LegalNewsLine.com

Home mortgage servicing company files suit against Ohio AG

Nick Rees — Fri, 06 Nov 2009 16:00:00 CST

COLUMBUS, Ohio (Legal Newsline) - American Home Mortgage Servicing, Inc., has filed a lawsuit in Franklin County Circuit Court against Ohio Attorney General Richard Cordray regarding what it asserts are unsupported allegations of unfair servicing practices made against them by Cordray in a pre-suit letter.

Cordray's office has refused to discuss its allegations, which pertain to AHMSI's customer service, loss mitigation and loan modification services, prior to a lawsuit against AHMSI.

"Given our strong commitment to keeping borrowers in their homes and the specific, positive feedback we have received from many Ohio state and non-profit agencies regarding our homeownership preservation efforts, AHMSI's management was dismayed when it received a letter last week from the Ohio Attorney General's office threatening to sue AHMSI for unfair servicing practices," Jordan Dorchuck, AHMSI Executive Vice President and Chief Legal Officer, said.

"We offered to meet with representatives of the Attorney General in an attempt to resolve any issues they may have regarding our servicing practices.

"Rather than wait to be named as a defendant in a suit that AHMSI considers to be rash and without merit, we elected to petition an Ohio state court for a declaration that AHMSI's servicing practices are fully compliant with Ohio law.

"AHMSI is proud of its many successful efforts to assist distressed homeowners and looks forward to judicial resolution of any questions that any party might have about our performance. Although we respect the Attorney General's commitment to serve the people of Ohio, we are convinced that these allegations are entirely without merit, and intend to defend ourselves vigorously against them."

AHMSI was founded in April 2008 and specializes in servicing distressed residential mortgage loan portfolios. It services approximately 17,000 loans in Ohio and more than 500,000 loans nationwide, though it did not originate any of those loans.

More than 3,000 people are employed by AHMSI, many of whom, it says, were hired to support the company's foreclosure prevention efforts and to maintain a high customer service standard. AHMSI has also established processes for working with borrowers to resolve questions, concerns and complaints and actively worked with Ohio borrowers encountering difficulty in meeting their loan obligations.

AHMSI has entered into non-Home Affordable Modification Program loans with more than 2,200 Ohio customers since October 2008 and has 173 customers currently proceeding under HAMP trial modifications. AHMSI has also worked with 141 Ohio borrowers to sell their homes with a short payoff rather than proceeding to foreclosure.

Wis. energy company to pay for water pollution

Nick Rees — Fri, 06 Nov 2009 15:00:00 CST

UTICA, Wis. (Legal Newsline) - Utica Energy has agreed to pay $280,000 in penalties resulting from its failure to comply with state water pollution laws and pay an additional $200,000 to connect to the city of Oshkosh's wastewater treatment system.

"Wisconsin law requires that industrial facilities manage their wastewater discharges and drinking water supplies by following their permits, so as to protect the public and the environment from harmful pollutants," Wisconsin Attorney General J.B. Van Hollen said.

"The Wisconsin Department of Justice will continue to work with the DNR to ensure that Wisconsin's citizens and natural resources are protected through compliance with the law."

Fuel grade ethanol is produced at Utica Energy's Utica facility. The production process' wastewater is treated at the facility and then either discharged directly to a tributary of Sawyer Creek, which is itself a tributary to the Fox River, or land applied in the Lake Butte des Mortes Watershed.

A 2008 Department of Natural Resources Wisconsin Pollutant Discharge Elimination System authorizes Utica Energy to discharge the wastewater in accordance with the effluence limitations, monitoring requirements and other conditions of the permit.

Utica Energy is charged with violating the terms of that 2008 permit by its failure to conduct wastewater sampling, exceeding effluent limits, failure to submit required plans in a timely manner and failure to report incidents of noncompliance.

In addition to the $280,000 in forfeitures, assessments and costs for past violations and the $200,000 to connect to the Oshkosh wastewater treatment system, Utica Energy will pay stipulated forfeitures of $25 to $1,000 for each day that its wastewater discharge exceeds permit limits until its connection with the city sewer system is complete.

Utica is also resolved of charges by the judgment that it failed to comply with state laws governing wastewater discharges and drinking water supplies.

Additionally, the complaint charges Utica with improperly constructing its high capacity well system, which it received an approval for in 2004. The complaint states that the well system has improperly placed check valves and that Utica failed in stall sample faucets. Utica has corrected both of those deficiencies.

Cox, Granholm don't agree about new agency

John O'Brien (john@legalnewsline.com) — Fri, 06 Nov 2009 15:00:00 CST

LANSING, Mich. (Legal Newsline) - Michigan Attorney General and gubernatorial hopeful Mike Cox wants the state Legislature to block Gov. Jennifer Granholm's plan to create a new state agency.

Cox claims Granholm is using the state's budget crisis as an excuse to take control of the agriculture and tourism industries, while Granholm feels the new Department of Natural Resources and Environment will help streamline state government by eliminating two agencies.

"This executive order shares the same problems that her governing style has: it is incredibly short-sighted and moves in a haphazard, slapdash manner rather than using measured priorities to guide reform," Cox said.

"It sends the wrong message to two industries that are persevering despite the Granholm administration's lack of leadership."

Cox is seeking the Republican nomination in the race for governor next year. Granholm, a Democrat, is not running.

Granholm's new agency would assume the powers and functions of the Department of Natural Resources (DNR) and the Department of Environmental Quality (DEQ), which are abolished by the executive order.

"The Department of Natural Resources and Environment is a new department for the 21st century," Granholm said in October. "Experience has shown us that conserving natural resources and protecting the environment go hand-in-hand. These efforts now will be coordinated under one department."

Cox said the Legislature should reject the order because the commissions have allowed the agriculture and environmental economies to thrive. The state's agriculture industry generates $71.3 billion per year, employs 86,000 and is growing, Cox says.

"The Governor's executive order puts jobs at risk and silences the voices of our farmers, hunters, fishermen and lovers of the great outdoors," Cox concluded.

"She should follow that simple yet accurate adage: If it ain't broke, don't fix it."

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

Recent Ala. SC decision should apply to Zyprexa suit, attorneys argue

John O'Brien (john@legalnewsline.com) — Fri, 06 Nov 2009 13:27:00 CST

NEW YORK (Legal Newsline) - Before Eli Lilly & Co. decides to settle Mississippi Attorney General Jim Hood's Zyprexa lawsuit, it wants a federal judge to take a look at a recent decision by the Alabama Supreme Court.

Eli Lilly says the Court addressed issues relevant to its pending motion for summary judgment when it decided AstraZeneca Pharmaceuticals was not responsible for losses to Alabama's Medicaid program. That 8-1 decision, reached Oct. 16, wiped out a $160 million verdict.

"In AstraZeneca, as in this case, a State sued pharmaceutical manufacturers for fradulent misrepresentation, though the factual record established beyond question that the State knew the true facts for many years and never altered its behavior, even after it filed suit," says Eli Lilly's notice of supplemental authority, filed Friday.

"The Supreme Court of Alabama held that the State's knowledge barred any claim of reasonable reliance and any recovery for alleged fraud. This Court should reach the same result."

The notice was filed with U.S. District Judge Jack Weinstein, who is handling several of the lawsuits brought by states that did not participate in a 33-state, $62-million agreement.

The AstraZeneca suit was one of more than 70 brought by Alabama Attorney General Troy King, who hired private attorneys to pursue the litigation. They allege drugmakers were over-reimbursed by inflating the average wholesale prices of their products.

The remaining Zyprexa suits allege Eli Lilly promoted the drug for off-label uses and it caused weight gain-related side effects, like hypertension and diabetes, in users.

"In this case... the uncontradicted record demonstrates that the State of Mississippi, its agencies and its prescribing physicians knew of the alleged risks of Zyprexa before the 2003 label change, despite the State's claim that Lilly fraudulently misrepresented Zyprexa's risks," the notice says.

"Moreover, like the (Alabama Medicaid Agency) in AstraZeneca, the State of Mississippi did not change its reimbursement pracctices with respect to Zyprexa until a year after its lawsuit was filed, despite allegedly 'discovering' Lilly's 'fraud,' and the only when Lilly rejected the State's demand for supplemental rebates.

"On this record, as in AstraZeneca, the State can't claim reasonable reliance, can't establish causation and can't prevail on its fraud-based claims."

Fletcher Trammell of Houston plaintiffs firm Bailey Perrin Bailey says the company shouldn't be seeking summary judgment because it has already spent billions of dollars setting federal and state claims "identical" to Mississippi's.

"In a summary judgment filing that borders on the surreal - after settling billions of dollars in claims and penalties with the federal and nearly every other state government over identical conduct, along with settling thousands of related personal injury claims - Defendant Eli Lilly & Company seeks to avoid liability to the State of Mississippi by principally arguing that the State has insufficient evidence to support its claims," Fletcher wrote.

"As a purely conceptual matter, Lilly's notion that the State cannot reach a jury trial on the record evidence that is already before this Court of Lilly's fraudulent conduct directed at the federal and state Medicaid systems as well as other third party payers - irrespective of the evidence adduced by the State in response to Lilly's Motion - boggles the mind."

Twelve states did not settle their claims against Eli Lilly in a 33-state, $62 million settlement. Connecticut settled for $25.1 million, and West Virginia settled for more than $22 million, with $6.75 going to outside counsel hired by state Attorney General Darrell McGraw. Idaho settled its case for $13 million, with more than $2.5 million going to outside attorneys.

Eli Lilly has paid $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million.

Other states seem to have reached settlements, but they have not been made final. Counsel for Minnesota and Montana will take part in a settlement conference with Special Settlement Master Michael Rozen on Tuesday.

Only Mississippi's suit continues to see consistent action. The other suits over which Weinstein presided were brought by West Virginia, Connecticut, Minnesota, Montana, New Mexico, Louisiana and Utah.

South Carolina has settled its state court case for $45 million, while Utah, Pennsylvania and Arkansas have cases remaining in state courts.

Mississippi Attorney General Jim Hood hired outside counsel to represent the State. They are:

-Bailey Perrin Bailey of Houston, which has donated $75,000 Hood.

-W. Howard Gunn and Associates of Aberdeen, Miss., which donated $2,500 to Hood before the 2007 election; and

-William Quin of The Quin Firm in Jackson, Miss., who donated $3,000 to Hood while employed at Lundy & Davis in 2005.

In Alabama, jury verdicts against AstraZeneca, Novartis Pharmaceutical and GlaxoSmithKline resulted in awards of $215 million, $33 million and $80.9 million, respectively.

The AstraZeneca verdict was reduced to $160 million before the Supreme Court overturned it.

Attorney Jere Beasley called the Supreme Court's decision "difficult to understand."

"In refusing to allow oral argument, the Court did not allow members of the news media who had not attended the trial in 2008 to hear first hand how bad the conduct of these companies was," he said.

"The AstraZeneca case had been pending for so long that even the few members of the news media who attended the trial against AstraZeneca may have forgotten how strong the State's case really was."

He also said he would ask the Court to reconsider its decisions.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

Okla. AG calls for cancer research and treatment

Nick Rees — Fri, 06 Nov 2009 10:40:00 CST

OKLAHOMA CITY (Legal Newsline) - Attorney General Drew Edmondson has called on the Oklahoma Tobacco Settlement Endowment Trust's board of directors to fund the operation of a cancer research and treatment center.

In a letter to the trust's board, Edmondson called for a $100 million, 20-year commitment, which Edmondson said would be the organization's signature achievement, to the OU Cancer Institute at the University of Oklahoma.

"Funding a cancer research and treatment center easily falls within the board's mandate," Edmondson said. "Cutting-edge cancer research, looking both at what causes cancer and exploring possible cures, is the next logical step for the tobacco trust."

The OU Cancer Institute estimates that $1.5 billion each year is spent by Oklahomans seeking cancer treatment outside the state, Edmondson said.

"It's an economic reality that building a research and treatment facility here at home will create jobs, grow the economy and bring research funding to our state," Edmondson said. "But these concerns are secondary to the impact a world-class facility will have on Oklahoma patients."

Edmondson, in calling for a minimum annual commitment of $5 million over a 20-year period, also praised the trust for its success in lessening the incidence youth smoking, reducing overall smoking rates and improving the health of Oklahomans.

"The trust's first objective must be to stop potential new smokers, especially children, from ever lighting that first cigarette," Edmondson said. "Second is helping current smokers kick the addiction.

The tobacco trust was set up a decade ago following the attorney general's support for the creation of a constitutionally-protected trust to manage the proceeds from the over $200 billion tobacco Master Settlement Agreement he helped negotiate.

Established at Edmondson's urging, the tobacco trust manages those settlement funds and ensures that they are spent fighting tobacco addiction and treating and combating tobacco-related diseases.

"Funding a cancer research and treatment center easily falls within the board's mandate," Edmondson said. "Cutting-edge cancer research, looking both at what causes cancer and exploring possible cures, is the next logical step for the tobacco trust."

Toshiba 10 years later: A look back at Texas-sized settlement

Kelly Holleran — Fri, 06 Nov 2009 10:32:00 CST

BEAUMONT, Texas (Legal Newsline)--It's been 10 years since Toshiba settled what is probably the largest recovery ever obtained for economic damages in a class action lawsuit.

On Oct. 28, 1999, lead class plaintiffs Ethan Shaw and Clive D. Moon settled a lawsuit with Toshiba America Information Systems Inc. and NEC Electronics for $2.1 billion after complaining that floppy diskette controllers in the machines were defective.

Texas Lawyers Hubert Oxford III of Beaumont, Gilbert I. "Buddy" Low of Orgain, Bell and Tucker in Beaumont, L. DeWayne Layfield of Pasadena and Wayne Reaud received $147.5 million in attorneys' fees for their work.

When it was announced, the extraordinarily large settlement shocked some lawyers who couldn't understand why the company was willing to pay such an exorbitant amount.

"I'm just baffled by it," Charles L. Kerr, a lawyer for Morrison and Foerster in New York who worked on computer liability cases, told the New York Times two days after the settlement was announced. "It's a substantial hit and they must have had pretty good reasons for taking a substantial hit."

But Toshiba executives defended the settlement, saying they could have been forced to pay much more � up to $9.5 billion -- if they had lost the litigation in a jury trial.

"That would have endangered the very existence of the company," Taizo Nishimuro, the company's president, said at a news conference held in Tokyo shortly after the settlement. "That's why we made the tough decision to settle."

Even in the settlement, Toshiba says it entered into the agreement "solely to avoid further expense, inconvenience and burden of this protracted and complex litigation, the risks inherent in uncertain complex litigation, and the distraction and diversion of their personnel and resources, and thereby to put to rest this controversy."

The court felt the need to defend another controversial decision � the millions of dollars of attorneys' fees it awarded.

Presiding U.S. District Judge Thad Heartfield wrote in his findings of fact that the fees represent only 7 percent of the total awarded to the class. On average, attorneys stand to make about 32 percent of total damages.

In addition, attorneys worked hard on the lawsuit, pouring through millions of pages of documents written in Japanese, the court's findings of fact state.

"In addition to these documents, Defendants also produced a mountain of magnetic and optical media containing millions of entries relating to product design, defects, complaints, and other relevant issues," Heartfield wrote in the court's findings of fact. "Deciphering the relevant information and data from the digital backup tapes, optical disks, removable magnetic disks, floppy disks, and videotapes required substantial skill and was itself a monumental task."

In their lawsuit filed March 5, 1999, in U.S. District Court for the Eastern District of Texas, Shaw, a Beaumont lawyer at the time of the lawsuit, and Moon, a retiree from Plano, accused Toshiba and NEC of selling 5 million notebook computers that would destroy or lose information without their users' knowledge.

The problems originated in the computers' floppy diskette controllers, which is a device that controls the floppy disk drive, according to the complaint.

"FDCs affect all of us," Shaw and Moon wrote in the complaint. "Devices incorporating FDCs, including, without limitation, computer systems, are used in our homes, schools, businesses, doctor's offices, hospitals, banks, government installations, air traffic control systems, and medical laboratories. We use that data to protect our health; to design our bridges, office buildings, dams and skyscrapers; to find energy reserves; to design and pilot our planes and spacecraft; to provide government services; and to pay our bills and taxes."

It is vital for public safety that Americans be able to trust their computers, Shaw and Moon claimed.

However, most, if not all, of the floppy diskette controllers sold by Toshiba and NEC Electronics destroyed data contained in or retrieved from the computer's storage system.

"When doctors cannot trust the medical data in their computers or the test results they receive from the lab; when engineers cannot depend on the data they use to design our bridges, skyscrapers, dams, and commercial airliners, Defendants pose a clear risk to public health and safety," the suit states.

Data corruption occurred because of an alleged defective microcode contained in the FDCs. In the complaint, the problem is referred to as a boundary error. And when that error occurred, users were not informed of it, the complaint says.

Even in properly manufactured floppy diskette controllers, such errors would have occurred when floppy diskette controllers were forced to wait too long for data to arrive � even for a few microseconds. But unlike the correctly configured floppy diskette controllers, Toshibas failed to detect the problem and properly rewrite the information, Shaw and Moon claimed.

Even worse, the floppy diskette controllers would write corrupted data to the disk or another storage device, then make a report that the information was successfully transferred.

"Defendants' defective FDCs instead verify the erroneous data as correct without an error status, resulting in the storage of corrupt data or the destruction of data without notice to the control program or operating system and without the operator's knowledge," the suit states.

According to the complaint, Toshiba and NEC Electronics knew about the faulty floppy diskette controllers for more than 10 years before Shaw and Moon filed their lawsuit, but both companies continued to mislead consumers into believing their products met computer industry standards.

The alleged deception ended by the time Toshiba reached a settlement with the plaintiffs.

As a result of the settlement, most people who purchased a new Toshiba laptop on or after March 5, 1998, but before Nov. 8, 1999, were entitled to a cash payment of $210 to $443.21 per defective unit depending on its age, and to a software solution that would correct the FDC condition. In addition, they were awarded a $225 coupon good for the purchase of other Toshiba products.

Other class members not entitled to the previously mentioned relief were allowed a software patch for the FDC condition and a $100 coupon.

For the time they spent participating in and monitoring the case, Shaw and Moon each received $25,000.

"This is one of the largest consumer class recoveries stemming from an allegedly defective product � possibly the largest ever in a case where economic damages were at issue," the court's findings of fact states. "It is 'off the charts' by comparison to other class-action settlements."

In addition, without admitting any of the floppy diskette controllers in its laptops were defective, Toshiba agreed to solve the floppy diskette controller problems by creating a hardware fix on its new computers that alerted the operating system if data was written incorrectly to a floppy diskette.

To pay class members' claims, Toshiba was required to establish a cash fund of $597.5 million. Any remaining money not claimed was used to fund a charity called the Beaumont Foundation of America, which used the cash to purchase Toshiba laptops and desktops that would be distributed to schools, churches, non-profit organizations, libraries, hospitals and the poor throughout the United States.

In its findings of fact, the court advocated the advantages of the foundation, saying it would help not only help children, but would also have a positive impact on businesses that were class members.

"Children growing up in homes without computers or attending schools without computers and computer training are substantially disadvantaged with respect to education and future employment," the suit states. "This imbalance, referred to as the 'digital divide,' has received nationwide attention and study. The goal of eradicating it is an important public priority."

Because most businesses require employees to have strong computer skills, the foundation benefited a "significant portion" of the class while also helping the poor.

"In this Court's judgment, it is difficult to think of a better way of using any funds that may remain after all claims are processed," the findings of fact state. "This Court applauds and congratulates Class Counsel and Toshiba for dedicating any unclaimed funds that remain at the end of the case to an important and worthwhile social purpose that has the potential to benefit a large segment of the class."

Nevada justices consider attorneys fees under cap law

Kathy Woods (kcwoods62@gmail.com) — Fri, 06 Nov 2009 09:00:00 CST

LAS VEGAS (Legal Newsline)�A pending Nevada Supreme Court's decision in a case over contingency fees could fundamentally change medical malpractice litigation in the Silver State.

The issue before the high court is whether a law passed in 2004 that set a cap of $350,000 on noneconomic damages, such as pain and suffering and limited contingency fees attorneys can charge clients, was intended to be retroactive.

The case came about after Las Vegas attorney Robert Vannah was retained by Kathleen Johnson-Dinsmore in 1999 after n allegedly botched surgery. At the time, Johnson-Dinsmore agreed to pay the attorney 40 percent of any monetary settlement or award.

In November 2006, Johnson-Dinsmore was awarded $5.75 million. The 2004 law says that Vannah was allowed to charge 15 percent or roughly $800,000. But, Vannah says that since he was retained in 1999 at 40 percent that he should receive $2.3 million, according to their agreement.

Vannah told the justices that the case he entered into with Johnson-Dinsmore was still unresolved in 2006. And that he put $172,000 of his own money into the case.

Justice Mark Gibbon's suggested that had the legislation been intended to be retroactive it would have been included when the legislation was written.

Vannah said that he stopped taking malpractice cases after the law passed in 2004, the Las Vegas Review-Journal reported.

"It just didn't pencil out anymore. I'm not the only one. I know a lot of prominent firms that no longer handle these types of cases." Vannah said.

Vannah said the law has created unintended consequences.

"They've allowed the pendulum to swing too far the other way. Now, people who are impacted by bad doctors will have a hard time finding a good, experienced attorney to represent them. The doctors got what they wanted," Vannah said.

The only question the Supreme Court will be addressing is attorney fees, as it is the only part of the cap law which is being challenged.

The Supreme Court is expected to issue a written ruling in the weeks to come.

Retailers settle with Brown over toxic toys

Chris Rizo (chrisrizo@legalnewsline.com) — Fri, 06 Nov 2009 08:47:00 CST

OAKLAND, Calif. (Legal Newsline)�Three national retail giants have agreed to pay a combined total of $454,000 in penalties to settle claims that they sold toys with excessive amounts of led in them.

Target Corp., Toys R Us Inc. and Kmart were sued by California Attorney General Jerry Brown's office and the Los Angeles city attorney's office in November. The settlement is expected to be filed today in Alameda County Superior Court.

The lawsuit claimed that the toys violated federal safety laws as well as California's Proposition 65, which requires companies and businesses to provide "clear and reasonable" warnings before exposing people to known carcinogens or reproductive toxins.

"Our enforcement action will serve as a reminder to companies that they have a responsibility to make sure that children aren't exposed to harmful chemicals from their toys," Harrison Pollak, a state deputy attorney general, was quoted by the Los Angeles Times as saying. "The settlement provides a remedy for past violations and makes it less likely that there will be future violations of lead standards."

Under the agreement Target will pay $210,000, Toys R Us will pay $175,000 and Kmart will pay $69,000.

In December, Brown and Los Angeles City Attorney Rocky Delgadillo agreed to a $1.8 million settlement with nine toy manufacturers, including Mattel Inc. and its subsidiary Fisher Price.

In that settlement, the companies agreed to stop selling any toys they know contain lead. The companies will also pay $550,000 for lead testing and improved notification to customers.

The toy companies paid $460,000 toward the cost of the investigation and another $548,500 for civil penalties, according to the terms of the settlement.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

Report: Calif. local governments shell out big bucks on lawsuits

Chris Rizo (chrisrizo@legalnewsline.com) — Thu, 05 Nov 2009 15:37:00 CST

SACRAMENTO, Calif. (Legal Newsline)�Eight of California's largest cities and nine of its largest counties spent $504.1 million on lawsuits in 2007 and 2008, a report said Thursday.

The study by California Citizens Against Lawsuit Abuse found that local governments spent the taxpayer money on verdicts, settlements and outside legal counsel.

"California has 58 counties and 480 cities, so this is just the tip of the iceberg," said CALA Executive Director Tom Scott told Legal Newsline. "And we are not even looking at school districts and state agencies here."

Scott said the public at large does not realize just how much money their local community is shelling out in settlements and attorney fees.

"Very few people pay attention to public lawsuits, which I truly believe has a huge impact on taxpayers. This is a direct hit on your community and your pocketbook," he said. "My concern is that in light of economic stimulus packages people are sort of numb to numbers."

California's legal climate ranks in the bottom 10 of states. The state was ranked 44th in an annual survey by Harris Interactive of states' legal climates from the perspective of in-house corporate counsel around the nation.

The CALA report examined legal expenditures in the counties of: Alameda, Fresno, Kern, Los Angeles, Orange, Sacramento, San Diego, San Francisco, and Santa Clara, and the cities of: Anaheim, Bakersfield, Fresno, Los Angeles, Oakland, Sacramento, San Diego, and San Jose.

Last year, CALA reported that three cities and four counties spent more than $276 million in litigation costs for fiscal years 2005 and 2006.

"Citizens of California deserve to know where their tax dollars are going. Budget shortfalls don't just affect those who might lose their jobs or services they rely on, the effects ripple to the entire community and beyond," said Lorie Zapf, CALA's San Diego regional director.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

Lawsuit filed against Philadelphia pet supply company over false charitable contributions‏

Nick Rees — Thu, 05 Nov 2009 14:51:00 CST

HARRISBURG, Pa. (Legal Newsline) - A civil lawsuit has been filed by Attorney General Tom Corbett against a Philadelphia man and his pet supply company over false claims about charitable contributions and failure to provide refunds on returned items.

The lawsuit was filed against Joseph White, the owner of Furlong's Pet Supply, which used addresses in both Philadelphia and Wilmington, Del., and conducted sales on the internet. The business is also allegedly operated as Tapping Paw, though neither business name is properly registered in Pennsylvania.

White's pet supply website is alleged to have advertised that a charity called the Adopted Dog Training Association would receive ten percent of the proceeds from every sale. The charity allegedly provided obedience training to Philadelphia citizens who adopted dogs from animal shelters.

"In reality, this dog training 'charity' was little more than a sham, created by Mr. White, to lure sympathetic consumers into making purchases from his online business," Corbett said. "The organization was never registered as a charity in Pennsylvania and no money was ever donated to it."

In addition to the false claims of charitable contributions, White is also accused of failing to honor his stated return policy by not providing refunds for items returned within the specified 21-day return period.

Corbett's lawsuit seeks restitution for consumers who paid for products that they did not receive as well as refunds for items that consumers had returned properly.

The lawsuit also seeks penalties of as much as $1,000 for each violation of Pennsylvania's Consumer Protection Law or up to $3,000 for each violation involving a senior citizen.