/raid1/www/Hosts/bankrupt/CAR_Public/000321.MBX
C L A S S A C T I O N R E P O R T E R
Tuesday, March 21, 2000, Vol. 2, No. 56
Headlines
BALTIMORE CITY: Appeal Rights over Social Services Subject of MD Suit
CHEMICAL FIRMS: 2 Japanese Firms to Settle U.S. Antitrust Suit
CIRCUIT CITY: Punitive Damage for Employee Racial Bias Reinstated
COCA-COLA: Workers Plan Civil Rights-Style Ride over Racial Bias
FIRST UNION: Discloses Securities Suits Filed in NC and PA
FIRST UNION: Sued over Transfer of Retirement Plan Assets of Signet
FORD MOTOR: Jury Awards Damages in Bronco Rollover
HOLOCAUST VICTIMS: Austrian, US Negotiators Meet on Compensation
HOLOCAUST VICTIMS: Payment Plan Put off Pending Swiss Banks' Disclosure
HOLOCAUST VICTIMS: Poles Hope For Speedy Compromise on Fund
HOLOCAUST VICTIMS: Solidarity Leader Appeals for Maximum Pay to Victims
IMELDA MARCOS: Lawyers to Use Duke Suit to Find Loot Hidden in U.S.
JDA SOFTWARE: Securities Suit in AZ Consolidated and under Submission
PEAPOD INC: Abbey, Gardy Files Securities Complaint in Illinois
QUALCOMM INC: Settles Employee Stock Lawsuit Following Sale to Ericsson
TAMPA GENERAL: Hospital and USF Settle for Experiment on Pregnant Women
TOBACCO LITIGATION: Companies Ask States for Help in FL Appeals Process
TOBACCO LITIGATION: Professor Says State Lawsuits Can Be Model for NZ
TOSHIBA CORP: Charges of Faulty Floppy Controllers Bite into Accounts
U.S. CAPITAL: G. Martin Meyers Announces Securities Suit in New Jersey
WORLD GYM: Customers Misled by Rejected Franchisee Sue Seeking Refund
YBM MAGNEX: First Marathon Had Power of Atty. to Trade for Mogilyevitch
*********
BALTIMORE CITY: Appeal Rights over Social Services Subject of MD Suit
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Lawyers who represent welfare recipients in Baltimore on March 16 filed
a class action lawsuit against the Baltimore City Department of Social
Services, claiming the agency has effectively denied the appeal rights
of thousands of recipients who have had benefits cut off.
The suit, filed in Baltimore City Circuit Court by the Family Investment
Program legal clinic, named as its lead plaintiff an East Baltimore
mother of four who in January lost food stamps and a welfare grant of
$443 a month. Social workers had told her they stopped benefits because
she failed to see a child-support worker about her youngest daughter.
When Lisa Tusing tried to appeal -- a legal right welfare recipients
have -- supervisors told her she would have to reapply for benefits
instead, according to the lawsuit. Tusing, 26, wasn't able to keep her
benefits while trying to appeal, even though she made appeal requests
within the 10 days required by law.
Tusing also was denied emergency food stamps, the lawsuit claims, even
though state and federal regulations call for "expedited" food stamps to
a household with less than $100 in savings and less than $150 in gross
monthly income.
State officials agreed to reinstate Tusing's benefits until her case can
be resolved. But other clients have complained of similar problems for
the past year and a half, said J. Peter Sabonis, executive director of
the Homeless Persons Representation Project, which runs the FIP clinic.
Sabonis said, "We think it's because people aren't properly informed of
their appeal rights. Even if they attempt to make an appeal, they're
rebuffed by the department."
Sabonis said he has been meeting with the department since November 1998
to try to resolve the problems. At first, the department responded with
a letter that said it would take "immediate action to reinforce with
staff" the need to conform to the appeal procedure.
But the action the department took -- instructing staff that welfare
clients had to meet with supervisors -- was itself in error, according
to the complaint.
Sue Fitzsimmons, a spokeswoman for the social services department, said
supervisors get involved not because they're trying to impede appeals,
but because they're trying to resolve problems before they get to that
stage.
She said, "People don't necessarily need to appeal. They're interested
in me calling somebody and getting their problem fixed. Those people
aren't counted in the data."
Steven Keller, an assistant state attorney general representing the
department, said caseworkers were most recently reminded of clients'
right to appeal, after Sabonis threatened to sue. Staffers were
instructed that clients who wanted to appeal and wanted to discuss their
cases with supervisors would have to wait no longer than 15 minutes. But
more investigation into Tusing's case and others is necessary, Keller
said. "We're going to have to determine what the magnitude of the
problem is and come up with some real solution," he said. (The Baltimore
Sun, March 17, 2000)
CHEMICAL FIRMS: 2 Japanese Firms to Settle U.S. Antitrust Suit
--------------------------------------------------------------
Daicel Chemical Industries Ltd. and Nippon Synthetic Chemical Industry
Co. said Friday they have agreed to pay a total of $ 39.7 million (about
4.2 billion yen) to settle out of court a U.S. antitrust lawsuit over
their sales of sorbic acid. Daicel has agreed to pay $ 27 million (about
28.8 billion yen) and Nippon Synthetic $ 12.7 million (about 1.35
billion yen). An official at Nippon Synthetic said the two companies,
both based in Osaka, have agreed to a settlement to avoid a lengthy
trial that could be costly.
A group of U.S. food companies filed a class action last October in San
Francisco against a number of foreign chemical companies, including the
two Japanese firms. The U.S. companies charged that the foreign firms,
in violation of U.S. antitrust law, had manipulated the prices of
sorbates to maintain their shares in the U.S. market. Sorbates are
chemical preservatives used primarily in high-moisture and high-sugar
foods such as cheese and baked goods.
Daicel said it will register the payment as an extraordinary loss and
cover it with proceeds from the sale of real estate during fiscal 1999,
ending March 31. Therefore, its earnings projections for the fiscal year
will remain unchanged, it said.
Nippon Synthetic said the payment will be registered as an extraordinary
loss, forcing the company to post a consolidated net loss of 1.2 billion
yen, instead of an previously projected net profit of 800 million yen.
Concerning the sorbate sales, the U.S. Justice Department last July
ordered Nippon Synthetic to pay $ 21 million in fines for its role in a
17-year-long international cartel to suppress competition in the food
preservatives industry. The department is still conducting an
investigation into Daicel over the price-fixing allegations. (Japan
Weekly Monitor, March 13, 2000)
CIRCUIT CITY: Punitive Damage for Employee Racial Bias Reinstated
-----------------------------------------------------------------
The federal appeals court in Richmond on March 14 reinstated punitive
damage awards against Circuit City Stores Inc., the electronics
retailing giant found by a jury in 1996 to have discriminated against
black employees at its Richmond headquarters.
The 4th U.S. Circuit Court of Appeals said it must restore the $272,000
the jury awarded to the plaintiffs in Lowery vs. Circuit City because of
a recent U.S. Supreme Court decision that changed the law on such
awards. The appeals court originally reversed that award.
The case started about five years ago when a group of 11 black Circuit
City employees claimed they had been passed over for promotions and
raises in favor of whites. Only three plaintiffs still were in the case
at the end, and only two of them, Renee Lowery and Lisa S. Peterson, won
in the jury trial before U.S. District Judge James R. Spencer.
The jury found that Circuit City's headquarters had a "pattern or
practice" of discrimination, which meant others could sue on similar
issues and not have to prove the company discriminated against them. The
jury awarded relatively modest compensatory and punitive damage awards
against the company. Based on that finding, Spencer ordered Circuit City
to make sweeping changes in its personnel and anti-discrimination
policies.
On appeal, the 4th Circuit vacated the jury's "pattern or practice"
finding, saying that issue cannot be used in a lawsuit that is not a
class-action case and therefore should not have gone to the jury. It
also cut back Spencer's demands on Circuit City and set aside his award
to the plaintiffs of nearly $4 million in attorney fees and costs.
The appeals court affirmed the jury's finding that Lowery and Patterson
were improperly passed over and should be compensated; the jury's total
award was $16,700. But the court said the company's actions fell short
of the "egregious misconduct" required under then-existing law for the
judge to let the jury decide the issue of punitive damages. It set aside
the $272,000 award.
Last year, in another case, the Supreme Court rejected the "egregious
misconduct" standard. When the Circuit City case was appealed to the
high court, it directed the 4th Circuit to revisit its decision in light
of that ruling. Yesterday's opinion does that and concludes that Spencer
was not wrong to let the jury impose punitive damages. (Richmond
Times-Dispatch, March 15, 2000)
COCA-COLA: Workers Plan Civil Rights-Style Ride over Racial Bias
----------------------------------------------------------------
Black employees of the Coca-Cola Co. plan a bus ride to the company's
annual meeting in Delaware next month to urge it to settle a pending
racial discrimination lawsuit.
Larry Jones, a former human resources manager who was laid off from the
soft-drink company, estimates that about 150 current and former workers
will participate in the trip April 15 through 20. Jones, who worked for
the company for 15 years, said three buses will carry workers to Coke's
annual meeting on April 19 in Wilmington, Del., making stops for rallies
in Greensboro, N.C.; Richmond, Va.; and Washington.
"We're shareholders and we will be making our voices heard at the
meeting," Jones said. "We want to raise the level of public awareness
about life inside Coca-Cola for black employees." He said Coca-Cola
should provide "full and complete repatriation" for black employees in
settlement of a lawsuit filed by eight current and former workers
claiming that Coke discriminated against blacks in pay, promotions and
work evaluations.
Plaintiffs in the lawsuit are seeking class-action status to represent
about 2,000 Coke workers. Settlement talks with a mediator are scheduled
for next month. Coke has denied the allegations in the lawsuit and has
sought to block it from receiving class-action status.
Earlier this month, Coca-Cola changed its severance policy for laid-off
workers, which required employees affected by a massive layoff to sign a
release form giving up their right to sue Coke if they wanted enhanced
severance benefits. Jack Stahl, the company president, said the decision
"was guided by our desire to treat all of our employees with dignity,
respect and fairness."
Coca-Cola earlier this year announced plans to cut 6,000 jobs worldwide,
including 2,500 in Atlanta. (Atlanta, United Press International, March
20, 2000)
FIRST UNION: Discloses Securities Suits Filed in NC and PA
----------------------------------------------------------
A number of purported class actions were filed in June through August
1999 against the Corporation in the United States District Courts for
the Western District of North Carolina and for the Eastern District of
Pennsylvania. These actions name the Corporation and certain of its
executive officers as defendants and are purported to be on behalf of
persons who purchased shares of the Corporation's common stock from
August 14, 1998 through May 24, 1999. These complaints allege various
violations of federal securities law, including violations of Section
10(b) of the Exchange Act, and that the defendants made materially
misleading statements and/or material omissions which artificially
inflated prices for the Corporation's common stock. Plaintiffs seek a
judgment awarding damages and other relief. The Corporation believes the
allegations contained in these actions are without merit and will
vigorously defend them.
FIRST UNION: Sued over Transfer of Retirement Plan Assets of Signet
-------------------------------------------------------------------
Five thousand former employees of Signet Banking Corporation have filed
a class action against First Union Corporation alleging that it
illegally transferred assets from Signet's 401(k) retirement plan to its
own mutual funds after acquiring Signet in 1997, allegedly resulting in
a substantial loss to Signet plan participants. The suit seeks $ 150
million in damages to offset investment returns that the employees claim
they lost because of the transfer. The suit also seeks an order removing
and replacing the current plan fiduciaries.
Complaint
According to the complaint, First Union formally took control of
Signet's 401(k) retirement plan following acquisition of Signet and
then, without proper authority from First Union's board of directors and
without regard for the interests of plan participants or proper notice
to participants, "unilaterally and involuntarily" liquidated the Signet
plan and transferred all proceeds to First Union's plan in a purported
plan merger.
Signet plan participants allegedly had $ 250 million in assets invested
in Signet plan funds at the time of the transfer, with about $ 100
million of that amount invested in nonproprietary funds, including the
Vanguard Index Trust 500 Portfolio, the American Century/Twentieth
Century Ultra Investors Fund, and the Capital One Financial Corporation
Stock Fund. The complaint asserted that upon transfer, all assets were
invested in First Union proprietary funds with a lower rate of return in
a move that allowed First Union to extract asset management and other
fees from plan participants while increasing the size and marketability
of its own funds. Franklin v. First Union Corp., No. 3:99CV344 (E.D.
Va.).
Related class action
Eighteen current and former participants in First Union's 401(k) plan
filed a related class action in federal court in Virginia alleging that
the company used the plan to boost corporate profits at their expense by
forcing them to invest exclusively in "mediocre" First Union proprietary
funds and charging improper fees. The suit seeks certification of a
class of approximately 100,000 current and former participants and
beneficiaries in the First Union Corp. Savings Plan, of which First
Union is the sponsor and named fiduciary. First Union National Bank, a
First Union Corp. subsidiary, is trustee of the plan, while the Capital
Management Group, a division of First Union National Bank, is the plan's
investment manager and recordkeeper. Franklin v. First Union Corp., No.
3:99-CV-610 (E.D. Va.).
Point to ponder
The cases are particularly interesting because First Union owned the
mutual fund company that manages the funds in its plan. The allegations
are that First Union selected its proprietary funds without adequately
investigating the competing products in the marketplace, and had an
investigation been done, it would have determined that better investment
options than First Union's proprietary funds were available.
Although the proprietary nature of the funds is a feature unique to this
case, the important point to remember is that you do not discharge your
fiduciary obligation under the Employee Retirement Income Security Act
(ERISA) merely by selecting a provider that has a variety of investment
options available to employees. You are obligated to conduct a
sufficient inquiry into the various funds and other vehicles that are
available and to make a prudent selection. You also are required to
monitor the performance of those funds. (California Employment Law
Monitor, February 7, 2000)
FORD MOTOR: Jury Awards Damages in Bronco Rollover
--------------------------------------------------
Troubles with the Bronco II have brought Ford Motor Co. to court
hundreds of times. Now, a jury has ordered what may be the highest award
ever for a rollover of the discontinued sport utility vehicle, according
to the Associated Press , March 16, 2000.
The report says that the Alameda County Superior Court jury, sitting in
suburban Hayward, voted 11-1 that Richard Raimondi and his wife, Dana,
had suffered nearly $52 million in damages, when their Bronco II rolled
over, causing injuries that left one of them a quadriplegic who is
dependent on a ventilator. But the jury decided in a 10-2 vote that
Richard Raimondi of Fremont, the driver in the July 1996 crash, was 50
percent responsible, thereby reducing the award.
Ford maintains that Raimondi was at fault and plans to try to overturn
the verdict. The Bronco II meets or exceeds all federal safety
standards, Ford spokeswoman Susan Krusel said. "We want everyone to know
that this clearly was a tragedy. However, there wasn't any evidence that
supported that the accident occurred from any defect in the vehicle,"
she said.
Ford made 700,000 Bronco IIs between 1983 and 1990, when the model was
retired. As of January 1999, the automaker had settled 679 Bronco II
rollover cases, according to the Los Angeles Times. About 16 lawsuits
have gone to trial, Ford lawyer Warren Platt said. Of those, Ford has
won about 70 percent.
In 1992, the Insurance Institute for Highway Safety said the death rate
in rollover accidents for the rear-wheel drive version of the Bronco II
was double that for other sport utility vehicles studied. It was unclear
whether the truck involved in Raimondi's crash was a rear-wheel drive
version.
In 1997, Ford offered to settle with 650,000 Bronco II owners before a
judge dissolved the class-action status of the lawsuit, which claimed
the model was prone to rolling over.
The most recent award, if it stands, would be the highest Ford has paid
for a Bronco II rollover, Platt said, Associated Press reports.
Raimondi, then a 53-year-old insurance executive, swerved to miss a
chunk of tire or a car bumper on Interstate 880 in Fremont, a suburb
about 30 miles southeast of San Francisco. His Bronco II scraped the
concrete median between the northbound and southbound lanes, bounced
back, clipped a car and rolled over three times. He has not worked since
and needs 24-hour nursing care, according to his lawyer, Paul D. Nelson.
Raimondi's lawyers argued during the two-month trial that the Bronco
II's narrow wheelbase and high center of gravity made it unstable and
prone to roll over. Sport utility vehicles do not have the same rollover
resistance that passenger cars have, Platt said. SUVs are built on truck
frames. They are higher off the ground, have a higher center of gravity
and yet are about the same width as cars, Platt said. "I guess, from the
plaintiffs' standpoint, their argument is these things should all be
like passenger cars. And from the standpoint of the manufacturers,
there's no way that can happen. It's just not feasible," he said.
Nelson, the Raimondis' lawyer, maintains that Raimondi was not at fault
in the accident. "It was the fact that this car, when it's in a minor
sideswipe kind of incident, is so unstable that it will roll over, where
other cars will come back into control or spin out."
The jury decided that Richard Raimondi suffered $38.8 million in damages
and his wife suffered $13 million. The finding that Richard Raimondi was
50 percent at fault reduced his award to $19.4 million. Lawyers
disagreed on whether that finding would also halve Dana Raimondi's
award.
Judge David E. Hunter will decide whether Ford must pay $25.9 million or
$32.4 million.
Platt said Ford plans to use post-trial motions to ask the court to set
aside the verdict or reduce the award. Ford plans to appeal if its
motions fail. (The Associated Press, March 16, 2000)
HOLOCAUST VICTIMS: Austrian, US Negotiators Meet on Compensation
----------------------------------------------------------------
Austrian and US negotiators met in Washington on March 20 to sound out
positions regarding compensation for victims of forced labor in Austria
during the Nazi era, officials said.
The talks between US Deputy Treasury Secretary Stuart Eizenstat and the
Austrian special envoy on Nazi compensation issues, Maria Schaumayer,
focused on a fund proposed by the Austrians, and legal guarantees that
Austrian firms demand in exchange to be shielded from US class action
suits.
"The idea to essentially proceed similarly to the German case was very
positively received", according to Martin Weiss, a spokesman for the
Austrian embassy here, referring to the legal protections that
Washington has promised Germany, as soon as a 10 billion mark (five
billion dollar) fund to compensate former slave and forced laborers is
set up.
Nearly a million people were subjected to forced labor in Austria
between 1938 and 1945, of whom some 240,000 could still be alive,
according to a historical commission set up by the government in Vienna
last year.
Schaumayer was appointed shortly after the new Austrian government,
which includes the far-right Freedom Party, took over last month. Vienna
has promised to move quickly on compensation, in an effort to prove
Austria's commitment to dealing with its past during the Nazi era.
(Agence France Presse, March 20, 2000)
HOLOCAUST VICTIMS: Payment Plan Put off Pending Swiss Banks' Disclosure
-----------------------------------------------------------------------
A federal judge cited Switzerland's failure to publish the names of
account holders as the reason he extended the deadline for a plan to
distribute a $1.25 billion Swiss bank settlement to Holocaust victims.
The move by Brooklyn-based U.S. District Judge Edward Korman, who
presides over class-action lawsuits brought against Swiss banks by
Holocaust survivors and their heirs, means that potential claimants will
have to wait a bit longer for payments. (The San Diego Union-Tribune,
March 15, 2000)
HOLOCAUST VICTIMS: Poles Hope For Speedy Compromise On Fund
-----------------------------------------------------------
Germany's latest formula for allocating money from a fund for Nazi-era
forced and slave laborers is still unacceptable, a Polish representative
of victims said Friday, but he added that a compromise seems near. ''We
are close to an end, to reaching agreement,'' the deputy head of the
Polish-German Reconciliation Foundation, Jack Pajak, said at a news
conference. ''One or two more sessions are needed.''
At issue is how much of a 10-billion-mark ($5 billion) fund pledged by
German government and industry should go directly to various categories
of victims and how much should be set aside for administration and a
program to ensure further education on the evils of the Holocaust.
Germany recently raised the figure it was willing to earmark for direct
payments to 8.1 billion marks ($4 billion) from 7.7 billion marks (3.8
billion). Pajak said at a news conference he believes a compromise
''boils down to 300,000 to 400,000 marks.''
Negotiators from Germany, United States, leaders of Jewish groups and
representatives of victims from Poland, Belarus, the Czech Republic,
Russia and Ukraine are to meet in Berlin next Wednesday and Thursday to
continue talks on the fund.
Germany and German companies that used forced and slave laborers during
the Nazi era agreed to set up the fund partly to protect themselves from
U.S. class-action lawsuits. Estimates of the number of people who could
benefit from the fund run as high as 2.3 million, mostly non-Jews from
eastern Europe. (AP Worldstream, March 17, 2000)
HOLOCAUST VICTIMS: Solidarity Leader Appeals for Maximum Pay to Victims
-----------------------------------------------------------------------
The leader of Solidarity appealed Monday for as much as possible of a 10
billion mark ($ 5 billion) German compensation fund for Nazi-era forced
and slave laborers to go to the actual victims. In a letter to chief
U.S. envoy Stuart Eizenstat, Marian Krzaklewski said the amounts planned
for purposes other than direct compensation should be limited to a
minimum if the compensations are to be morally significant.
Germany has said 8.1 million marks ($ 4.1 million) will go to labor
victims, with the rest funding claims for property confiscated by the
Nazis, a future academic foundation and administrative costs.
''I ask the negotiators to allocate the largest possible amount of the
10 billion marks for covering claims from victims of forced and slave
labor,'' Krzaklewski, the head of the senior party in the ruling
coalition, wrote in the letter. Krzaklewski said it was a ''mistake'' to
have included property claims in the labor compensation negotiations.
But chief German envoy Otto Lambsdorff told Polish daily Rzeczpospolita
that the 8.1 billion marks was the ''top limit.''
Negotiators from Germany, the United States, leaders of Jewish groups,
class-action lawyers and representatives of victims from Poland,
Belarus, the Czech Republic, Russia and Ukraine are to meet in Berlin on
Wednesday and Thursday to continue talks on the fund.
Germany and German companies that used forced and slave laborers during
the Nazi era agreed to set up the fund last year in exchange for
protection from U.S. class-action lawsuits. Estimates of the number of
people who could benefit from the fund run as high as 2.3 million,
mostly non-Jews from eastern Europe. Some 480,000 victims, mostly forced
farm laborers, are from Poland. (AP Worldstream, March 20, 2000)
IMELDA MARCOS: Lawyers to Use Duke Suit to Find Loot Hidden in U.S.
-------------------------------------------------------------------
Lawyers of the 9,539 human rights victims intend to use a $5-million
suit against Imelda Marcos, filed by the estate of the late tobacco
heiress Doris Duke, to identify hidden Marcos assets in the United
States, according to one of the lawyers. Rod Domingo Jr., Filipino
counsel in the class suit, said that he and American lead counsel Robert
Swift would once again try to compel former first lady Imelda Marcos and
her three children to testify under oath regarding their assets.
Domingo said the lawyers would use "modes of discovery" and recovery
during the pre-trial stage of the Duke lawsuit, filed in Honolulu. The
Duke estate alleges that Ms Marcos defaulted on a $5-million loan. "We
will confront them on their earlier statements-where Ms Marcos earlier
declared that she had $800 million more in personal bank accounts, that
they needed a universal auditor to audit their global assets, and that
the Marcos family practically owned everything in the country," Domingo
said, referring to claims made by Ms Marcos in interviews in 1998.
He said that the Duke suit would "open a Pandora's box." In the
pre-trial stage, the estate's plaintiffs will likely seek the deposition
of the Marcoses, who will ideally be forced to name the sources of their
wealth. "There are modes of discovery which the foundation of Doris Duke
could avail of" which would put the Marcoses in a bind, Domingo said.
If they opted for a summary judgment, they would be admitting that they
had the money to pay the Duke estate, according to the lawyer. This
would disprove Ilocos Norte Gov. Ferdinand Marcos' claims that the
family's only source of wealth for $150 million owed to the victims was
a $615-million escrow account in the Philippine National Bank.
Domingo also said he and Swift wanted the Supreme Court to terminate the
$150-million settlement agreement, which has been junked twice by the
Sandiganbayan. The victims' lawyers cannot move to demand the original
$2.7 billion-award (including interest) unless the deal is nullified.
US District Judge Manuel Real, however, has given the Marcoses until
April 24 to implement the agreement.
"We are tied to this settlement until this is terminated," Domingo said.
But "we will push for the termination again after the 45-day (extension)
period," he added, referring to the deadline set by Real in his Honolulu
court.
Domingo claimed that the fact that the Marcoses were so intent on paying
the $150 million meant that they were trying to keep the victims from
discovering their other assets.
What Victims Have Got
So far, the victims' lawyers have recovered $1 million from the sale of
a mansion of the Marcoses in Hawaii, and the $25,000 from the sale of a
bullet-proof Mercedes Benz. The proceeds from the 1996 sales are
deposited in a bank appointed by the US district court, according to
Domingo.
When Swift first tried to get the Marcoses to name the source of their
wealth in a deposition in the early stages of the human rights case, Ms
Marcos refused to answer questions on the grounds that doing so would
incriminate her.
"The courts don't give much credence to people who avail of this
remedy," Domingo said. He said the lawyers would also try to get their
hands on US property owned by cronies and relatives of Ms Marcos and her
late husband Ferdinand. "The properties are not in Imelda's name. But
almost all the relatives of Imelda have properties in the United
States," Domingo claimed.
Slippery
He said they would also use the evidence in an old racketeering trial
against Ms Marcos in New York. He said the evidence filled 100 cartons.
Domingo said he believed that the Marcoses had more hidden wealth,
including an alleged $13.2-billion Irene Araneta account, but that the
problem had always been the speed with which the Marcoses transferred
any traced account. "They are very slippery," he said.
Australian investigator Reiner Jacobi claims to be able to prove the
existence of the $13.2-billion Araneta account allegedly once kept in
the Union Bank of Switzerland. The Marcoses have repeatedly denied that
there was ever such an account.
Domingo also said there were many Marcos assets which had not been
touched by the Presidential Commission on Good Government.
No Problem
In Davao City, Jimmy Aragon, secretary general of Selda in Southern
Mindanao, said the victims had no problem with the Duke estate getting
priority claim over the Marcos assets. He was referring to a statement
made by Sen. Aquilino Pimentel Jr. the other day. Pimentel had said that
if the Duke estate could identify so far unknown Marcos assets, the
claims of the heiress' estate would have to be satisfied before those of
the victims. Aragon said the original $2-billion award was an obligation
which the Marcos heirs had to fulfill.
Selda, which has consistently opposed the settlement deal, is one of two
opposing factions of the rights plaintiffs in the class-action suit.
Swift and Domingo represent Claimants 1081, the other faction.
But Aragon said Selda was concerned that there appeared to be a
concerted effort to muddle their quest for justice with the filing of
the Duke foundation suit and the $150-million settlement agreement. He
repeated that the issue had been reduced to money. He said that the main
issue was the victims' quest to prosecute and jail the Marcoses, and to
get a public apology and a commitment from them to never repeat their
crimes against humanity. (World Reporter (TM), March 7, 2000)
JDA SOFTWARE: Securities Suit in AZ Consolidated and under Submission
---------------------------------------------------------------------
On January13, 1999, Rod Bernat, a shareholder of JDA Software Group,
Inc., filed a securities class action lawsuit against JDA Software Group
Inc., the Company's Co-Chief Executive Officers, FrederickM. Pakis and
James D. Armstrong, former Senior Vice President of Research and
Development, Kenneth Desmarchais, and former Chief Executive Officer,
BrentW. Lippman, in U.S.District Court for the District of Arizona.
The complaint filed in the lawsuit alleges that during the alleged class
period, January 29, 1998 through January 5, 1999, JDA misrepresented the
Company's business, financial statements and business prospects to
investors. The complaint further alleges that certain of the Company's
officers sold significant quantities of the Company's common stock
during the class period while the market price of the common stock was
artificially inflated by the alleged misrepresentations. The plaintiffs
seek designation of the action as a class action and damages for
violation of Sections10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule10b-5 promulgated thereunder by the Securities and Exchange
Commission.
Following the filing of the Bernat action, lawsuits were filed by Norman
Wiss, Theodore J. Bloukos, Gwen Werboski, Elmer S. Martin, Linda May,
Ivan Sommer, David Hesrick and Michael J. Corn all purporting to act on
behalf of the same class of shareholders for the same class period,
making substantially similar allegations. These actions were
consolidated into one action by an order of the U.S. District Court.
Pursuant to the Court's order, plaintiffs filed a Consolidated and
Amended Class Action Complaint which supercedes their prior complaints.
The Consolidated and Amended Class Action Complaint alleges a new class
period of December 1, 1997 through July 30, 1998, and omits allegations
that the Company misrepresented its financial statements. Plaintiffs
also filed a new Class Action Complaint that attempts to allege claims
under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 on
behalf of all purchasers of the Company's common stock issued pursuant
to the Company's secondary public offering on May 5, 1998. JDA filed
motions to dismiss the Consolidated and Amended Class Action Complaint
and the Class Action Complaint and a motion to strike the Class Action
Complaint. These motions are fully briefed and under submission with the
U.S.District Court. The Company anticipates that the Court will set the
motions for hearing but it has not done so as of this time. Management
believes that the actions are without merit and intends to defend them
vigorously.
PEAPOD INC: Abbey, Gardy Files Securities Complaint in Illinois
---------------------------------------------------------------
A Class Action has been filed in the United States District Court for
the Northern District of Illinois on behalf of all persons who bought
securities of Peapod Inc. during the period November 8, 1999 to March
16, 2000 (the "Class Period"). The Complaint charges PPOD and certain of
its officers with misrepresenting its cash funding needs, violating
Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5
promulgated thereunder.
Contact: Joshua N. Rubin, Esq., Abbey Gardy & Squitieri, LLP., 212 East
39th Street, New York, NY 10016, TELEPHONE: (800) 889-3701 or (212)
889-3700, FAX:(212) 684-5191, E-MAIL: jrubin@a-g-s.com WEB:
http://www.a-g-s.com
QUALCOMM INC: Settles Employee Stock Lawsuit Following Sale to Ericsson
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Qualcomm has agreed to an $8.9-million settlement in a lawsuit filed by
former employees of an infrastructure division that was sold before they
could use their stock options, the company announced. The settlement is
open to more than 1,000 employees of the division, which was sold to
Sweden's Ericsson last year as part of an agreement to end a patent
dispute between the two telecommunication companies, according to Los
Angeles Times, March 18, 2000)
San Diego-based Qualcomm, while agreeing to resolve the lawsuit, will
pay nothing toward the settlement, with all payments to be made by third
parties, the report says. The affected workers have until April 17 to
opt out of the settlement. A final approval hearing is scheduled for
April 28.
As has been reported in the CAR, Qualcomm workers filed the class-action
suit in May 1999, claiming that the switch to Ericsson would deprive
them of millions of dollars in stock options that were not vested -- or
qualified for exercise -- by the sale date.
TAMPA GENERAL: Hospital and USF Settle for Experiment on Pregnant Women
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Tampa General Hospital and the University of South Florida each has
agreed to pay more than $1 million to settle a class action contending
experimental procedures were performed on pregnant women. The 1990
medical research suit alleged thousands of pregnant women were not told
of the risks, benefits and alternatives of various experiments conducted
between 1986 and 1990.
The $3.8 million settlement could affect 3,000 women. The settlement
calls for the hospital and the university each to pay $1.1 million and a
state insurance plan to pay $1.6 million over a four-year period to
about 3,000 people who could collect from the class action. The
plaintiffs in the suit agreed the experiment was not considered risky
and no adverse effects were documented. There was no admission of
wrongdoing in the settlement.
Tina Perritt, 18 at the time, was 26 weeks pregnant when her water broke
and she was admitted to the hospital. Perritt said she was already woozy
from Demerol taken to ease her labor pains when she was asked to sign a
three-page, single-spaced form giving consent for an experiment allowing
doctors to use steroids to spur fetus lung development and to increase
survival chances of her premature baby.
Perritt was admitted to the hospital for nine days in March 1987 and
given three different types of experimental medicines, the lawsuit said.
After being discharged, the suit says she was told to return every two
weeks to the hospital's High Risk Clinic, where on 11 occasions she had
amniocentesis, a surgical drawing of fluid from the uterus used to show
the maturity of the fetus' lungs. Perritt says the amniocentesis
procedures caused an infection, resulting in the premature birth of her
daughter, born when she was eight months pregnant. Perritt's daughter is
now 12 and is healthy, Perritt said at Friday's news conference.
Pregnant women usually receive amniocentesis only twice during their
terms, said Karen Perrin, a former nurse who noticed on the charts that
a number of pregnant women were receiving multiple amniocentesis as part
of a research study. She said the women told her that if they didn't
receive the amniocentesis, their babies would die. The 1990 medical
research suit alleged thousands of pregnant women were not told of the
risks, benefits and alternatives of various experiments conducted
between 1986 and 1990. (The Florida Times-Union, March 12, 2000)
TOBACCO LITIGATION: Companies Ask States for Help in FL Appeals Process
-----------------------------------------------------------------------
Tobacco companies are seeking relaxed requirements on how much money
they must put up if they lose Florida trial verdict. Cigarette makers,
faced with the prospect that a Miami jury may soon hand out the largest
punitive damage award ever, have taken unprecedented steps in recent
weeks to protect themselves from bankruptcy by persuading tobacco states
to pass bills that shield industry assets.
Typically, a defendant in a civil lawsuit must post cash or a bond in
the full amount of a jury award, plus interest, to avoid enforcement of
that judgment while the defendant appeals. But at the behest of tobacco
producers, legislatures in four states - Georgia, Kentucky, Virginia and
North Carolina - have recently passed or are being urged to take up
bills that limit the financial requirements a defendant must meet during
the appeal process.
The new measures are not specific to the tobacco industry, but both
cigarette makers and state officials acknowledge that the industry is
behind the legislative push. The effort comes as the Miami jury, which
is hearing a class-action case brought on behalf of all Florida smokers,
nears a critical decision on punitive damages.
Tobacco company analysts anticipate that the panel may award record
punitive damages against the industry of tens of billions or even
hundreds of billions of dollars - sums that could bankrupt most, if not
all, cigarette companies if they are required to post an appeal bond.
Cigarette makers are expected to argue against a bond. But should they
fail, the new measures - which, depending on the state, put a limit of
$25 million to $100 million on a bond that has to be posted while
punitive damages are appealed are intended to buy the companies time
while they fight the Florida verdict.
The largest punitive damages ever awarded appear to be the $5 billion
awarded by a jury in Anchorage, Alaska, in 1994 against Exxon Corp. in
connection with the Exxon Valdez oil spill. The company is still
appealing that decision.
Stanley Rosenblatt, a lawyer in Miami who represents smokers in the
Florida case, told a court there last year that he would seek $100
billion in punitive damages, said Martin Feldman, a tobacco industry
analyst with Salomon Smith Barney who attended that hearing. Feldman and
others said they believed that the tobacco industry as a group could put
up $10 billion to $20 billion while it appealed. "We are in totally
uncharted water," Feldman said.
The bulk of the tobacco industry's operations are in the four states
that have passed or are considering the new measures. Several legal
experts said they believed such laws were unconstitutional because they
were designed to frustrate the actions of courts in other states.
However, such legislation would still help the companies gain time,
because a drawn-out legal fight would precede any final court decision
on the laws.
Tobacco companies have agreed to pay $246 billion over the next two
decades to settle lawsuits brought by state attorneys general to recover
costs spent treating smoking-related ills. But the type of class-action
case under way in Florida is not covered by that settlement.
Most cigarette makers have said they believe that any award in the
Florida case can be overturned on appeal, because many courts have
dismissed other class-action suits against them. (The Stuart News/Port
St. Lucie News (Stuart,FL), March 20, 2000)
TOBACCO LITIGATION: Professor Says State Lawsuits Can Be Model for NZ
---------------------------------------------------------------------
Professor Donald Garner, of Southern Illinois University School of Law,
who was in New Zealand to give a lecture on the United States tobacco
war at Massey University, said the Government should "have a go at it"
and think carefully about passing enabling legislation that would smooth
the way towards litigation. "(The Government is) likely to find that
many good things follow in the wake of such lawsuits."
Professor Garner, who fought for 30 years to establish Americans' rights
to sue tobacco companies, said that while private actions against
tobacco companies were not very successful - "because juries hate
smokers" and judges were reluctant to involve themselves in such a huge
issue - they helped open the way for state actions that were better
received. Private and class actions against tobacco companies had so far
seen payouts of $US246 billion ($NZ509.63 billion), he said.
"I don't exactly know how the experience is going to play out in New
Zealand but I do know that the state lawsuits were extremely successful
where the private suits have generally been unsuccessful," he said. "The
important part for New Zealand is that there is a very successful model
to follow, particularly if New Zealand was to go the route of enabling
legislation that would smooth the way for a lawsuit." Such legislation
could establish the principle that if a product could not be consumed
without killing the user, it was a unique product that needed to pay its
own way. Once that was established, liability became clear.
Enabling legislation could also include a clause covering lawyers' fees
and could allow for a contingency fee, so the state would not run the
risk of spending huge amounts of money on a lawsuit. Lawyers would bear
the risk involved in a case and would receive a percentage of any
damages awarded, Prof Garner said. The legislation could also explicitly
dedicate any monetary award to an appropriate use.
Prime Minister Helen Clark said that litigation was just one option
being looked at in pursuit of a smokefree society. Crown Law officials
told Miss Clark and Attorney-General Margaret Wilson that the present
legal framework would make it tough to mount a winning case against
tobacco companies. However, Miss Clark would not rule out legal action
after she met anti-smoking lobby groups to discuss the prospect of a
suit against the tobacco industry. She said the Government would seek
further legal advice. Ms Wilson would attend a conference of
attorneys-general in Australia, where tobacco litigation was one subject
on the agenda, Miss Clark said. - NZPA (The Evening Post, March 17,
2000)
TOSHIBA CORP: Charges of Faulty Floppy Controllers Bite into Accounts
---------------------------------------------------------------------
One of the major bites into Toshiba's accounts this year reflects
payments under a previously announced settlement of a U.S. class-action
lawsuit over faulty floppy-disk controllers installed in the company's
notebook personal computer, Dow Jones News says. Kiyoaki Shimagami,
Toshiba's executive vice president and representative director, said
that earlier this month, Toshiba paid $700 million out of a total $1
billion to settle the lawsuit, which was brought in 1999 by two U.S.
users of Toshiba notebooks. The lawsuit has been reported in earlier
editions of the CAR.
With a one-time hit totaling 330 billion yen ($3.12 billion) to cover
shortfalls in its retirement and pension funds, bringing extraordinary
losses to 435 billion yen, nearly quadrupling the 110 billion yen
projected in October, Toshiba Corp. said it will fall deeper into the
red for the fiscal year ending March 31 than previously anticipated.
However, Toshiba said the outlook for parent and group operating profit
is brighter because of an increase in demand for information-technology
equipment, including cellular phones and personal computers. In
addition, there has been stability in the prices of electronic devices
such as semiconductors and liquid crystal displays, Toshiba said.
Shimagami said Toshiba will soon unveil a midterm business plan covering
fiscal 2002 through March 2003, a program that the business newspaper
Nihon Keizai Shimbun reported is expected to see the company retreat
from slow-growth businesses and focus the electronics giant on
faster-growing areas, including semiconductors, computer systems and
Internet-related services.
Nikkei, as the newspaper is known, reported the restructuring will come
on top of a plan announced last month to beef up Toshiba's Internet
operations, and would slim down the sprawling 125-year-old company, the
world's No. 1 maker of notebook computers.
U.S. CAPITAL: G. Martin Meyers Announces Securities Suit in New Jersey
----------------------------------------------------------------------
Plaintiff, Rose Rita Picone, has filed an action in the United States
District Court for the District of New Jersey, Docket No. 2:00CV00983,
on behalf of a class of purchasers of promissory notes from U.S. Capital
Corporation, from January 1, 1997 through December 31, 1999. Ms. Picone
contends that she was defrauded in connection with the sale of these
notes, which were promoted by U.S. Capital Funding, Inc., and the other
named defendants, alleging that the defendants had no intention of
repaying the full principal of the notes from the outset; and that the
notes are securities, sold in violation of Section 12 of the Securities
Act of 1933, and Sections 10(B) and 20(A) of the Securities Exchange Act
of 1934. Named as defendants are U.S. Capital Funding, Inc., First
Capital Services, Inc., Merchants Capital, Inc., Katchen Financial
Group, Inc., Raphael Ray Levy, Larry Edward-Schwartz, Yasar Samarah, and
Lawrence J. LaSalla.
For further information, contact G. Martin Meyers, Esq., of the law
offices of G. Martin Meyers, P.C., in Denville, New Jersey. 973/625-0838
WORLD GYM: Customers Misled by Rejected Franchisee Sue Seeking Refund
---------------------------------------------------------------------
A Murrieta health club operator and World Gym International misled and
defrauded thousands of workout fanatics of more than a $1 million,
according to a suit filed in Riverside Superior Court. The lawsuit,
which named Hemet gym operator Gaston "Gus" Alvarez and Santa
Monica-based World Gym International, seeks refunds and unspecified
damages for as many as 3,400 fitness buffs who plunked down as much as
$1,200 for memberships in a gym that never got off the ground.
First proposed more than two years ago, the Murrieta gym was to have
opened early last year off California Oaks Road near the 15 freeway.
Refund delays sparked a demonstration at a Murrieta City Council meeting
earlier this year, pickets in front of a temporary gym location on
California Oaks Road and a steady stream of complaints from dozens of
unhappy members.
World Gym International attorney Ken Gross had not seen a copy of the
suit but said his client should not have been named as a defendant. "I
don't think we have liability as franchisor," he said.
Temecula attorney Charles Delgado, who represents Alvarez, said the
refund problem could be resolved before the suit, which seeks class
action status, reaches a jury. "By the time the class is certified what
I am hoping is they will be paid off or offer them use of a Murrieta
Fitness facility in Murrieta," he said. Members have already received
refunds of about $50,000. But Delgado said outstanding refund requests
total about $80,000. He said he expects that members seeking refunds
could receive their money as early as May, either from the proceeds of a
land sale or an insurance policy.
But the suit said Alvarez was "undercapitalized" and alleges that he and
World Gym violated state laws governing health studios. The suit said
the law requires that "services begin within six months from the date a
contract is entered into" and that refunds be made within 10 days upon
notice of cancellation. In some instances, those who signed up for World
Gym in Murrieta have not received a refund despite requesting their
money months ago.
World Gym revoked Murrieta Fitness' license to operate as World Gym in
mid-February after Alvarez failed to secure a lease for a new gym
location. Company officials also have told disgruntled members of
Murrieta Fitness, which operated as World Gym Fitness, that it was
independently owned.
But the suit claims that Murrieta Fitness and World Gym were synonymous
in the eyes of those who pre-paid for memberships. Because World Gym did
not require its franchisees to disclose that their gyms are
independently owned and Murrieta Fitness used the World Gym name in
advertising to attract members and on its contracts, consumers were
"mislead into believing that World Gym . . . own(s) and operate(s) gyms
which, in reality are franchise owned and operated," the suit said. The
suit also alleges that World Gym should have been aware that "Alvarez
had a history of unfair and deceptive, if not fraudulent, business
practices in the operation of gyms." Alvarez recently pleaded not guilty
to charges he was involved with an insurance fraud at World Gym &
Fitness Center, a Hemet health club he sold in early 1998. The suit asks
that Alvarez be prohibited from selling memberships in a new gym in
Murrieta until the gym "is actually built and equipped."
Alvarez's attorney, in a March 10 letter, said his client is attempting
to sublease 10,000 square feet for another gym. The attorney said an
estimated $200,000 in fitness equipment is ordered and scheduled for
delivery in early April.
The suit also asks the court to appoint a third-party administrator to
account for refunds plus any interest. (The Press-Enterprise Riverside,
March 16, 2000)
YBM MAGNEX: First Marathon Had Power of Atty. to Trade for Mogilyevitch
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Bay Street brokerage First Marathon Securities Ltd. had the power of
attorney to trade YBM Magnex International Inc. shares for Semyon
Mogilyevitch, YBM's receiver told a Calgary court on March 16. According
to the Financial Times, it is the first time that a clear link has been
alleged between Mr. Mogilyevitch -- a notorious Russian organized crime
leader allegedly involved in money laundering, arms trading and drug
trafficking -- and the Canadian brokerage house that played a large role
in promoting YBM stock to North American investors. Litigation in
connection with alleged YBM insider trading has been reported in the
CAR.
Ernst & Young YBM Inc., the court-appointed receiver for the defunct
magnet manufacturer, also told the Court of Queen's Bench of Alberta
that First Marathon and Griffiths McBurney Partners, another well-known
Canadian investment bank, were involved in trading of 'large numbers of
YBM shares' directed from the magnet maker's Philadelphia-area offices.
The two firms were co-lead underwriters in a controversial YBM stock
issue in November, 1997 that raised a further $100-million from the
investing public.
The new disclosures came during arguments over who should be given
access to an extensive investigative report on YBM prepared by Ernst &
Young. It was compiled to help defrauded investors in their litigation.
First Marathon, Griffiths McBurney and Parente, Randolphe, Orlando,
Carey & Ass., YBM's former auditors, do not have a copy and it is not
proposed they get one. But they are fighting to keep it from the
class-action lawyers who are representing YBM shareholders caught
holding $635-million in stock when the company collapsed in May 1998
following an organized crime raid on its Newtown, Pa., headquarters. The
three firms have suggested in court filings that Ernst & Young is biased
and failed to keep them informed of important developments.
But Peter Howard, the lawyer representing the receiver, told Marina
Paperny, the presiding judge, that there is a paper trail showing they
were kept fully informed -- and equally that they have been somewhat
unco-operative. He said First Marathon has refused to produce documents
and has been reluctant to answer questions about its trading in YBM
shares.
Mr. Howard disclosed in court that First Marathon was informed in
writing June 28, 1995, that British authorities had started criminal
proceedings against Mr. Mogilyevitch and Arigon Co. Ltd., his Channel
Islands company that was later wrapped into YBM through a reverse
takeover.
He said he asked the brokerage house for details of a financing in late
1995 and early 1996 in which it acted as special agent and as part of
its compensation got shares 'at between $2 and $3 each. Can you tell us
what you did with those shares?'
He indicated there are some potentially troubling questions about
trading by First Marathon and Griffiths McBurney. 'It appears you were
also involved in some capacity with respect to the trading of large
numbers of YBM shares directed out of YBM's Newtown Pa., office,' the
receiver said in a letter sent to the two investment banks Feb. 1. 'We
would appreciate your full explanation and particulars of such
transactions and personnel involved.'
Jim Hodgson, First Marathon's lawyer, said he is unclear what Mr. Howard
was referring to. 'We have asked for more details from the receiver and,
to date, none have been forthcoming,' said Mr. Hodgson. 'A lot of these
matters are being taken out of context and all of the facts will become
known when the case comes to trial.'
John Keefe, who is representing Griffiths McBurney, did not return phone
calls. YBM's board learned in August 1996 that the company was under
investigation by the U.S. Attorney's Office, likely in connection with
Russian organized crime. Owen Mitchell, a YBM director who is also a
director of corporate finance at First Marathon, was appointed to head a
special board struck to investigate whether the company's original
Russian shareholders -- including Mr. Mogilyevitch -- were linked to
Russian organized crime.
Mr. Howard read from a letter written by Jacob Bogatin, YBM's president,
to 'an employee of First Marathon' on Jan. 28, 1997. 'It says, 'Here are
our stock certificates and power of attorney for' and it lists three
names: Alex Alexandrov, Semyon Mogilyevitch, and Alexei Alexandrov.'
'This was in January 1997, the same time as Mr. Mitchell and the special
committee were looking into allegations of criminal activity in the
company,' said Mr. Howard. 'By that time, the name Semyon Mogilyevitch
was in the papers and the object of some notoriety.' He also said the
receiver has asked First Marathon for details of the controversial 1997
financing. (National Post (formerly The Financial Post), March 17, 2000)
*********
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. 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.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each. For
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