/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010918.mbx C L A S S A C T I O N R E P O R T E R Tuesday, September 18, 2001, Vol. 3, No. 182 Headlines ACCEPTANCE INSURANCE: Nebraska Court Dismisses Securities Suit ASCENTIAL SOFTWARE: Settles Securities Suit For $26M in N.D. CA BAYER CORPORATION: OK Cholesterol Drug Suit Filed In District Court BELMONT BANCORP: Securities Suit Trial Set For November 2001 in WV BROOKTROUT INC.: Settles Securities Suit in Massachusetts Court CB RICHARD: Settles Securities Suit With Memorandum Of Agreement in DE CVS CORPORATION: Stull Stull Commences Massachusetts Securities Suit E-LOAN INC.: Cauley Geller Initiates Securities Suit in S.D. NY FORD MOTOR: Judge Orders Court Appearance After Failure To Settle Suit HAWAIIAN HOME: Supreme Court Dismisses Hawaiian Home Lands Suit HEALTHCARE RECOVERIES: Settles Suit For $3 Million In West Virginia MICROFINANCIAL INC.: Suit Dismissed, Plaintiffs File Revised Motion MICROFINANCIAL INC.: Enters Intent To Settle Consumer Suit in CA MONSANTO CORPORATION: Court Blocks Environmental Suit in Alabama MTBE LITIGATION: Judge Denies Attempts To Dismiss Contamination Case NEW ERA: Sued By Stockholders For Securities Laws Violations in CO ORTHOLOGIC CORPORATION: Court Dismisses All But Two Claims In Lawsuit PFIZER INC.: Faces Consumer Suit Due To Arthritis Drug in E.D NY PRODIGY COMMUNICATIONS: Appellate Court Affirms Dismissal of Suit PRODIGY COMMUNICATIONS: Subsidiary Faces Consumer Suit in Illinois RARE MEDIUM: Files Motions To Dismiss Securities Suits In NY and DE RMED INTERNATIONAL: Files Securities Suit Against Sloan's Supermarkets SOUTHFORK GAS: Owner Sued For Raising Gasoline Prices in Arkansas STATE FARM: Sued For Overcharging Customers With Poor Credit Ratings TALARIAN CORPORATION: Cauley Geller Files Securities Suit in S.D. NY TEXT MESSAGING: Quezon City Court Lifts TRO, Dismisses Consumer Suit ********* ACCEPTANCE INSURANCE: Nebraska Court Dismisses Securities Suit -------------------------------------------------------------- The United States District Court for the District of Nebraska absolved Acceptance Insurance Companies, Inc. of federal securities violations by dismissing the securities class action filed in December 1999. The suit was filed on behalf of all persons who purchased either Company common stock between March 10, 1998 and November 16,1999 or AICI Capital Trust Preferred Securities between the July 20,1997 public offering and November 25,1999. Plaintiffs alleged the Company knowingly understated the Company's liabilities in order to set the price of their common stock at artificially high levels and made untrue statements of material fact. In February 2000 other plaintiffs sued the Company in the same Court, alleging the Company intentionally understated liabilities in a registration statement filed in conjunction with the Company's Redeemable Preferred Securities. The Court consolidated these suits in April 2000 and the plaintiffs subsequently filed a consolidated class action complaint. In the consolidated complaint, plaintiffs alleged: (1) violation of Section 11 of the Securities Act of 1933 through misrepresentation or omission of a material fact in the registration statement for the trust preferred securities, and (2) violation of Section 10b of the Securities Exchange Act of 1934 and Rule 10b-5 of the U.S. Securities and Exchange Commission through failure to disclose material information between March 10, 1998 and November 16, 1999. The Company, three of its former officers, the Company's Directors and independent accountants and other individuals, as well as the financial underwriters for the Company's preferred securities, were defendants in the consolidated action. In March this year, the Court dismissed all claims alleging violations of Section 11 of the Securities Act, and dismissing the Company's Directors, financial underwriters, independent accountants and others as defendants in this action. The Court also ruled that certain of plaintiffs' allegations regarding the remaining defendants' alleged failure to properly report contingent losses failed to state a claim under Section 10b and Rule 10b-5. In two subsequent rulings, the Court and Magistrate Judge clarified the March 2 ruling to specify which of plaintiffs' allegations failed to state a Section 10b and Rule 10b-5 claim. The suit has been reduced to a claim that the defendants, during the period from August 14, 1997 to November 16, 1999, failed to adequately disclose information about various aspects of the Company's operations. On August 6, 2001 the Magistrate Judge granted Plaintiffs' Motion for Class Certification and scheduled a conference to address discovery, scheduling and other preliminary matters. The Company intends to vigorously contest this action and believes Plaintiffs' allegations are without merit. American Agrisurance, a subsidiary of the company, is one of the nation's top crop insurers. Products include policies against adverse weather (including a specific hail damage policy) and coverage protecting against lost revenue caused by low prices. The company markets its lines through independent agencies and buys reinsurance to protect against catastrophic losses. ASCENTIAL SOFTWARE: Settles Securities Suit For $26M in N.D. CA --------------------------------------------------------------- Ascential Software Corporation recently paid a total of $26 million to settle several class action suits filed in the United States District Court for the Northern District of California. The suits alleged various violations of federal securities laws and named as defendants the Company, certain of its present and former officers and directors and, in some cases, its former independent auditors. The complaints arose out of the restatement of the Company's financial statements that was announced in November 1997 and alleged various violations of the federal securities laws. Stockholder derivative actions, filed on behalf of the Company and naming virtually the same defendants and the Company's former independent auditors, were also filed in California State Court and Newfoundland Canada. In October and November 1999, state and federal courts granted final approval of a settlement agreed to by the Company and the other parties. In accordance with the terms of the Settlement, the Company paid approximately $3.2 million in cash during the second quarter of 1999. An additional amount of approximately $13.8 million in insurance proceeds was contributed directly by certain insurance carriers on behalf of certain of the Company's current and former officers and directors. The Company also agreed to contribute a minimum of 9.0 million shares of the Company's common stock, which will have a guaranteed value of $91.0 million for a maximum term of one year from the date of the final approval of the settlement by the courts. The first distribution of shares of the Company's common stock occurred in November and December 1999 when the Company issued approximately 2.9 million shares to the plaintiff's counsel. The stock price guarantee was satisfied with respect to the first distributions of settlement shares. In April 2001, the Company issued the remaining 6.1 million of the minimum 9.0 million shares to be issued under the Settlement. Ascential provides information asset management software for data integration and delivery, business intelligence applications, and for creating enterprise portals. BAYER CORPORATION: OK Cholesterol Drug Suit Filed In District Court ------------------------------------------------------------------- Oklahoma attorneys have filed class-action lawsuits against pharmaceutical giant Bayer Corporation last Wednesday in Pottawatomie County District Court. The suit was filed on behalf of all Oklahoma residents who have taken the drug cerivastatin, also known as Baycol or Lipobay, "all of whom have been placed at an increased risk to suffer in the future from injury to muscle tissue and kidneys." Five Oklahoma doctors are also named as defendants. The suit alleged that the plaintiffs have suffered undiagnosed injury to muscle tissue and/or kidneys or are at an increased risk to suffer such injury in the future as a result of disease processes already in motion," the suit states. The suit claims the drug was not accompanied by proper warnings regarding the symptoms, scope or severity of all possible adverse side effects The suits also assert that Bayer failed to perform adequate testing that would have shown that cerivastatin possessed serious potential side effects. The suit further alleges Bayer "disregarded historical and current medical research which disclosed the life-threatening and debilitating effects of cerivastatin." The suits were filed in Pottawatomie County because the drug was distributed to plaintiffs within the county, was sold in the county and that The Bayer Corp. "made material omissions and misrepresentations" in the county, the suit states. The suit follows the series of class action lawsuits filed against the multinational pharmaceutical company with regard to Baycol. BELMONT BANCORP: Securities Suit Trial Set For November 2001 in WV ------------------------------------------------------------------ Trial for the securities class action suit filed against Belmont Bancorp will commence on November 2001 in the Circuit Court of Ohio County, West Virginia. The parties are in the discovery phase of this case, which the Company vows to vigorously oppose. In October 1999, James John Fleagane, a shareholder of the Company, filed an action against the Company, its subsidiary Belmont National Bank and certain of their current and former officers and directors. The plaintiff alleged, among other things, that the Bank and its directors and officers negligently transacted and administered various loans with respect to Schwartz Homes, Inc. and customers of Schwartz. In the complaint, the plaintiff sought damages for the loss in value of his stock and other compensatory and punitive damages in an unspecified amount and requested class action certification for the common shareholders of the Company. The court denied the Company's motion to dismiss this case in July 2000. In August 2000, the plaintiff filed an amended complaint, to which the Company has filed answers and affirmative defenses. The Company also filed cross-claims against the Company's former accountants, S.R. Snodgrass, A.C. and a principal thereof, and against J. Vincent Ciroli, Jr., formerly the Company's President and Chief Executive Officer. In February 2000, the court granted leave to the plaintiff to file a second amended complaint. The second amended complaint eliminated the direct claims against the Company and the Bank and the request for class action certification. Accordingly, as amended, this action constitutes a derivative suit against current and former officers and directors of the Company and the Bank, which is being defended by the Company and the Bank on their behalf. BROOKTROUT INC.: Settles Securities Suit in Massachusetts Court --------------------------------------------------------------- Brooktrout, Inc. entered into a settlement agreement with plaintiffs in several class action suits filed in the United States District Court for the District of Massachusetts. Following the settlement by both parties, the court dismissed the case against the Company in April and approved the settlement on July 2001. The lawsuits were filed after subsidiary Interspeed's October 6, 2000 announcement that it would be restating its unaudited financial results for certain prior quarters of its fiscal year 2000. The complaints included allegations: (1) that the Company or certain of its officers and directors participated in and approved the issuance of the financial statements of Interspeed, (2) that defendants are "controlling persons" of Interspeed, and that the defendants made false or misleading statements regarding the Company's own consolidated financial results. The Company said in a filing with the Securities and Exchange Commission that the dismissal and settlement of these actions will not have a material adverse effect on the Company's business operations. Brooktrout, Inc. delivers communications hardware and software products that enable the development of applications ranging from Internet Protocol telephony and embedded voicemail to wireless messaging for the new global communications network. CB RICHARD: Settles Securities Suit With Memorandum Of Agreement in DE ---------------------------------------------------------------------- CB Richard Ellis Services, Inc. forged a memorandum of agreement to settle the securities class action suit filed in the Court of Chancery of the State of Delaware in and for New Castle County. The suit was consolidated from five securities suits filed by various Company's stockholders against the Company, its directors and Blum CB, the buying group which has proposed to take the Company private. These actions all alleged that the offering price for the going private transaction was unfair and inadequate. The memorandum provides, among other things: (1) that the defendants admit no liability or wrongdoing whatsoever; (2) that the members of the buying group acknowledge that the pendency and prosecution of the Delaware litigation were positive contributing factors to its decision to increase the merger consideration; (3) that the certification of a settlement class and the entry of a final judgment will grant a full release of the defendants; (4) that attorneys' fees shall be compensated in an amount not to exceed $380,000. There are numerous conditions to the settlement proposed by the memorandum including the closing of the merger between the Company and Blum CB. The merger closed on July 20, 2001 and the memorandum became final, subject to the approval of the Court. CB Richard Ellis Services is the largest commercial real estate services company in the US. CVS CORPORATION: Stull Stull Commences Massachusetts Securities Suit -------------------------------------------------------------------- Stull, Stull and Brody filed a class action lawsuit on September 14, 2001, in the United States District Court for the District of Massachusetts on behalf of purchasers of the common stock of CVS Corporation (NYSE:CVS) between February 6, 2001 and June 27, 2001, inclusive against defendants CVS and Tom Ryan. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Company allegedly issued a series of material misrepresentations to the market between February 6, 2001 and June 27, 2001, thereby artificially inflating the price of CVS securities. The complaint alleges that, CVS issued positive statements concerning its business and operations which failed to disclose that the Company was unable to successfully address the national shortage of pharmacists. This shortage was negatively impacting CVS's business and the Company's expansion plans would have to be scaled back in light of the difficulties facing the Company. When this information became publicly known on June 27, 2001, the price of CVS common stock dropped sharply, falling from $44.10 per share to $36.51 per share on extremely heavy trading volume. CVS insiders were able to dispose of their personally-held shares for gross proceeds in excess of $8 million and CVS was able to raise $300 million through the issuance of notes on highly favorable terms. For more information, contact Tzivia Brody at Stull, Stull & Brody by Phone: 1-800-337-4983 (toll-free) by E-mail: SSBNY@aol.com by Fax: 212/490-2022 or by Mail: 6 East 45th Street, New York, NY 10017. E-LOAN INC.: Cauley Geller Initiates Securities Suit in S.D. NY --------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP commenced a class action suit in the United States District Court for the Southern District of New York on behalf of purchasers of E-LOAN Inc. (NASDAQ:EELN) securities during the period between June 28, 1999 and Dec. 6, 2000, inclusive. The complaint charges the following defendants: (1) E-LOAN, (2) Chris Larsen, (3) Janina Pawlowski, (4) Frank Siskowski, (5) Goldman, Sachs & Co. Inc., (6) FleetBoston Robertson Stephens, and (7) Merrill Lynch, Pierce, Fenner & Smith Incorporated with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about June 28, 1999, E-LOAN commenced an initial public offering of 3.5 million of its shares of common stock at an offering price of $14.00 per share. In connection therewith, E-LOAN filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of E-LOAN shares issued in connection with the E-LOAN IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate E-LOAN shares to those customers in the E-LOAN IPO in exchange for which the customers agreed to purchase additional E-LOAN shares in the aftermarket at pre-determined prices. For more information, contact Jackie Addison, Sue Null or Charlie Gastineau by Phone: 1-888-551-9944 (toll-free) by E-mail: info@classlawyer.com or visit the firm's Website: www.classlawyer.com FORD MOTOR: Judge Orders Court Appearance After Failure To Settle Suit ---------------------------------------------------------------------- Ford Motor Corporation and consumer attorneys were ordered to appear in court next week, after they failed to settle a class action lawsuit alleging design flaws in over 20 million Ford vehicles. The suit said Ford's placement of the thick film ignition (TFI) module, which regulates electric current to the spark plugs, made the vehicles more prone to stalling. It further alleged that Ford redesigned the ignition to save money and to increase fuel economy, even if other documents obtained by the Associated Press showed that Ford knew that the design would make vehicles prone to stalling. Ford has denied any defect. Attorneys for Ford and consumers said a proposed settlement they've been working on for weeks has not unraveled. They say they're working out the final details, and couldn't finish by Friday's hearing. Consumer attorneys said the tentative proposal could cost Ford as much as $1 billion, a figure Ford disputes. If Ford lost at trial, it could be liable for billions of dollars under California consumer laws. Under the tentative agreement, Ford would reimburse motorists who have paid to fix the ignition device and it would compensate consumers for related expenses such as towing. It would also cover future TFI repairs as long as the vehicle was under 100,000 miles. HAWAIIAN HOME: Supreme Court Dismisses Hawaiian Home Lands Suit --------------------------------------------------------------- The Hawaii Supreme Court dismissed the class action suit against the state of Hawaii for alleged breaches in the Hawaiian Home Lands program. Leona Kalima, Diane Boner and Joseph Ching filed the suit in October 1999 in behalf of more than 2,700 Hawaiian and part-Hawaiian beneficiaries of the trust administered by the state Department of Hawaiian Home Lands. The trust beneficiaries were attempting to obtain compensation for their claims alleging breaches of trust, including years-long delays in processing their applications and the awarding of homestead sites. The state had set up a process in 1991 for handling the claims for breaches from 1959 to 1988. The process allowed for the filing of lawsuits by Dec. 31, 1999, but only after a panel reviewed the claims and the Legislature acted on the panel's recommendations. In the case before the Supreme Court, Ching, Boner and Kalima were appealing an earlier decision by Circuit Judge Victoria Marks, who had denied their motion for judgment on the pleadings. The Supreme Court justices said they lacked jurisdiction in the matter. HEALTHCARE RECOVERIES: Settles Suit For $3 Million In West Virginia ------------------------------------------------------------------- The United States District Court for the Northern District of West Virginia approved the settlement agreement for the class action suit filed against Healthcare Recoveries, Inc. last July 2001. The Company paid out $3 million and agreed on non-monetary terms to settle the lawsuit, which was filed on March 15, 1994. The suit alleged that the Company's subrogation recovery efforts on behalf of its clients violated a number of state and federal laws, including the Fair Debt Collection Practices Act and the Racketeering Influenced and Corrupt Organizations Act. The Complaint further alleged that the Company engaged in fraudulent or negligent practices on behalf of its clients by attempting to recover, via subrogation, amounts in excess of the actual amounts paid for those Services. The Company reportedly pursued subrogation recoveries from individuals whose health insurance plans did not specifically provide for subrogation. The Company responded to these allegations by maintaining: (1) that the subrogation rights of its clients provide for recovery of medical treatment at the "prevailing rates" or "reasonable value" of those services and (2) that instances in which recoveries were made or sought against individuals without specific plan language occurred due to either mistaken referrals from clients or reliance on equitable or common law subrogation rights. On March 30, 1999, the court entered an order certifying a class of all members of one HCRI client health plan located in Wheeling, West Virginia who have been subject to subrogation and/or reimbursement collection practices by HCRI. On February 5, 2001, the Company announced that the parties had agreed in principal to settle for $3 million and certain non-monetary terms primarily affecting subrogation recovery activities of one HCRI client in West Virginia. The settlement approval became final on July 2001 and the Company disbursed payment under the settlement agreement in mid-July when the time period for filing appeals expired. Health Recoveries, Inc. is a health insurance subrogation firm which attempts to recover the value of accident-related health care benefits from third parties on behalf of health care organizations and employee insurance programs. MICROFINANCIAL INC.: Suit Dismissed, Plaintiffs File Revised Motion ------------------------------------------------------------------- The Middlesex Superior Court for the Commonwealth of Massachusetts dismissed a class action suit filed against MicroFinancial, Inc. and its wholly owned subsidiary, Leasecomm Corporation. The suit was filed last on behalf of individuals and businesses that have been sued by Leasecomm in a Massachusetts court for allegedly breaching Leasecomm's Non Cancellable Equipment Lease Agreement or Non Cancellable Lease Agreement The suit alleges that enforcement of the forum selection clause is not fair or reasonable because litigation in Massachusetts is prohibitively costly and time consuming for purported class members. Purported class members have no choice but to enter into the Lease Agreement's because of Leasecomm's greater bargaining power. Purported class members allegedly have valid defenses to the claims asserted against them by Leasecomm. On August 16, 2000, the Court granted the Company's motion to dismiss, resulting in the dismissal of all claims against the Company. The Court also granted Leasecomm's motion to dismiss as to all of the plaintiffs' individual claims, and as to all but one of the plaintiffs' purported class claims. As a result, the only claim that remains is a purported class claim against Leasecomm for alleged violations of Chapter 93A of the Massachusetts General Laws arising out of the inclusion of a forum selection clause in Leasecomm leases. Plaintiffs await a court decision on the revised motion for class certification they filed in the light of the court's prior rulings. MicroFinancial Incorporated, which operates primarily through its wholly-owned subsidiary, Leasecomm Corporation, is a specialized commercial finance company. MICROFINANCIAL INC.: Enters Intent To Settle Consumer Suit in CA ---------------------------------------------------------------- Microfinancial Inc. and subsidiary Leasecomm Corporation have entered a letter of intent to settle the class action suit filed against them in the Superior Court of the State of California, County of San Mateo. The suit was filed April 3, 2000 and also named as defendants entities with which Leasecomm and MicroFinancial are alleged to have done business, directly or indirectly. The action is alleged as a "consumer fraud class action on behalf of defrauded California small businesses and their owners, who were induced to purchase services and/or goods from Defendants through false and misleading representations and material omissions." More specifically, the complaint seeks certification of a class of California persons and entities who purchased services or goods from the following: (1) Internet Success Systems, Inc., (2) Fortune Financial Systems, Inc. (previously known as Fortune 21, Inc.), (3) Fortune Financial Systems of Nevada, Inc., (4) MarketComm Production, (5) Bizz-e Inc. (also known as Bizz-e.com, Inc.), (6) Cardservice International Inc. (also known as Cardservice Global Solutions) or (7) Power Communications, Inc., directly or indirectly, at any time between February 7, 1997 and the present date. The complaint seeks certification of a subclass of those class members who entered into any lease agreement contracts with Leasecomm Corporation for the purposes of financing the goods or services allegedly purchased from these other entities. The class action complaint alleges ten causes of action for: (i) fraud and deceit; (ii) negligent misrepresentation; (iii) violations of California's Business & Professions Code ss.ss.17200 et seq. (unfair competition); (iv) violations of California's Business & Professions Code ss.ss.17500 et seq. (false advertising); (v) violations of California's Civil Code ss.ss.1750 et seq. (Consumer Legal Remedies Act); (vi) unjust enrichment; (vii) fraud in the inducement of contract; (viii) fraud in the inception of contract; (ix) lack of consideration for contact; and (x) breach of the contractual covenant of good faith and fair dealing. On May 31, 2000, the Company filed a motion for an order staying all litigation in California on the grounds that the lease contracts at issue contained a forum selection clause providing that any litigation concerning the leases would be filed in Massachusetts where Leasecomm Corporation is headquartered. The Court granted the motion on August 22, 2000, staying further litigation in the California proceedings against Leasecomm Corporation and MicroFinancial Incorporated. On September 27, 2000, plaintiffs filed an appeal seeking to overturn that ruling and Leasecomm filed an immediate response. It was on July 16, 2001 that the parties entered into a letter of intent to settle the class action litigation. The letter of intent must be reduced to a stipulation of settlement and will be effective only if and when the stipulation of settlement is approved by the San Mateo Superior Court. It is unsure how long the court approval will take. The hearing on the appeal filed by the plaintiffs has been continued until December 18, 2001, while the parties pursue approval of the proposed settlement. MONSANTO CORPORATION: Court Blocks Environmental Suit in Alabama ---------------------------------------------------------------- The Alabama Supreme Court blocked a class action lawsuit against Monsanto Corporation arising from people in Anniston, Alabama who were exposed to polychlorinated biphenyls (PCBs) manufactured by the Company in the City for 45 years. The Alabama Supreme Court said state citizens exposed to dangerous chemicals, such as PCBs, can't sue for medical monitoring when they have no apparent injuries. Monsanto attorney Adam Peck said that if the decision had gone the other way, it would have opened all manufacturers to suits from residents near the plants who had shown no medical problems. And it wouldn't have stopped there, he said. "If medical monitoring were allowed, a doctor who prescribed medicine could have been sued for not monitoring for adverse health effects." Travis Hinton, a 3-year-old boy in Anniston, and his mother, Nona Hinton, plaintiffs who sued Monsanto in federal court, hoped to turn it into a class-action case that would provide medical monitoring for Anniston residents. Monsanto, now Solutia, manufactured PCBs in Anniston from 1927 through 1972 for use as insulation in electrical equipment including transformers. The government banned production in the late '70s amid questions about possible health risks, including cancer. PCBs-laden wastewater and storm water from the plant emptied into a drainage ditch and creek in a poor section of Anniston. From there, the water ran to Choccolocco Creek and Lake Logan Martin. Solutia previously agreed to pay $43.7 million to property owners along Choccolocco Creek and Lake Logan Martin, where PCBs was found. MTBE LITIGATION: Judge Denies Attempts To Dismiss Contamination Case -------------------------------------------------------------------- United States District Court Judge Shira A. Scheindlin denied that major oil companies were attempting to dismiss the class action suits filed against them by residents of Hyde Park, New York. The suits allege that the gasoline industry was aware of health hazards associated with MTBE, methyl tertiary-butyl ether, in groundwater, and claim the companies are liable for the contamination. According to Kenneth McCallion, the attorney for the plaintiffs in Hyde Park, the class action lawsuit represents suits that were filed by private well owners throughout the United States. Further, he said that the Hyde Park plaintiffs are seeking to be certified in federal court as representative of all the well owners in New York State relating to MTBE contamination. According to McCallion, the oil companies have claimed that the issue wasn't in the jurisdiction of the courts, but rather that it was in the jurisdiction of the Environmental Protection Agency (EPA), the Department of Environmental Conservation (DEC) and other such environmental agencies. The companies also presented other motions that would prevent the case from moving forward. Greenbush area resident Colleen Berrian says that there have been many deaths in the area from cancer that residents now believe is associated with the groundwater contamination. "There have been 14 deaths from cancer just on Bircher Avenue, and we are seeing leukemia in children and cancer in animals," she said. "People here, myself included, are not happy with the DEC dealing with this because many of us feel that we shouldn't have to pay a dime for clean water." In the class action lawsuit, Judge Scheindlin dismissed the cases of several well owners, none of which were in Hyde Park, whose homes had not yet been contaminated with MTBE but were threatened in the future, saying that the threat was not imminent. NEW ERA: Sued By Stockholders For Securities Laws Violations in CO ------------------------------------------------------------------ Middleware supplier New Era of Networks faces multiple class action lawsuits filed in Federal District Court for the State of Colorado alleging federal securities laws violations. Certain of the Company's current and former officers also are named as defendants. Most of the complaints in these lawsuits assert claims on behalf of purchasers of the Company's securities between October and December 2000. The complaints allege that the defendants made material misrepresentations and omissions regarding the Company's business and prospects, causing harm to purchasers of their securities. These cases are in the early stages and neither discovery nor trial date has been set. The Company believes this class action lawsuit is without merit and intends to defend itself vigorously. In a disclosure to the Securities and Exchange Commission the Company revealed that an adverse judgment or settlement in this lawsuit could have a material adverse effect on their business operations. ORTHOLOGIC CORPORATION: Court Dismisses All But Two Claims In Lawsuit --------------------------------------------------------------------- The United States District Court for the District of Arizona dismissed all but two of the claims in the consolidated securities suit against Orthologic Corporation. The suit alleged that the Company violated Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-6 promulgated thereunder and to other defendants Section 20(a) of the Exchange Act. Plaintiffs in these actions alleged generally that information concerning the May 31, 1996 letter received by the Company from the FDA regarding the Company's OrthoLogic 1000 Bone Growth Stimulator, and the matters set forth therein, were material and undisclosed. This allegedly resulted in an artificially inflated stock price. The suit also asserts that the Company allegedly made untrue statements of material facts or omitted to state material facts in order to appear not misleading. Plaintiffs further alleged that once the FDA letter became known a material decline in the stock price of the Company occurred, causing damage to the plaintiffs. On March 31, 1999, the judge in the consolidated case before the United States District Court granted the Company Motion to Dismiss and entered an order dismissing all claims in the suit against the Company and two individual officers/directors. The Judge allowed certain narrow claims based on insider trading theories to proceed against certain individual defendants. On December 21, 1999, the District Court granted plaintiffs' motion for class certification to include purchasers of common stock between June 4 through June 18, 1996, inclusive. The Company intends to vigorously oppose the suits. PFIZER INC.: Faces Consumer Suit Due To Arthritis Drug in E.D NY ----------------------------------------------------------------Pharmaceutic al giant Pfizer, Inc. faces a class action suit filed last June 7,2001 in the United States District Court for the Eastern District of New York by users of Celebrex. Celebrex, discovered and developed by Pfizer's alliance partner Pharmacia Corporation, is used for relief of the pain and inflammation of osteoarthritis and adult rheumatoid arthritis. Plaintiffs allege that patients taking Celebrex or Merck's Vioxx were at a higher risk of heart attacks. The complaint, which also names Merck and Pharmacia as defendants, seeks unspecified monetary and injunctive relief, including medical monitoring. The Company labeled the allegations "without merit" and vowed to vigorously oppose the suit. PRODIGY COMMUNICATIONS: Appellate Court Affirms Dismissal of Suit ----------------------------------------------------------------- The California Court of Appeals affirmed the California Trial Court's dismissal of a class action suit filed against Prodigy Communications Corporation last July. The Superior Court of the State of California, County of Los Angeles, previously dismissed the case for failure to state a cause of action. Christa Roberts originally filed the suit on January 10, 2000 against the Company, AOL Time Warner, Circuit City Stores, Fry's Electronic, Microsoft and other unnamed parties. On February 7, 2000, the plaintiff filed an amended complaint naming Young H. Kim as the named plaintiff in place of Christa Roberts. The lawsuit alleges that Prodigy and the defendants engaged in false advertising, and offered incentives to consumers and entered into retail sales contracts with consumers which violated California law. The plaintiff has 90 days from the Order in which to file a petition for review by the California Supreme Court. PRODIGY COMMUNICATIONS: Subsidiary Faces Consumer Suit in Illinois ------------------------------------------------------------------ Prodigy Communications Corporation faces a class action suit filed June 20, 2000 in the Circuit Court for Cook County, Illinois. Saul Kaufman filed the suit against Prodigy, alleging he was "locked out" of his service during the migration from Web America, whose subscribers were acquired by Prodigy in March 2000, to Prodigy. Kaufman is not allowed to conduct "fact" discovery until the Judge decides whether to certify this case as a class action. The Court has allowed Kaufman to amend his pleadings to add Web America as defendant. The Court has not set a specific date for a hearing on the matter. Prodigy expects a decision on class certification during the fall of 2001 and makes no predictions as to the outcome of this litigation. Prodigy also made a demand on Web America, through its parent company, for indemnification pursuant to a written agreement between the parties but Web America has yet to respond. RARE MEDIUM: Files Motions To Dismiss Securities Suits In NY and DE ------------------------------------------------------------------- Rare Medium Group, Inc. recently filed motions to dismiss securities class action suits in the Court of Chancery of the State of Delaware and the New York State Supreme Court. The suits, filed by the holders of the Company's common stock, arose from the proposed merger of the Company with a subsidiary of Motient, Inc. The Delaware suit is a consolidation of seventeen complaints that have been filed, sixteen in the Court of Chancery in Delaware and one, in the New York State Supreme Court. All of the complaints name the Company and members of the Company's board of directors as defendants. Most of the complaints name the holders of the Company's preferred stock, and certain of their affiliates, as defendants, and some name Motient as a defendant. In June 22, 2001, the Delaware court entered an order to consolidate the sixteen Delaware lawsuits for all purposes into a single purported class action. The law firm of Milberg Weiss Bershad Hynes & Lerach, LLP was designated as lead counsel, and the law firm of Rosenthal Monhait Gross & Goddess, P.A. was designated as plaintiff's Delaware Liaison Counsel. The following law firms were designated as plaintiffs' Committee of the Whole: (1) Abraham and Paskowitz; (2) Bull & Lifshitz, LLP; (3) Bernstein Liebhard & Lifshitz LLP; (4) Kirby McInerney & Squire LLP; (5) Stull, Stull & Brody; (6) Weiss & Yourman; (7) Wolf Popper LLP; (8) Milberg Weiss Bershad Hynes & Lerach LLP; (9) Law Offices of Peter Fischbein; (10) Law Offices of Bernard M. Gross, P.C.; (11) Berger & Montague, P.C.; (12) Barrack, Rodos & Bacine; (13) Schiffrin & Barroway LLP; (14) Law Offices of Curtis V. Trinko LLP; (15) Shapiro Haber & Urmy LLP; (16) Law Offices of Alfred G. Yates, Jr.; and (17)Rabin & Peckel LLP. On August 7, 2001, a Consolidated Amended Class Action Complaint was filed in Delaware Chancery Court. The Delaware Chancery Court has not yet certified the consolidated lawsuit as a class action. Both the Consolidated Amended Class Action Complaint and the complaint in the New York lawsuit allege that the defendants breached duties allegedly owed to the holders of the Company's common stock in connection with the merger agreement. Specifically, the complaints allege, among other things, that: (i) the holders of the Company's preferred stock engaged in self- dealing in the proposed merger; and (ii) the Company's board of directors allegedly breached its fiduciary duties by agreeing to distribute the merger consideration differently among holders of the Company's common and preferred shares. The Consolidated Amended Class Action Complaint also alleges that the Company failed to adequately disclose all material information in the joint proxy statement/prospectus relating to the merger. The complaints in both lawsuits also allege that the holders of the Company's preferred stock aided and abetted the supposed breaches of fiduciary duties. RMED INTERNATIONAL: Files Securities Suit Against Sloan's Supermarkets ---------------------------------------------------------------------- Paperboard and box maker Rmed International, Inc. commenced a securities class action against Sloan's Supermarkets, Inc. in the United States District Court of the Southern District of New York. The Company purchased approximately 226,000 shares of Sloan's common stock in November and December 1993 in open market transactions on the American Stock Exchange. The suit alleged that the defendants failed to disclose the existence of an investigation by the Federal Trade Commission regarding the concentration of supermarkets by entities owned or controlled by the defendants. As a result, the Company sold a portion of the shares at a loss after June 2, 1994, when the Company learned of the FTC investigation. The suit also names Gristede Foods (operator of Sloan's Supermarkets) Chief Executive Officer John A. Catsimatidis as defendant. The defendants have filed a motion for summary judgement, which is awaiting decision by the Court. The Company said that it is unable to predict the outcome of this matter as litigation is subject to many uncertainties. SOUTHFORK GAS: Owner Sued For Raising Gasoline Prices in Arkansas ----------------------------------------------------------------- A gas station owner in Arkadelphia, Arkansas was slapped with a class action suit after adding a dollar to his gasoline prices. A customer said the station owner took advantage of the crisis caused by terrorists, but the owner says customers weren't the only ones panicking. Jay Clark was among the people rushing to fuel up at the Southfork Gas Station and was stunned at how much it had cost him. "That made me pretty well mad - he was taking advantage of the panic and crisis we were in." Clark is now suing the station's owner, and says the owner should refund everyone the amount he overcharged them. Clark's attorney, Todd Turner, says the owner should "put that into an account - and refund the people who can prove they bought gas from him - and what ever is left over - we're going to suggest it go to charity." But Southfork owner Gary Deaton says he couldn't get a hold of his distributor and guessed at a price. "I said, well a dollar is a good safe price to raise it to until I figure something out." Deaton says he later refunded the cost difference to customers who returned, but realizes some customers still feel cheated. "I wouldn't do that on purpose - I was just panicking like everyone else." Gary Deaton says he only had about a dozen customers in the hour and fifteen minutes the price was up; and says he's refunded half of them so far. STATE FARM: Sued For Overcharging Customers With Poor Credit Ratings -------------------------------------------------------------------- State Farm Mutual Insurance Co. faces three class action suits in Hawaii State Court, alleging the company violated the state insurance code by overcharging customers with poor credit ratings. State law prevents insurers from using criteria like credit reports, race, creed, ethnicity, marital status or physical handicap to set their rates. The lawsuits against State Farm demands that the company notify all customers who had their rates set by some of the improper rating criteria. The suits said that the Company needs to tell its customers who it overcharged how much more they paid, and then return the money. Customers in some cases paid 50 percent more for coverage, giving State Farm a substantial financial gain, the lawsuit alleges. The state insurance commissioner issued a report last week citing Allstate Insurance Co., AIG Hawaii Insurance Co. and DTRIC Insurance all violated the same policies. In the same report, the state says it's reached an out-of-court settlement with State Farm regarding its use of the personal data. TALARIAN CORPORATION: Cauley Geller Files Securities Suit in S.D. NY -------------------------------------------------------------------- Cauley Geller Bowman & Coates LLP commenced a class action in the United States District Court for the Southern District of New York on behalf of purchasers of Talarian Corp. (NASDAQ:TALR) securities during the period between July 20, 2000 and Dec. 6, 2000. The complaint charges the following defendants: (1) Talarian, (2) Lehman Brothers Inc., (3) FleetBoston Robertson Stephens, (4) Merrill Lynch, Pierce Fenner & Smith Inc., (5) Paul A. Larson, (6) Michael A. Morgan and (7) Thomas J. Laffey with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about July 20, 2000, Talarian commenced an initial public offering of 4.2 million of its shares of common stock at an offering price of $16.00 per share. In connection therewith, Talarian filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that (i) the Underwriter Defendants (Lehman, Robertson Stephens and Merrill Lynch) had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Talarian shares issued in connection with the Talarian IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Talarian shares to those customers in the Talarian IPO in exchange for which the customers agreed to purchase additional Talarian shares in the aftermarket at pre- determined prices. For more information, contact Jackie Addison, Sue Null or Charlie Gastineau by Phone: 888/551-9944 (toll-free) by E-mail: info@classlawyer.com or visit the firm's Website: www.classlawyer.com. TEXT MESSAGING: Quezon City Court Lifts TRO, Dismisses Consumer Suit -------------------------------------------------------------------- A Philippine telecommunications watchdog organization suffered a setback as the Quezon City Regional Trial Court dismissed September 15, 2001 the consumer class action filed against four major telecommunications companies. The plaintiff, Philippine League for Democratic Telecommunications, Inc. (PLDTi), scored the decision, calling it a grave and unjust blow to consumers and vowed to continue the fight. The Philippines is said to be the "text messaging capital of the world", where users send 100 million text messages a day. The telecommunications industry has become a multi-billion industry, with Globe Telecoms and Smart Communications reporting earnings of P2.5 billion (US$5 million) and P1.8 billion (US$ 36 million), respectively in the first half of the year. The suit arose from the companies' plan to reduce the monthly text message allocations from the companies' cellular service and charged the companies with breach of contract and false advertising. The suit names as defendants Globe Telecoms and its subsidiary Isla Communications and Smart Communications, Inc. along with its' subsidiary, Pilipino Telephone Corporation. The Companies allegedly reduced the allocated text messages to subscribers per month after advertising a specific amount of text message allocation much higher than they now intend to impose. Earlier, the trial court issued a 20-day temporary restraining order preventing the planned implementation of the reductions on September 1,2001. The four companies immediately claimed that the National Telecommunications Commission should have jurisdiction over the case and not the Trial Court - a claim that the court upheld. According to the court, the National Telecommunications Commission (NTC) has the obligation to implement policies and objectives related to telecommunications. The NTC, however, has said that it had no jurisdiction over the matter, as text messaging is a "value added service." PLDTi said it plans to file a motion for reconsideration, and appeal to the Court of Appeals and the Supreme Court, if necessary. ********* 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., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2001. All rights reserved. ISSN 1525-2272. 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