/raid1/www/Hosts/bankrupt/CAR_Public/190716.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, July 16, 2019, Vol. 21, No. 141
Headlines
A. FINKL: Faces Class Action Over Illinois BIPA Violation
ACE AMERICAN: Court Agrees to Transfer Class Action to Georgia
ACUITY BRANDS: Bid to Dismiss Georgia Securities Suit Pending
ADAMAS PHARMACEUTICALS: Faces Class Action Over 2018 SPO
ADIR INTERNATIONAL: Underpays Salespersons, Rodriguez Claims
AFNI INC: Feder Alleges FDCPA Violation in New York
AKORN INC: Court Abrogates Settlement in Securities Suits
ALLERGAN: Breast Cancer Survivors Mull Class Action Over Implants
ALLTRAN FINANCIAL: Deutsch Suit Asserts FDCPA Breach
ALLTRAN FINANCIAL: Greenzweig Files FDCPA Suit in New York
AMAZING CARE: Underpays Health Service Workers, Badon Alleges
AMERICAN BOTTLING: Fails to Pay Proper Wages, Dibenedetto Says
AMERICAN FEDERATION: NRWLDF Fights Unions' Coercive Tactics
AMERICAN MEDICAL: Faces Class Actions Over Data Breach
AMP: Maurice Blackburn Files Another Class Action Over Fund Fees
ARS NATIONAL: Deutsch Alleges Violation under FDCPA
ASH SOUNDS: Settles Falls Festival Stampede Victims' Class Action
AUSTIN, TX: More Women Plan to Join Sexual Assault Class Action
BANK OF AMERICA: Durrani et al. Seek OT Premium Pay
BE AMAZED: Court Extend Time to Respond to Complaint in Lynch Suit
BEAUTYHABIT INC: Dawson Suit Alleges ADA Violation
BOEING: Levi & Korsinsky Seek Stock Drop Suit Lead Counsel Role
BRIGHAM-GILL: Underpays Salespersons, Gorski Suit Alleges
CALIFORNIA PUBLIC: Faces Class Action Over LT Insurance Policy
CARMAX INC: Wage & Hour Class Suits Continue in Calif.
CHIPOTLE MEXICAN: Has Made Unsolicited Calls, Johnson Alleges
CLEAN ENERGY: Calif. Court Dismisses Bryant TCPA Suit
COCA-COLA: Salzhauer Sues over Maltreatment of Dairy Cows
COINBASE INC: Court Denies Protective Order Bid in Leidel Suit
COLORTREE: Former Employees File Class Action Following Closure
COMCAST: Law Firms Urge Court to Approve $1.1MM Fee Request
CRAFT BEER: Moves to Settles Beer Hawaii Brands Class Action
DUPONT: Blades Residents Sue Over Drinking Water Contamination
ECO SCIENCE: Bid to Stay Raschke Class Suit Pending
EROS INTERNATIONAL: Kessler Topaz Files Securities Fraud Class Suit
EROS INTERNATIONAL: Rosen Law Firm Files Securities Class Action
EROS INTERNATIONAL: Schall Law Firm Files Class Action Lawsuit
EVENTBRITE INC: Scott+Scott Attorneys Files Class Action
F.E.S INC.: Faces Pangiotis Suit in Eastern Dist. of New York
FACEBOOK INC: In-House Attorney Joins Gender Bias Class Action
FINISAR CORP: Judgment on Pleadings Bid in Securities Suit Granted
FLOWERS HOSPITAL: Judge Closes Data Breach Class Action
GC SERVICES: Court Denies Class Certification in Jaber Suit
GENERAL MOTORS: Tavarez et al. Sue over Defective 2.4L Engine
GOOGLE INC: Another Engineer Fired Amid Damore Class Action
GOOGLE INC: Must Face Class Action Over Conservative Bias
GOOGLE LLC: Sept. 3 Nexus 6P Settlement Claims Filing Deadline
GRUBHUB: Faces TCPA Class Action in Illinois
HANSON AGGREGATES: Averts Class Action Over Recorded Phone Calls
HAWAII: Court Denies IOA's Bid to Dismiss A.B. Suit
HEALTH INSURANCE: Faces Class Action Over Alleged Fraud
HECLA MINING: Bhattacharya Sues over 23% Drop in Share Price
HIGH TOP: Roof Garden Residents File Class Action
HOME DEPOT: Bradley Arant Attorneys Discuss Supreme Court Ruling
HOME DEPOT: Caplin & Drysdale Attorneys Discuss Court Ruling
HOME DEPOT: Gibson Dunn Attorneys Discuss Supreme Court Ruling
HOME DEPOT: Proskauer Rose Attorneys Discuss Supreme Court Ruling
HOSPITAL ASSOCIATION: Tenn. App. Affirms Fowler Suit Dismissal
ILE-BIZARD-STE-GENEVIEVE: Residents File Suit Over Flood Crisis
INDIANA: Court Denies T. Ganus's Bid to Certify Suit
IQVIA INC: 7th Cir. Set to Rule on Jurisdiction Issue
JEFFERIES FINANCIAL: Francl Sues over Jefferies Merger Deal
JUMIO CORPORATION: Marshall Sues over Biometric Data Collection
LA TUTORS 123: Underpays Tutors, Kohut Suit Alleges
LIBERATOR MEDICAL: Sept. 30 Settlement Fairness Hearing Set
LIBERTY TAX: Bid to Dismiss Labrado Class Action Denied
LIBERTY TAX: Bid to Dismiss NY Consolidated Suit Still Pending
LIBERTY TAX: Final Approval of Settlement in Delaware Suit Pending
LIGHTHOUSE LIVING: Faces Broadway's Labor Suit in Sacramento
LIVENT CORP: Roe Calls IPO Documents "False" and "Misleading"
LOUISIANA RECOVERY: Taylor Sues over Debt Collection Practices
MARKETSOURCE INC: Underpays Coordinators, Tarsa Suit Alleges
MARYLAND: 1,000+ Retirees Sue Over Prescription Drug Benefits
MASSAGE RETREAT: Dahlheimer Settlement Has Prelim Court Approval
MICHIGAN: Bid to Reconsider Order Trimming Claims in K.B. Denied
MIDLAND CREDIT: Baty Suit Moved to Eastern District of New York
MIDLAND CREDIT: Masone Suit Moved to Eastern District of New York
MONAVIE INC: Court Dismisses Parker's MMA Claim Without Prejudice
MONSANTO CO: Dicamba Class Action Likely in Next Few Years
MONSANTO COMPANY: Castro Sues over Sale of Herbicide Roundup
MOUNT IDA: Massachusetts Court Dismisses Squeri Suit With Prejudice
NATIONWIDE MUTUAL: Loses Bid to Dismiss B. Smith's UIM Suit
NISSAN: Agrees to Settle Altima Transmission Class Action
NU SKIN: Dawson Asserts Breach under Disabilities Act
OCEAN SPRAY: Court Disallows Exclusion of Expert Witness in Hilsley
ODD JOB: Attorney General Mulls Class Action Following Closure
OHR PHARMA: Suits over NeuBase Merger Dismissed
OXTON SENIOR: Sept. 30 Settlement Final Approval Hearing Set
PER DIEM: Bid for Judgment on Pleadings in Junkersfeld Suit Granted
PPG: Settles Accounting Scandal Class Action for $25MM
QUANTUM CORP: Settlement Agreement Entered in Lazan Class Suit
QUEST DIAGNOSTICS: Benadom Sues over Data Breach
QUEST DIAGNOSTICS: Cinelli Sues over Data Security Failure
QUEST DIAGNOSTICS: Faces Ryan et al. Suit over Data Breach
QUEST DIAGNOSTICS: Webb Sues over Data Security Failure
RASH CURTIS: Faces Potential $267MM TCPA Class Action Judgment
REATA RESTAURANTS: Underpays Servers, Champagne Suit Alleges
RENO, NV: Trial Begins in Class Action Over Swan Lake Flooding
RYANAIR: Seeks Dismissal of Pension Fund Class Action in U.S.
SABA CAPITAL: Hedge Fund Files Class Actions Over Proxy Contest
SALES PROS: Fails to Pay Proper Wages, Trevethan Alleges
SANTANDER CONSUMER: Faces Suit over Debt Collection Practices
SAVE-A-LOT KNOXVILLE: Court Dismisses McCloud Suit w/o Prejudice
SHREVEPORT, LA: Ordered to Return Illegally Collected Taxes
SIRTEX: Settles Shareholder Class Action Over Profit Downgrade
SOUTH AFRICA: Women Sue DHA to Escape Fraudulent Marriages
SPRINT: State AGs Sue to Block Merger Amid Class Action
ST PAUL, MN: Faces Class Action Over Sick Leave Policy
STANFORD INTERNATIONAL: $65MM Deal in Securities Suit Vacated
SUBURBAN SPINE: Durnell Suit Moved to E.D. Pennsylvania
SUNCORP SUPER: Two Law Firms Team Up to Bring Fee Class Action
TESLA INC: Hoffman Seeks Refund from Cancelled Car Reservation
TOYOTA MOTOR: 1st Amended Espineli Dismissed With Leave to Amend
TRADER JOE'S: Ct. Junks Manuka Honey Deceptive Marketing Suit
TRANSWORLD SYSTEMS: Klein Asserts Breach of FDCPA
TRI-MED: To Reply to Interrogatory/Certification Demands in Wallace
TURBOTAX: Faces Class Action Over Tax Filing Fee
TURTLE CREEK: Shaw Sues over Debt Collection Practices
UBS FINANCIAL: 5th Cir. Affirms Dismissal of Lampkin Suit
UNITED STATES: Argues Banning Bump Stocks Not Abuse of Discretion
UNITED STATES: FBI Faces Gender Discrimination Class Action
UNITED STATES: Young Immigrants Oppose Appeal of DACA Case Ruling
UPS STORE: Court Grants Bid to Certify Question to SJC
VALE: Faces Class Actions Following Tailings Dam Burst
VARNELL AND WARWICK: Obtains Favorable Ruling in Class Actions
VOLKSWAGEN GROUP: Shut-Out Lawyers File Certiorari Petition
WALLGREENS BOOTS: Bid to Dismiss Illinois Class Action Suit Pending
WALLGREENS BOOTS: Bid to Dismiss Rite Aid Merger Suit Denied
WORKPAC PTY: Colin Biggers Attorney Discusses Class Action Ruling
WV UNIVERSITY: High Court Ruling May Impact Future Class Actions
WV UNIVERSITY: Nelson Mullins Comments on Class Certification
YOON JI-OH: Faces Class Action Over Jang Ja-Yeon Case Donation
YRC INC: Court OKs $700K Class Settlement in Hogue Suit
ZB N.A: 9th Cir. Flips Dismissal of Securities Fraud Suit
[*] Fewer CAFA Notices Than Securities Class Actions Settled
[*] Indian Government Issues Class Action Threshold Limit Rules
[*] U.S. Style Class Action Regime Looms Large in European Union
[*] Volume of Securities Class Actions Rising, Chubb Report Shows
*********
A. FINKL: Faces Class Action Over Illinois BIPA Violation
---------------------------------------------------------
Stephen Mayhew, writing for Biometric Update, reports that a
proposed class action has been brought by a former employee of
Illinois steel maker A. Finkl & Sons Co. over its handprint-based
employee timekeeping system, reports Law360.
The suit is the latest litigation brought under Illinois' Biometric
Information Privacy Act, which makes companies liable for damages
if they fail to properly keep people informed about the use of
their biometric identifiers.
It is alleged that Finkl violated BIPA when it didn't ask employees
for permission to use the handprints or tell them how long the
information would be retained. The suit also claims the company
failed to obtain written releases from employees for the
information and is lacking a written policy outlining how long the
information is kept and when it will be destroyed.
The suit against Finkl also names its timekeeping vendor, ADP LLC,
and claims that Finkl shared the handprints with ADP and other
unnamed parties.
The suit seeks statutory damages of $5,000 per willful or reckless
violation or $1,000 for each negligent violation, plus injunctive
relief and attorneys' fees.
Experts have said that the recent wave of lawsuits under the
decade-old law is due to the increase in popularity of biometric
workforce management solutions. With the recent barrage of
BIPA-related lawsuits brought to Illinois courts, several top
privacy attorneys have discussed what areas defendants should seek
insurance coverage for the potentially high-stakes claims. [GN]
ACE AMERICAN: Court Agrees to Transfer Class Action to Georgia
--------------------------------------------------------------
Gilbert Brosky, Esq. -- gbrosky@bakerlaw.com -- of BakerHostetler,
in an article for JDSupra, reports that much like buying a home,
location can mean everything when defending a class action.
Therefore, it is common for defendants to try and transfer class
actions to what is viewed as a more favorable jurisdiction when
there is at least a significant connection with that forum. When
this happens, courts apply a largely predictable set of factors and
considerations in deciding the motion. Perhaps it should come as no
surprise that these factors become a little less intuitive when
trying to transfer an ERISA class action, at least according to the
recent decision in Mayfield v. ACE American Ins. Co., 18-cv-1695
(W.D. Wash. May 13, 2019).
In Mayfield, the plaintiff was a participant in his employer's
welfare benefit plan, which included accidental death and
dismemberment ("AD&D") insurance. ACE insured the plan's AD&D
benefit. The plaintiff filed a putative ERISA class action lawsuit
against ACE in the Western District of Washington, claiming he and
others did not receive full insurance proceeds upon the death of
covered individuals. ACE moved to transfer the case to the
Northern District of Georgia, originally arguing that Georgia was a
more convenient forum because more putative class members were in
Georgia than Washington, the plan was administered in Georgia, and
ACE had some employees with knowledge of the case in Georgia. On
reply, ACE submitted additional facts and evidence showing that the
plan was negotiated and executed in Georgia.
The court agreed with ACE and transferred the case to the Northern
District of Georgia. The court found that the plaintiff's choice
of forum was of minimal importance because it was a putative class
action. Interestingly, the court seemed to give considerable
weight to the fact that the plan was negotiated and executed in
Georgia, finding this was a "considerable technical connection" to
that forum. The court also found that litigation and travel costs
would be reduced by having the case in Georgia rather than
Washington.
The bottom line: When seeking to transfer an ERISA class action,
don't forget to check where the at-issue plan was negotiated and
executed. It may be the boost you need to get your motion granted.
[GN]
ACUITY BRANDS: Bid to Dismiss Georgia Securities Suit Pending
-------------------------------------------------------------
Acuity Brands, Inc. said in its Form 10-Q Report filed with the
Securities and Exchange Commission on July 2, 2019, for the
quarterly period ended May 4, 2019, that the motion to dismiss
filed in the class action suit entitled, In re Acuity Brands, Inc.
Securities Litigation, Civil Action No. 1:18-cv-02140-MHC (N.D.
Ga.), is still pending.
On January 3, 2018, a shareholder filed a class action complaint in
the United States District Court for the District of Delaware
against the Company and certain of our officers on behalf of all
persons who purchased or otherwise acquired the company's stock
between June 29, 2016 and April 3, 2017. On February 20, 2018, a
different shareholder filed a second class action complaint in the
same venue against the same parties on behalf of all persons who
purchased or otherwise acquired the company's stock between October
15, 2015 and April 3, 2017.
The cases were transferred on April 30, 2018, to the United States
District Court for the Northern District of Georgia and
subsequently were consolidated as In re Acuity Brands, Inc.
Securities Litigation, Civil Action No. 1:18-cv-02140-MHC (N.D.
Ga.).
On October 5, 2018, the court-appointed lead plaintiff filed a
consolidated amended class action complaint (the "Consolidated
Complaint"), which supersedes the initial complaints. The
Consolidated Complaint is brought on behalf of all persons who
purchased our common stock between October 7, 2015 and April 3,
2017 and alleges that the Company and certain of our current
officers and one former executive violated the federal securities
laws by making false or misleading statements and/or omitting to
disclose material adverse facts that (i) concealed known trends
negatively impacting sales of the Company's products and (ii)
overstated our ability to achieve profitable sales growth.
The plaintiff seeks class certification, unspecified monetary
damages, costs, and attorneys' fees.
Acuity Brands said, "We dispute the allegations and intend to
vigorously defend against the claims. We have filed a motion to
dismiss the Consolidated Complaint. Estimating an amount or range
of possible losses resulting from litigation proceedings is
inherently difficult, particularly where the matters involve
indeterminate claims for monetary damages and are in the stages of
the proceedings where key factual and legal issues have not been
resolved. For these reasons, we are currently unable to predict the
ultimate timing or outcome of or reasonably estimate the possible
losses or a range of possible losses resulting from the matters
described above. We maintain Director and Officer insurance
policies that may cover any liability arising out of this
litigation up to the policies’ limits, subject to a self-insured
retention and other terms and conditions."
Acuity Brands, Inc. provides lighting and building management
solutions and services for commercial, institutional, industrial,
infrastructure, and residential applications in North America and
internationally. Acuity Brands, Inc. was founded in 2001 and is
headquartered in Atlanta, Georgia.
ADAMAS PHARMACEUTICALS: Faces Class Action Over 2018 SPO
--------------------------------------------------------
The law firm of Lieff Cabraser Heimann & Bernstein, LLP on June 10
disclosed that class action litigation has been filed on behalf of
investors who purchased the common stock of Adamas Pharmaceuticals,
Inc. ("Adamas" or the "Company") (Nasdaq: ADMS) directly in the
Company's January 24, 2018 secondary public offering ("SPO").
If you purchased Adamas common stock directly in the SPO, you may
move the Court for appointment as lead plaintiff. A lead plaintiff
is a representative party who acts on behalf of other class members
in directing the litigation. Your share of any recovery in the
actions will not be affected by your decision of whether to seek
appointment as lead plaintiff. You may retain Lieff Cabraser, or
other attorneys, as your counsel in the actions.
Adamas investors who wish to learn more about the litigation and
how to seek appointment as lead plaintiff should click here or
contact Sharon M. Lee of Lieff Cabraser toll-free at
1-800-541-7358.
Background on the Adamas Securities Class Litigation
Adamas, incorporated in Delaware and headquartered in Emeryville,
California, is a commercial stage pharmaceutical company that
specializes in developing drug treatment therapies for chronic
neurologic disorders. Adamas's primary product is GOCOVRI, an
extended-release formulation of amantadine (formerly referred to as
ADS-5102), which has been approved by the U.S. Food and Drug
Administration for the treatment of levodopa-induced dyskinesia.
The action alleges the SPO registration statement and prospectus
(collectively, the "Offering Documents") contained untrue
statements and/or omitted material facts required to be stated or
necessary to make statements therein not misleading. Specifically,
the action alleges that Adamas made materially false and misleading
statements in the Offering Documents about known risks and trends
that would dramatically reduce its ability to sell GOCOVRI,
including: (i) that insurers required physicians to obtain prior
authorization before prescribing the drug; (ii) that insurers
required physicians to prescribe cheaper generic alternatives
before seeking prior authorization; (iii) that GOCOVRI is
exorbitantly more expensive than its generic alternatives; and (iv)
that physicians were ambivalent about GOCOVRI's efficacy.
Through its SPO, Adamas sold approximately 3.45 million shares of
its common stock to the investing public at $41.50 per share. On
October 5, 2018, Merrill Lynch released a study of physicians and
subscribers that cast serious doubt on GOCOVRI's ability to achieve
a sizeable market share, and it specifically identified a number of
facts that rendered the Company's statements in the Offering
Documents false or misleading.
On March 4, 2019, Adamas walked back its previous growth estimates
for GOCOVRI, warned of a continued slow-down in prescriptions, and
refused to make further predictions about GOCOVRI's ability to
achieve a sizeable market share. On this news, Adamas's stock fell
$3.99 per share, to close at $8.16 per share on March 5, 2019,
capping off a decline of over 80% in the year following the SPO.
About Lieff Cabraser
With offices in San Francisco, New York, and Nashville, Lieff
Cabraser Heimann & Bernstein, LLP -- http://www.lieffcabraser.com
-- is a nationally recognized law firm committed to advancing the
rights of investors and promoting corporate responsibility.
The National Law Journal has recognized Lieff Cabraser as one of
the nation's top plaintiffs' law firms for fourteen years. In
compiling the list, the National Law Journal examines recent
verdicts and settlements and looked for firms "representing the
best qualities of the plaintiffs' bar and that demonstrated unusual
dedication and creativity." Law360 has selected Lieff Cabraser as
one of the Top 50 law firms nationwide for litigation, highlighting
our firm's "laser focus" and noting that our firm routinely finds
itself "facing off against some of the largest and strongest
defense law firms in the world." In late 2016, Benchmark Litigation
named Lieff Cabraser one of the "Top 10 Plaintiffs' Firms in
America." [GN]
ADIR INTERNATIONAL: Underpays Salespersons, Rodriguez Claims
------------------------------------------------------------
LAUDY RODRIGUEZ, individually and on behalf of all others similarly
situated, Plaintiff v. ADIR INTERNATIONAL, LLC; and DOES 1 through
10, Defendants, Case No. 19STCV20874 (Cal. Super., Los Angeles
Cty., June 13, 2019) is an action against the Defendants for unpaid
regular hours, overtime hours, minimum wages, wages for missed meal
and rest periods.
The Plaintiff Rodriguez was employed by the Defendants as
salesperson.
Adir International LLC, doing business as Curacao, operates a chain
of retail stores. The Company sells electronics, home furnishings,
books, entertainment products, and gifts. Curacao serves customers
worldwide. [BN]
The Plaintiff is represented by:
Grant Joseph Savoy, Esq.
Shoham J. Solouki, Esq.
SOLOUKI SAVOY, LLP
316 W. 2nd Street, Suite 1200
Los Angeles, CA 90012
Telephone: (213) 814-4940
AFNI INC: Feder Alleges FDCPA Violation in New York
---------------------------------------------------
A class action lawsuit has been filed against AFNI, Inc. The case
is styled as Joseph M. Feder, individually and on behalf of all
others similarly situated, Plaintiff v. AFNI, Inc., Defendant, Case
No. 1:19-cv-03938 (E.D. N.Y., July 9, 2019).
The docket of the case states the nature of suit as Consumer Credit
filed pursuant to the Fair Debt Collection Practices Act.
AFNI, Inc. is a consumer collections agency.[BN]
The Plaintiff is represented by:
David M. Barshay, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 706-5055
Email: dbarshay@barshaysanders.com
- and -
Craig B. Sanders, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 281-7601
Email: csanders@barshaysanders.com
AKORN INC: Court Abrogates Settlement in Securities Suits
---------------------------------------------------------
The United States District Court for the Northern District of
Illinois, Eastern Division, issued a Memorandum Opinion and Order
abrogating the Settlement Agreement in the cases captioned SHAUN A.
HOUSE, individually and on behalf of all other similarly situated,
Plaintiff, ROBERT CARLYLE, Plaintiff, DEMETRIOS PULLOS,
individually and on behalf of all other similarly situated,
Plaintiff, v. AKORN, INC.; JOHN N. KAPOOR; KENNETH S. ABRAMOWITZ;
ADRIENNE L. GRAVES; RONALD M. JOHNSON; STEVEN J. MEYER; TERRY A.
RAPPUHN; BRIAN TAMBI; and ALAN WEINSTEIN, Defendants. Nos. 17 C
5018, 17 C 5022, 17 C 5026 (N.D. Ill.).
As the Court has recounted in greater detail in previous opinions,
the Plaintiffs in these cases sued Akorn and members of its board
of directors seeking certain disclosures regarding a proposed
acquisition by Frensenius Kabi AG. After Akorn revised its proxy
statement and issued a Form 8-K, Plaintiffs dismissed their
lawsuits and settled for attorney's fees.
Shortly thereafter, Theodore Frank, an owner of 1,000 Akorn shares,
sought to intervene to object to the attorneys' fee settlement. The
Court eventually denied Frank's motion to intervene, but in light
of Frank's arguments, ordered Defendants to file a brief addressing
whether the Court should exercise its inherent authority to
abrogate the settlement agreements under the standard set forth In
re Walgreen Co. Stockholder Litigation, 832 F.3d 718, 725 (7th Cir.
2016).
SEC Rule 14a-9 requires disclosure in proxy statements of all
material facts necessary in order to make the statements therein
not false or misleading. The Supreme Court has held that an omitted
fact is material if there is a substantial likelihood that a
reasonable shareholder would consider it important in deciding how
to vote.
GAAP Reconciliation
All three plaintiffs sought GAAP reconciliation of the proxy's
projections. Plaintiffs argue that such reconciliation was
necessary because GAAP is the format in which Akorn traditionally
disclosed its financial results.
But it is obvious that a lower projection implies lower net income.
Disclosure of a lower projection already constitutes disclosure of
the company's opinion that the company will earn lower net income.
Plaintiffs do not explain why the specific net income numbers were
material to shareholders' ability to evaluate the merger.
Therefore, the Court finds GAAP reconciliation is not plainly
material.
Components of J.P. Morgan's Analysis
Plaintiffs House and Pullos also sought certain components of J.P.
Morgan's analysis (J.P. Morgan was Akorn's merger advisor): (i) the
inputs and assumptions underlying the calculation of the discount
rate range of 8.0% to 10.0%; (ii) the range of terminal values to
which the growth rate range was applied and (iii) the inputs and
assumptions underlying the calculation of the terminal value growth
rates.
Similarly, Plaintiff Carlyle sought the basis for the growth rate
J.P. Morgan chose. But this information was already in the original
proxy. As to (i), the proxy states that the range of 8.0% to 10.0%
was chosen by J.P. Morgan based upon an analysis of the weighted
average costs of capital of the Company. As to (ii), the proxy
states that the range of terminal values was calculated by applying
terminal value growth rates ranging from 0.0% to 2.0% to the
unlevered free cash flows for the Company during the final year of
the ten-year period of the March 2017 Management Case.As to (iii),
growth rates are simply a choice.
The data sought by House and Pullos was not material to evaluating
the merger proposal. Carlyle's more general demand for certain
internal financial analyses and forecasts prepared by the
management of the Company relating to its business, is even less
material.
J.P. Morgan's Compensation from Akorn
All three plaintiffs sought disclosures regarding J.P. Morgan's
compensation from Akorn and Fresenius. As to J.P. Morgan's specific
compensation figures, Akorn disclosed that information in the
original proxy:
J.P. Morgan received a fee from the Company of $3 million, paid
upon the public announcement of the merger, which will be credited
against any Services Fee. For services rendered in connection with
the merger, the Company has agreed to pay J.P. Morgan an additional
fee equal to 1.0% of the total amount of cash paid to the Company's
common stockholders, immediately prior to the consummation of the
merger the Service Fee, which in this case amounts to approximately
$47 million.
The Plaintiffs argue that this quote is taken out of context and
does not specifically indicate whether the fee is contingent on the
consummation of the merger. The Court has reviewed the context of
this quote and finds that it does not change its meaning. The
amount of potential compensation ($47 million) is abundantly
clear.
J.P. Morgan's Compensation from Fresenius
Although the Plaintiffs do not address it in their current
briefing, they also sought disclosure of the exact amount of money
J.P. Morgan received and may continue to receive from Fresenius
while acting as Akorn's financial advisor. The Court finds the
exact historical payments are not material. And the proxy does not
indicate that J.P. Morgan was continuing to receive payments from
Fresenius in any event.
Upside of the Stand-Alone Strategic Plan
Plaintiff Carlyle sought four additional disclosures not sought by
Plaintiffs House or Pullos. First, Carlyle sought the following
disclosure:
The Proxy also refers to the potential upside in the Company's
stand-alone strategic plan, which the Board purportedly considered
in determining to recommend approval of the Proposed Transaction.
Yet, the Proxy fails to disclose any further information concerning
that stand-alone strategic plan or its potential upside or exactly
why the Board determined it would be in the best interest of the
Company and its shareholders to pursue potential strategic
alternatives rather than a stand-alone strategic plan.
It is apparent from context that stand-alone means Akorn not
merging with another company. The upside of that scenario is also
readily apparent, in that avoiding merger means avoiding the costs
and the relinquishment of control inherent to the merger. The proxy
explains that the Board believed that the Company's stand-alone
strategic plan involved significant risks in light of the industry
and competitive pressures the Company was facing and the Board's
concerns with respect to the risks relating to the Company's
ability to execute on its strategic plan including the possibility
that the strategic plan may not produce the intended results on the
targeted timing or at all. Although the proxy does not detail what
industry risks and competitive pressures" the company faced, it is
sufficient for the Board to express such concerns generally.
That fact casts significant doubt on whether this information was
truly material.
Substance of the March 2017 Projections
Carlyle also sought disclosure of complete information concerning
the substance of the March 2017 projections or the assumptions,
analysis, projections, or conclusions reflected therein and the
financial analyses and forecasts J.P. Morgan reviewed. But
completeness is not the standard. Further, there is presumably a
great deal of information underlying the March 2017 projection on
which the proxies rely. Carlyle does not identify what information
in particular was necessary for shareholders to be able to evaluate
the merger. And again, Carlyle settled without receiving this
information, casting doubt on its materiality.
Other Potential Buyers
Carlyle contends that the proxy should have detailed the other
potential buyers the Board considered and why the Board determined
that it was highly unlikely that any of those counterparties would
be interested in an acquisition of the Company at that time due to
competing strategic priorities and recent acquisitions in the
industry. But this statement speaks for itself regarding why the
Board rejected other companies in the industry as potential buyers.
And as Carlyle notes, the proxy gives much greater detail regarding
the one other company (Company E) Akorn actually considered.
Detailed information about potential buyers Akorn did not actually
consider is not material.
Therefore, the Court finds that the disclosures sought in the three
complaints at issue were not plainly material and were worthless to
the shareholders. Yet, Plaintiffs' attorneys were rewarded for
suggesting immaterial changes to the proxy statement. Akorn paid
Plaintiffs' attorney's fees to avoid the nuisance of ultimately
frivolous lawsuits disrupting the transaction with Frensenius.
The settlements provided Akorn's shareholders nothing of value, and
instead caused the company in which they hold an interest to lose
money. The quick settlements obviously took place in an effort to
avoid the judicial review this decision imposes. This is the racket
described in Walgreen, which stands the purpose of Rule 23's class
mechanism on its head; this sharp practice must end.
The Court rules that the Plaintiffs' cases should have been
dismissed out of hand. Since the Court failed to take that action,
the Court exercises its inherent authority to rectify the injustice
that occurred as a result. The settlement agreements are abrogated
and the Court orders Plaintiffs' counsel to return to Akorn the
attorney's fees provided by the settlement agreements. Plaintiffs'
counsel should file a status report by July 8, 2019 certifying that
the fees have been returned.
A full-text copy of the District Court's June 24, 2019 Memorandum
Opinion and Order is available at https://tinyurl.com/y4g5xmrf from
Leagle.com.
Shaun A. House, Individually and on Behalf of All Others Similarly
Situated, Plaintiff, represented by Lewis S. Kahn --
lewis.kahn@ksfcounsel.com -- Kahn Swick Foti LLC, pro hac vice,
Miles Dylan Schreiner -- mschreiner@monteverdelaw.com -- Monteverde
& Associates PC, pro hac vice & Paul D. Malmfeldt, Blau &
Malmfeldt, 203 North LaSalle StreetSuite 1620Chicago, IL 60601.
Demetrios Pullos, Plaintiff, represented by Lewis S. Kahn, Kahn
Swick Foti LLC, pro hac vice.
Akorn, Inc., John N. Kapoor, Kenneth S. Abramowitz, Adrienne L.
Graves, Ronald M. Johnson, Steven J. Meyer, Terry A. Rappuhn, Brian
Tambi & Alan Weinstein, Defendants, represented by Robert B. Bieck,
Jr., Jones Walker LLP, Alexander Breckinridge, V, Jones Walker LLP,
201 St. Charles Ave.New Orleans, LA 70170- 5100, Anthony C.
Porcelli -- aporocelli@polsinelli.com -- POLSINELLI PC, Robert H.
Baron -- rbaron@cravath.com -- CRAVATH, SWAINE & MOORE LLP, pro hac
vice & Sohil M. Shah -- sshah@polsinelli.com -- Polsinelli, PC.
Theodore H. Frank, Intervenor, represented by M. Frank Bednarz --
frank.bednarz@hlli.org -- Hamilton Lincoln Law Institute-Center for
Class Action.
ALLERGAN: Breast Cancer Survivors Mull Class Action Over Implants
-----------------------------------------------------------------
Avis Favaro, writing for CTV National News, reports that breast
cancer survivors who have textured implants that Health Canada
recently banned due to a rare but serious risk of cancer say they
are terrified and want the devices taken out of their bodies.
Health Canada says removing the implants is unnecessary, but
patients who got them as a result of a previous round of breast
cancer say any risk is too much.
Lynda Simpson from Surrey, B.C. has booked a removal procedure at a
private clinic in September, at a personal cost of $8,000.
"This is my life. This is my health," she said.
Lesley Lee from Sidney, B.C., says that having the implants has
become a constant source of stress, and she often struggles to
sleep.
"Every ache and pain that I feel, there is always that question: is
this normal, or is this cancer-related? And there is a certain
level of normal daily living stress you have as a cancer survivor,"
Lee said.
"And knowing that I have the potential to have cancer in my capsule
tissue right now . . . I am trying to block it out, but it is
there," she added.
Lee is worried that she will have to wait a long time to see a
specialist to discuss her options.
"There have been people who died from this because it has not been
diagnosed and it has metastasized in their body," she said. "If I
have to wait six months to a year to get these things out, I will
have six months of a year not knowing what is happening in my
body."
Textured implants produced by Allergan were pulled from sale by
Health Canada after research found that anaplastic large cell
lymphoma (BIA-ALCL), a rare form of non-Hodgkin lymphoma, is
"significantly higher" in patients with textured breast implants
compared to any types.
The rare form of cancer may develop many months or years after a
breast implant procedure. Dr. Rob Harrop, the president of the
Canadian Society of Plastic Surgeons, says that there are up to 30
known cases of BIA-ALCL in Canada.
Health Canada says there have been no cases of BIA-ALCL reported in
Canada with any smooth surface implant - the most common breast
implant in Canada.
However, the general advice is that women with the textured
implants don't need to remove them, unless they are experiencing
clear signs that cancer is developing, according to Health Canada
and medical groups. Symptoms include breast pain, swelling and
asymmetry.
But that advice isn't sitting well with some women who have already
endured breast cancer and were told the textured implants were
safe.
Patricia Mailman, who had implants put in seven years ago after a
double mastectomy, wants them out as soon as possible but is
worried about the cost.
"I'm just plain scared," she said. "I just don't want the big
C-word again."
"It scares me," she added. "It stresses me out to know that I can't
financially do this but I have to do this in order to be able to
live whatever life I have."
Dr. Julie Khanna, a plastic surgeon based in Oakville, Ont.,
stresses that BIA-ALCL is a rare disease and notes that surgery is
not being recommended by Health Canada or any other national health
organization.
"No one has to do surgery," she said.
"If you're comfortable with your implants, you've seen your doctor,
there's no concerns, there is no reason you need to run in to have
an operation," she added.
Dr. Khanna said she worries that some doctors promising full
removal of implants may be "playing on our patients fears."
"Patients are being told they have to travel, leave their homes and
pay extra for this service," she said. "I want to make sure all
Canadian women make safe choices."
Some women say they are considering suing the implant-maker for
compensation for distress and removal of the implants with some
lawyers now considering filing class-action lawsuits on their
behalf.
The implants have been taken off shelves in several European
countries but still remain available in the U.S.
In a statement to CTV News, Allergan officials said that the
company plans to "explore options to appeal this decision with
Health Canada" and considers the agency's decision to ban the sale
of their textured implants to be misguided.
"There has been no new clinical evidence reviewing the benefit /
risk profile of textured breast implants," the company said.
Allergan said anyone concerned about the risks of textured breast
implants should discuss the matter with their plastic surgeon or
other health-care professionals. [GN]
ALLTRAN FINANCIAL: Deutsch Suit Asserts FDCPA Breach
----------------------------------------------------
A class action lawsuit has been filed against Alltran Financial,
LP. The case is styled as Naftela Deutsch, individually and on
behalf of all others similarly situated, Plaintiff v. Alltran
Financial, LP, Defendant, Case No. 1:19-cv-03952 (E.D. N.Y., July
9, 2019).
The docket of the case states the nature of suit as Consumer Credit
filed pursuant to the Fair Debt Collection Practices Act.
Alltran Financial LP is a Houston based provider of recovery and
receivables services.[BN]
The Plaintiff is represented by:
David M. Barshay, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 706-5055
Email: dbarshay@barshaysanders.com
- and -
Craig B. Sanders, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 281-7601
Email: csanders@barshaysanders.com
ALLTRAN FINANCIAL: Greenzweig Files FDCPA Suit in New York
----------------------------------------------------------
A class action lawsuit has been filed against Alltran Financial,
LP. The case is styled as Relly Greenzweig, individually and on
behalf of all others similarly situated, Plaintiff v. Alltran
Financial, LP, Defendant, Case No. 1:19-cv-03954 (E.D. N.Y., July
9, 2019).
The docket of the case states the nature of suit as Consumer Credit
filed pursuant to the Fair Debt Collection Practices Act.
The Plaintiff is represented by:
David M. Barshay, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 706-5055
Email: dbarshay@barshaysanders.com
- and -
Craig B. Sanders, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 281-7601
Email: csanders@barshaysanders.com
AMAZING CARE: Underpays Health Service Workers, Badon Alleges
-------------------------------------------------------------
ANTHONY BADON, individually and on behalf of all others similarly
situated, Plaintiff v. AMAZING CARE SERVICES, LLC; NOELL BERRY; and
JOLANDA BERRY, Defendants, Case No. 2:19-cv-11279-CJB-KWR (E.D.
La., June 19, 2019) seeks to recover from the Defendant unpaid
wages and overtime compensation, interest, liquidated damages,
attorneys' fees, and costs under the Fair Labor Standards Act.
Mr. Badon was employed by the Defendants as a direct service worker
providing home health service.
Amazing Care Services, LLC a Louisiana limited liability company
authorized to and doing business in the Parish of Orleans, State of
Louisiana that provides home health care and related services to
clients in the Greater New Orleans Area. [BN]
The Plaintiff is represented by:
Jody Forester Jackson, Esq.
Mary Bubbett Jackson, Esq.
JACKSON+JACKSON
201 St. Charles Avenue, Suite 2500
New Orleans, LA 70170
Telephone: (504) 599-5953
Facsimile: (888) 988-6499
E-mail: jjackson@jackson-law.net
mjackson@jackson-law.net
AMERICAN BOTTLING: Fails to Pay Proper Wages, Dibenedetto Says
--------------------------------------------------------------
MARK DIBENEDETTO, individually and on behalf of all others
similarly situated, Plaintiff v. AMERICAN BOTTLING COMPANY,
Defendant, Case No. 5:19-cv-00296-JSM-PRL (5th Cir., Marion Cty.,
June 14 2019) seeks to recover from the Defendant unpaid wages and
overtime compensation, interest, liquidated damages, attorneys'
fees, and costs under the Fair Labor Standards Act.
The Plaintiff Dibenedetto was employed by the Defendants as
non-exempt employee.
American Bottling Company maintained a place of business in Ocala,
Marion County, Florida. [BN]
The Plaintiff is represented by:
Edwin A. Green, III, Esq.
BLANCHARD, MERRIAM, ADEL & KIRKLAND, P.A.
Post Office Box 1869
Ocala, FL 34478
Telephone: (352) 732-7218
Facsimile: (352) 732-0017
E-mail: tgreen@bmaklaw.com
lcaldwell@bmaklaw.com
AMERICAN FEDERATION: NRWLDF Fights Unions' Coercive Tactics
-----------------------------------------------------------
National Right to Work Legal Defense Foundation disclosed that
although the U.S. Supreme Court has ruled that forced union fees
for public sector workers are unconstitutional, much work remains
before civil servants are free from union bosses' coercion.
In the landmark victory in Janus v. AFSCME (The American Federation
of State, County and Municipal Employees) in June 2018, briefed and
argued by Foundation staff attorneys, the Supreme Court ruled that
charging any government employee union fees as a condition of
employment violates the First Amendment. The Court also affirmed
that unions may only collect fees when an employee gives clear and
affirmative consent.
Already, Foundation staff attorneys are litigating more than 25
lawsuits from California to New Jersey to enforce the Janus
decision, and new requests from public employees for assistance in
enforcing their Janus rights continue to stream in.
Civil Servants Fight Union Bosses' ‘Window Period' Schemes
Despite the Supreme Court's ruling, union officials seek to
maintain their forced-fees coffers by stifling the rights of the
workers they claim to represent. Foundation attorneys have filed
several class action lawsuits challenging union officials' "window
period" schemes, arbitrary windows of time limiting when employees
can exercise their First Amendment right to refrain
from subsidizing a union.
Two such cases (see page 1) have already settled in favor of the
workers challenging union attempts to trap them in forced dues, but
in the others union bosses still refuse to back down from their
coercive schemes.
In New Mexico, David McCutcheon, an IT technician at New Mexico's
Department of Information Technology, was forced to pay union fees
as a nonmember before Janus. After the Foundation's victory,
McCutcheon informed Communication Workers of America (CWA) union
officials that under the First Amendment they could no longer force
him to financially support the union.
Instead, union officials began charging him full union membership
dues without his permission. To add insult to injury, union
officials told McCutcheon that he could only stop the unauthorized
deductions during a two-week "window period" in December.
McCutcheon sought free legal aid from Foundation staff attorneys,
who filed a class action lawsuit in federal court. The class action
complaint asks that the court strike down the unconstitutional
"window period" scheme, and order the union to refund the
membership dues and fees seized from McCutcheon and the likely
hundreds of other public employees in New Mexico who have been
similarly victimized during the past three years.
In two other cases, California teachers are fighting similar
"window period" schemes with free aid from Foundation attorneys.
Ventura County math professor Michael McCain is challenging the
American Federation of Teachers union-created fifteen day "window
period" policy in a class action lawsuit.
Union officials never informed McCain of his First Amendment right
to refrain from supporting a union, making it impossible for him to
have waived his rights as Janus requires. After Janus, McCain
resigned union membership and made it clear in a letter that he
does not consent to dues deductions. His lawsuit asks that the
court strike down the "window period" scheme and stop forcing dues
from him and potentially hundreds of other public employees.
Los Angeles kindergarten teacher Irene Seager filed another class
action lawsuit, this one against United Teachers Los Angeles to
challenge a 30-day "window period" scheme. Her lawsuit also
challenges a California state law which allows the union to enforce
the restrictive policy.
"Union officials have a long history of manipulating ‘window
period' schemes and other obstacles designed to block individuals
from exercising their constitutional rights," said Patrick Semmens,
vice president of the National Right to Work Foundation. "Despite
what union bosses say, First Amendment rights cannot be limited to
mere days out of the year."
Foundation attorneys are also litigating other class action
lawsuits to reclaim years' worth of union fees seized without
consent before Janus. Together, the lawsuits seek refunds totaling
more than $170 million. [GN]
AMERICAN MEDICAL: Faces Class Actions Over Data Breach
------------------------------------------------------
Marianne Kolbasuk McGee, writing for HealthInfoSec, reports that a
flurry of class action lawsuits has already been filed by
individuals alleging they have been injured by a data breach at
American Medical Collection Agency, which impacted more than 20
million patients of at least three medical laboratory testing
firms.
As of June 10, more than a dozen class action lawsuits had already
been filed in several U.S. federal courts within one week of news
breaking of an "unauthorized access" breach at AMCA that affected
information of nearly 12 million Quest Diagnostics patients; 7.7
million LabCorp patients, and nearly 423,000 BioReference
Laboratories patients.
Each of those three medical testing laboratory companies disclosed
on June 3 being impacted by the AMCA breach in individual 8-K
filings with the Securities and Exchange Commission.
In Quest Diagnostics' situation, the Secaucus, N.J.-based firm said
AMCA provides billing collections services to revenue cycle
management firm Optum360, which is a Quest contractor.
The lawsuits include class action complaints naming all of the
companies as defendants. In a few cases, lawsuits were filed naming
AMCA and only one or two of the medical testing firms, and/or
Optum360 as defendants.
Lawsuits' Allegations
What the lawsuits all have in common are allegations by plaintiffs
-- patients of the labs whose information at some point had been
turned over to AMCA for bill collecting -- who say they've been
harmed by the AMCA data breach.
"When certain customers do not pay their invoices within the
requested time period, Quest will reach out to Optum360, who will
provide information to AMCA to collect the balance," one of the
complaints against AMCA, Quest Diagnostics, Optum360 LabCorp, and
BioReference notes.
"Consumers place value in data privacy and security. However,
defendants failed to take all necessary precautions to secure the
personal information given to them by consumers," the complaint
notes.
"Defendants . . . had a duty to plaintiff and class members to
properly secure personal information, encrypt and maintain such
personal information using industry standard methods, utilize
available technology to defend its systems from invasion, act
reasonably to prevent foreseeable harms to plaintiff and class
members," that complaint filed June 7 in a New York federal court
notes.
"Defendants had the resources necessary to prevent the data breach
but neglected to adequately invest in security measures, despite
their obligation to protect such information," the suit alleges.
The lawsuits allege a variety of claims, including negligence and
breach of implied contract by the defendants in failing to protect
the personal information of those individuals impacted by the data
breach.
"The filing of these class action lawsuits will also likely result
in the turning over documents and materials concerning the
information security practices of the organizations, the
relationships between the parties and results of investigations
into who knew what and when." -- David Holtzman, CynergisTek
Collectively, the lawsuits also allege a variety of state law
violations, including the New York General Business Law, the
Florida Deceptive and Unfair Business Practices Act, and the
California Medical Information Act.
Among other things, the various lawsuits are seeking damages,
penalties, and other monetary relief for those impacted by the
breach.
AMCA Account
According to the SEC filings of the breached companies, AMCA says
it learned from a third-party security firm of unauthorized
activity on AMCA's web payment page occurring between August 1,
2018, and March 30, 2019.
"Upon receiving information from a security compliance firm that
works with credit card companies of a possible security compromise,
we conducted an internal review, and then took down our web
payments page," an AMCA spokesman tells Information Security Media
Group.
"We hired a third-party external forensics firm to investigate any
potential security breach in our systems, migrated our web payments
portal services to a third-party vendor and retained additional
experts to advise on, and implement, steps to increase our systems'
security. We have also advised law enforcement of this incident,"
he says.
According to a breach report AMCA filed to North Carolina's
attorney general, for which ISMG was provided a copy, AMCA says it
discovered the "hacker/unauthorized access" breach on March 20.
AMCA says in the report that security measures had been previously
taken to protect the data that was compromised.
"Certain information was encrypted. However the encryption keys
were compromised," the report notes.
According to the SEC filings of the companies impacted by the AMCA
breach, potentially compromised data includes patients' healthcare
and financial information, ranging from name, date of birth,
address, phone, date of service, provider, balance information, and
in some cases bank account information and Social Security
numbers.
"Data breaches and identity theft have a crippling effect on
individuals and detrimentally impact the entire economy as a
whole," one of the class action complaints against AMCA and the
other companies notes. "Medical databases are especially valuable
to identity thieves."
Prognosis of Suits
The lawsuits filed so far are the first of many more that will
undoubtedly get lodged against the AMCA and the other companies,
some legal experts predict.
"Time will tell whether these ... class action lawsuits have
merit," says privacy attorney David Holtzman of security
consultancy CynergisTek.
"Class action litigators will often file lawsuits containing
general allegations and claims of damage as part of a
'first-in-line' strategy that they believe will benefit their
clients as well as enhance any attorney's fees that might be
awarded," he notes.
"The filing of these class action lawsuits will also likely result
in the turning over documents and materials concerning the
information security practices of the organizations, the
relationships between the parties and results of investigations
into who knew what and when."
Government Scrutiny
In addition to the class action lawsuits being filed, AMCA and the
affected healthcare companies are also facing intense scrutiny by
state regulators and some members of Congress in the wake of the
breach.
As least six state attorneys general -- in Michigan, New York,
Minnesota, North Carolina, Illinois and Connecticut -- have said
their offices are investigating the breach.
Also, New Jersey's two U.S. senators on June 5 sent a letter to New
Jersey-based Quest Diagnostics demanding answers about the AMCA
breach.
On a federal level, the breach case involving AMCA also brings to
light issues involving HIPAA covered entities and business
associate relationships, notes privacy attorney Iliana Peters of
the law firm Polsinelli.
"I think the most important issue moving forward from both a
litigation and regulatory standpoint is the HIPAA business
associate liability, which stems from the vendor/HIPAA business
associate relationship here and in many other cases about which
state and federal regulators are investigating," she says.
The Department of Health and Human Services' Office for Civil
Rights recently issued guidance on business associate liability,
she notes. "It does seem like an issue that at least OCR is
particularly interested in from an enforcement perspective. I will
be particularly interested to see if the issue also comes up with
state regulators or with litigation moving forward."
Early Lessons
In the meantime, important lessons, especially about vendor
security risk management are already emerging from the breach,
despite scant details being revealed by AMCA about the incident so
far.
"The key lessons to be learned are that healthcare organizations
must perform risk based assessments of vendors' information
security practices and safeguards," Holtzman says. "The more access
an organization has to your information system or the sensitivity
of the data, the more comprehensive and thorough the examination."
In addition, as Quest Diagnostics' relationship with Optum360 --
which used AMCA for bill collecting -- illustrates, downstream
vendors handling sensitive data must also be closely scrutinized,
Holtzman says.
"Ask your vendor or contractors to identify and perform vendor
management assessment of the subcontractors or vendors they hire to
create or maintain your organization's personally identifiable
data," he says.
"Ensure that all vendor agreements include provisions for what
types of incidents have to be reported your healthcare organization
and when that notification must be provided. Equally important is
specifying in your vendor contract how information about incidents
involving subcontractors are reported to you and rights to obtain
information or investigate such incidents." [GN]
AMP: Maurice Blackburn Files Another Class Action Over Fund Fees
----------------------------------------------------------------
Sol Dolor, writing for Australasian Lawyer, reports that Maurice
Blackburn has filed another class action against AMP, seeking
redress for super fund members who are alleged to have been cheated
through "unreasonable fees."
The filing, made in Federal Court in Melbourne, comes after Maurice
Blackburn won against four other law firms that sought to lead a
separate shareholder class action against AMP.
The lawsuit stems from revelations from the Royal Commission into
Misconduct in the Banking, Superannuation and Financial Services
Industry, which found that "AMP's superannuation funds were
charging uncompetitive administration fees, with high costs
exceeding returns and causing investment losses in some instances,"
Maurice Blackburn said.
The class action alleges that "AMP trustees, whose duty was to act
in the best interests of members, failed to monitor, compare,
negotiate or seek reductions of hefty fees being pocketed by
related AMP Group companies," the firm said.
Maurice Blackburn estimates that more than two million accounts
were impacted by the alleged misconduct, said Brooke Dellavedova,
principal lawyer.
AMP said that the proceeding "will be vigorously defended."
In May, Maurice Blackburn was given the go-ahead by New South Wales
Supreme Court Chief Judge in Equity, the Hon Justice Julie Ward, to
lead a separate shareholder class action against AMP. She said that
the "no win, no fee" approach proposed by Maurice Blackburn was a
key factor in the decision.
Last year, Quinn Emanuel Urquhart & Sullivan was first to announce
that it was looking at filing a shareholder class action against
AMP. The suit was backed by Burford Capital.
Not long after, Phi Finney McDonald entered the fray with a lawsuit
funded by IMF Bentham.
Shine Lawyers partnered with Augusta Ventures to also file a
class-action suit against AMP.
Slater and Gordon also launched a class action against AMP last
year with the backing of litigation funder Therium. It later
consolidated its suit with the Maurice Blackburn shareholder class
action, electing for the latter to solely run the litigation.
The decision to stay all but one of the shareholder class actions
against AMP comes after the Full Court of the Federal Court of
Australia's ruling last year on competing class actions against
GetSwift. Quinn Emanuel said then that the ruling would be
consequential to competing class actions in the country. [GN]
ARS NATIONAL: Deutsch Alleges Violation under FDCPA
---------------------------------------------------
A class action lawsuit has been filed against ARS National
Services, Inc. The case is styled as Naftela Deutsch and Baila
Deutsch, individually and on behalf of all others similarly
situated, Plaintiffs v. ARS National Services, Inc., Defendant,
Case No. 1:19-cv-03973 (E.D. N.Y., July 10, 2019).
The docket of the case states the nature of suit as Consumer Credit
filed pursuant to the Fair Debt Collection Practices Act.
ARS National Services, Inc. is a financial institution in
Escondido, California.[BN]
The Plaintiffs are represented by:
Craig B. Sanders, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 281-7601
Email: csanders@barshaysanders.com
ASH SOUNDS: Settles Falls Festival Stampede Victims' Class Action
-----------------------------------------------------------------
Michael Fowler, Anthony Colangelo and Erin Pearson, writing for The
Age, report that Falls Festival has reached a settlement with the
first members of what is expected to be a multi-million dollar
class action following a crowd crush at the 2016 event that led
some attendees to believe they would die.
On the eve of the 76-person class action heading to trial in the
Supreme Court, festival organisers Ash Sounds Pty Ltd agreed to
payouts for six attendees who were suing for "significant injury".
Maddens Lawyers, who are leading the class action, said they expect
Ash Sounds Pty Ltd to settle with the remaining claimants before
the next court date in September.
That includes up to 25 people also intending to claim for
significant injury -- generally defined as sustained serious pain
and suffering.
Maddens Lawyers senior principal Brendan Pendergast has previously
said he was expecting each significant injury claim to attract a
six-figure payout. Successful "significant injury" claims can
exceed $200,000, meaning Falls Festival could face a payout bill of
several million dollars.
On December 30, 2016, hundreds of festival attendees became caught
in a crush as they rushed from an indoor tent to another stage at
the annual Lorne event.
Twenty-nine people were hospitalised and Ambulance Victoria
assessed 80 people at the scene.
In May Justice Michael McDonald ordered the cases of six festival
attendees who had acquired medical certification of "significant
injury" to proceed to a judge-only trial from mid-June.
However it was revealed on June 11 that the six claimants had
settled, with the next court date set for September 10.
Mr Pendergast said he was optimistic each of the remaining class
action members would reach settlements "fairly shortly".
"The balance is not resolved, but we believe there are some quite
active negotiations under way between the parties now," he said.
Those not suing for significant injury could receive between $3000
and $10,000 for medical expenses, loss of income or loss of
property.
Injuries to people caught in the crush included open fractures,
permanent scarring and psychological impact, the court previously
heard.
Ash Sounds Pty Ltd admitted negligence in November, but were unable
to agree on payouts until now.
Mr Pendergast said many of the members of the class action
experienced a "terrifying event".
"The problem with serious injury settlements is a substantial sum
of money does assist, and is sometimes of enormous assistance, but
it doesn't overwrite the injury or correct the problem," he said.
"The six claimants are relieved there's been a resolution, but
unfortunately it can never be a complete fix."
Those six people were paid different amounts depending on their
individual cases, according to Mr Pendergast.
A Falls Festival spokeswoman said: "As the proceedings are still
ongoing, we are not in a position to comment further."
Olivia Jones, 19, previously said she thought she was going to die
during the stampede. She had bruised ribs, legs and deep cuts to
her knee.
"There were people lying there, unconscious, not moving. I thought
the people around me were dead," she said.
Melbourne woman Michela Joy Burke, lead plaintiff of the class
action, lost feeling in her arm immediately after the crush.
"She has a condition with the nerves in one of her arms, which
prohibits her from physical activity," her lawyer Min Guo
previously told court.
Mr Pendergast said Ms Burke's injuries have not been deemed
"significant", and she has not yet reached a settlement with Ash
Sounds Pty Ltd. [GN]
AUSTIN, TX: More Women Plan to Join Sexual Assault Class Action
---------------------------------------------------------------
Sarah Marloff, writing for The Austin Chronicle, reports that more
women have come forward to add their names if a new complaint is
filed in the ongoing sexual assault survivors' lawsuit against the
city of Austin, Travis County, local law enforcement, and the
District Attorney's Office, according to Jennifer Ecklund, one of
three attorneys representing the survivors in the class action.
Ecklund, with her co-counsel Elizabeth Myers and local survivor
Hanna Senko (who is currently not a plaintiff in the suit),
presented to the city's Public Safety Commission on June 3 at the
behest of its Vice Chair Rebecca Webber. Currently, eight named
plaintiffs are awaiting U.S. District Judge Lee Yeakel's ruling on
the defendants' motions to dismiss, which was heard in December.
Since the case was originally filed in June 2018, Ecklund said,
"between 75 and 100 women have called us" regarding the handling of
their cases by police or the D.A.'s Office. The attorneys also
addressed D.A. Margaret Moore's insistence at February's PSC
meeting that the data surrounding sexual assault in Austin is
"highly unreliable for many different reasons" (as Moore also told
the Chronicle in January). Ecklund told commissioners that the data
cited in the lawsuit came directly from the D.A.'s Office and the
Austin Police Department, via a grant from *Office of Violence
Against Women and the U.S. Department of Justice, which funded the
Community Needs Assessment conducted by the Austin/Travis County
Sexual Assault Response and Resource Team in April 2018. The suit
also uses data pulled from another grant that funded the D.A.'s
Intimate Partner Sexual Assault Prosecution Unit -- which was
secured before Moore's election -- as well as FBI and court
reports. Admitting that the data isn't "flattering" -- or an
"apples-to-apples" comparison -- Ecklund insisted that doesn't mean
it's not accurate. "The fact of the matter is sexual assault cases
are not being filed and are not being prosecuted. . . . Virtually
no rapists are going to jail." This, she concluded, "is a public
safety crisis."
The attorneys, noting that the lawsuit is the only official way
rape survivors can ask the system to "please do better," shared
with the PSC a list of suggested solutions, including more
transparency, an audit of the D.A.'s Office, training for
prosecutors on how to prove lack of consent to juries, specialized
courts for sexual assault, obtaining survivor feedback, and "maybe
most obviously, we've got to try cases," said Ecklund. [GN]
BANK OF AMERICA: Durrani et al. Seek OT Premium Pay
---------------------------------------------------
A class action complaint has been filed against Bank of America,
N.A. for alleged violations of the Fair Labor Standards Act, the
New York Labor Law, the New Jersey State Wage and Hour Law, the
Pennsylvania Minimum Wage Act, the Washington Minimum Wage Act, and
the Illinois Minimum Wage Law. The case is captioned AISHA DURRANI,
JULIA STUHLTRAGER, MELVIN RODRIGUEZ, JACOB SAVAGE, and MELISSA
BROWN, on behalf of themselves and all others similarly situated,
Plaintiffs, against BANK OF AMERICA, N.A., Defendants, Case No.
513752/2019 (N.Y. Sup., Kings Cty., June 20, 2019).
Plaintiffs allege that the Defendant has intentionally, willfully,
and repeatedly engaged in a pattern, practice, and/or policy of
violating the FLSA and several wage and hour state laws by failing
to pay Plaintiffs overtime wages for hours that they worked in
excess of 40 hours per workweek and by failing to record all of the
time that its employees have worked for the benefit of Defendant.
Bank of America, N.A. is a nationally chartered banking association
headquartered in Charlotte, North Carolina doing business as a
bank, mortgage lender, and financial institution nationwide and
within the State of New York. [BN]
The Plaintiffs are represented by:
Justin M. Swartz, Esq.
Deirdre Aaron, Esq.
Chauniqua D. Young, Esq.
OUTTEN & GOLDEN LLP
685 Third Avenue, 25th Floor
New York, NY 10017
Telephone: (212) 245-1000
- and -
Gregg I. Shavitz, Esq.
Paolo C. Meireles, Esq.
Logan A. Pardell, Esq.
SHAVITZ LAW GROUP, P.A.
951 Yamato Rd, Suite 285
Boca Raton, FL 33431
Telephone: (561) 447-8888
BE AMAZED: Court Extend Time to Respond to Complaint in Lynch Suit
------------------------------------------------------------------
The United States District Court for the District of Nevada
extended the Defendants' time up to and including July 22, 2019 to
answer or otherwise respond to Plaintiff's Complaint in the case
captioned DALLAS LYNCH, on behalf of herself and all others
similarly situated; Plaintiff, v. BE AMAZED SANDWICH CO., INC.
d/b/a AND a/k/a CAPRIOTTI'S SANDWICH SHOP; MICHAEL SOLOMON, an
individual; DOES 1 through 50; inclusive, Defendant(s). Case No.
2:18-cv-2425-APG-GWF. (D. Nev.).
The Complaint sets forth a purported wage and hour class action.
The Defendants are in the process of submitting a new settlement
proposal to Plaintiff. The Defense counsel will be on vacation Tune
25, July 4, and additional time will be needed for discussions and
negotiations.
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/yy7ybma5 from Leagle.com.
Dallas Lynch, Plaintiff, represented by Christian James Gabroy,
Gabroy Law Offices & Kaine M. Messer, Gabroy Law Offices, One North
La salle Street, Suite 1775, Chicago, IL 60602
Be Amazed Sandwich Co., Inc., also known as Capriotti's Sandwich
Shop & Michael Solomon, Defendants, represented by Scott M. Mahoney
-- smahoney@fisherphillips.com -- Fisher & Phillips, LLP.
BEAUTYHABIT INC: Dawson Suit Alleges ADA Violation
--------------------------------------------------
Beautyhabit, Inc. is facing a class action lawsuit filed pursuant
to the Americans with Disabilities Act. The case is styled as
Leshawn Dawson, on behalf of himself and all others similarly
situated, Plaintiff v. Beautyhabit, Inc., Defendant, Case No.
1:19-cv-06361 (S.D. N.Y., July 9, 2019).
Beautyhabit offers the essentials--skincare, beauty, hair products,
fragrances, cosmetics, bath, candles, and baby care.[BN]
The Plaintiff is represented by:
Joseph H Mizrahi, Esq.
Cohen & Mizrahi LLP
300 Cadman Plaza West, 12th Floor
Brooklyn, NY 11201
Tel: (929) 575-4175
Fax: (929) 575-4195
Email: joseph@cml.legal
BOEING: Levi & Korsinsky Seek Stock Drop Suit Lead Counsel Role
---------------------------------------------------------------
Law360 reports that Levi & Korsinsky LLP pushed unopposed for the
top spot in an investor's proposed class action accusing Boeing of
hiding safety problems with its 737 Max jets, telling an Illinois
federal Court on June 7 that it is well qualified to represent a
class of investors as lead counsel. The firm also requested that
investor Ali Alibrahim be appointed lead plaintiff and asked to
consolidate the case with a similar suit filed in late May in the
same court. [GN]
BRIGHAM-GILL: Underpays Salespersons, Gorski Suit Alleges
---------------------------------------------------------
KEITH GORSKI, individually and on behalf of all others similarly
situated, Plaintiff v. BRIGHAM-GILL MOTORCARS, INC.; JOSEPH F.
GILL; and GINGER THOMAS, Defendants, Case No. 19-1697 (Mass.
Super., Middlesex Cty., June 13, 2019) is an action against the
Defendant's failure to pay the Plaintiff and the class overtime
compensation for hours worked in excess of 40 hours per week.
The Plaintiff Gorski was employed by the Defendants as
salesperson.
Brigham-Gill Motorcars, Inc. is a company operating a car
dealership and selling vehicles with a business located at
Worcester Road, Natick, MA 01760. [BN]
The Plaintiff is represented by:
Raven Moeslinger, Esq.
Nicholas F. Ortiz, Esq.
David T. Musen, Esq.
LAW OFFICE OF NICHOLAS F. ORTIZ, P.C.
99 High Street, Suite 304
Boston, MA 02110
Telephone: (617) 338-9400
E-mail: rm@mass-legal.com
nfo@mass-legal.com
dtm@mass-legal.com
CALIFORNIA PUBLIC: Faces Class Action Over LT Insurance Policy
--------------------------------------------------------------
Elizabeth Newman, writing for McKnight's, reports that the
often-maligned long-term care insurance industry could be in line
for another major blackeye soon in a California courtroom.
The California Public Employees' Retirement System violated its
long-term care insurance policy terms when it increased premiums by
85%, first implemented in 2015, according to plaintiffs in a
class-action lawsuit. The lawsuit does not address rate increases
in 2003, 2007, 2010, 2011, 2012, 2013 and 2014.
The trial, which could affect up to 100,000 seniors who had the
CalPERS plan, began on June 10. While CalPERS General Counsel says
the system's contract allowed it to raise the rates, the plaintiffs
allege the seniors sustained around $1.2 billion in costs from
damages from the increased premiums and other costs associated with
the increases, the Fresno Bee reported on June 9. Class members are
California citizens who purchased an LTC policy from CalPERs
between 1995 and 2004 and subjected to the 85% increase.
"These people were completely, completely misled," Michael Bidart,
an attorney representing the plaintiffs, told the newspaper.
Providers are generally in favor of a more robust LTC insurance
presence because of its ability to bring in non-public funding.
Attorneys representing the seniors first filed in 2013, after
CalPERS notified about the rate hikes. CalPERS began selling the
plans, which include nursing home coverage, in 1995, and advertised
them as 30% cheaper than similar plans, the newspaper reported.
CalPERS isn't alone in its apparent financial struggles. Genworth
said this year it has lost about $3.1 billion from its long-term
care policies, and the market for long-term care insurance plans
has dropped dramatically. Around 100 companies offered standalone
policies in 2002, and today the number is around 17.
The trial in Los Angeles County Superior Court has been broken into
parts. More information is available at the Fresno Bee and at
http://www.calpersclassactionlawsuit.com[GN]
CARMAX INC: Wage & Hour Class Suits Continue in Calif.
------------------------------------------------------
CarMax, Inc. said in its Form 10-Q Report filed with the Securities
and Exchange Commission on July 3, 2019, for the quarterly period
ended May 31, 2019, that the company continues to defend
wage-and-hour class action lawsuits in California.
CarMax entities are defendants in four proceedings asserting wage
and hour claims with respect to CarMax sales consultants and
non-exempt employees in California.
The asserted claims include failure to pay minimum wage, provide
meal periods and rest breaks, pay statutory/contractual wages,
reimburse for work-related expenses and provide accurate itemized
wage statements; unfair competition; and Private Attorney General
Act claims.
On September 4, 2015, Craig Weiss et al., v. CarMax Auto
Superstores California, LLC, and CarMax Auto Superstores West
Coast, Inc., a putative class action, was filed in the Superior
Court of California, County of Placer.
The Weiss lawsuit seeks civil penalties, fines, cost of suit, and
the recovery of attorneys' fees.
On June 29, 2016, Ryan Gomez et al. v. CarMax Auto Superstores
California, LLC, and CarMax Auto Superstores West Coast, Inc., a
putative class action, was filed in the Superior Court of the State
of California, Los Angeles.
The Gomez lawsuit seeks declaratory relief, unspecified damages,
restitution, statutory penalties, interest, cost and attorneys'
fees.
On October 31, 2017, Joshua Sabanovich v. CarMax Superstores
California, LLC et. al., a putative class action, was filed in the
Superior Court of California, County of Stanislaus.
The Sabanovich lawsuit seeks unspecified damages, restitution,
statutory penalties, interest, cost and attorneys' fees.
On November 21, 2018, Derek Mcelhannon et al v. CarMax Auto
Superstores California, LLC and CarMax Auto Superstores West Coast,
Inc., a putative class action, was filed in Superior Court of
California, County of Alameda.
On February 1, 2019, the Mcelhannon lawsuit was removed to the U.S.
District Court, Northern District of California, San Francisco
Division.
The Mcelhannon lawsuit seeks unspecified damages, restitution,
statutory and/or civil penalties, interest, cost and attorneys'
fees.
CarMax said, "Based upon our evaluation of information currently
available, we believe that the ultimate resolution of the foregoing
proceedings will not have a material adverse effect, either
individually or in the aggregate, on our financial condition,
results of operations or cash flows."
CarMax, Inc., through its subsidiaries, operates as a retailer of
used vehicles in the United States. The company operates in two
segments, CarMax Sales Operations and CarMax Auto Finance. CarMax,
Inc. was founded in 1993 and is based in Richmond, Virginia.
CHIPOTLE MEXICAN: Has Made Unsolicited Calls, Johnson Alleges
-------------------------------------------------------------
KAREN JOHNSON, individually and on behalf of all others similarly
situated, Plaintiff v. CHIPOTLE MEXICAN GRILL, Defendant, Case No.
3:19-cv-03506 (N.D. Cal., June 19, 2019) seeks to stop the
Defendants' practice of making unsolicited calls.
Chipotle Mexican Grill, Inc., together with its subsidiaries,
operates Chipotle Mexican Grill restaurants. As of December 31,
2018, it operated 2,491 restaurants, including 2,452 Chipotle
restaurants in the United States, 37 Chipotle restaurants
internationally, and two non-Chipotle restaurants. The company was
founded in 1993 and is headquartered in Newport Beach,
California.[BN]
The Plaintiff is represented by:
David S. Ratner, Esq.
DAVID RATNER LAW FIRM, LLP
33 Julianne Court
Walnut Creek, CA 94595
Telephone: (917) 900-2868
Facsimile: (925) 891-3818
- and -
Rachel Kaufman, Esq.
KAUFMAN P.A.
400 NW 26th Street
Miami, FL 33127
Telephone: (305) 469-5881
E-mail: rachel@kaufmanpa.com
CLEAN ENERGY: Calif. Court Dismisses Bryant TCPA Suit
-----------------------------------------------------
Judge Yvonne Gonzalez Rogers of the U.S. District Court for the
Northern District of California, San Francisco Division, dismissed
in its entirety the case, JOVETTE BRYANT and NECOLE FRANKLIN,
individually and on behalf of all others similarly situated,
Plaintiffs, v. CLEAN ENERGY EXPERTS, LLC dba SOLAR RESEARCH GROUP,
a California Limited Liability Company; and DOE INDIVIDUALS,
inclusive, and each of them, Defendants, Case No. 4:19-cv-00460-YGR
(N.D. Cal.), including any and all claims alleged therein, with
prejudice to the Plaintiffs' individual claims and without
prejudice to the class claims pursuant to Federal Rule of Civil
Procedure 41(a)(1)(A)(ii).
On April 23, 2019, the Plaintiffs filed a Notice of Settlement
informing the Court that the Parties had reached an agreement to
settle the Plaintiffs' claims. In conjunction with the settlement,
the Plaintiffs agreed to dismiss their individual claims with
prejudice and class claims without prejudice.
On April 26, 2019, the Court vacated all pending motion, case
management and trial dates and ordered the parties to file a
Stipulation of Dismissal by May 23, 2019.
Therefore, the Parties to the action stipulated that the
Plaintiffs' Complaint in the action, including any and all claims
alleged therein, be dismissed in its entirety with prejudice to the
Plaintiffs' individual claims and without prejudice to the class
claims.
Judge Roger granted the Parties' stipulation and so ordered. Each
of the Parties will bear their own costs and attorneys' fees.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/vyKq69 from Leagle.com.
Jovette Bryant, individually and on behalf of all others similarly
situated & Necole Franklin, individually and on behalf of all
others similarly situated, Plaintiffs, represented by John Peter
Kristensen -- john@kristensenlaw.com -- Kristensen Weisberg, LLP,
Jarrett Lee Ellzey -- jarrett@hughesellzey.com -- Hughes Ellzey,
LLP & William Craft Hughes -- craft@hughesellzey.com -- Hughes
Ellzey LLP.
Clean Energy Experts, LLC, a California Limited Liability Company,
Defendant, represented by Tahir Lynn Boykins --
tboykins@kelleydrye.com -- Kelley Drye & Warren LLP, Glenn T.
Graham -- ggraham@kelleydrye.com -- Kelley Drye Warren LLP & Lauri
Anne Mazzuchetti -- lmazzuchetti@kelleydrye.com -- Kelley Drye
Warren LLP.
COCA-COLA: Salzhauer Sues over Maltreatment of Dairy Cows
---------------------------------------------------------
ELIANA SALZHAUER, individually and on behalf of all others
similarly situated, Plaintiff v. THE COCA-COLA COMPANY; and
FAIRLIFE, LLC, Defendant, Case No. 1:19-cv-02709-MHC (N.D. Ga.,
June 13, 2019) is an action against the Defendants for
misrepresenting to the Plaintiff and the class that their brand of
milk products under the "Fairlife" label were produced from cows
that are treated humanely.
The Plaintiff alleges in the complaint that the Fairlife products
are not derived from cows that are treated "fairly" or with
"extraordinary care and comfort"; to the contrary, the Defendants'
dairy cows are not treated "fairly" at all -- rather, they are the
victims of horrendous animal abuse. The cruelty and suffering
inflicted on the cows and calves at Fair Oaks Farms -- the flagship
farm for the Fairlife Products -- was so significant that it has
led to criminal charges.
The Coca-Cola Company, a beverage company, manufactures and
distributes various nonalcoholic beverages worldwide. The Coca-Cola
Company offers its beverage products through a network of
company-owned or controlled bottling and distribution operators, as
well as through independent bottling partners, distributors,
wholesalers, and retailers. The company was founded in 1886 and is
headquartered in Atlanta, Georgia. [BN]
The Plaintiff is represented by:
Kenneth S. Canfield, Esq.
DOFFERMYRE SHIELDS
CANFIELD & KNOWLES, LLC
1355 Peachtree Street, N.E., Suite 1725
Atlanta, GA 30309
Telephone: (404) 881-8900
E-mail: kcanfield@dsckd.com
- and -
Adam J. Levitt, Esq.
Amy E. Keller, Esq.
Adam Prom, Esq.
DICELLO LEVITT GUTZLER LLC
Ten North Dearborn Street, 11 Floor
Chicago, IL 60602
Telephone: (312) 214-7900
E-mail: alevitt@dicellolevitt.com
akeller@dicellolevitt.com
aprom@dicellolevitt.com
- and -
Melissa S. Weiner, Esq.
Joseph C. Bourne, Esq.
PEARSON SIMON & WARSHAW, LLP
800 LaSalle Avenue, Suite 2150
Minneapolis, MN 55402
Telephone: (612) 389-0600
E-mail: mweiner@pswlaw.com
jbourne@pswlaw.com
- and -
Daniel L. Warshaw, Esq.
PEARSON SIMON & WARSHAW, LLP
15165 Ventura Boulevard, Suite 400
Sherman Oaks, CA 91403
Telephone: (818) 788 8300
E-mail: dwarshaw@pswlaw.com
- and -
Michael R. Reese, Esq.
Sue J. Nam, Esq.
Carlos F. Ramirez, Esq.
REESE LLP
100 West 93rd Street
Sixteenth Floor
New York, NY 10025
Telephone: (212) 643-0500
E-mail: mreese@reesellp.com
snam@reesellp.com
cramirez@reesellp.com
COINBASE INC: Court Denies Protective Order Bid in Leidel Suit
--------------------------------------------------------------
The United States District Court for the Southern District of
Florida issued an Order denying Plaintiffs' Motion for Protective
Order in the case captioned BRANDON LEIDEL, individually and on
behalf of All Others Similarly Situated, Plaintiff, v. COINBASE,
INC., a Delaware corporation d/b/a Global Digital Asset Exchange
(GDAX), Defendant. Civil No. 16-81992-CIV-Marra/Matthewman. (S.D.
Fla.).
This cause is before the Court upon Plaintiff, Brandon Leidel's
(Plaintiff) Motion for Protective Order to Prohibit Defendant from
Communicating with or Seeking Discovery from Absent Class Members.
In his Motion, the Plaintiff argues that Federal Rule of Civil
Procedure 23 provides the Court with broad authority to regulate
communications between defendants and class members prior to class
certification. The Plaintiff specifically seeks a protective order
prohibiting the Defendant from communicating with absent class
members without first conferring with the Plaintiff about the
content of such communications, and, if the parties cannot agree on
such communications, seeking leave of the Court to initiate such
communications upon approval of the proposed communications.
In response, the Defendant cites Gulf Oil v. Bernard, 452 U.S. 89
(1981), and asserts that the law on pre-certification contact with
members of the putative class is that when there is evidence in the
record that would support a finding of actual or threatened abusive
or misleading communication by any party . . . . the Court may
prohibit or impose conditions on future contact.
According to the Defendant, the Plaintiff has not made the
requisite evidentiary showing.
The Defendant asserts that there is no basis to grant the
Plaintiff's requests that the Defendant be required to produce
copies of all communications to and from absent class members or
that the Defendant be prohibited from using any information it has
or will obtain from absent class members.
The Court has carefully reviewed the case law relied on by
Plaintiff and Defendant and has conducted its own independent
research. It should be noted that several of the cases relied on by
Plaintiff in his Motion and reply are cases from outside of this
Circuit, and many of them involve communications between a
plaintiff and putative class members, rather than communications
between a defendant and putative class members.
The parties conceded in open court that Defendant has, thus far,
only communicated with four putative class members and that none of
those communications were problematic.
The issue, therefore, is that the Defendant plans on possibly
communicating with putative class members in the future in order to
investigate the facts of the case and bolster its own defense. The
Defendant asserts that such informal investigation is permissible
by both parties, even after the discovery cut-off has passed. The
Defendant also represented that, if it engages in any such
communications, it will do so within all ethical and professional
rules or requirements.
The Plaintiff argues that this case is factually distinguishable
from all of the other case law regarding class actions and
protective orders limiting or barring communication with putative
class members because, in this case, the discovery period has
closed. The Plaintiff's concern is that he cannot possibly monitor
the Defendant's communications with putative class members since
the Plaintiff can no longer propound written discovery to inquire
about such communications. The Plaintiff also points out this
problematic procedural posture was created by the Defendant because
the Defendant waited until the end of the discovery period to serve
discovery regarding the putative class members.
Despite the Plaintiffs argument to the contrary, the Court finds it
necessary to apply the case law-created test regarding whether to
issue a protective order limiting a party's communications with
putative class members.
First, here, arguably, a communication is threatened to occur.
Defense counsel explained at the discovery hearing that counsel
might contact putative class members who were also parties to a
related class action lawsuit regarding the sufficiency of
Plaintiffs counsel's representation during that related lawsuit.
Defense counsel is also still in the process of reviewing documents
recently produced by Plaintiff and wants to reserve the right to
contact putative class members in light of the information
contained in those documents. Defendant's position is that such
communication constitutes routine trial preparation.
The second prong of the requisite test is whether the form of the
communication at issue threatens the proper functioning of the
litigation. There is simply no way for the Court to find that this
prong has been met at this juncture. Plaintiff has produced no
evidence whatsoever to meet this prong or to establish that this
prong will he met in the future. Plaintiff has not met its burden
for obtaining a protective order, and it would he premature for the
Court to grant a protective order at this juncture. Plaintiff
advances mere speculation and no hard evidence.
The Court rejects the Plaintiffs argument that the procedural
posture of this case mandates the implementation of a protective
order. The fact that discovery is now closed is not a sufficient
basis to justify entry of the protective order Plaintiff seeks.
The Court also rejects the Plaintiffs assertion that Defendant is
trying to conduct informal discovery after the discovery cut-off
and that the Defendant has a burden to establish the necessity of
such discovery. Based on the Defendant's counsel's representations
and arguments at the discovery hearing, it is clear that the
Defendant's counsel is trying to investigate the case, as he is
entitled to do, and is not attempting to conduct discovery outside
of the discovery period. Of course, if the Defendant's counsel does
contact a putative class member, and that individual chooses not to
engage with counsel, Defendant's counsel will have no recourse.
The same applies to the Plaintiff's counsel.
Accordingly, the Plaintiff's Motion for Protective Order to
Prohibit Defendant from Communicating with or Seeking Discovery
from Absent Class Members is denied.
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/y2ncrg36 from Leagle.com.
Brandon Leidel, indvidually and on behalf of all others imilarly
situated, Plaintiff, represented by David Chad Silver --
DSilver@SilverMillerLaw.com -- Silver Miller, Jason Stuart Miller
-- JMiller@SilverMillerLaw.com -- Silver Miller, Marc Aaron Wites,
Wites Law Firm, 4400 North Federal Highway, Lighthouse Point, FL
33064 & Scott Lance Silver, Silver Law Group.
James D. Sallah, as Receiver/Corporate Monitor of Project
Investors, Inc., Plaintiff, represented by David Chad Silver,
Silver Miller.
Coinbase, inc., a Delaware Corporation, Defendant, represented by
Andrew Kemp-Gerstel -- akg@lgplaw.com -- Liebler Gonzalez &
Portuondo PA, Galen A. Phillips -- gphillips@goodwinlaw.com --
Goodwin Procter LLP, pro hac vice, James Randolph Liebler, II --
jrlii@lgplaw.com -- Liebler, Gonzalez, Portuondo, Laura Stoll --
lstoll@goodwinlaw.com -- Goodwin Procter LLP, pro hac vice & Steven
Ellis -- sellis@goodwinlaw.com -- Goodwin Procter LLP, pro hac
vice.
COLORTREE: Former Employees File Class Action Following Closure
---------------------------------------------------------------
Jonathan Spiers, writing for Richmond BizSense, reports that a
local printing company's abrupt closure has prompted a class-action
lawsuit brought on behalf of its more than 200 former employees,
many of whom said they were not paid as expected on June 7 for days
worked prior to the closure.
The lawsuit against Henrico-based Colortree Group was filed on June
6 on behalf of Terry Kennedy, a prepress operator at the company
for three years, and all other employees who likewise lost their
jobs as a result of the closure June 3.
The suit alleges Colortree violated the federal Worker Adjustment
and Retraining Notification Act and the Virginia Wage Payment Act
by not providing the approximately 240 employees with 60 days'
written notice of their terminations, as the WARN Act requires. It
seeks to recover that amount of lost wages and benefits per
plaintiff, as well as employees' accrued vacation time and other
compensation owed.
Colortree has 21 days to respond to the suit, which was filed in
the U.S. District Court for the Eastern District of Virginia. The
case is assigned to senior judge Robert Payne.
Colortree has not responded to calls from BizSense for comment. A
call to president and owner James "Pat" Patterson on June 7 was not
returned.
The suit alleges the employees were terminated without cause and
"have yet to receive a final paycheck." It said Colortree failed to
pay employees their respective wages, salary, commissions, bonuses,
accrued holiday pay and accrued vacation for 60 days following
their terminations, and failed to make pension and 401(k)
contributions or provide employees with COBRA health insurance
benefits.
As a class-action suit, the number of plaintiffs could increase if
more employees are added to the case. The suit states the exact
number of eligible plaintiffs, as well as their names, addresses
and rates of pay and benefits, are in Colortree's books and records
and "within the sole control of Defendant."
A summons to Colortree was sent to the Midlothian office of Cogency
Global, a New York-based registered agent service that is listed
with the State Corporation Commission as Colortree's agent.
Kennedy is represented locally by Spotts Fain attorneys Jennifer
West and Edward Bagnell Jr., who are working the case with Jack
Raisner and Rene Roupinian of New York-based employment law firm
Outten & Golden. A call to West prompted an email from Roupinian,
who did not respond to questions about the case.
Workers seeking pay
The suit was filed just as former employees were expecting to
receive their final paychecks on June 7, for a two-week pay period
that started May 27. Several told BizSense they did not receive
direct deposits and are owed for days worked before and up to the
closure on June 3.
Among them is Michael Maupin, who worked as a die cutter at
Colortree since January. Like others who spoke to BizSense, Maupin
said he was not notified of the closure or that he'd lost his job
until another employee told him on his way to work on June 3.
"Now I'm extremely worried that I'm not going to (be) paid from the
days I worked before the closing," Maupin said in an email. Reached
by phone on June 7, Maupin said was not aware of the class-action
suit and was focused on finding new work. He said he'd heard from
some companies that have been offering jobs to former Colortree
employees since the closure.
"I did have a part-time job prior to my employment at Colortree and
I'm trying to get more hours from them, but I still need something
to pay the bills," Maupin said.
"I'm a little mad and disappointed in the company for letting this
happen and for not giving employees a heads-up about this,
apparently giving some employees notification, some not so much,"
he said. "I've pretty much been in the dark about everything."
Some employees said they were given 15 minutes to clear out on June
3 before the building was locked following a conference call in
which it was conveyed to employees listening in that the company
was shutting down. The 31-year-old company had operated out of a
142,000-square-foot industrial building at 8000 Villa Park Drive.
In a letter dated the same day as the closure, Colortree sent a
WARN notice to the Virginia Employment Commission and Henrico
County that said it was permanently closing "some or all of its
divisions" and laying off approximately 240 employees.
The notice, signed by Patterson, who purchased full ownership of
the company two years ago, said Colortree "hopes to accomplish this
closure with as little disruption as possible to the lives of our
employees and the community."
In the days that followed, former employees have been scrambling to
connect with potential employers that reached out with job offers
and held hiring events. They included locally based TemperPack,
which held an event on June 7 that about 40 former Colortree
workers attended.
Vinny Abbott, who handles hiring for the packaging manufacturer,
said offers were being extended and interviews arranged.
The events come one month after another locally based company shut
its doors unexpectedly. In early May, Southside-based Live Well
Financial began shutting down operations after filing a notice with
the Virginia Employment Commission the same day it notified its
employees.
A class-action suit similarly followed, with former employee Monica
Williams claiming she and fellow workers were terminated without 60
days' notice. [GN]
COMCAST: Law Firms Urge Court to Approve $1.1MM Fee Request
-----------------------------------------------------------
Law360 reports that Begley Carlin & Mandio LLP, NastLaw LLC and
Wexler Wallace LLP urged a federal court in Philadelphia on June 7
to approve $1.1 million in fees on top of a $15.5 million class
action settlement between Comcast and subscribers who claim the
company unlawfully forced them to rent set-top boxes from the cable
company. The firms argued in a memorandum on June 7 that their fee
request was resaonble given the difficulty of fighting the cabe
giant over the course of a decade. [GN]
CRAFT BEER: Moves to Settles Beer Hawaii Brands Class Action
------------------------------------------------------------
Ryan Finnerty, writing for Hawaii Public Radio, reports that Craft
Beer Alliance, the parent company of Kona Brewing was sued in 2017
over its use of Hawaii-themed branding for beer that is produced on
the mainland. The company has moved to settle for almost $5
million.
There are more than 7,000 breweries in United States. Most of them
are small -- producing less than 500,000 gallons a year.
Expanding is expensive, so when many breweries want to grow, they
outsource production to an existing facility somewhere else.
That was the strategy used by Kona Brewing Company. As the company
grew, it started shifting some production to the West Coast.
According to Andy Baker, who has worked in the Hawaii brewing
industry for 35 years, it is generally cheaper to bring a smaller
quantity of finished product to the islands than it is to import
all the necessary raw materials.
"Containers that are coming to Hawaii are now full of full cases of
beer, that are shipping at 40 percent less than your containers of
raw materials," Baker said.
How can full bottles ship for less than empty ones? Baker says that
freight companies price based on the quantity of each commodity
being shipped. So on a per unit basis, a smaller number of full
bottles can be cheaper than a large quantity of empty ones.
That hasn't deterred other local brewers. Maui Brewing Company
produces all of its beer on the Valley Isle and has positioned
itself as the largest local producer of beer to actually brew all
its beer in Hawaii.
But, outsourcing to a contract brewer is by no means an uncommon
tactic according to Bart Watson, Chief Economist for the Brewers
Association.
"Breweries are trying to find ways that they can still grow and be
competitive without breaking the bank and taking on all that debt
and risk of building a new brewery," Watson said.
The class action suit filed against Kona Brewing centered on the
company's use of Hawaii-themed branding for its beer, many of which
have Hawaiian names or are named for geographic places in Hawaii.
The suit alleged that Kona Brewing Company misled consumers to
believe that bottled and canned beer was coming from Hawaii.
This is not the first isntance of a beer producer being sued over
where it does its brewing. In 2013, Anheuser Busch, the producer of
Beck's, was sued after it continued marketing the pilsner as a
German beer, despite shifting production to St. Louis, Missouri.
In offering the $4.8 million Kona Brewing settlement, Craft Brew
Alliance did not admit any wrongdoing, but expressed a desire "move
forward and avoid the unnecessary distraction" of litigation.
If the settlement receives court approval, consumers who purchased
Kona beer since February, 28, 2013 will be eligible for refunds of
$1.25 to $2.75 on four-, six-, 12- and 24-packs of Kona, with a
maximum $20 per household with receipts and $10 without receipts.
CBA has plans in the works to expand Hawaii beer production with a
new brewing facility. [GN]
DUPONT: Blades Residents Sue Over Drinking Water Contamination
--------------------------------------------------------------
Sophia Schmidt, writing for Delaware Republic, reports that five
Blades residents have filed what they hope will become a class
action lawsuit on behalf of over 1,300 residents against several
companies they blame for contamination of the town's drinking water
with toxic chemicals.
State officials told Blades residents to stop drinking municipal
water last February after elevated levels of Perfluorinated
Chemicals (PFCs) -- specifically PFOS and PFOA -- were found in the
town's three wells. They were then found in several private wells.
A carbon filtration system was installed for the municipal supply,
which was determined safe to drink within weeks.
PFCs accumulate in the environment and the human body. According to
the CDC, some studies indicate certain PFCs may affect the immune
system and increase the risk of cancer.
The suit filed late in May blames 3M, DuPont and Chemours for
allegedly manufacturing, marketing and selling products containing
PFCs despite knowledge of their risks.
It claims a local defendant, Procino Plating, used the chemicals in
hard chrome plating and to manufacture nonstick cookware in the
town of Blades, then "carelessly discharged" them, contaminating
the water supply.
The plaintiffs are seeking compensation for injuries they say
resulted from exposure to the contaminated water.
The complaint claims three plaintiffs were diagnosed with
conditions including thyroid, kidney and liver disease as a result
of the exposure. It claims all plaintiffs have bioaccumulation of
the chemicals in their blood and are at an increased risk for
several health conditions.
Four of the five plaintiffs' homes are on municipal water and one
has a private well, according to the filing.
In an emailed statement, a spokesperson for Chemours said the court
filing contains "significant factual misstatements" -- and that "no
Chemours plant site had ever used PFOS in its manufacturing
processes, and all Chemours plant sites now owned by Chemours had
ceased using PFOA at least two years before the company was
established."
A spokesperson for 3M says the company "cares deeply about the
safety and health of Delaware's communities" and "acted responsibly
in connection with products containing PFAS and will vigorously
defend its environmental stewardship."
A spokesman for DuPont declined to comment on the pending
litigation beyond saying the company "will vigorously defend [its]
record of safety, health and environmental stewardship."
Representatives from Procino Enterprises did not respond to a
request for comment. An official with the Town of Blades and
Secretary Shawn Garvin of the Delaware Department of Natural
Resources and Environmental Control both declined to comment.
The state of New Jersey recently sued 3M, DuPont and Chemours for
manufacturing and selling firefighting foam containing the toxic
chemicals despite knowing their risks. That suit alleges the
chemicals have contaminated groundwater and surface water in New
Jersey.
This story has been updated to include comment from Chemours. [GN]
ECO SCIENCE: Bid to Stay Raschke Class Suit Pending
---------------------------------------------------
Eco Science Solutions, Inc. said in its Form 10-K report filed with
the U.S. Securities and Exchange Commission on June 28, 2019, for
the fiscal year ended January 31, 2019, that the defendants in the
class action suit initiated by Richard Raschke have moved to stay
the action.
On February 1, 2019, the lead plaintiff, Mr. Richard Raschke, a
purported shareholder of the Company, filed an amended consolidated
class action complaint against the Company, Jeffrey L. Taylor, Don
L. Taylor (the Taylors), and Mr. Gannon Giguiere in the United
States District Court for the District of New Jersey (the "Class
Action").
The Class Action arises out of alleged materially false and
misleading statements or omissions from SEC filings and/or public
statements by or on behalf of Company.
The Class Action asserts claims against all defendants for
violation of Section 10(b) of the Securities Exchange Act of 1934
(the "Act"), violation of Section 20(a) of the Act against the
Taylors and Giguiere and Violation of Section 20(b) against Mr.
Giguiere.
The Class Action seeks (1) certification of the purported class of
plaintiffs, (2) compensatory damages in favor of the class and (3)
an award of reasonable costs and expenses.
Defendants have moved to stay this action.
Eco Science Solutions, Inc., a bio and software technology-focused
company, provides solutions for the health, wellness, and
alternative medicine industry. Its services include business
location, localized communications between consumers and business
operators, social networking, inventory management/selection, and
payment facilitation and delivery. Eco Science Solutions, Inc. was
founded in 2009 and is headquartered in Makawao, Hawaii.
EROS INTERNATIONAL: Kessler Topaz Files Securities Fraud Class Suit
-------------------------------------------------------------------
The law firm of Kessler Topaz Meltzer & Check, LLP alerts investors
that a securities fraud class action lawsuit has been filed against
Eros International plc (NYSE: EROS) ("Eros") on behalf of those
who purchased or otherwise acquired Eros publicly traded securities
between July 28, 2017 and June 5, 2019, inclusive (the "Class
Period").
Investors who purchased Eros securities during the Class Period
may, no later than August 20, 2019, seek to be appointed as a lead
plaintiff representative of the class. For additional information
or to learn how to participate in this litigation please visit
www.ktmc.com/eros-international-plc-securities-class-action.
According to the complaint, Eros is a leading company in the Indian
film entertainment industry and co-produces, acquires and
distributes Indian language films in multiple formats worldwide.
The Class Period commences on July 28, 2017, when Eros issued a
press release containing its financial results for the fiscal year
2017, ended March 31, 2017.
The complaint alleges that, on June 5, 2019, CARE Ratings, India's
second largest credit ratings agency, downgraded the credit rating
for Eros's Indian subsidiary, Eros International Media Ltd
("EIML"), to "Default" because of "ongoing delays/default in debt
servicing due to slowdown in collection from debtors." Then, on
June 6, 2019, Eros issued a press release admitting that EIML was
late on two loan interest payments for April and May 2019.
Following this news, shares of Eros fell $3.59 or over 49% to close
at $3.71 per share on June 6, 2019.
The following day, Hindenburg Research published an article
entitled "Eros International: On-The-Ground Research, Employee
Interviews, and Private Company Documents Expose Egregious
Accounting Irregularities," explaining the reason for the downgrade
of EIML. The article stated, among other things, that "a
significant portion of Eros's receivables don't exist" and that
they have documented "multiple undisclosed related-party
transactions that appear designed to hide receivables."
The complaint alleges that, throughout the Class Period, the
defendants made false and/or misleading statements and/or failed to
disclose that: (1) Eros and its executives engaged in a scheme to
use related-party transactions to fabricate receivables that they
reported in Eros's public financial disclosures; (2) because of
this scheme, Eros's financial position was weaker than what Eros
disclosed; (3) consequently, EIML missed loan payments and had its
credit downgraded; and (4) due to the foregoing, the defendants'
statements about Eros's receivables, business, operations, and
prospects, were materially false and misleading and/or lacked a
reasonable basis at all relevant times.
Eros investors who wish to discuss this securities fraud class
action lawsuit and their legal options are encouraged to contact
Kessler Topaz Meltzer & Check, LLP (James Maro, Jr., Esq. or
Adrienne Bell, Esq.) at (844) 887-9500 (toll free) or at
info@ktmc.com.
Eros investors may, no later than August 20, 2019, seek to be
appointed as a lead plaintiff representative of the class through
Kessler Topaz Meltzer & Check, or other counsel, or may choose to
do nothing and remain an absent class member. A lead plaintiff is
a representative party who acts on behalf of all class members in
directing the litigation. In order to be appointed as a lead
plaintiff, the Court must determine that the class member's claim
is typical of the claims of other class members, and that the class
member will adequately represent the class. Your ability to share
in any recovery is not affected by the decision of whether or not
to serve as a lead plaintiff.
Contact:
James Maro, Jr., Esq.
Adrienne Bell, Esq.
Kessler Topaz Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
Toll Free: (844) 887-9500
(610) 667-7706
Website: www.ktmc.com
Email: info@ktmc.com
abell@ktmc.com
jmaro@ktmc.com [GN]
EROS INTERNATIONAL: Rosen Law Firm Files Securities Class Action
----------------------------------------------------------------
Rosen Law Firm, a global investor rights law firm, announces it has
filed a class action lawsuit on behalf of purchasers of the
securities of Eros International PLC (NYSE: EROS) from July 28,
2017 through June 5, 2019, inclusive (the "Class Period"). The
lawsuit seeks to recover damages for Eros investors under the
federal securities laws.
To join the Eros class action, go to
http://www.rosenlegal.com/cases-register-1597.htmlor call Phillip
Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or
cases@rosenlegal.com for information on the class action.
NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS
IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN
ONE. YOU MAY RETAIN COUNSEL OF YOUR CHOICE. YOU MAY ALSO REMAIN AN
ABSENT CLASS MEMBER AND DO NOTHING AT THIS POINT. AN INVESTOR'S
ABILITY TO SHARE IN ANY POTENTIAL FUTURE RECOVERY IS NOT DEPENDENT
UPON SERVING AS LEAD PLAINTIFF
According to the lawsuit, defendants throughout the Class Period
made false and/or misleading statements and/or failed to disclose
that: (1) Eros and its executives engaged in a scheme to use
related-party transactions to fabricate receivables that they
reported in Eros's public financial disclosures; (2) because of
this scheme, Eros's financial position was weaker than what the
Company disclosed; (3) consequently, the Company's Indian
subsidiary, Eros International Media Ltd, missed loan payments and
had its credit downgraded; and (4) due to the foregoing,
defendants' statements about Eros's receivables, business,
operations, and prospects, were materially false and misleading
and/or lacked a reasonable basis at all relevant times. When the
true details entered the market, the lawsuit claims that investors
suffered damages.
A class action lawsuit has already been filed. If you wish to serve
as lead plaintiff, you must move the Court no later than August 20,
2019. A lead plaintiff is a representative party acting on behalf
of other class members in directing the litigation. If you wish to
join the litigation, go to
http://www.rosenlegal.com/cases-register-1597.html
Contact:
Laurence Rosen, Esq.
Phillip Kim, Esq.
The Rosen Law Firm, P.A.
275 Madison Avenue, 34th Floor
New York, NY 10016
Phone: (212) 686-1060
Toll Free: (866) 767-3653
Fax: (212) 202-3827
Website: www.rosenlegal.com
Email: lrosen@rosenlegal.com
pkim@rosenlegal.com
cases@rosenlegal.com [GN]
EROS INTERNATIONAL: Schall Law Firm Files Class Action Lawsuit
--------------------------------------------------------------
The Schall Law Firm, a national shareholder rights litigation firm,
announces the filing of a class action lawsuit against Eros
International Plc (NYSE: EROS) for violations of §§10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder by the U.S. Securities and Exchange
Commission.
Investors who purchased the Company's shares between July 28, 2017
and June 5, 2019, inclusive (the "Class Period"), are encouraged to
contact the firm before August 20, 2019.
We also encourage you to contact Brian Schall of the Schall Law
Firm, 1880 Century Park East, Suite 404, Los Angeles, CA 90067, at
424-303-1964, to discuss your rights free of charge. You can also
reach us through the firm's website at www.schallfirm.com, or by
email at brian@schallfirm.com.
The class, in this case, has not yet been certified, and until
certification occurs, you are not represented by an attorney. If
you choose to take no action, you can remain an absent class
member.
According to the Complaint, the Company made false and misleading
statements to the market. Eros and its executives conspired in a
scheme to fabricate receivables using related-party transactions
that were reported in the Company's public financial disclosures.
Due to this scheme, the Company's financial health was
significantly weaker than it appeared. The scheme resulted in the
Company's Indian subsidiary, Eros International Media Ltd, missing
loan payments, which in turn led to a credit downgrade. Based on
these facts, the Company's public statements were false and
materially misleading throughout the class period. When the market
learned the truth about Eros, investors suffered damages.
Join the case to recover your losses.
Contact:
Brian Schall, Esq.
Sherin Mahdavian, Esq.
The Schall Law Firm
1880 Century Park East
Suite 404, Los Angeles
CA 90067
Phone:
Office: 310-301-3335
Cell: 424-303-1964
Website: www.schallfirm.com
Email: info@schallfirm.com
brian@schallfirm.com [GN]
EVENTBRITE INC: Scott+Scott Attorneys Files Class Action
--------------------------------------------------------
Scott+Scott Attorneys at Law LLP ("Scott+Scott"), an international
securities and consumer rights litigation firm, on June 5 disclosed
that it has filed a class action lawsuit against Eventbrite, Inc.
("Eventbrite" or the "Company") (EB) and certain of its management
and underwriters ("Defendants"), seeking to recover damages under
the federal securities laws for people who purchased Eventbrite
stock pursuant and/or traceable to the Company's initial public
offering ("IPO") in September 2018. If you acquired Eventbrite
stock in the IPO, you are encouraged to contact attorney Joe
Pettigrew at (844) 818-6982 for more information.
On September 19, 2018, Eventbrite conducted its IPO at $23 a share.
The lawsuit alleges that in the IPO registration statement,
Eventbrite stated that its acquisition of Ticketfly "had a positive
impact on our net revenue growth" in the third quarter of 2017.
On March 7, 2019, however, Eventbrite reported its annual financial
results, and in a related conference call, stated that the strategy
to integrate Ticketfly "will impact revenues in the short-term." On
this news, shares of Eventbrite fell more than 24%, closing at
$24.46 on March 8, 2019. Further, on May 1, 2019, the Company
announced a first quarter loss, along with revenue, and
second-quarter guidance that were both well below analysts'
estimates. On this news, Eventbrite's stock declined more than 27%,
closing at $17.60 per share.
The complaint alleges that Eventbrite made false and/or misleading
statements and/or failed to disclose that, at the time of the
Offering, the migration of creators from Ticketfly to Eventbrite
was progressing more slowly than stated, forcing the Ticketfly
integration to take longer than expected, and the Company would
thereby face headwinds in revenue and growth.
What You Can Do
If you purchased Eventbrite securities in or traceable to the
Company's IPO, acquired Eventbrite securities between September 20,
2018 and March 7, 2019, or if you have questions about this notice
or your legal rights, please contact attorney Joe Pettigrew at
(844) 818-6982, or at jpettigrew@scott-scott.com. The lead
plaintiff deadline was June 14, 2019.
About Scott+Scott Attorneys at Law LLP
Scott+Scott has significant experience in prosecuting major
securities, antitrust, and employee retirement plan actions
throughout the United States. The firm represents pension funds,
foundations, individuals, and other entities worldwide with offices
in New York, London, Amsterdam, Connecticut, California, and Ohio.
[GN]
F.E.S INC.: Faces Pangiotis Suit in Eastern Dist. of New York
-------------------------------------------------------------
A class action lawsuit has been filed against F.E.S Inc. et al. The
case captioned as KALEMAKIS PANGIOTIS, individually and on behalf
of others similarly situated, the Plaintiff, v. F.E.S Inc., (DBA as
Elias Corner) and Ilias Sidiriglou, the Defendants, Case No.
1:19-cv-03902 (E.D.N.Y., July 6, 2019).
Attorneys for the Plaintiff are:
Lina Stillman, Esq.
42 Broadway
12th Floor
New York NY 10004
Telephone: 212-203-2417
FACEBOOK INC: In-House Attorney Joins Gender Bias Class Action
--------------------------------------------------------------
Ryan Lovelace, writing for The National Law Journal, reports that a
former Jones Day associate who is now an in-house attorney for
Facebook has joined a gender bias lawsuit against Jones Day, making
her the third named plaintiff in the case.
The lawyer, Jessica Jardine Wilkes, was an associate at Jones Day
from October 2014 to September 2016, and is now product counsel at
Facebook in Menlo Park, California, according to her LinkedIn
profile and state bar records.
Employment class action firm Sanford Heisler Sharp brought the case
against Jones Day in April on behalf of former associates Nilab
Rahyar Tolton and Andrea Mazingo, as well as four anonymous women.
Lawyers at Sanford Heisler and Jones Day argued in Washington,
D.C., federal district court in May over whether the unidentified
women should be able to keep their anonymity in advance of any
trial.
The proposed class action seeks as much as $200 million from Jones
Day for what the plaintiffs allege was systematic discrimination
against women attorneys. Jones Day has countered that it has a
strong record of advancing women's careers, calling the lawsuit
meritless.
Jones Day labor and employment partner Terri Chase indicated at a
hearing in the case in May that the plaintiffs may be preparing to
amend their complaint with additional women accusers. U.S. District
Judge Randolph Moss subsequently asked for a joint status report by
June 19 that would explain whether Sanford Heisler intended to add
additional accusers or claims. The firm filed documents Sunday
showing that Wilkes had agreed to become a named plaintiff.
After she left Jones Day, Wilkes joined Symantec, where she was
corporate counsel from September 2016 until August 2018, according
to her LinkedIn profile. She moved to Facebook in September 2018.
Wilkes did not respond to a request for comment. Sanford Heisler
partner Deborah Marcuse, a lawyer for the plaintiffs, wasn't
immediately available to comment on whether additional plaintiffs
may be joining the suit.
The next deadline in the gender bias case is June 12, when Moss
ordered Sanford Heisler to provide declarations from two of the
four unidentified women accusers supporting their request to remain
hidden from the public. Moss has allowed Jones Day to disclose the
women's names to the extent needed to investigate and answer their
claims. [GN]
FINISAR CORP: Judgment on Pleadings Bid in Securities Suit Granted
------------------------------------------------------------------
In the case, In re FINISAR CORPORATION SECURITIES LITIGATION, Case
No. 5:11-cv-01252-EJD (N.D. Cal.), Judge Edward J. Davila of the
U.S. District Court for the Northern District of California, San
Jose Division, (i) struck the Plaintiff's improperly renewed motion
for class certification, and (ii) granted the Defendants' motion
for judgment on the pleadings.
Lead Plaintiff, the Oklahoma Firefighters Pension & Retirement
System, brings the putative securities fraud class action against
Finisar, Eitan Gertel, and Jerry S. Rawls, alleging that the
Defendants issued a single false or misleading statement on Dec. 2,
2010. The Plaintiff brings the action on behalf of itself and a
class of all persons and entities who purchased or otherwise
acquired the common stock of Finisar between Dec. 2, 2010 and March
8, 2011.
The Plaintiff filed its first motion to certify the class in 2017.
The Plaintiff relied on the fraud-on-the-market presumption to
satisfy the Rule 23 requirement that common questions predominate.
It contended that prior to the December 2nd statement, market
analysts questioned whether and to what extent Finisar's growth and
increased sales were attributable to an inventory build-up by
customers rather than market demand.
The Defendants remained silent regarding the possibility of an
inventory build-up and accordingly, Finisar's stock price remained
relatively constant prior to the Class Period, and it did not rise
in proportion to the Company's record-setting revenue growth. The
Plaintiff theorized that the December 2nd statement assured the
market that there was no inventory build-up, and as a result,
Finisar's common stock "shot up" from $19.77 per share on Dec. 1,
2010 to its Class Period high of $43.23 per share.
The Defendants opposed the original motion to certify the class by
presenting evidence and argument to rebut the fraud-on-the-market
presumption under Erica P. John Fund, Inc. v. Halliburton Co. The
Defendants contended (a) that Gertel's statement did not have an
impact on Finisar's stock price at the time the statement was made;
and (b) that price impact cannot be inferred from the stock price
drop after the purported "corrective disclosure" on March 8 because
there was no pre-existing price inflation, i.e. the "price
maintenance" theory was inapplicable.
The court found the Defendants' arguments persuasive. More
specifically, it found that the December 2nd statement had been
made after the stock price had already increased from the previous
day's close; the report of the Defendants' expert, Alexander
Aganin, was persuasive and the December 2nd statement did not cause
the stock price to increase when the statement was made; that the
Plaintiff had not alleged that the stock price was artificially
high at the time of the Gertel's statement, and therefore the price
maintenance theory was inapplicable; and the post-December 2
analyst reports introduced new information into the market about
inventory and growth conditions for which the Defendants were not
responsible and which severed the link between Gertel's statement
and any increase in Finisar's stock. Thus, the court held that the
Defendants had rebutted the presumption of fraud-on-the market
reliance by demonstrating through a preponderance of evidence that
Gertel's December 2nd statement had no price impact when made or
thereafter.
The Plaintiff sought and was granted leave to file a motion for
reconsideration. On Jan. 18, 2018, the court denied the
Plaintiff's motion for reconsideration because it had not shown a
manifest failure by the court to consider material facts or
dispositive legal arguments that were presented to the court before
the court issued its ruling denying class certification.
The Plaintiff next sought and was granted a stay of discovery
pending a ruling on the Plaintiff's Petition for Permission to
Appeal Pursuant to Rule 23(f) from the Order Denying Motion For
Class Certification. The Ninth Circuit denied the Plaintiff's
petition for permission to appeal the Order Denying Plaintiff's
Motion For Class Certification and the Jan. 18, 2018 order denying
the Plaintiff's motion for reconsideration.
The Plaintiff now renews its motion for class certification based
upon purported "new evidence" regarding the price impact of the
December 2nd statement. The purported "new evidence" consists of a
new expert report by Hartzmark ("Hartzmark 3") not previously
submitted to the court. The Plaintiff argues that the purported
new evidence demonstrates that the December 2nd statement
immediately caused artificial inflation in Finisar's stock price
(which does not necessarily equate with, or require, an increase in
market price), and that the introduction of artificial inflation
maintained the market price of Finisar stock -- which otherwise
would have declined had the truth been disclosed in response the
analyst's question regarding customer inventory.
The Defendants contend that the motion should be denied at the
threshold because the Plaintiff has not made the requisite showing
under Civil Local Rule 7-9 to warrant reconsideration. They
further contend that the price decline after the purported
corrective disclosure on March 8 does not show price impact.
Judge Davila finds that Hartzmark 3 is not new evidence and should
have been presented as part of the briefing on the original motion
for class certification. In the absence an emergence of new
material facts, Civil Local Rule 7-9(b)(2) is inapplicable. Nor is
reconsideration warranted under Civil Local Rule 7-9(b)(1) because
the Plaintiff has not shown that in the exercise of reasonable
diligence the Plaintiff did not know such fact at the time of the
interlocutory order.
Next, the Judge finds that although the Plaintiff has not made the
requisite showing to warrant reconsideration, he has reviewed the
Plaintiff's motion, which can be distilled into essentially two
arguments, and rejects each of these arguments. First, the
Plaintiff takes issue with the court's conclusion that it is not
proceeding on a price maintenance theory. Second, the Plaintiff
contends that Hartzmark 3 supports its claims that Mr. Gertel's
alleged misrepresentation distorted Finisar's stock price by
propping it up through the introduction of a statistically
significant level of artificial inflation, which is affirmative
evidence of price impact. The Judge reiterates that Hartzmark 3 is
not new evidence and should have been presented as part of the
briefing on the original motion for class certification. In any
event, he has reviewed Hartzmark 3 and the Defendants' criticisms
of the report. Many of the Defendants' criticisms are valid.
For these reasons, Judge Davila construes the Plaintiff's motion
for class certification as a motion for leave to file a motion for
reconsideration. Because there is no basis for reconsideration, the
court STRIKES Plaintiff's improperly renewed motion for class
certification. Plaintiff acknowledges that Defendants' motion for
judgment on the pleadings is entirely dependent on the court's
ruling on the motion for class certification. Pl.'s Opp'n 1:6-7.
Accordingly, Judge Davila granted the Defendants' motion for
judgment on the pleadings.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/yD9M7e from Leagle.com.
Martin Derchi-Russo, Individually and on Behalf of All Others
Similarly Situated, Plaintiff, represented by Catherine J.
Kowalewski -- info@btzforensics.com -- Robbins Geller Rudman & Dowd
LLP, Darren Jay Robbins -- darrenr@rgrdlaw.com -- Robbins Geller
Rudman & Dowd LLP, David Conrad Walton -- davew@rgrdlaw.com --
Robbins Geller Rudman & Dowd LLP & Dennis J. Herman --
dennish@rgrdlaw.com -- Robbins Geller Rudman & Dowd LLP.
Finisar Corporation, Jerry S. Rawls, Eitan Gertel & Kurt Adzema,
Defendants, represented by David Allen Priebe --
david.priebe@dlapiper.com -- DLA Piper LLP, Diana Mariko Maltzer --
dmaltzer@mofo.com -- Morrison & Foerster LLP, Rajiv Sajjan
Dharnidharka -- rajiv.dharnidharka@dlapiper.com -- DLA Piper US
LLP, Roy K. McDonald -- rmcdonald@mwe.com -- McDermott Will & Emery
LLP & Shirli Fabbri Weiss -- shirli.weiss@dlapiper.com -- DLA Piper
LLP.
Daniel Levy, Movant, represented by Reed R. Kathrein --
reed@hbsslaw.com -- Hagens Berman Sobol Shapiro LLP.
Oklahoma Firefighters Pension and Retirement System, Movant,
represented by Ian David Berg, Abraham, Fruchter & Twersky, LLP,
Mitchell M.Z. Twersky, Abraham Fruchter Twersky LLP, pro hac vice,
Takeo A. Kellar -- tkellar@aftlaw.com -- Abraham, Fruchter &
Twersky, LLP & Ximena R. Skovron, Abraham Fruchter Twersky LLP, pro
hac vice.
Hetal Patel, Movant, represented by Michael M. Goldberg, Goldberg
Law PC.
Andrew Lee, Movant, represented by Ramzi Abadou, Kahn Swick Foti
LLP.
Teamsters Pension Trust Fund of Philadelphia and Vicinity, City of
Pontiac General Employees Retirement System & James Ray Abell,
Movants, represented by Dennis J. Herman, Robbins Geller Rudman &
Dowd LLP.
James Kenney, Movant, represented by Kevin Andrew Seely --
kseely@robbinsarroyo.com -- Robbins Arroyo LLP.
FLOWERS HOSPITAL: Judge Closes Data Breach Class Action
-------------------------------------------------------
Lance Griffin, writing for Dothan Eagle, reports that all terms of
a settlement in a class-action lawsuit against Flowers Hospital
over a substantial data breach in 2013 and 2014 appear to have been
satisfied, according to court documents.
A federal judge has officially closed the case against Triad of
Alabama, the then-parent company of Flowers Hospital. The suit
arose following the arrest of former Flowers phlebotomist Kamarian
Millender, who was convicted in 2014 of using patients' personal
information to file false tax returns. Millender participated in
the scheme between January 2013 and February 2014, obtaining
information on more than 700 patients, a federal prosecutor said
following Millender's conviction.
The suit sought relief for all members of the suit whose personal
information was exposed.
According to settlement terms, Flowers Hospital agreed to set aside
$150,000 in a fund to address claims from the members, which rose
to 1,208 people or parties potentially affected by the data breach.
Flowers also agreed to pay for all attorney fees and related costs
and set up credit monitoring for affected class members.
The closing of the case indicates all class members have been paid
and credit monitoring is in place.
Flowers Hospital admits no wrongdoing as part of the settlement.
Millender was convicted on federal and state charges related to the
theft. He was released from federal prison in December of 2016 and
is in the process of paying restitution. [GN]
GC SERVICES: Court Denies Class Certification in Jaber Suit
-----------------------------------------------------------
The United States District Court for the Eastern District of
Michigan, Southern Division, issued an Order granting Plaintiffs'
Motion for Class Certification in the case captioned SABAH JABER,
individually, and as representative of a class of similarly
situated persons, Plaintiff, v. GC SERVICES LIMITED PARTNERSHIP,
Defendant. Case No. 17-19371. (E.D. Mich.).
GC is a debt collector. Jaber's creditor submitted credit card debt
incurred in her name to GC for collection. GC sent the first
collection letter to Jaber on June 20, 2017. It included the
following language:
Because of interest, late charges, and other charges that may vary
from day to day, the amount owed on the day you pay may be greater.
Hence, if you pay the amount shown above, an adjustment may be
necessary after we receive your payment, in which event we will
inform you.
After this first letter was sent, Jaber contacted GC and said she
was the victim of identity theft. GC reported Jaber's identity
theft claim to the creditor. The creditor investigated this fraud
claim and concluded there was no fraud. Subsequently, the creditor
placed Jaber's account with GC again for collection. GC sent a
second, identical letter to Jaber. The above language in the GC
letters is the basis for Jaber's claims.
Class Certification under Fed. R. Civ. P. 23
Jaber's Class Definition is Overly Broad
Jaber seeks to certify a class of:
(i) all persons at a Michigan address (ii) to whom Defendant
sent, or caused to be sent, a letter in the form of Exhibits 1 and
2, that was not returned by postal service (iii) in an attempt to
collect a credit card debt referred by a credit card company, and
which, as shown by the nature of the alleged debt, Defendant's
records, or the records of the original creditors, was primarily
for personal, family, or household purposes (iv) during the one
year period prior to the date of filing this action.
Before a court may certify a class pursuant to Rule 23, the class
definition must be sufficiently definite so that it is
administratively feasible for the court to determine whether a
particular individual is a member of the proposed class.
GC says Jaber's class definition is too broad because it includes
persons who do not have a claim under the FDCPA. Specifically, it
says the creditor may charge additional interest and other fees
until the account is charged-off. GC does not define charged off.
However, it appears that a charged off account is one that the
creditor deems uncollectible and at least partially worthless.
Typically, the creditor will no longer charge interest to that
account.
Because some putative class members accounts had not been charged
off when the collections letters were sent, GC says the Miller
language was appropriate.
Whether the creditor has a practice of accruing charges once
accounts are placed in collections, charged off or not, is a
factual dispute between Jaber and GC. Jaber tries to capture an
entire group of people as plaintiffs for whom the practice of
charging additional interest and fees may be completely legal under
their own cardmember agreements.
Jaber's class definition is too broad.
Jaber Cannot Satisfy the Numerosity Requirement of Fed. R. Civ. P.
23
To prove numerosity, a plaintiff must demonstrate that the putative
class is so numerous that joinder of all members is impracticable.
There is no strict numerical test for determining impracticability
of joinder.
Jaber says numerosity is satisfied because GC sent collection
letters containing the Millerlanguage to more than 600 Michigan
consumers during the relevant time period. GC does not dispute this
number, but it says merely referring to this number is insufficient
for Jaber to satisfy her burden. The Court agrees.
Although more than 600 Michigan consumers received similar
collection letters from GC, the number of putative class members is
speculative because of the factual dispute outlined above: whether
the putative class includes a group of people for whom the practice
of charging additional interest and fees is completely legal. The
unrefined number Jaber relies on is too speculative to satisfy the
numerosity requirement.
Jaber Cannot Satisfy the Commonality Requirement of Rule 23
Jaber says commonality is satisfied because each proposed class
member received the same letter from GC with the Miller language.
In Macy v. GC Services Limited Partnership, 897 F.3d 747 (6th Cir.
2018), where the Sixth Circuit affirmed the district court's
holding that commonality was satisfied where the defendant sent
similar collection letters to the proposed class members.
GC says Jaber cannot satisfy commonality because whether the Miller
language violates the FDCPA cannot be answered the same for each
proposed class member. The Court agrees, and believes there will
have to be an individualized inquiry into each proposed class
member's card agreement with the creditor.
Commonality requires the plaintiff to demonstrate that the proposed
class members have suffered the same injury. This does not mean
merely that they have all suffered a violation of the same
provision of law. Their claims must depend upon a common
contention, that is capable of classwide resolution which means
that determination of its truth or falsity will resolve an issue
that is central to the validity of each one of the claims in one
stroke.
The question of whether the putative class includes a group of
people for whom the practice of charging additional interest and
fees is completely legal prevents Jaber from establishing
commonality with her proposed class members.
Jaber cannot satisfy the commonality requirement.
Jaber Cannot Satisfy the Typicality Requirement of Rule 23
Typicality is satisfied when a plaintiff's claim arises from the
same event, practice, or course of conduct that gives rise to the
claims of other class members and if his or her claims are based on
the same legal theory.
Jaber says typicality is satisfied because each proposed class
member received GC letters with the Miller language, and all have
claims identical to Jaber because of that.
GC says Jaber cannot satisfy typicality because she does not have a
claim under the FDCPA based on her known status as a victim of
identity theft. GC says her circumstances differ from those of the
proposed class members.
Jaber cites to the Sixth Circuit in Senter v. Gen. Motors Corp.,
532 F.2d 511, 525, n.31, where it said a representative's claim
need not always involve the same facts or law, provided there is a
common element of fact or law. However, the Sixth Circuit has since
said as goes the claim of the named plaintiff, so go the claims of
the class.
Without determining whether Jaber has a valid claim or not, the
Court finds Jaber's unique situation that she was a victim of
identity theft prevents her from establishing that her claim is
typical of those of the proposed class members.
Accordingly, the Court denies Jaber's Motion for Class
Certification without prejudice.
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/y3z5gvks from Leagle.com.
Sabah Jaber, Plaintiff, represented by Rex C. Anderson, 9459 Lapeer
Road, Suite 101, Davison, MI, 48423-3618 & Nemer N. Hadous,
HADOUS|CO. PLLC, 500 N Beech Daly Rd, Dearborn Heights, MI
48127-3460
GC Services Limited Partnership, Defendant, represented by David M.
Zack, Blevins Sanborn Jezdimir Zack PLC, 1842 Michigan Avenue,
Detroit, MI 48216, Marcus R. Sanborn -- msanborn@bsjzlaw.com --
BSJZ Law & Margaret J. Meier -- Margie@rudnicki.com -- The Rudnicki
Firm.
GENERAL MOTORS: Tavarez et al. Sue over Defective 2.4L Engine
-------------------------------------------------------------
CHARITY TAVAREZ; and CARLOS TAVAREZ, individually and on behalf of
all others similarly situated, Plaintiff v. GENERAL MOTORS, LLC and
DOES 1 through 10, Defendants, Case No. 19STCV21508 (Cal. Super.,
Los Angeles Cty., June 19, 2019) alleges that the Defendants' motor
vehicles equipped with a 2.4L engine, including the 2010 Chevrolet
Equinox, contained one or more design and manufacturing defects in
their engines that cause them to be unable to properly utilize
engine oil and, in fact, to improperly burn off and consume
abnormally high amounts of oil.
The Plaintiff alleges that vehicles manufactured by the Defendants,
equipped with the 2.4L engine, including 2010 Chevrolet Equinox
vehicles, contains one or more design and manufacturing defects
that causes it to be unable to properly utilize engine oil and, in
fact, to improperly burn off and consume abnormally high amounts of
oil.
General Motors LLC was incorporated in 2009 and is based in
Wilmington, Delaware. General Motors LLC operates as a subsidiary
of General Motors Company. [BN]
The Plaintiff is represented by:
Tionna Dolin, Esq.
Daniel Tai, Esq.
STRATEGIC LEGAL PRACTICES
A PROFESSIONAL CORPORATION
1840 Century Park East, Suite 430
Los Angeles, CA 90067
Telephone: (310) 929-4900
Facsimile: (310) 943-3838
E-mail: tdolin@slpattomey.com
dtai@slpattorney.com
GOOGLE INC: Another Engineer Fired Amid Damore Class Action
-----------------------------------------------------------
Art Moore, writing for WND, reports that Google has fired the
Republican engineer who wrote of the company's "outrage mobs" and
"witch hunts" in an open letter.
The Daily Caller reported Mike Wacker was fired on May 31 after
being put on paid administrative leave two days before.
He spoke with Fox Business host Trish Regan the day before his
suspension.
"You don't know what's going to offend somebody next and a lot of
time they are going to HR over these trivial things," he said.
Immediately after Wacker was fired, news broke that the Justice
Department was preparing an antitrust investigation of Google. On
June 5, the company filed an appeal of the $1.7 billion antitrust
penalty imposed by the European Commission over Google's ad sales
platform, AdSense.
In May, Wacker posted an open letter on the publishing platform
Medium describing a company culture of left-wing "outrage mobs" who
use the tech giant's anonymous bias-reporting channels to shut down
conservative social and political thought.
Wacker warned that if "left unchecked, these outrage mobs will hunt
down any conservative, any Christian, and any independent free
thinker at Google who does not bow down to their agenda."
He claimed that in March, the company offered him a severance
package to leave, with an implied threat that it would find a
pretext to fire him if he refused.
In 2017, Google employee James Damore was fired after writing a
memo accusing the tech giant of "alienating conservatives" at its
Bay Area headquarters.
'Your tolerance for bigotry'
Wacker offered as an example an incident in which a fellow
Republican was confronted for expressing admiration for University
of Toronto Professor Jordan Peterson and his protest of the
Canadian government forcing people to use transgender pronouns.
The concerned employee said that this support for Peterson caused
other employees to feel unsafe at work.
Wacker himself was reported twice through Google's anonymous
reporting channels.
He commented in a Google forum in January that the company's
activists "could only be described as 'nonpartisan' in the same
sense that the Women's March could be described as inclusive
towards pro-life Jewish women." In response, he received a note
that said his statement was perceived as
"hateful/incendiary/inflammatory."
In February, he received a note that said, "You received feedback
on industry-info@ that your comments were 'rude, disrespectful, and
intellectually dishonest."
When Wacker criticized the Google AI ethics board's dropping of
Heritage Foundation President Kay Coles James, a Google employee
responded, "Everyone is aware of your tolerance for bigotry."
In March, Wacker had a meeting with HR and his manager in which he
"received a final written warning" and "a verbal offer of 8 weeks
of severance pay if I left the company."
"That verbal offer of severance was an implied threat of
termination," he wrote. "While they never said it explicitly, it
was clear that if I didn't take that offer, they would invent some
pretext to fire me shortly thereafter."
The Daily Caller said a Google spokesman declined to comment on
Wacker but said "to make sure that no complaint raised goes unheard
at Google, we give employees multiple channels to report concerns,
including anonymously, and investigate all allegations of
retaliation."
'Ideological echo chamber'
The former Google employee Damore filed a class action lawsuit in
response to his firing.
The company reacted to his circulation of a memo titled "Google's
Ideological Echo Chamber: How bias clouds our thinking about
diversity and inclusion."
It was intended only for internal distribution, according to his
legal complaint. But it was leaked by a Google employee to a
left-leaning tech site, either Vice Motherboard or Gizmodo, "which
selectively quoted from the memo and misinterpreted it." The story
then was picked up worldwide.
The complaint said the memo discussed "the differences in political
ideologies between the leftist liberals and the rightist
conservatives, and suggested that neither ideology on its own was
'100% correct,' but that a balance between the two would be best
for society and Google. The memo then identified Google as having a
liberal bias."
Google employees and managers, according to the complaint,
"strongly preferred to hear the same orthodox opinions regurgitated
repeatedly, producing an ideological echo chamber, a protected,
distorted bubble of groupthink."
The complaint also provided evidence that some Google managers have
blacklists of conservative employees they won't hire or with whom
they refuse to work.
Other Google employees also suggested terminating employees with
conservative values that did not comport with their own, the
complaint said.
"One even suggested firing an employee twice simply to get the
point across -- conservatives were not welcome at Google." [GN]
GOOGLE INC: Must Face Class Action Over Conservative Bias
---------------------------------------------------------
John Eggerton, writing for Broadcasting Cable, reports that a
California superior court has refused Google's request that it
dismiss a class action lawsuit alleging the search giant
discriminated against conservatives in hiring and harassed and
retaliated against the defendants.
The plaintiffs allege that they were "singled out, mistreated, and
systematically punished and/or terminated" for expressing
[conservative] views deviating from the majority of their
colleagues."
The plaintiffs at issue, who are both white make conservatives, say
Google did not hire them for that reason, as well as their race and
gender. One is a military veteran who applied for a job with Google
Fiber. The other was a veteran marketing exec whose conservative
bent was obvious due to social media postings, and who had written
an article criticizing Google CEO Sundar Pichai.
They also allege that the company "utilizes unlawful hiring quotas
to reach its desired percentages of female and favored minority
candidates and openly denigrates employees who are male,
white/Caucasian, and/or Asian."
Google had argued that it was too hard to establish conservatives
as a political subclass for the purposes of a class action and
asked the court to conclude that as well. The court tended to
agree, but was not ready to foreclose the suit at this stage.
"The Court indeed has doubts regarding the viability of the
putative Political Subclass claims on each of these grounds," it
said. "However, it is not prepared to find at the pleading stage
that there is 'no reasonable possibility that the requirements for
class certification will be satisfied' as to these claims."
The court said the better time to make that decision would be after
an evidentiary hearing on class certification.
"This ruling is a significant step forward for all California
workers, and sends notice to Silicon Valley that discrimination of
any kind will not be escape legal scrutiny," said lHarmeet K.
Dhillon, lead attorney for the plaintiffs. "It is illegal in
California to discriminate against an employee for his or her
legally protected characteristics, and we are excited to move
forward with discovery into Google's challenged employment
practices that our clients allege discriminate on the basis of
political orientation, race, and gender."
Allegations of conservative bias have been leveled at edge
platforms by both House and Senate Republicans and the President.
Silicon Valley execs deny systematic bias in hiring or content
decisionmaking, but Facebook CEO Mark Zuckerberg has conceded he
understands the concern given the Valley's general liberal bent.
[GN]
GOOGLE LLC: Sept. 3 Nexus 6P Settlement Claims Filing Deadline
--------------------------------------------------------------
Alex Alderson, writing for NotebookCheck, reports that consumers
rejoice! You can now file a compensation claim for your Nexus 6P.
In May, Google and Huawei settled a class action case over their
ill-fated phablet. Principally, the class action concerned two
issues: bootlooping and high battery drain. The two companies
settled to pay compensation up to US$9.75 million and now is your
chance to get a slice of that commiseration pie.
You must have purchased the Nexus 6P in the US between
September 25, 2015, and May 3, 2019, to be eligible for
compensation. Moreover, you must not have bought the device for
resale. Kurtzman Carson Consultants (KCC), the claims administrator
handling the matter, states that there are three possible payment
options. Moreover, you need not have experienced bootloop or
battery drain" to claim or be eligible for payment.
You must be able to supply documentation proving either the battery
drain or bootloop issue to be eligible for the higher tier
compensation amounts, for clarity. Without sounding repetitive, the
class action only extends to those who purchased the Nexus 6P in
the US. You can submit a claim if you are not a US resident or if
you have a non-US address though.
Finally, you have until September 3, 2019 to submit a claim.
Declining to seek compensation still allows you to sue Huawei
Device USA, Inc. or Google LLC for claims related to the Nexus 6P.
You can also write to the United States District Court for the
Northern District of California about why you like or dislike the
settlement offer. KCC stresses that you cannot request a larger
compensation sum, but you can attend the hearing on October 10,
2019, to address the court about the fairness of the Settlement,
should you wish to do so. [GN]
GRUBHUB: Faces TCPA Class Action in Illinois
--------------------------------------------
Eric J. Troutman, Esq., of Squire Patton Boggs (US) LLP, in an
article for The National Law Review, reports that Grubhub may be
working hard to deliver tasty meals to your home but it is also
filling your voicemail box with unwanted messages—at least
according to a recent TCPA class action filed in the Northern
District of Illinois.
In a Complaint filed on June 4 Plaintiff Donna Marshall contends
that Grubhub called her cell phone dozens, or perhaps hundreds, of
times using a device "programmed to sequentially or randomly
access, dial, and call [] stored telephone numbers." Marshall
contends that Grubhub "effectively prevent[ed] her from using her
phone" and "clogg[ed] up" her voicemail.
Marshall contends she asked for these calls to stop on more than
one occasion but they continued even after a Grubhub employee told
her the "problem was fixed." Marshall contends the calls violated
er privacy and the privacy of putative class members.
The class is defined as: All persons in the United States whose
cellular telephone number Grubhub called using similar dialing
equipment as was used to call Plaintiff, or an artificial or
prerecorded voice, where the recipient had not provided such number
to Grubhub, and where such call occurred on or after the date four
years prior to the filing of this action.
Notably other delivery and rideshare companies have faced a number
of TCPA class actions over the past few months, with these entities
commonly seeking to compel arbitration of such suits. It remains to
be seen how Grubhub responds to the suit and whether the
allegations have any merit. [GN]
HANSON AGGREGATES: Averts Class Action Over Recorded Phone Calls
----------------------------------------------------------------
Perry Cooper, writing for Bloomberg Law, reports that a privacy
class action over recorded phone calls was properly decertified
because the lead plaintiff didn't have standing to sue, the Ninth
Circuit affirmed June 5.
"A class must be decertified when the class representatives are
found to lack standing as to their individual claims," Judge Sharon
L. Gleason, sitting by designation from the U.S. District Court for
the District of Alaska, wrote.
NEI Contracting and Engineering Inc. sued its longtime concrete
supplier Hanson Aggregates Inc. [GN]
HAWAII: Court Denies IOA's Bid to Dismiss A.B. Suit
---------------------------------------------------
In the case, A. B., BY HER PARENTS AND NEXT FRIENDS, C.B. AND D.B.,
AND T. T., BY HER PARENTS AND NEXT FRIENDS, K.T. AND S.T.,
Plaintiffs, v. HAWAII STATE DEPARTMENT OF EDUCATION, and OAHU
INTERSCHOLASTIC ASSOCIATION, Defendants, Civ. No. 18-00477 LEK-RT
(D. Haw.), Judge Leslie E. Kobayashi of the U.S. District Court for
the District of Hawaii denied Defendant Oahu Interscholastic
Association ("OIA")'s Jan. 18, 2019 Motion to Dismiss Plaintiffs
A.B., by her parents and next friends, C.B. and D.B., and T.T., by
her parents and next friends, K.T. and S.T.'s Complaint for
Declaratory and Injunctive Relief, Filed Dec. 6, 2018.
The Plaintiffs filed the instant action on Dec. 6, 2018, asserting
federal question jurisdiction. Plaintiff A.B. is a 17 year-old,
12th-grade student at James Campbell High School, who is a member
of the Campbell girls' varsity water polo and swimming teams.
Plaintiff T.T. is also a 17 year-old, 12th-grade student at
Campbell, who is a member of the Campbell girls' varsity water polo
and swimming teams.
According to the Complaint, Defendant Hawaii State Department of
Education ("DOE") is a state administrative agency that manages 292
public schools within the State of Hawai'i, including Campbell,
which is a four-year public high school. The Plaintiffs allege the
DOE receives federal financial assistance and is subject to the
anti-discrimination provisions of Title IX of the Education
Amendments of 1972 ("Title IX"). The OIA is an unincorporated
athletic association composed of the DOE's secondary schools on the
island of Oahu, including Campbell.
The Plaintiffs allege both that the OIA is an instrumentality of,
and is controlled by the DOE, and that they are pervasively
entwined because the OIA's Executive Director is a DOE employee,
and all five regular members of the OIA's Executive Council are
principals of DOE high schools. Because of its connections with
the DOE, the Plaintiffs allege the OIA receives federal financial
assistance, and is subject to the anti-discrimination provisions of
Title IX. The Plaintiffs allege that female athletes at Campbell
suffer worse treatment, fewer benefits, and fewer opportunities
than male athletes, and that the OIA's policies and practices
control and/or greatly influence this disparate treatment.
The Plaintiffs allege that they have submitted numerous complaints
to the DOE regarding unfair treatment, and have made written and
oral requests to obtain equal accommodation and/or engage in
discussions with the DOE regarding the same. In response, the DOE
and Campbell administrators have allegedly retaliated by, inter
alia, threatening to cancel the Campbell girls' water polo team,
their season, or both; and forcing the water polo team to resubmit
their program paperwork after a particularly heated meeting between
the water polo athletes, their parents, the Campbell Principal, and
the Athletic Director, even though it had been previously
submitted.
The Plaintiffs have alleged the following claims: 1) a violation of
Title IX against the Defendants based on their failure to take
remedial actions to meet the anti-discrimination provisions under
Title IX, and their continued unequal treatment of female athletes
at Campbell ("Count I"); 2) a violation of Title IX against the
Defendants based on their failure to provide Campbell female
athletes with equivalent athletic participation opportunities
("Count II"); and 3) a violation of Title IX against the DOE based
on the DOE's retaliation for the Plaintiffs' attempts to report
and/or discuss the DOE's practice of sex discrimination ("Count
III").
In the instant Motion, the OIA argues the Plaintiffs' Title IX
claims against the OIA should be dismissed pursuant to Federal Rule
of Civil Procedure 12(b)(6), because the Complaint does not allege
that the OIA is a recipient of federal funds which is a required
element of a claim brought under Title IX, and therefore, fails to
state a claim upon which relief can be granted. In response, the
Plaintiffs argue the Complaint pleads sufficient facts to support
their theory that the OIA is an indirect recipient of federal
funding, and also sets forth the alternative theories that the OIA
is subject to Title IX liability as a sub-unit of a directly funded
institution, i.e., the DOE; and as the controlling authority over a
federally funded program.
Before the Court is OIA's Motion to Dismiss. The DOE filed a
statement of no opposition on March 15, 2019. The matter came on
for hearing on April 5, 2019.
Because the Complaint alleges that the OIA had controlling
authority over the DOE's interscholastic athletic programs,
including competitive facilities; scheduling of seasons, games, and
tournaments; travel; publicity and promotion; and budget, Judge
Kobayashi concludes that the Plaintiffs have provided sufficient
factual matter to plausibly allege that the OIA is the controlling
authority over the federally funded DOE's athletic programs.
Therefore, the Complaint plausibly alleges that the OIA may be
subject to the anti-discrimination provisions of Title IX under a
"controlling authority" theory. Accordingly, she wil deny the
Motion because there is at least a plausible chance that the
Plaintiffs may succeed on their claims against the OIA, based on
the allegations in the Complaint.
On the basis of the foregoing, the Judge denide OIA's Jan. 18, 2019
Motion to Dismiss. In light of Plaintiffs' Motion for Leave to
File First Amended Complaint, it is not necessary for the OIA to
file its answer to the Complaint at this time. If the Motion to
Amend is denied, the OIA is ordered to file its answer to the
Complaint within 20 days after the magistrate judge issues the
order denying the Motion to Amend. If the Motion to Amend is
granted and the Plaintiffs file an amended complaint, the answers
to the amended complaint will be due in the normal course.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/GcMIZ1 from Leagle.com.
A. B., by her parents and next friends, C.B. and D.B. & T. T., by
her parents and next friends, K.T. and S.T., Plaintiffs,
represented by Mateo Caballero -- mcaballero@acluhawaii.org -- ACLU
of Hawai'i, Elizabeth Kristen, Legal Aid At Work, pro hac vice,
Harrison J. Frahn, IV -- hfrahn@stblaw.com -- Simpson Thacher &
Bartlett LLP, pro hac vice, Jayma M. Meyer -- jmeyer@stblaw.com --
Simpson Thacher & Bartlett LLP, pro hac vice, Jeeyung Cacilia Kim
-- ckim@legalaidatwork.org -- Legal Aid At Work, pro hac vice,
Jongwook Philip Kim, ACLU of Hawaii, Kim Turner, Legal Aid At Work,
pro hac vice & Wyatt A. Honse -- wyatt.honse@stblaw.com -- Simpson
Thacher & Bartlett LLP, pro hac vice.
Hawaii State Department of Education, Defendant, represented by
John M. Cregor, Jr., Office of the Attorney General Civil Rights
Litigation.
Oahu Interscholastic Association, Defendant, represented by Lyle S.
Hosoda, Hosoda & Bonner.
HEALTH INSURANCE: Faces Class Action Over Alleged Fraud
-------------------------------------------------------
Zach Schlein, writing for Daily Business Review, reports that a
federal class action lawsuit has accused two Tampa-based health
care companies of defrauding customers out of millions of dollars
by misrepresenting the benefits of their insurance policies.
A complaint filed in the Southern District of Florida on June 7
named Health Insurance Innovations Inc. and Health Plan
Intermediaries Holdings LLC as defendants in a four-count lawsuit.
The charges against the businesses include allegations of
racketeering as well as aiding and abetting fraud in addition to
unjust enrichment.
The plaintiffs, Elizabeth Belin and Christopher Mitchell, are being
represented by attorneys Jason Kellogg and Jason Doss. According to
the attorneys, the defendants unlawfully led customers to believe
that the limited-benefit indemnity and medical discount plans they
were offering provided the full range of medical benefits included
with traditional health insurance. Kellogg, a partner with Levine
Kellogg Lehman Schneider + Grossman in Miami, said the class action
began with a lawsuit against South Florida company Simple Health
Plans in October 2018 by the Federal Trade Commission.
"The Tampa companies . . . create insurance products -- but it's
not major medical insurance -- and they sell it through third-party
distributors," he said, noting Simple Health had been one such
business partner of Health Insurance Innovations Inc. and Health
Plan Intermediaries Holdings. Kellogg said Simple Health would use
a script to mislead customers regarding the nature of Health
Insurance Innovations plans.
"If you wanted a boots-and-suspenders-type thing, you could buy
this product, in case you had an event where you had to come up
with a deductible," Kellogg said. The attorney added although these
plans were "not meant to cover catastrophic health injuries,"
Simple Health had been advertising them as if they did. The June 7
complaint alleges Health Insurance Innovations Inc. and Health Plan
Intermediaries Holdings loaned Simple Health "millions of dollars
to fund its operations," in addition to training its customer
service agents and providing the company with "extremely generous
commissions." The lawsuit contends Health Insurance Innovations
"paid about $180 million in commissions to Simple Health" between
2014 and October 2018.
Doss, who practices in Atlanta as the owner of the Doss Firm, said
companies such as Health Insurance Innovations and Simple Heath are
victimizing the very people the Affordable Care Act had been
designed to protect.
"People who don't have good health care through their employer are
being targeted all over the country," he said. "Consumers are being
misled as to what the features of their product are."
The named plaintiffs only discovered the true extent of their
benefits once hospitals informed them of how much they owed for
necessary medical procedures, attorneys said.
Kellogg told the Daily Business Review the class comprises
consumers around the U.S. who purchased Health Insurance
Innovations coverage through Simple Health between 2013 and 2018.
The attorney said he and Doss believe roughly half a million
customers purchased a Health Insurance Innovations plan during the
company's partnership with Simple Health.
Noting the $180 million given to Simple Health by Health Insurance
Innovations, the attorneys said they are hoping to award victims of
the alleged scheme in part with the premiums and fees they had to
pay on medical bills. Doss noted the defendants reaped "hundreds of
millions" in profit, and any class action award will be contingent
on the extent of the purported fraud and the damages incurred by
class members.
No attorney has entered an appearance for the defense. Garry
O'Donnell, with Greenspoon Marder's Boca Raton office, has
represented the defendants on past matters, but did not respond to
requests for comment by press time.
Doss and Kellogg suggest they expect to learn more about the reach
and impact of the alleged scheme during the discovery period.
"It may came to light that Health Insurance Innovations used other
distribution channels other than Simple Health to perpetuate this
fraudulent scheme," Doss said. "We've given ourselves leeway in the
complaint to broaden the scope."
Kellogg said, "We know Simple Health was the largest, but if there
are others . . . ."
Doss finished for him: "We'll find out." [GN]
HECLA MINING: Bhattacharya Sues over 23% Drop in Share Price
------------------------------------------------------------
ARUN BHATTACHARYA, individually and on behalf of all others
similarly situated, Plaintiff v. HECLA MINING COMPANY; PHILLIPS S.
BAKER, JR.; LINDSAY A. HALL; and LAWRENCE P. RADFORD, Defendants,
Case No. 1:19-cv-05719 (S.D.N.Y., June 19, 2019) is an action
brought by the Plaintiff on behalf of a class of all persons and
entities who purchased Hecla securities between March 19, 2018 and
May 8, 2019, alleging violation of the Securities Exchange Act of
1934.
According to the complaint, on March 19, 2018, Hecla announced it
was acquiring three high-grade Nevada gold mines through the
acquisition of Klondex Mines Ltd. ("Klondex") for a mix of cash and
stock worth $462 million. After the acquisition closed in July
2018, the Company's Nevada operations became a fifth operating
segment. The Defendants, falsely and misleadingly represented that
the Nevada operations would be "accretive" and cash flow positive,
or at the very least "self-funding", but this was not true.
On May 9, 2019, following the disclosures that the Nevada
operations were cash flow negative and subject to a comprehensive
review to determine the best path forward given the Nevada
operations' poor economics, including the possibility of an
impairment charge, the price of Hecla's common stock declined by
23.5% over two trading days, from a closing price of $2.04 per
share on May 8, 2019, to close at $1.56 per share on May 10, 2019.
Hecla Mining Company, together with its subsidiaries, discovers,
acquires, develops, and produces precious and base metal properties
worldwide. Hecla Mining Company was founded in 1891 and is
headquartered in Coeur d'Alene, Idaho. [BN]
The Plaintiff is represented by:
Jeremy A. Lieberman, Esq.
J. Alexander Hood II, Esq.
Jonathan D. Lindenfeld, Esq.
POMERANTZ LLP
600 Third Avenue, 20th Floor
New York, NY 10016
Telephone: (212) 661-1100
Facsimile: (212) 661-8665
E-mail: jalieberman@pomlaw.com
ahood@pomlaw.com
jlindenfeld@pomlaw.com
- and -
Patrick V. Dahlstrom, Esq.
POMERANTZ LLP
10 South La Salle Street, Suite 3505
Chicago, IL 60603
Telephone: (312) 377-1181
Facsimile: (312) 377-1184
E-mail: pdahlstrom@pomlaw.com
- and -
Peretz Bronstein, Esq.
BRONSTEIN GEWIRTZ & GROSSMAN, LLC
60 East 42nd Street, Suite 4600
New York, NY 10165
Telephone: (212) 697-6484
Facsimile: (212) 697-7296
E-mail: peretz@bgandg.com
HIGH TOP: Roof Garden Residents File Class Action
-------------------------------------------------
Matthew Toth, writing for Daily American, reports that Roof Garden
Acres residents are looking to the courts to deal with water woes
that still need to be addressed by the mobile home park's owners.
More than 170 residents are part of a class action complaint
against High Top LLC claiming it failed to properly maintain the
park's water system. The park along Stoystown Road is owned by High
Top and Thomas Mongold, owner of Divinity Investments and nearby
Cherry Lane Estates.
"Regarding the cause of the outages, (residents) were informed by
Defendent's maintenance person that there had been a rupture in the
Roof Garden water main line that connects to the Somerset Township
Municipal Authority water line," court documents state.
While the lawsuit mentions a line break in late March that left
water barely trickling out of residents' faucets for almost two
weeks, it also states there has been a history of water main breaks
since 2016.
"Defendent's lot agreements with residents provide that (High Top)
is responsible for maintaining the water system that provides water
to the residents," the lawsuit states.
The suit states that failure to provide continual and adequate
water service to the trailer park is a breach of contract.
Residents, who are represented by the Community Justice Project,
are seeking "qualified professionals" to inspect and fix the line,
at High Top's expense. Residents also want a total rent refund for
the month of March.
Roof Garden residents pay $350 per month to rent a lot, plus a $17
flat fee for water service. Residents also pay additional charges
for water usage over 1,000 gallons per month. There are 65 occupied
trailers in the 105-lot mobile home park.
Resident Amanda Housel said residents are coming together to deal
with these and other issues, including potholes throughout the
park.
"We're all pitching in our own money and doing this," she said.
Neither Divinity Investments officials nor Mongold returned
telephone calls to the Daily American on June 5.
In May, Cherry Lane Estates residents joined Somerset Borough's
lawsuit against Divinity Investments, which is also owned by
Mongold's partner Bob Hickey. The park was declared a public
nuisance in December, and Divinity was ordered to pay $300,000 in
past-due water bills and to clean up 14 fire-damaged and 47
dilapidated trailers within 90 days.
Cherry Lane has been the site of 14 arsons and two attempted arsons
since May 2018. Police also believe fires set on Sept. 18, 2016,
and July 5, 2017, both at 122 Gary Lane, were set by the same
individual, who remains at large.
As of May 10, High Top owed $299,5618 to the Somerset Township
Municipal Authority for unpaid bills at the mobile home park.
In 2013, Southeastern Pennsylvania Transportation Authority amended
its class action complaint with Orrstown Bank in federal court. The
suit claims members of the Shippensburg-based bank lied to SEPTA
and other investors to buy Orrstown stock.
The complaint states that the bank's loan committee gave
preferential treatment to Mongold and Hickey's LLCs. Witnesses
claim loans were approved despite the developers' bad credit
information.
"In 2010 alone, Orrstown made loans totaling over $9.7 million to
the Chambersburg Developers' related entities," court documents
state. "By late 2010, the Bank's Loan Committee approved in total
over $21 million in loans to the Chambersburg Developers' related
entities."
According to court documents, the bank's loan lending limit in 2010
was $19 million.
"Indeed, throughout the entire period that the Chambersburg
Developers were borrowing from Orrstown, they had borrowed millions
of dollars from the two other banks, Susquehanna Bank and Farmers
and Merchants Trust Company," court documents state.
Witnesses stated that bank officials, including then-Executive Vice
President and Chief Operating Officer Jeffrey Embly, realized as
early as 2010 that the developers had already went over their legal
limit and began exploring whether they needed to do "work arounds"
to restructure the loans, according to court documents.
"From (witnesses') observations, the Loan Committee over-extended
the Bank and violated the Loan Policy because, in Embly's words,
'Bob needs this,'" court documents state.
SEPTA's court case with Orrstown Bank is ongoing.
Residents of Roof Garden, including Housel, said they have been
calling Mongold about park conditions but have never received a
response.
"It seems like everyone is getting the blame except for Tom," she
said. [GN]
HOME DEPOT: Bradley Arant Attorneys Discuss Supreme Court Ruling
----------------------------------------------------------------
Dylan Black, Esq. -- dblack@bradley.com -- Nicholas Danella, Esq.
-- ndanella@bradley.com -- Zachary Madonia, Esq. --
zmadonia@bradley.com -- and Michael Pennington, Esq. --
mpennington@bradley.com -- of Bradley Arant Boult Cummings LLP, in
an article for JDSupra, report that to the surprise of many
observers (including us), the Supreme Court held in Home Depot USA
Inc. v. George Jackson that a third-party defendant could not
remove class action claims -- under either the general removal
statute, 28 U.S.C. Sec. 1441(a), or the Class Action Fairness Act
(CAFA), 28 U.S.C. Sec. 1453(b). Setting aside Sec. 1441 (for the
moment), we will remind the reader at the outset that CAFA broadly
states that "any defendant" may remove a covered class action.
Nevertheless, in Home Depot, a 5-to-4 majority ruled that only the
"original defendant" sued by the "original plaintiff" can remove
class action claims – and not a third-party defendant or a
counterclaim defendant.
Here's a quick refresher on how we got here. (The facts of Home
Depot are discussed in more detail in a previous blog post.) A
defendant to a collection action filed a third-party class action
claim against Home Depot, which had not been a party to the
original collection action. Based on CAFA, Home Depot removed the
case to federal court.
Home Depot argued that removal was proper under CAFA, which allows
"anydefendant" to remove a covered class action. As Home Depot
reasoned, it never had asserted a claim in the action and,
consequently, it never had been anything but a "defendant." The
district court disagreed and remanded the action back to state
court, and the Fourth Circuit affirmed.
Both lower courts followed Shamrock Oil, a more than 70-year-old
decision holding that an original plaintiff cannot remove
counterclaims filed by the original defendant, as well as decisions
from the Fourth, Sixth, Seventh and Ninth Circuits extending
Shamrock Oil to bar third-party defendants from removing class
action claims.
The fact that the Supreme Court granted cert in Home Depot despite
the absence of a circuit split seemed to suggest (to many, again
including us) that the Court intended to broaden the right to
removal and to overturn those rulings. Oral argument only
reinforced such thinking. Questions from Chief Justice Roberts and
Justices Alito, Gorsuch and Kavanaugh seemed to indicate their
willingness to read CAFA to allow the removal of covered class
action counterclaims and third-party claims, while the commentary
from Justices Ginsburg, Breyer, Sotomayor and Kagan seemed to favor
the opposite. Justice Thomas asked no questions, as is his custom,
and thus gave no indication that he intended to break from the
justices generally considered to be "conservative."
Yet, ultimately, Justice Thomas did exactly that. Writing for a
majority that included Justices Ginsburg, Breyer, Sotomayor and
Kagan, Justice Thomas reasoned that the general removal statute
(Sec. 1441(a)) does not allow removal of class action third-party
claims because it allows "the defendant" to remove only "civil
action[s]," not "claims." A third-party defendant is a defendant
only to a claim, not a civil action. As a result, according to the
majority, the operative defendant for removal purposes under the
general removal statute is the original defendant to the original
plaintiff's complaint, not a third-party counterclaim defendant.
A closer question for the majority was whether CAFA (Sec. 1453(b))
allowed for removal. The removal right under CAFA – which, again,
states that "any defendant" can remove a covered class action -- is
seemingly broader than that under the general removal statute. Home
Depot argued that, as a third-party defendant, it certainly should
qualify as "any defendant" under CAFA and, consequently, it was
entitled to remove the case.
The majority again disagreed. According to Justice Thomas, nothing
in CAFA was intended to alter the meaning of "defendant" for
purposes of removal. Because the majority had already concluded
that "defendant" in the general removal statute refers to the
original defendant, it applied that same meaning to the use of
"defendant" in CAFA. Under the majority's logic, then, CAFA's
references to "any defendant" would really mean "any [original]
defendant." In concluding that CAFA was not intended to expand the
general removal statute's limitation on who may remove, however,
Justice Thomas did not even mention Congress's expressed purpose in
enacting CAFA: to broaden the right to remove covered class actions
to federal court.
The dissenting opinion was robust -- more than twice as long as the
majority opinion. In dissent, Justice Alito, joined by Chief
Justice Roberts and Justices Gorsuch and Kavanagh, urged a plain
text reading of "any defendant" in CAFA. And using "all the
resources of statutory interpretation," the dissenters concluded
that third-party defendants are defendants and are entitled to
remove.
As Justice Alito explained, according to both legal and standard
definitions, a "defendant" is a party sued in a civil proceeding.
That definition encompasses an original defendant, a counterclaim
defendant (that is, an original plaintiff) and a third-party
defendant. Therefore, the words "any defendant" in CAFA must mean
all of these types of defendants/parties. That is particularly true
because Congress could have borrowed the general removal statute's
existing construction -- "the defendant or defendants" -- but chose
for CAFA the broader terms "any defendant." So, Justice Alito
quipped, "third-party defendants are, well, defendants," "just as a
'critical habitat' is a habitat and 'full costs' are costs [and]
zebra finches are finches." Because a third-party defendant is
included in the universe defined as "any defendant," a third-party
class action defendant should not be blocked from removing a case
under CAFA.
The dissenters also argued that a third-party defendant could
remove a case under the general removal statute. Blocking a
third-party defendant from removing under the general removal
statute, Justice Alito wrote, is based on a misreading of Shamrock
Oil. Justice Alito reasoned that Shamrock Oil held only that an
original plaintiff that filed suit in state court cannot change its
mind about the chosen forum once it has become a defendant to a
counterclaim (filed by the original defendant). Shamrock Oil said
nothing about third-party defendants, and Justice Alito emphasized
that none of the rationales underlying Shamrock Oil's holding
"would support a bar on removal by parties other than original
plaintiffs."
We conclude with a few takeaways. First, before Home Depot, a
third-party defendant in a circuit other than the Fourth, Sixth,
Seventh and Ninth had a good faith basis to remove -- and at least
a few district courts in those other circuits had sustained such
removals. But after Home Depot, it will take creative thinking and
likely advanced procedural maneuvering for third-party defendants
to eventually find a way to remove class action claims.
The majority's apparent conclusion that only an "original
defendant" can remove under both the general removal statute (Sec.
1441) and CAFA (Sec. 1453) is somewhat stunning in breadth and
could arguably block removal even if the third-party class action
claims were severed from the original civil action. In some sense,
the third-party defendant still would not be an "original
defendant." Recall that, at the time of removal in the case at
issue, Home Depot and the original defendant (i.e., the third-party
plaintiff) were the only parties in the action. Nevertheless,
attempts to remove despite the decision in Home Depot –- e.g.,
after severance -- will surely be made.
Second, companies that initiate litigation against individuals
should strongly consider bringing those cases in federal court, if
a jurisdictional hook exists. Home Depot will likely embolden the
plaintiffs' bar to use the class device in counterclaims brought by
original individual defendants and to add additional defendants to
those counterclaims without worry that doing so might risk losing
the state forum.
Third, business interests need to flex their lobbying muscle when
it comes to mending the results of decisions like this. There is no
sound policy reason for preventing defendants who were never
plaintiffs from removing class actions, and there is no sound
reason to allow plaintiffs to circumvent CAFA's strong federal
policy favoring a federal forum for class actions by holding their
complaints until an opportunity to file it as a counterclaim in an
unrelated case comes along.
Congress has the power to fix this. The squeaky wheel eventually
gets the grease, and this is one squeak that Congress needs to
hear. Loudly and often. Until they hear it, you may be defending
(for example) seven- and eight-figure TCPA class action
counterclaims for uncapped statutory damages in state court. Ad
nauseum.
Finally, Home Depot provides yet another example of why attempting
to "read the tea leaves" with the Supreme Court is often
challenging. Few, if any, could have predicted that Justice Thomas
would have broken ranks so dramatically from his "conservative"
colleagues in a case that turned on whether a third-party defendant
is included in the plain text of the words "any defendant." [GN]
HOME DEPOT: Caplin & Drysdale Attorneys Discuss Court Ruling
------------------------------------------------------------
Todd E. Phillips, Esq. -- tphillips@capdale.com -- Kevin C. Maclay,
Esq. -- kmaclay@capdale.com -- and Nathaniel R. Miller, Esq., of
Caplin & Drysdale, in an article for Mondaq, report that in a 5-4
decision, Justice Thomas joined Justices Ginsburg, Breyer,
Sotomayor, and Kagan to hold that two removal statutes, the general
removal provision and the removal provision in the Class Action
Fairness Act of 2005 (CAFA"), prevent third-party defendants from
removing a suit from state to federal court. Importantly, the Court
held that only original defendants named in the complaint have the
authority to remove under either statute, even in the circumstance
where a third-party defendant who was previously uninvolved in the
case and had no role in selecting the forum was added to the
action.
Background
Citibank initiated a debt-collection action in North Carolina state
court against a consumer for charges he incurred on a Home Depot
credit card. Shortly thereafter, the consumer answered the
complaint and filed his own claims: a counterclaim against Citibank
and third-party class-action claims against Home Depot and Carolina
Water Systems for claims arising out of an alleged scheme between
Home Depot and Carolina Water Systems to induce homeowners to buy
water treatment systems at inflated prices.
After Citibank dismissed its claims against the consumer, Home
Depot filed a notice of removal to federal court. The consumer
moved to remand to state court, arguing that precedent barred
removal by a "third-party/additional counter defendant like Home
Depot." The District Court granted the motion to remand and the
Fourth Circuit affirmed, holding that neither the general removal
provision, 28 U.S.C. Section 1441(a), nor the removal provision in
CAFA, 28 U.S.C. Section 1453(b), allowed Home Depot to remove the
class-action claims filed against it.
The Court's Analysis
The Supreme Court considered whether either 28 U.S.C. Sections
1441(a) or 1453(b) allows a third-party counterclaim defendant to
remove a lawsuit to federal court or whether removal authority is
limited to the original defendant under those statutes.
The Court began by analyzing the plain language of Section 1441(a).
The statute itself allows "the defendant or the defendants" to
remove "any civil action" from state court to federal court when
the federal district court has "original jurisdiction" over the
action. Significantly, the Court concluded that "the defendant" to
the "civil action" over which the district court has "original
jurisdiction" is limited to the defendant to the original
complaint, not a party named as a defendant in a counterclaim. The
Court pointed to multiple sources in support of its interpretation
of the term "defendant" having such a limited scope. First, the
Federal Rules of Civil Procedure differentiate between third-party
defendants, counterclaim defendants, and defendants. Second, in
other removal statutes, Congress explicitly extended removal
authority to parties other than the original defendant, but not in
Section 1441(a). Third, the Court previously held in Shamrock Oil &
Gas Corp. v. Sheets that a counterclaim defendant who was the
original plaintiff is not one of "the defendants" for the purposes
of Section 1441(a), and therefore there was no reason to reach a
different conclusion for a counterclaim defendant who was not
originally part of the suit. Finally, the Court determined that a
broader interpretation would make little sense when read with other
removal provisions, such as Section 1446(b)(2)(A).
In a similar vein, the Court concluded that CAFA's removal
provision, 28 U.S.C. Section 1453(b), does not permit a third-party
counterclaim defendant to remove. CAFA "provides district courts
with jurisdiction over 'class action[s]' in which the matter in
controversy exceeds $5,000,000 and at least one class member is a
citizen of a State different from the defendant." The statute
states that "[a] class action may be removed . . . without regard
to whether any defendant is a citizen of the State in which the
action is brought, except that such action may be removed by any
defendant without the consent of all defendants." This statute, the
Court found, only alters the following two rules regarding removal:
if at least one defendant is a citizen of the forum state, the
action cannot be removed; and all defendants must consent to
removal. But it does not alter Section 1441(a)'s limitation on
which parties can remove, suggesting Congress's intent to leave the
scope of Section 1441(a) as-is.
Ultimately, the Court acknowledged that its interpretation allows
defendants/counterclaim plaintiffs to tactically prevent removal by
third-party defendants, but in the Court's view that result is a
consequence of the statute Congress wrote. If Congress disagrees
with this outcome, Justice Thomas wrote, it can rewrite the
statute. [GN]
HOME DEPOT: Gibson Dunn Attorneys Discuss Supreme Court Ruling
--------------------------------------------------------------
Allyson N. Ho, Esq. -- aho@gibsondunn.com -- Mark A. Perry, Esq. --
mperry@gibsondunn.com -- Theodore Boutrous Jr, Esq., Christopher
Chorba, Esq. -- cchorba@gibsondunn.com -- and
Theane Evangelis, Esq. -- tevangelis@gibsondunn.com -- of Gibson,
Dunn & Crutcher, in an article for Mondaq, report that in Home
Depot U.S.A., Inc. v. George W. Jackson, No. 17-1471, on June 11,
the Supreme Court held 5-4 that when a defendant in a state court
action files a counterclaim against a third party as a class
action, the third-party defendant may not remove the class action
counterclaim to federal court.
Background:
Citibank filed an action in state court to collect on a credit card
debt. In response, the debtor filed a class action counterclaim
under state consumer protection law against Citibank and named Home
Depot -- a third-party retailer not previously involved in the case
-- as an additional defendant. Relying upon the Class Action
Fairness Act of 2005 (CAFA), which permits "any defendant" to
remove certain state class actions to federal court, see 28 U.S.C.
Sec. 1453(b), as well as the general removal provision, 28 U.S.C.
Sec. 1441(a), Home Depot sought to remove the case to federal
court. A federal district court concluded that Home Depot could not
do so because Home Depot was not a defendant in the original
debt-collection action and therefore was not a "defendant" within
the meaning of the removal statute. The Fourth Circuit affirmed.
Issue:
Does a third-party defending itself against a class action
counterclaim qualify as a "defendant" under the general removal
provision or the removal provision of CAFA, such that the
third-party may remove the case from state to federal court?
Court's Holding:
No. The term "defendant" in the removal statutes means only "the
party sued by the original plaintiff," not a counterclaim defendant
or third-party joined in the case by a defendant.
"[T]he limits that Congress has imposed on removal show that it did
not intend to allow all defendants an unqualified right to
remove."
Justice Thomas, writing for the majority
What It Means:
The Court explained that district courts determine whether a civil
action is removable to federal court by assessing whether the
action -- not the claim -- could have been filed originally in
federal court. As a result, the Court reasoned, removal must be
based on the complaint, not any later-filed counterclaims or
third-party claims.
The Court emphasized that "the filing of counterclaims that
included class-action allegations against a third party did not
create a new 'civil action' with a new 'plaintiff' and a new
'defendant.'" Instead, the "defendant" for purposes of removal was
the party sued by the original plaintiff. The Court thus extended
to third-party counterclaim defendants its longstanding holding in
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941), that an
original plaintiff may not remove a state court counterclaim to
federal court.
The Court concluded that CAFA did not require a different result:
CAFA was "intended only to alter certain restrictions on removal"
-- such as the requirement that all defendants agree to removal --
"not [to] expand the class of parties who can remove a class
action." The Court thus held that the word "defendant" had the same
meaning in CAFA as in the general removal provision.
The decision was authored by Justice Thomas and joined by Justices
Ginsburg, Breyer, Sotomayor, and Kagan. Justice Alito authored a
dissent on behalf of the four remaining Justices. Although
"counterclaim class actions" are relatively rare, Justice Alito
cautioned that the Court's decision could encourage more plaintiffs
to structure their class actions as counterclaims in state courts
in an attempt to circumvent the protections afforded by CAFA and to
avoid litigating in a federal forum. The majority emphasized that
authority to amend the statute to preclude such litigation tactics
rests with Congress, not the Court. [GN]
HOME DEPOT: Proskauer Rose Attorneys Discuss Supreme Court Ruling
-----------------------------------------------------------------
Elise M Bloom, Esq. -- ebloom@proskauer.com -- and Noa M Baddish,
Esq. -- nbaddish@proskauer.com -- of Proskauer Rose LLP, in an
article for The National Law Review, report that in a 5-4 decision
in Home Depot U.S.A. Inc., v. Jackson, 587 U.S. __ (2019), the
United States Supreme Court held that a third-party counterclaim
defendant does not qualify as a "defendant" under the general
removal statute, 28 U.S.C. Sec. 1441(a) or under the Class Action
Fairness Act of 2005 ("CAFA") and therefore cannot remove class
action claims to federal court under either statute.
Brief Background
This case started when a bank filed a debt collection action
against George Jackson in state court for charges that Jackson
incurred on a Home Depot credit card. Jackson then filed an
individual counterclaim against the bank and third-party class
action claims against Home Depot U.S.A., Inc. and Carolina Water
Systems, Inc. alleging that Home Depot and Carolina Water Systems
improperly induced homeowners to buy water treatment systems at
inflated prices.
After the bank dismissed its claims against Jackson, Home Depot
filed a notice of removal to federal court under both the general
removal statute and CAFA. Jackson moved to remand to state court.
The district court granted his motion, and the United States Court
of Appeal for the Fourth Circuit granted Home Depot permission to
appeal and affirmed the district court's decision remanding the
case to state court.
Home Depot filed a petition for a writ of certiorari with the
Supreme Court, which the Court granted.
The Supreme Court's Decision
The Supreme Court analyzed the text of both the general removal
statute and CAFA and concluded that both statutes only intended for
defendants sued by the original plaintiff to an action to be able
to remove the case to federal court.
The general removal statute provides that "the defendant or the
defendants" in a "civil action" may remove to federal court. As a
result, the Court held that it did not matter that Home Depot was a
defendant to a claim asserted against it because the statute refers
to "civil actions, not claims." Id. at 6. The Court acknowledged
that the dissent's view that the term "defendant" is a "person sued
in a civil proceeding" was a plausible reading of the statute but
concluded that it was not the best interpretation.
The Court found that whether CAFA permitted a counterclaim
defendant to remove was a closer question because CAFA allows "any
defendant" to a "class action" to remove to federal court.
Despite the seemingly broader language, the Court concluded that
the definition of "defendant" under CAFA was no different than
under the general removal statute. The Court explained that while
CAFA modified other provisions of the general removal statute by
allowing a defendant to remove without the consent of other
defendants and relaxing the diversity requirement, CAFA did not
expand the types of parties eligible to remove a class action.
The majority opinion was written by Justice Thomas and joined by
Justices Breyer, Ginsburg, Kagan, and Sotomayor and the dissent was
written by Justice Alito and joined by Chief Justice Roberts and
Justices Gorsuch and Kavanaugh.
Implications
As the majority tacitly acknowledged and the dissent vigorously
argued, limiting the definition of "defendant" in this manner could
lessen the impact of CAFA. As the dissent points out, theoretically
a plaintiff could prevent a defendant from removing a class action
to federal court if the plaintiff asserts the class claims as a
counterclaim in a pre-existing lawsuit. That being said, if such
tactics are used to prevent removal, the Court was clear that it
will be up to Congress to amend the statute. [GN]
HOSPITAL ASSOCIATION: Tenn. App. Affirms Fowler Suit Dismissal
---------------------------------------------------------------
The Court of Appeals of Tennessee, at Knoxville, issued an Opinion
affirming the District Court's judgment granting Defendant's Motion
to Dismiss in the case captioned SHALEEN FOWLER, ET AL. v.
MORRISTOWN-HAMBLEN HOSPITAL ASSOCIATION, ET AL. No.
E2018-00782-COA-R3-CV. (Tenn. App.).
The plaintiffs now appeal the finding that Tennessee Code Annotated
section 1-3-119 does not violate Article I, section 17 of the
Tennessee Constitution.
Both Shaleen and Melissa Turner Livesay were involved in unrelated
automobile accidents in 2014. Each of Appellants was treated at
Morristown-Hamblen County Healthcare (Morristown-Hamblen) for their
injuries. Covenant Health performs all billing and collection for
patients who receive services at Morristown-Hamblen. Each of
Appellants was treated as an uninsured person within the meaning of
that term in Tennessee Code Annotated section 68-11-262. They
allege that Appellees charged them in excess of the statutory rate
applicable to uninsured persons in violation of section 68-11-262.
The defendants asserted as a defense that Tennessee Code Annotated
section 1-3-119 precludes any private right of action under section
68-11-262. Pursuant to Rule 24.04 of the Tennessee Rules of Civil
Procedure, the plaintiffs submitted a notice of claim that the
statute was unconstitutional and violated Article I, section 17 of
the Tennessee Constitution.
In its consideration of the motion to dismiss for failure to state
a claim upon which relief can be granted, the trial court held that
the statute did not violate the Open Courts Clause of Article I,
section 17. This holding necessitated a finding that Tennessee Code
Annotated section 68-11-262 did not give a private right of action
and, therefore, the plaintiffs did not have a cause of action.
Appellants raise one issue for review which the Court have restated
as follows:
A. Whether the trial court erred in holding Tennessee Code
Annotated section 1-3-119 does not violate Article I, section 17 of
the Tennessee Constitution.
Appellees present an additional issue for review if, but only if,
this court reverses the trial court's Order upholding the
constitutionality of T.C.A. Section 13-119 and dismissal of the
Complaint. The have restated the issue as follows:
B. Whether the trial court erred in its interpretation of
Tennessee Code Annotated section 68-11-262 and its determination
that Appellants were within the meaning of uninsured patient under
that statute.
The Court held, "On the issue of constitutionality of a statute,
our Supreme Court has indicated as follows: 'It is well-settled in
Tennessee that courts do not decide constitutional questions unless
resolution is absolutely necessary to determining the issues in the
case and adjudicating the rights of the parties. In evaluating the
constitutionality of a statute, the Court begins with the
presumption that an act of the General Assembly is constitutional.
A statute comes to a court clothed in a presumption of
constitutionality since the Legislature does not intentionally pass
an unconstitutional act. The presumption of constitutionality
applies with even greater force when a party brings a facial
challenge to the validity of a statute. In such an instance, the
challenger must establish that no set of circumstances exists under
which the statute, as written, would be valid. '
The Court further held, "Our Supreme Court has addressed the Open
Courts Clause on numerous occasions. In Scott v. Nashville Bridge
Co., 143 Tenn. 86, 223 S.W. 844 (1919), the Court stated that the
provision of section 17 of article 1 of our State Constitution is a
mandate to the judiciary, and was not intended as a limitation of
the legislative branch of the government. Additionally, the Court
in Harrison v. Schrader, 569 S.W.2d 822 (Tenn. 1978) further
elaborated on this issue and stated that the constitutional
guaranty providing for open courts and insuring a remedy for
injuries does not guaranty a remedy for every species of injury,
but applies only to such injuries as constitute violations of
established law of which the courts can properly take cognizance."
In general, the General Assembly of Tennessee has broad powers to
alter, amend, and abolish statutory and common law rights.
Additionally, the legislature has the broad authority to determine
which rights are personal in nature and enforceable through a
private cause of action.
In Appellants' argument that section 1-3-119 does violate the Open
Courts Clause, they rely on a decision by our Supreme Court in
Townsend v. Townsend, 7 Tenn. 1 (1821) and a law review article by
former Justice William C. Koch. They assert that the Open Courts
Clause is a mandate, not only to the judiciary, but to the
legislature as well. The language in Townsend reads as follows: Our
State Constitution, Art. 11, section 7, ordains that all courts
shall be open, and every man for an injury done him in his lands,
goods, person, or reputation, shall have remedy by course of law,
and right and justice administered without sale, denial, or delay.
This clause relates to every possible injury which a man may
sustain and which affects him in respect to his real or personal
property, or in respect to his person or reputation, and includes
the right which is vested in him to demand the execution of a
contract which being a personal right to a chattel is, when
performance is denied or withheld, an injury to him in his goods or
chattels. And with respect to it right and justice is to be done,
without sale, denial, or delay.
The Appellants' arguments are not compelling. Even if the language
set out in Scott is merely dicta, that language has been reiterated
and reechoed through multiple cases to become the framework that
guides us today.. The decisions in Scott and its progeny, as set
out above, are the current framework we must follow. The arguments
advanced by Appellants simply do not comport with this framework
and are not supported by precedent in Tennessee case law. Any
deviation from this framework is not in our discretion; our Supreme
Court is the proper judicial body to consider any change in this
precedence.
Thus, the Court maintains that the Open Courts Clause is a mandate
solely to the judiciary to provide remedies to properly recognized
causes of actions. In the instant case, the trial court correctly
held that the statute under review is not unconstitutional and that
there is no statutory nor common law cause of action. Therefore,
Appellants do not have a cause of action and the motion to dismiss
was proper.
Accordingly, the Court affirms the decision of the trial court.
A full-text copy of the Tenn. App.'s June 24, 2019 Opinion is
available at https://tinyurl.com/y2gu7etn from Leagle.com.
F. Braxton Terry , Morristown, Tennessee, and W. Lewis Jenkins,
Jr., 112 W Court St; Dyersburg, Tennessee 38024, for the
appellants, Shaleen Fowler and Melissa Turner Livesay.
George E. Koontz and Richard T. Klingler, 320 N Holtzclaw Ave,
Chattanooga, TN 37404, F. Michael Fitzpatrick --
MFITZPATRICK@ADHKNOX.COM -- Knoxville, Tennessee, for the
appellees, Morristown-Hamblen Hospital Association and Covenant
Health.
Herbert H. Slatery, III, Attorney General and Reporter, Andree
Sophia Blumstein, Solicitor General, and Melissa Broadhag, Senior
Assistant Attorney General, for the intervenor-appellee, State of
Tennessee.
ILE-BIZARD-STE-GENEVIEVE: Residents File Suit Over Flood Crisis
---------------------------------------------------------------
Katrina Arguin, writing for The Suburban, reports that residents of
Ile-Bizard-Ste-Genevieve borough filed a class-action lawsuit on
May 24 against the borough and the borough mayor, Normand
Marinacci, in light of events that occurred during the 2019 flood
crisis, alleging a lack of preparation that cost residents
thousands of dollars and/or even their homes. In early May
residents were instructed to stop building a dike on Joly street in
Ile-Bizard, because according to authorities, it would've made
matters worse.
Another street in Ile-Bizard where a dike was built was left with a
pool of water for over a month, in which the city didn't provide
sufficient pumps to remove the water. In another event, the borough
mayor allegedly refused sandbags offered by the military when the
island was short of sandbags to begin with. A sworn statement by an
Ile-Bizard resident says that even the military expressed their
frustration with the mayor not giving permission to help this
area.
Residents were left with the impression that the city gave up too
soon, leaving many people behind. In some areas that were mainly
evacuated there were left for the most part only the elderly, less
fortunate, or disabled. In addition, residents of Ile-Mercier have
been and still are living in hotel rooms, for over six weeks now,
because the bridge remains closed from the damaged caused by the
flood.
The mayor, however, has said he was "surprised" by the class action
and that he thought the borough did an "excellent job" protecting
its citizens from the floods. [GN]
INDIANA: Court Denies T. Ganus's Bid to Certify Suit
----------------------------------------------------
The United States District Court for the Northern District of
Indiana, South Bend Division, issued an Opinion and Order granting
Plaintiffs’ Motion for Leave to File Amended Complaint in the
case captioned THOMAS R. GANUS, Plaintiff, v. ROBERT E. CARTER,
JR., et al., Defendants. Cause No. 3:18-CV-928-RLM-JEM. (N.D.
Ind.).
Thomas R. Ganus, a prisoner without a lawyer, seeks leave to file a
second amended complaint) alleging that, while housed at the
Indiana State Prison, he couldn't file a petition for transfer in
his criminal case due to restricted access to the law library and
legal research, and that he was retaliated against for filing
grievances regarding his lack of law library access. The proposed
second amended complaint adds facts and two new defendants. In the
interests of justice, the court will permit the amendment.
A filing by an unrepresented party is to be liberally construed,
and a pro se complaint, however inartfully pleaded, must be held to
less stringent standards than formal pleadings drafted by lawyers.
Mr. Ganus again asks the court to certify this case as a class
action. As explained before, it would be plain error to permit this
imprisoned litigant who is unassisted by counsel to represent his
fellow inmates in a class action.
Mr. Ganus's second amended complaint names nine defendants: Warden
Ron Neal, Executive Assistant Mark Newkirk, Unit Team Manager
Marion Thatcher, Case Manager Kyle Moore, Corrections Lieutenant
Pauline Williams, Law Library Supervisor Bessie Leonard, Law
Library Supervisor Kimberly Creasy, Law Library Supervisor Erin
Jones, and Law Library Supervisor Doreen Kirby.
Prisoners are entitled to meaningful access to the courts.The right
of access to the courts is the right of an individual, whether free
or incarcerated, to obtain access to the courts without undue
interference. The First Amendment right to petition and the
Fourteenth Amendment right to substantive due process protect the
right of individuals to pursue legal redress for claims that have a
reasonable basis in law or fact. Denial of access to the courts
must be intentional; simple negligence will not support a claim
that an official has denied an individual of access to the courts.
In other words, the mere denial of access to a prison law library
or to other legal materials is not itself a violation of a
prisoner's rights; his right is to access the courts and only if
the defendants' conduct prejudices a potentially meritorious legal
claim has the right been infringed.
To the extent that Mr. Ganus also alleges that the defendants
maintain policies that result in inadequate law library access and
deprive him of his right to access the courts, he can't proceed
because he has not demonstrated that his right to access the courts
was impinged.2 Likewise, Mr. Ganus can't proceed on a claim against
any defendant based on failure to properly train3and supervise Law
Library Staff, because he hasn't alleged a constitutional violation
caused by the alleged failure to train and supervise. Similarly,
because Mr. Ganus hasn't alleged a constitutional violation, he
can't demonstrate that any defendant caused that violation by
failing to provide adequate staff to operate the law library.
Mr. Ganus also alleges that he filed complaints and grievances
against Kimberly Creasy and Erin Jones for the denial of law
library access, and that in response to those complaints, Kimberly
Creasy and Erin Jones retaliated by continuing to deny Mr. Ganus
the law library access he needed to file his petition for transfer.
To prevail on his First Amendment retaliation claim, [Mr. Ganus]
must show that (1) he engaged in activity protected by the First
Amendment; (2) he suffered a deprivation that would likely deter
First Amendment activity in the future and (3) the First Amendment
activity was at least a motivating factor in the Defendants'
decision to take the retaliatory action.
Mr. Ganus alleges that he engaged in protected speech when he filed
complaints and grievances, and Ms. Creasy and Ms. Jones denied Mr.
Ganus the law library access he needed to timely file a petition
for transfer because he filed those complaints. He has adequately
pleaded his retaliation claim against Kimberly Creasy and Erin
Jones.
Mr. Ganus further alleges that Doreen Kirby, who replaced Erin
Jones when she resigned, retaliated against him by refusing to
assist him with filing his proposed second amended complaint in
this case. More specifically, she refused to affix the rubber stamp
necessary before e-filing a document with the court, indicating
both that she was not authorized to stamp the document and that she
didn't have the stamp. She also refused to notarize Mr. Ganus'
proposed second amended complaint because she's not a notary. Mr.
Ganus then sought the assistance of Kyle Moore, who also refused to
notarize the proposed second amended complaint and meaningfully
assist with finding someone who could place the appropriate rubber
stamp on the document.
He was instead referred back to Doreen Kirby, even though it was
already clear that she could or would not help. As a result, Mr.
Ganus was required to file his second proposed amended complaint
through the United States Mail. Mr. Ganus alleges that Doreen Kirby
and Kyle Moore had ridiculed him for filing this lawsuit and that
their actions were taken in retaliation for filing the lawsuit. The
isn't the type of deprivation that would likely deter future First
Amendment activity, so the court won't allow Mr. Ganus to proceed
on these claims.
Accordingly, the court grants Thomas R. Ganus's motion for leave to
amend his complaint (2) directs the Clerk to docket the second
amended complaint (3) grants Mr. Ganus leave to proceed against
Kimberly Creasy and Erin Jones in their individual capacities for
compensatory and punitive damages for retaliating against him by
restricting law library access necessary to file a petition for
transfer within the time allowed, in violation of the First
Amendment (4) dismisses all other claims
A full-text copy of the District Court's June 24, 2019 Opinion and
Order is available at https://tinyurl.com/y56bespx from
Leagle.com.
Thomas R Ganus, on his own behalf and on behalf of a class of those
similarly situated, Plaintiff, pro se.
Kimberly Creasy, Law Library Supervisor & Erin Jones, Law Library
Supervisor, Defendants, represented by Ryan J. Guillory , Indiana
Attorney General's Office Indiana Government Center South.
IQVIA INC: 7th Cir. Set to Rule on Jurisdiction Issue
-----------------------------------------------------
Cook County Record reports that the U.S. Court of Appeals for the
Seventh Circuit is poised to become the first appeals court in the
country to decide whether a landmark U.S. Supreme Court decision
could stop additional plaintiffs from joining class action lawsuits
in states where they don't live.
At issue is the Supreme Court's decision in Bristol Meyers Squibb
v. Superior Court of California. In that decision, the justices
found non-residents couldn't join a class action claim against a
defendant whose principal presence was determined to be in a
different state. The decision overrruled the California Supreme
Court, which had determined out-of-state plaintiffs could join a
mass action against pharmaceutical company Bristol Meyers Squibb.
In the new case heading to the Seventh Circuit court in Chicago,
appeals judges have been asked to weigh in on whether the same
principle excluding out-of-state plaintiffs from class actions in
state courts should also extend to the federal courts.
Federal district courts in various parts of the country have split
on the matter, but a judge in the Northern District of Illinois in
Chicago found in the case of Mussat v. IQVIA Inc. that federal
courts lacked jurisdiction over non-resident class members because
the defendant was not incorporated, or had its main headquarters,
in Illinois.
The Illinois district court formed its opinion based on the 2017
Bristol Meyers decision.
A. Paul Heeringa -- pheeringa@manatt.com -- an attorney in the
Chicago office of Manatt, Phelps and Phillips, said the Northern
District has been fairly consistent in applying the Bristol Meyers
Squibb ruling to class actions.
Heeringa said that it is always hard to tell how an appeals court
will rule, but that the "Seventh Circuit does not tend to overturn
the Northern District very much."
"As a defense, I certainly hope it will be affirmed," Heeringa
said, adding that he believes the decision will be handed down soon
as the judges have been fully briefed.
The decision in Illinois was replicated in various districts, but a
federal judge in Tennessee found that federal class actions were
different from state mass actions. The judge there concluded the
Bristol Meyers Squibb decision involved the jurisdiction exercised
by a state court, and therefore did not apply to a nationwide
action filed in a federal court.
If the Seventh Circuit decides to affirm, it may mean that class
actions filed within its borders can only include jurisdictional
residents. [GN]
JEFFERIES FINANCIAL: Francl Sues over Jefferies Merger Deal
-----------------------------------------------------------
JASON FRANCL, individually and on behalf of all others similarly
situated, Plaintiff v. PAUL J. BORDEN; CHRISTIAN E. FOULGER; JOSEPH
S. STEINBERG; BRIAN P. FRIEDMAN; JIMMY HALLAC; PATRICK D.
BIENVENUE; TIMOTHY M. CONSIDINE; MICHAEL A. LOBATZ; JEFFERIES
FINANCIAL GROUP INC.; HEAT MERGER SUB, LLC, and DOES 1-25,
Defendants, Case No. 37-2019-0030374-CU-BT-NC (Cal. Super., San
Diego Cty., June 13, 2019) is a class action on behalf of holders
of HomeFed common stock against the Board of Directors, arising out
of the agreement to sell HomeFed to Jefferies Financial Group Inc.,
and Heat Merger Sub, LLC. The action seeks to enjoin the Defendants
from further breaching their fiduciary duties in their pursuit of a
sale of the Company at an unfair price through an unfair and
self-serving process to Jefferies.
According to the complaint, on May 9, 2019, Jefferies filed a
Registration Statement on Form S-4 with the U.S. Securities and
Exchange Commission whereby the Defendants solicited votes from
HomeFed stockholders to approve the Proposed Acquisition from the
Class. The Registration Statement contains materially misleading
information and fails to disclose additional material information.
In particular, the Registration Statement fails to disclose
material information concerning the Company's financial projections
and the valuation analysis conducted by Houlihan Lokey.
Because the Individual Defendants dominate and control the business
and corporate affairs of HomeFed, there exists an imbalance and
disparity of economic power between them and the public
stockholders of HomeFed. Therefore, it is inherently unfair for the
Defendants to execute and pursue any Proposed Acquisition agreement
under which they will reap disproportionate benefits to the
exclusion of obtaining the maximum stockholder value. Nonetheless,
instead of attempting to negotiate a contract reflecting the best
consideration reasonably available for HomeFed stockholders, who
they are duty-bound to serve, the Defendants disloyally placed
their own interests first, and tailored the terms and conditions of
the Proposed Acquisition to meet their own personal needs and
objectives.
In short, the Proposed Acquisition is designed to unlawfully divest
HomeFed public stockholders of the Company's valuable assets for
grossly inadequate consideration.
Jefferies Financial Group Inc., a financial services company,
engages in investment banking and capital markets, asset
management, and direct investing businesses in the Americas,
Europe, and Asia. The company was formerly known as Leucadia
National Corporation and changed its name to Jefferies Financial
Group Inc. in May 2018. Jefferies Financial Group Inc. was founded
in 1968 and is headquartered in New York, New York. [BN]
The Plaintiff is represented by:
Stephen J. Oddo, Esq.
Brian J. Robbins, Esq.
ROBBIN ARROYO LLP
5040 Shoreham Place
San Diego, CA 92122
Telephone: (619) 525-3990
Facsimile: (619) 525-3991
E-mail: brobbins@robbinsarroyo.com
soddo@robbinsarroyo.com
JUMIO CORPORATION: Marshall Sues over Biometric Data Collection
---------------------------------------------------------------
BRIAN MARSHALL, individually and on behalf of all others similarly
situated, Plaintiff v. JUMIO CORPORATION, Defendant, Case No.
2019CH07095 (Ill. Cir., Cook Cty., June 12, 2019) seeks to redress
the Defendant's unlawful collection, use, storage, and disclosure
of the Plaintiff's sensitive biometric data.
The Plaintiff alleges in the complaint that the Defendant violated
the Biometric Information Privacy Act when the Defendant failed to
inform in writing the Plaintiff of the purpose and length of time
for which the Plaintiff's facial geometry was being collected,
stored, disseminated and used; provide a publicly available
retention schedule or guidelines for permanent destruction of the
biometric data; and provide a written release, as required by the
Biometric Information Privacy Act.
Jumio Corporation develops and delivers digital ID verification and
scanning solutions. Jumio Corporation was founded in 2009 and is
based in Palo Alto, California. It has locations in Vienna/Wien and
Linz, Austria; London, United Kingdom; and India. The company also
has a sales office in Singapore. [BN]
The Plaintiff is represented by:
Ryan F. Stephan, Esq.
Teresa M. Becvar, Esq.
Catherine T. Mitchell, Esq.
STEPHANZOURAS, LLP
l00 North Riverside Plaza, Suite 2150
Chicago, IL 60606
Telephone: (312) 233-1550
Facsimile: (312) 233-1560.f
E-mail: jzouras@stephanzouras.com
rstephan@stephanzouras.com
tbecvar@stephanzouras.com
cmitchell@stephanzouras.com
LA TUTORS 123: Underpays Tutors, Kohut Suit Alleges
---------------------------------------------------
MATTHEW KOHUT, individually and on behalf of all others similarly
situated, Plaintiff v. LA TUTORS 123; ARASH FAYZ; and DOES 1-1-,
INCLUSIVE, Defendants, Case No. 19STCV20606 (Cal. Super., Los
Angeles Cty., June 12, 2019) is an action against the Defendants
for failure to pay minimum wages, overtime compensation, authorize
and permit meal and rest periods, provide accurate wage statements,
and reimburse necessary business expenses.
The Plaintiff Kohut was employed by the Defendants as tutor.
LA Tutors 123 was founded in 2007 as a premier test preparation,
academic consultation, and private tutoring company. [BN]
The Plaintiff is represented by:
Jonathan J. Delshad, Esq.
Elie D. Ghodsizadeh, Esq.
LAW OFFICES OF JONATHAN J. DELSHAD, PC
1663 Sawtelle Blvd., Suite 220
Los Angeles, CA 90025
Telephone: (424) 255-8376
Facsimile: (424) 256-7899
E-mail: jdelshad@delshadlegal.com
eghodsi@delshadlegal.com
LIBERATOR MEDICAL: Sept. 30 Settlement Fairness Hearing Set
-----------------------------------------------------------
The following statement is being issued by Robbins Geller Rudman &
Dowd LLP regarding the Liberator Settlement:
IN THE EIGHTH JUDICIAL DISTRICT COURT FOR THE STATE OF NEVADA
IN AND FOR THE COUNTY OF CLARK
DAN SCHMIDT, on Behalf of Himself and All Others
Similarly Situated,
Plaintiff,
vs.
LIBERATOR MEDICAL HOLDINGS, INC., et al.,
Defendants.
AND ALL CONSOLIDATED ACTIONS.
Master File No. A-15-728234-B
Dept No. XI
CLASS ACTION
SUMMARY NOTICE
TO:
ALL HOLDERS OF LIBERATOR MEDICAL HOLDINGS, INC. (“LMH”) COMMON
STOCK WHO RECEIVED CONSIDERATION FOR THEIR SHARES IN THE
ACQUISITION OF LMH BY C.R. BARD, INC. (“BARD”) FOR THE PRICE OF
$3.35 PER SHARE, WHICH CLOSED ON JANUARY 21, 2016 (THE
“ACQUISITION”)
YOU ARE HEREBY NOTIFIED, pursuant to an Order of the Eighth
Judicial District Court for the State of Nevada, Clark County, that
a hearing will be held on September 30, 2019, at 9:00 a.m., before
the Honorable Elizabeth Gonzalez of the Eighth Judicial District
Court of Clark County, Nevada, 200 Lewis Avenue, Las Vegas, Nevada,
Courtroom 3E, for the purpose of determining: (1) whether the
proposed settlement of the Litigation for $4,750,000 should be
approved by the Court as fair, reasonable, and adequate; (2)
whether an Order and Final Judgment should be entered by the Court
dismissing the Litigation with prejudice and releasing the Released
Claims and the Settled Defendant's Released Claims; (3) whether the
Plan of Allocation for the Net Settlement Fund is fair, reasonable,
and adequate and should be approved; and (4) whether the
application of Class Counsel for the payment of attorneys' fees and
expenses should be approved.
IF YOU HELD LMH COMMON STOCK AND RECEIVED CONSIDERATION IN THE
ACQUISITION FOR THE PRICE OF $3.35 PER SHARE, WHICH CLOSED ON
JANUARY 21, 2016, YOUR RIGHTS MAY BE AFFECTED BY THE SETTLEMENT OF
THIS LITIGATION, INCLUDING THE RELEASE AND EXTINGUISHMENT OF CLAIMS
YOU MAY POSSESS RELATING TO YOUR OWNERSHIP OF LMH COMMON STOCK. If
you have not received a detailed Notice of Proposed Settlement of
Class Action (“Notice”) and a copy of the Proof of Claim and
Release form, you may obtain copies by writing to Liberator
Settlement, Claims Administrator, c/o Gilardi & Co. LLC, P.O. Box
404130, Louisville, KY 40233-4130, or on the Internet at
www.LiberatorSettlement.com. If you are a Class Member, in order to
share in the distribution of the Net Settlement Fund, you must
submit a Proof of Claim and Release by mail (postmarked no later
than October 22, 2019), or online at www.LiberatorSettlement.com
(no later than October 22, 2019), establishing that you are
entitled to recovery.
All Members of the Class who did not timely and validly request
exclusion from the Class will be bound by any judgment entered in
the Litigation pursuant to the Stipulation of Settlement.
Any objection to the Settlement, the Plan of Allocation, and Class
Counsel's request for attorneys' fees and expenses, must be
received by each of the following recipients no later than
September 9, 2019:
CLERK OF THE COURT
DEPARTMENT XI
EIGHTH JUDICIAL DISTRICT COURT
CLARK COUNTY, NEVADA
200 Lewis Avenue
Las Vegas, NV 89155
Class Counsel:
ROBBINS GELLER RUDMAN & DOWD LLP
David Knotts
655 West Broadway, Suite 1900
San Diego, CA 92101
Counsel for Defendant:
AKERMAN LLP
Brian P. Miller
Three Brickell City Centre
98 Southeast Seventh Street, Suite 1100
Miami, FL 33131
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING
THIS NOTICE. If you have any questions about the Settlement, you
may contact Class Counsel at the address listed above.
DATED: June 3, 2019
BY ORDER OF THE COURT
EIGHTH JUDICIAL DISTRICT COURT
CLARK COUNTY, NEVADA
LIBERTY TAX: Bid to Dismiss Labrado Class Action Denied
-------------------------------------------------------
Liberty Tax, Inc. said in its Form 10-K report filed with the U.S.
Securities and Exchange Commission on June 27, 2019, for the fiscal
year ended April 30, 2019, that the company's motion to dismiss the
class action suit entitled, Rene Labrado v. JTH Tax, Inc. (Case BC
715076), has been denied.
On July 3, 2018, a class action complaint was filed in the Superior
Court of California, County of Los Angeles by a former employee for
herself and on behalf of all other "similarly situated" persons.
The Complaint alleges, among other things, that the Company
allegedly violated various provisions of the California Labor Code,
including: unpaid overtime, unpaid meal period premiums, unpaid
rest premiums, unpaid minimum wages, final wages not timely paid,
wages not timely paid, non-compliant wage statements, failure to
keep pay records, unreimbursed business expenses and violation of
California Business and Profession Code Section 17200.
The Complaint seeks actual, consequential and incidental losses and
damages, injunctive relief and other damages. The Company highly
disputes the allegations set forth in the Complaint and filed a
motion to dismiss.
On May 29, 2019 the Court denied the Company's motion to dismiss,
but granted the Company leave to file a motion to strike, which the
Company plans on filing. The Company intends to defend the case
vigorously.
Liberty Tax, Inc., through its subsidiaries, provides tax
preparation services in the United States and Canada. The company
also facilitates refund-based tax settlement financial products,
such as refund transfer products and personal income tax refund
discounting, as well as provides an online digital Do-It-Yourself
tax program in the United States. The company was formerly known as
JTH Holding, Inc. and changed its name to Liberty Tax, Inc. in July
2014. Liberty Tax, Inc. was founded in 1996 and is headquartered in
Virginia Beach, Virginia.
LIBERTY TAX: Bid to Dismiss NY Consolidated Suit Still Pending
--------------------------------------------------------------
Liberty Tax, Inc. said in its Form 10-K report filed with the U.S.
Securities and Exchange Commission on June 27, 2019, for the fiscal
year ended April 30, 2019, that the motion to dismiss the complaint
in the case, In Re Liberty Tax, Inc. Securities Litigation, Case
No. 27 CV 07327, is still pending before the Court.
Rose Mauro, individually and on behalf of all others similarly
situated v. Liberty Tax, Inc., Edward L. Brunot, John T. Hewitt,
and Kathleen E. Donovan, filed in the United States District Court
for the Eastern District of New York on January 12, 2018, Case No.
18 CV 245.
The Plaintiff filed a securities class action asserting violations
of Section 10(b) of the Exchange Act and Rule 10b-5 against all
defendants and a second count for violations of Section 20(a) of
the Exchange Act against the individual defendants.
According to the complaint, throughout the class period, the
Company allegedly issued materially false and misleading statements
and/or failed to disclose that: (1) Hewitt created an inappropriate
tone at the top; (2) the inappropriate tone at the top led to
ineffective entity level controls over the organization; and (3) as
a result, defendants' statements about the operations and prospects
were materially false and misleading and/or lacked a reasonable
basis at all relevant times.
Patrick Beland, individually and on behalf of all others similarly
situated vs. Liberty Tax, Inc., Edward L. Brunot, John T. Hewitt,
and Kathleen E. Donovan, filed in the United States District Court
for the Eastern District of New York on December 15, 2017, case
number 17 CV 7327.
The Plaintiff filed a securities class action asserting violations
of Section 10(b) of the Exchange Act and Rule 10b-5 against all
defendants and a second count for violations of Section 20(a) of
the Exchange Act against the individual defendants.
According to the complaint, throughout the class period, the
Company allegedly issued materially false and misleading statements
and/or failed to disclose that: (1) Hewitt created an inappropriate
tone at the top; (2) the inappropriate tone at the top led to
ineffective entity level controls over the organization; and (3) as
a result, defendants' statements about the business, operations and
prospects were materially false and misleading and/or lacked a
reasonable basis at all relevant times.
These actions were consolidated with the caption In Re Liberty Tax,
Inc. Securities Litigation, Case No. 27 CV 07327 and IBEW Local 98
Pension Fund was appointed the Lead Plaintiff (the "Lead
Plaintiff").
On June 12, 2018, the Lead Plaintiff filed its Consolidated Amended
Class Action Complaint, which removed Brunot as a defendant, and
added additional securities claims based on Section 14(a) of the
Exchange Act and Rules 14a-3 and 14a-9.
The Consolidated Amended Class Action Complaint, among other
things, asserts that the Company's SEC filings over a multi-year
period failed to disclose the alleged misconduct of the individual
defendants and that disclosure of the alleged misconduct caused the
Company's stock price to drop and, thereby harm the purported class
of shareholders.
The Class Period is alleged to be October 1, 2013 through February
23, 2018. The defendants filed a joint motion to dismiss the
Consolidated Amended Class Action Complaint on September 17, 2018.
The Lead Plaintiff served their opposition on November 1, 2018 and
the defendants filed their reply brief on November 27, 2018. A
mediation took place on November 12, 2018 but did not result in a
resolution.
The motion to dismiss is still pending before the Court.
No further updates were provided in the Company's SEC report.
Liberty Tax, Inc., through its subsidiaries, provides tax
preparation services in the United States and Canada. The company
also facilitates refund-based tax settlement financial products,
such as refund transfer products and personal income tax refund
discounting, as well as provides an online digital Do-It-Yourself
tax program in the United States. The company was formerly known as
JTH Holding, Inc. and changed its name to Liberty Tax, Inc. in July
2014. Liberty Tax, Inc. was founded in 1996 and is headquartered in
Virginia Beach, Virginia.
LIBERTY TAX: Final Approval of Settlement in Delaware Suit Pending
------------------------------------------------------------------
Liberty Tax, Inc. said in its Form 10-K report filed with the U.S.
Securities and Exchange Commission on June 27, 2019, for the fiscal
year ended April 30, 2019, that the final approval of settlement in
the consolidated class action suit entitled, In Re: Liberty Tax,
Inc. Stockholder Litigation, C.A. No. 2017-0883, is pending.
Asbestos Workers' Philadelphia Pension Fund, derivatively on behalf
of Liberty Tax, Inc., v. John Hewitt, Defendant, and Liberty Tax,
Inc., Nominal Defendant, Case No. 2017-0883, was filed in the Court
of Chancery of the State of Delaware on December 12, 2017.
The Plaintiff alleges that the Company's former CEO, John T. Hewitt
("Hewitt"), breached his fiduciary duties as an officer based upon
certain allegations of misconduct on his part. The Plaintiff also
alleges breach of fiduciary duty against Hewitt in his capacity as
a director of the Company. The Complaint seeks compensatory damages
and attorney's fees. No claim or relief is asserted against the
Company, which is named solely as a Nominal Defendant.
Erie County Employees Retirement System, derivatively on behalf of
Liberty Tax, Inc., v. John T. Hewitt, Defendant, and Liberty Tax,
Inc., Nominal Defendant, Case No. 2017-0914, brought a second
derivative suit filed in the Court of Chancery of the State of
Delaware on December 22, 2017.
The Plaintiff also alleges that Hewitt breached his fiduciary
duties as an officer based upon certain allegations of misconduct
on his part. The Plaintiff also alleges breach of fiduciary duty
against Hewitt in his capacity as a director of the Company. The
Complaint seeks to enjoin Hewitt from managing the Company's
business operations, and seeks compensatory damages and attorney's
fees.
On December 27, 2017, the two above-referenced shareholder matters
were consolidated into the case with the caption In Re: Liberty
Tax, Inc. Stockholder Litigation, C.A. No. 2017-0883 (the "Delaware
Action"). On April 17, 2018, the Plaintiffs filed an amended
complaint (the "Amended Complaint").
The Amended Complaint added former directors, Gordon D'Angelo,
Ellen McDowell, Nicole Ossenfort, and John Seal, with Hewitt as
individual defendants (the "Individual Defendants") and asserted
class action allegations.
The Plaintiffs seek (i) a declaration that the Individual
Defendants have breached the Company's Nominating Committee Charter
(now the Nominating & Corporate Governance Committee Charter); (ii)
a declaration that the Individual Defendants have breached their
fiduciary duties; (iii) an award to the Plaintiffs and the Class in
the amount of damages sustained as a result of the Individual
Defendants' breaches; (iv) certification of the action as a class
action; (v) an award to the Company in the amount of damages
sustained as a result of the Individual Defendants' breaches of
their fiduciary duties; (vi) a grant of further appropriate
equitable relief to remedy the Individual Defendants' breaches,
including injunctive relief; (vii) an award to the Plaintiffs of
the costs and disbursements of this action, including reasonable
attorneys' fees, accountants' and experts' fees, costs and
expenses; and (viii) such further relief as the Court deems just
and proper. The Company has answered the Amended Complaint and
discovery is underway.
The Individual Directors have filed a notice of motion to dismiss.
No briefing schedule has been set on the motion. A mediation took
place on November 12, 2018 but did not result in a resolution.
RSL Senior Partners LLC, derivatively and on behalf of Liberty Tax,
Inc. v. Edward L. Brunot, John T. Hewitt, Kathleen E. Donovan,
Gordon D'Angelo, John Garel, Thomas Herskovits, Robert M. Howard,
Ross N. Longfield. Steven Ibbotson, Ellen M. McDowell, Nicole
Ossenfort, George Robson and John Seal (Individual Defendants) and
Liberty Tax. Inc. (Nominal Defendant), Case No. 18 cv 127, filed on
March 7, 2018 in the United States District Court for the Eastern
District of Virginia (the "Virginia Action").
This purported shareholder derivative action was filed on behalf of
the Company seeking to address the alleged wrongs of the Company's
directors and officers.
The Complaint, which contains allegations that are substantially
similar to the allegations in the Delaware Action, claims that
certain conduct created an inappropriate tone at the top, resulting
in the loss of key executives, employees, directors and otherwise
harmed the Company.
The Complaint asserts claims under Section 14(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), Section
10(b) and Rule 10b-5 and Section 20(a) of the Exchange Act, breach
of fiduciary duty, unjust enrichment, abuse of control, gross
mismanagement, and waste of corporate assets.
The Complaint seeks the following relief: (a) declaring that the
Plaintiff may maintain this action on behalf of the Company, and
that the Plaintiff is an adequate representative of the Company;
(b) declaring that the Individual Defendants have breached and/or
aided and abetted the breach of their fiduciary duties to the
Company; (c) determining and awarding to the Company the damages
sustained by it as a result of the violations set forth above from
each of the Individual Defendants, jointly and severally, together
with pre-judgment and post-judgment interest thereon; (d) directing
the Company and the Individual Defendants to take all necessary
actions to reform and improve its corporate governance and internal
procedures to comply with applicable laws and to protect the
Company and its shareholders from a repeat of the damaging events
(e) awarding the Company restitution from Individual Defendants;
and (f) awarding the Plaintiff the costs and disbursements of the
action, including reasonable attorneys' and experts' fees, costs,
and expenses.
No claim or relief is asserted against the Company, which is named
solely as a Nominal Defendant.
On July 30, 2018, various motions were filed: (i) Defendants
Hewitt, McDowell, Ossenfort and Seal collectively moved to dismiss
the Complaint; (ii) Defendants Garel, Herskovits, Howard, Ibbotson,
Longfield, and Robson collectively moved to dismiss the Complaint;
(iii) Defendants Brunot and Donovan collectively moved to dismiss
the Complaint; (iv) the Company moved to stay the action pending
resolution of parallel state (Delaware) and/or federal (New York)
proceedings (in which the Individual Defendants joined). Briefing
on the motions is complete.
The Delaware and Virginia Actions are in the process of being
settled.
On January 25, 2019, the Company along with the named Individual
Defendants entered into a Memorandum of Understanding (the "MOU")
with the Plaintiffs, regarding settlement of the Delaware Action
which will result in certain enhancements to the Company's code of
conduct and training of employees, and disclosure of Nasdaq's
appeal ruling delisting the Company's common stock from Nasdaq.
The Plaintiffs have agreed that the settlement, which is subject to
the execution of a definitive settlement agreement and court
approval, will include a dismissal of the lawsuits with prejudice
and a release of all claims against the Company and the Individual
Defendants asserted in the Delaware Action and the Virginia Action.
If the parties to the MOU execute a stipulation of settlement, a
hearing will be held at which the Delaware Court of Chancery will
consider the fairness, reasonableness and adequacy of the
settlement.
In connection with the settlement, the Company will negotiate in
good faith the amount of reasonable legal fees and expenses of the
Plaintiffs' counsel which will ultimately be paid by the Company
and/or its insurance carrier. No agreement has been reached on the
amount of the fees and expenses, which is subject to court
approval.
On March 15, 2019, the parties entered into a stipulation of
settlement. On March 26, 2019, the Delaware Court of Chancery
entered a scheduling order. Under the Order the Company provided
the required notice of the proposed settlement and provided the
date and time of the hearing, which is scheduled for June 28,
2019.
On June 7, 2019 the Plaintiffs in the Delaware Matter filed their
opening brief in support of final approval of settlement and for
award of attorney's fees and expenses.
On June 18, 2019 the Company filed a brief in support of the
settlement and in opposition to Plaintiffs' Application for award
of attorneys' fees and expenses.
The parties to the Virginia Action have also agreed that all claims
in the Virginia Action have been settled and that the parties will
seek to stay the Virginia Action pending the settlement proceedings
in Delaware.
The parties to the Virginia Action have agreed to dismiss the
Virginia Action with prejudice within five business days of the
settlement of the Delaware Action becoming final.
The Company has agreed that it (and/or its insurance carrier) will
pay $295,000 in fees and expenses to Plaintiffs' counsel in the
Virginia Action in connection with settlement of the Virginia
Action. The parties to the Virginia Action provided a joint status
update to the Virginia court on February 27, 2019.
On March 15, 2019 the parties filed a joint motion to stay the
action. By an Order dated March 15, 2019, the Court granted the
motion to stay the case for 90 days. On May 3, 2019, the Court
entered an order setting schedule, including the date for the fee
approval and approved notice to shareholders.
The Order set a fairness hearing for the Virginia Settlement for
September 11, 2019.
Liberty Tax said, "Settlement of the Virginia and Delaware Actions
are expressly not to be construed as an admission of wrongdoing or
liability by any defendant. The defendants have vigorously denied,
and continue to vigorously deny, any wrongdoing or liability with
respect to the facts and claims asserted, or which could have been
asserted, in the Delaware and Virginia Actions, including that they
have committed any violations of law or breach of fiduciary duty,
aided and abetted any violations of law or breaches of fiduciary
duty, acted improperly in any way or have any liability or owe any
damages of any kind to the Plaintiffs or to the purported Class."
Liberty Tax, Inc., through its subsidiaries, provides tax
preparation services in the United States and Canada. The company
also facilitates refund-based tax settlement financial products,
such as refund transfer products and personal income tax refund
discounting, as well as provides an online digital Do-It-Yourself
tax program in the United States. The company was formerly known as
JTH Holding, Inc. and changed its name to Liberty Tax, Inc. in July
2014. Liberty Tax, Inc. was founded in 1996 and is headquartered in
Virginia Beach, Virginia.
LIGHTHOUSE LIVING: Faces Broadway's Labor Suit in Sacramento
------------------------------------------------------------
An employment-related class action complaint has been filed by
Nataja Broadway and Macarey Littlejohn against Lighthouse Living
Services Inc. The case is captioned Nataja Broadway vs. Lighthouse
Living Services Inc, Case No. 34-2019-00259037-CU-OE-GDS (Cal.
Super., Sacramento Cty., June 22, 2019). It is assigned to
Department 47 of the Sacramento Superior Court.
Lighthouse Living Services is a privately held company in
Sacramento, California. Established in 1999, the company provides
social services.
The Plaintiffs are represented by:
Gary R. Basham, Esq.
BASHAM LAW GROUP
8801 Folsom Boulevard Suite 177
Sacramento, CA 95826
Telephone: (916) 282-0841
Facsimile: (916) 266-7478
Email: gary@bashamlawgroup.com
LIVENT CORP: Roe Calls IPO Documents "False" and "Misleading"
-------------------------------------------------------------
A class action complaint has been filed against Livent Corporation
and its executives and directors for alleged violations of the
Securities Act of 1933 in connection with the company's October
20l8 initial public offering (IPO). The case is captioned LARRY
ROE, Individually and On Behalf of All Others Similarly Situated,
Plaintiff, v. LIVENT CORPORATION, PAUL W. GRAVES, GILBERTO
ANTONIAZZI, NICHOLAS L. PFEIFFER, PIERRE R. BRONDEAU, and ANDREA E.
UTECHT, Defendants, Case No. 2:19-cv-02683-CFK (E.D. Pa., June 20,
2019).
Larry Roe brings this class action on behalf of persons and
entities that purchased or otherwise acquired Livent common stock
pursuant and/or traceable to the registration statement and
prospectus issued in connection with the IPO. Plaintiff alleges
that the Registration Statement was false and misleading, and
omitted to state material adverse facts. Specifically, Defendants
failed to disclose to investors: (i) that a supply contract with
Nemaska Lithium Inc. was likely to be terminated; (ii) that, as a
result, the Company would foreseeably be forced to fulfill its
customer contracts using alternative vendors at reduced revenues
and lower margins; (iii) that the Company had a long-standing
contract to supply lithium hydfoxide to a customer at a much lower
price than any of the Company's existing contracts; (iv) that the
Company's margins were squeezed due to the customer's increased
orders; and (v) that, as a result of the foregoing, Defendants'
positive statements about the Company's business, operations, and
prospects, were materially misleading and/or lacked a reasonable
basis.
Livent is incorporated under the laws of Delaware with its
principal executive offices located in Philadelphia, Pennsylvania.
Livent's common stock trades on the New York Stock Exchange under
the symbol LTHM. Livent produces and distributes lithium chemicals.
[BN]
The Plaintiff is represented by:
Jacob A. Goldberg, Esq.
Keith R. Lorenze, Esq.
THE ROSEN LAW FIRM, P.A.
101 Greenwood A venue Suite 440
Jenkintown, PA 19046
Telephone: (215) 600-2817
Facsimile: (212) 202-3827
E-mail: jgoldberg@rosenlegal.com
klorenze@rosenlegal.com
- and -
Jeremy A. Lieberman, Esq.
J. Alexander Hood II, Esq.
POMERANTZ LLP
600 Third Avenue, 20th Floor
New York, NY 10016
Telephone: (212) 661-1100
Facsimile: (212) 661-8665
E-mail: jalieberman@pomlaw.com
ahood@pomlaw.com
- and -
Patrick V. Dahlstrom, Esq.
POMERANTZ LLP
Ten South LaSalle Street, Suite 3505
Chicago, IL 60603
Telephone: (312) 377-1181
Facsimile: (312) 377-1184
E-mail: pdahlstrom@pomlaw.com
LOUISIANA RECOVERY: Taylor Sues over Debt Collection Practices
--------------------------------------------------------------
ROHENA TAYLOR, individually and on behalf of all others similarly
situated, Plaintiff v. LOUISIANA RECOVERY SERVICES, INC.,
Defendant, Case No. 1:19-cv-03483-FB-PK (E.D.N.Y., June 12, 2019)
seeks to stop the Defendant's unfair and unconscionable means to
collect a debt. The case is assigned to Judge Frederic Block and
referred to Magistrate Judge Peggy Kuo.
Louisiana Recovery Services, Inc. offers debt collection and
accounts receivable management services. [BN]
The Plaintiff is represented by:
David Paul Force, Esq.
STEIN SAKS, PLLC
285 Passaic St.
Hackensack, NJ 07601
Telephone: (201) 282-6500
E-mail: dforce@steinsakslegal.com
MARKETSOURCE INC: Underpays Coordinators, Tarsa Suit Alleges
------------------------------------------------------------
CHRISTIE TARSA, individually and on behalf of all others similarly
situated, Plaintiff v. MARKETSOURCE, INC., Defendant, Case No.
1:19-cv-02684-WMR (N.D. Ga., June 12, 2019) is an action against
the Defendant's failure to pay the Plaintiff and the class overtime
compensation for hours worked in excess of 40 hours per week.
The Plaintiff Tarsa was employed by the Defendant as coordinator.
MarketSource Inc. provides outsourced sales solutions for
organizations. The company was founded in 1975 and is based in
Alpharetta, Georgia. As of December 8, 2004, MarketSource Inc.
operates as a subsidiary of Allegis Group, Inc. [BN]
The Plaintiff is represented by:
Mitchell L. Feldman, Esq.
FELDMAN LEGAL GROUP
6940 W. Linebaugh Avenue, #101
Tampa, FL 33625
Telephone: (813) 639-9366
Facsimile: (813) 639-9376
E-mail: mlf@feldmanlegal.us
MARYLAND: 1,000+ Retirees Sue Over Prescription Drug Benefits
-------------------------------------------------------------
Danielle E. Gaines, writing for Maryland Matters, reports that more
than 1,000 state retirees are seeking to be recognized as a class
in a lawsuit against the state of Maryland over lost prescription
drug benefits -- and another 1,000 filings are on their way.
Certifying a class-action case would bring all retiree claims about
the drug benefits into one courtroom, while "separate actions by
individual members of the class would create a risk of inconsistent
adjudications," plaintiffs wrote in a memorandum filed with the
U.S. District Court on May 31.
It is the latest development in Fitch, et al. v. State of Maryland,
which was filed in 2018 and yielded an injunction that stopped a
state reform from taking place this year. It would have removed
Medicare-eligible retirees from a state plan and shifted them to
the federal program.
Lead plaintiff Kenneth Fitch and his attorney, Deborah A. Holloway
Hill, have held meetings across the state to inform retirees about
the change. They've collected thousands of forms from retirees who
say they want to be part of a class-action case. The first 1,000
forms were delivered as part of a motion to certify retirees as a
class, and another 1,000 forms are being processed now, Hill said
on June 5.
The state has so far not responded to the motion to certify a
class-action claim and officials from the Office of the Attorney
General and Department of Budget and Management declined to comment
on June 5.
The number of retirees or vested state employees who could be part
of the case is estimated to be between 35,000 and 90,000 people,
according to the plaintiffs' filing.
The shift in retiree health benefits was in the works for several
years, but only became widely known last spring, when thousands of
retirees were mailed notices that they would need to enroll in
Medicare. That stemmed from pension reform passed by the General
Assembly in 2011, which lowered the state's post-employment
benefits liability by roughly $8 billion.
The plaintiffs' lawsuit claims that pension benefits are a form of
deferred compensation and constitute a property right, and that
reducing the availability of a previously promised health benefit
is unconstitutional.
"The promise and provision of certain guaranteed health benefits,
which include prescription drug coverage, for the duration of their
retirement, induced the Plaintiffs and all other similarly situated
persons to continue working as a State of Maryland employee and
forgo additional options and opportunities for employment and
benefits from other employers," Hill reiterated in the May 31
filing.
In response to outcry from retirees, the legislature passed a bill
this year to update the retiree prescription drug program. That
bill creates three plans to try to keep retirees "as whole as
possible," lawmakers said.
Under the bill, which passed into law in May without Republican
Gov. Lawrence J. Hogan Jr.'s signature, those who retire before
Dec. 31, 2019, would have access to a plan with an out-of-pocket
expense cap at $1,500. Retirees after that date would have a cap of
$2,500.
All retirees would have access to a life-sustaining prescription
drug plan in which the state would pick up the costs for critical
medications that are covered by the state's current plan but not
Medicare Part D. Lawmakers have tasked state government with
creating a program that would provide instant or near-instant
reimbursements to retirees after they pass the annual out-of-pocket
cap. The bill will not take effect until the lawsuit is settled.
Hill and Fitch said the lawsuit to reinstate the previous benefit
is necessary because a reimbursement-based program is not
sufficient for retirees on a fixed income who might need expensive
drugs to survive.
"Who has that kind of money to lay out?" Fitch asked about pricey
prescriptions.
"They've eliminated that drug coverage -- in a different way," Hill
said.
Fitch, who is diabetic, said he paid $930 in co-pays each year
under the state prescription drug plan, a figure that would shoot
up to an estimated $11,683.10 under a Medicare plan. The
class-action forms that he's collected include other tales of
sticker shock, Fitch and Hill said. [GN]
MASSAGE RETREAT: Dahlheimer Settlement Has Prelim Court Approval
----------------------------------------------------------------
The United States District Court for the District of Minnesota
issued an Order granting Joint Motion to Certify Class and for
Preliminary Approval of Settlement in the case captioned Rosalee
Dahlheimer, Jessica Onu, and Jessica Garcia, individually and on
behalf of all others similarly situated Plaintiffs, v. Massage
Retreat & Spa, Inc. and Lee Oberg, Defendants. Case No.
0:18-cv-01906-KMM.
The Joint Motion to Certify Class and for Preliminary Approval of
Settlement is granted and the proposed notices of settlement,
opt-out form and claim form are approved.
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, for
purposes of settlement only, the Court hereby certifies this
lawsuit as a class action on behalf of the following settlement
group:
All current and former Skin Therapists, Lead Skin Therapists,
Massage Therapists, or Lead Massage Therapists employed by Massage
Retreat & Spa, Inc. between June 8, 2015 and May 13, 2018.
Because the class action is certified for the purposes of
settlement only, should the settlement agreement not become
effective, this Order certifying the class action shall be vacated
and the parties shall return to the positions they held prior to
the entry of this Order. Nothing in this Order shall be construed
or used as an admission, concession, or presumption by or against
the released parties, the plaintiff, or the settlement group
members.
The Court approves the proposed notice of settlement, opt-out form,
and claims form,
The representations, agreements, terms, and conditions of the
parties' proposed settlement embodied in the Settlement Agreement
and the exhibits thereto are preliminarily approved as discussed
below.
The Court finds that the distribution of the settlement notices
substantially in the manner and form set forth in the settlement
agreement meets the requirements of due process, is the best notice
practicable under the circumstances, and constitutes due and
sufficient notice to all persons entitled to receive notice.
Having considered the factors set forth in Rule 23(g)(1) of the
Federal Rules of Civil Procedure, and having found Joshua Williams
and the Law Office of Joshua R. Williams to be adequate, the Court
hereby appoints Mr. Williams and his firm as class counsel to
represent the settlement group.
Any class member who wishes to object to the proposed settlement,
or to appear at the final approval hearing and show cause why the
proposed settlement should not be approved as fair, adequate,
reasonable, and in the settlement groups' best interests, or why
this Court should not enter final judgment may do so according to
the following procedure:
a. The individual must send a notice of intent to object to the
settlement to class counsel. The notice must contain:
i. The caption of the case: Dahlheimer v. Oberg, 18-cv-1906
(KMM).
ii. The name, address, telephone number, and signature of the
individual filing the intent to object.
iii. A detailed explanation of the individual's specific
objections and the grounds therefor; and
iv. Any documents the individual wishes the Court to consider
in association with the objection.
b. The notice of intent to object must be emailed or mailed to
class counsel at the following address on or before September 16,
2019: Joshua R. Williams Law Office of Joshua R. Williams 2836
Lyndale Ave. S., Suite 160 Minneapolis, MN 55408 Email:
jwilliams@jrwilliamslaw.com
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/y2qvwdtk from Leagle.com.
Rosalee Dahlheimer, individually and on behalf of all others
similarly situated, Jessica Garcia, individually and on behalf of
all others similarly situated & Jessica Onu, individually and on
behalf of all others similarly situated, Plaintiffs, represented by
Joshua R. Williams, Law Office of Joshua R. Williams, 3249 Hennepin
Avenue S.Suite 216Minneapolis, MN 55408
Lee Oberg, Defendant, represented by Joel P. Schroeder --
jschroeder@bestlaw.com -- Best & Flanagan LLP.
Massage Retreat & Spa, Inc., Defendant, represented by Andrew J.
Voss -- avoss@littler.com -- Littler Mendelson, PC & John H.
Lassetter -- jlassetter@littler.com -- Littler Mendelson, PC.
MICHIGAN: Bid to Reconsider Order Trimming Claims in K.B. Denied
----------------------------------------------------------------
In the case, K.B. BY MOTHER, NEXT FRIEND, AND GUARDIAN T.B., ET.
AL., Plaintiffs, v. MICHIGAN DEPARTMENT OF HEALTH AND HUMAN
SERVICES, NICK LYON, RICHARD SNYDER, Defendants, Case No. 18-11795
(E.D. Mich.), Judge Thomas L. Ludington of the U.S. District Court
for the Eastern District of Michigan, Northern Division, denied the
Defendants' motion for reconsideration of the Court's order
granting in part and denying in part their motion to dismiss the
Plaintiffs' claims.
On June 6, 2018, the Plaintiffs filed a complaint against the
Defendants. The Plaintiffs are Michigan children and their
families who claim that the Defendants are providing them with
inadequate mental health care. Defendant the Michigan Department
of Health is responsible for facilitating the Medicaid program
throughout Michigan. To assist in this, the Department has
contracted with ten Prepaid Inpatient Health Plans ("PIHPs") and
local County Medical Health Service Programs ("CMHSP") to provide
health services. The Plaintiffs contend that the PIHPs are not
fulfilling Medicaid's requirements and as such, the Department
should be held responsible.
The Plaintiffs bring their claim as a class action on behalf of all
current or future Michigan Medicaid beneficiaries under the age of
21 with a behavioral, emotional, or psychiatric disorder who are or
may be eligible for, but are not receiving, home and
community-based services. They contend that the Defendants'
failure to provide adequate mental health care services in their
homes and communities have required some Plaintiffs to enter
institutions (such as psychiatric hospitals and juvenile
delinquency facilities) while the other Plaintiffs are at risk of
requiring institutionalization in the future.
In their complaint, the Plaintiffs raise six claims against the
Defendants for violating the following: the federal Medicaid EPSDT
Mandate, the federal Medicaid reasonable promptness requirement,
the Americans with Disabilities Act, Section 504 of the
Rehabilitation Act, the due process provisions of the Medicaid Act,
and due process rights under the Fourteenth Amendment.
On Sept. 7, 2018, the Defendants filed a motion to dismiss the
Plaintiffs' claims. The order was granted in part and denied in
part. In deciding Defendants' motion to dismiss, the Court
dismissed Count II and a portion of Count I of the Plaintiffs'
complaint. The balance of the Plaintiffs' allegations remain
intact.
The Defendants then filed a motion for reconsideration of the
Court's order. They contend that the Court "misunderstood" the
legal responsibilities of Prepaid Inpatient Health Plans and local
County Medical Health Service Programs. Their main argument for
reconsideration centers on the Court's finding that their notice
and hearing responsibilities were not absolved simply by delegating
those responsibilities to the CMHs and PIHPs. They contend that
the Court should have dismissed Counts V and VI which contain
allegations of their violations of the Plaintiffs' rights to notice
and a hearing.
Judge Ludington holds that if a MCO issues an adverse benefit
decision, a party may appeal the decision within the MCO. If the
decision is upheld on appeal, a party may request a hearing with
the state to review the MCO's decision.
He further holds that the Defendants have presented various factual
arguments supporting their contention that the PIHPs and CMHs are
initially responsible for providing notice and hearing. The
factual arguments may have merit, but a motion to dismiss is not
the appropriate stage of litigation to determine the merits of
these factual arguments. The Defendants have not demonstrated that
the Court committed a palpable defect in partially denying their
motion to dismiss. Accordingly, the Defendants' motion for
reconsideration will be denied.
The Defendants explain that it was not their intent to misconstrue
the Plaintiff's allegations. They explain that in their motion to
dismiss they did not seek to recast the Plaintiff's position, but
rather to give the Court a more complete picture of the process
available to the Plaintiff. The Judge holds that the order
denying the Defendants' motion to dismiss was not based on this
concern. Accordingly, their motion for reconsideration will not be
granted on this basis.
Based on the foregoing, Judge Ludington denied the Defendants'
motion for reconsideration.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/GO0sBn from Leagle.com.
K.B. by mother, Next Friend, and guardian T.B., M.B. by mother,
Next Friend, and guaridan T.B., P.S. by guardian, M.S., G.P. by
parent and Next Friend A.P., D.P. by guardian, T.P., G.G. by mother
and Next Friend M.G. & J.W. by guardian S.P., Plaintiffs,
represented by Andrea L. Rizor, Michigan Protection & Advocacy
Service Inc., Chris E. Davis, Michigan Protection and Advocacy
Service, Emily S. Fields, Mantese Honigman P.C., Gerard V. Mantese
-- gmantese@manteselaw.com -- Mantese Honigman, P.C., John J.
Conway, III, Mark A. Cody, Michigan Protection & Advocacy Service,
Theresamarie Mantese -- tmantese@manteselaw.com -- Mantese Honigman
& David M. Honigman -- dhonigman@manteselaw.com -- Mantese
Honigman, PC.
Michigan Department of Health and Human Services, Nick Lyon &
Richard Snyder, Defendants, represented by Kristin M. Heyse,
Michigan Department of the Attorney General.
MIDLAND CREDIT: Baty Suit Moved to Eastern District of New York
---------------------------------------------------------------
The case captioned as Cindy Baty on behalf of herself and all
others similarly situated, the Plaintiff, vs. Midland Credit
Management, Inc., the Defendant, Case No. 602804/2019, was removed
from the Supreme Court of Suffolk County, to the U.S. District
Court for the Eastern District of New York (Central Islip) on July
5, 2019. The Eastern District of New York Court Clerk assigned Case
No. 2:19-cv-03888 to the proceeding. The suit demands $501,000 in
damages for alleged Fair Debt Collection Act violations.
Midland Credit, a licensed debt collector, assists customers in
resolving past-due financial obligations through various education
and payment plans. The company was founded in 1953 and is based in
San Diego, California.[BN]
The Plaintiff appears pro se.
Attorneys for the Defendant are:
Matthew B. Corwin, Esq.
HINSHAW & CULBERTSON, LLP
800 Third Avenue, 13th Floor
New York, NY 10022
Telephone: (212) 471-6200
Facsimile: (212) 935-1166
E-mail: mcorwin@hinshawlaw.com
MIDLAND CREDIT: Masone Suit Moved to Eastern District of New York
-----------------------------------------------------------------
The case captioned as Eddie Masone on behalf of herself and all
others similarly situated, the Plaintiff, vs. Midland Credit
Management, Inc., the Defendant, Case No. 601965/2019, was removed
from the Supreme Court of Nassau County, to the U.S. District Court
for the Eastern District of New York (Central Islip) on July 5,
2019. The Eastern District of New York Court Clerk assigned Case
No. 2:19-cv-03889 to the proceeding. The suit demands $501,000 in
damages for alleged Fair Debt Collection Act violations.
Midland Credit, a licensed debt collector, assists customers in
resolving past-due financial obligations through various education
and payment plans. The company was founded in 1953 and is based in
San Diego, California.[BN]
The Plaintiff appears pro se.
Attorneys for the Defendant are:
Matthew B. Corwin, Esq.
HINSHAW & CULBERTSON, LLP
800 Third Avenue, 13th Floor
New York, NY 10022
Telephone: (212) 471-6200
Facsimile: (212) 935-1166
E-mail: mcorwin@hinshawlaw.com
MONAVIE INC: Court Dismisses Parker's MMA Claim Without Prejudice
-----------------------------------------------------------------
Judge David Nuffer of the U.S. District Court for the District of
Utah has issued a Memorandum Decision and Order on Order to Show
Cause in the case, ADAM PARKER and ANDREW HARBUT, on behalf of
themselves and all others similarly situated, Plaintiffs, v.
MONAVIE, INC., and MONAVIE, LLC, Defendants, Case No.
2:17-cv-00764-DN-DBP (D. Utah).
Plaintiffs Parker and Harbut initiated a putative class action
against MonaVie in the U.S. District Court for the Central District
of California, Western Division. Mr. Parker dropped out of the
suit shortly thereafter, and Mr. Harbut filed an Amended Complaint.
The Amended Complaint alleges that MonaVie falsely advertised
health benefits of its juice products and asserts claims for: (1)
fraud, deceit, and misrepresentation; (2) violation of Utah
Consumer Sales Practices Act; (3) violation of Missouri's
Merchandising Practices Act; (4) violation of California's
Consumers Legal Remedies Act; (5) violation of California's False
Advertising Law; (6) violation of California's Unfair Competition
Law ("CUCL"); and (7) violation of the Magnuson-Moss Act ("MMA").
The case was subsequently transferred to the District of Utah.
However, prior to transferring the case, District Judge Terry J.
Hatter denied two motions for class certification, and denied Mr.
Harbut's request to file a third class certification motion. Judge
Hatter also dismissed Mr. Harbut's CCLRA, CFAL, and CUCL claims.
And Judge Hatter made several evidentiary rulings, including the
exclusion of Plaintiff's expert witness Michael Starnbach, Ph.D.
and striking of his expert witness report.
Following the case's transfer to the District of Utah in 2017, no
further action was taken, and on March 15, 2019, the parties were
directed to file a status report. Mr. Harbut's Status Report
indicated that he intended to proceed on his class claims.
However, in light of Mr. Harbut's failure to previously obtain
class certification, and because the deadline to obtain
certification had long since passed, the parties were ordered to
provide briefing on whether subject matter jurisdiction exists.
Both parties have filed a responsive brief. Mr. Harbut asserts
that subject matter jurisdiction existed under the Class Action
Fairness Act of 2005 ("CAFA") at the time the Amended Complaint was
filed. He also argues that jurisdiction remains notwithstanding
his failure to obtain class certification. And he requested that
the deadline for class certificate be extended, that limited
discovery be permitted, and that he be given leave to file a class
certification motion.
In its response, MonaVie asserts that jurisdiction under CAFA does
not exist because class certification did not occur and Mr. Harbut
cannot demonstrate grounds for extending the class certification
deadline or reconsideration of Judge Hatter's orders denying class
certification. MonaVie also argues that Mr. Harbut's MMA claim
should be dismissed for his failure to respond to the
jurisdictional question regarding the claim.
Judge Nuffer finds that overall, the Amended Complaint's
jurisdiction allegations were not frivolous or defective at the
time of filing. Therefore, federal subject matter jurisdiction
over the matter continues to exist under CAFA, regardless of class
certification. Because CAFA's requirements were met at the time
the Amended Complaint was filed, subject matter jurisdiction exists
for Mr. Harbut's claims for: (1) fraud, deceit, and
misrepresentation; (2) violation of Utah Consumer Sales Practices
Act; and (3) violation of Missouri's Merchandising Practices Act.
However, Mr. Harbut failed to establish sufficient grounds to
extend the discovery and class certification deadlines and
reconsider Judge Hatter's prior orders denying class certification.
Further delays to the case are simply not warranted.
And because a class will not be certified in the case, Mr. Harbut's
MMA claim fails to meet the threshold requirements for maintaining
a private right of action, and dismissed Mr. Harbut's MMA claim
without prejudice. The Order to Show Cause directed Mr. Harbut to
respond with factual allegations and argument demonstrating how his
MMA claim meet the requirements of 15 U.S.C. Section 2310(d)(3) for
maintaining a private right of action. Mr. Harbut's Response did
not address the issue.
Based on this, Judge Nuffer holds that the Order to Show Cause is
satisfied. The Judge denied Mr. Harbut's request for to extend the
discovery and class certification deadlines and reconsider Judge
Hatter's prior orders denying class certification. A class will
not be certified in the case.
A telephonic status conference is set for July 2, 2019, at 8:30
a.m., at which time trial and trial-related dates will be set. The
parties will meet and confer before the status conference to
discuss: (i) participation in a Magistrate Judge Settlement
Conference; and (ii) whether a joint trial should be held on
overlapping issues in this matter and Pontrelli v. MonaVie, Inc.,
et al., 2:17-cv-01215-DN-DBP.
A full-text copy of the Court's May 24, 2019 Memorandum Decision
and Order is available at https://is.gd/gpUthU from Leagle.com.
Andrew Harbut, on behalf of themselves and all others similarly
situated, Plaintiff, represented by Jon V. Harper --
jharper@jonharperlaw.com -- HARPER LAW PLC.
Monavie Inc & Monavie LLC, Defendants, represented by Bryan Leifer
-- Bryan.Leifer@lewisbrisbois.com -- LEWIS BRISBOIS BISGAARD &
SMITH LLP, pro hac vice, Mark F. James -- mjames@hjdlaw.com --
HATCH JAMES & DODGE & Jon Kardassakis --
Jon.Kardassakis@lewisbrisbois.com -- LEWIS BRISBOIS BISGAARD &
SMITH LLP, pro hac vice.
MONSANTO CO: Dicamba Class Action Likely in Next Few Years
----------------------------------------------------------
Kelda J.L. Pharris, writing for Aberdeen American News, reports
that a South Dakota farmer takes a snap of his crops and adds the
temperature, wind conditions, date and other details into the text
fields on his Snapchat app.
It's part of Austin Schuelke's record-keeping process. The Groton
man fielded a phone call in mid-April while monitoring drainage
pumps in his soggy fields. When it comes to crops, his mantra is
document, document, document.
"I just take pictures with my phone, my Snapchat app, then type in
the dates, what I saw for an observation. That's how I was using
it," he told the Aberdeen American News.
The records helped when he noticed a patch of soybeans didn't look
so good in mid-summer 2017. He had a hunch they'd been caught in a
drift of dicamba, a herbicide that will destroy a crop that hasn't
been modified to be resistant to the chemical.
"I gave those (records) to the state investigator, the liability
insurance, then Monsanto came out, too. They have a regional or
district rep," Schuelke said.
Using his own records and the Dicamba Damage Survey, he filed a
claim. Farmers can find the damage survey on the South Dakota
Department of Agriculture's website, sdda.sd.gov.
Dicamba damage claims jumped in 2017. The uptick was in line with
the release of a new modulation of the herbicide. It takes out
broadleaf weeds found in South Dakota croplands like kochia,
waterhemp and Palmer amaranth and is applied over soybeans by a
spray rig. Dicamba does the job as long as it's married with
dicamba-resistant soybeans, the correct nozzles, the exact rate of
application and the right weather conditions. Those are all
required per label instructions.
One farmer's superhero crop -- a good yield with nary a broadleaf
weed -- is another's kryptonite. Schuelke's soybeans weren't
dicamba tolerant. He saw the leaves changing in his 240 acres of
soybeans near Verdon in southeastern Brown County.
Their leaves had turned up and in, as if hands folded in prayer.
That is called cupping. It can happen for a number of reasons, but
is generally a telltale sign of herbicide poisoning, according to
Schuelke.
Such crop losses are tough to take as the ag economy continues to
struggle.
Samples confirmed dicamba poisoning. Schuelke filed a claim with
the Department of Agriculture's Division of Agricultural Services.
It's up to the division to follow up on claims of crop damage with
adjacent farmers and applicators since it's the branch that
facilitates applicator certifications for dicamba and other
herbicides or pesticides.
In May 2018, Schuelke got a letter back from the Agricultural
Services Division. Boiled down, it noted that Schuelke's crop had
been damaged by off-label use of the herbicide dicamba.
The kick in the Carhartts was that no further action would be
taken, according to the letter, and Schuelke's case had been
closed. The letter is dated May 7, 2018, but he keeps it handy.
"It's sitting on my desk. Every time I think about it, it angers
me," Schuelke said.
On April 17 of this year, he saw the letter and vented on his
soapbox of choice, Twitter. His tweets drummed up a bit of dialogue
with South Dakota Farmers Union President Doug Sombke, who also
farms in Brown County.
The applicator's Farmers Union Insurance policy denied coverage of
Schuelke's damaged soybeans. Liability only covers damage to one's
own crops. The exchange is now a ghost of tweets past, long since
deleted.
The men say they go way back, as several-generations farmers do in
these parts. They attend the same church. Mostly it was a venting
on Schuelke's part. The discourse stopped short before it embraced
a full-on "dance with the media devil," as Schuelke taunted at the
end of one tweet.
Sombke understands his frustration. Essentially, all the letter
gives Schuelke is validation and documentation if he wants to
follow up with a civil lawsuit — potentially adding to his loss
in the form of attorney costs and court fees.
The state could have taken action. A few options are set out in
state law.
"It could be anywhere from a monetary fine to a formal warning
letter. In 25% of the cases we take some kind of action," said Tom
Gere, assistant director for the Division of Agricultural
Services.
But there is no requirement for Agricultural Services to take
action against violators, said Maggie Stensaas, communication
officer for the division.
"Our policy is to take action when a violation has been proven. At
the minimum that action may be to issue a warning," she said in a
series of questions submitted by the American News.
Gere didn't get into Schuelke's specific claim.
"What we focus on is the label and the pesticides that were used.
2017 was probably the peak (for claims). In 2018 we got half as
many issues. When the products first came out, there were some
unknowns," Gere said.
In 2017, new formulas of dicamba were introduced: Engenia from BASF
Agriculture Global; FeXapan from DuPont; XtendiMax with VaporGrip
from Monsanto -- the latter being the one that dinged Schuelke's
nonresistant beans.
"Prior to the 2017 season, the SDDA typically handled 50 drift
cases or less annually. In 2017, the SDDA drift investigations
increased dramatically," Stensaas said.
There were about 150 drift cases in 2017.
Dicamba is highly susceptible to vapor drift, and vapor drift
occurs readily during what's called an inversion. When it happens,
dicamba can evaporate from the ground back into the low layer of
atmosphere and drift.
"It can occur two to three days after application. It's made worse
in drought conditions," said Laura Edwards, state climatologist.
In many areas. 2017 was a dry year.
"Temperature inversions are very common during the typical spray
season of May to July. Our South Dakota Mesonet data shows that as
much as 20 to 25 days per month -- 70 to 80% of the time -- can
have temperature inversions that develop in the evening and
overnight hours until morning," Edwards said.
Mesonet, found online at climate.sdstate.edu, is a tool from the
state Extension office that helps chemical applicators predict when
there's more potential for an inversion that could cause vapor
drift.
The website also helps farmers and others investigate claims by
using historical data.
While drifting from a neighbor's field can cause crop damage,
conversations between those same neighbors can help avoid it.
Talking about what, when and where there will be spraying can stave
off potential issues.
If multiple surrounding farms are using dicamba, it can sometimes
be hard to tell where damage to intolerant crops came from and the
Division of Agricultural Services might have to investigate.
If a claimant receives an open-and-closed letter like Schuelke's,
he or she might have to consider filing multiple civil lawsuits to
be compensated for losses.
Craig Schaunaman of rural Aberdeen has also seen his crops damaged
by vapor drift.
"We had alfalfa that got drifted on. In the alfalfa, we weren't
sure what was going on. We did testing. That was in 2017. In 2018
we did have some on beans drifted on. The beans that weren't
drifted on, there was a six-bushel-an-acre difference. Our proven
yield is about 44 bushels," he said.
Schaunaman filed a complaint with the state for the fields affected
by drift. He included his own test results and the names of
adjoining neighbors. The state ran its own test, confirming the
drift, he said, but no further action has been taken to his
knowledge.
Stensaas said the Department of Agriculture decides what action to
take in response to violations on a case-by-case basis.
Sombke, Schuelke and Schaunaman agree there are some farmers who
can't take the risk of a nontolerant crop getting hit with dicamba
damage or any civil lawsuits in the event the state doesn't act.
"Unless you can prove it was too windy (or) something was not right
according to label through collection of evidence with your case,
you don't really have a case," Sombke said. "The only way to get
that information is to sue to get it. I think that's wrong. We
insure people to help them, not just to hang them out to dry. There
needs to be something to address that from the state and also from
the insurance side."
"The biggest thing in South Dakota, we take a hands-off approach to
the dicamba issue. That's where the problems lie. (The state) is
failing to do that right now," he said
Sombke said he took a $50,000 hit from a dicamba-damaged crop.
The potential risk can leave farmers with few options.
"I think the biggest thing is guys said, 'I'm going to plant
(dicamba-tolerant soybeans) just so mine don't get damage.' So they
knuckled under the pressure of the industry," Sombke said.
Even with best-laid plans, things can be difficult with dicamba,
which works perfectly in perfect conditions, but can also cause
problems.
Sombke said he's been through training, and it ultimately comes
down to "human judgement, human error." Claims decreased with
implemented dicamba-specific training in 2018 -- the number dropped
to 90 from the 2017 spike, Stensaas said.
Thousands of dollars have been lost, and most farmers will just
have to absorb that hit at a time when market prices are low.
Some are looking at rotating in sunflowers, and others will play
the risk of non-GMO crops. But Schuelke has a feeling that if
enough farmers' claims aren't satisfied concerning damage caused by
dicamba drift, there could be a bigger dispute in the future.
"I think there's an outside chance in the next few years," he said.
"I think there could be a class action lawsuit some day." [GN]
MONSANTO COMPANY: Castro Sues over Sale of Herbicide Roundup
------------------------------------------------------------
RENILDA CASTRO, ON BEHALF OF THE ESTATE OF FERNANDO CASTRO, the
Plaintiff, v. MONSANTO COMPANY and John Does 1-50, the Defendants,
Case No. 3:19-cv-03887 (N.D. Cal., July 7, 2019), seeks to recover
damages suffered by the Plaintiff, as a direct and proximate result
of the Defendant's negligent and wrongful conduct in connection
with the design, development, manufacture, testing, packaging,
promoting, marketing, advertising, distribution, labeling, and/or
sale of the herbicide Roundup (TM), containing the active
ingredient glyphosate.
The Plaintiff maintains that Roundup (TM) and/or glyphosate is
defective, dangerous to human health, unfit and unsuitable to be
marketed and sold in commerce, and lacked proper warnings and
directions as to the dangers associated with its use. Fernando
Castro's injuries, like those striking thousands of similarly
situated victims across the country, were avoidable.
The Plaintiff brings this action for personal injuries sustained by
exposure to Roundup (TM), which contains the active ingredient
glyphosate and the surfactant polyethoxylated tallow amine (POEA).
As a direct and proximate result of being exposed to Roundup, the
Plaintiff developed diffuse Non-Hodgkin's Lymphoma.
Roundup refers to all formulations of Defendant's Roundup products,
including, but not limited to, Roundup Concentrate Poison Ivy and
Tough Brush Killer 1, Roundup Custom Herbicide, Roundup D-Pak
Herbicide, Roundup Dry Concentrate, Roundup Export Herbicide,
Roundup Fence & Hard Edger 1, Roundup Garden Foam Weed & Grass
Killer, Roundup Grass and Weed Killer, Roundup Herbicide, Roundup
Original 2k Herbicide, Roundup Original II Herbicide, Roundup Pro
Concentrate, Roundup Pro Dry Herbicide, and Roundup Promax.[BN]
The Plaintiff is represented by:
Jonathan P. Novak, Esq.
Matthew R. McCarley, esq.
FEARS NACHAWATI, PLLC
5473 Blair Road
Dallas, TX 75231
Telephone: (214) 890-0711
Facsimile: (214) 890-0712
E-mail: jnovak@fnlawfirm.com
mccarley@fnlawfirm.com
MOUNT IDA: Massachusetts Court Dismisses Squeri Suit With Prejudice
-------------------------------------------------------------------
In the case, TRISTAN SQUERI, MADELINE McCLAIN, and GEORGE O'DEA,
individually and on behalf of all others similarly situated, v.
MOUNT IDA COLLEGE, et al, Civil Action No. 18-12438-RGS (D. Mass.),
Judge Richard D. Stearns of the U.S. District Court for the
District of Massachusetts Allowed the Defendants' motions to
dismiss with prejudice.
Mount Ida College was a not-for-profit institution with a principal
place of business in Foxborough, Massachusetts. Mount Ida closed
its doors on May 17, 2018. According to the Amended Complaint, the
Defendants knew that Mount Ida was struggling financially in as
early as 2014, but failed to disclose its precarious fiscal state
to current and prospective students. The Plaintiffs point to the
fact that in 2017, the Defendants reported to the New England
Association of Schools and Colleges that, among other things, Mount
Ida was financially stable.
On Feb. 24, 2018, Mount Ida announced that it had entered merger
negotiations with Lasell College, but did not attribute the
potential merger to any financial pressure. On March 21, 2018, the
Defendants rejected the terms of the merger and, two days later,
informed the Mount Ida community that they had broken off the talks
with Lasell. On April 6, 2018, Brown sent a blast email to
enrolled students informing them that Mount Ida had agreed to sell
its Newton, Massachusetts, campus to UMass Amherst and that all
current students would be guaranteed admission to UMass Dartmouth.
On Nov. 26, 2018, the Plaintiffs brought the lawsuit.
The Plaintiffs, on behalf of former and prospective Mount Ida
students, allege that the Defendants failed to inform them of Mount
Ida's dire financial straits and shared their academic and
financial profiles with the University of Massachusetts Dartmouth
without their consent. More specifically, the Amended Complaint
sets out seven claims: violation of privacy under Mass. Gen. Laws
ch. 214, Section 1B (Count I), fraud (Count II), negligent
misrepresentation (Count III), fraud in the inducement (Count IV),
breach of fiduciary duty (Count V), breach of contract (Count VI),
and unfair and deceptive practices in violation of Mass. Gen. Laws
ch. 93A, Section 9 (Count VII).
The Defendants move to dismiss the Amended Complaint for failure to
state a claim.
The Plaintiffs allege that the Defendants violated their privacy
rights under Mass. Gen. Laws ch. 214, Section 1B, by disclosing
their sensitive and private student academic data to UMass
Dartmouth without their consent. Judge Stearns holds that the
Plaintiffs' allegations fail to establish that the disclosure of
their records to UMass Dartmouth was unreasonable as a matter of
law. To the contrary, Mount Ida submitted the records to UMass
Dartmouth to facilitate the Plaintiffs' enrollment at the successor
institution. The transfer of records, therefore, served a
"legitimate purpose," and was indisputably conducted in accordance
with the Massachusetts Attorney General's May 15, 2018 guidance
letter, and Massachusetts regulations. Thus, the Plaintiffs'
privacy claim fails as a matter of law.
Next, Mount Ida's audited financial disclosures, which the
Plaintiffs do not allege were inaccurate, were publicly available.
These disclosures revealed that Mount Ida had been operating at a
deficit since 2015. Although the Plaintiffs allege that the
Defendants reported to NEASC in 2017 that Mount Ida was financially
stable, the October 2017 NEASC report reviewed Mount Ida's finances
and specifically noted that Mount Ida has produced deficits which
is making it difficult for the College to support its mission. The
Plaintiffs' claims of fraud, negligent misrepresentation, and fraud
in the inducement therefore fail as a matter of law.
The Plaintiffs allege that the Defendants breached a fiduciary duty
owed to them by, again, failing to disclose Mount Ida's financial
woes and by sharing their sensitive financial and academic
information with UMass Dartmouth. The Plaintiffs' breach of
fiduciary duty claim, however, fails as a matter of law, the Judge
finds. Massachusetts courts have consistently held that no
fiduciary relationship exists between a student and his or her
college. To the extent that a fiduciary duty was imposed on the
Defendants, it was owed to Mount Ida as a corporate entity.
The Plaintiffs also fail to identify, among other things, the
specific terms of the purported contract, when it was formed, and
who negotiated it. The Judge holds that merely paying tuition in
exchange for an education does not create a contract. Ultimately,
the lack of specificity is fatal to the Plaintiffs' breach of
contract claim.
Finally, the Plaintiffs contend that the Defendants engaged in
"trade or commerce" by, among other things, offering for sale a
unique product and competing in the marketplace with other schools
through "marketing and advertising." However, these actions were
in furtherance of Mount Ida's core educational mission or were, at
least, incidental to that mission. Its attempted merger with
Lasell College and subsequent transfer of student data to UMass
Dartmouth also served to further the school's core mission of
providing and advancing student education. The Plaintiffs' Chapter
93A claim therefore fails because the Defendants were not engaged
in "trade or commerce" for purposes of the statute.
For the foregoing reasons, Judge Stearns allowed with prejudice the
Defendants' motions to dismiss. The clerk will enter judgment for
the Defendants and closes the case.
A full-text copy of the Court's May 24, 2019 Memorandum and Order
is available at https://is.gd/n8z3N6 from Leagle.com.
Tristan Squeri, Individually and on behalf of all others similarly
situated, Madeline McClain, Individually and on behalf of all
others similarly situated & George O'Dea, Individually and on
behalf of all others similarly situated, Plaintiffs, represented by
Andra J. Hutchins -- ahutchins@kcl-law.com -- Kerstein, Coren,
Lichtenstein LLP, Joshua N. Garick -- joshua@garicklaw.com -- Law
Offices of Joshua N. Garick, P.C., Michael D. Tauer --
mtauer@kcl-law.com -- Kerstein, Coren, Lichtenstein LLP & Sean S.
LaPorta, Kerstein, Coren, Lichtenstein LLP.
Mount Ida College, The Mount Ida College Board of Trustees, Carmin
C. Reiss, Individually and as a representative of the Mount Ida
College Board of Trustees, Jeff Cutting, Individually and as a
representative of the Mount Ida College & Ron Akie, Individually
and as a representative of the Mount Ida College, Defendants,
represented by Jeremy M. Sternberg -- jeremy.sternberg@hklaw.com --
Holland & Knight, John J. Monaghan, Holland & Knight, LLP, Paul G.
Lannon, Jr. -- paul.lannon@hklaw.com -- Holland & Knight, LLP &
Christopher M. Iaquinto -- Christopher.Iaquinto@hklaw.com --
Holland & Knight.
Barry Brown, Individually and as a representative of Mount Ida
College, Defendant, represented by Howard M. Cooper --
hcooper@toddweld.com -- Todd & Weld & Elizabeth E. Olien --
eolien@toddweld.com -- Todd & Weld.
Jason Potts, Individually and as a representative of the Mount Ida
College, Defendant, represented by Tamsin R. Kaplan --
tkaplan@davismalm.com -- Davis, Malm & D'Agostine P.C. & Emily P.
Crowley -- ecrowley@davismalm.com -- Davis Malm & D'Agostine.
NATIONWIDE MUTUAL: Loses Bid to Dismiss B. Smith's UIM Suit
-----------------------------------------------------------
The United States District Court for the Eastern District of
Pennsylvania issued an Order denying Defendant's Motion to Dismiss
in the case captioned BRENDAN SMITH, individually and on behalf of
all others similarly situated, v. NATIONWIDE MUTUAL INSURANCE
COMPANY. Civil Action No. 19-1217. (E.D. Pa.).
The central question presented in Defendant's Motion to Dismiss is
whether the recent Pennsylvania Supreme Court case, Gallagher v.
GEICO Indem. Co., 201 A.3d 131 (Pa. 2019), applies to this set of
facts.
Plaintiff Brendan Smith seeks underinsured motorist coverage (UIM)
from Defendant Nationwide Mutual Auto Insurance under his parent's
automobile policy. Plaintiff brings claims for declaratory relief
and breach of contract. Smith's parents had an automobile insurance
policy with Nationwide that provided for $50,000/$100,000 in
stacked UIM coverage for two motor vehicles.
The Plaintiff alleges that the Defendant improperly denied his
claim, and that under the MVFRL, uninsured and underinsured
motorist coverage is to be stacked unless waived by the named
insured. Thus, the Plaintiff asserts that the household exclusion
is violative of the MVFRL in that it abrogates the inter-policy
stacking of the underinsured motorist coverage in the household for
which a specific, additional premium was charged and accepted.
Gallagher v. GEICO
In Gallagher, the Pennsylvania Supreme Court held that a household
vehicle exclusion contained in a motor vehicle insurance policy
violates the MVFRL.
Appellant Brian Gallagher had two policies with GEICO, one for his
motorcycle and one for his automobile and had opted and paid for
stacked UM and UIM coverage when purchasing both policies. When
Gallagher was in an accident on his motorcycle and the tortfeasor
was underinsured, he sought coverage under his motorcycle policy.
GEICO paid Gallagher's claim under the UIM coverage of his
motorcycle policy but denied the claim under the UIM coverage of
his automobile policy because of the household vehicle exception.
GEICO had taken the position that the household vehicle exception
precluded Gallagher from receiving stacked UIM coverage pursuant to
that policy.
The trial court granted summary judgment for GEICO, and the
Superior Court affirmed. A majority of the Supreme Court, in an
opinion written by Justice Baer, vacated and remanded. The Court
evaluated the language of the MVFRL, concluding that under
Subsection 1738(a), stacked UM/UIM coverage is the default coverage
available to every insured, and can only be waived if the
statutorily prescribed waiver form has been signed.
The Court held that the household vehicle exception in Gallagher's
policy, buried in an amendment, is inconsistent with the
unambiguous requirements of Section 1738 of the MVFRL under the
facts of this case inasmuch as it acts as a de facto waiver of
stacked UIM coverage provided for in the MVFRL, despite the
indisputable reality that Gallagher did not sign the statutorily
prescribed UIM coverage waiver form.
Parties' contentions
The Defendant's motion argues that Gallagher is distinguishable
from the Plaintiff's allegations because in Gallagher, both
policies were issued by GEICO, and GEICO unilaterally placed
Gallagher's motorcycle and automobiles on two separate policies.
The Defendant contends that the Gallagher Court limited its
holdings to those facts, and asserts that the instant case is two
factual steps removed from Gallagher: (1) the motorcycle was
insured by State Farm (Policy A) and not Nationwide and (2) the
Smith Parents, not Plaintiff, purchased Policy B from Nationwide.
The Plaintiff responds in two ways. He first argues that did not
matter that Defendant did not know of the other policy here, that
the fact that Nationwide did not insure the motorcycle is of no
relevance no more significant than the fact that the injured victim
may have been operating a car rather than a motorcycle.
The Plaintiff also responds that in Gallagher, the motorcycle
policy was issued by GEICO Indemnity Company and the personal auto
policy was issued by GEICO General Insurance Policy, who he
contends are separate and distinct.
The Defendant responds that the policy goal underlying the MVFRL
has not changed, and cites to a number of opinions in pre-Gallagher
cases that it asserts were not overruled by Gallagher, each of
which noted the cost containment goals of the MVFRL.
The Defendant correctly asserts that Gallagher did not expressly
overrule either of these cases.
The Court declines the Plaintiff's invitation to conclude that the
Supreme Court has reversed course on its long-standing conclusion
that cost containment is the underlying policy rationale of the
MVFRL. The Gallagher Court noted that it need not pursue the
"spirit" of the MVFRL if the "words of the statute are clear and
free from ambiguity."
Because the Court found that the language of the household vehicle
exception clearly violated Subsection 1738(a) of the MVFRL, it
invalidated the provision without evaluating the policy underlying
the MVFRL.
Based upon Gallagher, and in light of our review of the facts in
the light most favorable to the Plaintiff, the Court concludes that
Plaintiff has sufficiently stated a claim for declaratory relief
and breach of contract. Plaintiff's parents paid an additional
premium for stacked UIM coverage for themselves and their
relatives. As Plaintiff properly observed, the household vehicle
exclusion takes away inter-policy stacking, with no notice to the
insured, no signed Rejection, and no return of the premium.
In other words, the household vehicle exclusion in the Nationwide
policy at issue acts as a de facto waiver of stacked UIM coverage,
even though Plaintiff's parents did not sign a waiver and paid an
additional premium for the coverage. The Gallagher Court addressed
this very scenario.
Gallagher was the first time a majority of the Pennsylvania Supreme
Court has opined on such issues, which this Court does not take
lightly. Accordingly, the Court is unprepared to determine, at a
motion to dismiss stage, that the household vehicle exception in
the insurance policy at issue does not act as a de facto waiver of
stacked UIM coverage. The parties may raise this issue again in
summary judgment motions, should they chose to do so, with the
benefit of discovery.
The Plaintiff has set forth sufficient facts demonstrating that he
was eligible for UIM coverage under his parent's Nationwide plan,
and therefore he can state a claim for declaratory relief and
breach of contract.
Accordingly, the Defendant's Motion to Dismiss is denied.
A full-text copy of the District Court's June 24, 2019 Memorandum
is available at https://tinyurl.com/y2bs4f6n from Leagle.com.
BRENDAN SMITH, INDIVIDUALLY AND ON BEHALF OF A CLASS OF SIMILARLY
SITUATED PERSONS, Plaintiff, represented by AARON B. GORODETZER,
SBARBARO LAW OFFICES, LLC, 705 Gordon Drive, Exton, PA 19341, JAMES
C. HAGGERTY -- jhaggerty@hgsklawyers.com -- HAGGERTY GOLDBERG
SCHLEIFER & KUPERSMITH PC & SCOTT B. COOPER, SCHMIDT, RONCA &
KRAMER P.C., 209 State St., Harrisburg, PA 17101
NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant, represented by
PAMELA A. CARLOS -- carlos@bbs-law.com -- BENNETT BRICKLIN &
SALTZBURG LLP & JENNIFER A. L. BATTLE, CARPENTER LIPPS & LELAND
LLP, 280 North High Street, Suite 1300, Columbus, OH 43215.
NISSAN: Agrees to Settle Altima Transmission Class Action
---------------------------------------------------------
David A. Wood, writing for CarComplaints.com, reports that a Nissan
Altima CVT class action lawsuit may soon be settled for former and
current owners and lessees of about 1.4 million cars.
The proposed Altima continuously variable transmission (CVT) class
action lawsuit settlement includes five separate actions:
-- Robert H. Weinberg vs. Nissan North America, Inc.
-- Salome Madrid vs. Nissan North America, Inc.
-- Elisa Cabebe vs. Nissan of North America, Inc.
-- Krista Costa vs. Nissan North America, Inc.
-- Christopher Gann vs. Nissan North America, Inc.
According to the lawsuits, the 2013-2016 Altima CVTs hesitate,
shudder, shake and make noise before they finally fail. The slow
response times of the Altima transmissions allegedly make the cars
dangerous to drive on highways, especially when the cars stall.
Some Altima customers claim they spent thousands of dollars to
repair or replace the transmissions, and customers claim
replacement CVTs are just as defective as the originals.
The lawsuit also references technical service bulletins Nissan sent
to dealerships because Altima customers were complaining about the
transmissions.
In the proposed settlement, Nissan has agreed to extend the
transmission assembly warranty by 24 months or 24,000 miles,
whichever occurs first. However, the CVT warranty extension will
still be subject to the original new vehicle limited warranty.
This means an Altima owner could still be denied coverage if Nissan
decides the CVT problems are caused by "damage resulting from
alteration, tampering, improper repair, misuse, environmental
conditions, and lack of or improper maintenance."
The automaker will also reimburse customers for replacements or
repairs to the transmission assemblies or transmission control
units, but only for qualifying repairs. To receive reimbursements,
customers must have paid for repairs or replacements for work
performed after the powertrain warranties expired.
If the replacement or repair was performed by a Nissan dealer, the
full amount paid will be reimbursed, but if the work was performed
by a non-Nissan repair facility, Nissan will reimburse up to $5,000
for that repair or replacement.
Another condition for reimbursement is the replacement or repairs
must have occurred on or before the vehicle was in service for 84
months or driven for 84,000 miles, whichever occurs first.
As for a former 2013-2016 Altima owner, they may be eligible for a
$1,000 voucher toward the purchase or lease of a new Infiniti or
Nissan vehicle as long as specific conditions are met.
The former owner must have had two or more replacements or repairs
to the transmission assembly or the control unit and supported by
all necessary documentation. In addition, the voucher expires nine
months from the effective date of the settlement.
A former owner will not qualify for the voucher if the repairs
consisted of prior software updates and/or reprogramming.
According to court documents, Nissan has agreed to pay $5.9 million
to the lawyers representing Altima owners.
Although Nissan agreed to settle the CVT class action lawsuit, a
federal judge must still look things over and give final approval.
The Nissan Altima CVT class action lawsuit was filed in the U.S.
District Court for the Middle District of Tennessee.
The plaintiffs are represented by Barnow and Associates, Blood
Hurst & O'Reardon, Glancy, Prongay & Murray, and Sanford Heisler
Sharp. [GN]
NU SKIN: Dawson Asserts Breach under Disabilities Act
-----------------------------------------------------
Nu Skin International, Inc. is facing a class action lawsuit filed
pursuant to the Americans with Disabilities Act. The case is styled
as Leshawn Dawson, on behalf of himself and all others similarly
situated, Plaintiff v. Nu Skin International, Inc., Defendant, Case
No. 1:19-cv-06362 (S.D. N.Y., July 9, 2019).
Nu Skin is a global direct selling company in the beauty and health
industry.[BN]
The Plaintiff is represented by:
Joseph H Mizrahi, Esq.
Cohen & Mizrahi LLP
300 Cadman Plaza West, 12th Floor
Brooklyn, NY 11201
Tel: (929) 575-4175
Fax: (929) 575-4195
Email: joseph@cml.legal
OCEAN SPRAY: Court Disallows Exclusion of Expert Witness in Hilsley
-------------------------------------------------------------------
The United States District Court for the Southern District of
California issued an Order denying Plaintiffs' Motion to Exclude
Expert Testimonies in the case captioned CRYSTAL HILSLEY, on behalf
of herself and all others similarly situated, Plaintiff, v. OCEAN
SPRAY CRANBERRIES, INC.; ARNOLD WORLDWIDE LLC; and DOES defendants
1 through 5, inclusive, Defendants. Case No. 17cv2335-GPC(MDD).
(S.D. Cal.).
Plaintiff filed a motion to exclude the testimony opinions and
reports of Nancy Higley, Nicole Liska, Sarah Butler, and Paula
Lent.
Plaintiff Crystal Hilsley (Hilsley) filed a purported consumer
class action against Defendants Ocean Spray Cranberries, Inc.
(Ocean Spray) and Arnold Worldwide LLC (Arnold Worldwide)
(Defendants) for violations of California consumer protection laws
based on a misrepresentation on labels stating no artificial
flavors on certain Ocean Spray products (Products). Plaintiff
claims that the labels on Defendants' Products are false and
misleading because each Product contains artificial flavoring
ingredients, dl-malic acid and/or fumaric acid to simulate
advertised fruit flavors.
The Plaintiff alleges six causes of action for violations of the
Consumer Legal Remedies Act (CLRA), the unlawful prong of the
Unfair Competition Law (UCL), the unfair prong of the UCL,
California's False Advertising Law (FAL), and breach of express
warranty and breach of implied warranty.
The Plaintiff moves to exclude the expert rebuttal reports of Nancy
Higley, Nicole Liska, and Sarah Butler as untimely. Defendants
respond Plaintiff cannot demonstrate the untimely expert rebuttal
reports were not substantially justified or prejudicial.
The Defendants, without seeking leave of court, served the rebuttal
expert reports of Nicole Liska, Sarah Butler and Nancy Higley on
April 3, 2019, thirty days past the deadline. As noted by the
Magistrate Judge in a recent discovery order, the designations of
these experts were timely, but the disclosures were late.
Defendants have provided an explanation, but Plaintiff has moved
for exclusion of these experts.
Federal Rule of Civil Procedure (Rule) 26(a)(2) provides that a
party must disclose the identity of any expert witness it intends
to use at trial. Parties are required to make expert disclosures at
the times and in the sequence that the court orders. If the expert
witness is retained or specially employed to provide expert
testimony, the disclosure must include a report that is prepared
and signed by the expert.
The Plaintiff argues that the rebuttal reports should be excluded
because Defendants cannot show substantial justification or
harmlessness. Defendants respond that the motion to exclude is now
moot based on the Magistrate Judge's order filed on May 7, 2019. In
that order, the Magistrate Judge modified the scheduling order and
allowed Plaintiff to depose Butler, Liska and Higley.
Therefore, the Plaintiff cannot show prejudice. Moreover, the
Defendants explain that they were delayed in producing their expert
rebuttal reports because Plaintiff refused to make her experts
available for deposition and failed to produce Dr. Belch's survey
data until after expert report deadline of March 4, 2019.
The factors of prejudice, the ability of the party to cure the
prejudice and the likelihood of disruption of the trial are now
mitigated based on the Magistrate Judge's order allowing Plaintiff
to depose the rebuttal experts. Plaintiff claims that the untimely
expert reports have prejudiced her with the additional burden and
cost of analyzing the untimely expert reports on short notice,
potentially opening up dispositive motion deadlines on these
experts, and the last minute disclosures have cut into her time to
prepare for trial. While these additional burdens and costs may
prejudice Plaintiff, the delay in producing the rebuttal expert
reports was not primarily caused by Defendants. Starting on
February 8, 2019, a month before the rebuttal expert report
deadline, Defendants sought Dr. Belch's survey data so that their
rebuttal experts could prepare their reports by the March 4, 2019
deadline.
When the Plaintiff did not produce Dr. Belch's survey data,
Defendants followed up with emails and telephone calls on February
19, 21, 2019 and March 1, 4, 2019. Plaintiff finally produced the
data on March 5, 2019 past the March 4, 2019 deadline for rebuttal
expert reports. Concerning discovery, the Magistrate Judge noted
that the parties have made a mess of things, all of which could
have been avoided with better cooperation and better communication
with each other and with the Court.
The Court concludes that the Defendants have provided substantial
justification for the late rebuttal expert reports and that the
delay was not prejudicial. Accordingly, the Court denies
Plaintiff's motion to exclude the expert rebuttal reports of Nancy
Higley, Nicole Liska, and Sarah Butler.
Motion to Exclude Defendants' Expert Paula Lent
The Plaintiff next moves to exclude the expert testimony and report
of Paula Lent, Ocean Spray's Senior Manager of Global Product
Development, Food and Beverages, as not qualified to provide an
opinion on the subject matter contained in her report and her
opinions are not the product of reliable principles and methods.
The Defendants respond that Paula Lent has years of experience at
Ocean Spray to qualify her as an expert and Plaintiff's arguments
go to the weight and not admissibility of her testimony.
Under Rule 702, a witness, qualified as an expert by knowledge,
skill, experience, training, or education, may testify if (a) the
expert's scientific, technical, or other specialized knowledge will
help the trier of fact to understand the evidence or to determine a
fact in issue (b) the testimony is based on sufficient facts or
data (c) the testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied the principles and
methods to the facts of the case. 702. The proponent of the
evidence bears the burden of proving the expert's testimony
satisfies Rule 702.
The Plaintiff argues that Paula Lent is not qualified and lacks
specialized knowledge to offer expert opinions about the functions
of malic and fumaric acids in the Products. Defendants argue that
Lent possesses specialized knowledge and skills from her education
and seventeen years of practical experience working in the food and
beverage industry in research and development roles.
Rule 702 requires that an expert possess knowledge, skill,
experience, training, or education sufficient to assist the trier
of fact, which is satisfied where expert testimony advances the
trier of fact's understanding to any degree. Furthermore, to
testify as an expert, an individual need not be officially
credentialed in the specific matter under dispute.
For the past year, Paula Lent has been the Senior Manager, Global
Product Development, Food and Beverages for Ocean Spray and
supervises a team of scientists that collaborate with other teams
within Ocean Spray to formulate new products and modify existing
products so that its portfolio of beverages remains relevant to
consumers and meets the quality, nutrition and overall consumer
satisfaction.
She has worked at Ocean Spray since 2008. Lent has a Bachelor of
Science in Food Science and a Master of Science in Cereal Science,
from North Dakota State University and has been involved in the
food industry working in food science and ingredient technology
since 2002. Between 2002 to 2008, she worked in the food industry
related to breakfast, dessert and fresh bread products.
The Plaintiff argues that Lent has been employed merely as a
Manager and Senior Manager for Ocean Spray for the past eight years
which do not translate to expert status on the functions of
chemical additives. She contends that REDACTED.
The Defendants argue that the challenges Plaintiff asserts based on
Lent's qualifications can be challenged on cross-examination at
trial. They argue that Lent has years of practical experience in
the food science industry.
Next, the Plaintiff contends that Lent's opinions are not based on
reliable principles and methods but are only based on her personal
experience as an employee of Ocean Spray and relies solely on what
she was told by her employer. Her opinions are purely subjective
and contain little or no analysis.
The Defendants counter that Lent's opinion about Ocean Spray's
manufacturing and quality control processes and the ways malic and
fumaric acids are used in those processes is largely technical and
will be helpful to the trier of fact.
Her opinion is predicated on what she learned about Ocean Spray's
own processes and procedures based on her years of technical and
scientific work with Ocean Spray and Plaintiff's attacks relate to
the weight not admissibility of her opinion. Defendants also note
that her testimony will mostly be fact based and will be admissible
whether as an expert or not.
The Court questions whether Lent's opinions are expert opinions
subject to a Daubert analysis. While her testimony and opinion are
technical and could assist the trier of fact, her knowledge and
experience comes from her personal knowledge while working at Ocean
Spray. Therefore, it would be more appropriate for Lent to testify
as a lay witness.
Under Rule 701, a lay witness may provide opinion testimony that is
based on a witness's perception if the opinion is a rationally
based on the perception of the witness (b) helpful to a clear
understanding of the witness' testimony or the determination of a
fact in issue, and (c) not based on scientific, technical or other
specialized knowledge within the scope of Rule 702. Rule 701
derives from Rule 602 which states in pertinent part that a witness
may testify to a matter only if evidence is introduced sufficient
to support a finding that the witness has personal knowledge of the
matter. Evidence to prove personal knowledge may consist of the
witness's own testimony.
Here, because Lent's testimony is based on her perceptions and
personal knowledge while working at Ocean Spray, her testimony is
admissible as a lay witness. Accordingly, because Lent may testify
as a lay witness, the Court DENIES Plaintiff's motion to exclude
the testimony and opinion of Paula Lent.
Based on the reasoning above, the Court denies the Plaintiff's
motion to exclude the rebuttal expert reports of Nancy Higley,
Nicole Liska and Sarah Butler as untimely. The court also denies
the Plaintiff's motion to exclude the expert opinion of Paula
Lent.
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/y4dkpk7x from Leagle.com.
Crystal Hilsley, on behalf of herself and all others similarly
situated, Plaintiff, represented byDavid Elliot, The Elliott Law
Firm, Lilach Halperin, Law Offices of Ronald A. Marron, PLC,Michael
Houchin, Law Offices of Ronald A. Marron & Ronald Marron, Law
Office of Ronald Marron, 651 Arroyo DriveSan Diego, CA 92103
Ocean Spray Cranberries, Inc. & Arnold Worldwide LLC, Defendants,
represented by Ricky Lynn Shackelford -- shackelfordr@gtlaw.com --
Greenberg Traurig, LLP.
The Nielsen Company (U.S.), LLC, Miscellaneous Party, represented
by Heather Elizabeth Belville -- heatherbelville@quinnemanuel.com
-- Quinn Emanuel Urquhart & Sullivan, LLP & Robert James Slobig --
rslobig@torshen.com -- Torshen, Slobig & Axel, Ltd., pro hac vice.
ODD JOB: Attorney General Mulls Class Action Following Closure
--------------------------------------------------------------
WILX reports that Attorney General Dana Nessel might be filing a
class action lawsuit.
The lawsuit would be filed against Odd Job Disposal Inc. and its
owners Aaron Walter and Thomas Christensen, according to a press
release from the attorney's office.
The Oakland County-based waste-hauling company closed its doors
this spring leaving nearly 13,000 customers without service.
"Our Consumer Protection Division has received more than 40
complaints against this company since the first of the year," said
Nessel. "We have seen a pattern of behavior from this company that
is totally unacceptable: they knew they were closing, but continued
to bill customers for their services anyway -- and are now failing
to make refunds to those customers who had either cancelled their
service or are no longer getting service because of Odd Job's
closure."
Other employees of Odd Job Disposal Inc. have been subpoenaed as
well.
"While we do not know yet what refunds are due nor do we know the
extent or value of available assets," Nessel said. "Our goal is to
preserve as much information as possible to protect Michigan
residents." [GN]
OHR PHARMA: Suits over NeuBase Merger Dismissed
-----------------------------------------------
OHR Pharmaceutical, Inc. said in its Form 8-K filing with the U.S.
Securities and Exchange Commission filed on July 3, 2019, 2019,
that the lawsuits challenging the company's merger deal with
NeuBase Therapeutics, Inc.have been dismissed.
On March 18, 2019, a lawsuit was filed by an alleged individual
shareholder in the United States District Court for the Southern
District of New York against Ohr Pharmaceutical, Inc. ("Ohr") and
its board of directors, captioned Gomez v. Ohr Pharmaceutical,
Inc., et al., Case No. 1:19-cv-02386 (the "Gomez Action"), alleging
that the defendants violated federal securities laws by
disseminating proxy materials that included allegedly material
misstatements or omissions in connection with a Form S-4
Registration Statement (the "Registration Statement") filed by Ohr
with the U.S. Securities and Exchange Commission ("SEC") on March
8, 2019.
Subsequently, on March 20, 2019, David Lowinger, an alleged
stockholder of Ohr, filed a putative class action in the Delaware
Court of Chancery, captioned Lowinger v. Ferguson, et al., Case No.
2019-0221-SG (the "Lowinger Action") against Ohr and its board
members alleging that the board of directors of Ohr had breached
their fiduciary duties in connection with the acquisition of Ohr by
NeuBase Therapeutics, Inc. ("NeuBase") and the disclosures made in
the Registration Statement .
Specifically, the Mr. Lowinger sought additional disclosures to
address the alleged deficiencies in the Registration Statement
relating to the proposed merger in connection with the stockholder
vote thereupon and/or injunctive relief.
On April 4, 2019, another putative class action was filed in the
United States District Court for the Southern District of New York
asserting similar securities violations against Ohr and its board
of directors, captioned Garaygordobil v. Ohr Pharmaceutical, Inc.,
et al., Case No. 1:19-cv-03006 (the "Garaygordobil Action").
On April 16, 2019, Defendants filed an amended Form S-4
Registration Statement with the SEC that addressed and mooted
claims made in the Gomez Action, Lowinger Action, and Garaygordobil
Action regarding the sufficiency of the disclosures in the
Recommendation Statement, and further disclosed that the Company
had waived the "don't-ask-don't-waive" provisions of 25 standstill
agreements that previously had been entered into with potential
suitors to acquire the Company.
On May 1, 2019, the Court of Chancery entered an order dismissing
the Lowinger Action and retained jurisdiction solely for the
purpose of ruling on the plaintiff's anticipated application for an
award of attorneys' fees and reimbursement of expenses related to
all three actions.
On May 17, 2019 and May 21, 2019, the plaintiffs in the Gomez
Action and Garaygordobil Action each filed a notice of voluntary
dismissal, dismissing those actions with prejudice as to the name
plaintiff and, in the Garaygordobil Action, without prejudice as to
any claims by other putative class members.
The parties subsequently agreed to a payment by Ohr to plaintiffs'
counsel of $180,000 in full satisfaction of any claim for
attorneys' fees and expenses in the Gomez Action, Lowinger Action,
and Garaygordobil Action.
OHR Pharmaceutical said, "Neither the Court of Chancery nor the
United States District Court for the Southern District of New York
has been asked to review or approve this payment."
OHR Pharmaceutical, Inc. operates as a development stage
pharmaceutical company. The company intends to merge with NeuBase
Therapeutics, Inc. that focuses on advancing NeuBase's
peptide-nucleic acid antisense oligonucleotide technology platform
for the development of therapies to address severe and currently
untreatable diseases caused by genetic mutations. OHR
Pharmaceutical, Inc. is headquartered in New York, New York.
OXTON SENIOR: Sept. 30 Settlement Final Approval Hearing Set
------------------------------------------------------------
A Settlement in the amount of $10,000,000 has been proposed to
compensate investors who purchased certain Bonds issued by:
Douglas-Coffee County Industrial Authority; Cave Spring Housing
Development Corporation; Savannah Economic Development Authority;
Gainesville and Hall County Development Authority; The Medical
Clinic Board of the City of Montgomery-1976 East; the Development
Authority of Columbus, Georgia; and The Medical Clinic Board of the
City of Opelika, Alabama.
The Settlement resolves Claims made by the Receiver for the
entities which were the ultimate beneficiaries of these issuances
and for the Bondholders of such entities over whether Carr, Riggs &
Ingram, LLC ("CRI"), an accounting firm which performed various
professional services for those entities, caused injuries to them
and to the Bondholders. The Settlement avoids costs and risks from
commencing and continuing a lawsuit, pays money to qualifying
investors, and releases and bars claims against CRI and related
parties, including its members and employees.
Court-appointed lawyers for the Receiver will ask the Court for up
to $2,243,065, to be paid out of the $10,000,000 Settlement, as
fees and expenses for investigating the facts, asserting the
Claims, negotiating the Settlement, and providing notice of the
Settlement. The two sides disagree on whether the Receiver could
have prevailed at trial and, if he prevailed, on how much money, if
any, the Receiver could have recovered.
The Court in charge of this case still has to decide whether to
approve the Settlement. Payments will be made if the Court
approves the Settlement and after any appeals are resolved.
All current and previous Bondholders are entitled to participate in
the Settlement. Current Bondholders do not need to do anything to
participate in the Settlement. Previous Bondholders must timely
and properly submit a valid Claim Form to participate in the
Settlement. The Claim Form is due September 27, 2019. The Claim
Form can be found at www.oxtonseniorlivingreceivership.com
The Settlement provides a recovery to current Bondholders. The
Settlement also provides a recovery to previous Bondholders who
sustained loss on the Bonds and who timely and properly submit a
Claim Form. The only previous Bondholders who or which may receive
a distribution under the Distribution Plan are those who or which
both: (a) sold at a loss on or before 4:00 p.m. (Eastern), ninety
(90) days from the date of the entry of the Scheduling Order, and
(b) submit a Claim Form to the Receiver at the address set forth on
the Claim Form, so that it is received by the Receiver on or before
4:00 p.m. (Eastern), ninety (90) days from the date of entry of the
Scheduling Order. The Claim Form is due by 4:00 p.m. (Eastern) on
September 27, 2019. The Claim Form can be found at
www.oxtonseniorlivingreceivership.com and is also attached to this
notice. In addition, the Settlement provides for the entry of a Bar
Order that will prevent the Receiver, the Indenture Trustees, all
previous, present and future Bondholders, the Claimants, the
Issuers, all Interested Parties, and all non-governmental Persons
from prosecuting or pursuing any claims against CRI and related
parties, including its members and employees relating to the Bonds.
You can tell the Court that you don't agree with the Settlement or
some part of it. You can object to the Settlement if you don't
like any part of it. You can give reasons why you think the Court
should not approve it. To object, you must mail your written
objection to the Clerk of the United States District Court for the
District of New Jersey, United States Courthouse, Martin Luther
King Building, 50 Walnut Street, P.O. Box 999, Newark, New Jersey
07101, so that it is received no later than September 20, 2019.
The Court will hold a Final Approval Hearing at 2:00 p.m.
(prevailing Eastern time) on September 30, 2019, at the United
States District Court for the District of New Jersey, Martin Luther
King Building & U.S. Courthouse 50 Walnut Street Room 4015, Newark,
NJ 07101, in Courtroom 2B. At the Final Approval Hearing the Court
will consider whether the Settlement is fair, reasonable, and
adequate. The Court may also decide how much to pay to the
Receiver's counsel. If there are objections, the Court will
consider them. At or after the Final Approval Hearing, the Court
will decide whether to approve the Settlement.
If you are a current Bondholder and do nothing, you'll get money
from this Settlement. If you are a previous Bondholder and do
nothing, you'll get no money from this Settlement. In either
event, if the Court approves the Settlement, your Claims against
CRI covered by the Settlement will be barred.
This notice summarizes the proposed Settlement. More details are
in a Settlement Agreement. You can get a copy of the Settlement
Agreement and other pleadings related to the Settlement by visiting
http://oxtonseniorlivingreceivership.com/home/third-party-settlement/
PER DIEM: Bid for Judgment on Pleadings in Junkersfeld Suit Granted
-------------------------------------------------------------------
In the case, TERESA JUNKERSFELD, Plaintiff, v. PER DIEM STAFFING
SYSTEMS, INC., Defendant, Case No. 4:18-cv-07795-KAW (N.D. Cal.),
Magistrate Judge Kandis A. Westmore of the U.S. District Court for
the Northern District of California granted the Defendant's motion
for judgment on the pleadings with leave to amend.
The Defendant is a healthcare staffing company that places
healthcare professionals ("Travelers") on temporary assignments at
healthcare facilities throughout California.
On Dec. 28, 2018, Plaintiff Junkersfeld filed a putative California
wage and hour class action alleging that the Defendant improperly
excludes per diem expense reimbursements from the calculation of
the regular rate of pay for purposes of overtime and missed meal
penalties. Specifically, she claims violations of California Labor
Code Sections 510, 1194 (failure to pay overtime wages), California
Labor Code Section 226.7 (missed meal breaks), California Business
and Professions Code Section 17200 (unfair business practices), and
California Labor Code Sections 201, 203 (waiting time penalties).
The Plaintiff alleges that Travelers are provided a weekly housing
allowance and weekly per diem during their assignments. If a
Traveler does not complete the required shifts, his or her per diem
allowances are prorated effectively reducing the value of the
housing and per diem allowances in proportion to the number of
hours actually worked. As a result, the Plaintiff alleges that the
value of the per diems are improperly excluded from the regular
rate of pay for the purposes of calculating overtime and missed
meal period premiums.
On March 6, 2019, the Defendant filed a motion for judgment on the
pleadings. Whether per diem allowances are excluded from the
regular rate of pay under 29 U.S.C. Section 207(e)(2) is a
threshold issue in the case, because, if it is excluded, the
Plaintiff's four causes of action fail to state a claim for which
relief may be granted.
In making the motion, the Defendant contends that they are properly
excluded. The Defendant contends that the fact that it prorated
per diems and housing payments when Travelers did no work on its
behalf does not transform those per diems into wages. In
opposition, the Plaintiff argues that, since the housing and per
diem payments are prorated in proportion to the number of hours
worked, they are ineligible for exclusion under Section 207(e)(2)
because they have `a direct relationship to the time that an
employee worked.
Judge Westmore finds that there does not appear to be any binding
legal authority that is directly applicable to the instant case.
Section 207(e)(2) explicitly exempts reasonable traveling expenses
and those expenses incurred on behalf of the employer. She agrees
with the Plaintiff that the district court in Clarke v. AMN Servs.,
LLC overlooked that employees remain away from home on the
employer's business for the entirety of their travel assignments.
Travelers remain away from home for the entirety of their
assignment, and incur costs for food and housing, even if they do
not work all scheduled shifts.
In its reply, the Defendant points out that there is no allegation
in the complaint that the Plaintiff incurs expenses on behalf of
Per Diem Staffing when she does not work. This is well taken, the
Judge finds. In the absence of such an allegation, the motion for
judgment on the pleadings must be granted. Notwithstanding, the
Judge will grant the Plaintiff leave to amend to allege specific
facts regarding how expenses were incurred when she did not work,
and when her housing allowance and per diem were prorated.
In light of the foregoing, Judge Westmore granted the Defendant's
motion for judgment on the pleadings with leave to amend. The
Plaintiff will file her first amended complaint within 14 days of
the Order.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/kDhpZc from Leagle.com.
Teresa Junkersfeld, Plaintiff, represented by Matthew Bryan Hayes
-- mhayes@helpcounsel.com -- Hayes Pawlenko LLP & Kye Douglas
Pawlenko -- kpawlenko@helpcounsel.com -- Hayes Pawlenko LLP.
Per Diem Staffing Systems, Inc., Defendant, represented by Kenneth
Dawson Sulzer -- ksulzer@constangy.com -- Constangy, Brooks, Smith
& Prophete, LLP, Matthew Scholl -- mscholl@constangy.com --
Constangy, Brooks, Smith & Prophete, LLP, Sarah Kroll-Rosenbaum --
skrollrosenbaum@constangy.com -- Constangy Brooks Smith and
Prophete LLP & Sayaka Karitani -- skaritani@constangy.com --
Constangy, Brooks, Smith & Prophete, LLP.
PPG: Settles Accounting Scandal Class Action for $25MM
------------------------------------------------------
Joyce Gannon, writing for Pittsburgh Post-Gazette, reports that PPG
has agreed to pay $25 million to settle a federal class-action case
that stemmed from a 2018 accounting scandal at the paints and
coatings maker.
The proposed settlement has yet to be approved by a federal judge.
In a suit filed last year in the U.S. District Court for the
Central District of California, shareholders said Downtown-based
PPG misled them about its financial results and internal controls
and its shares fell by 5% after the mistakes were disclosed.
The Securities and Exchange Commission and the U.S. Attorney in
Pittsburgh are investigating the case, which resulted in PPG firing
its controller and restating earnings for the first quarter of 2018
and all of 2017 and 2016.
The company declined to comment on the settlement.
In court documents, PPG admits no wrongdoing.
In a filing with the SEC last year, PPG said its former controller,
Mark C. Kelly, told employees to bypass internal controls and
inflate profits.
In restated results for the first quarter of 2018, it said net
income was $19 million less than originally reported.
Mr. Kelly, who was named in the shareholders' lawsuit along with
Michael McGarry, PPG's chairman and chief executive and Vincent
Morales, chief financial officer, was fired in May 2018. Two
employees who reported to him were reassigned.
The class-action suit alleges PPG's stock price was artificially
inflated from Jan. 19, 2017, to May 10, 2018, the day Mr. Kelly was
dismissed.
When the class action suit was filed, PPG said it was "without
merit."
According to court documents, attorneys for both sides held a
full-day mediation session in New York with former U.S. District
Judge Layn Phillips.
The parties did not come to an agreement that day, but the judge
later recommended they consider the $25 million settlement that was
accepted by early May.
Attorneys for the shareholders are expected to apply for fees not
to exceed 27% of the settlement fund and for reimbursement of
expenses up to $735,000, according to court documents. [GN]
QUANTUM CORP: Settlement Agreement Entered in Lazan Class Suit
--------------------------------------------------------------
Quantum Corporation said in its Form 8-K filing with the U.S.
Securities and Exchange Commission filed on July 3, 2019, 2019,
that a settlement agreement has been entered in the case entitled,
Lazan, et. al v. Quantum Corporation, et. al.
On June 29, 2019, the Company entered into a settlement agreement
(the "Stipulation of Settlement") with lead plaintiff in the
shareholder class action captioned Lazan, et. al v. Quantum
Corporation, et. al, Case No. 3:18-cv-00923-RS filed in the U.S.
District Court for the Northern District of California (the "Class
Action").
Pursuant to the Stipulation of Settlement, which remains subject to
court approval, the Company will pay $8.15 million to the plaintiff
class (the "Settlement Amount").
The full amount of the settlement will be covered by the Company's
directors and officers liability insurance. The shareholders agreed
to release all claims that were or could have been asserted in the
Class Action.
The Stipulation of Settlement contains no admission of wrongdoing
by the individual defendants. Following entry of a preliminary
approval order by the court, the lead plaintiff will provide
shareholders with notice of the settlement and a final settlement
hearing in accordance with the Stipulation of Settlement.
Quantum said, "At the time the Court enters its preliminary
approval order, a date for a final approval hearing will be set.
All expenses related to notifying the class, administering the
settlement fund and attorneys' fees will be paid from the
Settlement Amount."
Quantum Corporation provides scale-out storage, archive, and data
protection solutions for small businesses and multi-national
enterprises in the Americas, Europe, and the Asia Pacific. Quantum
Corporation was founded in 1980 and is headquartered in San Jose,
California.
QUEST DIAGNOSTICS: Benadom Sues over Data Breach
------------------------------------------------
A class action complaint has been filed against Quest Diagnostics
Inc., and Optum 360, LLC for negligence and for alleged violations
of the New Jersey Consumer Fraud Act and the Florida Deceptive and
Unfair Trade Practices Act. The case is captioned NOEL BENADOM,
individually and on behalf of all those similarly situated,
Plaintiff, v. QUEST DIAGNOSTICS INC.; and OPTUM360 LLC, Defendant,
Case No. 2:19-cv-14037-MCA-SCM (D.N.J., June 20, 2019). Plaintiff
alleges that the Defendants failed to protect the confidential
information of millions of consumers -- including Personally
Identifiable Information (PII), first and last names, dates of
birth, addresses, telephone numbers, social security numbers, dates
service, Protected Health Information (PHI), provider names,
payment balance information, credit cards or bank account
information, and other confidential information.
Quest promised and agreed -- throughout its Notice of Privacy
Practices and other written assurances -- to safeguard and protect
Sensitive Information in accordance with Health Insurance
Portability and Accountability Act regulations, federal, state and
local laws, and industry standards. In addition, Quest promised and
agreed that their contracted service providers and other business
associates, such as billing services providers, are required to
maintain the privacy and security of PHI. However, Quest breached
its promises and agreements by failing to ensure that its vendors
used adequate security measures and/or provide their customers'
sensitive information, including PII, to business associates that
utilized inadequate security measures and also by providing
customers' sensitive information to business associates that
utilized inadequate security measures.
Quest Diagnostics Inc. is a corporation existing under the laws of
the state of Delaware with its headquarters and principal place of
business located in Secaucus, New Jersey. The company offers a
variety of laboratory testing services including blood tests, body
fluid testing, tissue pathology and cytology, health screening and
monitoring tests, drug screening and testing as well as genetic
testing. [BN]
The Plaintiff is represented by:
Bruce D. Greenberg, Esq.
LITE DEPALMA GREENBERG, LLC
570 Broad Street, Suite 1201
Newark, NJ 07102
Telephone: (973) 623-3000
Facsimile: (973) 623-0858
E-mail: bgreenberg@litedepalma.com
- and -
James Pizzirusso, Esq.
HAUSFELD LLP
1700 K. Street NW, Suite 650
Washington, DC 20006
Telephone: (202) 540-7200
Facsimile: (202) 540-7201
E-mail: jpizzirusso@hausfeld.com
- and –
Kim D. Stephens, Esq.
Jason T. Dennett, Esq.
Cecily C. Shiel, Esq.
TOUSLEY BRAIN STEPHENS, PLLC
1700 Seventh Avenue, Suite 2200
Seattle, WA 98101
Telephone: (206) 682-5600
Facsimile: (206) 682-2992
E-mail: kstephens@tousley.com
jdennett@tousley.com
cshiel@tousley.com
- and –
Daniel L. Warshaw, Esq.
PEARSON, SIMON & WARSHAW, LLP
15165 Ventura Boulevard, Suite 400
Sherman Oaks, CA 91403
Telephone: (818) 788 8300
Facsimile: (818) 788 8104
E-mail: dwarshaw@pswlaw.com
- and -
Melissa S. Weiner, Esq.
Joseph C. Bourne, Esq.
PEARSON, SIMON & WARSHAW, LLP
800 LaSalle Avenue, Suite 2150
Minneapolis, MN 55402
Telephone: (612) 389-0600
Facsimile: (612) 389-0610
E-mail: mweiner@pswlaw.com
jbourne@pswlaw.com
QUEST DIAGNOSTICS: Cinelli Sues over Data Security Failure
----------------------------------------------------------
A class action complaint has been filed against Quest Diagnostics
Incorporated and Optum360 Services, Inc. for negligence in
connection with the data breach that occurred between Aug. 1, 2018
and March 30, 2019 in its billing service provider's system. The
case is captioned ERIC CINELLI, JOANNA EGGINS, and SATORIA MONLYN,
individually and on behalf of a class of all others similarly
situated, Plaintiffs, v. QUEST DIAGNOSTICS INCORPORATED and
OPTUM360 SERVICES, INC., Defendants, Case No. 7:19-cv-05803-UA
(S.D.N.Y., June 20, 2019).
Between Aug. 1, 2018 and March 30, 2019, computer hackers gained
unauthorized access to approximately 11.9 million Quest patients'
personally identifiable information. Quest announced on June 3,
2019 that American Medical Collection Agency, Inc. (AMCA), a
billing collections service provider for Quest, had informed Quest
that an unauthorized user had access to AMCA's system containing
personal information AMCA received from various entities, including
Quest. Accordingly, Plaintiffs bring this class action on behalf of
all persons whose personal information was compromised as a direct
result of Defendants' failure to safeguard millions of patients'
highly sensitive protected health information, as defined by the
Health Insurance Portability and Accountability Act of 1996.
Quest Diagnostics Incorporated is a corporation organized under the
laws of Delaware, and is headquartered at 500 Plaza Drive,
Secaucus, New Jersey. Quest is the world's leading provider of
diagnostic information services. The company has thousands of
patient centers located around the United States. Optum360
Services, Inc. is a corporation organized under the laws of
Delaware, and is headquartered at 13625 Technology Drive, Eden
Prairie, Minnesota. [BN]
The Plaintiffs are represented by:
Joseph P. Guglielmo, Esq.
SCOTT+SCOTT ATTORNEYS AT LAW LLP
The Helmsley Building
230 Park Avenue, 17th Floor
New York, NY 10169
Telephone: (212) 223-6444
Facsimile: (212) 223-6334
E-mail: jguglielmo@scott-scott.com
- and –
Erin Green Comite, Esq.
SCOTT+SCOTT ATTORNEYS AT LAW LLP
156 South Main Street
P.O. Box 192
Colchester, CT 06415
Telephone: (860) 537-5537
Facsimile: (860) 537-4432
E-mail: ecomite@scott-scott.com
- and –
Gary F. Lynch, Esq.
CARLSON LYNCH, LLP
1133 Penn Ave., 5th Floor
Pittsburgh, PA 15222
Telephone: (412) 322-9243
E-mail: glynch@carlsonlynch.com
- and –
Katrina Carroll, Esq.
CARLSON LYNCH, LLP
111 W. Washington Street Suite 1240
Chicago, IL 60602
Telephone: (312) 750-1265
E-mail: kcarroll@carlsonlynch.com
- and –
Jonathan M. Jagher, Esq.
Kimberly A. Justice, Esq.
FREED KANNER LONDON & MILLEN, LLC
923 Fayette Street
Conshohocken, PA 19428
Telephone: (610) 234-6487
E-mail: jjagher@fklmlaw.com
kjustice@fklmlaw.com
QUEST DIAGNOSTICS: Faces Ryan et al. Suit over Data Breach
----------------------------------------------------------
MELISSA RYAN; and DANIEL RYAN, individually and on behalf of all
others similarly situated, Plaintiffs v. QUEST DIAGNOSTICS, INC.;
OPTUM360 SERVICES, INC.; AMERICAN MEDICAL COLLECTION AGENCY,
Defendants, Case No. 3:19-cv-01098-JM-BLM (S.D. Cal., June 12,
2019) is an action against the Defendants for failure to properly
safeguard and protect the Plaintiffs' HIPAA-protected medical
information ("PHI") and personal identifying information ("PII"),
and exposing their personal information to unauthorized parties.
On June 3, 2019, Quest publicly announced that on May 14, 2019,
American Medical alerted Quest Diagnostics and Optum360 of a
massive data breach compromising the PII and PHI of nearly 12
million Quest Diagnostics and Optum360 customers.
Quest further disclosed that between August 1, 2018 and March 30,
2019, an unauthorized user had access to American Medical's system
that contained information that American Medical had received from
Quest, and information that American Medical collected itself
including credit card numbers, bank account information, medical
information, social security numbers and other personal
information.
Despite the fact that Quest knew of the Data Breach as of May 14,
2019, and despite the fact that American Medical knew of the Data
Breach even earlier, neither Quest or American Medical took any
steps to inform the public or its customers whose PII and PHI was
breached until June 3, 2019.
By failing to implement adequate safeguards and quality-control
mechanisms, the Defendants enabled data thieves to access the PII
and PHI of persons who used their services, at the directions of
their medical providers. Had the Defendants took reasonable steps
to protect customers' PII and PHI, this Data Breach would not have
occurred or it would not have lasted as long as it did, and the
harms to the Plaintiffs and class members would have been
mitigated.
Quest Diagnostics Incorporated provides diagnostic testing,
information, and services in the United States and internationally.
The company also offers risk assessment services for the life
insurance industry; and health information technology solutions for
healthcare organizations and clinicians. Quest Diagnostics
Incorporated was founded in 1967 and is headquartered in Secaucus,
New Jersey. [BN]
The Plaintiffs are represented by:
Lionel Z. Glancy, Esq.
Marc L. Godino, Esq.
Danielle L. Manning, Esq.
GLANCY PRONGAY & MURRAY LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Telephone: (310) 201-9150
Facsimile: (310) 201-9160
E-mail: info@glancylaw.com
QUEST DIAGNOSTICS: Webb Sues over Data Security Failure
-------------------------------------------------------
A class action complaint has been filed against Quest Diagnostics
Incorporated and Optum360, LLC for their failure to safeguard
millions of patients' highly sensitive protected health
information, as defined by the Health Insurance Portability and
Accountability Act of 1996, medical information, and other
personally identifiable information, including, but not limited to,
names, Social Security numbers, credit card numbers, and bank
account information, collectively referred to as personally
identifiable information (PII). The case is captioned MATTHEW WEBB,
individually and on behalf of a class of all others similarly
situated, Plaintiff, v. QUEST DIAGNOSTICS INCORPORATED and
OPTUM360, LLC, Defendants, Case No. 1:19-cv-04157 (N.D. Ill., June
20, 2019).
Between Aug. 1, 2018 and March 30, 2019, computer hackers gained
unauthorized access to approximately 11.9 million Quest patients'
PII. Quest announced on June 3, 2019 that American Medical
Collection Agency (AMCA), a billing collections service provider
for Quest, had informed Quest that an unauthorized user had access
to AMCA's system containing personal information AMCA received from
various entities, including Quest. In his complaint, Plaintiff
alleges that the Defendants failed to take reasonable steps to
adequately protect the ultra-sensitive PII of its millions of
patients. Accordingly, Plaintiff seeks to recover damages and other
relief resulting from the data breach, including but not limited
to, compensatory damages, reimbursement of costs that he and others
similarly situated have been forced to bear, and declaratory and
injunctive relief to mitigate future harms that are certain to
occur in light of the scope of the data breach.
Quest Diagnostics Incorporated is a corporation organized under the
laws of Delaware, and is headquartered at 500 Plaza Drive,
Secaucus, New Jersey 07094. Optum360, LLC is a limited liability
company organized under the laws of Delaware, and is headquartered
at 13625 Technology Drive, Eden Prairie, Minnesota 55344. Quest is
the world's leading provider of diagnostic information services,
has thousands of patient centers located around the United States,
and purportedly annually serves one in three adult Americans and
half the physicians and hospitals in the United States. As part of
its operations, Quest relies on Optum360 and its sub-vendor, AMCA,
for billing collections services. [BN]
The Plaintiff is represented by:
Katrina Carroll, Esq.
CARLSON LYNCH LLP
111 W. Washington Street Suite 1240
Chicago, IL 60602
Telephone: (312) 750-1265
E-mail: kcarroll@carlsonlynch.com
- and -
Gary F. Lynch, Esq.
CARLSON LYNCH LLP
1133 Penn Ave., 5th Floor
Pittsburgh, PA 15222
Telephone: (412) 322-9243
E-mail: glynch@carlsonlynch.com
- and –
Joseph P. Guglielmo, Esq.
SCOTT+SCOTT ATTORNEYS AT LAW LLP
The Helmsley Building
230 Park Avenue, 17th Floor
New York, NY 10169
Telephone: (212) 223-6444
E-mail: jguglielmo@scott-scott.com
- and –
Jonathan M. Jagher, Esq.
Kimberly A. Justice, Esq.
FREED KANNER LONDON & MILLEN, LLC
923 Fayette Street
Conshohocken, PA 19428
Telephone: (610) 234-6487
E-mail: jjagher@fklmlaw.com
kjustice@fklmlaw.com
RASH CURTIS: Faces Potential $267MM TCPA Class Action Judgment
--------------------------------------------------------------
Eric J. Troutman, Esq., of Squire Patton Boggs (US) LLP, in an
article for The National Law Review, reports that a few weeks back
Jay Edelson's firm helped break the bank in the trial of a TCPA
class action.
Not to be (completely) outdone the folks at Bursor & Fisher have
just tried their own certified TCPA class action suit in the
Northern District of California -- this time resulting a jury
verdict sustain a potential judgment totaling $267MM. See Perez v.
Rash Curtis & Associates, Case No. 16-cv-03396 (N.D. Cal.)
The case involved purported calls made using an ATDS and
pre-recorded calls to numbers obtained via skip tracing, in
addition to a wrong number component. Following a multi-day jury
trial the jury entered its verdict -- found here -- determining
that over 534,000 calls were made using Defendant's dialers and
using a pre-recorded voice without consent.
Following the verdict -- which was entered May 13, 2019
--Plaintiff's counsel has filed a Proposed Judgment seeking a final
award of $267,349,000 in favor of the class.
On the heels of the big Dish ruling, TCPA defendants really did not
need any more bad news but oh well. It all goes to show why
defeating TCPA class certification is absolutely critical for
companies who want to stay in business.
We'll keep an eye on developments on this one. [GN]
REATA RESTAURANTS: Underpays Servers, Champagne Suit Alleges
------------------------------------------------------------
CODY CHAMPAGNE, individually and on behalf of all others similarly
situated, Plaintiff v. REATA RESTAURANTS INC.; and REATA
RESTAURANTS MANAGEMENT CO. LLC., Defendants, Case No. 4:19-cv-00028
(W.D. Tex., June 19, 2019) seeks to recover from the Defendant
unpaid wages and overtime compensation, interest, liquidated
damages, attorneys' fees, and costs under the Fair Labor Standards
Act.
The Plaintiff Champagne was employed by the Defendants as server.
Reata Restaurants Inc. is a Texas corporation operating as a
restaurant business. [BN]
The Plaintiff is represented by:
Drew N. Herrmann, Esq.
HERRMANN LAW, PLLC
801 Cherry St., Suite 2365
Fort Worth, TX 76102
Telephone: (817) 479-9229
Facsimile: (817) 887-1878
E-mail: drew@herrmannlaw.com
RENO, NV: Trial Begins in Class Action Over Swan Lake Flooding
--------------------------------------------------------------
Brandon Fuhs, writing for KTVN, reports that the City of Reno's
attorney says he will consider whether or not to appeal a jury's
decision to hold the City liable for the flooding at Swan Lake in
2017.
On June 5, the jury ruled in favor of Lemmon Valley residents
saying the City's decision to develop properties nearby caused more
runoff to reach Swan Lake.
The City was also blamed for pumping water from a nearby wastewater
facility, and from Silver Lake into Swan Lake.
The jury did rule the City did not create a nuisance developing
property in Lemmon Valley.
A second trial date is set for December.
The eight-member jury ruled on June 5 that there was a taking of
property by the City for public use -- and that the City converted
or destroyed property.
Reno City Attorney Karl Hall says in a statement to 2 News:
"We are appreciative of the jury's service and we will be
communicating with our clients to determine what our next move will
be in terms of pursuing an appeal or not."
Jury deliberations are now underway in the Swan Lake case. A class
action lawsuit alleges the City of Reno did multiple things to
worsen flooding, in 2017.
Fifty-six Lemmon Valley residents are signed on to the lawsuit.
Lemmon Valley resident Karen Johnson and her husband Jeffery and
son Jeffery Jr. are class action representatives.
She moved into an apartment for a year after Washoe County gave her
house a yellow tag, or a notice a possible damage from flooding.
During her trial she described the scene at her home in 2017,
saying they had to put down wooden planks to access the home.
During cross-examination, the defense pointed out that the water
never actually touched the foundation of her home, even though
photos showed cracks were visible in the foundation.
Another witness was hydrologist David Westhoff. He reviewed the
storm water study conducted in 2007 at the request of the Washoe
County Regional Water Planning Agency and the City of Reno before
it was published.
He explained that the study showed that development in the area
would increase the amount of runoff that made its way to Swan
Lake.
During cross-examination, the defense made it clear to the jury
that Westhoff did not collect any of the data, and had little
influence on the analysis in the study.
The defense also cited the 2007 study that states the water at the
Reno-Stead Water Reclamation Facility was factored into the total
volume of Swan Lake when they factored the risk of flooding during
an extreme storm.
A third witness was Jeffery Johnson, who also testified on the
condition of his home during the spring months of 2017.
UPDATE: Following jury selection on June 10, trial for the class
action lawsuit began against the City of Reno seeking damages for
flooding of Swan Lake in 2017.
Prosecutors argued during opening statements, that the City of Reno
is responsible for raising the level of Swan Lake 1.7 feet.
They argue the city ignored a study conducted in 2007 that warned
of flooding at existing homes around Swan Lake if development
popped up in the area.
Prosecutors argue the city pumped water from Silver Lake in nearby
Cold Springs to Swan Lake in Lemmon Valley. They also argue the
city dumped water from the Reno-Stead Reclamation Facility (a water
treatment plant) into Swan Lake.
A total of 56 Lemmon Valley residents are signed on to the CLA.
According to a pre-trial motion, the City of Reno argues the 2007
study did not give any specific examples of developments and their
impacts on flooding.
Regarding Silver Lake water, they argue if they did not pump water
from Silver Lake to Swan Lake, Silver Lake would've been
contaminated with sewage. The pre-trial motion also states the city
has an agreement with the State of Nevada to dump water from that
Reno-Stead Reclamation Facility into Swan Lake.
The court heard multiple witnesses, including class representative
Mike Walls and Truckee Meadows Fire Protection District Battalion
Chief Sam Hicks, who led the incident command team to help mitigate
flooding in March 2017.
There are approximately 40 witnesses expected to testify, and the
trial is expected to take two and a half weeks.
Original Story: Several residents in Lemmon Valley near Swan Lake
are suing the City of Reno for damages to their property from
flooding in 2017.
On June 10, lawyers on both sides chose 10 jurors to hear the case,
and opening statements were scheduled to start on June 11.
The lawsuit alleges the City of Reno ignored a study conducted in
2007, that details the potential of flooding at existing homes is
more development was built in the area. It also alleges the City of
Reno pumped water from Silver Lake to Swan Lake, and pumped
effluent from their Sewage Plant even after flooding occurred in
early 2017.
The trial was expected to last about two and a half weeks. The
prosecution did not comment, noting the judge was clear he did not
want lawyers holding press conferences after every day.
City Attorney Karl Hall, leading the defense, did not comment
further than saying they successfully chose a jury on June 10.
[GN]
RYANAIR: Seeks Dismissal of Pension Fund Class Action in U.S.
-------------------------------------------------------------
RTE reports that lawyers for Ryanair and its chief executive,
Michael O'Leary, were set to ask a New York court to dismiss a
lawsuit initiated against them last year following its pilot
rostering debacle in 2017 and subsequent recognition of trade
unions.
An Alabama pension fund for firemen and policemen in the US state's
largest city of Birmingham slapped Ryanair and Mr O'Leary with the
lawsuit last November, writes the Irish Independent. After Ryanair
announced in 2017 it would recognise trade unions, its shares fell.
It subsequently engaged in a lengthy process with pilots, cabin
crew and trade unions across Europe to seal recognition agreements.
It also offered pilots pay increases. In an amended complaint from
the pension fund filed in April, it claimed Ryanair and Mr O'Leary
made false and misleading statements to shareholders regarding its
employment issues. "The disclosure of the truth about Ryanair's
need to recognise unions and resulting increased costs and
decreased profits had a devastating impact on the company's
shareholders, wiping out millions in shareholder value and causing
substantial damage to plaintiff," lawyers for the pension fund have
claimed in court documents. The complaint added: "Defendant O'Leary
made, or caused to be made, false and misleading statements that
maintained artificial inflation in the price of Ryanair ADSs". The
ADSs are American Depository Shares traded in the United States.
The pension fund has launched the complaint against Ryanair as a
class action suit. It's not unusual for shareholders in the United
States to initiate such lawsuits after share price declines. [GN]
SABA CAPITAL: Hedge Fund Files Class Actions Over Proxy Contest
---------------------------------------------------------------
Kenneth Burdon, Esq. -- kenneth.burdon@skadden.com -- and Thomas
DeCapo, Esq. -- thomas.decapo@skadden.com -- of Skadden, Arps,
Slate, Meagher & Flom LLP, in an article for JDSupra, report that
on June 4, 2019, a hedge fund managed by Saba Capital Management
L.P. filed lawsuits in Delaware Chancery Court and in Maryland
Circuit Court against three BlackRock-managed registered closed-end
funds, the trustees/directors of the funds and their investment
adviser. These lawsuits arise from a proxy contest that Saba
initiated against the funds. Both lawsuits seek class action
certification.
These actions by Saba, in particular the use of class action
litigation, represent a significant escalation in closed-end fund
activist tactics. The activists' objective is to coerce targeted
closed-end funds into liquidating, converting into open-end funds
or shrinking the fund through at-or-near-NAV "liquidity events," so
that the hedge fund can make a short-term profit based on the
fund's market price discount from NAV at the expense of the fund's
long-term retail investors. In direct conflict with the policy
objectives of the current presidential administration,1 these
tactics have served to reduce important investment options and
product structures available to retail investors, a trend which
these aggressive lawsuits seek to accelerate.
Closed-end funds' ability to fend off these abusive tactics has
been hamstrung by historical SEC staff positions2 regarding the use
of defensive measures that may be available in the world of
ordinary operating companies, such as shareholder rights plans and
state law control share statutes.
In light of this escalation, now may be an opportune time for
closed-end fund boards to reevaluate these and other corporate
defense strategies in order to preserve retail clients' ongoing
access to the investment strategies that closed-end funds are
designed to offer, as it is beneficial to implement such strategies
on a "clear day." We also believe that the current SEC staff is
more receptive to protecting closed-end funds than has been the
case for over a decade.
1 See Exec. Order No. 13772, 82 Fed. Reg. 9965, "Presidential
Executive Order on Core Principles for Regulating the United States
Financial System" (Feb. 3, 2017), available at
https://www.whitehouse.gov/presidential-actions/presidential-executive-order-core-principles-regulating-united-states-financial-system/;
Presidential Memorandum on Fiduciary Rule (Feb. 3, 2017), 82 Fed.
Reg. 9675, available at
https://www.whitehouse.gov/presidential-actions/presidential-memorandum-fiduciary-duty-rule/
2 See Boulder Total Return Fund, Inc., SEC Staff No-Action Letter
(Nov. 15, 2010); Andrew J. Donohue, Director, SEC Division of
Investment Management, Keynote Address at the Independent Directors
Council Investment Company Directors Conference (Nov. 12, 2009),
available at https://www.sec.gov/news/speech/2009/spch111209ajd.htm
[GN]
SALES PROS: Fails to Pay Proper Wages, Trevethan Alleges
--------------------------------------------------------
DONNA TREVETHAN, individually and on behalf of all others similarly
situated, Plaintiff v. SALES PROS, LLC; SAFEWAY, INC.; ALBERTSON'S
COMPANIES, INC.; and DOES 1 THROUGH 50, INCLUSIVE, Defendants, Case
No. CGC-19-576645 (Cal. Super., San Francisco Cty., June 12, 2019)
The Plaintiff Trevethan was employed by the Defendants as
non-exempt, hourly paid employee.
Safeway Inc. operates as a supermarket. The Company offers grocery,
pharmacy, and other related food products. Safeway operates in the
United States. [BN]
The Plaintiff is represented by:
Shaun Setareh, Esq.
Thomas Segal, Esq.
Farrah Grant, Esq.
SETAREH LAW GROUP
315 South Beverly Drive, Suite 315
Beverly Hills, CA 90212
Telephone: (310) 888-7771
Facsimile: (310) 888-0109
E-mail: shaun@setarehlaw.com
Thomas@setarehlaw.com
farrah@setarehlaw.com
SANTANDER CONSUMER: Faces Suit over Debt Collection Practices
-------------------------------------------------------------
LISA PIAZZA; JOSEPH BORDEN; and RICHARD YUNKER, individually and on
behalf of all others similarly situated, Plaintiff v. SANTANDER
CONSUMER USA INC.; and JMAC DISTRIBUTION LLC, Defendants, Case No.
19-1695 (Mass. Super., Middlesex Cty., June 13, 2019) seeks to stop
the Defendant's unfair and unconscionable means to collect a debt.
Santander Consumer USA Inc. provides automotive financing services.
The Company offers new car and used car loans, as well as auto and
cash-back refinance services. Santander Consumer USA serves clients
in the United States. [BN]
The Plaintiff is represented by:
Raven Moeslinger, Esq.
Nicholas F. Ortiz, Esq.
Stephanie C. Ozahowski, Esq.
LAW OFFICE OF NICHOLAS F. ORTIZ, P.C.
99 High Street, Suite 304
Boston, MA 02110
Telephone: (617) 338-9400
E-mail: sco@mass-legal.com
rm@mass-legal.com
SAVE-A-LOT KNOXVILLE: Court Dismisses McCloud Suit w/o Prejudice
----------------------------------------------------------------
In the case, LARRY McCLOUD, Plaintiff, v. SAVE-A-LOT KNOXVILLE,
LLC, et al., Defendants, Case No. 3:18-cv-486 (E.D. Tenn.), Judge
Curtis L. Collier of the U.S. District Court for the Eastern
District of Tennessee, Knoxville, granted the motion to dismiss
filed by Defendants Moran Foods, LLC and Save-a-lot, LTD without
prejudice for lack of jurisdiction.
On Nov. 15, 2018, the Plaintiff filed the case as a putative class
action, alleging in a one-count complaint that the Defendants
violated the Fair and Accurate Credit Transactions Act ("FACTA").
He states that the Defendants transgressed a portion of FACTA which
prohibits printing more than the last five digits of a consumer's
credit or debit card number on any transactional receipt. The
Plaintiff alleges that the Defendants printed at least the first
six and the last four digits of the credit or debit card number on
receipts given to him and the putative class members. He has
attached a redacted receipt to his response brief showing that he
made a purchase at a Save-A-Lot store in Knoxville, Tennessee for a
total of $23.53 in goods on April 6, 2018. He seeks statutory
damages, punitive damages, costs, and attorney's fees, all of which
are made available by FACTA.
On March 12, 2019, the Defendants moved to dismiss Plaintiff's
complaint under Federal Rule of Civil Procedure 12(b)(1) for lack
of subject matter jurisdiction, or alternatively, under Rule
12(b)(6) for failure to state a claim. In support of their motion
to dismiss, the Defendants argue that the Plaintiff has not
suffered an injury in fact, that the Plaintiff does not fall within
the zone of interests of FACTA, and that the Plaintiff has not
alleged a willful violation of FACTA. They also argue that the
Plaintiff should be ordered to provide a more definite statement
under Rule 12(e), should the Court not dismiss the Plaintiff's case
on jurisdictional grounds or for failure to state a claim.
Judge Collier, however, agrees with the Defendants that the Court
does not have jurisdiction: the Plaintiff has not suffered an
injury in fact. He finds that the majority of the Plaintiff's
complaint does not focus on the Plaintiff at all. Rather, his
allegations focus on the intent of Congress in passing FACTA, the
ability of hackers to use credit card information to engage in
cyberattacks, and the complex problem of identity theft. The
Plaintiff does not allege, however, that his own receipt was lost
or stolen, or that he has been a victim of identity theft or credit
card fraud. Indeed, the Plaintiff does not even allege that
someone else has viewed the partially redacted card digits on his
receipt.
It is also notable that the Plaintiff brings no claims sounding in
state law, but only alleges one count of the violation of FACTA.
Because the Plaintiff has not alleged he suffered any actual injury
"in the flesh-and-blood dollars-and-cents sense of the term," nor
has he alleged that it was "certainly impending" that his identity
would be stolen, the Judge assesses whether the Plaintiff's
allegation of a FACTA violation created a "procedural or intangible
injury."
While the Defendants' point is valid, the Plaintiff still argues
that he suffered from actual harm, and that his lawsuit does
protect consumers because it is based on the more important part of
FACTA -- the portion which requires credit or debit card number
truncation. While this is a far more nuanced argument than one
based, for instance, on an allegation that the Plaintiff's identity
was stolen, the Judge finds that it is still an alleged injury
which Spokeo could potentially recognize as constituting an injury
in fact. Taken together, he sees no reason to follow the reasoning
of the Eleventh Circuit and depart from the majority of courts
finding that a plaintiff does not allege a sufficient injury by
pleading that a defendant violated FACTA by printing the first six
and last four digits of his or her credit or debit card number on a
receipt.
The Plaintiff also alleges that he was burdened by having to either
safeguard his receipt through retaining it or through "disposing of
it in a manner that does not display his card number" --
presumably, through tearing it up or shredding it. Either way, the
Plaintiff argues, he is not able to simply crumple the receipt and
throw it away.
The Judge finds that this argument still hinges on whether the
Plaintiff faced any material risk of his identity being stolen.
Because the Judge has observed that the Plaintiff did not allege a
material risk of his identity being stolen, the Judge is not
convinced that the Plaintiff had any real burden to protect or
destroy his receipt. While the Plaintiff may be a very cautious
person who chooses to take the extra step of retaining or
destroying his receipt regardless of his true exposure to risk, he
cannot manufacture his own injury based on speculation about a
threat which does not present any material risk of real harm.
Having addressed both of the Plaintiff's alleged injuries, and
having found that the Plaintiff does not allege an injury in fact,
Judge Collier granted the Defendants' motion to dismiss, and
dismissed the action without prejudice for lack of jurisdiction.
A full-text copy of the Court's May 24, 2019 Memorandum is
available at https://is.gd/NY4ma4 from Leagle.com.
Larry McCloud, on behalf of himself and all others similarly
situated, Plaintiff, represented by Brian K. Herrington, Schlanger
Law Group LLP, Chant Yedalian -- info@chant.mobi -- Chant & Company
A Professional Law Corporation & Patrick M. Barrett, III --
pbarrett@barrettlawofficetn.com -- Barrett Law Office, PLLC.
Save-a-lot Knoxville, LLC, Newcorp, LLC, Moran Foods, LLC &
Save-a-lot, LTD., Defendants, represented by Bonnie Keane DelGobbo
-- bdelgobbo@bakerlaw.com -- Baker Hostetler LLP, pro hac vice,
Joel Christopher Griswold -- jcgriswold@bakerlaw.com -- Baker
Hostetler LLP, pro hac vice & Marc H. Harwell, Leitner Williams
Dooley Napolitan, PLLC.
SHREVEPORT, LA: Ordered to Return Illegally Collected Taxes
-----------------------------------------------------------
Nancy Cook, writing for ArkLaTexhomepages.com, reports that Caddo
District Judge Mike Pitman on June 10 ruled in favor of a class
action lawsuit that will force the City of Shreveport to pay
commercial water and sewer customers an estimated more than $2.5
million in taxes illegally collected over the past three years.
The lawsuit, filed in August 2018 by three local commercial water
and sewer customers, claimed the city continued to collect a sales
tax on commercial water bills for three years after the tax was
suspended.
Originally, the sales tax was levied on quantity of water used,
along with sewer usage and other non-water consumption. But the
state dropped all but the water usage tax in July 2015.
Shreveport, however, continued to levy the sales taxes on all the
previously taxed items, but only sent the money collected for water
usage to the state.
Although the city claims the illegal collections were inadvertent,
the lawsuit alleged the city "knowingly and intentionally
overcharged its commercial and industrial water customers."
Although the problem was pointed out to the city in February 2018,
nothing was done. Then, in a May 14, 2018, letter to then
Shreveport Mayor Ollie Tyler, Shreveport attorney Jerry Harper who
represents the plaintiffs, asked that the city acknowledge the
overcharges and publicly advise customers they would be refunded.
After the city continued to resist, the lawsuit was filed in August
and has been making its way through the courts ever since.
After the June 10 ruling, Harper told NBC6/FOX33 it would take
two-to-three months to calculate exactly how much the city will
have refund businesses who paid the discontinued taxes.
In addition to refunding commercial customers, the City of
Shreveport will be liable for attorney's fees and related costs.
Another class action lawsuit claiming the city improperly over
billed customers is still winding its way through the courts. [GN]
SIRTEX: Settles Shareholder Class Action Over Profit Downgrade
--------------------------------------------------------------
James Thomson, writing for Australian Financial Review, reports
that biotechnology company Sirtex has settled a shareholder class
action over a profit downgrade in 2016 that caused its shares to
plunge.
The settlement came on June 6, almost two weeks into a four-week
Federal Court trial before Justice Bernard Murphy.
While the maximum liability under the claim was put at about $280
million, sources said the case settled for a much smaller amount.
The class action was run by Maurice Blackburn, and funded by
Melbourne class action specialist Mark Elliott and IFM Bentham.
Sirtex was represented by Watson Mangioni.
The parties were expected to formally confirm the settlement in
court on June 7.
Shares in Sirtex plunged 37 per cent in December 2017 when the
company downgraded guidance for dose sales of its targeted
radioactive liver cancer treatment, called SIR-Spheres Y-90.
After delivering growth sales of 16.4 per in the 2016 financial
year, the company said at its annual results presentation in August
2016, and again at its annual general meeting in October 2016, that
it expected "double-digit dose sales growth to continue in FY17".
But in December it told investors that sales would be between 5 per
cent and 11 per cent. Actual sales for the 2017 financial year came
in at 5.5 per cent.
The case was being closely watched for the potential precedent it
could have set around providing guidance. Some observers had
expected that this class action might actually go all the way to a
judgment, something that has not occurred with any class action in
Australia.
But Justice Murphy ordered the parties into mediation on June 5,
and on June 6 a deal was struck.
Sirtex had previously told the court it had insurance of $10
million, a relatively low sum in such cases.
The company was acquired by Chinese group CDH Investments in
September 2018 for $33.60 a share, well above the $25.49 level the
shares traded before the downgrade in December 2016. [GN]
SOUTH AFRICA: Women Sue DHA to Escape Fraudulent Marriages
----------------------------------------------------------
IAfrica reports that after fighting against the Department of Home
Affairs for more than a decade to escape fraudulent marriages, five
women are getting the legal support they need and laying the
groundwork for a class-action lawsuit, which aims to compel the
department to perform its constitutionally obliged duties to
citizens.
The Wits Law Clinic has taken on their cases and revealed how these
victims have been pushed from pillar to post at various stages of
their own efforts to have the fake marriages nullified. Some of the
women have been unable to register the births of their children --
while others don't have ID documents or bank accounts. The clinic
has also appealed to other women in similar situations to come
forward so they can be helped.
A fraudulent marriage happens when the victim's ID number is used
without their knowledge to create a marriage to a stranger that
exists only on paper. Their surnames as recorded on the Home
Affairs registry then change to those of their alleged "spouses".
The department constantly provides training to its staff on all
aspects of marriages and raises awareness on civil registration
matters broadly with them. But the experiences of the five women
paint a very different picture -- one of callous indifference,
ineptitude and a misunderstanding of how to assist the public.
DECADE LONG FIGHT
On 7 May, the Wits Law Clinic's adjunct professor Phillipa Kruger
wrote to the department's director of births, marriages, deaths &
records management, Aaron Ramodumo. That email went unanswered
until EWN started asking questions. In the letter, Kruger explains
how the five women have never met their alleged husbands and have
been engaged in long-term correspondence with the department for
more than a decade. "Depending on which branch of the DHA they
visited, and depending on whom they spoke to, they were given
varying advice.
"Some women were turned away in totality and told the DHA was
unable to assist them and they should visit a police station to
open criminal charges against the perpetrators of the fraud. Other
women were told to apply to the court for divorces. Other women
were told to depose to affidavits swearing that they were victims
of fraudulent marriages and were promised that upon delivering
these affidavits to the department, the department would rectify
the records accordingly.
"All five women have been struggling for in excess of ten years
with their respective cases. They have been referred to one DHA
office after the next and have been given different advice at every
turn. They have been saddled with enormous inconvenience as a
result of this blatant infringement of their rights," said Kruger.
Kruger listed some of the problems faced by the victims:
* Many of their children don't have birth certificates.
* Other children have not been able to obtain identity
documents.
* One woman has had her credit rating ruined because her alleged
spouse has been opening and accounts and failing to service his
debts.
* The women have been unable to marry their chosen partners and
have suffered scorn and indignity in their communities.
* Those women who have required new valid IDs have been denied
those IDs, which has had an effect on their lives, such as the
ability to find employment.
* Certain women have been unable to access grants to which they
are lawfully entitled.
"The infringement of the dignity of these women, who are
law-abiding citizens, has been egregious and they are now
emotionally and financially distressed, and severely despondent,"
said Kruger.
Kruger asked for a meeting with senior Home Affairs official to
obtain a proper understanding of the policies and procedures to set
aside fraudulent marriages. This letter went unanswered -- until
EWN set questions to the department specifically asking why no one
had responded to Kruger.
'THE STATE DOESN'T KNOW MY CHILD EXISTS'
Thami Swartbooi says she discovered in 2006 that she was
fraudulently married to a man by the name Johan Zolile Nofemele.
The registered marriage certificate records that she has been
married to this man since 15 March 2005, but she has never met
Nofemele. "I immediately went to Home Affairs in Orlando West,
Soweto and I was told that they can't assist me in their region. I
was referred to Vereeniging.
"At Vereeniging I was referred to the manager. I explained the
problem. He told me I need to bring a letter from my hospital and
because I'm from the rural Eastern Cape I had to bring a letter
from the head of the village. I delivered the letter and I was old
to give them between six months and a year because they need to
investigate," she said.
Swartbooi says despite follow up calls and visits to the department
over the 12 years, she remains locked into the fraudulent marriage.
It has had a profound impact on her life. "I have two children. My
second child was never registered. The state doesn't know he
exists. But Home Affairs tells me I have two more children I don't
know about," she said.
Swartbooi described the often humiliating and frustrating treatment
she received from Home Affairs officials. "I will be called names.
I will be told that if I am tired of marriage, I must just get a
divorce. To the point where you want to be rude so that someone can
hear you. You scream just so someone can hear you, but you never
get service. They degrade you and make you feel like you are
nothing. Home Affairs didn't help me with nothing."
Masingita Hlungwani says she moved to Johannesburg from Limpopo in
2012 to look for work. She says she was approached by a man who
claimed he was opening a new shop in the CBD and asked if she
wanted to help him. "I told him I was interested. He asked for my
photo, my CV, my cellphone number and my ID. I gave him copies of
everything he needed," she said.
Hlungwani says the man called her a few months later saying he
needed to meet again. "We arrived at a shopping centre where I was
taken to a small room crowded with other men and women. Some of
them said they were also there for jobs, but like me did not know
much more about it. Eventually, someone took my fingerprints and
asked me to sign a piece of paper," she said.
Hlungwani says she never heard from the man again and had forgotten
about the incident until 2017 when she tried to replace a bank card
which was about to expire. "The bank assistant scanned my
fingerprints and told me they needed an updated copy of my ID. When
I asked why this was necessary, I was told that their system, had
picked up I was married, and my surname was 'Mohammed Imran Ali'."
Hlungwani has been unable to claim from the Unemployment insurance
Fund; unable to register her marriage to her partner of many years;
and recently she was unable to register he son's name in her maiden
name and unable to obtain a support grant for the child.
Another woman, who asked not to be identified, says she discovered
she was registered in a fraudulent marriage when she gave birth to
her son. "When my son was born, the hospital staff informed me that
a notice for his birth could not be completed because their system
was reflecting that I was married and I had another surname.
"My fraudulent marriage caused one primary practical issue -- I
could not access a child support grant for my son despite being
eligible for one," she says.
The woman described in detail how she has been sent from one Home
Affairs office to another and given different advice depending on
who she spoke to.
In 2015 she received a letter from the department saying that after
an investigation the department is not in a position to expunge the
marriage from the national population register. "You are advised to
lodge an application, at your own cost, at the High Court for an
annulment of your marriage or file for a divorce."
THE DHA RESPONDS
DHA spokesperson David Hlabane says the following process would
need to be followed to have a fraudulent marriage set aside:
* The person would need to submit a sworn statement from the
South African Police Service.
* In the sworn statement, the client confirms that to his/her
knowledge, such a marriage is fraudulent/that the client has no
knowledge of the existence of such marriage between herself/himself
and someone else.
* Ten specimen signatures of the complainant and a copy of the
complainant's ID must also be submitted.
* An investigation is then conducted.
Hlabane says that in most instances such marriages do not have
marriage registers. "In our investigation, we ascertain the
existence of a marriage register. This includes checking with the
office from which the alleged marriage was concluded. Should such a
marriage register exist, we compare the signature on the record
with the specimen signatures. Once we are convinced that the
information on the register tallies with what is on the ID copy,
and the specimen signatures, we then refer the matter to court," he
said.
Hlabane said the Department constantly provides its staff training
on all aspects of marriages and raises awareness on civil
registration matters broadly. He did not answer specific questions
on whether or not the department has conducted an audit of
fraudulent marriage on its system.
A TOUCH OF CLASS ACTION
Advocate Erin-Diane Richards, who has been briefed by the Wits Law
Clinic, was not in a position to comment on the merits of the
individual cases being handled but spoke broadly about the general
legal rights of those affected by these fraudulent marriages.
"State departments have constitutional obligations to carry out
their functions, not only with transparency and accountability but
importantly with efficiency.
"Section 195 of the Constitution is very clear on that. If state
departments fail in those obligations' citizens can -- and I would
go as far as to say must -- hold those departments and
functionaries to account in the courts, and obviously, they can do
that individually or collectively," she said.
Section 38(c) of the Constitution states that "anyone acting as a
member of, or in the interest of, a group or class of persons" may
approach the courts alleging that a right in the Bill of Rights as
been infringed and the court may grant appropriate relief.
The group of women challenging the department has created the
potential for a hugely significant class-action law suit designed
to compel the department to protect and uphold the rights of women
such as these through material, systemic changes.
Richards would, however, not be drawn into whether this is in fact
the strategy being pursued at this stage but did make two
observations. "The first is about this notion of civic action. We
need to start seeing a decrease in the current levels of civic
apathy towards torpidity in the public service, where it's found to
exist. Citizens must demand accountability from those that they
have elected because the reality is that democracy cannot function
properly in the face of civic apathy.
"While it's true that democracy requires the state to fulfill its
obligations. The flip side of that coin is that citizens have an
equal duty to democracy to enforce government action if and where
it's found to be lacking."
There is no indication at this stage when the case of the five
women will be brought to court. The Wits Law Clinic has however
appealed to women in similar situation to make contact, by sending
an email to Philippa.Kruger@wits.ac.za or calling 011 717 8562.
[GN]
SPRINT: State AGs Sue to Block Merger Amid Class Action
-------------------------------------------------------
Courthouse News Service reported that a coalition of state
attorneys general took to federal court on June 11 to block a
proposed $26.5 billion merger of telecommunication giants T-Mobile
and Sprint.
The merger has drawn condemnation from critics who fear it could
hurt consumers, particularly those in underserved, rural areas.
However, Federal Communications Commission Chairman Ajit Pai, a
Republican, expressed support for the deal in April.
Virginia Attorney General Mark Herring, a Democrat, is among those
behind the federal lawsuit, which was filed on June 11 in
Manhattan.
He said in a statement that cellphones have become a necessity for
people get a job or succeed in school, and the merger would offer
few benefits to consumers.
"The cost of mobile phone service has actually dropped
significantly in recent years, but this proposed merger would
likely lead to increased costs, fewer choices, and less innovation
in the market," Herring said. "For many families on a tight budget,
a small increase in the cost of their phone plan could be
incredibly disruptive and difficult to absorb."
"We're going to do what we can to protect Virginians and keep phone
bills low," he added.
In addition to Virginia, the 45-page complaint was filed by
attorneys general in New York, California, Colorado, Connecticut,
Washington, D.C., Maryland, Michigan, Mississippi and Wisconsin.
It cites a redacted portion of a 2015 Deutsche Telekom document
saying "that consolidation will lead to less competition and better
returns for network operators," according to the complaint.
Deutsche Telekom AG, a German-based telecom group which the
complaint says "indirectly holds approximately 63% of T-Mobile's
stock" and the Tokyo-based Softbank Group Corp, which "indirectly
holds approximately 85% of Sprint's stock" are listed as defendants
alongside the two U.S. companies.
Questions sent to Herring's office to clarify the source of the
redacted document were not returned by press time.
The filing also points to a previous attempt by T-Mobile to merge
with AT&T, which was dropped after challenges to its impact on
competition in the U.S. market.
Chairman Pai's support for the merger is also referenced in the
filing, but it notes the FCC has yet to actually approve the deal,
which is required before it could go forward due to the transfer of
radio licenses involved.
The complaint asks the court to permanently enjoin the merger.
Additional concerns expressed by the attorneys general include what
impact the merger could have on rural areas, which already suffer
from a lack of cellphone coverage.
Carri Bennet, general counsel for the Rural Wireless Association,
which tracks access to wireless services in more remote parts of
the country, said the merger would be particularly bad for those in
the areas they monitor. She accused the FCC of not being
transparent with the public about the deal, and instead "blindly
accepting New T-Mobile's words as truth."
Attempts to reach T-Mobile and the FCC were not returned, but
public comments on the merger are available on the FCC's website.
One comment, submitted by Andrea Rice from the Missouri Farm
Bureau, argues the merger will benefit the rural consumers she
represents and concerns about its negative impacts are overblown.
"Businesses and families in these rural communities rarely have the
opportunity to choose from more than one or two wireless, broadband
or cable providers," reads the comment which was originally
published as an op-ed in a local newspaper, The Missouri Times.
"However, with the combination of T-Mobile and Sprint, the
possibility of more robust competition is becoming a reality.
"Competition that will be created by having a stronger wireless
company providing more rural coverage means a better product at a
better price," Rice added.
This isn't the first legal hurdle the proposed merger has faced.
Last September, Sprint shareholders claimed in a class action suit
filed in Kansas federal court that the merger was tainted by
statements issued to the Securities Exchange Commission. That case,
which similarly asked for a halt of the merger, was voluntarily
dismissed shortly after being filed.
ST PAUL, MN: Faces Class Action Over Sick Leave Policy
------------------------------------------------------
Frederick Melo, writing for Pioneer Press, reports that toward the
end of 2017, Benjamin Smith found an extra $100 or so in his
paycheck -- a pleasant surprise that none of his fellow lifeguards
or aquatics workers at St. Paul Parks and Recreation could
explain.
"After our payday, we were all like, 'Did you get extra money? Did
you get extra money?'" said Smith, who was a high school student at
the time.
Months later, Smith said he was informed the extra cash represented
a payout of his unused paid sick leave -- a benefit he didn't know
he qualified for. When he asked to use sick time, however, he was
denied. And there was no such payout at the end of 2018.
"They did way more than they're supposed to in terms of paying out
some funds to some people," said attorney Mark Smith, Ben's father.
"Essentially, the city crafted policies to deal with Earned Sick
and Safe Time but didn't disclose them to people. It paid out a
bunch of dollars to employees that it wasn't expected to. It
doesn't make any sense."
Those arguments form the basis of the family's lawsuit alleging the
city violated its own Earned Sick and Safe Time ordinance in its
dealings with dozens of part-time, seasonal employees. Notifying
workers of their rights under the law is a cornerstone of the
citywide mandate approved by the city council in 2016.
Some city officials think the confusion lies with at least 80
temporary, non-unionized workers in the aquatics division and Como
campus. The Smiths, who have asked for a widespread review of city
departments, say the number could be even higher.
Liz Xiong, a spokeswoman for the mayor's office, said the city
generally does not comment on pending litigation. She forwarded a
statement from City Attorney Lyndsey Olson that explains "the city
of St. Paul has consistently provided information to employees
about their rights under the ESST ordinance through the city's
website. Training for lifeguards and aquatics workers has included
workers' rights under the ESST ordinance."
Olson's statement goes on to say: "Enforcement of the Earned Sick
and Safe Time ordinance is a high priority for the city of St. Paul
and the allegations contained in the complaint are concerning and,
if true, warrant appropriate action. The city is reviewing the
complaint and will respond in a timely manner."
CLASS ACTION SUIT
The St. Paul City Council approved the citywide Earned Sick and
Safe Time mandate in September 2016, and it was enacted for most
employers in June 2017.
The class action suit, served on the city, alleges that when
Benjamin Smith tried to use sick leave in summer 2018, he
repeatedly was refused and subjected to evasive, dismissive or
intimidating questions. One supervisor asked if he was the worker
who had been calling City Hall for clarification on the policy.
Benjamin Smith said none of the city's four aquatics centers
carried posters indicating workers were entitled to sick leave, and
there was no mention of sick leave in his employee handbook. Public
notice is required under the 2016 ordinance, and employee handbooks
in particular are specified.
"The city produces the posters," said Mark Smith. "The city has
available posters that they didn't put in their own break room."
Being refused sick leave was little more than an inconvenience,
Benjamin Smith said. But he knows Parks and Rec workers who have
children or live with disabilities and would have benefited from
paid sick leave.
Among the benefits of the law is paid time off to look after a sick
family member or take them to medical, dental and optical
appointments.
"He's got a house to live in, he's got food to eat," Mark Smith
added. "But they're not all in Benjamin's situation. They have to
wait six months to get paid. That's food on the table to people."
RESPONSE TO STAFFING SHORTAGES?
Under the city's Earned Sick and Safe Time ordinance, employees
citywide are expected to accrue sick leave at the rate of one hour
for every 30 hours worked. As an alternative, employers can issue
paid time off, or PTO, instead of sick leave, as long as it accrues
at the same rate or better.
Mark Smith points to two internal notices he obtained from St. Paul
Human Resources as evidence that the PTO policy caused confusion in
the department, and maybe even inspired supervisors to try to hide
the benefit so as to curtail unscheduled absences that could lead
to temporary pool closures.
It's unclear where the notices were circulated, but "it was never
communicated to employees," he said.
In response to the sick leave mandate, the city crafted a "personal
time off" policy for temporary Parks and Rec employees listed as
"special employees" not represented by bargaining units, effective
April 2017. The city later revised the policy, effective April
2018, and explained it applied specifically to aquatics workers and
employees of the Como campus.
The 2018 notice explaining the revised policy indicates that paid
time off can be used as either sick leave or vacation time: "PTO
may be used by employees for any reason to include vacation, their
own health needs and the health needs of their family members
(under) the city's ESST policy."
That's legal under the ordinance. The written notice seems to
indicate, however, that the goal of the new policy is to avoid
staffing shortages that could force the city to close a pool or
cancel a special event. If that's construed as discouraging workers
from using the sick time they've accumulated, Mark Smith thinks the
city could be in trouble.
The notice reads: "Parks and Recreation want to attempt to ensure
that summer seasonal employees -- specifically, in aquatics and the
Como campus, who are hired for the summer season . . . complete
their work assignments to end of the summer, not causing closure of
the swimming pools or events at the Como campus prior to the
scheduled closure."
Some good may already have come from the legal pressure. During
training over the past weekend, lifeguards and other aquatics
workers received a detailed presentation on their rights under the
ESST ordinance.
"In our view, the suit is already having at least part of the
desired effect, which is to get the city to comply with its own
rules," Mark Smith said. [GN]
STANFORD INTERNATIONAL: $65MM Deal in Securities Suit Vacated
-------------------------------------------------------------
The United States Court of Appeals, Fifth Circuit, issued an
Opinion vacation the District Court's judgment approving global
settlement in the case captioned SECURITIES AND EXCHANGE COMMISSION
Plaintiff, v. STANFORD INTERNATIONAL BANK, LIMITED, Defendant, v.
JOSEPH BECKER; TERENCE BEVEN; WANDA BEVIS; THOMAS EDDIE BOWDEN;
TROY L. LILLIE, JR., et al Movants-Appellants, DOUG MCDANIEL; SCOTT
NOTOWICH; EDDIE ROLLINS; CORDELL HAYMON; et al, Objecting
Parties-Appellants, v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON;
ARCH SPECIALTY INSURANCE COMPANY; LEXINGTON INSURANCE COMPANY,
Interested Parties-Appellees, RALPH S. JANVEY, Appellee, CERTAIN
UNDERWRITERS AT LLOYD'S OF LONDON; ARCH SPECIALTY INSURANCE
COMPANY, Plaintiffs-Appellees, v. RALPH S. JANVEY, In his Capacity
as Court Appointed Receiver for Stanford International Bank
Limited, Stanford Group Company, Stanford Capital Managment L.L.C.,
Stanford Financial Group, and Stanford Financial Group Bldg,
Defendant-Appellee, v. CORDELL HAYMON, Intervenor-Appellant,
CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON; ARCH SPECIALTY INSURANCE
COMPANY; LEXINGTON INSURANCE COMPANY, Plaintiffs-Appellees, v.
CORDELL HAYMON, Objecting Party-Appellant, v. RALPH S. JANVEY,
Intervenor-Appellee, CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON;
ARCH SPECIALTY INSURANCE COMPANY; LEXINGTON INSURANCE COMPANY,
Plaintiffs-Appellees, v. RALPH S. JANVEY, Intervenor
Defendant-Appellee, v. CORDELL HAYMON, Objecting Party-Appellant,
CORDELL HAYMON, Third Party Plaintiff-Appellant, v. CERTAIN
UNDERWRITERS OF LLOYD'S OF LONDON, Claims asserted by Claude F.
Reynaud, Jr., Third Party Defendant-Appellee, v. RALPH S. JANVEY,
Appellee. No. 17-10663. (5th Cir.).
These appeals challenge the district court's approval of a global
settlement between Ralph Janvey, the Receiver for Stanford
International Bank and related entities, and various insurance
company Underwriters, who issued policies providing coverage for
fidelity breaches, professional indemnity, directors and officers
protection, and excess losses.
The massive Stanford Financial Ponzi scheme defrauded more than
18,000 investors who collectively lost over $5 billion. As part of
a securities fraud lawsuit brought by the SEC, the district court
appointed the Receiver to immediately take and have complete and
exclusive control of the receivership estate and any assets
traceable to it.
The Receiver moved for approval of the settlement and entry of the
bar orders. The district court directed notice to all interested
parties, and received objections from several third parties,
including Appellants.
The district court approved the settlement and bar orders, denied
all objections, and approved the payment of $14 million of attorney
fees to Receiver's counsel. Separate Final Judgments and Bar Orders
were entered in each action pending before it relating to the
Stanford Entities and in Appellant Haymon's and Appellant
Alvarado's separate lawsuits against the Underwriters. The district
court rejected all post-trial motions.
Each group of Appellants raises different challenges to the court's
approval of the settlement and bar orders. They appeal from the
district court's order denying their objections to the proposed
settlement, the Final Bar Order, and the Order Approving Attorneys'
Fees for the Receiver's counsel. The Stanford Employees
additionally appeal the Order denying their new trial motion, and
Haymon appeals from the Order denying his motion for
reconsideration.
General Receivership Principles
The primary purpose of the equitable receivership is the marshaling
of the estate's assets for the benefit of aggrieved investors and
other creditors of the receivership entities. Receivers appointed
by a federal court are directed to manage and operate the
receivership estate according to the requirements of the valid laws
of the State in which such property is situated, in the same manner
that the owner or possessor thereof would be bound to do if in
possession thereof.
In general, the Receiver has wide powers to acquire, organize and
distribute the property of the receivership. A properly appointed
receiver is vested with complete jurisdiction and control of all
[receivership] property with the right to take possession thereof.
The Receiver is obliged to allocate receivership assets among the
competing claimants according to their respective rights and, in
this case, under the laws of Texas, where the Stanford Financial
Group was headquartered. The district court ruled, in a 2009 order
that was not appealed, that the insurance policies and proceeds are
property of the estate subject to the court's exclusive in rem
jurisdiction.
Once assets have been placed in receivership, it is a recognized
principle of law that the district court has broad powers and wide
discretion to determine the appropriate relief in an equity
receivership. This discretion derives not only from the statutory
grant of power, but also the court's equitable power to fashion
appropriate remedies as ancillary relief measures. Courts have
accordingly exercised their discretion to issue bar orders to
prevent parties from initiating or continuing lawsuits that would
dissipate receivership assets or otherwise interfere with the
collection and distribution of the assets. Receivership courts,
like bankruptcy courts, may also exercise discretion to approve
settlements of disputed claims to receivership assets, provided
that the settlements are fair and equitable and in the best
interests of the estate.
Party Contentions
Appellants Alvarado and McDaniel
The McDaniel and Alvarado Appellants are all former Stanford
managers or employees who are being sued by the Receiver for
clawbacks of their compensation via the Receiver's Indirect Claims
on the Underwriters' policies. Appellants seek coverage under the
insurance policies, which Underwriters have denied, to defend
against these lawsuits and indemnify their losses. Appellants
object to the settlement and bar orders on numerous grounds. From a
practical standpoint, the settlement will exhaust the Underwriters'
policy proceeds, leaving these Appellants wholly uninsured against
the Receiver's lawsuits. The bar orders, moreover, prevent them
from pursuing against the Underwriters not only breach of contract
claims for violating the duties to defend and indemnify, but also
statutory and tort claims that, if successful, would not be paid
from policy proceeds and would not reduce Receivership assets.
The district court's rejection of Appellants' objections rested
generally on its conclusion that the settlement and bar orders are
fair, equitable, reasonable and in the best interests of the
receivership estate.
In the course of explaining its decision, however, the court made
some errors. First, its broad statement that the settlement would
fail without the bar orders did not account for the fact that the
parties had mediated a prior settlement that required no bar orders
against these Appellants because the Receiver had agreed to release
all of its claims against them. Global peace there was achieved not
by bar orders, but by the Receiver's agreeing to drop the Indirect
Claim suits.
Second, the court, perhaps inadvertently, did not address the fact
that Appellants were foreclosed from sharing in the assets
recovered by the Receiver by filing claims against the estate.
Third, the court failed to distinguish between the Appellants' two
separate types of claims contractual claims for defense and
indemnity payable if successful from policy proceeds in competition
with investors' claims to the Receivership assets; and independent,
non-derivative, third-party claims for tort and statutory
violations, which would be satisfied, if successful, out of
Underwriters' assets
Contractual Claims for Defense and Indemnity
Reviewing first the settlement and bar of Appellants' contractual
claims against the policy proceeds that are property of the
receivership estate, we find that the court abused its discretion
by extinguishing Appellants' claims to the policy proceeds, while
making no provision for them to access the proceeds through the
Receiver's claims process. This undermines the fairness of the
settlement.
As the district court observed, some settlement with the
Underwriters was prudent because of the sheer magnitude of claims
far beyond the policies' coverage, and because the scope of
coverage, dependent on multiple, insured-specific factual and legal
questions, is unclear. What is clear in Texas law, as conceded by
Appellants, is that an insurer may settle with fewer than all of
its co-insureds when the policy proceeds are insufficient to
satisfy all of the claims.
But not only did the settlement expressly foreclose the Appellants
from sharing in the insurance policy proceeds of which they are
coinsureds, the Appellants are not even allowed to file claims
against the Receivership estate. Unlike the Stanford investors and
the Receiver's attorneys, who can pursue restitution through the
Receiver's claims process, Appellants have no access to the claims
process. The Settlement Agreement specifically restricts payment of
the Proceeds to the Receivers' attorneys and the Stanford investors
and specifically excludes Stanford employees and management,
including Appellants. For these Appellants, should the Receiver
continue to pursue them, their claims against the Underwriters
offer the only avenue of recovery.
The district court and Receiver lacked authority to dispossess
claimants of their legal rights to share in receivership assets for
the sake of the greater good.
Extracontractual Claims for Tort and Statutory Violations
By ignoring the distinction between Appellants' contractual and
extracontractual claims against Underwriters, the district court
erred legally and abused its discretion in approving the bar
orders. These claims, including common law bad faith breach of duty
and claims under the Texas Insurance Code, lie directly against the
Underwriters and do not involve proceeds from the insurance
policies or other receivership assets. These damage claims against
the Underwriters exist independently; they do not arise from
derivative liability nor do they seek contribution or indemnity
from the estate.
The Fifth Circuit finds that the Receiver lacked standing to settle
independent, non-derivative, non-contractual claims of these
Appellants against the Underwriters.
In sum, although the Court sympathizes with the impetus to settle
difficult and atomized issues of insurance coverage rather than
dissipate receivership assets in litigation, the settlement and bar
orders violated fundamental limits on the authority of the court
and Receiver. The court and Receiver could not abrogate contractual
claims of these Appellants to proceeds of Underwriters' policies
without affording them an alternative compensation scheme similar,
if not identical, to the claims process for Stanford investors.
The court could not authorize the Receiver and Underwriters to
compromise their differences while extinguishing the Appellants'
extracontractual claims against Underwriters. Equity must follow
the law, which here constrains the court's and Receiver's authority
to protecting the assets of the receivership and claims directly
affecting those assets.
Appellant Cordell Haymon
Like the Alvarado and McDaniel Appellants, Appellant Cordell
Haymon, a member of Stanford Trust Company's board of Directors,
was targeted by the Receiver and sought coverage of his defense
costs under the insurance policies. After the Underwriters denied
his claim for coverage, he settled the Receiver's fiduciary duty
breach suit for $2 million. Haymon asserts that he relied on the
language of his settlement agreement, which specifically authorized
the continuation of his suit against the Underwriters. Only a few
months later, however, the final proposed settlement undid his
expectations of recovery from the Underwriters. Haymon requested to
intervene in the initial coverage dispute between Underwriters and
the Receiver, and he filed objections to the proposed settlement.
He argues now that the district court erred in barring all of his
contractual and extracontractual tort and statutory claims against
the Underwriters.
To the extent that Haymon's claims mirror those of Alvarado and
McDaniel, the same results follow. The district court acted within
its authority to bar Haymon's claim for contractual defense and
indemnity under the insurance policies, but some alternate
compensation mode from the receivership estate is required, and the
court could not bar his extra-contractual claims against the
Underwriters. However, the ultimate evaluation of Haymon's claims
may differ from that of the other Appellants for two reasons, which
the district court should assess on remand. First, because his
insurance coverage claim was liquidated before the final settlement
($2 million potential indemnity and $1.5 million defense costs) it
was ripe for judicial determination under Pendergest-Holt.
Second, Haymon received a bar order, perhaps valuable to him,
against any further litigation concerning his involvement with
Stanford entities.
Appellant Louisiana Retirees
Unlike the foregoing Appellants, the Louisiana Retirees are not
coinsureds under the insurance policies, and they are not being
pursued in Indirect Claim actions by the Receiver. Retirees have
assiduously pursued securities law claims against certain Stanford
brokers and the Underwriters, as insurers for those brokers, under
the Louisiana Direct Action Statute, La. R.S. 22:1269.
First, the parties dispute the meaning of the bar order and the
extent to which it bars the Retirees' claims. The Receiver argues
that the bar order applies only to claims against the Underwriters
and the Underwriters' Released Parties, defined as the officers,
agents, etc. of Underwriters, and expressly excluding the officers,
directors, or employees of Stanford Entities.
Retirees argue that it enjoins them from pursuing the Stanford
Claims, defined as any action, lawsuit or claims brought by any
Stanford Investor against Underwriters or Underwriter's Insureds.
In turn, Underwriters' Insureds are defined as any person that
shall be an officer and director of any Stanford Entities or any
employee of any Stanford Entities.On remand, it would be
appropriate for the district court to determine and clarify the
meaning of the bar order as to the Retirees, keeping in mind that
the district court may not enjoin any claims by Retirees against
the brokers that do not implicate the policy proceeds.
Second, the Retirees' claims under the Louisiana direct action
statute unequivocally implicate the policy proceeds and therefore
assets of the receivership. The statute specifies that an action
can be brought within the terms and limits of the policy by the
injured person. It does not create an independent cause of action
against the insurer; it merely grants a procedural right of action
against an insurer where the plaintiff has a substantive cause of
action against the insured.
Nevertheless, the Retirees assert several arguments that have no
bearing on the permissibility of the settlement and bar order as to
them. They contend first that the settlement and bar order conflict
with the Supreme Court's decision in Chadbourne & Parke LLP v.
Troice, 134 S.Ct. 1058(2014), which they characterize as
acknowledging the Louisiana Retirees' rights to bring their state
law securities claims in Louisiana state court. But Troice held
only that the Securities Litigation Uniform Standards Act did not
preempt the Louisiana Appellants' state court claims. The Court's
ruling did not bear on the merits of or procedure for the Retirees'
state law case.
Second, they contend that DSCC, 712 F.3d at 185, forbids giving the
receiver the right to control the settlement of a claim it does not
own That is certainly correct according to our previous discussion,
but here, the Receiver had standing to pursue its own claims as
coinsured under the Underwriters' policies, such claims perfected
the Receiver's interest in a valuable asset, and Texas law provided
the right to settle them even at the expense of the Retirees'
direct action claims.
The Retirees argue that the district court should have first
determined the disputed legal questions about the magnitude of, and
legal rights to, the policy proceeds before approving the
settlement and bar orders under In re Louisiana World Exposition,
Inc., 832 F.2d 1391 (5th Cir. 1987).
This argument simply misreads that case. The court in Louisiana
World explicitly distinguished the facts before it from cases
involving coinsureds with equal claims to the policy proceeds.
Moreover, at least one disputed policy the Fidelity Bond overs
only the Receivership entities. It was not an abuse of discretion
for the district court to hold that equity favored avoiding costly
litigation and dissipation of receivership assets by allowing the
Receiver, a coinsured with equal claim to the policy proceeds, to
settle with the Underwriters.
The settlement and bar orders did not interfere with or improperly
extinguish the Retirees' rights.
Accordingly, the Court vacates the district court's orders
approving the settlement and bar orders and remands for further
proceedings consistent with this opinion.
A full-text copy of the Fifth Circuit's June 17, 2019 Order is
available at https://tinyurl.com/yycv5fk5 from Leagle.com.
Stephan Bruce Rogers, 309 Water St Ste 201, Boerne, TX 78006-2867
for Objecting Party-Appellant.
Daniel McNeel Lane, Jr., 4301 Westbank Dr., Bldg. B, Suite 220.
Austin, TX 78746, for Interested Party-Appellee.
Charles Malcolm Gordon, Jr., North Chase Tower, 450 Laurel Street,
Suite 2150, Baton Rouge, LA 70801 for Movant-Appellant.
Danica Lynn Milios, 100 Congress Ave Ste 1100, Austin, TX
78701-4042 for Objecting Party-Appellant.
Kevin M. Sadler -- kevin.sadler@bakerbotts.com -- for Appellee.
Sean Daniel Jordan -- sjordan@jw.com -- for Objecting
Party-Appellant.
Phillip W. Preis, 450 Laurel StreetSuite 2150Baton Rouge, LA 70801,
for Movant-Appellant.
Scott Daniel Powers -- scott.powers@bakerbotts.com -- for
Appellee.
Adam Warren Aston -- aaston@jw.com -- for Objecting
Party-Appellant.
John C. Porter, Jr. -- jporter@sbpllplaw.com -- for Objecting
Party-Appellant.
SUBURBAN SPINE: Durnell Suit Moved to E.D. Pennsylvania
-------------------------------------------------------
The case captioned as Sheila Durnell, Charles D. Opdenaker, Jane
Doe, John Doe, true identity unknown at this time, on behalf of
themselves and all others similarly situated, Plaintiffs v.
Suburban Spine and Orthopedic Center, LLC, Main Line Hospitals,
Inc. doing business as: Bryn Mawr Hospital, Crozer-Keystone Health
System doing business as: Crozer-Chester Medical Center and John
Doe Health System, Defendants, was transferred from the Court of
Common Pleas Delaware County to the United States District Court
for the Eastern District of Pennsylvania (Philadelphia) on July 9,
2019, and assigned Case No. 2:19-cv-02972-BMS.
The docket of the case states the nature of suit as Medical
Malpractice.
Suburban Spine And Orthopedic Center, Llc is a well known Spine
Orthopedic Clinic of Bryn Mawr, Pennsylvania.[BN]
The Plaintiffs are represented by:
Catherine Damavandi, esq.
Nurick Law Group LLC
111 West Germantown Pike
Plymouth Meeting, PA 19462
The Defendants are represented by:
Chilton G. Goebel , III, esq.
German Gallagher & Murtagh
200 S. Broad Street
Philadelphia, PA 19102
Tel: (215) 545-7700
Email: goebelc@ggmfirm.com
SUNCORP SUPER: Two Law Firms Team Up to Bring Fee Class Action
--------------------------------------------------------------
Business News Australia reports that William Roberts Lawyers and
Litigation Capital Management (LCM) have partnered up to bring a
class action against Suncorp Group's super funds trustee.
The proposed class action will be brought on behalf of members of
Suncorp Super Funds to recover compensation for those whose
accounts were impacted by charges used to pay conflicted
remuneration to financial advisors from July 2013 to today.
The two firms allege Suncorp Super executed agreements to entrench
fees that would otherwise have become unlawful or unenforceable.
Further, the two firms say that Suncorp Super breached its duties
to avoid conflicts, act with due care and diligence and act in the
best interest of its members.
"We have formed the view that Suncorp Super members have been
wrongfully stripped of hard-earned monies used for the payment of
commissions and other fees to financial services," says principal
of William Roberts Lawyers, Bill Petrovski.
"Those monies should now be repaid."
The allegations and the class action follow the Royal Commission
into the banking and finance sector.
During the Royal Commission, evidence was presented suggesting that
Suncorp was engaged in the behaviour as alleged by the two law
firms.
LCM says this class action is an opportunity for customers to be
compensated for fees they never should have been charged. [GN]
TESLA INC: Hoffman Seeks Refund from Cancelled Car Reservation
--------------------------------------------------------------
A class action complaint has been filed against Tesla, Inc. for
breach of contract and for alleged violations of the California
Business and Professions Code and the California Consumers Legal
Remedies Act. The case is captioned PETER HOFFMAN, Individually and
on Behalf of All Others Similarly Situated, Plaintiff, v. TESLA,
INC., Defendant, Case No. 19CV349318 (Cal. Super., Santa Clara
Cty., June 20, 2019).
The Plaintiff seeks equitable and declaratory relief on his own
behalf and on behalf of all other similarly situated citizens who
had reserved and subsequently cancelled their reservations for the
Model 3, a Tesla motor vehicle. Tesla accepts "Reservations" for
its vehicles pursuant to an Agreement entitled "Tesla Model 3
Reservation Terms & Conditions" (Tesla's Reservation T & Cs).
Pursuant to Tesla's Reservation T & Cs, a consumer may place a
reservation for a Tesla Model 3 by making a "Reservation Payment"
which can be applied towards the purchase price of the car. The
Reservation T & Cs explicitly permit a Reservation to be cancelled
at any time, in which case you will receive a full refund of your
Reservation Payment. Tesla however does not refund such Reservation
Payments in a reasonable time, and as of the time of the filing of
this Complaint, Plaintiff has waited well over two months for his
payment, despite multiple requests.
Tesla, Inc., formerly known as Tesla Motors Inc., is a California
corporation with its principal place of business located at 3500
Deer Creek Road, Palo Alto, California. Tesla designs, develops,
manufactures, leases, and sells high-performance fully electric
vehicles, solar energy generation systems, and energy storage
products. [BN]
The Plaintiff is represented by:
Laurence D. King, Esq.
Mario M. Choi, Esq.
KAPLAN FOX & KILSHEIMER, LLP
350 Sansome Street, Suite 400
San Francisco, CA 94104
Telephone: (415) 772-4700
Facsimile: (415) 772-4707
E-mail: lking@kaplanfox.com
mchoi@kaplanfox.com
- and -
Robert I. Lax, Esq.
LAX LLP
380 Lexington Avenue, 31st Floor
New York, NY 10168
Telephone: (212) 818-9150
Facsimile: (212) 818-1266
E-mail: rlax@lax-law.com
TOYOTA MOTOR: 1st Amended Espineli Dismissed With Leave to Amend
----------------------------------------------------------------
In the case, MELINDA ESPINELI and MOHAMMAD MOGHADDAM, as
individuals and on behalf of all others similarly situated,
Plaintiffs, v. TOYOTA MOTOR SALES, U.S.A., INC., a California
corporation; TOYOTA MOTOR CORPORATION, a Japanese Corporation; and
DOES 1 through 100, inclusive, Defendants, Case No.
2:17-cv-00698-KJM-CKD (E.D. Cal.), Judge Kimberly J. Mueller of the
U.S. District Court for the Eastern District of California granted
the Defendants' motion the Plaintiffs' First Amended Class Action
Complaint under Federal Rule of Civil Procedure 12(b)(6) with leave
to amend.
Plaintiffs Espineli and Moghaddam bring the putative class action
lawsuit against the Defendants, alleging the Defendants should be
held liable for damage caused by rats chewing on the soybean-coated
electrical wiring placed in the Defendants' vehicles during
manufacture and assembly, before sale to the public.
The Plaintiffs filed their original complaint on March 31, 2017.
On Aug. 9, 2018, the Court granted the Defendants' motion to
dismiss the Plaintiffs' complaint in its entirety. It granted
leave to amend, and the Plaintiffs filed the operative First
Amended Complaint on Sept. 19, 2018. On Oct. 17, 2018, the
Defendants filed the pending motion to dismiss the Plaintiffs'
First Amended Complaint. The Plaintiffs filed their opposition on
Jan. 18, 2019, and the Defendants replied on Feb. 1, 2019.
The putative class action arises from one central claim: the
Plaintiffs allege the Defendants used soy-based wire coating in the
engine control wiring harness of their Lexus vehicles, which
attracted rodents that chewed on the wiring, causing damage to the
vehicles. They assert Lexus Vehicles can lose functionality and
safety features when wires in the engine control wiring harness are
damaged by rodents, posing a safety risk to both class members and
the public at large.
The putative class includes all persons in California who currently
own or lease, or who have owned or leased, any Lexus RX, GX, ES and
LS model vehicle with model years 2007-2017.
The Plaintiffs contend the Defendants knew of the defect and
fraudulently concealed it. In the First Amended Complaint, they
assert claims for violations of the California Consumer Legal
Remedies Act ("CLRA"), and the California Unfair Competition Law
("UCL").
In its order dismissing the Plaintiffs' original class action
complaint, the Court determined that Plaintiffs had not supported
their CLRA and UCL claims with a sufficiently pleaded misstatement
or omission. The Defendants now move to dismiss the Plaintiff's
First Amended Complaint, arguing the Plaintiffs have still not
sufficiently pleaded a fraud claim based on a misstatement or
omission.
The Plaintiffs have filed an opposition, and the Defendants have
replied. The Court held a hearing on the matter on Feb. 8, 2019.
Upon reviewing the First Amended Complaint and the parties'
briefing, Judge Mueller finds the Plaintiffs' allegations
adequately describe the content of the Defendants' omission. The
First Amended Complaint identifies a single component of the Class
Vehicles and alleges that component attracted rodents that would
destroy the wiring and compromise the functionality and safety of
the vehicle. At this stage of the proceedings, the Plaintiffs need
not allege more facts showing just how much more likely rats are to
chew on soy coated wires. Given that the wiring insulation is a
single component of the Class Vehicles, and the alleged defect
involves a flaw in that component, the Plaintiffs have satisfied
Rule 9(b)'s requirements by plausibly alleging facts sufficient to
give the Defendants notice of the alleged defect and the
Defendants' alleged misrepresentations about the defect.
Next, the Judge finds that the Plaintiffs have not adequately
alleged the Defendants had knowledge of any defect at the time of
sale. She does not consider the Plaintiffs' new factual
allegations in their opposition to the instant motion. The
Plaintiffs do not specify how many complaints were made about the
defect, alleging only "numerous" complaints and citing a total of
13 in the First Amended Complaint. They have not shown that the
Defendants had a duty to disclose under the exclusive knowledge
theory. Also, the alleged actions by Honda are insufficient to
establish the Defendants' knowledge of the alleged defect.
Accordingly, the Plaintiffs have not shown that the Defendants had
a duty to disclose under the exclusive knowledge theory.
The Judge further finds that the Plaintiffs have not adequately
alleged that the Defendants had knowledge of the alleged wiring
defect or were under a duty to disclose information about the
alleged defect under any of their three theories. Accordingly, she
will grant the Defendants' motion to dismiss the Plaintiffs' CLRA
claim.
As to the UCL claims, because she finds the Plaintiffs have failed
to adequately allege their CLRA claim, the Judge also finds the
Plaintiffs have not adequately alleged a violation of the unlawful
prong of the UCL. The Plaintiffs' claim under the unfair prong
overlaps entirely with their CLRA claim, and due to the same
deficiencies, the Plaintiffs have not plausibly pleaded a UCL
violation under the unfair prong. The Plaintiffs have not
sufficiently established the Defendants were aware of the alleged
defect in the soy-based coating at the time they purchased their
Lexus. Therefore, they have not sufficiently pleaded a UCL claim
based on fraud. For these reasons, the Plaintiffs have failed to
adequately plead violations of each prong of the UCL. Therefore,
the Defendants' motion to dismiss the Plaintiffs' UCL claim will be
granted.
Finally, while deficiencies remain in the Plaintiffs' CLRA and UCL
claims, the Judge holds that the Plaintiffs have sufficiently
alleged a design defect that could form a basis for these claims
proceeding. Additionally, they specifically identified and quoted
alleged partial misrepresentations made by the Defendants in their
First Amended Complaint. Because the Plaintiffs may be able to
allege necessary facts establishing how or where they heard or saw
these partial misrepresentations, as well as the Defendants'
pre-sale knowledge of the defect, the Judge concludes granting
leave to amend would not be futile. Therefore, she will grant the
Plaintiffs leave to amend.
For the foregoing reasons, Judge Mueller garnted the Defendants'
motion to dismiss the Plaintiffs' First Amended Complaint. She
granted the Plaintiffs leave to amend only as to their CLRA and UCL
claims based on allegations of the Defendants' pre-sale knowledge
of and partial misrepresentations about the defect. Any amended
complaint will be filed within 21 days.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/vkIkCs from Leagle.com.
Melinda Espineli & Mohammad Moghaddam, Plaintiffs, represented by
Ian James Barlow -- ian@kctlegal.com -- Kershaw Cook & Talley PC,
Stuart C. Talley -- stuart@kctlegal.com -- Kershaw, Cook & Talley
PC, Gregory Lawrence Bentley -- gbentley@bentleymore.com --
Bentley & More LLP & William A. Kershaw -- bill@kctlegal.com --
Kershaw, Cook & Talley PC.
Toyota Motor Sales, U.S.A., Inc., Defendant, represented by Amir
M. Nassihi -- anassihi@shb.com -- Shook Hardy and Bacon L.L.P.
TRADER JOE'S: Ct. Junks Manuka Honey Deceptive Marketing Suit
-------------------------------------------------------------
The United States District Court for the Northern District of
California issued an Order granting Defendant's Motion to Dismiss
in the case captioned LYNN MOORE, et al., Plaintiffs, v. TRADER
JOE'S COMPANY, Defendant. Case No. 4:18-cv-04418-KAW. (N.D. Cal.)/
The Plaintiffs allege that Defendant Trader Joe's Company (Trader
Joe's) engaged in false, misleading, and deceptive marketing and
sale of Trader Joe's Manuka Honey (Product) by representing that
the Product is composed entirely of pure manuka honey when the
Product's manuka honey content has allegedly been adulterated by
the inclusion of cheaper honey. The Plaintiffs claim that two of
the Product's representations contributed to their alleged
injuries: (1) the statement 100% New Zealand Manuka Honey or New
Zealand Manuka Honey on the Product's front label and (2) the
ingredient statement, which lists manuka honey as the only
ingredient.
Whether the state law causes of action are preempted.
FDA Honey Guidelines are instructive
U.S. FOOD & DRUG ADMIN., PROPER LABELING OF HONEY AND HONEY
PRODUCTS: GUIDANCE FOR INDUSTRY (2018) (Honey Guidance). Honey is a
single ingredient food that may be labeled with the name of the
plant or blossom if you or the honey producer has information to
support the conclusion that the plant or blossom designated on the
label is the chief floral source of the honey. While non-binding
and non-exhaustive, compliance with the Honey Guidance constitutes
compliance with the Federal Food, Drug, and Cosmetic Act (FDCA).
While the Honey Guidance discusses adulteration with non-honey
sources, such as sugar or corn syrup, it does not address mixing
high value honey with less expensive honey, and whether that
constitutes adulteration in violation of 21 U.S.C. Section 342(b).
The Plaintiffs cannot allege adulteration as defined by Section
342(b).
Under federal law, a food product will be deemed adulterated "(1)
If any valuable constituent has been in whole or in part omitted or
abstracted therefrom or (2) if any substance has been substituted
wholly or in part therefor or (3) if damage or inferiority has been
concealed in any manner or (4) if any substance has been added
thereto or mixed or packed therewith so as to increase its bulk or
weight, or reduce its quality or strength, or make it appear better
or of greater value than it is."
The Defendant argues that the Plaintiffs fail to plausibly allege
that its manuka honey is adulterated with lower grade honey. The
Defendant argues that simply asserting that the honey is
adulterated is a legal conclusion based on test results from two
samples.
In opposition, the Plaintiffs argue that the Defendant mixes honey
for which manuka is not the chief floral source with honey for
which manuka is the chief floral source, thereby creating large
batches of honey that are slightly more than 50% from manuka.
As currently alleged, the Plaintiffs do not clearly state that the
honey mixed with the high value manuka honey cannot be
independently labeled manuka honey prior to the amalgamation.
Instead, as pled, it appears that both honeys can be legally
identified as manuka honey, which means that the chief floral
ingredient prior to mixing is manuka.
In sum, the Plaintiffs clarified that their adulteration theory is
premised on the bees visiting different floral sources and
returning to the hive resulting in a lower manuka pollen count,
rather than the manufacturer purposefully mixing manuka honey with
non-manuka honey. To constitute adulteration under 21 U.S.C.
Section 342(b), the manufacturer or bottler would have to
purposefully mix manuka honey with non-manuka honey. As there is no
dispute that all of the honey involved is technically manuka honey,
albeit with varying pollen counts, there cannot be adulteration in
violation of the FDCA.
The Court motion to dismiss is granted without leave to amend,
because Plaintiffs confirmed that they cannot plead sufficient
facts to support their adulteration theory.
The label is not misleading.
Honey is a single ingredient food that must be labeled honey, which
is its common or usual name. While not required, if the chief
floral source can be ascertained, the producer may label the
product with the source, such as manuka.
Here, the Defendant argues that the Product would not mislead a
reasonable consumer, because no reasonable consumer would believe
the honey would have a single floral source. Regardless, the
Defendant claims that the product labeling is accurate, because the
Plaintiffs received only manuka honey, not a blend of honeys.
Specifically, the Defendant relies on In re 100% Grated Parmesan
Cheese Mktg. & Sales Practices Litig., for the proposition that the
100% in the phrase 100% New Zealand Manuka Honey could refer to
manuka honey or that it entirely comes from New Zealand.
In In re 100% Grated Parmesan, 275 F. Supp. 3d at 926, the court
found that a reasonable consumer would not understand 100% Grated
Parmesan Cheese' to warrant that the product contains only cheese
without first inspecting the ingredient list. While the cheese
product's ingredients list included other preservatives in addition
to parmesan cheese, here, the Product's ingredients list includes
only manuka honey. This is consistent with the Plaintiffs' own
testing of the two product samples, which showed that the manuka
content was 62.6% and 57.3%, rendering the product entirely, or
100%, manuka honey.
Since the Plaintiffs cannot allege adulteration, honey is a single
ingredient food, and the chief floral source is undisputedly
manuka, the product labeling is accurate. Given the accuracy of the
label, a reasonable consumer could not find it misleading, because
it is not.
State law causes of action are preempted
Claims one through eight are for deceptive and unfair trade
practices, unfair competition, and false advertising under various
New York, California, and North Carolina state laws. Plaintiffs
acknowledge that the state laws mirror and incorporate the FDCA, 21
U.S.C. Sections 342, 343. Defendant contends that the state law
causes of action must be dismissed on the grounds that they seek to
impose food-labeling standards different from those set forth in
the FDCA.
The FDCA, as amended by the Nutritional Labeling and Education Act
(NLEA), sets forth uniform standards for food labeling and
expressly preempts any food labeling requirements that are not
identical to federal law.
Therefore, if FDA regulations permit the labeling and branding at
issue, any state law claim to the contrary would be preempted.
The Defendant's product is accurately labeled 100% manuka honey,
which is consistent with the Plaintiffs' own testing of the two
product samples. Additionally, the Plaintiffs are not alleging
adulteration in violation of federal law. As a result, the state
law causes of action are preempted by federal law and must be
dismissed.
Plaintiffs cannot sufficiently plead fraud
Fraud claims are subject to the heightened pleading requirements of
Federal Rule of Civil Procedure 9(b). To satisfy Rule 9(b), a
pleading must identify the who, what, when, where, and how of the
misconduct charged, as well as what is false or misleading about
[the purportedly fraudulent] statement, and why it is false.
The Defendant argues that the Plaintiffs have not sufficiently pled
that Trader Joe's engaged in fraud by way of adulteration.
The Court agrees.
The fraud cause of action is predicated on a valid adulteration
theory one in which humans not bees purposefully mix non-manuka
honey with manuka honey. Since Plaintiffs confirmed at the hearing
that they do not allege that humans engaged in adulteration, the
fraud claim is not actionable.
The ninth cause of action is dismissed without leave to amend,
because any amendment would be futile.
Breach of Warranty claim is dismissed without leave to amend
The Defendant moves to dismiss the breach of warranty claim on the
grounds that the Plaintiffs unreasonably interpret the term manuka
honey as promising a higher amount of manuka pollen than the
product contains. This claim must be dismissed for the same
reasons as the fraud and other consumer causes of action for
failure to properly plead adulteration. As provided above,
Plaintiffs cannot properly plead an adulteration claim, so the
breach of warranty claim is dismissed without leave to amend.
In light of this, the Defendant's motion to dismiss is granted
without leave to amend, because any amendment would be futile.
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/y67swcjh from Leagle.com.
LYNN MOORE, Jeffrey Akwei & SHANQUA KING, Plaintiffs, represented
by C.K. Lee, Lee Litigation Group, PLLC, 30 East 39th Street,
Second Floor New York, NY 10016 & David Alan Makman --
david@makmanlaw.com -- The Law Offices of David A. Makman.
Trader Joe's Company, Defendant, represented by Dawn Sestito --
dsestito@omm.com -- O'Melveny and Myers LLP & Raymond Collins
Kilgore -- ckilgore@omm.com -- OMelveny and Myers LLP.
TRANSWORLD SYSTEMS: Klein Asserts Breach of FDCPA
-------------------------------------------------
A class action lawsuit has been filed against Transworld Systems
Inc. The case is styled as David Klein, individually and on behalf
of all others similarly situated, Plaintiff v. Transworld Systems
Inc., Defendant, Case No. 2:19-cv-03941 (E.D. N.Y., July 9, 2019).
The docket of the case states the nature of suit as Consumer Credit
filed pursuant to the Fair Debt Collection Practices Act.
Transworld Systems Inc. provides businesses and healthcare
organizations with tools for accounts receivable, debt recovery and
past due accounts.[BN]
The Plaintiff is represented by:
David M. Barshay, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 706-5055
Email: dbarshay@barshaysanders.com
- and -
Craig B. Sanders, Esq.
Barshay Sanders, PLLC
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Tel: (516) 203-7600
Fax: (516) 281-7601
Email: csanders@barshaysanders.com
TRI-MED: To Reply to Interrogatory/Certification Demands in Wallace
-------------------------------------------------------------------
In the case, SAIDA WALLACE, individually and on behalf of all other
persons, similarly situated who were employed by TRI-MED HOME CARE
SERVICES, INC., Plaintiff, v. TRI-MED HOME CARE SERVICES, INC.,
Defendant, Docket No. 157235/2017 (N.Y. Sup.), Judge Frank P. Nervo
of the U.S. Supreme Court for the New York County ordered the
Defendant to provide full responses to the Plaintiff's First
Pre-Class Certification Set of Interrogatory Demands and the
Plaintiff's First Pre-Class Certification Demands for the
Production of Documents and Things within 45 days of notice of
entry of the Order.
The Plaintiff seeks an order pursuant to CPLR Section 3124
compelling the Defendant respond to her First Pre-Class
Certification Set of Interrogatory Demands and produce material
outlined in her First Pre-Class Certification Demand for the
Production of Documents and Things. She further seeks to extend
the deadline for pre-class certification discovery and to adjourn
the deadline to file a Note of Issue. The Defendant opposes the
motion.
The action arises out of the Plaintiff's claims that she, and other
similarly situated employees of the Defendant, did not receive
appropriate wages and compensation in accordance with New York
Labor Law. She, and the putative class, are home health care
workers who are assigned to work at an individual client's home for
24-hour shifts. During her shift, the Plaintiff was required to
stay overnight, and provide care for the client during all hours of
her shift. She alleges that she was paid a flat-rate for each
24-hour shift regardless of the hours actually worked, that she was
not paid applicable overtime for hours worked in excess of 40 per
week, that she was entitled to a spread of hours in accordance with
applicable labor law, and the Defendant breached their contract in
that the wages paid were inconsistent with New York's Wage Parity
Act and Living Wage Law.
The Plaintiff seeks pre-class certification discovery relating to
information regarding the putative class members, and documents
related to her claims for breach of contract. The Defendant
contends that the recent Court of Appeals decision in Andryeyeva v.
New York Health Care, Inc., eviscerates the Plaintiff's, and the
putative class', claims.
At issue in the instant action is New York's Minimum Wage Order,
and by implication an opinion letter providing guidance on the
minimum wage order issued by the Department of Labor ("DOL"), a
subsequent "Emergency Rule" by the DOL, and the recent Court of
Appeals decision in Andryeyeva. The 2010 opinion letter stated, in
relevant part, that "live-in employees, whether or not they are
residential employees, must be paid not less than for 13 hours per
24-hour period provided that they are afforded at least eight hours
for sleep and actually receive five hours of uninterrupted sleep,
and that they are afforded three hours for meals."
The Appellate Division, however, rejected the application of the
2010 DOL opinion letter to nonresidential employees, finding it in
direct conflict with the Minimum Wage Order, and held that
nonresidential employees were entitled to be paid the minimum wage
for all hours of their shifts, irrespective of time designated for
sleep and meals.
Thereafter, the DOL issued an "Emergency Rule" amending the Minimum
Wage Order "in the face of recent divisions by the State Appellate
Divisions that treat meal periods and sleep time by home care aids
who work shifts of 24 hours or more as hours worked for purposes of
state (but not federal) minimum wages" to include the following:
Notwithstanding the above, this subdivision will not be construed
to require that the minimum wage be paid for meal periods and sleep
times that excluded from hours worked under the fair labor
Standards Act of 1938, as amended, in accordance with sections
785.19 and 785.22 of 29 C.F.R. for a home care aid who works a
shift of 24 hours or more.
The Court of Appeals, with Judge Rivera writing for the majority,
reversed the decisions of the Appellate Division and found that
DOL's interpretation of its wage order did not conflict with the
promulgated language. Here, in light of the Court of Appeals
decision, the Defendant contends that a class action cannot be
sustained against it for a violation of the Minimum Wage Order, to
wit the Defendant paid workers according to DOL guidelines upheld
by the Court of Appeals.
Judge Nervo does not so find. He finds that the Plaintiff, on
behalf of a putative class, has alleged breach of contract for
failure to pay a wage consistent with the Wage Parity Act and
Living Wage Law, failure to pay required overtime for hours worked
in excess of 40 per week, failure to spread hours according to
applicable labor laws, and that the Defendant paid plaintiff a flat
rate per 24-hour shift regardless of whether the Plaintiff was
afforded 3 hours for meals, 8 hours for sleep, and actually
received 5 hours of uninterrupted sleep. As DOL confirms, failure
to provide a home health care aide with the minimum sleep and meal
times required under DOL's interpretation of the Wage Order is a
'hair trigger' that immediately makes the employer liable for
paying every hour of the 24-hour shift, not just the actual hours
worked. The material sought by the Plaintiff is necessary to
determine whether the requirements of CPLR Sections 901 and 902 can
be met by the putative class.
Accordingly, Judge Nervo granted the Plaintiff's motion, and
ordered the Defendant is to provide full responses to the
Plaintiff's First Pre-Class Certification Set of Interrogatory
Demands and her First Pre-Class Certification Demands for the
Production of Documents and Things, including information and
documents pertaining to the putative class members for the relevant
periods of time within 45 days of notice of entry of the Order.
The pre-class certification discovery deadline is extended to Sept.
30, 2019. The Plaintiffs will move for class certification on or
before 30 days after the close of pre-class certification
discovery. The Plaintiffs' March 22, 2019 deadline to file a Note
of Issue and Certificate of Readiness is vacated and will be
determined at a later conference date.
A full-text copy of the Court's May 24, 2019 Decision and Order is
available at https://is.gd/NEbdmi from Leagle.com.
TURBOTAX: Faces Class Action Over Tax Filing Fee
------------------------------------------------
John Matarese, writing for WJLA, reports that TurboTax, the
nation's No. 1 tax prep software, is facing a class-action lawsuit
claiming many lower-income people paid for tax filing when their
returns should have been free.
One woman believes she was one of them.
Jessica Carlson is a single mom, raising a daughter and watching
every dollar.
She decided to file her taxes through TurboTax this year after
hearing it was "free" if you earn less than $34,000 annually. Her
income was significantly less than that, she says.
Only problem: Instead of the free filing she expected, Carlson was
billed $90 for TurboTax, paying out almost a third of her tax
refund.
"My total refund was $335," Carlson said, "and TurboTax took $90 of
it."
She says she Googled for TurboTax free tax prep, clicked the link
to TurboTax.com, then put in her information and W-2 forms for her
part-time job.
But within minutes, she claims, she ended up in its more expensive
version despite her low income.
"It automatically put me in Deluxe," Carlson said, "and I said I
did not make that kind of money." But having gone that far, she
proceeded anyway, gave her credit card and was promptly billed for
$90.
Investigation claims it's easy to end up paying
A recent investigation by the nonprofit group Pro Publica found
other people who ended up paying just like Carlson.
What she and so many other TurboTax users don't realize, the report
says, is that unless you go to TurboTax through the IRS website,
there is a good chance you've just gone to the paid version of
TurboTax.
Pro Publica claims you must use the TurboTax Link on the IRS Free
File site to be sure you will not be charged.
Carlson says after realizing what she was charged, she called
TurboTax but was told she could not get her money back.
"They said, 'No, we're sorry, but you should have gone to the IRS
website,'" she said.
We contacted TurboTax, where a spokesman told us its pricing is
made clear before anyone pays, and said, "more people have filed
their taxes for absolutely free with TurboTax than all other tax
prep software companies combined."
But he did tell us they would contact Carlson directly about the
bill she received and discuss it with her.
"It's not fair," she said.
Class action filed
But TurboTax may soon have to explain its policies in court.
A California law firm, Gibbs Law Group, has just filed a nationwide
class action suit claiming TurboTax intentionally made its free
program hard to find, generating millions of dollars from people
who could least afford it.
So it seems we have not heard the last of this.
As always don't waste your money.
FULL STATEMENT FROM INTUIT/TURBOTAX
"Any suggestion that Intuit does not support the IRS Free File
Program is flat wrong," said Rick Heineman, of Intuit. "More people
have filed their taxes for absolutely free with TurboTax than all
other tax prep software companies combined. We are committed to
offering Americans the ability to file their taxes for free, and
we're committed to the IRS Free File program. We look forward to
working with the IRS and private industry to improve the Free File
program and help it continue to grow." [GN]
TURTLE CREEK: Shaw Sues over Debt Collection Practices
------------------------------------------------------
LISA SHAW, individually and on behalf of all others similarly
situated, Plaintiff v. TURTLE CREEK ASSETS LTD; and GORDON ENGLE,
Defendants, Case No. 3:19-cv-00749-TAD-KLH (W.D. La., June 12,
2019) seeks to stop the Defendant's unfair and unconscionable means
to collect a debt. The case is assigned to Judge Terry A Doughty
and referred to Magistrate Judge Karen L. Hayes.
Turtle Creek Assets, Ltd. was founded in 2004. The Company's line
of business includes providing various business services. [BN]
The Plaintiff is represented by:
Samuel John Ford, Esq.
VARADI HAIR & CHECKI
909 Poydras St Ste 1100
New Orleans, LA 70112
Telephone: (504) 684-5200
Facsimile: (504) 613-6351
E-mail: ford@svhclaw.com
UBS FINANCIAL: 5th Cir. Affirms Dismissal of Lampkin Suit
---------------------------------------------------------
In the case, KEVIN LAMPKIN; STEPHEN MILLER, individually and on
behalf of all others similarly situated; JOE BROWN; FRANK GITTESS;
TERRY NELSON; DIANNE SWIBER; ROBERT FERRELL, Plaintiffs-Appellants,
v. UBS FINANCIAL SERVICES, INCORPORATED, formerly known as UBS
Painewebber, Incorporated; UBS SECURITIES, L.L.C., formerly known
as UBS Warburg, L.L.C., Defendants-Appellees, Case No. 17-20608
(5th Cir.), Judge Patrick E. Higginbotham of the U.S. Court of
Appeals for the Fifth Circuit affirmed the district court's
dismissal of the complaint for failure to state a claim.
The Plaintiffs-Appellants bring the putative class action alleging
violations of the securities laws against Defendants-Appellees UBS
Financial Services, Inc. (formerly UBS PaineWebber) and UBS
Securities, LLC (formerly UBS Warburg, LLC. During the relevant
time period, PaineWebber and Warburg were separate legal entities
and subsidiaries of UBS AG.
The Plaintiffs fall into two groups: (1) individual
retail-brokerage customers of PaineWebber who purchased Enron
securities in a PaineWebber brokerage account between Nov. 5, 2000
and Dec. 2, 2001; and (2) Enron employees who acquired Enron stock
option securities through their employment between Oct. 19, 1998
and Nov. 19, 2001, which they allege that PaineWebber underwrote
(Section 11 claims) and sold (Section 12 claims). PaineWebber
provided retail brokerage services to individuals and was acquired
by UBS in July 2000. Warburg provided investment-banking services
to institutional clients.
Until its collapse in late 2001, Enron was the seventh largest
corporation in the world. Enron began as a traditional energy
production and transmission company, concentrating in natural gas
pipelines, but quickly grew into an "industry leader in the
purchase, transportation, marketing, and sale of natural gas and
electricity" and related financial instruments. Enron's rapid
expansion made it a large consumer of cash and the company
considered its credit ratings critical to its success.
According to the complaint, Enron began to seriously manipulate its
financials to conceal the negative effects of its accounting
practices on public financial statements. After a series of
financial disclosures and restatements events spiraled: the
company's CFO, Andrew Fastow, was placed on a leave of absence, the
Board of Directors formed a special committee to investigate the
financial disclosures, and eventually, Enron filed for bankruptcy.
Plaintiffs allege that UBS and Enron maintained a mutually
self-serving relationship that took precedence over and conflicted
with the interests of UBS' retail customers. They also allege
that UBS had knowledge of Enron's "financial chicanery" because of
its "long standing banking history with Enron." With respect to
its participation in the Osprey and Yosemite IV transactions, the
Plaintiffs allege that UBS participated in a follow-on offering of
notes issued in connection with Enron's Osprey structure and
purchased Enron credit-linked notes offered as part of Enron's
Yosemite IV structure. Finally, they allege that E-Next Generation
is "the best documented example of UBS participating in a
materially false public presentation of Enron's financial
appearance. They claim that UBS created an off-balance sheet loan
to allow Enron to finance the construction of its US electric
generating build out and then, once the construction was complete,
bring the project onto Enron's balance sheet after it started
generating revenues.
On the basis of those allegations, the Plaintiffs claim violations
of Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder.6 They claim UBS violated Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder by failing to disclose the
conflicts under which it operated its brokerage business and the
information and knowledge it possessed during the class period
concerning the manipulation of Enron's public financial appearance.
They contend that the Defendants' acts, practices, and course of
business combined to operate a fraud upon the Plaintiffs, deceiving
them into believing the price at which they purchased or held their
Enron securities was determined by the natural interplay of supply
and demand.
The case was initially filed in March 2002 and has a long
procedural history. The Plaintiffs filed a second amended
complaint in June 2002 and, in November of that year, the case was
coordinated with a multi-district litigation under the lead case
Newby v. Enron Corp.
In November 2003, the district court denied the Defendants' motion
to dismiss the second amended complaint and the case proceeded to
discovery. In July 2006, the district court ordered all MDL
Plaintiffs who wanted to proceed under their own complaints to give
notice of that intent, which the Plaintiffs did, opting to "proceed
under their own independent complaint, as finally amended."
The operative third amended complaint was filed the next month and
the Defendants filed a timely motion to dismiss. Shortly
thereafter, the Court decertified the Newby class, and the Supreme
Court granted certiorari on a case concerning the scope of
liability under Section 10(b) of the Exchange Act. The district
court stayed the case pending resolution of Stoneridge by the
Supreme Court. Two years after the Supreme Court's decision came
down, the Plaintiffs moved to lift the stay and, a year later, the
district court lifted that stay.
The Plaintiffs moved to amend their complaint a fourth time and the
district court denied the Plaintiffs' motion as untimely. In
February 2017, five and a half years after the stay was lifted, the
district court granted the Defendants' motion to dismiss and denied
the Plaintiffs' subsequent motion for reconsideration. The appeal
followed.
Judge Higginbotham finds that at base, the Plaintiffs Securities
Act claims fail because their participation in the Employee Stock
Option Plan was compulsory and employees furnished no value, or
tangible and definable consideration in exchange for the option
grants. The Court in Int'l Brotherhood of Teamsters v. Daniel,
rejected the idea that the exchange of labor was sufficient
consideration in the context of a compulsory, non-contributory
pension plan—the same logic applies to the option plan at issue
in the case. The Plaintiffs made no investment decision in the
grant of the options, the Enron plans were compulsory and
non-contributory. The fact that they would eventually make an
affirmative investment decision at some point in the future is of
no consequence. The Plaintiffs' claims are based explicitly on the
grant of the option, not the exercise of that option.
Because they have not overcome the most fundamental hurdle to their
Securities Act claims, the Judge need not consider UBS' alternative
arguments that (1) PaineWebber was not an underwriter or seller;
(2) the Plaintiffs failed to allege that any false prospectus or
registration statement covered the Enron options; and (3) that the
Plaintiffs failed to plead damages. The Plaintiffs' Securities Act
claims require a sale -- the Plaintiffs have failed to demonstrate
that the grant of Enron options amounted to the sale of a security.
For those reasons, the district court correctly dismissed the
Plaintiffs' Section 11 and Section 12 claims.
The Judge also finds that the Plaintiffs fundamentally fail to
establish that either the Defendant had material, nonpublic
knowledge to disclose and a duty to disclose. They attempt to
circumvent this requirement by arguing that UBS operated as a
"single, fully integrated entity," meaning that any material,
nonpublic information known to UBS AG or Warburg had to be
disclosed by PaineWebber. Because they have not adequately pled
that the Defendants formed a joint venture, the lack of
particularized allegations that any Defendant entity possessed
material information about Enron's finances and a duty of
disclosure are fatal to their claim.
Finally, he finds that conclusory statement does not tell the Court
which new allegations would cure the deficiencies highlighted by
the district court. Specifically, the Plaintiffs have not made
clear how their revised allegations would support their theory that
PaineWebber and Warburg participated in a joint venture. Even
taking them at their word that the Defendants would not have been
overly prejudiced by the proposed amendment, the first two factors
in the analysis are determinative. The district court did not
abuse its discretion in refusing to grant leave to amend.
Because the Plaintiffs failed to state a claim under the Securities
Act or the Exchange Act and the district court did not abuse its
discretion in denying the Plaintiffs an additional chance to amend
their complaint, Judge Higginbotham affirmed the district court's
dismissal.
A full-text copy of the Court's May 24, 2019 Order is available at
https://is.gd/5j8XiT from Leagle.com.
Charles Rodney Acker -- rodney.acker@nortonrosefulbright.com -- for
Defendant-Appellee.
Andy Tindel -- atindel@andytindel.com -- for Plaintiff-Appellant.
Robert J. Giuffra, Jr. -- giuffrar@sullcrom.com -- for
Defendant-Appellee.
Dawn Renee Meade, for Plaintiff-Appellant.
Bonnie Spencer -- bonniespencer@spencer-law.com -- for
Plaintiff-Appellant.
Ellen Bush Sessions -- ellen.sessions@nortonrosefulbright.com --
for Defendant-Appellee.
Brendan Peter Cullen, for Defendant-Appellee.
William Henry Wagener -- wagenerw@sullcrom.com -- for
Defendant-Appellee.
David Augustus, for Plaintiff-Appellant.
UNITED STATES: Argues Banning Bump Stocks Not Abuse of Discretion
-----------------------------------------------------------------
Heather Isringhausen Gvillo, writing for Madison-St. Clair Record,
reports that several government officials argue that a rule banning
bump-stock devices is not an abuse of discretion in response to a
class action seeking immunity for those who legally purchased the
devices prior to the passing of the "Final Rule."
"The Final Rule is supported by substantial evidence and is neither
arbitrary, capricious, nor an abuse of discretion and, therefore,
should be affirmed on the administrative record," the defendants'
May 31 answer states.
Senior trial counsel Eric J. Soskin, an attorney with the
Department of Justice, filed the answer on behalf of President
Donald J. Trump, Attorney General William P. Barr and Regina
Lombardo, Deputy Director of the Bureau of Alcohol, Tobacco,
Firearms and Explosives (ATF). Barr and Lombardo were substituted
as defendants for Matthew Whitaker and Thomas E. Brandon.
In his affirmative defenses, Soskin argues that the defendants'
actions do not violate the United States Constitution, the Fourth
Amendment, the Fifth Amendment, the Administrative Procedure Act,
or any other law.
He also argues that the defendants' actions and positions are
justified within the meaning of the Equal Access to Justice Act.
Thomas Maag of Maag Law Firm LLC in Wood River filed the lawsuit
Jan. 2 on behalf of John Doe and all who are similarly situated.
Maag alleges Doe filed the case under a pseudonym because he is
afraid of being arrested and prosecuted "should his or her actual
true name be known, due totally and exclusively to his prior lawful
conduct and his continued possession of certain items that he
previously lawfully acquired . . ."
The class action was filed in response to a rule adopted by the ATF
in December 2018, retroactively redefining bump-fire stocks as
machineguns under the National Firearms Act of 1934 and Gun Control
Act of 1968. Until the new rule was published, the ATF had
classified bump-stocks as firearm "parts."
Bump-stocks attach to semiautomatic firearms in replace of the
standard stock and speed up their firing rate, similar to that of
an automatic weapon. They are notoriously associated with the mass
shooting at a Las Vegas country music festival in October 2017. A
gunman fired more than 1,000 rounds form his room on the 32nd floor
of the Mandalay Bay Resort and Casino, killing 58 and injuring
approximately 500 while using the device.
Maag wrote the DOJ officially announced that anyone who possesses
the devices must either destroy them or surrender them to the ATF
without compensation within a 90-day period, which is considered
ATF's Final Rule. Court records indicate that the 90-day period
began to run on March 26 when the Final Rule went into effect.
Maag alleges the class would be irreparably harmed if the proposed
regulations went into effect, "and thus, this court should enjoin
same, pending a resolution on the merits, and/or remand to the
administrative agency."
According to the class action, Doe has been in possession of one or
more bump-stock or bump firing devices since before Dec. 18, 2018.
He alleges the devices were purchased or acquired in accordance
with all applicable laws, rules, regulations and rulings in effect
at the time they were purchased.
The suit states that Doe seeks to lawfully register the devices in
the National Firearms Registration and Transfer Record. If
registration is legally impossible, then Doe seeks "just
compensation under the Fifth Amendment, for a total regulatory
and/or actual taking."
The suit states that the Department of Justice reports that there
are approximately 500,000 bump fire devices sold legally and
currently in private civilian possession. They are worth
approximately $200 and $500 each.
"In truth and fact, there are likely as many as double that many,
as the DOJ numbers do not [take] into consideration pre-2010
produced devices, which have been sold since at least the 1980s, or
smaller custom manufacturers who copied the devices, all of which
with either express ATF approval, or non-action by the ATF when
made aware of same," the suit states.
Maag wrote that the defendants do not have the authority to
institute an amnesty registration period under the Gun Control Act
of 1968. He asks the court to find that an amnesty registration
period would provide an immunity for registered firearms. He also
asks the court to find that "defendants have abused their
discretion and acted arbitrarily and capriciously."
Maag further seeks an injunction to enjoin enforcement of the rule
for those who possessed a bump-stock "on or before December 18,
2019, and continue to retain possession of same."
The defendants filed an opposition to Doe's motion for preliminary
injunction on April 17, arguing that the Final Rule "corrected a
confusing and erroneous agency interpretation" of the statute
prohibiting the manufacture, sale, and possession of new machine
guns to the public, "to the expected benefit of public safety."
They argue that Doe "cannot satisfy the high standards necessary
for a preliminary injunction because he cannot demonstrate a
likelihood of success on his claims nor that an injunction serves
the public interest. Plaintiff's motion should therefore be
denied."
The defendants also note that their opposition does not waive
"their right to challenge plaintiff's attempt to proceed under the
pseudonym 'John Doe.'"
They argue that federal court rules mandate that all civil actions
be prosecuted under the party's actual name.
"A plaintiff's use of a fictitious name 'runs afoul of the public's
common law right of access to judicial proceedings," the opposition
states.
"The Department of Justice's classification of 'bump-stocks' as
prohibited machine guns and plaintiff's desire to continue to
possess such unlawful weapons after the March 26, 2019, effective
date of the rule challenged in this action does not constitute the
type of 'exceptional circumstances' that 'justify such a departure
from the normal method of proceeding in federal courts,'" it
continues.
Before the defendants answered the complaint, Maag filed a motion
for default on May 22.
He argued that it had been more than 60 days since the defendants
were served with summons. While they had entered their appearance,
the defendants had not filed an answer.
"Counsel for plaintiff has seen similar cases, wherein the
defendants simply never get around to filing an answer, which
complicates the case," the motion stated.
The defendants filed a response on May 23, arguing that Maag's
motion was "both premature and unnecessary."
The response stated that the defendants were served the complaint
on April 1 and had until May 31 to file an answer.
"Defendants intend to answer or otherwise respond to the complaint
on or before that date," the response stated. [GN]
UNITED STATES: FBI Faces Gender Discrimination Class Action
-----------------------------------------------------------
Julia Arciga, writing for Daily Beast, reports that Chelsea* was on
the verge of graduating from the FBI's training academy at Quantico
when she failed her final tactical training test. She and the
others who failed were promised a re-test, she says.
But she never got to retake the exam—instead, she was brought
before the Trainee Review Board and dismissed. A male in her class,
who was also referred to the board, was able to take his re-test
and pass. He's now a Special Agent.
"Your instructors gave you nothing but glowing reviews but you will
still be dismissed," Chelsea recalled FBI Training Division Unit
Chief Kellie Holland telling her.
In a proposed class-action lawsuit, Chelsea -- who asked her name
be changed for this article -- and 15 other women accused the FBI
of fostering a culture that discriminated against women during
training and allowed a "Good Old Boy Network" within its ranks to
"flourish." At best, the women say, they were treated with double
standards during training compared to their male counterparts. At
worst, they claim they were sexually harassed and had their
concerns dismissed completely.
One woman, who chose to remain anonymous in the lawsuit, claimed
four different male trainees attempted to convince her to have sex
with them in the back of their cars or on a vacant building floor.
Instructors told her to smile more, with one allegedly asking other
male trainees for details about her sexual and personal life.
"You own a mirror, you know you're a pretty girl," the trainee's
adviser allegedly told her when she disclosed the harassment,
adding that she needed to "play the game" if she wanted to
succeed.
A current FBI employee also claimed Training Division unit chief
Holland allegedly said there was "nothing" she could do about the
sexual harassment she experienced. "You will be having a lot of
mixed emotions right now, and there is no internal appeal process,"
Holland said, according to the suit.
On top of the accusations of "sexually charged commentary" from
instructors at the academy, trainers allegedly referenced female
stereotypes of women being moody. One male instructor allegedly
said women were unreliable due to them being "too emotional" and
sexually promiscuous. The same instructor also called a female
African-American trainee with braids "spaghetti head," and
"constantly" talked about his "little blue balls," the suit
claims.
Former FBI Director James Comey allegedly told plaintiff Lauren
Rose that discrimination was not happening at the academy despite
her complaints, and told her to use her "pain" to move forward.
Mark Morgan, current acting director of Immigrations and Customs
Enforcement, is also accused of telling Rose he had an issue with
her "attitude" while he was Deputy Assistant Director. Neither man
returned requests for comment.
Ten of the women were discharged from the training academy just
weeks before they were due to graduate, with a number of citations
-- known as "suitability notations" -- allegedly given due to
instructor subjectivity during tactical training. Citations that
knocked the trainee's "candor," "insubordination," and "lack of
emotional maturity" were allegedly handed out to more women than
men. The instructors, who are almost all men, were also accused of
failing to provide "objective guidance" to females and not
punishing male trainees who exhibited similar behaviors.
"It was the only part of Quantico that was so discretionary,"
Chelsea, now a local police officer, said of the tactical training
unit. "You could be handed [notations] like candy."
The women were referred to appear before the Trainee Review Board
-- consisting of several men and one women -- after receiving their
notations. The lawsuit states male trainees are statistically more
likely to be kept in the program or put into the training class
behind them, while women were "almost always recommended for
dismissal." [GN]
UNITED STATES: Young Immigrants Oppose Appeal of DACA Case Ruling
-----------------------------------------------------------------
Martin Macias Jr., writing for Courthouse News Service, reported
that a Justice Department attorney told a Ninth Circuit panel on
June 13 that although existing immigration laws may not outline
when the federal government can remove protections for immigrants
in deportation proceedings, the government still has broad
discretion to do so.
After the Trump administration announced in 2017 that it would
rescind Deferred Action for Childhood Arrivals (DACA) protections
for young immigrants, the American Civil Liberties Union filed a
federal class action to block the plan, which the group says was
done without notice or an opportunity for DACA recipients to
respond.
A federal judge in Los Angeles granted a nationwide block of the
rescission of DACA, which protects immigrant youth from deportation
and allows them to work and go to school in the United States.
The federal government appealed, arguing in court papers that the
court lacked jurisdiction over the immigrants' claims because they
arose from policies codified in the Administrative Procedure Act.
Assistant U.S. Attorney Jeffrey Robins told a Ninth Circuit panel
on June 13 that the government has broad prosecutorial discretion
in DACA cases, including on decisions to strip protections from
recipients or initiate deportation proceedings against them when
they are no longer "a low priority."
Robbins told the panel that the injunction should be lifted because
the lower court incorrectly interpreted federal policy on when
recipients should be notified that their DACA status was revoked.
"Nothing requires that notice be given," Robbins said, adding U.S.
Immigration and Customs Enforcement or U.S. Customs and Border
Protection agents have always had discretion to determine when a
DACA recipient's status is revoked.
U.S. Circuit Judge Kim McLane Wardlaw, a Bill Clinton appointee,
said she was doubtful that federal policy allows ICE agents to
"speed up" determinations that a DACA recipient is now seen as an
enforcement priority.
"I know a lot about this and this sounds new to me," Wardlaw said.
U.S. Circuit Judge Jay Bybee, a George W. Bush appointee, told
Robbins that federal policies do not clearly explain what authority
any agency has to strip DACA recipients of protections when a
notice to appear is issued.
"Your argument doesn't match up with the regulations. It seems to
me that the government does whatever it darn well pleases," Bybee
said, adding the government's promise of DACA protections "feels
like a hollow promise."
Katrina Eiland, an attorney for appellee Inland Empire Immigrant
Youth Collective, said the injunction should remain since class
members lack criminal convictions or other circumstances that would
disqualify them from DACA under existing policies.
The injunction doesn't prevent the government from pursuing
deportation of any class member -- nor does it challenge discretion
to determine DACA status -- but rather requires immigration
agencies to follow the proper DACA policies.
Eiland said the government's actions appear "arbitrary" since
current policy allows DACA protections to be stripped when a
recipient is deemed a public safety threat or when they don't
respond to a notice to appear.
In court papers opposing the government's appeal, attorneys for
young immigrants said the Ninth Circuit panel should decide whether
U.S. Citizenship and Immigration Services violated its own policy
of keeping its DACA termination decision "separate and independent"
from the notices to appear issued by ICE or CPB agents.
"It is USCIS's determination that is subject to the agency's own
nondiscretionary rules -- rules that can and should be enforced in
court," the group's opposition said.
U.S. Circuit Judges John Owens, a Barack Obama appointee, rounded
out the panel, which did not indicate when it will rule.
UPS STORE: Court Grants Bid to Certify Question to SJC
------------------------------------------------------
The United States District Court for the District of Massachusetts
issued a Memorandum and Order granting Defendant’s Motion to
Certify Question in the case captioned KEVIN RICHARDSON II, and All
Others Similarly Situated, Plaintiff, v. THE UPS STORE, INC. and
J&V LOGISTICS LLC, Defendants. Civil Action No. 18-cv-12338-ADB.
Presently before the Court is Defendants' motion to certify a
question to the Massachusetts Supreme Judicial Court(SJC).
Plaintiff Kevin Richardson II (Richardson) brings this putative
class action lawsuit against The UPS Store, Inc. (UPS Store) and
J&V Logistics LLC (J&V, Defendants) to recover for notarization
charges that he claims violated a Massachusetts statutory maximum
of $1.25 per notarization. Richardson asserts that Massachusetts
General Laws chapter 262, Section 41 (Chapter 262, Section 41)
establishes a $1.25 maximum charge for notarizations.
The Defendants maintain that the $1.25 maximum is specific to the
now obsolete practice of noting dishonored commercial paper or
other bills, which was, long ago, a common practice associated with
protesting dishonored commercial paper.
The SJC may answer questions of law certified to it by a United
States District Court when requested by the certifying court where
the question of Massachusetts law may be determinative of the cause
then pending in the certifying court and as to which it appears to
the certifying court [that] there is no controlling precedent in
the decisions of the SJC. Certification of questions to the highest
court of a state is likewise permissible as a matter of federal
judicial discretion where the question is potentially case
dispositive and no controlling precedent exists.
Here, the requirements for certifying a question to the SJC are
met. The parties' dispute centers on the meaning of the last
nineteen words of Chapter 262, Section 41, which provides:
The fees of notaries public shall be as follows: For the protest of
a bill of exchange, order, draft or check for non-acceptance or
non-payment, or of a promissory note for non-payment, if the amount
thereof is five hundred dollars or more, one dollar; if it is less
than five hundred dollars, fifty cents; for recording the same,
fifty cents; for noting the non-acceptance or non-payment of a bill
of exchange, order, draft or check or the non-payment of a
promissory note, seventy-five cents; and for each notice of the
non-acceptance or non-payment of a bill, order, draft, check or
note, given to a party liable for the payment thereof, twenty-five
cents; but the whole cost of protest, including necessary notices
and the record, if the bill, order, draft, check or note is of the
amount of five hundred dollars or more, shall not exceed two
dollars, and if it is less than five hundred dollars, shall not
exceed one dollar and fifty cents; and the whole cost of noting,
including recording and notices, shall in no case exceed one dollar
and twenty-five cents.
Richardson's lawsuit is premised on his assertion that the charges
in excess of $1.25 that he incurred exceeded the statutory maximum.
If Chapter 262, Section 41 does not establish a $1.25 maximum for
the notarial acts at issue, this lawsuit will almost certainly
conclude in Defendants' favor.
The question of whether Massachusetts law establishes a $1.25
maximum for all notarial services therefore may be determinative of
the cause.
The Court is unaware of any controlling precedent from the SJC or
the First Circuit on this question. Further, it has found no
persuasive authority from any lower courts. The case law that
Richardson marshals in support of his argument that Chapter 262,
Section 41 establishes a $1.25 maximum for notarizations is
comprised of the equivocal assertion from the Superior Court in
this case that the statute potentially limits notary public fees
for all notary services, a sentence in a dissent from a 1987 SJC
opinion, and a stipulated conclusion of law that was entered
pursuant to a joint motion in a 2012 Suffolk County Superior Court
case.
Instead, the Defendants point to the history of Chapter 262,
Section 41 and a significant body of secondary sources that seem to
conclude that Massachusetts does not have a maximum fee for
non-protest-related notarial services. The Court is satisfied
considering the dispositive nature of the issue, the contradictory
conclusions of secondary sources, and the complete absence of
binding precedent or persuasive judicial authority that the
question at issue presents a question of state law that warrants
certification to the SJC.
The Court therefore will exercise its discretion to certify a
question to the SJC on the proper interpretation of Chapter 262,
Section 41.
Accordingly, the Court certifies the following question to the
Massachusetts Supreme Judicial Court:
Does Massachusetts General Laws Chapter 262, Section 41 or 43
proscribe fees in excess of $1.25 for notarization of a document
where the notarial act at issue is unrelated to the protest of a
bill of exchange, order, draft or check for non-acceptance or
non-payment, or of a promissory note for non-payment?
A full-text copy of the District Court's June 24, 2019 Memorandum
and Order is available at https://tinyurl.com/y2n9q66h from
Leagle.com.
Kevin Richardson, II, All Others Similarly Situated, Plaintiff,
represented by Orestes G. Brown, Metaxas Brown Pidgeon LLP & Bailey
Nowak Buchanan, Metaxas Brown Pidgeon LLP, 900 Cummings Ctr Ste 207
T Beverly, MA, 01915-6121
The UPS Store, Inc., Defendant, represented by Daniel E. Rosenfeld
-- daniel.rosenfeld@dlapiper.com -- DLA Piper US LLP & Paul B.
Lewis -- paul.lewis@dlapiper.com - DLA Piper US LLP.
J&V Logistics LLC, Defendant, represented by Nicholas J. Scobbo --
nscobbo@ferriterscobbo.com -- Ferriter Scobbo & Rodophele PC.
VALE: Faces Class Actions Following Tailings Dam Burst
------------------------------------------------------
David McKay, writing for miningmx, reports that mining companies
globally published details of their tailings depositions on June 7
in compliance with demands issued by the Church of England Pensions
Board and the Swedish Council on Ethics.
Consciousness about the imprint of mining in modern society is on
the increase. The tailings reports follow the Fundao disaster in
2015 in which 19 people were killed after a tailings dam burst. The
operators, Vale and BHP Billiton through the Samarco joint venture,
are facing class action suits involving 30,000 participants,
including 300 institutions.
The rupture of Vale's Brumadinho tailings facility some three years
later in January 2019 which left 186 confirmed dead and 122 missing
has raised popular consciousness further and in such a way that
mining will not be the same. The Brazilian Environmental Agency
said the mudflow destroyed 270 hectares of which more than half was
native vegetation or protected forest, equal to 300 football
pitches.
Following the tailings dams disasters investors controlling more
than $10 trillion in assets from 96 investment groups globally
asked the top mining companies to disclose how they manage their
tailings facilities.
"My sense is that Brumadinho is going to be a key moment for the
sector," said Adam Matthews, director of ethics and engagement at
the Church of England Pensions Board in an interview with the
Financial Times. "We simply should not be having disasters such as
this," he told the newspaper earlier this year.
Awareness about mining's footprint isn't, of course, restricted to
tailings. "In the last five years, there have been a rising number
of disruptive events on mines relating to environmental or social
impact," said Roger Dixon, corporate consultant, SRK Consulting.
"These range from catastrophic tailings dam failures to violent
community protests -- in some cases leading even to the closure or
cancellation of projects. The financial losses have gone
hand-in-hand with considerable reputational damage," he said.
Growing indexation heightens the financial risk of failing to run
mines. No matter how profitable a mining company may be, regardless
of how regularly it hits any of its output or cost guidances, it
won't attract funds that fear a risk of ESG failure.
So far, the industry isn't winning. PwC, a consultancy, said in its
2019 Mine Survey published in June that investors tended to ignore
the improved financial performance of the world's top 40 mining
companies, including record dividend payments totalling $43bn. Why?
According to PwC, the investment market just doesn't buy into
'Brand Mining'.
"To restore faith in 'brand mining', leading miners need to prove
they are keeping up with the pace of change. As an industry, this
means transforming their reputation as efficient 'converters of
dirt' to prominent builders of both economic and societal capital,"
PwC said. [GN]
VARNELL AND WARWICK: Obtains Favorable Ruling in Class Actions
--------------------------------------------------------------
Frank Stanfield, writing for Daily Commercial, reports that the
U.S. Supreme Court has issued an opinion on class-action lawsuits
in favor of local law firm Varnell and Warwick Associates.
Class-action suits allow individuals to band together to sue big
corporations, something individuals often cannot afford to do on
their own.
"In the end, it . . . it was not fighting over whether it was a
good claim, enough evidence or a good case," said Janet Varnell.
"It was a battle over whether state courts can be trusted to handle
cases that they have been handling for hundreds of years."
Citibank, N.A., filed a debt-collection action in North Carolina
state court against George Jackson. He countersued in a third-party
class-action suit claiming that Home Depot U.S.A. Inc., and
Carolina Water Systems Inc., were engaging in unfair and deceptive
trade practices involving illegal sales referrals.
Home Depot wanted to move the case to federal court. Varnell and
Warwick argued that the building supply company could not have the
case moved under class-action law.
It was a highly complex case involving third-party suits, at one
point going so far as to explore the definition of "defendant."
"The reason that we won that battle over state versus federal court
is because our position has been the law for more than 40 years,"
Varnell said.
Justice Samuel Alito wrote the dissenting opinion.
"The rule of law requires neutral forums for resolving disputes,"
he wrote. "Courts are designed to provide just that. But our legal
system takes seriously the risk that for certain cases, some
neutral forums might be more neutral than others. Or it might
appear that way, which is almost as deleterious. For example, a
party bringing suit in its own state's courts might (seem to)
enjoy, so to speak, a home court advantage against outsiders."
Alito noted that defendants cannot have a case moved unless they
meet certain requirements. "Some of those conditions have long made
important (and often costly) consumer class actions virtually
impossible to remove. Congress, concerned that state courts were
biased against defendants to such actions, passed a law
facilitating their removal."
That law was the Class Action Fairness Act of 2005, he noted.
"What is most concerning to me is to see the dissent imply a
defendant might not get a fair and unbiased trial in state court,"
Varnell said.
"It is shocking that Justice Alito and the other conservative
members of the court would further this myth at a time when
Americans so clearly distrust our governmental institutions. This
is the new normal. Supreme Court justices willing to contort
long-existing law to protect big business at the expense of
confidence in our system of justice."
Conservative Justice Clarence Thomas joined with liberals Ruth
Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan to
form the majority. Alito was joined in the minority opinion with
Chief Justice John Roberts and justices Neil Gorsuch and Brett
Kavanaugh.
Citibank dropped its claim against Jackson, and he dropped the
finance company from the case.
The lawsuit alleges that Home Depot and its partners lied to people
by telling them that the water in their area would cause cancer in
order to sell them a water treatment system priced nearly 10 times
higher than its value, lied about the finance terms, and lied about
the referral system that was supposed to reduce the price.
The law firm partners with lawyers across the nation in
class-action suits. It describes itself on its website as "a
champion of the public interest," created to "protect people and
the environment, challenge government, corporate and individual
wrongdoing and increase access to justice."
Varnell is a 1984 graduate of Leesburg High School. She is married
to her law partner, Brian Warwick. [GN]
VOLKSWAGEN GROUP: Shut-Out Lawyers File Certiorari Petition
-----------------------------------------------------------
Alison Frankel, writing for Reuters, reports that lawyers who were
shut out of fees in the Volkswagen "clean diesel" car class action
are taking their bid to get paid to the U.S. Supreme Court with an
intriguing argument: Their clients were denied due process because
of restrictions on who shared in a $175 million pot of attorneys'
fees.
Last January, as reported, the 9th U.S. Circuit Court of Appeals
affirmed a decision by the judge overseeing the VW clean diesel
litigation, U.S. District Judge Charles Breyer of San Francisco, to
award fees only to plaintiffs' firms in the leadership team
designated by court-appointed VW class counsel Elizabeth Cabraser
of Lieff Cabraser Heimann & Bernstein. The appeals court agreed
with Judge Breyer that work performed by lawyers outside of the
leadership team did not benefit the class as a whole so those
lawyers could not share in the $175 million fee award paid by
Volkswagen.
The appeals court acknowledged that lawyers representing individual
class members "dutifully and conscientiously represented their
clients" before the VW case was consolidated by the multidistrict
litigation panel and subsequently settled as a class action. But
the court said the lawyers hadn't shown that their work in the
early phases of the litigation contributed to the eventual $10
billion classwide settlement or that their post-settlement advice
to individual VW owners benefited the class.
Judge Breyer, the 9th Circuit said, acted within the bounds of his
discretion when he established the rules for compensation in a
series of pre-trial orders and applied those rules to deny fees to
lawyers outside of the leadership group.
But according to the certiorari petition by the shut-out lawyers,
the 9th Circuit created a conflict between their clients and fellow
class members who were individually represented by lawyers who will
collect a piece of the $175 million fee award. Their theory is that
their clients, who may still owe attorneys' fees under contingency
fee agreements, are worse off than class members who signed
individual contracts with lawyers who were awarded fees. The
appellate ruling, wrote counsel of record Bruce Nagel of Nagel
Rice, "prefers" one set of class members over another -- a
violation of "fundamental due process and fairness to the
plaintiffs represented by non-class counsel."
The petition claimed that by excluding non-class counsel from
court-awarded fees, the 9th Circuit created a conflict with the
10th Circuit's 1994 decision in Gottlieb v. Barry and the 3rd
Circuit's 2005 In re Cendant. The 9th Circuit had a different view
of Cendant in its opinion excluding non-class counsel from fees,
writing that Cendant stands for the proposition that lawyers should
not be paid by a class unless they have done work that benefits the
class as a whole, not just individual class members.
Nagel Rice also argued that Supreme Court precedent on intra-class
conflict -- notably in 1997's Amchem v. Windsor and 1999's Ortiz v.
Fibreboard -- precludes the award of attorneys' fees to lawyers for
some class members but not others. That struck me as an intriguing
argument. And the VW litigation isn't the only one in which clients
signed individual contingency fee deals with plaintiffs' lawyers in
cases that ended up being settled as class actions. You may recall,
for instance, that in December, in the billion-dollar multidistrict
litigation over genetically modified Syngenta corn seeds, U.S.
District Judge John Lungstrum of Kansas City nullified all
individual contingency fee agreements, holding that all attorneys
in the case would be paid from a $500 million pot set aside for
lawyers' fees. (That decision is on appeal.)
Samuel Issacharoff of New York University, who argued for VW class
counsel at the 9th Circuit, declined to comment on the certiorari
petition by lawyers excluded from class fees. Sharon Nelles of
Sullivan & Cromwell said in an email that, as the 9th Circuit has
recognized, "non-class counsel did not provide legal services for
the benefit of the class that would have entitled them to payment
of class-counsel fees under the terns of the court-approved class
action settlement agreement."
Reuters' Ms. Frankel also reached out to University of Georgia law
professor Elizabeth Burch, author of the just-published "Mass Tort
Deals: Backroom Bargaining in Multidistrict Litigation," to ask
what she thought of the Amchem argument asserting that the 9th
Circuit ruling created a conflict among class members. As her book
title suggests, Burch's expertise is in the clubby world of MDL
leadership. In general, she's wary of entrenching the old guard. I
wasn't surprised that in an email, she said she frowns on
agreements to award fees only to lawyers hand-picked by class
counsel. "Those deals are a dirty business that seem to favor the
in crowd of repeat players," she said.
But Burch added that she doesn't believe the VW case fits the
Supreme Court's proscription in Amchem and Ortiz. In those cases,
she said, the court's concern was conflicts between class members
as settlements were being negotiated. (Specifically, you'll recall,
the Supreme Court held that courts can't approve class settlements
binding class members with conflicting interests unless the groups
each have their own counsel.) In VW, Burch said, any conflict
between class members whose lawyers were awarded fees and those
whose lawyers were excluded from the fee award arose only after the
settlement.
"Unless class counsel did something to favor their own clients over
the clients of others pre-settlement -- on grounds that have
nothing to do with the merits of their respective claims -- then I
don't see this as an Amchem or Ortiz issue," Burch said in an
email.
"The odds are always against the Supreme Court taking a case. But I
do think this petition shows the increasing heat over fees in mass
litigation that's resolved through class action settlements. These
disputes raise tough issues -- and eventually, I suspect the
Supreme Court will have something to say about them," Ms. Frankel
said. [GN]
WALLGREENS BOOTS: Bid to Dismiss Illinois Class Action Suit Pending
-------------------------------------------------------------------
Walgreens Boots Alliance, Inc. said in its Form 10-Q Report filed
with the Securities and Exchange Commission on June 27, 2019, for
the quarterly period ended May 31, 2019, that the motion to dismiss
the securities class action suit in the Northern District of
Illinois remains pending.
On April 10, 2015, a putative shareholder filed a securities class
action in federal court in the Northern District of Illinois
against Walgreen Co. and certain former officers of Walgreen Co.
The action asserts claims for violation of the federal securities
laws arising out of certain public statements the Company made
regarding its former fiscal 2016 goals.
On June 16, 2015, the Court entered an order appointing a lead
plaintiff. Pursuant to the Court's order, lead plaintiff filed a
consolidated class action complaint on August 17, 2015, and
defendants moved to dismiss the complaint on October 16, 2015.
On September 30, 2016, the Court issued an order granting in part
and denying in part defendants' motion to dismiss. Defendants filed
their answer to the complaint on November 4, 2016 and filed an
amended answer on January 16, 2017. Plaintiff filed its motion for
class certification on April 21, 2017.
The Court granted plaintiffs' motion on March 29, 2018 and merits
discovery is proceeding. On December 19, 2018, plaintiffs filed a
first amended complaint and defendants moved to dismiss the new
complaint on February 19, 2019. The motion has been fully briefed.
Walgreens Boots Alliance, Inc. operates as a pharmacy-led health
and wellbeing company. It operates through three segments: Retail
Pharmacy USA, Retail Pharmacy International, and Pharmaceutical
Wholesale. Walgreens Boots Alliance, Inc. was founded in 1901 and
is based in Deerfield, Illinois.
WALLGREENS BOOTS: Bid to Dismiss Rite Aid Merger Suit Denied
------------------------------------------------------------
Walgreens Boots Alliance, Inc. said in its Form 10-Q Report filed
with the Securities and Exchange Commission on June 27, 2019, for
the quarterly period ended May 31, 2019, that the court has denied
the Company's motion to dismiss the federal action.
The Company was aware of two previously disclosed putative class
action lawsuits filed by purported Rite Aid stockholders against
Walgreens Boots Alliance and certain of its officers regarding the
transactions contemplated by the original merger agreement between
the Company and Rite Aid (prior to its amendment on January 29,
2017) (such transactions, the "Rite Aid Transactions").
One of the Rite Aid actions was filed in the State of Pennsylvania
in the Court of Common Pleas of Cumberland County (the
"Pennsylvania action") and primarily alleged that Walgreens Boots
Alliance and one of its subsidiaries aided and abetted certain
alleged breaches of fiduciary duty by the board of directors of
Rite Aid in connection with the Rite Aid Transactions. This action
was terminated by the court for lack of prosecution in December
2018.
The other action was filed in the United States District Court for
the Middle District of Pennsylvania (the "federal action") and
alleges, among other things, that the Company and certain of its
officers made false or misleading statements regarding the Rite Aid
Transactions.
The court denied the Company's motion to dismiss the federal
action.
Walgreens Boots Alliance, Inc. operates as a pharmacy-led health
and wellbeing company. It operates through three segments: Retail
Pharmacy USA, Retail Pharmacy International, and Pharmaceutical
Wholesale. Walgreens Boots Alliance, Inc. was founded in 1901 and
is based in Deerfield, Illinois.
WORKPAC PTY: Colin Biggers Attorney Discusses Class Action Ruling
-----------------------------------------------------------------
Michael Russell, Esq., of Colin Biggers & Paisley, in an article
for Mondaq, reports that in brief -- Employers are the subject of a
wave of class action litigation at a time when the state of play is
less certain than ever before. (Some) litigation funders are
excited, but perhaps all is not what it seems
I THE STAGE IS SET
At one level a perfect storm confronts Australian employers.
Traditional employment structures are under significant threat,
whilst at the same time litigation funders are attracting
unprecedented levels of capital for Australian litigation.
Entrepreneurial litigation funders and plaintiff firms have jumped
in whilst larger funders have remained on the sidelines. The
restraint being exercised is potentially telling.
II THE "PERFECT STORM" - PART 1
In Workpac Pty Ltd v Skene [2018] FCAFC 131, the Full Federal Court
determined that Mr Skene, who was hired as a casual employee, was
entitled to entitlements of a full-time employee, such as sick pay
and annual leave. The Court ruled that Mr Skene was not a casual
employee as a matter of law, irrespective of how Mr Skene was
originally engaged or the label that was used to describe his
employment.
The media portrayed the decision as a "landmark" with potentially
"dynamite" consequences for Australian employers. This is because
many will say that the decision is at odds with a large body of
previous case law and traditional understandings of employment law
in Australia.
II THE "PERFECT STORM" - PART 2
Over the past two decades litigation funding in Australia has seen
incredible growth. That growth has largely been spurred by the high
success and enormous returns in investor class actions such as
shareholder claims, where settlements can see eight to nine figure
returns to funders.
In recent years many new litigation funders have arrived from
overseas with large amounts of capital to invest in new cases. The
amount of competition, for relatively limited funding
opportunities, has seen increases in both new class actions being
commenced (including competing class actions) and new areas of law
being considered as funding opportunities.
In pursuit of new opportunities, a series of funded class actions
were commenced in 2018. Workpac v Skene has only served to increase
speculation that class actions in the employment space will become
the norm.
III SIDELINING WHILST DOUBTS EXIST
Most of the employment class actions to date have been commenced by
less traditional funders and smaller plaintiff firms. The older
Australian funders and larger firms have seemingly been content to
watch from the sidelines pending the viability and economics of
employment class actions becoming better understood.
The doubts that exist over employment class actions are several and
significant:
The authority in Workpac v Skene is under threat from new legal
challenges and government intervention. Already we have seen the
Commonwealth Government signal its intentions by formally
supporting legal challenges and introducing regulation to water
down the impacts of the decision. Workpac v Skene is likely to get
a further shake-up post the Federal elections in 2019.
Employment class actions are being challenged at a structural level
with de-classing applications and appeals being pursued to explore
whether class actions are the appropriate vehicle for employment
claims, where the nature of the employment relationship between
employer and employee is often seen as requiring a high degree of
factual inquiry of each and every specific relationship. Employment
class actions don't carry the same beneficial characteristics of
shareholder class actions, such as notions of indirect reliance
that have the effect of automatically raising the levels of
commonality between group members to class action suitability.
The economics of employment class actions are nowhere near fully
understood. In shareholder and investor class actions the potential
size of a damages case can be readily quantified, often from public
documents and disclosures. Employment class actions lack
transparency, meaning that each class action runs considerable risk
that any returns will not meet the required returns of investment.
Funders also have to worry about how the costs of employment class
actions will be dealt with by the Courts, including on applications
for security for costs. Traditional no-cost jurisdictions are
likely to be challenged by class action defendants and government
intervention.
The dynamics for resolution of employment class actions are
considerably different from shareholder and investor class actions.
Critically, unlike shareholder and investor claims, where the
claims are often made against well capitalised and insured publicly
listed entities for commonly insurable claims, the nature and
insurability of employment claims means that solvency of class
action defendants is a risk for litigation funders. Additionally,
funders can't simply assume that insurance exists to fund
resolutions, a key feature and reason for settlements in
shareholder and investor claims.
The above issues are likely to explain the level of caution being
exercised by traditional funders and large plaintiff firms.
IV WHERE TO FROM HERE
Whilst litigation funders have a piqued interest in employment
class actions, there remains considerable risks and unknowns to
warrant a further avalanche of class actions. This is especially
the case for traditional litigation funders looking to maintain a
consistent risk profile.
Most importantly, employers should not panic, but rather, proceed
with caution and take advice on how to protect against class action
risk whilst considerable steps are being taken, both at a court and
government level, to manage and reduce the threats created by
Workpac v Skene for current and future class action defendants.
[GN]
WV UNIVERSITY: High Court Ruling May Impact Future Class Actions
----------------------------------------------------------------
Chris Dickerson, writing for West Virginia Record, reports that a
state Supreme Court ruling could change the way state courts have
to look at certifying classes in potential class-action lawsuits.
In a June 5 opinion, the justices ruled that a Monongalia Circuit
Court judge exceeded his powers by certifying a class "while
failing to conduct a sufficiently thorough analysis of the case to
determine whether the commonality required for class certification
. . . is present."
The justices remanded the case back to Circuit Judge Phillip D.
Gaujot, urging him to determine if the requirements for a class are
met and, if so, to "craft a class definition consistent with such
findings."
In the underlying cases, two men -- Christopher Thomack and Joseph
Michael Jenkins -- were injured in separate accidents. They filed
lawsuits in Monongalia Circuit Court, and their attorneys requested
copies of the men's medical records from West Virginia University
Hospitals Inc. and West Virginia United Health System Inc.
Thomack's attorney was charged $514.40 for his medical records by
WVUHS, and Jenkins' attorney was charged $656.80. Those totals were
40 cents per page plus a $10 processing fee. WVUHS charged by the
page even though the records were provided as images on a computer
disc.
Both thought the fees were illegal. They filed lawsuits about the
fees in Monongalia Circuit Court in 2013. The cases were
consolidated. The next year, they filed an amended complaint
seeking class-action status.
The hospitals argued that commonality as "the crux of the case" and
asked the circuit judge to "look at . . . the kind of proof that's
going to be necessary for (the class plaintiffs) to prevail." While
all of the plaintiffs were charged 40 cents per page and the $10
processing fee, the hospitals believed commonality was absent.
Still, Gaujot certified the class on April 16, 2014, and the class
definition was modified in 2015.
But in 2017, the state Supreme Court issued two decisions regarding
commonality that the hospitals argued "undercut the circuit court's
class certification decisions." The hospitals moved to decertify
the class because Jenkins had yet to pay his attorney for the cost
of obtaining the medical records. They also were critical again of
the commonality issue.
Gaujot denied the motion to decertify the class on Feb. 23, 2018.
But the class definition was modified again to include attorneys
"who have requested and paid for medical records on behalf of their
patient clients."
The hospitals filed their writ of prohibition with the state
Supreme Court on Oct. 1, 2018 challenging Gaujot's Feb. 23 order.
They argued that the class lacks the features of commonality and
ascertainability as required by Rule 23 of the West Virginia Rules
of Civil Procedure.
To be certified as a class, a circuit court must decide if the
parties satisfy all four prerequisites of Rule 23 -- numerosity,
commonality, typicality and adequacy of representation.
"That does not mean, however, that certification determinations are
perfunctory," Justice Tim Armstead wrote in the opinion. "The
plaintiff or defendant who proposes certification bears the burden
of proving that certification is warranted. The circuit court must
give careful consideration to whether the party has met that
burden."
In this case, Armstead writes, the determination of commonality
necessarily required a review of the alleged harm suffered by the
plaintiffs.
"(Thomack and Jenkins) believe -- and the circuit court agreed with
them -- that the hospitals' uniform charging practices violated
(state code)," the opinion states. ""They concede that some
individualized proof may be necessary to determine damages, but
they believe that the core issue of liability may be determined by
aggregate proof.
"The hospitals repeatedly challenged this assertion. On their
reading of the statute, individualized proof will be necessary to
determine not just damages but liability itself."
Essentially, the hospitals argued that each request for medical
records will have to be examined to decide if they charged more
than "all reasonable expenses incurred in complying."
"The statute is framed such that liability and damages are two
sides of the same coin, and we fail to see how a plaintiff could
prove that a charge exceeded actual expenses, thus, establishing
liability, without also proving by how much the charge exceeded
actual expenses, and thereby establishing the amount of damages,"
the opinion states. "A charge of $400 might be lawful for one
request and unlawful for another.
"The fact that the hospitals charged all class member by the page
(or by the image) does not change the statute or the fact that the
statute's terms define the boundary between lawful and unlawful
charges."
The justices say these questions must be decided by the circuit
court.
"It does not appear that the circuit court has addressed the
question of commonality with sufficient factual findings and
conclusions to allow us to conclude that its certification decision
and subsequent refusal to decertify the class were a product of 'a
thorough analysis,'" the opinion states. "The circuit court
persisted in finding commonality without ever truly addressing the
hospitals' arguments or indicated with clarity the rational for
such findings.
"We find that the circuit court exceeded its jurisdiction by
failing to conduct a sufficiently thorough analysis of whether the
commonality for class certification . . . is present," Armstead
wrote. "Accordingly, we grant the writ of prohibition as moulded,
vacate the circuit court's order denying the hospitals' motion to
decertify the class and remand this case for further actions
consistent with this opinion."
Marc Williams, one of the attorneys representing the hospitals in
this case, was pleased with the ruling.
"We're gratified that the Supreme Court of Appeals has unanimously
held that the standards for class certification in state courts
should be more in line with the federal courts," said Marc
Williams, managing partner of Nelson Mullins in Huntington. "It
increases predictability for litigants on both sides."
Williams has long argued that the state's class actions laws need
to be a little more in line with other states and with federal
courts.
"The biggest problem with how our Supreme Court deals with class
actions is that they insist on applying an old standard for
certification that makes it almost a fait acompli that a class will
be certified," Williams told The West Virginia Record last year
when talking about another class certification issue. "This
hyper-liberal standard for certification makes us an outlier in
comparison to how class certification is dealt with in the federal
courts and in other state courts."
Williams has said the state has relied on a 2003 state Supreme
Court ruling that makes it too easy to get a class certified.
Written by former Justice Larry Starcher, the 2003 Rezulin ruling
requires that the party seeking class certification show that
"there are questions of law or fact common to the class."
A common nucleus of operative fact or law is usually enough to
satisfy the commonality requirement. The threshold of "commonality"
is not high, and requires only that the resolution of common
questions affect all or a substantial number of class members.
"Federal rules are harder on what it takes to certify a class,"
Williams said. "In West Virginia, it's basically a rubber stamp."
Williams said the trend, starting with the U.S. Supreme Court, has
been "to require a more rigorous showing that there are not only
common questions at play, but common answers to those questions."
"Further, when individualized proof is required to make the case of
liability, the Supreme Court has made clear that class
certification is improper," Williams said. "Unfortunately, our
Supreme Court of Appeals has been reluctant to follow this clear
trend. As a result, trial judges are very reluctant to deny
certification, even when individualized proof drives the
determination of liability.
"Normally there has to be a common issue that covers each of the
claims making it appropriate to consider as a collective action.
The Rezulin ruling says that virtually any common claim is
sufficient to justify class certification."
And once it is certified as a class, Williams said it often is too
late.
"In class actions, once a class is certified, it usually resolves,
because the risks are too great to take the case to trial," he
said. "So all of the fight is on the issue of certification. State
court class actions in West Virginia are almost always certified."
Williams said that isn't the case in federal court.
"The U.S. Supreme Court has made it clear in a line of cases over
the last decade that certification should be only approved when
there are not only common questions in a case, but common answers
to those questions," Williams said. "Justice (Antonin) Scalia in
the Walmart v. Dukes case said that certification should be
narrowly construed and that the commonality factor … requires
that any individualized proof on liability precludes
certification."
Representing the hospitals in this case were Williams, Alexander L.
Turner and Christopher D. Smith of Nelson Mullins as well as
Christine S. Vaglienti of WVU Hospitals. Representing the potential
class were David E. Goddard and Edmund L. Wagoner of Goddard &
Wagoner in Clarksburg, Christopher J. Regan and Laura P. Pollard of
Bordas & Bordas in Wheeling as well as David J. Romano and Jennifer
L. Finch of Romano Law Offices in Clarksburg.
Chief Justice Beth Walker, who worked for WVU Health Systems prior
to joining the court, and Justice Margaret Workman recused
themselves from the case. Circuit Judges Joseph Reeder of Putnam
County and Jacob Reger of the 26th Circuit (Lewis and Upshur
counties) heard the case in their place.
West Virginia Supreme Court of Appeals case number 18-0841 [GN]
WV UNIVERSITY: Nelson Mullins Comments on Class Certification
-------------------------------------------------------------
Nelson Mullins issued the following announcement:
West Virginia Managing Partner Marc Williams, with assistance from
associate Chris Smith, represented West Virginia University
Hospitals Inc. and West Virginia United Health System Inc. in a
case that could ultimately change the way state courts must look at
certifying classes in potential class-action lawsuits.
In a June 5 opinion, the Supreme Court of Appeals of West Virginia
unanimously ruled that a Monongalia Circuit Court judge exceeded
his powers by certifying a class "while failing to conduct a
sufficiently thorough analysis of the case to determine whether the
commonality required for class certification … is present." The
Court found that on the issue of the commonality of the claims, the
Court should have applied a standard espoused by the United States
Supreme Court in a 2011 case. The Court remanded the case to the
circuit court judge, urging him to determine if the requirements
for a class are met and, if so, to "craft a class definition
consistent with such findings."
"We're gratified that the Supreme Court of Appeals has unanimously
held that the standards for class certification in state courts
should be more in line with the federal courts," Williams said. "It
increases predictability for litigants on both sides."
Williams has long argued that the state's class actions laws need
to be a little more in line with other states and with federal
courts. [GN]
YOON JI-OH: Faces Class Action Over Jang Ja-Yeon Case Donation
--------------------------------------------------------------
Kim Arin, writing for Korea Herald, reports that Yoon Ji-oh, who
claimed to have been a witness to the sexual abuse and corruption
scandal surrounding late actress Jang Ja-yeon, is facing a lawsuit
from people who donated funds to help pay for her protection,
according to a law firm on June 5.
The Seoul-based law firm Law & Us said the donation totaled around
10 million won ($8,500), collected from some 370 individuals.
On March 18, Yoon posted on Instagram that she would receive
donations and provided her bank account information. She cited
"personal security service costs to be used against safety threats"
as purpose for the fund.
Yoon left for Canada on April 24 and has stayed there ever since.
Two days later, she was sued by Kim Soo-min, a writer who helped
with the publication of Yoon's memoir documenting the 10 years
since Jang's death, for "deceiving the public and raising profit
through donation."
Jang committed suicide in 2009, leaving behind a note in which she
claimed her agency forced her to provide sexual services to
high-ranking corporate executives and entertainment industry
figures. Yoon was signed by the same agency at the time. [GN]
YRC INC: Court OKs $700K Class Settlement in Hogue Suit
-------------------------------------------------------
The United States District Court for the Central District of
California, Eastern Division, issued an Order granting Plaintiff
Ramone Hogue's Motion for Final Approval of Class Action
Settlement, and for Attorneys' Fees and Costs and Class
Representative's Service Award in the case captioned RAMONA J.
HOGUE, individually and on behalf of all others similarly situated,
Plaintiff, v. YRC, INC. d.b.a. YRC FREIGHT, and DOES 1 through 20,
Defendants. Case No. EDCV 16-01338-CJC(JEMx). (C.D. Cal.).
The Court, having considered the motions of Plaintiff Ramone Hogue
(Plaintiff) for Final Approval of Class Action Settlement, and for
Attorneys' Fees and Costs and Class Representative's Service Award,
and good cause appearing, hereby GRANTS final approval of the
settlement as provided by the Class Action Settlement Agreement.
The Court makes final the conditional class certification contained
in the Preliminary Approval Order, and thus makes final for
purposes of the Settlement Agreement the certification, pursuant to
FRCP 23(g)(1)(A), of a class consisting of:
All line haul drivers employed by YRC who held California
drivers' licenses and whose home terminals were in California, and
who were paid, in whole or part, on the basis of a certain amount
of cents per mile, during the period from May 9, 2012 thought
August 7, 2017 (the Class Period) at the terminal at which the
Class Member worked.
The Court finds that the Settlement Agreement is fair, reasonable,
and adequate as to the Class, Plaintiff and Defendant, and is the
product of good faith, arm's-length negotiations between the
parties, and further, that the Settlement Agreement is consistent
with public policy, and fully complies with all applicable
provisions of law.
Accordingly, the Court finally and unconditionally approves the
Settlement Agreement pursuant to FRCP 23(e)(1), and specifically:
a. Approves the Gross Settlement of $700,000
b. Approves payment of up to $13,000 to CPT Group, the
Settlement Administrator
c. Approves the Class Representative incentive award of $10,000
to Plaintiff.
d. Approves an award of attorneys' fees in the amount of
$210,000 and costs in the amount of $20,825.30
e. Approves the allocation of $20,000 as payment for penalties
under the California Labor Code Private Attorney Generals Act
(PAGA), and further approves of payment of $15,000 to the Labor and
Workforce Development Agency for its portion of the PAGA
penalties.
f. Approves the State of California's Unclaimed Property Fund as
the beneficiary for uncashed checks in the name of each Class
Member who does not cash his or her check.
A full-text copy of the District Court's June 24, 2019 Order is
available at https://tinyurl.com/y6go5knr from Leagle.com.
Ramona J. Hogue, individually and on behalf of all others similarly
situated, Plaintiff, represented by Ari Cherniak, HammondLaw PC,
Craig J. Ackermann -- cja@laborgators.com -- Ackermann and Tilajef
PC, Julian Ari Hammond -- jhammond@hammondlawpc.com -- HammondLaw
PC & Sam Vahedi, Ackermann and Tilajef PC, 1180 South Beverly
Drive, Suite 610 Los Angeles, CA 90035
YRC Inc., a Delaware Corporation, Defendant, represented by Ellen
M. Bronchetti -- ebronchetti@mwe.com -- McDermott Will and Emery
LLP, John D. Ellis -- jellis@sheppardmullin.com -- Sheppard Mullin
Richter and Hampton LLP, Pankit J. Doshi -- pdoshi@mwe.com --
McDermott Will and Emery LLP, Patricia M. Jeng --
pjeng@sheppardmullin.com -- Sheppard Mullin Richter and Hampton
LLP,Philip Joseph Shecter -- pshecter@mwe.com -- McDermott Will and
Emery LLP, Ronald J. Holland, II -- rjholland@mwe.com -- McDermott
Will and Emery LLP & Paul S. Cowie -- pcowie@sheppardmullin.com --
Sheppard Mullin Richter and Hampton LLP.
ZB N.A: 9th Cir. Flips Dismissal of Securities Fraud Suit
---------------------------------------------------------
The United States Court of Appeals, Ninth Circuit, issued a
Memorandum reversing the District Court's judgment granting
Defendant's Motion to Dismiss in the case captioned RONALD C.
EVANS; DENNIS TREADAWAY, Plaintiffs-Appellants, v. ZB, N.A., DBA
California Bank & Trust, Defendant-Appellee. No. 18-15094. (9th
Cir.).
Ronald Evans and Dennis Treadaway (Plaintiffs) appeal the district
court's dismissal of their diversity action against California Bank
and Trust (CB&T) under Federal Rule of Civil Procedure 12(b)(6).
The Plaintiffs' class action against CB&T alleges the bank
knowingly assisted a $125 million fraudulent scheme initiated by
International Manufacturing Group, Inc. (IMG), one of CB&T's
clients. The Plaintiffs assert eight claims under California law:
(1) aiding and abetting fraud (2) securities fraud (under
California Corporations Code sections 25110, 25401, and 25504.1)
(3) conspiracy to commit fraud (4) aiding and abetting conversion
(5) aiding and abetting breach of fiduciary duty (6) intentional
interference with contract (7) negligence (8) violation of
California Penal Code section 496; and (9) conspiracy to violate
California Penal Code section 496.
The district court dismissed the entire suit on the ground that
Plaintiffs had not pleaded sufficient facts giving rise to a
plausible inference that CB&T knew IMG was misappropriating funds.
On de novo review of the district court's Rule 12(b)(6) dismissal,
the Court must accept a plaintiff's allegations as true and
construe them in the light most favorable to the plaintiff,
dismissing the complaint only if it fails to state a claim to
relief that is plausible on its face.
Under California law, banks generally owe no duty to non-customers
like Plaintiffs.However, California law recognizes an exception:
when a bank knows a customer is perpetrating fraud, it may not
assist the customer accomplish the tort. Accordingly, if a bank
knowingly makes itself a party to a fraud, it must make good the
loss that results from the misappropriation.
Thus, the Court first determine whether the Plaintiffs' 44-page
complaint specifically alleges that CB&T knew IMG was
misrepresenting itself as a legitimate business and
misappropriating funds, and whether the Plaintiffs have alleged
specific supporting facts that make their allegations of actual
knowledge plausible. The Ninth Circuit notes that all parties agree
IMG was operating a Ponzi scheme. IMG's CEO, Deepal Wannakuwatte,
told banks and investors that IMG had a $100-million contract with
the U.S. Department of Veterans' Affairs (VA) to provide medical
gloves at facilities around the country subject only to his ability
to raise capital to purchase or import the gloves from Asia.
The Plaintiffs allege that, by 2009, CB&T had discovered IMG was
operating a fraud on investors there was no latex glove business.
Rather than terminate the relationship, The Plaintiffs allege CB&T
helped IMG defraud investors to generate fees, interest, and funds
to repay itself. Plaintiffs allege CB&T knew IMG's entire wholesale
import business was a sham, because CB&T knew that IMG had
virtually no income from its latex glove import business. The Court
finds this allegation plausible.
The Plaintiffs specifically allege that CB&T knew IMG was
misappropriating funds, because CB&T knew it was being repaid with
investor funds (and not revenue from sales of latex gloves. This
allegation is plausible, because Plaintiffs allege CB&T knew there
was no income from latex glove sales.
The complaint alleges IMG promised investors that their money would
fund the purchase of shipments of latex surgical gloves from Asia,
and that in so doing, investors were financing IMG's highly
profitable wholesale inventory purchases not repaying IMG's loans
to CB&T or making payments to earlier investors. Plaintiffs allege
CB&T knew that IMG was misrepresenting its business, because it
knew IMG was promising high rates of return to individuals who
thought they were funding IMG's importation or purchase of medical
supplies, when CB&T also knew IMG generated no income from latex
sales.
The Plaintiffs allege CB&T repeatedly departed from standard
industry practices, including repeatedly making advances at IMG's
request without obtaining supporting documentation or verifying
that IMG used the advanced proceeds appropriately (despite
indications to the contrary) and extending maturity dates on
short-term loans year after year (even when IMG was in default.
In light of all of these specific allegations concerning CB&T's
actual knowledge of IMG's misappropriation and fraud, the Court
reverses the district court's dismissal of the case.
Instead, the Plaintiffs plausibly state three claims for relief.
a. First, the Plaintiffs state a claim for aiding and abetting
fraud (Claim 1), because they allege that CB&T: (a) knew IMG was
defrauding investors, and (b) gave substantial assistance to IMG.
The Plaintiffs plausibly allege CB&T knew IMG was making false
representations to investors. The Plaintiffs' allegations of CB&T's
involvement exceed the ordinary business transactions' a bank
performs for a customer [that] can satisfy the substantial
assistance element under California law.
b. The Plaintiffs state a claim for aiding and abetting IMG's
breach of fiduciary duty (Claim 5), because they allege that CB&T:
(a) knew IMG was misappropriating investors' funds; and (b) gave
substantial assistance to IMG.. For example, Plaintiffs allege that
CB&T knew it was being repaid with investor funds (and not revenue
from sales of latex gloves), because it traced a multi-million
dollar loan repayment to an investor in IMG's wholesale account
#4841. Again, CB&T's ordinary business transactions for IMG
satisfies the substantial assistance element.
c. The Plaintiffs state a claim for a conspiracy to commit fraud
(Claim 3), which requires: (a) the formation and operation of the
conspiracy (b) wrongful conduct in furtherance of the conspiracy
and (c) damages arising from the wrongful conduct. Plaintiffs have
alleged that CB&T agreed to terminate the lending relationship in
2009, but keep IMG's wholesale depository account open for long
enough for CB&T to get fully repaid and hide the connection between
the Ponzi scheme and repayment from it. Plaintiffs also allege they
were harmed by CB&T's wrongful conduct, because, even after CB&T
had traced its loan repayment to an investor deposit, it continued
to receive new investor funds and disperse them to older investors
as lulling payments. The Plaintiffs also allege CB&T perpetrated
fraud by, among other things: (1) submitting bogus purchase orders
to Bank of America (BofA) to draw down a federally-backed line of
credit after it looked like BofA was going to cancel it and (2)
soliciting bank clients to invest in IMG and handling the
investment paperwork for two home loans.
The Court had made clear that district courts commit reversible
error by dismissing a suit without any chance to amend, even if no
request were made, unless it determines additional facts could not
possibly cure the deficiency.
A full-text copy of the Ninth Circuit's June 24, 2019 Memorandum is
available at https://tinyurl.com/y4p9l35m from Leagle.com.
[*] Fewer CAFA Notices Than Securities Class Actions Settled
------------------------------------------------------------
Keith Bishop, Esq. -- kbishop@allenmatkins.com -- of Allen Matkins,
in an article for JDSupra, reports that of fourteen years ago,
Congress enacted legislation intended to protect consumers and
investors from settlements in which plaintiffs' attorneys pulled in
large fees while their clients (the class members) received little.
In one (in) famous case, for example, an unfortunate class member
incurred $91.33 in attorneys' fees to recover $2.19 on the merits.
Kamilewicz v. Bank of Boston Corp., 92 F.3d 506 (7th Cir. 1996).
The result of Congress' efforts was the Class Action Fairness Act
(CAFA), P.L. No. 109-2 (28 U.S.C. Secs. 1332(d), 1453, and 1711 –
1715).
One CAFA requirement is that each defendant participating in a
proposed settlement must serve notice on the "appropriate state
official" of each state in which a class member resides and the
appropriate Federal official. 28 U.S.C. Sec. 1715(b). Rather
unhelpfully, the CAFA doesn't say what exactly the appropriate
state official is to do with the notice. In 2007, then
Commissioner of Corporations Preston DuFauchard issued Release 18-G
to provide guidance with respect to notifying the Department of
Corporations (now known as the Department of Business Oversight).
The numbers of CAFA notices filed with the DBO spiked in 2013 with
20 notices filed. Last year, only 12 notices were filed, far fewer
than the 78 securities class actions reportedly settled nationwide
in 2018. Only three notices have been filed so far this year.
[GN]
[*] Indian Government Issues Class Action Threshold Limit Rules
---------------------------------------------------------------
Manasa Tantravahi, Esq., of Lakshmikumaran & Sridharan, in an
article for Lexology, reports that the viability of class action
suits under company law in India has been a cause for much debate,
ever since Section 245 of the Companies Act, 2013 ("Act") got
notified on 1st June, 2016. Section 245 of the Act permits members
and/or depositors of a company to band up and jointly proceed
against said company, its directors, auditors, or advisors, on
behalf of all the members/ depositors within the formed class,
before the National Company Law Tribunal ("NCLT").
Soon after, the National Company Law Tribunal Rules, 2016 ("Rules")
were notified to clarify the procedure for filing such suits
further, within Rule 84. However, without specifying the thresholds
with respect to eligibility to initiate these proceedings, any
explanation as to what constitutes 'prejudicial to the interests of
the company, its members or depositors', identifiable difference
between the right to bring action under section 245 as compared to
action for oppression/ mismanagement under Sections 241, 242 and
244 of the Act etc., the law governing class action has created
much speculation and ambiguity.
Notification of Thresholds
On 8th May, 2019, the Central Government issued the National
Company Law Tribunal (Second Amendment) Rules, 2019 through which
sub-rules (3) and (4) to Rule 84 were inserted, for prescribing the
threshold limits to file a class action suit. In case of a company
with share capital, (a) Atleast 5% of the total members/ 100
members, whichever is less, or (b) members holding atleast 5% of
the issued share capital in case of an unlisted company, and
holding atleast 2% in case of a listed company, may prefer the
suit.
With respect to depositors, the threshold has been prescribed as
(a) 5% of the total number of depositors/ 100 depositors, whichever
is less, or (b) depositors entitled to 5% of the total deposits of
the company (hereinafter collectively referred to as
"Thresholds").
Overlaps between Sections 241 (Oppression and/ or mismanagement)
and 245 (Class Action)
As per Section 245 of the Act, when the management or conduct of
the affairs of the company are being conducted in a manner
prejudicial to the interests of the company or its members or
depositors, a suit may be filed on behalf of the class of members/
depositors aggrieved by such action.
Section 241 of the Act lays down similar criteria for bringing
action for oppression and/ or mismanagement, which includes where
the affairs of the company have been or are being conducted in a
manner prejudicial to public interest, or in a manner prejudicial
or oppressive to him or any other member or members, or in a manner
prejudicial to the interests of the company, a complaint may be
filed by the aggrieved member(s).
On a preliminary reading of both the sections viz., 241 and 245,
there appears an overlap as to when actions under these two
independent provisions may be initiated. Further qualifications
under both the provisions are highlighted as under:
S. No. Particular Section 241 Section 245
1. Who may file a suit? Member(s)
Member(s)/depositor(s)/
of a company any class of members
or depositors
2. On behalf of whom. Filing member, Class of
members/depositors
or any other
member(s), class
of members,
Company
3. Against whom. Company (NCLT Company, Board
may issue orders of Directors,
against the Auditors and
Board of Advisors
Directors/
managers)
4. Thresholds Company having Company without
a share share capital:
capital: At At least
least 100 1/5th of the
members or at total members
least 1/10th
the total
members of the
company,
whichever is
less or member(s)
holding at least
1/10th of the
Issued Share
Capital of the
company
The major distinguishing factor between both the provisions viz.,
action for oppression/ mismanagement and a class action suit is the
beneficiaries of the suits. While in case of a suit for oppression/
mismanagement, requisite aggrieved members proceed against the
directors for the protection of their rights/ interests, in a class
action suit, requisite member(s)/ depositor(s) identifying a class
of such member(s)/ depositor(s) aggrieved by the actions of
directors, may file a petition on behalf of such a class.
As per section 245 of the Act, read with Rule 86 of the Rules, as
soon as the petition for class action is admitted, NCLT shall issue
a public notice in Form No. NCLT-13, which includes the following:
"The members of the class for the purpose of this class action
petition shall mean . . . . . . . . . . . If you belong to the
class in relation to which this Application has been filed, you
will be bound by the outcome of this Application, unless you decide
to opt-out from the proceedings by submitting the relevant form to
the following address . . . . . . . . . . . . . . subject to the
Tribunal's permission."
Therefore, the NCLT identifies the class at the time of admitting a
class action petition and the member(s)/ depositor(s) who are a
part of the class are automatically a part of the suit, provided
they chose to not opt-out in the manner prescribed under the
Rules.
On a side note, Section 245 also allows a member(s)/ depositor(s)
to proceed against auditors, the audit firm, experts, advisors or
consultants, for any fraudulent conduct on their part. This
sidesteps the rule of 'privity of contract' allowing members/
depositors to proceed against third parties for their acts done for
the company.
Interpretation of Section 245
Though section 245 of the Act got notified in 2016, till date, no
class action suit has been initiated under the Act, for obvious
reasons. The Hon'ble National Company Law Appellate Tribunal
("NCLAT") within the Order dated 21st September, 2017 in Cyrus
Investments Private Limited & Anr., v. TATA Sons Limited & Ors.,
[2017 SCC OnLine NCLAT 261], acknowledged that the court shall
first assess as to whether the thresholds are fulfilled under both
sections (241 and 245) and only then proceed to assess whether any
conduct is prejudicial to the interests of a class of members/
depositors, as applicable. Further, "Issued Share Capital"
automatically means "Issued and subscribed Share Capital" and
includes both equity and preference share capital, in context of
the sections.
The NCLAT, vide an order in Shanta Prasad Chakravarty & Ors., v.
M/s. Bochapathar Tea Estate Private Limited & Ors., [2017 SCC
OnLine NCLAT 335], observed that while a petition under section
241, 242 and 244 of the Act may be preferred only against the
company, board of directors, shareholders or its members, under
section 245, one may proceed against the statutory auditors and/ or
advisors as well.
Since the concept of 'class action' has evolved from the laws of
the United States, it may be assistive to examine the procedure
prescribed under their laws viz., the Federal Rules of Civil
Procedure ("FRCP"), under Rule 23, which covers class action and
outlines a process including: (a) complaint filed by a plaintiff on
behalf of a putative (or proposed) class, (b) such class be
certified by the court, (c) appointing of class representatives and
class counsel, to represent the class, (d) issue of public notice
to all members of the class, with an option to opt-out, and (e)
final judgment from either a trial or settlement which will bind
all class members who have not opted out of the class action.
Some of the recent interpretations given to Rule 23 of FRCP include
the following: (a) filing a class action suit, does not extend the
statutory limitation time for filing of the suit (California Public
Employees Retirement Systems v. ANZ Securities, Inc, [137 S Ct 2042
(2017)]; (b) an appeal may be preferred against a wrongful class
certification; and (c) evidence for such class action suits must be
taken on individual basis and not common evidence for all members
of the class [Tyson Foods, Inc v. Bouaphakeo, 136 S. Ct. 1036, 1045
(2016)].
Therefore, there exists developed jurisprudence in the United
States with regard to class action suits. However, the
abovementioned case-laws are as far as applicable to class action
in India.
Class Action under other laws, if any.
While class action has been scanty with respect to companies, in
the past few years, there has been a slow but steady rush of class
action suits, under section 12(1)(c) of the Consumer Protection
Act, 1986 ("COPRA"). Section 37 of the Companies Act read with
sections 34-36, allows for securities class action suits for
misleading statements or inclusion or omission of any matter in the
prospectus. Section 53N (4) of the Competition Act, 2002 allows
class action, with the permission of NCLAT. However, no such
securities or competition class action suits have been preferred
till date. The newly passed Goods and Services Tax, 2017, too does
not disclose any provision for class action.
In the absence of specific laws providing for class action, there
is always a remedy under Order 1, Rule 8 of the Civil Procedure
Code, 1908, which allows for the filing of 'representative suits'.
This is a generic remedy, in case the aggrieved are many, having
common interest.
Conclusion
With the notification of the Thresholds for filing class action
suits under the Act, we may now look forward to class action being
a preferred form of litigation against various acts of oppression/
mismanagement or general misconduct by various parties. The
advantages are many, ranging from negating multiplicity of
proceedings, reduction in costs, reduction in voluminous
proceedings and the time taken to settle the same. More
importantly, minority investors may now rest assured on having
their interests thoroughly protected through the weapon of class
action, with low thresholds for bringing action under section 245
of the Act. What is left to be seen is whether the Government
clarifies/ resolves the rest of the gaps within the class action
law over time. [GN]
[*] U.S. Style Class Action Regime Looms Large in European Union
----------------------------------------------------------------
Marshall Baker, Esq. -- mbaker@akingump.com -- Michael McTigue Jr.,
Esq. -- mmctigue@akingump.com -- Sebastian Rice, Esq. --
srice@akingump.com -- Meredith Slawe, Esq., Fred Thorling, Esq.,
and Justin Williams, Esq. -- williamsj@akingump.com -- of Akin Gump
Strauss Hauer & Feld LLP, in an article for JDSupra, report that
multinational corporations operating in the United States and
abroad encounter complex and dispositive legal frameworks that
govern not only substantive rights, but also procedural rules that
dictate who may assert such rights and, importantly, on whose
behalf they may be asserted. Most businesses operating in the
United States are, unfortunately, all too familiar with its class
action device available in state and federal courts. Indeed, the
1966 amendments to the Federal Rules of Civil Procedure—the rules
governing procedure in civil cases litigated in federal courts in
the United States—brought with them the modern articulation of
the procedural rule governing class actions: Federal Rule of Civil
Procedure 23. And while state courts have adopted their own
individualized class action procedures, they commonly look to
federal law for guidance.
In the intervening five decades, class action filings increased
exponentially in the United States, bulwarked by the potential for
crushing aggregate monetary damages, classwide injunctive relief
and significant attorneys' fees (while the Unites States generally
does not have looser pay rules for attorneys' fees, successful
class actions are one exception). These cases are often filed by
individuals, such as consumers or employees challenging purported
conduct on behalf of all others "similarly situated." The rise in
litigation was met with judicial and legislative reformations in
class action procedure. On the judicial side, federal courts have
become increasingly vigilant in their efforts to ensure that
plaintiffs strictly comply with the class Rule 23's certification
requirements. As for legislation, Congress passed the Class Action
Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4 (2005) (CAFA),
which relaxed some of the requirements defendants face to access
federal courts, which are perceived to be better venues, in class
action lawsuits. Nevertheless, enterprising plaintiffs' lawyers and
their counsel leverage the class action device to put substantial
pressure on businesses to consider settlement of claims, even where
there are valid and potentially dispositive defenses. The defense
costs alone can be significant, the potential exposure great and
the sensitivities and disruption to the business that accompany
litigation of this magnitude considerable.
Across the Atlantic, collective redress litigation has not yet
taken hold in the same fashion, at least in part because there is
serious disparity in the processes and procedures available in the
different European Union Member States. But that may very soon be
changing. At a time when lawmakers in the United States are
increasingly focused on reeling in frivolous litigation, the EU is
considering an overhaul and expansion of the current (very limited)
Unionwide collective action regime. See Proposal for a Directive of
the European Parliament and of the Council on Representative
Actions for the Protection of the Collective Interests of
Consumers, and Repealing Directive 2009/22/EC, available here (the
"Proposal"). The Proposal has gained increased momentum, with
consumer groups, such as the Bureau Europeen des Unions de
Consommateurs, endorsing it.
Further, on March 26, 2019, the Plenary (the whole EU Parliament)
adopted its position of the Proposal. See Representative Actions
for the Protection of the Collective Interests of Consumers
("Parliament's Position"). Now that the elections have concluded,
the Council of the European Union next will consider the Proposal
and Parliament's Position.
The Injunctions Directive, the Proposal and the Parliament's
Position
Since 1998, the European Union has required its Member States to
make collective redress available through representative actions
for injunctive relief brought by qualified entities designated by
the Member States, such as consumer organizations or independent
public bodies (pursuant to Directive 2009/22/EC (as amended), known
as the "Injunctions Directive"). There has been no Unionwide regime
for other forms of collective remedy such as damages by way of
compensation, however, and so the Injunctions Directive has been
regarded by the European Commission as inadequate for some time.
Although a number of Member States (including, perhaps most
notably, the U.K. and Netherlands) have their own established
regimes for collective compensatory actions, there is a great
divergence in the availability and nature of the regimes in each
member state. In fact, some Member States have no compensatory
regimes at all (and therefore no class actions comparable to those
in the United States).
The Proposal, which was first issued in April 2018, passed by the
European Parliament's Legal Affairs Committee just last December,
and by the EU Plenary (in the Parliament's Position) in March 2019,
seeks to "modernise and replace" the Injunctions Directive with a
regime that will enhance the protection afforded to consumers under
EU law. To that end, the collective action regimes already
available in individual Member States will not be replaced.
Instead, the legislation provides an expanded framework for
specific representative actions that would be implemented at Member
State level so that consumers in all Member States will benefit
from at least one similar mechanism Unionwide. Under the Proposal,
this Unionwide framework would:
Enable compensatory redress by empowering "qualified entities to
bring representative actions seeking different types of measures as
appropriate, depending on the circumstances of the case." Id at 3.
"These include interim or definitive measures to stop and prohibit
a trader's practice, if it is considered an infringement of the
law, and measures eliminating the continuing effects of the
infringement." Id. "The latter could include redress orders and
declaratory decisions establishing the trader's liability towards
the consumers harmed by the infringements." Id.
Expand the sectoral scope of the regime "to cover other horizontal
and sector-specific EU instruments relevant for the protection of
collective interests of consumers in different economic sectors
such as financial services, energy, telecommunications, health and
the environment." Id. at 2–3.
"[B]uild on the approach of the current Injunctions Directive" in
respect of the "'qualified entities' designated by the Member
States to bring representative actions." Id. at 3. "[T]hese
qualified entities will have to satisfy minimum reputational
criteria (they must be properly established, not for profit and
have a legitimate interest in ensuring compliance with EU law)."
Id. In addition, "[f]or compensatory collective redress actions,
qualified entities would also be required to disclose to the courts
or administrative authorities their financial capacity and the
origin of their funds supporting the action." Id. And "courts and
administrative authorities will be empowered to assess the
arrangements for third party funding." Id.
Require "Member States to ensure 'due expediency' of procedures and
to avoid procedural costs becoming a financial obstacle to bringing
representative actions." Id. Under the Proposal, this would be
achieved by ensuring consumers are "adequately informed of the
outcome of representative actions and how they will benefit from
them." Id. The Proposal also "promotes collective out-of-court
settlements, subject to court or administrative authority
scrutiny." Finally, "[f]inal decisions of a court or authority
establishing that a trader has infringed the law will be
irrefutable evidence in redress actions (within the same Member
State) or a rebuttable presumption that the infringement has
occurred (for cases brought in another Member State)." Id.
The Proposal and the Parliament's Position are largely overlapping,
although not identical. The Proposal explains that, "[a]s a rule,
qualified entities should be entitled to bring representative
actions seeking a redress order, which obligates the trader to
provide for, inter alia, compensation, repair, replacement, price
reduction, contract termination or reimbursement of the price paid,
as appropriate." Id.; see also Parliament's Position, No. 60
(similar). However, the Proposal also acknowledges that it will be
"necessary to provide flexibility to the Member States in cases
where the quantification of the harm of the consumers concerned by
the representative action is complex due to the characteristics of
their individual harm." Id. In such cases, under the Proposal, but
not the Parliament's Position, Member States may be entitled to
"empower courts or administrative authorities to decide whether to
issue, instead of a redress order, a declaratory decision regarding
the liability of the trader towards the consumers harmed by an
infringement of Union law, which may be directly relied upon in
subsequent redress actions." Id. Notably, however, the Proposal
states that such "flexibility" would be inappropriate in so-called
"'low-value cases' where a number of consumers have suffered such a
small amount of loss that it would be disproportionate or
impracticable to distribute the redress back to the consumers." Id.
In these cases, redress would be "directed to a public purpose to
serve the collective interests of consumers." Id. The Parliament's
Position omits these directives.
Looking Ahead
While the Proposal/Parliament's Position import from the United
States the availability of class actions seeking monetary damages,
it is not yet clear whether any of the associated procedural
safeguards found in Rule 23 will be imported too—either by the EU
in any final directive, or in national legislation when implemented
by each Member State. Certainly, the Proposal and the Parliament's
Position do not appear to consider many of the lessons that could
be learned from class actions in the United States.
Specifically, Rule 23 requires plaintiffs to establish that their
action is properly adjudicated as a class action before any
questions regarding classwide liability are resolved. In every
putative class action seeking monetary relief, plaintiffs must
establish, among other things, (1) a numerous class that makes
joinder impracticable; (2) "questions of law or fact common to the
class"; (3) that the plaintiff's claims are "typical" of the class
claims; and (4) that the plaintiff will "fairly and adequately
protect the interests of the class." Rule 23(a)(1)-(4). In
addition, the majority of putative class actions seeking monetary
relief must also show "[1] that the questions of law or fact common
to class members predominate over any questions affecting only
individual members, and [2] that a class action is superior to
other available methods for fairly and efficiently adjudicating the
controversy." Rule 23(b)(3).
As for counsel in class actions in the United States, they too are
required to seek appointment from the court, which must also
approve any payment of attorneys' fees. See Rule 23(g)-(h).
Finally, class action settlements in federal courts in the United
States include robust notice requirements that provide members of
any putative class with rights to opt out of the proceedings and,
where a class is settled, class members are permitted an
opportunity to lodge objections to the agreement. See Rule 23(c)(2)
and Rule 23(e). At every step, courts are required to vigorously
enforce these requirements.
The EU, by contrast, is considering no such requirements (at least
not expressly). Instead, the Proposal claims that the "qualified
entity" requirement "is a strong safeguard against frivolous
actions." Proposal at 4. The Parliament's Position includes no
additional protections. And as many commentators have cautioned,
the "qualified entity" requirement, like its predecessor, may do
little more than serve a pro forma purpose, and that the
requirement will not meaningfully deter, much less prevent attempts
to abuse the collective action procedure.
Similarly, the Proposal says little about when consumers will need
to be alerted to or involved in actions that might concern them. It
does specify, however, that qualified entities would be able to
seek injunctions without having "to obtain the mandate of the
individual consumers concerned or provide proof of actual loss or
damage on the part of the consumers concerned or of intention or
negligence on the part of the trader" Id. at 28, Art. 5 ¶ 2;
accord Parliament's Position, No. 55 (similar). And where
"consumers have suffered a small amount of loss and it would be
disproportionate to distribute the redress to them" [i.e.,
"low-value cases"], Member States would be required to "ensure that
the mandate of the individual consumers concerned is not required."
Id. at 29, Art. 6 ¶ 3(b) (emphasis added); but see Parliament's
Position, No. 64 (deleting Art. 6 ¶ 3). Accordingly, unlike the
strict requirements for notice and right to opt out of class
actions in the United States, consumers in the European Union may
in some instances (and depending on how any directive is ultimately
implemented in each Member State) be represented by "qualified
entities" regardless of the consumers' knowledge or consent to the
action—and possibly without any proof of damage.
Finally, attorneys' fees in these collective actions is not
meaningfully addressed. There are some restrictions proposed
regarding third party funding, and qualified entities are required
to be "not for profit," but it is not clear whether this operating
status would have an impact on the ability of these entities to
seek and recover significant fees in the prosecution of these
actions. As for costs, the Proposal would not impact national rules
regarding cost allocation, while the Parliament's Position would
shift costs onto the unsuccessful party. See Parliament's Position,
No. 4.
If implemented in its current form, there is a risk that the EU
would only import what many believe to be the most frustrating
aspect of the United States class action system: that often the
true beneficiaries of the cases are the lawyers who file them. This
is particularly notable in light of the fact that references to an
excessive class action litigation environment in the United States
were made while in committee. While the legislation awaits review
and approval by the European Council, some form of the new
directive is likely to be codified as law within the EU. Businesses
would be wise to stay abreast of developments, in addition to
amendments expected elsewhere in the European Union, as Member
States continue to grapple with these important issues. [GN]
[*] Volume of Securities Class Actions Rising, Chubb Report Shows
-----------------------------------------------------------------
Chubb on June 11 released a new report on the rising volume of
securities class action lawsuits, which have more than doubled in
the last four years. The report, From Nuisance to Menace: The
Rising Tide of Securities Class Action Litigation, examines the
origin, scope and cost of securities class actions, as well as
pragmatic proposals for reform. The report features proprietary
Chubb claims analysis and perspectives from some of the top
securities lawyers in the U.S.
The current state of securities class actions by the numbers.
The data and insights in the Chubb report add to growing research
about the costs to business and society from meritless securities
class actions. In 2017 and 2018, the number of securities class
actions filed in federal court broke new records each year, and the
volume has doubled since 2014, according to NERA Economic
Consulting. Last year, Cornerstone Research found that an average
of one in 12 public companies was the target of a securities class
action. Among S&P 500 companies, the likelihood was one in 10.
"There is a growing cohort of lawyers filing meritless lawsuits in
federal and state courts across the United States every time a
merger or acquisition is announced or a corporate misfortune
impacts a company's share price," said John Keogh, Executive Vice
Chairman and Chief Operating Officer of Chubb. "The financial
rewards from these lawsuits are accruing not to harmed investors
but to lawyers who are bringing cases of dubious merit in order to
reap a windfall in legal fees and a disproportionate share of
settlement dollars."
Chubb's analysis of merger-objection lawsuits, which are brought
when two companies enter into a merger or acquisition, found that
61% of the total costs of the litigation flowed to lawyers.
Shareholders received the smaller portion -- 39%. In 2018, 85% of
M&A transactions were challenged with a merger-objection lawsuit.
Chubb's data and insights on trends in securities class actions
reflect its position as one of the leading global providers of
financial lines insurance, which includes coverages for directors
and officers who are targets of such litigation.
The report also discusses the broader costs of meritless securities
class actions. "Rampant securities litigation is one of the reasons
why the number of public companies in the U.S. is half of what it
was two decades ago," Mr. Keogh observed. "Fewer public companies
mean fewer investment opportunities for the average small investor
-- and therefore less opportunity to participate in American growth
and prosperity. Chubb is committed to sharing our data, insights
and resources to raise awareness about this problem and to work on
behalf of American business to effect meaningful reform."
About Chubb
Chubb – http://www.chubb.com--is the world's largest publicly
traded property and casualty insurance company. With operations in
54 countries and territories, Chubb provides commercial and
personal property and casualty insurance, personal accident and
supplemental health insurance, reinsurance and life insurance to a
diverse group of clients. Parent company Chubb Limited is listed on
the New York Stock Exchange (CB) and is a component of the S&P 500
index. Chubb maintains executive offices in Zurich, New York,
London, Paris and other locations, and employs more than 30,000
people worldwide. [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
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Toledo, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2019. All rights reserved. ISSN 1525-2272.
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