In Torres et al. v. Gristedes Operating Corp. et al., Case No. 11-4035 (July 9, 2013), the Second Circuit Court of Appeals held that a mayoral candidate, a supermarket owner, and an executive can be individually liable for settlement payments arising of a Fair Labor Standard Act class action.
In this case, the parties settled the class action. A class action is a discrimination case brought by a few plaintiffs on behalf of many employees. All of the members who agreed to be part of the class (the individuals who were discriminated against) receive their part of the settlement. In order for a fair disbursement, the Judge must adopt the settlement.
Under the settlement, the defendants agreed to pay $3.5 million to the class. However, the defendants defaulted on the payments. The judge’s order allowed the class to enforce the settlement. Defendants, who sought to change the settlement, stated that they were not bound by the settlement because they were not “employers.”
The Second Circuit Court of Appeals disagreed. The Court noted that the defendants exercised “operational control” that affected the class’ employment. For example, based of their decisions, the employees’ wages were affected. Because defendants were employers, defendants were bound by the settlement. Based on this decision, defendants now have to pay the owed money.
via Labor Employment Law Blog: Second Circuit Imposes Individual Liability on New York Mayoral Candidate for Fair Labor Standards Act Settlement.
AIG is considering joining a lawsuit against the US government claiming that the bailout harmed its shareholders. Starr International, a company that once owned 12% of AIG, will ask the AIG board to join its lawsuit against the government.
The complaint filed in November 2011 alleged that the government charged a “punitive” interest rates on its loans and enabled a “backdoor bailout” of the insurer’s Wall Street clients by using AIG money to pay off credit default swaps.
If AIG decides to join the lawsuit, AIG could face additional shareholder lawsuits if it decides against joining the $25 billion suit and the action ultimately proves successful, according to the New York Times DealBook Blog.
via AIG Considers Joining Suit Claiming Its Government Bailout Harmed Shareholders – News – ABA Journal.
Good reminder to Defendants why they need to respond to a lawsuit. If you don’t, you will likely face default judgment.
The City of Detroit is facing a $1.1 million judgment in a civil rights suit, after failing to respond to the litigation and being held in default by a federal judge. Caleb Sosa, who is now 19, says he was coerced at age 14 into initialing a confession he couldnt read, to a murder he had nothing to do with, and held in juvenile detention for two years before he was acquitted at trial. His lawyer, Ronnie Cromer Jr., said he might well have been able to persuade a jury to award even more than U.S. Judge Sean Cox did had the case gone to trial, the Associated Press reports. The city has declined to discuss the management of the Sosa case and why no response was ever filed to the 2010 suit, even after an amended complaint was filed in 2011 and hand-delivered to Detroits law department. The suit accused city police of faking Sosas confession and covering up evidence in his favor.
via After City of Detroit Ignores Civil Rights Suit, Federal Judge Declares Default, Awards $1.1M – News – ABA Journal.