Vintage Filings Legal Blog

In the past decade, companies have been tirelessly ensuring that their brick and mortar locations are fully handicap accessible, and now the movement is migrating online.  The most recent settlement came this past month when The National Federation of the Blind (NFB) and Target (NYSE: TGT) announced today that they have settled a class action lawsuit regarding access to the Target.com Web site by blind people.

Dr. Marc Maurer, President of the National Federation of the Blind, said: “Access to Web sites is critical to the full and equal participation of blind people in all aspects of modern life. The National Federation of the Blind is pleased to have reached a settlement with Target that is good for all blind consumers, and we recognize that Target has already taken action to make certain that its Web site is accessible to everyone. We look forward to working with Target in the coming months to help make additional improvements that will enhance the experience of blind visitors to Target.com. It is our sincere hope that other businesses providing goods and services over the Internet will follow Target’s example and take affirmative steps to provide full access to their Web sites by blind consumers.”

Bruce Sexton, Jr., a named plaintiff in the case from the beginning, added: “This settlement marks a new chapter in making Web sites accessible to the blind. I commend Target for committing to being a leader in online accessibility.”

Steve Eastman, president of Target.com, said: “First and foremost, Target is committed to serving all our guests. As our online business has evolved, we have made significant enhancements in order to provide an accessible shopping experience. We are pleased to have reached an agreement with the National Federation of the Blind regarding the accessibility of Target.com for individuals who use assistive technologies and will work with the NFB on further refinements to our Web site.”

As part of the settlement, Target will establish a $6 million fund from which members of the California settlement class can make claims. In addition, the National Federation of the Blind will certify the Target Web site through its Nonvisual Accessibility Web Certification program once agreed upon improvements are completed in early 2009. Target and NFB have agreed to a three-year relationship during which NFB will perform accessibility testing of the Target Web site.

It may be a good idea for other consumer facing online shops to begin researching how they can become fully accessible to all audiences.

Many public companies seem to look at corporate insurance as nuisance that can taken care by paying for the minimum amount of coverage.  However I came across a settlement case this morning that illustrated how vital it is to be fully covered. Clear Choice Health Plans (OTCBB: CCHN) announced that it had concluded a settlement agreement that completely absolves the company against liabilities related to a lawsuit filed in 2007 by Priscilla Evans and Dale Evans in Deschutes County Oregon Circuit Court.

Pursuant to the terms of the settlement agreement, the plaintiff will receive $1.5 million. The lawsuit sought to recover damages of $20 million, plus attorneys’ fees. The settlement was covered by insurance, with the company only being responsible for its deductible.

Clear Choice said that although it has always believed that the company had strong meritorious defenses, management concluded, in consultation with its insurance company, that it was in the best interests of the company, employees, customers and shareholders to settle this litigation and put the matter behind it. The settlement will have no material impact on the company’s financial results.

So please make sure you do not take the your corporate insurance needs too lightly, when you need it, insurance will be your best friend.

Chapter 11 bankruptcy situations are tricky by nature, however when several parties begin positioning themselves to hinder creditors, the courts have to get involved.  And that is what happened, on August 30, U.S. District Judge Andrew Hanen of Brownsville, Texas issued a 190-page opinion holding that Americas Mining Corporation (AMC), a subsidiary of Grupo Mexico S.A. de C.V., had perpetrated a fraudulent transfer to itself of ASARCO LLC’s controlling interest in Southern Peru Copper Corporation (SPCC). The judge ruled that “AMC closed the SPCC transaction with actual intent to hinder or delay some of ASARCO’s creditors.”

Judge Hanen also found that AMC had an agreement with ASARCO’s directors “to abandon their duties to ASARCO and ASARCO’s creditors and instead act to structure and accomplish the SPCC transfer, knowing that the transaction as contemplated would constitute a transfer in fraud of ASARCO’s creditors.” Judge Hanen further ruled that “the damages suffered by ASARCO’s creditors are a proximate result of this conspiracy between AMC and ASARCO’s directors.”

Judge Hanen has requested the parties in the suit to submit briefs on an appropriate remedy by September 15, 2008, and has promised an expeditious ruling.

ASARCO is seeking disgorgement of the SPCC interest that AMC transferred to itself in 2003 and $1.85 billion in dividends that would have been paid to ASARCO since 2003 if the transfer had not taken place. The total relief sought exceeds $8 billion.

ASARCO filed for chapter 11 bankruptcy protection on August 9, 2005. Its parent, ASARCO Incorporated, a wholly owned subsidiary of AMC, lost control of ASARCO in December 2005, when the bankruptcy court appointed an independent board of directors to manage the company.

Very few companies push the envelope when it comes to marketing their product like Apple (AAPL), however we found out that even they are not outside of the confines of the law.  Recently Apple advertised they said “all the parts of the internet are on the iPhone”.  See the commercial below:

However it turns out that, as amazing as the new iPhone may be, it cannot access “all parts of the Internet”.  There are several sizable technology components such as Flash Video and Java Script that do not work on Apple’s wireless device.  Apple attempted to defend the claim by saying that the intent of the assertion was simply to state that the iPhone’s web browser could access any website, but not every particular service.  However, considering that some of the most popular websites are not able to fully render on the phone, the courts ruled that Apple was misleading the public with their ads, see below for the official statement,

“We noted Apples argument that the ad was about site availability rather than technical detail, but considered that the claims “You’ll never know which part of the internet you’ll need” and “all parts of the internet are on the iPhone” implied users would be able to access all websites and see them in their entirety.  We considered that, because the ad had not explained the limitations, viewers were likely to expect to be able to see all the content on a website normally accessible through a PC rather than just having the ability to reach the website.”

So regardless how large your brand reach is, accurate advertising is a prerequisite to keeping legally clean.  And if you are working for a publicly traded company, make sure that each piece of marketing material that is displayed to the public is true.