v.
ZionSolutions, LLC, et al., according to the Company's March 15,
2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
In September 2010, the Company entered into an arrangement,
through its subsidiary ZionSolutions, LLC ("ZionSolutions"), with
Exelon Generation Company ("Exelon") to dismantle Exelon's Zion
nuclear facility located in Zion, Illinois ("Zion Station"), which
ceased operation in 1998.
On July 14, 2011, four individuals, each of whom are electric
utility customers of Commonwealth Edison Company, the former owner
of the Zion Station ("Com Ed"), filed a complaint in the U.S.
District Court for the Northern District of Illinois, Eastern
Division, against ZionSolutions and Bank of New York Mellon, the
trustee of the Zion Station decommissioning trust ("NDT") fund.
The plaintiffs claim that payments from the NDT fund to
ZionSolutions for decommissioning the Zion Station are in
violation of Illinois state law, Illinois state law entitles the
utility customers of Com Ed to payments (or credits) of a portion
of the NDT fund and that Bank of New York Mellon was
inappropriately appointed by ZionSolutions as trustee of the NDT
fund. The plaintiffs seek to enjoin and recover payments from the
NDT fund to ZionSolutions, that payments (or credits) of a portion
of the NDT fund be made to utility customers of Com Ed, the
appointment of a new trustee over the NDT fund, an accounting from
Bank of New York Mellon of all assets and expenditures from the
NDT fund, and costs and attorneys fees. The plaintiffs also seek
class action certification for their claims.
On September 13, 2011, the defendants filed a motion to dismiss
the plaintiffs' claims. The motion has been fully briefed and
submitted to the court for a decision. No decision has been
rendered by the court.
The Company believes the legal claims alleged against it in the
complaint are without merit and it intends to vigorously defend
this action.
ENERGYSOLUTIONS INC: IPO-Related Suit in Initial Discovery Phase
----------------------------------------------------------------
A consolidated class action lawsuit pending in New York is in the
initial phases of discovery, EnergySolutions, Inc. disclosed in
its March 15, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On October 9, 2009, a purported class-action lawsuit captioned
City of Roseville Employees' Retirement System v. EnergySolutions,
Inc., et al., Civil No. 09 CV 8633 ("City of Roseville Lawsuit")
was filed in the U.S. District Court for the Southern District of
New York. On October 12, 2009, a second complaint captioned
Building Trades United Pension Trust Fund vs. EnergySolutions,
Inc., et al., Civil No. 09 CV 8648 (together with the City of
Roseville Lawsuit, the "Related Actions") was filed in the same
court. On February 18, 2010, the court consolidated the Related
Actions and appointed a lead plaintiff. On April 20, 2010, the
lead plaintiff filed its consolidated amended complaint. The
consolidated amended complaint names as defendants
EnergySolutions, Inc., certain of the Company's current and prior
directors, certain of its prior officers, the lead underwriters in
its November 2007 initial public offering ("IPO") and July 2008
secondary offering (the "July 2008 Offering") and ENV Holdings,
LLC, the Company's former parent.
On June 18, 2010, the defendants in the Related Actions filed a
motion to dismiss the consolidated amended complaint. Rather than
oppose the defendants' motion to dismiss, the lead plaintiff filed
a second consolidated amended complaint on August 4, 2010,
expanding on certain allegations in the consolidated amended
complaint and adding certain new allegations. The plaintiffs
bring claims under Sections 11, 12(a)(2) and 15 of the Securities
Act of 1933, as amended (the "Securities Act") against all
defendants and Sections 10(b) and 20(a) of the Exchange Act and
SEC Rule 10b-5 promulgated thereunder against all defendants
except the underwriter defendants. The plaintiffs allege that the
Company's registration statements and prospectuses and other
public disclosures in connection with the IPO and July 2008
Offering contained misstatements and/or omissions of material
fact. Specifically, the plaintiffs allege that the defendants
made material misstatements and/or omissions relating to five
categories of the Company's business: life of plant contracts,
opportunities in the shut-down nuclear reactor market, the Zion
Station project, the Company's rule making petition to the Nuclear
Regulatory Commission ("NRC") to permit the use of decommissioning
funds for disposal of major components prior to the cessation of
activities at nuclear facilities, and global macroeconomic
conditions. The plaintiffs seek to include all purchasers of the
Company's common stock from November 14, 2007, through October 14,
2008, as a plaintiff class and seek damages, costs and interest,
rescission of the IPO and July 2008 offering and such other relief
as the court may find just and proper.
On September 17, 2010, the defendants in the Related Actions filed
a motion to dismiss the second consolidated amended complaint.
The lead plaintiff filed an opposition to the defendants' motion
to dismiss on November 2, 2010, and the defendants filed a reply
memorandum of law in further support of defendants' motion to
dismiss the second consolidated amended complaint on December 10,
2010. On June 16, 2011, the court heard oral argument on the
motion to dismiss. On September 30, 2011, the court granted in
part and denied in part the defendants' motion to dismiss the
second consolidated amended complaint. Specifically, the court,
among other things, dismissed all claims against all defendants
relating to the alleged material misstatements and/or omissions
relating to the state of the Zion Station project and the
potential adverse effects of general macroeconomic conditions and
dismissed certain other claims against certain defendants.
Further, the court denied the defendants' motion to dismiss the
claims related to the alleged material misstatements and/or
omissions relating to life of plant contracts, opportunities in
the shut-down nuclear reactor market and the Company's rule making
petition to the NRC. This proceeding is in the initial phases of
discovery.
FBR & CO: Expects Thornburg Suit Appeal Briefing to End in June
---------------------------------------------------------------
Briefing on an appeal from the dismissal of a subsidiary of FBR &
Co. from a consolidated class action litigation is expected to be
completed in June 2012, according to the Company's March 15, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended
December 31, 2011.
In May 2008, the lead plaintiff in a previously filed and
consolidated action filed an amended consolidated class action
complaint that, for the first time, named Friedman, Billings,
Ramsey & Co., Inc. (now FBR Capital Markets & Co. ("FBRCM"), the
Company's broker-dealer subsidiary) and eight other underwriters
as defendants. The lawsuit, styled In Re Thornburg Mortgage, Inc.
Securities Litigation and pending in the United States District
Court for the District of New Mexico, was originally filed in
August 2007 against Thornburg Mortgage, Inc. ("TMI"), and certain
of its officers and directors, alleging material
misrepresentations and omissions about, inter alia, the financial
position of TMI. The amended complaint included claims under
Sections 11 and 12 of the Securities Act against nine underwriters
relating to five separate offerings (May 2007, June 2007,
September 2007 and two offerings in January 2008). The
allegations against FBRCM related only to its role as underwriter
or member of the syndicate that underwrote TMI's total of three
offerings in September 2007 and January 2008 -- each of which
occurred after the filing of the original complaint -- with an
aggregate offering price of approximately $818 million. The
plaintiffs sought restitution, unspecified compensatory damages
and reimbursement of certain costs and expenses. Although FBRCM
is contractually entitled to be indemnified by TMI in connection
with this lawsuit, TMI filed for bankruptcy on May 1, 2009 and
this likely will decrease or eliminate the value of the indemnity
that FBRCM receives from TMI.
On June 2, 2011, the Court granted FBRCM's motion to dismiss the
consolidated class action complaint as to FBRCM and then entered
final judgment for FBRCM on July 25, 2011. Plaintiffs filed a
timely notice of appeal to the 10th Circuit Court of Appeals,
challenging the District Court's findings; briefing on the appeal
is currently expected to be complete in June 2012.
FBR & CO: Continues to Defend "MHC" Suit vs. Unit in Colorado
-------------------------------------------------------------
FBR & Co. continues to defend a class action lawsuit commenced by
MHC Mutual Conversion Fund, L.P. in Colorado, according to the
Company's March 15, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
The Company's broker-dealer subsidiary, FBR Capital Markets & Co.
("FBRCM") has been named a defendant in the putative class action
lawsuit MHC Mutual Conversion Fund, L.P. v. United Western
Bancorp, Inc., et al. pending in the United States District Court
for the District of Colorado. The complaint, filed in March 2011
against United Western Bancorp, Inc. ("the Bank"), its officers
and directors, underwriters and outside auditors, alleges material
misrepresentations and omissions in the registration statement and
prospectus issued in connection with the Bank's September 2009
offering. The complaint alleges claims under Sections 11 and 12
of the Securities Act against the lead underwriter of the offering
and FBRCM as a member of the underwriting syndicate. Although
FBRCM is contractually entitled to be indemnified by the Bank in
connection with this lawsuit, the Bank's negative financial
condition will decrease or eliminate the value of the indemnity
that FBRCM receives from the Bank.
Although the case is at a preliminary stage, based on management's
review with counsel and present information currently known by
management, resolution of such matters is not expected to have a
material effect on the Company's financial condition, results of
operations, or liquidity.
In certain circumstances, broker-dealers and asset managers may
also be held liable by customers and clients for losses sustained
on investments. In recent years, there has been an increasing
incidence of litigation and actions by government agencies and
self regulatory organizations involving the securities industry,
including class actions that seek substantial damages. The
Company is also subject to the risk of litigation, including
litigation that may be without merit. As the Company intends to
actively defend such litigation, significant legal expenses could
be incurred. An adverse resolution of any future litigation
against the Company could materially affect its financial
condition, operating results and liquidity.
FBR & CO: Continues to Defend Suits vs. Unit Over Imperial IPO
--------------------------------------------------------------
FBR & Co. continues to defend class action lawsuits involving its
subsidiary over Imperial Holdings, Inc.'s initial public offering,
according to the Company's March 15, 2012, Form 10-K filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2011.
The Company's broker-dealer subsidiary, FBR Capital Markets & Co.
("FBRCM") has been named a defendant in four putative class action
lawsuits all alleging substantially identical claims against
Imperial Holdings, Inc. ("Imperial"), its officers and directors
and underwriters for material misrepresentations and omissions in
the registration statement and prospectus issued in connection
with Imperial's February 2011 initial public offering. The cases
of Martin J. Fuller v. Imperial Holdings, Inc., et al. and City of
Roseville Employees Retirement System v. Imperial Holdings, et al,
filed in the Circuit Court of the 15th Judicial Circuit in and for
Palm Beach County, Florida, have been removed to the United States
District Court, Southern District of Florida. Subsequently, two
additional complaints, alleging substantially identical claims,
have been filed in the Southern District of Florida (Sauer v.
Imperial Holdings, et al. and Pondick v. Imperial Holdings, et
al.). The complaints, alleging claims under Sections 11 and 12 of
the Securities Act against the lead underwriters of the offering
will likely be consolidated. Imperial has assumed its contractual
obligation to indemnify the underwriters.
Although these cases involving FBRCM are at a preliminary stage,
based on management's review with counsel and present information
currently known by management, resolution of such matters is not
expected to have a material effect on the Company's financial
condition, results of operations, or liquidity.
In certain circumstances, broker-dealers and asset managers may
also be held liable by customers and clients for losses sustained
on investments. In recent years, there has been an increasing
incidence of litigation and actions by government agencies and
self regulatory organizations involving the securities industry,
including class actions that seek substantial damages. The
Company is also subject to the risk of litigation, including
litigation that may be without merit. As the Company intends to
actively defend such litigation, significant legal expenses could
be incurred. An adverse resolution of any future litigation
against the Company could materially affect its financial
condition, operating results and liquidity.
FEDERAL SIGNAL: Trial in Consolidated Suit Set for September 4
--------------------------------------------------------------
Trial in a consolidated class action lawsuit commenced by
firefighters in Illinois is set for September 4, 2012, Federal
Signal Corporation disclosed in its March 14, 2012, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011.
The Company has been sued by firefighters seeking damages claiming
that exposure to the Company's sirens has impaired their hearing
and that the sirens are therefore defective. There were 33 cases
filed during the period 1999-2004, involving a total of 2,443
plaintiffs, in the Circuit Court of Cook County, Illinois. These
cases involved more than 1,800 firefighter plaintiffs from
locations outside of Chicago. Beginning in 2009, six additional
cases were filed in Cook County, involving 299 Pennsylvania
firefighter plaintiffs. The trial of the first 27 of these
plaintiffs' claims occurred in 2008, when a Cook County jury
returned a unanimous verdict in favor of the Company. An
additional 40 Chicago firefighter plaintiffs were selected for
trial in 2009. Plaintiffs' counsel later moved to reduce the
number of plaintiffs from 40 to 9. The trial for these nine
plaintiffs concluded with a verdict returned against the Company
and for the plaintiffs in varying amounts totaling $0.4 million.
The Company is appealing this verdict. A third consolidated trial
involving eight Chicago firefighter plaintiffs occurred during
November 2011. The jury returned a unanimous verdict in favor of
the Company at the conclusion of this trial. Following this last
trial, the Court advised the parties that it was considering the
possibility of a bifurcated class action trial in which it would
consolidate claims of all Chicago Fire Department firefighters and
conduct a trial on the issue of whether the Company's sirens are
defective and unreasonably dangerous.
On March 12, 2012, after considering briefs and argument submitted
by the parties, the Court entered an order certifying a class of
the remaining Chicago firefighter plaintiffs for trial on certain
issues, including whether Federal Signal sirens were defective and
unreasonably dangerous. The Court has scheduled this trial for
September 4, 2012. The Company is considering an appeal of this
ruling.
FERRERO USA: Nutella Class Action Settlement Gets Prelim. Approval
------------------------------------------------------------------
Michael P. Tremoglie, writing for Legal Newsline, reports that an
order preliminarily approving a settlement that will give
consumers as much as $20 and attorneys as much as $3 million was
issued Feb. 3 in a class action lawsuit against Ferrero U.S.A.,
the maker of Nutella.
The class consists of those who purchased Ferrero's Nutella
hazelnut spread. The plaintiffs claimed the company's advertising
improperly suggested that Nutella is healthier than it actually
is.
Ferrero has denied the allegations and continues to stand by its
product and advertising. Nonetheless, the parties agreed to a
settlement to resolve this lawsuit. The order was granted by the
U.S. District Court for the District of New Jersey.
Purchasers of the product from Jan. 1, 2008 to Feb. 3, 2012, will
receive $4 for each jar of Nutella purchased to a maximum total of
$20. A settlement fund of $2,500,000 to be paid by Ferrero, for
the benefit of Settlement Class Members who do not opt out and who
timely complete a valid Claim Form and certify the number of jars
of Nutella they purchased.
According to the settlement notice, attorneys' fees of no more
than 30 percent of the cash settlement amount inclusive of taxes
will be requested by the lawyers representing the class of
plaintiffs. They will also request from Ferrero a separate award
of attorneys' fees.
This will be separate from the cash settlement. This amount will
not exceed $3 million. The total amount of lawyers' fees and costs
will be determined by the Court.
Ferrero will also be required to change its labeling for Nutella
to prominently display the amount of calories, saturated fat and
sugar content of the product; to change its advertising statement
from "An example of a tasty yet balanced breakfast" to "Turn a
balanced breakfast into a tasty one"; and to replace certain
television advertisements and Web site statements.
FIRST CALIFORNIA: Continues to Defend Suit Over Bank Charges
------------------------------------------------------------
First California Financial Group, Inc., continues to defend a
class action lawsuit filed against its subsidiary, according to
the Company's March 15, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
In February 2011, First California Bank was named as a defendant
in a putative class action alleging that the manner in which the
Bank posted charges to its consumer demand deposit accounts
breached an implied obligation of good faith and fair dealing and
violates the California Unfair Competition Law. The action also
alleges that the manner in which the Bank posted charges to its
consumer demand deposit accounts is unconscionable, constitutes
conversion and unjustly enriches the Bank. The action is pending
in the Superior Court of Los Angeles County. The action seeks to
establish a class consisting of all similarly situated customers
of the Bank in the State of California. The case is in early
stages, as the court stayed the filing of a responsive pleading
and the commencement of formal discovery pending the parties'
informal exchange of information and attempt to resolve the matter
informally. If no informal resolution is reached, management
intends to defend this action vigorously. A court status
conference was scheduled for March 29, 2012.
At this state of the case, the Company has not established an
accrual for probable losses as the probability of a material
adverse result cannot be determined and the Company cannot
reasonably estimate a range of potential exposures, if any.
First California Financial Group, Inc., is a bank holding company
incorporated under the laws of the State of Delaware and
headquartered in Westlake Village, California. The principal
asset of the Company is the capital stock of First California
Bank, or the Bank. The Bank is a full-service commercial bank
headquartered in Westlake Village, California, chartered under the
laws of the State of California and subject to supervision by the
California Department of Financial Institutions and the Federal
Deposit Insurance Corporation.
FIRST UNITED: Bank Faces Suit Over Residential Mortgage Loans
-------------------------------------------------------------
First United Corporation's subsidiary, First United Bank & Trust,
a Maryland trust company, is facing a class action lawsuit in
Maryland over residential mortgage loans, according to the
Company's March 14, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
The Bank has been sued in a class-action lawsuit, and this lawsuit
will likely subject the Bank to significant legal costs and could
subject the Bank to significant money damages in the event that
the Bank does not prevail.
During the fourth quarter 2011, the Bank was named as a defendant
in a class-action lawsuit brought in the Circuit Court for
Montgomery County, Maryland (the "Class-Action Lawsuit") by two
related residential customers who refinanced their residential
mortgage loan through the Bank. The Bank originated and closed
the loan using a common "table funding" process in which the Bank
was named as the lender in the loan documents, but a third-party
funded the loan and became the owner of the loan by taking
immediate assignment of the loan documents from the Bank when the
proceeds were disbursed. The plaintiffs' primary claim is that
the Bank's use of a table funding process caused it to be both a
mortgage broker and a mortgage lender and that, as a consequence,
certain fees collected by the Bank constituted impermissible
finder's fees under Maryland's Loans-Finder's Fee statute. This
statute prohibits a mortgage broker from charging a finder's fee
in any transaction in which the broker is also the mortgage
lender.
The Company says the Bank intends to vigorously defend the Class-
Action Lawsuit, as it believes that the plaintiffs' claims have no
merit because, among other reasons, the Bank was not acting as a
mortgage broker and, in any event, the Bank is exempt from the
statute. The Bank will incur legal fees in defending this
lawsuit, and those fees could be significant. There can be no
assurance that the Bank will prevail in the Class-Action Lawsuit,
and a disposition of the plaintiffs' claims that is adverse to the
Bank could subject the Bank to money damages equal to, for each
loan, three times the amount of the impermissible finder's fee or
$500, whichever is greater. The legal fees that the Bank will pay
to defend this lawsuit and the total amount of money damages that
the Bank might pay in the event it loses the Class-Action Lawsuit
cannot be predicted with any degree of certainty.
FULL TILT: Poker Players File Class Action Over Frozen Accounts
---------------------------------------------------------------
Nick Divito at Courthouse News Service reports that after
prosecutors shut down three leading gambling sites in a Ponzi
scheme investigation last year, Full Tilt Poker executives denied
"hundreds of thousands, if not millions" of players access to
their own money, totaling $150 million, a class claims in Clark
County Court.
Lead plaintiffs Steve Segal, Nick Hammer, Robin Houghdahl and Todd
Terry are "'real-money' Internet poker players who held accounts
with the Full Tilt Poker Internet gambling operation," but say
their accounts were frozen on "Black Friday," as it is referred to
by the online poker community.
On April 14, 2011, the feds seized the assets of the "Big Three"
Internet poker companies in the United States: Full Tilt Poker,
PokerStars and Absolute Poker. An ensuing civil suit against the
companies accused executives and founders of money laundering.
Now Full Tilt players are taking aim at some of the same
executives, filing suit on April 12 against Full Tilt directors
Howard Lederer and Chris "Jesus" Ferguson. The pair allegedly
refused to refund players' deposits or to reimburse players for
the dollar-value of their accounts.
The Justice Department said in a September 2011 lawsuit that
Messrs. Lederer and Ferguson "were utilizing the funds in the
player accounts as their own personal checkbook, and that Full
Tilt Poker was essentially a Ponzi scheme."
By intermingling players' accounts with operational funds,
Mr. Lederer took home $42 million in distributions and authorized
$443 million in distributions to other Full Tilt Poker owners, the
players claim.
Mr. Ferguson allegedly received $85 million in distributions, and
authorized $443 million in distributions to other owners.
"Lederer and Ferguson, by way of Full Tilt Poker, have effectively
conceded their obligation to restore access to U.S. player
accounts, stating: 'Please be assured that your funds are safe,
and we thank you for your patience while we do everything in our
power to have your money returned to you as soon as possible,"
according to the complaint.
Between 2006 and 2011, Full Tilt Poker was "one of the three
largest online poker companies" until the Uniform Internet
Gambling Enforcement Act of 2006 made it a federal crime for a
business to accept most forms of payment in connection with
gambling.
Though many online poker sites stopped operating in the United
States, "Full Tilt did not," the lawsuit states.
Messrs. Lederer and Ferguson "worked to evade these measures" and
started creating "sham merchants and fake e-commerce Web sites and
in doing so, lied to U.S. players, deceived U.S. banks, credit
card and financial institutions," according to the complaint.
Doing so allowed them "to inequitably acquire with millions of
dollars in illicit profits and funds in the player accounts," the
lawsuit states. It also created "illegal avenues for the receipt
of player funds, which led to criminal investigation, indictment
of executives and seizure of assets of the Full Tilt Poker
Umbrella's assets."
"In turn, the defendants have terminated player access to the
player accounts and the players' funds therein despite the
players' superior right to such funds and the permission and
encouragement of the DOJ to return the funds to the players," the
lawsuit states.
The players want their money back, along with damages, for
conversion.
A copy of the Complaint in Segal, et al. v. Lederer, et al., Case
No. 12-cv-00601 (D. Nev.), is available at:
http://www.courthousenews.com/2012/04/13/poker.pdf
The Plaintiff is represented by:
Leonard H. Stone, Esq.
Brett I. Johnson, Esq.
SHOOK & STONE, CHTD.
710 South Fourth Street
Las Vegas, NV 89101
Telephone: (702) 385-2220
- and -
Thomas H. Burt, Esq.
Lawrence P. Kolker, Esq.
Beth A. Landes, Esq.
WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP
270 Madison Avenue
New York, NY 10016
Telephone: (212) 545-4600
E-mail: burt@whafh.com
kolker@whafh.com
landes@whafh.com
GMAC MORTGAGE: 9th Cir. Vacates Injunction on Mayo Plaintiffs
-------------------------------------------------------------
The U.S. Court of Appeals for the Eighth Circuit vacated a
district court order enjoining Michael and Sharron Mayo from
participating in a state court class action against GMAC Mortgage,
LLC and Residential Funding Company. The Eighth Circuit concluded
that the injunction was improper.
The appeal case is captioned Michael D. Mayo; Sharron Mayo; Roy
Frederick Walters; Kip Dudley Richards; David M. Skeens; J.
Michael Vaughan; Garrett Mark Hodes; Walters, Bender, Strohbehn &
Vaughan, P.C., Appellants, v. GMAC Mortgage; UBS Real Estate
Securities, Inc.; Mastr Specialized Loan Trust 2007-01; Deutsche
Bank National Trust Company; Residential Funding Company,
Appellees, Case No. 11-3780 (8th Cir.).
A copy of the Eighth Circuit's March 9, 2012, order is available
at http://is.gd/p2oj7Tfrom Leagle.com.
HARLEYSVILLE GROUP: Defends Consolidated Merger-Related Suit
------------------------------------------------------------
Harleysville Group Inc. is defending itself from a consolidated
merger-related class action lawsuit in Delaware, according to the
Company's March 14, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On September 28, 2011, the Company and its parent, Harleysville
Mutual Insurance Company (the Mutual Company), entered into an
agreement and plan of merger (the Merger Agreement) with
Nationwide Mutual Insurance Company (Nationwide) under which a
subsidiary of Nationwide would merge into the Company, (the
Merger). Nationwide would acquire all of the publicly held shares
of common stock of the Company for $60.00 per share in cash and
the Mutual Company would merge into Nationwide and the
policyholders and members of the Mutual Company would become
policyholders and members of Nationwide. The Mutual Company has
also entered into a voting agreement with Nationwide (the Voting
Agreement) under which the Mutual Company agreed to vote its 53%
voting interest in the Company in favor of the Merger. The Merger
Agreement restricts the Company from engaging in certain
activities and taking certain actions without Nationwide's prior
approval, including among others, the payment of stockholder
dividends.
On October 4, 2011, the Company, the Mutual Company, the Company's
directors, Nationwide and a subsidiary of Nationwide (Merger Sub)
were named as defendants in a putative class action complaint in
the Court of Chancery of the State of Delaware, captioned
Louisiana Municipal Police Employees Retirement System v.
Harleysville Group Inc., et al. That action, purportedly brought
on behalf of a class of stockholders, alleges that the Company's
directors breached their fiduciary duties of care, loyalty, good
faith, candor and independence. The complaint further alleges
that the Company's directors, through their acts, transactions and
courses of conduct, are attempting to unfairly deprive
stockholders of the true value of their investment in the Company.
The complaint further alleges that there exists an imbalance and
disparity of knowledge between the Company's directors and the
Company's public stockholders which makes it inherently unfair for
the Company's directors to benefit from their own interests to the
exclusion of maximizing stockholder value. The complaint further
alleges that the Company's directors failed to disclose to the
plaintiffs all material information necessary to cast an informed
stockholder vote on the proposed transaction. The complaint
further alleges that Nationwide and Merger Sub aided and abetted
the claimed breaches of fiduciary duties by the Company's
directors. The plaintiff seeks injunctive and other equitable
relief, including a request that the court enjoin the Company from
consummating the Merger, as well as damages, fees and costs. To
date, by agreement of the parties, the Company has not filed an
answer to this complaint.
On October 6, 2011, the Company, the Mutual Company, the Company's
directors, Nationwide and Merger Sub were named as defendants in a
putative class action complaint in the Court of Chancery of the
State of Delaware, captioned Eric H. Berger v. Harleysville Group
Inc., et al. That action, purportedly brought on behalf of a
class of stockholders, alleges that the Company's directors
breached their fiduciary duties of care, loyalty, good faith,
candor and independence. The complaint further alleges that the
directors, through their acts, transactions and courses of
conduct, are attempting to unfairly deprive the Company's
stockholders of the true value of their investment in the Company.
The complaint further alleges that there exists an imbalance and
disparity of knowledge between the Company's directors and its
public stockholders which makes it inherently unfair for the
Company's directors to benefit from their own interests to the
exclusion of maximizing stockholder value. The complaint further
alleges that the directors failed to disclose to the plaintiffs
all material information necessary to cast an informed stockholder
vote on the proposed transaction. The complaint further alleges
that Nationwide and Merger Sub aided and abetted the claimed
breaches of fiduciary duties by the Company's directors. The
plaintiff seeks injunctive and other equitable relief, including a
request that the court enjoin the Company from consummating the
Merger, as well as damages, fees and costs. To date, by agreement
of the parties, the Company has not filed an answer to this
complaint.
The plaintiffs in both the Louisiana Municipal Police Employees
Retirement System and the Berger cases are represented by the same
law firm. On October 21, 2011, the Court of Chancery of Delaware
entered an order agreed to by counsel for the plaintiffs and
counsel for the Company, the Mutual Company, the Company's
directors, Nationwide and Merger Sub consolidating both cases. On
January 3, 2012, the plaintiffs filed their Consolidated Amended
Class Action Complaint, which adds allegations about the sale
process, asserting that there was not a vigorous enough effort to
find other buyers at a higher price together with alleged
disclosure shortfalls, all by reference to the preliminary proxy
statement filed by the Company with the SEC on December 23, 2011.
To date, by agreement of the parties, the Company has not filed an
answer to the Consolidated Amended Class Action Complaint.
HARLEYSVILLE GROUP: Objections to Policyholders Suit Pending
------------------------------------------------------------
Harleysville Group Inc. and other defendants' preliminary
objections to a consolidated class action and derivative complaint
brought by policyholders remain pending, according to the
Company's March 14, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On September 28, 2011, the Company and its parent, Harleysville
Mutual Insurance Company (the Mutual Company), entered into an
agreement and plan of merger (the Merger Agreement) with
Nationwide Mutual Insurance Company (Nationwide) under which a
subsidiary of Nationwide would merge into the Company, (the
Merger). Nationwide would acquire all of the publicly held shares
of common stock of the Company for $60.00 per share in cash and
the Mutual Company would merge into Nationwide and the
policyholders and members of the Mutual Company would become
policyholders and members of Nationwide. The Mutual Company has
also entered into a voting agreement with Nationwide (the Voting
Agreement) under which the Mutual Company agreed to vote its 53%
voting interest in the Company in favor of the Merger. The Merger
Agreement restricts the Company from engaging in certain
activities and taking certain actions without Nationwide's prior
approval, including among others, the payment of stockholder
dividends.
After the announcement of the Merger Agreement, the Mutual Company
received five letters on behalf of purported policyholders
objecting to the merger of the Mutual Company into Nationwide (the
Parent Merger). Six lawsuits were filed against the Mutual
Company brought by purported policyholders challenging the
proposed transaction. Initially, Nationwide was named as a
defendant in three of these lawsuits. Since their initial filing,
three of the lawsuits against the Mutual Company have been
dismissed and the remaining three consolidated into one action.
On January 20, 2012, pursuant to a Court Order, plaintiffs filed a
Consolidated Class Action and Derivative Complaint (the CCADC) on
behalf of the three plaintiffs with continuing lawsuits against
the Mutual Company. The CCADC contains nine claims variously
stated as being derivative and/or class in nature: (1) declaratory
and injunctive relief contending that the Merger and the Parent
Merger (the Mergers) are fundamentally unfair; (2) declaratory and
injunctive relief contending that the draft proxy statement for
the policyholders-members of the Mutual Company, which was filed
by the Mutual Company with the Pennsylvania Insurance Department
on December 23, 2011, is materially misleading; (3) declaratory
relief contending that the Merger Agreement prevents the Special
Litigation Committee formed by the Mutual Company's board of
directors from performing its authorized function; (4) equitable
relief contending that the Mutual Company has been effectively
demutualized; (5) breach of duty by the Mutual Company's
directors; (6) aiding and abetting a breach of duty by the Mutual
Company's directors, Nationwide and Merger Sub; (7) unjust
enrichment against the Mutual Company's directors, the two
directors of the Company who are only directors of the Company,
the Mutual Company, Nationwide and Merger Sub; (8) constructive
trust against the Mutual Company, Nationwide and Merger Sub; and
(9) declaratory and injunctive relief to enjoin enforcement of
allegedly unlawful provisions of the Merger Agreement against
Nationwide and the Company. On January 31, 2012, all defendants
filed preliminary objections to the CCADC. The preliminary
objections are pending.
KADANT INC: Accrued $2.5-Mil. for Payment of Unit's Settlement
--------------------------------------------------------------
As of year-end 2011, Kadant Inc. has accrued $2,577,000 for the
payment of claims under a settlement in the class action lawsuit
against a subsidiary, according to the Company's March 14, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2011.
In 2005, the Company's Kadant Composites LLC subsidiary
(Composites LLC) sold substantially all of its assets to a third
party. Under the terms of the asset purchase agreement,
Composites LLC retained certain liabilities associated with the
operation of the business prior to the sale, including the
warranty obligations associated with products manufactured prior
to the sale date. Composites LLC retained all of the cash
proceeds received from the asset sale and continued to administer
and pay warranty claims from the sale proceeds into the third
quarter of 2007. On September 30, 2007, Composites LLC announced
that it no longer had sufficient funds to honor warranty claims,
was unable to pay or process warranty claims, and ceased doing
business. All activity related to this business is classified in
the results of the discontinued operation in the accompanying
consolidated financial statements.
On October 24, 2011, the Company, Composites LLC, and other co-
defendants entered into an agreement to settle a nationwide class
action lawsuit related to defective composites decking building
products manufactured by Composites LLC between April 2002 and
October 2003.
In connection with the settlement, the Company incurred a charge
of $1,185,000 (reported in loss from discontinued operation) in
2011. As of year-end 2011, the Company has accrued $2,577,000 for
the payment of claims under the settlement. If the actual claims
submitted and approved under the settlement agreement exceed the
amount of this reserve, the Company will reflect the amount of the
additional claims paid in the results of the discontinued
operation in future periods, up to a maximum of $5,000,000 as
agreed in the settlement agreement. The Company also accrued
$710,000 as of year-end 2011 for the payment of the plaintiffs'
legal fees and incentives to representatives of the class, as
agreed in the settlement agreement.
Kadant Inc. -- http://www.kadant.com/-- is a supplier of
equipment used in the global papermaking and paper recycling
industries. The company also manufactures granules made from
papermaking byproducts. The company's operations consist of one
operating segment, Pulp and Papermaking Systems (Papermaking
Systems), and two separate product lines reported in Other
Businesses, which include Fiber-based Products and, until its sale
in April 2007, Casting Products. Its Papermaking Systems segment
develops, manufactures and markets equipment for the global
papermaking and paper recycling industries.
KOHLBERG CAPITAL: Time to Appeal N.Y. Suit Dismissal Has Passed
---------------------------------------------------------------
The time for the lead plaintiff to appeal the dismissal of a
consolidated class action lawsuit filed by stockholders in New
York has now passed, Kohlberg Capital Corporation disclosed in its
March 15, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
The Company and certain directors and officers were named as
defendants in three putative class actions pending in the Southern
District of New York brought by stockholders of the Company and
filed in December 2009 and January 2010. The complaints in these
three actions alleged violations of Sections 10 and 20 of the
Exchange Act based on the Company's disclosures of its year-end
2008 and first- and second-quarter 2009 financial statements. The
federal court consolidated the three lawsuits and appointed a lead
plaintiff under the Private Securities Litigation Reform Act on
March 21, 2011, and lead plaintiff filed a consolidated amended
complaint on May 11, 2011. The Company moved to dismiss the
consolidated amended complaint. On July 28, 2011, the Court
granted that motion and dismissed the consolidated amended
complaint, giving the plaintiff until
August 22, 2011, to file any further amended complaint. Lead
plaintiff filed a second amended consolidated class action
complaint on August 22, 2011, which defendants moved to dismiss.
The Court dismissed that complaint with prejudice on October 7,
2011. The time for that Lead plaintiff to appeal the dismissal
has now passed.
LASKO PRODUCTS: Judge Dismisses Class Action Over Fans
------------------------------------------------------
Reuben Kramer at Courthouse News Service reports that a federal
judge dismissed a putative class-action over Lasko-brand box fans
accused of starting fires.
Millions of "portable electric fans" comprising a slew of models
were recalled by the Consumer Product Safety Commission in 2006,
according to the suit.
The fans were blamed for a raft of fires allegedly caused by an
electrical malfunction in their motors, according to court
records.
Lasko settled with the Commission for half-a-million dollars, but
proceeded to sell similarly defective fans after the recall
without disclosing "the continuing defective nature of the box
fans," the suit said.
More fans were recalled in 2011, named plaintiff Deborah Osness
alleged.
What Ms. Osness did not allege, however, is that her fan became
inoperable, U.S. District Judge William Yohn Jr. found on
April 10.
Ms. Osness also failed to sufficiently allege that Pennsylvania-
based Lasko knew of the supposed defect at the time she bought her
fan, Judge Yohn found.
Ms. Osness' lack of specificity is fatal to her case, he ruled,
granting without prejudice Lasko's motion to dismiss.
A copy of the Complaint in Osness v. Lasko Products, Inc., Case
No. 11-cv-03846 (E.D. Pa.), is available at:
http://www.courthousenews.com/2012/04/13/fansuit.pdf
The Plaintiff is represented by:
Scott Alan George, Esq.
Jonathan Shub, Esq.
SEEGER WEISS LLP
1515 Market Street, Suite 1380
Philadelphia, PA 19102
Telephone: (215) 564-2300
E-mail: sgeorge@seegerweiss.com
jshub@seegerweiss.com
- and -
Christopher A. Seeger, Esq.
SEEGER WEISS LLP
One William Street
New York, NY 10004
Telephone: (212) 584-0700
E-mail: cseeger@seegerWeiss.com
- and -
Jay Eisenhofer, Esq.
Linda Nussbaum, Esq.
James Sabella, Esq.
Shelley Friedland, Esq.
GRANT & EISENHOFER P.A.
485 Lexington Avenue
New York, NY 10017
Telephone: (646) 722-8500
E-mail: jeisenhofer@gelaw.com
lnussbaum@gelaw.com
jsabella@gelaw.com
- and -
Joseph M. Vanek, Esq.
Thomas A. Vickers, Esq.
David P. Germaine, Esq.
Jeffrey R. Moran, Esq.
VANEK, VICKERS & MASINI, P.C.
111 S. Wacker Drive, Suite 4050
Chicago, IL 60606
Telephone: (312) 224-1500
E-mail: jvanek@vaneklaw.com
tvickers@vaneklaw.com
dgermaine@vaneklaw.com
jmoran@vaneklaw.com
- and -
Eugene M. Cummings, Esq.
David M. Mundt, Esq.
David Lesht, Esq.
Martin Goering, Esq.
Konrad V. Sherinian, Esq.
Panasarn Aim Jirut, Esq.
Jessica Rissman, Esq.
EUGENE M. CUMMINGS, P.C.
One North Wacker Drive, Suite 4130
Chicago, IL 60606
Telephone: (312) 984-0144
E-mail: ecummings@emcpc.com
dmundt@emcpc.com
dlesht@emcpc.com
mgoering@emcpc.com
ksherinian@emcpc.com
ajirut@emcpc.com
jrissman@emcpc.com
MMODAL INC: Consolidated Shareholder Suit vs. Unit Dismissed
------------------------------------------------------------
A consolidated shareholder class action lawsuit against a MModal
Inc. subsidiary has been dismissed, according to the Company's
March 15, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
MModal Inc. is formerly known as MedQuist Holdings Inc. and
CBaySystems Holdings Limited. The Company's subsidiary, MModal MQ
Inc., is formerly known as MedQuist Inc.
On February 8, 2011, and February 10, 2011, two of MModal MQ
Inc.'s minority shareholders filed class action complaints in the
Superior Court of New Jersey, Burlington County, Chancery
Division, (the "Court") against MModal MQ Inc., the individual
members on MModal MQ Inc.'s board of directors and the Company, in
a matter entitled in Re: MedQuist Shareholder Litigation
("Shareholder Litigation"). Plaintiffs alleged that the
defendants breached certain fiduciary duties they owed to minority
shareholders of MModal MQ Inc. in connection with the structuring
and disclosure of the Public Exchange Offer.
On March 4, 2011, the parties to the Shareholder Litigation
entered into a memorandum of understanding (the "MOU") that
outlined the material terms of a proposed settlement of the
Shareholder Litigation. Under the terms of the MOU, the Company
agreed to extend the expiration of the Public Exchange Offer and
further agreed that if, as a result of the Public Exchange Offer,
the Company obtained ownership of at least 90% of the outstanding
common stock of MModal MQ Inc., the Company would conduct the
Short Form Merger under applicable law to acquire the remaining
shares of MModal MQ Inc. common stock that the Company does not
currently own at the same exchange ratio applicable under the
Public Exchange Offer. MModal MQ Inc. agreed to make certain
supplemental disclosures concerning the Public Exchange Offer,
which were contained in an amendment to Schedule 14D-9 that MModal
MQ Inc. filed with the SEC on March 7, 2011. The Company also
agreed to use its best efforts to finalize a stipulation of
settlement (the "Stipulation of Settlement") and present it to the
Court for preliminary approval within thirty days of the date of
the MOU.
On April 1, 2011, the parties executed the Stipulation of
Settlement that memorialized the terms of the settlement outlined
in the MOU. On this same date, plaintiffs' counsel filed with the
Clerk of the Court a Motion for Preliminary Approval of the
Proposed Stipulation of Settlement. The Motion asked the Court
to, among other things, (a) hold a hearing to address preliminary
approval of the Stipulation of Settlement, (b) certify a class,
for purposes of effectuating the Stipulation of Settlement only,
of all MModal MQ Inc.'s shareholders (except the named defendants
and their families and affiliates) as of and including the date of
the closing of the Short Form Merger contemplated under the
Stipulation of Settlement, and (c) schedule a final hearing within
60 days to determine whether the Stipulation of Settlement is
reasonable and fair and should receive final approval.
The Court held a preliminary approval hearing on April 19, 2011,
and entered an Order preliminarily approving the settlement and
setting a final approval hearing for June 17, 2011 (the
"Preliminary Approval Order"). The Preliminary Approval Order
also required MModal MQ Inc. to provide mail and publication
notice of the proposed settlement to all shareholders of recorded
and established deadlines for objections to the settlement and for
filing briefs in support and in opposition to the settlement.
On June 17, 2011, following mail and publication notice to MModal
MQ Inc.'s shareholders, the Court held a fairness hearing on the
settlement. On this date, the Court entered an Order and Final
Judgment (the "Final Judgment") that, among other things, (a)
certified the settlement class consisting of all MModal MQ Inc.'s
shareholders (except the named defendants and their families and
affiliates) as of and including the date of the closing of the
Short Form Merger contemplated under the Stipulation of Settlement
(the "Settlement Class"), (b) found the terms set forth in the
Stipulation of Settlement to be fair and reasonable and in the
best interests of the Settlement Class, and (c) approved the
application for attorney's fees and costs and awarded plaintiffs'
counsel $.4 million which was recorded in (Benefit) cost of legal
proceedings, settlements and accommodations for the year ended
December 31, 2011. The final judgment also dismissed the case
with prejudice.
NORFOLK SOUTHERN: La. Sup. Ct. Reverses Certification of 2011 Suit
------------------------------------------------------------------
Defendants in the lawsuit captioned Keita Alexander, et al. v.
Norfolk Southern Corporation, et al., Case No. 11-C-2793 (La. Sup.
Ct.) sought review of a judgment certifying the matter as a class
action.
In a March 9, 2012 order, the Supreme Court of Louisiana granted
the defendants' writ and reversed the certification judgment. The
Supreme Court does not believe plaintiffs satisfied the
"predominance requirement." The case is, thus, remanded to the
district court for further proceedings.
The matter arose out of a 2001 chemical spill from a railroad tank
in New Orleans. About 20 people were treated for exposure to the
chemical, and hundreds of others complained about eye, nose,
throat, and respiratory irritations, as well as a noxious smell.
Plaintiffs subsequently filed a class action suit against several
railroad and chemical companies, including Norfolk Southern.
J. Johnson, J. Knoll dissented from the per curiam.
A copy of the Supreme Court's order is available at
http://is.gd/1rUzRcfrom Leagle.com.
PHI INC: Appeal From "Superior" Suit Dismissal Remains Pending
--------------------------------------------------------------
An appeal from the dismissal of a class action lawsuit commenced
by Superior Offshore International Inc. remains pending, according
to PHI, Inc.'s March 14, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended December 31,
2011.
The purported class action captioned Superior Offshore
International Inc. v. Bristow Group Inc., ERA Helicopters, LLC,
Seacor Holdings Inc., ERA Group Inc., ERA Aviation, Inc., and PHI,
Inc., Civil Action No. 1:09-cv-00438 on the docket of the United
States District Court for the District of Delaware, was filed on
June 12, 2009, on behalf of a class defined to include all direct
purchasers of offshore helicopter services in the Gulf of Mexico
from the defendants at any time from January 1, 2001, through
December 31, 2005. The lawsuit alleged that the defendants acted
jointly to fix, maintain, or stabilize prices for offshore
helicopter services during the class period time frame in
violation of the federal antitrust laws. The plaintiff sought
unspecified treble damages, injunctive relief, costs, and
attorneys' fees. On September 14, 2010, the Court granted
defendants' motion to dismiss (filed on September 4, 2009) and
dismissed the complaint. On November 30, 2010, the court granted
plaintiff leave to amend the complaint, limited discovery to the
new allegations, and established a schedule for briefing
dispositive motions.
The defendants filed a motion for summary judgment on
February 11, 2011. On June 23, 2011, the court granted the
defendants' motion for summary judgment, entered final judgment in
favor of the defendants, and dismissed all of the plaintiff's
claims. On July 22, 2011, the plaintiff filed a notice of appeal
with the U.S. Court of Appeals, Third Circuit. The appeal has
been fully briefed and the court had calendared arguments for
March 20, 2012.
Given that plaintiff has not succeeded in advancing its claim
beyond dispositive motions, management currently believes that the
likelihood of loss to the Company from the litigation is remote.
SINO-FOREST CORP: Seek To Lift Stay to Proceed with Settlement
--------------------------------------------------------------
Jeff Gray, writing for The Globe and Mail, reports that a key
player in the allegations facing Sino-Forest Corp. has reached a
tentative deal to help investors pursue a potential class-action
lawsuit against the crippled forestry company.
Lawyers acting for Sino-Forest investors have agreed to drop their
claims against Poyry (Beijing) Consulting Co. Ltd., an arm of
Finland-based global consultancy Poyry PLC, in return for its co-
operation.
The settlement was revealed in documents filed last week in
Sino-Forest's bankruptcy-protection proceedings. Lawyers working
on the potential $9.18-billion class-action lawsuit against Sino-
Forest had included the company's underwriters, auditors and Poyry
in their claims filed last year, accusing the consultancy firm of
"negligence."
A leading lawyer on the case, Dimitri Lascaris of Siskinds LLP in
London, Ont., said under the deal, which must still be approved by
a judge, Poyry would provide documents that would help his case.
"We believe that this co-operation is something that will be of
significant value," Mr. Lascaris said in an interview.
According to a court filing, Poyry has also agreed to act as a
witness for the plaintiffs, if necessary.
Poyry issued reports on the value of Sino-Forest's forestry
holdings in China before the June 2011 allegations by short-seller
Carson Block of research firm Muddy Waters LLC that Sino-Forest
was a "massive" fraud.
Those allegations have not been proved, and Sino-Forest has filed
a libel lawsuit against Mr. Block. The scandal, which crushed the
company's share value, has prompted investigations by the Ontario
Securities Commission and the RCMP. And it forced the company to
seek protection from its creditors on March 30 under the
Companies' Creditors Arrangements Act (CCAA).
A hearing on the Poyry settlement had been scheduled for April 17,
but Sino-Forest's move into bankruptcy protection put a freeze on
all litigation involving the company.
The plaintiffs' lawyers in the class action are seeking to lift
that temporary stay order to allow them to go ahead with the
settlement as well as key hearings scheduled for later this year
relating to their lawsuit. They also argue that the freeze order
applies only to Sino-Forest itself, and not the other defendants.
The plaintiffs' lawyers also say in their court filing they want
to quash the company's CCAA process, which is designed to allow
for the selloff of its assets to a third party. They call the
restructuring plan "a facade," and demand the company instead be
put into receivership.
A lawyer for the court-appointed monitor, FTI Consulting Canada
Inc., declined comment. A spokesperson for Poyry could not be
reached for comment before deadline.
Lawyers for Sino-Forest, the monitor and the class-action
plaintiffs were scheduled to be back in court for a CCAA hearing
on April 13.
U.S. INSURANCE COMPANIES: Ark. Jurisdiction Battle Intriguing
-------------------------------------------------------------
Michael P. Tremoglie, writing for Legal Newsline, reports that the
dispute over which court has jurisdiction over an Arkansas class
action lawsuit is an intriguing one, according to a Mississippi
law professor, and two appellate decisions might provide some
insight.
A federal judge in Arkansas' western district is tasked with
determining if a plaintiff can circumvent the Class Action
Fairness of Act of 2005 if it asserts that it is seeking less than
the $5 million CAFA threshold while still maintaining the
possibility of demanding and being awarded more than $5 million if
the case is returned to state court.
A class action lawsuit filed Dec. 7 in the state circuit court of
Miller County, Arkansas and subsequently removed Jan. 17 to the
federal district court has become a jurisdictional controversy.
The plaintiffs' lawyers have made a motion to remand the case back
to state court.
The plaintiffs aren't asking for more than $5 million, but the
defendants say any settlement or jury award would exceed that
amount.
Professor Ronald Rychlak, the Associate Dean of Academic Affairs
for the University of Mississippi School of Law, said it is not
unusual for attorneys to structure their pleadings with
jurisdiction in mind. If an attorney does not want to be in
federal court, the attorney will find a reason not to be, he said.
He does find the issue of whether the case should be within the
CAFA guidelines interesting. He said the questions are issues
that should have been legislated.
"This is an interesting case. This strikes me as one of those
legal questions that should have been taken care of when the law
was drafted but perhaps was not," Mr. Rychlak said.
He opined that the method of placing a value for injunctive relief
and whether to count attorneys fees probably should have been
addressed when the law was made.
"This seems to be a case of first impression under this statute. I
guess if I were a judge, I would have a hearing to figure the
value of the requested injunctive relief, and I would put that
towards the $5 million."
The litigation involves an alleged conspiracy by the defendants --
insurance companies -- to pay uninsured and under-insured motorist
claims at a rate less than purportedly deserved. The method to
conduct this alleged conspiracy was a claims-paying software
program called "Colossus."
The case was removed to federal court after the defendants argued
that this was a federal case per the terms of CAFA. Once the case
went to federal court, the defense filed motions to dismiss.
According to court documents, the Travelers Insurance company and
Infinity filed motions to dismiss on Jan. 18; the 21st Century and
Erie filed theirs on Jan. 23; and the Farm Bureau Mutual Group,
ANPAC and Pacific Defendants filed Jan. 24. All the other
defendants have either filed an answer or motions to extend the
time to file an answer.
The plaintiffs filed a motion Jan. 19 to stay responses to these
motions to dismiss. The plaintiffs asked the court to grant a
stay to the response deadline for the defendants' pending
dismissal motions.
Two defendants -- 21st Century and ANPAC -- responded by
requesting the court address the personal jurisdiction arguments
contained in their motions to dismiss. They wanted this ruling
before deciding any future question concerning subject matter
jurisdiction posed by a remand motion.
The court granted the plaintiffs' motion to stay responses to the
multiple defendants' dismissal motions. The plaintiffs' deadline
to respond to any dismissal motion "before the Court addresses
remand is stayed until the Court issues its remand ruling."
CAFA permits, with some narrow exceptions, class actions exceeding
the sum of $5 million to be tried in federal court. If the class
asks for less than $5 million, it can remain in state court.
The defendants want to keep the case in federal court where they
believe they will have an equitable proceeding. They say they
will be unable to defend themselves in state court against a flood
of discovery requests designed to force a settlement because they
will be unable to appeal any of them.
Another legal scholar said that this is an issue that has come up
in a number of circuits. He said one consideration is state
procedural law. If the plaintiff can receive more than $5 million
from a state trial, the federal courts are unlikely to accept that
the plaintiffs are willing to accept only $5 million to have the
case returned there.
Recently a federal court ruled that a plaintiff can make a binding
commitment for an award. Then the question of the wording of the
stipulation becomes an important issue.
"To determine jurisdiction before trial, the court will rely on
the facts as pleaded and discovered," said Michael I. Krauss, a
law professor at George Mason University School of Law, Arlington,
Va.
Nonetheless, plaintiffs have attempted extraordinary measures to
avoid CAFA. The U.S. Court of Appeals for the Sixth District's
decision in the 2008 case of Freeman v. Blue Ridge Paper Products
is an example.
The plaintiffs wanted their litigation remanded to state court.
The appeals court ruled the plaintiffs separated their suit into
five different actions for distinct time periods and limited the
total damages for each to less than CAFA's $5 million threshold.
The appeals court said, "Because no colorable basis for dividing
the claims has been identified by the plaintiffs other than to
avoid the clear purpose of CAFA, remand was not proper."
More recently, a March ruling by the Eighth Circuit in the case of
Hargis v. Access Capital Funding, LLC, et al., denied a remand
motion because the plaintiff did not stipulate her class size was
limited to Missouri residents.
The court said, "The district court correctly denied Hargis's
motion to remand to state court. Hargis argues that her putative
class consists only of Missouri plaintiffs, because she is
alleging a violation of Missouri's statute prohibiting the
unlicensed practice of law.
"When only Missouri plaintiffs are considered, she contends, the
amount in controversy does not reach the $5 million threshold
required by CAFA. Defendants counter that Hargis's original
complaint did not restrict her class to Missouri plaintiffs, and
so consideration of a nationwide class was appropriate. When a
nationwide class of plaintiffs is contemplated, the amount in
controversy exceeds the $5 million mark."
UNION FIRST: Maryland Class Suit vs. Unit Dismissed in 2011
-----------------------------------------------------------
A class action lawsuit filed against a subsidiary of Union First
Market Bankshares Corporation was dismissed in 2011, according to
the Company's March 14, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On September 2, 2009, Union Mortgage Group Inc., a wholly owned
subsidiary of the Company, received notice that it was being sued
in Maryland state court in a class action lawsuit under the
Maryland Secondary Mortgage Loan Law (the "SMLL"). In general,
the lawsuit alleged that Union Mortgage, in connection with making
second mortgage loans to customers, violated the SMLL by charging
certain fees, closing costs and interest in excess of the
limitations established by the SMLL. The case was removed to
federal court and consolidated for certain pre-trial purposes with
approximately 18 other cases brought under the SMLL by the same
attorneys. Union Mortgage was a defendant in only one of these
cases. On April 23, 2010, Union Mortgage filed an answer and a
motion for judgment on the pleadings as to certain issues. In
2011, the lawsuit was dismissed as a result of the parties'
confidential settlement with no material financial impact upon
either UMG or the Company.
USA TRUCK: Paid "Cerdenia" Suit Settlement Amount in November
-------------------------------------------------------------
USA Truck, Inc. disclosed in its March 14, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011, that it paid a $250,000 settlement of a
class action lawsuit in November 2011.
On July 2, 2010, a former driver team member, filed a lawsuit
against the Company titled Hermes Cerdenia v. USA Truck, Inc. in
the Superior Court of the State of California for the County of
San Bernardino, alleging various violations of the California
Labor Code and seeking certification of the lawsuit as a class
action to include "all individuals currently and formerly employed
in California as drivers, or other similarly titled positions."
The Company successfully removed the case to the United States
District Court, Central District of California and filed an answer
denying the plaintiff's allegations. The lawsuit sought monetary
damages for the alleged violations.
In February 2011, the Company negotiated settlement of the lawsuit
through mediation subject to the District Court's review and
approval. Such approval of the $250,000 settlement was received
in October 2011. The Company says it had fully accrued the agreed
upon settlement amount during the second quarter of 2011 and the
amount was paid during November 2011.
VERIZON: Faces Class Action Over False Claims on DSL Speed
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Mark Raby, writing for SlashGear reports that a Santa Monica woman
is suing Verizon because she says the company advertises DSL
speeds that are technically impossible to achieve for many
customers who sign up for the service. She claims that she was
paying $24.99 per month but a salesperson talked her into
upgrading to a faster $34.99 plan. The new plan was allegedly
supposed to deliver online content at a speed of 1.5 Mb per
second.
However, Patricia Allen says that on a good day, the best she
could reach was about half of that. She claims that she called
Verizon to complain but was told she lives too far away from the
nearest service center to get those maximum speeds, so the best
she would ever be able to do would be to get a 768k/second speed.
Outraged, she asked to switch to a slower connection plan and
demanded a refund. Verizon did not offer any compensation.
So she's taking it to the next step. Not only is she suing
Verizon for breach of contract and for violating California's
strict consumer protection laws, but she's opening it up to anyone
who might also be affected. The class-action suit aims for
Verizon to recognize that its DSL service can only deliver maximum
speeds to those who are in the extreme vicinity of a Verizon
service center. All other customers receive a degraded signal. A
Verizon spokesperson was quoted as saying, "We believe the lawsuit
is baseless and without merit."
W. ROSS MACDONALD: Court Set to Decide on Student Abuse Suit
------------------------------------------------------------
Donovan Vincent, writing for Toronto Star, reports that there are
allegations of visually impaired, blind and deaf-blind students
being slapped, kicked, punched, forced to drink from a urinal, and
made to eat their own vomit as punishment for throwing up -- all
at the hands of their teachers and staff.
The accusations are contained in court documents submitted by
former students of W. Ross MacDonald School, a provincially-run
school in Brantford, Ont., who are trying to bring a class-action
suit against the province.
After arguments in Toronto last week, Ontario Superior Court Judge
Carolyn Horkins is now deciding whether to certify the group's
claim as a class action.
It is seeking $200 million in damages for allegations covering the
period from 1951 to the present. As many as 1,000 former students
could be affected, say lawyers for the claimants.
The court documents paint a grim picture of a school where staff,
many of them unqualified to deal with vulnerable, handicapped
children, created an insidious atmosphere of bullying and abuse,
often using the students' disabilities against them.
Punishment included leaving a visually impaired student alone in
the dormitory hallway at night, causing disorientation, the court
documents allege.
"In another example, a teacher during class spun a blind student
around several times, and left him to find his seat. Staff would
also take advantage of disabilities by sneaking up on students
during their private conversations."
There are also allegations of sexual abuse.
The claimants say the province "knew or ought to have known" of
the alleged physical, emotional and sexual abuse of students at
the school, yet took no steps to prevent, halt or eliminate it.
The claim also says the province acted "negligently and in breach
of its fiduciary duties" in operating and managing the facility.
None of the allegations has been proven in court.
For its part Ontario has not filed a statement of defense yet, and
will not be doing so until after the certification motion is
decided. However, its lawyers argued last week, in a highly
technical submission, that because there was no evidence that the
province had put its own interest ahead of the plaintiffs', the
claim should not be allowed to go ahead.
Bob Seed, 66, the lead plaintiff in the class-action bid, claims
the abuse he suffered as a student at W. Ross MacDonald began in
the early 1960s when he was around 14.
Mr. Seed, blind in his left eye due to an unsuccessful cataract
operation when he was two years old, was sent to the school at the
age of seven by his parents because other schools couldn't
accommodate his disability. He became a resident there, like most
of his fellow students, going home only for Christmas, Easter and
the summer break.
In Grade 8, Mr. Seed alleges, he was physically abused by a
teacher who he says conducted classes like a boot camp.
One day Mr. Seed was having problems answering a math question in
class.
"(My teacher) had a habit of sitting on the corner of his desk. He
jumped off his desk and grabbed me by the throat, spat in my face
and shoved me, desk and all, to the back of the classroom, then
came back and punched me," Mr. Seed alleges.
Mr. Seed said he spent more than a week in the school's infirmary
recovering from his injuries.
"It was pretty brutal," Mr. Seed said in an interview from his
home in Thunder Bay, Ont.
Mr. Seed said he also saw a male student being forced by a school
supervisor to drink out of a urinal at the school as punishment.
"I think most (students) lived in fear. You didn't know what was
going to happen next," said Mr. Seed, who would later go on to
work as a broadcaster, including for the CBC, and who now manages
a community-based radio station in Thunder Bay.
The court documents say Seed spoke to the Ministry of Education
about the allegations and that the ministry told him it was aware
of other accusations about the school. But the ministry advised
him too many years had passed for it to take action, the documents
say.
The province, represented at the certification hearing last week
by lawyers William MacLarkey and John Kelly, was arguing, among
other things, that the breach of fiduciary duties allegation
should be set aside.
No facts have been brought forward to establish that the Crown
acted in its own self-interest and against the interests of the
students at the time of the allegations, the province says in its
factum.
"There are no facts pleaded that would establish that the Crown's
interests were promoted by allowing the plaintiff(s) to be
harmed," the factum states.
The lawyers representing the former students are Kirk Baert,
Celeste Poltak and Jonathan Bida of the downtown Toronto firm
Koskie Minsky.
Mr. Baert also led a team that convinced an Ontario Superior Court
judge in 2010 to certify a class-action suit representing former
residents of the Huronia Regional Centre who claimed they were
beaten, sexually abused and subjected to degrading punishment.
In 2007, Mr. Baert won a $4 billion class action on behalf of
aboriginal students of government-sanctioned residential schools.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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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.
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