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AIG Agrees To Pay $ 725 Million To Settle Bid-Rigging
Securities Class
NEW YORK - American International Group Inc. (AIG) has agreed
to pay $ 725 million to resolve a class action brought against it in a New
York federal court by investors who allege that the company engaged in bid
rigging and accounting improprieties, Ohio Attorney General Richard Cordray
said in a July 16 press release (In Re: American International Group Inc.
Securities Litigation, No. 04-8141, S.D. N.Y.). Read more
Overpromotion As Exception To Learned Intermediary Rule
Rejected In Zyprexa Case
NEW YORK - A Second Circuit U.S. Court of Appeals panel ruled
July 16 that a Zyprexa multidistrict litigation plaintiff failed to show
that alleged overpromotion of the atypical antipsychotic drug by
manufacturer Eli Lilly and Co. misled the plaintiff's doctor into
prescribing the drug, resulting in his diabetes (Dwight L. Dean v. Eli
Lilly and Co., No. 09-3723, 2nd Cir.).
Read more
ERISA Doesn't Provide Pension Credits Related To Settlement,
Judge Holds
PHILADELPHIA - A federal judge in Pennsylvania on July 14
ruled that regulations interpreting the Employee Retirement Income Security
Act do not grant pension credits for periods of layoff to employees who
shared in the settlement of a sex discrimination action because the
regulations intend credits for "payments that compensate for lost
wages during periods of layoff or other absence and not payments that
merely happen to include periods of layoff within the calculation"
(Phyllis Anderson, et al. v. The Bakery and Confectionary Union and
Industry International Pension Fund, et al., No. 07-1165, E.D. Pa.; 2010
U.S. Dist. LEXIS 71059). Read more
Pollution Exclusion Bars Coverage, 5th Circuit Panel Says In
Affirming
NEW ORLEANS - Insurers have no duty to defend an insured
seeking coverage for underlying personal injury suits arising out of
exposure to hazardous substances because the claims are barred by the
pollution exclusion, the Fifth Circuit U.S. Court of Appeals said July 16
(Standard Waste Systems Ltd. v. Mid-Continent Casualty Co., et al., No. 09-10973,
5th Cir.; 2010 U.S. App. LEXIS 14609).
Read more
Insolvent Insurer's Payment Is A Preferential Transfer,
Nebraska High Court Finds
LINCOLN, Neb. - The Nebraska Supreme Court on July 16 affirmed
that a payment made by an insurer before its liquidation was a voidable
preferential transfer under the Nebraska Insurers Supervision,
Rehabilitation, and Liquidation Act (NISRLA) (State of Nebraska, ex rel. L.
Tim Wagner, Director of Insurance of the State of Nebraska, as liquidator
of Amwest Surety Insurance Co. v. Gilbane Building Co., No. S-09-879, Neb.
Sup.; 2010 Neb. LEXIS 89). Read more
Judge Grants Discovery Motion In Part In Stanford Coverage Case
HOUSTON - A Texas federal judge on July 16 granted in part
directors and officers insureds' discovery motion in a coverage action
stemming from the alleged Stanford Ponzi scheme, ordering the insurers to
identify the "investor funds" they alleged constitute criminal
property in support of their claims that the insureds engaged in money
laundering under the directors and officers liability insurance policy
(Laura Pendergest-Holt, et al. v. Certain Underwriters at Lloyd's of London
and Arch Specialty Insurance, No. 09-3712, S.D. Texas, Houston Div.). Read more
8th Circuit Panel: False Insurance Application Answer Merited
Policy Rescission
ST. LOUIS - Because an insured provided false information
about his medical history, an insurer did not act in bad faith by denying
life insurance benefits to his estate and in rescinding the policy, a panel
in the Eighth Circuit U.S. Court of Appeals ruled July 15 (Michael Adam,
administrator of the estate of Richard J. Kessel, on behalf of Briale
Kessel v. Stonebridge Life Insurance Co., No. 09-3014, 8th Cir.; 2010 U.S.
App. LEXIS 14492). Read more
Split Georgia Appeals Court Reverses Jury Verdict In Breach Of
Contract Case
ATLANTA - In a split decision, a Georgia appeals court on July
15 reversed a jury finding that an insurance company breached its contract
by failing to pay for claims submitted by one of its insureds because she
was not considered an inpatient at the hospital (Blue Cross and Blue Shield
of Georgia Inc. v. Shirley, No. A10A0326, Ga. App.; 2010 Ga. App. LEXIS
706). Read more
5th Circuit: Holdouts Lack Standing To Object To Vioxx Settlement
NEW ORLEANS - Former Vioxx users who did not opt in to the
Master Settlement Agreement (MSA) with Merck & Co. have no standing to
object to the terms of the settlement, and discovery orders whereby their
cases were dismissed in the multidistrict litigation were not an abuse of
discretion, the Fifth Circuit U.S. Court of Appeals said in a July 16 per
curiam opinion (In Re: VIOXX Products Liability Litigation, MDL 1657, E.D.
La., Glenn L. Dier, et al. v. Merck & Co. Inc., No. 09-30446, 5th
Cir.). Read more
Suit Accusing NCAA Of Running Illegal Ticket Lottery Allowed
To Proceed
INDIANAPOLIS - A panel of the Seventh Circuit U.S. Court of
Appeals on July 16 ordered an Indiana federal court judge to allow claims
that the National Collegiate Athletic Association (NCAA) violated federal
racketing laws by forcing ticket buyers into a lottery to proceed (Tom
George, et al. v. National Collegiate Athletic Association, et al., No.
09-cv-3667, 7th Cir.). Read more
7th Circuit Rules On Standard In Retaliatory Discharge Cases
Governed By State Law
CHICAGO - The Seventh Circuit U.S. Court of Appeals on July 15
ruled that the state law standard, not that of federal law, is appropriate
when considering a summary judgment motion filed in a federal retaliatory
discharge case governed by Illinois law (John Gacek v. American Airlines,
Inc., No. 09-3131, 7th Cir.; 2010 U.S. App. LEXIS 14487). Read more
ESPN Reporter Sues Hotels, Stalker For Privacy Invasions
CHICAGO - ESPN reporter Erin Andrews filed suit July 15 in
Illinois state court against a man who pleaded guilty to stalking her and
the hotels where he allegedly videotaped her through the peepholes (Erin
Andrews v. Marriott International, Inc., et al., No. 2010L008186, Ill.
Cir., Cook Co.). Read more
False Claims Lawsuit Over Abbott HIV Treatment Survives Dismissal
Motion
BOSTON - A Massachusetts federal judge has allowed some False
Claims Act (FCA) allegations that Abbott Laboratories Inc. marketed
off-label use of its protease inhibitor (PI) Kaletra to go forward,
although he described them in a July 16 opinion as "thin gruel"
(United States and Others ex rel. Patrick Carpenter v. Abbott Laboratories,
Inc., No. 07-10918-RGS, D. Mass.). Read more
Judge Says Filing Of Class Action Did Not Toll Limitations Period
CHICAGO - The filing of a consolidated class action lawsuit
alleging that a mortgage lender violated the Truth in Lending Act (TILA) in
2005 did not toll the statute of limitations in a lawsuit brought in 2010
by a man and his daughter because the class action lawsuit did not involve
similar claims as to how the defendant violated the statute, a federal
judge in Illinois ruled July 14 (Melvina Swanigan, et al. v. Argent
Mortgage Company, No. 10 C 1039, N.D. Ill.; 2010 U.S. Dist. LEXIS 71083). Read more
Calif.: Lending Policies Of Federally Sponsored Groups Violate
Competition Law
OAKLAND, Calif. - A California program designed to foster
jobs, green energy and water conservation is at risk due to
mischaracterizations of the program by federal government-sponsored lending
organizations Fannie Mae and Freddie Mac, the state alleges in a July 14
unfair competition law action filed in federal court (People of the State
of California v. Federal Housing Finance Agency, et al., No. 10-03084, N.D.
Calif.). Read more
Rescission Of Contract Over Construction Defects An Arbitrable
Issue, Panel Finds
TROY, Mich. - Parties to a condominium construction contract
did not expressly exempt from an arbitration agreement the issue of
rescission of the purchase contract, and therefore the issue is arbitrable,
a Michigan appellate panel concluded July 15 in reversing the trial court's
grant of summary disposition to the builder and directing the court to
compel arbitration (Mario Meneghel, et al. v. Mondrian Properties Weston
Downs, LLC, No. 291105, Mich. App.; 2010 Mich. App. LEXIS 1376). Read more
Couple's Breach Of Contract, Negligence Claims Against Loan
Servicer Survive
CHICAGO - A federal judge in Illinois on July 15 denied Bank
of America's motion to dismiss a couple's breach of contract and negligence
claims based on the loan servicer's decision to purchase insurance on the
plaintiffs' behalf because the mortgage had an insurance escrow
(Christopher Bilek, et al. v. American Home Mortgage Servicing, et al., No.
07 C 4147, N.D. Ill.; 2010 U.S. Dist. LEXIS 71095). Read more
Flintkote Receives Approval Of $ 150 Million Settlement With
Aviva Insurance Co.
WILMINGTON, Del. - The bankruptcy judge overseeing Flintkote
Co.'s Chapter 11 bankruptcy signed an order July 15 in the federal
bankruptcy court in Delaware approving a $ 150 million settlement that
Flintkote reached with one of its insurers (In re: The Flintkote Co., et
al., No. 04-11300, D. Del. Bkcy.). Read more
Del. Federal Judge Declines To Alter Claims Order In Asbestos
Bankruptcy Case
WILMINGTON, Del. - A Delaware federal judge on July 15
declined to modify orders addressing the provision of claims information from
a trust to insurance companies for payment of asbestos claims in
Fuller-Austin Insulation Co's Chapter 11 case (In re: Fuller-Austin
Insulation Co., No. 02-1661, D. Del.; 2010 U.S. Dist. LEXIS 70986). Read more
Justice Department, California County Settle Disability Bias Suit
LOS ANGELES - The U.S. Department of Justice on July 16
announced a consent decree ending a lawsuit filed against Ventura County,
Calif., alleging disability discrimination when the county refused to hire
a qualified applicant for a children's social services position based on
the applicant's deafness (United States of America v. County of Ventura,
California, No. 09-6413, C.D. Calif.).
Read more
9th Circuit: Lender Not Entitled To Negative Equity On
Debtor's Car Loan
SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of
Appeals on July 16 ruled that an auto lender did not have a purchase money
security interest in the total amount of the outstanding balance on a
debtor's car loan, saying the creditor was not entitled to the
"negative equity" (AmeriCredit Financial Services Inc. v. Marlene
A. Penrod [In Re: Marlene A. Penrod], No. 08-60037, 9th Cir.; 2010 U.S.
App. LEXIS 14588). Read more
Rehearing Denied By Federal Circuit In Patent Dispute Over
Enforceability
WASHINGTON, D.C. - The Federal Circuit U.S. Court of Appeals,
acting en banc, on July 16 denied rehearing or a stay of an April decision
that found a patent unenforceable due to inequitable conduct pending the
outcome of an en banc review of that issue in another case (Avid
Identification Systems, Inc. v. The Crystal Import Corporation, Datamars SA
and Datamars, Inc., Nos. 2009-1216, -1254, Fed. Cir.). Read more
Federal Judge Refuses To Sever Insured's Claims In Coverage Dispute
CORPUS CHRISTI, Texas - A federal judge in Texas on July 14
denied an insurer's motion to sever an insured's contractual claims from
extracontractual claims with regard to the insurer's denial of coverage for
the insured's remodeling work (Hardesty Builders Inc. v. Mid-Continent
Casualty Co., et al., No. 10-142, S.D. Texas; 2010 U.S. Dist. LEXIS 70743). Read more
Magistrate Recommends Insurance Lawsuit As To Defects Claim Be
Remanded
HONOLULU - A federal magistrate judge in Hawaii on July 14
issued findings and a recommendation that an insurance coverage dispute
regarding an underlying construction defects case be remanded to state
court; however, the magistrate recommended that a request for attorney fees
and costs as a result of removal be denied (Coastal Construction Co. Inc.
v. North American Specialty Insurance Co., as successor in interest to
Underwriters Insurance Co., et al., No. 10-00206, D. Hawaii; 2010 U.S.
Dist. LEXIS 71143). Read more
Landlord May Not See Plaintiff's Medical Records, Rhode Island
Judge Says
PROVIDENCE, R.I. - A superior court judge in Rhode Island on
July 14 denied a landlord's request to see a plaintiff's medical records,
holding that any information relevant to the alleged lead-poisoning
injuries that would have been discovered through the records could be
obtained from other sources (Wynn Blanton, et al. v. Kenneth Littlefield
Trust, No. 08-7508, R.I. Super., Providence Co.; 2010 R.I. Super. LEXIS
107). Read more
Federal Judge Dismisses Debtors' Collection Claim; Creditors
Owed No Duty
PHILADELPHIA - A federal judge in Pennsylvania on July 14
dismissed a claim by debtors who alleged that attorneys for lenders had
violated the Fair Debt Collection Practices Act (FDCPA) by charging
inflated fees on their mortgages (Dennis A. Rhodes, et al. v. Rosemary
Diamond, et al., No. 09-1302, Chapter 13, E.D. Pa.; 2010 U.S. Dist. LEXIS
71076). Read more
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