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Legal News Report 10-30-15
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Volkswagen Emissions Litigation Turning Unwieldy
Oct 29, 2015 | National Law Journal
By Amanda Bronstad
Chaos is building in courts across the country as about 400 Volkswagen emissions class actions have raced forward—with two federal judges ordering immediate settlement talks—despite a pending decision on whether to move the cases to multidistrict litigation. -
Amazon Faces Lawsuit Over Whether Delivery Workers Are Employees
Oct 27, 2015 | Wall Street Journal
By Greg Bensinger
Amazon.com Inc., which has quickly built a network of on-demand workers for its one-hour delivery service, now faces a lawsuit over how those workers are treated. -
Federal lawsuit filed to stop Meredith-Media General deal
Oct 29, 2015 | Des Moines Register
By Matthew Patane
The proposed acquisition of Meredith Corp. will land company executives and majority shareholders a cushy payday, while leaving minority shareholders in the dust, according to a lawsuit filed in federal district court. -
Credit Suisse books $283 mln in Q3 litigation provisions
Oct 30, 2015 | Reuters
Credit Suisse set aside a net 280 million Swiss francs ($283 million) in litigation provisions in the third quarter, its full quarterly report showed on Friday.
Legal News
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Volkswagen Emissions Litigation Turning Unwieldy
Oct 29, 2015 | National Law Journal
By Amanda Bronstad
Chaos is building in courts across the country as about 400 Volkswagen emissions class actions have raced forward—with two federal judges ordering immediate settlement talks—despite a pending decision on whether to move the cases to multidistrict litigation.
One federal judge in Michigan and another in New Jersey last week appointed mediators to oversee an “expedited settlement” of cases against Volkswagen consolidated in those courts. On Oct. 28, Volkswagen confirmed in a court filing that it agreed to mediate in those courts and, in an unprecedented move, asked the U.S. Judicial Panel on Multidistrict Litigation to speed up its decision about which judge should oversee all the litigation – even skip its scheduled oral arguments on Dec. 3 in New Orleans. Christopher Lebsock, a partner in the San Francisco office of Hausfeld, which wants the cases coordinated in Virginia, made a similar request before the panel on Oct. 26.
Generally, federal judges stay lawsuits that could end up in an MDL until the panel issues its ruling, typically within two weeks of oral arguments. But this time, some judges aren’t waiting.
“We’ve just got a chaotic environment,” said Lebsock, who represents The Center for Auto Safety in a case against Volkswagen. “It seems to us we need to slow this process down just a bit to get coordinated—make sure all the parties that need to be at the table are there—and then move forward with a discussion about how to resolve.”
The vast majority of the cases against Volkswagen are nationwide class actions filed in federal courts by consumers alleging they were duped into paying premium prices for “clean diesel” cars that the U.S. Environmental Protection Agency has said emit as much as 40 times the standard for nitrogen oxides. Volkswagen has admitted that 11 million vehicles, including 482,000 cars in the United States, have a “defeat device” in them designed to cheat emissions tests.
About 100 lawyers have submitted briefs before the MDL panel in support of judges in 15 states and the District of Columbia.
But Volkswagen has asked the MDL panel to act faster. The rush of litigation is “a significant burden on the defendant,” Jeffrey Chase, a member of New York’s Herzfeld & Rubin, lead counsel for Volkswagen Group of America Inc., wrote in its brief before the panel.
“There has been an extraordinary flurry of pre-MDL litigation activity in various courts nationwide, which contravenes the interests of judicial economy,” Chase wrote.
On Oct. 22, Gerald Rosen, chief judge of the Eastern District of Michigan, appointed former U.S. District Judge Layn Phillips and U.S. Bankruptcy Judge Steven Rhodes to oversee settlement talks involving more than 20 cases consolidated in his courtroom. In New Jersey, where about 60 class actions have been consolidated, U.S. District Judge Jose Linares (left) on Oct. 23 appointed Phillips and retired U.S. District Judge Faith Hochberg to mediate settlement talks.
Both judges are weighing orders for Volkswagen to preserve evidence that could be used in litigation. Plaintiffs attorneys fear that Volkswagen might destroy evidence because it doesn’t have the same legal requirements under German law to preserve documents and has forced them to go through The Hague Convention’s service of process, which could take months. Volkswagen’s response in Michigan is due Oct. 30 and faces a Nov. 12 hearing in New Jersey.
Lynn Sarko, a partner at Seattle’s Keller Rohrback, co-interim coordinating class counsel in the Michigan cases, defended the settlement discussions in an Oct. 27 brief before the MDL panel. He said the talks were an “appropriate first and necessary step toward managing this sprawling and unique litigation.”
James Cecchi, a partner at Carella, Byrne, Cecchi, Olstein, Brody & Agnello in Roseland, New Jersey, interim co-liaison counsel in the New Jersey cases, echoed those views in an Oct. 29 brief. “Put simply, exploring a swift resolution to get relief to those damaged by the defendants’ conduct seems logical,” he wrote.
Lebsock, representing the Center for Auto Safety, said a settlement is unlikely given that Volkswagen hasn’t yet proposed a way to fix the cars and federal regulators would need to be involved in any talks. “I was just on the phone with lawyers at the Department of Justice, and they are not part of the discussions at the point,” Lebsock said.
But the litigation’s mach speed has been driven by Volkswagen customers who are worried they won’t be able to renew registrations on their cars, which now aren’t compliant with emissions standards at many state departments of motor vehicles across the country. There also is “jockeying going on by the lawyers” for leadership roles in one of the largest mass torts in the country and a desire by Volkswagen to “put this behind them as soon as possible,” Lebsock said.
Judges aren’t immune to what’s going on. “Judges recognize the seriousness of the situation, and want to see if there is an expedited resolution,” he said.
http://www.nationallawjournal.com/home/id=1202741126048/Volkswagen-Emissions-Litigation-Turning-Unwieldy?mcode=1202615432992&curindex=1&slreturn=20150930132530
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Amazon Faces Lawsuit Over Whether Delivery Workers Are Employees
Oct 27, 2015 | Wall Street Journal
By Greg Bensinger
Amazon.com Inc., which has quickly built a network of on-demand workers for its one-hour delivery service, now faces a lawsuit over how those workers are treated.
The suit, filed Tuesday in Los Angeles County, Calif., Superior Court on behalf of four couriers, seeks back wages and compensation for expenses like fuel and workers’ compensation insurance. The workers are contracted through Scoobeez, a unit of closely held ABT Holdings Inc.
The action potentially thrusts Amazon into the center of a debate roiling Silicon Valley over whether on-demand workers should be treated as employees or independent contractors. Companies such as Uber Technologies Inc. and Postmates Inc. have faced similar suits over their workforce.RELATED
Amazon Taps ‘On-Demand’ Workers for One-Hour Deliveries (Sept. 29)Postmates Raises $80 Million in Push Toward $1 Deliveries (June 25)Uber, Lyft Cases Focus on Drivers’ Legal Status (March 15)Court Says FedEx Drivers Were Employees, Not Contractors (Oct. 3, 2014)
Those companies consider their workers contractors, thereby avoiding some expenses. The companies say the majority of their workers prefer to be contractors, allowing them to maintain a more flexible schedule than they could as employees.
Amazon’s Prime Now service, available in more than a dozen U.S. metropolitan areas, promises delivery of thousands of goods within one hour for $7.99 or two hours or more free. The Seattle retailer recently introduced the service in San Francisco and San Antonio.Advertisement
Amazon recently began a separate delivery program that relies on couriers not under contract with third-party companies. The Flex service allows regular people to sign up for shifts using their smartphones and make package delivery for Amazon in Seattle.
An Amazon spokesman declined to comment on the lawsuit.
In the suit, the couriers allege Amazon pays less than minimum wage and treats them like employees, including requiring they wear uniforms and work at set times.
“Not infrequently, they are scheduled to work six or seven consecutive days in a week,” the suit alleges.
Amazon doesn’t forward tips to drivers that customers pay with credit cards, the suit alleges. And the retailer mandates which jobs workers accept and the routes they take to get to their delivery locations, according to the suit.
Some startups like mail-delivery company Shyp Inc. have reclassified their contractors as employees, though such a move can drive up labor costs an estimated 20% to 40%.
The drivers are represented by Beth A. Ross of Leonard Carder LLP, which represented contractor drivers for FedEx Corp. in a suit that led to a settlement of nearly $230 million earlier this year.
http://www.wsj.com/articles/amazon-faces-lawsuit-over-whether-delivery-workers-are-employees-1445989623
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Federal lawsuit filed to stop Meredith-Media General deal
Oct 29, 2015 | Des Moines Register
By Matthew Patane
The proposed acquisition of Meredith Corp. will land company executives and majority shareholders a cushy payday, while leaving minority shareholders in the dust, according to a lawsuit filed in federal district court.
The lawsuit claims executives, board members and majority shareholders of the Des Moines-based publisher conspired and had conflicts of interest when orchestrating Meredith's acquisition.
Meredith's acquisition "was approved by a majority-interested board who stood to profit from windfall financial benefits … as well as lucrative post-deal employment positions," the lawsuit reads.
In September, Virginia-based Media General announced its plans to acquire Meredith for $2.4 billion in cash and stock.
The deal would combine Media General's 71 local TV stations with Meredith's 17 TV stations and portfolio of women-focused magazines, including Better Homes & Gardens.
Once the deal is closed, current Meredith CEO Steve Lacy would become CEO of the new business. Meredith's chief financial officer would hold the same role in the new company. Meredith will also be able to appoint four of the new company's 12 board of directors members.
Meredith initially offered no comment. But in an email Friday morning, Meredith spokesman Art Slusark said there will be multiple shareholder votes on the deal with Media General.
Those votes include one for Meredith's common shareholders, known as Class A shareholders, and for its Class B shareholders, which are primarily Meredith family members. A combined vote will also take place.
He said that will give shareholders a "full chance" to vote on the deal.
Slusark also said Meredith considers the lawsuit frivolous and suits such as this one are common during merger and acquisition deals. He also said the new company plans to maintain corporate and executive offices in Des Moines after the deal is complete.
Competing bid could scuttle Meredith buyout
The lawsuit was filed Oct. 21 in the U.S. District Court for the Southern District of Iowa on behalf of Mary Mundy, a Meredith shareholder in Mount Carmel, Ill.
The Meredith-Media General deal calls for Meredith shareholders to receive $51.53 per share once the acquisition closes. The lawsuit, however, claims that significantly undervalues Meredith shares, arguing that Meredith stocks reached an intraday high of $57.22 on March 20.
"If this is an investment that you hold in your portfolio you’ve got to kind of scratch your head," said Kim Baer, one of the attorneys representing Mundy.
During the last 12 months, Meredith stock has traded between $39.40 and $57.22 on the New York Stock Exchange.
Meredith shares closed at $45.51 Thursday.
Mundy and her attorneys are seeking class-action status for the lawsuit. Baer said the lawsuit is seeking to stop the Meredith-Media General deal, or, if it goes through, seek damages for the company's shareholders.
Meredith and Media General expect their deal to close in June 2016.
The lawsuit also claims Meredith set up the acquisition with provisions that would make other bidders for Meredith shy away.
For instance, the Meredith-Media General deal includes a $60 million termination fee, should either company end the deal. The lawsuit also mentions that Meredith family members who hold 63 percent of the company's Class B shares have already signed on in support of the acquisition.
"These provisions substantially and improperly limit the Board's ability to investigate and pursue superior proposals and alternatives and virtually guarantee" the deal will go through, the lawsuit reads.
Baer filed the lawsuit in conjunction with Levi & Korsinsky, a New York-based law firm that focuses on securities litigation and cases involving shareholder value.
Levi & Korsinsky issued a news release saying they would investigate the acquisition, one day after Meredith and Media General announced the deal.
http://www.desmoinesregister.com/story/money/business/2015/10/29/lawsuit-meredith-deal-cushy-payday-excutives/74792992/
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Credit Suisse books $283 mln in Q3 litigation provisions
Oct 30, 2015 | Reuters
Credit Suisse set aside a net 280 million Swiss francs ($283 million) in litigation provisions in the third quarter, its full quarterly report showed on Friday.
The Swiss bank, which had 1 billion francs in legal costs provisions at the end of last year, had added 61 million in the first quarter and 124 million in the second.
It said it had received inquiries from authorities probing suspected corruption at world soccer body FIFA regarding its banking relationships with certain individuals and entities associated with FIFA and that it was cooperating.
FIFA has been embroiled in a widening corruption scandal since 14 soccer officials and sports marketing executives were indicted by the United States in May. Swiss authorities have since opened their own investigation.
"The U.S. and Swiss authorities are investigating whether multiple financial institutions, including Credit Suisse, permitted the processing of suspicious or otherwise improper transactions, or failed to observe anti-money laundering laws and regulations, with respect to the accounts of certain persons and entities associated with FIFA," the bank said.
http://www.reuters.com/article/2015/10/30/creditsuisse-costs-idUSL8N12U0NZ20151030
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