/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030414.mbx C L A S S A C T I O N R E P O R T E R Monday, April 14, 2003, Vol. 5, No. 73 Headlines AMERICAN PROMOTIONAL: Recalls Party Poppers Rockets For Injury Hazard AUTOMOBILE FIRMS: Toyota, Nissan Face Suits Over Discriminatory Lending AMERICAN EXPRESS: Consumers Launch Lawsuit Over Foreign Exchange Fees CHEMICAL SHIPPERS: Consumer Antitrust Suit To Be Turned To Class Action CIT GROUP: Stockholder Faces a Securities Fraud Suit Filed in NY Court DYNEGY INC.: Plaintiffs Expand Allegations, Period in TX 401(k) Lawsuit FLORIDA: Ex-Felons Seek Restoration of Voting Rights In Appellate Court HENRY FORD: Emergency-Room Doctors Commence Suit Over Hospital Policies ILLINOIS: Chicago Police Dept Sued Over Arrest of Anti-War Protesters LEARNING CURVE: Recalls 3,800 Children's Toys For Lead Poisoning Hazard LUTHERAN MEDICAL: Agrees To Settle Sexual Harassment Suit V. Physician RAVENS INDUSTRIES: Voluntarily Recalls Remote Controls Over Fire Hazard REITER DAIRY: Recalls Fat Free Chocolate Milk For High Vitamin A Levels SECURITIES LITIGATION: Investment Banks To Take Big Hit in IPO Lawsuits TEXAS: Senator Questions Class Action Litigation Part Of New Tort Bill TEXAS: TX Court Hears Arguments on Abortion Facility Regulations Suit TOBACCO LITIGATION: Judge Byron Considers Options To $12B Appeal Bond UNITED STATES: Supreme Court Sets New Federal Punitive Damage Limits New Securities Fraud Cases ACCREDO HEALTH: Abbey Gardy Lodges Securities Fraud Lawsuit in W.D. TN ACCREDO HEALTH: Chitwood & Harley Lodges Securities Lawsuit in W.D. TN ALLOY INC.: Bernstein Liebhard Lodges Securities Fraud Suit in S.D. NY BAYER AG: Bernstein Liebhard Lodges Securities Fraud Lawsuit in S.D. NY CIT GROUP: Milberg Weiss Commences Securities Fraud Lawsuit in S.D. NY CORE LABORATORIES: Charles Piven Files Securities Fraud Suit in S.D. NY CORE LABORATORIES: Schiffrin & Barroway Commences Securities Suit in NY CORE LABORATORIES: Brian Felgoise Commences Securities Fraud Suit in NY I2 TECHNOLOGIES: Wechsler Harwood Files Securities Lawsuit in N.D. TX IMPERIAL CHEMICAL: Schiffrin & Barroway Lodges Securities Lawsuit in NY IMPERIAL CHEMICAL: Brian Felgoise Lodges Securities Lawsuit in S.D. NY IMPERIAL CHEMICAL: Cauley Geller Launches Securities Lawsuit in S.D. NY KING PHARMACEUTICALS: Wechsler Harwood Lodges Securities Suit in TN NAM TAI: Cauley Geller Commences Securities Fraud Suit in S.D. New York NAM TAI: Schiffrin & Barroway Lodges Securities Fraud Suit in S.D. NY SYMBOL TECHNOLOGIES: Goodkind Labaton Commences Securities Suit in NY VAXGEN INC.: Scott + Scott Commences Securities Fraud Suit in N.D. CA ********* AMERICAN PROMOTIONAL: Recalls Party Poppers Rockets For Injury Hazard --------------------------------------------------------------------- American Promotional Events, Inc. is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling about 4,000 Party Poppers. The Party Popper is a rocket-shaped device that shoots into the air when the string is pulled. The cone-shaped top can pop off rapidly, and can hit and injure both children and adults. CPSC and TNT have not received any reports of incidents involving the Party Poppers. This recall is being conducted to prevent the possibility of injury. The recalled Party Poppers are packaged in units of four. The Party Poppers were sold in clear cellophane wrappers with blue, yellow and red cardboard headers. The Party Poppers and the packaging are labeled "TNT BIG FUN PARTY POPPER." The Party Poppers are shaped like rockets with 3 1/2-inch wooden support sticks. Wal-Mart stores sold these Party Poppers nationwide from January 2003 through March 2003 for about $2. For more information, contact the Company by Phone: (800) 243-1189 between 9 am and 5 pm ET Monday through Friday. AUTOMOBILE FIRMS: Toyota, Nissan Face Suits Over Discriminatory Lending ----------------------------------------------------------------------- Toyota Motor Corporation's and Honda Motor Company's consumer-credit units face discrimination suits filed in California Superior Court, charging it with being discriminatory to black and Hispanic consumers, Bloomberg reports. The suits also name as defendant WFS Financial, Inc. The suit alleges that the defendants charged black and Hispanic consumers more for auto loans than whites. The defendants also allegedly allowed dealers to "mark up" loans by adding interest points to the rate set by a customer's credit-worthiness. The average mark-up for black customers was about $1,000, compared with less than $500 for whites, the suit charged. The suits seek to bar racially biased loan practices and a minimum of $4,000 per incident of discrimination, according to a statement from Lieff Cabraser Heimann & Bernstein LLP, one of the law firms representing consumers in the case, Bloomberg reports. Other automakers have faced similar charges, namely General Motors Acceptance Corporation's finance company, and consumer-finance units of Ford Motor Co. and DaimlerChrysler AG's Chrysler. "American Honda and American Honda Finance require our dealers to follow strictly fair lending practices," spokesman Wendell Bugg told Bloomberg. He declined further comment as the company is still reviewing the suit. Toyota Motor Credit spokeswoman Kerry Rivera said the company in December set a 3 percent cap on points that dealers can add to a loan's interest rate, Bloomberg reported. "We're committed to fair lending and equal opportunity," Ms. Rivera said. "We set loan rates based only on someone's credit history." AMERICAN EXPRESS: Consumers Launch Lawsuit Over Foreign Exchange Fees --------------------------------------------------------------------- American Express Company faces a class action filed in California Superior Court, alleging that it failed to disclose fees related to purchases made in a foreign currency by its cardholders, Reuters reports. The Environmental Law Foundation filed the suit, asserting that the Company includes in its cardmember agreements unconscionable and unlawful arbitration provisions. The suit appears similar to a lawsuit filed against rival credit card firms MasterCard and Visa International, in California Superior Court. Two days ago, the court found that Visa International collected about $817 million in foreign exchange fees from 1996 to March 30, 2000, and MasterCard $195 million, Reuters states. The court then ruled that the two credit card giants must refund customers who were levied currency- exchange fees. The Company told Reuters it intends to fight the suit, which was filed this month. Company spokeswoman Judy Tenzer said she did not immediately know the exact date of the filing, and the Alameda County Superior Court was not yet open to provide additional details. "The company has not yet been served with the complaint relating to the action. The company believes that it has meritorious defenses and, in the event it is served with the complaint, intends to vigorously defend the action," American Express stated in the 8-K filing, in which companies are required to make public announcements. CHEMICAL SHIPPERS: Consumer Antitrust Suit To Be Turned To Class Action ----------------------------------------------------------------------- Norwegian chemical shippers Odfjell and Stolt-Nielsen said they believed a customers $3 million lawsuit against them in the United States could become a class action targeting them and two other firms, Reuters reports. The consumer suit names as defendants the two Companies, Tokyo Marine Company and Jo Tankers of Norway and the Netherlands. The suit was filed in US federal court, over the alleged "cartel activity" of the four firms, which control about 60% of the world market. In February, European antitrust authorities raided offices in Norway, Britain and the Netherlands of the four tanker firms. A US probe commenced soon after. A day after the raids, the Wall Street Journal cited several allegedly handwritten diary entries by a Stolt- Nielsen official showing that the firm had cooperated with Odfjell to divide the world tanker market between them. US chemicals group JLM Industries (JLMI) has asked the court to make the suit a class action. The suit further alleges collusion and price- fixing by the defendant firms. "We think it is baseless and without merit, and we intend to defend vigorously against it," Stolt-Nielsen S.A. Executive Vice President John Wakely told Reuters. Odfjell's investor relations chief Espen Bjelland told Reuters Odfjell did not know whether any other customers aimed to join the class action sought by JLM. "We know that it is a customer, JLM Industries, which has sued, but it is possible that several others could join in," Mr. Bjelland said. The companies said they had not received any word on the investigations by the US and European competition authorities, but Odfjell said it was preparing to hand over various documents they had requested. "Breaches of antitrust regulations in the European Union and/or the United States may lead to substantial fines as well as potential civil lawsuits," Odfjell said in a statement. CIT GROUP: Stockholder Faces a Securities Fraud Suit Filed in NY Court ---------------------------------------------------------------------- CIT Group, Inc. faces a securities class action filed in the United States District Court in New York by a Company shareholder, alleging that the Company made false and misleading statements about its financial status last year as part of its initial public offering, Reuters reports. The commercial and consumer finance company was part of Tyco International Ltd (TYC), but Tyco later sold off CIT Group through the $4.6 billion initial public offering last July to raise cash for debt repayment. The suit alleges that the Company, in connection with the IPO, made false statements in a prospectus and in its registration statement filed with the Securities and Exchange Commission. The suit further stated that the company falsely represented that its loan loss reserves for the telecommunications industry and its reserves for the entire finance portfolio were adequate. The suit finally also alleged that it understated the true risks facing the company and overstated the company's assets, Reuters states. A CIT spokeswoman could not immediately be reached for comment. DYNEGY INC.: Plaintiffs Expand Allegations, Period in TX 401(k) Lawsuit ----------------------------------------------------------------------- Plaintiffs in the class action filed against Houston, Texas energy company Dynegy, Inc. expanded the suit to include more detailed allegations and a longer period of time covered, the Pantagraph.com reports. The suit was filed in the United States District Court in Texas on behalf of employees covered by the company's 401(k) retirement plan. The suit alleges that the Company's management, which also was in charge of the retirement plans, didn't live up to its responsibilities in handling the 401(k) investments. The lawsuit further alleged that the Company played a role in the questionable accounting and trading activities that led to an investigation by the federal Securities and Exchange Commission and the Commodities Futures Trading Commission and the payment of fines totaling $8 million. Both actions reduced the value of Dynegy stock for retirement purposes, the lawsuit said, the Pantagraph.com reports. Dynegy spokesman David Byford told the Pantagraph the company is "analyzing these claims and we intend to vigorously defend against them. That's the extent of what I can say right now." FLORIDA: Ex-Felons Seek Restoration of Voting Rights In Appellate Court ----------------------------------------------------------------------- The issue of whether former felons in Florida can have their voting rights restored is being played out in the courts; the outcome could even impact the next presidential election. Lawyers for the Brennan Center for Justice, a nonprofit public-interest law group based at New York University, are representing hundreds of thousands of ex-felons in a class action. The suit asks that ex-felons be allowed to vote again, despite a 135-year-old Florida law that bans them, The Bradenton Herald reports. The basic legal issue in the plaintiffs' class action will depend on whether a three-judge federal appellate panel from the 11th U.S. Circuit Court of Appeals in Atlanta believes that state law dating back to 1868, and amended a century later, deliberately discriminates against ex-felons, especially blacks, who form a disproportionate number of that group. Last year, US District Judge James Lawrence King of Miami rejected all constitutional arguments made in the ex-felons' lawsuit. He ruled that, while evidence suggested Florida's "felon disenfranchisement" policies were racially motivated in 1868, the plaintiffs failed to offer "any evidence that the Legislature that enacted the law in 1968, did so to discriminate against African Americans." Florida is one of seven states that ban the automatic restoration of ex-felons' voting rights, requiring instead that they apply to the state's Clemency Board. The other states are Alabama, Iowa, Kentucky, Mississippi, Nevada and Virginia. Last month, Wyoming, which would have been enumerated on the list of states banning automatic restoration of voting rights, changed its law to permit nonviolent ex- felons to vote again. The plaintiffs' class action claims that the clemency-board process sets a challenge so high that ex-felons essentially are barred from casting a ballot for the rest of their lives. The appellate panel in Atlanta could uphold Judge King or order a trial of the issues. If the latter happens, it is likely that Governor Jeb Bush's administration, which staunchly opposes automatic restoration of ex-felons' voting rights, would appeal to the US Supreme Court. Much could be riding on the outcome, according to independent political observers. The assumption is that if the ex-felons could vote again, they might cast ballots primarily for Democratic candidates. Independent pollster James Kane points out that the Republicans' fear is based in realities, since a great many of the ex-felons are African- Americans, and African-Americans vote Democratic 90 percent of the time. In a close election they could make a great difference. "They changed the language somewhat, but the basic policy of forever disenfranchising ex-felons is still the same and continues to have a discriminatory effect," said Jessie Allen, an attorney for the Brennan Center. Ms. Allen said an estimated 613,000 ex-felons were denied voting rights three years ago, and 167,000 of those were blacks. As a result, she said, five percent of Florida's voting-age public and 10 percent of Florida's black voting-age population were blocked from the polls, suggesting "a serious problem with our democracy." Attorney David Thompson, a lawyer with the Jeb Bush administration, countered that the state law never originally was meant to be racially biased against blacks after the Civil War and that the Florida Legislature never had race in mind when it revised the law during the Civil Rights era. "Everyone agrees there was no racist intent there," said Mr. Thompson. HENRY FORD: Emergency-Room Doctors Commence Suit Over Hospital Policies ----------------------------------------------------------------------- Henry Ford Health System faces a class action filed in Wayne County Circuit Court on behalf of all staff doctors of the emergency-medicine department at its Detroit campus, Crains Detroit.com reports. Emergency-room doctors C. Patrick Loeckner, Dorris Tyson and Karen Randall-Kristal filed the suit, alleging the System violated a lawsuit Wednesday against Henry Ford Health System, claiming that it has violated an agreement to pay ER physicians millions of dollars in revenue. The System allegedly proposed and implemented a plain in 2003, which required ER doctors to manage and assume the risks for certain expenses in the department. The agreement allegedly called for the doctors to receive a portion of department revenues that exceeded expenses, under a prearranged formula, according the suit, which was filed by The Googasian Group P.C., a Bloomfield Hills law firm that usually sues doctors and hospitals for patients. The suit further alleges that: (1) hospital admission policies gave priority to patients from Henry Ford Health System satellites. That forced the Detroit ER doctors to give care to patients who should have been admitted quickly to the intensive-care, cardiac or other hospital units; (2) emergency medical care became increasingly difficult after the hospital eliminated its pediatric-care unit and 24-hour pharmacy; (3) emergency-room staff doctors were paid salaries "tens of thousands of dollars below" those paid to ER doctors at other area hospitals. (4) these adverse working conditions sapped the morale of ER doctors, causing several to take positions at other hospitals Hospital officials have not yet reviewed the lawsuit and declined to comment, Henry Ford Health's media-relations director, Dwight Angell told Reuters. ILLINOIS: Chicago Police Dept Sued Over Arrest of Anti-War Protesters --------------------------------------------------------------------- The city of Chicago, Illinois faces a class action filed by anti-war war demonstrators arrested during a downtown Chicago protest, the TimesLeader.com reports. The suit alleges the Chicago police violated their promise to let the peaceful protest commence. The police arrested more than 200 people in the March 20 protest, as 10,000 demonstrators crowded a plaza near the city's federal courthouse before marching to the main artery running up the lakefront. "The police made an arbitrary decision ... to pin and herd people in and say, OK, that's it, no more First Amendment for you," attorney Janine L. Hoft said at a news conference, the Associated Press reports. The policy allegedly gave permission for the march but then for an unspecified reason rescinded the permission. According to witnesses, police tried to contain the crowd but demonstrators repeatedly broke through their ranks, only to be stopped again as horse-mounted officers and others in riot gear headed them off, AP reports. Police department spokeswoman Officer Joann Taylor told AP the department does not comment on pending lawsuits. LEARNING CURVE: Recalls 3,800 Children's Toys For Lead Poisoning Hazard ----------------------------------------------------------------------- Learning Curve, Int'l, Inc. is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling approximately 3,800 children's activity toys. The paint on the metal wires of these toys contains excess levels of lead. Lead poisoning is a serious hazard to children and is associated with behavioral problems, learning disabilities, hearing problems and growth retardation. The Company has not received any reports of incidents or injuries involving these toys. This recall is being conducted to prevent the possibility of injury. There are two types of activity toys involved in this recall. One toy is a flower shaped toy intended to attach to a stroller, with a green painted metal wire on which plastic beads slide along. The item is the Lamaze Flower Stroller Wrap (SKU #97222). The other toy is a floor- based toy with a foam stuffed base, a blue painted metal wire on which plastic beads and stuffed animal heads slide along. This item is the Lamaze Soft Bead Buddies (SKU #97325). Each item has a sewn-in label with the Lamaze logo on the front. These toys were sold in March 2003 through specialty and toy stores nationwide for around $19.99. For more details, contact the Company by Phone: (800) 704-8697 between 8:00 am and 5:00 pm CT, Monday through Friday or visit the company's Website: http://www.learningcurve.com LUTHERAN MEDICAL: Agrees To Settle Sexual Harassment Suit V. Physician ---------------------------------------------------------------------- The Lutheran Medical Center agreed to settle for $5.4 million a class action filed by employees allegedly sexually harassed by staff physician Dr. Conrado Ponio. The settlement is the largest of its kind in New York, officials said, The New York Daily News reports. Several female employees alleged that the sex-obsessed physician abused them during routine physical examinations for new workers. Newly hired nurse Tara McCormack thought the breast and gynecological exams were routine. Another nurse, Sheila Linz recalls protesting, but the doctor "wouldn't take no for an answer." The victims spoke out yesterday, at a news conference announcing the settlement. Dr. Ponio, 50, began working at the hospital in 1996. He was fired in January 2000, after the allegations became public. The state revoked his medical license February 13 this year, the Daily News stated. Under the consent decree filed yesterday in Brooklyn Federal Court, Lutheran is also required to institute strict prohibitions against sexual harassment. "We obviously deplore Dr. Conrado Ponio's behavior," Wendy Goldstein, president and CEO of Lutheran told the Daily News. RAVENS INDUSTRIES: Voluntarily Recalls Remote Controls Over Fire Hazard ----------------------------------------------------------------------- Raven Industries is voluntarily recalling about 450 Infrared Remote Controls used only with Adjustamagic, Scape and Maxwell Adjustable Beds. An internal component can overheat, presenting risks of fire or thermal burns to consumers. The Company has received two reports of melted housings, with no injuries. The recalled remote controls were distributed with these beds nationwide from November 1999 through November 2002. Retail value was approximately $20, if purchased separately. For more information, contact the Company by Phone: (800) 336-4092 between 8:30 am and 4:00 pm CST Monday through Friday. REITER DAIRY: Recalls Fat Free Chocolate Milk For High Vitamin A Levels ----------------------------------------------------------------------- Reiter Dairy, Inc., Barberton, Ohio, recalled 150 half gallons of its Topps Vitality Fat Free Chocolate Milk because it contains a significantly higher-than-labeled level of vitamin A. (Approximately 44,700 International Units (IU) per quart are present in each quart of the product instead of the intended level of 2,000-3,000 IU.) Excessive amounts of vitamin A ingestion can lead to severe health problems, including birth defects in babies born to mothers who consume excess levels of vitamin A during the first trimester of pregnancy. Among infants, the ingestion of excessive levels of vitamin A may cause an increase in the pressure of the fluid within the brain, hair loss, and abnormal changes in bone formation. For persons of all ages, excess vitamin A ingestion can lead to reversible or irreversible liver disease. The same product is also being recalled because it contains too much vitamin D as well (4,000 IUs instead of the intended 400-600 IUs). The consumption of excess amounts of vitamin D may result in abnormally high blood levels of calcium and phosphate, which, in rare instances, may lead to abnormal deposits of calcium in various parts of the body. The recall was initiated after it was discovered that the product contained more than the labeled amount of vitamins due to an error by the manufacturer. The fat free chocolate milk, packed in 1/2 gallon containers coded "MAR 27," was distributed to retail stores in Ohio, Pennsylvania, and New York. Consumers who have purchased Topps Vitality Fat Free Chocolate Milk are urged to return it to the place of purchase for a full refund. For more details, contact the Company by Phone: 1-800-362-0825. SECURITIES LITIGATION: Investment Banks To Take Big Hit in IPO Lawsuits ----------------------------------------------------------------------- Investment analyst CreditSights states that three big investment banks will be taking huge financial hits, as the multi-billion dollar initial public offering (IPO) lawsuits filed in the United States District Court for the Southern District of New York runs it course, Reuters reports. Investment firms Goldman Sachs Group, Morgan Stanley and Credit Suisse First Boston could face the biggest penalties in the suit, which charges Wall Street banks with manipulating and artificially inflating the stock price of hundreds of IPOs. The three investment banks underwrote the majority of 309 initial public offerings implicated in the suit. As a result, they stand to pay the lion's share of a settlement that could total as much $4 billion, according to research company CreditSights Inc. "The banks themselves are saying that they're concerned," CreditSights analyst David Hendler, referring to warnings about ongoing civil litigation made by investment banks in their annual reports told Reuters. "If they're concerned, then why shouldn't we be concerned?" Hundreds of suits were commenced in 2001 against 309 issuing companies and 55 investment banks, alleging fraud and violations of federal securities laws. The suits similarly assert that: (1) analysts manipulated the market with optimistic research; (2) banks ramped up commissions in exchange for access to IPO shares; and (3) investors allocated IPOs were required to buy shares in the after market in a practice known as "tie-ins." In February, the court refused to dismiss the suits, allowing them to move closer to trial. The pressure to settle the suits might be strong, according to a Reuters story. However, some market watchers point out that it is too early to predict a settlement, and that if the suit is settled, plaintiffs' lawyers would settle for substantially less than $4 billion. Furthermore, in a bear market where revenues have fallen, investment banks will be more likely to fight allegations to try to avoid paying penalties, Lehman Brothers financial services analyst Brock Van Der Vliet told Reuters. "We reserve for litigation expenses when they are probable and estimable," a Goldman (GS: Research, Estimates) spokeswoman told Reuters. "We are very comfortable with the reserves we have." A spokeswoman at Morgan Stanley (MWD: Research, Estimates) did not return a call for comment. Credit Suisse declined to comment. Among other banks, CreditSights estimates that Merrill Lynch (MER: Research, Estimates) faces penalties of $326 million, FleetBoston Financial (FBF: Research, Estimates) faces paying $383 million, and Lehman Brothers (LEH: Research, Estimates) will have to pay an estimated $158 million. TEXAS: Senator Questions Class Action Litigation Part Of New Tort Bill ---------------------------------------------------------------------- Democratic Senator Rodney Ellis of Houston, a member of the Senate committee now hearing testimony on the tort bill, said recently that the proposed legislation, passed by the Texas House, could hinder class actions lawsuits like those against life insurance companies that engaged in race-based pricing, Associated Press Newswires reports. Therefore, said Senator Ellis, he doubts that the sweeping measure the Texas House passed will remain intact. "A number of Republican colleagues, as well as Democratic colleagues, have said to me, privately, that they have serious reservations about this bill (HB4)," Senator Ellis said. "I would be very surprised if such a Draconian measure, which is what we have before us, gets out of this Senate in that form." Senator Ellis said the bill goes too far in favor of corporations and could have a "debilitating" effect on people who have been wronged. However, Richard Trabulsi Jr., President of Texans for Lawsuit Reform, said the bill contains "meaningful reforms that are long overdue and desperately needed." He urged that its major provisions be maintained. Among other things, the bill would: (1) place a $250,000 cap on non-economic damages, such as pain and suffering, in medical malpractice lawsuits; (2) require plaintiff to pay attorneys fees for the defendant if the plaintiff does not win an award bigger than a previous settlement offer; and (3) require participants in class actions to first seek remedies through state agencies. The class action portion of the bill was a key subject as the Senate State Affairs Committee began to hear testimony. Senator Ellis said Texans who had banded together, for example, to sue certain life insurance companies because they set discriminatory pricing based on race might not have that opportunity under the proposed House bill. His aunt was a plaintiff in one of those cases, and the amount of money she won was too small to justify an individual lawsuit, said the Senator. "There is no way she could have gotten a lawyer to take the case. It would not have been logical for her to even take the time to go and sue an insurance company and take in only $250. And it wasn't the money in that case that mattered so much. It was the opportunity to get some of our dignity back," said Senator Ellis. Unitrin Inc., American General Life and Accident Insurance Co. and Life Insurance Co. of Georgia, are among the companies that have settled with class action plaintiffs across the country who alleged policies were priced on the basis of race. Defenders of the lawsuit limitation bill disagreed with Senator Ellis that the House bill would prevent legitimate class actions such as the race-based pricing lawsuits. The bill only requires that class action litigants exhaust administrative remedies first. The bill would actually help those in class action cases by limiting attorneys fees and giving more of the final judgment money to victims, said Kenneth Hoagland, spokesman for Texans for Lawsuit Reform. Consumer advocates criticized the bill's class action provision. The legislation "is simply one more lobby-driven attempt to deny and delay justice for Texans who have been cheated," said Dan Lambe, executive director of Texas Watch. Senator Bill Ratliff, R-Mt. Pleasant, who chairs the Senate State Affairs Committee, has said he will take time to hear testimony from all sides. The Republican-led House committee that heard the bill was criticized by Democrats and consumer groups for not allowing adequate public input and for holding a secret meeting. TEXAS: TX Court Hears Arguments on Abortion Facility Regulations Suit --------------------------------------------------------------------- The 125th Judicial District Courtroom, Harris County Courthouse held a hearing to certify a class action filed by women injured by abortion against the State of Texas, State Department of Health, and the Texas Medical Disclosure Panel on April 11, 2003. Women who have been injured by abortion in Texas filed suit against the state for failing to enforce existing abortion facility regulations to protect the health of women seeking abortions. A hearing will be held on whether the class action can proceed. The plaintiffs are women who sought and received abortions in Texas and received a variety of physical and emotional injuries, including ruptured uterus, sterility, severe guilt and depression. The suit alleges that the state of Texas: (1) fails to require abortion providers to give enough information for informed consent; (2) fails to adequately investigate unlicensed abortion facilities; (3) fails to adequately inspect and examine licensed facilities; (4) fails to cooperate with other state agencies attempting to prosecute illegal activity in abortion facilities; (5) fails to prevent the unauthorized practice of medicine by unlicensed individuals in abortion facilities; and (6) fails to require abortion clinics to report child abuse which resulted in pregnancy. The Texas Justice Foundation President, Allan Parker, stated: "Instead of protecting women, the State wants to protect itself by having this lawsuit dismissed." Several of the women were injured by abortions performed in abortion clinics by non-licensed personnel, including non-doctors. One of the plaintiffs is the mother of a minor child who was under medical care for depression, but who obtained an abortion without her parents' consent resulting in a significant increase in the child's mental illness, including required hospitalization. Abortions are being performed in an illegal manner and which do not adequately protect the health of women. These women injured by abortion are seeking protection for women's health. For further information, contact the Texas Justice Foundation's Media Assistant, Queta Aguilar by Phone: 210-614-7157, ext. 203. TOBACCO LITIGATION: Judge Byron Considers Options To $12B Appeal Bond --------------------------------------------------------------------- Circuit Court Judge Nicholas Byron of Madison County, Illinois, seems willing to consider alternatives to having Philip Morris USA post a $12 billion appeal bond in order to appeal a recent class action tobacco verdict, Dow Jones Business News reports. Attorneys for the Altria Group Inc., Philip Morris's parent company, appeared in a hearing before Judge Byron on Tuesday, to ask the judge to reconsider a requirement that Philip Morris post the $12 billion bond to appeal Judge Byron's March 21 verdict. The verdict ordered Philip Morris USA, the largest cigarette-maker in the United States, to pay $10.1 billion in damages to 1.1 million Illinois smokers for misleading them into thinking its Marlboro Lights and Cambridge Lights cigarettes are less harmful than its regular brands. Plaintiff Philip Morris said the company cannot get a surety bond that large for non-payment of cash, and has said the court's requirement could bankrupt the tobacco company. Judge Byron did not reach a decision during the Tuesday hearing on the request to an alternative to the $12 billion bond; however, he is planning to continue the closed-door meetings with the two sides that he began Tuesday, on Thursday morning. Speaking to reporters during a conference call, an attorney for the plaintiffs said the two parties were ordered by the judge not to comment on the details of the ongoing discussions. In the public portion of Tuesday's hearing, Judge Byron said the tobacco company has other options, including having Altria Group, Philip Morris' parent, guarantee part of the judgment. In a related matter, earlier Tuesday, Philip Morris scored a victory in Cook County Circuit Court when Judge James F. Henry granted the company's request for a temporary restraining order against the state of Illinois, barring it from collecting the $3.6 billion punitive damage award it received in Judge Byron's judgment. Judge Henry will meet with the two sides on Friday to set a hearing date. Philip Morris pursued the request for the restraining order and the ultimate injunction with the Cook County Circuit Court because this court has jurisdiction over matters relating to the 1998 tobacco settlement between the major tobacco companies and 47 states. Philip Morris is contending that the state of Illinois relinquished all claims to a punitive damage award when it entered into the Master Settlement Agreement with Philip Morris and the other tobacco companies in 1998, to resolve the lawsuit brought by its attorney general and the attorneys general of the other 45 states. UNITED STATES: Supreme Court Sets New Federal Punitive Damage Limits -------------------------------------------------------------------- A Utah couple's 20-year battle against State Farm Mutual Automobile Insurance Co. has resulted in new federal limits on punitive damages nationwide, the Deseret News reports. The United States Supreme Court, in a 6 to 3 opinion, struck down an unprecedented $145 million punitive damages award for a Cache County, Utah, couple involved in a 1981 fatal car accident in Sardine Canyon, Utah. In its opinion, the High Court ruled the award, which Utah's Supreme Court had permitted, was constitutionally excessive and was "neither reasonable nor proportionate to the wrong committed." Curtis and Inez Campbell sued State Farm after it refused to settle claims arising from the accident, which left one man dead and another permanently disabled. At trial, jurors found Mr. Campbell 100 percent liable and ordered him to pay the victims more than three times the proposed out-of-court settlement. State Farm refused to settle the claims under its policy with the Campbells, and the Campbells sued the company charging bad faith and fraud. A jury originally awarded them $145 million in punitive damages and $2.6 million in compensatory damages. However, the trial judge reduced the awards to $25 million and $1 million, respectively. Upon appeal to Utah's Supreme Court, the court reinstated the higher jury award of damages, in October 2001. Among its findings the state Supreme Court determined State Farm was guilty of "malicious and reprehensible" conduct toward its clients, especially those who are elderly, poor or minorities. The US Supreme Court not only found the Utah court's award "constitutionally excessive," but determined that punitive damage awards must generally be capped at no more than 10 times the actual harm suffered by defendants, rather than the 145-to-1 ratio in the instant case. "This is a major decision that will affect all state and federal courts in the way in which they compute punitive damages and the degree to which they allow juries to impose punitive damages," said University of Utah law professor John Flynn. "It is a very significant decision." The court declined to impose a "bright-line ratio" which punitive damages cannot exceed, but noted that an award that is more than four times the amount of compensatory damages "might be close to the line of constitutional impropriety." The High Court said the Utah justices had inappropriately used the case "as a platform to expose and punish the perceived deficiencies of State Farm's operations throughout the country and had erred in allowing evidence of perceived wrongdoing in states other than Utah. "While we do not suggest there was error in awarding punitive damages based upon State Farm's conduct toward the Campbells, a more modest punishment for this reprehensible conduct could have satisfied the state's legitimate objectives, and the Utah courts should have gone no further," Justice Anthony M. Kennedy wrote in the opinion for the U.S. Supreme Court. In dissenting opinions, Justices Antonin Scalia and Clarence Thomas wrote that the U.S. Constitution does not constrain the size of punitive damage awards. Justice Ruth Bader Ginsburg, also dissenting, wrote that the High Court "has no warrant to reform state law governing awards of punitive damages." The case will now return to the Utah Supreme Court so justices here can re-evaluate the evidence and impose damages in line with the High Court's ruling. The Campbells' attorney, Rich Humpherys, said in a recently released statement that large corporations will take advantage of the newly imposed punitive damage cap. "We are concerned that some companies, such as State Farm, will view today's ruling as some sort of 'green light' to defraud consumers, with little concern for being held accountable," said Mr. Humpherys. Companies could possibly calculate the amount of punitive damages, Mr. Humpherys said, and then "feel free to commit intentional misconduct whenever the risk of punishment seemed low enough." Curtis Campbell died in December 2001, from Parkinson's disease. He was 83. State Farm has not paid the Campbells any of the $2.6 million in compensatory damages ordered by the state Supreme Court, even though that amount has never been appealed by State Farm. Mr. Humpherys noted that the US Supreme Court did not set aside the Utah Supreme Court's findings of fraud and misconduct that State Farm perpetrated on the Campbells, and which are the grounds for the awards of compensatory and punitive damages, the latter of which will be amended in accordance with the guidelines set down by the High Court. New Securities Fraud Cases ACCREDO HEALTH: Abbey Gardy Lodges Securities Fraud Lawsuit in W.D. TN ---------------------------------------------------------------------- Abbey Gardy, LLP initiated a securities class action in the United States District Court for the Western District of Tennessee, against Accredo Health, Inc. (Nasdaq: ACDO) on behalf of purchasers of the common stock of Accredo Health, Inc. between June 16, 2002 and April 7, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between June 16, 2002 and April 7, 2003, thereby artificially inflating the price of Accredo common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company was failing to timely record an impairment in the value of certain receivables that it had acquired in a recent acquisition; (2) as a result of the foregoing, the Company's financial statements published during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles (GAAP). During the Class Period, Accredo insiders sold more than $12 million worth of their Accredo stock while in possession of the true facts about the Company On April 8, 2003, prior to the opening of the market, Accredo shocked the market by announcing that it was reducing its previously issued earning guidance and that it was examining the adequacy of reserves for accounts receivables that it acquired in a recent acquisition. On this news, the price of Accredo common stock down over 43%, to close at $14.29, down from $25.40. For more details, contact Nancy Kaboolian by Phone: (800) 889-3701 or (212) 889-3700 or by E-mail: Nkaboolian@abbeygardy.com. ACCREDO HEALTH: Chitwood & Harley Lodges Securities Lawsuit in W.D. TN ---------------------------------------------------------------------- Chitwood & Harley LLP initiated a securities class action in the United States District Court for the Western District of Tennessee, against Accredo Health, Inc. (NASDAQ:ACDO). The suit was filed on behalf of purchasers of the common stock of Accredo Health, Inc. between June 16, 2002 and April 7, 2003, inclusive The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between June 16, 2002 and April 7, 2003, thereby artificially inflating the price of Accredo common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company was failing to timely record an impairment in the value of certain receivables that it had acquired in a recent acquisition; (2) as a result of the foregoing, the Company's financial statements published during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles (GAAP); (3) that the Company would not have been able to meet its stated earnings guidance had it properly reserved for its accounts receivables; and (4) defendants' earnings guidance and positive statements concerning the Company lacked a reasonable basis. On April 8, 2003, prior to the opening of the market, Accredo shocked the market by announcing that it was reducing its previously issued earning guidance and that it was examining the adequacy of reserves for accounts receivables that it acquired in a recent acquisition. The market reacted swiftly to this news, pushing the price of Accredo Health common stock down over 43%, to close at $14.29, down from $25.40, on extremely heavy volume. During the class period, Accredo insiders sold more than $12 million worth of their personally-held Accredo stock while in possession of the true facts about the Company. For more details, contact Jennifer Morris by Mail: 1230 Peachtree Street, Suite 2300, Atlanta Georgia by Phone: 1-888-873-3999 (toll- free), by E-mail: jlm@classlaw.com or visit the firm's Website: http://www.classlaw.com ALLOY INC.: Bernstein Liebhard Lodges Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for Southern District of New York, on behalf of all persons who purchased or acquired Alloy, Inc. (NASDAQ: ALOY) securities between August 1, 2002 and January 23, 2003, inclusive. 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 August 1, 2002 and January 23, 2003. Alloy is a teen-focused media company and direct marketer that targets Generation Y consumers, i.e., the approximately 60 million people in the United States between the ages of 10 and 24. The complaint alleges that the Company claimed that its merchandising and advertising segments complemented one another in a way that gave the Company an edge over competitor teen retailers and media businesses and which would enable it to succeed despite difficult market conditions in the second half of 2002. Unbeknownst to investors, the Company faced fierce competition for the youth market and the weak economy forced the Company to cut its prices and increase operating expenses, e.g., by offering free shipping and deep discounts, thereby eroding Alloy's gross profit margin. On January 23, 2003, the Company shocked the market by announcing that EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11 million to $12 million instead of the previously projected $15 million to $16 million and that fiscal 2002 EBTA would be in the range of $30 to $31 million instead of the previously forecast $34 million to $38 million. On this news, the Company's share priced plummeted by 49%, or $4.57, from the previous day's closing price of $9.10. For more details, contact Ms. Linda Flood, Director of Shareholder Relations, by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: ALOY@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. BAYER AG: Bernstein Liebhard Lodges Securities Fraud Lawsuit in S.D. NY ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for Southern District of New York, on behalf of all persons who purchased or acquired the American Depositary Receipts (ADRs) of Bayer AG (NYSE: BAY) between May 26, 1999 and February 21, 2003, inclusive. 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 May 26, 1999 and February 21, 2003. Specifically, the complaint alleges that during the class period, defendants made false and misleading statements about the successful introduction and strong sales of the Company's new cholesterol fighting product, Baycol, and represented that the Company enjoyed and would continue to enjoy strong revenue, earnings and earnings per share growth as a result of the addition of Baycol to the Company's product line. The complaint further alleges that defendants also misrepresented that Baycol was safe for use by patients attempting to treat high cholesterol and did not present a significant risk of adverse side effects. In fact, Baycol was not safe but rather, dangerous to the public requiring the drug to be withdrawn. Baycol caused fatal Rhabdomyolysis in patients who used Baycol in combination with gemfibrozil, another lipid lowering drug, the complaint alleges. The complaint further alleges that senior executives at Bayer were aware that Baycol had serious problems and presented health risks to patients long before the Company pulled the drug from the market in August 2001, and that defendants overstated Bayer's assets and understated its liabilities (totaling in excess of $257 million) associated with the Company overcharging Medicaid, the United States government's health plan for the poor. For more details, contact Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 by E- mail: BAY@bernlieb.com or visit the firm's Website: http://www.bernlieb.com CIT GROUP: Milberg Weiss Commences Securities Fraud Lawsuit in S.D. NY ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of persons who purchased the common stock of CIT Group Inc. (NYSE: CIT) in or traceable to the Company's initial public offering commenced on or about July 1, 2002, and who have been damaged thereby. The action is pending in the United States District Court for the Southern District of New York, against the Company, Albert R. Gamper, Jr. (CEO and President) and Joseph M. Leone (CFO). The complaint charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 because CIT's IPO registration statement and prospectus contained materially false and misleading statements of fact. The complaint alleges, among other things, that the Prospectus falsely represented that CIT's reserves for losses in its telecommunications finance portfolio were "adequate" despite recent declines in the sector, which were expected to continue. In addition, the prospectus further characterized as adequate its reserves for credit losses in general. According to the complaint, these statements were materially false and misleading when made because, among other reasons, they failed to disclose that the Company's loan loss reserves for its finance portfolio in the telecommunications industry, and its loan portfolio in general, were materially deficient in light of material credit losses that had already been incurred. The complaint further alleges that the Company's assets and shareholders' equity were overstated in the Prospectus by reason of the foregoing. On July 23, 2003, CIT announced that it took a $200 million charge to strengthen the telecommunications loan reserves that it represented were adequate only three weeks previously. On April 8, 2003, the price of CIT common stock closed at $17.40 per share, which is 24% lower than the IPO price of $23 per share. For more details, contact Steven G. Schulman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: citcase@milbergNY.com or visit the firm's Website: http://www.milberg.com CORE LABORATORIES: Charles Piven Files Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Core Laboratories, N.V. (NYSE: CLB) between May 6, 2002 through March 31, 2003, inclusive, in the United States District Court for the Southern District of New York. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com CORE LABORATORIES: Schiffrin & Barroway Commences Securities Suit in NY ----------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Core Laboratories, N.V. (NYSE:CLB) from May 6, 2002 through March 31, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between May 6, 2002, and March 31, 2003, thereby artificially inflating the price of Core common stock. Throughout the class period, as alleged in the complaint, defendants issued numerous statements and filed quarterly reports with the SEC which described the Company's increasing financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income and earnings per share; (2) that the Company had overstated its ability to collect on certain accounts receivable; (3) that the Company had improperly delayed the booking of expenses and foreign exchange translation losses from certain field locations; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results was materially overstated at all relevant times. On March 31, 2003, after the markets had closed trading for the day, the Company shocked the market by announcing that it would be restating its financial results for prior 2002 quarterly operating results because of: (i) the issuance of duplicate invoices in the Company's Mexico operations; (ii) the need for higher provisions for doubtful accounts receivables; (iii) the need for timely booking of expenses and foreign exchange translation losses from certain field locations; (iv) changes in the estimated life of certain assets; and (v) consolidation costs of two Nigerian offices Following this announcement, shares of Core common stock fell $1.31 per share, or more than 12.5%, to close at $9.09 per share, on volume of 515,300 shares traded, or almost four times the average daily volume. For more details, contact Marc A. Topaz, Stuart L. Berman by Phone: (888) 299-7706 (toll free) or (610) 667-7706 by E-mail: info@sbclasslaw.com CORE LABORATORIES: Brian Felgoise Commences Securities Fraud Suit in NY ----------------------------------------------------------------------- The Law Offices of Brian M. Felgoise, PC initiated a securities class action on behalf of shareholders who acquired Core Laboratories, N.V. (NYSE:CLB) securities between May 6, 2002 and March 31, 2003, inclusive. The case is pending in the United States District Court for the Southern District of New York, against the company and certain key officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Brian M. Felgoise by Mail: 261 Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046, by Phone: 215-886-1900 or by E-mail: securitiesfraud@comcast.net I2 TECHNOLOGIES: Wechsler Harwood Files Securities Lawsuit in N.D. TX --------------------------------------------------------------------- Wechsler Harwood LLP initiated a securities class action in the United States District Court for Northern District of Texas, on behalf of all persons who purchased or acquired i2 Technologies, Inc. (Nasdaq:ITWO) securities between April 18, 2000 and January 24, 2003, inclusive. Plaintiff alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated under Section 10(b), by issuing a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of i2 securities. Plaintiff alleges that defendants repeatedly issued financial results that were materially false and misleading when made because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) the Company had materially overstated its revenue by improperly recognizing revenue on certain customer contracts; (2) the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) as a result of the foregoing, the Company's financial statements issued during the class period were materially false and misleading. On January 27, 2003, defendants announced that i2 would re-audit its financial statements for the years ended December 31, 2000 and 2001 due to "recent information developed during the audit committee's ongoing investigation of certain allegations regarding the company's revenue recognition with respect to certain customer contracts and its financial reporting for those years." Defendants further reported that i2 had notified the SEC of these allegations, and that the SEC staff has begun an informal inquiry into these matters. After this news, i2 common stock fell from a close of $1.26 per share on January 24, 2003 to a close of $0.92 per share on January 27, 2003, the next trading day, amounting to a single-day decline of more than 26% on very heavy trading volume. For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: (877) 935-7400 by E-mail: dleifer@whesq.com IMPERIAL CHEMICAL: Schiffrin & Barroway Lodges Securities Lawsuit in NY ----------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Imperial Chemical Industries plc (NYSE:ICI) from August 1, 2002 through March 24, 2003, inclusive. The complaint charges Imperial Chemical Industries PLC and certain of its officers and directors with issuing false and misleading statement concerning its business and financial condition. Specifically, the complaint alleges that defendants issued numerous press releases in which they stated that they had resolved the Company's distribution and software problems that the Company had experienced at its Quest division's Fragrance & Food businesses. Defendants further stated that the Company was on track to report strong financial results, that the Company had cleared its backlog of customer orders and that the Company had not lost any customers as a result of its production problems. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that ICI's software, distribution and production problems at its Quest division were not "temporary" problems or "unique" to the Naarden, The Netherlands location, but impacted company-wide operations and profitability; (2) that ICI's software, distribution and production problems at its Quest division had not been "essentially" or "largely" "resolved" or "rectified"; and (3) that contrary to ICI's representations that it had cleared its backlog of orders and not lost any customers as a result of the software, distribution and production problems at Quest, ICI's customers were, in fact, obtaining new sources of supply and discontinuing their relationships with ICI. On March 25, 2003, before the open of trading, ICI shocked investors when it issued a profit warning with respect to its fiscal 2003 first quarter. Defendants announced that its first quarter profit would drop approximately 24%, as a result of, among other things, "business lost following the customer service problems in 2002." Following this announcement, shares of ICI fell from a close of $9.60 per share on March 24, 2003 to a close of $5.60 per share on March 25, 2003, or a single-day decline of more than 36%, on nearly twenty times normal trading volume. 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 or by E-mail: info@sbclasslaw.com IMPERIAL CHEMICAL: Brian Felgoise Lodges Securities Lawsuit in S.D. NY ---------------------------------------------------------------------- Brian M. Felgoise, PC initiated a securities class action on behalf of shareholders who acquired Imperial Chemical Industries PLC (NYSE:ICI) securities between August 1, 2002 and March 24, 2003, inclusive, in the United States District Court for the Southern District of New York, against the company and certain key officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Brian M. Felgoise by Mail: 261 Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046, by Phone: 215-886-1900 or by E-mail: securitiesfraud@comcast.net IMPERIAL CHEMICAL: Cauley Geller Launches Securities Lawsuit in S.D. NY ----------------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Imperial Chemical Industries PLC (NYSE: ICI) American Depositary Shares ("ADSs"), each representing 1 pound Sterling Ordinary Share, during the period between August 1, 2002 to March 24, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 1, 2002 and March 24, 2003, thereby artificially inflating the price of ICI securities. Throughout the class period, as alleged in the Complaint, defendants issued numerous press releases in which they stated that they had resolved the Company's distribution and software problems that the Company had experienced at its Quest division's Fragrance & Food businesses. Defendants further stated that the Company was on track to report strong financial results, that the Company had cleared its backlog of customer orders and that the Company had not lost any customers as a result of its production problems. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that ICI's software, distribution and production problems at its Quest division were not "temporary" problems or "unique" to the Naarden, The Netherlands location, but impacted company-wide operations and profitability; (2) that ICI's software, distribution and production problems at its Quest division had not been "essentially" or "largely" "resolved" or "rectified"; and (3) that contrary to ICI's representations that it had cleared its backlog of orders and not lost any customers as a result of the software, distribution and production problems at Quest, ICI's customers were, in fact, obtaining new sources of supply and discontinuing their relationships with ICI. On March 25, 2003, before the open of trading, ICI shocked investors when it issued a profit warning with respect to its fiscal 2003 first quarter. Defendants announced that its first quarter profit would drop approximately 24%, as a result of, among other things, "business lost following the customer service problems in 2002." Following this announcement, shares of ICI fell from a close of $9.60 per share on March 24, 2003 to a close of $5.60 per share on March 25, 2003, or a single-day decline of more than 36%, on nearly twenty times normal trading volume. For more details, contact Samuel H. Rudman, David A. Rosenfeld, 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 Fax: 1-501-312-8505 by E- mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com KING PHARMACEUTICALS: Wechsler Harwood Lodges Securities Suit in TN ------------------------------------------------------------------- Wechsler Harwood LLP initiated a securities class action in the United States District Court for the Eastern District of Tennessee, Northeastern Division at Greeneville, on behalf of purchasers of King Pharmaceuticals (NYSE:KG) publicly traded securities during the period between February 16, 2000 and March 10, 2003, inclusive. The complaint alleges that defendants violated sections 10(b) and 20(a) of the Securities & Exchange Act of 1934 by issuing materially false and misleading statements during the Class Period and violated sections 11 and 15 of the Securities Act of 1933 by issuing a materially false and misleading Registration Statement and Prospectus in connection with the Company's acquisition of Jones Pharma, Inc. The complaint also alleges that defendants issued statements regarding the Company's financial performance and future prospects and the strong demand for its branded pharmaceutical products, notably Altace and Levoxyl. Additionally, the Company failed to disclose that certain of its rebate and pricing practices subjected it to heightened governmental scrutiny. As alleged in the Complaint, these statements were each materially false and misleading when made as they misrepresented and/or omitted the following adverse facts which then existed and disclosure of which was necessary to make the statements made not false and/or misleading, including: (1) that the Company's rebate practices and "best price" lists subjected it to heightened regulatory scrutiny as governmental agencies increased their activity in this area; (2) that the Company had understated the level of generic competition for Levoxyl; and (3) that the Company had engaged in questionable sales to VitaRx and Prison Health Services during 1999 and 2000. On March 11, 2003, King Pharmaceuticals was subject to an SEC investigation for, among other things: (i) the sales of its products to VitaRx and Prison Health Services during 1999 and 2000; (ii) its "bestprice" lists; (iii) all documents related to the pricing of its pharmaceutical products to any governmental Medicaid agency during 1999; and (iv) the accrual and payment of rebates on Altace from 2000 to the present In response to this announcement, the price of King Pharmaceuticals common stock declined precipitously, falling from $15.90 per share to $12.17 per share. For more details, contact Ramon Pinon by Mail: 488 Madison Avenue, 8th Floor New York, New York 10022 by Phone: (877) 935-7400 or by E-mail: rpinon@whesq.com NAM TAI: Cauley Geller Commences Securities Fraud Suit in S.D. New York ----------------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of Nam Tai Electronics, Inc. (NYSE: NTE) common stock during the period between December 3, 2002, through February 14, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between December 3, 2002, through February 14, 2003, thereby artificially inflating the price of Nam Tai common stock. Throughout the class period, as alleged in the complaint, defendants issued numerous statements regarding the Company's increasing financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On February 18, 2003, the Company shocked the market by announcing that it would be moving "a $1.5 million charge related to its JIC unit from its fourth quarter to its second quarter." The Company stated that "it determined the noncash charge, for the creation of a minority interest in its JIC unit, should have been reflected in the period when the minority interest was created." As a result, the Company's second- quarter earnings have been revised to $3.8 million, from an originally reported $5.3 million. Following this announcement, shares of Nam Tai stock fell from $33.41 per share on February 14, 2003, to $27.65 per share on February 18, 2003, on volume of 752,000 shares traded. For more details, contact Samuel H. Rudman, David A. Rosenfeld, 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 Fax: 1-501-312-8505 or by E- mail: info@cauleygeller.com NAM TAI: Schiffrin & Barroway Lodges Securities Fraud Suit in S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Nam Tai Electronics, Inc. (NYSE:NTE) from December 3, 2002 through February 14, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between December 3, 2002, through February 14, 2003, thereby artificially inflating the price of Nam Tai common stock. Throughout the class period, as alleged in the Complaint, defendants issued numerous statements regarding the Company's increasing financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On February 18, 2003, the Company shocked the market by announcing that it would be moving "a $1.5 million charge related to its JIC unit from its fourth quarter to its second quarter." The Company stated that "it determined the noncash charge, for the creation of a minority interest in its JIC unit, should have been reflected in the period when the minority interest was created." As a result, the Company's second-quarter earnings have been revised to $3.8 million, from an originally reported $5.3 million. Following this announcement, shares of Nam Tai stock fell from $33.41 per share on February 14, 2003, to $27.65 per share on February 18, 2003, on volume of 752,000 shares traded. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: (888) 299-7706 (toll free) or (610) 667-7706 or by E-mail: info@sbclasslaw.com SYMBOL TECHNOLOGIES: Goodkind Labaton Commences Securities Suit in NY --------------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class action, pursuant to Section 27(a)(3)(A)(i) of the Securities Act of 1933, in the United States District Court for the Eastern District of New York on behalf of all persons and entities that acquired securities of Symbol Technologies, Inc. (NYSE:SBL) in exchange for securities of Telxon Corporation on or about November 30, 2000 pursuant to the merger of Telxon and Symbol. The defendants named in the complaint are the Company and nine of Symbol's current and former directors and officers: (1) Tomo Razmilovic, (2) Kenneth V. Jaeggi, (3) Robert W. Korkuc, (4) Jerome Swartz, (5) Harvey P. Mallement, (6) George Bugliarello, (7) Leo A. Guthart, (8) Charles B. Wang, and (9) James H. Simons The complaint asserts that Defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act. Plaintiff alleges in essence that the financial statements of Symbol as of September 30, 2000, that were contained in the Registration Statement and Joint Proxy/Prospectus for the merger of Telxon and Symbol, were materially false and misleading and not in conformity with Generally Accepted Accounting Principles (GAAP). On April 18, 2002, Symbol disclosed that the Securities and Exchange Commission was conducting a formal inquiry into Symbol's fiscal year 2000 and 2001 financial statements. On August 13, 2002, Symbol announced that it might be required to restate its financial results for all of 2000 and 2001. Subsequently, on February 13, 2003, Symbol announced that the scope of its accounting problems was far greater than previously disclosed going back to 1999. In a press release, Symbol stated "that it may have to restate its revenue and income" for the years 1999 through 2002. In particular, Symbol indicated, among other things, that there would be a net reduction in revenue and income for fiscal years 1999 and 2000. It was reported on March 13, 2002 that Symbol would have to restate revenue and income for 1999 and 2000 by as much as $140 million a year. Plaintiff alleges that Symbol's undisclosed violations of GAAP that occurred prior to and at the time of the merger, as well as the false and misleading financial statements and other representations included in the Registration Statement, damaged Telxon securities holders who received Symbol securities in the merger. For more details, contact Louis Gottlieb, or David J. Goldsmith by Mail: 100 Park Avenue, New York NY 10017 by Phone: 212-907-0879 by E- mail: lgottlieb@glrslaw.com or dgoldsmith@glrslaw.com or visit the firm's Website: http://www.glrslaw.com VAXGEN INC.: Scott + Scott Commences Securities Fraud Suit in N.D. CA --------------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of VaxGen, Inc. (Nasdaq: VXGN) publicly traded securities during the period between August 6, 2002 and February 26, 2003, inclusive. The complaint charges VaxGen and certain of its officers and directors with issuing materially false and misleading statements concerning its business and financial condition. VaxGen is engaged in the development and commercialization of AIDSVAX, a vaccine designed to prevent infection or disease caused by HIV (Human Immunodeficiency Virus), the virus that causes AIDS. During the class period, defendants were completing the final stages of AIDSVAX's Phase III clinical trials required to obtain Food and Drug Administration approval to market AIDSVAX as an AIDS vaccine. Throughout the class period, defendants caused VaxGen to make a number of positive statements about the status of the trial and describing their eventual plans to manufacture and market AIDSVAX, causing VaxGen's stock to trade at artificially inflated prices. On February 26, 2003, however, defendants were forced to admit that the reliability of their earlier reports of higher efficacy rates for non- caucasians were impaired because they had not taken the requisite "penalties" to account for the fact that less than 500 of the 5000 clinical trial participants were non-caucasians, resulting in an extremely small subset of data being analyzed for non-caucasians. As the news that earlier promises that AIDSVAX could prove useful for non-caucasians fell apart, the stock declined further, resulting in a total loss in market cap since November 18, 2002 of approximately 85%. For more details, contact David R. Scott or Neil Rothstein by Mail: 108 Norwich Avenue, Colchester, Connecticut by Phone: 800-404-7770 by Fax: 860-537=4432 or by E-mail: drscott@scott-scott.com or nrothstein@scott- scott.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 * * *