/raid1/www/Hosts/bankrupt/CAR_Public/040309.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, March 9, 2004, Vol. 6, No. 48
Headlines
ABORTION LITIGATION: Appeals Court Remands RICO Violations Suit
ANADARKO PETROLEUM: Faces Royalties Suit in Kansas Court
ANADARKO PETROLEUM: Faces Royalty Action In Texas Court
CALIFORNIA: College Agrees To $3.5M Settlement In Salary Dispute
CATHOLIC CHURCH: Retired Springfield Bishop Faces Abuse Charges
CHICAGO PIZZA: Reaches Tentative Pact in Labor Lawsuit
CHICAGO PIZZA: Faces Purported Class Suit In California Court
CHINA: Chemical Leak Deprives Nearly 1M People Of Potable Water
DIAMONDHEAD CASINO: Class Certification Denied; Appeal Pending
DT INDUSTRIES: SEC Files Fraud Charges V. 4 Ex-Employees In MO
E-SMART TECHNOLOGIES: Judge Revokes Registration Of Common Stock
ENRON CORPORATION: Merrill Defendants Seek Enron Files In Case
FALCON TRADING: Recalls Yogurt Raisins For Undeclared Almonds
GENERAL MOTORS: Faces Consumer Lawsuit Over 'Pistol Slap' Defect
GENERAL SERVICE: NE Court Grants Summary Judgment In Part
ILLINOIS: Dismissal of Dept. of Corrections Suit Granted in Part
IRVINE SENSORS: Court Grants Prelim. Approval Of SFT Settlement
KIDDER PEABODY: SEC Sanctions Ex-Senior VP For Stock Fraud
MCDONALD'S: WV State Insurer Lauds End of 'Supersize' Products
MAD-COW LITIGATION: Grocery Chains' Delayed Response Draws Suit
MARTHA STEWART: Juror Calls Verdict Victory For `Average Guy'
MOVING SOLUTIONS: Recalls Patient Lifts For Defective Design
NEW WORLD: Recalls Caramel Toffee For Undeclared Peanuts
NEW YORK: $75 Million Settlement Reached In Tax Shelter Lawsuit
NYSE: Regulators Subpoena Ex-Directors Over Grasso Pay Approval
PEOPLESOFT INC.: Says Shareholders' Lawsuit Devoid of Merit
PEOPLESOFT INC.: Oracle and Pepper Lawsuit in Discovery Phase
PEOPLESOFT INC.: Shareholders Lawsuit in California Stayed
PROGRESSIVE CORPORATION: Sued for Violating CA's `Wage-Hour' Law
RED ROBIN: Part of Cook's Thumb Ends Up In Customer's Salad
SAME-SEX MARRIAGES: NY Judge Bars Mayor From Performing Weddings
SAME-SEX MARRIAGES: Wisconsin Assembly Bans Gay Weddings
NEVADA: Hospital Faces Suits Over Suspension Of Surgery Program
SUPERGEN INC.: California Plaintiffs Drop Securities Lawsuits
TOBACCO LITIGATION: Court Rejects Appeal Of 'Lights' Suit Review
TRI-STATE CREMATORY: Lawyers Make Opening Statements In Trial
TYCO INTERNATIONAL: Judge Drops Top Charge V. Ex-Execs In Case
WESTERN SIERRA: Certification Of Credit Card Suit Denied In IL
New Securities Fraud Cases
99 CENTS ONLY: Rabin Murray Commences Securities Suit in C.D. CA
ADECCO SA: Spector Roseman Launches Securities Suit in E.D. NY
AGCO CORPORATION: Wolf Popper Lodges Securities Suit in N.D. GA
EL PASO CORPORATION: Weiss & Yourman Files Securities Suit in TX
IBIS TECHNOLOGY: Bernstein Liebhard Files Securities Suit in MA
MICROMUSE: Bernstein Liebhard Lodges Securities Suit in N.D. CA
SONUS NETWORKS: Schatz & Nobel Commences Securities Suit in MA
SPX CORPORATION: Milberg Weiss Launches Securities Suit in NC
WINN-DIXIE: Chitwood & Harley Files Securities Suit in M.D. FL
WINN-DIXIE: Glancy Binkow Commences Securities Suit in M.D. FL
*********
ABORTION LITIGATION: Appeals Court Remands RICO Violations Suit
---------------------------------------------------------------
The United States Court of Appeals, Seventh Circuit remands to
district court a lawsuit on remand from the Supreme Court of the
United States, against Joseph M. Scheidler, et al., on behalf of
the National Organization for Women Inc. (NOW), et al., alleging
sthat defendants engaged in conduct amounting to a pattern of
extortion in violation of the Racketeer Influenced and
Corrupt Organizations (RICO) Act.
In 1986, the National Organization for Women (NOW) and two
health clinics that perform abortions, filed this class action
alleging that defendants, a coalition of antiabortion groups
called the Pro-Life Action Network (PLAN), Joseph Scheidler, and
other individuals and organizations that oppose abortion,
engaged in conduct amounting to a pattern of extortion in
violation of the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. 1961-68 (RICO).
After the Court in NOW I remanded the case, the district court
conducted a seven-week trial, at which the plaintiffs introduced
evidence of hundreds of acts committed by the defendants or
others acting in concert with PLAN which, the plaintiffs
contended, constituted predicate acts under RICO. In response to
special interrogatories, the jury found that the defendants or
others associated with PLAN committed 21 violations of federal
extortion law (the Hobbs Act, 18 U.S.C. 1951), 25 violations of
state extortion law, 25 instances of attempting or conspiring to
commit either federal or state extortion, 23 violations of the
Travel Act, 18 U.S.C. 1952, 23 instances of attempting to
violate the Travel Act, and four "acts or threats of physical
violence to any person or property."
On this basis, the jury awarded damages to the two named
clinics, and the district court issued a permanent nationwide
injunction prohibiting the defendants from conducting blockades,
trespassing, damaging property, or committing acts of violence
at the class clinics. The defendants appealed a number of issues
relating to the conduct of the trial and the issuance of the
injunction. The defendants then filed a petition for a writ of
certiorari with the United States Supreme Court, which the Court
granted with respect to two of the three questions presented by
the petition.
In its opinion, the Court explained that it granted certiorari
to determine "whether petitioners committed extortion within the
meaning of the Hobbs Act" and "whether respondents, as private
litigants, may obtain injunctive relief in a civil action" under
RICO.
On remand to this court, the parties submitted Statements of
Position pursuant to Circuit Rule 54. Plaintiffs argue that,
although the Court in NOW II disposed of the 117 extortion-based
predicate acts under RICO, the defendants did not petition for a
writ of certiorari on the four predicate acts involving "acts or
threats of physical violence to any person or property" and,
accordingly, the Court did not decide whether these acts alone
could support the district court's injunction. In response,
defendants contend that the Hobbs Act does not outlaw "physical
violence" apart from extortion and robbery, and therefore the
Supreme Court's holding that the defendants did not commit
extortion precludes a finding that the four acts or threats of
violence might independently support the injunction.
ANADARKO PETROLEUM: Faces Royalties Suit in Kansas Court
--------------------------------------------------------
A class action lawsuit was filed in the 26th Judicial District
Court, Stevens County, Kansas, against the Company, on behalf of
a group of royalty owners purporting to represent Anadarko's gas
royalty owners in Texas, over allegations that royalty was
underpaid as a result of the deduction for certain post-
production costs in the calculation of royalty. The lawsuit is
styled Gilbert H. Coulter, et al. v. Anadarko Petroleum
Corporation.
The Company believes that its method of calculating royalty was
proper, and thus plaintiffs' claims are without merit. This case
was certified as a class action in August 2000 and was tried in
February 2002. It is uncertain at this time when the trial court
will render its ruling.
ANADARKO PETROLEUM: Faces Royalty Action In Texas Court
-------------------------------------------------------
A royalty owner action filed in January 1997 in the 335th
District Court of Lee County, Texas became active during the
first quarter of 2003.
The case, styled Texas Osage Royalty Pool, Inc. v. UPRG, Inc.,
UP Fuels, Inc., et al., involves allegations that a company
acquired by merger in 2000, UPRG, Inc., failed to properly pay
royalties due Texas Osage. In addition, the plaintiff contends
that the Company failed to comply with express and implied
provisions of various leases between April 1993 and the present.
The Company is vigorously contesting the claims and believes
royalties were properly paid based upon prices received in sales
made to third-party purchasers or at sales prices comparable to
third-party sales. The plaintiff served expert reports in the
third quarter of 2003, which calculate the plaintiff's
royalty damages in a range between $4million and $5million. The
plaintiff also claims additional damages of approximately $2
million with regard to certain specific land and development
issues. The Company disputes these claims and the trial is
scheduled for June 2004.
CALIFORNIA: College Agrees To $3.5M Settlement In Salary Dispute
----------------------------------------------------------------
Heald College has agreed to pay $3.5 million to settle a 2-year-
old class action lawsuit alleging that it paid male instructors
more than their female peers and failed to adequately pay part-
time teachers, The Californian reports.
Santa Clara County Superior Court Judge Jack Komar approved the
settlement Feb. 3, calling it "fair, adequate and reasonable."
It's set for final approval May 4. Under the settlement, female
Heald instructors who taught between April 25, 1998, and the end
of 2003 will receive $90.83 per course taught. Part-time
teachers - both women and men - will be awarded $438.19 per
course. The settlement covers all of Heald's nine California
campuses, including its Salinas school at 1450 N. Main St.,
where about 540 students are enrolled. About 20 of the
instructors are women.
"I taught the same classes as a male instructor at Heald, and I
made $5,000 less a year," said Kathryn Ramirez, a former teacher
at Salinas' Heald campus. "I brought this to the attention of
Leo Maganares (Salinas Heald director of academic affairs in
2003), who only made excuses." Ramirez, a technology instructor
from April 2000 until January, is eligible for up to $4,541.50.
Ramirez, now a trustee of the Salinas Union High School
District, also could receive money for her work as a part-time
instructor.
Heald's Salinas campus director, Michael Burton, referred
questions to Heald's corporate office in San Francisco.
College spokesman Bob Wynne said the settlement is not an
admission of wrongdoing. "Rather than spending time and money
engaging in an extended legal process," Wynne said Thursday,
"Heald College made a business decision to dismiss the matter
and focus its energies on continuing to provide the best
possible environment for its students to learn and instructors
to teach."
Heald College agreed to a maximum settlement amount of $3.5
million, including attorneys' fees, plaintiffs' costs,
administration costs and the cost of notifying those eligible
for compensation.
The class action lawsuit was filed April 25, 2002, by Deirdre
Carney, a former instructor. The lawsuit was later amended to
include hourly part-time teachers, whom the lawsuit claims
weren't paid for "time spent on grading papers, class-
preparation time, and student/teacher meetings."
CATHOLIC CHURCH: Retired Springfield Bishop Faces Abuse Charges
---------------------------------------------------------------
Hampden District Attorney William Bennett on Thursday announced
he will pursue sex abuse charges against retired Springfield
Bishop Thomas Dupre, 70, over allegations he abused two boys in
the 70's -the boys are now 39 and 40 years old, the Associated
Press reports.
If a grand jury indicts him, Dupre would become the first bishop
charged in the sex scandal that engulfed the Roman Catholic
Church two years ago. Bennett said the statute of limitations on
the abuse itself has likely expired. But because Dupre allegedly
tried to recently conceal the abuse, it may still be possible to
charge him with molesting the boys, Bennett said.
Nationally, there have been at least a dozen grand jury
investigations involving bishops, and four have resigned after
being accused of sexual misconduct. "It is a test for Rome: will
you protect the children, or will you protect the bishop?"
Roderick MacLeish Jr., the attorney for the two men told the AP.
Dupre stepped down Feb. 11, citing health reasons. His
retirement came a day after The Republican newspaper of
Springfield confronted Dupre with the allegations. Dupre's
lawyer, Michael Jennings, has not commented on the allegations.
He did not immediately return a call Thursday. Mark Dupont, a
spokesman for the Diocese of Springfield, said "the diocese will
continue to cooperate in this investigation."
Both alleged victims have met with officials from the
Springfield Diocese and Boston Archdiocese. A report on the
church's internal investigation was forwarded to the Vatican
earlier this week. Bennett said the grand jury investigation
will not be limited to the accusations of the two former altar
boys, but he declined to say whether other accusers have come
forward. He did not say when the grand jury inquiry would start,
or how long it was expected to last.
MacLeish, an attorney for many victims of sexual abuse who
reached an $85 million settlement last year with the Boston
Archdiocese, has said Dupre tried to cover up the abuse. When he
was about to be appointed auxiliary bishop in 1990, Dupre
contacted the men and told them he would not accept the position
unless they remained quiet, MacLeish said. MacLeish said his
clients agreed to remain silent, and kept in touch with Dupre
after he was appointed bishop. Dupre sent one client birthday
and holiday cards, and sometimes money, though the two men never
asked for money as a condition of their silence, MacLeish said.
He said one of the accusers met with Dupre in January and said
he regretted having had sexual relations with the bishop.
MacLeish said Dupre apologized, then asked if the man intended
to make their relationship known. MacLeish said one of the
accusers, who is gay, came forward with his claims after hearing
Dupre speak out against the legalization of same-sex marriage.
CHICAGO PIZZA: Reaches Tentative Pact in Labor Lawsuit
------------------------------------------------------
Chicago Pizza & Brewery, Inc. has reached a tentative proposal
to settle a class action complaint filed in the Superior Court
of California, Orange County, on behalf of a former employee and
others similarly situated, alleging that the Company violated
provisions of the California Labor Code covering meal and rest
beaks for employees, along with associated acts of unfair
competition and seeks payment of wages for all meal and rest
breaks allegedly denied to California employees for the period
from October 1, 2000 to the present.
The Proposal, which is subject to a definitive agreement and is
not yet binding, and which will be subject to Court approval if
finalized between counsel, provides that members of the
plaintiff class may make claims for certain lost wages against a
$950,000 settlement fund, funded by us.
Pursuant to the Proposal, the Company's liability to the
employees would not exceed the amount of the settlement fund. If
the Agreement is approved by the Court, the action will be
dismissed with prejudice, after the parties obligations under
the Agreement are satisfied. The Proposal was developed from
mediation, which was concluded in December of 2003.
CHICAGO PIZZA: Faces Purported Class Suit In California Court
-------------------------------------------------------------
On February 5, 2004, a class action complaint was filed in Los
Angeles County Superior Court, against the Company, alleging:
(1) failure to pay reporting time minimum pay;
(2) failure to allow meal breaks;
(3) failure to allow rest breaks;
(4) reimbursement for fraud and deceit;
(5) punitive damages for fraud and deceit; and
(6) disgorgement of elicit profits
It is possible that this matter will be consolidated with a
class action currently pending in Orange County Superior Court.
It is not certain what effect the filing of the new action will
have on the approval of the Proposal by the Court.
CHINA: Chemical Leak Deprives Nearly 1M People Of Potable Water
---------------------------------------------------------------
The Chinese-language Shanghai Morning Post reported that nearly
1 million people in southwestern China were without water for
drinking and bathing Friday after chemicals polluted a
southwestern river, the Associated Press reports.
Authorities shut down water supplies Tuesday after a combination
of synthetic ammonia and nitrogen from the Sichuan General
Chemical Factory leaked into the Tuo River in the densely
populated province of Sichuan. The Tuo feeds into China's main
shipping artery, the Yangtze River. Water supplies for four
residential areas were severely polluted and could remain cut
for several days, the report said.
An official from Sichuan's provincial Environmental Protection
Bureau, reached by telephone, confirmed the report but refused
to give his name. Tests of new equipment, which failed to
function properly, led to the accident, the official said.
Residents in three Sichuan cities and counties - Jianyang,
Zizhong, Neijiang - were affected, he said. The Sichuan official
said efforts to clean up and dilute the river with fresh water
were going well, and authorities were hoping the water supplies
could be restored by next week.
"The river water can only be used for flushing the toilet now,"
a math teacher at Jianyang Middle School told the AP. Reached by
telephone, he would give only his surname, Liao. "It's
embarrassing to say, but I haven't had a bath for several days."
Liao said it is currently "very, very hard" for families and
individuals in the area to get water, with many waiting two
hours or longer each day for rations of free drinking water
being distributed by the government. "Where there's free water,
there is a long line," Liao said.
The pollution was not expected to affect water supplies to
Shanghai, China's largest city, it said. Shanghai lies about
1,500 miles down river from the pollution site. In December, one
of China's worst industrial accidents occurred when a gas well
leak killed 243 people in nearby Chongqing.
DIAMONDHEAD CASINO: Class Certification Denied; Appeal Pending
--------------------------------------------------------------
William Poulos, on November 29, 1994, filed a class action
lawsuit on behalf of himself and all others similarly situated
against approximately thirty-three defendants, including Europa
Cruises of Florida 1, Inc. and Europa Cruises of Florida 2,
Inc., two subsidiaries of Diamondhead Casino Corporation, in the
United States District Court for the Middle District of Florida,
Orlando Division (Case No.94-1259-CIV-ORL-22).
The suit was filed against the owners, operators and
distributors of cruise ship casinos, which utilized casino video
poker machines and electronic slot machines. The Plaintiff
alleged violation of the Federal Civil RICO statute, common law
fraud and deceit, unjust enrichment and negligent
misrepresentation. The plaintiff filed a similar action against
most major, land-based casino operators in the United States.
The plaintiff contends that the defendant owners and operators
of casinos, including cruise ship casinos, along with the
distributors and manufacturers of video poker machines and
electronic slot machines, have engaged in a course of fraudulent
and misleading conduct intended to induce people to play their
machines based on a false understanding that the machines
operate in a truly random fashion. The plaintiff alleges that
these machines actually follow fixed, preordained sequences that
are not random, but rather are both predictable and subject to
manipulation by defendants and others. The plaintiff seeks
damages in excess of $1 billion against all defendants.
The case against the Europa subsidiaries was transferred to the
United States District Court for the District of Nevada,
Southern Division. Accordingly, the case against Europa and the
other defendants in the cruise ship industry will be litigated,
and perhaps tried, together with those cases now pending against
the land-based casino operators and the manufacturers,
assemblers and distributors of gaming equipment previously sued
in federal court in Nevada.
The Diamondhead Casino is sharing the cost of litigation in this
matter with the other defendants. On November 3, 1997, the Court
heard various motions in the case, including a motion to dismiss
filed by the cruise ship defendants, which was denied. On June
26, 2002, the Court denied the plaintiffs' Motion for Class
Certification. On August 15, 2002, the plaintiffs were granted
leave to appeal the decision and the case is now before the
United States Court of Appeals for the Ninth Circuit. The
plaintiffs are free to pursue their individual cases.
The two subsidiaries of the company that are named as defendants
in this case, Europa Cruises of Florida 1, Inc. and Europa
Cruises of Florida 2, Inc., are no longer operating and have no
assets and no ability to satisfy any judgment that might be
levied against them in this case.
For more information, contact Diamondhead Casino Corporation by
Mail: 150 153rd Ave Ste 202, Madeira Beach FL 33708 or by Phone:
(727) 393-2885
DT INDUSTRIES: SEC Files Fraud Charges V. 4 Ex-Employees In MO
--------------------------------------------------------------
The Securities and Exchange Commission (SEC) filed a complaint
in the United States District Court for the Western District of
Missouri alleging that four former employees of DT Industries,
Inc., engaged in separate fraudulent schemes at three of DTI's
subsidiaries to artificially inflate DTI's financial position.
At the time of the conduct alleged in the Commission's
complaint, DTI was headquartered in Springfield, Mo. The
Commission named in its complaint Richard Rambahal, the
controller of DTI subsidiary Kalish, Inc., Paul H. Kofton and
Joseph J. Barry, the controller and cost accountant of DTI
subsidiary Sencorp Systems, Inc. and Michael Lesniewski, the
general manager and controller of DTI subsidiary Assembly
Machines Inc. Specifically, the Commission's complaint alleged
that from 1996 through 2002, the defendants knowingly or
recklessly failed to properly recognize costs associated with
various projects in order to reach their subsidiary's projected
earnings targets set by DTI.
The Commission's complaint also alleged that the defendants
attempted to conceal their schemes in various ways, including,
hiding unrecorded production costs in various balance sheet
accounts that DTI consolidated into its financial statements and
by creating false supporting documentation. According to the
Commission's complaint, the defendants' improper entries on
their respective subsidiary's books and records resulted in an
overstatement of the cost of sales and thereby caused material
overstatements of DTI's consolidated net income in quarterly and
annual reports that DTI filed with the Commission between 1997
and 2002. According to the Commission's complaint, the
overstatements of DTI's consolidated net income ranged from 1%
to 532%.
The complaint seeks a permanent injunction enjoining Rambahal,
Kofton, J. Barry and Lesniewski from violating Sections 10(b)
and 13(b)(5) of the Securities Exchange Act of 1934 and Rules
10b-5 and 13b2-1 thereunder and for aiding and abetting DTI's
violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. The
complaint further seeks orders of disgorgement, plus prejudgment
interest, from Rambahal, Kofton and Lesniewski and the
imposition of civil monetary penalties against Kofton and
Lesniewski. J. Barry, without admitting or denying the
allegations of the complaint, consented to the imposition of an
order permanently enjoining him from the violations alleged in
the Commission's complaint.
Also, in a related action, the Commission on March 4, issued an
order instituting administrative and cease-and-desist
proceedings requiring DTI to cease and desist from committing or
causing any violations and any future violations of certain
reporting, record keeping, and internal control provisions of
the federal securities laws.
E-SMART TECHNOLOGIES: Judge Revokes Registration Of Common Stock
----------------------------------------------------------------
The Securities and Exchange Commission (SEC) announced that an
Administrative Law Judge has issued an Initial Decision in
Administrative Proceeding No. 3-10977, e-Smart Technologies,
Inc., f/k/a Plainview Laboratories, Inc. The Initial Decision
finds that while its common stock was registered with the SEC,
e-Smart repeatedly failed to file annual and quarterly
reports in violation of the periodic reporting requirements of
Section 13(a) of the Securities Exchange Act of 1934 (Exchange
Act) and Rules 13a-1 and 13a-13 thereunder.
As a result, the Initial Decision revokes the registration of e-
Smart's common stock, pursuant to Section 12(j) of the Exchange
Act.
ENRON CORPORATION: Merrill Defendants Seek Enron Files In Case
--------------------------------------------------------------
Four former Merrill Lynch & Co. executives charged with
conspiring to help Enron Corp. inflate earnings say the
bankruptcy examiner who investigated Enron's collapse should
share documents accrued during his 19-month, nearly $100 million
probe, the Associated Press reports.
The examiner, Atlanta attorney Neal Batson, says in court
filings that he wants U.S. Bankruptcy Judge Arthur Gonzalez to
allow him to hand over e-mails and other documents to Enron or
so-called third parties, such as Merrill Lynch or other banks
and brokerages, whose employees granted interviews during the
investigation. He also wants to destroy whatever is left and be
free of involvement in any Enron-related cases. Last month
Gonzalez barred creditors and others from seeking documents from
Batson. But Gonzalez's order said such information must be
turned over to the defense in any criminal case if a judge finds
it could help a defendant.
That caveat is crucial, defense attorneys said in a filing this
week, because it would prevent Batson from giving away or
destroying evidence that could exonerate the former executives
or undercut prosecution witnesses. Also, defense attorneys say
such a move would spread witness statements, e-mails and other
documents to an excessive number of sources, complicating
efforts to prepare for trial on June 14. "By the time we track
down materials being transferred, as a practical matter, it
would be too late to use them to get ready for a June trial.
These are voluminous, complex materials," Lawrence Zweifach, who
represents former Merrill Lynch executive James A. Brown, told
the AP.
Zweifach and attorneys representing other former Merrill Lynch
executives are appealing Gonzalez's immunity order. A hearing on
whether Batson can destroy anything is set for March 17. Defense
attorneys in another criminal case involving seven former
executives of Enron's failed defunct broadband unit also have
expressed interest in getting information in Batson's files.
But Batson has argued in court filings that allowing such open
access could hinder people from cooperating with bankruptcy
examiners.
E-mail correspondence between Brown and the other former Merrill
Lynch executives charged in the case - Robert Furst, William
Fuhs and Daniel Bayly - figured heavily in one of Batson's four
voluminous reports. Those messages pertained to a deal in which
prosecutors allege Merrill pretended to buy Nigerian barges from
Enron in 1999 so Enron could appear to have met earnings
targets. But the sale was a sham because former Enron finance
chief Andrew Fastow secretly promised to buy back Merrill's
interest in the barges at a premium. One of Fastow's
partnerships did so in 2000. Fastow, facing a 98-count
indictment that included charges related to the barge deal,
pleaded guilty to two counts of conspiracy in January and is
cooperating with prosecutors.
FALCON TRADING: Recalls Yogurt Raisins For Undeclared Almonds
-------------------------------------------------------------
Falcon Trading Company, Inc. of Santa Cruz, CA, in cooperation
with the U.S. Food Safety Inspection Service (FSIS), is
recalling SunRidge Farms All Natural Yogurt Raisins, because it
may contain undeclared almonds. People who have an allergy or
severe sensitivity to almonds run the risk of serious or life-
threatening allergic reaction if they consume these products.
There have been no illnesses reported to date.
The product can be identified as follows:
*SunRidge Farms
All Natural Yogurt Raisins
Packaged in a preprinted zip-lock 8 oz. bag
This product bears the Julian date code 3240321, which is
located on the back left side of the package in black ink.
Yogurt Raisins was distributed nationwide through distributors
to the retail food stores in your area.
The recall was initiated after it was discovered that bags of
Yogurt Raisins actually contained Yogurt Almonds. Subsequent
investigation indicates the problem was caused by a temporary
breakdown in the company's production and packaging procedures.
Consumers who have purchased SunRidge Farms All Natural Yogurt
Raisins with the Julian date code of 3240321 are urged to return
it to the place of purchase for a full refund. Consumers with
questions may contact Falcon Trading Company, Inc. directly at
(831) 462-1280, or e-mail info@sunridgefarms.com.
GENERAL MOTORS: Faces Consumer Lawsuit Over 'Pistol Slap' Defect
----------------------------------------------------------------
A class action complaint was filed by the law firm Green &
Jigarjian LLP and the Oklahoma based firms of Federman &
Sherwood and Walker & Walker, against General Motors
Corporation, on behalf of purchasers of 1999 through 2003 model
GM vehicles with a 3.1, 3.4, 4.8, 5.3, 5.7 (LS1), 6.0, or 8.1
liter engine that exhibits a loud noise due to Piston Slap,
alleging that GM actively concealed the engine defect while
continuing to advertise, market, and warrant that GM engines are
free from defects, Business Wire reports.
Plaintiff alleges that when GM redesigned these engines in 1999,
it did not correct its tolerance levels and this failure to
reduce the tolerances has resulted in the current problems with
Piston Slap, causing excessive engine wear, increased oil
consumption, and poor fuel mileage. Additionally, Piston Slap
can cause a reduction in the resale value of their vehicles.
"Piston Slap" is a loud knocking noise produced during and
shortly after engine start-up that is caused by the engine
pistons knocking against the cylinder walls as a result of
excessive clearance between the piston and the cylinder wall.
Some of the models that may have a Piston Slap defect are the
Chevrolet Camaro, Corvette, Silverado, Tahoe and Surburban; GM
Denali and Yukon; Cadillac Escalade and Pontiac TransAm.
Plaintiff further alleges that in at least four Technical
Services Bulletins released by GM in 2001, the company indicates
the reason why it failed to admit and fix the defect, namely the
replacement of the engine assembly or pistons does not eliminate
the noise, thus those affected by Piston Slap would require the
installation of new engines to remedy the situation. Rather than
fix the problem, however, GM has modified what it considers
"normal" engine noise and oil consumption levels, and thus
refuses to remedy the engine defect covered under GM warranties.
Based on GM's alleged unfair and unlawful conduct, Plaintiff
seeks the repair or replacement of the defective engines or
reimbursement for the cost of repair or replacement, the
disgorgement of profits unjustly earned by GM, and restitution
for the overcharge paid by consumers for their GM vehicles.
For more information, contact Monica Herman, by Phone:
(415) 477-6700, or by E-mail: gj@classcounsel.com.
GENERAL SERVICE: NE Court Grants Summary Judgment In Part
---------------------------------------------------------
The United States District Court for the District of Nebraska
granted in part Plaintiff's Motion for Summary Judgment of a
lawsuit brought against General Service Bureau, on behalf of
Plaintiffs Diane S. Hage, et al., alleging violations of the
Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et
seq., and the Nebraska Consumer Protection Act (NCPA), Neb. Rev
Stat. 59-1602 and Neb.Rev. Stat. 25-1708 and 25- 1801.
This matter is before the court on the parties' cross-motions
for partial summary judgment, Filing Nos. 129 and 131.
Plaintiffs move for a summary judgment of liability on both
their FDCPA and NCPA claims. Defendant moves for summary
judgment in its favor on plaintiffs' NCPA claims. The undisputed
evidence shows that GSB recovered attorney fees, costs, and
prejudgment interest in connection with its collection of debts
of members of the plaintiff class. Plaintiffs agreed to pay the
total of the underlying debt, plus interest, attorney fees and
costs in exchange for securing dismissal of county court
litigation without the entry of judgment against them. After
receiving payment, GSB moved for dismissal of the county court
actions without prejudice. Only those cases in which the
agreement creating the debt but not authorizing collection of
such amounts are at issue in these motions.
In its ruling, the Court granted in part Plaintiffs' motion for
summary judgment on their FDCPA claim, and denied motion for
summary judgment in all other respects. The Court also denied
Defendant's motion for summary judgment.
ILLINOIS: Dismissal of Dept. of Corrections Suit Granted in Part
----------------------------------------------------------------
The United States District Court for the Northern District of
Illinois, Eastern Division granted in part, denied in part
defendant's Motion to Dismiss a lawsuit brought against the
Illinois Department of Corrections (IDOC) and Michael McManus,
on behalf of Plaintiff Natacha Bowman, et al.
Due to the bare-boned factual allegations contained in Plaintiff
Natacha Bowman's complaint, very little information is known
concerning the circumstances giving rise to this case. At some
point in time Bowman was employed by IDOC. Her supervisor was
Michael McManus, a named defendant in this case, who allegedly
terminated Bowman on account of her sex. On October 21, 2003,
Bowman filed the present lawsuit on behalf of herself and a
class of female IDOC employees who have been sexually harassed
or discriminated against on account of their sex.
Bowman's putative class action complaint contains these
allegations:
(1) Violation of Title VII of the Civil Rights Act of 1964,
42 U.S.C. 2000e et seq. for sex based discrimination;
(2) violation of 42 U.S.C. 1983 for depriving Bowman of her
14th Amendment property interest in her employment
without due process of law;
(3) violations of 42 U.S.C. 1983 for depriving Bowman of
her 14th Amendment right to equal protection under the
law; and
(4) tortious interference with a contract under Illinois
law.
IDOC now moves to dismiss pursuant to Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6). In the alternative IDOC moves
for a more definite statement pursuant to Federal Rule of Civil
Procedure 12(e) and to strike portions of Bowman's complaint.
IRVINE SENSORS: Court Grants Prelim. Approval Of SFT Settlement
---------------------------------------------------------------
Irvine Sensors Corporation announced preliminary Court approval
of the settlement of class action lawsuits that had been filed
in 2002 against it, certain of its current and former officers
and a officer of one of its former partially owned subsidiaries,
Silicon Film Technologies, Inc. (SFT), in connection with
development, production and marketing activities by SFT,
PRNewswire reports.
The settlement was reached without any admissions as to the
merits of either plaintiffs' or defendants' positions. The
amount of the proposed settlement, $3.5 million, is within
insurance coverage limits and will be paid entirely by Irvine
Sensors' insurance carrier. The Court has set June 7, 2004 as
the date for a Settlement Hearing, which is expected to result
in a final ruling and a determination of the amount of allowable
legal fees.
Irvine Sensors Corporation, headquartered in Costa Mesa,
California, is primarily engaged in the sale of stacked chip
assemblies and research and development related to high density
electronics, miniaturized sensors and cameras, optical
interconnection technology, high speed routers, image processing
and low-power analog and mixed-signal integrated circuits for
diverse systems applications.
KIDDER PEABODY: SEC Sanctions Ex-Senior VP For Stock Fraud
----------------------------------------------------------
The Securities and Exchange Commission (SEC) has imposed
sanctions on Orlando Joseph Jett, formerly a registered
representative, government bond trader, Managing Director and
Senior Vice President with Kidder, Peabody & Co., formerly a
registered broker-dealer.
The Commission ordered Jett to cease and desist from
committing or causing any violations 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; and to cease and
desist from causing any violations of Exchange Act Section 17(a)
and Rules 17a-3 and 17a-5 thereunder.
The Commission also found that it was in the public interest to
bar Jett from association with any broker, dealer, member of a
national securities exchange, or member of a registered
securities association. The Commission ordered Jett to disgorge
the amount of $8.2 million and to pay a civil money penalty in
the amount of $200,000. The Commission found that Jett violated
the antifraud provisions by recording enormous illusory profits
through an anomaly in Kidder's trading and accounting systems,
and by deceiving Kidder about his trading performance.
The Commission also found that Jett's conduct aided and abetted
record keeping violations by Kidder. Jett engaged in a trading
strategy that involved entering an ongoing sequence of carefully
formulated instructions into Kidder's computer system to
exchange with the U.S. Government the component pieces of U.S.
Government bonds for the whole bonds, or vice versa. The
strategy exploited an anomaly in the computer system that made
it appear that these exchanges were generating profits for the
firm, and concealed the failure of Jett's real trading and the
costs of the strategy itself. In fact, Jett's "trading
strategy" caused the firm a large loss. Jett pursued the
strategy, with variations, for over two years, until he was
fired.
MCDONALD'S: WV State Insurer Lauds End of 'Supersize' Products
--------------------------------------------------------------
The West Virginia Public Employees Insurance Agency applauded
McDonald's for the company's recent decision to phase out the
"Supersize" portions from its menu, Business Wire reports. Tom
Susman, PEIA Director said, "While we are encouraged by this
move, we are waiting to see what will replace the super size
items. Hopefully, other fast food giants will see the light."
PEIA designed and sponsored a multimedia campaign explaining the
perils of over-sized food portions. The campaign garnered
national attention and shed further light on the country's
obesity epidemic. "We are very pleased that McDonald's has taken
steps towards offering healthier food choices," said Nidia
Henderson, Wellness Director for the Agency. "Our hope is that
other fast food chains will see fit to offer healthier menu
options and right-sized portions. With the rising level of
childhood obesity, we hope fast food chains will offer fresh
fruit and low fat milk as default menu items in children's
meals."
Annually, PEIA spends more than $78 million dollars on
preventable obesity related illnesses and insures more than
200,000 West Virginians.
MAD-COW LITIGATION: Grocery Chains' Delayed Response Draws Suit
---------------------------------------------------------------
A Bellevue, Wash. family filed a proposed class action lawsuit
against Quality Food Centers (QFC), a subsidiary of Kroger,
claiming the grocery store chain should have used information
gathered through its customer loyalty program to warn those who
purchased beef potentially tainted with "mad cow disease",
PRNewswire reports.
Jill Crowson purchased the potentially tainted beef from a
Bellevue QFC on Dec. 22 and 23, and used her Advantage Card,
QFC's customer loyalty program. She served the meat to her
husband over Dec. 25 and 26, and later heard of the recall in
the newspaper. The suit, filed in King County Superior Court,
seeks to represent all Washington residents who purchased the
potentially tainted meat, and asks the court to establish a
medical monitoring fund.
Steve Berman, the attorney representing the Crowsons, asserts
that since the company tracks purchases, it should have warned
the Crowsons and many other customers who purchased the beef at
approximately 40 stores across Washington. "If you lose your
keys with an Advantage Card attached, QFC will return them to
you free of charge," Berman said. "If they can contact you over
a lost set of car keys, why couldn't they contact you and tell
you that the beef you purchased could kill you?"
On Dec. 23, the U.S. Department of Agriculture ordered the
recall of approximately 10,410 pounds of raw beef that may have
been infected with bovine spongiform encephalopathy (BSE), which
if consumed by humans can lead to the always-fatal Cruetzfeldt-
Jakobs Disease (vCJD).
According to the complaint, QFC at first mistakenly believed it
did not have any of the affected beef and took no action to
remove the product from its shelves. The store later removed the
beef on Dec. 24, but then did little to warn those who earlier
purchased the meat, the suit claims. It wasn't until Dec. 27
that the grocery chain posted small signs with information about
the recall, the complaint alleges.
The Crowsons contacted QFC when they suspected they had
purchased the potentially tainted meat, but QFC would not
confirm their suspicions for two more weeks, the suit states.
According to Berman, the family had to file a written request
before QFC would confirm their fears. According to health
experts, Cruetzfeldt-Jakobs Disease can have an incubation
period of as long as 30 years. There is no test to determine if
infection took place after possible exposure, nor is there any
treatment once one is infected. The condition is always fatal.
If the court grants the suit class-action status, QFC would
likely be compelled to turn over the names of those who
purchased the potentially tainted beef. The proposed class-
action claims QFC violated provisions of the Washington Product
Liability Act by failing to give adequate warning to consumers
about the potentially dangerous meat. The suit seeks unspecified
damages for the plaintiffs, as well as the establishment of a
medical monitoring fund.
MARTHA STEWART: Juror Calls Verdict Victory For `Average Guy'
-------------------------------------------------------------
Calling the guilty verdict a victory for "the average guy", the
one juror who spoke publicly Friday about how the jury made up
its mind in the Martha Stewart trial said he hopes the verdict
sends a message to corporations that "they have to abide by the
rules and no one's above the law," the Associated Press reports.
"Maybe it's a victory for the little guy who loses money in the
markets because of these types of transactions, the people who
lose money in 401(k) plans," Chappell Hartridge, a 47-year-old
computer technician at an insurance company, told the AP. "Maybe
it might give the average guy a little more confident feeling
that (he) can invest in the market and everything will be on the
up and up."
Stewart was convicted Friday on four charges of conspiracy,
making false statements and obstruction of justice. Her ex-
stockbroker, Peter Bacanovic, also was found guilty in the stock
scandal. Hartridge and the other 11 jurors - four men and eight
women - deliberated over three days before reaching the verdict.
Hartridge said the appearance at the trial of Stewart's
celebrity pals like Rosie O'Donnell and Bill Cosby may have
backfired. "If anything, we may have taken it a little as an
insult," he said. "Is that supposed to sway our opinion?"
Some of the testimony about the way she ran her business left
the impression, at least on him, that she thought she was "above
everyone." He also said her background as a stockbroker worked
against her because the jury believed she should have known what
she was doing was illegal. Hartridge said jurors were especially
swayed by testimony from Stewart's personal assistant, Ann
Armstrong, who testified that Stewart altered the log of a
message that Bacanovic left her on the day Stewart sold her
Imclone stock.
During the six-week trial, the jurors were referred to by
numbers instead of names because the judge wanted to make sure
no one discovered their identities and tried to influence them.
After the verdicts were delivered, she gave them permission to
speak about the deliberations. Hartridge said it was impossible
to avoid references to the case during the six-week trial. "You
see it on the front pages. You see it on the subway," he said.
He said he went to work and "was threatened, `Don't come back to
work if you convict her.'" "I took it as a joke," he said with a
chuckle.
MOVING SOLUTIONS: Recalls Patient Lifts For Defective Design
------------------------------------------------------------
Moving Solutions, Inc., of Downers Grove, Ill., in cooperation
with the Food and Drug Administration (FDA), is recalling its
patient lifts because of a faulty design. The Company has
received one report of death related to the failure of the bolt.
The recall involves all FAABORG model battery operated patient
lifts distributed by Moving Solutions, because the lift arm is
interchangeable between all models of FAABORG patient lifts.
Some 856 lifts have been distributed throughout the United
States. FAABORG, located in Denmark, is the manufacturer. Moving
Solutions is the initial U.S. distributor; however there may be
some other distributors.
Patient lifts are mechanical sling-like devices used to lift and
move patients from one place to another, as from a bed to a
bath. They are used in hospitals and nursing homes in the care
of elderly and handicapped persons. Some may also be used in
homes. With the Moving Solutions lift, excessive wear of the
main bolt, which secures the lift arm to the main frame of the
patient lift, will cause the bolt to break. When the bolt
breaks, the lift arm is no longer secured to the lift, which
will cause the patient to fall. The lift arm may also fall on
the patient, which could result in serious injury, even death.
Facilities are urged to stop using these lifts until the problem
is corrected. Moving Solutions notified user facilities of a
problem with the device in November 2001. In a letter, they
directed facilities to perform maintenance and check the hanger
bar bolt for any signs of wear.
The firm again notified user facilities on Jan. 21, 2004 about a
continuing problem with the bolt and included a nylon washer
with their letter, instructing facilities to insert the washer
between the hanger bar bolt and the sling spreader arm. The FDA
has no assurance that the washer will prevent the rubbing that
caused the bolt to wear and break, and an investigation is
underway.
FDA is monitoring the firm's action, which constitutes a Class I
recall, to make sure that all facilities that use these lifts
are adequately notified of the problem and to make sure that no
more products are distributed.
NEW WORLD: Recalls Caramel Toffee For Undeclared Peanuts
--------------------------------------------------------
New World Trading, Inc., of 4416 2nd Avenue , Brooklyn, New York
11232, in cooperation with the U.S. Food Safety and Inspection
Service (FSIS) is recalling "Yake Caramel Toffee" because it
contains undeclared peanuts. People who have allergies to
peanuts run the risk of serious or life-threatening allergic
reaction if they consume this product.
The recalled "Yake Caramel Toffee" is packaged in a 600-gram
plastic bottle with the code 01.10.2003 above 08.10.2004. It is
a product of the Fujian Yake Food Co. Ltd.
Routine sampling by New York State Department of Agriculture and
Markets food inspectors revealed the product contained peanuts,
which were not declared on the label. "Yake Caramel Toffee" was
distributed to retail stores nationwide. No illnesses have been
reported to date.
Consumers who have purchased this product are urged to return it
to the place of purchase.
NEW YORK: $75 Million Settlement Reached In Tax Shelter Lawsuit
---------------------------------------------------------------
The law firm of Shore Deary, LLP, in conjunction with Whatley
Drake, LLC and Cory Watson Crowder & DeGaris, PC, announced that
the national law firm of Jenkens & Gilchrist, PC and its
insurers have agreed to pay $75 million in a class action
settlement to resolve all claims against the firm related to its
tax shelter work, PRNewswire reports.
The settlement, which is subject to court approval, stems from
two class action lawsuits filed in New York federal courts. In
one case, an Indianapolis entrepreneur is facing an IRS audit
after entering into a "COBRA" tax shelter that his advisors told
him would save $13 million in taxes in exchange for $7 million
in fees. Individuals in the other class action entered into a
similar tax strategy, and are also being audited by the IRS.
According to the claims, the targeted entities devised, marketed
and sold invalid tax strategies to hundreds, perhaps even
thousands of individuals in exchange for millions of dollars in
fees.
Deary's clients are seeking to recover millions of dollars in
fees they paid for invalid tax strategies, as well as $1 billion
in punitive damages based on claims that those who marketed and
sold the tax strategies knew they were invalid. For more
information, contact David Deary, by Phone: 800-497-6444 or
214-360-9622.
NYSE: Regulators Subpoena Ex-Directors Over Grasso Pay Approval
---------------------------------------------------------------
According to a person close to the investigation, up to 65
former members of the New York Stock Exchange (NYSE) board of
directors have received subpoenas from regulators asking for
documents detailing deliberations over the pay of former
chairman Dick Grasso, the Associated Press reports.
Speaking on condition of anonymity, two additional sources told
the Associated Press the subpoenas from the Securities and
Exchange Commission targeted directors who were involved in
approving Grasso's $187.5 million compensation package, the
furor over which led to his resignation in October. Both the SEC
and New York Attorney General Eliot Spitzer are investigating
the matter and are considering charges not only against Grasso,
but also against any director that may have violated public
trust by approving the package. Spokesmen for Spitzer, the SEC
and the NYSE had no immediate comment late Thursday.
Spitzer's office is preparing a case against Grasso and a number
of unidentified former board members over the compensation
package, a source told The Associated Press on Monday.
Settlement talks with Grasso and the former board members are
ongoing, though Spitzer's office is inclined to bring the suit
if negotiations fail, the source said.
In January, the NYSE's board of directors forwarded an internal
report by former federal prosecutor Dan K. Webb to the
Securities and Exchange Commission and Spitzer requesting
investigations. The private Webb report claims $100 million in
overpayments were made to Grasso's pension accounts and $40
million was paid in excessive deferred compensation, a source
familiar with the matter told The Associated Press on condition
of anonymity.
The NYSE has since adopted reforms that include splitting the
responsibilities of chairman and CEO, and to appoint a chief
regulatory officer. The NYSE board was also overhauled. None of
the current members served when Grasso's lavish package was
negotiated.
PEOPLESOFT INC.: Says Shareholders' Lawsuit Devoid of Merit
-----------------------------------------------------------
On June 6, 2003, Felix Ezeir (Case No.20349-NC), Teresita Fay
(Case No.20350-NC), Robert Crescente (Case No.20351-NC), Robert
Corwin (Case No.20352-NC) and Ernest Hack (Case No.20353-NC),
all of whom purport to be PeopleSoft stockholders, each filed a
putative stockholder class action suit in the Delaware Court of
Chancery against PeopleSoft Inc. and several of its officers and
directors.
The suits allege that defendants breached their fiduciary duties
in connection with the response to the tender offer announced by
Oracle Corporation on June 6, 2003 and formally commenced June
9, 2003. Plaintiffs in each of the actions seek injunctive
relief and an accounting. On June 10, 2003, Steven Padness filed
an action in the Delaware Court of Chancery against these same
defendants (Case No.20358-NC) making similar allegations and
seeking similar relief. On June 12, 2003, Thomas Nemes filed an
action in the Delaware Court of Chancery (which was subsequently
amended June 18, 2003) against these same defendants (Case
No.20365-NC), making similar allegations and seeking similar
relief (the Nemes Action).
On June 25, 2003, on an application filed in the Nemes Action,
the Court consolidated the actions listed above under a single
caption and case number: In re PeopleSoft, Inc. Shareholder
Litigation, Consol. C.A. No.20365-NC. Defendants filed their
answer to the consolidated Delaware action on June 25, 2003.
"We believe that the claims and allegations asserted in each of
the foregoing putative class action suits are without merit, and
intend to vigorously defend against these lawsuits," PeopleSoft
said in its latest SEC disclosure.
For more information, contact PeopleSoft Inc. by Mail: 4460
Hacienda Drive, Pleasanton CA 94588-8618 or by Phone:
(925) 225-3000.
PEOPLESOFT INC.: Oracle and Pepper Lawsuit in Discovery Phase
-------------------------------------------------------------
On June 18, 2003, Oracle and Pepper Acquisition Corp. filed a
lawsuit in the Delaware Court of Chancery (Case No. 20377-NC)
(captioned Oracle Corp. vs. PeopleSoft, Inc.) against PeopleSoft
Inc., several of its directors and J.D. Edwards, alleging that
the named directors breached their fiduciary duties in
connection with the response to Oracle's tender offer, and that
J.D. Edwards aided and abetted the directors' purported breach
of fiduciary duty.
Oracle seeks injunctive, declaratory and rescissory relief.
On November 10, 2003, Oracle and Pepper Acquisition Corp. also
filed a motion for preliminary injunction, similarly seeking to
enjoin the company and the named directors from continuing to
offer customers the terms contained in the revised Customer
Assurance Program. On the same date, Oracle and Pepper
Acquisition Corp. also filed motions seeking a prompt hearing
date at which to present their motion for a preliminary
injunction and for expedited discovery in support of their
motion for preliminary injunction. That same day Oracle and
Pepper Acquisition Corp. also moved for leave to amend their
Complaint.
On November 19, 2003, the Court of Chancery heard arguments with
respect to the motions in both the consolidated Delaware
stockholder lawsuits and the Oracle lawsuit to expedite and for
the scheduling of a preliminary injunction hearing. Following
argument, the Delaware Court denied the applications by the
plaintiffs to schedule a hearing on their respective motions for
preliminary injunction with respect to the PeopleSoft Customer
Assurance Program. On December 19, 2003, the Court entered a
Stipulation and Order that among other things:
(1) Formally denied both motions for an expedited preliminary
injunction hearing; (2) provided for responses by the parties to
certain outstanding discovery requests and deposition notices;
and (3) provided for notice to counsel for Oracle and the
shareholder plaintiffs of any material modification of the
Customer Assurance Program within two business days following
any such modification.
Discovery in this action is proceeding and is being coordinated
with the stockholder actions against PeopleSoft in Delaware, and
PeopleSoft's action against Oracle in California.
For more information, contact PeopleSoft Inc. by Mail: 4460
Hacienda Drive, Pleasanton CA 94588-8618 or by Phone:
(925) 225-3000.
PEOPLESOFT INC.: Shareholders Lawsuit in California Stayed
----------------------------------------------------------
Separate actions were filed on June 6, 2003 in the California
Superior Court for the County of Alameda by Doris Staehr (Case
No. RG03100291), the West Virginia Laborers Pension Trust Fund
(Case No. RG03100306) and Lorrie McBride (Case No. RG03100300).
On June 10, 2003, Ray Baldi (Case No. RG03100696) filed an
additional case in the same court. The plaintiffs in these
actions (collectively, the Initial Alameda Shareholder
Actions) all purport to be PeopleSoft stockholders, and they
make claims against several of PeopleSoft's executive officers
and directors.
The suits allege that the defendants breached their fiduciary
duties in connection with (i) the response to Oracle's tender
offer, (ii) the company's agreement to acquire J.D. Edwards, and
(iii) the implementation of the 2003 Directors Stock Plan, which
was approved by the PeopleSoft stockholders at the 2003 Annual
Meeting of Stockholders. Plaintiffs seek injunctive, rescissory
and declaratory relief.
On June 16, 2003, the Initial Alameda Shareholder Actions were
consolidated. On June 11 and 17, 2003, respectively, two
additional actions were filed by Moshe Panzer (Case No.
VG03100876) and Arace Brothers (Case No. VG03101830), asserting
similar claims. By Order dated July 11, 2003, the Panzer and
Arace Brothers actions were consolidated with the Initial
Alameda Shareholder Actions (collectively the Alameda
Shareholder Actions).
By Order dated June 18, 2003, the Alameda County Superior Court
granted the company's Motion to Stay the Initial Alameda
Shareholder Actions pending resolution of the claims involving
the duties of the defendant directors by the Delaware Court of
Chancery. The California Court found that the stockholder
actions required application of Delaware law, and that allowing
the consolidated cases to proceed would create the specter of
inconsistent orders. By Order dated July 11, 2003, the Alameda
County Superior Court also stayed the Panzer and Arace Brothers
cases pursuant to the June 18, 2003 Order in the Initial Alameda
Shareholder Actions. Accordingly, all of the Alameda Shareholder
Actions currently are stayed by order of the California Court.
For more information, contact PeopleSoft Inc. by Mail: 4460
Hacienda Drive, Pleasanton CA 94588-8618 or by Phone:
(925) 225-3000.
PROGRESSIVE CORPORATION: Sued for Violating CA's `Wage-Hour' Law
----------------------------------------------------------------
Progressive Corporation admitted in its latest SEC disclosure
that it is facing various class action lawsuits for alleged
violations of the so-called California "wage and hour" law.
"The plaintiffs have alleged that we improperly classified both
general and assistant store managers as exempt under the
California wage and hour law, making such managers ineligible
for overtime wages. The plaintiffs are seeking to require us to
pay overtime wages to the putative class for the period from as
early as 1995 to the present," the company disclosed.
This litigation is in the discovery stage. "While it is too
early in the litigation for us to predict the outcome of the
litigation, we believe the litigation will not have a material
adverse effect on us," the company said.
For more information, contact Progressive Corporation by Mail:
500 Staples Drive, P.O. Box 9328 Framingham MA 01702 or by
Phone: (508) 253-5000.
RED ROBIN: Part of Cook's Thumb Ends Up In Customer's Salad
-----------------------------------------------------------
Stark County Health Commissioner Bill Franks said an employee at
Red Robin Gourmet Burgers in the Canton suburb Jackson Township
was chopping lettuce at about 7 p.m. Monday when he cut off a
part of his left thumb, including part of the fingernail, which
ended up being served in a salad dish, the Associated Press
reports.
Employees at the restaurant about 70 miles south of Cleveland
searched for the tip of his finger, but could not find it. The
area was cleaned and sanitized, but the lettuce was placed in
the cooler. The lettuce was then used for salads the next day.
"It wound up being served at lunch time Tuesday to a 22-year-old
woman," Franks told the AP. She had eaten most of her salad when
she put the human tissue in her mouth, Franks said. She thought
it was a piece of gristle, a health department report said. She
then alerted a manager.
Red Robin spokesman Dwayne Chambers said that employees, in
their haste to get the injured man to a doctor, failed to follow
the chain's procedures and throw out all food in the area.
"We clearly had a breakdown," he said. "We are incredibly sorry
about what happened." Chambers said he spoke with the woman.
"She obviously was pretty upset," he said. The well-being of
customers is the Greenwood, Colo. restaurant's top priority,
Chambers said.
Franks said the restaurant has been cited for "serving
adulterated food" and having improper supervision. The
restaurant should have reported the incident Monday, he said.
Red Robin has been ordered to train the staff on safe food
procedures. Both the customer and the employee will be tested
for blood-borne diseases such as hepatitis and HIV. Franks did
not identify either person. "We don't think there was a lot of
blood that was passed, but we just don't want to take any
chances," he said. The Red Robin Web site says the chain has 222
restaurants, with 202 in the U.S., 20 in Canada and 17 currently
under construction.
SAME-SEX MARRIAGES: NY Judge Bars Mayor From Performing Weddings
----------------------------------------------------------------
State Supreme Court Justice Vincent Bradley of Ulster County
granted a temporary restraining order Friday, barring New Paltz
Mayor Jason West from performing any more same-sex marriages for
a month, the Associated Press reports.
"The mayor in substance ignores the oath of office that he took
to uphold the law," SC Justice Bradley said in a statement. The
restraining order was sought by the Florida-based Liberty
Counsel on behalf of a local resident.
West performed his first spate of 25 same-sex marriages last
Friday, drawing his little village 75 miles north of New York
City into a fast-spreading debate over gay marriage that has
roosted in communities from Portland, Ore. to Babylon, Long
Island. West had said earlier Friday that he was putting off a
second round of same-sex marriages planned for Saturday so he
could consult with state Attorney General Eliot Spitzer. But
West had said he only planned to postpone the weddings for a
week. A call to West's office seeking comment on Bradley's
ruling was not immediately returned.
Also Friday, Gov. George Pataki said the state would be ready to
crack down on any public official who performed a wedding
without a marriage license.
SAME-SEX MARRIAGES: Wisconsin Assembly Bans Gay Weddings
--------------------------------------------------------
After meeting on the issue all night, the Wisconsin State
Assembly voted 68-27 on Friday, approving a proposed amendment
to the Wisconsin Constitution prohibiting same-sex marriages or
civil unions, the Associated Press reports.
The Assembly first took up the amendment Thursday afternoon and
continued into early Friday as its opponents gave speeches
slamming it. Its supporters largely declined to enter into a
debate, refusing to answer questions about the amendment's
merits. Democrats unsuccessfully tried to derail the amendment
with a series of procedural maneuvers.
NEVADA: Hospital Faces Suits Over Suspension Of Surgery Program
---------------------------------------------------------------
For the second time in six weeks, Carson-Tahoe Hospital has been
sued for temporarily suspending its gastric bypass surgery
program, The Reno Gazette-Journal reports.
The most recent lawsuit, filed this week in Carson City District
Court, is a class action case brought by six patients of Dr.
Kent Skogerson. Another 18 patients have asked the court to be
included as plaintiffs. Patient abandonment, breach of contract,
breach of fiduciary duty, bad faith, negligence,
misrepresentation and emotional distress are alleged in the
complaint.
In an earlier case, filed in January, Skogerson, who founded the
obesity surgery program and is the principal doctor, claimed the
hospital interfered with his practice and conspired to prevent
him from treating his patients. In that complaint, Skogerson
said the hospital suspended the program without explanation or
advance notice. Hospital officials said they placed a two-month
moratorium on the elective surgery after the death of a 31-year-
old female patient in November. After a review of policies and
procedures during December and January, officials said program
guidelines were revised to help ensure a greater degree of
safety. The moratorium was lifted Feb. 1. The patients'
complaint alleges the hospital hasn't worked to help Skogerson's
patients get re-scheduled for surgery since the moratorium was
lifted. Hospital officials denied the claim.
Under the revised hospital-based program, which requires a
number of a pre-screening requirements, no surgeries have been
scheduled. But officials said Thursday they are close to
completing preparatory work for two patients of Dr. Timothy
King. Since the bariatric surgery program was reinstated,
Skogerson has submitted the name of only one patient for
surgery, said Mike Pavlakis, lawyer for the hospital. But
supporting documents showing the patient has completed required
consultations and evaluations haven't been provided, Pavlakis
said. Pavlakis said Skogerson has instructed the hospital staff
not to communicate with his patients. Skogerson referred
questions about plans for his patients to lawyer Pat King, who
has clients in the class action case. King was unavailable for
comment.
About 22 of Skogerson's other patients had undergone the
screening and were scheduled for the operation in December and
January. Skogerson has continued to receive support from other
patients, who have complained to the hospital that they've been
forced to endure major hardships because of the moratorium.
Under the revised Carson-Tahoe policies developed by a
committee, medical directors will review each case and work with
the treating physician. Hospital officials said two doctors have
been appointed co-medical directors and noted the new procedures
will provide support to the doctor and give patients a hospital
contact. The new guidelines are based on recommendations by the
American Society for Bariatric Surgery and the National
Institutes of Health.
Skogerson said his policies and procedures were also based on
nationally recognized standards for the specialized surgery.
Furthermore, he contended no one on the hospital's committee
that worked in developing the new protocols are qualified
bariatric experts. Prior to the moratorium, Skogerson said the
hospital accepted his policies and procedures. He has performed
about 300 of the specialty surgeries at the hospital over the
past 3 1/2 years.
Bariatric surgery, which involves significantly reducing the
size of the stomach, is becoming increasingly popular for the
excessively overweight. Patients who go through the program are
in poor health in general and must go through a number of pre-
screening programs.
The lawsuit filed this week seeks damages in excess of $40,000
per patient, or a minimum of $3.28 million if a judge approves
the class action case and all of the estimated 82 patients
waiting for treatment opt to enter the suit.
SUPERGEN INC.: California Plaintiffs Drop Securities Lawsuits
-------------------------------------------------------------
John R. Blum filed on April 14, 2003 a class action complaint
entitled John R. Blum v. SuperGen, Inc., et al., No. C 03-1576
in the U.S. District Court for the Northern District of
California, against SuperGen Inc. and its former president and
chief executive officer alleging violations of the Exchange Act
and seeking unspecified damages. Subsequently, six similar
actions were filed in the same court.
Each of the complaints purported to be a class action lawsuit
brought on behalf of persons who purchased or otherwise acquired
the company's common stock during the period of April 18, 2000
through March 13, 2003, inclusive (except that one complaint
specified the period as between April 18, 2000 through March 14,
2003). The complaints alleged that during such period, the
company issued materially false and misleading statements and
failed to disclose certain key information regarding Mitozytrex.
The complaints did not specify the amount of damages sought.
In July 2003, each of the plaintiffs elected to voluntarily
dismiss their respective complaints without prejudice. Each of
the dismissals has been approved and entered by the court.
"We have not made any monetary payments and have no obligation
to make any monetary payments whatsoever or any other
obligations to any of the plaintiffs or their counsel in
connection with the dismissals," SuperGen said in its latest SEC
disclosure. "We are not currently subject to any pending
material legal proceedings."
For more information, contact SuperGen Inc. by Mail: 4140 Dublin
Blvd, Suite 200 Dublin CA 94568 or by Phone: (925) 560-0100.
TOBACCO LITIGATION: Court Rejects Appeal Of 'Lights' Suit Review
----------------------------------------------------------------
The Minnesota Court of Appeals declined to accept an
interlocutory appeal of a trial court's decision rejecting class
action status for the Curtis "lights" case against Philip Morris
USA, Business Wire reports.
In its ruling, the appellate court refused to grant
discretionary review of the January 16 order from Hennepin
District Judge Allen Oleisky. The plaintiffs sought the review,
claiming that Judge Oleisky abused his discretion in denying
class certification in the Curtis "lights" case. In his ruling,
Judge Oleisky concluded that, as a practical matter, the
plaintiffs could not demonstrate that each member of the class,
hundreds of thousands of smokers, actually suffered any harm as
a result of statements by the company.
The only "lights" class actions to be considered by appellate
courts were decertified on the basis that determining liability
in such cases requires an examination of each individual
smoker's circumstances. The Curtis trial court reached the same
conclusion.
About 20 "lights" class action cases are pending across the
country. Only three, involving smokers in Illinois, Missouri and
several counties in Ohio, are now certified as class actions.
All are being appealed. The Illinois case, known as Price, is
currently under review by the Illinois Supreme Court. State
appellate courts have decertified two "lights" cases in
Massachusetts and Florida.
TRI-STATE CREMATORY: Lawyers Make Opening Statements In Trial
-------------------------------------------------------------
In her opening statements in the trial of a former Georgia
crematory operator accused of dumping 334 bodies on his property
and passing off cement dust as ashes, plaintiffs lawyer Kathryn
Barnett, urged jurors to punish the operator of the family-owned
Tri-State Crematory for engaging in a culture of "disrespect for
the dead that stretched from father to son," the Associated
Press reports.
Ray Brent Marsh allegedly stopped performing cremations in 1997,
when he took over the family business from his father. In 2002,
dozens of decomposing corpses were found stacked in storage
sheds and scattered in woods outside the crematory in rural
northwest Georgia.
The suit seeks unspecified damages against Marsh for about 1,600
people who accuse him of negligence and fraud. He also faces 787
felony charges for the uncremated bodies. The lawsuit also names
some of Marsh's family members who served as officers at the
crematory and five funeral homes that sent corpses there.
Funeral home lawyer Andy Davis said his clients should not be
held responsible. "This case is about deception, perhaps the
greatest deception ever," Davis said. "The facts are undisputed.
Ray Brent Marsh deceived us all." Frank Jenkins, a lawyer for
Marsh, said the police rushed to judgment and conducted a sloppy
investigation. The resulting media frenzy, he said, caused
hundreds of families to believe Marsh didn't cremate their loved
ones when he actually did.
Forty-seven funeral homes have reached settlements with the
plaintiffs, who said the homes failed to monitor the crematory
despite numerous complaints. In total, settlements have reached
more than $20 million, said Robert Smalley, a lawyer for the
plaintiffs.
TYCO INTERNATIONAL: Judge Drops Top Charge V. Ex-Execs In Case
--------------------------------------------------------------
A judge in one of the biggest corporate corruption cases in U.S.
history on Friday threw out one of the most serious charges
against the two former top executives accused of looting Tyco
International Ltd. of $600 million, Reuters News reports.
Manhattan Supreme Court Judge Michael Obus dismissed a single
count of enterprise corruption, which carries a sentence of up
to 25 years in prison. But he left intact the rest of the 33-
count indictment against former Tyco Chairman Dennis Kozlowski
and former chief financial officer Mark Swartz. "Submission of
enterprise corruption is not appropriate in this case," Obus
said in a ruling from the bench. The charge is usually used to
prosecute organized crime leaders.
Legal experts called the judge's decision a victory for the
defense, but said it may also be a blessing for prosecutors
because it simplifies a case that grew complicated during five
months of testimony. Prosecutors alleged Kozlowski and Swartz
created an enterprise within the Bermuda-based conglomerate to
obtain money by theft, fraud, false records and bribery.
Kozlowski and Swartz still face charges of grand larceny,
conspiracy, securities fraud and falsifying business records.
These remaining charges carry prison sentences of up to 25
years.
Jury deliberations are expected to begin on Thursday after
closing arguments early next week. Both men have denied any
wrongdoing in a trial that began in September.
Obus said he had "serious reservations" about the securities
fraud charge, but let it stand. The former executives are
accused of looting Tyco by obtaining $430 million through
fraudulent stock sales and stealing another $170 million by
tapping loan and bonus programs without board approval.
Last month, Obus expressed doubt about the enterprise corruption
charge, saying he upheld the charge before the trial began on
the theory that there could be a two-man enterprise.
WESTERN SIERRA: Certification Of Credit Card Suit Denied In IL
--------------------------------------------------------------
The United States District Court for the Northern District of
Illinois, Eastern Division denied certification of a lawsuit
brought against Western Sierra Acceptance Corporation, and Ridge
Chrysler/ Plymouth, LLC doing business as Marquette Chrysler
Jeep, on behalf of Plaintiffs Oneta S. Sampson and Lisa Stroud,
seeking redress against aforementioned defendants for accessing
her credit report without her consent or any lawful reason, in
violation of the Fair Credit Reporting Act (FCRA). Plaintiff now
seeks class certification pursuant to Federal Rule of Civil
Procedure 23. The proposed class would consist of all persons
whose credit reports were accessed or caused to be accessed by
Western Sierra for the purpose of transmitting the "Pre-Approved
Notices" on or after Feb. 25, 2001.
Defendants argue that this situation is similar to those
involving the Truth In Lending Act (TILA) in which many courts
found class actions to be inferior to individual adjudication.
In the seminal case on that issue, Ratner v. Chemical Bank New
York Trust Co., the plaintiffs alleged that the defendant bank
had failed to display the annual percentage rate on his credit
card statement and in so doing had violated TILA. This violation
carried with it the same statutory minimum damage award as the
FCRA, a minimum of $100 and a maximum of $1,000 regardless of
actual harm sustained by the plaintiffs. In that case,
plaintiffs sought to certify a class consisting of 130,000
cardholders, which could have led to a minimum damage award of
$13 million. The Ratner Court found that class actions were not
superior because the aggregate potential liability "would be a
horrendous, possibly annihilating punishment, unrelated to any
damage to the purported class or to any benefit to defendant,
for what is at most a technical and debatable violation."
New Securities Fraud Cases
99 CENTS ONLY: Rabin Murray Commences Securities Suit in C.D. CA
----------------------------------------------------------------
Rabin, Murray & Frank LLP initiated a Class Action lawsuit in
the United States District Court for the Central District of
California, on behalf of a class consisting of all persons who
purchased or otherwise acquired securities of 99 Cents Only
Stores between April 20, 2000 and February 4, 2004, inclusive,
against defendants 99 Cents Stores, and:
(1) Helen Pipkin,
(2) Andrew Farina,
(3) Sherry Gold,
(4) David Gold, and
(5) Jose G. Gomez
The lawsuit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. The complaint alleges that Defendants caused 99
Cents Stores' shares to trade at artificially inflated levels
through the issuance of false and misleading financial
statements. Specifically, the Company will be required to
restate its financial statements for Class Period and reverse
reported income attributable to its previously operated
Universal International division and increase its workers'
compensation reserve for year end 2003 and possibly additional
periods. Unlike most retailers which, when performing actuarial
calculations of liability and accounting methodology, account
for workers' compensation by discounting cash flow, the
defendants schemed to inflate the Company's income by using a
gross basis.
For more information, contact Eric J. Belfi or Aaron D. Patton,
by Phone: (800) 497-8076 or (212) 682-1818, Fax: (212) 682-1892,
or by E-mail: info@rabinlaw.com.
ADECCO SA: Spector Roseman Launches Securities Suit in E.D. NY
--------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. initiated a securities class
action lawsuit in the United States District Court for the
Eastern District of New York, against Adecco S.A. and certain of
its officers and directors, on behalf of purchasers of its
publicly traded securities between March 16, 2000 through
January 12, 2004, inclusive.
The Complaint alleges that during the Class Period, defendants
violated the federal securities laws by issuing materially false
and misleading financial information contained in Adecco's
public filings, press releases and other public statements. The
Complaint alleges that the Company's revenues and earnings were
artificially inflated due to improper accounting practices. On
January 12, 2004, Adecco announced the delay in the completion
of an audit of the Company 's 2003 financial results. The
Company's press release disclosed that the delay was the result
of "material weaknesses in internal controls in the Company's
North American operations of Adecco Staffing" and "possible
accounting, control and compliance issues in the Company's
operations in certain countries." As a result of this
disclosure, the Company's stock price dropped more than 30%.
For more information, contact Robert M. Roseman, by Phone:
(888) 844-5862 (toll free), or by E-mail:
classaction@srk-law.com.
AGCO CORPORATION: Wolf Popper Lodges Securities Suit in N.D. GA
---------------------------------------------------------------
Wolf Popper LLP initiated a securities class action in the
United States District Court for the Northern District of
Georgia, against AGCO Corporation and certain of its officers,
on behalf of all persons and entities who purchased the
securities of AGCO from February 6, 2003 through and including
February 5, 2004.
The Complaint, styled Vogel v. AGCO Corporation, et al., charges
that, during the Class Period, the Company violated the federal
securities laws by issuing materially false and misleading
quarterly and yearly financial statements. Specifically, AGCO
violated generally accepted accounting principles, as well as
its own stated revenue recognition policy, by engaging in "bill
and hold" transactions, whereby the Company prematurely
recognized revenue before the earnings process was complete.
This had the effect of allowing the Company to improperly book
and recognize sales at December 31, 2003 and 2002 of
approximately $32.8 million and $29.9 million, respectively,
thus artificially inflating AGCO's stock price to the detriment
of Company shareholders.
On February 5, 2004, AGCO shocked investors when it issued a
press release announcing that it was the subject of an informal
SEC investigation into its "accounting for revenue recognition
(particularly bill and hold transactions), sales and sales
returns and allowances, plant and facility closing costs and
reserves, and personal use of corporate aircraft." In response
to this announcement, the Company's shares fell precipitously
over 16%, or $3.10 per share, to close at $16.25 per share on
extremely high trading volume.
For more information, contact Michael A. Schwartz, by Mail: 845
Third Avenue, New York, NY 10022, by Phone: 212-759-4600 or
877-370-7704 (toll free), by E-mail: irrep@wolfpopper.com, or
visit the firm's Web site: http://www.wolfpopper.com.
EL PASO CORPORATION: Weiss & Yourman Files Securities Suit in TX
----------------------------------------------------------------
Weiss & Yourman, LLP initiated a class action lawsuit in the
United States District Court for the Southern District of Texas,
against El Paso Corporation and its officers, on behalf of
purchasers of El Paso securities between March 30, 2003 and
February 17, 2004, inclusive.
The complaint charges the defendants with violations of the
Securities Exchange Act of 1934. The complaint alleges that
defendants issued false and misleading statements that
artificially inflated the stock.
For more information, contact Mark D. Smilow, James E. Tullman,
or David C. Katz, by Mail: The French Building, 551 Fifth
Avenue, Suite 1600, New York, New York 10176, by Phone:
888-593-4771 or 212-682-3025, or by E-mail: info@wynyc.com.
IBIS TECHNOLOGY: Bernstein Liebhard Files Securities Suit in MA
---------------------------------------------------------------
Bernstein, Liebhard & Lifshitz, LLP initiated a securities class
action lawsuit in the United States District Court for the
District of Massachusetts, on behalf of all persons who acquired
securities of Ibis Technology Corp. between October 2, 2003 and
December 12, 2003, inclusive, against Defendants Ibis and Martin
J. Reid.
The Complaint charges that Ibis and Martin J. Reid 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 Ibis's
securities. Specifically, Defendants indicated that the Company
had several orders from Japanese manufacturers for its
implanting machines, which individually sold for approximately
$8 million each.
Then on December 15, 2003, Defendants filed a Form 8-K with the
SEC admitting there would be no sales of the i2000 implanters to
Japanese wafer manufacturers and that Defendants expected to
receive an order for only one implanter sometime in 2004.
Additionally, Defendants admitted that they would record a
"material charge" due to the impairment of its smaller
production size equipment. In reaction to this announcement, on
December 15, 2003, the price of Ibis's common stock fell to
$10.37 per share from a $15.40 per share close on December 1.
For more information, contact the Shareholder Relations
Department, by Mail: 10 East 40th Street, New York, New York
10016, by Phone: (800) 217-1522 or (212) 779-1414, or by E-mail:
IBIS@bernlieb.com.
MICROMUSE: Bernstein Liebhard Lodges Securities Suit in N.D. CA
---------------------------------------------------------------
Bernstein Liebhard & Lifshitz, LLP initiated a securities class
action lawsuit in the United States District Court for the
Northern District of California, on behalf of all persons who
purchased or acquired securities of Micromuse, Inc. between
January 20, 2000 through December 29, 2003, inclusive, seeking
to pursue remedies under the Securities Exchange Act of 1934
The complaint alleges that during the Class Period, defendants
knowingly or recklessly issued materially false and misleading
financial statements that misrepresented the Company's earnings
and shareholder equity. During this period, Company insiders
sold Micromuse stock for proceeds of approximately $174 million.
The class period ends on December 29, 2003. On that date, the
Company announced that filing of its annual report on Form 10-K
would be delayed pending completion of an internal inquiry,
primarily regarding accounting for accrued expenses and expense
recognition, and that the Company expected the inquiry to lead
to a restatement of financial results for the fiscal years
ending September 20, 2000, 2001, 2002 and 2003. In reaction to
this announcement, the price of Micromuse common stock dropped
by 12.4%, from a closing price of $6.90 on December 29, 2003,
and closed the day down 4% at $6.59 on volume ten times greater
than average.
For more information, contact the Shareholder Relations
Department, by Mail: 10 East 40th Street, New York, New York
10016, by Phone: (800) 217-1522 or (212) 779-1414, or by E-mail:
IBIS@bernlieb.com.
SONUS NETWORKS: Schatz & Nobel Commences Securities Suit in MA
--------------------------------------------------------------
Schatz & Nobel, LLP initiated a lawsuit seeking class action
status in the United States District Court for the District of
Massachusetts, on behalf of all persons who purchased the
securities of Sonus Networks, Inc. from July 11, 2003 through
February 11, 2004, inclusive.
The Complaint alleges that Sonus, a provider of voice
infrastructure solutions, and certain of its officers and
directors, issued materially false statements concerning Sonus'
financial results and performance. Specifically, defendants
failed to disclose that they had recognized revenue improperly
and in an untimely manner on certain of the Company's
transactions in contravention of generally accepted accounting
principles and the Company's revenue recognition policy.
On February 11, 2004, Sonus announced that it had discovered
certain issues, practices and actions of certain employees
relating to both the timing of revenue recognized from certain
customer transactions and to certain other financial statement
accounts, which may affect the Company's 2003 financial
statements and possibly financial statements for prior periods.
Sonus was unable to provide an anticipated date for the
completion of its review, year- end audit, or the rescheduling
of the release of its fourth quarter and fiscal year results for
the year ended December 31, 2003. On this news, Sonus' shares
fell as low as $5.02 per share on February 12, 2004, a decline
of 24.9% or $1.67 per share from the previous day's closing
price.
For more information, contact Schatz & Nobel, P.C. by Phone:
(800) 797-5499, or by E-mail: sn06106@aol.com.
SPX CORPORATION: Milberg Weiss Launches Securities Suit in NC
-------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach, LLP initiated a class
action lawsuit in the United States District court for the
Western District of North Carolina, on behalf of purchasers of
the securities of SPX Corporation between July 28, 2003 and
February 26, 2004, inclusive, seeking to pursue remedies under
the Securities Exchange Act of 1934, against defendants SPX,
and:
(1) John B. Blystone,
(2) Patrick J. O'leary,
(3) Ronald L. Winowieck,
(4) Christopher J. Kearney, and
(5) Lewis M. Kling
The lawsuit alleges violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. Throughout the Class Period, defendants issued false
and misleading projections of the Company's fiscal year 2003
earnings per share. Defendants emphasized increased free cash
flow and earnings per share throughout the Class Period.
Defendants failed to disclose that these results were only made
possible through a last minute one-time gain resulting from a
legal settlement, and were not reflective of the deteriorating
underlying business operations of the Company. As a result,
defendants' Class Period statements were materially false and
misleading as to the profitability of its current organic
operations and the Company's future earnings. SPX stock
plummeted 21%, on usually high trading volume of 16 million
shares, from its February 26, 2004 close of $53.30 per share to
a close of $42.00 on February 27, 2004.
Throughout the Class Period, defendants issued public statements
assuring investors that SPX was on track to meet its earnings
per share projections, when in fact, defendants knew the
Company's financial growth had materially declined. While the
investing public was shielded from the truth of the Company's
poor earnings prospects, in January and February 2004 Defendant
and CEO Blystone sold significant portions of his own SPX
holdings, amounting to over $41 million in SPX stock. On
February 27, 2004 defendants filed the 2003 Form 10-K with the
SEC, revealing the true financial condition of SPX, and that the
Company was only able to meet its EPS projections through
inclusion of a one-time gain.
For more information, contact Steven G. Schulman, by Mail: One
Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, by
Phone: (800) 320-5081, or by E-mail: spxcorp@milberg.com.
WINN-DIXIE: Chitwood & Harley Files Securities Suit in M.D. FL
--------------------------------------------------------------
Chitwood & Harley initiated a class action lawsuit in the United
States District Court for the Middle District of Florida, on
behalf of all purchasers of securities of Winn-Dixie Stores,
Inc. between May 6, 2002 and January 29, 2004, inclusive,
against defendants Winn-Dixie Stores, Inc., and:
(1) Allen R. Rowland,
(2) Frank Lazaran,
(3) Richard P. McCook, and
(4) D. Michael Byrum
The Complaint alleges that defendants made false and misleading
statements concerning its business and financial performance.
Throughout the Class Period, defendants issues a series of
material misrepresentations to the market concerning the
Company's financial condition. Defendants assured investors that
Winn-Dixie was successfully executing its business plan to
completely restructure the Company and its stores and to restore
profitability. Defendants also regularly announced the issuance
of cash dividends as an additional sign of the Company's
purported financial health.
On January 30, 2004, Winn-Dixie announced a loss for the second
quarter of 2004 of nearly $80 million or $0.57 per share. Winn-
Dixie's stock plunged nearly 28% on unusually high volume of
nearly 25 million shares. Shockingly, defendants announced that
dividend payments would be suspended indefinitely, after
assuring investors only a few days earlier, on January 20, 2004,
that the dividend would be paid and that the Company was moving
forward in the execution of its business plan.
In the January 30, 2004 announcement, defendants revealed a plan
for $100 million in expense reductions and analysis of the
Company's core markets. Winn-Dixie also announced it would need
to add $21.4 million to reserves for self-insurance, and would
recognize a $36.4 million charge to earnings for an impaired
asset. Standard & Poor's cut the Company's debt rating saying
this reflected a "severe and rapid deterioration in Winn-Dixie's
operating performance."
For more information, contact Nichole T. Browning, by Mail: 1230
Peachtree Street, Suite 2300, Atlanta, Georgia 30309, by Phone:
1-888-873-3999, ext. 4873 (toll-free), by E-mail:
ntb@classlaw.com, or visit the firm's Web site:
http://www.classlaw.com.
WINN-DIXIE: Glancy Binkow Commences Securities Suit in M.D. FL
--------------------------------------------------------------
Glancy Binkow & Goldberg LLP initiated a Class Action lawsuit
in the United States District Court for the Middle District of
Florida, on behalf of a class consisting of all persons who
purchased or otherwise acquired securities of Winn-Dixie Stores,
Inc. between May 6, 2002 and January 29, 2004, inclusive,
against Winn-Dixie and certain of the Company's executive
officers, alleging violations of federal securities laws.
Among other things, plaintiff claims that defendants' omissions
and material misrepresentations concerning Winn-Dixie's business
operations and financial condition caused the Company's stock
price to become artificially inflated, inflicting damages on
investors. Winn-Dixie is one of the largest food retailers in
the nation and operates more than 1,070 stores in the United
States and Bahamas. The complaint alleges that during the Class
Period defendants failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) Winn- Dixie's business operations were mismanaged and
burning cash such that the Company was unable to reduce
excess expenses when needed;
(2) the Company had no strategic vision in place to enhance
shareholder value and thus would not be able to sustain
dividend payments to shareholders;
(3) the Company was unable to competitively market its
Winn-Dixie product brand;
(4) Winn-Dixie was unable to gain a greater market share
for its supermarkets;
(5) the loss of Canadian Imperial Bank of Commerce
automated teller machines would result in a decline in
sales in stores that had these ATMs; and
(6) the Company recorded the carrying value of its durable
assets at inflated levels and maintained inadequate
reserves for self-insurance.
On January 30, 2004, Winn-Dixie announced net losses from sales
and operations for its fiscal 2004 second quarter. The Company
also announced major new initiatives designed to improve
competitive market position and profitability and announced that
it had to take an asset impairment charge of $36.4 million and
an increase in self-insurance reserves of $21.4 million. This
news shocked the market, causing Winn-Dixie's share price to
plummet 27.8%, or $2.53 per share, to close at $6.56 on January
30, 2004, on extremely heavy volume. Plaintiff seeks to recover
damages on behalf of Class members and is represented by Glancy
Binkow & Goldberg LLP, a law firm with significant experience in
prosecuting class actions, and substantial expertise in actions
involving corporate fraud.
For more information, contact Michael Goldberg, by Mail: 1801
Avenue of the Stars, Suite 311, Los Angeles, California 90067,
by Phone: (310) 201-9161 or (888) 773-9224 (toll free), or by E-
mail: info@glancylaw.com.
*********
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
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Enid Sterling, Roberto Amor, Aurora Fatima Antonio and
Lyndsey Resnick, Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
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