DuPont settles with EPA

Here’s the latest in the ongoing DuPont saga from CNews:

Federal regulators have reached an agreement with DuPont to settle allegations that the company hid information about the dangers of a toxic chemical known as C8 used in the making of Teflon.

Lawyers for DuPont and the U.S. Environmental Protection Agency told an administrative law judge on Nov. 23 that they had reached a final agreement, but needed more time to put together the paperwork.

Judge Barbara Gunning then gave the parties until Jan. 13 to file the formal agreement.

“The request for additional time is to accommodate EPA’s procedural rules which require the Environmental Appeals Board to review and approve any settlement reached by the parties,” the EPA said Tuesday in a statement.

Officials from both the EPA and DuPont refused to release terms of the deal.

“We are not commenting on that particular issue at this time,” said Robin Ollis, spokeswoman for DuPont Co.’s Washington Works plant south of Parkersburg, W.Va.

The EPA alleged that DuPont for 20 years covered up important information about C8’s health effects and about the pollution of water supplies near the company’s Washington Works plant.

Under federal law, DuPont could face civil fines of more than $300 million for not reporting information that showed C8 posed “substantial risk of injury to health or the environment.”

[…]

In February, DuPont settled a class-action lawsuit for $107.6 million brought by Ohio and West Virginia residents in 2001, alleging the Wilmington, Del.-based company intentionally withheld and misrepresented information concerning the nature and extent of the human health threat posed by C8.

For the full article, click here.

European owner of Stop & Shop settles for $1.1 billion

Bloomberg.com is reporting that Ahold will pay $1.1 billion as part of a settlement:

Royal Ahold NV, the Dutch owner of the Giant and Stop & Shop supermarket chains, agreed to pay $1.1 billion to settle a U.S. class-action lawsuit over the company’s false earnings statements.

The accord will result in a third-quarter cost of 585 million euros after taxes, Peter Wakkie, the executive board member responsible for Amsterdam-based Ahold’s corporate governance, said today on a call. It’s the biggest securities class-action settlement by a European company in the U.S. Ahold gets about two-thirds of its revenue from the U.S.

“This draws a line under the whole affair and allows Ahold to move forward and begin delivering,” said Andrew Bell, a European equity strategist at Carr Sheppards Crosthwaite in London, which oversees the equivalent of $11.9 billion. “I want to see margins grow and the company get its investment-grade credit rating back.”

The agreement ends all civil litigation against Ahold in connection with its $1.14 billion profit overstatement. The accounting scandal triggered a 63 percent drop in the company’s share price in one day and the resignation of Chief Executive Cees van der Hoeven. Anders Moberg, brought in to restore confidence, has revived the stock by selling assets to cut debt and improve profitability.

Ahold’s shares rose 3 cents, or 0.5 percent, to 6.03 euros in Amsterdam. The stock has more than doubled since Dutch equity trading ended on Feb. 24, 2003, when the overstatement was first announced. The company has a market value of 9.41 billion euros.

According to the Stanford Law School Securities Class Action Clearinghouse, the Ahold settlement is “the largest securities-fraud class-action settlement against a European company in the U.S.”

Sluggish Netgear agrees to settle

Designtechnica News writer Geoff Duncan is reporting that Netgear will be settling its class action to the tune of $700K:

Netgear has agreed to pay $700,000 (and offer some customers a 15 percent discount) to settle a class action suit over bandwidth claims in ads for its Wi-Fi products.

In a filing with the Securities and Exchange Commission, Netgear has outlined the terms of a settlement to a class action suit filed against the company, alleging the company advertised false bandwidth claims for some of its Wi-Fi products. Although the company admits no wrongdoing, Netgear has agreed to pay $700,000 and offer customers who purchased Netgear wireless products between January 1999 and November 2005 a 15 percent discount on new wireless devices. In addition, the company must change its advertising to indicate promoted bandwidths offered by wireless produces are theoretical maximums, and include the following language on its advertising:

Maximum wireless signal rate derived from IEEE Standard 802.11 specifications. Actual data throughput will vary. Network conditions and environmental factors, including volume of network traffic, building materials and construction, and network overhead, lower actual data throughput rate.

In basic terms, the dispute stems from the disparity between the bandwidths offered by Wi-Fi wireless networking technology specifications (such as 802.11b and 802.11g) and the real world performance of those same technologies, which are often ten times less than the theoretical specs. (The same is true for wired networking technologies such as Ethernet.) Most companies offering Wi-Fi products cite the specified bandwidths of the technology they implement, but note that real world performance is substantially lower. But not Netgear: their advertising and product descriptions purported to offer the full theoretical bandwidths with no caveats whatsoever.

Kmart will settle for over $11 million

Kmart and employees have decided to settle for $11 million, according to Detroit Free Press staff writer David Ashenfelter:

Up to 150,000 current and former Kmart employees who participated in Kmart pension plans before the company’s historic collapse will share $11.75 million under a proposed settlement of a lawsuit against the retailer’s former officers and board members for investing the pension plans in now-worthless Kmart stock.

If approved, the settlement could help to heal some of the ill will many employees felt toward Kmart officers who, they contend, misled pension plan participants about the company’s failing financial condition as the retirement plans bought stock that steeply declined in value after the company filed for Chapter 11 bankruptcy protection in January 2002.

How much each person receives will be determined by how many people held Kmart stock in the retirement plan, how much they held and when they acquired it.

The proposed class consists of all participants and beneficiaries of the plan from March 15, 1999, through March 6, 2003. Court documents have pegged their loss at between $28 million and $300 million.

For the rest of the piece, click the above link.

Great Wolf Resorts securities suit

The Capital Times of Wisconsin is reporting that Great Wolf Resorts now faces a securities lawsuit:

Madison-based Great Wolf Resorts has been hit with a class-action lawsuit accusing it of stock fraud in relation to the wide discrepancy between its projected and actual second-quarter earnings.

The indoor waterpark resort developer saw its stock plunge by nearly one-third on July 28, when it reported a second-quarter loss that was about 2 times wider than it had forecast. CEO John Emery called the incident “embarrassing.”

The suit filed in federal court in Madison by Scott + Scott LLC of Colchester, Conn., is on behalf of people who bought the company’s stock from last December when it began trading publicly and July 28.

It charges that the company knew in advance it couldn’t meet its forecast but hid the information from investors.

Update on the Fedex class action

We first blogged about the Fedex lawsuit back in May, and now the battle is being featured in Business Week:

Back in 1996, when Roy Mason landed work as a delivery driver with Roadway Package System Inc., he liked the idea of being an independent contractor, instead of an employee. Although he drove exclusively for RPS out of its Arcadia (Calif.) terminal, Mason felt the company gave him wide latitude to manage his routes.

Two years later, FedEx Corp. acquired RPS, and Mason says that’s when things changed. He says a new management team set out strict rules dictating everything from how he dresses to how he holds his truck keys as he approaches a customer’s door. And the company imposes fines on drivers who don’t meet its strict standards. A few weeks ago, Mason says, managers shadowed him on his route, then slapped him with a citation for leaving his truck door open as he sprinted to drop off a package on a customer’s front porch. “They are absolutely controlling everything I do,” says Mason, 49.

Travis Boardman begs to differ. To him, the FedEx setup is ideal for anyone with entrepreneurial drive, and the rules are necessary. A contract driver since 1993, he now has six employees who run routes for him on Maryland’s Eastern Shore. He grosses $250,000 to $500,000 a year and says he nets “usually six figures.”

The two men’s conflicting views are at the heart of a contentious legal battle at the $29 billion delivery giant over what exactly constitutes an employee. Mason and other angry drivers have filed more than two dozen lawsuits around the country claiming that FedEx illegally classifies the 14,000 drivers in its ground division as independent contractors. They argue that because they’re essentially employees, they’re entitled to many of the same benefits enjoyed by the 60,000 drivers of FedEx Express, the parent’s original air express service — including overtime, vacation pay, and expense reimbursement.

FedEx vigorously disagrees that they’re misclassified. But right now, Mason and his colleagues are pulling ahead in the court battle. In October a California superior court judge reaffirmed his earlier ruling that among ground drivers who had filed a class action there, those who drive single routes should indeed be classified as employees. He concluded that FedEx exerts “close to absolute actual control” over them. Even as FedEx pursues an appeal, it is now under order to reclassify the California drivers. The California ruling “could be a harbinger of things to come,” says Andrew P. Morriss, a business law professor at Case Western Reserve University’s law school.

That ruling came on the heels of similar defeats for the company at state labor boards in California, Montana, and New Jersey in the past 18 months. Ground drivers also recently succeeded in consolidating class actions pending in 23 other states into a single case in an Indiana federal court.

For the rest, click here.

AspenTech settles for $5.6 million

According to Boston Business Journal, Cambridge-based Aspen Technologies Inc. will be settling an investor class-action lawsuit for $5.6 million.

Oil, chemical and pharmaceutical companies use AspenTech’s software to monitor plant processes and head off problems in their supplier networks. In its fiscal first quarter, AspenTech lost $4 million on $60 million in revenue.

One year ago AspenTech (Nasdaq: AZPN) replaced former chief executive David McQuillin after an internal audit revealed the company had overstated revenue on several deals.

At that point, two class-action suits had already been filed in Boston federal court, with investors claiming AspenTech misrepresented its financial results for fiscal years 2000 through 2004. In February a judge consolidated the cases into one and appointed as lead plaintiffs the City of Roseville Employees’ Retirement System in Michigan, and the Operating Engineers and Construction Industry and Miscellaneous Pension Fund.

Settlement reached in WV asbestos suit

According to AP writer Allison Barker, WVU will pay former and current employees as part of an asbestos class action settlement:

West Virginia University has reached a settlement in a class-action lawsuit affecting up to 5,600 former and current employees who may have been exposed to asbestos, the school announced Tuesday.

As part of the proposed settlement, WVU will institute and pay for a medical surveillance program to be conducted for 20 years. WVU also agreed to pay $1 million to cover potential claims and attorney fees.

A judge must approve the agreement before it becomes final. A hearing is scheduled for Dec. 22.

University employees sued in 2000 and sought medical monitoring for potential asbestos-related health problems as a result of working in university buildings containing asbestos insulation.

The workers, including professors, custodians, secretaries and other staff, alleged that asbestos in campus buildings put them at an increased risk of cancer.

The university said in a statement that the agreement had been reached in the “spirit of compromise.”

“WVU maintains that all standard, recognized practices for asbestos removal have been followed over the years, and that the general population of employees, through routine monitoring of buildings and air samplings, remain safe from any harmful effects of asbestos-containing materials,” the university said.

Until the 1970s, asbestos was universally prized for its resistance to fire and heat. Since then, the medical community has warned that asbestos fibers, when inhaled, can cause such illnesses as mesothelioma, a rare and inoperable form of lung cancer. It also causes asbestosis, an irreversible scarring of the lungs, and other lung ailments.

Florida families suing over Medicaid

Mark Hollis of the Orlando Sentinel reports that families in Florida are suing over Medicaid:

Five Florida families filed a lawsuit in federal court in Miami on Monday demanding reform of the state’s Medicaid system and alleging that thousands of poor and disabled children aren’t getting the preventive health-care services to which they’re entitled.

The families joined the Florida Pediatric Society and the Academy of Pediatric Dentistry in a class-action lawsuit against Gov. Jeb Bush’s top three state health officials — the heads of the state Agency for Health Care Administration, the Department of Children & Family Services and the Department of Health.

The lawsuit, modeled after a similar case in Oklahoma, contends that the state Medicaid program is violating federal law by operating a bureaucratically cumbersome health system for the poor that sets physicians’ reimbursement rates too low to keep enough number of doctors and dentists in the program.

[…]

According to the lawsuit, state health reports found that in the budget year ending in fall 2004, more than 500,000 Medicaid-enrolled Florida children were furnished no preventive health-care services. Among children not getting medical checkups that year, the lawsuit claims, were more than 30,000 children under 12 months, more than 152,000 between ages 1 to 5, and more than 337,000 ages 6 to 18.

Judge OKs class action suit against tech school

David Wickert of The News Tribune is reporting that a judge in Pierce County, Washington has “cleared the way for a class action lawsuit against a for-profit career school that closed last March amid allegations it preyed on low-income students.”

Friday’s ruling means thousands of former students of the Gig Harbor-based Business Computer Training Institute potentially could enter the lawsuit.

Already nearly 50 former students have joined, claiming they were misled about the quality of the education BCTI provided and their prospects for a job after graduation. Many were recruited outside welfare or unemployment offices and claim they were promised good-paying technology jobs if they completed BCTI programs.

Those programs, which taught basic word processing, spreadsheets and other computer skills, cost about $11,000 for a 30-week program. Many students used taxpayer-backed loans to pay for their education. But some claim their BCTI education didn’t prepare them for even basic office work, leaving them with few employment prospects but thousands of dollars in debt.

[…]

BCTI closed its seven campuses in Washington and Oregon on March 14 amid state investigations in Washington and Oregon. A Washington investigation found evidence that falsified admissions tests allowed unqualified students to get financial aid.

A broader Oregon investigation concluded that BCTI misled students, enrolled students who couldn’t benefit from its programs and reported inaccurate graduation and job-placement statistics to the state.

Next Page »