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/raid1/www/Hosts/bankrupt/CAR_Public/170619.mbx C L A S S A C T I O N R E P O R T E R Monday, June 19, 2017, Vol. 19, No. 121 Headlines A&B INSURANCE: Settles "Do Not Call" Class Action for $4.25MM ADT: Settles Class Actions Over Home Security Systems ADVOCATE HEALTH: Supreme Court Overturns Opinion in ERISA Case AFFILIATE ASSET: "Gonzales" Suit Disputes Collection Letter ALON USA: Shareholder Files Class Action Over Delek Merger AMES ADVANCED: Fails to Pay Employees OT, "Perez" Suit Claims ANDREA'S FINE: Faces Class Action Over All Natural Labeling APPLE INC: Accused of Misleading Consumers About Free Repairs BEST POULTRY: Does Not Properly Pay Employees, Action Claims CANADA: Military Faces Intensive Archival Research on Purge CANADA: Northstar Cleanup Continues Years Following Settlement CANADA: Certification Hearings Set in CAF Sexual Assault Suits CANADIAN PACIFIC: Denies Involvement in Lac-Megantic Incident CAPITOL MARKETING: "Cote" Action Claims Unpaid Overtime Pay CATHAY PACIFIC: "Goldthorpe" Seeks Overtime Pay, Reimbursements CONNECTICUT: AG Balks at Monitor's Requests in DCF Case CONTINENTAL RESOURCES: Aug. 7 Final Hearing on Stamps Bros. Deal COSMETIC INSTITUTE: Class Action Mulled Over Patient Data Breach DEL TACO: Faces "Morales" Suit Over Failure to Pay Overtime DEMOCRATIC NATIONAL: Suit Says Schultz Office Used Voice Changer DS HEALTHCARE: Settles Securities Class Action in Florida EPIC LANDSCAPE: Denied Overtime Pay, "Albelo" Suit Asserts ERIC CONN: Court Reviews Benefits of Former Clients ERIC CONN: Disappears Amidst Fraud Class Action, FBI Says ETHICON: Nova Scotia Man Blames Physiomesh for Debilitating Pain FIAT CHRYSLER: Faces Class Action Over Jeep Wrangler Engine Damage FLOWERS FOODS: "Hall" Files Suit Over Unpaid Overtime Wages GENERAL MOTORS: Siskinds Sues Over Diesel Truck Emissions GODADDY: Seeks Dismissal of Microsoft Office Sales Class Action HEALTH CARE: Court Issues Scheduling Deadlines in "Sawyer" Suit HENKEL CORP: "Buso" Suit Asserts Laundry Aid Packaging 30% Empty HOLBROOK CONSTRUCTION: Cal. Suit Seeks to Recover Unpaid Wages HSBC: Court to Hear Investors' Motion to Consider Class Status I & I PIZZA: Sued in Ga. Over Failure to Pay Minimum & OT Wages INGRAM & ASSOCIATES: "Candela" Action Disputes Collection Letter INTRAWEST RESORTS: Faces Class Action Over Merger Deal ISHARES TRUST: Class Action Plaintiffs' Claims Not Time Barred KATE SPADE & CO: "Jauregi" Sues Over Shady Merger Deal KEHE DISTRIBUTORS: Faces "Russell" Suit Over Failure to Pay OT KING TACO: Sued in Cal. Over Failure to Properly Pay Employees LEXINGTON COUNTY, SC: ACLU Sues Over Debtor's Prison LITTLE CAESARS: Lawyers Spar in $100M Lawsuit Over 'Halal' Pizza MATTAMY HOMES: Faces Class Action Over Property Damage MCCARTHY BURGESS: Illegally Collects Debt, "Weigle" Suit Claims MCGUYER HOMEBUILDERS: Faces "Vazquez" Suit Over Failure to Pay OT MISSOURI: Social Services Dept. Sued Over Psychotropic Drugs NATIONAL PARKING: "Charron" Seeks Overtime Pay, Back Wages NEW YORK: Commissioner Sued Over LT Care Services Termination PANERA BREAD: Faces Scott And Gina Suit Over JAB Holdings Merger PARTY ANIMAL: Falsely Marketed Dog Food, "Black" Suit Claims PEARLS AUSTRALASIA: Indian Gov't Can Recover Funds in Australia PRIDE MOBILITY: CAT Takes Permissive Approach in Class Action PRIORITY WORKFORCE: Sued Over Failure to Properly Pay Workers PROSPECT MEDICAL: "Meneses" Suit Seeks to Recover Unpaid OT Wages RED INN: Banquet Wait Staff File Class Action Over Tips SANTA FE UNIVERSITY: Faces More Fraud Suits From Students SAUDI ARAMCO: New York Listing Poses Class Action Litigation Risk SECURE LENDING: "Bruce" Sues Over Unpaid Overtime Premiums SENTRY INSURANCE: Final Settlement Approval Hearing on June 30 SOUTHWESTERN ENERGY: Competing Class Action Hampers Settlement SOUTHWINDS INSPECTION: "Berrisford" Seeks Unpaid Overtime Pay SYNGENTA AG: Trial over Viptera Corn Begins in Kansas TENNESSEE: DCS Soon to Operate Without Court Oversight THC-ORANGE: Does Not Properly Pay Employees, "Song" Suit Claims UBER: Fights Drivers' Bid to Revive Claims Over Improper Fees WHITELINE EXPRESS: "Bell" Sues Over Denied Overtime Pay WHOLESOME GOURMET: Fails to Pay Workers OT, "Chamorro" Suit Says YELP INC: Has Made Unsolicited Calls, "Sapan" Action Claims ZILLOW: Asserts Zestimates Class Action Without Merit * Big Changes Could be Coming to Class Action Lawsuits * Financial Industry Braces Impact of Fiduciary Rule ********* A&B INSURANCE: Settles "Do Not Call" Class Action for $4.25MM ------------------------------------------------------------- Ryan Smith, writing for Insurance Business, reports that a Florida insurance company will pay $4.25 million to settle allegations that it made unauthorized sales calls to consumers who had placed themselves on the federal Do Not Call registry. A&B Insurance and Financial was accused, in a class-action lawsuit, of violating the Telephone Consumer Protection Act. The company has agreed to establish a settlement fund to pay customers who, from August of 2012 through April of this year, received a call within a year of being placed on the Do Not Call list, or a call from an automatic dialing system. Lead consumers Jim Youngman and Robert Allen estimated that each qualifying member of the class would get about $85 after attorneys' fees and costs were deducted from the settlement. Messrs. Youngman and Allen sued the insurer in August. Mr. Youngman claimed that he began getting telemarketing calls in January of last year -- including one call during which he was asked for his Social Security number. Mr. Youngman had never done business with A&B Insurance, and he'd been registered on the federal Do Not Call list for more than a decade. Mr. Allen claimed that A&B Insurance contacted him in December of 2015, using an auto-dialer and a pre-recorded call. A&B Insurance continues to deny that it violated the TCPA. The lead consumers agreed to settle. "Plaintiffs believe that the claims asserted in the action have merit," they wrote in court filings. "Nonetheless, plaintiffs and their counsel recognize and acknowledge the expense, time, and risk associated with continued prosecution of the action against A&B Insurance. Therefore, plaintiffs and their counsel believe that it is desirable that the released claims be fully and finally compromised, settled, dismissed with prejudice." [GN] ADT: Settles Class Actions Over Home Security Systems ----------------------------------------------------- Eric Pritchard, writing for Security InfoWatch, reports that a class action lawsuit filed against ADT where plaintiff, a residential subscriber, alleged ADT's wireless home security equipment that could be hacked by third parties. As a result, the complaint claimed, signals from ADT's systems (from panel to peripherals and back again) could be intercepted and interfered with by persons who wanted to gain access to premises. This month's column provides an update -- and a resolution from ADT's perspective. Following the filing of the class action lawsuit, Baker vs. ADT, additional groups of plaintiffs filed similar class actions against ADT in other state and federal courts. All said, ADT faced consumer protection-type class action lawsuits in state or federal courts in four different states -- California, Illinois, Arizona and Florida. Generally speaking, the various class plaintiffs claimed that third parties -- burglars -- could disable or suppress ADT's residential security systems or cause those systems to activate where there actually was no security breach. According to plaintiffs, would-be burglars could do so in order to determine if police were dispatched in response to an alarm and, waiting until police were not dispatched, in order to strike. At least one plaintiff also alleged hackers could use a subscriber's security cameras to spy on subscribers while in the premises. The crux of the legal claim was that ADT told its customers the systems were secure when they were not and that ADT knew the systems were not secure. Following months of expensive discovery, including 17 depositions and ADT's production of 45,000 pages of documents, extensive settlement negotiations and a two-day mediation conference, ADT recently announced a $16 million settlement of the lawsuits, translating into a nationwide class settlement, the payment of legal fees for class counsel and monetary awards for subscribers ranging from $15 to $45. The amount that goes to subscribers seems quite low given plaintiffs' allegations, but that is typical of many consumer class actions. The class consists of all residential subscribers between 2009 and 2016. The settlement excludes a subscriber's claims for personal injury or property damage (preserving subscriber claims for catastrophic losses). [GN] ADVOCATE HEALTH: Supreme Court Overturns Opinion in ERISA Case -------------------------------------------------------------- Susan Morse, writing for Healthcare Finance, reports that the Supreme Court on June 5 overturned an appeals court opinion and ruled that religiously-affiliated hospitals do not have to comply with federal laws protecting pension benefits for workers. The Justices, except for Justice Neil Gorsuch who did not take part in consideration of the case, said the health systems are exempt, even though the pension plans were established by the hospitals and are managed internally, according to Justice Elena Kagan who wrote the opinion. Judge Sonia Sotomayor filed a concurring opinion though said she was troubled by the outcome. "The decision to exempt plans neither established nor maintained by a church could have the kind of broad effect that is usually thoroughly debated during the legislative process and thus recorded in the legislative record," Judge Sotomayor said. It is not at all clear that Congress would take the same action today, "with respect to some of the largest health-care providers in the country. Despite their relationship to churches, organizations such as petitioners operate for-profit subsidiaries." The 2016 case pitted Advocate Health Care Network, Saint Peter's Healthcare System and Dignity Health against employees and former employees for those systems who originally filed a class action lawsuit. The Employer Retirement Income Security Act of 1974 obligates private employers to offer pension plans that adhere to rules to ensure plan solvency and protects the employees. Church plans have long been exempt from these regulations. The class action lawsuit said the hospitals did not meet the church exemption status from ERISA because they were not established by a church. The question for the Justices was whether a church must have originally established such a plan for it to qualify for an exemption, Judge Kagan said. The three relevant federal agencies responsible for administering ERISA are the Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation. ERISA was amended in 1980 after many religious groups protested that the Internal Revenue Service was attempting to define what is and what is not a church. Congress then categorized that all groups associated with church activities would receive comparable treatment, Judge Kagan said. "Under the best reading of the statute, a plan maintained by a principal-purpose organization therefore qualifies as a 'church plan,' regardless of who established it," Judge Kagan said. Tess Gee, a member in the ERISA and employee benefits litigation practice at Miller & Chevalier said a Supreme Court decision would not end the controversy. Had the hospitals lost, they faced funding contributions of possibly billions of dollars a year plus civil penalties for failing to comply with ERISA's reporting and disclosure requirements, Ms. Gee said prior to the SCOTUS ruling. "Even if the Court decides in their favor, the hospitals will have to establish that they are a PPO, as their counsel conceded at the argument, to qualify for the church plan exemption," she said. Stuart Lark -- slark@shermanhoward.com -- a partner at Sherman & Howard who represents religious organizations and who submitted amicus briefs in the Hobby Lobby case said, "The Court's decision is a welcome development for all religious organizations seeking to exercise and express their beliefs in context where regulatory requirements may run contrary to such beliefs." The Supreme Court case was Advocate Health Care Networks versus Maria Stapleton, Saint Peter's Healthcare System versus Laurence Kaplan and Dignity Health versus Starla Rollins. [GN] AFFILIATE ASSET: "Gonzales" Suit Disputes Collection Letter ----------------------------------------------------------- Fransoly Gonzalez, individually and on behalf of all others similarly situated, Plaintiff, v. Affiliate Asset Solutions, LLC, and Pendrick Capital Partners, II, LLC, Defendant, Case No. 1:17- cv-01843 (S.D. Ind., June 5, 2017), seeks statutory damages, costs, reasonable attorneys' fees and such further relief under the Fair Debt Collection Practices Act (FDCPA). Defendants attempted to collect a delinquent consumer debt which Gonzalez allegedly owed to Indiana Emergency Solutions via a letter which failed to advise Ms. Gonzalez that disputes requesting validation of the debt had to be in writing to be effective. Disclosure of this information is mandated by the FDCPA, says the complaint. [BN] Affiliate Asset Solutions, LLC and Pendrick Capital Partners II are debt collector handling consumers in virtually every state. Plaintiff is represented by: David J. Philipps, Esq. Mary E. Philipps, Esq. Angie K. Robertson, Esq. PHILIPPS & PHILIPPS, LTD. 9760 S. Roberts Road, Suite One Palos Hills, IL 60465 Tel: (708) 974-2900 Fax: (708) 974-2907 Email: davephilipps@aol.com mephilipps@aol.com angiekrobertson@aol.com - and - John T. Steinkamp, Esq. 5214 S. East Street, Suite D1 Indianapolis, IN 46227 Tel: (317) 780-8300 Fax: (317) 217-1320 Email: steinkamplaw@yahoo.com ALON USA: Shareholder Files Class Action Over Delek Merger ---------------------------------------------------------- Rick Archer and Zachary Zagger, writing for Law360, report that an Alon USA Energy shareholder launched a putative class action on June 2 objecting to the company's $675 million proposed merger with Delek US Holdings, saying the revenue projections in the proxy statement are incomplete and misleading. The proxy statement explaining the merger between the two oil refining and convenience store corporations uses nonstandard metrics in its projections of Alon's income without also providing standard metrics for comparison and failed to provide the information needed to assess the valuation analysis, shareholder Stephen Page said in his suit against Alon and its directors. "Absent disclosure of the foregoing material information prior to the special shareholder meeting to vote on the proposed merger, plaintiff and the other members of the class will be unable to make a fully-informed decision regarding whether to vote in favor of the proposed merger, and they are thus threatened with irreparable harm, warranting the injunctive relief sought herein," he said. Under a deal announced in January, Delek, which already owns a 47 percent share in Alon, would acquire the remaining 53 percent share of Alon's common stock. Alon stockholders would receive a little over half a share of Delek stock per Alon share, for a value of $12.13 per share, the suit claimed. "The merger consideration and the process by which defendants agreed to consummate the proposed merger are fundamentally unfair to Alon's public shareholders in view of the company's recent financial success and prospects for future growth," Mr. Page said. Mr. Page claimed the preliminary proxy statement filed with the Securities Exchange Commission violates the Exchange Act by disclosing Alon's revenue projections using non-generally accepted accounting practices metrics without providing the nearest equivalent GAAP metric for comparison. The statement itself acknowledges non-GAAP measures cannot be considered in isolation from GAAP measures, he said. "Despite disclosing the misleading and materially incomplete nature of non-GAAP financial measures, defendants fail to reconcile the non-GAAP measures disclosed in the proxy statement," he said. Mr. Page also claimed the discounted cash flow analysis provided by J.P. Morgan Securities LLC provided insufficient information, failing to define unlevered cash flows or reconcile them with a comparable GAAP metric or provide the rationale for the growth rate used. "As a result of these omissions, shareholders are unable to assess whether JPM's discounted cash flow analysis, generally considered the most useful analysis, should be considered in deciding whether or not to vote," he said. Counsel for Mr. Page and representatives of Alon did not immediately respond to requests for comment late on June 5 In 2015 Delek acquired its 47 percent stake of Alon USA Energy Inc. in a $572.4 million deal combining the two companies' refining and convenience store businesses. Mr. Page is represented by Michael Van Gorder -- mvangorder@faruqilaw.com -- Nadeem Faruqi -- nfaruqi@faruqilaw.com -- and James M. Wilson -- jwilson@faruqilaw.com -- of Faruqi & Faruqi LLP. Counsel information for Alon and the directors was not immediately available on June 5. The case is Stephen Page v. Alon USA Energy Inc. et al., case number 1:17-cv-00671, in the U.S. District Court for the District of Delaware. [GN] AMES ADVANCED: Fails to Pay Employees OT, "Perez" Suit Claims ------------------------------------------------------------- Jonathan Perez, on behalf of himself and all other similarly situated v. Ames Advanced Materials Corporation, Case No. 3:17-cv- 04069 (D.N.J., June 6, 2017), is brought against the Defendants for failure to pay chemical operators' overtime wages for work in excess of 40 hours per week. Headquartered in Glens Falls, New York, Ames Advanced Materials Corporation, operates a silvery refinery. [BN] The Plaintiff is represented by: Andrew I. Glenn, Esq. Jodi J. Jaffe, Esq. JAFFE GLENN LAW GROUP, P.A. 301 N. Harrison Street, Suite 9F, #306 Princeton, NJ 08540 Telephone: (201) 687-9977 Facsimile: (201) 595-0308 E-mail: AGlenn@JaffeGlenn.com JJaffe@JaffeGlenn.com ANDREA'S FINE: Faces Class Action Over All Natural Labeling ----------------------------------------------------------- Noddy A. Fernandez, writing for St. Louis Record, reports that a St. Louis consumer has filed a class-action lawsuit against a food manufacturer, citing alleged false product information for its labeling all natural product in pumpkin pie products. Michael Hensel, individually and on behalf of all others similarly situated in Missouri, filed a complaint on May 26 in the St. Louis 22nd Judicial Circuit Court against Andrea's Fine Foods Inc. and Andrea's Gluten Free LLC, alleging that the defendants violated the Missouri's Merchandising Practices Act. According to the complaint, the plaintiffs allege that in February, the plaintiff purchased the defendant's All Natural Pumpkin Pie at Dierbergs for $15.99. The plaintiff claims the product is labeled as all-natural but lists a synthetic ingredient xanthin gum thickener. As a result, the plaintiff claims that the pumpkins pies contain harmful synthetic ingredients and are sold at a higher price than they should be. The plaintiffs hold Andrea's Fine Foods and Andrea's Gluten Free responsible because the defendants allegedly used false, deceptive and misleading marketing and advertising procedure by stating the product is all natural but contains a synthetic ingredient to entice consumers and sold the product to higher market value. The plaintiffs request a trial by. They seek class certification of this case, compensatory damages, pre- and post-judgment interest, attorneys' fees, cost and for any further relief deemed proper by the court. They are represented by Matthew H. Armstrong of Armstrong Law Firm LLC in St. Louis and Stuart L. Cochran of Steckler Gresham Cochran PLLC in Dallas. St. Louis 22nd Judicial Circuit Court case number 17220-CC01421 [GN] APPLE INC: Accused of Misleading Consumers About Free Repairs ------------------------------------------------------------- phoneArena.com reported that people might recall the big hullabaloo that occurred last year when Apple was the subject of a class action suit in the U.S. The legal action involved an error 53 message that popped up on certain Apple iPhone models that had parts repaired by unauthorized personnel. With the error message, the affected phone was essentially bricked. The suit was eventually thrown out. In Australia, regulators there are taking Apple to court over essentially the same issue. The Australian Competition and Consumer Commission (ACCC) is accusing Apple of deliberately misleading customers. The trial begins in mid- December. The ACCC claims that Apple had been telling iPhone owners that they were not able to get free repairs for their handsets if they first had taken them to a third-party repair shop. Apple repeated that excuse to customers even when a repair made by the unauthorized shop had nothing to do with the problem that Apple wouldn't fix for free. The ACCC, trying to catch Apple in the middle of this illegal action, sent out undercover employees to each of the 13 retailers in the country that sell Apple products. This was done last June. The undercovers told Apple staff that the speakers on their iPhone stopped working after the screens were repaired by an unauthorized third party. In each of the 13 visits, Apple incorrectly told the undercover ACCC agent that it could not repair the speaker for free under Australian consumer law; the reason given by Apple in each case was that the screen had been replaced by a repair shop other than Apple Australia or an Apple-authorized service provider. Consumer law in Australia states that customers have the right to free repair or a replacement if a product is faulty or the quality of the device is unacceptable. Apple responded to the ACCC's claims by saying that the undercover operation failed to expose any breaches by Apple because consumer law does not exist in "hypothetical circumstances". In other words, Apple claims that because the undercovers did not have a real iPhone with a real problem, they were not given the correct information. The company went on to say that real customers with real iPhone units would have been informed of their rights under Australian consumer law. The error 53 message affected one in 1,000 iPhone units sold by Apple or its resellers between September 2014 and February 2016. The message would show up whenever the iOS user would try to update his device to iOS 8 or iOS 9. [GN] BEST POULTRY: Does Not Properly Pay Employees, Action Claims ------------------------------------------------------------ Armando Velazquez, on behalf of himself and all others similarly situated v. Best Poultry, Inc., J.G. Foods, Inc., D8 Poultry, LLC, J.T. Foods Specialty, Inc., Specialty Poultry, Inc., D-8 Foods, Inc., Tony Bryan, Jesus Gracia, and Does 1 through 100, Case No. BC663930 (Cal. Super. Ct., June 7, 2017), is brought against the Defendants for failure to overtime and minimum wages and failure to provide a 30-minute uninterrupted meal period. The Defendants own and operate a food manufacturing company that specializes in a variety of case ready meats including chicken, lamb, beef, and pork. [BN] The Plaintiff is represented by: Mehrdad Bokhour, Esq. David D. Bibiyan, Esq. BIBYAN & BOKHOUR 287 S. Robertson, Blvd., Suite 303 Beverly Hills, CA 90211 Telephone: (310) 597-1441 Facsimile: (310) 300-1705 E-mail: mehrdad@tomorrowlaw.com david@tomorrowlaw.com CANADA: Military Faces Intensive Archival Research on Purge ----------------------------------------------------------- The Hamilton Spectator's Jim Bronskill reports that the Defence Department says a painstaking review of dusty personnel files in the national archives may be needed to determine how many people were forced out of the military for being gay or lesbian. The Trudeau government has signalled its intention to apologize to former military members, hoping to make amends to those who endured federal discrimination over the decades due to their sexual orientation or gender identity. The policies had their roots in government efforts that began as early as the 1940s to delve into the personal lives of employees who were considered security risks. However, inquiries to Defence -- including a formal request under the Access to Information Act -- reveal the department has no firm sense of the numbers affected between 1969, when homosexual acts were decriminalized, and 1992, when military restrictions on gays were lifted. National Defence's human resources system does not include information on a person's sexual orientation, nor does it record the specific reason why a person was released from the Armed Forces, spokesperson Suzanne Parker said in a written response to questions from The Canadian Press. Due to these limitations, it is "impossible to provide a tight estimate" of the number of Forces members released between 1969 and 1992 due to their sexual orientation, Ms. Parker added. A February 2016 briefing note to the senior associate deputy minister of defence, released under the access law, recommended that "further work be done" to determine the number of people discriminated against and whether the federal government should offer a redress package. The government now faces a brewing class-action lawsuit in Federal Court that would cover members of the military and other federal agencies who were "investigated, discharged, terminated, sanctioned or faced threat of sanction" by the government after June 27, 1969 because of their sexual orientation, gender identity or gender expression. The lawyers chose the date of decriminalization as the starting point because, since homosexual acts were illegal until that point, breaking a law would have provided the government with legal grounds for disciplining or firing employees. The government is committed to conducting archival research to try to determine the number of people affected by the policies, Ms. Parker said. "It may entail pulling and reviewing every single personnel file from Library and Archives Canada to determine the circumstances of each case." Todd Ross, one of the lead plaintiffs in the court case, joined the Forces in 1987 at age 18 and came under investigation by the military police. He eventually admitted being gay while attached to a polygraph machine, an experience that was incredibly traumatic, his lawyers plan to argue in court. Mr. Ross accepted a discharge rather than spend the remainder of his naval career performing "general duties," with no hope for promotion or advancement, they say. In 1976, the military issued Canadian Forces Administrative Order 19-20, "Homosexuality -- Sexual Abnormality Investigation, Medical Examination and Disposal," which formally banned gays from serving. Openly homosexual recruits were prevented from enlisting, and soldiers discovered to be gay were dismissed, says the heavily censored February 2016 briefing note. Any personnel who suspected another member of being gay or lesbian was required to inform a commanding officer. The policy was loosened somewhat in 1988. The order to inform superiors was dropped and dismissal of homosexuals was no longer automatic, the note points out. However, those who did not quit upon discovery were denied access to promotions, security clearances and transfers. The official military restrictions on gays were lifted in 1992 after it became clear they violated the Charter of Rights and Freedoms. Defence records indicate that 43 Canadian Forces members were released under CFAO 19-20 between January 1985 and January 1988, says an internal draft note from March of last year, also disclosed under the access law. Between January 1988, when the interim policy came into force, and October 1992 when the policies on homosexuals were revoked, about 47 members were affected. Statistics prior to 1985 were not available. However, another version of the draft note excludes the figures and says the number of people affected by CFAO 19-20 "is not known." "Regardless of the numbers originally mentioned in the draft document, we are now actively trying to identify these individuals," Ms. Parker said. [GN] CANADA: Northstar Cleanup Continues Years Following Settlement -------------------------------------------------------------- Anam Latif, writing for The Record.com, reports that cleanup continues more than a decade after trichloroethylene contamination was discovered at the former Northstar Aerospace plant in Cambridge. Low levels of the chemical, a colourless liquid used to degrease metal parts, are still present in the groundwater at the Bishop Street site. Now the Ministry of the Environment and Climate Change says it is exploring some new, long-term remedial options for the neighbourhood where at one point 500 homes were reported to have been affected. "It's the start of a long process," Rob Kell, a hydrogeologist with Dillon Consulting, the new firm hired by the ministry, said at a public meeting. That's because it is not known how long cleanup efforts will actually take. The ministry says there aren't any available measures to effectively reduce trichloroethylene (TCE) in the groundwater to the point where it will stop vaporizing into the air inside people's homes. Remediation work fell to the ministry after Northstar went bankrupt in 2012. It got a $4.75-million settlement from Northstar and is using the funds to operate groundwater pumps at the former plant's site and indoor air-monitoring systems inside more than 150 homes. Each year the groundwater, surface water and indoor air quality in the area is also tested. Thirteen years later the ministry wants to look at some long-term approaches to remedy the groundwater contamination. Two recommended options include an injection of bacteria and metal into the soil to break down TCE at the site. This would need to be repeated every three years for at least a decade, according to the consultant's report. The other option is to install an underground barrier filled with reactive material that will act as a filter to neutralize groundwater as it flows through it. This would need to be reinstalled every 15 years. "It's a two-pronged approach," Mr. Kell said. "It's the combination of these two that we think is very effective." Residents first learned of TCE contamination in 2005. Northstar, and a neighbouring Bishop Street company also involved in the contamination, GE, started a $20-million cleanup but Northstar shut down in 2009. That year it was reported that a $5-million settlement was reached with area residents who launched a class-action lawsuit. The efforts may seem drawn out but the Region of Waterloo Public Health says remediation efforts inside homes in the area have been successful. "We've seen good results and we want that to continue," said Chris Komorowski, manager of health protection and investigation at public health. He said the vast majority of homes now have less than 5 micrograms of TCE per cubic meters of air. There are about 11 homes in the area that are above that level and those continue to be prioritized, Mr. Komorowski said. Public health's target has been to reach 0.5 micrograms per cubic meters of air. "These are very low levels and we are not expecting to see health effects." The main risk with high levels of TCE exposure is cancer. The risks associated with low levels of TCE exposure at 5 micrograms per cubic metre of air is one in 100,000 over a 70-year period, according to public health. For levels around 0.5 micrograms, the ideal target for Bishop Street homes, the risk is one in one million. The ministry says it anticipates the chosen long-term remedy will be put in place by the end of 2022. Until then it will continue its current remedial work. [GN] CANADA: Certification Hearings Set in CAF Sexual Assault Suits -------------------------------------------------------------- Koskie Minsky LLP on June 5 disclosed that the path has now been cleared for certification hearings to proceed in two class actions alleging systemic sexual assault and harassment on behalf of members of the Canadian Armed Forces. The Honourable Mr. Justice Fothergill of the Federal Court on May 30, 2017 ordered the motions for certification to proceed in Toronto from July 9 to 13, 2018. The defendant in the class actions is The Attorney General of Canada. On March 27, 2015, former Supreme Court of Canada Justice Marie Deschamps released a report entitled "External Review into Sexual Misconduct and Sexual Harassment in the Canadian Armed Forces". Following months of consultations, interviews and a review of Canadian Armed Forces policies, procedures and programs in relation to sexual harassment and sexual assault, Justice Deschamps' report concluded that the Canadian Armed Forces maintained a hostile, sexualized workplace, and there was a "perception in the lower ranks that those in the chain of command either condone inappropriate sexual conduct, or are willing to turn a blind-eye to such incidents." Sherry Heyder, Amy Graham and Nadine Schultz-Nielsen are the plaintiffs in the Federal Court class action on behalf of women. They experienced sexual assault, harassment and gender-based discrimination. Larry Beattie is the plaintiff in the Federal Court class action on behalf of men. He, too, experienced sexual harassment and assault while he was a member of the Canadian Armed Forces. All individuals who have been harmed share a similar story. The Statements of Claim allege that sexual assault and harassment in the Canadian Armed Forces are endemic and the Canadian Armed Forces has created and maintained a culture where leadership looks the other way. The actions are supported by It's Just 700, a Canada-wide online resource and peer support group for survivors of Military Sexual Trauma. "This is the first step in getting justice and recognition for what I and so many others have had to endure," said plaintiff Amy Graham. "Now that Justice Fothergill has scheduled the motions for certification, we have a clear path to having the victims' voices heard," said Jonathan Ptak -- jptak@kmlaw.ca -- counsel at Koskie Minsky LLP, one of the law firms representing the class members. "Now the ball is in Canada's court to answer our allegations." If you are a current or former member of the Canadian Armed Forces who has experienced sexual harassment or assault, please call 1(888) 502-7455, visit www.kmlaw.ca/militaryassaultclassaction or www.ravenlaw.com/armed-forces-class-action, or email militaryassaultclassaction@kmlaw.ca or armedforcesclassaction@ravenlaw.com. Koskie Minsky LLP, based in Toronto, is one of Canada's foremost class action, pension, trade union, and litigation firms. Its class actions group has been a leader in class actions since 1992 and has prosecuted many of the leading cases in the area. Koskie Minsky LLP was counsel to the survivors of former residents of Huronia Regional Centre and 14 other residential facilities for people with disabilities against the Province of Ontario, wherein the Province agreed to pay survivors over $103.6 million and to provide an apology to former residents for the harm they sustained. Koskie Minsky LLP was also counsel in Cloud v. Canada, the first Indian residential schools class action certified in Canada, which resulted in a $4 billion pan-Canadian settlement. Raven, Cameron, Ballantyne & Yazbeck LLP/s.r.l. -- http://www.kmlaw.ca-- is an Ottawa-based law firm specializing in labour/employment, human rights, and public law, with involvement in class action litigation. RavenLaw has extensive experience in addressing systemic gender-based discrimination. The firm was counsel in the historic $3.2 billion pay equity win for federal public service employees, the $150 million pay equity award against Canada Post at the Supreme Court of Canada, and numerous other pay equity cases, including most recently the $45 million pay equity settlement at Statistical Survey Operations. RavenLaw has been appointed as amicus curiae by the Supreme Court of Canada and has argued leading cases in the area of human rights and constitutional law. [GN] CANADIAN PACIFIC: Denies Involvement in Lac-Megantic Incident ------------------------------------------------------------- Lyle Adriano, writing for Insurance Business, reports that in response to a class-action lawsuit, Canadian Pacific Railway filed its defense denying that it had any involvement in the oil train explosion in Lac-Megantic in 2013 that took the lives of 47 individuals. The railway company is facing a number of legal battles in relation to the incident, including a $409-million damages lawsuit by the city of Quebec and 10 insurance claims. In July 2013, an unattended Montreal Maine and Atlantic Railway (MM&A) train of 72 tank cars carrying 7.7 million litres of oil derailed and detonated. The blast had destroyed most of the town's center, forcing nearly 2,000 people from the area. Search and compare insurance product listings for Transportation from specialty market providers here The class-action lawsuit filed against the railway company also named MM&A and its engineer, Thomas Harding, reported The Globe and Mail. About 5,000 people and companies were behind the lawsuit, representing those who have lost loved ones, properties, and/or businesses during the accident. According to CP, its responsibility for the train ended the moment it had handed over the cargo to MM&A from New Town, North Dakota to Montreal. MM&A was to carry it to the Irving Oil refinery in Saint John. "[T]here is a transfer of liability when traffic is interchanged from a carrier to a connecting carrier," the railway company said in the court document, citing Association of American Railroads legislation. "No CP locomotive or tank cars, no CP crew and no CP tracks were involved in the derailment." One of the plaintiffs' lawyers argued that CP's liability comes from its partnership with shipper World Fuel Services and its entities in the North Dakota rail hub. The lawsuit purports that the oil shipment was mislabelled to conceal its volatility. In turn, the mislabelling allowed the railway company to use older, cheaper tank cars over the "poorly maintained and low-cost" MM&A route east of Montreal instead of a better-maintained line owned by Canadian National Railway. The Globe and Mail reported that MM&A is currently in bankruptcy protection, and its assets have been sold. [GN] CAPITOL MARKETING: "Cote" Action Claims Unpaid Overtime Pay ----------------------------------------------------------- Angela Cote, on behalf of herself and others similarly situated, Plaintiff, v. Capitol Marketing Concepts, Inc., Defendant, Case No. 8:17-cv-01321 (M.D. Fla., June 5, 2017), seeks unpaid overtime compensation owed, reinstatement of full fringe benefits, front and back pay, liquidated damages, reasonable attorneys' fees and costs and awarding of all such other relief under the Fair Labor Standards Act as well as statutory damages resulting from unlawful retaliation, emotional distress and anguish. Plaintiff was employed by Defendant from November 20, 2002 until March 29, 2017 in the Sales department. Plaintiff was regularly required to work in excess of forty hours a workweek but was not paid overtime compensation. Defendant allegedly failed to keep accurate time records. During her employment, Plaintiff complained to management, and was terminated in retaliation for her complaint. The Plaintiff is represented by: Jay P. Lechner, Esq. Jason M. Melton, Esq. WHITTEL & MELTON, LLC One Progress Plaza 200 Central Avenue, #400 St. Petersburg, FL 33701 Telephone: (727) 822-1111 Facsimile: (727) 898-2001 Email: Pleadings@theFLlawfirm.com lechnerj@theFLlawfirm.com kmoran@theFLlawfirm.com CATHAY PACIFIC: "Goldthorpe" Seeks Overtime Pay, Reimbursements --------------------------------------------------------------- Dan Goldthorpe, James Donovan, Chris Bennett, James Isherwood and David Vincent, on behalf of themselves and all similarly situated individuals, Plaintiffs, v. Cathay Pacific Airways Limited and USA Basing Limited, Defendants, Case No. 4:17-cv-03233 (N.D. Cal., June 5, 2016), seeks unpaid overtime wages, minimum wages, interest thereon, waiting time penalties, and other penalties, injunctive relief, declaratory relief and reasonable attorney fees and costs under the California Labor Code and the California Business and Professions Code. Plaintiffs worked as pilots for Cathay Pacific Airways Limited, a corporation organized under the laws of Hong Kong, with its operational headquarters located in Hong Kong and its California corporate headquarters located San Francisco, California. Defendants operate trans-Pacific passenger flights originating from Los Angeles International Airport and San Francisco International Airport in San Francisco to Hong Kong. The Plaintiff is represented by: David E. Mastagni, Esq. Isaac S. Stevens, Esq. Ace T. Tate, Esq. MASTAGNI HOLSTEDT - A PROFESSIONAL CORPORATION 1912 "I" Street Sacramento, CA 95811 Telephone: (916) 446-4692 Facsimile: (916) 447-4614 - and - Nathan Alder, Esq. Sarah E. Spencer, Esq. Bryson Brown, Esq. CHRISTENSEN & JENSEN 257 East 200 South, Suite 1100 Salt Lake City, UT 84111 Telephone: (801) 323-5000 Facsimile: (801) 355-3472 CONNECTICUT: AG Balks at Monitor's Requests in DCF Case ------------------------------------------------------- Mackenzie Rigg, writing for Newstimes, reports that in the 26 years since federal authorities began monitoring Connecticut's child welfare system, state officials have made progress in overcoming manhy of its deficiencies. But now the court-appointed monitor argues that the progress has slowed so much that he should be given significant influence over the agency's staffing, technology and other resources. "The current caseloads overwhelm an individual social worker and do not allow them to meet the fundamental requirements of their job," Raymond Mancuso, the federal monitor, wrote recently in court documents. Mr. Mancuso, himself a former employee of the state Department of Children and Families, was appointed as court monitor after the 1991 settlement of the landmark "Juan F." class action lawsuit, which alleged chronic mismanagement of the agency. As part of the settlement, DCF agreed to a plan, revised several times over the years, to exit federal oversight by fully complying with 22 performance measures. But Mr. Mancuso's latest request drew a fiery response from Connecticut Attorney General George Jepsen, who called Mr. Mancuso's recommendations "a breathtaking intrusion into the prerogatives of the state's legislative and executive branches and is unsupported in law." "At a time when the court has commended the Department of Children and Families, and when the state faces historic budget challenges, the court monitor has asked that he be given the authority to determine the precise resources needed to run DCF and to micromanage all aspects of fiscal management and policy for the agency -- likely leading to tens of millions more in court- mandated spending," Mr. Jepsen said. DCF's budget is about $800 million this year. Steven Frederick, a Stamford attorney who is co-counsel for the plaintiff class, said the additional steps outlined in Mr. Mancuso's filing were "appropriate" under the circumstances. "Resources are becoming more scarce, so I think DCF is slipping," Mr. Frederick said. "They did have some improvements, some dramatic improvements, but they are slipping now." The monitor is not seeking unilateral authority over the agency, Mr. Frederick added, because the court would have to approve any recommendations or remedies proposed. The next hearing in the long-running case is scheduled for June 29 in U.S. District Court in Hartford. According to Mr. Mancuso's latest status report, filed in February, the state was complying with 16 of the 22 measures from April 1 to Sept. 30, 2016. Among the measures deemed non-compliant is one requiring that DCF have treatment plans meeting certain standards in 90 percent of its cases. In Region V, which includes Danbury, the agency met those standards 63.6 percent of the time from July through September, compared to 52.7 percent statewide. But in Region I, which serves Bridgeport, Stamford, Norwalk and Greenwich, treatment plans met the required standards just 14.3 percent of the time. The exit plan also requires that at least 80 percent of all families and children receive medical, dental, mental health and other services as specified in their treatment plans. But during that same period last year, Region I met these needs just 42.9 percent of the time, Region V, 54.6 percent and the state as a whole 52.7 percent. The two sides had agreed to update the exit plan last year, about 10 years after its last major revision, an effort the plaintiffs hoped would remedy key deficiencies. "We thought that the revised exit plan filed in September 2016 would have solved a lot of these issues," Mr. Frederick said. "It had resource provisions and a minimum budget . . . and it also had provisions requiring the court monitor to file reports on shortages." But the General Assembly rejected that plan in February. Immediately afterward, the plaintiffs notified the federal court that the state was not complying with the settlement plan because of shortages at DCF, including a lack of caseworkers and outside mental health services. "We were very concerned that the bottom would fall out," Mr. Frederick said. Mr. Mancuso followed up with his request for greater influence over agency resources. "While progress has been made and sustained on some individual Outcome Measures, others have not improved and the harm caused to the Juan F. Class is serious," Mancuso wrote in his May 1 filing. Mr. Jepsen argued that the state has made a good-faith effort to live up to its commitments, but that it rejects Mr. Mancuso's latest proposal as an "intrusion on its sovereignty." "DCF has made substantial and sustained progress toward meeting agreed-to goals and takes its responsibilities seriously, recognizing that there is more work to be done," he said. "Indeed, the governor has identified a level of resources that he believes is adequate for DCF to meet its responsibilities. "We trust that he and the legislature are best equipped to make that determination, not an unelected court monitor." [GN] CONTINENTAL RESOURCES: Aug. 7 Final Hearing on Stamps Bros. Deal ---------------------------------------------------------------- The United States District Court for the Western District of Oklahoma will hold a hearing on August 7, 2017, at 10:00 a.m. CDT to consider whether the proposed Settlement in the case, Stamps Brothers Oil & Gas, LLC, vs. Continental Resources, Inc., Case No. CIV-14-0182-HE (W.D. Okla.), is fair, reasonable, and adequate. The Court will also consider Class Counsel's and Plaintiff's motion for fees and expenses. The settlement received preliminary approval on April 6, 2017. Class Members will be paid on a "claims made" basis. The deadline for submitting Claim Forms is 90 days from the date that the final order approving the proposed settlement becomes final and unappealable. The actual date of this deadline will be determined at a later date based on future events in the proceedings. Class Members are encouraged to submit their Claim Forms as soon as possible. Otherwise, please check the settlement website http://www.stampsbrotherssettlement.com/at least weekly beginning September, 2017. SETTLEMENT CLASS All non-excluded persons or entities who are or were royalty and/or overriding royalty interest owners, from and after January 27, 2009, in oil and gas wells located in Oklahoma and operated by Continental, and from which Continental sold oil and gas production at any time from January 27, 2009, through June 30, 2015. This Settlement Class claims are limited solely to the recovery of interest as provided by the Oklahoma Production Revenue Standards Act for Continental's alleged failure to make the first payment of royalties within six months of the date of first sale of production. Persons and/or entities from the Settlement Class are agencies, departments and instrumentalities of the State of Oklahoma and/or the Unites States of America, publicly traded oil and gas exploration and production companies and their affiliates and subsidiaries, and persons or entities that Plaintiff's counsel is, or may be prohibited from representing under Rule 1.7 of the Oklahoma Rules of Professional Conduct. IMPORTANT DATES Class Period: January 27, 2009 through June 30, 2015 Opt Out Deadline: July 7, 2017 Objection Deadline: July 7, 2017 Fairness Hearing: August 7, 2017 at 10:00 a.m. CONTACT Stamps Brothers Settlement Attn: Cynthia Heymans, Settlement Administrator 5030 N May Ave, PMB 348 Oklahoma City, OK 73112 Fax: (405) 270-7298 Class Members - Plaintiff Counsel: Pate & Wolfe 50 Penn Place 1900 Northwest Expy #1300 Oklahoma City, OK 73118 Two law firms represent the Class: Pate & Wolfe, Oklahoma City, Oklahoma, and Taylor, Foster, Mallett, Downs, Ramsey & Russell, Claremore, Oklahoma. COSMETIC INSTITUTE: Class Action Mulled Over Patient Data Breach ---------------------------------------------------------------- Jack Houghton, writing for The Daily Telegraph, reports that a shocking data breach by a Sydney cosmetic surgery has been described as "one of the worst" in Australia's history. Naked photos and medical records of hundreds of women were published online by Bondi clinic The Cosmetic Institute. The leak was not contained until The Saturday Telegraph raised concerns with management on June 2. Centennial Lawyers principal solicitor George Newhouse said the data, which dates back to 2014, could have been viewed by "potentially millions of people" before the website was shut down. Mr. Newhouse is working with victims of the breach to see if there is a case for a class action. Before-and-after photos of clients who visited The Cosmetic Institute in Bondi for surgery were revealed through an online error. "I've been involved in a number of data breaches but, according to reports, this is by far the worst because of the sensitive and intimate nature of the information being released," he said. "This data breach contains highly sensitive information and . . . naked photos. I've never seen anything like it." Wollongong woman Jess Clough has been in contact with Mr Newhouse and June 3 said she would consider "all legal options". The public school teacher, who works with children with disabilities, had a standard breast augmentation this year to boost her confidence. She was horrified to learn a pre-surgical form she submitted online had been published in the public index of the website without her consent. Ms Clough also submitted before-and-after photos of her bare breasts which she fears were also stored online. Several other women have said they are interested in seeking compensation. The privacy commission urged all women to come forward if they suspect their information was leaked. Cosmetic Institute general manager Andrew Gill declined to comment on June 3 but the business released a statement saying it was "deeply concerned to learn of the hacking of confidential data and we are very apologetic to those who have been affected". "On notification the vulnerability was fixed immediately and we now have an independent security expert auditing the process," it said. It also stressed its "patient database including pre and post-op photos -- was not accessed". [GN] DEL TACO: Faces "Morales" Suit Over Failure to Pay Overtime ----------------------------------------------------------- Nelly Reyes Morales, as an individual, and on behalf of all employees similarly situated v. Del Taco LLC and Does 1 through 50, inclusive, Case No. 30-2017-00924667-CU-OE-CXC (Cal. Super. Ct., June 7, 2017), is brought against the Defendants for failure to pay overtime wages in violation of the California Labor Code. Del Taco LLC owns and operates a fast food company in California. [BN] The Plaintiff is represented by: Kevin Mahoney, Esq. Treana L. Allen, Esq. Alina B. Mazeika, Esq. MAHONEY LAW GROUP, APC 249 E. Ocean Boulevard, Suite 814 Long Beach, CA 9080244 Telephone: (562) 590-5550 Facsimile: (562) 590-8400 E-mail: kmahoney@mahoney-law.net tallen@mahoney-law.net amazeika@mahoney-law.net DEMOCRATIC NATIONAL: Suit Says Schultz Office Used Voice Changer ---------------------------------------------------------------- Daniel Chaitin, writing for the Washington Examiner, reports that an ongoing class-action lawsuit against the Democratic National Committee related to last year's presidential election just took a turn for the weird and now involves the Capitol Police. Since the summer of last year, a group of people who supported the campaign for Sen. Bernie Sanders, I-Vt., have been waging a legal battle against the DNC for alleged fraud, claiming the DNC and then-chair Debbie Wasserman Schultz worked to undermine Sanders in favor of Hillary Clinton. A court document filed with the U.S. District Court for the Southern District of Florida by their attorneys said that they received a call for information about the case from the office of Wasserman Schultz, a Democratic congresswoman from Florida, and claimed that it sounded like the caller used a voice changer. According to attorney Elizabeth Lee Beck: "At 4:54 p.m. today [June 1], an individual called our law office from '305-936- 5724.'" That number is the contact phone number for Wasserman Schultz's Aventura office in Florida. "My secretary stated that it sounded like the caller was using a voice changer, because the voice sounded robotic and genderless -- along the lines of the voice changers used when television show interviews are kept anonymous," Beck continued. "The caller concluded with 'Okey dokey,' after my secretary gave the caller public information about the case. After the call ended, a simple Google search of the phone number '305-936-5724' shows that it is the phone number for Congresswoman Debbie Wasserman Schultz' Aventura office ... What just occurred is highly irregular and we will be filing the instant e-mail with the court forthwith." Beck also included a screen shot of the caller ID information. Lawyers representing the defendants claim that no one in Wasserman Schultz's office, including the congresswoman herself, has any knowledge of the call. They also contend that there is no one working in Wasserman Schultz's Aventura office currently "due to ongoing repairs." Because the incident is related to congressional phone lines it was reported to Capitol Police, the document added. [GN] DS HEALTHCARE: Settles Securities Class Action in Florida --------------------------------------------------------- DS Healthcare Group (DSKX) on June 5 disclosed that it has reached an agreement, effective June 2, 2017, to settle the securities class action and the plaintiffs' derivative lawsuits, pending in the United States District Court for the Southern District of Florida and in the Circuit Court in and for Broward County. Both are subject to court approval. Preliminary approval has been granted in the class action. Daniel Khesin, the former Chief Executive Officer and Director of the Company, and the other Directors of the Company at the time of the alleged conduct are also parties to the settlement agreement. The lawsuits allege, among other things, improper revenue recognition. DS Healthcare denies the allegations in the lawsuit but is entering into this settlement to eliminate the uncertainties, burden, and expense of further litigation. The settlement will be funded by insurance. The Company is confident this is a major step towards allowing it to focus on its core business of developing and delivering its products to the marketplace. About DS Healthcare Group DS Healthcare Group Inc. -- http://www.dslaboratories.com-- is a developer of biotechnology for topical therapies. It markets through online channels, specialty retailers, distributors, and pharmacies. Its research has led to a highly innovative portfolio of personal care products and additional innovations in pharmaceutical projects. [GN] EPIC LANDSCAPE: Denied Overtime Pay, "Albelo" Suit Asserts ---------------------------------------------------------- Radames Molina Albelo on behalf of himself and all other persons similarly situated, Plaintiff, v. Epic Landscape Productions, L.C., Defendants, Case No. 4:17-cv-00454 (W.D. Mo., June 5, 2017) seeks unpaid straight time, overtime compensation, related penalties and damages, compensation for wages wrongfully withheld or deducted liquidated and/or other damages, attorneys' fees, costs and expenses under the Fair Labor Standards Act. Defendant is a landscaping company where Albelo worked as a manual laborer for their locations in Kansas and Missouri. Plaintiff is represented by: Michael Hodgson, Esq. THE HODGSON LAW FIRM, L.L.C. 6 NW Main St. Lee's Summit, MO 64063 Tel: (913) 890-3529 Email: mike@thehodgsonlawfirm.com - and - Paul Mose, Esq. MOSE LAW LLC 3111 Strong Avenue Kansas City, KS 66106 Tel: (913) 432-4484 Fax: (913) 432-4464 Email: Pablo@moselaw.com ERIC CONN: Court Reviews Benefits of Former Clients --------------------------------------------------- Adam Beam, writing for Associated Press, reports that at the time he was arrested for defrauding taxpayers of $600 million, disability attorney Eric Conn spoke multiple languages, had crossed the border 140 times in the past decade and had told at least six people he would flee the country instead of going to jail. Still, a federal judge released Mr. Conn on $1.25 million bail last year, citing his status as an "honorably discharged veteran with no known criminal record." June 3, one month before a judge was supposed to sentence him to prison, Mr. Conn removed his electronic monitoring device and disappeared. His escape was met with shock by some of his former clients who lost their primary source of income because of his scheme. Not surprise that he ran, but shock at the system that let him leave. Donna Dye was on her porch when she heard. She had long ago removed the porch light, one of the many cost-saving measures she said she was forced to endure since her ex-coal miner husband lost his disability benefits. She had sold several pieces of her home's furniture and rigged a system of hoses to collect water from a mountain spring to save on utilities. When the news came across the radio, she laughed. "Everybody knew he would run. If it would have been anybody else, he wouldn't have been home arrest," she said. "I hope that the FBI actually goes to the end of the Earth to find this man and bring him back to justice." Mr. Conn started his law practice in a trailer in the rural eastern Kentucky mountains and soon built it into one of the most lucrative disability practices in the country. He lived in a palatial house and billed himself as "Mr. Social Security" in outlandish TV commercials. The U.S. District Court for the Eastern District of Kentucky has issued a warrant for Mr. Conn's arrest. David Habich, the chief council for the FBI's Louisville office, said that he had no new information to share on Conn's whereabouts. Scott White, Mr. Conn's attorney, sent a text message to an Associated Press reporter to say he has not heard from Conn and does not know where he is. "Im out of the country - NOT with Eric!" the text message read. "So far as I know he is still out." In April of last year, shortly after Mr. Conn was arrested, U.S. Magistrate Judge Robert E. Wier held a hearing to decide whether Conn should be released from jail pending his trial. An FBI agent testified that, as authorities began closing in on Mr. Conn, he told two of his employees he would flee to Cuba to avoid extradition. Another employee said he would run to Ecuador. Others said he had them shred 26,000 pounds of documents and transfer money to overseas bank accounts. One employee said Conn told him: "I'll be dead before the government charges me." But Judge Wier said the government's evidence was based on hearsay. An FBI agent who testified noted all of Mr. Conn's statements were made in 2013, three years before his arrest. "The factors are significantly pro-release," Judge Wier wrote. "Conn shows mental and physical stability, has a long period of stable employment, and has life-long ties in Pike County, to include his aging mother and young daughter and his livelihood." A person who answered the phone at Judge Wier's office on June 5 said he had no comment. Judge Wier did order Conn to surrender his passport and said he could not leave the district without court approval. It's unclear if Conn traveled with permission in the year since his release. The federal government has been reviewing the benefits of 1,500 of Conn's former clients. Ned Pillersdorf, who represents those clients in a class-action lawsuit against Conn, said about 800 of them have lost their benefits. Ms. Dye said her husband recently won his appeal and hopes to begin receiving his benefits again soon. "It has turned our lives totally and completely upside down," she said. "I've nearly had nervous breakdowns over worrying with bill collectors calling, banks calling. . . . I've just given up. I'm like, 'Oh well, just take it. You take it and I'll be out on the street.' "Eventually, somehow, I'll come back." [GN] ERIC CONN: Disappears Amidst Fraud Class Action, FBI Says ---------------------------------------------------------- Adam Beam, writing for Island Packet, reports that an eastern Kentucky disability lawyer scheduled to be sentenced next month for defrauding the government of nearly $600 million has disappeared, the FBI said. Eric Conn pleaded guilty in March to stealing from the federal government and bribing a judge. He was scheduled to be sentenced next month and had been ordered to pay the government tens of millions of dollars. But June 3, the FBI said Conn removed his electronic monitoring device, violating the conditions of his bond and prompting the U.S. District Court to issue a warrant for his arrest. David Habich, general counsel for the FBI's Louisville office, said Conn's "whereabouts are currently unknown." A call to Conn's lawyer was not returned. Conn started his law practice in a trailer in 1993 and built it into one of the most lucrative disability law firms in the country. He created a persona for himself as "Mr. Social Security," fueled by outlandish TV commercials and small-scale replicas of the Statute of Liberty and the Lincoln Memorial at his office in rural eastern Kentucky. But Conn's empire crumbled when federal investigators uncovered he had been bribing a doctor and a judge to approve disability claims based on fake medical evidence. As part of his plea deal in March, he agreed to pay the federal government $5.7 million and to reimburse Social Security $46 million. A federal judge ordered Conn to pay $12 million in damages and $19 million in penalties to the government and two former Social Security employees who tried to expose the scheme. And Conn is also facing a liability judgment from a class action lawsuit brought by his former clients, with a hearing scheduled for later this month to determine the damages. "It was totally predictable that he would flee," said attorney Ned Pillersdorf, who represents Conn's former clients and said Conn's frequent world traveling was brought up in court to assess whether he was a flight risk. "I was always shocked that, when he was arrested, he was actually allowed out on bond. And there has been a betting pool going on in Prestonsburg on not if he would flee, but when." The scandal prompted the federal government to review the eligibility of about 1,500 people receiving benefits. Pillersdorf said about 800 of those people lost their benefits. "The anger toward him is overwhelming," Pillersdorf said. [GN] ETHICON: Nova Scotia Man Blames Physiomesh for Debilitating Pain ---------------------------------------------------------------- Jack Julian, writing for CBC News, reports that a Nova Scotia man believes he's facing debilitating pain because of a hernia repair mesh that's under a recall by Health Canada. Eric Hagen, 86, said the pain at his surgery site became unbearable when it flared up again. "I can't describe it today in words how much it hurt. I didn't think anything could hurt that much," he said. There are many brands of surgical meshes that can be implanted along or inside the abdominal wall to help strengthen the repair, and prevent a recurrence, which is a common issue with hernia repairs. Mr. Hagen said he received the Ethicon Physiomesh as part of a hernia repair at the Dartmouth General Hospital in 2012. The material was inserted into his abdomen as part of the surgery. "The surgeon, she told me that she used the mesh," Mr. Hagen said, because at the time, "this is a new thing." Buckled under the pain His repair gave him no trouble until one morning this March while he was chatting with a neighbour in his driveway. "All at once it just hit me, and I was to my knees," he said. Physiomesh was introduced in 2010 by Ethicon, a manufacturer of surgical supplies owned by Johnson & Johnson. The coated polypropylene mesh was designed to be inserted laparoscopically into the abdomen, and reinforce the site of a hernia repair. The company voluntarily withdrew Physiomesh from the market in May 2016. It wasn't the first time the company chose to pull its surgical mesh products. In 2012, it recalled surgical mesh implants used to treat women's pelvic organ problems following injury claims and lawsuits. Product recalled in Canada In an email statement to CBC News, the company said it withdrew Physiomesh after it discovered the product was responsible for more failures and repair operations than other meshes on the market. Health Canada recalled the product later that month. Siskinds, a law firm from London, Ont., is applying to certify a class action lawsuit on behalf of Canadian patients who have had problems with Physiomesh. Similar lawsuits are already underway in the United States. "What happens is, we allege, is that it triggers major complications," said Jane McCartney -- jill.mccartney@siskinds.com -- a lawyer with Siskinds. "It moves, and then people have mesh that's either pulled apart or moved, and isn't doing the job it was put in to do." Range of complications possible McCartney said these issues can lead to a range of complications from minor discomfort to debilitating pain and a recurrence of the hernia. The Nova Scotia Health Authority can't say how many Nova Scotians received the mesh, as those records are kept by hospitals and surgeons. Health Canada does not track how many times a medical product is used in Canada. McCartney said she believes about 30,000 Canadians received Physiomesh in Canada, an estimate she makes based on U.S. data. She said the same data indicate the mesh fails in roughly 10 per cent of cases. 'Don't panic' surgeon says A surgeon in Dartmouth said he regularly used Ethicon Physiomesh to repair abdominal hernias. "In truth I liked it. It was easy to use. It was relatively easy to put in. The results were pretty good, the patient legitimately was comfortable," said Dr. Alex Mitchell, head of surgery at the Dartmouth General Hospital. Dr. Mitchell said hernia patients have no cause to be alarmed. "If you've had a hernia repair with mesh and you are well, don't panic," he said. Dr. Mitchell said it's only worth consulting your family doctor if you're having ongoing pain or symptoms at the site of the hernia repair. 'They should be alerted' Meanwhile, Mr. Hagen said until recently he's taken pride in leading an active and independent life. He painted his house last summer, changes the oil on his pickup truck and helps his neighbours get their lawn mowers started. But he believes it's all in jeopardy. "I'm worried I'm not going to be able to look after myself. Right now, I can't look after myself," he said. Mr. Hagen said at this point he has no interest in joining a potential lawsuit. He only wants to raise awareness. 1-8 months to see a surgeon He believes patients who received a recalled mesh should be informed by the medical system. "They should be alerted, so they're forewarned," he said. Mr. Hagen said he's been referred to a surgeon for a hernia assessment, but the office won't begin scheduling new appointments until August. According to Nova Scotia's health care wait times website, it takes between one and eight months to see a surgeon about a hernia. After that, it takes another one to eight months to schedule a hernia surgery. [GN] FIAT CHRYSLER: Faces Class Action Over Jeep Wrangler Engine Damage ------------------------------------------------------------------ David Wood, writing for Car Complaints, reports that a Jeep Wrangler casting sand lawsuit alleges sludge blocks radiators, engines and oil coolers due to excess sand left from the casting of the engines during manufacturing. The class-action lawsuit says 2012-2017 Jeep Wranglers have excess sand left in the cylinder heads that seeps out gradually as the vehicles are driven. The plaintiffs say all the sand must be removed or destroyed during production of the cylinder head or other component engine parts will suffer serious problems. Specifically, any residual sand that remains from the sand-casting process in the engine can also circulate through the vehicle's cooling system and settle in the heater core, radiator, and oil cooling systems. The sand forms a sludge-like build-up in the bottom of the radiator reservoir that continues to accumulate until heating and cooling systems malfunction and fail. In July 2013, Donna and William Mooradian leased a new 2013 Jeep Wrangler Unlimited that came with Chrysler's New Vehicle Limited Warranty and Powertrain Limited Warranty. In October 2016, the heater started blowing cool air from the vents, including while trying to use the defroster to melt ice on the windshield. In January 2017 and with the odometer at 33,000 miles, and after repeatedly experiencing the same problems for several months, the plaintiffs took the Jeep for repairs and were told a sludge-like residue was found in the radiator and oil cooler. The sludge had caused the problems by restricting air flow through the cooling system. The class-action lawsuit alleges the sludge-like residue had been building up in the radiator for a number of years from residual sand from the engine casting process. The plaintiffs were informed the radiator, oil cooler and heater core would need to be replaced, something that would cost $2,600 to fix because the warranty had expired. After speaking with the service manager, the price was dropped to $300, with the dealer eating the rest of the cost. The plaintiffs say Chrysler never told them about the sludge problem because the automaker knew it would never sell the Jeep. With the sand and sludge problem, the lawsuit says the value of the Jeep Wranglers has decreased in every way, including trade-in and resale values. Jeep owners ask the automaker to repair the sludge problems within the warranty period but Chrysler refuses to cover the costs, telling the plaintiffs the problems aren't included in the warranty, or the warranty has expired. The plaintiffs say the automaker knew or should have known about the sand and sludge in 2011, especially due to the complaints lodged by Wrangler owners starting in 2012. Once owners brought the Jeeps to dealerships, those owners were never told the real cause of the problems and then were told warranties wouldn't cover the cost of repairs. According to the lawsuit, there were thousands of Jeeps manufactured using the sand-casting method since 2012, and numerous complaints across the Internet attest to the problems caused by the sand. "I bought my 2012 Jeep Wrangler used in February 2015 with approximately 11,110 miles. By this winter (2016) I had put approximately 26,000 miles on the vehicle. When I went to turn on the heat the driver's side was blowing cold air and the passenger's side hot. I took it to my local garage and they said I had casting sand built up and suggested I replace my heater core and radiator." The owner says he was advised to contact Chrysler about a "good faith" warranty replacement since Chrysler knows about the problem. The automaker told him the heater core had been replaced once already and probably needed to be replaced again. "Soooo, my heater core was flushed and now I have heat again. However, if this is a problem that results from casting sand build up (which the dealership mechanic said it was) won't this just happen again? In summary, at 11,000 miles the heater core was replaced. The new heater core needed to be replaced after 26,000 miles, but was flushed instead. I'm thinking of trading in the 2012 model for a newer one if this is a known problem with this year . . . ." Another 2012 Wrangler owner says the cost to fix heater problems is keeping him from having the heat he needs. "I bought my 2012 Jeep Wrangler Sport JK new in 2012 and it was awesome. At the time, I lived in Arizona and I never really noticed the heating problem until I moved to Missouri and last winter, I noticed it. The left side was not blowing near as hot as the right side. Its barely warm on the left. I have read many posts about the casting sand issue and I have had it flushed and it was better for a day or two. It did come back and its like before. I hear that the job is a new heater core and will cost me upwards of $2000 and I'm not in a position to pay that right now so I am just dealing with it. Jeep should take care of this as many many JK owners have dealt with this in the past." According to the Wrangler lawsuit, many automakers create engine parts using a sandcasting method that uses sand molds to form metal parts from alloys. The Jeep Wranglers have Pentastar V-6 3.6-liter (Penstar) engine blocks made by using a die-casting method rather than a sand-casting method. However, the cylinder heads that are located on top of the engines are made using a sand-casting method. And according to the plaintiffs, this is not the first time Chrysler has experienced issues with its cylinder heads in the Penstar engines. In 2012, Chrysler recalled 7,500 cylinder heads due to a "ticking" sound in the engine, stalling and other problems. Jeep Wrangler owners do not learn of the existence of the alleged defects until the heating and cooling systems fail even though the sand starts to shed from the cylinder heads and collects in the radiators immediately after the vehicles are driven. The problems also allegedly cannot be fixed by normal maintenance because regular engine flushes do not remove the thick sludge-like sand residue at the bottom of the radiator. Any relief provided by a routine engine flush is, at best, only a temporary improvement because the casting sand has already circulated within the vehicle and continues to build up in the engine. The plaintiffs say all the problems will continue until new engines are installed in the Jeeps, engines that don't contain any casting sand. The Jeep Wrangler radiator and engine sludge lawsuit was filed in the U.S. District Court for the Northern District of Ohio - Mooradian et al v. FCA US LLC. The plaintiffs are represented by Landskroner Grieco Merriman, LLC, Whitfield Bryson & Mason, LLP, and Greg Coleman Law. CarComplaints.com has complaints about the model year Jeeps named in the casting sand lawsuit: Jeep Wrangler - 2012 / 2013 / 2014 / 2015 / 2016 / 2017 [GN] FLOWERS FOODS: "Hall" Files Suit Over Unpaid Overtime Wages ----------------------------------------------------------- Gerald Hall, James D. House and John K. Ray, Individually and on behalf of all others similarly situated Plaintiffs, v. Flowers Foods, Inc. and Flowers Baking Co. of Gadsden LLC, Defendants, Case No. 1:17-cv-00932 (N.D. Ala., June 5, 2017), seeks unpaid wages at overtime rates, penalties, liquidated damages, prejudgment interest, reasonable attorneys' fees and costs and such other and further legal and equitable relief under the federal Fair Labor Standards Act and Alabama law. Defendants distribute bakery and snack food products to retail customers using a centralized network of communication, distribution and warehousing facilities. Plaintiffs work as distributors for the Defendants, delivering products to customers, distributors, stocking the products on store shelves and assembling promotional displays. [BN] The Plaintiff is represented by: Alan C. Milstein, Esq. SHERMAN SILVERSTEIN KOHL ROSE & PODOLSKY 308 Harper Drive, Suite 308 Moorestown, NJ 08057 Tel: (800) 662-0700 Fax: (856) 488-4744 Email: amilstein@shermansilverstein.com GENERAL MOTORS: Siskinds Sues Over Diesel Truck Emissions --------------------------------------------------------- Siskinds filed a proposed class action against General Motors and Bosch regarding certain diesel-powered Chevrolet Silverado and GMC Sierra heavy-duty trucks. The proposed action alleges that General Motors equipped these vehicles with software that allows them to defeat emissions testing. Bosch is alleged to have developed this software and supplied it to GM. The action alleges that under ordinary driving conditions, the vehicles emit levels of pollutants that are far higher than advertised and allowed by law. The action seeks to advance claims on behalf of all individuals or businesses in Canada who purchased or leased a 2011-2016 Chevy Silverado 2500 or 3500 or a 2011-2016 GMC Sierra 2500 or 3500 with a Duramax diesel engine. If you purchased or leased one of these trucks, please contact Siskinds LLP by phone at (800) 461-6166 ext. 2380 or by email at nicole.young@siskinds.com. About Siskinds LLP Siskinds LLP http://www.siskinds.com-- is a full-service law firm headquartered in London, Ontario and is Canada's leading class actions firm. It was also the first law firm to secure certification of a class proceeding under the Class Proceedings Act, 1992. [GN] GODADDY: Seeks Dismissal of Microsoft Office Sales Class Action --------------------------------------------------------------- Sophia Morris and Shayna Posses, writing for Law360, report that web hosting company GoDaddy.com has urged an Arizona federal judge to deny a business legal services provider's motion for class certification in litigation accusing GoDaddy of selling Microsoft Office products lacking certain features, arguing that the claims raised are more suited to an individual action. GoDaddy.com said on June 2 in an opposition to class certification that Ventures Edge Legal PLLC had failed to show that its claim for violation of the Arizona Consumer Fraud Act should be handled as a class action, saying the injuries Ventures Edge alleged are individual ones that did not affect a wide group of people and that the legal services provider has failed to point to a misleading claim by GoDaddy in the course of advertising Microsoft products. "Contrary to plaintiff's assertion, there is no uniform omission of fact in this case," GoDaddy said in its response. "Nor does plaintiff identify a uniform advertisement or disclosure related to GoDaddy's Office 365 Business Premium product that it claims is misleading -- to be clear, at no point in this litigation has plaintiff identified a single advertisement on which to base its claim and plaintiff cannot recall seeing any such advertisement." Ventures Edge filed suit in November 2015, alleging that Arizona- based GoDaddy sells a version of Microsoft's Office 365 -- a software system that provides cloud-based productivity solutions - - that it calls "Office 365 Business Premium," but doesn't tell customers that the plan it offers doesn't have all the features included in Microsoft's plan of the same name. GoDaddy claimed on June 2 that the arguments raised by Ventures Edge in its April 20 motion for class certification fail because Ventures Edge's claims are not typical of the proposed class, given that Ventures Edge allegedly renewed its Microsoft Office subscription with GoDaddy after it became aware that GoDaddy's version was slimmed down from Microsoft's. The proposed class, defined as "all individuals and entities who purchased the Office 365 Business Premium plan through GoDaddy's website since November 13, 2014" is too broad to be certified, GoDaddy argued. It is made up of customers who may not have suffered an actual injury, given that they could be happy with their Office 365 purchase, the company contended. The company also alleged a potential conflict of interest caused by the fact that attorney James L. Weintraub is the first cousin of Ventures Edge's principal Michael Greenberg, a relationship that could see the interests of a potential class suffer. Weintraub is not currently representing Ventures Edge, but he allegedly consulted on the case and will receive 10 percent of any attorneys' fees awarded in the suit, signifying that Ventures Edge is concerned more about its own claims than those of the proposed class, GoDaddy alleged. U.S. District Judge G. Murray Snow in July denied GoDaddy's attempt to escape the suit for failure to state a claim, finding that Ventures Edge sufficiently alleged that GoDaddy should have disclosed the differences between its products and the one Microsoft sells. In addition to pushing for denial of class certification, GoDaddy wants the court to exclude the opinions of Ventures Edge's experts, calling them "unreliable and irrelevant." Representatives for both parties could not be reached for comment on June 5. Ventures Edge Legal PLLC is represented by Andrew S. Friedman -- afriedman@bffb.com -- of Bonnett Fairbourn Friedman & Balint PC, and David A. Rothstein, Lorenz Michel Pruss, Jared A. Levy and Christopher M. Drury of Dimond Kaplan & Rothstein PA. GoDaddy is represented by Paula L. Zecchini -- pzecchini@cozen.com -- and Aaron M. McKown -- amckown@cozen.com -- of Cozen O'Connor. The case is Ventures Edge Legal PLLC v. GoDaddy.com LLC., case number 2:15-cv-02291, in the U.S. District Court for the Central District of Arizona. [GN] HEALTH CARE: Court Issues Scheduling Deadlines in "Sawyer" Suit --------------------------------------------------------------- The Hon. Joseph F. Leeson, Jr., entered an order scheduling deadlines pursuant to Rule 16 of the Federal Rules of Civil Procedure in the lawsuit entitled JEFFREY SAWYER v. HEALTH CARE SOLUTIONS AT HOME, INC., et al., Case No. 5:16-cv-05674-JFL (E.D. Pa.). In the event the Plaintiff's Pre-Discovery Motion for Conditional Certification is granted, all pre-certification class discovery must be completed on or before 120 days after the date of the Order in which the Motion is granted. The Plaintiff will file any future motion for class certification no later than 21 days after close of pre-certification class discovery. In the event the Plaintiff's Pre-Discovery Motion for Conditional Certification is denied, all fact discovery must be completed on or before 120 days after the date of the Order in which the Motion is denied. A copy of the Order is available at no charge at http://d.classactionreporternewsletter.com/u?f=qkjWJbdG The Plaintiff is represented by: Jason T. Brown, Esq. JTB LAW GROUP, L.L.C. 155 2nd Street, Suite 4 Jersey City, NJ 07302 Telephone: (877) 561-0000 Facsimile: (855) 582-5297 E-mail: jtb@jtblawgroup.com The Defendants are represented by: Marilyn G. Moran, Esq. FORD HARRISON, LLP 30 Rock Hill Road Bala Cynwyd, PA 19004 Telephone: (484) 436-2113 Facsimile: (610) 668-3306 E-mail: mmoran@fordharrison.com HENKEL CORP: "Buso" Suit Asserts Laundry Aid Packaging 30% Empty ---------------------------------------------------------------- Anthony Buso, individually and on behalf of all others similarly situated, Plaintiff, v. Henkel Corporation and Does 1 through 10, inclusive, Defendants, Case No. 3:17-cv-01132 (S.D. Cal., June 5, 2017), seeks damages, injunctive relief and any other available legal or equitable remedies, resulting from the deceptive packaging of Defendant's Purex Crystals product in violation of California's Consumer Legal Remedies Act, Unfair Competition Law, False Advertising Law and the Fair Packaging and Labeling Act. Defendant allegedly package its "Purex Crystals" product in opaque containers so it could hide the 30% empty space. Purex Crystals is an in-wash fragrance booster for laundry. The Plaintiff is represented by: Scott J. Ferrell, Esq. PACIFIC TRIAL ATTORNEYS A PROFESSIONAL CORPORATION 4100 Newport Place, Ste. 800 Newport Beach, CA 92660 Tel: (949) 706-6464 Fax: (949) 706-6469 Email: sferrell@pacifictrialattorneys.com HOLBROOK CONSTRUCTION: Cal. Suit Seeks to Recover Unpaid Wages -------------------------------------------------------------- Marcos Ramirez, on behalf of himself and all others similarly situated v. Holbrook Construction Company, Inc., South East Employee Leasing Services, Inc., South East Personnel Leasing, Inc., Bar Group, Inc., and Does 1 through 50, inclusive, Case No. BC664307 (Cal. Super. Ct., June 7, 2017), seeks to recover penalties arising from unpaid wages earned and due, including but not limited to unpaid and illegally calculated overtime and minimum wage compensation, illegal meal and rest period policies, failure to pay all wages due to discharged or quitting employees, failure to maintain required records, failure to provide accurate itemized wage statements, failure to timely pay wages during employment, and failure to indemnify employees for necessary expenditures and losses incurred in discharging their duties. Holbrook Construction Company, Inc. operates a construction company located at 14730 Firestone Blvd # 309, La Mirada, CA 90638. South East Employee Leasing Services, Inc. and South East Personnel Leasing, Inc. operates a payroll services company located at 2739 US-19, Holiday, FL 34691. Bar Group, Inc. operates a freight shipping and trucking company running freight hauling business from Las Vegas, Nevada. [BN] The Plaintiff is represented by: Matthew J. Matern, Esq. Matthew W. Gordon, Esq. Braunson C. Virjee, Esq. MATERN LAW GROUP, PC 1230 Rosecrans Avenue, Suite 200 Manhattan Beach, CA 90266 Telephone: (310) 531-1900 Facsimile: (310) 531-1901 HSBC: Court to Hear Investors' Motion to Consider Class Status -------------------------------------------------------------- DSNews reports that BlackRock Inc., along with other investors of residential mortgage-backed securities, recently petitioned New York federal Judge Lorna G. Schofield to hear oral arguments to advance their case (BlackRock Balanced Capital Portfolio (FI) et al, v HSBC Bank USA NA, Case number 1:14-cv-09366) to class status as they seek to collect over $3 billion in lost assets from HSBC. The initial suit claims that HSBC did not do its due diligence in protecting certificate holders, and that they failed to ensure the home loans being sold from mortgage originators and sponsors to the trust were only selling debt from credit-worthy borrowers. The suit further says that HSBC should've filtered out the bad mortgages and demanded sellers buy them back. The plaintiff's claim that HSBC's direct neglect was the cause of loses when default rates hit their peak during the housing crisis. Lawyers for BlackRock Inc., Pimco, Prudential, Charles Schwab, TIAA, and others argue that a class action suit would cover an estimated hundreds of other entities that had residential mortgage backed securities (RMBS) holdings with HSBC ranging anywhere from $100,000 to $100 million. Records and dispositions obtained from preliminary proceedings have turned up over 7.9 million documents thus far. Despite HSBC's repeated attempts to get this case and others like it thrown out, the court has agreed that the plaintiff has met the burden of proof and will now hear their motion to consider class status. In response, HSBC has filed a request for oral arguments on the matter and will attempt to block any class categorization moving forward. HSBC is also under scrutiny from a European group of certificate holders, Royal Park Investments SA/NV, who will be representing investors in three of the trusts in a separate, yet related lawsuit. No date has currently been set for oral arguments. [GN] I & I PIZZA: Sued in Ga. Over Failure to Pay Minimum & OT Wages --------------------------------------------------------------- Jamaal Russ, Anessa Walker and Christi Grant, individually and on behalf of all others similarly situated v. I & I Pizza of Atlanta, Inc. d/b/a Sarpino's Pizzeria and Ihar Dziatko, Case No. 1:17-cv- 02058-AT (N.D. Ga., June 6, 2017), is brought against the Defendants for failure to pay minimum and overtime wages in violation of the Fair Labor Standards Act. The Defendants own and operate Sarpino's Pizzeria located at 1156 Ponce De Leon, Atlanta, Georgia 30366. [BN] The Plaintiff is represented by: Charles R. Bridgers, Esq. Kevin D. Fitzpatrick Jr., Esq. DELONG CALDWELL BRIDGERS FITZPATRICK & BENJAMIN, LLC 3100 Centennial Tower 101 Marietta Street Atlanta, GA 30303 Telephone: (404) 979-3150 Facsimile: (404) 979-3170 E-mail: kevin.fitzpatrick@dcbflegal.com charlesbridgers@dcbflegal.com INGRAM & ASSOCIATES: "Candela" Action Disputes Collection Letter ---------------------------------------------------------------- Lisa Candela and Douglas Handy, individually and on behalf of all others similarly situated, Plaintiffs, v. Ingram & Associates LLC, UnitedHealth Group, Inc. and OPTUM360, LLC, Defendants, Case No. 2:17-cv-03367 (E.D. N.Y., June 5, 2017), seeks to recover damages, attorneys' fees and such other relief for violation of the Fair Debt Collection Practices. Ingram is a wholly owned subsidiary of OPTUM and UnitedHealth. It is in the business of collecting debts allegedly owed by consumers in behalf of OPTUM and UnitedHealth. The complaint says collections letter sent by Ingram do not contain any transitional language notifying Plaintiffs of their validation rights and demanding Plaintiffs make immediate payment without explaining that such demand does not override the Plaintiffs' right to dispute the debt. [BN] The Plaintiff is represented by: Craig B. Sanders, Esq. BARSHAY SANDERS, PLLC 100 Garden City Plaza, Suite 500 Garden City, NY 11530 Tel: (516) 203-7600 Fax: (516) 706-5055 Email: csanders@barshaysanders.com INTRAWEST RESORTS: Faces Class Action Over Merger Deal ------------------------------------------------------ Dorothy Atkins, writing for Law360, reports that investors hit Intrawest Resort Holdings Inc. and its board with class allegations that shareholders were never given proper information to evaluate the fairness of the luxury adventure company's $1.5 billion merger deal with Aspen Skiing Co. LLC and KSL Capital Partners. Filed in Colorado federal court, the proposed class action claims that Intrawest's May 22 information sheet filed with the U.S. Securities and Exchange Commission contains materially incomplete and misleading information on Intrawest's financial projections. The sheet also does not explain how Intrawest's financial advisers Deutsche Bank Securities Inc. and Moelis & Co. LLC valued the adventure company. "While defendants are touting the fairness of the merger [offer] to the company's stockholders in the information statement, they have failed to disclose certain material information that is necessary for stockholders to properly assess the fairness of the proposed merger," the suit says. On April 7, Intrawest's board entered into a merger agreement with the newly formed entity Hawk Holding Company Inc., which is controlled by ski resort company Aspen SkiCo and private equity shop KSL. Under the merger, stockholders would receive $23.75 in cash for each share of Intrawest common stock they own. The next day, on April 8, Fortress Investment Group LLC, which owned 67.9 percent of the Intrawest's nearly 40 million outstanding shares, approved all respects the proposed merger. As a result, no further action by any stockholders is required to adopt the merger, and the company does not have to solicit any votes from the shareholders, the suit says. On April 10, Intrawest announced it had entered into an agreement to be acquired by KSL and Aspen SkiCo, which owns and operates four high-end mountain ski areas in Aspen, Colorado. June 2's suit says that at the time of the merger agreement, on April 7, Intrawest's stock was trading at $25.50 per share. But instead of receiving a premium for their shares, as is customary in merger situations, the merger forces investors to sell their shares for a discount, the suit claims. The suit notes that since the announcement, Intrawest's stock price has fallen "sharply" to $23.60. "In sum, it appears that the merger consideration fails to adequately compensate Intrawest stockholders, and is the result of a flawed sales process during which company management and the board failed to conduct a sufficient and robust review of strategic alternatives," the complaint states. The suit claims that it is "imperative" that Intrawest disclose the material information that has been omitted to stockholders immediately. Stockholders have until June 12 to submit a written demand for appraisal, and if they do not, they will lose all appraisal rights, the suit says. The merger is expected to close by the end of the third quarter of calendar year, according to Intrawest's announcement. Intrawest owns and operates six mountain resorts, including Steamboat Springs and Winter Park. Collectively, the resorts have approximately 8,000 skiable acres and more than 1,100 acres of land for real estate development, according to the company's site. Intrawest's income was $156.3 million in its third quarter, according to a May 5 report. Representatives for Intrawest and counsel for the shareholders did not immediately respond June 2 to requests for comment. The shareholders are represented by Juan E. Monteverde, Esq. -- jmonteverde@monteverdelaw.com -- of Monteverde & Associates PC and Nadeem Faruqi, Esq., and James M. Wilson Jr., Esq. -- jwilson@faruqilaw.com -- of Faruqi & Faruqi LLP. Counsel information for Intrawest was not immediately available. The case is Hyden v. Intrawest Resorts Holdings Inc. et al., case number 1:17-cv-01337, in the U.S. District Court for the District of Colorado. [GN] ISHARES TRUST: Class Action Plaintiffs' Claims Not Time Barred -------------------------------------------------------------- All About Alpha reports that late last year a California state court found that the plaintiffs in a class action suit stated a cause of action when they alleged that the defendant, iShares Trust, had failed to disclose the material risk of using market or stop loss orders in connection with ETFs. This spring the same court also said that the plaintiffs have stated factual claims that could allow them to overcome their statute-of-limitations problem. The plaintiff class consists of those who bought shares of BlackRock iShares ETFs between June 2013 and August 2015, in time to be hurt by the "flash crash" in that latter month. The complaint (in the court's paraphrase) "alleges pertinent offering documents did not contain sufficient warnings including those on the peculiar susceptibility of ETFs to flash crashes." The statute of limitations issue arose because the defendants plausibly claimed that the very large drop in ETF trading prices in 2010 should have provided a "storm warning" to any diligent investor that ETFs are subject to such risks. The plaintiffs were then on constructive notice of their claims more than one year before their filing: thus the bar. In the end, the Hon. Curtis E.A. Karnow of the Superior Court decided that the claims are not time barred, because the plaintiffs have alleged actions by the defendants obfuscating the cautionary nature of the 2010 event, an obfuscation that if it happened as alleged might well have confused a reasonable investor. This litigation may have a long and winding road ahead of it, but the fact that the plaintiffs have gotten as far as they have should give the managers of ETFs pause. It isn't just a matter of re-working the offering documentation. Managers must work harder than they sometimes have to be sure that what they provide to investors by way of information is in line with what investors want and need from them. This, as it happens, was the subject of an important EDHEC document from last August, one dealing with a particular piece of the ETF market, the smart beta indexed ETFs. Is management giving investors what they want and need in that space? Deemed to Be Important The document is based upon EDHEC's 9th annual survey of European investment professionals on the question of how they perceive the role of exchange traded funds in their portfolio management. It was the third year in a row that EDHEC had dedicated a portion of the survey to the use of products that track smart beta indexes. These "smart beta" index ETFs have seen "tremendous growth recently, in terms of both assets under management and new products, as illustrated by global figures provided by ETFGI," a consultancy headquartered in London. One problem, though, that may slow growth going forward is that there is a gap between information about these products that is "deemed to be important" by actual or potential investors, and information that is readily available. For example, on a scale of 0 to 5 (where 0 represents information of no value whatsoever and 5 represents information of metaphysical or eschatological significance) investors rate information about the index construction methodology very high: 4.28. On the same 0-5 scale for ease of access, though, investors rate this point at 3.07. On another issue that was important to the plaintiffs in the iShares Trust case, that of liquidity/capacity, the importance number is 4.2, the ease of access number is 3.05. Information About Beta Products The mean score for importance is 3.82. The mean for access is 2.75. These results, say EDHEC's authors, "suggest that investors do not believe that information considered important for assessing smart beta strategies is made available to them with sufficient ease." The Authors Noel Amenc, first-named author of the study, is a professor of finance at EDHEC-Risk Institute and the CEO of ERI Scientific Beta. He's also a member of the Monetary Authority of Singapore Finance Research Council. Felix Goltz is the head of applied research at EDHEC-Risk Institute. Veronique Le Sourd has a Master's Degree in applied mathematics from Curie University in Paris, and is at present a senior research engineer at EDHEC-Risk. [GN] KATE SPADE & CO: "Jauregi" Sues Over Shady Merger Deal ------------------------------------------------------ Alfredo Jauregi, on behalf of himself and all others similarly situated stockholders, Plaintiff, v. Kate Spade & Company, Craig A. Leavitt, Deborah J. Lloyd, Nancy J. Karch, Lawrence S. Benjamin, Raul J. Fernandez, Carsten Fischer, Kenneth B. Gilman, Kenneth P. Kopelman, Douglas Mack, Jan Singer and Doreen A. Toben, Defendants, Case No. 1:17-cv-04205 (S.D. N.Y., June 5, 2017), seeks to preliminarily and permanently enjoin Defendants and all persons acting in concert with them from proceeding with, consummating, or closing the acquisition of Kate Spade by Coach, Inc. The Plaintiff seeks costs of this action, including reasonable allowance for attorneys' and experts' fees and such other and further relief for violation of the Securities Exchange Act of 1934. Coach will acquire all outstanding shares of Kate Spade for $18.50 in cash per share of Kate Spade's common stock where the proposed transaction is valued at approximately $2.4 billion. The Merger's Recommendation Statement fails to provide Kate Spade's financial projections, data and inputs underlying the financial valuation analyses, Kate Spade insiders' potential conflicts of interest and the background process leading to the transaction, says the complaint. Kate Spade operates principally under two global, multichannel lifestyle brands, namely Kate Spade New York and Jack Spade. Coach is a leading New York design house of modern luxury accessories and lifestyle brands. [BN] The Plaintiff is represented by: Evan J. Smith, Esq. BRODSKI & SMITH, LLC 9595 Wilshire Blvd., Suite 900 Beverly Hills CA Telephone: (877) 834-2590 Email: esmith@brodskismith.com KEHE DISTRIBUTORS: Faces "Russell" Suit Over Failure to Pay OT -------------------------------------------------------------- Stephen Russell, individually and on behalf of all others similarly situated v. Kehe Distributors, Inc. and Does 1-100, inclusive, Case No. 2:17-at-00592 (E.D. Cal., June 6, 2017), is brought against the Defendants for failure to pay overtime wages in violation of the Fair Labor Standards Act. Headquartered in Illinois, Kehe Distributors, Inc. is a natural foods distributor. [BN] The Plaintiff is represented by: Robert J. Wasserman, Esq. William J. Gorham, Esq. Nicholas J. Scardigli, Esq. John P. Briscoe, Esq. MAYALL HURLEY P.C. 2453 Grand Canal Boulevard Stockton, CA 95207-8253 Telephone: (209) 477-3833 Facsimile: (209) 473-4818 E-mail: rwasserman@mayallaw.com wgorham@mayallaw.com nscardigli@mayallaw.com jbriscoe@mayallaw.com KING TACO: Sued in Cal. Over Failure to Properly Pay Employees -------------------------------------------------------------- Sarahi Lopez, individually an on behalf of all others similarly situated v. King Taco Restaurant, Inc. and Does 1 through 30, inclusive, Case No. BC664175 (Cal. Super. Ct., June 7, 2017), is brought against the Defendants for failure provide accurate wage statements, failure to pay minimum wages, failure to reimburse all business-related expenses in violation of the California Labor Code. King Taco Restaurant, Inc. owns and operates a chain of Mexican fast-food restaurants in California. [BN] The Plaintiff is represented by: Larry W. Lee, Esq. DIVERSITY LAW GROUP, PC 515 S. Figueroa St., Suite 1250 Los Angeles, CA 90071 Telephone: (213) 488-6555 Facsimile: (213) 488-6554 LEXINGTON COUNTY, SC: ACLU Sues Over Debtor's Prison ---------------------------------------------------- Abigail Darlington, writing for Post and Courier, reports for people living below the poverty line across South Carolina, a single traffic violation can be enough to send them into a downward spiral of debt, jail time and more debt. The American Civil Liberties Union and Terrell Marshall Law Group are targeting the issue with a class-action lawsuit filed on June 1 in a U.S. District Court in Columbia. The case challenges Lexington County's practice of jailing people who can't afford to pay court fines for minor offenses. Nusrat Choudhury, the senior staff attorney with ACLU's Racial Justice Program, said the groups also will notify other entities in South Carolina about the need to address what she called "the modern-day debtors' prison." "This lawsuit is a call to action," she said. "Poor people should never be locked up behind bars because of their poverty." The lawsuit is the latest of at least seven the ACLU has pursued around the country since 2015. Others that were successful in Dekalb County, Ga., and Biloxi, Miss., led local courts to reform how they treated low-income people faced with fines, such as holding hearings to determine how much they could afford to pay. Some similar reforms are taking shape in Charleston, where the Charleston County Criminal Justice Coordinating Council is examining how offenders of minor crimes can avoid bench warrants and jail time. Some strategies include pretrial screenings to evaluate whether an offender is indigent, and if so, ensuring he or she has a public defender. Kristy Danford, who works with the council, wasn't surprised the ACLU was putting a spotlight on South Carolina. "This is a big national issue, and we're seeing it play out here just like we're seeing it across the country," she said. "I think it's our obligation to be mindful of the principles of justice in general. If we are stepping out of those lines, we need to find our way back to them." South Carolina law allows county court clerks to issue bench warrants when fines are past due, in some cases only five days after they're issued. The state can levy other penalties, such as revoking someone's driver's license, but many offenders end up spending time in county jails across the state. Before his death by a North Charleston police officer in 2015, Walter Scott had a warrant out for his arrest for failing to make child support payments that had added up to more than $18,000. He ran from an April 4, 2015, traffic stop and got into a struggle with North Charleston officer Michael Slager. The officer said Scott grabbed his Taser during the scuffle. As Scott started running again, Slager fired eight shots, hitting him five times in the back. Slager has since pleaded guilty in federal court to violating Scott's civil rights. Scott was sent to jail at least three times over a 15-year period for not paying child support. He told The Post and Courier in 2003 that serving jail time caused him to lose his job, and made it more difficult to stay on top of the payments. Rodney Scott, his brother, has said he thinks his brother ran from the officer because he didn't want to go back to jail. Orrie West, a circuit public defender in Horry County, said she's seen many poor and homeless people stuck in a cycle of debt and incarceration. "They lose their jobs, then they lose their public housing," she said. "Then, when they finally get out (of jail), they get a low- paying job at McDonald's, and they still can't afford to pay their fine." More than 30 years ago, the U.S. Supreme Court ruled that judges cannot send people to jail just because they are too poor to pay their court fines. But many judges have said it's difficult to determine if a defendant can pay. Lexington County records show more than 1,000 people risked jail time in the past year for failing to pay fines owed to the magistrate court, according to the statement released on June 1 by the ACLU. The ACLU also said many of those arrested ended up staying in jail for weeks without seeing a judge or getting help from an attorney. One plaintiff in the case, Marshinda Brown, said she spent 57 days in the Lexington County jail because she fell behind on payments for a traffic citation. She lives in subsidized housing with her children and works at a fast food restaurant. "The poorest people among us, particularly people of color, are punished disproportionately," said Choudhury of the ACLU. "It's not just wrong and unfair, it's counterproductive and wasteful." The Lexington County Detention Center was built to hold 599 inmates, but it has struggled for years with overcrowding. Choudhury said finding alternatives to incarceration, such as income-based payment plans for citations, would help Lexington County solve two problems at once. "What we see around the country is that courts can and do hold people accountable while protecting fairness and treating the rich and poor equally," she said. Harrison Cahill, Lexington County's public information officer, said the county's attorney is reviewing the court documents but declined to comment further. [GN] LITTLE CAESARS: Lawyers Spar in $100M Lawsuit Over 'Halal' Pizza ---------------------------------------------------------------- Detroit News reports that Little Caesars claimed on June 2 that a Muslim man suing the company for $100 million after he allegedly ate pizza containing pork pepperoni, despite ordering halal, got what he asked for. "He had ordered a halal pizza, came into the store, canceled that order and asked for a Hot and Ready instead," said attorney J. Michael Huget, who represents Little Caesars. "That's what he ordered." Huget said the company's investigation into the May 24 incident concluded that Mohamad Bazzi, a 32-year-old Dearborn man, looked at his pizza at the restaurant and then changed his order to a Hot and Ready pizza, which contains pork pepperoni. A conversation with a store employee, which Bazzi secretly recorded as he later confronted the worker, supports the company's stance, Huget said. "A quote from one of the store employees is 'That's what you asked for,'" Huget said. Bazzi's attorney, Majed Moughni, has denied those claims. On June 2, Moughni said another complaint from a separate plaintiff -- a former Dearborn Police officer -- could be filed as early as next week. Bazzi's class action lawsuit filed in Wayne County Circuit Court claims the restaurant violated Michigan State Law 750.297f, which it referred to as the "Wayne County Halal and Kosher Anti-Fraud and Truth-in-labeling ordinance." Islamic law prohibits Muslims from eating pork. Bazzi claims that in two separate incidents -- in March and May -- he received pizzas with pork pepperoni when he had ordered halal pepperoni. Named as defendants in the suit are Little Caesars Pizza, Little Caesar Enterprises Inc., a manager named Denise and two unnamed employees. In the March 20 incident, Huget said he hasn't seen any evidence to support Bazzi's claims that he received a pizza with pork pepperoni despite ordering halal. "We don't have the pizza," Huget said. "The pictures aren't very good. He has a sticker on a box. We don't know if he bought another pizza and swapped it." The pizza company, Moughni contends, is trying to discredit his client by saying earlier June 2 that Moughni had plans to drop the lawsuit following a meeting on June 1 over Bazzi's claims. "Little Caesars lied," Moughni said. "They lied about the talks that we had with them. The email (Huget) clearly says we are going to refile. We have other plaintiffs. I don't know why they would jump the gun." "It seems like Little Caesars wants to try this case in the media and not the court of law," Moughni added. Earlier June 2, Huget said the case was going to be dropped. He later followed up saying Bazzi changed his mind and would be pursuing the lawsuit. "(Moughni) said 'I'm going to dismissed the Bazzi lawsuit,' " Huget said. He added that Moughni didn't say he wasn't going to pursue a case against the company, just not with Bazzi as a plaintiff. "I thought we established that (Bazzi's) claims were not well founded," Huget said. "That's what he told me and he obviously changed his mind." Moughni said that he was going to file a new lawsuit to make some changes -- such as the length of time Bazzi said he was in the store -- and to name additional plaintiffs. The plan was never to drop Bazzi's claims, he said. "It's the same story over and over again," Moughni said. "These people can tell they've been eating pork. They put two and two together." [GN] MATTAMY HOMES: Faces Class Action Over Property Damage ------------------------------------------------------ Yolian Ortiz, writing for Fox 46, reports that an overflow pipe in a new development is causing property damage to a Steele Creek home. The homeowner reached out to FOX 46 Charlotte to get some pressure put on the developers to fix the flooding that's forming in his property. Mattamy Homes is already facing a citation from the City of Charlotte because part of the lake they are building eroded and sediment from it went into Lake Wylie. The overflow pipe was built to let the water drain from the lake to avoid that problem but the issue it's now draining straight into David Smith's property. Smith says on rainy days his backyard looks more like a swamp than his garden. "It's stagnant. It smells. There's mosquitos. Not one of the happiest places to be," Smith said. photo The issue started in October when this pipe was put in but directed straight into Smith's property. Smith says he's tried to resolve the situation with attorneys and had a couple meetings with Mattamy home but was dismissed by the company and since then nothing has changed. "No one came to my house, no one send me a letter, no one gave me a phone call. They just went ahead and did it without permission," Smith said. The City of Charlotte's Land Development division tells FOX 46 Charlotte the pipe was put in according to the approved plans and permits. "Someone from the city came up with the concept of 'yes your design is extremely good' but I think they completely forgot they were dumping it into my property," Smith said. The recent erosion of the man-made lake caused sediment to flow into his property and Lake Wylie. With permission from Smith, Mattamy Homes came into his property to fix the breach putting in bags across the stream to filter the sediment. "It just doesn't work," Smith said. A month ago Smith finally filed a class action lawsuit against Mattamy Homes and still hasn't heard anything from the company. He's spent about $10,000 in legal fees but he's hoping this time around Mattamy Homes actually fixes the problem and gets rid of the swam his yard has become. FOX 46 Charlotte reached out to Mattamy Homes and in an e-mail Spokeperson Brent Carey says: "Because this case is currently before the courts, we won't be able to provide any comments." FOX 46 Charlotte showed Smith's video of the pipe to the Land Development Division of the City of Charlotte and they say the water should be running clear and that's something that alarms them and will be looking into the case. [GN] MCCARTHY BURGESS: Illegally Collects Debt, "Weigle" Suit Claims --------------------------------------------------------------- Steven Weigle, individually and on behalf of all others similarly situated v. McCarthy, Burgess & Wolff, Inc., Case No. 1:17-cv- 01874-SEB-MJD (S.D. Ind., June 6, 2017), is brought against the Defendants for violation of the Fair Debt Collection Practices Act, specifically by failure to state in the initial form collection letter the name of the creditor to whom the debt was then currently owed. McCarthy, Burgess & Wolff, Inc. operates a debt collection business and attempts to collect debts from consumers in many states, including consumers in the State of Indiana. [BN] The Plaintiff is represented by: David J. Philipps, Esq. Mary E. Philipps, Esq. Angie K. Robertson, Esq. PHILIPPS & PHILIPPS, LTD. 9760 S. Roberts Road Suite One Palos Hills, IL 60465 Telephone: (708) 974-2900 Facsimile: (708) 974-2907 E-mail: davephilipps@aol.com mephilipps@aol.com angiekrobertson@aol.com - and - John T. Steinkamp, Esq. 5214 S. East Street, Suite D1 Indianapolis, IN 46227 Telephone: (317) 780-8300 Facsimile: (317) 217-1320 E-mail: steinkamplaw@yahoo.com MCGUYER HOMEBUILDERS: Faces "Vazquez" Suit Over Failure to Pay OT ----------------------------------------------------------------- Epifanio Vazquez, on behalf of himself and all others similarly situated v. McGuyer Homebuilders, Inc. a/k/a Plantation Homes, Aguilar Masonry, and Adalith Aguilar, Case No. 3:17-cv-01494-L (N.D. Tex., June 6, 2017), is brought against the Defendants for failure to pay overtime wages for work performed in excess of 40 hours weekly. McGuyer Homebuilders, Inc. engages in building luxurious and customized homes in Texas. [BN] The Plaintiff is represented by: J.H. Zidell, Esq. Robert L. Manteuffel, Esq. Joshua A. Petersen, Esq. J.H. ZIDELL, P.C. 6310 LBJ Freeway, Ste. 112 Dallas, TX 75240 Telephone: (972) 233-2264 Facsimile: (972) 386-7610 E-mail: zabogado@aol.com rlmanteuffel@sbcglobal.net josh.a.petersen@gmail.com MISSOURI: Social Services Dept. Sued Over Psychotropic Drugs ------------------------------------------------------------ Summer Ballentine, writing for the Associated Press, reports that child advocates groups, Children's Rights, the National Center for Youth Law and Saint Louis University School of Law Legal Clinics, filed a federal lawsuit against the Missouri Department of Social Services June 12 over allegations of inappropriately providing psychotropic drugs to foster care children and systemic lack of oversight of the medications. According to AP, the organizations filed the lawsuit on behalf of several Missouri children currently or formerly in foster care, including a 14-year-old boy who has been prescribed as many as seven psychotropic drugs at one time. They ask a federal district judge to grant the lawsuit class- action status and order Missouri to implement systemic changes aimed at curtailing potential overprescribing of the drugs. According to the report, the lawsuit claims psychotropic drugs are often prescribed as "chemical straight-jackets" for foster care children with attention deficit hyperactivity disorder or conduct disorder even though there are few to no Food and Drug Administration-approved uses for the drugs among children. The plaintiffs' attorneys say there's little research on how the drugs impact children's brains, and that possible side effects include disorders that cause twitching, Type 2 diabetes, psychosis and suicidal thoughts. Attorneys for the group say the lawsuit is the first of its kind nationwide that focuses only on psychotropic drugs given to foster children, according to the report. The state attorney general's office didn't immediately comment on the lawsuit, the report says. NATIONAL PARKING: "Charron" Seeks Overtime Pay, Back Wages ---------------------------------------------------------- Matthew Charron, on behalf of himself and those similarly situated, Plaintiff, v. National Parking Solutions, LLC and Marc Ebersole, Individually, Defendants, Case No. 1:17-cv-02047, (N.D. Ga., June 5, 2017), seeks to recover minimum wages and unpaid overtime wages pursuant to the Fair Labor Standards Act. Defendant is a full service valet parking and parking management company specializing in high-service parking programs where Plaintiff worked as a valet attendant. [BN] Plaintiff is represented by: Carlos V. Leach, Esq. MORGAN & MORGAN, P.A. 191 Peachtree Street, N.E., Suite 4200 Post Office Box 57007 Atlanta, GA 30343-1007 Tel: (404) 965-8811 Facsimile: (404) 496-7405 Email: CLeach@forthepeople.com NEW YORK: Commissioner Sued Over LT Care Services Termination ------------------------------------------------------------- Marie Turano, Leonard Turano and Gemma Samele, individually and on behalf of all persons similarly situated v. Howard Zucker, Case No. cv-17-3397 (E.D.N.Y., June 6, 2017), is brought on behalf of all recipients of Medicaid who have long-term illnesses and disabilities that make them dependent on long-term care services, including home care, in order to continue living in their homes in the community, that are now at risk of reductions or terminations of their care in violation of the Medicaid Act and the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. Howard Zucker is the Commissioner of the New York State Department of Health. [BN] The Plaintiff is represented by: Jane Greengold Stevens, Esq. Elizabeth Jois, Esq. Ben Taylor, Esq. Stewart Dearing, Esq. 7 Hanover Square, 18th Floor New York, NY 10004 Telephone: (212) 613-5000 Facsimile: (212) 750-0820 E-mail: jstevens@nylag.org ejois@nylag.org btaylor@nylag.org sdearing@nylag.org PANERA BREAD: Faces Scott And Gina Suit Over JAB Holdings Merger ---------------------------------------------------------------- Scott And Gina Rudy Living Trust Dated March 18, 2011, on behalf of itself and all others similarly situated v. Panera Bread Company, Ronald Shaich, William W. Moreton, Domenic Colasacco, Larry Franklin, Fred Foulkes, Thomas E. Lynch, Diane Hessan, Mark Stoever, and James White, Case No. 4:17-cv-01627 (E.D. Mis., June 6, 2017), is brought on behalf of public stockholders of Panera Bread Company , to enjoin the merger agreement of Panera with JAB Holdings B.V., Rye Parent Corp., and Rye Merger Sub, Inc. for $315.00 in cash per share. According to the complaint, in order to convince Panera's stockholders to vote in favor of the Proposed Transaction, the Director Defendants authorized the filing of a misleading Form PREM 14A with the Securities and Exchange Commission on or about May 12, 2017 in violation of Sections 14(a) and 20(a) of the Exchange Act. The Proxy contains incomplete and materially misleading information regarding: (i) the process that resulted in the Proposed Transaction and the conflicts of interest infecting it, (ii) the financial analysis conducted by the Company's financial advisor, Morgan Stanley & Co. LLC ("Morgan Stanley"), and (iii) the projections used by Morgan Stanley in those analyses. Panera Bread Company is a national food service company known for its bakery-cafe concept. [BN] The Plaintiff is represented by: James J. Rosemergy, Esq. CAREY DANIS & LOWE 8235 Forsyth, Suite 1100 St. Louis, MO 63105 Telephone: (314) 725-7700 Facsimile: (314)721-0905 E-mail: jrosemergy@careydanis.com - and - Juan E. Monteverde, Esq. MONTEVERDE & ASSOCIATES PC The Empire State Building 350 Fifth Avenue, Suite 4405 New York, NY 10118 Telephone: (212) 971-1341 Facsimile: (212) 202-7880 E-mail jmonteverde@monteverdelaw.com PARTY ANIMAL: Falsely Marketed Dog Food, "Black" Suit Claims ------------------------------------------------------------ Wendy Black, an individual and on behalf of herself and all others similarly situated v. Party Animal, Inc., Evanger's Dog and Cat Food Company, Inc., and Does 1 through 500, inclusive, Case No. BC664138 (C.D. Cal., June 6, 2017), is brought on behalf of all persons who purchased Party Animal organic brand dog food that was falsely marketed by the Defendants as "organic" and "healthy", when in fact it contains substances that are toxic to animals and that have resulted in the serious illness and deaths of pets around the United States. The Defendants manufacture, distributes, markets and sells pet foods in the United States. [BN] The Plaintiff is represented by: Jane M. Braugh, Esq. SICO HOELSCHER, HARRIS & BRAUGH LLP 225 S. Lake Avenue, Suite 300 Pasadena, CA 91101 Telephone: (626) 432-5476 Facsimile: (626) 432-5477 - and - Roger S. Braugh Jr., Esq. SICO HOELSCHER, HARRIS & BRAUGH LLP 802 N. Carancahua, Suite 900 Corpus Christi, TX 98401 Telephone: (361) 653-3300 Facsimile: (361) 653-3333 PEARLS AUSTRALASIA: Indian Gov't Can Recover Funds in Australia --------------------------------------------------------------- Anthony Klan, writing for The Australian, reports that Indian authorities will be quarantined from about $100 million being recovered from the sale of Australian luxury properties bought with money from the subcontinent's $10 billion Pearls Ponzi scam. Judge Bernard Murphy of the Federal Court in Brisbane said the Indian government would not be handed the money and instead Indian investors would be required to apply to Australia to recover their portion of the recovered funds. The move was to shield the money from issues with the Indian- government bureaucracy, in the case investors were successful in their legal bid to recover the funds. Lawyer and corporate investigator Niall Coburn, who is representing 46,000 Pearls investors seeking to recover funds from Australia, said the move was "very good news" for investors. "I've spoken to investors and they are very pleased with the judge's comments because they believe if the funds went home they may never see them," he said. In 2009, an arm of Pearls, Pearls Australasia, was created and an estimated $130m of investor funds were brought here, funding the purchase of the Sheraton Mirage on the Gold Coast and several luxury homes bought in the names of children of Pearls founder Nirmil Singh Bhangoo. Pearls collapsed, leaving its tens of millions of mainly poor investors with nothing. Pearls Australasia was founded by Mr Bhangoo and family members, and two Gold Coast property developers, Paul Brinsmead and Peter Madrers, who were introduced to Pearls by government business investment agency Austrade. Despite investing no money in the Sheraton, and owning less than 0.5 per cent of the shares in the company that bought the five- star hotel, Mr Madrers and Mr Brinsmead claim they are owed half of the $87m gained from its recent sale. The action taken by Mr Coburn has meant that the money has all been placed in a trust account while the class action case is worked through the courts and a decision is made on who owns the money. Mr Coburn said Mr Madrers and Mr Brinsmead had recently served an affidavit claiming they "urgently need a couple of million from the fund", which a court will be required to rule on. It can also be revealed that two of Mr Bhangoo's daughters and their husbands have been served with notices informing them the class action is attempting to sell the luxury homes bought with Pearls money. Those include a Gold Coast Sanctuary Cove mansion bought for $4.95m and a home in Melbourne's Mont Albert bought for $2.38m. Mr Coburn said the homes were worth between $12m and $15m in all, taking to about $100m the funds the class action is seeking to have returned to Indian investors. He said Indian authorities had refused to assist in his class action last year, but now it appeared a large amount of money was at stake, the Securities and Exchange Board of India had taken an interest in the case, becoming legally involved. [GN] PRIDE MOBILITY: CAT Takes Permissive Approach in Class Action ------------------------------------------------------------- Out-Law.com reports that National Pensioners Convention (NPC) general secretary Dot Gibson launched the claim last year against Pride Mobility Products, arguing that the company had breached competition law and overcharged around 30,000 customers. The claim followed an Office of Fair Trading (OFT) finding of illegal resale price maintenance (RPM) by Pride in 2014. The claim was the first case filed in the wake of the introduction of opt-out collective action rules through the 2015 Consumer Rights Act. They allow damages actions to be brought on behalf of groups of individuals in certain circumstances, regardless of whether they have actively 'opted in' to the claim. Previously, collective actions could only be brought on an 'opt in' basis, and by a listed 'representative body'. Such claims can only proceed after a certification hearing by the Competition Appeals Tribunal (CAT), which decides whether or not the claim can proceed on a collective basis. In the case brought by Gibson the CAT hearing lasted three days and involved an examination of the proposed economic analysis behind the claim, which estimated that damages would be worth between GBP2.7 million and GBP3.2m, before interest. In March the Competition Appeals Tribunal (CAT) handed down judgment, expressing significant concerns with the economic approach to the claim. It adjourned the application to give Ms. Gibson the opportunity to amend her claim. On June 2 the NPC said Ms. Gibson was withdrawing the claim, having decided it was "not worth enough money to proceed given the costs". Competition law expert Ben Lasserson -- ben.lasserson@pinsentmasons.com -- of Pinsent Masons, the law firm behind Out-Law.com, said: "The CAT took a permissive approach, allowing a 'second bite at the cherry' in terms of the certification application, but in this particular instance the level of potential damages available meant that it did not make sense to pursue the claim further. "The CAT's judgment nevertheless offers helpful guidance as to the approach that will generally be taken to certification in future cases. In particular, applicants should expect their economic methodology to damages to be scrutinised carefully even at this early stage," Mr. Lasserson said. [GN] PRIORITY WORKFORCE: Sued Over Failure to Properly Pay Workers ------------------------------------------------------------- Andrea Esparza and Ruiz De Lara, on behalf of all others similarly situated v. Priority Workforce, Inc., South East Employee Leasing Svcs, South East Personnel Leasing, Inc., Weckerle Sales Corporation, Weckerle Gmbh, Weckerle Cosmetics, and Does 1 to 100, inclusive, Case No. BC663894 (Cal. Super. Ct., June 6, 2017), is brought against the Defendants for failure to permit a first meal period to the employees' sixth hour of work or pay meal premium wages, failure to provide accurate wage statements, and failure to timely pay employees all wages due upon separation of employment. The Defendants provide customized staffing solutions in the United States. [BN] The Plaintiff is represented by: Joseph Lavi, Esq. Vincent C. Granberry, Esq. Vanessa Kamau, Esq. LAVI & EBRAHIMIAN, LLP 8889 W. Olympic Blvd., Suite 200 Beverly Hills, CA 90211 Telephone: (310) 432-0000 Facsimile: (310) 432-0001 PROSPECT MEDICAL: "Meneses" Suit Seeks to Recover Unpaid OT Wages ----------------------------------------------------------------- Cynthia Meneses, on behalf of herself and all others similarly situated and the general public v. Prospect Medical Holdings, Inc., Alta Los Angeles Hospitals, Inc. d/b/a Los Angeles Community Hospital, and Does 1 to 100, inclusive, Case No. BC664012 (Cal. Super. Ct., June 6, 2017), seeks to recover unpaid overtime wages, injunctive relief, declaratory relief and restitution in violation of the California Labor Code. The Defendants operate a healthcare services company that owns and operates 18 hospitals in California. [BN] The Plaintiff is represented by: Joseph Antonelli, Esq. Janelle Carney, Esq. LAW OFFICE OF JOSEPH ANTONELLI 14758 Pipeline Ave., Suite E, 2nd Floor Chino Hills, CA 91709 Telephone: (909) 393-0223 Facsimile: (909) 393-0471 E-mail: JAntonelli@antonellilaw.com - and - Barry S. Phillips, Esq. 100 S. Citrus Ave., Suite 101 Covina, CA 91723-2680 Telephone: (626) 915-0610 Facsimile: (626) 915-1415 E-mail: BP@barryphillips.com RED INN: Banquet Wait Staff File Class Action Over Tips ------------------------------------------------------- Katy Ward, writing for Wicked Local, reports that a class action suit has been filed against Red Inn owner David Silva and managers Philip Mossy Jr. and Sean Burke alleging that they used wait staff gratuities from banquets to defray labor costs, violating the state's tipping and minimum wage laws. Nathan Butera, who worked as a server at the restaurant from April 2011 to October 2016, is spearheading the lawsuit on behalf of a group of other wait staff, which could include 25 people or more. The owner and managers, Mr. Butera claims, were giving tips to the front desk host, kitchen staff, dishwashers, managers and housekeepers for the inn, all of whom are not eligible under state law to be compensated in that way. "After working there for a while you get an idea how much [an event] will cost," Mr. Butera said on June 2 during a conference call. "I started discussing it with other servers and we couldn't make the numbers work as far as tips from the event from the owners." Attorney Adelaide Pagano -- apagano@llrlaw.com -- of Lichten & Liss-Riordan filed an amended version of the suit on March 9, which states that the defendants failed to give full gratuities to banquet wait staff; required wait staff to pay five percent of their tips to employees who are ineligible to share wait staff tips; paid wait staff the tipped service rate ($3.75) rather than minimum wage ($11); and thus violated state law. "It's fine if they want to be generous, but what they are really doing is using our tip money to defray their labor costs," Mr. Butera said. "If they wanted to be generous they should be paying [other employees] more rather than using our tip money. Also the customers are under the impression that servers are receiving the gratuity, and that's misleading to the customer." Before seeking legal help, Mr. Butera confronted Silva, Mossy and Burke, but says he did not receive any credible answers. "They claimed to be ignorant of this law," Mr. Butera said. "It became clear that they didn't want to change their policy and going into the next year it would be the same. That wasn't acceptable to us. . . . It was also clear they did not see anything wrong with it and were not going to change. Our only other option was to seek legal help, and that's what we did." In May, however, the Red Inn issued a "confidential settlement agreement and release of claims" to current and former servers. "The release is something they are sending to current and former employees," Ms. Pagano said. "The idea being if they sign and accept it they would not be a part of our case. That was something that concerns us because we want to make sure people are making decisions not because they are intimidated, coerced or don't have all the information." The settlement offer asks current and former employees, by signing, to confirm that the Red Inn did not engage in any wrongdoing, did not violate the law and did not act improperly, and that they believe the punitive class action has no merit. David Chick, a server at the Red Inn from June to October 2016, received a document offering a settlement payment of $175. "The parties agree that the Settlement Payment represents a full settlement of all claims of any nature whatsoever that Chick has raised or could raise against the Red Inn parties," the agreement states. Mr. Chick will not sign it. "I'll do anything I can to support [this class action suit]," Mr. Chick said, adding that he witnessed a lot of "shenanigans" and favoritism happening in his one season there. But others might sign. Mr. Butera thinks some people are worried they'll be fired or lose shifts if they don't. "The thing is, you don't have to fire a server," Mr. Butera said. "You can just dramatically reduce their income by reducing their time and giving them poor shifts. . . . I think some people are scared to speak publicly. It's scary and it's a small town. I'm hoping to see some positive changes made." Ms. Pagano said it's hard to say how much Mr. Butera and class members might receive because the case is still in its early stages. In addition to restitution, they are also seeking statutory trebling of damages (potentially tripling the settlement amount) and attorney fees. "We haven't done discovery, where we get access to records and do a full accounting to find out how much money was diverted," she said. "It could potentially be a lot of money." The defendants' response to Mr. Butera's motion is due on June 21. "We filed the case as a class action so that we could try to recover what is owed to the entire group and make everyone whole," Ms. Pagano said. Messrs. Silva, Mossy and Burke all declined the Banner's requests for comment. Their attorneys, Robin Reid of Provincetown and Brian Haney of Sweden and Ross in Boston, did not return calls. [GN] SANTA FE UNIVERSITY: Faces More Fraud Suits From Students --------------------------------------------------------- Robert Nott, writing for The New Mexican, reports that three more students are suing the Santa Fe University of Art and Design, accusing the for-profit school and its parent company, Laureate Education Inc., of fraud and breach of contract for deciding to close the school after the spring 2018 semester. The class-action lawsuit, filed in state District Court, is similar to a lawsuit filed by three other students in April, shortly after university officials announced plans for closing the school next year. Only students who will be seniors can return to the four-year university in the fall to complete their degrees. The students in the latest lawsuit -- Zac Franklin, Raven Two Feathers and Kevin Brennan -- are asking the court to award them damages to be determined by a trial. Justin Miller, one of several Santa Fe attorneys representing students in both cases, said the three new plaintiffs are representative of all the students who would have returned to the college next year had it not made plans to close down. Miller said an another 21 students have joined the original lawsuit, filed by students Lucian Orsinger, Mark Baker-Sanchez and Calvin Ambrose Taylor. College spokeswoman Rachael Lighty said the university will not comment on litigation. [GN] SAUDI ARAMCO: New York Listing Poses Class Action Litigation Risk ----------------------------------------------------------------- Reuters reported that the legal firm working on Saudi Aramco's flotation has advised the kingdom that a New York listing poses the greatest litigation risk of any jurisdiction. White & Case and others offering informal counsel have briefed top oil executives and the kingdom's highest authorities, emphasizing a litigious culture in the United States, the FT said. Legal risks arising from a New York listing include U.S. legislation that could allow families of the victims of the 9/11 attacks of 2001 to sue Saudi Arabia, the FT said. Aramco could also face class-action suits if it did not comply with U.S. regulators' rules on disclosing reserves and data for oil companies, while aggressive shareholder lobby groups in the United States are also seen as a threat. A New York Stock Exchange listing and one on Saudi Arabia's Tadawul exchange has been the favored option for Saudi Aramco as Saudi officials and Saudi Aramco's financial advisers believe the venue has the deepest pool of investors and is the most prestigious, the FT said, citing documents. A premium category listing on the London Stock Exchange alongside a domestic offering was seen as the next best option, followed by a standard listing on the LSE for Saudi Aramco, the FT said, citing the documents. Legal counsel is now implying that London is now the front-runner, it said. Saudi Aramco did not immediately respond to requests for comment outside regular business hours. White & Case declined to comment on the report. Saudi Prince Mohammed bin Salman, who is the head of Saudi Arabia's oil affairs, is expected to make a final decision within weeks, the FT said, citing an internal timetable. The LSE, seen as one of the front-runners to win part of the IPO, has been pushing hard to land it. Sources told Reuters in May that the LSE is working on a new type of listing structure that would make it more attractive for Saudi Aramco to join. [GN] SECURE LENDING: "Bruce" Sues Over Unpaid Overtime Premiums ---------------------------------------------------------- Dawn Bruce, John Lee and Travis Pearson, individually, and on behalf of all others similarly situated, Plaintiff, v. Secure Lending Inc. and Mehedi Hassan, Defendants, Case No. 1:17-cv- 01172, (Del. Ch., June 2, 2017), seeks to recover unpaid overtime, unpaid wages, liquidated damages, interest, attorneys' fees and costs under the Fair Labor Standards Act. Defendants own and/or operate Secure Lending Inc., a loan service and finance company whose primary marketplace offering is loan- and-financing-related services. Plaintiffs worked for the Defendants as Inside Sales Agents, performing various repetitive tasks such as cold calling potential customers using leads provided by Defendants in order to pre-qualify potential customers for loans, loan refinancing, mortgages, reverse mortgages, and other sales-related work. [BN] Plaintiff is represented by: Clifford P. Bendau II, Esq. Christopher J. Bendau, Esq. THE BENDAU LAW FIRM PLLC P.O. Box 97066 Phoenix, AZ 85060 Telephone: (480) 382-5176 Email: cliffordbendau@bendaulaw.com - and - James L. Simon, Esq. 6000 Freedom Square Dr. Independence, OH 44131 Telephone: (216) 525-8890 Facsimile: (216) 642-5814 Email: jameslsimonlaw@yahoo.com SENTRY INSURANCE: Final Settlement Approval Hearing on June 30 -------------------------------------------------------------- The Kenton Circuit Court (Division 3), in Covington, Kentucky, will hold a hearing on June 30, 2017, to consider final approval of the settlement reached in the case captioned, Patricia Jarboe v. Sentry Insurance, A Mutual Company, Civil Action No. 08-CI- 2173. Objections to the settlement are due June 28, 2017. The settlement applies only to Kentucky residents whose homes or cars were insured by Sentry Insurance (SIAMCO), for any period of time between June 22, 2001, and December 31, 2007. Non-Kentucky residents are not eligible. The lawsuit alleged that certain local government taxes on insurance policy premiums paid by Sentry insureds residing in Kentucky were overcharged or improperly collected. Kenton Circuit Court certified a class action for settlement purposes to resolve the lawsuit. Former insureds in Kentucky who paid insurance premiums to Sentry between June 22, 2001 and December 31, 2007 are entitled to a refund of $25.00 for each home or car insurance policy. Refund checks will be mailed to qualified claimants. Information on the settlement is available at: http://www.KentuckyPolicyPremiumSettlement.com The court appointed, as attorneys for all Settlement Class Members: Alexander F. Edmondson, Esq. Jason V. Reed, Esq. Edmondson & Associates 28 West Fifth Street Covington, KY 41011 - and - John C. Whitfield, Esq. Whitfield & Cox, P.S.C. 19 N Main St Madisonville, KY 42431 Tel: 270-821-0656 - and - Gary E. Mason, Esq. The Mason Law Firm, L.L.P. 1625 Massachusetts Ave NW #605 Washington, DC 20036 Tel: 202-429-2294 Kurtzman Carson Consultants serves as claims administrator. Copies of the settlement objections must be sent to Edmondson & Associates, and to: John L. Tate, Esq. Stites & Harbison PLLC 400 W. Market Street, 18th Floor Louisville, KY 40202 SOUTHWESTERN ENERGY: Competing Class Action Hampers Settlement -------------------------------------------------------------- Max Brantley, writing for Arkansas Times, reports that a $45 million settlement of a class action lawsuit against Southwestern Energy is imperiled by heated action in a competing class action lawsuit in federal court. Late in May, Southwestern Energy announced a preliminary settlement of a lawsuit claiming royalty owners in the Fayetteville shale had been underpaid for gas taken from their land. That was in a Conway County circuit court case and a final hearing on that settlement is scheduled later this month. The settlement provides that about $20 million of the settlement will go to lawyers. Some, but not all of the same landowners are covered in a class action case in federal court. It was scheduled to go to trial on June 5 before federal Judge Brian Miller. Key issue: The settlement terms in the state case provide that the settlement may be terminated if the case goes to trial on June 5. The federal filings have come fast and furiously in recent days. They have included emergency appeals by the gas company in favor of preserving the state court settlement. Allegations of misconduct mark the pleadings. Settling parties in the state case are anxious to dispose of the federal case, which they see as just a bid by lawyers to get a share of fees. The lawyers for landowners in the federal case argue that the settlement is a bad deal for landowners and a good deal for the lawyers in the state case and the gas company. A gas glut has dropped gas prices and resulted in a virtual end to exploration in the Fayetteville shale, a relatively expensive gas play to drill. But gas continues to be produced from the play. The suit settled in state court has been litigated for seven years and covers some 13,000 landowners deprived of proper payments from 2006 to 2016. It provides for compensation for past underpayments and a new calculation of exploration expenses on future payments. Southwestern Energy has tried repeatedly to delay the June 5 trial. Words have grown heated. In an order on May 31 Judge Miller described the motions as delaying actions and responded sharply to the gas company's criticism of his handling of the case. The gist of their argument, said Judge Miller, is that the plaintiffs' attorneys should be disqualified for entering into a "secret" agreement with attorneys representing state court class members so that the two suits could proceed on parallel tracks. That is, the state claim would represent Arkansas residents and the federal court claim would cover people outside Arkansas. The argument goes that they no longer want to go along with that agreement (the existence of which is disputed by the plaintiffs in the federal case.) The judge wrote: "Suspecting such an agreement existed, defense counsel alerted the federal court that lawyers were attempting to certify "slice[s]" of the class action pie and divide fees between the lawyers. "The defendants advocated for a broad nationwide class in federal court, and defense counsel represented that such an arrangement would eliminate prejudice from any suspected agreement "because there is no longer any charge of divided loyalties" between class counsel and its class members. The nationwide class without the Arkansas exclusions was eventually certified, and the defendants have not raised that issue again until now, though now they frame their argument as one premised on class counsel misleading the federal court. For the defendants to now argue that the agreement jeopardizes class counsels' adequacy -- but apparently, only class counsel in the federal case where a settlement has not materialized -- is disingenuous." Judge Miller refused to stop the long-scheduled trial in federal court. On June 2, the 8th U.S. Circuit Court of Appeals denied the gas company's emergency request to override Miller. So, at the moment, the case is on for June 5. The filings in the case have grown heated. The gas company has accused Miller of abusing his discretion. He's forcefully disputed that. Lawyers for plaintiffs in the federal case (known as the "Smith case") have accused those who settled the state case (known as the "Snow case") of collusion with the gas company. . . . in an attempt to settle on the cheap and avoid a trial here, Defendants entered into a collusive reverse auction settlement that (i) pays the Snow plaintiffs' attorneys two-thirds of the cash benefit ($20 million), (ii) judicially endorses a fraudulently-created gathering charge which guarantees Defendants $101 million in future profits from the Smith Class, and (iii) provides less than $10 million to be shared amongst over 12,000 settlement class members to address well over $193 million in actual and statutory damages. Second, as evidenced by the Snow transcript, Defendants violated ethical rules and the Court's Orders and disrupted this litigation by sending notice to the Smith class. In addition to violating Court Orders and the attorney-client relationship between Class Counsel and the Class, the notice -- rushed out around midnight on May 19 -- was misleading because it contained no reference to the Smith case nor any explanation of how the Snow settlement effects Smith Class members. Given the misleading nature of the Snow notice and the fact that this Court's notice advised Class members that if they "DO NOTHING," they will "[s]tay in this lawsuit" and "stay in [this] Class" approximately 12,000 Smith Class members would have no reason to respond to the Snow notice. Instead, they would reasonably rely on the representations in the Smith notice that this Court would oversee their claims that would be litigated by Smith Class Counsel in federal court. Smith Class members have been provided no reason to believe otherwise. This is not a mistake. Defendants knowingly created this situation in an effort to jam a collusive settlement through state court before the impending trial in this case. The Court cannot allow the claims of Smith Class members -- over which it exercises supervisory control -- to be waived or their Due Process rights to be violated as a result of Defendants' end-run around the Court's supervisory authority. Lawyers for Smith case plaintiffs want sanctions imposed against the defense lawyers for misleading their clients about the nature of the state settlement. Among others, they want records in the federal case unsealed so they could be available for the state judge to consider in a final hearing on approving the state court settlement to help judge whether that settlement is fair. Here's the full motion for sanctions. The record indicates Judge Miller still has under submission the request for a contempt citation and sanctions against the defense lawyers. He has granted a defense motion to exclude testimony about the state court settlement from the federal trial. The developments have brought new parties into the case, including an effort to intervene by a landowner covered in the state court settlement who argued that the Smith case lawyers are trying to undermine that settlement only because they want out of the supposed secret fee agreement. The potential intervenor (whose effort to enter the case was denied by MIller) said they have decided to risk a trial "not for the benefit of the Class, but because their settlement hands are tied due to a substantial and irreconcilable conflict of interest." The case employs an army of lawyers. Lawyers for plaintiffs in the federal case include Ben Caruth of Morrilton, Erik Danielson of Fayeteville, members of the Kessler Topaz firm of Pennsylvania that has figured in many a hot class action legal/political story in Arkansas, former state senator Allen Gordon, lawyers from Texas and Oklahoma and J.F. Valley of Helena-West Helena. Lawyers on the defense side include lawyers from Texas, Rex Terry of Fort Smith and lawyers from the Kutak Rock office in Little Rock, with recent filings attempting to stop the trial coming particularly from Jess Askew of Little Rock with Kutak Rock. Plaintiffs lawyers in the state court settlement include Tulsa lawyers and Joe Cambiano and Dale Lipsmeyer of Morrilton. In state court, they've filed an extensive brief disputing the allegations of collusion raised in the federal case. They contend that their suit, as the first of several filed over gas payments, should take priority. It faults the Smith counsel for failing to include more than 4,000 landowners covered in their case. "The potential for chaos has been heightened and inflamed" by counsel in the federal case, they said. They contend there IS a fee settlement agreement and the Smith lawyers have breached it and lied about it. The federal court lawyers said they had an agreement only as it applied to a mediation effort, which failed. The state court lawyers dispute this vigorously. The nut of that argument is in this portion of the pleading in Morrilton. It closes by saying that, due to actions by the federal case lawyers, "the settlement in this case is in grave danger." There's a third class action, known as the Stewmon case, in state court but it has seen little action since being certified as a class action. [GN] SOUTHWINDS INSPECTION: "Berrisford" Seeks Unpaid Overtime Pay ------------------------------------------------------------- Carlo Berrisford, on behalf of himself and on behalf of all others similarly situated, Plaintiff, V. Southwinds Inspection Corp., Defendant, Case No. 1:17-cv-00117 (D.N.D., June 5, 2017), seeks overtime compensation, liquidated damages, interest, and attorneys' fees and costs pursuant to the Fair Labor Standards Act. Southwinds Inspection Corp. is an oilfield services company that provides specialized inspection services to its clients in the drilling and pipeline industries where Plaintiff worked as an inspector from approximately February of 2012 to February of 2016. The Plaintiff is represented by: John Neuman, Esq. SOSA-MORRIS NEUMAN ATTORNEYS AT LAW 5612 Chaucer Drive Houston, TX 77005 Telephone: (281) 885-8844 Facsimile: (281) 885-8813 Email: jneuman@smnlawfirm.com SYNGENTA AG: Trial over Viptera Corn Begins in Kansas ----------------------------------------------------- Steve Vockrodt, writing for The Kansas City Star, reports that a major trial started June 5 in Kansas City, Kan., that has farmers accusing Swiss agriculture giant Syngenta AG of hurting the domestic market for corn when it introduced a strain of corn seed in the U.S. that the Chinese government for years would not accept for import. The report notes the trial consolidated thousands of cases brought by farmers who are prepared to argue that their damages could reach $5.77 billion as a result of using Syngenta's corn seed. Syngenta maintains that the domestic corn market was not harmed by China's decision to stop importing corn grown with one of its seed products, according to the report. The report recounts that Syngenta sold a strain of corn seed in the U.S. called Viptera in 2010, a genetically-modified corn seed product. The U.S. allowed the use of Syngenta's products in 2010. China, meanwhile, had to approve the import of corn grown with genetically-modified corn seed. Syngenta told farmers that China would accept corn crops for import for the 2011 harvest. China ultimately stopped accepting imports of U.S. corn grown with Viptera in 2013. The report notes that local law firms involved in the Syngenta litigation include Stueve Siegel Hanson as lead and liaison counsel for the plaintiffs and Berkowitz Oliver as liaison counsel for Syngenta. TENNESSEE: DCS Soon to Operate Without Court Oversight ------------------------------------------------------ Anita Wadhwani writing for The Tennessean reports that a 17-year- old federal court case against the Department of Children's Services is expected to reach an end, allowing the child welfare agency to operate independently for the first time since a New York watchdog agency filed suit. The case began in 2000, when attorneys for Children's Rights charged in a federal class-action lawsuit that DCS was violating the rights of kids in foster care and subjecting children to physical and emotional harm. Named for Brian A., a 9-year-old boy who spent seven months in an overcrowded Memphis emergency shelter with dangerous older boys and little access to education, the suit resulted in hundreds of new standards that DCS was required to meet. Last year DCS was able to demonstrate that it had met or exceeded a host of benchmarks that include smaller caseloads for social workers, keeping siblings together, and limiting the number of times kids move from one foster family to another. Under its agreement with Children's Rights, DCS had to maintain those benchmarks for a full year before the case could end. The court-ordered changes included better services for youth who are 18 when they leave foster care. Previously many of those children had no place to go and no support. Hannah Harrison, 23, said such DCS programs helped her as a freshman in college after spending the prior eight years in foster care, where she was placed after being abused by her mother. Her father, who was an alcoholic, died when she was 8. "It was a really hard time for me and I was struggling," Harrison said. "I was able to learn different life skills, how to apply for a job -- just the kind of skills you need as an adult that foster kids don't often have." Longtime child welfare advocates said the agency has made vast improvements from the often appalling conditions faced by foster children 17 years ago. "In the old days, kids would come into care and it would be a black hole," said Pat Lawler, CEO of Youth Villages, which contracts with DCS to provide foster homes and treatment to about 2,300 children each day. Lawler said a key shift has been focusing on getting children out of state custody as quickly as possible. "What's so different now is that everyone at DCS, advocates, judges, providers are all in line in wondering what's best for children and families, and it's not living in a foster home or an institutional home for the rest of their young lives," he said. Under the terms of the legal settlement, DCS will create an "external accountability center" of outside and neutral experts from Vanderbilt University and the Chapin Hall Center for Children at the University of Chicago, which will take over from the court the job of independently monitoring the state's child welfare agency for another 18 months and providing public updates on its operations. The agency was expected to reach the end of court oversight years ago, but suffered serious setbacks after revelations about the department's slow responses to child deaths and a flawed computer system that could not track child deaths. The agency and its former chief Kate O'Day came under intense scrutiny from state lawmakers, child advocacy groups and a Tennessean investigation into the deaths or near deaths of more than 200 children in state care. O'Day subsequently resigned. Last month The Tennessean reported that kids were sleeping in DCS offices because there was no place else to put them. DCS Commissioner Bonnie Hommrich said "it breaks all of our hearts," and said DCS officials are working to expand the number of available beds for children. Hommrich said that while she is "thrilled" the case is drawing to a close, "the work goes on. We will always have tough problems before us. At DCS, we promise to bring our full energy and attention to whatever lies ahead. And we will use the same focus and dedication that has brought us to this point today." [GN] THC-ORANGE: Does Not Properly Pay Employees, "Song" Suit Claims --------------------------------------------------------------- Emmy Song, as an individual and on behalf of all others similarly situated v. THC-Orange County, Inc. and Does 1 through 100, inclusive, Case No. 8:17-cv-00965 (C.D. Cal., June 6, 2017), is brought against the Defendants for failure to pay proper minimum and overtime wages, provide accurate itemized wage statements, and failure to timely pay wages to terminated employees in violation of the Fair Labor Standards Act. THC-Orange County, Inc. provides healthcare services in California. [BN] The Plaintiff is represented by: Larry W. Lee, Esq. DIVERSITY LAW GROUP, P.C. 515 S. Figueroa St., Suite 1250 Los Angeles, CA 90071 Telephone: (213) 488-6555 Facsimile: (213) 488-6554 E-mail: lwlee@diversitylaw.com - and - Edward W. Choi, Esq. LAW OFFICES OF CHOI & ASSOCIATES 515 S. Figueroa St., Suite 1250 Los Angeles, CA 90071 Telephone: (213) 381-1515 Facsimile: (213) 465-4885 E-mail: edward.choi@calaw.biz - and - Alex Cha, Esq. J. Edward Kim, Esq. LAW OFFICES OF ALEX CHA 1055 W 7th St., Fl. 28 Los Angeles, CA 90017 Telephone: (213) 351-3513 Facsimile: (213) 351-3514 E-mail: alex@alexchalaw.com edward@alexchalaw.com UBER: Fights Drivers' Bid to Revive Claims Over Improper Fees ------------------------------------------------------------- Daniel Wiessner, writing for Reuters, reports that Uber Technologies Inc has told a U.S. judge that despite its recent admission that drivers in New York were charged millions of dollars in inflated fees, he should not consider reviving a proposed class action claim that the company breached its contract with them. Uber's lawyers at Littler Mendelson filed a short letter in federal court in Brooklyn on June 1 asking U.S. District Judge Nicholas Garaufis to reject a request by two drivers to reconsider his March decision dismissing the claim, which is part of a larger lawsuit, in light of the company's concession. [GN] WHITELINE EXPRESS: "Bell" Sues Over Denied Overtime Pay ------------------------------------------------------- Richard Bell, on behalf of himself and those similarly situated nationwide, Plaintiff, v. Whiteline Express, Ltd., Defendant, Case No. 3:17-cv-01481 (N.D. Tex., June 5, 2017), seeks to recover overtime compensation, liquidated damages, attorney's fees, litigation costs, costs of court, prejudgment and post-judgment interest and injunctive relief under the provisions of the Fair Labor Standards Act of 1938. Plaintiff work as a shuttle driver for the Defendant's commercial trucking business. [BN] Plaintiff is represented by: Tom Carse, Esq. CARSE LAW FIRM 6220 Campbell Road, Ste. 401 Dallas, TX 75248 Telephone: (972) 503-6338 Facsimile: (972) 503-6348 Email: tom@carselaw.com WHOLESOME GOURMET: Fails to Pay Workers OT, "Chamorro" Suit Says ---------------------------------------------------------------- Jose Jorge Chamorro, individually and on behalf of all other persons similarly situated v. Wholesome Gourmet Market, Inc. and Brooklyns Natural Food Corp. V, and/or any other entities affiliated with or controlled by Wholesome Gourmet Martket, Inc. and Brooklyns Natural Food Corp. V, Case No. 155220/2017 (N.Y. Sup. Ct., June 7, 2017), is brought against the Defendants for failure to pay overtime wages for work over 40 hours in a week. The Defendants own and operate a gourmet grocery store located at 534 Flatbush Avenue in Brooklyn, 1306 Atlantic Avenue in Brooklyn, and 2126 Caton Ave. in Brooklyn. [BN] The Plaintiff is represented by: Lloyd R. Ambinder, Esq. Jack Newhouse, Esq. VIRGINIA & AMBINDER, LLP 40 Broad Street, 7th Floor New York, NY 10004 Telephone: (212) 943-9080 E-mail: lambinder@vandallp.com jnewhouse@vandallp.com YELP INC: Has Made Unsolicited Calls, "Sapan" Action Claims ----------------------------------------------------------- Jonathan Sapan, individually and on behalf of all others similarly situated v. Yelp, Inc., Case No. 3:17-cv-03240 (N.D. Cal., June 6, 20170, seeks to stop the Defendants' practice of using an artificial and prerecorded voice to deliver a message without prior express consent of the called party. Yelp, Inc. is on online service that publishes and curates reviews of local businesses throughout the United States. [BN] The Plaintiff is represented by: Christopher J. Reichman, Esq. PRATO & REICHMAN, APC 8555 Aero Drive, Suite 303 San Diego, CA 92123 Telephone: (619) 683-7971 E-mail: chrisr@prato-reichman.com ZILLOW: Asserts Zestimates Class Action Without Merit ----------------------------------------------------- Harold Bubil, writing for Herald Tribune, reports Zillow, the online real estate marketing company, gets most of the criticism in its field because it is the biggest player in its field. Redfin and Trulia give online estimates of home values, but it is Zillow's Zestimate that is the most popular of these similar features. For one thing, it's free, and you don't have to fill out a form and await a response. But Zestimate also is the reason Zillow is being hit with a class- action lawsuit. A homeowner in Illinois claims the Zestimate on her townhouse is too low by about $75,000 and is preventing her from being able to sell the property. She has had it listed at $626,000. She claims Zillow is acting as a real estate appraiser without a license and not doing a very good job of it. She calls the Zestimate deceptive and unfair to consumers. Zillow says the suit is without merit. It notes that the median error rate on Zestimates is 5 percent -- a lot better than it used to be. Still, the company is offering $1 million to the person or team that comes up with the best renovation of Zillow's automated valuation algorithms. This may be a dare on Zilllow's part, as in, "We dare you to come up with a better procedure than ours." I say, if you want your house appraised, hire a licensed real estate appraiser. If you want to price it for sale, invite a few real estate agents over to give you comparative market analyses. If you want a quick, cheap, easy talking point for your next dinner party, stick with the Zestimate. Regarding the suit, the Zestimate -- I like it as a starting point for conversations about home values -- amounts to free speech and fair comment. You may think of your home as private property, but in another sense, you are a caretaker; the home remains in the community realm and generates tax dollars for the common good. Its value is important to your neighbors. Information from public property-tax records is fed into Zillow's "proprietary" formula to reach an estimated market value for each of the 110 million homes in its database. It is extremely unlikely that these value estimates would be as accurate as an appraisal prepared by a professional appraiser over the course of a day or two of research. No, the Zestimate is the application of computer science and math to data sets that do not necessarily have all the relevant facts. Appraising is an art as well as a science. Appraisers do their homework and find out if the property in question has been completely renovated or is functionally obsolete. Conversely, the computer may not know about adverse conditions that might affect its value. The appraiser likely will. Real estate agents claim Zillow is full of inaccurate information. Pointing to the fact that rival Realtor.com's listings are updated every 15 minutes from Multiple Listing Services, they say listings on Zillow tend to linger in "for-sale" status long after they have sold, for example. My experience with this is that since the Herald-Tribune started publishing its Market Snapshot feature in the Saturday Real Estate section in 2011, Zillow has been used as a source of information -- as well as Realtor.com -- for photo captions and rarely has been wrong. (One Realtor did complain that he had changed brokerages six months earlier and also had changed the price of the property that I had published, and that Zillow still showed the old brokerage and the old price. But he had not updated the listing information in Zillow.) I also wonder if people complain to Zillow that their Zestimate is too low if they are using it to appeal a property tax assessment. This class-action suit seems questionable to me. Zillow markets properties and provides advertising services for real estate agents. Its Zestimate is an automated opinion, at best. If you really want to know what your house is worth (unless you live in a tract development where the homes are pretty much the same), hire a pro. [GN] * Big Changes Could be Coming to Class Action Lawsuits ------------------------------------------------------ Philip Barilovits, Esq., at Hinshaaw and Culbertson LLP, in an article for JD Supra, wrote that class actions, especially those with nationwide scope and the specter of huge payouts, have long been the stuff of nightmares for in-house counsel and corporate executives. The press regularly report on settlements where plaintiffs' counsel walked away with millions in attorney fees while the aggregate recovery by the class was much smaller. The Class Action Fairness Act of 2005 (the 2005 CAFA) significantly changed how class actions were litigated. Advocates of the legislation said it would reduce forum shopping by expanding federal jurisdiction over certain class actions and allowing greater court scrutiny of class action settlement agreements (including settlements with so-called "coupon" components). But the 2005 CAFA did not solve all the problems that class action critics wanted Congress to address. In response, the U.S. House of Representatives passed H.R. 985 in March of this year, with the relevant section of the bill titled the "Fairness in Class Action Litigation Act of 2017.". For simplicity's sake, we will call this bill the 2017 CAFA. The bill has now moved on to the Senate, and in late March was referred to the Senate Judiciary Committee. Given the current political situation in Washington, it's anyone's guess as to when the bill will be reported out of committee (if at all) much less come to a full vote. Corporate clients should, nonetheless, be aware of the terms of the bill being considered. If the Senate ends up passing the bill and the President signs it into law, the 2017 CAFA has the potential to change class action practice in dramatic ways. Here are the 2017 CAFA's main provisions, each of which will make important changes to the current law for class actions: 1. Similarity of Injury: Before a federal judge can certify a class for personal injury or monetary damages, the named plaintiff must "demonstrate that each proposed class member suffered from the same type and scope of injury" as the putative class representative. In any order certifying such a class, the court "shall" include a determination, based on a "rigorous analysis" of the evidence submitted that this requirement has been met. (Section 1716.) 2. Conflicts of Interest/Disclosures: The bill would also require, in any class action complaint, a statement by the putative class counsel whether the proposed class representative is a relative, a former or present employee, a former or present client (with the exception of the class action at issue) or whether the class representative has any contractual relationship with the class counsel. A court may not certify a class where any such conflicts of interest exist. Interestingly, the complaint must also "describe the circumstances" in which the named plaintiff in which the named representative agreed to be included in the complaint and any other class actions the named representative has played a "similar role." (Section 1717.) 3. Ascertainability: Addressing an issue that has garnered the attention of several federal courts of appeal, the bill would mandate that no class could be certified unless the class is defined with "objective criteria" and the class representative "affirmatively demonstrates" that there is a reliable and feasible mechanism for the court to determine if the proposed class members fall within the class definition and "distributing directly to a substantial majority of class members any monetary relief for the class." (Section 1718(a)). Although many courts had read an ascertainability requirement as being implicit in Rule 23 already, some courts, notably recently the Ninth Circuit, see Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017), disagreed. This would essentially end that debate and, arguably, strengthen the ascertainability requirement many courts had already mandated. 4. Attorney Fees. In a significant departure from practice, CAFA 2017 would specifically require that no class attorney fees will be "determined or paid" until the distribution of any funds to the class members "has been completed." (Section 1718(b)(1).) In another significant departure, a federal court could not grant attorney fees to any class counsel beyond a "reasonable percentage" of any amounts "distributed to and received by class members." (Section 1717(b)(2).) This would seem to prohibit so- called "claims-made" settlements, where class counsel would be paid according to what a theoretical upper limit of recovery for the class is no matter how small that recovery ends up being. This practice has been under some criticism, such as from Judge Richard Posner of the Seventh Circuit. "In no event," the bill continues, "shall the attorney fees award exceed the total amount of money directly distributed to and received by all class members." (Section 1717(b)(2).) 5. Stay of Discovery: If any motion (such as a motion to dismiss, motion to strike class allegations, or any other motion which would dispose of the class allegations) is filed, "all discovery and other proceedings shall be stayed" unless the motion is brought and the court finds that discovery must continue to preserve evidence or avoid undue prejudice. (Section 1721.) 6. Appeal: The bill would also give an immediate right to appeal from a class certification order. (Section 1723.) Current law (Federal Rule of Civil Procedure 23(f)) allows for an appeal, but both the trial court and the appeals court must agree to consider the appeal. 7. Third Party Funding Disclosure: The bill would also require disclosure of any third party (besides members of the class or class counsel) who would have any contingent right to receive proceeds of the lawsuit. (Section 1722.) 8. Money Distribution Data: The bill would also require reporting a detailed list of actual moneys distributed to class members to two federal court administrative bodies, which will then be required to submit an annual report summarizing such information. (Section 1720.) 9. Effective Date. Finally, the version of the bill passed by the House provides that these amendments "shall apply to any civil action pending on the date of enactment . . . or commenced thereafter." (Section 107.) This bill has been referred to the Senate Judiciary Committee. There, it could be adopted in substantially the same form, adopted with major changes (perhaps requiring a conference between the two houses) or outright rejected. We will monitor this important bill's progress in the coming months. [GN] * Financial Industry Braces Impact of Fiduciary Rule ---------------------------------------------------- Joseph Lawler, writing for Washington Examiner, reports that with a major Obama rule that will reshape the financial planning sector set to start going into effect, the industry is plotting its options for lightening its burden. To ease the impact of the Department of Labor fiduciary rule, which will require financial advisers to act in their clients' best interests, the Chamber of Commerce and other big industry groups hope to enlist Congress in pressuring the Trump Labor Department to revise the rule and for the more business-friendly Securities and Exchange Commission to write its own rule on the topic. "This may end up being a three-legged stool," said David Hirschmann, head of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, referring to the prospect of action by Congress, the SEC and the Labor Department. The financial industry lobbied hard over the past year and a half to stop the Obama administration from implementing the fiduciary rule, as it is known. Teaming with congressional liberals, Obama pushed the rule as part of his fourth-quarter, pen-and-phone regulatory agenda. He argued that the rule was necessary to prevent some advisers and brokers from bilking savers with tax- privileged accounts, such as IRAs. Conflicts of interest in the industry, with brokers steering clients into inappropriate high- fee investment products in return for kickbacks, cost savers $17 billion annually, the Obama White House calculated. Industry groups, however, argued that the rule would make it unprofitable to maintain clients who are small savers or small businesses, resulting in many people losing access to investment advice. President Trump gave them hope in January, when he issued an executive order requiring the Labor Department to review the rule before it was supposed to take effect, which prompted a brief delay from the agency. Although that was seen as the possible prelude to a much longer delay and possible walking back of the rule, newly installed Labor Secretary Alexander Acosta announced in a late May Wall Street Journal op-ed that part of the rule would be enacted on June 9. Administrative law prevented him from further delaying the rule, he explained. Yet his agency is still reviewing comments it solicited during the brief delay and is expected soon to solicit more comments from businesses and advocates on both sides of the issue. Some Republicans objected to the Trump Labor Department's letting the rule go through at all. Rep. Jeb Hensarling, the chairman of the House Financial Services Committee, suggested that Obama holdovers in the agency subverted the administration's will. In the meantime, industry groups aim to keep the pressure on Congress and the agencies by highlighting people who will be disadvantaged by the rule, even if outright blocking it is no longer a possibility. "Our goal now is to work to mitigate that harm and to work with the regulator both at the SEC and at the Department of Labor," said Jill Hoffman, vice president of Government Affairs for Investment Management at the Financial Services Roundtable. Some members of her trade group are still trying to calculate the effects of the new regulation and what they can and cannot live with, she said. At issue is the threat of class-action lawsuits against advisers and brokers. While companies can usually conform to and plan around regulations, Mr. Hirschmann said, "that's such a jackpot justice arrangement that it simply makes it hard to understand what your costs are going to be, who you can serve." In a 20-page report, the Chamber of Commerce listed a range of problems that the fiduciary rule would create or has already generated for savers, according to industry sources who filed comments with the Labor Department. Up to 11 million people with IRAs through brokers could lose their brokers, according to the Securities Industry and Financial Markets Association. One survey found that nearly three-quarters of financial advisers plan to drop some low-balance clients. Anecdotally, many firms have begun preparing for the rule by moving away from commissions and toward a flat fee for investment advice or by limiting human advice provided to small savers in favor of cheaper robo-advisers. From the perspective of advisers, that is the problem. The harm is the "rule's bias against commission sales," said Howard Bard, vice president for taxes and retirement security for the American Council of Life Insurers. In fact, a shift away from commissions was part of the Obama administration's design, and the changes that advisers, brokers and insurers are already making to comply with the rule represent a partial victory for industry critics. Obama Labor Secretary Thomas Perez touted robo-advisers such as Wealthfront as a model of low-cost fiduciary advice. Yet those gains could be lost if the Labor Department's rule were to be rolled back, said Marcus Stanley, a policy expert with the left-leaning group Americans for Financial Reform. "There's money to be made by steering people into products that are the wrong products for them," he said, meaning that some brokers would return to bilking clients in the absence of enforcement. As for legislative options, there is one set to hit the House floor, in the form of the Financial Choice Act, a sweeping revision of post-crisis banking rules offered by Mr. Hensarling that also would outright repeal the fiduciary rule. That legislative package, though, is thought to have poor prospects in the Senate. Congressional action is more likely to take the form of leaning on the agencies rather than legislative changes. To that end, fiduciary rule proponents fear the influence of the SEC under the direction of new Trump Chairman Jay Clayton, a former Wall Street lawyer. In years past, Stanley noted, the SEC has declined to write a fiduciary rule and has discussed only relatively watered-down proposals, such as more stringent disclosure requirements. Republicans favor the SEC, however, on the grounds that it has more relevant experience with investor-client relations. Last year, House Republicans advanced legislation that would prevent the Labor Department from writing a rule until the SEC weighed in on the topic. Liberals criticized the measure as effectively blocking a rule, because action from the SEC would never happen or wouldn't set an effective requirement that advisers act in their clients' best interests. [GN] ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marion Alcestis A. Castillon, Ma. Cristina Canson, Noemi Irene A. Adala, Joy A. Agravantefor, Valerie Udtuhan, Julie Anne L. Toledo, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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