SAN FRANCISCO - A woman lacks injury from "unlimited downloading" websites she did not enroll in, but her allegations that a single company controlled the advertising of all the sites allows her to pursue her California unfair competition law (UCL) claims against it, a federal judge held June 14 (Kimberly Yordy v. Plimus Inc., No. 12-0229, N.D. Calif.; 2012 U.S. Dist. LEXIS 82719).
SAN DIEGO - A federal judge in California on June 15 granted a consumer's motion for attorney fees in a Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.S. §§1692 et seq. lawsuit against a debt collector and others, ruling that counsel for the consumer has requested fees that are reasonable and in line with what has been approved in other cases similar to the instant action (Donald R. Williams v. Midland Funding LLC, et al., No. 11-2539, S.D. Calif.; 2012 U.S. Dist. LEXIS 83490).
SAN DIEGO - The Fourth District California Court of Appeal on June 14 dismissed an appeal brought by a defendant in a construction defects action, ruling that "it is barred by the seller's post-judgment settlement with the buyers and satisfaction of judgment" (Christopher Smith, et al. v. The Walters Group, et al., No. D058693, Calif. App., 4th Dist.; 2012 Cal. App. Unpub. LEXIS 4461).
SANTA ANA, Calif. - It makes no sense to apply California's unfair competition law (UCL) to homeowner association elections that involve no commercial activity, a state appeals court held June 15 (Dinh Ton That v. Alders Maintenance Association, No. G044799, Calif. App., 4th Dist., Div. 3; 2012 Cal. App. LEXIS 708).
LOS ANGELES - The Second District California Court of Appeal on June 14 dismissed an appeal filed by a defendant in a construction defects action, ruling that the company attempted to appeal from a nonappealable order (Oak Springs Villas Homeowners Association v. Advanced Truss Systems Inc., et al., No. B234568, Calif. App., 2nd Dist.; 2012 Cal. App. LEXIS 692).
SAN FRANCISCO - Citing evidence that a patent holder's expert witness had access to confidential information while serving as a consultant for a company now owned by the accused infringer, a California federal judge on June 15 granted in part a motion to disqualify (Oracle America Inc. et al. v. DrugLogic Inc., No. 11-910, N.D. Calif.).
SAN FRANCISCO - The injury in a loss-of-consortium claim arises from the spouse's loss of the marital relationship, rendering the fact that the couple was not married at the time of the husband's alleged exposure to asbestos irrelevant, a California appeals court held June 13 (Sandra Leonard v. John Crane Inc., No. A133322, Calif. App., 1st Dist., Div. 5). Subscribers may view the opinion available within the full article.
SANTA ANA, Calif. - A California judge was ordered by a state appeals court panel on June 13 to reduce a $738,316.09 award of attorney fees he handed down to plaintiffs who settled claims with Pacific Mercantile Bank over the lender's alleged violated of the Truth in Lending Act (TILA) 15 U.S.C.S. § 1601, after the panel found that while the plaintiffs were entitled to attorney fees, the judge failed to properly consider the degree of success the plaintiffs achieved (James LaLiberte, et al. v. Pacific Mercantile Bank, No. G045275, Calif. App., 4th Dist., Div. 3).
SAN DIEGO - A man cannot show that he suffered harm from a company's failure to comply with certain disclosure requirements under California's personal-information-sharing law and, thus, economic injury on which to pursue his California unfair competition law (UCL) claims, a federal judge held June 14 (David Boorstein v. Men's Journal LLC, No. 12-771, C.D. Calif.). Subscribers may view the opinion available within the full article.
SAN FRANCISCO - A federal judge on June 13 allowed a man to proceed with California unfair competition law (UCL) claims alleging that a supplement manufacturer misleadingly advertised the benefits of a product containing a dangerous geranium-based stimulant (Stephen J. Rush, et al. v. Nutrex Research Inc., et al., No. 12-1060, N.D. Calif.). Subscribers may view the opinion available within the full article.
SAN JOSE, Calif. - A group of putative class plaintiffs failed to establish that their iPhones, iPads and related devices (iDevices) qualified as "electronic communication services" facilities or "electronic storage" under the Stored Communications Act (SCA), a California federal judge ruled June 12, dismissing related privacy violations claims related to alleged tracking via the use of third-party applications (apps) on devices manufactured by Apple Inc. (In Re iPhone Application Litigation, No. 5:11-md-02250, N.D. Calif.; 2012 U.S. Dist. LEXIS 81426).
SAN DIEGO - Plaintiffs asked a California federal judge on June 13 to preliminarily approve a settlement worth more than $38 million in a state unfair competition law (UCL) case alleging that online retailers used personal information to enroll consumers in rewards programs without their knowledge or consent (In Re: EasySaver Rewards Litigation, No. 09-02094, S.D. Calif.). Subscribers may view the memo supporting preliminary approval available within the full article.
SAN DIEGO - A commercial general liability insurer has alleged sufficient facts to establish that it may be entitled to relief on its claim seeking equitable contribution of the more than $930,000 it spent defending its energy drink manufacturer insured against a competitor's lawsuit, a California federal judge ruled June 12 (Citizens Insurance Company of America v. National Casualty Company, No. 12cv430-IEG (WVG), S.D. Calif.; 2012 U.S. Dist. LEXIS 81327).
SAN DIEGO - A federal judge in California on June 12 ruled on various issues in a longstanding dispute over contracts between a U.S. company and the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran, declaring that the company has satisfied a judgment confirming an international arbitration award that was issued in favor of Iran in 1998 (Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Systems Inc., et al., No. 98-CV-1165-B, S.D. Calif.; 2012 U.S. Dist. LEXIS 81999).
CINCINNATI - Application of Oregon substantive law and dismissal of wrongful death claims stemming from alleged benzene exposure under that state's six-year statute of repose were correct, the Sixth Circuit U.S. Court of Appeals held June 13 (Lisa Caswell, et al. v. Olympic Pipeline Company, et al., No. 10-35748; Lisa Caswell, et al. v. Union Oil Company of California; et al., No. 11-35260, 6th Cir.). Subscribers may view the opinion available within the full update.
SAN FRANCISCO - A former partner with bankrupt law firm Dewey & Leboeuf on June 12 filed a lawsuit in a California state court against principals in the firm, seeking damages for alleged fraud and contending that the principals deliberately misrepresented the firm's financial condition to attract attorneys to join Dewey (Henry Bunsow v. Steven H. Davis, et al., No. 12-521540, Calif. Super., San Francisco Co.). Subscribers may view the complaint available within the full update.
SANTA ANA, Calif. - The receiver for Medical Capital Holdings Inc. (MedCap) said yesterday that he had reached a $106 million settlement with Wells Fargo Bank NA and Bank of New York Mellon (BNY Mellon), resolving allegations that the banks were complicit in MedCap's alleged Ponzi scheme (Securities and Exchange Commission v. Medical Capital Holdings Inc., et al., No. 09-00818, C.D. Calif.).
(Settlement available. Document #88-120625-274M. Trustee's declaration in support of motion for approval of settlement available. Document #88-120625-275X.)
In a declaration in support of his motion for approval of the settlement filed in the U.S. District Court for the Central District of California, MedCap trustee Thomas A. Seaman said Wells Fargo agreed to pay $49 million and BNY Mellon agreed to pay $57 million.
Litigation Costs, Risks
MedCap raised money by setting up special purpose corporations, known as medical provider funding corporations (MPFCs), which sold notes to investors. In July 2008, the U.S. Securities and Exchange Commission sued MedCap, its entities and principals Sydney Field and Joseph Lampariello, alleging that Field and Lampariello engaged in a Ponzi scheme to defraud investors in the MPFCs.
The banks served as indenture trustees for the MPFCs. The banks were alleged to have breached the noteholder issuance and security agreements, which outlined their control and disbursement of funds. On Oct. 12, 2010, the District Court issued an order authorizing Seaman to file claims against the banks if Seaman deemed proper. He then entered settlement discussions with the banks. Seaman said he opted for a settlement because he was concerned about the costs and risks of litigation against the banks.
"In [the] worst case scenario, if the Trustees prevailed (or if this Settlement is not consummated and the Trustees prevail in the future), the Receivership Estate would recover nothing, and would face indemnity claims that could well exceed $50 million, wiping out half of the Receivership Estate," Seaman said.
Seaman also said the settlement is the best option in light of related class and mass actions against the banks.
"The net benefit of the Settlement is significantly greater than $104 million, as it eliminates the risk to the Receivership Estate of having to pay the Trustees' legal fees should the Class Action or Mass Actions ultimately fail - an indemnity claim that I estimate currently exceeds $25 million, and would likely exceed $50 million if those cases are tried," he said.
Seaman is represented by Ronald Hayes Malone and Frank A. Cialone of Shartsis Friese in San Francisco. Wells Fargo is represented by Edward T. Wahl, Stephen M. Mertz and Theresa H. Dykoschak of Faegre & Benson in Minneapolis, Jesse S. Finlayson of Finlayson Williams Toffer Roosevelt & Lilly in Irvine, Calif., and Timothy William Loose of Gibson Dunn & Crutcher in Los Angeles. Counsel information for BNY Mellon was not available.
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SAN FRANCISCO - A California appeals court on June 13 rejected an expert's conclusion that a man suffered exposure to asbestos, finding that it constituted conjecture based on generalities and that the man had not demonstrated causation (John Casey and Patricia Casey v. Perini Corp., No. A131881, Calif. App., 1st Dist., Div. 4). Subscribers may view the opinion available within the full update.
FRESNO, Calif. - A California federal magistrate judge on June 11 recommended granting final approval of a $518,000 settlement of a wage-and-hour class complaint filed against a bridal store chain (Estella Schiller, et al. v. David's Bridal, Inc., et al., No. 10-616, E.D. Calif.; 2012 U.S. Dist. LEXIS 80776).
SAN FRANCISCO - A California federal magistrate judge on June 11 dismissed six out of seven claims, one with prejudice and five without, contained in a class action complaint filed against an online video provider accused of wrongfully disclosing viewers' video selections and personal identification information to third parties (In Re Hulu Privacy Litigation, No. 11-3764, N.D. Calif.; 2012 U.S. Dist. LEXIS 80601).
PASADENA, Calif. - Taking a third-party bad faith case as an opportunity to address an unsettled matter of California insurance law, a Ninth Circuit U.S. Court of Appeals panel on June 11 held that "an insurer has a duty to effectuate settlement where liability is reasonably clear, even in the absence of a settlement demand" (Yan Fang Du v. Allstate Insurance Co., et al., No. 10-56422, 9th Cir.; 2012 U.S. App. LEXIS 11755).
LOS ANGELES - Arguing that it will be irreparably harmed, CBS Broadcasting Inc. moved for a temporary restraining order on June 7 in a California federal court, seeking to bar rival network American Broadcasting Cos. Inc. (ABC) from airing a reality television show similar to CBS's hit "Big Brother" (CBS Broadcasting Inc. v. American Broadcasting Companies Inc., et al., No. 12-4073, C.D. Calif.).
LOS ANGELES - A California federal judge on June 7 granted certification of a class of Los Angeles jail inmates who allege widespread abuse at the hands of deputies (Alex Rosas, et al. v. Leroy Baca, et al., No. 12-428, C.D. Calif.; 2012 U.S. Dist. LEXIS 79344).
SAN FRANCISCO - A California federal judge presiding over a civil Racketeer Influenced and Corrupt Organizations Act class suit on June 7 denied a request to hold an attorney in contempt of court for continuing to represent class members in a bankruptcy action after being barred from representing members of the class in the present suit (Christina Smith, et al. v. Levine Leichtman Capital Partners, Inc., et al., No. 10-10, N.D. Calif.; 2012 U.S. Dist. LEXIS 79346).
WILMINGTON, Del. - A Delaware Chancery Court vice chancellor held June 11 that a shareholder was not in privity with a shareholder in a dismissed California federal case and that, therefore, the dismissal did not have a preclusive effect on the Delaware case (Louisiana Municipal Police Employees' Retirement System v. David Pyott, et al., No. 5795-VCL, Del. Chanc.).