/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/021021.mbx C L A S S A C T I O N R E P O R T E R Monday, October 21, 2002, Vol. 4, No. 208 Headlines ADVANCED LIGHTING: Agrees To Settle Securities Suits For $8.4 Million ADVANCED SWITCHING: VA Court Dismisses Consolidated Securities Suit BAYCOL LITIGATION: Another Consumer Lawsuit Commenced in Canada Courts CANADA: High Court Allows Government To Appeal Ruling in Veterans' Suit CATTLEMAN'S MARKET: Settles Suit Over Legionnaires' Disease Outbreak DELOITTE & TOUCHE: Faces Suit Over Role in Reliance Insurance Collapse ENRON CORPORATION: Trader To Plead Guilty To Manipulating Energy Prices ENRON CORPORATION: Wants Documents in Securities Fraud Suits Sealed FANIMATION DESIGN: Recalls 60,000 Ceiling Fans Due To Injury Hazard GLOBAL CROSSING: Creditors To Tap Into Winnick's Funds For Recovery HEALTHSOUTH CORP.: Lawsuits Question Chief Executive's Sale Of Stock IKEA: Voluntarily Recalls 57,000 Stuffed Teddy Bears For Choking Hazard INTERVOICE-BRITE: Plaintiffs File Amended Securities Suit in N.D. TX INTRAWARE INC.: Plaintiffs File Amended Securities Suit in S.D. NY LIDA BICYCLE: Voluntarily Recalls 2,400 Bicycles For Injury Hazard MICRON TECHNOLOGY: Acknowledges Antitrust Suits Filed Over DRAM Chips SANDATA TECHNOLOGIES: Faces Securities Suits Over Acquisition Proposal SWINGLINE: Recalls 11T Cordless Rechargeable Staplers For Injury Hazard TOPPS CO.: Appeals Court Upholds Dismissal of RICO Claims in Lawsuit W.C. WOOD: Voluntarily Recalls 2,500 Dehumidifiers For Shock Hazard *Pharmaceutical Companies Face Backlash, Opposition From New Opponents New Securities Fraud Cases AVISTA CORPORATION: Cauley Geller Commences Securities Suit in E.D. WA CONSECO INC.: Milberg Weiss Commences Securities Fraud Suit in S.D. IN CREDIT SUISSE: Kaplan Fox Commences Securities Fraud Suit in S.D. NY TXU CORPORATION: Rabin & Peckel Commences Securities Fraud Suit in TX ********* ADVANCED LIGHTING: Agrees To Settle Securities Suits For $8.4 Million --------------------------------------------------------------------- Advanced Lighting Technologies, Inc. agreed to settle all pending securities class actions and derivative lawsuits against it. The agreement to settle these lawsuits calls for a payment of US$8.4 million in cash. The Company faces a consolidated class action pending in the United States District Court, Northern District of Ohio, filed on behalf of purchasers of the Company's stock during the period from December 30, 1997 through September 30, 1998 or various portions thereof. The suit names as defendants the Company and its Chairman and Chief Executive Officer (CEO). The suit alleged generally that certain disclosures attributed to the Company contained misstatements and omissions alleged to be violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, including claims for "fraud on the market" arising from alleged misrepresentations and omissions with respect to the Company's financial performance and prospects and alleged violations of generally accepted accounting principles by, among other things, improperly recognizing revenue and improper inventory accounting. The Company also faces several lawsuits filed by separate shareholders of the Company allegedly on behalf of the Company, derivatively, against officers and directors of the Company. The allegations in the three cases are substantially similar, and the two cases filed in Ohio court, were removed to the United States District Court, Northern District of Ohio, where they are pending. The suit originally filed in federal court, was previously voluntarily dismissed by the plaintiff. The Company was a nominal defendant in these actions. The individual defendants in the suits include: (1) Wayne R. Hellman, the Chief Executive Officer and Chairman of the Board, who is also beneficial owner of more than 5% of the outstanding common stock of the Company, (2) Alan J. Ruud, former Chief Operating Officer and Vice Chairman of the Board, who is also beneficial owner of more than 5% of the outstanding common stock of the Company; and (3) Francis H. Beam, (4) John E. Breen, (5) John R. Buerkle, (6) Theodore A. Filson, (7) Louis S. Fisi, (8) Thomas K. Lime, (9) A Gordon Tunstall and (10) Steven C. Potts, who is Chief Financial Officer and is a former director The suits alleged breaches of duties by the defendants relating to the matters which are the subject of the federal suit, to alleged insider trading by certain directors, to a loan made to Mr. Hellman and to the sale of certain fixture facilities to an investment group led by Mr. Ruud. The agreement does not constitute any admission of wrongdoing on the part of the Company or the individual defendants. The agreements also need definitive settlement documents and final court approval. ADVANCED SWITCHING: VA Court Dismisses Consolidated Securities Suit ------------------------------------------------------------------- The United States District Court for the Eastern District of Virginia dismissed, without prejudice, the consolidated securities class action naming Advanced Switching Communications, Inc. and certain of its officers and directors as defendants. The complaint, originally filed on February 21, 2002, alleged that the Company, certain of its officers and directors and its lead underwriter violated certain provisions of the federal securities laws. The court concluded that the plaintiffs failed to plead facts sufficient to support their claims. The plaintiffs may file an amended complaint or appeal the order granting the motion to dismiss. The Company has no information as to whether an amended complaint will be filed or an appeal will be taken. For more details, contact Investor Relations of Advanced Switching Communications, Inc. by Phone: 1-703-654-6015 or visit the firm's Website: http://www.asc.com BAYCOL LITIGATION: Another Consumer Lawsuit Commenced in Canada Courts ---------------------------------------------------------------------- Bayer, Inc. faces a class action filed in the Supreme Court of Newfoundland and Labrador on behalf of three Newfoundland residents who were injured by the cholesterol-reducing drug, Baycol. An application will also be made to include the residents of the other Atlantic Provinces, which do not have class action statutes. The suit was filed by Ms. Jean Pardy, of Botwood, Newfoundland, who suffered serious damage to her muscle tissue, including severe muscle degeneration in her right bicep, Bruce McCullough of St. John's, Newfoundland, who suffered damage to his muscle tissue, ongoing pain and weakness in his legs, back and arms and by John Ryan of Bishop Falls, Newfoundland, who suffered damage to the muscle tissue in his arms and neck and continues to suffer from constant pain and weakness. According to the Statement of Claim filed today in St. John's, "the defendant was negligent in the design, development, testing, manufacturing, licensing, marketing, distribution, monitoring and sale of Baycol." Baycol was taken off the market in August 2001 but not before 100 deaths worldwide were attributed to it. In extreme cases, rhabdomyolysis, a condition in which muscle tissue breaks down and passes into the blood stream causing kidney failure and eventually death, has occurred. More than one million prescriptions for Baycol were written in Canada. It appears that the Company may have learned of the serious side effects of Baycol long before the drug's recall. The Company's parent company, Bayer AG received a report that the drug may have been a secondary cause in the death of a patient who had taken Baycol over a year and a half before it was introduced to the market. The lawsuit was filed on behalf of Pardy, McCullough and Ryan by Ches Crosbie Barristers of St. John's and class action lawyer David Klein of Klein Lyons of Vancouver. According to Mr. Klein "the needless pain and suffering caused by Baycol could and should have been prevented by more intensive testing and clinical trials before the drug was put on the market." Ches Crosbie commented that "this suit launched under the relatively new class action statute enacted in Newfoundland and Labrador is a prime example how it is now possible for ordinary people to challenge even the largest corporation." For more information, contact Ches Crosbie of Ches Crosbie Barristers by Mail: 169 Water Street, 4th Floor, St. John's, Newfoundland, Canada by Phone: (709) 579-4000 or contact David Klein of Klein Lyons by Mail: 1333 W. Broadway, Suite 1100, Vancouver, B.C. by Phone: (604) 874-7171 CANADA: High Court Allows Government To Appeal Ruling in Veterans' Suit ----------------------------------------------------------------------- The Supreme Court of Canada has granted the Government of Canada leave to appeal a March 2002 decision by the Ontario Court of Appeal, which had ruled in favor of thousands of disabled Canadian veterans. The veterans are members of a multi-billion dollar lawsuit launched against the federal government in October 1999. That Ontario Court of Appeal ruling followed an appeal launched by the Crown in November 2001. The government appealed a judgment by Superior Court Justice John H. Brockenshire in Windsor, Ontario in October 2001. Justice Brockenshire had also ruled in the veterans' favor. The suit, certified in October 1999, was brought against the federal government for its failure to pay interest on millions of dollars of monies that it held in trust since World War I on behalf of disabled veterans who had been deemed unable to manage their financial affairs. The federal government held the veterans' money in the nation's treasury where the funds sat idle since the early 1900s. Despite numerous reports indicating that they had a moral and legal obligation to do so, successive federal governments failed to pay interest on these veterans' funds. After the Ontario Court of Appeal ruled in favor of the veterans and found that the federal government had breached the veterans' trust, the Crown sought leave to appeal to the Supreme Court of Canada. In responding to the Supreme Court's decision, the lawyers said, "We say that the government has breached its position of trust towards these disabled veterans. This is the argument that we will be taking to the Supreme Court." Other developments in this suit loom on the horizon. On October 28th, arguments begin on whether the federal government must re-pay the millions of dollars confiscated by it, when the disabled veterans died. Then, on November 4th, the two sides will meet in court again to argue over how much is actually owed by the government on account of decades of unpaid interest. The veterans' lawyers have placed the figure in excess of $2 B. The estimates have grown since recent government disclosure that, for years, it had been under-reporting the trust amounts in the annual Public Accounts of Canada. "It now appears that our previous calculation of the government's indebtedness to the veterans was low, by as much as 40 per cent," the lawyers added. For more details, visit the Website: http://www.veteransinterest.org CATTLEMAN'S MARKET: Settles Suit Over Legionnaires' Disease Outbreak -------------------------------------------------------------------- Grocery chain Cattleman's Market reached a settlement in the last of 28 lawsuits filed against its Detroit branch over a 1996 outbreak of Legionnaires' disease that killed four people and sickened 30 others, the Associated Press reports. The outbreak was linked to an air conditioning cooling tower at the grocery chain. Legionnaires' disease is an airborne bacteria, which when people inhale it, may cause pneumonia-like symptoms and high fevers, within two weeks. The disease is especially dangerous to the elderly, people with weakened immune systems and children. William Brown, who was sickened, and the family of Lloyd Bisballe, who died, sued Cattleman's, the manufacturer of the cooling system and the company that maintained it, Associated Press reports. The settlement was reached Wednesday, just before the trial was to begin. Terms of the agreement were not released. The other lawsuits were settled earlier this year. DELOITTE & TOUCHE: Faces Suit Over Role in Reliance Insurance Collapse ---------------------------------------------------------------------- Accounting firm Deloitte & Touche, LLC faces a civil lawsuit filed by Philadelphia insurance officials in the state's Commonwealth Court, relating to its role in inflating Reliance Insurance Co.'s financial statements and contributing to its collapse, the Associated Press reports. In the suit, state Insurance Commissioner M. Diane Koken accused Deloitte & Touche and Deloitte actuary Jan A. Lommele of "professional negligence and malpractice, misrepresentation and breach of contract." They were also accused of aiding and abetting breaches of fiduciary duties by the Company's chairman, New York financier Saul P. Steinberg, and other former officials of the defunct insurance giant, AP reports. The firm denied any wrongdoing in response to the latest lawsuit, which was filed Tuesday. Spokesman Paul Marinaccio declined to comment on specifics, but told AP, "Deloitte & Touche performed its services for Reliance in accordance with all applicable professional standards and will defend itself accordingly." The lawsuit alleged that the accountants understated expected insurance claims by more than $500 million and overstated assets by nearly that much. That left the company's 1999 reported financial surplus a "billion-dollar overstatement," according to the suit. ENRON CORPORATION: Trader To Plead Guilty To Manipulating Energy Prices ----------------------------------------------------------------------- Former top Enron energy trader Timothy Belden will plead guilty in San Francisco federal court to a charge he manipulated California's energy market to drive up power prices, officials told the Associated Press. Law enforcement sources, speaking on condition of anonymity, said Mr. Belden, the former head of trading in Enron's Portland, Ore., office, will plead guilty to one charge of conspiracy to commit wire fraud. In July, The Oregonian newspaper of Portland, Ore., reported that Mr. Belden might be trying to reach an agreement with prosecutors in exchange for his testimony. At that time, Meltzer said his client would not seek immunity before talking to federal or state officials, the Associated Press reports. Federal investigators have interviewed a California Senate panel investigating the state's energy crisis about evidence uncovered in its long-running investigation of market manipulation. A federal grand jury in San Francisco has been weighing criminal charges related to the energy crisis, according to reports. The Senate panel has long believed Belden to be the mastermind behind price manipulation as outlined in internal company memos. Those memos describe how Enron bought California power at cheap, capped prices, routed it outside the state, and then sold it back into California at vastly inflated prices, the Associated Press reports. Neither Mr. Belden nor his attorney, Paul Meltzer of Santa Cruz, could be reached for comment, AP reports. ENRON CORPORATION: Wants Documents in Securities Fraud Suits Sealed ------------------------------------------------------------------- Fallen energy giant Enron Corporation asked a federal judge in Houston to prevent the public release of millions of documents it has given to plaintiffs in the shareholder lawsuits. The Houston-based company argues that it had no time to mark out or cull proprietary information in the millions of pages provided the government, the Houston Chronicle reports. The Company has asked US District Judge Melinda Harmon to protect the confidentiality of millions of documents provided to government agencies and Congress, and which it now must provide to shareholders in discovery. The University of California Board of Regents, the lead plaintiff in a would-be class action, already has asked Judge Harmon not to seal any documents or put them under protective order. The Company, in turn, wants all documents sealed, while allowing lawyers to ask the judge to make particular documents public. "Courts routinely enter these orders," Enron attorney Stephen Susman said. The Company said the data it gave the government, and must soon put in a Houston depository, includes information that could help its competitors, impair the value of Enron assets, violate confidentiality contracts and harm the Company's position in disputes with other businesses. While Enron has filed for bankruptcy protection, it is trying to re-organize as a smaller profitable company in bankruptcy court in New York. The lawsuits against the company, its executives, auditors, lawyers and bankers allege that the defendants fraudulently cheated shareholders and employees. The plaintiffs say this case is about lack of public disclosure. It follows, therefore, they say, that attorneys should be allowed to disclose the content of documents in court pleadings and to the public. FANIMATION DESIGN: Recalls 60,000 Ceiling Fans Due To Injury Hazard ------------------------------------------------------------------- Fanimation Design and Manufacturing, Inc. is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling about 60,000 ceiling fans. The hanger bracket can break, which could cause the fan to fall from the ceiling and seriously injure anyone standing nearby. The Company has received four reports of hanger brackets breaking, including three instances where the fan fell from the ceiling. No injuries have been reported. The recalled ceiling fans include the models: (1) the Islander series with model number FP320 and date codes 01- 00 through 03-02, (2) the Louvre series with model number FP1320 and date codes 01- 00 through 03-02 and (3) the Tropicana series with the model number FP1600 and date codes 12-01 through 04-02 The model number and date codes can be found on the manufacturer's sticker, located just above the motor of the fan. Lighting showrooms, fan specialty stores and electrical distributors nationwide sold the fans from February 2000 through July 2002 for between $550 to $850. For more details, contact the Company by Phone: 888-284-8938 between 9 am and 5 pm CT Monday through Friday for a free, easy-to-install backup bracket, or visit the firm's Website: http://www.fanimation.com. GLOBAL CROSSING: Creditors To Tap Into Winnick's Funds For Recovery ------------------------------------------------------------------- A Global Crossing Ltd. creditors' group asked longtime Chairman Gary Winnick on Wednesday to resign from the telecommunications company he founded and said it may try to tap the billionaire philanthropist's personal fortune to recoup corporate funds, The Los Angeles Times reports. The request, made by a U.S. Bankruptcy Court committee of unsecured creditors, marks the first time that anyone has formally sought the ousting of Mr. Winnick from Global Crossing, which filed for bankruptcy protection in January after incurring billions of dollars of debt while building a worldwide fiber-optic network, The Times reported. If the creditors have their way, Mr. Winnick, 54, would no longer have a say in Global Crossing's operations. In Mr. Winnick's case the committee could pursue reimbursement or compensation from him for any acts of corporate waste, excessive compensation, mismanagement or breach of fiduciary duty -- or some combination of those claims. Mr. Winnick has been criticized for encouraging lavish executive pay packages and perks, The Times said, according to a Reuters report. Global Crossing executives could not confirm receipt of the committee's letter late Wednesday, according to The Times. A Company spokesperson was not immediately available to comment to Reuters. HEALTHSOUTH CORP.: Lawsuits Question Chief Executive's Sale Of Stock -------------------------------------------------------------------- Investors in HealthSouth Corp., who have filed several lawsuits against the Company after its stock price collapsed when it sharply lowered its earnings outlook, also have filed lawsuits against the Company's founder and chairman Richard M. Scrushy, questioning his sale of Company stock before the August 27 announcement that triggered the stock price plunge, Associated Press Newswires reports. Mr. Scrushy is under investigation by the Securities & Exchange Commission. Company shares, which closed at $11.97 a share on August 26, plummeted the next day upon the announcement of lowered earnings, dropping 47 percent in the two days after the announcement. The stock closed Wednesday at $3.61. The Company has suspended plans to spin off its surgery center division into a separate, publicly traded company. The split does not make economic sense based on conditions in the debt and equity markets, the Company said. Birmingham, Alabama-based HealthSouth, which operates the largest network of outpatient surgery facilities in the country, had announced the plan to spin off the surgery center division in a conference call with investors and analysts on August 27. "We believe the enhanced focus we have brought to our surgery center operations during this process will help us to improve those operations while they continue as part of our national network," chief executive William T. Owens said in a news release. The Company is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitation services, with about 1,900 locations in the United States, Great Britain, Australia, Puerto Rico and Canada. The Company had $4.3 billion in revenue last year. IKEA: Voluntarily Recalls 57,000 Stuffed Teddy Bears For Choking Hazard ----------------------------------------------------------------------- IKEA is cooperating the US Consumer Product Safety Commission (CPSC) by voluntarily recalling 57,000 stuffed teddy bears. The plastic beads inside of the bears could come out of the seams, posing an aspiration hazard to young children who could inhale the small beads. IKEA has not received any report of incidents. This recall is being conducted to prevent the possibility of injuries. The recalled SNUTTIG Bear Soft Toys are red, yellow, blue and black and are about six inches tall. The bears have a contrasting color on the nose, ears, and feet. The name "SNUTTIG," the model number 700-371-56, the manufacturer code 17596 and the words "Made in Indonesia" are all printed on the product label. IKEA stores nationwide sold the bears from August 2001 through September 2002 for about $2. For more information, contact the Company by Phone: 888-966-4532 anytime or visit the firm's Website: http://www.ikea-usa.com. INTERVOICE-BRITE: Plaintiffs File Amended Securities Suit in N.D. TX -------------------------------------------------------------------- Plaintiffs in the consolidated securities suit pending against Intervoice-Brite, Inc. filed an amended suit in the United States District Court, Northern District of Texas, Dallas Division. Several suits were initially commenced on behalf of purchasers of common stock of the Company during the period from October 12, 1999 through June 6, 2000. The plaintiffs have filed claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the Securities and Exchange Commission Rule 10b-5 against the Company as well as certain named current and former officers and directors. In the suits, plaintiffs claimed that the Company and the named current and former officers and directors issued false and misleading statements during the class period concerning the financial condition of the Company, the results of the Company's merger with Brite and the alleged future business projections of the Company. Plaintiffs have asserted that these alleged statements resulted in artificially inflated stock prices. These suits were later consolidated. The Company filed a motion to dismiss the complaint in the consolidated proceeding. The Company asserted that the complaint lacked the degree of specificity and factual support to meet the pleading standards applicable to federal securities litigation. On this basis, the Company requested that the court dismiss the complaint in its entirety. Plaintiffs responded to the Company's request for dismissal. On August 8, 2002, the court entered an order granting the Company's motion to dismiss the suit. In the order dismissing the lawsuit, the court granted plaintiffs an opportunity to reinstate the lawsuit by filing an amended complaint. Plaintiffs filed an amended complaint on September 23, 2002. The Company intends to file a motion to dismiss the amended complaint. All discovery and other proceedings not related to the dismissal will be stayed pending resolution of the Company's request to dismiss the amended complaint. The Company believes that it and its officers complied with their obligations under the securities laws, and intends to defend the lawsuits vigorously. INTRAWARE INC.: Plaintiffs File Amended Securities Suit in S.D. NY ------------------------------------------------------------------ Plaintiffs in the securities class actions pending against Intraware, Inc. file an amended suit in the United States District Court for the Southern District of New York. The amended complaint, filed on behalf of all persons who purchased the Company's common stock from February 25, 1999 (the date of its initial public offering) through December 6, 2000, names as defendants the Company, three of its present and former officers and directors and several investment banking firms that served as underwriters of the Company's initial public offering. The complaint alleges liability under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, on the grounds that the registration statement for the offerings did not disclose that: (1) the underwriters had agreed to allow certain customers to purchase shares in the offerings in exchange for excess commissions paid to the underwriters; and (2) the underwriters had arranged for certain customers to purchase additional shares in the aftermarket at predetermined prices. The amended complaint also alleges that the underwriters misused their securities analysts to manipulate the price of Company stock. No specific damages are claimed. Lawsuits containing similar allegations have been filed in the Southern District of New York challenging over 300 other initial public offerings and secondary offerings conducted in 1999 and 2000. All of these lawsuits have been consolidated for pretrial purposes before United States District Court Judge Shira Scheindlin of the Southern District of New York. Certain pre-trial motions have been scheduled. No discovery has been served on the Company. The Company believes it has meritorious defenses to these claims. LIDA BICYCLE: Voluntarily Recalls 2,400 Bicycles For Injury Hazard ------------------------------------------------------------------ Lida Bicycle Co., Ltd. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 2,400 men's bicycles. The frames of these bicycles can break apart, causing the rider to fall and suffer injuries. The Company and the bicycle distributor, Kent International Inc., of Parsippany, N.J., have received four reports of the frames of these bicycles breaking. Two riders suffered minor contusions and abrasions. The other two riders were not injured. The bicycle is a 26-inch, 21-speed, dual-suspension men's bicycle with a double-bar, white frame. "Kent" is written on the down tube and head tube of the bicycle. The decal reading "2100DH" or "PRO-X" appears on the top tube near the head of the bicycle. Discount department stores in Michigan, Ohio, Indiana, Kentucky and Illinois, and independent bicycle shops in New York and New Jersey sold these bicycles from April 2002 through August 2002 for between $200 and $250. For more information, contact the Company by Phone: 800-451-5368 between 9 am and 5 pm ET Monday through Friday, or visit the firm's Website: http://www.kentbicycles.com. MICRON TECHNOLOGY: Acknowledges Antitrust Suits Filed Over DRAM Chips --------------------------------------------------------------------- Micron Technology Inc. admitted that 21 class actions have been filed against it relating to a Department of Justice investigation into alleged anticompetitive practices, the Associated Press Newswires reports. In its annual report to the Securities and Exchange Commission, the Company said it received a federal grand jury subpoena in June seeking information about possible antitrust violations in the "Dynamic Random Access Memory" or "DRAM" industry. Following the announcement of the investigation, at least 21 class actions were filed against the Company and other memory chip suppliers in various federal and state courts around the country. The Company has declined to comment beyond the comments mentioned in the filing. The Company issued the following warning in its annual report, "We are unable to predict the outcome of these lawsuits. A court determination that the company has violated federal or state antitrust laws could result in significant liability and could have material adverse effect on our results of operations or financial condition." On Wednesday, the federal Judicial Panel on Multidistrict Litigation in Washington, DC, which bundles class action under one litigation proceeding, transferred the first antitrust case against the chipmakers from New York to San Francisco. At least five lawsuits seeking unspecified damages, originally filed in Idaho federal district court are also in line for consideration by the panel, an administrator said. The lawsuits generally allege violations of the Sherman Antitrust Act and other federal and state laws relating to the sale and pricing of memory products. The lawsuits contend that the Company and other manufacturers of DRAM chips secretly agreed to cut production and artificially raise prices in late 2001 and early 2002. The Boise, Idaho cases are being shepherded by attorney Philip H. Gordon, who was not available for comment Wednesday. Seattle attorney Steve Berman, who has worked on national-scale lawsuits, such as the states' case against US tobacco companies, is also representing a number of plaintiffs in Idaho. SANDATA TECHNOLOGIES: Faces Securities Suits Over Acquisition Proposal ---------------------------------------------------------------------- Sandata Technologies, Inc. faces two securities class actions filed the Delaware Chancery Court against it and the members of its Board of Directors: (1) Bert E. Brodsky, (2) Ronald L. Fish, (3) Martin Bernard, (4) Hugh Freund, and (5) Gary Stoller The suits uniformly allege that the defendants breached their fiduciary duties to the Company and the Company's public stockholders in connection with Sandata Acquisition Corporation's proposal to acquire all of the outstanding public shares of the Company. The plaintiffs also allege, among other things, that the directors serving on the special committee are not independent, and that the merger consideration is inadequate. The complaint seeks certification of the action as a class action, both preliminary and permanent injunction against the proposed transaction, and rescission if it is not enjoined. The Company is unable to predict the outcome of this matter. SWINGLINE: Recalls 11T Cordless Rechargeable Staplers For Injury Hazard ----------------------------------------------------------------------- Swingline is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 11,100 cordless, rechargeable staplers. If a consumer inadvertently releases the spring-loaded staple magazine while holding the stapler close to his/her face, there is a risk of injury from a fully loaded magazine striking a consumer in the face. The Company has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The recalled cordless stapler is silver and black and comes with a black charger and charger base. The stapler, charger, and charger base have the name "Swingline" printed on them. The stapler's model number, 48201, as well as the words "Made in China," are stamped on the battery cover on the bottom of the stapler. If the battery cover has the letter "S" in the upper right corner, then the stapler is not included in the recall. Office supply retailers nationwide sold the staplers from June 2002 through September 2002 for about $75. For more details, contact the Company by Phone: 800-352-6853 between 9 am and 9 pm ET Monday through Friday for a free replacement, or visit the firm's Website: http://www.swingline.com/customerservice. TOPPS CO.: Appeals Court Upholds Dismissal of RICO Claims in Lawsuit -------------------------------------------------------------------- The United States Ninth Circuit Court of Appeals upheld a lower court's dismissal of claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) in a class action pending against The Topps Company, Inc. The suit was commenced in November 1998 and alleges that the Company violated the RICO and the California Unfair Business Practices Acts, by its practice of selling sports and entertainment trading cards with randomly-inserted "insert" cards, allegedly in violation of state and federal anti-gambling laws. The suit sought treble damages and attorneys' fees on behalf of all individuals who purchased packs of cards at least in part to obtain an "insert" card over a four-year period. On January 22, 1999, plaintiffs moved to consolidate the suit with similar class actions pending against several of the Company's principal competitors and licensors in the California Court. On January 25, 1999, the Company moved to dismiss the complaint, or, alternatively, to transfer the suit to the Eastern District of New York or stay the suit pending the outcome of the declaratory judgment action pending in the Eastern District of New York. In May 1999, the court denied the Company's motions to dismiss or transfer the suit but granted the Company's motion to stay the suit pending the outcome of the Declaratory Judgment Action. The court also denied plaintiffs' motion to consolidate the suit with similar purported class actions. On April 18, 2000, the court entered an order requiring plaintiffs in the suit as well as in the other purported suits to show cause why all such actions should not be dismissed. In June 2000, the court vacated its May 14, 2000 order denying the Company's motion to dismiss the class, dismissed the RICO claim in the suit with prejudice and without leave to replead, and dismissed the pendent state law claims without prejudice. Plaintiffs filed a notice of appeal of the California Court's decision to the United States Court of Appeals for the Ninth Circuit on July 21, 2000. On August 20, 2002, the Ninth Circuit affirmed the dismissal of the RICO claims. If the suit were reinstated on further appeal, an adverse outcome in the suit could materially affect the Company's future plans and results. W.C. WOOD: Voluntarily Recalls 2,500 Dehumidifiers For Shock Hazard ------------------------------------------------------------------- W.C. Wood Company is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 2,500 dehumidifiers. Internal wiring can abrade on metal parts, presenting a risk of electric shock to consumers if the insulation wears through. The Company discovered the problem through routine testing. No injuries or incidents have been reported. This recall is being done to prevent the possibility of injury. The recall includes Wood's and Edison model 40-pint capacity dehumidifiers. The dehumidifiers were sold in white (Wood's) and beige (Edison) plastic with the word "Wood's" or "Edison" printed across the control panel. Both models have control knobs for fan speed and humidity level, and a "bucket full" light. The model and serial numbers are written on a label behind the removable water bucket on the front of the unit. The label reads in part, "Wood's" or "Edison" and "Made in Canada." (1) Wood's: Model Number - WMD40W; Serial Number - 08603098 - 08822606 and (2) Edison: Model Number - EMD40; Serial Number - 08669467 - 08669490 Independent retailers sold the dehumidifiers nationwide from March 2002 through June 2002 for between $160 and $190. For more information, contact the Company by Phone: 800-826-8578 between 8 am and 4:30 pm ET Monday through Friday or visit the firm's Website: http://www.wcwood.com. *Pharmaceutical Companies Face Backlash, Opposition From New Opponents ---------------------------------------------------------------------- As drug prices have escalated, several unlikely coalitions of consumer groups, corporations, state governments and labor unions have joined together to challenge the once seemingly invincible pharmaceutical industry, reports the Christian Science Monitor. The consumer groups and others criticize the pharmaceutical firms on ethics and marketing, but the industry sees itself as an unfair target. The challengers charge that some of the drug companies' business practices are misleading, unethical, and in some cases outright illegal. As a result, they believe it is contributing to the rise in drug prices, which is busting state Medicaid budgets and driving up the cost of insurance for average Americans. The industry says it is being unfairly targeted in this anti-corporate climate. It also warns that the current series of assaults will only undermine its ability to bring new cutting-edge drugs to the market, which will hurt consumers in the long term. Still, the pharmaceutical industry is finding that a combination of lawsuits and grassroots calls for change has challenged the dominance of lobbyists' once-powerful purse strings on Capitol Hill. The tide, say some health-policy activists, appears to be turning against the industry. "There is a backlash afoot in this country, and it is not just the angry activists," says Bradley Cameron of Business for Affordable Medicine. "It's the governors, the corporations, the labor unions and the insurance companies." Some moves also have been made in Congress to face this social issue. In the House, lawmakers recently held a hearing on a bill that would close loopholes in a law that federal officials say major drug manufacturers are using to keep lower-cost, generic drugs off the market. Then, it was the Bush administration's turn it issued a warning two weeks ago that many of the drug companies' longstanding marketing practices - including the lavish dinners, as well as the practice of offering doctors trips and tickets to Broadway shows and sporting events - could violate federal antifraud and kickback laws. The Office of the Inspector General of Health and Human Services, which issued the guidance, was particularly concerned with drug companies hiring doctors and other healthcare professionals as "consultants." It also questioned the incentives given to insurance-benefit managers in hopes of persuading them to cover a particular brand-name drug. The primary concern is that these practices are prompting doctors to switch patients to new, more-expensive drugs that may not be any more effective than older ones. The Pharmaceutical Manufacturers of America (PhRMA), which represents the brand-name drug companies, defends their practices and says that the drug companies put out a new set of guidelines for its sales representatives last summer. "We clearly indicate that sports events and lavish entertainment are inappropriate," says PhRMA's Jeff Trewhitt. "You will see a lot less of that in the future." Consumer activists are also hopeful the guidance will have an impact. However, the activists note how deeply ingrained such marketing practices are in the medical culture. Larry Sasich, a pharmacist and research analyst at the consumer group Public Citizen, says the federal guidance reads like "a little primer for the world's largest corporations on how they should behave ethically and honestly." "It makes you wonder where these companies have been in the first place," he adds. "But the message is that the federal government is going to go after" them. Other analysts, like Robert Blendon of Harvard's School of Public Health, do not think the warning will have a "huge effect" on company spending. "But it will have an effect on the ethics of the profession and public confidence," said Mr. Blendon. "People don't want their physicians to have an economic stake in the drugs they are prescribing." The drug companies' marketing practices are just one area of their business practices under assault. In the last three years, dozens of lawsuits have been filed against drug manufacturers challenging some of their patent practices. A patent for a new drug lasts 20 years. Under the federal Hatch-Waxman Act, a company can gain a 30-month extension if it files another patent for its drug. Generic drug makers maintain that their brand-name rivals routinely file frivolous patients, particularly on their most lucrative products. In some cases, they file multiple patents to get multiple extensions and keep generic versions off the market indefinitely. Industry's view of these matters is different. PhRMA's Mr. Trewhitt calls that view a gross distortion. He notes that since the 1984 passage of the Hatch-Waxman bill, which playing field more to generic drugs, the market share for generics has increased from 19 to 47 percent. However, this summer, the Federal Trade Commission found that drug companies have been filing more multiple patents since 1998. In eight instances involving blockbuster drugs, it said the companies had filed questionable patents in an effort to keep generic drugs off the market. After the report was issued, the industry suffered a rare defeat in the Senate on the drug bill now under consideration in the House. PhRMA opposes the legislation, saying it will make more difficult to do research and bring new drugs to market. In another attack on the industry, 29 states filed a class action last spring against Bristol-Myers Squibb. They say the Company entered into an illegal antitrust agreement with a generic drug company to keep its less-expensive generic version of a cancer-fighting pill off the market. The Company denies wrongdoing. Consumer advocates believe the growing pressure on the industry will eventually impact the cost of health insurance. "It is a step in the right direction," says Ronald Pollack of Families USA. "But, ultimately, we are going to be very clear and say some of the practices are illegal, and punish people if they continue them." New Securities Fraud Cases AVISTA CORPORATION: Cauley Geller Commences Securities Suit in E.D. WA ---------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Eastern District of Washington on behalf of purchasers of Avista Corporation (NYSE: AVA) publicly traded securities during the period between November 23, 1999 and August 13, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants made misstatements of material facts and omitted to state material facts in their public statements and elsewhere, including failing to disclose that: (1) the Company was engaged in highly risky energy trading activities with Enron and Portland General Electric involving so-called "Ricochet" or "megawatt laundering" trades in which the Company acted as a middleman between Enron and Portland General Electric so that Enron could evade California's caps on electric power prices and charge California artificially high prices for electricity; (2) the Company routinely acted as a middleman between affiliates such as Enron and Portland General Electric in order to facilitate transactions to proceed which would have been prohibited under federal rules if the affiliates had engaged in them without an intermediary; and (3) the Company was and is exposed to substantial contingent legal liabilities as a result of the foregoing, including the threatened revocation of its license to trade electric power on the wholesale markets, or market-based rate authority, by the Federal Energy Regulatory Commission. The complaint alleges that on August 14, 2002, after the Federal Energy Regulatory Commission announced that it may take formal enforcement action on charges that the Company helped manipulate California power prices during 2000, Company stock tumbled 11.85 percent, and on September 17, 2002 Avista stock traded at as low as $11.10 per share, down from its class period high of $67.55. For more details, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com CONSECO INC.: Milberg Weiss Commences Securities Fraud Suit in S.D. IN ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Conseco, Inc. (OTC BB: CNCE.OB) between October 24, 2001 to August 9, 2002, inclusive. The action is pending in the United States District Court for the Southern District of Indiana, Indianapolis Division, against the Company and: (1) Gary C. Wendt (CEO and Chairman during the class period), (2) Charles B. Chokel (CFO until March 6, 2002), (3) William J. Shea (President and COO) and (4) James S. Adams (Chief Accounting Officer and Treasurer). The complaint charges 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 materially false and misleading statements to the market between October 24, 2001 to August 9, 2002. According to the complaint, in order to allay investor concerns regarding the Company's liquidity, defendants, throughout the class period, represented that such concerns were "misplaced," that "the 2002 liquidity issues are behind us," and made similar statements representing that the Company had overcome its liquidity problems for 2002. The complaint further alleges that these, and other, representations were materially false and misleading because they failed to disclose that the measures the Company had undertaken to better its liquidity had not proceeded as planned and the Company was still very much at risk of defaulting on its debt obligations in 2002. On August 9, 2002, the Company shocked the market by issuing a press release announcing that its turnaround had failed, that the Company was seeking to restructure in $6.5 billion debt with creditors and that the Company will default on certain bond interest payments. On August 12, 2002, the New York Stock Exchange suspended trading in Company stock. At the time trading was suspended, Company stock was selling for $0.34 per share, a decline of 93% from the class period high. For more details, 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: conseco@milbergNY.com or visit the firm's Website: http://www.milberg.com CREDIT SUISSE: Kaplan Fox Commences Securities Fraud Suit in S.D. NY -------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Credit Suisse First Boston Corporation (CSFB), 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 Agilent Technologies (NYSE:A) between December 13, 1999 and September 9, 2002, inclusive. The complaint alleges that CSFB violated the federal securities laws by issuing analyst reports regarding Agilent that recommended the purchase of Agilent common stock and which set price targets for Agilent common stock, without any reasonable factual basis. The complaint further alleges, among other things, that when issuing its Agilent analyst reports, CSFB failed to disclose significant, material conflicts of interest which it had concerning the Agilent reports, because of CSFB's desire to obtain investment banking business from Agilent. Throughout the class period, CSFB maintained "BUY" or "HOLD" recommendation on Agilent in order to obtain and support lucrative financial deals for CSFB. As a result of CSFB's false and misleading analyst reports, Agilent common stock traded at artificially inflated levels during the class period. For more details, contact Joel B. Strauss or Donald R. Hall by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-mail: mail@kaplanfox.com TXU CORPORATION: Rabin & Peckel Commences Securities Fraud Suit in TX --------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of all persons or entities who purchased or otherwise acquired securities of TXU Corporation (NYSE:TXU) on or before October 14, 2002 of this year. The Company, Erle Nye and Michael McNally are named as defendants in the complaint. The complaint alleges that defendants violated Section 10(b) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements and omitting to disclose material adverse information about the Company's operations and prospects during the class period. Specifically, the complaint alleges that defendants issued several statements that the dividend was stable and they saw nothing that would reduce amount of the dividend. On October 11, 2002, Mr. Nye stated, "I believe the dividend is secure ... I don't know anything today that would make me think otherwise." Three days later, the Company announced that it would reduce its dividend by 80 percent. 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 ********* 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 * * *