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C L A S S A C T I O N R E P O R T E R
Wednesday, June 4, 2003, Vol. 5, No. 109
Headlines
ACE CASH: Agrees To Settle TX Fraud Suits Over Short Term Loans
AMERICAN AIRLINES: Ex-TWA Pilots Sue For Jobs, Ask for Seniority
AMERICREDIT CORPORATION: Plaintiffs File Consolidated Suit in TX
ARKANSAS: Supreme Court Allows Suit Over Legal Fees To Proceed
ARVIDA JMB: Discovery in Homeowner Suit To End August 2003 in FL
BLOCKBUSTER INC.: Plaintiffs File Consolidated Stock Suit in TX
BONZI SOFTWARE: Agrees To Change Deceptive Ad Banners, Messages
CALIFORNIA: Los Angeles Files Suit V. Housing Project Clean-up
COLLINS & AIKMAN: Shareholders File Securities Fraud Suits in MI
CYLINK CORPORATION: Agrees To Settle Securities Suit in N.D. CA
CYTODYNE TECHNOLOGIES: Allegedly Misled Customers, Judge Asserts
DQE INC.: Pre-trial Discovery Proceeds in Securities Fraud Suit
EDUCATORS MUTUAL: Reaches $630T Settlement For Consumer Lawsuit
FIDELITY NATIONAL: Shareholders Launch Suit V. ANFI Merger in CA
DUPONT: Judge Refuses To Recuse Himself Over Possible Conflict
FIDELITY NATIONAL: Consumers Launch Antitrust Suits in CA Court
HALLIBURTON CO.: Settles Shareholder Fraud Suits For $6 Million
HOMEAMERICAN CREDIT: Appeal of IL Consumer Suit Dismissal Denied
ILLINOIS: Aurora Residents Commence Lawsuit Over Mold Conditions
ILLINOIS: Residents Sue Firms For Pollution, Illnesses, Deaths
INDIANA: Civil Group Sues County Over Dangerous Jail Conditions
LEASECOMM CORPORATION: CA Court Dismisses Unfair Practices Suit
LEASECOMM CORPORATION: Faces Lawsuit Over Lease Agreements in MA
LEASECOMM CORPORATION: Consumers Sue Over Unfair Trade Practices
METRIC PARTNERS: Status Conference Reset For February 2004 in CA
MICROFINANCIAL INC.: Appeals AL Court's Refusal To Dismiss Suit
OAK TECHNOLOGY: Court Upholds Dismissal of Securities Fraud Suit
OKLAHOMA: Lawyers For Black Officers Want $3M In Race Bias Suit
PHILADELPHIA: Mayor Ordered to Enforce Council Trash Ordinance
PINNACLE SYSTEMS: No Appeal Filed, Suit Dismissal Deemed Final
RESOURCE AMERICA: Faces Lawsuit Over Natural Gas Royalties in NY
RITE AID: Judge Delays Ruling On Pact, Lawyers' Request For Fees
SOUTH CAROLINA: Myrtle Beach Did Not Break Laws For Tax-Raising
TEXAS: Judge Dismisses Suits Alleging Sexual Misconduct In Jail
TEXAS: Medical Malpractice Awards Limited To $750,000 Per Victim
THERAGENICS CORPORATION: Discovery Complete in GA Stock Lawsuit
TYCO INTERNATIONAL: Asks NH Court To Dismiss Securities Lawsuit
TYCO INTERNATIONAL: NJ Files Consolidated Securities Suit in NH
TYCO INTERNATIONAL: Investors Sue Over Sensormatic Acquisition
TYCO INTERNATIONAL: Plaintiffs Seek Remand of Suits To FL Court
TYCO INTERNATIONAL: Asks Court To Dismiss ERISA Violations Suit
UNITED KINGDOM: Lost Records Destroy Britons' Chance For Damages
WASHINGTON: Foundation Sued After Leaving Anti-Poverty Venture
WESTWOOD GROUP: Stockholder Commences Suit V. Stock Split in DE
*Genetic Information, Another Source of Possible Discrimination?
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
ALLOU HEALTHCARE: Rabin Murray Lodges Securities Suit in E.D. NY
CORNERSTONE PROPANE: Cauley Geller Lodges Securities Suit in CA
EUNIVERSE INC.: Milberg Weiss Lodges Securities Suit in C.D. CA
EUNIVERSE INC.: Glancy & Binkow Files Securities Suit in C.D. CA
SARA LEE: Ademi & O'Reilly Lodges Securities Lawsuit in N.D. IL
*********
ACE CASH: Agrees To Settle TX Fraud Suits Over Short Term Loans
---------------------------------------------------------------
Ace Cash Express, Inc. entered into an agreement to settle and
terminate the nationwide class action on behalf of all borrowers
of short-term loans made by Goleta National Bank (Goleta) at the
Company's stores in the United States District Court for the
Northern District of Texas.
If approved by the court, the settlement agreement will result
in the release of substantially all of the claims of former
borrowers against the Company (and Goleta) not only in this
lawsuit, but also in four other similar lawsuits. Court
approval of the settlement agreement will also effectively
settle and terminate the Hale lawsuit pending against the
Company, although, unlike the plaintiffs' counsel in the four
other suits, the plaintiff's counsel in the Hale lawsuit is
neither a party to nor supporting the settlement agreement.
In the settlement agreement, the Company agreed:
(1) To pay at least $2.5 million as refunds to former
borrowers who have repaid all of their Bank Loans and
who timely submit claims for refunds or, if the refunds
and certain other amounts paid by the Company total
less than $2.5 million, the amount of the shortfall to
certain consumer-advocacy organizations. The refund
payable by the Company to each eligible former borrower
who files a refund claim will be equal to approximately
5 percent of the interest or finance charges paid by
that borrower, but not less than $7.50 or more than
$45.00;
(2) to pay up to $2.1 million as attorneys' fees to the
plaintiffs' counsel in the four other lawsuits;
(2) to pay notice and other administrative costs in
connection with the settlement;
(3) to discontinue, by July 1, 2003, any further efforts to
collect any amounts due under any remaining unpaid Bank
Loans, which will be forgiven and canceled by Goleta.
Because Bank Loans were not offered on or after January
1, 2003, this required date to cease collection
activities nearly corresponds to the Company's policy
to charge off its participation interests in Bank Loans
that are 180 days past due;
(4) To ensure that any of the Company's short-term consumer
loans or deferred-deposit transactions made under state
law during the two years ending December 31, 2004 are
made only in compliance with any applicable state
payday-lending laws; except that the Company may rely
on federal-preemption rules in connection with acting
as marketing and servicing agent for the Republic Bank
deferred-deposit loans made at or through the Company's
stores in Arkansas, Pennsylvania, and Texas;
For the two years following the date on which the Company makes
the settlement payments (which must be within 60 days after
final court approval of the settlement and the lapse of any
appeal period), the Company agreed to make specified disclosures
to borrowers of the Company's payday loans regarding the expense
of such loans and regarding certain collection-related expenses
to which borrowers might become subject; and abide by specified
restrictions on activities to collect its payday loans through
Automated Clearinghouse (ACH) debits and on credit reporting
regarding borrowers of its payday loans.
Within 45 days after preliminary court approval of the
settlement and at least 60 days before the scheduled hearing
regarding final court approval of the settlement, the Company
agreed to publish in a newspaper of national circulation, mail
to all former borrowers of Bank Loans, and post in each of the
Company's owned stores, notices (in specified forms) that
announce the settlement, the potential benefits of the
settlement to the former borrowers, and the procedure for
borrowers' refund claims and maintain a toll-free telephone
number to facilitate communications with any former borrower who
wishes to file a refund claim.
The settlement agreement contemplates that the settlement
notices will be published, mailed, and posted, and the refund-
claims procedures will begin, after preliminary approval of the
settlement by the court. All of the parties to the settlement
agreement committed to seek that preliminary approval as soon as
practicable. The settlement agreement will also be subject to
subsequent final court approval, after a hearing to be conducted
after implementation of the notice and claims procedures. The
Company will be obligated to make the settlement payments within
60 days, and to perform its other covenants, after final
approval by the court and the lapse of any appeal period. The
Company cannot predict when, or even if, court approval of the
settlement agreement will be received.
The settlement agreement will become ineffective, and be
terminated, if the trial court does not grant preliminary or
final approval of the settlement or if, on any appeal, that
preliminary or final approval is either reversed or modified in
a manner unsatisfactory to the parties. The Company may also
withdraw from the settlement agreement and terminate it if any
of the lawsuits is not dismissed upon final approval of the
settlement or if more than 1,000 eligible former borrowers of
Bank Loans elect to opt out or exclude themselves from the
settlement.
AMERICAN AIRLINES: Ex-TWA Pilots Sue For Jobs, Ask for Seniority
----------------------------------------------------------------
When American Airlines bought TWA two years ago, it got 2,300
pilots in the deal, but now only 565 remain with the bigger
airline, because they have been among the first to be laid off
as American cuts jobs, since most of them were placed at the
bottom of seniority lists when the merger took place, The Record
(Bergen County, NJ) reports. Therefore, a group of the former
pilots is asking a federal judge to order the airline to rehire
more than 1,500 of them.
The case, which began in Texas more than a year ago, is now
being argued in US District Court in Camden, New Jersey. The
group of pilots named American Airlines, TWA and two pilots
unions in its lawsuit. The former TWA pilots say that no pilot
who was with American before the merger has been laid off so
far, although that is about to change. This month, American
announced it was cutting 7,000 jobs, including 2,200 pilots, in
an effort to remain solvent.
The former TWA pilots describe in their lawsuit occurrences that
should be looked at closely. Before American bought TWA in
2001, the Air Line Pilots Association agreed to allow its
employer to go into bankruptcy and waive a contract provision
that would have required an arbiter to oversee the integration
of the seniority list for the two companies. However, Bud
Bensel, the lead complainant in the class action lawsuit, said
there was an understanding that American would make sure its new
pilots were treated fairly.
The lawsuit alleges that fairness process never happened, in
part because the Air Line Pilots Association, which represented
the TWA pilots, was in secret negotiations to merge with the
Allied Pilots Association, which represented American pilots.
The merger never went through.
AMERICREDIT CORPORATION: Plaintiffs File Consolidated Suit in TX
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Americredit Corporation and certain of the Company's officers
and directors in the United States District Court in Fort Worth,
Texas.
The suit alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The
consolidated lawsuit claims that deferments were improperly
granted by the Company to avoid delinquency triggers in
securitization transactions and enhance cash flow, thereby
causing the Company to misrepresent its financial performance
throughout the alleged class period.
The Company believes that its granting of deferments, which is a
common practice within the auto finance industry, complied at
all times with the covenants contained in its securitization and
warehouse financing documents, and that its deferment activities
were properly disclosed to all constituents, including
shareholders, asset-backed investors, creditors and credit
enhancement providers.
In the opinion of management, the consolidated lawsuit is
without merit and the Company intends to vigorously defend
against it.
Additionally, on February 27, 2003, the Company was served with
a shareholder's derivative action filed in the United States
District Court for the Northern District of Texas, Fort Worth
Division, entitled Mildred Rosenthal, derivatively and on behalf
of nominal defendant AmeriCredit Corp. v. Clifton H. Morris,
Jr., et al.
This lawsuit alleges that certain officers and directors of the
Company breached their respective fiduciary duties by causing
the Company to make improper deferments, violated federal and
state securities laws and issued misleading financial
statements. The substantive allegations are essentially the
same as those in the above-referenced class actions.
The Company believes that it has taken prudent steps to address
the litigation risks associated with its business activities.
In the opinion of management, the resolution of the litigation
pending or threatened against the Company, including the
proceedings specifically described in this section, will not
have a material effect on the Company's financial condition,
results of operations or cash flows.
ARKANSAS: Supreme Court Allows Suit Over Legal Fees To Proceed
--------------------------------------------------------------
The Arkansas Supreme Court dismissed an appeal from West Helena
city officials who wanted to void the class action status
granted a lawsuit filed against them, the Associated Press
Newswires reports.
A West Helena taxpayer contends that Mayor John Weaver and the
city council wrongly directed the city to pay Mayor Weaver's
legal fees in his defense against a council member who alleges
he violated her civil rights. The Supreme Court said the
question was not presented properly, because, under the
constitution, the complaint of taxpayer Connie Sullivan, was
automatically a class action.
"An illegal-exaction suit is a constitutionally created class of
taxpayers," the high court's justices said. Therefore, they
said, the appeal was not the proper way to challenge it.
The dispute started in 1999, when the council had a heated
discussion, particularly between Mayor Weaver and council member
Betty Jo Dial, relating to whether to start its own sanitation
department. After the meeting Mayor Weaver executed a warrant
seeking Ms. Dial's arrest on charges of terrorist-like
threatening, harassment and disorderly conduct. A prosecutor
later dropped the charges.
On October 2, 2000, Ms. Dial sued Mayor Weaver in federal court,
alleging he lied in the affidavit seeking her arrest, and
alleging as well that he violated her civil rights. Ms. Dial
won her lawsuit, and before jurors discussed the damages, Ms.
Dial agreed to settle the case for $50,000.
In November 2001, the city council refused to pay the settlement
money of $50,000, and Ms. Dial filed a new complaint to enforce
the settlement. In January 2002, Ms. Sullivan filed her lawsuit
against the city, the mayor and the council, saying they
improperly paid Mayor Weaver's $17,180.52 in legal fees, and
asked that Mayor Weaver repay the money.
A Phillips County judge certified the case as an illegal-
exaction claim, giving it class action status. Mayor Weaver and
the council appealed, saying the judge did not explain in detail
why he gave the case class action status. The justices of the
Supreme Court considered the facts of the appeal brought before
them.
"As a threshold matter, we must determine whether this appeal is
properly before us," Justice Annabelle Clinton Imber wrote for
the court. "We conclude that it is not."
" . (A)n illegal-exaction claim is, by its nature, in the form
of a class action that arises as a matter of law," Justice Imber
wrote. "All similarly situated taxpayers are automatically
members of the class, and are bound by the judgment of the
illegal-exaction lawsuit."
ARVIDA JMB: Discovery in Homeowner Suit To End August 2003 in FL
----------------------------------------------------------------
Discovery in the class action filed against Arvida JMB Partners
LP is expected to finish by August 15,2003 in the Circuit Court
of the Eleventh Judicial Circuit in and for Dade County,
Florida. Trial date is to be set after.
Plaintiffs Lakes of the Meadow Village Homes, Condominium Nos.
One, Two, Three, Four, Five, Six, Seven, Eight and Nine
Maintenance Associates, Inc. filed the suit against the Company
and Walt Disney World Company, seeking unspecified damages,
attorneys' fees and costs, rescission of specified releases, and
all other relief that plaintiffs may be entitled to at equity or
at law on behalf of the 460 building units they allegedly
represent for, among other things, alleged damages discovered in
the course of making Hurricane Andrew repairs.
Plaintiffs have alleged that Walt Disney World Company is
responsible for liabilities that may arise in connection with
approximately 80% of the buildings at the Lakes of the Meadow
Village Homes and that the Partnership is potentially liable for
the approximately 20% remaining amount of the buildings.
In the three count amended complaint, plaintiffs allege breach
of building codes and breach of implied warranties. In
addition, plaintiffs seek rescission and cancellation of various
general releases obtained by the Partnership allegedly in the
course of the turnover of the Community to the residents.
Plaintiffs have indicated that they may seek to hold the
Partnership responsible for the entire amount of alleged damages
owing as a result of the alleged deficiencies existing
throughout the entire development.
The Partnership has tendered this matter to The Walt Disney
Company pursuant to the Partnership's indemnification rights and
has filed a third-party complaint against it pursuant to the
Partnership's rights of contractual indemnity. The Partnership
has also answered the amended complaint and has filed a cross-
claim against Disney's affiliate, Walt Disney World Company, for
common law indemnity and contribution.
BLOCKBUSTER INC.: Plaintiffs File Consolidated Stock Suit in TX
---------------------------------------------------------------
The two remaining securities class actions filed against
Blockbuster, Inc. have been consolidated in the United States
District Court for the Northern District of Texas.
During February and March 2003, three putative class actions
were filed the Company in the United States District Court for
the Northern District of Texas claiming violations of the
Securities Exchange Act of 1934 and seeking a class
determination for purchasers of Blockbuster stock for the
approximately eight-month period between April and December
2002. Certain of its directors and officers were also named as
defendants. In April 2003, one of the plaintiffs dismissed her
case.
A shareholder derivative action arising from substantially
similar operative facts was filed in February 2003 in the same
court. During March 2003 and April 2003, two shareholder
derivative actions were filed in the 160th Judicial District
Court for Dallas County, Texas claiming breach of fiduciary
duties for an approximately three-week period from late April
through mid-May 2002 and from April 2002 to the present,
respectively.
These actions named certain Blockbuster officers and directors,
some of whom are directors and/or executive officers of the
Company, as individual defendants, and Blockbuster as a nominal
defendant.
The Company believes the plaintiffs' positions in all of these
actions are without merit and intends to vigorously defend these
matters.
BONZI SOFTWARE: Agrees To Change Deceptive Ad Banners, Messages
---------------------------------------------------------------
Bonzi Software Inc. of San Luis Obispo, California, has agreed
to place the word "advertisement" amongst its Internet popup
banners that impersonate computer error messages, says attorney
Darrel Scott of law firm Lukins & Annis in Spokane, who filed
the action against Bonzi, alleging the company's popup
advertising was deceptive, the Associate Press Newswires
reports.
Mr. Scott represented people from eight states who complained
about Bonzi's popup ads. Bonzi is among the world's most
prolific issuers of Internet advertising banners. Its Web site
has been ranked as one of the most frequently visited.
The lawsuit contended that Bonzi deceptively "commandeered" tens
of millions of computer users to its commercial Web site.
Viewers who clicked an "OK" button, thinking it would make the
dialogue box disappear, were instead sent to a commercial Web
site promoting Bonzi software for preventing Internet intrusions
or to speed up Internet connections.
In the agreement approved by Spokane County Superior Court Judge
Jerry Leveque, Bonzi agreed to place the word "advertisement"
prominently in its advertising banners and dialogue boxes.
Bonzi also agreed to discontinue using "fake user interfaces"
for minimizing, maximizing or closing boxes that do not perform
their intended function.
The settlement also calls for Bonzi to stop representing that
the user's computer is "broadcasting" its IP address, a warning
that gives users the false impression that their computers were
indiscriminately disseminating the computer's address to the
Internet, said Attorney Darrel Scot. He said he knew there were
a lot of people out there who were angry, and that he was "happy
with the settlement. It sets a benchmark for the industry."
Bonzi agreed to pay attorney fees and court costs of about
$170,000. The lawsuit was settled before the court could decide
whether it was a class action. Had the judge had the
opportunity to declare the case a class action, said Mr. Scott,
hundreds of thousands of computer users who were tricked by the
advertising banners could have sought compensation. The law
firm's Web site received more than 1.7 million "hits" and
thousands of e-mails from computer users angry about the
deceptive banners, said Mr. Scott.
CALIFORNIA: Los Angeles Files Suit V. Housing Project Clean-up
--------------------------------------------------------------
The land near downtown Los Angeles was once ruled by oil, but
change came and the land turned to serve yet another need --
housing, the Los Angeles Times reports. Families came; children
played in the dirt; and some of the families planted vegetables
in the earth. Nobody thought much about the history of the
land.
William Mead Homes has 415 units and is home to 1,500 people.
Now the land's past and its evolution from oil concern to city
housing project is the subject of a number of lawsuits. The
Housing Authority of the City of Los Angeles filed the latest
suit last month, as the action against Chevron Texaco
Corporation seeks to recover more than $4 spent in the cleanup
of contaminated soil at the site.
The lawsuit was filed in Los Angeles Superior Court, and accuses
a predecessor of Chevron Texaco of causing the contamination by
failing to properly maintain control and manage the land. The
deadline for the city to file a suit against Chevron Texaco was
approaching, and when company representatives did not sign an
agreement that would have extended the statute of limitations or
enter settlement negotiations, "that left us no choice but to
actually file and serve the action," said Assistant City
Attorney, Dov Lesel.
The lawsuit centers on the early 20th century use of the land by
a company known as Amalgamated. The firm used a portion of the
property as a storage facility for crude oil: Four 35,000-
barrel tanks sat there, according to the city's lawsuit. By
1926, the storage facility stopped operations. Amalgamated
became Chevron Texaco.
This was the heyday of the oil boom in L.A., said William Davis,
a Housing Authority Administrator. In 1939, 1940, the Housing
Authority acquired the land that had been owned by Amalgamated
and later Chevron Texaco. In 1942, construction was completed
and the development was named for William Mead, a real estate
developer and early advocate of affordable in Los Angeles.
Decades later, in 1994, a World War II veteran, who as a child
had been a resident of William Mead, wrote a letter to the
Housing Authority, sharing his memories about the land's past
use and told of a high rate of cancer among relatives and
friends. Those who were stricken had all played together on
the baseball field at William Mead.
The letter sparked an inquiry, and in 1995, the Housing
Authority conducted an investigation that revealed the presence
of potentially carcinogenic and hazardous substances throughout
the site, the lawsuit alleges. The Housing Authority
acknowledges that the substances date back to the land's earlier
use by Amalgamatd and possibly two other companies.
The state's Department of Toxic Substances Control, which
oversees remediation efforts, monitored the site as workers
removed nearly 46,000 tons of soil and replaced it with clean
dirt. The Housing Authority relocated families in 114 units up
to three months as work proceeded.
The Housing Authority paid for the cleanup and now seeks to
recoup its costs in the lawsuit against Chevron Texaco. "It was
a very intense, very expensive process," said William Davis, the
Housing Authority Administrator. Further, the site is at the
root of at least three class actions against the Corporation and
the Housing Authority over the exposure to carcinogenic
materials.
COLLINS & AIKMAN: Shareholders File Securities Fraud Suits in MI
----------------------------------------------------------------
Collins & Aikman Corporation faces several securities class
actions filed in the United States District Court for the
Eastern District of Michigan. The suits also name as defendants
Heartland Industrial Partners, LP and ten senior officers
and/or directors of the Company.
The suits generally allege violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, on behalf of purchasers of the common
stock of the Company between August7, 2001 and August2, 2002.
The Company believes that the claims are without merit and
intends to vigorously defend the lawsuits. The Company does not
believe that the suit will have a material impact on the
Company's financial condition, results of operations or cash
flow.
CYLINK CORPORATION: Agrees To Settle Securities Suit in N.D. CA
---------------------------------------------------------------
Cylink Corporation agreed to settle the consolidated amended
securities class action filed against it and certain of its
current and former directors and officers in the United States
District Court in the Northern District of California.
The suit alleges, among other things, that the Company's
previously issued financial statements were materially false and
misleading and that the defendants knew or should have known
that these financial statements caused the Company's common
stock price to rise artificially. The suit alleges violations
of Section 10(b) of the Securities Exchange Act of 1934, as
amended, and SEC Rule 10b-5 promulgated thereunder, and Section
20 of the Exchange Act.
After lengthy settlement discussions, the Company entered into
an agreement to settle the suit for $6.2 million and the related
legal expense of $0.2 million. The total cost of the settlement
of $6.4 million is to be paid entirely from insurance proceeds.
The settlement agreement is subject to approval by the court.
The Company believes that the court will approve the final
settlement.
CYTODYNE TECHNOLOGIES: Allegedly Misled Customers, Judge Asserts
----------------------------------------------------------------
Superior Court Judge Ronald Styn ruled that Cytodyne
Technologies, the maker of the popular diet pill, Xenadrine RFA-
1, misled consumers by making exaggerated and false claims about
the product's safety and effectiveness, Dow Jones International
News reports. Cytodyne was ordered to pay $12.5 million to
California consumers for the company's claims about the pill.
Judge Styn's ruling ended a seven-week trial of a class action
brought by Jason Park, a San Diego resident who purchased
Xenadrine in 2001. Mr. Park's attorney, Todd Macaluso, said it
was unclear how many people would have a stake in the class
action, but called the ruling "a victory for the consumers in
California, and, by implication, throughout the country."
Judge Styn said Cytodyne's before-and-after testimonies of
Xenadrine's benefits misled consumers by exaggerating individual
results. Judge Styn also took issue with advertisements that
boasted of the pill's "amazing fat-burning/muscle-sparing
effects."
The Company denied the charges and said it would appeal.
Critics claim that Xenadrine includes caffeine and ephedra, an
herbal stimulant that causes heart-related problems by
increasing blood pressure in some users. Xenadrine has been
linked to the February 17 heatstroke death of Baltimore Orioles
pitcher Steve Bechler.
Cytodyne has stopped selling the ephedra-based diet pills and is
selling an ephedra-free product.
DQE INC.: Pre-trial Discovery Proceeds in Securities Fraud Suit
---------------------------------------------------------------
Pre-trial discovery has commenced in the consolidated securities
class action filed against DQE, Inc. and David Marshall, former
chairman, chief executive officer and president, in the United
States District Court for the Western District of Pennsylvania.
The complaint alleges violations of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, and Section 12(a)(2) of the Securities Act of 1933.
The complaint also alleges controlling person liability under
Section 20(a) of the Exchange Act and Section 15 of the
Securities Act.
The complaint alleges that between December 6, 2000 and April
30, 2001, the defendants issued a number of materially false and
misleading statements concerning investments made by the
Company's subsidiary, DQE Enterprises, and the impact that these
investments would have on our current and future financial
results.
More particularly, the complaint alleges that the Company and
Mr. Marshall stated their expectation that certain companies in
which DQE Enterprises had invested would undertake initial
public offerings of their shares, with the result that its
earnings would be positively impacted by the public market
valuation of DQE Enterprises' interests in these companies, but
failed to disclose allegedly adverse facts that made the
possibility of successful public offerings of the securities of
these companies unlikely.
The complaint seeks an award of unspecified compensatory
damages, and an order permitting class members who purchased DQE
shares through a dividend reinvestment plan to rescind those
purchases, pre- and post-judgment interest, attorneys' fees and
expenses of litigation and unspecified equitable and injunctive
relief.
On December 12, 2002, the lead plaintiffs asked the court to
certify the class action. Since December 2002 the Company and
the plaintiffs have been in pre-trial discovery. The court has
directed that this phase be concluded by September 30, 2003.
Although the Company cannot predict the ultimate outcome of this
case or estimate the range of any potential loss that may be
incurred in the litigation, it believes that the lawsuit is
without merit, strenuously denies all of the plaintiffs'
allegations of wrongdoing and believes it has meritorious
defenses to the plaintiffs' claims.
EDUCATORS MUTUAL: Reaches $630T Settlement For Consumer Lawsuit
---------------------------------------------------------------
Educators Mutual Life Insurance Co. reached a proposed $630,000
settlement of a class action brought by about 3,000
policyholders who allege the company underpaid their anesthesia
bills, the Lancaster New Era/Intelligencer Journal reports.
US District Court Judge Anita B. Brody in Philadelphia has given
preliminary approval to the settlement. A hearing to determine
whether to give the pact final approval will be held before
Judge Brody on October 3.
The lawsuit alleges that, since September 1998, Educators paid
less for anesthesia bills than the "reasonable and customary"
amount it promised to pay under its medical-insurance policies.
One of the lead plaintiffs alleges, for instance, that Educators
underpaid his anesthesia bill for a surgical procedure by $885;
another lead plaintiff alleges her bill for anesthesia, also for
a surgical procedure, was underpaid by $332.
The lawsuit sought a complete recovery of the underpayments for
the estimated 3,000 Educators policyholders. Complete recovery
of the coverage promised would amount to $745,000, said attorney
Michele Eagan of Roda & Nast, the law firm representing the
policyholders. The proposed settlement would equal 85 percent
of that amount.
FIDELITY NATIONAL: Shareholders Launch Suit V. ANFI Merger in CA
----------------------------------------------------------------
Fidelity National Financial, Inc. faces two class actions filed
in the Orange County Superior Court in California, relating to
its planned merger with ANFI, Inc. The suit also names as
defendants the members of the Board of Directors of ANFI.
The suit seeks class action status and alleges breach of
fiduciary duty in connection with the approval of the merger by
ANFI, Inc.'s directors, one of whom is also a director of
the Company.
The Company believes the lawsuits are without merit and intends
to vigorously oppose the suit.
DUPONT: Judge Refuses To Recuse Himself Over Possible Conflict
--------------------------------------------------------------
Wood County Circuit Judge George W. Hill has refused to recuse
himself upon a motion by DuPont that states because he lives in
the allegedly contaminated area, he has a potential economic
interest in the trial, the Charleston Gazette reports.
Residents who live near the Wood County DuPont plant have filed
a class action, claiming that the chemical C8 produced by
DuPont's plant has contaminated the water supplies in the area.
A court order earlier designated the class as being "all persons
whose drinking water is or has been contaminated with C8
attributable to releases from DuPont's Washington Works Plant."
Residents in the Lubeck and Washington areas sued DuPont in
August 2001, claiming the Wood County plant contaminated
drinking water supplies by releasing C8, or chemical ammonium
perfluorooctanoate. Judge Hill said that even if he was
included in the class, he would waive whatever interest he may
have.
"I represent the people of this circuit, and I do not have the
right to just step out of it and let another judge, who might
not have the people's interests at heart, handle it," Judge Hill
said.
Plaintiffs in the lawsuit are also fighting the company's
attempt to have another judge hear the case. Their lawyers
filed a motion last week in Wood County Circuit Court, calling
DuPont's motion "factually baseless and frivolous."
Trial in the C8 case is set for September 15. Judge Hill also
recently granted the plaintiffs' request to turn over medical
records of DuPont employees whose blood was tested for C8. The
court also granted a protective order to assure personal medical
information would not become public. Judge Hill allowed the
company up to 30 days to provide the employees' records.
The chemical C8 is used to make Teflon and other products.
DuPont scientists and officials have said there are no known
health effects from the chemical, which the company has used for
more than 50 years. On April 10, Judge Hill ruled that C8 is
toxic and hazardous to humans and allowed the lawsuit to proceed
after the company had sought dismissal of plaintiffs' class
action in an earlier motion.
On April 18, Judge Hill ordered DuPont to pay for the testing of
class members to check for any presence of C8 in their bodies.
That issue is pending before West Virginia's Supreme Court.
FIDELITY NATIONAL: Consumers Launch Antitrust Suits in CA Court
---------------------------------------------------------------
Fidelity National Title Co. faces two class actions filed in Los
Angeles County Superior Court, charging it and other insurance
companies with price fixing during the recent refinancing boom.
The suits name as defendants:
(1) First American Title Co.,
(2) Chicago Title Co.,
(3) California Title Co.,
(4) Commonwealth Land Title Co.,
(5) Lawyers Title Co.,
(6) Old Republic Title Co. and
(7) First California Title Co.
The suits allege the defendants violated antitrust laws by
talking about and setting the price for title insurance in
California, a charge the companies deny. The complaints seek
class action status and allege that the companies together with
other title companies have conspired to fix the price of title
products in violation of state and anti-trust statutes.
The Company believes the lawsuits are without merit and intends
to vigorously defend the suit.
HALLIBURTON CO.: Settles Shareholder Fraud Suits For $6 Million
---------------------------------------------------------------
Halliburton Co. has agreed to pay $6 million to settle 20
shareholder lawsuits that accused the company of using deceptive
accounting practices while Richard Cheney, now US Vice
President, led the company, Dow Jones International News
reports. The lawsuits were combined into one lawsuit filed in a
Dallas federal court.
The combined lawsuits challenged the way that the oilfield-
services company counted revenue from cost overruns and change
orders on long-term fixed-price construction projects.
Halliburton began booking some of the unapproved amounts as
revenue in 1998, and later disclosed the change in filings with
the Securities Exchange Commission (SEC). The SEC continues to
investigate the accounting change and the way it was disclosed.
The company said that three of the four lead plaintiffs have
agreed to the settlement and that the fourth is evaluating the
offer. The company said further that, under the terms of the
proposed settlement, the plaintiffs agreed not to sue individual
executives and board members.
The plaintiffs bought Halliburton stock between 1998 and 2002.
Investors in the cases settled this week alleged that
Halliburton overstated revenue from 1999 through 2001, by $445
million, which artificially pumped up the company's share price
and cost investors millions when the stock declined last year.
The settlement, which is subject to court review and approval,
follows a deal proffered in December, under which Halliburton
agreed to pay about $4 billion in cash and stock to resolve
300,000 asbestos claims and head off future cases. Halliburton
inherited most of the asbestos claims in the 1998 acquisition of
Dresser Industries Inc.
The announcement of the shareholder settlements did not resolve
all of Halliburton's legal woes. Judicial Watch, a self-
described government-watchdog group, said its lawsuit against
Vice President Cheney and the company was not affected by the
company's accord with the shareholders. The group's general
counsel, Larry Klayman, said the settlement of other cases
"would be an affirmation that our case is valid and should
proceed."
Halliburton has filed a motion to dismiss the Judicial Watch
lawsuit. The Company is one of the world's largest providers of
equipment and services to the oil and gas industry, and also has
a large engineering and construction business.
HOMEAMERICAN CREDIT: Appeal of IL Consumer Suit Dismissal Denied
----------------------------------------------------------------
Illinois Appeals Court dismissed plaintiffs' appeal of the
dismissal of the consumer class action filed against
HomeAmerican Credit, Inc. (doing business as Upland Mortgage) on
behalf of borrowers in Illinois, Indiana, Michigan and Wisconsin
who paid a document preparation fee on loans originated since
February 4, 1997.
The plaintiff alleges that the charging of, and the failure to
properly disclose the nature of, a document preparation fee were
improper under applicable state law. The plaintiff seeks
restitution, compensatory and punitive damages and attorney's
fees and costs, in unspecified amounts. The Hale case consists
of five separate counts - three purported class action counts
and two individual counts.
On November 22, 2002 the court granted the Company's motion to
dismiss the three class action counts, but a judgment
erroneously dismissing all five counts of the case was entered
in the docket. The plaintiff appealed the dismissal to the
United States Court of Appeals for the Seventh Circuit but, on
February 14, 2003, the Court of Appeals dismissed the appeal for
lack of jurisdiction, on the grounds that the judgment entered
by the Illinois Federal District Court was erroneous and did not
constitute a final disposition of all counts of the case.
Action on the two remaining individual counts in the Illinois
federal court has resumed and discovery has been scheduled.
The Company believes that its imposition of this fee is
permissible under applicable law and is vigorously defending the
case.
ILLINOIS: Aurora Residents Commence Lawsuit Over Mold Conditions
----------------------------------------------------------------
Plaintiff residents of Harbor Village Apartments in Aurora,
Illinois are seeking to make their federal lawsuit against
Midland Management Co. a class action, the Chicago Tribune
reports. In their lawsuit, the plaintiffs say that city
inspectors have cited Midland in the past for water leaks,
seepage and moldy conditions, according to the inspection
reports. These conditions are the primary cause of residents'
health problems, according to the lawsuit.
The plaintiffs also name as defendant Kenneth Ringbloom, who is
the beneficiary of a trust that owns Midland, which, in turn,
owns and manages Harbor Village. The lawsuit was filed after a
group of housing advocates helped organize the tenants. The
advocates, in January, formed JUST Housing, a not-for-profit
group that has raised its profile in recent months with
community forums, lobbying for tenants' rights laws and pushing
for more affordable housing - all of which has highlighted the
Harbor Village case.
In a July 10, 2002, letter to Midland attorneys, Aurora Division
of Property Standards Director Mark Anderson and Kane County
Environmental Health Director Fred Carlson, noted mold was found
in three of the seven apartments inspected a month earlier.
They suggested the air quality at the complex be analyzed to
consider "any required remediation."
However, Midland denies the presence of hazardous molds in the
apartments. Attorneys for the plaintiffs claim that hazardous
molds have been found, some of which have been implicated in RSV
(respiratory syncytial virus), a condition that is the most
common cause of bronchitis and pneumonia in babies, according to
medical journals. Believing further testing was needed, the
tenants withdrew the lawsuit after a judge issued a temporary
restraining order preventing Midland from doing any mold cleanup
until testing was done.
The tenants decided their case was best pursued in federal court
because "they really felt they were being discriminated against
because of their race, sex and economic status," said Cynthia
Ralls, co-founder of JUST Housing and an advocate for the
tenants.
Most tenants, according to the lawsuit, are single African-
American women and their children who are receiving Section 8
housing subsidies from the US Department of Housing and Urban
Development, in order to live in the 108-unit complex on the
city's southeast side.
Because HUD standards require housing supported with federal
funds be "decent, safe and sanitary," and other federal laws
include similar requirements, the case is a federal issue, the
lawsuit states. In addition, federal civil rights have been
violated because Midland has not properly addressed the water
and mold issues, the suit says.
The lawsuit says further that Midland has been informed by
tenants of problems cause by water seepage and leaking,
resulting in mold and "improper and inadequate heating,
ventilation and air conditioning" since at least 1990, but
Midland has failed to solve the problem. The lawsuit also
states that Midland has either threatened to evict or has
evicted tenants who have complained to various government
authorities about problems at the complex.
In addition to seeking tens of millions of dollars in damages,
the suit seeks court orders to stop Midland "from spoiling or
altering evidence" at the complex, and to make Midland allow
inspections and testing, and to force Midland to pay for medical
testing for residents.
The lawsuit now before US District Court Judge Wayne Anderson;
if given class-action status, about 168 past and current tenants
would become plaintiffs in the suit, the lawsuit states.
Midland is seeking to have the federal suit dismissed, saying no
federal laws cited by lead plaintiff Dredia Ross White would
give federal courts jurisdiction over the issue. The
defendants' motion states the matter belongs in state court.
ILLINOIS: Residents Sue Firms For Pollution, Illnesses, Deaths
--------------------------------------------------------------
A lawsuit, recently filed in Cook County Circuit Court, charges
that Chicago residents contracted cancer and respiratory
illnesses and died, in the 1980s and 1990s, after long exposure
to contaminants, toxic substances and chemicals, including
arsenic, that were released into their homes surrounding a
facility operated by Acme Barrel Co. and other companies, the
Chicago Sun-Times reports.
"The types of environmental pollutants that Acme was discharging
are known to cause different cancers. The lawsuit will seek to
prove the cancers these people had were caused by the
environmental pollutants," said Frank Kasbohm, an attorney for
the approximately 450 plaintiffs in the lawsuit, including
survivors of the deceased.
Acme Barrel Co. and more than 20 other companies, removed
chemical residues from barrels and drums and then repainted them
for use, at a refurbishing at 2300 West 13th Street, according
to the lawsuits. On May 23, 2001, a release of toxic vapors
blanketed the neighborhood while the companies were handling 55-
gallon drums and 330-gallon containers holding toxic substances.
Thousands of people had to evacuate or seal off their homes, and
many others were forced to inhale the toxic vapors, according to
the lawsuit.
"That was a galvanizing event in the community. People had been
sick for a long time and had been complaining of a bad smell,
but they did not make a connection with Acme," Mr. Kasbohm said.
The lawsuit seeks an unspecified amount of damages. After
repeatedly being cited for pollution violations since 1997, Acme
Barrel closed its plant at 13th and Ogden on December 30. It
has bought at least two barrel reconditioning companies
elsewhere in Chicago.
INDIANA: Civil Group Sues County Over Dangerous Jail Conditions
---------------------------------------------------------------
The Indiana Civil Liberties Union (ICLU) sued Monroe County,
Indiana, over cramped, unsanitary and dangerous conditions in
that county's jail, the Associated Press Newswires reports.
The federal complaint recently filed by the ICLU on behalf of
inmate Paul Carlyle seeks certification as a class action, which
would allow other inmates to join as plaintiffs. The complaint
said jail conditions are "unconstitutional and unlawful."
Presently, the Monroe County jail has 257 inmates in a jail
equipped to house 206 inmates. After taking a tour of the jail,
ICLU attorney Ken Falk, said, "It is very dangerous. It is
difficult to clean. You see problems in every aspect of jail
life."
The lawsuit alleges jail conditions including violence between
prisoners, dangerously low levels of staffing, inconsistent
access to toilets, showers and sinks, filthy cell blocks and
infrequent supplies of fresh bedding or clothing.
"It is not the fault of Sheriff Steve Sharp," said Mr. Falk.
"The sheriff is given an impossible task of trying to run a
facility that is grossly overpopulated and grossly
understaffed."
Sheriff Sharp said he hopes the county commissioners will try to
address some of the problems rather than fight the lawsuit.
William Steger, the county attorney, said he was not ready to
concede all the allegations included in the complaint. "We will
certainly defend it," said Mr. Steger.
LEASECOMM CORPORATION: CA Court Dismisses Unfair Practices Suit
---------------------------------------------------------------
The San Francisco County Superior Court granted Leasecomm
Corporation's motion to dismiss the class action alleging a
violation of California Business & Professions Code Section
17200 on behalf of plaintiffs Robert Hayden and Renono Wesley
individually, a class of people similarly situated, and general
public.
Specifically, plaintiffs allege that the Company's practice of
filing suits against lessees in Massachusetts courts constitutes
an unfair business practice under California law.
LEASECOMM CORPORATION: Faces Lawsuit Over Lease Agreements in MA
----------------------------------------------------------------
Leasecomm Corporation and one of its dealers face a class action
filed in Superior Court in Massachusetts for a class seeking to
be certified as a nationwide class (excluding certain residents
of the State of Texas) who signed identical or substantially
similar lease agreements with the Company covering the same
product. The complaint asserts claims for:
(1) declaratory relief,
(2) rescission,
(3) civil conspiracy,
(4) usury,
(5) breach of fiduciary duty, and
(6) violation of Massachusetts General Laws Chapter 93A,
Section 11
The claims concern the validity, enforceability, and alleged
unconscionability of agreements provided through the dealer,
including a Leasecomm lease, to acquire on line credit card
processing services. The complaint seeks rescission of the
lease agreements with Leasecomm, restitution, multiple damages
and attorneys fees under Chapter 93A, and injunctive relief.
Because of the uncertainties inherent in litigation the Company
cannot predict whether the outcome will have a material adverse
effect.
LEASECOMM CORPORATION: Consumers Sue Over Unfair Trade Practices
----------------------------------------------------------------
Leasecomm Corporation faces a suit filed in the Orange County
Superior Court for the State of California. The suit also names
as defendants Galaxy Mall, Inc. and Electronic Commerce
International, Inc. and alleges unfair business practices and
competition under California Business and Professions Code
section 17200 et seq.
The essence of the claim is that the plaintiffs and others who
are similarly situated were defrauded in connection with their
acquisition of certain licenses that were financed by the
Company. The Company currently is expected to respond to the
complaint by May 29, 2003. Management expects to defend the
action vigorously.
METRIC PARTNERS: Status Conference Reset For February 2004 in CA
----------------------------------------------------------------
Court status conference for the class action filed against
Metric Partners Growth Suite Investors, LP has been continued to
February 6,2004 in the San Francisco County Superior Court,
California. The suit also names as defendants Metric Realty,
SSR Realty Advisors, Inc. (SSR), certain of SSR's affiliates and
current and former employees and a class of all limited partners
of the Partnership.
The suit alleges, among other things, that the SSR Parties
fraudulently caused GSI to distribute $16.8 million to the LPs.
The plaintiff, which claims to have purchased a claim owned by
NLC, is demanding general and punitive damages against the
Partnership and the SSR Parties and damages from the LPs with
regard to the portion of this $16.8 million distribution
received by each LP.
Process was served on all non-LP defendants in March and April
2002 and answers have been filed on behalf of all non-LP
defendants.
MICROFINANCIAL INC.: Appeals AL Court's Refusal To Dismiss Suit
---------------------------------------------------------------
Microfinancial, Inc. appealed Bullock County Court in Alabama's
decision denying its motion to dismiss the class action filed
against it, Leasecomm Corporation and another entity known as
Galaxy Mall, Inc. alleging:
(1) breach of contract;
(2) fraud, suppression and deceit;
(3) unjust enrichment;
(4) conspiracy;
(5) conversion;
(6) theft by deception; and
(7) violation of Alabama Usury Laws
The suit was filed on behalf of Aaron Cobb individually, and on
behalf of a class of persons and entities similarly situated in
the State of Alabama. More specifically, the plaintiff purports
to represent a class of persons and small business in the State
of Alabama who allegedly were induced to purchase services
and/or goods from any of the defendants named in the Complaint.
The appeal was filed with the Alabama Supreme Court on May 12,
2003. The Company continues to deny any wrongdoing and
plans to vigorously defend this claim. Because of the
uncertainties inherent in litigation, the company cannot predict
whether the outcome will have a material adverse affect.
OAK TECHNOLOGY: Court Upholds Dismissal of Securities Fraud Suit
----------------------------------------------------------------
The United States Sixth Circuit Court of Appeals upheld the
dismissal of the securities class action filed against Oak
Technology, Inc. and various of its directors and former
officers on behalf of all persons who purchased or acquired the
Company's common stock (excluding the defendants and parties
related to them) for the period July 27, 1995 through May 22,
1996.
This suit was filed in Santa Clara County Superior Court in
Santa Clara, California. The plaintiffs alleged violations of
California securities laws and statutory deceit provisions as
well as breaches of fiduciary duty and abuse of control. The
plaintiffs sought unspecified monetary damages.
The court dismissed all claims except the California
Corporations Code Sections 25400/25500 cause of action against
the Company and four former officers. On August 5, 2000 the
court granted defendant's motion for summary judgment and
entered judgment in favor of the Company and the former
officers. The plaintiffs appealed the court's decisions. On
February 3, 2003, the appellate court affirmed the trail court's
dismissal.
Based on its current information, the Company believes this suit
to be without merit and will continue to defend its position
vigorously. Although it is a remote possibility, the rulings
may be overturned by the California Supreme Court and the
Company may incur a loss upon an adverse conclusion of these
claims, an estimate of any such loss cannot be made.
Additionally, various Company directors and former officers are
defendants in three consolidated derivative actions pending in
Santa Clara County Superior Court in Santa Clara, California.
This lawsuit, which asserts a claim for breach of fiduciary duty
and a claim under California securities law based upon the
officers' and directors' trading in Company securities during
the period July 27, 1995 through May 22, 1996, has been stayed
pending resolution of the above class actions. The plaintiffs
are seeking monetary damages, equitable relief and an accounting
for the defendants' sales of shares of Company stock.
Based on its current information, the Company believes the suits
to be without merit and will defend its position vigorously.
Although it is reasonably possible the Company may incur a loss
upon conclusion of these claims, an estimate of any such loss
cannot be made.
OKLAHOMA: Lawyers For Black Officers Want $3M In Race Bias Suit
---------------------------------------------------------------
Lawyers who represented the plaintiffs in the black officers'
discrimination lawsuit against the city of Tulsa, recently
settled the racial discrimination case and asked for more than
$3 million in fees and expenses from the city, the Tulsa World
reports.
According to a document filed last week, seven attorneys who
represented the plaintiffs are seeking a total of $2,616,920 as
compensation for almost 10,500 hours they claim they spent
litigating the class action. The lawyers are claiming an
additional $393,323.56 in expenses - $380.107.51 to the Tulsa
firm of Bullock & Bullock, and $13,216.05 to Tulsa attorney Jean
W. Coulter.
The attorneys claim that they are the "prevailing party" in the
9-year-old case and therefore are entitled to an award of
"reasonable" attorney fees and expenses. It is a question not
of whether they will recover fees and expenses from it, but
rather in what amount.
In 2001, the US Supreme Court established a test for deciding
what is considered a "prevailing party." Under that standard,
the plaintiffs would have to show only that "a material
alteration of the legal relation" of the parties has occurred,
and that they have prevailed on any significant issue.
The plaintiffs and the city agreed on a consent decree December
3, 2002. US District Judge Sven Erik Holmes approved that
settlement May 12, over the objections of the Fraternal Order of
Police, an intervening party. The consent decree, which was
officially entered by the court on May 14, called for the
plaintiffs' counsel to file their fee application within 14
days.
The attorney fees issue is just one of several to be considered
by the court. The city and the plaintiffs will file the name of
nine additional candidates to supplement the six they already
have provided to the court for the three citizens' places on the
decree-mandated Dispute Resolution Committee. The two original
parties will state their reasons for opposing the request of the
Fraternal Order of Police (FOP) to put off implementation of the
decree while the union appeals its acceptance. Judge Holmes
will hold a hearing on the FOP's stay request.
PHILADELPHIA: Mayor Ordered to Enforce Council Trash Ordinance
--------------------------------------------------------------
Philadelphia Common Pleas Court Judge Matthew D. Carrafiello
ruled that Mayor Street is legally obligated to comply with the
City Council trash ordinance providing for free trash pickups
for the owners of condos and cooperatives, The Philadelphia
Inquirer reports. Therefore, Mayor Street must enforce the
ordinance by ordering that the free trash pickups be provided
the condo and co-op owners.
Mayor Street let the Council bill authorizing the pickups become
law last year without his signature. The mayor argued in court
that the Council had exceeded its powers under the City Charter
by requiring the mayor to provide the free trash pickups. Mayor
Street told the Council that that the reason he would not
enforce the ordinance, which had passed unanimously, was because
it would have a negative impact on city finances.
In its lawsuit, the Council said Mayor Street had "usurped" the
powers of the legislative branch. Judge Carrafiello said in his
opinion that the mayor's position on the City Council's powers,
if followed to its logical conclusion, "would render the Council
little more than an advisory council."
Mayor Street's spokeswoman Barbara A. Grant said, "We are going
to appeal it (the decision), because the city solicitor has said
the Council does not have the constitutional wherewithal under
the City Charter to tell the mayor how to spend funds."
In his opinion, Judge Carrafiello said that if Mayor Street's
reasoning was adopted, "almost all City Council ordinances would
be unenforceable, as they all have an impact, either direct or
indirect, upon funds budgeted to the executive branch."
This is the second court round on the condo trash issue. In
June 2000, the owner of the Manchester Apartments in
Philadelphia, filed a class action, contending the condo owners'
equal protection rights were violated by the city's refusal to
pick up their trash.
In July, US District Court Judge Berle M. Schiller ruled that
the city had no rational basis for refusing to pick up trash in
condos and co-ops. However, the Street administration appealed,
and in February 2003, the US Court of Appeals for the Third
Circuit reversed Judge Schiller and ruled in Mayor Street's
favor.
PINNACLE SYSTEMS: No Appeal Filed, Suit Dismissal Deemed Final
--------------------------------------------------------------
The United States District Court for the Northern District of
California's dismissal of the securities class action filed
against Pinnacle Systems, Inc. is deemed final, as the
plaintiffs' time to appeal expired.
The suit alleges that the Company and certain of its officers
and directors violated the federal securities laws by making
false and misleading statements concerning the Company's
business during a putative class period of April 18, 2000
through July 10, 2000. Plaintiffs seek unspecified damages.
After dismissal of several prior complaints on defendants'
motions, on March 22, 2002, plaintiffs filed a third
consolidated amended complaint, which defendants moved to
dismiss. On November 18, 2002 the court issued an order
dismissing the case with prejudice.
RESOURCE AMERICA: Faces Lawsuit Over Natural Gas Royalties in NY
----------------------------------------------------------------
Resource America, Inc. faces a class action filed in the New
York Supreme Court, Chautauqua County, by individuals,
putatively on their own behalf and on behalf of similarly
situated individuals, who leased property to the Company.
The complaint alleges that the Company is not paying landowners
the proper amount of royalty revenues derived from the natural
gas produced from the wells on leased property. The complaint
seeks damages in an unspecified amount for the alleged
difference between the amount of royalties actually paid and the
amount of royalties that allegedly should have been paid.
The Company believes the complaint is without merit and is
defending itself vigorously.
RITE AID: Judge Delays Ruling On Pact, Lawyers' Request For Fees
----------------------------------------------------------------
Plaintiffs' lawyers could collect more than $31 million in fees
in a proposed $125 million settlement from accounting firm KPMG,
involving its audits of Rite Aid Corporation, the Centre Daily
Times reports.
US District Court Judge Stewart Dalzell praised the lawyers'
work in the case during a recent hearing, but delayed ruling
until next week on the settlement or the lawyers' request for 25
percent fees.
The plaintiffs' firms - Berger & Montague of Philadelphia, and
Milberg Weiss Bershad Hynes & Lerach of New York - represent
shareholders in the class action stemming from Rite Aid's $1.6
billion restatement of earnings.
Judge Dalzell responded to the lone objection to the 25 percent
fees made by an individual investor's lawyer at the recent
hearing. Judge Dalzell said the percentage did not seem
excessive given the difficult nature of the case.
KPMG was not charged in the case and has acknowledged no
liability. Judge Dalzell said that KPMG "had the very obvious
defense that they were victims, too; it is not a sure thing."
A KPMG spokesman said only that the firm sticks by comments it
made in March when the agreement was first announced. "When
management of a company, which has the primary responsibility
for financial reporting, intentionally manipulates its records,
it is extremely difficult for any auditor to uncover such
actions," said the spokesman in a statement.
"We think it was the second-largest settlement by an accounting
firm in a securities class action (after Cendant)," said
plaintiffs' lawyer Sherrie R. Savett of Berger & Montague. In
the Cendant case, Ernst & Young agreed to pay $335 million to
settle a shareholders lawsuit after the travel and real-estate
services company restated its earnings by $14 billion.
None of the institutional investors, including Vanguard,
Prudential, and other firms has opposed the settlement, said Ms.
Savett.
SOUTH CAROLINA: Myrtle Beach Did Not Break Laws For Tax-Raising
---------------------------------------------------------------
Circuit Court Judge Michael Baxley decided that Myrtle Beach did
not violate any laws when it raised taxes after Horry County
reassessed property values in 1998, the Sun-News (Myrtle Beach,
SC) reports.
Former Horry County Administrator Linda Angus filed the lawsuit
in 1999, charging the city with using the reassessment in order
to illegally impose a tax increase, and the lawsuit received
class action status in 2001.
Judge Baxley ruled that the city's tax policy was "sensible" and
used "in good faith." The judge wrote, "the plaintiffs have
failed to show that the actions of the city were arbitrary and
unreasonable."
Sid Connor, attorney for Ms. Angus, said they will appeal the
decision to the South Carolina Supreme Court. The issue in the
case was whether the city overtaxed its residents after the
reassessment by adjusting the tax levy according to the
percentage of tax actually collected. The lawsuit argued that
the law does not allow cities to base tax rates off of
collection rates during reassessment.
Judge Baxley decided that the use of a collection rate was
"sensible" and "conservative." Not allowing the city "to employ
these factors in calculating rollback millage would lead to a
result that is unworkable, inefficient, inaccurate and
problematic," Judge Baxley wrote.
The city anticipated collecting 86 percent of property taxes
owed, but actually collected about 88 percent. The city rebated
the excess, $about 500,000, through a tax cut the next year.
"Without the lawsuit, Myrtle Beach would not have refunded that
money to the taxpayers," said Sid Conner. Mr. Conner said that
shows the law is too vague. "This vagueness of the law does
provide opportunity for abuse . The legislature needs to come up
with a more precise formula."
Mr. Connor, of the Surfside Beach-based law firm Kelaher Connell
& Connor, said he has no "antagonism" toward the city, but
instead has "a problem with a law that is written sloppily."
TEXAS: Judge Dismisses Suits Alleging Sexual Misconduct In Jail
---------------------------------------------------------------
US District Judge John McBryde dismissed three more lawsuits
alleging sexual misconduct in the Haltom City Jail, conduct in
which the women claimed they were fondled, leered at and forced
to wear degrading clothing while incarcerated for minor traffic
offenses, The Fort Worth Star-Telegram reports. Three lawsuits
are still pending against the city, including one for which a
former inmate is seeking class action status.
As with previous rulings in which Judge McBryde dismissed
lawsuits alleging sexual misconduct, the judge did not rule on
whether the complaints were true. Instead, he said the women
could not sue for such misconduct without proof that the
problems were caused by a specific city policy.
Attorneys for the women said that they plan to file motions
asking Judge McBryde to reconsider his rulings. Although Haltom
City Attorney James Jeffrey said he was happy with the ruling,
the city still was "not pleased with the allegations (of sexual
misconduct) related to the lawsuits."
City Councilman Robert Hurley said the city should not be held
accountable because city officials took action to correct
problems as they came to light. Mr. Hurley did not address the
rights of the women to sue for injuries suffered at the hands of
agents of the city, even though the city took action to right
matters after the "problems" came to light.
Assistant City Manager Thomas Muir said the city is cautiously
optimistic about the latest developments, addressing future
improvements, without any specificity as to accountability for
wrongful conduct and without addressing compensation for the
victims of the sexual misconduct. "We are still focused on how
we can make things better, and we are trying to re-establish the
confidence of our citizens," said Mr. Muir.
In dismissing the three lawsuits Judge McBryde wrote that the
women must "show that a policy or custom existed; governmental
policy-makers actually or constructively knew of its existence;
a constitutional violation occurred; and the custom or policy
served as the voting force behind the violation."
Judge McBryde issued similar rulings May 15, 16, and 19 in seven
other lawsuits against Haltom City. One of the three remaining
lawsuits claims that as many as 5,000 people may have been
subjected to unconstitutional conditions in the jail. All of
the lawsuits contend that the cash-strapped city encouraged
former Municipal Judge Jack Byno to levy stiff fines for minor
offenses such as traffic violations. Judge Byno also routinely
denied people access to lawyers and failed to hold hearings to
determine whether the defendants were able to pay the fine, the
lawsuits say.
Once in jail, female inmates were not allowed to wear underwear
and were forced to wear one-piece jumpsuits that exposed their
breasts when they used the toilet. The conditions were made
public after a woman complained that a former jailer, Clint Wade
Weaver, forced her to perform a sex act in exchange for early
release. Since then, other women have alleged that Mr. Weaver
sexually assaulted them, and still other women said they were
sexually fondled or forced to strip in front of male jailers.
Mr. Weaver has pleaded guilty to one count of official
oppression and has been indicted on three other charges,
including sexual assault.
The lawsuits say city officials should have known that Judge
Byno's policies were unconstitutional, and they should have
known about conditions in the jail. Judge McBryde rejected
those arguments, writing, "The judicial actions of a municipal
judge do not create liability for the city that employs him."
TEXAS: Medical Malpractice Awards Limited To $750,000 Per Victim
----------------------------------------------------------------
The most money a victim of medical malpractice could get in
court for pain and suffering is $750,000, under a deal struck
late Friday by House and Senate leaders, in order to make the
sweeping changes to the way Texans will file and win lawsuits,
The Fort Worth Star-Telegram reports.
The version of House Bill 4 that is expected to be sent to the
House and Senate floors for final approval is "the best tort law
in the country," said state Senator William Ratliff, R-Mount
Pleasant. He had led efforts to weaken a version passed by the
House that had met with angry resistance from House Democrats.
The bill also addresses other types of lawsuits. It changes
class action, allows juries to hear whether motorists were
wearing seat belts when they were in a car accident, encourages
both sides to settle early and limits corporate liability for
defective products.
Limiting the amount of jury awards for non-economic damages in
medical cases was designated an emergency priority for this
session by state leaders, after doctors said skyrocketing
malpractice rates were driving them out of the state.
The legislation at one point seemed ready to die, as Lt.
Governor David Dewhurst and Senator Ratliff favored the $750,000
cap for lawsuits against doctors. Governor Perry and Rep.
Joseph Nixon wanted a $250,000 limit. The end result allows
juries to award a $250,000 cap of non-economic damages to a
person who sues the doctor, another $250,000 to the hospital or
nursing home included in that suit, and another $250,000
if another hospital or nursing home is sued.
Patient advocates and trial-lawyer groups viewed the legislation
as a wish list that the state's powerful business lobby had been
trying to push through for more than a decade. Opponents argued
it reduced access to Texans of their constitutional rights to
get justice in court.
"It is an enormous step backwards for Texas families and Texas
patients, and it completely disrupts the balance of power in
Texas courtrooms in favor of insurance and corporate interests,"
said Daniel Lambe of Texas Watch, an advocacy group for victims
of medical malpractice.
THERAGENICS CORPORATION: Discovery Complete in GA Stock Lawsuit
---------------------------------------------------------------
Discovery is completed in the securities class action filed
against Theragenics Corporation and certain of its officers and
directors in the United States District Court for the Northern
District of Georgia.
The suit alleges violations of the federal securities laws,
including Sections 10(b), 20(a) and Rule 10b-5 of the Securities
and Exchange Act of 1934, as amended on behalf of investors who
purchased or sold securities during the time period from January
29, 1998 to January 11, 1999. The amended complaint generally
alleges that the defendants made certain misrepresentations and
omissions in connection with the performance of the Company
during the class period and seeks unspecified damages.
A stockholder of the Company also filed a derivative complaint
in the Delaware Court of Chancery purportedly on behalf of the
Company, alleging that certain directors breached their
fiduciary duties by engaging in the conduct that is alleged in
the consolidated federal class action. The derivative action
has been stayed by the agreement of the parties.
In July 2000, the court granted the Company's s motion to
dismiss the consolidated suit for failure to state a claim
against the Company, and granted the plaintiffs leave to amend
their complaint. The plaintiffs filed a second amended
complaint and the court denied the defendant's motion to dismiss
the second amended complaint. The court also denied the
Company's motion for reconsideration.
Subsequently, the court certified the class and the parties
commenced discovery. Discovery in the case is now complete,
with the exception of expert witness depositions. Management
believes these charges are without merit and is opposing the
litigation vigorously; however, given the nature and stage of
the proceedings; the ultimate outcome of the litigation cannot
be determined at this time.
TYCO INTERNATIONAL: Asks NH Court To Dismiss Securities Lawsuit
---------------------------------------------------------------
Tyco International Ltd., certain of its former directors and
officers and its auditors asked the United States District Court
for the District of New Hampshire to dismiss the consolidated
securities class action filed against them.
As to the Company and certain of its former directors and
officers, the complaint asserts causes of action under Section
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, and Section 14(a) of that Act and
Rule 14a-9 promulgated thereunder, as well as Sections 11 and
12(a)(2) of the Securities Act of 1933. Claims against the
Company's former directors and officers are also asserted under
Sections 20(a) and 20A of the Securities Exchange Act of 1934
and Section 15 of the Securities Act of 1933.
The complaint asserts that the Company defendants violated the
securities laws by making materially false and misleading
statements and omissions concerning, among other things:
(1) Tyco's mergers and acquisitions and the accounting
therefor, as well as allegedly undisclosed
acquisitions;
(2) misstatements of Tyco's financial results;
(3) the impact of a new accounting standard (SAB 101,
promulgated in 1999) on the Company's earnings
performance;
(4) compensation of certain of the Company's former
executives;
(5) their improper use of our funds for personal benefit
and their improper self-dealing real estate
transactions;
(6) their sales of Tyco stock;
(7) payment of $20 million to one of the Company's former
directors and a charity of which he is a trustee; and
(8) the criminal investigation of the Company's former
Chief Executive Officer
The plaintiffs seek class certification, compensatory damages,
rescission, disgorgement and attorneys' fees and expenses.
TYCO INTERNATIONAL: NJ Files Consolidated Securities Suit in NH
---------------------------------------------------------------
The State of New Jersey, on behalf of several state pension
funds, filed a consolidated securities class action Tyco
International Ltd., its auditors, and certain of its former
directors and officers. The Judicial Panel on Multidistrict
Litigation transferred the action to the United States District
Court for the District of New Hampshire.
As against all defendants, the amended complaint asserts causes
of action under Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder, for common law
fraud, aiding and abetting common law fraud, conspiracy to
commit fraud and negligent misrepresentation. Claims are
asserted against the individual defendants under Section 20(a)
of the Securities Exchange Act of 1934, Section 15 of the
Securities Act of 1933, Section 24(d) of the New Jersey Uniform
Securities Law, Sections 421-B:25(II) & (III) of the New
Hampshire Uniform Securities Law, and for breaches of fiduciary
duties. Claims are also asserted against:
(1) certain of the individual defendants under Section 20A
of the Securities Exchange Act of 1934; against the
Company under Section 12(a)(2) of the Securities Act of
1933, Section 24(c) of the New Jersey Uniform
Securities Law, and the New Jersey RICO Statute on the
basis of respondeat superior liability;
(2) against the Company and certain of the individual
defendants under Section 14(a) of the Securities Act of
1933 and Rule 14a-9 promulgated thereunder; and
(3) against the Company, its auditors, and certain of the
individual defendants for violation of, aiding and
abetting violation of, and conspiracy to violate the
New Jersey RICO Statute.
Finally, claims are asserted against the individual defendants
and the Company's auditors for aiding and abetting the
individual defendants' breaches of fiduciary duties. The
amended complaint asserts that the defendants violated the
securities laws and otherwise engaged in fraudulent acts by
making materially false and misleading statements and omissions
concerning, among other things:
(1) unauthorized and improper compensation of certain of
the Company's former executives;
(2) their improper use of our funds for personal benefit
and their improper self-dealing real estate
transactions;
(3) their improper accounting practices;
(4) payment of $20 million to one of our former directors
and a charity of which he is a trustee;
(5) criminal conduct of certain former executives; and
(6) the criminal investigation of the Company's former
Chief Executive Officer
TYCO INTERNATIONAL: Investors Sue Over Sensormatic Acquisition
--------------------------------------------------------------
Tyco International, Ltd. and certain of its former officers and
directors face a class action filed in the Circuit Court for
Palm Beach County, Florida, asserting causes of action against
them under the Securities Act of 1933.
Defendants removed the case to the United States District Court
for the Southern District of Florida and plaintiffs have moved
that court to remand the action to state court. The Judicial
Panel on Multidistrict Litigation has transferred the action to
the United States District Court for the District of New
Hampshire.
The complaint purports to bring suit on behalf of persons who
exchanged their Sensormatic Electronics Corporation stock for
shares of the Company in connection with its acquisition of
Sensormatic. The complaint alleges that the registration
statement filed in connection with the Sensormatic acquisition
contained false and misleading statements concerning, among
other things, financial disclosures concerning certain of the
Company's mergers and acquisitions and accounting therefor.
TYCO INTERNATIONAL: Plaintiffs Seek Remand of Suits To FL Court
---------------------------------------------------------------
Plaintiffs in the four class actions filed against Tyco
International, Ltd. want the suits to be remanded to Florida
State Court after the Judicial Panel on Multidistrict Litigation
transferred them to the United States District Court in New
Hampshire.
In December 2002, four class actions were filed in the Circuit
Court for Palm Beach County, Florida, labeled:
(1) Hromyak V. Tyco International, Ltd., et al.,
(2) Rappold V. Tyco International, Ltd., et al.,
(3) Myers V. Tyco International, Ltd., et al., and
(4) Goldfarb V. Tyco International, Ltd., et al.
Plaintiffs in each of these actions also assert claims against
the Company, certain of its former directors and officers, and
in three instances its auditors under the Securities Act of
1933, and seek class certification, compensatory damages and
attorneys' fees and expenses.
Defendants removed these four actions from Florida state court
to the United States District Court for the Southern District of
Florida. The Judicial Panel on Multidistrict Litigation
transferred the actions to the United States District Court for
the District of New Hampshire.
The HROMYAK complaint purports to bring suit on behalf of
persons who exchanged their United States Surgical Corporation
(US Surgical) stock for shares of Tyco in connection with the
Company's acquisition of US Surgical in or about October 1998.
The complaint alleges that the registration statement filed in
connection with the US Surgical acquisition contained false and
misleading statements concerning, among other things, financial
disclosures concerning certain of the Company's mergers and
acquisitions and accounting therefor.
The RAPPOLD complaint purports to bring suit on behalf of
persons who exchanged their InnerDyne, Inc. (InnerDyne) stock
for shares of Tyco in connection with Tyco's acquisition of
InnerDyne in or about December 2001. The complaint alleges that
the registration statement filed in connection with the
InnerDyne acquisition contained false and misleading statements
concerning, among other things, financial disclosures concerning
certain of Tyco's mergers and acquisitions and accounting
therefor.
The MYERS complaint purports to bring suit on behalf of persons
who exchanged their TyCom, LTD (TyCom) stock for shares of Tyco
in connection with Tyco's acquisition of TyCom in or about
December 2001. The complaint alleges that the registration
statement filed in connection with the TyCom acquisition
contained false and misleading statements concerning, among
other things, financial disclosures concerning certain of Tyco's
mergers and acquisitions and accounting.
The GOLDFARB complaint purports to bring suit on behalf of
persons who exchanged their Scott Technologies, Inc. (Scott)
stock for shares of Tyco in connection with Tyco's acquisition
of Scott in or about May of 2001. The complaint alleges that
the registration statement filed in connection with the Scott
acquisition contained false and misleading statements
concerning, among other things, financial disclosures concerning
certain of Tyco's mergers and acquisitions and accounting
therefor.
Defendants removed these four actions from Florida state court
to the United States District Court for the Southern District of
Florida and they were later transferred by the Judicial Panel on
Multidistrict Litigation to the United States District Court for
the District of New Hampshire.
TYCO INTERNATIONAL: Asks Court To Dismiss ERISA Violations Suit
---------------------------------------------------------------
Tyco International, Ltd., and certain of its current and former
employees, officers and directors, asked the United States
District Court in New Hampshire to dismiss the consolidated
class action filed against them under the Employee Retirement
Income Security Act (ERISA). The suit purported to bring claims
on behalf of the Tyco International (US) Inc. Retirement Savings
and Investment Plans and the participants therein.
The complaint named as defendants the Company and certain of its
present and former officers and directors, its wholly-owned
subsidiary Tyco International (US) Inc., its retirement
committee, and certain of its present and former officers,
directors and employees.
The complaint asserts that the defendants breached their
fiduciary duties under ERISA by negligently misrepresenting and
negligently failing to disclose material information concerning,
among other things:
(1) related-party transactions and executive compensation;
(2) the mergers and acquisitions and the accounting
therefor, as well as allegedly undisclosed
acquisitions; and
(3) misstatements of Tyco's financial results
The complaint also asserts that the defendants breached their
fiduciary duties by allowing the Plans to invest in Tyco stock
when it was not a prudent investment. The plaintiffs seek:
(i) a declaration that the defendants are not entitled to
protection under ERISA's safe harbor provision;
(ii) an order compelling the defendants to make good to the
Plans all losses caused by the defendants' alleged
breaches of fiduciary duty;
(iii) imposition of a constructive trust on any amounts by
which any defendant was unjustly enriched;
(iv) an order enjoining future violations of ERISA;
(v) actual damages in the amount of any losses the Plans
suffered;
(vi) costs and attorneys' fees, and an order for equitable
restitution and other appropriate equitable monetary
relief.
UNITED KINGDOM: Lost Records Destroy Britons' Chance For Damages
----------------------------------------------------------------
British patients infected with deadly viruses from contaminated
blood products claim they have likely missed out on the chance
of compensation because hospitals have lost or destroyed their
medical records, according to The Times of London.
More than 200 British hemophiliacs are involved in a class
action in the United States, which is about to be lodged against
four large pharmaceutical companies that allegedly supplied
blood plasma from high-risk donors, including prisoners, to the
hospital system in Scotland, in the late 1970s and the early
1980s.
The British hemophiliacs who received the US blood products from
the four large pharmaceuticals; namely, a clotting agent called
Factor 8, went on to develop hepatitis C and HIV. The lawsuit
is being coordinated by a law firm in San Francisco, and it was
originally intended that evidence from affected British patients
would be submitted by the end of last week.
However, scores of the infected patients, particularly those in
Scotland, have had difficulty accessing their complete medical
records, which are vital to the proof that their infection was
caused by the imported American blood plasma.
Some patients have been told by the hospitals that their records
have been lost or destroyed; while others have received
documents with huge gaps in the data, invariably involving the
years 1980 to 1985, when the mass contamination of 3,000
hemophiliacs (568 in Scotland) is thought to have taken place.
The so-called blunder over the archiving of records has proved
remarkably consistent across Scotland, raising suspicions among
hemophiliacs that it may be more than coincidence.
The matter of the lost or destroyed records came to light after
American lawyers visited Scotland last November, to talk to the
hemophiliacs about the class action. Consequently, the patients
began requesting their medical records. At the time, Malcolm
Chisholm, the Health Minister, instructed hospitals to
cooperate. Minister Chisholm has now asked the hemophiliacs
whose records are missing or incomplete to contact his
departments. It is understood that medical records of people
with long-term illnesses should be kept more than five years
after their death.
Philip Dolan, chairman of the Scottish Hemophiliacs Forum, said:
"One hospital's failure to keep adequate medical records could
be put down to poor administration. But when the same thing has
happened at hospitals in Glasgow, Aberdeen, Edinburgh and
Dundee, and the same sort of vital information is missing over
the same period of time, it seems a wee bit suspicious."
The Scottish executive has made positive noises about
possibility for patient compensation, although haggling
continues over the amount. It is likely that an individual's
history of infection will be needed, in some agreed-upon form,
however, before any claims are accepted.
WASHINGTON: Foundation Sued After Leaving Anti-Poverty Venture
--------------------------------------------------------------
Two years ago, a charitable foundation, the Northwest Area
Foundation, approached the people of the Yakima Valley, with an
idea and the possibility of a pot of money for fighting poverty,
the Associated Press Newswires reports. Yakima Valley's
residents joined the program offered by the St. Paul, Minnesota-
based foundation, called Community Ventures.
Farmworker Julio Romero, bought into the foundation's program
and signed on to help bring together people of various racial
and ethnic backgrounds and economic classes to develop their own
comprehensive, regional anti-poverty plan. However, last
summer, the Northwest Area Foundation abruptly withdrew its
offer, saying the valley was too large and too divided to
develop a unified proposal in a timely manner.
Now, Mr. Romero, 49, a Mexican immigrant, who became a US
citizen in 1996, is the lead plaintiff in a proposed class
action, filed in US District Court, that accuses the Northwest
Area Foundation of breach of contract and seeks the $1.25
million the volunteers contend they were promised in order to
develop the plan.
Sylvia Burgos Toftness, spokeswoman for the foundation, said the
plan had not come together as the foundation had hope. "That
there is disappointment is not the basis of a lawsuit."
Under the Community Ventures program, the foundation is seeking
to identify 16 communities to participate in a 10-year, $150
million intensive anti-poverty program. Three participants have
been selected so far: central Oregon, Miner County in South
Dakota and a new Little Canada, Minnesota-based organization
called the Indian Land Tenure Foundation.
Cris Stainbrook spent six years overseeing community work for
the Northwest Area Foundation and he says he does not know when
or how the Yakima Valley plan derailed. There were never any
guarantees that the Yakima Valley proposal would be accepted by
the foundation. Reportedly, it could have drawn a grant of as
much as $15 million.
The lawsuit contends the foundation did promise $1.25 million
for the proposal's development. Matthew Metz, the Seattle
lawyer who filed the lawsuit, contends that the plan fell apart
and never was finished because of the foundation's staff
turnover and other inadequacies. "They have been unwilling to
accept any responsibility for what happened," said Mr. Metz.
"They blame the community for what were their own internal
staffing issues."
Mr. Metz said volunteers put in as many as 10,000 hours total
and the deadlines generally were met. "There was a contract,
and they had committed the money," said Mr. Metz.
The Northwest Area Foundation was established in 1934, by a
grandson of James J. Hill, the founder of the Great Northern
Railway. It is committed to fighting poverty in the eight
states served by the railroad: Washington, Oregon, Idaho,
Montana, the Dakotas, Minnesota and Iowa.
WESTWOOD GROUP: Stockholder Commences Suit V. Stock Split in DE
---------------------------------------------------------------
Westwood Group, Inc. and its board of directors face a class
action filed by Company stockholder Joseph I. Messina in the
Court of Chancery in the State of Delaware seeking to enjoin the
proposed reverse stock split on the basis that it would not have
been fair to the stockholders and that the proxy statement
omitted information that Mr. Messina alleges to be "material."
The Company disputes all of the allegations set out in the suit
and is taking appropriate action to address this suit.
*Genetic Information, Another Source of Possible Discrimination?
----------------------------------------------------------------
May an employer refuse to hire someone because he does not like
his/her DNA? While this is not a burning issue for most people
today, an individual's genetic resume could be as important as a
job resume, because genetic testing can identify a person's
likely health future. DNA can tell an employer whether a
prospective employee will experience heart disease, cancer or
degenerative back disorders. Members of Congress, therefore,
are concerned that this information could be used against the
citizenry, and already are preparing legislation to deal with
this new source of discrimination, the Charleston Gazette
reports.
The Senate Health, Education, Labor and Pensions Committee has
passed a bill that would prohibit employers from using an
individual's genetic information when making hiring, firing, job
placement or promotion decisions. The Genetic Information
Nondiscrimination Act also includes language prohibiting
insurance companies from discriminating against people on the
basis of genetic information, family background or the results
of a genetic test to deny coverage or to set premiums and rates.
The bill has bipartisan support, and Majority Leader William
Frist has announced his intention of bringing it to a floor vote
by the end of June.
In the bill, genetic "information" is defined as "information
about a person's genetic tests, a family member's genetic tests
or the occurrence of a disease or disorder in family members of
the individual." An employer would be prohibited from
discharging, refusing to hire or refusing to promote someone,
for example, because that person's father, brother, sister (or
all of the above) had developed heart disease or lung cancer,
and the employer expected the individual to develop the same
disease, the Charleston Gazette reports.
The bill is not yet fully drafted. Debate is continuing
concerning whether plaintiffs' lawyers can file class actions
for "disparate impact" given the discrimination and whether
employees can seek "double damages" under both this law and the
Americans with Disabilities Act. However, even with these
issues in debate, political analysts expect the legislation to
pass through Congress rapidly. Given the support given the bill
by Secretary of Health, Education and Welfare's Tommy Thompson,
the president is expected to sign the finished version.
Employers will have to stay tuned to this legislation and insure
their hiring and promotion process is consistent with the law.
Employees who suspect they have been discriminated against will
have the right to seek help from the Equal Employment
Opportunity Commission.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
June 7, 2003
USING MEDITATION TO RESOLVE MOLD CLAIMS - AN ATTORNEYS GUIDE
BridgeportCE
Omni Los Angeles Hotel
Contact: 1-818-505-1490; www.reconferences.com
June 9, 2003
ANTI-SLAPP STATUTE CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 12-13, 2003
MOLD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 12-13, 2003
ENVIRONMENTAL INSURANCE: PAST, PRESENT AND FUTURE
American Law Institute
Boston
Contact: 215-243-1614; 800-CLE-NEWS x1614
June 16-17, 2003
LITIGATING EMPLOYMENT DISCRIMINATION & SEXUAL HARASSMENT CLAIMS
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
June 16-17, 2003
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 19-20, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Chicago
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
June 24-25, 2003
SECURITIES CLASS ACTIONS
American Conference Institute
Crowne Plaza Times Square, New York
Contact: 1-888-224-2480; http://www.americanconference.com
June 26-27, 2003
THE CLASS ACTION LITIGATION SUMMIT
Northstar Conferences
The Westin Embassy Row, Washington, DC
Contact: 866-265-1975; 212-596-6006;
cservice@northstarconferences.com
July 15, 2003
LEXISNEXIS PRESENTS: WALL STREET FORUM: MASS TORT LITIGATION
Mealey Publications
The Ritz-Carlton Hotel, Battery Park, New York
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
July 16-17, 2003
MANAGING MOLD LIABILITIES
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
July 31-August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
August 26-27, 2003
THE ANNUAL MANAGING MOLD LIABILITIES CONFERENCE
FROM CONSTRUCTION THROUGH TRIAL
Bridgeport Continuing Education
Contact: http://www.reconferences.com;818-505-1490
September 8-9, 2003
CORPORATE GOVERNANCE: LIABILITY OF CORPORATE
OFFICERS AND DIRECTORS
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 8-9, 2003
NATIONAL ASBESTOS LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Chicago
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 11-12, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 15-16, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 18-19, 2003
REINSURANCE SUMMIT
Mealey Publications
The Westin Hotel, Chicago
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 19-21, 2003
THE 20TH TOBACCO PRODUCTS LIABILITY PROJECT CONFERENCE
Northeastern University School of Law
Contact: scuri@tplp.org
September 22-23, 2003
BAD FAITH CONFERENCE
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 26, 2003
MANAGING ENVIRONMENTAL RISKS
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
September 29-30, 2003
PRACTICAL SKILLS SERIES: MASS TORT LITIGATION
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 29-30, 2003
CONSUMER FINANCE CLASS ACTIONS
American Conference Institute
New York City
Contact: 1-888-224-2480; http://www.americanconference.com
October 2-3, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
October 13-14, 2003
SILICA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, Atlanta
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 16-17, 2003
LEAD LITIGATION CONFERENCE
Mealey Publications
Westin Copley Plaza, Boston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 24, 2003
7TH ANNUAL NATIONAL INSTITUTE ON CLASS ACTIONS
American Bar Association
San Francisco, CA
Contact: 800-285-2221; abacle@abanet.org
November 6-7, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Ritz Carlton, New Orleans, Louisiana
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
November 7, 2003
7TH ANNUAL NATIONAL INSTITUTE ON CLASS ACTIONS
American Bar Association
Washington, DC
Contact: 800-285-2221; abacle@abanet.org
November 10-11, 2003
FEN-PHEN LITIGATION CONFERENCE
Mealey Publications
The Four Seasons Hotel, Houston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 13-14, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Westin Bonaventure Hotel, Los Angeles
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 13-14, 2003
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
November 17, 2003
Water Contamination Litigation Conference
Mealey Publications
Pasadena
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 17-18, 2003
INSURANCE ALLOCATION CONFERENCE
Mealey Publications
The Ritz-Carlton Golf Resort, Naples, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 18, 2003
MEDICAL MONITORING CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 8-9, 2003
ASBESTOS PREMISES LIABILITY CONFERENCE
Mealey Publications
The Fairmont Hotel, San Francisco
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 8-9, 2003
CALIFORNIA SECTION 17200 CONFERENCE
Mealey Publications
The Fairmont Hotel, San Francisco
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 11-12, 2003
CONSTRUCTION DEFECT AND MOLD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 12, 2003
MOLD LITIGATION 101 CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
March 18-19, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
The Fairmont, San Francisco, California
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
June 10 & 11, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Atlantis, Paradise Island, Bahamas
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
TBA
FAIR LABOR STANDARDS CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
AIRLINE BANKRUPTCY LITIGATION CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
June 05-30, 2003
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
Contact: 512-778-5665; info@cleonline.com
June 05-30, 2003
NBI PRESENTS "EMERGING ISSUES IN CALIFORNIA INDOOR AIR QUALITY
AND
TOXIC MOLD LITIGATION.
Contact: 512-778-5665; info@cleonline.com
July 18, 2003
CLASS ACTION OVERVIEW
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES
AND ADVERSTISING
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
________________________________________________________________
The Meetings, Conferences and Seminars column appears in the
Class Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
ALLOU HEALTHCARE: Rabin Murray Lodges Securities Suit in E.D. NY
----------------------------------------------------------------
Rabin Murray & Frank LLP initiated a securities class action
filed in the United States District Court for the Eastern
District of New York, on behalf of all persons or entities who
purchased or otherwise acquired Allou Healthcare Inc. securities
(AMEX:ALU) during the period June 22, 1998 to April 9, 2003,
both dates inclusive. The suit names as defendants:
(1) Victor Jacobs,
(2) Herman Jacobs,
(3) David Shamilzadeh,
(4) Mayer Rispler & Company,
(5) Arthur Andersen LLP, and
(6) KPMG LLP
The complaint alleges that defendants violated the Securities
Exchange Act of 1934 by making a series of materially false and
misleading statements concerning the Allou's financial results
during the class period. In particular, the complaint alleges
that Allou failed to disclose, among other facts, that:
(i) the Company was materially overstating its accounts
receivables, resulting in an overstatement of revenues
and earnings;
(ii) that Allou was materially overstating its inventory,
thus inflating its net worth; and
(iii) the Company's financial statements were not prepared in
conformity with Generally Accepted Accounting
Principles.
As a result, the Company's securities prices were artificially
inflated during the class period. On April 24, 2003, however,
the Company filed with the SEC a Form 8-K which admitted that
Allou had overstated it inventory by approximately $35 million
and its accounts receivable by approximately $75-$80 million.
As a result of defendants' false and misleading statements the
price of Allou securities was artificially inflated throughout
the class period, causing plaintiff and the other members of the
class to suffer damages.
For more details, contact Eric J. Belfi or Sharon Lee by Phone:
(800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 or by
E-mail: email@rabinlaw.com
CORNERSTONE PROPANE: Cauley Geller Lodges Securities Suit in CA
---------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of purchasers of CornerStone
Propane Partners LP (OTC Pink Sheets: CNPP formerly NYSE: CNO)
publicly traded securities during the period between November 2,
1999 and 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 Samuel H. Rudman, David A. Rosenfeld,
Jackie Addison, Heather Gann or Candace Randle by Mail: P.O. Box
25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by
Fax: 1-501-312-8505 or by E-mail: info@cauleygeller.com
EUNIVERSE INC.: Milberg Weiss Lodges Securities Suit in C.D. CA
---------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities
class action in the United States District Court for the Central
District of California on behalf of purchasers of eUniverse Inc.
(NASDAQ:EUNI) publicly traded securities during the period
between July 30, 2002 and May 5, 2003.
The complaint charges eUniverse and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. eUniverse operates a network of Web sites and e-mail
newsletters that provide millions of users with entertainment
content, as well as products and services.
The complaint alleges that during the class period, defendants
caused eUniverse's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, certain eUniverse
officers were able to sell their own shares at artificially
inflated prices.
On May 6, 2003, before the market opened, eUniverse revealed
that its results for Q2-Q3 fiscal 2003, and possibly other
quarters, were false when issued. Trading in the stock was
halted by the SEC on this news.
For more details, contact William Lerach by Phone: 800/449-4900
or by E-mail: wsl@milberg.com
EUNIVERSE INC.: Glancy & Binkow Files Securities Suit in C.D. CA
----------------------------------------------------------------
Glancy & Binkow LLP commenced a securities class action in the
United States District Court for the Central District of
California on behalf of all persons who purchased securities of
eUniverse, Inc. (NasdaqSC:EUNI) between July 30, 2002 and May 5,
2003, inclusive.
The complaint charges eUniverse certain of its executive
officers with violations of federal securities laws. Among
other things, plaintiff claims that defendants' material
omissions and the dissemination of materially false and
misleading statements concerning eUniverse's financial
performance caused eUniverse's stock price to become
artificially inflated, inflicting damages on investors.
eUniverse operates a network of entertainment-related Web sites
focused on music, film, and interactive entertainment. The
complaint alleges that, throughout the class period, defendants
issued numerous statements and filed quarterly reports with the
Securities and Exchange Commission that were materially false
and misleading because they failed to disclose and/or
misrepresented, among other things:
(1) that the Company had materially overstated its net
income and earnings per share;
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(3) as a result, the value of the Company's net income and
financial results were materially overstated at all
relevant times.
On May 6, 2003, before the opening of trading, eUniverse shocked
the market by announcing that it ``intends to restate its
financial statements for the second and third quarters of the
year ended March 31, 2003,'' and possibly the first quarter of
fiscal 2003, and attributed the need for restatement to
``incorrect processing of certain transactions within the
Company's accounting system.'' The Company also told investors
not to rely on its reported financial results for the first
three quarters of fiscal 2003, and that the restated financial
results will differ materially from the previously reported
results.
Following this announcement, the Nasdaq halted trading in
eUniverse shares and stated that trading will remain halted
until the Company has supplied additional information.
For more details, contact Lionel Z. Glancy or Michael Goldberg
by Phone: (310) 201-9150 or (888) 773-9224 by E-mail:
info@glancylaw.com or visit the firm's Website:
http://www.glancylaw.com
SARA LEE: Ademi & O'Reilly Lodges Securities Lawsuit in N.D. IL
---------------------------------------------------------------
Ademi & O'Reilly, LLP initiated a securities class action in the
United States District Court for the Northern District of
Illinois, Eastern Division on behalf of all purchasers of Sara
Lee Corporation (NYSE:SLE) publicly traded securities during the
period between August 1, 2002 to April 24, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between August 1, 2002 and
April 24, 2003, thereby artificially inflating the price of Sara
Lee securities.
The complaint alleges that defendants issued a series of
materially false and misleading statements concerning the
Company's operations and prospects. In particular, the
complaint alleges that the statements were materially false and
misleading because they failed to disclose:
(1) that, despite the Company Reshaping program, the
Company was still burdened with numerous poorly
performing businesses and would have to reevaluate its
various businesses. Accordingly, Sara Lee did not have
``the right mix of businesses'' in that several
material businesses were ``not growing'' or were ``in
significant decline;"
(2) that the Company's underperforming businesses were
causing the Company to experience declining results
and, as a result, the Company would not be growing at
the rates represented to the market;
(3) due to a lack of proper internal or financial controls,
Sara Lee failed to identify or recognize those
businesses or brands among its portfolio of companies
that would need to be ``run dramatically differently in
the future;' and
(4) based on the foregoing, Sara Lee lacked any reasonable
basis upon which to project it would experience
``double-digit operating income increase'' for fiscal
2003 among its ``five lines of business'' or have
diluted EPS for fiscal 2003 in the range of $1.54 to
$1.60.
On April 24, 2003, Sara Lee shocked the public when it issued a
press release announcing its financial results for the third
quarter, the period ending March 31, 2003. The Company
announced that it was reducing earnings for fiscal 2003 to $1.50
to $1.52 per share, significantly below consensus expectations
of $1.59. In response to this announcement, the price of Sara
Lee common stock dropped by 10%. During the class period, Sara
Lee insiders sold more than $23 million of their personally-held
Sara Lee common stock to the unsuspecting public.
For more details, contact Guri Ademi by Phone: (866) 264-3995 by
Fax: (414) 482-8001 or by E-mail: www.gademi@ademilaw.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. Go to
http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora
Fatima Antonio and Lyndsey Resnick, Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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