/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/120730.mbx C L A S S A C T I O N R E P O R T E R Monday, July 30, 2012, Vol. 14, No. 149 Headlines AFFINIA GROUP: Still Awaits Ruling on Price Fixing Lawsuit Deal AMERICAN APPAREL: Bid to Dismiss Amended Shareholder Suit Pending ASTORIA FINANCIAL: Unit Still Defends NY Suit On Overdraft Fees BUONA VITA: FSIS Lists Stores That Received Recalled Products CARGILL MEAT: More Stores Received Recalled Ground Beef Products CENTURY ALUMINUM: Appeal From Stockholder Suit Dismissal Pending CENTURY ALUMINUM: Suits Over Retiree Benefits Still Stayed CHINA ADVANCED: Still Defends Stockholder Class Suits CHOICE MANUFACTURING: Judge Dismisses Class Action CITIBANK NA: Accused of Making Unnecessary Third Party Fees DUKE ENERGY: Kessler Topaz Files Class Action in North Carolina EASTMAN CHEMICAL: Reaches MOU in Solutia-Related Class Lawsuit ELECTRONIC ARTS: Settles Antitrust Class Action for $27 Million FRIENDFINDER NETWORKS: Securities Suit Dismissal Bid Pending GENON ENERGY: Being Sold to NRG for Too Little, Suit Claims GENVEC INC: Securities Suit in Maryland Still Pending GOLFSMITH INT'L: Signs MOU to Settle Two Merger-Related Suits HERSHEY COMPANY: Faces Overtime Class Action in California IMH FINANCIAL: Still Awaits Court OK of Unitholders' Suit Deal JBI INC: Securities Class Suit Still Pending JPMORGAN CHASE: Grant & Eisenhofer Files Class Action in N.Y. LIME ENERGY: Lin Law Firm Files Securities Class Action LOUISIANA CITIZENS: Aug. 3 Class Action Status Conference Set MARICOPA COUNTY, AZ: Sheriff Arpaio Takes Stand in Immigrant Suit MAXFIELD & OBERTON: Sued by CPSC Over Buckyballs/Buckycube Toys MAZDA CANADA: B.C. Court of Appeal Restricts Waiver of Tort MEDIFAST INC: Plea to Dismiss Securities Suit in Maryland Pending MERCEDES-BENZ, USA: Wigington Rumely Files Class Action MINNESOTA: Judge Certifies Sex Offender Class Action OUTBOARD MARINE: Group of Residents Mull Class Action POWERWAVE TECHNOLOGIES: Still Defends Shareholder Suit in Calif. PROSPER MARKETPLACE: Still Defends Securities Suit in California PROTECTIVE LIFE: Suit Related to Group Health Business Pending RICK'S CABARET: Still Defends Securities Class Lawsuits SEARCHMEDIA HOLDINGS: Shareholder Suit Settlement Okayed in April SERVICE CORPORATION: Calif. Sup. Ct. Keeps Class Certification SUPERVALU INC: Continues to Defend Suit Over C&S Transaction SUPERVALU INC: Wisconsin Suit Remains Stayed Pending IOS Ruling THERABIOGEN INC: Still In Negotiations to Settle "Conde" Suit TICKETMASTER: Consumer Class Action Settlement Challenged TONGXIN INT'L: Gets Final OK of $3-Mil. Shareholder Suits Deal TRANS1 INC: Continues to Defend Securities Suit in N.C. TREE.COM INC: Trial in "Schnee" Class Suit Set for April 2013 TRIAGE STAFFING: Faces Class Action Over Hep. C Outbreak VISA INC: Grocers Group Opposes Interchange Fee Suit Settlement WASHINGTON MUTUAL: Judge Tosses Motion to Block MBS Class Action * Consumer Advisory Group Mulls Class Action v. Korean Banks * Ex-AG Files Mortgage Class Action v. Loan Servicers, Law Firms ********* AFFINIA GROUP: Still Awaits Ruling on Price Fixing Lawsuit Deal --------------------------------------------------------------- A settlement agreement aimed at resolving a multidistrict litigation over price fixing claims against a subsidiary of Affinia Group Intermediate Holdings Inc. is still pending court approval, according to the Company's May 14, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On March 31, 2008, a class action lawsuit was filed by S&E Quick Lube Distributors, Inc. of Utah against several auto parts manufacturers for allegedly conspiring to fix prices for replacement oil, air, fuel and transmission filters. Several auto parts companies are named as defendants, including Champion Laboratories, Inc., Purolator Filters NA LLC, Honeywell International Inc., Cummins Filtration Inc., Donaldson Company, Baldwin Filters Inc., Bosch USA., Mann + Hummel USA Inc., ArvinMeritor Inc., United Components Inc. and Wix Filtration Corp LLC ("Wix Filtration"), one of the Company's subsidiaries. The lawsuit is currently pending as a consolidated Multi-District Litigation (MDL) Proceeding in Chicago, Illinois, because of multiple "tag-along" filings in several jurisdictions. Two suits have also been filed in the Canadian provinces of Ontario and Quebec. Wix Filtration, along with other named defendants, has filed various motions to dismiss plaintiffs' complaints, which were denied by the court in December 2009. Several defendants, including Wix Filtration, refiled motions to dismiss based upon plaintiffs' most recent amended complaint. The court denied those motions in September 2010. In June 2011, the U.S. Department of Justice indicted the plaintiffs' main witness, William Burch, for making false statements in connection with the litigation. Mr. Burch pleaded guilty, was sentenced to two years in prison and the parties are now considering the implications. Three defendants to the action, Baldwin Filters Inc., Cummins Filtration Inc. and Donaldson Company, settled the claims against them for minimal payments in the fall of 2011. In January 2012, all parties to the lawsuit participated in a settlement conference with the Court without success. Shortly afterwards, defendants Wix Filtration, Honeywell and Champion, were able to combine their contributions toward settlement to reach an agreement with plaintiffs to avoid the cost of further litigation. The parties have signed a settlement agreement and submitted the settlement agreement to the court for approval. AMERICAN APPAREL: Bid to Dismiss Amended Shareholder Suit Pending ----------------------------------------------------------------- American Apparel Inc.'s motion to dismiss an amended consolidated shareholder class action complaint remains pending in California, according to the Company's May 15, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. Four putative class action lawsuits, entitled Anthony Andrade v. American Apparel, et al., Case No. CV106352 MMM (RCx), Douglas Ormsby v. American Apparel, et al., Case No. CV106513 MMM (RCx), James Costa v. American Apparel, et al., Case No. CV106516 MMM (RCx), and Wesley Childs v. American Apparel, et al., Case No. CV106680 GW (JCGx), were filed in the U.S. District Court for the Central District of California on August 25, 2010, August 31, 2010, August 31, 2010, and September 8, 2010, respectively, against American Apparel and certain of the Company's officers and executives on behalf of American Apparel shareholders who purchased the Company's common stock between December 19, 2006 and August 17, 2010. On December 3, 2010, the four lawsuits were consolidated for all purposes into a case entitled In re American Apparel, Inc. Shareholder Litigation, Lead Case No. CV106352 MMM (JCGx) (the "Federal Securities Action"). On March 14, 2011, the Court appointed the firm of Barroway Topaz, LLP (now Kessler Topaz Meltzer & Check, LLP) to serve as lead counsel and Mr. Charles Rendelman to serve as lead plaintiff. On April 29, 2011, Mr. Rendelman filed a Consolidated Class Action Complaint against American Apparel, certain of the Company's officers, and Lion, alleging two causes of action for violations of Section 10(b) and 20(a) of the 1934 Act, and Rules 10b-5 promulgated under Section 10(b), arising out of alleged misrepresentations contained in the Company's press releases, public filings with the SEC, and other public statements relating to (i) the adequacy of the Company's internal and financial control policies and procedures; (ii) the Company's employment practices; and (iii) the effect that the dismissal of over 1,500 employees following an Immigration and Customs Enforcement inspection would have on the Company. Plaintiff seeks damages in an unspecified amount, reasonable attorneys' fees and costs, and equitable relief as the Court may deem proper. On May 31, 2011, defendants filed a motion to dismiss the Federal Securities Action. On January 13, 2012, the Court dismissed the Federal Securities Action, with leave to amend. Plaintiff filed an amended complaint on February 27, 2012. The Company moved to dismiss the amended complaint on March 30, 2012. A hearing on the motion was set for May 21, 2012. Discovery is stayed in the Federal Securities Action, as well as in the Federal Derivative Action, pending resolution of motions to dismiss the Federal Securities Action. The Company is unable to predict the financial outcome of these matters at this time, and any views formed as to the viability of these claims or the financial exposure, which could result may change from time to time as the matters proceed through their course. However, no assurance can be made that these matters, either individually or together with the potential for similar suits and reputational harm, will not result in a material financial exposure, which could have a material adverse effect upon the Company's financial condition and results of operations. American Apparel, Inc. -- http://www.americanapparel.net-- engages in the manufacture, distribution, and retail of branded fashion basic apparel for women, men, children, and babies. The Company was founded in 1998 and is headquartered in Los Angeles, California. ASTORIA FINANCIAL: Unit Still Defends NY Suit On Overdraft Fees --------------------------------------------------------------- Astoria Financial Corporation's wholly owned subsidiary continues to defend itself against a class action complaint relating to improper overdraft fees, according to the Company's May 10, 2012 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On February 27, 2012, a putative class action entitled Ellen Lefkowitz, individually and on behalf of all Persons similarly situated v. Astoria Federal Savings and Loan Association was commenced in the Supreme Court of The State of New York, County of Queens, against the Company alleging that during the proposed class period, the Company improperly charged overdraft fees to customer accounts when accounts were not overdrawn, improperly reordered electronic debit transactions from the highest to the lowest dollar amount and processed debits before credits to deplete accounts and maximize overdraft fee income. The complaint contains the further assertion that the Company did not adequately inform its customers that they had the option to "opt-out" of overdraft services. The Company was served with the summons and complaint in such action on February 29, 2012 and its reply was due April 30, 2012. The Company cannot at this time estimate the possible loss or range of loss, if any. No assurance can be given at this time that this litigation against the Company will be resolved amicably, that this litigation will not be costly to defend, that this litigation will not have an impact on the Company's financial condition or results of operations or that, ultimately, any such impact will not be material. Headquartered in Lake Square, New York, Astoria Financial Corporation -- http://www.astoriafederal.com/ -- operates as the bank holding company for Astoria Federal Savings and Loan Association that provides various banking and financial products and services in the United States. The Company was founded in 1888. BUONA VITA: FSIS Lists Stores That Received Recalled Products ------------------------------------------------------------- The U.S. Department of Agriculture's Food Safety and Inspection Service disclosed that certain stores in various states received meatballs and various other frozen, ready-to-eat meat and poultry products that have been recalled by Buona Vita, Inc. The FSIS says the list of store locations may not include all retail locations that have received the recalled product or may include retail locations that did not actually receive the recalled product. Therefore, the FSIS says, it is important that consumers use the product-specific identification information available at http://is.gd/UGVCcs,in addition to the list of retail stores, to check meat or poultry products in the consumers' possession to see if they have been recalled. Nationwide, State-Wide, or Area-Wide Distribution ------------------------------------------------- Retailer Name Location ------------- -------- Carr's Stores in AK Cumberland Farms Stores in CT, DE, ME, MA, NH, NJ, NY, PA, RI, VT Dominick's Stores in IL Eagle Stores in AK Genuardi's Stores in NJ, PA Hannaford Stores in ME, MA, NH, NY, VT Pak N Save Stores in CA Pavilions Stores in CA Randall's Stores in TX Roche Brothers Stores in MA Safeway Stores Nationwide Sam's Club Stores Nationwide The Market Stores in CA Tom Thumb Stores in TX Vons Stores in CA, NV Specific Store-Wide Distribution (Stores and Location) ------------------------------------------------------ Retailer Name City and State ------------- -------------- Oaken Keg-Liquor Fairbanks, Alaska A & S Fine Foods Fairfield, Connecticut Cavallo's Italian Oakville, Connecticut Specialty Shoppe Old Mystic General Store Old Mystic, Connecticut Gnazzo Food Center, Inc. Plainville, Connecticut Artans Deli & Grocery Shelton, Connecticut Town Plot Supermarket Waterbury, Connecticut Felton Market Felton, Delaware Food Supply South Daytona Beach, Florida Box N' Save, Inc. Baltimore, Maryland Box N' Save, Inc. Glen Burnie, Maryland Ferretti's Market Brewster, Massachusetts The Butchery Danvers Danvers, Massachusetts Colella's Supermarket Hopkinton, Massachusetts Brant Rock Market Marshfield, Massachusetts Food City Turner Falls, Massachusetts Ye Olde Butcher Shoppe West Springfield, Massachusetts Lucci's Supermarket, Inc. Wilmington, Massachusetts Foodtown North Haledon, New Jersey Okie's Butcher Shop Surf City, New Jersey Freshway Valley Grocery Akron, Ohio Kirtland's Market Kirtland, Ohio Walmart Poland, Ohio Brownhelm Country Market Vermilion, Ohio Sprankle's Neighborhood Apollo, Pennsylvania Market Geresbeck's Food Market Baltimore, Pennsylvania Little Barn Discount Bedford, Pennsylvania Grocery Surplus Outlet Berwick, Pennsylvania Horning Market Bethel, Pennsylvania Karns Food Boiling Springs, Pennsylvania Friedman's Market Butler, Pennsylvania Thomas' Family Market Dallas, Pennsylvania Glenwood Foods Ephrata, Pennsylvania Everett Food-Liner Everett, Pennsylvania Foodland Galeton, Pennsylvania Sunnyway Foods Greencastle, Pennsylvania Karns Food Harrisburg, Pennsylvania Thomas' Family Market Hazleton, Pennsylvania Karns Food Hershey, Pennsylvania Ideal Market Bedford, Johnstown, Pennsylvania Ideal Market Walnut, Johnstown, Pennsylvania Market Basket, Inc. Johnstown, Pennsylvania Mercik's Ideal Market Johnstown, Pennsylvania IGA Kittanning, Pennsylvania S. Mandros Imported Foods Lancaster, Pennsylvania IGA Leechburg, Pennsylvania Karns Food Lemoyne, Pennsylvania Kratzer's Store Lewistown, Pennsylvania Marlin Market Marlin, Pennsylvania Rhodes Meat Market, Inc. Martinsburg, Pennsylvania Schrader's Store Meadville, Pennsylvania Karns Food Mechanicsburg, Pennsylvania Karns Food Middletown, Pennsylvania Surplus Outlet Montgomery, Pennsylvania Peights Country Store Mt. Union, Pennsylvania Horning Market Myerstown, Pennsylvania Gold Crown Foodland Nanty Glo, Pennsylvania Feiling's Produce New Alexandria, Pennsylvania Karns Food New Bloomfield, Pennsylvania Mark's Discount Groceries New Oxford, Pennsylvania Surplus Outlet Northumberland, Pennsylvania Quinn's Market Peckville, Pennsylvania Cousin's Fresh Market Lehigh, Philadelphia, PA Cousin's Fresh Market Philadelphia, Pennsylvania County Market Punxsutawney, Pennsylvania Palumbo's Family Meats Ridgway, Pennsylvania Bilo Foods Ridgway, Pennsylvania Creekside Discount Rome, Pennsylvania Groceries Friedman's Market Saxonburg, Pennsylvania Thomas' Family Market Shaverton, Pennsylvania Reese's Market Tyrone, Pennsylvania Sprankle's Neighborhood Vandergrift, Pennsylvania Market Fendler's Distributing Inc. Wilkes Barre, Pennsylvania Connie's Supermarket, Inc. Wyalusing, Pennsylvania Dino's Park-N-Shop Chepachet, Rhode Island Roch's Market West Warwick, Rhode Island Dunns Corners Market Westerly, Rhode Island Kilburn's Convenience Store Manchester, Vermont Readsboro General Store Readsboro, Vermont CARGILL MEAT: More Stores Received Recalled Ground Beef Products ---------------------------------------------------------------- The U.S. Department of Agriculture's Food Safety and Inspection Service disclosed that certain stores in various states received ground beef products that have been recalled by Cargill Meat Solutions Corporation. The FSIS says the list of store locations may not include all retail locations that have received the recalled product or may include retail locations that did not actually receive the recalled product. Therefore, the FSIS says, it is important that consumers use the product-specific identification information available at http://is.gd/kG0Zco,in addition to the list of retail stores, to check meat or poultry products in the consumers' possession to see if they have been recalled. Retailer Name City and State ------------- -------------- Country Market Oakdale, Connecticut Brackett's Market Bath, Maine Will's Shop N' Save Dover-Foxcroft, Maine Gray Shop N' Save Gray, Maine Pure Food Market, Inc. Southampton, Massachusetts IGA Winchendon, Massachusetts Hunter's Shop 'n Save Wolfeboro, New Hampshire IGA Brewster, New York Peck's Market Callicoon, New York IGA Greenport, New York Peck's Market Jeffersonville, New York IGA Southold, New York Hurley Ridge Market West Hurley, New York Wilson's Lakeside Market Wilson, New York G-Mart Wurtsboro, New York IGA Elmer, New Jersey IGA Ridgefield Park, New Jersey Town Market Roebling, New Jersey Lake Region IGA Hawley, Pennsylvania CENTURY ALUMINUM: Appeal From Stockholder Suit Dismissal Pending ---------------------------------------------------------------- In March 2011, purported stockholder class actions pending against Century Aluminum Company consolidated as In re: Century Aluminum Company Securities Litigation were dismissed with prejudice by the U.S. District Court for the Northern District of California. The plaintiffs in the class actions allege that the Company improperly accounted for cash flows associated with the termination of certain forward financial sales contracts which accounting allegedly resulted in artificial inflation of the Company's stock price and investor losses. Plaintiffs are seeking rescission of the Company's February 2009 common stock offering, unspecified compensatory damages, including interest thereon, costs and expenses and attorneys' fees. On March 10, 2011, plaintiffs filed a notice of appeal to the order and judgment entered by the court on March 3, 2011. The notice of appeal remains pending before the U.S. Court of Appeals for the Ninth Circuit. Century Aluminum Company -- http://www.centuryaluminum.com-- through its subsidiaries, produces primary aluminum in the United States, China, and Iceland. It also holds a 40% joint venture interest in a carbon anode and cathode facility located in the Guangxi Zhuang Autonomous Region of south China. The Company was founded in 1981 and is headquartered in Monterey, California. CENTURY ALUMINUM: Suits Over Retiree Benefits Still Stayed ---------------------------------------------------------- Class action lawsuits relating to retiree benefits offered by a subsidiary of Century Aluminum Company continue to be stayed pending the parties' talks on the possible resumption of operations at a Ravenswood, Virginia facility, according to the Company's May 10, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. Century Aluminum of West Virginia, Inc. (CAWV) amended its postretirement medical benefit plan, effective January 1, 2010, for all current and former CAWV salaried employees, their dependents and all bargaining unit employees who retired before June 1, 2006, and their dependents. Effective January 1, 2011, CAWV no longer provided retiree medical benefits to active salaried CAWV personnel or any other personnel who retired prior to November 1, 2010. The principal changes to the plan as a result of this amendment were that, upon attainment of age 65, all CAWV provided retiree medical benefits ceased for retirees and dependents. In addition, bargaining unit retirees under age 65 and qualified dependents under age 65 were covered by the salary retiree medical plan which required out-of pocket payments for premiums, co-pays and deductibles by participants. In November 2009, CAWV filed a class action complaint for declaratory judgment against the USWA, the USWA's local union, and four CAWV retirees, individually and as class representatives, seeking a declaration of CAWV's rights to modify/terminate retiree medical benefits. Later in November 2009, the USWA and representatives of a retiree class filed a separate suit against CAWV, Century Aluminum Company, Century Aluminum Master Welfare Benefit Plan, and various John Does with respect to the foregoing. These actions, entitled Dewhurst, et al. v. Century Aluminum Co., et al., and Century Aluminum of West Virginia, Inc. v. United Steel, Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL-CIO/CLC, et al., have been consolidated and venue has been set in the U.S. District Court for the Southern District of West Virginia. In January 2010, the USWA filed a motion for preliminary injunction to prevent the Company from implementing the foregoing changes while these lawsuits are pending, which was dismissed by the trial court. In August 2011, the Fourth Circuit Court of Appeals upheld the District Court's dismissal of the USWA's motion for preliminary injunction, finding that the USWA had failed to establish the likelihood of success on the merits of the underlying matter. In October 2011, CAWV filed a motion to dismiss plaintiff's first amended complaint with the trial court. No ruling has yet been made on the motion. In March 2012, the court granted a stay pending negotiations to restart the Company's smelter facility in Ravenswood, Virginia. The Ravenswood facility is owned and operated by CAWV. The plaintiffs have agreed in principle to settle the lawsuit upon a successful restart of Ravenswood facility. The Company has reached an agreement in principle with the CAWV retirees to make contributions to a voluntary employee beneficiary association (VEBA) trust that would provide certain health care benefits to these retirees and their eligible dependents in the event of a restart of its Ravenswood facility. If this agreement were entered into, the Company's obligations under the agreement, including any contributions to the VEBA, would be contingent upon the occurrence of several future events that are necessary in order to restart the Ravenswood facility. None of these events, including the finalization of this agreement, are certain to occur. Century Aluminum Company -- http://www.centuryaluminum.com-- through its subsidiaries, produces primary aluminum in the United States, China, and Iceland. It also holds a 40% joint venture interest in a carbon anode and cathode facility located in the Guangxi Zhuang Autonomous Region of south China. The Company was founded in 1981 and is headquartered in Monterey, California. CHINA ADVANCED: Still Defends Stockholder Class Suits ----------------------------------------------------- China Advanced Construction Materials Group, Inc. continues to defend stockholder class action lawsuits in Delaware, according to the Company's May 14, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On July 26, 2011, the Company issued a press release announcing that its board of directors received a preliminary, non-binding offer from its Chairman and Chief Executive Officer, Mr. Xianfu Han, and its Vice Chairman and Chief Operating Officer, Mr. Weili He, to acquire all of the outstanding shares of the Company's common stock not currently owned by them in a going private transaction at a proposed price of $2.65 per share in cash (the Proposed Transaction). Since July 29, 2011, multiple class action complaints (the Stockholder Actions) have been filed against the Company and its Board of Directors in the Court of Chancery of the State of Delaware, generally alleging that the Company and all of its directors breached their fiduciary duties in connection with the receipt by the Company of a preliminary, non-binding offer from Xianfu Han, the Company's Chairman and Chief Executive Officer, and Weili He, the Company's Vice Chairman and Chief Operating Officer, to acquire all of the outstanding shares of the Company's common stock not currently owned by them in a going private transaction at a proposed price of $2.65 per share in cash (the Proposed Transaction). The Stockholder Actions have been consolidated under the caption In re China Advanced Construction Materials Group Litigation, Consolidated C.A. No. 6729-CS. The Stockholder Actions seek, among other things, to declare that the Proposed Transaction is unfair, unjust and inequitable, to enjoin the Company from taking any steps necessary to accomplish or implement the Proposed Transaction, and damages in the event the Proposed Transaction is consummated. China Advanced Construction Materials Group, Inc. -- http://www.china-acm.com-- through its subsidiaries, produces and supplies ready mix concrete materials and related technical services for large scale, high-speed rail, and other complex infrastructure projects primarily in the People's Republic of China. The Company was founded in 2002 and is headquartered in Beijing, China. CHOICE MANUFACTURING: Judge Dismisses Class Action -------------------------------------------------- Courthouse News Service reports that a federal judge dismissed class action claims against Choice Manufacturing president Peter Masi, payment plan servicer Mepco Finance, and Independent Bank Corp. A copy of the Order Granting Defendants' Motions to Dismiss in High v. The Choice Manufacturing Company, et al., Case No. 11-cv- 05478 (N.D. Calif.), is available at: http://www.courthousenews.com/2012/07/25/Choice%20Company.pdf CITIBANK NA: Accused of Making Unnecessary Third Party Fees ------------------------------------------------------------ Gloria Stitt, Ronald Stitt, Judi Shatzer, Mark Zirlott, and Terri Louise Zirlott, individually, and on behalf of other members of the general public similarly situated v. Citibank, N.A., a national association, and CitiMortgage, Inc., a New York corporation, Case No. 3:12-cv-03892 (N.D. Calif., July 24, 2012) is brought based on claims originally asserted as part of the action captioned Bias et al. v. Wells Fargo & Company et al., Case No. 4:12-cv-00664-YGR (N.D. Calif., February 10, 2012). However, by order dated July 13, 2012, the District Court found that the claims with respect to the Defendants in this action were not properly joined in a single action with the claims against the other defendants in the Bias action. This lawsuit concerns fraudulent practices committed by the Defendants in connection with their home mortgage loan servicing businesses, the Plaintiffs argue. They allege that the Defendants use automated mortgage loan management systems, made up of an enterprise of subsidiaries, inter-company departments, divisions, and third-party "property preservation" vendors, to engage in a scheme to conceal the unlawful assessment of improperly marked-up or unnecessary third party fees for default-related services, cheating borrowers who can least afford it. The Stitts are citizens of New York, Ms. Shatzer is a citizen of Maryland, and the Zirlotts are citizens of Alabama. Citibank is a national bank based in New York. Citibank is a subsidiary of Citicorp. CitiMortgage is a subsidiary of Citibank. CitiMortgage is a New York corporation based in O'Fallon, Missouri. The Plaintiffs are represented by: Daniel Alberstone, Esq. Roland Tellis, Esq. Mark Pifko, Esq. BARON & BUDD, P.C. 15910 Ventura Boulevard, Suite 1600 Encino, CA 91436 Telephone: (818) 839-2333 Facsimile: (818) 986-9698 E-mail: dalberstone@baronbudd.com rtellis@baronbudd.com mpifko@baronbudd.com DUKE ENERGY: Kessler Topaz Files Class Action in North Carolina --------------------------------------------------------------- Bruce Henderson, writing for Charlotte Observer, reports that a San Francisco law firm said on July 24 it has filed a class-action lawsuit on behalf of investors over the chief executive switch following the Duke Energy-Progress Energy merger. The firm, Kessler Topaz Meltzer & Check, said it filed the suit in the U.S. District Court for Eastern North Carolina on behalf of people who bought Duke stock between June 28 and July 9. The suit claims that Duke and its officers broke securities law by misrepresenting who would lead the combined companies. Progress CEO Bill Johnson was forced out as chief executive of the new Duke hours after the merger closed July 2. EASTMAN CHEMICAL: Reaches MOU in Solutia-Related Class Lawsuit -------------------------------------------------------------- Eastman Chemical Company was able to negotiate a memorandum of understanding in May to resolve a consolidated class action complaint relating to its acquisition of Solutia, Inc., according to the Company's May 10, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On January 26, 2012, the Company entered into a definitive agreement to acquire Solutia Inc., a leader in performance materials and specialty chemicals. Solutia, headquartered in St. Louis, Missouri, produces and sells a diverse portfolio of performance materials and specialty chemicals. The transaction remains subject to approval by Solutia's shareholders and receipt of required regulatory approvals as well as other customary closing conditions. The transaction is expected to close in mid- 2012. On February 2, 2012, a putative shareholder class and derivative action, styled Jennifer Howard v. Jeffry N. Quinn, et al., was filed against Solutia, its board of directors (the "Solutia Board") and Eastman in the Circuit Court of St. Louis County, Missouri (the "Missouri Action"). On February 7, 2012, a second putative shareholder class action, styled John C. Dewan v. Solutia Inc., was filed against Solutia, the Solutia Board, Eastman and Eastman's subsidiary Eagle Merger Sub Corporation ("Merger Sub") in the Chancery Court of Delaware. On February 14, 2012, two additional putative shareholder class actions, styled Joseph C. Huttemann v. Jeffry N. Quinn, et al., and David Wolfe v. Solutia Inc., et al., respectively, were filed against Solutia, the Solutia Board, Eastman and Merger Sub in the Chancery Court of Delaware (together with the putative shareholder class action filed on February 7, 2012, the "Delaware Actions"). The Missouri Action and the Delaware Actions generally allege that the Solutia Board breached its fiduciary duties to Solutia stockholders by, among other things, approving Eastman's proposed acquisition of Solutia for allegedly inadequate consideration, following an allegedly unfair sale process, and that Eastman and Merger Sub aided and abetted the Solutia Board's alleged breaches of fiduciary duty. The Delaware Actions further allege that the Solutia Board breached its fiduciary duties by agreeing to terms in the Merger Agreement that favor Eastman and deter alternative bids. The complaints in the Missouri Action and the Delaware Actions seek, among other things, an injunction against the completion of Eastman's proposed acquisition of Solutia and attorneys' fees and expenses incurred in connection with the action. The complaint in the Missouri Action further seeks rescission of Eastman's proposed acquisition of Solutia in the event it is completed, and any damages arising from the defendants' alleged breaches. Eastman and Merger Sub each believe that all the allegations are without merit and intend to vigorously defend themselves against the allegations in these complaints. On February 21, 2012, the Chancery Court of Delaware entered an order consolidating the Delaware Actions (the "Consolidated Delaware Action"). On March 5, 2012, the Circuit Court of St. Louis County, Missouri entered an order staying the Missouri Action in favor of the Consolidated Delaware Action. On March 22, 2012, plaintiffs in the Consolidated Delaware Action filed a Verified Consolidated Amended Class Action Complaint (the "Consolidated Amended Complaint"), styled In re Solutia Inc. Shareholders Litigation, which generally alleges that the Solutia Board breached its fiduciary duties to Solutia stockholders by, among other things, approving Eastman's proposed acquisition of Solutia for allegedly inadequate consideration, following an allegedly unfair sale process, and agreeing to terms in the Merger Agreement that favor Eastman and deter alternative bids. The Consolidated Amended Complaint also generally alleges that the Solutia Board breached its fiduciary duties to Solutia stockholders by failing to disclose in the Form S-4 registration statement filed on March 7, 2012 certain material information concerning events leading up to the announcement of the proposed acquisition and relating to the review and analysis of the transaction by Solutia management, and by the financial advisors to Solutia and the Solutia Board. The Consolidated Amended Complaint further alleges that Eastman and Merger Sub aided and abetted the Solutia Board's alleged breaches of fiduciary duties. The Consolidated Amended Complaint seeks, among other things, an injunction against the completion of Eastman's proposed acquisition of Solutia, rescission of Eastman's proposed acquisition of Solutia in the event it is completed, any damages On May 3, 2012, the parties to the Consolidated Delaware Action entered into a Memorandum of Understanding (the MOU) to provide for the settlement of all claims related to Eastman's proposed acquisition of Solutia. The settlement provides for, among other things, a stay of all proceedings in the Consolidated Delaware Action, including plaintiffs' request for a preliminary injunction against consummation of Eastman's proposed acquisition of Solutia, the inclusion of additional disclosures with respect to various aspects of Eastman's proposed acquisition of Solutia in the proxy statement/prospectus regarding Eastman's proposed acquisition of Solutia, and the entry of a stipulation certifying a mandatory class of all Solutia stockholders. The settlement is subject to final documentation and court approval, and is conditioned on consummation of Eastman's proposed acquisition of Solutia. Under the MOU, plaintiffs' counsel in the Consolidated Delaware Action will petition the court for an award of attorneys' fees and expenses. The MOU does not specify any particular fee to be awarded to plaintiffs' counsel in the Consolidated Delaware Action, but it does require the parties to negotiate those fees and expenses in good faith. The decision to award, or not award, the requested attorneys' fees and expenses will be within the discretion of the Chancery Court of Delaware, and the effectiveness of the settlement is not conditioned upon the award of attorneys' fees and expenses. If the settlement is approved by the Chancery Court of Delaware, it will resolve and release, on behalf of the entire class of Solutia stockholders, all claims that were or could have been brought by them challenging any aspect of Eastman's proposed acquisition of Solutia, the merger agreement, and any disclosures made in connection therewith, among other claims. Headquartered in Kingsport, Tennessee, Eastman Chemical Company is a major producer of acetate tow, and a broad array of specialty plastics and resins, as well as both commodity and specialty chemicals. Eastman reported sales of roughly $7.1 billion for the year ended December 31, 2011. ELECTRONIC ARTS: Settles Antitrust Class Action for $27 Million --------------------------------------------------------------- Maria Dinzeo at Courthouse News Service reports that with a class- action settlement in the works, Electronic Arts has voluntarily given up some of its hold on the market for football video games. The Redwood City, Calif.-based developer agreed to wait five years before seeking renewal of exclusive licensing deals with the National Collegiate Athletic Association and the Collegiate Licensing Company that are set to expire in 2014. After four years of litigation, the game developer will pay $27 million to a class of gamers who claimed that these agreements monopolized the market for football video games and drove up prices. EA will keep its licensing deal with the National Football League, but it will wait five years to do the same with the Arena Football League after that exclusive trademark license lapses. In a 2008 complaint, Geoffrey Pecover and Jeffrey Lawrence claimed that EA's agreements with the NFL, NCAA, CLC and AFL killed off competing football games. Left in control of the market, EA allegedly jacked game prices to up to $60 per unit. Settlement talks with EA started in July 2011. The proposed deal offers cash payments of either $1.95 or $6.79, depending on the type of video game title, to consumers who bought "Madden NFL," "NCAA Football" or "Arena Football League" between January 1, 2005, and June 21, 2012. Continued litigation would likely take any award for consumers off the table, according to the agreement. Electronic Arts challenged several aspects of the class action, including the allegedly too-narrow characterization of a relevant market. It also said that there was no proof of above-market pricing. U.S. District Judge Claudia Wilken is expected to look at the settlement on Sept. 27, 2012. A copy of the Unopposed Notice of Motion and Motion for Preliminary Approval of Class Action Settlement in Pecover, et al. v. Electronic Arts, Inc., Case NO. 08-cv-02820 (N.D. Calif.), is available at: http://www.courthousenews.com/2012/07/25/ea.pdf The Plaintiffs are represented by: Jeff D. Friedman, Esq. Shana E. Scarlett, Esq. HAGENS BERMAN SOBOL SHAPIRO LLP 715 Hearst Avenue, Suite 202 Berkeley, CA 94710 Telephone: (510) 725-3000 E-mail: jefff@hbsslaw.com shanas@hbsslaw.com - and - Stuart M. Paynter, Esq. THE PAYNTER LAW FIRM PLLC 1200 G Street N.W., Suite 800 Washington, DC 20005 Telephone: (202) 626-4486 E-mail: stuart@smplegal.com - and - Steve W. Berman, Esq. HAGENS BERMAN SOBOL SHAPIRO LLP 1918 Eighth Avenue, Suite 3300 Seattle, WA 98101 Telephone: (206) 623-7292 E-mail: steve@hbsslaw.com FRIENDFINDER NETWORKS: Securities Suit Dismissal Bid Pending ------------------------------------------------------------ FriendFinder Networks Inc. is awaiting a ruling on its motion to dismiss an amended securities class action complaint in Florida, according to the Company's May 14, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On November 11, 2011, a putative shareholder class action was filed in the U.S. District Court for the Southern District of Florida by Greenfield Childrens Partnership, on behalf of investors who purchased the Company's common stock pursuant to its initial public offering, against the Company, Ladenburg Thalmann & Co., Inc. and Imperial Capital LLC, the underwriters in the initial public offering, and the Company's directors and certain of the Company's executive officers. The complaint alleges, among other things, that the initial public offering documents contained certain false and misleading statements and seeks an unspecified amount of compensatory damages. In March 2012, the plaintiffs filed an amended complaint alleging all of the same causes of action and adding additional factual allegations and in response to the Amended Complaint, the Company filed its Motion to Dismiss. The Company believes it has meritorious defenses to all claims and is vigorously defending the lawsuit. FriendFinder Networks Inc., together with Various, Inc and its other wholly owned subsidiaries, is an internet and technology company providing services in the social networking and web-based video sharing markets. GENON ENERGY: Being Sold to NRG for Too Little, Suit Claims ----------------------------------------------------------- Courthouse News Service reports that GenOn Energy is selling itself too cheaply through an unfair price to NRG Energy, for the "bargain basement price" of $2.20 a share, or $1.7 billion, shareholders say in a class action in Harris County Court. A copy of the Petition for Breach of Fiduciary Duty in Akel, et al. v. Genon Energy Inc., et al., Case No. 2012-42090 (Tex. Dist. Ct., Harris Cty.), is available at: http://www.courthousenews.com/2012/07/25/ElectricMerger.pdf The Plaintiff is represented by: Joe Kendall, Esq. Jamie J. McKey, Esq. Daniel Hill, Esq. KENDALL LAW GROUP, LLP 3232 McKinney Avenue, Suite 700 Dallas, TX 75204 Telephone: (214) 744-3000 E-mail: jkendall@kendalllawgroup.com jmckey@kendalllawgroup.com dhill@kendalllawgroup.com - and - Randall J. Baron, Esq. A. Rick Atwood, Jr., Esq. David T. Wissbroecker, Esq. Edward M. Gergosian, Esq. ROBBINS GELLER RUDMAN & DOWD LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: (619) 231-1058 E-mail: randyb@rgrdlaw.com ricka@rgrdlaw.com DWissbroecker@rgrdlaw.com EGergosian@rgrdlaw.com - and - Richard A. Maniskas, Esq. RYAN & MANISKAS, LLP 995 Old Eagle School Road, Suite 311 Wayne, PA 19087 Telephone: (484) 588-5516 - and - Alfred G. Yates, Jr., Esq. Gerald L. Rutledge, ESq. LAW OFFICE OF ALFRED G. YATES, JR., P.C. 519 Allegheny Building 429 Forbes Avenue Pittsburgh, PA 15219 Telephone: (412) 391-5164 GENVEC INC: Securities Suit in Maryland Still Pending ----------------------------------------------------- A securities class action complaint remains pending against GenVec, Inc. in Maryland, according to the Company's May 10, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On February 3, 2012, a putative class action lawsuit was commenced against the Company, Paul H. Fischer, Douglas J. Swirsky and Mark O. Thornton, in the U.S. District Court for the District of Maryland, captioned Satish Shah v. GenVec, Inc., et al. The plaintiff alleges that the Company and the individual defendants violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. The plaintiff purports to be acting on behalf of a class consisting of purchasers or acquirers of the Company's common stock between March 12, 2009 and March 30, 2010 (the "Class Period"). The plaintiff alleges that, as a result of the defendants' allegedly false misleading statements or omissions concerning the Company's prospects, the Company's common stock traded at artificially inflated prices throughout the Class Period. The plaintiff seeks compensatory damages and fees and costs, among other relief, but has not specified the amount of damages being sought in the action. The parties have stipulated, and the Court has ordered, that the defendants' responses to the pending complaint are appropriately deferred until after the appointment of a lead plaintiff and after the approval of lead counsel. On or about April 3, 2012, a group of individuals claiming to be investors filed a motion seeking to be appointed lead plaintiff and seeking approval of their choice of lead plaintiffs' counsel. On April 26, 2012, the Court appointed this group of individuals as lead plaintiff, approved their choice of lead plaintiffs' counsel, and approved a schedule proposed by the parties that, among other things, provides for the lead plaintiffs to file an amended complaint within 55 days. GenVec, Inc. -- http://www.genvec.com/-- operates as a biopharmaceutical company that uses differentiated, proprietary technologies to create therapeutics and vaccines. GenVec is working with various companies and organizations, such as Novartis, Merial, and the U.S. Government to support a portfolio of product programs that address the prevention and treatment of human and animal health concerns. Founded in 1992, the Company is based in Gaithersburg, Maryland. GOLFSMITH INT'L: Signs MOU to Settle Two Merger-Related Suits ------------------------------------------------------------- Golfsmith International Holdings, Inc. filed a Form 8-K with the U.S. Securities and Exchange Commission on July 23, 2012, pursuant to a memorandum of understanding regarding the settlement of certain litigation relating to the Agreement and Plan of Merger (the "Merger Agreement"), dated May 11, 2012, among the Company, Golf Town USA Holdings Inc. ("Golf Town") and Major Merger Sub, Inc. ("Merger Sub"). The Merger Agreement provides that, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation and a wholly owned subsidiary of Golf Town. As previously disclosed, two putative class action lawsuits were filed in connection with the Merger. The actions are entitled Bushansky v. Golfsmith International Holdings, Inc., et al., No. D-1-GN-12-001495 (the "Bushansky Action"), pending in the District Court of Travis County, Texas, 126th Judicial District (the "Court") and Fleener v. Hanaka, et al., Civil Action No. 1:12-CV- 563 (the "Fleener Action"), pending in the United States District Court for the Western District of Texas Austin Division. Such lawsuits were filed against the Company, Golf Town, Merger Sub, the Company's directors, and, in the case of the Fleener Action, against Atlantic Equity Partners III, L.P. ("AEP"). The complaints allege, among other things, that the Company's directors and certain other defendants breached their fiduciary duties in connection with the Merger, that Golf Town and Merger Sub and certain other defendants aided and abetted the directors' alleged breach of those fiduciary duties, and that the Preliminary Information Statement on Schedule 14C filed with the SEC by the Company on June 4, 2012 contained material misstatements and omissions. The plaintiffs sought injunctive relief concerning the alleged fiduciary breaches and prohibiting defendants from consummating the Merger, other forms of equitable relief, and compensatory and/or rescissory damages. On July 23, 2012, the Company, the Company's directors, Golf Town and Merger Sub entered into a memorandum of understanding with the plaintiffs in the Bushansky Action and the Fleener Action regarding the settlement of these actions. In connection with the proposed settlement, the Company agreed not to assert that a demand for appraisal by a holder of the Company's common stock who has not surrendered any of such holder's common stock in exchange for any Merger Consideration (as defined in the Merger Agreement) is not timely under Section 262 of the Delaware General Corporate Law if such holder who otherwise satisfies the requirements of Section 262 submits a written demand for appraisal within 20 calendar days of the first date that each of the following is satisfied: (i) the notice required by Section 262(d)(2), as revised to reflect the terms of the settlement, is delivered to stockholders in accordance with Section 262(d)(2) and (ii) the filing of this 8-K. The Company believes that no further supplemental disclosure is required under applicable laws; however, to avoid the risk of the stockholder class actions delaying or adversely affecting the Merger and to minimize the expense of defending such actions, the Company has also agreed, pursuant to the terms of the proposed settlement, to make certain supplemental disclosures related to the Merger. Subject to completion of certain confirmatory discovery by counsel to the plaintiffs, the memorandum of understanding stipulates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to the Company's stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Court will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the Court, it is anticipated that it will resolve and release all claims in all actions that were or could have been brought challenging any aspect of the Merger, the Merger Agreement, and any disclosure made in connection therewith. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. HERSHEY COMPANY: Faces Overtime Class Action in California ---------------------------------------------------------- Courthouse News Service reports that Hershey failed to pay hourly merchandisers overtime or timely wages, and it did not provide them with meal and rest periods, a class claims. A copy of the Complaint in Rodrigues v. The Hershey Company, Case No. RG12640247 (Calif. Super. Ct., Alameda Cty.), is available at: http://www.courthousenews.com/2012/07/25/hershey.pdf The Plaintiff is represented by: R. Rex Parris, Esq. Alexander R. Wheeler, Esq. Kitty Szeto, Esq. R. REX PARRIS LAW FIRM 43364 10th Street West Lancaster, CA 93534 Telephone: (661) 949-2595 - and - Edwin Aiwazian, Esq. Arby Aiwazian, Esq. Maria F. Nickerson, Esq. LAWYERS FOR JUSTICE, PC 410 West Arden Avenue, Suite 203 Glendale, CA 91203 Telephone: (818) 265-1020 IMH FINANCIAL: Still Awaits Court OK of Unitholders' Suit Deal -------------------------------------------------------------- IMH Financial Corporation continues to await court approval of a tentative settlement in principle to resolve a consolidated class action lawsuit captioned In re IMH Secured Loan Fund Unitholders Litigation, according to the Company's May 15, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. As a result of the unprecedented disruptions in the general real estate and related markets and the rapid decline in the global and U.S. economies, on October 1, 2008, pursuant to its operating agreement, IMH Secured Loan Fund, LLC (the "Fund"), the Company's predecessor entity, suspended member redemption requests. In order to preserve liquidity in the ongoing credit crisis, the Fund suspended regular monthly distributions to members in the second quarter of 2009. On June 18, 2010, following approval by members representing 89% of membership units of the Fund voting on the matter, the Fund became internally-managed through the acquisition of Investors Mortgage Holdings, Inc. (the "Manager") and converted into a Delaware corporation in a series of transactions, the Conversion Transactions. On June 18, 2010, the Company whereby the Fund was converted into a Delaware corporation and became internally managed through the acquisition of the Manager. In the Conversion Transactions, the Company also acquired IMH Holdings, LLC ("Holdings"), which is a Delaware limited liability company and serves as a holding company for two wholly-owned subsidiaries, IMH Management Services, LLC, an Arizona limited liability company, and SWI Management, LLC, an Arizona limited liability company ("SWIM"). IMH Management provides the Company and its affiliates with human resources and administrative services and SWIM manages the Strategic Wealth & Income Fund, LLC (the "SWI Fund"). Various disputes arose relating to the consent solicitation/prospectus used in connection with seeking member approval of the Conversion Transactions, and the Company was named in various lawsuits containing allegations and claims that fiduciary duties owed to Fund members and to the Fund were breached because, among other things, the Conversion Transactions were unfair to Fund members, constituted self-dealing and because the information provided about the Conversion Transactions and related disclosures was false and misleading. The claims were consolidated into the putative class action lawsuit captioned In re IMH Secured Loan Fund Unitholders Litigation pending in the Court of Chancery in the State of Delaware against the Company, certain affiliated and predecessor entities, and certain former and current of the Company's officers and directors ("Fund Litigation"). On January 31, 2012, the Company reached a tentative settlement in principle to resolve all claims asserted by the plaintiffs in the Fund Litigation, other than the claims of one plaintiff. The tentative settlement in principle, memorialized in a Memorandum of Understanding (MOU) is subject to certain class certification conditions, confirmatory discovery and final court approval (including a fairness hearing). The MOU contemplates a full release and settlement of all claims, other than the claims of the one non-settling plaintiff, against the Company and the other defendants in connection with the claims made in the Fund Litigation. The following are some of the key elements of the tentative settlement: - The Company will offer $20.0 million of 4% five-year subordinated notes to members of the Class in exchange for 2,493,765 shares of IMH common stock at an exchange rate of $8.02 per share; - The Company will offer to Class members that are accredited investors $10.0 million of convertible notes with the same financial terms as the convertible notes previously issued to NW Capital; - The Company will deposit $1.6 million in cash into a settlement escrow account (less $0.23 million to be held in a reserve escrow account that is available for use by us to fund the Company's defense costs for other unresolved litigation) which will be distributed (after payment of notice and administration costs and any amounts awarded by the Court for attorneys' fees and expense) to Class members in proportion to the number of the Company's shares held by them as of June 23, 2010; - The Company enact certain agreed upon corporate governance enhancements, including the appointment of two independent directors to the Company's board of directors upon satisfaction of certain conditions (but in no event prior to December 31, 2012) and the establishment of a five-person investor advisory committee (which may not be dissolved until such time as we have established a seven-member board of directors with at least a majority of independent directors); and - It provides additional restrictions on the future sale or redemption of the Company's common stock held by certain of the Company's executive officers. The Company has vigorously denied, and continue to vigorously deny, that it has committed any violation of law or engaged in any of the wrongful acts that were alleged in the Fund Litigation, but it believes it is in its best interests and the interests of its stockholders to eliminate the burden and expense of further litigation and to put the claims that were or could have been asserted to rest. As of March 31, 2012 and December 31, 2011, the Company has accrued the cash payment required of $1.6 million, net of related anticipated insurance proceeds. However, it has not included any other adjustments relating to the potential repurchase of stock in exchange for the issuance of convertible notes because of the uncertainty of timing and of the fair values of such instruments as of the date of settlement. At the time that this amount is estimable, the Company will provide for the appropriate amounts resulting from the resolution of this matter. There can be no assurance that the court will approve the tentative settlement in principle, the Company relates. Furthermore, the judicial process to ultimately settle this action is estimated to take a minimum of six to nine months or longer. If not approved, the tentative settlement as outlined in the MOU may be terminated and the Company will continue to vigorously defend this action. IMH Financial Corporation is a Scottsdale, Arizona-based real estate lender and investor. JBI INC: Securities Class Suit Still Pending -------------------------------------------- A securities class action complaint against JBI, Inc. remains pending, according to the Company's May 15, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On July 28, 2011, one of the Company's shareholders filed a class action lawsuit against the Company and Messrs. Bordynuik and Baldwin on behalf of purchasers of its securities between August 28, 2009 and July 20, 2011. The complaint in that case, filed in federal court in Nevada, alleges that the defendants made false or misleading statements, or both, and failed to disclose material adverse facts about the Company's business, operations, and prospects in press releases and filings made with the SEC. Specifically, the lawsuit alleges that the defendants made false or misleading statements or failed to disclose material information, or a combination thereof regarding: (1) that the media credits were substantially overvalued; (2) that the Company improperly accounted for acquisitions; (3) that, as such, the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles; (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times. The Company's response to the Complaint is not due until a lead plaintiff is appointed, which has not yet occurred. The Company cannot predict the outcome of the class action litigation at this time. JPMORGAN CHASE: Grant & Eisenhofer Files Class Action in N.Y. ------------------------------------------------------------- Grant & Eisenhofer P.A. has 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 ("SEC"), the Financial Industry Regulatory Authority ("FINRA"), 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.com-- represents investors and shareholders internationally in securities class actions, corporate governance actions and derivative actions. LIME ENERGY: Lin Law Firm Files Securities Class Action ------------------------------------------------------- The Lin Law Firm, A Professional Law Corporation, has filed a class action lawsuit against Lime Energy Co. and certain of its officers for alleged violations of the federal securities laws in the United States District Court, Northern District of Illinois, under case no. 12 C 5704. The case is brought on behalf of a class consisting of all persons or entities who purchased Lime Energy securities between May 13, 2010 and July 17, 2012, inclusive. If you are a shareholder who purchased Lime Energy securities during the Class Period, you have until September 18, 2012 to ask the Court to appoint you as Lead Plaintiff for the class. On July 17, 2012, the Company disclosed that the Audit Committee of the Board of Directors of Lime Energy had determined that the Company's consolidated financial statements filed with the SEC on Form 10-K for the periods ended December 31, 2010 and December 31, 2011, and quarterly report on Form 10-Q for the period ended March 31, 2012, may no longer be relied upon. Specifically, the Company stated that, "[i]n some cases, it appears that non-existent revenue may have been recorded" and that "[i]n other cases, it appears that revenue may have been recorded earlier than it should have been." On this news, shares of the Company declined approximately 45%, to close on July 17, 2012, at $1.12 per share, on unusually heavy volume. The Complaint filed by The Lin Law Firm alleges that during the Class Period, Defendants made false and misleading statements or failed to disclose that:(1) the Company was improperly recording revenue; (2) the Company's revenue and financial results were overstated; (3) the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) the Company lacked adequate internal and financial controls; and (5) the Company's financial statements were materially false and misleading at all relevant times. If you purchased Lime Energy shares between May 13, 2010 and July 17, 2012, and are interested in being a Lead Plaintiff in the class action lawsuit, or if you have any questions concerning this announcement or your rights, please contact Elizabeth Lin, Esq., The Lin Law Firm, APLC, by telephone at (866) 864-3898 or (909) 595-5522, or by email to elizabethL@thelinlawfirm.com You have until September 18, 2012, to request that the Court appoint you as a Lead Plaintiff. The Lin Law Firm, A Professional Law Corporation, -- http://www.thelinlawfirm.com-- is a litigation law firm committed to representing investors nationwide in securities matters and protecting investors against corporate wrongdoing. LOUISIANA CITIZENS: Aug. 3 Class Action Status Conference Set ------------------------------------------------------------- Ed Anderson, writing for The Times-Picayune, reports that a total of 18,573 plaintiffs in a lawsuit against the state-run property insurance company should get at least $3,000 each when the claims are paid this year or in early 2013, lawyers for the group said on July 24. Fred Herman, one of the attorneys representing the plaintiffs who alleged that Louisiana Citizens Property Insurance Corp. did not properly follow its claims policy after Hurricanes Katrina and Rita in 2005, said approximately $105 million for the payments was turned over to the Jefferson Parish Sheriff's Office late on July 23. The next step will be a hearing on how the money will be paid out and how much the attorneys' fees and other legal costs will run. Mr. Herman said that the plaintiffs in the lawsuit could get paid between November and January. Mr. Herman said 24th Judicial District Court Judge Henry Sullivan in Gretna, who has handled the case since it was filed in 2006, has a status conference with the lawyers scheduled for Aug. 3 to start working through the details of the cash distribution. "There is no way it can be stopped at this point now," Mr. Herman said of the long-delayed payout to the members of the class-action lawsuit titled Geraldine Oubre et al. vs. Louisiana Citizens Fair Plan. "This is the final chapter in this part of the saga." Mr. Herman said "several thousand" other claimants may also be involved in a separate award. "As far as we are concerned they have come to the end of the road," said Wiley Beevers, another attorney in the class-action litigation. "Citizens has exhausted all legal remedies." Richard Robertson, president and chief executive officer of Citizens, agreed. "The money is already gone" from the Citizens bank account at Regions Bank, he said. Insurance Commissioner Jim Donelon said, "It is in their account. It is all over." Mr. Herman said that award to the plaintiffs could be up to $4,000 each based on how much Judge Sullivan awards to the lawyers for their fees. Based on past procedures, attorneys representing the class could get 25 percent to 40 percent of the award, he said. Citizens has battled paying the claims for years, alleging that Judge Sullivan granted the judgment without giving the state-run insurer of last resort a proper hearing and due process. The case at one point wound up before the U.S. Supreme Court, which refused to grant relief. Judge Sullivan originally awarded a judgment of $92.86 million to the members of the class action in 2009 but that has grown by $10,000 a day in interest since. Mr. Herman said the approximately $105 million was turned over shortly after the state Supreme Court refused to delay the payments in a lawsuit that Citizens filed against Regions Bank, where the cash was held in an account. The Baton Rouge-based 1st Circuit Court of Appeal took less than three hours on July 20 to deny Citizens' claim against Regions, setting up Monday's last-ditch appeal and rejection. Mr. Robertson said that even with the award, Citizens "has more than adequate cash reserves to operate smoothly." "We have a balance of $100 million to $110 million in cash reserves" but a large payout of claims from a storm this year "could put enormous pressure on the company." MARICOPA COUNTY, AZ: Sheriff Arpaio Takes Stand in Immigrant Suit ----------------------------------------------------------------- Jamie Ross at Courthouse News Service reports that Sheriff Joe Arpaio's comments in press releases, in his book, and in his notes to deputies were used against him on July 24 as he took the stand in Federal Court. Mr. Arpaio twice denied writing book excerpts the plaintiffs' attorney read him, including: "My parents, like all other immigrants exclusive to those from Mexico, held to certain hopes and truths." Mr. Arpaio, the self-proclaimed toughest sheriff in America, is defending himself from a class action accusing him of using racial profiling to target Latinos for stops and arrests. Stanley Young, plaintiffs' attorney, questioned Mr. Arpaio about a passage in his book, "Joe's Law: America's Toughest Sheriff Takes on Illegal Immigration, Drugs and Everything Else That Threatens America," that claimed: "My parents, like all other immigrants exclusive to those from Mexico, held to certain hopes and truths." Mr. Arpaio denied writing the passage, claiming his co-author, Len Sherman, wrote much of the book. "Is it a fair reading in the sentence of the book . . . that it's saying that immigrants from other places in the world had the same hopes and truths that your parents had, but people from Mexico did not?" Mr. Young asked. "Well, that's not fair," Mr. Arpaio replied. "People from Mexico have the same hopes and truths." Mr. Young asked Mr. Arpaio the meaning of another passage from the sheriff's book: "A growing movement among not only Mexican nationals but also some Mexican-Americans contends that the United States stole the territory that is now California, Arizona, and Texas." Mr. Arpaio replied: "Once again, I didn't write this; my co-author did." Attorney Young asked: "Before the publication of your book, you did look at the whole manuscript, correct?" "It may not have been every line of the manuscript, but in general terms I looked at it," Mr. Arpaio said. In an April 2009 Maricopa County Sheriff's Office press release presented as evidence, Mr. Arpaio wrote that his deputies were at risk for swine flu from their contact with illegal immigrants. "We were concerned with the people incarcerated in our jails because of this epidemic in Mexico, and I believe that we showed that a high percentage of people in our jails came from south of Mexico City," Mr. Arpaio said. "You were trying to associate people from Mexico with this disease," Mr. Young said. "No, I was just being concerned," Mr. Arpaio responded. Mr. Arpaio admitted he keeps a file with copies of press articles and letters from constituents, and said he writes thank-you letters to everyone who writes him. In one letter, dated Aug. 1, 2008, a constituent asked Mr. Arpaio to investigate McDonald's employees: "Anyway, when I was in the McDonalds at Bell Road and Boswell, (next to the Chase Bank) this noon, there was not an employee in sight, or within hearing, who spoke English as a first language -- to my dismay. From the staff at the registers to the staff back in the kitchen area, all I heard was Spanish -- except when they spoke haltingly to a customer. You might want to check this out." Mr. Young told Mr. Arpaio: "You forwarded this letter to Chief Sands, and you wrote a note, in your handwriting: For Our Operation. The operation you were referring to was the Sun City crime suppression operation. You sent Chief Sands this information about people speaking Spanish at a McDonald's." Mr. Arpaio said he gives a copy of every letter he receives about illegal immigration to Chief Brian Sands, who determines the areas for crime suppression sweeps. "You make suggestions to him as where to do the crime suppression sweeps," Mr. Young said. "You are the sheriff, and if you tell Chief Sands to do something, he'll do it." "I don't micromanage, but I presume he does," Mr. Arpaio replied. In another letter received by Mr. Arpaio, dated June 19, 2008, a constituent wrote: "If you have dark skin, then you have dark skin! Unfortunately that is the look of the Mexican illegal who are here ILLEGALLY!" Mr. Young asked Mr. Arpaio if he had ever written back to a constituent that he would not "go after other people based on their race, ethnicity, or language." The attorney asked: "Do you think it would be in keeping with your public responsibilities . . . for you to send back with your thank you letter, you know, being Mexican is not a crime. Speaking Spanish is not a crime." "I'm not going to give someone a history lesson," Mr. Arpaio said. "I'm just thanking them for their concern and input. "I like to think that the public understands what we do with our illegal immigration activities," Mr. Arpaio added. The court also heard testimony from Deputy Sheriff Louis DiPietro, who pulled over a truck, allegedly for speeding, during a crime suppression sweep. Manuel de Jesus Ortega Melendres, the lead plaintiff in the civil rights class action, was a passenger in the truck. When asked about the legality of people working as day laborers, Mr. DiPietro said that in his experience, the majority are here illegally. "You don't have to show an ID; that type of work would be easier for a person in this country illegally to get because they don't have the proper paperwork," Mr. DiPietro said. The trial was set to resume on July 25. MAXFIELD & OBERTON: Sued by CPSC Over Buckyballs/Buckycube Toys --------------------------------------------------------------- In an effort to prevent children from suffering further harm, the U.S. Consumer Product Safety Commission (CPSC) staff filed an administrative complaint [http://www.cpsc.gov/cpscpub/prerel/prhtml12/12234.pdf]on July 25, 2012, against Maxfield & Oberton Holdings LLC, of New York, alleging that Buckyballs and Buckycubes contain a defect in the design, packaging, warnings, and instructions, which pose a substantial risk of injury to the public. The Commission voted 3- 1 to approve the filing of the complaint, which seeks, among other things, an order that the firm stops selling Buckyballs and Buckycubes, notify the public of the defect, and offer consumers a full refund. In response to a request from CPSC staff, a number of retailers have voluntarily agreed to stop selling Buckyballs, Buckycubes, and similar products manufactured by other companies. CPSC staff called upon these retailers to cease distribution of high-powered, manipulative magnetic products after dozens of young children and teenagers swallowed multiple magnets, which connected inside their gastrointestinal tracts and caused internal injuries requiring surgery. The online marketplace eBay has also agreed to implement steps to remove listings by sellers for these items. The Commission staff filed the administrative complaint against Maxfield & Oberton after discussions with the company and its representatives failed to result in a voluntary recall plan that CPSC staff considered to be adequate. This type of legal action against a company is rare, as this is only the second administrative complaint filed by CPSC in the past 11 years. In May 2010, CPSC and Maxfield & Oberton announced a cooperative recall [http://www.cpsc.gov/cpscpub/prerel/prhtml10/10251.html]of about 175,000 Buckyball high powered magnets sets, because they were labeled "Ages 13+" and did not meet the federal mandatory toy standard, F963-08. The standard requires that such powerful loose as received magnets not be sold for children younger than 14. The Buckyballs and Buckycubes sets contain up to 216 powerful rare earth magnets. At the time of the 2010 recall, Maxfield & Oberton was aware of two reports of children swallowing one or more magnets without injury. Subsequent to the recall, CPSC staff continued to receive reports of children ingesting the product and learned of incidents in which children had suffered injuries when the magnets attracted to each other through the victim's gastrointestinal tract. In subsequent months, staff learned of one dozen surgeries, including numerous surgeries that involved Buckyballs. In November 2011, CPSC and Maxfield & Oberton worked cooperatively to inform and educate consumers [http://www.cpsc.gov/onsafety/2011/11/magnet-dangers/]that Buckyballs were intended for adult use only, and although the risk scenarios differ by age group, the danger when multiple rare earth magnets are ingested is the same. However, even after the safety alert [http://www.cpsc.gov/cpscpub/prerel/prhtml12/12037.html], ingestions and injuries continued to occur. Since 2009, CPSC staff has learned of more than two dozen ingestion incidents, with at least one dozen involving Buckyballs. Surgery was required in many of incidents. The Commission staff alleges in its complaint that it has concluded that despite the attempts to warn purchasers, warnings and education are ineffective and cannot prevent injuries and incidents with these rare earth magnets. CPSC has received reports of toddlers finding loose magnets left within reach and placing them in their mouths. It can be extremely difficult for a parent to tell if any of the tiny magnets are missing from a set. In some of the reported incidents, toddlers have accessed loose magnets left on a refrigerator and other parts of the home. Use of the product by tweens and teenagers to mimic piercings of the tongue, lip or cheek has resulted in incidents where the product is unintentionally inhaled and swallowed. These ingestion incidents occur when children receive it as a gift or gain access to the product in their homes or from friends. When two or more magnets are swallowed, they can attract to one another through the stomach and intestinal walls, resulting in serious injuries, such as holes in the stomach and intestines, intestinal blockage, blood poisoning and possibly death. Medical professionals may not diagnose the need for immediate medical intervention in such cases, resulting in worsening of the injuries. Due to the number of ingestion incidents received by CPSC staff since the 2010 recall announcement and 2011 safety alert, CPSC staff seeks the remedies outlined in the complaint to stop further incidents and injuries to children. MAZDA CANADA: B.C. Court of Appeal Restricts Waiver of Tort ----------------------------------------------------------- The British Columbia Court of Appeal has restricted the application of the doctrine of "waiver of tort" in its recent decision in Koubi v. Mazda Canada Inc. The Court held, in a unanimous decision, that alleged breaches of the Business Practices and Consumer Protection Act (BPCPA) and the Sale of Goods Act (SGA) could not provide the requisite "wrongdoing" for a claim in waiver of tort, and overturned the lower court's certification of the action. This decision is a significant blow to purported class actions based upon statutory causes of action where the plaintiffs cannot establish loss on a common basis. Waiver of tort is a restitutionary doctrine that permits a plaintiff to recover the benefits a defendant has obtained by its wrongdoing instead of damages measured by the plaintiff's loss. The nature and scope of the doctrine is very controversial and has been the subject of much judicial and academic debate. It is routinely pleaded in class actions in an attempt to present damages as a common issue -- based on the gains or benefits accruing to the defendant -- rather than relying on damages to class members which, in most cases, requires individual proof. In Koubi, the B.C. Court of Appeal conducted a detailed analysis of the waiver of tort doctrine and allowed the defendants' appeal from certification on the basis that the plaintiff's claims of waiver of tort premised on alleged statutory breaches did not disclose a cause of action. In resolving the issue at the certification stage, the Court drew support from the recent decision of Justice Lax in Andersen v. St. Jude Medical, Inc. and, specifically, her observation that a full factual record after a common issues trial did not assist to illuminate the legal issues regarding waiver of tort. The Court in Koubi held that it was plain and obvious that the alleged breaches of the BPCPA and SGA did not provide the predicate wrongful act required for a cause of action based on waiver of tort. Background The plaintiff, Ms. Koubi, sought to certify a class action against Mazda Canada Inc. and Mazda dealerships on behalf of all purchasers and leasees of Mazda3 vehicles, alleging that the door locks installed on the vehicles for model years 2004 to 2007 were defective and did not protect against the possibility of keyless break-ins by way of a sharp kick to the door. A remedy for the issue was developed by Mazda and introduced to the assembly line in 2007. Remedial devices were also made available to Mazda dealers for installation into affected vehicles. Initially, however, Mazda did not issue a general notification to owners or leasees of affected vehicles of either the issue or the remedial device. Ms. Koubi, who had leased a 2007 model Mazda3, contacted a representative of her Mazda dealership in October 2006 after hearing about break-in problems with Mazda3 vehicles. The representative denied any knowledge of the problem. In June 2007, she contacted Mazda Canada by email and was informed the following day that she could have a remedial device installed at her local dealership. Ms. Koubi had the remedial device installed in her vehicle without charge and never suffered a break-in or any other losses. In 2008, Mazda Canada advised owners and leasees of a Special Service Program to have the remedial devices installed without charge on all affected vehicles. Ms. Koubi commenced a class proceeding in 2008, alleging that Mazda dealerships breached implied warranties contrary to section 18 of the SGA and that Mazda Canada had engaged in deceptive acts in its representations of the quality of the Mazda3 vehicles, contrary to sections 4 and 5 of the BPCPA. The claim did not seek the recovery of any losses suffered by individual owners, either losses associated with break-ins or the expenses associated with repairing damage to the vehicles or any loss of use. Instead, the claim sought restitutionary damages and the disgorgement of profits earned by the defendants on the basis of waiver of tort. Further, the plaintiff alleged that the class was entitled to recoup all profits earned by the defendants as a result of the sale and marketing vehicles that they allegedly knew were unfit. The Supreme Court of British Columbia found that the requirements of the Class Proceedings Act had been met, and certified the action, including common issues related to waiver of tort. B.C. Court of Appeal Decision Although the appellants raised a number of grounds of appeal, Justice Neilson found that "this matter may be determined solely on the issue of whether Ms. Koubi's claim for restitutionary damages, disgorgement of profits, and waiver of tort, arising from statutory breaches of the SGA or BPCPA, discloses a cause of action." Ultimately, she determined that they do not. Justice Neilson first addressed the issue of whether waiver of tort is an independent cause of action or a remedy. She described the significance of the distinction between these two as follows: [I]f waiver of tort is only remedial, the plaintiff must prove all elements of the underlying wrong, including loss, before it may elect to seek benefits in the hands of the defendant. If it is an independent cause of action, however, the plaintiff need only prove wrongful acquisition of a benefit by the defendant before claiming disgorgement of that benefit. She conducted a review of numerous British Columbia and Ontario authorities, noting that waiver of tort has been certified in many cases, but generally without a great deal of analysis of its scope or fundamental characteristics. There has been no judgment on the doctrine of waiver of tort rendered after trial. Given the unsettled case law, Justice Neilson concluded that the chambers judge had not erred in finding that Ms. Koubi has an arguable case that the doctrine may provide an independent cause of action and may, therefore, permit the class to recover the profits earned by the defendants without having to prove individual harm or damages. Notably, the Court of Appeal did not decide the issue either way but merely found that the chambers judge had not committed an error of law in holding that it is not plain and obvious that waiver of tort is not a distinct cause of action. Justice Neilson next turned to the issue of the scope of the predicate wrongful acts that may ground a claim for waiver of tort, specifically whether it is limited to traditionally tortious conduct or whether allegations of statutory breaches of the BPCPA and/or SGA can provide the predicate wrongdoing necessary for such a claim. The general rule is that there is no tort of statutory breach and no cause of action at common law to enforce statutory rights; they are enforced via the remedies expressly provided for by the statute. Where the statutory remedy is inadequate, there may arguably be a basis for a common law right of action, but when the statute is "exhaustive" in the sense that it is "an intent to provide a complete and comprehensive statement of the law governing a matter" and offers comprehensive regulation of the subject matter, a violation of a statutory right will not give rise to an independent civil cause of action. Following a careful review of the legislative objectives and provisions of the BPCPA, Justice Neilson found that the BPCPA is an attempt to "provide an exhaustive code regulating consumer transactions, directed to both protection of consumers and fairness and consistency for all parties in the consumer marketplace." In concluding that the allegations of Mazda's statutory wrongdoing under the BPCPA does not give rise to an independent cause of action, she stated: I discern nothing in the BPCPA to support the view that the legislature intended to augment its statutory remedies by permitting consumers to mount an action against a supplier for restitutionary relief based on the novel doctrine of waiver of tort. Such a conclusion is inconsistent with the express language of ss. 171, 172(3)(a) and 192, which clearly limit recovery for pecuniary loss to restoration of the consumer's own damages or loss arising from a deceptive act. With respect to the claims against the Mazda dealerships under the SGA,Justice Neilson found that the SGAis not an exhaustive code, but claims for restitutionary damages, disgorgement of profits and waiver of tort are clearly inconsistent with the express provisions of the statute and the remedies provided therein. As a result of the conclusions that she reached, Justice Neilson decertified the class proceeding against the defendants, stating that a review of the relevant legislation was sufficient to determine the legal issues and that it was not necessary to have an entire factual record. Conclusion Until recently, courts have been unwilling to conduct a summary appraisal of claims in waiver of tort, finding instead that since it is not plain and obvious that waiver of tort is not a cause of action, the action must be certified and the waiver of tort issue be resolved at a common issues trial on a full evidentiary record. However, the B.C. Court of Appeal decision in Koubi and the recent Ontario trial decision in Anderson v. St. Jude Medical, Inc. have brought this practice into question. Both decisions indicate that a summary appraisal of whether waiver of tort is a cause of action may be appropriate and the question may be determined on an application for certification. The Koubi decision is also a significant blow to future class actions for restitutionary damages premised on breaches of a statute rather than traditional tort claims, where the individual class members have suffered no loss or cannot establish loss on a common basis. MEDIFAST INC: Plea to Dismiss Securities Suit in Maryland Pending ----------------------------------------------------------------- A motion to dismiss a securities class action complaint against Medifast, Inc. remains pending in a Maryland federal court, according to the Company's May 10, 2012 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On March 17, 2011, a class action complaint titled Oren Proter et al. v. Medifast, Inc. et al. (Civil Action 2011-CV-720[BEL]), alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b- 5 promulgated under the Exchange Act, was filed for an unspecified amount of damages in the U.S. District Court for the District of Maryland. The complaint alleges that the defendants made false and/or misleading statements and failed to disclose material adverse facts regarding the Company's business, operations and prospects. On March 24, 2011, a class action complaint titled Fred Greenberg v Medifast, Inc., et al (Civil Action 2011-CV776 [BEL], alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act, was filed for an unspecified amount of damages in the US District Court, District of Maryland. The complaint alleges that the defendants made false and/or misleading statements and failed to disclose material adverse facts regarding the Company's business, operations and prospects. On July 19, 2011, the U.S District Judge ordered the consolidation of the cases and appointment of co-lead counsel among other matters. The Greenberg case was dismissed without prejudice. The Plaintiffs subsequently filed an Amended Complaint. The Company has reviewed its allegations, subsequently filed its Motion to Dismiss which is currently pending; and intends to vigorously defend against that Complaint. Medifast, Inc. -- http://www.medifast1.com-- through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The Company's product lines include weight and disease management, meal replacement, and vitamins. It was founded in 1980 and is headquartered in Owings Mills, Maryland. MERCEDES-BENZ, USA: Wigington Rumely Files Class Action ------------------------------------------------------- Texas law firm Wigington Rumley Dunn & Ritch along with Georgia law firm Conley Griggs Partin on July 25 filed a class action lawsuit against Mercedes-Benz, USA and its German parent corporation Daimler (1:12-cv-02494-TCB McCabe et al v. Daimler AG et al) in the Northern District of Georgia on behalf of thousands of consumers who purchased model year 2003-2009 Mercedes-Benz E- Class vehicles. The lawsuit alleges that Mercedes has knowingly concealed a defect in the fuel tank assembly that poses a severe safety risk to consumers even when there is no collision or impact to the vehicle. The alleged defect in the tank causes gasoline vapor leaks inside the vehicle cabin and liquid gasoline leaks outside of the vehicle. Individuals with vehicles affected by this defect have reported strong gas odor in the vehicle following refueling. Others have reported liquid gas pooling onto the ground or other vehicle parts beneath the tank, causing understandable outrage over wasted gas and the risks of fire or other harm from exposure to raw fuel. Video footage obtained from one of the class members shows raw fuel leaking from a defective fuel tank and pooling on the ground of a 2007 Mercedes E63 AMG is available online at: http://www.MercedesFuelTankClassAction.com The Complaint alleges that failure to adequately contain raw gasoline and gasoline fumes render the vehicles unsafe to drive and unsafe to store in garages due to the potential for explosions and sickness. The lawsuit further alleges that exposure to gasoline vapor is dangerous for vehicle occupants. Known effects of exposure include respiratory problems, nausea, loss of coordination, loss of consciousness, and cancer. Plaintiffs allege despite being aware of the defect by at least 2008, Mercedes has failed to disclose the safety hazard to consumers and even instructed Mercedes-Benz technicians to only replace fuel tank parts that were under warranty after repeated owner complaints. Co-lead counsel for the class, Cale Conley, says, "The failure of a manufacturer like Mercedes to take full and prompt action to warn consumers and remedy this potentially catastrophic condition in full is egregious, and we filed this lawsuit to put a stop to this ongoing hazard to the public." Class members, including Tucker, Georgia, resident Ronan McCabe, say they would have never purchased their Mercedes-Benz vehicles had they known of the safety defect contained within the fuel tank. On January 23, 2012, the National Highway Traffic Safety Administration ("NHTSA") opened an investigation of the gasoline leaks in 2003-2006 Mercedes-Benz E55 AMG vehicles. Neil Goro, who has experience litigating defect cases against car manufacturers says, "We believe the NHTSA investigation is just the tip of the iceberg in terms of uncovering the scope of the problems that consumers are facing with these vehicles." The lawsuit alleges that the recall campaign only applied to E55 AMG vehicles affected by the problems, and did not even remedy the issue concerning gas leakage because customers are still reporting gasoline leaks. The following 2003-2009 Mercedes-Benz models are included in the class action lawsuit: E350 E500 E550 E55 AMG E63 AMG The Federal Government, through NHTSA, requires that manufacturers notify consumers of known safety problems and fix the problems at no charge to the consumer. Plaintiffs' counsel would like to hear from individuals who have smelled gas in their 2003-2009 E-Class Mercedes vehicles or seen leaking fuel in or around their vehicle. Consumers can call the class action legal team at 1-888-406-5284 or visit http://www.MercedesFuelTankClassAction.comfor more information. MINNESOTA: Judge Certifies Sex Offender Class Action ---------------------------------------------------- The Associated Press reports that a federal judge has certified a lawsuit challenging the constitutionality of the Minnesota Sex Offender Program as a class action on behalf of everyone committed to the program. U.S. District Judge Donovan Frank ruled on July 24 that the lawsuit meets the legal requirements to be certified as a class action. He pointed out that the proposed class includes about 600 people who've been indefinitely committed to the program, and he concluded that addressing each case individually would be an enormous drain on legal resources. Mr. Frank writes that they all face an identical process for treatment and possible release. He says they all raise similar allegations of a lack of realistic opportunities for earning their freedom. And says they all have sufficiently similar legal interests for their cases to go forward together. OUTBOARD MARINE: Group of Residents Mull Class Action ----------------------------------------------------- Brendan Wedley, writing for Peterborough Examiner, reports that a group of residents and former residents of the neighborhood around the former Outboard Marine Corp. is considering a class-action lawsuit for damages from the contaminated site. The group of about 30 people met at the Canadian Canoe Museum, which sits on the former industrial site, on Monaghan Rd. on July 24 to consider its next steps. It heard from a pair of lawyers from a Toronto firm that specializes in environmental law, but didn't decide whether to start working toward a class-action lawsuit. The people decided to formally form a group and meet again. Their concerns stem from the trichloroethylene (TCE) contamination in the groundwater beneath their homes. They expressed concerns about property values and they spoke about health concerns. Recent testing inside some of the homes in the neighborhood found that the levels of TCE vapors was very low, but Peterborough medical officer of health Dr. Rosana Pellizzari has acknowledged that any level of exposure to the chemical causes a risk of cancer. The people at the meeting on July 24 discussed options such as asking the local health unit to do a comprehensive health study and lobbying the governments to make it mandatory to notify residents about contamination affecting their homes. Dave Lavallee, who owns a house on Romaine St., explained the importance of organizing as a group to try to respond to the contamination issues. "All of this was done with Walkerton and many other environmental cases," he said. The group quietly listened to presentations from lawyer David McRobert, who owns a house in Peterborough and is a former in-house counsel for the Environmental Commissioner of Ontario, and lawyers Paula Boutis and Laura Bowman from Iler Campbell LLP in Toronto. Peterborough County-City Health Unit hosted its own meeting last month with Ministry of the Environment officials on hand to answer questions from residents. At the meeting last month, results were presented from testing in 26 homes along Romaine and Brioux streets earlier this year. Only three of those homes had TCE levels above 0.5 micrograms per cubic meter, with the highest level being 2.58 micrograms per cubic meter. A person who is exposed to a TCE level of 0.5 micrograms per cubic meter over a 70-year life has a one-in-one-million risk of cancer, Dr. Pellizzari has said. The Ministry of the Environment is going to do a second round of testing in the winter. It's trying to find out how much TCE vapors are rising from the groundwater, through the soil and up into homes through cracks in foundations or dirt floors in unfinished basements. It's a fundamental environmental injustice issue, Mr. McRobert said, mentioning stories in the neighborhood about an unusually high number of cases of cancer. "This needs to be addressed in some kind of manner . . . to make sure that these kind of situations don't emerge in the future," he said. Outboard Marine Corp. Canada operated on the properties near Romaine St. and Monaghan Rd. from 1956 to 1989. It had been an industrial site since 1913. After the company went into receivership, the provincial government hired a company to do cleanup and containment of contamination on the properties. About 40,000 tons, or 2,300 dump truck loads, of contaminated soil was removed from the properties in 2002. And the ministry is overseeing ongoing monitoring and treatment of the groundwater contamination to prevent the spread of the plume. Mr. McRobert referred to the Northstar Aerospace $3-million settlement for TCE contamination in Cambridge, Ont. in 2009. "We do have these legacies to deal with," he said. POWERWAVE TECHNOLOGIES: Still Defends Shareholder Suit in Calif. ---------------------------------------------------------------- Powerwave Technologies, Inc. continues to defend itself against a shareholder lawsuit in California, according to the Company's May 11, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended April 1, 2012. In the first quarter of 2012, a purported shareholder class action complaint was filed in the U.S. District Court for the Central District of California against the Company, its President and Chief Executive Officer and its Chief Financial Officer. The complaint, Pawel I. Kmiec v. Powerwave Technologies, Inc. et. al. asserts claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder. The complaint purports to state claims on behalf of all persons who purchased the Company's Common Stock between February 1, 2011 and October 18, 2011 and seeks compensatory damages in an amount to be proven at trial. The complaint alleges that the defendants made misleading statements or omissions concerning the Company's operations and projected sales revenues. Plaintiffs were expected to file a consolidated amended complaint by June 25, 2012. The Company believes that the purported shareholder class action is without merit and intends to defend it vigorously. Powerwave Technologies, Inc. -- http://www.powerwave.com/-- designs, manufactures, and markets end-to-end wireless solutions for wireless communications networks worldwide. The Company was founded in 1985 and is headquartered in Santa Ana, California. PROSPER MARKETPLACE: Still Defends Securities Suit in California ---------------------------------------------------------------- Prosper Marketplace, Inc. continues to defend itself against a securities class action complaint in California, according to the Company's May 15, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On November 26, 2008, plaintiffs, Christian Hellum, William Barnwell and David Booth, individually and on behalf of all other plaintiffs similarly situated, filed a class action lawsuit against the Company and certain of its executive officers and directors in the Superior Court of California, County of San Francisco, California. The suit was brought on behalf of all loan note purchasers on the platform from January 1, 2006 through October 14, 2008. The lawsuit alleges that the Company offered and sold unqualified and unregistered securities in violation of the California and federal securities laws. The lawsuit seeks class certification, damages and the right of rescission against the Company and the other named defendants, as well as treble damages against the Company and the award of attorneys' fees, experts' fees and costs, and pre-judgment and post-judgment interest. On February 25, 2011, the plaintiffs filed a Third Amended Complaint, which removed David Booth as a plaintiff and added Brian Russom and Michael Del Greco as plaintiffs. The new plaintiffs are representing the same putative class and prosecuting the same claims as the previously named plaintiffs. On February 29, 2012, the court granted the plaintiffs' motion for class certification. Greenwich Action The Company's insurance carrier with respect to the class action lawsuit, Greenwich Insurance Company, denied coverage. On August 21, 2009, the Company filed suit against Greenwich in the Superior Court of California, County of San Francisco, California. The lawsuit sought a declaration that the Company was entitled to coverage under its policy with Greenwich for losses arising out of the class action lawsuit as well as damages and the award of attorneys' fees and pre- and post-judgment interest. On January 26, 2011, the court issued a final statement of decision finding that Greenwich has a duty to defend the class action lawsuit, and requiring that Greenwich pay the Company's past and future defense costs in the class action suit up to $2.0 million. Greenwich subsequently made payments to the Company in the amount of $2.0 million to reimburse the Company for the defense costs it had incurred in the class action suit. As a result, Greenwich has now satisfied its obligations with respect to the Company's defense costs for the Hellum suit, with the exception of $142,584 in pre-judgment interest that Greenwich will be required to pay to the Company when a final judgment has been entered in the suit and all appeals have been exhausted. On July 1, 2011, the Company and Greenwich entered into a Stipulated Order of Judgment pursuant to which the Company agreed to dismiss its remaining claims against Greenwich. On August 12, 2011, Greenwich filed a notice of appeal of the court's decision regarding Greenwich's duty to defend up to $2.0 million. The Company intends to vigorously defend the class action lawsuit. The Company cannot, however, presently determine or estimate the final outcome of the lawsuit, and there can be no assurance that it will be finally resolved in the Company's favor. If the class action lawsuit is not resolved in the Company's favor, the Company might be obliged to pay damages, and might be subject to such equitable relief as a court may determine. Accordingly, the Company has not recorded an accrued loss contingency in connection with its sale of notes through the platform prior to November 2008. Accounting for loss contingencies involves the existence of a condition, situation or set of circumstances involving uncertainty as to possible loss that will ultimately be resolved when one or more future event(s) occur or fail to occur. An estimated loss in connection with a loss contingency shall be recorded by a charge to current operations if both of the following conditions are met: first, the amount can be reasonably estimated; and second, the information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements. As of March 31, 2012, the lawsuits are in their preliminary stages and their probable outcomes cannot presently be determined, nor can the amount of damages or other costs that might be borne by Prosper be estimated. Prosper Marketplace, Inc. operates as a peer-to-peer lending marketplace in the United States. It connects prospective borrowers with people who have money and a willingness to lend through an online community. The Company handles funding and servicing of the loan on behalf of the matched borrowers and investors. It is based in San Francisco, California. PROTECTIVE LIFE: Suit Related to Group Health Business Pending -------------------------------------------------------------- Protective Life Corporation disclosed in its July 23, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission that a class action lawsuit is currently pending against it. Group health coverage issued through associations and credit insurance coverages have received some negative publicity in the media as well as increased regulatory consideration and review and litigation. The Company has a small closed block of group health insurance coverage that was issued to members of an association; a purported class action lawsuit is currently pending against the Company in connection with this business. RICK'S CABARET: Still Defends Securities Class Lawsuits ------------------------------------------------------- Rick's Cabaret International, Inc. continues to defend itself against two class action complaints alleging violations of securities laws, according to the Company's May 10, 2012, Form 10- Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. Two securities class action lawsuits were filed against the Company in June 2011 in the U.S. District Court for the Southern District of Florida. The plaintiffs claim to represent recipients of text messages. The complaints allege that the Company violated the Telephone Consumer Protection Act (the TCPA) by sending unsolicited advertisements by text message to the plaintiff and other recipients nationwide during the four-year period preceding the lawsuit without the prior express invitation or permission of the recipients. On January 20, 2012, an amended complaint was filed in one of the cases to add one of the Company's subsidiaries as a defendant. In October 2011, the Company filed a declaratory judgment action in U.S. District Court for the Southern District of Texas (Houston division) against the Company's general liability insurance carrier to provide coverage for these two TCPA cases. On January 24, 2012, the presiding judge issued an order dismissing the case against the Company's carrier. Therefore, there is no insurance coverage for this case. The Company denies any liability in this matter and is vigorously defending the allegations. No updates were reported in the Company's latest Form 10-Q filing with the SEC. Rick's Cabaret International, Inc. -- http://www.rick's.com/-- through its subsidiaries, owns and operates upscale adult nightclubs serving primarily businessmen and professionals in the United States. Its nightclubs offer live adult entertainment, restaurant, and bar operations. The Company was founded in 1982 and is based in Houston, Texas. SEARCHMEDIA HOLDINGS: Shareholder Suit Settlement Okayed in April ----------------------------------------------------------------- SearchMedia Holdings Limited obtained final court approval in April of a settlement resolving shareholder lawsuits in the United States, according to the Company's May 15, 2012, Form 20-F filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011. A shareholder complaint was filed on September 13, 2010 by Sid Murdeshwar against SearchMedia Holdings, the former Ideation officers and directors and certain of the SearchMedia Holdings' officers and directors (the Individual Defendants) as a purported class action on behalf of the shareholders of SearchMedia Holdings in the U.S. District Court for the Central District of California. The case was filed under the caption Sid Murdeshwar, Individually and on Behalf of All Others Similarly Situated, Plaintiff v. SearchMedia Holdings Limited f/k/a Ideation Acquisition Corp., Robert N. Fried, Phillip Frost, Rao Uppaluri, Steven D. Rubin, Glenn Halpryn, Thomas E. Beier, David H. Moskowitz, Shawn Gold, Garbo Lee, Paul Conway, Qinying Liu, Earl Yen, and Jennifer Huang, Defendants . A separate shareholder complaint was filed on December 23, 2010 by Hymie Akst against SearchMedia Holdings, the former Ideation officers and directors and certain of the SearchMedia Holdings' officers and directors (the Individual Defendants) as a purported class action on behalf of the shareholders of SearchMedia Holdings in the United States District Court for the Southern District of Florida. The case was filed under the caption Hymie Akst, Individually and on Behalf of All Others Similarly Situated, Plaintiff v. SearchMedia Holdings Limited f/k/a Ideation Acquisition Corp., Robert N. Fried, Phillip Frost, Rao Uppaluri, Steven D. Rubin, Glenn Halpryn, Thomas E. Beier, David H. Moskowitz, Shawn Gold, Garbo Lee, Paul Conway, Qinying Liu, Earl Yen, and Jennifer Huang, Defendants. On February 17, 2011, the Murdeshwar action was transferred to the U.S. District Court for the Southern District of Florida. The Akst plaintiffs voluntarily dismissed their action on February 23, 2011. On April 11, 2011, the Murdeshwar plaintiffs amended their complaint, alleging, among other things, that the directors of SearchMedia Holdings violated the federal securities laws by making false and misleading statements regarding Ideation's acquisition of the target company, SearchMedia International, and by overstating SearchMedia International's financial results. The amended complaint further alleged that the individual Defendants are liable for the alleged misrepresentations as controlling persons. The complaint sought certification of a class of SearchMedia Holdings' shareholders who purchased or otherwise acquired SearchMedia Holdings securities between April 1, 2009 and August 20, 2010, and all persons who were holders of SearchMedia Holdings on October 2, 2009, an award of compensatory damages, an award of reasonable fees and costs incurred in the action, and such other relief as the Court deems just and proper. In August 2011, the Court dismissed the claims pertaining to alleged misstatements and omissions made about SearchMedia International's financial results and future prospects, but did not dismiss the claims regarding the alleged misstatements and omissions in Ideation's proxy statement. In September 2011, after attending a mediation, SearchMedia Holdings and certain of the individual Defendants (Robert Fried, Phillip Frost, Rao Uppaluri, Steven Rubin, Glenn Halpryn, Thomas Beier, David Moskowitz and Shawn Gold) (the Settling Defendants) reached a tentative settlement with the Akst Plaintiffs. Under the terms of the settlement, SearchMedia Holdings' D&O insurer agreed to pay $2.75 million in exchange for a release of the claims asserted against the Settling Defendants by the Akst plaintiffs and the putative class members. SearchMedia Holdings and the other Settling Defendants did not admit to any wrongdoing. The settlement does not include a release of the Plaintiffs' claims against SearchMedia International or Defendants Garbo Lee, Qinying Liu, Earl Yen, Jennifer Huang and Paul Conway, who have not been served with the amended complaint. In January 2012, the court dismissed without prejudice the claims against these remaining Defendants for the plaintiffs' failure to timely effect service on them. On April 23, 2012, the court held a final fairness hearing on the settlement. There were no objections to the settlement. On April 24, 2012, the court signed a final judgment approving the settlement and dismissing the lawsuit with prejudice. SearchMedia Holdings Limited -- http://www.searchmediaholdings.com -- and its subsidiaries is a multi-platform media company operating primarily in the out-of-home advertising industry in the Peoples Republic of China. Out-of-home advertising typically refers to advertising media in public places, such as billboards, in-elevator displays, street furniture and transit area displays. The Company's core outdoor billboard and in-elevator platforms are complemented by its transit advertising platform, which together enables us to provide multi-platform, "one-stop shop" services for its local, national and international clients. SERVICE CORPORATION: Calif. Sup. Ct. Keeps Class Certification -------------------------------------------------------------- Eagan Avenatti, LLP announces that the California Supreme Court has refused to set aside a lower court decision certifying a class action in a mass grave desecration lawsuit filed in the Superior Court of California, County of Los Angeles, against publicly traded Service Corporation International. The lawsuit alleges that SCI and its employees purposely desecrated hundreds of Jewish graves and improperly disposed of human remains and bones in mass graves located in "dump areas" of Eden Memorial Park cemetery in Los Angeles. The case is titled Sands v. Service Corporation International, et al., Case No. BC421528. The damages in the case are expected to exceed $500 million. In particular, the lawsuit alleges that groundskeepers were repeatedly instructed by cemetery management to secretly break concrete vaults with a backhoe and remove, dump and/or discard the human remains, including human skulls, to make room for new burials, all in the interest of increased profits. According to the Complaint, the Defendants took considerable steps to conceal their fraudulent actions by threatening employees and witnesses with retaliation and the loss of their jobs. The lower court previously sanctioned SCI in the case after SCI employees were caught on videotape tampering with and destroying evidence. Anderson Cooper reported on the lawsuit on 60 Minutes earlier this year. In an En Banc decision received July 23, the Supreme Court denied SCI's attempt to have the lower court's decision overturned. As a result, the case will proceed to trial and tens of thousands of Jewish families will have the opportunity to seek damages against SCI for the Company's fraud and deceit. "We are pleased with the Court's decision and look forward to trying this case to a jury," said lead attorney Michael Avenatti of Eagan Avenatti, LLP, the lead law firm representing the families. "The verdict in this case may rightly cause the bankruptcy of SCI and completely wipe out all equity in the company." This is not the first time that Defendant SCI, the largest owner of cemeteries and funeral homes in the United States, has come under fire for similar conduct. In 2003, the State of Florida brought criminal charges against the Company after groundskeepers at Menorah Gardens, another SCI owned and operated Jewish cemetery, testified to the accuracy of similar allegations. SCI later paid well in excess of $100 million to settle civil lawsuits that followed. SCI is North America's largest provider of death-care products and services. SUPERVALU INC: Continues to Defend Suit Over C&S Transaction ------------------------------------------------------------ In December 2008, a class action complaint was filed in the United States District Court for the Western District of Wisconsin against SuperValu Inc. alleging that a 2003 transaction between the Company and C&S Wholesale Grocers, Inc. ("C&S") was a conspiracy to restrain trade and allocate markets. In the 2003 transaction, the Company purchased certain assets of the Fleming Corporation as part of Fleming Corporation's bankruptcy proceedings and sold certain assets of the Company to C&S which were located in New England. Since December 2008, three other retailers have filed similar complaints in other jurisdictions. The cases have been consolidated and are proceeding in the United States District Court for the District of Minnesota. The complaints allege that the conspiracy was concealed and continued through the use of non-compete and non-solicitation agreements and the closing down of the distribution facilities that the Company and C&S purchased from each other. Plaintiffs are seeking monetary damages, injunctive relief and attorneys' fees. The Company is vigorously defending these lawsuits. Separately from these civil lawsuits, on September 14, 2009, the United States Federal Trade Commission ("FTC") issued a subpoena to the Company requesting documents related to the C&S transaction as part of the FTC's investigation into whether the Company and C&S engaged in unfair methods of competition. The Company cooperated with the FTC. On March 18, 2011, the FTC notified the Company that it had determined that no additional action was warranted by the FTC and that it had closed its investigation. No further updates were reported in the Company's July 23, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 16, 2012. Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. The Company regularly monitors its exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and its estimates with respect to related costs and exposures. With respect to the consolidated lawsuit, the Company believes the chance of a negative outcome is remote. It is possible, although management believes it is remote, that material differences in actual outcomes, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates, could have a material adverse effect on the Company's financial condition, results of operations or cash flows. SUPERVALU INC: Wisconsin Suit Remains Stayed Pending IOS Ruling --------------------------------------------------------------- In September 2008, a class action complaint was filed against SuperValu Inc., as well as International Outsourcing Services, LLC ("IOS"), Inmar, Inc., Carolina Manufacturer's Services, Inc., Carolina Coupon Clearing, Inc. and Carolina Services, in the United States District Court in the Eastern District of Wisconsin. The plaintiffs in the case are a consumer goods manufacturer, a grocery co-operative and a retailer marketing services company who allege on behalf of a purported class that the Company and the other defendants (i) conspired to restrict the markets for coupon processing services under the Sherman Act and (ii) were part of an illegal enterprise to defraud the plaintiffs under the Federal Racketeer Influenced and Corrupt Organizations Act. The plaintiffs seek monetary damages, attorneys' fees and injunctive relief. The Company intends to vigorously defend this lawsuit, however all proceedings have been stayed in the case pending the result of the criminal prosecution of certain former officers of IOS. No further updates were reported in the Company's July 23, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 16, 2012. Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. The Company regularly monitors its exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and its estimates with respect to related costs and exposures. With respect to the stayed lawsuit, the Company believes the chance of a negative outcome is remote. It is possible, although management believes it is remote, that material differences in actual outcomes, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates, could have a material adverse effect on the Company's financial condition, results of operations or cash flows. THERABIOGEN INC: Still In Negotiations to Settle "Conde" Suit ------------------------------------------------------------- TheraBiogen, Inc. has been sued in California in a purported class action regarding allegations that the product packaging should be modified. The Company has reviewed the packaging with Registrar Corp, which helps businesses comply with U.S. Food and Drug Administration 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 further updates were reported in the Company's July 23, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended May 31, 2012. The Company says no assurances can be given as to the outcome of this litigation or its impact upon the Company or its business. TICKETMASTER: Consumer Class Action Settlement Challenged --------------------------------------------------------- Amanda Bronstad, writing for The National Law Journal, reports that eight lawyers representing more than a dozen of the nearly 100 objectors to a consumer class action settlement with Ticketmaster urged a Los Angeles judge on July 24 to reject the deal, which they called the latest example of paying cash to the lawyers while the class members make do with coupons. Addressing Los Angeles Superior Court Judge Kenneth Freeman, the lawyers took turns during a fairness hearing to argue against final approval of the deal, which would grant $16.5 million in fees and costs to plaintiffs attorneys and discounts off future ticket purchases to a nationwide class of consumers. Judge Freeman gave the deal his tentative approval on Nov. 2. He issued no immediate ruling following the latest hearing. "You should not force class members to do business with the defendant in order to receive a benefit," argued Robert Chojnacki of Robert C. Chojnacki Law Offices in Menlo Park, Calif. "Here, the class counsel gets $15 million in cash and class members get coupons." Steven Blonder, a principal at Chicago's Much Shelist, one of the plaintiffs' firms in the case, defended the deal, which would resolve claims originally brought in 2003 that Ticketmaster imposed inflated fees to process ticket orders and for United Parcel Service deliveries. "The settlement has the presumption of fairness," he said. Under the deal, each class member would receive an e-mailed discount code worth $1.50 against each future ticket purchase and a $5 discount code for each UPS delivery fee -- both capped at 17 transactions. The estimated class encompasses customers who bought tickets from Oct. 21, 1999, through Oct. 19, 2011. The deal would provide $20,000 to each of two class representatives and a guaranteed $45 million in cy pres payments to an unidentified group of charities in the event that not all the discounts are redeemed. Most of those payments would be in the form of free tickets. The cy pres doctrine, from the French for "as close as possible," allows parties to donate to related charities the excess money from legal settlements. Mr. Blonder said that the objectors, who represent a small percentage of the estimated 50 million people in the class, have failed to prove the deal is unfair. "Clearly, 100 out of 50 million is a de minimis number," he said. Under the deal, plaintiffs attorneys would receive $15 million in fees and about $1.5 million in costs. W. Michael Hensley, a shareholder in the Santa Ana, Calif., office of AlvaradoSmith, another plaintiffs' firm in the case, said the attorneys had laid out their costs and fees in "excruciating detail." "We have not asked for all of the fees that we have actually generated," he said, noting that the lodestar amount came to $6.5 million. He said that this case, unlike others cited by the objectors, took nearly nine years to litigate. The case was "hotly contested," said Ticketmaster attorney Gail Lees, chairwoman of the class action practice at Gibson, Dunn & Crutcher. After Judge Freeman rejected an earlier proposed settlement last year, she said, Ticketmaster agreed to post more detailed disclosures about attorney fees on its Web site and e-mailed reminders to class members about their discount codes. She noted that plaintiffs attorneys faced an uphill battle from the beginning. "The plaintiffs faced a very serious and real risk of a loss at trial," she said. It was not appropriate to name the recipients of the cy pres payments at this time, she continued, because distribution of those funds, if necessary, was "quite far down the line." Ms. Lees cited California state precedents supporting use of non- cash payments in class action settlements, most prominently Frank Chavez v. Netflix Inc. In that case, California's First District Court of Appeal in 2008 concluded that Netflix's offer to give class members a limited number of rentals at no charge did not constitute a "coupon" settlement. But Joshua Furman, an objector attorney, argued that Chavez provides no "rubber stamp" for coupon settlements. Unlike the Ticketmaster deal, Chavez was not a "pure" coupon settlement, said Furman, a solo practitioner in Beverly Hills, Calif. Objector attorneys saw no reason why Ticketmaster couldn't disclose the names of the charitable organizations. They noted a July 13 ruling by the U.S. Court of Appeals for the Ninth Circuit rejecting a class action settlement because of excessive attorney fees and cy pres payments to unnamed charities. In Dennis v. Kellogg Co., the Ninth Circuit said a proposal to feed the indigent lacked enough of a nexus to the alleged false advertising claims against Kellogg Co. over its Frosted Mini-Wheats cereal. "These cases are coming under increasing scrutiny," said John Davis, an objector attorney at the Law Office of John W. Davis in San Diego. "You're hard pressed to say there's nothing wrong with coupon settlements." TONGXIN INT'L: Gets Final OK of $3-Mil. Shareholder Suits Deal -------------------------------------------------------------- Tongxin International Ltd. announced that it received final approval of its $3 million settlement agreement resolving class- action lawsuits filed in January 2011. The final judgment and order of dismissal with prejudice was entered on July 20, 2012. Company Statement CHANGSHA, China -- July 23, 2012 -- Tongxin International Ltd., (Pink Sheets: TXIC), a China-based manufacturer of engineered vehicle body structures ("EVBS") and stamped parts for the commercial automotive industry, reported that the United States District Court for the Central District of California granted final approval of the settlement agreement entered between Tongxin and the plaintiffs in the class-action lawsuits against the Company filed in January 2011. A tentative settlement agreement with the plaintiffs of the shareholder lawsuits was reached earlier this year, and the Court previously granted preliminary approval of the settlement. The hearing on the motion for final approval of the settlement was held on July 9, 2012, and approval was granted by the Court. Under the settlement agreement, all shareholder lawsuits against the Company will be terminated in return for payment of a total settlement amount of $3 million, which is to be paid by the Company's D&O insurance carrier. The class covered by the lawsuits consists of all persons who purchased Tongxin common stock during the period from May 18, 2009, through December 17, 2010. Plaintiffs had alleged that Tongxin and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing, between May 18, 2009, and December 17, 2010, allegedly materially false and misleading statements regarding Tongxin International's business and financial results. Under the terms of the settlement as approved by the Court, there is no admission of any validity of the claims, no admission of any wrongdoing, no admission of any liability, and no admission of any fault. About Tongxin International Ltd. Tongxin International Ltd., the largest independent supplier of EVBS in China, is capable of providing EVBS for both the commercial truck and light vehicle market segments. The Company also designs, fabricates and tests dies used in the vehicle body structure manufacturing process. EVBS consists of exterior body panels including doors, floor pans, hoods, side panels and fenders. Tongxin International Ltd. maintains a network of over 130 customers throughout 21 provinces in China. Headquartered in Changsha, the Company also maintains regional manufacturing in Dali, Ziyang and Zhucheng. For more information, please visit http://www.txicint.com/or http://www.hntx.com/ TRANS1 INC: Continues to Defend Securities Suit in N.C. ------------------------------------------------------- In January 2012, Trans1, Inc. received notice that a class action lawsuit had been filed in the U.S. District Court Eastern District, North Carolina, on behalf of a class consisting of all persons other than the defendants who purchased TranS1 securities between February 21, 2008 and October 17, 2011. The Company disclosed in its May 14, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012, that it is in the process of responding to this lawsuit. The Company is unable to predict what impact, if any, the outcome of this matter might have on our consolidated financial position, results of operations, or cash flows. TREE.COM INC: Trial in "Schnee" Class Suit Set for April 2013 ------------------------------------------------------------- A class action lawsuit against Tree.com, Inc.'s subsidiaries captioned Schnee v. LendingTree, LLC and Home Loan Center, Inc., No. 06CC00211 (Cal. Super. Ct., Orange Cty.) is scheduled for trial in April 2013, according to the Company's May 15, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. In October 2006, four individual plaintiffs filed this putative class action against LendingTree, LLC and HLC in the California Superior Court for Orange County. The plaintiffs allege that they used the LendingTree.com website to find potential lenders and without their knowledge were referred to LendingTree's direct lender, HLC; that Lending Tree and HLC did not adequately disclose the relationship between them; and that HLC charged the plaintiffs higher rates and fees than they otherwise would have been charged. Based upon these allegations, Plaintiffs assert that LendingTree and HLC violated the California unfair competition law, California Business and Professions Code Sec. 17500, and the Consumer Legal Remedies Act. The plaintiffs purport to represent a nationwide class of consumers who sought lender referrals from LendingTree and obtained loans from HLC since December 1, 2004. The plaintiffs seek damages, restitution, attorneys' fees and injunctive relief. In September 2009, the plaintiffs' motion for class certification was denied in its entirety; the plaintiffs appealed such action and in July 2011, the Court of Appeals issued its opinion denying the plaintiffs' appeal. Remittitur was filed in September 2011. This matter is currently scheduled for trial in April 2013. Based in Charlotte, North Carolina, Tree.Com, Inc. -- http://www.lendingtree.com/-- through its subsidiaries, owns various brands and businesses that provide information, tools, advice, products, and services for critical transactions in consumers' lives. Its brands include LendingTree.com, GetSmart.com, DegreeTree.com, LendingTreeAutos.com, DoneRight.com, ServiceTree.com, InsuranceTree.com, and HealthTree.com that serve as an ally for consumers who are looking to make informed purchase decisions and compare shops for loans and other services from multiple businesses and professionals. TRIAGE STAFFING: Faces Class Action Over Hep. C Outbreak -------------------------------------------------------- Jackie Bruno, writing for NECN.com, reports that as New Hampshire was preparing to test thousands of people for Hepatitis C, as many as six more states could be dealing with a similar situation. A new class action lawsuit is being brought against Triage Staffing. That's the company that hired the accused suspect David Kwiatkowski and brought him to Exeter hospital in New Hampshire. While at Exeter hospital, Mr. Kwiatkowski is accused of injecting himself with powerful drugs, and then leaving the needles for re-use. Since he had Hepatitis C, he put thousands at risk for the virus and infected at least 32 patients. "Hepatitis c infection down the road can cause serious liver problems and you can get inflammation, scarring of the liver, chirrosis, and increase the risk of liver failure and increase the risk for liver cancer," said Dr. Mallika Marshall. Attorney Domenic Paolini says Triage should have researched Kwiatkowski's background before they placed him in Kansas, Georgia, Maryland, Michigan, New York, Arizona and finally New Hampshire. "Triage was an enabler, what they did, by not doing their due diligence, by not checking on Mr. Kwiatkowski, by not keeping up on what was going on with them at his various assignments they actually enabled him," Mr. Paolini said. The class action lawsuit alleges that Mr. Kwiatkowski had a long history of red flags, everything from allegedly stealing drugs, to falsely claiming he had cancer. "If you place somebody at a hospital for six months, when they leave make a phone call to the hospital, how did they work out, why did they leave, were there any problems, collect that kind of information," Mr. Paolini said. Triage staffing has not commented on this lawsuit yet but, patient advocate Eleanor Casey Crane says there should more oversight on these healthcare staffing companies. "As a former legislator I would hope that every legislator that's listening and every legislator around the country will realize this is almost like an accident waiting to happen," Ms. Crane said. "We need to regulate some of these companies that are in our health care industry. New Hampshire was set to ask nearly 6,000 people who could have been affected by this outbreak . . . at Exeter Hospital to get themselves tested. VISA INC: Grocers Group Opposes Interchange Fee Suit Settlement --------------------------------------------------------------- Andrew R. Johnson of The Wall Street Journal reports that the National Grocers Association, one of the plaintiffs suing Visa Inc. V +3.74% and MasterCard Inc. MA +2.77% over credit-card transaction fees, said July 26, 2012, it opposes the $7.25 billion class-action settlement reached in the case earlier this month. The trade group, which represents more than 1,200 companies, is among a growing number of voices to blast the deal for what they say is a failure to address problems in how the card networks set so-called interchange or swipe fees. Target Corp. TGT +1.16% and Wal-Mart Stores Inc., WMT +2.21% which aren't plaintiffs, have also criticized the settlement, which requires court approval. The National Grocers Association "joined the lawsuit on behalf of its independent retail grocer members over seven years ago to bring about real reform of the anticompetitive credit-card swipe fee system," said Peter Larkin, president and chief executive of the trade group, in a statement. "This proposed settlement agreement fails in this regard by allowing Visa and MasterCard to continue their dominant anticompetitive practices." The NGA's decision to oppose the settlement applies only to the trade group itself, not its members, which will have the ability to formally opt in or out of the agreement. Analysts don't expect enough merchants will opt out of the deal to derail it. Plaintiffs accused the credit-card companies of conspiring to set interchange fees arbitrarily high. Another plaintiff, the National Association of Convenience Stores, also said it rejected the deal when it was announced July 13. "We think that those who are opposed to the settlement are extraordinarily misguided because they haven't considered the practical alternatives to the settlement, which are very undesirable for merchants because it involves another four or five or six years of litigation and no realistic opportunity for a better outcome even after more litigation," said Craig Wildfang, a partner with Robins, Kaplan, Miller & Ciresi LLP, one of the law firms representing the class plaintiffs in the lawsuit. Under the settlement, Visa, MasterCard and card-issuing banks including Bank of America Corp. BAC +1.41% and J.P. Morgan Chase JPM +1.82% & Co. agreed to pay more than $6 billion to merchants. The card networks also agreed to temporarily reduce swipe fees, or interchange fees, on credit-card transactions and allow merchants to surcharge customers who pay with cards, an ability that retail groups have sought but Visa and MasterCard prohibited. The grocers group said the ability to charge customers extra for using credit cards includes "burdensome restrictions," which makes it "unlikely that many of NGA's members will be able to make this provision workable." The provision would require merchants to post signs notifying customers that they surcharge and include the amount of any fee on receipts, measures that the card networks said are intended to protect consumers. Merchants wouldn't be allowed to surcharge Visa and MasterCard cardholders more than what they charge customers paying with American Express Co. AXP +3.05% and Discover Financial Services DFS +3.95% cards. A spokesman for MasterCard declined to comment on the NGA's statements. A Visa spokesman didn't immediately respond to a request for comment, though Visa Chairman and Chief Executive Joe Saunders said on a conference call Wednesday the company expects the settlement will "have support among the retail community in the U.S. because it is a fair and an appropriate compromise for all parties." If merchants representing 25% of Visa and MasterCard's credit-card sales volume opt out of the settlement, the card networks have the ability to cancel it. The likelihood of that occurring, though, is slim, according to Keefe, Bruyette & Woods, which performed an analysis of sales of the top 100 U.S. retailers. Those merchants combined equal about 25% of Visa and MasterCard credit-card volume, KBW said, noting 15 of those retailers have already agreed to a separate settlement with the card networks. "Even in the worst-case scenario where all of the remaining top 85 retailers ... opt out of a settlement, their representation of volume would amount to roughly 20%," KBW said. "Outside of a coordinated and large retailer movement to opt out of a settlement, we believe the risks to a settlement are relatively low." WASHINGTON MUTUAL: Judge Tosses Motion to Block MBS Class Action ---------------------------------------------------------------- Cohen Milstein Sellers & Toll PLLC on July 24 disclosed that a federal judge on July 23 rejected a motion by two former WaMu (Washington Mutual Bank) subsidiaries to escape a class action lawsuit alleging Securities Act violations filed by plaintiffs who purchased mortgage-backed certificates from the savings and loan that in 2008 became before the nation's largest bank failure. The decision paves the way for a Sept. 17, 2012, trial date, according to plaintiffs' co-lead counsel Steven Toll of Cohen Milstein Sellers & Toll PLLC. "This is a terrific decision for the plaintiffs. The case is prepared and we are looking forward to trial," said Mr. Toll, whose firm along with Scott + Scott LLP, represent the Boilermakers National Annuity Trust, Doral Bank Puerto Rico, and the Policemen's Annuity and Benefit Fund of Chicago. The case involves substantial claims in mortgage-backed certificates issued and underwritten by WaMu and its related entities. The value of the certificates, which were supported by pools of residential mortgage loans, collapsed soon after issuance. The named plaintiffs, representing a court-certified class of investors, allege that loans backing the securities were "fundamentally impaired" and that they were misled as to the quality of the loans' underwriting. In denying the defendant's motion for summary judgment, which sought to dismiss the plaintiffs' claims before trial, Judge Marsha J. Pechman of the U.S. District Court for the Western District of Washington, in Seattle, wrote, "Plaintiffs have successfully raised a dispute of fact as to whether WaMu systematically deviated from its underwriting guidelines so as to render the statements in the offering documents false or misleading." Furthermore, she added, "Plaintiffs have also shown a dispute of fact as to whether the disclosures regarding exceptions were accurately reported to investors." Judge Pechman also rejected the defendant's argument that losses claimed were caused entirely by something other than the disregard for WaMu's loan underwriting guidelines, and upheld the plaintiffs' right to include expert testimony from a highly regarded statistician and a loan underwriting expert, as well as from several former WaMu employees whose testimony would be helpful to the plaintiffs' claims. Additional information about the case and a copy of the court order (Case No. C09-37MJP) are available online at http://www.cohenmilstein.com/news.php?NewsID=516 * Consumer Advisory Group Mulls Class Action v. Korean Banks ------------------------------------------------------------ Yonhap reports that a Korean consumer advocacy group said on July 25 that it is preparing for a class action suit against banks' alleged collusion to rig key money-market rates, as suspected rate fixing is presumed to add to households' debt burden. The Fair Trade Commission, the country's anti-trust watchdog launched an investigation into major local banks and brokerage houses over their suspected involvement in rigging rates on the 91-day certificate of deposit (CD), or the benchmark for bank lending rates. The Financial Consumer Agency said it will accept applications from borrowers who believe the alleged rate fixing has caused financial damage to them, to prepare for the class action suit. A CD is a financial instrument sold by banks and circulated in secondary markets by securities firms. Most bank mortgage loans are tied to CD rates, raising chances that higher CD rates might contribute to increased debt-repaying burdens for households. According to the agency, suspected rate fixing is estimated to have incurred around KRW1.6 trillion ($1.4 billion) in damage per year for borrowers. Currently, the CD rates are announced twice a day via quotations by 10 local securities firms based on CDs sold by seven banks. The probe came as the CD rates remained relatively high even as other market rates fell amid the slowing economy and prospects for a rate cut by the central bank. Household lending handled by local banks and non-bank institutions totaled a record 642.7 trillion won at the end of May, according to data by the central bank. The probe came as similar investigations are underway in the United States and Britain into several banks, including Barclays, for their alleged involvement in rigging the London Interbank Offered Rate, or Libor, a benchmark interest rate in the global financial market. * Ex-AG Files Mortgage Class Action v. Loan Servicers, Law Firms ---------------------------------------------------------------- The Associated Press reports that the law firm of Ohio's scandal- scarred ex-attorney general is among those that have filed a class-action lawsuit in Cleveland on behalf of homeowners victimized by foreclosure fraud. The action by attorney Marc Dann and others was filed on July 24 in Cuyahoga County Common Pleas Court. It targets several loan servicers and law firms that prosecute foreclosures, claiming they purposefully engaged in fraud by forging paperwork and foreclosing on mortgages they don't own. Mr. Dann resigned as attorney general in 2008 amid a sexual harassment scandal. He pleaded guilty in 2010 to improperly paying two aides from political and office accounts and not disclosing campaign expenses. The Ohio Supreme Court is weighing a six-month law license suspension for his actions. While in office, Mr. Dann took on some of the nation's biggest mortgage brokers. ********* 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 * * *