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Class action suit against CPR over TCE leak
Class Action News | 2007/10/03 10:25
The Alberta Court of Appeal has approved a class action lawsuit against Canadian Pacific Railway (CPR) by residents of the Ogden area of Calgary, who are suing CPR for contaminating groundwater in the area with trichloroethylene (TCE). The residents claim that the subsurface contamination is causing toxic vapours to migrate into their houses, and are claiming several million dollars for diminution in property values.

Docken & Company, a Calgary law firm specializing in class action litigation, originally filed the environmental class action lawsuit against CPR in 2005 after TCE was detected in the groundwater underneath the Ogden community. The action, under the case name Windsor v CPR, alleges that the contamination was caused by the use of TCE at CPR's rail yard in Ogden. TCE, a colourless liquid, was used as a solvent for many years to remove grease from metal parts.


Ford struggling to win back sales, share
Business Law Info | 2007/10/03 10:24
Ford Motor's biggest rival, General Motors, has a tentative contract deal with the United Automobile Workers union and relatively stable sales. Ford has neither.

Sales at Ford fell 18.2 percent in September, closing out its 2007 model year on a disappointing note, and analysts say the carmaker's immediate future does not look much brighter. Its biggest new product, the Edge, is already on sale, and its most critical redesign, the F-series pickup, is still a year away from arriving at dealerships.

The Edge, a crossover vehicle that executives said would lead Ford through its turnaround, has surpassed expectations, but almost everything else seems to be coming up short. The chief sales analyst at Ford, George Pipas, said September sales fell short of targets in the company's overhaul plan, known as "the way forward."

"We're not where we want to be," Pipas said Tuesday. But he insisted that the shortfall "doesn't throw us off track for the full year."

Ford's sales have been down every month this year, largely because of planned cutbacks in deliveries to rental car companies. But sales at dealerships have fallen off, too, raising questions about whether the carmaker needs to speed up its turnaround.

"Their market share levels are disappointing," said Bruce Clark, an analyst with Moody's Investors Service in New York. "2008 is going to be challenging from an operating standpoint, and their cash burn will not be inconsequential."

September sales of the Ford Taurus sedan, which Ford introduced this summer with high expectations, were 30 percent lower than those of its predecessor, the Five Hundred. And sales of Ford's sport-utility vehicles have fallen so sharply that the Edge outsold them all last month.

Yet the Edge is not winning many new customers for Ford, because nine out of 10 vehicles most commonly traded in for it are other Ford models, said Tom Libby, senior director of industry analysis at the Power Information Network of J.D. Power and Associates.

Ford is preparing to resume contract talks this week with the UAW, which reached a tentative deal with GM last week after a two-day nationwide strike. The deal, which workers are voting on through Oct. 10, is expected to make GM significantly more competitive with foreign manufacturers like Toyota and Honda.

But as details of the GM deal continue to emerge, analysts are increasingly concerned that a similar deal may not go far enough to help Ford and, to a lesser extent, Chrysler.

GM is in a much healthier position than Ford, Libby said, as September sales illustrated. GM's sales rose 4.5 percent, and its market share jumped to 25.3 percent, from 24.4 percent a year ago, according to the Autodata Corp., an industry statistics firm. Ford's market share fell to 13.3 percent, from 16.5 percent.



Class Action Launched Against Harman
Lawyer Blog News | 2007/10/03 10:18

Notice is hereby given that a class action has been commenced on behalf of an investor in the United States District Court for the District of Columbia on behalf of its client and on behalf of other similarly situated purchasers of Harman International Industries, Inc. ("Harman" or the "Company") (NYSE: HAR) common stock between April 26, 2007 through and including September 24, 2007 (the "Class Period"). Stull, Stull & Brody has substantial experience representing employees who suffered losses from purchases of their employer's stock in their 401(k) plans. If you bought Harman International stock through your Harman International retirement account and have information or would like to learn more about these claims, please contact us.

The complaint charges Harman and several of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"). It is alleged that defendants omitted or misrepresented material adverse facts about the Company's financial condition, business prospects, and revenue expectations during the Class Period. Harman claims to be a leading manufacturer of high-quality, high fidelity audio products and electronic systems for the automotive, consumer and professional markets in the Americas, Europe, and Asia. The Company operates under the brands names Harman Kardon, JBL, Revel, Mark Levinson, Infinity, Lexicon, Soundcraft-Studer, AKG, Becker, and QNX, and is traded on the New York Stock Exchange.

The complaint alleges that on April 26, 2007, the Company announced that it had entered into a contract in which two investment funds affiliated or sponsored by private investment companies, Kohlberg Kravis Roberts & Co. L.P. ("KKR") and GS Capital Partners VI Fund, L.P. ("GSCP") (KKR and GSCP are collectively referred to as the "Purchasing Companies" herein), would merge with Harman (the "Merger"). According to the complaint, the Merger was valued at approximately eight billion dollars ($8,000,000,000).

Specifically, the complaint alleges that, during the Class Period, defendants issued numerous materially false and misleading statements which caused Harman's securities to trade at artificially inflated prices. As alleged in the complaint, these statements were materially false and misleading because they misrepresented and failed to disclose that: (1) the Company had breached the Merger agreement with KKR and GSCP and thus placed the Merger in serious doubt; (2) the Company needed to sustain higher research and development ("R&D") costs primarily related to its automotive platform awards; (3) the Company's inventory was greater than disclosed and was negatively impacting its cash flows; (4) its relationship with DaimlerChrysler had materially worsened; (5) a material adverse change in Harman's business had occurred which related to capital spending; (6) the Company's financial health had generally deteriorated; and (7) as a result of the foregoing, the Company's statements about its financial well-being, earnings, and future prospects were lacking in a reasonable basis when made.

According to the complaint, on September 21, 2007, the Company shocked the market and announced that the Purchasing Companies "no longer intend to complete the previously announced acquisition....KKR and GSCP have informed Harman that they believe that a material adverse change in Harman's business has occurred, that Harman has breached the merger agreement and that they are not obligated to complete the merger." The complaint alleges that this news caused the Company's share price to fall from a closing price of $112.25 on September 20, 2007, to close at $85.00 on September 21, 2007, on unusually heavy volume. Then, on September 24, 2007, the complaint alleges that the Company announced that it would fail to meet its financial guidance for the quarter ended September 30, 2007, and needed to significantly reduce its estimates for the FY 2008. According to the complaint, this news caused the Company's share price to fall to $80.31 on extremely high volume of over 14.5 million shares.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Harman International common stock during the Class Period, which is between April 26, 2007 through and including September 24, 2007. If you purchased or otherwise acquired Harman International common stock during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased Harman International common stock during the Class Period, you may request that the Court appoint you as lead plaintiff no later than November 30, 2007.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 30 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody maintains offices in New York and Los Angeles.



Crack Sentence Gets High Court Review
Legal Career News | 2007/10/02 16:15
A federal judge's decision to slice a few years off a lengthy prison term has brought to the Supreme Court the racially tinged issue of harsh sentences for dealing crack cocaine. Derrick Kimbrough, a black veteran of the 1991 Gulf War, received a 15-year-prison term for selling both crack and powder cocaine, as well as possessing a firearm in Norfolk, Va. Most crack defendants in federal court are black. Federal sentencing guidelines called for a range of 19 years to 22 years in prison, but U.S. District Judge Raymond A. Jackson said the higher range was "ridiculous."

Whether Jackson has the discretion to ignore the guidelines is the issue before the Supreme Court on Tuesday.

A companion case from Iowa also involves a judge's discretion to impose a more lenient sentence in a drug case, although Brian Gall pleaded guilty to conspiracy to distribute ecstasy. In Gall's case, the judge decided probation was sufficient punishment even though the guidelines called for prison time.

Federal appeals courts threw out both sentences, but the justices accepted the defendants' appeals.

The Bush administration is supporting the appeals court rulings, while civil rights and advocacy groups are backing the defendants.

Congressional opponents of the laws establishing more severe sentencing for crack cocaine than powdered cocaine are racially discriminatory because they hit more directly at the black community, where this form of drug abuse is more commonplace.

Advocates for reducing the disparity point to crime statistics that show crack is more of an urban and minority drug while cocaine powder is used more often by the affluent. They say harsher penalties for crack cocaine unfairly punish blacks.

More than four-fifths of crack cocaine offenders in federal courts last year were black, according to the U.S. Sentencing Commission. By contrast, just over a quarter of those convicted of powder cocaine crimes last year were black, the commission said.

Kimbrough actually had much more powder than crack, but it was the latter that determined the length of his prison term.

The 4th U.S. Circuit Court of Appeals in Richmond said judges are not free to impose sentences shorter than the guidelines "based on a disagreement with the sentencing disparity for crack and powder cocaine offenses."

The crack-powder disparity grew out of a 1986 law that was passed in response to violent crimes committed to get money to feed crack habits.

The law includes what critics have called the 100-to-1 disparity: Trafficking in 5 grams of crack cocaine carries a mandatory five-year prison sentence, but it takes 500 grams of cocaine powder to warrant the same sentence.

The U.S. Sentencing Commission, an independent agency within the U.S. judiciary, voted in May to reduce the recommended sentencing ranges for people convicted of crack possession, a step toward lessening the disparity. The recommendation will become effective Nov. 1 unless Congress acts.

At the same time, the commission urged Congress to repeal the mandatory prison term for simple possession and increase the amount of crack required to trigger obligatory five-year or more prison terms as a way to focus on major drug traffickers.

The Supreme Court gave a boost to judges' discretion when it ruled in 2005 that the sentencing guidelines are advisory, not mandatory. The guidelines were adopted in the 1980s to ensure comparable sentences for similar crimes from courtroom to courtroom.



High court says no to new rights for church groups
Lawyer Blog News | 2007/10/02 16:14
The Supreme Court on Monday refused to expand the rights of church groups, turning down appeals in a pair of cases.
In the first case, the justices declined to hear a free-speech claim from an evangelical minister in Northern California who wanted to hold worship services in a public library meeting room. In the second, they refused to hear a freedom-of-religion claim from Catholic Charities in New York, which objected to a state law requiring that employees' prescription drug coverage include contraceptives. The cases were on a long list dismissed on opening day of the court's term.

In the past, the high court has said public officials may not discriminate against "religious speech" by, for example, excluding a church group from meeting in the evening at a high school auditorium that is open to other community organizations.

Lawyers for the Alliance Defense Fund, the Christian Legal Society and the National Assn. of Evangelicals had urged the court to go a step further and rule that officials may not exclude "religious services" from public buildings. They called it unconstitutional to distinguish between "speech" and "services."

They backed an appeal filed by Pastor Hattie Hopkins, who wanted to hold prayer and worship services in a meeting room in a public library in Antioch, northeast of Oakland.

"Religious worship is not a second-class form of expression that the government may ban from a forum generally open for indistinguishable 'secular' expression," said lawyers for Hopkins and the Faith Center Church Evangelistic Ministries.

The issue split the federal courts in California. A judge ruled the library must open its meeting room to Hopkins, but a panel of the U.S. 9th Circuit Court of Appeals disagreed, 2-1.

The 1st Amendment does not require that the library be "transformed into an occasional house of worship," said Judge Richard A. Paez of Los Angeles, a Clinton appointee. There is a difference between "religious speech" and a "sermon," another judge said.

The full 9th Circuit refused to rehear the case, but seven of its judges filed a dissent. The ruling against Hopkins "turned a blind eye to blatant viewpoint discrimination" by singling out "what it calls 'mere religious worship' for exclusion," wrote Judge Jay S. Bybee, a Bush appointee.

By turning down the appeal, the Supreme Court let stand the 9th Circuit panel's decision.

In the New York case, lawyers for the plaintiff said Catholic Charities should not be forced "to finance conduct that the church teaches is sinful."

Besides New York, more than 20 states (including California) have laws that require employers to include contraceptives in drug coverage. Though churches themselves are exempt from the laws, the exemption does not extend to church-related groups.

"If the state can compel church entities to subsidize contraceptives in violation of their religious beliefs, it can compel them to subsidize abortions as well," the lawyers argued.

The justices turned down a similar challenge to California's prescription-drug law in 2004.


Wyatt pleads guilty in Iraq oil case
Court Feed News | 2007/10/02 14:18

Texas oil billionaire Oscar Wyatt, who in the mid-1990s was involved in a land dispute with a group of agencies in Utah, faces up to two years in prison after pleading guilty to paying an illegal kickback to the regime of late Iraqi leader Saddam Hussein in exchange for the right to purchase oil.  The surprise plea, coming in the third week of a trial related to the United Nations oil-for-food program, ends a case that threatened to send the oil man to prison for the rest of his life. He faces 18 to 24 months when he's sentenced Nov. 27.

"I didn't want to waste any more time at 83-years-old fooling with this," Wyatt said after the hearing in Manhattan federal court.

Wyatt was accused of paying millions of dollars to Iraq outside of the 1996 U.N. program, created to allow Iraq to use oil revenue to buy food and medicine, easing the impact of sanctions imposed after its 1990 invasion of Kuwait. The Iraqis were permitted to select the companies that would receive oil.

Wyatt, indicted on five counts, pleaded guilty to one, conspiracy to commit wire fraud. He also agreed to forfeit $11 million.

The U.N. oil-for-food program became corrupted in 2000 when Iraqi officials began demanding illegal surcharges in return for contracts to buy Iraqi oil. The program ran from 1996 to 2003.

During the trial, prosecutors demonstrated that Wyatt had such a close relationship with Iraq that he was able to meet with Hussein in December 1990 to argue for the release of Americans being held as potential shields in the event of a U.S.-Iraq war.

The government insisted that Wyatt later took advantage of that relationship to secure the first contract under the oil-for-food program and to continue to receive oil deals after other American companies were denied access.

Wyatt's defense lawyers argued that their client was an American hero who never knowingly paid surcharges to the Iraqi government to win oil deals.

Wyatt made his early fortune in oil and eventually built a system to collect natural gas burned off in Texas oil wells, enabling him to sell the fuel to homeowners as far away as Utah, Michigan and New England.

Wyatt's ties to Utah run deeper than just selling natural gas. In the mid-1990s, he opposed an initiative put together by competing federal, state and private interests that called for conservation groups to purchase ranches in the Book Cliffs area of eastern Utah.

Those groups - in an effort to improve wildlife habitat and protect land from overgrazing - planned to turn the properties over to the U.S. Bureau of Land Management and the state's Division of Wildlife Resources.

The agencies would then agree to convert federal grazing permits to allow elk rather than cattle on the property.

Wyatt owned some of the ranchland and believed elk were eating forage that should have been feeding his 2,100 head of cattle. He challenged the initiative in court in an effort to outbid the DWR for the grazing permits. He eventually dropped his lawsuit, and the groups put together 500,000 acres for conservation.



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