/raid1/www/Hosts/bankrupt/CAR_Public/020118.mbx
C L A S S A C T I O N R E P O R T E R
Friday, January 18, 2002, Vol. 4, No. 13
Headlines
AIR CANADA: Woman Sues For Discrimination Due To Oxygen Tank Policy
ARTHUR ANDERSON: Energy Firm Commences Suit Related To Enron Collapse
BOEING COMPANY: Female Employees File Three Gender Discrimination Suits
BOIES SCHILLER: Two Women Employees Sue Alleging Gender Discrimination
CREDIT CARDS: Visa, MasterCard Sued For Antitrust Violations in E.D. PA
HMO LITIGATION: Force Doctors To Arbitrate Not Litigate, HMOs Say
INSURANCE COMPANIES: Appeals Court Reinstates Fraud Suits in Miami
INTERLAND INC.: Sued For Sale of Defective Computer Products in MN
INTERLAND INC.: Employees Sue For Labor Standards Act Violations in ID
KM.NET: Settles Michigan Internet Mall Pyramid Suit For $6 Million
MICHIGAN: Truckers Sue Local Governments Over Road Rules Enforcement
NEW HAMPSHIRE: Disability Rights Group Sues For Health Services Delay
NEW YORK: Businessman Sues City After Arrest Due To Outdated Ticket
OHIO: Warden Defends Prison Security In Trial of Civil Rights Suit
SOUTH CAROLINA: Greenville Flood Suit Still Awaiting Certification
VIVENDI UNIVERSAL: Judge Approves $4.75M Settlement in Royalties Suit
Securities Fraud
ALLSTATE INSURANCE: Settles For $59M Damaged Vehicles Insurance Suit
HA-LO INDUSTRIES: Wolf Haldenstein Initiates Securities Suit in N.D. IL
ICG HOLDINGS: Faces Multiple Suits For Securities Act Violations in CO
IMCLONE SYSTEMS: Schatz Nobel Commences Securities Suit in S.D. NY
INFONET SERVICES: Schatz Hobel Commences Securities Suit in C.D. CA
INTRAWARE INC.: Will Vigorously Oppose Securities Suit in S.D. NY
PALM INC.: Sued For Breach of Fiduciary Duty Due To Stock Option Plan
RICA FOODS: Cauley Geller Commences Securities Suit in S.D. New York
RICKEL HOME: $3M Settlement Reached in Securities Suit in S.D. NY
SIMON TRANSPORTATION: Appeal on Suit Dismissal To Be Heard January 15
TAKE-TWO INTERACTIVE: Schatz Nobel Lodges Securities Suit in S.D. NY
USA NETWORKS: Faces Consolidated Suit For Securities Violations in NY
WILLAMETTE INDUSTRIES: Request To Stop Georgia Pacific Merger Withdrawn
*********
AIR CANADA: Woman Sues For Discrimination Due To Oxygen Tank Policy
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Air Canada faces a class action suit filed by a Regina, Canada resident
after they prevented her from bringing her portable oxygen tank on
board a flight, according to CBC news.
Plaintiff Edith Toth damaged her lungs during radiation treatment and
needs the tank to breathe. She tried to bring it with her on a recent
flight, but the airline refused, saying it was a "dangerous good."
However, Ms. Toth considered it outright discrimination. She states
"All I want to do is take my tank on. It should be no problem at all.
Just get it strapped in and away we go."
The Airline offers its own tanks but charges $100 per trip. The
Company said it enforced this to ensure the tanks were properly secured
and working.
Jim Toth, Mrs. Toth's husband, says the tanks operated by Air Canada
are exactly the same as the one his wife uses, which costs about four
or five dollars each way. He accuses Air Canada of bilking passengers,
saying "I think Air Canada's just gotten so big and arrogant that they
say: 'We'll do what we damn well please and to heck with the rest of
you."
Twenty people have filed complaints against the Airline, but the
Company is standing by its policy. Before it merged with Air Canada,
Canadian Airlines allowed passengers to bring their own tanks on board.
WestJet currently permits personal tanks as well.
ARTHUR ANDERSON: Energy Firm Commences Suit Related To Enron Collapse
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Tulsa, Oklahoma based energy firm Samson Investment Company filed a
suit against Enron Corporation's auditor, Arthur Andersen LLP, claiming
the Company "recklessly disregarded evidence of questionable financial
transactions between Enron and its insiders."
An executive of the beleaguered accounting firm earlier admitted that
documents pertaining to Enron were destroyed last fall after the
Securities and Exchange Commission commenced an investigation into
Enron's finances. Andersen has since fired the senior auditor. The
firm also said that four partners in its Houston office would be
stripped of management responsibilities and that three auditors had
been put on administrative leave.
The suit, likely to be the start of a rash of lawsuits accusing
Andersen of complicity in Enron's spectacular collapse, experts
predicted. They also said that, with so much money at stake and
potential victims including shareholders, employees and clients of
Enron, the anticipated avalanche of lawsuits will be lumped together
into a few cases and granted class action status, according to an
Associated Press report.
Mark Cheffers, Chief Executive of AccountingMalpractice.com, said the
case "is unique and extraordinary and you haven't even seen the
beginning of it."
The suit, filed on behalf of more than 100 unnamed companies, contends
that Samson and other companies "justifiably relied on the financial
audits of Enron" for their natural gas purchase contracts with Enron.
It called the audits "grossly misleading."
According to Associated Press, Andersen officials didn't immediately
respond to a telephone message seeking comment on the firm's exposure
to litigation related to Enron, or what defenses it may employ to
contest the lawsuits.
BOEING COMPANY: Female Employees File Three Gender Discrimination Suits
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Employees of aerospace giant, Boeing Company (NYSE:BA) commenced three
separate sex-discrimination lawsuits in US District Courts in
California, Kansas, and Missouri, claiming the aerospace giant has
denied women promotions, equal pay and other employment opportunities
based solely on gender, law firm Hagens Berman reported.
The suit, which could potentially represent thousands of employees in
each state, and tens of thousands across the country, follows a similar
class action filed in October 2001 by a group of female employees in
Washington's Puget Sound region. The Court limited the class action to
female Boeing employees working in the Puget Sound region, but left the
door open for other suits in other regions.
In certifying the Puget Sound suit, the Court found that "the data
yields statistically significant results of adverse impacts on female
employees in every facility and at every level."
Attorney for the plaintiffs, Steve Berman said "We plan to use Boeing's
own surveys to show that Boeing is aware of a deep-seated gender bias
within its organization.What's worse, the company has done very little
to challenge that bias although the evidence of its existence is well-
documented."
Several plaintiffs from each state have come forward with their own
experiences of sexual discrimination at Boeing. Cheryl Lee Persinger
works as a technical specialist at Boeing's Wichita, Kan. plant where
she claims she has hit "the cement ceiling at Boeing." In the last year
alone, Ms. Persinger applied for 17 different jobs at Boeing, but was
not even interviewed for 75 percent of them, despite having more than
adequate qualifications, according to the complaint.
Plaintiff Teodosia Grosz, a worker at the Boeing Long Beach facility
since 1996, was fired in July from her position as an electrical
engineer. According to the complaint, Ms. Grosz made considerably less
money than male engineers with less experience and education, some of
whom did not even hold engineering degrees.
A Boeing employee in St. Louis for nearly 13 years, Terri Wertz
received substantial pay raises to match her performance until she took
pregnancy leave, according to the complaint. When Ms. Wertz returned,
her raises became quite minimal. In January 2000, she finally received
a five percent raise originally scheduled for August 1997, the
complaint contends. The lawsuit claims this raise is still below the
lowest published pay scale for her job.
In one external survey, more than 85 percent of women at Boeing
facilities were paid less than comparably situated men. In addition to
pay inequity, the suit contends that women were denied favorable job
assignments and promotional opportunities, as well as undergoing verbal
assaults from the predominately male workforce.
"A company can explain away slight statistical anomalies, but Boeing
has a great deal more to answer for," Berman said. "The numbers don't
lie - they point to a systemic, ongoing problem in virtually every
major Boeing facility."
According to the suit, the Company has strongly worded anti-
discrimination policies, but managers and supervisors leniently enforce
these policies. The suit contends that, rather than punishing the
perpetrator, the Company's anti-discrimination policies often punished
women by assigning them to unskilled jobs with little chance for
advancement.
For more information, contact Steve Berman by Phone: 206-623-7292 by E-
mail: steve@hagens-berman.com or Mark Firmani by Phone: 206-443-9357 or
by E-mail: mark@firmani.com
BOIES SCHILLER: Two Women Employees Sue Alleging Gender Discrimination
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Two women who worked for the law firm headed by David Boies recently
filed a lawsuit charging that the firm had illegally discriminated
against them and other female lawyers by paying them less than their
male counterparts and by putting them on a dead-end career track,
according to the New York Times News Service.
The lawsuit, filed in Federal District Court in Manhattan, claims that
the firm, Boies, Schiller & Flexner LLP, maintained separate tracks for
male and female associates, segregating all but one woman onto the
non-partnership track.
In a written statement, Jonathan D. Schiller, a managing partner in the
firm, said, "There is absolutely no merit in the claims we understand
are being asserted." He said that the two women filed the lawsuit
after demanding a payment of more than $1 million to avoid the adverse
publicity a lawsuit would bring.
David Boies, a managing partner in the firm, was the lead counsel in
the federal government's anti-trust case against Microsoft. He
represented the plaintiffs in the class action lawsuit against
Sotheby's auction house, and led Al Gore's legal efforts in Florida
after the presidential election.
The women filing the lawsuit, Rachel M. Baird and Bonnie Porter, each
worked at the firm's headquarters in Armonk, New York, for about a year
before quitting. During that time, they said in their lawsuit, that
the non-partnership track at the firm had seven lawyers, all women, and
the partnership track had 11 lawyers, of whom only one was a woman.
Despite being paid less and getting smaller bonuses, the women on the
non-partnership track did substantially the same work as the men on the
partnership track, according to the lawsuit.
Ms. Baird, a 1992 graduate of Yale Law School, worked for the
Connecticut Attorney General's office for seven years, then accepted a
position at Boies Schiller in 2000. The firm told her before her
interview that she would not be put on the partnership track, the
lawsuit said.
Ms. Porter, a 1998 graduate of Boston College School of Law, worked as
a law clerk for a magistrate judge in U.S. District Court in Rhode
Island and as an associate in the litigation department of Rosenman &
Colin LLP, a New York law firm. She also joined the Boies firm in
2000. She, too, was told before her interview that she would not be
put on the partnership track.
Ms. Baird's beginning salary was $102,000, and never exceeded $112,000,
and Ms. Porter's was $114,000, according to the lawsuit. During the
same period, two men who had graduated from law school in 1998 were
paid base salaries of $145,000, the lawsuit said.
The law firm has 119 lawyers in New York, Washington, Florida,
California and New Hampshire. Of 66 associates, 26 are women, and nine
of 42 partners are women, the firm's administrative partner, Philip
Korologos said.
CREDIT CARDS: Visa, MasterCard Sued For Antitrust Violations in E.D. PA
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Credit card giants, Visa and Mastercard faces a class action filed by
antique seller AAG International in the US District Court for the
Eastern District of Pennsylvania, alleging that they conspired to
monopolize the market for credit card services.
The suit claims that Visa, MasterCard and the banks that issue those
cards illegally agreed that the banks would not issue any other credit
cards like American Express or Discover. AAG International Stephen
Flood said in a statement that he was bringing the lawsuit because he
believes that competition in the marketplace is essential in bringing
consumers lower prices. The suit was filed on behalf of all businesses
that were forced to pay higher fees to accept Visa and MasterCard.
In October, a New York federal judge found the challenged practice
violates the federal antitrust laws. Diane Nast, attorney for the
plaintiffs, says "The fact that a federal judge has held the conduct of
Visa and MasterCard illegal provides a strong foundation for the claims
in this suit." Ms. Nast expects that more suits will be filed alleging
similar violations against the two Companies.
For more information, contact Dianne M. Nast or Michael G. Nast by
Phone: 1-717-892-3000
HMO LITIGATION: Force Doctors To Arbitrate Not Litigate, HMOs Say
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In a massive lawsuit with national implications, attorneys for health
maintenance organizations argued recently before a panel of the 11th
Circuit Court of Appeals in Atlanta, that health maintenance
organizations (HMO) doctors should be forced to go to arbitration
rather than pursue a lawsuit in court, the Miami Herald recently
reported. The Atlanta hearing was to consider oral arguments of an
appeal by the HMOs on a ruling by US District Judge Federico Moreno in
Miami that allowed the doctors' case to move toward trial.
The doctors have launched a twin-pronged attack against the managed
care organizations. The case that Judge Moreno is allowing to move
toward trial claims that the HMOs frequently cheated doctors out of
payments. The second case, on which the Judge has yet to rule, has
been brought on behalf of 35 million patients claiming that they were
routinely denied needed care by the HMOs.
Dennis Pantazis, an Alabama attorney representing about 20 clients in
the doctors' suit, including the California and the Florida medical
associations, said several hundred doctors' HMO cases are being
consolidated into the Miami case. Late last year, Judge Moreno had
ruled that those doctors who had HMO contracts requiring arbitration
should go to arbitration, but that such a move did not cover all the
doctors or all the claims being made, and that therefore the court case
should proceed.
At the Atlanta hearing, HMO lawyer Walter Dellinger, an attorney
general during the Clinton administration, told the three-judge appeal
panel that the doctors were trying to avoid arbitration agreements. A
decision for the doctors, said Mr. Dellinger, "would simply obliterate
the strong congressional preference to arbitrate." The doctors'
attorney, Jim Tilghman said Judge Moreno's original ruling was correct,
because the arbitration clauses did not cover all the HMO
doctors treating patients.
The HMOs involved include United Healthcare, Prudential and Wellpoint.
The cases are expected to go on for several years, according to an
Associated Press report.
INSURANCE COMPANIES: Appeals Court Reinstates Fraud Suits in Miami
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A three-judge panel on the Third District Court of Appeals reinstated
two lawsuits against Union Central Life Insurance Company and PFL Life
Insurance Company (now known as Transamerica Life Insurance Company),
alleging the Companies fraudulently sold life insurance policies as
pension plans, according to an Associated Press report.
The Appeals Court remanded the case to Miami Circuit Court, after
debunking the Company's argument that the opportunity for lawsuits had
passed. The Appellate Court ruled the lawsuits were filed in time,
based on the time frame during which policyholders thought the
companies victimized them.
Plaintiff Willian Xanttopoulos, who represents Union Central
policyholders, asserted "It's justice. It gives people who are entitled
to a remedy an opportunity to get what they deserve."
Both Companies declined to comment on the pending suit.
INTERLAND INC.: Sued For Sale of Defective Computer Products in MN
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Interland Inc. faces a consumer class action pending in the United
States District Court in Minnesota, alleging the Company sold defective
computers to consumers. The suit alleges that the Company sold
computer products with a defect that may cause errors when information
is written to a floppy disk.
The case is currently in the early stages of discovery and no class has
yet been certified. In a disclosure to the Securities and Exchange
Commission, the Company said that other substantially similar lawsuits
have been filed against other major computer manufacturers.
Interland further said it is unable to estimate total expenses,
possible loss or range of loss that may ultimately be connected with
the matter. This potential liability remains with the Company even
though it has sold the PC Systems business.
INTERLAND INC.: Employees Sue For Labor Standards Act Violations in ID
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Employees of Interland, Inc. commenced a class action in the United
States District Court for Idaho, alleging violations of the Fair Labor
Standards Act, particularly failure to pay non-exempt employees
overtime for hours worked in excess of 40 in a week as well as other
alleged violations of the FLSA and state wage and hour laws.
The case is currently in the early stages of discovery and no class has
yet been certified. The Company revealed in a SEC filing that it is
unable to estimate total expenses, possible loss or range of loss
that may ultimately be connected with the matter. This potential
liability remains with the Company even though it sold the PC Systems
business.
KM.NET: Settles Michigan Internet Mall Pyramid Suit For $6 Million
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Michigan Attorney General Jennifer M. Granholm has reached settlement
agreements with KM.NET and its President Stewart Giardina. Ms. Granholm
accused the Company and its affiliates PowerCard International and
ECB4U.COM of violating Michigan law by selling Internet "malls" through
an on-line pyramid scheme.
In March 2000, the Consumer Protection Division of Ms. Granholm's
office received numerous complaints from Michigan consumers who had
made an initial investment of $399.95 in an Internet mall but had not
received any return on their investment as promised by the company.
According to PowerCard records, more than 17,000 Internet shopping
malls were purchased between March 3 and March 22, 2000. Michigan
residents account for a majority of these purchases.
Ms. Granholm filed a notice of intended action against KM.NET in March
2000 alleging violations of both the Michigan Pyramid Promotion and
Michigan Consumer Protection Acts. When the company would not commit to
issue refunds to consumers, Ms. Granholm filed suit under the Michigan
Consumer Protection Act.
In addition to the Michigan suit, in August 2001, Attorney General
Granholm intervened on behalf of Michigan consumers in a private class
action lawsuit that had been brought against the company in Alabama.
The court gave preliminary approval to the Alabama class action
settlement agreement on October 1, 2001. The class action agreement
extends to all consumers who bought an Internet mall between March 3
and March 22, 2000, and whose bank accounts were electronically debited
on or after March 22, 2000. Though further proceedings will take place
before the settlement is final, postcard and e-mail notices have been
distributed to all affected consumers.
Company officials have indicated that as many as 23,000 Internet malls
were sold to Michigan residents. Granholm expects the settlement
agreements to lead to refunds for thousands of those residents. The
eventual number of consumers affected by the settlement will be
determined, in part, by when those consumers joined the program, when
their bank account was debited, and whether they received any
commission while in the program.
Consumers affected by the class action settlement have until January
25, 2002 to opt-out of the settlement, to object to the proposed
settlement, or to file a verified proof of claim form. A fairness
hearing has been scheduled in Alabama for February 19, 2002.
The settlement of the Michigan and Alabama suits should pave the way
for the release of approximately $6 million related to the sale of on-
line mall purchases currently being held by a federal court in
Maryland. The money will be used to refund all consumers, including
those in Michigan represented by Granholm, affected by the class action
lawsuit. Once consumers who purchased Internet malls between March 3
and March 22, 2000 are repaid, remaining funds will be used to offer
refunds to Michigan residents who purchased malls at other times.
For more information, contact the office of the Attorney General by
Phone: 1-517-373-8060 or visit the Website: http://www.ag.state.mi.us
MICHIGAN: Truckers Sue Local Governments Over Road Rules Enforcement
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Truckers have filed a class action against local governments in
southeastern Michigan, claiming that the counties, cities and townships
have no authority to fine them for violations, the Associated Press
recently reported.
The lawsuit argues that a 1995 federal law does not allow local
governments to enforce ordinances on trucks and that safety enforcement
is the job of the state. The suit was filed by four trucking companies
against Wayne, Oakland, Macomb, Monroe and Washtenaw counties. Also
named are the City of Detroit and 28 other cities and townships within
the five counties. No hearing date has been set.
The trucking companies' suit asks that the enforcement stop and local
governments repay fines which, the lawsuit alleges, were illegally
imposed. If the truckers win the lawsuit, local governments would not
be able to collect fines for violations of truck laws or even ban
trucks from certain local roads. City and township officials say they
enforce truck weight and safety laws to protect their roads and the
safety of their citizens. "It would be a nightmare for the general
public," Canton Township Supervisor Tom Yack told The Detroit News
recently.
Local governments in southeastern Michigan collected millions in truck
fines. Canton Township collected $352,000 in 1999, the most recent
year for which figures were available. Under a law passed in 2000,
local governments keep 70 percent of the fine money, while 30 percent
goes to support libraries.
"They've done it primarily, in our opinion, because they viewed it as a
huge revenue-generator for them," said Walter Heinritzi, Executive
Director of the Michigan Trucking Association. However, local
officials say that a lack of state enforcement of trucking regulations
is driving their efforts.
"Our view of this is that the state does not have sufficient
enforcement presence and that our enforcement efforts are self-defense
as much as anything else," said Scott Schraeger, Senior Legislative
Associate for the Michigan Municipal League. "They're related to
safety; they're related to destruction of the roads."
Elwood Simon, the trucking companies' Birmingham attorney, would not
comment on the lawsuit.
NEW HAMPSHIRE: Disability Rights Group Sues For Health Services Delay
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A New Hampshire disability rights group is filing a class action
against the State Department of Health and Human Services and Governor
Jeanne Shaheen, for denying services to people for developmental
disabilities.
Disabilities Rights Center, Inc. is initiating the suit on behalf of
five named plaintiffs and a class of others. The suit contends that
under state and federal law the state is supposed to provide services,
such as residential housing, for people with developmental
disabilities. However, the state allegedly denied services to many such
people and instead placed them on waiting lists.
According to a Union Leader report, twelve area agencies around the
state are responsible for aiding adults with developmental
disabilities. Those groups receive their money from the state
government. Susan Fox, Director of the state health agency's Division
of Developmental Services, asserts "Currently, we receive a certain
amount of funds from the Legislature each biennium, and it has not been
enough over the past many years to serve everyone in need of services."
According to Ms. Fox, 217 people, all with mental retardation, cerebral
palsy or other serious disabilities, are on the waiting list for
residential services, day programs or other programs. The average wait
time, Fox said, is 210 days.
Parents who have adult children with disabilities welcome the suit.
"It's the only way to get their attention and get these problems
resolved," said Rudy Mayo, a parent of a son with Down's Syndrome, who
spent 11 years on a waiting list for residential housing before
recently receiving a spot.
NEW YORK: Businessman Sues City After Arrest Due To Outdated Ticket
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A Manhattan businessman filed a class action suit against the City of
New York after he was wrongly locked up for 15 hours because of a
traffic-ticket mistake, according to the New York Post
Manhattan police arrested Dominic Russo, 44, telling him his license
had been suspended for not paying a ticket. Mr. Russo was cited in
December 2000 for allegedly not wearing a seat belt. After 15 hours
behind bars, officials realized the original ticket was outdated and
listed the wrong fine, resulting in the suspended-license snafu.
Russo, whose story of jailhouse woe first appeared in The Post, filed
the suit seeking unspecified damages on behalf of any other motorists
who were wrongly incarcerated for a ticket mix-up.
OHIO: Warden Defends Prison Security In Trial of Civil Rights Suit
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The Warden of the Ohio State Penitentiary testified recently at a
hearing before US District Judge James S. Gwin during the course of a
class action lawsuit, filed by the American Civil Liberties Union
(ACLU) on behalf of prisoners who allege the conditions at the super-
maximum-security prison in Youngstown, Ohio, are inhumane, the
Akron Beacon Journal reported recently.
Warden Todd Ishee told the Judge that the cells' metal doors, which are
tightly sealed with metal strips, are safer than cells with bars. He
also told Judge Gwin that since the strips have been added, there have
been no assaults and no escapes and that inmates have stopped throwing
bodily fluids at guards. Warden Ishee also said he knows of no other
Ohio prison with the strips.
ACLU attorneys argue that isolation is too extreme in the prison cells,
with doors they liken to a gas chamber's, because they are metal and
have no bars. They say prisoners are not able to talk to each other or
share magazines and newspapers with adjoining cells. They have no
outside recreation. The jail cells are equipped with a chin-up bar and
a four-inch, open window slit.
One of the prisoners, Jason Robb, listed in the class-action suit, has
been seated in the courtroom during the trial. He testified that this
was the first time he had been outside or left the building in four
years.
ACLU attorney Raymond Vasvari said the ACLU is asking Judge Gwin to
establish some guidelines on transferring prisoners into the
penitentiary and on how they can appeal their detention in Ohio's only
super-maximum-security prison.
Testimony centered on how prisoners get assigned to the prison and how
they get out. ACLU attorneys said there are no written guidelines for
either process, and the cases don't seem to be consistent. ACLU
attorney, Stoughton Lynd questioned why so much power was given to high
officials in a central office instead of prison officials. He targeted
Bernard Ryznar, who oversees inmate assignments and transfers for the
Ohio Department of Rehabilitation and Correction. Ryznar has the final
vote in determining who will stay in or transfer out of the
penitentiary.
ACLU attorneys contend that the prisoners in the high-security prison
are so isolated that prisoners have little chance to prove themselves
worthy of a transfer. There is nothing on which to base evaluations of
prisoners' behavior because they are confined most of the time and have
no interaction with other people, ACLU attorneys say.
State attorney, Joseph Mancini asked the Judge to dismiss the case. He
argued that the prison is in line with 35 other state prisons with
maximum security. Mr. Mancini cited two Supreme Court rulings that
stated the transfer of prisoners should be decided by prison
administrators, and the courts should be left out of the decision.
Judge Gwin denied the motion for dismissal.
The State has already agreed to make other changes sought in the
lawsuit concerning medical care, mental health and outdoor recreation.
The parties have agreed to allow outside medical staff to make
treatment decisions for inmates and to monitor the treatment of
mentally ill inmates who are required to be transferred to other
prisons. The Corrections Department also agreed to build an outdoor
exercise facility beginning in December 2002, to be completed by August
2003. The estimated cost is $4 million.
The State contends the new policies, which will go into effect in
March, have more specific guidelines. They say the changes were in
progress before the lawsuit was filed. One example of the new policy
is to look back only five years when considering inmate transfers.
Officials also will weigh what type of programs the inmates have
completed, such as stress management or general equivalency diploma
studies. Warden Ishee testified that 70 percent of the inmates take
advantage of programs, which is higher than most prisons, whether they
are minimum or maximum security.
The State is planning to call two expert witnesses who favor maximum-
security prisons, James Austin, a faculty member at George
Washington University, in Washington, D.C. and Chase Riveland, former
head of the National Institute of Corrections.
SOUTH CAROLINA: Greenville Flood Suit Still Awaiting Certification
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It could take some time before the suit filed against Greenville
County, South Carolina over flooding problems along Gilder Creek in
Simpsonville becomes a class action, according to South Carolina
Circuit Judge Larry Patterson.
Greenville County resident, Greg Branyon initiated the suit in August
last year saying the County by approving several new subdivisions over
the recent years, had caused flooding at his home and others living
along the Gilder Creek watershed during heavy rains.
This week, Mr. Branyon appeared in State Court with about 25 other
complainants to try to get class certification and to add more than 40
developers and construction companies as defendants. Circuit Judge
Larry Patterson allowed the addition of the developers as defendants,
but did not rule on the class action status until more evidence is
brought forward. He said he will rule on the issue at a later time.
He states "It appears there is potential.It could be in the best
interest of justice to resolve this as one lawsuit." For a suit to be
become a class action, it must be proven that:
(1) there are too many plaintiffs involved to have separate
trials;
(2) the plaintiffs have similar complaints;
(3) the defendants' response is similar for all the plaintiffs;
and
(4) damages exceed $100 for each plaintiff.
Rodney Brown, Mr. Branyon's attorney, said this is a perfect example of
a class suit. "There are a tremendous amount of people affected by
this," he said, according to a Greenville Online report. "The facts
will remain throughout."
John Devlin, the attorney representing the County, countered that, to
date, there is no evidence of other people being involved in the suit
as well as no proof of common interest among the group.
VIVENDI UNIVERSAL: Judge Approves $4.75M Settlement in Royalties Suit
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Superior Court Judge Victoria Gerrard Chaney granted preliminary
approval to a class action settlement proposed by Vivendi Universal
Inc.'s music branch, awarding a total of $4.75 million to approximately
300 musicians and their families.
The suit, the first of its kind, alleges that the Company's music
branch cheated the plaintiffs of royalties dating back to the 1940s.
Most of the artists in the suits are elderly or have died. Other
plaintiffs include the heirs of the late Billie Holiday, Patsy Cline,
Ella Fitzgerald and Louie Armstrong.
Lead plaintiff and singer, Peggy Lee claimed that the Universal Music
Group failed to pay her and other musicians millions of dollars by
underreporting sales figures and overcharging for services, according
to an Associated Press report. Ms. Lee was signed to the Decca label
in the mid-1950s. The company acquired Lee's contract through a series
of mergers. The case hinged on a clause in her pre-video-era contract
barring the sale of "transcriptions" of the movie without her approval.
Under the settlement, the Company will establish a trust fund to pay
musicians or their heirs who agree to accept the settlement, according
to court documents. The Company also admitted no wrongdoing in the
settlement.
Judge Chaney called the agreement "reasonable and fair." A final
settlement could be reached by early May after a hearing is held to
determine whether anyone objects.
Securities Fraud
ALLSTATE INSURANCE: Settles For $59M Damaged Vehicles Insurance Suit
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The Georgia State Court preliminarily approved a settlement between
Allstate Insurance Company and plaintiffs in the suit filed by a class
of persons that:
(1) are insured under a Georgia personal lines automobile
insurance policy issued by the Company or its subsidiary
Allstate Indemnity Company who reported valid property damage
claims for vehicle damage under that policy's collision or
comprehensive coverages, which loss occurred between January
18, 1995 and December 5, 2001; and
(2) are insured under a Georgia personal lines automobile
insurance policy issued by the Company or its subsidiary
Allstate Indemnity Company who reported valid property damage
claims for vehicle damage under that policy's uninsured
motorist coverage, which loss occurred between January 18,
1997 and December 5, 2001, but excluding claims resulting in
total losses, claims related to non-owned or temporary
substitute vehicles, claims limited to glass repair or
replacement, tire replacement, sound systems repair or
replacement, or any combination of the three, claims confined
to emergency roadside assistance or towing, claims in which
the policyholder was paid for diminished value in addition to
the cost of repair, and claims identified as closed without
payment by both Companies, provided, however, persons
otherwise satisfying the class definition and who have insured
leased vehicles are included in the settlement class.
In light of a recent Georgia Supreme Court ruling, and the trial
court's order certifying this as a class action, the parties agree that
settlement is in the best interest of all the Company's policyholders
due to the uncertainty, risks, and costs associated with continuing
this litigation. The Court's orders and this settlement are limited to
claims made by Georgia policyholders under Georgia law.
Upon final approval of the settlement, the Company will create a
settlement fund of $59,076,410 to pay class members diminished value
settlement amounts. The settlement provides that each settling Georgia
policyholder, who has not already received a payment for diminished
value, will each receive approximately $150-$215 per claim.
By February 6, 2002, the Company will mail notice to class members, who
will have until March 8, 2002, to opt out of the class. If they choose
not to opt out, they will be entitled to diminished value settlement
payments from the Company and will be bound by the settlement. Those
who have objections to the settlement must file those objections by
March 1, 2002. The Court has scheduled a fairness hearing for March 15,
2002 at the Muscogee County Courthouse.
For more information, contact Michael Trevino by Phone: 1-847-402-5600
or C. Neal Pope by Phone: 1-706-324-0050 or visit the firm's Website:
http://www.allstate.com
HA-LO INDUSTRIES: Wolf Haldenstein Initiates Securities Suit in N.D. IL
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Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class
action in the United States District Court for the Northern District of
Illinois, Eastern Division on behalf of all purchasers of the
securities of HA-LO Industries Inc. (formerly NYSE: HMK, now OTC:
HMLOQ), between February 18, 1999 and November 23, 2001 inclusive.
The suit names as defendants:
(1) Lou Weisbach, President and CEO until November 1999, Chairman
of the Board,
(2) John R. Kelley Jr., President and CEO from November 1999 until
February 15, 2001,
(3) Marc S. Simon, CEO since February 15, 2001, and
(4) Gregory J. Kilrea, CFO)
The Company has filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code and is not a defendant in this lawsuit.
The suit charges that defendants and the Company violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder by the Securities and Exchange Commission by
making a series of materially false and misleading statements to the
market between February 18, 1999 and November 23, 2001, concerning the
Company's financial performance for the Company's fiscal year 1998,
1999, and 2000 and for the first quarter of 2001.
Moreover, throughout the class period, defendants issued press releases
reporting the Company's quarterly and year-end financial performance,
and filed reports confirming such performance with the United States
Securities and Exchange Commission. These reports positively portrayed
the Company's performance during the class period.
These statements, as alleged in the complaint, were materially false
and misleading because the Company had, throughout the class period,
improperly recognized revenues, thereby inflating its reported sales
and earnings.
In November 2001, the Company issued a press release announcing the
restatement of its previously filed financial statements for the period
1998 to 2000, and that the Company "may also restate its first quarter
2001 Form 10-Q." The restatement would also effectively decrease its
reported class period pretax income by a total of $15 million,
including $1.2 million if that restatement includes the first quarter
of 2001.
For more information, contact Fred Taylor Isquith, Adam J. Levitt,
Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke: By
Mail: 656 West Randolph Street, Suite 500W, Chicago, Illinois 60661 or
270 Madison Avenue, New York, New York 10016. By Phone: 800-575-0735 by
E-mail: classmember@whafh.com or visit the firm's Website:
http://www.whafh.com.All e-mail correspondence should make reference
to HA-LO.
ICG HOLDINGS: Faces Multiple Suits For Securities Act Violations in CO
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ICG Holdings Canada, Inc. faces fourteen class action suits filed in
the United States District Court for the District of Colorado by
various shareholders, against the Company and:
(1) J. Shelby Bryan, former chief executive officer,
(2) John Kane, former president, and
(3) William S. Beans, Jr., former president
The suits uniformly allege violations of Rules 10(b) and 20(a) of the
Securities Exchange Act of 1934. The complaints seek class action
certification for similarly situated shareholders.
The Company expects that the suits will be consolidated and that the
Court will choose a lead plaintiff's counsel. The Company has retained
legal counsel and intends to vigorously defend against these lawsuits.
Additionally, the Company has also tendered these claims to its
insurers. At this time, the claims against the Company have been
stayed pursuant to its filing for bankruptcy.
IMCLONE SYSTEMS: Schatz Nobel Commences Securities Suit in S.D. NY
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Schatz and Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons who purchased stock of ImClone Systems, Inc. (Nasdaq:
IMCL) between June 28, 2001 and December 28, 2001, inclusive.
The suit alleges that ImClone, a biotechnology company, and its top
management misled the investing public during the class period by
misrepresenting the progress made in obtaining FDA approval of Erbitux,
a drug developed to treat colorectal cancer.
Specifically, it is alleged that throughout the class period, the
defendants stated that results of clinical tests for Erbitux exceeded
minimum government standards for new drug approval, that the Company's
application for "fast track" approval from the FDA was in compliance
with all applicable regulations, and that the Company was working
closely with the FDA to ensure speedy approval. Moreover, the
defendants assured investors that the Company would achieve revenues of
$150 million directly from sales of Erbitux in fiscal year 2002 alone.
However, while making these statements to the investing public, a
number of the Company's senior officers were purchasing large amounts
of stock at rock-bottom prices, with low- interest loans from the
Company, most of which were then sold on the same day for a gross
profit approaching $150 million.
Ultimately, following several days of rumors, the Company confessed
after the close of the market on December 28, 2001, that the FDA had
rejected the application for Erbitux for, among other deficiencies, the
failure to include sufficient data showing that Erbitux even worked.
On the next trading day, the share price of the Company's stock, which
speculation had already been driven down 21% from its class period high
of $73.83 per share, closed at $46.46 per share.
For more information, contact Andrew M. Schatz, Patrick A. Klingman or
Wayne T. Boulton by Phone: 800-797-5499 by E-mail: sn06106@aol.com or
visit the firm's Website: http://www.snlaw.net.
INFONET SERVICES: Schatz Hobel Commences Securities Suit in C.D. CA
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Schatz and Nobel PC initiated a securities class action in the United
States District Court for the Central District of California on behalf
of all persons who purchased securities (including common stock and
options) of Infonet Services Corp. (NYSE: IN) between December 16,
1999, and July 31, 2001, inclusive.
The suit alleges that the Company, a provider of international data
communications services to multinational corporations, and its
President and Chief Executive Officer misled the investing public
during the class period by making false or misleading statements
concerning the company's financial condition.
Specifically, the Company was portrayed as a booming company which was
experiencing and would continue to experience rapidly rising sales and
profits on its core products and in its AUCS sales channel. (AUCS was
the company's name for business arising out of its participation in an
AT&T-Unisource Communications Services agreement.) As a result of these
statements, the Company's stock price traded at an artificial class
period high of $32.9375 per share.
However, on July 31, 2001, the Company began to reveal the truth about
its operations announcing results would be below market expectations
due to disappointing results from the Company's European operations and
its AUCS sales channel. The next day, the Company's stock fell 44.70%
to $3.55 per share.
For more information, contact Andrew M. Schatz, Patrick A. Klingman or
Wayne T. Boulton by Phone: 800-797-5499 by E-mail: sn06106@aol.com or
visit the firm's Website: http://www.snlaw.net
INTRAWARE INC.: Will Vigorously Oppose Securities Suit in S.D. NY
-----------------------------------------------------------------
Intraware, Inc. denies the allegations in a securities class action
pending in the United States District Court for the Southern District
of New York, against the Company, certain of its directors and
officers, and its underwriters, alleging violations of federal
securities laws.
The suit, filed on behalf of purchasers of the Company's stock between
February 25, 1999 and December 6, 2000, inclusive, alleges violations
of the Securities Act of 1933 and the Securities Exchange Act of 1934
involving undisclosed compensation to the underwriters and improper
practices by the underwriters.
The Company believes that it is part of the rash of similar complaints
filed against numerous public companies that conducted initial public
offerings of their common stock since the mid-1990s. The suit was
consolidated with the above-mentioned suits for pretrial purposes
before Judge Shira Scheindlin of the US District Court for the Southern
District of New York. Judge Scheindlin has ordered that the time for
all defendants to respond to any complaint be postponed until further
order of the Court.
Intraware has not been required to answer the complaint, and no request
for discovery has been served. The Company, however, believes the
suit is without merit and intends to defend against it vigorously.
PALM INC.: Sued For Breach of Fiduciary Duty Due To Stock Option Plan
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Handheld products maker Palm, Inc. faces a shareholder derivative and
class action lawsuit commenced in January 2001 in California Superior
Court, accusing the Company's Directors of breaching their fiduciary
duties to its stockholders.
The Directors allegedly breached fiduciary duties by not having the
Company's public shareholders approve its 1999 director stock option
plan. 3Com Corporation, the Company's sole shareholder at the time, was
the one who approved the 1999 director plan prior to its March 2000
initial public offering. The suit further alleges that the Company was
required to seek approval for the plan by shareholders after the
initial public offering.
The plaintiffs filed an amended complaint in November 2001 adding new
defendants and new allegations, including that defendants breached
fiduciary duties by approving the Company's 2001 director stock option
plan and by making misrepresentations in its September 2001 proxy
statement. The suit is currently in discovery. No trial date has been
set.
RICA FOODS: Cauley Geller Commences Securities Suit in S.D. New York
--------------------------------------------------------------------
Cauley Geller Bowman & Coates LLP initiated a securities class action
in the United States District Court for the Southern District of
Florida, Miami Division on behalf of purchasers of Rica Foods, Inc.
(Amex: RCF) common stock during the period between January 16, 2001 and
December 28, 2001, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the federal securities laws. The suit alleges, among
other things, that throughout the class period, defendants filed
documents with the US Securities and Exchange Commission which failed
to disclose that the Company was not in compliance with the credit
agreement entered into with Pacific Life Insurance Company on January
16, 2001.
The suit charges that defendants knew that the Company's SEC filings
were false and misleading, and further alleges that defendants'
misrepresentations caused the price of the Company's common stock to be
artificially inflated throughout the class period.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Website: http://www.classlawyer.com
RICKEL HOME: $3M Settlement Reached in Securities Suit in S.D. NY
------------------------------------------------------------------
Rabin and Peckel LLP announces a settlement has been reached in the
class action filed against Rickel Home Centers, Inc. in the United
States District Court for the Southern District of New York on behalf
of purchasers of the Company's units in the offering that closed on
November 4,1994 and in the secondary market on January 10, 1996.
A fairness hearing will be held on April 10, 2002 in the United Stated
District Court for the Southern District of New York, before the
Honorable Deborah A. Batts. The hearing will determine whether a
proposed settlement, pursuant to which defendants and/or their insurers
will deposit the sum of $3,000,000 in cash into an escrow account on or
before February 1, 2002, should be approved by the Court as fair,
reasonable and adequate to the class in the litigation, and to consider
a request by plaintiffs' counsel for attorneys' fees in an amount up to
37% of the settlement fund and reimbursement of expenses in an amount
not to exceed $300,000.
For more information, contact Cecile Paulino by Mail: FRG Information
Systems, Inc.Rickel Securities Litigation Settlement Fund P.O. Box 4059
Grand Central Station New York, NY 10163 by Phone: 212-490-3550 or by
Fax: 212-490-5709.
SIMON TRANSPORTATION: Appeal on Suit Dismissal To Be Heard January 15
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The 10th Circuit Court of Appeals, on January 15,2002, will hear oral
arguments on the appeal of the plaintiffs in the securities class
action against Simon Transportation Services, Inc.
The suit was commenced against the Company and one of its officers and
directors, and certain of its former officers and directors, alleging
that the defendants made material misrepresentations and omissions
during the period February 13, 1997 through April 2, 1998 in violation
of Sections 11, 12(2) and 15 of the Securities Act of 1933 and Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.
In September 2000, the District Court dismissed the case with
prejudice. The Company stated, in a disclosure to the Securities and
Exchange Commission, that it intends to vigorously defend this action.
TAKE-TWO INTERACTIVE: Schatz Nobel Lodges Securities Suit in S.D. NY
--------------------------------------------------------------------
Schatz and Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons who purchased stock of Take-Two Interactive Software,
Inc. (Nasdaq: TTWO) between February 24, 2000 and December 17, 2001,
inclusive.
The suit alleges that the Company, which develops and distributes video
games, and several of its senior officers misled the investing public
during the class period by violating generally accepted accounting
principles and improperly recognizing revenues on sales of products
that were subsequently returned and/or purchased by the Company.
The suit also alleges that, although unknown to investors during the
class period, the Company had received requests for information from
the SEC in May and August, 2001, regarding the Company's accounting for
impaired assets, one-time charges, and its accounts receivables.
On December 17, 2001, Take-Two announced that it would restate its
previously-filed financial statements for its fiscal year ended October
31, 2000 and the first three quarters of 2001 because of improper
revenue recognition. The reported amount of the restatement for fiscal
year 2000 would decrease reported net sales by $12.0 million to $15.0
million, and by $9.5 million for the first three quarters of fiscal
year 2001.
On this news, trading in Company stock, which had dropped the previous
trading day from $15.05 to $10.33 per share on rumors of the
restatement, was halted. The last reported trade of $10.33 was well
below the class period high of $23.95 per share.
For more information, contact Andrew M. Schatz, Patrick A. Klingman or
Wayne T. Boulton by Phone: 800-797-5499 by E-mail: sn06106@aol.com or
visit the firm's Website: http://www.snlaw.net.
USA NETWORKS: Faces Consolidated Suit For Securities Violations in NY
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USA Networks, Inc. faces a consolidated class action pending in the
United States District Court for the Southern District of New York
against the Company, certain of its officers and directors and its
underwriters, for alleged federal securities violations.
The consolidated suit sprang from four similar class actions commenced
in June 2001 on behalf of purchasers of the Company's stock between
November 9,1999 and December 6,2000. The suit alleges violations of
Section 11 of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934.
Specifically, the suit alleges that the Company's prospectus was false
or misleading in that it failed to disclose:
(1) that the underwriters allegedly were paid excessive
commissions by certain customers in return for receiving
shares in the IPO; and
(2) that certain of the underwriters' customers allegedly agreed
to purchase additional shares of the Company in the
aftermarket in return for an allocation of shares in the IPO.
The plaintiffs further contend that as a result of those omissions from
the prospectus, the price of the Company's stock was artificially
inflated, and that the defendants are liable for unspecified damages to
those persons who purchased stock during that period.
In August 2001, these actions were consolidated before a single judge
along with cases brought against numerous other issuers and their
underwriters that make similar allegations involving the IPO's of those
issuers. The consolidation was for purposes of pretrial motions and
discovery only. In a disclosure to the Securities and Exchange
Commission, the Company states its intention to defend this matter
vigorously.
WILLAMETTE INDUSTRIES: Request To Stop Georgia Pacific Merger Withdrawn
-----------------------------------------------------------------------
Stockholders of Willamette Industries Inc. withdrew a request for a
temporary restraining order on the impending merger of the Company with
Georgia Pacific Corporation, Associated Press reports.
The Company was contemplating the merger to battle a $6 billion hostile
takeover bid by Weyerhauser Corporation that began in 2000. According
to former Company Chairman (now Weyerhauser Chairman) Steven Rogel, any
deal with Georgia-Pacific would end the takeover bid.
The request for a TRO was filed by Milberg Weiss Bershad Hynes and
Lerach, who said in a statement that it filed the injunction request to
temporarily prevent the Willamette board of directors "and anyone
acting in concert with them from entering into a business combination
with Georgia-Pacific."
The firm filed documents in support of the request, including a
solicitation and recommendation statement the Company filed Nov. 27
with the Securities and Exchange Commission. The statement, signed by
CEO Duane McDougall, indicated that the Company had outperformed
Weyerhaeuser in a number of areas, including a better return on
invested capital, average equity and average assets, according to an
Associated Press report. The statement also detailed the hostile
takeover attempt and accused Weyerhaeuser of dragging its feet and
refusing to negotiate a higher price based on the comparative financial
data.
US District Judge Anna Brown scheduled a Thursday hearing on the
injunction request. The Company has not made any statement on the
withdrawal of the request.
*********
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 2002. All rights reserved. ISSN 1525-2272.
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