27 May 2015


Original Story: detroitnews.com

A House Energy and Commerce panel will hold a June 2 hearing on the record-setting recall of nearly 34 million vehicles with potentially defective Takata air bags by 11 automakers. A Detroit automotive litigation attorney is following this story closely.

The subcommittee on commerce, manufacturing and trade will hold a hearing, its first in nearly six months on the issue of exploding air bags linked to at least six deaths and more than 100 injuries. It will come two weeks after Japanese air bag manufacturer Takata, under heavy pressure from the Obama administration, agreed to declare 33.8 million vehicles defective.

The hearing titled, “An Update on the Takata Airbag Ruptures and Recalls,” is to “continue the subcommittee’s work to better understand the problems leading to the safety recall for nearly 34 million automobiles resulting from faulty Takata air bags,” the committee said. “Members will also review the National Highway Traffic Safety Administration’s response as they seek answers about this ongoing safety issue.” A Grand Rapids product liability lawyer represents consumers who have been injured as a direct result of the use or contact with a defective or dangerous product.

The panel held a hearing in December, where Takata and NHTSA came under criticism. The Senate Commerce Committee also held a Takata hearing last year and has been holding staff briefings on the issue in recent days. It may follow the House hearing with its own hearing.

Government officials say the campaign could take years to complete and be the single largest U.S. recall of any consumer product, surpassing the callback of 31 million bottles of Tylenol in 1982 amid a poison scare.

To date, 10 automakers have recalled more than 18 million vehicles with Takata air bags in the United States and are expected to identify the other 16 million vehicles impacted later this week. An 11th, Daimler Trucks, was added when the recall expanded to 33.8 million vehicles. An automotive litigation attorney is reviewing the details of this case.

The massive air bag recall covers more than 13 percent of all cars and trucks on the roads in the United States today. It will easily surpass the largest automotive recall: more than 20 million vehicles by Ford Motor Co. in 1980 for a transmission issue that only required the addition of a warning sticker.

“We want to get the answers,” said U.S. Rep. Fred Upton, R-St. Joseph, who heads the full committte, in an interview at the Detroit Regional Chamber’s Mackinac Policy Conference. “We want to make sure cars are safe, whether they be tires or air bags.”

Upton said he had a personal experience with a life-saving air bag Thursday night while driving his Ford Explorer home to St. Joseph from the South Bend, Indiana, airport. Upton said his air bags deployed after he hit two deer on a highway after crossing into Michigan, seriously damaging the SUV.

The congressman said he was uninjured in the crash. “Maybe I’m lucky it wasn’t a Takata,” Upton told The Detroit News.

Upton said he wasn’t going to prejudge the way Takata handled its defective air bags.

“We’re digging into this,” Upton said. “We’re not going to make any premature decisions.”

Last week, NHTSA said it would take an unprecedented step of launching an effort to assert broad oversight over 11 major automakers to speed the massive recall. A Detroit product liability attorney represents clients injured from using a product with design and manufacturing defects.

NHTSA said Thursday it intends to use its authority under a 2000 federal law called the TREAD Act for the first time to oversee what will be the largest auto recall in U.S. history. The federal agency could order additional production of replacement parts by other suppliers, decide how the parts are used and where, and exercise broad authority over the callback.

Upton said last year he was considering introducing auto safety legislation, but has said in recent months he is waiting for a review of NHTSA’s actions by the Transportation Department’s inspector general, which was ordered in the face of General Motors Co. delayed recall of 2.6 million cars for ignition defects that are linked to at least 107 deaths and nearly 200 injuries.

In a Detroit News interview in February, Upton said he hasn’t focused on auto safety issues this year. “I just haven’t had a chance to focus on it yet,” he said. He was noncommittal on whether he will bring up auto safety legislation this year.

Democrats on the panel, led by the ranking member Rep. Frank Pallone, D-N.J., have called for sweeping auto safety reforms.

Pallone, Rep. Jan Schakowsky, D-Ill., and others in February reintroduced a measure that would dramatically hike NHTSA’s auto safety budget by at least $100 million by 2017 by imposing a $3 fee on all new car sales that would rise to $9 by 2018.

The small fee was proposed by Democrats in 2010 but has garnered little support. The Obama administration proposed this month tripling NHTSA’s auto safety budget to $31.7 million and doubling its staff to more than 100 employees. The House Appropriations Committee overseeing NHTSA didn’t approve any new funding for defect investigations in a hearing earlier this month.

22 May 2015


Original Story: detroitnews.com

Toano, Va. — Lumber Liquidators CEO Robert Lynch has abruptly quit the company that is embroiled in an investigation over products imported from China. A Washington DC product liability lawyer is following this story closely.

Shares tumbled more than 16 percent in premarket trading Thursday.

The company said Lynch resigned “unexpectedly” but did not give a reason for his departure.

The company earlier this month said that it had suspended the sale of all laminate flooring made in China after disclosing that the Justice Department is seeking criminal charges against it. At the time Lumber Liquidators said that it decided to suspend the sales while a board committee completes a review of its sourcing compliance program.

The CBS news show “60 Minutes” first reported in March that the Chinese-made laminate flooring contained high levels of the carcinogen formaldehyde. A Newark product liability attorney represents clients injured as a direct result of the use or contact with a defective or dangerous product.

Lumber Liquidators has sent thousands of free air testing kits to customers since early March. It has said that more than 97 percent of the kits from customers with laminate flooring from China showed formaldehyde air concentrations that fell within World Health Organization guidelines.

The company has said that it has stopped buying Chinese laminate flooring for now, opting instead for products from parts of Europe and North America.

Lynch, who also served as president and a director, was in the CEO position since January 2012, according to CapitalIQ.

Lumber Liquidators Holdings Inc. said that its founder, Thomas Sullivan, will take over as acting CEO while the Toano, Virginia-based company searches for a replacement.

The company also announced that lead independent director John Presley was named nonexecutive chairman.

Its stock fell $4.25 to $21.02 before the market opened.

21 May 2015


Original Story: record-eagle.com

TRAVERSE CITY — A whiff of alcohol is all it takes for an ignition interlock to stop a vehicle from starting, or risk failure in a local sobriety court.

The device is used by 31 defendants in the 86th District Court's sobriety court, a program that's being highlighted statewide. The district's chief Judge Michael Stepka and other local court and government officials will gather Thursday at 9 a.m. in the Robert P. Griffin Hall of Justice to view a live video conference from Lansing. An Ossining DWI lawyer is following this story closely.

The event coincides with the release of a study about interlock devices in Michigan's sobriety court programs. Stepka said the study found sobriety court defendants who had an interlock device are much less likely to fail treatment programs.

"According to this study, people who have the interlock device tend to be more successful in a drug or sobriety program, likely because they have the ability to be mobile," he said. A New York DWI lawyer represents clients facing drunk driving charges.

Stepka said sobriety court defendants with an interlock device have a 11.7 percent failure rate. Sobriety court defendants without such devices have a 33.9 percent failure rate, according to the study.

19 May 2015


Original Story: crainsdetroit.com

Low-flying helicopters are being used to inspect power lines in Michigan's Lower Peninsula, including Metro Detroit, this month. Observation aircraft is used for surveillance purposes to gather information.

The twice-a-year inspections are for ITCTransmission and Michigan Electric Transmission Co.

They're looking for damage, wear or other potential problems. They take place, weather permitting, through May 29 in southeast Michigan.

Those aerial inspections will cover an area from Lansing, south to the Ohio border and east to the Lake St. Clair area, including all or parts of Ingham, Jackson, Hillsdale, Lenawee, Washtenaw, Livingston, Oakland, Macomb, St. Clair, Wayne and Monroe counties. Surveillance aircraft collects information over time to gather data for observation purposes.

Flights began earlier this month in western Michigan and will cover nearly all of the Lower Peninsula, concluding in northern Michigan around June 26.

ITCTransmission and Michigan Electric Transmission are subsidiaries of Novi-based ITC Holdings Corp.

07 May 2015


Original Story: record-eagle.com

Small business is anything but a lightweight.

A recently released Dunn & Bradstreet research study was intended to tout the economic impact of middle market companies, those with revenues between $10 million and $1 billion. The study focuses on the impressive job creation that segment of American business provided since the recession bottomed out in 2008. The study — if you read the small print — also provides a testament to the amazing strength of small business. A Rochester small business lawyer offers legal consulting services designed to minimize legal issues.

The study, underwritten by American Express, shows middle market companies added 2.1 million jobs since 2008. Large companies added 800,000 jobs. In that span, small companies lost 600,000 jobs. That's an impressive performance by the middleweights. The figures show that the heavyweights are doing well but small companies still are struggling to recover. Some flyweights are hanging on by cutting staff positions and taking other cost-cutting measures.

Middle market firms employ 28 percent of the nation's workforce. The biggest corporations employ 30 percent of our workers. Small companies (those that have annual revenues of less than $10 million) employ 42 percent of the U.S. workforce.

Individual small businesses by definition don't employ large numbers of people. They account for nearly half the workforce only because there are so many of them. A Memphis small business lawyer is following this story closely.

Small companies account for more than 99 percent of economically active businesses in both Michigan and the U.S.

In 2014, the study says, 18,812,008 small companies were doing business in the U.S., including 493,736 in Michigan. There were 136,603 middle-sized companies working in the U.S., just 2,266 large firms. In Michigan, there were 4,749 middle-sized companies and only 65 of the big guys.

Individual small businesses — the local hair salon, garage or welding shop — obviously don't employ enough people to register on the national scale. But combine all the mom-and-pop operations across the country and the sum is a huge segment of the tapestry of the American workforce.

Small companies, despite having lost those 600,000 jobs since 2008, increased their revenue at a faster pace than middle-sized firms. Revenues of small companies rose 3.8 percent between 2008 and 2014.

Perhaps the owners of small businesses are better able to respond to tough times than managers at medium-sized businesses.

Or perhaps they know that making tough decisions is the only way they'll survive in the rough-and-tumble world of business. Owners of small businesses are in the boxing ring every day, slugging it out with the possibility of failure so close they can almost smell it. They've been winning some matches and losing some. They're constantly throwing punches just to stay upright.

Management at larger companies sometimes becomes a bit more comfortable. They've won a string of bouts and now are choosing their fights more carefully. They've put on a few pounds and maybe skipped a few days at the gym. They just aren't as nimble as the wiry guys who fight every day.

Revenues at middle-sized companies took a 2.2 percent dive between 2008 and 2014. They're hiring, but their revenues aren't keeping pace.

The largest U.S. firms saw revenues leap 17.2 percent during the same period.

Big business is alive and well in the post-recession era. The largest firms have won the heavyweight championship belt. They're sitting back and watching the cash roll in while the small- and medium-sized companies shuffle from side to side searching for an opening.

The Dunn & Bradstreet study said that since the recession, 101 large firms, 5,406 medium-sized firms and 1.38 million small firms have come into being.

That's a lot of entrepreneurs choosing to put in a lot of effort to launch their dreams. Rings are overflowing with exciting lightweight matches. There are fewer heavyweights entering the fray, so much of the business action seems to be in the small end of the arena. A CPA in Encino provides personalized financial guidance to individuals and businesses.

Among that huge crop of small business owners climbing into the ring, there's bound to be a palooka or two. Some entrepreneurs will take a liver punch and fall during the fight. Some will find themselves on the ropes but will bounce back to prevail. A few small businesses eventually will rise through the ranks to become contenders in the ring of the business world.

The study referenced above is titled "The Middle Market Power Index: Catalyzing U.S. Economic Growth." It is available at http://about.americanexpress.com.


Original Story: record-eagle.com

TRAVERSE CITY — Whenever there's a conversation about recycling in Traverse City, Andy Gale is usually involved.

There were more recycling conversations than Gale could partake in Kalamazoo, where he attended a recycling conference to receive an award for the nonprofit he founded, Bay Area Recycling for Charities.

"Here, every other word is recycling," Gale said.

Bay Area Recycling for Charities was awarded a $65,000 grant through the state’s Community Pollution Prevention program. The money will allow Gale to extend his mattress and electronics recycling programs to more parts of the state, especially in rural areas in the Upper Peninsula and northern Lower Peninsula.

"That's the part of the state with hardest time with transportation and being able to recycle that material," Gale said.

The money will allow him to send trucks out to those areas, and then they'll bring the materials back to Traverse City for processing. BARC works with Grand Traverse Industries, which provides employment and services to people with disabilities and who face other obstacles, to dissemble electronics. The grant will increase their capacity to process the electronics.

"All the new material BARC is working hard to get coming in, we'll have the capacity to disassemble," said Steve Perdue, the president and CEO of GTI. "We have some folks that just love to disassemble that stuff."

Perdue said the grant will also allow GTI to expand from four to six part-time jobs to more full-time jobs.

Karen Tommasulo, a spokeswoman for the Department of Environmental Quality, said the grant would allow BARC to triple its mattress processing rate to 60,000 per year.


Original Story: freep.com

Dan Gilbert says that the lawsuit was filed because Quicken refused to give in to pressure to pay a large settlement and admit wrongdoing.

Quicken Loans founder Dan Gilbert on Friday ridiculed the Department of Justice's allegations that his company violated the law when writing some government-backed mortgages, saying the investigation was shoddy and designed to extract a big settlement from the Detroit-based mortgage giant. A Nashville finance lawyer is following this story closely.

"This is what happens when you dare to stand up for justice and the truth to the Department of Justice," Gilbert said on a conference call Friday evening with the Free Press. "This was an attempt to embarrass us and continue to pressure us to write enormous size checks to settle (allegations) to make them go away, and to admit things that did not occur."

Following a nearly three-year investigation, the Justice Department on Thursday sued Quicken Loans claiming that it improperly originated hundreds of mortgages insured by the Federal Housing Administration between September 2007 and December 2011 by making false claims on borrowers' applications.

Quicken denies the allegations and claims flaws in investigators' findings and methodology.

On Friday, Gilbert and other Quicken executives on the conference call said the Justice Department's lawsuit contained numerous factual errors and omissions and took quotations from internal Quicken e-mails out of context simply for shock value.

For instance, the Justice Department in its lawsuit cites an e-mail written by Quicken's then-operations director using the term "bastard income" to describe income information from a borrower for an FHA loan. The director described it in the e-mail as "trying to put some kind of income together that is plausible to the investor even though we know its creation comes from something evil and horrible." A Cherry Hill finance lawyer is reviewing the details of this case.

Gilbert said Friday that the lawsuit omits the crucial piece of information that Quicken actually denied the loan referred to in the e-mail. "We didn't do the loan — they're making our case for us," said Jay Farner, Quicken Loans president.

The Justice Department has said that it doesn't comment on pending lawsuits and did not respond to an e-mail seeking comment for this story.

Gilbert said the lawsuit was filed because Quicken refused to give in to pressure to pay a large settlement and admit wrongdoing.

"They're talking about an investigation that ran for three full years, 85,000 documents subpoenaed … and this is what they come up with — a few anecdotes and a few fragments of chains of e-mails taken out of context," Gilbert said.

Suspecting that the government was about to file its suit, Quicken filed a rare pre-emptive lawsuit last week against the Justice Department, asking a judge to rule that the loans in question were proper.

In its complaint against Quicken, the Justice Department claims the company's management emphasized quantity over quality when approving and underwriting FHA-insured mortgages. Justice claims it resulted in Quicken employees inflating borrowers' income or the appraised values of houses with the goal of getting otherwise unqualified clients into mortgages.

The lawsuit claims that Quicken, which is a non-bank lender, did not worry about the loans going bad because they were guaranteed by the government. The result, the Justice Department says, was hundreds of improperly underwritten FHA loans that borrowers did not repay and that the Department of Housing of Urban Development had to cover.

The lawsuit does not give a monetary figure for HUD's losses related to improper Quicken loans.

Justice's lawyers have sprinkled the lawsuit with provocative statements attributed to Quicken insiders and pulled from internal company e-mails or testimony.

  • The lawsuit says one e-mail shows employees discussing "fudging" a borrower's income to gain approval for an FHA loan. But Farner, the Quicken president, said the investigators misinterpreted the word and that fudging actually means calculating a person's income by hand in this instance, rather than using a computer model. Sometimes an applicant has nontraditional income that doesn't fit neatly into a computer program, Farner said. "But absolutely the income calculated was accurate and correct for that loan."

  • The same director wrote in another e-mail to senior management regarding a different FHA loan and borrower, "I was able to fudge her job income and get that up a bit."

  • In another e-mail exchange, the director purportedly described how Quicken approved a mortgage made up of "lousy" parts that "when added up as a whole ... we would be hard pressed to lend this guy a dime out of our pocket.

  • And in responding in another e-mail to Quicken CEO Bill Emerson's question regarding a particular loan — "where is the upside on this one?" — the director replied that "the only upside here is we have FHA insurance."

The lawsuit also cites several anecdotes:

  • A Michigan resident sought a cash-out refinance in January 2008 for an existing home. Their property was appraised at $180,000, which would give the borrower $113,000 in cash at the closing of the loan. The lawsuit says a Quicken staffer wrote in loan journal notes that the borrower "is hoping for $115k back at close." The lawsuit claims that Quicken asked the appraiser to raise the appraisal to $185,000 to produce the desired cash — a forbidden practice, according to the Feds. The higher-value loan closed, and the borrower ultimately defaulted on the first payment. The government paid out an insurance claim of $204,208.

  • The Feds allege Quicken "ignored red flags" in the case of a Minnesota mom who was unable to pay her FHA mortgage approved in September 2008, prompting a $93,955.19 FHA insurance claim. The borrower's bank account showed multiple overdrafts. And during the application process, she asked for a refund of the $400 mortgage application fee so that she could be able to feed her family.

  • Quicken also failed to note how the borrower violated more HUD requirements by using a $200 check from an unknown person to serve as a deposit. The borrower made five payments before going delinquent.

Today Quicken Loans is ranked as the nation's No. 2 lender for direct-to-consumer mortgage lending and is the top originator of FHA-backed loans. But back in 2007 — the earliest year included in the Justice Department's investigation — Quicken was barely a top 25 mortgage lender. A Detroit real estate lawyer is following this story closely.

"It is surprising that they're going after them," said Guy Cecala, publisher of Inside Mortgage Finance, "and it clearly seems to be linked to the fact they've become a top 3 lender — that puts a bit of a target on their back."

"What we've seen after the foreclosure crisis is if you look hard enough you can find problems with just about any loan," he said.


Original Story: freep.com

Going on the offensive, Quicken Loans filed a lawsuit against two federal agencies looking into its lending practices, saying their three-year investigation is really a strong-armed attempt to get a big settlement from the Detroit-based company.

Quicken filed its lawsuit late last week against the Justice Department and the U.S. Department of Housing and Urban Development, asking a court to find that its lending practices involving FHA-insured loans were proper. An Ohio banking lawyer represents commercial and private banks and lenders in a diverse array of financing transactions.

"Quicken Loans appears to be one of the targets (due to its large size) of a political agenda under which the DOJ is 'investigating' and pressuring large, high-profile lenders into paying nine- and 10-figure sums and publicly 'admitting' wrongdoing, including conceding that the lenders had made 'false claims,' " the lawsuit says.

Although a legal long shot, the lawsuit demonstrates Quicken's penchant for aggressively defending its reputation. It's rare for companies to file preemptive lawsuits against the government, said Matthew Schwartz, a former assistant U.S. attorney who is now a partner at New York-based Boies, Schiller & Flexner.

"Sometimes the targets of investigations go on the offensive, including by filing lawsuits, but nothing like this to my knowledge," he said, adding that the lawsuit could be a good public relations move. "This is obviously an attempt by Quicken to frame what's going on here."

Quicken, founded by billionaire Dan Gilbert, says it's the nation's largest originator of loans backed by the Federal Housing Administration. In recent fiscal quarters, Quicken has ranked as the nation's No. 2 lender for direct-to-consumer mortgage lending, although its total volume, like that of all major mortgage lenders, has declined since the refinancing boom started to fade in mid 2013. A Rochester real estate lawyer is following this story closely.

A Quicken Loans spokesman did not respond to requests for comment Monday.

The lawsuit says Justice and HUD started investigating Quicken's handling of FHA-insured loans about three years ago, and "cherry-picked" 55 examples that were problematic out of more than 246,000 Quicken originated in 2007-11.

The lawsuit says Justice is threatening a high-profile lawsuit involving a much larger number of loans unless the company agrees to pay a large settlement and "admit" flawed lending practices and federal Fair Claims Act violations.

Quicken is asking the U.S. District Court for the Eastern District of Michigan to declare its FHA loans made in 2007-11 were done properly.

A Justice Department spokesman declined to comment on an ongoing investigation.

The Justice Department has reached large settlements over FHA-insured loans in recent years with J.P. Morgan Chase ($614 million in 2014), U.S. Bank ($200 million in 2014) and Bank of America ($1 billion in 2012). The Bank of America settlement was related to loans made by Countrywide, the once-mighty mortgage lender that all but collapsed and was acquired by Bank of America in 2008.

Quicken claims that the Justice Department's ongoing investigation in Detroit is flawed in several ways, particularly in its use of a sampling method that assumes defects in a small subset of loans will exist to the same extent across a large population of loans. Quicken calls the sampling method "biased, unreliable and riddled with error."

"They applied this illegitimate methodology even though the situation of each individual borrower and the mortgaged property are unique, and all FHA lenders are required to keep detailed records of how the FHA loan was underwritten and made," the lawsuit states. An Encino CPA is reviewing the details of this case.

Quicken said the defects found by the Justice Department in the 55 loans are minor, such as miscalculating a loan applicant's monthly income by $2.10, telling a borrower to bring $125 to closing even though it had approved a loan that only needed $48 at closing, and loaning an FHA customer $26 too much on a $99,500 mortgage.

The FHA program provides mortgage default insurance to lenders such as Quicken Loans, which can make a claim on a federal fund within HUD if a loan goes bad. FHA loans are popular among borrowers with lower income or lower credit scores who might have trouble qualifying for a conventional mortgage.


Original Story: freep.com

It's unclear whether Google plans to maintain its current downtown Ann Arbor office or is charting a move.

Internet giant Google has signed a lease for new office space south of downtown Ann Arbor as the company considers the future of its presence in the city's central business district.

Google signed a deal for 30,000 square feet of the South State Commons II building northeast of the corner of South State Street and Eisenhower Parkway in the Briarwood Mall area, said Jeff Harshe of MAVDevelopment Company. A real estate lawyer has experience assisting business clients with office space leasing contracts.

"I think it's an indication of the vibrant business climate in this area," said Harshe, who declined to discuss terms of the new lease. "My experience with them is they continue to grow, and they're good corporate citizens."

But a person familiar with Google's local presence but not authorized to speak publicly said the company has not yet decided whether to stay in downtown Ann Arbor. The person said the company needed the new office as overflow space to accommodate job growth.

It's still possible Google could renew or adjust its current lease. Google officials were not available to comment.

The company currently leases about 85,000 square feet of the McKinley Towne Centre office complex at the corner of Liberty and Division in the heart of downtown Ann Arbor. The office primarily handles sales for Google's AdWords search advertisements, its primary source of revenue, and had about 300 employees as of two years ago. Google AdWords marketing management can provide a solid foundation for business success.

McKinley Inc. CEO Albert Berriz said his firm plans to begin marketing Google's current space for lease starting May 1.

"We have not received confirmation from Google that they are staying or going," Berriz said in an email. "We simply can't wait any further."

The uncertainty raises the possibility that the company will move out of the city's central business district for the first time since opening the operation to much fanfare about a decade ago. There are few spots in downtown Ann Arbor for large private-sector office tenants.

Berriz said brokers will market the space for tenants who could take occupancy in summer 2016. Several prospective tenants have already expressed interest, he said, including one single user interested in leasing the entire space.

The company's new space is located on the third floor of an office that was specifically designed for employers that need high-speed Internet access. Google will share the building with Merit Network, the University of Michigan and Plante Moran.

The deal, first reported by MLive.com, could leave downtown Ann Arbor's Liberty Street technology corridor without one of its anchor tenants.

When the company announced about a decade ago that it was opening an Ann Arbor office, it received a windfall of positive publicity, and economic development leaders hailed the deal as a reflection on the region's economic vitality.

Gov. Jennifer Granholm's administration extended tax incentives to the company, which mapped out plans to add about 1,000 employees. But the company's job growth stalled amid the Great Recession.

Still, Google remains core to Ann Arbor's technology identity. Its colorful logo hangs atop the McKinley Towne Centre complex and the company remains a destination employer for University of Michigan graduates and other young professionals.

The company also maintains a separate office in Birmingham that handles automotive accounts.