/raid1/www/Hosts/bankrupt/CAR_Public/021230.mbx
C L A S S A C T I O N R E P O R T E R
Monday, December 30, 2002, Vol. 4, No. 256
Headlines
APPLE COMPUTER: Discovery Starts in Mac OS X Consumer Fraud Suit in CA
APPLE COMPUTER: Dismisses Without Prejudice Securities Lawsuits in CA
APPLE COMPUTER: Agrees To Settle Nationwide Lawsuit Over Airport System
ARIZONA: Former Inmates Seek $300M In Damages Over Clemency Requests
BARNEY'S NEW YORK: Labels "Without Merit" Consumer Lawsuit in CA Court
BOMBAY COMPANY: Denies Allegations in Employee Overtime Wage Suit in CA
BROOKLYN LOLLIPOP: Recalls 22T Electric Fans For Electrocution Hazard
CANADA: Woodlands School Faces Suit Alleging Students' Sexual Abuse
CATERPILLAR INC.: Employees Allege "Discriminatory" Evaluation System
CENTURY TOOL: Voluntarily Recalls 6,300 Propane Stoves For Fire Hazard
CREDIT DATA FIRMS: Consumers Sue, Challenging Credit Reports' Accuracy
DAVE & BUSTERS: Merger Termination Leads To Securities Suit Dismissal
dELiA*s INC.: Forges Agreement To Settle Consolidated Securities Suit
DOV PHARMACEUTICAL: Agrees To Settle Consolidated Securities Fraud Suit
ENRON CORPORATION: Court Denies Defendant Firm's Motions For Dismissal
ENTERGY CORPORATION: Retired Engineer Claims Bias In Hiring, Promotions
F5 NETWORKS: Asks NY Court To Dismiss Consolidated Securities Lawsuit
H&R BLOCK: Settlement Criticized For Unfair Compensation For Plaintiffs
INDIAN FUNDS: Six Lawyers Undergoing Ethics Probe In Accounting Lawsuit
KMART CORPORATION: Recalls 50,000 Wooden Vehicles For Choking Hazard
LANE BRYANT: Opposes Certification of CA Employees Overtime Wage Suit
MADRIGAL AUDIO: Voluntarily Recalls 1,300 Speakers For Injury Hazard
MEN'S WEARHOUSE: Consumer Lawsuit Trial Set February 2003 in CA Court
NBTY INC.: Plaintiffs Dismiss Shareholder Derivative Suit in DE Court
NBTY INC.: Consumers Commence Suit Over Advertising of Supplement in NY
NBTY INC.: Hearing For Consumer Lawsuit Certification Set Spring 2003
NETWORK ENGINES: NY Court Dismisses Two Officers From Securities Suit
OHIO: Inmates Commence Suit Over Conditions In Montgomery County Jail
ORACLE CORPORATION: Asks CA Court To Dismiss Amended Securities Lawsuit
ORACLE CORPORATION: Committee Labels Derivative Claims "Without Merit"
PEP BOYS: Appeals Court Upholds Certification of CA Overtime Wage Suit
QWEST COMMUNICATIONS: 14 Former Employees File Lawsuit For Overtime Pay
STARBUCKS CORPORATION: CA Court Approves Overtime Wage Suit Settlement
TALX CORPORATION: Seeks Dismissal of Securities Fraud Suit in E.D. MO
THOMAS & BETTS: TN Court Grants Approval To Securities Suit Settlement
THQ INC.: Reaches Agreement To Settle Consolidated Securities Lawsuit
UNITED STATES: Arab, Muslim Groups Sue INS, Ashcroft Over Detentions
New Securities Fraud Cases
CREDIT SUISSE: Pomerantz Haudek Commences Securities Lawsuit in S.D. NY
DIVERSA CORPORATION: Schiffrin & Barroway Lodges Securities Suit in NY
LEAP WIRELESS: Cauley Geller Commences Securities Fraud Suit in S.D. CA
NASH FINCH: Schiffrin & Barroway Lodges Securities Lawsuit in MN Court
NUI CORPORATION: Cohen Milstein Files Securities Fraud Suit in S.D. NY
TELLIUM INC.: Schiffrin & Barroway Lodges Securities Suit in NJ Court
UBS WARBURG: Akin Gump Commences Lawsuit For Securities Act Violations
*********
APPLE COMPUTER: Discovery Starts in Mac OS X Consumer Fraud Suit in CA
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Discovery is proceeding in the consumer class action pending against
Apple Computer, Inc. in the Los Angeles Superior Court on behalf of a
potentially nationwide class of purchasers of certain Power Macintosh
G3 computers.
The suit alleges violation of the Consumer Legal Remedies Act (CLRA)
arising from allegedly poor performance while running the Company's Mac
OS X operating system, specifically relating to 2D hardware
acceleration, QuickTime movie hardware acceleration, 3D graphics
performance and DVD movie playback. Plaintiff seeks actual damages,
injunctive relief, restitution, punitive damages, attorneys' fees and
other relief.
The Company has answered the complaint, denying all allegations and
alleging numerous affirmative defenses. The parties participated in
mediation in October 2002 without resolution.
APPLE COMPUTER: Dismisses Without Prejudice Securities Lawsuits in CA
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The United States District Court for the Northern District of
California dismissed without prejudice the securities class actions
pending against Apple Computer, Inc. and its Chief Executive Officer,
on behalf of persons who purchased the Company's publicly traded common
stock between July 19, 2000, and September 28, 2000.
The complaints allege violations of the 1934 Securities Exchange Act
and seek unspecified compensatory damages and other relief. The
Company believes these claims are without merit and intends to defend
them vigorously.
The Company filed a motion to dismiss the suits on June 4, 2002, which
was heard by the Court on September 13, 2002. On December 11, 2002,
the court granted the Company's motion to dismiss for failure to state
a cause of action, with leave to plaintiffs to amend their complaint
within thirty days.
APPLE COMPUTER: Agrees To Settle Nationwide Lawsuit Over Airport System
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Apple Computer, Inc. reached an agreement to settle a nationwide
consumer class action filed in the Santa Clara County Superior Court on
behalf of purchasers of the Company's AirPort Card and AirPort Base
Station (AirPort System).
Plaintiffs alleged that the Company engaged in false advertising and
unfair business practices (among other causes of action) by advertising
that the AirPort System is Internet-ready and failing to disclose that
the AirPort System is incompatible with certain Internet service
providers, primarily America Online.
The Company answered the complaint, denying all allegations and
alleging numerous affirmative defenses. The parties reached a
settlement that received final approval by the court on October 8,
2002. The Company is administering the settlement. Settlement of this
matter did not have a material effect on the Company's financial
position or results of operations.
ARIZONA: Former Inmates Seek $300M In Damages Over Clemency Requests
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Eight former inmates who say former Governor Fife Symington improperly
handled their requests for clemency are seeking $300 million in damages
from the state, Associated Press Newswires reports. There could be up
to 175 members of the class if the case is certified as a class action.
The group claims they were incarcerated years beyond the date when they
should have been set free. The claimants' sentences were automatically
commuted after former Governor Symington failed to take official action
on recommendations for shorter sentences within the required 90 days.
The lawsuit was recently filed in Pima County Superior Court against
the Arizona Board of Executive Clemency and the Department of
Corrections. A. Bates Butler III is representing the eight former
inmates and he has filed the request that the lawsuit be granted class
action status.
State legislators in 1994, relaxed some mandatory sentencing laws,
setting up instead a process for the clemency board to recommend
commutations for some prisoners. If the Board of Executive Clemency
unanimously recommended a shorter sentence, it would take effect unless
rejected by the governor with a signature verified by the secretary of
state, within 90 days of the Board's action.
The Board recommended shorter sentences for about 200 inmates. The
state began releasing inmates earlier this year as a result of the
state's Supreme Court ruling that Governor Symington did not do the
paperwork correctly to deny clemency petitions. In some cases, a
Symington staffer, not the governor, signed the orders rejecting the
request for a reduced sentence. The Supreme Court held that the action
did not comply with the law because former Governor Symington had not
acted officially within the prescribed 90 days.
In some cases, even after the Supreme Court ruling, the Department of
Corrections did not release the inmates recommended for release by the
Board of Executive Clemency. Therefore, Mr. Butler is arguing the
state deprived liberty, inflicted cruel and unusual punishment and
deprived the inmates of their right to privacy. Some of the inmates
recommended for clemency are still behind bars.
BARNEY'S NEW YORK: Labels "Without Merit" Consumer Lawsuit in CA Court
----------------------------------------------------------------------
Retailer Barney's New York faces a class action filed in the Superior
Court for the State of California, County of San Diego, alleging two
causes of action for purported violations of California's Civil Code
and Business and Professions Code relating to the alleged requesting by
the Company of certain information.
The Company is reviewing the lawsuit and believes that it is without
merit. The Company believes that it has substantial defenses to the
claims. In management's judgment, based in part on consultation with
legal counsel, this case is not expected to have a material adverse
effect on the Company's financial position.
BOMBAY COMPANY: Denies Allegations in Employee Overtime Wage Suit in CA
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The Bombay Company, Inc. faces a class action filed in California state
court, asserting claims for overtime pay under California law for
managers of The Company's California stores.
Based upon its review of the complaint and its initial investigation of
this matter, the Company believes the plaintiffs' claims are without
merit and it intends to vigorously defend against them. While it is
not possible to predict the outcome of this legal action or provide a
reasonable estimate of potential liability, if any, that may arise, the
Company believes that costs resulting from the action will not have a
material adverse impact on its consolidated financial position, cash
flows or liquidity, but could possibly be material to the consolidated
results of operations in a particular quarter or fiscal year.
BROOKLYN LOLLIPOP: Recalls 22T Electric Fans For Electrocution Hazard
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Brooklyn Lollipop Imports & Exports, Inc. is cooperating with the US
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 22,000 electric fans. These electric fans have undersized
wiring, use a power plug that is not polarized, have an improperly
sized grill, and overheat, all of which could cause electrocution,
electric shock, fire, and finger entrapment hazards to consumers. The
Company has not received any reports of incidents. This recall is
being conducted to prevent the possibility of injuries.
The recalled electric fans, which have the brand name "Lollipop"
printed on the fan blade cover, have model numbers V1185, V1186, V1865
and V1783, which can be found on the motor housing. The V1185, V1186,
and V1865 models have labels that read, "Hi Velocity Lollipop Air
Circular." The three-speed, four-position fans are either floor
mounted or table top units. The model V1783 has a clip-on base.
These fans were manufactured in China.
Discount and variety stores in the metropolitan New York area sold
these electric fans from May 2000 through July 2002 for between $10 and
$15.
For more details, contact the Company by Mail: 7 Marcus Garvey Blvd.,
Brooklyn, NY 11206 or by Phone: (718) 388-9526 between 9 am and 5 pm ET
Monday through Friday.
CANADA: Woodlands School Faces Suit Alleging Students' Sexual Abuse
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A lawsuit has been commenced by the Public Guardian and Trustee of
British Columbia on behalf of two former residents of Woodlands school
who were allegedly abused while in the facility's care, Public Guardian
and Trustee, Jay Chalke announced in a statement.
"These individuals should be compensated for what happened to them,"
said Mr. Chalke. "We are confident the steps we are taking today will
provide an avenue to obtain this redress."
The Public Guardian and Trustee will be applying to the Supreme Court
of British Columbia to have the lawsuit certified as a class action on
behalf of those former Woodlands residents who were abused. The date
for the hearing to certify this action as a class action has not been
set at this time. The province of British Columbia is the defendant in
the action.
The Public Guardian and Trustee is the legal representative for a
number of former Woodlands residents. The lawsuit follows a finding of
systemic abuse at the Woodlands school documented in an administrative
review released in July this year by the Ministry of Children and
Family Development. Former ombudsman, Dulcie McCallum, conducted the
review entitled "The Need to Know." When the government released the
McCallum Report in July 2002, they also referred certain specific cases
to the Public Guardian and Trustee for further investigation.
"The government has provided certain records related to specific
incidents identified by Ms. McCallum," said Mr. Chalke. "Our
investigation continues as we obtain further records and information.
In the meantime, I remain hopeful that these matters can be resolved
and these individuals be compensated without the expense and delay of a
trial."
For more details, contact Sharon Stone, Director, Planning, Policy and
Communications by Phone: (604) 660-4484 or visit the site:
http://www.trustee.bc.ca
CATERPILLAR INC.: Employees Allege "Discriminatory" Evaluation System
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A two-year-old performance evaluation system is being used to drive
older employees out of Caterpillar Inc., according to an age-
discrimination lawsuit filed against the heavy-equipment maker,
Associated Press Newswires reports. The plaintiffs' attorney is
seeking class action status for the lawsuit.
Twenty-nine current and former Caterpillar workers claim the new
process "can be, and was, misused by supervisors to discriminate
against and to hasten the departure of older employees" because of
their age. The workers received good evaluations until the new system
was implemented in May 2001, said Peoria, Illinois, attorney Patricia
Benassi, who recently filed the lawsuit in US District Court in Peoria.
Poor evaluations of the 29 older workers followed the new system's
implementation, affecting the pay of these older employees and
threatening their jobs if performance ratings did not improve, the
lawsuit alleges. Younger employees whose performance was similar or
worse than the 29 older workers, received, however, better ratings,
making them eligible for better raises and other rewards, the lawsuit
claims.
The plaintiffs' attorney Ms. Benassi said the lawsuit seeks back pay
lost because of the poor evaluations, adjustments to pensions and other
Benefits, as well as punitive damages. Another goal, said Ms. Benassi,
is to "put a stop to this policy," which she said has forced some
workers to retire before they are financially ready.
Company spokeswoman Lori Porter said, "The process is based on
performance, period. The ratings have nothing to do with a person's
age. This is a way we can reward our higher performers." She added
that employees are rated based on goals developed in meetings with
their supervisors. The process is used to evaluate about 26,000
management and non-production salaried employees.
CENTURY TOOL: Voluntarily Recalls 6,300 Propane Stoves For Fire Hazard
----------------------------------------------------------------------
Century Tool and Manufacturing Co., Inc. is cooperating with the US
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 6,300 propane-powered camping stoves. The burner assembly in the
stoves can restrict the flow of gas, which can cause a leak. The
leaking gas can ignite and weaken the hose, causing it to separate from
the stove and pose a fire hazard to consumers. The Company has
received eight reports of hoses separating from the stove, causing one
minor injury.
The recalled stoves include the Century, Hillary, and LL Bean brand
names. The stoves have a drip tray, two or three burners, and a black
or green base with a label identifying the brand name. The
manufacturing date (050202 through 073102) and model number (4660,
4665, 4675, 4730, 4960, 72861, and 4960LLB) are printed on the inside
of the stove's lid. The stoves were manufactured in the United States.
Sporting goods, camping supply and mass merchandise stores nationwide
sold these stoves from May 2002 through September 2002 for up to $90.
For more details, contact the Company by Phone: (800) 435-4525 between
8 am and 4:30 pm CT Monday though Friday or visit the firm's Website:
http://www.centurytoolmfg.com.
CREDIT DATA FIRMS: Consumers Sue, Challenging Credit Reports' Accuracy
----------------------------------------------------------------------
A 58-year-old mechanic is challenging the accuracy of reports issued by
the three largest purveyors of credit data in the world: Experian,
Equifax and TransUnion, the Atlanta Journal-Constitution reports.
Franklin Clark went to court because he wanted the world to know he had
never filed for bankruptcy, but he did co-sign a truck loan for his
son-in-law, who later did. Even though Mr. Clark made sure the truck
payments were made on time and the loan paid off, when he went to buy a
car, he was turned down because his own credit report carried a
bankruptcy notation.
What makes Mr. Clark's case more significant than other lawsuits
alleging damage from credit report errors is that it was granted class
action status. Attorneys for Mr. Clark and his fellow plaintiffs
believe it is one of only three so designated under the Fair Credit
Reporting Act, and the largest by far.
The Fair Credit Reporting Act, which governs the credit reporting
industry, requires companies to use "reasonable procedures to ensure
the maximum possible accuracy" of credit reports. There are estimates
that a third or more of all credit reports contain errors, although
attorney for plaintiffs have acknowledged in court documents that no
reliable statistics exist. Class action status raises the financial
stakes and gives plaintiffs the strength of an army. Without that
status, individuals are on their own against larger and better-financed
legal opponents.
"We don't think we had their attention until the judge certified the
class," said Douglas Smith, a Spartanburg, South Carolina, attorney and
member of the plaintiffs' legal team. The defendant companies admitted
as much in an unsuccessful appeal of the class action certification.
The companies argued before the Fourth US Circuit Court of Appeals that
the class designation would impose "intense settlement pressure" and
would invite additional suits.
A class certification order transforms one or two individual claims of
doubtful merit into extremely high-stakes litigation with the prospect
of damages verdict exceeding $1.6 billion for each defendant, according
to the companies' arguments.
"That's a bazooka aimed at the head of the defendants," said Emory law
professor Richard Freer, a specialist in civil law procedure. Once a
class is certified, said Professor Freer, "the incentive for the
defendants to settle goes through the roof." For that reason,
Professor Freer thinks Mr. Clark's case is unlikely to go to trial,
which would begin in July if court-ordered mediation is not successful
by January 30.
All the consumers in the class have three things in common, according
to US District Judge Margaret Seymour, who is hearing the Clark case in
Spartanburg, South Carolina; the plaintiffs have not filed for
bankruptcy, their credit reports include the notation "bankruptcy" and
the notation does not indicate that the account involved in a
bankruptcy was jointly held.
The defendants argue that a lender can differentiate between
individuals actually in bankruptcy and those who co-signed a note for
the bankrupt consumer. However, attorneys for Mr. Clark claim the
distinction is not clear. For these reasons, Professor Free says such
a case could change how credit companies fill out their reports. One
way to make them do that "is to hit them with a big judgment."
DAVE & BUSTERS: Merger Termination Leads To Securities Suit Dismissal
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The merger agreement under which a group led by Dave & Busters, Inc.'s
founders and certain members of its senior executive management,
together with Investcorp S.A., a global investment group, and co-
investors organized by Investcorp will acquire the Company through a
newly-formed holding company, D&B Holdings I, Inc has been terminated,
leading to the dismissal of the shareholder class actions pending
against the Company.
The Company was served with a complaint filed purportedly on behalf of
its stockholders alleging breaches of fiduciary duty by its directors
in connection with their approval of the transactions contemplated by
the merger agreement. The suit, filed in state district court in
Dallas County, Texas on May 31, 2002, purports to seek an injunction
preventing consummation of the originally proposed tender offer and
merger transaction and unspecified damages.
The Company was also served with four similar complaints filed in the
State of Missouri, one in the circuit court of Greene County and three
in the circuit court of Cole County, each filed in June 2002. The
suits name as defendants the Company and each member of its Board of
Directors.
The Company answered the complaint filed in Dallas County, denying all
of the allegations of the plaintiffs, and filed a motion to dismiss for
the complaint filed in Greene County for improper venue. In July 2002,
the plaintiffs in the Dallas County and one of the Cole County
complaints filed amended class action complaints alleging that the cash
consideration in the amended merger transaction of $13.50 per share is
inadequate and renewing the initial allegations of their complaints.
Prior to filing answers in the Cole County cases and the commencement
of discovery in any of the pending cases, the Company reached agreement
in principle with all plaintiffs for a standstill of all litigation
activity and a tentative settlement of all claims against it and its
directors, contingent on the consummation of the merger transaction.
The merger agreement was terminated in October 2002. In November 2002,
the Company was informed by counsel for the plaintiffs that the
standstill would continue indefinitely in anticipation of the voluntary
dismissal without prejudice of all of the pending actions. Since that
time, one of the Cole County cases and the Dallas County case have been
dismissed and the Company is awaiting similar filings in the remaining
cases.
dELiA*s INC.: Forges Agreement To Settle Consolidated Securities Suit
---------------------------------------------------------------------
dELiA*s Inc. reached an agreement to settle the consolidated securities
class actions filed against it, certain of its officers and directors
and one former officer of a subsidiary in the United States District
Court for the Southern District of New York.
The suit, filed on behalf of the purchasers of Company securities
during the period January 20, 1998 through September 10, 1998,
generally alleges that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder by making
material misstatements and by failing to disclose allegedly material
information regarding trends in our business. The complaint also
alleges that the individual defendants are liable for those violations
under Section 20(a) of the Securities Exchange Act.
In April 2000, the Company and the other named defendants filed a
motion to dismiss the lawsuit, which the court denied. In December
2001, the court certified the class. The Company filed its answer to
the consolidated amended complaint in February 2002 and merit discovery
was completed in May 2002 and all other discovery was completed in
September 2002.
The parties have reached an agreement in principle on a settlement of
this action and on December 5, 2002, an order discontinuing the action
was filed with the court, providing that the case is discontinued
without prejudice. In the event the settlement is not consummated by
January 17, 2003, either party may apply to the court to have the case
re-instated. A settlement will not become effective until a
stipulation of settlement is executed by all parties and finally
approved by the court.
The settlement will be covered under the Company's insurance policy.
In the event the settlement is not consummated and the case is re-
instated, the Company intends to continue to vigorously defend against
this action, which the Company also believes is covered under its
insurance policy. In either event, the Company does not expect the
ultimate resolution of this lawsuit to have a material adverse effect
on its results of operations, financial position or cash flow.
DOV PHARMACEUTICAL: Agrees To Settle Consolidated Securities Fraud Suit
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DOV Pharmaceutical, Inc. entered into a settlement agreement, which is
subject to court approval, to settle the securities class action
lawsuits arising from or relating to the Company's April 25, 2002
initial public offering of 5 million shares of common stock.
Since April 29, 2002, a number of lawsuits alleging violations of the
securities laws have been filed in the US District Court for the
Southern District of New York and the US District Court for the
District of New Jersey against the Company and certain of the Company's
officers, directors and underwriters. These lawsuits were consolidated
in the Southern District of New York, entitled In re DOV
Pharmaceutical, Inc. Securities Litigation, Case No. 02-CV-3271 (RWS).
The settlement, to be presented to the court, includes all defendants
and covers as a class all those who purchased common stock of DOV in or
traceable to the Company's initial public offering through December 20,
2002 and suffered damages. Pursuant to the settlement, the class
members collectively will receive $250,000 in cash and 500,000 six-year
warrants with a strike price of $10 per warrant.
Dr. Arnold Lippa, Chairman and CEO of the Company said in a statement,
"We remain confident that the securities class action lawsuits filed by
plaintiffs were without merit and that DOV acted appropriately at all
times and fully complied with its obligations to its stockholders. We
believe, however, that it is in the best interest of the Company and
its stockholders to settle these lawsuits, now consolidated,
expeditiously because of the distractions, legal fees and uncertainties
of litigation."
For more details, contact Barbara Duncan, Chief Financial Officer of
DOV Pharmaceutical, by Phone: 1-201-968-0980, or Kathleen Eppolito of
Scientia Communications, by Phone: 1-718-281-1809, or visit the firm's
Website: http://www.dovpharm.com
ENRON CORPORATION: Court Denies Defendant Firm's Motions For Dismissal
----------------------------------------------------------------------
The federal judge handling the Enron Corporation securities lawsuit
ruled against several major financial institutions, law firms and
Arthur Andersen, substantially denying most defendants' motions to be
dismissed from the case. The ruling clears the way for Enron
shareholders to begin the process of depositions and evidence discovery
in the case. In a separate decision, Judge Melinda Harmon, also ruled
that documents provided by defendants during discovery would not be
sealed from the public.
"Today's decision by Judge Harmon is a major victory for Enron's
investors. We are gratified by the obvious care with which Judge
Harmon has made her decision and will be studying the opinion in detail
over the coming days. We look forward to aggressively pursuing the
case on behalf of the class," said James E. Holst, general counsel for
the University of California, which is lead plaintiff in the securities
class action.
In a 306-page ruling issued in the US District Court for the Southern
District Court of Texas in Houston, Judge Harmon denied in their
entirety the motions of J.P. Morgan Chase, Citigroup, Credit Suisse
First Boston, Canadian Imperial Bank of Commerce and Barclays Bank as
well as those of Enron's accountants, Arthur Andersen LLP, and Enron's
corporate legal counsel, Vincent & Elkins. Merrill Lynch's motion was
also denied provided that plaintiffs supplement their complaint as
indicated by the court. The motions by Bank America and Lehman
Brothers to have Section 10(b) fraud claims dismissed were granted but
the plaintiffs' claims of liability under Section 11 of the 1933
Securities Act were allowed to proceed. Judge Harmon dismissed the
claims against Deutsche Bank, and Kirkland & Ellis' motion was granted.
"This decision confirms the validity of our legal claims against the
major defendants, and leaves in the case defendants with resources to
pay substantial compensation to the class," said William Lerach, senior
partner at Milberg, Weiss, Bershad, Hynes & Lerach, the university's
lead counsel. "It also should open the way for discovery, which has
been stayed pending the decision, to commence. We will review the text
of the decision over the coming days and provide additional details on
the court's analysis as appropriate. We are also pleased that the court
has rejected the defendants' attempts to have the evidence produced
during the lawsuit kept secret."
In April, the University of California, as lead plaintiff, filed a
consolidated complaint that added nine financial institutions, two law
firms and other new individual defendants to a list that already
included 29 current and former Enron executives and the accounting firm
of Arthur Andersen LLP. Judge Harmon began reviewing defendants'
motions to be dismissed from this complaint over the summer.
The 485-page amended complaint laid out the Enron scheme in detail,
naming the nine financial institutions as key players in a series of
fraudulent transactions that ultimately cost shareholders more than $25
billion. Two law firms were also added to the list of Enron defendants
because of their significant and essential involvement in the fraud -
Enron's Houston-based corporate counsel Vinson & Elkins, as well as
Chicago-based Kirkland & Ellis, which Enron used to represent a number
of so-called "special purpose entities."
For more details, contact Trey Davis of the University of California by
Phone: 1-510-987-0056 or 1-510-526-0626 by E-mail: trey.davis@ucop.edu
or visit the Website: http://www.ucop.edu/news/enron
ENTERGY CORPORATION: Retired Engineer Claims Bias In Hiring, Promotions
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Hiring and promotions at Entergy Corporation are left in the hands of
managers who are not given clear guidelines, resulting in biased
decisions, a lawsuit against the company claims, according to a report
by Associated Press Newswires. The plaintiff is seeking class action
status for the lawsuit.
Edward R. Watson, an engineer who retired from a job at Arkansas
Nuclear One (ANO), at Russellville, Arkansas, in January 2001, recently
filed the lawsuit against Entergy and ANO, in federal court. The
lawsuit argues that Entergy's managers use subjective standards instead
of clear objective guidelines in deciding who will be hired and
promoted.
"The candidate-selection processes to fill open supervisory and
management positions, as well as developmental positions, have been
administered in a highly subjective manner that requires African-
American candidates to have more specific qualifications and experience
while relieving many Caucasian candidates from having the same
qualifications and experience levels for filling (the same) open
positions," the lawsuit states.
The lawsuit seeks lost wages and benefits, as well as punitive and
compensatory damages. The case was assigned to US District Judge
William Wilson, Jr. Mr. Watson's lawsuit says that his last job
upgrade was in 1992, although he received Entergy's "Peak Performer
Award" in 1996, and did not retire until January 19, 2001.
F5 NETWORKS: Asks NY Court To Dismiss Consolidated Securities Lawsuit
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F5 Networks, Inc. asked the United States District Court for the
Southern District of New York to dismiss the consolidated securities
class action filed against it, certain investment banking firms that
underwrote its initial and secondary public offerings, and some of
the Company's officers and directors.
The suit asserts that the registration statements for the Company's
June 4, 1999 initial public offering and September 30, 1999 secondary
offering failed to disclose certain alleged improper actions by the
underwriters for the offerings. The consolidated amended complaint
alleges claims against the Company defendants under Sections 11 and 15
of the Securities Act of 1933, and under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934.
Other lawsuits have been filed making similar allegations regarding
the public offerings of more than 300 other companies. All of
these various consolidated cases have been coordinated for pretrial
purposes as "In re Initial Public Offering Securities Litigation."
The Company believes that it has meritorious defenses to the lawsuits.
However, an unfavorable resolution of the actions could have a
material, adverse effect on the Company's business, results of
operations or financial condition.
H&R BLOCK: Settlement Criticized For Unfair Compensation For Plaintiffs
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H&R Block Inc. is drawing fire for a proposed settlement of a Texas
class action calling for class members to get coupons while the
plaintiffs' lawyers will receive $49 million in cash, The Kansas City
Star reports.
The Wall Street Journal said the settlement was drawing "particularly
strong criticism from some class-action experts, on everything from the
size of the legal fees to the true value of the coupons." The
newspaper quoted University of Texas law professor Jack Ratliff, who
said he "would find that a highly suspect settlement, if I were an
appellate judge."
Company officials told The Wall Street Journal that the Company had
disclosed the entire cost of the settlement, whose fairness would be
"determined by the court, based on the value to be received by the
class members, not on what the attorneys receive."
The lawsuit accused the Company of failing to disclose fees it received
from Beneficial National Bank for refund anticipation loans made by the
bank. The Company said the fees it received were licensing fees the
lender paid to be affiliated with Block's name. Beneficial is a unit
of Household International. Block admitted no wrongdoing. The Texas
judge, in a move that caught Block by surprise, said he intended to
grant the plaintiffs' request for partial summary judgment and award
plaintiffs $74.9 million.
Then came the proposed settlement by Block, whose terms of settlement
call for Block to provide a package of five coupons providing $20
rebates for tax preparation or electronic filing services, five coupons
good for a tax planning book with a retail value of $14.95 and five
coupons good for tax preparation software with a retail value of
$39.95.
Not revealed when Block made the settlement announcement was that it
would pay $49 million in legal fees to the plaintiffs' lawyers. The
Company only said it would take a pretax charge of $41.7 million for
its share of the settlement costs.
The plaintiffs' lead lawyer is Robert C. Hilliard, a partner with a
small practice in Corpus Christi, Texas. Mr. Hilliard told The Wall
Street Journal that his fee was justified by the complexity of the case
and the financial risk he undertook when he agreed to take the case
some five years ago.
INDIAN FUNDS: Six Lawyers Undergoing Ethics Probe In Accounting Lawsuit
-----------------------------------------------------------------------
A federal judge recently ordered a court ethics panel to investigate
six Justice Department attorneys for their conduct in a landmark class
action against the government that seeks billions of dollars and was
filed on behalf of more than 300,000 Native Americans, The Washington
Post reports.
In a stinging 20-page opinion, US District Judge Royce C. Lamberth also
blocked the Interior and Justice Departments from continuing to send
mass mailings to the Indian plaintiffs that include a provision that
would terminate the Indians' rights to claim damages, even as the
lawsuit continues.
Judge Lamberth already has held three Cabinet officials in contempt of
court for their failures in Indian trust fund reform, including
Interior Secretary Gale Norton. His most recent order in the six-year-
old case said that government attorneys had failed to ask for court
permission to send the notices to more than 1,100 plaintiffs. That was
a clear violation of rules governing attorney conduct, Judge Lamberth
wrote, and he referred the issue to the disciplinary panel of US
District Court in Washington, D.C.
"The court . is at an utter loss to understand why defendants thought
this court would consider it acceptable for them to include language
(in the letters) that extinguishes the very rights that are the heart
of this class-action litigation," wrote Judge Lamberth. The court's
Committee on Grievances, which investigates allegations of misconduct,
could dismiss the case or issue a range of sanctions.
"It is just astonishing," said Keith Harper, an attorney with the
Native American Rights Fund, who is helping to represent plaintiffs.
"They communicated with our clients in violation of court orders, even
when the issue was pending before the judge." In court motions filed
earlier, the Justice Department attorneys said they did not think they
were required to inform the court about the letters.
The Indian plaintiffs are seeking a full historical accounting of the
Individual Monies trust fund, a sprawling series of accounts that was
started in 1887, when the government forced Indian tribes off 90
million acres of their land. In return, they and their heirs were
granted royalties from the sale of oil, gas, timber, mineral and other
rights on an additional 11 million acres.
The fund now generates more than $500 million a year in royalties to at
least 300,000 account holders. However, so may records have been lost
or incompetently kept over the decades that the government is unable to
provide an accurate history for a single account. The Indians filed a
class action in 1996, claiming the government owes them at least $10
billion in lost or missing funds.
However, in October, with the trust fund under Judge Lamberth's
oversight, the government sent out 1,100 notices to trust fund account
holders, claiming that enclosed statements were full and accurate
historical accounts. The data would be "final and cannot be appealed"
unless the recipient filed a challenge within 60 days, the notice said.
The Interior and Justice Departments were planning to send an
additional 14,235 historical accounts when Judge Lamberth blocked the
move this week. Judge Lamberth's order says that any other attorneys,
either from Justice or Interior, who participated in the mailings also
would be investigated.
KMART CORPORATION: Recalls 50,000 Wooden Vehicles For Choking Hazard
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KMart Corporation is cooperating with US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 50,000 candy-filled,
wooden vehicles. These products may be given to children as toys. The
wheels on the wooden toys may break off into small parts, which may
pose a choking hazard to young children. The Company has yet to
receive any incident reports, but is conducting the recall to prevent
the possibility of injuries.
The recalled wooden vehicles include a red wagon, truck and train and
were packaged with candy. The following UPC codes are located on the
bottom of the vehicles: 694405900012 (wagon), 694405900029 (truck), and
694405900036 (train). The wooden toy vehicles were made in China.
Kmart stores nationwide sold these wooden vehicles from November 2002
through December 2002 for about $5.
For more details, contact the Company by Phone: (800) 63KMART anytime
or visit the firm's Website: http://www.kmart.com.
LANE BRYANT: Opposes Certification of CA Employees Overtime Wage Suit
---------------------------------------------------------------------
Retailer Lane Bryant, Inc. is investigating a class action filed
against it in Alameda Superior Court, California, whether it should be
appropriate for class treatment.
The suit, commenced in October 2001 by a terminated employee of the
Company, alleges that the plaintiff and all Lane Bryant store sales
managers in California were misclassified as exempt employees, and are
actually nonexempt and entitled to be paid overtime which they had not
received. The plaintiff alleges violations of Labor Code Sections 1194
and 515 and the Industrial Welfare Commission Order promulgated
pursuant to those Sections, as well as a violation of Business &
Professions Code Sections 17,200 et seq. The plaintiff seeks back pay
and injunctive relief for the misclassification, and reimbursement and
disgorgement of profits for the violation of the Business & Professions
Code.
The Company will aggressively oppose class certification and the merits
of the class case should it be certified, or the individual case should
it not be certified. Although the ultimate outcome of this matter
cannot be predicted with certainty, the Company does not believe that
the case will have a material impact on its financial condition or
results of operations.
MADRIGAL AUDIO: Voluntarily Recalls 1,300 Speakers For Injury Hazard
--------------------------------------------------------------------
Madrigal Audio Laboratories, Inc. is cooperating with the US Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 1,300
subwoofer speakers. A screw inside of the subwoofer can cause a high
voltage short, which could cause a severe injury to consumers through
an electric shock. The Company has received one report of electric
shock, although no injuries have been reported.
The recalled Revel B-15 subwoofers have an outer cabinet with a black
or gray speaker grill on the front and are about 20 inches in width,
height, and depth. The brand name "Revel" is printed on the bottom
left of the rear panel and "PERFORMA B15 SUBWOOFER" is printed on the
bottom right. The 1000W subwoofers were made in the United States.
Specialty audio dealers sold the subwoofers nationwide and in Puerto
Rico from January 2001 through October 2002 for about $3,000.
For more details, contact the Company by Phone: (800) 424-8043 between
9 am and 5 pm ET Monday through Friday or visit the firm's Website:
http://www.revelspeakers.com.
MEN'S WEARHOUSE: Consumer Lawsuit Trial Set February 2003 in CA Court
---------------------------------------------------------------------
Trial in the consumer class action filed against The Men's Wearhouse,
Inc. is set to commence February 24,2003 in the Superior Court of
California for the County of San Diego.
The suit alleges several causes of action, each based on the factual
allegation that the Company advertised and sold men's slacks at a
marked price that was exclusive of a hemming fee for the pants. The
suit seeks:
(1) permanent and preliminary injunctions against advertising
slacks at prices which do not include hemming,
(2) restitution of all funds allegedly acquired by means of any
act or practice declared by the court to be unlawful or
fraudulent or to constitute unfair competition under certain
California statutes,
(3) prejudgment interest,
(4) compensatory and punitive damages,
(5) attorney's fees and
(6) costs of suit
The Company believes that the suit is without merit and the allegations
are contrary to customary and well-recognized and accepted practices in
the sale of men's tailored clothing. The suit was subsequently amended
to add similar causes of action and requests for relief based upon
allegations that the Company's alleged "claims that (it) sell(s) the
same garments as department stores at 20% to 30% less" are false and
misleading. The Company also believes that such added causes of action
are without merit. The court ruled against the plaintiff's motion
for class certification, declining to certify a class.
On October 17, 2002, the court granted summary adjudication in favor of
the Company on the plaintiff's false advertising claim on behalf of the
general public relating to hemming fees, and also reaffirmed its
earlier ruling denying class certification. The court found there were
triable issues of fact, and therefore denied summary adjudication on
the remaining claims.
NBTY INC.: Plaintiffs Dismiss Shareholder Derivative Suit in DE Court
---------------------------------------------------------------------
Plaintiffs in the shareholder derivative lawsuit filed against certain
of NBTY, Inc.'s officers and directors voluntarily dismissed the suit,
which was filed in the Chancery Court in Delaware. The suit alleged
that the named officers and directors failed to disclose material facts
during the period from January 27, 2000 to June 15, 2000, which
purportedly resulted in a decline in the price of the Company's stock
after June 15, 2000.
A consolidated stockholder class action complaint, which was filed in
the Eastern District of New York in 2000, predicated on the same
allegations, was dismissed by that court on September 28, 2002 and the
case formally closed on October 31, 2002.
NBTY INC.: Consumers Commence Suit Over Advertising of Supplement in NY
-----------------------------------------------------------------------
NBTY, Inc. faces a consumer class action filed in New York state court
against it and several manufacturers and retailers of so-called pro-
hormone supplements including Vitamin World, the Company's subsidiary.
Pro-hormones are substitutes such as androstenedione that plaintiffs
allege are hormone precursors ingested to promote muscle growth.
Plaintiffs allege that the advertising and labeling of certain pro-
hormone supplements overstate their efficacy and do not fully disclose
their risks, and seek class certification and injunctive and monetary
relief. The action was severed into separate class actions against
each of the defendants.
On December 6, 2002, an amended class action was filed against Vitamin
World that purported to elaborate on the claims initially alleged. The
Company believes that this action is without merit, and intends to move
to dismiss the amended pleading and to vigorously defend against the
claims asserted. However, because this action is in its early stages,
no determination can be made at this time as to the final outcome of
this action.
NBTY INC.: Hearing For Consumer Lawsuit Certification Set Spring 2003
---------------------------------------------------------------------
Hearing to determine class certification for the lawsuit filed against
NBTY, Inc. in Alabama State Court is set for spring of 2003. The suit,
filed in August 2001, alleges that the Company manufactured and
marketed misbranded nutrition bars and seeks class certification,
injunctive, declaratory, and monetary relief.
Class discovery is being taken. The Company is vigorously defending
class certification on the basis that the plaintiffs were not damaged
as alleged as a result of any action by the Company. In addition, the
Company contends that this matter is not appropriate for class
certification because the named plaintiffs are inadequate class
representatives and not typical of persons who purchased the nutrition
bars in these proceedings.
On October 3, 2002, the Company was named as a defendant in a second
purported class action commenced in the same Alabama state court as the
above-identified litigation. Plaintiffs, in an attempt to pursue
several retailers, including the Company, and not manufacturers of
nutrition bars, allege that the Company marketed misbranded nutrition
bars. In November 2002, the Company filed a motion to dismiss or abate
the lawsuit based on the principle that the court lacks subject-matter
jurisdiction because the earlier-filed lawsuit, which seeks identical
relief for the same purported class action against the manufacturers,
preempts this second attempt to certify a class against the Company.
The Company believes that both Alabama suits are without merit.
However, no determination can be made as to the final outcome of these
suits.
NETWORK ENGINES: NY Court Dismisses Two Officers From Securities Suit
---------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed Network Engines, Inc.'s officers as defendants in the
consolidated securities class action filed of all persons who acquired
shares of Company stock between July 13, 2000 and December 6, 2000.
The suit names as defendants the Company and:
(1) Lawrence A. Genovesi, Chairman and former Chief Executive
Officer,
(2) Douglas G. Bryant, Chief Financial Officer and Vice President
of Administration,
(3) FleetBoston Robertson Stephens, Inc.,
(4) Credit Suisse First Boston Corp.,
(5) Goldman Sachs & Co.,
(6) Lehman Brothers Inc. and
(7) Salomon Smith Barney, Inc.
The suit alleges that the defendants violated the federal securities
laws by issuing and selling securities pursuant to the Company's
initial public offering in July 2000 (IPO) without disclosing to
investors that the underwriter defendants had solicited and received
excessive and undisclosed commissions from certain investors.
The suit also alleges that the underwriter defendants entered into
agreements with certain customers whereby the underwriter defendants
agreed to allocate to those customers shares of the Company's stock in
the offering, in exchange for which the customers agreed to purchase
additional shares of the Company's shares in the aftermarket at pre-
determined prices. The suit alleges that such tie-in arrangements were
designed to and did maintain, distort and/or inflate the price of the
Company's common stock in the aftermarket.
The suit further alleges that the underwriter defendants received
undisclosed and excessive brokerage commissions and that, as a
consequence, the underwriter defendants successfully increased investor
interest in the manipulated IPO securities and increased the
underwriter defendants individual and collective underwritings,
compensation and revenues.
In July 2002, the Company, Mr. Genovesi and Mr. Bryant joined in an
omnibus motion to dismiss, challenging the legal sufficiency of
plaintiffs' claims. The motion was filed on behalf of hundreds of
issuer and individual defendants named in similar lawsuits. Plaintiffs
opposed the motion, and the Court heard oral argument on the motion in
November 2002. In addition, in October 2002, Mr. Genovesi and Mr.
Bryant were dismissed from this case without prejudice.
OHIO: Inmates Commence Suit Over Conditions In Montgomery County Jail
---------------------------------------------------------------------
Attorneys for inmates at the Montgomery County Jail in Ohio, have
requested a court order to stop what they allege is overcrowding,
unsanitary conditions, inattention to the inmates' medical needs and
still other abuses, the Dayton Daily News reports. The recently filed
amended lawsuit seeks certification as a class action.
The attorneys contend that about 70 inmates have been housed in a gym
and 10 to 12 more have been housed in a multipurpose room, each given
only a sheet and blanket with no beds or pillows. Other abuses that
have occurred are, for example, the denial of blood pressure medication
for eight days to an inmate who subsequently suffered a heart attack,
the denial of mental health medication for seven days to an inmate,
failure to obtain medical for many days for an inmate who fell from his
wheelchair.
Attorneys for the inmates have asked US Magistrate Judge Sharon
Ovington for a temporary order to end overcrowding and for the inmates
to be provided proper food, recreation, bedding and medical attention.
The lawsuit claims that "overcrowding creates unconstitutional
conditions of confinement where there is a lack, among other things, of
food, toilet facilities, linens, uniforms and medication, creating an
increased hostile environment among the inmates as well as increased
medical needs."
Montgomery County Sheriff David Vore said the county recently
contracted with Butler County to house up to 100 inmates there.
Sheriff Vore also said that construction to add 241 beds at the
Montgomery County Jail is scheduled to begin in January and be
completed in May 2004.
ORACLE CORPORATION: Asks CA Court To Dismiss Amended Securities Lawsuit
-----------------------------------------------------------------------
Oracle Corporation asked the United States District Court for the
Northern District of California to dismiss the second amended
consolidated securities class action filed against it, its Chief
Executive Officer, its Chief Financial Officer and an Executive Vice
President.
The suit, filed on behalf of purchasers of our stock during the period
from December 15, 2000 through March 1, 2001, alleged that the
defendants made false and misleading statements about our actual and
expected financial performance and the performance of certain of the
Company's applications products, while certain individual defendants
were selling Company stock, in violation of federal securities laws.
Plaintiffs further alleged that some of the individual defendants sold
Company stock while in possession of material non-public information.
On March 12, 2002, the court granted the Company and the individual
defendants' motion to dismiss the amended consolidated complaint. On
April 10, 2002, plaintiffs filed a first amended consolidated
complaint, which the court again dismissed.
On October 11, 2002, the plaintiffs filed another amended complaint.
In this second amended consolidated complaint, plaintiffs added
allegations that the defendants made misstatements about the Company's
financial performance beginning on December 14, 2000. On November 8,
2002, the Company filed a motion to dismiss the second amended
consolidated suit. A hearing on the motion to dismiss is currently
scheduled for January 14, 2003.
On November 11, 2002, plaintiffs filed an "ex parte" application
requesting discovery into whether the Company destroyed documents
relating to allegations in the second amended complaint and expanding
on allegations in the second amended complaint. The Company strongly
denies such accusations and have opposed the plaintiff's application.
The court has not yet ruled on the application. On December 9, 2002,
plaintiffs filed their opposition to the motion to dismiss the second
amended complaint and also moved to amend this complaint to add some of
the same allegations that were raised in their "ex parte" application.
The Company believes that it has meritorious defenses against this
action and continues to vigorously defend it. No class has been
certified.
ORACLE CORPORATION: Committee Labels Derivative Claims "Without Merit"
----------------------------------------------------------------------
A Special Litigation Committee (SLC) has determined that the claims in
the shareholder derivative lawsuits filed against Oracle Corporation in
the State of Delaware Chancery Court in and for New Castle County are
without merit, and not in the best interests of the Company and its
stockholders.
The first suit was commenced in March 2001, and later amended in
October 2001, while similar stockholder derivative suits were filed in
the Superior Court of the State of California, County of San Mateo and
County of Santa Clara. A consolidated amended complaint was filed in
San Mateo on January 28, 2002. On March 15, 2002, a similar derivative
suit was filed in the United States District Court for the Northern
District of California.
The derivative suits were brought by some alleged stockholders,
purportedly on the Company's behalf, against some of the Company's
current and former directors. The derivative plaintiffs allege that
these directors breached their fiduciary duties to the Company by
making or causing to be made alleged misstatements about the Company's
revenue, growth and the performance of certain of the Company's
applications products while certain officers and directors sold Oracle
stock based on material, non-public information, and by allowing us to
be sued in the stockholder class actions. The derivative plaintiffs
seek compensatory and other damages, disgorgement of profits and other
relief.
The Board of Directors established the Special Litigation Committee
(SLC) to investigate the allegations in the Delaware derivative suit,
and the SLC was subsequently asked to investigate the allegations in
the California state and federal derivative suits. On November 22,
2002, the SLC concluded its nine-month investigation into the claims
made in all three derivative actions and the recent allegations in the
second amended complaint. The SLC determined, in the exercise of its
business judgment, that these claims lack merit and that, therefore,
prosecution of them is not in the best interests of Oracle or its
stockholders. Accordingly, the SLC filed a motion in Delaware Chancery
Court to terminate the Delaware derivative action.
The schedule for the hearing on the motion to terminate the Delaware
action has not been finalized, but the Company anticipates that hearing
to proceed in May 2003. In the meantime, the Delaware plaintiffs will
pursue limited discovery into the investigation of the SLC. The
discovery stay in the San Mateo action was granted on October 1, 2002
and lifted on December 2, 2002. The federal derivative action remains
stayed pursuant to stipulation of the parties.
PEP BOYS: Appeals Court Upholds Certification of CA Overtime Wage Suit
----------------------------------------------------------------------
The California Court of Appeals refused to vacate the class
certification of the suit filed against The Pep Boys, Manny, Moe &
Jack, by its former and current store management employees.
The suit, filed in the California Superior Court in Orange County,
alleges that the plaintiffs were improperly classified as exempt from
the overtime provisions of California law and seeks compensation for
the plaintiffs for all overtime hours worked. Plaintiffs filed a
motion to certify the case as a class action to represent all persons
employed in California as salaried store managers, assistant store
managers, service managers and assistant service managers since March
29, 1996.
On October 25, 2002, plaintiffs' Motion to certify the case as a class
action was granted. The Company sought expedited relief from the court
of appeals to vacate the class certification order, which was denied.
On December 1, 2002 the Company appealed that denial by filing a
Petition for Review and Request for Immediate Stay to the California
Supreme Court. No trial date has been set for the underlying case.
The Company believes the suit's outcome will not permanently affect the
Company's financial position. An adverse outcome in this action,
however, may have a material adverse effect on the Company's results of
operations for the year in which a judgment, if any, is rendered.
QWEST COMMUNICATIONS: 14 Former Employees File Lawsuit For Overtime Pay
-----------------------------------------------------------------------
Fourteen former employees of Qwest Communication International Inc. are
suing the company, alleging they were forced to work overtime without
pay, the Idaho Statesman reports.
The lawsuit, recently filed in US District Court in Boise, Montana,
alleges that the employees worked before their regular shifts, during
lunch breaks and after their shifts, without being compensated. "If
you are working, you should get paid for it," said Daniel Williams, the
Boise attorney representing the employees. Mr. Williams contends the
Company is in violation of the federal Fair Labor Standards Act, which
prohibits "off-the-clock" work.
The employees in the lawsuit worked at call centers as inside sales
representatives. The complaint alleges that employees were induced to
work off the clock and discouraged from keeping accurate time records.
The complaint further alleges that managers altered timecards and
suppressed wage claims. The workers also say managers led them to
believe that spending extra time working off the clock would lead to
better positions in the company.
Although the suit names only 14 former employees, Mr. Williams said
that he believes there could be many more who have worked off the
clock. He, therefore, has asked the court to authorize the mailing of
a notice to all former and current employees asking whether they want
to join the lawsuit. How much money the lawsuit will seek from Qwest
will be determined by how many plaintiffs join, Mr. Williams said.
STARBUCKS CORPORATION: CA Court Approves Overtime Wage Suit Settlement
----------------------------------------------------------------------
The Superior Court of California granted final approval to a settlement
proposed by Starbucks Corporation in two class actions that challenged
the status of Starbucks California store managers and assistant store
managers as exempt employees under California wage and hour laws.
In April 2002, the Company announced it had reached an agreement to
settle both lawsuits and fully resolve all claims brought by the
plaintiffs without engaging in protracted litigation. Under the
settlement, the Company will pay up to $18 million in claims to
eligible class members, attorneys' fees and costs, and costs to a
third-party claims administrator, as well applicable employer payroll
taxes, an earlier Class Action Reporter story states.
On December 17, 2002, the settlement was approved. Claims under the
settlement agreement will be paid on a "claims made" basis. The
Company expects most claims will be paid in the second quarter of
fiscal 2003.
TALX CORPORATION: Seeks Dismissal of Securities Fraud Suit in E.D. MO
---------------------------------------------------------------------
Talx Corporation asked the United States District Court for the Eastern
District of Missouri to dismiss the consolidated securities suit filed
against it and:
(1) William W. Canfield,
(2) Craig N. Cohen,
(3) Richard F. Ford,
(4) Stifel, Nicolaus & Company, Incorporated and
(5) A.G. Edwards & Sons, Inc.
The case purportedly is brought on behalf of all persons who purchased
or otherwise acquired shares of the Company's common stock between July
18, 2001 and October 1, 2001 including as part of the secondary
offering. The complaint alleges, among other things, that certain
statements in the registration statement and prospectus for the
Secondary Offering, as well as other statements made by the Company
and/or the Individual Defendants during the class period, were
materially false and misleading because they allegedly did not properly
account for certain software and inventory, did not reflect certain
write-offs, and did not accurately disclose certain business prospects.
The complaint alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder
against the Company and the individual defendants, violations of
Section 11 of the Securities Act of 1933 against the Company, the
individual defendants and the underwriters, and violation of Section 15
of the Securities Act of 1933 against Mr. Canfield.
On May 20, 2002, the Company and the individual defendants filed a
motion to dismiss the lawsuits, and the underwriter defendants filed a
separate motion to dismiss. The plaintiffs filed their opposition to
the motions to dismiss on June 19, 2002. The defendants' reply
memoranda in support of the motions to dismiss were filed on July 9,
2002. The parties are awaiting the court's ruling on the motions.
The Company believes the plaintiffs' claims are without merit.
However, due to the inherent uncertainties of litigation, the Company
cannot accurately predict the ultimate outcome of the litigation. An
unfavorable outcome could have a material adverse impact on the
Company's business, financial condition and results of operations.
THOMAS & BETTS: TN Court Grants Approval To Securities Suit Settlement
----------------------------------------------------------------------
The United States District Court for Western Tennessee approved the
settlement proposed by Thomas & Betts Corporation (NYSE: TNB) relating
to the consolidated securities class action pending against the
Company.
Claims in the suit relate primarily to certain accounting practices and
financial reporting under former management and have been fully
disclosed in the company's filings with the Securities and Exchange
Commission. Five class action suits were filed against the company in
2000 and were consolidated into a single action in December 2000. In
July 2002, the court ordered the parties to enter into formal
mediation.
The Company reached an agreement to settle the suit in October 2002.
The terms of the settlement call for all claims against the Company to
be dismissed in their entirety without admission of liability or
wrongdoing and for the plaintiffs to receive $46.5 million in cash, of
which the Company's directors and officers Liability Insurance paid
$26.5 million.
"We are pleased to bring this matter to a conclusion," said T. Kevin
Dunnigan, Thomas & Betts chairman and chief executive officer, in a
statement. "We can now move forward with completing the company's
turnaround without the overhang associated with this litigation."
For more details, contact Tricia Bergeron of Thomas & Betts Corporation
by Phone: 1-901-252-8266 or visit the firm's Website:
http://www.tnb.com
THQ INC.: Reaches Agreement To Settle Consolidated Securities Lawsuit
---------------------------------------------------------------------
THQ, Inc. (Nasdaq: THQI) forged an agreement in principle to settle the
class action filed against the Company in February 2000. The
settlement remains subject to negotiation of a final written agreement
between the Company and the plaintiffs, as well as court approval.
Under the terms of the settlement the Company and its directors and
officers liability insurer will pay a total of $10,150,000 to the
plaintiffs. The Company will record a charge of $2 million for legal
and other costs related to this settlement.
At the time the suit was commenced, the Company had purchased directors
and officers liability insurance in the amount of $10 million; however
the insurer recently questioned its obligation respecting $5 million of
the coverage. The Company expects to arbitrate the insurance company's
obligation. To the extent the insurance company is not obligated to
fund the $5 million in question, the Company would be responsible for
the difference.
For more details, contact Liz Pieri by Phone: 818/871-5061 or Julie
MacMedan of THQ/Investor Relations by Phone: 818/871-5095
UNITED STATES: Arab, Muslim Groups Sue INS, Ashcroft Over Detentions
--------------------------------------------------------------------
A coalition of Arab and Muslim Groups recently sued Attorney General
John D. Ashcroft and the Immigration and Naturalization Service (INS)
over the mass detentions of immigrants from Muslim countries who came
forward to register under the new anti-terrorism rules, The Washington
Post reports. The class action sought an immediate injunction against
further arrests and alleged that large numbers of men who came forward
to register in Southern California last week had been unlawfully
detained.
The lawsuit, filed in federal court in Los Angeles, followed outrage
over the detentions of hundreds of immigrants, most of them Iranians,
who presented themselves at immigration offices under the anti-
terrorism program, and who were taken away in handcuffs and locked up,
sometimes for days, for overstaying their visas.
Peter Schey, president of the Los Angeles-based Center for Human Rights
and Constitutional Law and the lead attorney for the six, unnamed
plaintiffs in the lawsuit, said mass registration is irrational because
"no undocumented terrorist will come forward." Mr. Schey said the
lawsuit was not about resisting registration but about the way it was
being implemented.
"The program is being used as a scam to lure people into INS offices,
supposedly to register, when what they really face is arrest, detention
and even deportation despite their pending petitions to legalize their
status which the INS is refusing to process," said Mr. Schey.
Local immigration lawyers estimated last week that 1,000 men and boys
were detained in standing-room-only centers and forced to sleep on
concrete floors, under a system designed to track potential terrorists,
but instead locked up many caught in the lengthy process for obtaining
permanent residence.
Official figures from the Department of Justice and the INS put the
number of detentions in California at less than 250. Officials said
about 20 were still detained in the Los Angeles area, five in San Diego
and a handful in San Francisco. The men were detained under a post-
September 11, 2001, program that requires males older than 16, without
a permanent residence, from 20 Arab or Muslim countries to register
with authorities.
The registration deadline for the first group, which included Iranians
from the 600,000-strong Iranian exile community in the Los Angeles
area, fell on December 16. Deadlines are approaching in January and
February for citizens of Afghanistan, Algeria, Yemen, Pakistan and
Saudi Arabia.
"The mass arrests have further eroded confidence in the fairness of the
INS and the immigration system among the Arab and Muslim communities,"
the lawsuit says.
New Securities Fraud Cases
CREDIT SUISSE: Pomerantz Haudek Commences Securities Lawsuit in S.D. NY
-----------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action in the United States District Court for the Southern
District of New York against Credit Suisse First Boston Corporation
(CSFB) on behalf of investors who purchased the common stock of AOL
Time Warner, Inc. (NYSE:AOL) during the period from January 16, 2001
through September 3, 2002, inclusive.
The complaint alleges that CSFB violated Sections 10(b) of the
Securities Exchange Act of 1934 by issuing false and misleading analyst
reports on AOL, the world's largest media and Internet company, in a
bid to win or maintain lucrative banking and advisory work from the
Company. CSFB was a senior co-manager of both AOL's April 2002 $6
billion bond sale and its April 2001 $4 billion bond sale, reaping fees
in excess of $10 million. As a result of defendant's false and
misleading statements, the market price of AOL common stock was
artificially inflated, maintained or stabilized during the class
period.
On October 21, 2002, the Commonwealth of Massachusetts charged CSFB
with violating the Massachusetts Securities Act by issuing false and
misleading analyst reports on numerous companies. The complaint
describes the influence and control exerted by CSFB's investment
bankers on its supposedly independent research analysts.
For more details, contact Andrew G. Tolan by Phone: (888) 476-6529
((888) 4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomlaw.com
DIVERSA CORPORATION: Schiffrin & Barroway Lodges Securities Suit in NY
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Schiffrin & Barroway, LLP initiated a securities class action on behalf
of purchasers of the common stock of Diversa Corp. (Nasdaq: DVSA)
between February 14, 2000 and December 6, 2000, inclusive, in the
United States District Court, Southern District of New York against the
Company and:
(1) Jay M. Short,
(2) Karin Eastham,
(3) James H. Cavanaugh,
(4) Bear Stearns Co., Inc.,
(5) J.P. Morgan Securities, Inc. (as successor-in-interest to
Chase H&Q),
(6) Chase H&Q,
(7) Deutsche Banc Alex. Brown,
(8) Credit Suisse First Boston (as successor-in-interest to DLJ),
(9) ABN Amro Securities (as successor-in-interest to ING Baring
Furman Selz),
(10) ING Baring Furman Selz,
(11) Merrill Lynch Pierce Fenner & Smith, Inc.,
(12) Morgan Stanley, Robertson Stephens, Inc. (as successor-in-
interest to FleetBoston Robertson Stephens Inc.),
(13) Salomon Smith Barney, Inc.,
(14) SG Cowen Securities Corp.,
(15) Warburg Dillon Read,
(16) RBC Dain Rauscher (as successor-in- interest to Dain Rauscher
Wessels),
(17) Dain Rauscher,
(18) Needham & Company, Inc.,
(19) Pacific Growth Equities, Inc.,
(20) RBC Dain Rauscher (as successor-in-interest to Tucker Anthony)
and
(21) Tucker Anthony
The complaint alleges violations of Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or
about February 14, 2000, Diversa commenced an initial public offering
of 7,250,000 of its shares of common stock at an offering price of $24
per share. In connection therewith, Diversa filed with the SEC a
registration statement, which incorporated a prospectus.
The complaint further alleges that the Prospectus was materially false
and misleading because it failed to disclose, among other things, that:
(i) the Underwriter Defendants had solicited and received
excessive and undisclosed commissions from certain investors
in exchange for which the Underwriter Defendants allocated to
those investors material portions of the Diversa shares issued
in connection with the Diversa IPO; and
(ii) the Underwriter Defendants had entered into agreements with
customers whereby the Underwriter Defendants agreed to
allocate Diversa shares to those customers in the Diversa IPO
in exchange for which the customers agreed to purchase
additional Diversa shares in the aftermarket at pre-determined
prices.
In addition, the complaint alleges that certain of the Underwriter
Defendants improperly utilized their analysts, who were compromised by
undisclosed conflicts of interest, to artificially inflate or maintain
the price of Diversa stock.
For more details, contact Darren Check or David Kessler by Mail: Three
Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-
7706 (toll free) or 1-610-667-7706 by E-mail: info@sbclasslaw.com or
visit the firm's Website: http://www.sbclasslaw.com
LEAP WIRELESS: Cauley Geller Commences Securities Fraud Suit in S.D. CA
-----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Southern District of
California, on behalf of purchasers of Leap Wireless International,
Inc. (OTC Bulletin Board: LWIN) publicly traded securities during the
period between February 11, 2002 and July 24, 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 starting on February 11, 2002, the day after the Company publicly
announced its financial results for its fiscal year ending December 31,
2001, defendants concealed the deteriorated value of its wireless
license assets by undertaking a fraudulent impairment test of those
assets which grossly overstated the value of the Company's wireless
license assets in its financial statements.
The complaint alleges that defendants were motivated by the need to
preserve the image of the Company as a viable wireless company with
valuable assets, sufficient to persuade lenders, investors and vendors
to provide capital, loans and equipment to the Company. Defendants
issued materially false and misleading statements on February 11, 2002,
April 24, 2002 and May 2, 2002.
On July 24, 2002, the last day of the class period, Leap announced its
financial results for its second quarter of 2002 and admitted for the
first time that circumstances existed throughout the year were
adversely affecting the Company. On this news the market price of Leap
shares fell from a class period high of $10.00 to below $1.00 and are
presently trading at less that $.40 per share.
For more details, contact Jackie Addison, Heather Gann or Sue Null by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438, by Phone:
1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's
Website: http://www.cauleygeller.com
NASH FINCH: Schiffrin & Barroway Lodges Securities Lawsuit in MN Court
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Minnesota on behalf of
all purchasers of the common stock of Nash Finch Company (Nasdaq:
NAFCE) common stock during the period between July 15, 2002 and
November 8, 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. The Company is a food distribution
and retail company in the United States. Specifically, the complaint
alleges that the Company issued false statements, including false
financial results in which the Company included income from vendor
promotions to which the Company was not entitled, so as to maintain
favorable credit ratings on its debt. As a result of defendants' false
statements, the Company's stock traded at artificially inflated levels,
permitting Nash Finch to maintain credit ratings on its $400 million in
debt.
Then, on November 8, 2002, Nash Finch issued a press release entitled
"Nash Finch Explains Postponement of Earnings Release" which disclosed
an SEC inquiry into its accounting practices. Once this news was
revealed, Nash Finch's stock collapsed to $7.60 before closing at
$8.18, some 70% below the class period high of $28.85. It was also
noted in November 2002, that Nash Finch's former CFO had sued the
Company claiming he was fired in 2000 for refusing to manipulate Nash
Finch's reported financial results.
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: 1-
888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website:
http://www.sbclasslaw.com
NUI CORPORATION: Cohen Milstein Files Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Southern District of
New York against NUI Corporation on behalf of all persons or entities
who purchased the Company's common stock (NYSE:NUI) from November 8,
2001 through October 17, 2002, inclusive.
The complaint alleges that the company and John Kean, Jr., NUI's
President and Chief Executive Officer, violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder by the United States Securities and Exchange
Commission by issuing a series of materially false and misleading
statements to the market during the class period.
The complaint alleges defendants knowingly or recklessly failed to
properly record the Company's fixed cost expenses, accrue necessary
pension expenses, and reserve adequate amounts for its self-insured
medical benefits in its quarterly unaudited financial statements. As a
result of defendants' actions, it is alleged that the common stock of
NUI traded at artificially inflated prices during the class period.
For more details, contact Steven J. Toll or Mary Ann Fink by Mail: 1100
New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005 by
Phone: 888/240-0775 or 202/408-4600 by E-mail: stoll@cmht.com or
mfink@cmht.com or visit the firm's Website: http://www.cmht.com
TELLIUM INC.: Schiffrin & Barroway Lodges Securities Suit in NJ Court
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of New Jersey on behalf
of all purchasers of the common stock of Tellium, Inc. (Nasdaq: TELM)
from May 17, 2001 through February 1, 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 failed to disclose that:
(1) Qwest agreed to purchase Tellium products, in return, Qwest
executives received lucrative shares of Tellium in conjunction
with its IPO, a fact that was not disclosed to the public;
(2) Qwest did not need the large number of switches they had
ordered from Tellium and, in fact, had no strong obligation to
purchase more switches in the future and could avoid their
contractual obligations with relative ease;
(3) after issuing positive statements about the Company's
financial standing, defendants Bunting and Glassmeyer unloaded
large amount of their shares; and
(4) because the Company issued false and misleading statements
about Tellium's business and the Qwest contract, the Company's
shares have been traded at artificially inflated prices, as
high as $29 per share.
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: 1-
888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website:
http://www.sbclasslaw.com
UBS WARBURG: Akin Gump Commences Lawsuit For Securities Act Violations
----------------------------------------------------------------------
Akin Gump Strauss Hauer & Feld LLP initiated a securities class action
in the US District Court for the Northern District of Texas on behalf
of all persons who purchased or otherwise acquired shares of Merrill
Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certificates
Series 1999-C1 and received a Prospectus dated October 15, 1999 and a
Prospectus Supplement to Prospectus dated October 15, 1999. The class
period begins with the initial offering of the Certificates and
continues through September 3, 2002. The suit names as defendants:
(1) UBS Warburg, Inc.,
(2) UBS Warburg Real Estate Securities Inc. (f/k/a Paine Webber
Real Estate Securities, Inc. (Paine Webber)), and
(3) UBS PaineWebber, Inc. (PaineWebber Inc.)
The suit arises in connection with a November 1, 1999 transaction in
which the former Paine Webber entities transferred loans to a trust.
The suit alleges that the Defendants committed securities fraud by
making material misrepresentations and omissions about the quality of
the loans Paine Webber transferred to the trust. Specifically, the
suit notes that compared to all loans in the Loan Pool, the Paine
Webber loans have disproportionately gone into default or required
special attention, and have later been found not to meet the standards
represented in the prospectus and prospectus supplement.
The complaint asserts claims based on:
(i) violations of the Exchange Act section 10(b) (15 U.S.C.
section 78j) and Rule 10b-5 (17 C.F.R. section 240.10b-5);
(ii) violation of the Exchange Act section 20(a) (15 U.S.C. section
78t);
(iii) violation of the Securities Act section 11 (15 U.S.C. section
77k);
(iv) violation of the Securities Act section 12(a)(2) (15 U.S.C.
section 77l); and
(v) violation of the Securities Act section 15 (15 U.S.C. section
77o)
It seeks as relief rescission of the plaintiff class' investment in the
Certificates, or in the alternative, actual damages at least in the
amount of $549,923,000.
For more details, contact R. Laurence Macon, Mary L. O'Connor and
Talcott Franklin by Mail: 1700 Pacific Ave., Suite 4100 Dallas, TX
75201 by Phone: 214-969-2800 by Fax: 214-969-4343 or by E-mail:
lmacon@akingump.com, moconnor@akingump.com or tfranklin@akingump.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.
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