/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020718.mbx C L A S S A C T I O N R E P O R T E R Thursday, July 18, 2002, Vol. 4, No. 141 Headlines ASARCO, INC.: 250 People Sign On To Injury Suit Over Mining Operations CANADA: Ontario Govt Faces Suit Over Tax Money From Charity Gaming CATHOLIC CHURCH: Los Angeles Diocese Faces Clergy Sexual Abuse Lawsuit COLEMAN COMPANY: Recalls 136,000 Mosquito Deleto Traps For Fire Hazard DAYTON POWER: Employee Pension Fund Files Suit over Securities Losses DRYVIT INC.: Homeowners Have Until September 3 To Opt-out of Settlement FOOD LION: SC Appeals Court Dismisses Abuse of Process Suit V. Union HERCULES INC.: Members File Suit To Recover Stock Investment in Club HORIZON WEST: Former Nursing Home Residents File Suit Over Closure INCO LTD.: Canada Court Rejects Class Status, Allows Individuals to Sue LABOR READY: Arizona Attorney General Files Consumer Fraud Lawsuit MDI ENTERTAINMENT: DE Court Dismisses Suit Over Scientific Games Merger MICHIGAN: Faces Suit Charging Violations of Freedom of Information Act MOTIVA ENTERPRISES: Faces Civil Suit Over 2001 Storage Tank Collapse NTN COMMUNICATIONS: CA State Court Dismisses Securities Fraud Suits RADIOSHACK CORPORATION: Reaches Tentative Settlement in CA Wage Suit RAYTHEON INC.: Securities Fraud Suit To Proceed in MA Federal Court TELECOMS COMPANIES: Judge Orders Sanction For Illegal "Judge Shopping" TOBACCO LITIGATION: Law Firms in Historic Settlement Get $1.25B Award WYETH: Plaintiffs' Lawyers Consider Filing Suits Over Prempro Risk News WYETH: Schiffrin & Barroway Commences Lawsuit over Prempro Hormone Drug *Age Discrimination Suits On the Rise, as Number of Lay-offs Increase New Securities Fraud Cases CROSS MEDIA: Paskowitz & Associates Commences Securities Suit in NY CRYOLIFE INC.: Berger & Montague Commences Securities Suit in N.D. GA DAYTON POWER: Waite Schneider Files Suit On Behalf of Pension Fund MERRILL LYNCH: Stull Stull Commences Securities Fraud Suit in S.D. NY MERRILL LYNCH: Kirby McInerney Commences Securities Suit in S.D. NY MERCK & CO.: Kirby McInerney Commences Securities Fraud Suit in NJ MERCK & CO.: Wechsler Harwood Commences Securities Suit in New Jersey OMNICOM GROUP: Wechsler Harwood Commences Securities Suit in S.D. NY REHABCARE GROUP: Schiffrin & Barroway Commences Securities Suit in MO TELLABS INC.: Rabin & Peckel Commences Securities Fraud Suit in N.D. IL TRITON NETWORKS: Leo Desmond Commences Securities Suit in M.D. Florida TYCO INTERNATIONAL: Kaplan Fox Commences Securities Suit in S.D. FL WORLDCOM INC.: Wechsler Harwood Commences Securities Suit in MS Court ********* ASARCO, INC.: 250 People Sign On To Injury Suit Over Mining Operations ---------------------------------------------------------------------- More than 250 people have joined the lawsuits filed against mining giant Asarco, Inc. in the Pima County Superior Court, alleging the Company's operations have injured them, contaminated the environment and devalued their homes, the Arizona Daily Star reports. Past and present residents of Arizona communities, Hayden, Winkelman, Kearney and Riverside signed on to the lawsuits. Howard Shanker, a Phoenix attorney representing the claimants, told the Daily Star the complaints are based on at least 20 years of Company operations near the various communities. Attempts over the last few years to settle out of court recently failed, Mr. Shanker said. "Lots of people didn't know why they were sick until recently." In the personal injury lawsuit, plaintiffs allege that residents have been plagued by lead, arsenic, cadmium and other toxic materials released by Asarco operations. According to the Arizona Daily Star, area residents and their children have suffered "various cancers, difficulty conceiving/miscarriages, respiratory distress, birth defects, and serious developmental challenges." The suit further states that levels of lead and arsenic found in nearby homes, public schools and parks are "dangerously high" and alleges that seven people died as a result of their exposure to the operations. Attorneys estimate as many as 6,000 people could sign on to a separate class-action lawsuit seeking payment for medical monitoring of plaintiffs and, for some, damages for devaluation of property, the Arizona Daily Star reports. Clay Allen, an Asarco spokesman, said in a statement, "Protecting the health and well-being of our employees and the people who live near our operations is Asarco's highest priority." CANADA: Ontario Govt Faces Suit Over Tax Money From Charity Gaming ------------------------------------------------------------------ The Ontario government faces a lawsuit over tax money raised by charity gaming events, thestar.com reports. The suit relates to a 5% tax introduced in late 1997 by the Conservative government on Nevada tickets, a popular fundraiser for charities, also known as break-open tickets. The suit states that the Ontario government has no right to tax money raised by charity gaming events. "The Criminal Code says the proceeds are to be used for charitable and religious purposes, well, government is neither of those," Cambridge lawyer John McDonald told thestar.com. Mr. McDonald is representing the Hamilton Kilty Bees Junior A hockey club, which launched the suit almost a year ago. Besides the 5% tax, the government also charges a licensing fee of $200 per location. The provincial fee is 5 per cent of the gross selling price of each box of break-open tickets. "We want all the money that they have taken on the 5 per cent to be repaid to charity and religious organizations, which number about 6,000," Mr. McDonald further stated. Preliminary talks between the plaintiff and the government are to be held Sept. 4 and 5 in Hamilton. "The government has brought this preliminary motion to decide a number of issues before the certification motion. The government wants to explore whether a non- constitutional tax has to be paid back," Mr. McDonald told thestar.com. While a spokesperson for Attorney-General David Young refused comment, the government's statement of claim says the charities are not getting any less money, but rather the winners. "In adding this fee to the break-open ticket scheme, the province reduced the percentage of proceeds that had been set aside for the payout of prizes by a corresponding amount," the statement says. "As a result, it was the winners under the scheme that received less of the total proceeds from the sale of the tickets, not the plaintiff." CATHOLIC CHURCH: Los Angeles Diocese Faces Clergy Sexual Abuse Lawsuit ---------------------------------------------------------------------- The Roman Catholic Archdiocese of Los Angeles faces a class action that is set to be filed in the Los Angeles Superior Court, on behalf of known and unknown victims of clergy sexual abuse, the Associated Press reports. Named as defendants in the suit are the Archdiocese and Rev. Fidencio Silva, a former pastor at Oxnard's Our Lady of Guadalupe parish, who is now working as a priest in Mexico. Two adult men, who were allegedly abused in the late 1970s and early 1980s initiated the suit. Others who claim sexual abuse by archdiocese priests will be allowed to join the lawsuit, Larry Drivon, a Stockton lawyer who is handling the case, told AP. "It will name the archdiocese for their activity in enabling the activities of Father Silva and others in the commission of these horrendous actions against children," Mr. Drivon said. The archdiocese, in a statement released Monday, said it anticipated the filing. The church hopes to fairly resolve as many cases as possible in the shortest amount of time, archdiocese spokesman Tod Tamberg told AP. "It is important for the victims, their families and the church to expedite this process and move toward a brighter future." "We are assuming that claims will be made for acts that are 30 and 40 years old, making them difficult or impossible to disprove," Mr. Tamberg told AP. "It is the view of the church that the law is unfair and plainly focused against the Catholic church. The search for truth will be impaired or prevented by the passage of time." Mr. Drivon added that a bill signed by California Gov. Gray Davis early this month giving child abuse victims more time to sue for damages, will give the victims a chance to seek for justice. "It's up to the victims to prove the case and we stand ready to discharge that responsibility," he said. COLEMAN COMPANY: Recalls 136,000 Mosquito Deleto Traps For Fire Hazard ---------------------------------------------------------------------- The Coleman Company, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 136,000 Mosquito DeletoT Traps. The mosquito trap's propane regulator can leak propane or allow an overflow of propane gas, both of which pose a fire hazard to consumers. In addition, the fuel hose attachment sold with the Back HomeT System can become damaged and leak propane, which poses a fire hazard to consumers. The Company has received 28 reports of traps melting or catching on fire as a result of propane leaking, and 7 reports of damage to the propane fuel hoses. No injuries have been reported. The recalled Mosquito DeletoT Traps were sold as a part of the Portable System and the Back HomeT System. The traps are about 24 inches high, have a green or gray base and top, a black center, and attached to either a 1 lb. propane cylinder or a 20 lb. propane cylinder with a hose. The traps have two sets of model numbers: 2950-800 and 2950-801, which can be found on a label on the front of the trap above the words, "WARNING: For outdoor use only." The recalled Back HomeT System traps include a 5-foot rubber hose that connects to 20 lbs. Propane cylinders. The Portable System and Back Home SystemT mosquito traps were manufactured in the US. Home centers, mass merchandisers, and hardware stores sold these products from March 2002 to July 2002 for between $170 and $200. The products were sold nationwide, except for California. For more information, contact the Company by Phone: 800-257-5299 anytime, so that a representative can help determine whether their trap needs to be replaced, repaired, or can continue to be used, or visit the firm's Website: http://www.coleman.com DAYTON POWER: Employee Pension Fund Files Suit over Securities Losses --------------------------------------------------------------------- The Dayton Power And Light Co. faces a class action filed in the Montgomery County Common Pleas Court by the Company's employee pension fund called Buckeye Electric Co. Retirement Plan, claiming that risky investments in South America cost investors more than $1 billion, the Dayton Daily News reports. The suit was also filed on behalf of investors who bought DPL Inc. stock during the past seven years, and names as defendants: (1) directors of DPL Inc., holding company for DP&L, (2) Peter H. Forster, chairman, (3) Allen M. Hill, president and chief executive officer, and (4) PriceWaterhouseCoopers LLP, Company auditor. The suit arose after the Company announced on July 1, that it lost approximately $200 million on investments in Latin America. The Company attributed this to "political and economic turbulence in South America." As a result of the announcement, shares of the Company's parent dropped to $7.70 or by 29 percent between July 1 and July 10. It closed that day at $18.55. The lawsuit claims Company stock lost more than $855 million in market value in the days following the July 1 announcement. According to the Dayton Daily News, the lawsuit also alleges that "substantial portions of DPL's directors' and officers' compensation" was linked to "generating short-term results to push DPL's stock higher." Pressure for short-term gains resulted in a failure "to value the financial assets portfolio fairly, objectively and impartially." The suit further stated that PriceWaterhouseCoopers "knew the details of DPL's fraudulent and misleading transactions and was a participant in the scheme to defraud" DPL shareholders. The Company allegedly violated Ohio law by misrepresenting and disguising high-risk investments made with millions of dollars of company money. "This lawsuit was brought to protect the pensions and investments of thousands of DPL shareholders who thought they were buying a safe, conservative utility company in Dayton," Lead plaintiff Stanley Chesley told the Dayton Daily News. "The deception we have alleged shows how the trust that our clients placed in the directors and officers of DPL has been violated. We will ask the court to restore the hundreds of million of dollars that our clients have lost," he continued. Stephen F. Koziar Jr., a DPL group vice president, told the Dayton Daily News that being sued "is part of doing business today. If your stock price declines, you are going to get sued." DRYVIT INC.: Homeowners Have Until September 3 To Opt-out of Settlement ----------------------------------------------------------------------- Homeowners in the class action against Dryvit Systems, Inc. over its Exterior Insulation and Finish Systems (EIFS) product have until September 3 to opt out of the suit's settlement, MySanAntonio.com reports. The Company faced several suits after EIFS, a synthetic stucco popular with housing contractors and the public in the 1980s and 1990s, was shown to be prone to trapping moisture, which led to wood rot where it was placed against framing, termite infestations, interior water damage and exterior siding crumbling. The Company usually settles the claims out of court, but in January, a Virginia court allowed the suit to proceed as a class action, saying that the product was inherently flawed. In the Virginia case, company spokesman Steven Wachtler told MySanAntonio.com the judge unfairly apportioned blame to Dryvit. "We believe this project is not a reflection on the performance of the (stucco) but is one that represents the problems cause by poor construction practices and detailing," he said. Gary Mason, co-lead counsel for the Washington, D.C. firm that sued Dryvit, called the settlement reached June 5 in Tennessee fair and reasonable. "It doesn't do everything for everybody, but it does a lot for a lot of people who don't have any recourse at this point," Mr. Mason told MySanAntonio.com. Under the settlement, homeowners can avail of a free inspection and a cost estimate of the repairs needed to obtain a warranty on the stucco. The Company would then reimburse up to 50 percent of the cost, depending on how many claims are made. There is a cap of $7,500 per homeowner, Mr. Mason stated. FOOD LION: SC Appeals Court Dismisses Abuse of Process Suit V. Union -------------------------------------------------------------------- The South Carolina Court of Appeals dismissed an "abuse of process" filed by Food Lion against the United Food and Commercial Workers Union (UFCW), originally in February 1993. Food Lion went after the union when the UFCW assisted former Food Lion workers file a class action suit, Bryant v. Food Lion, charging Food Lion illegally fired employees or forced them to quit and falsified the reasons for their discharge to deprive them of pension and health benefits. "The dismissal confirms what we've said all along, that the Food Lion suit was basically a SLAPP suit, a strategic lawsuit against public participation, designed to deter the union from providing legal support for Food Lion workers," said a UFCW spokesperson, in a statement. A federal court had dismissed Food Lion's suit as early as July 1993, but the grocer pursued its charges for nearly a decade, getting the case remanded to state court. "This is just another example of how big business attempts to bully and intimidate workers and keep unions from helping them pursue their rights," stated the UFCW. "The real issue here is that the UFCW does have a right to stand up with Food Lion employees, or any other workers, contending with intolerable workplace conditions, whether they be wage and hour, safety and health, or pension and health care violations -- and we will continue to do so." For more details, contact Greg Denier of the United Food and Commercial Workers Union, by Phone: 1-202-466-1591 or visit the Website: http://www.ufcw.org HERCULES INC.: Members File Suit To Recover Stock Investment in Club -------------------------------------------------------------------- Hercules, Inc. and the Hercules Country Club faces a class action filed in Chancery Court in Wilmington by about 500 of its former members, seeking to recover money they paid to help renovate the club before it was sold in October, the News Journal (Delaware) reports. The members invested in stock issued by the club to improve its facilities. The club allegedly collected an estimated $375,000 to $400,000 for the renovations. The suit charges the Club with breach of contract, by refusing to pay back all the money it collected after it was sold. The suit further asserts that the members invested in the stocks under the understanding that they would be repaid if the club were to be sold before December 2010. Geoffrey A. Kahn, a lawyer representing both Hercules and the former club in Mill Creek, now called the Delaware National Country Club, would not comment, the News Journal reports. "As a member, I am perturbed that they won't honor their contract," Ed McNally, a Wilmington lawyer at Morris, James, Hitchens & Williams and a club member for 10 years, told the Journal. He and other members argue the club was compensated in full for the cost of the improvements when it sold the facility to Woodale Country Club. "All members that paid into this (preferred stock) should have the money returned to them 100 percent in full because Hercules used members' money to build improvements and then took those improvements and sold them for a profit," Ed Reznick, president of Deutsche Bank Trust Delaware and a club member since 1991, told the Journal. Court documents filed by the Company claim club members are not entitled to proceeds of the sale of the club. The documents say the Company has determined a "fair way" of addressing inquiries from members requesting a refund. The Company later sold the country club, the clubhouse and an airplane last year to raise about $20 million for the company to help trim its debt. It owned and operated the club from 1937 to 2001. HORIZON WEST: Former Nursing Home Residents File Suit Over Closure ------------------------------------------------------------------ Nursing home operator Horizon West, Inc. faces a class action filed in Solano County Superior Court, after the Sereno Care Center that it operates was closed, the Sacramento Business Journal reports. The suit was filed on behalf of the former residents of the home and their family members, charging elder abuse. The suit alleges "violation of the elder abuse and dependent adult civil protection laws and fraudulent misrepresentation" resulting from the eviction of residents from Sereno in July and August 2001. The suit, according to the California Advocates for Nursing Home Reform (CANHR), says Horizon "failed to provide adequate notice, relocation plans or relocation services to the residents prior to the transfers. As a result, the mental and physical health of the former residents declined significantly, and two of the named class representatives died shortly after the transfers." The Company denies the allegations. "We transferred the residents according to a relocation plan approved by the state," Art Whitney, CEO at Horizon West, told the Sacramento Business Journal. "Our desire is to ensure the safety and care of our residents." He declined further comment, citing the pending litigation. INCO LTD.: Canada Court Rejects Class Status, Allows Individuals to Sue ----------------------------------------------------------------------- The Ontario Superior Court threw out a proposed class action against Inco, Ltd., the Ontario government, the Region of Niagara and the City of Port Colborne, saying the suit "did not disclose a reasonable cause of action" against the city or the region, Reuters reports. The suit was filed on behalf of residents of the southern Ontario town on Lake Erie near Niagara Falls, claiming they were being exposed to cancer-causing nickel oxides from an Inco refinery. The court ruled that the proposed class suit "was not appropriately identified, that a class proceeding was not the preferable method for resolving the common issues raised by the claim, and that the representative plaintiff as proposed was not adequate," Reuters reports. The court however left room for individuals to sue. The plaintiffs' lawyers said that the judge did not make any decisions about the claims of the residents, leaving them "free to pursue individual actions against every defendant." LABOR READY: Arizona Attorney General Files Consumer Fraud Lawsuit ------------------------------------------------------------------ Temporary staffing firm Labor Ready, Inc. faces a consumer fraud lawsuit filed by Arizona State Attorney General Janet Napolitano in Pima County Superior Court, the Puget Sound Business Journal reports. The suit alleges that the Company charged its Arizona workers with check-cashing fees. The Company allegedly required employees who wish to receive cash at the end of each workday to use a company cash dispensing machine, which imposes a fee of between US$1-2 dollars on each transaction. The Company could pay penalties that could exceed several million dollars, the Attorney General's office told the Puget Sound Business Journal. The Company allegedly acknowledged having retained close to $200,000 in fees from Arizona workers between Jan. 1, 2000, and August 2001, but has refused to disclose the amounts since September 2001. A similar suit has been filed in California, which has already been granted class action status by the California Supreme Court. Company spokeswoman Stacey Burke said the company has not had time to prepare a response, but "defends its cash-dispensing machines as a voluntary option to its workers," the Puget Sound Business Journal reports. MDI ENTERTAINMENT: DE Court Dismisses Suit Over Scientific Games Merger ----------------------------------------------------------------------- The securities class action against MDI Entertainment Inc (OTCBB: LTRY) relating to the proposed transaction with Scientific Games Corporation (Nasdaq NM: SGMS) has been dismissed without prejudice. The suit was filed on behalf of the Company's public stockholders in the Court of Chancery of the State of Delaware against the Company, all of the members of the Company's Board of Directors and Scientific Games Corporation, to enjoin the previously disclosed proposed business combination transaction pursuant to which Scientific Games would acquire the outstanding shares of the Company's common stock which it does not already own. On February 26, 2002 Scientific Games and the Company signed an agreement whereby Scientific Games would exchange its shares for Company shares at $2.10 per share. On June 27, 2002, another company, International Capital Partners, LLC, and the Company terminated talks with MDI Entertainment concerning the acquisition of a majority interest in the Company. MDI Entertainment CFO, Kenneth Przysiecki, told Knobias.com, relating to the resumption of talks with Scientific Games that, "We have a continuing strategic alliance with Scientific Games. The lawsuit and share exchange are separate events. No assumption should be made that one event will lead to the other." MICHIGAN: Faces Suit Charging Violations of Freedom of Information Act ---------------------------------------------------------------------- Michigan faces a class action filed in Wayne County Circuit Court, challenging Michigan's use of pay-by-the-minute 900 phone numbers to get access to certain public records, the Freedom Forum online reports. David Katz, a chiropractor in this southern Detroit suburb, filed the suit, saying the state's use of the toll numbers violates the Michigan Freedom of Information Act. Mr. Katz said it seemed outrageous that as a taxpayer, he had to pay to obtain records by phone, sometimes as much as $1.50 a minute. "All I'm hoping for is for this to be corrected," Mr. Katz told the Detroit Free Press. "I don't believe there should be a 900 number for free information. I pay so much in taxes on my business and my home, I don't need another tax added onto a simple phone call." His suit says that the state lottery, corporations and health licensing agencies set up 900 numbers to charge citizens for information the citizens should get for free because their tax dollars pay for the information and the salaries of the people who provide it, the Freedom Forum Online reports. State officials say they are not looking to profit, merely providing a way for Michigan residents to get information more quickly for a fee. They say that the same information is available on the Internet and by mail for free. Lori Donlan, spokeswoman for the Michigan Department of Consumer and Industry Services, told the Freedom Forum Online, the phone number people can use to check health care professionals' licenses charges $1.50 per minute. However, she said there were plenty of free ways to get the same information, on the department's Web site, in public libraries and by mail. MOTIVA ENTERPRISES: Faces Civil Suit Over 2001 Storage Tank Collapse -------------------------------------------------------------------- The United States Department of Justice and the Environmental Protection Agency filed a civil lawsuit against Motiva Enterprises, relating to the collapse of a sulfuric acid storage tank in July 2001 that killed one man and injured eight more persons, the Associated Press reports. The complaint charges the Company with gross negligence, violating the Clean Water Act and other federal laws. The incident occurred at the Company's Delaware City refinery, which resulted in the death of boilermaker Jeffrey Davis, whose family is now suing the Company. The accident also caused thousands of gallons of sulfuric acid to enter the Delaware River, resulting in a fish kill and other environmental damage. The Company blamed the explosion on a spark touched off by one of the men working above the corroded and leaking tank, which the Company has acknowledged was unsafe, the Associated Press reports. The state Department of Natural Resources and Environmental Control also filed a separate court action accusing the Company of violating state environmental laws. The suit seeks more than $100,000 and a court order requiring the Company to develop an environmental management system. The Company told AP it would continue discussions with state and federal officials "in an effort to fairly and promptly settle this matter." NTN COMMUNICATIONS: CA State Court Dismisses Securities Fraud Suits ------------------------------------------------------------------- The San Diego County Superior Court for the State of California dismissed two shareholder class action and derivative lawsuits against NTN Communications, Inc. (Amex: NTN), alleging violations of securities laws. In ruling on a motion by the Company, the court found that a shareholder class action and derivative complaint filed by Steven M. Mizel on behalf of himself and all Company shareholders failed to state a valid claim. In addition, following this ruling, Robin Fernhoff, an alleged stockholder of the Company, requested that the court dismiss a similar shareholder class action and derivative complaint filed by him on March 19, 2002. Mr. Fernhoff alleged the same claims as were alleged by Mr. Mizel. "We are of course pleased with these expected outcomes," Stan Kinsey, Chairman and CEO of NTN Communications said in a statement. "These cases did not have any merit and we question the true motives of those who filed them. The members of the board of directors acted appropriately and consistently with their fiduciary obligations. We will vigorously contest any actions such as these that seek to exploit the shareholders of NTN." The Mizel complaint filed on February 22, 2002 named as defendants certain Company directors and officers and named the Company as a nominal defendant. The court found insufficient Mr. Mizel's allegations that the board and certain officers breached their fiduciary duties in connection with the Company's rejection of a proposal by a corporation to purchase all of the outstanding shares of its common stock, as announced publicly on February 21, 2002. The court gave Mr. Mizel an opportunity to replead his case, but he declined to do so. On July 11, 2002, the court formally dismissed the case and entered judgment in the Company's favor. For more information, contact Donald C. Weinberger or Stephen D. Axelrod, CFA, of Wolfe Axelrod Weinberger Associates LLC by Phone: 212-370-4500 by Fax: 212-370-4505 or visit the Website: http://www.ntn.com RADIOSHACK CORPORATION: Reaches Tentative Settlement in CA Wage Suit -------------------------------------------------------------------- RadioShack Corporation (NYSE: RSH) reached a tentative $29.9 million settlement in a class action lawsuit filed in March 2000, alleging that certain current and former RadioShack store managers in California were improperly classified as exempt from overtime wages based on California law. The Company has agreed to the settlement to avoid protracted litigation that could be a distraction to its business. According to the tentative settlement, the Company will pay up to US$29.9 million to approximately 1,300 current and former store managers employed in California between March 27, 1996 and the present. The settlement payment will also be used to pay the plaintiffs' attorneys' fees and costs, and administrative expenses. The tentative settlement is subject to court approval. "We deny any wrongdoing in this case," Mark Hill, senior vice president, corporate secretary and general counsel of RadioShack Corporation, said in a statement. "In fact, we have fought these types of wage and hour claims in the past and been completely successful in our defense. However, proceeding to trial could have been a distraction to our business during the third and fourth quarters, which are our most productive times of the year. It was clearly in the best interest of the company to put this matter behind us." RAYTHEON INC.: Securities Fraud Suit To Proceed in MA Federal Court ------------------------------------------------------------------- A shareholders class action lawsuit by the New York State Common Retirement Fund against Raytheon INC. is to proceed next month with motions filed by the plaintiff in US District Court in Boston. The suit was filed after a steep slide in company stock between Oct. 7, 1998 and Oct. 12, 1999-the so-called "class period." The second largest public pension fund in the country, the New York State Common Retirement Fund bought $161 million in Company stock during the "class period," according to the complaint. Last year, Federal Judge Patti Saris dismissed most of the claims lodged against the Company, but allowed part of the case regarding the defense business and top executives, including Raytheon CEO Daniel Burnham and Raytheon Systems Company CEO William Swanson, to go forward. "We believe we have meritorious defenses for the company as a whole and for the named defendants, and we will vigorously contest the lawsuit," Raytheon spokesman David Polk said in a statement. Part of the complaint still at issue concerns the Lockheed Martin [LMT] P-3 Orion anti-submarine warfare aircraft and the plane's Sustainment Readiness Program (SRP), which was cancelled by the Navy for non- performance and cost overruns (Defense Daily, March 24, 2000). In February 1999, about two months before the issuance of the Company's 1998 annual report, a special Raytheon team, "Team 30," looked into the project delays and cost overruns and reported back to Raytheon senior management that the program would continue to have problems, according to the complaint. The 1998 Annual Report stated that SRP "calls for 50 aircraft to be refurbished by the end of 2002. The first modernized P-3 aircraft passed a rigorous flight-test and was accepted in April (1998). The second aircraft was delivered in early 1999. In addition to the first 50 aircraft, negotiations are under way for a follow-on contract to refurbish 48 additional aircraft." The complaint states that Burnham and Swanson were briefed on the contract's projected losses on a quarterly basis. Asked whether knowledge by senior Raytheon management by March 1999 about continued problems with SRP would have allowed them enough time to change the 1998 annual report to reflect such problems, Milberg Weiss declined to comment, saying that it could not do so since the matter was still in litigation. In addition, it is unclear whether regulations would have required Raytheon executives to change the 1998 annual report or issue a warning, if they knew of the problems on SRP by March 1999, since the 1998 annual report only covers company results through December 1998. In her opinion last August, however, Judge Saris wrote that Swanson "will not be dismissed from the case because there are adequate allegations that he knew about the profound problems with the P-3 Orion aircraft by March 1999." TELECOMS COMPANIES: Judge Orders Sanction For Illegal "Judge Shopping" ---------------------------------------------------------------------- Federal Judge Ann Aiken ordered a harsh sanction against five telecom companies and class action plaintiffs for illegal judge shopping. The court's action pulls the rug out from under a nationwide class action settlement that would have eliminated the five telecom companies' liabilities, valued at more than a billion dollars. In a fourteen-page opinion, Judge Aiken found "clear evidence of judge shopping by the settling parties," explaining, "to allow this amended complaint to go forward would be to approve the settling parties' tactics." The Judge concluded, "Protecting the integrity of the judicial process mandates dismissal of the amended complaint." Sprint, WorldCom, Qwest, Level 3, and Williams Communications are accused in more than 50 class action lawsuits of illegally installing fiber optic cable on some 56,000 miles of corridors without paying the owners of the land. Hundreds of millions of dollars is allegedly owed. The settlement would have removed that liability and would also have transferred real estate valued at a billion dollars or more to the telecom companies. The companies agreed to pay a $40 million dollar attorneys fee to the plaintiffs' lawyers with whom they cut the deal. Landowners in other class actions around the nation filed papers in opposition to the proposed settlement, calling it a "sweetheart deal" between the lawyers and the defendants, where the victims would get only pennies on the dollar. Rural organizations including the American Farm Bureau Federation have supported the rights of landowners against telecom companies and others who use rights of way without permission. Several such cases, including class actions against AT&T, have been settled with greater compensation to landowners. Other cases are proceeding toward trial in several jurisdictions. For more details, contact Nels Ackerson or Kathleen Kauffman of The Ackerson Group, Chartered by Phone: 202-833-8833, by E-mail: nackerson@ackersonlaw.com or visit the firm's Website: http://www.ackersonlaw.com TOBACCO LITIGATION: Law Firms in Historic Settlement Get $1.25B Award --------------------------------------------------------------------- An arbitration panel has awarded $1.25 billion to a group of law firms for their role in helping the state of California secure its share of a 1998 historic national settlement, The Wall Street Journal reports. In a 2 to 1 ruling, the arbitrators said they were compensating the lawyers for their efforts in California and for the work they did nationally that contributed to the historic 1998 deal, in the "Ellis" California case. Three tobacco companies are challenging the decision, which was made available to the parties earlier, but made public only Monday this week. The award is the fourth largest by the panel, which was created by agreement of the tobacco companies and its litigation foes as part of the 1998 deal to end state suits against the industry. It brings to $13.59 billion the total of attorneys' fees awarded by the panel to lawyers representing 19 states. The latest award is in addition to US$637 million the panel awarded to another group of attorneys for separate tobacco litigation in the state. California will receive US$25 billion of the US$206 billion tobacco companies agreed to pay under the 1998 agreement. The 57 law firms that will share the current award formed what is known as the Castano group and filed a suit in New Orleans in 1994 that sought to represent smokers around the country. The original case died when a federal appeals court refused to allow it to proceed as a class action. Nonetheless, the majority on the arbitration panel found that the group continued to advance the anti-tobacco effort by filing more than two dozen other cases and by discovering evidence against the companies and helping change public and legislative opinion. In a strongly worded dissent, Charles Renfrew, a former federal judge selected by the tobacco industry to serve on the panel, said the award "truly shocks the conscience." Mr. Renfrew and an arbitrator selected by the anti-tobacco lawyers selected the third member of the panel. The ruling faces a challenge from three tobacco firms, which have filed suit in state court in New York, where the arbitration took place. The three appealing tobacco firms, which are alleging that the arbitration panel improperly considered work by the Castano group beyond the California case, are: (1) RJ Reynolds Tobacco Holdings Inc., (2) Brown & Williamson Tobacco Corp., a unit of British American Tobacco Co. PLC, and (3) Lorillard Tobacco Co., a unit of Loews Corp. WYETH: Plaintiffs' Lawyers Consider Filing Suits Over Prempro Risk News ----------------------------------------------------------------------- Attorneys long-skilled in the role of plaintiffs' lawyers in the class action arena have rushed to sue Wyeth on news that its Prempro hormone- replacement therapy heightens the risk of breast cancer, stroke and heart disease, The Wall Street Journal reports. In Chicago, lawyer Kenneth B. Moll filed a lawsuit in federal court there, seeking compensation for thousands of women around the country who allegedly have been injured by the drug. The lawsuit also seeks medical monitoring for an even larger group of women who simply have used the drug, and an information campaign to warn them of the risks. "We have gotten hundreds of calls from people all around the world," said Mr. Moll. Schiffrin & Barroway, a Bala Cynwyd, Pa. law-firm even earlier filed a lawsuit in state court in Philadelphia seeking national class action status. The suit was filed one day after the news broke that a federally funded study of hormone-replacement therapy was halted three years early because of the surprise results relating to risk. Schiffrin & Barroway's Web page directs potential claimants to "Sign Up and Join a Class Action" via an online application. Davis, Saperstein & Solomon in Teaneck, New Jersey, launched a wave of three-a-day radio spots in the New York area urging concerned listeners to call its 800 number. "We are thinking of looking just at individual cases at this point because each and every one is different, but we are not ruling out a class action," said Sam Davis, a lawyer at the firm. More than 60 callers had phoned in by Monday, this week, he said. Prempro, a combination estrogen/progestin pill, is used by about six million women. As with other hormone-replacement therapies in use for 50 years, older women take it to protect against heart disease and osteoporosis and to treat the symptoms of menopause, such as hot flashes, night sweats and vaginal dryness. The federally funded Women's Health Initiative found that taking Prempro reduced the incidence of osteoporosis and colorectal cancer, but its dangers were found to outweigh those benefits. Women on the treatment had a 26 percent higher incidence of breast cancer, a 29 percent higher incidence of heart attacks, a 41 percent higher number of strokes and double the number of blood clots in the legs and veins, the study found. Still, the risk to individual women is still low. Among 10,000 women taking the treatment for one year, there would be seven more heart attacks and eight more breast cancers, according to the study. Prempro might seem like a litigation bonanza. Still, some plaintiffs' lawyers are holding back until more is known about the number of injuries and how they may be connected to the drug, as well as the suitability of lumping large numbers of potentially disparate claimants into class actions. For that reason, some plaintiffs' lawyers say, injury and death claims are more likely to be pursued case by case, while suits seeking class action status will concentrate on recovering the cost of medical monitoring, the money the women spent on Prempro and a warning program to alert women who used the treatment. Many plaintiffs' lawyers, moreover, are wary at this stage of overdrawn comparisons between Prempro and the last big problem drug for Wyeth, which made one of the two drugs in the disastrous diet-pill combination known as fen-phen. Paul Rheingold, a New York plaintiffs' lawyer who specializes in defective medical products and helped drive the fen-phen litigation, says that one problem is that heart disease and breast cancer are not "signature illnesses" that can be directly traced to Prempro. By contrast, said Mr. Rheingold, the damage to heart valves could be distiguishably tracked to fen-phen. While national class actions have become increasingly popular with plaintiffs' lawyers, courts have become increasingly hostile to them. In a sweeping opinion, in May 2002, the influential Seventh US Circuit Court of Appeals in Chicago, threw out a national class action against Ford Motor Co. and Bridgestone/Firestone American Tire LLC over the diminished value of cars and tires because of rollovers in Explorers equipped with Firestones. The court cited too many individual variables among owners of the vehicles and tires to allow thousands of cases to proceed in a single class and be decided in one mega-trial. That decision, which is expected to be widely cited, is giving some class action lawyers pause in this case. One attraction for plaintiffs' lawyers is that Wyeth, formerly American Home Products Corp., has paid out $11.3 billion in settlements and claims stemming from the diet pills. Overall, the company has set aside $13.2 billion to cover that litigation. Wyeth is bracing for a Prempro onslaught. The company, based in Madison, New Jersey, has contacted six major law firms that focus on defending companies to make sure they will be able to handle the load. "We have been on the phone ourselves," said Louis Hoynes, Wyeth's vice president and general counsel. WYETH: Schiffrin & Barroway Commences Lawsuit over Prempro Hormone Drug ----------------------------------------------------------------------- Schiffrin & Barroway, LLP filed a national class action lawsuit on behalf of all persons who were prescribed the hormone replacement drug Prempro, chemically known as conjugated estrogens/medroxyprogesterone. Wyeth and Wyeth-Ayerst Research are named as the defendants in this action due to their responsibility in manufacturing, promoting, marketing, distributing and/or selling Prempro. The class action seeks to: (1) inform the public that users and consumers of Prempro are at an increased risk of harm and/or death; (2) establish a medical monitoring fund so that every consumer may be tested and treated for the adverse effects of Prempro; (3) reimburse monies paid for the product; and (4) provide compensation to all victims for personal injuries and death. Prempro is a medication commonly prescribed for patients in need of hormone replacement therapy. The drug, which falls within a category of drugs known as progestins, contains conjugated estrogens and medroxyprogesterone acetate. Approximately three million women in the United States take Prempro daily to replace hormones lost at menopause as a means for reducing incidence of post-menopausal symptoms such as hot flashes, night sweats and vaginal dryness. The drug first received FDA approval as a hormone replacement therapy in 1995. Between 1993 and 1998, the Women's Health Initiative (WHI), a group focused on the health and welfare of postmenopausal women, enrolled more than 16,000 women in a set of clinic trials to examine, among other things, the effect of estrogen plus progestin on the prevention of heart disease and hip fractures, and any associated change in risk for breast and colon cancer. The specific drug used during the study was Prempro supplied by Wyeth and Wyeth- Ayerst Research. On May 31, 2002, an independent advisory committee charged with reviewing the results of the clinical trials and ensuring participant safety, recommended that the trials be stopped based on a finding of increased breast cancer risk in the estrogen plus progestin group. On July 8, 2002, participants began receiving letters informing them about the results of the study and instructing them to stop study medications. The specific study findings for the estrogen plus progestin group compared to the placebo included a 41% increase in strokes; 29% increase in heart attacks; 22% increase in total cardiovascular disease; and 26% increase in breast cancer. On July 9, 2002, the Journal of the American Medical Association released an expedited article concerning the WHI Prempro clinical trials. The article, originally scheduled for publication on July 17, 2002, summarizes the wide- ranging harm caused by Prempro, including the "increased risks for cardiovascular disease and invasive breast cancer," and notes that "there were more harmful than beneficial outcomes in the estrogen plus progestin group vs. the placebo group." After the lawsuit was filed, Schiffrin & Barroway, LLP obtained a copy of a "Dear Pharmacist" letter from Wyeth Pharmaceuticals, of Philadelphia, Pennsylvania. In the letter, Victoria Kusiak, M.D., Vice President of Clinical Affairs and North American Director for Wyeth Pharmaceuticals summarizes the findings of the WHI study and clarifies "the risks and benefits associated with combination hormone replacement therapy (HRT)." Dr. Kusiak explained that "these findings provide more specific information about the breast cancer and cardiovascular risks." Wyeth has also sent a letter to Healthcare Professionals, notifying them of the discontinuance of the WHI study in light of the increased risk of breast cancer and cardiovascular events to study participants. For more details, contact Tobias L. Milrood 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 or visit the firm's Website: http://www.sbclasslaw.com *Age Discrimination Suits On the Rise, as Number of Lay-offs Increase --------------------------------------------------------------------- The number of age-discrimination complaints filed with the US Equal Employment Opportunity Commission (EEOC) has risen 23.5 percent in the last two years - the fastest-growing category of discrimination cases, according to a report by The Sun Herald (Biloxi, Miss.). The number of complaints tends to rise as the number of layoffs increases, said Paul Boymel, an EEOC senior attorney who specializes in age discrimination. While age-discrimination laws also cover hiring and promotions, the majority of the cases filed pertain to unfair termination practices. In 1999, there were 14,141 complaints filed. Two years later, the number increased to 17,405 for a fiscal year that ended September 30, 2001, only a few weeks after the September 11 terrorist attacks kicked an already sputtering economy into a crisis of layoffs. The last significant spike, says Mr. Boymel, began in 1991, rising to its height of 19,809 claims in 1993, at the heart of the economic downturn in the early 1990s. "Charges of age discrimination went up significantly at that time," said Mr. Boymel, "and then started declining as the economy picked." The main law governing the cases is the 1967 federal Age Discrimination in Employment Act, which applies to workers who are 40 and older. That group now numbers 67.5 million, said Ron Bird, an economist with the Employment Policy Foundation in Washington, D.C. Mr. Boymel said that, for the most part, employers are learning how to lay off workers in a way that averts litigation, and employees are gaining a more realistic understanding of what will fly in court. "The cases are self-selecting," he added. Honeywell International Inc., the 100,000-employee global aerospace company in Morristown, N.J., acquired an age-discrimination headache, according to The Sun Herald, along with its 1999 acquisition of the former Allied Signal Automotive Aftermarket, the maker of Prestone and other automotive products. On June 6, the EEOC's Philadelphia office filed a lawsuit against Honeywell, seeking class action status. The lawsuit said Allied Signal unfairly terminated and demoted older workers - at least 50 - during a 1997 reorganization. The lawsuit, filed in federal court in New Jersey, is pending. To illustrate Allied Signal's alleged age bias, the suit quotes Allied Signal's president at the time as saying' "Anybody over 40 is a dinosaur. we are going to terminate those types and replace them with people like myself." Honeywell spokesman Tom Crane said recently, "Allied Signal took great care in the automotive aftermarket restructuring, and we are confident that there was no discrimination against these or any other individuals during the restructuring." Michael McGinn, Executive Transition Group Inc. chief executive officer, and a former priest, who not only has laid off people but also found jobs for them in his career as an outplacement manager, said downsizing companies plot layoff strategies carefully. They typically create a matrix listing each person's age, race and gender, making sure the layoffs are spread carefully among those categories, Mr. McGinn, said. Sometimes, Mr. McGinn said, part of the goal of a mass layoff is to get rid of unproductive workers. If one happens to be in his 50s, the company will probably include another 50-year-old in the matrix, just to make sure the unproductive worker cannot sue for age discrimination. To prevent litigation, more and more employers are incorporating waivers into their layoff strategies. Employers who voluntarily offer severance packages during mass layoffs, often require older employees to sign a waiver promising not to sue for age discrimination, in order to get the severance pay and other help, such as outplacement counseling, said Mr. Boymel. "It must be voluntary," he said. "You can't make their last salary check dependent on signing the waiver." In 1986, to regulate the use of waivers, Congress passed an amendment to the 1967 law, the Older Workers Benefits Protections Act. The law provides that when there is a mass reduction in force and the employer offers a voluntary severance package with a waiver, the employer should give workers a list of those to be laid off. The lists don't provide names, just the age and position for each worker being laid off, said Mary Ellen Maatman, an associate professor who teaches employment-discrimination law at Wilmington's Widener University. "What you are doing is giving (older workers) the information to see whether they have an age claim," Professor Maatman said. Depending on the type of layoff, employees have 21 to 45 days to examine the information before making a decision and an additional seven days to change their minds after making the decision. Whether older workers are able to effectively use such a list, in order to decide if layoffs are concentrated in the 40 plus category, is a matter for age-discrimination analysts to study and determine. New Securities Fraud Cases CROSS MEDIA: Paskowitz & Associates Commences Securities Suit in NY ------------------------------------------------------------------- Paskowitz & Associates initiated a securities class action on behalf of purchasers of the common stock of Cross Media Marketing Corporation (ASE: XMM) from November 5, 2001 through July 11, 2002. The suit is pending in the United States District Court for the Southern District of New York. The complaint charges that the Company and its Chairman and Chief Executive Officer Ronald S. Altbach violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, by issuing a series of materially false and misleading statements to the market during the class period. According to the complaint, the Company issued numerous press releases during the class period, which touted the Company's performance and represented that revenues and earnings were increasing. The truth regarding the Company was not fully disclosed until July 12, 2002, when defendants finally revealed that the company would have a loss for the second quarter of 2002, and that revenues for the year would be significantly less than previously predicted. Company stock dropped to $2.71 per share from $4.88 the previous day. The defendants had, prior to that date, among other things misrepresented the impact and nature of FTC proceedings brought against the Company and others. For more details, contact Laurence D. Paskowitz by Phone: 800-705-9529 by Fax: 212-685-2306 or by E-mail: classattorney@aol.com CRYOLIFE INC.: Berger & Montague Commences Securities Suit in N.D. GA ------------------------------------------------------------------- Berger & Montague, PC initiated a securities class action against CryoLife, Inc. (NYSE: CRY) and certain of its principal officers and directors in the United States District Court for the Northern District of Georgia on behalf of all persons or entities who purchased Company securities between April 2, 2001 and July 5, 2002. The suit alleges that defendants 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 issuing materially false and misleading statements throughout the class period regarding quality control problems in the Company's processing of human tissues and heart valves that had the effect of artificially inflating the market price of Company securities. The Company's assurances to the investing public that patient safety was of paramount concern to it and that it complied with applicable governmental processing and quality regulations were knowingly false when made. The Company has demonstrated a pattern of nondisclosure or severe reckless disregard with respect to its disclosures to shareholders. Despite having been put on notice in 2001 that the Centers for Disease Control (CDC) was concerned about infections from tissue implants obtained from the Company and despite having been notified at least by March 22, 2002 that at least one, if not two, patients in whom the Company processed heart valves had been implanted had developed fungal endocarditis, the Company failed to correct its false assurances of quality control and failed to disclose that it was being investigated by the CDC and the US Food & Drug Administration (FDA) for violation of quality control regulations. In fact, on March 29, 2002, no mention of these problems was made at the annual shareholders' meeting. After rumors began to surface in June 2002, the Company revealed to the investing public the fact that the Company had received a warning letter from the FDA citing material violations of FDA safety regulations. In an attempt to downplay the warning letter's significance and to assure investors that the Company would react swiftly to any discovery of areas in need of improvement, the Company falsely assured its investors that it had never before received such a warning. On June 24, 2002, the Company also denied that there was any evidence of fungal infection on either heart valve. The CDC disagreed, however, and called the Company on July 3, 2002 to confirm that the Company had received a letter in March 2002 showing that signs of infection had been confirmed. Then on July 5, 2002, a day on which the stock markets closed at 1:00 p.m., the Company issued a press release admitting that it provided an infected heart valve to a California patient, which led to a frequently fatal fungal infection and removal of the valve. The Company also misrepresented its 2001 income and earnings during the class period, in violation of generally accepted accounting principles (GAAP), overstating both income and earnings per share by approximately 20%, requiring a restatement of its reported financial results for 2001. The market's reaction to the Company's belated disclosures was swift and severe. Following these disclosures, the market price of the Company's common stock dropped from a high of almost $45 per share during the class period and from $23.66 per share just before the disclosure to as low as $9.90 per share on July 10, when the disclosure had been digested. For more details, contact Sherrie R. Savett, Carole A. Broderick, Barbara A. Podell or Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.bergermontague.com DAYTON POWER: Waite Schneider Files Suit On Behalf of Pension Fund ------------------------------------------------------------------ Waite, Schneider, Bayless and Chesley filed a class action against DPL, Inc. (NYSE: DPL), the parent company of Dayton Power & Light Company, and its officer, directors and accountants. The action was brought on behalf of the purchasers of the stock of the Company between January 1, 1995 and July 1, 2002. The suit, filed in the Montgomery County Common Pleas court in Dayton, Ohio, charges that the defendants violated Ohio law by misrepresenting and disguising the true nature of high-risk investments made with over $850 million of DPL's money. According to the complaint, DPL announced on July 1, 2002 that it had lost approximately $200 million of that money in previously undisclosed investments in Latin America. DPL's stock lost over $855 million in market value in the days following the announcement. The complaint also charges that "substantial portions of DPL's directors' and officers' compensation" created a "fixation on generating short term results to push DPL's stock higher." This pressure, according to the complaint, resulted in a failure "to value the Financial Assets portfolio fairly, objectively and impartially." "This lawsuit was brought to protect the pensions and investment of thousands of DPL shareholders who thought they were buying a safe, conservative utility company in Dayton," said Stan Chesley, a nationally prominent class action attorney and one of the trial counsel on the case. "The deception we have alleged shows how the trust that our clients placed in the directors and officers of DPL has been violated; we will ask the court to restore the hundreds of million of dollars that our clients have lost," he added. Jim Cummins, an internationally recognized expert on corporate governance and the other trial counsel for Buckeye Electric said, "The directors and officers have a very simple set of rules to follow - be very careful and be truthful - it's the shareholders money!" Mr. Cummins explained, "The action tells another, now familiar, story of how a board of directors and the highest ranking officers lost sight of those rules and their responsibilities." For more details, contact Stanley M. Chesley by Phone: 513-621-0267 or James R. Cummins by Phone: 513-381-2121 MERRILL LYNCH: Stull Stull Commences Securities Fraud Suit in S.D. NY --------------------------------------------------------------------- Stull Stull & Brody initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of Merrill Lynch B2B Internet HOLDRS depository receipts issued by the Merrill Lynch B2B Internet HOLDRS/SM Trust (AMEX:BHH) between February 24, 2000 and April 8, 2002, inclusive. The suit names as defendants: (1) Merrill Lynch & Co., Inc., (2) Merrill Lynch Pierce, Fenner & Smith, (3) the Trust and (4) signatories of the Registration Statement and Prospectus issued on behalf of the Trust The complaint alleges that defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 by issuing a series of false and misleading statements, and omissions of material fact contained in the Prospectus filed with the SEC on February 24, 2000, for the issuance and initial public offering of B2B Internet HOLDRS depository receipts, through which defendants raised over $950 million. In particular, it is alleged that the prospectus was materially false and misleading because it failed to disclose that defendants recommended the purchase of and set price targets for stocks of certain of the companies that were included as assets of the Trust without any reasonable factual basis therefor, failed to disclose significant material conflicts of interest to obtain investment banking business for Merrill Lynch and failed to disclose material, non-public, adverse information which they possessed about such companies, as well as their true opinion about such companies. It is further alleged that the prospectus failed to disclose that, consequently, stocks of the Underlying Securities covered by Merrill Lynch traded at artificially inflated prices, which in turn artificially inflated the price of the B2B Internet HOLDRS throughout the class period, causing plaintiff and the other members of the class to suffer damages. For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New York NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 or by E-mail: SSBNY@aol.com MERRILL LYNCH: Kirby McInerney Commences Securities Suit in S.D. NY ------------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf all persons who purchased the common stock of Merrill Lynch & Co., Inc. (NYSE:MER), in the period between July 3, 1999 and April 8, 2002. The suit names as defendants: (1) Merrill Lynch & Co., Inc., (2) Merrill Lynch, Pierce, Fenner & Smith, Inc., (3) David H. Komansky, Chairman and Chief Executive Officer of Merrill Lynch during the class period, and (4) Henry Blodget, Merrill Lynch's former Senior Internet and e- commerce analyst The defendants allegedly violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The action further charges Mr. Komansky with violation of Section 20(a) of the 1934 Act. The violations stem from the materially false and misleading statements made by the defendants during the class period that misrepresented the quality of Merrill Lynch's securities analysts and caused Merrill Lynch's stock to trade at artificially inflated prices. The complaint alleges that during the class period, Merrill Lynch publicly touted the objectivity and integrity of its securities analysts. In fact, the complaint alleges, many of the analysts' recommendations were simply part of a quid pro quo offered by Merrill Lynch in an effort to obtain lucrative investment banking business from the companies it covered. As a result, the complaint alleges, Merrill Lynch's shares traded at inflated prices. When evidence of conflicts and other misconduct by Merrill Lynch's analysts were revealed by New York Attorney General Eliot Spitzer on April 8, 2002, Merrill Lynch's shares lost nearly 30% of their value, falling from $53.45 per share on April 8 to close below $38.00 a few weeks later. For more details, contact Ira M. Press or Orie Braun by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: 212-317-2300 or 888-529-4787 or by E-Mail: obraun@kmslaw.com MERCK & CO.: Kirby McInerney Commences Securities Fraud Suit in NJ ------------------------------------------------------------------ Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of all persons who purchased the common stock of Merck & Co., Inc. (NYSE:MRK) in the period between July 1, 1999 and June 21, 2002. The suit charges the Company and certain of its officers and directors with violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Among other things, plaintiff claims that defendants materially overstated the Company's reported revenues by approximately $14 billion during the class period by improperly including as revenue the value of co-payments made by consumers to their pharmacy to cover their portion of the cost of a prescription under an insurance plan. As the complaint alleges that, neither the Company nor its Medco unit ever received any revenue from the co-payments that were made to pharmacies. As a result, during the class period, defendants' financial statements were materially overstated and failed to comply with Generally Accepted Accounting Principles (GAAP). The complaint alleges that defendants' reporting of substantially inflated revenues caused the Company's stock price to become artificially inflated during the class period. After investigative reporting by the Wall Street Journal in late June 2002 revealed that Merck had overstated its revenues by at least $4 billion, and after Merck in early July 2002 made more detailed revenue disclosures which revealed that Merck had booked $14 billion worth of patient co-payments as revenue, Merck shares lost approximately 17% of their value, falling from $52.20 per share to close below $44.00 per share on July 10, 2002. For more details, contact Ian Washburn by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: 212-317-2300 or 888-529-4787 by E-Mail: washburn@kmslaw.com or visit the firm's Website: http://www.kmslaw.com MERCK & CO.: Wechsler Harwood Commences Securities Suit in New Jersey --------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities class action in the United States District Court for the District of New Jersey, on behalf of all investors who bought Merck & Co., Inc. (NYSE:MRK) common stock between July 1, 1999 and June 21, 2002, inclusive against defendants Merck & Co., Inc. and certain of its senior officers and directors. According to the complaint, Merck overstated revenues by billions of dollars from its subsidiary Merck-Medco Managed Care, LLC by including customer co-payments for prescription drugs in its revenues. During the class period, co-payments comprised approximately 10% of Merck's total revenues. The lawsuit claims that Merck violated Generally Accepted Accounting Practices because neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with co-payment money. Patients make co-payments directly to pharmacies when they purchase medicine. On June 21, 2002, The Wall Street Journal reported on Merck's accounting practices and estimated that Merck and Merck-Medco may have overstated their 2001 revenues by as much as $4.6 billion. On July 8, 2002, The Wall Street Journal reported that Merck's revenues for 1999 and 2000 were overstated by approximately $12.6 billion. According to the complaint Merck admitted that the company had been recording prescription drug co-payments as revenue since it acquired Merck-Medco in 1993. On June 21, 2002, Merck's stock fell precipitously from its closing price of $52.20 on June 20, 2002 to a closing price of $49.98 on June 21, 2002, its lowest closing price since late 1997. On the heels of the July 8, 2002 revelations, the price of Merck's common stock dipped further and closed at $47.81 per share on the same day. For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 or by Email: dleifer@whhf.com OMNICOM GROUP: Wechsler Harwood Commences Securities Suit in S.D. NY -------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities class action on behalf of all persons who acquired the common stock of Omnicom Group, Inc. (NYSE:OMC) between April 25, 2000 and June 11, 2002, inclusive in the United States District Court for the Southern District of New York. The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. Specifically, the complaint alleges that the Company and certain of its officers and directors violated federal securities laws by issuing a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of Company securities. The complaint alleges that prior to and throughout the class period, defendants reported that the Company was continuing to experience growth in its revenues and earnings, despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced. As alleged in the complaint, the Company's growth was attributed, for the most part, to the numerous acquisitions made by the Company, which were accretive to the Company's earnings. However, on June 12, 2002, an article in The Wall Street Journal highlighted the Company's acquisition accounting and raised questions concerning the Company's creation of an off-balance sheet entity in which it transferred certain Internet investments. In particular, with respect to the Company's accounting for acquisitions, the article noted that: (1) the Company immediately included revenue and earnings from recent acquisitions in its reported financial results, in contrast to its competitors who excluded the results for the first year after the company was acquired, thereby creating a materially misleading impression of the Company's performance; (2) the Company continued to owe hundreds of millions of dollars in additional payments for companies that it had previously acquired; and (3) the Company faced a potential future liability whereby, under certain circumstances, it might be required to acquire companies in which it had invested. With respect to the off- balance sheet entity, The Wall Street Journal article described the Company's transfer of its Internet investments to Seneca, which had been jointly created with Pegasus Capital LLP in May 2001. According to the article, Seneca had been created as a vehicle for the Company to avoid reporting a loss on its investments in Internet companies that had become devalued. In response to the revelations contained in The Wall Street Journal article, the price of Omnicom common stock dropped precipitously, falling almost 20% to close at $62.28, on volume of more than 31 million shares traded. The complaint also alleges that on June 17, 2002, Omnicom acknowledged that it had received an informal request from the SEC relating to two directors who had reportedly resigned from Omnicom's board for reasons relating to Seneca. For more details, contact Patricia Guiteau by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 or by E- mail: pguiteau@whhf.com REHABCARE GROUP: Schiffrin & Barroway Commences Securities Suit in MO --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Eastern District of Missouri on behalf of all purchasers of the common stock of RehabCare Group, Inc. (NYSE: RHB) from February 7, 2001 through January 21, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 7, 2001 and January 21, 2002. The complaint alleges that, among other things, defendants issued a series of materially false and misleading statements concerning the Company's supplemental staffing division. The complaint alleges these statements were materially false and misleading because they failed to disclose that the supplemental staffing division was experiencing serious operational problems with information systems critical for matching supply with demand and poor employee training and retention and that its revenues and earnings were declining as a result. On January 21, 2002, the Company issued a press release announcing that earnings for its fourth quarter 2001 would be less than half than they had reiterated in late October and that the Company would take a charge of $8.5 to $9.5 million, $3 million of which was for a reorganization of the staffing division. In reaction to the Company's disclosure, as alleged in the complaint, the price of the Company's common stock plummeted by 25% over one trading day on heavy volume, falling from $25.21 per share to $18.70 per share. Prior to the disclosure of the adverse facts described above, as alleged in the complaint, the Company completed a secondary offering of common stock, raising $50 million for the Company and more than $8 million for Company insiders. In addition, Company insiders also sold $4,568,209 worth of the Company's common stock during the class period at artificially inflated prices. For more details, 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 by E-mail: info@sbclasslaw.com or visit the firm's Website: http://www.sbclasslaw.com TELLABS INC.: Rabin & Peckel Commences Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Northern District of Illinois, on behalf of all persons or entities who purchased Tellabs, Inc. (Nasdaq:TLAB) between December 11, 2000 and June 19, 2001, both dates inclusive, against the Company and: (1) Michael J. Birck, and (2) Richard C. Notebaert The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by publicly issuing a series of material misrepresentations during the class period, thereby artificially inflating the price of Company securities. According to the suit, the Company had represented to the public, in press releases and other public statements issued throughout the class period, that: (1) its new products were enjoying strong demand; (2) the seeming slowdown in its business was due to "component- parts shortages which have been corrected;" (3) the Company's business was strong fundamentally; and (4) the Company would meet earnings and revenues expectations. The suit alleges that these, and other, statements were materially false and misleading because, as alleged in the suit, its new optical networking line of products were inferior to the competition and their products were not well-received or in high demand. The suit further alleges that, contrary to the Company's statements to the investing public, the Company's highly-touted acquisition of SALIX was a failure as sales of the product line it gained in the acquisition were falling. On June 19, 2002, the Company issued a press release revealing that second quarter of 2001 revenues would be 35% less than guidance reiterated only weeks before, and that the company's earnings would be breakeven instead of the consensus $0.29 per share. In reaction to the announcement, the price of Company stock fell by 31%, from $23 per share on June 19, 2002, to $15.87 on June 20, 2002, representing a 75% decline from the class period high. During the class period, Mr. Birck sold a total of 80,000 shares of Company stock at prices between $64.25 to $65.38 per share, grossing proceeds of more than $5.18 million. For more details, contact Eric J. Belfi or Sharon Lee by Phone: 800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com TRITON NETWORKS: Leo Desmond Commences Securities Suit in M.D. Florida ---------------------------------------------------------------------- The Law Offices of Leo W. Desmond initiated a securities class action on behalf of shareholders who acquired Triton Network Systems, Inc. (Nasdaq:TNSIE.OB) securities between July 13, 2000 and August 14, 2001, inclusive. The suit is pending in the United States District Court for the Middle District of Florida against: (1) Kenneth R. Vines, (2) Howard "Skip" Speaks, (3) Brian J. Andrew, (4) Joseph Antinucci, (5) Stanley R. Arthur, (6) Bandel L. Carano, (7) James F. Gibbons, (8) Robert P. Goodman, (9) Arjun Gupta, (10) James Wei, (11) Credit Suisse First Boston Corporation, (12) Deutsche Banc Alex. Brown, (13) US Bancorp Piper Jaffray Inc., (14) Ernst & Young, LLP, (15) US Telesources, Inc., and (16) Oak Investment Partners. It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, 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 details, contact Leo W. Desmond by Phone: 888-337-6663, 561-712-8000 by E-Mail: Info@SecuritiesAttorney.com or visit the firm's Website: http://www.SecuritiesAttorney.com TYCO INTERNATIONAL: Kaplan Fox Commences Securities Suit in S.D. FL ------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Tyco International, Ltd. (NYSE:TYC) and certain of its officers and directors, in the United States District Court for the Southern District of Florida. This suit is brought on behalf of all persons or entities who purchased or otherwise acquired Company securities between May 1, 2002 and June 12, 2002, inclusive. The complaint alleges that the Company and certain of its officers and directors violated the federal securities laws. Specifically, the complaint alleges that during the class period defendants failed to disclose the Company's practice of engaging in related-party transactions with its own officers and directors, including: (1) interest-free loans the Company made to employees for personal use; (2) the Company's purchase of a Florida home from its director; (3) the Company's retaining a law firm that employs its director, while the director's compensation at the law firm was based on the amount of work the law firm did for the Company; and (4) the Company's use of funds to pay for executives' personal items Additionally, during the class period defendants failed to disclose the ongoing criminal investigation of one of its top officers. As a result of defendants' failure to disclose the Company's related-party transactions, Company securities traded at artificially inflated levels during the class period. For more details, 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 by E-mail: mail@kaplanfox.com WORLDCOM INC.: Wechsler Harwood Commences Securities Suit in MS Court --------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities class action on behalf of all persons who purchased or otherwise acquired the bonds of WorldCom, Inc. between April 26, 2001 and June 25, 2002, seeking to pursue remedies under the Securities Exchange Act of 1934. The suit names as defendants the Company and: (1) Bernard J. Ebbers, (2) Scott D. Sullivan, (3) the Company's Audit Committee members, and (4) Arthur Anderson, LLP The action is pending in the United States District Court for the District of Mississippi at Jackson. The complaint is based on an overstatement, by $3.8 billion, of the Company's earnings during the class period. As detailed in the complaint, instead of the $1.4 billion in profits the Company reported in 2001 and $130 million in the first quarter of 2002, the Company admits it lost money during those periods. As further detailed in the complaint, the Company, under the guidance of Mr. Ebbers and Mr. Sullivan, booked basic operating costs as capital expenditures, a practice that reduced expenses, and allowed the company to report falsely profits instead of losses in violation of Generally Accepted Accounting Principles. The Company's Audit Committee and Arthur Andersen also knew that this type of accounting practice was improper yet knowingly condoned or recklessly failed to correct the subject financial statements. According to published reports, Andersen's audit reports "could not be relied upon for at least "the five quarters in question." As an experienced auditor charged with the responsibility of preparing disclosures to be filed with the SEC, Andersen knew the alleged conduct did not comport with GAAP, but either intentionally or recklessly disregarded this pervasive fraud to the detriment of the Class. Andersen, however, issued a March 7, 2002, "Report Of Independent Public Accountants," included in WorldCom's improperly prepared 2001 Form 10-K filed with the SEC on March 13, 2002. Anderson's opinion letter falsely stated that it had properly audited the Company's 2001 balance sheet and that in Anderson's opinion "(w)e believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WorldCom, Inc. and subsidiaries as of December 31, 2000 and 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States." For more details, contact Craig Lowther or Samuel K. Rosen by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail: srosen@whhf.com or clowther@whhf.com or visit the firm's Website: http://www.whhf.com ********* 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *