Class Action Lawsuit News

Court Tosses $295 Million Antitrust Deal in De Beers Case
A federal appeals court has set aside a $295 million settlement of a class action antitrust suit alleging a price-fixing conspiracy in the international market for diamonds that was allegedly orchestrated by the De Beers group of companies headquartered in South Africa. In its opinion, the 3rd U.S. Circuit Court of Appeals ruled that the settlement must be vacated because the lower court had improperly certified a nationwide class of indirect purchasers despite recognizing that some of those plaintiffs would be barred from pursuing such indirect claims under the laws of their own states. As a result, the 3rd Circuit found that a single objector from Texas had identified a fatal flaw in the lower court's class certification analysis by showing that the common issues did not "predominate." "The objection regarding the lack of predominance of class issues in this case raises an insurmountable hurdle to certification of the indirect purchaser class," the court ruled. "Two plaintiffs cannot be joined in a single class to adjudicate the same set of facts when those facts give only one of them a legally cognizable claim."

Federal Judge OKs iPhone Class Action Against Apple and AT&T
A federal judge says a monopoly abuse lawsuit against Apple Inc. and AT&T Inc.'s mobile phone unit can move forward as a class action. The lawsuit consolidates several filed by iPhone buyers starting in late 2007, a few months after the first generation of Apple's smartphone went on sale. An amended complaint filed in 2008 takes issue with Apple's practice of "locking" iPhones so they can only be used on AT&T's network, and its absolute control over what applications iPhone owners can and cannot install on the gadgets. The lawsuit also says Apple secretly made AT&T its exclusive iPhone partner in the U.S. for five years. Consumers agreed to two-year contracts with AT&T when they purchased their phones, but were in effect locked into a five-year relationship. The actions hurt competition and drove up prices for consumers, the lawsuit claims. A judge found that parts of the lawsuit that deal with violations of antitrust law can continue as a class action. The class includes anyone who bought an iPhone with a two-year AT&T agreement since the device first went on sale in 2007.

Court Spares Attorney Arbitration in Suit Over Law School Loan
A lawyer who sued a student loan company over hidden fees in loan agreements cannot be forced into arbitration and can pursue a class action, the 2nd U.S. Circuit Court of Appeals ruled. The circuit found that the loan agreement's class action and class arbitration waiver clause was unconscionable and unenforceable. The decision clears the way for the plaintiff to lead a putative class action against Affiliated Computer Services Inc., which serviced student loan notes for Education Finance Partners, a now-bankrupt California corporation. The plaintiff borrowed the principal amount of $52,915 at a fixed interest rate in 2006 to help pay for consolidated loans from his law school education. He claims Education Finance Partners and Affiliated Computer Services would apply payments that were not received by a certain day each month to interest instead of applying the payments to principal. He alleged that, if the misallocations continued, he would be "required to make an enormous lump-sum payment" at the end of the repayment period. The companies moved to enforce a clause in the loan agreement barring a class action and compelling arbitration on a case-by-case basis; however, a judge denied the motions, applying California law in finding the clause unconscionable, and the circuit agreed.

Pennsylvania County Dismissed from Kids-for-Cash Suits
A federal judge has ruled that Luzerne County cannot be held liable in the kids-for-cash corruption scandal that has led to criminal charges against two of the county's ex-judges because no county officials with policymaking authority played any role in the alleged scheme. The judge concluded that Luzerne County must be dismissed from a spate of civil rights suits filed by juveniles who claims their custodial terms were tied to a bribery scheme in which former judges allegedly took payments in excess of $2.8 million in return for promising to sentence juvenile offenders to for-profit detention centers. The judge found that even though both of the disgraced judges at times served as president judge and therefore played a role in crafting the county court's budget, they never became county officials in that process. Under Pennsylvania law, president judges merely make budget recommendations and have no power over county officials in the ultimate decisions. Under the separation of powers in Pennsylvania government, the judge found, county judges are always considered state actors.

Federal Judge Tosses Class Action Against Firms
A federal judge in Massachusetts has thrown out a lawsuit against two firms that alleged they had been improperly paid for representing a credit repair organization in a multimillion-dollar class action. Both firms represented Cambridge Credit Counseling Corp., which faced a class action that accused the credit counseling company of holding itself out as a nonprofit organization while its owners raked in millions. That class action was ultimately settled for $259 million. Last year, the class and its plaintiffs filed suit against the two firms and several of the firms' former lawyers. That suit argued that because the firms were paid out of a trust set up for the members of the class, the firms should have to pay those fees back. The suit also alleged that one firm violated the Credit Repair Organizations Act by advising Cambridge "in making statements in their advertising promising credit repair." The complaint alleged that one firm received $6.9 million and the other received $1.1 million for work on behalf of Cambridge after one firm withdrew from the underlying case. The judge granted summary judgment in favor of both firms because the class had only been certified in the underlying case and not in the new lawsuit, violating Rule 23 of the Federal Rules of Civil Procedure.

Homeowners' Insurance Carrier Must Defend Suit by Party Guest Who Overdosed
Holding to its usual predilection for closely scrutinizing insurance exclusions, the New Jersey Supreme Court ruled that a carrier must defend homeowners sued by a guest who suffered permanent injuries at a party - even if illegal drugs played a role. The court said there was not enough evidence in the record to determine if the guest's injuries were caused by drug abuse, alcohol intake, a combination of the two, or the delay in calling for medical help after she passed out at the party. She was taken to a hospital where she was diagnosed with acute respiratory failure, renal failure, a shocked liver and hearing loss. She also tested positive for alcohol, cocaine, marijuana and various opiates. She sued the homeowner, alleging that he provided drugs at the party and that his delay in calling for help exacerbated the consequences of her overdose. The homeowner's carrier asked to be released from providing a defense and indemnification under an exclusionary clause in the policy that said there would be no coverage for injuries "arising out of the use, transfer or possession of controlled dangerous substances."

Ex-County Commissioners Named in Kids-for-Cash Suit
Former Luzerne County judges and other persons implicated in the kids-for-cash scheme have been named as defendants in another federal class action lawsuit filed on behalf of juveniles who allege they were wrongly incarcerated. The suit contains allegations similar to other suits, which generally contend that two judges conspired with an attorney - who once owned juvenile detention centers - and others to wrongly incarcerate youths in order to benefit themselves financially. It differs in that it alleges several former county officials, including two former county commissioners and one former chief manager, played an active role in the alleged conspiracy. The most recent complaint joins four other lawsuits that are currently pending relating to the juvenile justice scandal and alleges the three new defendants either participated in the illegal activity of the ex-judges or knew something was improper but did nothing to address it.

Judge: Insurer Must Defend Homeowner Sued After Son Murdered Neighbor
An insurance company must defend a New York homeowner who was sued for negligence after her son decapitated and dismembered a neighbor, a state judge has ruled. The insurance company had argued that the murder was not an "accident" and therefore was not covered by the woman's umbrella policy. The judge, however, held that an accident must be measured by the eye of the policy holder. The judge found that an incident is "an accident" if it was "unexpected, unusual and unforeseeable" from the point of view of the insured. In 2006, the plaintiff's son murdered her neighbor and was sentenced to 30 years to life in prison. However, the neighbor's family sued the plaintiff, alleging that she failed to properly notify her neighbors that her son was on release from a residential substance abuse and psychiatric facility. While her primary insurance carrier agreed to defend her against the action, her "excess" or "umbrella" carrier denied any obligation to defend or indemnify her.

Court Allows Class Action Against Insurer
In a resounding defeat for the defendant insurance company, the Georgia Court of Appeals has upheld a lower court's decision allowing a class action to proceed on behalf of potentially hundreds of thousands of customers who bought credit insurance when financing their vehicles, but who - in cases in which the loans were paid off early or the cars were wrecked and the loans canceled - were not provided refunds of those premiums. The appeals court also upheld a stiff sanction order levied by the court over allegations of discovery abuse, which Resource Life Insurance Co. had argued could cost it hundreds of millions of dollars if allowed to stand. The case began with a woman's auto purchase in 2001 - the same year her car was totaled, canceling out the balance of her loan. The premium for such a credit insurance policy is a one-time, up-front payment that covers the term of the loan; thus, if the loan is canceled, the insured is due a return of the prorated balance of the premium. She was owed a refund of $1,213 but, based upon an alleged mathematical error by the automobile dealer who issued the refund, did not get the entire amount. In 2004, she filed a class action asserting that Resource Life, although unable to determine when each of its policyholders' accounts had been cancelled, made no effort to determine when unearned premiums were owed and to repay the same. The complaint said that failure constituted a "breach of contract, unjust enrichment, negligence and willful, wanton and intentional misconduct." The suit sought compensation for any Resource Life policyholder whose loans were terminated early, and an injunction ordering the company to provide such refunds to those whose loans would be cancelled early in the future.

Want to Know What Hospitals Charge? Good Luck
Consumers - especially the uninsured - face significant challenges when they try to shop for the best price or negotiate. More than 30 states require hospitals to disclose at least some of their charges. Congress included such a provision in the new health overhaul law and similar proposals are pending in the House. But many experts say these efforts don't help much. Publicized hospital charges are "useless for consumers," largely because hospital prices are moving targets, varying with patients' needs and doctors' treatment strategies. Patients can't depend on estimates because they're often based on a hospital's average charges for treatments. For instance, a Tampa hospital charged as little as $48,631 and as much as $89,969 for gallbladder removals between 2008 and 2009. And when bills come in above the estimate, patients have little recourse.

Computer Chip Makers to Pay $173 Million to Settle Price-Fixing Case
A massive class action against manufacturers of computer memory chips has settled for $173 million. Several companies and executives pleaded guilty to criminal price fixing in the DRAM chip market while two class actions proceeded on the civil side. One was on behalf of customers who purchased DRAM directly, like computer manufacturers. The other involved indirect plaintiffs, like customers who bought computers that contained DRAM chips. Direct DRAM purchasers settled previously for $325 million, and the most recent settlement is on top of an earlier settlement with Samsung for roughly $113 million. The indirect case ran into trouble when a judge ruled that the plaintiffs did not have standing to pursue a swath of claims against the companies. Under antitrust law, indirect customers did not participate in the same market as the DRAM manufacturers. Before the settlement was reached, that issue was set to go before an appeals court.

Lawsuit Could Cost County $1 Million
As a class action lawsuit regarding conditions at a Northumberland County Prison heads toward settlement, the county will soon be stuck with the tab. The county will pay an estimated $800,000 to $1 million for additional medical expenses and attorney fees as a result of the litigation. The Lewisburg Prison Project sued the county, a former warden and the prison board on behalf of 12 current or former inmates, alleging medieval conditions at the jail and practices that violated constitutional rights. Several issues have been addressed, including improvements in medical services, and it appears the two sides are moving toward a settlement. But the improvements and litigation come at a price - including paying the plaintiffs' attorney fees. The county has placed blame on the former warden. 

Court Finds Bankruptcy Judges Can Certify Class Actions by Nixes Wells Fargo Class
Although a Texas bankruptcy court had the authority to certify a class action against Wells Fargo Bank, it stumbled in doing so, a federal appeals court has ruled. The 5th U.S. Circuit Court of Appeals has ruled that a bankruptcy court in Houston had jurisdiction to certify a class of about 1,236 individuals who had filed for Chapter 13 bankruptcy and had mortgages held or serviced by Wells Fargo Bank. Noting a disagreement among courts as to whether bankruptcy judges can certify classes of debtors, the three-judge panel ruled that the bankruptcy court's interest in "efficiency and economy in litigation" that result from class actions is just as compelling as a district court's interest. However, the appeals court found that the questions of law and facts raised by the putative class members were not similar enough to warrant certification.

Bill Passed in Albany to Make Insurers Pay for Autism Care
State lawmakers have passed legislation that would require insurers to cover autism-related screenings, diagnoses and treatments. The move was a relief for parents of children with autism spectrum disorders, but was sure to increase insurance premiums across the board. If singed into law by the governor, New York would become the 22nd state in which insurers are required to cover autism-related treatments; however, the bill is more sweeping than those passed in most other states. While other states have a dollar and age cap - treatments are only available up to a certain amount of money or for specific ages - the bill in New York does not have those limitations.

Appealing Denied Health Claims May Not be Easier Under New Law
The options for challenging an insurance company's denial of a claim are limited - appeals can be slow and cumbersome and most patients are barred from suing for damages resulting from denials and delayed treatments. The new health law makes the system somewhat more consumer-friendly. Starting this fall, patients in all health plans can contest claim denials in an independent state-level review procedure - a resource that has not been generally available to employees of companies that pay their employees' health claims directly. However, the new law does not make it any easier for consumers to sue for punitive damages for pain and suffering. Under Erisa, the Employee Retirement Income Security Act, people covered by employer health plans can sue in federal court only for the cost of the benefit that was denied them. Some state courts provide stronger remedies, but only to people with individual health insurance policies. So those who hoped for bigger, more powerful weapons to fight claim denials are likely to be disappointed, because the new provisions do not significantly change existing law.

As Law Takes Effect, Obama Gives Insurers a Warning
President Obama, whose vilification of insurers helped push a landmark health care overhaul through Congress, plans to sternly warn industry executives against imposing hefty rate increases in anticipation of tightening regulation under the new law. The White House is concerned that health insurers will blame the new law for increases in premiums that are intended to maximize profits rather than covering claims. The administration is also closely watching investigations by a number of states into the actuarial soundness of double-digit rate increases. The law does not grant the federal government new authority to regulate health care premiums, but with important provisions taking effect this summer and fall, the Obama administration has repeatedly reminded insurers that it will expose industry pricing to a "bright spotlight."

Deadline Nears for Time-Share Complaints
The clock is ticking for residents who are dissatisfied with Bluegreen Corp., an $8 billion business that blanketed parts of Pennsylvania with high-pressure time-share marketing. Consumers need to beat the fast-approaching deadline to file formal complaints for consideration in a consumer-protection settlement with the Florida company. Bluegreen sold time-shares to more than 5,700 Pennsylvanians, and in response to numerous complaints, the attorney general filed a consumer-protection lawsuit against four subsidiaries of the company in 2008. The suit addressed complaints about allegedly deceptive "contests," do-not-call violations, misleading sales presentations and improper contracts. A settlement was recently reached, and the court gave consumers 30 days to file complaints. Complaints will be reviewed and restitution will be apportioned according to the extent of the loss. $200,000 has been set aside for infractions such as do-not-call violations, bogus "free gifts" to attend sales seminars and broken promises of extra services with purchases. Restitution related to contracts for time-shares is "open-ended" and could easily exceed $1 million. Some buyers signed agreements for $20,000 time-shares that included financing and hidden fees, increasing the cost.

California to Review Rate Hikes of 4 Health Insurers
California's four largest health insurers will have rate hike proposals reviewed by independent actuaries to keep them in line with legal limits on profit. An independent actuary is currently reviewing Aetna and Blue Shield's proposed increases, and Anthem Blue Cross and Health Net will face future rate reviews. The four insurers control 90 percent of the market involving California's 2.5 million individual health policies. The review was prompted by the state's discovery that Anthem Blue Cross had attempted to raise rates 50 percent more than state law allows. The insurer canceled its plans to increase rates up to 39 percent for some customers after the commissioner's review and broad public criticism that ranged from policyholders to President Barack Obama.

One in Five Health Insurance Claims Wrongly Handled
Claims-processing errors by health insurance companies create billions of dollars in unnecessary administrative costs, slow down payments to doctors and frustrate patients, the main U.S. doctor's group has announced. The American Medical Association said one-fitfth of all claims are mishandled by health insurers. Begun in 2008, the association's annual "National Health Insurer Report Card" rated the nation's eight largest health insurers in how they handle claims, and concluded that if all problems were resolved, the system would save $15.5 billion annually in administrative costs. Currently, the health care system spends as much as $210 billion annually on claims processing, and doctors have long complained about excessive paperwork required to satisfy insurance companies. The AMA described mishandling as claims processed with errors - underpaid, overpaid or incorrectly unpaid.

Attorney Seeks to Combine 100-Plus Lawsuits Over Gulf Oil Spill
An attorney wants more than 100 lawsuits filed against BP and other companies involved in the massive Gulf of Mexico oil spill combined quickly in a single federal court to avoid what he called legal chaos that could delay potential payments of billions of dollars in damages. The lawyer has asked a federal judicial panel to order the lawsuits in five Gulf Coast states centralized in New Orleans or a federal court elsewhere in Louisiana, the state so far hit hardest by the spill. There are currently 130 lawsuits, although that list grows each day. Although BP is paying claims to people and businesses affected by the spill, those amounts could eventually be dwarfed by damages resulting from a major class action case involving tens of thousands of plaintiffs. So far, potential class action lawsuits have been filed by fishing and seafood interests, the tourism industry, restaurants and clubs, property owners losing vacation renters and even vacationers who claim the spill forced them to cancel and lose a deposit.

Court Spikes Football Fans' Signal Videotaping Suit
A ticket to a football game doesn't come with any promise that the contest will be an honest one, a federal appeals court has ruled, rejecting an appeal by fans who said they were defrauded in the recent New England Patriots "Spygate" scandal. The court held that a lower court correctly dismissed the suit on the grounds that fans cannot claim any "cognizable injury" that stems from paying to watch a game that it later deemed to have an element of cheating. The plaintiff argued that ticket holders had the right to see an honest game played in compliant with the rules. Although the case was unique, the courts have consistently rejected comparable claims.

Australian Bank Fees Targeted in Massive Class Action
In what could be Australia's biggest class action ever, some 40,000 people have signed on to litigation that challenges overdraft and late fees charged by a dozen of the country's largest banks. The litigation, which is actually a series of claims brought by an Australian plaintiffs firm, could eventually attract up to 100,000 people and businesses on the plaintiffs' side. That would make it the largest class action in Australia's history. The banks stand accused of charging late and overdraft fees to customers ranging from $22 to $54 when the true price of covering those costs was generally under $1.80. Data from Australia's banks show that $1.07 billion in such fees was charged in 2008 alone.

Plaintiffs from $1 Billion Case to Take Another Shot at Bank of America
Nearly a year after the California Supreme Court sided with Bank of America by reversing a more than $1 billion judgment against it, the plaintiffs are trying to revive their class action. They want to start over with an amended complaint - and a San Francisco judge has given them the go ahead. Now Bank of America is trying to get the First District County of Appeal to step in and declare an end to the almost 12-year-old litigation. Both courts "clearly dealt a death knell" to the litigation and intended that judgment be entered in favor of the bank, its lawyers argued in their writ petition. The band was sued in 1998 by a disabled man who accused the bank of improperly tapping deposited Social Security and other benefits to cover overdraft fees and penalties. After getting a class of more than 1 million members certified, they won a trial. The First District then reversed it, and their decision was affirmed by the Supreme Court.

Another Lawsuit Filed Over Pittsburgh Water and Sewer Authority Insurance
Three companies that provide utility-line insurance for homeowners have sued Pittsburgh Water and Sewer Authority, claiming that a $5 monthly fee added to water bills for line insurance is illegal. The companies joined a city resident who filed suit against the water authority and Utility Line Service, LLC. The lawsuit claims the fee violates the state Constitution; competitive bidding rules; and rules regarding competition with private providers. The insurance fee is the subject of another lawsuit filed by customers who say the authority, Utility Line Services and the Allegheny County Sanitary Authority used unfair business practices. The insurance - added as an optional monthly fee to cover some failures of water or sewer lines on private property - is improper because the fee is charged automatically until people opt out.

Lawsuits Over Oil Rig Disaster Spill Into Court in Mississippi
More litigation is gushing out of the Gulf of Mexico spill. In Mississippi, two commercial shrimpers filed a $5 million class action in federal court, alleging the oil spill could destroy their livelihoods. In Louisiana, a proposed class action was filed in federal court on behalf of a fishing company claiming financial injuries from the spill. In the same court, two similar lawsuits were filed on behalf of two charter fishing companies alleging their business has come to a halt because of the spill. There is also the first oil spill lawsuit filed in the Eastern District of Louisiana, where shrimpers, commercial fishermen and commercial boaters are suing over lost business.

Class Action Lawsuit Filed Over Gulf of Mexico Spill
The plaintiffs bar is beginning to circle the massive oil spill in the Gulf of Mexico, and one of the first lawyers to court is also caught up in Toyota's unintended-acceleration litigation. He recently filed a class action over damages caused by the drilling right that exploded. The suit was filed on behalf of Louisiana shrimpers, fishermen and commercial boaters who claim the oil spill is hurting their livelihood. The class may grow, as commercial boaters and fishermen in Mississippi, Alabama, Florida and Texas say the oil has spread to their locations and is shutting their businesses.

Relacore Plaintiffs Take Last Stab at Securing Class Action Status for Suit
A lawyer for dissatisfied users of the dietary supplement Relacore took his third and probably final shot at getting class action treatment for the suit, which alleges that manufacturer made false claims about the drug's effectiveness in cutting belly fat and stress. Two lower New Jersey courts have held that there are too many possible variables to satisfy the class action requirement that questions of law or fact common to the class predominate over questions affecting only individual members. But the plaintiffs' attorney told the state Supreme Court that both courts were wrong: that the common variable is the manufacturer's fraud on consumers. The suit seeks certification of a class comprised of all New Jersey residents who bought Relacore since it came to market in 2002. The lead plaintiff alleges she bought Relacore in 2004 after seeing an ad that claimed it would reduce belly fat. However, after using it for 90 days - at $39.00 for each month's supply - her waistline actually increased.

States Warn of 'Obamacare' Scams
In Illinois, a telemarketer sold an elderly woman a fraudulent health insurance plan that supposedly protected her against "death panels," the state insurance director says. In Alabama, a con artist has been offering "government health care reform" insurance over the phone in exchange for customers' bank account numbers, according to the local Better Business Bureau. And in Kansas, law enforcement authorities are investigating reports of people identifying themselves as government employees and taking payments for "Obamacare" insurance. Con artists in several states are seizing on the public's financial struggles and confusion about the recent health care overhaul, the authorities say. So far, the frauds appear to be relatively infrequent and are often no more sophisticated than spam fax messages with blatant misspellings and no company letterhead. But they have generated warnings from state insurance departments and the secretary of Health and Human Services. The authorities say the elderly and the poor are especially vulnerable to the bogus plans, which have names like Obamacare and Obama Health Plan and promise affordable compliance with the new law. The fraudsters often impersonate insurance agents and government workers.

Insurer Targeted Breast Cancer Patients to Cancel
One after another, shortly after a diagnosis of breast cancer, each of the women learned that her health insurance had been canceled. None of the women knew about the others, but besides their similar narratives, they had something else in common: Their health insurance carriers were subsidiaries of WellPoint, which has 33.7 million policyholders - more than any other health insurance company in the United States. The women all paid their premiums on time. Before they fell ill, none had any problems with their insurance. Initially, they believed their policies had been canceled by mistake. They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators. Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women's specific cases without a signed waiver from them, citing privacy laws.

Court Urged to Revive Class Action Requiring Cell Phone Headsets
The potential biological hazards of using cell phones took center stage as a plaintiffs lawyer urged the 3rd U.S. Circuit Court of Appeals to revive a Pennsylvania class action suit that says manufacturers must be ordered to provide a headset with every phone as a safety device. He argued that a lower court judge erred in tossing the suit on the grounds that it would interfere with the Federal Communications Commission, which has exclusive authority to regulate the radio frequency or RF emission of cell phones. The FCC has no expertise in matters of public health and safety, he argued, and the federal statutes that give the FCC its powers were never intended to oust the state courts from their traditional roles of providing remedies for breaches of warranty or false advertising. The suit named 19 defendants, including all of the major cell phone manufacturers and providers.

Federal Judge Certifies Class Action ERISA Suit Against Comcast
A federal judge has certified a class action ERISA suit against Comcast Corp. in which employees of the cable television giant claim they suffered losses in the company stock fund because it was heavily invested in Comcast stock during a period when its price was falsely inflated. At the heart of the suit are accusations that Comcast executives made overly optimistic predictions about the company's growth in early 2007, driving the price of the stock up, despite being aware of market forces that were sure to result in significantly lower growth. Many of Comcast's subscribers had joined under a promotional package known as the "Triple Play" - a bundle consisting of telephone, video and Internet services that was discounted to $99 per month for the first year - but the company was facing intense competition from AT&T and Verizon, where were offering similar discounts. As a result, the suit said, Comcast saw tens of thousands of subscribers defect to its competition in 2007. The plaintiffs allege that the truth was revealed in a series of disclosures over the course of 2007 that caused Comcast's stock price to plummet from a high of more than $28 to just over $18. Nearly identical accusations were also lodged in a securities fraud suit brought by outside investors. But Comcast dodged a bullet in 2008 when a federal judge tossed out the securities fraud suit after concluding that the investors had failed to back up their claims that Comcast executives were aware of the falsity of their bullish statements at the time they made them.

Blue Cross Settles Michigan Class Action Over Autism Treatment, But Still Faces a Judge
Blue Cross Blue Shield of Michigan may have finally settled a historic autism lawsuit for $1 million, but it still has a big plaintiff on its back: a judge. A Detroit federal judge gave final approval to the insurance company's $1 million settlement with more than 100 families seeking coverage for autism treatments. A separate, similar suit remains pending against the insurance giant brought by another judge. That judge, who has a son with autism spectrum disorder, filed her suit against Blue Cross last year, immediately after the insurance company initially announced its settlement in the class action case. Under the recent settlement, Blue Cross agreed to cover what is known as applied behavioral therapy treatments, but only for patients who had received the treatments at Beaumont Hospital in Michigan. The judge's son received his treatments at another facility, and Blue Cross, her lawsuit contends, has wrongfully refused to cover them. To date, three motions to dismiss that case have been denied. The judge contends that at the heart of both lawsuits is Blue Cross' refusal to acknowledge the treatments work - instead treating it as experimental - even though their own internal documents showed it wasn't experimental. Meanwhile, more than 100 families involved in the class action case are expecting reimbursement checks in the mail soon for treatments received from March 2003 to June 2009. The judge ordered Blue Cross to issue payments within 2 weeks, and under the settlement, families will be reimbursed whether or not they made a claim with Blue Cross prior to the settlement.

Court May Revive $184 Million Class Action Over NFL Team Taping Rival's Signals
The New England Patriots may face even more punishment for surreptitiously filming the signals of their opponents if a federal appeals court revives a class action consumer fraud suit brought by a fan of the New York Jets who says he was cheated of seeing fair games. The NFL hit the Patriots coach with a $500,000 fine and the team lost its first-round draft choice, but the suit, filed by a Jets season ticket holder, seeks $184 million in damages to fans. A lower court tossed the suit out after declaring that the fans had suffered no "cognizable injury" since they essentially got what they paid for - a seat in the stadium to watch a game. However, in oral arguments before a three-judge panel of the 3rd U.S. Circuit Court of Appeals, the lawyers for the Patriots and the NFL were given a serious grilling that suggested the appellate court didn't take as dim a view of the suit. A lawyer for the NFL argued that the lower court properly recognized that fans cannot be allowed to sue over violations of NFL rules. A lawyer for the plaintiff argued that the lower court erred in holding that the Patriots violation of the rule didn't harm the fans. While other NFL rules infractions are obvious and remedied on the spot by officials, he argued that the Patriots' long-running scheme to videotape opponents was different because it preceded the game and gave the Patriots an unfair edge.

Down Market Drives Up Lawsuits Against Appraisers
As it did the last time the real estate market tanked, the downturn has triggered an uptick in lawsuits against appraisers. However, what's a little different this time is that many of the lawsuits are generated by borrowers rather than lenders. Borrower lawsuits account for about 75 percent of the uptick in lawsuits against appraisers. Still, overall the amount of litigation against appraisers is relatively small potatoes - annually about 1,200 lawsuits for professional liability before the mortgage crisis, and now around 2,000 representing about $100 million a year in damages nationwide. As an example is a case in which a borrower is suing the appraisers of two residential income properties, accusing the appraisers of trying to get a commission by inflating rental income. With property values down, many of the suits against appraisers are "buyer's remorse cases." Plaintiffs' attorneys argue that borrowers rely on appraisers' information, and that they should be held accountable for violating rules to ensure that information is accurate.

Plaintiffs Seek to Revive Ponzi Suit
Investors are asking a Tampa federal judge to reconsider her dismissal of a class action lawsuit for alleged negligence tied to a Sarasota investment adviser accused of running a $400 million Ponzi scheme. A judge ruled the proposed class action filed by six investors against the firm did not meet the requirements of the Securities Litigation Uniform Standards Act and ordered the case closed. However, the investors' lawyer followed up with a motion asking the judge to reconsider based on a recent ruling in a similar New York case. That ruling should carve out an exception for some hedge fund lawsuits in federal court even when SLUSA does not apply. The suit alleges a law firm acted negligently in its representation of a convicted Ponzi schemer who pleaded guilty to 15 counts of operating the $168 million scheme from 1999 to 2009. His investors though they were investing in a variety of hedge funds under his control or association. The suits accuse the firm of preparing disclosure documents for investors that failed to mention the defendant was a disbarred New York attorney who drained a client's escrow account. The suit also accuses the firm of  a conflict of interest for representing the defendant and his investment funds simultaneously. About 300 investors could be covered in the class action if its certigied. Another 100 investors who turned a profit are subject to lawsuits themselves.

Mohawk Industries Settles Class Action for $18 Million
After six years of intense and complex litigation, Mohawk Industries and employees who claimed the carpet maker had depressed wages by hiring undocumented workers have agreed to settle for $18 million. A judge granted the parties' motion to preliminarily approve the settlement and certify the class. Attorneys for the company said the primary motivator was an agreement by its insurer to pay $13 million of the settlement amount. Mohawk, which will pay $5 million out of pocket, was settling for less than what it would have cost to continue litigating. That figure is less than what the employes' class counsel may request from the court as attorney fees - about $6 million, according to settlement documents filed with the district court. In addition to the financial settlement, Mohawk, which did not admit wrongdoing, also agreed to conduct training about verifying employment eligibility and to operate an anonymous tip line for reporting violations of employment eligibility verification. Plaintiffs' attorneys praised the $18 million settlement because under their theory of the case, which was cast as a RICO action, treble damages could have been an issue. Mohawk employees had claimed the undermining of their wages began in January 1999 and continued to the present. With those date parameters and an alleged 5 percent wage depression, trebling of the damages could easily rise into the hundreds of millions of dollars. Plaintiffs' attorneys also believed the employees would have had a hard time winning on their depressed wages claim given that Mohawk pays an average of $13 an hour, plus benefits including health, dental, eye care and retirement.  sch

Native American Farmers' Class Action Unsettled as Next Deadline Looms
The clock is ticking on negotiations to settle another mammoth discrimination lawsuit against the U.S. Department of Agriculture, this one brought by Native American farmers and ranchers. The class action, filed in 1999, accuses the department of denying thousands of Native American farmers and ranchers the same opportunity to obtain farm loans that it routinely gave to white farmers. The discrimination allegedly caused the loss of billions of dollars in credit over a 25-year period. The suit also charges the department with failure to accept and investigate many civil rights complaints filed by those farmers and ranchers. The Department of Agriculture has asked the plaintiffs to join the department in seeking a stay of the class action in order to focus on settlement negotiations. The judge has agreed to halt the litigation for 60 days. The co-chairs of the Native American Caucus have sent a letter to the Department of Agriculture urging it to settle the litigation on terms comparable to the department's recent settlement with African-American farmers. The department settled late-filled claims of black farmers for $1.25 billion, in addition to the $1 billion previously awarded for timely filed claims in that litigation.

New York Lawyers Charged in $10 Million Mortgage Fraud Scheme
Three New York City attorneys were charged with participating in a $10 million mortgage fraud scheme. According to federal prosecutors, two of the lawyers purchased several properties in Brooklyn and Queens. Then, using allegedly fraudulent appraisals and title reports, they sold the properties at inflated prices to straw purchasers. A third attorney and seven others, including two real estate brokers, allegedly assisted in the fraud.

Scam Alert Issues On New Health Care Law
President Barack Obama's top health official says scam artists are taking advantage of the new insurance law to peddle phony policies. Some of the hustlers are going door-to-door claiming there's a limited open-enrollment period to buy health insurance now. In fact, the big expansion of coverage won't come until 2014, and door-to-door salespeople are unlikely to be part of the plan.

Sex Bias Suit Against Novartis to Start
A class action lawsuit alleging that Novartis Pharmaceuticals practices sex discrimination against female employees is set to go to trial in federal court in New York. The complaint seeks more than $200 million in damages on behalf of more than 5,600 female sales employees. The suit alleges Novartis, the United States subsidiary of the Swiss drug giant, discriminated against women in pay and promotions - especially women who became pregnant. Women in sales positions at the company received an average of $105 a month less than men in comparable jobs from 2002 through 2007. Novartis denies the claims and is proud of its record in hiring and promoting women. Novartis had been cited by Working Mother magazine as one of the 100 best companies in the nation for 10 years in a row. The lead lawyer for the 17 current and former Novartis workers who filed the suit in 2004 says Novartis continues to discriminate against women. He claims the case is one of the largest class action discrimination lawsuits to ever reach trial.

Supreme Court Ruling Opens Federal Courts to More Class Actions
In a significant blow to business, the Supreme Court has ruled that certain class actions barred or limited by state laws may proceed in federal courts. In the case, the majority held that the federal class action rule trumped a New York law prohibiting class actions that seek to recover statutory penalties or minimal recoveries. While the decision may be good for those seeking to use class actions to remedy corporate wrongdoing, it will also "upend" a large number of state statutes that limit remedies which can be sought by class actions or that outright prohibit certain class actions.

Judge Approves Zero-Dollar Settlement of Class Action Over Merck Merger
A class action suit over the merger of drug giants Merck and Schering-Plough has ended in a settlement that pays nothing to the class but $3.5 million in fees to class counsel. However, a federal judge approved it nevertheless, finding counsel provided a substantial benefit to the class because of the suit, alleging "material deficiencies" in the proxy statement sent to shareholders before the merger vote, triggering the disclosure of additional information. Disposing of objections, the judge held that a common benefit was rendered because "extended disclosures permitting the shareholders to exercise a fully informed decision" would not have occurred but for "class counsel's hard fought negotiation with defense counsel." Objections to the settlement were lodged by five members out of an estimated class of 450,000 who held Schering common stock. The merger left Schering as the surviving company, renamed as Merck & Co. Schering shareholders received 0.5767 shares of new Merck stock and $10.50 in cash for each share. Those in the original Merck obtained shares in the new entity on a one-to-one basis. In his ruling, the judge also denied a request by one objector for sanctions against class counsel for suing so quickly after the merger was announced that they failed to ascertain if there was a basis for the suit.

Federal Judge Orders $4.7 Million in Restitution in Telemarketing Case
Chalk up a win for the Federal Trade Commission now that a Pennsylvania judge has shut down a telemarketing operation run by a Pittsburgh firm and ordered more than $4.7 million in restitution to consumers. In the suit, the FTC argued that the company, Magazine Solutions, engaged in a nationwide telemarketing scam that targeted young mothers with promises of valuable coupons when, in fact, they were luring them into buying unwanted magazine subscriptions. Instead of receiving $1,000 worth of coupons, the suit said, the consumers were typically saddled with monthly payments that added up to more than $770. The suit alleged that the firm violated the Telemarketing Sales Rule in several ways. Often, the suit said, callers did not tell consumers up-front that to get the coupons they had to buy the subscriptions; sometimes they claimed the magazines were free or that the consumers only had to pay shipping and handling. When consumers tried to cancel their orders, many found it was nearly impossible to do so, and were stuck with subscriptions to magazines they never wanted in the first place. Others who refused to pay their bills would later see them as bad debts on their credit reports.

If the Price Isn't Right, This Woman May Sue
One fed-up woman went from coupon-clipping mom to conscientious consumer, successfully suing a number of big-name stores and getting the state's attention in the process. The Pittsburgh woman has sued Wal-Mart, Kmart, CVS and others for ringing up merchandise at the wrong price and for improperly charging sales tax. Her consumer activism has garnered state and national awards, putting her on the speaking circuit at consumer-oriented events locally and nationally. She sues stores only when they don't take her complaint seriously or repeatedly make the same mistake. She sues under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. She has successfully argued that pricing mix-ups are an "unfair or deceptive act" by confusing shoppers and has won roughly 20 small-claims lawsuits against stores. She's currently working with state lawmakers to increase penalties under the law, which caps damages at the amount lost of $100, whichever is greater.

Insurer Revoked HIV Patients' Coverage
In 2004, a South Carolina jury ordered Assurant Health to pay a 17-year-old AIDS victim $15 million for wrongly revoking his health insurance policy. Previously undisclosed records from the case have since revealed that Assurant had a company policy of targeting policyholders with HIV. A computer program and algorithm targeted every policyholder recently diagnosed with HIV for an automatic fraud investigation, as the company searched for any pretext to revoke their policy. As was the case with the South Carolina teen, their insurance policies often were canceled on erroneous information, the flimsiest of evidence, or for no good reason at all, according to the court documents and interviews with state and federal investigators. Insurance companies have long engaged in the practice of "rescission," whereby they investigate policyholders shortly after they've been diagnosed with life-threatening illnesses. But government regulators and investigators who have overseen the actions of Assurant and other health insurance companies say it is unprecedented for a company to single out people with HIV.

US Airways Fined Over Pricing On Web Site
US Airways Group Inc. was fined $40,000 by the Department of Transportation for not disclosing full ticket prices on its Web site. The department has said it imposed the civil fine because US Airways violated rules that require airline advertisements to disclose the full price on the first Internet screen that provides a fare quote. The department's Aviation Enforcement Office said that "for a short period of time," when consumers searched US Airways' Web site for one-way flights, the carrier provided fares that did not include additional taxes and fees, or any notice that the additional charges would be added later in the transaction. The department requires Internet advertising to display the full fare either on the first screen that provides fare quotes, or with a hyperlink that takes consumers to a page that describes the additional charges. US Airways said in a consent order released by the Transportation Department that its failure to include the additional taxes and fees "was wholly unintentional and the result of an inadvertent programming error."

Federal Judge Approves Settlement in MetLife Cases
A New York judge has approved a combined $50 million settlement in two class actions that had accused the Metropolitan Life Insurance Co. of making false claims to shareholders in 2000 as part of the company's attempt to privatize. Under the agreement, MetLife will pay $32.5 million to a yet-to-be-named health-related non-profit organization, $2.5 million the National Institutes of Health and a total of $15 million to about two dozen attorneys.

Springsteen Ticket Buyers Can Expect Refund from Ticketmaster
The Federal Trade Commission has announced that it has settled charges that Ticketmaster and its affiliate TicketsNow used "deceptive bait-and-switch tactics" to sell tickets to 16 Springsteen concerts last year. When thousands of consumers tried to buy tickets via Ticketmaster's Web site, they were unknowingly redirected to TicketsNow, a resale site that charged as much as four times more than the face value of each ticket. In some cases, consumers purchased "phantom tickets" that the reseller didn't even possess. In a complaint simultaneously filed and settled, the FTC charged Ticketmaster and its affiliates with deceptive and unfair practices in violation of Section 5 of the FTC Act. The settlement calls for Ticketmaster to refund the difference between the original price of each ticket - $95 maximum - and the amount charged by TicketsNow - up to $400. Consumer restitution could top $1 million. The settlement also calls for dramatic changes in ticket practices. Now, when Ticketmaster redirects consumers to TicketsNow, this must be "clearely and conspicuously" disclosed. Also, resellers must clearly disclose if the tickets offered are in-hand or speculative.

Western Pennsylvania Ambulance Firms Sue Insurers Over Tactics
Highmark and five other insurance companies deliberately send ambulance service reimbursements to their enrollees, instead of to the ambulance providers, in order to coerce the providers into signing contracts that offer the insurers discount, a lawsuit claims. A group representing more than 200 Pennsylvania ambulance companies and 11 individual ambulance services filed the federal racketeering lawsuit in Pittsburgh. Lawyers for the plaintiffs argued that state law requires the insurers to pay ambulance companies directly, the same way they pay other medical service providers. Instead, the insurers tell ambulance companies they'll pay them directly only if they sign the discount contracts. The circumstance has been an issue for years, but the recession pushed ambulance companies into taking legal action.

Class Action Against NCAA Yields 'Historic' Ruling
A federal judge has denied the National Collegiate Athletic Association's motion to dismiss an antitrust class action over the use of student athletes' images and likenesses, and a legal team for the athletes is celebrating getting the "green light" to delve into discovery. The class action was filed by a former UCLA basketball player last year. Among other allegations, the suit says the NCAA works together with Collegiate Licensing Co. and a video game company to distribute products using players' images without compensating them. In her order, the judge wrote that the player's allegations "sufficiently support his theory that, after NCAA and its members obtain releases from student athletes, CLC brokers agreements that do not compensate him or the putative class members for the use of their images. This demonstrates CLC's role in the alleged conspiracy."

Allegheny County Judge Rules Claims Against Hospital Can Proceed
An Allegheny County judge has ruled that a law firm can pursue its class action claims that University of Pittsburgh Medical Center overcharges for copies of patients' records. The judge denied UPMC's motion to dismiss three cases brought by the same firm, but threw out some of the claims against the hospital system. The law firm claims UPMC's fees for copies of electronic patient records exceeds limits set in the state Medical Records Act and that costs for producing copies of electronic records are lower than paper or microfilmed records. Lawyers for UPMC argue the law allows hospitals to bill any "reasonable rate" for electronically stored records. Charges for copies of paper records are capped at $1.50 a page. The class action suit asks the court to grant refunds to patients who paid for UPMC records since 2005. The judge concluded that the law limits charges to "actual expenses," meaning "that costs are not padded. Consequently, UPMC may charge only its actual and reasonable fees."

Water and Sewer Charges Spark Suit
Two women filed class action lawsuits against the Pittsburgh Water & Sewer Authority and the Allegheny County Sanitary Authority over two new fees that appeared on bills this year - a $5 monthly charge for line insurance and a 5 percent fee based on total water consumption. "It's a violation of the Pennsylvania Consumer Protection law and Unfair Trade Practices," said the attorney who represents both women. "We're looking to have them credit accounts and enjoin them from using improper billing procedures." The women claim that the 5 percent fee tacked onto bills - called the Distribution Infrastructure System Charge - was illegally calculated. That rate was supposed to start in January, but was charged for the entire consumption period of December on one woman's bill and for even longer on the other. The $5 insurance - which was added as an optional monthly fee to cover some failures of water or sewer lines on private property - is improperly added because the fee is charged automatically, and customers who don't want the insurance must opt out.

Class Definition Keeps Sprint Case in Federal Court a Little Longer
The 7th U.S. Circuit Court of Appeals has let a class action filed against Sprint Nextel Corp. stay in federal court at least a little longer, overruling a decision by the U.S. District County for the Northern District of Illinois that would have kicked it back to state court. The plaintiffs wanted the case returned to Kansas state court, where it was filed, based on the home-state exception to the Class Action Fairness Act of 2005, which the defendant invoked to move the case to federal court. According to the appellate court's opinion, the lawsuit accuses Sprint of conspiring "with other cell phone providers to impose artificially high prices for text message service." The plaintiffs brought the case on behalf of all Kansas residents who bought the service between 2005 and 2008. The problem with shifting the case back to the state court now, the appellate court held, was that the plaintiffs hadn't presented enough evidence to meet the test that two-thirds of class members are from the state: The class was defined as those having a Kansas cell phone number and receiving their bill at a Kansas address, which could include people or companies outside the state, the court said. "On remand, the district court should give the plaintiffs another opportunity to prove that the proposed class satisfies the requirements of the home-state exception," the judges wrote.

Class Decertification in Pfizer Off-Label Marketing Case Upheld
A class of plaintiffs in a case against Pfizer over its alleged off-label marketing of an epilepsy drug was properly decertified when Pfizer presented new evidence that the class's main expert didn't prove class members' individual doctors relied on the marketing, the Pennsylvania Superior Court said. The court also ruled a class can be decertified after a decision on the merits if new evidence comes to light. The panel vacated a summary judgment motion in favor of Pfizer now that the class is decertified because leaving the judgment intact would preclude absent class members from bringing individual suit on the same issue.

Court Says, With or Without Class Status, Federal Court Will Hang On to Case
The 7th U.S. Circuit Court of Appeals has cleared up a jurisdictional question related to the Class Action Fairness Act of 2005, ending what a judge called the potential for "ping-pong" between the federal and state courts. The court ruled that even if a case transferred to federal court under the act fails to win class certification, it should still continue in the federal system. "Behind the principle that jurisdiction once obtained normally is secure is a desire to minimize expense and delay," the judge wrote. "If at all possible, therefore, a case should stay in the system that first acquired jurisdiction. It should not be shunted between court systems; litigation is not ping-pong." The ruling grew out of a 2007 state lawsuit against Learjet seeking class action status for Learjet buyers with respect to breach of warranty and product liability claims. Under the act, Learjet got the case removed to federal court, where a judge denied class decertification and kicked the case back to state court. The Class Action Fairness Act was designed to strengthen defendants' position by letting them transfer class action litigation from state to federal court, where it's more difficult to win class certification.

Lawyer Violated Bar Rules with Class Action Benefiting Just 7 People
A law firm partner violated professional rules by orchestrating a $7 million class action settlement that benefited only seven people rather than all Miami taxpayers, a judge ruled in a disciplinary case brought by the Florida Bar. The judge found that the lawyer breached his duty to the proposed class action and accepted an excessive attorney fee of $2 million for his work on the settlement, which was thrown out when its limitations were uncovered. "No rational person could explain how seven individual plaintiffs could end up dividing $5 million in settlement proceeds and their attorneys $2 million," the judge said. The disputed settlement with payments to only seven people "under the facts of this case was prejudicial, illogical and unexplainable," the judge continued. Citizens filed a constitutional challenge over the fire fee imposed by the cash-strapped city in 1998. In 2004, the lawyer and the city negotiated the settlement, which omitted refunds to thousands of taxpayers. In 2008, a judge approved a $15.5 million settlement to pay refunds to up to 53,000 property owners. When examining the work of attorneys involved in the settlement, the Bar found no probable cause against the then-mayor and a former city attorney.

Class Action Denied for Madoff Investors' Suit Against Bank
People who invested with imprisoned swindler Bernard Madoff through Westport National Bank will have to work a little harder to get back lost investment money. A federal court judge has ruled that the victimized investors cannot file a class action lawsuit against the bank. The judge also denied the bank's motion to dismiss. The 26 plaintiffs were suing for part of $60 million lost from accounts the bank invested with Bernard L. Madoff Investment Securities. All together, more than 200 investors could have been part of the class. The plaintiffs argue that the bank breached its contractual duty to serve as custodian of the accounts, a role designed to prevent fraudulent investment activity. The judge determined that the plaintiffs' complaints about the bank's activities were "within the bounds" of the Securities Litigation Uniform Standards Act of 1998. That federal law limits to 50 the number of plaintiffs filing a securities-related lawsuit in state court.

Securities Class Actions Falling Off as Credit Crisis Dwindles
An annual report released by Stanford Law School's Class Action Clearinghouse and Cornerstone Research found that securities class action suits fell 24 percent in 2009 as litigation related to the credit crunch and subprime crisis began to slow. The study follows a similar report released recently by NERA Economic Consulting, which also showed that the surge in securities class actions may have peaked. Clearinghouse researchers previously concluded in a midyear assessment that class action filings had fallen off because most major financial institutions linked to the precipitous economic downturn had already been hit with suits in 2008. According to the year-end Stanford study, the number of companies sued on stock fraud claims dropped from 223 in 2008 to 169 last year, compared with an annual average of 197 over the previous decade. The study also found that 2009 filings were also marked by an unusually long delay between allegations of wrongdoing and ensuing legal action. The study suggests that the lag time is a result of law firms revisiting old cases, particularly in the second half of the year, when the median lag time of 100 days tripled its historic average.

Ex-Pennsylvania Judges Granted Partial Immunity in 'Kids for Cash' Case
Two former Pennsylvania state court judges accused of accepting $2.6 million in kickbacks to send juvenile offenders to specific detention centers are immune from some charges in civil lawsuits, a federal judge has ruled. The judges resigned from the bench last year and are awaiting trial on criminal racketeering charges in what has become known as the "kids for cash" scandal. More than 400 juveniles and their parents filed civil suits against the judges in 2009, alleging they regularly denied juveniles their right to counsel and a fair and impartial trial. According to lawsuits, the judges also sent some juveniles to detention centers for minor offenses, despite the recommendations of probation officers, in return for payment from the facility operators. The suits seek compensatory and punitive damages for a class of thousands of juveniles sentences since 2000. In the civil case, a judge partially granted the defendants' motions to dismiss, determining that the judges are immune from charges relating to their judicial decisions but not for their administrative acts. Judges are immune from civil suits based on their judicial rulings as long as the judges had jurisdiction to act. One judge was granted immunity on most of the counts because of his actions, including delinquency determinations and sentencing, occurred in the courtroom and were judicial in nature. He will still face claims related to his administrative acts, including discussions with detention center builders and alleged attempts to hide the money he received from those defendants. The judge upheld most of the charges against the other judge, however, because his actions, such as the signing of agreements with the detention centers and budgetary decisions, were administrative rather than judicial.

9-Figure Settlement in RICO Class Action Approved
A Pennsylvania federal judge has granted final approval of a class action RICO settlement estimated to be worth at least $184 million and possibly as much as $530 million to a class of mostly elderly investors who say they were lured by deceptive marketing practices to purchase long-term annuities that often had maturity dates beyond their own life expectancies. The judge also awarded nearly $17.7 million in attorney fees and $550,000 in expenses to the team of plaintiffs lawyers. The judge was assigned to preside over several class actions brought on behalf of more than 387,000 investors that accused AILI of conspiring with sales agents, trust attorneys and annuity marketing firms to entice older investors to purchase annuities that simply weren't suitable given the investors' ages and the substantial "surrender charges" incurred for early withdrawal. The main thrust of the suits was that the investments were "highly illiquid," meaning that the investors' funds would be tied up for long periods. In approving the settlement, the judge found that the plaintiffs lawyers had persuaded AILI to cure that problem by modifying the policies. Under the terms of the settlement, AILI denied any wrongdoing, but agreed to modify significant aspects of the annuity policies, most notably removing surrender charges for class members whose policies are in deferral while allowing them to obtain the accumulated value of their annuity over a period ranging between two and seven years. Class members who can establish fraud can receive even greater relief by opting to pursue a claim that challenges the specific marketing practices used in their case.

Sears Wins Dismissal of Class Action Over Kmart Merger
The plaintiffs in a long-running class action against Sears, Roebuck & Co. over its merger with Kmart Corp. had survived a motion to dismiss, and they had managed to win class certification. However, they suffered a potentially fatal setback when a Chicago judge granted Sears' motion for summary judgment. The plaintiffs allege that Sears and its CEO had made misleading statements by failing to disclose merger discussions with Kmart before and through the class period leading up to the deal's consummation in 2004. Sears and its CEO argue that they had no duty to disclose the negotiations. The judge let the case proceed through discovery, but once the record became complete, he found that the defendants had not made any material omissions or misleading statements. The plaintiffs allege that investment fund ESL Partners had a duty to make a securities filing regarding its intent to effect change in the ownership of Sears prior to the class period.

Securities Class Actions May Have Hit Their Peak
After three years of significant growth, federal securities class actions dropped slightly in 2009 - a sign that the flurry of activity spurred by the credit crisis has died down. NERA Economic Consulting has predicted that federal securities class action filings will top out at 235 in 2009, down by 7 percent from the 253 filed in 2008. Another securities class action tracker, the Stanford Securities Class Action Clearinghouse and Cornerstone Research, does not release its annual report until the year is over, but its tally showed 169 filings as of mid-December, compared to 223 filings for all of 2008. That would represent a 24 percent decrease. The credit crisis, which hit in 2007, has been the biggest factor fueling the recent increase in federal securities class actions, according to the NERA report. For example, NERA reported only 130 filings in 2006, or slightly more than half as many as in 2008. Cases relating to the credit crisis made up 40 percent of the securities class actions that NERA tracked in 2008. That percentage fell to 30 percent in 2009. Credit crisis-related filings were almost twice as common during the first half of the year than during the second, providing further evidence that those types of actions are on the way out. The year saw a significant decline in the number of auction-rate securities cases, which spiked in 2008 with 22 filings. NERA predicted just seven such filings in 2009. Auction-rate securities are investments that involve long-term bonds or preferred stock on which the interest rates are periodically reset.

R.J. Reynolds Failed to Cash 'Camel Bucks,' Suit Says
A California federal court class action claims that R.J. Reynolds Tobacco Co. canceled its "Camel Cash" promotion without allowing participants to redeem their certificates of merchandise. The complaint asserts causes of action for promissory estoppel and unfair and deceptive business practices in violation of California law. By advertising the promotion in publications and on packs of cigarettes, R.J. Reynolds made "unfair and deceptive" representations, the suit says. According to the complaint, the tobacco company introduced the Camel Cash program in 1991 to boost sales of its Camel brand cigarettes. Each pack of the cigarettes contained a certificate that could be saved and redeemed for merchandise listed in catalogs the company created. According to the complaint, the program was so successful that Camel's market share almost doubled, jumping from 4 percent at the program's inception in 1991 to 7.39 percent at its 2007 conclusion. However, the tobacco company stopped the promotion allegedly without providing merchandise for people to buy with their certificates. The company ended the program after people began to obtain certificates using Web sites like eBay to collect large quantities and get more expensive items. The plaintiffs said they could not cash in "hundreds of thousands" of certificates they had saved. People would not have bought Camel cigarettes or collected Camel Cash certificates if they knew they would not be able to trade in the certificates for merchandise, the suit claims.

Judge Gives Initial Nod to $350 Million Pact in Class Action Against United Healthcare
A federal judge in New York has granted preliminary approval to a $350 million settlement of a class action alleging United Healthcare Corp. shortchanged 21 million patients and doctors on reimbursements for medical claims. The judge ruled that proponents of the pact were convincing, and that objectors failed to demonstrate that the insurance company was getting off cheap. The suit accused the company of using a rigged database to determine the amount of reasonable reimbursements for out-of-network medical treatments. The chief question following the approval is whether the settlement will lead toward a resolution of similar class actions in Newark against Aetna Health Inc. and Cigna Insurance Co. The defendants in the Newark cases figured their reimbursement rates by using the same allegedly flawed database that United Healthcare Corp. used.

Federal Judge Allows Class Action Over IRS Refund Notice to Proceed
A federal judge in Harrisburg has refused to dismiss a nationwide class action suit that says the agency's public notices about the availability of the refund violated due process. The ruling comes on the heels of a scathing decision earlier this year from a federal appeals court in Washington that revived a batch of similar suits alleging that the IRS' handling of the refund program violated the Administrative Procedures Act. The suit stems from a wave of litigation in which some of the biggest corporate taxpayers successfully challenged the 3 percent excise tax on long-distance telephone services.

Pennsylvania and New Jersey Courts Greenlight Class Actions Over Gift Card Fees
In a major setback for banks, federal judges in Pennsylvania and New Jersey have refused to dismiss a pair of class action consumer suits against TD Bank over allegedly deceptive practices used to market gift cards. In both decisions, the judges rejected TD Bank's argument that such suits, brought under state consumer protection laws, are pre-empted by the federal National Bank Act. At issue in both cases are so-called "dormancy fees" charged by TD Bank that reduce the value of the gift cards each month after a period of non-use. Typically, if a card is not used for more than six months, the bank begins charging a monthly fee of $2.50, the suits say, so that a $25 card could be completely depleted before the holder makes a single purchase. The central claim in the suit is that consumers are never properly warned of the fees, either at the time of purchase or in the materials that accompany the cards when they are presented as gifts. TD Bank moved for dismissal in both cases, arguing that the National Bank Act and the regulations promulgated by the Office of the Comptroller of the Currency completely pre-empts such claims.

Suit Claims Redbox Charges Late Fees Despite Promise Not To
A class action has been filed against Redbox Automated Retail on behalf of consumers who claim they were charged late fees on DVD rentals, even though the kiosk retailer advertises that it does not charge late fees. The suit comes as Redbox has filed suits against three Hollywood studios asserting antitrust violations. Redbox rents DVDs through 17,000 kiosks nationwide via venues including Wal-Mart and McDonald's. An Illinois resident who claims to have rented numerous DVDs from Redbox during the past year, said she was charged "excessive and illegal late fees" along with a "maximum charge" of $25 after she did not return two videos on time. She filed the suit against Redbox earlier this year. "While it boasts 'easy $1 a night DVD rentals with no late fees ever,' that is not the truth," the suit says. "Instead, Redbox charges its customers who return a movie even one minute late a late fee in the form of an illegal penalty." Specifically, she said, if a customer does not return a video by 9 pm on the day following the rental, Redbox charges that customer another $1 for renting the video the second day. Under the scenario, she said, "Redbox can effectively double, if not triple, its revenue on a single DVD, with virtually no increase in its costs, thus in fact closely matching the point of sales prices of its competitors, meaning Redbox is not a lower-cost alternative at all."

Court Revives Class Action Against Countrywide Over Alleged Kickback Scheme
In a huge setback for Countrywide Financial, a federal appeals court has revived a national class action brought by homebuyers who accused the lender of concocting a kickback scheme in which buyers were required to purchase mortgage insurance from one of a handful of companies that in turn took out reinsurance policies from one of Countrywide's wholly owned subsidiaries. A lower court has dismissed the case on standing grounds after finding that the buyers could never show they had been "overcharged" and therefore had no right to sue under the Real Estate Settlement Procedures Act. But the U.S. Department of Justice intervened in the appeal of that ruling and urged the court to revive the case and to declare that consumers have standing to sue whenever they allege a violation of RESPA's anti-kickback provisions. Now, a unanimous three-judge panel has agreed and ruled that such an alleged kickback scheme, if proven, is a clear violation of RESPA, and that consumers have no duty under the law to show an overcharge to qualify for statutory damages.

Fraud Class Action Against Former Midway Games Executives Dismissed
After declaring bankruptcy earlier this year, the video game creator Midway sold its assets to Warner Brothers. However, not before the company's former shareholders sued its former executives for securities fraud. A judge recently granted the defendants' motion to dismiss. The plaintiffs alleged that the former Midway executives artificially pumped up the company's stock price through a variety of misrepresentations and omissions about Midway's financial condition. They complained that Midway belatedly announced $13 million in restructuring charges as a result of closing down a gaming company it acquired. However, the judge found the alleged omissions and misrepresentations were not material. He also noted that if he had reached the question of the defendants' intent, the plaintiffs' insider trading allegations would not have passed muster either.

Supreme Court Put Off by New Jersey Order that Defendant Foot Class-Notification Bill
Three U.S. Supreme Court justices have criticized a New Jersey judge's use of a means test to decide that a dating service sued for consumer fraud should pay the cost of notifying up to 1,600 potential class action beneficiaries. "To the extent that New Jersey law allows a trial court to impose the onerous costs of class notification on a defendant simply because of the relative wealth of the defendant and without any consideration of the underlying merits of the suit, a serious due process questions is raised," wrote the justices. Unlike federal class action law that puts the onus on the plaintiffs to pay the cost of notification, New Jersey court rules give judges latitude to allocate notification costs among the litigants.

Lawsuit Targets Major Credit Card Lender Over Alleged Excessive Charges
An Atlanta attorney has sued one of the nation's largest credit card distributors on behalf of a potential class of credit card holders in a complaint that reflects the public frustration with credit card lender practices that have already prompted some congressional reforms. The suit challenges a decision by Capital One Bank to raise interest rates on many of its existing credit card accounts following Wall Street's crash last year. The suit seeks restitution and damages for what it claims were excessive finance charges that Capital One began levying earlier this year on credit card accounts that were current and in good standing. The suit claims that Capital One doubled, tripled and quadrupled cardholders' annual interest rates without cause and applied the new rates retroactively to existing balances. The cardholders could avoid the new interest rates only by closing their accounts.

MetLife and Class Present Final Arguments on Disqualification of Debevoise
MetLife and the 8.6 million-member plaintiff class that is suing the insurance giant completed a final round of briefing over a judge's last minute disqualification of Debevoise & Plimpton as MetLife's trial counsel. The parties' briefs lay factual contentions on the plaintiffs' claim that Debevoise must be disqualified under the attorney-witness rule because there is a likelihood the testimony of four Debevoise lawyers will be adverse to MetLife. The class seeks $8 billion on its claim that class members were shortchanged as a result of a misleading prospectus issued by MetLife in conjunction with its conversion in 2000 from a mutual company to a stock company. Both sides have included four Debevoise lawyers on their witness lists. Earlier this year, the judge disqualified Debevoise, relying on a ruling he made two years earlier on a discovery motion. In that ruling, which involved attorney-client privilege, the judge held that Debevoise had a conflict because it had previously represented MetLife's policyholders and was continuing to represent the company after the two entities' interest had become adverse.

Chevron Accuses Ecuadorean Judge of Taking Bribes in Mammoth Tort Case
The decades-long legal battle between Chevron and Ecuador took yet another dramatic turn when the company announced that it has videotapes revealing a $3 million bribery scheme implicating the judge overseeing a multibillion-dollar civil suit filed against the company by indigenous residents of the country's Amazon Basin. The latest turn has Chevron firing back against the 30,000 plaintiffs and the Ecuadorean legal system. The case stems from environmental contamination allegedly caused by years of oil drilling in the region conducted by Texaco, which Chevron bought for nearly $35 billion in 2000. Chevron says that it has provided authorities in the U.S. and Ecuador with video recordings of the judge in the case and individuals who identify themselves as representatives of the Ecuadorean government and its ruling political party. The company claims the recordings show an alleged political party representative seeking $3 million in bribes in return for handing out "environmental remediation contracts" to two businessmen after a verdict is handed down by the judge later this year. Of that sum, $1 million would go to the judge, $1 million to "the presidency" and another $1 million to plaintiffs in the case.

In $2.9 Million Blast Fax Settlement, Plaintiffs Get Coupons
Business service and supply giant Pitney Bowes has agreed to settle a "blast fax" class action by giving $26 coupons to plaintiffs for each week they received an unwanted fax. The $2.9 million settlement ends a case originally filed in Georgia before being transferred to federal court. It began with Pitney Bowes' 2007 purchase of the corporate assets of Laser Life, a Georgia-based supplier of toner and other printer products. Among those assets were Laser Life's client list, which included more than 2,000 fax machine numbers the company used to advertise its products. When Pitney Bowes assumed the operation, it began sending out promotional advertisements for its products to those numbers. Under the law, a fax advertisement may be mailed only with the permission of the recipient, or if there is an existing business relationship between the send and the recipient.  

Class Action Proceeds Against Subaru Over Defective Odometers
A federal judge has refused to dismiss a potential class action brought by customers who claimed Subaru sold or leased them cars with defective odometers. The plaintiffs charged that the defective odometers overstated the mileage on their vehicles and thereby shortened their warranty periods, decreased resale values and, in the case of leased authorities, penalized drivers for "excessive mileage." Subaru argued the Odometer Act does not apply to original factory-installed odometers, which were performing consistently with the manner in which they were designed and made to operate. Customers claimed that when they began complaining to Subaru that their odometers were overstating mileage, the company allegedly responded falsely that the odometers were accurate within a specified range. The plaintiffs are seeking money damages in the millions and disgorgement of excessive lease fees. They also are asking Subaru to correct or replace the defective devices.

Hospital Sued Over Charges for Copies
A law firm has sued Magee-Womens Hospital, claiming the Pennsylvania hospital overcharges for providing copies of medical records. The 20-page class action lawsuit was filed in Allegheny County Common Pleas Court. The same law firm sued another hospital with similar allegations. The lawsuit claims that charges connected to the records must be cost based, but that Magee charges the maximum allowed by the state regardless of what it costs the hospital to provide the copies. The lawsuit is seeking refunds for everyone who has bought copies of records since 2005.

Former PA Judges Ask for Reconsideration of Guilty Please
Two disgraced former Luzerne County judges have asked that a federal judge reconsider his decision to reject their plea agreements. Both judges made a joint filing, petitioning the judge to reinstate their agreed-upon sentence of 87 months in prison because neither could be found at fault for his post-plea hearing actions. Neither attempted to "obstruct or impede justice" or contradict the government's evidence in public comments, as the judge ruled, they argued. Both men had conditionally pleaded guilty early this year to accepting more than $2.6 million from the owner and builder of a private juvenile detention center, but the judge rejected the plea citing both judges' post-plea hearing actions. One judge was "self-serving," and another was an obstructionist. "In light of the post-guilty plea conduct and expressions from the defendants that contradict some offense conduct, the negotiated pleas, which were grounded in the good faith of the government, are well below the sentencing guidelines for the charged offenses," the judge wrote.

Class Certification Denied in Fraud Suit Over Marketing of Relacore
A suit alleging that the maker of the dietary supplement Relacore fraudulently marketed it for use in cutting belly fat and stress is not right for class action treatment, a New Jersey appeals court ruled. The judges said that there are too many possible variables to satisfy the requirement that questions of law or fact common to the class predominate over questions affecting only individual members. The marketing campaign for Relacore varied over time. Some advertisements claimed the drug could reduce belly fat while others touted its ability to reduce stress, enhance mood or fight metabolic syndrome. As a result, Relacore users might have bought the product for different reasons and been disappointed in different ways by its alleged failure to measure up to the advertised promises. The lead plaintiff alleges that she bought Relacore in April 2004 based on advertised claims that it would reduce belly fat but that after 90 days of using the product as directed her waistline not only didn't shrink but increased. She sought certification of a class comprised of all New Jersey residents who bought Relacore since its introduction in 2002. Her complaint included claims under the New Jersey Consumer Fraud Act and under common law or fraud, unjust enrichment and breach of express and implied warranty. In 2008, a judge denied certification after identifying 14 individual factors that would necessitate an evidentiary hearing for each class member on the fraud claims. Those factors included the reason for buying Relacore, whether buyers were influenced by a personal recommendation, how the buyers' underlying health might have affected the product's efficacy, how much they paid and whether they sought or obtained a refund.

Debtors File Class Action Alleging Attorneys Conspired to Defraud
In a federal class action suit, the plaintiffs allege two Texas lawyers conspired with others to defraud debtors who sought help because of credit card and unsecured debt and to "evade" Texas laws that regulate consumer debt management services, attorney-client solicitation and lawyer advertising. "By masquerading as attorney referral services, unregulated debt negotiators and exempt attorneys, the defendants collaborate to evade strict state consumer protection regulations enacted to protect unknowing debtors," the plaintiffs allege. The suit claims that the defendants run a nationwide operation, promoted by television and Internet advertising, to defraud debtors that are drowning in credit card and unsecured debt. The plaintiffs, three residents of San Antonio, bring a precipatory liability-conspiracy cause of action against all the defendants and also bring causes of action under the Debt Management Services Act because the defendants failed to register with the Texas Office of the Consumer Credit Commissioner.

Tort Reform Leader Brings Class Action Over Towed Car
A man whose name is synonymous with tort reform has filed a class action against the city of Sacramento, California, the city's police chief, city police officers and a tow truck company for towing his car after he left in a no-parking zone. What's more, he is seeking damages from the tow truck company under the Business and Professions Code, which is California's Unfair Competition Law. The man has also pledged to give any award money left over from paying his costs to "fighting frivolous class action lawsuits." The man claims he and his family parked in a "no parking" spot to grab fast food. He knew he could risk a ticket, but he figured he would be inside for less than an hour. He claims his car was towed illegally by police because state law requires the city to post signs warning would-be illegal parkers that their vehicles will be towed.

Philip Morris to Appeal $1.9 Million Award to Widower of Smoker
A jury awarded $1.93 million to the husband of a woman who smoked two packs of cigarettes a day for more than 40 years. The Florida jury deliberated for more than eight hours before handing down the verdict. The Marlboro smoker started smoking when she was 16 and died from lung cancer in 1996 at 73. Her husband filed suit against Philip Morris, alleging the tobacco company negligently concealed facts about the dangers of smoking. The jury found Philip Morris was liable and decided on damages, awarding total damages of $5.3 million but assiging 63.5 percent of the blame to the smoker. About 8,000 sick smokers are suing statewide in individual spinoffs from a 1994 class action that was disbanded on appeal. The class action named for a Miami Beach pediatrician resulted in a $145 billion verdict, which was overturned.

Court Reinstates Consumer Fraud Class Action Against Snapple
In a 30-page ruling, a three-judge panel of the 3rd U.S. Circuit Court of Appeals revived a New Jersey statewide class action against Snapple, finding that federal regulation does not pre-empt consumer fraud claims involving Snapple's "All Natural" labeling. The case began when a New Jersey woman bought two bottles of Snapple in 2007, paying the "premium price" of $1.09 for each. She was apparently surprised and distressed to discover that her Snapple, which was labeled "All Natural," contained high-fructose corn syrup. She filed a class action in New Jersey, alleging consumer fraud and breach of warranty. Snapple's lawyers had the case moved to federal court, where a judge dismissed it, ruling that her claims were pre-empted by FDA regulation of food and beverage labeling. The 3rd Circuit disagreed. The appellate court found that FDA policy left room for state regulation in food and beverage labeling.

Court Invokes 'Iqbal' in Affirming Dismissal of Alien Tort Claims Against Coke
In a 34-page ruling that one defense lawyer describes as "a sweeping review of the Alien Tort Statute," a three-judge panel of the 11th U.S. Circuit of Appeals held a Miami federal district court's dismissal of four cases claiming that Coca-Cola and its two Colombian bottling subsidiaries were liable for the murder and torture of trade unionists by Colombian paramilitary forces. Citing the Supreme Court's now infamous ruling in Ashcroft v. Iqbal, the court concluded that the plaintiffs' complaints "fail to sufficiently plead factual allegations" to establish subject matter jurisdiction and state a valid claim. The plaintiffs alleged in four lawsuits that two Coca-Cola bottlers collaborated with paramilitary forces in what the 11th Circuit called "the systematic intimidation, kidnapping, detention, torture and murder of Colombian trade unionists." The complaints didn't accuse Coke or its bottlers of direct responsibility for the crimes, but sought compensation under the Alien Tort Statute and the Torture Victims Protection Act for the corporations' alleged aiding and abetting of the paramilitary forces.

Settlement OK'd in GE Retirement Class Action
A federal judge has approved a settlement worth just over $40 million between General Electric and retirees over the company's decision to put up GE stock as an investment and matching contribution in its retirement program. Retirees contended the investment of company stock was not economically prudent and that their retirement benefits suffered as a result. Notices of the class action were sent to more than 318,000 potential members. A settlement was reached after discussions mediated by a retired state court judge. About $10 million of the settlement will go to payments, of up to $5,000 each, for retirees who claimed they were damaged financially by GE's investments. GE also agreed to make another $30 million in "structural changes" to the retirement plan. The judge upheld as "reasonable" the awarding of $10 million in attorney fees for plaintiffs lawyers, money the judge determined should not come out of the $40 million settlement. About three-quarters of the members of the class are current GE retirees and 25 percent are former beneficiaries of the pension plan.

Judge OKs $500 Million Settlement by Social Security Administration
The Social Security Administration has agreed to pay an estimated $500 million to people whose benefits it suspended or denied between January 2007 and April 2009 under a settlement given preliminary approval by a judge. The government also agreed to change the policy under which it denies or suspends payments for people with outstanding arrest warrants. People whose benefits were denied or suspended between 2000 and 2006 also will have a chance to reinstate their beliefs. The proposed nationwide class involves about 200,000 people, including 80,000 whose benefits had been suspended or denied since January 2007. The lawsuit revolves around the Social Security Administration's policy for suspending or denying benefits for people with outstanding felony warrants. The plaintiffs argued the policy went beyond a provision in the Social Security Act that's meant to prevent people from using Social Security money to flee prosecution. One plaintiff allegedly bounced a check in Texas and was unaware of his outstanding warrant until his disability benefits were cut off, for example. Plaintiffs also argued that the government's use of a computer system that matched names in warrant databases to those at the Social Security Administration led to people without any outstanding warrants being denied their benefits.

Plaintiffs Can Re-File Petland Puppy Mill Suit
Pet owners' allegations against Petland for deceptively selling pets from puppy mills are not specific enough to support racketeering charges, an Arizona federal judge has ruled, granting the pet store chain and its primary supplier's motions to dismiss. However, the judge left open the possibility that the consumers could fix the deficiencies in the lawsuit with an amended complaint. Petland, the nation's largest pet store chain, issued a statement on its Web site following the judge's decision stressing its opposition to substandard breeders. Six pet owners filed the lawsuit against the Ohio-based chain and its primary supplier for allegedly conspiring to deceive consumers into paying high prices for dogs from puppy mills that were prone to disease and health problems. The pet owners, including two members of the Humane Society of the United States, filed the lawsuit on behalf of tens of thousands of people nationwide who have bought puppies from Petland since 2004. The lawsuit alleged that the supplier gets its animals from puppy mills and Petland advertised its dogs as the "finest available" even though they allegedly came from mass-breeding establishments. The plaintiffs contended the defendants violated federal mail and wire fraud laws by advertising that Petland's pets were of the highest quality even though they were unhealthy and prone to disease.

Merck Readies for First Fosamax Trial
Merck & Co. is slated to fight the first numerous U.S. lawsuits brought by patients who claim they suffered jaw damage from the company's widely used Fosamax treatment for osteoporosis. Some 1,280 plaintiff groups, involving almost 900 cases, have alleged jaw problems due to Fosamax, a one-time blockbuster product that recently began facing competition in the United States. A judge will hear arguments from a 71-year-old Florida plaintiff who claims to have suffered dental and jaw problems as a consequence of taking Fosamax from 1997 to 2006. Merck claims the plaintiff's medical problems were not caused by Fosamax.

Court Affirms Dismissal of Lead Pollution Suit
A federal appeals court has upheld the dismissal of a lawsuit brought by neighbors of a gun club who said lead from bullets fired there contaminated nearby soil and water. The court said the Simsbury-Avon Preservation Society failed to prove that the Metacon Gun Club contaminated local wetlands in violation of the Clean Water Act. The appeals court said plaintiffs failed to prove that Metacon is operating a hazardous waste disposal facility without a permit in violation of the Resource Conservation and Recovery Act. Six homeowners who live near the gun club formed the preservation society and then sued Metacon in 2004. The plaintiffs claimed the operation of the gun club resulted in water and soil contamination from "thousands of pounds of lead" deposited into the environment since 1990. They said the area shows a presence of lead well above that allowed by state environmental laws.

Most Claims Dismissed in Wellbrutin Case
A federal judge has dealt a major setback to the "indirect purchaser" plaintiffs in the massive antitrust litigation over the marketing of Wellbutrin XL, a popular anti-depressant drug, by tossing out most of the claims on standing grounds. The plaintiffs, a group of employee benefit plans, were aiming to pursue the case as a class action alleging claims under the consumer protection laws of 41 states and the antitrust laws of 23 states. But the judge has now whittled the case down to a fraction of its original size, declaring that the plaintiffs are entitled to pursue antitrust claims only under the laws of four states and consumer protection claims under the laws of two states. In her opinion, the plaintiffs have standing only in the states where the benefit funds reside or where the funds have members who have actually been reimbursed for Wellbutrin purchases. Significantly, the judge refused to put off deciding the standing issues until a later stage of the litigation as the plaintiffs requested.

Judge to Rule in Freddie Mac Subprime Mortgage Fraud Suit
An Ohio federal judge will decide soon whether to throw out a multibillion-dollar shareholder suit accusing mortgage backer Freddie Mac of subprime-loan fraud. The Ohio Public Employees Retirement System filed the class action securities fraud suit in 2008 after Freddie Mac disclosed a $2 billion subprime-related loss for third-quarter 2007. The suit alleges Freddie Mac and its former top executives lied about the company's subprime mortgage exposure. Freddie Mac has urged the judge to dismiss the complaint, saying it fails to meet federal pleading standards for securities fraud.

Certification Granted in Babies 'R' Us Price Inflation Suit
Consumers alleging that Babies "r" Us eliminates competition by conspiring with manufacturers to prevent Internet retailers from discontinuing products have demonstrated that class-wide issues and evidence predominate over individual claims, a federal judge has found in granting class certification. The judge ruled that the named plaintiffs, seeking to represent thousands of customers of the baby products retailer nationwide, have met the requirements of Federal Rule of Civil Procedure 23. Thirteen Babies "R" Us customers filed suit in 2006 alleging that the company forced manufacturers to create policies that would prevent retailers from discontinuing products too much, in violation of federal antitrust laws. The pricing scheme described in the suit includes specifying a manufacturer's suggested retail price, prohibiting discounting below a set level and designating who can carry a product, all of which effectively banned Internet-only retailers. Babies "R" Us wanted to force customers to pay inflated prices, the suit says, because it was threatened by the deep discounts offered by Internet sellers.

Pair Being Held On Immigration Charges File Suit
Two men being held on immigration charges have filed a federal lawsuit claiming that they and more than 1,000 people like them across Pennsylvania are being detained indefinitely with no chance to make bond. Filed on their behalf by the ACLU, the lawsuit names two immigrants, one who immigrated from Ghana in 1990 and another who immigrated from Trinidad and Tobago in 1981. The suit seeks class action status to represent all similarly situated people in Pennsylvania. The issues argued included a challenge by the federal government as to whether such claims can be filed on behalf of a class, as well as whether the men should be granted individual detention hearings. One of the immigrants, who has been a legal citizen since 1996 and was convicted of stealing credit reports, claims he was moved to a prison after he served his sentence to wait pending his possible removal from the country. He claims he has been held for a year, and the other claims to have been held for 18 months.

Judge Appoints Lead Counsel in Aetna Class Action
A judge has ended two months of plaintiffs lawyers' squabbling and picked two firms to take the lead in a class action potentially worth hundreds of millions of dollars against Aetna Health Inc. The judge selected one attorney to chair a seven-firm plaintiffs' executive committee and coordinate the litigation, which accuses Aetna of underpaying reimbursements for out-of-network health care. Rival teams of plaintiffs attorneys had been negotiating since May to divide the work without ceding too much power or the right to hefty portions of any fees. The suit accuses Aetna of knowingly using a database created by a United Healthcare Group subsidiary, Ingenix, that was rigged in the company's favor to determine how much money millions of patients and their providers would receive in "usual, customary and reasonable" reimbursements for care performed by out-of-network providers. Besides the Health Net settlement last year, other challenges to the database have prompted a proposed $350 million settlement with UHG in federal court in Manhattan.

Class Action Over Deletion of Kindle Content Accuses Amazon of Acting Like Big Brother
Kindle users can now join a class action suit filed by Chicago-based plaintiffs that allege Amazon violated the device's terms of use when it deleted copies of George Orwell's "1984" and "Animal Farm" from Kindle users' electronic libraries. The complaint claim Kindle's terms of use gives owners "the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use and display such Digital Content an unlimited number of times." One plaintiff, a high school student, says he saw his copy of "1984" vanish before his eyes as he was powering up his Kindle to work on a summer homework assignment. Following public outcry, Amazon apologized and denied claims that it was acting like Big Brother. After explaining it had deleted the books after finding out they had been added to the Kindle store by a company that didn't own the rights, Amazon refunded customers' money and vowed never to do it again. But that didn't stop legal experts from debating whether Amazon had acted properly. The complaint says Kindle owners were harmed because notes that readers had stored on the device while reading the books had also been deleted. Although the notes are still accessible in a separate file, the plaintiffs allege that they are of no value on their own. The Kindle class includes everyone who owns or has owned a Kindle; the Big Brother class is anyone who purchased an e-book through the Kindle store that was remotely deleted; and the subclass is everyone in both classes, plus those who lost notes.

Anonymous Donation Brings Neurontin Test Case to Sudden End
In a case described as a long shot, the first trial of more than 1,200 lawsuits claiming that Pfizer's epilepsy drug Neurontin increased suicide risk was dropped. The trial was on behalf of a 39-year-old woman who took the drug before hanging herself in 2004. The family dropped the suit against Pfizer after one full day of trial in Boston. The reason? After hearing how much the family was seeking from Pfizer, an anonymous friend of the family agreed to donate a substantial percentage of that amount to a trust established for the education and care of the dead woman's daughter. The only request the donor had in return for the donation was that the woman's 10-year-old daughter be spared the ordeal of a trial.

Court Starts Clock on Asbestos Plaintiffs' Claims
A Pennsylvania federal judge has given plaintiffs 60 days to produce medical records by qualified experts in support of their claims or face dismissal, withdrawing an earlier order that allowed an indefinite tolling of the limitations period. The cases had been dismissed without prejudice in 2002 to address what the judge called a "mass filing of asymptomatic asbestos cases." The recent order returned the cases to the active docket in an effort to enforce the provisions of a 2007 order that required plaintiffs to submit a diagnosing report in support of their claims. The 2002 order addressed what the court said were findings based on mass screenings by asymptomatic plaintiffs that depleted funds, "some already stretched to the limit, which would otherwise be available for compensation to deserving plaintiffs." Defense lawyers claim the new order could theoretically result in an increased number of nonmalignant cases being reintroduced, but plaintiffs' counsel cannot rely on mass screening reports or the reports of suspect doctors previously identified by the court.

Class Certification Denied for Fed-Ex Employees
In a wage-and-hour class action complaint, FedEx employees alleged that the company paid them only for their scheduled work time, not for the full time period between when they punched in and out on a manual clock. They also alleged that FedEx did not pay them for breaks, as required by state law. A panel of judges concluded that individual facts, rather than class claims, predominated. "Adjudication of plaintiffs'' claims on a class basis would be swamped by individual factual inquiries into the activities of each employee during the gap period and during breaks."

Family Sues McDonald's for Foodborne Illness
An Illinois couple has filed a lawsuit against McDonald's, claiming their son was hospitalized for four days after eating at one of the chain's restaurants. The suit is the first filed on behalf of a McDonald's patron sickened in a recent hepatitis A outbreak. Another lawsuit was filed by a man who got preventive shots after eating at the same McDonald's in Illinois. Attorneys are seeking class action status in that case on behalf of people who got preventive shots recommended by health authorities to diners at the restaurant. Twenty-two people have been sickened with more than 4,500 people receiving preventive shots during a recent hepatitis A outbreak that crossed from Illinois in to Iowa. Two food handlers at the restaurant are among the sick. Both lawsuits name the owner of the franchise as a defendant. He said in a statement that he took immediate action to address concerns raised by county health officials as soon as they identified the problem.

Bristol-Myers Pays $125 Million to Settle Plavix Securities Class Action
Bristol-Myers has agreed to pay $125 million to settle a securities class action that alleged it violated securities laws by hiding material information about their efforts to settle a patent lawsuit with the Canadian generic drug maker Apotex. In 2002, Apotex challenged Bristol-Myers' Plavix patent. In 2006, Bristol-Myers entered into negotiations with Apotex to settle the patent dispute. A tentative settlement agreement fell apart and Apotex briefly sold generic Plavix in the United States before a federal judge ordered it to stop. Though Bristol-Myers eventually prevailed in the patent case, Plavix sales suffered. Also, during the 2006 settlement negotiations, a Bristol-Myers executive told Apotex that Bristol-Myers would not launch a generic version of Plavix to compete with the Apotex version of the drug in 2011 if Apotex agreed to the settlement. Bristol-Myers is required to seek advance Federal Trade Commission review of any patent-related settlement agreements, but it didn't tell the FTC about this side deal. In 2007, the company agreed to pay a fine of $1 million for lying to the FTC, which led shareholders to file suit against Bristol-Myers in the security class action.

Shareholder Class Action Against Kmart Dismissed
A federal judge has dismissed a shareholder suit alleging two top Kmart officials tried to drive down the price of the company's stock by toying with asset values during and just after its bankruptcy reorganization. The judge threw out the putative class action that claimed the chairman and former president intentionally undervalued billions in real estate assets. The plaintiffs in the case bought shares in Kmart between 2003 and 2004. The plaintiffs alleged both executives undervalued the real estate so they could win control of the company at a low price and acquire Kmart shares for a low price. In filings with the SEC, Kmart stated that its plant property and equipment were worth more than $4 billion but the value was reduced to just $10 million "to adjust assets and liabilities to fair market value, and reflect the write-off of equity and application of negative goodwill to long-lived assets." in reality, the plaintiffs claimed, the value of the real estate was between $9 and $18 billion. The judge disagreed, claiming that "no rational investor reasonably would have concluded that $10 million represented the fair market value of the company's real estate."

Aetna Recoils at Five-Headed Plaintiffs Leadership of Class Action Suit
Five competing plaintiffs firms in a class action for millions of Aetna insureds and doctors have agreed to share the role of interim class counsel rather than pick one to take the lead, and Aetna doesn't like it. Aetna has complained to the judge in the case, arguing that a five-headed plaintiffs' leadership would be unwieldy and worsen bickering among the firms. It will also drive up litigation costs. The plaintiffs, the American Medical Association and individual doctors and patients, allege that Aetna underpaid reimbursements for out-of-network treatment by knowingly relying on a faulty database used by several insurers to compute the usual, customary and reasonable value of health care, and now it owes additional payments. The litigation consists of five cases that have been consolidated. A similar claim against a company smaller than Aetna settled last year for $255 million and generated $68 million in legal fees for plaintiffs lawyers, some of whom are still pursuing Aetna from outside the class.

Wal-Mart Gets OK for $17.5 Million Settlement for Race Bias
A federal judge in Arkansas has given final approval for Wal-Mart's plan to pay $17.5 million to settle a race discrimination lawsuit brought by black applicants rejected for truck driver positions. The lawsuit began in 2004, when an applicant filed suit after he unsuccessfully applied for a job with Wal-Mart as an over-the-road truck driver. He said Wal-Mart discriminates against blacks when hiring for driving positions in violation of federal civil rights laws. Those statutes protect a number of rights, including the right to make and enforce contracts. Courts have found that the laws prohibit race discrimination in hiring and employment. His class action suit was consolidated with another case in 2005. The amended complaint alleged disparate treatment and disparate impact and asked the court to award back pay, front pay, injunctive relief and punitive damages. A judge certified a class of about 4,500 plaintiffs nationwide and designated two subclasses: all black applicants for OTR truck driving positions at Wal-Mart who had been rejected since 2001, and all blacks who had been "deterred or thwarted" from applying for those positions because of their race. After participating in settlement and mediation sessions, the plaintiffs and Wal-Mart decided to settle the claims.

$10 Trillion Class Action Filed Against Iran
The former head of a conservative watchdog group has filed a $10 trillion class action against Iran. He is representing a California man whose brother died in an Iranian prison after taking part in a student protest. The complaint asks the judge to certify a class "on behalf of all Iranians who have had their civil and human rights violated, been assaulted, battered, tortured and even murdered to keep a vicious, illegitimate and inhuman radical regime in power." Iran is a frequent target of lawsuits in U.S. courts. Iran generally declines to defend the charges and leaves plaintiffs to try to collect a default judgment.

Consumer Antitrust Class Certified Against Babies 'R' Us
A federal judge has certified a class action consumer antitrust suit against retail giant Babies 'R' Us and a group of manufacturers of popular baby products after concluding that a price-fixing conspiracy could be proven entirely through "common evidence." The opinion clarifies the scope and effect of two recent decisions from higher courts that altered the pleading standards for price-fixing cases and made the test for winning class certification a more rigorous one. In the suit, consumers allege that Babies 'R' Us is the dominant retailer in the baby products market and that it used that power to eliminate competition from heavily discounting Internet retailers by coercing manufacturers to institute minimum price controls and bans on discounting. Although the ruling comes at a preliminary stage of the case, the judge found that the plaintiffs have begun to muster proof of their allegations. "The evidence indicates that BRU pressured the manufacturers to prevent internet discounting, they responding by curtailing specific retailers or implementing distribution policies targeting internet retailers and this response benefitted BRU but harmed the manufacturers."

Settlement Proposal Rejected in Wal-Mart Wage-and-Hour Class Action
A Massachusetts state court judge struck down efforts to settle a wage-and-hour class action against Wal-Mart. The plaintiffs' attorney has been accused by other lawyers in the case of going behind their backs to try to strike a collusive deal with Wal-Mart's lawyers. He denies the accusation and asserted that he had negotiated an excellent settlement proposal for the class that was worth $20 to $40 million. The class action is one of the few wage-and-hour cases out of more than 60 filed against Wal-Mart that hasn't settled. Wal-Mart has been accused of violating numerous wage-and-hour laws by denying mandated meal breaks and forcing employees to work off the clock. Other plaintiffs attorneys in the case have said that the ruling sent a clear message to Wal-Mart that class actions cannot be settled behind the backs of class representatives. They also accused Wal-Mart of "counsel shopping" that has tainted the entire process.

Lawsuit Against Hospitals Alleges Workers Weren't Fully Paid
An attorney suing three Western Pennsylvania hospitals said that 100,000 current and former employees will receive letters asking whether they want to join a class action lawsuit over hours it says they should have been paid but weren't. The notice will be sent to hourly employees who worked at the hospitals during the past three years. The lawsuits accuse the hospitals of automatically docking employees a half-hour for meals, regardless of whether they took breaks; not paying for work performed before and after scheduled shifts; and not paying for required training.

Judge Denies Class Certification to Magazine Subscribers Alleging Deceptive Renewals
A federal judge in Newark, finding insufficient common issues, had denied class certification to magazine subscribers who claim a Time Warner subsidiary charged for renewals without their authorization. The five named plaintiffs' varied experiences with the subsidiary obviate class certification because common issues of law and fact are overshadowed by individual ones. The suit claims that the company used overly complex automated telephone systems and confusingly worded mailings to prevent cancellations after 90-day free subscription periods. The company offers trial subscriptions to more than 1,000 publications, which are typically billed to subscribers' credit cards and subject to automatic renewal. Subscribers who don't want to renew may call a voice-recognition telephone system, but the system's options are misleading, making consumers think they have canceled when they have not. The suit charged the company with violating New Jersey's Consumer Fraud Act and sought certification on behalf of all subscribers in New Jersey, New York and Washington, D.C.

Litigation Over Antibiotic Designated Mass Tort
The New Jersey Supreme Court has designated mounting litigation over the Johnson & Johnson antibiotic Levaquin as a mass tort. The suits charge that the drug, which is prescribed for bacterial infections of the lungs, urinary tract and skin, has caused Achilles' tendon ruptures and other damage. The plaintiffs maintain that the litigation will likely involve thousands of cases with the same defendants, similar complex issues of law and fact and plaintiffs with a high degree of commonality in their injuries and damages. Levaquin was approved by the FDA in 1996, but the FDA warned in 2008 that the drug put users at heightened risk of developing tendonitis and tendon ruptures. The most common injury associated with the drug is a ruptured Achilles' tendon, which may require surgery to repair and frequently entails two months of immobility, then surgery followed by a rehabilitation period of six months or more. Most ailments occur during or soon after a course of Levaquin.

California High Court Gives Workplace Violation Suits Route Around Class Certification
Employees wanting to sue their bosses for workplace violations were given an alternative route that gets around the arduous task of gaining class certification under unfair competition laws. The California Supreme Court ruled in two companion cases that employees need not meet class requirements if they seek civil penalties for themselves and others under the Labor Code Private Attorneys General Act of 2004. That was significant because the court also held that individuals trying to bring unfair competition suits on behalf of others must qualify them as class actions. Employers have been able to fend off UCL suits through rulings denying class certification. Observers say that the rulings provide a back door around the class certification process. Employees can now pursue claims for penalties for violations of any labor code provision without having to go through the class certification procedures.

$200 Million Wage-and-Hour Suit Filed Against Northwestern Mutual
Three financial representatives who worked for Northwestern Mutual Life Insurance Co. have filed a $200 million lawsuit against the company for failing to pay them overtime wages under California and federal law. Their claims were filed on behalf of more than 100 representatives in California who worked for Northwestern Mutual during the past four years. They requested certification of a class of employees and former employees whose unpaid damages amount to $100 million under state law and $100 million under federal law. The plaintiffs said that they were forced to work more than 40 hours per week but were paid less than California's minimum wage, which was $8 per hour in 2008. They also allege that the company consistently misclassified its sales and financial representatives as "independent contractors," rather than employees, to avoid paying them overtime under federal and state laws.

Home Depot Product Liability Suits Advance
A federal judge in Atlanta is permitting dozens of product liability suits against Home Depot and the makers of a tile grout cleaner to proceed to trial on negligence claims, but he has stripped away other claims that sought damages for violating federal consumer product safety laws. Ten of those suits, filed by customers who were hospitalized after using Tile Perfect Stand 'n Seal Spray-On Grout Cleaner, were among approximately 50 suits that have been settled. Sickened customers sued Home Depot and five companies tied to the manufacture and distribution of the product. The manufacturer of the grout cleaner had been fielding complaints for more than a month about the potentially devastating health problems associated with its use when the lead plaintiff purchased the cleaner. Two people died and dozens were hospitalized after breathing vapors from the spray. As a result of those injuries, the U.S. Consumer Product Safety Commission issued a recall of 300,000 cans of the product. The lead plaintiff was hospitalized and left with permanent lung damage after inhaling the fumes, which contained Flexipel, a chemical that should not have been produced in aerosol form. More than 100 suits remain active and nearly 50 have been settled. Home Depot continues to vigorously fight the suits, arguing over who bears responsibility for any damages.

3rd Circuit Mulls Pre-Emption of Class Action Over Snapple's Nutrition Claims
A panel of the 3rd U.S. Circuit Court of Appeals appears likely to revive a consumer fraud suit that accuses the popular Snapple line of beverages of misleading the public by proclaiming it was "All Natural" even though it was sweetened with high-fructose corn syrup, an ingredient the plaintiffs have labeled as "synthesized" and "unnatural." The judges seem to be leaning towards recent trends of allowing such consumer or products liability suits. A lower court judge had tossed the case in 2007, concluding that such state-law consumer claims were pre-empted by the FDA's labeling regulations. If the suit were revived, it would be pursued on behalf of a class of consumers seeking damages for Snapple's alleged unjust enrichment and fraud on the public during the time that the "All Natural" claim was made.

Senate Panel Hears of Health Insurers' Wrongs
Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released by the Senate Commerce Committee. The report was part of a multi-pronged assault on the credibility of private insurers. At a hearing, three health care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell "junk" policies that do not cover needed care. The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to: Don't trust the insurers. He claims that insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it." The report alleges that insurers have systematically underpaid for out-of-network care.

Class Action Argues Institution Residents Never Offered Opportunities to Move
A class action lawsuit alleges that residents of five state-operated institutions have not been offered the opportunity to move to community settings. The Disability Rights Network of Pennsylvania filed the lawsuit against the state Department of Public Welfare on behalf of six plaintiffs. According to the lawsuit, the state Department of Public Welfare has failed to provide its clients with the opportunity to receive services in integrated, community settings, despite the desires of its institutionalized clients. However, the agency said that the closing of several other facilities is evidence of its desire to reduce its reliance on institutional care and improve access to home and community-based services for Pennsylvanians living with mental retardation. The lawsuit denies the department's claims, stating the Pennsylvania does not have an integration plan with specific timelines and discharge benchmarks to develop community alternatives for residents of state-operated institutions.

Michigan Class Action Settlement On Autism Treatment Hailed as Landmark Case
In what plaintiffs lawyers are calling a landmark autism case, a Michigan insurance company has agreed to reimburse at least 100 families for costs involving treatments for their autistic children. The $1 million class action settlement from Blue Cross Blue Shield of Michigan comes amid a legislative wave in which a growing number of states are passing laws that require insurance companies to pay for autism treatments and screenings. To date, 13 states have such laws. The Michigan settlement, meanwhile, has autism advocates hopeful that insurance companies will stop claiming that behavioral therapy for autistic children is experimental, and start paying for it. In the case, the family of an autistic child sued Blue Cross for allegedly failing to acknowledge that a treatment known as applied behavioral analysis is scientifically valid.

Exxon Plaintiffs Win On Interest and Appeal Costs
The plaintiffs who sued over the Exxon Valdez oil spill lost big at the U.S. Supreme Court last year but took some consolation from the 9th U.S. Circuit Court of Appeals. In addition to unanimously siding with the plaintiffs' argument for hundreds of millions of dollars in interest, a panel also ruled that Exxon Mobil can't recoup tens of millions in costs for its largely successful appeal. The majority concluded that Exxon and the plaintiffs, fisherman and seafood companies, will each have to cover their own costs for the epic series of appeals over the issue of the punitive damages assessed against Exxon for the infamous 1989 oil spill. A jury first decided punitive damages should be $5 billion, and though the Supreme Court reduced that amount by roughly 90 percent in 2008, Exxon was forced to pay $60.6 million in premiums in the meantime for a bond guaranteeing payment of the original $5 billion. Exxon's total costs, including those premiums, approached $70 million, according to the opinion.

Chinese Drywall Lawsuits Consolidated
A federal panel issued an order consolidating Chinese drywall liability lawsuits before a New Orleans judge. The panel also chose a judge to manage what one attorney estimated could end up being 1,000 homeowner suits nationwide by people who bought homes built by Chinese drywall primarily in the Southeast since 2005. Plaintiffs attorneys say drywall manufactured by Knauf Plasterboard in at least two of its Chinese plants emits sulphur gas that corrodes wiring and ruins appliances such as air conditioning units. Some homeowners also claim they have been forced to leave their homes because of breathing difficulty. Knauf has said there is no evidence that medical problems are caused by the drywall. One attorney, who has filed about 20 drywall cases, said the consolidated litigation will allow plaintiffs attorneys to share information and avoid costly duplicative court costs.

Court Reverses Decision Denying Class Certification in Workers' Suit
The 11th U.S. Circuit Court of Appeals in Atlanta has traditionally been loath to reverse lower court judges who have scotched class action litigation by declining to certify a class of injured plaintiffs. But in a five-year-old racketeering case brought against a carpet and flooring manufacturer by its hourly wage employees, an 11th Circuit panel has reversed and remanded a 2008 decision by a judge that denied class certification to the employees who were plaintiffs in the case. The appellate panel's decision marks the third time that the case has been before the federal appellate court on an interlocutory appeal. The appellate panel determined that the lower court judge had erred when he rejected class status for the employees on grounds that there were not issues of law or fact that were common to the class. The appellate ruling is a victory for the employees who have claimed for years that the company, via temporary employment agencies, violated federal laws by hiring illegal aliens as a way to depress hourly wages. The company is the second-largest carpet and rug manufacturer in the U.S. and employees more than 30,000 people. The employees have sought certification of their complaint as a class action and monetary damages for all hourly workers who, by virtue of citizenship or visa, can legally work in the United States and who worked at the company between 1999 and the present.

Judge Questions Potency of Seroquel Claims
A Delaware judge has questioned the viability of at least 700 products liability cases alleging that AstraZeneca's anti-psychotic drug Seroquel caused patients to develop Type II diabetes. The judge threw out one such suit on the grounds that the plaintiff's medical expert did not sufficiently establish a link between Seroquel and the plaintiff's diabetes diagnosis. The case was the third involving Seroquel to be tossed due to the plaintiff's medical evidence. Given those rulings, the judge in Delaware wrote, "The court is left to wonder what is to become of its docket of more than 700 Seroquel cases. Trial groups have been formed well into the future and the parties are expending significant resources to prepare for these trials. The court is expending resources, too. Under the circumstances, it is appropriate to wonder aloud." Nationwide, about 17,000 plaintiffs have pending Seroquel cases against AstraZeneca.

Plaintiff Suits Against Automakers Stall Out
As Chrysler and GM dispose of billions of dollars in assets and debts, potentially thousands of individuals with death and injury claims will either be out of luck or will face near insurmountable obstacles to success. When both auto companies emerge from bankruptcy, they are expected, as in the terms of Chrysler's sale to Fiat, to do so "free and clear" of all pending and future claims and interests in all property sold pre-bankruptcy. A group of consumer organizations and plaintiffs lawyers stepped into what one bankruptcy expert called the "murkier waters" of the law's treatment of future tort claims, or what another described as the "intersection of bankruptcy law and due process." Is it constitutional to cut off the rights of people who today have no knowledge that someday they may be injured or killed in an accident involving their Chrysler or GM vehicle? The consumer and plaintiff groups and some bankruptcy litigators and scholars answer no, but others disagree. And there is even disagreement over the law's treatment of pending tort claims.

Pioneering Mass Tort Judge Offers Impassioned Defense of Personal Injury Class Actions
A Brooklyn federal district court judge has written a provocative article which expresses his fear that mass tort litigation will not bring justice to the injured because of the judiciary's disregard for his favored vehicle, the class action. He wrote, "The problem of individual justice in disputes involving large masses of people is endemic in a huge heterogeneous population such as ours, where most people claiming to be injured are not in direct contact with those they believe have caused them harm." He used the example of Agent Orange litigation, saying that it "established that class actions were useful in very complex cases that often involve political as well as economic and scientific issues. When settled, they provide a method of sound utilization of available funds, with minimal transaction costs, to assist persons who believe they were, or are, injured; they permit defendants to limit their exposure and get on with their productive work without huge continuing litigations hanging over their heads."

Expedia Ordered to Pay $185 Million in Consumer Class Action
A judge in Washington has ordered Expedia to pay more than $184 million for breaching its contract with hotel customers by charging service fees that generated profits for the online travel booking firm. The judgment is the largest to date in Washington for a consumer class action. The plaintiffs alleged that the online firm violated its terms of use agreement with consumers because it collected service fees in excess of what it needed to cover its transactional costs on a hotel reservation. The judge rejected Expedia's summary judgment motion seeking to throw out the breach of contract claim and ordered the firm to return nearly $185 million in service fees to customers who purchased hotel reservations over the phone or online between February 2003 and December 2006. The judge ruled that," Expedia promised in their Terms of Use with the consumers that they charged only for the cost of the services rendered; however, sometime in their corporate life, they decided they should also add a pretty hefty profit component into the charge, and so the court finds adding the profit component violated the contract."

On-Call Employees Suing Over Unpaid Restrictions on Freedom
On-call employees are turning into a growing liability risk for employers, as some are claiming that companies are restricting their freedom too much, and not paying them for it. Employment lawyers say that such claims are popping up in larger wage-and-hour class actions, with on-call employees suing for unpaid overtime, alleging that their freedom has gotten so limited that they may as well be hourly employees. Recently, a California appellate court revived an overtime class action brought by on-call workers of an in-home respiratory services provider. The employees allege that they deserve compensation for the time spent on call dealing with customer questions by phone, as well as for time spent on call but not handling customer inquiries. In another case, a group of lab technicians in Utah is suing a science and technology development company, alleging that the company required them to be on call during their lunch break, mandating they be on company premises, in company provided clothing and available for work. The plaintiffs claim they should be compensated for that time.

Court Sets "Don't Ask, Don't Tell" Rule for Illegal-Alien Class Action Plaintiffs
In a case of first impression in New Jersey, an Appellate Division panel held that defense counsel cannot ask the plaintiffs about their immigration status during discovery in a putative class action suit alleging an employer cheated its workers out of just compensation and overtime pay. Nor can the plaintiffs be asked about whether they lied to their employer or made false statements, unless the defense can make a showing that those statements have a direct impact on their credibility in determining whether they are, in fact, eligible for back pay and overtime. The ruling follows a majority of state and federal courts that have held asking about a plaintiff's immigration status improper because it has a chilling effect on employees seeking vindication of their workplace rights. Furthermore, exposing their immigration status, if illegal, could have an adverse impact on their case. "Their illegal status in this country is very likely to trigger negative sentiments in the minds of some jurors," one of the judges ruled. "The real world concern facing the court is whether the disclosure of immigration status would sufficiently inflame or distract jurors from their role as objective fact-finders."

Pfizer Again Beats Back Class Certification Motion in Consumer Fraud Case
Shortly after Pfizer predecessor Warner-Lambert pleaded guilty and agreed to pay more than $430 million to resolve criminal charges and civil liabilities for promoting off-label uses for its epilepsy drug Neurotin in 2004, plaintiffs lawyers were in court seeking to represent a nationwide class of consumers and third-party payers against the pharmaceutical giant. They made RICO and fraud claims, demanding more than $4 billion in damages. But five years later, a class has yet to be certified. Finally, a Boston federal district court judge denied class certification for a second time. The judge first ruled against class certification back in August 2007, citing the plaintiffs' failure to satisfy commonality, numerosity, typicality and predominance requirements. However, the judge gave them another shot, but in her latest denial ruled that class counsel still had not shown that common questions would predominate over issues affecting individual plaintiffs.

Mass-Tort Treatment Sought for Suits Over Antibiotic Levaquin
Users of Levaquin, an antibiotic linked to muscle ailments, are asking the New Jersey Supreme Court to accord mass-tort treatment to their suits against the manufacturer, Johnson & Johnson subsidiary Ortho-McNeil Pharmaceutical. There will likely be thousands of suits involving the same defendants, similar complex issues of law and fact and plaintiffs with a high degree of commonality in their injuries and damages, making the litigation ideally suited for central management. Levaquin, a fluoroquinolone, is prescribed for bacterial infections of the respiratory system, urinary tract and skin. Its users are at heightened risk of tendonitis and tendon rupture in the shoulder, biceps, hand and thumb, according to the FDA. The risk is greater in older patients, those taking corticosteroids, such as prednisone, and those with kidney, heart and lung transplants, the FDA said. In July 2008, the FDA ordered manufacturer Ortho-McNeil to include on Levaquin's label a warning about the incidence of ruptured tendons and other tendon injuries. The FDA's adverse-event database shows 262 reported cases of tendon ruptures, 258 cases of tendonitis and 274 cases of other tendon disorders between November 1997 and December 2005. Since then, the suits have been mounting.

Class Action Certified Against Mercedes-Benz Over Emergency Response System
A federal judge in New Jersey has certified a class action alleging that Mercedes-Benz sold cars equipped with an emergency response system that the company knew would soon become obsolete. The judge ruled that the plaintiffs suffered an ascertainable loss because they bought vehicles designed to last 20 or more years, while the emergency system became useless after 2007. The plaintiffs claim that Mercedes made statements or omissions of material facts that it knew or should have known were false or misleading when promoting vehicles equipped with "Tele Aid," an emergency response system that linked subscribers to roadside assistance operators through global positioning and cellular technology through AT&T Wireless Services Inc., for a subscription fee. The system ran on analog signals, not digital, and Mercedes-Benz continued to sell vehicles so equipped from 2002 to 2007 even though it knew as early as August 2002 that a change in Federal Communications Commission regulations would allow AT&T to discontinue its analog cellular services in 2008, rendering the system inoperative.

Nationwide Class Action Reinstated Against Ford Motor Over Accelerator Pedals
The Oklahoma Supreme Court reinstated a national class action against Ford and auto parts maker Williams Controls that had been tossed by an intermediate appellate court. The class, which includes an estimated 300,000 to 500,000 members, contends that certain models of Ford Super Duty pickup trucks and Expedition sport utility vehicles contain faulty accelerator pedals, causing the trucks to idle rather than accelerate when drivers step on the gas. The case, which was first filed in 2004, alleges breach of warranty, negligence and product liability. The court certified a nationwide class in 2007, but last year the Oklahoma Court of Civil Appeals reversed the lower court. In reinstating the case, the Supreme Court found that the trial court did not abuse its discretion in certifying a class on the breach of warranty claims. It declined to affirm class certification on negligence or product liability claims. Depending on the ultimate size of the class, the plaintiffs will be seeking $60 million to $100 million, or about $185 for each replacement pedal.

Pennsylvania Federal Judge Dismisses Subprime Securities Class Action
Immediately following the dismissal of three subprime class actions, a Philadelphia federal district court judge has dismissed another: a case against Radian and three current and former officers of the company. Radian, which provides mortgage insurance and other financial products to financial institutions, held a 46 percent interest in a company called Credit-Based Asset Servicing and Securitization. Plaintiffs lawyers alleged that in the first eight months of 2007, the defendants made false and misleading statements about C-BASS's profitability and liquidity, thus misrepresenting the value of Radian's investment in C-BASS. Specifically, the plaintiffs asserted that Radian should have written down the value of its investment in C-BASS sooner than it did. But the judge found that the plaintiffs came up short in showing scienter: "The plaintiffs' inference of scienter is neither cogent, nor compelling, nor strong in light of competing inferences, and a reasonable person would not deem the inference of scienter cogent and at least as compelling as nonculpable inference."

Class Action Proceeds Against British Airways Over Missing, Destroyed Bags
A putative lass action accusing British Airways of "recklessly" losing, damaging or destroying thousands of pieces of luggage will go forward following a federal judge's denial of the airline's motion to dismiss. The plaintiffs argued that British Airways knew its baggage handling system would "probably" result in the loss or destruction of bags, thereby qualifying the plaintiffs to recover actual damages under an exception to the controlling international treaty, the Montreal Convention. The airline contended that the damage was not in fact "probable" for each individual bag because the damage rate was not greater than 50 percent. If the damage was not "probable," then the exception to the treaty does not apply. A New York judge, however, rejected the airline's reasoning and has allowed the case to move forward.

Insurers Sued for $1 Billion for Allegedly Enabling "Dumping" of Food Products from China
Domestic food producers have filed a $1 billion lawsuit against major insurance companies for enabling the "dumping" of competing food products into the United States from China. The domestic producers filed the class action in the U.S. Court of International Trade, charging that the insurance companies posted "surety bonds" that allowed importers to bring in food products from China at below cost, or "dumped" prices, causing the domestic producers severe financial harm. The lawsuit also claims that the U.S. Customs and Border Protection and the U.S. Department of Commerce failed to enforce anti-dumping orders issued years ago to protect the domestic producers from dumped Chinese imports.

Coughlin Stoia Wins Class Certification for HealthSouth Shareholders
HealthSouth shareholders were certified as a class in a securities fraud case against HealthSouth's banker, UBS and the former CEO. The class certification comes after a long history in which motions were "more than amply briefed and vehemently argued," according to the judge. UBS argued that there wasn't evidence of a direct fraud on the market by UBS. However, the judge found that the plaintiffs presented plenty of evidence "including testimony and internal UBS memoranda demonstrating the public nature of its misrepresentations and deceptive conduct."

Federal Lawsuits Targeting Pittsburgh Health Care Networks May Get Class Action Status
Federal lawsuits filed against Pittsburgh's largest health care networks might impact more than 100,000 current and former hospital workers if a judge grants class action status. Two lawsuits have been filed against University of Pittsburgh Medical Center and West Penn Allegheny Health System. The lawsuits accuse UPMC and West Penn of automatically docking employees a half-hour for meals, regardless of whether they took breaks, not paying for work performed before and after scheduled shifts and not paying for required training. Though only nine current and former employees are named as plaintiffs, one of the firms who filed the lawsuits represents about 700 of the hospitals' current and former employees.

Fannie Mae Takeover Confuses a Class Action
Lawyers behind a class action against mortgage giant Fannie Mae are about to find out what happens when the company you've sued becomes a government ward. Investors filed suit against the publicly traded behemoth in 2004, in the wake of an accounting scandal. Now, more than six months after the Treasury Department's decision to place Fannie Mae in a government conservatorship, many players in the litigation are still wondering how the change will affect their case. Fannie Mae's attorneys have said in court that the move could open up new defenses for the company, though they haven't yet said what they will be. And securities law experts say the uncertainty swirling over Fannie's future could give the company powerful leverage in settlement talks.

Wal-Mart Cuts Class Off at the Pass in Pet Food Case
Lawyers rescued Wal-Mart and a group of pet food manufacturers from a class action that could have led to millions of dollars in damages. A federal judge in Nevada granted a motion by the defense to pre-emptively deny certification to a class of plaintiffs that would have spanned eight states. Typically, plaintiffs try to certify a class only after getting a chance to discover more facts about a case. But courts allow defendants to deny certification early on if the law simply wouldn't support it. A Nevada woman filed a class action in state court against Wal-Mart and a group of food manufacturers in April 2007, alleging that they illegally labeled their pet food "Made in USA," though some ingredients were imported from China. The previous month, the FDA had announced that certain pet food ingredients imported from China were sickening and killing cats and dogs. The defense removed her class action to federal court, where she narrowed her claim to a violation of the Nevada Deceptive Trade Practices Act and similar laws in seven other states. Most recently, a federal judge denied the class certification, ruling that subjective, individual issues made a class action the wrong way to handle the case.

Massachusetts Court Moves "Light" Cigarette Suit Forward
The state's highest court ruled that Massachusetts smokers can use a consumer protection law to sue Philip Morris Inc. for the way it marketed Marlboro Lights. The ruling means a class action lawsuit brought by smokers who claim deceptive marketing can move forward. In a similar U.S. Supreme Court case, the justices ruled that smokers may use state consumer protection laws to sue cigarette makers for the way they promote "light" and "low tar" brands. In the class action suit, filed in 1998, the Massachusetts smokers claimed that Philip Morris engaged in deceptive marketing because Marlboro Lights did not deliver lowered tar and nicotine to smokers. Philip Morris, however, argued that the state's consumer protection law is pre-empted by the 1965 Federal Cigarette Labeling and Advertising Act, which prohibits state from regulating any aspect of cigarette advertising that involves smoking and health. The company also claims that the Federal Trade Commission allows the use of terms such as "light" and "lower tar and nicotine" on cigarette packages. The company stopped using the phrase "lower tar and nicotine" on packages in 2003. The state Supreme Court ruled that the FTC had never given express permission to use those descriptors.

Mover's Suit Against U-Haul in Limbo
A man is suing U-Haul in the District of Columbia on behalf of himself and other U-Haul customers, but is his case a class action? A federal appeals court in Washington has to decide that question and decide where the suit is heard. U-Haul argues that the suit is a class action and that it belongs in federal court. The man's suit claims that a U-Haul advertisement offering the "newest trucks" for movers violates D.C.'s Consumer Protection Procedures Act. The truck the man rented to move to Texas broke down and could not be repaired. The suit claims deceptive advertising and misrepresentations in policies. While U-Haul has been trying to push the suit to district court, a federal judge ruled last year that Superior Court was the proper venue because there is no evidence that the amount in the dispute is greater than $75,000. U-Haul argued that allowing a district court ruling to stand could open the door to attempts to circumvent the Class Action Fairness Act, which gives the federal judiciary substantial control over class action complaints across the country.

Chocolate Collusion Suit's On, Judge Rules
A federal judge has refused to throw out a lawsuit accusing the U.S. chocolate industry of price fixing and gave the plaintiffs additional time to prove their claims. In his 83-page opinion, the judge denied most of the motions to dismiss filed by the chocolate companies, including The Hershey Co., except for some claims under state consumer laws. He said the plaintiffs have provided enough evidence to allow claims of antitrust violations to proceed and granted them additional time to tie in the actions of the companies' foreign subsidiaries to the jurisdiction of U.S. courts. The 87 class action suits filed across the country were consolidated and assigned by an administrative order citing Hershey's headquarters in the area. Hershey is the leading chocolate candy company in the U.S. and supplies more than 40 percent of the chocolate sold in the country. The lawsuits against Hershey, Mars, Cadbury and Nestle, which collectively control 75 percent of the chocolate market in the U.S., allege the companies conspired to raise chocolate candy prices by about 10 percent in 2002, 6 percent in 2004 and 5 percent in 2007. These actions came at a time when demand was low because consumers were seeking more health-conscious snacks and the company's production costs were stable, according to the lawsuit.

Online Marketers Fraudulently Charged for Services, Suit Says
The marketers of "premium content" services and the companies that bill for them are fraudulently billing consumers' telephone accounts for unauthorized charges, a class-action lawsuit filed in Minnesota alleges. The companies routinely charge for premium content that the billed party has not authorized. Premium content refers to Internet services that consumers can buy for which they are billed through their cell phone or land line telephone accounts. These services can range from Web-hosting products to e-mail accounts and diet-monitoring services. The suit alleges that there are no safeguards in place to prevent unauthorized premium-content charges from being included on a customer's telephone bill. The suit also alleges that the charges are often not clearly identified, so consumers may fail to notice that they are being billed a few extra dollars each month. The complaint alleges deceptive trade practices, consumer fraud and unjust enrichment.

Something Rotten in Drywall, Say Homeowners
Many homeowners whose homes were built in 2005 and 2006 when construction materials were scarce have begun to experience unusual problems. The coils in their high-end air conditioner failed repeatedly, and there was a strong odor in a downstairs bathroom. Numerous lawsuits have been filed over what could be toxic drywall manufactured in China, even though tests have confirmed that the drywall was actually manufactured in America. A motion has been filed to consolidate the drywall class action complaints being filed across the country. All of the class action plaintiffs bought homes built in 2006. Some discovered their drywall was suspect after smelling a foul odor similar to rotten eggs, while others found copper pipes that were black. Lawyers suspect that U.S. companies purchased drywall from Chinese manufacturers and relabeled it as their own during a drought of building supplies.

PA Judges Face New Civil Suit Over Alleged Kickbacks
Two disgraced Pennsylvania judges charged with taking kickbacks to send youth offenders to private detention centers are facing another civil lawsuit tied to the scandal. The suit was filed on behalf of juvenile offenders sentenced between 2003 and 2008 and claims the judges perpetrated "what ranks as one of the largest and most serious violations of children's rights in the history of the American legal system." Prosecutors allege that the judges took $2.6 million in payoffs to put juvenile offenders in lockups run by PA Child Care, LLC and a sister company while they were judges in Luzerne County. The judges both plead guilty to fraud and face more than seven years in prison. The civil suit claims that the judges and others conspired to violate juveniles' civil rights and that they broke racketeering laws. The suit lists 95 plaintiffs and asks a judge to certify it as a class action. Two other federal lawsuits made similar allegations.

Judge Approves $69 Million Partial Settlement of Multidistrict Suit Against Insurance Brokers
A federal judge in Newark has approved a $69 million settlement in a class action accusing leading insurance brokers of conspiring with carriers to manipulate the market. The decision resolved a case in which plaintiffs claimed brokers violated antitrust and racketeering laws by taking part in a scheme to rig bids for insurance policies and steer customers to certain carriers in return for payments of kickbacks. Of the $69.02 million settlement, $62 million is designated for class plaintiffs, with up to $5 million of that amount to be used for claims by state officials on behalf of policyholders who are potential members of the class. The remaining $7 million is allocated to resolve nonclass member "tag-along" actions. One attorney estimated that direct class members number 400,000 and the conspiracy class number millions.

Plaintiffs Firms' Jousting Imperils $350 Million Doctor-Insurer Pact
A rift between plaintiffs firms in New Jersey and New York is threatening to disturb a proposed $350 million class action settlement between the American Medical Association and the United Healthcare Group and is affecting the pursuit of actions against three other insurers. For nine years, attorneys at the two firms have been co-counsel for the AMA, doctors and insureds in the suit against UHG in federal court. The firms also work together on pending class actions in federal court against Cigna, Aetna and Oxford insurance companies and in a case against HealthNet that settled for $225 million last year. The suits contain the same allegation that a database used by all the carriers to determine reimbursement rates for out-of-network treatments is rigged in the companies' favor, fraudulently shortchanging subscribers and doctors. Pleadings suggest relations between the firms began unraveling last year over the issue of whether to take a reasonable settlement immediately or bet on the solidity of the case and keep litigating for a better deal. One firm wanted a settlement after a tentative agreement was reached with UHG for $350 million. The other firm now wants to reject the settlement, claiming that $350 million might not come anywhere close to being enough to compensate the insureds and doctors.

Three Offenders File Suit Claiming Probation Process Unfair
Three men recently filed a federal lawsuit against the director of the state Board of Probation and Parole, claiming the organization has failed to provide required due process. The men are seeking to have the complaint certified as a class action, though their lawsuit specifically states that it is unknown how large the class might be. As of the end of 2008, 757 defendants from Allegheny County were serving state probation. One of the men was about to complete his two-year state prison sentence, which would be followed by one year of state probation. However, as a convicted sex offender, he couldn't find housing in compliance with state regulation. Before even getting out of prison, he was back in, serving time on a technical probation violation. He has since been in county jail for seven months without a hearing.

Judge Decertifies Class Action Over Off-Label Use of Epilepsy Drug
A month before a pharmaceutical class action was set for trial, a Philadelphia judge decertified the class of users of an epilepsy and neuralgia drug seeking reimbursement from the drug's maker after being prescribed the drug for uses not approved by federal regulators. Though the same judge had previously granted class certification, he recently granted a pharmaceutical company defendant's motion for class decertification. The lawsuit was filed by people prescribed the drug Neurontin and its generic equivalent for medical conditions other than epilepsy and the management of pain associated with herpes outbreaks. The plaintiffs claimed misrepresentation, negligence and breach of warranty and sought a refund of all noninsured payments for the drug. The plaintiffs argue that the drug's manufacturer and its new partner Pfizer violated a federal law that prohibits drug manufacturers from marketing FDA-approved drugs for off-label uses, or uses not approved by federal regulators. The judge granted Pfizer's motion for decertification because there was a question of fact about whether each class member had benefited or been harmed from their off-label prescriptions.

Hagens Berman Files Second Class Action Alleging Home Appraisal Rigging
Plaintiffs' law firm Hagens, Berman, Sobol & Shapiro filed its second class action for alleged home appraisal rigging with a new federal suit against Wells Fargo & Co. and its appraisal subsidiary. The case was filed on behalf of an Arizona couple and is similar to another class action lawsuit against Countrywide and its appraisal subsidiary. According to the lawsuit, Wells Fargo and its subsidiary collected more than $100 million by requiring homeowners to use the subsidiary for overpriced appraisals. The subsidiary then farmed out the work to subcontractors and billed homeowners at a higher rate. The case alleges that both companies violated the Racketeer Influenced and Corrupt Organizations Act and the Real Estate Settlement Procedures Act. Wells Fargo also faces breach of fiduciary duty and violation of California's unfair competition law claims, while the subsidiary faces an unjust enrichment claim.

Judge Tosses $247 Million in Plaintiffs' Claims Against Seat Belt Buckle Maker
In one of the last class actions pending against seat belt buckle manufacturer Takata Corp., a Los Angeles Superior Court judge has tossed out all of the plaintiffs' claims, which defense attorneys estimated involved damages of about $247 million. The suit is one of many class actions against seat belt buckle manufacturers and automobile manufacturers alleging that certain seat belts unbuckle on their own during accidents. In the California case, filed six years ago, the plaintiffs alleged that the buckles had never been properly tested as required by a section of the Federal Motor Vehicle Safety Standards to assure they would not unbuckle on their own. The buckle at issue is used on about 80 different models of vehicles. The judge rejected the case because she found that the defendants had indeed tested the buckle.

$175 Million for Sick Smokers Held Up by Tax Liability Issue
About 45,000 sick smokers have been approved for payments from a $580 million fund that sprouted from an overturned tobacco negligence verdict, but questions about federal tax liability and Medicare liens still have not been answered. About $405 million has been distributed in individual checks of $9,000, but supplemental checks have been held up while lawyers figure out what to do with the claims asserted by the federal government. Attorneys for smokers want to stave off federal liability for their clients, the remnants of the disbanded class in the lawsuit filed in Miami against the nation's five biggest cigarette makers in 1994. The tax issue raised by the Justice Department sent some attorneys scrambling to find the best way to proceed with distributions. In an abundance of caution, many smokers' attorneys withheld some or all of a client's fund check until the DOJ decides what the do. Many hopeful, angry and confused fund recipients headed to blogs as they vented their frustration at the holdup.

Coca-Cola Sued Over Vitamin Water Health Claims
A nutrition advocacy group has sued the Coca-Cola Co., the biggest beverage maker in the world, over what it calls "deceptive" health claims about Vitamin Water. The Center for Science in the Public Interest accuses Coke of selling what it says is basically sugar water by claiming it has vitamins that boost immunity and reduce the risk of disease. The group said the health benefit claims that Coca-Cola makes about its Vitamin Water are "nonsense." It filed a class action lawsuit in California. Vitamin Water flavors are marketed with words such as defense, rescue, energy and endurance. The drinks' top three ingredients are water, cane sugar and crystalline fructose, a form of sugar. The 20-ounce bottle has roughly 33 grams of sugar, compared with about 39 grams in a typical 12-ounce soft drink.

7th Circuit Makes It Harder for Plaintiffs to Keep Securities Class Actions in State Court
The 7th U.S. Circuit Court of Appeals has made it tougher for plaintiffs to keep securities class actions in state court by holding that the 2005 Class Action Fairness Act's preference for federal jurisdiction trumps the Securities Act of 1993. The decision stems from a disputed real estate investment trust merger and splits with a 9th Circuit interpretation of conflicting terms between the 1933 Act's anti-removal provisions and the Class Action Fairness Act's terms that allow removal of state class actions to federal court. The 7th Circuit held that an anti-removal provision in Section 22 of the Securities Act of 1933 does not prevent removal when other requirements of the CAFA are met. The CAFA is more recent and thus generally allows removal, despite the 1933 Act bar, so long as terms of the CAFA are met. This breaks with a 2008 decision in the 9th Circuit that held that the more specific terms of the 1933 Act, applying to securities cases, can trump the generalized terms of the 2005 act applying to all civil actions.

Judge Asks Appeals Court to Uphold Dismissal of Consolidated HRT Cases
A Philadelphia judge has asked the Pennsylvania Superior Court to uphold a series of rulings dismissing the claims of plaintiffs who allege that the manufacturers of their hormone replacement therapy drugs are liable for their breast cancer. Fourteen cases decided by a Philadelphia Common Pleas judge have been consolidated for consideration by a single Superior Court panel. The Common Pleas judge granted defense motions for summary judgment in all of the cases because, he said, there was sufficient public information at the time all of the plaintiffs were diagnosed with breast cancer for the plaintiffs to learn that there was a risk of developing breast cancer from taking HRT drugs. He also noted that product package inserts warned of an increased risk of breast cancer. The pharmaceutical defendants are Wyeth Pharmaceuticals and Pharmacia.

3rd Circuit Remands Price-Fixing Class Action
In a ruling that is sure to be required reading for antitrust lawyers, the 3rd U.S. Circuit Court of Appeals has vacated a lower court's decision to certify a class action over an alleged price-fixing conspiracy in the market for hydrogen peroxide. The judges found that a previous judge had erred in failing to conduct a sufficiently "rigorous analysis" before concluding that the proposed class wold be able to prove "antitrust impact" through common rather than individual evidence. The judges found that the judge tested the plaintiffs' experts, but failed to test the defendant's experts. The experts had offered sharply different views on the issue of whether antitrust impact was susceptible to classwide proof. One of the judges wrote "Expert opinion with respect to class certification, like any matter relevant, calls for rigorous analysis."

Class Status Denied in Suit Against DuPont Over Chemical-Tainted Water
The use of medical monitoring as a remedy for mass exposure to toxic chemicals has suffered a setback in New Jersey. A federal judge in Camden has denied class certification sought on behalf of 15,000 people whose drinking water may have been contaminated by a chemical spilled from DuPont's Chambers Works in Salem County. The plaintiffs want DuPont to pay for medical monitoring to provide early warning of health problems caused by perfluorooctanoic acid, or PFOA, that seeped into the water of the Penns Grove Water Supply Co. New Jersey courts have recognized medical monitoring as a remedy for groups of plaintiffs exposed to dangerous substances, which works unless there are so many significant individual issues that the case would break down into litigation of individual claims. That is what led to the ruling that there were too many variables among the potential class members' exposure to the chemical or their potential risk of disease. The judge ruled that "rather conducting in-depth research and meaningfully identifying a group of individuals who have actually suffered significant exposure, the plaintiffs have relied on risk assessments and superficially identified a group of individuals who have potentially suffered a significant exposure, which is insufficient for purposes of a class certification."

Hospital May Face Lawsuit Over Woman's Death
The family of the 89-year-old woman who died on the roof of a Pittsburgh hospital has asked Common Please Court to give it access to reports from authorities regarding the woman's death. A writ of summons would allow the family to gather information to prepare a wrongful death lawsuit. The family is currently seeking subpoena power for investigative reports on the death prepared by the Allegheny County medical examiner, the district attorney's office, Pittsburgh police and the Department of Health. The woman, who suffered from dementia and heart problems and had a history of wandering, left her room through a fire exit. Her body was found the next morning by a maintenance worker with injures that suggested a fall. She was wearing only a hospital gown.

Veterans with PTSD Sue Federal Government for Disability Benefits
A group of military veterans filed a class action against the federal government, alleging that they were illegally denied disability benefits despite being diagnosed with severe cases of post-traumatic stress disorder that should have qualified them for free care. The five soldiers, all veterans of the wars in Iraq and Afghanistan, were discharged by the Army after it determined that their damaged mental health left them unfit to serve. Once released, they were assigned disability ratings well below the 50 percent figure needed to qualify for lifetime health care benefits. The complaint alleges that starting in 2002, the Army "systematically" ignored rules requiring that all servicemen diagnosed with PTSD receive an automatic 50 percent rating.

Starbucks Gets Court to Toss California Suit Over Convictions Inquiry
A California appeals court has thrown out a class-action complaint filed by three Starbucks job applicants who claimed the coffee chain illegally asked about criminal convictions, including for marijuana possession, on its job application. The 4th District Court of Appeals ordered the trial court to grant Starbucks' motion for summary judgment, saying the lead plaintiffs admitted they were not confused by the application and that they were not "aggrieved plaintiffs" since they had no marijuana convictions to disclose. The court then ruled that the case should not have been brought by the plaintiffs. The appeals panel argued that if they ruled in favor of the plaintiffs when they hadn't been harmed would result in there being "nothing to stop them from freely roaming throughout the state as knights errant amici searching for deficiencies where no harm has been caused them or anyone else as a result."

Top Court Lets Smokers Sue for Fraud
Tobacco companies that marketed "light" cigarettes may be sued for fraud, the Supreme Court ruled in a decision that will bolster dozens of lawsuits claiming billions of dollars in damages. The case was brought by three smokers from Maine as a proposed class action. They sued Altria and Philip Morris, alleging fraud under Maine's Unfair Trade Practices Act, claiming they had been injured by what they called the false statements of the companies. They sought compensation for economic rather than medical harm. They claimed that they had overpaid for cigarettes based on deceptive advertisements suggesting that "light" cigarettes were safer than regular ones. The question before the court was not whether use of the term "light" amounted to fraud, but rather whether plaintiffs should be allowed to sue at all given the federal Cigarette Labeling and Advertising Act, which requires tobacco companies to place rotating warnings on their packaging and advertising. The justices ruled in favor of the plaintiffs, claiming that "when people buy 'light yogurt,' they expect they're getting less fat."

Supreme Court to Consider $500 Million Asbestos Settlement
The U.S. Supreme Court agreed to consider reinstating a roughly $500 million settlement of asbestos-related lawsuits against the Travelers Companies Inc. The settlement would also block any new lawsuits against Travelers arising out of the insurance company's long relationship with Johns Manville Corp., once the world's largest producer of asbestos. Travelers has been named in dozens of lawsuits claiming that it tried to hide the dangerous health effects of asbestos. A Circuit Court of Appeals in New York overturned a lower court's approval of the settlement, saying a bankruptcy judge lacks the authority to act so broadly.

Class Action Status Doesn't Stick to Teflon Lawsuits
A federal judge in Des Moines, Iowa has denied class action status in two dozen lawsuits challenging the safety of Teflon-coated cookware. The lawsuits, which were filed on behalf of 89 named plaintiffs, claim that toxic fumes are released when cookware coated in Teflon or other products is heated higher than 464 degrees. Lawyers have estimated that the cases could be worth $5 billion. The judge denied class action status because the plaintiffs had bought and used the cookware differently.

Pure Weight Loss Agrees to Pay Back PA Customers
A bankrupt weight loss company has agreed to pay $700,000 to settle complaints from former customers who did not get products or services they paid for. Most of the money will go to people who filed complaints with the Pennsylvania attorney general, but some will go into a fund to pay former customers who have filed claims as part of the company's bankruptcy proceeding.

Wal-Mart to Pay $54.25 Million to Settle Lawsuit
Wal-Mart will pay up to $54.25 million to settle a class action lawsuit that alleged the discount giant cut workers' break time and didn't prevent employees from working off the clock in Minnesota. The class includes about 100,000 current and former hourly workers who were employed at Wal-Mart stores and Sam's Clubs. Wal-Mart also agreed to maintain electronic systems, surveys and notices to stay compliant with wage and hour policies and Minnesota laws. The settlement is a result of a judge's ruling that Wal-Mart had violated state labor laws 2 million times by cutting worker break time and "willfully" not stopping managers from having employees work off the clock.

Philadelphia Food Service Workers File $200 Million Race and Bias Suit
Eleven black employees of a Pennsylvania food services provider have filed a class action lawsuit alleging they were repeatedly called "gorilla" and "monkey," barred from having contact with the public and retaliated against for complaining about the mistreatment. According to the complaint, the company hired black workers for lower-level positions when it first began providing food services at the Comcast Center. Now that the center is fully staffed, the company is trying to get rid of its black employees. The plaintiffs say they were forced to eat lunch in the locker room and were told to clean up any trash that white workers left behind. Only white employees were permitted to work in the presence of guests during private catering functions, and black employees were subjected to unwarranted job scrutiny, criticism and discipline, among other things. The plaintiffs say that when they complained to upper management about the discriminatory treatment, the company retaliated against them and increased the harassment.

Class Action Demands Countrywide Repay Hedge Funds for Losses
A New York litigation boutique filed a class action suit against Countrywide Financial Corp. on behalf of investors in 374 securitization trusts that suffered losses due to Countrywide's $8.4 billion settlement with 15 states' attorneys general. Countrywide, which had been charged with predatory and unfair lending practices, agreed to modify more than 50,000 largely adjustable rate mortgage loans as part of the settlement. The class action demanded that Countrywide repurchase every modified mortgage loan it had previously sold to the various investment trusts at the loans' original face value. The suit claims that Countrywide plans not to absorb the $8.4 billion itself, even though it was Countrywide's own conduct which the Attorneys General complained in the proceedings, but rather to pass most or all of that reduction on to the trusts that purchased mortgage loans from Countrywide.

McKesson Settles Class Action Suit for $350 Million
McKesson Corp., the nation's largest drug distributor, has agreed to pay $350 million to settle a class action suit alleging it fraudulently hiked up the price of more than 400 medications. A class of consumers and health and welfare funds filed suit in 2005 against the company alleging it falsely inflated the average wholesale price of a number of America's most popular prescription medications. Those medications included allergy drug Allegra, arthritis and pain medication Celebrex, asthma drug Flonase and cholesterol medication Lipitor.

Jury Awards $17 Million Against AT&T
A federal jury has ordered AT&T to pay almost $17 million for overcharging customers in California when passing along a federally mandated phone fee. But in the verdict, the jurors determined there wasn't enough evidence showing the telecommunications giant conspired with Sprint Nextel Corp. or then-competitor MCI to overcharge customers nationwide for the Universal Service Fund. The antitrust case consolidates dozens of class action lawsuits filed across the country and covered customers who paid into the Universal Service Fund. The fund subsidizes the cost of running phone service to rural areas, low-income customers and public facilities. AT&T described the fee on its bills as a "Universal Connectivity Charge".

Justice O'Connor Hears UPS Challenge to ADA Class Action
Former U.S. Supreme Court Justice Sarah Day O'Connor's first case as a visiting judge on the 3rd U.S. Circuit Court of Appeals presented a cutting-edge question in employment discrimination law: whether workers may pursue a class action to challenge company-wide policies allegedly designed to thwart the Americans with Disabilities Act. Lawyers for UPS are urging the court to reverse a previous decision that certified a national class action brought by current and former UPS workers who claim the company's policies are hostile to those seeking a "reasonable accommodation." The central claim in the case is that UPS has an unwritten policy of requiring that injured or ill employees must be "100 percent cured" before they can return to work.

Carnival Settles Class Action Over Ill-Fated Millennium Cruise
A class of Carnival Cruise Lines passengers whose voyage to celebrate the millennium was interrupted by equipment failure has settled a lawsuit against the Miami-based company with a unique result: more than $5 million worth of free trips. Under the settlement, about 2,460 passengers from the last Carnival Paradise cruise of 1999 will receive a free one-week cruise embarking from any U.S. port outside Alaska. The total value of the cruises is $5.7 million. The ill-fated cruise left Miami on what was scheduled to be a Caribbean itinerary including Puerto Rico, Tortola and St. Thomas to commemorate the change to a new century. An engine failed eight hours into the voyage, and the crew changed the destinations to the Bahamas and Cozumel, Mexico.

Judge Nixes Change in Exxon Valdez Damage Payout
A federal judge has rejected a seafood company's request to rewrite a plan for dividing punitive damages to be awarded from the 1989 Exxon Valdez oil spill. Barring an appeal of the ruling, lawyers hope to begin handing out punitive damages to fishermen, cannery workers, landowners, Alaska natives and other claimants in the yearslong legal battle with Exxon Mobil Corp. In his ruling, the judge said that the seafood company had agreed years ago to a complex plan worked out among the lawsuit's many plaintiffs on how to divide the punitive damages.

Suit Over 2005 Fire Can Continue
A class action lawsuit over an evacuation after a 2005 explosion and chemical fire in El Dorado can move forward, the Arkansas Supreme Court ruled. Justices affirmed a Union County judge's ruling allowing those suing Teris, LLC and CSX Transportation Inc. to name who could join their lawsuit. Under the terms, any adult from a home or business forced to evacuate from certain areas around the fire could join the suit. Nearly 2,500 people were evacuated in 2005 after an explosion at the Teris hazardous-waste storage facility. No one was injured and the evacuees were allowed to return to their homes and businesses a day later.

Katrina Homeowners Can't be Certified as Class
A Louisiana homeowner's lawsuit claiming State Farm underpaid his Hurricane Katrina claim cannot proceed as a class action because the insurer's defense will require proof on a case-by-case basis, a federal judge in Louisiana ruled. The homeowner had argued that State Farm failed to sufficiently account for the overhead and profit that general contractors were charging in the wake of Katrina and Hurricane Rita. He claimed that the insurer adjusted his claim based on estimates of 10 percent overhead and 10 percent profit, when general contractors were charging much more than that post-Katrina and Rita.

Value City Failed to Warn Workers of Mass Layoff
The Value City department store chain failed to give 450 workers the required notice before laying them off in preparation for its Chapter 11 bankruptcy filing, according to a federal class action lawsuit. The discount retailer laid off the workers on October 24 without giving them 60 days advanced notice as required by the Worker Adjustment and Retraining Notification Act, the suit alleges. The WARN Act requires employers to provide workers 60 days written notice before laying off at least 50 workers. The law also allows employees to recover back pay and lost benefits for a period equal to the number of deficient days notice.

Appeal Threatens to Hold Up Exxon Valdez Payments
Prince William Sound commercial fishermen have waited 19 years for punitive damages against Exxon Mobile Corp. in the nation's worst oil spill, and now that a payout is imminent, another delay may be coming from those expecting a piece. Lawyers for a fish processing plant have filed court papers objecting to the allocation plan. The plant is seeking a new plan that conforms to the U.S. Supreme Court ruling in June, which awarded up to $507.5 million in punitive damages to nearly 33,000 commercial fishermen, cannery workers, land owners, Alaskans and others harmed by the 1989 crude oil spill. The plant is arguing that the current plan assigns some plaintiffs larger or smaller shares than they deserve.

Class Action Suit Filed by Laid Off Employees
Three laid off employees filed a class action complaint against the dissolving firm Heller Ehrman. The complaint proposes various classes to cover "hundreds of staff and associates who have been or will be terminated since the firm's vote to dissolve. The former employees allege that they were terminated without paying them wages owed in accordance with the federal and California WARN Acts, vacation laws in California and Heller's own employee contacts governing vacation payouts. The plaintiffs were laid off in a series of recent and massive layoffs.

Gift Card Contract Breach and Deception Claims Proceed
A class action against a leading gift card distributor will go forward following a Brooklyn-based appellate panel's finding that the company's imposition of improperly disclosed "dormancy" fees may constitute breach of contract and deceptive business practices. The company was sued due to their $2.50 dormancy fee in conjunction with the manner in which the fees were disclosed. Plaintiffs argue that the unreadability of the provisions detailing the card's administrative fees, such as the dormancy fee that automatically kicks in seven months after purchase, renders the provisions unenforceable. The font size is impermissibly small and the terms are tucked away on the final page of the 10-page pamphlet accompanying the card.

Retired NFL Players Suit Up for Licensing Fight
Retired NFL players signed licensing deals to allow their union to market their images, but the players allege that they should have shared equally in the revenue, and that some older players have received nothing at all. The class action lawsuit consists of 2,000 former players as plaintiffs and the damages could exceed $81 million plus punitive damages. The defendants, meanwhile, claim that every player whose likeness was used received royalties, and that the retirees were never entitled to an equal share.

Wachovia to Pay $200 Million to Settle Telemarketing Suits
Wachovia Corp. agreed to pay $200 million to resolve lawsuits claiming it profited by ignoring fraudulent telemarketers who used the bank to help them steal from consumers. Victims of the telemarketing frauds sued in federal court in Philadelphia, claiming that Wachovia knew of claims of the telemarketers using "demand drafts" or unsigned checks to steal from their victims. The suits were filed on behalf of all people in the United States who lost money to the telemarketers from June 2003 to February 2006. The settlement will reimburse $163 million they allegedly lost to the fraud, plus bank fees.

Lawsuit Alleges Illegal Tip Pooling in Las Vegas Restaurant
A group of 20 restaurant employees, including servers, bussers and bartenders, has filed a federal class action alleging a Las Vegas beer house violated state and federal wage and hour laws by requiring them to share their tips with managers and other non-tipped workers. Las Vegas allegedly collected all tips from servers, bussers, runners and bartenders; retained a portion of the money for itself; distributed some to workers who do not customarily receive tips; and then passed on the remaining money to the tipped employees, according to the complaint. The plaintiffs claimed they were paid less than minimum wage and made up the difference with the tips it collected and then distributed to employees.

Ohio Plaintiffs Secure $97.5 Million Payout from PwC in AIG Securities Class Action
Prominent international accounting firm PricewaterhouseCoopers has agreed to pay $97.5 million to settle its part in a securities class action filed against American International Group by three Ohio pension funds. The settlement is one of the 10 highest ever paid by an accounting firm to settle a securities fraud class action. The settlement closes the book on PwC's role in a suit filed against AIG in 2004. In the original suit, the three plaintiffs sought damages for shares purchased between 1999 and 2005. AIG was forced to restate earnings by nearly $4 billion in 2005 after the New York State attorney general and the SEC commenced investigations into charges of accounting irregularities, bid-rigging and improper workers' compensation funds allegedly occurring at the insurance giant.

Chocolate Makers Seek Suit Dismissals
The major U.S. chocolate manufacturers have asked a federal judge to dismiss class action lawsuits alleging price fixing among the companies in the U.S. The class action lawsuits were filed by multiple retailers, wholesalers and other chocolate buyers who allege that the chocolate manufacturers conspired to fix prices from late 2002 to late 2007, increasing prices three separate times.

Descendants of Armenian Genocide File Class Action Against Insurer
Descendants of the Armenian genocide filed another class action against an insurance company, claiming they are entitled to benefits that should have been paid to the beneficiaries of their ancestors. Two lead plaintiffs are suing on behalf of all Armenians who owned life insurance policies with Norwich Union and life and fire insurance policies at Commercial Union from 1880 and 1930 and whose beneficiaries were not paid. The class action involves almost 10,000 individuals.

Obama Campaign Sues in Michigan Over Alleged Voter Fraud
The Obama campaign filed a class action suit in Michigan against the Macomb County Republican Party on behalf of three county residents whose homes are undergoing foreclosures. The lawsuit follows up on a quote from the county's Republican Party chairman's promise to stop residents in foreclosed homes from voting.

Dannon Denies False Claims in Yogurt Ads
In an answer to a proposed nationwide consumer class action lawsuit, Dannon says the ads touting the alleged health benefits of its Activia and DanActive probiotic yogurts are not false and misleading. A woman sued Dannon on behalf of a proposed nationwide class of tens of thousands of consumers who allegedly bought the probiotic yogurts based on the belief that the products supplied health benefits they could not get from regular yogurts. The suit claims that Dannon has no scientific evidence to support its advertising claims.

Fastenal Agrees to $10 Million Settlement
The company Fastenal says it will pay a $10 million class action settlement to former employees who sued the company last year for unpaid overtime wages and work-break pay. It's unclear how many people would be paid as a result of the settlement, but according to estimates, more than 2,000 current and former employees of the industrial supplies company have been entitled to back pay from as far back as 2003.

Judge Upholds $185 Million Award in Wal-Mart Class Action
A Philadelphia judge has affirmed a $185 million award against retail titan Wal-Mart in a class action alleging underpayment of Wal-Mart employees as part of an opinion written for an appeal now pending with the Pennsylvania Superior Court. The judge ruled that the appeals court should affirm a jury verdict finding over 186,000 current and former Pennsylvania Wal-Mart employees were not properly compensated for off-the-clock work and missed rest breaks between 1998 and 2006.

Mercury-in-Tuna Class Action Revived
The 3rd U.S. Circuit Court of Appeals has revived a class action suit against the manufacturer of Chicken-of-the-Sea brand tuna brought by consumers who say they were never warned that excessive consumption could lead to mercury poisoning. The unanimous three-judge panel found that a lower court improperly dismissed the suit on the grounds that it was pre-empted by the U.S. Food & Drug Administration regulations.

Agency Disclosed Drivers' Personal Info, Class Action Says
Two data collection companies violated the federal Drivers' Privacy Protection Act by obtaining the personal information of hundreds of thousands of Missouri drivers from the state's Department of Revenue and selling it to third parties, according to a class action lawsuit. Two plaintiffs seek to represent a group of licensed Missouri drivers whose personal information, including Social Security numbers, the state's Revenue Department allegedly disclosed to the defendant companies.

Iraq Injury Spurs Class Action
A wrecker driver who signed on with Houston-based Kellogg, Brown & Root to work in Iraq says the company dumped him in a war zone with poorly trained, unskilled co-workers whose inability to follow simple instructions left him injured and unable to work. His lawyers filed a class action in Georgia outlining his experiences with the multinational contractor and pointing to several other highly publicized reports of deaths, accidents and sexual assaults allegedly tied to the company. Similar actions have been filed in other court jurisdictions across the nation with mixed results.

Lower Court to Rule on Exxon Spill Interest Amount
The U.S. Supreme Court has refused to decide whether Exxon Mobil Corp. must pay interest to victims of the worst U.S. oil spill that would roughly double the $507 million judgment the high court approved in June. The issue is whether interest has been accruing since 1994, when a federal jury first awarded punitive damages for the 1989 oil spill in Alaska. Fisherman and other victims of the spill said if interest is not owed from that date, the value of the award when adjusted for inflation would be cut in half.

Plaintiffs Firms Score $303 Million Class Action Settlement from GM and Deloitte
General Motors and Deloitte & Touche, two of the United States' leading automotive and accounting giants, have agreed to settle a $303 million class action settlement over allegations that GM made material misstatements in its financials dating back to 2000. Plaintiffs claimed that GM and Deloitte engaged in accounting manipulation by accelerating income and spreading it out over a period of year. Certain revenue was reported as ordinary income when it should have been reported as extraordinary.

Judge Tosses $277 Million Jury Verdict in Securities Class Action
In January, a jury ordered Apollo Group to pay $277 million in compensatory damages for misling their investors and not disclosing that they were being investigated by the U.S. Department of Education for violating federal law in the way it compensated its college recruits. However, a judge recently overturned the jury's verdict, ruling that investors did not prove that the original disclosure of the Education Department review was the reason Apollo Group stock dropped.

Tainted Peanut Butter Cases Can't Proceed as Class Action Lawsuits
A judge has refused to allow litigation arising from salmonella-tainted peanut butter to proceed as class action lawsuits. The case stems from a 2007 salmonella contamination of peanut butter at a manufacturing plant in Georgia. In all, 628 people in 48 states had been infected with the salmonella bacteria after eating the tainted peanut butter.

Subprime Class Action Proliferating
For months, securities industry lawyers have been saying they've got a lot on their plate. A recent report quantifies a significant rise in litigation. In the first six months of 2008, the financial services sector produced 63 class action filings, more than the total number from all of last year.

Cruise Passengers Claim Gallery Short-Changed Them During Voyage
A real estate agent who purchased two pieces of bogus art aboard a Celebrity Cruise Lines cruise is hoping other passengers will join him in a class action lawsuit against the cruise line. He claims that the cruise operator allows passengers to become prey for swindlers by allowing sellers of phony art to sell their faux wares aboard the ship.

Pennsylvania High Court to Hear Kia Class Action Appeal
The Pennsylvania Supreme Court will consider a high profile class action case over allegedly faulty brakes that could have a major impact on Pennsylvania class action law. A Philadelphia court awarded $5.6 million to owners of Kia sedans with allegedly faulty braking systems.

Rite Aid is Selling Expired Drugs Claims Pennsylvania Class Action Suit
Pharmacy retailer Rite Aid sells grossly outdated over-the-counter drugs, baby formula and other products, according to a class action lawsuit filed in Philadelphia federal court. The stale drugs endangered consumers because of their potential ineffectiveness, diminished efficacy or general lack of safety. The suit is a result of a recent ABC news report that said investigators from the office of the New York Attorney General found over-the-counter drugs being sold more than two years after their expiration dates.

Exxon Valdez Families Ask for Millions in Interest
The Supreme Court has asked Exxon to respond to a recent filing by the Alaskan fishermen, families and others whose $2.5 billion punitive damages award for the Exxon Valdez oil spill was cut to $500 million by the Supreme Court in June on whether they may collect interest of almost an equal amount on that award.

Verizon Settles Suit Over Early Termination Fees
Verizon Wireless has agreed to pay $21 million to settle a lawsuit filed by California customers upset with the company's early termination fees. The settlement is the result of a lawsuit filed by cell phone carriers who alleged that early termination fees violate California law.

Quiznos Franchise Holders Sue Parent Company in Class Action Suit
A group of Quiznos franchise holders in southwestern Pennsylvania is suing the Colorado-based company in a class action lawsuit claiming the parent company promotes "grossly inflated" company profits at their expense. The franchise owners allege that the parent company oversaturates areas with Quiznos restaurants, many of which fail as a result. The company also forces franchise owners to deal with suppliers connected to Quiznos, who charge high prices and cause the stores to lose money.

LifeLock Ads Overstate Identity Theft Service, Suit Says
LifeLock, an identity theft protection service that broadcasts its CEOs Social Security number in its ad campaign, exaggerates the level and effectiveness of its identity protection, according to a federal court lawsuit. The company already faces five other consumer class actions around the country with similar allegations. The suit claims LifeLock's ads are fraudulent because they mislead consumers about the scope of LifeLock's protection services and the limited nature of its "$1 million guarantee". According to the company, if a customer's identity is stole, LifeLock will hire lawyers and investigators to "recover your good name" and will reimburse money lost because of the theft. However, it does not reimburse a customer for the financial losses, such as lost profits or business, caused by identity theft.

Ex-Honors Program Applicants Sue Department of Justice Over Politicized Hiring
A former candidate for the Justice Department's honors program is suing for $100,000 in damages, alleging Justice officials violated his rights and those of others when they brought political bias into vetting honors program applications. The class action lawsuit is the first suit resulting from an internal Justice report that says two former Justice officials illegally screened applicants to the honors and summer intern programs.

Settlements Reached in Health Club Disputes
Pennsylvania Attorney General Tom Corbett has sued two health clubs and reached settlements with two others in the aftermath of business deals that left some clients without access to services for which they had already paid. Both health clubs closed abruptly, leading to 83 complaints from clients who already had paid for memberships. The lawsuit accused the health club's president and treasurer of failing to give refunds to members who, after the change in operations, did not get full value from their membership payments.

Class Action No Cure for Uninsured Patient's Bill
A federal appeals court has rejected a class action suit brought by uninsured hospital patients who claimed that the practice of charging them significantly higher rates than insured patients or those covered under Medicare and Medicaid is discriminatory and violated consumer protection laws. In the suit, plaintiffs lawyers argued that the practice of "price gouging" uninsured patients and charging unfair and unreasonable prices constitutes "unconscionable commercial conduct" under the New Jersey Consumer Fraud Act. But the judges found that plaintiffs were effectively asking the court to solve a political problem.

Attorneys to Decide Bridge Victims' Compensation
Attorneys will decide how to divide $36.6 million among more than 180 people who were either involved in the Minnesota bridge collapse or had loved ones who died. The compensation package was signed into law in May and capped the victims' nine-month fight for state help recovering from the bridge collapse, which injured 145 and killed 13. The package is an unprecedented response by Minnesota, which is only liable under state law for up to $1 million for the entire incident.

40,000 Claims Filed for $580 Million Smokers' Trust Fund
An unexpectedly large number of sick smokers staked claims to a $580 million fund set aside in litigation against the nation's biggest cigarette makers, which could produce awards of about $15,000 a person. About 40,000 claims were filed in time for a deadline, but only about 20,000 had been expected by a team handling the distribution.

Jury Awards $6 Million in Class Action Against Kia Over Defective Brakes
A jury awarded $6 million in a class action suit against Kia Motors America Inc. for claims that its Sephia sedan, sold in the late 1990s, had a defective brake system. The suit charged that the Sephia's braking system didn't adequately dissipate heat, causing pads and rotors to wear down at 10,000 mile intervals. The plaintiffs were people who purchased the Sephia between 1997 and 2000, about 8,450 in number.

Animal Owners Seek Class Action Status in Suit Over Pet Food Additives
Thirty pet owners are seeking class action status in a year-old lawsuit against leading pet food manufacturers, packers and their retailers. The pet owners complain that the $58 billion spent by consumers on pet food over the last four years has been without the knowledge that the "wholesome," "quality," "premium" or "gourmet" foods they are feeding their pets "are made of wholly or partially of inedible garbage unfit for human consumption."

Aetna Settles Federal Class Action Seeking Health Coverage for Eating Disorders
Aetna has agreed to pay $250,000 in reimbursements to up to 100 New Jersey policyholders whose eating disorder related claims were denied. The settlement is in response to a class action suit brought by insureds seeking the same benefits for anorexia and bulimia that are available in cases of biologically based mental illnesses such as schizophrenia.

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