/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000810.MBX C L A S S A C T I O N R E P O R T E R Thursday, August 10, 2000, Vol. 2, No. 155 Headlines BRIDGESTONE/FIRESTONE: Cable News Network Coverage on Tires Recall CARTER-WALLACE INC: Appeals Court Affirms Dismissal of Securities Suit FIDELITY HOLDINGS: Laurence D. Paskowitz Files Securities Suit in NY GENERAL MOTORS: Probed For Alleged Payoffs to Uaw to End Strike in 1997 HMOs: QualChoice Sued for Testing Needy Children for Lead Poisoning HOLOCAUST VICTIMS: Final List of Swiss Dormant Accounts to Be out Soon LERNOUT & HAUSPIE: Federal Court Dismisses Securities Lawsuit in MA NAHC INC: Savett Frutkin Files Securities Suit Vs Former Novacare in PA NATIONAL COMPUTER: Second Lawsuit over Test Filed against NCS RESIN SUPPLIERS: B.C. Appeal Court Clarifies Rules on Jurisdiction TOBACCO LITIGATION: Federal Judge Keeping An Open Mind over Venue TOBACCO LITIGATION: Sun-Sentinel Reports Death of Another Class Member ********* BRIDGESTONE/FIRESTONE: Cable News Network Coverage on Tires Recall ------------------------------------------------------------------ (Broadcast on the CNN on August 9, 2000) DARYN KAGAN, CNN ANCHOR: But now we move on to one of the larger consumer recalls in recent memory. Beginning today, tire manufacturer Bridgestone/Firestone is calling back some 20 million tires. Several models are blamed in highway crashes that have killed or injured dozens of people, tires worn by mostly popular SUV models. We have two live reports for you this morning. First we go to CNN's John Zarrella in Miami, and then we will check in with Kelli Arena in Washington, where that is set to begin. Kelli, we will go to you first. John, you stand by. Kelli, what do you have? KELLI ARENA, CNN CORRESPONDENT: OK, Daryn. Well, we are going to get the details straight from Bridgestone/Firestone at 11:00 this morning. Now, the company has refused to comment on the recall yet. They have repeatedly said that their tires are safe. Our sources tell us that the limited recall was decided on after meeting with the National Highway Traffic Safety Administration and Ford Motor Company, which uses the tires on its popular Explorer SUV. Now crisis management specialist that we have spoken to say that a recall was in fact the only answer for the company, which was facing a media barrage showcasing victims and their families. (BEGIN VIDEOTAPE) ARENA (voice-over): Randall Smithwick says he doesn't need federal investigators to tell him there is something wrong with certain Firestone tires. He learned firsthand when he lost control of his Ford Explorer as his tire shredded. RANDALL SMITHWICK, CRASH VICTIM: They let my family be hurt. They let me be hurt. ARENA: After reports of 46 deaths and more than 80 injuries allegedly linked to Firestone tires, sources close the company tell CNN that Bridgestone/Firestone is set to announce a limited recall of the tires in question. The recall will occur in phases. Starting with the warmer southern states, where most of the incidents occurred. Those involved the treads peeling off the tires causing accidents. The National Highway Traffic Safety Administration has been investigating complaints since early May. But no action has been taken. Sparking at least two class-action lawsuits. GARY MASON, CLASS ACTION ATTORNEY: Not only are we interested in finding out whether or not this product is defective. But why wasn't the product recalled at this time in the United States when it has been recalled elsewhere? There is little margin of error when you are talking about people's lives. ARENA: The tires were, in fact, recalled in six other countries by Ford Motor, which uses them on its Explorer SUV and other vehicles. Major tire retailers, including Sears, had already suspended sales in the U.S. (END VIDEOTAPE) ARENA: Now, this is not the first major hit for Firestone. It suffered a major recall of its 500 steelbelt radial tires back in 1978. Now, after that, it nearly went bankrupt. And from a PR point of view, this could not have come at a worse time for the company because it was planning to commemorate its 100th anniversary this year Daryn. KAGAN: Kelli Arena in Washington. Once again, we will being going there when the news conference begins in the next hour. Thank you, Kelli -- Bill. BILL HEMMER, CNN ANCHOR: And once again, Firestone beginning that limited recall with tires sold in warmer climates. Miami, Florida certainly qualifies in this category. Here is our bureau chief there. John Zarrella, with more on what is happening from southern Florida. Hello, John. JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Bill, you know, it is interesting because the attorney representing the family that we saw in Kelli's piece there, Randall Smithwick and his family told us, he said, you know, that's interesting that they are only going to recall the tires in the southern state, what about the people who some down to the southern states for vacation to Florida, places like that? That they are still going to be susceptible to the conditions that they will be driving on here in the southern states? So an interesting point of course raised by the attorney for the Smithwicks. Now, it was, again in Kelly's piece, Randall Smithwick talking there. He and his family driving on I-75 about a week ago, one of the latest cases where a tire shredded and the car flipped over three times into the median. Every member of the family and a friend of the family's injured, a couple of those people still recovering in a Broward County hospital today. Randall Smithwick expected to be there for quite some time, recovering from his injuries. His wife, though, was in our studios a little earlier ago today, and she told me that she just wished that they had known sooner about the problems with the tires. (BEGIN VIDEO CLIP) BRIGITTE SMITHWICK, WIFE OF ACCIDENT VICTIM: I wish we would have known. We had no idea. We had no clue at all whatsoever. They had nothing in the papers, nothing on the news, nothing, after all the other injured that has happened and people that lost their lives and stuff. I just hope it doesn't happen to anyone else. And thank God we're here, and we are going to get it together and hold each other and make it through this hopefully. (END VIDEO CLIP) ZARRELLA: The attorney representing the family told us, he's not quite sure what's taken Firestone so long to make this decision. He says that, in his investigations, not only of this case, but others that he also has involving tire separation, that the company has known for quite a while that there was a problem with the tire. (BEGIN VIDEO CLIP) RALPH PATINO, VICTIMS' ATTORNEY: I think that we can blame that on corporate arrogance. The old head in the sand scenario. They have not wanted to acknowledge for the last four years that they've had a major defect with these tires. Now, all of a sudden, because of the pressure, they have acknowledged it. Now it's time to get the tires off the road, completely off the road, and start from scratch. (END VIDEO CLIP) ZARRELLA: This is now just one of the many cases, the Smithwick case, one of many, that Firestone is likely to face litigation, they are likely to face in the future, regarding the failure of those tires -- Bill. HEMMER: All right, John, John Zarrella from Miami, thank you. Now to Daryn for more on this. KAGAN: As you can imagine, a lot of drivers with Firestone tires in their cars must be showing up at Firestone dealerships across the U.S. Dan Ronan is here at one in Atlanta -- Dan. DAN RONAN, CNN CORRESPONDENT: Well, Daryn, it has been quite busy on this Firestone dealership on the north side of Atlanta since we've been here about an hour, maybe an hour and 10 minutes. We have seen no less than 10 vehicles come in, the big Ford Expeditions and a couple of Jeep Cherokees that have got the suspect tires on them. And all of the people have come in, and started to begin the process to get their vehicles, to get the tires replaced. I ma joined by one of those people. A lady by the name of Stacey Garland. Stacey, what was your experience this morning when you went in there? STACEY GARLAND, CUSTOMER: When I actually went into the place, they told me that they could inspect my tires in a couple of hours, but they couldn't replace them, even if Firestone was recalling them, because they don't have the tires in stock. And that Firestone hasn't made an announcement whether or not the tires are going to be recalled. RONAN: So the actual dealers, they are waiting for the actual recall announcement, then? GARLAND: Right, at noon, they said. RONAN: Now, you were saying, you have got a trip planned today, you have got a long trip planned. GARLAND: Yes, I do, out to North Georgia. And I am going to have to go rent a car to do that, because I won't drive my car. RONAN: Really? GARLAND: Really. RONAN: Just because you're that nervous about the heat? GARLAND: Yes, absolutely. It's, you know, an 80 mile trip each way. So I don't want to drive my car out there. RONAN: Now, have you had any problems since you have owned the vehicle eight, nine months? GARLAND: No, I haven't had any problems. But neither did those other people that were killed in their cars. So, you know, it's a little scary. RONAN: Better safe than sorry. GARLAND: That's right. RONAN: So, Daryn, that is the situation here. We've seen a lot of people coming in. It has been quite busy. The folks behind us here at the Firestone and the Bridgestone dealers, they have been out trying to get people in and accommodate them. But they've got a lot of work on their hands. And they are going to be seeing a lot more people like Stacey here throughout the next couple of days, wanting to get these tires replaced and get them fixed as soon as possible. Dan Ronan reporting live in Atlanta. KAGAN: A lot of questions to answer out there. Thank you, Dan. Hopefully some of those questions will be answered as Firestone holds a news conference in less than an hour from now. It is scheduled to begin at 11:00 a.m. Eastern. We plan to bring that to you live here on MORNING NEWS. CARTER-WALLACE INC: Appeals Court Affirms Dismissal of Securities Suit ---------------------------------------------------------------------- Carter-Wallace, Inc. (NYSE:CAR) announced on August 9 that the United States Court of Appeals for the Second Circuit affirmed a lower court dismissal of all shareholder Security Act claims against the company relating to Felbatol, the company's anti-epilepsy drug. Two consolidated federal securities class action suits filed in 1994 by stockholders against the company and certain of its present and former officers in the United States District Court, Southern District of New York, alleged that certain statements made by the company with respect to the safety and anticipated future sales of Felbatol were false and misleading. In upholding the dismissal of these claims, the appellate court stated that Carter-Wallace had "acted reasonably" in alerting the medical profession of adverse side effects once a linkage was established with Felbatol and that the plaintiff shareholders had "failed adequately to plead reckless behavior on Carter-Wallace's part." FIDELITY HOLDINGS: Laurence D. Paskowitz Files Securities Suit in NY -------------------------------------------------------------------- On August 8, 2000 a Class Action was filed in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased Fidelity Holdings, Inc. ("Fidelity") common stock during the period from November 15, 1999 through April12, 2000 (the "Class Period"), by attorneys Laurence D. Paskowitz, Esq. and Roy L. Jacobs, Esq. Both Mr. Paskowitz and Mr. Jacobs have many years of successful experience in litigating class actions. The lawsuit alleges that during the Class Period, Fidelity and a number of its officers and directors issued materially false and misleading statements regarding Fidelity's earnings, the prospects and progress of its Technology Division, and its ability to obtain necessary financing to support continuing operations. On April 12, 2000 Fidelity shocked the market by announcing that it would report a loss in excess of $3 million for the fiscal year ending December 31, 1999, along with other adverse news regarding its Technology Division and financing efforts. As a result of this news, the price of Fidelity shares dropped over 80 per cent, from approximately $20 per share to just over $3 per share. The Complaint also alleges that, during the Class Period, Fidelity and certain of its officers and directors, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by the issuance of materially false public statements concerning the business prospects and the financial condition of Fidelity. Contact: Laurence D. Paskowitz, Esq. 767 Third Avenue 35th Floor New York, NY 10017 Telephone: 212-486-6798 Telecopy: 212-751-3175 email: classattorney@aol.com or Roy L. Jacobs, Esq. 350 Fifth Avenue Suite 3000 New York, NY 10118 Telephone: 212-695-2476 Telecopy: 212-695-6007 email: rljacobs@pipeline.com GENERAL MOTORS: Probed For Alleged Payoffs to Uaw to End Strike in 1997 ----------------------------------------------------------------------- Federal investigators are investigating whether General Motors Corp. paid $ 200,000 to United Auto Workers officials to settle a costly strike in 1997 in what would be an unprecedented collusion between the union and the manufacturing giant. The charges were made in a civil lawsuit filed Monday against the UAW and GM. The suit also alleges that the world's leading auto maker gave jobs to a family member and a friend of senior union officials for which they were not qualified. "The local union leadership was extorting money from GM by not agreeing to a settlement until GM paid off the union," said Harold Dunne, an attorney for the plaintiffs in the suit. "GM caved in and paid local leaders money they knew they were not entitled to, in violation of federal law and workers' rights." "It was extortion by the union and bribery by General Motors," Dunne said in a telephone interview. Longtime observers of the UAW reacted with surprise at the charges. "I don't recall any charge of collusion between management and the union in the past," said David Lewis, a professor of automotive history at the University of Michigan. "That's why it's so shocking to have, on the one hand, union negotiators who sold out to management, and then management who is willing to do such a thing. It's shocking on both ends. It's un-UAW-like and un-GM-like." The lawsuit, filed in U.S. District Court in Detroit by 21 members of UAW Local 594, seeks class-action status for as many as 6,000 factory workers who each lost $ 10,000 to $ 20,000 in wages because of the strike, Dunne said. In all, the suit seeks $ 50 million in compensatory damages from GM and the UAW and $ 500 million from the union in punitive damages for the lost wages. FBI spokeswoman Dawn Clenney told Reuters news service that a probe was underway but declined to comment further. The Labor Department did not respond to requests for confirmation that it is also investigating the charges. "General Motors is cooperating with the appropriate agencies involved in the investigation of the 1997 labor settlement," GM spokesman Brian Akre said. "We have not yet been served with the class-action civil lawsuit," Akre said, adding that GM would have no further comment. Of the American auto makers, GM has traditionally had the most adversarial relationship with the UAW. Plaintiffs in the lawsuit work at the Pontiac East plant north of Detroit, where a 1997 strike lasted 87 days and shut down production of GM's highly profitable full-size pickup truck line. The walkout cost GM production of 70,000 pickup trucks and several hundred million dollars in lost profit in the second quarter of 1997. The government investigation was first reported Tuesday by the Detroit Free Press. The newspaper quoted Pat Meyer, founder of UAW Concerns, a self-appointed watchdog body, as saying that the Labor Department inspector general's office "told me they want UAW President Stephen Yokich and his lieutenants. They said it showed the corruption and the nepotism of the UAW." The UAW had no comment, spokesman Roger Kerson said. According to the lawsuit, GM tried to settle the strike by making illegal payments totaling $ 200,000 disguised as overtime pay to top Local 594 officials in Detroit. GM's biggest payoffs were $ 40,000 to the shop committee chairman and $ 60,000 to the skilled trades committeeman, according to plaintiffs' attorney Dunne. The UAW bargaining committee also demanded that GM hire the son of a UAW vice president and the son of a friend of another local union official as skilled trades workers without the normal training experience, the lawsuit alleges. GM at first refused the demands and the strike dragged on for two more months before the auto maker gave in, the lawsuit says. The 5,400 Local 594 members who walked off the job were never told of the secret deal to hire the two workers or about the $ 200,000 in payments, Dunne said. "We are charging GM with breach of contract and the UAW with breach of its responsibility to represent its members," he said. Daniel Kruger, a professor at the School of Labor and Industry Relations at Michigan State University, said: "I find it hard to believe that this took place between two parties with collective-bargaining relations going back to 1937. They know how to work together, and all of a sudden to hear allegations of major wrongdoing. . . ." Investigators are not likely to have an easy time pinning down the charges, Kruger said. "To prove that these were bogus overtime payments will be very difficult," he said. "If it was UAW committee persons, the overtime really racks up, and they can make more than $ 100,000 a year." UAW committee persons are either auto workers or union employees who monitor factory operations to ensure that contract working conditions are maintained, Kruger said. The strike began in April 1997 and ended that July. As part of the settlement, GM agreed to hire 567 workers and pay $ 11 million to settle grievances. (Los Angeles Times, August 9, 2000) HMOs: QualChoice Sued for Testing Needy Children for Lead Poisoning ------------------------------------------------------------------- A managed-care provider has been sued over the issue of testing needy children in Cleveland for lead poisoning. Attorneys for Stephaun Gibson filed the lawsuit Tuesday in U.S. District Court against the QualChoice Health Plan and asked that it be made a class-action on behalf of other children in similar circumstances. The suit claimed doctors deprived Medicaid patients of tests that could have detected lead poisoning in thousands of Cuyahoga County children under age 2. The suits seeks to require lead testing for covered children. QualChoice, a subsidiary of University Hospitals Health Systems, is one of four providers to Medicaid patients in Cuyahoga County. Thomas A. Sullivan, the president of QualChoice, said the provider is sensitive to the need to test for lead poisoning. "Let me assure you that this is something that we do, it is something that we encourage, and it is something that we believe is very, very important," Sullivan said. He said that if patients have complaints about the services they receive through Medicaid, they can file a grievance with the state. No such grievance has been filed on the lead poisoning issue, he said. (The Associated Press State & Local Wire, August 9, 2000) HOLOCAUST VICTIMS: Final List of Swiss Dormant Accounts to Be out Soon ---------------------------------------------------------------------- The Swiss Bankers' Association is to publish soon the names of thousands of people with dormant accounts in Swiss banks whose owners may have been Holocaust victims. In a move bringing a painful chapter in Swiss history one step nearer to a close, the Bankers' Association (SBA) will publish the list on the internet between now and October, banking sources said Wednesday. Previous lists of dormant accounts have been published since 1997, when the debate about Switzerland's role during World War II peaked, but the new list will be the definitive one, the sources said. An inquiry led by former US Federal Reserve chairman Paul Volcker on behalf of the SBA in about 60 Swiss banks of accounts opened between 1933 and 1945 uncovered 54,000 unclaimed accounts last year. The figure has since been revised down to 46,000. Even before the Volcker Commission's findings, two big Swiss banks, UBS and Credit Suisse, struck an agreement with Jewish organisations on behalf of class action plaintiffs in August 1998. They agreed on a 'global accord', a fund containing 1.25 billion dollars. The out-of-court settlement covers claims by the owners of dormant accounts in Swiss banks or their heirs. The fund will also make payments to people whose property was looted by the Nazis and those who were forced to work for companies which had Swiss bank accounts or worked for Swiss companies operating in Nazi Germany. New York judge Edward Korman who approved the settlement on July 26 asked for certain changes to be made to it, including a demand for Swiss companies to come forward before August 26 to declare whether they may have used forced labour during World War II. Failure to do so would rule them out of the global accord and effectively leave them open to additional lawsuits. A number of Swiss firms, including food giant Nestle and engineering group ABB, have already informed Korman that they used forced labour in their German branches. Holocaust survivors, or their heirs, whose names may appear on the Bankers' Association list will have to address their claims to Korman. First payments from the settlement could begin before the end of the year. Swiss bank UBS has already indicated it had a financial involvement in a Polish cement works which was seized by the Nazis who then used about 400 forced labourers from Auschwitz concentration camp. In 1941 the bank -- which at the time was called the Society of Swiss Banks failed in its attempt to sell its shares in the factory, UBS spokesman Christoph Meier said. The bank could not be considered responsible for decisions taken by the Nazis when they ran the factory, Meier said. According to the German news magazine Der Spiegel, a former German worker in the factory has lodged a claim with Korman which, if the judge accepts its validity, could be settled either from the Swiss fund, or through a five billion dollar German fund set up after an accord between German business and US Jewish organisations on forced labour. (Agence France Presse, August 9, 2000) LERNOUT & HAUSPIE: Federal Court Dismisses Securities Lawsuit in MA ------------------------------------------------------------------- Lernout & Hauspie (NASDAQ: LHSP; EASDAQ: LHSP) (L&H), a company in speech and linguistic technologies, products and services, announced on August 9 that the U.S. District Court in Massachusetts dismissed the consolidated securities class action lawsuit commenced against L&H in January of 1999. Since the inception of this lawsuit L&H has maintained that it considered the lawsuit to be without merit and that it intended to vigorously defend against the claims. NAHC INC: Savett Frutkin Files Securities Suit Vs Former Novacare in PA ----------------------------------------------------------------------- A class action complaint was filed on August 9 in the United States District Court for the Eastern District of Pennsylvania on behalf of a class of persons who purchased the common stock of Novacare Inc. at artificially inflated prices during the period December 28, 1999 through August 7, 2000 ("Class Period") and who were damaged thereby. Novacare, now known as NAHC Inc. traded on the New York Stock Exchange until November, 1999 and now trades on the OTC Bulletin Board ("Novacare", "NAHC" or the "Company") The complaint charges the Company and related defendants with violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the Class Period, defendants misrepresented the Company's liquidation value and financial condition by making false and misleading statements inflating the proceeds from the sale of its component businesses. As a result of defendants' misrepresentations, the price of the Company's common stock was artificially inflated throughout the Class Period. Contact: Savett Frutkin Podell & Ryan, P.C. Robert P. Frutkin, Esquire Barbara A. Podell, Esquire 215/923-5400 or 800/993-3233 sfprpc@op.net NATIONAL COMPUTER: Second Lawsuit over Test Filed against NCS ------------------------------------------------------------- A second class-action lawsuit has been filed against National Computer Systems Inc. for its scoring errors on the Minnesota basic-skills math test. The latest lawsuit lists nine counts, ranging from breach of contract and negligence to defamation and unjust enrichment. National Computer Systems is the private, Eden Prairie-based company hired by the state to score the tests. About 8,000 students were told they failed the math part of the state's basic skills test when they actually passed. In all, about 47,000 students who took the test in February and April this year received the wrong scores because of errors made by the Assessments and Testing Division of NCS. As many as 336 seniors may have been kept from graduating because of the error and thousands more may have been required to take summer courses. NCS admitted its mistake and offered $1,000 in tuition reimbursement to each senior wrongly told that he or she had failed. "I just want this company to realize they can't do this ever again. Maybe that's pie in the sky," said Dianne Eisenbraun, who brought the latest lawsuit. Eisenbraun sued on behalf of herself and her daughter, Jaime, who'll be a sophomore at Fridley High School this fall. Jaime still doesn't know that she passed the test because she's away on a church mission trip to Tijuana, Mexico. NCS does not comment on pending litigation, according to its spokesman, Dave Hakensen. Attorney Richard Fuller, who is filing the lawsuit in Hennepin County District Court on behalf of the Eisenbrauns and Kersten and Breslen Peterson of Janesville, said NCS didn't earn the money it was paid by the state and should compensate the children and families inconvenienced by its mistakes. Greg and Frankie Kurvers, the parents of Danielle Kurvers of Burnsville, were the first to file against NCS on Friday. The Kurvers spent about $3,000 for private tutoring at Sylvan Learning Centers. Danielle will be a junior in high school this year. The Kurvers' lawsuit seeks compensation for damages suffered by the Kurvers and the proposed class members; attorneys' fees; an injunction that would keep NCS from acting similarly in the future; and "other and further relief the court deems just and equitable." Michael Fay, another Minneapolis attorney, said Tuesday that he is poised to file two more class-action suits this week - one on behalf of seniors denied their diplomas and one on behalf of other students inconvenienced by the scoring mistake. (The Associated Press State & Local Wire, August 9, 2000) RESIN SUPPLIERS: B.C. Appeal Court Clarifies Rules on Jurisdiction ------------------------------------------------------------------ B.C. courts have jurisdiction to hear a class action lawsuit against three out-of-province firms who allegedly supplied resins used to make plumbing fixtures that later turned out to be defective. The B.C. Court of Appeal judgment settles an eight-year-old dispute over the use of evidence to determine the court's jurisdiction over foreign defendants. A court has jurisdiction simpliciter over a case when there is a real and substantial connection between the court and the defendant or the subject matter of the litigation, Justice Kenneth Mackenzie said in a judgment concurred in by Justices William Esson and Anne Rowles. Rule 13(1) of B.C.'s Supreme Court Rules extends this general proposition by allowing a plaintiff to serve a writ on an out-of-province defendant in certain, specific situations. In the case at bar, the plaintiffs relied on r. 13(1)(h) which authorizes service ex juris when the lawsuit involves "a tort committed in B.C." Defendants Shell Oil, Du Pont, and Hechst Celanese applied to set aside service on the ground they did not conduct business within the jurisdiction. Relying on the B.C. Court of Appeal's judgment in G.W.L. Properties Ltd. v. W.R. Grace and Co. (1990), 50 B.C.L.R. (2d) 260, the defendants argued the question of jurisdiction simpliciter could only be resolved by weighing evidence, not by merely reviewing the pleadings. But in a more recent decision, Bushell v. T. & N. plc. (1992), 67 B.C.L.R. (2d) 330, the Court of Appeal said the pleadings, not evidence, governed. In Bushell, Chief Justice Allan McEachern said the test of whether the court has jurisdiction simpliciter under r. 13(1) "is an intellectual exercise not involving any discretion." This clearly suggests evidence cannot be considered. Justice Mackenzie, however, ruled the cases could be distinguished. He said the affidavit evidence used in G.W.L. Properties was irrelevant to the issue of jurisdiction because it did not challenge essential facts in the pleadings. "I do not think that the references in G.W.L. Properties to the plaintiff's duty to show that it had a good arguable case imply that the case had to be made out on evidence where the pleaded facts essential to jurisdiction were not challenged by the defendant's evidence,"he wrote. "It would be necessary for the defendant to introduce evidence, not merely to make denials or raise affirmative defences on the pleadings, before the plaintiff would be required to make an evidentiary response." He also said Chief Justice McEachern's comments in Bushell were obiter but a generally correct statement of the law. Justice Mackenzie added that changes to the B.C. rules in 1977 eliminated the need for affidavit evidence of facts disclosing a good cause of action before a plaintiff was allowed to serve a writ outside the province. "In my opinion, evidentiary support for facts properly pleaded which are not put in issue by the defendant's evidence is unnecessary." He said the question of jurisdiction simpliciter is "normally an intellectual exercise not involving discretion"but evidence can be of limited assistance in the rare cases where the pleaded facts are insufficient for the court to determine the issue. As an example, he cited a claim based on a contract requiring that the defendant have assets in B.C. In such a case, those facts are not part of the pleadings because they are not relevant to the cause of action, he said. "Where those 'jurisdictional facts'are contentious, the party asserting jurisdiction is required to show a good arguable case that the unpleaded jurisdictional facts can be established. Normally, however, the facts necessary for jurisdiction simpliciter will be pleaded and the issue will be, in the phrase of the Chief Justice, an intellectual exercise." He added that there may also be a "residual category"where the plaintiff has advanced such a tenuous claim that the court has to resort to evidence to determine jurisdiction simpliciter. "This residual category has not been explicitly recognized by this court but, in my opinion, it is an appropriate qualification of the general proposition that jurisdiction simpliciter is determined on the pleadings," he concluded. He said the plaintiffs established jurisdiction simpliciter in their pleadings and that affidavit evidence presented by the three defendants did not challenge it. Relying on the Supreme Court of Canada's decision in Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393, Justice Mackenzie said the court has jurisdiction over a tort where the damage occurs. "G.W.L. Properties stands for the proposition that if the damage from a manufactured product occurs in B. C., the tort of negligence is committed in B. C. even though the negligent act or omission happened elsewhere." (THE LAWYERS WEEKLY, August 11, 2000) TOBACCO LITIGATION: Federal Judge Keeping An Open Mind over Venue ----------------------------------------------------------------- A federal judge who inherited a record $ 145-billion verdict for sick Florida smokers told lawyers Tuesday that she has an open mind on whether she will keep the tobacco case or send it back to state court. "I have no feelings about that one way or another right now," U.S. District Judge Ursula Ungaro-Benages said at her first hearing in the landmark case. Ungaro-Benages said she would not consider any new motions until she determines whether she will keep the case against the nation's five biggest cigarette makers. She set up a rough timetable allowing smokers to file a motion to return the case to state court next week and giving tobacco attorneys two weeks to respond. A six-member jury ruled against the industry, awarding $ 12.7-million in compensatory damages to three people in the class-action suit. (St. Petersburg Times, August 09, 2000) TOBACCO LITIGATION: Sun-Sentinel Reports Death of Another Class Member ---------------------------------------------------------------------- For the past two months, Olga Seronne rarely left her husband's side as he lay in Baptist Hospital connected to oxygen tanks and struggling to breathe because of severe emphysema. On Tuesday, Seronne left the hospital briefly so she and her daughter could attend a federal court hearing, just one of hundreds of hearings since the statewide class action against Big Tobacco began seven years ago. It appeared to be an almost inconsequential half-hour in this mammoth precedent-setting case, during which lawyers told the judge when they intend to file written arguments on whether the case should continue in federal or state court. "I have no feelings about that one way or another right now," U.S. District Judge Ursula Ungaro-Benages said at her first hearing in the landmark case. But 30 minutes can be precious to the hundreds of thousands of class members like Miguel Seronne, ravaged by diseases like emphysema and lung cancer. After the hearing, as the brigade of tobacco lawyers and the crowd of class members piled into elevators to leave the courthouse, the Seronnes' daughter called the hospital to check on her father. A hospital worker informed her that about 30 minutes earlier, as the court hearing was just getting under way, her father died. Screams of anguish from the two Seronne women pierced the cold formality of the halls in the Miami federal courthouse. Miguel Seronne, who came to Miami 20 years ago from Chile and often attended the trial during the past two years, is just one of the many class members who will never see this case through to its conclusion. Frank Amodeo, an Orlando clock maker who is one of three people representing the entire class, said Seronne is about the fifth class member regularly at the trial to die from a smoking-related illness. Angie DellaVecchia, a New Port Richie homemaker who was also a class representative, succumbed to lung and brain cancer more than a year ago. A six-member jury awarded $ 12.7 million to the two living class representatives and DellaVecchia's husband, as compensation for their pain, suffering and medical bills. And last month, the jury set a national record when it said the tobacco company defendants should pay $ 145 billion in punitive damages to the class. That same day, July 14, a federal labor union filed legal papers asking to join the class. Ten days later, the nation's five top cigarette companies filed legal papers seeking to have the case moved to U.S. District Court. They claim that when the union asked to join the class, they raised federal issues that should be heard in federal court. Ungaro-Benages now must decide whether the national union's request triggers federal insurance laws, which would put it in her jurisdiction. The tobacco companies, which in this case have had no success in Florida's state courts, appear to be more optimistic about how the industry would fare in federal court, where it has a more successful track record. Historically, federal judges are hostile to such class actions. Miami-Dade Circuit Judge Robert Kaye, who presided over the two-year trial, has never ruled whether the union should be included in the class, smokers' lawyer Susan Rosenblatt said after the 15-minute hearing on Tuesday. And none of the class members has collected any money yet, she noted. Rosenblatt said she and her husband and law partner, Stanley, would file their written arguments next week against moving the case to federal court. The tobacco companies will then have two weeks to respond. Ungaro-Benages said she will decide whether to entertain oral arguments before making her decision. (Sun-Sentinel (Fort Lauderdale, FL), August 9, 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. 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