/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030508.mbx C L A S S A C T I O N R E P O R T E R Thursday, May 8, 2003, Vol. 5, No. 90 Headlines ACCREDO HEALTH: Investors Launch Securities Lawsuits in W.D. TN ACCREDO HEALTH: Investors Lodge Derivative Lawsuit in TN Court ALASKA: Fisheries Official Says Firm Never Tried To Lower Prices BELLSOUTH CORPORATION: Faces Racial Discrimination Lawsuit in AL BELLSOUTH CORPORATION: Investors Commence Stock Suits in N.D. GA BELLSOUTH CORPORATION: Faces GA Lawsuits For ERISA Violations BELLSOUTH CORPORATION: Faces Antitrust Lawsuits in GA, FL BELLSOUTH CORPORATION: Faces Consumer Antitrust Suit in S.D. NY CALIFORNIA: CALA Says Healthcare Crisis Caused By Litigation CATHOLIC CHURCH: Archdiocese Fails To Protect People From Priest CERNER CORPORATION: Investors Lodge Securities Fraud Suits in MO CHIRON CORPORATION: Average Wholesale Pricing Suits Consolidated CONNECTICUT: Officers Resign For Inappropriate Sexual Behavior CHICAGO PIZZA: Employees Lodge Overtime Wage Lawsuit In CA Court CRYOLIFE INC.: Asks GA Court To Dismiss Securities Fraud Lawsuit CRYOLIFE INC.: Faces Shareholder Derivative Suits in GA Courts EL PASO: Asks FERC For More Time To File Energy Suit Settlement FLORIDA: Picher Board To Decide on Joining Environmental Lawsuit NEXTEL: Customer Commences Class Action in PA Over Add-On Fees NOKIA INC.: Consumers File Amended Lawsuit Over Defective Phones PEC SOLUTIONS: Shareholders Commence Securities Suits in E.D. VA PENNSYLVANIA: ACLU Commences Rights Lawsuit Over Homeless Sweeps PHILIP MORRIS: Faces Another "Light Cigarettes" Suit in IL Court READERS' DIGEST: Shareholder Suits V. Directors, Funds Dismissed REALNETWORKS INC.: Suit For Consumer Act Violations Filed in WA RIVIERA HOLDINGS: Shareholder Files Suit over Failed Buyout SECURITIES LITIGATION: Lawyers' Group To Lodge 30,000 Complaints SUPERIOR FINANCIAL: Agrees To Settle AR Consumer Fraud Lawsuit TRI-STATE CREMATORY: GA Court Keeps Intact Desecration Lawsuits ZAPATA CORPORATION: Asks NV Court To Dismiss Shareholder Lawsuit New Securities Fraud Cases ACCREDO HEALTH: Lockridge Grindal Files Suit in W.D. Tennessee AVERY DENNISON: Cauley Geller Files Securities Suit in C.D. CA HEALTHSOUTH CORPORATION: Kaplan Fox Launches Lawsuit in N.D. AL NORTHWESTERN CORP: Scott + Scott Files Lawsuit in South Dakota SUPERGEN INC: Wolf Haldenstein Lodges Securities Suit in N.D. CA ********* ACCREDO HEALTH: Investors Launch Securities Lawsuits in W.D. TN --------------------------------------------------------------- Accredo Health faces several substantially similar putative class actions filed in the United States District Court for the Western District of Tennessee, Memphis Division. The lawsuits name the Company, David D. Stevens, Joel Kimbrough and in one case John R. Grow, as defendants. The lawsuits allege violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule10b-5 promulgated thereunder, and Section 20 of the Securities Exchange Act of 1934. The putative class representatives seek to represent a class of individuals and entities that purchased Company stock during the period June 16, 2002 through April 7, 2003 and who supposedly suffered damages from the alleged violations of the securities laws. At this time, the Company is aware of four such lawsuits, but only two of the complaints have been served. It is possible that additional lawsuits may be filed. The Company will seek to consolidate these lawsuits and any additional putative class action lawsuits that are filed. Although the Company believes the claims in these lawsuits are without merit, the ultimate outcome of these lawsuits cannot be predicted with certainty. The Company is not in a position at this time to quantify the amount or range of expenses or possible losses related to these claims. ACCREDO HEALTH: Investors Lodge Derivative Lawsuit in TN Court -------------------------------------------------------------- Accredo Health faces a shareholder derivative lawsuit in the Circuit Court of Shelby County, Tennessee for the Thirtieth Judicial District at Memphis. The suit also names as defendants: (1) David D. Stevens, (2) John R. Grow, (3) Kyle J. Callahan, (4) Kevin L. Roberg, (5) Kenneth R. Masterson, (6) Kenneth J. Melkus, (7) Dick R. Gourley, (8) Nancy Ann Deparle, (9) Joel R. Kimbrough, (10) Thomas W. Bell, Jr., and (11) Patrick J. Welsh The derivative lawsuit alleges that the defendants breached fiduciary duties owed to the Company by engaging in stock manipulation and issuing fraudulent and misleading financial statements. On behalf of the Company, the derivative complaint seeks compensatory damages from the defendants and the disgorgement of profits, benefits and other compensation received by the defendants. Although the Company believes the claims in these lawsuits are without merit, the ultimate outcome of these lawsuits cannot be predicted with certainty. The Company is not in a position at this time to quantify the amount or range of expenses or possible losses related to these claims. ALASKA: Fisheries Official Says Firm Never Tried To Lower Prices ---------------------------------------------------------------- Alaska Commercial Fisheries Entry Commissioner Marlene A. Johnson testified in favor of Sealaska Corporation in the Bristol Bay antitrust suit, saying that as long as the Company owned the processor, Ocean Beauty Seafoods, it never tried to artificially lower prices paid for Bristol Bay sockeye salmon, the Anchorage Daily News reports. "There was no motive to lower prices" to Bristol Bay permit holders, Ms. Johnson said. She is also a retired board chairman of Sealaska Corporation, in Juneau. Employees of Ocean Beauty, which the regional Alaska Native corporation purchased in 1979, 'were dedicated to the company, dedicated to Sealaska, and I think they were above playing around,' she said. The Company sold Ocean Beauty in 1990 to an Indonesian company. Ms. Johnson testified in the class action being heard by Alaska Superior Court, alleging that Japanese importers and Seattle- based processors conspired to lower prices paid to fishermen from 1989 to 1995. The suit was filed on behalf of 4,500 Bristol Bay sockeye salmon permit holders. The defendants in the suit have countered that world economic conditions and a glut on the salmon market were the real reasons behind the drop in prices. Ms. Johnson said Ocean Beauty board members set policy, leaving daily management to employees. Asked if she was aware that Ocean Beauty managers made price verification calls to other processors, Ms. Johnson said "if they didn't they should have. I called companies to find out what prices were." Ms. Johnson said Sealaska had a policy that fishermen, a number of whom were Sealaska shareholders, "should be treated fairly, paid fairly," the Associated Press reports. BELLSOUTH CORPORATION: Faces Racial Discrimination Lawsuit in AL ---------------------------------------------------------------- BellSouth Corporation faces a class action filed by five African-American employees in the United States District Court for the Northern District of Alabama. The complaint alleges that the Company discriminated against current and former African-American employees with respect to compensation and promotions in violation of Title VII of the Civil Rights Act of 1964 and 42 USC. Section 1981. Plaintiffs purport to bring the claims on behalf of two classes: (1) a class of all African-American hourly workers employed by the Company at any time since April 29, 1988, and (2) a class of all African-American salaried workers employed by BellSouth at any time since April 29, 1988 in management positions at or below Job Grade 59/Level C The plaintiffs are seeking unspecified amounts of back pay, benefits, punitive damages and attorneys' fees and costs, as well as injunctive relief. At this early stage of the litigation, the likely outcome of the case cannot be predicted, nor can a reasonable estimate of the amount of loss, if any, be made. BELLSOUTH CORPORATION: Investors Commence Stock Suits in N.D. GA ---------------------------------------------------------------- Bellsouth Corporation and three of its senior officers face substantially identical class actions alleging violations of the federal securities laws, in the United States District Court for the Northern District of Georgia. The plaintiffs allege that during the period January 22, 2001 through July 19, 2002, the Company: (1) overstated the unbilled receivables balance of its advertising and publishing subsidiary; (2) failed to disclose that a Florida competitive local exchange carrier (CLEC) had stopped paying money owed to the Company; and (3) understated its exposure to bad debt losses. The plaintiffs are seeking an unspecified amount of damages, as well as attorneys' fees and costs. At this early stage of the litigation, the likely outcome of the case cannot be predicted, nor can a reasonable estimate of loss, if any, be made. BELLSOUTH CORPORATION: Faces GA Lawsuits For ERISA Violations ------------------------------------------------------------- Bellsouth Corporation, its directors, three of its senior officers and other individuals face three substantially identical class actions filed in the United States District Court for the Northern District of Georgia, alleging violations of the Employee Retirement Income Security Act (ERISA). The plaintiffs, who seek to represent a putative class of participants and beneficiaries of BellSouth's 401(k) plan, allege that the company and the individual defendants breached their fiduciary duties in violation of ERISA, among other things, by: (1) failing to provide accurate information to the Plan participants and beneficiaries; (2) failing to ensure that the Plan's assets were invested properly; (3) failing to monitor the Plan's fiduciaries; and (4) failing to disregard Plan directives that the defendants knew or should have known were imprudent. The plaintiffs are seeking an unspecified amount of damages, injunctive relief, attorneys' fees and costs. Certain factual allegations underlying these lawsuits are substantially similar to those in the federal securities class actions in the same court. At this early stage of the litigation, the likely outcome of the cases cannot be predicted, nor can a reasonable estimate of loss, if any, be made. BELLSOUTH CORPORATION: Faces Antitrust Lawsuits in GA, FL --------------------------------------------------------- BellSouth Corporation faces a number of antitrust class actions filed in federal district courts in Atlanta, Georgia and Ft. Lauderdale, Florida. The plaintiffs purport to represent putative classes consisting of all BellSouth local telephone service subscribers and/or all subscribers of competitive local exchange carriers in nine southeastern states since 1996. The plaintiffs allege that the Company engaged in unlawful anticompetitive conduct in violation of state and federal antitrust laws by, among other things: (1) denying competitors access to certain essential facilities necessary for competitors to provide local telephone service; (2) using its monopoly power in the wholesale market for local telephone service as leverage to maintain a monopoly in the retail market; and (3) failing to provide the same quality of service, access and billing to competitors that it provides its own retail customers. The plaintiffs are seeking an unspecified amount of treble damages, injunctive relief, as well as attorneys' fees and costs. At this early stage of the litigation, the likely outcome of the case cannot be predicted, nor can a reasonable estimate of loss, if any, be made. BELLSOUTH CORPORATION: Faces Consumer Antitrust Suit in S.D. NY --------------------------------------------------------------- BellSouth Corporation faces a consumer class action alleging antitrust violations of Section 1 filed in the United States District Court for the Southern District of New York. The suit also names as defendants other telecommunications companies Verizon, SBC and Qwest. The complaint alleges that defendants conspired to restrain competition by "agreeing not to compete with one another and otherwise allocating customers and markets to one another." The plaintiffs are seeking an unspecified amount of treble damages and injunctive relief, as well as attorneys' fees and expenses. At this early stage of the litigation, the likely outcome of the case cannot be predicted, nor can a reasonable estimate of loss, if any, be made. CALIFORNIA: CALA Says Healthcare Crisis Caused By Litigation ------------------------------------------------------------ Citizens Against Lawsuit Abuse groups throughout California united, along with state legislators, to launch a new statewide campaign highlighting how frivolous litigation and unfounded class action lawsuits have impacted the way healthcare is delivered in America. The campaign, "Lawsuit Abuse Makes Us Sick," was launched at a rally on the West steps of the state Capitol. Its purpose is to educate consumers on how healthcare litigation is raising their costs for prescription drugs, health coverage and doctor visits, while also jeopardizing access to medical products and treatments. The flagship of the campaign is a new Web site, http://www.sickoflawsuits.org. "We're here today to tell the story of people like Titus Simonini," said Maryann Maloney, executive director of Orange County Citizens Against Lawsuit Abuse. "Titus has hydrocephalus, and needs a silicon brain shunt to survive. But because of junk science lawsuits against silicon manufacturers, fewer companies are willing to manufacture the shunts that keep him alive. Now, Titus and his mother are very concerned about the future, and their hope must rest in new technologies." Titus' problem is not unique, Maloney adds. According to a study by New York-based Arnoff Associates, each year over 7.5 million lives in America are either saved by or improved through implantable medical devices or products. Yet, due to the threat of liability, 75% of suppliers of biomaterials used to make medical implants banned sales to U.S. manufacturers. Although the Biomaterials Assurance Assistance Act of 2000 aimed to remedy this by providing important legal protections to suppliers in liability lawsuits, numerous medical device producers choose to remain overseas. "Litigation is also a major threat to our access to care," Maloney says. "It's an accepted fact that litigation raises costs. When litigation forces healthcare costs to rise, the natural result is an increase in the cost of overage. Unfortunately as the cost of coverage rises, so do the number of uninsured." According to a study published in the Journal of Health Economics, every ten percent increase in the cost of insurance creates a three to four percent decrease in the number of people who choose to purchase coverage. "You don't have to be an economist to know that when people can't afford coverage, they can't afford care. When they can't get care, they just get sicker," Maloney said. "Already more than 40 million Americans have no health coverage, and that will only get worse if healthcare litigation is not brought under control. Maloney says that form of control could come from legislative reforms that would remove the "jackpot mentality" from the civil justice system and ensure greater predictability, fairness and balance. According to a recent study by the U.S. Department of Health and Human Services, simply limiting "unreasonable" jury awards could cut health care costs by five to nine percent, saving $70-126 billion each year and allowing an additional 2.4 - 4.3 million Americans to obtain medical insurance. "America is facing a health care crisis," Maloney said. "Lawsuit abuse threatens our healthcare system and jeopardizes our ability to access what should be the finest health care in the world. Our legal system is in desperate need of fundamental reform." CALA is a nonprofit, grassroots organization dedicated to educating consumers on the human and financial costs incurred when the legal system is abused for greed, harassment or publicity. More than 30,000 California consumers are CALA supporters. CATHOLIC CHURCH: Archdiocese Fails To Protect People From Priest ---------------------------------------------------------------- Ten people, including a judge, recently have joined a lawsuit that charges the Roman Catholic Archdiocese with failing to protect them, in their youth, from a priest who molested them as students during the 1950s and 1960s, the Associated Press Newswires reports. The lawsuit charges that the Archdiocese failed to discipline the priest, the Rev. Albert Deery, who died in 1972, and failed as well to warn students, their parents and others about the alleged molestations. The lawsuit was filed originally in Clark County Circuit Court, Indiana, by a woman identified in court documents only by the pseudonym Jane Doe. The now 11 plaintiffs contend that Rev. Deery molested them while they attended St. Augustine Catholic Elementary School in Jeffersonville, in the 1950s and 1960s. They have asked the court to certify their lawsuit as a class action, saying they want the lawsuit to represent a class who attended the school and parish between 1942 and 1972, "and who were subjected to tortuous and criminal actions by Father Albert Deery. One of the new plaintiffs in the lawsuit is Clark County Superior Court Judge Steven Fleece. Judge Fleece told The Courier-Journal of Louisville, Kentucky, that, initially, he did not intend to join the lawsuit. "There was a bit of prayer involved," Judge Fleece said, in his decision to come forward. The judge said he finally decided that "maybe me joining would keep other people from feeling intimidated about coming forward." In response to written questions by archdiocese lawyers, Judge Fleece described in court documents an incident in which Rev. Deery fondled his genitals in 1959, when he was a nine-year-old altar boy. The answers Judge Fleece and the other 10 plaintiffs provided to defense attorneys in February give the first details of the alleged abuse. Lawyers for both sides are due in court for a hearing on motion by the Archdiocese to force the plaintiffs to provide more information. CERNER CORPORATION: Investors Lodge Securities Fraud Suits in MO ---------------------------------------------------------------- Cerner Corporation faces several securities class action filed in the United States District Court for the Western District of Missouri. The suits also name as defendants certain of the Company's officers and directors. These lawsuits were filed following a decline in Company's stock price following the Company's announcement on April 3, 2003 that the Company would not meet revenue and earnings estimates for the first quarter of 2003. The Company has not yet been served in connection with any of the lawsuits. In general, the lawsuits allege that, during various class periods commencing as early as July 17, 2002 and ending April 2, 2003, the Company and individual named defendants misrepresented or failed to disclose certain factors, which they allege impacted the Company's business and anticipated revenue and earnings, all allegedly in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Given that the lawsuits have only recently been filed, the Company cannot currently predict the outcome of such litigation or the amount of any potential loss if our defense is unsuccessful; however, it believes that all the claims in the lawsuits are without merit and intends to vigorously defend against such claims. CHIRON CORPORATION: Average Wholesale Pricing Suits Consolidated ---------------------------------------------------------------- Several consumer suits filed against Chiron Corporation and 29 other biotechnology and pharmaceutical companies, in connection with setting average wholesale prices for various products including Depocyt, which are reimbursed by Medicare. The first suit was filed in December 2001 by the Citizens for Consumer Justice and 13 other named plaintiffs in the United States District Court for the District of Massachusetts. Plaintiffs alleged that defendants violated federal antitrust and racketeering laws by devising and implementing a fraudulent pricing scheme against Medicare and Medicaid beneficiaries, and sought declaratory relief, as well as compensatory and punitive damages. In March 2002, plaintiffs filed an amended complaint that eliminated the antitrust allegations and changed the subject drug from DepoCyt to Mitomycin, a generic oncology drug sold by the Cetus-Ben Venue Therapeutics partnership. In September 2002, plaintiffs filed a master consolidated class action, which did not name Chiron as a defendant. In February 2002, the State of Montana, through its Attorney General, filed a complaint in the First Judicial District Court in Lewis and Clark County against 18 biotechnology and pharmaceutical companies, including Chiron, in connection with setting average wholesale prices for various products, including DepoCyt, that are reimbursed by Medicare and Medicaid. The Attorney General alleges that the defendants violated Montana state and common laws on unfair trade practices and consumer protection, deceptive trade practices, Medicaid fraud, breach of contract and false claims, and seeks both compensatory and punitive damages. In March 2002, the State of Nevada, through its Attorney General, filed a complaint in the Second Judicial District Court in Washoe County against 10 biotechnology and pharmaceutical companies, including Chiron, concerning setting average wholesale prices for various products, including DepoCyt, that are reimbursed by Medicare and Medicaid. The Attorney General alleges that defendants violated Nevada state and common laws on unfair and deceptive trade practices and consumer protection, Medicaid fraud, racketeering, and seeks both compensatory and punitive damages. Between July and September 2002, three separate class action lawsuits were filed in two California Superior Courts against Chiron, Cetus Oncology, and numerous other biotechnology and pharmaceutical companies. Plaintiff's claims are based upon alleged violations of the California Business and Professions Codes. These matters seek compensatory and punitive damages, plus injunctive relief, against Chiron in connection with setting the average wholesale prices for various oncology drugs, including DepoCyt. In October 2002 and February 2003, the Montana, Nevada and certain California actions were coordinated and consolidated to the In re Pharmaceutical Industry Average Wholesale Price Litigation pre-trial proceedings. CONNECTICUT: Officers Resign For Inappropriate Sexual Behavior -------------------------------------------------------------- The assistant police chief and three other officers of the Orange Police Department in Connecticut resigned due to an internal allegations that the said officers engaged in inappropriate sexual behavior on the job, the Connecticut Post reports. Two other officers are being investigated. The officers have been re-assigned to positions that involve no contact with the public as the investigation continues, Police Chief Joseph Dooley told the Post. He continued that the case specifically involves officers breaking department rules while on duty. No specifics were given, but the incidents are alleged to have taken place on town property. "The investigation is continuing. The amount of information that we will provide is limited," the chief said at a press conference Monday. He added that more details will be released as the probe concludes. The resigning officers were: (1) Assistant Chief Robert Kenny, 40, of North Haven, who had 17 years on the Orange police force, (2) Officer Andrew D'Agostino, 42, of Madison, an 18-year veteran, (3) Officer John Regan, 39, of Wallingford, who served 10 years, and (4) part-time Officer Andrew Gambardella, 36, of New Haven, who has 11 years of service None of the accused officers were immediately available for comment Monday. Officials said that the incidents did not involve a victim and that no laws were broken. Residents and officials called the probe the most "shocking" event in the history of the town's Police Department, which has 40 officers, the Post reports. A small town that takes pride in its volunteer spirit and quality of life, Orange is not the type of place where a sex scandal particularly among police is expected, they said. Officials spoke favorably about the rest of the department, emphasizing that the officers targeted in the investigation were exceptions. "The overwhelming majority of the men and women of the Police Department are above reproach," Chief Dooley said. CHICAGO PIZZA: Employees Lodge Overtime Wage Lawsuit In CA Court ---------------------------------------------------------------- Chicago Pizza & Brewery, Inc. faces a class action filed on behalf of its former and current employees similarly situated and working in California, in the Superior Court of California for the County of Orange. The complaint alleges that the Company violated provisions of the California Labor Code covering meal and rest breaks for employees, along with associated acts of unfair competition, and seeks payment of wages for all meal and rest breaks allegedly denied to the Company's California employees for the period from October 1, 2000 to the present. Management intends to vigorously defend against all allegations in the complaint. Due to the recent filing of this action, this matter is in the early discovery phase and management is not currently able to estimate the range of possible liability, if any. CRYOLIFE INC.: Asks GA Court To Dismiss Securities Fraud Lawsuit ---------------------------------------------------------------- Cryolife, Inc. asked the United States District Court in Georgia to dismiss the consolidated securities class action pending against it and certain of its officers of the Company, alleging that the 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 purportedly materially false and misleading statements to the market. The suit seeks class status on behalf of all purchasers of the Company's stock between April 2, 2001 and August 14, 2002. The principal allegations of the consolidated complaint are that the Company failed to disclose its alleged lack of compliance with certain FDA regulations regarding the handling and processing of certain tissues and other product safety matters. The motion to dismiss is pending before the court. The Company carries directors' and officers' liability insurance policies, which the Company believes to be adequate to defend against this action. Nonetheless, an adverse judgment in excess of the Company's insurance coverage could have a material adverse effect on the Company's financial position, results of operations, and cash flows. CRYOLIFE INC.: Faces Shareholder Derivative Suits in GA Courts -------------------------------------------------------------- Cryolife, Inc. faces two purported shareholder derivative suits in Georgia State Courts. The first suit was filed in the Superior Court of Gwinnett County, Georgia. The suit names as defendants: (1) Steven G. Anderson, (2) Albert E. Heacox, (3) John W. Cook, (4) Ronald C. Elkins, (5) Virginia C. Lacy, (6) Ronald D. McCall, (7) Alexander C. Schwartz, and (8) Bruce J. Van Dyne The suit, which also names the Company as nominal defendant, alleges that the individual defendants breached their fiduciary duties to the Company by causing or allowing the Company to engage in certain inappropriate practices that caused the Company to suffer damages. The complaint was preceded by one day by a letter written on behalf of the lead plaintiff demanding that the Company's Board of Directors take certain actions in response to her allegations. On January 16, 2003 another purported derivative suit alleging claims similar to those of the first suit was filed in the Superior Court of Fulton County by complainant Robert F. Frailey. As in the first suit, the filing of the complaint in the Frailey action was preceded by a purported demand letter sent on Mr. Frailey's behalf to the Company's Board of Directors. The Company's Board of Directors has established an independent committee to investigate the allegations of the suit. The independent committee has engaged independent legal counsel to assist in the investigation and that investigation is currently proceeding. EL PASO: Asks FERC For More Time To File Energy Suit Settlement --------------------------------------------------------------- El Paso Corporation asked the Federal Energy Regulatory Commission (FERC) for more time to file the tentative $1.7 billion settlement agreement it entered with several California agencies and utilities, over allegations of manipulation of the state's natural gas supplies during the state's power crisis in 2000 and 2001, Reuters reports. The Company reached the settlement before the FERC was set to issue a ruling in the suit. The commission then deferred the ruling for 45 days. FERC would have to approve any deal which the parties submit. According to Reuters, attorneys for both sides asked FERC on Friday for an additional 30 days, or until June 4, to file a settlement because of "the substantial number of cases being settled, the large number of parties involved . as well as the scope, magnitude and nature of the issues and claims being settled." For El Paso, a consummated deal would eliminate the risk that FERC would rule it had illegally withheld gas supplies. Last year, the FERC found that the Company "withheld extremely large amounts of capacity" from California during its power shortage, when it reeled from blackouts and soaring natural gas and electricity prices, the Sacramento Business Journal reports. The settlement includes payments of $100 million in cash, $125 million in El Paso common stock, and additional payments of $22 million annually over 20 years. The company will also give California $45 million worth of natural gas per year for 20 years, starting in 2004. The deal, which is not signed and is only an agreement in principle, has no admission of wrongdoing by El Paso, the Business Journal details. FLORIDA: Picher Board To Decide on Joining Environmental Lawsuit ---------------------------------------------------------------- The Picher school board will decide whether to join a class action filed against mining companies and the federal government over contamination in the Tar Creek Superfund site, the Miami News-Record reports. The suit was filed on behalf of the residents of the 40-square- mile Tar Creek Superfund site. The site was placed on the priority list for cleanup more than 20 years ago after the mines played out and were abandoned in the late 1960s and early 1970s. The suit names as defendants seven mining companies that once operated in the now abandoned mining district that surrounds the two northeastern Ottawa County cities. In a meeting last night, Charlie Speer of the Kansas City law firm Payne and Jones detailed a proposal that would have the school district, the cities of Picher and Cardin and the Picher Housing Authority joining the suit. If the board votes to join the suit, it would be the opening salvo in what should be a large number of lawsuits being filed over the Superfund site in the coming months. Picher has a population of about 1,600 and Cardin about 150. The federal government, once involved in the leasing of American Indian tribal and tribal member land to the mining companies, could also be included in the suit, Mr. Speer said, the Miami News-Record states. NEXTEL: Customer Commences Class Action in PA Over Add-On Fees -------------------------------------------------------------- A Nextel cellular phone customer has commenced a class action in the Pennsylvania Court of Common Pleas arising out of Nextel's practice of adding to customer bills a "Federal Programs Cost Recovery" fee of $1.55 per month as well as other charges. The other charges attacked in the Complaint are identified as a "Federal TRS Charge" and "Federal Universal Service Assessments." The Class of Nextel customers is defined as "all persons who sustained damages as a result of becoming subscribers to Nextel Service Plans who were wrongfully charged [the above listed] assessments." The Nextel customer, Seth Lamb, a Pennsylvania resident, claims that these charges "were not referred to by Nextel at the time of purchase of [Nextel] Service Plans and are imposed unilaterally by Nextel at its discretion." The Complaint goes on to claim that these charges "breach the terms of the service agreements" and the advertised prices for Nextel Service Plans. Richard D. Greenfield, a Royal Oak, Maryland lawyer specializing in the litigation of consumer class actions stated that: "Nextel practices are part of a new trend in the wireless telecommunications industry. Vendors are adding these surprise ``jack-in-the-box' charges to customer bills which add substantial amounts over the life of the contracts." Anthony J. Bolognese, Co-Counsel for the plaintiff, said, "This is an outrage. These companies advertise fixed prices for bundles of minutes then add charges that appear to be taxes to unsuspecting customers." Copies of the Complaint can be obtained by email request at whitehatrdg@earthlink.net. For more information, contact Richard D. Greenfield at (410) 745-4149 or Anthony J. Bolognese at (215) 814-6750 NOKIA INC.: Consumers File Amended Lawsuit Over Defective Phones ---------------------------------------------------------------- Nokia Inc. faces an amended consumer class action filed in California Superior Court charging it with "deceptive and misleading" advertising and knowingly selling mobile phones with defective displays, silicon.com reports. The suit, filed on behalf of California resident Henry La and others similarly situated, alleged that some of the Company's most popular mobile phones including the 32xx, 51xx, 61xx, 82xx and 88xx series carried a common design defect. Mr. La further alleged that the alleged defect caused the phones' displays to fade or disappear with "substantial regularity" and that Nokia has been aware of the defect's existence since at least 1998. The suit was originally filed in May 2002, alleging that the Company violated Californian competition and consumer laws, breached its warranty and asked the court to compensate consumers under the Song-Beverley Consumer Warranty Act. The Company allegedly deceived consumers by stating in their advertising that the phones in question were capable of carrying out their functions. The Company also allegedly violated the phones' express warranty terms as they allege the phones were not sold free of defects, silicon.com reports. Earlier, the court partially dismissed the original suit, dismissing the breach of warranty claim, but upholding plaintiffs' request to have the court test whether the terms of warranty were unconscionable. The court granted plaintiffs leave to amend the suit. The amended suit was filed May last year. Mr. La's counsel claims the problem associated with the alleged design defects were so pervasive that Nokia conducted focus groups and a study to compare the cost of fixing it at the factory and dealing with resulting display failures on an after-sales basis, silicon.com reports. "Unfortunately for mobile consumers, Nokia chose to deny the existence of and otherwise conceal the defect from consumers," wrote the counsel for La in their list of allegations. If the class action is successful the court may order Nokia to hand over millions of dollars worth of profits to compensate consumers and stop selling some of its mobile phone range. Craig Hilliwig of legal firm Kohn Swift Graf said counsel representing La has requested Nokia's files on Australia's Fair Trading investigation. However, according to Hilliwig, Nokia is resisting the request to disclose the documents. Nokia claims the defective component affecting 8210s sold in Australia was not installed in the 8290s sold in the US, silicon.com reports. PEC SOLUTIONS: Shareholders Commence Securities Suits in E.D. VA ---------------------------------------------------------------- PEC Solutions, Inc. faces several securities class actions, along with certain of its officers in the United States District Court for the Eastern District of Virginia on behalf of all persons who purchased or acquired PEC Solutions, Inc. (NASDAQ: PECS) securities. Throughout the class period, as alleged in the complaint, defendants issued a series of materially false and misleading statements concerning the Company's business, operations and prospects. The Complaint alleges that these statements were materially false and misleading when made as they failed to disclose and misrepresented the following adverse facts, among others: (1) the Company was experiencing declining demand for its products and services as the failure of Congress to approve a budget for 2003 was causing governmental agencies to delay projects; (2) the Company was experiencing material problems with certain of its biometric identification contracts and would not be generating the revenue that it had anticipated from those contracts; and (3) as a result of the foregoing, the Company was materially overstating the strength of its pipeline of projects and its prospects. The Company believes that the plaintiffs' claims are without merit. PENNSYLVANIA: ACLU Commences Rights Lawsuit Over Homeless Sweeps ---------------------------------------------------------------- The American Civil Liberties Union filed a lawsuit against the city of Pittsburgh, Pennsylvania over its practice of seizing and destroying the property of Pittsburgh's homeless during sweeps of public encampments, the Pittsburgh Tribune-Review reports. The ACLU Greater Pittsburgh chapter filed the suit in Pittsburgh District Court on behalf of four homeless men and others similarly situated, after it learned that the city planned another clearing out of homeless property under bridges, in parks and other public areas. Witold Walczak, legal director for the Pittsburgh office of the ACLU, argued that no notification is given to the homeless before employees of the Department of Public Works clear out the areas, confiscating and destroying personal items, the Tribune- Review states. The suit asserts that the policy violates due process rights and protections from unreasonable searches guaranteed under the Fourth, Fifth and 14th amendments. "The city has a right to clean its property," Mr. Walczak said. "But they can't do so in a way that runs roughshod over homeless people's constitutional rights." Mr. Walczak further asserted that cities such as Atlanta, Miami, Chicago and Los Angeles conducted similar sweeps but provided advance notice to the homeless, and provide information where seized items can be collected. "Pittsburgh needs to learn from other cities how to conduct sweeps constitutionally," Mr. Walczak told the Tribune-Review. The suit further alleged that the homeless, who were absent during the sweeps, lost clothing, blankets, medication, and personal effects. "These relatively few, and meager, possessions have particular value to the plaintiffs simply because it is all they have," the lawsuit said. The suit seeks that the city's policy be declared unconstitutional, that a preliminary injunction be issued and later be made permanent, and that the plaintiffs receive reasonable damages. Chief US District Judge Donetta Ambrose will hear testimony Thursday related to the lawsuit. Craig Kwiecinski, spokesman for Mayor Tom Murphy, told the Tribune-Review, "We cannot comment on pending litigation." PHILIP MORRIS: Faces Another "Light Cigarettes" Suit in IL Court ---------------------------------------------------------------- Philip Morris USA faces another lawsuit filed in Madison County Court in Illinois, alleging it misled smokers into believing that "light" cigarettes are safer than full-flavored brands, the Associated Press reports. The suit seeks class action status and covers more than 20 of the Company's brands, including Marlboro Medium, Benson & Hedges Lights, Virginia Slims Lights and Parliament Lights. Earlier, Philip Morris had figured in another similar suit in the same court. On March 21, the court ruled that the Company should pay $10.1 billion in damages for consumer fraud. The verdict sparked fears that the Company would have to resort to bankruptcy and default on its payments for a 1998 settlement with several states. Later, Judge Nicholas Byron ordered Philip Morris to pay only half of the appeal bond amidst these concerns, and amidst a petition filed by 33 states signed a friend-of-the-court brief asking Judge Byron to reduce the bond, as the non-payment would affect their respective state budgets. Several states had threatened to sue the company if it missed this week's payment, an earlier Class Action Reporter story states. John Mulderig, an attorney for Altria Group Inc., parent company of Philip Morris, called the new lawsuit "a carbon copy" of the first one, the Associated Press reports. He said the only difference between the two lawsuits is the cigarette brands named. "This is why the plaintiff class-action bar in Madison County finds that word processing is their favorite activity," he said. READERS' DIGEST: Shareholder Suits V. Directors, Funds Dismissed ---------------------------------------------------------------- Readers' Digest Association, Inc. settled the class actions filed against it, its directors, the DeWitt Wallace-Reader's Digest Fund, Inc. and the Lila Wallace-Reader's Digest Fund, Inc., challenging the original recapitalization transaction announced in April 2002. Three of the four actions are purported class actions; the fourth action was brought by individual stockholders. The parties in two of the three class actions, which were brought on behalf of holders of Class B Stock, have entered into a memorandum of understanding setting forth agreements in principle with respect to the settlement of those actions. The third class action, which was brought on behalf of holders of Class A Stock, was dismissed with prejudice by the Court of Chancery of the State of Delaware pursuant to a comprehensive settlement agreement that was approved by the Court of Chancery on February 12, 2003. The fourth action was voluntarily dismissed. REALNETWORKS INC.: Suit For Consumer Act Violations Filed in WA --------------------------------------------------------------- Realnetworks, Inc. faces a class action filed in Washington state court, alleging causes of action based on the Washington Consumer Protection Act and unjust enrichment with regard to the Company's marketing of free products and services. The plaintiff alleges that the Company's practices with regard to the marketing of free products and services is false and deceptive, and seeks compensatory damages for the class as well as equitable relief, treble damages and other relief. Although no assurance can be given as to the outcome of this lawsuit, the Company believes that the allegations in this action are without merit and intends to vigorously defend itself against these claims. The Company believes the ultimate outcome will not have a material adverse effect on its financial position or results of operations. If the plaintiffs prevail in their claims, the Company could be required to pay damages or other penalties in addition to complying with injunctive relief, which could harm the Company's business and its operating results. RIVIERA HOLDINGS: Shareholder Files Suit over Failed Buyout ----------------------------------------------------------- On April 15, 2003, shareholder Brian Placzek filed a class action complaint in the District Court of Clark County, Nevada (No.A466204) against Riviera Holdings Corporation and four of its directors namely William L. Westerman, Robert R. Barengo, Jeffrey A. Silver and Paul A. Harvey. This action in Nevada state court which was served on the Company on April 28, 2003, seeks an order which would require the individual Defendants to, among other things, cooperate with any individual who makes a bona fide offer to acquire the Company, take steps that are calculated to result in a buy-out or takeover of the Company at the highest price, comply with their fiduciary duties, and reimburse the Plaintiff's class for damages, costs and disbursements related to the lawsuit. The Plaintiff seeks to have all public shareholders of the Company's common stock, excluding Defendants, certified as a class for purposes of a class action suit and seeks to be the representative of the class. The Plaintiff asserts, among other things, that the Defendants violated their fiduciary duties because they did not take affirmative steps in furtherance of an offer by a third party to purchase all of the Company's outstanding common stock at a premium price which was contingent upon, among other things, a waiver of the call provisions by the holders of the Company's bond indebtedness. The Company believes the Plaintiff's claims are without merit and intends to vigorously defend against them. The Company is a party to several routine lawsuits, either as plaintiff or as defendant, arising from the normal operations of a hotel/casino. The Company does not believe that the outcome of such litigation, in the aggregate, will have a material adverse effect on its financial position or results of its operations. SECURITIES LITIGATION: Lawyers' Group To Lodge 30,000 Complaints ---------------------------------------------------------------- A group of lawyers expect to file as many as 30,000 investor complaints against investment firms and various companies within the next 12 months, after several Wall Street firms agreed to settle for $1.4 billion claims of biased research and stock manipulation, Reuters reports. Attorney Robert Weiss of New York law firm Weiss & Hopper Weiss, of law firm Hooper & Weiss, in Jericho, N.Y., told Reuters he is part of a loose network of 50-to-75 member firms, most of which have little or no experience in securities arbitration. However, many of these firms are recognized for dealing with other class action claims involving makers of fen-phen, asbestos and cigarettes, for example. "There are more arbitration claims right now being processed in my office and the office of my associates than were filed all year last year," Mr. Weiss, who made headlines in January when he filed 100 arbitration claims against Salomon Smith Barney in one day, told Reuters. The lawyers group came together after the settlement agreement between the government and investment firms was announced. Under the agreement, the firms will pay $1.4 billion to settle allegations that stock analysts deceived investors with research that was skewed to win investment banking business. New York State Attorney General Eliot Spitzer spearheaded the probe. The National Association of Securities Dealers (NASD) said that if these claims were filed, it would amount to more than triple record 7,704 claims received in 2002. The NASD said it expects claims to jump by more than 3,000 this year. Mr. Weiss told Reuters claims he is processing so far range from $2,000 to $22 million. Mike Papantonio, of Levin Papantonio Thomas Mitchell Echsner & Proctor in Pensacola, Fla., said the network lawyers would sue in Montana, California, and other state courts, alleging the brokerage houses themselves, not just the brokers, established a structure of alleged fraud. "In the next three months, we'll probably have 50 filed in various state courts, under various theories," he said. He continued that said traditional arbitration attorneys have created a "good old boys club" that is too quick to settle cases for too little money. SUPERIOR FINANCIAL: Agrees To Settle AR Consumer Fraud Lawsuit -------------------------------------------------------------- Superior Financial Corporation agreed to settle the consolidated class action filed in the United States District Court for the Eastern Division of Arkansas alleging two claims under the Arkansas Deceptive Trade Practice Act and claims for common law fraud, constructive fraud and breach of fiduciary duty. The Company filed a motion to dismiss the suit in its entirety. On December 19, 2002, the court entered an order staying the action until March 20, 2003, to provide parties time to discuss a possible settlement of the suit. A mediation was held on January 29, 2003 and another mediation took place in late March. On April 24, 2003, the Company reached an agreement in principle to settle the suit. The settlement agreements are subject to final court approval and call for the Company and its insurance carrier to pay sums well within the Company's policy limits and materially less than the Company's estimate of the costs of litigation. The Company's contribution to the settlement is approximately $475,000 pretax, or $0.04 diluted earnings per share, which amount has been expensed in the first quarter of 2003. TRI-STATE CREMATORY: GA Court Keeps Intact Desecration Lawsuits --------------------------------------------------------------- Hamilton County Court in Georgia refused to separate several class actions filed against five funeral homes and a Georgia crematory where hundreds of neglected corpses were found, the Associated Press reports. The Tri-State Crematory was named in several lawsuits, after more than 330 corpses were recovered on its grounds since February 2002. Operator Brent Marsh, 29, faces multiple charges of abuse of a body and theft by deception for taking money for cremations he never performed. Families whose relatives' remains were found at Tri-State have filed lawsuits seeking damages from the crematory and some funeral homes. Attorneys representing the families told AP Circuit Judge Neil Thomas had no choice in his decision Monday, because an appeal is pending in a federal court in Georgia on the status of another class action against Tri-State and several funeral homes. Judge Thomas also delayed a ruling on whether to consolidate all Tennessee civil suits into one class-action suit. He said he would ask the state Supreme Court to make that decision. Attorney Allen Murphy, who represents some of the families, told AP he favors consolidating the Tennessee lawsuits. "If the (state) Supreme Court will put all of these cases in the courtroom, we will settle these cases," he said. The next hearing on the lawsuits was set for June 2. ZAPATA CORPORATION: Asks NV Court To Dismiss Shareholder Lawsuit ---------------------------------------------------------------- Zapata Corporation asked the District Court of Clark County, Nevada to dismiss a class action filed against it and Omega Protein by Omega Protein shareholder Robert Strougo, on behalf of all Omega Protein stockholders. No class period has been identified. The suit also names as defendants: (1) Avram A. Glazer, Chairman, President and CEO of Zapata and (2) Darcie Glazer, a director of Zapata Plaintiff claims that the individual defendants and Zapata breached their fiduciary duties to Omega Protein's stockholders by not properly considering a so-called offer sent via e-mail to Zapata by Hollingsworth, Rothwell & Roxford, a Florida partnership. News reports have identified a Hollingsworth, Rothwell & Roxford partner, Theodore Roxford, as the former Lawrence Niren. Mr.Roxford is the subject of a March 18, 2003 New York Times article entitled "A Financial Big Shot With an Unusual Past" and a June19, 1995 Forbes article entitled "Stop Me Before I Steal Again." The complaint alleges that the "offer" was to acquire all of Zapata's shares for $45.00 per share. It also alleges that the offer was to acquire all of Omega's shares for $45.00 per share. Plaintiff claims that Zapata and the individual defendants breached their duties to Omega's stockholders by rejecting the purported offer and that Omega Protein's stockholders have been damaged by being prevented from receiving a fair price for their stock. Plaintiff seeks an order directing the defendants to carry out their fiduciary duties to Omega Protein's stockholders, to refrain from breaching them, and awarding plaintiff unspecified compensatory damages and his costs and expenses incurred in the action. The Company is not aware of any e-mail sent by Hollingsworth, Rothwell & Roxford to Omega Protein or any offer for the purchase of Omega Protein shares. The Company believes that the claims are without merit. The Company has moved to dismiss the action. Omega Protein has answered the complaint denying all allegations and has moved for summary judgment. On April 17, 2003, plaintiff's counsel filed papers in opposition to Zapata's motion to dismiss and Omega's motion for summary judgment. Plaintiff's counsel also filed a cross motion to amend the complaint and a proposed amended complaint. The amended complaint seeks to add new plaintiffs, both of whom are alleged to be Zapata and Omega stockholders and add Zapata's other directors as additional defendants. The proposed amended complaint makes additional factual allegations and alleges breach of fiduciary duties owed by the defendants to Omega and Zapata stockholders by not considering the so-called offer referred to in the original complaint and a second so-called offer sent via e-mail by Hollingsworth, Rothwell & Roxford on March 9, 2003. The proposed amended complaint alleges that initial offer was raised to $50.00 per share contingent on Zapata and certain of the named defendants meeting with Hollingsworth, Rothwell, and Roxford. The Company has filed responsive papers in support of its motion to dismiss and in opposition to the proposed amendment. Motion argument is scheduled for May 12, 2003. While the results of any ultimate resolution cannot be predicted, in the opinion of Zapata's management, based upon discussions with counsel, any losses resulting from these matters will not have a material adverse effect on its results of operations, cash flow or financial position. New Securities Fraud Cases ACCREDO HEALTH: Lockridge Grindal Files Suit in W.D. Tennessee -------------------------------------------------------------- The Law Firm of Lockridge Grindal Nauen P.L.L.P. initiated a securities class action in the United States District Court for the Western District of Tennessee, Memphis Division, located at 167 North Main Street, Memphis, TN 38103, on behalf of purchasers of Accredo Health, Inc. (Nasdaq:ACDO) publicly traded securities during the period 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: (a) that the Company was failing to timely record an impairment in the value of certain receivables that it had acquired in a recent acquisition. As a result, the Company's reported financial results were artificially inflated throughout the Class Period; (b) 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 and were therefore materially false and misleading; (c) that the Company would not have been able to meet its stated earnings guidance had it properly reserved for its accounts receivables; and (d) based on (a)-(c), defendants' earnings guidance and positive statements concerning the Company was lacking in a reasonable and therefore materially false and misleading. On April 8, 2002, 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. In response to this announcement, the price of Accredo Health common stock declined precipitously falling from $25.40 per share to as low as $13.76 per share, 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 Karen M. Hanson, Esq. by Mail: 100 Washington Avenue South, Suite 2200, Minneapolis, MN 55401; by Phone: (612) 339-6900; or by E-mail: kmhanson@locklaw.com AVERY DENNISON: Cauley Geller Files Securities Suit in C.D. CA -------------------------------------------------------------- The Law Firm of Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Avery Dennison Corporation (NYSE: AVY) publicly traded securities during the period between July 24, 2001 to April 14, 2003, inclusive. The complaint charges Avery and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the complaint alleges that Avery failed to disclose that its financial results during the Class Period were a product of a tacit and illegal anti-competitive scheme with its leading competitor, UPM-Kymmene, OYJ ("UPM"), whereby the Company and UPM manipulated the labelstock supply market. The complaint further alleges that during the Class Period, defendants issued false and misleading statements to the marketplace that artificially inflated the price of Avery's shares. The statements disseminated by the defendants during the Class Period failed to disclose and indicate (1) that Avery was engaged in an illegal anti-competitive scheme with UPM to drive a more stable price environment within the labelstock industry; (2) that the Company's financial results were a product of its anti-competitive behavior; (3) that the Company knew that its anti-competitive behavior could possibly subject the Company to regulatory scrutiny in the future if such anti- competitive behavior was discovered; and (4) that its financial results would be materially impacted if the Company were forced to stop its anti-competitive behavior. On April 14, 2003, the United States Department of Justice ("DOJ") issued a press release wherein it announced that it intended to file a civil antitrust lawsuit in the United States District Court for the Northern District of Illinois in Chicago to block UPM from acquiring Morgan Adhesives Company ("MACtac"). Among the reasons given for filing the suit, the DOJ stated that its investigation had revealed that the merger between UPM and MACtac was one in which Avery and UPM sought to coordinate. Additionally, on April 14, 2003, Avery announced that the DOJ had started a criminal investigation into competitive prices in the labelstock industry and would shortly issue a subpoena to the Company in connection with that investigation. On April 15, 2003, the DOJ filed its complaint against UPM. Therein, the DOJ alleged that UPM and Avery were in "positions of marketplace dominance and had significant incentives to engage in explicit competitive coordination." The DOJ also alleged that evidence of competitive coordination was enhanced by a "longstanding strategic paper supply relationship" between UPM and Avery. The DOJ further alleged that "the supply relationship provided UPM and Avery with the motivations, opportunities, and means to coordinate on price, monitor adherence, punish cheating, and engage in side payments that could be hidden in label paper transactions." News of Avery's anti-competitive behavior shocked the market. On April 15, 2003, Avery's stock fell $4.19 on unusually high trading volume to close at $55.94. For queries, contact Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq. 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 Web site: http://www.cauleygeller.com HEALTHSOUTH CORPORATION: Kaplan Fox Launches Lawsuit in N.D. AL --------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against HealthSouth Corporation (NYSE: HRC) and certain of its officers and directors, in the United States District Court for the Northern District of Alabama on behalf of all persons or entities, other than defendants, who purchased HealthSouth securities between March 31, 1998 and March 18, 2003, inclusive. The complaint alleges that HealthSouth and certain of its officers and directors violated the federal securities laws by issuing false and misleading financial statements during the Class Period. The Complaint alleges that shortly after HealthSouth's initial public offering in 1986, the Company began to artificially inflate its earnings to match Wall Street analysts' expectations and maintain the market price of HealthSouth's common stock. Between 1999 and the second quarter of 2002, HealthSouth intentionally overstated its earnings by at least $1.4 billion. For more information, contact Frederic S. Fox, Esq., Laurence D. King, Esq., or Hae Sung Nam, Esq. at Kaplan Fox & Kilsheimer LLP by Mail: 555 Montgomery Street, 805 Third Avenue, 22nd Floor San Francisco, CA 94111, New York, NY 10022; by Phone: (415) 772-4700 or (800) 290-1952; by Fax: (415) 772-4707 or (212) 687-1980; by E-mail: mail@kaplanfox.com; or visit the firm's Web site: http://www.kaplanfox.com NORTHWESTERN CORP: Scott + Scott Files Lawsuit in South Dakota -------------------------------------------------------------- Connecticut-based law firm Scott + Scott, LLC initiated a securities class action in the United States District Court for the District of South Dakota on behalf of purchasers of NorthWestern Corporation (NYSE: NOR) publicly traded securities during the period between February 7, 2002 and March 31, 2003. The complaint charges NorthWestern and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Throughout the Class Period, defendants issued a series of materially false and misleading statements concerning the financial and operational condition of the Company. In fact, throughout the Class Period, while many of the Company's competitors were announcing revised guidance, NorthWestern consistently stated that the Company's proprietary business model was allowing NorthWestern to continue to achieve "improved performance" and earnings of between $2.30 to $2.55 per share by the end of 2002. Both prior to and throughout the Class Period, management of the Company consistently represented that its subsidiaries, including Expanets and Blue Dot, were achieving and would continue to achieve these results. In fact, however, investors would ultimately learn at the close of the Class Period, which defendants had managed to conceal throughout the Class Period, that: (i) The Company's non- utility subsidiaries were not performing according to plan, with at least 20% of Blue Dot's locations performing so poorly that they would be sold or closed within the foreseeable future, and with Expanets running its reserves about $66 million short of its rapidly escalating delinquencies; (ii) defendants had artificially inflated the Company's balance sheet as well as its reported earnings and EPS figures, by failing to write down the impairment of, and take necessary reserves for, its failing Blue Dot and Expanets businesses, which impairments and reserve adjustments ultimately resulted in a massive $880 million charge; (iii) through a complicated scheme of questionable accounting and subsidiaries owned partially by senior management, losses at both Blue Dot and Expanets were subverted and reallocated to owners of minority interests or shareholders in the Company's subsidiary, which allowed the Company to keep these losses off its balance sheet, and to artificially inflate earnings and income and mask the poor performance of NorthWestern throughout the Class Period; and (iv) defendants had materially misstated the conditions of both Blue Dot and Expanets, which were not poised for nor experiencing "long-term growth" nor "value creation," but were rather in poor financial and operational condition, with at least 20% of Blue Dot's locations terminal and with an unknown amount of other locations also in poor condition, and with almost $302 million in charges and reserves required to be taken by Expanets, in addition to an approximate $289 million charge required for Blue Dot. As a result of the foregoing, at no time during the Class Period did defendants have a good faith basis to project earnings anywhere near $2.55 per share for fiscal year 2002. For queries, contact Neil Rothstein, Esq. by Mail: Scott + Scott, LLC, 108 Norwich Avenue, Colchester, Connecticut 06415; by Phone: 800/404-7770; by Fax: 860/537-4432; by E-mail: nrothstein@scott-scott.com; or visit the firm's Web Site: http://www.scott-scott.com. SUPERGEN INC: Wolf Haldenstein Lodges Securities Suit in N.D. CA ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of SuperGen Inc. (Nasdaq: SUPG) common stock during the period between April 18, 2000 and March 13, 2003. The complaint charges SuperGen and its chairman, president and chief executive officer with violations of the Securities Exchange Act of 1934. SuperGen is a pharmaceutical company dedicated to the development and commercialization of products intended to treat life-threatening diseases, particularly cancer and blood cell disorders, as well as other serious conditions such as obesity and diabetes. The complaint alleges that during the Class Period, one of the Company's leading drug candidates was Mitozytrex, a proprietary reformulation of the approved anticancer drug Mitomycin C, which is used primarily to treat gastric and pancreatic cancers. SuperGen's reformulation is based on technology designed to improve the handling characteristics and safety profile of mitomycin and other anticancer drugs by enhancing the drug's stability in solution form and "shielding" it at the injection site. SuperGen sold millions of shares and notes for $25 million in proceeds so as to provide it with ample monies to fund its operations. However, this all took place prior to revelations concerning the veracity of the Company's statements regarding Mitozytrex. The Federal Food, Drug and Cosmetic Act gives the FDA authority to disseminate information to the public regarding drugs and other products within the FDA's jurisdiction to address imminent health dangers or gross deception. To protect the public health due to the improper statements by the Company, the FDA notified the public that SuperGen's product, Mitozytrex, has not been found by the agency to have benefits that the Company claimed. The truth, actually known by each defendant: (a) That Mitozytrex caused adverse reactions such as fever, anorexia, nausea and vomiting, together with myelosuppression and hemolytic uremic syndrome; (b) That Mitozytrex was merely a bioequivalent to the innovator mitomycin. It differed from the innovator formulation only in that the Company's product contained hydroxypropyl-beta-cyclodextrin ("HPCD"). No evidence exists to support the Company's claims that Mitoyztrex is superior to the existing formulations of mitomycin; (c) That there is no existing evidence that the addition of HPCD yields any clinical advantage over the original formulation of mitomycin; (d) That SuperGen's "Extra" technology did not shield the drug at the injection site. For more information, contact Fred Taylor Isquith, Esq., Michael Miske, George Peters, or Derek Behnke at Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016; by Phone: (800) 575-0735; by E-mail: classmember@whafh.com (re: SuperGen); or visit the firm's Web site: http://www.whafh.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 2003. All rights reserved. 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