NEW YORK - A putative class of former employees of bankrupt Hostess Brands Inc. on Nov. 21 sued the company in the U.S. Bankruptcy Court for the Southern District of New York, alleging violations of the Worker Adjustment and Retraining Notification Act (WARN), 29 U.S.C.S. § 2101. (Mark Popovich v. Hostess Brands Inc. [In Re: Hostess Brands Inc.], No. 12-22052, S.D. N.Y. Bkcy.).
LOS ANGELES - An organization's class action attacks allegedly false representations about the nature of business ratings, not the protected activity of the ratings themselves, a California appellate court held Nov. 19 in affirming denial of a motion to strike state unfair competition law (UCL) Cal. Bus. & Prof. Code § 17200 claims (The League of California Homeowners v. The Better Business Bureau of The Southland, No. E053423, Calif. App., 4th Dist., Div. 2).
NEW ORLEANS - A lawsuit filed by the State of Mississippi against liquid crystal display (LCD) panel manufacturers and distributors accusing them of engaging in a conspiracy to fix prices for LCD panels qualifies as a "mass action" under the Class Action Fairness Act of 2005, 28 USCS § 1711 and belongs in federal court, the Fifth Circuit U.S. Court of Appeals ruled Nov. 21 (State of Mississippi, ex rel Jim Hood, Attorney General v. AU Optronics Corporation, et al., No. 12-60704, 5th Cir.; 2012 U.S. App. LEXIS 24096).
ATLANTA - A federal judge in Georgia on Nov. 21 dismissed a woman's claims that her mortgage lenders and loan servicer engaged in age discrimination resulting in violations of the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA), after finding that her lawsuit was untimely and that her allegations lacked enough information to invoke the continuing violation doctrine (Christina Federer v. Midland Mortgage Co., et al., No. 12-CV-2492, N.D. Ga.; 2012 U.S. Dist. LEXIS 166188).
ATLANTA - A Georgia federal judge on Nov. 21 granted summary judgment against a borrower and in favor of Bank of the Ozarks, which acquired the borrower's loans from the failed Chestatee State Bank, finding that the borrower breached contracts by defaulting and that Bank of the Ozarks is entitled to collect on the attorneys' fees provided for in the notes (Bank of the Ozarks v. Thomas Carter Lumsden, No. 11-03853, N.D. Ga.; 2012 U.S. Dist. LEXIS 166184).
WASHINGTON, D.C. - A District of Columbia federal judge on Nov. 20 dismissed former Federal National Mortgage Association (Fannie Mae) Senior Vice President Leanne G. Spencer from a class action arising from Fannie Mae's $6.3 billion in accounting mistakes, ruling that investor plaintiffs failed to show that she intentionally misled investors (In re: Fannie Mae Securities Litigation, No. 04-01639, D. D.C.).
CINCINNATI - A Sixth Circuit U.S. Court of Appeals panel on Nov. 20 affirmed the dismissal of a woman's wrongful foreclosure action against her loan servicer and the director of the Michigan State Housing Development Authority (MSHDA) but ordered a federal judge in Michigan to determine the amount in damages the plaintiff sustained as a result of the loan servicer's admitted violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.S. § 2605. (Marilyn Houston v. U.S Bank Home Mortgage Wisconsin Servicing, et al., No. 11-2444, 6th Cir.; 2012 U.S. App. LEXIS 24196).
NEW YORK - A federal judge in New York on Nov. 19 denied Prudential Retirement Insurance and Annuity Co.'s (PRIAC) renewed motion for partial summary judgment dismissing State Street Bank and Trust Co.'s contribution and defamation claims in an action in which PRIAC alleged that State Street breached its fiduciary obligations under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq., by investing in "undisclosed, highly leveraged positions in mortgage-related financial derivatives" (Prudential Retirement Insurance and Annuity Co. v. State Street Bank and Trust Company, et al., No. 07-8488, S.D. N.Y.; 2012 U.S. Dist. LEXIS 165763).
WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy case of Vertis Holdings Inc. on Nov. 20 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to an employee incentive plan that would pay company insiders as much as $4.3 million (In Re: Vertis Holdings Inc., No. 12-12821, Chapter 11, D. Del. Bkcy.). View related prior history, 2011 Bankr. LEXIS 5057.
SACRAMENTO, Calif. - A poultry company that acquired certain assets of the bankrupt Zacky Farms Inc. on Nov. 20 filed an adversary complaint in the U.S. Bankruptcy Court for the Eastern District of California alleging that Zacky Farms breached its contract and engaged in unfair competition (Foster Poultry Farms v. Zacky Farms Inc. [In Re: Zacky Farms Inc.], No. 12-37961, Chapter 11, E.D. Calif. Bkcy.).
NEW YORK - The U.S. attorney for the Southern District of New York, in conjunction with the Federal Bureau of Investigation, on Nov. 21 announced the unsealing of insider trading charges against a former portfolio manager for a division of a group of affiliated hedge funds for his role in an alleged $276 million insider trading scheme (United States of America v. Mathew Martoma, No. 12-2985, S.D. N.Y.).
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RUTLAND, Vt. - A Vermont federal judge on Nov. 19 granted a renewed motion to certify a class and subclasses in an antitrust case filed by dairy farmers over alleged suppression of raw milk prices, nearly a year after denying a class certification motion after finding that the plaintiffs' interest was not representative of all potential class members (Alice H. Allen, et al. v. Dairy Farmers of America, Inc., et al., No. 09-230, D. Vt.; 2012 U.S. Dist. LEXIS 164718).
NEW YORK - A financial backer of bankrupt MSR Resort Golf Course LLC on Nov. 19 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that the bankruptcy judge should reject a $61 million default interest payment (In Re: MSR Resort Golf Course LLC, No. 11-10372, Chapter 11, S.D. N.Y. Bkcy.).
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Nov. 19 affirmed a bankruptcy court's ruling that a state court judgment against a debtor was nondischargeable because it was awarded for fraud the debtor perpetrated on a creditor while the debtor was the president of a company (Christopher Paul Rabalais v. Seth Leon [In the Matter of: Christopher Paul Rabalais], No. 12-20255, Chapter 7, 5th Cir.; 2012 U.S. App. LEXIS 23800).
NEW YORK - The chairman of the restructuring group in the Chapter 11 bankruptcy case of Eastman Kodak Co. on Nov. 19 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that the bankruptcy court should approve additional post-petition funding for Kodak to emerge from bankruptcy quickly (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).
CHICAGO - Plaintiffs in the multidistrict litigation court for lawsuits stemming from JP Morgan Chase Bank's decision to suspend or reduce their home equity line of credit (HELOC) as a result of alleged decreased values on their homes in Illinois federal court moved Nov. 19 to preliminarily approve the terms of a settlement agreement they reached with the bank and certify the class (In re: JP Morgan Chase Home Equity Line of Credit Litigation, MDL 2167, Case No. 10-cv-3647, N.D. Ill.).
WILMINGTON, Del. - A federal judge in Delaware on Nov. 19 adopted a federal magistrate judge's recommendation to dismiss an investors' class action challenging Wells Fargo entities' $7 billion settlement arising from the auction-rate securities (ARS) market's collapse because the investors' claims are preempted by the Securities Litigation Uniform Standards Act (SLUSA), 15 U.S.C.S. § 77p. (Diane E. Wilson, et al., v. Wells Fargo Advisors LLC, et al., No. 11-511, D. Del.). A complimentary copy of the order is available in the pdf attached below.
NEW YORK - A federal judge in New York on Nov. 19 ruled that she will not reinstate a federal securities law claim against a former Goldman Sachs & Co. officer accused of violating the law in connection with misstatements made in the structuring and marketing of a subprime securities-backed synthetic collateralized debt obligation (CDO) because "no U.S.-based transfer of title 'in connection with'" certain note purchases was made to sustain the claim (Securities and Exchange Commission v. Goldman Sachs & Co., et al., No. 10 Civ. 3229, S.D. N.Y.). Subscribers may view the opinion available within the full article.
NEW YORK - The federal judge in New York overseeing 16 lawsuits filed by the Federal Housing Finance Agency (FHFA), as conservator of government-sponsored entities (GSEs) Fannie Mae and Freddie Mac, against a number of financial institutions for their allegedly fraudulent sale of residential mortgage-backed securities (RMBS) to the GSEs on Nov. 19 dismissed state law claims brought against Barclays Bank PLC and others, ruling that the FHFA failed to show that the defendants can be held liable under the Virginia Securities Act (Federal Housing Finance Agency v. Barclays Bank PLC, et al., No. 11-6190, S.D. N.Y.). Subscribers may view the opinion available within the full article.
NEW YORK - Citibank N.A., Citigroup Inc. and several of their affiliates (collectively, Citibank) have reached a $435 million agreement with the liquidation trustee for Lehman Brothers Holdings Inc. (LBHI) subsidiary Lehman Brothers Inc. (LBI) regarding more than $1 billion in collateral posted by LBI before its bankruptcy, according to a document filed Nov. 16 in a New York federal bankruptcy court (Securities Investor Protection Corp. v. Lehman Brothers Inc., No. 08-1420, [In re Lehman Brothers Inc. (Lehman Brothers Inc. v. Citibank, N.A., et al.), No. 11-1681], S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
NEW YORK - A federal judge in New York on Nov. 16 dismissed a consumer's complaint against a debt collector for violations of state and federal debt collection laws, ruling that the consumer had failed to state a claim (Zakari Musah v. Houslanger & Associates PLLC, No. 12-3207, S.D. N.Y.; 2012 U.S. Dist. LEXIS 164292).
NEW YORK - A New York federal judge on Nov. 16 approved the Securities and Exchange Commission's request to dismiss a suit against a GSC Group Inc. executive accused of permitting a hedge fund to choose securities for a collateralized debt obligation that led to JP Morgan Chase & Co.'s (Chase) $154 million settlement with the SEC (Securities and Exchange Commission v. Edward S. Steffelin, No. 11-4204, S.D. N.Y.). Subscribers may view the stipulation of dismissal available within the full article.
DENVER - A 10th Circuit U.S. Court of Appeals panel on Nov. 19 affirmed a summary judgment award to Bank of New York Mellon (BNY Mellon) after finding that it was in possession of a couple's promissory note prior to initiating foreclosure proceedings on their property (Jimmie H. Patrick, et al. v . Bank of New York Mellon, et al., No. 12-1108, 10th Cir.; 2012 U.S. App. LEXIS 12706).
WASHINGTON, D.C. - Acting on interlocutory appeal, the Federal Circuit U.S. Court of Appeals on Nov. 20 found that an antitrust action against a patent owner can proceed, even though plaintiff Ritz Camera & Image LLC faces no threat of an action for patent infringement and has no other basis to seek a declaratory judgment of patent invalidity (Ritz Camera & Image LLC v. SanDisk Corporation, No. 12-1183, Fed. Cir.). View related prior history, 2012 U.S. App. LEXIS 15847.
MUSKOGEE, Okla. - A federal judge in Oklahoma on Nov. 19 found that the Federal Deposit Insurance Corp., as the receiver for a failed bank, is entitled to a more than $4.6 million judgment from borrowers who defaulted because there are no disputes that the FDIC is the holder of the promissory notes in question and that the promissory notes are in default (Federal Deposit Insurance Corp. v. Victor E. Garrett III, et al., No. 12-00052, E.D. Okla.; 2012 U.S. Dist. LEXIS 164810).