/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/130218.mbx C L A S S A C T I O N R E P O R T E R Monday, February 18, 2013, Vol. 15, No. 34 Headlines AFRICA-ISRAEL INVESTMENTS: Series 9 Bondholders' Suit May Proceed ALLIANCE ONE: Hearings in Suit vs. Brazilian Unit Ended in Jan. AVX CORP: Myrtle Beach Factory-Related Suits Pending in S.C. BAYER: Injury Claims May be Added to Yaz Class Action in Canada BURLEY STABILIZATION: Faces Tobacco Farmers' Class Action Suit CAMBREX CORP: Remaining Lorazepam Class Suit Pending in D.C. CANADA: Ont. Appeal Court Reverses Conditional Class Cert. Ruling CEDAR GROVE: Faces Class Actions Over Composting Site Stench CHINA GREEN: Remaining Claims Pending in Securities Class Suit COMMONWEALTH BANK: Piper Files SCDO Suit Within Limitation Period DIRECTSAT USA: 7th Circuit Affirms Class Action Decertification E.I. DU PONT: Defends Suits Alleging Drinking Water Contamination EPOCH HOLDING: Merger-Related Class Action Suits Pending FAMILY DOLLAR: Fed. Ct. Dismisses Store Manager's Wage Class Suit FIFTH THIRD: Faces Class Action Over Excessive Interest FREDDIE MAC: Barrow County Joins Unpaid Transfer Tax Class Action GENEX SERVICES: Blumenthal Nordrehaug Files Overtime Class Action HOBART SERV: Class Cert. Unnecessary in PAGA Actions in Fed. Court HOLOGIC INC: Has Yet to File Delaware Suit Settlement Documents IMPRELIS: Accord in Product Liability Suit Gets Initial Approval INTL FCSTONE: To Seek OK of Securities Suit Accord Before July INTL FCSTONE: To Seek Okay of Shareholder Suit Deal Before July NEW YORK: "Ligon" Stop-and-Frisk Suit Gets Class Certification NTS REALTY: Faces Class Action in Delaware Over Merger PANTRY INC: Dispositive Motions in Fuel Temperature Suits Pending PANTRY INC: Hearing on Bid to Junk Suit Over Card Info on Feb. 19 PHILIP MORRIS: Appeals in "ADESF" Suit Remain Pending in Brazil PHILIP MORRIS: Sao Paulo Prosecutor's Appeal Still Pending PHILIP MORRIS: "El-Roy" Plaintiffs Appeal Denial of Class Status PHILIP MORRIS: Israeli Ct. Has Yet to Take Action in "Navon" Suit PHILIP MORRIS: Trial in "Letourneau" Suit vs. Unit Still Ongoing PHILIP MORRIS: Trial in "Blais" Suit Still Ongoing in Canada PHILIP MORRIS: "Kunta" Suit in Winnipeg Still Dormant PHILIP MORRIS: Prelim. Motions Remain Pending in "Adams" Suit PHILIP MORRIS: "Semple" Class Suit in Nova Scotia Still Dormant PHILIP MORRIS: "Dorion" Suit in Alberta, Canada Remains Dormant PHILIP MORRIS: "McDermid" Suit Still Pending in British Columbia PHILIP MORRIS: "Bourassa" Suit Still Pending in British Columbia PHILIP MORRIS: Counsel in "Jacklin" Suit To Cease Case Activity PURR-FECTION: Recalls 7,200 Beamerzzz Stuffed Toys w/ Flashlight RETAIL ADVENTURES: Jan Cameron May Face Class Action Over Rescue SCOTTS MIRACLE-GRO: Defends Suits Over Wild Bird Food Products SOUTHWEST AIRLINES: E-Data Examination Ongoing in Antitrust Suit SPORT CHALET: Defends "Bennett" Class Action Suit in California STANDARD FIRE: Monetary Limits on Class Action at Issue STATE COMPENSATION: Faces Auditors' Overtime Class Action SUNPOWER CORP: $19MM Deal Excluded in Non-GAAP Financial Measures TOWERS WATSON: Awaits Appellate Ct. Directive Regarding Mediation UNITEDHEALTH GROUP: Continues to Defend Ingenix-Related Suits VIRGIN MEDIA: Being Sold to Liberty for Too Little, Suit Claims WAL-MART STORES: Faces Suit Over Online Credit Card Transactions WAL-MART STORES: Class Cert. Bid in "Evans" Suit Denied as Moot WMS INDUSTRIES: Awaits Ruling on Bid to Dismiss "Conlee" Suit * Robins Geller at Center of Confidential Witness Conundrum * Vague Scienter Standards Result to Judicial Bias ********* AFRICA-ISRAEL INVESTMENTS: Series 9 Bondholders' Suit May Proceed ----------------------------------------------------------------- Globes reports that the Tel Aviv District Court Judge Amiram Benyamini on Feb. 13 approved a class-action lawsuit against Africa-Israel Investments Ltd., controlled by chairman Lev Leviev, over the company's 2009 debt settlement. The lawsuit was filed by Benjamin Asulin, who sold Africa-Israel Series 9 bonds at loss, after the debt settlement, when it became clear that the company would not redeem them. He claims to have lost NIS52,599. The class-action suit was approved on behalf of all Africa-Israel Series 9 bondholders who held bonds from the issue date on June 1, 2009, through August 28, 2009, and who sold the bonds between August 30, when the company published the financial report which indicated the bad shape that it was in, and October 29, 2009, when trading in the bonds was stopped as part of the debt settlement. Mr. Asulin manages a private investment portfolio worth NIS2.5 million. Africa-Israel's Series 9 bond was only issued to institutions in 2005 and was due to mature on November 10, 2009. On May 7, 2009, the institutions decided to list the bond for trading on the Tel Aviv Stock Exchange (TASE). According to the court minutes, Mr. Asulin says, "This was basically a conspiracy by the company and the investment institutions, because of the company's financial condition, and was intended to enable the institutions to sell the bonds they held to the public." Africa-Israel says that the bonds were listed for trading because it wanted to make a bond buy-back. However, according to the court minutes, "The company never made the bond buy-back, citing the company's financial shape. The claimant views the announcement of the company's intention to buy back the bonds as a false presentation on its part, and that the contention that the company did not disclose to investors that the listing of the bonds for trading was actually at the request of the investment institutions." On May 31, 2009, Africa-Israel published its financial report for the first quarter, in which it stated. "The company has sufficient financial sources to meet its commitments in the foreseeable future", and that it posted a quarterly net profit of NIS1 billion. According to the court minutes, Mr. Asulin bought the bonds solely on the strength of a "Globes" article from the same day, which quoted then Africa-Israel CEO Izzy Cohen as saying, "The profit is a demonstration of Africa-Israel's strength . . . The valuations reflect the current situation, and are expected to continue rising with the opening of commercial centers . . . Africa-Israel has a policy of meeting its commitments, and I see no problem at this time in meeting the commitments." Subsequently, however, Africa-Israel suffered heavy losses, and its auditor attached a going concern warning to the company's financial report for the second quarter of 2009. The company then announced that it would seek a debt settlement. The price of the Series 9 bond fell almost 50% in the week following the publication of the financials. Mr. Asulin, who bought bonds for NIS422,000, sold them for NIS366,000. He alleges that the company concealed information from the public before the publication of the financials about its ability to meet its commitments, resulting in buyers of the Series 9 bond losing money on the investment. He says that the company should have shared the warning signs known to its executives with the public. Judge Benyamini set a prehearing on the case for May 22. The respondents will file a statement of defense within 45 days, and the statement of response will be filed within 30 days afterwards. Africa-Israel will also pay Mr. Asulin NIS70,000 in court costs. ALLIANCE ONE: Hearings in Suit vs. Brazilian Unit Ended in Jan. --------------------------------------------------------------- Hearings with respect to the remaining claims in the class action lawsuit filed against Alliance One International, Inc.'s Brazilian subsidiary concluded on January 23, 2013, according to the Company's February 5, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 27, 2012. On June 6, 2008, the Company's Brazilian subsidiary and a number of other tobacco processors were notified of a class action initiated by the ALPAG -- Associacao Lourenciana de Pequenos Agricultrores ("Association of Small Farmers of Sao Lourenco"). The case is currently before the 2nd civil court of Sao Lourenco do Sul. On April 20, 2012, the Company's motion to dismiss the class action was granted in part and denied in part. Hearings with respect to the remaining claims, which relate to practices regarding the weighing and grading of tobacco, concluded on January 23, 2013. The outcome with respect to these remaining claims is uncertain as to both timing and result. Due to the broad scope of the pleading, the ultimate exposure if an unfavorable outcome is received is not estimable. Headquartered in Raleigh, North Carolina, Alliance One International Inc. -- http://aointl.com/-- is an independent leaf tobacco merchant. It provides worldwide service to the large cigarette manufacturers. It purchases tobacco in more than 45 countries and serves manufacturers of cigarettes and other consumer tobacco products in over 90 countries. The Company's revenues are primarily comprised of sales of processed tobacco and fees charged for related services to manufacturers of consumer tobacco products around the world. AVX CORP: Myrtle Beach Factory-Related Suits Pending in S.C. ------------------------------------------------------------ There are two lawsuits pending with respect to property adjacent to AVX Corporation's Myrtle Beach, South Carolina factory claiming property values have been negatively impacted by alleged migration of certain pollutants from the Company's property. On November 27, 2007, a lawsuit was filed in the South Carolina State Court by certain individuals as a class action. Another lawsuit is a commercial lawsuit filed on January 16, 2008, in South Carolina State Court. The Company says it intends to defend vigorously the claims that have been asserted in these two lawsuits. At this stage of the litigation, there has not been a determination as to responsible parties or the amount, if any, of damages. Based on its estimate of potential outcomes, the Company has accrued approximately $0.4 million with respect to these cases as of December 31, 2012. No further updates were reported in the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012. BAYER: Injury Claims May be Added to Yaz Class Action in Canada --------------------------------------------------------------- The prescription drug resource center DrugRisk.com is alerting women taking the birth control drugs Yaz or Yasmin of new information added to the site which shows patients in Canada have proposed the joining of injury claims into a Yaz class action. Meanwhile, Bayer continues to settle claims over blood clots filed in the United States. "The goal of DrugRisk is to improve patient safety through education. This includes the latest warnings, recalls and legal action related to popular prescription drugs and medical devices. Patients who are informed can better discuss their options with their doctor and decide if they need the advice of a lawyer," explains DrugRisk representative Ryan Mayer. The resource center had previously added warnings about birth control drugs like Yaz and Yasmin from experts such as the American College of Obstetricians and Gynecologists, who stated that birth control pills containing drospirenone may present a higher risk of blood clots. DrugRisk.com also contains information about the thousands of Yaz lawsuits which have been filed by patients in the U.S. over blood clots, which have been consolidated in a special federal Multi- District Litigation court in Illinois. In new information added to the site, Bayer spokesperson Marija Mandic admits that the company also faces as many as 13 proposed Yaz class action claims in Canada. According to Bayer's most recent financial statements uncovered by DrugRisk, the company has set aside as much as $750 million for Yaz settlements in the United States, resolving as many as 3,500 cases so far at an average of nearly $214,000 per case. Anyone who suffered a blood clot, DVT, stroke or Pulmonary Embolism after taking Yaz or Yasmin is urged to contact the Drug Risk Resource Center or speak with a lawyer about their legal options. However, the Drug Risk Resource Center cautions that victims should seek a lawyer with experience in defective drug litigation, and only recommends lawyers and law firms who have already settled Yaz lawsuits. BURLEY STABILIZATION: Faces Tobacco Farmers' Class Action Suit -------------------------------------------------------------- Courthouse News Service reports that tobacco farmers sued the Burley Stabilization Corp. in a federal class action, claiming it owes millions of dollars from the record 1982 tobacco crop, and income and interest it made by not paying the (discontinued) federal tobacco support money. CAMBREX CORP: Remaining Lorazepam Class Suit Pending in D.C. ------------------------------------------------------------ The remaining lawsuit related to Lorazepam and Clorazepate remains pending in the District of Columbia, according to Cambrex Corporation's February 7, 2013, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In 1998, Cambrex Corporation and a subsidiary were named as defendants along with Mylan Laboratories, Inc. ("Mylan") and Gyma Laboratories, Inc. ("Gyma") in a proceeding instituted by the Federal Trade Commission in the United States District Court for the District of Columbia (the "District Court"). Lawsuits were also commenced by several State Attorneys General and class action complaints by private plaintiffs in various state courts. The lawsuits alleged violations of the Federal Trade Commission Act arising from exclusive license agreements between the Company and Mylan covering two active pharmaceutical ingredients ("APIs") (Lorazepam and Clorazepate). All cases have been resolved except for one brought by four health care insurers. In the remaining case, the District Court entered judgment after trial in 2008 against Mylan, Gyma and Cambrex in the total amount of $19,200,000, payable jointly and severally, and also a punitive damage award against each defendant in the amount of $16,709,000. In addition, at the time, the District Court ruled that the defendants were subject to a total of approximately $7,500,000 in prejudgment interest. The case is currently pending before the District Court following a January 2011 remand by the Court of Appeals where briefing related to whether the court has jurisdiction over certain self-funded customer plaintiffs is ongoing. In 2003, Cambrex paid $12,415,000 to Mylan in exchange for a release and full indemnity against future costs or liabilities in related litigation brought by the purchasers of Lorazepam and Clorazepate, as well as potential future claims related to the ongoing matter. Mylan has submitted a surety bond underwritten by a third-party insurance company in the amount of $66,632,000. In the event of a final settlement or final judgment, Cambrex expects any payment required by the Company to be made by Mylan under the indemnity. Cambrex Corporation -- http://www.cambrex.com/-- is an innovative life sciences company providing products, services and technologies to accelerate the development and commercialization of small molecule therapeutics. The Company is headquartered East Rutherford, New Jersey. CANADA: Ont. Appeal Court Reverses Conditional Class Cert. Ruling ----------------------------------------------------------------- According to Brandon Kain, Esq. -- bkain@mccarthy.ca -- of McCarthy Tetrault LLP, the Ontario Court of Appeal has released a new ruling which holds that motion judges do not have jurisdiction to "conditionally" certify class actions that fail to disclose a cause of action under s. 5(1)(a) of the Ontario Class Proceedings Act ("CPA"). The decision in Brown v. Canada (A.G.), 2013 ONCA 18 concerns a proposed class action against the federal government, which alleges that it wrongfully delegated its duties in respect of Aboriginal persons by entering into an agreement (the "1965 Agreement") that enabled the province of Ontario to place thousands of Aboriginal children in non-aboriginal foster care or adoptive homes. The plaintiffs alleged that these children were deprived of their Aboriginal identity, and alleged liability based on honour of the Crown, "identity genocide", breach of Aboriginal rights, breach of fiduciary duty and negligence. At the certification motion, the motion judge found the pleadings failed to disclose a cause of action as required under s. 5(1)(a) of the CPA. However, despite holding that the fiduciary duty and negligence claims did not support a cause of action based on the federal Crown's entry into the 1965 Agreement -- which was the claim pleaded by the plaintiffs -- the motion judge went on to find that these claims could potentially support a cause of action based on the Crown's failure to prevent the Aboriginal children from losing their Aboriginal identity. Accordingly, upon finding that the proposed class action satisfied the remaining criteria under s. 5(1) of the CPA, the motion judge granted certification on the condition that the plaintiffs deliver an amended statement of claim. The motion judge's decision was set aside by the Ontario Divisional Court. In a brief endorsement, it found that he predetermined that a cause of action would be disclosed if the pleadings were amended in accordance with his reasons, and erred by not adjourning the certification motion to await an amended statement of claim which could be challenged anew by the Crown. Remarkably, the Court also ordered that the adjourned certification motion be heard by a different motion judge once an amended pleading was delivered, despite the fact that s. 34 of the CPA requires that "[t]he same judge shall hear all motions before the trial of the common issues" unless that judge "becomes unavailable for any reason". In Brown, the Ontario Court of Appeal affirmed the Divisional Court's order. However, rather than doing so through an endorsement, the Court chose to deliver comprehensive reasons that emphasize the centrality of the s. 5(1)(a) requirement to the certification analysis. According to Rosenberg J.A.: . . . [I]dentification of a cause of action is fundamental. It is impossible for the defendant to meaningfully respond to an application for certification without knowing the cause of action. The definition of the class and the identification of the common issues depend upon the nature of the cause of action. . . . It is not possible to know whether an action can be appropriately prosecuted as a class action without identifying the fundamental issue of whether or not there is a cause of action. It is no answer that the defendant can bring a motion to decertify the action under s. 10 if the action should never have been certified in the first place. . . . [C]ertifying a class action in the absence of a statement of claim that discloses viable causes of action is not case management. Even the power to amend other aspects of the claim, such as the proposed common issues, should be exercised with caution and restraint: McCracken v. Canadian National Railway Co., 2012 ONCA 445, 111 O.R. (3d) 745, at para. 144. . . . The defendant cannot respond to the evidence-based criteria in the abstract without knowing the cause of action. [emphasis added] (paras. 44-45) These comments reflect a growing trend towards a more rigorous review of certification motions by Ontario appellate courts. The notion that it is appropriate to certify a class action that fails to satisfy one or more of the statutory criteria, on the basis that it may simply be "decertified" should problems arise down the road, no longer represents the prevailing approach, as is evident from other recent certification dismissals such as McCracken v. Canadian National Railway Company, 2012 ONCA 445 and Williams v. Canon Canada Inc., 2012 ONSC 3692 (Div. Ct.). In the wake of lengthy common issues trials such as Andersen v. St. Jude Medical, Inc., 2012 ONSC 3660, Ontario courts have become sensitive to the impact that poorly conceived class actions can have upon defendants and the judicial system. The result is a renewed emphasis upon the plaintiff's statutory burden at certification. Brown is also notable for the Court of Appeal's decision to prevent the motion judge from presiding over the adjourned certification motion. Rosenberg J.A. found the motion judge's predetermination that an amended statement of claim would satisfy s. 5(1)(a) created a reasonable apprehension of bias, which rendered him "unavailable" to hear the motion pursuant to s. 34(2) of the CPA: Mr. Kain said "While it was not always the case, I think it can now safely be said that judges cannot sit in appeal of their own decisions: see e.g., Law Society of Upper Canada v. French, [1975] 2 S.C.R. 767, at pp. 782-83, per Spence J., at p. 775, per Dickson C.J.C., dissenting. In my view, a reasonable interpretation of the reasons of the case management judge is that he had determined that viable causes of action existed as he framed them. . . .[T]he causes of action as framed by the case management judge are so radically different from the way they were pleaded in the statement of claim that I do not think it can be safely said that the respondent had an adequate opportunity to respond. To now give the respondent that opportunity before the same judge would, as the Divisional Court found, result in the case management judge sitting in review of his own decision. (para. 53)" In light of Brown, motion judges should be wary of taking an overly interventionist approach on certification. CEDAR GROVE: Faces Class Actions Over Composting Site Stench ------------------------------------------------------------ Diana Hefley, writing for HeraldNet.com, reports that a stinky dispute between neighbors and an Everett composting facility is headed toward court. Seattle attorneys have filed two class action lawsuits against Cedar Grove Composting alleging that the company's Everett and Maple Valley composting sites create odors that disturb the neighbors' quality of life. The lawsuits were filed in superior courts in Snohomish and King counties on behalf of all neighbors within a four-mile radius of the facilities. The lawsuits are seeking compensation for the neighbors and also demanding that Cedar Grove change how it operates and eliminates odors. Last month, two other lawsuits were filed in district courts in Snohomish and King counties representing 350 people who live around Cedar Grove's facilities also seeking compensation for what was described as the rotting garbage stench. The company is paid to take yard and food waste from hauling companies around Snohomish County and parts of King County. It turns the waste into compost for use in gardens. It also collects food waste from restaurants. The Everett plant opened in 2004. Neighbors have complained for several years of a rotting-garbage stench they believe comes from the sites, especially during warmer months. The Puget Sound Clean Air Agency is conducting a study of odors in the Snohomish River delta, where the composting plant is located. CHINA GREEN: Remaining Claims Pending in Securities Class Suit -------------------------------------------------------------- Claims for violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 remains pending in the securities class action lawsuit against China Green Agriculture, Inc., according to the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012. On October 15, 2010, a class action lawsuit was filed against the Company and certain of its current and former officers in the United States District Court for the District of Nevada (the "Nevada Federal Court") on behalf of purchasers of the Company's common stock between November 12, 2009, and September 1, 2010. The current version of the complaint alleges that the Company and certain of its current and former officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, by making material misstatements and omissions in the Company's financial statements, securities offering documents, and related disclosures during the class period. On October 7, 2011, the defendants moved to dismiss the amended complaint and to strike portions of it. On November 2, 2012, the Nevada Federal Court issued an order dismissing the claims for violation of sections 11, 12(a)(2) and 15 of the Securities Act of 1933 as to all defendants and dismissing certain individual defendants from the complaint and allowing the claims for violations of section 10(b) and 20(a) of the Securities Exchange Act of 1934 to continue with respect to the Company and certain of the individual defendants. The Nevada Federal Court also denied the defendants' motion to strike. China Green Agriculture, Inc. is engaged in the research, development, production and sale of various types of fertilizers and agricultural products in the People's Republic of China though its wholly-owned Chinese subsidiaries, Jinong, Jintai, Yuxing, Gufeng. Its primary business is fertilizer products, specifically humic acid-based compound fertilizer produced through Jinong and compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly-concentrated water- soluble fertilizers and mixed organic-inorganic compound fertilizer produced through Gufeng. In addition, through Jintai and Yuxing, the Company develops and produces agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings. COMMONWEALTH BANK: Piper Files SCDO Suit Within Limitation Period ----------------------------------------------------------------- Lawyers Weekly reports that time is running out for firms to make the big banks pay for their role in investor losses during the global financial crisis (GFC), with Piper Alderman launching a class action against the Commonwealth Bank of Australia (CBA) just inside the limitation period. Pipers filed an action in the Federal Court on February 7 that aims to recoup a portion of AUD140 million in investments wiped out by the GFC, which were purchased from CBA between 2006 and 2007. The firm is alleging that CBA breached its obligations as a financial services licensee to act honestly and fairly by not fully disclosing the risks associated with the volatile financial products known as synthetic collateralized debt obligations (SCDOs). The limitation period for damages under Section 82 of the Competition and Consumer Act 2010 is six years "after the day on which the cause of action that relates to the conduct accrued". In the CBA case, this could be interpreted as either the date investors purchased the SCDOs or when losses were incurred, according to Amanda Banton, the Piper Alderman partner leading the class action. This ambiguity prompted Pipers to run an open class action to preserve the claim for investors who may come forward at a later date. "We're running the class action conservatively as these sorts of actions are starting to get time barred," she said. "In some cases, potential claimants may have already lost their rights." The lead applicants in this action are Clurname Pty Ltd and Gloucester Shire Council, which are looking to recover losses on three SCDO investments plus damages, including lost interest. "All the people we've had contact with wouldn't have bought the product if they knew that a certain number of defaults would mean their capital would be wiped out," Ms. Banton said. A litigation funder is providing financial backing but Pipers would not disclose the funder's name. In September last year, Pipers won a landmark class action against Lehman Brothers Australia, which was found to have breached its fiduciary duties by selling risky, complex financial derivatives that went sour during the GFC. The firm also successfully recouped millions in losses for 12 NSW local councils in November after the Federal Court found ratings agency Standard & Poor failed in its duty of care to investors by assigning a AAA rating to "grotesquely complicated" and risky synthetic derivatives. DIRECTSAT USA: 7th Circuit Affirms Class Action Decertification --------------------------------------------------------------- On February 4, 2013 in Espenscheid v. DirectSat USA, LLC a Seventh Circuit panel unanimously affirmed a Wisconsin District Court judge's decision to decertify a large off-the-clock overtime class action. Judge Richard Posner wrote the opinion affirming the decertification and, in his inimitable style, he provides an easy- to-read dissertation on the limits of the class action device, proper standards for class certification, and the requirement for the plaintiff to propose a manageable trial plan if he wants to avoid having his class decertified. This case is chock full of notable points. The Underlying Facts of the Proceedings The facts are fairly simple. The plaintiffs obtained conditional class certification under the FLSA and class certification under Rule 23 for a class of 2341 satellite techs ("cable guys" for satellite) who were paid a fixed amount per each satellite service call they performed. The suit alleged that management required the satellite techs to perform work that was not compensated in the piece rate, and required them to work more than 40 hours per week without payment of overtime. The plaintiffs contended that DirectSat pressured them to report less than all their actual work time in order for DirectSat to avoid paying overtime. It is unclear from the opinion, but it does not appear that plaintiffs argued that when they reported more than 40 hours in a week, they still received no overtime. Rather, it appears they claim that workers were systematically pressured to report less than all of their time. It is odd that this case ever got certified in the first place, but it eventually dawned on the district court that there would likely be significant individualized issues to resolve at trial, so the court asked the plaintiffs to propose a trial plan. The plaintiffs repeatedly resisted, but then finally proposed to prove the case by using 42 "representative witnesses" but they failed to explain how these witnesses would be selected, what would make them representative, and how would they address individualized issues. As such, the district court decertified the action and the plaintiffs ultimately appealed the decision. The Seventh Circuit's Decision to Affirm the Decertification In affirming the decertification, Judge Posner made all of the following trenchant observations: (1) Despite the differences between the FLSA and Rule 23 procedures for collective and class actions, Judge Posner holds that, at bottom, "there isn't a good reason to have different standards for the certification of the two different types of action, and the case law has largely merged the standards. . . . And so we can, with no distortion of our analysis, treat the entire set of suits before us as if it were a single class action." This supports the notion that the requirement of predominance of common issues applies the same under the FLSA and Rule 23. (2) To determine damages would have required 2341 separate evidentiary hearings, "which might swamp the Western District of Wisconsin with its two district judges." The reason was that the satellite tech job was not one with 8-5 hours where the employees were alleged to have worked without a lunch break, thus working 45 hours per week but being paid for 40. Rather, the employees were paid on a piece rate which raised big individualized issues as to the time they spent working. To wit: "[S]ince workers differ in their effort and efficiency--that some, maybe many, of the technicians may not work more than 40 hours a week and may even work fewer hours; others may work more than 40 hours a week. Variance would also result from different technicians' doing different tasks, since it's contended that the employer told them not to report time spent on some of those tasks, though -- further complicating the problem of proof -- some of them reported that time anyway." As such, there were significant individualized issues whether employees really worked more than 40 hours and whether the pay the received covered all the time they actually worked, among other issues. (3) The plaintiffs purported solution to this was to select a sample of 42 class members, but Plaintiffs were unable to explain how the 42 were selected, "whether for example they were volunteers, or perhaps selected by class counsel after extensive interviews and hand-picked to magnify the damages sought by the class." There was no showing at all made that they used sampling methods used in statistical analysis, such as random sampling. (4) Judge Posner went further, however, and said that even by happenstance if the average OT worked by the 42 matched precisely the average of the class, there still would be issues precluding class certification because the distribution among class members would not be at all uniform: "No one thinks there was such uniformity. And if for example the average number of overtime hours per class member per week was 5, then awarding 5 x 1.5 x hourly wage to a class member who had only 1 hour of overtime would confer a windfall on him, while awarding the same amount of damages to a class member who had 10 hours of overtime would (assuming the same hourly wage) undercompensate him by half. The differences would not be trivial, because the technicians' average hourly rate was about $15." Judge Posner then goes on to provide all the different variations that arise among piece rate workers that could lead to wide variations in both liability and damages for both minimum wage and overtime liability. (5) Judge Posner also notes that the class members have no records whatsoever of the actual time they worked: "they are not like lawyers, who record every bit of work they do for a client, in 6-minute segments." Although individuals would be free to prove their time worked from memory or estimations that would allow a trier of fact to draw a just and reasonable inference of the time they worked, an inference of a "small, unrepresentative sample" cannot show the "work time of thousands of workers." (6) Plaintiffs were unable to explain how liability could be established collectively and provided no method to determine individual damages. Judge Posner sagely noted that Plaintiffs must have thought the case would just settle so they did not need to worry about trial procedure (the classic Underpants Gnomes problem), but that was no excuse for lacking a workable trial plan: "[Plaintiffs' counsel] must think that like most class action suits this one would not be tried--that if we ordered a class or classes certified, DirectSat would settle. That may be a realistic conjecture, but class counsel cannot be permitted to force settlement by refusing to agree to a reasonable method of trial should settlement negotiations fail. Essentially they asked the district judge to embark on a shapeless, freewheeling trial that would combine liability and damages and would be virtually evidence-free so far as damages were concerned." Broader Implications of the Decision Concerning Class Certification What Judge Posner does not say, but which seems evident from the points he makes, is that these same issues should exist at the initial class certification determination. What led this district court to certify the class in the first place given the plaintiffs complete lack of scientific basis for their purported "representative evidence"? Wouldn't the points about substantial individualized differences among workers under a piece rate system have been evident at class certification? Judge Posner does not expressly comment. Despite his silence, this case should definitely be worth citing in any sort of off-the-clock case to explain to a court why a class trial will prove unworkable. E.I. DU PONT: Defends Suits Alleging Drinking Water Contamination ----------------------------------------------------------------- E. I. du Pont de Nemours and Company continues to defend itself against lawsuits alleging contamination of drinking water, according to the Company's February 7, 2013, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. In August 2001, a class action, captioned Leach v DuPont, was filed in West Virginia state court alleging that residents living near the Washington Works facility had suffered, or may suffer, deleterious health effects from exposure to PFOA (collectively, perfluorooctanoic acid and its salts, including the ammonium salt) in drinking water. DuPont and attorneys for the class reached a settlement in 2004 that binds about 80,000 residents. In 2005, DuPont paid the plaintiffs' attorneys' fees and expenses of $23 million and made a payment of $70 million, which class counsel designated to fund a community health project. The Company funded a series of health studies which were completed in October 2012 by an independent science panel of experts (the "C8 Science Panel"). The studies were conducted in communities exposed to PFOA to evaluate available scientific evidence on whether any probable link exists, as defined in the settlement agreement, between exposure to PFOA and human disease. The C8 Science Panel found probable links, as defined in the settlement agreement, between exposure to PFOA and pregnancy- induced hypertension, including preeclampsia; kidney cancer; testicular cancer; thyroid disease; ulcerative colitis; and diagnosed higher cholesterol (hypocholesterolemia). A panel of three medical experts will determine an appropriate medical monitoring protocol, if any, as a result of these findings. If a medical monitoring protocol for any of these diseases is defined, DuPont is required to fund a medical monitoring program to pay for such medical testing. Plaintiffs may pursue personal injury claims against DuPont only for those human diseases for which the C8 Science Panel determined a probable link exists. In January 2012, the Company put $1 million in an escrow account as required by the settlement agreement. Under the settlement agreement, the Company's total obligation to pay for medical monitoring cannot exceed $235 million. In addition, the Company must continue to provide water treatment designed to reduce the level of PFOA in water to six area water districts, including the Little Hocking Water Association (LHWA), and private well users. An Ohio action brought by the LHWA is ongoing. In addition to general claims of PFOA contamination of drinking water, the action claims "imminent and substantial endangerment to health and or the environment" under the Resource Conservation and Recovery Act (RCRA). DuPont denies these claims and is defending itself vigorously. At December 31, 2012, twenty-five lawsuits alleging personal injury and one lawsuit alleging wrongful death from exposure to PFOA in drinking water are pending in federal court in Ohio and West Virginia. DuPont denies the allegations in these lawsuits and is defending itself vigorously. While DuPont believes that it is reasonably possible that it could incur losses related to PFOA matters in addition to those pending matters for which it has established accruals, a range of such losses, if any, cannot be reasonably estimated at this time. E. I. du Pont de Nemours and Company (NYSE: DD), commonly referred to as DuPont, is an American chemical company founded in July 1802. In the 20th century, DuPont developed many polymers such as Vespel, neoprene, nylon, Corian, Teflon, Mylar, Kevlar, Zemdrain, M5 fiber, Nomex, Tyvek, Sorona and Lycra. DuPont developed Freon (chlorofluorocarbons) for the refrigerant industry, and later more environmentally friendly refrigerants. It developed synthetic pigments and paints including ChromaFlair. EPOCH HOLDING: Merger-Related Class Action Suits Pending -------------------------------------------------------- Epoch Holding Corporation continues to face merger-related class action lawsuits, according to the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012. On December 6, 2012, Epoch, The Toronto-Dominion Bank ("TD") and Empire Merger Sub, Inc. ("Merger Sub"), a wholly owned subsidiary of TD, entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will be merged with and into Epoch, with Epoch surviving the merger as a wholly owned subsidiary of TD (the "Merger"). The Merger Agreement was unanimously approved by Epoch's Board of Directors and is expected to be completed during the first half of calendar year 2013. Shortly after the announcement of the proposed transaction, five purported class action complaints were filed by purported shareholders of Epoch against Epoch, the individual directors of Epoch, and TD. One action was filed in the Supreme Court of the State of New York, County of New York, two were filed in the Delaware Court of Chancery, a fourth was filed in the Supreme Court of the State of New York, County of Nassau, and a fifth was filed in the United States District Court for the Southern District of New York. Specifically, on December 11, 2012, a purported shareholder of Epoch filed an action in the Supreme Court of the State of New York, County of New York, captioned Cindy Goldman TTEE GSS 508 Trust Dated May 16, 2008 v. Epoch Holding Corporation, et al. (the "Goldman Action"). The complaint names as defendants all directors of Epoch, Epoch, and TD. The plaintiff alleges that the directors of Epoch breached their fiduciary duties by approving the proposed transaction with TD, and that TD aided and abetted those alleged breaches of fiduciary duty. Specifically, the lawsuit alleges, among other things, that the Merger Agreement was reached through an unfair process that benefitted the personal and financial positions of the directors of Epoch at the expense of the shareholders of Epoch, that the Merger Consideration is inadequate, and that the deal protection devices in the Merger Agreement have precluded other bidders from making competing offers for Epoch. The plaintiff seeks, among other things, injunctive relief and attorneys' fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. On January 8, 2013, Epoch and its directors (the "Epoch Defendants") filed a motion to dismiss the complaint or in the alternative to stay the action pending resolution of parallel proceedings in Delaware. The parties thereafter stipulated and the Court ordered that the action be stayed pending the resolution of the related Delaware Action and the Katcher Action described herein. On December 21, 2012, another purported shareholder of Epoch filed an action in the Delaware Court of Chancery, captioned Reich v. Epoch Holding Corporation, et al (the "Reich Action"). Like the Goldman Action, this action alleges that the directors of Epoch breached their fiduciary duties in connection with the proposed transaction with TD, and that both TD and Merger Sub aided and abetted those alleged breaches of fiduciary duty. The Reich Action seeks, among other things, injunctive relief and attorneys' fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. The lawsuit names as defendants all directors of Epoch, Epoch, TD, and Merger Sub. On December 26, 2012, another purported shareholder action was filed in the Delaware Court of Chancery, captioned Hodgson v. Epoch Holding Corporation, et al (the "Hodgson Action"). The Hodgson Action also brings breach of fiduciary duty claims against the directors of Epoch, and aiding and abetting claims against Epoch, TD, and Merger Sub, seeking similar relief. The Epoch Defendants answered the complaint in the Reich Action on December 28, 2012. On January 3, 2013, the Court of Chancery entered an order consolidating the Reich and Hodgson Actions as In re Epoch Holding Corporation Stockholder Litigation (the "Delaware Action") and appointed lead counsel for the consolidated action. On January 18, 2013, the parties filed a stipulation and proposed order to govern the confidential treatment of discovery materials, which the court granted on January 29, 2013. On January 18, 2013, the plaintiffs filed an unopposed motion for leave to amend their complaint, which the Court granted on January 25, 2013. On January 21, 2013, the parties filed a proposed stipulated scheduling order to govern discovery and any motions for preliminary injunction that the plaintiffs may file, which the Court granted on January 28, 2013. The plaintiffs filed their amended class action complaint on January 25, 2013, which added claims that the director defendants breached their duty of disclosure by omitting or misstating material information in Epoch's preliminary proxy statement. On February 6, 2013, the Epoch Defendants answered the plaintiffs' amended complaint. The third-filed action was brought in the Supreme Court of the State of New York, County of Nassau, on December 24, 2012, captioned Katcher v. Epoch Holding Corporation, et al. (the "Katcher Action"). The plaintiffs brought claims similar to those raised in the Goldman Action and Delaware Action against Epoch, the members of Epoch's board, and TD, and seek declaratory and injunctive relief. The plaintiffs claim that Epoch's directors breached their fiduciary duties in connection with entering into the proposed transaction with TD, and that TD and Epoch aided and abetted the alleged breaches of fiduciary duty. On January 16, 2013, the Epoch Defendants filed a notice of motion to dismiss the complaint or stay the action pending the resolution of the parallel Delaware Action (the "Motion to Dismiss/Stay"). The plaintiffs filed an amended complaint on January 21, 2013, adding allegations that Epoch's directors breached their duty of disclosure by omitting or misstating material information in Epoch's preliminary proxy statement. The plaintiffs also filed a motion on order to show cause providing for expedited discovery (the "Motion for Expedited Discovery") on January 23, 2013. The plaintiffs filed their brief in opposition to the Motion to Dismiss/Stay on January 25, 2013. On January 29, 2013, the Epoch Defendants filed a cross-motion to stay discovery, and a brief in support of that cross-motion and in opposition to the plaintiffs' Motion for Expedited Discovery. On January 30, 2013, the Epoch Defendants filed a reply brief in further support of their Motion to Dismiss/Stay. On February 3, 2013, the plaintiffs moved by order to show cause to preliminarily enjoin defendants from refusing to respond to their discovery demands absent a stay of the action or an order of the court (the "February 3rd Motion"). On February 4, 2013, the court set a hearing date of February 13, 2013, to hear the plaintiffs' February 3rd Motion, and ordered that pending the hearing and determination of the February 3rd Motion, and further order of the court, the defendants must comply with the plaintiffs' discovery requests. Both the Epoch Defendants' Motion to Dismiss/Stay and the plaintiffs' Motion for Expedited Discovery remain pending before the court. On January 24, 2013, another purported shareholder of Epoch filed a similar action in the United States District Court for the Southern District of New York, captioned Wilks v. Priest, et al. The defendants include Epoch, the members of its board, TD, and Merger Sub. The plaintiff brought a claim under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder regarding the disclosures in Epoch's preliminary proxy. The plaintiff also brought a breach of fiduciary duty claim and a breach of duty of disclosure claim against the Epoch directors, and an aiding and abetting claim against TD and Merger Sub. The plaintiff seeks, among other things, declaratory and injunctive relief and, if the proposed transaction is consummated, rescission of the transaction or rescissory damages. Epoch and its board of directors believe these claims are entirely without merit, and intend to vigorously defend against these actions. FAMILY DOLLAR: Fed. Ct. Dismisses Store Manager's Wage Class Suit ----------------------------------------------------------------- District Judge R. Brooke Jackson dismissed the class action lawsuit captioned JULIE FARLEY, on behalf of herself and all similarly situated persons, Plaintiff, v. FAMILY DOLLAR STORES, INC., and FAMILY DOLLAR STORES OF COLORADO, INC., Defendants, Civil Action No. 12-cv-00325-RBJ-MJW, (D. Col.). Julie Farley, a manager at a Family Dollar Store in Fruita, Colorado from October 2009 until March 2011, filed the class action on behalf of all store managers employed at the defendants' Colorado stores since February 7, 2007. Ms. Farley complained she did not receive overtime pay when she worked more than 12 hours per day or 40 hours per week, in violation of the Colorado Wage Claim Act, and in breach of an implied unilateral contract between her and the defendants that required the defendants to pay her in accordance with state wage and hour laws. Family Dollar filed a motion to dismiss all of the claims for the period prior to February 7, 2009, because the plaintiff's claims are subject to a three-year statute of limitations period. The matter was referred to United States Magistrate Judge Watanabe who issued a Recommendation on October 3, 2012. In his opinion, Magistrate Judge Watanabe explained that actions brought under implied contracts -- meaning contracts based on conduct rather than express terms -- were not subject to the longer statute of limitations period. Accordingly, Magistrate Judge Watanabe granted Family Dollar's motion to dismiss. Ms. Farley filed a timely objection. On February 11, 2013, Judge Jackson affirmed and adopted Magistrate Judge Watanabe's recommendation and granted Family Dollar's Motion to Dismiss. A copy of Judge Jackson's Order is available at http://is.gd/JnhQSQfrom Leagle.com. FIFTH THIRD: Faces Class Action Over Excessive Interest ------------------------------------------------------- Daniel Wilson, writing for Law360, reports that Fifth Third Bank NA on Feb. 12 was hit with a proposed class action in Florida federal court accusing it of charging unlawfully excessive interest rates on short-term lines of credit given to its checking account customers. According to plaintiffs Lori and Daniel Laskaris, Fifth Third had unfairly preyed upon desperate customers with its Early Access program credit lines, charging "usurious" interest rates -- in some cases, in excess of 1,000 percent per year once annualized -- and misleading customers about the true rate. FREDDIE MAC: Barrow County Joins Unpaid Transfer Tax Class Action ----------------------------------------------------------------- Stanley Dunlap, writing for Barrow County News, reports that the Barrow county will also join a 15 state class action lawsuit as they attempt to recover unpaid transfer taxes from lenders such as Freddie Mac and Fannie Mae. The firms that would handle the lawsuit would only be paid if money is recovered. If a settlement is made in the initial stages then the law firms would receive 25 percent of the fees and if the case takes longer then it would be 33 percent. The lawsuit was described as a "win-win for the county" by County Attorney Angie Davis. "This national team has retained a national consultant that is working to create calculations for our county as well as others that are a (part) of this lawsuit," she said. GENEX SERVICES: Blumenthal Nordrehaug Files Overtime Class Action ----------------------------------------------------------------- The San Francisco employment law attorneys at Blumenthal, Nordrehaug & Bhowmik allege in a recently filed lawsuit that Genex Services wrongfully classified their Field Nurse Case Managers, also called Medical Case Managers, as exempt from overtime pay. The class action lawsuit was filed by the San Francisco labor lawyers at Blumenthal, Nordrehaug & Bhowmik. The case, filed on February 6, 2013, alleges that Genex Holdings Inc d/b/a Genex Services, Inc. ("Genex") misclassified the Field Nurse Case Managers as exempt from overtime pay and as a result, failed to provide overtime compensation, meal and rest breaks, and precise wage statements as required by California law. The lawsuit entitled, Davis v. Genex Holdings Inc d/b/a Genex Services, Inc., Case No. 113CV240830 is currently pending in the Santa Clara County Superior Court for the State of California. The class action complaint, which can be read here, alleges that the Plaintiff, who worked as a Field Nurse Case Manager, mostly engaged in non-exempt tasks throughout her workday, including reviewing her client's pre-injury position, making appointments with the client's doctors, communicating in-person and by telephone with her clients, employers, medical providers, attorneys, insurance carriers and claims adjustors. The Complaint further alleges that the reason the Plaintiff and other Field Nurse Case Managers should be receiving overtime pay is because these employees use their RN training to coordinate care, act as intermediaries between patients, adjustors, and doctors and operate in a framework in "which these employees do not exercise ultimate decision making power." Managing partner, Norman B. Blumenthal, stated "Large corporations often implement company wide policies to classify a certain job title as exempt from overtime pay in order to get the benefit of all their employees' work while only paying them for some of their work." This argument is not new to the attorneys at Blumenthal, Nordrehaug & Bhowmik. The California labor law attorneys originally filed another class action in April of 2011 on behalf of Field Nurse Case Managers working for a different company, Coventry Healthcare, alleging that these employees were also shorted overtime pay as a result of being classified as salaried employees. The Judge in that case has tentatively certified the following class: All those men and women employed by [Coventry Health] in California who worked as a Field Case Manager at any time from April 7, 2007 to May 1, 2012. The Coventry class action entitled Rieve v. Coventry Health Care, Inc., Case No. SA CV 11- 1032 DOC9MLGx) is currently pending before the Honorable Judge David O. Carter in United States District Court for the Central District of California. The unpaid wage attorneys at Blumenthal, Nordrehaug & Bhowmik dedicate their practice to helping people who have been wrongfully classified as salaried employees exempt from receiving overtime pay and other claims including violation of California labor laws. HOBART SERV: Class Cert. Unnecessary in PAGA Actions in Fed. Court ------------------------------------------------------------------ According to John P. Zaimes of Mayer Brown, the California Supreme Court held in Arias v. Superior Court that a plaintiff may bring a representative action on behalf of himself and other employees to recover civil penalties under California's Private Attorney General Act ("PAGA") without meeting California's class- certification requirements. The court reasoned that, unlike a class action, where the plaintiff is suing on behalf of individual employees, a PAGA plaintiff steps into the shoes of state labor- law enforcement agencies. While that holding governs California state courts, the federal district courts have been split as to whether plaintiffs bringing PAGA claims in federal court must seek class certification under Federal Rule of Civil Procedure 23. On January 14, 2013, Judge Gutierrez of the Central District of California held that PAGA plaintiffs need not bother with class certification in federal court. In Alcantar v. Hobart Serv. (No. 5:11-cv-1600-PSG-SP), the plaintiff had filed a class action and a PAGA action alleging overtime, meal-period, and other wage-and- hour violations. The court denied class certification and granted in part defendants' motion for summary judgment. The defendants later filed a motion in limine, asserting that the plaintiff could no longer proceed with his PAGA claim because plaintiffs who cannot meet Rule 23's class-certification requirements lack standing to represent the rights and interests of third parties. The district court denied the motion, holding that although a class action allows individuals to seek financial remuneration to redress personal injuries, a PAGA action is an enforcement action brought on behalf of the state labor agencies to penalize noncompliant employers, making class certification unnecessary. The Alcantar court also rejected defendants' argument that the PAGA claims could not be tried on a representative basis without violating defendants' due process rights. Among other things, the defendants argued that they should have the right to call each employee to the stand as they would in defending a claim under California's Unfair Competition Law (UCL). The Alcantar court disagreed, holding that, "unlike claims under the UCL, which require an individualized determination of the particular restitution due to each plaintiff, PAGA claims require only a showing that a Labor Code violation has occurred." Finally, the Alcantar court rejected the defendants' remaining argument that Wal-Mart Stores, Inc. v. Dukes forbids the plaintiff from calculating the amount of PAGA penalties owed solely by using estimates derived from representative testimony and statistics. The district court disagreed, noting that the Dukes Court had analyzed the permissibility of "Trial by Formula" in the specific context of Title VII of the Civil Rights Act, while both the Ninth Circuit and California courts have permitted awards for California Labor Code violations based on a representative sampling of class members. (Note: The issue of use of representative testimony and statistical evidence at trial in wage and hour class action lawsuits is pending before the California Supreme Court in Duran v. U.S. Bank Nat'l Ass'n., No. S200823.) Alcantar may give new encouragement to the plaintiffs' bar in their pursuit of PAGA claims. Under its approach, defendants in PAGA cases are deprived not only of the protections of Rule 23, but also the due process right to present individualized defenses to each employee's claim. Whether other district courts will follow Alcantar's lead, or instead follow the decisions of other courts that (in our view) are more consistent with Rule 23 and due process -- and how the federal appellate courts will eventually settle this issue -- remains to be seen. In the meantime, defendants may be able to distinguish the Alcantar court's reasoning by showing that their cases involve fact patterns where proof of a statutory violation will require highly individualized, fact-sensitive mini trials. HOLOGIC INC: Has Yet to File Delaware Suit Settlement Documents --------------------------------------------------------------- Hologic, Inc. has yet to file settlement documents and obtain court approval of the settlement resolving a consolidated merger- related lawsuit in Delaware, according to the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 29, 2012. In connection with Hologic, Inc.'s acquisition of Gen-Probe Incorporated on August 1, 2012, Hologic completed a private placement of $1.0 billion aggregate principal amount of 6.25% senior notes due 2020 (the "Senior Notes"). The Senior Notes are fully and unconditionally and jointly and severally guaranteed by Hologic, Inc. ("Issuer") and certain of its domestic subsidiaries, including those acquired in its acquisition of Gen-Probe. A number of lawsuits have been filed against the Company, Gen- Probe, and Gen-Probe's board of directors. These include: (1) Teamsters Local Union No. 727 Pension Fund v. Gen-Probe Incorporated, et al. (Superior Court of the State of California for the County of San Diego); (2) Timothy Coyne v. Gen-Probe Incorporated, et al. (Delaware Court of Chancery); and (3) Douglas R. Klein v. John W. Brown, et al. (Delaware Chancery Court). The two Delaware actions have been consolidated into a single action titled: In re: Gen-Probe Shareholders Litigation. The lawsuits were filed after the announcement of the Company's acquisition of Gen-Probe on April 30, 2012, as putative stockholder class actions. Each of the actions assert similar claims alleging that Gen-Probe's board of directors failed to adequately discharge its fiduciary duties to shareholders by failing to adequately value Gen-Probe's shares and ensure that Gen-Probe's shareholders received adequate consideration in the Company's acquisition of Gen-Probe, that the acquisition was the product of a flawed sales process, and that the Company aided and abetted the alleged breach of fiduciary duty. The plaintiffs demand, among other things, a preliminary and permanent injunction enjoining the Company's acquisition of Gen-Probe and rescinding the transaction or any part thereof that has been implemented. On May 24, 2012, the plaintiffs in the Delaware action filed an amended complaint, adding allegations that the disclosures in Gen-Probe's preliminary proxy statement were inadequate. The defendants in the Delaware action answered the complaint on June 4, 2012. On July 18, 2012, the parties in the Delaware action entered into a memorandum of understanding regarding a proposed settlement of the litigation. The proposed settlement is conditioned upon, among other things, the execution of an appropriate stipulation of settlement, consummation of the merger, and final approval of the proposed settlement by the Delaware Court of Chancery. On July 9, 2012, the plaintiffs in the California action filed a motion for voluntary dismissal without prejudice. On July 12, 2012, the California Superior Court entered an order dismissing the California complaint without prejudice. IMPRELIS: Accord in Product Liability Suit Gets Initial Approval ---------------------------------------------------------------- The U.S. District Court for the Eastern District of Pennsylvania granted preliminary approval of the settlement agreement in IN RE: IMPRELIS HERBICIDE MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION, No. 11-md-02284. The settlement is preliminarily approved as fair, reasonable, and adequate, and within the range of reasonableness. The Court conditionally certified these nationwide classes: Property Owner Class (Class 1): All persons or entities who (a) own or owned property in the United States to which Imprelis was applied from August 31, 2010 through August 21, 2011, or (b) own or owned property in the United States adjacent to property to which Imprelis was applied from August 31, 2010 through August 21, 2011 and whose trees show damage from Imprelis on or before the date of entry of the Preliminary Approval Order ("Adjacent Property Owner"). Excluded from Class 1 are (1) any Judges to whom this Action is assigned and any members of their immediate families and (2) any property owners whose properties were used for the testing of Imprelis or developmental formulations containing the same active ingredient. Applicator Class (Class 2): All persons or entities that, from August 31, 2010 through August 21, 2011, purchased Imprelis (and/or received Imprelis directly or indirectly from a purchaser) and applied it to property in the United States as part of their normal business, other than property that they own or owned ("Applicators"). Excluded from Class 2 are any Judges to whom this Action is assigned and any members of their immediate family. Golf Courses and Other Self Applicators Class (Class 3): All persons or entities that, from August 31, 2010 through August 21, 2011, purchased Imprelis (and/or received Imprelis directly or indirectly from a purchaser) and applied it to properties in the United States that they own or owned ("Self Applicators"). Excluded from Class 3 are any Judges to whom this Action is assigned and any members of their immediate family. The Court appointed the Class Representatives named in the Plaintiffs' Corrected Amended Master Class Action Complaint as Class Representatives. The Court appointed Adam J. Levitt of Grant & Eisenhofer; Richard J. Arsenault of Neblett, Beard & Arsenault; Gregory Asciolla of Labaton Sucharow; Jonathan D. Selbin of Lieff, Cabraser, Heimann & Bernstein; and Richard Kitchenoff of Weinstein, Kitchenoff & Asher as Settlement Counsel. A Final Fairness Hearing will be held on September 27, 2013, at 2:00 p.m. in Courtroom 10B to determine whether the Settlement is fair, reasonable, and adequate, and should be approved. Not later than March 25, 2013, the Claims Administrator will: (a) publish both the Publication and Long Form Notices on a settlement Web site, which will be made available through a link on the Plaintiffs' Counsel's Web sites, and will contain copies of the Settlement Notices, the fully executed Settlement Agreement, and relevant Court Orders and filings (including the Fee Application). The Settlement Notices will direct recipients to the location of the settlement Web site, which will remain active through December 1, 2013. (b) publish the Publication Notice, attached to the Settlement Agreement as Exhibit 9, in certain publications. (c) place local advertisements on television in the 46 Designated Market Areas most seriously impacted by Imprelis. (d) mail the Long Form Notices via First Class Mail to all Settlement Class Members who have submitted their information to the Imprelis Claims Resolution Process. Any Class Member who wishes to opt out of the Class must do so in writing by mailing a request for exclusion to the Claims Administrator. Any such request must be postmarked no later than June 28, 2013. The parties must file a Motion for Final Approval of the Settlement and any Fee and Expense Application no later than August 7, 2013. Any Class Member who objects to the fairness, reasonableness, or adequacy of the proposed Settlement, including the proposed Fee and Expense Award must file its objection with the Clerk of Court and be received by the Parties' counsel no later than August 21, 2013. Any reply papers or other responses the parties wish to file in response to Class Member objections must be filed with the Court no later than September 4, 2013. A copy of District Judge Gene E.K. Pratter's February 12, 2013 Order is available at http://is.gd/aRMav1from Leagle.com. INTL FCSTONE: To Seek OK of Securities Suit Accord Before July --------------------------------------------------------------- INTL FCStone Inc. disclosed in its February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012, that the terms of a settlement resolving a securities lawsuit filed against a subsidiary are expected to be presented to the court for approval before July 2013. FCStone Group, Inc. ("FCStone") and certain of its officers were named as defendants in an action filed in the United States District Court for the Western District of Missouri in July 2008. A consolidated amended complaint ("CAC") was subsequently filed in September 2009. As alleged in the CAC, the action purports to be brought as a class action on behalf of purchasers of FCStone common stock between November 15, 2007, and February 24, 2009. The CAC seeks to hold defendants liable under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 and concerns disclosures included in FCStone's fiscal year 2008 public filings. Specifically, the CAC relates to FCStone's public disclosures regarding an interest rate hedge, a bad debt expense arising from unprecedented events in the cotton trading market, and certain disclosures beginning on November 3, 2008, related to losses it expected to incur arising primarily from a customer energy trading account. FCStone and the named officers moved to dismiss the action. The parties to the litigation reached an agreement in principle to settle this matter during May 2012. The proposed settlement would be at no cost to the Company after consideration of insurance, and is subject to approval by the court. The terms of the settlement are expected to be presented to the court for approval before July 2013. INTL FCStone Inc. -- http://www.intlfcstone.com/-- together with its consolidated subsidiaries, form a financial services group focused on domestic and select international markets. The Company's services include comprehensive risk management advisory services for commercial customers; execution of listed futures and options on futures contracts on all major commodity exchanges; structured over-the-counter ("OTC") products in a wide range of commodities; physical trading and hedging of precious and base metals and select other commodities; trading of more than 130 foreign currencies; market-making in international equities; Debtors origination and asset management. During the quarter ended March 31, 2011, the Company changed its name from International Assets Holding Corporation to INTL FCStone Inc., following approval of the name change by the Company's stockholders. INTL's businesses, which include the commodities advisory and transaction execution firm FCStone Group, Inc., serve more than 10,000 commercial customers in more than 100 countries through a network of offices in 12 countries around the world. INTL FCSTONE: To Seek Okay of Shareholder Suit Deal Before July --------------------------------------------------------------- INTL FCStone Inc. said in its February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012, that the terms of its subsidiary's settlement of a consolidated shareholder lawsuit are expected to be presented to the court for approval before July 2013. In August 2008, a shareholder derivative action was filed against FCStone Group, Inc. ("FCStone") and certain directors of FCStone in the Circuit Court of Platte County, Missouri, alleging breaches of fiduciary duties, waste of corporate assets and unjust enrichment. An amended complaint was subsequently filed in May 2009 to add claims based upon the losses sustained by FCStone arising out of a customer energy trading account. In July 2009, the same plaintiff filed a motion for leave to amend the existing case to add a purported class action claim on behalf of the holders of FCStone common stock. In July 2009, a purported shareholder class action complaint was filed against FCStone and its directors, as well as the Company in the Circuit Court of Clay County, Missouri. The complaint alleged that FCStone and its directors breached their fiduciary duties by failing to maximize stockholder value in connection with the contemplated acquisition of FCStone by the Company. This complaint was subsequently consolidated with the complaint filed in the Circuit Court of Platte County, Missouri. The plaintiffs subsequently filed an amended consolidated complaint which does not assert any claims against the Company. This complaint purports to be filed derivatively on FCStone and the Company's behalf and against certain of FCStone's current and former directors and officers and directly against the same individuals. The Company, FCStone and the defendants filed motions to dismiss on multiple grounds. The parties to the litigation reached an agreement in principle to settle this matter during October 2012. The proposed settlement would result in the Company incurring a legal cost of $250,000 after consideration of insurance, and is subject to approval by the court. The terms of the settlement are expected to be presented to the court for approval before July 2013. INTL FCStone Inc. -- http://www.intlfcstone.com/-- together with its consolidated subsidiaries, form a financial services group focused on domestic and select international markets. The Company's services include comprehensive risk management advisory services for commercial customers; execution of listed futures and options on futures contracts on all major commodity exchanges; structured over-the-counter ("OTC") products in a wide range of commodities; physical trading and hedging of precious and base metals and select other commodities; trading of more than 130 foreign currencies; market-making in international equities; Debtors origination and asset management. During the quarter ended March 31, 2011, the Company changed its name from International Assets Holding Corporation to INTL FCStone Inc., following approval of the name change by the Company's stockholders. INTL's businesses, which include the commodities advisory and transaction execution firm FCStone Group, Inc., serve more than 10,000 commercial customers in more than 100 countries through a network of offices in 12 countries around the world. NEW YORK: "Ligon" Stop-and-Frisk Suit Gets Class Certification -------------------------------------------------------------- Mark Hamblett, writing for New York Law Journal, reports that the second of three major cases alleging the New York City Police Department engages in an unconstitutional pattern of stopping and frisking people without a reasonable suspicion that they are engaged in criminal activity has been deemed a class action. Southern District Judge Shira Scheindlin on Feb. 11 certified a class in Ligon v. City of New York, 12-2274, a case where black and Latino citizens in the Bronx allege police have been illegally stopping and frisking them as they enter and exit buildings that take part in a police crime-fighting program. Following a hearing in which she heard from individual plaintiffs, Judge Scheindlin found on Jan. 8 the plaintiffs were likely to prevail at trial on their claim that police were violating the Fourth Amendment by stopping and frisking people who were entering, leaving, or, in some cases, just passing by buildings in the Bronx that participated in the Trespass Affidavit Program (TAP). Formerly known as Operation Clean Halls, the TAP program allows police patrols of private buildings with the consent of the owner or landlord. Some 5,000 buildings participate in the program and the police maintain it is an effective crime-fighting tool. In January, Judge Scheindlin in Ligon enjoined the practice of stopping people on suspicion of trespassing without any independent indication they were, in fact trespassing. The judge later stayed her ruling until the remedy issue is sorted out. The stay, she said, appeared to moot the city's appeal, and the city then decided to withdraw the appeal, at least for the moment. Judge Scheindlin also consolidated consideration of remedies in Ligon with the remedies in the broader class action, Floyd v. City of New York, 08 Civ. 1034, which alleges the police department has a "top-down," city-wide policy of stopping and frisking people without suspicion -- a practice that plaintiffs allege disproportionately targets young black and Latino men. In her decision certifying the class on Feb. 11, Judge Scheindlin rejected the city's claim that the plaintiffs had not established that their claims were typical of or common to the claims of the proposed class. "In sum, plaintiffs and the putative class members were allegedly subjected to the same unlawful conduct by NYPD officers under the auspices of a single NYPD program: unjustified [Terry v. Ohio] stops, not supported by reasonable suspicion, occurring outdoors in the vicinity of TAP buildings in the Bronx on suspicion of trespass," she said. In Terry v. Ohio, 392 U.S. 1 (1968), the U.S. Supreme Court held that the Fourth Amendment is not violated when a police officer stops and frisks a person without probable cause to make an arrest -- as long as the officer has a reasonable suspicion that the person has committed, is committing or is about to commit a crime. Floyd is scheduled for a bench trial on March 11, but could be pushed back one week. In both cases, the city has argued that improved training is ensuring that the stop-and-frisk practices comply with the Fourth Amendment and the plaintiffs counter that training is inadequate and unconstitutional practices are still engrained in training materials and the mindset of patrolling officers. The parties in both Ligon and Floyd are scheduled to submit on March 4 briefings on proposed remedies. Among the remedies being considered by the judge are increased training, new training materials that accurately state the law on Fourth Amendment Terry stops, greater supervision and top-down accountability to make sure that police are in compliance. Judge Scheindlin also raised the prospect of a court monitor to help ensure compliance. Christopher Dunn of the New York Civil Liberties Union said on Feb. 13, "Certifying the class was correct and necessary given that the unconstitutional stopping and frisking we challenge is endemic to the Clean Halls program. We now look forward to Judge Scheindlin ordering the systemic relief needed to fix the program." On Feb. 11, Judge Scheindlin held that consideration of any remedies in Ligon and Floyd will be independent of any remedy in Davis v. City of New York, 10-cv-699. Class certification is pending in Davis, a case where plaintiffs allege persistent Fourth Amendment violations by police in the buildings and on the property of the New York City Housing Authority. The parties in Davis are awaiting a decision on their motions for summary judgment, with briefing on the issue of class certification on hold until Judge Scheindlin makes her decision. Mark Zuckerman, senior counsel in the federal division of the Law Department, said in a statement, "We respectfully disagree with the decision. We don't believe that class certification is warranted, but it's only one step in the broader litigation." NTS REALTY: Faces Class Action in Delaware Over Merger ------------------------------------------------------ NTS Realty Holdings Limited Partnership disclosed that on February 12, 2013, the Company received notice that a putative class action lawsuit was filed on February 12, 2013 in the Court of Chancery of the State of Delaware against the Company, each of the members of the board of directors of NTS Realty Capital, Inc., the Company's managing general partner, NTS Merger Parent, LLC and Realty Capital alleging, among other things, that the board of directors breached their fiduciary duties to the unitholders of the Company in connection with the board's approval of the merger between NTS Merger Sub, LLC and the Company. The complaint seeks, among other things, money damages. Interested parties are urged to read relevant documents, when and if filed by the Company with the Securities and Exchange Commission, because they will contain important information. The Company has filed a preliminary proxy statement and will file other documents regarding the proposed merger with the SEC, and the definitive proxy statement will be sent to unitholders seeking their approval of the matters discussed above at a special meeting of unitholders. Unitholders are urged to read the proxy statement and any other relevant document when they become available because they will contain important information about the Company, the proposed merger and related matters. Interested parties may obtain a free copy of the definitive proxy statement (when available) and other documents filed by the Company with the SEC at the SEC's Web site at http://www.sec.gov The Company, its managing general partner and its managing general partner's directors, executive officers and other members of its management and employees (including J.D. Nichols and Brian F. Lavin) may be deemed participants in the solicitation of proxies from the unitholders of the Company in connection with the proposed transactions. Information regarding the special interests of persons who may be deemed to be such participants in the proposed transactions will be included in the proxy statement described above. Additional information regarding the directors and executive officers of the Company's managing general partner is also included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, which was filed with the SEC on March 23, 2012, and subsequent statements of changes in beneficial ownership on file with the SEC. These documents are available free of charge at the SEC's Web site at http://www.sec.gov About NTS Realty Holdings Limited Partnership NTS Realty Holdings Limited Partnership currently owns, wholly, as a tenant in common with unaffiliated co-owners, or through joint venture investments with affiliated and unaffiliated third parties, twenty-four properties comprised of fifteen multifamily properties, seven office buildings and business centers and two retail properties. The properties are located in and around Louisville and Lexington, Kentucky, Nashville and Cordova, Tennessee, Richmond, Virginia, Fort Lauderdale and Orlando, Florida, Indianapolis, Indiana and Atlanta, Georgia. The Company's limited partnership units are listed on the NYSE MKT platform under the trading symbol of "NLP." PANTRY INC: Dispositive Motions in Fuel Temperature Suits Pending ----------------------------------------------------------------- The Pantry, Inc.'s dispositive motions in each of the lawsuits over fuel temperature in which it has been named a defendant remain pending, according to the Company's February 5, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 27, 2012. Since the beginning of fiscal 2007, over 45 class action lawsuits have been filed in federal courts across the country against numerous companies in the petroleum industry. Major petroleum companies and significant retailers in the industry have been named as defendants in these lawsuits. Initially, the Company was named as a defendant in eight of these cases, three of which have recently been dismissed without prejudice. The Company remains as a defendant in five cases: one in North Carolina (Neese, et al. v. Abercrombie Oil Company, Inc., et al., E.D.N.C., No. 5:07-cv- 00091-FL, filed 3/7/07); one in Alabama (Cook,et al. v. Chevron USA, Inc., et al., N.D. Ala., No. 2:07-cv-750-WKW-CSC, filed 8/22/07); one in Georgia (Rutherford, et al. v. Murphy Oil USA, Inc., et al., No. 4:07-cv-00113-HLM, filed 6/5/07); one in Tennessee (Shields, et al. v. RaceTrac Petroleum, Inc., et al., No. 1:07-cv-00169, filed 7/13/07); and one in South Carolina (Korleski v. BP Corporation North America, Inc., et al., D.S.C., No 6:07-cv-03218-MDL, filed 9/24/07). Pursuant to an Order entered by the Joint Panel on Multi-District Litigation, all of the cases, including those in which the Company is named, have been transferred to the United States District Court for the District of Kansas and consolidated for all pre-trial proceedings. The plaintiffs in the lawsuits generally allege that they are retail purchasers who received less motor fuel than the defendants agreed to deliver because the defendants measured the amount of motor fuel they delivered in non-temperature adjusted gallons which, at higher temperatures, contain less energy. These cases seek, among other relief, an order requiring the defendants to install temperature adjusting equipment on their retail motor fuel dispensing devices. In certain of the cases, including some of the cases in which the Company is named, plaintiffs also have alleged that because defendants pay fuel taxes based on temperature adjusted 60 degree gallons, but allegedly collect taxes from consumers on non-temperature adjusted gallons, defendants receive a greater amount of tax from consumers than they paid on the same gallon of fuel. The plaintiffs in these cases seek, among other relief, recovery of excess taxes paid and punitive damages. Both types of cases seek compensatory damages, injunctive relief, attorneys' fees and costs and prejudgment interest. The defendants filed motions to dismiss all cases for failure to state a claim, which were denied by the court on February 21, 2008. A number of the defendants, including the Company, subsequently moved to dismiss for lack of subject matter jurisdiction or, in the alternative, for summary judgment on the grounds that plaintiffs' claims constitute non-justiciable "political questions." The Court denied the defendants' motion to dismiss on political question grounds on December 3, 2009, and defendants request to appeal that decision to the United States Court of Appeals for the Tenth Circuit was denied on August 31, 2010. In May 2010, in a lawsuit in which the Company is not a party, the Court granted class certification to Kansas fuel purchasers seeking implementation of automated temperature controls and/or certain disclosures, but deferred ruling on any class for damages. Defendants sought permission to appeal that decision to the Tenth Circuit in June 2010, and that request was denied on August 31, 2010. On November 12, 2011, Defendants in the Kansas case filed a motion to decertify the Kansas classes in light of a new favorable United States Supreme Court decision. On January 19, 2012, the Judge denied the Defendants' motion to decertify and granted the Plaintiffs' motion to certify a class as to liability and injunctive relief aspects of Plaintiffs' claims. The court has continued to deny certification of a damages class. On September 24, 2012, the jury in the Kansas case returned a verdict in favor of defendants finding that defendants did not violate Kansas law by willfully failing to disclose temperature and its effect on the energy content of motor fuel. On October 3, 2012, the judge in the Kansas case also ruled that defendants' practice of selling motor fuel without disclosing temperature or disclosing the effect of temperature was not unconscionable under Kansas law. The Company filed a motion on December 3, 2012, requesting that cases filed in Arkansas and Virginia, to neither of which the Company is a party, be remanded for further adjudication and the remaining cases be stayed until these two cases are concluded. Plaintiffs requested that cases filed in California, in which the Company is not a party, be remanded for further adjudication and the remaining cases be stayed until the California cases are concluded. On January 23, 2013, the judge ordered that the three California cases will be remanded for trial in the summer of 2013. It appears that all remaining cases will be stayed while those cases are tried. The Company has opposed class certification and filed dispositive motions in each of the cases in which the Company has been sued. At this stage of proceedings, the Company says losses are reasonably possible, however, it cannot estimate its loss, range of loss or liability, if any, related to these lawsuits because there are a number of unknown facts and unresolved legal issues that will impact the amount of any potential liability, including, without limitation: (i) whether defendants are required, or even permitted under state law, to sell temperature adjusted gallons of motor fuel; (ii) the amounts and actual temperature of fuel purchased by plaintiffs; and (iii) whether or not class certification is proper in cases to which the Company is a party. An adverse outcome in this litigation could have a material effect on the Company's business, financial condition, results of operations and cash flows. The Pantry, Inc. -- http://www.pantry.com/-- operates a chain of convenience stores in the southeastern United States. The Company's stores offer a selection of merchandise, fuel, and ancillary products and services. Its merchandise products include cigarettes, grocery and other tobacco products, packaged beverages, beer, and wine. The Company operates stores under various selected banners, which primarily include Kangaroo Express. The Company was founded in 1967 and is headquartered in Cary, North Carolina. PANTRY INC: Hearing on Bid to Junk Suit Over Card Info on Feb. 19 ----------------------------------------------------------------- A hearing on The Pantry, Inc.'s motion to dismiss a class action lawsuit over the use of information on debit and credit card receipts has been scheduled for February 19, 2013, according to the Company's February 5, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 27, 2012. On October 19, 2009, Patrick Amason, on behalf of himself and a putative class of similarly situated individuals, filed a lawsuit against The Pantry in the United States District Court for the Northern District of Alabama, Western Division (Patrick Amason v. Kangaroo Express and The Pantry, Inc. No. CV-09-P-2117-W). On September 9, 2010, a first amended complaint was filed adding Enger McConnell on behalf of herself and a putative class of similarly situated individuals. The plaintiffs seek class action status and allege that The Pantry included more information than is permitted on electronically printed credit and debit card receipts in willful violation of the Fair and Accurate Credit Transactions Act, codified at 15 U.S.C. Section 1681c(g). The amended complaint alleges that: (i) plaintiff Patrick Amason seeks to represent a subclass of those class members as to whom the Company printed receipts containing the first four and last four digits of their credit and/or debit card numbers; and (ii) Plaintiff Enger McConnell seeks to represent a subclass of those class members as to whom the Company printed receipts containing all digits of their credit and/or debit card numbers. The plaintiffs seek an award of statutory damages of $100 to $1,000 for each alleged willful violation of the statute, as well as attorneys' fees, costs, punitive damages and a permanent injunction against the alleged unlawful practice. On July 25, 2011, the court denied plaintiffs' initial motion for class certification but granted the plaintiffs the right to file an amended motion. On October 3, 2011, Plaintiff filed an amended motion for class certification seeking to certify two classes. The first purported class, represented by Mr. Amason, consists of (A) all natural persons whose credit and/or debit card was used at an in-store point of sale owned or operated by the Company from June 4, 2009, through the date of the final judgment in the action; (B) where the transaction was in a Company store located in the State of Alabama; and (C) in connection with the transaction, a receipt was printed by Retalix software containing the first four and last four digits of the credit/debit card number on the receipt provided to the customer. The second purported class, represented by Ms. McConnell, consists of (A) all natural persons whose credit and/or debit card was used at an in- store point of sale owned or operated by the Company from June 1, 2009, through the date of the final judgment in the action; and (B) in connection with the transaction, a receipt was printed containing all of the digits of the credit/debit card numbers on the receipt provided to the customer. The Company is opposing the motion for class certification, and also has made a motion to dismiss the plaintiffs' claims on the basis that the plaintiffs lack standing or alternatively to stay the case until the Supreme Court of the United States rules in First American Financial Corp. v. Edwards, another case involving a standing issue. On January 19, 2012, the Court issued an order staying the case until a decision is issued in the Edwards case, and subsequently administratively terminated plaintiffs' motion for class certification, subject to plaintiffs' right to refile the motion after the stay is removed. On June 28, 2012, the Supreme Court of the United States dismissed the writ of certiorari in the Edwards case as having been improvidently granted, an action that has no precedential effect on the Company's case. The parties filed a Joint Report to the Court on July 10, 2012, requesting that plaintiffs' Renewed Motion for Class Certification and the Company's Motion to Dismiss for Lack of Standing be deemed refiled. A hearing on the Company's Motion to Dismiss has been scheduled for February 19, 2013. At this stage of the proceedings, the Company says losses are reasonably possible, however; it cannot reasonably estimate its loss, range of loss or liability, if any, related to this lawsuit because there are a number of unknown facts and unresolved legal issues that will impact the amount of the Company's potential liability, including, without limitation: (i) whether the plaintiffs have standing to assert their claims; (ii) whether a class or classes will be certified; (iii) if a class or classes are certified, the identity and number of the putative class members; and (iv) if a class or classes are certified, the resolution of certain unresolved statutory interpretation issues that may impact the size of the putative class(es) and whether or not the plaintiffs are entitled to statutory damages. An adverse outcome in this litigation could have a material effect on the Company's business, financial condition, results of operations and cash flows. The Pantry, Inc. -- http://www.pantry.com/-- operates a chain of convenience stores in the southeastern United States. The Company's stores offer a selection of merchandise, fuel, and ancillary products and services. Its merchandise products include cigarettes, grocery and other tobacco products, packaged beverages, beer, and wine. The Company operates stores under various selected banners, which primarily include Kangaroo Express. The Company was founded in 1967 and is headquartered in Cary, North Carolina. PHILIP MORRIS: Appeals in "ADESF" Suit Remain Pending in Brazil --------------------------------------------------------------- In the first class action pending in Brazil, The Smoker Health Defense Association (ADESF) v. Souza Cruz, S.A. and Philip Morris Marketing, S.A., Nineteenth Lower Civil Court of the Central Courts of the Judiciary District of Sao Paulo, Brazil, filed July 25, 1995, Philip Morris International Inc.'s subsidiary and another member of the industry are defendants. The plaintiff, a consumer organization, is seeking damages for smokers and former smokers and injunctive relief. The Civil Court of Sao Paulo found defendants liable without hearing evidence. The court did not assess moral or actual damages, which were to be assessed in a second phase of the case. The size of the class was not defined in the ruling. In April 2004, the court clarified its ruling, awarding "moral damages" of R$1,000 (approximately $540) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not award actual damages, which were to be assessed in the second phase of the case. The size of the class was not estimated. Defendants appealed to the Sao Paulo Court of Appeals, which annulled the ruling in November 2008, finding that the trial court had inappropriately ruled without hearing evidence and returned the case to the trial court for further proceedings. In May 2011, the trial court dismissed the claim. Plaintiff has appealed. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that the plaintiff did not have standing to bring the lawsuit. This appeal is still pending. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: Sao Paulo Prosecutor's Appeal Still Pending ---------------------------------------------------------- In the second class action pending in Brazil, Public Prosecutor of Sao Paulo v. Philip Morris Brasil Industria e Comercio Ltda., Civil Court of the City of Sao Paulo, Brazil, filed August 6, 2007, Philip Morris International Inc.'s subsidiary is a defendant. The plaintiff, the Public Prosecutor of the State of Sao Paulo, is seeking (i) unspecified damages on behalf of all smokers nationwide, former smokers, and their relatives; (ii) unspecified damages on behalf of people exposed to environmental tobacco smoke ("ETS") nationwide, and their relatives; and (iii) reimbursement of the health care costs allegedly incurred for the treatment of tobacco-related diseases by all Brazilian States and Municipalities, and the Federal District. In an interim ruling issued in December 2007, the trial court limited the scope of this claim to the State of Sao Paulo only. In December 2008, the Seventh Civil Court of Sao Paulo issued a decision declaring that it lacked jurisdiction because the case involved issues similar to the ADESF case and should be transferred to the Nineteenth Lower Civil Court in Sao Paulo where the ADESF case is pending. The court further stated that these cases should be consolidated for the purposes of judgment. In April 2010, the Sao Paulo Court of Appeals reversed the Seventh Civil Court's decision that consolidated the cases, finding that they are based on different legal claims and are progressing at different stages of proceedings. This case was returned to the Seventh Civil Court of Sao Paulo, and the Company's subsidiary filed its closing arguments in December 2010. In March 2012, the trial court dismissed the case on the merits. This decision has been appealed. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: "El-Roy" Plaintiffs Appeal Denial of Class Status ---------------------------------------------------------------- Plaintiffs in El-Roy, et al. v. Philip Morris Incorporated, et al., appealed the denial of their class certification motion and the dismissal of their individual claims, according to Philip Morris International Inc.'s February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. In the first class action pending in Israel, El-Roy, et al. v. Philip Morris Incorporated, et al., District Court of Tel- Aviv/Jaffa, Israel, filed January 18, 2004, the Company's subsidiary and its indemnitees (Philip Morris USA Inc. and its former importer) are defendants. The plaintiffs filed a purported class action claiming that the class members were misled by the descriptor "lights" into believing that lights cigarettes are safer than full flavor cigarettes. The claim seeks recovery of the purchase price of lights cigarettes and compensation for distress for each class member. Hearings took place in November and December 2008 regarding whether the case meets the legal requirements necessary to allow it to proceed as a class action. The parties' briefing on class certification was completed in March 2011. In November 2012, the court denied class certification and dismissed the individual claims. Plaintiffs have appealed. PHILIP MORRIS: Israeli Ct. Has Yet to Take Action in "Navon" Suit ----------------------------------------------------------------- Philip Morris International Inc. said in its February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission that the District Court of Tel-Aviv/Jaffa, Israel, has not yet taken any action in the class action lawsuit filed by Navon, et al. The claims in the second class action pending in Israel, Navon, et al. v. Philip Morris Products USA, et al., District Court of Tel- Aviv/Jaffa, Israel, filed December 5, 2004, against the Company's indemnitee (the Company's distributor) and other members of the industry are similar to those in El-Roy case, and the case is currently stayed pending a ruling on class certification in El- Roy. The El-Roy trial court recently denied class certification, but the Navon trial court has not yet taken any action. PHILIP MORRIS: Trial in "Letourneau" Suit vs. Unit Still Ongoing ---------------------------------------------------------------- Trial in the class action lawsuit brought by Cecilia Letourneau against a subsidiary of Philip Morris International Inc. is ongoing, according to the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. In the first class action pending in Canada, Cecilia Letourneau v. Imperial Tobacco Ltd., Rothmans, Benson & Hedges Inc. and JTI Macdonald Corp., Quebec Superior Court, Canada, filed in September 1998, the Company's subsidiary and other Canadian manufacturers are defendants. The plaintiff, an individual smoker, is seeking compensatory and unspecified punitive damages for each member of the class who is deemed addicted to smoking. The class was certified in 2005. In February 2011, the trial court ruled that the federal government would remain as a third party in the case. In November 2012, the Court of Appeals dismissed defendants' third-party claims against the federal government. Trial began on March 12, 2012. At the present pace, trial is expected to last well into 2013 and possibly 2014, with a judgment to follow at an indeterminate point after the conclusion of the trial proceedings. PHILIP MORRIS: Trial in "Blais" Suit Still Ongoing in Canada ------------------------------------------------------------ Trial in the class action lawsuit commenced by Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais against a subsidiary of Philip Morris International Inc. is ongoing, according to the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. In the second class action pending in Canada, Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais v. Imperial Tobacco Ltd., Rothmans, Benson & Hedges Inc. and JTI Macdonald Corp., Quebec Superior Court, Canada, filed in November 1998, the Company's subsidiary and other Canadian manufacturers are defendants. The plaintiffs, an anti-smoking organization and an individual smoker, are seeking compensatory and unspecified punitive damages for each member of the class who allegedly suffers from certain smoking-related diseases. The class was certified in 2005. In February 2011, the trial court ruled that the federal government will remain as a third party in the case. In November 2012, the Court of Appeals dismissed defendants' third-party claims against the federal government. Trial began on March 12, 2012. At the present pace, trial is expected to last well into 2013 and possibly 2014, with a judgment to follow at an indeterminate point after the conclusion of the trial proceedings. PHILIP MORRIS: "Kunta" Suit in Winnipeg Still Dormant ----------------------------------------------------- In the third class action pending in Canada, Kunta v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Winnipeg, Canada, filed June 12, 2009, Philip Morris International Inc., its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic obstructive pulmonary disease ("COPD"), severe asthma and mild reversible lung disease resulting from the use of tobacco products. She is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. In September 2009, plaintiff's counsel informed defendants that he did not anticipate taking any action in this case while he pursues the class action filed in Saskatchewan, the Adams case. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: Prelim. Motions Remain Pending in "Adams" Suit ------------------------------------------------------------- In the fourth class action pending in Canada, Adams v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Saskatchewan, Canada, filed July 10, 2009, Philip Morris International Inc., its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic obstructive pulmonary disease ("COPD") resulting from the use of tobacco products. She is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers who have smoked a minimum of 25,000 cigarettes and have allegedly suffered, or suffer, from COPD, emphysema, heart disease, or cancer, as well as restitution of profits. Preliminary motions are pending. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: "Semple" Class Suit in Nova Scotia Still Dormant --------------------------------------------------------------- In the fifth class action pending in Canada, Semple v. Canadian Tobacco Manufacturers' Council, et al., The Supreme Court (trial court), Nova Scotia, Canada, filed June 18, 2009, Philip Morris International Inc., its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and chronic obstructive pulmonary disease ("COPD") resulting from the use of tobacco products. He is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. No activity in this case is anticipated while plaintiff's counsel pursues the class action filed in Saskatchewan, the Adams case. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: "Dorion" Suit in Alberta, Canada Remains Dormant --------------------------------------------------------------- In the sixth class action pending in Canada, Dorion v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Alberta, Canada, filed June 15, 2009, Philip Morris International Inc., its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic bronchitis and severe sinus infections resulting from the use of tobacco products. She is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. To date, the Company, its subsidiaries, and its indemnitees have not been properly served with the complaint. No activity in this case is anticipated while plaintiff's counsel pursues the class action filed in Saskatchewan, the Adams case. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: "McDermid" Suit Still Pending in British Columbia ---------------------------------------------------------------- In the seventh class action pending in Canada, McDermid v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada, filed June 25, 2010, Philip Morris International Inc., its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and heart disease resulting from the use of tobacco products. He is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from heart disease allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed. Defendants have filed jurisdictional challenges on the grounds that this action should not proceed during the pendency of the Saskatchewan class action, the Adams case. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: "Bourassa" Suit Still Pending in British Columbia ---------------------------------------------------------------- In the eighth class action pending in Canada, Bourassa v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada, filed June 25, 2010, Philip Morris International Inc., its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, the heir to a deceased smoker, alleges that the decedent was addicted to tobacco products and suffered from emphysema resulting from the use of tobacco products. She is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from chronic respiratory diseases allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed. Defendants have filed jurisdictional challenges on the grounds that this action should not proceed during the pendency of the Saskatchewan, the Adams case. No further updates were reported in the Company's February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. PHILIP MORRIS: Counsel in "Jacklin" Suit To Cease Case Activity --------------------------------------------------------------- Plaintiff's counsel in the class action lawsuit initiated by Suzanne Jacklin in Ontario, Canada have indicated that they do not intend to take any action in this case in the near future, Philip Morris International Inc. disclosed in its February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission. In the ninth class action pending in Canada, Suzanne Jacklin v. Canadian Tobacco Manufacturers' Council, et al., Ontario Superior Court of Justice, filed June 20, 2012, the Company, its subsidiaries, and its indemnitees (Philip Morris USA Inc. and Altria Group, Inc.), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic obstructive pulmonary disease ("COPD") resulting from the use of tobacco products. She is seeking compensatory and unspecified punitive damages on behalf of a proposed class comprised of all smokers who have smoked a minimum of 25,000 cigarettes and have allegedly suffered, or suffer, from COPD, heart disease, or cancer, as well as restitution of profits. Plaintiff's counsel have indicated that they do not intend to take any action in this case in the near future. PURR-FECTION: Recalls 7,200 Beamerzzz Stuffed Toys w/ Flashlight ---------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Purr-Fection by MJC, Inc., of Tualatin, Oregon, announced a voluntary recall of about 7,200 Beamerzzz(TM) Stuffed Animals with LED Flashlight. Consumers should stop using this product unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. LED flashlight wires can protrude through the stuffed toy, posing a laceration hazard. One incident was reported involving a consumer who noticed an exposed wire. No injuries were reported. The recalled Beamerzzz stuffed toys come with LED flashlights sewn into the left paw. The toys are 12 inches high and come in five animal types. The model number can be found on the hang tag on the left ear. Affected toys are marked with manufacturing code 111208-02 on the sewn in label located in the left rear portion of the toy. The recalled styles are: Style Model No. ----- --------- Baby Moose 3127FS Baby Butter Cream Bear 1229FS Baby Smoky Black Bear 1231FS Baby Deer 3136FS Baby Derby Elephant 1927FS A picture of the recalled products is available at: http://is.gd/0cG9ju The recalled products were manufactured in China and sold at Cabela's stores and online at Cabelas.com from September 2012 through November 2012 for about $15. Consumers should immediately take the recalled toys away from children and contact Purr-Fection by MJC for a replacement toy. Purr-Fection by MJC may be reached at (800) 359-0254 from 9:00 a.m. to 4:00 p.m. Pacific Time Monday through Friday, or online at http://www.purr-fection.com/and click on the orange product recall tab at the top of the page for more information. RETAIL ADVENTURES: Jan Cameron May Face Class Action Over Rescue ---------------------------------------------------------------- Cara Waters, writing for Crikey, reports that bargain-hunting businesswoman Jan Cameron has bought back into the retail chain she attempted to rescue in 2009 -- but she could face a class action. Ms. Cameron has bought back Retail Adventures for AUD58.9 million after the business was put into administration in October last year. Retail Adventures is Australia's largest discount variety store operator and operates Crazy Clark's, Sam's Warehouse, Go-Lo and Chickenfeed, with around 236 stores and 5000 employees. Ms. Cameron is not just a retail investor; she made headlines in 2011 when she bought Tasmania's controversial Triabunna woodchip mill, with media figure and wotif founder Graeme Wood. Ms. Cameron initially bought Retail Adventures out of administration in 2009 for AUD85 million and invested another AUD80 million over the past three years to keep the business afloat. Administrator Vaughan Strawbridge of Deloitte Restructuring Service said in a statement on Feb. 12 the offer received from Ms. Cameron's company, DSG Holdings Australia Pty Ltd., was the highest received following a public sale process. "This is a positive outcome. The sale will ensure jobs are retained for approximately 4700 employees, with many stores located in regional areas. Trade with key suppliers will also continue, landlords will retain tenants, and the network of more than 210 stores will continue to serve local communities and customers." Mr. Strawbridge says the sale process was complex and time is needed to fully transition supplier contracts, leases and employees to DSG. Landlords are still to agree on 131 store leases. Mr. Strawbridge says DSG will continue to cover entitlements for employees who have been made redundant to date. "This will continue, and the purchase price has been adjusted for employee entitlements assumed and monies paid to the administrators to cover redundancies paid," he said. Mr. Strawbridge says he expects a deed of company arrangement would be put forward which would need to result in a better return to creditors than had Retail Adventures been placed into liquidation. "The ultimate likely recovery for creditors is unknown at this time and forms part of the administrator's ongoing investigations," he said. But unsecured creditors who are owed AUD96 million are unlikely to be happy with the deal, and Ms. Cameron could face a class action run by litigation funder IMF. IMF managing director Hugh McLernon told Crikey sister publication SmartCompany the litigation funder has been supporting creditors to push the administrator to carry out a public examination of the offices of Retail Adventures. "This examination will be primarily to determine whether the company was allowed to trade while it was insolvent and whether there were any serious preferences paid before it went into administration," he said. Mr. McLernon says the unsecured creditors are also very interested in the question of whether the security that is held by another Cameron company called Retail Adventures Holdings Pty Ltd. is enforceable. "What we have suggested is that the administrator should have already carried out those investigations, but seeing as he hasn't, he should call a meeting as soon as possible to give the creditors an opportunity to put the company into liquidation and enable them to take their own action against the officers of the company," he said. "The reason for that is it seems absolutely clear that the AUD100 million worth of unsecured creditors will not get a cent from the sale proceeds of the business." Mr. McLernon says IMF is in the process of formalizing the litigation. A spokesperson for Deloitte told SmartCompany the administrators were not aware of any legal actions which had been proposed or commenced. "The administrators have not received any information from any creditor on any specific issues of concern," he said. SCOTTS MIRACLE-GRO: Defends Suits Over Wild Bird Food Products -------------------------------------------------------------- The Scotts Miracle-Gro Company is defending itself against a consolidated class action lawsuit related to its wild bird food products, according to the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 29, 2012. In connection with the sale of wild bird food products that were the subject of a voluntary recall in 2008, the Company has been named as a defendant in four putative class actions filed on and after June 27, 2012, which have now been consolidated in the United States District Court for the Southern District of California as In re Morning Song Bird Food Litigation, Lead Case No. 3:12-cv-01592-JAH-RBB. The plaintiffs allege various statutory and common law claims associated with the Company's sale of wild bird food products and a plea agreement entered into in previously pending government proceedings associated with such sales. The plaintiffs seek on behalf of themselves and various purported class members monetary damages, restitution, injunctive relief, declaratory relief, attorney's fees, interest and costs. The Company says it intends to vigorously defend the consolidated action. Given the early stages of the action, the Company cannot make a determination as to whether it could have a material effect on the Company's financial condition, results of operations or cash flows and has not recorded any accruals with respect thereto. SOUTHWEST AIRLINES: E-Data Examination Ongoing in Antitrust Suit ---------------------------------------------------------------- An expert is currently examining electronic data produced by a subsidiary of Southwest Airlines Co. in the antitrust class action lawsuit pending in Georgia, according to the Company's February 7, 2013, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. A complaint alleging violations of federal antitrust laws and seeking certification as a class action was filed against Delta Air Lines, Inc. ("Delta") and AirTran Airways in the United States District Court for the Northern District of Georgia in Atlanta on May 22, 2009. The complaint alleged, among other things, that AirTran attempted to monopolize air travel in violation of Section 2 of the Sherman Act, and conspired with Delta in imposing $15- per-bag fees for the first item of checked luggage in violation of Section 1 of the Sherman Act. The initial complaint sought treble damages on behalf of a putative class of persons or entities in the United States who directly paid Delta and/or AirTran such fees on domestic flights beginning December 5, 2008. After the filing of the May 2009 complaint, various other nearly identical complaints also seeking certification as class actions were filed in federal district courts in Atlanta, Georgia; Orlando, Florida; and Las Vegas, Nevada. All of the cases were consolidated before a single federal district court judge in Atlanta. A Consolidated Amended Complaint was filed in the consolidated action on February 1, 2010, which broadened the allegations to add claims that Delta and AirTran conspired to reduce capacity on competitive routes and to raise prices in violation of Section 1 of the Sherman Act. In addition to treble damages for the amount of first baggage fees paid to AirTran and to Delta, the Consolidated Amended Complaint seeks injunctive relief against a broad range of alleged anticompetitive activities, as well as attorneys' fees. On August 2, 2010, the Court dismissed plaintiffs' claims that AirTran and Delta had violated Section 2 of the Sherman Act; the Court let stand the claims of a conspiracy with respect to the imposition of a first bag fee and the airlines' capacity and pricing decisions. On June 30, 2010, the plaintiffs filed a motion to certify a class, which AirTran and Delta have opposed. The Court has not yet ruled on the class certification motion. The original period for fact and expert discovery was scheduled to end on February 25, 2011, but on February 3, 2012, the Court granted plaintiffs' motion for supplemental discovery because Delta discovered that it had not produced certain electronic documents. The period for supplemental discovery against AirTran ended on May 3, 2012, but discovery disputes between plaintiffs and Delta have continued. On June 18, 2012, the parties filed a Stipulation and Order that plaintiffs have abandoned their claim that AirTran and Delta conspired to reduce capacity. AirTran and Delta moved for summary judgment on all of plaintiffs' remaining claims on August 31, 2012. The plaintiffs filed motions to compel Delta to produce additional documents and for sanctions based on alleged failures to produce electronic data. On November 19, 2012, the Court ordered plaintiffs to appoint an expert to examine Delta's production of electronic data and suspended the briefing schedule for the summary judgment motion until the expert has completed his work. It is AirTran's understanding that the expert's work is ongoing. While AirTran has denied all allegations of wrongdoing, including those in the Consolidated Amended Complaint, and intends to defend vigorously any and all such allegations, results of legal proceedings such as this one cannot be predicted with certainty. Regardless of its merit, this litigation and any potential future claims against the Company or AirTran may be both time consuming and disruptive to the Company's operations and cause significant expense and diversion of management attention. Should AirTran and the Company fail to prevail in this or other matters, the Company may be faced with significant monetary damages or injunctive relief that could materially adversely affect its business and might materially affect its financial condition and operating results. SPORT CHALET: Defends "Bennett" Class Action Suit in California --------------------------------------------------------------- Sport Chalet, Inc. is defending a class action lawsuit initiated by Brian Bennett in California, according to the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 30, 2012. On April 12, 2012, the Company was served with a complaint filed in the California Superior Court for the County of Los Angeles, entitled Brian Bennett v. Sport Chalet, Inc. and Sport Chalet Team Sales, Inc. (Case No. BC482472), alleging violations of the California Civil Code. The complaint was brought as a purported class action on behalf of wheelchair-bound persons located in California. The plaintiff alleges, among other things, that the Company violated California state law by failing to make certain store locations accessible to individuals with disabilities. The plaintiff seeks, on behalf of the class members, unspecified amounts of damages, attorneys' fees and costs. Plaintiffs' demands for injunctive relief claim that the features of some of the Company's California stores are not in compliance with state or federal regulations and therefore are not accessible to individuals who use wheelchairs. The Company intends to defend this litigation vigorously. STANDARD FIRE: Monetary Limits on Class Action at Issue ------------------------------------------------------- Michelle Keahey, writing for Legal Newsline, reports that Supreme Court Justice Courtney Hudson Goodson reported late last month that she received a trip worth $50,000 to Italy in 2012 from plaintiff attorney W.H. Taylor, a friend of her class action attorney husband John C. Goodson. Justice Goodson and her husband both reported the gift from Mr. Taylor in their recent statements of financial interest filed with the Arkansas Secretary of State. In a statement to the Arkansas Democrat-Gazette, a spokesman for the jurist said that Justice Goodson would recuse herself from any cases involving Mr. Taylor. The European trip is not the first extravagance Mr. Taylor has bestowed upon the justice. According to state financial disclosure statements, Justice Goodson accepted a $12,000 Caribbean cruise from Mr. Taylor in 2011. Justice Goodson recently attracted media attention after visiting briefly with U.S. Supreme Court Justice Antonin Scalia in what was described as a "courtesy" meeting on the same day the high court heard oral arguments in Standard Fire Insurance Co. v. Knowles, a case arising from Miller County, Arkansas and one being litigated by her husband. According to Arkansas Business, Arkansas Supreme Court spokeswoman Stephanie Harris said the meeting took place shortly after oral arguments, held on Jan. 7. "Justice Scalia and Justice Goodson exchanged pleasantries," said Ms. Harris, according to Arkansas Business. "Justice Scalia was made aware of Justice Goodson's husband's involvement in the case before he extended the courtesy to her. They never spoke about the case." The Arkansas Business also reported that Kathy Arberg, a public information officer for the U.S. Supreme Court, said, "Justice Scalia briefly greeted Justice Goodson, whom he did not know, at the request of one of her colleagues on the Arkansas Supreme Court. The extending of such a courtesy is not at all uncommon." The central argument in Standard Fire Insurance Co. v. Knowles concerns efforts by lawyers, including Mr. Goodson, to place monetary limits on class actions in an effort to keep the lawsuits in so-called plaintiff-friendly jurisdictions such as Miller County. The underlying "Knowles" class action -- which claims that Standard Fire breached its contract by systematically underpaying loss claims -- was initiated by attorney Goodson, who has made millions in attorney's fees from similar cases in Miller County Circuit Court. Mr. Goodson's firm, Keil & Goodson of Texarkana, Ark., Nix Patterson & Roach of Austin, Texas and Mr. Taylor's firm of Taylor Law Partners in Fayetteville, Ark. have repeatedly filed stipulations in class action cases that prevent plaintiffs and class members from receiving more than $5 million to keep the lawsuits in Arkansas state court. Damages exceeding $5 million would automatically move claims to federal court under the Class Action Fairness Act. The Supreme Court is expected to rule on the issue before the end of its current term. In December, Justice Goodson was also in the news for being named as the Arkansas Supreme Court's liaison to its Committee on Professional Conduct, which oversees the ethical performance of lawyers. Justice Goodson was first sworn in as a judge of the Arkansas Court of Appeals in May 2008 and stayed in that office until she left for the Arkansas Supreme Court in 2011. She is currently serving an eight-year term, which will end in 2018. During her most recent campaign for the high court, she ran on a family-interest platform. Shortly after her election, her husband of 14 years, Mark Henry, sued for divorce. She married John Goodson about a year later. STATE COMPENSATION: Faces Auditors' Overtime Class Action --------------------------------------------------------- Courthouse News Service reports that the State Compensation Insurance Fund forces auditors to work off the clock, cheating them of overtime, a class action claims in Federal Court. SUNPOWER CORP: $19MM Deal Excluded in Non-GAAP Financial Measures ----------------------------------------------------------------- SunPower Corporation disclosed in its February 7, 2013, Form 8-K filing with the U.S. Securities and Exchange Commission that the agreement in principle it reached in December 2012 to settle a consolidated securities class action lawsuit for $19.7 million was excluded from its non-GAAP financial measures as it is non- recurring and not reflective of ongoing operating results. In December 2012, the Company reached an agreement in principle to settle a consolidated securities class action lawsuit for $19.7 million and recorded a charge of the same amount in the fourth quarter of 2012. The lawsuits arose from the Audit Committee's investigation announcement on November 16, 2009, regarding certain unsubstantiated accounting entries. The Company excludes this charge from its non-GAAP financial measures as it is non-recurring and not reflective of ongoing operating results. Excluding this data provides investors with a basis to compare the company's performance against the performance of other companies without such charges. Based in San Jose, California, SunPower Corporation -- http://www.sunpowercorp.com/-- an integrated solar products and services company, designs, manufactures, and delivers solar electric systems for residential, commercial, and utility-scale power plant customers worldwide. It operates in two segments, Utility and Power Plants, and Residential and Commercial. SunPower Corporation is a subsidiary of Total Gas & Power USA, SAS. TOWERS WATSON: Awaits Appellate Ct. Directive Regarding Mediation ----------------------------------------------------------------- Towers Watson & Co. said in its February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012, that it is awaiting appellate court confirmation as to whether briefing on an appeal from a summary judgment in favor of defendants of a consolidated shareholder lawsuit will be stayed or the parties are required participate in its mediation program. Towers Watson was formed on January 1, 2010, from the merger of Towers, Perrin, Forster & Crosby, Inc. ("Towers Perrin") and Watson Wyatt Worldwide, Inc. ("Watson Wyatt"), two leading professional services firms that traced their roots back more than 100 years. A putative class action lawsuit filed by certain former shareholders of Towers Perrin (the "Dugan Action") previously was reported in Amendment No. 3 to the Registration Statement on Form S-4/A (File No. 333-161705) filed on November 9, 2009, by the Jupiter Saturn Holding Company (the "Registration Statement"). As reported in the Registration Statement, the complaint was filed on November 5, 2009, against Towers Perrin, members of its board of directors, and certain members of senior management in the United States District Court for the Eastern District of Pennsylvania. Plaintiffs in this action are former members of Towers Perrin's senior management, who left Towers Perrin at various times between 1995 and 2000. The Dugan plaintiffs seek to represent a class of former Towers Perrin shareholders who separated from service on or after January 1, 1971, and who also meet certain other specified criteria. The complaint does not contain a quantification of the damages sought. On December 9, 2009, Watson Wyatt was informed by Towers Perrin of a settlement demand from the plaintiffs in the Dugan Action. Although the complaint in the Dugan Action does not contain a quantification of the damages sought, plaintiffs' settlement demand, which was orally communicated to Towers Perrin on December 8, 2009, and in writing on December 9, 2009, sought a payment of $800 million to settle the action on behalf of the proposed class. Plaintiffs requested that Towers Perrin communicate the settlement demand to Watson Wyatt. On December 17, 2009, four other former Towers Perrin shareholders, all of whom voluntarily left Towers Perrin in May or June 2005 and all of whom are excluded from the proposed class in the Dugan Action, commenced a separate legal proceeding (the "Allen Action") in the United States District Court for the Eastern District of Pennsylvania alleging the same claims in substantially the same form as those alleged in the Dugan Action. A fifth plaintiff joined this action on August 29, 2011. These plaintiffs are proceeding in their individual capacities and do not seek to represent a proposed class. On January 15, 2010, another former Towers Perrin shareholder who separated from service with Towers Perrin in March 2005 when Towers Perrin and EDS launched a joint venture that led to the creation of a corporate entity known as ExcellerateHRO ("eHRO"), commenced a separate legal proceeding (the "Pao Action") in the United States District Court of the Eastern District of Pennsylvania alleging the same claims in substantially the same form as those alleged in the Dugan Action. Towers Perrin contributed its Towers Perrin Administrative Solutions ("TPAS") business to eHRO and formerly was a minority shareholder (15%) of eHRO. Pao seeks to represent a class of former Towers Perrin shareholders who separated from service in connection with Towers Perrin's contribution to eHRO of its TPAS business and who are excluded from the proposed class in the Dugan Action. Towers Watson is also named as a defendant in the Pao Action. Pursuant to the Towers Perrin Bylaws in effect at the time of their separations, the Towers Perrin shares held by all plaintiffs were redeemed by Towers Perrin at book value when these individuals separated from employment. The complaints allege variously that there either was a promise that Towers Perrin would remain privately owned in perpetuity (Dugan Action) or that in the event of a change to public ownership plaintiffs would receive compensation (Allen and Pao Actions). Plaintiffs allege that by agreeing to sell their shares back to Towers Perrin at book value upon separation, they and other members of the putative classes relied upon these alleged promises, which they claim were breached as a result of the consummation of the Merger between Watson Wyatt and Towers Perrin. The complaints assert claims for breach of contract, breach of express trust, breach of fiduciary duty, promissory estoppel, quasi-contract/unjust enrichment, and constructive trust, and seek equitable relief including an accounting, disgorgement, rescission and/or restitution, and the imposition of a constructive trust. On January 20, 2010, the court consolidated the three actions for all purposes. On February 22, 2010, defendants filed a motion to dismiss the complaints in their entireties. By order dated September 30, 2010, the court granted the motion to dismiss plaintiffs' claim for a constructive trust and denied the motion with respect to all other claims alleged. Pursuant to the court's September 30, 2010 order, defendants also filed answers to plaintiffs' complaints on October 22, 2010. The parties have completed fact discovery. Neither the plaintiffs in Dugan or Pao has moved for class certification. Defendants filed a motion for summary judgment on all claims in all actions on December 23, 2011. The court heard argument on June 19, 2012, and on December 11, 2012, granted defendants' motion, and entered judgment in favor of defendants on all claims. On January 10, 2013, plaintiffs filed a joint notice of their intent to appeal the court's judgment to the U.S. Court of Appeals for the Third Circuit. Towers Watson awaits confirmation as to whether the appellate court will stay briefing of the appeal and require the parties to participate in its mediation program. In that event, Towers Watson would expect the appellate court to issue a briefing schedule only after an unsuccessful conclusion of the mediation. Towers Watson continues to believe the claims in these lawsuits are without merit and that the court's decision to grant summary judgment in favor of defendants should be upheld on appeal. However, the outcome of any appeal is uncertain and may be unfavorable to Towers Watson. Given the stage of the proceedings, the Company has concluded that a loss is neither probable nor estimable, and that the Company is unable to estimate a reasonably possible loss or range of loss. UNITEDHEALTH GROUP: Continues to Defend Ingenix-Related Suits ------------------------------------------------------------- UnitedHealth Group Incorporated continues to defend itself against class action lawsuits arising from its use of a database previously maintained by Ingenix, Inc., according to the Company's February 7, 2013, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. The Company is involved in a number of lawsuits challenging reimbursement amounts for non-network health care services based on the Company's use of a database previously maintained by Ingenix, Inc. (now known as OptumInsight), including putative class actions and multidistrict litigation brought on behalf of members of Aetna and WellPoint. These lawsuits allege, among other things, that the database licensed to these companies by Ingenix was flawed and that Ingenix conspired with these companies to underpay their members' claims and seek unspecified damages and treble damages, injunctive and declaratory relief, interest, costs and attorneys' fees. The Company is vigorously defending these lawsuits. In 2012, the Company was dismissed as a party from a similar lawsuit involving Cigna and its members. The Company cannot reasonably estimate the range of loss, if any, that may result from these matters due to the procedural status of the cases, dispositive motions that remain pending, the absence of class certification in any of the cases, the lack of a formal demand on the Company by the plaintiffs, and the involvement of other insurance companies as defendants. UnitedHealth Group Incorporated operates as a diversified health and well-being company in the United States. The Company is headquartered in Minnetonka, Minnesota. VIRGIN MEDIA: Being Sold to Liberty for Too Little, Suit Claims --------------------------------------------------------------- Jeff Grimsley, individually and on behalf of all others similarly situated v. Neil Berkett, James Mooney, Eamonn O'Hare, Charles Allen, James Chiddix, Andrew Cole, William Huff, Gordon McCallum, John Rigsby, Steven Simmons, Doreen Toben, George Zoffinger, Virgin Media, Inc., Liberty Global, Inc., Lynx Europe Limited, Lynx US Merger Co 1 LLC, Lynx US Merger Co 2 LLC, Viper US MergerCO 1 LLC, and Viper US MergerCO 2 LLC, Case No. 650469/2013 (N.Y. Sup. Ct., February 12, 2013) is brought on behalf of the public stockholders of Virgin Media against members of its Board of Directors for their breaches of fiduciary duties arising out of their attempt to sell the Company to Liberty Global by means of an alleged unfair process and for an unfair price. The Directors have breached their fiduciary duties by agreeing to the Proposed Transaction for grossly inadequate consideration, Mr. Grimsley contends. He argues that given Virgin Media's recent strong performance as well as its future growth prospects, the consideration shareholders will receive under the Proposed Transaction is inadequate and undervalues the Company. Mr. Grimsley is a shareholder of Virgin Media. Virgin Media is a Delaware corporation headquartered in New York. The Individual Defendants are directors and officers of the Company. Liberty Global is a Delaware corporation based in Englewood, Colorado. Liberty Global is an international cable company with operations in 13 countries. The Defendant Merger Subs were created for the purposes of effectuating the Proposed Transaction. The Plaintiff is represented by: Shannon L. Hopkins, Esq. LEVI & KORSINSKY, LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171 E-mail: shopkins@zlk.com WAL-MART STORES: Faces Suit Over Online Credit Card Transactions ---------------------------------------------------------------- Courthouse News Service reports that a federal class action claims Wal-Mart illegally demands a consumer's phone number during an online credit-card transaction. WAL-MART STORES: Class Cert. Bid in "Evans" Suit Denied as Moot --------------------------------------------------------------- A motion to certify EVANS v. WAL-MART STORES, INC. as a class action has been denied. District Judge James C. Mahan said, "in order for the parties to fully brief their issues and arguments, as well as participate in any further mediation the parties wish, the court finds it appropriate to deny as moot the current motion to certify class action." However, Judge Mahan denied the motion without prejudice and the "Plaintiff may re-file its motion to certify class action and defendant may file its proposed motion to dismiss, or, in the alternative, summary judgment depending on the outcome of the mediation." The case before Judge Mahan is styled CHARDE EVANS, Plaintiff, v. WAL-MART STORES, INC., et al., Defendants, No. 2:10-CV-1224 JCM (VCF), (D. Nev.). A copy of the District Court's February 12, 2013 Order is available at http://is.gd/2s66Otfrom Leagle.com. WMS INDUSTRIES: Awaits Ruling on Bid to Dismiss "Conlee" Suit ------------------------------------------------------------- WMS Industries Inc. is awaiting a court decision on its motion to dismiss an amended complaint submitted by Wayne C. Conlee, according to the Company's February 7, 2013, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended December 31, 2012. On May 25, 2011, a putative class action was filed against the Company and certain of its executive officers in the U.S. District Court for the Northern District of Illinois by Wayne C. Conlee (the "Conlee lawsuit"). On October 13, 2011, the lead plaintiff filed an amended complaint in the Conlee lawsuit. As amended, the lawsuit alleged that, during the period from September 21, 2010, to August 4, 2011, (the date the Company announced its fiscal 2011 financial results), the Company made material misstatements and omitted material information related to the Company's fiscal year 2011 guidance. Plaintiff sought to certify a class of stockholders who purchased stock between these dates. The lawsuit specifically alleged violations of (i) Section 10(b) of the Securities Exchange Act of 1934, as amended (the "34 Act"), and Rule 10b-5 promulgated thereunder and (ii) Section 20(a) of the 34 Act. The amended complaint sought unspecified damages. The Company filed a motion to dismiss the amended complaint on December 8, 2011, and, on July 25, 2012, the Court granted the Company's motion without prejudice. On September 12, 2012, the Plaintiffs filed a further amended complaint, which re-asserts claims under Sections 10(b) and 20(a) of the 34 Act and under SEC Rule 10b-5. The Company filed a motion to dismiss the further amended complaint on October 26, 2012. On November 30, 2012, the Plaintiffs filed their opposition to the Company's motion. The Company filed its reply memorandum on December 21, 2012. The court has not yet ruled on the Company's motion. WMS Industries Inc. is engaged in the design, manufacture and sale of coin-operated and home video games, pinball and novelty games and video lottery terminals and gaming devices. The Company is headquartered in Waukegan, Illinois. * Robins Geller at Center of Confidential Witness Conundrum ----------------------------------------------------------- Thomson Reuters' Alison Frankel said "Robbins Geller Rudman & Dowd has been at the center of what I've previously called the confidential witness conundrum: the pervasive phenomenon in which former employees cited in securities class action complaints refute their statements to plaintiffs' lawyers when they're contacted by defense lawyers. Securities class action lawyers, as you know, aren't permitted to serve discovery demands on defendants until they've gotten past dismissal motions, so their complaints rely heavily on allegations by confidential informants. But former employees are often subject to confidentiality provisions in severance agreements. Depending on which side you believe, plaintiffs' lawyers routinely misrepresent the information their investigators have received from confidential witnesses -- or former employees get scared and recant when their identity is revealed and their severance is endangered." Defense lawyers have claimed that just about every significant plaintiffs' firm has lied about information obtained from former employees, but Robbins Geller (which, after all, files more cases than anyone else in the securities class action bar) has been on the receiving end of more defense accusations than anyone else. That was a dangerous dynamic for the firm, since every new accusation refers back to the old ones. But Robbins Geller just got good news in a hard-fought fight over confidential witnesses in a case in Georgia, continuing the firm's run of success in fending off allegations of misrepresentation. U.S. District Judge William Duffey of Atlanta decided to forgo any action against the plaintiffs' firm, even though Robbins Geller's own investigator in the case he was overseeing, a class action against SunTrust Banks, had contacted the court to contradict what the firm told the judge about its lawyers' contacts with a recanting informant. Judge Duffey said Robbins Geller's behavior was not "in keeping with the conduct expected of attorneys practicing before this court," but concluded that the firm hadn't committed misconduct amounting to "an actionable violation of the Federal Rules of Civil Procedure." Judge Duffey's order ended a five-month headache for Robbins Geller that started last September, when Desiree Torres, an independent investigator working on the SunTrust case for the firm, contacted the judge's clerk to say that she was troubled by information Robbins Geller had presented to the court. (Duffey explained the backstory in an order in October.) Plaintiffs' lawyers had supposedly told the judge that they didn't know one of their witnesses had left the bank before events alleged in their pleadings. But Ms. Torres said that wasn't true. She told the court that Robbins Geller lawyers were present when she interviewed the former SunTrust employee. Not only did Robbins Geller know when he left the bank, she said, but also knew that he had disavowed knowledge of the bank's conduct after his departure. Judge Duffey ordered a hearing on the apparent discrepancy between the firm's assurances and Ms. Torres's account. (That order, in turn, prompted problems for defense counsel in another Robbins Geller case, an ongoing class action against Regions Financial in federal court in Birmingham, Alabama. A lawyer for individual defendants in the Regions case sent a letter to Judge Duffey, claiming that there were similar allegations against Robbins Geller in the Alabama case and asking the judge to keep the SunTrust hearing open to the public. The letter sparked an angry response from the federal judge overseeing the Regions case, who had already certified a class despite defense arguments that five confidential informants had recanted their purported statements to the plaintiffs' firm.) At the Dec. 18 hearing before Judge Duffey in the SunTrust case, Ms. Torres testified about "her concerns about the manner in which the information she collected from fact witnesses in this action was presented to the court," according to last week's order. Robbins Geller then offered its version of its litigation and case-management strategy, the judge said. Judge Duffey wasn't happy about what he heard. "The court remains troubled by the conduct of plaintiffs' counsel in failing to correct representations made in their pleadings," he wrote. "The decision not to correct the record after counsel became aware of the court's reliance on plaintiffs' representations is perplexing and disappointing." Nevertheless, he said, Robbins Geller hadn't committed an actionable violation, and since he had already dismissed the class action, he decided not to take further action. Ms. Torres has resigned as an investigator, Judge Duffey noted in a footnote. Judge Duffey is the second federal judge to hold a hearing on confidential witnesses in a Robbins Geller securities class action. As previously reported, U.S. Senior District Judge Jed Rakoff ordered testimony last fall from recanting witnesses in a case against Lockheed. After a seven-hour session, Judge Rakoff told both sides that he found the plaintiffs' investigator (not Ms. Torres, in this case) to be credible but was concerned about relying on double-hearsay evidence from the informants. The Lockheed case subsequently settled in December, though terms have not yet been disclosed. Robbins Geller hasn't heard the last of the confidential witness issue. The 7th Circuit Court of Appeals is considering the firm's appeal of the dismissal of a class action against Boeing, which was tossed after a confidential witness recanted statements attributed to him. Both Robbins Geller and Boeing have already sent Judge Duffey's order to the appeals court. Robbins partner Patrick Coughlin told me the firm is "satisfied" with Judge Duffey's order. "We believe we reacted as quickly as we could under the circumstances to make the record clear," he said. SunTrust counsel Timothy Mast of Troutman Sanders declined to comment. * Vague Scienter Standards Result to Judicial Bias -------------------------------------------------- Alison Frankel, writing for Thomson Reuters, reports that at the recent Professional Liability Underwriting Society's D&O Symposium, U.S. Senior District Judge Jed Rakoff took great care to say almost nothing newsworthy as a panelist discussing trends in securities class action litigation. Almost nothing. Judge Rakoff did make one controversial point. The Private Securities Litigation Reform Act of 1996, he said, gave judges tremendous discretion to decide if a class action complaint should be dismissed. As a result, Judge Rakoff said, trial judges are too likely to apply their own ideology in deciding whether securities cases should go forward. A recently published article in the Case Western Reserve Law Review backs Judge Rakoff's theory with quantitative evidence. Authors Dain Donelson and Robert Prentice, of the University of Texas's McCombs School of Business, looked at 144 securities fraud class actions against major accounting firms to determine whether they could discern a pattern in rulings on the defendants' fraudulent intent. They could not. After a lot of calculations involving squiggly symbols and underlying "dependent variables" such as regulatory investigations and accounting restatements, Messrs. Donelson and Prentice concluded that "few factors are consistently viewed by the courts as indicative (or not) of auditor scienter." "The law of pleading scienter against external auditors in (securities fraud) cases is so vague and inconsistent that, as a practical matter, judges have virtually unfettered discretion to reach any conclusion they deem appropriate," the paper said. The Case Western study, as the authors acknowledge, builds on previous examinations of securities class action case law since 1996, which more or less agree that uncertainty has permitted trial judges considerable latitude in scienter rulings. Auditor cases are a special class, Messrs. Donelson and Prentice wrote, because of the "special treatment" they have traditionally enjoyed under laws that generally discourage liability against them and because of particular red flags that crop up in cases against them. The authors discount auditors' grousing that uncertainty works against them, calling the fear that auditors will be held liable in frivolous cases "overblown." But they say that both auditor defendants and securities class action lawyers suffer when uncertainty about the law prevents them from assessing the settlement value of cases. That leads to prolonged and inefficient litigation, which benefits neither side. Moreover, the third part of the paper discusses the unseen biases that judges bring to discretionary decisions. "While few question federal judges' subjective honesty, there are substantial grounds upon which to challenge their rationality and objectivity," the authors wrote. They proceed to discuss such factors as overconfidence; self-serving bias, which leads people to reach conclusions supporting their pre-existing views; and hindsight bias, which overemphasizes the ability to have predicted events. The paper presumes that most judges go into cases with a bias in favor of accountants and against class action lawyers. When that bias dovetails with their broad discretion to determine dismissal motions, the authors write, "it seems more likely that plaintiffs will be disadvantaged, but whatever the direction of bias, unfettered discretion is likely to lead to more judicial errors of judgment than would occur under a regime of clearer and more settled law." ********* 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., Washington, D.C., USA. Noemi Irene A. Adala, Joy A. Agravante, Valerie Udtuhan, Julie Anne L. Toledo, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN 1525-2272. 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