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C L A S S A C T I O N R E P O R T E R
Thursday, May 3, 2012, Vol. 14, No. 87
Headlines
ANDATEE CHINA: Faces Class Suits Over Going Private Proposal
APPLE INC: Accused of Refusing to Refund "Double Billed" Charges
ARKANSAS SCHOLARSHIP: Faces Class Action Over Ticket Tampering
BIG TOBACCO: Health Minister Mulls Class Action
BRISTOL COUNTY, MA: Prisoners Have Yet to Get Settlement Payment
CANADA: Nova Scotia Continues to Defend Nursing Home Class Suit
CANADA: Awaits Form of Order in Plant Emissions Suit in Sidney
CANADIAN IMPERIAL: Overtime Class Action Can't Proceed
CHATTEM INC: Dexatrim Tainted With Hazardous Chemical, Suit Says
CHINA EDUCATION: Securities Class Claim vs. Director Dismissed
CHRISTMAS TREE: Recalls 6,200 Farm Glass Tea Light Holders
CIGNA CORP: Settles HealthSpring Acquisition-Related Class Suits
CITIBANK: Faces Class Action Over Student Loan Scheme
DAVITA INC: Wage and Hour Suit Still Pending in California
EXPERIAN INFORMATION: Judge Certifies Credit Report Class Action
FERRERO USA: Sets Aside $3MM for Nutella Class Action Settlement
FIRST AMERICAN: Title Insurance Class Action Can proceed
IMAX CORPORATION: Securities Class Suit Still Pending in Canada
IMAX CORPORATION: Awaits Final OK of Consolidated N.Y. Suit Deal
ITT EDUCATIONAL: Securities Class Suit Remains Pending in N.Y.
IU HEALTH: May Face Patient Overbilling Class Action
JINGWEI INTERNATIONAL: Faces Suits Over Going Private Proposal
METRO NASHVILLE, TN: Faces Class Action Over School Rezoning
MOUNTAIN STATE: Students May Opt Out of Class Action
PENN NATIONAL: Sup. Court Refuses to Hear Appeal on Suit Dismissal
PRINCETON REVIEW: Securities Class Suit Dismissed in March
ROCK-TENN CO: Smurfit-Stone Shareholder Suit Deal Okayed in Feb.
SAFEWAY INC: Faces Class Action Over Mislabeled Lucerne Yogurt
SIMPLY THICK: Faces Suit Over Contaminated Food Thickener
TELEFLEX INC: Appeals From Merger-Related Suit Ruling Pending
THR & ASSOCIATES: Employees File Overtime Class Action
TREE.COM INC: Appeal in "Gaines" Class Suit Remains Pending
TREE.COM INC: Judgment Entered in Unit's Favor in "Mortgage" Suit
TREE.COM INC: Parties in "Boschma" Suit Currently in Discovery
TREE.COM INC: Plaintiffs in Remaining Suit Fail to Seek Review
TREE.COM INC: "Schnee" Class Suit Remains Pending in California
TRI-ANIM HEALTH: Faces Employee Suit Over Illegal Chargebacks
TYSON FOODS: Obtains Favorable Ruling in Class Action
ZOO ENTERTAINMENT: Awaits Order on Bid to Dismiss "Ricker" Suit
* Litigator Says Due Diligence Needed in Franchising
*********
ANDATEE CHINA: Faces Class Suits Over Going Private Proposal
------------------------------------------------------------
Andatee China Marine Fuel Services Corporation is facing class
action lawsuits arising from its chief executive officer's going
private proposal, the Company disclosed in its April 16, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2011.
During the fourth quarter of 2011, a number of class action
lawsuits were filed in the Court of Chancery of the State of
Delaware by or on behalf of current shareholders against the
Company and certain of its officers and directors (the "Individual
Defendants") in connection with a contemplated "going private"
proposal by the Company's Chief Executive Officer and majority
shareholder, An Fengbin (the "Proposed Transaction"). These
lawsuits allege, among other things, that the Company and certain
of its officers and directors violated fiduciary duties by failing
to take steps to maximize the value of the Company to its public
shareholders in a change of control transactions. The plaintiffs
seek, among other things, unspecified damages and other relief,
including, without limitation, to enjoin the Individual Defendants
from consummating the Proposed Transaction.
The Company says the matters are in the early stages of their
respective proceedings. The Company anticipates that actions
similar to these actions may be filed in the future.
The Individual Defendants are contesting each of the lawsuits
vigorously, however, are not in a position to predict the outcome
or impact of the lawsuits.
APPLE INC: Accused of Refusing to Refund "Double Billed" Charges
----------------------------------------------------------------
Robert Herskowitz, individually and on behalf of all others
similarly situated v. Apple, Inc., Case No. 5:12-cv-02131 (N.D.
Calif., April 27, 2012) accuses Apple of unlawful policy and
practice of refusing to refund its customers, who have been
overcharged for purchases of products and services from its "e-
Stores" in violation of the customer agreements governing those
transactions, the California Unfair Competition Law, the
California Business & Professional Code and common law.
The Plaintiff alleges that Apple has "double billed" customers,
including him, for purchases made through the Apple Stores. He
contends that Apple has implemented a policy and practice of
refusing to refund the extra charge to customers, who have been
overbilled, causing their credit cards or PayPal accounts to be
billed twice for a single purchase.
Mr. Herskowitz is a resident of New York. He alleges that he was
charged twice for purchasing a single song in December 2010.
Apple is a California corporation based in Cupertino, California.
Apple is a multinational corporation that designs and sells
consumer electronics, computer software, and personal computers.
Apple's hardware products include the Mac personal computer, the
iPhone, the iPad, and the iPod Touch.
The Plaintiff is represented by:
Joseph J. Tabacco, Jr., Esq.
Christopher T. Heffelfinger, Esq.
Anthony D. Phillips, Esq.
BERMAN DEVALERIO
One California Street, Suite 900
San Francisco, CA 94111
Telephone: (415) 433-3200
Facsimile: (415) 433-6382
E-mail: jtabacco@bermandevalerio.com
cheffelfinger@bermandevalerio.com
aphillips@bermandevalerio.com
- and -
Robert J. Axelrod, Esq.
POMERANTZ HAUDEK GROSSMAN & GROSS LLP
100 Park Avenue
New York, NY 10017
Telephone: (212) 661-1100
Facsimile: (212) 661-1373
E-mail: rjaxelrod@pomlaw.com
- and -
Judd B. Grossman, Esq.
GROSSMAN LLP
590 Madison Avenue, Suite 1800
New York, NY 10022
Telephone: (646) 770-7445
Facsimile: (212) 521-4044
E-mail: jgrossman@grossmanllp.com
ARKANSAS SCHOLARSHIP: Faces Class Action Over Ticket Tampering
--------------------------------------------------------------
The Associated Press reports that a man sued the Arkansas lottery
on April 27, claiming that scratch-off game contains a flaw that
workers at a retail store used to identify winning tickets.
The lawsuit was filed by Rick Tomboli, who is seeking class-action
status, because any number of other lottery players could have
been stuck with losing tickets, according to the suit, which was
filed in Pulaski County Circuit Court. Mr. Tomboli is represented
by state Rep. John Walker of Little Rock, a prominent civil rights
lawyer.
The Arkansas Scholarship Lottery issued a statement saying that it
referred the matter to Little Rock police, as tampering with
lottery tickets is a felony.
The lawsuit alleges that Mr. Tomboli bought a $20 Arkansas
Millionaires Club ticket "at the unusual urging of the retailer."
The ticket was a loser, and Mr. Tomboli bought a second ticket,
which was a $20 winner, essentially refunding its face value.
Mr. Tomboli then noticed both tickets "had an unusual small
pinprick on a covered section of the ticket called 'Bonus $50,'"
the suit said. The lawsuit, which doesn't identify the retailer,
claims the workers could tell whether the tickets would pay the
bonus by means of the pinprick. Mr. Tomboli went back in the
store and asked to see the next few tickets in the case, the suit
said, all of which allegedly had similar pinpricks.
After a co-worker contacted the lottery security office for
Mr. Tomboli, Security Director Lance Huey visited with
Mr. Tomboli, the suit says. Mr. Huey acknowledged the tickets had
been tampered with, and gave Mr. Tomboli "a bizarre assortment of
lottery merchandise" that included tote bags, shirts, sunglasses
and hats, according to the suit. Mr. Huey also allegedly told
Mr. Tomboli that someone from the store would contact him to
discuss compensating him.
The suit says Mr. Huey told Mr. Tomboli that the store workers
would be fired and that the game would be pulled because of a
manufacturing flaw. But Mr. Tomboli returned to the store and
found one of the workers still behind the counter and the game
still in the case. Mr. Huey then allegedly told Mr. Tomboli the
lottery would lose money by pulling the game until the tickets
could be reprinted.
The lottery's statement said three workers have been fired from
the business.
"It will be readily apparent to a player if anyone has attempted
to determine the value without fully scratching a ticket. In
fact, the tampering was reported by a player," said the lottery
statement, which didn't address whether the game would be
withdrawn.
Mr. Walker said he doesn't know the extent of any tampering and
declined to say if other ticket buyers had contacted him.
"I don't have the slightest idea how pervasive it was. I do know
that if was anywhere, it had the potential of being everywhere,"
Mr. Walker said. "It wasn't something that was supposed to
happen."
BIG TOBACCO: Health Minister Mulls Class Action
-----------------------------------------------
Michael Owen, writing for The Australian, reports that Health
Minister Tanya Plibersek will seek legal advice on a national
class action lawsuit against Big Tobacco to recover costs imposed
on health budgets by smoking-related diseases.
South Australian Health Minister John Hill on April 30 said he had
proposed joint legal action during a health ministerial council
meeting in Canberra on April 27.
Mr. Hill said all ministers "were pretty interested in doing it
. . . The commonwealth minister undertook to get some legal advice
about the strengths or otherwise of any potential action. We'll
get some advice ourselves locally.
"I think everybody, and all the ministers, were of the view that
if we could do it then it would be a good thing."
The Australian revealed in December that momentum was building
among the states for legal action, after Attorney-General Nicola
Roxon arranged a taxpayer-funded visit to Australia by US anti-
smoking lobbyist Matthew Myers.
Mr. Myers is a lawyer who advised 50 US state attorneys-general in
lawsuits against Big Tobacco for smoking-related healthcare costs
in the late 1990s.
The class action in the US led to the major firms agreeing to the
1997 US Master Settlement Agreement in which tobacco companies
agreed to pay up to $200 billion compensation to states over 30
years.
Mr. Hill said Australia could force tobacco companies to
compensate governments for the health costs tied to smoking.
NSW Health Minister Jillian Skinner said she was among the
ministers who had agreed to investigate the proposal to litigate
against tobacco companies. "The commonwealth minister agreed to
write to the commonwealth attorney-general for advice on this
matter and circulate the response to . . . health ministers,"
Ms. Skinner said. "The NSW government has not sought legal
advice."
Tasmania Health Minister Michelle O'Byrne said, given that
tobacco-related harm costs Australia about $31 billion a year,
governments should continue to find ways to limit smoking and
reduce its impact on the health system. "One way may be to make
tobacco firms accountable for the harm caused by tobacco-related
disease," she said.
A spokesman for Ms. Roxon said the Attorney-General supported
states exploring legal options: "Any decision for the states to
proceed in this area are a matter for individual states."
Mr. Hill said he would seek written legal advice. "We wanted to
get some commonwealth views first . . . if we can do it on a
collective basis then it makes more sense," he said.
British American Tobacco has accused the commonwealth of using
threats of a class action lawsuit by the states to distract
attention from a High Court battle on plain packaging.
BRISTOL COUNTY, MA: Prisoners Have Yet to Get Settlement Payment
----------------------------------------------------------------
Curt Brown, writing for SouthCoastToday.com, reports that
prisoners and their families who paid a $5-a-day fee between 2002
and 2004 at the Bristol County House of Corrections still haven't
received their money more than two years after the state's high
court struck down the practice of collecting it.
The 1,127 current and former prisoners who are entitled to receive
$515,658 were supposed to receive their money "soon after April
17," and now are being told they won't receive it until May.
Jim Pingeon, litigation director for Prisoners' Legal Services of
Boston, said he is so upset with developments that he is
contemplating asking the court to order the money be paid
immediately, along with 5 percent interest.
He said the state Comptroller's Office is processing the returns,
after the Bristol County Sheriff's Department sent it a check for
$515,658 on Aug. 22, following the certification of the class
action group.
Mr. Pingeon said he was told the comptroller's office needed
additional time to make some address changes.
"That's unacceptable," he said. "The clients are understandably
extremely upset with the inexcusable foot-dragging by the
Comptroller's Office."
The state's comptroller, Martin Benison, downplayed criticism and
said the checks should be sent either May 4 or May 7.
He said the settlement wasn't final until April 17 after unpaid
back taxes and unpaid child support were deducted.
"I guess I would not describe it as a delay," he said. "I
understand people have been waiting a long time.
"It doesn't seem like an unreasonable time frame with the final
settlement on April 17 and the money going out May 4," he said.
He said there are more than 100 address changes to be made. "It
all takes a little time."
Mr. Pingeon disagrees with the comptroller's recollection of the
case's timeline.
He said the settlement was made final in January 2011 and the
distribution of the money was sent to the comptroller in August.
He said the checks were supposed to go out after the unpaid child
support was deducted.
The collections started July 1, 2002, and were stopped July 28,
2004, when Superior Court Judge Richard T. Moses ruled them
illegal because the Legislature had not granted county sheriffs
permission to impose them.
The Supreme Judicial Court upheld Judge Moses' decision in January
2010, ruling that the Bristol County Sheriff's Department lacked
authority to charge the fee.
Mr. Pingeon said he opposed delaying the return of all the
prisoners' money for the purposes of deducting unpaid child
support. He said "the vast majority" of prisoners in the class
action suit didn't owe any child support.
"Don't hold up everyone," he said.
Eduarda Pacheco of Fall River said she is waiting for about $1,800
she sent her late son, Robert Pacheco, while he was incarcerated
at the Bristol County House of Correction. She said he died in
2003.
She said she is on disability and needs the money because she is
raising her 16-year-old grandson, who is Robert's son. She also
raised Robert's oldest son, who is now 20.
"I buy my grandchildren what they need," she said. "He needs
clothes. A 16-year-old needs a lot."
CANADA: Nova Scotia Continues to Defend Nursing Home Class Suit
---------------------------------------------------------------
The Province of Nova Scotia, Canada, continues to defend a class
action lawsuit commenced by residents and spouses of residents of
nursing homes, according to Nova Scotia's April 16, 2012, Form 18-
K filing with the U.S. Securities and Exchange Commission for the
year ended March 31, 2011.
Residents and spouses of residents of nursing homes (or their
estates) in the Province have commenced a class action lawsuit
against the Province seeking damages for misfeasance in public
office, fraudulent misrepresentation and deceit, negligent
misrepresentation, breach of fiduciary duty, equitable fraud,
unjust enrichment and various Charter claims resulting from the
introduction of the Single Entry Access System (SEA) between
February 1, 2001, and January 1, 2005, that required payment by
the residents of their health care costs while in a nursing home.
Approximately 100 people have joined in the class action lawsuit
to date. The plaintiffs filed a motion to certify the case as a
class action. The proceeding has been certified, in part, as a
class proceeding. The written decision has been delivered but the
form of the order has not yet been settled. The appeal period
runs from the date the Order is issued by the Court.
The Province says the litigation is ongoing and it will continue
to vigorously defend these claims. The Province is unable to
assess the likelihood of loss at this time.
CANADA: Awaits Form of Order in Plant Emissions Suit in Sidney
--------------------------------------------------------------
A written decision has been delivered but the form of the Order
has not yet been settled in the class action lawsuit commenced by
residents and former residents of Sydney and the surrounding area
in the Province of Nova Scotia, Canada, over harmful emissions,
according to Nova Scotia's April 16, 2012, Form 18-K filing with
the U.S. Securities and Exchange Commission for the year ended
March 31, 2011.
Residents and former residents of Sydney and the surrounding area
in Nova Scotia have commenced a proposed class action lawsuit
against the Province seeking damages for nuisance, battery,
trespass, harm to property and other related claims resulting from
the emissions from the steel plant and coke ovens owned and
operated by the Sydney Steel Corporation, claiming that the
Province failed to remediate the sites, allowing deposits of the
emissions to continue to travel into the class area, and seeking
damages for breach of fiduciary duty to the class members as a
result of making public statements that it was as safe to live in
Sydney as any other urban area. An oral decision was rendered by
the case management judge in July 2011 certifying the action as a
class proceeding with reduced geographic boundaries and a seven
year residence threshold for the residential class. The written
decision has been delivered but the form of the Order has not yet
been settled. The appeal period runs from the date the Order is
issued by the Court.
The Province says it is unable to assess the likelihood of loss or
estimate the amount of ultimate loss at this time.
CANADIAN IMPERIAL: Overtime Class Action Can't Proceed
------------------------------------------------------
Julius Melnitzer, writing for Financial Post, reports that Justice
George Strathy of the Ontario Superior Court has refused to
certify a proposed class action against Canadian Imperial Bank of
Commerce on behalf of a class composed of "analysts", "investment
advisors", and "associate investment advisors."
After ruling that the central issues of eligibility and breach of
contract were not capable of resolution on a common basis, he
concluded that a class action was not the preferable procedure for
resolving the case.
"The insurmountable impediment in this case, and the reason why
the preferable procedure requirement has not been met, is that the
issue of CIBC's liability to pay overtime to every class member is
an individual issue," Justice Strathy wrote. "It will require
individual fact-finding concerning the circumstances of every
class member and the individual application of the relevant legal
principles to those circumstances. A class action would not,
therefore, be a fair, efficient and manageable way of advancing
the claims of class members and it would not promote either access
to justice or judicial economy."
The case, Brown v. Canadian Imperial Bank of Commerce, can be
found at 2012 ONSC 2377.
Kirk Baert of Koskie Minsky was lead counsel for the class.
Patricia Jackson -- tjackson@torys.com -- of Torys led the
defense.
CHATTEM INC: Dexatrim Tainted With Hazardous Chemical, Suit Says
----------------------------------------------------------------
Joanne Arroyo, on behalf of herself and all others similarly
situated v. Chattem, Inc., Case No. 3:12-cv-02129 (N.D. Calif.,
April 27, 2012) asserts that Chattem, the manufacturer, marketer
and distributor of popular weight loss products sold under the
brand name Dexatrim, promoted Dexatrim as a safe and effective
weight loss supplement that "gives you the power to lose weight,
curb binges, and keep you in control of your diet."
Contrary to these representations, the Defendant has knowingly and
actively concealed the material fact that Dexatrim is tainted with
the hazardous chemical hexavalent chromium, which is included on
the Proposition 65 list of "Chemicals Known to the State to Cause
Cancer or Reproductive Toxicity," Ms. Arroyo alleges. She argues
that the Defendant's failure and refusal to disclose the presence
of hexavalent chromium in Dexatrim constitutes concealment of a
material fact that induced her and similarly situated class
members to purchase and ingest Dexatrim.
Ms. Arroyo is a resident of Contra Costa County, California. In
February 2011, she purchased Dexatrim Max as a weight loss
supplement from a CVS pharmacy located in Concord, California.
Chattem, a wholly owned subsidiary of Sanofi-Aventis, is a
Tennessee corporation with its headquarters located in
Chattanooga, Tennessee. Chattem is the marketer, distributor, and
seller of Dexatrim. Chattem also produces a number of brand
names, over the counter healthcare products, toiletries and
dietary supplements.
The Plaintiff is represented by:
Benjamin M. Lopatin, Esq.
THE LAW OFFICES OF HOWARD W. RUBINSTEIN, P.A.
One Embarcadero Center, Suite 500
San Francisco, CA 94111
Telephone: (800) 436-6437
Facsimile: (415) 692-6607
E-mail: lopatin@hwrlawoffice.com
- and -
Michael R. Reese, Esq.
REESE RICHMAN LLP
875 6th Ave., 18th Floor
New York, NY 10001
Telephone: (212) 579-4625
Facsimile: (212) 253-4272
E-mail: michael@reeserichman.com
CHINA EDUCATION: Securities Class Claim vs. Director Dismissed
--------------------------------------------------------------
A class claim against Liansheng Zhang, a director of China
Education Alliance, Inc., was dismissed, but motions to dismiss
the claims against another current and a former director of the
Company were denied, the Company disclosed in its April 16, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2011.
The Company is presently involved in two putative class action
lawsuits filed in the U.S. District Court for the Central District
of California. The first action, Apicella v. China Education
Alliance, Inc., et al., No. 10-cv-09239 (CAS)(JCx), was filed on
December 2, 2010; the second action, Clemens v. China Education
Alliance, Inc., et al., No. 10-cv-09987 (JFW) (AGRx), was filed on
December 28, 2010. On March 2, 2011, both actions were
consolidated in In re China Education Alliance, Inc. Securities
Litigation, No. 10-cv-09239 (CAS) (JCx) (C.D. Cal.). The
Consolidated Amended Complaint alleged that the Company, Xiqun Yu,
Zibing Pan, Susan Liu, Chunqing Wang, James Hsu, Liansheng Zhang,
and Yizhao Zhang are liable under Section 10(b) of the Securities
Exchange Act of 1934 and SEC Rule 10b-5 for allegedly false and
misleading statements and omissions in the Company's public
filings between 2008 and 2010 and in an investor conference call
in December 2010. The Consolidated Amended Complaint also
asserted claims under Section 20(a) of the Securities Exchange Act
of 1934 against the individual defendants as persons who allegedly
controlled the Company during the time the allegedly false and
misleading statements and omissions were made. The Court denied
the company's motion to dismiss the Consolidated Amended Complaint
on October 11, 2011, and granted (with leave to replead) James
Hsu's motion to dismiss the Consolidated Amended Complaint on
November 14, 2011.
On December 5, 2011, the plaintiffs in the class action filed a
Consolidated Second Amended Complaint alleging claims under
Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule
10b-5 against the Company, Xiqun Yu, Zibing Pan, Susan Liu, and
Chunqing Wang, and alleging claims under Section 20(a) of the
Securities Exchange Act of 1934 against Xiqun Yu, Zibing Pan,
Susan Liu, Chunqing Wang, James Hsu, Liansheng Zhang, and Yizhao
Zhang. The Company answered the Consolidated Second Amended
Complaint on January 5, 2012.
On April 6, 2012, the court dismissed the claim against Liansheng
Zhang but denied motions to dismiss the claims against James Hsu
and Yizhao Zhang, the only other defendants served so far.
CHRISTMAS TREE: Recalls 6,200 Farm Glass Tea Light Holders
----------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
importer, Nantucket Distributing Co., Inc. of Middleboro,
Massachusetts, and retailer, Christmas Tree Shops of Union, New
Jersey, announced a voluntary recall of about 6,200 units of Farm
Glass & Metal Spiral Tea Light Holder. Consumers should stop
using recalled products immediately unless otherwise instructed.
It is illegal to resell or attempt to resell a recalled consumer
product.
Due to the design of the product, the tea lights can burn with a
high flame, posing a fire hazard to consumers.
Christmas Tree Shops has received one report of a tea light
burning with a high flame that resulted in a burn to a consumer's
hand.
This recall involves a decorative spiral tea light holder made
from a painted glass with a red, orange, and green floral design.
The glass has a metal insert for holding tea lights. The metal
insert is spiral shaped with places for three tea lights. The
metal insert is placed within the glass container. SKU/UPC number
000015931955 is found on a label on the bottom of the glass. A
picture of the recalled products is available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12164.html
The recalled products were manufactured in China and sold at
Christmas Tree Shops in the Northeast, Mid-Atlantic and Midwest
from July 2011 through March 2012 for about $5.
Consumers should stop using the recalled spiral tea light holder
and return it to any Christmas Tree Shops store to receive a full
refund. For additional information, contact Christmas Tree Shops
toll-free at (888) 287-3232 any time, or visit the firm's Web site
http://www.christmastreeshops.com/
CIGNA CORP: Settles HealthSpring Acquisition-Related Class Suits
----------------------------------------------------------------
Cigna Corporation settled six putative class action lawsuits
arising from its acquisition of HealthSpring, Inc., according to
Cigna's April 16, 2012, Form 8-K/A filing with the U.S. Securities
and Exchange Commission.
On January 31, 2012, HealthSpring, Inc. completed the merger
contemplated by the Agreement and Plan of Merger, dated as of
October 24, 2011, among HealthSpring, Cigna Corporation, a
Delaware corporation ("Cigna"), and Cigna Magnolia Corp., a
Delaware corporation and an indirect, wholly owned subsidiary of
Cigna ("Merger Sub"). Pursuant to the Merger Agreement,
HealthSpring was acquired by Cigna through a merger of Merger Sub
with and into HealthSpring (the "Merger"), with HealthSpring
surviving the Merger as an indirect, wholly owned subsidiary of
Cigna.
Shortly after the announcement of the Merger, a total of six
putative class action lawsuits challenging the Merger were filed
in the Chancery Court for Williamson County, Tennessee, and the
Delaware Court of Chancery against HealthSpring, Cigna, and the
individual members of HealthSpring's board of directors
(collectively, the "Actions"). On December 8, 2011, the parties
to the Actions reached an agreement in principle to settle the
Actions, which was memorialized in a memorandum of understanding.
HealthSpring says that it is anticipated that a stipulation of
settlement will be submitted for approval which will dismiss the
Actions with prejudice on the merits. The stipulation is subject
to certain confirmatory diligence, class certification and final
approval from the Tennessee state court following notice to
HealthSpring's former stockholders. In connection with the
settlement, HealthSpring has agreed to pay an award of fees and
expenses to plaintiffs' counsel of $935,000. Without admitting
the validity of any allegations made in the lawsuits, or any
liability with respect thereto, HealthSpring and Cigna have
elected to settle the Actions in order to avoid the cost,
disruption and distraction of further litigation.
CITIBANK: Faces Class Action Over Student Loan Scheme
-----------------------------------------------------
Adam Klasfeld at Courthouse News Service reports that Citibank,
Discover Bank and The Student Loan Corporation are tricking former
students into believing that their monthly payments have been cut
when in fact only the payment toward principal has been lowered,
generating greater interest income for the banks over the longer
life of the loan, according to a federal class action.
Lead plaintiff Justin Kuehn, who is paying off four student loans,
claims the defendants "are engaged in a scheme to collect
additional interest at the expense of borrowers of student loans."
Mr. Kuehn claims the defendants are systematically breaching
contracts and violating general business law.
"Defendants are engaged in a scheme to collect additional interest
at the expense of borrowers of student loans," the complaint
states. "Defendants are deceiving borrowers into believing that
their monthly payments have been reduced because of an interest
rate reduction, when in fact, the vast majority of the payment
reduction is attributable to a reduction in the amount of
principal being repaid each month. The end result is an extension
of the loans' repayment term causing thousands of dollars in
additional interest to be paid by student loan borrowers over the
life of their loans."
Mr. Kuehn says he consolidated two CitiAssist Graduate loans and
two Sallie Mae Grad Excel Unsubsidized loans through the Student
Loan Corporation in late 2007.
Part of the consolidated loan program called for Mr. Kuehn to have
payments debited from his account every month, he says.
In 2008-08, Mr. Kuehn says he made extra payments of $25,000
toward the principal of his loans. He says his monthly auto-debit
payments remained the same: $845.72, until he got a notice that
Citibank sold his consolidated loan to Discover in late 2011.
Early this year, the Student Loan Corporation sent him a letter
stating that it dropped his payments to $539.27, falsely claiming
that the change reflected his new interest rates, he says.
"The interest rate misrepresentation is false, deceptive, and
misleading because it masks from borrowers the true reason for the
drop in the monthly payment amount -- a massive decline in the
amount of the loan's principal being repaid each month," the
complaint states.
"In January 2012, the interest rate for the Consolidated Private
Student Loan was only reduced 0.5 percent, from 9.55 percent to
9.05 percent. According to plaintiff's January 2012 statement
from SLC, the total current balance of the Consolidated Private
Student Loan at that time was $64,791.19. The 'new interest rate'
does not account for plaintiff's monthly payment decline of over
$300 per month.
"As a result of the reduction to the monthly payment, the amount
of principal being repaid on the Consolidated Private Student Loan
declined from $335.67 in December 2011 to $42.59 in January 2012,
namely, a decline of $293.08 per month, while the amount of
interest paid remained basically the same, declining only from
$510.05 in December 2011 to $496.68 in January 2012. This fact
was not disclosed by defendants.
"On January 4, 2012, plaintiff made two calls to SLC customer
service to inquire why his monthly payment declined over $300 from
December 2011 to January 2012. On both calls plaintiff had to
navigate through a lengthy automated process to get to a customer
service representative. The difficulty in contacting a customer
service representative at SLC is exemplified by the fact that the
first automated list of options does not include the choice of
speaking to a live representative.
"On both of the calls, plaintiff received varying and inconsistent
answers as to why his monthly payment declined from December 2011
to January 2012 so dramatically, and the representative refused to
return plaintiff's monthly payment to the original amount."
Mr. Kuehn seeks treble damages for breach of contract and business
law violations, and an injunction.
The Plaintiff is represented by:
I. Stephen Rabin, Esq.
RABIN & PECKEL LLP
275 Madison Avenue, Suite 420
New York, NY 10016
Telephone: (212) 880-3722
E-mail: SRabin@RabinPeckel.com
DAVITA INC: Wage and Hour Suit Still Pending in California
----------------------------------------------------------
Davita Inc. continues to defend itself from a class action lawsuit
filed in California, according to the Company's February 24, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2011.
A wage and hour claim, which has been styled as a class action, is
pending against the Company in the Superior Court of California.
The Company was served with the complaint in this lawsuit in April
2008, and it has been amended since that time. The lawsuit, as
amended, alleges that the Company failed to provide meal periods,
failed to pay compensation in lieu of providing rest or meal
periods, failed to pay overtime, and failed to comply with certain
other California Labor Code requirements. In September 2011, the
court denied the plaintiffs' motion for class certification.
Plaintiffs have appealed that decision. The Company intends to
continue to vigorously defend against these claims. Any potential
settlement of these claims is not anticipated to be material to
the Company's condensed consolidated financial statements.
EXPERIAN INFORMATION: Judge Certifies Credit Report Class Action
----------------------------------------------------------------
Courthouse News Service reports that a federal judge on April 27
certified a class action accusing Experian Information Solutions
of furnishing credit reports to Finex Group in alleged violation
of the Fair Credit Reporting Act.
A copy of the Order Granting Plaintiffs' Motion for Class
Certification in Holman, et al. v. Experian Information Solutions,
Inc., Case No. 11-cv-00180 (N.D. Calif.), is available at:
http://www.courthousenews.com/2012/04/30/experian.pdf
FERRERO USA: Sets Aside $3MM for Nutella Class Action Settlement
----------------------------------------------------------------
Michel Rose, writing for Reuters, reports that Italian
confectionery group Ferrero has agreed to set aside $3 million to
settle a class-action lawsuit championed by a Californian mother
after she discovered the group's Nutella chocolate spread packed
more calories than jam or syrup.
Notices of class action settlements said that Ferrero USA Inc.,
the group's U.S. division, would pay up to $4 for every jar of
Nutella bought in California since August 2009, or bought anywhere
else in the United States since January 2008.
The notices posted on nutellaclassactionsettlement.com said the
settlement was for $3,050,000 in total.
Ferrero USA also agreed to "modify certain marketing statements
about Nutella" and to give more prominence to nutrition labels on
Nutella jars, the notices said.
"Ferrero USA continues to stand by its product," a spokeswoman for
Ferrero said on April 29. "We believe that it is in the best
interest of the company to resolve these matters, and have reached
an agreement with the parties involved."
Athena Hohenberg, the mother of a 4-year old in San Diego,
California, launched the class-action lawsuit last year, alleging
that Ferrero was promoting Nutella as something "healthier than it
actually is," court documents said.
Ferrero lists sugar, palm oil, hazelnuts, cocoa and skimmed milk
as Nutella's main ingredients. The typical serving size of 2
tablespoons contains 200 calories and 11 grams of fat, it says on
its Web site.
It markets the dark, creamy paste worldwide as "an example of a
tasty yet balanced breakfast" when combined with milk, orange
juice and wholewheat bread.
"Ms. Hohenberg was surprised and upset to learn that Nutella was
in fact not a 'healthy, nutritious' food but instead a product
with the nutritional properties of a candy bar," the lawsuit said.
It is not the first time the spread, popular with children and
young adults all over Europe, is criticized for exaggerating its
health benefits.
In 2008, the British industry watchdog said a television
commercial for Nutella had broken advertising rules because it
overstated the role Nutella can play in a child's balanced diet.
Two years ago, Italy complained to the European Union over the
impact of stricter food labelling on confectionary products, with
Ferrero executives leading the charge against Brussels.
Ferrero is one of Italy's richest and most successful family-owned
companies, but also one of its more secretive. It had pre-tax
earnings of EUR856 million ($1.14 billion) on sales of EUR7.2
billion for the year to end-August 2011.
Nutella was invented in 1944 by Pietro Ferrero in a patisserie in
Alba, near Turin. The company, which also makes Kinder chocolates
and Tic Tac sweets, has remained in family hands since his death
in 1949.
FIRST AMERICAN: Title Insurance Class Action Can proceed
--------------------------------------------------------
The Molleur Law Office, Bailey & Glasser, LLP, and Bonnett,
Fairbourn, Friedman & Balint, P.C. on April 30 released a
statement regarding the First American Title Insurance Company
class action lawsuit.
U.S. District Court Judge George Singal has allowed a lawsuit
brought by Maine consumers against First American Title Insurance
Company to proceed as a class action, and has authorized notice to
potential class members. The lawsuit alleges that First American
improperly failed to apply a discounted rate for lender's title
insurance issued to some residents of Maine when they refinanced
their residential mortgages.
The class includes anyone who paid a premium to First American or
its agents for the purchase of lender's title insurance in
connection with a refinance loan on residential property in Maine
between September 17, 2002 and now, where: (1) the prior mortgage
was issued within two years of the refinancing; (2) the prior
mortgage was insured by a title insurance policy; and (3) the
borrower was charged more than the discounted refinance rate.
First American denies the claims and allegations in the lawsuit
and denies that it did anything wrong. The Court has not decided
whether First American did anything wrong. There is no money
available now and no guarantee there will be.
More information about the case and the class can be obtained at
http://www.MEtitleCase.com
The Web site also contains commonly-asked questions and answers
and other important information, including a chart to help
consumers determine whether they were entitled to a discounted
rate. Individuals can also contact Class Counsel at 1-800-847-9094
ext. 5996 to make this determination. Anyone who did not receive
a notice and believes that they may be a class member should
consult the Web site or contact Class Counsel.
Class members who wish to remain in the litigation do not need to
do anything right now. Consumers who wish to keep their
individual right to sue First American about these claims must
exclude themselves by filling out the exclusion request on the
Web site, or sending a written request postmarked by June 27,
2012, to Maine Class Action, PO Box 2731, Faribault, MN 55021-
9731, that states that he or she wants to be excluded from
Campbell v. First American Title Insurance Company, and includes a
name, address, telephone number, and signature.
IMAX CORPORATION: Securities Class Suit Still Pending in Canada
---------------------------------------------------------------
A class action lawsuit filed by investors against IMAX Corporation
alleging violations of Canadian securities laws remains pending,
according to the Company's Feb. 24, 2012, Form 10-K filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2011.
A class action lawsuit was filed on September 20, 2006, in the
Ontario Superior Court of Justice against the Company and certain
of its officers and directors, alleging violations of Canadian
securities laws. This lawsuit was brought on behalf of
shareholders who acquired the Company's securities between
February 17, 2006 and August 9, 2006. The lawsuit is in an early
procedural stage and seeks unspecified compensatory and punitive
damages, as well as costs and expenses. As a result, the Company
is unable to estimate a potential loss exposure at this time. For
reasons released December 14, 2009, the Court granted leave to the
Plaintiffs to amend their statement of claim to plead certain
claims pursuant to the Securities Act (Ontario) against the
Company and certain individuals and granted certification of the
action as a class proceeding. These are procedural decisions, and
do not contain any conclusions binding on a judge at trial as to
the factual or legal merits of the claim. Leave to appeal those
decisions was denied. The Company believes the allegations made
against it in the statement of claim are meritless and will
vigorously defend the matter, although no assurance can be given
with respect to the ultimate outcome of such proceedings. The
Company's directors and officers insurance policy provides for
reimbursement of costs and expenses incurred in connection with
this lawsuit as well as potential damages awarded, if any, subject
to certain policy limits, exclusions and deductibles.
IMAX CORPORATION: Awaits Final OK of Consolidated N.Y. Suit Deal
----------------------------------------------------------------
IMAX Corporation is awaiting final approval of a settlement
resolving a consolidated amended class action complaint in New
York, according to the Company's February 24, 2012, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011.
The Company and certain of its officers and directors were named
as defendants in eight purported class action lawsuits filed
between August 11, 2006 and September 18, 2006, alleging
violations of U.S. federal securities laws. These eight actions
were filed in the U.S. District Court for the Southern District of
New York. On January 18, 2007, the Court consolidated all eight
class action lawsuits and appointed Westchester Capital
Management, Inc. as the lead plaintiff and Abbey Spanier Rodd &
Abrams, LLP as lead plaintiff's counsel. On October 2, 2007,
plaintiffs filed a consolidated amended class action complaint.
The amended complaint, brought on behalf of shareholders who
purchased the Company's common stock on the NASDAQ between
February 27, 2003 and July 20, 2007, alleges primarily that the
defendants engaged in securities fraud by disseminating materially
false and misleading statements during the class period regarding
the Company's revenue recognition of theater system installations,
and failing to disclose material information concerning the
Company's revenue recognition practices. The amended complaint
also added PricewaterhouseCoopers LLP, the Company's auditors, as
a defendant. On April 14, 2011, the Court issued an order
appointing The Merger Fund as the lead plantiff and Abbey Spanier
Rodd & Abrams, LLP as lead plantiff's counsel. On November 2,
2011, the parties entered into a memorandum of understanding
containing the terms and conditions of a settlement of this
action. On January 26, 2012, the parties executed and filed with
the Court a formal stipulation of settlement and proposed form of
notice to the class, which the Court preliminarily approved on
February 1, 2012. Under the terms of the settlement, members of
the U.S. Class who do not opt out of the settlement will release
defendants from liability for all claims that were alleged in this
action or could have been alleged in this action or any other
proceeding (including the Canadian Action) relating to the
purchase of IMAX securities on the NASDAQ from February 27, 2003
and July 20, 2007 or the subject matter and facts relating to this
action. As part of the settlement and in exchange for the release,
defendants will pay $12.0 million to a settlement fund which
amount will be funded by the carriers of the Company's directors
and officers insurance policy and by PricewaterhouseCoopers LLP.
The settlement is subject to court approval and the Court has not
yet scheduled a date for a hearing to determine whether the
settlement should be granted final approval.
ITT EDUCATIONAL: Securities Class Suit Remains Pending in N.Y.
--------------------------------------------------------------
On November 3, 2010, a complaint in a securities class action
lawsuit was filed against ITT Educational Services, Inc., and two
of its current executive officers in the United States District
Court for the Southern District of New York under the following
caption: Operating Engineers Construction Industry and
Miscellaneous Pension Fund, Individually and On Behalf of All
Others Similarly Situated v. ITT Educational Services, Inc., et
al. (the "Securities Litigation"). On January 21, 2011, the court
named the Wyoming Retirement System as the lead plaintiff in the
Securities Litigation. On April 1, 2011, an amended complaint was
filed in the Securities Litigation under the following caption: In
re ITT Educational Services, Inc. Securities and Shareholder
Derivative Litigation. The amended complaint alleges, among other
things, that:
* the defendants violated Section 10(b) and 20(a) of the
Exchange Act and Rule 10b-5 promulgated thereunder by
creating and implementing a systemically predatory business
model that operated as a fraud or deceit on purchasers of
the Company's common stock during the class period by
misrepresenting its financials and future business
prospects;
* the defendants' misrepresentations and material omissions
caused the Company's common stock to trade at artificially
inflated prices throughout the class period; and
* the market's expectations were ultimately corrected on
August 13, 2010, when the ED published the loan repayment
rate of the Company's students under a formula contained in
proposed regulations published by the ED on July 26, 2010.
The putative class period in this action is from October 23, 2008,
through August 13, 2010. The plaintiff seeks, among other things,
the designation of this action as a class action, and an award of
unspecified compensatory damages, interest, costs, expenses,
attorneys' fees and expert fees. All of the defendants intend to
defend themselves vigorously against the allegations made in the
complaint.
The officers named in one or more of the securities class action
and shareholder derivative lawsuits include: Jeffrey R. Cooper,
Clark D. Elwood, Nina F. Esbin, Eugene W. Feichtner, Daniel M.
Fitzpatrick, Kevin M. Modany and Martin Van Buren.
The Company says certain of the Company's officers and Directors
are or may become a party in certain of the actions. The
Company's By-laws and Restated Certificate of Incorporation
obligate the Company to indemnify its officers and Directors to
the fullest extent permitted by Delaware law, provided that their
conduct complied with certain requirements. The Company is
obligated to advance defense costs to its officers and Directors,
subject to the individual's obligation to repay such amount if it
is ultimately determined that the individual was not entitled to
indemnification. In addition, the Company's indemnity obligation
can, under certain circumstances, include indemnifiable judgments,
penalties, fines and amounts paid in settlement in connection with
those actions.
No further updates were reported in the Company's February 24,
2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
IU HEALTH: May Face Patient Overbilling Class Action
----------------------------------------------------
The Associated Press reports that Indiana's hospital boards and
trial lawyers are closely monitoring a lawsuit that accuses the
state's largest hospital group of charging uninsured patients more
for treatment than insured patients.
The case, set for May 10 arguments before the Indiana Supreme
Court, involves a 2010 lawsuit by two uninsured patients who
accuse IU Health of overbilling them. Although their breach-of-
contract claims in the case amount to just a few thousand dollars,
the legal stakes are high.
Indianapolis trial lawyer Scott Weathers -- scott@sawlaw.net --
tells The Indianapolis Star that a favorable ruling for his two
clients could allow patients to sue over billings as far back as
10 years.
"If we win, I'm afraid the other hospitals are going to hear from
us. We have clients in the wings," he said, who are ready to sue.
Mr. Weathers wants to turn his clients' lawsuit into a class
action, open to hundreds of uninsured patients who might have been
overbilled by the health system over the past decade. He also
hopes to target other Indiana hospitals with similar lawsuits
seeking damage claims in the millions of dollars.
The Indiana Hospital Association, which has filed a friend-of-the-
court brief with the Supreme Court in support of IU Health's legal
position, views the case as "a pretty concerning situation" for
hospitals, considering the trial lawyers' intentions, said the
group's president, Doug Leonard.
It's the first time the Indiana Supreme Court will wrestle with
the legalities of a hospital charging uninsured patients more than
insured ones, according to attorneys involved. And the court's
consideration of the issue comes even after a new federal law
requires hospitals to give discounts to uninsured patients similar
to those given to insured ones.
That law led IU Health to offer uninsured patients a 40 percent
discount off its full-price "chargemaster" rates in January of
last year, said Lauren Cislak, an IU Health spokeswoman. She said
IU Health's discount applies to uninsured patients regardless of
income and is based on the best rates it charges its commercial
insured customers or Medicare.
But the new federal guidelines don't bar patients from suing over
past billing practices.
At the heart of the IU Health case are 120 years of state common
law holding that, if a contract for a service doesn't specifically
set a price or fee, the bill must be "reasonable," one definition
of which is the price charged most other customers.
Plaintiffs Abby Allen and Walter Moore feel that's where they were
wronged by IU Health North Hospital in Carmel.
Ms. Allen, a college student from Avon, says she was billed
$15,641.64 to treat an infection in 2008. The lawsuit alleges
that an insured patient would have been charged $7,308.78 for the
same procedure, given the discounts IU Health had negotiated with
insurance companies.
Meanwhile, Mr. Moore, a Carmel police trainee, says he was charged
$1,138 in 2009 for treatment of injuries after an auto accident.
He was uninsured and claims the hospital would have accepted
"significantly less" if he'd been insured.
Both patients claim their bills were submitted to a collection
agency, which damaged their credit ratings.
Their lawsuit was filed in Marion County Superior Court, which
sided with IU Health and dismissed it. But the state Court of
Appeals last fall said the complaint has merit and should be tried
in the county court. Then, IU Health appealed to the Supreme
Court.
IU Health's attorneys have argued to the appeals court that
hospital billing disputes don't belong in the courts, saying "the
anomalies which exist in the American system of providing health
care" mean that a court "could not possibly determine what a
'reasonable charge' for hospital services would be."
Mr. Weathers said the new federal regulations don't negate a
hospital's responsibility "to right what was wrong" with past
billing methods.
JINGWEI INTERNATIONAL: Faces Suits Over Going Private Proposal
--------------------------------------------------------------
Jingwei International Limited is facing two putative class action
lawsuits arising from a going private proposal, according to the
Company's April 16, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On January 6, 2012, the Company announced the receipt of a letter
from Mr. George (Jianguo) Du ("Mr. Du"), Chairman and CEO of the
Company regarding a proposed transaction by which the Company
would voluntarily de-list from the NASDAQ Global Market and
suspend its reporting obligations under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), by means of effecting a
reverse split of its outstanding common shares. On February 16,
2012, the Company announced its intent to accept the proposal
proposed following the recommendation of a special committee of
the Company's board of directors, comprised of independent
directors, and the approval of its board of directors.
Accordingly, the Company has submitted notification to NASDAQ
Stock Market LLC regarding its plan to voluntarily delist its
common shares from the NASDAQ Global Market effective March 30,
2012, and cease the registration of the Company's common shares
with the SEC under the Securities Exchange Act of 1934. Upon the
filing of this Annual Report on Form 10-K, the Company intends to
file a Form 15 with the SEC to suspend its obligations to continue
reporting under the 1934 Act.
In March 2012, two putative class actions were filed in District
Court for Clark County, Nevada, against the Company and a number
of the Company's directors and current and former executive
officers on behalf of all owners of the Company's common shares
(other than the defendants), seeking injunctive and other relief
with regard to the Going Private proposal made by Mr. Du. The
cases are in preliminary stages; hence, the Company is unable to
predict the outcome of these actions or whether the Company will
incur any liability associated with the actions or estimates the
effect such outcome would have on the Consolidate Financial
Statements. The Company denies liability and intends to
vigorously defend itself.
METRO NASHVILLE, TN: Faces Class Action Over School Rezoning
------------------------------------------------------------
Julie Hubbard, writing for The Tennessean, reports that the trial
to decide whether Metro Nashville's 2009 school redistricting plan
catered to white families and rezoned black students out of
affluent, higher-achieving schools could set a national precedent.
Families have sued school districts from Tuscon, Ariz., to
Louisville, Ky., in recent years over school assignment and
seeking equal resources, but there hasn't been a clear remedy to
solve complaints.
Spurlock v. Fox was set to begin May 1 in Nashville. The judge on
April 30 certified the case a class-action lawsuit, meaning it now
represents as plaintiffs all black North Nashville families
affected by the rezoning.
Nationally, some are waiting to see if the case provides a remedy
if the plaintiffs prevail, said Gary Orfield, a University of
California-Los Angeles professor and co-founder of civil rights
groups at UCLA and Harvard.
"People will certainly be interested in watching what the court
does in Nashville," said Mr. Orfield, who has studied racial
balance in schools for decades. "Race, education and equality
haven't been solved. . . . There isn't an easy answer on this."
But federal Judge Kevin Sharp also could find that the school
district has made efforts to ensure equity among its black and
white students -- difficult, officials contend, given that housing
patterns in Nashville are often segregated and hard to change.
They point out that families have more choice in where their
children attend than ever before.
Over the next two weeks, the Nashville mayor, director of schools
and chamber of commerce leaders, plus national experts versed on
race and rezoning, will testify in the U.S. District Court of
Middle Tennessee.
The case stems from Frances Spurlock, a retired phone operator,
and her husband, Jeff, a school custodian, who live in
predominantly black North Nashville. They filed against former
Metro school board Chairman David Fox, who is no longer on the
board.
Under a rezoning plan that affected 1,200 students in the then-
75,000-student district, the Spurlocks' daughter was moved out of
Bellevue Middle School in West Nashville, 14 miles away from their
home, to John Early Middle School in their neighborhood.
"We tried it. She went for two weeks," Ms. Spurlock said, sitting
in the modest white house where she grew up. "We had no books,
and teachers were not as qualified."
Frances Spurlock said her mother placed her in St. Vincent's
Catholic School for the same reason 30 years earlier, and, she
argues, the cycle needs to be broken. It led Ms. Spurlock to file
a complaint with the NAACP and then eventually file the lawsuit,
which also includes another plaintiff, grandmother Carroll Lewis.
Their attorney, Larry Woods, claims the intentional segregation
was in the Hillwood, Hillsboro and Pearl-Cohn clusters -- groups
of feeder schools that lead to those high schools.
"Rezoning . . . failed to provide adequate, much less equal,
school opportunities to the children whose lives they disrupted by
concentrating them in clusters of very high poverty," Mr. Woods
said. "Those schools have experienced consistent academic
decline, and the defendant school officials want to talk about
everything except the academic decline."
The plaintiffs are asking to redraw the existing 12 high school
cluster zones into four larger zones, as well as to diversify
existing charter schools and bar the startup of charter schools
that are racially isolated.
The plaintiffs' new "megaclusters" would be: Pearl-Cohn, Hillwood
and Hillsboro; Glencliff, Antioch, Overton and Cane Ridge;
Stratford and McGavock; and Maplewood, Hunters Lane and Whites
Creek.
Students would be assigned based on income and other factors. A
2007 U.S. Supreme Court ruling barred school districts from solely
using race to determine school admissions.
The district's tally for the case a year ago was $200,000. No
updated figures were available last week.
Defense witnesses include Leonard Stevens, former special
assistant to the chancellor of New York City Public Schools. He
testified in a Jacksonville, Fla., desegregation case and has done
population profiles for the Los Angeles Unified School District
and studied Metro's zoning.
The district also hired Milan Mueller, president of the consulting
firm Omega Group, who will testify that the district's student
assignment plan did not segregate students based on race but
instead has provided students a range of school choices.
"I think obviously we take it seriously. We are very confident
that what we did applies with the law, is very fair and very
equitable," said Saul Solomon, the Metro school district's
director of legal services. "We understand they have a right to
challenge, and we look forward to proving our case in court."
The Metro school district is about 46 percent black, 33 percent
white and 17 percent Latino.
Before the redistricting plan, 80 percent of students in the
Pearl-Cohn cluster were black. Last year, 81 percent were black.
The district launched an entertainment magnet at Pearl-Cohn with
the help of a $6 million federal grant specifically to diversify
the school over time.
The Hillwood cluster remained 26 percent black before and after
rezoning, school officials said in court documents.
Federal courts began ending longtime monitoring of desegregation
efforts in the 1990s, and schools became racially imbalanced once
again, Mr. Orfield said.
Louisville is reworking its plan to balance its schools by income.
Voters in Wake County, N.C., replaced the school board after
members abandoned a plan to zone students by income.
Tucson was placed back under its 1970s desegregation order
recently after a court found it stopped providing the Mexican-
American studies program the order demanded.
MOUNTAIN STATE: Students May Opt Out of Class Action
----------------------------------------------------
Andrea Lannom, writing for The State Journal, reports that a
Beckley attorney said his office has handled lawsuits for nearly
50 Mountain State University students following accreditation
issues with the traditional nursing and LPN to BSN cohort
programs.
About 13 lawsuits were filed by students who participated in the
traditional nursing BSN program, and others were filed by about 35
students who had already obtained LPN degrees and were
participating in various satellite campuses throughout the state
in MSU's cohort program.
Beckley attorney Stephen P. New said his clients do not plan to
pursue class certification, however. He said even if other
students get class action certified, he anticipates his clients
will opt out of a class action.
"We're just in the process of arriving at the truth. We look
forward to our trial," Mr. New said, noting traditional nursing
students' trials are slated for February 2013.
Three of Mr. New's most recent lawsuits were filed in early April
by four students enrolled in the LPN to BSN cohort program.
Amber Whitener and Stacie Scott, both of Beckley, and Sonia Godbey
and Joseph Godbey, both of Alderson, filed their lawsuits April 5
in Kanawha County Circuit Court against Mountain State University,
its board of trustees and its former president, Charles H. Polk.
Ms. Whitener and Ms. Scott enrolled in the program in August 2010
and were scheduled to graduate in May 2013 with an LPN to BSN
degree. Meanwhile, the Godbeys enrolled in 2009 and were
scheduled to graduate early this year.
All three suits mentioned series of letters sent to the university
informing officials of problems with accreditation. A July 2008
letter sent to the university from the National League for Nursing
Accrediting Commission said the commission voted to place the LPN
to BSN program on warning and scheduled an evaluation for 2010,
according to the suits.
In the 2010 visit, NLNAC evaluators noted there was not a
successful mechanism for faculty to participate, the nurse
administrator did not have adequate time or resources to perform
her role because of a lack of oversight at multiple locations and
faculty did not have the minimum of a masters' degree with a major
in nursing, the suits stated.
The suits cited another letter dated July 2010 where the NLNAC CEO
notified Mr. Polk that the board voted to deny continuing
accreditation for the bachelor of science in nursing program.
The 2010 letter also said the decision is based on the NLNAC
policy that continuing accreditation was denied to programs with
conditions or warning status found to have continued noncompliance
with accreditation standards.
All three students said the university did not inform them of the
contents in any of the letters and encouraged them to continue
taking classes.
The West Virginia Board of Examiners for Registered Professional
Nurses later unanimously voted to require MSU's school of nursing
to cease admissions to all nursing programs from November 2011
until the university satisfied obligations to the board.
The board also voted to place the school of nursing on provisional
accreditation and ordered it to obtain or maintain full
accreditation. The board terminated accreditation for the school
of nursing in February 2012.
Students asserted university officials did not inform them of the
board's investigation and misled them in believing the loss of
full accreditation was a "rumor."
"The loss of accreditation, as well as other actions taken by the
defendant MSU, has adversely affected and will continue to
adversely affect the plaintiff," Ms. Whitener's suit stated. "The
plaintiff will be unable to take the NCLEX-RN licensure exam,
successful performance of which is required for licensure as a
nurse."
The suits stated students would not be able to apply for masters
of nursing programs and must withdraw from clinical programs.
"The plaintiff will be unable to obtain desired positions in
nursing, have extremely limited job options, will be unable to
obtain a nursing license, which is essential for employment and
will be unable to pursue her career as a nurse in the time frame
which she has expected," Ms. Whitener's suit stated.
Students also asserted the university refused to refund tuition
money and refused to address problems facing students.
"Instead, the defendant MSU has misled the plaintiff into
believing that she has remained in a fully accredited NLNAC
program and has added requirements making it more difficult for
the plaintiff to graduate," Ms. Whitener's suit stated.
An MSU spokesman said he could not comment on pending litigation.
PENN NATIONAL: Sup. Court Refuses to Hear Appeal on Suit Dismissal
------------------------------------------------------------------
The U.S. Supreme Court denied an application to appeal a lower
court's decision dismissing a purported class action lawsuit filed
against Penn National Gaming Inc., according to the Company's
February 24, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On July 16, 2008, the Company was served with a purported class
action lawsuit brought by plaintiffs seeking to represent a class
of shareholders who purchased shares of the Company's Common Stock
between March 20, 2008 and July 2, 2008. The lawsuit alleges that
the Company's disclosure practices relative to the proposed
transaction with Fortress Investment Group LLC and Centerbridge
Partners, L.P. and the eventual termination of that transaction
were misleading and deficient in violation of the Securities
Exchange Act of 1934. The complaint, which seeks class
certification and unspecified damages, was filed in federal court
in Maryland. The complaint was amended, among other things, to
add three new named plaintiffs and to name Peter M. Carlino,
Chairman and Chief Executive Officer, and William J. Clifford,
Senior Vice President and Chief Financial Officer, as additional
defendants. The Company filed a motion to dismiss the complaint
in November 2008, and the court granted the motion and dismissed
the complaint with prejudice. The plaintiffs filed a motion for
reconsideration, which was denied on October 21, 2009. The
plaintiffs subsequently appealed the dismissal to the Fourth
Circuit Court of Appeals and an oral argument was heard on
October 26, 2010. On March 14, 2011, the Fourth Circuit Court of
Appeals affirmed the decision of the lower court. The plaintiffs
have requested the U.S. Supreme Court to consider an appeal of the
decision. In October 2011, the U.S. Supreme Court denied the
application for an appeal.
PRINCETON REVIEW: Securities Class Suit Dismissed in March
----------------------------------------------------------
A securities class action lawsuit commenced by Washtenaw County
Employees' Retirement System was dismissed in March 2012,
according to The Princeton Review, Inc.'s April 16, 2012, Form 10-
K filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011.
On July 29, 2011, Washtenaw County Employees' Retirement System
filed a securities class action complaint in the United States
District Court for the District of Massachusetts against the
Company, certain of its current and former officers and directors,
and the underwriters in the Company's April 2010 public offering.
The complaint, as amended, alleged material misstatements and
omissions in the Company's April 2010 public offering materials.
On March 6, 2012, the Court granted the defendants' motions to
dismiss this action with prejudice, and entered judgment for
defendants that same day.
ROCK-TENN CO: Smurfit-Stone Shareholder Suit Deal Okayed in Feb.
----------------------------------------------------------------
On February 2, 2012, the Chancery Court of the State of Delaware
entered a Final Order and Judgment approving a settlement of a
class action lawsuit against Rock-Tenn Company, RockTenn CP, LLC
(a wholly owned subsidiary of RockTenn that is the successor to
Smurfit-Stone Container Corporation), and former directors of
Smurfit-Stone arising out of RockTenn's acquisition of Smurfit-
Stone, according to the Company's April 16, 2012, Form 8-K filing
with the U.S. Securities and Exchange Commission.
As previously reported, three complaints on behalf of the same
putative class of Smurfit-Stone Container Corporation stockholders
were filed in the Delaware Court of Chancery challenging the
Company's acquisition of Smurfit-Stone: Marks v. Smurfit-Stone
Container Corp., et al., Case No. 6164 (filed February 2, 2011);
Spencer v. Moore, et al., Case No. 6299 (filed March 21, 2011);
and Gould v. Smurfit-Stone Container Corp., et al., Case No. 6291
(filed March 17, 2011). On March 24, 2011, these cases were
consolidated under Case No. 6164, plaintiffs Marks and Spencer
were appointed lead plaintiffs, and the complaint in Spencer was
designated as the operative complaint.
The deadline for Class Members wishing to pursue quasi-appraisal
to submit their Participation Amounts and Proofs of Claim pursuant
to the Settlement (the "Participation Deadline") occurred on April
9, 2012. As of the Participation Deadline, RockTenn had received
Proofs of Claim and Participation Amounts from individuals and
entities seeking quasi-appraisal with respect to approximately
12,200 shares of Smurfit-Stone common stock. The Participation
Amounts received as of the Participation Deadline total
approximately $265,000. RockTenn continues to review the validity
these claims and claimants' calculations of their Participation
Amounts, does not concede that any of these claimants are in fact
entitled to participate in the Quasi-Appraisal Proceeding, and
reserves the right to challenge any claimant's participation in
the Quasi-Appraisal Proceeding. Additional Participation Amounts
and Proofs of Claim postmarked on or before the Participation
Deadline may continue to be received.
SAFEWAY INC: Faces Class Action Over Mislabeled Lucerne Yogurt
--------------------------------------------------------------
Courthouse News Service reports that Safeway sells co-defendant
Lucerne Foods' Greek yogurt that is neither yogurt nor Greek, a
customer claims in a Superior Court class action.
A copy of the Complaint in Tamas v. Safeway, Inc., et al., Case
No. RIC1206341 (Calif. Super. Ct., Riverside Cty.), is available
at:
http://www.courthousenews.com/2012/04/30/Yogurt.pdf
The Plaintiff is represented by:
Christopher P. Ridout, Esq.
Devon M. Lyon, Esq.
Caleb LH Marker, Esq.
RIDOUT LYON
555 E. Ocean Boulevard, Suite 500
Long Beach, CA 90802
Telephone: (562) 216-7380
SIMPLY THICK: Faces Suit Over Contaminated Food Thickener
---------------------------------------------------------
Attorneys Wendy Fleishman and Paulina do Amaral of the national
plaintiffs' law firm Lieff Cabraser Heimann & Bernstein, LLP,
announced that Devon Addonizio of New York, New York, today filed
a personal injury lawsuit charging that contaminated SimplyThick
infant food thickener caused her daughter catastrophic and
permanent injuries. The action was filed against Simply Thick,
LLC, Thermo Pac, LLC, Ameriqual Group, LLC, and H.J. Heinz
Company.
The Addonizio complaint alleges that SimplyThick was contaminated
as a result of a manufacturing problem at the Stone Mountain,
Georgia plant. Ms. Addonizio's baby was fed SimplyThick at the
hospital and later discharged, because the unsuspecting doctors
and nurses had no idea that the food thickener was potentially
dangerous for the infant. As a result of the ingestion of
SimplyThick, Ms. Addonizio's baby, and other babies fed the same
food thickener, suffered from a potentially fatal condition called
Necrotizing Enterocolitis ("NEC").
NEC is a rare disease in children who have been discharged from
the hospital. It causes inflammation and death of intestinal
tissue. NEC has a mortality rate of 25%, meaning it kills 1 out
of every four victims. NEC can cause severe life-long impairment
in children who survive it.
Ms. Fleishman stated that "there is an enormous concern when
manufacturers fail to manufacture food products in a safe manner,
consistent with the FDA's requirements. We, as consumers, expect
that products, like SimplyThick, which are intended to help people
who cannot swallow, will be safe when they are sold to consumers
for use. Defendants' alleged failure to keep contaminated
products off the market - if proven to be true - is
unconscionable."
"There are no words to explain how much suffering this has caused
our little girl and how much despair and helplessness we as her
family have endured," said Ms. Addonizio of her daughter's
injuries.
"Infant food manufacturers owe a duty to parents and babies to
prepare and sell safe products," stated Attorney do Amaral.
The complaint charges that Simply Thick and the other defendants
failed to properly thermally process and test the safety of its
product for use in premature infants. As a result, a beautiful
baby suffered horrendous, painful and traumatic, life-threatening
injuries and continues to be at risk for long-term medical
problems.
SimplyThick Recall
In May 2011, the FDA warned that SimplyThick may cause the life-
threatening condition of necrotizing enterocolitis ("NEC") and
that the product should not be fed to prematurely-born infants.
Soon thereafter, the FDA conducted an inspection of Thermo Pac,
LLC's Stone Mountain, Georgia, facility, where SimplyThick was
manufactured, and found numerous problems at the manufacturing
plant.
As alleged in the complaint, based on the facility inspection, the
FDA found that Thermo Pac, LLC failed to properly thermally
process acidified food, including SimplyThick, in a manner
sufficient to destroy microorganisms dangerous to public health.
The FDA also found bacillus cereus, a type of bacteria, present in
twelve of thirty samples of finished SimplyThick product that it
tested.
On June 4, 2011, the FDA announced that Simply Thick, LLC, was
recalling SimplyThick manufactured at the Stone Mountain
processing plant.
Injuries Suffered by the Infant
as Set Forth in the Complaint
Just days before her discharge, the hospital began adding
SimplyThick to the infant's food. Ms. Addonizio was instructed by
hospital staff to add SimplyThick to her daughter's formula.
Within days after her initial discharge, the infant's health
rapidly deteriorated. On May 13, 2010, the child was having
trouble breathing and she was rushed to the emergency department
at the Weill Cornell Medical Center.
Despite having been discharged from the hospital in good health
just 9 days before, Ms. Addonizio's baby was diagnosed with NEC
shortly after starting to consume SimplyThick and she was taken
for surgery. Because doctors found that there were spotty areas
along the entire length of the infant's intestine and removal of
the entire intestine was a last resort, the infant's intestines
were instead put in an ostemy bag (a silo outside of her body).
Following the initial surgery, her condition continued to
deteriorate until on May 18, 2010, despite the danger involved
with additional surgery, Ms. Addonizio consented to additional
surgery to save her daughter's life. During the second surgery 18
centimeters of the infant's intestine was removed.
Despite the success of the second surgery, the infant's treatment
course during the ensuing six months was excruciating and
complicated. In total, the infant spent over four months in a
critical care unit and seven weeks in rehabilitation recovering
from her injuries allegedly caused by SimplyThick. She returned
home finally on November 12, 2010, when she was just shy of 8
months old.
The lawsuit was filed today in the Supreme Court of the State of
New York, County of New York. Members of the media may obtain a
copy of the complaint by contacting Brenna Van Norman of Lieff
Cabraser at bvannorman@lchb.com
Legal Resources for Parents
Lieff Cabraser is representing parents across America whose
infants have suffered severe injuries allegedly due to Simply
Thick. Visit
http://www.lieffcabraser.com/personal-injury/case/479/simply-thick-recall
to learn more about the Simply Thick recall lawsuits.
Or parents may call Lieff Cabraser toll free at 212-355-9500
and ask to speak to Attorney Wendy Fleishman, Paulina do Amaral,
Heather Foster or Dan Leathers. All inquiries will be handled
with the strictest confidentiality and sensitivity. There is no
charge or obligation for the review of your case.
About Lieff Cabraser
Recognized as "one of the nation's premier plaintiff's firms" by
The American Lawyer magazine, Lieff Cabraser Heimann & Bernstein,
LLP is a sixty-plus attorney law firm with offices in San
Francisco, New York and Nashville. For the last eight consecutive
years, the National Law Journal has selected Lieff Cabraser as one
of the top plaintiffs' law firms in America.
TELEFLEX INC: Appeals From Merger-Related Suit Ruling Pending
--------------------------------------------------------------
An appeal from a court ruling in a consolidated merger-related
class action lawsuit is pending, according to Teleflex, Inc.'s
February 24, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
Three purported class action derivative lawsuits were filed in the
Delaware Court of Chancery (New Castle County) late in December
2004 and early January 2005 relating to the proposed merger
transaction between the Company and Minera Mexico, S.A. de C.V.,
which was completed effective April 1, 2005. On January 31, 2005,
the three actions -- Lemon Bay, LLP v. AMC, et al., Civil Action
No. 961-N, Therault Trust v. Luis Palomino Bonilla, et al., and
Southern Peru Copper Corporation et al., Civil Action No. 969-N,
and James Sousa v. Southern Peru Copper Corporation, et al., Civil
Action No. 978-N -- were consolidated into one action, captioned
In re Southern Peru Copper Corporation Shareholder Derivative
Litigation, Consol. Civil Action No. 961-N; the complaint filed by
Lemon Bay was designated as the operative complaint in the
consolidated lawsuit. The consolidated action purports to be
brought on behalf of the Company and its common stockholders; the
defendants in the consolidated action are AMC, German Larrea Mota-
Velasco, Genaro Larrea Mota-Velasco, Oscar Gonzalez Rocha, Emilio
Carrillo Gamboa, Jaime Fernando Collazo Gonzalez, Xavier Garcia de
Quevedo Topete, Armando Ortega Gomez and Juan Rebolledo Gout,
Carlos Ruiz Sacristan, Harold S. Handelsman, Gilberto Perezalonso
Cifuentes, and Luis Miguel Palomino Bonilla. The consolidated
complaint alleges, among other things, that the Transaction was
the result of breaches of fiduciary duties by the Company's
directors and was not entirely fair to the Company and its
minority stockholders. On December 21, 2010, the Court dismissed
the Special Committee Defendants from the action.
On October 14, 2011, the Court issued an opinion on this action
finding that SCC had paid AMC too much stock consideration in the
Transaction. The Court issued a revised final order and judgment
on December 29, 2011. The Court decided that the AMC Defendants
were jointly and severally liable for damages in the amount of
$1,347 million plus $684.6 million of pre-judgment interest.
Post-judgment interest continues to accrue from October 15, 2011.
The Court decided that the award is payable by AMC with cash, or
with the return of a number of shares of SCC equal in value to
award, or by SCC cancelling an equivalent number of shares owned
by AMC, or by any combination thereof, so long as the total is
equivalent to the amount of the judgment plus accrued post-
judgment interest. The Court also awarded attorneys' fees and
expenses in the amount of $304.7 million, or 15% of the judgment,
plus post-judgment interest, payable by SCC out of the award and
not from existing SCC's cash.
On January 20, 2012, the AMC defendants appealed the Court's
decisions. On the same date, SCC appealed the Court's decision
related to the award of attorneys' fees and expenses.
THR & ASSOCIATES: Employees File Overtime Class Action
------------------------------------------------------
Tim Landis, writing for The State Journal-Register, reports that
A group of THR & Associates employees from across the country is
seeking class-action status for a lawsuit claiming the
Springfield-based buyer of precious metals, coins and antiques
violated federal labor laws.
The lawsuit, filed in federal court in Springfield last month,
contends the workers were not paid overtime for working more than
40 hours a week, were improperly classified as managers exempt
from overtime and that they should have been paid during training.
In addition to THR & Associates, company president and CEO Jeff
Parsons and vice presidents Mike and Jason DeLong are named as
defendants.
Florida employee Shannon Lee filed the lawsuit, claiming THR
workers were given titles such as "managers," "buyers" and
"auditors" as part of promised compensation. Ms. Lee said she was
promised a weekly salary, but was treated as an hourly employee
who was exempt from overtime.
The suit also claims THR & Associates failed to keep adequate
records of hours worked and pay due.
"Defendants knew, or should have known," the lawsuit states, "that
the representative plaintiff and the collective class performed
work that required overtime compensation to be paid."
The lawsuit asks for a list of employees classified as managers,
buyers and auditors. It also asks the court to find THR &
Associates in violation of the federal Fair Labor Standards Act,
as well as for payment of the overtime, legal fees and other
costs.
It was not clear from the lawsuit whether Ms. Lee or the other
employees remained with the company.
Springfield attorney Douglas Quivey, who is among attorneys
representing the workers, said THR & Associates employees from
across the country have joined the lawsuit. The plaintiffs are
waiting for a response to an amended complaint from attorneys for
the company, he said.
"The allegation is basically they were hourly employees, but that
they were labeled salaried employees," said Mr. Quivey, who added
that the plaintiffs would ask that the lawsuit be certified as a
class action.
A former THR & Associates employee has filed a separate lawsuit in
federal court in Indiana, also claiming wage and hour violations.
Vice president of media relations Matthew Enright of THR &
Associates said on April 30 that company executives had not yet
seen the lawsuit, which was filed March 8, and could not comment.
He referred questions to company attorneys, who were not available
on April 30.
THR & Associates opened a headquarters and training facility at
1999 Wabash Ave. in late 2010, promising to create hundreds of
high-paying jobs through its nationwide network of buying and
selling gold, silver, coins, antiques and collectibles.
The company, which does business as Treasure Hunters Roadshow,
often conducts buying and selling events in public venues, such as
convention centers and hotels. According to the company Web site,
THR & Associates also has operations in Europe and Canada.
Mr. Enright said earlier the company has restructured in recent
months, including shutting down the training center about six
months ago.
The company just closed a Treasure Hunters store in Bloomington-
Normal, he said, but THR & Associates still has a workforce of 600
to 700 people.
Jeff Parsons also operates the J. Parsons retail store in the
Parkway Pointe shopping center in Springfield.
TREE.COM INC: Appeal in "Gaines" Class Suit Remains Pending
-----------------------------------------------------------
An appeal in the class action lawsuit captioned Gaines v. Home
Loan Center, Inc., remains pending, Tree.com, Inc. disclosed in
its April 16, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On June 13, 2008, Plaintiffs filed a putative class action,
captioned Gaines v. Home Loan Center, Inc., No. SACV08-667 (U.S.
Dist. Ct., C.D. Cal.), against the Company's subsidiaries, Home
Loan Center, Inc., doing business as LendingTree Loans(R) ("HLC")
and LendingTree LLC, in the U.S. District Court for the Central
District of California. Plaintiffs allege, in essence, that (1)
HLC failed to disclose that the bundled amount for certain loan
closing services (called the "TrueCost") that HLC charged to
Plaintiffs was greater than HLC's actual costs for those services;
(2) HLC's option adjustable-rate mortgage ("ARM") note failed to
tell Plaintiffs that the stated interest rate and payment amounts
would change after the first month and that the payment amount
stated in the note was not sufficient to pay interest charges,
resulting in negative amortization; and (3) HLC misrepresented
that Plaintiffs would have to obtain a home equity line of credit
in order to obtain a low interest rate on their option ARM loans.
Based upon these factual allegations, Plaintiffs assert violations
of the federal Racketeer Influenced and Corrupt Organizations Act
("RICO"), the TILA, the California Unfair Competition Law ("UCL"),
California Business and Professions Code Section 17500, the
California Consumers Legal Remedies Act ("CLRA"), breach of
contract, breach of the implied covenant of good faith and fair
dealing, unjust enrichment, conversion, and money had and
received.
Plaintiffs purport to represent all HLC customers who, since
December 14, 2004, (1) were charged by HLC and paid an amount that
exceeded HLC's actual costs for those services; and/or (2) entered
into option ARM loan agreements with HLC; and/or (3) were misled
into taking out a home equity line of credit along with their
option ARM mortgage. Plaintiffs seek restitution, disgorgement,
damages, attorneys' fees and injunctive relief.
A RICO claim, certain claims alleging problems involving home
equity lines of credit and all contract-based claims were
dismissed with prejudice in May 2010. On December 22, 2011, the
Court determined that Plaintiffs lacked standing with respect to
the remaining claims and granted each of HLC's and LendingTree's
motions for summary judgment. The Court denied Plaintiffs' motion
for reconsideration of the summary judgment decision on January
26, 2012. The Court entered judgment in favor of HLC and
LendingTree and against Plaintiff Joanne Gaines on February 7,
2012. On February 23, 2012 Plaintiff filed a Notice of Appeal.
The appeal remains pending.
The Company believes plaintiffs' allegations lack merit and it
intends to defend against the appeal vigorously.
TREE.COM INC: Judgment Entered in Unit's Favor in "Mortgage" Suit
-----------------------------------------------------------------
Judgment was entered in favor of Tree.com, Inc.'s subsidiary in
the class action lawsuit captioned Mortgage Store, Inc. v.
LendingTree Loans d/b/a Home Loan Center, Inc., No. 06CC00250
(Cal. Super. Ct., Orange Cty.), according to the Company's
April 16, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On November 30, 2006, The Mortgage Store, Inc. and Castleview Home
Loans, Inc. filed the putative class action against the Company's
subsidiary, Home Loan Center, Inc., doing business as LendingTree
Loans(R) ("HLC"), in the California Superior Court for Orange
County. Plaintiffs, two former Network Lenders, alleged that HLC
interfered with LendingTree's contracts with Network Lenders by
taking referrals from LendingTree. The complaint was largely
based upon the factual allegations made in the complaint captioned
Schnee v. LendingTree, LLC and Home Loan Center, Inc., No.
06CC00211 (Cal. Super. Ct., Orange Cty.). Based upon these
factual allegations, Plaintiffs assert claims for intentional
interference with contractual relations, intentional interference
with prospective economic advantage, and violation of the
California Unfair Competition Law ("UCL") and California Business
and Professions Code Section 17500. Plaintiffs purport to
represent all Network Lenders from
December 14, 2004, to date, and seek damages, restitution,
attorneys' fees, and punitive damages.
Plaintiffs' motion for class certification was granted April 29,
2010. On October 17, 2011, the Court granted HLC's motion for
summary judgment. Judgment was entered in favor of HLC on
April 9, 2012.
TREE.COM INC: Parties in "Boschma" Suit Currently in Discovery
--------------------------------------------------------------
Parties in the class action lawsuit against Tree.com, Inc.'s
subsidiary, Home Loan Center, Inc., doing business as LendingTree
Loans(R), are currently involved in discovery, according to the
Company's April 16, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On May 25, 2007, Plaintiffs filed a putative class action
captioned Boschma v. Home Loan Center, Inc., No. SACV07-613 (U.S.
Dist. Ct., C.D. Cal.) against the Company's wholly owned
subsidiary, Home Loan Center, Inc., doing business as LendingTree
Loans(R) ("HLC") in the U.S. District Court for the Central
District of California. Plaintiffs allege that HLC sold them an
option "ARM" (adjustable-rate mortgage) loan but failed to
disclose in a clear and conspicuous manner, among other things,
that the interest rate was not fixed, that negative amortization
could occur and that the loan had a prepayment penalty. Based
upon these factual allegations, Plaintiffs asserted violations of
the federal Truth in Lending Act (the "TILA"), violations of the
California Unfair Competition Law ("UCL"), breach of contract, and
breach of the covenant of good faith and fair dealing. Plaintiffs
purport to represent a class of all individuals who between June
1, 2003, and May 31, 2007, obtained through HLC an option ARM loan
on their primary residence located in California, and seek
rescission, damages, attorneys' fees and injunctive relief.
Plaintiffs have not yet filed a motion for class certification.
Plaintiffs have filed a total of eight complaints in connection
with this lawsuit. Each of the first seven complaints has been
dismissed by the federal and state courts. Plaintiffs filed the
eighth complaint (a Second Amended Complaint) in Orange County
(California) Superior Court on
March 4, 2010, alleging only the fraud and UCL claims. As with
each of the seven previous versions of Plaintiffs' complaint, the
Second Amended Complaint was dismissed in April 2010. Plaintiffs
appealed the dismissal and on August 10, 2011, the appellate court
reversed the trial court's dismissal and directed the trial court
to overrule the demurrer. The case has been remanded to superior
court and the parties are presently involved in discovery.
The Company believes plaintiffs' allegations lack merit and it
intends to defend against this action vigorously.
TREE.COM INC: Plaintiffs in Remaining Suit Fail to Seek Review
--------------------------------------------------------------
Plaintiffs in the remaining class action lawsuit against a
Tree.com, Inc. subsidiary did not petition the Supreme Court for
review of an appellate court decision by the February 15, 2012
deadline, according to the Company's April 16, 2012, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011.
The putative class actions captioned Constance Spinozzi v.
LendingTree, LLC, No. 3:08-cv-229 (U.S. Dist. Ct., W.D.N.C.);
Sylvia Carson v. LendingTree, LLC, No. 3:08-cv-247 (U.S. Dist.
Ct., W.D.N.C.); Mitchell v. Home Loan Center, Inc., No. 08-303-RJC
(U.S. Dist. Ct., W.D. N.C.); Miller v. LendingTree, LLC, No.
08cv2300 (U.S. Dist. Ct., N.D. Ill.); Marvin Garcia v.
LendingTree, LLC, No. 08 Civ. 4551 (U.S. Dist. Ct., S.D.N.Y.); Amy
Bercaw v. LendingTree, LLC, No. SACV08-660 (U.S. Dist. Ct., C.D.
Cal.); Shaver v. LendingTree, LLC, et al., SACV08-755 (U.S. Dist.
Ct. C.D. Cal.); and Bradley v. LendingTree, LLC, et al., SACV08-
755 (U.S. Dist. Ct. C.D. Cal.), arose out of LendingTree's April
21, 2008 announcement that unauthorized persons had gained access
to non-public information relating to its customers. Plaintiffs
alleged that LendingTree is a "consumer reporting agency" within
the meaning of the federal Fair Credit Reporting Act (FCRA) and
had violated FCRA by failing to maintain reasonable procedures
designed to limit the furnishing of consumer reports. Plaintiffs
also asserted claims for negligence, breach of implied contract,
invasion of privacy and misappropriation of confidential
information. Plaintiffs purported to represent all LendingTree
customers affected by the information security breach, and sought
damages, attorneys' fees and injunctive relief. The cases were
transferred for consistent pre-trial treatment into In re
LendingTree, LLC Customer Data Security Breach Litigation in the
Western District of NC Charlotte Division, and the court ordered
each case to individual arbitration. The Carson case was
arbitrated on an individual (non-class) basis and a decision was
issued in favor of LendingTree in April 2010. Following this
decision, certain of the Plaintiffs in the Bercaw case withdrew
their filings. Each of the other cases was dismissed on July 8,
2010.
On January 13, 2011, Plaintiff in the Carson case filed an appeal
with the United States Court of Appeals for the Fourth Circuit; on
November 17, 2011, the Court of Appeals affirmed the District
Court's order compelling arbitration and the arbitration decision
in favor of LendingTree. Plaintiffs did not petition the Supreme
Court for review by the February 15, 2012 deadline.
TREE.COM INC: "Schnee" Class Suit Remains Pending in California
---------------------------------------------------------------
A class action lawsuit against Tree.com, Inc.'s subsidiaries
remains pending in California, according to the Company's
April 16, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On October 11, 2006, four individual plaintiffs filed a putative
class action, captioned Schnee v. LendingTree, LLC and Home Loan
Center, Inc., No. 06CC00211 (Cal. Super. Ct., Orange Cty.),
against the Company's subsidiaries, Home Loan Center, Inc., doing
business as LendingTree Loans(R) ("HLC") and LendingTree LLC in
the California Superior Court for Orange County. Plaintiffs
alleged that they used the LendingTree.com Web site to find
potential lenders and without their knowledge were referred to
LendingTree's direct lender, HLC; that Lending Tree, LLC and HLC
did not adequately disclose the relationship between them; and
that HLC charged Plaintiffs higher rates and fees than they
otherwise would have been charged. Based upon these allegations,
Plaintiffs asserted that LendingTree and HLC violated the
California Unfair Competition Law ("UCL"), California Business and
Professions Code Section 17500, and the California Consumers Legal
Remedies Act ("CLRA"). Plaintiffs purported to represent a
nationwide class of consumers who sought lender referrals from
LendingTree and obtained loans from HLC since December 1, 2004.
Plaintiffs sought damages, restitution, attorneys' fees and
injunctive relief.
On September 25, 2009, Plaintiffs' motion for class certification
was denied in its entirety; Plaintiffs appealed such action. On
July 29, 2011, the Court of Appeals issued its opinion denying
Plaintiffs' appeal. Remittitur was filed on September 29, 2011.
TRI-ANIM HEALTH: Faces Employee Suit Over Illegal Chargebacks
-------------------------------------------------------------
Kirk Rocheleau, Joe Testa, Ken Schumacher, Krista Romero, Rebecca
Williams, Tim Avard, George Reed, and all others similarly
situated v. Tri-Anim Health Services, Inc., a wholly owned
Subsidiary of Sarnova HC, L.L.C. and doing business as Tri-Anim,
and Does 1 through 50, Case No. 1-12-CV-223265 (Calif. Super. Ct.,
Santa Clara Cty., April 27, 2012) is brought on behalf of all
persons similarly situated within the class of all sales
representatives and other sale personnel subject to a policy of
the Defendants' alleged illegal chargebacks.
The Plaintiffs allege that the Defendants have unlawfully
retained, collected or received from Plaintiffs and the class
members a part of the wages paid to them, in violation of the
Labor Code. Therefore, the Plaintiffs and the Class members
demand return of all wages unlawfully withheld, recovered, and
deducted from all sales representatives and other sales personnel
employed by the Defendants.
The Plaintiffs were employed as sales representatives by Tri-Anim
pursuant to its unwritten compensation plan.
Tri-Anim, a wholly owned subsidiary of Sarnova, is a foreign
corporation lawfully doing business in the state of California.
Tri-Anim is a national distributor of healthcare products that
offers both innovative products and those that meet everyday
needs. The Plaintiffs do not currently know the true names or
capacities of the Doe Defendants.
The Plaintiffs are represented by:
Stephen M. Putonti, Esq.
PUTONTI, ESCOVER & ROSSICK, P.C.
401 Ranch Road 620, Suite 350
Lakeway, TX 78734
Telephone: (512) 263-0939
Facsimile: (512) 263-0943
E-mail: Stephen@PERlawTx.com
TYSON FOODS: Obtains Favorable Ruling in Class Action
-----------------------------------------------------
The Muscatine Journal reports that a federal jury in Iowa returned
a verdict in favor of Tyson Foods Inc. in a class action lawsuit
filed in 2007.
According to a news release from the company, the suit alleged
that Tyson didn't pay production workers at its Columbus Junction,
pork plant for certain pre- and post-shift work.
The jury found that plaintiffs failed to prove their claims on a
class-wide basis and that the plaintiffs were not entitled to any
financial damages.
In addition, the jury determined that Tyson's payment practices
were in compliance with the law in that Tyson relied in good faith
on an enforcement position taken by the U.S. Department of Labor.
In a statement released by the company, Tyson officials said they
were pleased with the verdict and proud of the Louisa County plant
and its more than 1,100 employees.
ZOO ENTERTAINMENT: Awaits Order on Bid to Dismiss "Ricker" Suit
---------------------------------------------------------------
Zoo Entertainment, Inc. is awaiting a court decision on its motion
to dismiss a securities class action lawsuit commenced by Bruce E.
Ricker, according to the Company's April 16, 2012, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011.
On July 22, 2011, Bruce E. Ricker, individually and on behalf of
all purchasers of the common stock of the Company from July 7,
2010, through April 15, 2011, filed a putative class action
complaint in the United States District Court for the Southern
District of Ohio. Mr. Ricker was appointed lead plaintiff on
October 19, 2011, and he filed an amended complaint on
December 12, 2011. The amended complaint alleges that the
Company, Mark Seremet, the Company's Chief Executive Officer, and
David Fremed, the Company's Chief Financial Officer, knowingly or
recklessly violated the Securities Exchange Act of 1934, as
amended, and Rule 10b-5 promulgated thereunder, by making false
material statements in connection with certain financial
statements of the Company or by failing to disclose material
information in order to make the financial statements not
misleading. Specifically, the amended complaint relies upon the
Company's April 15, 2011 restatement of its unaudited consolidated
financial statements for the three months ended March 31, 2010,
the three and six months ended June 30, 2010, and the three and
nine months ended September 30, 2010, as the basis for its
allegations that the Company's financial statements filed for
those periods contained materially false statements. Defendants
have filed a motion to dismiss the amended complaint, and the
motion is currently being briefed for the court's consideration.
The Company says it cannot reasonably estimate any potential loss
or exposure at this time.
The Company also disclosed that it received a subpoena from the
SEC requesting certain information in connection with the
restatement of its financial statements. The SEC advised the
Company in a letter dated February 3, 2012, that its investigation
has been completed and that it does not intend to recommend any
enforcement action.
* Litigator Says Due Diligence Needed in Franchising
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Derek Sankey, writing for Financial Post, reports that when the
judge in the much-publicized Tim Hortons class action court case
dismissed the franchisees claim, he took careful measure to note
that, despite mountains of evidence provided by both sides, the
case was, at its core, not complex at all.
The franchisor, Tim Hortons, was entitled to tell the franchisees
what to buy, where to buy it, what to sell and how to sell it, as
per the franchise agreement. It was "entitled to make a profit on
what the franchisees are required to buy" and "entitled to
determine the amount of its profit," wrote Justice George Strathy.
There are contractual and statutory limits to what any franchisor
can do, and they must act in good faith, but the case was
ultimately dismissed on very simple, basic grounds.
It is a testament to the fact that, especially in a system as
large as Tim Hortons, there are bound to be disgruntled
franchisees. Many people overlook a lot of things when they buy
in to a franchise and many get into the game for all the wrong
reasons, or think they know better, or perhaps aren't particularly
suited to become a franchisee in the first place.
Every franchise system is different, but the Tim Hortons case may
provide a cautionary tale of what to be aware of before writing
the check.
"The parties, for the most part, start off with the best
intentions," says Jennifer Dolman, a franchise litigator who acts
mainly on behalf of franchisors. She compares it to a marriage in
that sense.
There are two camps, broadly speaking, that potential franchisees
tend to fall into: those who are "too entrepreneurial" and want to
do everything their own way and those who aren't entrepreneurial
enough and think all they have to do is cut a check, show up and
the rest will fall into place.
"You have to put the time in, roll up your sleeves -- and you've
got to be there and take responsibility," she says. On the other
hand, while feedback and motivation is always a positive thing to
have in any franchise, you still have to work within the
established system.
"If [franchisees] start thinking that they know better too much --
they clearly would have been better off on their own," says
Ms. Dolman, a partner at Osler, Hoskin & Harcourt LLP.
At the end of the day, there are also never any guarantees. Not
everybody is suited to franchising and you have to be very clear,
up front, about what your obligations are and how to work within
the system and under the contract.
It's still somebody else's brand and system, and most franchise
agreements are time-limited contracts, that can come with renewals
that must satisfy certain requirements.
Mr. Justice Strathy noted that one of the greatest disadvantages
of owning a franchise is "loss of control." The franchisee loses
the "freedom of choice that is the hallmark of the independent
business person," he wrote. "Loss of control is a necessary
aspect of a franchise operation."
Steven Goldman, a prominent franchise lawyer who mainly acts on
behalf of franchisees, sees a whole spectrum of people buying into
various franchises for a wide variety of reasons.
They range from well-heeled investors making multimillion-dollar
investments in hotel chains, right down to stay-at-home moms who
want to start up a mobile pet grooming business.
Either way, there is a lot on the line. "I see a lot of
franchisees losing everything they own," Mr. Goldman says. "I
also see a lot of people getting involved in things they really
should not be involved in."
The Canadian Franchise Association says there are more than 78,000
franchise systems operating across Canada, which means plenty of
options to choose from.
"One of the problems lies in the fact once people are sold on the
business concept, it's like buying a red sports car: you love it
and you really are hearing selectively," Mr. Goldman says of
disgruntled franchisees.
There is also very often little accurate information to base your
buying decision on, particularly with brand new franchise systems
that lack financial history and sales projections to provide a
clear snapshot of the business.
In provinces such as Ontario and Alberta, there is also no
requirement by law to provide earnings claims or real financial
data -- and many don't. "A lot of prospective franchisees
underestimate the riskiness of starting a brand new business,"
Mr. Goldman adds.
He cites a woman who recently proposed to buy a new flagship
retail operation for at least $400,000. While she had about $1-
million in total assets, she had zero retail experience and had
never managed a business.
"She thought her chances of losing her entire -- investment were
close to zero," he recalls. "I thought her chance [of failing]
was very high."
No matter what type of personality you are or franchise system
you're buying into, the landscape is littered with examples of
mismatches. Franchise disputes have filled the courts.
Here are just a few:
-- The Quinzos case, where franchisees have brought a class
action alleging the franchisor charged exorbitant prices for food
and other supplies;
-- Midas Canada, where franchises brought a class action
alleging Midas breached its duty to deal in "good faith" by
outsourcing product supply to a third-party;
-- Pet Valu, where franchises are seeking damages of $100-
million, alleging the franchisor breached the franchise agreement
and Ontario's franchising statute;
-- Shoppers Drug Mart, where franchisees are in the early
stages of a proposed class action alleging the company breached
the franchise agreement; and
-- Former Sunoco gas station owners, who tried to sue Suncor
Energy over the termination of their franchise agreements in
Ontario, but the case was dismissed at an early stage of the
litigation.
Due diligence, seeking out qualified advisors, paying attention to
the system and always being aware of all consequences is paramount
to operating any successful franchise. "You really have to go in
with your eyes wide open," Mr. Goldman says.
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S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2012. All rights reserved. ISSN 1525-2272.
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