Cincinnati City Workers Won't Hit Class-Action Jackpot After All: Judge Tosses $55 Million Lawsuit

CINCINNATI (TDB) -- Big money was at stake for each city worker -- an average of $22,357. Just four months after certifying the case as a class action, U.S. District Judge S. Arthur Spiegel tossed out the lawsuit brought by 2,460 current and former City of Cincinnati employees. They claimed ownership of $55 million in proceeds from the conversion of their insurer, Anthem, to a stock company. Anthem, a unit of Indianapolis-based healthcare giant WellPoint (NYSE:WLP), made the switch from a mutual company in 2001. It gave 870,021 shares to the city as the group policyholder for its employees.

Seven years later the employees decided that they were the real policyholders and, under state law, deserved to split the money among themselves. They hired a four-lawyer team and filed suit in 2008 in U.S. District Court in Cincinnati. Last week, Spiegel granted Anthem a partial summary judgment and closed the case. Anthem's payment of $55 million to the city, he wrote, did not violate state law. Moreover, it conformed with the bylaws of the original insurer, Community Mutual Insurance Co., which merged with an Indiana company that became WellPoint. Spiegel declared in his 29-page ruling:

"As a general rule, 'policyholders' are the insureds, who are typically 'owners' and entitled to proceeds. However in some specific situations, like the one at bar where the city is indisputably the owner of the group policy, the insureds do not necessarily have equity rights."

There were 15 lawyers representing various parties in the case, which was filed as Mell, et al v. Anthem Inc, et al, Case No. 1-08-cv-00715, U.S. District Court Southern District of Ohio. Lawyers for the workers were Eric Zagrans, Michael Bender, Dennis Barron, and Al Gerhardstein. Zagrans and Bender are from Elyria near Cleveland. The Anthem (WellPoint) legal team was comprised of Adam K. Levin v, Craig Hoover and Peter Bisio of Hogan and Hartsone in D.C.; Vorys Sater lawyers Peter Wolfla, Kent Allen Britt, Robert Neal Webner and Glenn Whitaker in Cincinnati, and Christopher Scanlon and Anne K. Ricchiuto of Baker & Daniels in Indianapolis. Terence Nestor represented the City of Cincinnati. No word yet on an appeal.

Cincinnati Stockbroker Wins Libel Ruling Against Former Employer: Claimed He Was Defamed In False Regulatory Filing

CINCINNATI (TDB) -- A brokerage company that claims it is among the best places to work in Ohio just got socked for mistreating a former worker. Carlos Reisen Jr. said his ex-bosses furnished false information to the Financial Industry Regulatory Authority (FINRA) on a termination notice. A federal judge agrees the form was filed with reckless disregard for the truth and has upheld a $516,000 damage award. U.S. District Judge Susan Dlott sided with an arbitration panel that said the "language . . . associated with Mr. Reisen's termination was defamatory." Reisen had been the Cincinnati branch manager for Hilliard Lyons, a Louisville brokerage that touts itself as "the best place to work in four states." The company has 70 offices in 13 states.

Hilliard Lyons' reckless conduct dates to April 23, 2008 when it reported to FINRA that Reisen had been sacked for disloyalty: "Mr. Risen (sic) was involuntarily terminated for violating his duty of loyalty to the company. As a manager, Mr. Reisen knowingly facilitated the departure of two financial consultants who were hired by a competitor while himself interviewing with the competitor. His termination was not the result of any sales practice related reasons." The statement -- which turned out to be untrue -- was filed on a Form U5/Termination Notice for Securities Industry Registration.

Reisen initially sought $1.8 million in compensatory damages and $$3.7 million in punitive damages. Hilliard Lyons contended that it had not been reckless in filing the termination notice, and said there was no defamation. It also contended the statement was privileged because it was made in the context of a judicial or quasi-judicial proceeding. Judge Dlott saw otherwise:

"Defamatory statements made with reckless disregard for the truth are not entitled to a qualified privilege under Ohio law . . . The [arbitration] Panel held that the 'language associated with Mr. Reisen's termination was defamatory' and that the 'preparation of the U% was negligent and reckless.' Even assuming that the Panel accorded qualified privilege to the Form U5 statements, that privilege was defeated as a matter of law by the factual finding that Hilliard Lyons preparation of the For U5 was reckless."

The filing was changed to say he was involuntarily terminated due to a management conflict. The disloyalty claim was expunged. The case is 1:09-cv-00535 in U.S. District Court for the Southern District of Ohio. Attorney William K. Flynn of Strauss & Troy represented Reisen.

Cleveland Cops Cheated Out Of Comp Time? Federal Trial Now Set For April 22

CLEVELAND (TDB) -- The lawsuit started in 1999 and has been all the way up to the Supreme Court. Now, U.S. District Judge Patricia A. Gaughan says she'll conduct a non-jury trial starting April 22 to determine if Cleveland has any unmet financial liability to its police officers. The cops contend they were illegally denied requests for compensatory time off in lieu of overtime pay. Cleveland -- citing tight budgets -- turned down comp time to avoid paying overtime wages to substitute officers. The subs would have been called in and given assignments to cover the shifts of the officers who were off duty on comp time.

The case involves the Fair Labor Standards Act and pits the Cleveland Police Patrolman's Association against the city, which refused to grant the time off starting in the late 1990s. Gaughan issued a decision last month that sets up the trial. The complete text of her ruling is available here, h/t policepay.net.

Gaughan said there is some evidence Cleveland's financial condition between 2004 and 2006 was so bleak it couldn't afford requests for comp time. Federal law allows cities to turn down comp time for cops if it imposes a financial burden that can result in an "undue disruption" of police services. The judge said the city may be able to invoke that exemption:

"Unlike the period of 1997 through 2003, the Court finds that defendants [City of Cleveland] have come forward with sufficient evidence to establish that they may be entitled to invoke the undue disruption exemption. In 2004, the city was forced to enact budgetary cuts of $59 million. Due to the budgetary constraints, the department was force to lay off 250 officers and 91 civilian employees."

The judge said those budgetary cuts and layoffs were significant but the city "failed to present sufficient evidence to obtain summary judgment" -- which means more litigation is necessary.

Ala. Judge Roy Moore Of Ten Commandments Fame: Legal Fund Says Ohio Telemarketer Kept Millions

AKRON (TDB) -- The Foundation For Moral Law fronted by former Alabama Chief Justice Roy Moore has filed a lawsuit in Ohio federal court contending an Akron telemarketing firm improperly solicited potential donors nationwide, The Daily Bellwether has learned. The lawsuit alleges the telemarketer "did not turn any of more than $2.3 million raised" over to the foundation, which supports keeping religious symbols in public places. The lawsuit claims that InfoCision Management Corp. was originally hired to help raise funds for Moore's legal defense fund in 2003.

Moore became nationally notorious after he installed a display of the Ten Commandments in the Alabama Supreme Court and promised to wage a legal battle to keep monument in place. A federal judge ordered the display removed, Moore objected and lost his office in the dispute. He has since become a figure of some import on the religious right.

The case is Foundation for Moral Law Inc. vs InfoCision Management Corp, No. 5:07 cv 3121 U.S. District Court, Northern District of Ohio. The Foundation, which is headquartered in Montgomery, Al., contends that donors were not supposed to be called more than twice "to avoid 'donor burnout' or otherwise annoying or overzealous 'spoiling of plaintiff's donor base."

Infocision has not yet responded to the lawsuit. Court records show the company was recently served with the complaint. The foundation contends the terms of its contract were violated.

"InfoCision's calling records disclose that out of a total of 63,725 of plaintiff's donors, InfoCision has called 9,602 of those donors more than twice and raised from those recalls $239,031.85. In fact, InfoCisiion called 5,372 donors three times, 3,642 donors were called four times, and 588 donors were called five times. During the weekly updates on InfoCision progress, InfoCision reported amounts pledged and amounts received. The last reported "Acquisition Total" on October 28, 2005, stated amounts pledged at $3,627,477 with $2,333,063 actually collected by InfoCision."

The lawsuit states that the defendants "placed telephone calls to plaintiff's donor base and others for the sole purpose of obtaining money under the guise of benefiting plaintiff when in fact InfoCision had no intention of and did not turn any of more than $2.3 million dollars raised over to plaintiff."