/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030527.mbx C L A S S A C T I O N R E P O R T E R Tuesday, May 27, 2003, Vol. 5, No. 103 Headlines ALASKA: Jury Decides V. Fishermen In Salmon Price-Fixing Lawsuit ATRIUM COMPANIES: Faces CO Homeowners Suit Over Imperial Window AUTOBYTEL INC.: NY Court Refuses To Dismiss Securities Lawsuit AUTOWEB.COM: Named As Defendant in CSFB Securities Fraud Lawsuit AUTOWEB.COM: NY Court Dismisses in Part Securities Fraud Lawsuit BLUE RHINO: Sued Over False Statements On Cost Of Distributors CALIPER TECHNOLOGIES: NY Court Dismisses Securities Fraud Suit CATHOLIC CHURCH: Manchester Diocese Resolves Most Abuse Claims DAOU SYSTEMS: Plaintiffs Appeal CA Securities Suit's Dismissal DELTA FINANCIAL: Court Refuses Summary Judgment For Fraud Suit DELTA FINANCIAL: NY Court Approves Securities Lawsuit Settlement DELTA FINANCIAL: NY Court Grants Approval to Consumer Settlement ELECTRONIC DATA: Securities Fraud Suits To Be Consolidated in TX EMERGING VISION: Plaintiffs Appeal Unfair Trade Suit Dismissal EN POINTE: Asks CA Court To Dismiss Consolidated Securities Suit FORD MOTOR: High Court Orders Reconsideration of Punitive Awards HMO LITIGATION: Member Dentists Sue Health Insurers Under RICO IDAHO: Prominent Attorney Labels Shield Law Unconstitutional IOWA: Shareholders Claim CEO Tricked Directors To Approve Sale KEYNOTE SYSTEMS: Negotiating Settlement For NY Securities Suit LASON INC.: MI Court Approves Securities Fraud Suit Settlement LIBERTY SATELLITE: Faces Suits Over Liberty Stock Purchase Offer LORAL SPACE: Asks NY Court To Dismiss Securities Fraud Lawsuits LORAL SPACE: NY Court Intends To Dismiss Securities Fraud Suit LUMENIS LTD.: TX Court Yet To Rule on Dismissal of Stock Lawsuit NOVATEL WIRELESS: Named as Defendant in CSFB Stock Fraud Lawsuit OHIO: Settles Suits Against Police's Use of Force In Race Riots ON COMMAND: Shareholders Sue Over Liberty Stock Purchase Offer POST APARTMENT: Plaintiffs Ask For Expedited Discovery in Suit POST APARTMENT: Shareholders File Derivative Lawsuit in GA Court SALIX PHARMACEUTICALS: Faces Suit Over Axcan Pharma Offer in DE TEXAS: Judge Dismisses 8 Suits Over Haltom City Jail Sex Abuse TWINLABS CORPORATION: Faces Several Suits Over Ma Huang Products VITALWORKS INC.: Shareholders Lodge Securities Fraud Suits in CT WASHINGTON: Settlement Reached In Apple Commission Litigation New Securities Fraud Cases AVERY DENNISON: Faruqi & Faruqi Files Securities Suit in C.D. CA CERNER CORPORATION: Bernstein Liebhard Files Stock Lawsuit in MO ********* ALASKA: Jury Decides V. Fishermen In Salmon Price-Fixing Lawsuit ---------------------------------------------------------------- A jury recently decided that Seattle processors and Japanese importers did not fix the price of sockeye salmon, returning a verdict against the 4,500 Bristol Bay fishermen who filed a class action after prices for their catch began dropping a decade ago, the Associated Press Newswires reports. The jurors took about six hours to sift through the testimony deciding that the defendant processors and importers had not engaged in a price-fixing conspiracy during the class period. The class action filed on behalf of some 4,500 Alaskan fishermen accused the processors and importers of conspiring more than a decade ago to lower the prices paid in the world's largest sockeye salmon fishery. Processors argued during the trial that it was world market conditions that lowered prices that the fishermen could get for their fish. Defense attorneys tried to show that a long recession in Asian markets had lowered demand, and that competition from farmed supply had boosted supply -- factors that worked together to lower the prices for the Bristol Bay salmon. On the other hand, fishermen's attorney Stephan Susman argued that market forces alone could not explain why the fishermen's share of the profits got smaller and smaller. He said that collusion also played a part "..it was both," said Mr. Susman. Attorneys for the fishermen said their clients were underpaid by hundreds of millions of dollars for nearly a billion pounds of fish. The plaintiffs relied heavily on testimony that processors and importers shared price information and tried to show that the companies then used the information shared to set prices and force smaller processors to match the set prices or go out of business. A handful of defendants settled claims against them before the case went to the jury rather than go through the trial. They paid about $40 million in settlement money. Jury foreman Michael Nourse said the jury members took time to review the fishermen's best evidence. "There wasn't a smoking gun," Mr. Nourse said, "not even a smoldering gun." ATRIUM COMPANIES: Faces CO Homeowners Suit Over Imperial Window --------------------------------------------------------------- Atrium Companies, Inc. and its subsidiary, formerly known as Champagne Industries, Inc. ("Champagne," renamed Atrium Door and Window Company of the Rockies), are defendants in a purported class action pending in the United States District Court in Boulder, Colorado in which 63 homeowners have sued the Company and Champagne, along with three other home builder and home product manufacturer defendants. The claims asserted against Champagne allege manufacturing and design defects associated with its Imperial window, a half-jamb wood window manufactured by Champagne and installed in plaintiffs' homes between 1987 and 1997. The claims asserted against the Company, which purchased Champagne in 1999, are based on alter ego and successor liability theories. The plaintiffs, which claim to represent a purported class of 4,500 homeowners with Imperial windows, seek damages in an unspecified amount for repair and replacement of windows and other resulting damage, together with other relief permitted under applicable law and equity. In addition, one of the homebuilder defendants has filed a cross-claim against Champagne seeking indemnification in an amount of $2,800. The Company believes the Company and Champagne have meritorious defenses and are vigorously defending against these claims. The case is currently before the court on plaintiffs' motion for class certification, which the trial judge is expected to rule upon sometime in the next one to six months. While a vigorous defense of the case has been presented related to the class certification issues, the Company believes there is a likelihood that class certification will be granted. Because little discovery has been taken to date with respect to alleged damages, and the uncertainty with regard to class certification, apportionment of liability among the defendants and insurance coverage, it is not possible now to predict the final outcome of this lawsuit, or estimate any possible loss. AUTOBYTEL INC.: NY Court Refuses To Dismiss Securities Lawsuit -------------------------------------------------------------- The United States District Court for the Southern District of New York refused to dismiss the securities class action filed against Autobytel, Inc. and certain of its current and former directors and officers and underwriters involved in the Company's initial public offering. The action alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Plaintiffs allege that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. Plaintiffs allege the Company's prospectus for it's initial public offering was false and misleading in violation of the securities laws, because it did not disclose these arrangements. The action seeks damages in an unspecified amount. The action is being coordinated with approximately 300 other nearly identical actions filed against other companies. A motion to dismiss addressing issues common to the companies and individuals who have been sued in these actions was filed on July 15, 2002. On October 9, 2002, the court dismissed the Autobytel Individual Defendants from the case without prejudice based upon Stipulations of Dismissal filed by the plaintiffs and the Autobytel Individual Defendants. On February 19, 2003, the Court denied the motion to dismiss the complaint against the Company. The Company believes it has meritorious claims against the underwriters. AUTOWEB.COM: Named As Defendant in CSFB Securities Fraud Lawsuit ---------------------------------------------------------------- Autoweb.com, Inc. was named as a defendant in the securities class action filed in the United States District Court for the Southern District of Florida against Credit Suisse First Boston (CSFB), the co-lead underwriter of the Company's initial public offering. The company, the former Chief Executive Officer and the former Chief Financial Officer are also named as defendants. The complaint alleges claims against the Company and such former officers for violations of the Securities Act of 1933, Securities Exchange Act of 1934, and Florida's Blue Sky laws and also alleges claims based on common law theories of fraud, negligent misrepresentation and respondeat superior. The complaint makes similar allegations against approximately 50 other companies for which CSFB was the lead or a co-lead underwriter. The complaint alleges that the defendants disseminated false and misleading information to the public which misrepresented the accuracy of Autoweb's initial public offering price, its financial condition and future revenue prospects. The complaint further alleges that the effect of the purported fraud was to manipulate the Company's stock price so that the defendants could profit from the manipulation. The action seeks damages in an unspecified amount. No date has been set for a response to this complaint. The Company intends to vigorously defend the action. AUTOWEB.COM: NY Court Dismisses in Part Securities Fraud Lawsuit ---------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed in part the consolidated securities class action filed against Autoweb.com, certain of its current and former directors and officers and underwriters involved in its initial public offering. The suit alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Plaintiffs allege that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. Plaintiffs allege that the prospectus for Autoweb's initial public offering was false and misleading in violation of the securities laws because it did not disclose these arrangements. The action seeks damages in an unspecified amount. The action is being coordinated with approximately 300 other nearly identical actions filed against other companies. A motion to dismiss addressing issues common to the companies and individuals who have been sued in these actions was filed on July 15, 2002. On October 9, 2002, the court dismissed the Autoweb Individual Defendants from the case without prejudice based upon Stipulations of Dismissal filed by the plaintiffs and the Autoweb Individual Defendants. On February 19, 2003, the Court dismissed the Section 10(b) claim without prejudice and with leave to replead but denied the motion to dismiss the claim under Section 11 of the Securities Act of 1933 against Autoweb. The Company believes that it has meritorious claims against the underwriters and intends to vigorously defend the action. BLUE RHINO: Sued Over False Statements On Cost Of Distributors -------------------------------------------------------------- The shareholders of Blue Rhino Corporation, a North Carolina- based propane firm, are suing the company over "false and misleading" statements about how much it paid for the acquisition of 10 distributors last year, the Associated Press Newswires reports. The lawsuit was filed in the US District Court, in Los Angeles, California by representatives of the New York-based law firm Cauley Geller Bowman Coates & Rudman. The lawsuit alleged that Blue Rhino misrepresented the purchase price of the acquisition, saying "it totaled $21 million when in fact the true price of the acquisition was $32 million." The Blue Rhino acquired the 10 distributors in November 2002, by purchasing two holding companies, Platinum Propane Holding LLC and Ark Holding Co. LLC. The false and misleading information caused Blue Rhino's shares "to trade at artificially inflated prices," charges the lawsuit. On February 5, 2003, Blue Rhino filed statements with the U.S. Securities and Exchange Commission, detailing its purchase of Platinum Propane Holding and Ark Holding companies. That disclosure led to fluctuations in the company's stock price. On February 7, Blue Rhino's stock sank as much as 23 percent after a research report questioned the economic fitness of the two acquired companies. The shareholders' law firm, Cauley Geller, in a recent news release, said Blue Rhino initially characterized the two companies as financially healthy and profitable. "In fact, on a combined basis, these distributors had lost $2.8 million in the first 10 months of 2002, and owed Blue Rhino $5 million in cash advances in addition to their $2.8 million of debt," the law firm said in the news release. In addition, said law firm Cauley Geller, Blue Rhino misrepresented the purchase price of the acquisition, saying it "totaled $21 million, when in fact the true price of the acquisition was $32 million." CALIPER TECHNOLOGIES: NY Court Dismisses Securities Fraud Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed without prejudice the consolidated securities class action filed against Caliper Technologies and three of its officers and directors: (1) David V. Milligan, (2) Daniel L. Kisner and (3) James L. Knighton The suit alleges claims under Sections 11 and 15 of the Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder. The suit also names certain underwriters of the Company's December 1999 initial public offering of common stock. The suit alleges that these underwriters charged excessive, undisclosed commissions to investors and entered into improper agreements with investors relating to aftermarket transactions. The suit seeks an unspecified amount of money damages. The Company and the other issuers named as defendants in the IPO suits moved on July 15, 2002 to dismiss all claims on multiple grounds. By Stipulation and Order dated October 9, 2002, the claims against Mr. Milligan, Mr. Kisner and Mr. Knighton were dismissed without prejudice. On February 19, 2003, the court granted the Company's motion to dismiss all claims against it. Plaintiffs were not given the right to replead the claims against the Company; the time to appeal the dismissal has not yet expired. CATHOLIC CHURCH: Manchester Diocese Resolves Most Abuse Claims -------------------------------------------------------------- The Roman Catholic Diocese of Manchester announced recently that it had settled legal claims from 61 people who said they were abused by priests, The New York Times reports. The $6.5 million settlement resolves the majority of the cases that were lodged against the diocese since early 2002. Officials said the settlement will be paid with money from the diocesan insurance fund, a combination of insurance coverage and future reserves. The money will be apportioned to victims over three years, beginning in December. The seven-month gap will allow the financially beleaguered diocese to get on firmer financial footing, diocesan officials said. They emphasized that the church will not use any other sources, including money for schools and parishes or the sale of property to pay claims. "I hope this response by the church will help them (the victims) heal from the wounds of abuse," said Bishop John McCormack in a statement. "I am personally sorry for the hurt they have experienced and have written to each person expressing my deep regret, an apology on behalf of the church and my willingness to assist them personally in any way that is helpful." Mark Abramson, a lawyer who represented the 61 plaintiffs, said negotiations with the church, which lasted for about a year, were rocky. Mr. Abramson said he believed the church had not settled because it is in the best interest of the victims, but rather because it lost a series of court rulings, and the inner workings and history of protecting predatory priests was exposed through 9,000 pages of clergy personnel documents released in March. The release of these 9,000 pages that showed how the diocese had been handling the victims and the priests, resulted through a settlement of a criminal case with the state attorney general's office in December 2002. The diocese was given blanket immunity for admitting that it had failed to protect children from abusive priests and was likely to be prosecuted under the state's child endangerment statute. Also, under the terms of this same settlement, the diocese released the 9,000 pages of clergy personnel documents and agreed, among other stipulations, to undergo an annual audit by the state for the next five years to ensure that children are not being harmed. "They saw the writing on the wall and paid what they owed," Mr. Abramson said. Mr. Abramson said each case had been evaluated individually and each plaintiff would receive from $20,000 to $455,000, based on the severity of the abuse. Patrick F. McGee, a diocesan spokesman, said a dozen claims, or fewer, remained pending. The cost of settlements, coupled with a drop in donations, has left the diocese in financial straits. The diocese has eliminated 19 jobs and has closed a youth retreat house. It plans to close, by June 30, Bishop McCormack's stately brick house, which was donated to the diocese in the late 1940s. Closing the home is expected to save the diocese about $47,000 annually. It has not decided whether or not it will sell the property. DAOU SYSTEMS: Plaintiffs Appeal CA Securities Suit's Dismissal -------------------------------------------------------------- Plaintiffs appealed the dismissal of a consolidated securities class action filed against Daou Systems, Inc. and certain of its officers and directors in the United States District Court for the Southern District of California. The suit alleges that the Company improperly used the "percentage-of-completion" accounting method for revenue recognition. Claims are pleaded under both the 1933 Securities Act (relating to the Company's initial public offering) and section 10b of the 1934 Securities Act. The complaint was brought on behalf of a purported class of investors who purchased the Company's Common Stock between February 13, 1997 and October 28, 1998, but it does not allege specific damage amounts. The suit was amended three times. The Company asked the court to dismiss the third amended complaint, and in October 2002, the court granted that motion, this time with prejudice. The plaintiffs noticed appeal to the Ninth Circuit Court of Appeal on November 13, 2002. The Company filed a Notice of Cross-Appeal on November 26, 2002 challenging the failure of the trial court to assess whether the complaints were filed in violation of Rule 11 of the Federal Rules of Civil Procedure. Plaintiffs filed their opening brief on April 9, 2003. The Company is currently scheduled to file its brief no later than May 19, 2003. On October 7, 1998 and October 15, 1998, two separate complaints were filed in the Superior Court of San Diego County, California. These state court complaints mirror the allegations set forth in the federal complaints. They also assert claims for common law fraud and the violation of certain California statutes. As with their federal counterparts, they do not allege specific damage amounts. On April 1, 1999, a consolidated amended suit was filed on behalf of the same state court plaintiffs, and this new complaint alleges the same factual basis as is asserted in the federal litigation. The state litigation pleads claims for fraud and violations of certain California Corporation Code provisions. By stipulation of the parties and order of the court, this state court litigation was stayed pending the outcome of the motion to dismiss the federal lawsuits. The Company believes that the allegations set forth in the federal and state complaints are without merit, and the Company intends to defend against these lawsuits vigorously. No assurance as to the outcome of this matter can be given, however, and an unfavorable resolution of this matter could have a material adverse effect on the Company's business, results of operations, and financial condition. DELTA FINANCIAL: Court Refuses Summary Judgment For Fraud Suit -------------------------------------------------------------- The Supreme Court of the State of New York, Nassau County denied Delta Financial Corporation's motion to reargue summary judgment for a class action charging it with improperly charging certain borrowers processing fees. The complaint seeks certification of a class of plaintiffs, an accounting, and unspecified compensatory and punitive damages (including attorneys' fees), based upon alleged: (1) unjust enrichment, (2) fraud and (3) deceptive trade practices In September 1999, the Company filed a motion to dismiss the complaint, which was opposed by plaintiffs. The court denied the motion to dismiss. In April 1999, the Company filed a motion to change venue and plaintiffs opposed the motion. In July 1999, the court denied the motion to change venue. The Company appealed and in March 2000, the Appellate Court granted the appeal to change venue from New York County to Nassau County. In August 1999, plaintiffs filed a motion for class certification, which the Company opposed in July 2000. In September 2000, the court granted plaintiffs' motion for class certification, from which the Company appealed. The Appellate Court denied the appeal in December 2001. The Company filed a motion for summary judgment to dismiss the complaint, which the court denied. The Company appealed that decision, but the appellate court denied the appeal. The Company filed a motion to reargue in December 2002, which was denied by the court in January 2003. Discovery will now continue in the lower court. The Company believes that it has meritorious defenses and intends to defend this suit, but cannot estimate with any certainty its ultimate legal or financial liability, if any, with respect to the alleged claims. DELTA FINANCIAL: NY Court Approves Securities Lawsuit Settlement ---------------------------------------------------------------- The United States District Court for the Eastern District of New York approved the settlement for the class action filed against Delta Financial Corporation, seeking certification as a class action and alleging violations of the federal securities laws in connection with the Company's initial public offering in 1996 and reports subsequently filed with the Securities and Exchange Commission. The complaint alleges that the scope of the violations alleged in the consumer lawsuits and regulatory actions brought in or around 1999 indicate a pervasive pattern of action and risk that should have been more thoroughly disclosed to investors in the Company's common stock. In May 2000, the court consolidated this case and several other lawsuits that purportedly contain the same or similar allegations against the Company and in August 2000 plaintiffs filed their consolidated amended complaint. The Company filed a motion to dismiss the suit in its entirety, which was opposed by plaintiffs in November 2000, and denied by the Court in September 2001. The Company reached an agreement in principal with plaintiffs' counsel and its insurer to settle the action on a class-wide basis in August 2002 and executed a settlement agreement in January 2003, pursuant to which the Company denied all wrongdoing. The court approved the settlement at a fairness hearing in April 2003, and the settlement will be administered in the coming months. DELTA FINANCIAL: NY Court Grants Approval to Consumer Settlement ---------------------------------------------------------------- The Supreme Court of the State of New York, Nassau County preliminarily approved the settlement proposed by Delta Financial Corporation to settle the class action charging it with improperly charging and collecting from borrowers certain fees when they paid off their mortgage loans with the Company. The complaint seeks certification of a class of plaintiffs, declaratory relief finding that the payoff statements used include unauthorized charges and are deceptive and unfair, injunctive relief, and unspecified compensatory, statutory and punitive damages (including legal fees), based upon alleged violations of Real Property Law 274-a, unfair and deceptive practices, money had and received, unjust enrichment and conversion. In March 2001, the Company filed a motion for summary judgment, which was opposed by plaintiffs. In June 2001, the Company's motion for summary judgment dismissing the complaint was granted. In August 2001, plaintiffs appealed the decision. In September 2002, the Company executed a settlement agreement with plaintiffs pursuant to which the Company denied all wrongdoing, but agreed to resolve the litigation on a class-wide basis. In May 2003, the court preliminarily approved the settlement and scheduled a fairness hearing for July 2003, at which point the Company anticipates that the court will approve the settlement. In the event that the settlement is not approved, the Company believes that it has meritorious defenses and intends to defend this suit. However, it cannot estimate with any certainty the Company's ultimate legal or financial liability, if any, with respect to the alleged claims. ELECTRONIC DATA: Securities Fraud Suits To Be Consolidated in TX ---------------------------------------------------------------- Electronic Data Systems, Inc.'s motion to consolidated all the class actions filed against it and certain of its current and former officers in the United States District Court for the Eastern District of Texas has been granted. Numerous purported shareholder class actions were filed against the Company from September through December 2002 in response to the Company's September 18, 2002 earnings pre-announcement, publicity about certain equity hedging transactions that it had entered into, and the drop in the price of EDS common stock. The cases allege violations of various federal securities laws and common law fraud based upon purported misstatements and/or omissions of material facts regarding the Company's financial condition. In addition, five purported class actions were filed on behalf of participants in the EDS 401(k) Plan against the Company, certain of its current and former officers and, in some cases, its directors, alleging the defendants breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA) and made misrepresentations to the class regarding the value of EDS shares. The Company intends to mount a strong defense against the action. As these matters are in the earliest stages, the Company is not able to determine the impact on its condensed consolidated financial statements. EMERGING VISION: Plaintiffs Appeal Unfair Trade Suit Dismissal -------------------------------------------------------------- Plaintiffs appealed the dismissal of the class action filed against Emerging Vision, Inc. and its wholly-owned subsidiary VisionCare of California, Inc. (VCC) in the California Superior Court, Los Angeles County. The suit seeks a preliminary and permanent injunction enjoining the defendants from their continued alleged violation of the California Business and Professions Code and restitution based upon the defendants' alleged illegal charging of dilation fees during the four-year period immediately preceding the date of the plaintiff's commencement of such action. In the suit, the plaintiff alleged that VCC's employment of licensed optometrists, as well as its operation (under the name Sterling VisionCare) of optometric offices in locations which are usually situated adjacent to the Company's retail optical stores located in the State of California, violates certain provisions of the California Code and was seeking to permanently enjoin VCC from continuing to operate in such manner. On motion of the Company, which included a claim that VCC is a specialized Health Care Maintenance Organization that has been specifically licensed, under the California Knox Keene Health Care Service Plan Act of 1975, as amended, to provide the identical services that the plaintiff was seeking to enjoin, the court dismissed this action, with prejudice, and without liability to the Company. In April 2003, the plaintiff filed a Notice of Appeal of the decision of the lower court dismissing this action. The Company intends to actively pursue its opposition of this appeal. EN POINTE: Asks CA Court To Dismiss Consolidated Securities Suit ---------------------------------------------------------------- En Pointe Technologies, Inc. asked the United States District Court for the Southern District of California to dismiss the consolidated securities class action filed against it, five of its directors, one current officer, and certain former officers along with seven unrelated parties. The suit alleges that the defendants made misrepresentations regarding the Company and that the individual defendants improperly benefited from the sales of shares of the Company's common stock and seeking a recovery by the Company's stockholders of the damages sustained as a result of such activities. In February 2002, the defendants filed a motion to dismiss on the grounds that the allegations failed to state any actionable claims against them. The Motion to Dismiss was granted with leave to amend. Plaintiffs have filed their amended complaint. In January of 2003, the defendants filed another motion to dismiss. The motion has been fully briefed and is currently under submission with the court. The defendants intend to continue to vigorously defend the allegations. FORD MOTOR: High Court Orders Reconsideration of Punitive Awards ---------------------------------------------------------------- The Supreme Court recently told the state courts in California and Kentucky to reconsider multimillion-dollar punitive awards against Ford Motor Co. in personal injury lawsuits in the light of the court's decision last month in another case involving limits on damages for product liability, The Washington Post reports. Corporate lawyers hailed the action as a sure signal that the days of gigantic punitive awards in product-liability cases are coming to a close. The corporate lawyers view it to be the court's intention that damages be limited even in cases involving injury or death. Plaintiff and consumer advocates cautioned against reading too much into the action, noting that the justices issued no opinion. At issue is whether juries are free to punish corporations with fines far beyond the simple monetary value of the damage caused by a dangerous product that kills or hurts someone. The Supreme Court ordered the state courts in California and Kentucky to review the respective Ford Motor personal injury lawsuits in the light of its decision last month in a Utah case, involving a couple who sued the State Farm Insurance Co. for its handling of coverage of an automobile accident. A jury had awarded the couple $2.6 million in compensatory damages and $145 million in punitive damages. After several appeals, the compensatory award was reduced to $1 million, but the punitive amount stayed the same. The Supreme Court ruled last month the punitive award was out of proportion, and it suggested that punitive damages greater than 10 times the compensatory damages could be unconstitutional. One legal expert said it may be some time before the ramifications of the cases became clear. Syracuse University law professor Peter A. Bell noted that it is routine for the High Court, having ruled once on a topic, to send related cases back to the states for reinterpretation in light of the earlier ruling. "They want the lower courts to be able to digest what they have said," said Professor Bell. The court's decision last month "has got a lot for everybody to digest in it, including the justices themselves." The words of the justices, digested or not, have caused a flurry of activity. Dozens of punitive-damages cases are being appealed involving a number of industries, including insurance and pharmaceutical companies. More than 35 trade groups, chambers of commerce and consumer products companies filed court briefs supporting Ford in the two cases. In the California case, a jury awarded $4.6 million in compensatory damages and $290 million in punitive damages to the estate of the Romeo family, when a couple and their teenage son died after their Ford Bronco rolled over on a highway in 1993. The Kentucky case involved a $15 million punitive award on top of $3 million in compensatory damages a jury ordered Ford to pay to the estate of Tommy Smith, who was crushed when his pickup slipped out of gear. "The Supreme Court has made a strong statement that excessive and arbitrary awards will not be tolerated . in product- liability cases," said lawyer Ted Boutrous, who represented Ford in appealing both cases. However, consumer advocates and plaintiffs lawyers argue that in the Utah case, the court did not require that its ratio on punitive damages be applied to cases involving physical injury or death, such as in the Romo and Smith cases. Joan Claybrook of the Public Citizen consumer advocacy group, characterized the remand action of the High Court as a kind of "judicial housekeeping." "By remanding the (two cases), the court is saying (to the states) 'just be sure you considered this earlier decision,' but it is not something mandatory or required," Ms. Claybrook said. HMO LITIGATION: Member Dentists Sue Health Insurers Under RICO -------------------------------------------------------------- The American Dental Association (ADA) and two of its member dentists are suing some of the nation's largest insurers under the federal Racketeer Influenced and Corrupt Organization Act (RICO) and under state laws as well, over insurance abuses against dentists contracted under the insurers' managed-care- plans, the Associated Press Newswires reports. Defendants named in the lawsuit are: (1) CIGNA Corporation, (2) CIGNA Dental Health Inc., (3) MetLife, Inc., (4) Metropolitan Life Insurance Company, (5) Connecticut General Life Insurance Company, and (6) Mutual Of Omaha Insurance Company The lawsuit, filed recently in the US District Court of Florida in Miami charges the defendants with illegally paying their in- network dental providers less than their charges for provided dental services and with late payments in states with prompt-pay statutes. Among other things, specific charges in the complaint against the defendants include: (i) Defendants' secret use of cost-based or other actuarial criterial unrelated to a covered procedure or service to approve or deny claims; (ii) Downcoding, that is changing the procedure code to a less expensive code, and bundling, that is combining two or more performed procedures into one billed procedure in order to deprive plaintiffs of fees owed them for covered services; (iii) Delaying payments to dentists; and using their economic power and market dominance to coerce plaintiffs to accept these abusive practices and to unilaterally amend contracts with dental providers. The plaintiffs are requesting an injunction to prohibit the insurers from continuing to engage in the alleged abusive and awarding of compensatory and punitive damages. "The conduct that we have found with reference to the defendants in this lawsuit is pervasive, unfair to patients and the profession, and, I believe, illegal," said Peter Sfikas, ADA chief counsel. "These are matters that should be brought to the attention of the federal courts and rectified there." The not-for-profit ADA is the nation's oldest national dental association, representing more than 147,000 members. It advocates for the public's health and promotes the art and science of dentistry. IDAHO: Prominent Attorney Labels Shield Law Unconstitutional ------------------------------------------------------------ Steve Berman is attorney for a group of northern Idaho residents who have brought a class action against some grass growers. The lawsuit claims that the smoke created by the grass-burning, conducted by the grass growers, endangers their health and diminishes the value of their homes and property, the Associated Press Newswires. Mr. Berman told a state judge during a recent hearing that the Idaho Legislature violated the Constitution when it voted to shield grass growers from lawsuits if they follow the state's new field burning rules. Growers say they need to burn their fields to encourage the vigorous growth of the next crop of grass. Burning is scheduled to start the week of July 28, but Mr. Berman has asked First District Judge John Mitchell to block the burning. Arguments on that petition by Mr. Berman are set for next month. The new law, enacted in the wake of Mr. Berman's class action lawsuit, and according to Mr. Berman, actually enacted to "derail" his lawsuit brought by the Idaho property owners against the grass growers, covers the 10 northern counties of Idaho. The new law, the "shield" law, provides that grass growers who pay $1 an acre to register fields and burn only on days when the regulators say the wind conditions are favorable, are immune from damage suits. Violations by the grass growers of the "shield" law carry up to a $10,000 fine. Deputy Attorney General Clay Smith told Judge Mitchell, during the recent court hearing, that the law is a "perfectly rational response to a social problem." Mr. Berman claimed, in the hearing before Judge Mitchell, that the law "grants a right that has never been granted before in the United States. It is a special benefit to these farmers, who are free to injure people while they sleep in their beds and homes." Attorney General Smith countered, however, with the argument that there is no allegation that the fair market value of people's property in northern Idaho has been reduced because of burning. There is no justification to support a claim that burning constitutes an illegal taking of their property, the Attorney General said. Mr. Berman argued, however, that it is not necessarily the property itself that is affected, but the residents' enjoyment of that property. IOWA: Shareholders Claim CEO Tricked Directors To Approve Sale -------------------------------------------------------------- The Chief Executive of MidAmerican Energy Holdings Co. tricked the company's directors into approving the 1999 sale of the company to Berkshire Hathaway, according to claims recently filed by the shareholders in a class action, the Associated Press Newswires reports. Papers filed in the 1999 lawsuit claim that Chief Executive David Sokol used personal relationships, fraud and deceit to manipulate the board's decision. MidAmerican was sold in October 1999, to the Omaha-based investment firm Bershire Hathaway, in which Mr. Sokol held an interest, for $2.1 billion, or $35.05 per share. Shareholders contend the price should have been at least $37.37 per share. Mr. Sokol and Omaha businessman Walter Scott, one of MidAmerican's largest shareholders, brought the deal to Berkshire Hathaway's attention and benefited from the deal. The lawsuit claims that MidAmerican directors breached their duty to shareholders. "Many members of the board were inattentive, ignorant or exhibited a lack of diligence," according to new claims being brought by the shareholders. The recently filed new documents have been filed in response to MidAmerican's effort to have the lawsuit dismissed. Company officials have said the price was fair and that Berkshire Hathaway's offer was properly scrutinized. MidAmerican's board approved Mr. Sokol's request to have two investment firms prepare a report on strategic initiatives that executives might pursue, including a possible sale of the company, in order to boost MidAmerican's stock price. The report, which ultimately estimated MidAmerican's value at between $34 and $38 per share, was later used by board members to evaluate the Berkshire Hathaway offer. Shareholders say the final sale price was slightly lower than a valuation included in a secret report prepared by one of the same bankers at Mr. Sokol's request in September 1999. That report was said to be only for Mr. Sokol and Mr. Scott. Douglas Anderson, the company's general counsel, said the company plans to respond in writing to the new court documents presented by the shareholders in the coming days. KEYNOTE SYSTEMS: Negotiating Settlement For NY Securities Suit -------------------------------------------------------------- Keynote Systems, Inc. is working for the settlement of the consolidated securities class action filed in the United States District Court for the Southern District of New York against it, certain of its officers, and the underwriters of the Company's initial public offering. The suit was filed on behalf of those who purchased the Company's securities between September 24, 1999 and August 19, 2001. The suit alleges generally that the underwriters in certain initial public offerings, including the Company's allocated shares in those initial public offerings in unfair or unlawful ways, such as requiring the purchaser to agree to buy in the aftermarket at a higher price or to buy shares in other companies with higher than normal commissions. The complaint also alleges that the Company had a duty to disclose the activities of the underwriters in the registration statement relating to its initial public offering. The complaints have been consolidated into a single action with cases brought against over three hundred other issuers and their underwriters that make similar allegations regarding the initial public offerings of those issuers. The plaintiffs' counsel and the individual named defendants' counsel have reached an agreement whereby the individual named defendants have been dismissed from the case, without any payments by the Company. The case against the underwriters and the Company continues, however, plaintiffs' counsel and the underwriters have each offered revised settlement proposals to the issuers, but various terms and conditions are being negotiated. The Company is still evaluating each proposal. The Company believes the claims are without merit and intends to defend the actions vigorously should settlement not be reached. However, these claims, even if not meritorious, could be expensive to defend and divert management's attention from operating the Company. LASON INC.: MI Court Approves Securities Fraud Suit Settlement -------------------------------------------------------------- The United States District Court for the Eastern District of Michigan granted approval to the settlement proposed by Lason, Inc. relating to the class actions filed against it and certain now former executive officers on behalf of purchasers of shares of the Company's common stock during periods ranging from August 14, 1998 through December 17, 1999. The complaints generally allege that the Company and certain of its now former officers made public statements concerning the Company's revenues and earnings and inflated the market price of the shares of the Company's common stock. The complaints allege violations of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and one complaint alleges violations of the Securities Act of 1933. The complaints seek unspecified damages allegedly incurred as a result of the decline in the market price of shares of the Company's common stock after the Company announced on December 17, 1999 that it expected lower fourth quarter earnings per share as compared with consensus analysts' estimates. All of the parties to the litigation agreed upon the terms of a settlement. Pursuant to the settlement, a Settlement Fund of $12,680,000 in cash, plus interest, has been established. Although the Company cannot predict the outcomes of these legal proceedings, it is not currently aware of any claim or action, in the aggregate, that would have a material adverse effect on its financial position, results of operations or liquidity. LIBERTY SATELLITE: Faces Suits Over Liberty Stock Purchase Offer ---------------------------------------------------------------- Liberty Satellite & Technology, Inc. faces five class actions filed after it announced on April 1, 2003, that it had received an expression of interest from Liberty Media Corporation regarding the possibility of acquiring all of its issued and outstanding shares not already owned by affiliates of Liberty Media. As proposed by Liberty Media, LSAT stockholders would receive 0.2131 of a share of Liberty Media Corporation Series A common stock for each share of LSAT common stock held. The suits were filed on behalf of the stockholders of the Company other than Liberty Media and the other named defendants, in the Court of Chancery in New Castle County, Delaware. The suits name as defendants in addition to Liberty Media Corporation and the Company: (1) Alan M. Angelich, (2) Robert R. Bennett, (3) William H. Berkman, (4) William R. Fitzgerald, (5) John W. Goddard, (6) J. Curt Hockemeier, (7) Gary S. Howard, and (8) Kenneth G. Carroll, the Company's President and Chief Financial Officer. The suits assert, among other things, that LSAT's directors were dominated and controlled by Liberty Media and that the proposed consideration is inadequate. The plaintiffs seek injunctive relief to prevent consummation of the offer made by Liberty Media, and if the transaction with Liberty Media is consummated, an order rescinding the transaction or rescissory damages. The Company believes that the claims are without merit. LORAL SPACE: Asks NY Court To Dismiss Securities Fraud Lawsuits --------------------------------------------------------------- Loral Space & Communications, Ltd. asked the United States District Court for the Southern District of New York to dismiss the consolidated class action filed against it, Globalstar Telecommunications, Limited (GTL), Globalstar Capital Corporation and Bernard L. Schwartz, by various holders of securities of GTL and Globalstar. The suit alleges: (1) that all defendants (except Loral) violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by making material misstatements or failing to state material facts about Globalstar's business and prospects; (2) that defendants Loral and Schwartz are secondarily liable for these alleged misstatements and omissions under Section 20(a) of the Exchange Act as alleged "controlling persons" of Globalstar; (3) that defendants GTL and Schwartz are liable under Section 11 of the Securities Act of 1933 for untrue statements of material facts in or omissions of material facts from a registration statement relating to the sale of shares of GTL common stock in January 2000; (4) that defendant GTL is liable under Section 12(2)(a) of the Securities Act for untrue statements of material facts in or omissions of material facts from a prospectus and prospectus supplement relating to the sale of shares of GTL common stock in January 2000, and (5) that defendants Loral and Mr. Schwartz are secondarily liable under Section 15 of the Securities Act for GTL's primary violations of Sections 11 and 12(2)(a) of the Securities Act as alleged "controlling persons" of GTL. The class of plaintiffs on whose behalf the lawsuit has been asserted consists of all buyers of securities of Globalstar, Globalstar Capital and GTL during the period from December 6, 1999 through October 27, 2000, excluding the defendants and certain persons related or affiliated therewith. The Company and Mr. Schwartz have filed a motion to dismiss the amended complaint in its entirety as to Loral and Mr. Schwartz, which motion is pending before the court. The Company believes that it has meritorious defenses to this class action lawsuit and intends to pursue them vigorously. LORAL SPACE: NY Court Intends To Dismiss Securities Fraud Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York indicated that it might dismiss the securities class action filed by holders of common stock of Loral Space & Communications Ltd. against the Company, Bernard L. Schwartz and Richard Townsend. The suit alleges that all defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder by making material misstatements or failing to state material facts about Loral's financial condition and its investment in Globalstar and that Mr. Schwartz is secondarily liable for these alleged misstatements and omissions under Section 20(a) of the Exchange Act as an alleged "controlling person" of Loral. The class of plaintiffs on whose behalf the lawsuit has been asserted consists of all buyers of Loral common stock during the period from November 4, 1999 through February 1, 2001, excluding the defendants and certain persons related or affiliated therewith. The Company, Mr. Schwartz and Mr. Townsend have filed a motion to dismiss the complaint in its entirety. At oral argument on the motion on May 9, 2003, the court indicated its intent to dismiss the complaint but gave the plaintiffs thirty days to amend their complaint to state a cause of action. In the interim, the court denied the motion without prejudice to its renewal. LUMENIS LTD.: TX Court Yet To Rule on Dismissal of Stock Lawsuit ---------------------------------------------------------------- The Harris County Court in Texas heard Lumenis Ltd.'s motion to dismiss the class action filed against it and a leasing Company, alleging a variety of causes of action. The suit was initially filed in the Harris County Court in Texas on behalf of approximately forty-eight physicians and medical clinics, alleging: (1) breach of contract, (2) breach of express and implied warranties, (3) fraud, (4) misrepresentation, (5) conversion, (6) product liability, and (7) violation of the Texas Deceptive Trade Practices Act and Texas Securities Act In March 2002, the plaintiffs filed a motion to amend their complaint to dismiss the suit and securities allegations and to add several new plaintiffs and in June 2002, the motion was granted. The suit was earlier moved to Texas federal court, but the plaintiffs subsequently filed a motion to remand the cases to State Court, which was granted. On February 11, 2003, the Company filed a motion to dismiss the cases based on forum non-conveniens. The motion was heard on April 7, 2003, and the judge's ruling is pending. The Company denies the allegations and will continue to energetically defend itself. NOVATEL WIRELESS: Named as Defendant in CSFB Stock Fraud Lawsuit ---------------------------------------------------------------- Novatel Wireless, Inc. was named as a defendant in the securities class action filed in the United States District Court for the Southern District of Florida against Credit Suisse First Boston (CSFB) and approximately 50 companies, for whose respective initial public offering CSFB purportedly served as the lead underwriter. The suit purports to be on behalf of all the purchasers of the common stock of the named issuing companies and alleges violations of federal and state securities law. Specifically, the suit alleges that CSFB and each named issuer conspired to file false and misleading registration statements and other reports containing knowingly inflated financial and performance projections in order to support an aggressive IPO issue price. Although the Company has not yet been served in this action, the Company has reviewed the complaint, believes to have meritorious defenses, and intends to forcefully defend itself. OHIO: Settles Suits Against Police's Use of Force In Race Riots --------------------------------------------------------------- Officials of the City of Cincinnati, Ohio have approved a $4.5 million settlement of lawsuits, which accuse the police of using excessive force in race riots in 2001, The New York Times reports. "This is an opportunity to advance our city," Mayor Charles Luken told City Council members who had approved the settlement. "This is a good thing." Judge Susan J. Diott of the US District Court approved the settlement after the City Council's vote. The settlement involved three days of racial rioting in April 2001, after a white police officer shot and killed Timothy Thomas, 19, a black man who was fleeing to avoid arrest on misdemeanor charges. Cincinnati police have killed 14 other black men in encounters over six years. Officer Stephen Roach was acquitted in the shooting of Mr. Thomas. Blacks who began an economic boycott of Cincinnati after the rioting, had said the lawsuits should be settled before discussion could begin for the ending of the boycott. ON COMMAND: Shareholders Sue Over Liberty Stock Purchase Offer -------------------------------------------------------------- On Command Corporation faces a class action filed in the Court of Chancery in New Castle County, Delaware on behalf of the stockholders of the Company other than Liberty Media Corporation. The suit also names as defendants Liberty and: (1) Kenneth G. Carroll, (2) William R. Fitzgerald, (3) Paul A. Gould, (4) Mark K. Hammond, (5) Gary S. Howard, (6) Christopher Sophinos, and (7) J. David Wargo, and (8) Peter Kern, a former director Certain of the Company's officers were also named as defendants. The suit relates to the expression of interest from Liberty regarding the possibility of acquiring all the issued and outstanding shares of the company not already owned by affiliates of Liberty. The suit asserts, among other things, that the offer made by Liberty was the product of unfair dealing by Liberty and its representatives on the Company's Board of Directors and does not offer the public stockholders of the Company fair value for their shares. The plaintiff seeks injunctive relief to prevent consummation of the offer made by Liberty, and if the transaction with Liberty is consummated, an order rescinding the transaction or rescissory damages. The Company believes that the claims are without merit. POST APARTMENT: Plaintiffs Ask For Expedited Discovery in Suit -------------------------------------------------------------- Plaintiffs asked the Superior Court of Fulton County, Atlanta, Georgia for a voluntarily expedited discovery in the shareholder derivative and purported class action filed against Post Apartment Homes LP (as a nominal defendant) and members of the board of directors of the Company, including John Williams. The suit alleges various breaches of fiduciary duties by the Company's board of directors, among other relief, the disclosure of certain information by the defendants. This complaint also seeks to compel the defendants to undertake actions to facilitate a sale of the Company. The defendants have not yet filed an answer to the plaintiffs' motion. The Company believes this lawsuit is without merit and intends to vigorously defend against it. POST APARTMENT: Shareholders File Derivative Lawsuit in GA Court ---------------------------------------------------------------- Post Apartment Homes LP faces a shareholder derivative and purported class action lawsuit filed in the Superior Court of Fulton County, Atlanta, Georgia. The suit also names as defendants certain members of the board of directors of the Company. The suit alleges breaches of fiduciary duties, abuse of control and corporate waste by the defendants. The plaintiff seeks monetary damages and, as appropriate, injunctive relief. The defendants have not yet filed an answer. The Company believes this lawsuit is without merit and intends to actively defend itself. SALIX PHARMACEUTICALS: Faces Suit Over Axcan Pharma Offer in DE --------------------------------------------------------------- Salix Pharmaceuticals, Inc. and its directors face a class action filed on behalf of its stockholders in the Delaware Court of Chancery, alleging breach of fiduciary duties for not negotiating with Axcan Pharma, Inc. relating to Axcan's offer to acquire the Company's shares. The duration and outcome of this litigation cannot be predicted at this time. The Company believes that each of these lawsuits is without merit. TEXAS: Judge Dismisses 8 Suits Over Haltom City Jail Sex Abuse -------------------------------------------------------------- US District Court Judge John McBryde has thrown out eight of the 14 lawsuits alleging sex abuse in the Haltom City Jail, because the women cannot prove that the abuse was the city's fault, The Fort Worth Star-Telegram reports. The women alleged in their lawsuits that they had received excessive jail sentences for minor offenses. They further alleged, once in jail they were subjected to sexual abuse ranging from lurid stares to sexual assault. Judge McBryde did not rule on whether the women were abused. Instead, he wrote that the city can be sued "only if its official policy or custom caused (the women) to be deprived of a federally protected right." Most of the women's claims revolved around former jailer Clint Wade Weaver, who has admitted to trading early release from jail for sexual favors. The lawsuits contend that the city should have provided Mr. Weaver and other jailers with better training on civil rights. Mr. Weaver has pleaded guilty to one count of official oppression and has been indicted on three other charges, including felony sexual assault. Mr. Weaver was dropped from the lawsuits in February, after he gave a statement casting most of the blame on the city. Some of the lawsuits also accuse former Municipal Judge Jack Byno of handing out lengthy sentences without determining whether the women were entitled to court-appointed lawyers. Judge McBryde said the city is immune from liability for Judge Byno's actions. "The law is clear that the judicial actions of a municipal judge do not create liability for the city that employs them," Judge McBryde wrote. The women's attorneys have 10 days to ask Judge McBryde to reconsider his rulings on the eight dismissed lawsuits, or the attorneys can appeal to the Fifth US Circuit Court of Appeals in New Orleans. "We are in the process of looking through the court's order now," said James Skinner, one of the three lawyers for the women plaintiffs. The city's lawyers have argued from the outset that the city is not responsible for the problems in the jail. Six lawsuits remain pending against the city, including a would-be class action that says the City Council is directly responsible for problems in the jail. Judge McBryde has not decided whether it can be a class action. The suit says the Council knew that Judge Byno was handing out lengthy sentences and denying lawyers to inmates, but ignored his actions, because he brought in more revenue than previous judges. The suit says that as many as 5,000 people may have been denied lawyers. Lawyers for the city and Judge Byno have filed separate requests to dismiss the remaining lawsuits, but Judge McBryde has not ruled on the requests, and both sides are awaiting his decision. TWINLABS CORPORATION: Faces Several Suits Over Ma Huang Products ---------------------------------------------------------------- TwinLabs Corporation has been named as a defendant in a number of pending lawsuits, alleging that its Ma Huang products caused injury, death and/or damages, as well as certain proceedings seeking class action certification for consumer fraud related to the sale of such products. Ma Huang has been the subject of extensive negative publicity in the United States and other countries relating to alleged harmful or adverse effects. This publicity has led to recent congressional hearings addressing the safety of Ma Huang and several state governments have passed legislation regulating the sale of products that contain Ma Huang. Recently, the Suffolk County (New York) legislature passed a bill that bans retail sales of ephedra products in Suffolk County. Other jurisdictions have proposed similar legislation. The current media and political attention to Ma Huang is likely to lead to further legislation related to the sale of products containing Ma Huang including the possible ban of sale of these products. The Company is vigorously defending these lawsuits. The Company believes in the safety and efficacy of its products that contain Ma Huang based on the scientific evidence. Nevertheless, as a result of the increasing costs that are negatively impacting the profitability of these products, coupled with consumer demand for non-ephedra weight loss products, the Company decided to discontinue the sale of products that contain Ma Huang effective on or about March 31, 2003. VITALWORKS INC.: Shareholders Lodge Securities Fraud Suits in CT ---------------------------------------------------------------- Vitalworks, Inc. faces several securities class actions filed in the United States District Court for the District of Connecticut on behalf of purchasers of securities of the Company between April 24, 2002 and October 23, 2002. The suit also names as defendants three of its executive officers. The complaint alleges, among other things, violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder and breach of fiduciary duties. The complaint alleges that the defendants made misleading statements and omissions regarding the Company's business and operations, principally in press releases and public conference calls in April 2002 and July 2002, which allegedly had the effect of artificially inflating the market price of the Company's common stock during the class period, and that six officers of the Company, including the defendant officers, sold shares of Company common stock during the class period. The plaintiff seeks recovery of an unstated amount of compensatory damages, attorneys' fees and costs. While management believes that the Company has meritorious defenses in each of the foregoing matters and the Company intends to pursue its positions vigorously, litigation is inherently subject to many uncertainties. Thus, the outcome of these matters is uncertain and could be adverse to the Company. However, even if the outcome of these cases is adverse, management does not believe that the outcome of these cases, individually or in the aggregate, will have a material adverse effect on the financial position of the Company. WASHINGTON: Settlement Reached In Apple Commission Litigation ------------------------------------------------------------- The Washington Apple Commission has been resurrected with a small payment to be forthcoming from growers to support research, lobbying and some other activities of a non- promotional character, the Associated Press Newswires reports. The settlement stems from the class action that the commission filed against the state's apple growers in 2001, to determine the constitutionality of forcing the growers to pay for the commission's promotion of Washington apples. US District Court Judge Edward Shea found in March that the forced assessments for advertisement and promotion were an unconstitutional infringement on the growers' rights to free speech. "This has been a long and difficult process for all involved, and for the industry as a whole," said Welcome Sauer, president of the 66-year-old commission. "We are pleased a settlement has been reached so the industry can now move forward." The settlement was negotiated with US Magistrate Lonny Suko in Yakima among the commission and the defendant apple growers. The apple growers were represented by two north-central Washington growers representing all the apple growers in the class-action lawsuit; seven organic apple growers; and three large Yakima apple warehouses. The settlement still must receive approval from Judge Shea. Under the terms of the settlement, the Wenatchee-based commission will operate on a curtailed basis, with growers paying an assessment of 3.5 cents per 42-pound box of apples. The previous assessment was 25 cents a box, which for the 2002- 2003 apple crop would have brought in about $21.5 million. Collection of the 3.5 cents will begin September 1 for all varieties except Golden Delicious, Red Delicious and Fuji. Collection for the three latter-named varieties will begin October 1. The commission will seek legislation which will redistrict and allocate seats on the commission based on planted acreage in a district; rotate commission meetings between Yakima and Wenatchee; and require a two-thirds majority approval for any increases in the assessment as opposed to the current simple majority. New Securities Fraud Cases AVERY DENNISON: Faruqi & Faruqi Files Securities Suit in C.D. CA ---------------------------------------------------------------- Faruqi & Faruqi LLP initiated a securities class action in the United States District Court for the Central District of California on behalf of all purchasers of Avery Dennison Corporation (NYSE:AVY) securities between July 24, 2001 and April 14, 2003, inclusive. The complaint charges Avery with violations of federal securities laws by, among other things, issuing a series of materially false and misleading press releases concerning Avery's financial results and business prospects and/or omitting to disclose material facts necessary to correct these statements. Specifically, the complaint alleges that Avery failed to disclose, among other facts, that: (1) Avery was engaged in an illegal anti-competitive scheme with a leading competitor 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 on the future of such anti- competitive behavior was discovered; and (4) that its financial results would be materially impacted if the Company was forced to end its anti-competitive behavior. On April 14, 2003, however, the United States Department of Justice (DOJ) announced it had started a criminal investigation into the competitive practices in the labelstock industry and would shortly issue a subpoena to the Company in connection with that investigation. Additionally, on April 15, 2003, the DOJ filed a lawsuit against an Avery competitor, alleging evidence of anti-competitive behavior by Avery and others. On this news, Avery's stock fell in excess of $4.00 per share. For more details, contact Anthony Vozzolo by Mail: 320 East 39th Street, New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330 or by E-mail: Avozzolo@faruqilaw.com CERNER CORPORATION: Bernstein Liebhard Files Stock Lawsuit in MO ---------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the Western District of Missouri on behalf of all persons who acquired securities of Cerner Corporation (NasdaqNM:CERN) between July 17, 2002 to April 2, 2003, inclusive. Defendants are charged with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder for having failed to disclose and for having misrepresented the following adverse facts, among others: (1) the Company was experiencing an increased level of competition as competitors slashed prices in order to take business from the Company. As a result, the Company was losing a material amount of sales to competitors; (2) certain of the Company's clients were delaying or deferring the purchase of products from the Company or determining not to proceed with those purchases at all; (3) the Company had reorganized its sales force and that the reorganization was negatively impacting the ability of the Company to close certain sales; and (4) as a result of the foregoing, Defendants' earnings projections were lacking in a reasonable basis at all times and were materially false and misleading. On April 3, 2003, Cerner shocked the market by announcing that "it expects its first quarter 2003 revenue and earnings to be below expectations because of a lower level of new business bookings in the quarter." The press release further revealed that the Company expected bookings for the first quarter of 2003 to be between $145 and $150 million and that earnings would be between $0.13 to $0.15 per share as compared to analysts' earnings estimates of $0.38 per share. The market reacted swiftly to this news, pushing the price of Cerner common stock down over 45%, to close at $17.63 per share on extremely heavy trading volume. 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: CERN@bernlieb.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. 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