/raid1/www/Hosts/bankrupt/CAR_Public/131230.mbx
C L A S S A C T I O N R E P O R T E R
Monday, December 30, 2013, Vol. 15, No. 257
Headlines
AETNA INC: Has Preliminary Approval of $60-Mil Settlement
AIC LTD: Canada Supreme Court Turns Down Class Action Appeal
ALCON LABORATORIES: Faces "Freburger" Suit Over Large Eye Drops
AMERICAN EXPRESS: Regulators Impose Fine Over Deceptive Marketing
AMERICAN EXPRESS: To Pay $75.7MM to Settle Discontinued Card Probe
AMGEN INC: Named as Defendant in Class Suit Over Onyx Acquisition
AMGEN INC: Securities Litigation Trial Date Set for June 2015
AMERICAN EXPRESS: Seeks Dismissal or Stay of "Seldes" Action
AMERICAN EXPRESS: Moved to Dismiss Manhattan Steamboat Class Suit
BAYSTATE HEALTH: Faces Class Action Over Unpaid Wages & Overtime
BOARDWALK PIPELINE: Subsidiary Named Co-Defendant in PI Lawsuit
CANADA: Lauds Ruling in Class Action v. Canadian Wheat Board
CHICAGO, IL: Judge to Rule on Burge Torture Class Action in 2014
CIBER INC: Motion to Dismiss Securities Class Action Pending
CIRRUS LOGIC: Seeks Dismissal of Amended Securities Violation Suit
CLEARWIRE CORP: Tycko & Zavareei Discusses Settlement Ruling
CORAL GABLES: Six Patients File Suit Over Cataract Surgery
COMSCORE INC: Discovery in Privacy Class Action Continues
DAIRY FARMERS: Judge Approves Disbursement of Settlement Funds
DENTSPLY INTERNATIONAL: Awaits Decision in Cavitron(R) Suit
DENTSPLY INTERNATIONAL: Center City Periodontists Suit to Proceed
DIGNITY HEALTH: Court Refused to Dismiss "Rollins" Class Suit
DJO FINANCE: Has Adequate Insurance Coverage as of Sept. 28
DOW CHEMICAL: Appealed $1.06 Billion Judgment in Price-Fixing Suit
DR HORTON: 5th Cir. Arbitration Ruling A Victory for Employers
EL PASO PIPELINE: Court Denied Motion to Dismiss Class Action
ELECTROLUX HOME: Faces Class Action Over Defective Ice Makers
FARMERS INSURANCE: Jackson Lewis Discusses Class Action Ruling
FIFTH THIRD BANCORP: High Court to Weigh Pension Planners' Duties
FIRST MED: Faces Class Action Over WARN Act Violations
FORD MOTOR: Balks at Plaintiffs Lawyers' Consumer Advisory Bid
FRESH DEL MONTE: Unfair Competition Suit in Calif. Dismissed
HORIZON HEALTHCARE: Customers Sue Over Stolen Personal Information
HUNTSMAN CORPORATION: Settled Civil Antitrust Action in Maryland
IBM CORP: Ties to NSA's PRISM Program Hurt Sales, Class Claims
ITT EDUCATIONAL: Amended Complaint Filed in Securities Litigation
ITT EDUCATIONAL: MLAF Suit Consolidated With Securities Litigation
JUSTMUGSHOTS.COM CORP: Extorts Money From Arrestees, Suit Says
MARRIOTT RESORTS: Judge Denies Motion to Dismiss Class Action
NATIONAL COLLEGIATE: Denies Exploiting College Athletes
NEWFOUNDLAND & LABRADOR: Loses Bid to Limit Moose Suit Plaintiffs
NORTHSHORE UNIVERSITY: Antitrust Suit Obtains Class-Action Status
NOVA SCOTIA HOME: Judge Allows Abuse Class Action to Proceed
NTS REALTY: Settles Class Action Over Realty Capital Merger
OLD REPUBLIC: Judge Tosses Class Action Over Warranties
PUC SERVICES: May Face Class Action Over Brown Water Issues
THOMPSON BUILDING: Gets OSHA Citation for Asbestos Exposure
U.S. STEEL: Defends Antitrust Class Action Lawsuits in Illinois
UNITED STATES: 9th Circuit Takes New Look at DNA Collection
UNITED STATES: Labor Dept Delayed Pay Adjustments, Suit Claims
VOLVO: Seeks Permission to Appeal Class Action Ruling
YELP INC: Awaits Ninth Circuit Decision on Class Action Appeal
* Class Members Rarely Benefit From Class Actions, New Study Shows
* Makers of Tainted Dietary Supplements Have Criminal Records
*********
AETNA INC: Has Preliminary Approval of $60-Mil Settlement
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The District Court in New Jersey on August 30, 2013, preliminarily
approved a proposed $60 million agreement to settle the
consolidated class action cases under the caption In re: Aetna UCR
Litigation, MDL No. 2020, against Aetna Inc., which is scheduled
for final court approval on March 2014, according to the Company's
Form 10-Q filed on October 29, 2013, with the U.S. Securities and
Exchange Commission for the quarterly period ended September 30,
2013.
The Company states: "We are named as a defendant in several
purported class actions and individual lawsuits arising out of our
practices related to the payment of claims for services rendered
to our members by health care providers with whom we do not have a
contract ("out-of-network providers"). Among other things, these
lawsuits allege that we paid too little to our health plan members
and/or providers for these services, among other reasons, because
of our use of data provided by Ingenix, Inc., a subsidiary of one
of our competitors ("Ingenix"). Other major health insurers are
the subject of similar litigation or have settled similar
litigation.
"Various plaintiffs who are health care providers or medical
associations seek to represent nationwide classes of out-of-
network providers who provided services to our members during the
period from 2001 to the present. Various plaintiffs who are
members in our health plans seek to represent nationwide classes
of our members who received services from out-of-network providers
during the period from 2001 to the present. Taken together, these
lawsuits allege that we violated state law, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the
Racketeer Influenced and Corrupt Organizations Act and federal
antitrust laws, either acting alone or in concert with our
competitors. The purported classes seek reimbursement of all
unpaid benefits, recalculation and repayment of deductible and
coinsurance amounts, unspecified damages and treble damages,
statutory penalties, injunctive and declaratory relief, plus
interest, costs and attorneys' fees, and seek to disqualify us
from acting as a fiduciary of any benefit plan that is subject to
ERISA. Individual lawsuits that generally contain similar
allegations and seek similar relief have been brought by health
plan members and out-of-network providers.
"The first class action case was commenced on July 30, 2007. The
federal Judicial Panel on Multi-District Litigation (the "MDL
Panel") has consolidated these class action cases in the U.S.
District Court for the District of New Jersey (the "New Jersey
District Court") under the caption In re: Aetna UCR Litigation,
MDL No. 2020 ("MDL 2020"). In addition, the MDL Panel has
transferred the individual lawsuits to MDL 2020. On May 9, 2011,
the New Jersey District Court dismissed the physician plaintiffs
from MDL 2020 without prejudice. The New Jersey District Court's
action followed a ruling by the United States District Court for
the Southern District of Florida (the "Florida District Court")
that the physician plaintiffs were enjoined from participating in
MDL 2020 due to a prior settlement and release. The United States
Court of Appeals for the Eleventh Circuit has dismissed the
physician plaintiffs' appeal of the Florida District Court's
ruling.
"On December 6, 2012, we entered into an agreement to settle MDL
No. 2020. Under the terms of the proposed nationwide settlement,
we will be released from claims relating to our out-of-network
reimbursement practices from the beginning of the applicable
settlement class period through August 30, 2013. The settlement
class period for health plan members begins on March 1, 2001, and
the settlement class period for health care providers begins on
June 3, 2003. The agreement contains no admission of wrongdoing.
The medical associations are not parties to the settlement
agreement.
"Under the settlement agreement, we will pay $60 million, the
substantial majority of which will be payable upon final court
approval of the settlement, and pay up to an additional $60
million at the end of a claim submission and validation period
that commences upon final court approval of the settlement. These
payments will fund claims submitted by health plan members who are
members of the plaintiff class and health care providers who are
members of the plaintiff class. These payments also will fund the
legal fees of plaintiffs' counsel and the costs of administering
the settlement, in each case in amounts to be determined by the
New Jersey District Court.
"The New Jersey District Court preliminarily approved the
settlement on August 30, 2013. The proposed settlement remains
subject to final court approval, and a final approval hearing is
scheduled for March 2014. Final court approval of the settlement
could be delayed by appeals or other proceedings. In addition, the
Company has the right to terminate the settlement agreement if
more than certain percentages of class members, or class members
collectively holding specified dollar amounts of claims, elect to
opt-out of the settlement. In connection with the proposed
settlement, the Company recorded an after-tax charge to net income
of approximately $78 million in the fourth quarter of 2012. The
Company will pay for the settlement with available resources and
expects the settlement payments to occur over the next twelve to
twenty-four months. We intend to continue to vigorously defend
ourselves against the claims brought in these cases by non-
settling plaintiffs."
Aetna Inc. (Aetna) is a diversified healthcare benefits company.
The Company offers a range of traditional and consumer-directed
health insurance products and related services, including medical,
pharmacy, dental, behavioral health, group life and disability
plans, medical management capabilities, Medicaid healthcare
management services and health information exchange technology
services. The Company's operations are conducted in three business
segments: Health Care, Group Insurance and Large Case Pensions.
Its customers include employer groups, individuals, college
students, part-time and hourly workers, health plans, healthcare
providers, governmental units, government-sponsored plans, labor
groups and expatriates. As of December 31, 2011, the Company
served approximately 36.4 million people. In May 2013, the Company
announced it has completed its acquisition of Coventry Health Care
Inc.
AIC LTD: Canada Supreme Court Turns Down Class Action Appeal
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Jeff Gray, writing for The Globe and Mail, reports that the
Supreme Court of Canada has unanimously turned down an appeal from
a pair of mutual fund managers facing a class action from angry
investors who allege the fund managers are to blame for hundreds
of millions in losses due to a practice known as "market timing."
The key question in the case was whether a class action should be
allowed to go ahead even though the defendants had already settled
allegations with the Ontario Securities Commission and paid back
more than C$200-million. It was a case with potentially wide
ramifications in the expanding world of securities class actions
in Canada, since most are filed in the shadow of investigations by
regulators.
The mutual fund managers, AIC Ltd. and CI Mutual Funds Inc.,
argued that the class action in this case was a duplication. But
lawyers acting for investors in the funds argued that the losses
due to market timing -- a practice that allegedly allowed certain
market players to profit at the expense of everyday unitholders --
were much higher than the compensation on offer.
In its ruling on Dec. 12, the top court upheld previous decisions
by the Ontario Court of Appeal and the Ontario Divisional Court
that had reversed an original decision by Ontario Superior Court
Justice Paul Perell.
Ontario's class action legislation allows judges to deny
"certification" or the green-light needed for a class action
lawsuit to proceed to trial, if they decide that another
"preferable procedure" exists, such as a regulatory hearing or
some other process by which a company facing allegations is
prepared to offer compensation to plaintiffs. Justice Perell
ruled that the OSC settlement fit this bill.
But the appeal courts, and now the Supreme Court, have sided with
the investors, who argued not only that they were actually owed up
to $800-million in compensation, but that the OSC settlement was
drawn up behind closed doors in a process that excluded them. The
allegations in their lawsuit have not been proven. The decision
now clears the way for a possible trial.
The case dates back to a 2003 OSC probe of five large mutual fund
managers, which resulted in a series of settlements in 2004-2005
that saw $205.6-million handed to investors. But in 2009, lawyers
acting for investors launched a class action demanding more
compensation. All but two of the defendants have since settled
with the plaintiffs.
The Supreme Court's ruling on Dec. 12 lays out a series of
questions that judges should answer when determining whether a
class action should be considered a "preferable procedure,"
including considering the issue of "access to justice."
"The regulatory nature of, and the limited participation rights
for investors in the OSC proceedings, coupled with the absence of
information about how the OSC staff assessed investor compensation
support the conclusion that significant procedural access to
justice concerns remain which the proposed class action can
address," the court's decision reads.
ALCON LABORATORIES: Faces "Freburger" Suit Over Large Eye Drops
---------------------------------------------------------------
Carol Freburger, Gola Drane, Jack Liggett, Patricia Bough, Mack
Brown, Dolores Gillespie, Deborah Harrington, Robert Ingino,
Thomas Layloff, Edward Rogers, Jr., Deborah Rusignulolo, Dorothy
Stokes, Josephine Troccoli, and Hurie Whitfield, on behalf of
themselves and all others similarly situated v. Alcon
Laboratories, Inc.; Alcon Research, Ltd.; Falcon Pharmaceuticals,
Ltd.; Sandoz, Inc.; Allergan, Inc.; Allergan USA, Inc.; Allergan
Sales, LLC; Pfizer Inc.; Valeant Pharmaceuticals International,
Inc.; Bausch and Lomb Incorporated; Aton Pharma, Inc.; Merck &
Co., Inc.; Merck, Sharp & Dohme Corp.; Prasco, LLC; and Akorn,
Inc., Case No. 1:13-cv-24446-PAS (S.D. Fla., December 10, 2013) is
brought on behalf of classes of persons and entities, who or which
have paid all or part of the purchase prices of prescription eye
drops manufactured and sold by the Defendants and who or which
were compelled by the Defendants' unfair and illegal practices to
pay for much more medication than the users of those medications
needed.
The Plaintiffs allege that the Defendants have persisted in their
unfair, unethical, unconscionable, and unlawful practices of
selling prescription ophthalmic medicine in dispensers that emit
much larger eye drops. As a result, the Plaintiffs contend,
consumers use more medication than they should, run out of
medicine before they should, and have to buy additional bottles at
great expense, providing increased, but unfair, unethical and
unconscionable profits for the Defendants.
Alcon Laboratories, Inc.; Alcon Research, Ltd.; and Falcon
Pharmaceuticals, Ltd., are Delaware corporations headquartered in
Fort Worth, Texas. Sandoz, Inc., is a Delaware corporation
headquartered in East Hanover, New Jersey. Alcon Laboratories
sells, markets and distributes prescription eye drop products in
the United States. Alcon Research is responsible for Alcon's U.S.
manufacturing and research and development operations for Alcon's
prescription eye drop products. Falcon Pharmaceuticals
manufactures and, until on or about April 2011, marketed and sold
Alcon's generic ophthalmic products in the United States. Since
on or about April 2011, Sandoz Inc. has marketed and sold Alcon's
generic ophthalmic products in the United States.
Allergan, Inc. and Allergan USA, Inc., are Delaware corporations
headquartered in Irvine, California. Allergan Sales, LLC, is a
California limited liability corporation headquartered in Irvine,
California. Allergan manufactured and sold prescription eye drop
products in multi-dose containers for these conditions: Glaucoma,
Allergy, Inflammation and Infection.
Pfizer is a Delaware corporation headquartered in New York.
Pfizer's principal prescription eye drop product sold in multi-
dose containers is the glaucoma drug Xalatan. Until Xalatan lost
its exclusivity in March 2011, it was the largest selling
prescription eye drop in the United States and is still widely
sold.
Valeant is a Canadian corporation headquartered in Montreal,
Quebec, Canada. Valeant's U.S. Headquarters are in Bridgewater,
New Jersey. Bausch and Lomb is a New York corporation
headquartered in Rochester, New York. On August 5, 2013, Valeant
completed its acquisition of B+L. According to information on
Valeant's web site, "Valeant's existing ophthalmology businesses
have been integrated into the Bausch + Lomb division to create a
global eye health platform." Aton Pharma, Inc., is a Delaware
corporation headquartered in Lawrenceville, New Jersey. Valeant
completed its acquisition of Aton on May 27, 2010.
The Merck Defendants are New Jersey corporations headquartered in
Whitehouse Station, New Jersey. One of the Merck Defendants,
Merck, Sharpe & Dohme Corp., is a wholly-owned subsidiary of the
other, Merck & Co, Inc. Merck, Sharpe & Dohme, Inc. was formerly
known as Merck & Co., Inc. On November 4, 2009, Merck & Co., Inc.
merged with Schering-Plough Corporation. As a result of the
merger, Schering-Plough Corporation acquired all of the shares of
Merck & Co., Inc., and renamed itself Merck & Co., Inc.
Prasco, LLC, is an Ohio limited liability company headquartered in
Mason, Ohio. Prasco distributes "Authorized Generic"
pharmaceutical products that are 100% identical to their brand-
name equivalents because they are manufactured by the brand-name
company and simply made available as a generic under private
label.
Akorn is a Louisiana corporation headquartered in Lake Forest,
Illinois. Akorn manufactures a full line of therapeutic
ophthalmic pharmaceuticals, along with other pharmaceuticals.
The Plaintiffs are represented by:
Douglass Alan Kreis, Esq.
E. Samuel Geisler, Esq.
AYLSTOCK, WITKIN, KREIS & OVERHOLTZ, PLLC
17 East Main Street, Suite 200
Pensacola, FL 32502-5996
Telephone: (850) 202-1010
E-mail: dkreis@awkolaw.com
SGeisler@awkolaw.com
- and -
Richard S. Cornfeld, Esq.
LAW OFFICE OF RICHARD S. CORNFELD
1010 Market Street, Suite 1605
St. Louis, MO 63101
Telephone: (314) 241-5799
Facsimile: (314) 241-5788
E-mail: rcornfeld@cornfeldlegal.com
- and -
John G. Simon, Esq.
Stephanie H. To, Esq.
THE SIMON LAW FIRM, P.C.
800 Market Street, Suite 1700
St. Louis, MO 63101
Telephone: (314) 241-2929
Facsimile: (314) 241-2029
E-mail: jsimon@simonlawpc.com
sto@simonlawpc.com
AMERICAN EXPRESS: Regulators Impose Fine Over Deceptive Marketing
-----------------------------------------------------------------
Douwe Miedema, writing for Reuters, reports that U.S. regulators
fined American Express on Dec. 24 over deceptive and misleading
practices in selling credit card add-on products, and forced it to
repay a total of $59.5 million to duped customers.
The U.S. Consumer Financial Protection Bureau said the company and
two subsidiaries had engaged in unfair billing tactics and
deceptive marketing, affecting more than 335,000 customers from
2000 to 2012.
Telemarketers led clients to believe the add-on products came with
more favorable conditions than they really did, and charged too
much for the services.
"We first warned companies last year about using deceptive
marketing to sell credit card add-on products, and everyone should
be on notice of this issue," CFPB Director Richard Cordray said in
a statement.
The agency, which was set up after the 2007-09 crisis as part of a
reform of the financial industry, also fined American Express $9.6
million.
Two other regulators also imposed financial sanctions. The
Federal Deposit Insurance Corporation (FDIC) fined American
Express Centurion Bank $3.6 million, while the Office of the
Comptroller of the Currency imposed a $3 million fine on American
Express Bank.
The add-on products included payment protection, with one enabling
customers to cancel part of their outstanding balance, and another
being designed to help customers in Puerto Rico to recover lost or
stolen cards.
In one example, American Express would tell customers they would
not be charged a fee if the account balance was paid every month,
but didn't clearly say by when the payment needed to be made. As
a result, some customers exceeded their credit card limits and
incurred additional fees.
American Express and its subsidiaries agreed to stop the deceptive
marketing and unfair billing practices, the CFPB said. It also
agreed to a review by an independent third party, and to review
other products.
AMERICAN EXPRESS: To Pay $75.7MM to Settle Discontinued Card Probe
------------------------------------------------------------------
The Associated Press reports that American Express has agreed to
pay at least $75.7 million to end an investigation into what
regulators said was misleading marketing of some discontinued card
products.
The Federal Deposit Insurance Corp. said on Dec. 24 that American
Express led consumers to believe that an account protection
product would work for up to two years when the benefits usually
lasted no more than three months, and it didn't properly explain
the enrollment process for a product intended to protect against
identity theft. It said 85 percent of consumers who signed up
didn't complete the enrollment process, but they were billed
anyway.
The agency also said that the company misrepresented the terms of
a "lost wallet" product that was offered to Spanish-speaking
customers in Puerto Rico, and it did not provide written materials
in Spanish.
The FDIC says the programs were marketed to customers between 2004
and 2012. It said American Express will pay restitution to
335,000 customers.
The New York-based company said it agreed to pay $16.2 million in
fines and repay at least $59.5 million to customers.
American Express Co. said it has set aside enough to cover most of
the costs of the settlement with the FDIC, the Consumer Financial
Protection Bureau, and the Office of Comptroller of the Currency.
It has already made most of the payments to customers.
AMGEN INC: Named as Defendant in Class Suit Over Onyx Acquisition
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Amgen Inc., is a defendant in nine purported class action lawsuits
in connection with Amgen's acquisition of Onyx, according to the
Company's Form 10-Q filed on October 29, 2013, with the U.S.
Securities and Exchange Commission for the quarterly period ended
September 30, 2013.
Between August 28, 2013 and September 16, 2013, nine plaintiffs
filed purported class action lawsuits against Onyx, its directors,
Amgen and Arena Acquisition Company, and unnamed "John Doe"
defendants in connection with Amgen's acquisition of Onyx. Seven
of those purported class actions were brought in the Superior
Court of the State of California for the County of San Mateo,
captioned Lawrence I. Silverstein and Phil Rosen v. Onyx
Pharmaceuticals, Inc., et al. (August 28, 2013) ("Silverstein"),
Laura Robinson v. Onyx Pharmaceuticals, Inc., et al. (originally
filed in the Superior Court for the County of San Francisco on
August 28, 2013, and re-filed in the Superior Court for the County
of San Mateo on August 29, 2013) ("Robinson"), John Solak v. Onyx
Pharmaceuticals, Inc., et al. (August 30, 2013), Louisiana
Municipal Police Employees' Retirement System and Hubert Chow v.
Onyx Pharmaceuticals, Inc., et al. (September 3, 2013) ("Louisiana
Municipal"), Laurine Jonopulos v. Onyx Pharmaceuticals, Inc., et
al. (September 4, 2013) ("Jonopulos"), Clifford G. Martin v. Onyx
Pharmaceuticals, Inc., et al. (September 9, 2013) ("Martin") and
Merrill L. Magowan v. Onyx Pharmaceuticals, Inc. et al. (September
9, 2013) ("Magowan"). The eighth and ninth purported class actions
were brought in the Court of Chancery of the State of Delaware,
captioned Mark D. Smilow, IRA v. Onyx Pharmaceuticals Inc., et al.
(August 29, 2013) and William L. Fitzpatric v. Onyx
Pharmaceuticals, Inc., et al. (September 16, 2013) ("Fitzpatric").
On September 5, 2013, the plaintiff in the John Solak case filed a
request for dismissal of the case without prejudice. On September
10, 2013, the plaintiff in the Mark D. Smilow, IRA case filed a
notice and proposed order of voluntary dismissal of the case
without prejudice. On September 10, 2013, plaintiffs in the
Silverstein and Louisiana Municipal cases filed an amended
complaint alleging substantially the same claims and seeking
substantially the same relief as in their individual purported
class action lawsuits. Each of the lawsuits alleges that the Onyx
director defendants breached their fiduciary duties to Onyx
shareholders, and that the other defendants aided and abetted such
breaches, by seeking to sell Onyx through an allegedly unfair
process and for an unfair price and on unfair terms. The Magowan
and Fitzpatric complaints and the amended complaint filed in the
Silverstein and Louisiana Municipal cases also allege that the
individual defendants breached their fiduciary duties with respect
to the contents of the tender offer solicitation material. Each of
the lawsuits seeks, among other things, equitable relief that
would enjoin the consummation of the proposed merger, rescission
of the merger agreement (to the extent it has already been
implemented), and attorneys' fees and costs, and certain of the
lawsuits seek other relief. The Silverstein, Robinson, Louisiana
Municipal and Jonopulos cases were designated as "complex" and
assigned to the Honorable Marie S. Weiner, who subsequently
entered an order consolidating the Silverstein, Robinson,
Louisiana Municipal, Jonopulos, Martin and Magowan cases.
Amgen Inc. is a global biotechnology pioneer that discovers,
develops, manufactures and delivers human therapeutics. Its
medicines help millions of patients in the fight against cancer,
kidney disease, rheumatoid arthritis (RA), bone disease, and other
serious illnesses. On December 10, 2012, the Company acquired all
of the outstanding stock of deCODE Genetics (deCODE). In July 5,
2012, the Company acquired KAI Pharmaceuticals, a privately held
company based in South San Francisco. In September 2013, Swedish
Orphan Biovitrum AB (publ) (Sobi) announced that they have
acquired the full rights to develop and commercialize Kineret
(anakinra) from Amgen Inc for all therapeutic indications.
AMGEN INC: Securities Litigation Trial Date Set for June 2015
-------------------------------------------------------------
In its Form 10-Q filed on October 29, 2013, with the U.S.
Securities and Exchange Commission for the quarterly period ended
September 30, 2013, Amgen Inc., disclosed that the trial date of
the pending securities class action lawsuit against the Company
has been set by the U.S. District Court for the Central District
of California for June 1, 2015.
Amgen Inc. is a global biotechnology pioneer that discovers,
develops, manufactures and delivers human therapeutics. Its
medicines help millions of patients in the fight against cancer,
kidney disease, rheumatoid arthritis (RA), bone disease, and other
serious illnesses. On December 10, 2012, the Company acquired all
of the outstanding stock of deCODE Genetics (deCODE). In July 5,
2012, the Company acquired KAI Pharmaceuticals, a privately held
company based in South San Francisco. In September 2013, Swedish
Orphan Biovitrum AB (publ) (Sobi) announced that they have
acquired the full rights to develop and commercialize Kineret
(anakinra) from Amgen Inc for all therapeutic indications.
AMERICAN EXPRESS: Seeks Dismissal or Stay of "Seldes" Action
------------------------------------------------------------
American Express Company has moved to dismiss or stay a putative
class action alleging that plaintiff received unilateral interest
rate increases despite alleged promises that the rate would remain
fixed, according to the Company's Form 10-Q filed on October 29,
2013, with the U.S. Securities and Exchange Commission for the
quarterly period ended September 30, 2013.
In June 2013, a putative class action, captioned Seldes v.
American Express Centurion Bank, was filed in the United States
District Court, Southern District of Florida alleging that
plaintiff received unilateral interest rate increases despite
alleged promises that the rate would remain fixed. Plaintiff seeks
to certify a nationwide class. On July 26, 2013, the Company moved
to dismiss or, in the alternative, to stay this action.
American Express Company (American Express) is a global service
company. Its principal products and services are charge and credit
payment card products and travel-related services offered to
consumers and businesses worldwide. The Company operates in four
segments: U.S. Card Services, International Card Services, Global
Commercial Services (GCS) and Global Network & Merchant Services
(GNMS). Corporate functions and auxiliary businesses, including
the Company's Enterprise Growth Group, publishing business and
other company operations, are included in Corporate & Other.
American Express and its principal operating subsidiary, American
Express Travel Related Services Company, Inc. (TRS), are bank
holding companies. During 2011, American Express completed the
integration of Accertify Inc. During 2011, it acquired a
controlling interest in Loyalty Partner, which is a marketing
services company operating in Germany, Poland and India.
AMERICAN EXPRESS: Moved to Dismiss Manhattan Steamboat Class Suit
-----------------------------------------------------------------
American Express Company has moved to dismiss or stay a putative
class action alleging that plaintiff received unilateral interest
rate increases despite alleged promises that the rate would remain
fixed, according to the Company's Form 10-Q filed on October 29,
2013, with the U.S. Securities and Exchange Commission for the
quarterly period ended September 30, 2013.
In August 2013, a putative class action, captioned Manhattan
Steamboat LLC v, American Express Bank, FSB, was filed in the
United States District Court, Southern District of New York.
Plaintiff makes allegations similar to those in Seldes on behalf
of business owners and also seeks to certify a nationwide class.
On October 4, 2013, the Company moved to dismiss or, in the
alternative, to stay this action.
American Express Company (American Express) is a global service
company. Its principal products and services are charge and credit
payment card products and travel-related services offered to
consumers and businesses worldwide. The Company operates in four
segments: U.S. Card Services, International Card Services, Global
Commercial Services (GCS) and Global Network & Merchant Services
(GNMS). Corporate functions and auxiliary businesses, including
the Company's Enterprise Growth Group, publishing business and
other company operations, are included in Corporate & Other.
American Express and its principal operating subsidiary, American
Express Travel Related Services Company, Inc. (TRS), are bank
holding companies. During 2011, American Express completed the
integration of Accertify Inc. During 2011, it acquired a
controlling interest in Loyalty Partner, which is a marketing
services company operating in Germany, Poland and India.
BAYSTATE HEALTH: Faces Class Action Over Unpaid Wages & Overtime
----------------------------------------------------------------
Nurses at Baystate Visiting Nurse Association and Hospice filed a
class action suit against Baystate Health on Dec. 11 in Hampden
Superior Court seeking to recover unpaid wages and overtime that
have allegedly been withheld illegally by the employer for several
years. To obtain a copy of the lawsuit, contact David Schildmeier
at 781-249-0430 or dschildmeier@mnarn.org
The VNA nurses are routinely required to make preparations before
their first home care visits for the day and subsequently to
complete lengthy documentation of their visits, but are frequently
not paid for that work which can sometimes take several hours per
day. Computerized documentation has become more lengthy and
cumbersome in recent years, but no accommodation has been made to
allow nurses time to complete the required documentation during
the normal course of the workday. As a result nurses have been
forced to work many hours of unpaid time each week.
Attorney Shannon Liss-Riordan, who is representing the nurses,
said, "It is a basic principle that employers must pay employees
for all the hours they have worked. These nurses work long hours
caring for their patients, and then after hours they must complete
lengthy paperwork. It is appalling that Baystate would think it
can get away without paying them for this time."
Baystate has been locked in a two-year dispute with its nurses at
Baystate Franklin Medical Center regarding its demand to limit
those nurses the right to overtime pay, while at the same time the
organization has been failing to pay its BVNA&H nurses for their
hours of work. Baystate Visiting Nurse Association & Hospice is a
wholly owned subsidiary of Baystate Health. While allegedly
withholding wages illegally from the nurses, Baystate Health is
one of the most profitable health care conglomerates in the state,
and its. CEO, Mark Tolosky, is one of the highest paid hospital
CEOs in New England with a salary and benefits package of nearly
$2 million annually.
Founded in 1903, the Massachusetts Nurses Association is the
largest professional health care organization and the largest
union of registered nurses in the Commonwealth of Massachusetts.
Its 23,000 members advance the nursing profession by fostering
high standards of nursing practice, promoting the economic and
general welfare of nurses in the workplace, projecting a positive
and realistic view of nursing, and by lobbying the Legislature and
regulatory agencies on health care issues affecting nurses and the
public. The MNA is also a founding member of National Nurses
United, the largest national nurses union in the United States
with more than 170,000 members from coast to coast.
BOARDWALK PIPELINE: Subsidiary Named Co-Defendant in PI Lawsuit
---------------------------------------------------------------
A subsidiary of Boardwalk Pipeline Partners LP is a co-defendant
in a purported class action suit alleging personal injury and
property damage related to an alleged release of mercaptan at the
Whistler Junction facilities in Eight Mile, Alabama, according to
the Company's Form 10-Q filed on October 29, 2013, with the U.S.
Securities and Exchange Commission for the quarterly period ended
September 30, 2013.
The Partnership's Gulf South subsidiary and several other
defendants, including Mobile Gas Service Corporation (MGSC), have
been named as defendants in nine lawsuits, including one purported
class action suit, commenced by multiple plaintiffs in the Circuit
Court of Mobile County, Alabama. The plaintiffs seek unspecified
damages for personal injury and property damage related to an
alleged release of mercaptan at the Whistler Junction facilities
in Eight Mile, Alabama. Gulf South delivers natural gas to MGSC,
the local distribution company for that region, at Whistler
Junction where MGSC odorizes the gas prior to delivery to end user
customers by injecting mercaptan into the gas stream, as required
by law. The cases are: Parker, et al. v. Mobile Gas Service Corp,
et al. (Case No. CV-12-900711), Crum, et al. v. Mobile Gas Service
Corp, et al. (Case No. CV-12-901057), Austin, et al. v. Mobile Gas
Service Corp, et al. (Case No. CV-12-901133), Moore, et al. v.
Mobile Gas Service Corp, et al. (Case No. CV-12-901471), Davis, et
al. v. Mobile Gas Service Corp, et al. (Case No. CV-12-901490),
Joel G. Reed, et al. v. Mobile Gas Service Corp, et al. (Case No.
CV-2013-922265), The Housing Authority of the City of Prichard,
Alabama v. Mobile Gas Service Corp., et al. (Case No. CV-2013-
901002), Robert Evans, et al. v. MGSC, et al. (Case No. CV-2013-
902627), and Devin Nobles, et al. v. MGSC, et al. (Case No. CV-
2013-902786). Gulf South has denied liability. Gulf South has
demanded that MGSC indemnify Gulf South against all liability
related to these matters pursuant to a right-of-way agreement
between Gulf South and MGSC, and has filed cross-claims against
MGSC for any such liability. MGSC has also filed cross-claims
against Gulf South seeking indemnity and other relief from Gulf
South.
Boardwalk Pipeline Partners, LP is a limited partnership company.
The Company owns and operates three interstate natural gas
pipeline systems including integrated storage facilities. Its
business is conducted by its primary subsidiary, Boardwalk
Pipelines, LP (Boardwalk Pipelines) and its subsidiaries, Gulf
Crossing Pipeline Company LLC (Gulf Crossing), Gulf South Pipeline
Company, LP (Gulf South) and Texas Gas Transmission, LLC (Texas
Gas) (together, the operating subsidiaries), which consist of
integrated natural gas pipeline and storage systems. During the
year ended December 31, 2011, it formed Boardwalk Midstream, LP
(Midstream), and its operating subsidiary, Boardwalk Field
Services, LLC (Field Services), which is engaged in the natural
gas gathering and processing business. In December 2011, it
acquired a 20% interest in HP Storage.
CANADA: Lauds Ruling in Class Action v. Canadian Wheat Board
------------------------------------------------------------
The Government of Canada on December 12, 2013, responded
positively to the Federal Court's November 29th ruling which
struck down nearly all of the claims made by four prairie grain
farmers and awarded court costs to the Crown and the Canadian
Wheat Board (CWB).
"Our Government is pleased with this decision that underscored the
right of Western Canadian wheat and barley farmers to market their
own grain," said Agriculture Minister Gerry Ritz. "While courts
continue to strike down these frivolous lawsuits, the fact remains
that the overwhelming majority of Western grain farmers have
embraced marketing freedom and are capitalizing on new economic
opportunities that were impossible under the old single-desk."
The case was launched in February 2012 and sought approximately
$17 billion for damages that were allegedly caused by the
elimination of the CWB's single desk and the alleged loss of
farmer equity in the CWB's assets.
Last August, the Government and the CWB filed a motion requesting
the claim be struck and the class action dismissed. In its ruling
on this case, the court struck down six of the plaintiffs' seven
claims, directing the plaintiffs to serve and file a revised
statement of claim related to producer payments for the 2011-12
pool period only.
Marketing freedom came into force on August 1, 2012 as a result of
the Marketing Freedom for Grain Farmers Act, which gives Western
Canadian grain producers the freedom to market their wheat and
barley to the buyer of their choice. The government's top
priority remains the economy, and Canada's agriculture industry
plays an important role in creating jobs and keeping our economy
strong.
CHICAGO, IL: Judge to Rule on Burge Torture Class Action in 2014
----------------------------------------------------------------
Steve Schmadeke, writing for Chicago Tribune, reports that a Cook
County judge will rule in 2014 on a novel class-action petition
filed by attorneys seeking immediate evidentiary hearings for more
than a dozen men still imprisoned despite their allegedly credible
claims that they were tortured into confessing by disgraced former
Chicago police Cmdr. Jon Burge or detectives under him.
Attorneys argued for more than two hours on Dec. 16 over the
first-of-its-kind petition at a hearing before presiding Criminal
Court Judge Paul Biebel. The hearing came just days after Stanley
Wrice, who a judge found had been tortured by Burge detectives,
was released from prison after spending 31 years behind bars.
"It's time to bring closure to this long-running scandal,"
Locke Bowman, director of Northwestern University's MacArthur
Justice Center, told Judge Biebel.
There are 15 men named in the filing, but Mr. Bowman told the
judge they suspect as many as about 40 inmates would become part
of the class action and receive expedited hearings. If
Judge Biebel certifies the class, the first order of business
would be for authorities to do an accounting of tainted Burge
cases, attorneys said.
"To this date, we do not know every single person who was tortured
because there's never been a full investigation," said Joey Mogul,
an attorney on the petition.
Special prosecutor Andrew Levin, echoing Judge Biebel's own
comments, said there is no debate that Burge victims deserve their
day in court. But he said the kind of remedy being sought has no
legal precedent and would be inefficient and duplicative.
He said the men can petition to have their cases heard under the
state's post-conviction act or can turn to the Illinois Torture
Inquiry and Relief Commission, established by the state
legislature to investigate Burge torture cases.
Mogul argued that the commission is deeply flawed, working slowly
with limited funding and likely to go out of existence next year
before completing its caseload. She also contended that the post-
conviction proceedings are too slow for those with credible
torture claims.
"I don't think people should have to wait five, 10, 15 years," she
said.
"There is absolutely a moral imperative for the courts to step in
and take action with respect to these cases," Mogul, with the
People's Law Office, said later outside the courtroom.
The potential class would include those convicted based in part on
a confession obtained by Burge or his detectives and who had made
an allegation of torture that had been rejected at their original
trial.
Lawyers with the Illinois attorney general's office told
Judge Biebel they believed an "extraordinary" remedy such as a
class-action petition could be ordered only by the Illinois
Supreme Court.
Judge Biebel said he will issue his written ruling in March.
CIBER INC: Motion to Dismiss Securities Class Action Pending
------------------------------------------------------------
CIBER, Inc.'s motion to dismiss a putative securities class action
lawsuit is currently pending, according to the Company's Form 10-Q
filed on October 29, 2013, with the U.S. Securities and Exchange
Commission for the quarterly period ended September 30, 2013.
On October 28, 2011, a putative securities class action lawsuit,
Weston v. Ciber, Inc. et al., was filed in the United States
District Court for the District of Colorado against Ciber, its
current Chief Executive Officer David C. Peterschmidt, former
Executive Vice President and Chief Financial Officer ("CFO")
Claude J. Pumilia, and former CFO Peter H. Cheesbrough (the "Class
Action"). The Class Action purports to have been filed on behalf
of all holders of Ciber common stock between December 15, 2010,
and August 3, 2011, by alleged stockholder and plaintiff, Burt
Weston. The Class Action generally alleges that defendants Ciber,
Mr. Peterschmidt, Mr. Pumilia and Mr. Cheesbrough violated Section
10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and
Rule 10b-5 thereunder. Specifically, the complaint alleges that
the defendants disseminated or approved alleged false statements
concerning the Company's outlook and forecast for fiscal year 2011
in: (1) the Company's 8-K filed with the SEC and press conference
held with investors on December 15, 2010; (2) the Company's press
release and earnings conference call on February 22, 2011; (3) the
Company's 10-K for fiscal year 2010 filed with the SEC on February
25, 2011; and (4) the Company's press release, earnings conference
call, and Form 10-Q for first quarter 2011 filed with the SEC on
May 3, 2011. The complaint also generally alleges that the
defendants violated Section 20(a) of the Exchange Act.
Specifically, the complaint alleges that the defendants acted as
controlling persons of Ciber within the meaning of Section 20(a)
of the Exchange Act by reason of their positions with the Company.
The Class Action seeks, among other things: (1) an order from the
Court declaring the complaint to be a proper class action pursuant
to Rule 23 of the Federal Rules of Civil Procedure and certifying
plaintiff as a representative of the purported class; (2) awarding
plaintiff and the members of the class damages, including
interest; (3) awarding plaintiff reasonable costs and attorneys'
fees; and (4) awarding such other relief as the Court may deem
just and proper. The Court appointed Mr. Weston and City of
Roseville Employees' Retirement System as lead plaintiffs and the
law firms of Robbins, Geller Rudman & Dowd LLP and Robbins Umeda
LLP as lead plaintiffs' counsel on January 31, 2012. Lead
plaintiffs filed an amended complaint in early April 2012. The
defendants have filed a motion to dismiss, which is currently
pending. The Company believes that the Class Action is without
merit and intends to defend against it vigorously. The Company is
unable to predict the outcome of this litigation.
CIBER, Inc. (CIBER) is a provider of information technology (IT),
business consulting and outsourcing services. The Company is
engaged in solving complex IT and business issues across
industries, such as energy and utilities, telecommunications,
retail, healthcare, financial services, entertainment and
manufacturing. The Company operates in three segments:
International, North America and IT Outsourcing. Its offerings are
focused around a set of core competencies which include
Application Development and Management (ADM), Enterprise Resource
Planning (ERP), Customer Relationship Management, Business
Intelligence and Data Warehousing, Managed Services, Testing and
Quality Assurance, Mobility Services and Digital Marketing. On
March 9, 2012, the Company sold its Federal division to CRGT, Inc.
CIRRUS LOGIC: Seeks Dismissal of Amended Securities Violation Suit
------------------------------------------------------------------
Cirrus Logic, Inc., has filed a motion to dismiss an amended
complaint alleging violations to the federal securities laws, for
failure to state a claim, according to the Company's Form 10-Q
filed on October 29, 2013, with the U.S. Securities and Exchange
Commission for the quarterly period ended September 28, 2013.
Cirrus Logic disclosed: "On February 4, 2013, a purported
shareholder filed a class action complaint in the U.S. District
Court, Southern District of New York against the Company and two
of the Company's executives (the "Securities Case"). Koplyay v.
Cirrus Logic, Inc., et al Civil Action No. 13-CV-0790. The
complaint alleges that the defendants violated the federal
securities laws by making materially false and misleading
statements regarding our business results between July 31, 2012,
and October 31, 2012, and seeks unspecified damages along with
plaintiff's costs and expenses, including attorneys' fees. A
second complaint was filed on April 13, 2013, by a different
purported shareholder, in the same Court, setting forth
substantially the same allegations. On April 19, 2013, the Court
appointed the plaintiff and counsel in the first class action
complaint as the lead plaintiff and lead counsel. The lead
plaintiff filed an amended complaint on May 1, 2013, including
substantially the same allegations as the original complaint. On
May 24, 2013, the Company filed a motion to dismiss the amended
complaint for failure to state a claim. The parties completed the
briefing on that motion on June 16, 2013."
Cirrus Logic, Inc. (Cirrus Logic) develops analog and mixed-signal
integrated circuits (IC) for a broad range of consumer and
industrial markets. Building on its diverse analog mixed-signal
patent portfolio, Cirrus Logic delivers optimized products for
consumer and professional audio, automotive entertainment, and
targeted industrial applications, including energy control, energy
measurement, light emitting diode (LED) lighting and energy
exploration. The Company serves customers in the United States,
Europe and Asia, including the People's Republic of China, Hong
Kong, South Korea, Japan, Singapore, Taiwan and the United
Kingdom. In October 2013, the Company acquired Acoustic
Technologies, Inc.
CLEARWIRE CORP: Tycko & Zavareei Discusses Settlement Ruling
------------------------------------------------------------
Anna C. Haac, Esq., at Tycko & Zavareei LLP reports that the broad
right of any class action objector to appeal a district court's
final judgment approving a settlement has given rise to what are
referred to as professional objectors -- attorneys who file
specious objections for the sole purpose of using appellate delay
to hold a class action settlement hostage in order to extort self-
interested payments. Unlike legitimate objectors, who help police
the class action settlement process, professional objectors engage
in what courts and commentators have characterized as "objector
blackmail." One tool that can be used against such serial
objectors on appeal is the motion for summary affirmance, which
asks the appellate court to affirm the final approval of the
settlement quickly, without the delay that normally accompanies
full appellate briefing and argument.
Proceedings following a recent settlement of three class actions
against Clearwire, which was approved by the United States
District Court for the Western District of Washington, demonstrate
the effectiveness of the summary affirmance procedure. The
Clearwire settlement resolved three cases filed as class actions
alleging that Clearwire had misrepresented the speed of its
Internet service and/or wrongfully charged early termination fees
("ETFs"). In the face of steep legal hurdles that could have
precluded any recovery whatsoever and after months of arm's-length
negotiations under the supervision of an experienced mediator,
class counsel negotiated a settlement providing significant
monetary relief and important non-monetary prospective relief in
the form of enhanced disclosures about Clearwire's network
management policies and required changes to Clearwire's ETF
practices.
Out of approximately 2.7 million class members, only eight filed
objections. One of those objections was filed by an attorney
named Christopher Bandas on behalf of two class members, Gordon B.
Morgan and Jeremy De La Garza. The "form" nature of their
objections -- which appeared to be a cut-and-paste from previous
court filings -- strongly suggested that Mr. Bandas and his
clients were merely engaged in a wrongful attempt to leverage
delay into unwarranted paydays. Recognizing that class counsel
had "demonstrated legitimate concerns regarding whether the
objections made by Morgan and De La Garza were serious and whether
their attorney is a so-called 'professional objector,'" the
district court granted class counsel's request to depose Morgan
and De La Garza prior to considering their objections. See
Dennings v. Clearwire Corp., 928 F. Supp. 2d 1270, 1271 (W.D.
Wash. 2013). After considering those depositions, the district
court concluded that "Mr. Morgan had no personal objection to the
settlement, neither [Morgan nor De La Garza] had read the
settlement agreement or their own objections to it, and both have
worked with the same attorney on other class action cases." Id.
at 1271.
This was hardly the first time that attorney Bandas had filed
questionable objections to a class settlement. As one court
explained, "Bandas routinely represents objectors purporting to
challenge class action settlements, and does not do so to
effectuate changes to settlements, but does so for his own
personal financial gain; he has been excoriated by Courts for this
conduct. In re Cathode Ray Tube (CRT) Antitrust Litig., 281
F.R.D. 531, 533(N.D. Cal. 2012). In the Clearwire litigation,
however, class counsel was able to promptly address the objections
filed by Mr. Bandas by (1) obtaining summary affirmance from the
Ninth Circuit without the delay and expense of full appellate
briefing and (2) securing an order requiring Bandas to file an
appeal bond, which he repeatedly ignored, ultimately leading the
district court to impose sanctions barring Mr. Bandas from
practicing in the U.S. District Court for the Western District of
Washington. Class counsel's dealings with Mr. Bandas in the
Clearwire case should prove instructive for other attorneys
unwilling to make extortionist payments to these judicial system
pariahs.
Following the depositions of the two Bandas clients, the district
court granted final approval of the Clearwire settlement,
concluding that it was fair, reasonable, and adequate, and
overruling all objections. Once the claims filing period closed,
the district court also granted class counsel's motion for
attorneys' fees and expenses. See Dennings v. Clearwire Corp.,
No. C10-1859JLR, 2013 WL 1858797 (W.D. Wash. May 3, 2013).
Mr. Bandas, on behalf of his objectors, promptly appealed both
orders. Because the settlement would not become effective until
appellate review had concluded -- meaning that during the pendency
of any appeals, none of the more than 80,000 class members who
filed claims would receive any relief -- the very threat of an
appeal, regardless of its merits, placed Mr. Bandas and his
clients in a powerful position to demand a "nuisance payment."
Class counsel thus aggressively moved forward on two separate
fronts.
First, rather than engaging in costly and time-consuming appellate
briefing, class counsel moved the Ninth Circuit for summary
affirmance of the district court's orders. Ninth Circuit Rule 3-
6allows an appeal to be summarily disposed of "any time prior to
the completion of briefing" when "it is manifest that the
questions on which the decision in the appeal depends are so
insubstantial as not to justify further proceedings. . . ."
Citing to the objectors' deposition testimony, Class counsel
argued that summary affirmance was not only warranted by operation
of law, but necessary to prevent Bandas and his clients from being
in a position to hold up the settlement or extort unearned money.
The Ninth Circuit agreed, granting summary affirmance on the
ground that "the questions raised in this appeal are so
insubstantial as not to require further argument." Dennings v.
Clearwire Corp., No. 13-35038 (9th Cir. Apr. 22, 2013).
In the meantime, class counsel moved the district court for an
appeal bond under Rule 7 of the Federal Rules of Appellate
Procedure, which was also granted. Mr. Bandas, however, ignored
this order, failing to post an appeal bond even after petitioning
for a rehearing of the Ninth Circuit's first summary affirmance
order of the settlement. Class counsel thus moved to hold the
objectors in contempt, at which point Mr. Bandas voluntarily
dismissed his first appeal only to file a second notice of appeal
hours later, this time of the district court's fee order. In
addition to seeking summary affirmance of this order, class
counsel again moved for an appeal bond for this second appeal,
which the district court granted with a warning that if the
objectors did not post this bond or withdraw their appeal, they
would be subject to sanctions. See Dennings v. Clearwire Corp.,
No. C10-1859JLR, 2013 WL 3870801, *1 (W.D. Wash. July 26, 2013).
Mr. Bandas nevertheless continued to ignore the appeal bond order,
instead filing "emergency" motions to stay with the district court
and the Ninth Circuit. The district court thus sua sponte ordered
the objectors' attorneys "to appear in court and show cause why
they should not be sanctioned" for failing to post the appeal
bond. Although Mr. Bandas posted the bond a few days later, the
district court proceeded with the hearing, providing notice to
Mr. Bandas and his clients that they stood "accused of bad faith
conduct, not merely unreasonable conduct." Dennings v. Clearwire
Corp., No. C10-1859JLR, 2013 WL 3892818, *1 (W.D. Wash. July 30,
2013). At the hearing, the district court admonished Bandas for
"game playing." Finding clear and convincing evidence that Bandas
had disobeyed the bond order, the district court then took the
extraordinary step of barring Mr. Bandas from practicing in the
Western District of Washington as sanctions for what the court
described as "vexatious" and "deplorable" conduct. Thereafter,
the Ninth Circuit again granted summary affirmance of the district
court's fee order, finally and fully resolving the case. Dennings
v. Clearwire Corp., No. 13-35491 (9th Cir. Sept. 9, 2013).
In a matter of months, class counsel was thus able to effectively
dispose of the objections raised by Mr. Bandas and his clients
without expending significant resources or incurring substantial
delay. Perhaps most importantly, class counsel's dealings should
serve as deterrence against future professional objectors given
the Ninth Circuit precedent created for obtaining summary
affirmance of a class action settlement and fee order, as well as
the case law developed at the district court level supporting the
ordering of appeal bonds and sanctions against serial objectors.
CORAL GABLES: Six Patients File Suit Over Cataract Surgery
----------------------------------------------------------
Diana Gonzalez, writing for NBC 6 South Florida, reports that
cataract surgery is one of the most common procedures performed
and is reputed to be among the safest. But six patients who had
routine cataract surgery in South Florida say it cost them all or
some of their sight.
Zoraida Oquendo spends most of her time at home now taking care of
her grandchildren. She had to stop driving and struggles with
simple tasks after something went wrong with a routine procedure
-- outpatient cataract surgery.
"When I get home I got a lot of pain, like you take a needle and
push in," Ms. Oquendo said.
Coral Gables Surgery Center is where Ms. Oquendo went to have her
left cataract removed by Dr. Jonathan Leon-Rosen. Instead of
improving her vision she lost it.
"She was seeing before the operation so it's just now that she
can't see, it's ridiculous. You know, it's heartbreaking," said
her son, Jeff Oquendo.
Zoraida Oquendo is one of six plaintiffs in a lawsuit filed
against Coral Gables Surgery Center and Dr. Leon-Rosen, alleging
the patients suffered an eye injury, vision loss and a syndrome
known as TASS, which causes swelling of the cornea.
This allegedly happened after the plaintiffs had cataract surgery
with Dr. Leon-Rosen at the Coral Gables Surgery Center on
different days in September.
"It's bothersome that it happened on repeated episodes, repeated
days, and that it wasn't caught the first time, so that other
patients had to undergo the same tragedy," said Ms. Oquendo's
attorney, Gary Friedman.
Ms. Oquendo said the doctor did offer an explanation.
"The last time I went to see him he said the medicine is no good,"
she said.
Ms. Oquendo added that she was told, "Something's wrong with the
medicine -- the medicine they put in the eyes."
Ms. Oquendo and another patient's surgical reports state that "a
mixture of non-preserved antibiotic and steroid solution was
irrigated into . . . the eye," but the reports do not mention any
problems with that medication.
NBC 6 tried to reach Coral Gables Surgery Center administrator
James Seymour, but he would only comment through an email
statement.
"We are investigating an incident involving the limited use of an
antibiotic on a small group of patients. We are monitoring the
situation, and, as always, we continue to pursue our mission of
providing excellent care for our patients," Mr. Seymour's
statement said.
Dr. Leon-Rosen works out of South Florida Eye Associates in Coral
Gables. An attorney for the surgeon and the practice said they
could comment.
"We have different amounts of visual loss and we have different
recommendations including some have even been recommended corneal
transplant surgery," Mr. Friedman said.
The Team 6 Investigators have learned of other clusters of cases
of TASS following cataract surgery. According to the Centers for
Disease Control and Prevention, eight cases of TASS followed
surgery at a Maine hospital in 2006.
In addition, a nationwide outbreak in 2005 was caused by a
contaminated irrigating solution. Ms. Oquendo's lawyer says that
may also be the cause of the Coral Gables cluster.
So what agency is keeping track of these South Florida cases?
None.
TASS does not have to be reported to the Department of Health.
And medication errors or problems don't have to be reported to the
Food and Drug Administration.
COMSCORE INC: Discovery in Privacy Class Action Continues
---------------------------------------------------------
Discovery of the Privacy Class Action Litigation against comScore,
Inc., is underway and expected to continue through 2013, according
to the Company's Form 10-Q filed on October 29, 2013, with the
U.S. Securities and Exchange Commission for the quarterly period
ended September 30, 2013.
comScore disclosed: "On August 23, 2011, we received notice that
Mike Harris and Jeff Dunstan, individually and on behalf of a
class of similarly situated individuals, filed a lawsuit against
us in the United States District Court for the Northern District
of Illinois, Eastern Division, alleging, among other things,
violations by us of the Stored Communications Act, the Electronic
Communications Privacy Act, Computer Fraud and Abuse Act and the
Illinois Consumer Fraud and Deceptive Practices Act as well as
unjust enrichment. The complaint seeks unspecified damages,
including statutory damages per violation and punitive damages,
injunctive relief and reasonable attorneys' fees of the
plaintiffs. In October 2012, the plaintiffs filed an amended
complaint which, among other things, removed the claim relating to
alleged violations of the Illinois Consumer Fraud and Deceptive
Practices Act. On April 2, 2013, the District Court issued an
order certifying a class for only three of the four claims,
refusing to certify a class for unjust enrichment. Discovery is
underway and expected to continue through 2013."
"Based on examination of the remaining claims, we believe that
they are without merit, and we intend to vigorously protect and
defend ourselves. There can be no assurance, however, that we will
prevail in this matter, and any adverse ruling may have a
significant impact on our business and results of operation. In
addition, if this matter proceeds to trial, we may incur
significant legal fees until this matter is resolved."
comScore, Inc., is a provider of on-demand digital analytics
solutions that help its customers to make informed, data-driven
decisions and implement digital business strategies. The Company's
products and solutions offer the customers deep insights into
consumer behavior, including objective, detailed information
regarding usage of their online properties and those of their
competitors, coupled with information on consumer demographic
characteristics, attitudes, lifestyles and offline behavior. In
addition, it offers mobile and network analytics products which
provide market intelligence to mobile carriers worldwide. Its
platforms consists of databases and a computational infrastructure
that measures, analyzes and reports on digital activity. On August
11, 2011, the Company completed its acquisition of AdXpose, Inc.
(AdXpose). In March 2013, the Company announced the divestiture of
its non-health copy-testing and non-health equity tracking assets
of ARS to MSW Research.
DAIRY FARMERS: Judge Approves Disbursement of Settlement Funds
--------------------------------------------------------------
Julia G. Walker, writing for AgriVoice Enterprises, reports that a
4-page Court Order, a culmination point for one of the most
complex farm and food class action litigations in United States
history, will return $85 million to Southeast dairy farm
communities in the coming weeks.
In an Order entered on December 11, 2013, US District Judge J.
Ronnie Greer approved the disbursement of the DFA Settlement Funds
in the Southeast Milk Litigation, following a Motion filed by
Plaintiff's Attorneys for the Dairy Farmer Class on November 26,
2013. The litigation is based in US District Court, Greeneville
Division, Eastern District of Tennessee, in the Sixth Federal
Circuit.
In keeping with the normal standards of Federal Class Action
lawsuits of this nature, attorneys' fees and expenses (thirty-
three and one-third percent contingency), claims administrator
expenses, certain miscellaneous expenses, and payments to named
plaintiffs were deducted from the gross settlement fund to result
in the net settlement fund of $85,644,095.34. The attorneys will
be paid on the same schedule as the plaintiff farmers are paid.
With the Order, checks can now be cut and distributed to 6,086
class members who will receive an average of $14,072 each.
Payments are prorated depending on pounds produced and determined
to be class-eligible, larger herds will receive significantly more
than the average. However, if farmers elected to use third-party
representation, those farmers themselves will receive anywhere
from 15% to 30% less, depending on the percentage of fees charged
by the third-party filer they elected to use.
Dairy Farmers of America, Inc., (DFA) and related entities
National Dairy Holdings, LP (NDH), Dairy Marketing Services, LLC
(DMS), Mid-Am Capital, LLC, and Gary Hanman, former CEO of DFA,
entered into a Settlement Agreement in the class action lawsuit on
January 17, 2013, and which was filed with the Court on January
21, 2013.
They were the last remaining defendants to settle in the complex
litigation, originally filed in July of 2007, a tenure of six and
one-half years. Other defendants Dean Foods, Southern Marketing
Agency (SMA), and James Baird finalized their settlement
agreements in February of 2012, with final approval by the Court
in June of 2012. In the language of all settlements, none of the
defendants admitted guilt to the allegations of antitrust and
price-fixing for the purpose of depressing prices paid to dairy
farmers in Federal Milk Marketing Orders 5 and 7, respectively the
Appalachian and Southeast orders.
The settlement agreement for each defendant varies in the terms of
the total monetary payments, the terms, timing, and length of the
payout schedules, and the conduct changes in the marketplace which
will take place over several years. The court retains enforcement
and jurisdiction of the Settlement agreements until the last
activities per the agreements are expected to occur by the year
2016.
The current DFA Gross Settlement Fund totaled $140 Million
Dollars, equal to the Dean Settlement monetary amount. However,
the Dean Food Settlement Funds will be distributed over annual
payments until the fall of 2016, while DFA elected to borrow funds
and make a one-time payment to settle the lawsuit. Honoring the
Settlement Agreement, DFA placed the $140 Million in an escrow
account in February 2013. Any interest accrued by the escrow fund
is accounted for in the distribution.
In accordance with Class Action procedure, a Fairness Hearing for
the Plaintiffs/Farmer Class to make comments was held on April 3,
2013, with Final Approval of the DFA Settlement entered on the
Court's file on May 17, 2013. The Order of Approval had to
survive an appeals time frame, and the Claims Administrator had to
satisfy the Court's requirements for meticulous audit and
accounting procedures before the funds could be paid to class
members.
There is a good possibility, but not a guarantee, that Class
members will receive these checks before the end of the year.
With the first Dean Foods/SMA Settlement payment issued in
January, the Order for Disbursement was filed on January 8, and
many farmers received checks beginning two weeks later, on
January 22. With the second Dean payment, there was a month
before checks were received following the Order.
In a separate portion of the DFA & Related Settlement Agreements,
there were approximately 50 documents, a portion of the many
confidential documents under seal during the course of the
litigation, which the defendants agreed to finally open to the
public. Many dairy industry stakeholders across the country have
felt the information contained in those documents is as important
as the monetary settlements. Those documents have yet to be
opened, and it is unknown when they will be.
Too, there were terms in the Settlement Agreement concerning the
public announcement of salaries of key DFA management and
compensation for board members to be announced. Those
announcements depended on actions of the applicable councils and
committees within the DFA membership itself hinging on annual
meeting dates. It is anticipated those actions should be resolved
during the winter and spring of 2014.
Appropriate court documents and additional information should be
appearing on the Litigation website in the coming days.
DENTSPLY INTERNATIONAL: Awaits Decision in Cavitron(R) Suit
-----------------------------------------------------------
A class action suit alleging that DENTSPLY International Inc.
misrepresented its Cavitron(R) ultrasonic scalers, went to trial
in September 2013 and currently awaiting the Court's decision,
according to the Company's Form 10-Q filed on October 29, 2013,
with the U.S. Securities and Exchange Commission for the quarterly
period ended September 30, 2013.
On June 18, 2004, Marvin Weinstat, DDS and Richard Nathan, DDS
filed a class action suit in San Francisco County, California
alleging that the Company misrepresented that its Cavitron(R)
ultrasonic scalers are suitable for use in oral surgical
procedures. The Complaint seeks a recall of the product and refund
of its purchase price to dentists who have purchased it for use in
oral surgery. The Court certified the case as a class action in
June 2006 with respect to the breach of warranty and unfair
business practices claims. The class that was certified is defined
as California dental professionals who, at any time during the
period beginning June 18, 2000 through September 14, 2012,
purchased and used one or more Cavitron(R) ultrasonic scalers for
the performance of oral surgical procedures on their patients,
which Cavitrons(R) were accompanied by Directions for Use that
"Indicated" Cavitron(R) use for "periodontal debridement for all
types of periodontal disease." A Class Notice was mailed on
September 14, 2012. The case went to trial in September 2013 and a
decision has not yet been issued by the Court.
DENTSPLY International Inc. (DENTSPLY) is a designer, developer,
manufacturer and marketer of a range of dental products. The
Company operates in four segments, all of which are primarily
engaged in the design, manufacture and distribution of dental
products in four principal categories: dental consumables, dental
laboratory products, dental specialty products and consumable
medical device products. DENTSPLY conducts its business in over
120 foreign countries, principally through its foreign
subsidiaries. It operates in Canada, the European market, which
includes Germany, Switzerland, France, Italy, and the United
Kingdom. It also has a market presence in Central and South
America, South Africa and Pacific Rim. It has also established
marketing activities in Moscow, Russia. On August 31, 2011, the
Company acquired Astra Tech AB. In November 2013, the Company
acquired QAHR, a direct dental selling organization with
headquarters in Hong Kong and operations also in mainland China.
DENTSPLY INTERNATIONAL: Center City Periodontists Suit to Proceed
-----------------------------------------------------------------
DENTSPLY International Inc., disclosed that the complaint
asserting putative class action claims on behalf of dentists
located in New Jersey and Pennsylvania will now proceed under the
name "Center City Periodontists", according to the Company's Form
10-Q filed on October 29, 2013, with the U.S. Securities and
Exchange Commission for the quarterly period ended September 30,
2013.
On December 12, 2006, a Complaint was filed by Carole Hildebrand,
DDS and Robert Jaffin, DDS in the Eastern District of Pennsylvania
(the Plaintiffs subsequently added Dr. Mitchell Goldman as a named
class representative). The case was filed by the same law firm
that filed the Weinstat case in California. The Complaint asserts
putative class action claims on behalf of dentists located in New
Jersey and Pennsylvania. The Complaint seeks damages and asserts
that the Company's Cavitron(R) ultrasonic scaler was negligently
designed and sold in breach of contract and warranty arising from
misrepresentations about the potential uses of the product because
it cannot assure the delivery of potable or sterile water.
Following dismissal of the case for lack of jurisdiction, the
plaintiffs filed a second complaint under the name of Dr.
Hildebrand's corporate practice. The Company's motion to dismiss
this new complaint was denied and the case will now proceed under
the name "Center City Periodontists." The Court recently granted
the Company's Motion and dismissed plaintiffs' New Jersey Consumer
Fraud and negligent design claims, leaving only a breach of
express warranty claim.
The Company does not believe a loss is probable related to the
above litigation. Further a reasonable estimate of a possible
range of loss cannot be made. In the event that one or more of
these matters is unfavorably resolved, it is possible the
Company's results from operations could be materially impacted.
DENTSPLY International Inc. (DENTSPLY) is a designer, developer,
manufacturer and marketer of a range of dental products. The
Company operates in four segments, all of which are primarily
engaged in the design, manufacture and distribution of dental
products in four principal categories: dental consumables, dental
laboratory products, dental specialty products and consumable
medical device products. DENTSPLY conducts its business in over
120 foreign countries, principally through its foreign
subsidiaries. It operates in Canada, the European market, which
includes Germany, Switzerland, France, Italy, and the United
Kingdom. It also has a market presence in Central and South
America, South Africa and Pacific Rim. It has also established
marketing activities in Moscow, Russia. On August 31, 2011, the
Company acquired Astra Tech AB. In November 2013, the Company
acquired QAHR, a direct dental selling organization with
headquarters in Hong Kong and operations also in mainland China.
DIGNITY HEALTH: Court Refused to Dismiss "Rollins" Class Suit
-------------------------------------------------------------
A benefits plan must be established by a church to be considered a
church plan exempt from ERISA requirements, reports Chris Marshall
at Courthouse News Service, citing a federal court ruling.
Starla Rollins, a former billing coordinator with Dignity Health,
filed a class action last April claiming that Dignity Health's
pension benefits plan was underfunded in violation of ERISA, while
Dignity contends that its plan is a church plan that need not
conform to ERISA standards.
ERISA is shorthand for Employee Retirement Income Security Act,
enacted in 1974 to ensure employees receive the benefits they are
promised by establishing minimum funding standards and disclosure
obligations for employee benefit plans, among other requirements.
ERISA specifically exempts "church plans" from its requirements.
The term "church plan" means "a plan established and maintained by
its employees by a church or a convention or association of
churches."
U.S. District Judge Thelton Henderson denied Dignity Health's
motion to dismiss, finding that the healthcare provider does not
have statutory authority to establish its own plan and must follow
ERISA regulations.
While Dignity Health concedes that it is not a church, it cited
section C of a 1980 amendment to the ERISA statute to argue that a
plan can qualify as a church plan "regardless of what entity
established the plan, so long as the plan is maintained by a tax-
exempt non-profit entity 'controlled by or associated with a
church or a convention or association of churches.'"
Dignity Health claims that its plan qualifies as a church plan
because the healthcare provider is a tax-exempt entity associated
with the Roman Catholic Church and the benefits plan is maintained
by a sub-committee associated with the church.
But, as the judge points out, a "straightforward reading" of
section A of the statute "is that a church plan 'means,' and
therefore by definition, must be 'a plan established . . . by a
church or convention of churches." (Italics in original.)
While noting that section C complicates the issue, Henderson ruled
that to uphold section C while ignoring Section A would "reflect a
perfect example of an exception swallowing the rule."
According to the ruling, "If, as Dignity argues, all that is
required for a plan to qualify as a church plan is that it meet
section C's requirement that it be maintained by a church-
associated organization, then there would be no purpose for
section A, which defines a church plan as one established and
maintained by a church."
Henderson also found that Dignity's reading ignores limiting
language in section C that requires for an organization to
maintain a health plan it must have as its "principal purpose or
function . . . the administration or funding of a [benefits] plan
or program . . . for the employees of a church."
"Dignity is a healthcare organization; its mission is to provision
of healthcare, not the administration of a benefits plan," the
judge noted.
The court also rejected Dignity's argument that a series of IRS
private letter rulings supports its position that it qualifies as
a church plan, ruling that the rulings apply only to the people or
entities who requested them "and are not entitled to judicial
deference."
Henderson was similarly not persuaded by other rulings that held
the church plan exemption applies to plans established by church-
affiliated entities, finding that some other rulings overlooked
the limitations in section C while others dealt only with who can
maintain or be covered by a plan, not who can start one.
The judge also concluded that a history of the statute supports
his reading that the purpose behind section C was "only to permit
churches to delegate the administration of their benefits plans to
specialized church pension boards without losing church status; it
was not to broaden the scope of organizations who could start a
plan." (Italics in original)
The Plaintiff is represented by:
Bruce Frank Rinaldi, Esq.
Karen L Handorf, Esq.
Matthew Alexander Smith, Esq.
Michelle C. Yau, Esq.
Monya M. Bunch, Esq.
COHEN MILSTEIN SELLERS & TOLL PLLC
1100 New York Avenue, NW, Suite 500 West Tower
Washington, DC 20005
Telephone: (202) 408-4600
Facsimile: (202) 408-4699
E-mail: brinaldi@cohenmilstein.com
khandorf@cohenmilstein.com
msmith@cohenmilstein.com
myau@cohenmilstein.com
mbunch@cohenmilstein.com
- and -
Juli E. Farris, Esq.
Havila C. Unrein, Esq.
Lynn Lincoln Sarko, Esq.
Matthew M. Gerend, Esq.
KELLER ROHRBACK LLP
1201 Third Avenue, Suite 3200
Seattle, WA 98101-3200
Telephone: (206) 623-1900
Facsimile: (206) 623-3384
E-mail: jfarris@kellerrohrback.com
hunrein@kellerrohrback.com
lsarko@kellerrohrback.com
mgerend@kellerrohrback.com
- and -
Ron Kilgard, Esq.
KELLER ROHRBACK, P.L.C.
3101 North Central Avenue, Suite 1400
Phoenix, AZ 85012-2646
Telephone: (602) 248-0088
Facsimile: (602) 230-6360
E-mail: rkilgard@kellerrohrback.com
The Defendants are represented by:
Nicole A. Diller, Esq.
Roberta H. Vespremi, Esq.
MORGAN LEWIS & BOCKIUS LLP
One Market, Spear Street Tower
San Francisco, CA 94105-1126
Telephone: (415) 442-1000
Facsimile: (415) 442-1001
E-mail: ndiller@morganlewis.com
rvespremi@morganlewis.com
- and -
Allyson N. Ho, Esq.
MORGAN LEWIS & BOCKIUS LLP
1717 Main Street, Suite 3200
Dallas, TX 75201-7347
Telephone: (214) 466-4000
E-mail: aho@morganlewis.com
- and -
Charles C. Jackson, Esq.
MORGAN LEWIS & BOCKIUS LLP
77 West Wacker Drive, 5th Floor
Chicago, IL 60601
Telephone: (312) 324-1156
E-mail: charles.jackson@morganlewis.com
The case is Rollins v. Dignity Health, et al., Case No. 3:13-cv-
01450-TEH, in the U.S. District Court for the Northern District of
California (San Francisco).
DJO FINANCE: Has Adequate Insurance Coverage as of Sept. 28
-----------------------------------------------------------
DJO Finance LLC has, as of September 28, 2013, adequate insurance
coverage for claims in a number of product liability lawsuits,
according to the Company's Form 10-Q filed on October 29, 2013,
with the U.S. Securities and Exchange Commission for the quarterly
period ended September 28, 2013.
The Company states: "We are currently named as one of several
defendants in a number of product liability lawsuits involving
approximately 15 plaintiffs in U.S. cases and a lawsuit in Canada
which has been granted class action status for a class of
approximately 45 claimants, related to a disposable drug infusion
pump product (pain pump) manufactured by two third party
manufacturers that we distributed through our Bracing and Vascular
segment. We sold pumps manufactured by one manufacturer from 1999
to 2003 and then sold pumps manufactured by a second manufacturer
from 2003 to 2009. We discontinued our sale of these products in
the second quarter of 2009. These cases have been brought against
the manufacturers and certain distributors of these pumps. All of
these lawsuits allege that the use of these pumps with certain
anesthetics for prolonged periods after certain shoulder surgeries
or, less commonly, knee surgeries, has resulted in cartilage
damage to the plaintiffs. In the past three years, we have been
dismissed from approximately 410 cases when product identification
was later established showing that we did not sell the pump in
issue. In the past three years, we have entered into settlements
with plaintiffs in approximately 110 pain pump lawsuits. As of
September 28, 2013, the range of potential loss for these claims
is not estimable, although we believe we have adequate insurance
coverage for such claims."
DJO Finance LLC develops, manufactures, and distributes medical
devices that provide solutions for musculoskeletal health,
vascular health, and pain management. Its Bracing and Vascular
segment offers rigid knee bracing products, orthopedic soft goods,
cold therapy products, vascular systems, and compression therapy
products primarily under the DonJoy, ProCare, Aircast, and Dr.
Comfort brands. This segment provides its orthopedic soft goods
and medical compression therapy products to independent pharmacies
and home healthcare dealers; and therapeutic footwear, and related
medical and comfort products for the diabetes care market. The
company's Recovery Sciences segment offers home electrotherapy,
iontophoresis, and home traction products under the Empi brand;
bone growth stimulation products; clinical rehabilitation
products, such as clinical electrotherapy devices, clinical
traction devices, treatment tables, continuous passive motion
devices, and dry heat therapy under the Chattanooga brand; and
Compex electrostimulation device to aid muscle development and
accelerate muscle recovery after training sessions. Its
International segment sells the company's products and third party
products through direct sales representatives and independent
distributors worldwide. The company's Surgical Implant segment
develops, manufactures, and markets various knee, hip, and
shoulder implant products for the orthopedic reconstructive joint
implant market. DJO Finance LLC's products are used by orthopedic
specialists, spine surgeons, primary care physicians, pain
management specialists, physical therapists, podiatrists,
chiropractors, athletic trainers, and other healthcare
professionals to treat patients with musculoskeletal conditions;
and athletes and patients for injury prevention and at-home
physical therapy treatment. The company, formerly known as ReAble
Therapeutics Finance LLC, is headquartered in Vista, California.
DJO Finance LLC is a subsidiary of DJO Global, Inc.
DOW CHEMICAL: Appealed $1.06 Billion Judgment in Price-Fixing Suit
------------------------------------------------------------------
The Dow Chemical Company has taken an appeal from a District
Court's $1.06 billion amended judgment, entered on July 26, 2013,
regarding the verdict on multiple civil class action lawsuits
alleging a conspiracy to fix prices of urethane chemical products,
according to the Company's Form 10-Q filed on October 29, 2013,
with the U.S. Securities and Exchange Commission for the quarterly
period ended September 30, 2013.
On February 16, 2006, the Company, among others, received a
subpoena from the U.S. Department of Justice ("DOJ") as part of a
previously announced antitrust investigation of manufacturers of
polyurethane chemicals, including methylene diphenyl diisocyanate,
toluene diisocyanate, polyether polyols and system house products.
The Company cooperated with the DOJ and, following an extensive
investigation, on December 10, 2007, the Company received notice
from the DOJ that it had closed its investigation of potential
antitrust violations involving these products without indictments
or pleas.
In 2005, the Company, among others, was named as a defendant in
multiple civil class action lawsuits alleging a conspiracy to fix
the price of various urethane chemical products, namely the
products that were the subject of the above described DOJ
antitrust investigation. These lawsuits were consolidated in the
U.S. District Court for the District of Kansas (the "District
Court") or have been tolled. On July 29, 2008, the District Court
certified a class of purchasers of the products for the six-year
period from 1999 through 2004. Shortly thereafter, a series of
"opt-out" cases were filed by a number of large volume purchasers;
these cases are substantively identical to the class action
lawsuit, but expanded the time period to include 1994 through
1998. In January 2013, the class action lawsuit went to trial in
the District Court with the Company as the sole remaining
defendant, the other defendants having previously settled. On
February 20, 2013, the jury in the matter returned a damages
verdict of approximately $400 million against the Company, which
would be trebled under applicable antitrust laws -- less offsets
from other settling defendants -- if the verdict is not vacated or
otherwise set aside by the District Court. The Company filed post-
trial motions on March 5, 2013, requesting the District Court
grant judgment in favor of the Company, grant the Company a new
trial and/or decertify the class.
On May 15, 2013, the District Court denied the Company's request
to overturn the verdict and, under antitrust laws, tripled the
damages verdict resulting in a $1.2 billion judgment. On July 26,
2013, the District Court entered an amended judgment in the amount
of $1.06 billion. The Company is appealing this amended judgment.
Additionally, there are two separate but inter-related matters in
Ontario and Quebec, Canada, both of which are pending a decision
on class certification.
The Company has concluded it is not probable that a loss will
occur and, therefore, a liability has not been recorded with
respect to these matters.
In addition, the Company is party to a number of other claims and
lawsuits arising out of the normal course of business with respect
to commercial matters, including product liability, governmental
regulation and other actions. Certain of these actions purport to
be class actions and seek damages in very large amounts. All such
claims are being contested. Dow said it has an active risk
management program consisting of numerous insurance policies
secured from many carriers at various times. These policies often
provide coverage that will be utilized to minimize the financial
impact, if any, of the contingencies described above.
The Dow Chemical Company combines the power of science and
technology to passionately innovate what is essential to human
progress. The Company connects chemistry and innovation with the
principles of sustainability to help address many of the problems,
such as the need for clean water, renewable energy generation and
conservation, and increasing agricultural productivity. Its
diversified portfolio of specialty chemicals, advanced materials,
agrosciences and plastics businesses delivers a broad range of
technology-based products and solutions to customers in
approximately 160 countries and in high growth sectors such as
electronics, water, energy, coatings and agriculture. The Company
conducts its worldwide operations through global businesses, which
are reported in six operating segments: Electronic and Functional
Materials, Coatings and Infrastructure Solutions, Agricultural
Sciences, Performance Materials, Performance Plastics, and
Feedstocks and Energy.
DR HORTON: 5th Cir. Arbitration Ruling A Victory for Employers
--------------------------------------------------------------
Jill Cueni-Cohen, writing for Human Resource Executive Online,
reports that when a National Labor Relations Board ruling that
stated class-action waivers interfere with employees' rights under
the National Labor Relations Act was recently overturned by the
Fifth Circuit Court of Appeals, it marked a victory for employers.
Ron Chapman, of Ogletree, Deakins, Nash, Smoak and Stewart in
Dallas, was lead attorney on the case that now gives employers the
means to resist a growing legal threat from groups of disgruntled
workers.
"There has been an explosion of class and collective action
lawsuits against employers over the past dozen years," Mr. Chapman
says, adding that risks associated with those cases are so
astronomically high that companies are forced to settle them even
if they're without merit.
"I call this judicial blackmail," says Mr. Chapman. "The courts
have now blessed the use of class action waivers as a procedural
defense against judicial blackmail."
D.R. Horton v. the National Labor Relations Board began when an
individual employee who signed a "mutual arbitration agreement"
with homebuilder D.R. Horton then filed a demand seeking a
collective action. Horton took the position that the arbitration
agreement prevented any class or collective action, but this
resulted in the employee filing an unfair labor practice charge
with the NLRB.
"The underlying dispute with the individual was settled long ago,
but in 2012, the NLRB found that class action waivers are
unlawful," says Chapman. "Since then, every appellate court has
rejected the NLRB's decision."
He notes that the NLRB will likely ignore the ruling in circuits
other than the fifth. "Nevertheless, the clear trend in law is
that class action waivers are permitted in arbitration
agreements."
According to Gregory King, director of the NLRB Office of Public
Affairs in Washington, "The NLRB is reviewing the court's decision
to determine what steps to take. That's all we're actually saying
about D.R. Horton."
At a minimum, every employer needs to consider adopting an
arbitration agreement that contains a class action waiver,
Mr. Chapman says, adding that employers who already have an
arbitration agreement need to make sure it complies with the
nuances set forth in the D.R. Horton case, and that employees must
be clear on the fact that they aren't prevented from making
complaints to local, state or federal agencies.
Employment attorney Jim Evans -- james.evans@alston.com -- with
Alston & Bird's Los Angeles office, agrees, noting, "A well-
drafted arbitration policy will put the employer and employee
together early, before a dispute ever blows up into a conflict.
But if it does, arbitration gives a speedy remedy," he says.
"Arbitration agreements and class-action waivers that have the
hallmarks of fairness and don't deprive the employee of any
substantive rights are generally going to be enforced by the
court."
However, class-action waivers will still probably be seen as
illegal in the eyes of the NLRB.
"I think it's important for employers to know that this is not the
end," says Julie Capell, a labor and employment partner in Winston
and Strawn's Los Angeles office. "This is a good victory, but
it's likely the NLRB is going to completely ignore this ruling,
because the NLRB follows the doctrine of non-acquiescence. The
only time they will follow something a federal court says is if
the U.S. Supreme Court says it. We really can't rest easy until
the U.S. Supreme Court follows what the Fifth Circuit and other
circuits have said."
The current composition of the U.S. Supreme Court is extremely
favorable to waivers, says Ms. Capell. "For this reason, I think
the NLRB may try to delay getting this issue before the Supreme
Court. I would advise any employer to consult with legal counsel
based on the D.R. Horton ruling."
However, the Fifth Circuit ruling does give employers the means to
protect themselves. "It doesn't take away the employee's right to
seek redress on their own," says Ms. Capell. "They still have an
avenue to seek justice; they just can't seek class action."
Plaintiff's attorney Bob Goodman, of Kilgore and Kilgore in
Dallas, cautions employers that arbitration agreements with class-
action waivers could make resolution of large-scale problems more
difficult by handling them one at a time.
"Think twice about forcing class-action waivers," he says,
"because they inhibit dealing with big problems on a big-problem
basis. They could add to the cost of defending against multiple
claims, which can come back and bite employers."
Michael Avakian, vice president of the Washington-based Center on
National Labor Policy Inc., acknowledges that class-action suits
often have a ripple effect.
"Class actions generate the extraordinary potential to destroy an
employer," he says. "Employers almost have to settle, because
their insurance companies cannot pay this type of extortion.
These lawsuits can affect communities; the tax base, peoples'
lives and expectations. Why should employers not be able to
protect themselves? The constitution provides for the right of
contract."
He also advises HR leaders to put the waiver in their employment
applications.
"Specify it in writing, in bold, on the employment application, so
there's no misunderstanding," he says. "Arbitration is a
preferred method of settling disputes. If you don't like it,
don't sign on to it and don't take the job. It's as simple as
that."
EL PASO PIPELINE: Court Denied Motion to Dismiss Class Action
-------------------------------------------------------------
A U.S. federal court denied El Paso Pipeline Partners, L.P.'s
motion to dismiss a purported class action alleging breach of the
duty of good faith and fair dealing, according to the Company's
Form 10-Q filed on October 29, 2013, with the U.S. Securities and
Exchange Commission for the quarterly period ended September 30,
2013.
The Company states: "In May 2012, a unitholder of EPB filed a
purported class action in Delaware Chancery Court, alleging both
derivative and non-derivative claims, against us, and our general
partner and its board. We were named in the lawsuit as both a
"Class Defendant" and a "Derivative Nominal Defendant." The
complaint alleges a breach of the duty of good faith and fair
dealing in connection with the March 2011 sale to us of a 25%
ownership interest in SNG. Defendants' motion to dismiss was
denied. Defendants continue to believe this action is without
merit and intend to defend against it vigorously."
El Paso Pipeline Partners, L.P. owns and operates interstate
natural gas transportation and terminaling facilities. As of
December 31, 2011, the Company owned Wyoming Interstate Company,
L.L.C. (WIC), Southern LNG Company, L.L.C. (SLNG), Elba Express
Company, L.L.C. (Elba Express), Southern Natural Gas Company,
L.L.C. (SNG) and an 86% interest in Colorado Interstate Gas
Company, L.L.C. (CIG). In March 2011, the Company acquired an
additional 25% interest in SNG from El Paso Corporation (El Paso).
In June 2011, it acquired the remaining 15% interest in SNG and an
additional 28% interest in CIG from El Paso. During the year ended
December 31, 2011, it acquired the remaining 40% general partner
interest in SNG. Effective March 1, 2013, El Paso Pipeline
Partners LP (El Paso Pipeline), a unit of El Paso Corp, acquired
the remaining 14% stake in Colorado Interstate Gas Company, L.L.C.
ELECTROLUX HOME: Faces Class Action Over Defective Ice Makers
-------------------------------------------------------------
Daniel Siegal and David McAfee, writing for Law360, report that an
Electrolux Home Products Inc. customer hit the appliance maker
with a putative class action in Pennsylvania federal court on
Dec. 10 alleging it sold refrigerators with defective ice makers
that broke repeatedly and leaked, causing customers to rack up
repair bills.
The suit alleges that more than eight different models of
Electrolux French door and side-by-side type refrigerators sold
since 2010 contain an ice maker whose "fast ice" setting
consistently malfunctions.
"The refrigerators are not suitable for the purpose for which they
are used, are not free of defects and they do not consistently
'make ice up to 50 percent faster,'" the complaint states. "The
refrigerators were sold with defective ice makers that often fail
to produce ice, requiring multiple repairs, and, eventually, cause
leaks."
The Dec. 10 suit is the latest consumer class action against North
Carolina-based Electrolux, the U.S. subsidiary of Sweden-based
household appliance giant Electrolux AG. The company is currently
facing a class action in Georgia federal court alleging the
company's Frigidaire brand front-loading washing machines collect
standing water, causing mold and mildew to grow in the machines.
Named plaintiff Cameron Watters alleges that her Electrolux French
door refrigerator stopped making ice approximately two months
after she purchased it in February 2010. Ms. Watters had the
refrigerator repaired six times through spring 2013, when the
refrigerator leaked, causing roughly $2,300 in water damage to the
wood floor in her home, according to the complaint.
Ms. Watters says she is one of hundreds, if not thousands, of
customers who purchased one of the refrigerators in question and
dealt with a nonfunctional or leaking ice maker. The Dec. 10
complaint was filed on behalf of a proposed class of all current
and former owners of defective Electrolux refrigerators who
purchased their refrigerator in Pennsylvania.
The refrigerators at issue contain a separate cooling control
system in the area of their freezer used for ice making, and
Electrolux claimed this allowed a small portion of the freezer to
be cooled to temperatures below that of the rest of the freezer,
resulting in faster ice production, according to the complaint.
The refrigerators are sold at major national retail stores such as
Sears, Best Buy and Lowe's at prices ranging from $1,900 to more
than $4,000, the complaint states. The refrigerators are sold with
an express one-year factory warranty.
Electrolux marketed the refrigerators as having the ability to
make ice faster than a normal refrigerator, and charged more for
the "supposedly 'advanced' products," according to the complaint.
The complaint claims that Electrolux refrigerators have caused
"widespread disappointment and frustration" for customers across
the country, and provides several customer reviews of the
refrigerators from Amazon.com Inc.'s website that complain of
defective ice makers.
The complaint alleges Electrolux violated Pennsylvania unfair
competition and false advertising laws and breached express and
implied warranties by selling the refrigerators. The putative
class is seeking damages, an injunction ordering Electrolux to
stop selling refrigerators with defective ice makers and an order
compelling Electrolux to replace or repair class members'
refrigerators.
Representatives for Ms. Watters and Electrolux did not respond
immediately to requests for comment on Dec. 10.
Ms. Watters is represented by R. Bruce Carlson, Gary F. Lynch --
glynch@carlsonlynch.com -- Stephanie K. Goldin --
sgoldin@carlsonlynch.com -- and Jamisen Etzel --
jetzel@carlsonlynch.com -- of Carlson Lynch Ltd.; Edwin J. Kilpela
Jr. and Benjamin J. Sweet of Del Sole Cavanaugh Stroyd LLC and
Bobby Wood -- bwood@rpwb.com -- and Jay Ward -- jward@rpwb.com --
of Richardson Patrick Westbrook & Brickman LLC.
Counsel information for Electrolux was not immediately available
on Dec. 11.
The case is Cameron Watters v. Electrolux Home Products Inc., case
number 2:13-cv-01759 in the U.S. District Court for the Western
District of Pennsylvania.
FARMERS INSURANCE: Jackson Lewis Discusses Class Action Ruling
--------------------------------------------------------------
Mark S. Askanas, Esq. -- AskanasM@jacksonlewis.com -- at Jackson
Lewis P.C. reports that as common issues predominated regarding
whether the employer had a policy of denying compensation for
certain pre-shift work in violation of California's wage and hour
laws, denial of class certification is not appropriate, the
California Court of Appeal has ruled, reversing the lower court.
Jones et al. v. Farmers Ins. Exchange, No. B237765 (Cal. Ct. App.
Nov. 26, 2013). However, the Court also ruled that the named
plaintiff was not an adequate class representative and allowed the
employees to amend their complaint to name a new class
representative.
Background
Farmers Insurance Exchange employs claims representatives to
assess physical damage to automobiles. Representatives spent most
of their time in the field inspecting damaged vehicles,
negotiating claims, and accessing and entering information onto
Farmers' database using laptop computers. The representatives
traveled to their first assignment each day from home. According
to the representatives, Farmers had a policy that the workday did
not begin until they reached their first assignment and that
preparatory tasks performed at home, such as syncing their
computer, obtaining work assignments, and downloading property
damage estimate forms, were not compensable.
Kwesi Jones worked for Farmers as a claims representative from
2006 to 2008, when he was terminated. In 2009, Jones, on behalf
of himself and others similarly situated, filed a class action
lawsuit alleging that Farmers failed to compensate the claims
representatives for their pre-shift work in violation of the
California Labor Code. The trial court denied the claims
representatives' motion for class certification, ruling that
common issues did not predominate. The claims representatives
appealed.
Applicable Law
When deciding a motion for class certification, California courts
examine whether "the issues which may be jointly tried, when
compared with those requiring separate adjudication, are so
numerous or substantial that the maintenance of a class action
would be advantageous to the judicial process and to the
litigants."Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th
319 (Cal. 2004). The focus in a certification dispute is on
whether common or individual questions are likely to arise in the
action, rather than on the merits of the case. In general, if a
"defendant's liability can be determined by facts common to all
members of the class, a class will be certified even if the
members must individually prove their damages." Brinker Restaurant
Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012).
Appeals Court Decision
The claims representatives argued that the trial court erred in
denying class certification because common issues existed
regarding whether Farmers had a uniform policy denying them
compensation for pre-shift work in violation of California law.
The employer denied that such a policy existed. It argued against
class certification because individual issues (such as the type of
tasks performed and whether those activities were de minimus)
predominated.
The Court rejected the employer's argument. It held that whether
the employer had a policy denying compensation for pre-shift work
was "a factual question that is common to all class members."
Further, it said the employer's liability turned on the existence
of such a policy and its application. Indeed, the Court noted
that the employer's evidence regarding individual issues was
related mainly to the claims representatives' damages; this
evidence did not preclude class certification on the policy issue.
However, the Court also found that Jones, the named plaintiff, was
not an adequate class representative because he failed to submit a
declaration establishing that he wanted to represent the class and
understood his fiduciary obligations as a class representative.
Accordingly, the Court reversed the denial of class certification
and returned the case to the trial court with instructions that
the claims representatives amend the complaint to name a new class
representative.
FIFTH THIRD BANCORP: High Court to Weigh Pension Planners' Duties
-----------------------------------------------------------------
The Supreme Court will consider when managers of employees'
defined contribution retirement plan have a legal duty to stop
investing in the company's own stock when they know it has
precipitously declined in value, reports Dan McCue at Courthouse
News Service.
Plaintiffs John Dudenhoefer and Alireza Partovipanah, former
employees of Fifth Third Bank, each participated in the plan and
invested in the banks common stock beginning in 2007. Under the
plan, the plaintiffs made voluntary contributions from their
salaries and directed its fiduciaries to purchase investments from
preselected options.
During the time they participated in the plan, these options
included Fifth Third Stock, two collective funds, or seventeen
mutual funds.
In 2008, Dudenhoefer and Partovipanah filed a class action against
the fiduciaries in the federal court in Cincinnati, charging that
they failed to exercise the required skill, prudence or diligence
in administering the plan.
Specifically, the plaintiffs alleged the defendants breached their
fiduciary duties in violation of ERISA by continuing to offer
company stock as an investment option, instead of suitable short-
term options within the plan, when the stock no longer was a
prudent investment for participants' retirement savings. They
also claimed the fiduciaries failed to communicate complete and
accurate information about the plan, failed to avoid conflicts of
interest, and failed to supervise or properly manage their
appointees.
In November 2010, U.S. District Judge Sandra Beckwith granted the
defendants' motion to dismiss, holding that the plaintiffs failed
to state a plausible claim for relief. In her opinion, Judge
Beckwith found that as the plan was an employee stock ownership
fund under ERISA, the defendants benefitted from a presumption
that their decision to remain invested in employer securities was
reasonable. In this light, she said, the plaintiffs failed to
allege facts to overcome this presumption of reasonableness.
Dudenhoeffer appealed her decision a month later.
In September 2012, a three-judge panel of the 6th Circuit reversed
Beckwith's judgment, and remanded the case for further
proceedings. In doing so, it held the district court erred in
dismissing plaintiff's prudence and disclosure claims, and that as
a result, it did not "substantially analyze" the plausibility of
the remaining counts.
In granting the case a writ of certiorari, the high court said it
would consider two questions:
Whether the 6th Circuit erred by holding the respondents were not
required to plausibly allege in their complaint that the
fiduciaries of an employee stock ownership plan abused their
discretion by remaining invested in employer stock; and whether
the circuit erred "by refusing to follow precedent of this Court
(and the holdings of every other circuit to address the issue) by
holding that filings with the Securities and Exchange Commission
become actionable ERISA fiduciary communications merely by virtue
of their incorporation by reference into plan documents."
The Plaintiffs-Appellants are represented by:
Edward W. Ciolko, Esq.
Mark K. Gyandoh, Esq.
Peter Houghton LeVan, Jr., Esq.
KESSLER TOPAZ MELTZER & CHECK
280 King of Prussia Road
Radnor, PA 19087
Telephone: (610) 667-7706
E-mail: eciolko@ktmc.com
mgyandoh@ktmc.com
- and -
Thomas J. McKenna, Esq.
GAINEY MCKENNA & EGLESTON
440 Park Avenue, S., 5th Floor
New York, NY 10016
Telephone: (212) 983-1300
E-mail: tjmckenna@gme-law.com
The Defendants-Appellees are represented by:
James E. Burke, Jr., Esq.
David Thomas Bules, Esq.
Joseph Michael Callow, Jr., Esq.
Danielle M. D'Addesa, Esq.
KEATING, MUETHING & KLEKAMP
One E. Fourth Street, Suite 1400
Cincinnati, OH 45202
Telephone: (513) 579-6400
E-mail: jburke@kmklaw.com
dbules@kmklaw.com
jcallow@kmklaw.com
ddaddesa@kmklaw.com
The 6th circuit case is John Dudenhoefer, et al. v. Fifth Third
Bancorp, et al., Case No. 11-3012, in the United States Court of
Appeals for the Sixth Circuit. The original case is John
Dudenhoefer v. Fifth Third Bancorp, et al., Case No. 1:08-CV-538,
in the U.S. District Court for the Southern District of Ohio.
FIRST MED: Faces Class Action Over WARN Act Violations
------------------------------------------------------
WWAY reports that new details are emerging about fallout from the
closure of Wilmington-based First Med EMS.
On Dec. 10, a lawsuit was filed in federal court alleging the
company violated the Worker Adjustment and Retraining Notification
Act, because it did not provide at least 60 days' notice of
termination.
"I thought it was a bad joke," said former FirstMed employee
Elaine Carriker. "When I walked in Friday night I thought
something was funny and I kept asking questions and I was told to
mind my own business."
Attorney Jack Raisner, who filed the suit on behalf of former
First Med employee Branden Engle, says the layoffs could not have
come at a worse time.
"The losses to the employees are numerous," said Mr. Raisner.
"It's bad enough to lose your job, but to lose it without notice,
you lose it at a time when you're going to lose your ability to
take care of your holiday obligations and your piece of mind is
gone. Perhaps most perilously you are losing your health
insurance at the same time."
The suit seeks payouts to recover 60 days' pay and bonuses,
accrued holiday and vacation pay, pension and 401(k) contributions
and unemployment benefits.
"All of the employees as far as we know have been terminated
without notice over the last 3 or 4 days," said Mr. Raisner.
"That is in our view in violation of a statute that says employees
in a mass layoff have to be given 60 days advanced written
notice."
If you are a former FirstMed employee and wish to become a part of
the class action lawsuit you can contact the Outten & Golden Law
Firm at (212)245-1000.
FORD MOTOR: Balks at Plaintiffs Lawyers' Consumer Advisory Bid
--------------------------------------------------------------
John O'Brien, writing for The West Virginia Record, reports that
Ford Motor Company on Dec. 4 filed its memorandum in opposition to
a requested preliminary injunction that, if granted, would make
the company issue a safety advisory that would inform drivers of
certain Ford vehicles how to handle unintended sudden acceleration
issues. Ford said plaintiffs lawyers are attempting to bypass
several key steps in asking a federal judge to force the company
to issue a consumer advisory.
The motion was filed Nov. 18 by plaintiffs attorneys in a class
action lawsuit in U.S. District Court for the Southern District of
West Virginia in Huntington.
"Nearly eight months after filing their Complaint, and with
absolutely no change in the factual circumstances attendant to the
case, Plaintiffs have now filed a Motion for Preliminary
Injunction," Ford's attorneys wrote.
"Plaintiffs seek to bypass a resolution of the pending Motion to
Dismiss, bypass discovery, bypass class certification, bypass
Daubert challenges and summary judgment motions, bypass trial, and
instead proceed directly to the entry of class-wide injunctive
relief . . .
"Plaintiffs now contend, without offering any competent evidence,
that owners of Ford vehicles are at a 'grave risk' of imminent,
physical harm that can only be avoided with the Court-ordered
issuance of a set of instructions, to-wit, that in the event of an
unwanted acceleration event, the driver should apply the brakes."
The lawsuit, filed earlier in 2013, alleges purchasers of Ford,
Lincoln and Mercury vehicles made from 2002-10 would not have paid
as much as they did if they knew the vehicles were subject to
unintended acceleration.
No physical injury is alleged. Still pending is Ford's motion to
dismiss, filed June 27.
It says the plaintiffs seek damages because the vehicles lack a
particular driver-assistance feature known as Brake-Throttle
Override, which depowers the engine if the gas pedal is trapped by
a floor mat and the driver hits the brake.
Ford says it never marketed the vehicles at issue as having a BTO
feature.
The plaintiffs attorneys responded by arguing internal Ford
reports show that immediately after the company introduced the
throttle control electronics at issue, the vehicles began
experiencing sudden accelerations in large numbers.
Also still pending is the plaintiffs attorneys' request to have
several leadership positions among them named.
Two Charleston attorneys are asking to be named interim co-lead
counsel. They are Timothy Bailey of Bucci, Bailey & Javins and
Niall A. Paul -- npaul@spilmanlaw.com -- of Spilman Thomas &
Battle.
They are joined in their request by Adam J. Levitt --
alevitt@gelaw.com -- of Grant & Eisenhofer in Chicago; Stephen M.
Gorny of Bartimus, Frickleton, Robertson & Gorny in Leawood, Kan.;
and Mark DiCello -- madicello@dicellolaw.com -- of The DiCello Law
Firm in Mentor, Ohio.
Charleston attorney Edgar F. Heiskell III is also asking to be a
part of the Plaintiffs Steering Committee.
Ford says it is too early to decide leadership positions because
there is still a class action pending in South Carolina federal
court and all the class actions should be before the same court.
In the motion for preliminary injunction, plaintiffs attorneys say
Ford owners are in danger of significant injury or death.
"The further delay in providing the requested consumer advisory
information exposes class members and the general public to
substantial risks. Instructions provided years from now (once the
case is finally tried) cannot adequately protect owners and the
general public to the same extent as providing the instructions
now.
"People will be injured or die and property will be damaged during
that time. That is the hallmark of an irreparable injury."
Ford's response says the motion is procedurally and factually
flawed and shows why the complaint should be dismissed.
"While Plaintiffs still do not identify any underlying design or
manufacturing defect in any of the class vehicles, much less a
defect common to all the vehicles, their proposed solution bears
out what Ford has said all along: if a vehicle's gas pedal becomes
stuck under a floor mat or obstructed for another reason,
application of the brakes will overcome the accelerator and stop
the vehicle," the company's attorneys wrote.
The requested safety advisory contains three steps. First, a
driver should step hard on the brake pedal but not pump the
brakes.
Second, he or she should shift to neutral, if possible, and steer
the car to a safe place by the road. Third, the driver should turn
off the engine.
Ford is represented by three law firms, including Flaherty
Sensabaugh Bonasso in Charleston.
Other plaintiffs attorneys asking to be placed on the Plaintiffs
Steering Committee are John T. Murray of Murray and Murray in
Sandusky, Ohio; John Scarola of Searcy Denney Scarola Barnhart &
Shipley in West Palm Beach, Fla.; Joseph J. Siprut --
jsiprut@siprut.com -- of Siprut PC in Chicago; Keith G. Bremer of
Bremer Whyte Brown & O'Meara in Newport Beach, Calif.; E. Powell
Miller -- epm@millerlawpc.com -- of The Miller Law Firm in
Rochester, Mich.; Grant L. Davis -- gdavis@dbjlaw.net -- of Davis
Bethune & Jones in Kansas City, Mo.; and Gregory M. Travalio --
gtravalio@isaacwiles.com -- of Isaac Wiles Burkholder & Teetor in
Columbus, Ohio.
FRESH DEL MONTE: Unfair Competition Suit in Calif. Dismissed
------------------------------------------------------------
A U.S. Federal Court on May 14, 2013, dismissed a consolidated
class action against Fresh Del Monte Produce Inc., alleging unfair
competition, according to the Company's Form 10-Q filed on October
29, 2013, with the U.S. Securities and Exchange Commission for the
quarterly period ended September 27, 2013.
Between March 17, 2004 and March 18, 2004, three alleged
individual consumers separately filed putative class action
complaints against the Company and certain of its subsidiaries in
the state court of California on behalf of residents of California
who purchased (other than for re-sale) Del Monte Gold(R) Extra
Sweet pineapples between March 1, 1996 and May 6, 2003. On
November 9, 2005, the three actions were consolidated under one
amended complaint with a single claim for unfair competition in
violation of the California Business and Professional Code. On
September 26, 2008, plaintiffs filed a motion to certify a class
action. On August 20, 2009, the court denied class certification.
On October 19, 2009, plaintiffs filed a notice of appeal of the
court's order denying class certification. On February 29, 2012,
the oral argument hearing on the appeal was held. On March 7,
2012, the appeal was rejected and the denial of class
certification was upheld. On May 14, 2013, the consolidated action
was dismissed.
On March 5, 2004, an alleged individual consumer filed a putative
class action complaint against certain of the Company's
subsidiaries in the state court of Tennessee on behalf of
consumers who purchased (other than for resale) Del Monte Gold(R)
Extra Sweet pineapples in Tennessee from March 1, 1996 to May 6,
2003. The complaint alleges violations of the Tennessee Trade
Practices Act and the Tennessee Consumer Protection Act. On
February 18, 2005, the Company's subsidiaries filed a motion to
dismiss the complaint. On May 15, 2006, the court granted the
motion in part, dismissing the plaintiffs' claim under the
Tennessee Consumer Protection Act.
On April 19, 2004, an alleged individual consumer filed a putative
class action complaint against the Company's subsidiaries in the
state court of Florida on behalf of Florida residents who
purchased (other than for re-sale) Del Monte Gold(R) Extra Sweet
pineapples between March 1, 1996 and May 6, 2003. The only
surviving claim under the amended complaint alleges violations of
the Florida Deceptive and Unfair Trade Practices Act relating only
to pineapples purchased since April 19, 2000. The subsidiaries
filed an answer to the surviving claim on October 12, 2006. On
August 5, 2008, plaintiffs filed a motion to certify a class
action. The subsidiaries filed an opposition on January 22, 2009
to which plaintiffs filed a reply on May 11, 2009. On November 29,
2011, the court denied the motion to certify a class action.
Fresh Del Monte Produce Inc. is a producer, marketer and
distributor of fruit and vegetables, as well as a producer and
distributor of prepared fruit and vegetables, juices, beverages
and snacks in Europe, Africa and the Middle East. The Company
markets its products worldwide under the DEL MONTE brand. It
sources its fresh produce products (bananas, pineapples, melons,
tomatoes, grapes, apples, pears, peaches, plums, nectarines,
cherries, citrus, avocados, blueberries and kiwi) primarily from
Central and South America, Africa, the Philippines, North America
and Europe. The Company sources its prepared food products
primarily from Africa, Europe, the Middle East and Asia. Its
products are sourced from company-owned operations, through joint
venture arrangements and through supply contracts with independent
producers. It distributes its products in North America, Europe,
Asia, the Middle East, Africa and South America.
HORIZON HEALTHCARE: Customers Sue Over Stolen Personal Information
------------------------------------------------------------------
Courtney Diana, individually and on behalf of all others similarly
situated v. Horizon Healthcare Services, Inc., d/b/a Horizon Blue
Cross Blue Shield of New Jersey, a New Jersey corporation, Case
No. 2:13-cv-07418-CCC-MF (D.N.J., December 11, 2013) is a national
consumer class action lawsuit brought on behalf of consumers of
health insurance coverage and whose personally identifiable
information and personal health information entrusted to Horizon
was stolen by a thief or thieves while in the possession, custody
and control of Horizon.
On November 1, 2013, two laptop computers containing the PII/PHI
of the Plaintiff and more than 839,000 class members were taken
from a Horizon office in Newark, New Jersey.
Horizon Healthcare Services, Inc., doing business as Horizon Blue
Cross Blue Shield of New Jersey, is a health insurance company
headquartered in Newark, New Jersey.
The Plaintiff is represented by:
Philip A. Tortoreti, Esq.
WILENTZ, GOLDMAN & SPITZER
90 Woodbridge Center Drive, Suite 900
Woodbridge, NJ 07095
Telephone: (732) 636-8000
E-mail: ptortoreti@wilentz.com
- and -
Ben Barnow, Esq.
Blake A. Strautins, Esq.
BARNOW AND ASSOCIATES, P.C.
One N. LaSalle Street, Suite 4600
Chicago, IL 60602
Telephone: (312) 621-2000
Facsimile: (312) 641-5504
E-mail: b.barnow@barnowlaw.com
b.strautins@barnowlaw.com
- and -
Richard L. Coffman, Esq.
THE COFFMAN LAW FIRM
First City Building
505 Orleans Street, Suite 505
Beaumont, TX 77701
Telephone: (409) 833-7700
Facsimile: (866) 835-8250
E-mail: rcoffman@coffmanlawfirm.com
HUNTSMAN CORPORATION: Settled Civil Antitrust Action in Maryland
----------------------------------------------------------------
Huntsman Corporation has agreed to settle a consolidated class
action civil antitrust suit alleging that it has conspired with
other defendants to fix prices of titanium dioxide sold in the
U.S., according to the Company's Form 10-Q filed on October 29,
2013, with the U.S. Securities and Exchange Commission for the
quarterly period ended September 30, 2013.
The Company states: "We have been named as a defendant in
consolidated class action civil antitrust suits filed on February
9 and 12, 2010 in the U.S. District Court for the District of
Maryland alleging that we and our co-defendants and other asserted
co-conspirators conspired to fix prices of titanium dioxide sold
in the U.S. between at least March 1, 2002 and the present. The
other defendants named in this matter are DuPont, Kronos and
Cristal (formerly Millennium). On August 28, 2012, the court
certified a class consisting of all U.S. customers who purchased
titanium dioxide directly from defendants (the "Direct
Purchasers") since February 1, 2003.
"We have also been named as a defendant in a class action civil
antitrust suit filed on March 15, 2013 in the U.S. District Court
for the Northern District of California by purchasers of products
made from titanium dioxide (the "Indirect Purchasers") making
essentially the same allegations as the Direct Purchasers.
"We and all other defendants have agreed to settle the Direct
Purchasers litigation. A hearing to consider final approval of the
settlement is scheduled for November 25, 2013. We have fully
accrued for the settlement with the Direct Purchasers. The
settlement does not resolve the Indirect Purchasers litigation
and, while it is difficult to reasonably estimate any loss or
range of loss associated with these kinds of complex claims, we do
not believe that costs related to the Indirect Purchasers
litigation will be material to our consolidated financial
statements. No accrual has been made for the Indirect Purchasers
litigation."
Huntsman Corporation is a manufacturer of differentiated organic
chemical products and of inorganic chemical products. The Company
operates its businesses through Huntsman International LLC
(Huntsman International). The Company's products consists a range
of chemicals and formulations, which it markets globally to a
range of consumer and industrial customers. The Company is a
global producer in product lines, including methyl diphenyl
diisocyanate (MDI), amines, surfactants, epoxy-based polymer
formulations, textile chemicals, dyes, maleic anhydride and
titanium dioxide. The Company operates in five segments:
Polyurethanes, Performance Products, Advanced Materials, Textile
Effects and Pigments. Effective March 14, 2013, it acquired 20%
interest in Nippon Aqua Co Ltd. In August 2013, the Company
announced that it has completed the acquisition of the business of
Oxid L.P.
IBM CORP: Ties to NSA's PRISM Program Hurt Sales, Class Claims
--------------------------------------------------------------
Annie Youderian at Courthouse News Service reports that IBM hid
its cooperation with the NSA's PRISM program, the disclosure of
which by Edward Snowden caused China to "abruptly halt" sales and
the stock price to plummet, investors claim in a class action.
The lawsuit, filed December 12, 2013, in Manhattan Federal Court,
claims IBM touted itself as a market leader in the Asia-Pacific
region when it knew that China "would not tolerate" its
cooperation with the National Security Agency.
In June, former CIA contractor Snowden divulged the existence of
PRISM, a top-secret electronic surveillance program that gives the
NSA access to the servers of several major tech companies,
including Google and IBM.
Former CIA and NSA Director Michael Hayden called Snowden's
disclosure "the single most destructive leak of American security
information in our history."
Investors say the NSA used PRISM "to spy on China and other
countries," including hacking into critical network infrastructure
at universities in China and Hong Kong.
IBM also lobbied vigorously in support of the Cyber Intelligence
Sharing and Protection Act (CISPA), which made it easier for IBM
to share its customers' data with the NSA, according to the
complaint.
"In order to ensure CISPA's passage, IBM flew nearly 200 senor
executives to Washington D.C. to lobby lawmakers and held 300
meetings with lawmakers and their staff over the course of two
days," investors claim.
"IBM was well aware that its association with the U.S. spy program
and its sharing of customers' information with the U.S. government
would have immediate and adverse consequences on its business in
China," the lawsuit states.
Sure enough, investors say, China retaliated by barring Chinese
businesses and government agencies from buying IBM products.
Sales plummeted from $186.73 per share to $174.83 per share,
despite IBM's rosy projections for the fiscal quarter "immediately
following the disclosure of PRISM and related disclosures by
Snowden," the lawsuit states.
Investors who bought IBM stock between June 25 and Oct. 16 seek
unspecified damages for alleged violations of federal securities
law.
The Plaintiff is represented by:
Avi Josefson, Esq.
Gerald H. Silk, Esq.
BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP
1285 Avenue of the Americas, 38th Floor
New York, NY 10019
Telephone: (212) 554-1493
Facsimile: (212) 554-1444
E-mail: avi@blbglaw.com
jerry@blbglaw.com
The case is Louisiana Sheriff's Pension & Relief Fund v.
International Business Machines Corporation, et al., Case No.
1:13-cv-08818-DLC, in the U.S. District Court for the Southern
District of New York (Foley Square).
ITT EDUCATIONAL: Amended Complaint Filed in Securities Litigation
-----------------------------------------------------------------
An amended complaint was filed on October 7, 2013, in the
Securities Litigation against ITT Educational Services, Inc.,
alleging violations to the Exchange Act, according to the
Company's Form 10-Q filed on October 29, 2013, with the U.S.
Securities and Exchange Commission for the quarterly period ended
September 30, 2013.
On March 11, 2013, a complaint in a securities class action
lawsuit was filed against the Company and two of its current
executive officers in the United States District Court for the
Southern District of New York under the following caption: William
Koetsch, Individually and on Behalf of All Others Similarly
Situated v. ITT Educational Services, Inc., et al. (the "Koetsch
Litigation"). On July 25, 2013, the court named the Plumbers and
Pipefitters National Pension Fund and Metropolitan Water
Reclamation District Retirement Fund as the lead plaintiffs and
consolidated the Koetsch Litigation and the MLAF Litigation
(defined below) under the following caption: In re ITT Educational
Services, Inc. Securities Litigation (the "Securities
Litigation"). On October 7, 2013, an amended complaint was filed
in the Securities Litigation.
The Company disclosed: "The amended complaint alleges, among other
things, that the defendants violated Sections 10(b) and 20(a) of
the Exchange Act and Rule 10b-5 promulgated thereunder by:
* our failure to properly account for the 2007 RSA, 2009 RSA
and PEAKS Program;
* employing devices, schemes and artifices to defraud;
* making untrue statements of material facts, or omitting
material facts necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading;
* making the above statements intentionally or with reckless
disregard for the truth;
* engaging in acts, practices, and a course of business that
operated as a fraud or deceit upon lead plaintiffs and others
similarly situated in connection with their purchases of our
common stock;
* deceiving the investing public, including lead plaintiffs
and the purported class, regarding, among other things, our
artificially inflated statements of financial strength and
understated liabilities; and
* causing our common stock to trade at artificially inflated
prices and causing the plaintiff and other putative class members
to purchase our common stock at inflated prices."
The putative class period in this action is from April 24, 2008
through February 25, 2013. The plaintiffs seek, among other
things, the designation of this action as a class action, an award
of unspecified compensatory damages, interest, costs and expenses,
including counsel fees and expert fees, and such equitable/
injunctive and other relief as the court deems appropriate. All of
the defendants intend to defend themselves vigorously against the
allegations made in the amended complaint.
ITT Educational Services, Inc. (ITT/ESI) is a provider of
postsecondary degree programs in the United States. As of December
31, 2011, the Company offered master, bachelor and associate
degree programs to approximately 73,000 students. As of December
31, 2011, the Company had 144 locations (including 141 campuses
and three learning sites) in 39 states. In addition, ITT/ESI
offered one or more of its online programs to students who were
located in 48 states. The Company designs its education programs,
after consultation with employers and other constituents, to help
graduates prepare for careers in various fields involving their
areas of study. The Company provides career-oriented education
programs under the Daniel Webster College (DWC) name. On August 1,
2013, the Company announced that it has acquired Cable Holdings,
LLC.
ITT EDUCATIONAL: MLAF Suit Consolidated With Securities Litigation
------------------------------------------------------------------
A securities class action lawsuit against ITT Educational
Services, Inc., was consolidated into a pending securities
litigation on July 25, 2013,, according to the Company's Form 10-Q
filed on October 29, 2013, with the U.S. Securities and Exchange
Commission for the quarterly period ended September 30, 2013.
The Company disclosed: "On April 17, 2013, a complaint in a
securities class action lawsuit was filed against us and two of
our current executive officers in the United States District Court
for the Southern District of New York under the following caption:
Massachusetts Laborers' Annuity Fund, Individually and on Behalf
of All Others Similarly Situated v. ITT Educational Services,
Inc., et al. (the "MLAF Litigation"). The complaint alleges, among
other things, that the defendants violated Sections 10(b) and
20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder
by:
* our failure to properly account for the 2007 RSA, 2009 RSA
and PEAKS Program;
* our failure to establish adequate reserves associated with
our guarantee obligations under the 2007 RSA, 2009 RSA and PEAKS
Program, which caused us to misrepresent our earnings,
liabilities, net income and financial condition throughout the
putative class period;
* making false and misleading statements;
* engaging in a scheme to deceive the market and a course of
conduct that artificially inflated the price of our common stock;
* operating as a fraud or deceit on purchasers of our common
stock by misrepresenting our liabilities related to the 2007 RSA,
2009 RSA and PEAKS Program, financial results and business
prospects;
* artificially inflating the price of our common stock; and
* causing the putative class members to purchase our common
stock at artificially inflated prices."
The putative class period in this action is from April 24, 2008
through February 25, 2013. The plaintiff seeks, among other
things, the designation of this action as a class action, and an
award of unspecified compensatory damages, interest, costs,
attorney's fees and equitable/injunctive or other relief as the
Court deems just and proper. All of the defendants intend to
defend themselves vigorously against the allegations made in the
complaint. On July 25, 2013, the MLAF Litigation was consolidated
into the Securities Litigation.
ITT Educational Services, Inc. (ITT/ESI) is a provider of
postsecondary degree programs in the United States. As of December
31, 2011, the Company offered master, bachelor and associate
degree programs to approximately 73,000 students. As of December
31, 2011, the Company had 144 locations (including 141 campuses
and three learning sites) in 39 states. In addition, ITT/ESI
offered one or more of its online programs to students who were
located in 48 states. The Company designs its education programs,
after consultation with employers and other constituents, to help
graduates prepare for careers in various fields involving their
areas of study. The Company provides career-oriented education
programs under the Daniel Webster College (DWC) name. On August 1,
2013, the Company announced that it has acquired Cable Holdings,
LLC.
JUSTMUGSHOTS.COM CORP: Extorts Money From Arrestees, Suit Says
--------------------------------------------------------------
Zim Rogers, as an individual and on behalf of others similarly
situated v. Justmugshots.com Corp., a California Corporation, and
Does 1-25, Case No. BC530194, (Cal. Super. Ct., Los Angeles Cty.,
December 11, 2013) is brought on behalf of similarly situated
individuals, whose photographs and names are or have been posted
on www.justmugshots.com or mugshots.mobi.
The Plaintiff accuses the Defendants of misappropriating his
likeness and the likeness of members of the Class for a commercial
purpose, in violation of the California Civil Code and the
Business and Professions Code. JustMugShots.com posts, without
consent or consideration as to innocence, photographs and names of
individuals taken during their arrest together with the details of
the arresting charges and then profits by extorting a fee from
individuals for removing that same information, Mr. Rogers
contends. He notes that the fee is customarily $199.
JustMugShots.com Corp. is an Internet based company incorporated
in the state of California. The Defendant operates two internet
Web sites, www.justmugshots.com and mugshots.mobi, with the sole
purpose of posting the photographs and names of individuals, who
have been arrested. The Plaintiff currently does not know the
true names and capacities of the Doe Defendants.
The Plaintiff is represented by:
Brian S. Kabateck, Esq.
Richard L. Kellner, Esq.
Evan M. Zucker, Esq.
KABATECK BROWN KELLNER LLP
644 South Figueroa Street
Los Angeles, CA 90017
Telephone: (213) 217-5000
Facsimile: (213) 217-5010
E-mail: bsk@kbklawyers.com
rlk@kbklawyers.com
Jez@kbklawyers.com
MARRIOTT RESORTS: Judge Denies Motion to Dismiss Class Action
-------------------------------------------------------------
Newman Ferrara disclosed that a federal judge on December 10,
2013, denied a motion to dismiss a consumer class action lawsuit
alleging Marriott Resorts Inc. forces timeshare purchasers to
obtain worthless title insurance. The case, entitled McIntyre v.
Marriott Ownership Resorts, Inc., et al., Case No. 13-80184-Civ-
RNS, is presently pending in the United States District Court for
the Southern District of Florida.
The ruling, by U.S. District Judge Robert N. Scola, allows the
case to proceed to discovery and class certification. In his
decision, Judge Scola denied the defendants' motion on plaintiffs'
claim of unjust enrichment and permitted plaintiffs an opportunity
to replead an alternate claim under Florida's Vacation Plan and
Timesharing Act, holding that "the Marriott Defendants' alleged
misrepresentations about the necessity of purchasing title
insurance as a component of purchasing the timeshare are fairly
construed as a misrepresentation regarding the promotion of the
timeshare plan."
The class action complaint alleges that, as part of the sales
process for timeshares, Marriott requires purchasers to obtain
title insurance for their fractional shares and, through a
Marriott-owned subsidiary, provides that coverage for an
additional fee. Plaintiffs allege that because Marriott purchased
and developed the underlying real estate, and created the
timeshare estates on that property, title insurance for original
purchasers was unnecessary and superfluous to the protection
already afforded under the special warranty deeds they received.
In sum, plaintiffs allege that Marriott takes advantage of
timeshare purchasers by requiring them to purchase something that
appears legitimate but serves no legitimate purpose other than to
increase Marriott's profits on the sale.
Potential class members and others interested in learning more
about this case or similar actions, may contact Newman Ferrara
partner Jeffrey M. Norton by e-mail -- jnorton@nfllp.com -- or
call (212) 619-5400. More information on the Marriott timeshare
case can be found on the firm's website at:
Newman Ferrara -- http://www.nfllp.com-- maintains a multifaceted
practice based in New York City with attorneys specializing in
complex commercial and multi-party litigation, securities fraud
and shareholder litigation, consumer protection, civil rights, and
real estate.
NATIONAL COLLEGIATE: Denies Exploiting College Athletes
-------------------------------------------------------
Nick McCann at Courthouse News Service reports that the NCAA said
it doesn't exploit college athletes, answering an ongoing class
action by former players who claim the league uses their images in
broadcasts and videogames but restricts them from making any
money.
Since 2009, a group of former NCAA athletes have been embroiled in
a legal battle over the use of their images in videogames,
merchandise and other promotional materials. In the first
complaint, former UCLA basketball player Ed O'Bannon said the NCAA
violated his and other athletes' right to make money off their
likenesses.
U.S. District Judge Claudia Wilken refused to dismiss the
athletes' third amended consolidated class complaint earlier this
year. In November, she partly certified a class of athletes
seeking injunctive relief against the NCAA.
That class seeks an order ending the prohibition on athletes
entering into licensing deals for the use of their names and
likenesses in video games and broadcasts.
"Their request for this injunction is not merely ancillary to
their demand for damages," Wilken wrote. "Rather, it is deemed
necessary to eliminate the restraints that the NCAA has allegedly
imposed on competition in the relevant markets. Without the
requested injunctive relief, all class members -- including both
current and former student-athletes -- would potentially be
subject to ongoing antitrust harms resulting from the continued
unauthorized use of their names, images, and likenesses."
Attorneys for the NCAA have filed a motion for summary judgment,
along with a memorandum in support. It disputed the athletes'
characterization of participation in college sports as
"exploitation."
"The record shows that playing college sports yields numerous
benefits to student-athletes, both while in school (e.g.,
admissions, grant-in-aid packages, academic support services,
health insurance, and the opportunity to participate in sports
that are an integral part of collegiate life) and after," attorney
Glenn Pomerantz wrote for the NCAA.
Pomerantz added that the arguments made by the athletes are "based
on errors of law and on a quintessential fact question." He said
that athletes cannot prove that live broadcasts of football and
basketball games are commercial in nature, which means the
broadcasts are entitled to full First Amendment protections.
The NCAA also argued that because it did not renew its contract
with videogame company Electronic Arts, the court should not grant
injunctive relief to the athletes for "wholly hypothetical"
transactions.
The NCAA has argued throughout the litigation that claims made by
the athletes are barred by its principle of "amateurism," which
the NCAA says does not violate antitrust laws.
The NCAA pointed to a survey showing that 68.9 percent of
respondents were "opposed to paying money to student-athletes on
college football and men's college basketball teams in addition to
covering their college expenses." A number of respondents said
they "were less likely to watch, listen to or attend games" if the
athletes were paid. This survey "destroys the athletes' arguments
against amateurism," the league argued.
Additionally, athletes failed to show any evidence of other
amateur-level sports broadcasts, such as the Little League World
Series, that paid athletes for use of their images, the NCAA said.
"The reason that the Little Leaguers, the amateur golfers and the
high school athletes are not paid for appearing on television is
that they are amateurs," Pomerantz wrote for the league.
"Even when the Olympics was restricted to amateurs (between 1896
and the late 1980s) and the Olympics produced billions of dollars
in television revenues, the athletes were paid no portion of the
revenues because they were amateurs."
Pomerantz pointed to a study by Professor James Heckman, who
concluded that college athletes are more likely to attend college
and have higher incomes than non-athletes. And their demands for
compensation "would hit women's athletics particularly hard."
The NCAA cited an expert in gender equity in sports, who testified
that "drastic cuts could be the outcome caused by plaintiffs'
proposal, risking unraveling much of the progress and expansion in
women's athletics that has been achieved in the past four
decades."
"Paying men more because their sports are already popular will
lock in gender differentials that are based and built on
historical inequities," expert Judy Sweet added.
NCAA is represented by:
Glenn D. Pomerantz, Esq.
Kelly M. Klaus, Esq.
Carolyn Hoecker Luedtke, Esq.
Rohit K. Singla, Esq.
MUNGER, TOLLES & OLSON LLP
560 Mission Street, Twenty-Seventh Floor
San Francisco, CA 94105-2907
Telephone: (415) 512-4000
Facsimile: (415) 512-4077
E-mail: glenn.pomerantz@mto.com
kelly.klaus@mto.com
carolyn.luedtke@mto.com
rohit.singla@mto.com
- and -
Gregory L. Curtner, Esq.
Robert J. Wierenga, Esq.
Kimberly K. Kefalas, Esq.
SCHIFF HARDIN LLP
350 Main St., Suite 210
Ann Arbor, MI 48104
Telephone: (734) 222-1500
Facsimile: (734) 222-1501
E-mail: gcurtner@schiffhardin.com
rwierenga@schiffhardin.com
kkefalas@schiffhardin.com
The case is In Re NCAA Student-Athlete Name and Likeness Licensing
Litigation, Case No. 09-CV-1967-CW, in the United States District
Court for the Northern District of California, Oakland.
NEWFOUNDLAND & LABRADOR: Loses Bid to Limit Moose Suit Plaintiffs
-----------------------------------------------------------------
CBC News reports that a judge of the Supreme Court of Newfoundland
and Labrador has rejected the provincial government's bid to
exclude most of the people who are taking part in a class-action
lawsuit over moose-vehicle collisions.
Justice Valerie Marshall rejected the government's claim in a
decision filed on Dec. 11.
Meanwhile, on Dec. 12, Judge Marshall gave the government another
day to prepare its argument on why a trial scheduled to start next
month should be delayed.
Judge Marshall appeared to be frustrated on Dec. 12 as the Crown
said it needs more time to prepare its case, and to retain two
more experts for its defense.
Judge Marshall asked the government to present on Dec. 13 its
suggestion for an alternate start to the trial. Arguments in the
class action suit are currently set to begin on Jan. 14.
Ches Crosbie, the St. John's lawyer whose firm is representing the
claimants, said the Dec. 11 ruling means that people who were
hospitalized between 2001 and 2009 are still included in the
litigation.
The government had wanted to reduce the period of eligibility to
just the two years before the suit was filed in 2011.
NORTHSHORE UNIVERSITY: Antitrust Suit Obtains Class-Action Status
-----------------------------------------------------------------
Andrew L. Wang, writing for Crain's Chicago Business, reports that
a federal judge has granted class-action status to an antitrust
lawsuit challenging NorthShore University HealthSystem's
acquisition of Highland Park Hospital, a ruling that potentially
exposes the health care system to hundreds of millions of dollars
in damages for allegedly jacking up prices.
U.S. District Court Judge Edmond Chang on Dec. 10 ruled that a
group of plaintiffs, including a painters union, met the legal
requirements to represent other patients and health plans, a key
turning point in the nearly seven-year legal battle.
At the heart of the case are plaintiffs' allegations that
NorthShore's acquisition of Highland Park in 2000 gave it unfair
power to set prices for medical care in the affluent northern
suburbs. In court filings, NorthShore has denied improperly
raising fees.
"We are confident there will be a rightful conclusion on this
matter," a NorthShore spokesman said in a statement. "In the
meantime, our focus remains right where it belongs -- on providing
patients access to the highest-quality care in the most efficient
way."
The ruling raises the stakes in a case filed in 2007 in federal
court in Chicago.
Among other findings, the plaintiffs' expert, Northwestern
University health economist David Dranove, estimated that Blue
Cross & Blue Shield of Illinois overpaid $110 million because of
the merger, a figure NorthShore disputes. The plaintiffs have not
specified the amount of damages they seek to recover.
Moreover, under the federal Clayton Antitrust Act, NorthShore
could be ordered to pay treble damages, or three times the
difference between NorthShore's allegedly elevated prices and what
it would have charged if the Highland Park merger had never
happened.
Before the ruling, the two sides held numerous settlement talks
but could not reach an agreement on monetary damages. By
certifying the class, the judge has likely given new urgency to
negotiations.
"We're grateful for (Mr. Chang's) in-depth analysis and hope that
it will advance the case toward resolution," said Mary Jane Fait,
the lead plaintiffs' lawyer.
Long History
The case has been going on so long that the system has changed its
name, from Evanston Northwestern Healthcare; added a fourth
hospital, Skokie Hospital; and rocketed to the third-largest
system in the Chicago area based on its $1.82 billion in total
revenue in fiscal 2013.
The acquisition of Highland Park, then an independent hospital,
drew the attention of federal antitrust regulators soon after it
closed. The Federal Trade Commission filed a complaint against
NorthShore in 2004, alleging the merger allowed the hospital
network to improperly raise prices at least 9 percent above
competitive prices.
The following year, an administrative law judge ruled that
NorthShore's market clout allowed it to improperly raise prices,
ordering that the merger be undone. On appeal in 2007, the FTC
also ruled the merger was anticompetitive, but instead of ordering
divestiture it required that Highland Park's contracts with
insurers be negotiated separately from those of Glenbrook and
Evanston hospitals, which also are part of the NorthShore system.
That didn't end the legal action there, however. Plaintiffs
Steven Messner, Amit Berkowitz, Henry Lahmeyer and the Aurora-
based Painters District Council No. 30 Health & Welfare Fund sued,
alleging damages from NorthShore's pricing.
U.S. District Judge Joan Humphrey Lefkow rejected the initial try
at certification on the basis that Mr. Dranove's analysis didn't
show that NorthShore's practices uniformly affected patients and
other payers, such as employer health plans.
The plaintiffs appealed and in January 2012 a federal appellate
court overturned Ms. Lefkow's ruling. Remarkably, the appellate
opinion indicates that Blue Cross disputed that it suffered
damages from NorthShore's pricing and that the state's largest
insurer did not wish to participate in the plaintiff class.
The case was sent back to the trial court. While the appeal was
pending, the case was reassigned to Mr. Chang.
The parties were due again in court Dec. 16.
NOVA SCOTIA HOME: Judge Allows Abuse Class Action to Proceed
------------------------------------------------------------
Michael Gorman, writing for The Chronicle Herald, reports that a
judge has ruled that a class action that former residents of the
Nova Scotia Home for Colored Children filed against the province
may go ahead, provided some amendments are made.
Justice Arthur LeBlanc of Nova Scotia Supreme Court released his
decision on Dec. 12, about five months after certification
hearings finished in July. But the decision could be moot if the
province, under the new Liberal government, reaches an out-of-
court settlement with the former residents, who are alleging
decades of severe sexual and physical abuse at the hands of the
home's former staffers.
Within a couple of weeks of taking office in October, Premier
Stephen McNeil signalled that he hoped such a deal could be made.
Meetings between provincial officials and Wagners, the Halifax law
firm representing the residents, have begun, but nothing about the
substance of the sessions has been made public.
Justice Minister Lena Diab said on Dec. 12 she hadn't yet spoken
to her staff about the court decision but reiterated that the
government intends to forge ahead with its attempt to settle out
of court. The province will also continue with its plan to hold a
public inquiry next year, she said in an interview.
"Our intention will not change," the minister said. "We will
still hold the inquiry in the spring."
Justice Diab also reinforced the premier's position of finding a
resolution outside the courts, a view she said she shares.
"The premier is very adamant that this is the route he wants to
take," she said. "I have concern for people who go through the
court system. I don't believe the court system is the best way to
resolve situations such as this.
"Our lawyers have already consulted with solicitors of the
victims. . . . There's no reason at this point in time to think
that we will not settle this outside of court."
Ray Wagner, the lead lawyer for the residents who has argued that
racism is at the core of the case, said the court ruling reflects
a desire to right many wrongs.
"The decision of Justice LeBlanc legitimizes the approach taken by
the McNeil government; that this is a legitimate case about real
people, about real harm, about real injuries, and trying to bring
us to a better place.
"It's a historic opportunity to address race and discrimination in
the province."
The Dexter government mounted a significant fight against the
proposed class action on several fronts, at one point trying to
have some or all of the alleged victims' statements to the court
struck.
While Justice LeBlanc's 94-page decision basically green-lights
the class action, he ruled that Wagners must reword a section of
its case alleging the province is legally responsible for
children's aid societies in Nova Scotia.
The judge said the plaintiffs' pleadings, "as they now stand, do
not adequately plead that the children's aid societies were agents
of the province, or that the home acted as a (children's aid
society).
"This finding does not foreclose any opportunity for the
plaintiffs to seek an amendment for the purpose of making the
pleading sufficient."
The province had argued that it would only be responsible for
those wards that provincial agents such as the societies placed
directly in the home. The residents' lawyers, however, had
contended that the province was responsible for all children in
the home.
But Justice LeBlanc said the province's responsibilities regarding
the societies appeared larger than Crown lawyers maintained in
court.
"The province's power over the children's aid societies in the
years after 1950 was, it seems to me, broader than the attorney
general would suggest," the judge wrote.
He also wants the lawyers to present a "refined" litigation plan
covering how the class action would proceed. The province had
argued that the plan the former residents' lawyers set out wasn't
workable when it was submitted to the courts.
In one section of his decision, Justice LeBlanc says a class
action route would be the most appropriate.
"As with many other institutional abuse cases, it is my view that
the relevant factors weigh in favor of the conclusion that a class
proceeding is the preferable procedure."
The judge noted that other individual legal claims by former
residents against the province, started in the early 2000s, hadn't
yet made it to trial.
Wagners has until March 31 to submit the changes. Justice LeBlanc
said the adjournment is permitted under the Class Proceedings Act.
The class action, if it goes ahead in the absence of a deal with
the McNeil government, would include residents who were wards of
the home from 1951 to 1990.
Those who were at the home before 1951 would still be included in
the action but would be limited to seeking what's known as
"declaratory relief." That means a judge could rule that the
government breached its duties but could not order the province to
pay damages.
If the two sides reach an out-of-court settlement, it would apply
to at least 1,050 people who were wards of the home during that
time period.
According to The Canadian Press, Premier Stephen McNeil has not
said how much the provincial government is willing to provide in a
settlement, but says he is willing to hold an inquiry into the
alleged abuse at the home.
About 150 former residents of the orphanage allege they were
sexually, physically and psychologically abused by staff over a
50-year period up until the 1980s, The Canadian Press discloses.
NTS REALTY: Settles Class Action Over Realty Capital Merger
-----------------------------------------------------------
NTS Realty Holdings Limited Partnership on Dec. 11 disclosed that
it has reached an agreement in principle with the plaintiffs to
settle the putative class action lawsuit entitled Dannis, Stephen,
et al. v. Nichols, J.D., et al., Case No. 13-CI-00452, pending
against the Company, NTS Realty Capital, Inc., the Company's
managing general partner, each of the members of the board of
directors of Realty Capital, NTS Realty Partners, LLC, NTS Merger
Parent, LLC and NTS Merger Sub, LLC in Jefferson County Circuit
Court of the Commonwealth of Kentucky. The proposed settlement
involves claims relating to the Company's previously proposed
merger with Merger Sub pursuant to that certain Agreement and Plan
of Merger among Parent, Merger Sub, Realty Capital and the Company
dated December 27, 2012. The special committee of Realty
Capital's board of directors previously terminated the Merger
Agreement on October 18, 2013.
The proposed litigation settlement was conditionally approved by
the Special Committee and the board of directors of Realty Capital
at separate meetings held on December 10, 2013. Under the
proposed litigation settlement, Merger Sub would merge with and
into the Company pursuant to a merger agreement. If the merger is
consummated, the Company would continue as the surviving entity,
and all of our limited partnership units, other than Units owned
by our founder and the Chairman of Realty Capital, J.D. Nichols,
the President and Chief Executive Officer of Realty Capital, Brian
F. Lavin, and certain of their affiliates, would be canceled and
converted automatically into the right to receive a cash payment
equal to $9.25 per Unit (less attorneys' fees and expenses of
plaintiffs' counsel, in an amount awarded by the Court, if any).
The proposed litigation settlement is subject to certain
conditions, including, among others,
-- negotiation and documentation of a definitive litigation
settlement agreement, including, as exhibits thereto, merger and
voting and support agreements;
-- receipt by Merger Sub of financing that is sufficient to pay
the merger consideration and related expenses of the transaction;
-- distribution of a definitive proxy statement to our
unitholders; and
-- approval by the Court.
The merger and related transactions are expected to be completed
in the first half of 2014. However, there can be no assurance
that the proposed litigation settlement will be approved by the
Court or that the merger will be consummated on the terms
described herein or at all.
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 will file a proxy statement and other documents regarding
the proposed merger with the SEC, and the definitive proxy
statement will be sent to unitholders seeking their approval of
the merger agreement 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 us, 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 us with the SEC at the SEC's web site at
http://www.sec.gov
The Company, Realty Capital and Realty Capital's directors,
executive officers and other members of its management and
employees (including Messrs. Nichols and 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 and Realty Capital is also included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2012,
which was filed with the SEC on March 22, 2013, 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
The Company 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 Memphis, 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."
OLD REPUBLIC: Judge Tosses Class Action Over Warranties
-------------------------------------------------------
Jeff Sistrunk, writing for Law360, reports that a California
federal judge has again tossed claims in a putative class action
accusing Old Republic Home Protection Co. of ripping off
homeowners who purchased its warranties, saying the named
plaintiff has still failed to support his allegations that the
company had a duty to disclose alleged unfair business practices.
In an order dated Dec. 6 and made public on Dec. 11, Judge Andrew
J. Guilford granted Old Republic's motion to dismiss two of six
claims in an amended complaint filed by named plaintiff Michael D.
Friedman. The judge ruled that Friedman has not presented any
evidence to support his fraud by concealment or promissory fraud
claims against the company.
Mr. Friedman alleges Old Republic lured homeowners into purchasing
its warranties with false promises, then ripped them off through
numerous unfair business practices.
"Plaintiff has not persuaded the court that a defendant has a duty
to disclose any of the practices alleged in the amended
complaint," Judge Guilford's order said.
Judge Guilford dismissed Mr. Friedman's fraud by concealment claim
with prejudice but allowed him to amend his complaint as to his
promissory fraud claim. The judge had previously dismissed both
those claims without prejudice in September.
Mr. Friedman has also hit Old Republic with claims of breach of
contract, breach of implied covenant of good faith and fair
dealing, and false advertising, but Old Republic didn't target
those claims in its motion to dismiss.
Mr. Friedman bought a warranty plan from Old Republic in July 2008
and renewed the policy for the next two years, according to court
documents.
Trouble with his home's air conditioner spurred Mr. Friedman to
file six claims for repairs and eventually request a replacement
unit, which also broke, according to the complaint. When he filed
another claim for repairs, Old Republic dropped him from its
coverage, Mr. Friedman alleged.
Mr. Friedman alleged Old Republic failed to disclose that it
maintained a "ranking system" providing its contractors with
incentives to recommend repairs rather than replacements of
covered items, or that consumers would have their claims evaluated
by "biased" contractors and experience significant delays in
service. Mr. Friedman also claimed the company failed to prevent
its contractors from charging plan owners excessive fees.
Judge Guilford said Mr. Friedman's fraud by concealment claim
fails because he didn't show that Old Republic had a duty to
disclose any of the alleged practices.
"Plaintiff cites no authority stating that a home warranty or
insurance company must disclose a system of compensating
contractors that results in 'bias,' or that a consumer might face
'significant delays,'" the judge wrote. "In the absence of any
authority holding this duty exists, the court is reluctant to
expand the required disclosures. This is especially so when the
disclosures sought by plaintiff are as subjective as whether a
contractor is biased.
In claiming promissory fraud, Mr. Friedman contended Old Republic
made false statements to induce homeowners to buy its warranty
products, including promising "qualified contractors," "unbiased
service," and "fair and reasonable rates." Judge Guilford
previously dismissed Mr. Friedman's promissory fraud claim when he
found the allegedly false statements were puffery, either not
capable of being false or not statements that a reasonable
consumer would rely upon, and he reiterated that position in the
Dec. 6 order.
"Defendant has not persuaded the court that any of the allegedly
false statements added to the amended complaint are the type that
a reasonable consumer would justifiably rely on and establish a
claim for promissory fraud," Judge Guilford wrote.
Representatives of the parties did not immediately respond to
requests for comment late on Dec. 11.
Mr. Friedman is represented by Francis A. Bottini Jr. of Bottini &
Bottini Inc. and Keith M. Cochran -- kcochran@cftriallawyers.com
-- of Chapin Fitzgerald LLP.
Old Republic is represented by Tammy H. Boggs -- tboggs@foley.com
-- and Jay N. Varon -- jvaron@foley.com -- of Foley & Lardner LLP.
The case is Michael Friedman et al. v. Old Republic Home
Protection Co., case number 5:12-cv-01833, in the U.S. District
Court for the Central District of California.
PUC SERVICES: May Face Class Action Over Brown Water Issues
-----------------------------------------------------------
Kenneth Armstrong, writing for SooToday.com, reports that local
resident Mark Brown has been taking PUC Services Inc. to task
recently regarding brown water issues in the east end of Sault
Ste. Marie and claiming a general lack of customer service on the
part of the utility. Mr. Brown has been gathering support for a
class action lawsuit to recover costs he claims are associated
with the problems.
"I have organized this because people need to be aware that they
are not powerless in dealing with large monopolies, like the PUC,
especially the ones who are charged with the responsibility of
providing us with drinkable water," says Mr. Brown.
A class action lawsuit allows multiple plaintiffs to resolve their
claim in one single proceeding and eliminates the need to have
repetitive cases being heard by the courts.
"The intended benefit of a class proceeding is, essentially,
efficiency" says Christian Provenzano of Provenzano Law, who are
not involved in this action. "If a number of people have a common
issue with a specific party, they can raise the issue
collectively. Instead of multiple actions (law suits) that will
determine whether a specific party is liable to each person, the
class action legislation allows you to bring one action to
determine if that party is liable to the entire group."
Mr. Provenzano is speaking about class action lawsuits in general
and not about this specific case. He has been involved in other
class action cases throughout his career.
Individuals involved in a class action suit should all have a
common claim, in this case the cost of water filtration and usage
costs associated with running taps to clear the pipes.
For any case to be considered a class action it requires an Order
for Certification from the court, which will determine if there is
an identifiable class (group) and there is a cause of action
(case).
"That is an additional legal process and it costs money. It can
also be quite a lengthy and complicated process depending on the
nature of the claim and the group of people involved in it. If
you are not successful, there is risk of greater costs awarded
against you," says Mr. Provenzano.
Many people who enter into a class action lawsuit may not be aware
that in Ontario, should they lose their case, the representative
plaintiff is required to pay a portion of the legal fees of the
defense.
This can be a great risk when trying to win a case against a large
corporation or government, as the legal fees they accrue can reach
into the tens or hundreds of thousands of dollars or more over the
life of a case.
For example, in a 2011 case which involved three Ontario residents
taking on ScotiaBank, TD Bank and BMO, the banks were seeking
$810,000 in legal costs from the litigants. In that case, the
plaintiffs hadn't even gotten the case to court, the judge had
thrown out the Order of Certification and refused to have it heard
as a class action.
In the end, the court required the plaintiffs to pay $175,000 in
costs to the banks.
If this judgment was split evenly, that is almost $60,000 a person
to be paid by the litigants.
"I would make sure that the client understands the entire process
involved in starting a class action. I would make sure that they
understand that it can be quite lengthy and time consuming," says
Mr. Provenzano.
Mark Brown has been in contact with Siskinds LLP, a London,
Ontario law firm who were considering taking on the class action
against the PUC. All class members may be required to share the
risk, depending on how the documents are presented by the counsel
of the plaintiff, especially because currently there appears to be
no representative plaintiff.
"My name will not be on the Class Action lawsuit. I have received
drinkable water from the PUC for about two years now," says
Mr. Brown.
What isn't clear is whether the possibility of having to pay PUC's
legal fees is worth the risk to dissatisfied customers compared
with being awarded the cost of filtration and usage fees.
THOMPSON BUILDING: Gets OSHA Citation for Asbestos Exposure
-----------------------------------------------------------
The U.S. Department of Labor's Occupational Safety and Health
Administration has cited Thompson Building Wrecking Co. Inc.,
based in Augusta, for four violations after exposing workers to
asbestos during demolition at the Grovetown Elementary School in
Grovetown. OSHA initiated the July inspection after receiving a
complaint. Proposed penalties are $63,700.
"Although the employer was aware of the presence of asbestos-
containing material and familiar with its hazards, no preventive
action was taken to protect employees," said Bill Fulcher,
director of OSHA's Atlanta-East Area Office. "It is the
employer's responsibility to provide a safe and healthful
workplace."
One willful citation, with a $49,000 penalty, was issued for
knowingly exposing workers to asbestos-containing material by a
skid steer loader with a grapple attachment to remove debris from
scrap metal. The debris contained asbestos material and was
allowed to accumulate on the ground. A willful violation is one
committed with intentional, knowing or voluntary disregard for the
law's requirements, or with plain indifference to worker safety
and health.
Three serious violations were also cited, with $14,700 in
penalties, for the employer's failure to conduct asbestos work,
and its removal, within a regulated area to minimize exposure; not
monitoring exposure levels during removal of asbestos-containing
material; and exposing workers to inhalation hazards from unbagged
asbestos-containing material. A serious violation occurs when
there is substantial probability that death or serious physical
harm could result from a hazard about which the employer knew or
should have known.
Thompson Building Wrecking specializes in demolition, asbestos
removal and large container services. The company has 15 business
days from receipt of the citations and proposed penalties to
comply, request a conference with OSHA's area director, or contest
the findings before the independent Occupational Safety and Health
Review Commission.
To ask questions, obtain compliance assistance, file a complaint,
or report workplace hospitalizations, fatalities or situations
posing imminent danger to workers, the public should call OSHA's
toll-free hotline at 800-321-OSHA (6742) or the agency's Atlanta-
East Area Office at 770-493-6644.
Under the Occupational Safety and Health Act of 1970, employers
are responsible for providing safe and healthful workplaces for
their employees. OSHA's role is to ensure these conditions for
America's working men and women by setting and enforcing
standards, and providing training, education and assistance.
U.S. STEEL: Defends Antitrust Class Action Lawsuits in Illinois
---------------------------------------------------------------
United States Steel Corporation is vigorously defending class
action lawsuits alleging conspiracy to violate antitrust laws,
according to the Company's Form 10-Q filed on October 29, 2013,
with the U.S. Securities and Exchange Commission for the quarterly
period ended September 30, 2013.
In a series of lawsuits filed in federal court in the Northern
District of Illinois beginning September 12, 2008, individual
direct or indirect buyers of steel products have asserted that
eight steel manufacturers, including U. S. Steel, conspired in
violation of antitrust laws to restrict the domestic production of
raw steel and thereby to fix, raise, maintain or stabilize the
price of steel products in the United States. The cases are filed
as class actions and claim treble damages for the period 2005 to
present, but do not allege any damage amounts. U.S. Steel is
vigorously defending these lawsuits and does not believe that it
is probable a liability regarding these matters has been incurred.
U.S. Steel is unable to estimate a range of possible loss at this
time.
United States Steel Corporation (U.S. Steel) produces and sells
steel mill products, including flat-rolled and tubular products,
in North America and Europe. Operations in North America also
include iron ore and coke production facilities, transportation
services (railroad and barge operations) and real estate
operations. U.S. Steel has three reportable operating segments:
Flat-rolled Products (Flat-rolled), U.S. Steel Europe (USSE) and
Tubular Products (Tubular). An integrated producer uses iron ore
and coke as primary raw materials for steel production. U.S. Steel
has annual raw steel production capability of 31.7 million net
tons (tons) (24.3 million tons in North America and 7.4 million
tons in Europe). On January 31, 2012, it sold U.S. Steel Serbia
d.o.o. (USSS). On February 1, 2012, U.S. Steel completed the sale
of the majority of the operating assets of Birmingham Southern
Railroad Company, as well as the Port Birmingham Terminal.
UNITED STATES: 9th Circuit Takes New Look at DNA Collection
-----------------------------------------------------------
Dave Tartre, writing for Courthouse News Service, reports that
opponents of California's mandatory DNA collection statute told an
en banc panel of the 9th Circuit that the law violates the
constitutional rights of people who are arrested but never
charged.
The 9th Circuit, which has reviewed the law twice already, was
prompted to take a third look by a US Supreme Court ruling in June
that upheld the constitutionality of a similar law passed by
Maryland voters.
Elizabeth Haskell, who was arrested at a 2009 peace rally for
allegedly obstructing a police officer, challenged the law, which
requires anyone arrested or charged with a felony to submit to DNA
sampling. Her class action lawsuit claims that the sampling
constitutes an illegal seizure of genetic information and violates
her due process rights. She says that police told her she would
be charged with a separate misdemeanor when she refused to let
authorities swab the inside of her cheek, the typical method
officers use to collect DNA.
Voter-approved Proposition 69 casts the net too broadly, she
alleges, by mandating DNA collection from people arrested for
"many offenses for which their DNA has no conceivable relevance,"
from writing bad checks to cocaine possession."
A three-judge panel of the 9th Circuit initially upheld the law in
February 2012, and an 11-judge en banc panel of the 9th Circuit
reheard the case in September 2012. But before larger panel could
issue a new opinion, the US Supreme Court ruled there was nothing
unconstitutional about a similar law in Maryland. That ruling,
Maryland v. King, prompted the 9th Circuit to schedule a third
hearing of Haskell's case.
During the hearing, Circuit Judge Milan Smith, who wrote the
original 9th Circuit ruling in support of the law, said that his
reading of Supreme Court Justice Antonin Scalia's dissent in the
King decision was that the Supreme Court had endorsed the
collection and entry of DNA into a national database. He quoted
Justice Scalia: "As an entirely predictable consequence of [the
King decision] your DNA can be taken and entered into a national
DNA database if you are ever arrested, rightly or wrongly, and for
whatever reason."
ACLU attorney Michael Risher responded that, "The fundamental
distinction between this case and King goes not to the seriousness
of the offense, the fundamental distinction here is that
California is taking DNA from people who are never charged with a
crime or who are discharged for want of probable cause."
"I believe that under King, DNA should only be taken from those
people who are actually charged with an offense," Risher said,
adding that he appreciated that the state may want to collect DNA
in case someone fails to appear at court, but that the state's
interest in tracking down bail-jumpers was "not weighty enough to
justify taking it at booking."
"Here's the rule I'm asking for," he said, "California can take
DNA from people it arrests for a serious offense. It cannot do
anything with that DNA unless there is a prosecution and a
judicial finding of probable cause. Absent one of those or
charges are dismissed, it should destroy the evidence and expunge
the profile."
But Circuit Judge Smith said fingerprints, which are kept in a
state database, are no different than DNA. Risher countered that
DNA collection is far more invasive, invoking stronger 4th
Amendment protections, and it can be used to create maps of family
relations.
Chief Judge Alex Kozinski said that whether DNA data taken from
people who have been later acquitted should be expunged was
"another case for another day."
He said that the expungement issue made Risher's class of
plaintiffs "too broad," as some class members have not been
acquitted and they would not be entitled to have their records
expunged.
"How can we have relief that's afforded to a class when you
yourself admit that some in your class won't get the relief?"
Kozinski asked.
Risher said the 9th Circuit could tell the district court to issue
an injunction to limit the state's implementation of the statute.
California Deputy Attorney General Enid Camps said the Supreme
Court's ruling on the Maryland law was "broad and unequivocal."
Circuit Judge Richard Paez quickly pointed out to Camps that the
Maryland law calls for DNA sampling to occur after a judicial
determination of probable cause, while police in California could
take a swab sample from an arrestee during booking and then decide
to release that person from detention.
Kozinski then told Camps that the Supreme Court had not dealt with
situations where a sample was taken before judicial probable cause
had been determined.
When someone is arrested and booked, the state is still in the
process of collecting information used in charging, Camps said,
and "DNA at booking is the functional equivalent of fingerprints
and that's what the [Supreme Court] recognized."
Circuit Judge N. Randy Smith said California's law is "quite
opposite" from Maryland's since it does not call for the automatic
destruction of DNA records when criminal charges are unsupported.
"In fact, even if someone wants to have his DNA sample destroyed,
he must send a request to the court, the DNA laboratory and the
prosecuting attorney," he said, adding that the court has the
discretion to expunge and its decision cannot be appealed.
Camps said California's law is not unconstitutional since it
provides an avenue for expungement, which she said takes two to
four weeks.
Camps downplayed the differences between the DNA collection laws
in Maryland and California, insisting that Justice Kennedy wrote
"an intentionally broad opinion" that would be applied to "set a
national standard."
Circuit Judge Harry Pregersen disagreed, calling California's DNA
law "very extreme" in comparison to Maryland's, which he said
protects privacy, insists on probable cause and requires that a
DNA sample be destroyed should the person not be prosecuted.
In California, he said your DNA and all the information it
contains could be collected more easily. "You can arrest people
who are joyriding and book them as a felon and it may turn out
they are convicted of a misdemeanor," he said.
Maryland, like any state, can enact laws that go beyond the 4th
Amendment protections against search and seizure, Camps responded,
but such laws do not obligate California to enact similarly
enhanced protections.
The Plaintiffs-Appellants are represented by:
Peter C. Meier, Esq.
PAUL HASTINGS LLP
55 Second Street, 24th Floor
San Francisco, CA 94105
Telephone: (415) 856-7000
E-mail: petermeier@paulhastings.com
- and -
Michael Temple Risher, Esq.
AMERICAN CIVIL LIBERTIES UNION FOUNDATION
39 Drumm Street
San Francisco, CA 94111
Telephone: (415) 293-6373
The Defendants-Appellees are represented by:
Enid Camps, Esq.
Deputy Attorney General
AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL
455 Golden Gate Avenue
San Francisco, CA 94102-7004
Telephone: (415) 703-5976
The appellate case is Elizabeth Haskell, et al. v. Kamala D.
Harris, et al., Case No. 10-15152, in the United States Court of
Appeals for the Ninth Circuit. The original case is Elizabeth
Haskell, et al. v. Kamala D. Harris, et al., Case No. 3:09-cv-
04779-CRB, in the U.S. District Court for the Northern District of
California, San Francisco.
UNITED STATES: Labor Dept Delayed Pay Adjustments, Suit Claims
--------------------------------------------------------------
Courthouse News Service reports that the Secretary of Labor
illegally delayed prevailing-wage pay adjustments for tens of
thousands of H-2B visa workers, a class action claims in
Pennsylvania Federal Court.
VOLVO: Seeks Permission to Appeal Class Action Ruling
-----------------------------------------------------
Jenna Reed, writing for glassBYTEs.com, reports that Volvo is
seeking permission to appeal from the Third Circuit Court of
Appeals after a New Jersey U.S. District Court judge denied the
automaker's motion to reconsider a six-state class-action
certification. The plaintiffs in the lawsuit allege there is a
defect in the automaker's sunroofs, which allegedly allows water
to flood their vehicles.
Plaintiffs' attorneys claim, "Volvo now effectively seeks to
re-litigate the class certification issue for a fourth time, this
time by filing a petition for leave to pursue an interlocutory
appeal under Fed. R. Civ. P. 23 (f)."
Volvo is seeking the appellate court's permission for an appeal
while the case is still ongoing in at the District Court level.
The District Court has stayed discovery while awaiting the
appellate court's decision.
"While apparently unhappy with the District Court's decisions,
Volvo's motion does not identify a single legal or factual error
made by the court. Nor does it demonstrate that it has satisfied
any of the criteria . . . that would make it appropriate for the
court to grant such a rare Rule 23(f) interlocutory appeal,"
plaintiffs' attorneys claim.
Plaintiffs' attorneys ask the court to deny Volvo's petition for
appeal.
In response, Volvo's attorneys claim the District Court "did not
conduct the required rigorous analysis" before certifying a class.
"Although Volvo does not dispute that the task before the District
Court was large, unfortunately for Volvo and this [appellate]
court, the order itself does not contain the analysis that
plaintiffs imply the District Court conducted," Volvo's attorneys
claim in court papers.
"Plaintiffs say that Volvo's criticism of the District Court's
predominance analysis as cursory is 'unpersuasive' and 'brash.'
It is the Supreme Court, however, not Volvo, that requires a class
certification analysis to begin 'with elements of the underlying
cause of action,'" attorneys went on to claim.
In denying Volvo's motion to reconsider the class-action lawsuit,
the District Court judge issued an opinion that the sunroof case
could not be compared to Comcast Corp. versus Behrend. Volvo's
attorneys argue for a reversal of this decision.
"Comcast requires reversal of the District Court's certification
order because the record contains no evidentiary proof of class-
wide injury," Volvo's attorneys claim.
Moreover, the automaker's attorneys claim the sunroof drainage
component "functioned precisely, and for as long, as Volvo
warranted it would."
"Certifying classes full of uninjured members not only violates
settled law and provides a windfall to the uninjured, it
constitutes bad economic and social policy," Volvo's attorneys
claim. ". . . For the foregoing reasons, this court should grant
Volvo leave under Rule 23(f) to file an appeal from the District
Court's erroneous certification order."
The appellate court had not issued a decision at press time.
The class action lawsuit covers Massachusetts, Florida, Hawaii,
New Jersey, California and Maryland.
The plaintiffs contend the "defect" sunroofs are on Volvo's S40,
S60, S80, V50 (model years 2004 to present), XC90 (model years
2003 to present) and V50 (model years 2005 to present).
"Plaintiffs allege that the sunroof drainage systems in these
vehicles harbored a defect which allows water to become entrapped
within the passenger compartment floorplans, causing damage to
the vehicles, including interior components, carpets and safety-
related electrical sensors and wiring," according to the court
documents.
The suit was filed in New Jersey U.S. District Court by Joanne
Neale of Needham, Mass., and seven other owners.
YELP INC: Awaits Ninth Circuit Decision on Class Action Appeal
--------------------------------------------------------------
In its Form 10-Q filed on October 29, 2013, with the U.S.
Securities and Exchange Commission for the quarterly period ended
September 30, 2013, Yelp Inc., disclosed that it is still waiting
for a decision from the U.S. Court of Appeals for the Ninth
Circuit regarding a plaintiffs' appeal of a consolidated class
action.
The Company states: "In February and March 2010, we were sued in
two putative class actions on behalf of local businesses asserting
various causes of action based on claims that we manipulated the
ratings and reviews on our platform to coerce local businesses to
buy our advertising products. These cases were subsequently
consolidated in an action asserting claims for violation of the
California Business & Professions Code, extortion and attempted
extortion based on the conduct they allege and seeking monetary
relief in an unspecified amount and injunctive relief. In October
2011, the court dismissed this consolidated action with prejudice.
The plaintiffs have appealed to the U.S. Court of Appeals for the
Ninth Circuit, which heard the appeal on July 11, 2013. The Ninth
Circuit has not yet issued a decision. Accordingly, we are
currently unable to reasonably estimate either the probability of
incurring a loss or an estimated range of such loss, if any, from
this appeal.
"Qype, our indirect wholly-owned subsidiary, is party to a lawsuit
regarding fees payable for directory data that Qype and its
predecessor purchased from Deutsche Telekom AG ("Deutsche
Telekom") between 2005 and 2008 at a rate set by the German
Federal Network Agency ("FNA"). Following German court decisions
overturning the rate set by the FNA, Deutsche Telekom sued Qype in
the Regional Court of Bonn on August 26, 2010 for approximately
EUR1.5 million plus interest for additional fees for data
delivered between 2005 and 2008 (the "2010 Claim"). In August
2011, the court rejected Deutsche Telekom's claim in full and
Deutsche Telekom appealed the decision to the Higher Regional
Court of Cologne, which referred the appeal to the Higher Regional
Court in Dsseldorf in July 2012. Following a hearing in April
2013, the Higher Regional Court denied Deutsche Telekom's appeal,
although Deutsche Telekom may challenge this decision. In August
2013, Deutsche Telekom filed a claim against Qype in the Regional
Court of Cologne seeking approximately EUR441,900 in additional
data service fees, plus interest, for data delivered in 2009. Qype
has requested that the Regional Court stay proceedings in this
case pending final resolution of the 2010 Claim.
"In addition, we are subject to legal proceedings arising in the
ordinary course of business. Although the results of litigation
and claims cannot be predicted with certainty, we currently do not
believe that the final outcome of any of these matters will have a
material adverse effect on our business, financial position,
results of operations or cash flows."
Yelp Inc. connects people with great local businesses. Its users
have contributed a total of approximately 36.0 million cumulative
reviews of almost every type of local business, from restaurants,
boutiques and salons to dentists, mechanics and plumbers. Its
platform provides local businesses with a range of free and paid
services, which help them to engage with consumers at moment when
they are deciding where to spend their money. The Company
generates revenue from local advertising, brand advertising and
other services. Its products portfolio includes local business,
national/brand advertisers and transaction partners. As of
December 31, 2012, the Company was active in 53 Yelp markets in
the United States and 44 Yelp markets internationally. Effective
July 18, 2013, Yelp Inc acquired SeatMe Inc, which is a developer
of restaurant and nightlife categories reservation applications.
* Class Members Rarely Benefit From Class Actions, New Study Shows
------------------------------------------------------------------
Archis A. Parasharami, Esq. -- aparasharami@mayerbrown.com -- and
Kevin S. Ranlett, Esq., at Mayer Brown report that proponents of
class actions often contend that these lawsuits deliver
substantial benefits to class members. But while media coverage of
class actions often suggests that class members are receiving
millions of dollars in relief, most practitioners in the class
action arena know that the reality is quite different. That said,
to date there has been little empirical information on the
practical results of class actions.
My colleagues and I have sought to change that. At the request of
the U.S. Chamber's Institute for Legal Reform, a team of Mayer
Brown lawyers (including Andy Pincus and me) have produced a study
detailing how consumer and employee class actions filed in 2009
actually fared in practice. The bottom line: of the class actions
we studied, only a few cases delivered tangible benefits to more
than a small fraction of class members.
A copy of the study is available at http://is.gd/AUN18t
It has already received press coverage in Forbes and Reuters' On
the Case blog.
What did the study entail? We undertook an empirical analysis of a
neutrally-selected sample set of 148 consumer and employee class
action lawsuits filed in or removed to federal court in 2009. (The
study explains our methodology in detail.)
Here are our key findings:
In our entire data set, not one of the class actions ended in
a final judgment on the merits for the plaintiffs. And none of
the class actions went to trial, either before a judge or a jury.
The vast majority of cases produced no benefits to most
members of the putative class -- even though in a number of those
cases the lawyers who sought to represent the class often enriched
themselves in the process (and the lawyers representing the
defendants always did).
Approximately 14 percent of all class action cases
remained pending four years after they were filed, without
resolution or even a determination of whether the case could go
forward on a class-wide basis. In these cases, class members have
not yet received any benefits -- and likely will never receive
any, based on the disposition of the other cases we studied.
Over one-third (35%) of the class actions that have been
resolved were dismissed voluntarily by the plaintiff. Many of
these cases settled on an individual basis, meaning a payout to
the individual named plaintiff and the lawyers who brought the
suit -- even though the class members receive nothing.
Information about who receives what in such settlements typically
isn't publicly available.
Just under one-third (31%) of the class actions that have
been resolved were dismissed by a court on the merits -- again,
meaning that class members received nothing.
One-third (33%) of resolved cases were settled on a class
basis.
This settlement rate is half the average for federal court
litigation, meaning that a class member is far less likely to have
even a chance of obtaining relief than the average party suing
individually.
For those cases that do settle, there is often little or
no benefit for class members.
What is more, few class members ever even see those paltry
benefits -- particularly in consumer class actions.
Unfortunately, because information regarding the distribution of
class action settlements is rarely available, the public almost
never learns what percentage of a settlement is actually paid to
class members. But of the six cases in our data set for which
settlement distribution data was public, five delivered funds to
only miniscule percentages of the class: 0.000006%, 0.33%, 1.5%,
9.66%, and 12%. Those results are consistent with other available
information about settlement distribution in consumer class
actions.
Although some cases provide for automatic distribution of
benefits to class members, automatic distribution almost never is
used in consumer class actions -- only one of the 40 settled cases
fell into this category.
Some class actions are settled without even the potential
for a monetary payment to class members, with the settlement
agreement providing for payment to a charity or injunctive relief
that, in virtually every case, provides no real benefit to class
members.
In short, our study reveals that class actions do not provide
class members with anything close to the benefits claimed by their
proponents. The only real winners are the lawyers (both on the
plaintiffs' and the defense side, to be sure.) Thus, while courts,
policymakers, and members of the public often assume that class
actions do a great job delivering benefits to class members, our
study reveals that such class actions are the exception, not the
rule.
* Makers of Tainted Dietary Supplements Have Criminal Records
-------------------------------------------------------------
Alison Young, writing for USATODAY.com, reports that like many
pills and powders sold as dietary supplements, Dr. Larry's
Tranquility pills were not what they seemed.
And neither was Dr. Larry.
The pills promised insomniacs a great night's sleep with an all-
natural blend of ingredients such as figwort root and licorice.
Then, earlier this summer, these particular pills -- out of an
estimated 85,000 supplement products on the market -- happened to
get tested in a lab by regulators from the U.S. Food and Drug
Administration. The agency is budgeted to run just 1,000 tests a
year in its limited oversight of the $30 billion industry.
The tests showed Tranquility was spiked with two powerful
prescription drugs: an anti-psychotic medication best known as
Thorazine, and the anti-depressant and sleep medication called
doxepin.
Research by USA TODAY shows that Larry LeGunn is a convicted
criminal and not a licensed doctor. He's a former chiropractor
who had to give up his Florida license in 2010 after being charged
with grand theft and insurance fraud relating to his treatment of
auto accident victims, according to court and licensing records.
Mr. LeGunn ultimately pleaded no contest to an amended charge of
misleading solicitation of payments.
Far from an isolated case, a USA TODAY investigation finds that a
wide array of dietary supplement companies caught with drug-spiked
products are run by people with criminal backgrounds and
regulatory run-ins. Consumers buying products from these firms
are in some cases entrusting their health and safety to people
with rap sheets for crimes involving barbiturates, crack cocaine,
Ecstacy and other narcotics, as well as arrests for selling or
possessing steroids and human growth hormone. Other supplement
company executives have records of fraud, theft, assault, weapons
offenses, money laundering or other offenses, the investigation
shows.
Jeffrey Bolanos, who runs Beamonstar Products in Queen Creek,
Ariz., has twice been convicted on drug charges, most recently in
a 2008 case that notes possession of crack cocaine and a relapse
with methamphetamines, court records show.
In May, his company, which has received industry awards for its
sexual enhancement supplements, recalled three supposedly all-
natural products after FDA tests found that two contained
tadalafil, the medication in the prescription erectile dysfunction
drug Cialis. The third was potentially spiked. One of
Beamonstar's tainted supplements was marketed for women.
Mr. Bolanos had no comment.
Martin McDermott, president of Kilo Sports in Phoenix, was
indicted in 2004 with three felony counts of dangerous drug
possession involving the steroid boldenone and testosterone, and
one felony count of possession of prescription drugs, specifically
human growth hormone, for sale. He later pleaded guilty to a
misdemeanor count of possession of drug paraphernalia and received
probation.
In 2009, three Kilo Sports products were recalled for ingredients
the FDA said should be classified as steroids. The company
recalled another supplement in 2010 because of concerns it
contained an anti-estrogen drug. McDermott didn't respond to
interview requests.
Barry Nevins, who runs DrBarrysVitamins.com, isn't really a doctor
and under an agreement with prosecutors isn't supposed to
represent himself as one in his vitamin store. Yet as recently as
this week, his website touted "Dr. Barry" -- whose only Florida
health care license was as a massage therapist -- as "a leading
formulator, developer and manufacturer of natural
pharmaceuticals."
In 2011, Mr. Nevins was charged with unlicensed practice of the
health care profession, a felony, records show. While facing
those charges, FDA tests found one of Barry's Vitamins & Herbs'
products, Virility Max, was secretly spiked with a drug that's a
chemical cousin to Viagra. Prosecutors in Palm Beach County, Fla.,
said they are now reviewing the website to determine whether
Nevins has violated a deferred prosecution agreement reached in
March in the 2011 case. Mr. Nevins declined to be interviewed.
Jay Cohen, CEO of IQ Formulations, was arrested on a charge of
aggravated assault with a deadly weapon in 2008 for wielding a
machete and striking the driver's side mirror of a teenager's car
parked outside Mr. Cohen's home blaring music, police and court
records show. Mr. Cohen, who told USA TODAY he was protecting his
family, pleaded no contest in 2010 to assault and received
probation.
In November, IQ Formulations recalled its Hydravax weight-loss
supplement after the FDA told the company it contained a
prescription-only diuretic drug. A company spokesman said the
recall was the result of a supplier providing a tainted
ingredient.
USA TODAY scrutinized about 100 companies that have been caught
selling supplements secretly spiked with drugs and potentially
dangerous chemicals since 2007. The examination found that at
least 14 were run by people with criminal records beyond traffic
infractions. The newspaper researched corporation records to
identify the company executives and owners, then examined police,
court and professional licensing records, ordering files from
across the country to determine what they had done in the past.
There are likely many more supplement company executives with
criminal records. The FDA's tainted-supplements database lists
123 companies that have been caught selling about 460 spiked
products in the past six years, but the corporate records of
nearly three dozen of the companies couldn't be located. For
about 150 spiked products, the FDA's database doesn't list a
manufacturer, in many cases because it was unclear to the agency
who made them. And many companies selling sketchy products aren't
listed in the FDA's database.
Supplement executives with criminal records who granted interviews
generally said their pasts had nothing to do with their ability to
make good supplements and they often blamed suppliers for putting
drugs in their products without their knowledge.
"China will lie, just lie and tell you it's all herbal and they
slip in a little trace of something," Mr. LeGunn said, adding that
he no longer has supplements made there.
But most didn't respond to interview requests or refused to talk
about their backgrounds.
"I'm not going to discuss anything. I have the right to remain
silent," said Gisselle Lopez, a partner in Svelte 30 Nutritional
Consultants LLC in Kissimmee, Fla., when a reporter asked about a
2003 theft conviction and why her staff referred to her as "Dr.
Gisselle." Florida records don't show her as having a medical
license. Her company recalled one of its weight loss supplements
in 2011 after FDA tests showed it was spiked with sibutramine, the
active ingredient in the prescription weight loss drug Meridia
that was pulled off the U.S. market because of heart attack and
stroke risks.
'A TALE OF TWO INDUSTRIES'
USA TODAY's ongoing investigation has shown that consumers of
tainted diet supplements have paid dearly in some cases, suffering
side effects ranging from severe bleeding and dangerous effects on
diabetes control to liver damage, strokes and death. Athletes
have had their sports careers jeopardized after testing positive
for ingredients laced into sports supplements.
Dallas-based USPlabs has been linked to a recent outbreak of
serious liver injury cases among people taking its OxyElite Pro
weight-loss supplement. Its CEO, Jacob Geissler, has a criminal
history involving anabolic steroids and has clashed repeatedly
with the FDA. USPlabs recalled OxyElite Pro in November. Until
recently, Mr. Geissler served on the board of trustees of the
American Herbal Products Association, a major industry trade
group.
Driven Sports Vice President Matt Cahill, whose pre-workout powder
Craze has been found by teams of scientists to contain a
methamphetamine-like compound, is a convicted felon with a history
of putting risky products on the market. Craze was named 2012's
"New Supplement of the Year" by Bodybuilding.com, a major online
retailer of sports supplements.
"All industries are going to have people with criminal problems in
their background," said Steve Mister, president of the Council for
Responsible Nutrition, a supplement industry trade group that
lists major corporations such as Procter & Gamble, Bayer
HealthCare and Abbott Nutrition among its members.
Histories of financial fraud or violent behavior may not have much
relevance when it comes to making supplements, Mr. Mister said.
"But I do think when you talk about people with a history of
criminal convictions with controlled substances and illicit drugs,
and they are making products where they have the opportunity to
bring that prior background into their product, that is
concerning."
"It is unfortunately a tale of two industries. There's a
mainstream, responsible industry," Mr. Mister said of the
supplement business. "Then there is this sort of shadow industry,
the smaller guys playing around the fringes. The problem is how
we distinguish between the two."
WHAT CAN BE DONE ABOUT IT
Under the Dietary Supplement Health and Education Act of 1994,
known by the acronym DSHEA, the FDA must show that a product is
unsafe before it can take any action to restrict its use or seek
its removal from the market. Nutritional supplements such as the
vitamins, minerals, protein powders and herbal blends used by more
than half of Americans are treated like foods and assumed to be
all-natural and safe -- unless proven otherwise. Although
supplements are often sold and used as remedies for various
conditions, they aren't required to prove their safety and
effectiveness before being put on the market, as is required with
medications.
"Supplements are under-regulated by the FDA," said June Rogers,
director of drug program and policy at the NFL Players
Association, whose members are tested for a variety of
performance-enhancing drugs. "Anyone is allowed to go out and
make a supplement and basically sell it until the FDA comes
knocking at your door. But before that happens, there's a lot of
profits to be made."
Loren Israelsen, a top supplement industry association official
who is credited as a key architect behind the DSHEA supplement
law, said that 20 years ago nobody envisioned the kinds of rogue
players, advanced chemistry and drug-spiked products being seen
today.
"It is so counterintuitive and opposite to the really fundamental
principles of what this industry is about that we probably didn't
fully recognize it because it was so not a part of us,"
Mr. Israelsen, president of the United Natural Products Alliance,
said in an interview this week.
Mr. Israelsen was convicted in 1997 of conspiracy to defraud the
United States, for a scheme that involved falsifying documents to
import evening primrose oil despite an FDA ban on its importation.
The documents falsely declared that the shipments were such things
as "Vitamin E" to avoid seizure and sought to conceal that Health
Products International was the company importing the material,
federal records show.
During the conspiracy, Israelsen was a vice president and general
counsel at Health Products International, which he described as
the manufacturing arm of Nature's Way, where he also was a top
executive. He said his actions should be viewed in the context of
a time when the industry felt the FDA was taking overzealous and
unjustified actions against natural products.
"I was much younger and breathing more fire," he said. "In
retrospect, would we do it that way again? No."
Mr. Israelsen said there's a difference between standing up for
evening primrose oil and supplement company executives fighting
the FDA over substances with questionable chemical origins. He
said recent media coverage of supplement makers like Cahill and
Mr. Geissler and their potentially dangerous products has altered
the way the industry views calls for additional regulation.
"It has been fundamental. Things have changed. That's a
reality," Mr. Israelsen said. "We have to just look at where we
are and what needs to be done to best address it -- because it's
in our best interest to address it."
In what could be considered an important conciliation for his
industry, Mr. Israelsen said he's open to having discussions about
whether new tools are needed to make it easier and faster for the
FDA to take action.
In the past, the industry has opposed and defeated legislation
that would require supplements to be registered with the FDA,
arguing that criminals wouldn't register and that good companies
would be overly burdened.
But Mr. Israelsen says he now thinks it's possible that requiring
registration could give the FDA a "faster, easier way to say
they're not in compliance."
A bill reintroduced this summer by Sen. Dick Durbin, D-Ill., and
Sen. Richard Blumenthal, D-Conn., would require supplement firms
to register products with the FDA within 30 days after being
marketed, including providing a description of each product, its
ingredients and a copy of the label.
Other supplement industry trade groups emphasize that better
enforcement would address the industry's bad actors. Under
existing laws, any person who markets a supplement that violates
the law can be found guilty of a misdemeanor punishable by up to a
year in jail and $1,000 in fines, notes the Council for
Responsible Nutrition.
Such criminal cases appear to be rare, however, and they can take
years and can involve more complex felony charges. The FDA has so
far not provided data, requested under the Freedom of Information
Act, on how often the agency has sought criminal prosecution of
supplement makers.
"More executives should be subject to these misdemeanor cases,"
said Mister, who heads the council. "That would send a very
strong message to the industry."
Supplement makers also can be subject to individual and corporate
fines of up to $500,000 for a series of violations in a case,
Mr. Mister noted. "If you don't have a cop watching the speed
limit, people will speed."
Daniel Fabricant, director of the FDA's dietary supplements
division, said: "We're doing all we can with the tools we have."
He noted that limited resources at the agency are a factor, along
with competing priorities among the many food and medical products
regulated by the agency.
In some recent cases, the FDA has used its authority to detain and
seize adulterated or misbranded dietary supplements, as it did
this year with supplements made by USPlabs and Hi-Tech
Pharmaceuticals that contained the controversial stimulant DMAA.
The FDA has the authority to order a recall of supplements if a
manufacturer refuses to do so, and the agency threatened this in a
letter to USPlabs that prompted the company to recall OxyElite Pro
last month.
But the FDA still should do more, argues Patrick Arnold, who was
convicted in 2006 as the Illinois steroid chemist in the "Balco"
scandal that involved distributing performance-enhancing drugs to
high-profile athletes.
"Obviously, we want to avoid regulatory interference as much as we
can because it never ends up being a good thing," Mr. Arnold said.
But without better FDA oversight, Mr. Arnold said, it will become
increasingly difficult for supplement makers to compete without
spiking their products.
He pointed to the lack of any public action by the FDA to address
repeated findings by independent labs -- including by the U.S.
Anti-Doping Agency in June 2012, and various teams of
international researchers -- of undisclosed amphetamine- and
methamphetamine-like compounds in Craze. This week, another peer-
reviewed journal article reported tests showing similar findings
in additional samples of Craze, as well as in Detonate. Driven
Sports says the tests are wrong; Gaspari officials have not
responded to interview requests.
"When stuff like this happens with Craze and Detonate, that just
makes people so pissed off that they're ready for some
regulation," Mr. Arnold said. "That's so unfair to competitors
and it's a public health issue."
Mr. Arnold pointed out that there have been people with criminal
backgrounds making supplements as long as he's been in the
business. "When I first got started in the 1990s, just about
every major supplement owner was an ex-steroid dealer," he said.
"You make money selling steroids, then start your supplement
company."
With the Internet, he said, it doesn't take much to start selling
the pills and powders. "It's a very low barrier of entry,"
Mr. Arnold said. "And you don't have to be that smart. You just
pretend that you know science."
Mr. Arnold says prison time, his notoriety and the increased
scrutiny his products have drawn from regulators have changed the
way he does business. But his products still have pushed into
gray areas. In 2009, two of his products -- Ergopharm's 60-OXO
Xtreme and 6-OXO -- were the subject of a recall after the FDA
said they contained substances that should be classified as
steroids. In recent years, Mr. Arnold has taken credit for being
the first supplement maker to put the controversial stimulant DMAA
into his products. He says he removed it after the FDA crackdown
and after more scientific evidence emerged raising questions about
whether it's naturally in geraniums.
HIDING DANGEROUS INGREDIENTS IN PLAIN SIGHT
The problem of supplement adulteration is significant, whether it
occurs with criminal intent or is the result of lax quality
control and insufficient oversight of suppliers.
Just over half of all Class 1 drug recalls in the USA from 2004 to
2012 -- those that could cause serious health problems or death --
involved supposedly all-natural dietary supplements that were
spiked with hidden pharmaceuticals, according to research
published this year in the scientific journal JAMA Internal
Medicine. Of the 237 supplements recalled for hidden drugs, 40%
were sold for sexual enhancement; 31% for bodybuilding and 27% for
weight loss, the researchers said.
But hidden drugs have been found in other categories of
supplements as well, including diabetes and arthritis remedies.
This summer, Purity First Health Products recalled various lots of
Vitamin B50 capsules, Vitamin C capsules and multi-mineral
capsules after FDA tests indicated the presence of steroids.
With minimal testing being done by the FDA, a growing number of
private companies are doing their own tests to identify problems
that aren't being detected and addressed by regulators.
The U.S. Anti-Doping Agency tests and reviews labels of
supplements of interest to athletes, and maintains a list of
"high-risk" supplements, many of which have not been subject to
FDA action.
Sometimes troubling ingredients hide in plain sight on the
products' labels under names most consumers would never recognize.
"At least 200 different names are being used for testosterone,"
said David Black, founder of Aegis Sciences Corp. in Nashville,
which has created a database of supplements to help clients at 140
universities, the NFL Players Association and other sports
organizations. A mobile Aegis Shield app has recently been made
available to the public.
While there are about 2,475 ingredients in the products in the
Aegis database, more than 35,000 aliases are used for the
ingredients on their labels. For example, there were 167 aliases
for marijuana and 82 aliases for methylhexanamine, better known as
DMAA.
Aegis also found other ingredients that might make consumers think
twice, including "Wu Ling Zhi" -- which is flying-squirrel feces,
and "Putrescine," which is also known as the foul odor of
decomposing flesh.
"In our experience, we've seen so many products out there that are
not what they're represented to be," Mr. Black said. "If a
product has a great claim and actually does what it claims to do,
it probably has an ingredient that shouldn't be in there."
And the people who pay the price, ultimately, are those who -
knowingly or unknowingly -- indulge. U.S. Olympic Committee
athlete ombudsman John Ruger noted in an e-mail to USA TODAY this
week that "despite our aggressive efforts to educate them on the
potential pitfalls, the harsh reality is that we will have
athlete(s) who miss the Olympic Games because they take a
supplement that includes a banned substance."
To read more articles in USA TODAY's Supplement Shell Game series,
go to: supplements.usatoday.com
To report an adverse health event involving a dietary supplement,
contact the FDA's MedWatch program online or call 800-332-1088.
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