SEC Mineral Rule Intact
WASHINGTON — A federal judge on July 24 upheld a U.S. Securities and Exchange Commission rule that will require about 6,000 publicly traded companies to report whether their products contain four so-called conflict minerals from the Democratic Republic of the Congo, where warlords use proceeds from the mineral sales to finance murder, rape and torture.
The National Association of Manufact­urers, the U.S. Chamber of Commerce and the Business Roundtable sued the SEC to block the rule, which they said might cost as much as $16 billion to implement.
U.S. District Judge Robert Wilkins found that the SEC properly carried out the will of Congress in crafting the rule.
Egg Supplier to Settle
PHILADELPHIA — The country's largest producer and distributor of fresh eggs announced on July 23 that it would pay $28 million to a putative class of direct egg purchasers.
The settlement — which must be approved by U.S. District Judge Gene Pratter — still leaves the company, Cal-Maine Foods Inc., fighting price-fixing claims by indirect purchasers and opt-out direct-action plaintiffs.
Cal-Maine is one of about a dozen companies defending antitrust class actions filed after big spikes in egg prices in 2007 and 2008. Most of the claims, brought on behalf of direct ­purchasers, allege that egg producers adopted anti-competitive methods for limiting egg supplies. Defendant Land O'Lakes Inc. and two subsidiaries settled direct-­purchaser claims for $25 million in 2010.
UBS Resolves MBS Case
GENEVA (AP) — The U.S. government has reached an agreement in principle to settle its lawsuit against Swiss banking giant UBS A.G. that seeks to recoup more than $900 million in losses from mortgage-backed securities, the bank announced on July 22.
In 2011, the U.S. government sued UBS and 17 other financial firms for selling some $196 billion worth of mortgage-backed securities to housing financing agencies Fannie Mae and Freddie Mac. The securities turned toxic when the housing market collapsed.
In addition to the U.S. banks, the action extended to other large European banks including The Royal Bank of Scotland Group PLC, Barclays PLC and Credit Suisse Group A.G. Final approval of the settlement is pending.
SEC Nixes Falcone Deal
WASHINGTON (AP) — The Securities and Exchange Commission on July 18 rejected an $18 million settlement that would have banned billionaire hedge-fund manager Philip Falcone from the securities industry for two years.
Falcone and Harbinger Capital Partners were notified that SEC commissioners voted down the settlement, according to a court filing. The SEC has accused Falcone and the firm of using fund money to pay his taxes and favoring some clients over others.
The filing didn't say why the deal was rejected. SEC votes on enforcement actions in closed sessions. Falcone is also chief executive and chairman of Harbinger Group Inc., a publicly traded company that sells Rayovac batteries, George Foreman grills and Farberware appliances.
Transgender Minor Wins
LOS ANGELES — A California school district on July 24 settled a discrimination complaint brought by the civil rights divisions of the U.S. Justice Department and the U.S. Department of Education on behalf of a transgender student.
The Arcadia Unified School District agreed to allow the student, who identifies as a male, to be treated like other boys at his school. The boy alleged that the district prohibited him from using the boys' locker rooms and restrooms.
Instead, the student was forced to use a bathroom in the school's health office and, during the trip, stay in a separate cabin with one of his parents. The district admitted no wrongdoing but agreed to change its policies and train staff on how to prevent transgender discrimination.
Suits over Siri tossed
SAN FRANCISCO — A federal judge in Oakland, Calif., has dismissed a consolidated class action brought against Apple Inc. over its marketing of Siri, a digital assistant feature embedded in the company's iPhone 4S.
Plaintiffs claimed they were persuaded to buy the new phone by the advertising blitz trumpeting Siri, only to find the feature fell far short of Apple's promises. They sought damages to recover the cost of buying the phones.
U.S. District Chief Judge Claudia Wilken found that the plaintiffs offered few specifics on how they were deceived by Apple and how the company should have known that its device would not live up to customers' expectations.
Judge OKs Toyota deal
LOS ANGELES — A federal judge on July 19 approved a $1.6 billion settlement between Toyota Motor Corp. and consumers of its vehicles who alleged they suffered economic losses because of the sudden-acceleration recalls.
U.S. District Judge James Selna in Santa Ana, Calif., gave his final approval during a hearing, noting that the settlement was extraordinary because all the class action funds went to the class members. Selna, who gave his final approval after issuing a tentative order late on July 18, also approved $200 million in fees and $27 million in expenses for 31 plaintiffs firms. The payouts amounted to 12.3 percent of the settlement value.
The deal aims to resolve claims by consumers that their cars lost value following the highly publicized recalls of nearly 10 million vehicles for floor-mat and accelerator-pedal defects associated with sudden acceleration.
Glaxo Deal on Avandia
GlaxoSmithKline PLC announced on July 24 that it has set aside money to settle lawsuits brought by eight state attorneys general accusing the company of falsely marketing its diabetes drug, Avandia.
The proposed $229 million settlement is mentioned in the company's second-quarter earnings report, and includes false-marketing claims involving other drugs brought by Louisiana's attorney general. A company spokeswoman said the company agreed to the settlement "to avoid the expense and uncertainty of protracted litigation and trial."
Ex-Prosecutor Loses Bid
NEWARK, N.J. — A federal judge on July 23 denied a motion to acquit and a motion for a new trial filed on behalf of ex-prosecutor Paul Bergrin.
U.S. District Judge Dennis Cavanaugh rejected the motions, which argued that evidentiary shortfalls and the court's refusal to indemnify defense witnesses tainted the first trial. Cavanaugh also rejected Bergrin's request to have jurors probed for evidence of outside influence, given their swift arrival at guilty verdicts on 23 complex counts.
Bergrin, convicted of facilitating witness murder and running a drug ring through his law firm, was accused of helping arrange the 2004 shooting death of an FBI informant who was a witness against one of his clients. He was also accused of helping plan two witness murders that were not carried out.
Cigna Corp. Not Covered
PHILADELPHIA — A Pennsylvania intermediate appellate court has ruled that Cigna Corp.'s excess insurer is not obligated to indemnify the company for any of the $140 million it paid to settle class action claims for breach of contract and RICO violations.
The court also ruled that, in general, it is the insured, not the insurer, who bears the burden of proving the apportionment of settlement funds to claims.
A three-judge Pennsylvania Superior Court panel ruled that Cigna failed to show that at least 75 percent of the ­settlement was attributable to RICO-related claims. The court had previously ruled that RICO claim settlements were covered under Cigna's policy with excess insurer, but breach of contract claim settlements were excluded from coverage.
Game Creator Prevails
SAN FRANCISCO — A federal jury found on July 23 that early versions of Electronic Arts Inc.'s Madden NFL Foot­ball were derivative works of a game created by Robin Antonick.
The verdict could be worth between $3.5 million and $11.6 million in unpaid royalties, pending a decision on prejudgment interest. More important, his attorneys said, the verdict puts him in position to prove that later versions of the game, worth many billions of dollars, made similar unauthorized use of Antonick's work.
"Assuming that same play data is in there — and there's no reason not to — then liability is determined, or easy to show," said Leonard Aragon, a partner at Hagens Berman Sobol Shapiro.