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Showing posts with label Lawsuit. Show all posts
Showing posts with label Lawsuit. Show all posts

Friday, July 31, 2015

SNOOP DOGG SUES PABST OVER PROFITS FROM BEER-MAKER'S SALE

Original Story: chicagotribune.com

Snoop Dogg sued Pabst Brewing Co. on Monday, claiming the beer-maker owes him a portion of its proceeds from the company's sale last year.

The breach-of-contract lawsuit seeks 10 percent of the net sales price paid to Pabst for its Colt 45 malt beer line, which was included in last year's sale to beer entrepreneur Eugene Kashper and an investment firm. A San Diego contract lawyer represents clients in breach of contract cases and contract litigation.

Snoop Dogg signed a three-year agreement in 2011 to endorse Colt 45's fruit-flavored beer called Blast by Colt 45. The lawsuit states his contract called for him to receive a portion of the sale price if Pabst sold its Colt 45 operations before January 2016.

His contract also called on the rapper to consult with Colt 45's marketing team at least once a year on how he could integrate Blast by Colt 45 into his concerts, interviews and social media posts. Snoop Dogg received an upfront payment of $250,000 and an additional $20,000 for every 10th mention of the beer on social media, TV or during a concert. A San Francisco contracts lawyer is following this story closely.

The contract also called for the rapper to receive a royalty on each case of Blast by Colt 45 that was sold.

Pabst did not immediately return an email message seeking comment.

The lawsuit states Pabst told the rapper that the sale didn't trigger the clause entitling him to sale proceeds.

The deal to sell Pabst to Kashper and San Francisco-based TSG Consumer Partners LLC was finalized in November. No purchase price was announced, but the lawsuit filed by the rapper's attorney, Alex Weingarten, states Pabst was reportedly sold for $700 million. It is unclear how much of the sale price was for the Colt 45 line of beers.

In addition to Colt 45 and its namesake beer, Pabst Brewing Co. makes Old Milwaukee and Schlitz.

Monday, April 19, 2010

Goldman Contends it was Blindsided by Lawsuit

The Wall Street Journal

Goldman Sachs Group Inc. officials said they knew as far back as August 2008 that regulators were examining controversial mortgage securities created by the firm but were stunned by the bombshell civil fraud suit lodged against it Friday, with most having learned about it from news reports.

Firms typically get a chance to settle such suits, but not in this case, Goldman said. The Wall Street giant said it was alerted to the probe in the summer of 2008 and was warned that it might face a suit in July 2009.

It says it then responded in detail to the Securities Exchange Commission's inquiry in September, but heard nothing back from the government until Friday's unveiling of the civil suit. The SEC usually notifies firms ahead of a lawsuit as a courtesy to give them a chance for a last-ditch settlement or to prepare for the public fallout.

The move showed a combative streak from the SEC, which has been under mounting pressure after letting slip through its fingers early probes into the Ponzi scheme of Bernard Madoff and the alleged fraud of Texas financier R. Allen Stanford.

The case, SEC v. Goldman Sachs & Co. and Fabrice Tourre, sets the stage for what could become the signature lawsuit from the financial-crisis era.

It comes at a time when the Obama administration is trying to move through Congress a bill to overhaul financial regulations in the wake of the crisis, legislation that would likely affect the regulation of products used in the Goldman deal. The effort is being resisted by major banks and by Republican lawmakers.

Lawsuits by the SEC are subject to a vote by the agency's five commissioners, and the tally on the Goldman case will be closely watched in Washington, as the current commission is split along party lines—with two Republicans and two Democrats, plus one independent who was appointed by President Obama.

The way the SEC launched the suit "certainly doesn't follow the spirit" or practice of the agency, said Paul Atkins, who served as a Republican SEC commissioner last decade.

An SEC spokesman said the agency followed standard practices in pursuing the case. The SEC said the suit's timing wasn't influenced by external events.

White House spokeswoman Jen Psaki noted that the SEC is an independent agency, "and it does not coordinate with the White House the announcement of its enforcement actions. We were not given advance notice at the White House about the announcement."

The SEC suit centers on a deal Goldman structured by the name of Abacus. In early 2007, Goldman was helping one of its clients, hedge fund Paulson & Co., design a security known as a collateralized debt obligation, which was built out of a set of risky mortgage assets that the fund and founder John Paulson helped select. Paulson then placed a "short" bet that mortgages contained in the Abacus CDO would fall in value. The CDO had three investors:  Paulson, securities firm ACA Capital Ltd. and German bank IKB Deutsche Industriebank AG.

The SEC alleges that Goldman should have disclosed Mr. Paulson's involvement in creating the portfolio and his bearish bet. The portfolio quickly lost value and delivered huge returns for the hedge fund. Both Goldman and Paulson say the nature of the deal and the sophisticated investors involved meant that no such disclosure was necessary.

Goldman said it first heard from the SEC about the investigation in August 2008, when it received a subpoena from attorneys requesting documents related to the transaction.

It sent about eight million pages, said a person familiar with the matter.

Five Goldman employees, including Fabrice Tourre, the trader involved in marketing Abacus who was named as a defendant by the SEC, were interviewed, say people familiar with the matter. Mr. Tourre has not responded to repeated requests for comment.

In July 2009, Goldman and Mr. Tourre received so-called Wells notices from the SEC. Such notices are a formal warning that regulators intend to file civil charges, and serve as a point of negotiation about a settlement. By September 2009, both Goldman and Mr. Tourre had responded to the charges in a 41-page document, according to people familiar with the matter.

The gist of Goldman's defense: The disclosure of Mr. Paulson's involvement would not have had any real effect on buyers of the CDO created by Goldman.

"If this matter is litigated, Goldman Sachs is confident that a fuller record...will underscore that no one in fact considered Paulson's role important and that no one was misled," Goldman told the SEC in September 2009, in a document reviewed by The Wall Street Journal.

That was the last contact Goldman had with the SEC about the matter until late March, when Goldman placed a phone call inquiring about the case.

The call wasn't returned, Goldman said. On Friday, the SEC moved ahead with charges, stunning Goldman officials. Perhaps more than any other Wall Street firm, Goldman has been steadfast in defending its actions during the credit boom.

As employees gathered around television sets Friday, they groused about getting scapegoated in Washington.

The SEC's enforcement division, meanwhile, has been under pressure to show it has teeth. Last fall, federal Judge Jed Rakoff rejected as too lenient the SEC's proposed $33 million settlement with Bank of America over disclosures made to shareholders about its takeover of Merrill Lynch.

Monday, March 22, 2010

TruGreen Agrees to $500,000 Fine

TimesUnion.com

ALBANY NY -- A major lawn care company in the Capital Region has been fined $500,000 by the state for misapplying pesticides, keeping inaccurate records and using uncertified or untrained workers.

TruGreen agreed to the penalty from the state Department of Environmental Conservation under an agreement filed this week. The state agreed to suspend $100,000 of the penalty if the company, which paid a hefty state fine in 1999, hires an outside expert to recommend ways for TruGreen to fix its problems.

DEC spokesman Rick Georgeson said there were more than 100 separate violations dating back to 2007. Most were for lawn-care contracts in the Capital Region, he said.

There were further violations cited in DEC Region 1, which includes Long Island, according to a consent order with the DEC signed Tuesday by TruGreen Vice President Joseph Brown.

According to DEC, an investigation into company records for 2007, 2008 and 2009 found "many instances" where pesticides were not applied under label directions. That included cases where pesticides were applied during high winds and near water despite directions against such use.

The state also found the company filed inaccurate annual reports with DEC in 2007 and 2008, failed to keep accurate information on customer invoices from 2007 to 2009, and in two instances, had workers with no record of being trained or certified for the pesticides applied.

And, in July 2009, liquid weed killer was dumped into a floor drain at the company's Albany branch at 23-A Walker Way, Colonie.

TruGreen spokeswoman Susanna Weston said the Tennessee-based company will "evaluate its current internal environmental operations and prepare enhanced environmental protocols." She added TruGreen was "pleased" by the settlement and expected to cooperate further with DEC.

Under the agreement, TruGreen must submit its outside expert plan to DEC within a year, and within six months of that, create an environmental manual describing how changes will be made at the "corporate, department and service" levels. Then, TruGreen will have to give DEC progress reports every three months.

TruGreen is the nation's largest lawn care service, and has about 2.5 million customers served by more than 300 branches located throughout the United States and Canada, the company said.

This is the second time in little more than a decade that the company, which on its Website touts its involvement in upcoming Earth Day events next month, has been hit with a major state fine.

In 1999, DEC fined the company $600,000 -- the largest state fine ever for pesticide violations -- for more than 35 applications of commercial lawn pesticides between 1994 and 1999.

TruGreen agreed to cut its pesticide use by 5 percent and search out environmentally-friendly Eco lawn care  alternatives, a compromise that lowered the penalty by $200,000.

"It's unfortunate that there can be no compensation to the numerous workers and community members that were unduly exposed during the commission of these violations. Nor will they be notified as individuals as to the potential health impacts of that exposure," said Kathleen Curtis, policy director of Clean New York, a Schenectady-based environmental advocacy group. "We need better pesticide laws to protect public health and the environment. Much-needed enforcement will only decrease, given the draconian cuts Governor Paterson is proposing to the essential work of this beleaguered agency"

Pesticide violations

Among pesticide violations at TruGreen, the nation's largest lawn chemical service, found by the state Department of Environmental Conservation:

The lawn services company's 2007 and 2008 annual reports to DEC, which describe amounts and types of lawn chemicals used, contained "numerous instances of inaccurate information." The reports are exempt from public disclosure, and can only been seen by public health researchers examining possible health impacts.

Numerous invoices for lawn care contracts from 2007, 2008 and 2009 failed to provide "required information or provided inaccurate information."

Six weeks of random pesticide application records from 2007, 2008 and 2009 found "many instances" where chemicals were used contrary to written label instructions. For example, pesticides were applied during high winds or near water, despite directions to the contrary.

Friday, March 20, 2009

Amazon Faces Suit Over Kindle Device
As Originally Posted to The Wall Street Journal









Cable programmer Discovery Communications Inc. filed a lawsuit Tuesday against Amazon.com Inc., claiming Discovery owns a patent to technology used in Amazon's Kindle electronic-book reader.

The suit, filed in U.S. District Court in Delaware, cites a patent to an encryption system for e-books and asks for triple damages as well as a "continuing royalty" on the system.

The popularity of the Kindle, which allows users to download books, contributed to Discovery's decision to bring suit against Amazon rather than against the makers of other e-book readers, such as Sony Corp., people close to Discovery said.

"The Kindle and Kindle 2 are important and popular content delivery systems," Joseph A. LaSala Jr., Discovery's general counsel, said in a statement. "We believe they infringe our intellectual property rights, and that we are entitled to fair compensation."

Amazon declined to comment on the lawsuit. Sony declined to comment on the suit but said that in general it wants its e-book device to be an open platform. Right now, it supports a variety of formats.

The Kindle, released in 2007, is just the latest piece of mobile technology to be the subject of a patent dispute in recent years. "The courts are, as always, trying to keep up with the rapid change in technology. There are a lot of disputes now about what is even patentable," said Edward Reines, an intellectual-property litigator at the law firm Weil, Gotshal & Manges LLP.

The patent named in Discovery's suit, for an "electronic book security and copyright protection system," was filed in 1999 and awarded to Discovery in 2007, according to online records from the U.S. Patent and Trade Office.

In the 1990s, Discovery founder John Hendricks led research at his company into digital delivery of television and book content, filing for several patents in those areas, according to patent-office records. In 2004, the company sold about 20 patents relating to TV to a consortium of cable operators, according to people close to Discovery.

Amazon spent three years developing the Kindle. Part of the Kindle's initial edge over competitors has been its connection, via cellular data network, to the Amazon bookstore, enabling users to browse and buy books directly from the Kindle rather than from a regular computer.

Amazon has been protective of its proprietary e-book format. Last week, the company asked a Web site to take down instructions on how to run a program that could enable a Kindle device to display books from other e-book providers.

Tuesday, January 13, 2009

Dell settles financing, rebate lawsuit with states

As posted by: The Associated Press

SEATTLE — Dell said today it has agreed to a legal settlement with states that claimed the computer company made misleading financing and service offers to PC buyers.

Dell said in a statement it will pay $3.85 million to at least 45 states participating in the settlement. A portion of the money will be used to reimburse states for legal costs.

Shares of Dell dropped 62 cents, or 5.6 percent, to $10.50 in afternoon trading.

Spokesman David Frink said Dell was contacted by the attorneys general from Connecticut and Washington, representing a larger group of states, last year.

"Consumers who sought and believed they received zero-percent financing were then ambushed by high interest rates and fees," said Connecticut Attorney General Richard Blumenthal in a statement. "Many consumers faced unacceptable obstacles obtaining warranty service on their Dell computers and others said they never received promised rebates."

Under the terms of the settlement, Dell agreed to give customers more information up front about what kind of financing they qualify for and allow them to cancel orders once they review final credit terms.

Dell also agreed to mail rebate payments and fulfill warranty obligations within a reasonable amount of time.

The settlement requires Dell to tell customers whether they must troubleshoot problems by phone before qualifying for in-person technical support at home. Dell must also justify claims about its customer service. For example, if it wants to use the term "award-winning," it must have won a customer service award in the past 18 months.

In its statement, Dell said the states' issues "represented only a very small percentage of the tens of millions of Dell consumer transactions in the states."
Round Rock, Texas-based Dell also said it had addressed these problems with many customers directly.

People who bought a computer or service on or after April 1, 2005, and had a problem with a financing offer, rebate or service can file a claim within 90 days with their state attorney general.

Tuesday, December 30, 2008

The Debate Over Who Pays Fees When Litigants Mount Attacks

As posted by: Wall Street Journal

Who should foot the costs of a lawsuit? It's a question that splits the legal world.

Should each side bear its own lawyers' fees and other costs, as they do in the U.S.? Or should the loser pick up the tab for both parties, as they do in Canada, the U.K. and Germany?

The debate simmers across the international divide. In the U.S., the plaintiffs' bar generally cheers the "American rule" status quo, saying it is the only way to ensure that even the poorest litigants can access the courts. Tort-reformers say adopting the "English rule" would cut down on frivolous lawsuits while encouraging defendants to settle meritorious claims.

A recent trade article zeroed in on a long-overlooked component of the loser-pays system: insurance that covers legal fees. That article, penned by Marie Gryphon, an attorney and a fellow with the right-leaning Manhattan Institute's Center for Legal Policy, is reframing the debate.

Canada, the U.K. and Germany use a system of insuring legal expenses so that those with modest resources can still sue. Individuals can buy such insurance as an add-on to their homeowners' policies. If people need to file suit, they know their costs are covered -- even if they lose.

In England, citizens also can buy a more limited kind of "after the event" insurance, which can be purchased by a plaintiff before a suit is filed. Often the premiums are advanced by the plaintiff's lawyer.

Legal experts think a loser-pays system cuts down on frivolous suits. Those clearly hurt the U.S. The nation's tort system cost $245.7 billion in 2003, amounting to about 2.2% of total gross domestic product, according to a report from professional services firm Towers Perrin. The percentage of GDP spent on litigation was at least twice those in the U.K. and Germany.

At the same time, say experts, the insurance helps mitigate the pitfalls of a loser-pays system. "Insurance does move in to fill the gap for those suits that might not otherwise be brought in a loser-pays system," says Paul Lomas, a London-based litigator at Freshfields Bruckhaus Deringer.

When confronted with the insurance arguments, plaintiffs' lawyers largely fall back on objections that a system of contingency fees -- in which they finance the suit in exchange for a cut of their client's potential recovery -- is preferable because it requires no upfront money from the plaintiff. "If we didn't have the contingency-fee system, only people with a lot of money would be able to pursue their rights in court," says Susan Steinman, director of policy for the American Association for Justice, a membership organization of the plaintiffs' bar.

Mark Lanier, a prominent plaintiffs' lawyer who sued Merck & Co. over its painkiller Vioxx, says that under a loser-pays system, people without resources still won't use the system. "Indigent plaintiffs will simply say, 'Sorry, we don't have the money to pay the other side's fees,' " he says. Mr. Lanier says that low-income plaintiffs wouldn't purchase litigation-services insurance, regardless of cost.

But some U.S. academics embrace the idea. "Insurance definitely strengthens the argument for 'loser pays,' " says Richard Nagareda, a professor at Vanderbilt University Law School. Mr. Nagareda says that interest-group politics might explain the suspicion of the plaintiffs' bar toward a loser-pays system. Under the "American rule" and the conventional contingency-fee arrangement, the plaintiffs' lawyer is accustomed to being the exclusive financier of litigation. A move to "loser pays," with the addition of an insurance component, would bring another entity to the table.

In her paper, Ms. Gryphon addresses the concern over making insurance companies the courts' gatekeepers. However, she argues that if a lawsuit is denied insurance coverage, "it would be because it was highly unlikely to succeed, making it the very type of claim that 'loser pays' was designed to discourage."

The U.S. may be a long way from overhauling its system. For now, only Alaska has anything resembling a loser-pays system, though it allows for only partial reimbursement. And some legal experts think that if only a few states adopt "loser pays," plaintiffs would look for ways to sue in other jurisdictions.

The debate in the U.S. -- between tort reform advocates and trial lawyers -- has become polarized between the American rule and a pure loser-pays system, both of which have their problems. But some think combining "loser pays" with an insurance system, as many European countries do, gathers the benefits of both systems and sheds some of the problems.

"It cuts down the middle of what's been a pretty polarized debate," says Mr. Nagareda.