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/raid1/www/Hosts/bankrupt/CAR_Public/031104.mbx C L A S S A C T I O N R E P O R T E R Tuesday, November 4, 2003, Vol. 5, No. 218 Headlines AUTONATION INC.: FL Court Approves Settlement of Consumer Suit AUTONATION INC.: Reaches Settlement For Three TX Consumer Suits CCC INFORMATION: IL Consumer Lawsuit Dismissed Without Prejudice CCC INFORMATION: Dismissed As Defendant in GA Consumer Lawsuit CCC INFORMATION: GA Court Dismisses Three Consumer Fraud Suits CCC INFORMATION: Faces Two Consumer Fraud Lawsuits in IL Court CHARGETEK INC.: Battery Charger Recall Ends with No Legal Claims COMMONWEALTH EDISON: IL Court Approves Consumer Suit Settlement COOPER CAMERON: Faces Three Suits Over Contaminated Water in TX CORNING INC.: NY Court Yet To Dismiss Firm From Injury Lawsuits CORNING INC.: Renews Motion For Summary Judgment in Stock Suit CORNING INC.: Arguments on Amending Securities Suit Heard in NY CREE INC.: Ex-CFO Seeks Dismissal of Securities Claims in Suits ERIE FAMILY: Policyholders Lodge Consumer Fraud Suit in PA Court EVERGREEN RESOURCES: Royalty Owners Sue Over Unpaid Royalties FREEMARKETS INC.: Plaintiffs Ask PA Court To Certify Stock Suit FREEMARKETS INC.: Reaches Settlement For NY Securities Lawsuit HOLLYWOOD ENTERTAINMENT: Satisfies Claims in Overtime Settlement HOLLYWOOD ENTERTAINMENT: Faces Suits Over Rental Fees in IL, WA IDT CORPORATION: Discovery Continues in WARN Violations Suit IDT CORPORATION: Plaintiffs Seek Certification For Consumer Suit IDT CORPORATION: Discovery Proceeds in FL Consumer Fraud Lawsuit IDT CORPORATION: JPMDL Orders Consumer Suits Consolidated in NJ IDT CORPORATION: Status Conference Held For NJ Consumer Lawsuit IDT CORPORATION: Faces Consumer Fraud Suit Pending in TX Court IDT CORPORATION: Faces Consumer Fraud Lawsuit Filed in NJ Court INSURANCE FIRMS: Court Refuses Certification for Consumer Suit MEDICAID: Five Charged With 130 Felony Counts In FL Dental Scam OMEGA PROTEIN: Shareholders Commence Securities Suit in TX Court PUBLIC SERVICE: Mount Laurel, NJ Residents Sue Over Gas Meters RAMBUS INC.: CA Court Dismisses Suit for Securities Violations RAMBUS INC.: Decision in CA Suit Dismissal Expected By mid-2004 T. ROWE PRICE: Faces Mutual Fund Fraud Lawsuit in IL State Court New Securities Fraud Cases EMERSON RADIO: Bernstein Liebhard Lodges Securities Suit in NJ NATIONAL AUSTRALIA: Bernstein Liebhard Files Stock Lawsuit in NY ********* AUTONATION INC.: FL Court Approves Settlement of Consumer Suit -------------------------------------------------------------- Florida State Court approved the settlement for the class action filed against one of Autonation, Inc.'s subsidiaries, alleging violations of the Florida Motor Vehicle Retail Sales Finance Act and the Florida Deceptive and Unfair Trade Practices Act. The Company allegedly failed 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 on whose behalf the action would proceed. 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. AUTONATION INC.: Reaches Settlement For Three TX Consumer Suits --------------------------------------------------------------- Autonation, Inc. reached a settlement for three class actions filed against many of its Texas dealership subsidiaries, the Texas Automobile Dealers Association (TADA) and approximately 700 new vehicle dealerships in Texas that are members of the TADA. The three actions allege that since January 1994, Texas dealers have deceived customers with respect to a vehicle inventory tax and violated federal antitrust and other laws as well. 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. The Company is appealing the ruling. While these appeals have been pending, the plaintiffs and certain key defendants, including the Company's Texas dealerships, have reached an understanding on proposed settlement terms for all three cases that would provide for distribution to class members of certificates that are redeemable, with a variety of limitations, for vehicle service discounts or discounts for the purchase of vehicles from the settling dealerships in Texas. The proposed settlement is subject to various conditions that are outside the Company's control, including obtaining a specified level of participation from defendant dealerships in Texas by November 13, 2003 and court approval, neither of which is certain at this time. Although difficult to estimate, if a final settlement is reached on the proposed settlement terms, the anticipated cost of the settlement to the Company would be up to approximately $7 million, including the estimated value of the coupons that would be redeemed at the Company's dealerships and the Company's share of fees and notice costs payable in connection with the settlement. There can be no assurance, however, that a final settlement will be reached and approved by the courts on the proposed settlement terms or at all, or that the ultimate cost of settlement to the Company will not exceed the Company's estimate as stated above. If the TADA cases are not settled, the Company intends to vigorously defend itself and assert available defenses. Further, the Company may have certain rights of indemnification with respect to certain aspects of the TADA matters. However, an adverse resolution of the TADA matters may result in the payment of significant costs and damages, which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows and prospects. CCC INFORMATION: IL Consumer Lawsuit Dismissed Without Prejudice ---------------------------------------------------------------- The Circuit Court for the Cook County of Illinois dismissed without prejudice a class action filed against CCC Information Services, Inc. and Guaranty National Insurance Company, styled "GIBSON v. ORIONAUTO, GUARANTY NATIONAL INS. CO. and CCC INFORMATION SERVICES INC., No. 99 CH 15082." The suit raises issues regarding the use of the Company's CCC Valuescope valuation service by its insurance company customers. The plaintiff later agreed to non-suit the case, and on September 16, 2003, the court entered an agreed order of dismissal. CCC INFORMATION: Dismissed As Defendant in GA Consumer Lawsuit -------------------------------------------------------------- The State Court of Fulton County, Georgia dismissed the class action filed against CCC Information Services, Inc., styled "HUTCHINSON v. ALLSTATE INSURANCE COMPANY, BRANCH BANKING & TRUST COMPANY, SADISCO CORPORATION and CCC INFORMATION SERVICES INC., Civil Action No. 02VS027697-C," over issues regarding the use of the Company's CCC Valuescope valuation service by its insurance company customers. The suit also names as defendants: (1) AllState Insurance Company, (2) Branch Banking & Trust Company, and (3) Sadisco Corporation. On October 3, 2003, the court entered an order granting the Company's motion to dismiss and dismissing the plaintiff's claims against the Company with prejudice. CCC INFORMATION: GA Court Dismisses Three Consumer Fraud Suits -------------------------------------------------------------- The State Court of Fulton County, Georgia dismissed three putative class actions filed against CCC Information Services, Inc. over the use of the Company's CCC Valuescope valuation service by its insurance company customers. The suits are: (1) "McGOWAN v. PROGRESSIVE CASUALTY INS. CO., PROGRESSIVE INS. CO., and CCC INFORMATION SERVICES INC., Case No. 00VS006525," filed June 16, 2000; (2) "DASHER v. ATLANTA CASUALTY CO. and CCC INFORMATION SERVICES INC., Case No. 00VS006315" (filed June 16, 2000); and (3) "WALKER v. STATE FARM MUTUAL AUTOMOBILE INS. CO. and CCC INFORMATION SERVICES INC., Case No. 00VS007964 (filed August 2, 2000)," CCC INFORMATION: Faces Two Consumer Fraud Lawsuits in IL Court -------------------------------------------------------------- CCC Information Services, Inc. faces two class actions filed in the Circuit Court of Madison County, Illinois, captioned "KMUCHA v. COLONIAL PENN INSURANCE a/k/a GE PROPERTY AND CASUALTY INSURANCE COMPANY and CCC INFORMATION SERVICES INC., Case No. 03 L 1267" and "JACKSON v. ATLANTA CASUALTY COMPANY and INFINITY PROPERTY & CASUALTY CORPORATION and CCC INFORMATION SERVICES INC., Case No. 03 L 1266." Each plaintiff alleges that his/her insurance company, using a valuation prepared by CCC, offered an inadequate amount for his/her automobile. Each plaintiff seeks to represent a nationwide class of the customers of the insurance company that is the defendant in that case who, during the period from September 18, 1993, up to the date of trial, had their total loss claims settled using a valuation report prepared by the Company. Each plaintiff asserts various common law and contract claims against the defendant insurance companies and various common law claims against the Company. Each plaintiff seeks an unspecified amount of compensatory and punitive damages, as well as an award of attorney's fees and costs. The Company intends to vigorously defend its interests in all of the lawsuits. Due to the numerous legal and factual issues that must be resolved during the course of the litigation, the Company is unable to predict the ultimate outcome of any of these actions. If the Company were held liable in any of the actions (or otherwise concludes that it is in CCC's best interest to settle any of them), it could be required to pay monetary damages (or settlement payments). Depending upon the theory of recovery or the resolution of the plaintiff's claims or contribution by CCC's customers in any of the actions, these monetary damages (or settlement payments) could be substantial and could have a material adverse effect on CCC's business, financial condition or results of operations. CHARGETEK INC.: Battery Charger Recall Ends with No Legal Claims ---------------------------------------------------------------- The US Consumer Product Safety Commission has advised Chargetek Inc., that no further monitoring of the company's voluntarily recall of 200 CT-2000 battery chargers a year ago is warranted. The Company received a letter from Marc J. Schoem, the Director of the CPSC's Recalls and Compliance Division on September 11, 2003, confirming that action. A copy of that letter is available at no charge at http://bankrupt.com/misc/chargetek.pdf. "Our recall has been officially ended by the Consumer Product Safety Commission," Chargetek President Lou Josephs confirmed this week. "Fortunately, there has been no property damage or injuries as a result of the defect and the problem has been corrected." As previously reported in the Class Action Reporter on September 16 and 24, 2002, the company's CT-2000 battery chargers were used in recreational vehicles, such as boats. A manufacturing defect inside the charger could cause overheating of internal connections or external wiring, presenting a fire hazard. Chargetek received three reports of fires involving the CT-2000. The fires were contained to the charger with minor soot damage to nearby materials. Specialty product dealers sold the CT-2000 chargers nationwide from January 2001 to June 2002 for between $220 and $260. Consumers were advised to stop using and disconnect the AC power and the batteries from the chargers. Chargetek offered free replacements to consumers contacting Chargetek at 888-453-4135. Chargetek continues to encourage owners of the CT-2000 charger to return the product if they haven't done so already. "Amazingly," Mr. Josephs relates, "some people said they did not want to return it because it was working fine or they just 'never got to it.'" Chargetek -- http://www.chargetek.com-- is a privately held OEM manufacturer based in Camarillo, California. Chargetek specializes in standard and custom battery chargers. Manufacturing is done mainly in the USA with some product sub- assemblies manufactured in Taiwan. Chargetek has a broad range of power supply and battery charger engineering experience allowing quick turn customs from specification to production units. COMMONWEALTH EDISON: IL Court Approves Consumer Suit Settlement --------------------------------------------------------------- The Circuit Court of Cook County, Illinois approved the settlement proposed by the Commonwealth Edison Company for the consolidated class action filed against it, seeking damages for personal injuries, property damage and economic losses related to a series of service interruptions that occurred in the summer of 1999. The combined effect of these interruptions resulted in over 168,000 customers losing service for more than four hours. The court approved conditional class certification for the sole purpose of exploring settlement. The Company filed a motion to dismiss the complaints. On April 24, 2001, the court dismissed four of the five counts of the consolidated complaint without prejudice and the sole remaining count was dismissed in part. On June 1, 2001, the plaintiffs filed a second amended consolidated complaint and the Company has filed an answer. On December 5, 2002, a settlement was reached, whereby the Company will pay up to $8 million, which includes $4 million paid to date. In an order dated October 3, 2003, the court approved the settlement. A portion of the settlement may be covered by insurance. The Company has remaining reserves of approximately $3 million related to unpaid claims and costs. COOPER CAMERON: Faces Three Suits Over Contaminated Water in TX --------------------------------------------------------------- Cooper Cameron Corporation is a named defendant in three lawsuits regarding contaminated underground water in a residential area adjacent to a former manufacturing site of one of its predecessors. In "Valice v. Cooper Cameron Corporation," filed in the 80th Judicial District Court, Harris County, Texas, the plaintiffs claim that the contaminated underground water has reduced property values and threatens the health of the area residents and request class action status which, to date, has not been granted. The plaintiffs seek an analysis of the contamination, reclamation, and recovery of actual damages for the loss of property value. In "Oxman vs. Meador, Marks, Heritage Texas Properties, and Cooper Cameron Corporation," and "Kramer vs. Cameron Iron Works, Inc., Cooper Industries, Inc., Cooper Cameron Corporation, Tsunming Hsu and Shan Shan Hsu," filed in the same court, the plaintiffs, purchasers of property in the area, allege harm as a result of the underground water contamination and a failure by the defendants to disclose the presence of contamination, and seek to recover unspecified monetary damages. The Company has been and is currently working with the Texas Commission of Environmental Quality and continues to monitor the underground water in the area. The Company is of the opinion that there is no risk to area residents and that the lawsuits essentially reflect concerns over possible declines in property value. The Company believes, based on its review of the facts and law, that any potential exposure from these, or similar, suits will not have a material adverse effect on its results of operations, financial condition or liquidity. CORNING INC.: NY Court Yet To Dismiss Firm From Injury Lawsuits --------------------------------------------------------------- The United States District Court for the Eastern District of New York has yet to release an order dismissing Corning, Inc. from two class actions asserting various personal injury and property damage claims against it and several other corporate defendants. These claims allegedly arise from the release of toxic substances from a Sylvania nuclear materials processing facility near Hicksville, New York. Amended complaints naming 205 plaintiffs and seeking damages in excess of $3 billion were served in September 2002. The sole basis of liability against the Company was plaintiffs' claim that Corning was the successor to Sylvania-Corning Nuclear Corporation, a Delaware corporation formed in 1957 and dissolved in 1960. The company vigorously contested all claims against it for the reason that Corning is not the successor to Sylvania-Corning. Management also defended on the grounds that almost all of the wrongful death claims and personal injury claims are time- barred. At a status conference in December 2002, the court decided to "administratively close" the cases and ordered plaintiffs' counsel to bring new amended complaints with "bellwether" plaintiffs. In these actions, known as Schwinger II and Astuto, the plaintiffs have not named Corning as a defendant. Although it appears that plaintiffs may proceed only against the other corporate defendants, the original cases remain pending. Based upon the information developed to date, and recognizing that the outcome of litigation is uncertain, management believes that the risk of a materially adverse verdict is remote. CORNING INC.: Renews Motion For Summary Judgment in Stock Suit -------------------------------------------------------------- Corning, Inc. renewed its motion for summary judgment in a federal securities class action filed against it and certain individual defendants by a class of purchasers of Company stock who allege misrepresentations and omissions of material facts relative to the silicone gel breast implant business conducted by Dow Corning. This action is pending in the United States District Court for the Southern District of New York. The class consists of those purchasers of Corning stock in the period from June 14, 1989, to January 13, 1992, who allegedly purchased at inflated prices due to the non-disclosure or concealment of material information. No amount of damages is specified in the complaint. In 1997, the court dismissed the individual defendants from the case. In December 1998, Corning filed a motion for summary judgment requesting that all claims against it be dismissed. Plaintiffs requested the opportunity to take depositions before responding to the motion for summary judgment. In June 2003, the Company renewed its motion for summary judgment upon papers incorporating additional discovery materials. Corning intends to continue to fight this action. CORNING INC.: Arguments on Amending Securities Suit Heard in NY --------------------------------------------------------------- Arguments on plaintiff's motion for leave to amend the securities class action filed against Corning, Inc. and three of its officers and directors were presented before the United States District Court for the Western District of New York. The consolidated suit alleges violations of the US securities laws in connection with Corning's November 2000 offering of 30 million shares of common stock and $2.7 billion zero coupon convertible debentures, due November 2015. The suit also alleged misleading disclosures and non-disclosures that allegedly inflated the price of Corning's common stock in the period from September 2000 through July 9, 2001. The plaintiffs in these actions seek to represent classes of purchasers of Corning's stock in all or part of the period indicated. In February 2003, defendants filed a motion to dismiss the complaint for failure to allege the requisite elements of the claims with particularity. Plaintiffs responded with opposing papers on April 7, 2003. The court heard arguments on May 29 and June 9, 2003, and reserved decision. The court's scheduling order further provides that a motion to certify the action as a class action shall be filed after all motions to dismiss are resolved. On December 12, 2002, the Court entered judgment dismissing the claims as to each of the defendants. On December 19, 2002, plaintiffs filed a motion to open the judgment and for leave to file an amended complaint. The Court reserved decision on the motion for leave to amend. Management is prepared to defend these lawsuits vigorously and, recognizing that the outcome of litigation is uncertain, believes that these will be resolved, net of applicable insurance, without material impact on Corning's financial statements. CREE INC.: Ex-CFO Seeks Dismissal of Securities Claims in Suits --------------------------------------------------------------- Plaintiffs Eric Hunter and his wife Jocelyn filed a purported voluntary dismissal without prejudice of the federal securities claims in the securities class action filed against Cree, Inc. in the United States District Court for the Middle District of North Carolina in Greensboro, North Carolina. Eric Hunter, former CFO and Chairman of the Company, named the Company and his brother and current Company chairman Neal Hunter, as defendants. The complaint alleged claims for defamation and harassment, as well as violations of employment and federal securities laws related to transactions with C & C, and other matters. 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, thereby artificially inflating the price of Cree securities, an earlier Class Action Reporter story (July 15,2003) states. The complaint charged 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 materially false and misleading statements to the market between July 24, 2001 and June 13, 2003. Specifically the complaint stated that: (1) the Company failed to disclose that a material portion of the Company's revenues were generated from non ``arms-length'' sales to related entities that did not reflect the true demand for the Company's products; (2) the Company did not implement and maintain an adequate internal accounting control system; (3) since 2002, Cree's former President and CEO, Eric Hunter, had alleged to the Company's board of directors that the Company was improperly accounting for transactions with related entities and was issuing and filing materially false and misleading press releases and financial reports; and (4) a material portion of Cree's reported Class Period sales were improperly recognized and reported in the Company's financial statements in violation of Generally Accepted Accounting Principles. On October 9, 2003, the Hunters stated in a court filing that they had decided to dismiss without prejudice their claims alleging federal securities fraud and unfair or deceptive trade practices. On October 15, 2003, the Hunters filed a purported voluntary dismissal without prejudice of the federal securities fraud claims against all defendants and a voluntary dismissal without prejudice of all claims against certain third party defendants. As to the remaining claims against the Company in the complaint, the Hunters opposed the Company's motion to dismiss, which is pending before the court. ERIE FAMILY: Policyholders Lodge Consumer Fraud Suit in PA Court ---------------------------------------------------------------- Erie Family Life Insurance Company faces a civil class action filed in the Court of Common Pleas of Philadelphia County, Pennsylvania, by one of its customers. The complaint alleges that the Company charged and collected annual premium for the first year, but did not provide 365 days of insurance coverage. The complaint alleges that the policy forms and applications used by the Company do not disclose "that a portion of the first premium will cover a period of time during which EFL does not provide insurance coverage." The complaint contains four counts. In Count I, Plaintiff alleges that the conduct of the Company violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Count II of the Complaint alleges a cause of action for breach of contract. Count III alleges that the Company breached its duty of good faith and fair dealing. In Count IV of the Complaint, plaintiff asserts a cause of action for unjust enrichment and/or restitution. The Company answered the complaint and denied liability on all counts. In a disclosure to the Securities and Exchange Commission, it stated it is too early to assess the probable outcome or the purported amount of damages of this civil class action. The Company believes that it has meritorious, legal and factual defenses to the lawsuit. EVERGREEN RESOURCES: Royalty Owners Sue Over Unpaid Royalties ------------------------------------------------------------- Evergreen Resources, Inc. faces a class action filed in the United States District Court for the District of Colorado. The plaintiffs, Mountain West Exploration, Inc., Joel Nelson and Synergy Operations Company, LLC, are royalty owners and overriding royalty owners who are alleging that they were underpaid royalties and ask to recover damages and declaratory and injunctive relief. The Company has asserted numerous affirmative defenses. FREEMARKETS INC.: Plaintiffs Ask PA Court To Certify Stock Suit --------------------------------------------------------------- Plaintiffs asked the United States District Court in Pittsburgh, Pennsylvania to certify as a class action the consolidated lawsuit filed against Freemarkets, Inc. and two executive officers. The suit stems from the Company's announcement on April 23, 2001 that, as a result of discussions with the SEC, the Company was considering amending its 2000 financial statements for the purpose of reclassifying fees earned by the Company under a service contract with Visteon. On October 30, 2001, the Company filed a motion seeking to dismiss all of the cases in their entirety. On January 17, 2003, the court denied the motion to dismiss. The motion for class certification is still pending before the Court. Discovery is in the early stages. In addition, on September 24, 2001, an individual claiming to be a FreeMarkets shareholder filed a shareholder's derivative action, nominally on behalf of FreeMarkets, against all of the Company's directors and certain of its executive officers. The Company is also named as a nominal defendant. The suit is based on the same facts alleged in the foregoing securities fraud class actions. The Company believes that the plaintiffs' allegations are without merit and it intends to defend these claims vigorously. FREEMARKETS INC.: Reaches Settlement For NY Securities Lawsuit -------------------------------------------------------------- Freemarkets, Inc. agreed to settle the consolidated securities class action filed in the United States District Court for the Southern District of New York against it, alleging violations of the securities laws in connection with the Company's December 1999 initial public offering (IPO). The suit also names as defendants certain of its officers and the underwriters that are the subject of the plaintiffs' allegations. The suit has been consolidated for pretrial purposes with approximately 1,000 other lawsuits filed against other issuers, their officers, and underwriters of their initial public offerings. The consolidated complaint alleges claims against the Company and seven of its officers and/or directors, as well as seven investment banking firms who either served as underwriters or are successors in interest to underwriters of the Company's IPO. The consolidated complaint alleges that the prospectus used in the Company's IPO contained material misstatements or omissions regarding the underwriters' allocation practices and compensation in connection with the IPO, and also alleges that the underwriters manipulated the aftermarket for the Company's stock. Damages in an unspecified amount are sought, together with interest, costs and attorney's fees. The defendants filed a motion to dismiss the consolidated complaint. By stipulation and order dated October 9, 2002, the individual defendants were dismissed without prejudice from the consolidated complaint. On February 19, 2003, the court denied the Company's motion to dismiss. On June 25, 2003, a Special Committee of the Board of Directors of the Company approved a proposed settlement of the litigation under terms set forth in a Memorandum of Understanding and authorized the Company to enter into a definitive settlement agreement to be prepared in accordance with the Memorandum of Understanding. The anticipated settlement will be subject to court approval following notice to class members and a fairness hearing. HOLLYWOOD ENTERTAINMENT: Satisfies Claims in Overtime Settlement ---------------------------------------------------------------- Hollywood Entertainment Corporation has satisfied its obligations in the settlement of a consolidated class action, entitled California Exemption Cases, Case No. CV779511, filed in the Superior Court of the State of California in and for the County of Santa Clara. The plaintiffs sought to certify a class of former and current California salaried Store Managers and Assistant Managers alleging that the Company engaged in unlawful conduct by improperly designating its salaried Store Managers and Assistant Store Managers as "exempt" from California's overtime compensation requirements in violation of the California Labor Code. The Company maintains that its California Store Managers and Assistant Store Managers were properly designated as exempt from overtime. The parties entered into a settlement agreement, which was given final approval by the court on January 28, 2003. A third party claims administrator was hired to process claims and distribute funds to the class. All claims submitted have been processed, and verified claims have been paid. The Company has satisfied its obligations under the settlement agreement and a final Case Management Conference took place on August 12, 2003. Plaintiffs' counsel submitted final requests for dismissal and the parties are awaiting an entry by the court. Reserves established prior to the beginning of fiscal 2003 were adequate to cover amounts in the settlement agreement, the Company stated in a disclosure to the Securities and Exchange Commission. HOLLYWOOD ENTERTAINMENT: Faces Suits Over Rental Fees in IL, WA --------------------------------------------------------------- Hollywood Entertainment Corporation faces several purported class action lawsuits alleging various causes of action, including claims regarding its membership application and additional rental period charges. A statewide class action entitled "George Curtis v. Hollywood Entertainment Corp., dba Hollywood Video, Defendant, No. 01-2- 36007-8 SEA" was certified on June 14, 2002 in the Superior Court of King County, Washington. On May 20, 2003, a nationwide class action entitled "George DeFrates v. Hollywood Entertainment Corporation, No. 02 L 707" was certified in the Circuit Court of St. Clair County, Twentieth Judicial Circuit, State of Illinois. The Company believes it has provided adequate reserves in connection with these lawsuits. The Company has vigorously defended these actions and maintains that the terms of its additional rental charge policy are fair and legal. The Company has been successful in obtaining dismissal of three of the actions filed against it. IDT CORPORATION: Discovery Continues in WARN Violations Suit ------------------------------------------------------------ Discovery is proceeding in the class action filed against IDT Corporation and Teligent, Inc. by six former Teligent employees, on behalf of themselves and other similarly situated former employees in the United States District Court, Southern District of New York. The suit alleges damages as a result of an alleged violation of the Worker Adjustment and Retraining Notification Act. Plaintiffs and Teligent reached a settlement in the form of an unsecured claim, and now the plaintiffs are proceeding against IDT Corporation as the sole defendant. The suit is in the discovery phase, which was scheduled to close on October 31, 2003. Plaintiffs estimate their damages in the range of $4 million, exclusive of attorneys' fees. To date, the parties have not engaged in extensive settlement discussions, but the Court is encouraging mediation. Accordingly, the parties are currently attempting to secure a mutually agreeable mediator with the goal of reaching an amicable resolution of this action. IDT CORPORATION: Plaintiffs Seek Certification For Consumer Suit ---------------------------------------------------------------- Plaintiffs asked the Supreme Court of the State of New York to grant class certification to a complaint filed against IDT Corporation and Union Telecard Alliance, LLC on behalf of New York consumers who allegedly purchased and used the Company's pre-paid calling cards from July 31, 2001 to the present and were charged any fee that was not specifically disclosed on the card packaging prior to purchase. The complaint seeks damages in excess of $100 million dollars. The Company filed its answer on November 19, 2002. The plaintiff filed a motion for a preliminary injunction and a motion for class certification. The Company then filed opposition to the motion for a preliminary injunction and to the motion for class certification, and also filed a motion for summary judgment. These motions have not been fully briefed yet and therefore have not been adjudicated before the court. IDT CORPORATION: Discovery Proceeds in FL Consumer Fraud Lawsuit ---------------------------------------------------------------- Discovery is ongoing in the class action filed against IDT Corporation and Union Telecard Alliance, LLC by Paul Zedeck in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida. The suit was filed on behalf of Florida consumers who from July 31, 2001 to the present allegedly purchased and used the Company's prepaid calling cards and were charged any fee that was not specifically disclosed on the card packaging prior to purchase. The damages sought have not yet been quantified. The plaintiff filed a motion for class certification, which has not been fully briefed yet and therefore has not been adjudicated before the court. IDT CORPORATION: JPMDL Orders Consumer Suits Consolidated in NJ --------------------------------------------------------------- The Judicial Panel for Multidistrict Ligation (JPMDL) agreed to consolidate in the United States District Court for the District of New Jersey two consumer class actions filed against IDT Corporation and IDT Telecom, Inc. On October 18, 2002, Morris Amsel filed a complaint against the Company and IDT Telecom, Inc. in the Supreme Court of the State of New York seeking certification of a class consisting of consumers in the United States who allegedly purchased the Company's calling cards. Plaintiff's complaint relates to payphone charges and international rates. The complaint seeks damages of not less than $100 million. The Company later removed this case to the United States District Court for the Southern District of New York. On December 26, 2002, a complaint was filed by Ana Cardoso and Maria Calado against the Company, IDT Telecom, Inc., and Union Telecard Alliance, LLC in the Superior Court of the State of New Jersey, Union County, seeking certification of a nationwide class consisting of consumers throughout the United States who allegedly purchased the Company's pre-paid non-rechargeable calling cards and were charged any fee that was not specifically disclosed on the card packaging prior to purchase. The damages sought have not yet been quantified. The Company later removed this case to the Federal District Court for the District of New Jersey. With regard to the two suits, the Company filed an application with the JPMDL, asking to consolidate, for pre-trial, purposes the two actions. The motion to consolidate was heard before the MDL Panel on July 24, 2003. On August 21, 2003, the MDL Panel granted the Company's motion to transfer and consolidate the two federal actions for pre-trial purposes before Judge William H. Walls in the District of New Jersey. On September 30, 2003, the parties appeared before Magistrate Judge Wigenton to set a new discovery schedule. IDT CORPORATION: Status Conference Held For NJ Consumer Lawsuit --------------------------------------------------------------- Status conference for the class action filed by Solomon Bitton against IDT Corporation and Union Telecard Alliance, LLC was held in October 28,2003 in the Superior Court of the State of New Jersey, Bergen County. The suit seeks certification of a class consisting of New Jersey consumers who allegedly purchased the Company's prepaid calling cards and were charged any fee that was not specifically disclosed on the card packaging prior to purchase. The damages sought have not yet been quantified. The Company served its answer to the complaint on April 3, 2003 and are in the process of responding to discovery requests. The parties attended an initial scheduling conference on May 22, 2003 and the court entered a schedule relative to class discovery. A status conference was scheduled for October 28, 2003. IDT CORPORATION: Faces Consumer Fraud Suit Pending in TX Court -------------------------------------------------------------- IDT Corporation and Union Telecard Alliance received a Petition filed by Powell Palmares in the District Court of Nueces County, Texas, 105th Judicial District. In his petition, the plaintiff names numerous other defendants including: (1) Oblio Telecom, (2) Northern California Telecommunications, (3) LocusTelecommunications, (4) Star Telecom Network, (5) Astral Communications, (6) Pacific Telecard and (7) Advanced Telecom Solutions The plaintiff is seeking certification of a class consisting of all persons in Texas who allegedly purchased and used the Company's prepaid calling cards and the other defendants' prepaid calling cards and made calls to, or from, cellular telephone equipment. The damages sought have not yet been quantified. IDT CORPORATION: Faces Consumer Fraud Lawsuit Filed in NJ Court --------------------------------------------------------------- IDT Corporation and IDT Telecom, Inc. face a complaint filed by Irene Kieves in the Superior Court of New Jersey, Essex County. The Company later removed this case to the United States District Court for the District of New Jersey. The plaintiff is seeking certification of a class consisting of all persons who subscribed to IDT long distance service and paid any Universal Service Fund surcharge associated with such service at any time since January 1, 1998. The damages sought have not yet been quantified. Because the Company only recently received the complaint, the Company is still evaluating the potential impact and its approach to contesting the claims or attempts to certify the classes, it revealed in a filing with the Securities and Exchange Commission. INSURANCE FIRMS: Court Refuses Certification for Consumer Suit -------------------------------------------------------------- After a four-hour hearing on Friday, Jackson County, Mississippi Circuit Judge Robert Krebs refused to grant class action status to a lawsuit against Allstate and State Farm insurance companies that plaintiffs say avoided paying millions of dollars in claims by imposing an unfair deductible right before Hurricane George hit the Gulf Coast, The Associated Press reports. "This is a case the Supreme Court should decide," Judge Krebs said. According to Pascagoula attorney Richard Scruggs, Allstate and State Farm insurance companies of Jackson County caused unreasonable financial hardship to more than 13,000 coastal residents. The lawsuit, first filed in 1998 and which is one side of a legal argument, claims the companies conspired to unfairly penalize homeowners by imposing a 2 percent deductible on their insurance policies. Although Mississippi currently doesn't allow class action suits, Mr. Scruggs wanted it because the issues of fact and law make the class action approach the most logical and fair manner to handle cases, he said. However, he said he is happy with the ruling. "We're very pleased that he ruled against dismissing the case," he told AP. He added that it could take years before Mississippi's Supreme Court takes up the case. Attorneys for Allstate State Farm Fire and Casualty filed counter-motions Friday to dismiss the case, arguing that plaintiffs' claims are meritless, AP states. MEDICAID: Five Charged With 130 Felony Counts In FL Dental Scam ---------------------------------------------------------------- Attorney General Charlie Crist and Statewide Prosecutor Peter Williams announced the arrests of five people, including two licensed dentists, in Miami Thursday, in connection with a scheme to defraud the Florida Medicaid program through a dental clinic in Orlando. Officers from the Attorney General's Medicaid Fraud Control Unit (MFCU) arrested the five individuals, before being transported to Orlando for future arraignment. The five participants in the scheme received more than $715,000 from Medicaid during the 14- month period covered by the criminal charges. They were charged with a combined total of 130 separate felony counts, with charges including racketeering, conspiracy to commit racketeering, Medicaid provider fraud, patient brokering and violations of the White Collar Crime Victim Protection Act. "It is shocking to think that, if these charges are proven true, licensed health care providers would sacrifice their professional standards to make an easy buck at the taxpayers' expense," AG Crist said in a statement. "It's especially troubling that they would use Florida's neediest citizens as pawns in their scam." According to a probable cause affidavit filed in support of the charges, the five defendants operated a weekend dental clinic at which they performed basic dental services, but billed Medicaid for extensive and costly services. Some services, including dental x-rays, were performed by unlicensed individuals. In at least one case, investigators determined that a pregnant teenager was subjected to dental x-rays. Investigators discovered more than a dozen dates for which bills were submitted to Medicaid for reimbursement, but video surveillance revealed that no one was present at the clinic. All five individuals have Miami addresses. Arrested were: (1) John Anthony Rubio, 31, charged with 55 felony counts; (2) Dr. Sonia Bonilla Guzman, 43, charged with 50 felony counts; (3) her sister, Dr. Anamaria Bonilla Mendez, 38, charged with 22 felony counts; (4) Gustavo Adolfo Fernandez, 35, charged with 21 felony counts; and (5) his wife Iliana Martin-Fernandez, 34, charged with 12 felony counts. In some instances, multiple defendants are charged in the same count. The two-year investigation revealed that the Bonilla sisters maintained dental practices in Miami, and would travel to Orlando on weekends to operate a clinic located at 1723 S. Rio Grande Avenue in Orlando. Mr. Rubio and his employee, Mr. Fernandez, traveled in a van to various public housing areas throughout Central Florida soliciting Medicaid-eligible children with offers of free food. The children, some as young as two years old, would then be transported to the clinic in the van. The children's teeth were x-rayed by Mr. Rubio or Mr. Fernandez, neither of whom is licensed to operate dental x-ray equipment. The children would then be examined and have their teeth cleaned by one of the dentists, and then would receive pizza and soda before being transported back to their homes. The fifth participant in the scheme, Ms. Martin-Fernandez, submitted bills to Medicaid falsely indicating that extensive dental work had been performed on many of the children. Interviews with the children and their parents, as well as examinations of some of the children by a dental expert, indicated that the children did not receive many of the dental services that were billed to Medicaid on their behalf. According to reports obtained by MFCU investigators from the Agency for Health Care Administration, the Bonilla sisters submitted more bills to Medicaid for resin fillings than any other dentists in Florida in 2001. OMEGA PROTEIN: Shareholders Commence Securities Suit in TX Court ---------------------------------------------------------------- Omega Protein Corporation and each of its directors face a lawsuit instituted in the 280th District Court of Harris County, Texas by purported stockholder Joseph Chaput. The plaintiff brought the action individually and as a putative class action on behalf of all Company stockholders. No class period has been identified and no monetary damages have been specified. The plaintiff claims that the Company directors and the Company breached their fiduciary duties to the Company's stockholders by not properly considering a $9.50 per share offer sent to the Company by Ferrari Investments, an Argentine entity. The plaintiff seeks to direct the defendants to act in the interests of the Company's stockholders, including negotiating in good faith with Ferrari Investments, and seeks costs and attorneys' fees. PUBLIC SERVICE: Mount Laurel, NJ Residents Sue Over Gas Meters -------------------------------------------------------------- Public Service Electric and Gas Company (PSE&G) faces a class action filed on behalf of residents of Mount Laurel, New Jersey in New Jersey Superior Court. The suit demands the utility move or shield gas meters located in allegedly dangerous locations. PSE&G filed a motion to dismiss the case or move the case to the Board of Public Utilities (BPU). The court transferred the case to the BPU, which will review PSE&G's compliance with applicable standards for gas meter location and protection, while the Court retained jurisdiction with respect to negligence claims and damages following the BPU's proceeding. In October 2003, the township of Mount Laurel filed a motion to join the class action lawsuit. The BPU has set public hearings for December 1 and 2, 2003. PSE&G believes that its facilities are installed in accordance with applicable requirements to provide safe, adequate and proper service. If the BPU were to require changes in installation requirements, PSE&G would seek rate recovery for any costs associated with the changes. PSE&G cannot predict the ultimate outcome of this matter. RAMBUS INC.: CA Court Dismisses Suit for Securities Violations -------------------------------------------------------------- The United States District Court for the Northern District of California dismissed with prejudice the securities class action filed against Rambus, Inc., entitled "In re Rambus, Inc. Securities Litigation, Case No. C-01-3112-MMC (Chesney, J.)." That action was brought allegedly on behalf of a class of plaintiffs who purchased the Company Common Stock between February 11, 2000 and May 9, 2001, inclusive, and asserted claims under Section 10(b) of the Exchange Act and Section 20(a) of the Exchange Act, as well as Rule 10b-5. The complaint alleged that Rambus misled shareholders concerning its business and the status of its intellectual property in light of allegations concerning its involvement in JEDEC. The purported class period for the consolidated complaint ran from January 11, 2000 through May 9, 2001. On May 17, 2002, the Company moved to dismiss the consolidated complaint. On January 15, 2003, the Company's motion to dismiss was granted and plaintiffs given leave to file an amended complaint within 45 days. Rather than file such a complaint by such date, the parties stipulated that plaintiffs would wait until after rulings on the Infineon motion for rehearing or rehearing en banc in the Court of Appeals for the Federal Court. Pursuant to that stipulation, class plaintiffs filed a motion for voluntary dismissal with prejudice of the securities class action on April 18, 2003. The case, in which a class had not yet been certified, was dismissed with prejudice on May 23, 2003. RAMBUS INC.: Decision in CA Suit Dismissal Expected By mid-2004 --------------------------------------------------------------- Oral arguments and a decision on the appeal of the dismissal of a class action filed against Rambus, Inc. in the California Superior Court, Santa Clara County is expected by mid-2004. The suit, styled "Holiday Matinee, Inc. v. Rambus, Inc. No. CV 806325," purports to be on behalf of an alleged class of "indirect purchasers" of memory from January 2000 to March 2002. Plaintiff alleges that those purchasers paid higher prices for various types of dynamic random access memory (DRAM) due to the Company's alleged unlawful use of market power in the various DRAM markets to coerce vendors of equipment using that technology to enter into supposed agreements in restraint of trade. Plaintiffs base their claims on the Company's alleged anticompetitive actions in patenting and licensing various technologies relating to DRAM, which plaintiffs assert, occurred during the Company's involvement at JEDEC in 1992 through 1996, as well as during the Company's subsequent patent licensing and litigation efforts. The complaint alleges claims under: (1) California Business & Professions Code 16700 for allegedly having coerced "market participants" into entering supposedly unlawful licensing agreements in restraint of trade; (2) California Business & Professions Code 17200 for supposed "unfair business practices" that forced the public to pay "supra-competitive" prices for products incorporating DRAM technology; and (3) a theory of unjust enrichment based on supposedly receiving "unearned royalties" from products that incorporated certain DRAM technology. Plaintiffs seek legal and equitable relief. The Company demurred to this complaint in its entirety on June 24, 2002 and a hearing on this demurrer occurred on August 27, 2002, at which point the court granted the Company's demurrer, giving plaintiff leave to amend its complaint. Plaintiff filed an amended complaint on September 26, 2002. The Company filed a demurrer to the amended complaint and a hearing was held on this demurrer on December 10, 2002. The court granted the Company's demurrer and again gave plaintiff leave to amend its complaint. After plaintiff filed its second amended complaint, the Company demurred successfully again and plaintiff moved to dismiss its complaint with prejudice, reserving however, their rights of appeal from the decisions against them. That motion was granted on April 17, 2003 when the complaint was dismissed with prejudice. Plaintiff filed a notice of appeal on June 20, 2003 and filed its initial appeal brief in early September 2003. The Company filed its Opposition on October 16, 2003, and Holiday Matinee is entitled to file a reply brief. T. ROWE PRICE: Faces Mutual Fund Fraud Lawsuit in IL State Court ---------------------------------------------------------------- T. Rowe Price International, Inc. and the T. Rowe Price International Funds, Inc., consisting of 12 portfolios, face a class action, styled "T.K. Parthasarthy, et al. v. T. Rowe Price International Funds, Inc., et al.," filed in the Circuit Court of the Third Judicial Circuit, Madison County, Illinois. Two unrelated fund groups were also named as defendants. The complaint's basic allegation is that the defendants do not make appropriate value adjustments to their foreign securities prior to calculating their funds' daily share prices, thereby benefiting market timing traders at the expense of long-term shareholders. In the view of management the complaint is wholly without merit. T. Rowe Price intends to defend this case vigorously, it stated in a disclosure to the Securities and Exchange Commission. New Securities Fraud Cases EMERSON RADIO: Bernstein Liebhard Lodges Securities Suit in NJ -------------------------------------------------------------- Bernstein, Liebhard & Lifshitz, LLPA initiated a securities securities class action in the United States District Court for the District of New Jersey on behalf of all persons who purchased or acquired Emerson Radio Corporation (AMEX: MSN) securities between January 29, 2003 and August 12, 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 numerous positive statements throughout the Class Period regarding the Company's growth and demand for the Company's products. As alleged in the Complaint, these statements were each materially false and misleading when made as they misrepresented and omitted the following adverse facts which then existed and disclosure of which was necessary to make the statements not false and misleading, including, but not limited to, the following: (1) that Emerson customers were deferring and foregoing purchases of product and reducing inventory levels as they shifted to just-in-time stocking; (2) that since at least March 2003, the outbreak of severe acute respiratory syndrome in Asia was dramatically reducing Emerson's product demand and supply; (3) that Emerson was planning to, and did, discontinue Mary-Kate and Ashley and Nascar brands and business; and (4) that based on the foregoing, Emerson had no reasonable basis to project "significant" and "strong" growth and revenues for fiscal 2004. On August 12, 2003, the last day of the Class Period, Emerson shocked the investing public when it released its financial and operational results for the first quarter of fiscal 2004, ended June 30, 2003, announcing, among others, a 44.3% revenue decline in its consumer electronics segment. In response to this announcement, shares of Emerson stock fell more than 49% on August 12, 2003, on heavy trading volume. For more information, contact: Ms. Linda Flood, Director of Shareholder Relations, by Mail: Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or (212) 779-1414, by E-mail: MSN@bernlieb.com, Or visit the firm's Website: http://www.bernlieb.com. NATIONAL AUSTRALIA: Bernstein Liebhard Files Stock Lawsuit in NY ---------------------------------------------------------------- Bernstein, Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who acquired securities of National Australia Bank, Ltd. (NYSE: NAB) between April 1, 1999 and September 3, 2001, inclusive, against the following defendants: (1) National Australia Bank, (2) HomeSide Lending, Inc., (3) Frank Cicutto, (4) Hugh Harris, (5) Kevin Race, and, (6) W. Blake Wilson. The Complaint charges 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 during the Class Period, thereby artificially inflating the price of NAB securities. Specifically, the Complaint alleges that NAB's subsidiary HomeSide knowingly used unreasonably optimistic valuation methodologies in connection with financial modeling of its $180 billion mortgage servicing portfolio. As a result, the Company's financial condition was materially overstated during the Class Period. These unreasonably optimistic valuation methodologies were revealed on September 3, 2001 when NAB announced that it would write off $1.75 billion due to problems at HomeSide. In reaction to this news, when trading resumed on September 4, 2001, NAB's ADRs fell to $78.40 from $88.64. For more information, contact Ms. Linda Flood, Director of Shareholder Relations, by Mail: Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or 212-779-1414, by E-mail: NAB@bernlieb.com, Or visit the firm's Website: http://www.bernlieb.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. 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