Recently in Lawsuits Category

The Second Amendment Foundation has filed a federal lawsuit against Westchester County, New York and its handgun permit licensing officers, seeking a permanent injunction against enforcement of a state law that allows carry licenses to be denied because applicants cannot show "good cause."

SAF is joined in the lawsuit by Alan Kachalsky and Christina Nikolov, both Westchester County residents whose permit applications were denied. Kachalsky's denial was because he could not "demonstrate a need for self protection distinguishable from that of the general public." Nikolov's was denied because she could not demonstrate that there was "any type of threat to her own safety anywhere." In addition to Westchester County, Susan Cacace and Jeffrey Cohen, both serving at times as handgun permit licensing officers, are named as defendants. The lawsuit was filed in U.S. District Court for the Southern District of New York, White Plains Division.

Attorney Alan Gura is representing the plaintiffs, along with attorney Vincent Gelardi with Gelardi & Randazzo of Rye Brook, NY. Gura recently represented SAF and the Illinois State Rifle Association in their landmark Second Amendment Supreme Court victory over the City of Chicago.

Under New York Penal Code Section 400.00, handgun carry permit applicants must "demonstrate good cause for the issuance of a permit," the lawsuit alleges. This requirement violates the Second Amendment, according to the plaintiffs.

"American citizens like Alan Kachalsky and Christina Nikolov should not have to demonstrate good cause in order to exercise a constitutionally-protected civil right," noted SAF Executive Vice President Alan Gottlieb. "Our civil rights, including the right to keep and bear arms, should not be subject to the whims of a local government or its employees, just because they don't think someone 'needs' a carry permit. Nobody advocates arming criminals or mental defectives, but honest citizens with clean records should not be denied out of hand."

"Thanks to our recent victory before the Supreme Court," Gottlieb stated, "the Second Amendment now applies to state and local governments. Our lawsuit is a reminder to state and local bureaucrats that we have a Bill of Rights in this country, not a 'Bill of Needs'."

The case is filed as Kachalsky v. Cacace, U.S. Dist. Ct. S.D. N.Y. 10-05413

The Second Amendment Foundation (www.saf.org) is the nation's oldest and largest tax-exempt education, research, publishing and legal action group focusing on the Constitutional right and heritage to privately own and possess firearms.  Founded in 1974, The Foundation has grown to more than 650,000 members and supporters and conducts many programs designed to better inform the public about the consequences of gun control. 

Consumers nationwide demand a refund saying they overpaid for certain hi-tech devices

Consumers won a victory in their fight against a group of technology companies including Sony (NYSE: SNE), Hitachi (NYSE: HIT) and Philips (NYSE: PHG), who are accused of fixing prices of optical disc drives (ODD) common in computers, DVD and Blu-Ray players among other devices.

In a ruling on June 24, Judge Walker rejected a motion to postpone evidence gathering for a class-action lawsuit filed by consumers while the defendants address criminal charges. The judge's ruling allows the attorneys representing consumers to continue to build the case against these corporations that dominate the ODD market. 

Published reports state that ODD manufacturers sell 313 million drives a year for use in personal computers, and another 200 million for other applications, with revenue topping $45 billion between 2004 and 2008, and estimated at $14 billion for 2010.

Individual losses vary depending on the number of ODDs purchased, but attorneys believe the amounts are significant. "We intend to prove that the defendants conspired to inflate and sustain prices of ODDs simply to increase profit, all at the expense of consumers," said Steve Berman, founding partner of Hagens Berman and lead attorney representing consumers.

"While the Department of Justice is working on the criminal investigation, we think it is vitally important for us to push forward with our civil class action," said Berman. "While one of the goals of the criminal action is to punish the guilty, our goal is solely to return what we believe are ill-gotten profits to the pockets of consumers."

The relatively small numbers of ODD manufacturers, including the defendants, have a long history of joint ventures and other close working arrangements that gave ample opportunity to share information, the complaint states.

Berman said that the high cost of entry into the ODD market adds to the tight control the defendants have over the ODD marketplace. "When you can lock out competition, it makes it much easier to artificially - and illegally - set prices and bar competition."

Earlier this month, the Department of Justice (DOJ) asked the court to postpone Hagens Berman's efforts to collect evidence, saying the actions could interfere with its criminal investigation. The court's ruling allows the civil case to continue forward parallel to the criminal investigation.

"The court's decision supports our belief that consumers' claims are as important as the criminal investigation and that our prosecution of those claims can commence alongside the DOJ investigation," Berman added.

Some of the defendants have been involved in the DOJ investigations on related issues in the past. Samsung, for example, paid a $300 million fine following claims of price fixing involving Dynamic Random Access Memory chips (DRAM). Hagens Berman was lead counsel in the DRAM litigation.

The DOJ also launched an investigation of Samsung, LG Electronics, Toshiba and Hitachi, among others, probing claims of collusion in the manufacture of liquid crystal displays. The ongoing criminal investigation has led to admissions of guilt by LG Electronics, who paid a $400 million fine and Hitachi who paid $31 million.

On Monday, October 26, 2009, Toshiba Samsung Storage Technology Corp., a joint venture between defendants Toshiba and Samsung Electronics; Hitachi-LG Data Storage, a joint venture between defendants Hitachi and LG Electronics; and Sony Optiarc America confirmed that they received subpoenas from the DOJ concerning a criminal antitrust investigation including possible price fixing charges. In Philips Electronics' 2009 annual report issued a few weeks later, the Dutch electronics company also disclosed it was a subject of the same investigation. 

Since the investigation was launched, the defendants have been the subject of a grand-jury investigation. "Rarely does the Department of Justice go to the extent of convening a grand jury unless they have solid reasons to believe that a crime has occurred," Berman added.

Under antitrust law, customers who can prove that they have been overcharged as a result of price fixing may collect damages worth three times the amount of the overcharge. Attorneys intend to prove that the defendants in the ODD case agreed to manipulate prices and overcharged consumers for certain devices. 

Hagens Berman is representing consumers who purchased ODD devices after November 1, 2005. Consumers interested in tracking the progress of the case can view court documents and relevant updates at www.hbsslaw.com/ODD.

Parties to the settlement reached among the WTC Captive Insurance Company (the "WTC Captive"), the City of New York, the contractors the City hired, their subcontractors, and attorneys for over 10,000 plaintiffs alleging injuries from the WTC site operations addressed Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York today regarding the amended settlement that was announced June 10, 2010. 

Judge Alvin K. Hellerstein opened the proceedings, and interjected during the parties' presentations to clarify how the settlement values claims: "People were compensated [based] on two key criteria.  How serious, objectively speaking, objectively quantifiable, is the disease, and what is the general relationship between the disease and their work at the site."

The Judge emphasized that the settlement process values each individual claim, unlike class actions, where plaintiffs divide the settlement proceeds equally: "This is not a class settlement but a series of individual settlements, each plaintiff having an individual stake."

The settlement will cost the taxpayer-funded WTC Captive $625 million in cash at the required 95% plaintiff participation, with an additional $87.5 million paid if certain conditions are met, totaling up to $712.5 million.  Plaintiffs' attorneys are voluntarily reducing their fees to 25% and waiving entirely their fees on certain other aspects of the settlement, resulting in savings to plaintiffs of over $50 million.  Plaintiffs will have 90 days to opt into the settlement, unless that period is extended.

Plaintiffs were expected to address the Court in the afternoon session.  Suzanne Conroy, whose husband Daniel worked at the WTC site and died, according to her claim, from an illness caused by his exposure there, wrote a letter to the Court praising the settlement.

"...I strongly feel that this settlement is fair and reasonable," Ms. Conroy wrote.  "Lastly, I would like to state that this settlement is great because people do not have to prove that their injuries were a direct cause of their toxic exposure."  

Kenneth R. Feinberg, who was appointed Claims Appeal Neutral over the Settlement Process Agreement, addressed the Court by video hook-up, saying he will be fully engaged in his role overseeing appeals by plaintiffs of their compensation awards.  Mr. Feinberg listed several reasons why the court should approve the settlement, noting it was an improvement on the 9/11 Victim Compensation Fund by guaranteeing each person a minimum payment, making payments more quickly, and establishing a process for valuing each claim objectively.

"The final reason I would approve the settlement is because, what is the alternative?  These eligible plaintiffs have waited and waited and waited and if they litigate they will continue to wait," Mr. Feinberg said.  "When you consider the alternative, more litigation, uncertainty of result, I have no problem urging that the Court approve this settlement and it be implemented as soon as possible."

Paul J. Napoli, a senior partner at the law firm Worby, Groner, Edelman & Napoli, Bern, LLP, which is representing over 9,000 litigants, addressed the Court regarding the difficult negotiations that lasted over two years but, he said, resulted in the "best possible" outcome.

"After seven long years of hard-fought litigation and negotiations, we have finally achieved a settlement of historic proportions and significance," Mr. Napoli said.  "These brave men and women, heroes of 9/11, will receive the compensation to which they are entitled.  They will no longer be subjected to months and years of further discovery and will finally have closure."

Mr. Napoli described a range of payments from $3,250 for plaintiffs filing a legal claim for fear of cancer to over $1 million for asthma severe enough to permanently disable the claimant.

Nicholas Papain, managing partner of Sullivan Papain Block McGrath & Cannavo, P.C., attorneys for nearly 700 New York City firefighters and 9/11 rescue and recovery workers, said his firm has fully explained the terms of the settlement and the procedures that will be utilized to calculate the settlement sums to be awarded to his clients through several communications and town hall meetings attended by the majority of his clients: "Based on the questions and comments from our clients, we believe they have a sound understanding of the settlement terms and believe it to be the best and most effective way to resolve their claims and receive reasonable compensation for their losses."

"A trial, if they get past the motions to dismiss, will cost more than the money being put into the settlement," Mr. Papain told the Court.  He noted that if 95 percent of the plaintiffs do not opt in, the taxpayer funded WTC Captive would be required to use that money "not to pay claims but to defeat those claims."

James E. Tyrrell, a partner at Patton Boggs, LLP and attorney for the settling defendants, listed the defenses that would be available to the defendants if plaintiffs decide not to "opt in" to the settlement process, making the litigation process costly, lengthy, and uncertain.  He explained how the settlement valued the strength of each plaintiff's legal case based on their likelihood of success at trial, which, for some, was unlikely.

"If these cases go to trial, the defendants can and will assert the defenses available to them.  They too came to the aid of the people of New York and all they have to show is that they acted with reasonable care under the circumstances," said Mr. Tyrrell. "Exposure to dust at the WTC site is not enough to prove that an alleged injury or illness was caused by that exposure.  The plaintiffs will bear the burden of proving that a specific exposure occurred and caused the alleged injury to a 'reasonable degree of medical certainty.'  Frankly, that means the road to resolution in this case for those who do not accept this settlement will be long, difficult, costly, and uncertain.  That said, the WTC Captive does not want to spend its money on continued defense costs, but rather on compensating these claims."

Mr. Tyrrell said it could take one to two years, if not longer, for the first of the trials to begin.  Moreover, if the City and contractors prevail in their argument that state and federal laws make them immune from lawsuits stemming from the performance of such recovery operations, the claims may be dismissed and never reach a jury.

Margaret H. Warner, a partner at McDermott Will & Emery, LLP, who represents the WTC Captive and was the lead negotiator of the settlement, explained why claims of certain illnesses, like hard-cell or skin cancers, were paid less than other illnesses like asthma.  Ms. Warner said that many of the alleged illnesses were medically unlikely to have been caused by any exposures at the WTC operations sites.

"We believed that based on the principles of fairness and justice, the most money should go to those most injured, whose injury is most causally related to 9/11," said Ms. Warner.  "Every effort was made here to find a mechanism to provide compensation.  This settlement avoids the necessity of each plaintiff proving causation, but we valued claims higher that were more plausibly related."

Michael Cardozo, Corporation Counsel of the City of New York, told the Court the City strongly supports the settlement because it provides certain and swift payments as opposed to the uncertainty of litigation.  Mr. Cardozo listed the additional benefits the City already provides and will continue to provide to most of the plaintiffs, including medical monitoring and health care services through the three Centers of Excellence, currently serving over 13,000 people, with no out-of-pocket costs.

"It is our hope and desire that this settlement will help to heal the rift between the heroes who performed so nobly for their country at Ground Zero and the City and the companies that provided essential services to the public when New Yorkers and all Americans most needed them," Mr. Cardozo told the Court.  "All the pensions, benefits and medical care that are being provided from the City to many of these plaintiffs will continue with or without the settlement."

In addition, while the law allows payments from workers' compensation awards to be repaid from the tort settlement proceeds by enforcing what is called a "lien" on the settlement money, in this case, the City of New York and its WTC workers' compensation insurer, which holds some of those liens, have agreed to waive them.  For many of the plaintiffs, this waiver means their settlement payments will be free and clear of liens and their workers' compensation benefits will continue in the future with no deductions.  Mr. Cardozo said this would mean an additional $20 million in value to those opting in to the settlement. 

Civil rights attorney Waukeen McCoy received a favorable ruling from the Ninth Circuit Court of Appeals this week, reversing Judge Susan Illston's sanctions because the District Court violated his constitutional right to due process of law.

In 2007, after a 5-year fight with FedEx, McCoy's clients - Edward Alvarado, Pernell Evans and Charlotte Boswell - received jury awards in the amount of $500,000, $975,000, and $3,000,000 respectively.  Also in 2007, McCoy achieved a $55 million settlement in a class action law suit against FedEx.

In December 2009, Judge Susan Illston, sanctioned McCoy $25,000 because she alleged "Mr. McCoy attempted to avoid rigorous scrutiny of his reported hours," claiming that McCoy submitted false time records for statutory attorney's fees.  Alvarado et al v. FedEx (3:04-cv-00098-SI)

However, on June 17, 2010, the Ninth Circuit reversed Illston's sanctions with prejudice and remanded the case back to the District Court, handing down an additional blow to FedEx.  The Court found that the sanctions imposed by Judge Ilston were "criminal in nature" because they were "intended to punish McCoy for his conduct and to vindicate the court's authority and integrity of the judicial process, not to compensate FedEx for losses sustained or to coerce McCoy into compliance with a court order."

A point of contention in the matter was whether McCoy filed false declarations of his time records, which are used in the Court's assessment of attorney's fees.  According to McCoy, it would have been impossible to submit contemporaneous time records for the three prevailing parties - Alvarado, Evans and Boswell - because the matter originated as a multi-plaintiff case in which McCoy represented 24 FedEx employees.  The majority of McCoy's legal preparation was for the group benefit as a whole rather than one plaintiff in particular.  At no time did McCoy attempt to mislead the Court by claiming that he kept contemporaneous time records.  

When one party files false declarations, the opposing party may file a Rule 11 motion to request that the Judge impose sanctions.  To challenge McCoy's time records filing, FedEx ignored this established remedy, which would have allowed McCoy to respond or correct the problem. Instead FedEx filed an Inherent Powers motion which allowed Judge Ilston to bypass the Federal Rules of Civil Procedure to impose sanctions and deny McCoy his due process.  

McCoy avers that Judge Ilston maintains a personal vendetta against him.  Despite lacking customary justifications for choosing to seal documents, Ilston selectively sealed only documents related to the payments of attorneys' fees and the amount of money the class representatives received in Satchell, a related case. McCoy calls for more transparency in the Court's records so that the public can witness the District Court's abuse of power.  

SOURCE Law Offices of Waukeen Q. McCoy

Tuesday's record-setting 82.5 million dollar verdict in Harris country for the death of a single man killed by a Cleburne natural gas explosion could be the beginning of a trend.

Houston explosion attorney Rob Ammons believes some juries are doing what federal regulators can't do, hitting big business where it hurts when they don't prioritize worker and environmental safety over profits.

"In the wake of two recent Texas natural gas line explosions and the spill in the Gulf, I believe people are sick and tired of the mess," says Houston explosion attorney Rob Ammons. "When companies prioritize profits over responsibility, safety and respect for the environment, I think juries are going to push back in the only way they can -- by awarding precedent-setting verdicts for hard working claimants."

Joshua Wade Petrie, 27, was attempting to start a hot oil heater May 25, 2007, when the heater exploded. A day later the man died, leaving behind a widow, Candee Petrie, and three minor children. Mr. Petrie's father, Mark Petrie, was also a claimant.

Petrie's attorneys, Rob Ammons and Bennett Midlo of the Houston-based Ammons Law Firm argued in court the natural gas processing plant and its equipment were negligently refurbished, as Hanover had agreed to do.

"Hanover Compression sold the gas processing plant in Hood County to Quicksilver Resources in March of 2005," says Ammons. " Hanover was supposed to fully refurbish the plant and the hot oil heater. Hanover failed to refurbish and upgrade the heater to the applicable current industry standards and that is what caused the explosion."

The trial in Judge Robert Schaffer's Harris County Judicial District Court #152 encompassed the three-year anniversary of Petrie's death.

Rob Ammons is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization, in addition to being Board Certified in Civil Law by the National Board of Trial Advocacy.  Rob Ammons' law practice, The Ammons Law Firm, is located in Houston, Texas.  The Ammons Law Firm practice is exclusively personal injury law, handling such cases as: tire defects, oil rig explosions, truck accidents, plant explosions, refinery accidents, wrongful death, post-collision fires, seat belt defects, airbag defects, SUV rollovers and workplace negligence.

Prime Healthcare Services (PHS) recently settled its long standing dispute with the Department of Managed Health Care (DMHC) related to a single instance of alleged "balance billing" as to Kaiser commercial enrollees.  At the time, "balance billing" was not illegal.  PHS' hospitals do not "balance bill," did not and do not report HMO enrollees to credit reporting agencies, and never collected a penny from the alleged "balance billing."  However frivolous the lawsuit, PHS felt it was in the best interest of all involved, including the taxpayers of the State of California, to resolve this matter.  The donations to community clinics provided for in the settlement are part of PHS' long standing commitment to community clinics.  PHS has already donated hundreds of thousands of dollars to community clinics and operates three free clinics in the Inland Empire.  The donation of $600,000 to the community clinics and $600,000 to the Prime Healthcare Services Foundation for the development of community clinics is but a small portion of PHS' planned charitable giving in 2010.  PHS' hospitals provided more than $120 Million in charity care to the uninsured and indigent in 2009 and PHS' founder, Dr. Prem Reddy, has donated hundreds of millions of dollars to charity.

Now that no "balance billing" is the law (which PHS supported so as to keep patients out of the middle of disputes between HMOs and providers), the root cause of balance billing (i.e., unfair payment practices by HMOs) must be addressed.  Unfortunately, the DMHC and its Director, Lucinda Ehnes, have done nothing to address the unfair payment practices of HMOs.  To the contrary, Director Ehnes has used her tenure as Director of the DMHC to create a "safe haven" for HMOs and their unfair business practices.  A culture has developed at the DMHC where HMOs feel protected and free to commit unfair payment practices knowing that the DMHC will take no action.  This leaves the providers on the frontline of healthcare delivery (hospitals and emergency physicians) to fall victim to the HMOs' unfair practices.  In these economic times where the ranks of the uninsured seeking care in emergency departments is ever increasing, the escalating abusive practices of HMOs are putting the already fragile healthcare safety net at risk of failure.  Many hospitals are financially faltering and closing their doors as a result.  The department that is supposed to curb these abusive practices has gone "native" and become the protector of HMOs.  If the DMHC does not take action to address such unfair practices, the healthcare safety net will be threatened.

PHS is the largest for profit hospital system in California and was recently ranked among the Top 10 Health Systems in the Nation by Thomson Reuters for quality patient care.  PHS is the only for profit system to receive this recognition and the only health system west of the Mississippi to be among the Top 10.

"Anatomy of a Scandal" ,the cover story of ai5000's March/April issue, addresses the mystery of why Wesleyan University's $500 million endowment failed to notice the alleged gross misconduct of its chief investment officer for close to a decade.

Wesleyan has initiated a $3 million lawsuit against its terminated CIO, Thomas Kannam, who stands accused of submitting questionable expense reports and using university resources to engage in a series of outside ventures.

"To a large extent, this story highlights a common aberration in our nation's financial system, of which Wesleyan is just an example," observed editor Kip McDaniel. "Even when alleged misconduct is practiced in plain sight, investors don't want to look too closely at the sausage-making if the individual in question is making money for us."

Paula Vasan, co-writer of the article, added, "Although the case has yet to be decided, it appears to us that neither Wesleyan nor Mr. Kannam is blameless. The evidence suggests that Wesleyan may have looked the other way, so long as it was convenient to do so."

ai5000 describes how Kannam signed a contract in 2005 agreeing not to participate in "distracting" outside business opportunities, and soon thereafter appeared to accelerate his entrepreneurial ventures. The university's lawsuit contends that Kannam expensed family trips to the university and used university staff for external ventures. Two years later, Wesleyan noticed Kannam's "extracurricular activities" and asked him to sign a "more robust" conflict-of-interest document. His wife's response to this request: "Oucheroo." Nevertheless, ai5000 reports that

this document was "impressively vague." Ultimately, under Kannam's supervision, the endowment lost 24% in 2008, well beyond the NACUBO average of -19%.

"One of the sad aspects of this case is that the trustees and administrators of the endowment are involved in doing good and likely assume that anyone who works for them has the same mindset," McDaniel commented. "Unfortunately, laissez-faire environments don't always bring out the best in people, regardless of the larger institution's admirable intentions."

A quarterly online publication, ai5000 focuses on the 5,000 largest pools of capital in the world, across pension plans, sovereign wealth funds, endowments, foundations, insurance funds and other leading institutional investors. ai5000 is edited by Charles Ruffel, founder of Asset International and PLANSPONSOR, PLANADVISER and Global Custodian.

Asset International is a privately-held publisher and information provider to global pension funds, asset managers, financial advisers, banking service providers, and other financial institutions in the private and public sector. Asset International produces and distributes print and digital publications, conferences, research and data resources via its industry-leading brands PLANSPONSOR, PLANADVISER and Global Custodian. The company was acquired in January 2009 by Austin Ventures and has offices in New York, London and Stamford, CT.

Consumer advocate Harvey Rosenfield has filed a lawsuit in Sacramento Superior Court urging the court to remove false and misleading statements that Mercury Insurance Company has made in its ballot arguments that will appear in the Official Voter Guide for the June ballot.

Mercury is the sponsor of Proposition 17, the controversial initiative that "will allow insurance companies to increase cost of insurance to drivers who do not have a history of continuous insurance coverage," according to the ballot summary that Attorney General Jerry Brown has proposed to include in the Voter Guide.

"Mercury Insurance Company is attempting to put one over on the voters of California and this Court," the lawsuit says. "Mercury and its surrogates are entitled to use the space allotted to them in the official Ballot Pamphlet to make the most persuasive case they can in support of the initiative...But the law does not allow Mercury to use the official Ballot Pamphlet to propagate false and misleading statements regarding either the terms of its proposed initiative or the state of existing law. And that is exactly what Mercury has done..."

The 202-page lawsuit identifies numerous false and misleading statements made by Mercury's ballot signers. For example, responding to criticism of Prop 17 by military vets and USAA, an insurance company that serves the armed forces, Mercury claims in its argument that soldiers living stateside are exempted from Prop 17's surcharges, and that California consumers are currently charged using the "continuous coverage" factor that Prop 17 is promoting. These assertions are false, as explained in a brief summary below. The lawsuit can be downloaded at: http://www.consumerwatchdog.org/resources/RosenfieldProp17Suit.pdf

Prop 103, the 1988 insurance rate rollback and regulation measure, bans the surcharge Mercury is now asking voters to approve. The lawsuit details how Mercury Insurance and its chairman George Joseph first flouted Proposition 103, then tried to override it with legislation nearly identical to Prop 17. Each time, the state Insurance Commissioner and the courts rejected the same arguments contained in Mercury's Prop 17 ballot arguments, and concluded that the proposal would raise premiums for many motorists. (Recently released internal reports by the California Department of Insurance confirm that Mercury violated the law.)

"We already knew this corrupt insurance company would spend tens of millions of dollars to lie to voters about Prop 17 - it spent $3.5 million just to stick the measure on the June ballot," said Rosenfield. "Now Mercury is trying deceive the voters through devious lies in court and in the official state Voter Guide - Mercury wants to mislead voters at taxpayers' expense."

Accuracy of Voter Guide Key as Mercury Spends Millions on Deceptive Campaign

The Voter Guide contains official analyses of each ballot measure prepared by the Attorney General and the Legislative Analyst (which reports to the state legislature). It also contains arguments and rebuttals prepared by supporters and opponents of each initiative. The Guide is produced by the Secretary of State and mailed to registered voters at taxpayer expense. The Voter Guide is considered one of the most important sources of accurate information concerning ballot propositions. The truthfulness of statements about Prop 17 in the Voter Guide will be crucial because Mercury is expected to spend millions on deceptive radio and television advertising, consumer advocates say.

The challenge to Mercury's ballot arguments will be heard by Sacramento Superior Court on March 12th in conjunction with two other Prop 17 lawsuits: one filed by Mercury's campaign against Rosenfield, Elisa Odabashian of Consumers Union, former Attorney General John Van de Kamp, former Insurance Commissioner John Garamendi, and Jon Soltz, chair of VoteVets.org, who signed the ballot arguments against 17; and a second lawsuit filed by Attorney General Jerry Brown to correct and strengthen the official Prop 17 Title and Summary that will appear in the voter pamphlet. Mercury is expected to oppose the correction.

Fred Woocher of the Los Angeles-based law firm Strumwasser and Woocher is representing Harvey Rosenfield and other opponents of Prop 17 in the suits.

A copy of the lawsuit can be downloaded at: http://www.consumerwatchdog.org/resources/RosenfieldProp17Suit.pdf

Examples of false and misleading statements challenged by Rosenfield's lawsuit:

Impact on the military. Prop 17's surcharge for drivers who have not had five years of continuous insurance coverage has a limited exception for only those soldiers who are "absent from the United States while in military service." Soldiers serving the country on base in the states are not exempt, even though they might not need to have and pay for automobile insurance while on base. Nonetheless, the Rebuttal Argument falsely claims that the ballot measure exempts soldiers who "cancel insurance when serving overseas or in another state" from its surcharges. When Mercury sponsored SB 841 in 2003 to allow the same surcharge against California motorists, it included an exemption for soldiers serving in other states. But Prop 17 has no such protection for stateside soldiers.

Current law. Prop 17 creates a new rating factor in order to circumvent the consumer protections of current law and surcharge many good drivers in California. But throughout its ballot arguments, Mercury pretends that the new rating factor it proposes to create, "continuous coverage," already exists under current law. The Argument in Favor of 17 states: "Under current law, drivers who have maintained auto insurance with the same company are eligible for a continuous coverage discount." This is untrue. The language of Proposition 17 itself states that it creates a new rating factor "in addition to" and "notwithstanding" current law. Mercury is falsely equating discounts for motorists who remain with the same company for a period of years, which are permitted under Proposition 103, with a new rating factor the company wants to use to base premiums on whether or not people can show they have been continuously insured by any company with no lapses over 90 days over a five year period and have had no missed payments. Mercury has made the same false statements in previous court cases, and the courts have consistently rejected Mercury's effort to equate the two.

Surcharges. Mercury's ballot Argument in Favor claims that "Yes on 17 eliminates an existing surcharge for changing companies" and its Rebuttal says that Prop "17 would allow drivers to take your continuous coverage discount with you." There is no existing surcharge for changing companies, and there is no existing "continuous coverage discount." Mercury's claims are false. Prop 17 would create a surcharge on good drivers who have not had five years of continuous auto insurance and would override Proposition 103's ban on surcharges against the previously uninsured or those who have had a lapse in coverage, even if these motorists are good drivers.

SOURCE Campaign for Consumer Rights

Stephen Harbeck, president of the Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, issued the following statement today:

"From the outset of the Bernard L. Madoff Investment Securities LLC  (Madoff) liquidation proceeding, the Securities Investor Protection Corporation has made it clear that our No. 1 goal is to make sure that every eligible Madoff investor receives every penny that he is or she is entitled to receive per the recovery process.

"We have a great deal of empathy for the Madoff victims.  That is why we have worked around the clock for more than a year to expedite this matter despite the unprecedented complexities arising from the web of deceit spun by Mr. Madoff.   Our concern for the victims was also the reason why we worked with  Irving H. Picard, the court-appointed trustee for the Madoff liquidation, to establish a special hardship procedure for particularly hard-hit victims requiring special attention.

"That is why we are disappointed to see that certain attorneys are exploiting the plight of these victims to incorrectly direct their anger and frustration at SIPC.   Sadly, this frivolous litigation will have the effect of making it harder for SIPC to focus all of its time and attention on aiding the Madoff victims.

"That being said, SIPC is not now and never was a FDIC-like 'insurance' entity.  

"Regarding the question of 'net equity', which the United States Bankruptcy Court for the Southern District of New York is now weighing, we firmly believe that the calculation being used by Irving H. Picard, the court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities LLC of New York, NY, is correct.

"This determination is completely consistent with past precedent on the matter.

"SIPC has filed two extensive briefs with the Court, which explain our position in detail. At this time, we are awaiting the court's ruling on the matter. We look forward to the decision resolving this matter."

SIPC's primary brief in the United States Bankruptcy Court for the Southern District of New

The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customer cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.

The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities - such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims of each customer up to a maximum of $500,000. This figure includes a maximum of $100,000 on claims for cash. From the time Congress created it in 1970 through December 2008, SIPC has advanced $520 million in order to make possible the recovery of $160 billion in assets for an estimated 761,000 investors.

SOURCE Securities Investor Protection Corporation, Washington, D.C.