4th Circuit Finds It Lacks Jurisdiction To Review Security Clearance Revocation

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).

Vice Chancellor Denies Motion To Dismiss Shareholder Derivative Case

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).

Judge Remands State's Lawsuit Against Standard & Poor's To State Court

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).

Lead Plaintiff Failed To Plead Recklessness In Securities Suit, Judge Rules

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.).

DuPont Board Members Say Shareholder's Derivative Suit Should Be Dismissed

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.).

NVIDIA Secures Dismissal Of California CFAA, Unfair Competition Claims

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.).

11th Circuit: Participant's Benefits-Denial And Disclosure Claims Fail

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).

Owner Of Withdrawing Employer Is Liable For Assessment, 7th Circuit Rules

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).

News Corp. Directors And Officers Settle Shareholder Dispute For $139 Million

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.).

High Court Lets Stand 9th Circuit Ruling On ERISA Disability Benefit Offset

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.).

Judge: Lead Plaintiffs Failed To Plead Federal Securities Law Claims

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.).

2nd Circuit: Court Erred In Denying Remand To State Court In Securities Suit

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.).

Preliminary Certification Granted In Suit Challenging Defense Of Marriage Act

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.).

High Court Grants Cert, Remands ERISA Case In Light Of US Airways

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.).

Directors, Officers Rely On Business Judgment Rule Against Shareholder Complaint

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.).

Federal Judge Dismisses 4 Defendants In Payment Dispute; 7 Defendants Remain

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).

Federal Judge Dismisses Putative ATM Fee Class Action

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).

Judge: Shareholders Failed To Plead Any Of Their Federal Securities Law Claims

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).

7th Circuit: Service Provider Isn't Fiduciary With Respect To Revenue Sharing

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).

Fifth Third Agrees To Pay $16M To Settle Federal Securities Law Claims

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).

7th Circuit: Security Expert Wrongly Barred From College Dorm Rape Case

CHICAGO - A premises liability expert's methodology was reliable in determining that a college failed in its duty to a student who was raped in her dorm, a Seventh Circuit U.S. Court of Appeals panel held April 16 in reversing his exclusion from a negligence case (Katherine Lees v. Carthage College, et al., No. 11-3061, 7th Cir.; 2013 U.S. App. LEXIS 7532).

Countrywide Reaches $500M Settlement In Mortgage-Backed Securities Class Actions

LOS ANGELES - Countrywide Financial Corp. will pay $500 million to shareholders in three related securities class action lawsuits to settle claims that it misrepresented the investment quality of mortgage-backed securities (MBS) in what is being called the largest-ever MBS class action recovery under the Securities Act of 1933, according to a press release issued by class counsel on April17 (David H. Luther v. Countrywide Financial Corp., No. 12-5125; Western Conference of Teamsters Pension Plan v. Countrywide Financial Corp., No. 12-5122; and Maine State Retirement System v. Countrywide Financial Corp., No. 10-0302, C.D. Calif.).

High Court: Plan Terms Govern ERISA Reimbursement Action Based On Equitable Lien

WASHINGTON, D.C. - The U.S. Supreme Court on April 16 ruled that a health plan administrator's claim for reimbursement against a plan participant under Employee Retirement Income Security Act Section 502(a)(3) based on an equitable lien by agreement is governed by the terms of the plan and is not subject to equitable limitations (U.S. Airways, Inc. v. James McCutchen, et al., No. 11-1285, U.S. Sup.).

Shareholder: N.Y. Federal Court Holds Jurisdiction Over Director And Officer

NEW YORK - An investor told a New York federal court on April 10 that numerous reasons exist as to why the New York federal court has jurisdiction over a bank, one of its directors and one of its officers regarding a shareholder lawsuit (SBAV LP v. Porter Bancorp, Inc., et al., No. 13-cv-00372, S.D. N.Y.).

High Court Denies Review Of Ruling Finding Nonfiduciary Liability

WASHINGTON, D.C. - The U.S. Supreme Court on April 15 declined to review a Third Circuit U.S. Court of Appeals ruling that a nonfiduciary financial planner who marketed a tax avoidance scheme as a multiple-employer welfare arrangement (MEWA) to several employers is liable under Employee Retirement Income Security Act Section 502(a)(3) for knowingly participating in a prohibited transaction in connection with the MEWA (James W. Barrett v. Universal Mailing Service, Inc., et al., No. 12-975, U.S. Sup.).