United Airlines pilots file race bias suit over promotion issue

CHICAGO, Wed May 30, 2012 – Two dozen black pilots have alleged in a lawsuit that United Continental Holdings, the parent of United Airlines, passed them over for management promotions because of race.

The world’s biggest carrier denied the allegations and said it would fight them in court.

The veteran aviators alleged a long history of discriminatory behavior across multiple U.S. states. Their suit was filed in the U.S. District Court for the Northern District of California in San Francisco.

“The struggle for inclusion at United Airlines is a long-standing issue that many have tried to address over a long period of time,” Captain Leon Miller, a plaintiff, said in a statement.

Most of those involved in the suit worked for pre-merger United. The complaint specifically addresses promotion issues dating to 2009.

Additionally, nearly half of the plaintiffs were part of a 2010 federal equal employment racial discrimination case against United, and are claiming the carrier has punished them by withholding promotions and special assignments.

United said in a statement that it does not tolerate harassment or discrimination.

“We believe this lawsuit is without merit and will vigorously defend ourselves,” the airline said.

Major pension fund to vote against Wal-Mart board

BENTONVILLE, Ark, Tue May 22, 2012 – The second largest U.S. public pension fund said on Tuesday it plans to vote all of its Wal-Mart Stores Inc shares against the board in the wake of bribery allegations in Mexico that Wal-Mart officials failed to fully investigate.

California State Teachers’ Retirement System, or CalSTRS, has already sued current and former Wal-Mart executives, saying allegations the company paid millions of dollars of bribes in Mexico and a cover-up by Wal-Mart officials raised the question of whether top executives should remain in place.

The allegations “indicate a breakdown of corporate governance and lack of oversight that should have averted this situation,” CalSTRS said in a statement.

CalSTRs added it “does not have confidence the current board has the independence and leadership needed to address these difficult issues.”

CalSTRS plans to vote its 5.3 million Wal-Mart shares against the re-election of all board members and encouraged other shareholders to do the same.

The $153.7 billion pension fund has said as an index investor, it is required to hold shares of the retailer, which is a component of the Dow Jones industrial average and many indexes.

Shares of Wal-Mart were up 0.8 percent at $63.53 in late-morning trading after rising to $63.55, their highest level in more than 10 years, earlier in the session.

FDIC sues group of big banks over mortgage debt losses

WASHINGTON, Tue May 22, 2012 – The U.S. government has filed three lawsuits against a group of large banks over losses on soured mortgage debt purchased by two small Illinois banks that failed in 2009.

Acting as receiver for Citizens National Bank and Strategic Capital Bank, the Federal Deposit Insurance Corp. sued a number of banks including Bank of America Corp., Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co.

Seeking a combined $92 million, the lawsuits accuse the banks of misrepresenting the risks of residential mortgages they packaged into securities, causing losses for investors once the poor quality and defective underwriting became evident.

The lawsuits were filed on Friday by the law firm Grais & Ellsworth, which has filed many such lawsuits for other clients over residential mortgage securities.

Two FDIC lawsuits were filed in Manhattan federal court and seek a combined $77 million, while a third filed in Los Angeles federal court seeks $15 million.

Bank of America and Citigroup are the only banks named as defendants in all three cases. Deutsche Bank and JPMorgan are defendants in two cases, and Ally Financial Inc., Credit Suisse Group AG, HSBC Holdings Plc., Royal Bank of Scotland Group Plc., UBS AG in one.

Bank of America spokesman Bill Halldin, Citigroup spokesman Scott Helfman and Deutsche Bank spokeswoman Renee Calabro declined to comment. Spokespeople for JPMorgan did not immediately respond to requests for comment.

David Grais, a lawyer representing the FDIC, declined to comment, as did FDIC spokesman David Barr.

Citigroup CEO Pandit and directors sued over executive pay

NEW YORK, Fri Apr 20, 2012 – Days after being rebuked by shareholders, Citigroup Inc. CEO Vikram Pandit and the bank’s directors have been sued by a shareholder accusing them of awarding outsized pay to top executives.

The complaint, filed Thursday in Manhattan federal court, said directors breached their fiduciary duties by awarding more than $54 million of compensation in 2011 to the executives, including $15 million to Pandit, though the bank’s performance did not necessarily justify it.

At Citigroup’s annual meeting on Tuesday, about 55 percent of shareholders participating in an advisory vote rejected Pandit’s pay package. That marked the first time that investors had rejected a compensation plan at a major U.S. bank.

That vote “has cast doubt on the board’s decision-making process, as well as the accuracy and truthfulness of its public statements,” said the complaint, brought by shareholder Stanley Moskal. “Absent this (lawsuit), the majority will of the company’s stockholders shall be rendered meaningless.”

Citigroup spokeswoman Shannon Bell said the lawsuit is without merit and that the bank will seek its dismissal, “consistent with court rulings in similar cases.”

“The board takes the shareholder vote on executive compensation very seriously and will consult with representative shareholders to better understand their concerns,” she added.

DOJ may sue Apple over ebooks as early as today, sources say

WASHINGTON/SAN FRANCISCO, Wed Apr 11, 2012 – The Justice Department could sue Apple Inc. as early as today over alleged electronic book price-fixing, while settling with several publishers as early as this week, two people familiar with the matter said.

The Justice Department is investigating alleged price-fixing by Apple and five major publishers: CBS Corp’s Simon & Schuster Inc.; HarperCollins Publishers Inc.; Lagardere SCA’s Hachette Book Group; Pearson and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH.

A lawsuit against Apple, one of the parties not in negotiations over a potential settlement, could come as early as Wednesday but no final decision had been made, the people said.

Apple declined to comment. The Justice Department and the five publishers could not be reached for comment.

The Justice Department is investigating whether deals Apple cut two years ago with the quintet of major publishers – when the consumer electronics maker launched its iPad tablet computer – were done with the intent of propping up prices for digital books, sources have said.

As part of those agreements, publishers shifted to a model that allowed them to set the price of e-books and give Apple a 30 percent cut of sales, the sources have said.

Talks between the Justice Department and some publishers had been proceeding, with settlements expected as soon as this week, one of the two sources familiar with the matter said on condition of anonymity, because the discussions were not public.

U.S. court rules that drugmaker Pfizer can face asbestos suits

NEW YORK, Tue Apr 10, 2012 – A federal appellate court ruled on Tuesday that drugmaker Pfizer can face asbestos liability suits in state court over products once manufactured by a bankrupt subsidiary, dragging out a dispute that has already lasted more than 30 years.

At issue is insulating products made by Pfizer unit Quigley Co. Inc. that contained asbestos. Quigley, which Pfizer bought in 1968, at one time faced suits by more than 160,000 plaintiffs. It filed for bankruptcy in 2004.

Pfizer reached a deal that year with lawyers representing more than 80 percent of claimants, which provided for about $430 million in settlement payments. Quigley filed for bankruptcy protection as part of that arrangement, which was aimed at resolving cases dating back to the late 1970s.

The bankruptcy court later ruled that an injunction it issued in the case stayed some suits that were still pending against Pfizer. In May 2011, a federal judge in New York reversed that order, and the U.S. 2nd Circuit Court of Appeals upheld that ruling Tuesday.

The suits in question were filed starting in 1999 by plaintiffs’ lawyer Peter Angelos in Pennsylvania state court. Angelos, one of the best-known asbestos lawyers in the country, also owns the Baltimore Orioles baseball team.

BP: U.S. hiding evidence on size of Gulf oil spill

NEW ORLEANS, Fri Mar 30, 2012 – BP Plc has accused the U.S. government of withholding evidence that may show the 2010 Gulf of Mexico oil spill was smaller than federal officials claimed, a key issue in determining the oil company’s liability.

A reduction in the size of the spill would lower the maximum civil fine BP could be forced to pay under the U.S. Clean Water Act, a sum now estimated as high as $17.6 billion.

The government is one of many plaintiffs suing BP over the April 20, 2010 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and triggered the largest U.S. offshore oil spill.

In a filing late on Thursday with the U.S. District Court in New Orleans, BP said more than 10,000 documents the government is refusing to turn over “appear to relate to flow rate issues” at the company’s ruptured Macondo well.

BP said the documents, which the government considers privileged because they reflect policy deliberations, may show that an August 2010 estimate that 4.9 million barrels of oil spilled from the well is too high.

“The United States’ invocation of the deliberative process privilege here sweeps too broadly,” because it shields evidence concerning “a factual issue, namely, the amount of oil discharged,” wrote Don Haycraft, a lawyer for BP.

“Fundamental fairness” requires that BP get access to this evidence for its defense, he added.

Wyn Hornbuckle, a U.S. Department of Justice spokesman, did not immediately respond to a request for comment.

Private suit filed to stop Express Scripts, Medco

WASHINGTON, Thu Mar 29, 2012 – Two pharmacy groups and several small pharmacy chains asked a federal court in Pennsylvania on Thursday to stop Express Scripts Inc. $29 billion acquisition of Medco Health Solutions Inc.

The merger partners had said on Wednesday they expected the deal could close as early as next week, indicating they believed that Federal Trade Commission approval was likely.

The National Association of Chain Drug Stores, the National Community Pharmacists Association, and nine retail pharmacy companies filed a lawsuit on Thursday arguing that the court should stop the merger because it would leave “only two significant competitors in a highly concentrated industry.”

Pharmacy benefits managers, or PBMs, like Medco handle prescription drug plans for insurance companies and employer clients, and also operate large mail-order pharmacies.

The National Association of Chain Drug Stores counts among its members such retail heavyweights as CVS Caremark Corp., Walgreen Co., Wal-Mart Stores Inc., Target Corp., Supervalu Inc. and Rite Aid Corp.

The groups argued that if the deal is allowed to go through, it would hurt retail pharmacies, specialty pharmacies which administer expensive and hard to manage drugs for conditions like hemophilia, and large employers who need full service, nationwide pharmacy benefits services.

The lawsuit was filed in the U.S. District Court for the Western District of Pennsylvania.

Morgan Stanley directors win pay lawsuit dismissal

NEW YORK, Thu Mar 22, 2012 – Twelve outside directors of Morgan Stanley have won the dismissal of a shareholder lawsuit over their decisions on how to pay tens of thousands of workers.

The shareholders had accused the directors of corporate waste and breaching their duties with regard to their compensation decisions for 2006, 2007 and 2009.

But a New York State appeals court in Manhattan said the shareholders should have first demanded that the board make changes before suing.

The shareholders had contended that such a demand would be futile, but the court said they failed to show that enough of the board lacked independence. Thursday’s decision upheld a December 2010 lower court ruling.

JPMorgan, Citi, BofA sued for $949 million by Sealink

NEW YORK –|JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and more than a half dozen other major banks are being hit with a new lawsuit over $949 million in residential mortgage-backed securities.

A summons was filed Tuesday by Sealink Funding Ltd., an Irish entity that oversees risky RMBS, in New York state Supreme Court.

Sealink has filed numerous other lawsuits against major banks over billions in residential mortgage-backed securities it bought.

New York attorney Joel H. Bernstein, who represents Sealink, said the new case is over “securities they have not sued for in the past.”

Sealink claims the purchases were based on faulty offering materials, including misrepresentations of underwriting standards. It seeks damages or to have the purchases rescinded.