Alabama Immigration, Harrisburg, Kodak, United in Court News
A U.S. appeals court temporarily halted enforcement of Alabama laws requiring unregistered immigrants to carry documentation and forcing schools in the state to track students’ immigration status.
The Atlanta-based court on Oct. 14 temporarily blocked enforcement of those provisions, contained in legislation signed by Alabama Governor Robert Bentley in June. The court let stand the other immigration-law measures that the U.S. had also challenged.
The federal government and the rights groups showed a “substantial likelihood” they would win their challenges to the barred provisions of the Beason-Hammon Alabama Taxpayer and Citizen Protection Act and a likelihood of irreparable harm if those measures were enforced, the three-judge panel said. The rulings are provisional and remain in effect only until the appellate court considers the underlying legal challenges.
U.S. District Judge Sharon Lovelace Blackburn in Birmingham, Alabama, last month rejected arguments against the measures made in separate lawsuits filed by the federal government and a coalition of civil rights groups.
The U.S. and the coalition, led by the American Civil Liberties Union and Southern Poverty Law Center, asked the appellate panel to delay enforcement of the laws, which took effect with Blackburn’s Sept. 28 rulings, after she denied a request for a delay pending appeal.
State Attorney General Luther Strange said, in a filing that opposed delaying enforcement of the act while it is on appeal, Alabama isn’t seeking to supplant the U.S. role in immigration. Instead, he argued, the legislation draws on the state’s “traditional police powers,” and helps ensure that federal immigration law is respected, Strange said.
The cases are U.S. v. State of Alabama, 11-14532, and Hispanic Interest Coalition of Alabama v. Bentley, 11-14535, U.S. 11th Circuit Court of Appeals (Atlanta).
For more, click here.
For the latest trials and appeals news, click here
Verdicts, Settlements and Sentences
Moody’s, S&P, Fitch Settle Ratings Dispute With Connecticut
Moody’s Investors Service Inc., Standard & Poor’s and Fitch Inc. reached settlements resolving claims by Connecticut that the credit rating companies unfairly gave lower ratings to public bonds.
The companies will credit Connecticut about $900,000, which will be used to offset the expense of obtaining future ratings on the sales of state bonds, Attorney General George Jepsen said Oct. 14 in a statement.
Connecticut sued Moody’s, S&P and Fitch, claiming that because of deceptive practices by the companies, the state, municipalities and school districts paid higher interest rates than they should have on bonds they issued, and bought unnecessary bond insurance.
“Moody’s is pleased to have reached an agreement with the state of Connecticut to resolve this matter without costly and protracted litigation,” said Michael Adler, a spokesman for New York-based Moody’s.
Richard Blumenthal, then Connecticut’s attorney general and now a U.S. senator, sued the ratings companies in July 2008, calling the system “a secret Wall Street tax on Main Street.”
In March 2010, Moody’s said it would start rating state and local government bonds on the same scale as corporate securities. Fitch also recalibrated its grades for municipal bonds.
“We are pleased to have reached an amicable resolution with the state of Connecticut and look forward to rating the state’s future bond offerings,” Edward Sweeney, a spokesman for New York-based Standard & Poor’s, said in a statement.
J&J Unit Cleared of Liability for Alleged Levaquin Injuries
A unit of Johnson & Johnson isn’t responsible for tendon damage suffered by two New Jersey men who took the drugmaker’s Levaquin antibiotic, a jury found.
The state court jury in Atlantic City, New Jersey, deliberated about eight hours over two days before clearing J&J’s Ortho-McNeil-Janssen Pharmaceutical unit of liability for Paul Gaffney’s and Robert Beare’s injuries. The two men contend their Achilles tendon snapped after they took Levaquin to treat respiratory infections.
The Oct. 14 verdict is the company’s second win in a Levaquin case. In June, a Minnesota jury rejected a man’s claim that the antibiotic caused his Achilles injury. Another Minnesota jury in December 2010 awarded another former Levaquin user a total of $1.8 million in damages over his tendon injury.
“The evidence showed Ortho-McNeil-Janssen Pharmaceuticals properly informed of the benefits and risks associated with the use of Levaquin and that the company acted responsibly by providing appropriate and timely information about” the drug, William Foster, a spokesman for the J&J unit, said in an e- mailed statement.
Levaquin, which generated more than $1 billion in sales over an eight-year period starting in 2000, was J&J’s third- largest selling product at one point. In 2008, the U.S. Food and Drug Administration required all makers of antibiotics in Levaquin’s class to beef up warnings about tendon ruptures.
J&J faces more than 2,600 claims in U.S. courts blaming Levaquin for causing users’ tendon damage, court dockets show.
“We’re obviously disappointed with the verdict,” Andy Alonso, a lawyer for Gaffney and Beare, said in an interview after the panel announced its decision. “We felt the evidence was clear that the warnings were flawed. The jury felt otherwise.”
The case is Beare v. Johnson & Johnson (JNJ), L-196-10-MT, Superior Court of New Jersey for Atlantic County (Atlantic City).
BP Says Anadarko to Pay $4 Billion to Settle Gulf Spill Claims
BP Plc (BP/), the operator of the Macondo well in the Gulf of Mexico that was the source of the worst U.S. oil spill last year, said Anadarko Petroleum Corp. (APC) will pay $4 billion to settle all claims over the disaster.
Anadarko, which had a 25 percent stake in the well, will no longer pursue allegations of gross negligence against BP. The payment will be made in a single cash payment and will be put in the $20 billion trust being used to repay claims and damages. Under the terms of the deal, Anadarko will transfer its stake in the Macondo well back to BP.
The Anadarko settlement will be a boost to BP as the oil company prepares for a February trial in New Orleans to establish liability for the catastrophe. BP would face higher fines if it’s found guilty of gross negligence for the spill, which pumped almost 5 million barrels of crude into the Gulf and forced the company to write off $41 billion. Rig owner Transocean Ltd. and Halliburton Co., which supplied cement for Macondo, are also defendants.
“This is likely to be seen as good news for BP and will increase pressure on Transocean and Halliburton to settle ahead of the multi-district litigation,” Oriel Securities Ltd. said in a note to clients.
BP has now reached a settlement with both partners in the Macondo well. In May, a unit of Mitsui & Co., which had a 10 percent holding in the well, agreed to pay $1.07 billion. Based on that figure, analysts had expected a settlement of between $2 billion and $3 billion for Anadarko.
Weatherford International Ltd., which provided equipment for the Macondo well, agreed to pay BP $75 million.
Anadarko will book the $4 billion cost of the settlement, equal to about $5 a share in its third-quarter earnings, it said in a statement. The company said it’s confident there is no further significant financial risk from the spill.
Under terms of the settlement, both parties agreed to drop claims against the other. Anadarko and BP agreed to work together with respect to indemnified claims and Anadarko has the opportunity for a 12.5 percent participation in recoveries from third parties or insurance proceeds exceeding $1.5 billion and up to a total cap of $1 billion.
Cosmo Gets 25 Years in Prison for $413 Million Ponzi Scheme
Nicholas Cosmo, who pleaded guilty to running a $413 million Ponzi scheme that defrauded thousands of investors, was sentenced to 25 years in prison, prosecutors said.
Cosmo, owner of Agape World Inc. and Agape Merchant Advance LLC, was arrested in January 2009. He claimed Agape solicited investor funds that were used to make short-term bridge loans. Agape received about $413 million from investors, while only about $30 million in loans were made, according to the government. Actual losses to victims were about $195 million.
“Those who lie and steal from the investing public are on notice that they face severe penalties,” U.S. Attorney Loretta Lynch in Brooklyn said Oct. 14 in a statement.
Cosmo, who was sentenced by U.S. District Judge Denis Hurley in Central Islip, New York, operated the scheme from October 2003 to January 2009. He solicited funds from investors “well in excess” of what he told them was needed for bridge loans, prosecutors said, and then pocketed the money.
Richard W. Levitt, a lawyer for Cosmo at Levitt & Kaizer in New York, didn’t immediately return a call seeking comment on the sentence.
In August 2010, Richard Barry, a former vice president and underwriter at Agape World Inc., pleaded guilty participating in the scheme. He’s scheduled to be sentenced Nov. 2.
Cosmo’s case is U.S. v. Cosmo, 09-cr-00255, and Barry’s case is U.S. v. Barry, 10-cr-00648, U.S. District Court, Eastern District of New York (Central Islip).
For the latest verdict and settlement news, click here.
Trials and Appeals
Goldman Sachs Appeals Bayou Creditors’ $20.5 Million Award
Goldman Sachs Group Inc. (GS) filed an appeal seeking to dismiss a $20.5 million arbitration award to creditors of the failed hedge fund firm Bayou Group LLC.
Goldman Sachs asked the U.S. Court of Appeals in Manhattan to overrule a decision by the Financial Industry Regulatory Authority, the independent regulatory group for the securities industry. A federal district judge declined in November 2010 to reverse the Finra award.
The creditors sued Goldman Sachs Execution and Clearing LP in 2008 for its role as the prime broker and clearing broker for Bayou’s hedge funds. They said the Goldman Sachs unit aided a $400 million fraud at Stamford, Connecticut-based Bayou, which filed for bankruptcy in May 2006. Bayou co-founder Samuel Israel pleaded guilty to directing the scheme and is serving a 22-year prison term.
In the November ruling, U.S. District Judge Jed Rakoff in Manhattan said Goldman Sachs failed to show that the arbitration panel had “manifestly disregarded the law” in granting the award.
Goldman Sachs, based in New York, argued in its appeal brief that the Finra panel was wrong in determining that deposits into Bayou’s accounts and internal bookkeeping entries qualified as fraudulent transfers.
John Rich, a lawyer for the Bayou creditors, didn’t immediately return a voice-mail message seeking comment on Oct. 14 on the Goldman Sachs filing.
The case is Goldman Sachs Execution & Clearing LP v. Official Unsecured Creditors’ Committee of Bayou Group LLC, 10- cv-05622, U.S. District Court, Southern District of New York (Manhattan).
Al-Qaeda Should Pay $9.4 Billion for 9/11, U.S. Judge Says
Chubb Corp. (CB) and four other insurers should be awarded $9.4 billion in damages in their suit against al-Qaeda over the Sept. 11 terrorist attacks, a U.S. judge recommended.
U.S. Magistrate Judge Frank Maas in Manhattan said on Oct. 14 that the insurers, which sued for money they paid to policyholders to cover business and property losses, should recover triple damages under the U.S. Anti-Terrorism Act.
The insurers won a default judgment in 2006 against al- Qaeda, the radical Muslim terrorist organization behind the attacks, after the group didn’t contest the suit.
Maas gave the parties 10 days to file any objections to his report and recommendations to U.S. District Judge George Daniels. Daniels, who is presiding over the case, will then decide whether to award the money.
The case is Federal Insurance Co. v. al-Qaeda, 03-CV-6978, U.S. District Court, Southern District of New York (Manhattan).
Harrisburg Mayor, State Seek Dismissal of Bankruptcy Case
Pennsylvania officials joined Harrisburg Mayor Linda D. Thompson in an bid to dismiss a bankruptcy petition filed by the city council, which critics say violates local, state and federal laws.
In papers filed last week, Thompson and lawyers for the state are seeking an immediate end to the bankruptcy, which began Oct. 11 after four members of the city, the capital of Pennsylvania, voted to hire a lawyer to file the case. Thompson says the council members did not follow proper procedures and the state says the bankruptcy violates a law passed earlier this year by legislators.
The city council voted 4-3 on Oct. 11 in favor of Chapter 9 municipal bankruptcy, seeking to ward off a state takeover of its finances after failing to pay debt on a trash-to-energy incinerator. Mark D. Schwartz, a lawyer based in Bryn Mawr, Pennsylvania, faxed the bankruptcy petition to the Harrisburg court that night.
Thompson, who hired the law firm Tucker Arensberg PC to oppose the bankruptcy, said her lawyers will file a formal dismissal motion “shortly.” In the meantime, she asked U.S. Bankruptcy Judge Mary D. France to set up a conference quickly to schedule an emergency motion to end the case.
France set a hearing for Oct. 17 to discuss the status of the case and to set a schedule for the coming battle over whether the bankruptcy should be dismissed. She set Nov. 21 as a deadline to file objections to the bankruptcy.
The case is In re City of Harrisburg, Pennsylvania, 11-06938, U.S. Bankruptcy Court, Middle District of Pennsylvania (Harrisburg).
For more, click here.
Mets Owners Oppose Madoff Trustee’s Bid for Federal Jury Trial
The owners of the New York Mets said a jury shouldn’t be called upon to decide claims of hundreds of millions of dollars against them filed by Irving Picard, the trustee liquidating Bernard Madoff’s firm.
U.S. District Judge Jed Rakoff in New York set a March 19 trial date for the trustee’s case against the Mets owners after narrowing by two-thirds the $1 billion demanded by Picard from Fred Wilpon and Saul Katz. The remainder of the trustee’s suit is based on bankruptcy claims that don’t carry a right to a jury trial, the team owners said in a court filing Oct. 14.
“No decision supports the existence of a debtor’s jury trial under these circumstances,” Karen Wagner, a lawyer for Wilpon and Katz, said in court papers. “No jury trial attaches to these claims.”
Picard originally demanded $300 million in profit and $700 million in principal from the Mets partners in a complaint alleging they turned a blind eye to Madoff’s Ponzi scheme. The partners denied it.
To recover the profit, Picard must “simply” prove they didn’t give equal value back for money received, Rakoff said in his ruling.
The judge tossed most of the trustee’s allegations in an 11-count complaint in Manhattan federal court.
Rakoff said Picard could try to reclaim about $386 million, based on bankruptcy claims. Picard has also asked Rakoff to let him appeal the decision.
Amanda Remus, a Picard spokeswoman, didn’t immediately respond to an e-mail seeking comment about the filing.
The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).
For the latest lawsuit news, click here.
Fujifilm Sues Eastman Kodak Over Digital Camera Patents
Fujifilm Corp. sued Eastman Kodak Co. (EK), alleging that it infringed patents for digital cameras.
Fujifilm, based in Tokyo, sued Eastman Kodak over four digital-camera patents after talks between the companies were unsuccessful, according to a complaint filed Oct. 14 in federal court in Manhattan.
Kodak manufactured and sold products in the U.S., including the EasyShare C340 and EasyShare M530 digital cameras, that violated the patents, Fujifilm alleged in the complaint. It seeks damages and a jury trial.
Christopher Veronda, a spokesman for Rochester, New York- based Kodak, didn’t immediately return messages seeking comment on the suit.
The case is Fujifilm Corp. v. Eastman Kodak Co., 1:11- cv-07247, U.S. District Court, Southern District of New York (Manhattan).
Citigroup Sued by Fairfield Sentry Liquidators Over Madoff
Liquidators for Fairfield Sentry Ltd. who are seeking to take back money withdrawn from the largest feeder fund for Bernard L. Madoff Investment Securities Inc. sued a Citigroup Inc. (C) unit Oct. 13.
Citigroup Global Markets Ltd. received $130 million in so- called redemption payments from Sentry from Oct. 14, 2005, to Nov. 19, 2008, according to the complaint filed in U.S. Bankruptcy Court in New York.
The liquidators accuse the Citigroup unit and unidentified investors in the Sentry funds of unjust enrichment and seek return of the payments plus interest.
“We believe this suit is without merit,” Danielle Romero- Apsilos, a spokeswoman for New York-based Citigroup, said in an e-mailed statement.
The liquidators filed similar complaints on Oct. 13 against Fullerton Capital Pte Ltd. and Bankmed Suisse SA.
The case is In re Fairfield Sentry Ltd., 10-13164, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Madoff Trustee Sues Jewish Association for $5.2 Million
The liquidator of Bernard L. Madoff’s firm sued the Jewish Association for Services for the Aged for $5.2 million in fictitious profit allegedly received from the Ponzi scheme over six years.
Trustee Irving Picard lost his bid to claw back six years of withdrawals from the New York Mets owners last month, when U.S. District Judge Jed Rakoff cut a $1 billion suit by two- thirds, saying he could only take back two years of money. In the Oct. 14 suit against the Jewish Association, filed in U.S. Bankruptcy Court in New York, Picard says he is entitled to claim six years of transfers under bankruptcy and New York law, among other laws.
“The trustee is entitled to a judgment against defendant avoiding and preserving the six year transfers,” he said in the complaint.
David Warren, president of the association for services to the Jewish aged in New York, didn’t immediately respond to a voice-mail message seeking comment on the lawsuit.
The case is: Picard v. Jewish Association, 11-ap-02773, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
United, Delta, Alaska Air Sued Over Mobile Check-In Patents
United Airlines, Continental Airlines, Delta Air Lines and Alaska Air Group Inc. (ALK) were sued by a patent holder over wireless transaction technology for mobile check-in and boarding passes.
Aeritas LLC, a Dallas-based wireless-software maker, contends the air carriers are using its inventions protected by patents awarded in 2007 and 2011, according to four complaints filed Oct. 13 in federal court in Wilmington, Delaware.
“Aeritas has suffered monetary damages in an amount adequate to compensate for defendants’ infringement, but in no event less than a reasonable royalty,” wrote the patent holder, which is also seeking a jury trial and a halt to the airlines’ use of the inventions.
Continental and United are units of United Continental Holdings Inc. (UAL), based in Chicago. Delta is based in Atlanta and Alaska Air is based in Seattle.
“We haven’t been served and are still assessing the claims of the lawsuit,” Bobbie Egan, an Alaska Airlines spokeswoman, said in an e-mailed statement.
Trebor Banstetter, a Delta spokesman, didn’t immediately return a call seeking comment on the lawsuit. Representatives of United Continental weren’t immediately available for comment.
The cases are Aeritas v. United Airlines Inc., 1:11- cv-00970; Aeritas v. Continental Airlines Inc.; Aeritas v. Delta Air Lines Inc. (DAL); and Aeritas v. Alaska Air Group Inc., U.S. District Court, District of Delaware (Wilmington).
To see the patents, click 7,933,589 and 7,209,903.
The federal government’s Oct. 4 suit against Bank of New York Mellon Corp. (BK) claiming that the bank had defrauded clients in foreign currency trades was the most-read litigation docket on the Bloomberg Law system last week. The New York attorney general and the City of New York also sued the bank in New York state court.
The suits allege that BNY Mellon, the largest custody bank, earned $2 billion through a 10-year fraud in which it misrepresented to customers its pricing practices. Florida and Virginia have also filed claims against the bank and Massachusetts regulators are investigating as well.
Rival State Street Corp., the third-largest custody bank, has faced similar claims over foreign currency trades.
Custody banks keep records, track performance and lens securities for institutional investors including mutual funds, pension funds and hedge funds. In addition, custody banks manage investments for individuals and institutions.
BNY Mellon will fight the lawsuits, said Kevin Heine, a spokesman for the bank. The complaints are based on the same “flawed analysis” and a misunderstanding of the global foreign exchange market, he said.
The cases are U.S. v. Bank of New York Mellon Corp., 11-06969, U.S. District Court, Southern District of New York (Manhattan), and People of the State of New York v. The Bank of New York Mellon Corp., 114735-2009, New York State Supreme Court (Manhattan).
For more, click here.
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org.