Toyota Accord Lawyers Seek $200 Million Fee
Stock Chart for Toyota Motor Corp (7203)
Toyota Motor Corp., Asia’s biggest automaker, will take a $1.1 billion charge to settle U.S. consumer claims that the value of their vehicles diminished because of recalls related to unintended acceleration.
Plaintiffs’ lawyers are asking as much as $200 million in attorneys’ fees, Steve Berman, a lead plaintiffs’ attorney, said. The total will be paid out to 25 firms and about 85 attorneys, according to an article in the Wall Street Journal.
The settlement, pending approval from a judge in federal court in Santa Ana, California, will cover costs such as cash payments to customers, Toyota said in a statement yesterday. The deal is valued at $1.2 billion to $1.4 billion, a record in the U.S. in terms of financial scale and number of vehicles, according to Seattle-based law firm Hagens Berman, which represented plaintiffs.
The one-time charge will be reflected in earnings for the quarter ending Dec. 31, Toyota said. The writedown is separate from the $2 billion in total costs related to the recalls that Toyota had projected in 2010, said Keisuke Kirimoto, a Tokyo- based spokesman. Toyota didn’t admit to any defects in its vehicles or any wrongdoing in the settlement.
The cases were combined in a multidistrict litigation before U.S. District Judge James V. Selna, who is also handling the federal personal injury and death suits. The resolution asks Selna to certify the lawsuit as a class action for settlement purposes.
Lawyers for both sides are asking for immediate preliminary approval, Berman said in an interview yesterday. The lawyers will be seeking final approval in June, after which Toyota owners will get paid, Berman said.
The case is In re Toyota Motor Corp. (7203) Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).
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Marvell Risks Triple Damages in Carnegie-Mellon Patent Verdict
A U.S. jury ordered Marvell Technology Group Ltd. (MRVL) to pay $1.17 billion, a penalty that may be tripled, for infringing patents on integrated-circuit technology held by Carnegie Mellon University.
Marvell, which makes chips for computers and mobile phones, fell 85 cents, or 10 percent, to $7.40, in Nasdaq Stock Market trading following the verdict yesterday in federal court in Pittsburgh.
The jury found Marvell’s infringement willful, providing a basis for U.S. District Judge Nora Barry Fischer to increase the award by as much as three times, according to a statement by K&L Gates LLP, the law firm representing the university.
Daniel Yoo, a spokesman for Hamilton, Bermuda-based Marvell, didn’t immediately respond to an e-mail and telephone call seeking comment.
Carnegie Mellon sued over use of the two patents, issued in 2001 and 2002, that cover ways to detect data stored on a computer’s hard-disk drive by filtering out noise or unwanted electrical signals. The school in a March 6 complaint said at least nine types of Marvell’s circuits use its inventions.
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Wells Fargo Wins Order Reversing Decision on Overdraft Fees
Wells Fargo & Co. (WFC) won its bid to throw out a judge’s order that it pay California customers $203 million for manipulating debit-card transactions to boost overdraft fees.
The decision, issued yesterday by the U.S. Court of Appeals in San Francisco, reverses a lower-court order requiring Wells Fargo to cease its practice of charging overdraft fees based on its posting in high-to-low order customers’ debit-card transactions. The bank’s practice is a “federally authorized pricing decision,” the appeals court ruled.
The three-judge panel also returned the case to the district court, finding that Wells Fargo is liable for fraud violations of California’s unfair competition law. The lower court was directed to determine what damages, if any, Wells Fargo must pay.
Covington & Burling LLP partner Robert Long, a lawyer for Wells Fargo, said at a hearing in May before the three-judge panel in San Francisco that, the judgment should be reversed because the lawsuit claims are “preempted by federal banking law,” The claims also “fail as a matter of state law,” Long said.
Wells Fargo’s practice of reordering transactions was “engineered” for the “sole purpose of generating overdraft fees,” Michael Sobol, a lawyer for the plaintiffs, told the court in May.
Richard Heimann, a partner at Lieff Cabraser Heimann & Bernstein LLP, who also represented customers, said in court papers that Wells Fargo misled customers about the policy, burying it in fine print and advertising that debit transactions would “automatically” be deducted from accounts, which led customers to assume that withdrawals would be posted in chronological order.
Today’s decision “largely reaffirms Wells Fargo’s position,” bank spokesman Ancel Martinez said in an e-mailed statement. “We look forward to resolving the remaining issues,” he said.
Sobol didn’t immediately return a phone call seeking comment.
The case is Gutierrez v. Wells Fargo, 10-16959, U.S. Court of Appeals for the Ninth Circuit (San Francisco).
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Former French Government Minister Joins Mayer Brown
Former French government minister Jeannette Bougrab has joined Mayer Brown LLP as a partner in the banking and finance practice in Paris, where she will lead the office’s public law and compliance-related activities.
Bougrab was in the government of former French Prime Minister François Fillon as State Secretary of the Ministry of Youth and Community Life. A member of the State Council, France’s highest administrative court, she also has served as a director of the Arab World Institute.
Bougrab has also been an assistant professor in public law at the University Pantheon-Sorbonne and the Institut d’ Etudes Politiques de Paris and also served as a legal counsel at the Constitutional Council.
Mayer Brown has 20 offices in the U.S., Europe and Asia.
Herbalife Working With Law Firm in Ackman Dispute
Herbalife has hired law firm Boies, Schiller & Flexner LLP to assist the company with its William Ackman dispute, the Wall Street Journal reports, citing people familiar with the matter.
On Dec. 20, in a blistering 210-minute presentation in New York, activist investor Ackman called the maker of nutritional and weight-loss supplements a pyramid scheme and said he had shorted the stock. Ackman’s comments riled the company’s chief executive officer and ran into a wall of opposition from the nine Wall Street analysts who cover the company.
Herbalife Ltd. (HLF) sells vitamins, shake mixes and skin gels through a marketing network of independent distributors in at least 81 countries. Those independent contractors earn revenue by selling products directly to customers and recruiting new distributors, for which they earn a share of those sales and incentives from the company.
A classic pyramid scheme attempts to make money solely by recruiting new participants into the program, according to the U.S. Securities and Exchange Commission. Ackman said Herbalife has structured itself to hide that intent.
“Today’s presentation was a malicious attack on our business model based largely on outdated, distorted and inaccurate information,” the company said in an e-mailed statement Dec. 21. “We operate at the highest ethical and quality standards.”
Herbalife said in a statement it will hold a meeting with analysts sometime during the week of Jan. 7 to address Ackman’s claims.
Ropes & Gray Advises Altamont in Deal on Tacala and Boom Foods
Ropes & Gray LLP represented Altamont Capital Partners in its acquisitions of Tacala LLC and Boom Foods LLC, in partnership with management, the firm said in a statement. The terms weren’t disclosed. Paul Hastings LLP and Burr & Forman LLP advised Tacala.
Tacala manages 162 Taco Bell franchises in the Southeastern U.S. and Boom Foods is a Sonic drive-in franchisee with 66 locations.
Tim Morrison and Joey Pierson will continue as Tacala’s president and chief financial officer, respectively, according to a company statement. Don Ghareeb, who founded the business with Dick Reese in 1989, will remain an active board member and adviser to the companies.
Steve Brownlie, principal of Altamont, said in a statement, “Tacala’s growth and success are testaments to both the strength of the Taco Bell brand and to the talent of the Tacala management team.”
Altamont Capital Partners is a private investment firm based in the San Francisco Bay Area with about $500 million of capital under management, according to a company statement.
Ropes & Gray, also led by Boes, represented Altamont Capital Partners in its transaction announced this week to take a majority stake in Omniplex World Services Corp., a provider of government security and background investigations services.
King & Spalding Advises on GE Aviation Venture with Accenture
King & Spalding LLP advised GE Aviation in its agreement with Accenture to form a joint venture company, called Taleris, that will provide airlines and cargo carriers around the world intelligent operations services focused on improving efficiency, the firm said.
The King & Spalding legal team involved in the joint venture was led by corporate partner Michael J. Egan and included partner James H. Lokey on tax.
The new venture will leverage aircraft performance data, prognostics, recovery and planning optimization solutions that will include assets and capabilities from both GE and Accenture, the firm said. Financial details weren’t provided.
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