Week Adjourned: 10.15.10

Citigroup women coming up empty-handed?Top Class Actions 

Equality? What equality! Where’s Gloria? A gender discrimination lawsuit was filed against Citigroup this week, brought by five former directors and analysts and one current employee.

Interestingly, Bloomberg crunched the numbers and found out that Citigroup’s female finance managers, which include bank tellers as well as executives, earned 63.9 cents for every dollar of income men earned in 2000, based on median salaries. Bloomberg analyzed Government Accountability Office (GAO) statistics to produce its report. And, they also found that in 2007, the last year for which data are available, that figure was down—incredibly—58.8 cents. Not only is that number utterly depressing, but it’s going in the wrong direction! 

The suit, filed on behalf of women at job levels from analyst to managing director, alleges that Citigroup is an “outdated boys club” and claims “systematic and pervasive discrimination and retaliation” in decisions involving compensation, promotion and termination.

Top Settlements

Beat Finally Does Go On… Finally—unbelievably, a settlement of the lawsuits against Medtronic over defective Sprint Fidelis leads.

The leads were recalled three years ago in 2007, due to the alleged defect that made the wires crack. The leads are wires that connect implantable devices to the heart so that an electric shock can be sent to the heart in patients whose hearts are not beating correctly.

While the settlement amount might seem large—an announced $268 million—more than 250,000 leads were implanted in patients prior to the recall. And, Medtronic reportedly estimated that by 2009 at least 13 fatalities may have resulted from the defective product

According to a report in the NY Times, Medtronic and the plaintiffs will file requests to dismiss plaintiffs’ appeals pending in the US Court of Appeals for the Eighth Circuit and the Minnesota Court of Appeals, So presumably, all parties must be satisfied, including the attorneys, as the settlement amount includes their fees. 

And, Medtronic Inc. said the parties also will seek to dismiss Fidelis-related cases nationwide, the NY Times reported.

Out, Damned Drywall! Out I Say! And, we have a bit of a landmark in the ongoing Chinese drywall saga. An interesting settlement was reached this week—or at least it was announced this week—to remediate homes affected by Chinese drywall.  

In nutshell, Knauf, a key defendant in the drywall litigation, together with builders, suppliers and insurers, will fund a demonstration remediation program which will facilitate the removal of KPT drywall from up to 300 homes in Alabama, Mississippi, Louisiana and Florida. If successful, it is expected that this pilot program will be expanded to remediate thousands of homes with KPT drywall.

The agreement includes several key defendants, namely Knauf Plasterboard Tianjin (KPT), builders, drywall suppliers and their insurers including Interior/Exterior Building Supply, Banner Supply Co., the Louisiana Homebuilders Indemnity Trust, QBE Insurance Group, Chartis and State Farm Insurance, and other Knauf entities.

The demonstration program applies to homes which contain all, or substantially all, KPT drywall. As outlined in the settlement, KPT will retain and supervise contractors to do the work on a cost-effective basis. The completed homes will be inspected by environmental engineers, who will certify to the homeowner that their home is free of problem drywall odors and contamination. 

And, as a side note, but equally important for those affected, on September 30, 2010, the Internal Revenue Services (IRS) made public its Revenue Procedure 2010-36—which implements tax breaks for people whose homes contain or contained the toxic stuff.

In short, the IRS is allowing taxpayers to claim a casualty loss on the repairs of the drywall and any household appliances that were affected—against their taxes.

Apparently, this tax break is the first large-scale effort by the federal government to provide financial relief to victims of Chinese drywall. The IRS says it will give tax breaks to homeowners who suffered property losses due to bad Chinese drywall installed in their homes between 2001 and 2009.

Ok – that’s it for this week. I hear the bar calling my name.

Photo: Michal Marcol.

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