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/raid1/www/Hosts/bankrupt/CAR_Public/170824.mbx C L A S S A C T I O N R E P O R T E R Thursday, August 24, 2017, Vol. 19, No. 167 Headlines 1 PERSON: Fails to Pay Employees Overtime, "White" Suit Claims 7-ELEVEN: Faces Class Action Over "Pop Tax" Collection ACACIA COMMUNICATIONS: Oct. 13 Lead Plaintiff Motion Deadline Set ALLEGHENY COUNTY, PA: Faces Class Action Over Disability Benefits ALLSTATE: Motion to Compel Arbitration of Coverage Claims Denied APPLIED OPTOELECTRONICS: Oct. 4 Lead Plaintiff Motion Deadline BELCONNEN LAKEVIEW: Sued Over GST on ACT Apartments Sale BROOKLYN EVENTS: Class Action to Challenge "Ban the Box" Law CALIFORNIA: Water Resources Dept. Sued Over Spillway Failure CALIFORNIA: Class Action Over Cal Fire Fees Pending CARRINGTON MORTGAGE: Settles Mortgage Insurance Kickbacks Case CHEESECAKE FACTORY: Judge Tosses "Suggested Tip" Class Action CLEARWATER, ID: Commissioners Approve AG's Defense in Class Action COMMONWEALTH BANK: Class Action Mulled Over Money Laundering Probe CONFIDE INC: Secret Messaging App Not Secured, Nascimento Says CONVERGYS CORP: Class Action Waiver Enforceable, 7th Cir. Rules CROTHALL HEALTHCARE: Sued Over Failure to Pay Termination Wages CVS HEALTH: Illegally Inflates EpiPen Price, "Brannon" Suit Says DELICIAS GALENAS: "Gonzalez" Suit Seeks Overtime Wage under FLSA DENVER, CO: Homeless People Files Summary Judgment Motion in Case DR. REDDY'S: Law Firms Mull Investor Class Action DRYSHIPS INC: Ends Fund-Raising Kalani Deal Following Suits EL POLLO: Court Denies Motion to Dismiss Securities Class Action FANNIE MAE: Faces Class Action Over Misreported Foreclosures FINISAR CORP: Faces Class Action in Calif. Over Stock Inflation FLINT, MI: Racism Plays Role in Water Crisis, Commission Reveals FORD MOTOR: Faces Litigation Woes Over Defective Transmissions FORTERRA INC: Robbins Geller Files Class Action in New York GLOBAL FITNESS: Paul Appeals Ruling in "Gascho" Suit to 6th Cir. GLOBALSCAPE INC: Block & Leviton Files Securities Class Action GLOBALSCAPE INC: Oct. 10 Lead Plaintiff Motion Deadline Set GOOGLE INC: Altshuler Firm Mulls Gender Pay Class Action GOOGLE INC: 250+ People Join Age Discrimination Class Action HEFFLER RADETICH: Fraud Class Action Can Proceed, Judge Rules HOME CAPITAL: Aug. 21 Class Action Settlement Approval Hearing Set IOWA: Oct. 2 Hearing Set in Disabled People's Medicaid Class Suit J ROCKLIFF: Obtains Favorable Ruling in Arbitration Bid JACKSONVILLE, FL: Responds to Fairway Oaks Residents' Class Action JOHNSON & JOHNSON: Documents Reveal Mesh Marketing Tactics JUNO HEALTHCARE: "Bolin" Class Suit Seeks to Recover Unpaid Wages JUST BORN: Faces "Buso" Class Suit Over Slack-Fill Containers KIA: Faces Class Action Over Defective Rod Bearings KOHL'S CORP: Illinois Judge Trims Claims in ADA Class Action LEONARD ROOFING: Sued Over Failure to Properly Pay Employees LOUISIANA: Faces Class Action Over Inadequate Indigent Defense LUCAVA INC: Underpays Restaurant Staff, "Vidal" Suit Claims MARAH FASHION: "Lobos" Suit Seeks Unpaid Wages under Labor Code MASTERCARD INC: Class Action Over Interchange Fees Revived MONSANTO INC: Class Action Over Roundup Product Labeling Okayed NATIONAL COLLEGIATE: Faces New Concussion Class Action NEW ORLEANS, LA: Katrina Survivors Shocked with Settlement Checks ONE TECHNOLOGIES: Fifth Circuit Appeal Filed in "Forby" Suit PALM BEACH, FL: Files Summary Judgment Motion in Utilities Case PRUDENTIAL RETIREMENT: Class Action Status Denied in ERISA Case PURDUE PHARMA: Southington May Join Opioid Addiction Suit RECKITT BENCKISER: Falsely Marketed Air Wick(R) Sprays, Suit Says RESORT MARKETING: Settles Class Action Over Telemarketing Calls RICE ENERGY: Faces "Boerger" Class Suit Over Proposed EQT Merger SALERNO CORP: "Vazquez" Suit Seeks to Recover Unpaid Wages SAN JUAN COUNTY, NM: Settles Immigration Class Action SANDFORD OIL: "Arenas" Suit Transferred to East. District Texas SCE&G: Faces Class Action Over V.C. Summer Project SEARS ROEBUCK: 7th Cir. Halves Attorneys' Fees in Washer Case SECURUS TECHNOLOGIES: "Antoon" Suit Transferred to W.D. Arkansas SHERIDAN ASSISTED: Does Not Properly Pay Workers, Suit Claims SIERRA PETROLEUM: Faces "Burgan" Suit Over Failure to Pay OT SPIROS ZORBALAS: Tenants' Class Action Can Proceed SPRINT SPECTRUM: Emilio Appeals Opinion & Order to Second Circuit STATE FARM: "McKinnie" Suit Moved to Middle District of Tennessee TAKATA CORP: Judge Temporarily Halts Lawsuits Over Air Bags TATA CONSULTANCY: Discrimination Class Action Pending TEP ROCKY: Elna Sefcovic Suit Moved to District of Colorado TRINITY INDUSTRIES: Faces Class Action Over E-T-Plus Rails VANTIV INTEGRATED: Aug. 26 Class Action Settlement Hearing Set VITAMIN SHOPPE: Faces Class Action Over Weight Loss Supplement VOLKSWAGEN GROUP: Faces "Wilson" Suit Over Defective Vehicles WALGREENS: Faces Class Action Over "Fraudulent Scheme" WEBMD HEALTH: Faces "Berg" Suit Over Proposed Sale to MH Sub WELLS FARGO: Expects Costs from Legal Claims to Reach $3.3 Bil. WEST MARINE: Parking Lot Not Accessible to Disabled, Pizzaro Says WEYERHAEUSER COMPANY: Faces "Esanbock" Suit Over Defective Joists XL AUTO: Accused of Wrongful Conduct Over Vehicle Price ZTO EXPRESS: Bottini & Bottini Files Securities Class Action * Buckley Sandler Attorneys Discuss Class Ascertainability Debate * Class Actions Over Data Collection Methods Surge * Employers Face Biometric Data Privacy Litigation Threat * Forced Arbitration Not Just a Trend in Nursing Homes * Pillsbury Winthrop Attorneys Discuss CPB Arbitration Rule * Towers Watson Sues Morgan Lewis for $30MM for Helping Meriter * Trump Organization Requires Mandatory Arbitration Agreements ********* 1 PERSON: Fails to Pay Employees Overtime, "White" Suit Claims -------------------------------------------------------------- Mark White, individually and on behalf of all others similarly situated v. 1 Person At A Time, LLC, Case No. 2:17-cv-01047-NBF (W.D. Penn., August 10, 2017), is brought against the Defendants for failure to pay overtime wages for hours in excess of 40 per workweek. 1 Person At A Time, LLC is a healthcare service provider that employs individuals to provide home healthcare services. [BN] The Plaintiff is represented by: Gary F. Lynch, Esq. Jamisen Etzel, Esq. Kevin Abramowicz, Esq. CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP 1133 Penn Avenue, 5th Floor Pittsburgh, PA 15232 Telephone: (412)322-9243 E-mail: glynch@carlsonlynch.com jetzel@carlsonlynch.com kabramowicz@carlsonlynch.com 7-ELEVEN: Faces Class Action Over "Pop Tax" Collection ------------------------------------------------------ Jonathan Bilyk, writing for Cook County Record, reports that add 7-Eleven to the list of retailers now facing a class action lawsuit over the collection of Cook County's controversial so- called "pop tax". On Aug. 9, lawyers Thomas Zimmerman, Sharon Harris, Matthew De Re, Nickolas Hagman and Maebetty Kirby, all of the Zimmerman Law Offices, of Chicago, filed suit in Cook County Circuit Court on behalf of named plaintiff Kelly Tarrant against 7-Eleven Corp. The lawsuit alleges the convenience store chain improperly charged Tarrant, of Chicago, Cook County's one-cent-per-ounce sweetened beverage tax, even though she filled her Super Big Gulp cup with unsweetened coffee. That purchase, the lawsuit asserts, should have been exempt from the tax. Instead, Ms. Tarrant was allegedly made to pay an additional 28 cents on her drink purchase. According to the complaint, Ms. Tarrant was told by store employees and later by a manager that "the tax is programmed in the 7-Eleven Store Information System and that the system automatically charges the sweetened beverage tax to all beverages purchased in Gulp cups, regardless of whether the beverage is subject to the sweetened beverage tax." The lawsuit seeks to expand the action to include all others who may have been similarly charged the tax when they purchased an unsweetened beverage at a Cook County 7-Eleven store in the last seven days. The complaint estimates the number of additional plaintiffs could number in the "many thousands." The lawsuit asks the court to award the plaintiffs actual damages, plus attorney fees. Zimmerman's and Ms. Tarrant's lawsuit is the third such class action lawsuit filed in the last five days against retailers over the collection of the tax. The tax took effect Aug. 2, about a month after the county had intended it to do so. Other lawsuits have targeted Walgreens and local McDonald's franchisees. However, collection and enforcement of the tax was delayed by about a month as a Cook County judge weighed a legal challenge launched by a group of Cook County grocers and the Illinois Retail Merchants Association trade group. Among other allegations, the retailers argued the ordinance enacting the tax was poorly written and would leave retailers exposed to class action lawsuits and other litigation over the collection of the tax. The county and the judge, however, brushed aside those concerns, with the judge particularly calling such concerns "merely speculation." In the wake of the rollout of the tax, some Cook County Board members have introduced new measures to repeal the tax. Those measures will be considered at the county board's September meeting. Cook County Board President Toni Preckwinkle, who championed the tax and cast the tie-breaking vote to enact the ordinance establishing the tax, has estimated the tax could bring in as much as $200 million in additional revenue for the county. As the fate of the pop tax hung in the balance in court in July, Ms. Preckwinkle laid off hundreds of county workers, saying the inability to collect nearly $17 million from the pop tax forced the layoffs to make up for the purported budgetary shortfall. The plaintiff's attorneys in the case are no strangers to such class action lawsuits. The Zimmerman Law Offices have brought numerous lawsuits targeting, among others: online attorney directory Avvo, for allegedly misappropriating the personal information of lawyers listed on their site; the makers of grated Parmesan cheese, for allegedly including cellulose in the cans marked "100 percent cheese;" Peet's Coffee, for allegedly not pouring enough French press coffee into customers' cups; United Airlines, for allegedly breaching a contract by placing customers and their checked bags on different aircraft; the Illinois Lottery, for not paying winners amid the state's budget crisis; Sears, for allegedly charging sales tax on purchases of digital television converter boxes bought with federal vouchers; and the makers of Templeton Rye whiskey, for allegedly misleading customers into thinking their whiskey was made in the small town of Templeton, Iowa. Zimmerman's website indicates the firm specializes in consumer fraud litigation and class actions, touting settlements of as much as $62 million for a variety of consumer fraud cases involving skin cream, newspaper advertising, improperly charged cell phone fees and more. [GN] ACACIA COMMUNICATIONS: Oct. 13 Lead Plaintiff Motion Deadline Set ----------------------------------------------------------------- Pomerantz LLP on Aug. 14 disclosed that a class action lawsuit has been filed against Acacia Communications, Inc. ("Acacia" or the "Company") and certain of its officers. The class action, filed in United States District Court, District of Massachusetts, and docketed under 17-cv-11504, is on behalf of a class consisting of investors who purchased or otherwise acquired Acacia securities, seeking to recover compensable damages caused by defendants' violations of the Securities Exchange Act of 1934. If you are a shareholder who purchased Acacia securities between August 11, 2016, and July 13, 2017, both dates inclusive, you have until October 13, 2017, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. Acacia designs, develops, manufactures, and markets communication equipment. The Company offers high-speed coherent optical interconnect products for cloud infrastructure operators and content and communication service providers. Acacia Communications serves customers worldwide. The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company's manufacturing and quality control processes were deficient; (ii) the foregoing deficiencies were likely to disrupt the Company's manufacturing, thereby impacting the Company's revenues; and (iii) as a result of the foregoing, Acacia's public statements were materially false and misleading at all relevant times. On May 31, 2017, Acacia issued a press release and filed a Current Report on Form 8-K with the Securities and Exchange Commission, advising investors that "the Company has identified a quality issue" affecting "a portion" of several thousand modules manufactured by one of Acacia's three contract manufacturers, citing as the "root cause of this quality issue . . . a circuit board cleaning process that has since been eliminated." On July 14, 2017, Acacia issued a press release announcing the Company's preliminary financial and operating results for the quarter ended June 30, 2017. The Company reported profit and revenue that missed estimates, and revised its current-quarter guidance downward. Acacia stated that the Company's "second- quarter results were adversely affected by the quality issue identified at one of our three contract manufacturers that we announced on May 31." On this news, Acacia's share price fell $2.62, or 6.30%, to close at $39.00 per share on July 14, 2017. With offices in New York, Chicago, Florida, and Los Angeles, The Pomerantz Firm -- http://www.pomerantzlaw.com-- concentrates its practice in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. [GN] ALLEGHENY COUNTY, PA: Faces Class Action Over Disability Benefits ----------------------------------------------------------------- WPXI News reports that a former employee filed the lawsuit because she's demanding changes to the retirement board when it comes to doling out disability pensions. Susan Donohue needs a cane just to walk down the hallway with her attorneys. She was at their office the Aug. 9 filing a civil lawsuit against the retirement board of Allegheny County. "Frustrating, discouraging and just like wow this really happened," Ms. Donohue said. Ms. Donohue worked for the Allegheny County court system for 30 years. Several years ago, she began having severe back pain. Her doctor eventually determined she could no longer work, so she applied for disability retirement. The county denied it. She says she was fired after they couldn't find a job to accommodate her. The lawsuit she filed on Aug. 9 claims the retirement board failed to establish guidelines and standards for awarding disability pensions, calling the system irrational and arbitrary. "It's wrong, it's unfair and it's unconstitutional," said Tybe Brett, Donohue's attorney. Ms. Donohue and her attorneys also say that one doctor the retirement board hired came to two different conclusions. "One said she could work with accommodations and one said she was totally and permanent disabled, based on the same examination, so what's going on here," Mr. Brett said. The goal of the lawsuit, they say, is not only to get Donohue the money she deserves, but to force the board to make wholesale changes. "To require the pension board to publish and articulate clear standards for when someone can receive disability pension benefits that they've contributed to for their entire employment," another attorney, Tim O'Brien said. What's even more troubling, her attorneys say, is that the Social Security Administration awarded her disability benefits. Meanwhile, the retirement board says there are guidelines in place and that they are preparing to address the lawsuit in court. [GN] ALLSTATE: Motion to Compel Arbitration of Coverage Claims Denied ---------------------------------------------------------------- Bill Wichert, writing for Law360, reports that a New Jersey federal judge on Aug. 9 shot down an Allstate unit's bid to force a putative class action over unpaid medical benefits into arbitration, rejecting the insurer's argument that state law allowed it to take such action without an arbitration agreement between the parties. U.S. District Judge Anne E. Thompson denied the motion from Allstate Fire and Casualty Insurance Co. to compel arbitration of claims made by an insured and a surgical center, saying there was neither an arbitration agreement nor notice that the parties could be forced to arbitrate the matter. "Both the Federal Arbitration Act and New Jersey policy express a preference for resolution by arbitration," Judge Thompson said in her written opinion. "However, both are predicated on a formal agreement between the parties or notice that they may be forced to submit a dispute to arbitration." "As there is no agreement or notice in this case, the court will decline to compel arbitration," the judge added. Plaintiffs Juan Gonzalez and Ambulatory Surgical Center of Somerset launched the proposed class action against Allstate in September in connection with claims that the insurer has unlawfully denied coverage for a surgery Gonzalez underwent at the facility in March 2015. The surgery was related to injuries Gonzalez sustained in an August 2011 car accident in Jefferson Township, New Jersey, court documents state. At the time of the accident, Gonzalez was insured by an auto policy issued by Allstate in Pennsylvania, court documents state. Allstate has refused to reimburse the surgical center for the procedure, because the code assigned to Gonzalez's surgery was not listed in New Jersey's auto medical fee schedule for such payments, court documents state. The plaintiffs have asserted that the procedure is still payable at reasonable rates pursuant to New Jersey insurance regulations. Gonzalez and the surgical center are seeking liability and damages on behalf of two proposed classes: individuals insured by Allstate who were injured in car accidents and are entitled to automobile medical benefits under New Jersey law, and ambulatory surgical facilities that performed procedures for which there are no codes listed in the fee schedule and for which Allstate has refused payment, according to the judge's opinion. The plaintiffs seek declaratory judgment that Allstate must pay for those procedures, and assert related claims for breach of contract, breach of implied covenant of good faith and fair dealing, and violation of the New Jersey Consumer Fraud Act, the opinion said. While there is no arbitration agreement between the parties, Allstate sought to compel arbitration based on the state's "Deemer Statute" and an arbitration provision within the New Jersey Automobile Insurance Cost Reduction Act, which provides for personal injury protection, or PIP, coverage, according to the judge's opinion. Under the Deemer Statute, an out-of-state insured is entitled to the PIP coverage required under New Jersey law when the covered vehicle is involved in a New Jersey accident. The arbitration provision states that disputes regarding the recovery of medical benefits provided under PIP coverage "may be submitted to dispute resolution on the initiative of any party to the dispute." Based on the Deemer Statute, Allstate argued that "the entire PIP statute applies to an out-of-state insured who received coverage in New Jersey pursuant to the statute," and that thus the insurer could require arbitration under the arbitration provision, according to the opinion. But Judge Thompson found that the plain text of the Deemer Statute "only provides for coverage of out-of-state insured who are insured by insurers authorized to transact or transacting automobile insurance business in New Jersey." "It does not incorporate other aspects of the PIP statute," the judge said. The judge also pointed to the differences between the Allstate matter and the New Jersey Appellate Division's 1996 decision in State Farm Mut. Auto. Ins. Co. v. Crocker, which also dealt with the application of the arbitration provision to an out-of-state insured who utilized medical care in New Jersey. In Crocker, the appellate court found that the insured could compel the insurance company to arbitrate based on that provision, even though the Deemer Statute did not specifically incorporate the arbitration clause, Judge Thompson said. But to be subject to the statute, the insurer had to be authorized to transact or transacting an automobile insurance business in New Jersey, the judge said. "Therefore, the insurance company had notice that it could be compelled to arbitrate. That is distinct from the present case, in which the insurer seeks to compel arbitration based on the New Jersey statute," Judge Thompson said. "The out-of-state insured might have no notice that it could be compelled to arbitrate." The judge added, "Therefore, based on the text of the relevant statement and the interpreting case law, it is unclear that the arbitration provision permits insurers to compel arbitration based on the Deemer Statute with out-of-state insureds who utilize in- state coverage." Charles Kannebecker, an attorney representing the plaintiffs, told Law360 on Aug. 9, "Allstate calculated that it could avoid responsibility by terminating the single action to determine its fault, thereby forcing every insured and every medical provider to incur the time, expense, delay and fees of hundreds of separate individual claims in arbitration." "The court properly refused Allstate's attempts and now Allstate will be held accountable for all of its conduct," Kannebecker added. Counsel for Allstate did not immediately respond to a request for comment on Aug. 9. The plaintiffs are represented by Charles Kannebecker. Allstate is represented by David J. D'Aloia and Marc E. Wolin of Saiber LLC. The case is Ambulatory Surgical Center of Somerset and Juan Gonzalez v. Allstate Fire Casualty Insurance Co., Case No. 3:16-cv-05378 (D.N.J.). The case is assigned to Judge Anne E. Thompson. The case was filed September 2, 2016. [GN] APPLIED OPTOELECTRONICS: Oct. 4 Lead Plaintiff Motion Deadline -------------------------------------------------------------- Lundin Law PC, a shareholder rights firm, on Aug. 14 announced the filing of a class action lawsuit against Applied Optoelectronics, Inc. ("Applied Optoelectronics" or the "Company") (Nasdaq:AAOI) regarding possible violations of federal securities laws between July 13, 2017 and August 3, 2017, inclusive (the "Class Period"). Investors who purchased or otherwise acquired shares during the Class Period should contact the firm prior to the October 4, 2017 lead plaintiff motion deadline. You can call Brian Lundin, Esquire, of Lundin Law PC, at 888-713- 1033, or e-mail him at brian@lundinlawpc.com. No class has been certified in the above action yet. Until a class is certified, you are not considered represented by an attorney. You may also choose to do nothing and be an absent class member. According to the Complaint, throughout the Class Period, Applied Optoelectronics made false and/or misleading statements, and/or failed to disclose: that a major customer was reducing its purchases of the Company's 40G receivers; that the loss of this major customer's business would have a severe negative impact on the Company's financial performance; and that as a result of the above, the Company's public statements were materially false and misleading at all relevant times. When this information reached the public, shares of Applied Optoelectronics dropped in value materially, which caused investors harm according to the Complaint. Lundin Law PC -- http://lundinlawpc.com-- was founded by Brian Lundin, Esquire, a securities litigator based in Los Angeles dedicated to upholding shareholders' rights. [GN] BELCONNEN LAKEVIEW: Sued Over GST on ACT Apartments Sale -------------------------------------------------------- Joanna Mather, writing for Australian Financial Review, reports that a class action will seek to recoup as much as $100 million in GST that may have been incorrectly charged on the sale of apartments in the ACT. International litigation funder IMF Bentham, which is working with Corrs Chambers Westgarth, announced the law suit to the ASX on Aug. 15. It has lodged a statement of claim with the Federal Court in NSW that alleges Belconnen Lakeview, a company in the Hindmarsh Group, charged and collected GST on the sale of 352 units in Altitude Apartments when no GST was payable. But the problem may have been more widespread, with IMF Bentham having identified 25 residential developments sold by a range of developers in the ACT that may fit the same criteria. "Over 3000 unit owners in the ACT across a range of developments have already sent us their contracts, and in many cases it seems the purchaser was wrongly charged GST," IMF Bentham Sydney investment manager Oliver Gayner said. "We have given Belconnen Lakeview every opportunity to explain the conduct alleged in the statement of claim, and in the absence of any satisfactory explanation we have now determined to put the matter before the Federal Court to decide." Assuming an average unit price of $450,000 and an average GST claim of around $40,000, as much as $100 million might be outstanding. The statement of claim alleges Belconnen Lakeview used its accountant to obtain an ATO private ruling which switched the tax status from 'taxable' to 'input taxed' shortly before sales commenced. But did not inform its customers, who continued to be charged GST, according to the claim. Separately, the federal government is worried about a failure by some developers to remit GST on new apartments. A measure in this year's federal budget will mean that as of mid- 2018, GST on new residences will be collected directly from home- buyers and not from developers. The new remittance arrangement is expected to result in the collection of $650 million in GST revenue over four years. While the budget papers did not contain any details about how this figure was derived, it implies that the large sums of money are routinely forgone because developers go broke and are unable to pay their GST liabilities. Treasury officials told The Australian Financial Review the change was aimed largely at illegal phoenixing -- a term used to describe companies that transfer assets from an indebted company to a new one to avoid paying creditors. The old company is placed into liquidation or administration but there are no assets left to pay debts. However, there is nothing to suggest the government decision is inked to what the class action alleges occurred in the ACT. Hindmarsh Group in the ACT did not respond to a request for comment. [GN] BROOKLYN EVENTS: Class Action to Challenge "Ban the Box" Law ------------------------------------------------------------ Thomas Ahearn, writing for Employment Screening Resources, reports that a class action lawsuit filed in a New York federal court on August 4, 2017, could be the first of its kind to challenge alleged violations by employers of a New York City "Ban the Box" law called the Fair Chance Act (FCA), according to a press release from employment law firm Outten & Golden LLP, which filed the suit along with the nonprofit organization Youth Represent. The press release states that the lawsuit claims the defendants -- Brooklyn Events Center, LLC (doing business as Barclays Center), Levy Restaurants, Inc., and Professional Sports Catering LLC -- "used flawed and discriminatory criminal history screening policies and practices" to deny employment to otherwise qualified job applicants in violation of the Ban the Box law. Lead plaintiff, Felipe Kelly, applied for a job at Barclays Center -- home of the Brooklyn Nets of the National Basketball Association (NBA) and the New York Islanders of the National Hockey League (NHL) -- in 2016. He claims the defendants did not hire him after a background check, never said why, and did not give him the "Fair Chance Notice" required by the Ban the Box law. The lawsuit claims Kelly was unaware of what information was being reported on him, unable to review the information for accuracy and completeness, review the arguments of defendants as to why they believed his conviction barred him from employment, or explain why he thought he was still entitled to employment and include any evidence of rehabilitation and good conduct. "Federal and New York state laws require that job applicants with criminal histories be provided with the same criminal history information relied on by the prospective employer so they might evaluate that information, ensure it is accurate, and even if it is accurate explain why they nonetheless are qualified for employment," said Christopher M. McNerney of Outten & Golden. Outten & Golden LLP and Youth Represent will seek to have the case certified as a class action that covers proposed classes of affected job applicants since October 27, 2015. The case is Felipe Kelly, et al., v. Brooklyn Event Center, et al., Class Action Complaint No. 1:17-cv-04600 in the U.S. District Court for the Eastern District of New York. As reported earlier by ESR News, the New York City Commission on Human Rights amended rules to establish definitions and procedures applying to the FCA that took effect in October of 2015 to amend the provisions regarding unlawful discrimination on the basis of criminal history against job applicants and employees. The amended rules took effect on August 5, 2017. Ban the Box refers to removing the box on job applications that applicants are asked to check if they have criminal records. According to the National Employment Law Project (NELP), 29 states and over 150 cities and counties have Ban the Box laws. A 2011 study by NELP estimated that nearly 65 million people in the United States -- more than one in four adults -- had a criminal record. "The purpose of Ban the Box is to give ex-offenders a fair chance at obtaining employment," says Attorney Lester Rosen, founder and CEO of Employment Screening Resources(R) (ESR). "By removing the criminal history question, supporters claim job applicants can be sure that they will not be automatically excluded from consideration for a job because of past mistakes." Mr. Rosen, author of "The Safe Hiring Manual," adds: "Ban the Box does not mean there can never be a background check but instead prevents an early knock-out punch before ex-offenders have the opportunity to be considered on individual merits. Employers can still conduct criminal background checks, but Ban the Box delays this screening until later in the hiring process." [GN] CALIFORNIA: Water Resources Dept. Sued Over Spillway Failure ------------------------------------------------------------ Francis Bechtel, Jacob Klein, Chantel Ramirez, and Denise Johnson, individually and on behalf of all others similarly situated v. California Department of Water Resources, and Does 1 through 50, inclusive, Case No. 17-CV-02298 (Cal. Super. Ct., August 10, 2017), is an action for damages by owners and lessors of property near the Feather River, as well as damages for the interference with these residents' ability to use and enjoy their property as result of the evacuation on or about February 12, 2017, due to the failing emergency spillway. California Department of Water Resources is responsible for the State of California management and regulation of water usage, including maintenance and regulation of the Oroville Dam. [BN] The Plaintiff is represented by: Patrick McNicholas, Esq. Nicholas Alexandroff, Esq. MCNICHOLAS & MONICHOLAS, LLP 10866 Wilshire Blvd., Suite 1400 Los Angeles, CA 90024 Telephone: (310) 474-1582 Facsimile: (310)475-7871 - and - James P. Frantz, Esq. M. Regina Bagdasarian, Esq. George T. Stiefel, Esq. FRANTZ LAW GROUP, APLC 770 L Street, Suite 950 Sacramento, CA 95814 Telephone: (916) 492-6059 Facsimile: (619) 525-7672 E-mail: jpf@frantzlawgroup.com Reginb@frantzlawgroup.com gstiefel@frantzlawgroup.com CALIFORNIA: Class Action Over Cal Fire Fees Pending --------------------------------------------------- Mary Callahan, writing for The Press Democrat, reports that rural Californians eager for a promised reprieve from controversial Cal Fire fees imposed six years ago still owe the state more than $53 million before they're completely off the hook. It's uncertain how much of that debt resides in Sonoma County, where about 25,000 property owners have been assessed the disputed State Responsibility Area fee each year since 2012. But one thing's clear: Bills levied on Sonoma County households in June and due still must be paid, if they haven't been already, despite recently approved legislation suspending the fees in the future, state officials said. "They are for the fiscal year prior to July 1, 2017, so they still need to be paid," Cal Fire spokeswoman Janet Upton said. "No new bills for the current fiscal year will be issued." It's been confusing, however, because bills for Sonoma County and nine of the other 58 California counties -- those at the end of the list alphabetically -- were sent out in mid- to late June, near the close of the 2016-17 fiscal year, according to representatives of the new California Department of Tax and Fee Administration. The deadline for payment was 30 days later, in July, intersecting with news that the state's new cap-and-trade bill included language suspending the state fire prevention fee. The new climate change legislation, Assembly Bill 398, was approved with bipartisan support last month. Provisions include diverting $80 million a year in proceeds from the sale of carbon emission credits to fund the fire prevention efforts currently covered by Cal Fire's controversial SRA fee. The fee, approved by the Legislature in 2011, is intended to help offset the state's cost of defending homes built in rural neighborhoods on the outskirts of urban areas. It is assessed on approximately 800,000 habitable structures that are in the state responsibility area for fire protection, generating approximately $80 million annually. The fee officially is $152.33 per structure, though most landowners qualify for a discount because they also pay into a local fire protection district. Their annual fee is $117.33. But many rural residents and political opponents railed against the extra fee. Some have lodged repeated protests, as well. The Howard Jarvis Taxpayer Association has a class-action suit pending against the state, arguing that the fee is an unconstitutional tax that was imposed without a required two- thirds approval of the Legislature. Retired Rancho Adobe Fire Chief Frank Treanor blames the SRA fee for his district's unsuccessful attempt at passing a desperately needed special tax in the autumn of 2012 -- one that would have allowed him to restore recession-era station closures and service cuts. "It was a direct result of this illegal tax that they levied on people without a vote of the people," he said. He has been advising rural residents since then to pay the fee when they're billed, but file a formal protest with the state each time, as well. Cal Fire spokesman Daniel Berlant said thousands have done so, though how many may have withheld payment is unclear. Venus Stromberg, a spokeswoman for the Department of Tax and Fee Administration, said 172,576 accounts were in arrears at the end of July, owing more than $53 million. "Just because the fire fee no longer exists," doesn't mean the department won't be collecting, she said. [GN] CARRINGTON MORTGAGE: Settles Mortgage Insurance Kickbacks Case -------------------------------------------------------------- Greg Land, writing for Daily Business Review, reports that a federal magistrate has preliminarily approved three settlements totaling nearly $15 million in a national class action accusing mortgage servicers of taking kickbacks from residential insurers. According to the complaint, the mortgage companies forced borrowers to buy inflated policies from insurers that funneled some of the money back in the guise of commissions, reimbursements and the provision of below-cost services. Under the terms of the settlements preliminarily approval by U.S. Magistrate Jonathan Goodman of the Southern District of Florida on Aug. 10, tens of thousands of borrowers will receive between 6 percent and 10.5 percent of the premiums they were overcharged and forced to buy since 2008. The settlements include Carrington Mortgage Services LLC, Fay Servicing LLC and Residential Credit Solutions Inc. The insurers are American Modern Home Insurance Co. and Southwest Business Corp. The settlements include attorney fees capped at nearly $2.3 million for the plaintiffs lawyers: Adam Moskowitz -- amm@kttlaw.com -- Thomas Ronzetti, Rachel Sullivan -- rs@kttlaw.com -- and Robert Neary -- rn@kttlaw.com -- of Kozyak Tropin & Throckmorton in Coral Gables; Lance Harke, Sarah Engel and Howard Bushman of Miami's Harke Clasby & Bushman; and Aaron Podhurst, Peter Prieto, John Gravante III and Matthew Weinshall of Podhurst Orseck in Miami. A final approval hearing is scheduled before Goodman in January. Defense attorneys include Brian Toth -- Brian.Toth@hklaw.com -- of Holland & Knight in Miami; Mark Johnson -- mjohnson@bakerlaw.com - - Rodger Eckelberry -- reckelberry@bakerlaw.com -- and Robert Tucker of Baker & Hostetler in Columbus, Ohio; Elizabeth Campbell -- ecampbell@lockelord.com -- of Locke Lord in West Palm Beach; and Keith Olin -- kolin@bressler.com -- of Bressler, Amery & Ross in Fort Lauderdale. None of the defense counsel responded to a request for comment. The agreement comes on the heels of another force-placed insurance class action settlement worth nearly $24 million in New Jersey District Court. Judge Noel Hillman approved that settlement July 27. Nearly 75,000 people are members of that class. The plaintiffs were represented by Moskowitz, Harke and Bushman; Peter Muhic -- pmuhic@ktmc.com -- Donna Moffa -- dmoffa@ktmc.com - - and Samantha Holbrook -- sholbrook@ktmc.com -- of Pennsylvania's Kessler Topaz Meltzer & Check; and a team of lawyers at Radnor. The defendants in that case were PHH Mortgage Corp. and Assurant Insurance. Defense attorneys Robert DiUbaldo -- rdiubaldo@carltonfields.com - - and Frank Burt -- fburt@carltonfields.com -- of Carlton Fields did not immediately respond to requests for comment. Mr. Moscowitz and his team have taken a leading role in challenging force-placed insurance abuses since 2010, settling 27 class actions nationally on behalf of some 5.8 million homeowners. "We've worked with 57 law firms all around the country working out these settlements," Mr. Moscowitz said. "It's been a wonderful experience, and we've really been able to transform the force- placed insurance industry." [GN] CHEESECAKE FACTORY: Judge Tosses "Suggested Tip" Class Action ------------------------------------------------------------- Dave Simpson, writing for Law360, reports that a New York federal judge on 11 tossed a putative class action brought against The Cheesecake Factory Inc., ruling that a diner who said he was misled into leaving suggested 40 and 60 percent gratuities was given all the relevant information he needed before tipping. U.S. District Judge Joan M. Azrack dismissed without leave to amend the suit brought by Robert Rodriguez who claimed that, although he split his bill with a companion, his portion of the bill listed "suggested gratuity" percentages for the entirety of the check. Judge Azrack pointed out that Mr. Rodriguez, who claims he tipped based on the receipt's suggestion, acknowledged also receiving a copy of the entire bill, which included the same suggested gratuity totals. "Both the total bills and plaintiff's individual bills listed the exact same suggested gratuities. Even an individual who lacks the capacity to perform multiplication could compare the checks and conclude that 20 percent of a smaller number cannot possibly equal 20 percent of a larger number," Judge Azrack said on Aug. 11. "Only the most rudimentary math skills would be necessary to reach this conclusion -- it is simply not plausible that reasonable consumers lack these skills." Mr. Rodriguez claimed in a suit filed in April 2016 that at both a Grand Lux CafÇ and a Cheesecake Factory -- both owned by Cheesecake Factory Inc. -- split checks resulted overtipping. At the Grand Lux in February 2016, he and his companion split an $82.77 bill in half. They got a copy of the total bill, with suggested gratuities of $16.55 for 20 percent, $14.90 for 18 percent and $12.42 for 15 percent. They also got copies of their individual bills, for $41.39, with the same gratuity suggestions. Rodriguez said he left $16.55, thinking it was 20 percent of his individual bill, unknowingly leaving a 40 percent tip. A month later, a similar incident allegedly occurred at The Cheesecake Factory, with Mr. Rodriguez tipping 60 percent on his individual bill. Mr. Rodriguez claimed violations of the New York General Business Law -- which Judge Azrack said was invalid because he had enough information to calculate an appropriate tip -- common law fraud, and unjust enrichment. Judge Azrack ruled that the fraud charge did not stand up because Rodriguez never showed an intent to deceive on the part of Cheesecake Factory. "Moreover, defendant's allegedly fraudulent practice appears to only directly benefit servers, rather than defendant itself," Judge Azrack said of the tipping suggestions. "This point further illustrates why plaintiff's conclusory allegation of fraudulent intent is implausible." The unjust enrichment claim is just a retread of the previous claims, she ruled. Though Mr. Rodriguez acknowledged that he got both a copy of the total bill and his individual bill, he argued that the discovery process is necessary to determine if The Cheesecake Factory is consistent in this practice. "What TCF habitually does with other customers does not alter this fact and, therefore, is of no consequence to the question of whether plaintiff's claim should be dismissed," Judge Azrack ruled. Neither party's representatives responded to requests for comment on Aug. 14. Mr. Rodriguez is represented by Richard M. Hendler of the Law Offices of Richard M. Hendler. The Cheesecake Factory is represented by Neal Marder -- nmarder@akingump.com -- Andrew Jick -- ajick@akingump.com -- Erica Abshez Moran -- emoran@akingump.com -- Brian Carney and Stephanie Gal of Akin Gump Strauss Hauer & Feld LLP. The case is Rodriguez v. The Cheesecake Factory Incorporated, Case No. 2:16-cv-02006 (E.D.N.Y.). The case is assigned to Judge Joan M. Azrack. The case was filed April 24, 2016. [GN] CLEARWATER, ID: Commissioners Approve AG's Defense in Class Action ------------------------------------------------------------------ Clearwater Tribune reports that the Idaho Attorney General's Office proposed to represent Clearwater County amongst many other counties in the state, in a class action lawsuit filed by convicted sex offenders claiming requirements of the sex offender registry are unconstitutional. Clayne Tyler, Clearwater County Prosecutor explained to Commissioners that plaintiffs are asking for a ruling on the constitutionality of the registry. They are not requesting compensation for damages. Mr. Tyler said he didn't expect there to be any cost to Clearwater County to have the attorney general represent the defendants. [GN] COMMONWEALTH BANK: Class Action Mulled Over Money Laundering Probe ------------------------------------------------------------------ Patrick Durkin and Katie Walsh, writing for Australian Review, report that the Commonwealth Bank may face a class action from investors, following revelations the board failed to disclose a money laundering investigation for over two years, which triggered a $5.5 billion collapse in the bank's share price when the regulator launched its case. Class action lawyers are circling the CBA saga as more information emerges about what the executives and board knew and when. Treasurer Scott Morrison met with CBA chairman Catherine Livingstone on Aug. 8 and the Treasurer has taken advice from Australian Securities and Investments Commission chairman Greg Medcraft who is also investigating taking action over CBA's disclosure. The threat of a major shareholder class action poses a further headache for the CBA which is already facing a multi-billion dollar penalty, on top of the board's self-imposed response including a $40 million technology upgrade, $85 million to strengthen the bank's "know-your-customer" processes and cutting executives short-term bonuses. "It should not have taken the issuing of court proceedings by AUSTRAC and media reporting of that, for the bank to own up to such serious and troubling allegations by one of its regulators," class action law firm Phi Finney McDonald said. The three founding partners of the new firm, which was launched this month, previously headed Slater and Gordon's class actions practices in Australia and the UK. "The bank has known about AUSTRAC's investigation for two years. That investigation included AFP raids last year. The matters raised by AUSTRAC must be of substance since, when they were raised with CBA by AUSTRAC, CBA responded by lodging over 50,000 threshold transaction notifications, well after they should have done so," the firm said. Board knew but failed to disclose Before launching the class action, lawyers said they will monitor AUSTRAC's pending Federal Court action to piggy back off any evidence uncovered during the case. That may provide an extra incentive for the bank to seek an early settlement with the regulator, however one litigation funder said they would "eat their hat" if no class action emerged. The other precondition is for shareholders to suffer a loss. CBA's share price has recovered some ground from its 4 per cent fall on Aug. 4 but some investors believe the market response showed there was a material non-disclosure which would make the shareholder class action worthwhile. "I see this as a failure of timely disclosure of a material event as evidenced by the share price reaction," Velocity Trade senior banking analyst Brett Le Mesurier said. One leading corporate lawyer who advises company boards said the likely shareholder action would turn on the knowledge of the CBA board. CBA chairman Catherine Livingstone revealed at the bank's full year results on Aug. 9 that the board was aware of transaction reporting issues with its smart ATMs in the second half of 2015. 'You can't disclose every notice' CBA CEO Ian Narev argues the bank is constantly flooded with regulatory requests and if it disclosed everything, the market would be overwhelmed and confused. "All major financial institutions have a raft of notices from very active regulators, as you would hope they would, and you simply can't make disclosure every time you get notices from regulators or you would be making disclosures every day," Mr Narev said. "Our view would be these things didn't come anywhere near it in the form they came at the time." AUSTRAC allege CBA became aware of a systems error which meant transactions larger than $10,000 were not being reported on June 16, 2014. The problems affected 778,370 accounts with $8.91 billion deposited in the bank's smart ATMs before it was fixed. The investigation led to police raids on CBA premises in April last year and dozens of international arrests. The lawyer said four disclosure questions would be key to any shareholder class action: the bank's failure to make a provision in their accounts or a contingent liability note, the failure to inform the market under continuous disclosure provisions and excluding any detail about the issue in remuneration reports for senior executives. [GN] CONFIDE INC: Secret Messaging App Not Secured, Nascimento Says -------------------------------------------------------------- ARTHUR NASCIMENTO, individually, and on behalf of all others similarly situated, the Plaintiff, v. CONFIDE, INC., a Delaware Corporation, the Defendant, Case No. 2017-CH-11309 (Ill. Cir. Ct., Aug. 17, 2017), seeks to recover damages as a result of Confide's deceptive marketing practices. According to the complaint, in the aftermath of the well- publicized Snowden revelation -- and the public realization that state and non-state actors can, and are, monitoring individuals' professional and personal communications -- there has been a surge in public demand for security and privacy in digital exchanges. This demand created a market for messaging applications that promise consumers privacy and confidentiality from such surveillance. As high-profile breaches -- such as the leaked emails from the Democratic National Committee -- continued at a feverish pace, the market for confidential messaging applications expanded rapidly. The complaint notes Confide is one of a number of players that have sought to capitalize on this surging public demand. It operates a multi-platform messaging application that claims to offer consumers a confidential means of sending digital communications without fear of their communications being monitored or recorded. Indeed, Confide represents that the App allows its users to "[c]ommunicate digitally with the same level of privacy and security as the spoken word." But, as Confide acknowledges, that level of privacy and security cannot be achieved through encrypting messages alone. Rather, to attain that level of confidentiality, messages must be "[e]ncrypted, [e]phemeral, and [s]creenshot protected[.] Confide's App purports to offer a means of communication whereby each of these elements of confidentiality is satisfied. Confide claims that by using its App, consumers can communicate "without fear of the Internet's permanent, digital record and with no copies left behind. Confide's representations were, in fact, so persuasive, that multiple members of the Trump administration publicly acknowledged that they were using Confide's App for confidential communications related to matters of national importance. And in some cases, it appeared, utilizing it to leak information from the White House. According to the complaint, contrary to Confide's representations, the App failed to protect communications its users send through it, and it failed to offer the unequivocal confidentiality advertised by Confide. Specifically, Confide failed to deliver on two of the three requirements that it espouses as necessary for confidential communications: ephemerality and screenshot protection. Absent these protections, Confide knows that it cannot deliver on its promise to consumers that communications sent through it will be confidential. Unfortunately, Confide induced consumers into using the App and paying for additional features by representing that it was secure.[BN] The Plaintiff is represented by: Benjamin H. Richman, Esq. EDELSON PC 350 North LaSalle Street, 13th Floor Chicago, IL 60654 Telephone: (312) 589 6370 Facsimile: (312) 589 6378 E-mail: brichman@cdclson.com CONVERGYS CORP: Class Action Waiver Enforceable, 7th Cir. Rules --------------------------------------------------------------- W. Stephen Cockerham, Esq. -- stephen.cockerham@huschblackwell.com -- and Leslie Brockhoeft, Esq. -- leslie.brockhoeft@huschblackwell.com -- of Husch Blackwell LLP, in an article for Lexology, report that on August 7, 2017, a Fifth Circuit panel ruled, in a divided decision, that a class-action waiver can be enforceable even without an arbitration agreement being involved. In that case, the Convergys Corporation required its applicants to sign a class- action waiver even though it was not contained in an arbitration agreement. The Convergys Corp. v. National Labor Relations Board (NLRB) ruling rejected a NLRB decision holding that the company cannot require its job applicants to sign class action waivers that prevent them from suing the company. The NLRB maintains that Section 7 of the National Labor Relations Act (NLRA) guarantees a substantive right to participate in class and collective actions and has consistently shot down the use of class action waivers. There is currently a circuit split on whether such class action waivers in arbitration agreements are enforceable, with the Second, Fifth and Eighth Circuits rejecting the NLRB's position, and the Sixth, Seventh, and Ninth Circuits embracing it. In 2013, in D.R. Horton v. NLRB, the Fifth Circuit held that such waivers in arbitration agreements are valid. The U.S. Supreme Court is set to settle the circuit split because the Court granted certiorari in three cases involving class action waivers in employment agreements -- Murphy Oil USA, Inc. v. NLRB, Lewis v. Epic Systems Corp., and Morris v. Ernst & Young -- and a hearing is set for October on the consolidated cases. The Solicitor General gave the NLRB permission to represent itself before the Supreme Court. In the NLRB's Murphy Oil brief, it argues that there is no need to reconcile the Federal Arbitration Act ("FAA") and the NLRA because the Supreme Court "has never enforced an arbitration agreement that violates another federal statute, as the agreements here violate the NLRA by imposing prospective waivers of concerted activities." However, the Convergys case is unique from the cases before the Supreme Court because there was no arbitration agreement. The Convergys court had to decide whether Section 7 of the NLRA, which guarantees the right to self-organize and collective bargain and "to engage in other concerted activities for the purpose of . . . other mutual aid or protection," also contemplates an employees' right to participate in class actions. The court held that Section 7 does not include a right to participate in class and collective actions. Rejecting the NLRB's argument that this case was distinguishable from D.R. Horton because D.R. Horton involved an arbitration agreement and, thus, was shielded by the FAA, the court stated that D.R. Horton established that the use of a class or collective action is not a substantive right. Two days later, the Fifth Circuit panel reached the same conclusion in Logisticare Solutions v. NLRB, a case also involving a class action waiver outside of an arbitration agreement. Moreover, the Logisticare court rejected the NLRB's argument that the waiver violated Section 8(a)(1) of the NLRA because a reasonable employee could construe the waiver as prohibiting board charges. The Convergys and Logisticare decisions are major wins for employers. But employers should watch for the U.S. Supreme Court's upcoming decision on class action waivers before getting too comfortable. [GN] CROTHALL HEALTHCARE: Sued Over Failure to Pay Termination Wages --------------------------------------------------------------- Yoana Herrera, individually and on behalf of other persons similarly situated v. Crothall Healthcare, Inc. and Does 1 through 10, Case No. BC672049 (Cal. Super. Ct., August 10, 2017), arises out of the failure of the Defendant to provide timely pay upon termination of employees, in compliance with California Labor Code. Crothall Healthcare, Inc. provides housekeeping services at medical facilities. [BN] The Plaintiff is represented by: Gregory N. Karasik, Esq. KARASIK LAW FIRM 11835 W. Olympic Blvd. Los Angeles, CA 90064 Telephone: (310) 312-6800 Facsimile: (310) 943-2582 E-mail: greg@karasiklawfirm.com - and - Emil Davtyan, Esq. DAVTYAN PROFESSIONAL LAW CORPORATION 21900 Burbank Blvd., Suite 300 Woodland Hills, CA 91367 Telephone: (818) 992-2935 E-mail: emil@davtyanlaw.com CVS HEALTH: Illegally Inflates EpiPen Price, "Brannon" Suit Says ---------------------------------------------------------------- Traci Brannon, individually and on behalf of all others similarly situated v. CVS Health Corporation, Caremark RX, Inc., Caremark RX, L.L.C., Express Scripts Holding Company, Express Scripts, Inc., UnitedHealth Group, Inc., Optumrx, Inc., and Prime Therapeutics, LLC, Case No. 2:17-cv-02464 (D. Kan., August 11, 2017), arises out of the Defendants' unlawful scheme to artificially inflate the cost of the epinephrine injector ("EpiPen") by more than 500% in order to facilitate Mylan's payment of so called "rebates," fees, or other payments to CVS Health, Express Scripts, OptumRx, and Prime in exchange for favorable formulary placement. CVS Health Corporation, Caremark RX, Inc., Caremark RX, L.L.C., Express Scripts Holding Company, Optumrx, Inc., and Express Scripts, Inc. provides comprehensive prescription benefit management services to health plans, including corporations, managed care organizations, insurance companies, unions and government entities. UnitedHealth Group, Inc. operates a healthcare company located at 9900 Bren Road East, Minnetonka, Minnesota, 55343. [BN] The Plaintiff is represented by: Rex A. Sharp, Esq. REX A. SHARP, P.A. 5301 W. 75th Street Prairie Village, KS 66208 Telephone: (913) 901-0505 Facsimile: (913) 901-0419 E-mail: rsharp@midwest-law.com rhudson@midwest-law.com - and - Lynn Sarko, Esq. Derek W. Loeser, Esq. Gretchen Freeman Cappio, Esq. Gretchen S. Obrist, Esq. KELLER ROHRBACK L.L.P. 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Telephone: (206) 623-1900 Facsimile: (206) 623-3384 E-mail: lsarko@kellerrohrback.com dloeser@kellerrohrback.com gcappio@kellerrohrback.com gobrist@kellerrohrback.com - and - Warren T. Burns, Esq. BURNS CHAREST LLP 500 North Akard, Suite 2810 Dallas, TX 75201 Telephone: (469) 904-4550 Facsimile: (469) 444-5002 E-mail: wburns@burnscharest.com scox@burnscharest.com - and - W. Mark Lanier, Esq. THE LANIER LAW FIRM 6810 FM 1960 West Houston, TX 77069 Telephone: (713) 659-5200 E-mail: WML@LanierLawFirm.com DELICIAS GALENAS: "Gonzalez" Suit Seeks Overtime Wage under FLSA ---------------------------------------------------------------- CELSO RAMOS GONZALEZ, Individually and on BEHALF OF ALL OTHER COLLECTIVE PERSONS SIMILARLY SITUATED, the Plaintiff, v. DELICIAS GALENAS INC., DELICIAS GALENAS No. 2, INC., 98-08 35 Ave., Basement, DELICIAS GALENAS 95TH INC, DELICIAS GALENAS 73RD INC., and INGRID MORENO, Jointly and Severally, the Defendants, Case No. 701822/2017 (N.Y. Sup. Ct., Aug. 17, 2017), seeks to recover overtime wage, liquidated damages, interest, attorneys' fees and costs pursuant to the Fair Labor Standards Act and the New York Labor Law. According to the complaint, the Defendants maintained a policy and practice of requiring Plaintiffs and other similarly situated employees to work in excess of 40 hours per week without providing them with appropriate overtime compensation required by State and Federal law and regulations.[BN] The Plaintiff is represented by: Peter Sim, Esq. PARK & SIM GLOBAL LAW GROUP LLP Attorneys for Plaintiff 39-01 Main Street, Suite 608 Flushing, NY 11354 Telephone: (718) 445 1300 DENVER, CO: Homeless People Files Summary Judgment Motion in Case ----------------------------------------------------------------- Libby Rainey, writing for Denver Post, reports that invoking the story of David and Goliath, a group of homeless people filed a motion for summary judgment on Aug. 14 in a class-action lawsuit challenging Denver's efforts to move the homeless. Calling Denver's methods "reminiscent of a scene from a dystopian science fiction novel," the motion claims that the city violated the constitutional rights of homeless men and women, destroying their property and clearing camps without proper warning. Andy McNulty -- AMcNulty@KLN-law.com -- an attorney with civil rights law firm Killmer, Lane & Newman, and Jason Flores-Williams filed the motion. "Normally, plaintiffs don't file motions for summary judgment, but in this case the evidence was overwhelming," Mr. McNulty said. "Denver time and again keeps pushing them out of the city." Using depositions and copies of emails as evidence, the motion claims that during one sweep, city officials set fire to the plaintiffs' property with flame throwers. It also accuses the city of using jail inmates to help facilitate the sweeps and of taking blankets from the homeless on cold winter nights. The plaintiffs are asking that the court enter a summary judgment holding that their Fourth and 14th Amendment rights were violated. Mr. McNulty said the court should respond to the motions in the next two to three weeks. The city will file a motion for summary judgment, too, according to an email from the City Attorney's Office. "It will be up to the court to determine what the evidence shows and whether either side is entitled to judgment without a trial," the email read. The homeless first sued the city last August, claiming that Denver was forcing people out of the city's downtown in a series of systematic sweeps, destroying personal property in the process. The lawsuit identifies a series of sweeps in 2015 and 2016, claiming that people were not adequately warned and that the possessions they could not carry were often thrown away. "You're talking about personal mementos, military IDs, just a couple things in your life that will help you to rebuild," said Mr. Flores-Williams, the attorney who filed the lawsuit. "There's not even the intent to save anyone's property." Some two dozen people gathered on Aug. 14 outside the Denver City and County Building to protest the sweeps and support the motion. Holding signs reading "Sweep streets not people" and "Quit playing homeless whack-a-mole," the group marched down the 16th Street Mall to the office of the Downtown Denver Partnership. "The city of Denver is treating homeless people like trash," said Terese Howard, an organizer with Denver Homeless Out Loud. "This has got to stop. This isn't just a fight in the courts, it's a fight in the streets." Jerry Burton, a plaintiff in the case and a veteran, said he was angry that he fought to defend the constitution, only to have his own constitutional rights violated on the streets. "I put my life on the line for this country to have my rights and dignity disrespected," Mr. Burton said. "It makes you want to cry. It makes you feel like you're not worth it." [GN] DR. REDDY'S: Law Firms Mull Investor Class Action ------------------------------------------------- India Infoline News Service reports that US-based law firms have threatened a class action suit against the Indian pharma major, Dr. Reddy's Laboratories for non-disclosure of quality-related lapses at its Indian facilities, reported a leading business daily. Earlier, the German regulatory authority had revoked GMP (good manufacturing practices) clearance in respect of the company's formulations manufacturing Unit 2 plant in Hyderabad. [GN] DRYSHIPS INC: Ends Fund-Raising Kalani Deal Following Suits ----------------------------------------------------------- TradeWinds reports that New York-listed shipowner says chief executive will make $100m non-cash investment including stake in tanker pool. DryShips ended a controversial fund-raising deal with Kalani Investments and agreed to take George Economou's stake in pools player Heidmar. The announcement ends an arrangement that could have seen DryShips raise up to $226m through sales to the Marc Bistricer-backed investor and that has drawn three separate shareholder lawsuits. Those lawsuits have alleged that common shareholders lost nearly all the value of their investment in DryShips. The moves will see Economou, DryShips' chief executive, take an additional $100m equity stake. [GN] EL POLLO: Court Denies Motion to Dismiss Securities Class Action ---------------------------------------------------------------- Shearman & Sterling LLP, in an article for JDSupra, wrote that on August 4, 2017, United States District Judge David O. Carter of the United States District Court for the Central District of California denied a motion to dismiss a putative securities fraud class action against El Pollo Loco Holdings, Inc. ("EPL"), certain of its directors and officers, and EPL's controlling shareholders. Turocy, et al. v. El Pollo Loco Holdings, Inc., et al., No. SACV- 15-1343-DOC (C.D. Cal. Aug. 4, 2017). Plaintiffs alleged that defendants violated Sections 10(b), 20(a) and/or 20A of the Securities Exchange Act of 1934 (the "Exchange Act"), and Rule 10b-5, by failing to disclose material facts and making materially false or misleading statements as part of a scheme to artificially inflate the stock price of EPL between May 15, 2015 and August 13, 2015, and/or selling their personally held shares in EPL shortly after making the alleged false or misleading statements despite having not sold any shares during the previous six months and not selling the shares pursuant to any Rule 10b5-1 trading plan. After dismissing without prejudice the original and amended complaints in this action, the Court held that plaintiffs sufficiently alleged misstatements and a strong inference that defendants were aware of the falsity of such statements, and denied defendants' motion to dismiss the third amended complaint. Plaintiffs alleged that defendants misled investors about EPL's waning sales and customer traffic in the second quarter of 2015, and that certain individual defendants and controlling shareholder defendants sold more than $130 million dollars of their personally held shares of EPL stock at the allegedly resulting inflated stock prices. In previously dismissing plaintiffs' Section 10(b) claims, the Court stated that it was "not convinced Defendants omitted any information or warnings to investors that would be misleading." In assessing plaintiffs' third amended complaint, however, the Court found that plaintiffs had adequately pled the existence of materially misleading statements and omissions, including: (i) allegedly misleading statements by the company about causes of its poor performance in the first half of 2015, which the company publicly attributed to ancillary issues rather than the alleged real cause, i.e., its increased menu prices and the removal of a popular $5 combo menu; (ii) allegedly misleading statements by the company about the company's own internal "value scores," used by the company to track its self-designated positioning as a "quick service restaurant plus" (i.e., a fast food restaurant with higher quality food and service); and (iii) alleged misstatements about the company's same store sales growth expectations, when EPL's CFO stated in an analyst call that EPL's forecast for the second quarter of 2015 was 3% growth despite having reviewed EPL's internal forecast that predicted only 2.5% growth. The Court next considered whether plaintiffs had adequately stated with particularity facts giving rise to a strong inference under the PSLRA that defendants acted with scienter. In its prior decisions dismissing the complaint without prejudice, the Court had determined that the three alleged confidential witnesses' statements, analyzed individual by individual, were not indicative of scienter. In this decision, however, the Court, citing the Ninth Circuit's recent ruling in In re Quality Systems, Inc. Sec. Litig., No. 15-55173, slip op. (Dkt. 42) (9th Cir. July 28, 2017), noted that it would assess whether, taken together, the confidential witnesses' statements raised a strong inference of scienter. The Court found that, considered collectively, the statements, if taken as true, established that the individual defendants had access to information and data tracking the chain's decreasing sales and transactions and customer feedback -- and such access to the disputed information raised a strong inference of scienter. In addition, the Court found that the timing of certain defendants' stock sales -- the first possible day they could sell pursuant to various lock-up agreements following the alleged false and misleading statements -- was further evidence in support of scienter. Of note, however, in assessing whether plaintiffs had pled actionable misstatements which could support a claim against certain individual defendants, the Court found that courts in the Ninth Circuit have largely concluded that group pleading is not compatible with the PSLRA's requirements, and the Court concluded similarly. Having found that plaintiffs sufficiently pled false or misleading statements as well as facts supporting a strong inference of scienter, the Court denied defendants' motion to dismiss the Section 10(b) and Rule 10b-5 claims. The Court similarly denied defendants' motion to dismiss the Section 20(a) and 20A claims, noting that defendants' sole argument as to those claims was that there was no primary violation under Section 10(b), which the Court rejected for the reasons above. This decision highlights the evolving implementation in district courts regarding the assessment of confidential witness statements in determining whether scienter has been adequately pled in securities fraud actions, as well as the trend in Ninth Circuit courts regarding group pleading in the context of such actions. [GN] FANNIE MAE: Faces Class Action Over Misreported Foreclosures ------------------------------------------------------------ Dena Aubin, writing for Reuters, reports that Fannie Mae has been hit with a proposed class action in San Francisco federal court by homeowners who say they were rejected for loans because the mortgage financing giant falsely reported that their homes had been in a foreclosure. Filed on Aug. 12, the lawsuit said Fannie Mae misreported foreclosures in credit histories for thousands of consumers who had sold their homes in a short sale. In a short sale, an alternative to foreclosure, a bank allows a homeowner to sell a home for less than the amount owed on the mortgage and agrees to accept the proceeds to settle the loan. [GN] FINISAR CORP: Faces Class Action in Calif. Over Stock Inflation --------------------------------------------------------------- Jack Newsham, writing for Law360, reports that shareholders who sued fiber optic supplier Finisar Corp. for fraud after a seemingly inarticulate statement by its CEO bumped its stock price up just long enough to make him and his company millions asked a California federal judge on Aug. 14 to certify their case as a class action. The lawsuit, which finally survived the dismissal stage in May after six years of litigation and a trip to the Ninth Circuit, accuses Finisar and two executives of inflating its stock price for a three-month window before the bubble was popped by a poor sales projection. The suit stems from a 2010 conference call in which CEO Eitan Gertel made a vague statement about customer inventory levels that preceded a swift rise in the company's stock price. On Aug. 14, the Oklahoma Firefighters Pension and Retirement System asked the court to let the case proceed as a class action that it would lead and its lawyers at Abraham Fruchter & Twersky LLP would litigate. The requirements of numerosity, commonality, typicality and adequacy are met, the pension fund said, and an expert report confirmed that the market for Finisar stock was robust and responsive to information like Mr. Gertel's flub. "Defendants' fraud affected Oklahoma Firefighters and all class members uniformly because each purchased Finisar's artificially inflated stock, and later suffered losses when the price of that stock declined in response to public revelations of the fraud," the fund said. "The claims of Oklahoma Firefighters and all class members are based on the same legal theories and will be proven by the same set of operative facts." Ian Berg -- iberg@aftlaw.com -- a lawyer for the proposed class, said the plaintiffs believed the class certification motion is "strong, without credible basis for opposition." A lawyer for the defendants didn't respond to a request for comment. In the underlying suit, the investors say Mr. Gertel's statement, made in response to an analyst question about sales growth, gave them a false sense of reassurance and led to losses when the company told shareholders in March 2011 that slowing sales in China and customers who had already topped up their supplies meant its growth would be slower than expected. In the interim, they said, Mr. Gertel made a fat $5 million by selling 200,000 shares at inflated prices, and the company raised $118 million from investors. Between that and the fact that Finisar had touched base with its customers in late 2010 and should have known that their orders in 2011 would be smaller, the whiff of scienter was strong, the plaintiffs contend. Finisar had argued that Mr. Gertel's statement was "qualified and equivocal" and couldn't have been taken as positively by investors as the plaintiffs set out. The company also offered a different read on the final part of Mr. Gertel's answer, which didn't make linguistic sense. The investors said it was meant to quelch fears that Finisar's sales to telecommunications customers would drop; the company said it conveyed a degree of uncertainty. The statement ended, "And on the telecom side, look, there can be one or two guys who try to build their own inventory, but by far the majority of the customers expediting products and doesn't look to us, not visible to us at all, all these quarters if they are building any inventory," according to court papers. The investors are represented by Ian D. Berg, Takeo A. Kellar -- tkellar@aftlaw.com -- and Mitchell M.Z. Twersky -- mtwersky@aftlaw.com -- of Abraham Fruchter & Twersky LLP. The defendants are represented by Shirli Fabbri Weiss -- shirli.weiss@dlapiper.com -- and David Priebe -- david.priebe@dlapiper.com -- of DLA Piper. The case is In re: Finisar Corp. Securities Litigation, Case No. 5:11-cv-01252 (N.D. Cal.). The case is assigned to Judge Edward J. Davila. The case was filed March 15, 2011. [GN] FLINT, MI: Racism Plays Role in Water Crisis, Commission Reveals ---------------------------------------------------------------- Debra Cassens Weiss, writing for ABA Journal, reports that civil rights lawyer Daniel Sheehan wasn't even listed as a speaker for a water-rights program at the ABA Annual Meeting on Aug. 13, but he managed to get a round of applause when he called for removal of President Donald Trump and the election of a progressive president. Filling in for a water-rights panelist who was unable to be there, Mr. Sheehan raised another environmental issue -- climate change - - and alleged that the Trump administration has been "captured by the petroleum industry" and was "sticking its thumb in the eye of the entire world." He spoke at a program (PDF) called "From Standing Rock to Flint: Water Rights, Race and Resistance." Trump had been an investor in the Dakota Access Pipeline (he sold his stake in the company overseeing construction, according to CNBC), yet he went on to order the U.S. Army Corps of Engineers to grant the easement for the project, according to Sheehan, who is chief counsel for the Lakota People's Law Project. The pipeline, to be built on land bordering or under Lake Oahe, is opposed by the Standing Rock Sioux Tribe. The tribe fears a potential spill could harm its water supply and says the project will make the water spiritually impure. The tribe also argues the project will destroy sites of cultural and historical importance. Thousands of protesters who tried to block the pipeline last year were met by private security police "in full battle regalia," mounted on BearCats and wielding powerful water cannons, Sheehan said. In all, 834 protesters were arrested, he said. The tribe saw some courtroom success in June, when a federal judge found the Army Corps had not adequately studied three major issues, according to another panelist, Jodi Gillette, a political appointee in the Obama administration who served as special assistant to the president for Native American Affairs in the White House Domestic Policy Council. The issues needing more study were the impact on the tribe's treaty rights to hunting and fishing, pipeline safety and environmental justice. According to Ms. Gillette, the issue in the case is one of collective rights and tribal sovereignty: "What we really want is that self-determination." Jodi Gillette, a political appointee in the Obama administration who served as special assistant to the president for Native American Affairs in the White House Domestic Policy Council. The government's treatment of minorities is also at issue in the Flint, Michigan, water case, according to panelist Julie Hurwitz, whose legal team is serving as co-lead counsel in federal class action litigation stemming from the crisis. By her count, more than 64 class action and individual cases have been filed. Water officials had switched Flint's water supply in April 2014 from Lake Huron to the Flint River to save money, but didn't treat the corrosive water to prevent lead from leaching into it. There were immediate complaints about the water's taste and smell, as well as its apparent connection to rashes, hair loss and E. coli infections. But government officials reacted with deliberate indifference, she said. A civil rights commission appointed to investigate the crisis concluded that systemic racism played a role in causing the crisis. Five government officials have been charged with involuntary manslaughter in the death of an 85-year-old man who died from Legionnaires' disease, which is believed to be tied to the water. Panelist Keith Harper, a partner at Kilpatrick Townsend involved in Native American litigation, says the Flint and pipeline cases are "harbingers of conflict in the future." Water represents life, he said, and "this is increasingly going to become an issue of contention because water is so vital." Mr. Sheehan urged those in the room -- as well as the ABA -- to raise the alarm about the water rights issues: "Everybody sits around having polite conversations because nobody wants to be rude, nobody wants to upset anybody," he complained. [GN] FORD MOTOR: Faces Litigation Woes Over Defective Transmissions -------------------------------------------------------------- Yvonne Colbert, writing for CBC News, reports that Ford is facing increasing international pressure over transmission problems in some of its Focus and Fiesta models. A Canadian lawyer is seeking certification for a class action suit, Transport Canada is continuing its defect investigation and the Australian government is starting action against the automaker for alleged "unconscionable and misleading" conduct. At the same time, Ford has agreed to a proposed class action settlement in the United States. "We've accumulated almost 3,000 registrations from people who've experienced terrible problems with their vehicles," said lawyer Ted Charney, who is leading the $825-million Canadian class action. Dual clutch transmission to blame At issue is the PowerShift transmission in 2011-16 Fiesta and 2012-16 Focus models. The vehicles are sold as automatics and have what Ford calls PowerShift dual clutch transmission -- essentially two manual transmissions working in parallel, each with its own independent clutch. The problems experienced by these vehicle owners are all similar, including shuddering, delayed acceleration, sudden acceleration and sudden loss of power. Trish Glabb of Stoney Point, Ont., no longer owns the 2014 Focus that she plastered with lemon stickers. The final straw came when she was left fearing for her life, her mother's life and that of her 13-year-old as her mother was about to drive onto Highway 401. "We were coming up the on ramp and my car just got stuck in its gear -- which it is notorious for doing -- and it wouldn't go any faster," Ms. Glabb said. "It was revving out to 7,500. We were between two semis and then the car decided to lunge forward." She said her mother was able to merge into the next lane and avoid an accident, but the experience sent a livid Glabb to McDonnell Motors in Strathroy, Ont., where she'd purchased the vehicle. The dealership had previously replaced two clutches on the car and performed several updates to its computer. "They finally agreed to buy out what was left owing on the Focus and gave me enough money for a down payment so I could afford a 2017 Ford Fusion," Glabb said. 145,000 such vehicles in Canada It's not known how many times Ford has quietly settled with owners. It's estimated 145,000 of the cars have been sold in Canada. Transport Canada says it has received 1,235 complaints concerning the transmissions but "most complaints received . . . are not safety related and pertain to driveability and performance concerns." The department says it is not aware of any injuries related to this issue. Mr. Charney is hoping the Canadian class action will be certified by the courts in November. In the meantime, Transport Canada is continuing with its defect investigation into the cars, saying it is at the "preliminary evaluation" stage. It says it will be meeting with Ford Canada in the fall as part of the probe. Australia calls Ford 'unconscionable' In Australia, the government is taking a hard line against Ford Motor Company of Australia Limited, alleging it engaged "unconscionable and misleading or deceptive conduct, and made false and misleading representations in response to customer complaints." A government news release alleges Ford misled customers who complained about the vehicles, telling them "the issues . . . were caused by the way the driver handled the vehicle, even though Ford was aware of systemic issues . . . from at least 2013." It also alleges Ford refused to provide a refund or replacement vehicle unless customers paid on average $7,000 for a replacement vehicle. It says in many cases, "customers who could not afford to make these payments felt they had no option but to continue to use their vehicle." The Australian allegations have not been tested in court. U.S. settlement pending court approval In the U.S., Ford Motor Company has reached a proposed settlement in a class action lawsuit involving the vehicles. It will go before the court for final approval in October. If it is given the green light, it will see a binding arbitration process for buybacks or repairs, as well as cash payments and/or discounts on future Ford purchases. Mr. Charney said Ford likely decided to settle the American class action because the U.S. has much stronger legislation and repercussions. "If somebody actually gets into an accident where there's serious injuries down there then there's Senate hearings and they have to go to regulatory bodies and explain why they sat on this for years," he said. Lawyer says Ford feels 'immune' Regardless, Mr. Charney said with the facts of this case it doesn't matter how strong the legislation is. "Something's going to have to be done about them one way or another. There's just too many people complaining about them now," he said. He thinks Ford is "oblivious" to the concerns and considers itself "immune" because of its size and political strength. "They consider this to be a little blip, or until somebody dies in an accident that has something to do with their bad transmission, I don't think they're going to pay attention to it," Mr. Charney said. "They're too big to be bothered with these things." Ford responds Ford of Canada responded to CBC's inquiry acknowledging the U.S. settlement, saying it only affects U.S. residents who meet certain criteria. "Ford of Canada is not a party to the U.S. litigation or the settlement," company spokesperson Michelle Lee-Gracey said in an email. "Canada is a different jurisdiction from the U.S., with different laws and rules of civil procedure. Ford of Canada continues to defend its litigation." Halifax resident Jordan Bonaparte, who first flagged this story for CBC because of problems with his 2013 Focus, said Ford should be embarrassed and ashamed of the way it has treated its vehicle owners. He is also encouraging others to fight for a remedy if they believe they have been treated unfairly. "People who feel they've been wronged by a large corporation, they need to stand up for themselves by getting organized, by getting educated on the background and just being persistent," he said. [GN] FORTERRA INC: Robbins Geller Files Class Action in New York ----------------------------------------------------------- Robbins Geller Rudman & Dowd LLP ("Robbins Geller") (http://www.rgrdlaw.com/cases/forterra/)on Aug. 14 disclosed that a class action has been commenced on behalf of purchasers of Forterra, Inc. ("Forterra" or the "Company") common stock issued in connection with the Company's October 21, 2016 initial public offering (the "IPO"). This action was filed in the United States District Court for the Eastern District of New York and is captioned Forrester v. Forterra, Inc., et al., No. 2:17-cv-04763. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from August 14, 2017. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller, at 800-449-4900 or 619-231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/forterra/.Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges Forterra, certain of its officers and directors and the underwriters of its IPO with violations of the Securities Act of 1933. Forterra manufactures pipe and various precast products. The complaint alleges that the Registration Statement used to conduct the IPO contained inaccurate statements and omitted facts necessary to make other statements made therein not misleading. Among other things, the Registration Statement failed to disclose, at the time of the IPO, that organic sales in Forterra's Drainage and Water segments had significantly declined, that Forterra was experiencing increased pricing pressure due to competition and continued softness in its concrete and steel pipe business, that Forterra had been losing business in its important pipe and precast business due to in large part to operational problems at its production plants, and that Forterra had undisclosed material weaknesses in its internal controls that prevented it from accurately reporting and forecasting its financial results. The IPO was successful for the Company and the underwriters, who sold 18.42 million shares of Forterra common stock to the public at $18 per share, raising more than $331 million in gross proceeds. As the market learned the truth about the Company's business and finances following the IPO, the price of Forterra common stock declined and the stock now trades at approximately 75% of its IPO price. Plaintiff seeks to recover damages on behalf of all purchasers of Forterra common stock issued in connection with the Company's October 21, 2016 IPO (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud. Robbins Geller -- http://www.rgrdlaw.com-- is a law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. [GN] GLOBAL FITNESS: Paul Appeals Ruling in "Gascho" Suit to 6th Cir. ---------------------------------------------------------------- Interested Party Doctor Laurence E. Paul filed an appeal from a court ruling in the lawsuit entitled Amber Gascho, et al. v. Global Fitness Holdings, LLC, et al., Case No. 2:11-cv-00436, in the U.S. District Court for the Southern District of Ohio at Columbus. The appellate case is captioned as Amber Gascho, et al. v. Global Fitness Holdings, LLC, et al., Case No. 17-3821, in the United States Court of Appeals for the Sixth Circuit. As previously reported in the Class Action Reporter, several interested parties have filed separate appeals in the lawsuit.[BN] Plaintiffs-Appellees AMBER GASCHO, ASHLEY BUCKENMEYER, MICHAEL J HOGAN, JULIA CAY, fka Julia Snyder, ANTHONY MEYER, TERRY E TROUTMAN, RITA ROSE, EDWARD LUNDBERG, ALBERT TARTAGLIA, MICHAEL BELL, MATT VOLKERDING and PATRICK CARY, on Behalf of Themselves and all Others Similarly Situated, are represented by: Thomas N. McCormick, Esq. VORYS, SATER, SEYMOUR & PEASE P.O. Box 1008 Columbus, OH 43215 Telephone: (614) 464-6400 E-mail: tnmccormick@vorys.com Interested Party-Appellant LAURENCE E. PAUL is represented by: Richard Gurbst, Esq. SQUIRE PATTON BOGGS 127 Public Square, Suite 4900 Cleveland, OH 44114 Telephone: (216) 479-8500 E-mail: richard.gurbst@squirepb.com GLOBALSCAPE INC: Block & Leviton Files Securities Class Action -------------------------------------------------------------- Block & Leviton LLP, a securities litigation firm representing investors nationwide, on Aug. 9 disclosed that it has filed a class action lawsuit against GlobalSCAPE, Inc. ("Global" or the "Company") (NYSE: GSB) and certain of its officers and directors for violations of the federal securities laws. If you purchased or otherwise acquired Global securities during the Class Period described below and have questions about your legal rights or possess information relevant to this lawsuit, please contact attorney Bradley Vettraino at (617) 398-5600, by email at bradley@blockesq.com, or by visiting www.blockesq.com/gsb. On August 7, 2017, after trading had closed, Global disclosed that its audit committee has been "conducting an investigation" into certain transactions in the fourth quarter of 2016" and that the Company "intends to effect a restatement of its previously issued financial statements through filing an amended Annual Report on Form 10-K for the year ended December 31, 2016 and an amended Quarterly Report on Form 10-Q for the quarter ended March 31, 2017." On this news, Global's share price fell 17.66% to close at $3.87 on August 8, 2017, causing millions in losses to investors. The lawsuit, brought on behalf of investors who purchased or otherwise acquired Global securities between January 26, 2017 and August 7, 2017, inclusive (the "Class Period") alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (i) Global overstated the reported amounts of accounts receivable as of December 31, 2016, and license revenue for the three months and year ended December 31, 2016, by approximately $403,000 and $396,000, respectively, resulting in the overstatement of the Company's revenues for those periods by the same amounts; (ii) the Company's total current assets and total assets were overstated by $292,000; (iii) the Company's total stockholder equity and total liabilities and stockholders' equity were overstated by $217,000 and $292,000, respectively; (iv) the Company lacked adequate internal controls over financial reporting; and (v) that as a result, Global's publicly disseminated financial statements were materially false and misleading. If you wish to serve as a lead plaintiff, you must move the Court no later than October 9, 2017. As a member of the class, you may seek to file a motion to serve as a lead plaintiff or take no action and remain an absent class member. If you wish to become involved in the litigation or have questions about your legal rights, please contact attorney Bradley Vettraino at (617) 398- 5600, by email at bradley@blockesq.com. Confidentiality to whistleblowers or others with information relevant to this investigation is assured. Block & Leviton LLP -- http://www.blockesq.com-- is a Boston- based law firm representing investors nationwide. The firm's lawyers have collectively been prosecuting securities cases on behalf of individual and institutional investors for over 50 years, and have recovered billions of dollars on their behalf. Block & Leviton's investigations into corporate wrongdoing were recently covered by the New York Times. The lawsuit is pending in the Western District of Texas and is captioned Giovagnoli v. GlobalSCAPE, Inc., et al., No. 5:17-cv- 00753. The courthouse is located at 2450 State Hwy. 118 Alpine, Texas 79830. [GN] GLOBALSCAPE INC: Oct. 10 Lead Plaintiff Motion Deadline Set ----------------------------------------------------------- Khang & Khang LLP (the "Firm") on Aug. 14 announced the filing of a securities class action lawsuit against GlobalSCAPE, Inc. ("GlobalSCAPE" or the "Company"). Investors who purchased or otherwise acquired shares between January 26, 2017 and August 7, 2017, inclusive (the "Class Period"), are encouraged to contact the Firm in advance of the October 10, 2017 lead plaintiff motion deadline. If you purchased GlobalSCAPE shares during the Class Period, please contact Joon M. Khang, Esquire, of Khang & Khang LLP, 4000 Barranca Parkway, Suite 250, Irvine, CA 92604, by telephone: (949) 419-3834, or by e-mail at joon@khanglaw.com. There has been no class certification in this case yet. Until certification occurs, you are not represented by an attorney. You may choose to take no action and remain a passive class member as well. According to the Complaint, throughout the Class Period, GlobalSCAPE made false and/or misleading statements and/or failed to disclose: that the Company overstated the reported amounts of accounts receivable as of December 31, 2016, and license revenue for the three months and year ended December 31, 2016, by approximately $403,000 and $396,000, respectively, resulting in the overstatement of the Company's revenues for those periods by the same amounts; that GlobalSCAPE's total current assets and total assets were overstated by $292,000; that the Company's total stockholder equity and total liabilities and stockholders' equity were overstated by $217,000 and $292,000, respectively; that GlobalSCAPE lacked adequate internal controls over financial reporting; and that as a result of the above, the Company's publicly disseminated financial statements were materially false and misleading. When this news was announced, shares of GlobalSCAPE declined in value materially, which caused investors harm according to the Complaint. If you wish to learn more about this lawsuit, or if you have any questions concerning this notice or your rights, please contact Joon M. Khang, Esquire, a prominent litigator for almost two decades, by telephone: (949) 419-3834, or via e-mail at joon@khanglaw.com. [GN] GOOGLE INC: Altshuler Firm Mulls Gender Pay Class Action -------------------------------------------------------- David Ruiz, writing for The Recorder, reports that local plaintiffs firm Altshuler Berzon is gathering kindling for a potential class action against Google Inc., with dozens of current and former female employees claiming their male counterparts made more money. The news comes weeks after a judge told Google to hand over more data for a U.S. Department of Labor audit that invoked the specter of gender pay discrimination, and just days after an internal, employee-written memo gained notoriety for its denouncement of Google's "arbitrary" approach to gender diversity. James Finberg, who is representing the former and current Google employees in the potential suit, said in a phone interview on Aug. 9 that he first gained interest in Google's internal issues during the company's fight with the Office of Federal Contract Compliance Programs, a workplace discrimination auditing arm of the Labor Department. Before an administrative law judge in San Francisco, OFCCP regional solicitor Janet Wipper testified that her agency found "systemic compensation disparities against women pretty much across the entire workforce," in a partial analysis of Google's employee compensation data. Janet Herold, another regional solicitor with OFCCP, later told Wired that a "preliminary analysis showed 6 to 7 standard deviations between pay for men and women in nearly every job classification." That surprised Mr. Finberg. "We looked and said, 'Wow, that's pretty serious,'" Mr. Finberg said, adding that the likelihood of such statistical deviations happening randomly is one in 100 million. "We were interested in hearing women's experiences." The law firm put a public post on Facebook on July 10, Mr. Finberg said. He said the firm received 70 responses in a couple of weeks. The firm also has a website advertisement asking other women to come forward if they have experienced what they believe is gender pay discrimination at Google. Mr. Finberg said he plans to file his class action by the end of the month, and that the number of women covered by the lawsuit will balloon far past 70. He said some of his clients will sue under the California Fair Pay Act, which was amended at the start of the year to include language that prohibits employers from unfairly paying a new hire based on prior pay alone. Mr. Finberg said that testimony in the Labor Department hearing showed that Google uses prior salary as one of several factors when determining the pay of "industry hires," meaning employees hired not immediately out of college. Even if Google doesn't know the gender of its employees, that practice can disfavor women, Mr. Finberg said. "We know from studies that women make less than men in America, so if you use prior pay to set salary, you'll institutionalize gender pay discrimination," Mr. Finberg said. "The California law was amended recently and it makes it crystal clear that what I just described is illegal." A Google representative did not respond to direct questions about the class action or if outside counsel has been selected, but instead forwarded a recent post by Google CEO Sundar Pichai in response to a separate issue regarding a memo drafted by a former engineer that has roiled Google's campus. The representative also forwarded an April 11 post written by Eileen Naughton, vice president of people operations, about Google valuing equal pay among men and women. With claims of gender discrimination, allegations of an internal "bro-culture" polluting the hallways and wall-to-wall, it seems that Google is having an Uber moment. [GN] GOOGLE INC: 250+ People Join Age Discrimination Class Action ------------------------------------------------------------ Lucas Nolan, writing for Breitbart, reports that over 250 people have joined a class action lawsuit alleging that they were treated unfairly by Google due to their age. The Business Journals reports that 269 people have joined a class- action lawsuit against Google claiming that the Silicon Valley tech company discriminated against them in the workplace based on their age. The lawsuit began in 2015 with plaintiff Robert Heath and was officially certified as a class-action lawsuit in 2016 once others came forward with similar complaints. Details of the lawsuit were recently revealed by U.S. District Court Judge Howard Lloyd. Cheryl Fillekes joined Robert Heath in the case against Google in 2015 claiming that Google did not hire her for an engineering position which she was qualified for because of her age. Ms. Fillekes claimed that while being interviewed at Google, a recruiter asked her to put her graduation year on her resume so that Google could gain an understanding of how old she was. Ms. Fillekes believes this request violated the federal Age Discrimination in Employment Act and has joined Heath's lawsuit. U.S. District Court Judge Beth Labson Freeman ruled in October of 2016 that other software engineers could join the lawsuit, with many other software engineers reporting similar treatment by the company. Google spokesperson Ty Sheppard told The Business Journals, "We believe the allegations here are without merit and will continue to defend our position vigorously. We have strong policies against discrimination on any unlawful basis, including age." Judge Freeman reportedly responded to Google's statement by saying, "Having such a policy does not necessarily shield a company from a discrimination suit, particularly in light of the evidence and allegations presented here . . . today, most, if not all, companies are well versed in anti-discrimination and make great efforts to ensure their written policies comply with anti- discrimination law." Many Silicon Valley tech workers are quite young, with Huffington Post reporting that the average age of workers in Silicon Valley is approximately 29 years old. Google has a history of being accused of age discrimination and was sued in 2004, ultimately settling out of court for an undisclosed amount of money. [GN] HEFFLER RADETICH: Fraud Class Action Can Proceed, Judge Rules ------------------------------------------------------------- Max Mitchell, writing for The Legal Intelligencer, reports that a class action against an accounting firm whose former employee is alleged to have distributed nearly $6 million worth of fraudulent claims from a multidistrict litigation settlement can survive despite technically being filed outside the statute of limitations, a federal judge has ruled. U.S. District Judge Jan DuBois of the Eastern District of Pennsylvania on Aug. 11 gave a green light to the lawsuit against Heffler, Radetich & Saitta to survive a statute of limitations challenge. The claims stem from a $490 million settlement involving a securities litigation that arose from the merger between BankAmerica Corp. and NationsBank. Although plaintiff James Oetting lodged his proposed class lawsuit more than two years after a former employee of the accounting firm pleaded guilty to fraud in connection with settlement funds the firm managed, Judge DuBois determined the defendants had been aware of the claims through a supplemental complaint Mr. Oetting filed with the MDL two years before the lawsuit was properly filed in Missouri federal court. "There is no evidence that [the proposed class's] filings were anything other than a good-faith effort to commence an action against Heffler," Judge DuBois said. "Heffler has no reasonable argument that it was 'surprised' or not 'on notice' of the claims against it within the statutory period." Mr. Oetting's attorney, Frank Tomlinson of Tomlinson Law in Birmingham, Alabama, did not return a phone call. Buchanan Ingersoll & Rooney attorney Howard Scher -- howard.scher@bipc.com -- who is representing Heffler, Radetich & Saitta, also did not return a call for comment. According to Judge DuBois, Christian Penta, who had worked at the accounting firm in 2004 when the settlement began to be distributed, was indicted in October 2008, and pleaded guilty to mail fraud, wire fraud and filing a false tax return. He was also sentenced to 60 months in prison, and ordered to pay $19.5 million in restitution. Judge DuBois said the first distribution payment from the underlying MDL settlement included payments of more than $5.87 million based on fraudulent claims submitted by Mr. Penta and his co-conspirators. The law firm of Green Jacobson, which had been class counsel in the underlying MDL, filed a supplemental complaint with the MDL court in October 2009, asserting breach of fiduciary duty, negligent misrepresentation and accountant malpractice, among other claims. The MDL court, however, dismissed the claims in November 2010, finding that, while the allegations were connected to the underlying MDL, they were not similar enough to justify supplemental pleadings. Mr. Oetting eventually filed his suit in February 2011. Judge DuBois said the suit was clearly filed outside of Pennsylvania's two-year statute of limitations, but he determined that Missouri's saving statute, which gives a plaintiff a one-year extension to refile claims that were timely commenced and subsequently dismissed, applied to the case. Specifically, Judge DuBois said the 2009 supplemental complaint was served on all counsel, and that Heffler did not file its motion to strike the complaint until May 2010. "That delay indicates that none of the parties involved -- not the NationsBank class, not Heffler, and not even the MDL court -- recognized plaintiff's procedural error," Judge DuBois said. "Therefore, notwithstanding the NationsBank class's procedural error, the court construes the supplemental complaint as having been filed on Oct. 29, 2009, effectively 'commencing' an action for purpose of applying the Missouri savings statute." [GN] HOME CAPITAL: Aug. 21 Class Action Settlement Approval Hearing Set ------------------------------------------------------------------ Home Capital Group Inc. ("Home Capital" or "the Company") (TSX: HCG) on Aug. 9 disclosed that the Ontario Securities Commission ("OSC") issued an order approving the previously announced settlement of an enforcement proceeding commenced in April 2017 regarding the Company's disclosure in 2014 and 2015. As previously announced, the Company entered into two agreements which comprise a global settlement of the OSC proceeding and related class action with each settlement being conditional on the approval of the other. The order approving the OSC settlement is effective only upon the final court approval of the class action settlement. A hearing to consider approval of the class action settlement is scheduled for August 21, 2017. Pursuant to the terms of the settlement agreement with the OSC, Home Capital will not be making any further statements on this matter outside of the approval proceedings. About Home Capital Group Inc. Home Capital Group Inc. is a public company, traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering residential and non-residential mortgage lending, securitization of insured residential mortgage products, consumer lending and credit card services. In addition, Home Trust offers deposits via brokers and financial planners, and through its direct to consumer deposit brand, Oaken Financial. Home Trust also conducts business through its wholly owned subsidiary, Home Bank. Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba. [GN] IOWA: Oct. 2 Hearing Set in Disabled People's Medicaid Class Suit ----------------------------------------------------------------- Tony Leys, writing for The Des Moines Register, reports that disabled Iowans do not have a legal right to Medicaid-financed services beyond what is spelled out in law, state lawyers contend in their formal response to a lawsuit filed against Iowa's governor and human services director. The response says the state is required only to take "reasonably feasible" steps to help people with disabilities live in communities instead of in nursing homes or other facilities. That requirement isn't infinite, the state says. The advocacy group Disability Rights Iowa filed a federal lawsuit in June against Gov. Kim Reynolds and Department of Human Services Director Jerry Foxhoven. The lawsuit contends disabled Iowans have seen drastic cuts to in- home services since Iowa made the controversial decision to hire for-profit companies to run its Medicaid program last year. Those service cuts threaten participants' ability to live in their homes instead of in nursing homes or institutions, the lawsuit says. The suit contends the service reductions violate the federal American with Disabilities Act and a 1999 U.S. Supreme Court ruling, known as the Olmstead decision, which confirmed the right of people with disabilities to live in community settings. The Iowa attorney general's office, which is defending the governor and human services director, recently filed a formal response to the lawsuit. The state lawyers urged Judge Rebecca Goodgame Ebinger to deny Disability Rights Iowa's request that she order state administrators to resume direct oversight of Medicaid benefits for about 15,000 Iowans with disabilities. The advocacy group's suit says state administrators used to routinely grant "exceptions to policy," allowing disabled Iowans to receive substantially more in-home care than was required by state law. But such exceptions have been reined in since the private companies took control of Iowa's Medicaid program last year, the suit says. The state lawyers wrote in their response that the disabled Medicaid recipients have no ironclad right to extra services. "An exception to policy is an available benefit, but not an entitlement," the state's response says. The managed-care companies' contracts forbid them from cutting services to disabled participants without an updated assessment of the patients' needs. The Department of Human Services has been monitoring the companies' compliance with the requirement, the state lawyers wrote. The attorney general's response to the lawsuit also says the Americans with Disabilities Act and the U.S. Supreme Court's Olmstead decision recognize limits to the lengths states must go to help people with disabilities live outside of nursing homes or institutions. "States are required to provide care in an integrated environment for as many persons with disabilities as is reasonably feasible, so long as such an environment is appropriate to their needs," the response says. Disability Rights Iowa filed a formal reply to the state's response. The advocacy group said other federal judges have ruled states may not cut "exception to policy" services to disabled people just to save money. "Other courts have heard this same argument and held that the harm to plaintiffs' health outweighs any burden on a state budget," wrote lawyers for the group, which is federally chartered to defend the rights of people with disabilities. The legal back-and-forth comes amid extended controversy over Iowa's 2016 transition to private Medicaid management. Supporters, including the governor, contend the shift is leading to more effective, efficient care for the nearly 600,000 poor or disabled Iowans whose health care is covered by Medicaid. Critics say the shift has led to snarls of red tape for care providers and cuts in services for Medicaid recipients. In one of the most recent developments, critics have pointed to the case of an Orange City man with quadriplegia. Todd Mouw, 53, died July 8, three months after the Medicaid management firm Amerigroup informed him it was limiting whom it would pay to provide his in-home services. The Mouws were not part of the Disability Rights Iowa lawsuit, which was initially filed on behalf of six other Medicaid participants with disabilities. But the group is asking Judge Goodgame Ebinger to grant class-action status to the lawsuit. Such status would mean the suit would be filed on behalf of all Iowans who are enrolled in special Medicaid programs for people with serious disabilities. The attorney general's office opposes the request for class-action status. The state lawyers say each Medicaid enrollee's circumstances are different, and each one would have to give permission for their health care information to be examined as part of the court process. The state lawyers also say that the Department of Human Services is monitoring how the private management companies are handling people with disabilities, and that the department has been intervening when there are complaints. A federal court hearing on the lawsuit has been set for Oct. 12. [GN] J ROCKLIFF: Obtains Favorable Ruling in Arbitration Bid ------------------------------------------------------- Olivia Olsen, writing for Northern California Record, reports that the California First District Court of Appeal recently ruled in favor of real estate brokers J. Rockcliff Inc. and Mason McDuffie Real Estate in their appeal to hold arbitration in a matter related to two similar class action lawsuits brought by homeowners. The original suits, deemed "materially identical," were filed against several real estate and title companies for their alleged misuse of the software Transaction Point. The web-based software developed for real estate is advertised on its website to "automate the entire real estate transaction." Developed by Real Estate Digital, whose list of tools include reDataVault and rDesk Websites, the software aimed to reduce liability risk. However, the homeowners in the suit said defendants added kickback fees to the closing costs and presented them as sub-license fees through the software. The defendants requested arbitration in the matters, but a trial court judge denied the motion. An appeal was made by the companies (J. Rockcliff and Mason McDuffie were the only two named in the appeal), and the issue was reviewed. Three different arbitration clauses were considered by both courts, residential listing agreement (RLA), and two different residential purchase agreement (RPA) clauses from 2007 and 2010. The trial court decided that only the 2010 RPA was applicable, whereas the appeals court stated all three were valid clauses for arbitration. Though negotiations between the parties is likely to commence, the ramifications of the misuse of the software and the court's ruling could continue to affect California homeowners. "California consumers need to be aware that the courts are going to enforce arbitration clauses contained in real estate contracts," a representative for the California Department of Consumer Affairs Office of Public Affairs told the Northern California Record. "Unfortunately, the burden of research may be placed on the home buyer when it comes to understanding if all parts of your real estate deal are legitimate. The California Bureau of Real Estate believes that most, if not all, real estate contracts include such language." When it comes to questionable fees, the department warns home buyers, ". . . consumers should expect that arbitration is a real possibility if a conflict arises in a real estate transaction." She goes on to summarize that "if a consumer signs an arbitration clause, they can expect arbitration." [GN] JACKSONVILLE, FL: Responds to Fairway Oaks Residents' Class Action ------------------------------------------------------------------ Francesca Amiker, writing for News4Jax, reports that an attorney representing Fairway Oaks residents, who have been fighting for years to get repairs to what they call poorly built homes, said the city of Jacksonville and Habitat for Humanity of Jacksonville have responded to a class action lawsuit he filed in May on the residents' behalf. Since May 2016, the News4Jax I-TEAM has been digging into reports that show the area in Northwest Jacksonville in which HabiJax chose to build the 85 homes in 2000 is near a landfill that might not have been lined in the 1950s. Within five years of the homes being built by HabiJax and 10,000 volunteers in 17 days, residents said that they noticed their homes were shaking and unsettled, and homeowners also began complaining about cracked slabs, sinking, mold and termites. But HabiJax has claimed that homeowners' "complaints stem from lack of maintenance and not from poor construction." Despite that assertion, Fairway Oaks residents were given hope as they watched multiple City Council members, the mayor and even a state senator tour their sinking homes earlier this year, but to no avail. Attorney Jack Krumbein, of Krumbein Law PLLC & The Strems Law Firm, has only been working with the Fairway Oaks residents for a few months, but he's already brought them more hope than anyone who has stepped into their sinking and cracking homes. "The homeowners are excited. They are energized. They are some of the strongest people that I've ever met," Mr. Krumbein said. "They are individuals that have endured a difficult time in their lives, and they need resolution." Mr. Krumbein, who was initially contacted by Fairway Oaks Homeowners Association president Nathaniel Borden, took a step toward that resolution when he filed a 51-page class action lawsuit outlining 12 different counts against both the city and HabiJax earlier this year. He said both parties have responded, filing motions to dismiss, which he described as "very interesting." Mr. Krumbein said that in their response, HabiJax and the city claim the statute of limitations to file a lawsuit has expired, but Mr. Krumbein said several agreements that would extend that time frame were negotiated by his clients' previous attorneys. He said the city and HabiJax failed to include that information in their motions. The case is set for its first hearing in January, and Mr. Krumbein said it's important that it moves quickly. "I guess my biggest concern is the amount of time it's going to take," Mr. Krumbein said. "Fortunately, we have a system that allows for a judge to make a decision without a jury. It's really the ultimate form of society governing itself." He said he doesn't plan on backing down and that he will prevail. He's already in the written discovery process and has received affidavits from nearly 60 residents, all saying they were not told the homes were built on potentially contaminated land. The residents are asking for undisclosed damages in the suit. Mr. Krumbein said he is grateful to Jacksonville Area Legal Aid for stepping in when it did, because if it had not, the situation would have been lost. But he wishes a lawsuit had been filed earlier. What the lawsuit alleges In the lawsuit, count one alleges there was a breach of contract by HabiJax. It says the residents were sold properties built on a former city dump and that those homes are not habitable. The lawsuit also claims negligence, stating that had the city and HabiJax informed residents about the properties they were purchasing, they would have never experienced damages. Another count in the lawsuit is negligent misrepresentation by HabiJax. It states HabiJax represented that the houses met reasonable standards of quality and habitability but that HabiJax knew or should have known that its representation of the quality of houses being sold to the plaintiffs wasn't right. The lawsuit goes on to say that HabiJax concealed or left out important facts. Mr. Krumbein said that sometimes people have to be able to call for a stranger's help, the same way one would call family, and that was the call he received from Borden. "It's a complaint that fundamentally involves breach of contract, negligence and various other accounts, including misrepresentation," Mr. Krumbein said. "This is about justice." [GN] JOHNSON & JOHNSON: Documents Reveal Mesh Marketing Tactics ---------------------------------------------------------- Sophie Scott and Alison Branley, writing for ABC News, report that Lamborghinis and ski trips to the Swiss Alps were among the incentives a pharmaceutical giant developed to market a surgical device that has ruined the lives of hundreds of Australian women. Documents obtained by the ABC show the extent to which Johnson and Johnson oversold its surgical mesh products, which are used to treat incontinence and prolapse after childbirth. They paint a picture of a company that tried to sell surgeons a jet-setting lifestyle where they could insert four devices "before lunch" and notch up $10,000 in surgeries in a single morning. The mesh devices have left at least 3,000 Australian women with serious side effects including chronic pain, infections and inability to have sex, and are the subject of both a Senate inquiry and a class action. New court documents released in the class action against Johnson and Johnson show that as early as 2009, concerns were raised inside the company that it was making "a huge mistake" by commercialising its latest brand of mesh, was "rushing to market", and opening up the use of the product to "unqualified surgeons". Lawyers from Shine, who are representing the women in the class action, claim the pharmaceutical giant did not investigate proper clinical trials on the possible complications of the mesh. The revelations have angered women such as Melbourne mother Shauna Cahill whose injuries from the mesh have left her in a wheelchair. The 35-year-old has been in constant pain since having the product, which is from another manufacturer, implanted just over a year ago. She viewed some of the marketing materials tendered to the court and was horrified. "If you read what's in that brochure, you'd definitely put your hand up and say, 'I'll have one of those', but that's not what I got," she said. Sydney gynaecologist Professor Theirry Vancaillie has backed patients' concerns about the marketing of the mesh kits. "There was a tendency to operate on more patients and on patients who may not have needed the insertion of the mesh," he said. "It's probably been a bit oversold." Company 'confident' of mesh safety A spokeswoman for Johnson and Johnson said it could not comment on documents presented in the class action because it was still before the courts. It said it provided safe products through surgeon training, product safety requirements and the medical technology code of conduct. "These products were developed in close consultation with specialist surgeons and are backed by clinical research," she said. "We have confidence in the safety and efficacy of these mesh products, they are backed by scientific research." The Royal Australian and New Zealand College of Obstetricians and Gynaecologists said the appropriate marketing of devices was "critically important" but president Professor Steve Robson said it was "beyond the control of the college". Patients seeking full mesh removal say they face resistance Women who are suffering severe side effects from the mesh said their pain was compounded when they couldn't find an Australian surgeon willing, or able, to fully remove the device. Patient groups said many doctors were reluctant to fully remove meshes because of a mistaken perception it was sufficient or safer to only partially remove it. Professor Vancaillie from the Women's Health Research Institute of Australia has just returned from the United States where he's learned to do full removals under US expert surgeon Dr Dionysios Veronikis. "I believe that Dr Veronikis has shown that by removing mesh in a number of, several hundreds of cases, that he achieves better results in pain management," Dr Vancaillie said. Patient groups are trying to get Dr Veronikis to visit Australia but said they had encountered resistance. The college maintains there are surgeons in Australia with the required skills and all urogynaecologists are trained in the procedure. "I'm not sure why some women have felt they need to go to America. There are a number of units around the country who have services specifically to deal with mesh and mesh complications," Professor Robson said. 'There's a lot of arrogance in this industry' Perth mother Carolyn Chisholm, who founded the Australian Pelvic Mesh Support Group, said many surgeons in Australia had not done the procedure. "I have done a poll and 70 per cent of women who've had a partial removal are worse off after their partial removal," she said. "I think there's a lot of arrogance in this particular industry." In the mean time, women in pain are waiting up to a year in the public hospital system for full or partial removals. Ms Chisholm said some patients had been told they could have a full removal, only to experience the opposite. "Then they go under the anaesthetic and they come out a few hours later and the surgeon says, 'I'm really sorry we only removed 2 centimetres of your mesh'." The college said it was important to respect surgeons' judgement because they tried to minimise risk. "It's very individual, it has to be something that is subject to assessment," Professor Robson said. 'Just to make dinner, I stand there crying' Mother of two Stella Channing said she would wait until Dr Veronikis came to Australia. "My mesh is like a hammock and so standing up, it's like trampoline springs, it all pulls," she said. "Just to make dinner, I stand there crying." How a vaginal mesh implant destroyed Maessen's life Jan Maessen is calling for mesh implants to be banned, claiming the "simple operation" destroyed her life and left her in chronic, debilitating pain. The Perth woman said she was unhappy with the response of her original surgeon and a specialist pelvic pain centre, which was unable to help her. "I went back to the implanting surgeon and he acted as if I was only the only one who had an issue with this mesh," she said. "They don't know how to treat mesh-injured women, so I've actually stopped looking for help in Australia. It has shaken my faith in the medical community." The Royal Australia and New Zealand College of Obstetricians and Gynaecologists said it was important to remember many women had good results from mesh and it was particularly effective for urinary incontinence. "If women have . . . gone back to their surgeon and have not got a fair hearing, that's wrong, I'm extremely sorry," Professor Robson said. He said the profession had learned lessons from the women's health scandal. "I don't want people to get the sense that people were guinea pigs or experiments at all. People were trying to help a distressing problem." Patients are calling for a moratorium on implanting the remaining products on the market, but surgeons said the mesh option should be available as a last resort. [GN] JUNO HEALTHCARE: "Bolin" Class Suit Seeks to Recover Unpaid Wages ----------------------------------------------------------------- Lillie Renae Bolin, individually and on behalf of all other similarly situated employees v. Juno Healthcare Registry, Inc. and Does 1 through 50, inclusive, Case No. CAC-D-308 (Cal. Super. Ct., August 10, 2017), seeks to recover unpaid compensation for meal and rest period violations, unpaid compensation for all hours worked, payment of minimum and overtime wages, payment of wages due upon termination of employment, unpaid reimbursement, and statutory penalties, as well as interest and attorney's fees and costs under California Labor Code. Juno Healthcare Registry, Inc. offers staffing options to healthcare facilities in the United States. [BN] The Plaintiff is represented by: Graham S.P. Hollis, Esq. Caroline Massey, Esq. Paloma Acosta, Esq. GRAHAMHOLLIS APC 3555 Fifth Avenue, Suite 200 San Diego, CA 92103 Telephone: (619) 692-0800 Facsimile: (619) 692-0822 E-mail: ghollis@graharnhollis.com cmassey@grahamhollis.com pacosta@grahamhollis.com JUST BORN: Faces "Buso" Class Suit Over Slack-Fill Containers ------------------------------------------------------------- Anthony Buso, individually and on behalf of all others similarly situated v. Just Born, Inc. and Does 1 through 10, inclusive, Case No. 3:17-cv-01630-JAH-JMA (S.D. Cal., August 11, 2017), is an action for damages as a result of the Defendant's practice of placing its Mike and Ike Original Fruits products in an opaque container that contain more than 30% empty space, or slack-fill. Just Born, Inc. operates a candy company that manufactures and markets a number of candies including Goldenberg's Peanut Chews, Hot Tamales, Mike and Ike, Peeps, Teenee Beanee jelly beans, and Zours. [BN] The Plaintiff is represented by: Scott J. Ferrell, Esq. PACIFIC TRIAL ATTORNEYS A Professional Corporation 4100 Newport Place, Ste. 800 Newport Beach, CA 92660 Telephone: (949) 706-6464 Facsimile: (949) 706-6469 E-mail: sferrell@pacifictrialattorneys.com KIA: Faces Class Action Over Defective Rod Bearings --------------------------------------------------- David A. Wood, writing for CarComplaints.com, reports that a Kia connecting rod bearings lawsuit has been filed that alleges three models of vehicles have defects that restrict the flow of oil through the connecting rod bearings and to other areas of the engines. The engines can allegedly fail at any time while driving any speed, leaving owners in dangerous driving conditions once the engines stall. According to the plaintiffs, damage to the connecting rod bearings causes metal shavings to appear in the oil. Included in the proposed class-action lawsuit are the 2015-2016 Kia Optima, 2015-2016 Kia Sportage and 2015-2016 Kia Sorento equipped with Theta 2-liter and 2.4-liter gasoline direct injection engines. Plaintiff Chris Stanczak leased and eventually bought a 2015 Kia Optima LX. In August 2016, Mr. Stanczak heard an unusual engine noise when accelerating, so he took the Kia to a dealer that same day. Eight days later the dealer said there were metal shavings inside the engine and the engine would need to be replaced. The plaintiff asked for the repairs to be made under warranty, but the request was denied. The plaintiff took the car home to get a second opinion about the engine, but on the following day the Optima's engine seized and failed while traveling about 35 miles per hour. Mr. Stanczak paid $180 to have his vehicle towed back to the Kia dealer where it remained from August 31, 2016, until October 3, 2016. The plaintiff says he was initially told the long block needed to be replaced, but the necessary parts were on backorder. Mr. Stanczak then contacted Kia's corporate offices and requested that Kia cover the repairs under its warranties, but Kia declined. The plaintiff claims he also requested rental car coverage since he was without his vehicle, which Kia also declined. The automaker also said the long block for his vehicle was no longer in production and they needed to order a used long block. Mr. Stanczak was allegedly told it would cost about $3,200 for the used engine, so he asked where Kia was ordering the engine from so he could check the price. Mr. Stanczak says he found the price for the engine was actually $2,210 and that the dealership was attempting to charge him a $1,000 "finder's fee" on the engine. According to the lawsuit, the plaintiff purchased the engine himself from Kia's source and had it shipped to the dealership, then had to pay another $1,980.00 for labor to install the used engine in his vehicle. Other owners report paying more than $5,000 to replace engines in the affected Kia vehicles, not counting the expense of rental cars while waiting for repairs. The plaintiffs claim that not only did Kia conceal the engines were defective and prone to failure, the owners also have vehicles worth much less than they should be. According to the lawsuit, owners and lessees have told the automaker and dealers about the engine problems, but Kia still refuses to fix the vehicles even when they are under warranty. The Kia connecting rod bearings lawsuit was filed in the U.S. District Court for the Central District of California - Christopher Stanczak and Rose Creps, et. al, v. Kia Motors America Inc., et al. The plaintiffs are represented by McCune Wright Arevalo LLP. The Theta II engine has previously been the focus of a class- action lawsuit except it was the Theta II engine installed in Hyundai Sonata cars. The lead plaintiff sued after claiming a dealer wanted to charge $4,500 to replace the engine. The Sonata lawsuit alleges the Theta II 2.4-liter engine can seize after the connecting rods start to fail, sending metal debris traveling throughout the engine and contaminating the oil. CarComplaints.com has complaints about the Kia vehicles named in the lawsuit. Kia Optima - 2015 / 2016 Kia Sportage - 2015 / 2016 Kia Sorento - 2015 / 2016 [GN] KOHL'S CORP: Illinois Judge Trims Claims in ADA Class Action ------------------------------------------------------------ Hannah Meisel, writing for Law360, reports that a onetime class action suit against retailer Kohl's was trimmed further on Aug. 11, as an Illinois federal judge severed the claims of the once-certified class that claimed Kohl's stores' layouts violated the Americans with Disabilities Act. U.S. District Judge Ronald Guzman decertified the class of shoppers in May, and on Aug. 11 severed the claims of the remaining named plaintiffs in the suit, saying the claims were too disparate. "As an initial matter, now that class certification has been denied, it is not clear that joinder of the plaintiffs is proper . . . given that their claims do not arise out of the same transaction, occurrence or series of transactions or occurrences," Judge Guzman wrote in his five-page order. The suit was originally brought in 2014 when Washington, D.C.- based advocacy group The Equal Rights Center filed a complaint on behalf of Kohl's customers with disabilities who claimed the standardized layouts of Kohl's stores were not ADA-compliant. The complaint cited alleged issues with the width of aisles, the height of check-out counters and inaccessible restrooms, fitting rooms and outside parking spaces. The ERC had investigated Kohl's stores in 13 states before filing the suit in October of 2014 and alleged that its survey revealed the many issues with Kohl's stores in the company's compliance with the ADA. But Judge Guzman in May decertified the class, pointing out that the plaintiffs had identified only 12 individuals who reported difficulty in accessing merchandise in 17 of the 1,149 Kohl's locations in the United States. Judge Guzman split the complaint among the six named plaintiffs in the case, leaving only the case of the first named plaintiff on his docket. Judge Guzman also said splitting the case like this is for the best, noting the lack of progress made at the negotiating table in settlement talks. "As an initial matter, the court does not have high hopes that these parties can agree to anything," Judge Guzman wrote. "The case is nearly three years old, and the parties have been attempting settlement, both on their own and with the assistance of the magistrate judge, for months, if not years. While apparently relatively close to settlement at times, the parties have been unable to seal the deal. Therefore, the court does not perceive that waiting for a potential resolution to the non-aisle width claims to be a worthwhile endeavor at this point in time." Attorney for lead plaintiff Devora Fisher, Andres Gallegos -- AGallegos@rsplaw.com -- of Robbins Salomon & Patt Ltd., told Law360 on Aug. 14 that Judge Guzman's severance of the case was what the plaintiffs wanted. "We requested that the judge sever the cases as while all plaintiffs have a material common allegation of accessibility barriers in Kohl's stores in the form of narrowly spacing of interior merchandise aisles that preclude persons using wheelchairs or scooters to navigate through those aisles, each of the plaintiffs complain of other accessibility barriers that were not encountered by other plaintiffs at Kohl's stores, like the absence of accessible parking, inaccessible restrooms, inaccessible changing rooms, etc," Gallegos said in an email. "We look forward to prosecuting our clients' claims and seeking justice for Kohl's violation of their civil rights." Representatives for Kohl's could not be reached for comment on Aug. 24. ERC and the named plaintiffs are represented by Jennifer M. Sender -- JSender@rsplaw.com -- Tracy E. Stevenson and Andres J. Gallegos of Robbins Salomon & Patt Ltd. and Deepa Goraya and Matthew Handley from the Washington Lawyers Committee for Civil Rights and Urban Affairs. Kohl's is represented by Joel Griswold -- jcgriswold@bakerlaw.com -- John Conlaeth McIlwee, Bonnie Keane DelGobbo -- bdelgobbo@bakerlaw.com -- and Brian C Blair -- bblair@bakerlaw.com -- of BakerHostetler. The case is The Equal Rights Center et al. v. Kohl's Corp. et al., Case No. 1:14-cv-08259 (N.D. Ill.). The case was filed October 21, 2014. [GN] LEONARD ROOFING: Sued Over Failure to Properly Pay Employees ------------------------------------------------------------ Christian Alanis, as an individual and on behalf of all others similarly situated v. Leonard Roofing Inc. and Does 1 through 100, Case No. BC672028 (Cal. Super. Ct., August 10, 2017), is brought against the Defendants for failure to pay overtime wages for all overtime hours worked, failure to provide meal periods, failure to provide paid rest periods, and failure to timely furnish accurate itemized wage statements. Leonard Roofing Inc. is a roofing contractor in Temecula, California. [BN] The Plaintiff is represented by: Paul K. Haines, Esq. Fletcher W. Schmidt, Esq. Andrew J. Rowbotham, Esq. Stephanie A. Kierig, Esq. HAINES LAW GROUP, APC 2274 East Maple Avenue El Segundo, CA 90245 Telephone: (424) 292-2350 Facsimile: (424) 292-2355 E-mail: phaines@haineslawgroup.com fschmidt@haineslawgroup.com arowbotham@haineslawgroup.com skierig@haineslawgroup.com LOUISIANA: Faces Class Action Over Inadequate Indigent Defense -------------------------------------------------------------- Lee Cowan, writing for CBS NEWS, reports that does our criminal justice system truly guarantee JUSTICE FOR ALL? Not if you don't have the money to hire your own top-notch attorney, it doesn't. You're about to hear some pretty strong words from this law professor . . . so strong they're almost hard to believe: "When we pledge allegiance to the flag and we say 'liberty and justice for all,' that's just not true. I'm sorry," said Stephen Bright. "So is the notion of equal justice under the law really just a myth?" asked Ms. Cowan. "Oh, I think it is, yes. Unless something changes, we're going to have to someday sandblast 'equal justice under law' off the Supreme Court building, because for the 80% of people who are poor, we don't have anything that comes anywhere close to being equal justice under law." Bright currently teaches law at Yale University, but spent much of his career at the Southern Center for Human Rights, fighting to help those charged with a crime but who can't afford an attorney to defend them in court. People like Shanna Shackelford, who says her life was ruined after her home outside Atlanta caught fire in 2009. She wasn't home at the time, but a small insurance policy she had taken out on the rental house made investigators suspicious. "I thought it was just a misunderstanding, like, they're going to figure this out, and it's going to be okay," she told Ms. Cowan. After a fire in her home led to an arson charge, Shanna Shackelford had to rely on a public defender to represent her case. He recommended she accept 25 years behind bars. CBS NEWS But it wasn't. Ms. Shackelford found herself under arrest, charged with arson. "My grandma was like, 'You might need to get an attorney and talk to somebody,'" Shackelford said. But she didn't have money for an attorney. So she applied for a public defender -- a court-appointed lawyer tasked with making sure the 6th Amendment is upheld. (That's the part of our Constitution that guarantees any of us the "assistance of counsel.") It's a right that's been tested in court, most notably in a case brought in the '60s by a petty thief in Florida named Clarence Gideon. Unable to afford an attorney, Gideon was convicted and sentenced without one. He appealed, arguing his right to an attorney had been violated, and the U.S. Supreme Court agreed. But while the Constitution may promise everyone legal counsel, it says nothing about the quality of that legal counsel, a deficit Shackelford felt right away. She told Cowan it took about two for her to hear from her public defender: "His response was, 'I have a bunch of cases like yours, so I'll get to it when I get to it.'" When he finally did "get to it," instead of going over the details of her case, Ms. Schackelford says he simply told her to plead guilty, and take 25 years behind bars. "He said, 'If you didn't do it, who did?' And I said, 'I don't know, but I didn't burn it down.' He was like, 'Well, I mean, looks like you did.' He knew nothing about my case when he was talking to me. He was mixing me up with some other case -- like, he had no idea what was going on." Ms. Shackelford's case is not unusual. Nearly every case, roughly 90% in fact, often end in a guilty plea, largely because even if a poor defendant is innocent, most can't afford bail or to wait in jail for trial, which means losing their jobs, their cars, maybe even their homes in the process. "Being arrested and spending four or five days in jail can be enough to ruin a person's life, even if they're ultimately found not to be guilty of anything," said Stephen Bright. Take the city of Cordele, Georgia, for example, where at one hearing defendants all plead guilty as a group, with no evidence presented. Bright calls it the "Meet 'em and plead 'em" defense. "You'll see a crowded courtroom and there will be a lawyer there with his legal pad, and he'll be, 'Ms. Smith? Is Ms. Smith . . .? Raise your hand,'" said Mr. Bright. "They're trying to identify their own clients! They're getting ready to go before a judge in just a moment." Ms. Cowan saw the same thing happen in a Miami courtroom, where one Public Defender had to handle a crowd of clients all at once. "I don't care who the person is, I don't care how dedicated they are; you cannot represent 500 criminal clients at the same time and give those clients the representation that they're entitled to," said Bright. Nowhere is the problem of indigent defense more acute than in Louisiana, which has the highest incarceration rate not only in the country, but in the world. Rhonda Covington is the sole public defender responsible for representing anyone too poor to afford a lawyer in her judicial district. That district encompasses about a thousand square miles. She says she has to defend five to six hundred people every year. The professional standard, according to the American Bar Association, is about 150 felony cases a year . . . and some think even that's too much. Ms. Covington has two paralegals and two contract attorneys who help with the load, but they're only part time. It's mostly just her and her two cats (named Liberty and Justice). She even cleans the office herself. "Some people say, 'Well, any defense will do,'" Ms. Covington said. "And some people think, 'Well, you know, they shouldn't have representation because they've been arrested.' My job is not to get people off when they've committed crimes. That's not what I do. What I do is to ensure that their Constitutional rights are protected." The bulk of the state funding for Louisiana's Public Defender offices comes from an unpredictable source: its traffic tickets, which out on these country roads isn't exactly a windfall. According to Covington, the District Attorney's office budget is five to six times hers. "And out of that budget comes assistants, and investigators, and access to pay for things like DNA testing?" asked Cowan. "Exactly. I've gone to crime scenes before with my own camera taking photographs. Each year, it's always something a little less, a little less, a little less." Doing more with less is why she thinks she lost the case for one of her clients, 56-year-old James Waltman. She told him, "I've decided to go ahead and file a second motion for a new trial, citing the reason being that we had insufficient funds in order to investigate your case." Mr. Waltman admitted he assaulted his wife during an argument, but the state also charged him with kidnapping and rape -- sentence- heavy crimes he insists he never committed. Rhonda believes with some investigation she could have at least lessened the charges. But she didn't have the time or the money. "I couldn't shut down my whole office for that one case," she explained. "Being innocent I had all the confidence in the world, that I'd walk out," Mr. Waltman said, getting emotional. "But it didn't happen." All across Louisiana, public defenders in 33 of the state's 44 judicial districts now admit they're in the same boat Rhonda Covington is in; they're simply too busy to ethically handle their caseloads. "If you ain't' got a paid lawyer, you're going to go through this," said Joseph Allen. He was arrested last year in Baton Rouge for a firearms violation, as well as a marijuana charge. The court didn't even know he was in jail, because his public defender didn't know he was in jail. Ms. Cowan asked, "Did you feel like anybody was on your side?" "Not really. No," he replied. "Nobody there to sort of help you through the legal maze, nobody to explain the charges?" "No, sir. I did all that up on my own, reading the law book." Now, Mr. Allen and 12 others are suing Louisiana's Governor and the Public Defender Board in a class action lawsuit brought by the Southern Poverty Law Center. "We're arguing that being appointed an attorney who doesn't know who you are, doesn't investigate your case, doesn't come to see you, doesn't take your calls, doesn't ask for a bond reduction, doesn't investigate the evidence, doesn't talk to any witnesses, and doesn't do anything else to move your case, file any motions that are particularized to you, you don't have an attorney; you have an attorney in name only," said Lisa Graybill, Southern Poverty Law Center's deputy legal director. "I don't believe in filing lawsuits unless you really have to, right?" she said. "If there were a way to avoid filing it, we would have, but this injustice has gone on really for too long. It's unacceptable." Back in Georgia, Shanna Shackelford spent years researching her case by herself. Her public defender was too busy with other cases, she says. In the process, she lost two jobs and her home. After all, who wants to hire or rent to a suspected arsonist? Had it not been for Stephen Bright -- the only person who would seriously look into her case -- Ms. Shackelford would probably be in jail. His investigation, which he did for free, proved that the fire was the result of faulty wiring, not arson. It took him just two weeks to get her case dismissed. "Two weeks," Shackelford said. "That's all it took. Someone to do a little research, and try." It still took Shackelford three more years to get the charge off her record. But now with the nightmare finally behind her, she has started anew. She's opening her own business, and focusing on being a mom to her two-year-old son, Ja'Ben. "You did get justice, but not the way it should have come," said Ms. Cowan. "Or at the price." "No," she said. "It was almost like having to give up my life, for my freedom. And that's what I had to choose in the end. I had to give up so many years in order to get the point of freedom." [GN] LUCAVA INC: Underpays Restaurant Staff, "Vidal" Suit Claims ----------------------------------------------------------- RUBEN ZAMORANO and VICTOR VIDAL, the Plaintiffs, v. LUCAVA, INC. d/b/a GIOVANNI'S BROOKLYN EATS and GIOVANNI TAFURI, as an individual, the Defendant, Case No. 516022/2017 (N.Y. Sup. Ct., Aug. 17, 2017), seeks compensatory damages and liquidated damages in an amount exceeding $100,000. Victor Vidal was employed by Defendants as a salad man, pasta maker, cook, while performing other miscellaneous tasks, at Giovanni's Brooklyn Eats, currently located at 1657 8th Avenue, Brooklyn, New York 11215. The worked approximately 57 hours or more per week during the period of his employment by Defendants, Defendants did not pay Plaintiff time and a half (1.5) of his regular hourly wage for hours worked over 40, a blatant violation of the overtime provisions contained in the New York Labor Law, the Complaint says. The Defendants willfully failed to post notices of the minimum wage and overtime wage requirements in a conspicuous place at the location of their employment as required by the NYLL. The Defendants willfully failed to keep payroll records as required by the NYLL. As a result of these violations of New York State labor laws. The Plaintiffs also seek interest, attorney's fees, costs, and all other legal and equitable remedies this Court deems appropriate.[BN] The Plaintiff is represented by: Roman Avshalumov, Esq. HELEN F. DALTON & ASSOCIATES, P.C. 69-12 Austin Street Forest Hills, NY 11375 Telephone: (718) 263 9591 MARAH FASHION: "Lobos" Suit Seeks Unpaid Wages under Labor Code --------------------------------------------------------------- SONIA LOBOS, as an individual and on behalf of all others similarly situated, the Plaintiff, v. MARAH FASHION, INC., a California Corporation; and DOES 1 through 100, the Defendants, Case No. BC672781 (Cal. Super. Ct., Aug. 17, 2017), seeks to recover unpaid wages and penalties under California Labor Code. According to the complaint, the Plaintiff worked overtime hours during her employment, but was not paid any overtime wages for such hours. Rather, Plaintiff was only paid per the piece-rate system and subsequently per the weekly "salary" beginning in approximately April 2016, even though she fit no recognized exemption from overtime requirements under the law. The Plaintiff scheduled work hours were 7:00 a.m. to 5:30 p.m. Monday through Friday, and 7:00 a.m. to 12:00 p.m. on Saturday. However, Plaintiff was required to arrive 10 minutes early, was never permitted to leave early, and at times would be required to stay until 5:50 or 6:00 p.m. Furthermore, Defendants often required Plaintiff to take work home with her to be completed prior to returning to work the following morning, which would sometimes take until 3:00 a.m. to complete. However, Defendants did not permit Plaintiff or other non-exempt employees to punch their own timecards, but rather, had another employee assigned to punch all non-exempt employees' timecards so that they reflected work hours of only 8:30 a.m. to 4:30 p.m. Monday through Friday, and paid no overtime compensation whatsoever. Marah Fashion is doing business in women's clothing stores industry.[BN] The Plaintiff is represented by: Paul K. Haines, Esq. Fletcher W. Schmidt, Esq. Andrew J. Rowbotham, Esq. Stephanie A. Kierig, Esq. HAINES LAW GROUP, APC 2274 East Maple Avenue El Segundo, CA 90245 Telephone: (424) 292 2350 Facsimile: (424) 292 2355 E-mail: phaines@haineslawgroup.com fschmidt@haineslawgroup.com arowbotham@haineslawgroup.com skierig@haineslawgroup.com MASTERCARD INC: Class Action Over Interchange Fees Revived ---------------------------------------------------------- Press Association reports that a proposed GBP14bn class action lawsuit against Mastercard is being revived after lawyers filed to appeal against a ruling that barred the case from heading to trial last month. Lawyers for former financial ombudsman Walter Merricks have made their application to the UK's Competition Appeal Tribunal just weeks after it refused to certify his claim. Mr. Merricks' claim was lodged on behalf of nearly 46 million consumers and alleged that Mastercard's interchange fees forced consumers to pay higher prices to businesses that accept the credit card over a 16-year period, therefore breaching EU competition law. The damages being sought were more than GBP14 billion. The tribunal ruled that the case could not proceed through a so- called collective action, saying that even if losses had been suffered and could be estimated across the whole class, there was no way of ensuring that an individual would receive an amount compensating for any loss suffered. Mr. Merricks says that the tribunal should have considered the "clear policy intent" behind the claim against Mastercard. "In essence this is a simple case. It has been conclusively established that Mastercard acted unlawfully and anti- competitively in imposing excessive credit and debit card fees," Merricks said. He added: "If I can establish the total amount of harm that Mastercard has caused to UK consumers, then why should consumers then get nothing at all if I cannot calculate the precise loss that each individual consumer suffered? "Rather than allow consumer recovery, this would reward unlawful conduct by allowing companies to keep their ill-gotten gains.' Mastercard has until 8 September to respond to the filing, after which point the tribunal could decide to hold a hearing on the appeal application before issuing its judgment. A spokesman for Mastercard, which said it welcomed the tribunal's ruling, said that an appeal against the CAT's decision would be "without merit". "Consumers across the UK and around the world derive real value from Mastercard's payments technology through the benefits of security, convenience and consumer protection. "We believe that any appeal or review by Walter Merricks is without merit and that the Competition Appeal Tribunal's judgment to refuse certification for the proposed collective action was the correct decision. "Mastercard maintains that this claim is completely unsuitable to be brought under the collective actions regime." [GN] MONSANTO INC: Class Action Over Roundup Product Labeling Okayed --------------------------------------------------------------- Sam Knef, writing for St. Louis Record, reports that plaintiffs in a proposed class action against Monsanto over alleged "overstatements" in the number of gallons that concentrated Roundup products make survived a defense motion to dismiss with the opportunity to amend their claims. U.S. District Judge Audrey Fleissig on Aug. 7 ruled that claims involving Roundup Concentrate Plus should be dismissed because plaintiff Joshua Rawa did not actually buy that product; rather he only purchased Roundup Super Concentrate. Mr. Rawa was given 14 days to add another plaintiff who did purchase Roundup Concentrate Plus. "The 'Makes Up to 23 Gallons' label on the front of Super Concentrate may well put a reasonable consumer on notice to check elsewhere on the container's labeling for mixing directions to obtain that yield," Judge Fleissig wrote. "And indeed, mixing directions were provided on the circular diagram on the front of the back booklet label. "But those directions, if followed, would result in much less than 23 gallons of weed killer. Significantly, the front of the booklet label did not direct a consumer to check the inside of the booklet label for other mixing options; nor did any part of the labeling on the front of the container. And the front of the back label did not qualify that the listed ratio was for the strongest solution, with more diluted options available." The case filed earlier this year alleges that label instructions that say the "up to" the amount displayed on the front of the container was deceptive because that statement was based on a mixing instruction "buried" inside the booklet label rather than on the front of the back booklet label. Plaintiffs say that "reasonable consumers" would not see it before buying because they would not feel they were permitted to open the booklet label before purchase. They claim the practice violates the Missouri Merchandise Practices Act (MMPA). The proposed class would include persons, other than Californians, who bought the Roundup products on or after April 5, 2012. "Plaintiff alleges that he and the other putative class members have suffered an ascertainable loss within the meaning of the MMPA, because the actual value of the Roundup Concentrate they purchased was less than the value of the product as represented," the suit claims. [GN] NATIONAL COLLEGIATE: Faces New Concussion Class Action ------------------------------------------------------ Darren Heitner, writing for Forbes, reports that a new lawsuit against the National Collegiate Athletic Association (NCAA) and the American Southwest Conference (ASC) has somewhat flown under the radar of many journalists. The suit, filed by plaintiff David Foreman in the U.S. District Court for the Southern District of Indiana, is in the form of a class action complaint that claims the defendants sacrificed player safety in favor of profits and self-promotion. It is essentially another concussion-related case, where Foreman says that the NCAA and ASC were negligent and failed to implement and enforce regulations that would properly protect student- athletes from the risks associated with concussions and/or manage those risks. "By the early-1990s at the latest, the NCAA was aware that the number of concussions was increasing and occurring over a broad range of sports (the ASC was aware of this threat when it was formed in 1994)," states the Complaint. "Despite this knowledge, the NCAA and its member conferences suppressed and kept secret from student-athletes, information about the extent of concussion injuries in NCAA college football and their long-term consequences." The lawsuit was filed on August 7 and there has not been a response filed as of yet. NBA Veteran Zach Randolph Dealing With A Weed Issue Thirty-six year old NBA veteran Zach Randolph found himself arrested with allegedly possessing two pound of weed in a large backpack. The arrest was for possession with intent to sell, which is considered a felony. The expectation is that the NBA and the Sacramento Kings, which employs Randolph, will hold off on taking any disciplinary action against him. If the NBA wants, it could likely suspend Randolph under Article 35 of the NBA Constitution which gives the Commissioner the power to suspend a player for any "conduct that does not conform to standards of morality or fair play, that does not comply at all times with all federal, state, and local laws, or that is prejudicial or detrimental to the NBA." NFL Gets Some Relief From Insurers In Concussion-Related Case The NFL has come to settlements with six out of the dozens of insurers that it is litigating against with regard to the massive concussion settlement that players had to register for by a deadline that passed earlier this month. There is strong incentive for the NFL to settle the claims in order to do whatever is necessary to avoid potentially devastating evidence from reaching the public eye, which could come out in a lawsuit's discovery process. There is also good reason for the insurers to come to the table with at least some money to cover a part of the enormous costs incurred by the NFL in order to continue solid relationships with the NFL, which undoubtedly pays large premiums for coverage. [GN] NEW ORLEANS, LA: Katrina Survivors Shocked with Settlement Checks ----------------------------------------------------------------- Grace White, writing for KHOU 11, reports that people who survived Hurricane Katrina feel like they're getting hit again 12 years later with settlement checks from a class action lawsuit. A mother who rebuilt her life in Houston, couldn't believe it when she got hers for only $52.82 dollars. The checks were mailed out July 31, 2017 and 125,000 people from New Orleans are receiving them. It's all part of a $20 million dollar settlement with local governing bodies, called levee boards. It may sound like a big number, but Veronica Bowman says her cut was shocking. It's an answer the mom has waited years for. "I was like, are you serious?" said Ms. Bowman, an evacuee. The check from Hurricane Katrina read more like a slap in the face. "I didn't know what to think, I thought it was a joke," said Ms. Bowman. Memories of boarding a bus 12 years ago with her sons ages 5,6 and 7 still brings tears to her eyes. "My son asked me, 'Momma, where are we going?' and I said, 'Well, I don't know, because they didn't tell us yet . . . '" said Ms. Bowman. She and her family ended up in Houston. "I love Houston, I didn't ask to come down here but I had to, I had no choice," she said. However, this mom did have a choice to make the most of it. She raised three sons, one was even featured as KHOU's "Athlete of the Week." Her son, Rakeem Boyd was a stand out on the field for Stratford High and went on to play college ball. "Every since we came here, for Katrina, they've been playing sports," said Bowman. Eventually, the home-healthcare provider and Uber driver joined a class action lawsuit, she thought it would help her family get back on their feet. "You tell us not to call, not to appeal, so who do we talk to?" she asked. However, a $52 dollar outcome is a far cry from peace. "It's not about the color, it's about us, we deserve respect, we deserve much more respect out here," said Ms. Bowman. The New Orleans attorney, Joseph M. Bruno, who handled the lawsuit told KHOU 11 each claim was paid out based on an impact survey each person filled out. Most people did receive settlements between $50 to $150 dollars. A few people did receive compensation in the thousands. [GN] ONE TECHNOLOGIES: Fifth Circuit Appeal Filed in "Forby" Suit ------------------------------------------------------------ Plaintiff Vickie Forby filed an appeal from a court ruling in the lawsuit titled Vickie Forby v. One Technologies, L.P., et al., Case No. 3:16-CV-856, in the U.S. District Court for the Northern District of Texas, Dallas. As previously reported in the Class Action Reporter, the District Court granted the Defendants' motion to compel arbitration and dismiss the case. Plaintiff Vickie Forby filed a class action complaint in Illinois state court against One Technologies, LP; One Technologies Management LLC; and One Technologies Capital LLP alleging claims for violations of the Illinois Consumer Fraud Act and unjust enrichment. The Plaintiff contends that the Defendants' Web site leads consumers to believe they are signing up for a free credit report. The appellate case is captioned as Vickie Forby v. One Technologies, L.P., et al., Case No. 17-10883, in the U.S. Court of Appeals for the Fifth Circuit.[BN] Plaintiff-Appellant VICKIE FORBY, individually and on behalf of all others similarly situated in Illinois, is represented by: Edwin J. Kilpela, Esq. CARLSON LYNCH SWEET & KILPELA, L.L.P. 1133 Penn Avenue Pittsburgh, PA 15212 Telephone: (412) 322-9243 Facsimile: (412) 231-0246 E-mail: ekilpela@carlsonlynch.com Defendants-Appellees ONE TECHNOLOGIES, L.P.; ONE TECHNOLOGIES MANAGEMENT, L.L.C.; and ONE TECHNOLOGIES CAPITAL, L.L.P., are represented by: Jonathan Ryan Childers, Esq. LYNN PINKER COX & HURST, L.L.P. 2100 Ross Avenue Dallas, TX 75201 Telephone: (214) 981-3800 E-mail: jchilders@lynnllp.com - and - Andrew Patrick LeGrand, Esq. GIBSON, DUNN & CRUTCHER, L.L.P. 2100 McKinney Avenue Dallas, TX 75201-6912 Telephone: (214) 698-3405 E-mail: alegrand@gibsondunn.com PALM BEACH, FL: Files Summary Judgment Motion in Utilities Case --------------------------------------------------------------- William Kelly, writing for Palm Beach Daily News, reports that the town is asking a judge to rule in its favor without a trial in its legal battle with two residents over the payment plan for the utilities undergrounding project. The town filed the motion for a summary judgment on Aug. 8 in Palm Beach County Circuit Court against Carol Kosberg and Michael Scharf, whose lawsuit challenges special assessments on property owners. More on the Palm Beach utilities undergrounding project "Hopefully, we will have a quick resolution of that matter," Town Manager Tom Bradford told the Town Council on Aug. 9. A hearing date has not been set. Meanwhile, the council approved $175,000 to pay for legal counsel, consulting and experts to fight the Kosberg/Scharf suit and another class action suit filed Aug. 1 by PBT Real Estate LLC, based at the Palm Beach Towers condominium building. That suit, also filed in Palm Beach Circuit Court, alleges the owners of the 273 units at the Towers building at 44 Cocoanut Row should not be assessed because the building already has underground utilities. The Towers' condo association has disavowed any connection with the suit. Town Attorney John Randolph said the town plans to file a motion in the PBT Real Estate suit similar to the one filed in the Kosberg/Scharf case. Ms. Kosberg, a South End condominium owner, and Mr. Scharf, a North End resident and former zoning commissioner, sued the town July 28, alleging the special assessments are invalid because the town relied on a consultant's "arbitrary assessment methodology." The consultant's report "hypothesized" special benefits of safety, reliability and aesthetics based on a property's size, density, location and other factors, they contend in the suit. The residents want a judge to certify the case as a class action, declare the special assessments void, and permanently block the town from imposing special assessments. In its motion, the town noted that a judge recently ruled in its favor in another legal case involving the utilities project. In that instance, South End resident Arthur Goldmacher asked a judge to void the result of a March 2016 referendum in which voters approved up to $90 million in bonds to finance the utilities project, secured by the special assessments. Mr. Goldmacher argued the town misled voters in the ballot language about how it intended to repay the bond debt. Palm Beach Circuit Judge Cymonie Rowe disagreed, granting the town's motion for a judgment without a trial. "In essence, Kosberg and Scharf are simply unwilling to accept the results of the vote and the effect of this court's ruling determining the validity of the bonds and allowing the town to proceed to issue bonds . . ." the town's motion states. The town also notes that the court has "validated bonds, secured by special assessments based on similar categories of benefits and methodology, for the Town of Gulf Stream and Jupiter Inlet Colony." Mr. Goldmacher has appealed the judge's ruling to the 4th District Court of Appeals in West Palm Beach. Ms. Kosberg has dropped an earlier lawsuit she filed against the town, also challenging the referendum. To date, the town has spent $168,000 battling the original Kosberg suit and the Goldmacher suit. The legal costs are not part of the underground utilities budget and are not paid with the special assessment revenue. Instead, they are paid by the taxpayers of the town, Town Council President Richard Kleid said. [GN] PRUDENTIAL RETIREMENT: Class Action Status Denied in ERISA Case --------------------------------------------------------------- John Manganaro, writing for PlanAdviser, reports that a federal district court judge has denied class action status to an ERISA challenge filed by a retirement plan participant invested in a stable value product offered by Prudential. The suit, filed against Prudential Retirement Insurance and Annuity Company in the U.S. District Court for the District of Connecticut, alleged that the firm improperly assessed and failed to disclose compensation derived from clients' investment in a stable value fund. As laid out in the initial complaint, the plaintiffs alleged that Prudential sets the crediting rate for certain stable value funds "well below its internal rate of return on the invested capital it holds through the SVAs. Thus, the company guarantees a substantial profit for itself . . . It does not disclose to its retirement plan clients and their respective participants the difference between its internal rate of return and the crediting rate. Thus, the company collects tens of millions of dollars annually in undisclosed compensation from the retirement plans and participants to whom it owes the highest duties known to the law, in violation of the Employee Retirement Income Security Act (ERISA) and statutory disclosure obligations." Among other allegations, plaintiffs also charged that Pruential "does not provide reasonable notice of a change in the crediting rate. Accordingly, a plan cannot reasonably terminate [the stable value investment contract] if defendant imposes an unfavorable crediting rate. Further . . . defendant imposes substantial penalties on the plans should the plans attempt to terminate the [contract] because of an unfavorable rate. Thus, plan fiduciaries are effectively precluded from making determinations concerning the reasonableness of the crediting rate, and from replacing the [contract] with another stable value fund when a crediting rate imposed by defendant is unreasonable." In seeking class certification and determining the proposed scope of the class, the suit cites Rule 23 of the Federal Rules of Civil Procedure. The plaintiff's conclusion is bold and the suit seeks to include "all ERISA covered employee pension benefit plans whose plan assets were invested in Prudential Retirement Insurance and Annuity Company's Group Annuity Contract Stable Value Funds within the six years prior to, on or after December 3, 2015." Turning to the decision recently issued by the Connecticut district court, it seems Prudential has successfully convinced the court that certain assertions in the challenge are faulty, leading to the result that class certification is in appropriate. In particular, the court notes, "while the plaintiff has offered evidence that 'most pools' used the same crediting rate, defendants counter that plans invested in [the relevant products called out by the suit] benefit from a 'wide range' of crediting rates, and that [the products] provide distinct rate changes to at least 20% of the rate pools." Strictly speaking, Prudential did not challenge the "numerosity prerequisite" set forth in Rule 23(a), and the court "therefore considered only whether the plaintiff's proposed class satisfies requirements for commonality, typicality, and adequacy of representation." [GN] PURDUE PHARMA: Southington May Join Opioid Addiction Suit --------------------------------------------------------- Mike Savino, writing for Record-Journal, reports that Southington is considering joining other towns in filing a lawsuit against some pharmaceutical companies over soaring rates of opioid addiction. "I'm very excited," Southington Town Council Chairman Michael Riccio said on Aug. 14 about possibly joining the lawsuit, which Waterbury Mayor Neil O'Leary is attempting to organize. "It's about time the drug companies start paying for the mess that they have created." Mr. Riccio said he wasn't sure how far talks have progressed, but he expects the matter to come up for discussion by the rest of the council in the near future. Town Manager Garry Brumback couldn't be reached for comment. The Journal Inquirer reported over the weekend that Southington is one of 10 towns considering joining Waterbury. Mr. O'Leary notified towns in a June memo, circulated by the Connecticut Conference of Municipalities, that the firm Simmons, Hanly, and Conroy would be willing to represent a collection of municipalities for free. The firm also represents municipal or county governments from New York, Illinois, Louisiana, and Texas in similar lawsuits. Meriden City Manager Guy Scaife said he thinks states, not municipalities or counties, should take the lead on filing class action lawsuits, though. "If there's a legitimate concern, it's not unique to Connecticut," Mr. Scaife said, adding he hasn't had discussions with other city officials about it yet. Similarly, Cheshire Town Manager Michael Milone said he hasn't given much consideration to joining any potential legal action. "At this point, we have no intention because we didn't know they were going to pursue it," he said. Mr. Milone added he would need to get more information before approaching the town council about its desire. The possibility of legal action comes as municipalities say the opioid epidemic is putting an increasing strain on already tight budgets. David Lowell, chief operating officer for Hunter's Ambulance Services in Meriden, said paramedics responded to roughly 40 calls for opioid-related overdoses in just the first three months, with six resulting in deaths. Lowell, also on the city council, said that's double the number of deaths from the same time period in 2016, when Connecticut saw overdose related deaths sore to 917. In 2012, the state saw just 357 overdose deaths. Fentanyl, a synthetic opioid, is the largest cause in the spike in deaths, with 479 incidents of someone having traces in their systems. Heroin remains the most common, with 504 people found with traces, but there can be overlap in cases of the two drugs being combined. Lowell, who participated in a podcast on the topic, tracks the locations, and said most people would be surprised to see overdose calls coming from all over the city. "No one's immune to it," he said. "It's in public spaces, it's in homes across our community." Public health officials have blamed opioid painkillers for the spike in addiction, saying an over reliance on pills has caused more people across the country to become addicted. When patients are unable to get refills on their prescriptions, though, they often turn to drugs like heroin or fentanyl, which has caused prices for opioid drugs to plummet because it is so cheaply produced. It's also far more potent than heroin, though, resulting in the spike in overdoses. Should municipalities decide to file a class action lawsuit, it would follow the rationale behind the complaint filed by more than 40 states in the mid-1990s. That lawsuit resulted in tobacco companies repaying states for nearly $250 billion in medical costs. Mr. Scaife said that lawsuit demonstrates that states, not municipalities, would be better positioned to take similar action again. Attorney General George Jepsen announced in June that Connecticut was participating in a multi-state investigation into whether pharmaceutical companies engaged in unlawful practices in the marketing or sale of prescription painkillers. Jaclyn Severance, a spokeswoman for Jepsen, said Aug. 14 that the investigation is ongoing. [GN] RECKITT BENCKISER: Falsely Marketed Air Wick(R) Sprays, Suit Says ----------------------------------------------------------------- Brigitte Akwei, Donna Sims and Joe Drew, individually and on behalf of all others similarly situated v. Reckitt Benckiser LLC, Case No. 1:17-cv-06080 (S.D.N.Y., August 11, 2017), arises out of the Defendant's false, deceptive and misleading marketing campaign that actively promotes the capabilities of Air Wick(R) aerosol sprays, claiming on the front labels that this product "eliminates odors", when in fact aerosol sprays cannot eliminate odors. Instead, the Air Wick(R) aerosol sprays merely mask odors. Reckitt Benckiser LLC is a global manufacturer of household cleaning supplies and other consumer chemicals. [BN] The Plaintiff is represented by: C.K. Lee, Esq. Anne Seelig, Esq. LEE LITIGATION GROUP, PLLC 30 East 39th Street, Second Floor New York, NY 10016 Telephone: (212) 465-1188 Facsimile: (212) 465-1181 RESORT MARKETING: Settles Class Action Over Telemarketing Calls --------------------------------------------------------------- 7 News WHDH reports that if you are one of the many people who received a robo phone call offering up a free cruise, you may be able to get $900 out of it. According to a class-action lawsuit, Resort Marketing Group made "pre-recorded telemarketing calls to landlines and cell phones offering free cruises with Carnival, Royal Caribbean, and Norwegian as promotions." The lawsuit alleges that these calls violated the Telephone Consumer Protection Act. The website for the lawsuit states that the defendants have denied any wrong-doing, and have instead reached a settlement. As a result, many people who received one of the phone calls between July 2009 and March 2014 may be eligible for up to $300 in compensation. Also, if you received multiple calls, you could receive a maximum of $900. To find out if you were on the receiving end of these calls, visit the website at: https://www.rmgtcpasettlement.com/Landing.aspx and enter your phone number. To file a claim, visit: https://www.rmgtcpasettlement.com/Landing.aspx [GN] RICE ENERGY: Faces "Boerger" Class Suit Over Proposed EQT Merger ---------------------------------------------------------------- Kathryn Boerger, on behalf of herself and all others similarly situated v. Rice Energy, Inc., Robert F. Vagt, Daniel J. Rice, IV, Toby Z. Rice, Daniel J. Rice, III, James W. Christmas, John McCartney, and Kathryn J. Jackson, Case No. 1:17-cv-01127-UNA (D. Del., August 11, 2017), is brought on behalf of all public stockholders of Rice Energy, Inc. to enjoin the proposed acquisition of Rice by EQT Corporation for $27.04 per share. According to the complaint, Rice filed a Form S-4 Registration Statement with the U.S. Securities and Exchange Commission, in order to convince Rice's stockholders to vote in favor of the Proposed Transaction. However, the Registration Statement contains incomplete and materially misleading information regarding: (i) the process leading to the Proposed Transaction; (ii) the financial analyses conducted by the Company's financial advisor, Barclays Capital, Inc. ("Barclays"), in connection with the Proposed Transaction; and (iii) the projections relied upon by Barclays in performing its valuation analyses. For these reasons, the Plaintiff seeks to enjoin the Defendants from taking any steps to consummate the Proposed Transaction unless and until the material information discussed is disclosed to Rice stockholders before the vote on the Proposed Transaction or, in the event the Proposed Transaction is consummated, recover damages resulting from the Defendants' violations of the Exchange Act. Rice Energy, Inc. is an independent natural gas and oil company focused on the acquisition, exploration, and development of natural gas, oil, and natural gas liquids properties in the Appalachian Basin. [BN] The Plaintiff is represented by: Michael Van Gorder, Esq. FARUQI & FARUQI, LLP 20 Montchanin Road, Suite 145 Wilmington, DE 19807 Telephone: (302) 482-3182 E-mail: mvangorder@faruqilaw.com - and - Michael J. Palestina, Esq. Christopher Tillotson, Esq. KAHN SWICK & FOTI, LLC 206 Covington Street Madisonville, LA 70447 Telephone: (504) 455-1400 Facsimile: (504) 455-1498 E-mail: Michael.Palestina@ksfcounsel.com SALERNO CORP: "Vazquez" Suit Seeks to Recover Unpaid Wages ---------------------------------------------------------- Humberto Vazquez, on behalf of himself and other similarly situated employees v. Salerno Corp. d/b/a Gino's of Kissena Pizzeria and Restaurant, Alfredo Molinari, and Anthony Molinari, Case No. 1:17-cv-04710 (E.D.N.Y., August 10, 2017), seeks to recover unpaid minimum wages, unpaid overtime compensation, liquidated damages, prejudgment and post-judgment interest, and attorneys' fees and costs pursuant to the Fair Labor Standards Act. The Defendants own and operate a restaurant located at 65-01 Kissena Boulevard, Flushing, New York 11367. [BN] The Plaintiff is represented by: Justin Cilenti, Esq. Peter H. Cooper, Esq. CILENTI & COOPER, PLLC 708 Third Avenue - 6th Floor New York, NY 10017 Telephone: (212) 209-3933 Facsimile: (212) 209-7102 E-mail: info@jcpclaw.com SAN JUAN COUNTY, NM: Settles Immigration Class Action ----------------------------------------------------- Hannah Grover, writing for Farmington Daily Times, reports that new signs at the San Juan County Adult Detention Center inform inmates that they do not have to talk to Immigration and Customs Enforcement officials. The signs, which are in both Spanish and English, are one of the changes the county is making following a class action lawsuit, which was recently settled. In addition to the signs, the county has agreed not to proactively inform ICE prior to releasing an inmate, according to county attorney Doug Echols. The class action lawsuit was filed in 2014 by Somos Un Pueblo Unido, a Santa Fe-based immigration rights group, on behalf of immigrants who say their rights were violated by the San Juan County Adult Detention Center. Among these immigrants was one of the original plaintiffs, Susana Palacios-Valencia. Palacios- Valencia was awarded $25,000. Somos Un Pueblo Unido received $15,000. "These types of collaborations between our local government and ICE make our entire community less safe," said Susana Palacios- Valencia in a press release. "This settlement is proof of what is possible when we come together, organize to defend our rights under the constitution and fight back. We are not afraid to defend our families and community." More than 190 people who were held at the detention center for three years leading up to the lawsuit were eligible to receive $2,000. Mr. Echols said 27 of them came forward. Mr. Echols said the county paid a $50,000 deductible and the rest was paid by the county's insurance. The insurance paid about $300,000. He said the majority of the changes stipulated in the settlement were already made prior to the lawsuit being filed. A series of federal cases ruled that holding inmates for ICE detainers was unconstitutional. Following the recommendations of the New Mexico Association of Counties, San Juan County changed its policy. "It was easy to agree to not do something we were already not doing," Echols said about the settlement. [GN] SANDFORD OIL: "Arenas" Suit Transferred to East. District Texas --------------------------------------------------------------- The class action lawsuit filed on April 12, 2016, entitled Ashland Arenas, Jason Villareal, Cedric Camp and Joe Rojas, on behalf of themselves and all others similarly situated v. Sandford Oil Company, Inc., Sandford Oil South Texas, Inc., Western Transportation, Inc., Coastline Transportation, Inc. and R Blake Sandford, Case No. 2:16-cv-00119, was transferred on August 11, 2017, from District of Texas Southern to the U.S. District Court for the Eastern District of Texas (Sherman). The District Court Clerk assigned Case No. 4:17-cv-00562-ALM to the proceeding. The case is brought against the Defendants for failure to pay overtime wages in violation of the Fair Labor Standards Act. The Defendants are in the business of distributing distillate fuel in the southern United States. [BN] The Plaintiff is represented by: James M. Loren, Esq. George Z. Goldberg, Esq. Rachael Rustmann, Esq. LOREN LAW GROUP 3102 Maple Ave, Suite 450 Dallas, TX 75201 Telephone: (469) 412-4222 Facsimile: (954) 585-4886 E-mail: Jloren@goldbergloren.com rrustmann@goldbergloren.com ggoldberg@goldbergdohan.com The Defendant is represented by: Edward Mason Smith, Esq. CORNELL SMITH MIERL & BRUTOCAO, LLP 1607 West Avenue Austin, TX 78701 Telephone: (512) 328-1540 Facsimile: (512) 328-1541 E-mail: tsmith@cornellsmith.com - and - Kimberly Rives Miers, Esq. Earl M. Jones III, Esq. Jessica E Anderson, Esq. LITTLER MENDELSON, P.C. 2001 Ross Ave., Suite 1500, Lock Box 116 Dallas, TX 75201-2931 Telephone: (214) 880-8100 Facsimile: (214) 880-0181 E-mail: kmiers@littler.com ejones@littler.com jeanderson@littler.com SCE&G: Faces Class Action Over V.C. Summer Project -------------------------------------------------- FITS reports that the fallout from #NukeGate is headed to a South Carolina courtroom . . . the first of what we suspect will be multiple legal entanglements related to the abandonment of a multi-billion dollar nuclear power project in the Palmetto State. Two weeks ago, government-run energy provider Santee Cooper pulled the plug on the V.C. Summer project -- a pair of half-completed nuclear reactors under construction in Jenkinsville, S.C. The state-owned utility's decision to terminate the V.C. Summer project killed at least 5,000 jobs, threw the state's energy future into chaos and squandered billions of dollars in investment (including $2 billion coughed up by Palmetto State ratepayers). Now a lawsuit has been filed seeking to recoup this investment, although the party named in the suit isn't the government utility that killed the project -- it's a subsidiary of SCANA, the private sector utility that was partnering with Santee Cooper on the abandoned reactors. SCANA's subsidiary -- SCE&G -- was allowed to raise energy rates on consumers to fund the project thanks to the so-called "Base Load Review Act." This legislation -- which former governor Mark Sanford allowed to become law -- was supported by the vast majority of the state's legislators at the time. The lawsuit -- filed on behalf of plaintiff LeBrian Cleckley by former U.S. attorney Pete Strom -- alleges SCE&G was negligent in its management of the project and deliberately concealed information from its consumers. It seeks class action status, citing that SCE&G has more than 700,000 electricity customers and more than 350,000 natural gas customers in the Palmetto State. News of the lawsuit was reported exclusively by Meg Kinnard of The Associated Press. "SCE&G has taken over $1 billion of their customers money to 'invest' for corporate benefit," Mr. Strom said in filing the suit on Aug. 11. "The project has been mismanaged and the customers want their money back." Mr. Strom added that "customers didn't get to decide if they wanted to invest, SCE&G used their power with state government to force the working people of South Carolina to contribute to a project that should have been funded by them and not their customers." FITS agrees . . . completely. Of course as we've repeatedly stated, we believe the real onus for this debacle lies with Santee Cooper -- which sandbagged SCANA on this project right up to the very end. As we've pointed out, Santee Cooper's political appointees proposed hiking rates on consumers to play for the reactors just eight days before unexpectedly pulling the plug. That's textbook deception. "Santee Cooper pulled a bait and switch -- signaling its intention to move forward with the V.C. Summer project one week before pulling the plug the next," FITS wrote. Also, the ultimate culpability for rate increases paid by SCE&G consumers lies not with SCANA but with the South Carolina politicians who enabled the authority to "socialize" their investment risk, to borrow the wording of S.C. Senator Tom Davis. "We must we start taking broader steps to restore market forces in our energy sector and take as much power as possible out of the control of politicians and their special-interest supporters," Mr. Davis said. "Nothing less will suffice." FITS agrees . . . Whatever one thinks of this lawsuit's merits, it is past time to get government out of the power generation business. [GN] SEARS ROEBUCK: 7th Cir. Halves Attorneys' Fees in Washer Case ------------------------------------------------------------- Diana Novak Jones and Hannah Meisel, writing for Law360, report that the Seventh Circuit on Aug. 14 slashed in half a nearly $5 million fee award for six law firms who worked on a class action involving allegedly malfunctioning washing machines sold by Sears and Whirlpool, saying the award needed to be closer to the amount given to the class. Writing for a unanimous panel, Circuit Judge Richard Posner agreed with Sears, Roebuck & Co. and Whirlpool Corp. that the $4.8 million an Illinois federal magistrate judge awarded plaintiffs counsel has to be compared to the estimated $900,000 the class will recover. The firms' efforts over the nearly decade-long case are worth more than the class' award, the appellate panel said, but the billable hours they racked up are enough to reach an appropriate total. "They failed to prove that a reasonable fee would exceed $2.7 million -- the pre-multiplier figure sought by class counsel and already thrice the damages awarded the class," Judge Posner wrote of class counsel Carey Danis & Lowe, Chimicles & Tikellis LLP, Lieff Cabraser Heimann & Bernstein LLP, Quantum Legal LLC, Seeger Weiss LLP and Shepherd Finkelman Miller & Shah LLC. The opinion ends with instructions to the lower court to award the firms $2.7 million -- "no more, no less," Judge Posner wrote. Attorneys for the class did not respond to requests for comment on Aug. 14. The class action, which began with a series of separate suits in 2006, accused Sears and Whirlpool of selling defective Kenmore front-loading washing machines. The Sears machines stalled in the middle of a wash cycle, prevented the door from locking or unlocking or showed error codes on its control panel, while the Whirlpool ones grew mold, according to the complaints. After several years, and two previous trips to the Seventh Circuit and the U.S. Supreme Court, the parties settled in 2015. Class counsel asked for close to $6 million in fees, citing the length of the litigation and its appeals. In a lengthy opinion, Magistrate Judge Mary Rowland awarded the firms $4,770,834, or 1.75 times the firms' hourly total of $2,726,191, saying the novelty and complexity of the case combined with its benefit to the public and the class warranted the multiplier. Class members would receive about $275 on average, reimbursing them for nearly everything they spent repairing or replacing their washer, the judge said. Sears and Whirlpool appealed Judge Rowland's fee award in September. Judge Rowland's reasoning was "questionable," Judge Posner wrote, because the novelty and complexity of the case are already compensated for in the number of billable hours the firms worked. "Novelty and complexity influence the base fee -- the more novel and complex a case, the more hours will be billed and the higher the hourly billing rates will be," the judge wrote. But the magistrate judge decided the case was not overly complex, making her decision to use a multiplier to increase the attorneys fees puzzling, Judge Posner said. The appellate court also found it odd that the amount going to the class had yet to be finalized, but it decided to use the $900,000 the parties estimated the class would receive after the claims process ends as a guideline for the fee award's size. Normally, the Seventh Circuit would say the fee award should not exceed what the class is receiving, Judge Posner said. But the court rejected Sears' request that the fee award be cut below $900,000. "In this case, the extensive time and effort that class counsel had devoted to a difficult case against a powerful corporation entitled them to a fee in excess of the benefits to the class," Judge Posner said. Counsel for Sears, Michael Williams of Wheeler Trigg O'Donnell LLP, told Law360 the amount paid out to the class so far is around $475,000 and will likely be less than the $900,000 originally estimated. In a statement, Sears and Whirlpool lauded the reduction of what they called an "excessive and unreasonable" fee award. "We hope that the Seventh Circuit and other courts will continue their efforts to rein in abusive attorneys' fees in class actions and enforce the general rule that the fee should be less than the amount recovered by the plaintiff class members," the companies said. Sears and Whirlpool are represented by Timothy S. Bishop -- tbishop@mayerbrown.com -- Joshua D. Yount -- jdyount@mayerbrown.com -- and Logan A. Steiner -- lsteiner@mayerbrown.com -- of Mayer Brown LLP and Michael T. Williams and Allison R. McLaughlin of Wheeler Trigg O'Donnell LLP. The class is represented by James J. Rosemergy of Carey Danis & Lowe and Steven A. Schwartz -- SteveSchwartz@chimicles.com -- of Chimicles & Tikellis LLP. The case is In Re: Sears, Roebuck and Co. Front-Loading Washer Products Liability Litigation, Case No. 16-3554 (7th Cir.). The case was filed September 28, 2016. [GN] SECURUS TECHNOLOGIES: "Antoon" Suit Transferred to W.D. Arkansas ---------------------------------------------------------------- The class action lawsuit filed on August 3, 2017, captioned Patrick Antoon Jr., individually and on behalf of all others similarly situated v. Securus Technologies, Inc., Case No. 1:17- mc-91274, was transferred on August 11, 2017, from the District of Massachusetts to the U. S. District Court for the Western District of Arkansas. The District Court Clerk assigned Case No. 5:17-mc- 00097-TLB to the proceeding. Securus Technologies, Inc. provides civil and criminal justice technology solutions for public safety, investigation, correction, and monitoring in the United States. [BN] The Defendant is represented by: Arcangelo Silvio Cella MORGAN LEWIS & BOCKIUS LLP One Federal Street Boston, MA 02110 Telephone: (617) 951-8713 SHERIDAN ASSISTED: Does Not Properly Pay Workers, Suit Claims ------------------------------------------------------------- Adilia Y. Lemus, as an individual on behalf of herself, and all others similarly situated v. Sheridan Assisted Living, Inc. and Does 1 to 20, Case No. CAC-D-323-BERLE (Cal. Super. Ct., August 10, 2017), is brought against the Defendants for failure to pay state-mandated minimum and overtime wages for all overtime hours worked, failure to provide meal periods, failure to provide paid rest periods, and failure to timely furnish accurate itemized wage statements. Sheridan Assisted Living, Inc. is in the business of providing caregiver and personal attendant services. [BN] The Plaintiff is represented by: Sam Kim, Esq. Yoonis Han, Esq. VERUM LAW GROUP, APC 841 Apollo Street, Suite 340 El Segundo, CA 90245 Telephone: (424) 320-2000 Facsimile: (424)221-5010 E-mail: skim@verumlg.com SIERRA PETROLEUM: Faces "Burgan" Suit Over Failure to Pay OT ------------------------------------------------------------ Justin M. Burgan, individually and on behalf of all others similarly situated v. Sierra Petroleum Services, LLC d/b/a SPS Sierra Petroleum Services, LLC and Sierra Hamilton, LLC, Case No. 4:17-cv-02478 (S.D. Tex., August 11, 2017), is brought against the Defendants for failure to pay overtime compensation for work more than 40 hours a week. The Defendants operate an oilfield services company with locations and personnel throughout the United States. [BN] The Plaintiff is represented by: Michael A. Josephson, Esq. Andrew W. Dunlap, Esq. JOSEPHSON DUNLAP 11 Greenway Plaza, Suite 3050 Houston, TX 77046 Telephone: (713) 352-1100 Facsimile: (713) 352-3300 E-mail: mjosephson@mybackwages.com adunlap@mybackwages.com - and - Richard J. (Rex) Burch, Esq. BRUCKNER BURCH, P.L.L.C. 8 Greenway Plaza, Suite 1500 Houston, TX 77046 Telephone: (713) 877-8788 Facsimile: (713) 877-8065 E-mail: rburch@brucknerburch.com SPIROS ZORBALAS: Tenants' Class Action Can Proceed -------------------------------------------------- Randy Furst, writing for Star Tribune, reports that a rare class- action lawsuit against two Minneapolis landlords could cost them millions of dollars and benefit thousands of low-income tenants if they prevail. Hennepin County District Judge Mary Vasaly certified the class- action status on Aug. 11 in the case against Spiros Zorbalas, Stephen Frenz and the companies they own, including Apartment Shop and Equity Residential Holdings. "It could be the largest case in terms of damages and rent refunds in U.S. history," said Larry McDonough, a housing attorney with Dorsey & Whitney who crafted the state law that created the housing courts in Hennepin and Ramsey counties but who is not involved in the case "I could not find a single class action around the country that had this kind of price tag on it." The lawsuit, brought on behalf of the tenants, accuses Messrs. Zorbalas and Frenz of hatching a scheme to hide their joint ownership of properties from the city, in breach of city ordinances, and of creating a financial arrangement to benefit Mr. Frenz, if he could hold down the costs of repairs. Mr. Frenz is one of the city's largest landlords. Tenants have accused him of failing to fix properties that were in disrepair and burdened by pest and rodent infestations. Mr. McDonough, who called the case against Zorbalas and Frenz "historic," can recall only one other local class-action housing case. He filed that one in the late 1980s, and it resulted in a payout of a few thousand dollars. More than 1,000 units in about 60 buildings are covered by the new lawsuit, said Michael Cockson -- michael.cockson@FaegreBD.com -- of Faegre Baker Daniels, the lead attorney for the tenants. "We are seeking the return of the total amount of rent paid by the tenants, which could be in the tens of millions of dollars, but the final figure has not yet been confirmed," Mr. Cockson said. Bradley Kletscher, an attorney for Mr. Frenz, and Malcolm Terry, an attorney for Mr. Zorbalas, did not respond to requests for comment on Aug. 14. Troubled properties The Minneapolis City Council revoked Mr. Zorbalas' rental licenses in 2011 for repeated housing code violations and in 2012, Mr. Frenz bought all of his properties. According to the city, Mr. Frenz failed to disclose that Mr. Zorbalas continued to be an owner. Within the year, Mr. Frenz was being accused of operating the same substandard buildings that Mr. Zorbalas had operated. And in 2016, Mr. Frenz was sued by tenants for a pest and rodent infestation and lack of repairs at one apartment building. During the trial, Mr. Cockson and his team of pro bono attorneys discovered that Mr. Zorbalas still had a financial interest in Frenz's buildings. The city investigated, concurred and began a revocation action against Mr. Frenz. A September hearing is scheduled on a proposal by the city's regulatory division to strip Mr. Frenz of his rental licenses. If an administrative judge approves, the City Council must vote on it. On Aug. 11, Judge Vasaly issued a 35-page court order certifying the class-action suit. "All of the plaintiffs experienced repeated problems with their units, including broken windows, electrical outlets and inoperative stoves," she wrote. "Most also had problems with roach, bedbug and rodent infestation that required repeated treatment." The judge's ruling also spells out previously undisclosed allegations about the financial arrangements between Messrs. Zorbalas and Frenz intended to conceal their shared ownership of the properties. To that end, Mr. Vasaly wrote, the two men established additional companies that made it appear that Mr. Frenz owned them and that Mr. Zorbalas no longer had an interest. At Equity Residential, she wrote, Mr. Zorbalas, the chief executive officer, exercised control over Mr. Frenz, the chief operating officer. After March 2015, Mr. Frenz was entitled to a monthly cash distribution "but only if Equity Residential hit its 'Net Operating Income Target' for the preceding year," Judge Vasaly wrote. "According to plaintiffs, this provision incentivized Mr. Frenz to limit, as much as possible, maintenance expenses needed to comply with lead, asbestos, pest control, and other statutes and regulations," the judge wrote. Wider repercussions? In Minneapolis, where renters make up more than half the population, a class-action case could have repercussions, according to attorneys with expertise in housing law. While most landlords take care of their properties, the lawsuit sends a signal that saving money by putting off maintenance might not be worth the risk, McDonough said. Prof. Ann Juergens of the Mitchell Hamline School of Law and a longtime housing attorney, said the lawsuit has the potential "of drying up the sources of capital" for landlords who don't comply with housing regulations because lenders may be less inclined to invest in them. It is still unclear what will happen to Mr. Frenz's buildings and his tenants, should Mr. Frenz lose his licenses. [GN] SPRINT SPECTRUM: Emilio Appeals Opinion & Order to Second Circuit ----------------------------------------------------------------- Plaintiff Vincent Emilio filed an appeal from a District Court opinion and order dated July 27, 2017, entered in the lawsuit styled Emilio v. Sprint Spectrum L.P., Case No. 11-cv-3041, in the U.S. District Court for the Southern District of New York (New York City). As previously reported in the Class Action Reporter on August 8, 2017, the District Court issued an order denying the Defendant's motion for summary judgment and denying the Plaintiff's motion for class certification. In the operative amended class action complaint, Mr. Emilio alleges that Sprint violated the Kansas Unfair Trade and Consumer Protection Act primarily by misrepresenting a discretionary charge as a mandatory tax imposed on customers by New York state. He cites provisions of the KCPA that bar companies from misrepresenting or willfully omitting material facts from consumers or engaging in unconscionable acts. The appellate case is captioned as Emilio v. Sprint Spectrum L.P., Case No. 17-2454, in the United States Court of Appeals for the Second Circuit.[BN] Plaintiff-Petitioner Vincent Emilio, Individually and on behalf of all others similarly situated, is represented by: William Robert Weinstein, Esq. LAW OFFICES OF WILLIAM R. WEINSTEIN 199 Main Street White Plains, NY 10601 Telephone: (914) 997-2205 Facsimile: (646) 448-8215 E-mail: wrw@wweinsteinlaw.com Defendant-Respondent Sprint Spectrum L.P., DBA Sprint PCS, is represented by: Joseph Boyle, Esq. KELLEY DRYE & WARREN, LLP 1 Jefferson Road Parsippany, NJ 07054 Telephone: (973) 503-5900 E-mail: jboyle@kellydrye.com STATE FARM: "McKinnie" Suit Moved to Middle District of Tennessee ----------------------------------------------------------------- The class action lawsuit titled James McKinnie, Lonnie McKinnie, and Tina Roberts, Individually and on behalf of all others similarly situated, the Plaintiffs, v. State Farm Fire and Casualty Company, the Defendant, Case No. CC2823, was removed on Aug. 17, 2017 from the Circuit Court for White County, Tennessee, to the U.S. District Court for the Middle District of Tennessee (Cookeville). The District Court Clerk assigned Case No. 2:17-cv- 00048 to the proceeding. The case is assigned to the Hon. Chief Judge Waverly D. Crenshaw, Jr. State Farm Fire and Casualty Company was formed in 1935 to provide property insurance for State Farm customers in the United States.[BN] The Plaintiff is represented by: Clinton H. Scott, Esq. 101 North Highland Ave Jackson, TN 38301 Telephone: (731) 664 1340 Facsimile: (731) 664 1540 E-mail: cscott@gilbertfirm.com - and - J. Brandon McWherter, Esq. Gilbert Russell McWherter PLC 101 North Highland Ave Jackson, TN 38301 Telephone: (731) 664 1340 Facsimile: (731) 664 1540 E-mail: bmcwherter@gilbertfirm.com The Defendant is represented by: Bradford Telfeyan, Esq. Jason M. Pannu, Esq. LEWIS, THOMASON, KING, KRIEG & WALDROP, P.C. (NASHVILLE) 424 Church Street, Suite 2500 Nashville, TN 37219 Telephone: (615) 259 1366 Facsimile: (615) 259 1389 E-mail: btelfeyan@lewisthomason.com jpannu@lewisthomason.com - and - James P. Gaughan, Esq. Joseph Cancila, Jr., Esq. RILEY SAFER HOLMES & CANCILA LLP 70 W Madison St. No. 2900 Chicago, IL 60602 E-mail: jgaughan@rsch-law.com jcancila@rshc-law.com TAKATA CORP: Judge Temporarily Halts Lawsuits Over Air Bags ----------------------------------------------------------- Randall Chase, writing for The Associated Press, reports that a Delaware bankruptcy judge on Aug. 16 temporarily halted the prosecution of lawsuits filed by Hawaii, New Mexico and the U.S. Virgin Islands against Japanese auto-parts supplier Takata over its lethally defective air bag inflators. Judge Brendan Shannon ordered the 90-day stay after hearing arguments on Takata's request to halt hundreds of air bag-related lawsuits while it works on a reorganization plan. Takata sought a six-month halt to various lawsuits while it proceeds with its restructuring efforts, which include the planned sale of most of its assets to a Chinese-owned rival for $1.6 billion. Judge Shannon also granted Takata's request to temporarily halt individual lawsuits against automobile manufacturers who installed the faulty air bags but, again, only for 90 days. He refused, however, to extend that ruling to scores of lawsuits consolidated in a federal multi-district litigation case in Miami. While acknowledging and expressing sympathy for the circumstances facing many claimants, including those grievously injured and survivors of those who have been killed, Judge Shannon said Takata had met its burden of proving that a halt to litigation was warranted. The company was forced into bankruptcy in June amid personal injury and economic loss lawsuits, multimillion-dollar fines and crushing air bag recall costs. Takata's air bag inflators can explode with too much force, spewing shrapnel into drivers and passengers. At least 16 people have died and more than 180 have been injured due to the problem. The inflators have prompted the largest automotive recall in U.S. history, with more than 45 million being called back for repairs. "The debtors are engaged . . . in the largest recall in history while simultaneously trying to implement a reorganization strategy around the globe," Shannon noted. The judge also said that a failed reorganization could negatively affect the recall effort. Takata's bankruptcy is unique in that the automobile manufacturers play a critical role as both its largest customers and largest creditors. They also are indemnified in their agreements with Takata from losses and liabilities related to the air bag inflators, putting a further financial and legal burden on Takata. "What the debtors seek and need is a breathing spell," Judge Shannon said. While noting the actions taken by Hawaii, New Mexico and the U.S. Virgin Islands to protect their citizens and enforce their laws are "entirely appropriate," Judge Shannon also pointed out that all states are equally situated in this circumstance. "The fact is that there is nothing unique about the threat to the citizens of those two states and that territory," he said. "The state actions represent the proverbial race to the courthouse," Judge Shannon added. ". . . Any relief obtained by those entities in the state actions will necessarily be to the detriment of the citizens of other states." While partially granting Takata the relief it sought, the judge encouraged lawyers for the company to be receptive to any individual plaintiff who might face extraordinary or unique hardship because of the 90-day stay, which ends at midnight Nov. 15. "I do expect the debtors to be responsive where circumstances warrant," he said. TATA CONSULTANCY: Discrimination Class Action Pending ----------------------------------------------------- Bloomberg reports that Google isn't the only Silicon Valley employer being accused of hostility to white men. Yahoo! Inc. and Tata Consultancy Services Ltd. were already fighting discrimination lawsuits brought by white men before Google engineer James Damore ignited a firestorm -- and got himself fired -- with an internal memo criticizing the company's diversity efforts and claiming women are biologically less suited than men to be engineers. The Yahoo case began last year when two men sued, claiming they'd been unfairly fired after managers allegedly manipulated performance evaluations to favor women. They claim Marissa Mayer approved the review process and was involved in their terminations, and a judge ordered the former chief executive be deposed. TCS, meanwhile, is fighting three men who claim the Mumbai-based firm discriminates against non-Indians at its U.S. offices. A growing backlash against diversity advocates has gained momentum with the election of Donald Trump and his embrace of right-wing media figures including Steve Bannon, who ran Breitbart News until joining Trump's presidential campaign. Mr. Trump has ordered a review of affirmative action policies in higher education, proposed banning transgender people in the military and advocated curbing immigration of non-English speakers to the delight of conservatives who say they've been muzzled by liberals. While gender discrimination complaints aren't uncommon in the tech industry, they are usually made by women, who are outnumbered by nearly 3 to 1. Ellen Pao put Silicon Valley's "Bro Culture" front and center in 2015 during a trial pitting her against the venture capital firm Kleiner Perkins Caufield & Byers. She claimed there was a sexually charged atmosphere where men preyed on their female coworkers and that she'd been blocked from promotion and fired for her gender. She lost, but the trial rallied other women to speak out. That year Microsoft Corp. and Twitter Inc. were both sued on behalf of female engineers claiming men are favored for advancement. This year, Travis Kalanick was ousted as Uber Technologies Inc. CEO after allegations of rampant sexual harassment at the company. Mr. Damore's memo circulated widely internally, then became public over the weekend as some right-wing websites lionized him for speaking out. Over 10 pages, he complained that efforts at Google to boost diversity were themselves a form of discrimination that are "unfair, divisive, and bad for business." He filed a complaint with a federal labor board on Aug. 7 and says Google smeared his reputation by firing him. He told Bloomberg he planned to take further legal action, though he declined to say on what grounds. In the Yahoo case, Scott Ard, an editor for the company's auto, shopping and small business portals until January 2015, alleged that Mayer encouraged supervisors to evaluate employees using "subjective biases and personal opinions, to the detriment of Yahoo's male employees." Women eventually accounted for more than 80 percent of the top management positions in the media division, according to the suit. Yahoo denies wrongdoing and argued against Ms. Mayer's deposition, saying she had no special knowledge of the circumstances surrounding the firings of Mr. Ard and Gregory Anderson, another online news editor who said he was fired, along with hundreds of staffers, in 2014. A Yahoo spokeswoman defended the performance review process in February 2016 after Anderson filed his complaint, saying "fairness is a guiding principle." Mr. Anderson was slated for termination in April 2014 because he was on the "bad managers list," Yahoo said in a filing last month. The evaluation process ranked him in the bottom 5 percent. Ms. Mayer, who isn't a defendant, couldn't be reached for comment and it isn't clear from court filings whether she's already given her deposition. She was CEO from 2012 until June, when Verizon Communications Inc. completed its acquisition of Yahoo's internet assets. Verizon's Oath, the unit that includes Yahoo's assets, declined to comment on the Mayer deposition. The men's attorney didn't respond to requests for comment. The case against TCS was filed in 2015 by Steven Heldt, a white U.S.-born IT worker who accused the company of "grossly disproportionate" favoritism toward hiring people of South Asian descent. Mr. Heldt, who said he was terminated after about 20 months, claims he experienced "substantial anti-American sentiment" during his time there. TCS calls their claims unfounded, arguing the men haven't proven of a pattern of discrimination, in part because their statistical analysis doesn't properly account for foreign workers legally hired with U.S. work visas. In September, the men will ask a judge to allow potentially thousands of non-Indians who say they were either blocked from jobs or, if hired, benched and eventually fired, to be included in their suit. TCS says their case isn't suited to be a class action based on common allegations for all job seekers because it uses varied hiring methods -- some applicants go directly through the company while others are recruited by outside vendors. The cases are Ard v. Yahoo Inc., 16-cv-05635, and Anderson v. Yahoo Inc., 16-cv-00527, U.S. District Court, Northern District of California (San Jose).; and Heldt v. Tata Consultancy Services, 15-cv-01696, U.S. District Court, Northern District of California (Oakland). [GN] TEP ROCKY: Elna Sefcovic Suit Moved to District of Colorado ----------------------------------------------------------- The class action lawsuit titled Elna Sefcovic, LLC, a Colorado limited liability company; and Juhan, LP, a Colorado limited partnership, individually and on behalf of all others similarly situated, the Plaintiffs, v. TEP Rocky Mountain, LLC; TRDC LLC; and G2X Resources LLC, Case No. 2017-CV-32575, was removed on Aug. 17, 2017 from the District Court City and County of Denver, Colorado, to the U.S. District Court for the District of Colorado (Denver). The District Court Clerk assigned Case No. 1:17-cv- 01990-MEH to the proceeding. The case is assigned to the Hon. Magistrate Judge Michael E. Hegarty. TEP Rocky Mountain is a private exploration and production company that operates the piceance basin assets acquired by Terra Energy Partners.[BN] TEP Rocky Mountain, LLC is represented by: Christopher Anthony Chrisman, Esq. HOLLAND & HART, LLP-DENVER P.O. Box 8749, 555 17th Street, Suite 3200 Denver, CO 80201-8749 Telephone: (303) 295 8013 Facsimile: (303) 291 9123 E-mail: cachrisman@hollandhart.com TRINITY INDUSTRIES: Faces Class Action Over E-T-Plus Rails ---------------------------------------------------------- The Madison County Record reports that St. Clair County State's Attorney Brendan Kelly and special assistant David Cates, who claim a Texas firm must remove bad guardrails from roads statewide, expect local crews to distinguish good ones from bad ones. Their Aug. 11 motion to certify a class action against Trinity Industries at U.S. district court didn't begin to measure the size and cost of the project. They asserted only that St. Clair County and second plaintiff Macon County together have about 141 ET-Plus model rails requiring replacement. They would require similar counting not only in 100 other counties but also in 1,298 municipalities and 1,431 townships. All ET-Plus rails with a certain channel five inches wide would pass their test, but those with a channel four inches wide would require replacement. "It will merely require class members that cannot already distinguish between five inch and four inch feeder channels to simply count the number of four inch ET-Plus units in their jurisdiction," Mr. Cates wrote. He declared it no more burdensome than average for class members in other cases. He wrote that members of the proposed class have already responded to information requests, and that some members produced hundreds of documents, "which was certainly a much more burdensome and substantial individualized inquiry for proposed class members than simply counting their four inch ET-Plus units." He offered the fact that no other class member pursued a claim against Trinity as evidence in support of a class action. "Practically speaking, this is not surprising, as many if not all counties, cities, villages, incorporated towns, and township governments in the state of Illinois cannot afford to replace the guardrails, let alone undertake the cost associated with fighting a corporate giant with unlimited funds who has demonstrated it will use any and all means and funds necessary to fight this and other companion litigation across the United States," he wrote. He wrote that four simple steps would calculate the replacement cost. "Inventory the modified ET-Plus units for each member," he wrote. "Solicit a detailed replacement cost proposal from a qualified vendor. "Each member shall provide a detailed inventory of currently installed Type A guardrail with replacement cost per foot, that will need to be brought up to current height standards of 31 inches when the modified ET-Plus units are removed and replacement end terminals are installed. "Calculate the total value of the replacement cost." Messrs. Kelly and Cates sued Trinity in November 2014, claiming it sacrificed safety by narrowing the channel and concealing the change from regulators. A month earlier, jurors at U.S. district court in Marshall, Texas, had assessed $175 million in damages against Trinity on behalf of the United States. The verdict prompted the Illinois Department of Transportation to ban ET-Plus rails, and the ban remains in place. The verdict didn't alter the position of the U.S. Highway Safety Administration, which regards the ET-Plus as safe. It remains in suspense at the Fifth Circuit appellate court in New Orleans, where judges heard oral argument last December. U.S. District Judge David Herndon presides over the local case. He dismissed counts of deceptive trade practices and breach of implied warranty in January, while allowing St. Clair and Macon counties to allege unjust enrichment. Along with Mr. Cates as lead lawyer, Mr. Kelly has appointed Eric Holland, Seth Crompton, Christopher Ellis and Shane Mendenhall as special assistants. [GN] VANTIV INTEGRATED: Aug. 26 Class Action Settlement Hearing Set -------------------------------------------------------------- Mary Shinn, writing for Durango Herald, reports that Vantiv Integrated Payments could pay $52 million to settle a class-action lawsuit that claims the company charged customers unauthorized and marked-up fees. Businesses in Ohio, California and Tennessee claim that Mercury Payment Systems, a company founded in Durango, and a company it contracted with, Global Payments Direct, overcharged customers for the fees that major credit card companies require and imposed unauthorized fees. The lawsuit, filed in 2016, claims that Mercury committed fraud, breach of contract, unjust enrichment and violated the state Racketeer Influenced and Corrupt Organizations Act. Vantiv bought Mercury in 2014, making it part of the case. "Mercury (with the knowledge and assistance of Global) has for years carried out a widespread and systematic fraud on its customers. Without notice to merchants, Mercury has been surreptitiously and gradually inflating certain small, per-transaction fees," court documents claimed. The overcharged fees may add up to hundreds or thousands of dollars per merchant and tens or hundreds of millions of dollars in fraudulent profits, the claim states. Mercury does not admit fault, but it agreed to settle the case to avoid the expense, risk, inconvenience and distraction of continuing the case, court documents state. "We firmly believe that all of Mercury's business practices were both legal and transparent," said Adam Kiefaber, a spokesman for the company, in an email. Those who used Mercury or were referred by Mercury to Global for payment processing from Oct. 9, 2009, through May 16, 2017, and paid certain fees could receive money or credit in the settlement, according to information provided by the settlement administrator. A hearing scheduled for Aug. 26 will likely determine the amount owed to businesses in the settlement. Prosecuting attorney Adam Levitt said in an email the settlement is an example of the positive effect of class-action litigation. Several months after the lawsuit was filed, Mercury changed the worst of its practices and saved customers millions, he said. "We believe that it is a well-thought-out, well-researched, well- documented and strongly and effectively litigated settlement that does a lot of good for a lot of hardworking, American small business owners and other merchants. We hope that the court agrees and grants final approval to this settlement at the end of the month," he said in an email. [GN] VITAMIN SHOPPE: Faces Class Action Over Weight Loss Supplement -------------------------------------------------------------- Rachel Graf, writing for Law360, reports that Vitamin Shoppe Inc. has falsely advertised that a dietary supplement can contribute to weight loss when the product's active ingredients have no such benefits, according to a proposed class action removed to California federal court on Aug. 8. Andrea Nathan said the company's Garcinia Cambogia Extract dietary supplement claims to facilitate "weight management" and "appetite control," but its only active ingredients, hydroxycitric acid and chromium, "are scientifically proven to be incapable of providing such weight-loss benefits." "Defendant markets and advertises the product as an effective weight-loss supplement through claims placed directly on the bottle product despite that it provides no such benefits," the suit said. Ms. Nathan, who filed the suit in California state court in June, alleges she paid about $20 in February for a 180-caplet bottle of the Garcinia Cambogia Extract based on its weight loss claims. Vitamin Shoppe purposefully made the misleading claims to entice the average consumer to buy the product, the suit said. But instead of purchasing a weight loss aid, the customers were actually purchasing a product that is "no more effective than a placebo," Ms. Nathan argued. Ms. Nathan says that she lost money due to the company's misrepresentations, since she paid more than she would have for similar products that did not make weight loss claims. "The senior officers and directors of defendant allowed the product to be sold with full knowledge or reckless disregard that the challenged claims are fraudulent, unlawful, and misleading," according to the filing. Ms. Nathan is seeking to represent a class of people who have bought Vitamin Shoppe's Garcinia Cambogia since June 26, 2013. Ms. Nathan is alleging violations of California's Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act, as well as breach of warranties. Counsel for the parties didn't respond on Aug. 9 to requests for comment. Ms. Nathan is represented by Paul K. Joseph of The Law Office of Paul K. Joseph PC. Vitamin Shoppe is represented by Amy B. Alderfer and Brett N. Taylor -- btaylor@cozen.com -- of Cozen O'Connor. The suit is Andrea Nathan v. Vitamin Shoppe Inc., case number 3:17-cv-01590 in the U.S. District Court for the Southern District of California. [GN] VOLKSWAGEN GROUP: Faces "Wilson" Suit Over Defective Vehicles ------------------------------------------------------------- Lila Wilson, Matthew Martino, Thomas Wilson, Teresa Garella, Mary Blue, Ryan Brown, Brian Maytum, Leigh Glasband & Nick Panopoulos, on behalf of themselves and all others similarly situated v. Volkswagen Group of America, Inc. and Volkswagen AG, Case No. 1:17-cv-23033-RNS (S.D. Fla., August 10, 2017), is brought on behalf of a nationwide class of owners and lessees and the state of Florida Subclass, of Volkswagen CC model vehicles who, on or after June 1, 2012, leased or purchased Volkswagen CC model vehicles with faulty suspensions, shocks, and struts, which cause rapid and uneven wear and premature degradation of the vehicle's tires -- an effect often referred to as "Tire Cupping." The Defendants operate an automobile company headquartered in Virginia. [BN] The Plaintiff is represented by: Roy K. Altman, Esq. PODHURST ORSECK, P.A. One SE 3rd Avenue, Suite 2700 Miami, FL 33131 Telephone: (305) 358-2800 Facsimile: (305) 358-2382 E-mail: raltman@podhurst.com - and - Francesco P. Trapani, Esq. KREHER & TRAPANI, LLP 1325 Spruce St. Philadelphia, PA 19107 Telephone: (215) 907-7290 Facsimile: (215) 907-7287 E-mail: frank@krehertrapani.com - and - Andrew J. Sciolla, Esq. POGUST BRASLOW & MILLROOD, LLC Eight Tower Bridge, Suite 940 161 Washington Street Conshohocken, PA 19428 Telephone: (610) 941-4204 Facsimile: (610) 941-4245 E-mail: asciolla@pbmattorneys.com WALGREENS: Faces Class Action Over "Fraudulent Scheme" ------------------------------------------------------ Scott Holland, writing for Cook County Record, reports that a customer who said Walgreens charged him $21.80 for a generic drug through his insurance plan without telling him he could have paid only $10 if he paid in cash, has filed a federal class action complaint against the Deerfield-based retail pharmacy giant, saying the overcharge is part of a "fraudulent scheme" between the retailer and insurance companies. In his complaint filed on Aug. 9 in Chicago, David Grabstald, of San Francisco, said he made his purchase May 30 and no one at the store told him he could save 54 percent by not running the purchase through his insurer, Anthem Blue Cross. He said his experience is emblematic of a "fraudulent scheme" in which Walgreens participates with pharmacy benefit managers. According to Mr. Grabstald, the benefit managers negotiate prices insurance companies pay the pharmacies. That arrangement causes the insured to bring their medication prescriptions to those pharmacies. "As a result," the complaint alleged, "Walgreens is eager to reach agreements with PBMs that will drive more people to the stores, where customers often purchase more than their generic drugs." Mr. Grabstald further said such agreements "are based on secret, undisclosed contracts, under which Walgreens agrees to specific amounts it will charge and collect from insured customers -- but the customers can neither see nor learn about these agreements or their terms from the pharmacies, the insurance companies, or anyone else. The linchpin of the scheme is that the consumer pays the amount negotiated between the PBM and Walgreens even if that amount exceeds the price of the drug without insurance." He also said co-pays collected from customers exceed both Walgreens' price and profits, then sends the excess back to the benefit managers, a practice known as "clawback" or spread payments. Mr. Grabstald cited benefits manager OptumRx, which calls the practice its Pharmacy Reimbursement Overpayment program. According to the complaint, the National Community Pharmacists Association conducted a survey of hundreds of member pharmacies and found clawbacks to be a common practice. Mr. Grabstald also cited a New Orleans television station's series on the practice, "with pharmacists interviewed in the dark with voice distorters as they detailed the scheme." Yet he singled out Walgreens as "motivated by profit" and saying it "deliberately entered into these contracts, dedicating itself to the secret scheme that kept customers in the dark about the true price of the affected drugs" -- this despite promoting itself as committed to being candid and honest with customers. He also cited a 2016 SEC filing in which Walgreens said being expelled from a benefit manager network could substantially harm its business. According to the complaint, Walgreens' posts about $84 billion in annual prescription drug sales. Mr. Grabstald said Walgreens cannot rely on any statutes of limitations because it failed to disclose the scheme to customers. He requested certification of a Racketeer Influenced and Corrupt Organizations (RICO) Act class, for anyone insured under a health benefit plan administered by a pharmacy benefit manager, and a subclass for those on plans subject to the Employee Retirement Income Security Act, as well as a California subclass. In addition to a jury trial, Mr. Grabstald seeks more than $5 million in damages and wants the court to block Walgreens from engaging in clawback schemes with benefit managers. Representing Mr. Grabstald, and putative class attorneys, are lawyers from Hagens Berman Sobol Shapiro LLP in Seattle and Chicago; and Stanley Law Group, of Dallas. [GN] WEBMD HEALTH: Faces "Berg" Suit Over Proposed Sale to MH Sub ------------------------------------------------------------ Robert Berg, on behalf of himself and all others similarly situated v. WebMD Health Corp., Martin J. Wygod, Steven L. Zatz, Mark J. Adler, Ian G. Banwell, Neil F. Dimick, James V. Manning, William J. Marino, Joseph E. Smith, Stanley S. Trotman, Jr., Kristiina Vuori, MH Sub I, LLC, and Diagnosis Merger Sub, Inc., Case No. 1:17-cv-06064-UA (S.D.N.Y., August 11, 2017), stems from a proposed transaction announced on July 24, 2017, pursuant to which WebMD Health Corp. will be acquired by MH Sub I, LLC and its wholly-owned subsidiary, Diagnosis Merger Sub, Inc., which are affiliates of Kohlberg Kravis Roberts & Co. L.P. for $66.50 per share in cash. According to the complaint, WebMD filed a Solicitation/Recommendation Statement with the U.S. Securities and Exchange Commission, which recommends that WebMD stockholders vote in favor of the Proposed Transaction. However, the Proxy omits or misrepresents material. First, the Solicitation Statement omits material information regarding the Company's financial projections and the analyses performed by the Company's financial advisor, J.P. Morgan Securities LLC. Second, the Solicitation Statement omits material information regarding potential conflicts of interest of the Company's officers. Third, the Solicitation Statement omits material information regarding potential conflicts of interest of J.P. Morgan. Fourth, the Solicitation Statement omits material information relating the background leading to the Proposed Transaction. The Complaint says the Proposed Transaction will unlawfully divest WebMD's public stockholders of the Company's valuable assets without fully disclosing all material information concerning the Proposed Transaction to Company stockholders. To remedy the Defendants' Exchange Act violations, Plaintiff seeks to enjoin the stockholder vote on the Proposed Transaction unless and until such problems are remedied. WebMD Health Corp.is a provider of health information services, serving consumers, physicians, healthcare professionals, employers, and health plans through its public and private online portals, mobile platforms, and health-focused publications. The Plaintiff is represented by: Brian D. Long, Esq. Gina M. Serra, Esq. RIGRODSKY & LONG, P.A. 2 Righter Parkway, Suite 120 Wilmington, DE 19803 Telephone: (302) 295-5310 E-mail: bdl@rl-legal.com gms@rl-legal.com - and - Richard A. Maniskas, Esq. RM LAW, P.C. 1055 Westlakes Drive, Suite 300 Berwyn, PA 19312 Telephone: (484) 324-6800 WELLS FARGO: Expects Costs from Legal Claims to Reach $3.3 Bil. --------------------------------------------------------------- Peter J. Henning, writing for New York Times, reports that there is an adage that "it's better to ask forgiveness than it is to get permission." In the world of corporate misconduct, it seems that there is even less need to beg forgiveness these days as the government scales back how much it will police companies that appear to have violated the law. There may be no better recent example of how a corporate culture devolved into an almost preternatural focus on expanding the bottom line at the expense of customers and the law than Wells Fargo. In April, a report of an internal investigation into how the bank opened more than two million bogus customer accounts blamed leadership in its community banking division, saying that it "resisted and impeded outside scrutiny and oversight" while the former chief executive "failed to appreciate the seriousness of the problem." Wells Fargo recently disclosed that further investigation "may lead to a significant increase" in the number of unauthorized accounts, meaning that the problem may go far deeper than first thought. If Wells Fargo hoped that the bogus accounts issue was its only problem, it was sadly mistaken. The investigation also unearthed problems at its Merchant Services subsidiary that processed credit card transactions in which smaller companies may have been overcharged. A report on CNN about a recent lawsuit accusing the bank of breaching its agreements quoted an anonymous former employee of the bank who said, "We used to be told to go out and club the baby seals: mom- pop-shops that had no legal support" -- a "customer-be-damned" attitude to increase revenue. The New York Times reported that Wells Fargo is facing new questions about failing to refund insurance payments to borrowers who repaid their car loans early, and that it forced some to take unneeded collision insurance that pushed more than 250,000 borrowers into delinquency, including 25,000 whose cars were repossessed improperly. A statement from a bank spokeswoman said, "If we find customer impacts, we will make customers whole" -- a way of asking forgiveness rather than permission. In its most recent quarterly report, Wells Fargo disclosed that it increased its estimate of the costs from legal claims to about $3.3 billion. Yet, for all the issues the bank has faced, the only regulatory action against it has been a $185 million settlement with the Consumer Financial Protection Bureau, its lead regulator, the Office of the Comptroller of the Currency, and the Los Angeles City Attorney. A review of the Corporate Prosecution Registry maintained by the University of Virginia Law Library does not show Wells Fargo being the defendant in a criminal prosecution. It did settle a civil suit filed by the Justice Department in 2016 by paying $1.2 billion and admitted improperly certifying mortgages to obtain insurance from the Federal Housing Administration. The bank has not been the subject of an enforcement action by the Securities and Exchange Commission over its disclosure or accounting practices, although last year its investment bank was sued, accused of fraud related to a bond underwriting in Rhode Island. Will Wells Fargo be held to account for the many ways in which it mistreated its customers? The prospect of governmental action appears to be diminishing, and any fines it might face are likely to be at the low end of the scale based on recent enforcement trends since the start of the administration of President Trump. Penalties imposed by financial regulators so far in 2017 are much lower than for the comparable period last year, according to The Wall Street Journal. That may be a reflection of the end of the financial crisis cases, but the new chairman of the Securities and Exchange Commission, Jay Clayton, stated during his confirmation hearing that "shareholders do bear those costs and we have to keep that in mind." A report issued by the Environmental Integrity Project shows that federal environmental enforcement has also dropped, with fewer lawsuits against companies and a 60 percent drop in civil penalties during the first six months of the new administration. Even private litigation by consumers against corporations would be substantially reduced under a bill passed by the House in March. One part in the legislation would require each member of a class action to show the same injuries as all others before a federal court can certify it to proceed, severely limiting the number of such cases when the harm may not be the same to all. The flow of information about potential problems in banks will be curtailed under new regulatory guidance from the Federal Reserve, which oversees the largest banks. To ease the burden on the board of directors, the Fed would no longer require that the findings of a supervisory examination of the bank be given to the directors, and instead management would be responsible for passing along information about those matters that affect corporate governance. Of course, the proposal is offered as a major benefit to corporate boards, with the Fed asserting that it will "improve corporate governance overall, increase efficiency, support greater accountability, and promote compliance with laws and regulations." Directors would still be "responsible for holding senior management accountable for remediating supervisory findings," although they might not be aware of them. One of the basic requirements of corporate governance is the "Caremark duty" imposed on directors, named for an opinion from the Delaware Chancery Court in 1996. A board must put in place reporting systems to ensure that sufficient information reaches the directors to enable them to oversee the company and, when necessary, deal with problems. That duty does not permit delegating oversight responsibility to management, and directors should not just sit back and wait for information to pop to the surface. A problem in holding individuals accountable for misconduct in an organization is the disconnect between the actual decisions and those charged with overseeing the company, so that executives and corporate boards usually plead ignorance about an issue until it is too late. As Gretchen Morgenson pointed out in her Fair Game column about the Fed's proposal, "reducing the information flow between bank boards and their examiners just doesn't seem smart." Government regulation and enforcement can be a ham-fisted way of ensuring corporate compliance, so decreased regulation and lower penalties do not necessarily mean there will be an uptick in the number of violations. But if the regulatory environment sends the message that there will be few consequences for misconduct, then there may be little need to even seek forgiveness when there is a reduced prospect of being caught and punished. [GN] WEST MARINE: Parking Lot Not Accessible to Disabled, Pizzaro Says ----------------------------------------------------------------- RAMON PIZZARO, on behalf of himself and all others similarly situated, the Plaintiff, v. WEST MARINE, INC., the Defendant, Case No. RG17871968 (Cal. Super. Ct., Mar., 2017), seeks to recover statutory damages and reasonable attorneys' fees and costs, and injunctive relief as a result of Defendant's violation of anti- discrimination state statutes of California, the Unruh Civil Rights Act, the California Disabled Persons Act, and California Civil. According to the complaint, on June 16, 2017, the Plaintiff patronized the West Marine store located at 7 Pacific Coast Highway, Hermosa Beach, CA 90254 to purchase supplies and suffered discrimination as a result of being denied full and equal access. Specifically, this store denied Plaintiff equal access because it did not provide an accessible parking lot and/or restroom area. West Marine, founded in 1968 and based in Watsonville, California, operates a chain of boating supply and fishing retail stores. On February 23, 2017, West Marine reported net revenues for fiscal 2016 of $703.4 million.[BN] The Plaintiff is represented by: Evan J. Smith, Esq. BRODSKY & SMITH, LLC 9595 Wilshire Blvd., Ste. 900 Beverly Hills, CA 90212 Telephone: (877) 534 2590 Facsimile: (310) 247 0160 WEYERHAEUSER COMPANY: Faces "Esanbock" Suit Over Defective Joists ----------------------------------------------------------------- Dennis and Barbara Esanbock, Christopher Spinks, and Kevin Swehla, on behalf of themselves and all others similarly situated v. Weyerhaeuser Company, Case No. 0:17-cv-03702-SRN-DTS (D. Minn., August 11, 2017), arises out of the damages sustained by the Plaintiffs and the Class that were proximately caused by Weyerhaeuser's defective TJI Joists with Flak Jacket Protection (the "Joists") used in the construction of the Plaintiffs' and Class members' homes and other structures. Weyerhaeuser Company is one of the world's largest forest products companies, controlling 13.1 million acres of timberlands, primarily in the United States, and managing additional timberlands under long-term licenses in Canada. [BN] The Plaintiff is represented by: E. Michelle Drake, Esq. Joseph C. Hashmall, Esq. BERGER & MONTAGUE, P.C. 43 SE Main Street, Suite 505 Minneapolis, MN 55414 Telephone: (612) 594-5933 Facsimile: (612) 584-4470 E-mail: emdrake@bm.net jhashmall@bm.net - and - Shanon J. Carson, Esq. Lawrence Deutsch, Esq. Jacob M. Polakoff, Esq. BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103 Telephone: (215) 875-4656 Facsimile: (215) 875-4604 E-mail: scarson@bm.net ldeutsch@bm.net jpolakoff@bm.net XL AUTO: Accused of Wrongful Conduct Over Vehicle Price ------------------------------------------------------- Sandra Rago and Adam Rago, individually and on behalf of all others similarly situated v. XL Auto Group LLC, d/b/a Autos Wholesale, Michael Steadman, Jr., Mery Duran, Sean Joseph, Gateway One Lending & Finance, LLC, d/b/a Gateway Lending, and Does 1 through 500, inclusive, Case No. 17-cv-03649 (Cal. Super. Ct., August 10, 2017), arises out of the Defendants' illegal pattern and practice of failing to sell vehicle and related goods or services at the advertised price. XL Auto Group LLC is engaged in the business of buying and selling automobiles to the general public. Gateway One Lending & Finance, LLC operates a financial institution engaged in the business of holding conditional sale contracts and collecting payments made by consumers pursuant to such contracts. [BN] The Plaintiff is represented by: Louis A. Liberty, Esq. LOUIS LIBERTY & ASSOCIATES, a PLC 553 Pilgrim Drive, Suite A Foster City, CA 94404 Telephone: (650) 341-0300 Facsimile: (650) 403-1783 E-mail: lou@carlawyer.com - and - Martin Pumam, Esq. LAW OFFICES OF MARTIN PUTNAM 1300 Clay Street, Suite 600 Oakland, CA 94612 Telephone: (510) 466-6300 Facsimile: (510) 225-2625 E-mail martin@gutnamlaw.com ZTO EXPRESS: Bottini & Bottini Files Securities Class Action ------------------------------------------------------------ Bottini & Bottini, Inc., a law firm specializing in securities class action litigation, on Aug. 15 disclosed that it has filed a class action lawsuit on behalf of all persons who purchased the common stock of ZTO Express (Cayman), Inc. pursuant to the Registration Statement and Prospectus issued in connection with the Company's initial public offering ("IPO"). The lawsuit -- pending in the United States District Court for the Southern District of New York -- seeks to recover damages under the federal securities laws for those who purchased or otherwise acquired ZTO Express' stock pursuant or traceable to its October 27, 2016 IPO. Purchasers of ZTO Express securities who wish to serve as lead plaintiff in this lawsuit must apply to the court for lead- plaintiff appointment no later than October 16, 2017. If you purchased ZTO Express' stock in connection with its IPO and suffered losses, please contact plaintiff's counsel, Frank A. Bottini, Esq., of Bottini & Bottini, at (858) 914-2001 or fab@bottinilaw.com, to discuss your rights and interests in this lawsuit. You can also go to Bottini & Bottini's website (http://www.bottinilaw.com)for more information. The lawsuit charges that ZTO, certain of its directors and officers, and underwriters of its IPO violated Sections 11, 12, and 15 of the Securities Act of 1933. Defendants priced ZTO's IPO shares at $19.50 per share. Through the IPO, defendants issued and sold over 72 million ADSs, generating over $1.36 billion for defendants. The lawsuit alleges that the IPO Registration Statement and Prospectus contained materially false and misleading information, and failed to disclose that that ZTO was improperly inflating its stated profit margins by keeping certain low-margin segments of its business out of its financial statements. ZTO failed to disclose that it used a system of "network partners" to handle lower-margin pickup and delivery services, while maintaining ownership of core hub operations. By keeping the "network partners" businesses off its own books, the Company allegedly was able to exaggerate its profit margins to investors. Subsequent to the IPO, ZTO Express' stock declined immediately. As of August 11, 2017, the stock was trading at just $13.25 -- a decline of over 32% from the IPO price. If you wish to join the litigation or discuss your interests in this lawsuit, contact Frank A. Bottini of Bottini & Bottini at (858) 914-2001 or fab@bottinilaw.com. [GN] * Buckley Sandler Attorneys Discuss Class Ascertainability Debate ----------------------------------------------------------------- Amanda Lawrence, Esq. -- alawrence@buckleysandler.com -- and Michael Rome, Esq. -- mrome@buckleysandler.com of Buckley Sandler LLP, in an article for Law360, report that in recent years, courts have divided sharply over whether or not Rule 23 of the Federal Rules of Civil Procedure creates an implicit requirement that a class must be ascertainable in order to be certified. This article addresses the meaning of ascertainability, the circuit split over whether and to what extent it is required, and implications of the ascertainability circuit split for class action litigants. What is Ascertainability? Assessing the Growing Circuit Split In addition to the Rule 23(a) and 23(b) requirements for class certification, most circuit courts have recognized another implicit requirement that must be met before a Rule 23(b)(3) class can be certified: ascertainability. But what ascertainability means and whether and when that requirement can be satisfied has been hotly debated in the courts. Two definitions of (or tests for) ascertainability have emerged: heightened ascertainability and lesser ascertainability. Courts in the First, Third, Fourth and Eleventh Circuits have adopted the heightened ascertainability requirement. In these circuits, a class cannot be certified unless the class is sufficiently definite and plaintiffs demonstrate an administratively feasible way for the court to determine whether a particular individual is a member of the class. "If class members are impossible to identify without extensive and individualized fact-finding or 'mini-trials,' then a class action is inappropriate." Marcus v. BMW of North America LLC, 687 F.3d 583, 593 (3d Cir. 2012). On the other hand, the Second[1], Sixth, Seventh, Eighth and Ninth Circuits have rejected the heightened ascertainability requirement, finding that there is no independent "administrative feasibility" prerequisite to class certification. The Third Circuit's Heightened Ascertainability Requirement The leading case in favor of imposing the heightened ascertainability standard is Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013). Carrera was a putative class action against a weight loss supplement provider alleging that the defendants deceptively advertised the product as enhancing metabolism. The weight loss supplement provider did not sell its product directly to consumers but instead sold the product in retail stores such as pharmacies. The plaintiffs advanced two ways to ascertain the class: (1) by retailer records of online sales and sales made with loyalty or rewards cards; and (2) by affidavits from class members attesting that they bought the product and stating the amount they paid. While the district court granted class certification, the Third Circuit vacated the order on ascertainability grounds, finding that these two methods in this case were insufficient because (1) there was no evidence that the retailers had such records, and (2) the affidavits were not subject to a reliable screening methodology to identify fraudulent claims. In so doing, the Carrera court stated that a class cannot be certified unless there is an administratively feasible method of determining whether individuals are members of the class. In Carrera, the Third Circuit provided a number of rationales for the precertification heightened ascertainability requirement. First, a precertification administrative feasibility requirement eliminates significant administrative burdens -- such as the need to conduct mini-trials to identify proper class members -- that are inconsistent with the efficiencies that are supposed to be achieved in class actions. Second, the administrative feasibility requirement is necessary to provide proper notice to absent class members and protect legitimate claimants from dilution of their recovery that would result from fraudulent claims. Third, the administrative feasibility requirement is necessary to protect the due process rights of defendants to raise individual defenses and challenges to claims, including the opportunity to challenge whether class members are truly part of the proposed class. Recent Decisions Rejecting the Heightened Ascertainability Requirement A number of circuits, including the Second, Sixth, Seventh, Eighth and Ninth Circuits, have rejected the heightened precertification ascertainability requirement. Instead, in these circuits, any ascertainability requirement is met so long as a class is defined using objective criteria that establish a class membership with definite boundaries. One of the most recent cases rejecting the heightened ascertainability requirement came from the Ninth Circuit in Briseno v. ConAgra Foods Inc., 844 F.3d 1121 (9th Cir. 2017). Briseno was a putative class action against a packaged food company alleging that a consumer product was mislabeled. The proposed classes included consumers in 11 states that purchased cooking oils labeled "100% natural." The defendant moved to dismiss the class claims on ascertainability grounds, arguing that there was no administratively feasible way to reliably identify members of the proposed classes because "consumers do not generally save grocery receipts and are unlikely to remember details about individual purchases of a low-cost product like cooking oil." The Ninth Circuit rejected this argument, concluding that "a separate administrative feasibility prerequisite to class certification is not compatible with the language of Rule 23." The court relied heavily on the absence of any language in the text of Rule 23 imposing an administrative feasibility requirement. It explained: "The language of Rule 23 does not impose a freestanding administrative feasibility prerequisite to class certification. Mindful of the Supreme Court's guidance, we decline to interpose an additional hurdle into the class certification process delineated in the enacted Rule." In reaching this decision, the Briseno court rejected each of the rationales set forth by the Third Circuit in support of such a rule. First, it rejected the administrative efficiency rationale, noting that the manageability requirement in Rule 23 already addresses administrative concerns in a more balanced way. Second, it rejected the concern regarding providing reliable individual notice to absent class members, explaining that all that is required is the best notice practicable under the circumstances, not actual notice. Third, it dismissed the concerns regarding the submission of fraudulent claims, finding it to not be a substantial concern given the low response rates to class settlements. Finally, the Briseno court rejected the Third Circuit's due process rationale, finding that defendants can raise individual challenges and defenses to claims of named class members immediately, and can challenge those of absent class members if and when they file claims. The Briseno court found that these opportunities to challenge the plaintiffs' claims were sufficient to protect defendants' due process rights, noting that while "ConAgra may prefer to terminate this litigation in one fell swoop at class certification rather than later challenging each individual class member's claim to recovery, [] there is no due process right to a 'cost-effective procedure for challenging every individual claim to class membership.'" A panel in the Second Circuit also recently rejected the heightened ascertainability requirement in In re Petrobras Securities Litigation, 862 F.3d 250 (2d Cir. July 2017). This decision was a surprise to many observers, because the Second Circuit previously embraced Carrera in Brecher v. Republic of Argentina, 806 F.3d 22 (2d Cir. 2015) as well as a more recent opinion following Brecher, Leyse v. Lifetime Entertainment Services LLC, 2017 U.S. App. LEXIS 2607 (2d Cir. Feb. 15, 2017). The defendants in Petrobras have petitioned the Second Circuit for en banc review in light of these apparently inconsistent positions. Before July of this year, the Second Circuit was generally considered to be on the Third Circuit's side of the circuit split. Class action lawyers will be closely following the Second Circuit's response to the petition for en banc review, which may be a precursor to review by the U.S. Supreme Court. Conclusion These different ascertainability standards have significant consequences for class certification. For example, consider a hypothetical class action on behalf of consumers that purchased a mislabeled product. Under the heightened ascertainability test, the class may not be ascertainable because the consumers could not reliably identify themselves as having bought the mislabeled version of the product. However, under the less restrictive ascertainability test, the class may be considered ascertainable because it is defined by objective criteria. In the First, Third, Fourth and Eleventh Circuits, defendants may be able to defeat class certification in such a case on ascertainability grounds. In the Second, Sixth, Seventh, Eighth and Ninth Circuits, the class might be certified, and the defendant would have to litigate whether putative class members are properly members of the class on an individual basis after certification. Given the economic realities of class litigation, litigating the proper inclusion of individual putative class members after class certification could prove cost-prohibitive for defendants in most cases. As such, defendants in that position may consider settlement rather than mount a challenge to the class membership of individual class members. The Ninth Circuit's opinion in Briseno and recent opinions in the Eighth and Second Circuits have deepened an already significant circuit split on the issue of ascertainability. Given the Ninth Circuit's forceful rejection of the legal and policy rationales put forward by the Third Circuit, this issue is now ripe for Supreme Court review. In the interim, favorable decisions in the Second and Ninth Circuits -- two of the most popular circuits in which to bring class claims -- will be seen as a boon to plaintiffs. Class counsel should keep these differences in mind as they strategize where to bring and defend class claims. Amanda R. Lawrence is a partner at Buckley Sandler LLP in Washington, D.C. Michael A. Rome is an associate at Buckley Sandler in Los Angeles. They regularly represent clients in putative consumer class actions. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] The Second Circuit recently rejected the administrative feasibility requirement in In re Petrobras Sec. Litig., 862 F.3d 250 (2d Cir. July 2017). The decision distinguished two prior circuit opinions that had embraced this standard, and is now the subject of a petition for en banc review. [GN] * Class Actions Over Data Collection Methods Surge -------------------------------------------------- Glenn Minnis, writing for Cook County Record, reports that a growing number of U.S. companies are turning to measures like biometric tools to validate time entries and other forms of tracking an employee's movements and actions. And as technology rapidly changes, it has also sparked a surge of litigation over data collection methods, and the levels of protection dedicated to electronically-gleaned data. A simple scan of an employee's fingerprints can conclusively validate a worker and who they are signing in as, seemingly doing away with employer concerns such as "buddy punching." Still, the issue remains perplexing for employers, who now must face potential lawsuits, as well. In Illinois, for instance, the Biometric Information Protection Act allows individuals to sue over alleged violations, leaving some companies exposed to "liquidated damages" of as much as $5,000 per violation, along with attorney and expert witness fees. "People become more nervous as breaches happen," Joseph Lazzarotti, an attorney at the New Jersey office of law firm Jackson Lewis, told the Cook County Record. "There has not been a lot of case law on the issue, and the Illinois law is unique. In the end, some companies might try to find different ways of timekeeping." In the meantime, Mr. Lazzarotti advises companies that still rely on the technology to take precautions, including making sure they don't keep any personal information for longer than needed and by obtaining written consent from targeted individuals prior to collecting any data. "Employees need to understand tech and what it does," Mr. Lazzarotti said. "They need to think of that before just dumping on employees. They need to work to have employees embrace the process." In Illinois, both the parent company of Mariano's supermarkets and the Intercontinental Hotel Group have been hit with class action lawsuits alleging they improperly collected and stored employee fingerprints and other biometric data. Presently, 48 states have enacted laws requiring notification of a breach of "personal information." From state to state, the definition of personal information varies, but is largely not limited to just Social Security numbers. Laws in Illinois, Connecticut, Iowa and Nebraska also include biometric information. Mounting confusion aside, Mr. Lazzarotti predicts that such technology will continue to grow as it becomes even more convenient. "It's much easier to put a thumb on everything and not have to remember passwords," he said. "With that, you're likely to see more laws in more states." Meantime, Mr. Lazzarotti is closely monitoring developments in biometric technology, including an employer in Wisconsin that recently offered to implant a microchip in employees to help with time tracking and plant security. "Some have raised the question of, if that might lead to medical conditions, or the matter of what happens when an employee leaves and how much monitoring is too much," Mr. Lazzarotti said. "Employees need to always be vigilant with data and remember that nothing is completely secure. Tech helps us to be more productive, but we also have to be concerned about making people more comfortable with it." [GN] * Employers Face Biometric Data Privacy Litigation Threat --------------------------------------------------------- John Myers, writing for Cook County Record, reports that as they face a growing number of class action lawsuits from workers accusing them of improperly collecting and storing their fingerprints and other biometric data, employers should not ignore the litigation threat arising from a growing number of state laws protecting biometric privacy. "Companies should consult with their lawyers and . . . adopt policies and procedures to comply with these [and other] requirements," said attorney Steve Gold, with McguireWoods in Chicago. "It is also important for a company to work with its lawyers and its information technology personnel to take steps to maintain the security and privacy of private information including biometrics so as to reduce any possible harm to the individuals whose information is collected." In the Chicago area, two recent cases highlight the risk. First, in March, former Mariano's supermarket employee Norman Baron sued Roundy's, an affiliate of Kroger, the parent company of Mariano's, alleging the supermarket chain's policy requiring employees to use a unique fingerprint to clock in or out of their shifts violated the Illinois Biometric Information Privacy Act (BIPA). The law was enacted in 2008, purportedly to protect the security of biometric data belonging to Illinois residents, including fingerprints and retinal data. For Mariano's system to work, the company allegedly had to scan and store each employee's unique fingerprint. However, the company never acquired the express written consent of its employees before storing the data, according the to the lawsuit. Shortly after, Intercontinental Hotel Group was also hit with a similar lawsuit in Chicago, as employees there similarly alleged the hotel chain had also improperly collected and stored employee biometric data. Gold said Illinois has unusually strict guidelines when it comes to the manner by which companies handle employee biometric data. "In Illinois [and a few other states], there is a specific statute addressing biometric information, such [as] a fingerprint," he said. "That law provides that no private entity may collect such information unless it first follows certain guidelines." Gold said these guidelines include three key rules. "The company must inform the person in writing that it is collecting the biometric information; it must inform the person in writing of the purpose and length of time for which it is collecting the information; and obtain an informed written consent, which must, in the context of employment, be signed as a condition of employment," he said. Baron's class action suit, which was originally filed in the Cook County Circuit Court, was removed to the U.S. District Court for the Northern District of Illinois. In its request for removal, the supermarket chain estimates that the total cost of damages could surpass $5 million. [GN] * Forced Arbitration Not Just a Trend in Nursing Homes ------------------------------------------------------ According to Levin & Perconti, Binding or Forced Arbitration, the process of requiring customers, patients, and nursing home residents to agree to settle disputes outside of court, has been gaining popularity. From a big business perspective, arbitration significantly reduces the costs associated with a legal dispute and traditionally favors the party being sued over a death, injury, or other grievance. In the past year, binding or forced arbitration in nursing homes has been a frequent topic of conversation as conflicting actions have played out within the Centers for Medicare and Medicaid Services (CMS), the agency that oversees federally funded nursing homes in this country. Last year, the Obama Administration and CMS passed a rule that would ban binding arbitration clauses as a condition of admission to nursing homes. In December, a federal judge in Mississippi blocked the enforcement of the ban. And in the most surprising move of all, just CMS did a 180 and decided that they would support binding arbitration clauses in nursing home admission contracts. What is Binding Arbitration? Binding arbitration clauses, one of many rules embedded in lengthy nursing home admission paperwork, require nursing home residents to agree to settle disputes with a nursing home-selected third party serving as a negotiator. Often unsure what a binding arbitration clause entails, residents or their loved ones are signing on the dotted line, unaware that they have given up their 7th Amendment right to a jury trial. Families have found themselves grief-stricken after a loved one has wrongfully died or is injured, only to have their grief compounded by discovering that their only path to demanding accountability is by negotiating with a nursing-home selected represented who essentially holds all of the cards. Studies have shown that arbitration tips the scales in favor of the defendant, leaving the injured party (plaintiff) with less favorable outcomes than they would receive from a jury trial. Bank Customers and Student Loan Recipients Also Victims to Binding Arbitration In Closing the Courthouse Door, a New York Times piece published recently, the newspaper addressed other victims of binding arbitration, including bank customers and those who obtained student loans from for-profit colleges and educational institutions. The Consumer Financial Protection Bureau (CFPB) recently issued a rule that would allow bank customers to initiate or join a class- action lawsuit against their financial institution, thereby eliminating binding arbitration clauses as a legal and cost-saving tactic used by banks. The paper points out the victims of the Wells Fargo banking scandal, which left thousands of customers unaware that 2 million false accounts had been opened in their names as a way to meet banker sales quotas. Wells Fargo clients had to sign binding arbitration agreements, essentially allowing the bank to get away with paying significantly less to the victims of their deceit and fraud. The CFPB rule has caused a stir among some Republicans, who unsuccessfully tried to stall the rule until they could determine what financial impact it would have on big banks. The rule is currently set to go into effect next year. For those who receive student loans from a for-profit university, the Department of Education is attempting to reverse another Obama-era rule that prevented the institutions from forcing disagreements over student loans to go through arbitration and not through the court. The bottom line is that arbitration agreements are everywhere. Former President Obama passed several laws to prevent their use, including in nursing home admission contracts, in employment agreements (for those suing businesses receiving federal funding), and in student loan agreements. However, with a current pro- business administration, it seems binding arbitration is coming back with a vengeance. To quote the New York Times, "If Senate Republicans, once again blinded by their antipathy to President Barack Obama, vote to repeal this rule, they will join their House colleagues and the Trump administration in closing the courthouse door to vulnerable, victimized and defrauded Americans." [GN] * Pillsbury Winthrop Attorneys Discuss CPB Arbitration Rule ----------------------------------------------------------- Mercedes K. Tunstall, Esq. -- mercedes.tunstall@pillsburylaw.com -- and Andrew Caplan, Esq. -- andrew.caplan@pillsburylaw.com -- of Pillsbury Winthrop Shaw Pittman LLP, in an article for Lexology, report that financial Institutions may need to revise consumer contracts to remove class action waivers in preparation for a March 2018 federal rule. On July 19, the U.S. Consumer Financial Protection Bureau, the federal regulator for a sweeping range of depository and non- depository consumer financial services companies (including the largest of U.S. banks), published a final rule that makes it illegal for many of the CFPB's regulated entities to include consumer class action waivers in pre-dispute arbitration agreements. The Rule's effective date is September 18, 2017, and applies to contracts entered into after March 19, 2018. (The Rule does not apply to pre-existing contracts.) As a result, covered consumer contracts entered into after March 19, 2018, will need to: (a) remove language in pre-dispute arbitration provisions that bars consumers from participating in class actions; and (b) add language informing consumers of their rights to participate in class actions. The Rule will also require such companies to provide information on individual arbitration awards to the CFPB for publication in a public database (redacting consumers' private financial information). Although the Rule does not outright prohibit pre-dispute arbitration agreements themselves (as many expected the CFPB might), companies will need to reconsider the economics behind offering consumers a full arbitration program in light of a future reality of increased class actions. Unlike the majority of the CFPB's regulations, which cover specific financial products or services, the Rule applies across a wide swath of traditional and online consumer financial products and services, including among other things deposit accounts, credit cards and consumer reporting products. (Arbitration agreements, themselves, are already prohibited in residential mortgage transactions, so the Rule does not cover those.) Although the Rule was issued as "final" (as opposed to a mere proposal), the Rule is currently subject to fierce political headwinds from Congressional Republicans, the White House and industry trade groups, all of whom strongly oppose the CFPB's current director, Richard Cordray, an Obama appointee. Indeed, the House of Representatives has already passed a resolution that, if adopted by the Senate and signed by the President, would nullify the Rule and bar the CFPB from issuing a similar rule in the future without an express Congressional directive. The catch is that the procedure Congress would invoke to nullify the Rule, the Congressional Review Act, must be used within 60 legislative days of the Rule's publication of the Federal Register. While the House of Representatives has taken the first step, it remains to be seen if the Senate will have opportunity to act in light of other legislative priorities. Notwithstanding these potential threats to the Rule from Congress, as of the time of this writing, the CFPB appears to be moving full steam ahead. As a result, companies that fall within the Rule's coverage are well advised to begin reviewing their consumer agreements and dispute resolution procedures in preparation for the distinct possibility that prohibitions on consumer class action waivers become the law in March 2018. [GN] * Towers Watson Sues Morgan Lewis for $30MM for Helping Meriter --------------------------------------------------------------- Lizzy McLellan, writing for The Legal Intelligencer, reports that Towers Watson Delaware is suing Morgan, Lewis & Bockius for more than $30 million, based on its claims that the firm knowingly helped another client, Meriter Health Services, sue Towers. The complaint claims Morgan Lewis' alleged conflict of interest in representing Towers was "just the tip of the iceberg." Towers said Morgan Lewis used its representation of Towers to assist another law firm, referred to in the complaint as "Law Firm 2," in developing Meriter's lawsuit. That case ended in a settlement in June, according to a Towers filing with the U.S. Securities and Exchange Commission. The terms were confidential, but Towers has alleged that by assisting Law Firm 2, Morgan Lewis caused Towers to lose more than $25 million, in addition to legal fees already paid. "Morgan Lewis' actions in developing and assisting in the development of claims against the interests of its client Towers, in concert with Law Firm 2, are as shocking as they are abundant," the complaint said. "Although Morgan Lewis paid lip service to its inability to 'be involved in any discussions involving Towers,' it regularly participated in those discussions." While "Law Firm 2" isn't identified in the lawsuit, court records show that Nixon Peabody and Gass Weber Mullins LLC represented Meriter. According to the complaint, Morgan Lewis represented Towers from 2009 to 2016, and partner Jeremy Blumenfeld was the lead defense counsel in one Towers matter. In 2010, Morgan Lewis, led by Blumenfeld and partner Charles Jackson, began defending Meriter in a class action over a retirement plan, the complaint said. After the class action settled in 2014, Meriter sued Towers, the complaint said, alleging that Towers was responsible for Meriter's liability in the class action. Towers Perrin, a predecessor of Towers, designed the retirement plan at issue in the class action lawsuit. (Towers Watson is now part of consulting company Willis Towers Watson.) Morgan Lewis acknowledged long before the settlement that the two clients would have conflicting interests, the complaint said, bringing in another firm in 2010 to work on the tolling agreement between Meriter and Towers. Meriter also retained a second firm to handle third-party provider participation in the class action, including Towers' involvement. But Towers alleged that Morgan Lewis still never informed them of the conflict or sought Towers' consent to the conflict. Instead, they alleged, the firm caused Towers to implicate itself in the underlying class action. "Throughout the class action, Morgan Lewis knowingly allowed, and at times induced, its current client, Towers, to take positions as a nonparty in the class action that Morgan Lewis knew would harm Towers in subsequent litigation with Meriter," the complaint said. Additionally, Towers alleged that Morgan Lewis worked with Law Firm 2 to create a strategy for the class action that would shift blame from Meriter to Towers. This allegedly involved Morgan Lewis eliciting testimony from a Towers witness that would later support Meriter's claims. It also included changes to the settlement notice to avoid statute of limitations issues on Meriter's lawsuit, the complaint alleged. In December 2014, after Towers learned of Meriter's intent to sue, Towers' in-house counsel contacted Morgan Lewis to confirm that the firm would not play a role in Meriter's litigation, the complaint said, "unaware of the role Morgan Lewis had already played in developing Meriter's case against Towers." Towers' complaint alleges breach of contract and breach of fiduciary duty by Morgan Lewis and Blumenfeld. A spokeswoman for Morgan Lewis declined to comment on the complaint. Richard Sprague, who is representing Towers Watson, did not respond to a call seeking comment. Neither did Nixon Peabody and Gass Weber Mullins. [GN] * Trump Organization Requires Mandatory Arbitration Agreements -------------------------------------------------------------- Valerie Bolden-Barrett, writing for HRDrive, reports that CBS News obtained documents that revealed the Trump Organization requires signed mandatory arbitration agreements from employees at its properties. The document informs all Trump employees, including housekeepers, gardeners and manicurists, that they must settle disputes through arbitration and forfeit their right to go to court or join class-action suits, according to CBS. The Trump Organization says that mandatory arbitration is a faster, cheaper and less complicated means of settling disputes than lawsuits. CBS notes that up to 20% of all businesses across the country require employees to forfeit their right to sue. They say that resolving claims this way saves both employers and workers money. Courts have recently handed employers several wins on this issue, supporting their demands that workers sign arbitration agreements, CBS notes. Dive Insight: Following the administration change, the U.S. Department of Justice (DOJ) in June switched its stance on mandatory arbitration and took employers' side, arguing that courts should uphold these agreements. DOJ submitted an amicus brief in the NLRB v. Murphy Oil lawsuit supporting the legality of class-action waivers in arbitration agreements. Many employers adopted arbitration agreements to curtail increased liability that comes with class- action suits. The DOJ's about-face comes alongside several other Trump administration attempts to reverse Obama administration positions. So far, courts haven't exactly provided clarity on this. A year ago, the 9th U.S. Circuit Court of Appeals took the National Labor Relations Board's side against Ernst & Young, ruling that the company's contract clause denied employees the right to participate in class action suits. But the U.S. Supreme Court has generally supported arbitration agreements in the past. Employers might well benefit from the DOJ's new stance, but they should review their arbitration agreements to make sure they don't cross the line into violating employees' rights, as currently defined by controlling appellate courts and any relevant laws. [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. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $775 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Joseph Cardillo at 856-381- 8268. * * * End of Transmission * * *