/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000225.MBX C L A S S A C T I O N R E P O R T E R Friday, February 25, 2000, Vol. 2, No. 40 Headlines ADAM'S MARK: NAACP Backs Boycott of Hotel Chain Alleged of Racial Bias AURORA FOODS: Berman, DeValerio Files Securities Suit in California AURORA FOODS: Gene Mesh, Richard, B. Brualdi File Securities Suit in CA AURORA FOODS: Shepherd & Geller Files Securities Suit in California CA: CSU Professors to Address Media Before Challenging Unionism Law CHRISTIE'S, SOTHEBY'S: Judge to Consolidate Cases on Price-Fixing CINAR CORP: Responds to News on Filing of Securities Suit in New York CINAR CORPORATION: Milberg Weiss Files Securities Suit in New York CYLINK CORP: PA 2-Lawyer Firm Named Class Counsel in CA Securities Suit FOX TV: Paper Mentions Specter of Lawsuit for Cancelling of Program GORAN CAPITAL: Lowey Dannenberg Files Securities Suit in Indiana HMOs: Sp Ct Raises Questions on Challenge Re Doctors' Incentive Pay HOLOCAUST VICTIMS: Jewish Congress Criticizes Germany on Compensation IBP, INC: Marc S. Henzel Files Securities Suit in Nebraska INDUS INT'L: Schiffrin & Barroway Files Securities Suit in California NETWORK ASSOCIATES: Appeals Ct to Review Designation of Lead Plaintiff RITE AID: Ct Dismisses FL AG's Lawsuit Re Overcharging on Prescription SECRET SERVICE: Black Agents to File Suit with EEOC in WA over Bias SOTHEBY'S HOLDINGS: Detroit News Says Departures Leave Void at the Top SOTHEBY'S HOLDINGS: Marc S. Henzel Files Securities Suit in New York SOTHEBY'S HOLDINGS: Miller Faucher Files Securities Complaint in MI SUNSTAR HEALTHCARE: The Pomerantz Firm Files Securities Complaint SYKES ENTERPRISES: Pomerantz Haudek Files Securities Suit in Florida SYMONS INTERNATIONAL: Lowey Dannenberg Files Securities Suit in IN SYMONS INT'L: Lowey Dannenberg Files Securities Lawsuit in Indiana VISA, MASTERCARD: Fed Judge Certifies $24B Lawsuit on Alleged Monopoly WAR VICTIMS: British POWs Sue Japanese Firms under New CA Law ********* ADAM'S MARK: NAACP Backs Boycott of Hotel Chain Alleged of Racial Bias ---------------------------------------------------------------------- The NAACP has called for its members and other organizations to stop doing business with the Adam's Mark Hotels & Resorts chain, amid allegations of racial discrimination. Kweisi Mfume, president of the National Association for the Advancement of Colored People, also criticized the hotel's parent company for refusing to meet with lawyers for the civil rights group or the Florida attorney general to resolve a class action lawsuit against the hotel chain. ''That the Adam's Mark is trying to reach a partial settlement with the Justice Department while not talking to other parties to the lawsuit shows a lack of good intentions by Adam's Mark,'' Mfume said. The U.S. Justice Department charged the entire hotel chain with discriminatory practices on Dec. 16, claiming the chain charged blacks more than whites, offered them less desirable rooms and required larger security deposits from them. That same day, the Florida attorney general filed a motion to intervene in a class action lawsuit charging the Adam's Mark with discriminating against Black College Reunion visitors in Daytona Beach, Fla., last April. The NAACP is also a party in the class action lawsuit. The class action stems from a federal lawsuit filed by five black guests who said the Daytona Beach hotel singled them out as security risks and required them, but not white guests, to wear bright orange wristbands. In recent weeks, several groups have canceled conventions and backed out of room reservations at Adam's Mark hotels, citing the discrimination accusations. Fred Kummer, chairman and chief executive of HBE Corp., which owns 21 large, full-service hotels in 13 states, has denied the accusations. He said on February 22 the chain has been negotiating with the Justice Department to resolve that lawsuit. (AP Online, February 24, 2000) AURORA FOODS: Berman, DeValerio Files Securities Suit in California ------------------------------------------------------------------- Berman DeValerio & Pease LLP filed a class action in the United States District Court for the Northern District of California, on behalf of all persons who purchased common stock of Aurora Foods, Inc. between April 28, 1999 and February 17, 2000, inclusive (the "Class Period"). The action charges Aurora and certain of its officers with violations of the federal securities laws. The complaint alleges that Aurora and certain of its officers issued a series of materially false and misleading statements during the Class Period concerning the Company's financial performance for the first three quarters of 1999. Specifically, the complaint alleges that the Company improperly accounted for its promotional expenses paid to retailers of the Company's food products. As a result, expenses were allegedly understated and thereby earnings were materially inflated in violation of Generally Accepted Accounting Principles. On February 18, 2000, Aurora shocked the investment community by announcing that it would take a non-cash charge that would result in a "material reduction of earnings for 1999 and possibly a small loss for the full year." Additionally, the Company announced the resignation of four top officials, including its Chairman and Chief Executive Ian Wilson. Aurora also announced that its Board had formed a committee to investigate the Company's accounting practices. The market reaction to the news was swift and severe, as the market price of Aurora's common stock fell over 50%. Contact: Patrick T. Egan, Esq. Norman Berman, Esq. Berman, DeValerio & Pease LLP One Liberty Square, Boston, MA 02109 E-Mail: bdplaw@bermanesq.com tel. no. (800) 516-9926 or you may also get in touch with Jennifer S. Abrams, Esq. Berman, DeValerio, Pease & Tabacco PC 425 California St., San Francisco, CA 94104 E-Mail: jennifera@tabaccoesq.com tel. no.(415) 433-3200. AURORA FOODS: Gene Mesh, Richard, B. Brualdi File Securities Suit in CA ----------------------------------------------------------------------- Gene Mesh & Associates and the Law Offices of Richard B. Brualdi gave notice that a class action lawsuit was filed on February 23, in the United States District Court for the Northern District of California on behalf of all persons who purchased the common stock of Aurora Foods, Inc. (NYSE:AOR) between October 27, 1999 and February 18, inclusive (the "Class Period"). The complaint charges Aurora and certain of its senior officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder. The complaint alleges that defendants issued a series of false and misleading statements concerning Aurora's earnings. The complaint also alleges that because of the issuance of a series of false and misleading statements, the price of Aurora's common stock was artificially inflated during the Class Period. Contact: Gene Mesh & Associates Michael G. Brautigam, 888/221-8889 or 513/221-8800 AURORA FOODS: Shepherd & Geller Files Securities Suit in California ------------------------------------------------------------------- The Law Firm of Shepherd & Geller, LLC filed a class action in the United States District Court for the Northern District of California on behalf of all individuals and institutional investors that purchased the securities of Aurora Foods, Inc. between February 23, 1999 and February 17, 2000, inclusive. The complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information about the Company's financial results. As a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. On February 17, 2000, according to the complaint, Aurora admitted that its 1999 financial results were false. When these alarming truths were revealed, the Company's stock trading was halted. When trading was resumed, the price of the stock dropped significantly. Contact: Shepherd & Geller, LLC, Boca Raton, Paul J. Geller, 561/750-3000, Toll Free: 1-888-262-3131, E-mail: pgeller@classactioncounsel.com CA: CSU Professors to Address Media Before Challenging Unionism Law ------------------------------------------------------------------- California State University (CSU) professors will address the news media Thursday morning, Feb. 24, regarding their statewide class-action suit challenging the constitutionality of Governor Gray Davis' new forced-unionism law. Taking effect only weeks ago, the law allows union officials to seize as a condition of employment - $45 million in annual union fees from 75,000 University of California and CSU employees who do not want to associate with, or be represented by, a union. (U.S. Newswire, February 24, 2000) CHRISTIE'S, SOTHEBY'S: Judge to Consolidate Cases on Price-Fixing ----------------------------------------------------------------- A federal judge said on February 23 he planned this week to consolidate about 40 antitrust suits alleging commission price-fixing by auction houses Sotheby's Holdings Inc. and Christie's International PLC to determine whether the cases will get class action status. U.S. District Judge Lewis Kaplan said during a hearing he expected the litigation will be resolved in a year and set a tentative trial date of February, 2001, if no settlement is reached by that time. Litigation alleging the auctioneers conspired to set commission prices on art and antique sales has been escalating all month. (National Post (formerly The Financial Post), February 24, 2000) CINAR CORP: Responds to News on Filing of Securities Suit in New York --------------------------------------------------------------------- CINAR Corporation (NASDAQ:CINR) (TSE:CIF.A.) (TSE:CIF.B.) announces that, according to a press release issued on a news wire, the Company and certain of its directors and officers have been named as defendants in a class action proceeding filed in the United States District Court for the Eastern District of New York which alleges violations of United States securities laws and rules and regulations thereunder. CINAR has not yet been served with any complaint, and based upon the allegations contained in the press release the Company intends to defend the lawsuit vigorously. CINAR CORPORATION: Milberg Weiss Files Securities Suit in New York ------------------------------------------------------------------ The law firm of Milberg Weiss Bershad Hynes & Lerach, LLP filed a class action lawsuit in the United States District Court for the Eastern District of New York, on behalf of all persons who purchased the stock of CINAR Corporation between February 4, 1999, and February 18, 2000, inclusive (the "Class Period"). The complaint charges CINAR and certain of its officers and directors with violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants failed to disclose that the Company was falsely representing that scripts written by United States citizens were written by Canadian citizens in order to obtain favorable tax credits and that, as a result, the Company's financial results were artificially inflated. In October 1999, as alleged in the complaint, press reports revealed that CINAR was the subject of a tax investigation by Canadian federal authorities relating to the issue of whether the Company had improperly obtained tax credits available to Canadian-only television productions by falsely attributing scripts written by American authors to Canadians. At that time, the complaint alleges that defendants falsely characterized any impact from the investigation as not material. Then, on February 18, 2000, CINAR issued a press release announcing that at "a meeting of its Board of Directors, CINAR Corporation reported [on February 18] on the status of the reviews initiated by its management and Audit Committee of its Board of Directors in connection with certain allegations relating to Canadian content regulations with respect to its productions" and that the "financial and accounting impact" would be greater than initially anticipated. In response to this announcement, the price of CINAR stock plummeted by 27%. As alleged in the complaint, during the Class Period, without disclosing the aforementioned adverse facts, defendants raised more than $150 million through the sale of CINAR stock in a public offering. For additional information on the above-mentioned lawsuit, please contact, at Milberg Weiss Bershad Hynes & Lerach ("Milberg Weiss"), Steven G. Schulman or Samuel H. Rudman at One Pennsylvania Plaza, 49th Floor, New York, New York 10119-0165, by telephone 1-800-320-5081 or via e-mail: endfraud@mwbhlny.com or visit website at http://www.milberg.com CYLINK CORP: PA 2-Lawyer Firm Named Class Counsel in CA Securities Suit ----------------------------------------------------------------------- In an almost unheard of move, Judge Vaughn Walker, of the U.S. District Court, Northern District of California, named a two-lawyer class action firm from Philadelphia, Innelli and Molder, lead counsel in a suit against Cylink Corp. of Sunnyvale, California. In Wenderhold v. Cylink Corp. et al, Cylink is accused of grossly overstating revenue for the 1st and 2nd quarters of 1998, by 46% and 59% respectively, artificially inflating its financial picture. During that time, the complaint alleges, Cylink executives took advantage of the resulting artificially inflated prices to sell off thousands of shares of company stock. Judge Walker's unusual choice of counsel rose from his decision to select the best qualified lead counsel for the Cylink litigation through competitive bidding 'open to all comers'. Where previously judges awarded lead counsel status to plaintiffs with the biggest losses, Judge Walker followed the lead of a recent landmark ruling of U.S. District Judge William Alsop in re Network Associates (November 1999). Alsop's order held that judges have the discretion to award the lead plaintiff and lead counsel status as they see fit. After reviewing competitive bids from several leading national law firms, Judge Walker determined Innelli and Molder the best qualified, the "high bidder", to represent the Cylink shareholders. He based his decision on Innelli and Molder's quality of representation in securities class action litigation in other circuits and the depth of their understanding of the cases due to one partner being a C.P.A. and both having degrees in economics. He also stated that Innelli and Molder's small size gives them "an incentive to succeed" which will offer the shareholders more focused representation. Finally, Judge Walker noted as significant, that the Innelli & Molder firm offered to return 12-14% higher financial benefits to the class. Innelli and Molder has previously recovered large settlements for shareholders in other important cases of financial fraud such as Weill, et al. V. Triton Energy, Inc. ($8.1 million recovery for the class) and a jury verdict in Hoffman v. Geriatric and Medical Centers ($1.9 million recovery for the class). These successes can be attributed to Innelli's nineteen years of litigation experience and ability to clearly explain the anatomy of financial fraud, and Molder's seven years of S.E.C. audit experience as a C.P.A. and certified fraud examiner. Formed in 1996, Innelli and Molder is a small law firm in Philadelphia, Pennsylvania, emphasizing complex commercial litigation, in both individual and class action contexts. Contact: Innelli and Molder, Philadelphia Eileen Rosenau, 215/735-5512 or John F. Innelli, Esq., 215/627-3394 FOX TV: Paper Mentions Specter of Lawsuit for Cancelling of Program ------------------------------------------------------------------- A report in The Boston Globe, February 24, opens with the question, 'Why is Fox TV canceling "Who Wants to Marry a Multimillionaire?"' The report says this is urely not for reasons of taste or poor ratings, but the decision must have something to do with the specter of a monster lawsuit by the bride, possibly one by the bridegroom, too, and the other 49 contestants might have a case too, a class action suit. (The Boston Globe, February 24, 2000) GORAN CAPITAL: Lowey Dannenberg Files Securities Suit in Indiana ------------------------------------------------------------------ Lowey Dannenberg Bemporad & Selinger, P.C. has filed a securities class action lawsuit in the United States District Court for the Southern District of Indiana on behalf of purchasers of the common stock of Goran Capital Inc. during the period February 27, 1998 through November 18, 1999, inclusive (the "Class Period"). Plaintiffs' complaint alleges, among other things, that defendants violated the federal securities laws by issuing to the investing public reports filed with the Securities and Exchange Commission, financial statements, press releases and other public statements which falsely and misleadingly represented the reliability of Goran's reported financial statements and results, data processing and financial reporting systems, internal controls and/or loss reserves, thereby causing the market price of the common stock of Symons to be artificially inflated throughout the Class Period. For additional information on the above-mentioned lawsuit, you may contact Vincent Briganti, Esq. Lowey Dannenberg Bemporad & Selinger, P.C. The Gateway, 11th Floor One North Lexington Avenue White Plains, NY 10601-1714 Telephone: 914-997-0500 Telecopier: 914-997- 0035 E-mail: VBriganti@ldbs.com HMOs: Sp Ct Raises Questions on Challenge Re Doctors' Incentive Pay ------------------------------------------------------------------- Grappling for the first time with the complexities of managed health care, the Supreme Court raised a blizzard of questions on February 23 about a patient's challenge to a health maintenance organization that offered financial rewards to doctors as an incentive to hold down costs, Sun-Sentinel, February 24 says. After hearing arguments for an hour on issues that could affect more than 160 million Americans in employer-sponsored health plans, the court appeared skeptical about letting patients sue HMOs for offering such bonuses. The court wanted to know, what exactly does the patient in this case, Cynthia Herdrich, want as a remedy? She belatedly received the care she needed, after her appendix ruptured in 1992, and she won damages of $ 35,000 in a malpractice suit in Illinois state court. Finally, the justices wanted to know, if the HMO or its doctors have a "fiduciary duty" under federal law, does that mean they have a duty to act in the best interest of Herdrich -- or that they must conserve the assets of the health plan for all the people who get coverage through the same group? The argument in the case, Pegram vs. Herdrich, No. 98-1949, came as Congress was considering legislation that would set new standards for managed care and make it easier for patients to sue HMOs. In addition, lawyers across the country have filed at least 16 class-action suits alleging that HMOs skimped on care and misled patients by failing to disclose the techniques they use to control costs. The issue presented to the Supreme Court on February 23 was whether Herdrich, having won a jury verdict in state court, should be allowed to pursue her claim that her HMO violated its duty to her under the 1974 federal law. James P. Ginzkey, Herdrich's attorney, said Herdrich's HMO was riddled with conflicts of interest. The same doctors own the health plan, treat patients, decide whether to pay claims and are eligible to receive bonuses as a result of cost savings, he said. Justice Sandra Day O'Connor asked Ginzkey, "Why should the courts get into this slippery slope problem, when Congress has designed a scheme based on private funding of health care through HMOs that are privately owned, and there are inherent incentives to keep costs down?" Ginzkey conceded that some financial incentives to doctors were acceptable, and he said he was not asking the court to outlaw all such payments. But, he said, incentives are unacceptable if they have such "an undue influence" on a doctor's decisions that they adversely affect the quality of care. A decision in the case is expected by July. (Sun-Sentinel (Fort Lauderdale, FL), February 24, 2000) HOLOCAUST VICTIMS: Jewish Congress Criticizes Germany on Compensation --------------------------------------------------------------------- The secretary-general of the World Jewish Congress sharply criticized Germany on February 24 for the way it is handling negotiations on a compensation fund for Nazi-era slave and forced laborers. ''We have the impression that the preconditions under which the money will be made available are not justice and morality. It has to do with business and bringing an end to something,'' Israel Singer said in an interview to appear Friday, February 25, in the Berliner Zeitung daily. The German government and industry agreed in December to split a 10 billion mark ($ 5 billion) compensation fund to pay former slave and forced laborers of the Nazis. The fund was set up to head off class action suits in the United States, and German firms want guarantees they will be exempt from further court action if the fund finally starts operation. After the latest round of talks last week in Berlin, negotiators said they hope to reach final agreement on the fund at a meeting in Washington on March 7-8. But the U.S. envoy to the talks, Deputy Treasury Secretary Stuart Eizenstat, said there was still disagreement on how to divide the fund among forced laborers those deported from their home countries to work in factories and other enterprises in Germany and slave laborers, those held under ''work to death'' conditions in concentrations camps. Singer told the newspaper that the manner in which the negotiations are running are an insult to Germany. ''Germany cannot want that two groups of victims fight like hungry dogs over a piece of raw meat in the same room.'' He said he disagreed with the U.S. and German envoys to the talks that there had been progress in the drawn-out negotiations. ''It can't go on like this,'' he said. Singer told the newspaper that German President Johannes Rau should send a letter of apology to the victims in the name of the German people and industry for the way the negotiations have been handled. Rau had apologized in December to the victims and begged forgiveness on behalf of the German people. Estimates of the number of people who could benefit from the compensation fund run as high as 2.3 million, mostly non-Jews from eastern Europe. However, many of them are in the 70s and 80s, and Eizenstat said after the last round of talks he estimated that eligible survivors were dying at the rate of 1 percent per month. (AP Worldstream, February 24, 2000) IBP, INC: Marc S. Henzel Files Securities Suit in Nebraska ---------------------------------------------------------- The Law Offices of Marc S. Henzel filed a class action lawsuit in the United States District Court for the District of Nebraska on behalf of all purchasers of the securities of IBP, Inc. between March 25, 1999, and January 12, 2000, inclusive (the "Class Period"). The complaint charges IBP and certain of its senior officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants issued a series of materially false and misleading statements concerning the Company's compliance with state and federal protection laws applicable to the Company's beef and pork production facilities. Because of the issuance of a series of materially false and misleading statements the price of IBP securities was artificially inflated during the Class Period. The action further alleges that prior to the disclosure of the adverse facts described above, defendants intended to use millions of shares of artificially inflated IBP common stock as currency for a proposed corporate acquisition. For additional information on the above-mentioned lawsuit, you may contact Marc S. Henzel, Esq. of The Law Offices of Marc S. Henzel, 210 West Washington Square, Third Floor Philadelphia, PA 19106, by telephone at 888-643-6735 or 215-625-9999, by e-mail at Mhenzel182@aol.com or visit the firm's website at http://members.aol.com/mhenzel182 INDUS INT'L: Schiffrin & Barroway Files Securities Suit in California --------------------------------------------------------------------- A statement issued February 23 by the law firm of Schiffrin & Barroway, LLP says that a class action lawsuit was filed in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of Indus International, Inc. (Nasdaq: IINT) from October 28, 1999 through January 27, 2000, inclusive (the "Class Period"). The complaint charges Indus International and certain of its officers and directors with issuing false and misleading statements concerning the Company's business and prospects. Contact: Schiffrin & Barroway, LLP, Stuart L. Berman, Esq., Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, 1-888-299-7706 (toll free) or 1-610-667-7706, or by email at info@sbclasslaw.com NETWORK ASSOCIATES: Appeals Ct to Review Designation of Lead Plaintiff ---------------------------------------------------------------------- A federal appeals court last week agreed to review U.S. District Judge William Alsup's groundbreaking securities litigation order in the Network Associates class action that awarded the lucrative lead plaintiff status to a small-time investor, a report on The Recorder, February 24, 2000 says. Alsup originally designated a Philadelphia retirement fund as lead plaintiff in a case that will undoubtedly yield millions of dollars in attorneys fees. But the fund refused the designation after Alsup ordered it to put the lead counsel post out to bid, ruling that the lead plaintiff owed a "fiduciary responsibility" to the rest of the class. Alsup, in a first-of-its-kind ruling, then appointed retired lawyer Robert Vatuone of Santa Cruz as lead plaintiff over other investors who lost much more money. Alsup reasoned that Vatuone was the most responsible plaintiff to lead the litigation because he lived near the courthouse and agreed to keep control of the plaintiffs lawyers while consenting to putting the lead counsel post out to bid. Vatuone chose Lieff, Cabraser, Heimann & Bernstein as lead counsel. At the time, Alsup's reliance on "fiduciary responsibility" rather than mere "greatest loss" in choosing a lead plaintiff was hailed as the beginning of a new trend in the multibillion dollar securities litigation industry. But now that's all been put on hold with the Ninth Circuit U.S. Court of Appeals stepping into the fray Feb. 14. Firms, including Milberg Weiss Bershad Hynes & Lerach, filed writ requests with the Ninth Circuit earlier this month asking the court to overrule Alsup. The article in The Recorder says that such writs are rarely granted. In this case, a two-judge motions panel considering the requests didn't decide the issue with their Feb. 14 order. Instead, Senior Judges Alfred Goodwin and Edward Leavy ordered more briefing on the requests. "The district court may file a response if it desires," the Feb. 14 order stated. The two circuit judges put the Network Associates litigation on hold until the writ requests are decided. It's possible another pair of circuit judges will decide the issue, as Goodwin and Leavy ordered the motions heard by the "next available" motions panel, according to The Recorder. Milberg Weiss partner Reed Kathrein, who represents three investors who allege losses of $400,000, argued that Alsup ignored the Private Securities Litigation Reform Act's presumption that the investors with the largest losses are to be appointed lead plaintiff. "Here the district court ignored this mandated presumption and reached well outside the PSLRA to appoint the person with the smallest financial interest because he is a local lawyer," Kathrein wrote. "Not only does this directly violate the statute, but it creates and fosters a public perception of favoritism and unbridled exercises of power." Roger Kirby, of New York's Kirby, McInerney & Squire, meanwhile, accused Alsup of "xenophobia" in refusing to appoint his Belgium-based mutual fund client as lead plaintiff. Part of Alsup's rationale for refusing to appoint the Belgian KBC Equity -- which claims $4 million in losses -- as lead plaintiff was his belief in "differences in business cultures that would impede their ability to manage and to control American lawyers conducting litigation in California." But Kirby fired back in his plea to the Ninth Circuit that such a holding is a "startling belief" and that Alsup's ruling was an "error, both legally and diplomatically." Alsup also denied KBC Equity's request to serve as lead plaintiff because of accusations it is ensnared in a tax fraud criminal investigation. Kirby charged, Alsup was wrong. Kirby argues that a "cousin" company based in Luxembourg -- not his client -- is the target of the criminal investigation. "The court manufactured that KBC Equity was under a 'cloud' on account of a concededly irrelevant scandal involving a distant corporate relationship," Kirby wrote. "The court manufactured that KBC Equity was too 'preoccupied' with the irrelevant problem to attend to lead plaintiff duties." In vying for lead plaintiff, Vatuone listed as one of his qualifications his "many, many years training with the Jesuits -- and the essence of that is service." In a footnote, Kirby wrote of his firm: "If Congress intended religious training to determine lead plaintiff status, Mr. Vatuone might be trumped there as well. Among the firm's counsel is one who spent time at a Trappist monastery." (The Recorder, February 24, 2000) RITE AID: Ct Dismisses FL AG's Lawsuit Re Overcharging on Prescription ---------------------------------------------------------------------- Rite Aid Corporation (NYSE, PSE: RAD) announced on February 23 that an action filed against the company by the Florida Attorney General for certain former prescription pricing policies has been completely dismissed by a circuit court in Tallahassee, Florida. The court said there are no laws, rules, regulations, or federal or state cases to suggest that Rite Aid's former pricing policies involving certain cash prescriptions were unfair or deceptive. The Federal District Court of Alabama recently also dismissed a similar civil class-action lawsuit. Rite Aid operates 140 stores in Alabama. Rite Aid has not operated stores in Florida for several years. Rite Aid says it has annual revenues of approximately $13 billion and approximately 3,800 stores in 30 states and the District of Columbia. It owns PCS Health Systems, Inc., which provides pharmacy benefit management programs and services that can help improve patient health and reduce health care costs. Rite Aid also owns approximately 22 percent of drugstore.com, an online source for health, beauty and pharmacy products. SECRET SERVICE: Black Agents to File Suit with EEOC in WA over Bias ------------------------------------------------------------------- On February 23, some 50 African-American Secret Service agents, including several who have guarded the First Family, plan to file a class-action suit with the Equal Employment Opportunity Commission in Washington, a report on Newsweek.com says. The suit will claim that blacks are discriminated against in the agency's promotion process, according to the lawyer representing the agents, and will also allege that too few blacks hold Secret Service management jobs. According to Newsweek.com, the class action is an unusual public airing of complaints by employees of a necessarily secretive agency. To further try to correct what they view as a pattern of racial bias by their employer, several agents are now working to establish a formal association called BASS-Black Agents in the Secret Service-that will represent the rights of minorities. One agent involved with BASS says that as many as 100 African-American agents have expressed interest in joining the group. On February 24, Secret Service agents involved in the class action are scheduled to hold a press conference with their lawyers at the National Press Club. They plan to describe the hurdles they have faced in their efforts to be promoted and to discuss the everyday difficulties for blacks in an organization that is predominantly white, says their attorney, David Shaffer, of Thelen Reid & Priest. The Washington firm successfully represented minority FBI agents in their 1991 class-action suit against the law-enforcement bureau. Shaffer describes those in charge of the agency's promotion process as "good-old boys" who consistently help their white friends win better jobs at the expense of qualified African Americans. He says the majority of Secret Service agents, black and white, score in the 90th percentile in job- performance rankings. Because of this, Shaffer says, personal relationships among managers, the majority of whom are white, are the key factor in who gets rewarded with a management job. "You have to know the higher-ups," Shaffer says, if you want to win a promotion. There are approximately 2,300 non-uniformed agents who work around the world; some 200 of those agents are black, Shaffer says. But African Americans hold just 22 management jobs. Agents complain that all but a few of the top management jobs in large U.S. cities, including New York, Los Angeles and Chicago, are held by white agents. The exceptions, they say, are Atlanta and Dallas, cities in which blacks have had senior postings in the past. John Tomlinson, a spokesman for the Secret Service, says the agency is "surprised," by the lawsuit. He declined to provide examples or statistics concerning promotion of agents. The White House declined to comment on the suit. A number of black agents who have worked on President Clinton's security detail could join the suit. Among them is Reginald Moore. Shaffer says Moore was passed over for the job of director of the Secret Service's operations center, though he was serving as its acting director. The man who got the job, says Shaffer, was white and was not as qualified as Moore, who was then transferred to the Dallas field office. Moore couldn't be reached for comment. Then there's Larry Cockell, formerly the lead agent on President Clinton's secret service detail, who was forced to testify by Ken Starr, the independent prosecutor. Cockell was reportedly in the running to be head of the Secret Service, but lost out to another candidate. He couldn't be reached for comment either. The lawsuit may prove to be something of an embarrassment to the Clinton administration, which has made a concerted effort to court blacks for top jobs. Unfortunately, perhaps, for his security detail, the president has no power over which agents win promotions. (Newsweek.com, February 23, 2000) SOTHEBY'S HOLDINGS: Marc S. Henzel Files Securities Suit in New York -------------------------------------------------------------------- The Law Offices of Marc S. Henzel filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of investors who bought Sotheby's Holdings, Inc. stock between February 11, 1997 and January 29, 2000 (the "Class Period"). The lawsuit charges Sotheby's and certain officers of the Company, with violations of the securities laws and regulations of the United States. The lawsuit alleges that defendants issued a series of false and misleading statements during the Class Period concerning the Company's revenues. The complaint alleges that defendants failed to reveal that during the Class Period, Sotheby's revenues were both reliant upon, and unsustainable at those Class Period levels in the absence of, an illegal price fixing arrangement with Christie's International PLC. The complaint further alleges that defendants' false and misleading statements artificially inflated the price of the Company's stock during the Class Period. For more details on the said class action lawsuit, you may get in touch with Marc S. Henzel, Esq. of The Law Offices of Marc S. Henzel, 210 West Washington Square, Third Floor Philadelphia, PA 19106, by telephone at 888-643-6735 or 215-625-9999, by e-mail at Mhenzel182@aol.com or visit the firm's website at http://members.aol.com/mhenzel182 SOTHEBY'S HOLDINGS: Detroit News Says Departures Leave Void at the Top ---------------------------------------------------------------------- The shake-up at Sotheby's Holdings Inc. is hitting just as the art world's important spring sales season looms, says The Detroit News, February 24, 2000. Several of the auction world's biggest sales occur during the next few weeks. The paper cites the example of Samuel Merrin, a New York art dealer, who planned to put $ 150,000 worth of pre-Columbian art up for sale at a Sotheby's auction this spring. The paper says that was before this week's stunning news that the firm's two top executives -- including Chairman A. Alfred Taubman -- had hastily resigned in the face of a government price-fixing probe; now, Merrin was wavering -- as today's deadline for closing the May 17 sale approaches. "What's going through my mind is: What other shoe is going to drop?" he says. "What else is going to happen to Sotheby's?" More than $ 1 billion in expected sales is being negotiated right now at Sotheby's and its rival, Christie's International, which is also embroiled in the government probe, The Detroit News says. Together, Sotheby's and Christie's control more than 90 percent of the $ 5 billion annual art-auction market, and the scandal has already blackened the reputations of both. According to the paper, the resignation of Sotheby's president and CEO, Diana D. Brooks, in particular, leaves the firm almost rudderless. Brooks, a 21-year-veteran, was a hands-on executive who ran the celebrated auction house without the kind of typical middle-management structure that could easily fill the void of her departure. Most of Sotheby's other top officials are art scholars and salespeople, not business executives, the report adds. Michael Sovern, former president of Columbia University and an auction neophyte, was named chairman, succeeding Taubman, a Metro Detroit businessman who rose to become one of the nation's foremost shopping mall developments. William Ruprecht, Sotheby's chairman of North and South America, will become president and CEO. He has little international experience and isn't well-known to major collectors. According to The Detroit News, Sotheby's staffers have scrambled to cut special deals and reassure sellers that it's business as usual at the beleaguered firm. On Monday, February 21, some department heads began calling art dealers with the news of the departures -- and to reassure them that coming sales wouldn't be affected. Christie's has tried to boost confidence and customer loyalty with some deal-cutting of its own. The company has since tried to win sellers over from Sotheby's, which does not have such an agreement, by cutting commissions. Sotheby's and Christie's face a mounting pile of civil lawsuits that allege the firms colluded to fix commission prices over the past eight years. The suits charge that as early as 1992, the two firms agreed to cease competing on price, instead raising their commissions to identical levels. U.S. District Judge Lewis Kaplan said he would rule on class certification perhaps as soon as April, according to The Detroit News, February 24. SOTHEBY'S HOLDINGS: Miller Faucher Files Securities Complaint in MI ------------------------------------------------------------------- Miller Faucher and Cafferty LLP hereby gives notice that a class action complaint has been filed in the United States District Court for the Eastern District of Michigan on behalf of a Class of persons who purchased the common stock of Sotheby's Holdings, Inc. (NYSE: BID) at artificially inflated prices during the period February 11, 1997 through January 28, 2000 and who were damaged thereby. The complaint charges Sotheby's and its senior officer with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that defendants issued a series of false and misleading statements about the Company's revenues which resulted in artificially inflated stock prices during the Class Period. The complaint further alleges that defendants failed to disclose that the Company's revenues were both reliant upon and unsustainable at the Class Period levels in the absence of an illegal price fixing arrangement with Christie's International PLC. Contact: Miller Faucher and Cafferty LLP Patrick E. Cafferty, 734/769-2144 E-mail: pcafferty@millerfaucher.com SUNSTAR HEALTHCARE: The Pomerantz Firm Files Securities Complaint ----------------------------------------------------------------- Sunstar Healthcare, Inc. (NASDAQ:SUNS) announced on January 20, 2000 that the Company would restate its previously filed financial statements for the nine months ended September 30, 1999 to reflect losses totaling approximately $8 million to $ 10 million, according to allegations in a complaint filed by Pomerantz Haudek Block Grossman & Gross LLP (http://www.pomerantzlaw.com)on behalf of all those who purchased the securities of Sunstar during the period between November 13, 1998 and December 14, 1999, inclusive (the "Class Period"). The Complaint alleges that Sunstar's senior management and certain controlling persons of Sunstar issued a series of materially false and misleading statements during the Class Period concerning the Company's publicly reported revenue, its claim paying practices, enrollment figures, and its failure to take adequate reserves to pay foreseeable healthcare claims. As a result of defendants' false and misleading statements, the price of Sunstar's securities were artificially inflated during the Class Period. Contact: Pomerantz Haudek Block Grossman & Gross LLP, New York Andrew G. Tolan, Esq. Phone: (888) 476-6529 ((888) 4-POMLAW) Internet: agtolan@pomlaw.com SYKES ENTERPRISES: Pomerantz Haudek Files Securities Suit in Florida -------------------------------------------------------------------- The law firm of Pomerantz Haudek Block Grossman & Gross LLP filed a complaint against Sykes and two of the Company's senior officers. The Complaint was filed on behalf of all those persons or entities who purchased the common stock of Sykes during the period between July 26, 1999 and February 4, 2000, inclusive (the "Class Period"). Sykes Enterprises, Incorporated allegedly recorded revenues from certain of the Company's software contracts in violation of Generally Accepted Accounting Principles ("GAAP"), despite earlier warnings by the Center for Financial Research and Analysts, Inc. ("CFRA") which issued a detailed report on the Company in April of 1999. The CFRA report was reportedly highly critical of certain of the Company's accounting practices, including its revenue recognition practices and accounting for acquisitions, according to allegations contained in the suit. The Complaint alleges that as a result of Sykes' revenue recording practices, the Company reported materially false and misleading financial results for the second and third quarters of fiscal 1999. As a result, the market price of the Company's common stock was artificially inflated during the Class Period. The Company stunned the market on January 31, 2000 when it revealed that it would be delaying the release of its fourth quarter 1999 earnings due to accounting issues. Thereafter on February 7, 2000, the Company revealed that it had restated its 1999 second and third quarter results due to improper revenue recognition practices. The size of the restatement was significant, as the Company reportedly overstated second and third quarter 1999 earnings by 100% and 200% respectively. For additional information on the above-mentioned complaint, you may contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888- 476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. SYMONS INTERNATIONAL: Lowey Dannenberg Files Securities Suit in IN ------------------------------------------------------------------ Lowey Dannenberg Bemporad & Selinger, P.C. has filed a securities class action lawsuit in the United States District Court for the Southern District of Indiana on behalf of purchasers of the common stock of Symons International Group, Inc. during the period February 27, 1998 through November 18, 1999, inclusive (the "Class Period"). Plaintiffs' complaint alleges, among other things, that defendants violated the federal securities laws by issuing to the investing public reports filed with the Securities and Exchange Commission, financial statements, press releases and other public statements which falsely and misleadingly represented the reliability of Symons' reported financial statements and results, data processing and financial reporting systems, internal controls and/or loss reserves, thereby causing the market price of the common stock of Symons to be artificially inflated throughout the Class Period. For additional information on the above-mentioned lawsuit, you may contact Vincent Briganti, Esq. Lowey Dannenberg Bemporad & Selinger, P.C. The Gateway, 11th Floor One North Lexington Avenue White Plains, NY 10601-1714 Telephone: 914-997-0500 Telecopier: 914-997- 0035 E-mail: VBriganti@ldbs.com SYMONS INT'L: Lowey Dannenberg Files Securities Lawsuit in Indiana ------------------------------------------------------------------ Lowey Dannenberg Bemporad & Selinger, P.C. has filed a securities class action lawsuit in the United States District Court for the Southern District of Indiana on behalf of purchasers of the common stock of Symons International Group, Inc. (NASDAQ: SIGC) and/or Goran Capital Inc. (NASDAQ: GNCNF) during the period February 27, 1998 through November 18, 1999, inclusive (the "Class Period"). Plaintiffs' complaint alleges, among other things, that defendants violated the federal securities laws by issuing to the investing public reports filed with the Securities and Exchange Commission, financial statements, press releases and other public statements which falsely and misleadingly represented the reliability of Symons' and/or Goran's reported financial statements and results, data processing and financial reporting systems, internal controls and/or loss reserves, thereby causing the market price of the common stock of Symons and Goran to be artificially inflated throughout the Class Period. Contact: Vincent Briganti, Esq. Lowey Dannenberg Bemporad & Selinger, P.C. The Gateway, 11th Floor One North Lexington Avenue White Plains, NY 10601-1714 Telephone: 914-997-0500 Telecopier: 914-997-0035 E-mail: VBriganti@ldbs.com VISA, MASTERCARD: Fed Judge Certifies $24B Lawsuit on Alleged Monopoly ---------------------------------------------------------------------- In a major challenge to Visa and MasterCard, a federal judge has granted class-action status to a retailer lawsuit that accuses the associations of using their muscle in credit cards to force merchants to accept their debit cards as well, reports The San Francisco Chronicle, February 24, 2000. The antitrust suit, filed in 1996 by Wal-Mart, Sears Roebuck, Safeway and other giant retailers, asks for more than $24 billion in damages to compensate for higher transaction-processing fees that the plaintiffs claim Visa's and MasterCard's policies produced. In a ruling on February 22, U.S. District Judge John Gleeson certified in the class every business and individual that has accepted Visa and MasterCard credit cards in recent years and has also been required to take the association's debit cards. The class includes millions. Without class-action status, "millions of merchants will lose any practical means of obtaining damages," the Brooklyn federal judge concluded. Visa and MasterCard said they will appeal the decision and took comfort from Gleeson's unusual language urging a federal appeals court to review his class-action certification. "This was a narrowly cast, technical ruling," said Visa spokesman Kelly Presta. "We are optimistic" that an appeal will succeed. At issue are Visa and MasterCard rules that require merchants that accept their credit cards to take all other forms of payment that carry the associations' brand names. The suit is separate from the antitrust case brought by the Justice Department which challenges rules of the associations that prohibit member banks from issuing credit cards from third parties such as Discover or American Express. The retailers claim that U.S. merchants have incurred $8.1 billion in extra costs in recent years to process Visa and MasterCard debit payments. The suit asks triple damages or $24.3 billion. If Visa and MasterCard lose the suit, it could cost them huge sums of money and disrupt their operations. That could prompt banks that issue Visa and MasterCard products to charge cardholders higher fees. And some debit customers might be unable to use their Visa and MasterCards for some purchases. On the other hand, consumers could benefit if the suit lets merchants trim transaction costs, provided they pass along savings to shoppers. In what may be an overstatement, lawyers for the retailers claimed the suit will fundamentally reshape the way consumers pay for purchases. "This is of transcendent importance to every consumer, merchant and bank in the United States," said Lloyd Constantine, lead attorney for the plaintiffs. "The broader issue is who is going to control the payment system." Legal experts cautioned that it's too early to draw such a conclusion. " Certification of the class doesn't mean (the retailers) have won the lawsuit," said Anita Boomstein, a New York banking attorney with the firm Hughes Hubbard & Reed. "And even if they prove their case, it's unlikely they will be awarded those kinds of damages." Most retailers feel obligated to take Visa and MasterCard credit cards since they are so popular with customers. But many don't want to accept their debit cards, which transfer funds directly from a consumer's bank account, because cheaper alternatives are available. Specifically, many retailers prefer debit cards issued by regional ATM networks, such as the Star System in the West, which hit merchants with a processing fee that is one-fifth or less of the roughly 1.5 percent fee the bank card associations typically impose for some transactions. The prices vary sharply partly because the two types of debit cards are different. Visa and MasterCard products function like credit cards. Consumers sign a receipt and the charge is posted to a bank account several days later. The regional network products work like ATM cards. Consumers punch a PIN number into a terminal at the point of sale and funds are instantly debited to their accounts. According to National Post (formerly the Financial Post, February 24, U.S. District Judge John Gleeson, in a 45-page ruling, said the named plaintiffs would adequately represent the interests of four million U.S. retailers. According to The Orlando Sentinel, February 24, 2000, U.S. District Judge John Gleeson in Brooklyn, N.Y., gave the retailers and merchants the pretrial legal victory, but otherwise made it clear he was not ruling on the merits of the case. WAR VICTIMS: British POWs Sue Japanese Firms under New CA Law ------------------------------------------------------------- For a group of aging British veterans, the scars of World War II are far from healed. These former prisoners of war are demanding that a Japanese civilian company they say benefited from their slave labor make restitution for their deeds. But rather than seek justice in British or Japanese courts, this group is looking a long way from home -- in California. Thanks to a recently enacted California law that allows such civil actions, a group of British veterans are filing a class-action lawsuit against Japan Energy Corp., one of Japan's largest industrial giants, claiming the company used British and other Allied prisoners of war as slave labor during World War II. The precedent set by the lawsuit could have broad implications for other groups seeking redress from crimes committed during the war by private companies. The lawsuit was to be filed Thursday, February 24 in Orange County's Superior Court of California at the conclusion of three-day long international summit of attorneys involved in the case. Lawyers from the U.S., Britain and Japan have been meeting in Los Angeles to plan the legal strategies for the action. The suit is brought by three named plaintiffs but seeks to represent all persons serving in the British armed forces who were taken prisoner by Japan between 1941 and 1945, as well as their heirs. Under California law plaintiffs can demand profits defendants earned as result of the plaintiff's work, lost wages, punitive damages and compensatory damages for pain and suffering. In this case, attorneys for the plaintiffs believe this could total hundreds of millions of dollars. Arthur Titherington, one of the named plaintiffs, has dedicated much of his life seeking justice for himself and other British POWs, after spending three years as a slave laborer for the Japanese Energy Corp., formerly called Nippon Mining Company. Titherington, 78, is president of the British Japanese Labour Camps Survivors' Association. After his capture at the fall of Singapore in 1942, Titherington was sent to the Kinkaseki copper mine in Taiwan. During that time, the lawsuit claims, Titherington and his fellow prisoners were subjected to frequent and savage beatings at the hands of Japan Energy civilian guards and were forced to live in filthy, unsanitary conditions while working 12-hour shifts in the mine. The staggeringly high prisoner death rate forced the mine's closure in 1945. Court documents estimate that of the 523 prisoners who went down into the Kikaseki mine, only 93 left the camp alive when it was liberated. Titherington weighed 89 pounds when he was liberated by American troops in 1945. Altogether, more than 1000 British POWs were forced to work in the Kikaseki mine. According to Titherington, most of the prisoners were in constant fear of being killed by the Japanese civilian guards. "The Japanese seemed so unconcerned about the severity of the beatings, many of us concluded that what they really wanted was to kill us all off," Titherington said. "We worked 14-hour days in cramped, horrible conditions, and had to climb 2,000 steps at the end of it," Titherington said. "The conditions were so bad men took their own lives." "We starved and were beaten to provide profits for this company," Titherington added. "Japan Energy is directly responsible for systematically torturing hundreds of men and profiting from their labor. This is perhaps our last chance to bring them to book." The lawsuit also cites evidence that the Japanese captors had plans to murder all Allied prisoners should the war turn against Japan. According to documents introduced at the war crimes tribunal, mine officials were prepared to bring about the "extreme disposition" of the prisoners, which was to "be carried out with nitric acid which has already been prepared by the Nippon Mining Company." According to Steve Berman, a Seattle-based attorney leading the charge for the British plaintiffs, despite war crimes trials at the conclusion of the war, Japan Energy has never been held accountable for their role in the atrocities committed against the British POWs. "I don't think anyone can argue that Japan Energy profited from the misery of the POWs," Berman said. "The only question is whether Japan Energy will live up to their moral obligation to these war veterans. We feel very confident that the California laws will give us the opportunity to hold them accountable." "Companies like Japan Energy have never had to pay a penny in compensation," Titherington said. "This action seeks justice for the survivors of the hundreds who did not make it." Today Tokyo-based Japan Energy Corp. is one of Asia's largest companies with 210 subsidiaries and 92 affiliates operating worldwide. Japan Energy controls several wholly owned subsidiaries in the U.S. including defendants Japan Energy USA and Irvine Scientific, both with headquarters in California. Contact: Hagens Berman Steve Berman, 206/623-7292 steve@hagens-berman.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Romeo John D. Piansay, Jr., editor, Theresa Cheuk, Managing Editor. Copyright 1999. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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