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Supreme Court lets HP lawsuit move forward
Breaking Legal News | 2007/10/09 15:14
The U.S. Supreme Court has denied an appeal by Hewlett-Packard Co. to dismiss a class-action lawsuit against Compaq Computer Corp., which HP acquired in 2002. The lawsuit, filed in 2003 by Oklahoma residents Stephen and Beverly Grider, alleges that Compaq sold them a computer with a defective floppy disk drive. The company did not replace the faulty drive, the Griders alleged.

The U.S. Supreme Court on Tuesday refused to intervene in the Oklahoma lawsuit on behalf of HP. The case now goes back to an Oklahoma state court.

In 2005, the District Court of Cleveland County, Oklahoma, allowed the Grider lawsuit to become a nationwide class-action lawsuit. HP had appealed that decision.

Since 2000, several U.S. residents have filed similar lawsuits against Compaq and HP. The lawsuits alleged that Compaq sold computers with faulty floppy disk controllers, causing data loss or corruption.

The Texas Supreme Court in 2005 refused to allow a nationwide class-action lawsuit in a case that had been filed in the state in 2000. HP had argued that the facts in the Oklahoma case were similar.

An HP spokesman wasn't immediately available for comment Tuesday.



Supreme Court Dismisses Lawsuit Against CIA
Breaking Legal News | 2007/10/09 15:12

The U.S. Supreme Court has refused to review a lawsuit brought by a German man who says he was kidnapped and tortured by agents of the Central Intelligence Agency. VOA National Correspondent Jim Malone has details from Washington. The high court rejected the appeal of Khaled el-Masri without explanation. El-Masri is a German citizen of Lebanese descent who says he was kidnapped by CIA agents in Macedonia in 2003 and then taken to Afghanistan where he was held for months and tortured by his captors.

El-Masri was released in 2004 after he says U.S. officials realized he was not involved with terrorism.

The Bush administration argued that el-Masri's appeal should be rejected because allowing his lawsuit against the CIA suit to go forward in court would expose state secrets. Lower federal courts sided with the government and the Supreme Court effectively ended the case when it refused to consider it further.

El-Masri's case sparked outrage in Germany and mobilized civil and human rights groups on his behalf.

Sharon Bradford Franklin is an attorney with the Constitution Project, an organization that seeks to protect civil liberties during the war on terror.

"Well, we are very disappointed that the court decided not to take the case," said Franklin. "We really felt that this was an excellent opportunity for the court to revisit the scope of the state secrets privilege."

The Supreme Court formally recognized the government's right to protect state secrets in a 1953 ruling that allowed the U.S. military to keep secret the details of a plane crash.

The el-Masri case also drew attention to the CIA program of what is called extraordinary rendition in which terror suspects are sent from one country to another for questioning.

Human-rights groups have criticized the program and raised questions about the torture of terror suspects. They had hoped the el-Masri case would shed new light on the practice.

"The Bush administration has used what is known as the state secrets doctrine liberally to seek dismissals of cases that raise embarrassing issues for the government and perhaps would expose illegal activity," said Jennifer Daskal with Human Rights Watch.

The Supreme Court decision was welcomed at the White House. This is presidential spokeswoman Dana Perino.

"This is a country that is facing unprecedented threats that we have not dealt with before in terms of al-Qaida and other terrorists, and I believe that the Justice Department is judicious in applying the state secrets act," said Perino.

President Bush has repeatedly defended the administration's policies in the war on terror and just last week again rejected allegations that terror suspects are subject to torture.

"This government does not torture people," he said. "We stick to U.S. law and our international obligations."

Germany tried to extradite 13 suspected CIA agents to stand trial in the el-Masri case earlier this year but was rebuffed by the United States.



Sallie Mae $25 billion buyout ends up in court
Breaking Legal News | 2007/10/09 15:10

The planned $25 billion buyout of U.S. student lender Sallie Mae has ended up where many said it would -- in court. Sallie Mae said late on Monday that it filed a lawsuit seeking a breakup fee of $900 million from the consortium led by J.C. Flowers & Co, which last week proposed to cut its bid price for the lender citing a recent credit market squeeze and legislation that slashes subsidies to student lenders.

Sallie Mae's lawsuit seeks a declaration that the buyer group has reneged on the merger agreement, that no "material adverse change" has occurred, and that Sallie Mae may terminate the takeover and collect the $900 million.

A material adverse change is a condition that could cause a substantial reduction in earnings power and it can give buyers or lenders a "walk right" from their obligations.

The lawsuit is being seen by many as a hard-ball attempt by Sallie Mae to force the buyer group to stick to the original deal, in which the group offered $60 a share, or come up with something closer to it than its revised proposal of $50 a share, or $20.6 billion offer, plus extra payments depending on how the company performed.

"We are prepared to close under the contract the parties signed in April," said Sallie Mae chairman Albert Lord in a statement late on Monday. "Sallie Mae has honored its obligations under the merger agreement. We ask only that the buyer group do the same."

The original buyout agreement has a $900 million breakup fee. But if the buyers could prove the student lender has suffered a material adverse change, they would not have to pay it.

J.C. Flowers & Co said on Tuesday their revised buyout offer has expired and that the future of deal would be resolved in court.

"We regret that our offer to amend the terms of the Sallie Mae transaction was allowed to expire without discussion," J.C. Flowers said in a statement. "Instead, Sallie Mae filed what we firmly believe is a meritless lawsuit. We now look forward to having this matter resolved in the Delaware Chancery Court."

J.C. Flowers repeated its stance that a material adverse change has occurred and that Sallie Mae has misinterpreted the merger contract.

Joel Greenberg, co-chair of law firm Kaye Scholer LLP's corporate and finance department, said it would be difficult for J.C. Flowers to argue there has been a material adverse change, because the contract specifically addressed the question of new legislation.

"Is it so substantially worse than the company predicted that it is a material adverse change? It's a very hard argument," Greenberg added.



Law Firm Agrees to Pay $27.5M to Settle Age-Bias Suit
Breaking Legal News | 2007/10/09 05:16

The international law firm of Sidley Austin LLP has agreed to pay $27.5 million to 32 former partners who the U.S. Equal Employment Opportunity Commission (EEOC) alleged were forced out of the partnership because of their age, under settlement approved by a federal judge.

The EEOC brought the suit in 2005 under the federal Age Discrimination in Employment Act (ADEA). A major issue in the case was whether partners in the law firm were protected as employees under the ADEA. The settlement provides that "Sidley agrees that each person for whom EEOC has sought relief in this matter was an employee with the meaning of the ADEA."

The settlement also includes an injunction that bars the law firm from "terminating, expelling, retiring, reducing the compensation of or otherwise adversely changing the partnership status of a partner because of age" or "maintaining any formal or informal policy or practice requiring retirement as a partner or requiring permission to continue as a partner once the partner has reached a certain age."

"This case has been closely followed by the legal community as well as by professional services providers generally," says Ronald S. Cooper, general gounsel of the EEOC. "It shows that EEOC will not shrink from pursuing meritorious claims of employment discrimination wherever they are found. Neither the relative status of the protected group members nor the resources and sophistication of the employer were dispositive here."

The $27.5 million will be paid to 32 former partners of the firm for whom the EEOC sought relief because they either were expelled from the partnership in connection with an October 1999 reorganization or retired under the firm's retirement policy.

The average of all the payments to partners under the settlement will be $859,375. The highest payment to any former partner will be $1,835,510, and the lowest payment $122,169. The median payment (the value in the middle of all payments) is $875,572.



Ex-Google Manager Can Sue for Age Bias
Breaking Legal News | 2007/10/08 08:23
A 54-year-old former Google Inc. manager who claimed he was fired after a supervisor told him his opinions were "too old to matter" had his age discrimination lawsuit reinstated. Reversing a Santa Clara County trial judge, the state's Sixth District Court of Appeal ruled Thursday that Brian Reid deserves to have a jury hear the evidence he amassed that he says shows Google routinely gave older managers lower evaluations and smaller bonuses than younger managers.

"Reid produced sufficient evidence that Google's (stated) reasons for terminating him were untrue or pretextual, and that Google acted with discriminatory motive such that a fact-finder would conclude Google engaged in age discrimination," Presiding Justice Conrad L. Rushing wrote.

The Mountain View-based search engine company has denied Reid's allegations but also refused to say why he was fired. In court documents, the company said Reid was fired when the program he managed was canceled.

Reid, a former associate electrical engineering professor at Stanford University, sued Google in July 2004, five months after he lost his job as its director of operations.

He alleged in his suit that his supervisors did not initially tell him why he was being fired. Director of Engineering Wayne Rosing, 55, eventually said he was not a good "cultural fit" at Google, where some colleagues referred to him as an "old guy" and "fuddy-duddy," Reid said.

Another supervisor, Urs Hoelzle allegedly said Reid, who is a diabetic, was too sluggish and "too old to matter" and his ideas were obsolete.

Reid is seeking back pay and punitive damages. He made $200,000 a year and lost stock options valued at millions of dollars when he lost his job.



Court considers fraud lawsuit that will affect Enron
Breaking Legal News | 2007/10/07 10:58
The hopes of Enron investors are riding on a Supreme Court case that may be the last chance at compensation for their losses when the scandal-ridden energy company collapsed. Much of corporate America has jumped into the court fight, arguing that shareholders in companies that commit securities fraud should not be allowed to sue banks, accountants, law firms and suppliers that allegedly participated in the fraud.

Allowing investors to file class-action lawsuits in such cases would "threaten the safety and soundness of individual financial institutions and the nation's banking system," a coalition of business groups, including the American Bankers Association, said in court papers.

Firms and corporations that enabled companies such as Enron to defraud stockholders should now have to pay, lawyers for the investors say.

"The banks orchestrated the fraud; they weren't sideline viewers," said Patrick Coughlin, the lead lawyer for Enron shareholders. "So when the question comes up about who should be on the hook for Enron, it's the banks."

Meir Feder, a New York lawyer who defends companies in securities cases, said "everybody understands that the Enron shareholders are victims here, but there's a reason that Congress and the Supreme Court haven't allowed people to sue third parties."

He added, "In the real world, for every third party who actually had a role in a fraud, you're going to get lots of suits against other third parties who really didn't."

When the Supreme Court hears arguments on the issue Tuesday, Enron investors will be on the sidelines. The court is dealing with a suit by Stoneridge Investment Partners against Motorola Inc. and Scientific-Atlanta Inc., which Cisco Systems Inc. now owns.

Only eight of the nine justices will participate. Justice Stephen Breyer has withdrawn from the case; he gave no reason, but financial disclosure documents state he owned Cisco stock.

Chief Justice John Roberts, who did not participate in the court's decision to take the suit, has come back into it.

The Stoneridge case has strong parallels to the one pursued by Enron shareholders, which the high court has left alone. The Enron suit was up for consideration June 21 at one of the justices' regularly scheduled private conferences, but the court has neither accepted nor rejected it.

"It's easier to decide a legal issue in a noncharged atmosphere, which may have been what the justices had in mind by not taking on Enron," Coughlin said.

Stoneridge accused Motorola and Scientific-Atlanta of engaging in sham transactions with a cable television company, Charter Communications Inc. The alleged motive was to inflate Charter's revenue by $17 million, help meet Wall Street expectations and avoid a drop in the company's stock price.

Because of a number of deals including the ones involving Motorola and Scientific-Atlanta, Charter eventually restated its financial statements, reducing revenue by $292 million from 2000-2002. In addition, four former Charter executives pleaded guilty in the matter after the Justice Department investigated the deals.

Stoneridge's efforts to recoup investment losses from Motorola and Scientific-Atlanta were turned back by lower courts, which said that the allegations were nothing more than claims that the two companies aided and abetted the fraud by Charter. Neither Motorola nor Scientific-Atlanta was alleged to have engaged in any deceptive act, the courts said.

Enron investors got a similar ruling from the 5th U.S. Circuit Court of Appeals, which found that Enron had a duty to disclose financial problems to shareholders, but the company's banks did not.

In both cases, the issue comes down to the meaning of the word "deceptive" in federal securities law.

At stake in the Enron case is more than $30 billion sought by hundreds of thousands of investors from banks that allegedly helped the company, once the nation's seventh-largest, hide billions in debt and make failing ventures appear profitable.

The Enron case and the Stoneridge investors' suit are the latest chapter in the struggle between plaintiffs attorneys and the business world over class-action suits.

When lawyers who file such suits persuade a court to certify a large class of plaintiffs, companies almost always settle rather than risk going to trial. A 2002 study for the conservative Federalist Society found that three of every four federal securities fraud cases were settled, with the remainder thrown out of court.

Since 2000, investors filing federal class-action suits alleging securities fraud have settled for $42 billion, according to the Stanford Law School Securities Class Action Clearinghouse.

So far, some banks have settled with Enron investors: Citibank for $2 billion; J.P. Morgan Chase for $2.2 billion; Canadian Imperial Bank of Commerce for $2.4 billion.

Others are still fighting: Merrill Lynch & Co. Inc.; Credit Suisse First Boston; Barclays Bank PLC; Pershing LLC, now a subsidiary of Bank of New York Mellon Corp. For investors, recent developments have gone against them.

The Securities and Exchange Commission voted to intervene in the Stoneridge case on the side of investors. But the Justice Department solicitor general, after pitches from President Bush and Treasury Secretary Henry Paulson, rejected the SEC's recommendation and filed a brief on the side of Motorola and Scientific-Atlanta.



NFL, Travis Henry in court battle over drug test
Breaking Legal News | 2007/10/05 06:51

Broncos running back Travis Henry, who has a four-game substance-abuse suspension on his record from 2005, is battling the NFL in court over a new drug test, one that could lead to a one-year ban. ESPN's Len Pasquarelli says Henry is trying to block the league from testing his "B" sample, claiming that the league isn't allowing Henry's expert to be present for the test. League VP of public relations Greg Aiello confirms to Pasquarelli that the league is in court over the matter but declines -- as required -- to go into detail.

Pasquarelli on the circumstances that could lead to a one-year penalty: "Under the two-year policy, which essentially wipes a player's slate clean, Henry was scheduled to rotate out of the substance abuse program on Oct. 1. But his lawsuit to block further testing of his urine sample was filed Sept. 20, indicating that the positive test occurred before Oct. 1."




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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet.
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