OAKLAND, Calif. - Lead plaintiffs and defendants in a securities class action accusing the defendants of misrepresenting an information technology company's business and financial condition in violation of federal securities law have agreed to proceed with the filing of a second amended complaint and dismiss the action with prejudice, according to court documents filed in California federal court on April 29 (In re Cisco Systems Inc. Securities Litigation, No. 11-1568, N.D. Calif.).
NEW YORK - A federal judge in New York on April 26 dismissed a shareholder's amended securities class action complaint, ruling that the shareholder failed to plead subjective falsity as required under Second Circuit U.S. Court of Appeals precedent (In re American International Group, Inc. 2008 Securities Litigation, No. 08-4772, S.D. N.Y.; 2013 U.S. Dist. LEXIS 60185).
SANTA ANA, Calif. - Wells Fargo Bank NA on April 30 agreed to pay $105 million to settle consolidated class action claims alleging that it breached its contract by giving noteholders' funds to Medical Capital Holdings Inc. (MedCap) as part of MedCap's alleged $1 billion Ponzi scheme (In Re: Medical Capital Securities Litigation $(Steven Masonek, et al. v. Wells Fargo Bank NA, No. 09-1048, Kenneth Bain, et al. v. Wells Fargo Bank, et al., No.10-0548, James L. Abbate, et al. v. Wells Fargo Bank, et al., No.10-6561$), No. 10-ml-2145, C.D. Calif.).
WILMINGTON, Del. - A shareholder bringing a derivative lawsuit against certain directors and officers of a company over the directors' and officers' alleged violation of a shareholder-approved equity awards plan told a Delaware federal court on April 25 that he has adequately pleaded facts to support his claim that the directors and officers breached their fiduciary duties (Clark Leips, derivatively on behalf of Mindspeed Technologies, Inc., v. Raouf Y. Halim, et al., No. 13-cv-00015, D. Del.).
NEW YORK - The number of securities and business litigation and enforcement lawsuits filed in the first quarter of 2013 increased slightly from the fourth quarter of 2012, but the numbers were still "significantly lower than the annual average of the previous four years," according to a quarterly report made available on April 30 by insurance analytics and research provider Advisen Ltd.
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on April 25 affirmed the revocation of a federal employee's security clearance following his marriage, finding that it lacks jurisdiction to review the decision (Mahmoud M. Hegab v. Letitia A. Long, et al., No. 12-1182, 4th Cir.; 2013 U.S. App. LEXIS 8411).
WILMINGTON, Del. - A Delaware vice chancellor denied a company's directors' and officers' motion to dismiss a shareholder derivative lawsuit on April 25, finding that the shareholder had pleaded particularized facts that raise a reasonable doubt that the directors and officers acted in good faith in failing to respond to the shareholder's demand that the board of directors investigate an alleged weaknesses in the corporation's internal controls (George Rich, Jr., Derivatively on Behalf of Fuqi International, Inc., v. Yu Kwai Chong, et al., No. 7616-VCG, Del. Chanc.; 2013 Del. Ch. LEXIS 106).
HARTFORD, Conn. - A federal judge in Connecticut on April 24 granted the State of Connecticut's motion to remand a lawsuit alleging that a subsidiary of Standard & Poor's Financial Services LLC violated the state unfair trade practices law, ruling that the defendants' removal of the action to federal court was untimely (State of Connecticut v. The McGraw-Hill Companies Inc., et al., No. 13-311, D. Conn.; 2013 U.S. Dist. LEXIS 58528).
NEW YORK - A federal judge in New York on April 25 dismissed a lead plaintiff's second amended securities class action complaint against certain current and former executive officers of Eastman Kodak Co., ruling that the lead plaintiff failed to show recklessness on the part of the defendants in pleading scienter (Timothy A. Hutchinson v. Antonio M. Perez, et al., No. 12-1073, S.D. N.Y.).
WILMINGTON, Del. - Directors and officers of E. I. du Pont de Nemours Co. told a Delaware federal court on April 23 that a shareholder has failed to adequately plead that presuit demand upon the company's board of directors would have been futile (Robert Zomolosky, derivatively on behalf of E.I. Du Pont De Nemours and Company v. Ellen Kullman, et al., No. 13-cv-00094, D. Del.).
SAN FRANCISCO - A California federal judge agreed April 22 that allegations that NVIDIA Corp. violated the state unfair competition law (UCL), codified at California Business and Professions Code Section 17200, must fail because they are preempted by the federal Copyright Act (Metabyte Inc. v. NVIDIA, et al., No. 12-44, N.D. Calif.).
ATLANTA - A plan insurer's calculation of benefits due to a participant for his out-of-network surgery was not wrong under the plan terms, and the insurer did not violate the Employee Retirement Income Security Act by failing to provide documents on which the insurer relied to calculate and verify the benefits due, the 11th Circuit affirmed April 22 (Brian Fox v. Blue Cross and Blue Shield of Florida Inc., No. 12-14569, 11th Cir.; 2013 U.S. App. LEXIS 7906).
CHICAGO - The owner of a company that withdrew from a multiemployer plan is personally liable for the company's withdrawal liability under the Employee Retirement Income Security Act, as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), because the owner owned and leased property to the company and because the owner performed independent-contractor work for a country club, the Seventh Circuit U.S. Court of Appeals ruled April 22 (Central States, Southeast and Southwest Areas Pension Fund, et al. v. Charles F. Nagy, No. 11-3055, 7th Cir.; 2013 U.S. App. LEXIS 7912).
WILMINGTON, Del. - Parties to a shareholder derivative suit against directors and officers of News Corp. informed a Delaware vice chancellor on April 22 that they had reached a $139 million settlement of their dispute (In re News Corporation Shareholder Derivative Litigation, No. 6285-VCN, Del. Chanc.).
WASHINGTON, D.C. - The U.S. Supreme Court on April 22 denied review of a Ninth Circuit U.S. Court of Appeals ruling that the administrator of a plan governed by the Employee Retirement Income Security Act did not abuse its discretion by interpreting the plan's provision that disability benefits would be reduced by pension benefits "received" to include amounts rolled over into an individual retirement account (IRA) (David Day v. SBC [AT&T] Disability Income Plan, No. 12-1144, U.S. Sup.).
MIAMI - Lead plaintiffs in a securities class action lawsuit against a cruise line and several of its executive officers have failed to plead any of their federal securities law claims relating to the defendants' alleged issuance of false and misleading statements regarding the company's business and financial condition, a federal judge in Florida ruled April 19 (In re Royal Caribbean Cruises Ltd. Securities Litigation, No. 11-22855, S.D. Fla.).
NEW YORK - A federal district court erred in denying American International Group Inc.'s motion to remand a complaint filed against Bank of America Corp., certain of its subsidiaries and others under provisions of the Edge Act, a Second Circuit U.S. Court of Appeals panel ruled April 19 (American International Group Inc., et al. v. Bank of America Corp., et al., No. 12-1640, 2nd Cir.).
SANTA ANA, Calif. - A California federal judge on April 19 provisionally certified a class complaint challenging the constitutionality of Section 3 of the Defense of Marriage Act (DOMA) and alleging that it prevents homosexual immigrants from receiving certain immigration benefits available to immigrants in heterosexual marriages (Martin R. Aranas, et al. v. Janet Napolitano, Secretary of the Department of Homeland Security, et al., No. 12-1137, C.D. Calif.).
WASHINGTON, D.C. - The U.S. Supreme Court on April 22 granted review of a Ninth Circuit U.S. Court of Appeals ruling regarding "appropriate equitable relief" under Section 502(a)(3) of the Employee Retirement Income Security Act and vacated and remanded in light of the high court's recent ruling in U.S. Airways, Inc. v. James McCutchen, et al. (No. 11-1285 $(April 16, 2013$)) (CGI Technologies and Solutions, Inc. v. Rhonda Rose, et al., No. 12-240, U.S. Sup.).
CHICAGO - Directors and officers of a company claimed in an Illinois federal court on April 19 that they are protected from a shareholder's allegations under the business judgment rule (Frank Jeffers v. Retail Properties of America, Inc., et al., No. 12-cv-08522, N.D. Ill.).
NEWARK, N.J. - A New Jersey federal judge on April 17 dismissed claims against four health care payers in a reimbursement dispute, saying that either the defendants were not subject to the Employee Retirement Income Security Act or were not proper parties; he left claims against seven other defendants, saying that the plaintiff exhausted administrative remedies before filing suit (Sportscare of America v. Multiplan Inc., et al., No. 10-4414, D. N.J.; 2013 U.S. Dist. LEXIS 54947).
KNOXVILLE, Tenn. - A federal judge in Tennessee on April 18 dismissed a putative class action alleging that a bank violated the ATM fee-notice requirements of the Electronic Fund Transfer Act (EFTA), agreeing with the bank that the ATM in question fell under the EFTA's safe harbor provision because a fee notice was in place but was removed by someone other than the bank or its employees (Don Anderson v. Security Federal Savings Bank of McMinnville, No. 12-0527, E.D. Tenn.; 2013 U.S. Dist. LEXIS 55576).
SAN FRANCISCO - Shareholders in a securities class action have failed to plead any of their federal securities law claims in connection with a biotechnology company's alleged issuance of misrepresentations regarding the development of a DNA sequencing system, a federal judge in California ruled April 15 (Thomas J. Primo, et al. v. Pacific Bionsciences of California Inc., et al., No. 11-6599, N.D. Calif.; 2013 U.S. Dist. LEXIS 53643).
CHICAGO - A profit-sharing plan's service provider did not become a plan fiduciary within the meaning of the Employee Retirement Income Security Act by limiting the mutual funds offered to the plan and, therefore, could not be found liable for its revenue-sharing arrangements with mutual funds, the Seventh Circuit U.S. Court of Appeals affirmed April 16 (Robert Leimkuehler v. American United Life Insurance Co., Nos. 12-1081, 12-1213, 12-2536, 7th Cir.; 2013 U.S. App. LEXIS 7528).
CINCINNATI - Fifth Third Bancorp and a number of other defendants agreed to pay $16 million to settle claims that Fifth Third misrepresented its involvement in the subprime securities market in violation of federal securities laws, according to documents filed April 16 in Ohio federal court (The Eshe Fund v. Fifth Third Bancorp, No. 08-0421, S.D. Ohio).