/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010308.MBX C L A S S A C T I O N R E P O R T E R Thursday, March 8, 2001, Vol. 3, No. 47 Headlines BLACK HAWK: Gaming Co. Announces Filing of Suit in CO By Shareholder BROADCOM CORP: Accused of Defrauding Investors, Says Berman DeValerio BROADCOM CORP: Cauley Geller Announces Securities Lawsuit Filed in CA BROADCOM CORP: Charles J. Piven Announces Securities Lawsuit Filed in CA BROADCOM CORP: Schiffrin & Barroway Files Securities Suit in CA CITIGROUP: FTC Takes Lender to Court for Abusive Practices CYBERGUARD CORP: Action Vs. KPMG Re Financial Statement ’96-98 Goes on CYBERGUARD CORP: Continues to Defend Securities Suit Filed in 1998 in FL CYBERGUARD CORP: SEC Investigation Commenced in 1998 Goes on DEPARTMENT 56: Lionel Z. Glancy Announces Securities Lawsuit Filed in MN FAX.COM INC: Judge Rules Fd Law Can Be Used In State Ct In Junk Fax Case FIRSTPLUS FINANCIAL: Ends Negotiations to Acquire Nineteenth Investment HIP IMPLANTS: Charfoos & Christensen Files Suit against Sulzer Medica HOLOCAUST VICTIMS: Judge Refuses to Dismiss Lawsuit Vs. German Banks HOLOCAUST VICTIMS: Poland OKs Limited Payments for Seized Property HOLOCAUST VICTIMS: Schroeder to Meet with German Industry on Payments KCP&L: Fd Judge Says Claims Too Broad for Race Bias Class V. Kansas City KIA MOTORS: PA and NJ Suits Allege Brake Defects in 1998, 1999, 2000 NAPSTER: Indicates Readiness to Comply with Injunction, Seeks Settlement NATIONAL GUARD: Lawsuit Seeks Tens of Millions for Sexual Harrassment ONTARIO REALTY: Lawsuit Targets Toxic Mouldy Newmarket Courthouse ROCK HILL: Investors Sue SC Bank Alleging Fraudulent Investment Program SCIENTIFIC LEARNING: Notifies of Voluntary Dismissal of Securities Suit TOBACCO LITIGATION: Panel Awards ANTI-TOBACCO LAWYERS $637.5 Mil ********* BLACK HAWK: Gaming Co. Announces Filing of Suit in CO By Shareholder -------------------------------------------------------------------- Black Hawk Gaming & Development Company, Inc. (Nasdaq: BHWK) announced on March 7 that it has been served with a complaint brought by a person claiming to be a shareholder. The lawsuit purports to be a class action and was filed in the Colorado District Court in Gilpin County, Colorado. Black Hawk's directors were also named in the action. The suit alleges, among other things, that the defendants, allegedly controlled by Jeffrey P. Jacobs, Chairman and CEO, are violating their fiduciary duties owed to the public shareholders and are engaging in improper and unfair dealing and wrongful and coercive conduct. This is designed, according to the suit, to cause Black Hawk shareholders to relinquish their shares without an adequate process to ensure that shareholders receive the highest price obtainable. On February 27, it was announced that Mr. Jacobs had offered to purchase all Black Hawk shares not owned by him for $11 per share cash. A Special Committee of the Board consisting of three independent directors was immediately appointed to consider the offer. The Special Committee has engaged its own independent law firm to advise it and it is close to choosing its own independent investment bankers to assist the Special Committee. The Board believes that it has met and will continue to meet its fiduciary duties, as will the Special Committee, and that a process has been put in place to maximize shareholder value. Therefore, the suit will be vigorously defended. The plaintiff seeks, among other things, to enjoin the buy-out transaction and asks the court to award compensatory damages and legal fees. BROADCOM CORP: Accused of Defrauding Investors, Says Berman DeValerio --------------------------------------------------------------------- Shareholders on March 6 filed a federal class-action lawsuit charging Broadcom Corp. (Nasdaq: BRCM) with securities fraud, the law firm Berman DeValerio & Pease LLP said. The lawsuit was filed in the United States District Court for the Central District of California and is captioned Murphy v. Broadcom Corp. et. al. It seeks damages for violations of federal securities laws on behalf of all investors who bought Broadcom common stock between July 30, 2000 and February 27, 2001 (the "Class Period"). Broadcom is charged with improperly accounting for the multi-million dollar amount of warrants provided to customers who purchased specified amounts of Broadcom product. In particular, it is charged that Broadcom's 2000 third quarter financial statements improperly failed to reduce net revenues by the amount of warrants given to customers who purchased Broadcom product. In addition, Broadcom is charged with failing to disclose the specific information relating to its granting customers warrants in exchange for buying Broadcom product. On February 27, 2001 The Wall Street Journal published an article concerning Broadcom's practices relating to granting warrants to customers in exchange for purchasing product. Broadcom's stock price fell in the next three trading days from $63 per share to $41 per share, an almost 35% decline. In addition, Broadcom's top officers are charged with selling more than $80 million worth of common stock prior to the revelations about the warrants for products deals. Contact: Leslie Stern, Esq. of Berman DeValerio & Pease, 800-516-9926, or bdplaw@bermanesq.com, or Jennifer Abrams of Berman DeValerio Pease & Tabacco, 415-433-3200 BROADCOM CORP: Cauley Geller Announces Securities Lawsuit Filed in CA --------------------------------------------------------------------- The Law Firm of Cauley Geller Bowman & Coates, LLP announced that it has filed a class action in the United States District Court for the Central District of California on behalf of all individuals and institutional investors that purchased the common stock of Broadcom Corp. (Nasdaq:BRCM) between October 18, 2000 and February 26, 2001, inclusive (the "Class Period"). The complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information about the Company's business and financial condition, and as a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. Specifically, the complaint alleges that during the Class Period, defendants made positive but false statements about Broadcom's results and business, while concealing material adverse information about agreements with certain companies it acquired, which essentially resulted in Broadcom buying its own revenues. As a result, Broadcom's stock traded at artificially inflated levels, permitting the three individual defendants to sell$45.8 million worth of their Broadcom stock. Then, on 2/27/01, The Wall Street Journal published an article on Broadcom entitled "Warrant Deals Raise Concerns on Broadcom," in which analysts and accounting experts questioned the "legitimacy" of the transactions and termed the agreements "troubling." Broadcom's stock immediately dropped, falling 16% to $53, before closing at $53.625 on 2/27/01, and falling to $49.25 on 2/28/01. Contact: Cauley Geller Bowman & Coates, LLP, Boca Raton Sue Null, Charlie Gastineau or Jackie Addison Media: Sue Null or Charlie Gastineau Toll Free: 1-888-551-9944 E-mail: info@classlawyer.com BROADCOM CORP: Charles J. Piven Announces Securities Lawsuit Filed in CA ------------------------------------------------------------------------ Law Offices Of Charles J. Piven, P.A. advised investors that on March 6, 2001, it filed a class-action lawsuit charging Broadcom Corporation (NASDAQ:BRCM) with securities fraud in the United States District Court for the Central District of California, Case No. SACV01-279 GLT (ANx). The suit seeks damages for violations of federal securities laws on behalf of all investors who bought Broadcom Corporation common stock between July 31, 2000 through February 27, 2001 (the "Class Period"). The complaint charges Broadcom and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants made positive but false statements about Broadcom's results and business, while concealing material adverse information about agreements with certain companies it acquired, which essentially resulted in Broadcom buying its own revenues. As a result, Broadcom's stock traded at artificially inflated levels, permitting the three individual defendants to sell $45.8 million worth of Broadcom stock. On 2/27/01, The Wall Street Journal published an article on Broadcom entitled "Warrant Deals Raise Concerns on Broadcom," in which analysts and accounting experts questioned the "legitimacy" of the transactions and termed the agreements "troubling." In reaction, Broadcom's stock fell 16% to $53, before closing at $53.625 on 2/27/01, and fell to $49.25 on 2/28/01. Plaintiffs seek to recover damages on behalf of all purchasers of Broadcom common stock during the Class Period (the "Class"). Contact: Law Offices Of Charles J. Piven, P.A., Baltimore Charles J. Piven, 410/332-0030 pivenlaw@erols.com BROADCOM CORP: Schiffrin & Barroway Files Securities Suit in CA --------------------------------------------------------------- The law firm of Schiffrin & Barroway give notices that a class action lawsuit was filed in the United States District Court for the Central District of California on behalf of all purchasers of the common stock of Broadcom Corp. (Nasdaq: BRCM) from October 18, 2000 through February 26, 2001, inclusive (the "Class Period"). The complaint charges Broadcom Corp. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants made positive but false statements about Broadcom's results and business, while concealing material adverse information about agreements with certain companies it acquired, which essentially resulted in Broadcom buying its own revenues. As a result, Broadcom's stock traded at artificially inflated levels, permitting the three individual defendants to sell $45.8 million worth of their Broadcom stock. Furthermore, on February 27, 2001, the Wall Street Journal published an article on Broadcom entitled "Warrant Deals Raise Concerns on Broadcom," in which analysts and accounting experts questioned the "legitimacy" of the Company's transactions and termed the agreements "troubling." Broadcom's stock immediately dropped, falling 16% to $53, before closing at $53.625 on February 27, 2001. Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, who has significant experience and expertise prosecuting class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, please visit www.sbclasslaw.com. Contact: Marc A. Topaz, Esq. or Robert B. Weiser, Esq., both of Schiffrin & Barroway, LLP, 888-299-7706, 610-667-7706 or info@sbclasslaw.com CITIGROUP: FTC Takes Lender to Court for Abusive Practices ---------------------------------------------------------- A consumer lending company acquired last year by financial giant Citigroup Inc. (C.N) was charged with systematic and widespread abusive loan practices in a suit filed on Tuesday by the U.S. Federal Trade Commission, according to Reuters news. The FTC alleges that Associates First Capital Corp. used deceptive marketing practices to induce consumers to refinance existing debts into home loans with high interest rates, costs and fees, the report says. The FTC is seeking redress for all customers who were harmed as a result of the alleged practices, reports Reuters. The lawsuit alleges the actions violated the Federal Trade Commission Act, the Truth in Lending Act, Fair Credit Reporting Act, and the Equal Credit Opportunity Act. The suit filed in federal court in Atlanta, also names Citigroup Inc. and CitiFinancial Credit Co. as successors to Associates, one of the nation's largest lenders in the ``subprime'' market for higher-rate loans to high-risk borrowers. In response, Citigroup said it had tried to address the FTC's concerns and the suit was ``counterproductive'' to a shared objective of making attractive loan products available to all borrowers. Citigroup said in a statement that it had already put in place a program to address the practices of Associates and had contacted almost 500,000 customers to date. The FTC said Associates customers were falsely told that the debt consolidation loans would lower their monthly payments and save them money. The FTC did not estimate the number of borrowers affected or the amount of money involved. Consumer Group Criticism Citigroup's purchase of Dallas-based Associates, the former consumer finance arm of Ford Motor Co. (F.N), has continued to draw criticism from community and consumer groups who say the reforms at the lending arm have been inadequate. ``The FTC case backs up what we've been saying, that Associates has been ripping off homeowners across the country,'' said Maude Hurd, president of the Association of Community Organizations for Reform Now (ACORN). The FTC alleged Associates targeted people who had to borrow money to meet ``emergency needs'' and misrepresented the loan terms. In fact, the FTC said, First Capital charged customers high interest and inflated the cost of the loans by packing them with optional fees. The FTC further alleges that Associated First Capital then used ``unfair tactics'' to collect payments from debtors. The company trained its employees to tell consumers that the loans would contain no out-of-pocket fees and ``no upfront out-of-pocket costs, the FTC said. In fact, the FTC said, First Capital charged customers high interest and inflated the cost of the loans by packing them with optional fees. The lawsuit mirrors complaints against the company by consumer groups since the Citigroup acquisition closed in December. A group of activists set up an Internet site at http://www.tellcitibank.orgto gather complaints about the company. Last year, Citigroup said it would take steps to improve the consumer lending practices at Associated First Capital and merged the company in with its CitiFinancial consumer lending unit. ``We are proud of the progress we have made on these initiatives, which establish us as the best-practices leader in the industry,'' Citigroup said. In 1999, Associated First Capital's consumer finance portfolio totaled $29.7 billion, and the company serviced 480,000 home equity loans, the FTC said. In 1997, the last year for which figures were available, the company also had nearly 3 million personal loans, according to the agency. (Reuters, March 7, 2001) CYBERGUARD CORP: Action Vs. KPMG Re Financial Statement ’96-98 Goes on ---------------------------------------------------------------------- On September 16, 1999, the Company filed a lawsuit against KPMG and August A. Smith, the KPMG engagement partner. The lawsuit is pending in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Case No. 00-004102-CACE-14. Update On May 1, 2000, the Company filed the First Amended Complaint, alleging that KPMG failed to properly audit the Company's financial statements and provided inaccurate advice on accounting matters for fiscal years 1996, 1997 and 1998. The action alleges professional malpractice, breach of fiduciary duty, breach of contract and breach of implied duty of good faith, and seeks damages in excess of $10 million. KPMG and Mr. Smith filed motions to dismiss, which were denied. In August 2000, KPMG and Mr. Smith filed their answers and KPMG filed counterclaims against the Company, alleging the Company's breach of contract, negligent misrepresentation and abuse of process, and seeks an unspecified amount of damages consisting of unpaid service fees and legal fees and costs. CYBERGUARD CORP: Continues to Defend Securities Suit Filed in 1998 in FL ------------------------------------------------------------------------ On August 24, 1998, the Company announced, among other things, that due to a review of its revenue recognition practices relating to distributors and resellers, it would restate prior financial results. After the August 24, 1998 announcement, twenty-five purported class action lawsuits were filed by alleged shareholders against the Company and certain former officers and directors. Pursuant to an order issued by the Court, these actions have been consolidated into one action, styled Stephen Cheney, et al. v. CyberGuard Corporation, et al., Case No. 98-6879-CIV-Gold, in the United States District Court, Southern District of Florida. On August 23, 1999, the plaintiffs filed a Consolidated and Amended Class Action Complaint. This action seeks damages purportedly on behalf of all persons who purchased or otherwise acquired the Company's common stock during various periods from November 7, 1996 through August 24, 1998. The complaint alleges, among other things, that as a result of accounting irregularities relating to the Company's revenue recognition policies, the Company's previously issued financial statements were materially false and misleading and that the defendants knowingly or recklessly published these financial statements which caused the Company's common stock prices to rise artificially. The action alleges violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and SEC Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. Subsequently, the defendants, including the Company, filed their respective motions to dismiss the amended complaint. On July 31, 2000, the Court issued a ruling denying the Company's and Robert L. Carberry's (the Company's CEO from June 1996 through August 1998) motions to dismiss. The court granted the motions to dismiss with prejudice for defendants William D. Murray (the Company's CFO from November 1997 through August 1998), Patrick O. Wheeler (the Company's CFO from April 1996 through October 1997), C. Shelton James (former Audit Committee Chairman), and KPMG Peat Marwick LLP ("KPMG"). On August 14, 2000, the plaintiffs filed a motion for reconsideration of that order. The Company filed an answer to the plaintiffs' complaint on August 24, 2000. The Company's obligation to indemnify its officers and directors under the aforementioned lawsuit is insured to the extent of the limits of the applicable insurance policies. The Company has notified its insurance carrier of the existence of the lawsuit, and the carrier has sent the Company a reservation of rights letter. The Company intends to vigorously defend this action, and believes that in the event that it is unsuccessful, insurance coverage will be available to defray a portion, or substantially all, of the expense of defending and settling the lawsuit or paying a judgment. However, the Company is unable to predict the ultimate outcome of the litigation. There can be no assurance that the Company will be successful in defending the lawsuit or if unsuccessful, insurance will be available to pay all or any portion of the expense of the lawsuit. If the Company is unsuccessful in defending the lawsuit and the insurance coverage is unavailable or insufficient, the resolution of the lawsuit could have an effect on the Company's consolidated financial position, results of operations, and cash flows. CYBERGUARD CORP: SEC Investigation Commenced in 1998 Goes on ------------------------------------------------------------ In August 1998, the Securities and Exchange Commission commenced an informal inquiry into certain accounting and financial reporting practices of the Company and its officers, directors and employees. On March 25, 1999, the SEC issued a formal order of investigation (which the Company learned of on September 27, 1999) into certain accounting and financial reporting practices of the Company and its officers, directors and employees. The SEC's investigation is ongoing. DEPARTMENT 56: Lionel Z. Glancy Announces Securities Lawsuit Filed in MN ------------------------------------------------------------------------ The Law Offices of Lionel Z. Glancy commenced a Class Action lawsuit in the United States District Court for the District of Minnesota on behalf of a class consisting of all persons who purchased securities of Department 56 Inc. (NYSE:DFS) between February 24, 1999, and April 26, 2000, inclusive (the "Class Period"). The Complaint charges Department 56 and its chief executive officer with violations of federal securities laws. Specifically, plaintiff claims that defendants immediately became aware that a new enterprisewide computer system was a complete failure, resulting in massive problems with every aspect of the Company's business, including order taking, order processing, shipping and billing. Defendants, however, concealed the full extent of the widespread pervasive failure of the system until accounts receivable spiraled out of control and the Company was forced to take significant accounting charges and place a "high level" of orders on hold to correct the situation. Contact: The Law Offices of Lionel Z. Glancy, Los Angeles 310/201-9150 or 888/773-9224 Lionel Z. Glancy/Michael Goldberg info@glancylaw.com FAX.COM INC: Judge Rules Fd Law Can Be Used In State Ct In Junk Fax Case ------------------------------------------------------------------------ Companies that flood fax machines with unwanted advertisements can be sued in Pennsylvania courts under a federal law, an Allegheny County judge has ruled. Judge R. Stanton Wettick Jr. said his ruling appears to be the first in Pennsylvania allowing the federal statute prohibiting unsolicited faxes to be used in the state's courts. His ruling came after fax.com Inc. claimed a lawsuit against it should be dismissed because Pennsylvania has no state law barring unsolicited faxed advertisements. Mark Aronson, a retired consumer advocate in the Pittsburgh suburb of Churchill Borough, sued the Costa Mesa, Calif.-based company for $2,500 - $500 for each unwanted fax he said he received from the company last year. Aronson's suit against fax.com includes the five faxes which range from offers of luncheon specials to cruises in the Bahamas. "I thought it was wrong that they send me these things. My fax machine is in my bedroom and they would come in at night," said Aronson, 59. "This is not a business. This is in my residence. ... It got to be silly." Fax.com challenged Aronson's case claiming that Pennsylvania did not have a law that allowed state courts to hear cases based on the federal law. But Wettick ruled Pennsylvania doesn't need such a law because The Telephone Consumer Protection Act of 1991, a federal law that prohibits such faxes, applies to the state. Wettick also cited court cases in three states - Georgia, New Jersey and New York - that allowed the federal law to be used in state courts. The law prohibits people from sending fax advertisements to others except in specific instances and allows people who get the unwanted faxes to sue the advertisers or the fax companies they use for as much as $1,500 per fax if a court rules the sender flouted the law. Unsolicited faxes are allowed if recipient has permitted it, is in business with the sender or the sender is a nonprofit organization. James Schadel, who is listed as an attorney for fax.com in court documents, referred calls to Philadelphia lawyer Michael Broadhurst. Lawsuits for unsolicited faxes are not uncommon. Attorneys general in Arkansas, Illinois, Michigan, New Jersey and Texas have filed cases against companies in the past two years. The Pennsylvania attorney general's office has also filed lawsuits against companies who send unwanted faxes, said Barbara Petito, a spokeswoman for the office's consumer protection division. The handful of lawsuits were all settled, she said. Aronson is also the lead plaintiff in a class-action lawsuit, also filed in Allegheny County, against West Roxbury, Mass.-based Uno Restaurant Corp. for advertisements he claims were faxed to people statewide. That case is under review by Allegheny County Judge Robert Horgos, who had been waiting for Wettick's ruling. When Horgos will rule on the class-action suit is unclear. (The Associated Press State & Local Wire, March 7, 2001) FIRSTPLUS FINANCIAL: Ends Negotiations to Acquire Nineteenth Investment ----------------------------------------------------------------------- FIRSTPLUS Financial Group, Inc. (Pink Sheets: FPFX) announced on March 5 that it has ended its negotiations to acquire Nineteenth Investment Corporation. Under the previously announced proposal, FIRSTPLUS would have acquired Nineteenth in a tax free stock-for- stock transaction. The proposed transaction was subject to the resolution of several issues, which included liquidity issues, the pending shareholder class action and other litigation, audit and Securities and Exchange Commission regulatory compliance issues and the negotiation of liabilities and encumbrances, including the defaulted obligations to FIRSTPLUS' convertible bondholders. Due to the timing difficulties in resolving these issues and considering the organized opposition of several FIRSTPLUS shareholder groups to the proposed transaction, both companies have mutually agreed to end negotiations for the acquisition of Nineteenth and to pursue other opportunities. Dan Phillips, Chairman and CEO of FIRSTPLUS, noted that "We've expended a great deal of effort in trying to resolve these issues, but certain factions do not recognize the negative impact that their demands are having on other shareholders and the company as a whole." FIRSTPLUS has no operating business and it is unlikely that FIRSTPLUS will reconstitute any of its previous business plans, such as originating mortgage loans, servicing mortgage loan portfolios, or investing in mortgage loan portfolios and Interest Only Strips. Dan Phillips also stated that "The company will continue to monitor and manage its shareholders' residual interests in the company's interest only strips and continue to move forward with its accounting and SEC compliance initiatives." The above statements contained in this press release that are not historical facts, including, but not limited to, statements that can be identified by the use of forward-looking terminology such as "may," "will," "expect," anticipate," "estimate," or "continue" or the negative thereof or other variations thereon or comparable terminology, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties. The actual results of the future events described in such forward-looking statements in this press release could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: short term interest rate fluctuations, level of defaults and prepayments, general economic conditions, competition, government regulation and possible litigation, as well as the risks and uncertainties set forth from time to time in the Company's public reports and filings and public statements. HIP IMPLANTS: Charfoos & Christensen Files Suit against Sulzer Medica --------------------------------------------------------------------- A national class-action lawsuit was filed Tuesday, March 6, 2001 in federal court against Sulzer Medica USA, Inc. and Sulzer Orthopedics, Inc., claiming money damages as a result of the defendants' defective hip implant that was recalled on December 5, 2000. Detroit law firm Charfoos & Christensen filed this first of its kind suit in Michigan in Federal Court on behalf of Susan Jarrell of Sparta, Michigan, and the class of people who also received these defective implants. Ms. Jarrell underwent hip replacement surgery in June, 2000. Sulzer's Inter-Op acetabular shell was used. An estimated 17,500 persons received the defective implant, Sulzer's Inter-Op acetabular shell, almost 90% of whom reside in the United States. The shells were primarily sold after October, 1999, and a small number of lots were sold after July, 1997. Ms. Jarrell has filed claims for strict liability for a defective product, breach of warranty, negligence and strict liability for failure to warn. The complaint also seeks medical monitoring for the class. Commenting on the lawsuit, J. Douglas Peters, Charfoos & Christensen, P.C. shareholder, said, "If Sulzer had been receiving reports of problems since October, 1999, we wonder why doctors and the public were not informed until December, 2000. Many patients could have been spared needless pain and suffering and would not be facing the prospect of a second surgery to replace the defective prosthesis." The class action complaint alleges that a lubricant used in the manufacturing process of the Inter-Op shells was inadequately removed from the shell surface during the cleaning process. The lubricant residue prevents the implant from properly bonding with the bone, causing the shells to loosen. It can cause inflammation and pain and prevent the patient's bones from fusing normally with the hip implant. Plaintiff also alleges that Sulzer failed to issue any warning of the defect to her, physicians or the general public. Since October, 1999, Sulzer received 61 reports of loosening of the shells. The company said that small amounts of mineral-oil based lubricants in the machines used in the manufacturing process may remain on the implant surface after the cleaning process. In January a company press release announced new multi-stepped procedures to address the problem. Contact: Attorney J. Douglas Peters of Charfoos & Christensen, P.C., 313-875-8080, or Fax: 313-875-8522 HOLOCAUST VICTIMS: Judge Refuses to Dismiss Lawsuit Vs. German Banks -------------------------------------------------------------------- A judge presiding over Holocaust litigation against German banks on Wednesday refused to dismiss a class-action lawsuit, saying to do so would endanger the claims of people who have waited decades to be compensated. U.S. District Judge Shirley Wohl Kram concluded in a written decision that it would be unjust to dismiss the lawsuit even though some lawyers have said a dismissal would allow more than one million former slave laborers to be paid from a compensation fund approved by the banks. Kram noted that the compensation fund would be distributed by a yet-to-be-funded German foundation set up as the exclusive forum for the resolution of all labor and property claims against German entities. The judge said she could not dismiss the lawsuit without assurance that the foundation had already been funded and that the claims of people who could not yet appear before the court would be handled fairly. ''Many of the absent plaintiffs in this case have waited decades to receive compensation for their property claims, and it would be unjust to divert their claims to a forum whose funding remains in question,'' Kram said. ''Granting the instant motion would effectively block absent class members from pursuing any remedy other than the foundation, which is not yet fully funded,'' she said. The German government declined to comment immediately on the judge's decision. A spokeswoman said they must first examine the judge's reasons. The plaintiffs had asked that their lawsuit be dismissed because of an out-of-court settlement setting up the dlrs 4.6 billion fund to compensate people enslaved by the Nazis during World War II. The money is to be funded in equal parts by German industry and the German government. ''I don't have any comment at this time. I have to absorb it,'' said Burt Neuborne, a lawyer for the plaintiffs. Volker Beck, one of the German fund's trustees and a member of the junior partner in the governing coalition, the Greens, said the decision ''costs time that we don't have.'' He said he was ''bitter'' at Kram's ruling. ''The American government must act now,'' Beck said in a statement. ''It promised comprehensive legal peace for German companies in the United States ... now it must keep its word.'' A spokesman for the U.S. Department of Justice, which had urged Kram to dismiss the lawsuit, did not immediately return a telephone message for comment. The dismissal of the lawsuit had also been recommended by Charles Stillman, a neutral party charged with making recommendations to the judge on the case. The judge quoted Stillman in a footnote in her 26-page ruling as concluding that dismissal of the lawsuit might ''create a substantial impediment, and a level of prejudice to a now-absent class member, if that person decides to bring a case in the future.'' Kram earlier had conducted a hearing to determine whether to dismiss the lawsuit. Kram said then that she wanted to be sure there was a mechanism to ensure that the funds would be distributed fairly, and that any victims who were not part of the current lawsuit would still be able to seek legal justice. She also said she wanted to be sure money would not be wrongly diminished by high lawyer fees or by the addition of cases involving Austrian banks with branches in Germany during the war. More than one million former laborers worldwide, most of them central and eastern Europeans, are expected to be eligible for payments. The fund also will compensate people subjected to Nazi medical experiments and some with other Holocaust-related claims. (AP Worldstream, March 7, 2001) HOLOCAUST VICTIMS: Poland OKs Limited Payments for Seized Property ------------------------------------------------------------------ Poland's parliament gave final approval Wednesday to a bill compensating people for property seized by the old communist regime, but narrowed it to exclude most emigres, including Jews. The measure now goes to President Aleksander Kwasniewski, who has indicated he will veto it if he believes it is unfair or too costly. The final version limits eligibility to victims who were Polish citizens as of Dec. 31, 1999. The provision has drawn sharp criticism from Polish emigre groups, especially Jews who fled communist persecution. The plan allows compensation equivalent to 50 percent of the value of property seized from 1944 to 1962, either in kind or in the form of bonds. The head of a Polish group pursuing property compensation, Miroslaw Szypowski, estimated that the citizenship requirement would block claims from 40,000 people, many of them now living in the United States and Israel. Poland's Solidarity-led government had hoped the bill would head off class action lawsuits in the United States. The current version is unlikely to satisfy anyone, however, and there is wide speculation that Kwasniewski will veto it. He has 21 days to decide. Attorney Mel Urbach, who represents Jewish claimants in a lawsuit filed in U.S. District Court in Brooklyn, New York, said by telephone he would need time to study the bill before commenting. But he has in the past sharply criticized efforts to impose a citizenship restriction. Urbach said he expects a decision ''any day'' on whether the court will agree to proceed with the lawsuit. The Solidarity-led government's original draft was opposed by the ex-communist opposition and some maverick Solidarity legislators who said it would be too expensive. The Senate stripped the citizenship requirement from the original bill approved by the Sejm, parliament's lower house. But on Wednesday the Sejm voted 311-101, with eight abstentions, to restore it. Foreign Minister Wladyslaw Bartoszewski sharply criticized the move, saying it could lead to costly legal battles. ''Those who will feel harmed will probably make their claims against the Polish state,'' the Polish news agency Pap quoted him as saying. The bill does not specifically address restitution for World War II Holocaust victims or their heirs. But it would provide a way for them to seek compensation because most property they lost during the Nazi occupation was later seized by the communist regime. Poland is the only ex-communist state of Eastern Europe that still lacks such legislation. Poland also has been under pressure from the European Union, which it hopes to join in the next few years, to settle the issue. If it is vetoed by Kwasniewski, an ex-communist, the Sejm is considered unlikely to muster the necessary two-thirds majority to override him. That probably would delay further consideration of the compensation issue until after parliamentary elections due this fall. (AP Worldstream, March 7, 2001) HOLOCAUST VICTIMS: Schroeder to Meet with German Industry on Payments --------------------------------------------------------------------- Chancellor Gerhard Schroeder is to meet with German industry representatives soon to attempt to resolve open questions delaying compensation for former slave laborers under the Nazis, a government spokesman said Wednesday. German firms and the German state have each undertaken to provide five billion marks (2.5 billion euros, 2.3 billion dollars) for the compensation. But while the state has come up with its share, the firms are still some 1.4 billion marks short. The spokesman said Schroeder would wait until a US judge ruled on a class action suit on behalf of former slave laborers against German banks, at which time he would discuss the implications of her decision with companies for the beginning of payments for the aging claimants. German industry and the government in Berlin agreed last July to offer compensation to former slave laborers pending a guarantee by US courts that German companies would face no further lawsuits on the matter. German companies are anxiously awaiting the ruling in the case against the German banks, which is expected soon, to determine whether that legal security has been provided. (Agence France Presse, March 7, 2001) KCP&L: Fd Judge Says Claims Too Broad for Race Bias Class V. Kansas City ------------------------------------------------------------------------ A federal judge has refused to let a race discrimination lawsuit against Kansas City Power & Light Co. go forward as a class action. U.S. District Judge Ortrie Smith ruled that the plaintiffs had failed to meet the requirements of a class action, which allows representative members of a large group to sue on behalf of all members of the group. In a 35-page ruling Thursday, Smith ruled that the class definition was too broad and that most of the 10 named plaintiffs "do not present all of the claims that the class intends to pursue." Lawyers for the plaintiffs said they would proceed, if necessary, to sue KCP&L one plaintiff at a time. "We have 40 African-Americans and 14 Hispanics under contract with great cases. What (this ruling) does for KCP&L is guarantee them three years of ongoing litigation," said Michael Fletcher, one of the attorneys for the plaintiffs. Dennis Egan, another lawyer for the plaintiffs, said he was prepared to go forward, "whether it's 10 or 11 people together or 40 people separately." "We thought a class action would be a more efficient mechanism, so we'll probably go ahead and appeal (Smith's ruling)," he said. "But as far as I'm concerned, it's six of one, a half-dozen of the other." Both Fletcher and Egan represented a KCP&L meter reader who was awarded more than $1.5 million last year after a federal jury found that he had been denied promotions by the utility because of his race. Smith, who also presided over that case, later reduced the award to $320,000, ruling that the ratio of punitive to actual damages was too high. KCP&L has said it will appeal the judgment. The lawsuit in which Smith ruled originally was filed in May 1999 by Patricia Lang, who later amended it to assert claims "on behalf of all African-American persons employed by KCP&L at any time from May 11, 1994, to the present adversely affected by KCP&L's racially discriminatory policies and practices." Lang and the other named plaintiffs alleged discrimination in pay, promotion, discipline and job requirements, and said KCP&L's policies and procedures constituted a racially hostile working environment. In 1999, when Lang sued, KCP&L had 2,198 employees, 207 of whom were black. In his decision, Smith said Lang and her fellow plaintiffs failed to meet the requisites of a class action, including commonality of claims. Addressing the category of plaintiffs alleging a hostile work environment at KCP&L, Smith called them "essentially a group of differently situated individuals, each claiming to have been wronged, and each asserting - without support or explanation - that some policy has caused that wrong." Brenda Nolte, a spokeswoman for KCP&L, said the utility's priority is diversity, "and it is confirmation for Kansas City Power & Light that a federal court found no basis for a class action." In another blow to the plaintiffs, Smith refused to consider an expert report they submitted, saying it would not aid their cause. Smith said the expert had failed to account for nondiscriminatory reasons for differences in employee pay, including different job responsibilities and the fact that nearly two-thirds of KCP&L's work force is unionized and compensated under the terms of collective bargaining agreements. (The Kansas City Star, March 7, 2001) KIA MOTORS: PA and NJ Suits Allege Brake Defects in 1998, 1999, 2000 -------------------------------------------------------------------- The consumer law firms of Kimmel & Silverman, P.C.; Francis & Mailman, P.C.; and Donovan Miller, LLC have filed class action suits in Pennsylvania and New Jersey against Kia Motors America, Inc., of Irvine, California, alleging brake defects in the company's 1998, 1999 and 2000 Sephia models. The lead plaintiffs in these cases are Philadelphia, PA resident Shamell Samuel-Bassett and Plainfield, NJ resident Regina Little. According to Kia press releases, more than 166,000 Sephia automobiles have been sold in the United States between 1997 and 2000. According to documents filed in the Court of Common Pleas of Philadelphia County and in the Superior Court of New Jersey, Union County, Kia Motors has known for several years that the brake system in the Sephia model is defective. In the past three years, more than 300 complaints have been filed with the National Highway Transportation Safety Administration (NHTSA) for this defect. This problem, which results in premature wear of the front brake rotors, causes the brakes to grind and the vehicle to vibrate, and requires continuous replacement of the brake pads and rotors. In 1996 and 1997, Kia issued Technical Service Bulletins (TSB's) pertaining to this problem in subsequent Sephia models. Since purchasing her 2000 Sephia model in October 1999, Pennsylvania lead plaintiff Shamell Samuel-Bassett has taken her car to Kia authorized dealers on five separate occasions, complaining of vehicle vibration, excessive grinding and increased stopping distance. As a result of her complaints, the vehicle's rotors and pads were repaired four times, all within the vehicle's first 17,000 miles. On average, replacement of brake rotors occurs at approximately 50,000 miles if parts are not defective. Despite constant repairs, Ms. Samuel-Bassett continues to experience brake problems. She was recently involved in an automobile accident, hitting a vehicle after the brakes failed to properly stop the car. "I should feel confident in my car, but I don't," says Ms. Samuel-Bassett. " My eight-year old son is always talking about the constant noise and vibrations when I hit the brakes. It's especially frustrating that Kia knows they have a problem and they are doing nothing to fix it." New Jersey lead plaintiff Regina Little purchased her 1999 Kia Sephia in March, 1999. Ms. Little has also repeatedly returned her car to authorized Kia dealerships, complaining of the same brake concerns: an inability to stop the vehicle, continuous vibrations and rotor defects. Despite Ms. Little's numerous complaints, and the dealers' replacement of brake and rotors, the problem still exists. Court papers indicate that employees from three separate authorized Kia dealerships informed Ms. Little that Kia Motors America is well aware of the problem, but will not correct it. "I am very fearful for my safety," says Ms. Little. "Every three months, my brakes start to grind. When that happens, I have to push the brakes hard to get the car to stop. I don't have the money to keep repairing the problem. I am hoping that this class action suit will force Kia to admit to the general public that this problem does exist." According to co-counsel Craig Thor Kimmel of Kimmel and Silverman, P.C., "This problem puts the safety of Kia drivers and passengers, as well as all of us who share the road with Sephia drivers, at substantial risk. You have a car that is inexpensive to purchase and a manufacturer that claims in advertising to have the best warranty in the business. It is no wonder people are buying the car. However, with the brake defect so widespread and Kia's refusal to fix the problem, we believe that consumers are not getting what they are paying for with the Kia Sephia." "Consumers have been complaining of this problem for the last five years," said co-counsel James A. Francis of the firm of Francis and Mailman. "The frequent replacements go well beyond the normal wear and tear of the braking system. Normally, drivers rely on the predictability of brakes for their safety. This is not the case with Sephia drivers." Owners and lessees of 1998, 1999, and 2000 Kia Sephia models who would like more information on this class action can log onto www.lemonlaw.com, contact Craig Thor Kimmel at 1-800-Lemon-Law (800-536-6652) or via e-mail at Kia@lemonlaw.com. Contact: Michael Sacks of Kimmel and Silverman, 856-216-0655, or sackspr@aol.com NAPSTER: Indicates Readiness to Comply with Injunction, Seeks Settlement ------------------------------------------------------------------------ Napster, the wildly-popular song-swap software, said on Tuesday it would comply with U.S. District Court Judge Marilyn Hall Patel's injunction, ordering it to remove songs from its directory three days after it is notified by their copyright owners. "Napster will follow the District Court's order. Even before the court entered the order, we began making efforts to comply with what we believed to be the dictates of the Ninth Circuit's ruling," said Hank Barry, chief executive officer of Redwood City, Calif-based Napster. Barry said Napster would continue to press its case in court and seek a mediated resolution as it works to implement the order. Napster will continue to seek a settlement with the record companies and to prepare its new membership-based service. In his statement, Barry said the Ninth Circuit and District Court rejected the recording industry's argument that Napster was inherently illegal and that the order called for both the recording industry and Napster to share the burden of complying. The world's biggest record labels -- including Vivendi Universal's Universal Music, Sony Music Warner Music, EMI Group Plc and Bertelsmann AG's BMG first sued Napster in December 1999, claiming it was a haven for copyright piracy that would cost them billions of dollars in lost music sales. The labels are required to provide lists of the material they want removed. "As we receive notice from copyright holders as required by the Court, we will take every step within the limits of our system to exclude their copyrighted material from being shared," he said. (Reuters, March 7, 2001) NATIONAL GUARD: Lawsuit Seeks Tens of Millions for Sexual Harrassment --------------------------------------------------------------------- Only months out of prison after doing time for perjury, the former chief of staff of the Illinois Army National Guard has been accused of rape and sexual harassment in a civil lawsuit brought by eight women who worked with him at the Guard's Camp Lincoln facility here. The class-action lawsuit, filed in U.S. District Court in Springfield last month, also alleges other top officials at the camp allowed an atmosphere to exist that resulted in requests for sexual favors and sexual innuendo that the women found intimidating, abusive, hostile and offensive. They are seeking tens of millions of dollars in damages from the guard officials and the state and federal governments. The case followed the guilty plea of Col. James Burgess, 54, former chief of staff and once the third-highest ranking officer on the Army side of the Guard. In December 1999, Burgess, of Springfield, admitted to federal perjury charges arising from a criminal case laced with allegations of adultery and sexual harassment. In a court hearing leading up to the guilty plea, a prosecutor said that at least a dozen women had told the government that Burgess either had sex with them, tried to, or solicited them. At the time, Assistant U.S. Atty. Patrick Chesley accused Burgess of engaging in "non-consensual" sex with women. Burgess was sentenced to 20 months in prison, but released around the end of last year, officials said. The new civil case accuses Burgess of participating in sexual assaults against three of the women who brought the suit. It also alleges that for years he had subjected all of the plaintiffs to sexual harassment and some of them to sexual advances and threats. The suit accuses Burgess and other male Guard commanders, some unnamed, of harassment. The women charge that their jobs, pay raises and other terms and benefits of employment were conditioned upon their acquiescence to embarrassing and humiliating sexual behavior. They also allege the conduct over the years "was and continues to be unwelcome, severe and so pervasive that such is an anathema to all social and employment mores." For example, one of the plaintiffs alleges "the harassment was in the form of rape, non-consensual intercourse, unwelcome sexual advances and touching, sexual innuendoes, harassing telephone calls and dirty jokes." Among those specifically charged in the suit with harassment and retaliation is former Assistant Adjutant Gen. Paul Gebhardt. Former Adjutant Gen. Richard Austin and current Adjutant Gen. David Harris, a former state representative, also are accused in the suit of knowing about the behavior but failing to "exercise reasonable care to prevent and promptly correct the sexually harassing behavior." Austin declined to comment on the allegations. Burgess and Gebhardt could not be reached. A statement released by the Illinois Department of Military Affairs, the agency headed by Harris, said the allegations in the suit are being reviewed. "Since this matter is currently pending in U.S. District Court, it would be inappropriate for this agency to comment on the substance of the allegations contained in this complaint at this time," the statement said. In the suit, the women allege that they were unable to reasonably avail themselves of internal complaint systems. The plaintiffs who brought the case are Bobbie Bartley, Beth Graves, Amanda High, Audrey Maher, Lesa McManigell, Nancy Mills, Nikole Ozier-Cain and Sherry Rader. (Chicago Tribune, March 7, 2001) ONTARIO REALTY: Lawsuit Targets Toxic Mouldy Newmarket Courthouse ----------------------------------------------------------------- Occupants exposed York Region and the Ontario Realty Corp. knew the Newmarket courthouse contained toxic mould but failed to protect the occupants, a $50 million class action lawsuit alleges. The suit was filed March 6 on behalf of Special Constable Paul Dumoulin, a court officer, and "all persons who, during the period 1979 to the present, were exposed to toxic moulds, harmful gases and substances while on the premises of the courthouse." The lawsuit, which must be approved as a class action by the court, could include people who are not full-time employees and had no choice but to be in the courthouse, such as prisoners, jurors, witnesses and officers. The plaintiffs are seeking $15 million for general damages, such as pain, suffering and loss of enjoyment of life, and $35 million for aggravated damages for alleged "high-handed, outrageous and reckless" conduct. Former attorney-general Jim Flaherty closed the Newmarket courthouse last June 30. Cases were transferred to other courthouses or processed in trailers in the parking lot. A 12-page statement of claim says exposure to toxic mould can cause health consequences. "To the knowledge of the defendants . . . numerous persons working in the courthouse began to suffer an unusual number of health complaints, including headaches, nausea, fatigue, dizziness, migraines, asthma, irritability, cancer and respiratory diseases," the claim says. The statement of claim alleges that, when he was working at the courthouse between 1997 and 1999, Dumoulin was exposed to at least 17 toxic moulds and at least two harmful gases. In an interview, Dumoulin, 54, said although his doctor proclaimed him in good health before he started working at the courthouse on Oct. 27. 1997, he began experiencing fatigue and flu-like symptoms within months. A CAT scan several months later produced results that "terribly worried" his doctor. Dumoulin's lawyers said a laboratory in California has confirmed his blood, and that of an unspecified number of other court employees, has been infected by toxic mould. The statement of claim contains unproven allegations that have not yet been tested in court. The defendants may file statements of defence within 20 days from the time the court papers have been served on them. Other defendants named include Ellis Don Corp., the construction company that built the courthouse, Cole Sherman and Associates Ltd., mechanical engineers involved in the construction, Boigon Petroff Shepherd Architects Inc., successors of the architects who designed the courthouse, and ProFac Facility Management Services Inc., the company responsible for maintaining the courthouse. (The Toronto Star, March 7, 2001) ROCK HILL: Investors Sue SC Bank Alleging Fraudulent Investment Program ----------------------------------------------------------------------- Investors are suing a South Carolina community bank for more than $10 million, claiming it helped promote a fraudulent investment program. Steve McKelvy, an attorney for Rock Hill Bank and Trust Co., denied it had done anything wrong. "All the bank did was hold the funds in a trust account." Court documents say the program promised returns of at least 15% a month during its 10-month term. Anything more was to go to humanitarian projects in Venezuela and other developing countries. The investors claim that Rock Hill and one of its loan officers conspired with Donald M. Hughes, a construction-firm owner who introduced them to the "no-risk" deal, to steal their $9.5 million investment. Mr. Hughes' company was to have undertaken the humanitarian projects. The loan officer, Robert M. Yoffie, never disclosed that he was also a director of Mr. Hughes' company, the investors claim. Mr. Yoffie quit the bank shortly before the Feb. 16 filing of the suit in U.S. District Court in Rock Hill. Samuel R. Anthony of Miami, the lead plaintiff in the suit, and his partners claim Mr. Yoffie and Rock Hill transferred their money out of the bank without authorization, did not produce promised returns, and would not return their $9.5 million investment. They are seeking that sum plus the lost profit from the investment and unspecified punitive damages. Mr. McKelvy, who is with the Nelson, Mullens, Riley & Scarsborough law firm in Columbia, S.C., said the dispute is "between and among people unconnected to the bank." Mr. Yoffie, he said, "never touched the account on his own," but merely "directed the account as he was told" by Douglas J. Smith, who ran the investment program out of the Bahamas and had limited power of attorney. Mr. Smith, who ran the program through WCH Executive Holdings, claimed the extraordinary return would be achieved by day trading in the European bond market, the suit says. He and Mr. Yoffie called it a "no-risk investment," the suit says. In January of last year the group deposited $9.5 million in a trust account at Rock Hill. The suit says the investors signed two agreements: one granting the limited power of attorney to Mr. Smith; the other with the bank and Mr. Yoffie, requiring that "at all times, account assets will be maintained at Rock Hill Bank and Trust." After eight months produced little or no return on their investment, the group said, they wrote to WCH Holdings demanding their money back. Mr. Smith told the group that he had transferred the funds to a Deutsche Bank branch in Milan, Italy, but promised to refund it, the suit says. When he did not, court papers state, the group went to the bank, whose president told them that Rock Hill would try to refund the $9.5 million they had invested. Mr. McKelvy said he had no knowledge of anyone at the bank promising repayment and was "not aware of the bank owing funds to anyone." Rock Hill has asked the Federal Bureau of Investigation and the Federal Deposit Insurance Corp. to investigate the allegations, he said. (The American Banker, March 7, 2001) SCIENTIFIC LEARNING: Notifies of Voluntary Dismissal of Securities Suit ----------------------------------------------------------------------- As previously reported in the CAR, the company announced that it would seek early dismissal of the securities fraud suit Stitt v. Scientific Learning Corporation, et al., Civ. No. 00-3014-SC pending in the United States District Court for the Northern District of California. On November 30, 2000, the Lead Plaintiffs appointed by the Court to represent all persons who purchased Scientific Learning Corporation's (Nasdaq: SCIL) common stock during the period between May 1, 2000 and July 11, 2000 (the "Class Period"), filed a Stipulation and [P]roposed Order of Voluntary Dismissal ("[Proposed] Order"), agreed to by defendants, in Stitt v. Scientific Learning Corporation, et al., Civ. No. 00-3014-SC. On February 8, 2001, the United States District Court Judge entered the [Proposed] Order voluntarily dismissing the Complaint for Violation of the Federal Securities Laws and lawsuit without prejudice. The Complaint charges Scientific and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Complaint alleges that defendants' false and misleading statements concerning the revenue derived from Scientific's sales of its software artificially inflated the price of the stock to a Class Period high of $23-1/4. After further investigating this matter, Lead Plaintiffs and their counsel concluded that the Complaint should be voluntarily dismissed without prejudice. Accordingly, pursuant to Federal Rule of Civil Procedure 41(a)(1), Lead Plaintiffs notified defendants of their intent, and defendants agreed to the dismissal, with each side bearing its own costs. No consideration has been exchanged, and neither Lead Plaintiffs nor their counsel will receive any compensation or reimbursement of expenses. Moreover, Lead Plaintiffs believe that the Class will not be prejudiced, as the statute of limitations has not run, and no members of the Class are barred from pursuing their own individual claims against defendants or renewing the class action if they so choose. If you wish to discuss this action or have any questions concerning this notice or your rights or interest, please contact plaintiffs' counsel. Contact: Reed Kathrein of Milberg Weiss Bershad Hynes & Lerach LLP, 800-449-4900, wsl@mwbhl.com TOBACCO LITIGATION: Panel Awards ANTI-TOBACCO LAWYERS $637.5 Mil ---------------------------------------------------------------- Lawyers who represented California cities and counties that shared part of a massive national tobacco settlement were awarded $ 637.5 million in fees Tuesday by the National Tobacco Fee Arbitration Panel. The fees, which amount to about 5% of the cities' and counties' $ 12.7-billion share of the settlement, will be divided among seven California law firms and two from out of state. Like the settlements themselves, the legal fees will be distributed over a 25-year period. With Tuesday's decision, anti-tobacco attorneys around the country now have been awarded $ 11.3 billion in fees. The tobacco industry has to pay that in addition to $ 246 billion in settlements to the states. California's share of the national settlement was $ 25.4 billion, and cities and counties around the state get half. Cities and counties representing about 85% of the state's population sued the industry before the state filed its case in 1997. California was the 37th state to sue the tobacco industry. Unlike most of his counterparts throughout the nation, Dan Lungren, then the state's Republican attorney general, declined to hire private attorneys to represent California. Several of the law firms that represented the cities and counties are led by Democrats and had made significant contributions to Democratic candidates. Protracted negotiations were held between those attorneys and Lungren's assistants before an agreement was reached that the city and county cases--as well as one major private case, Cordova vs. Liggett Group Inc.--would be settled en masse in December 1998, a month after the national settlement. (The tobacco companies separately agreed to pay the California attorney general's office $ 25 million for attorney time and costs, a spokesman for the office said Tuesday.) The 5% fee for the lawyers in the California case is considerably lower than the percentages collected by attorneys for the first few states that sued the industry: Mississippi, Florida and Texas. Attorneys representing those states were awarded fees of 19% to 34%. John Calhoun Wells, a veteran labor mediator who is the arbitration panel's chairman, said the work of the private attorneys in California was of "the highest order." Charles Renfrew, a retired federal judge from San Francisco who is the tobacco companies' representative on the panel, said the award was "higher than I would have awarded had I been the sole arbitrator," but said he joined the decision "because I believe unanimity serves important and valuable purposes in these arbitrations." Attorney Harry Huge, who is the plaintiffs' lawyers' representative on the panel, said he would have awarded more. Huge emphasized the importance of the Cordova case, which was filed by San Diego attorney Patrick Coughlin of Milberg Weiss Bershad Hynes & Lerach under the state's unfair business practices statute in 1992. "It was the first private enforcement action in California that advanced some of the theories of liability that would ultimately be pressed forward in other tobacco litigation around the country," Huge wrote. The main theories centered on a massive, four-decade conspiracy by the tobacco companies to conceal the dangers of their products and the addictive nature of nicotine. Among the law firms sharing in the award are Lieff, Cabraser, Heimann & Bernstein of San Francisco, which also specializes in class-action cases on behalf of plaintiffs; and two Southern California firms specializing in complicated personal injury litigation, Greene, Broillet, Taylor, Wheeler & Panish of Santa Monica and Robinson, Calcagnie & Robinson of Newport Beach. The other California firms are Eisner & Hague, Los Angeles; McCue & McCue, San Diego; and Bushnell, Kaplan & Fielding, San Francisco. Cuneo Law Group of Washington and Ness, Motley, Loadholt Richardson & Poole of Charleston, S.C., which was a driving force in cigarette litigation and the national tobacco settlement negotiations, also are getting slices of the pie. The firms declined to say how they are apportioning the money. (Los Angeles Times, March 7, 2001) ********* 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. 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