LexisNexis® Legal Newsroom
Mealey's Insurance - 6th Circuit: Debtor's ERISA Claim For Long-Term Disability Benefits Valid

CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on Feb. 3 remanded a case to a district court with instructions that it should enter judgment in favor of a debtor who sued his former employer alleging violations of the Employee Retirement Income Security Act of 1974 when it denied him long-term disability benefits. The panel also ruled that the debtor's lawsuit was not barred by judicial estoppel despite the fact that he failed to list it in his bankruptcy schedules when he filed his petition (Nilratan Javery v. Lucent Technologies Inc., No. 12-3834, Chapter 13, 6th Cir.; 2014 U.S. App. LEXIS 1992).

Mealey's Banking & Finance - Ponzi Schemer Ordered To Pay $121 Million In Disgorgement Penalties

DETROIT - A federal judge in Michigan on Jan. 31 granted the Securities and Exchange Commission's request for monetary relief of more than $121 million in a Ponzi scheme lawsuit, ruling that the SEC's request was proper and adequate (United States Securities and Exchange Commission v. Joseph Paul Zada, et al., No. 10-14498, E.D. Mich.; 2014 U.S. Dist. LEXIS 12067).

Mealey's Securities/D&O Liability - 2nd Circuit Panel Affirms Dismissal Of Securities Class Action Lawsuit

NEW YORK - A federal district court did not err in dismissing a shareholder class action lawsuit against an oil company and others, a Second Circuit U.S. Court of Appeals panel ruled Feb. 3, agreeing substantially with the district court's findings (Samuel Sinay, etc. v. CNOOC Ltd., et al., No. 13-2240, 2nd Cir.; 2014 U.S. App. LEXIS 2010).

Mealey's Securities/D&O Liability - Former Shareholder Says He Still Has Standing To Sue Directors And Officers

WILMINGTON, Del. - A plaintiff in a shareholder derivative lawsuit, who stopped being a shareholder in a company after the company went private, told a federal court in Delaware on Feb. 3 that he still has standing to bring a suit against certain of a company's directors and officers (Philip Halpert, derivatively on behalf of AsiaInfo-Linkage, Inc. v. Steve Zhang, et al., No. 12-cv-1339, D. Del.).

Mealey's Bankruptcy - 6th Circuit: Debtor's ERISA Claim For Long-Term Disability Benefits Valid

CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on Feb. 3 remanded a case to a district court with instructions that it should enter judgment in favor of a debtor who sued his former employer alleging violations of the Employee Retirement Income Security Act of 1974 when it denied him long-term disability benefits. The panel also ruled that the debtor's lawsuit was not barred by judicial estoppel despite the fact that he failed to list it in his bankruptcy schedules when he filed his petition (Nilratan Javery v. Lucent Technologies Inc., No. 12-3834, Chapter 13, 6th Cir.; 2014 U.S. App. LEXIS 1992).

Mealey's Securities/D&O Liability - Ponzi Schemer Ordered To Pay $121 Million In Disgorgement Penalties

DETROIT - A federal judge in Michigan on Jan. 31 granted the Securities and Exchange Commission's request for monetary relief of more than $121 million in a Ponzi scheme lawsuit, ruling that the SEC's request was proper and adequate (United States Securities and Exchange Commission v. Joseph Paul Zada, et al., No. 10-14498, E.D. Mich.; 2014 U.S. Dist. LEXIS 12067).

Mealey's Insurance - State's Discretionary Clause Ban Applies To Policies That Predate It, Judge Rules

SEATTLE - The State of Washington's discretionary clause ban applies to any final denial of benefits that occurs after the ban's effective date, even if the plan under which the denial was issued took effect before the ban's effective date, a federal judge in Washington ruled Jan. 29 in ruling that de novo review applied to a denial of disability benefits under a plan governed by the Employee Retirement Income Security Act (Korri Marie Treves, et al. v. Union Security Insurance Company, LLC, et al., No. 12-1337, W.D. Wash.; 2014 U.S. Dist. LEXIS 11905).

Mealey's Labor & Employment - ERISA Doesn't Preempt State Claim For Unjust Enrichment, Federal Judge Rules

ROCKFORD, Ill. - The Employee Retirement Income Security Act does not preempt an employer's counterclaim for unjust enrichment under Illinois state law against former employees who did not reimburse the employer for health insurance premium payments the employer made during the former employees' extended medical leave, a federal judge in Illinois ruled Jan. 30 (Daniel A. Madero v. Peters Engineering, Inc., et al., No. 12 C 50157, N.D. Ill.; 2014 U.S. Dist. LEXIS 11403).

Mealey's Labor & Employment - State's Discretionary Clause Ban Applies To Policies That Predate It, Judge Rules

SEATTLE - The State of Washington's discretionary clause ban applies to any final denial of benefits that occurs after the ban's effective date, even if the plan under which the denial was issued took effect before the ban's effective date, a federal judge in Washington ruled Jan. 29 in ruling that de novo review applied to a denial of disability benefits under a plan governed by the Employee Retirement Income Security Act (Korri Marie Treves, et al. v. Union Security Insurance Company, LLC, et al., No. 12-1337, W.D. Wash.; 2014 U.S. Dist. LEXIS 11905).

Mealey's Banking & Finance - 2nd Circuit: Goldman Sachs Not A Statutory Insider Under Federal Securities Law

NEW YORK - A federal district court did not err in dismissing a shareholder derivative lawsuit because the shareholder failed to show that The Goldman Sachs Group Inc. was a "statutory insider" at the time of the sale and purchase of certain short call options, a Second Circuit U.S. Court of Appeals panel ruled Jan. 29 (Andrew E. Roth, derivatively on behalf of Leap Wireless International Inc., v. The Goldman Sachs Group Inc., et al., No. 12-2509, 2nd Cir.).

Mealey's Securities/D&O Liability - Judge Approves $20 Million Settlement Of Shareholder Derivative Suit

CHICAGO - A federal judge in Illinois on Jan. 28 gave final approval to a $20 million settlement of a shareholder derivative lawsuit in which the shareholder had accused an education company's directors and officers of breaching their fiduciary duties (Amy Cook v. Gary E. McCullough, et al., No. 11-cv-09119, N.D. Ill.).

Mealey's Securities/D&O Liability - Another Shareholder Derivative Suit Brought Against Target Directors, Officers

MINNEAPOLIS - A shareholder of Target Corp. sued certain directors and officers of Target on Jan. 28, alleging that they are responsible for a large security data breach of consumers' personal credit information (Mary Davis, Derivatively on Behalf of Target Corporation v. Gregg W. Steinhafel, et al., No. 14-cv-00261, D. Minn.).

Mealey's Securities/D&O Liability - 2nd Circuit: Goldman Sachs Not A Statutory Insider Under Federal Securities Law

NEW YORK - A federal district court did not err in dismissing a shareholder derivative lawsuit because the shareholder failed to show that The Goldman Sachs Group Inc. was a "statutory insider" at the time of the sale and purchase of certain short call options, a Second Circuit U.S. Court of Appeals panel ruled Jan. 29 (Andrew E. Roth, derivatively on behalf of Leap Wireless International Inc., v. The Goldman Sachs Group Inc., et al., No. 12-2509, 2nd Cir.).

Mealey's Banking & Finance - 2nd Circuit Panel Affirms Dismissal Of AIG Bailout Lawsuit

NEW YORK - A federal judge in New York did not err in dismissing a shareholder's securities lawsuit against the Federal Reserve Bank of New York (FRBNY) because its acquisition of American International Group (AIG) during the financial crisis did not violate Delaware fiduciary duty law, a Second Circuit U.S. Court of Appeals panel ruled Jan. 29 (Starr International Co. Inc., individually and derivatively on behalf of American International Group Inc. v. Federal Reserve Bank of New York, et al., No. 12-5022, 2nd Cir.).

Mealey's Securities/D&O Liability - 2nd Circuit Panel Affirms Dismissal Of AIG Bailout Lawsuit

NEW YORK - A federal judge in New York did not err in dismissing a shareholder's securities lawsuit against the Federal Reserve Bank of New York (FRBNY) because its acquisition of American International Group (AIG) during the financial crisis did not violate Delaware fiduciary duty law, a Second Circuit U.S. Court of Appeals panel ruled Jan. 29 (Starr International Co. Inc., individually and derivatively on behalf of American International Group Inc. v. Federal Reserve Bank of New York, et al., No. 12-5022, 2nd Cir.).

Mealey's Securities/D&O Liability - Dismissal Partially Overturned In Market Manipulation, Insider Trading Suit

NEW YORK - A Second Circuit U.S. Court of Appeals panel on Jan. 27 partially overturned a federal district court's dismissal of a securities lawsuit accusing a company's officers and directors of engaging in a market manipulation and insider trading scheme, ruling that the district court erred in dismissing the insider trading claims (Gloria Steginsky v. Xcelera Inc., et al., Nos. 13-1327 and 13-1892, 2nd Cir.; 2014 U.S. Dist. LEXIS 1523).

Mealey's Litigation Procedure - 7th Circuit Upholds Dismissal Of ERISA Claims Following Union Change

CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Jan. 24 affirmed the dismissal of an Employee Retirement Income Security Act class complaint filed against a railroad and a union following a change in representation and wage and benefits package (Teamsters Local Union No. 705, et al. v. Burlington Northern Santa Fe, LLC, et al., No. 11-3705, 7th Cir.; 2014 U.S. App. LEXIS 1476).

Mealey's Labor & Employment - N.Y. Federal Judge Declines To Remand Reimbursement Suit; ERISA Preempts Claims

BROOKLYN, N.Y. - A New York federal judge on Jan. 27 declined to remand a health care reimbursement suit to state court, saying that the Employee Retirement Income Security Act preempted claims against one of the defendants (Enigma Management Corp. v. Multiplan Inc., et al., No. 13-5524, E.D. N.Y.; 2014 U.S. Dist. LEXIS 9738).

Mealey's Insurance - N.Y. Federal Judge Declines To Remand Reimbursement Suit; ERISA Preempts Claims

BROOKLYN, N.Y. - A New York federal judge on Jan. 27 declined to remand a health care reimbursement suit to state court, saying that the Employee Retirement Income Security Act preempted claims against one of the defendants (Enigma Management Corp. v. Multiplan Inc., et al., No. 13-5524, E.D. N.Y.; 2014 U.S. Dist. LEXIS 9738).

Mealey's Securities/D&O Liability - Judge: Alleged Shareholder Has No Standing To Bring Derivative Lawsuit

SAN FRANCISCO - A federal judge in California said on Jan. 28 that a plaintiff was not a shareholder in a company and therefore could not bring a shareholder derivative lawsuit on the company's behalf (Christopher D. White v. Richard E. Demaray, et al., No. 13-cv-05169, N.D. Calif.).

Mealey's Health Law - N.Y. Federal Judge Declines To Remand Reimbursement Suit; ERISA Preempts Claims

BROOKLYN, N.Y. - A New York federal judge on Jan. 27 declined to remand a health care reimbursement suit to state court, saying that the Employee Retirement Income Security Act preempted claims against one of the defendants (Enigma Management Corp. v. Multiplan Inc., et al., No. 13-5524, E.D. N.Y.; 2014 U.S. Dist. LEXIS 9738).

Mealey's Labor & Employment - 7th Circuit Upholds Dismissal Of ERISA Claims Following Union Change

CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Jan. 24 affirmed the dismissal of an Employee Retirement Income Security Act class complaint filed against a railroad and a union following a change in representation and wage and benefits package (Teamsters Local Union No. 705, et al. v. Burlington Northern Santa Fe, LLC, et al., No. 11-3705, 7th Cir.; 2014 U.S. App. LEXIS 1476).

Mealey's Securities/D&O Liability - Shareholder Accuses Directors And Officers Of Abuse Of Control And Other Claims

SANTA ANA, Calif. - A shareholder told a federal court in California on Jan. 24 that certain of a company's directors and officers breached their fiduciary duties in many ways by making factually baseless revenue and earnings growth projections to the public (Timothy J. Foss v. Craig A. Barbarosh, et. al., No. 14-cv-00110, C.D. Calif.).

Mealey's Banking & Finance - Insurer Has No Duty To Defend, Indemnify Accounting Firm, Federal Judge Rules

BOSTON - Professional liability coverage for underlying claims against an accounting firm insured and one of its principals is barred by the policy's "securities practice" exclusion, a Massachusetts federal judge ruled Jan. 23, granting the insurer's motion for summary judgment (Robert S. Salomon, et al. v. Philadelphia Insurance Companies, No. 13-10378-DPW, D. Mass.; 2014 U.S. Dist. LEXIS 8334).

Mealey's Securities/D&O Liability - Casino Company Sued For Alleged Violations Of Foreign Corrupt Practices Act

LAS VEGAS - A shareholder sued certain of Las Vegas Sands Corp.'s directors and officers in a federal court in Nevada on Jan. 23, claiming that they caused the company to violate the Foreign Corrupt Practices Act and other laws (W.A. Sokolowski v. Sheldon G. Adelson, et al, No. 14-cv-00111, D. Nev.).