Declarations

Calif. Class Actions

“Data shows that a state like California — with a huge population and laws tilted against defendants — remains a major forum for class action lawsuits, despite the 2005 federal Class Action Fairness Act. … That’s an average of more than four class action lawsuits each and every day the courthouses are open.”

—John H. Sullivan, president of the Civil Justice Association of California, which recently commissioned a study on class action lawsuits filed in California courts over the past three years. The report shows that California’s class action environment is quite active.

Federal Measure “Falls Short”

“(The Homeowners Defense Act of 2007) will not generate new private sector insurance, reinsurance or capital market capacity, and is likely to encourage states to create thinly financed, state-run reinsurance facilities that will displace the private market and require a federal government bail-out in the event of a catastrophe.”

—Marc Racicot, president of the American Insurance Association, commenting that HR 3355 legislation that recently passed in the House of Representatives by a 258-155 vote falls short in trying to address catastrophe risk problems in coastal insurance markets.

Subprime Side-Effect

“Citigroup, under defendants’ direction, recklessly spent billions of dollars purchasing subprime loans to be warehoused for future collateralized debt obligations. These actions were reckless due to the impending subprime mortgage crisis and increasing delinquency rates among subprime borrowers.”

—Statements filed in a shareholder derivative lawsuit in federal court, alleging that Citigroup Inc. former CEO Charles Prince and other company executives recklessly purchased subprime loans to be used for future collateralized debt obligations and then made improper statements regarding the financial services company’s exposure to the subprime market meltdown. The derivative suit is part of the subprime mortgage fallout and follows a separate lawsuit filed earlier in New York on behalf of participants or beneficiaries of Citigroup’s retirement plans, which alleged the company’s stock was an “imprudent investment” for the plans because of mismanagement and improper business practices at the company.

Federal Push Would Help Product Safety

“The U.S. Consumer Product Safety Commission needs help. It needs additional resources, more staff and greater authority to protect consumers from potential product hazards. … The downsizing and dismantling of the agency has been going on for a while, so I ask you to be patient with all of us at the agency as we rebuild our staff expertise and, with your strong support, refocus our efforts on providing a greater level of product safety.”

—U.S. Consumer Product Safety Commissioner Thomas Moore commenting that he is pleased the House of Representatives is moving to improve product safety standards and provide more money and staff to the agency, which has been criticized for perceived product recall delays under the leadership of acting head Nancy Nord. (AP)