/raid1/www/Hosts/bankrupt/CAR_Public/020226.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, February 26, 2002, Vol. 4, No. 40
Headlines
ALLSTATE INSURANCE: Georgian Files Suit After Unauthorized Credit Check
CAMBIOR INC.: Guyana Court Dismiss $100M Suit Over Omai Dam Failure
CHANNEL FREIGHT: Freight Forwarders Threaten To Sue Over Price-Fixing
CUBA DETAINEES: CA Court Throws Out Suit Alleging Illegal Detention
DENTAL ASSOCIATION: Sued For Not Revealing Mercury in Dental Fillings
FIRST UNION: Court Allows Ohio Investors To Proceed With Fraud Suit
FLEETWOOD ENTERPRISES: Settles Labor Act Violations Suit For $7.35M
GIANT FOODS: Judge Throws Out Racial Bias Suit For Lack of Evidence
HOUSEHOLD INTERNATIONAL: To Defend Against Fraud Suit in California
INDIANA: Former Floyd County Inmates Sue For "Illegal" Strip Searches
KINDER MORGAN: Natural Gas Producers Commence Fraud Suit in Kansas
MONSANTO COMPANY: Residents Win Verdict Over Firm's Pollution Of Town
NEW JERSEY: Plaintiffs Withdraw Suit against AD/HD Advocacy Group in NJ
OLD LINE: State Insurance Department To Participate in Consumer Suit
RAND CORPORATION: Court Certifies Class in Gender Bias Suit in DC
REGENCE BLUESHIELD: Settlement Hinges on Class Certification, Approval
SOTHEBY'S INC.: Denies Price-Fixing Charges in Multi-Million-Pound Suit
SOUTH AFRICA: Anti-Arms Body To Seek Default Judgment Against State
SOUTH CAROLINA: Utility Says Racial Discrimination Suit Is "Unfounded"
STATE INDUSTRIES: Awaits Court Decision Regarding Settlement Agreement
SULZER MEDICA: Court Grants More Time To Shape Implant Settlement
WAL-MART CORPORATION: Workers File Suit For Overtime Wage "Scheme"
*West Virginia Legislators Lobby For Bill To Limit Insurance Suits
Securities Fraud
ADVANCED SWITCHING: Fruchter Twersky Lodges Securities Suit in E.D. VA
ADVANCED SWITCHING: Milberg Weiss Initiates Securities Suit in E.D. VA
ADVANCED SWITCHING: Brian Felgoise Initiates Securities Suit in E.D. VA
BIOPURE CORPORATION: Wechsler Harwood Commences Securiteis Suit in MA
ELAN CORPORATION: Kaplan Fox Commences Securities Suit in S.D. NY
ELAN CORPORATION: Milberg Weiss Commences Securities Suit in S.D. CA
GLOBAL CROSSING: Finkelstein Thompson Commences Securities Suit in DC
GLOBAL CROSSING: Kaplan Fox Commences Securities Suit in S.D. New York
IMCLONE SYSTEMS: Kaplan Fox Expands Class Period in Suit in S.D. NY
JP MORGAN: Federal Reserve Bank Probes Firm's Role in Enron Collapse
JP MORGAN: Wolf Haldenstein Commences Securities Suit in S.D. New York
KMART CORPORATION: Cauley Geller Commences Securities Suit in E.D. MI
KMART CORPORATION: Schiffrin Barroway Files Securities Suit in E.D. MI
NATIONAL GOLF: Schatz Nobel Lodges Securities Suit in C.D. California
NETPLIANCE INC.: Bernstein Liebhard Lodges Securities Suit in S.D. NY
PNC FINANCIAL: Kaplan Fox Lodges Securities Suit in S.D. Pennsylvania
SYNSORB BIOTECH: Wechsler Harwood Commences Securities Suit in S.D. NY
*********
ALLSTATE INSURANCE: Georgian Files Suit After Unauthorized Credit Check
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AllState Insurance Company faces a proposed nationwide class action
filed in the US District Court in Atlanta by Georgia resident Jeanne
Cochran, accusing the Company of conducting unauthorized credit checks
on her son.
The suit alleges that the Company denied Ms. Cochran a home insurance
policy based on the poor credit rating of her son, who was living with
her at the time. Ms. Cochran claims the Company did not ask for her
permission to seek her son's credit report.
Company spokesman Mike Trevino told insure.com that for years the
federal Fair Credit Reporting Act has allowed insurers to obtain the
credit reports of all members of the same household when one member
applies for insurance.
He added that the Company uses credit information to assess the risks
and decide whether to issue an insurance policy in Georgia. Because
both auto and home insurance policies cover all members of the same
household, the Company says it needs to know about all of the risks
involved, and that a person's credit can be used to predict the
likelihood he or she will file an insurance claim.
Trevino further told insure.com "Underwriting insurance is a
permissible purpose for accessing a credit report without consent.
Everyone has been able to do this for years."
CAMBIOR INC.: Guyana Court Dismiss $100M Suit Over Omai Dam Failure
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The High Court of the Supreme Court of Judicature of Guyana dismissed
the US$ 100 million class action against Cambior Inc. (TSE:CBJ.)
(AMEX:CBJ) and its 65%-owned subsidiary OMAI Gold Mines Ltd. US$100 in
connection with the Omai tailings dam failure seven years ago.
In an order released on February 12, 2002, Justice Winston Moore
ordered that the action be thrown out for the plaintiffs' repeated
failure to file an affidavit.
OMAI Gold Mines Ltd. has honored its duties and obligation to the
residents of the Essequibo River who had filed 522 writs representing
881 claimants by settling over 95% of the claims filed for losses or
damages. Remaining claims have not yet been paid because the claimants
have either not turned up or cannot be located.
For more information, contact Robert LaValliere, by Phone:
450-677-0040, ext. 3314 by Fax: 450-677-3382 by E-mail:
info@cambior.com or visit the firm's Web site: http://www.cambior.com
CHANNEL FREIGHT: Freight Forwarders Threaten To Sue Over Price-Fixing
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UK freight forwarders are threatening a class action against
Eurotunnel, SeaFrance and P&O Stena for alleged collusion over cross-
channel freight haulage rates, which have risen about $26 (E30),
Lloyd's List International recently reported.
In a letter to all three operators, Director-General Colin Beaumont of
the British International Freight Association (BIFA) states that "the
key players operating cross-Channel freight services are apparently
colluding over the rates for freight units." He added, "This
accusation is based on almost identical price rises and the clear
signal from each of you that there is no negotiation on volume traffic.
Our members are proposing they write to the Office of Fair Trading, but
before they do so, I would welcome your comments."
All three operators have denied the price-fixing allegations and made
the same defense by stating that "in real terms" Channel haulage rates
are still lower than (in) 1994, when the Channel opened for business.
P&O Stena said that it informed its customers of a plan to introduce a
"non-negotiable" Euro30 rate increase per lorry from January 1.
"Our letter, dated October 1, was the first to be sent out to
customers. I cannot comment on what the competition did after that,"
said a P&O Stena spokesperson. Eurotunnel indicated last summer that
it would push for higher freight rates on its shuttle services. "We
are charging a realistic rate for a realistic service," said a
Eurotunnel spokesman.
BIFA argues that the similarity of the rate increases, just E2
separates all three increases, is indicative of the cooperation. Mr.
Beaumont added, "All three operators have refused to negotiate. The
normal practice is to negotiate on volume traffic, but this is no
longer the case. Why?"
At this stage, the BIFA members are not ready to go public with their
complaints, but Mr. Beaumont remains confident about a class action in
his comments to the Office of Fair Trading. "We are talking about some
big names who buy cross-channel freight services. One company
estimates that the rises will cost an extra $200,000 a year. Some of
the smaller guys are prepared to accept the scenario and lie down. But
there are three or four major companies who will not do so this time."
CUBA DETAINEES: CA Court Throws Out Suit Alleging Illegal Detention
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Los Angeles Federal Court Judge Howard Matz rejected a lawsuit filed by
the families of two Britons and an Australian who were detained in
Guantanamo Bay, Cuba after the September 11 terrorist attacks in the
World Trade Center in New York.
The suit was filed last week, on behalf of 300 persons, including
Australian David Hicks and Britons Asif Iqbal and Shafiq Rasul who were
detained at an open-air prison. The suit alleges that their indefinite
detention without trial violated the US Constitution. An earlier
report in the Class Action Reporter stated that the men have not had
access to lawyers or made any appearance in front of a civilian or
military tribunal after being taken into custody. They have also not
been charged with any offense.
The suit, filed on behalf of the detainees' families, alleges the
detention violated both the Constitution and international law, and
seeks a writ of habeas corpus for the detainees. Lawyers for the three
men have asserted their clients were not terrorists or "enemy aliens."
Judge Matz rejected the suit, saying the loose coalition of lawyers,
clergy, journalism professors who filed the suit had no relationship
with the detainees, and said Guantanamo Bay was outside the sovereignty
of the United States.
Attorneys had argued that the Los Angeles civil rights group had failed
to establish a compelling link to the detainees that would allow them
to press claims on the their behalf, according to a Reuters report.
DENTAL ASSOCIATION: Sued For Not Revealing Mercury in Dental Fillings
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The American Dental Association and the Maryland State Dental
Association (MSDA) face a class action filed in Baltimore Circuit
Court, for allegedly failing to inform customers about the use of
mercury in amalgam fillings.
Rosedale, Maryland resident Lisa Hogan filed the suit, alleging that
the defendants misled the customers to believe that amalgam dental
fillings were made of silver, when 50% of the filings are mercury by
weight. The suit also contends that the defendants failed to inform
customers and patients about warnings from filling manufacturers about
using amalgams on people allergic to mercury, pregnant women and young
children. It is alleged that mercury exposure can cause cancer, birth
defects and nerve damage, although research studies have been largely
inconclusive.
According to an Associated Press report, the MSDA is also accused of
threatening to punish dentists who discuss the possible dangers of
mercury fillings with customers. The complaint said the MSDA also
violated the Maryland Consumer Protection Act by "engaging in
fraudulent and deceptive business practices."
Shawn Khorrami, attorney for the plaintiffs, told Associated Press,
"Everyone assumes the ADA knows everything about this.Why is the public
being deprived of legally mandated warnings? You can use high school
chemistry to disprove the premise by which they promote amalgam
safety."
Peter M. Sfikas, Chief Counsel for the American Dental Association,
said he had not seen the suit, but noted that amalgam fillings have
been found to be safe by a number of agencies, including the federal
Food and Drug Administration and the World Health Organization,
according to Associated Press.
FIRST UNION: Court Allows Ohio Investors To Proceed With Fraud Suit
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US District Court Judge Ursula Ungaro-Benages, in Miami, recently
ruled that about 800 investors in Ohio had the right to sue a Florida
bank, First Union National Bank, the Akron Beacon Journal recently
reported. Judge Ungaro-Benages certified the class action brought by
the Ohio investors, which asks for unspecified damages. Florida
attorney Robert C. Gilbert said investors don't have to do anything to
be part of the class action. Letters explaining the case should reach
investors in the next 90 days.
Earlier, in September 2000, the Judge found Eric Bartoli liable for
bilking $35 million from Ohio and Latin American investors through the
sale of fraudulent Cyprus Funds securities and certificates of deposit.
The present class action for civil fraud alleges that bank personnel
knew about the illegal transfers that Mr. Bartoli made and that two
employees advised him on ways to make the transactions without alerting
bank regulators.
Cyprus Funds managers operated out of a lavishly renovated Victorian
house in downtown Doylestown that became something of a local landmark
after Mr. Bartoli disappeared in 1999, just days ahead of investigators
from the US Securities and Exchange Commission. The
agency froze Cyprus assets and locked the doors of three Main Street
businesses the company owned in the Wayne County village.
Court-appointed receiver, Michael Goldberg, subsequently recovered
about $11 million in cash and property. The money was used to repay
investors about 10 percent of the original value of their claims.
Mr. Bartoli's Ohio partners, Douglas Shisler of Doylestown, James Binge
of Jackson Township and Peter Esposito of North Ridgeville, signed
consent decrees in the civil fraud case. No criminal charges have been
filed against the men.
FLEETWOOD ENTERPRISES: Settles Labor Act Violations Suit For $7.35M
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Fleetwood Enterprises, Inc. agreed to settle for US$ 7.35 million a
class action filed by its employees alleging violations of the federal
Fair Labor Standards Act. The suit charged the Company with pressuring
employees to work early in the morning, through breaks and after their
shifts to keep up with production quotas, according to Associated
Press.
Under the settlement, the recreational vehicle manufactures will pay
$7.35 million to almost 3,000 current and former employees who
participated in the suit. Other employees who have worked in the
Company's plants still have the chance to join the suit. The Company
also agreed to prohibit off-the-clock work and modify its rounding
practices under its timekeeping system.
According to an AP report, the Company said it admitted no liability or
wrongdoing. Both sides said it was a fair agreement.
GIANT FOODS: Judge Throws Out Racial Bias Suit For Lack of Evidence
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Federal Judge Frederick J. Motz rejected most of a class action suit
filed by Giant Foods' black warehouse workers, charging the Company
with racial discrimination, including firings, suspensions, public
humiliation and loss of promotions, the New Journal Online reports.
The suit, filed in 1996 by eleven Company employees, told of several
discriminatory practices at the Company - nooses displayed in the
Company's warehouses on four different occasions, racist graffiti on
bathroom and trailers and supervisors making racially offensive
comments.
Judge Motz said in his ruling that the plaintiffs did not have enough
evidence to proceed to trial on most of their claims, although he
conceded that there was clear evidence, "that racial hostility existed
between African-American workers and white workers at the Giant
warehouses from 1980 to the time this suit was initiated in 1996."
Judge Motz rejected the claims of 10 of the workers, and denied class
certification for the suit. However, he did allow to proceed the
claims of plaintiff Gregory Carson, who, he determined, experienced
more intense harassment than the others.
Company attorney Kumiki Gibson hailed the ruling, telling the New
Journal Online, "After almost six years of litigation in the trial
court, Giant is pleased that the case has been resolved in its favor at
this level.The Company has always had faith in the judicial process and
has faith that the case will be justly and finally decided if the case
is appealed."
The other plaintiffs plan to file an appeal. Plaintiffs' attorney Jo
Ann Myles said, "We'll continue to fight these cases until the Fourth
Circuit Court or the Supreme Court says we don't have a case.We also
wanted to send a message to all employers in the Washington area that
they cannot discriminate."
HOUSEHOLD INTERNATIONAL: To Defend Against Fraud Suit in California
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Household International denied the allegations in a class action suit
commenced in the California Superior Court in Alameda County, charging
the Company with deliberately misleading California borrowers into
accepting overpriced loans and erroneously believing they would save
money by consolidating their loans and refinancing, the Chicago Tribune
reports.
The suit, commenced by several borrowers and the national community
group Acorn, was filed on behalf of all California residents who
received secured loans from the Company to consolidate existing debt
during the past four years. The suit could cost the Company more than
$2 billion in refunds and damages.
Company spokeswoman Megan Hayden told the Tribune, "We look forward to
defending their accusation and returning this discussion to the facts
rather than rhetoric.We've been meeting with Acorn for some time about
their concerns about the consumer finance industry's lending practices.
However, our statements have been met with misleading statements and
false accusations."
The Company is the country's largest independent lender catering to
consumers with spotty credit records, making it a target for activist
groups. In January, it agreed to pay $12 million to settle an unrelated
lawsuit from California regulators claiming the Company intentionally
bilked customers by charging excessive fees and prepayment penalties.
INDIANA: Former Floyd County Inmates Sue For "Illegal" Strip Searches
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Negotiations are continuing over how much Floyd County, Indiana will
pay former inmates who were subjected to illegal strip searches between
early 1997 and early 1999, Associated Press recently reported. A
trial had been scheduled to begin last week, but US District Judge
Sarah Evans Barker canceled so she could preside over another case in
Indianapolis. The trial will be rescheduled if lawyers for the county
and former inmates are unable to reach an agreement.
"I think, ultimately, the case can be resolved by a settlement," said
Bruce Brightwell, co-counsel for the former inmates. Judge Barker had
ruled that the jail's former policy of subjecting everyone who was
booked in to routine strip searches for weapons or drugs violated
constitutional protections against unreasonable searches. "It is
undeniable we have a liability in the case," said Floyd County
Commissioner John Reisert.
Initially, Mr. Brightwell and co-counsel Bart Betteau thought as many
as 5,000 to 6,000 former inmates might be covered by the class action.
Judge Barker narrowed the violations in a ruling and now thinks only
1,800 to 2,000 should receive compensation. Payments in that range
would cost the county's insurer $4.1 million to $5.4 million.
Floyd County Sheriff Randy Hubbard stopped applying the policy to non-
violent, minor offenders after the lawsuit was filed.
KINDER MORGAN: Natural Gas Producers Commence Fraud Suit in Kansas
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Kinder Morgan Management LLC faces a class action suit presently
pending in State Court in Stevens County, Kansas filed by natural gas
producers and fee royalty owners, alleging that the Company and 245
other pipeline companies subjected them to systematic natural gas
mismeasurement for more than 25 years.
The suit alleges a conspiracy among those in the pipeline industry to
under-measure natural gas and have asserted joint and several liability
against the defendants. Subsequently, one of the defendants removed the
action to the United States District Court for the District of Kansas.
Thereafter, the Company filed a motion with the Judicial Panel for
Multidistrict Litigation to consolidate this action for pretrial
purposes with the Grynberg False Claim Act cases, pending in the United
States District Court, District of Colorado, because of common factual
questions. In April 2000, the JPML ordered that this case be
consolidated with the Grynberg federal False Claims Act cases.
However, in January 2001, the Federal District Court of Wyoming issued
an oral ruling remanding the case back to Kansas State Court.
A case management conference recently occurred in the State Court, and
a briefing schedule was established for preliminary matters. Personal
jurisdiction discovery has commenced, but merits discovery has not
started.
The Company believes that it has meritorious defenses to all of these
actions, that it has established an adequate reserve to cover potential
liability, and that these matters will not have a material adverse
effect on its business, financial position or results of operations.
MONSANTO COMPANY: Residents Win Verdict Over Firm's Pollution Of Town
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A jury in Alabama's Circuit Court decided recently that the Monsanto
Company, which made toxic chemicals in Anniston, Alabama, for 40 years,
was responsible for polluting the town, The New York Times reported
recently.
In finding the Company liable for negligence, the jury agreed with the
16 residents' claims that the chemicals damaged their property and led
to emotional distress. Although the jury did not determine the amount
of damages the Company would have to pay, the verdict does open the
door for millions of dollars of claims by Anniston residents that they
were harmed by the presence of polychlorinated biphenyls, or PCBs, in
the soil around the city. Judge Joel Laird said he would later
announce a timetable for the damages phase of the proceedings.
Other residents' claims are also proceeding in separate state trials,
and 15,000 residents are planning to pursue a class action in Federal
Court. The Company has paid more than $80 million in previous court
settlements, but this was the first jury verdict finding the Company
responsible for contamination.
"This is just one battle in a war, but it's nice to have finally won a
battle," said David B. Baker, the President of Community Against
Pollution, a local health and environmental group. "Next, we'll find
out what Monsanto will have to pay for what they did."
After 40 years of making PCBs as an electrical insulator, the Company
shut down its production of the chemicals in 1971, eight years before
the federal government banned PCBs as a possible carcinogen. Over the
years, the Company flushed tens of thousands of pounds of PCBs into
nearby creeks, according to Company documents produced at the trial,
and buried millions of pounds in a hillside landfill. It later spun
off its chemical division into a separate company called Solutia Inc.,
which the jury also found liable along with the Company.
The plaintiffs introduced as evidence, Company memorandums showing that
Monsanto knew by at least the mid-1960s that PCBs were dangerous,
although it did not install pollution controls until 1970. Fish in
nearby creeks died quickly, the evidence showed, and many of the
plaintiffs were found to have PCB levels in their blood 27 times the
national average. Although a clear relationship between the chemicals
and cancer has not been proved, residents of Anniston, a city of about
24,000 people 60 miles east of Birmingham, have said for years that
their cancer rate is abnormally high.
The Companies, which have spent more than $40 million in the
intervening years on cleanup and testing, said they would continue that
work regardless of the verdict. "We are extremely disappointed with
the jury's verdict handed down .holding Solutia Inc. liable in
connection with the plaintiffs' claims linked to property damage," said
John C. Hunter, Solutia Chairman. "We understand that Anniston
residents have concerns about PCBs in their community. As we have said
from the beginning, regardless of the result in this case, we are
committed to deal properly with the impacts of previous PCB production
at our plant."
NEW JERSEY: Plaintiffs Withdraw Suit against AD/HD Advocacy Group in NJ
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The plaintiffs in a New Jersey class action filed against Children and
Adults with Attention-Deficit/Hyperactivity Disorder (CHADD), the
American Psychiatric Association (APA) and Novartis, the manufacturer
of Ritalin, quietly withdrew their lawsuit rather than try to cure the
deficiencies in their complaint identified by New Jersey Superior Court
Judge Charles J. Walsh at a hearing in October, 2001.
The suit was one of five class actions filed in 2000, alleging that
CHADD conspired with Novartis and the APA to improperly broaden the
diagnostic criteria for Attention-Deficit/Hyperactivity Disorder
(AD/HD), thereby increasing Ritalin sales.
The plaintiffs voluntarily dismissed three of those lawsuits. Federal
court judges dismissed the other two, after hearings on motions to
dismiss filed by the defendants. One of the dismissals of a case
pending in California Federal Court was appealed by the plaintiffs and
will be heard in March 2002.
In March 2001, Judge Rudi Brewster of the United States District Court
in San Diego dismissed the lawsuit filed in his court, finding that the
plaintiffs failed to set forth any allegations to support their claims.
Oral argument on the plaintiffs' appeal of Judge Brewster's dismissal
is scheduled for March 6, 2002, in the United States District Court for
the Ninth Circuit.
On May 17, 2001, Judge Hilda G. Tagle of the United States District
Court in Brownsville, Texas, dismissed the lawsuit pending in her
court, also finding that the plaintiffs in the Texas case had failed to
come forward with even the most basic information to support their
conspiracy allegations. The Texas plaintiffs did not appeal that
dismissal.
On July 3, 2001, the plaintiffs in a similar action filed in Florida
federal court quietly withdrew their lawsuit completely. On August 16,
2001, the plaintiffs in Puerto Rico withdrew their complaint. Among
other claims, plaintiffs alleged unspecified harm from Ritalin after
receiving information from the CHADD website in 1993. CHADD had no
website until 1995.
"I am not surprised that the New Jersey plaintiffs chose to dismiss
their lawsuit rather than try to cure the problems noted by Judge
Walsh," said Gerald Zingone, legal counsel for CHADD. "Judge Walsh made
it clear that he was highly skeptical of plaintiffs' allegations of
conspiracy, and he also expressed concern that the plaintiffs' lawsuit
was hampering CHADD's first amendment right to speak freely concerning
Attention-Deficit/Hyperactivity Disorder and its treatment."
"The baseless claims against CHADD through these lawsuits have
not for one minute deterred us from our mission of serving
individuals with AD/HD," said E. Clarke Ross, CHADD Chief Executive
Officer. "Now, more than ever, we stand in an even stronger position
to share with the public the evidence-based, science-based information
so central to CHADD's mission."
OLD LINE: State Insurance Department To Participate in Consumer Suit
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The Ohio Insurance Department has asked a New Mexico state court to
allow it to intervene in the class action suit against Old Line Life
Insurance Company of America, to ensure that the court hearing will not
have jurisdiction over the state laws and regulations, the Cincinnati
Business Journal reports.
The suit was filed to challenge additional fees charged by insurance
companies to consumers who pay their premiums in installments. The
Department said it wants to intervene in the suit, because it might
lead to higher insurance costs for Ohio consumers.
State Insurance Director, Lee Covington, stated, "The Ohio Department
of Insurance has been given the responsibility to protect Ohio
insurance policyholders and to address their concerns.I am
fundamentally against allowing a court in New Mexico or any other state
to make policy that will affect Ohio insurers and insurance consumers."
RAND CORPORATION: Court Certifies Class in Gender Bias Suit in DC
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Federal Judge Richard Roberts authorized the plaintiffs in a gender
discrimination case to prosecute their claims against the prominent
think-tank RAND Corporation on behalf of a class of current and former
female employees, women professionals, primarily in research positions.
The suit, pending in the US District Court for the District of
Columbia, alleges that the Company, with offices in Washington and
Santa Monica, systematically paid women thousands of dollars less per
year than men in similar positions with similar qualifications.
Michael Lieder, a partner at the plaintiffs' law firm Sprenger & Lang,
stated, "We believe that RAND flouted the gender discrimination laws of
the federal government with which it has a virtually symbiotic
relationship. There is a revolving door between RAND and the top levels
of the executive branch, including Defense Secretary Donald Rumsfeld,
and almost all of RAND's revenue comes from contracts with the federal
government.An institution that plays such a strong role in shaping
public policy should have an especially strong obligation to comply
with this country's laws."
The suit began in November 1996, when three women filed their complaint
in Federal Court. The women supported their class certification motion,
which was submitted in February 1998, with statistical evidence
compiled by an expert and derived from the Company's own records. They
also provided evidence concerning Company policies relevant to its pay
decisions, and anecdotal information concerning the impact of the
alleged pay discrimination on the plaintiffs and other current and
former employees.
For more information, contact Michael Lieder by Phone: 202-772-1159 or
301-938-8668 (mobile) or visit the firm's Web site:
http://www.spengerlang.com
REGENCE BLUESHIELD: Settlement Hinges on Class Certification, Approval
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Regence BlueShield has agreed to settle a class action filed last week
in the US District Court in Seattle, Washington, on behalf of patients
who paid for surgery themselves during the first half of 2000, after
several surgeon groups refused the Company's rates, according to the
Seattle Times.
Under the settlement, the Company will reimburse the plaintiffs for
services meeting conditions set out in the settlement. The services
must meet criteria justifying use of an out-of-network physician, and
reimbursement will be made at 2000 plan rates, not necessarily what
patients paid, Jodi Coffee, Company spokeswoman, told the Times.
Services by these surgical groups are covered under the settlement:
(1) Puget Sound Orthopedic Physicians,
(2) Orthopedic Consultants of Washington,
(3) Surgical Associates of Washington,
(4) Seattle Neurosurgery,
(5) Orthopedics International,
(6) Neurosurgical Consultants of Washington, and
(7) the Seattle Orthopedic and Fracture Clinic.
The Court must certify the lawsuit as a class action and approve the
settlement for it to go into effect. After that, the Company and the
law firm will identify and notify prospective members of the class.
SOTHEBY'S INC.: Denies Price-Fixing Charges in Multi-Million-Pound Suit
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Auction House Sotheby's, Inc. has accused the British law firm Class
Law, which has mounted a multi-million-pound class action against it
over an alleged price-fixing cartel, and of calculating its figures on
the back of an envelope, among other things, The Times of London
recently reported. The British legal action comes after a $512 million
(Pounds 358 million) compensation payment made by the two auction
houses last year to settle an American class action.
Robin Woodhead, Chief Executive of Sotheby's Europe and Asia, said of
the British suit, "People are completely mistaken if they believe that
U.S. settlements are relevant. They are not, because of differences in
the European and US markets. There was no meaningful change in
European vendors' commission rates. There is no case to answer on
buyer's premium, as concluded by the US Department of Justice, and
there is no triple damages provision in English law. I ask, where have
they got their figures from? They have no conceivable basis in Europe.
This looks like the back of an envelope calculation made on the back of
the wrong envelope."
Stephen Alexander, a partner at Class Law, said, "The American case
settled for $500 million. The London art market is not that much
smaller than New York's." Class Law is planning to demand hundreds of
millions of pounds in compensation for people who bought and sold
objects in Great Britain in the mid-1990s, the period in which
Sotheby's and rival auction house, Christie's, are alleged to have
colluded over commission paid by their clients. The London solicitors
claim to have been contacted by more than 1,000 collectors and dealers
in the week since officially taking on the case. Leading dealers,
however, say that they have yet to hear of anyone intending to take
legal action.
London galleries approached by The Times recently said they did not
know anyone who was pursuing the case, as to do so would only harm the
London art market because galleries and auction houses feed off each
other.
SOUTH AFRICA: Anti-Arms Body To Seek Default Judgment Against State
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An anti-arms body said recently that it will seek a default judgment
against the government of South Africa in the Cape High Court if the
State does not file, by March 5, opposing affidavits to the
organization's application that South Africa scrap a multi-billion-rand
arms deal, SAPA (South African Press Association) reported recently.
The South African branch of the organization, Economists Allied for
Arms Reduction (ECAAR), represented by its South African Chairman,
anti-arms activist Terry Crawford Browne, launched a class action on
November 21, on behalf of "all poor South Africans."
The lawsuit is seeking an order declaring the government's
controversial arms deal null and void, and that all related foreign
agreements be set aside. The government has said that it intends to
oppose the suit, but Finance Minister Trevor Manuel asked for an
extension for filing the opposing affidavits, which ECAAR agreed to
until March 5.
ECAAR, in a statement, said that "continued failure of the minister to
file his opposing affidavits by March 5 will lead to an application to
the Judge President of the Cape High Court on March 6 for a court date
for a judgment by default. The lawsuit claims that the deal is
"strategically, economically and financially irrational, and thus
constitutionally unlawful." Mr. Crawford-Browne argues that there is
no foreign military threat to the country and that the issue of poverty
demands priority over military spending.
The price of the deal to buy submarines, fighter aircraft, fighter
trainer aircraft, helicopters and corvettes was originally was set at
R30.3-billion, but in a recent budget speech the Finance Minister
Manuel said this amount had increased to an estimated R52.7-billion due
to the depreciation of the rand. ECAAR projects the final cost will
run close to R115 billion.
In its court application, ECAAR said that when parliament approved the
defense review, in 1998, recommending the arms purchases, it never
agreed to loans or borrowings as the means of financing the purchases.
It was therefore unlawful for the Executive to approve the loans
without a resolution from Parliament, the lawsuit argues.
ECAAR further charges that the government is trying to stall the court
action. "Quite plainly, the government is rattled by the
constitutional implications of ECAAR's [attempt] to cancel the arms
deal."
SOUTH CAROLINA: Utility Says Racial Discrimination Suit Is "Unfounded"
----------------------------------------------------------------------
A racial discrimination lawsuit brought by eight black, former utility-
workers against South Carolina Electric & Gas Corporation (SCE&G)
should be dismissed because the charges are vague and unfounded, the
Utility asserted recently in its court filings. The lawsuit includes
SCE&G's corporate parent, SCANA Corporation, according to The State
(Columbia, SC). No hearing date has been set.
The suit, which seeks class action status, was filed in late January in
the US District Court for the District of South Carolina, Aiken
Division, and charges SCE&G with denying the plaintiffs raises and
promotions and of ignoring racial insults made by white co-workers.
The eight black workers said they were subjected to racial pranks,
including mock hanging nooses, and were held back in career
advancement.
In its 20-page reply, SCE&G asked the Court to dismiss the various
charges against it and hold the plaintiffs responsible for court costs.
Its attorneys said the charges of racial discrimination were vague and
unspecified. They also said the eight plaintiffs lacked the legal
standing to represent all the potential members of a class action.
The reply said as well that SCE&G fully investigated all claims of
racial pranks and punished the offenders, and denies it ever
disregarded the black workers' claims of unlawful discrimination,
severe harassment and hostile work environment. Should the case go to
court, the Company's attorneys demand a jury trial.
Attorneys from the Columbia law firm of Nelson Mullins Riley
Scarborough LLP are representing SCE&G. The law firm of Gergel Nickles
& Solomon PA, also of Columbia, is representing the eight plaintiffs.
STATE INDUSTRIES: Awaits Court Decision Regarding Settlement Agreement
----------------------------------------------------------------------
State Industries, Inc. faces three class actions pending since December
2001, in state courts in Texas, California and Alabama, with plaintiffs
claiming that water heaters they purchased from the Company were
defective, causing them to incur expenses for repair, replacement
or property damages. The Company stopped manufacturing this type of
water heater in 1999.
The Texas Trial Court granted class certification to the suit in 1999.
Subsequently, State and the class representatives entered into a
settlement agreement, which provided compensation for the class
members. As a result of a class member's objection to the settlement,
the Appellate Court, in reviewing the certification of the class and
the objection to the settlement, overruled the Trial Court and in 2001
ordered the de-certification of the class action. The Texas Supreme
Court affirmed the Appellate Court decision.
The Company filed a separate lawsuit, which is pending in the Federal
District Court in Dallas, Texas against the class representatives, and
wants the Court to declare that the Company has no obligation under the
settlement agreement.
The Company is vigorously contesting all of the claims in the three
lawsuits, and believes that, were there to be an adverse outcome with
these lawsuits, it would not be material to its financial condition.
SULZER MEDICA: Court Grants More Time To Shape Implant Settlement
-----------------------------------------------------------------
Lawyers for Sulzer Medica AG, and patients suing the orthopedics
company over faulty implants, recently won another extension to further
craft the details of the Company's $1 billion class action settlement
offer, the Austin American-Statesman recently reported.
US District Court Judge Kathleen O'Malley agreed to give both sides
more time to negotiate, when the Company, instead of filing details of
the settlement with the District Court in Cleveland, asked for an
extension. Judge O'Malley set March 8 as the deadline for filing the
final proposed settlement.
Sulzer, and lawyers representing thousands of Sulzer patients who
received faulty hip and knee implants, made in the Company's North
Austin plant agreed to the outline of a settlement on February l.
Details of the agreement, however, including how much money each
patient will receive and when, as well as lawyers fees, still need to
be hammered out by the parties. Once that settlement has been filed on
March 8, it will be mailed to all patients who received a faulty
implant.
WAL-MART CORPORATION: Workers File Suit For Overtime Wage "Scheme"
------------------------------------------------------------------
Retail giant Wal-Mart Corporation faces another suit filed by two of
its former employees in the US District Court in Oklahoma accusing the
Company of forcing workers to put in extra hours without pay,
Associated Press reports.
The suit, filed on behalf of workers in 85 stores around Oklahoma,
names as defendants the Company, Sam's Club and its managers. The suit
accused the Company of instituting a "clandestine scheme" by failing to
properly pay workers allegedly assigning tasks that can't be completed
within a shift, and then pressuring employees to work off the clock and
during breaks to complete the job.
Company spokesman Tom Williams told Associated Press he had not seen
the lawsuit but the allegations "would appear to be incorrect." He
added, "The guiding rule for our Company is respect for the
individual."
*West Virginia Legislators Lobby For Bill To Limit Insurance Suits
------------------------------------------------------------------
Two class action lawsuits pending in a West Virginia State court have
resulted in a struggle in the State's Legislature, according to a
recent report by the Charleston Gazette. The class actions against
State Farm and Nationwide Insurance companies have struck fear in the
heart of the insurance industry. Fear that it may have to pay refunds
on policies dating back to 1979.
The conflict stems from a State Supreme Court decision in 2000, in the
case titled Mitchell v. Broadnax, in which the Court essentially held
that exclusions in coverage were void without an adjustment in premiums
for less coverage. This decision is the basis upon which the
plaintiffs in the two class actions rely.
The result has been an influx of lobbyists to the State's Legislature,
seeking legislation designed to weaken the effects of the Broadnax
decision. One of the bills before a House select committee would
require policyholders challenging their premiums on auto insurance
coverage, for example, to file a complaint with the State Insurance
Commissioner and follow an administrative procedure, which would have
to be exhausted before they could proceed to Circuit Court and then to
Supreme Court, if necessary.
Responding to members' questions, Committee staff attorney Theresa Kirk
said, if the proposed bill is passed, circuit judges would have to stay
cases before them, and the plaintiffs and their attorneys would have to
exhaust the administrative process. However, she said, they would
still retain their common-law rights to go back to Circuit Court, and
to the Supreme Court.
The proposed bill included several legislative findings:
(1) that actions seeking refunds of premium payments have a
"severe and negative impact upon the insurers.by imposing
wholly unexpected liabilities when insurers have relied upon
the approval of rates and forms by the insurance
commissioner;"
(2) that if insurers are subjected to unexpected liabilities, then
"consumers will be harmed by the resulting premium increases
or the potential that insurers will cease to conduct business
in the State;
The Committee met after a lengthy public hearing in which the insurance
industry paired off against trial lawyers and consumer advocates. Bill
Frame, President of the Trial Lawyers Association, said it was only
fair in insurance, as with any other product, that the
product carry a proportionate and reasonable price tag. "That is all
Broadnax requires." Two speakers recommended a consumer advocate
office be established in the Insurance Commission.
The core of the struggle to enact some form of legislation limiting the
effects of Broadnax revolves around how the legislation
will treat claims by those injured between 1979, when the State created
the existing insurance law, and the date a new law is enacted. The
bill now before the Committee would allow such lawsuits to continue,
though it would mandate that such claimants obtain a ruling from the
State Insurance Commission before going to court.
Insurance lobbyists say allowing thousands of such claims to ultimately
go forward would devastate the insurance industry. "Understand that
what's at risk can be a great deal of money per claim," said Heather
Heiskell Jones, executive director of the West Virginia Insurance
Federation. "That is exposure we do not think we can sustain."
Several delegates said, however, that they agree with trial lawyers
that banning such "retroactive" suits would be clearly
unconstitutional. Committee members said an informal head count showed
a 7-6 vote in favor of allowing the lawsuits. That's a majority
insurers are striving to change.
Securities Fraud
ADVANCED SWITCHING: Fruchter Twersky Lodges Securities Suit in E.D. VA
----------------------------------------------------------------------
Fruchter and Twersky LLP initiated a securities class action in the
United States District Court, Eastern District of Virginia on behalf of
purchasers of the securities of Advanced Switching Communications, Inc.
between October 5, 2000 and February 12, 2002, inclusive, against the
Company and:
(1) Asghar D. Mostafa,
(2) Harry J. D'Andrea,
(3) Robert Ted Enloe III,
(4) Betsy S. Atkins,
(5) Ronald S. Westernik, and
(6) Morgan Stanley Dean Witter
The defendants violated Sections 11 and 15 of the Securities Act of
1933 in connection with the Company's initial public offering (IPO),
and that defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing
a series of material misrepresentations to the market during the class
period, thereby artificially inflating the price of Company securities.
Specifically, the complaint charges that the prospectus for the October
2000 IPO contained material misrepresentations and omissions regarding
the terms of a $24 million contract with Qwest Communications, Inc.,
and the availability and feasibility of products touted in the
prospectus.
Subsequently, on February 5, 2002, Advanced announced that it would be
liquidated, which as alleged in the complaint, was essentially an
admission that it had been a complete failure as a public company.
Finally, on February 12, 2002, the Company announced that a major
customer had asked for a $17 million refund due to a defective product
being shipped.
For more details, contact Jack G. Fruchter by Mail: One Pennsylvania
Plaza, 19th Floor, New York, New York 10119 by Phone: 212-279-5050 by
Fax: 212-279-3655 or by E-mail: JFruchter@FruchterTwersky.com.
ADVANCED SWITCHING: Milberg Weiss Initiates Securities Suit in E.D. VA
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class
action on behalf of purchasers of the securities of Advanced Switching
Communications, Inc. (NASDAQ: ASCX) between October 5, 2000 and
February 12, 2002, inclusive. The suit is pending in the United States
District Court, Eastern District of Virginia, Alexandria Division,
against the Company and:
(1) Asghar D. Mostafa,
(2) Harry J. D'Andrea,
(3) Robert Ted Enloe III,
(4) Betsy S. Atkins,
(5) Ronald S. Westernik, and
(6) Morgan Stanley Dean Witter
The suit alleges that defendants violated Sections 11 and 15 of the
Securities Act of 1933 by issuing a materially false and misleading
prospectus and registration statement in connection with the Company's
initial public offering and that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the class period, thereby
artificially inflating the price of Company securities.
In October 2000, Advanced completed its IPO pursuant to a prospectus in
which it represented that it had signed a $24 million contract with
Qwest Communications, Inc. that its A-4000 product was being shipped
and that its A-4500 product would be available in 2001.
In fact, as alleged in the complaint, at the time of the IPO, the
prospectus concealed that:
(i) the Company's largest customer was having significant problems
with its products;
(ii) another significant customer had informed the Company it was
over-inventoried; and
(iii) the agreement with Qwest was contingent on the Company
complying with terms it could not complete.
Moreover, the Company had not even started on the A-4500 such that it
was impossible that this product would be available in 2001. Later,
subsequent to the IPO, defendants issued statements which asserted that
customers were deploying the A-4000, which, as alleged in the
complaint, did not occur, and that the Company offered DS-O to OC-192
capability which, in fact, it had not been able to offer.
On February 5, 2001, Advanced issued a press release announcing that it
would be liquidated. As alleged in the complaint, this was essentially
an admission that it had been a complete failure as a public company
because the A-4500 was not available in 2001 and the Qwest contract
failed due to Advanced's inability to meet the contract terms.
Finally, on February 12, 2002, the Company announced that a major
customer had asked for a $17 million refund due to a defective product
being shipped.
For more information, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by
Phone: 800-320-5081 by E-mail: AdvancedSwitchingcase@milbergNY.com or
visit the firm's Web site: http://www.milberg.com
ADVANCED SWITCHING: Brian Felgoise Initiates Securities Suit in E.D. VA
-----------------------------------------------------------------------
The Law Offices of Brian M. Felgoise, PC commenced a securities class
action on behalf of shareholders who acquired Advanced Switching
Communications, Inc. (Nasdaq:ASCX) securities between October 5, 2000
and February 12, 2002, inclusive, in the United States District Court
for the Eastern District of Virginia, against the Company and certain
key officers and directors.
The suit charges that defendants violated the federal securities laws
by issuing a series of materially false and misleading statements to
the market throughout the class period which statements had the effect
of artificially inflating the market price of the Company's securities.
For more information, contact Brian M. Felgoise by Mail: 230 South
Broad Street, Suite 404, Philadelphia, Pennsylvania, 19102 by Phone:
215-735-6810 or by E-mail: at BrianFLaw@yahoo.com
BIOPURE CORPORATION: Wechsler Harwood Commences Securiteis Suit in MA
---------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of an institutional investor in the United States
District Court for the District of Massachusetts on behalf of
purchasers of Biopure Corporation (NYSE: BPUR) who publicly traded
securities between May 8, 2001 and December 6, 2001, inclusive.
The suit alleges that the Company, a leading developer, manufacturer
and marketer of a new class of pharmaceuticals it calls "oxygen
therapeutics," and its Chairman and Chief Executive Officer, violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by
issuing materially false and misleading statements concerning trauma,
ischemic, and the likely timing of the Company's filing with the U.S.
Food and Drug Administration (FDA) of its Biologic License Application
(BLA) to market Hemopure, the company's experimental blood substitute
for patients undergoing elective surgery. In particular, defendants led
investors to believe that the BLA was on track to be filed by year-end
2001.
As alleged in the suit, these statements were materially false and
misleading because, by commencement of the class period defendants knew
or recklessly ignored the fact that the data collected from the
Hemopure trial, completed in August 2000, was significantly deficient.
Biopure also allegedly failed to demonstrate that the trial had been
conducted in an "adequate and well-controlled" manner.
As such, plaintiff asserts that the data lacked reliability, thereby
making any application unlikely to be accepted for filing, much less
approved, by the FDA. It is further alleged that defendants also knew
that the FDA would not allow a BLA to be filed where the data lacked
"prima facie" reliability.
On December 6, 2001, the Company announced that it would not file the
Hemopure application until mid-2002, contrary to repeated prior
assertions that the BLA would be filed in 2001. Biopure blamed the
delay on "additional facility and process validation requirements" for
its Cambridge, Massachusetts manufacturing plant. The suit asserts that
this was merely a pretext for the delay, which in fact was occasioned
by the numerous violations of protocols that had occurred throughout
the clinical trial.
As a result of these revelations, the price of Biopure stock fell to
less than $15 per share, well below the $20 plateau above which the
stock traded throughout most of the class period.
For more information, contact Craig Lowther by Mail: 488 Madison
Avenue, 8th Floor New York, New York 10022 by Phone: 877-935-7400 by E-
mail: clowther@whhf.com or visit the firm's Web site:
http://www.whhf.com
ELAN CORPORATION: Kaplan Fox Commences Securities Suit in S.D. NY
-----------------------------------------------------------------
Kaplan Fox and Kilsheimer LLP initiated a securities class action in
the United States District Court for the Southern District of New York
against Elan Corporation PLC. (NYSE:ELN) and certain of the Company's
officers and directors. The suit is brought on behalf of all persons or
entities who purchased the Company's American Depository Shares of Elan
(NYSE:ELN) between April 23, 2001 and January 30, 2002, inclusive.
The suit alleges that the Company and certain of its officers and
directors violated Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934. Specifically, it is alleged that the Company improperly
reported revenues and earnings from entities in which it had joint
ventures and/or invested in.
In a Wall Street Journal article published on January 30, 2002
questioning the propriety of the Company's accounting practices, former
SEC Chief Accountant, Lynn Turner reportedly characterized certain of
the types of accounting practices utilized by the Company referred to
in the article as a "charade."
It is alleged that as a result of the defendants' improper accounting
practices during the class period, the price of Elan ADSs traded at
artificially inflated prices.
For more information, contact Frederic S. Fox, Joel B. Strauss or
Shelley Thompson by Mail: 805 Third Avenue, 22nd Floor, New York, NY
10022 by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by
E-mail: mail@kaplanfox.com
ELAN CORPORATION: Milberg Weiss Commences Securities Suit in S.D. CA
--------------------------------------------------------------------
Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action in the United States District Court for the Southern District of
California on behalf of all persons who purchased or otherwise acquired
the publicly traded securities of Elan Corporation, PLC (NYSE: ELN)
during the period between April 23, 2001 and January 29, 2002,
including persons who acquired Company shares in connection with its
acquisitions of Dura Pharmaceuticals, Inc. and Liposome, Inc.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The suit
alleges that during the class period, defendants reported favorable
financial results for Elan, while concealing expenses through joint
ventures, recognizing income from companies in which the Company had
invested (round-trip revenue) and concealing material related-party
transactions. As a result, its stock traded as high as $65.
Then, on January 30, 2002, The Wall Street Journal published an article
on the Company's accounting entitled, "Research Partnerships Give Irish
Drug Maker Rosy Financial Glow." The article quoted Lynn Turner, a
former chief accountant for the SEC "What's the real substance?. I'm
taking money out of one pocket and putting it in another. That is a
charade." The article went on to describe several transactions in
which Elan had recognized revenue where it had funded the entire
purchase price. On this news, the Company's stock dropped to as low as
$22.40, before closing at $29.25 on volume of 37.1 million shares.
For more details, contact William Lerach, or Darren Robbins by Phone:
800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Web site:
http://www.milberg.com/elan
GLOBAL CROSSING: Finkelstein Thompson Commences Securities Suit in DC
---------------------------------------------------------------------
Finkelstein, Thompson & Loughran initiated a securities class action
against directors and officers of Global Crossing, Ltd. (NYSE: GX) in
the United States District Court for the District of Columbia, on
behalf of all persons who acquired the Company's common stock between
January 2, 2001 and October 4, 2001, inclusive.
The complaint charges that certain of the Company's officers and
directors violated Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 by, among other things:
(1) violating generally accepted accounting principles to
artificially inflate the Company's revenues and earnings; and
(2) issuing false and misleading statements regarding the
Company's past financial performance, the global market for
bandwidth on its fiber optic network and the Company's
anticipated future revenues.
The full extent of Global Crossing's cash flow crisis, and its failure
to compete in the market for customized communications services, began
to emerge on October 4, 2001 with a string of stunning announcements.
As a result of these announcements, the price of Company stock plunged
and the company is now in bankruptcy.
For further details, contact Andrew J. Morganti or Donald J. Enright by
Phone: 866-592-1960, or by E-mail: ajm@ftllaw.com or dje@ftllaw.com.
GLOBAL CROSSING: Kaplan Fox Commences Securities Suit in S.D. New York
----------------------------------------------------------------------
Kaplan Fox and Kilsheimer LLP initiated a securities class action
against certain Global Crossing, Ltd. (NYSE:GX) officers and directors
in the United States District Court for the Southern District of New
York, on behalf of all persons or entities who purchased the common
stock of the Company between January 2, 2001 and October 4, 2001,
inclusive.
The suit charges certain of the Company's officers and directors with
violations of the Securities Exchange Act of 1934. The complaint
alleges, among other things, that during the class period, defendants
improperly recorded revenue on the Company's bandwidth trading
contracts, in violation of generally accepted accounting procedures,
thereby substantially overstating earnings.
Additionally, defendants failed to inform investors of the declining
demand for bandwidth. Furthermore, while Global Crossing's shares were
artificially inflated, certain defendants engaged in heavy insider
trading, selling of a total of more than $135 million of their personal
shares.
On January 22, 2002, the Company declared Chapter 11 bankruptcy, making
it the fourth-largest bankruptcy in US history.
For more information, contact Frederic S. Fox, Joel B. Strauss or
Shelley Thompson by Mail: 805 Third Avenue, 22nd Floor, New York, NY
10022 by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 by E-
mail: mail@kaplanfox.com
IMCLONE SYSTEMS: Kaplan Fox Expands Class Period in Suit in S.D. NY
-------------------------------------------------------------------
Kaplan Fox and Kilsheimer has expanded the class period in the
securities class action filed against ImClone Systems, Inc.
(NASDAQ:IMCL) and certain of its officers and directors in the United
States District Court for the Southern District of New York, to include
purchasers of the Company's stock between May 12, 2001 and January 18,
2002, inclusive. The suit names as defendants the Company and:
(1) Samuel D. Waksal,
(2) Harlan W. Waksal,
(3) Robert F. Goldhammer,
(4) John Mendelsohn,
(5) William R. Miller,
(6) Paul B. Kopperl,
(7) David M. Kies and
(8) Richard Barth
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that during the class period defendants made false and
misleading statements about, among other things:
(i) the progress of the Company's Fast-Track application with the
FDA for approval to market Erbitux, its new "blockbuster" drug
for the treatment of colorectal cancer;
(ii) how closely the Company was working with the FDA to assure
that the Erbitux application would be approved during the
first quarter of 2002; and
(iii) the positive impact that Erbitux's approval would have on the
Company's revenues for fiscal 2002 and 2003.
The complaint alleges that it was false and misleading for defendants
to represent that ImClone had presented the evidence necessary to allow
the FDA to accept its Erbitux application when they knew the
application did not comply with the stated expectations of the FDA.
The Company shocked the market when, on December 28, 2001, it announced
that the FDA had declined to accept its Fast-Track application to
market Erbitux. The price of Company stock fell sharply again on
January 9, 2002, when executives admitted that the Company had
submitted a faulty application for Erbitux.
As a result of defendants' false and misleading statements during the
class period, the price of ImClone stock traded at artificially
inflated prices.
For more information, contact Frederic S. Fox, Jonathan K. Levine or
Christine Fox by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022
by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 by E-mail:
mail@kaplanfox.com or visit the firm's Web site:
http://www.kaplanfox.com
JP MORGAN: Federal Reserve Bank Probes Firm's Role in Enron Collapse
--------------------------------------------------------------------
Reports of the review conducted by the Federal Reserve Bank of New York
on prominent Wall Street bank JP Morgan Chase & Co., and its role in
the Enron Corporation collapse, have sent the bank's shares tumbling to
$27.24, the lowest in three years.
The report, first published in the Wall Street Journal, pinpoints a JP
Morgan offshore entity called Mahonia, which engaged in oil and gas
trade with the fallen energy giant. The report further probes whether
the trades should have been booked as loans, and if the arrangement was
just another questionable investment vehicle devised by Enron, whose
collapse has been linked to sketchy bookkeeping and off-balance-sheet
dealings.
The Associated Press reports that JP Morgan utilized Mahonia to set up
trades in which it would pay Enron for future delivery of gas and oil.
JP Morgan had backed up the deals with surety bonds, which insure that
if the deals weren't completed, the bank would still get paid.
The Enron collapse hit JP Morgan hard, as it was a major lender to the
Company. Due to the collapse, JP Morgan incurred a $332 million fourth
quarter loss, and was compelled to set aside more than $500 million for
future loan defaults.
The Federal Reserve Bank said in its memo, it was reviewing "two
prototypical prepaid forward transactions," where JP Morgan would pay
Enron for the future delivery of natural gas and crude oil. A Fed
spokeswoman told AP, "As part of our normal banking supervisory role we
need to understand what is happening at the institutions we supervise."
Experts say the review is just ordinary procedure. Diana Yates, an
analyst at AG Edwards, said the Fed's review appeared to be just normal
information gathering. She told AP, "Anyone related to Enron is going
to have everything looked at.I don't think it's really as big of a
surprise as the market is making it out to be today." The Company has
also said it is a normal course of action.
JP MORGAN: Wolf Haldenstein Commences Securities Suit in S.D. New York
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York, on behalf of purchasers of JP Morgan Chase & Co. (NYSE: JPM)
between November 28, 2001 and January 28, 2002, inclusive, against the
Company.
The suit alleges that the Company misrepresented its risk and loss
exposure related to its Enron Corporation dealings as being
approximately $900 million. However, JP Morgan later admitted that, in
fact, its total Enron related exposure was actually about $2.6 billion,
or almost three times the earlier figure. Shortly thereafter, the
Company wrote down $1.13 billion in non-performing assets, specifically
losses related to Enron.
For further details, contact Fred Taylor Isquith, Gregory Nespole,
Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison
Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: at
classmember@whafh.com or visit the firm's Web site:
http://www.whafh.com. E-mail should refer to JPM.
KMART CORPORATION: Cauley Geller Commences Securities Suit in E.D. MI
---------------------------------------------------------------------
Cauley Geller Bowman & Coates LLP initiated a securities class action
in the United States District Court for the Eastern District of
Michigan on behalf of purchasers of Kmart Corporation (NYSE: KM)
publicly traded securities during the period between May 17, 2001 and
January 22, 2002, inclusive.
The suit alleges that defendant Charles Conaway violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between May 17, 2001 and January 22,
2002, thereby artificially inflating the price of Company securities.
Prior to and throughout the class period, as alleged in the complaint,
the Company and Mr. Conaway represented that the Company was engaged in
a comprehensive restructuring of its operations, which were
revitalizing it and its sales.
The suit alleges that these representations were materially false and
misleading because they failed to disclose and misrepresented the
following adverse material facts:
(1) that the Company's purported revitalization was a complete
failure as it was continuing to lose market share to
competitors and its purported efforts to reverse this trend
were not meeting with success;
(2) that the Company's supply chain management was extremely
problematic as its distribution centers were outdated and
inefficient and its supply chain software was plagued by bugs
and glitches, which were causing it to experience inventory
problems. As a result of these supply chain management issues,
the Company was experiencing difficulties routing inventory to
stores, thereby negatively impacting its sales; and
(c) that the Company was experiencing substantial liquidity
problems which would necessitate a major restructuring of its
operations and possibly a bankruptcy, which ultimately
happened.
On January 22, 2002, Kmart issued a press release announcing that it
had filed a voluntary petition for reorganization under Chapter 11 of
the US Bankruptcy Code. According to the press release, the Company's
decision to seek "judicial reorganization" was based on a "combination
of factors, including a rapid decline in its liquidity resulting from
Kmart's below-plan sales and earnings performance in the fourth
quarter."
Following this announcement, the price of the Company's common stock
dropped from $1.74 per share to $0.70 per share, a one day decline of
59%, on extremely heavy trading volume.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web
site: http://www.classlawyer.com
KMART CORPORATION: Schiffrin Barroway Files Securities Suit in E.D. MI
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Schiffrin & Barroway, LLP commenced a securities class action in the
United States District Court for the Eastern District of Michigan on
behalf of all purchasers of the common stock of Kmart Corporation
(NYSE: KM) from May 17, 2001 through January 22, 2002, inclusive.
The suit alleges that defendant violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between May 17, 2001 and January 22, 2002, thereby artificially
inflating the price of Company securities.
Prior to and throughout the class period, as alleged in the complaint,
Kmart and Mr. Conaway represented that the Company was engaged in a
comprehensive restructuring of its operations, which were revitalizing
it and its sales.
The suit alleges that these representations were materially false and
misleading because they failed to disclose and misrepresented the
following adverse material facts:
(1) that the Company's purported revitalization was a complete
failure as it was continuing to lose market share to
competitors and its purported efforts to reverse this trend
were not meeting with success;
(2) that the Company's supply chain management was extremely
problematic as its distribution centers were outdated and
inefficient and its supply chain software was plagued by bugs
and glitches, which were causing it to experience inventory
problems. As a result of these supply chain management issues,
the Company was experiencing difficulties routing inventory to
stores, thereby negatively impacting the Company's sales; and
(3) that the Company was experiencing substantial liquidity
problems which would necessitate a major restructuring of its
operations and possibly a bankruptcy filing, which ultimately
happened.
On January 22, 2002, Kmart issued a press release announcing that it
had filed a voluntary petition for reorganization under Chapter 11 of
the U.S. Bankruptcy Code. According to the press release, the Company's
decision to seek "judicial reorganization" was based on a "combination
of factors, including a rapid decline in its liquidity resulting from
Kmart's below-plan sales and earnings performance in the fourth
quarter." Following this announcement, the price of Company common
stock dropped from $1.74 per share to $0.70 per share, a one-day
decline of 59%, on extremely heavy trading volume.
For more information, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 or by E-mail:
info@sbclasslaw.com
NATIONAL GOLF: Schatz Nobel Lodges Securities Suit in C.D. California
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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 the common stock of National Golf
Properties, Inc. (NYSE: TEE) between April 1, 1999 and November 14,
2001, inclusive.
The suit alleges that National Golf, a Real Estate Investment Trust
(REIT) that owns 146 golf courses, and two of its top corporate
officers misled the investing public during the class period regarding
its financial condition. Defendant David G. Price is the Chairman of
the Board of Directors and largest shareholder of both the Company and
its principal tenant, American Golf Corporation, which leases 142 of
National Golf's 146 properties.
The suit alleges the Company failed to reveal that American Golf was
under such severe financial stress that the Company was in danger of
violating its line of credit. Specifically, American Golf lost $8.7
million in the first six months of 2001.
Not long after the Company's May 2001, secondary offering, the Company
announced it was in technical default on its credit line because of
American Golf's financial problems. Then, on November 14, 2001, the
Company announced American Golf may not be able to pay its lease
payments to it for six months.
After each of these announcements, the price of National Golf's common
shares began to fall and in August 2001, the price per share fell 13%,
and after the Company's disclosure in November, the price per share
fell 23% to $10.94.
For more information, contact Andrew M. Schatz, Patrick A. Klingman,
Wayne T. Boulton or Nancy A. Kulesa by Phone: 800-797-5499 by E-mail:
sn06106@aol.com or visit the firm's Web site: http://www.snlaw.net
NETPLIANCE INC.: Bernstein Liebhard Lodges Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz, LLP initiated a securities class
action on behalf of all persons who acquired Netpliance, Inc.
(NASDAQ:NPLI) securities between March 17, 2000 and December 6, 2000.
The suit is pending in the United States District Court for the
Southern District of New York and names as defendants Tippingpoint
Technologies, Inc. (formerly known as Netpliance) and these Company
executive officers:
(1) John F. McHale,
(2) Kent A. Savage,
(3) Donaldson Lufkin & Jenrette Corporation,
(4) BancBoston Robertson Stephens, Inc., and
(5) Chase Hambrecht & Quist, LLC
The underwriters mentioned above, acted as co-lead underwriters of the
Company's initial public offering of 8,000,000 shares of common stock
at $18.00 per share on March 17, 2000.
The suit charges defendants with violations of Sections 11,12 and 15 of
the Securities Act of 1933 for issuing a registration statement and
prospectus that contained material misrepresentations and/or omissions.
The prospectus was issued in connection with the Company IPO.
The suit alleges that the prospectus was false and misleading because
it failed to disclose that the underwriter defendants entered into
unlawful tie-in and other arrangements and agreements with customers,
which manipulated the demand for and stock price of Company shares.
The underwriter defendants induced their customers to purchase shares
in the IPO as a quid pro quo for receiving favorable IPO allocations in
the "hot" IPOs of other technology companies. In this manner,
defendants created a false demand for the Company's shares on the IPO
and artificially inflated its stock price in the after market.
For more details, contact Ms. Linda Flood by Mail: 10 East 40th Street,
New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-
mail: NPLI@bernlieb.com or visit the firm's Web site:
http://www.bernlieb.com
PNC FINANCIAL: Kaplan Fox Lodges Securities Suit in S.D. Pennsylvania
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Kaplan Fox and Kilsheimer LLP initiated a securities class action
against PNC Financial Services Group (NYSE:PNC) and certain of its
officers and directors in the United States District Court for the
Southern District of Pennsylvania, on behalf of all who purchased the
Company's common stock between July 19, 2001 and January 29, 2002,
inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges, among other things, that during the class period defendants
made false and misleading statements concerning the Company's financial
results for the second, third and fourth quarters of 2001.
Specifically, defendants improperly stated revenues during those
quarters, in violation of generally accepted accounting principles, and
"manipulated" the Company's books in order to report revenues, profits
and growth rates to the investing public throughout 2001.
As a result of defendants' false and misleading statements, and
improper accounting practices during the class period, the price of
Company common stock traded at artificially inflated prices.
For more information, contact Frederic S. Fox, Jonathan K. Levine or
Adam W. Walsh by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022
by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-
mail: mail@kaplanfox.com
SYNSORB BIOTECH: Wechsler Harwood Commences Securities Suit in S.D. NY
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Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action in the United States District Court for the Southern District of
New York, on behalf of purchasers of Synsorb Biotech Inc. (Nasdaq:
SYBB) between April 4, 2001 and December 10, 2001, inclusive, against
the Company and certain of its officers.
The suit alleges that defendants violated the federal securities laws
by issuing materially false and misleading statements throughout the
class period that had the effect of artificially inflating the market
price of the Company's securities.
The suit alleges that throughout the class period, defendants touted
the successful progression of its SYNSORB Cd(R) Phase III clinical
trials while concealing from the public that:
(1) defendants had "concerns about enrollment;"
(2) defendants knew that "the completion of the trial would reach
out years beyond" what they had forecast;
(3) the FDA had directed defendants to use a more stringent
protocol in its Phase III trials;
(4) defendants had repeatedly failed to increase enrollment in the
Phase III trials during the class period;
(5) defendants had been experiencing "unacceptably high drop out
rates;" and
(6) defendants could not afford to continue to finance the Phase
III clinical trials
After the market close on December 10, 2001, the Company issued a press
release announcing the termination of its SYNSORB Cdr development
program and in a conference call the next morning, revealed the true
facts concerning the Phase III clinical trials. These shocking
revelations made in the press release and in the conference call had a
dramatic effect on the price of Synsorb stock, causing the stock to
plummet over 52% and causing plaintiff and the class to suffer damages.
For more information, contact David Leifer or Craig Lowther by Mail:
488 Madison Avenue, New York, New York 10022 by Phone: 877-935-7400 by
E-mail: dleifer@whhf.com or visit the firm's Web site:
http://www.whhf.com
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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
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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