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Court rules against HealthSouth in auditor dispute
Press Release |
2014/06/16 20:56
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The Alabama Supreme Court ruled against Birmingham-based HealthSouth Corp. on Friday in a legal dispute linked to the accounting fraud that rocked the rehabilitation company more than a decade ago.
The justices rejected an appeal filed by HealthSouth in a legal fight involving its one-time auditing company, Ernst & Young.
Shareholders filed a complaint on behalf of HealthSouth blaming Ernst & Young for failing to detect the $2.6 billion accounting scam that occurred under former CEO Richard Scrushy, who was acquitted of criminal charges in 2005. A civil court later held him responsible for the swindle.
An arbitration panel ruled against HealthSouth in a complaint aimed at making Ernst & Young share responsibility for the fraud, and HealthSouth appealed to Jefferson County Circuit Court. That court sided with the auditor, and HealthSouth appealed again.
The Supreme Court, in a decision written by Justice James Main, upheld the ruling against HealthSouth. The justices said there was no evidence the arbitration decision against HealthSouth was fundamentally unfair or that the panel engaged in any misconduct.
Evidence showed HealthSouth inflated its earnings by some $2.6 billion from the late 1990s through the early 2000s, when the scheme was uncovered. Fifteen HealthSouth employees pleaded guilty and jurors convicted one other.
Scrushy blamed everything on underlings but later served time in federal prison after being convicted in a bribery scheme involving former Gov. Don Siegelman, who remains in prison in Oakdale, La.
Scrushy, who maintains his innocence to all charges, now lives in Texas and sometimes lectures about corporate fraud.
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Court rules against homeowners in toxic water case
Press Release |
2014/06/10 19:07
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The Supreme Court says a group of homeowners in North Carolina can't sue a company that contaminated their drinking water because a state deadline has lapsed.
The justices ruled 7-2 on Monday that state law strictly bars any lawsuit brought more than 10 years after the contamination — even if residents did not realize their water was polluted until years later.
The high court reversed a lower court ruling that said federal environmental laws should allow the lawsuit against electronics manufacturer CTS Corp. to proceed.
The decision is a setback for the families of thousands of former North Carolina-based Marines suing the federal government in a similar case for exposing them to contaminated drinking water at Camp Lejeune. The government is relying on the same state law to avoid liability. |
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Washington wants pot tax trial in state court
Press Release |
2014/06/03 18:58
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The state attorney general's office has asked a federal judge in Seattle to dismiss a lawsuit challenging Washington's authority to tax marijuana sales.
In the motion Friday to U.S. District Judge Marsha Pechman, the state says Martin Nickerson failed to appeal the tax assessments in a timely manner and that the issue should be resolved in state court.
The case arises from the state's attempt to collect sales taxes from a medical marijuana dispensary in Bellingham. Attorney Douglas Hiatt, who represents Nickerson, said it could throw a wrench in Washington's plans for collecting taxes on recreational marijuana, too.
The lawsuit challenges Washington state's authority to tax marijuana as long as marijuana remains illegal under federal law. |
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Court: Ohio overcharged employers for years
Press Release |
2014/05/16 21:33
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The director of the state insurance fund for injured workers said Friday that he's disappointed with an unusually pointed appeals court decision that says the fund overcharged employers by hundreds of millions of dollars.
Steve Buehrer, Ohio Bureau of Workers' Compensation administrator and CEO, said the agency is considering its options.
Buehrer said he's pleased the court recognized that many businesses benefited from a program that put companies in group rating plans. But the court also said the plans resulted in nearly 300,000 companies being overcharged.
The 8th Ohio District Court of Appeals on Thursday said the plans amounted to an illegal rating system that resulted in employers being overcharged nearly $860 million over several years. It said the agency set up a system of winners and losers by giving discounted premiums to companies that joined group insurance plans and charging companies outside of the plans excessive rates to pay for the discounts.
"Reduced to its essence, this appeal is about a cabal of Ohio Bureau of Workers' Compensation bureaucrats and lobbyists for group sponsors who rigged workers' compensation insurance premium rates so that for employers who participated in the BWC's group rating plan, it was 'heads we win,' and for employers who did not participate in the group rating plan, it was 'tails you lose,'" the court said.
The court's unanimous ruling affects about 270,000 mostly small-business owners who paid non-group premiums from July 2001 to June 2009. Many are unaware they are covered by the class-action lawsuit that lead to the ruling. |
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