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/raid1/www/Hosts/bankrupt/CAR_Public/120719.mbx C L A S S A C T I O N R E P O R T E R Thursday, July 19, 2012, Vol. 14, No. 142 Headlines AMERICAN TAXI: Accused of Charging Excessive Credit Card Fees BARRE, VT: Tenants Seek to Appeal Water Bill Ruling BATTAT INC: To Pay $0.4MM Fine for Not Reporting Toy Set Defects BRIDGEPOINT EDUCATION: Faces Securities Class Action in Calif. CHINA EDUCATION: Securities Suit Claims vs. Hsu and Yizhao Pending DEM ENTERPRISES: Asked to Arbitrate Employee Claims Under FAA DISCOVER CARD: Protection Fee Product Suits Settlement Approved DYNEGY INC: Still Awaits Order on Lead Plaintiff Appointment Bids FEDEX CORP: Awaits Sup. Ct. Court Decision in "Anfinson" Suit FEDEX CORP: Continues to Defend Independent Contractors' Suits FEDEX CORP: Wage and Hour Law Violation Suits Still Pending FEDEX CORP: Gets Final Okay of Paystub-Related Suit Settlement FEDEX CORP: Settled "Rascon" Suit vs. Unit for Immaterial Amount FEDEX GROUND: Kansas Supreme Court Asked to Classify Drivers GENERAL MOTORS: Sued for Chevrolet Equinox Deceptive Advertising GROUP HEALTH: Agrees to Cover ABA Therapy Under Settlement HARPERSVILLE, AL: Judge Issues Opinion on Ticket Fines HI-TECH PHARMACAL: Faces Two Suits Over Sinus Buster Products HUGHES TELEMATICS: Agrees to Settle Merger-Related Class Suit JTEKT CORP: Conspired to Fix Auto Bearings' Prices, Suit Says JPMORGAN: Ohio AG Files Motion to Lead "Whale" Fraud Class Action JPMORGAN: Grant & Eisenhofer Files Class Action in New York LINKEDIN CORP: Class Action Over Browsing Histories Dismissed MARRIOTT INT'L: To Seek Summary Judgment in "England" Suit MASTERCARD INC: Signs Interchange Fee Suits' Deal for $790-Mil. MEAT & LIVESTOCK: Live Cattle Exporters Mull Class Action MICROSOFT ONLINE: Sued for Overcharging Cost-Per-Click Ads MILLER ENERGY: Awaits Ruling on Bid to Dismiss Securities Suit MOUNTAIN STATE: Sued for Misrepresenting DMS Program NAT'L FOOTBALL: Three Florida Football Players Join Class Action PCS EDVENTURES!: Shareholder Suit Settlement Paid in February REYNOLDS AMERICAN: Appeals Ct. Revives Camel Cash Class Action SRS LABS: Signs MOU to Settle Merger-Related Suit in California THERABIOGEN INC: In Talks to Settle "Conde" Suit for $21,000 THOMAS M. COOLEY: Kurzon LLP Files Defamation Suit in New York UNI-DIG: Clinton Township Files Class Action Over Stench VISA INC: Signs MOU to Settle Interchange Fee Suits for $4-Bil. VISA INC: Penalties Under Global Settlement Add Up to $7.25BB WARNER MUSIC: Parties to Confer in August on Class Cert. Issue WARNER MUSIC: Suits Over Digital Music Sales Royalties Pending WARNER MUSIC: Awaits Approval of Settlement in "Cournoyer" Suit ********* AMERICAN TAXI: Accused of Charging Excessive Credit Card Fees ------------------------------------------------------------- Jeffrey Bates, on behalf of himself and all others similarly situated v. American Taxi Dispatch, Inc., Joseph Zayed, Jace Rosenbrock and William Price, Case No. 2012-CH-26375 (Ill. Cir. Ct., Cook Cty., July 13, 2012) is brought on behalf of taxi cab drivers contracted by ATDI, who have been: (a) suspended/terminated and denied dispatch services, without a hearing or arbitration in compliance with the Landau Agreed Order; and (b) forced to use only the ATDI credit card process system and pay ATDI excessive fees or be suspended/terminated. On June 29, 2012, Mr. Bates relates, Defendants Joseph Zayed and Jace Rosenbrock demanded that the Plaintiff and the Class sign a document entitled "American Taxi Dispatch, Inc. Re: Credit Card Process," or their contract would be suspended without dispatch service or terminated, and agreed to only use the ATDI credit card processing program in their taxi cabs. Mr. Bates contends that ATDI's fees for credit card transactions are excessive compared to other credit card processing systems. Mr. Bates is a resident of Kane County, Illinois, and an independent contractor taxi cab driver, who owns two taxi cabs. He entered into a contract with ATDI in March 2012. ATDI is an Illinois corporation. The Individual Defendants are residents of Cook County, Illinois, and are officers of ATDI. The Plaintiff is represented by: Larry D. Drury, Esq. LARRY D. DRURY, LTD. 100 North LaSalle St., Suite 1010 Chicago, IL 60602 Telephone: (312) 346-7950 E-mail: ldrurylaw@aol.com - and - Robert A. Langendorf, Esq. ROBERT A. LANGENDORF & ASSOCIATES 134 North LaSalle Street, Suite 1515 Chicago, IL 60602 Telephone: (312) 782-5933 E-mail: rlangendorf@comcast.net BARRE, VT: Tenants Seek to Appeal Water Bill Ruling --------------------------------------------------- The Associated Press reports that a Vermont woman who had to haul jugs of water while on crutches after her landlord's failure to pay the water bill prompted a shutoff by the city of Barre is hailing a federal court decision saying she should have had a chance to appeal. Vermont Legal Aid brought the class-action case for Brenda Brown and similarly situated tenants and got a mixed ruling from U.S. District Judge Christina Reiss. The judge rejected Legal Aid's claims that tenants should have been allowed to establish accounts in their own names when a landlord defaults on the water bill. But the ruling issued on July 12 did say the city must give the tenants notice and a chance to appeal. BATTAT INC: To Pay $0.4MM Fine for Not Reporting Toy Set Defects ---------------------------------------------------------------- The U.S. Consumer Product Safety Commission (CPSC) announced that Battat Incorporated, of Plattsburgh, New York, has agreed to pay a civil penalty of $400,000. The penalty agreement has been accepted provisionally by the Commission (4-0). The settlement resolves CPSC staff allegations that Battat knowingly failed to report the defect and hazard associated with Magnabild Magnetic Building Sets to CPSC immediately, as required by federal law. The Magnabild was a magnetic building set labeled for ages three and up. Small magnets inside the building pieces can fall out, and if found by young children, can be swallowed or aspirated. If more than one magnet is swallowed, the magnets can attract to each other, connect, and cause intestinal perforations or blockages, which can be fatal. CPSC staff alleged that Battat received its first report of magnets coming loose from the Magnabild in October 2005. CPSC staff contacted Battat in July 2007. When the firm reported to CPSC on October 12, 2007, Battat had received 16 reports of magnets coming out of the Magnabild and two reports of children ingesting the non-magnetized steel balls. CPSC staff alleges that Battat was aware of the dangers posed to children by the ingestion of magnets by this time, in part because of the March 2006 recall of the Rose Art Magnetix Building Set, which involved one death, four serious injuries, and 34 incidents involving small magnets. Further, between November 2006 and July 2007, CPSC: 1) re- announced the Rose Art Magnetix Building Set recall due to additional serious injuries to children; 2) issued a "Magnet Safety Alert" warning parents of the risk of serious injury and death to children from magnet ingestion; and 3) announced five separate recalls for several million toys containing magnets due to the potential for magnet liberation. CPSC staff alleges that Battat knew about the CPSC's efforts and the risks posed to children by the magnets falling out of the Magnabild and failed to report the dangerous defect immediately to the CPSC, as required by federal law. Despite being aware in April or May 2006 of the possibility that small magnets could cause intestinal injury, Battat did not report until October 2007 after three requests from staff. In that report, however, Battat failed to inform CPSC of the defect and resulting potential hazard in two additional models of the product. Battat and CPSC announced a voluntary recall of 125,000 Magnabilds on January 23, 2008. The recall was expanded to include 7,000 more Magnabilds on March 13, 2008. Magnabilds were sold nationwide from August 2004 to February 2008 for between $20 and $40. There were no injuries associated with magnets falling out of the Magnabild. Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC. In agreeing to the settlement, Battat denies CPSC staff allegations that its Magnabild toys could create an unreasonable risk of serious injury or death or contained a defect that could create a substantial product hazard, or that Battat violated the reporting requirements of the Consumer Product Safety Act. Pursuant to the Consumer Product Safety Act, CPSC must consider the appropriateness of the penalty to the size of the business of the person charged, including how to address undue adverse economic impacts on small businesses. Battat is a small business as set forth in the Small Business Administration guidelines regarding size of business. BRIDGEPOINT EDUCATION: Faces Securities Class Action in Calif. -------------------------------------------------------------- Courthouse News Service reports that Bridgepoint Education, which is "primarily online," goosed its stock price by concealing accreditation problems at its Ashford University campus, shareholders say in a Superior Court class action. A copy of the Complaint in Franke v. Bridgepoint Education, Inc., et al., Case No. 12-cv-01737 (S.D. Calif.), is available at: http://www.courthousenews.com/2012/07/16/CollegeStock.pdf The Plaintiff is represented by: Darren J. Robbins, Esq. David C. Walton, Esq. ROBBINS GELLER RUDMAN & DOWD LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: (619) 231-1058 E-mail: darrenr@rgrdlaw.com davew@rgrdlaw.com - and - Frank J. Johnson, Esq. Brett M. Weaver, Esq. JOHNSON & WEAVER, LLP 110 West A Street, Suite 750 San Diego, CA 92101 Telephone: (619) 230-0063 E-mail: frankj@johnsonandweaver.com brettw@johnsonandweaver.com CHINA EDUCATION: Securities Suit Claims vs. Hsu and Yizhao Pending ------------------------------------------------------------------ A consolidated putative securities class action lawsuit against China Education Alliance, Inc., remains pending in a California court, according to the Company's May 15, 2012 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarterly period ended March 31, 2012. 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. DEM ENTERPRISES: Asked to Arbitrate Employee Claims Under FAA ------------------------------------------------------------- In the lawsuit captioned Thomas Okechukwu; and Billy E. Wyble, Jr., on behalf of all persons similarly situated v. DEM Enterprises, Inc., a California Corporation, doing business as ABC Chauffeured Limousines, Case No. 4:12-cv-03654 (N.D. Calif., July 12, 2012), the Petitioners ask the U.S. District Court for the Northern District of California for an order compelling the Respondent, DEM Enterprises, to submit to arbitration pursuant to the Federal Arbitration Act. In accordance with the FAA, the Petitioners put the Respondent on notice on February 24, 2012, and June 26, 2012, that it was required to submit to arbitration as outlined in the parties' arbitration agreement, Richard A. Hoyer, Esq., at Hoyer & Associates, in San Francisco, California -- rhoyer@hoyerlaw.com -- tells the Court. However, he asserts, the Respondent has declined to arbitrate. The Petitioners were each employed by DEM Enterprises and signed an employment contract. The contract, drafted by the Respondent and signed by each new employee, includes a clause in regards to arbitration. The Respondent cannot plausibly deny the existence of the arbitration agreement, nor the terms of the clause, Mr. Hoyer contends. He adds that neither can the Respondent claim unconsionability or unfairness, as again, the Respondent is the entity, which drafted the terms of the agreement. Hence, the Petitioners ask the Court to compel the Respondent to submit to arbitration, to appoint a neutral arbitrator, and to leave the decision to the arbitrator as to whether to hold individual arbitrations, consolidated individual arbitrations, or a class arbitration. The Petitioners are represented by: Richard A. Hoyer, Esq. HOYER & ASSOCIATES Michael S. Sorgen, Esq. LAW OFFICES OF MICHAEL S. SORGEN 240 Stockton Street, Ninth Floor San Francisco, CA 94108 Telephone: (415) 956-1360 Facsimile: (415) 956-6342 Facsimile: (415) 276-1738 E-mail: rhoyer@hoyerlaw.com msorgen@sorgen.net DISCOVER CARD: Protection Fee Product Suits Settlement Approved --------------------------------------------------------------- Discover Card Execution Note Trust disclosed in its July 16, 2012, Form 10-D filing with the U.S. Securities and Exchange Commission for the monthly distribution period June 1, 2012, to June 30, 2012, that its settlement agreement resolving eight putative class action lawsuits over its protection fee product received final approval on May 10, 2012. As previously reported, there were eight putative class action cases pending in relation to the sale of Discover's payment protection fee product. Each of these lawsuits challenges Discover's marketing practices with respect to marketing its payment protection fee product to its cardmembers under various state laws and the Truth in Lending Act. The plaintiffs seek monetary remedies including unspecified damages and restitution, attorneys' fees and costs, and various forms of injunctive relief including an order rescinding the payment protection fee product enrollments of all class members. All of the cases have been transferred to the U.S. District Court for the Northern District of Illinois. In June 2011, Discover and class counsel entered into a preliminary global settlement of all of the pending class actions. DYNEGY INC: Still Awaits Order on Lead Plaintiff Appointment Bids ----------------------------------------------------------------- Dynegy Inc. is still awaiting a court decision on two competing motions for appointment of lead plaintiff and lead counsel in the class action lawsuit initiated by Charles Silsby, according to the Company's July 13, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. On March 28, 2012, Mr. Charles Silsby ("Silsby") filed a putative securities class action lawsuit, styled Silsby v. Icahn, et al., Case No. 12-cv-02307(JGK), in the United States District Court for the Southern District of New York against Dynegy, Robert Flexon, Chief Executive Officer, Clint C. Freeland, Chief Financial Officer, and Mr. Carl C. Icahn (collectively, the "Defendants"). Mr. Silsby alleges that Dynegy and Messrs. Flexon and Freeland violated Section 10(b) of the Exchange Act and Securities and Rule 10b-5 promulgated thereunder in making certain statements regarding the transfer of Dynegy Coal Holdco LLC by Dynegy Gas Investments, LLC ("DGIN") to Dynegy. Mr. Silsby further alleges that Messrs. Flexon, Freeland, and Icahn are liable for such violations as control persons of Dynegy pursuant to Section 20(a) of the Exchange Act. Mr. Silsby seeks to bring these claims on behalf of a putative class comprising all persons who acquired Dynegy common stock between September 2, 2011, and March 9, 2012. On April 26, 2012, the district court approved the parties' stipulation adjourning the Defendants' time to respond to Mr. Silsby's complaint without date, in light of anticipated motions to appoint a lead plaintiff and lead counsel and the filing of an amended complaint. On May 29, 2012, two competing motions for appointment of lead plaintiff and lead counsel were filed. The district court has not ruled on these motions. Dynegy believes the claims are without merit and intends to vigorously contest this lawsuit. Two additional putative shareholder actions have been filed in state courts: Zahariades v. Elward et al., No. 7539 (Del. Ch. filed May 17, 2012) and Nicolle v. Flexon et al., No. CC-12-02703- A (Tex. Dallas Co. filed May 4, 2012). Dynegy also believes that the claims asserted in these actions are without merit and intends to vigorously contest them. FEDEX CORP: Awaits Sup. Ct. Court Decision in "Anfinson" Suit ------------------------------------------------------------- FedEx Corporation is awaiting a Washington Supreme Court decision in the class action lawsuit captioned Anfinson v. FedEx Ground, according to the Company's July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended May 31, 2012. In January 2008, one of the contractor-model lawsuits that is not part of a multidistrict litigation involving FedEx Ground Package System, Inc. ("FedEx Ground") was certified as a class action by a Washington state court. The plaintiffs in Anfinson represent a class of single-route, pickup-and-delivery owner-operators in Washington from December 21, 2001, through December 31, 2005, and allege that the class members should be reimbursed as employees for their uniform expenses and should receive overtime pay. In March 2009, a jury trial in the Anfinson case was held, and the jury returned a verdict in favor of FedEx Ground, finding that all 320 class members were independent contractors, not employees. The plaintiffs appealed the verdict. In December 2010, the Washington Court of Appeals reversed and remanded for further proceedings, including a new trial. The Company filed a motion to reconsider, and this motion was denied. In March 2011, the Company filed a discretionary appeal with the Washington Supreme Court, and in August 2011, that petition was granted. The Washington Supreme Court heard oral arguments in February 2012. FEDEX CORP: Continues to Defend Independent Contractors' Suits -------------------------------------------------------------- FedEx Corporation continues to defend class action lawsuits involving its subsidiary brought by independent contractors, according to the Company's July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended May 31, 2012. FedEx Ground Package System, Inc. ("FedEx Ground") is involved in numerous class-action lawsuits (including 30 that have been certified as class actions), individual lawsuits and state tax and other administrative proceedings that claim that the company's owner-operators should be treated as employees, rather than independent contractors. Most of the class-action lawsuits were consolidated for administration of the pre-trial proceedings by a single federal court, the U.S. District Court for the Northern District of Indiana. The multidistrict litigation court granted class certification in 28 cases and denied it in 14 cases. On December 13, 2010, the court entered an opinion and order addressing all outstanding motions for summary judgment on the status of the owner-operators (i.e., independent contractor vs. employee). In sum, the court has now ruled on the Company's summary judgment motions and entered judgment in favor of FedEx Ground on all claims in 20 of the 28 multidistrict litigation cases that had been certified as class actions, finding that the owner-operators in those cases were contractors as a matter of the law of the following states: Alabama, Arizona, Georgia, Indiana, Kansas (the court previously dismissed without prejudice the nationwide class claim under the Employee Retirement Income Security Act of 1974 based on the plaintiffs' failure to exhaust administrative remedies), Louisiana, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, West Virginia and Wisconsin. The plaintiffs filed notices of appeal in all of these 20 cases. The Seventh Circuit heard the appeal in the Kansas case in January 2012 and, in July 2012, issued an opinion that did not make a determination with respect to the correctness of the district court's decision and, instead, certified two questions to the Kansas Supreme Court related to the classification of the plaintiffs as independent contractors under the Kansas Wage Payment Act. The multidistrict litigation court remanded the other eight certified class actions back to the district courts where they were originally filed because its summary judgment ruling did not completely dispose of all of the claims in those lawsuits. Specifically, in the five cases in Arkansas, California, Florida, and Oregon (two certified cases), the court's ruling granted summary judgment in FedEx Ground's favor on all of the certified claims but did not decide the uncertified claims. In the three cases filed in Kentucky, Nevada and New Hampshire, the court ruled in favor of FedEx Ground on some of the claims and against FedEx Ground on at least one claim. In May 2012, the Oregon district court dismissed the two Oregon cases, but in June 2012, the plaintiffs in both cases filed notices of appeal with the Ninth Circuit Court of Appeals. In June 2012, the Kentucky district court ruled in favor of FedEx Ground on certain of the plaintiffs' claims, thereby reducing the Company's potential exposure in the matter. Other contractor-model cases that are not or are no longer part of the multidistrict litigation are in varying stages of litigation. With respect to the state administrative proceedings relating to the classification of FedEx Ground's owner-operators as independent contractors, during the second quarter of 2011, the attorneys general in New York and Kentucky each filed lawsuits against FedEx Ground challenging the validity of the contractor model. In January 2012, FedEx Ground settled the lawsuit filed by the Kentucky Attorney General for an immaterial amount, and in April 2012, the lawsuit was dismissed. While the granting of summary judgment in favor of FedEx Ground by the multidistrict litigation court in 20 of the 28 cases that had been certified as class actions remains subject to appeal, the Company believes that it significantly improves the likelihood that the Company's independent contractor model will be upheld. Adverse determinations in matters related to FedEx Ground's independent contractors, however, could, among other things, entitle certain of the Company's contractors and their drivers to the reimbursement of certain expenses and to the benefit of wage- and-hour laws and result in employment and withholding tax and benefit liability for FedEx Ground, and could result in changes to the independent contractor status of FedEx Ground's owner- operators in certain jurisdictions. The Company believes that FedEx Ground's owner-operators are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers of the Company's independent contractors. While it is reasonably possible that potential loss in some of these lawsuits or such changes to the independent contractor status of FedEx Ground's owner-operators could be material, the Company cannot yet determine the amount or reasonable range of potential loss. A number of factors contribute to this. The number of plaintiffs in these lawsuits continues to change, with some being dismissed and others being added and, as to new plaintiffs, discovery is still ongoing. In addition, the parties have not yet conducted any discovery into damages, which could vary considerably from plaintiff to plaintiff. Further, the range of potential loss could be impacted considerably by future rulings on the merits of certain claims and FedEx Ground's various defenses, and on evidentiary issues. In any event, the Company does not believe that a material loss is probable in these matters. FEDEX CORP: Wage and Hour Law Violation Suits Still Pending ----------------------------------------------------------- FedEx Corporation continues to defend class action lawsuits alleging violations of wage and hour laws, according to the Company's July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended May 31, 2012. The Company is a defendant in a number of lawsuits containing various class-action allegations of wage-and-hour violations. The plaintiffs in these lawsuits allege, among other things, that they were forced to work "off the clock," were not paid overtime or were not provided work breaks or other benefits. The complaints generally seek unspecified monetary damages, injunctive relief, or both. The Company does not believe that a material loss is reasonably possible with respect to any of these matters. FEDEX CORP: Gets Final Okay of Paystub-Related Suit Settlement -------------------------------------------------------------- A California court granted final approval of FedEx Corporation's settlement of a class action lawsuit over noncompliant paystubs, according to the Company's July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended May 31, 2012. A federal court in California ruled in April 2011 that paystubs for certain employees of Federal Express Corporation ("FedEx Express") in California did not meet that state's requirements to reflect pay period begin date, total overtime hours worked and the correct overtime wage rate. The ruling came in a class action lawsuit filed by a former courier seeking damages on behalf of herself and all other FedEx Express employees in California that allegedly received noncompliant paystubs. The court certified the class in June 2011. The court ruled that FedEx Express was liable to the State of California and was prepared to rule as to whether FedEx Express was liable to class members who could prove they were injured by the paystub deficiencies. The judge did not decide on the amount, if any, of liability to the State of California or to the class, but had wide discretion. Prior to any decision on the amount of liability, the Company reached an agreement to settle this matter for an immaterial amount in October 2011, subject to approval by the court. The court granted final approval of the settlement in July 2012. FEDEX CORP: Settled "Rascon" Suit vs. Unit for Immaterial Amount ---------------------------------------------------------------- FedEx Corporation settled the class action lawsuit captioned Rascon v. FedEx Ground for an immaterial amount in June 2012, according to the Company's July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended May 31, 2012. In August 2010, one of the contractor-model lawsuits that is not part of the multidistrict litigation against FedEx Ground Package System, Inc. ("FedEx Ground") was certified as a class action by a Colorado state court. The plaintiff in Rascon represents a class of single-route, pickup-and-delivery owner-operators in Colorado who drove vehicles weighing less than 10,001 pounds at any time from August 27, 2005, through the present. The lawsuit seeks unpaid overtime compensation, and related penalties and attorneys' fees and costs, under Colorado law. The Company's applications for appeal challenging this class certification decision have been rejected. The Company settled this matter for an immaterial amount, subject to court approval, in June 2012. FEDEX GROUND: Kansas Supreme Court Asked to Classify Drivers ------------------------------------------------------------ Joe Celentino at Courthouse News Service reports that the United States Court of Appeals for the Seventh Circuit has asked the Kansas Supreme Court to determine whether FedEx drivers are employees or independent contractors in a case that will likely have far-reaching implications for shipping carriers nationwide. In 2005, the Judicial Panel on Multidistrict Litigation consolidated more than 70 class actions brought by FedEx drivers before U.S. District Judge Robert Miller in Indiana. The plaintiffs, current and former drivers, claimed that they were employees rather than independent contractors under the laws of the states in which they worked and under federal law. Craig v. Fedex, a 479-member class seeking relief under ERISA and the Kansas Wage Payment Act, became the "lead" case. Drivers sought repayment of all costs and expenses they paid during their FedEx employment, as well as overtime wages. Though Judge Miller sided with FedEx in finding that the drivers were independent contractors, the judge remanded the remaining cases for further proceedings. FedEx fought to have Judge Miller conclude the remaining claims himself, but the 7th Circuit affirmed. Meanwhile the drivers appealed Judge Miller's ruling on the merits, arguing that he misapplied Kansas and federal law. Here, the 7th Circuit declined to intervene and said that the ruling turns on application of Kansas law. "Perhaps the Kansas public policy tips the scales in favor of finding employee status for purposes of the KWPA in close cases such as this," the unsigned opinion states. "We cannot be sure, and the Kansas Supreme Court is in a far better position to provide a definitive answer on this controlling question of state law than are we." The court noted that there are an increasing number of independent contractors in the United States. "This case will have far-reaching effects on how FedEx runs its business, not only in Kansas but also throughout the United States," the decision states. "And it seems likely that employers in other industries may have similar arrangements with workers, whether delivery drivers or other types of workers." "There are several economic incentives for employers to use independent contractors and there is a potential for abuse in misclassifying employees as independent contractors." The 7th Circuit certified several questions to the state high court on July 12. "Given the undisputed facts presented to the district court in this case, are the plaintiff drivers employees of FedEx as a matter of law under the KWPA?" the court asked. Noting precedent from the Northern District of Indiana that said drivers can acquire more than one service area, the court also asked "is the answer to the preceding question different for plaintiff drivers who have more than one service area?" The 7th Circuit has asked state supreme courts to weigh in on cases with some frequency in the past two years. In American Federation of Teachers v. Board of Education of the City of Chicago, the Illinois Supreme Court weighed in on whether tenured teachers laid off for economic reasons had the right to be rehired when openings arose. And in George v. National Collegiate Athletic Association, the Indiana Supreme Court found that the ticket-distribution plan for the Men's Final Four did not constitute a "lottery" under state law. The 7th Circuit subsequently adopted both courts' opinions. A copy of the decision in Craig, et al. v. FedEx Ground Package System, Inc., No. 10-3115 (7th Cir.), is available at: http://www.courthousenews.com/2012/07/16/fedex.pdf GENERAL MOTORS: Sued for Chevrolet Equinox Deceptive Advertising ---------------------------------------------------------------- Courthouse News Service reports that General Motors advertised and sold the 2012 Chevrolet Equinox as containing the "MyLink" technology system, though the Equinoxes sold in late 2011 and early this year did not have it, a class action claims in Superior Court. A copy of the Complaint in Brewer v. General Motors, LLC, et al., Case No. 37-2012-00100642 (Calif. Super. Ct., San Diego Cty.), is available at: http://www.courthousenews.com/2012/07/16/Chevy.pdf The Plaintiff is represented by: Christopher P. Barry, Esq. Angela J. Smith, Esq. Dana R. Turner, Esq. ROSNER, BARRY & BABBITT, LLP 10085 Carroll Canyon Road, Suite 100 San Diego, CA 92131 Telephone: (858) 348-1005 GROUP HEALTH: Agrees to Cover ABA Therapy Under Settlement ---------------------------------------------------------- According to an article posted by Janet Horne at The Seattle Times, Group Health Cooperative has agreed to cover Applied Behavioral Therapy to treat autism and autism spectrum disorders under a class-action settlement now under review by a King County Superior Court judge. The lawsuit, filed in 2010 by the law firm Sirianni Youtz Spoonemore, covers about 800 Group Health members, and is one of six similar pending lawsuits brought by the firm against Washington insurers, seeking neurodevelopmental and behavioral therapies for developmental disabilities. "The court process is moving us toward a determination of appropriate coverage following the passage of the mental health parity laws at the state level," Group Health's president and CEO, Scott Armstrong, said in a statement. The lawsuit was brought on behalf of a boy with autism whose parents sought the therapy. The boy's mother, Clara Chan, said: "This agreement paves the way for many children with autism to have access to this essential therapy." Rick Spoonemore, one of the family's lawyers, commended Group Health, saying the agreement "set the standard for coverage of ABA therapy by which all other insurers will be judged." HARPERSVILLE, AL: Judge Issues Opinion on Ticket Fines ------------------------------------------------------ WBRC reports that a Shelby County judge has issued a harsh opinion against Harpersville City Council members and the company they hired to collect ticket fines. Judge Hub Harrington scolded the council and company for reinstating "debtor prisons" against the poor, which were outlawed in the country in the 19th century. Birmingham attorney Bill Dawson filed a class action lawsuit on behalf of four people arrested, fined and in some cases jailed without legal defense. According to the suit, the people who were arrested in Harpersville for speeding and could not pay the fines because they didn't have the money were in some cases put in jail and then charged additional fees by the collection company. Mr. Dawson said that one of his clients in the class action suit spent 24 months in jail and owes $10,000 for traffic and license fines that began a decade ago. The problem, according to Mr. Dawson, is that many of these collection companies says they will help the defendant pay their fines while charging them more fees. "We filed a lawsuit in behalf of these individuals and a class of others to make sure their constitutional rights were protected and that people who don't have money or who are indigent are not jailed are unduly harassed and paying these, what we think are outrageous fees," Mr. Dawson said. HI-TECH PHARMACAL: Faces Two Suits Over Sinus Buster Products ------------------------------------------------------------- Hi-Tech Pharmacal Co., Inc. is facing two class action lawsuits alleging its Sinus Buster(R) products are improperly marketed, according to the Company's July 13, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended April 30, 2012. On May 16, 2012, plaintiff David Delre, on behalf of himself and all others similarly situated, brought a class action lawsuit, Civil Action No. 12-2429, in the U.S. District Court for the Eastern District of New York, against Wayne Perry, Dynova Laboratories, Inc., Sicap Industries, LLC, and the Company, alleging, among other things, that their Sinus Buster(R) products are improperly marketed, labeled and sold as homeopathic products, and that these allegations support claims of fraud, unjust enrichment, breach of express and implied warranties and alleged violations of various state and federal statutes. The Company believes the complaint is without merit and intends to vigorously defend against the allegations in the complaint. The Company cannot predict the outcome of the action. On June 8, 2012, plaintiff Mathew Harrison, on behalf of himself and all others similarly situated, brought a class action lawsuit, Civil Action No. 12-2897, in the U.S. District Court for the Eastern District of New York, against Wayne Perry, Dynova Laboratories, Inc., Sicap Industries, LLC, Walgreens Co. and the Company, alleging, among other things, that their Sinus Buster(R) products are improperly marketed, labeled and sold as homeopathic products, and that these allegations support claims of fraud, unjust enrichment, breach of express and implied warranties and alleged violations of various state and federal statutes. The Company believes the complaint is without merit and intends to vigorously defend against the allegations in the complaint. The Company cannot predict the outcome of the action. HUGHES TELEMATICS: Agrees to Settle Merger-Related Class Suit ------------------------------------------------------------- HUGHES Telematics, Inc. disclosed in its July 13, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission that it has reached an agreement in principle to settle a purported stockholder class action lawsuit brought in the Superior Court of DeKalb County, Georgia captioned Terrel L. Pochert v. HUGHES Telematics, Inc., et al., Civil Action No. 12CV8202-3 (the "Stockholder Action"). The Stockholder Action names as defendants the Company, Verizon Communications Inc., Apollo Global Management, LLC, Verizon Telematics Inc. and the individual members of the Company's board of directors. The Stockholder Action alleges claims for breach of fiduciary duty, and aiding and abetting breaches of fiduciary duty, arising from the Agreement and Plan of Merger, dated as of June 1, 2012 (the "Merger Agreement"), by and among Verizon Communications Inc. ("Parent"), Verizon Telematics Inc., a wholly owned subsidiary of Parent ("Sub"), and the Company, pursuant to which Parent via merger will acquire all of the outstanding shares of common stock of the Company (other than Dissenting Shares (as defined in the Merger Agreement), shares owned by the Company, Parent or their subsidiaries, and Earnout Shares (as defined in the Merger Agreement)) for $12.00 per share in cash (the "Merger"). Although the Company and the other defendants believe the Stockholder Action is entirely without merit, the defendants agreed in principle to settle the Stockholder Action solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing. The defendants and the named plaintiff in the Stockholder Action will seek to enter into a stipulation of settlement that will be presented to the DeKalb County Superior Court for final approval. The stipulation of settlement will provide for, among other things, the conditional certification of the Stockholder Action as a non opt-out class action pursuant to Georgia Civil Practice Act Section 9-11-23(a), (b)(1) and (b)(2), with the class consisting of all persons who held shares of common stock, beneficially or of record, including their respective successors in interest, successors, predecessors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, except the defendants and their affiliates, at any time during the period from and including June 1, 2012, through the date of consummation of the Merger. The stipulation of settlement will provide for the release of any and all claims arising from the Merger, subject to court approval. The release will not become effective until the stipulation of settlement is approved by the DeKalb County Superior Court, and there can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the DeKalb County Superior Court will approve the settlement even if the parties were to enter into the stipulation. The settlement will not affect the consideration to be received by the Company's stockholders in the Merger or the timing of the anticipated closing of the Merger. As part of the settlement, the Company has agreed (a) to make certain additional disclosures related to the Merger (the "Supplemental Disclosures"), and (b) not to object, based on untimeliness, to a written demand for appraisal from a stockholder who desires to exercise appraisal rights under Section 262 of the Delaware General Corporation Law if such demand is delivered by no later than July 23, 2012. The Supplemental Disclosures supplement the disclosure contained in the definitive information statement filed by the Company with the Securities and Exchange Commission (the "SEC") on June 26, 2012, and mailed to the Company's stockholders on or about that date, and should be read in conjunction with the disclosures contained in the information statement, which in turn should be read in its entirety. JTEKT CORP: Conspired to Fix Auto Bearings' Prices, Suit Says ------------------------------------------------------------- Melissa Barron, on behalf of herself and all others similarly situated v. JTEKT Corporation, Nachi-Fujikoshi Corp., NSK Ltd., Schaeffler AG, AB SKF, NTN Corporation and NTN USA Corporation, Case No. 3:12-cv-03651 (N.D. Calif., July 12, 2012) arises out of an alleged long-running conspiracy from at least January 1, 2004, until such time as the Defendants' unlawful activities ceased, among Defendants and their co-conspirators, with the purpose and effect of rigging bids for and fixing, raising, maintaining and stabilizing prices of automotive bearings sold indirectly to the Plaintiff and other indirect purchasers throughout the United States of America. As a result of the Defendants' bid-rigging and price-fixing conduct, she and class members have been injured in their business and property by paying more for Automotive Bearings, and the vehicles containing them, than they would otherwise have paid in the absence of the Defendants' conspiracy, Ms. Barron contends. She adds that prices of Automotive Bearings were raised to supracompetitive levels by the Defendants and their co- conspirators. Ms. Barron is a resident of California, who indirectly purchased one or more Automotive Bearings manufactured and sold by one or more of the Defendants during the Class Period. JTEKT is a Japanese corporation with its principal place of business in Osaka, Japan. Nachi-Fujikoshi is a Japanese corporation with its principal place of business in Toyama, Japan. NSK is a Japanese corporation with its principal place of business in Tokyo, Japan. Schaeffler AG ("Schaeffler") is a German corporation with its principal place of business in Herzogenaurach, Germany. AB SKF is a Swedish corporation with its principal place of business in Goteborg, Sweden. NTN Corporation is a Japanese corporation with its principal place of business in Osaka, Japan. NTN USA is a Delaware corporation with its principal place of business in Mount Prospect, Illinois. Each of the Defendants -- directly or through its subsidiaries -- manufactured, marketed and sold Automotive Bearings that were purchased throughout the United States. The Plaintiff is represented by: Terry Gross, Esq. Adam C. Belsky, Esq. Sarah Crowley, Esq. GROSS BELSKY ALONSO LLP One Sansome Street, Suite 3670 San Francisco, CA 94104 Telephone: (415) 544-0200 Facsimile: (415) 544-0201 E-mail: terry@gba-law.com adam@gba-law.com sarah@gba-law.com JPMORGAN: Ohio AG Files Motion to Lead "Whale" Fraud Class Action ----------------------------------------------------------------- Dan Hart, writing for Bloomberg News, reports that Ohio Attorney General Mike DeWine filed a motion seeking to lead a proposed class-action lawsuit against JPMorgan Chase & Co. involving the activities of a U.K. trader known as the "London Whale." Ohio pension funds lost more than $27.5 million due to the alleged fraud, Mr. DeWine's office said on July 14 in a statement. Spokesman Dan Tierney, speaking in a telephone interview, said the state is seeking lead plantiff status in the case because of "the size of the losses." On July 13, JPMorgan Chase Chief Executive Officer Jamie Dimon said its chief investment office has had $5.8 billion in losses on the trades so far, and that figure may climb by $1.7 billion in a worst-case scenario. One trader, Bruno Iksil, amassed positions in credit derivatives so big and market-moving he became known as the London Whale. Ohio said its pension fund managers were given "false and misleading information" that hid the true nature of the bank's trades. The suit was filed on behalf of the Ohio Public Employee Retirement System, the School Employees Retirement System of Ohio and the State Teachers Retirement System of Ohio. JPMorgan spokesman Joe Evangelisti declined to comment when reached via e-mail by Bloomberg News on July 14. Class-action status allows plaintiffs more leverage in negotiations with defendant banks. Lead plaintiffs direct the litigation on behalf of the class, determining strategy while usually reaping the largest share of any verdict or settlement. Four Class Actions Ohio is seeking to lead a class action initiated by Louisiana, Mr. Tierney said, one of four class actions that have been filed. Public pension funds in Oregon and Arkansas as well as a Swedish national pension fund are seeking to join the Louisiana lawsuit, the Ohio statement said. In June, JPMorgan was sued by the Louisiana Municipal Police Employees Retirement System for alleged securities fraud tied to a trading loss of at least $2 billion. The state claimed the biggest U.S. bank and top officials misled investors about its risk management and financial condition from February 2010 to May 2012. The case is Louisiana Municipal Police Employees Retirement System v. JPMorgan Chase & Co., 12-cv-4729, U.S. District Court for the Southern District of New York (Manhattan). JPMORGAN: Grant & Eisenhofer Files Class Action in New York ----------------------------------------------------------- Grant & Eisenhofer P.A. filed a class action lawsuit on July 13, 2012 in the Supreme Court of the State of New York against JPMorgan Chase & Co. JPMorgan, unbeknownst to its customers, has directed its clients into its own JPMorgan funds even when those funds were not suitable investments. JPMorgan did so to earn increased fees at the expense of their clients. As a result of Defendant's conduct, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Manhattan district attorney, and officials in New Jersey and Delaware are investigating Defendant's sales practices. All current or former JPMorgan clients who invested in JPMorgan mutual funds from January 1, 2007 through the present are eligible to participate in the suit. The lawsuit seeks to recover (1) all fees paid to JPMorgan in connection with purchases of JPMorgan's proprietary funds and investments, (2) all ongoing management fees collected by JPMorgan on client portfolios that contained positions in JPMorgan proprietary funds and investments, (3) all other fees that JPMorgan received as a results of its clients' investments in JPMorgan proprietary funds and investments, and (4) compensatory, consequential, and punitive damages recoverable at law, equity, or under N.Y. GBS Law Sections 349 and 350. If you invested in a JPMorgan fund from January 1, 2007 to the present, please contact Grant & Eisenhofer P.A. at 888-554-3529 or info@gelaw.com. Grant & Eisenhofer -- http://www.gelaw.co-- represents investors and shareholders internationally in securities class actions, corporate governance actions and derivative actions. Grant & Eisenhofer has been named one of the country's top plaintiffs' law firms by The National Law Journal for the past six years. LINKEDIN CORP: Class Action Over Browsing Histories Dismissed ------------------------------------------------------------- Nick McCann at Courthouse News Service reports that a federal judge has dismissed a class action alleging that LinkedIn illegally disclosed browsing histories of users to advertisers. Lead plaintiffs Kevin Low and Alan Masand claimed in a 2011 that the Web site shared their browsing histories with "advertisers, Internet marketing companies, data brokers, web tracking companies, and other third parties." The complaint in San Jose, Calif., says LinkedIn shares users' profiles and their browsing history without permission. "This information gave the third parties the ability to correlate plaintiffs' actual identities with their broader Internet browsing histories," the amended complaint states. "Plaintiffs' browsing histories include visits to Web sites that they consider private, including political, religious, and health-related Web sites. Had they known of these practices and been given the choice, plaintiffs would not have disclosed this information to the third parties. Plaintiffs were embarrassed and humiliated by the disclosure of their personally identifiable browsing history. Moreover, plaintiffs' browsing histories and personal identities are valuable personal property with a market value." U.S. District Judge Lucy Koh largely dismissed the complaint last week. LinkedIn did not act as a "virtual filing cabinet" and did not violate the Stored Communications Act, the 27-page decision states. The plaintiffs failed to show that LinkedIn was responsible for "a serious invasion of a privacy interest," and they also could not prove the Web site was liable for breach of contract, false advertising, or any other claims related to the alleged use of their information by third parties. "Although plaintiffs theorize that third parties could de- anonymize this data, it is not clear that anyone has actually done so, or what information, precisely, these third parties have obtained," Judge Koh wrote. While the court dismissed eight claims with prejudice, it rejected LinkedIn's claims that the class lacked standing. The plaintiffs cannot amend their complaint. A copy of the Order Denying in Part and Granting in Part Defendant's Motion to Dismiss in Low v. LinkedIn Corporation, et al., Case No. 11-cv-01468 (N.D. Calif.), is available at: http://www.courthousenews.com/2012/07/16/linkedinorder.pdf MARRIOTT INT'L: To Seek Summary Judgment in "England" Suit ---------------------------------------------------------- Marriott International, Inc. intends to file a motion for summary judgment in the fall of 2012 in the class action lawsuit commenced by Robert J. England, et al., according to the Company's July 12, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 15, 2012. On January 19, 2010, several former Marriott employees (the "plaintiffs") filed a putative class action complaint against the Company and the Stock Plan (the "defendants"), alleging that certain equity awards of deferred bonus stock granted to the plaintiffs and other current and former employees for fiscal years 1963 through 1989 are subject to vesting requirements under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that are in certain circumstances more rapid than those set forth in the awards, various other purported ERISA violations, and various breaches of contract in connection with the awards. The plaintiffs seek damages, class attorneys' fees and interest, with no amounts specified. The action is proceeding in the United States District Court for the District of Maryland (Greenbelt Division) and Robert J. England, Dennis Walter Bond Sr. and Michael P. Steigman are the current named plaintiffs. The parties currently are engaged in limited discovery concerning the issues of statute of limitations and class certification. The Company anticipates filing a motion for summary judgment in the fall of 2012. The Company and the Stock Plan have denied all liability, and while the Company intends to vigorously defend against the claims being made by the plaintiffs, the Company can give no assurance about the outcome of this lawsuit. The Company currently cannot estimate the range of any possible loss to it because an amount of damages is not claimed, there is uncertainty as to whether a class will be certified and if so as to the size of the class, and the possibility of the Company's prevailing on its statute of limitations defense may significantly limit any claims for damages. MASTERCARD INC: Signs Interchange Fee Suits' Deal for $790-Mil. --------------------------------------------------------------- MasterCard Incorporated entered into a memorandum of understanding to settle for a total of $790 million the multidistrict litigation pending in New York relating to interchange fees, according to the Company's July 16, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. On July 13, 2012, MasterCard Incorporated (the "Company") and its operating subsidiary, MasterCard International Incorporated ("MasterCard International" and, together with the Company, "MasterCard"), entered into a Memorandum of Understanding (the "MOU") to settle the current U.S. merchant class litigation in the Eastern District of New York in case captioned MDL 1720. Separately, MasterCard has also reached an agreement in principle to settle all claims brought by the individual merchant plaintiffs. The MOU sets out a binding obligation to enter into a settlement agreement (the "Class Settlement Agreement") in the form attached to the MOU. The settlement is subject to: (1) the successful completion of certain appendices, (2) the successful negotiation of a settlement agreement with the individual merchant plaintiffs, (3) final court approval of the class settlement and (4) any necessary internal approvals for the parties. MasterCard's share of the cash portion of the settlements will total $790 million on a pre-tax basis. As a result, MasterCard will incur an additional $20 million pre-tax charge in its second quarter 2012 financial statements. MasterCard had previously recorded a $770 million charge in its fourth quarter 2011 financial statements. MasterCard's financial obligation was based upon the allocation of financial responsibility that was set out in the judgment and settlement sharing agreements that were executed in February 2011 by the Company, MasterCard International and, as applicable, Visa, Inc., Visa U.S.A. Inc., Visa International Service Association and MasterCard's customer banks that are parties thereto. Pursuant to those agreements, MasterCard's responsibility is for 12% of a global settlement of the matter. The $790 million obligation represents MasterCard's 12% share of the class settlement set forth in the Class Settlement Agreement of $6.05 billion, along with its 12% share of the cash portion settlement with the individual merchant plaintiffs. The Class Settlement Agreement includes the following terms, among others: * U.S. merchant class members will receive a 10 basis points reduction in default credit interchange rates for a period of eight months, which will be effected by MasterCard withholding this amount from U.S. issuers; * MasterCard would be required to modify its No Surcharge Rule ("NSR") to permit U.S. merchants to surcharge MasterCard credit cards, subject to certain limitations set forth in the Class Settlement Agreement. The specifics of the modification to the NSR and the circumstances in which surcharging could occur include, among other things, disclosure requirements for merchants who choose to surcharge, a cap on the level of the surcharge, and limitations on when a merchant can surcharge MasterCard credit cards if it accepts other brands that limit the ability of the merchant to surcharge; * MasterCard would agree to negotiate in good faith with any lawful merchant buying group in an effort to reach a commercially reasonable agreement; and * The settlements will provide MasterCard and its customer financial institutions with a broad release of all claims that were alleged, or could have been alleged by the merchants concerning MasterCard's interchange structure and merchant acceptance rules, as well as the future effect of MasterCard's existing rules and practices. Company Statement PURCHASE, New York -- July 13, 2012 -- MasterCard Incorporated (NYSE: MA) has agreed to a Memorandum of Understanding (MOU) to settle the current U.S. merchant class litigation. The MOU has been executed by all of the defendants -- which include MasterCard, Visa and a number of banks -- and the court-appointed class counsel for the merchants. Separately, MasterCard has reached an agreement in principle to settle all claims brought by the individual merchant plaintiffs. After execution of both settlement agreements and upon final approval of the class settlement by the court, MasterCard will have resolved all pending U.S. merchant litigations concerning the company's interchange structure and merchant acceptance rules. "Our decision to settle is based on our belief that MasterCard and our stakeholders are best served by an amicable resolution," said Noah Hanft, MasterCard's General Counsel and Chief Franchise Integrity Officer. "Although we have strong defenses to all claims, a settlement avoids years of litigation and uncertainties that are inherent in such cases. We believe that today's settlements should resolve all issues with the merchant community." MasterCard's share of the cash portion of the settlements will total $790 million on a pre-tax basis. As a result, the company will incur an additional $20 million pre-tax charge in its second quarter 2012 financial statements. MasterCard had previously recorded a $770 million charge in its fourth quarter 2011 financial statements. U.S. merchant class members will receive a 10 basis points reduction in credit interchange rates for eight months, which will be implemented by MasterCard withholding this amount from U.S. issuers. In addition, the settlement agreement requires that MasterCard negotiate in good faith with any lawful merchant buying group in an effort to reach a commercially reasonable agreement. MasterCard will also be required to make modifications to its No Surcharge Rule to allow U.S. merchants the ability to impose checkout fees on credit cards, subject to certain conditions that are intended to protect cardholders. Merchants have agreed to provide consumers with disclosures and limit the level and circumstances in which they may impose checkout fees on a cardholder which are designed to avoid unfair, unexpected or exorbitant fees. There are also provisions in the settlement that prevent MasterCard cardholders from being unfairly targeted with checkout fees relative to cardholders of competing credit card networks such as American Express, Discover and PayPal, should those networks enforce rules that restrict surcharging. State laws that may limit or prohibit surcharging are not impacted by this agreement. "We know that merchants care about their customers and anticipate that they will not impose checkout fees, particularly because the value merchants derive from card acceptance far exceeds their costs," said Hanft. "However, throughout the litigation and as a condition for resolution, the merchant plaintiffs sought a change to the current rule and we focused our efforts in settlement negotiations to ensure consumer safeguards were included." The settlements will provide MasterCard and its customer financial institutions with a broad release of all claims that were alleged, or could have been alleged by the merchants concerning MasterCard's interchange structure and merchant acceptance rules, as well as the future effect of MasterCard's existing rules and practices. In agreeing to the settlement, MasterCard in no way admits to any improper conduct with respect to the plaintiffs' allegations. All business and rule practice changes will occur after preliminary approval of the settlement, most likely in late 2012 or early 2013. The merchant litigations and the impact to MasterCard are described in more detail in the company's Annual Report on Form 10-K for the year-ended December 31, 2011. About MasterCard MasterCard (NYSE: MA), http://www.mastercard.com/,is a global payments and technology company. The Company operates the world's fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard's products and solutions make everyday commerce activities -- such as shopping, traveling, running a business and managing finances -- easier, more secure and more efficient for everyone. MEAT & LIVESTOCK: Live Cattle Exporters Mull Class Action --------------------------------------------------------- Colin Bettles, writing for Stock & Land, reports that Meat and Livestock Australia (MLA) and LiveCorp are the targets of a potential class action from live cattle exporters seeking financial compensation for the suspension of the trade to Indonesia last year. The claim was detailed in an article in the Law Society Journal's July 2012 edition but it didn't specify the amount being sought or name the exporters making the claim. In the article, Norman Hunt of Hunt Partners said exporters are considering a case against the two industry bodies, alleging they "knew of the inhumane treatment of animals in Indonesian abattoirs". He said MLA and LiveCorp did nothing to remedy the situation or let their levy paying members know that the "time bomb was ticking". The resultant export ban left farmers with several issues, he said, including lost income after they had to dump cattle onto the Australian market at discount prices and endure a subsequent fall in property prices, with live cattle exports to Indonesia having fallen "drastically". Mr. Hunt pointed to the dramatic and emotive reaction to the ABC Four Corners May 30 program which sparked the month-long trade suspension by the Gillard government on July 6. He said the event was a "huge failure" of the statutory funded bodies MLA and LiveCorp, highlighting a report published in May 2010 on the Indonesian trade which depicted, "every inhumane export practice which Four Corners used as their template/script, going to every abattoir discussed". "The federal government had seen the report and was urging MLA/LiveCorp to fix it, which, when the "time bomb" exploded, they were able to do in just a couple of months," he wrote, adding "It gets worse". "In 2009, MLA carried out a review of the levies struck and set aside $186,000 to deal with animal welfare issues and $750,000 to deal with media responses. "They knew something might happen and were prepared to spend more on media spin that fixing the problem -- a sad illustration of priorities. "In my view, there is a very arguable case that the directors of MLA and LiveCorp breached their duties as directors of corporations especially set up to look after live cattle exporters' interests. "The farmers felt, to some extent, that the public outcry was aimed at them but . . . it is also overlooked that farmers are close to their animals and do not tolerate mistreatment on their own properties. " MLA said they were aware of Mr. Hunt's claims but no legal notice has been served upon them in relation to the matter. An MLA spokesperson said they would focus on continuing to support the trade through training of supply chains to help them comply with the new government regulated Exporter Supply Chain Assurance System (ESCAS). The Australian Livestock Exporters' Council declined to comment. A spokesperson for Agriculture Minister Joe Ludwig said it would be inappropriate to comment on any matters that may be subject to action before the courts. Shadow Agriculture Minister John Cobb said he would not be drawn into a discussion about whether such a legal claim would be successful, but said it was "drawing a long bow" to suggest MLA or LiveCorp knew about inhumane treatment of Australian animals prior to the ban and did nothing about it. He said "some things become obvious after the fact". "I'm not sure what taking out a class action against a statutory body is going to achieve. "It's important to rebuild the business and restore confidence that producers lost when the Labor government made a knee-jerk reaction to shut the trade down." The potential class action against MLA and LiveCorp contrasts with two other legal challenges directed against the federal government for the snap suspension, listed under contingent liabilities in this year's budget papers. One claim is being handled by lawyer Trent Thorne of Queensland legal firm McCullough Robertson on behalf of three clients and falls under the scheme for Compensation for Detriment caused by Defective Administration (CDDA). The CDDA can be applied if a Minister, or an authorized officer, forms an opinion that an official of an agency acting in the course of their duty has directly caused the applicant to suffer detriment as a result of defective administration. Another class action on behalf of 21 individual producers and live exporters is being handled by law firm Minter Ellison. The basis of that claim is understood to center on trade suspension being a "negligent decision" that lacked proper consultation between the Minister, the Department and other senior government ministers. In commenting on the new claim, Mr. Thorne said it was "way off the mark" to point the finger and blame MLA and LiveCorp for any losses caused by the trade ban. He said it wasn't MLA's job to be an "animal welfare cop" in live export markets where no legal jurisdiction exists. Ultimately, Minister Ludwig made a decision to shut down the trade, not the two industry bodies, he said. "To say that MLA or LiveCorp "knew" what was happening is a false premise to start with," he said. "I struggle to see what case there is here and the finger is being pointed at the wrong party." Mr. Thorne said MLA's charter was to make incremental animal welfare improvements in Indonesia, having achieved many positive outcomes over 10 years, which animal welfare groups overlooked. He said animal welfare conditions had improved from the archaic conditions that MLA first started working with. Mr. Thorne said the 2010 report compiled by respected veterinarian Dr. Ivan Caple -- referred to in Mr. Hunt's claim -- looked at conditions in the Indonesian market and referred to animal welfare issues, giving an overall positive finding, while highlighting some issues. He said the government was aware of any issues via that export report and were in a position to act appropriately if they had concerns. MICROSOFT ONLINE: Sued for Overcharging Cost-Per-Click Ads ---------------------------------------------------------- Courthouse News Service reports that Microsoft overcharged for its adCenter "cost-per-click Internet advertising center," a business claims in a federal class action. A copy of the Complaint in Lane's Gifts and Collectibles, LLC v. Microsoft Online, Inc., Case No. 12-cv-01181 (W.D. Wash.), is available at: http://www.courthousenews.com/2012/07/16/Microsoft.pdf The Plaintiff is represented by: Bradley P. Thoreson, Esq. FOSTER PEPPER PLLC 1111 Third Avenue, Suite 3400 Seattle, WA 98101-3299 Telephone: (206) 447-4400 E-mail: thorb@foster.com - and - Michael B. Angelovich, Esq. Brad E. Seidel, Esq. Andrew G. Pate, Esq. NIX, PATTERSON & ROACH, LLP 3600 N. Capital of Texas Highway Building B, Suite 350 Austin, TX 78746 Telephone: (512) 328-5333 - and - Peter A. Muhic, Esq. Mark K. Gyandoh, Esq. KESSLER TOPAZ MELTZER & CHECK, LLP 280 King of Prussia Road Radnor, PA 19087 Telephone: (610) 667-7706 E-mail: pmuhic@ktmc.com mgyandoh@ktmc.com MILLER ENERGY: Awaits Ruling on Bid to Dismiss Securities Suit -------------------------------------------------------------- Miller Energy Resources, Inc. is awaiting a court decision on its motion to dismiss a consolidated securities class action lawsuit pending in Tennessee, according to the Company's July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended April 30, 2012. In August 2011, several purported class action lawsuit were filed against the Company in the United States District Court for the Eastern District of Tennessee. The lawsuits made similar claims, and have been consolidated into one case, styled In re Miller Energy Resources, Inc. Securities Litigation. The lawsuit names the Company, along with several of its current and former executive officers, Scott Boruff, Paul Boyd, Ford Graham, David Hall, and Deloy Miller, as defendants. The Plaintiffs allege two causes of action against the defendants: (1) violation of Section 10(b) and Rule 10b-5 of the Exchange Act, (2) violation of Section 20(a) of the Exchange Act. The case seeks money damages against the Company and the other defendants, and payment of the Plaintiffs' attorney's fees. The Company has filed a Motion to Dismiss the case. Given the current stage of the proceedings in this case, the Company says it currently cannot assess the probability of losses, or reasonably estimate the range of losses, related to this matter. MOUNTAIN STATE: Sued for Misrepresenting DMS Program ---------------------------------------------------- Courthouse News Service reports that a federal class action claims Mountain State University, a private school, used misrepresentations to lure students into its online Diagnostic Medical Sonography program. A copy of the Complaint in Mullis v. Mountain State University, Case No. 12-cv-03158 (S.D. W. Va.), is available at: http://www.courthousenews.com/2012/07/16/OnlineCollege.pdf The Plaintiff is represented by: Harry F. Bell, Jr., Esq. Jonathan W. Price, Esq. THE BELL LAW FIRM, PLLC 30 Capitol Street P.O. Box 1723 Charleston, WV 25326-1723 Telephone: (304) 345-1700 E-mail: hfbell@belllaw.com jwprice@belllaw.com - and - Thomas H. Howlett, Esq. Dean M. Googasian, Esq. THE GOOGASIAN FIRM, P.C. 6895 Telegraph Road Bloomfield Hills, MI 48301-3138 E-mail: thowlett@googasian.com dgoogasian@googasian.com NAT'L FOOTBALL: Three Florida Football Players Join Class Action ---------------------------------------------------------------- Ira Schoffel, writing for Tallahasse.com, reports that claiming that the National Football League hid and misrepresented the long- term effects of concussion-related injuries, three former Florida State football players are taking part in a class-action lawsuit against the league. Carl Simpson, Corey Fuller and Dexter Carter are among 19 plaintiffs in the suit, which was filed on July 12 by Louisiana- based attorney Darriel C. McCorvey. Their case is one of many lawsuits being filed by former NFL players around the country, and like the others will be consolidated into one federal class action that has been assigned to the Eastern District Court in Philadelphia. Mr. Simpson, a defensive lineman, played six years in the NFL (1993-98). Mr. Fuller, a defensive back, played 10 seasons. And Carter, a running back, played seven years. PCS EDVENTURES!: Shareholder Suit Settlement Paid in February ------------------------------------------------------------- PCS Edventures!.com, Inc. disclosed in its July 12, 2012, Form 10- K filing with the U.S. Securities and Exchange Commission for the year ended March 31, 2012, that all settlement funds, under its $665,000 settlement of a shareholder class action lawsuit, were fully paid as of February 29, 2012. The Company, along with its former chief executive officer and former chief financial officer, was named in a class action lawsuit (Niederklein v. PCS Edventures!.com, Inc., et al., U.S. District Court for the District of Idaho, Case 1:10-cv-00479-CWD). The class action was brought on behalf of shareholders who purchased shares of the Company's common stock during the period between March 28, 2007, and August 15, 2007. In September, the Company announced that it had entered into an agreement to settle the class action lawsuit, subject to further proceedings and approval by the Court. While the Company denies the allegations made in the class action lawsuit, the settlement was entered to eliminate the burden and expense of further litigation. On October 5, 2011, the Court granted preliminary approval to the settlement, and approved the notices that were sent to potential class members. At the Settlement Fairness Hearing on February 22, 2012, the Court gave final approval to the settlement and entered the Final Judgment and Order of Dismissal With Prejudice. The class action was settled for $665,000 with the Company's insurance carrier providing most of the settlement funds. In accordance with the Court ordered settlement, all settlement funds were paid on or before February 29, 2012. REYNOLDS AMERICAN: Appeals Ct. Revives Camel Cash Class Action -------------------------------------------------------------- Dan Levine, writing for Reuters, reports that an appeals court on July 13 revived a potential class action lawsuit against Reynolds American Inc. over the cancellation of its "Camel Cash" customer loyalty program. Subsidiary R.J. Reynolds Tobacco Company urged consumers to buy Camel cigarettes, save Camel Cash certificates included in the packs, enroll in the program and redeem the certificates for merchandise featured in RJR catalogs, according to the opinion. RJR ceased redeeming the certificates in 2006, making the unredeemed Camel Cash worthless. Ten individuals who joined the program sued, and a lower court judge dismissed the case. However, the U.S. Circuit Court of Appeals for the Ninth Circuit on July 13 revived the litigation, saying RJR must defend some claims including breach of contract. The 9th Circuit sent the case back to a federal court in Los Angeles for further proceedings. An RJR representative could not immediately be reached for comment. The case in the 9th Circuit is Amanda Sateriale et al., individually and on behalf of all others similarly situated v. R.J. Reynolds Tobacco Company, 11-55057. SRS LABS: Signs MOU to Settle Merger-Related Suit in California --------------------------------------------------------------- SRS Labs, Inc. entered into a memorandum of understanding to settle a merger-related class action lawsuit filed in California, according to the Company's July 16, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. The Company entered into an Agreement and Plan of Merger and Reorganization, dated as of April 16, 2012 (as that agreement may be amended in accordance with its terms, the "Merger Agreement"), by and among SRS, DTS, Inc., DTS Merger Sub, Inc., a wholly owned subsidiary of DTS, and DTS LLC, a wholly owned subsidiary of DTS (the "Merger Proposal"), which provides for a merger in which SRS will become a wholly owned subsidiary of DTS (the "Merger"). Two putative class action lawsuits were filed by purported SRS stockholders challenging the Merger. The first putative class action lawsuit, captioned Williams v. SRS Labs, Inc., et al. Case No. 30-2012-00565660-CU-BTCXC, was filed in the Superior Court of the State of California, County of Orange (the "California Court"), purportedly on behalf of the public holders of SRS common stock against SRS, DTS and the members of the SRS board of directors (collectively, the "Defendants"), alleging, among other things, that the directors of SRS, aided and abetted by SRS and DTS, breached their fiduciary duties to the SRS stockholders in connection with the proposed Merger (the "California Litigation") and seeking, among other things, to enjoin the Defendants from completing the Merger pursuant to the terms of the Merger Agreement absent implementation of a process to obtain a potentially higher price and/or to require additional disclosures by SRS. The second putative class action lawsuit, captioned Fong v. SRS Labs, Inc., et al. Case No, 7481-VCN, was filed in the Court of Chancery of the State of Delaware (the "Delaware Court") purportedly on behalf of the public SRS stockholders against DTS, DTS Merger Sub, Inc., DTS LLC, SRS and the members of the SRS board of directors, alleging, among other things, that the directors of SRS, aided and abetted by the other defendants, breached their fiduciary duties to the SRS stockholders in connection with the proposed Merger (the "Delaware Litigation") and seeking, among other things, to enjoin the defendants from completing the Merger pursuant to the terms of the Merger Agreement absent implementation of any and all methods to obtain a potentially higher price for stockholders or, if the Merger is consummated, to rescind the Merger and award actual and punitive damages. The Delaware Litigation has been stayed by the Delaware Court pending the resolution of the California Litigation, and upon entry of a final order in the California Litigation, the plaintiff in the Delaware Litigation will seek dismissal of the Delaware Litigation. After filing the California Litigation and engaging in certain discovery, plaintiff's counsel indicated to Defendants' counsel that they believed additional disclosures should be made available to the SRS stockholders. On July 16, 2012, the Defendants and the plaintiff in the California Litigation entered into a memorandum of understanding (the "MOU"), agreeing in principle to settle the California Litigation in exchange for Defendants' agreement to make certain supplemental disclosures. The MOU contemplates that the parties will prepare a definitive stipulation of settlement, which will be subject to court approval. If approved by the California Court, it is anticipated that the settlement will result in a release of the Defendants from all claims that were or could have been asserted challenging any aspect of or otherwise relating to the Merger, the Merger Agreement or the disclosures made in connection therewith, and that the California Litigation will be dismissed with prejudice. Pursuant to the terms of the MOU, SRS has agreed to make certain supplemental disclosures regarding the Merger in a supplement to the Proxy Statement. In return, the plaintiff has agreed to the dismissal of the California Litigation with prejudice and to withdraw and/or refrain from filing any and all motions seeking to enjoin or otherwise challenging the Merger. In addition, the MOU contemplates that plaintiff's counsel will petition the California Court for an award of attorneys' fees and expenses in an amount not to exceed $400,000, to be paid by SRS or its insurers or successors. There can be no assurance that the parties will ultimately reach agreement on a definitive stipulation of settlement or that the California Court will approve the proposed settlement, even if the parties were to enter into such stipulation of settlement. In such event, the proposed settlement as contemplated by the MOU may be terminated. The settlement will not affect the consideration to be paid to SRS stockholders in connection with the proposed Merger or the timing of the special meeting of SRS stockholders scheduled for Friday, July 20, 2012, at 10:00 a.m. (Pacific Time), at the Company's principal executive offices located at 2909 Daimler Street, Santa Ana, California 92705, to consider and vote upon a proposal to adopt the Merger Agreement, among other things. The Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing or liability with respect to the facts and claims asserted, or which could have been asserted, in the California Litigation, including that they have committed any violations of law or breaches of fiduciary duty, aided and abetted any violations of law or breaches of fiduciary duty, acted improperly in any way or have any liability or owe any damages of any kind to the plaintiffs or to the purported class, and specifically deny that any further supplemental disclosure is required under any applicable rule, statute, regulation or law or that the directors of SRS failed to maximize stockholder value by entering into the Merger Agreement. The settlement contemplated by the MOU is not, and should not be construed as, an admission of wrongdoing or liability by any Defendant. However, to avoid the risk of delaying the Merger, and to provide additional information to the SRS stockholders at a time and in a manner that would not cause any delay of the Merger, the Defendants agreed to the settlement. The parties considered it desirable that the California Litigation be settled to avoid the substantial burden, expense, risk, inconvenience and distraction of continued litigation and to fully and finally resolve the California Litigation. THERABIOGEN INC: In Talks to Settle "Conde" Suit for $21,000 ------------------------------------------------------------ TheraBiogen, Inc. disclosed in its July 16, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended February 29, 2012, that it is negotiating a settlement for $21,000 to resolve a class action lawsuit filed by Jimmy Conde. The Company has been sued in California in a purported class action regarding allegations that the product packaging should be modified. The Company says it has reviewed the packaging with Registrar Corp., which helps businesses comply with U.S. FDA Drug registration and listing requirements by providing Registration, U.S. Agent and Compliance Assistance for U.S. and Non-U.S. Companies in the Drug Industry. Registrar Corp's Drug Labeling and Ingredient Review service helps companies determine their drug's likely classification and compliance with applicable labeling requirements. All products packaging and labeling was reviewed by and received approval from Registrar before going to market. Mr. Jimmy Conde is the plaintiff and alleges that the Company's product's package labeling is inadequate. The Company says that even though it believes the lawsuit is without merit, it is attempting to negotiate a modest settlement that may include minor additions to the packaging labels. The litigation has been moved to Federal Court and the Company is negotiating a settlement agreement in the amount of $21,000 which is fully dependent upon the Company's ability to pay this amount, the agreement of the parties and approval by the Court. No assurances can be given as to the outcome of this litigation or its impact upon the Company or its business. THOMAS M. COOLEY: Kurzon LLP Files Defamation Suit in New York -------------------------------------------------------------- On July 16, 2012, Kurzon LLP commenced an action in New York Supreme Court, New York County against Thomas M. Cooley Law School and its Dean and President, Don LeDuc for false and defamatory statements made about the Firm. Cooley sued the Firm in July 2011 as part of an effort to stifle attorney David Anziska's investigation of Cooley's post-graduate employment statistics. Thereafter, in a misguided effort to prevent the filing of a class action lawsuit against it, Cooley made false and defamatory statements to the public about the Firm through its Dean and President. Managing Partner of Kurzon LLP, Jeff Kurzon -- Jeff@Kurzon.com -- said, "While most law schools around the country are committing themselves to greater transparency and helping students find post- graduate employment, Cooley is spending money on lawyers to harass opponents with 'defamation' actions based on false allegations." Kurzon further opined, "Through Cooley's malicious and careless actions, the Firm has been defamed and we are enforcing our rights. Hopefully this action will help set the record straight and Cooley will pay for the harm that it caused." Kurzon LLP is a New York based commercial litigation and corporate transactional law firm. UNI-DIG: Clinton Township Files Class Action Over Stench -------------------------------------------------------- Christina Hall, writing for Detroit Free Press, reports that Clinton Township filed a class action against Uni-Dig. Reduce the smell of decomposing yard waste, or stop composting. That's what Clinton Township is hoping a Macomb County Circuit Court judge will order in a lawsuit the township filed against Uni-Dig, a dirt and recycling business on Quinn Road. "What we're requesting is public abatement of this nuisance, the stench and things of that sort," township attorney Charles Towner said. The complaint, filed July 3, also states that the site -- zoned light industrial -- does not allow for composting operations under the township ordinance. It states that Uni-Dig has not requested or received approval to conduct a composting operation by special land use or other appropriate means. Renee Michaels, manager at Uni-Dig, said she has not been served with the lawsuit and could not comment. Since last year, when complaints started to pour in, Uni-Dig has said that it was doing its best to control any smell from its property and that other companies in the area could be contributing to any odor. According to the lawsuit, the township has received hundreds of complaints from residents and local businesses of noxious odors emanating from the site. A few residents have filed civil lawsuits against Uni-Dig seeking class-action status -- which attorney Josh Lushnat said was certified June 4 in one of the cases. He said the class-action status is to include residents and businesses within a 3/4-mile radius of Uni-Dig. "The goal is to bring some relief to the neighborhood," Mr. Lushnat said. "Allow these people to enjoy their residences and not worry about being outside that day and have full access to their property." Last year, the township cited Uni-Dig in district court for failing to eliminate the smell. Uni-Dig pleaded no contest to misdemeanor blight, paid an $895 fine and was to abate the odor. This year, it pleaded no contest to contempt of a court order for not doing so and paid a $300 fine, according to district court records in the township's lawsuit. According to the company's reports included in the lawsuit, Uni- Dig responded to complaints by screening and spraying odor control and not loading trucks. Township Supervisor Bob Cannon said officials don't want to shut down Uni-Dig, but want to get compliance. He said in previous years, Uni-Dig could abate the smell if a complaint came in. But, he said, there is more yard waste than before and when the wind blows, the odor spreads. The Michigan Department of Environmental Quality has cited Uni-Dig for having too much yard waste at its site. Uni-Dig sought a variance to allow more yard waste at the property, where MDEQ has not confirmed odor violations. MDEQ denied the variance request. VISA INC: Signs MOU to Settle Interchange Fee Suits for $4-Bil. --------------------------------------------------------------- Visa Inc. entered into a memorandum of understanding to settle for approximately $4 billion a multidistrict litigation over interchange fees, according to the Company's July 16, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. On July 13, 2012, Visa Inc. (the "Company"); its wholly owned subsidiaries Visa U.S.A. Inc. ("Visa USA") and Visa International Service Association; MasterCard Incorporated; MasterCard International Incorporated; various U.S. financial institution defendants; and the Class Plaintiffs signed a memorandum of understanding (the "MOU") which, subject to certain conditions, obligates the parties to enter into a settlement agreement in the form attached to the MOU (together with the MOU, the "Settlement Agreement") to resolve the claims of the class plaintiffs (the "Class Plaintiffs") in the matter styled In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, No. 05-MD-1720 (JG) (JO) (the "Multi-District Litigation"). The claims originally were brought by a class of U.S. retailers in 2005. The settlement agreement for the Class Plaintiffs includes, among other terms: * A comprehensive release from participating class members for liability arising out of claims asserted in the litigation, and a further release to protect against future litigation regarding interchange and the other U.S. rules at issue in the Multi-District Litigation. * Settlement payments from all defendants in the amount of approximately $6.05 billion, with the Company's share of the settlement representing approximately $4 billion. The Company's share will be paid from the previously funded litigation escrow account established pursuant to the Company's retrospective responsibility plan (the "Retrospective Responsibility Plan"). More information on the Retrospective Responsibility Plan is available in Company's filings with the SEC. * Distribution to class merchants of an amount equal to 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time. This effective reduction will be distributed by a process designed to ensure that all class retailers, large and small, are able to receive the reduction. The eight month period for the reduction would begin within 60 days after completion of the court-ordered period during which individual class members may opt out of this settlement, or approximately mid-2013. * Modifications to the Company's rules to permit retailers to impose a surcharge on credit transactions subject to a cap and a level playing field with other general purpose card competitors. The rule changes on surcharging likely will be implemented in early 2013. * Agreement that the Company will meet with merchant buying groups that seek to negotiate interchange rates collectively (e.g. independent drug stores). The Company retains discretion to accept or reject a proposal based on whether the Company believes it is commercially reasonable. A final settlement agreement is subject to conditions, including (a) requisite corporate approvals, (b) reaching agreement on certain appendices to the Settlement Agreement regarding class notice, claims, and other procedures, (c) reaching negotiated settlements with the individual plaintiffs whose claims were consolidated with the Multi-District Litigation for pre-trial proceedings (the "Individual Plaintiffs'), and (d) court approval. There can be no assurances that negotiated settlements can be reached with the Individual Plaintiffs or that the other conditions will be satisfied. Individual Claims The Company and the Individual Plaintiffs in the Multi-District Litigation have reached an agreement in principle to resolve the Individual Plaintiffs claims against the Company. The agreement in principle must be reduced to a written settlement agreement that is agreeable to all parties, and that settlement agreement will be subject to customary conditions, including all requisite corporate approvals. Until this agreement in principle is reduced to a written settlement agreement and the appropriate conditions are satisfied, no assurance can be provided that the Company will be able to resolve the Individual Plaintiffs claims as contemplated by the agreement in principle. For the quarter ending June 30, 2012, the Company intends to record a litigation charge of approximately $4.1 billion, which will increase its total FAS 5 reserve for the litigation covered by the Retrospective Responsibility Plan from $285 million to approximately $4.4 billion, to reflect the Class Plaintiffs Settlement Agreement and management's current estimate to resolve the Individual Plaintiffs' claims. As previously disclosed, on February 7, 2011, the Company entered into the Omnibus Agreement Regarding Interchange Litigation Judgment Sharing and Settlement Sharing, among the Company, Visa U.S.A., Visa International, MasterCard Incorporated, MasterCard International Incorporated and various financial institutions (the "Omnibus Agreement"). Company Statement SAN FRANCISCO, California -- July 13, 2012 -- Visa (NYSE: V), MasterCard and U.S. financial institution defendants have signed a memorandum of understanding to enter into a settlement agreement to resolve the Class Plaintiffs' claims in the multi-district interchange litigation (MDL). The claims originally were brought by a class of U.S. retailers in 2005. Visa also has reached an agreement in principle to resolve the claims brought against Visa by a group of individual retailers (the Individual Plaintiffs) in the same MDL litigation. The proposed settlement payments for both the Class and Individual claims would be approximately $6.6 billion, of which Visa's share would represent approximately $4.4 billion. Visa's share will be paid from the litigation escrow account established pursuant to Visa's Retrospective Responsibility Plan. More information on the plan is available in the Company's filings with the Securities and Exchange Commission at http://www.sec.gov/. The settlement agreement with the Class Plaintiffs includes, among other terms: * A comprehensive release from participating class members for liability arising out of claims asserted in the litigation, and a further release to protect against future litigation regarding interchange and the other U.S. rules at issue in the MDL litigation. * Distribution to class merchants of an amount equal to 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time. This effective reduction will be distributed by a process designed to ensure that all class retailers, large and small, are able to receive the reduction. The eight month period for the reduction would begin within 60 days after completion of the court-ordered period during which individual class members may opt out of this settlement, or approximately mid-2013. * Modifications to Visa's rules to permit retailers to impose a surcharge on credit transactions subject to a cap and a level playing field with other general purpose card competitors. The rule changes on surcharging likely would be implemented in early 2013. * Agreement that Visa will meet with merchant buying groups that seek to negotiate interchange rates collectively (e.g., independent drug stores). Visa retains discretion to accept or reject a proposal based on whether the Company believes it is commercially reasonable. For the quarter ending June 30, 2012, Visa intends to record a litigation charge of approximately $4.1 billion, which will increase its total FAS 5 reserve for the litigation covered by the Retrospective Responsibility Plan from $285 million to approximately $4.4 billion, to reflect the Class Plaintiffs' Settlement Agreement and management's current estimate to resolve the Individual Plaintiffs' claims. Additional information about these settlements can be found on Form 8-K filed with the U.S. Securities and Exchange Commission and available at http://www.sec.gov/,as soon as accepted and processed by the SEC. "We believe settling this case is in the best interests of all parties," said Joseph W. Saunders, Chairman and Chief Executive Officer of Visa Inc. "We are comfortable with the terms, which we do not anticipate will impact our current guidance. Visa is well positioned to help drive the migration to electronic payments in the U.S. and globally." Consistent with commitments Visa made at the time of its restructuring, the settlements are subject to approval by Visa USA voting members representing two-thirds of membership proportion. "This agreement should remove the distraction of litigation for all parties," said Joshua R. Floum, General Counsel of Visa Inc. "We will go forward with a focus on helping retailers grow their businesses and providing them with efficient and valuable payment options." Visa remains in a "quiet period" which will extend until the Company's fiscal third quarter 2012 earnings are released on July 25, 2012. About Visa Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks -- VisaNet -- that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit http://www.corporate.visa.com/. VISA INC: Penalties Under Global Settlement Add Up to $7.25BB ------------------------------------------------------------- Agence France-Presse reports that under the settlement to resolve the seven-year-old case against credit card giants Visa and MasterCard for allegedly fixing card-use fees, the two will have to cut their so-called 'swipe' fees for eight months. This could give merchants $1.2 billion in relief on top of $6 billion for past damages, says the report. They will have to allow merchants to impose a surcharge on credit card transactions, subject to a cap. Law firm Robins, Kaplan, Miller & Cires, which represented about seven million merchants in the suit, said that penalties for the two and other card-issuing banks added up to $7.25 billion -- $6.05 billion for past damages and the $1.2 billion for relief. Also involved in the settlement are card-issuing banks including JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Capital One and others. Visa said its total payouts would be $4.4 billion, which appeared to include settlements from separate individual suits over the same issue that were not part of the class-action suit. "The reforms achieved by this case and in this settlement will help shift the competitive balance from one formerly dominated by the banks which controlled the card networks to the side of merchants and consumers," said Craig Wildfang, lead Robins, Kaplan lawyer in the case for the merchants. But American Bankers Association president Frank Keating blasted the idea saying, "Let's be clear -- retailers, not consumers, benefit from the resolution," he said. "This settlement even provides merchants with the ability to impose 'checkout fees' on customers just for using credit cards." WARNER MUSIC: Parties to Confer in August on Class Cert. Issue -------------------------------------------------------------- Parties in a consolidated class action lawsuit alleging conspiracy in the pricing of digital music downloads will confer at the end of August 2012, on a class certification briefing schedule, for a determination by the District Court as to whether class treatment is appropriate, according to Warner Music Group Corp.'s May 15, 2012 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarterly period ended March 31, 2012. On December 20, 2005 and February 3, 2006, the Attorney General of the State of New York served the Company with requests for information in connection with an industry-wide investigation as to the pricing of digital music downloads. On February 28, 2006, the Antitrust Division of the U.S. Department of Justice served the Company with a Civil Investigative Demand, also seeking information relating to the pricing of digitally downloaded music. Both investigations were ultimately closed, but subsequent to the announcements of the investigations, more than thirty putative class action lawsuits were filed concerning the pricing of digital music downloads. The lawsuits were consolidated in the Southern District of New York. The consolidated amended complaint, filed on April 13, 2007, alleges conspiracy among record companies to delay the release of their content for digital distribution, inflate their pricing of CDs and fix prices for digital downloads. The complaint seeks unspecified compensatory, statutory and treble damages. On October 9, 2008, the District Court issued an order dismissing the case as to all defendants, including the Company. However, on January 12, 2010, the Second Circuit vacated the judgment of the District Court and remanded the case for further proceedings and on January 10, 2011, the Supreme Court denied the defendants' petition for Certiorari. Upon remand to the District Court, all defendants, including the Company, filed a renewed motion to dismiss challenging, among other things, plaintiffs' state law claims and standing to bring certain claims. The renewed motion was based mainly on arguments made in defendants' original motion to dismiss, but not addressed by the District Court. On July 18, 2011, the District Court granted defendants' motion in part, and denied it in part. Notably, all claims on behalf of the CD-purchaser class were dismissed with prejudice. However, a wide variety of state and federal claims remain, for the class of Internet Music purchasers. The parties have filed amended pleadings complying with the court's order, and the case is proceeding into discovery, which was scheduled to be substantially completed by May 31, 2012. The parties are scheduled to confer at the end of August 2012, on a class certification briefing schedule, for a determination by the District Court as to whether class treatment is appropriate. The case will proceed into discovery, based on a schedule to be determined by the District Court. The Company intends to defend against these lawsuits vigorously, but is unable to predict the outcome of these suits. Regardless of the merits of the claims, this and any related litigation could continue to be costly, and divert the time and resources of management. WARNER MUSIC: Suits Over Digital Music Sales Royalties Pending -------------------------------------------------------------- Putative class action lawsuits against Warner Music Group Corp. over improper calculation of royalties from sales of digital music remain pending, according to the Company's May 15, 2012 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarterly period ended March 31, 2012. Five putative class action lawsuits have been filed against the Company in Federal Court in the Northern District of California. The lawsuits, which were brought by various recording artists, all allege that the Company has improperly calculated the royalties due them for certain digital music sales under the terms of their recording contracts. The named plaintiffs purport to raise these claims on their own behalf and, as a putative class action, on behalf of other similarly situated artists. Plaintiffs base their claims on a previous ruling that held another recorded music company had breached the specific recording contracts at issue in that case through its payment of royalties for music downloads and ringtones. In the wake of that ruling, a number of recording artists have initiated suits seeking similar relief against all of the major record companies. Here too, plaintiffs seek to have the interpretation of the contracts in that prior case applied to their different and separate contracts. On April 10, 2012, the Company filed a motion to dismiss various claims in one of the lawsuits, with the intention of filing similar motions in the remaining suits, on the various applicable response dates. Meanwhile, certain plaintiffs' counsel moved to be appointed as interim lead counsel, and other plaintiffs' counsel moved to consolidate the various actions. On April 23, 2012, the court issued an order setting out a more orderly process for dealing with the various cases. It set May 24, 2012 for a Case Management Conference for all five actions, and set the same day as the hearing date for the Plaintiffs' various outstanding motions. In addition, the Court removed the Company's motion to dismiss from the calendar, with new dates to be set on or after May 24, 2012. No other dates have been set in the litigation. The Company intends to defend against these lawsuits vigorously, but is unable to predict the outcome of these suits. Regardless of the merits of the claims, this and any related litigation could continue to be costly, and divert the time and resources of management. WARNER MUSIC: Awaits Approval of Settlement in "Cournoyer" Suit -------------------------------------------------------------- Warner Music Group Corp. is awaiting a court approval of a settlement entered in a class action lawsuit captioned Cournoyer v. Warner Music Group Corp. et al., according to the Company's May 15, 2012 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarterly period ended March 31, 2012. The Company awaits a decision on the application for approval by the Supreme Court for the State of New York of the previously disclosed settlement of the claims filed against, inter alia, the Company and its directors in 2011 on behalf of a class of the Company's shareholders in the action entitled Cournoyer v. Warner Music Group Corp. et al., Index No. 651367/2011 (the "Cournoyer Action"). The Cournoyer Action, as well as two related actions, were brought in connection with the Plan of Merger, dated as of May 6, 2011, (the "Merger Agreement"), by and among the Company, AI Entertainment Holdings LLC (formerly Airplanes Music LLC), a Delaware limited liability company ("Parent") and an affiliate of Access Industries, Inc. ("Access"), and Airplanes Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), on July 20, 2011 (the "Closing Date"), Merger Sub merged with and into the Company with the Company surviving as a wholly owned subsidiary of Parent (the "Merger"). The settlement did not involve any monetary payment to the class of shareholders. Instead, the Company agreed to publicly disclose additional information about the Merger in a filing that it made with the SEC on June 13, 2011. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Noemi Irene A. Adala, Joy A. Agravante, Ivy B. Magdadaro, Psyche A. Castillon, Julie Anne L. Toledo, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter Chapman at 240/629-3300. * * * End of Transmission * * *