/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030603.mbx C L A S S A C T I O N R E P O R T E R Tuesday, June 3, 2003, Vol. 5, No. 108 Headlines AETNA: Wins Approval For $170M Settlement of Doctor's Lawsuit AMERICAN EXPRESS: CA Court Approves Consumer Lawsuit Settlement AMERICAN EXPRESS: Plaintiffs Launch Amended Lawsuit in CA Court AMERICAN EXPRESS: IL Consumers Commence Cardholder Fraud Lawsuit AMERICAN EXPRESS: IL Consumers File Lawsuit Over Conversion Fees AMERICAN EXPRESS: TX Consumers Launch Suit Over Conversion Fees AMERICAN EXPRESS: Consumers Begin Antitrust Lawsuit in E.D. NY AMERICAN EXPRESS: Named in ADC Telecommunications ERISA Lawsuit ATMOS ENERGY: Denial of Royalties Suit's Certification Appealed BROADWING INC.: OH Investors File Securities, Derivative Suits CARDINAL HEALTH: Asks For Dismissal of Suit Over Syncor Takeover COMMUNITY BANCSHARES: Faces AL Suit For RICO Violations, Fraud FORD MOTOR: IL City to Commence Legal Action Over Crown Victoria HERCULES INC.: Agrees To Settle Lawsuit Over GA Plant Operations HERCULES INC.: DE Court Grants Certification To Employee Lawsuit INTERPUBLIC GROUP: Asks NY Court To Dismiss Securities Lawsuit INTERPUBLIC GROUP: IL Federal Court Remands Suit To State Court IONICS INC.: Shareholders Launch Securities Fraud Lawsuit in MA NASH FINCH: Shareholders Launch Securities Fraud Lawsuits in MN PNC FINANCIAL: Asks PA Court To Dismiss Securities Fraud Lawsuit PREDICTIVE SYSTEMS: NY Court Dismisses in Part Securities Suit RAMBUS INC.: Stock Rises After Securities Fraud Suits Dismissal RARE MEDIUM: TX Court Refuses To Hear Appeal of Suit Dismissal RARE MEDIUM: NY Court Refuses To Dismiss Securities Fraud Suit SEITEL INC.: Asks TX Court To Dismiss Securities Fraud Lawsuit SEITEL INC.: Plaintiffs Appeal Claims Dismissal in Trespass Suit SYNCOR INTERNATIONAL: Labels Securities Litigation Without Merit TELAXIS COMMUNICATIONS: NY Court Dismisses in Part Stock Lawsuit WASHINGTON: Apple Commission's Sauer To Resign Under Settlement New Securities Fraud Cases CORNERSTONE PROPANE: Schiffrin & Barroway Lodges Securities Suit ********* AETNA: Wins Approval For $170M Settlement of Doctor's Lawsuit -------------------------------------------------------------- US District Court Judge Federico Moreno said recently the agreement proffered by Aetna for settlement of the racketeering lawsuit brought by the nation's doctors was "within the range of reasonableness," Associated Press Newswires reports. Judge Moreno set a hearing date of October 13, for the airing of objections and for either final approval or rejection of the $170 million settlement. Therefore, despite objections raised by other managed health care companies and an attorney representing doctors in another case, preliminary approval was granted a settlement which was reached only after 14 months of talks between the doctors and Aetna. "We think this is a proud day," said doctors' attorney Harley Tropin, one of the attorneys who helped negotiate with Aetna. Mr. Tropin characterized the settlement, which resulted after 14 months of negotiations as a landmark agreement that doctors hope to use as a blueprint for other health insurers. The doctors had claimed, among other things, that they were routinely shortchanged in their claims for services by a system that downgraded claims and discounted them when several services were provided simultaneously. The settlement calls for certain payouts by Aetna. Aetna will pay $100 million to doctors, which is an average of about $142 each. Aetna also will provide $20 million to establish a foundation aimed at reducing medical errors, childhood obesity and racial disparities in treatment. Aetna also will pay up to $50 million to doctors' lawyers. Aetna estimates that its policy changes will cost an estimated $300 million over several years by speeding up payments to doctors; and eliminating cuts to reimbursement under the existing systems. In changes that Mr. Tropin called the heart of the settlement, Aetna's codes for filing claims would be based on American Medical Association guidelines, and the company's fee schedules could change only once a year. Timothy Norbeck, executive of the Connecticut State Medical Society, said the agreement favors better medical care "over the intrusive technicalities and oppressive minutiae that have long plagued managed care systems." Aetna plans to take a $75 million after-tax charge in the second quarter for the settlement. Attorneys for companies other than Aetna and Cigna, which has a disputed settlement on file, claimed segments of the agreement were anti-competitive, prejudicial and unfair, but Judge Moreno turned the complaints aside for now. The American Medical Association, 19 other medical societies and the doctors whose names are on the class-action lawsuits have endorsed the settlement, Mr. Tropin said. Judy Cates, who represented doctors in the Cigna settlement, claimed doctors would be unable to calculate their potential recovery under the Aetna pact. She suggested that a mathematical formula should be added to the legal notice sent to doctors which would represent the methods of calculation described in the settlement. "The doctors in this country do not trust the managed care companies; it is important that the class know what they are getting," said Ms. Cates. Ms. Cates also sought an estimate of doctors covered by the Aetna settlement. Company attorney Richard Doren said roughly 450,000 doctors in active practice have Aetna contracts. By adding retired physicians and others who do business with the company, the number climbs above 700,000. Doctors who want to withdraw from the Aetna class action settlement must do so by August 29. Objections must be filed in writing by September 12. AMERICAN EXPRESS: CA Court Approves Consumer Lawsuit Settlement --------------------------------------------------------------- The United States District Court for the Central District of California approved the settlement proposed by the American Express Company in the consumer class action filed against it, American Express Travel Related Services Company, Inc. (TRS) and American Express Centurion Bank. The complaint principally alleges that class members improperly were charged daily compounded interest on the Optima line of credit cards and that AECB improperly applied credits for returned merchandise against Optima balance transfer balances. The plaintiffs asserted various claims including: (1) violation of the federal Truth in Lending Act, (2) breach of contract, (3) fraud and unfair and deceptive practices and (4) violations of the California Consumer Legal Remedies Act The action sought statutory and actual damages, restitution and injunctive relief. Although the Company believed it had meritorious defenses to this action, in light of the inherent uncertainties and the burden and expense of lengthy litigation, the Company reached an agreement to settle the lawsuit. On April 23, 2003, the court approved the proposed settlement filed by the parties. The settlement provides for certification of two classes. The first class, defined as the "finance charge" class, includes all customers who incurred finance charges between August 1994 and September 2002. The proposed settlement of the first class consists of a settlement fund in the amount of $15,950,000 that will be distributed on a pro rata basis to those class members who are entitled to a refund. The second class, defined as the "delayed notice" class, includes all customers who did not receive change in terms notices and who, as a result, incurred increased charges between September 2001 and September 2002. In April 2003, these class members received a refund of the charges affected by the terms changes that were incurred during the class period. The Company has made appropriate reserves for the settlement amounts. AMERICAN EXPRESS: Plaintiffs Launch Amended Lawsuit in CA Court --------------------------------------------------------------- Plaintiffs filed an amended class action against the American Express Company in the Alameda County Superior Court for the State of California, asserting two causes of action for violation of: (1) California's Unfair Competition Law, (2) California Business and Professions Code Section 17200, et seq., and (3) the California Consumer Legal Remedies Act, California Civil Code Section 1750, et seq. The suit named as defendants the Company and American Express Travel Related Services Company, Inc. (TRS). The plaintiffs allege that the defendants purportedly failed to disclose a transaction fee that is assessed on purchases of goods and/or services in a foreign currency and further allege that the defendants include in their cardmember agreements unconscionable and unlawful arbitration provisions. Initially the complaint was filed on behalf of a putative California class. In May 2003, the complaint was amended to allege a purported nation-wide class. AMERICAN EXPRESS: IL Consumers Commence Cardholder Fraud Lawsuit ---------------------------------------------------------------- The American Express Company faces a class action filed in the Circuit Court of Cook County, Illinois County Department, Chancery Division. The suit also names as defendants American Express Travel Related Services Company, Inc. and American Express Centurion Bank. In the complaint, the plaintiffs assert causes of action for violations of Illinois Cardholder Fraud and Deceptive Practices Act and for "unjust enrichment." The plaintiffs allege that the defendants failed to disclose a transaction fee that is assessed on purchases of goods and/or services in a foreign currency and further allege that the defendants include in their cardmember agreements unconscionable and unlawful arbitration provisions. Based on these allegations, the plaintiffs seek injunctive relief, restitution, disgorgement, compensatory and exemplary damages and attorneys' fees and costs on their own behalf and on behalf of a putative nationwide class of American Express cardholders "excluding those in the State of California." AMERICAN EXPRESS: IL Consumers File Lawsuit Over Conversion Fees ---------------------------------------------------------------- The American Express Company faces a class action filed in the Circuit Court for the Third Judicial Circuit in Madison County, Illinois alleging that the Company wrongfully collected conversion fees assessed on transactions made in a foreign currency. The suit also names as defendants the American Express Travel Related Services Company, Inc. The complaint alleges causes of actions for unjust enrichment, breach of contract and statutory fraud under the Illinois Consumer Fraud Act. The plaintiff is seeking an unspecified amount of damages. The defendants have not yet been served with the complaint relating to the action. AMERICAN EXPRESS: TX Consumers Launch Suit Over Conversion Fees --------------------------------------------------------------- The American Express Company and American Express Travel Services Company face a class action filed in the State District Court, Hidalgo, Texas, alleging that the defendants wrongfully collected conversion fees assessed on transactions made in foreign currency. The complaint alleges causes of action for unjust enrichment and breach of contract. The plaintiff is seeking an unspecified amount of damages. The Company believes it has meritorious defenses to the suit and intends to defend them vigorously. The Company believes that it is not a party to, nor are any of its properties the subject of, any pending legal or arbitration proceedings that would have a material adverse effect on its consolidated financial condition, results of operation or liquidity. AMERICAN EXPRESS: Consumers Begin Antitrust Lawsuit in E.D. NY -------------------------------------------------------------- The American Express Company and one of its subsidiaries face a class action filed in the United States District Court for the Eastern District of New York, alleging an unlawful antitrust tying arrangement between the Company's charge cards, credit cards and "debit cards." The plaintiffs seek injunctive relief and an unspecified amount of damages. The Company believes it has meritorious defenses to each of these actions and intends to defend them vigorously. The Company believes that it is not a party to, nor are any of its properties the subject of, any pending legal or arbitration proceedings that would have a material adverse effect on the Company's consolidated financial condition, results of operation or liquidity. AMERICAN EXPRESS: Named in ADC Telecommunications ERISA Lawsuit --------------------------------------------------------------- American Express Trust Co. (AETC) was named as a defendant in the class action filed primarily against ADC Telecommunications, Inc. in the United States District Court, District of Minnesota. The Company was named as a defendant in relation to its role as directed trustee of the retirement savings plan of ADC Telecommunications. The complaint alleges that AETC breached fiduciary duties under the Employee Retirement Income Security Act of 1974, as amended (ERISA), in relation to the retention of ADC common stock in the ADC Retirement Plan. The complaint seeks certification of a class of all participants who held ADC common stock in accounts in the ADC Retirement Plan during the period from November 2, 2000 to the present. The Company believes it has meritorious defenses to the suit and intends to defend them vigorously. The Company believes that it is not a party to, nor are any of its properties the subject of, any pending legal or arbitration proceedings that would have a material adverse effect on the Company's consolidated financial condition, results of operation or liquidity. ATMOS ENERGY: Denial of Royalties Suit's Certification Appealed --------------------------------------------------------------- Plaintiffs appealed the District Court of Stevens County, Kansas' ruling rejecting class certification for a lawsuit filed against Atmos Energy Corporation, its Colorado-Kansas division and more than 200 companies in the natural gas industry. The plaintiffs, who purport to represent a class consisting of gas producers, royalty owners, overriding royalty owners, working interest owners and state taxing authorities, allege the defendants have underpaid royalties on gas taken from wells situated on non-federal and non-Indian lands throughout the United States and offshore waters predicated upon allegations that the defendants' gas measurements are simply inaccurate and that the defendants failed to comply with applicable regulations and industry standards over the last 25 years. Although the plaintiffs do not specifically allege an amount of damages, they contend that this suit is brought to recover billions of dollars in revenues that the defendants have allegedly unlawfully diverted from the plaintiffs to themselves. On April 10, 2000, this case was consolidated for pre-trial proceedings with other similar pending litigation in federal court in Wyoming in which the Company is also a defendant along with over 200 other defendants. In January 2001, the federal court elected to remand this case back to the Kansas state court. A reconsideration of remand was filed, but it was denied. The state court now has jurisdiction over this proceeding and has issued a preliminary case management order. On April 10, 2003, the court denied the plaintiffs' motion to certify the proceeding as a class action. The Company believes that the plaintiffs' claims are lacking in merit, and intends to vigorously defend this action. BROADWING INC.: OH Investors File Securities, Derivative Suits -------------------------------------------------------------- Broadwing, Inc. faces several securities class actions and derivative lawsuits filed in the United States District Court for the Southern District of Ohio and the Ohio Court of Common Pleas, Hamilton County Division, respectively, on behalf of purchasers of the securities of the Company between January 17, 2001 and May 20, 2002, inclusive. The complaints alleged that the Company, its former Chief Executive Officer (CEO) and its current CEO violated federal securities laws arising out of allegedly issuing material misrepresentations to the market during the class period which resulted in artificially inflating the market price of the Company's securities. In a separate action, a number of complaints have been filed in the United States District Court for the Southern District of Ohio on behalf of the Broadwing Retirement Savings Plan and its beneficiaries alleging that the Company and several of its directors violated the Employee Retirement Income Security Act by allegedly exposing the beneficiaries' retirement savings to unreasonable risk of loss and injury. The Company intends to defend these claims vigorously. CARDINAL HEALTH: Asks For Dismissal of Suit Over Syncor Takeover ---------------------------------------------------------------- Cardinal Health, Inc. asked the Court of Common Pleas, Delaware County, Ohio to dismiss the amended shareholder derivative action filed against it and its directors. The suit was filed alleging breach of fiduciary duties and corporate waste in connection with the alleged failure by the Board of Directors of the Company to renegotiate or terminate the Company's proposed acquisition of Syncor International Corporation, and determine the propriety of indemnifying Monty Fu, the former Chairman of Syncor. The Company believes the allegations made in the amended complaint are without merit and intends to vigorously defend this action. The Company currently does not believe that the impact of this lawsuit, if any, will have a material adverse effect on its financial position, liquidity or results of operations. COMMUNITY BANCSHARES: Faces AL Suit For RICO Violations, Fraud -------------------------------------------------------------- Community Bancshares, Inc. faces a class action filed in Alabama State Court. The suit also names as defendants: (1) Community Bank, (2) Holsombeck Motors, Inc., (3) Lee Brown d/b/a Alabama Bond & Investigation a/k/a ABI Recovery, (4) Chris Holmes d/b/a Alabama Bond & Investigation a/k/a ABI Recovery, (5) Regina Holsombeck, (6) Kennon "Ken" Patterson, Sr., (7) Hodge Patterson, (8) James Timothy "Tim" Hodge, (9) Ernie Stephens, and (10) the State of Alabama Department of Revenue The suit alleges that Community Bank and others conspired or used extortionate methods to effect a lending scheme of "churning phantom loans", and that profits from the scheme were used to secure an interest in and/or to invest in an enterprise that affects interstate commerce. The allegations state that Community Bank used various methods to get uneducated customers with fair to poor credit to sign numerous "phantom loans" when the customers only intended to sign for one loan. Claims include: (i) racketeering activity within the meaning of the Racketeer Influenced and Corrupt Organizations Act of 1970, (ii) conspiracy, (iii) spoliation, (iv) conversion, (v) negligence, (vi) wantonness, (vii) outrage, and (viii) civil conspiracy The Company intends to defend the action vigorously and currently is conducting discovery to ascertain what substance, if any, there is to the claims. Although management currently believes that this action will not have a material adverse effect on the Company's financial condition or results of operations, regardless of the outcome, the action could be costly, time consuming, and a diversion of management's attention. FORD MOTOR: IL City to Commence Legal Action Over Crown Victoria ---------------------------------------------------------------- About a week after a Missouri state trooper died when his Ford Crown Victoria squad car exploded after a crash, an Illinois county and city are moving ahead with a lawsuit against the Ford Motor Co., the Associated Press Newswires reports. St. Clair County and the city of Centreville, both located in Illinois, were scheduled to ask a court on Friday, May 30, to certify all police agencies in Illinois as a class to proceed with a fraud, negligence and breach of warranty claim against Ford. Their lawsuit says the automaker knew Crown Victoria cars were prone to explosion, especially in law enforcement use. The Company denied that assessment in a statement to the St. Louis Post Dispatch. The Company said it makes sure its cars meet all federal safety standards, and added that it works to make police vehicles safer. "No design can eliminate all risk in high-speed, high-energy rear collisions," the statement said. " . (T)here is no car in the world designed to eliminate the risk of fuel leakage in such high-speed collisions." On May 22, Missouri Trooper Michael was killed in a flaming crash on Interstate 70 near Odessa in Lafayette County. He had stopped a motorist, who was with him in the squad car when it was struck from behind by a pickup truck. Passersby managed to pull the motorist from the trooper's car, but Trooper Newton burned to death. Mr. Newton's death was the 14th since 1982, of a law enforcement officer in a Crown Victoria explosion. Neither St. Clair County nor Centreville, whose cars are at the center of the lawsuit seeking class action status, has experienced an explosion. However, the county has installed an automatic fire suppression system in each of its more than 40 Crown Victorias. Many police agencies have taken other safety steps, including removing from their trunks the pry bars that could be thrust through the fuel tank in a collision. Plaintiffs in the St. Clair County lawsuit want Ford to pay to make their cars safer. They note that Ford already installs a device to help contain fuel in the tanks of some high- performance Mustangs. Investigations have shown that a breach of the fuel tank has been the result of being speared by a tool or part of the car's suspension. A 10-month investigation by the National Highway Traffic Safety Administration (NHTSA) determined last fall that vehicles with the Crown Victoria's fuel system involved in a rear-end crash caught fire 8 percent of the time, compared to 6.3 percent with the fuel system used in the comparable Chevrolet Caprice. NHTSA said the Crown Victoria meets current federal standards requiring a vehicle to withstand a rear crash at 30 miles per hour without leaking fuel. The agency also said the vehicle did not leak fuel during a test at 50 mph, which it proposed to be the new standard. This week in the wake of the Missouri crash, Senator Charles Schumer, D-NY, asked NHTSA to reopen its investigation of the Crown Victoria. A state trooper from New York was killed last December in Yonkers, when his patrol car was struck from behind. "We know that there is a problem, and now we need to figure out what we need to do to solve it," the Senator said in a letter to the agency. Many agencies choose the Crown Victorias because they like the vehicles' larger accommodations, rear wheel drive and V-8 engine. The Missouri State Highway Patrol, which never had a Crown Victoria explode before, plans to stick with the model as its primary vehicle, Lt. Tim Hull said. HERCULES INC.: Agrees To Settle Lawsuit Over GA Plant Operations ---------------------------------------------------------------- Hercules, Inc. settled claims of all but six plaintiffs in the class action filed relating to the operations of its Brunswick, Georgia facility. In June 1998, the Company and David T. Smith Jr., a former employee and plant manager at the Brunswick plant, along with Georgia-Pacific Corporation and AlliedSignal Inc., were sued in Georgia State Court by 423 plaintiffs for alleged personal injuries and property damage. Plaintiffs allege they were damaged by the discharge of hazardous waste from the companies' plants. In February 2000, the Georgia State Court dismissed Georgia-Pacific Corporation and AlliedSignal Inc., without prejudice. In September 2000, David T. Smith Jr., was dismissed by the Georgia State Court with prejudice. On July 18, 2000, the Company was served with a complaint filed in Cobb County State Court, Georgia. Based on the allegations contained in the complaint, this matter is very similar to the first suit, and is brought on behalf of approximately 700 plaintiffs for alleged personal injury and property damage arising from the discharge of hazardous waste from Hercules' plant. The Company has reached an agreement in principle to settle the claims of all but six of these plaintiffs for an amount which is confidential, but which is not material to the financial condition of the Company. HERCULES INC.: DE Court Grants Certification To Employee Lawsuit ---------------------------------------------------------------- The Superior Court of Delaware, New Castle County granted a motion for class certification of the suit filed against Hercules, Inc. and Thomas Gossage on behalf a class of approximately 130 present and former Hercules employees. The suit seeks payments under the "Integration Synergies Incentive Compensation Plan" a program put into place by the Company following its acquisition of BetzDearborn Inc. in October 1998. The goal of the plan was to provide certain financial incentives to specific employees who were deemed to have significant impact on the integration of BetzDearborn Inc. into the Company. The amount to be paid under the plan was tied to the successful achievement of "synergies," which were defined as the annualized reduction of expenses or improvement of profits realized as a result of the integration of BetzDearborn Inc. into the Company. The lawsuit essentially alleges that the payments made under the plan were not adequate and that the Company breached the terms of the plan. The lawsuit seeks payments of between $25 million and $30 million, although the Company does not believe that any payments are owed to the class members. In February 2003, plaintiffs agreed to dismiss Thomas Gossage from the lawsuit. Discovery is ongoing. The Company denies any liability to the plaintiffs and is vigorously defending this action. INTERPUBLIC GROUP: Asks NY Court To Dismiss Securities Lawsuit -------------------------------------------------------------- The Interpublic Group of Companies, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed against it and certain of its present and former directors on behalf of purchasers of Company stock from October 1997 to October 2002. Several suits were filed shortly after the Company's August 13, 2002 announcement regarding the restatement of its previously reported earnings for the periods January 1, 1997 through March 31, 2002. These actions were consolidated by the court and lead counsel appointed for all plaintiffs, on November 8, 2002. Specifically, the consolidated amended complaint alleges that the Company and certain of its present and former directors and officers allegedly made misleading statements to its shareholders between October 1997 and October 2002, including the alleged failure to disclose the existence of additional charges that would need to be expensed and the lack of adequate internal financial controls, which allegedly resulted in an overstatement of the Company's financial results during those periods. The consolidated amended complaint alleges that such false and misleading statements constitute violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The consolidated amended complaint also alleges violations of Sections 11 and 15 of the Securities Act of 1933 in connection with Interpublic's acquisition of True North Communications, Inc. (True North). No amount of damages is specified in the consolidated amended complaint. On February 6, 2003, defendants filed a motion to dismiss the complaint in its entirety. On February 28, 2003, plaintiffs filed their opposition to defendants' motion and, on March 14, 2003, defendants filed their reply to plaintiff's opposition to defendants' motion. The motion is currently pending. INTERPUBLIC GROUP: IL Federal Court Remands Suit To State Court --------------------------------------------------------------- The United States District Court for the Northern District of Illinois granted the request to remand two class actions filed against the Interpublic Group of Companies, Inc. to Illinois state court. The suits were filed against the Company and certain of its present and former directors and officers by a purported class of purchasers of Interpublic stock shortly after the Company's November 13, 2002 announcement regarding the restatement of its previously reported earnings for the periods January 1, 1997 through March 31, 2002. The purported classes consist of shareholders who acquired the Company's stock on or about June 25, 2001 in connection with the Company's acquisition of True North. These lawsuits allege that the Company and certain of its present and former directors and officers allegedly made misleading statements in connection with the filing of a registration statement on May 9, 2001 in which the Company issued 67,644,272 shares of its common stock for the purpose of acquiring True North, including the alleged failure to disclose the existence of additional charges that would need to be expensed and the lack of adequate internal financial controls, which allegedly resulted in an overstatement of the Company's financial results at that time. The suits allege that such misleading statements constitute violations of Sections 11 and 15 of the Securities Act of 1933. No amount of damages is specified in the suits. These actions were filed in the Circuit Court of Cook County, Illinois. On December 18, 2002, defendants removed these actions from Illinois state court to federal court. On January 10, 2003, defendants moved to transfer these two actions to the Southern District of New York. Plaintiffs moved to remand these actions. On April 15, 2003, the federal court granted plaintiffs' motions to remand these actions to Illinois state court and denied defendants' motion to transfer. The Company intends to move to dismiss or stay these actions at the appropriate time. IONICS INC.: Shareholders Launch Securities Fraud Lawsuit in MA --------------------------------------------------------------- Ionics, Inc., its Chief Executive Officer and Chief Financial Officer face a class action filed in the United States District Court for the District of Massachusetts in March 2003. Plaintiff alleges violations of the federal securities laws relating to the restatement of the Company's financial statements for the first and second quarters of 2002 announced in November 2002. The Company believes the allegations in the lawsuit are without merit and intends vigorously to defend the litigation. While the Company believes that the litigation will have no material adverse impact on its financial condition, results of operations or cash flows, the litigation process is inherently uncertain and the Company can make no assurances as to the ultimate outcome of this matter. NASH FINCH: Shareholders Launch Securities Fraud Lawsuits in MN --------------------------------------------------------------- The Nash Finch Company faces seven class actions filed in the United States District Court for the District of Minnesota on behalf of purchasers of the Company's common stock during the period from February 23, 2000 through February 4, 2003. The suit also names as defendants certain of its executive officers. The complaints generally allege that the defendants violated the Securities Exchange Act of 1934 by issuing false statements, including false financial results in which the Company included income from vendor promotions to which the Company was not entitled, so as to maintain favorable credit ratings on its debt. Three derivative actions have also been filed in state court in Minnesota by shareholders alleging that certain officers and directors violated duties to the Company to oversee and administer the Company's accounting. These actions are directly tied to the allegations in the federal securities suits. The Company believes that the lawsuits are without merit and intends to vigorously defend the actions. No damages have been specified. The Company is unable to evaluate the likelihood of prevailing in these cases at this early stage of the proceedings, but does not believe that the eventual outcome will have a material impact on its financial position or results of operations. PNC FINANCIAL: Asks PA Court To Dismiss Securities Fraud Lawsuit ---------------------------------------------------------------- PNC Financial Services Group, Inc. asked the United States District Court for the Western District of Pennsylvania to dismiss the consolidated securities suit filed on behalf of purchasers of the Company's common stock between July 19, 2001 and July 18, 2002. The suit also names as defendants the Company's Chairman and Chief Executive Officer, the former Chief Financial Officer, the Controller, and the Corporation's independent auditors for 2001. The consolidated class action complaint alleges violations of federal securities laws related to disclosures regarding the three 2001 transactions that gave rise to a financial statement restatement announced by the Company on January 29, 2002, and related matters. Management believes there are substantial defenses to this lawsuit and intends to defend it vigorously. The impact of the final disposition of this lawsuit cannot be assessed at this time. PREDICTIVE SYSTEMS: NY Court Dismisses in Part Securities Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed in part the consolidated securities class action filed against the Company, and certain of its directors and officers. The suit generally alleges that certain underwriters engaged in undisclosed and improper underwriting activities, namely the receipt of excessive brokerage commissions and customer agreements regarding post-offering purchases of stock in exchange for allocations of IPO shares. Plaintiffs also allege that various investment bank securities analysts issued false and misleading analyst reports. The complaint against the Company claims that the purported improper underwriting activities were not disclosed in the registration statements for our IPO and Secondary Offering and seeks unspecified damages on behalf of a purported class of persons who purchased the Company's securities or sold put options during the time period from October 27, 1999 to December 6, 2000. This is one of a number of cases challenging underwriting practices in the initial public offerings (IPOs) of more than 300 companies. These cases have been coordinated for pretrial proceedings as In re Initial Public Offering Securities Litigation, 21 MC 92 (SAS). On February 19, 2003, the court issued an Opinion and Order denying the Company's motion to dismiss certain of the claims in the complaint. The Company believes it has meritorious defenses against the allegations in the complaint and intends to defend the case vigorously. RAMBUS INC.: Stock Rises After Securities Fraud Suits Dismissal --------------------------------------------------------------- A shareholder lawsuit that consolidated multiple purported class actions filed against Rambus Inc. in 2001, recently was dismissed with prejudice by a California district court, Associated Press Newswires reports. The lawsuit stemmed from Rambus's involvement in a standard-setting body called JEDEC from 1991 to 1995. Shares of Rambus Inc. rose in trading after the shareholder lawsuit was dismissed, closing at $17.55, up $1.11, or 6.75 percent on the Nasdaq Stock Market. The lawsuit alleged that Rambus did not tell JEDEC that it held patents on DRAM, or dynamic random access memory, technology during the standards-setting discussions. Rambus has been embroiled in a series of lawsuits as it seeks royalty payments from the leading makers of DRAM technology. Rambus, which makes technology that speeds up memory chips, won an important victory in January, when a Virginia court of appeals overturned a jury finding that the company hid patent applications from JEDEC, as the body set standards for high- speed memory chips. Rambus still has to battle an antitrust case brought by the Federal Trade Commission (FTC). The trial began last month. The FTC's complaint also centers on allegations that Rambus did not tell JEDEC that it held patents on DRAM technology during standards-setting discussions. Analysts said the stock surge is unwarranted. "What is remarkable about (the recent rise in Rambus stock), is that this should be a relatively minor event, but is embraced so fervently by the market," said Michael Crawford, an analyst at B. Riley & Co. "If Rambus moves up like this on what most people consider a non-issue, what happens when and if it has a positive outcome from the FTC antitrust trial going on right now?" RARE MEDIUM: TX Court Refuses To Hear Appeal of Suit Dismissal -------------------------------------------------------------- Texas Appeals Court denied plaintiffs appeal of the dismissal of a class action filed against Rare Medium, Inc., Rare Medium Group, Inc., and Rare Medium Texas I, Inc. The suit, initially filed in the United States District Court for the Southern District of New York, asserted claims for breach of contract, tortuous interference with contractual relations, tortious interference with prospective advantage, and breach of implied obligation of good faith, arising out of the plaintiffs' alleged attempt to engage in transactions involving some or all of the approximately 1,200,000 shares of the Company's common stock (prior to the reverse stock split) that the plaintiffs obtained in the Company's acquisition of Big Hand, Inc. In October 2001, the court dismissed the case without prejudice. The plaintiffs filed an amended complaint on December 7, 2001 based on substantially the same alleged facts. The amended complaint asserts the following causes of action: (1) breach of contract; (2) tortious interference with contract; and, (3) tortious interference with prospective business advantage On June 27, 2002, the court dismissed the case with prejudice, which the plaintiffs appealed. The court of appeals heard oral arguments on the appeal on February 27, 2003. On March 14, 2003, the Court of Appeals denied the appeal in its entirety. Further, on April 11 2003, the Court of Appeals denied a request for rehearing. The Company intends to continue to vigorously contest any future actions with respect to this matter. RARE MEDIUM: NY Court Refuses To Dismiss Securities Fraud Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York refused to dismiss the consolidated suit against Rare Medium, Inc., certain of its subsidiaries and certain of their current and former officers and directors. Plaintiffs became owners of restricted Company stock when they sold the company that they owned to the Company. Plaintiffs assert the following four claims against defendants: (1) common-law fraud, (2) violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, (3) violation of the Michigan Securities Act and (4) breach of fiduciary duty These claims arise out of alleged representations by defendants to induce plaintiffs to enter into the transaction. The complaint seeks compensatory damages of approximately $5.6 million, exemplary and/or punitive damages in the same amount, as well as attorney fees. On January 25, 2002, the Company filed a motion to dismiss the complaint in its entirety, which the court granted, without prejudice. The plaintiffs filed an amended complaint asserting similar causes of action to those asserted in the original complaint. On September 12, 2002, the Company filed a motion to dismiss on behalf of itself and its current and former officers and directors. On March 7, 2003, the court denied the motion to dismiss. The Company intends to continue to dispute this matter vigorously. SEITEL INC.: Asks TX Court To Dismiss Securities Fraud Lawsuit -------------------------------------------------------------- Seitel, Inc. and certain of its former and current officers and directors asked the United States District Court for the Southern District of Texas to dismiss the consolidated securities class action against them and Company auditor Ernst & Young. The suit alleges that during a proposed class period of May 5, 2000 through April 1, 2002, the defendants violated sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by overstating revenues in violation of generally accepted accounting principles. The plaintiffs seek an unspecified amount of actual and exemplary damages, costs of court, pre- and post-judgment interest and attorneys' and experts' fees. The Company intends to vigorously defend this consolidated suit. No discovery has been conducted. SEITEL INC.: Plaintiffs Appeal Claims Dismissal in Trespass Suit ---------------------------------------------------------------- Plaintiffs appeal the 229th District Court of Starr County, Texas' decision dismissing claims in the class action filed against Seitel, Inc., its subsidiary, Seitel Data, Ltd. and other defendants for geophysical trespass. The plaintiffs allege that certain defendants conducted unauthorized 3-D seismic exploration of the mineral interests, and sold the information obtained to other defendants. The plaintiffs seek an unspecified amount of damages. All of the defendants have obtained summary judgments dismissing the plaintiffs' claims, and the case is now on appeal before the San Antonio Court of Appeals. The Company intends to vigorously represent its interests in this appeal. SYNCOR INTERNATIONAL: Labels Securities Litigation Without Merit ---------------------------------------------------------------- Syncor International Corporation and certain of its officers and directors face eleven purported class actions, asserting claims under the federal securities laws, in the United States District Court for the Central District of California. The suits purport to be brought on behalf of all purchasers of Company shares during various periods, beginning as early as March 30, 2000, and ending as late as November 5, 2002. The suits uniformly allege, among other things, that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act, by issuing a series of press releases and public filings disclosing significant sales growth in the Company's international business, but omitting mention of certain allegedly improper payments to its foreign customers, thereby artificially inflating the price of Company shares. The court has appointed the suits' lead plaintiff and a consolidated complaint filing is expected soon. On November 14, 2002, two additional actions were filed by individual stockholders of the Company in the Court of Chancery of the State of Delaware against seven of the Company's nine directors. The complaints in each of the Delaware actions were identical and alleged that the director defendants breached certain fiduciary duties to the Company by failing to maintain adequate controls, practices and procedures to ensure that Syncor's employees and representatives did not engage in improper and unlawful conduct. Both complaints asserted a single derivative claim, for and on behalf of the Company, seeking to recover all of the costs and expenses that the Company incurred as a result of the allegedly improper payments and a single purported class action claim seeking to recover damages on behalf of all holders of the Company shares in the amount of any losses sustained if consideration received in the merger by stockholders was reduced. On November 22, 2002, the plaintiff in one of the two Delaware actions filed an amended complaint adding as defendants the Company, its subsidiary Mudhen Merger Corporation and the remaining two Syncor directors, who are hereafter included in the term "director defendants." On November 18, 2002, two additional actions were filed by individual stockholders of Syncor in the Superior Court of California for the County of Los Angeles against the director defendants. The complaints in the California actions allege that the director defendants breached certain fiduciary duties to Syncor by failing to maintain adequate controls, practices and procedures to ensure that Syncor's employees and representatives did not engage in improper and unlawful conduct. Both complaints asserted a single derivative claim, for and on behalf of Syncor, seeking to recover costs and expenses that Syncor incurred as a result of the allegedly improper payments. An amended complaint was filed on December 6, 2002 in one of these cases, purporting to allege direct claims on behalf of a class of shareholders. The defendants' motion for a stay of these cases pending the resolution of the Delaware actions was granted on April 30, 2003. The Company recently learned that a proposed class action was filed on April 8, 2003, against it and certain Company officers and employees by a purported participant in the Syncor Employees' Savings and Stock Ownership Plan. The suit alleges that the defendants breached certain fiduciary duties owed under the Employee Retirement Income Security Act (ERISA). All these suits are in its early stages and it is impossible to predict the outcome of these proceedings or their impact on the Company. However, the Company currently does not believe that the impact of these actions will have a material adverse effect on the Company's financial position, liquidity or results of operations. TELAXIS COMMUNICATIONS: NY Court Dismisses in Part Stock Lawsuit ---------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed in part the consolidated securities class action filed against Telaxis Communications Corporation, the underwriters in its initial public offering and certain of its officers and directors. The amended complaint alleges, among other things, violations of the registration and antifraud provisions of the federal securities laws due to alleged statements in and omissions from the Company's initial public offering registration statement concerning the underwriters' alleged activities in connection with the public offering. The amended complaint seeks, among other things, unspecified damages and costs associated with the litigation. These lawsuits against the Company have been assigned along with approximately 1,000 other lawsuits making substantially similar allegations against approximately 300 other publicly-traded companies and their public offering underwriters to a single federal judge in the US District Court for the Southern District of New York for consolidated pre-trial purposes. On July 15, 2002, the Company, together with the other issuers named as defendants in these coordinated proceedings, filed a collective motion to dismiss the consolidated amended suit on various legal grounds common to all or most of the issuer defendants. In October 2002, all claims against the Company's directors and officers who had been parties to these lawsuits were dismissed without prejudice. In February 2003, the judge granted in part and denied in part the motion to dismiss the consolidated amended suit. The fraud claims were dismissed with prejudice, but the non-fraud claims were not. The Company denies any liability and intends to vigorously defend the allegations against it. WASHINGTON: Apple Commission's Sauer To Resign Under Settlement --------------------------------------------------------------- Welcome Sauer, president of the much-altered Washington State Apple Commission, will step down on July 31. His skills, for which he is paid $176,000 a year, will not be needed once a federal judge approves a plan to operate the commission on a dramatically reduced basis, Associated Press Newswires reports. Mr. Sauer has been president of the 66-year-old Commission since 2000. Under a proposed federal court settlement of the class action engineered by Mr. Sauer, the state's apple growers would pay 3.5 cents per box of 42-pound box of apples to support industry research, lobbying and other missions that do not involve promotion or advertising. The apple commission had initiated the lawsuit in 2001, even selecting two apple growers to serve as defendants and agreeing to pay their lawyers' bills, in the hope of affirming the legality of its 25-cent assessment per box of fresh apples. However, the lawsuit exposed the industry's house as divided when three large Yakima fruit warehouses intervened along with a group of organic apple growers, who were represented by a California lawyer with a national anti-assessment reputation. The end result was that the March 31 ruling took the wind out of the commission's 66-year-old sails and millions of dollars out of its budget. Federal Judge Edward Shea in Richland, Washington, ruled unconstitutional the Commission' practice of levying a 25-cent fee on growers for every 46-pound box of apples which, in turn the Commission used to support its promotion of Washington state apples. This was a result far different than what Mr. Sauer expected when he steered his suit into court; he expected an affirmation of the Commission's right to collect the higher assessments. However, Mr. Sauer predicts a number of apple-marketing alternatives will sprout fairly quickly. "I am sure that this industry knows how to pull together and develop an approach to marketing which will allow Washington apples to continue to be known and promoted as the best apples on Earth," Mr. Sauer said. New Securities Fraud Cases CORNERSTONE PROPANE: Schiffrin & Barroway Lodges Securities Suit ---------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action filed in the United States District Court for the Northern District of California on behalf of all purchasers of CornerStone Propane Partners LP (Other OTC:CNPP.PK) securities from November 2, 1999 through February 11, 2003, inclusive. The complaint charges CornerStone and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Throughout the class period, defendants issued a series of material misrepresentations to the market between November 2, 1999, and February 11, 2003, which served to artificially inflate the price of CornerStone securities. More specifically, the complaint alleges that during the class period, the Partnership was faced with the crisis of having to renegotiate its capital credit lending agreements, which were set to expire on November 30, 2001. Faced with this situation of needing to obtain capital credit or face liquidation, the Partnership issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Partnership had materially overstated its earnings before interest, taxes, depreciation and amortization (EBITDA), net income and earnings per unit; (2) that the Partnership lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Partnership; and (3) that as a result, the value of the Partnership's EBITDA, net income and financial results were materially overstated at all relevant times. On February 11, 2003, the Partnership revealed in its 8-K filed with SEC that it had to restate its financial results for fiscal years 2000 and 2001 due to the Partnership's knowledge of known errors in reporting its financial results for fiscal years 2000 and 2001. In response to this announcement, the price of CornerStone securities declined precipitously. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E- mail: info@sbclasslaw.com ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. 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