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/raid1/www/Hosts/bankrupt/CAR_Public/030729.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 29, 2003, Vol. 5, No. 148 Headlines ALCOA INC.: Settlement Fairness Hearing Set August 2003 in Ohio AMERICAN GREETINGS: Ex-President Settles Insider Trading Charges AUTONATION INC.: Fairness Hearing For Pact Set August 2003 in FL AUTONATION INC.: Appeals Certification Of Federal Antitrust Suit BELLSOUTH: Sued Over Guards' Cost Used During Miami Area Repairs BERTELSMANN AG: German Court Blocks $17B Napster Suit BRIDGESTONE/FIRESTONE: Recalled Tire Settlement Wins Approval CASELLA WASTE: NJ Court Grants Final Approval to Suit Settlement CONNECTICUT: Court Monitor States DCFS Disobeyed Consent Decree COEUR D'ALENE: Plaintiffs File Amended Securities Lawsuit in ID DEEP VEIN THROMBOSIS: Court Asked To Dismiss Australian's Claim EPHEDRA: FDA Contemplates Ban on Ephedra, After Link To Deaths ERIE INSURANCE: Court To Decide on Approval For Suit Settlement FARMERS INSURANCE: TX Atty. General Forges Motorists' Settlement HEARTLAND ADVISORS: Judge Approves Payments To Bond Fund Holders INVESTMENT TECHNOLOGY: SEC Files Suit For Securities Violations LATINO REPARATIONS: Deportees Sue Over Deportation In Mid-30s NATIONAL FOOTBALL LEAGUE: Widow Of Vikings Player Files Lawsuit OKLAHOMA: Oklahoma City School District Sued Over Overdue Bills TELECOMMUNICATIONS INDUSTRY: Fiber-Optic Lawsuit Gets Approval UNITED STATES: Cases Consolidated, Order To Reduce Flow Stayed US NAVY: DC Court Expands Class in Chaplains Discrimination Suit WAL-MART STORES: Hearing Over Lawsuit Certification Rescheduled New Securities Fraud Cases BLUE RHINO: Scott + Scott Launches Securities Lawsuit in C.D. CA CITIGROUP INC.: Towe Ball Launches Securities Fraud Suit in MT CREE INC.: Cohen Milstein Files Securities Fraud Suit in M.D. NC CREE INC: Schatz & Nobel Commences Securities Fraud Suit in NC DIVINE INC.: Stull Stull Lodges Securities Fraud Suit in N.D. IL INTERMUNE INC: Schiffrin & Barroway Files Lawsuit in N.D. CA POLYMEDICA CORPORATION: Brodsky & Smith Files MA Securities Suit ********* ALCOA INC.: Settlement Fairness Hearing Set August 2003 in Ohio --------------------------------------------------------------- The United States District Court for the Northern District of Ohio has set the fairness hearing for the settlement of the class action filed against Alcoa, Inc. for August 25, 2003. The suit was filed against the Company and the International UAW, on behalf of 400 African-American employees of Cleveland Works, alleging discrimination in Cleveland's apprenticeship program. Plaintiffs sought certification of the class, declaratory and injunctive relief, lost wages, entry into apprenticeship programs, compensatory and punitive damages and costs and expenses of litigation. On February 28, 2003, the parties filed with the court a proposed settlement agreement providing monetary and injunctive relief. Preliminary approval of the proposed settlement agreement was granted on May 27, 2003. The cost of settlement is not expected to be material. AMERICAN GREETINGS: Ex-President Settles Insider Trading Charges ---------------------------------------------------------------- Edward Fruchtenbaum, former president and chief operating officer of American Greetings Corporation, settled insider trading charges that the Securities and Exchange Commission had previously filed against him. Mr. Fruchtenbaum, a resident of Chagrin Falls, Ohio, and Minneapolis, Minnesota, consented to a judgment: (1) permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder; (2) ordering him to pay disgorgement of $79,437, plus $28,711 of prejudgment interest, and a $238,311 civil penalty, for a total of $346,459; and prohibiting him from serving as an officer or director of a publicly held company for five years. In its complaint, the Commission alleged that in November 1998, Mr. Fruchtenbaum learned from internal company forecasts that in the upcoming fiscal year, American Greetings' revenues and earnings were likely to fall materially short of both public expectations and the company's own strategic forecasts. The Commission charged that in December 1998, Mr. Fruchtenbaum used this information to exercise options to buy American Greetings stock and then sell the acquired shares in same-day, cashless transactions. On February 24, 1999, American Greetings publicly announced that it expected revenues and earnings for the next fiscal year to be materially below prior expectations. That day, the price of the company's stock fell approximately 32%, from $35.06 to $23.875. The Commission alleged that Mr. Fruchtenbaum avoided material losses by selling his shares of American Greetings stock before the public announcement of the revenue and earnings forecasts. Mr. Fruchtenbaum consented to the entry of the judgment without admitting or denying the allegations in the complaint. AUTONATION INC.: Fairness Hearing For Pact Set August 2003 in FL ---------------------------------------------------------------- Final fairness hearing for the settlement of a class action against one of Autonation, Inc.'s subsidiaries has been set for August 2003 in Florida State Court. The subsidiary was accused of violating, among other things, the Florida Motor Vehicle Retail Sales Finance Act and the Florida Deceptive and Unfair Trade Practices Act by allegedly failing to deliver executed copies of retail installment contracts to customers of the Company's former used vehicle megastores. In October 2000, the court certified the class of customers the action would represent. In July 2001, Florida's Fourth District Court of Appeals upheld the certification of the class. The parties subsequently agreed on settlement terms involving the payment of cash and coupons towards the purchase of vehicles, the dollar value of which is not material. In April 2003, the Court preliminarily approved the settlement. AUTONATION INC.: Appeals Certification Of Federal Antitrust Suit ---------------------------------------------------------------- Autonation, Inc. appealed the Texas federal court's ruling granting class certification to the federal suit charging it and the Texas Automobile Dealers Association (TADA) with violations of antitrust and other laws. Three suits were filed charging three of the Company's Texas dealership subsidiaries and new vehicle dealerships in Texas that are members of the TADA with deceiving customers with respect to a vehicle inventory tax. In April 2002, in two actions (which have been consolidated) the state court certified two classes of consumers on whose behalf the action would proceed. In October 2002, the Texas Court of Appeals affirmed the trial court's order of class certification in the state action and the Company is appealing that ruling to the Texas Supreme Court. In March 2003, the federal court conditionally certified a class of consumers in the federal antitrust case. BELLSOUTH: Sued Over Guards' Cost Used During Miami Area Repairs ---------------------------------------------------------------- A lawsuit brought on behalf of two Miami-Dade consumers and businesses and seeking class action status, claims BellSouth has been collecting too much money from consumers to cover the cost of posting security guards while it does repairs underground in manholes, The Miami Herald reports. The lawsuit, which is seeking certification, would cover all BellSouth customers in Miami-Dade from July 1999 through at least mid-July of this year. A Miami-Dade ordinance requires that all companies working in manholes have a second person above ground for safety and security purposes. A spokeswoman for BellSouth said the company contracts with security guard firms to provide that second person above ground while a BellSouth repair technician goes underground. The county ordinance, said spokeswoman Marta Casa-Celeya, permits the company to pass on this cost to customers and to keep the fees it collects. Barbara Perez, the Miami attorney with Aronovitz Trial Lawyers, who filed the lawsuit, said she spent nearly a year researching BellSouth's billing practices before filing the suit. BERTELSMANN AG: German Court Blocks $17B Napster Suit ----------------------------------------------------- The German Federal Constitutional Court blocked the $17 billion class action charging German music company, Bertelsmann AG, of funding the Napster file-swapping service, Reuters reports. The Company owns the BMG family of record labels, the smallest of the big five record companies, with artists like Elvis Presley, The Strokes and Aretha Franklin. Napster was the biggest file-swapping service at its peak, with some 60 million users downloading songs while using its service. It was shut down in 2001, and eventually declared bankruptcy after a federal court ruled the service ran afoul of copyright laws. Three suits were filed in Manhattan federal court last year charging the Company of investing more than $100 million in the service in 2000 and 2001, thus perpetuating Napster's success. Record companies Universal Music and EMI, Plc filed two suits as well as several music publishers. Last week, the Company filed a motion to dismiss the suits, saying US copyright law did not permit recovery from a third- party lender for damages the labels failed to recover from Napster. The German court ruled that the suits could not be delivered to the Company because it could not rule out that the lawsuit would violate Bertelsmann's constitutional rights in Germany. "If lawsuits in (foreign) courts are obviously misused to bend a market player to one's will by way of media pressure and the risk of a court order, this could violate the German constitution," the court said in a statement late on Friday. The ruling will block delivery of the suits for six months. However, the court stated that it was only temporary and that a full hearing will be conducted to decide whether the suit was indeed unconstitutional. Bertelsmann could not immediately be reached for comment, Reuters reports. Attorneys for the music publishers were not available for comment. Since Bertelsmann has already filed court papers in New York acknowledging the suit and seeking to have it dismissed, the practical effect of the German court's ruling was not immediately clear. BRIDGESTONE/FIRESTONE: Recalled Tire Settlement Wins Approval ------------------------------------------------------------- A recent nationwide settlement agreement by Bridgestone/ Firestone North American Tire, which would resolve numerous class actions, filed after the company recalled three brands of tires in August 2000, has been presented to Beaumont, Texas, state District Judge Donald Floyd, who gave his preliminary approval, the Associated Press Newswires reports. The settlement will have to receive his final approval at a hearing not yet scheduled. As part of the proposed settlement agreement, Nashville, Tennessee based Bridgestone/Firestone has agreed to spend nearly $15.5 million on a consumer education and awareness campaign, which will span three years and focus on tire inflation, use, maintenance, driving safety and automobile maintenance. Firestone said it will pay $19 million in legal fees and $2,500 to each of the 45 plaintiffs. The settlement agreement also requires that for seven years Bridgestone/Firestone will manufacture certain tires with cap strips, nylon strips or other materials that provide better high-speed capacity. The class actions resolved as part of the settlement include those filed by Firestone ATX, ATX II and Wilderness AT customers, whose tires were among those investigated by the National Highway Traffic Safety Administration (NHTSA) in 2000, but who did not sustain personal injury or property damage. The NHTSA investigation involved about 59 million tires. Firestone recalled about 14.4 million tires in August 2000. The settlement allows anyone with the tires indicated above still on their vehicles to take them to a Firestone Tire and Service Center, where they will be replaced at no charge, and requires Firestone to set up a tire settlement hot line so those involved in the class actions can obtain information about the proposed remedies. Beaumont attorney Zona Jones represents Jefferson County resident Terri Shields, and filed the lawsuit on behalf of Ms. Shields and others similarly situated. Judge Floyd addressed the matter of the settlement class at the recent hearing at which he gave the settlement agreement preliminary approval. "This proposed settlement is present to the court after substantial litigation around the nation. The only way to resolve the issues raised by this litigation on a nationwide basis is through a settlement class like the one proposed here." Judge Floyd ruled at the hearing that Ms. Shields was a proper class representative for the "hundreds of thousands of purchasers, owners or lessors of the Firestone tires at issue." Judge Floyd further ruled that "Ms. Shields testified that she strongly believes that her lawsuit brings legitimate claims regarding what she believes to be the unsafe and defective nature of the Firestone tires at issue. She believes that prosecuting this lawsuit is the right thing to do with respect to her own interests, the interests of other tire settlement class members and also the interest of the general public as drivers and passengers on the roads and highways of this country. "As a purchaser of those Firestone tires, the court finds that she is clearly a member of the tire settlement class," Judge Floyd concluded. This settlement does not affect hundreds of personal-injury lawsuits still pending as a result of accidents involving the 6.5 million allegedly defective tires recalled in August 2000. CASELLA WASTE: NJ Court Grants Final Approval to Suit Settlement ---------------------------------------------------------------- The United States District Court for the District of New Jersey granted final approval to a settlement for the class action filed against KTI, Inc., which Casella Waste Systems, Inc. acquired, and: (1) Ross Pirasteh, (2) Martin J. Sergi, and (3) Paul A. Garrett The defendants are principal officers of KTI. The complaint purported to be on behalf of all shareholders who purchased KTI common stock from January 1, 1998 through April 14, 1999. The complaint alleged that the defendants made unspecified misrepresentations regarding KTI's financial condition during the class period in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. On April 6, 2000, the plaintiffs filed an amended class action, which changed the class period covered by the complaint to the period including August 15, 1998 through April 14, 1999. At a settlement conference held on September 27, 2002 the parties reached an agreement, which requires the defendants to pay $3.8 million in return for a full release. The court approved the settlement on January 24, 2003 and entered final judgment on March 31, 2003. CONNECTICUT: Court Monitor States DCFS Disobeyed Consent Decree --------------------------------------------------------------- A court monitor has found that Connecticut's Department of Children and Families (DCF) is violating a federal court order because it does not have enough workers to properly serve the children; therefore, the caseloads for social workers are too large, the Associated Press Newswires reports. DCF has been under the consent decree for 11 years, because of a 1989 class action that alleged the state had violated federal laws by not adequately protecting children in its care. Last year, US District Judge Alan H. Nevas approved an 18-month exit plan for the DCF, listing 22 goals for DCF to meet in order to free itself from court oversight. DCF was supposed to be fully in compliance with the caseload standard by February 1 of this year. However, the court monitor discovered on Thursday last week that DCF has not filled vacancies promptly after they occurred in order to maintain the required staffing level of 2,974. The monitor also found that many department social workers were carrying caseloads larger than the maximum allowed. As of July 10, 461 of the 949 case-carrying social workers had more than 20 cases. The plaintiffs in the class action have said that compliance with the court's order is a matter of basic safety for the children in DCF's care. "Abused and neglected children cannot be protected, their needs cannot be met, without an acceptable number of staff in the department and a manageable level of caseloads," said Ira Lustbader, assistant director at Children's Rights and co-council for the class of plaintiffs. Court Monitor Ray D. Sirry recommended new dates for DCF to be in compliance with the court order: August 1 for the staffing level and March 1, 2004, for the caseload standard. The proposed remedy should give the new DCF Commissioner and her team ample time to comply with the order, Mr. Sirry said. The monitor's findings and proposed remedy now go to Judge Nevas for approval. If Judge Nevas approves the monitor's recommendations, Mr. Lustbader said the plaintiffs will bring contempt of court charges against DCF if the agency fails to meet the new deadlines for compliance. COEUR D'ALENE: Plaintiffs File Amended Securities Lawsuit in ID --------------------------------------------------------------- Plaintiffs filed a second amended class action against Coeur d'Alene Mines Corporation in the Idaho District Court for the First District in Kootenai County, Idaho. The suit names as defendants companies that have been defendants in the prior Bunker Hill and natural resources litigation in the Coeur d'Alene Basin, by eight northern Idaho residents seeking medical benefits and real property damages from the mining companies involved in the Bunker Hill Superfund site. In October 2002, the court conducted a hearing on motions resulting in an order striking certain of the alleged causes of action from the complaint, and dismissing the complaint with leave to amend it. In January 2003, the plaintiffs filed an amended complaint. Certain of the defendants, including the Company, filed motions to dismiss the complaint. The court struck the amended complaint and a second amended complaint has been filed. While the Company believes the suit is without merit, at this early stage of the proceedings, the Company cannot predict the outcome of this suit. DEEP VEIN THROMBOSIS: Court Asked To Dismiss Australian's Claim --------------------------------------------------------------- Quantas and British Airways asked the Victorian Court of Appeal to dismiss a lawsuit filed by Sydney resident Brian Povey, seeking compensation after he developed deep vein thrombosis after a trip to London in February 2000, ABC News Online reports. Mr. Povey's suit blamed the cramped seating conditions onboard the two airlines for causing the clot. Lawyers for the airlines asserted that Mr. Povey traveled under normal flight conditions and there was no accident they are liable for under international legislation. They referred to a recent British court decision dismissing a class action against several airlines. EPHEDRA: FDA Contemplates Ban on Ephedra, After Link To Deaths -------------------------------------------------------------- The United States Food and Drug Administration (FDA) is seriously considering a ban on the diet drug ephedra, a herbal stimulant used in dietary supplements, which has reportedly caused deaths and myriad health problems for its users, the Associated Press reports. Ephedra, which can be used to lose weight and boost athletic performance, has been linked to as many as 100 deaths. Health problems can include strokes, heart attacks and seizures. In a testimony before two House Energy and Commerce subcommittees, FDA Commissioner Mark McClellan said the agency is considering a ban on the drug. He continued that the agency will first ensure that the evidence they were reviewing could support a ban under the law. The FDA is required to prove a dietary supplement is harmful rather than having the manufacturer prove it is safe. His agency had earlier touted the law as preventing them from banning dietary supplements. Lawmakers conducted two days of hearings, listening to scientists, health officials, representatives of pro sports leagues, parents of victims who died, and people from ephedra products companies. On Wednesday, Health and Human Services Secretary Tommy Thompson told AP makers of dietary supplements should have to tell the FDA about potential side effects, just as drug-makers do. He urged Congress to revise the 1994 law. Eugene Orza, the general associated counsel of the Major League Baseball Players Association said that the sport should not ban dietary supplements containing ephedra unless the government does. "The position of the players' association has long been that players should not be prohibited from using any substances that the United States government has effectively determined are not unsafe for consumption by other American consumers," he said. In February, Baltimore Orioles pitcher Steve Bechler, died while taking a supplement with ephedra. Other sports leagues do ban ephedra and test players to make sure they are not using the product. They include the National Football League and Major League Soccer, both of which sent representatives to Thursday's hearing. The head of a trade group representing makers of dietary supplements questioned the need for the hearings. "A wealth of scientific information, expert testimony and consumer input already exists, including reports commissioned by the FDA itself, that the agency can use to determine once and for all whether ephedra presents a hazard to public health," said David R. Seckman, executive director of the National Nutritional Foods Association. "Whatever the FDA's ultimate decision on ephedra, we urge the agency to utilize its powers . for a swift regulatory resolution that will put this debate to rest and make hearings such as these unnecessary," he said according to an AP report. ERIE INSURANCE: Court To Decide on Approval For Suit Settlement --------------------------------------------------------------- The Court of Common Pleas of Philadelphia County, Pennsylvania has yet to grant approval to the settlement of a class action filed against Erie Insurance Company and Erie Insurance Exchange, by a plaintiff who was involved in an accident that damaged her ERIE insured vehicle. The complaint alleges that ERIE acted improperly when it used non-original equipment manufacturer (non-OEM) parts in repairing the damage to the plaintiff's vehicle. In March 2002, the courts granted the plaintiff's revised motion for class certification. ERIE attempted to appeal the court order granting certification of the class. ERIE filed a Petition for Review with the Pennsylvania Superior Court. On August 8, 2002, the Superior Court denied ERIE's Petition for Review. ERIE then filed a Petition for Allowance of Appeal with the Supreme Court of Pennsylvania. On November 27, 2002, the Supreme Court denied ERIE's Petition for Allowance of Appeal. ERIE filed a Class Certification Joinder Complaint against several individuals and/or entities that are the manufacturers and/or distributors of non-OEM crash parts. The Joinder Complaint asserts causes of action against the manufacturers and/or distributors of the non-OEM parts. The Company and the plaintiffs have entered into a Settlement Agreement and a Motion for Preliminary Approval has been filed with the Court. Although the terms of the settlement are still subject to court approval, the terms of the settlement agreement call for ERIE to pay $6,250,000 into a Settlement Fund. ERIE is to pay the sum of $750,000 within 10 days of the court's entry of the Preliminary Approval Order. ERIE is to pay the remaining $5,500,000 into the Settlement Fund within 10 days of the Settlement Agreement becoming final. The terms of the Settlement Agreement specifically state that under no circumstances shall ERIE be required to make any other payment in connection with the settlement. The Court held a hearing on the motion for Preliminary Approval on June 5, 2003. The Court has not made a ruling on the motion for Preliminary Approval. As the likelihood of the settlement is probable, ERIE recorded an accrual in the estimated amount of $6,250,000 in March 2003. It is possible that the settlement will not be finalized and/or approved by the court. If the settlement is not finalized and/or approved by the Court, it is still too early to assess the probable outcome of the amount of damages of this civil class action. The Company believes that ERIE has meritoriously legal and factual defenses to the lawsuit and these defenses will be pursued vigorously if the court does not approve and/or finalize the settlement. FARMERS INSURANCE: TX Atty. General Forges Motorists' Settlement ---------------------------------------------------------------- Texas Attorney General Greg Abbott reached a settlement with Farmers Insurance Group that requires the company to refund an estimated $2.4 million to about 13,000 Texas motorists who may have paid more for vehicle repairs than was required under their policies. The settlement marks the ninth such settlement obtained since 2000 with major auto insurers, emphasizing again that companies such as Farmers may not deceive motorists who pay deductibles and make proper claims for vehicle repair work. This unlawful practice known as "betterment," an insurance industry term, involves supposedly increasing the value of a policyholder's vehicle by paying for repairs with better or newer parts. Companies such as Farmers have routinely reduced the amount to be paid to the motorist for repairs by an amount believed to equal the improved value of the vehicle because upgraded parts were installed, such as new rather than rebuilt transmissions. "Companies have used this perceived loophole in the standard Texas auto policy to rationalize their way into consumers' pocketbooks," said Attorney General Abbott. "They reasoned that if they increase the value of their policyholders' vehicles, then they should be able to deduct an amount for improving the value of the vehicle. Auto policies in Texas just do not allow for this kind of deception and we're fortunately seeing a turnaround in the industry." Under the settlement, Farmers will continue to refrain from deducting for betterment on its policyholders' claims. The company agreed to refund the amount charged for betterment, plus interest, to policyholders who had an auto repair claim paid from February 14, 1996, to the present. Farmers will mail checks directly to policyholders who had electronic estimates that indicated the company made these deductions for betterment. For those policyholders whose deductions cannot be identified though electronic estimates, Farmers will mail notices requesting that eligible persons make a written claim. If a policyholder makes a written claim, Farmers will review the claim file and send a refund check if the file indicates the company deducted for betterment. Farmers agreed that this settlement will not affect its insurance rates. Farmers will also pay $175,000 in attorneys' fees and other expenses to the Attorney General's office. HEARTLAND ADVISORS: Judge Approves Payments To Bond Fund Holders ---------------------------------------------------------------- US District Judge J.P. Stadtmueller signed an order recently approving distribution of money by Heartland Advisors Inc. to bond fund shareholders, The Milwaukee Journal Sentinel reports. This distribution arises out of the $14 million settlement of a class action brought by the bond fund shareholders against the mutual fund manager. Approved class members probably will receive a total of about $10.3 million after lawyers fees and reimbursements of nearly $3.7 million. The class members in the lawsuit were shareholders in two Heartland bond funds whose value plummeted by millions of dollars in October 2002. INVESTMENT TECHNOLOGY: SEC Files Suit For Securities Violations --------------------------------------------------------------- The United States Securities and Exchange Commission filed an injunctive action against Investment Technology, Inc., of Las Vegas, Nevada, its CEO and chairman, Thomas D. Vidmar, 55, and its securities counsel, Ulysses "Thomas" Ware, 42, of Atlanta, Georgia, alleging various federal securities laws violations, including violations of the anti-fraud and registration provisions, in connection with an alleged fraudulent scheme involving the company's stock and its purported on-line gambling casino. The complaint, filed with the United States District Court for the District of Nevada (Southern Division), alleges Mr. Vidmar and Mr. Ware falsely promoted Investment Technology in press releases and "analyst" reports as a leader in on-line gambling, even though its casino website never received wagers or generated revenues. The complaint also alleges Mr. Vidmar and Mr. Ware dumped millions of Investment Technology shares into the manipulated market and collectively realized more than $200,000 in unlawful profits, in part through offerings registered on invalid Form S- 8 registration statements. The complaint further alleges that Rosenfeld, Goldman & Ware, Inc., Mr. Ware's law firm, Small Cap Research Group, Inc., a Georgia corporation, and Centennial Advisors, LLC, a Georgia limited liability company, violated the anti-fraud provisions of the securities laws in connection with the Investment Technology promotions. LATINO REPARATIONS: Deportees Sue Over Deportation In Mid-30s ------------------------------------------------------------- In the mid-30s, during the depths of the depression, mass deportations of people of Mexican origin, whether citizens or not, took place in Los Angeles and in lesser degree in other cities in the United States. Approximately, 600,000 "Mexicans" - whole families - ended up in Mexico as a result of the deportations. Scholars studying this period estimate that 60 percent of the deportees were actually US citizens, the Contra Costa Times reports. The Mexicans were rounded up, ordered into boxcars and sent away. Emilia Castaneda, born in the United States, 77, is one of an uncertain number who made it back to the United States. She recently was in Sacramento testifying before a legislative committee looking into the mass deportations. Meanwhile, civil rights lawyers have filed a class action in Los Angeles against the city and state on behalf of Ms. Castaneda and 400,000 Mexican-Americans deported from California. Although President Roosevelt ended the federal deportations in 1933, after he took office, state and local governments continued the round-ups and deportations throughout the decade. In public gathering places across the country, anyone who looked Mexican could be stopped and asked to show papers to prove citizenship or residency. Railroads agreed to carry the deportees for half fare. Entire families were sent away. Emilia Castaneda, like many of the surviving Japanese-American internees, said the apology from the nation is more important than any money received by legal action. Ms. Castaneda said, "Somebody could say, 'We were wrong for the injustices committed to you and apologize for what was done,'" she added. "Maybe other people still in Mexico would hear about this and would come back." Just how many Mexican Americans remain in Mexico is uncertain. The 1995 book, "Decade of Betrayal," by scholars Francisco Balderrama and Raymond Rodriguez, recalls how America recruited Mexican workers during the Roaring 20s, turned against them during the depression and swept up citizens and whole families as the anti-immigrant hysteria grew out of control. NATIONAL FOOTBALL LEAGUE: Widow Of Vikings Player Files Lawsuit --------------------------------------------------------------- An attorney for the widow of Minnesota Vikings player Korey Stringer said she will sue the National Football League, alleging its policies led to her husband's heat-related death at training camp, the Associated Press Newswires reports. Attorney Stan Chesley said the federal lawsuit will include a class action claim on behalf of all NFL players, as well as a wrongful death claim on behalf of widow Kelci Stringer and her son. "What's on trial here are the rules and procedures and the culture" of the NFL, said Mr. Chesley. "Frankly, it is no coincidence that the average football player in the NFL plays for 4 1/2 years. They use them and spit them out." Mr. Chesley said the lawsuit is designed to make the league change its procedures for the mandatory training camps. The NFL has said it already has made changes. The lawsuit, first reported by the New York Times, also will name football helmet maker Riddell Sports Group Inc. and some NFL medical advisers as defendants. He would not disclose where the lawsuit will be filed. Korey Stringer collapsed during training camp on July 31, 2001, in sweltering heat and humidity. The 335-pound lineman's body temperate was 108.8 degrees when he arrived at the hospital. He died 15 hours later. Kelci Stringer already filed a $100 million wrongful-death lawsuit against the Vikings and the team's training camp physician David Knowles. In April, a Hennepin County District Court judge dismissed Mrs. Stringer's claims against the team. She later settled with Dr. Knowles for an undisclosed sum. Mrs. Stringer's attorneys said at the time they planned to ask the state appeals court to reinstate the claims against the Vikings. Mr. Chesley said the league wanted a 335-pound player like Korey Stringer, but then did little to protect him in the heat that led to his death. He also said the league sets the procedures for the mandatory training camps. Before training camp opened in 2002, the NFL consulted with several experts and held a series of discussions and seminars on the subject. The league has banned the herbal stimulant ephedra and began random testing for it last summer after learning that dietary supplements increased the risk of heat-related illnesses. A bottle of Ripped Fuel, which contains ephedra, was found in Mr. Stringer's locker after his death. Mr. Stringer's remains were not tested for the substance during investigations into his death. OKLAHOMA: Oklahoma City School District Sued Over Overdue Bills --------------------------------------------------------------- The Oklahoma City school district has been sued by three business owners for payment of overdue bills and could face more legal action, the Associated Press Newswires reports. One of the businesses, Belle Starr Tours wants its case designated as a class action on behalf of all people or entities that have provided goods or services in the district but have "not been timely paid." Although Belle Starr Tours is itself owed $798, the Daily Oklahoman reported recently that financial records showed the school district owed more than $3 million to about 400 individuals and companies for bills that are now more than a year past due. The Belle Starr Tours lawsuit names individual school board members as defendants, along with the district, school board, new superintendent Robert Moore and other unidentified school officials. The lawsuit cites a state law that says individual board member can be held personally liable for payment of school if they have created a deficit by authorizing expenditures in excess of revenues. The same state law states that certain school officials could be held personally responsible for school debts if they have entered into contracts without board approval. Although the school attorneys do not dispute that the school district owes Belle Starr Tours $798 for unpaid workshop fees, plus costs, they argue that a judge should not grant the lawsuit class action status. The other two business owners are Youth Services for Oklahoma County is seeking $127,479 and Citi-capital Technology Finance is asking for $39,964, court documents show. School district officials have been ordered to reconcile all accounts and file an audit report by April 1, but they were forced to file a "disclaimer" audit opinion after auditors could not balance the district's books. TELECOMMUNICATIONS INDUSTRY: Fiber-Optic Lawsuit Gets Approval -------------------------------------------------------------- US District Judge Wayne R. Andersen gave preliminary approval to the settlement in a class action under which four phone companies would pay an estimated $142 million to some 360,000 owners of land across the country where fiber-optic cables have been placed, the Dow Jones Business News reports. Judge Andersen also issued an order at the recent hearing putting on hold 43 similar class actions in federal and state courts. The named defendants in the class action are Sprint Corporation, Qwest Communications International Inc., Level 3 Communications Inc. and WilTel Communications Group Inc. The companies paid railroads to allow placement of fiber-optic cables along their tracks; only to find the railroads did not own the land. Further, the easements the railroads received from the landowners, allowing them to lay their tracks, made no provision for fiber-optic cable. Some of the easements date back for more than a century to the time they were granted to the railroads. Attorney said no one knows for sure the number of property owners who will be eligible for payments of $2 per linear foot for those who can provide proof of ownership of rights of way. The best estimate is 360,000, said the attorneys. This figure has been calculated by assuming there are 10 property owners along every 360 miles of cable. Under the terms of the settlement, those who claim to own the land but have a weaker level of proof can still get 33 cents a foot. The settlement would become final in nine months after all parties have a chance to respond. Property owners are free to opt out of the settlement if they want to fight an individual battle in the courts. UNITED STATES: Cases Consolidated, Order To Reduce Flow Stayed -------------------------------------------------------------- A panel of federal judges recently moved to end confusion in the courts by putting a judge in Minnesota in charge of a half-dozen of Missouri-river related cases, the St. Louis Post-Dispatch reports. The Judicial Panel on Multidistrict Litigation, which met in Portland, Maine, transferred the court cases, which had been brought in several jurisdictions relevant to reduction of the river's flow, to the US District Court of Minnesota. Cases had been brought by conservation groups aimed at protecting endangered species, the barge industry and upstream states trying to secure more water for their reservoirs, among others. The cases were assigned to Judge Paul Magnuson, a senior judge appointed to the federal bench in 1981 by President Ronald Reagan. Not least among these transferred cases was that brought by the Justice Department asking the Minnesota judge to stay a court order that will fine the Army Corps of Engineers $500,000 a day if it refuses to reduce the river's flow to protect endangered species. US District Judge Gladys Kessler of the District of Columbia had issued the low-flow injunction on July 12. Last Tuesday, Judge Kessler cited the Corps for contempt and ordered the fines to commence last Friday unless the Corps reduces the amount of water entering the lower river through Gavins Point Dam in South Dakota. The case before Judge Kessler was one of the six cases moved to Minnesota. The Corps had refused the order, citing a contradictory injunction from a Nebraska court requiring water at sufficient depth for barges. The Nebraska case, also, has been transferred to Minnesota. The consolidation is aimed at resolving the jurisdictional disputes that have arisen out of the conflicting orders governing water levels in the Missouri. For the moment, the Corps of Army Engineers faces its quandry. Corps spokesman Paul Johnston said recently that Army engineers were still trying to sort out the meaning of the consolidation and had made no decision on how it will respond to Judge Kessler's ultimatum. The Justice Department has moved in still another direction by seeking relief for the Corps from the 8th US Circuit Court of Appeals in St. Louis. In Judge Kessler, the coalition of conservation groups, such as American Rivers and Environmental Defense, which had sued the Corps, had found a friendly ear. Timothy Searchinger, a lawyer for Environmental Defense who took part in the hearing in Maine, said the conservation groups "are not necessarily upset by this (the consolidation). Our main concern is that it disrupts the flow of the case given the fact that we have endangered species threatened right now." Mr. Searchinger added, "The silver lining is that it (the six cases) was sent to a neutral forum." This was also the point of view of Christopher Brescia, president of MARC 2000, a trade association that represents the navigation industry and other commercial interests. Mr. Brescia said he was pleased by the consolidation. "Maybe the legal system will work now and the right hand will know what the left hand is doing," said Mr. Brescia. Congress established the Judicial Panel on Multidistrict Litigation in 1968, as a means to help the federal courts run more smoothly by avoiding duplication and confusion, particularly in class actions. US NAVY: DC Court Expands Class in Chaplains Discrimination Suit ---------------------------------------------------------------- The United States District Court for the District of Columbia expanded the scope of a discrimination suit filed against the United States Navy, over the promotions of every evangelical in its Chaplain Corps since 1977, the European and Pacific Stars and Stripes reports. The suit alleges that the US Navy unfairly promoted Roman Catholics and mainline Protestants ahead of evangelicals, thus the resulting mix fails to represent the religious preferences of sailors. The suit seeks an overhaul of the system, a review of past promotions and the repair of any injustices occurring over the years, which could theoretically result in retroactive promotions and back pay, though the chaplains say they aren't after money. The evangelicals initially alleged that the discrimination began in late 1980, when the Navy implemented the "the thirds policy" - a purposeful organizing of the Christian element of the Chaplain Corps into one-third Catholic, one-third Mainline or "liturgical" Protestant and one-third evangelical, or "nonliturgical." The Navy has denied the existence of such policy. The ruling allows the class of former and present chaplains to increase to 2,000 by widening the span of time under scrutiny. Navy policy prevents it from discussing pending suits, but the service denies it operates under any bias. "The Chaplain Corps is comprised of a dynamic group of officers and enlisted personnel whose purpose is to facilitate the faith needs of everyone in the sea services," Lt. Jon Spiers, a spokesman for the chief of naval personnel told the Stars and Stripes. "The Navy sees what the Chaplain Corps does as a fundamental element of mission readiness. What they do is tremendously important each and every day." Whoever is right, an attorney representing the evangelicals hails the decision as a victory. "It makes my job much easier," attorney Arthur Schulcz said from Washington, D.C. "And it really addresses the full scope of the predicament." The chaplains are also backed by The Rutherford Institute, the legal foundation that represented Paula Jones in her sexual harassment suit against former President Clinton, Stars and Stripes reports. The Justice Department is handling the Navy's defense. Charles Miller, department spokesman, said he is unable to comment on the case. WAL-MART STORES: Hearing Over Lawsuit Certification Rescheduled --------------------------------------------------------------- US District Court Judge Martin Jenkins recently rescheduled a hearing on whether to elevate the lawsuit brought by six women against Wal-Mart Stores Inc. into a nationwide class action representing 1.5 million current and former employees, Associated Press Newswires reports. Judge Jenkins set the new hearing date for September 24, in the US District Court in San Francisco. Wal-Mart, the nation's largest private employer, was accused in June of "rampant" discrimination against female workers in a federal lawsuit. If granted class-action status, the lawsuit would become the nation's largest sex discrimination case against a private employer. The lawsuit contends that competing retail stores have nearly double the number of women in management and that male Wal-Mart workers get higher pay than women for the same duties. The lawsuit claims further that the company passes over women for promotions and training and retaliates against women who register complaints about such behaviors. The plaintiffs, who are seeking to change the company's allegedly discriminatory practices, have not specified how much money in damages they are seeking. "We don't have a specific number in mind. There are various economic models you can use to compute lost earnings, but we don't have a specific number in mind," said Joseph Sellers, an attorney for the plaintiffs. William Wertz, a spokesman for the Bentonville, Arkansas-based retailer, said that women hold positions of significant responsibility at Wal-Mart. New Securities Fraud Cases BLUE RHINO: Scott + Scott Launches Securities Lawsuit in C.D. CA ---------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Blue Rhino Corporation (Nasdaq: RINO) securities during the period between August 15, 2002 and February 5, 2003. Scott + Scott, LLC filed this complaint against the defendants for violations of federal securities laws and did so at the request and as authorized by a shareholder. For more details, contact David R. Scott or Neil Rothstein by Mail: 108 Norwich Avenue, Colchester, Connecticut 06415 by Phone: 800/404-7770 by Fax: 860/537-4432 by E-mail: drscott@scott-scott.com or nrothstein@scott-scott.com or visit the firm's Website: http://www.scott-scott.com CITIGROUP INC.: Towe Ball Launches Securities Fraud Suit in MT -------------------------------------------------------------- Sean A. Udall, on behalf of himself and other former employees of Salomon Smith Barney, and other Citigroup subsidiaries filed an action against these corporations seeking return of their earned compensation forfeited when they left the company. The complaint alleges a scheme in violation of the Securities Exchange Act of 1934. The defendants induced their employees to purchase CAP Plan Stock (restricted stock in the parent company) and then forfeited this stock when they left the company's employment. The complaint alleges that no restricted stock was, in fact, issued and the employees received nothing but a book entry until the time after which the restrictions were supposed to be lifted. Even though the defendants held a fiduciary relationship with their employees as a result of this account, they used this scheme to their corporate financial benefit at the expense of the former employees. The lawsuit, Case No. CV-03-116-BLG-RWA, was filed in the United States District Court of the District of Montana in Billings, on July 14, 2003. It seeks damages for violations of the Federal Securities Law on behalf of the employees who invested in the CAP Plan and later forfeited their investment. It covers all employees from the inception of the CAP Plan in 1989 to the present. The 41-page Complaint was filed by a national legal team consisting of Thomas E. Towe, of Towe, Ball, Enright, Mackey & Sommerfeld, P.L.L.P., Billings, Montana, Richard L. Coffman, P.C. of Beaumont, Texas, Wyatt B. Durrette, Jr. of Durrette Bradshaw, P.C. of Richmond, Virginia and other prominent law firms from Utah, Tennessee, Alabama, and Arkansas. For more details, contact Thomas E. Towe by Mail: 2525 Sixth Avenue North, P.O. Box 30457, Billings, MT 59107-0457 by Phone: 406-248-7337 by Fax: 406-248-2647 or by E-mail: towe@tbems.com CREE INC.: Cohen Milstein Files Securities Fraud Suit in M.D. NC ---------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class action in the United States District Court for the Middle District of North Carolina, on behalf of persons who purchased or otherwise acquired the securities of Cree, Inc. (Nasdaq:CREE) during the period from July 24, 2001 through June 13, 2003. The suit names the Company as a defendant, along with: (1) Charles Swoboda, Cree's CEO; (2) Cynthia Merrell, Cree's CFO and Chief Accounting 0fficer; and (3) F. Neal Hunter, Chairman of the Board of Directors The complaint asserts securities fraud claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that Cree issued a series of materially false and misleading statements in press releases and SEC reports, thereby inflating its results and stock price during the class period. In particular, Cree issued press releases announcing results for its fiscal fourth quarter 2001, fiscal year 2002, and first three fiscal quarters of 2003 and filed financial reports with the SEC reporting on its results during such quarters. These press releases and SEC filings were materially false and misleading when made because they failed to disclose that: (i) a material portion of the Company's revenues were generated from sales that were not at "arms length," but rather were with related entities and therefore did not reflect the true demand for Cree's products; (ii) Cree failed to implement and maintain an adequate internal accounting control system; (iii) since 2002, Eric Hunter, the Company's former President, CEO and Chairman had warned the Company's board of directors that Cree was improperly accounting for transactions with related entities and was issuing and filing materially false and misleading press releases and financial reports; and (iv) a material portion of Cree's reported sales were improperly recognized and reported in the Company's financial statements in violation of Generally Accepted Accounting Principles during the class period. The market first became aware of Cree's improper revenue recognition practices on June 13, 2003, when Cree announced that Eric Hunter had filed a private action accusing the Company of violating the federal securities laws. In response to this news, the price of Cree common stock fell 18.5% in one day, from $22.21 per share on June 12, 2003 to $18.10 per share on June 13, 2003. For more details, contact Steven J. Toll or Lisa Polk by Mail: 1100 New York Avenue, NW West Tower, Suite 500, Washington, DC 20005 by Phone: 888-240-0775 or 202-408-4600 or by E-mail: stoll@cmht.com or lpolk@cmht.com CREE INC: Schatz & Nobel Commences Securities Fraud Suit in NC -------------------------------------------------------------- The law firm of Schatz & Nobel, P.C. initiated a securities class action in the United States District Court for the Middle District of North Carolina on behalf of all persons who purchased the common stock of Cree, Inc. (Nasdaq: CREE) between August 19, 1998 and June 13, 2003, inclusive. The Complaint alleges that Cree and certain of its officers and directors issued materially false and misleading statements about Cree's business during the Class Period. Specifically, the Complaint alleges defendants manipulated Cree's financial results using transactions between Cree and an affiliated company C3, Inc. Details of the improper transactions are contained in a complaint filed by the brother of the Chairman of Cree's Board of Directors. When these facts were made public on June 13, 2003, the market price of Cree's common stock fell over 18% in one day. For more details, contact attorneys Andrew M. Schatz or Wayne T. Boulton by Phone: (800) 797-5499, or by E-mail: sn06106@aol.com, or visit the firm's Web site: http://www.snlaw.net DIVINE INC.: Stull Stull Lodges Securities Fraud Suit in N.D. IL ---------------------------------------------------------------- Stull, Stull & Brody initiated a securities class action in the United States District Court for the Northern District of Illinois, Eastern Division, on behalf of purchasers of divine, inc. (OTC:DVINQ.PK) securities between September 17, 2001 through and including February 18, 2003 defendants Andrew J. Filipowski and Michael P. Cullinane. The complaint charges defendants Andrew J. Filipowski (Chief Executive Officer and Chairman of the Board of Directors) and Michael P. Cullinane (Chief Financial Officer and Executive Vice President) with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and with violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. Throughout the class period, defendants issued a series of material misrepresentations to the market between September 17, 2001, and February 18, 2003, which served to artificially inflate the price of divine securities. As alleged in the complaint, defendants made material misrepresentations in a Registration Statement and Joint Prospectus which was filed with the Securities & Exchange Commission in connection with, inter alia, the merger which was consummated on or about October 23, 2001 between divine, inc. and eshare communication, inc. Defendants, in the Merger Proxy/Prospectus, which incorporated by reference certain of divine's financial statements, materially overstated the value of many of their acquisitions which had deteriorated substantially post-acquisition, thus causing the Company's financial results to be materially overstated. In addition the Complaint states that: (1) divine was engaged in a scheme of inflating its revenues by approximately $65 million by instructing employees of its wholly-owned subsidiary, RoweCom, Inc. to offer discounts to library customers that paid cash in advance -- months before payments were due to publishers -- even though divine had no plan to pay its obligations to publishers; (2) divine was fraudulently diverting nearly $74 million from RoweCom's operations; (3) divine lacked adequate financial and internal controls with respect to its RoweCom operations; and (4) as a result of the foregoing, divine lacked a reasonable basis to project profitability by year-end or an ability to maintain its operations without bankruptcy protections. For more details, contact Howard T. Longman by Phone: 1-800-337-4893 INTERMUNE INC: Schiffrin & Barroway Files Lawsuit in N.D. CA ------------------------------------------------------------ The law firm of Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of InterMune Inc. (Nasdaq:ITMN) from October 24, 2002 through June 11, 2003, inclusive. The complaint charges InterMune and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants made false and misleading statements about one of the Company's leading products, Actimmune. Specifically the complaint alleges that defendants were aware that: (a) InterMune's estimated number of patients on Actimmune, disclosed throughout the Class Period as an accurate and valid means by which to register the level of strength of the demand for Actimmune, was "inherently" unreliable, inconsistent, and lacking in any accountable basis for presentation; (b) there had been disruptions and problems with InterMune's sales and marketing efforts, including extraordinary turnover and lack of proper training; (c) since at least the fourth quarter of fiscal 2002, InterMune was materially understating the level of inventory being held by its distributors, of which millions of dollars worth was being held in excess, and materially overstating its revenues; (d) InterMune lacked adequate and sufficient internal controls and systems; and (e) based on the foregoing, InterMune had no reasonable basis to issue its financial and operational projections. On June 11, 2003, the Company announced that it was cutting its 2003 revenue guidance figures and slashing projected earnings from Actimmune. The Company also announced it had overstated the number of patients using Actimmune and that, contrary to its earlier representations, demand for Actimmune from physicians was flat. On news of this, the Company's stock price fell 33% to close at $16.74. For more information, contact Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, by Phone: (toll free) 1-888-299-7706 or 1-610-667-7706, or by E-mail: info@sbclasslaw.com. POLYMEDICA CORPORATION: Brodsky & Smith Files MA Securities Suit ---------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who purchased the common stock and other securities of PolyMedica Corporation (NasdaqNM:PLMD) between, July 23, 2001 and June 30, 2003 inclusive. The lawsuit was filed in the United States District Court for the District of Massachusetts. The complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of the Company's securities. Specifically, the complaint alleges that throughout the class period, PolyMedica understated its operating expenses and overstated its assets, thus creating a false impression of efficiency with the overall effect being that PolyMedica misled investors concerning its growth and earnings. For more details, contact Marc L. Ackerman or Evan J. Smith by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-90 or by E-mail: clients@brodsky-smith.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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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