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/raid1/www/Hosts/bankrupt/CAR_Public/041126.mbx C L A S S A C T I O N R E P O R T E R Friday, November 26, 2004, Vol. 6, No. 235 Headlines 3R BANCORP: Faces FTC Charges Of Credit Card, Consumer Fraud ACE LIMITED: Receives Subpoenas From SEC, NY Attorney General ADVANCEPCS: Asks PA Court To Reconsider Arbitration For Lawsuit ADVANCEPCS: Plaintiffs Appeal Dismissal of AL ERISA Fraud Suit ADVANCEPCS: Asks NJ Court To Grant Summary Judgment in Lawsuit AIRNET COMMUNICATIONS: Working To Settle NY Securities Lawsuit ALLEN'S BLUEBERRY: 176 Growers File Claims For $5M ME Settlement AMERICAN HONDA: Recalls 257,616 Sedans Due To Air Bag Defects AMERICAN MORTGAGE: Principal Resident Employees File Suit in NY ARGOSY GAMING: Shareholder Launches Suit V. Penn National Merger BRISTOL-MYERS: Reaches $70 Mil Serzone Lawsuit Settlement in WV CANADA: CIC Offers "Settlement" To Immigrants Affected By IRPA CAREMARK INC.: Asks TN Court To Dismiss ERISA Violations Lawsuit CAREMARK RX: Asks AL Court To Dismiss ERISA Violations Suits CAREMARK RX: Lawsuit For Shareholder Fraud Proceeds in AL Court CAREMARK RX: IL Court Nixes Antitrust Violations Suits Dismissal CLARUS CORPORATION: Reaches Settlement for GA Securities Lawsuit DANKA INDUSTRIES: Asks TN Court For Summary Judgment in Lawsuit DIET SUPPLEMENTS: FTC Charges Firms For False Weight Loss Claims ECHOSTAR COMMUNICATIONS: Certification Hearing Set Dec. 7, 2004 ECHOSTAR COMMUNICATIONS: Limited Discovery Proceeds in CO Suits ECHOSTAR COMMUNICATIONS: Dismissal of TX Retailers Suit Upheld EQUITY RESIDENTIAL: Bench Trial Completed in FL Tenant Fees Suit IDAHO: Residents Ask Attorney General To Sue Federal Government IMPAC FUNDING: IL Court Dismisses Prepayment Penalties Lawsuit JAYCO INC.: Recalls 317 Trailers Due To Service Brake Defects JAYCO INC.: Recalls 370 Trailers Due To Incorrect Tire Labels MICHIGAN: Macomb County Judge Certifies Suit V. City Of Warren MICHIGAN SUGAR: Settles With Residents Bothered By Plant Odors NEKTAR THERAPEUTICS: Shareholders Launch Stock Fraud Suit in CA NEW JERSEY: Drug Makers Face Suit On Amiodarone "Over-Promotion" NEW MEXICO: Albuquerque Nearer to Pact in 10-Year McClendon Suit NEW YORK: Comptroller's Office Receives 300 Claims Over Arrests NORTH CAROLINA: NC Court Bars Furniture Dealer Because of Fraud PEOPLESOFT INC.: DE Judge Rejects Shareholder's Suit Settlement REPUBLIC BANCORP: Seeks Judgment, Arbitration, Relief in NC Suit SPECTRALINK CORPORATION: CO Court Approves Stock Suit Settlement SHERWIN WILLIAMS: Lead Paint Litigation Trial Set For April 2005 SERVICE CORPORATION: TX Court Approves Stock Lawsuit Settlement SERVICE CORPORATION: FL Court OKs Grave Desecration Settlement SERVICE CORPORATION: Shareholders File Consolidated Suit in TX SERVICE CORPORATION: Faces Consumer Fraud Lawsuit in TX Court UNISOURCE ENERGY: Asks AZ Court To Dismiss Shareholder Lawsuit VIROPHARMA INC.: PA Court Approves Securities Lawsuit Settlement Asbestos Alert ASBESTOS LITIGATION: MT Hospital Uses $3.5M to Boost Treatment ASBESTOS LITIGATION: Missouri Residents Oppose Landfill Proposal ASBESTOS LITIGATION: Neighbors Call for Gate's Safe Demolition ASBESTOS LITIGATION: Ground Chemicals Fail to Deter Land Buyers ASBESTOS LITIGATION: Awareness Week Scheduled to Educate, Inform ASBESTOS LITIGATION: FL Jury Awards $400T to Ex-Safety Director ASBESTOS LITIGATION: Asbestos Used on Rise in Asia, Says Expert ASBESTOS LITIGATION: Wolseley Reports Liability of GBD27.9M ASBESTOS LITIGATION: MI Agencies Agree on Plan for Quincy Site ASBESTOS LITIGATION: Solbec's Cancer Drug Testing A Huge Success ASBESTOS LITIGATION: Cancer Victim Accepts US$4M Settlement ASBESTOS LITIGATION: Tower Properties Reaches US$50T Settlement ASBESTOS LITIGATION: Archicentre Stresses Home Renovation Risks ASBESTOS LITIGATION: UK Court Summons Huntsman to Face 5 Charges ASBESTOS LITIGATION: RAND Prompts Michigan to Mimic Ohio's Law ASBESTOS LITIGATION: PA Judge Grants Halliburton's Plan for DII ASBESTOS LITIGATION: Papers Expose Washington Chemical Cover-up ASBESTOS LITIGATION: MSA Named in Less Than 300 Liability Suits ASBESTOS LITIGATION: Hardie Payouts End as MRCF Seeks Liquidator ASBESTOS LITIGATION: Ballantyne Settles NY Case, Battles 2 More ASBESTOS LITIGATION: Illinois Power Co. Faces 39 Pending Suits ASBESTOS LITIGATION: ALSTOM Tackles Various Claims Worldwide ASBESTOS ALERT: 9/11 Workers Sue EPA for Misleading Statements ASBESTOS ALERT: DEQ Hits Owner with $1T Fine for Unsafe Removal ASBESTOS ALERT: Death of Ex-Navy Worker Caused by Mesothelioma ASBESTOS ALERT: Post Office Break-in Attempt Fosters Closure ASBESTOS ALERT: UK Inquest Reveals Asbestos as Cause of Death ASBESTOS ALERT: Break-in Sets Off Health Scare at UK High School ASBESTOS ALERT: Officials Probe Exposure at Brisbane High School ASBESTOS ALERT: ICI Awards GBD85T to Widow of Ex-Plumber/Welder ASBESTOS ALERT: DEQ Fines Crown and SMAF with More Than $71,000 ASBESTOS ALERT: Transgrid Workshop Closed Due to Asbestos Find ASBESTOS ALERT: Asbestos Fear Leads to Evacuation at HI School New Securities Fraud Cases AUTOBYTEL INC.: Scott + Scott Lodges Securities Fraud Suit in CA JAKKS PACIFIC: Lasky & Rifkind Files Securities Fraud Suit in NY SEARS ROEBUCK: Squitieri & Fearon Lodges Securities Suit in IL SIRVA INC.: Milberg Weiss Lodges Securities Fraud Lawsuit in IL UNITED RENTALS: Marc S. Henzel Files Securities Fraud Suit in CT ********* 3R BANCORP: Faces FTC Charges Of Credit Card, Consumer Fraud ------------------------------------------------------------ The Federal Trade Commission (FTC) has charged a cross-border telemarketing enterprise with defrauding consumers out of millions of dollars by offering them a "guaranteed" low-interest credit card for an advance fee, then failing to come through on its promise. According to the FTC's complaint, the defendants, operating boiler rooms in the United States, Canada, and India, targeted consumers with poor credit and used promises for credit cards to trick them into revealing their bank account information. On November 17, a U.S. district Court in Chicago issued a temporary restraining order halting the defendants' illegal activities, freezing their assets, and appointing a receiver to take over their operation. The FTC's complaint against 3R Bancorp states that, since at least May 2002, the defendants have called consumers across the United States and falsely claimed they would provide them with credit cards in exchange for an advance fee, typically at least $149. The defendants allegedly claim that consumers are pre- approved for an unsecured Visa or MasterCard with a low interest rate and a high credit limit, with no security deposit required regardless of the consumer's credit history. The FTC alleges that the defendants use high-pressure sales tactics to coerce consumers into providing their checking account information. The defendants then allegedly debit consumers' accounts and fail to provide the promised credit card. In papers filed with the Court, the FTC alleges that the defendants are unresponsive to consumers' refund requests and that consumers seeking refunds rarely receive them. The FTC's complaint also alleges that the defendants have called consumers whose telephone numbers are registered on the National Do Not Call Registry and failed to pay the required annual fee to access the registered telephone numbers. The FTC charges that the defendants have violated the FTC Act by falsely claiming that consumers would receive an unsecured credit card, then collecting money from consumers without providing the promised card. The FTC's complaint also alleges that the defendants violated the Telemarketing Sales Rule by making false claims via telemarketing and by calling consumers whose numbers are registered on the National Do Not Call Registry. The FTC has asked the Court to bar permanently the defendants' illegal business practices and award consumer redress. The FTC's complaint names: 3R Bancorp; 3R E-Solutions, Inc., d/b/a CR Bancorp, Euro Banca, 3R Companies, 3R Ventures, 3R Contact Centers, 3R Solutions, 3RE E-Solutions, R 3R E- Solutions, E3R E-Solutions, and E 3R Capital Solutions; 3R E- Solutions Corporation; National United Properties, LLC, d/b/a Awfmex Management Company; 3R Real Estate Corporation, d/b/a Fairview, Inc.; E Three R Info Systems Pvt. Ltd; Ranbir Sahni; John Perton; Oliver McKinney; Brian Murphy; and Kirt Charter as defendants. The FTC brought this matter with assistance from the members of the Toronto Strategic Partnership, a cross-border fraud law enforcement effort that includes, in addition to the FTC, Competition Bureau Canada, the Ontario Provincial Police Anti- Rackets, the Toronto Police Service Fraud Squad, the Ontario Ministry of Consumer and Business Services, and the United States Postal Inspection Service. The FTC also received valuable assistance in this matter from the U.S. Attorney's Office in the Central District of California, and Federal Bureau of Investigation, the U.S. Marshals Service, and the Long Beach, California Police Department. The Commission vote authorizing staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division on November 5, 2004. For more details, contact the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580 or visit the website: http://www.ftc.gov. Also, contact Jen Schwartzman, Office of Public Affairs by Phone: 202-326-2674 or C. Steven Baker or Guy Ward, FTC Midwest Region, by Phone: 312-960-5628 or 312-960-5612 ACE LIMITED: Receives Subpoenas From SEC, NY Attorney General ------------------------------------------------------------- ACE Limited has recently received subpoenas from the Securities and Exchange Commission and the New York Attorney General requesting documents in connection with an investigation of non- traditional, or loss mitigation, products, according to the law firm of Wolf Haldenstein Adler Freeman & Herz LLP. The law firm had filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of all persons who purchased the securities of ACE Limited ("ACE" or the "Company") (NYSE: ACE) between May 30, 2002 and 10:58a.m, Eastern Standard Time on October 14, 2004, inclusive, (the "Class Period") against defendants ACE and certain officers and directors of the Company. Wolf Haldenstein has been investigating additional claims that may be brought by employees during the class period. For more details, contact Mark C. Rifkin, Esq., Gustavo Bruckner, Esq., Christopher S. Hinton, Esq., or Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E- mail: classmember@whafh.com or visit their Web site: http://www.whafh.com. ADVANCEPCS: Asks PA Court To Reconsider Arbitration For Lawsuit --------------------------------------------------------------- Plaintiffs moved for reconsideration of the United States District Court for the Eastern District of Pennsylvania's ruling granting arbitration in the class action filed against AdvancePCS (now known as CaremarkPCS) by Bellevue Drug Co., Robert Schreiber, Inc., d/b/a Burns Pharmacy and Rehn-Huerbinger Drug Co., d/b/a Parkway Drugs, on behalf of themselves and all others similarly situated, and the Pharmacy Freedom Fund and the National Community Pharmacists Association. The plaintiffs allege antitrust violations under Section 1 of the Sherman Act arising from the Company's establishment of network rates for retail pharmacies. The plaintiffs are attempting to certify a class of all pharmacies that, at any time during the period commencing four years before the filing of the litigation through the present, contracted with the Company to dispense and sell brand name and generic prescription drugs for any prescription drug benefit plan(s). The plaintiffs seek three times actual money damages and injunctive relief enjoining the alleged antitrust violations. The Company moved to compel arbitration of any claims between it and the plaintiffs pursuant to the pharmacy services agreements it has with the plaintiffs. The motion to compel arbitration has been granted. The plaintiffs have moved for reconsideration of the Court's decision or to have the decision certified for an immediate appeal. The plaintiffs' motion is pending. ADVANCEPCS: Plaintiffs Appeal Dismissal of AL ERISA Fraud Suit -------------------------------------------------------------- Plaintiffs appealed the dismissal of the consolidated class action filed against AdvancePCS (now doing business as CaremarkPCS) in the United States District Court of Arizona. In April 2002, the Company was served with a purported class action filed by Tommie Glanton on behalf of the plaintiff's health plan and a putative class of self-funded health plans. In March 2003, AdvancePCS was served with a complaint filed by Tara Mackner in which the plaintiff, a purported participant in a self-funded health plan customer of AdvancePCS, sought to bring action on behalf of that plan. Each of the lawsuits sought unspecified monetary damages and injunctive relief. Because the previously filed Glanton case purported to be brought as a class action on behalf of self-funded plans, the Court consolidated the Mackner case and the Glanton case. In November 2003, the Court dismissed and terminated both the Glanton and Mackner cases on the pleadings, finding that the plaintiffs lacked standing to bring the actions under Employee Retirement Income Security Act (ERISA). The plaintiffs have appealed the District Court's dismissal of these cases to the United States Court of Appeals for the Ninth Circuit. The plaintiffs and AdvancePCS have filed their briefs in the appeal, and the United States Department of Labor has filed an amicus brief. ADVANCEPCS: Asks NJ Court To Grant Summary Judgment in Lawsuit -------------------------------------------------------------- AdvancePCS asked the United States District Court for the District of New Jersey to grant summary judgment in the class action, alleging violations of the Employee Retirement Income Security Act (ERISA). In March 1998, PCS Health Systems, Inc., a subsidiary of PCS Holding Corporation, which was acquired by Advance Paradigm (now known as AdvancePCS) in October 2000, was served with a purported class action lawsuit filed by Ed Mulder. The lawsuit alleges that PCS Health Systems, Inc. acts as a fiduciary, as that term is defined in ERISA, and has breached certain purported fiduciary duties under ERISA. The plaintiff is seeking injunctive relief and monetary damages in an unspecified amount. The plaintiff purported to represent a nation-wide class consisting of all members of all ERISA plans for which PCS Health Systems, Inc. provided PBM services during the class period. The Company opposed certification of this class, and in July 2003 the Court entered an order certifying a more limited class comprised only of members of those ERISA plans for which PCS Health Systems, Inc. provided services under its contract with a single HMO for a limited time period. Discovery in this lawsuit is proceeding. AIRNET COMMUNICATIONS: Working To Settle NY Securities Lawsuit -------------------------------------------------------------- AirNet Communications Corporation is working on the settlement of the consolidated securities class action filed in the United States District Court for the Southern District of New York, styled "IN re Airnet Communications Corporation Securities Litigation," related to "In re Securities Litigation, Case No. 21 MC 92 (SAS)." The suit also names as defendants the members of the underwriting syndicate involved in the Company's initial public offering and two of the Company's former officers. The suit alleges that the defendants violated federal securities laws and seeks unspecified monetary damages and certification of a plaintiff class consisting of all persons and entities who purchased, converted, exchanged or otherwise acquired shares of the Company's common stock between December 6, 1999 and December 6, 2000, inclusive. Specifically, the complaint charges the defendants with violations of Sections 11 and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. In substance, the allegations are that the underwriters of the Company's initial public offering charged commissions in excess of those disclosed in the initial public offering materials and that these actions were not properly disclosed. On July 15, 2002, the Issuers' Committee filed a Motion to Dismiss on behalf of all issuers and individual defendants in similar lawsuits. In February 2003, the Motion to Dismiss was granted in part (with respect to the Company) and denied in part (with respect to all issuer defendants). The claims against the Company's two former officers named in the class action lawsuit have been dismissed without prejudice. The issuer defendants and the plaintiffs have since drafted and agreed upon a settlement, which is pending approval by the Court. A committee of AirNet's Board of Directors has accepted the pending settlement. Pending Court approval, the individual tolling agreements dismissing the named individual defendants have been extended, so that the individual defendants will be covered by the settlement as well. While awaiting Court approval of the settlement, the issuers, including the Company, have complied with discovery obligations specified in the Settlement, by providing a limited number of documents. ALLEN'S BLUEBERRY: 176 Growers File Claims For $5M ME Settlement ---------------------------------------------------------------- Less than 200 of Maine's blueberry growers have filed claims for a portion of a $5 million settlement in a landmark lawsuit against Allen's Blueberry Freezer of Ellsworth, which accuses Allen's and three other blueberry processors with fixing prices paid to growers for four years in the 1990s, the Associated Press reports. That number was recently disclosed as Justice Joseph Jabar put his signature on the final piece of the settlement. The case is nearing an end following the agreement by Allen's Blueberry Freezer of Ellsworth to pay $1 million as its share of the settlement. The most startling moment in the Courtroom, however, was the disclosure that just 176 growers statewide have filed claims for a cut of the settlement, minus the attorneys' traditional one- third cut. But, this did not surprise the growers' attorneys, since throughout the four years of the case they have vehemently stated that as many as 800 growers could have been damaged by the price-fixing. According to William Robitzek, a Lewiston attorney who represented some of the growers, he can't control which growers file claims. He further states, "The pool of growers gets smaller once you peel off those who opted out of the suit in the beginning. Then there are growers who are still scared to death to be identified with this lawsuit, because the list of payouts will be published." Growers who can show how many pounds of fruit they sold in each of the seasons between 1996 and 1999 have until Dec. 23 to file their paperwork and join the claimants, according to Mr. Robitzek. The case, which was previously reported in the August 30, 2004 issue of the Class Action Reported, is Maine's first-ever class- action lawsuit and was decided last November 2003 when a civil jury awarded an $18.6 million judgment against Allen's, Cherryfield Foods of Cherryfield and Jasper Wyman & Son of Milbridge. Since antitrust issues were involved in the case, the damages were automatically tripled, raising the total to more than $56 million. In the settlement, Cherryfield Foods agreed to pay $2.5 million, and Wyman agreed to pay $1.5 million, reducing the processors' payout to a more manageable $5 million once Allen's, which initially challenged the settlement reached by Cherryfield and Wyman's, fell into step. The fourth and smallest processor sued, Merrill's Blueberry Farms of Ellsworth, reached its settlement with the growers for $85,000 last October, days before the case went to trial. AMERICAN HONDA: Recalls 257,616 Sedans Due To Air Bag Defects ------------------------------------------------------------- American Honda Motor Co. in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation is voluntarily recalling about 257,616 Year 2004 & 2005 Honda Accord Sedans due to air bag defects. According to the ODI, on certain sedans, a tear in the fabric of the driver's front air bag occurred after apparent contact with the inside surface of the airbag cover during deployment. A torn air bag may not offer the same level of protection, in the event of a crash, thereby increasing the risk of injury to the driver. As a remedy dealers will install a protective fabric flap between the air bag module and the inner module. The recall is expected to begin on December 6, 2004. For more details, contact NHTSA Auto Safety Hotline: 1-888-327-4236 or American Honda Motor Co.: 1-800-999-1009. AMERICAN MORTGAGE: Principal Resident Employees File Suit in NY --------------------------------------------------------------- William Gregory Williams, 49, and Suzanne Brayman, 56, two former employees of a Dallas-based company have initiated lawsuit against American Home Mortgage Holdings of Melville, one of the country's largest mortgage lenders alleging that the Company lured them to jobs with a pension promise the Company later reneged on, the New York Newsday reports. Filed in New York State Supreme Court in Central Islip, the lawsuit is seeking class-action status, which the plaintiffs' lawyers believe could cover at least 200 employees and involve $3 million to $5 million. American Home, a subsidiary of publicly traded American Home Mortgage Investment Corp., also of Melville, seemed unfazed by the lawsuit by former employees of the acquired Company, Principal Residential Mortgage. According to John LoVallo, American Home spokesman, "It's a two-person lawsuit and we think we are on the right side of the issue. We don't consider this lawsuit a material event in any way shape or form." Mr. Williams and Ms. Brayman were among the many employees of Principal Residential Mortgage who went to work for American Home in Dallas in March 2003, shortly after the Long Island Company revealed that it was going to buy Principal's retail mortgage network. According to the complaint, the plaintiffs were reluctant to join American at first because "they had benefits at Principal that were more attractive than those offered by American Home." The complaint further states that Principal made annual contributions to each employee's cash balance account, an employer-paid retirement program American Home didn't have and that in order to make its package more attractive, American said it would make an annual contribution to the employees' 401k programs, which they also had at Principal. However, American Home later reversed itself and said it would make a one-time contribution, the suit said and that "The promises were made not only verbally, but in writing," said one of the plaintiff's lawyers, Keith Clouse of Clouse Dunn Hirsh in Dallas. American also promised it would honor the employees' service at Principal toward the Long Island Company's vesting period, which is five years. But later on, according to the complaint, the mortgage banker said it would credit the Principal employees with just one year of service toward pension eligibility. That meant that Mr. Williams, who had worked at Principal for six years, and Ms. Brayman, for five years, were each credited for one year. In essence, when Mr. Williams was dismissed earlier this month, he fell short of the American's five-year vesting period and stands to lose "a substantial" portion of the Company contributions to his carried over 401k, the lawsuit further states. ARGOSY GAMING: Shareholder Launches Suit V. Penn National Merger ---------------------------------------------------------------- Judi Ann Ringhofer of Vernon Hills, an Argosy Gaming Company shareholder, has recently initiated a class action lawsuit against the Company, its chairman and board members, claiming that an announced merger with Penn National Gaming Co. does not adequately compensate shareholders given the Company's "stellar third quarter 2004 financial results," the Madison County Record reports. Filed in Madison County Circuit Court, the suit alleges that the defendants, which include chairman William F. Cellini, Richard J. Glasier, George L. Bristol, Jimmy F. Gallagher, James B. Perry, F. Lance Callis, John B. Pratt, Sr., Edward F. Brennan and Michael W. Scott, breached their fiduciary duty by not representing the full value of Argosy. According to a recent financial report, Argosy's earnings had risen substantially over the previous year. Earnings per share were 71 cents, up from 56 cents last year. Argosy's net income also rose from $38.1 million during last year's third quarter report to $43.7 million in the same reporting period this year. The suit further alleges, "Argosy shareholders will, if the transaction is consummated, be deprived of the opportunity for substantial gains which the Company may realize." The suit also alleges that while the merger will be extremely beneficial for the shareholders of Penn, plaintiff and class members will be unable to reap the benefits of the merger since the companies are not merging, but rather Argosy is being sold for cash. A recent report in the St. Louis Business Journal stated that Mr. Callis, one of the defendants, who holds 870,553 shares of Argosy stock along with a Granite City lawyer, stands to collect nearly $41 million if he sells his 3 percent ownership of the Company. Ms. Ringhofer alleges the defendants did not seek and solicit the best possible offer available for Argosy's shares and that at no time prior to the announcement of the merger did Argosy indicate that it was considering a sale or similar business combination. She also alleges that the merger is directly contrary to the business strategy announced to Argosy shareholders. Furthermore, Ms. Ringhofer claims that the defendants have thus far failed to announce any active auction or open bidding procedures best calculated to maximize shareholder value and have, instead, agreed to the merger which will only serve to inhibit the maximization of shareholder value. BRISTOL-MYERS: Reaches $70M Serzone Lawsuit Settlement in WV ------------------------------------------------------------ Bristol-Myers Squibb, in the matter, In re: Serzone Products Liability Litigation has agreed to pay $70 million to end a nationwide class-action lawsuit over its antidepressant Serzone, according to Court documents filed in Charleston by both the Company and the plaintiff's lawyers, the Charleston Gazette reports. More than 2,000 people have filed lawsuits in state and federal Court alleging that Bristol-Myers Squibb did not warn them adequately that the drug, which has been taken by more than 8 million people since its introduction to the market in 1995, could cause liver failure. Individuals actually started suing Bristol-Meyers Squibb over Serzone after the Company reported in 2001 that more than 100 users had serious liver problems. In 2002, the U.S. Food and Drug Administration forced Bristol-Myers Squibb to put a "black- box warning" on the drug's packaging that said studies found Serzone users were three to four times more likely to have liver failure than the general population. As the public learned about the drug's potential side effects, the drug's sales dropped from $334 million in 2001 to $98 million in 2003. The Company stopped selling Serzone earlier this year. According to Court documents, all of the estimated million of people who took the drug would be eligible for a cut of the $70 million settlement, however most of the money would go to compensate the families of people who died after taking the drug and people who had serious liver problems after taking the drug. Upon being granted preliminary approval by U.S. District Judge Joseph R. Goodwin, a spokesman for the Company reiterated that they opted to settle so as to "avoid protracted litigation." The Company also continued to deny any wrongdoing, and maintains that Serzone was a safe drug. Final approval for the settlement though will be expected next year, according to the attorneys. The action is titled, In re: Serzone Products Liability Litigation and is pending in the United States District Court for Southern District of West Virginia - Charleston (CASE #: 2:02-md-01477). Carl N. Frankovitch and Marvin W. Masters are Co-Lead and Co-Liaison counsel for plaintiffs while Michael A. Tanenbaum and Michael B. Victorson are Lead Counsel and Liaison Counsel for the Defendants respectively. Mr. Tanenbaum though was later replaced by David A. Covey of Sedgwick, Detert, Moran & Arnold, New York, New York. Smith, Cochran & Hicks, PLLC, has been appointed as the claims administrator in this action. The following actions pending in districts other than the Southern District of Western Virginia (EDLA Civil Action 2:02- 910/SDWV Civil Action 2:02-1030, Cheramie, etal., v. Bristol- Myers Squibb Co.; MDLA Civil Action 3:02-322/SDWV Civil Action 2:02-1031, Duplessie, et al., v. Bristol-Myers Squibb Co.; WDLA Civil Action 1:02-638/SDWV Civil Action 2:02-1032, Collins v. Bristol-Myers Squibb Co.; WDLA Civil Action 2:02-637/SDWV Civil Action 2:02-1033, Viator, et al., v. Bristol-Myers Squibb Co.; WDLA Civil Action 6:02-680/SDWV Civil Action 2:02-1034, Owens, et al. v. Bristol-Myers Squibb Co.; and NDMS Civil Action 4:02- 86/SDWV Civil Action 2:02-1035, Hayden, et al. v. Bristol-Myers Squibb Co.) were transferred on August 12, 2002 to Western Virginia, thus creating MDL 1477. CANADA: CIC Offers "Settlement" To Immigrants Affected By IRPA -------------------------------------------------------------- The Citizenship and Immigration Canada (CIC) has now offered a "settlement" in response to a class action suit filed on behalf of immigrants who had applied in 2001 or earlier, but were left out in the cold when the in June 2002, the Immigration and Refugee Protection Act (IRPA) was promulgated, the Times of India reports. The class action lawsuit was filed against the Canadian federal government alleging that the new, stricter rules under IRPA made it unfair for those who had applied before the new criteria were put in place. The CIC has now, "in lieu of release and discharge of all claims against CIC in the suit," offered to expedite the processing of the applications of those who applied before the new rules came into being, and send a selection decision (could be accepted or rejected) within certain time-frames. Under the IRPA greater emphasis was given on employment adaptability and it also included such factors as English (or French) language proficiency, spouse's education and previous work experience in Canada, which actually made it difficult for older applicants to qualify. It eventually led to 149 cases being filed against the CIC by different lawyers, which were later consolidated into one class action suit for the purpose of a negotiated settlement agreement. According to the CIC, those who submitted their applications in 1999 or earlier will receive a selection decision by February 1, 2006, those who submitted in 2000, by February 1, 2007, and those who submitted in 2001, by August 1, 2008. Under the terms of the settlement though, no damages will be paid to the applicants who are part of the suit. An applicant could still challenge the refusal to issue him/her a visa under the settlement, provided his/her legal grounds are unrelated to those raised in the class action suit. Before this settlement was offered though, the CIC had already adjusted the rules for the affected applicants in December 2003, and agreed to assess the applications under whatever selection criteria would favor their application best. CAREMARK INC.: Asks TN Court To Dismiss ERISA Violations Lawsuit ---------------------------------------------------------------- Caremark, Inc. and Caremark Rx, Inc. asked the United States District Court for the Middle District of Tennessee to dismiss the private class action filed against them by Robert Moeckel, on behalf of the John Morrell Employee Benefits Plan. The suit alleges that the defendants act as a fiduciary as that term is defined in the Employee Retirement Income Security Act (ERISA) and that Caremark Rx and Caremark have breached certain purported fiduciary duties under ERISA. The suit seeks unspecified monetary damages and injunctive relief. The Company and Caremark Rx have filed motions seeking the complete dismissal of this action on various grounds. The motions are currently pending before the Court. CAREMARK RX: Asks AL Court To Dismiss ERISA Violations Suits ------------------------------------------------------------ Caremark Rx, Inc. asked the United States District Court for the Northern District of Alabama to dismiss the class actions filed against it and Caremark, Inc., alleging violations of the Employee Retirement Income Security Act (ERISA). In April 2002, Roland Bickley filed the suit, on behalf of the Georgia Pacific Corporation Life, Health and Accident Plan, in the United States District Court, Central District of California. The suit alleges that the Company and Caremark, Inc. each act as a fiduciary as that term is defined in ERISA and that the defendants have breached certain purported fiduciary duties under ERISA. On August 29, 2002, this case was ordered transferred to the United States District Court, Northern District of Alabama. The Company was subsequently served on May 29, 2002 with a virtually identical lawsuit, containing the same types of allegations, which was filed by Mary Dolan, on behalf of Wells Fargo Health Plan, and also filed in the United States District Court, Central District of California. On December 12, 2002, this case was also ordered transferred to the United States District Court, Northern District of Alabama. Both of these lawsuits have been amended to name Caremark as a defendant, and Caremark Rx has been dismissed from the second case filed. These lawsuits seek unspecified monetary damages and injunctive relief. Caremark Rx and Caremark, as applicable, have filed motions seeking the complete dismissal of both of these actions on various grounds. The motions are currently pending before the Court. CAREMARK RX: Shareholder Fraud Lawsuit Proceeds in AL Court ----------------------------------------------------------- Parties filed pleadings on how the class action filed against Caremark Rx, Inc. in the Circuit Court of Jefferson County, Alabama should proceed, after the Court refused to dismiss the suit. John Lauriello filed the suit in October 2003, behalf of a purported class of persons who were participants in the 1999 settlement of then pending securities class action and derivative lawsuits against Caremark Rx and others. Also named as defendants are several insurance companies that had provided coverage to Caremark Rx up to the time of the settlement. The lawsuit seeks, among other things, to recover approximately $3.2 billion in compensatory damages plus unspecified punitive damages, pre-judgment interest, costs and attorneys' fees from the defendants for their alleged intentional, reckless and/or negligent misrepresentation and suppression of material facts relating to the amount of insurance coverage that was available to pay any settlement or judgment arising out of the claims that were resolved by the 1999 settlement. Alternatively, the lawsuit seeks to re-open the judgment approving the 1999 settlement. After the Court overruled the defendants' joint motion to dismiss in July 2004, the defendants amended their answers, which, among other things, denied all of the material allegations of the complaint. The parties have now filed pleadings setting out their respective positions as to how this case should proceed, and anticipate that the Court's ruling on those motions will generally address the scope, timing, and need for discovery on both the class issues presented and the substantive claims asserted. In November 2003, a second class action lawsuit was filed by Frank McArthur in the Circuit Court of Jefferson County, Alabama arising out of the same 1999 settlement of then pending securities class action and derivative lawsuits against Caremark Rx and others. This lawsuit also was filed on behalf of a purported class of persons who were participants in the 1999 settlement, and named as defendants Caremark Rx, several insurance companies that had provided coverage to Caremark Rx up to the time of the settlement, and a number of lawyers and law firms involved in negotiating and securing the approval of the 1999 settlement. The lawsuit seeks, among other things, to recover approximately $3.2 billion in compensatory damages plus unspecified punitive damages, pre-judgment interest, costs and attorneys' fees from the defendants for their alleged intentional, reckless and/or negligent misrepresentation and suppression of material facts relating to the amount of insurance coverage that was available to pay any settlement or judgment arising out of the claims that were resolved by the 1999 settlement. On December 18, 2003, John Lauriello, the plaintiff in the lawsuit filed in October 2003 filed a motion to intervene and a motion to dismiss, abate or stay this lawsuit on the grounds that it was a duplicative, later-filed, class action complaint. On January 15, 2004, Caremark Rx and the other defendants filed their own motion to abate, dismiss or stay the lawsuit as a later-filed class action that is substantially similar to the previous class action lawsuit filed by Mr. Lauriello. The defendants' motion to stay was granted by the Court, and the lawsuit was transferred to an Administrative Docket where it will be reviewed every ninety (90) days. CAREMARK RX: IL Court Nixes Antitrust Violations Suit Dismissal --------------------------------------------------------------- The United States District Court for the Northern District of Illinois refused to dismiss the amended class action filed against Caremark Rx, Inc., Caremark Inc. and AdvancePCS (now known as CaremarkPCS). In October 2003, Caremark Rx, Caremark and AdvancePCS were served with a purported class action complaint filed in the United States District Court for the Northern District of Alabama by North Jackson Pharmacy, Inc. and C& C, Inc. d/b/a Big C Discount Drugs, Inc., two independent pharmacies. The initial complaint alleged purported violations of Section 1 of the Sherman Act in three counts. In December 2003, Caremark Rx, Caremark and AdvancePCS filed motions to dismiss the complaint for failure to state any claim upon which relief can be granted. In February 2004, the plaintiffs amended and restated their class action complaint, dropping two counts under Section 1 of the Sherman Act and adding a count under Section 2 of the Sherman Act. The defendants moved to dismiss the amended class action complaint. Following a Court hearing, the plaintiffs were granted leave to file a second amended class action complaint to restate their purported antitrust claims against the defendants. The Court granted a motion filed by Caremark Rx and Caremark to transfer venue to the United States District Court for the Northern District of Illinois pursuant to the terms of the pharmacy services agreements between Caremark and the plaintiffs. The Court also granted a motion filed by AdvancePCS to compel arbitration of any claims between it and the plaintiffs pursuant to the pharmacy services agreements it has with the plaintiffs. The plaintiffs are seeking three times actual money damages and injunctive relief enjoining the alleged antitrust violations. CLARUS CORPORATION: Reaches Settlement for GA Securities Lawsuit ---------------------------------------------------------------- Clarus Corporation reached a settlement for the consolidated securities class actions filed against it and certain of its officers and directors in the United States District Court for the Northern District of Georgia. Following its public announcement on October 25, 2000, of its financial results for the third quarter of 2000, the Company and certain of its directors and officers were named as defendants in fourteen putative class action lawsuits. The fourteen class action lawsuits were consolidated into one case, Case No. 1:00- CV-2841, pursuant to an order of the Court dated November 17, 2000. A consolidated amended complaint was then filed on May 14, 2001 on behalf of all purchasers of common stock of the Company during the period beginning December 8, 1999 and ending on October 25, 2000. Generally the amended complaint alleges claims against the Company and the other defendants for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. Generally, it is alleged the defendants made material misrepresentations and omissions in public filings made with the Securities and Exchange Commission and in certain press releases and other public statements. The amended complaint alleges that the market price of the Company's common stock was artificially inflated during the class periods. The plaintiffs sought unspecified compensatory damages and costs (including attorneys' and expert fees), expenses and other unspecified relief on behalf of the classes. In July 2004, the Company entered into a memorandum of understanding with the plaintiffs' counsel, on behalf of the consolidated class. Pursuant to the memorandum, and a subsequent definitive agreement, the Company agreed in principle to settle the consolidated class action in exchange for a payment of $4.5 million which is expected to be covered by insurance. The final settlement of the consolidated class action is subject to certain action including approval by the Court. The suit is styled In Re: Clarus Corp SEC Lit., et al v. , et al, 1:00-cv-02841-CAP, filed in the United States for the Northern District of Georgia under Judge Charles A. Pannell. Lawyers for the plaintiffs are: (1) Robert R. Adler and Maya Saxena, Milberg Weiss Bershad & Schulman, 5355 Town Center Road, Suite 900, Boca Raton, FL 33486, Phone: 561-361-5000, E-mail: radler@milbergweiss.com or msaxena@milbergweiss.com (2) David Andrew Bain, Martin D. Chitwood and Krissi T. Gore of Chitwood & Harley, 1230 Peachtree Street, N.E., 2300 Promenade II, Atlanta, GA 30309, Phone: 404-873- 3900, E-mail: dab@classlaw.com, mdc@classlaw.com, ktg@classlaw.com (3) Gregory M. Nespole and David Wales, Wolf Haldenstein Adler Freeman & Herz, 270 Madison Avenue, New York, NY 10016, Phone: 212-545-4600 (4) Samuel H. Rudman and Steven G. Schulman, Milberg Weiss Bershad & Schulman, One Pennsylvania Plaza, 48th Floor, New York, NY 10119-0165, Phone: 212-594-5300 (5) Sherrie R. Savett and Arthur Stock, Berger & Montague, 1622 Locust Street, Philadelphia, PA 19103-6365, Phone: 215-875-3000 (6) Kenneth J. Vianale, Vianale & Vianale, 5355 Town Center Road, Suite 801, Boca Raton, FL 33486, Phone: 561-391- 4900, E-mail: kvianale@vianalelaw.com Lawyers for the defendants are: (i) Robert R. Adler, Milberg Weiss Bershad & Schulman, 5355 Town Center Road, Suite 900, Boca Raton, FL 33486, Phone: 561-361-5000, E-mail: radler@milbergweiss.com (ii) Irene E. Baker, Susan Elaine Hurd, Caroline B. Keller, W. Shawn Murnahan, Oscar N. Persons, Alston & Bird, 1201 West Peachtree Street, One Atlantic Center, Atlanta, GA 30309-3424, Phone: 404-881-7000, E-mail: ibaker@alston.com, shurd@alston.com DANKA INDUSTRIES: Asks TN Court For Summary Judgment in Lawsuit --------------------------------------------------------------- Danka Industries, Inc. asked the United States District Court for the Middle District of Tennessee to grant summary judgment in its favor in the class action filed against it, styled "Stephen L. Edwards, et al., Plaintiffs vs Danka Industries, Inc., et al." The suit also names as defendant American Business Credit Corporation. The suit alleges claims of breach of contract, fraud/intentional misrepresentation, unjust enrichment, violation of the Florida Deception and Unfair Trade Protection Act and injunctive relief. The claim was filed in the state Court in Tennessee, and the Company has removed the claim to the United States District Court for Middle District of Tennessee for further proceedings. The plaintiffs have filed a motion to certify the class, which the Company has opposed. The Company has filed a motion for summary judgment, which plaintiffs have opposed. The suit is styled "Edwards v. Danka Industries, Inc., et al., Case No. 03-CV-575," filed in the United States District Court for the Middle District of Tennessee, under Judge John T. Nixon. Lawyer for the plaintiffs is Charles P. Yezbak, III, 144 Second Avenue North, Suite 200, Nashville, TN 37201, Phone: (615) 250-2000 Laywers for the defendants are Andrew B. Campbell and Andrew J. Pulliam of Wyatt, Tarrant & Combs, 2525 West End Avenue, Suite 1500, Nashville, TN 37203-1423, Phone: (615) 244-0020 and Thomas B. Hatch, Robert J. Gilbertson, L. China Terrell of Robins, Kaplan, Miller & Ciresi, 2800 LaSalle Plaza, Minneapolis, MN 55402-2015, Phone: (612) 349-8500 DIET SUPPLEMENTS: FTC Charges Firms For False Weight Loss Claims ---------------------------------------------------------------- The Federal Trade Commission has charged three related dietary supplement companies located in Norcross, Georgia, their corporate officers, and a physician with deceiving consumers through deceptive advertising for their weight-loss and erectile dysfunction products. The case is part of the agency's on-going effort to combat deceptive claims for dietary supplements that purport to enable obese or overweight consumers to lose substantial amounts of weight safely. The FTC filed charges against National Urological Group, Inc.; National Institute for Clinical Weight Loss, Inc.; Hi-Tech Pharmaceuticals, Inc.; Jared Wheat; Thomasz Holda; Stephen Smith; Michael Howell; and Dr. Terrill Mark Wright. The Commission's complaint alleges that the defendants made deceptive claims about the effectiveness and safety of "Thermalean" and "Lipodrene," purported weight-loss products with ephedra, and "Spontane-ES," a purported erectile dysfunction product with yohimbine. According to the FTC's complaint, the defendants' direct mail and Internet advertisements contained false and unsubstantiated efficacy and safety claims for the weight-loss products Thermalean and Lipodrene. The central theme of the Thermalean advertising campaign was that the product was an effective treatment for obesity, and that it combined the weight-loss benefits of three different prescription drugs. Consumers paid $80 for a two-month supply of Thermalean. The defendants promoted Lipodrene as a dietary supplement that had undergone substantial clinical testing proving that it enabled consumers to lose large amounts of weight safely. Consumers paid about $30 for a one-month supply of Lipodrene. The active ingredient in Thermalean and Lipodrene was ephedra. The FTC has alleged that, contrary to the defendants' claims, dietary supplements with ephedra do not cause substantial, long- term weight loss, and create safety risks because they increase blood pressure and stress the circulatory system. In April 2004, the U.S. Food and Drug Administration (FDA) banned sales of dietary supplements with ephedra because they pose an unreasonable risk of illness or injury. The defendants have not advertised or sold Thermalean or Lipodrene containing ephedra since the FDA prohibited the sale of dietary supplements containing ephedra. The FTC's complaint also alleges that the defendants represented that Spontane-ES, a dietary supplement with yohimbine, was effective in treating erectile dysfunction in 90 percent of users and Spontane-ES was safe. Consumers paid about $100 for a 60-count bottle of Spontane-ES. The Commission challenged the defendants' specific 90 percent efficacy claims as unsubstantiated. The FTC also alleged that their safety claim for Spontane-ES was unsubstantiated, because yohimbine creates safety risks by significantly raising blood pressure and interacting adversely with certain medications, such as beta- blockers that are used to treat heart disease. The defendants, according to the FTC, made further deceptive claims to reinforce the efficacy and safety claims they were making for their products. The FTC also alleged that ads for Thermalean contained several deceptive claims made by Dr. Wright, who is named in the complaint. In addition, the defendants allegedly made the false claim in ads that Warner Laboratories and the National Institute for Clinical Weight Loss were legitimate research or medical facilities engaged in the scientific or medical research and testing of their products. The FTC complaint seeks injunctive and other equitable relief including, but not limited to, consumer redress, restitution, and disgorgement of ill-gotten gains. For more details, contact the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 or visit the Website: http://www.ftc.gov. Also, contact Brenda Mack, Office of Public Affairs, Phone: 202-326-2182 or contact Tawana Davis, Bureau of Consumer Protection by Phone: 202-326-2755. ECHOSTAR COMMUNICATIONS: Certification Hearing Set Dec. 7,2004 -------------------------------------------------------------- The California State Superior Court for Los Angeles County will hear on December 7,2004 class certification for the lawsuit filed against Echostar Communications Corporation, relating to the use of terms such as "crystal clear digital video," "CD- quality audio," and "on-screen program guide," and with respect to the number of channels available in various programming packages. David Pritikin and Consumer Advocates, a nonprofit unincorporated association, filed the suit in 1999, alleging breach of express warranty and violation of the California Consumer Legal Remedies Act, Civil Code Sections 1750, et seq., and the California Business & Professions Code Sections 17500, 17200. A hearing on the plaintiffs' motion for class certification and the Company's motion for summary judgment was held during 2002. At the hearing, the Court issued a preliminary ruling denying the plaintiffs' motion for class certification. However, before issuing a final ruling on class certification, the Court granted the Company's motion for summary judgment with respect to all of the plaintiffs' claims. Subsequently, the Company filed a motion for attorneys' fees which was denied by the Court. The plaintiffs filed a notice of appeal of the Court's granting of the Company's motion for summary judgment and the Company cross-appealed the Court's ruling on its motion for attorneys' fees. During December 2003, the Court of Appeals affirmed in part; and reversed in part, the lower Court's decision granting summary judgment in the Company's favor. Specifically, the Court found there were triable issues of fact whether the Company may have violated the alleged consumer statutes "with representations concerning the number of channels and the program schedule." However, the Court found no triable issue of fact as to whether the representations "crystal clear digital video" or "CD quality" audio constituted a cause of action. Moreover, the Court affirmed that the "reasonable consumer" standard was applicable to each of the alleged consumer statutes. Plaintiff argued the standard should be the "least sophisticated" consumer. The Court also affirmed the dismissal of Plaintiffs' breach of warranty claim. Plaintiff filed a Petition for Review with the California Supreme Court and the Company responded. During March 2004, the California Supreme Court denied Plaintiff's Petition for Review. Therefore, the action has been remanded to the trial Court pursuant to the instructions of the Court of Appeals. ECHOSTAR COMMUNICATIONS: Limited Discovery Proceeds in CO Suits --------------------------------------------------------------- Limited discovery has been conducted in three separate class actions filed against Echostar Communications Corporation on behalf of its satellite hardware retailers. During October 2000, two separate lawsuits were filed in the Arapahoe County District Court in the State of Colorado and the United States District Court for the District of Colorado, respectively, by Air Communication & Satellite, Inc. and John DeJong, et al. on behalf of themselves and a class of persons similarly situated. The plaintiffs are attempting to certify nationwide classes on behalf of certain of the Company's satellite hardware retailers. The plaintiffs are requesting the Courts to declare certain provisions of, and changes to, alleged agreements between us and the retailers invalid and unenforceable, and to award damages for lost incentives and payments, charge backs, and other compensation. The Company has asserted a variety of counterclaims. The United States District Court for the District of Colorado stayed the Federal Court action to allow the parties to pursue a comprehensive adjudication of their dispute in the Arapahoe County State Court. John DeJong, d/b/a Nexwave, and Joseph Kelley, d/b/a Keltronics, subsequently intervened in the Arapahoe County Court action as plaintiffs and proposed class representatives. The Company filed a motion for summary judgment on all counts and against all plaintiffs. The plaintiffs have filed a motion for additional time to conduct discovery to enable them to respond to the Company's motion. The Court granted a limited discovery period until November 15, 2004. ECHOSTAR COMMUNICATIONS: Dismissal of TX Retailers Suit Upheld -------------------------------------------------------------- The United States Fifth Circuit Court of Appeals upheld the dismissal of a class action filed against Echostar Communications Corporation, on behalf of sellers, installers and servicers of satellite equipment who contract with them. Satellite Dealers Supply, Inc. (SDS) filed the lawsuit in the United States District Court for the Eastern District of Texas during September 2000, on behalf of itself and a class of persons similarly situated. The plaintiffs allege that the Company: (1) charged back certain fees paid by members of the class to professional installers in violation of contractual terms; (2) manipulated the accounts of subscribers to deny payments to class members; and (3) misrepresented, to class members, the ownership of certain equipment related to the provision of the Company's satellite television service. During September 2001, the Court granted the Company's motion to dismiss. The plaintiff moved for reconsideration of the Court's order dismissing the case. The Court denied the plaintiff's motion for reconsideration. The trial Court denied the Company's motions for sanctions against SDS. Both parties perfected appeals before the Fifth Circuit Court of Appeals. On appeal, the Fifth Circuit upheld the dismissal for lack of personal jurisdiction. The Fifth Circuit vacated and remanded the District Court's denial of the Company's motion for sanctions. The District Court subsequently issued a written opinion containing the same findings. The only issue remaining is the Company's collection of costs, which were previously granted by the Court. EQUITY RESIDENTIAL: Bench Trial Completed in FL Tenant Fees Suit ---------------------------------------------------------------- Bench trial in the class action filed against Equity Residential in Palm Beach County Circuit Court in Florida was held on August 2004. The suit alleges that several of the types of fees that the Company charged when residents breached their leases were illegal, as were all efforts to collect them. The suit charges that the Company violated Florida law by charging tenants an extra 60 days' rent plus a one-month penalty fee for terminating their leases early. The Illinois-based Company also allegedly charged tenants an extra two months' rent if they stayed through their lease term but failed to give 60 days' notice of their intention to vacate. Plaintiffs in the case include tenants and their co-signers who moved or left their Equity residential Florida apartments from December 1, 1998 to date, who signed an Equity form lease and who received a demand for fees resulting from "insufficient notice," "early termination," "cancellation," "lease fulfillment," "no notice given," or "liquidated damages." Palm Beach County Circuit Court Judge Jorge Labarga made the certification ruling. The suit charges that Equity has collected millions of dollars of illegal fees from tenants of its 33,000 rental units in Florida. Besides charging illegal fees, lawyers said the Company is very aggressive and "hard-nosed" in its collections practices. The suit, filed in Florida by four tenants, claims the Company is violating the Consumer Collection Practices Act and the Florida Deceptive and Unfair Trade Practices Act. IDAHO: Residents Ask Attorney General To Sue Federal Government --------------------------------------------------------------- A group of Idaho residents, who believe Cold War nuclear testing harmed their health, are asking state Attorney General Lawrence Wasden to file a class-action lawsuit against the federal government, the Associated Press reports. Sixteen people asked Mr. Wasden to sue the government for compensation for Idaho residents sickened by radioactive fallout from atmospheric testing in Nevada in the 1950s and 1960s. Four Idaho counties -- Blaine, Gem, Custer and Lemhi -- received some of the highest levels of iodine-131, one of the radioactive elements released by the tests, according to a 1997 National Cancer Institute study. High levels of iodine-131 typically cause cancer by falling on grass, which is eaten by cows and goats, which then produce radioactive milk. Residents in Gem County have even begun sending a form letter to officials, demanding compensation as part of a campaign being led by Tona Henderson, a bakery owner whose extended family has had about 32 cases of cancer. However Mr. Wasden's spokesman, Bob Cooper, says that as a general rule, the attorney general doesn't file class action suits. Earlier this month, Idaho downwinders testified before the National Academy of Sciences' Board on Radiation Effects Research about the health problems they've suffered because of nuclear testing. The board will release a report in March that will recommend whether the federal government should expand the compensation program. Currently, residents with certain kinds of cancers who lived in any of 21 counties in southern Utah, Nevada and Arizona during testing qualify for a $50,000 payment under the Radiation Exposure Compensation Act, but Idaho is not included in the law. The downwinders hope their testimony will persuade Congress to include Idaho. IMPAC FUNDING: IL Court Dismisses Prepayment Penalties Lawsuit -------------------------------------------------------------- The Circuit Court of DuPage County, Illinois dismissed with prejudice the class action filed against Impac Funding Corporation, styled "Sally Sengpiel v. GMAC Mortgage Corporation, Impac Funding Corp. d/b/a Impac Leasing Group, Case No. 04 L 391." The complaint contains allegations of a class action and alleges that the defendants required prepayment penalties on notes, which exceed an annual percentage rate of 8% per annum in violation of Illinois law. The plaintiff is seeking actual and statutory damages and injunctive relief. JAYCO INC.: Recalls 317 Trailers Due To Service Brake Defects ------------------------------------------------------------- Jayco, Inc. in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation is voluntarily recalling about 317 Year 2004 & 2005 Jay Feather trailers due to defective service breaks. According to the ODI, on certain travel trailers, the potential for the brake wires to be improperly secured along the trailer frame. This could lead to the brake wires coming in contact with the axle mounting plate and chafing through the protective insulation. This condition may result in loss of braking, which could lead to a crash or personal injury. As a remedy dealers will replace and re-route the axle brake wire to clear the axle mounting plate. The recall is expected to begin this December 2004. For more details, contact NHTSA Auto Safety Hotline: 1-888-327-4236 or Jayco, Inc.: 574-825-0608. JAYCO INC.: Recalls 370 Trailers Due To Incorrect Tire Labels ------------------------------------------------------------- Jayco, Inc. in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation is voluntarily recalling about 370 Year 2004 & 2005 Jay Feather trailers due to incorrect tire inflation labels. According to the ODI, on certain travel trailers, the federal identification label has the incorrect tire inflation listed. Failure to follow the proper vehicle loading specifications or tire inflation recommendation can result in tire failure, increasing the risk of a crash. As a remedy dealers will remove the incorrect federal identification label. The recall is expected to begin this December 2004. For more details, contact NHTSA Auto Safety Hotline: 1-888-327-4236 or Jayco, Inc.: 574-825-0608. MICHIGAN: Macomb County Judge Certifies Suit V. City Of Warren -------------------------------------------------------------- In Macomb County Circuit Court, Judge James M. Biernat recently issued a ruling allowing thousands of Warren residents, whose property has been damaged by city-planted trees, to maintain a class action against the city. The suit is based on the millions of dollars in property damage that the city has caused to its residents by planting trees in front of residents' homes, the roots of which have destroyed sewer pipes, causing sewage to back up into people's homes, ruined driveways and sidewalks, and wreaked havoc on homes, lawns, and gardens. The suit contends that the City of Warren not only planted the destructive trees and mandated their continued existence in front of the residents' homes, but that the city has also turned a blind eye to the problems and damages caused by the trees. The city has continually admitted that it caused the problem. The suit states the city should, therefore, pay for the problem. The homeowners' attorney, Gerard Mantese, said of the ruling that "the purpose of this suit has always been to provide all of the homeowners with fair compensation and to get the city to rectify this problem once and for all, and the Judge's ruling today will allow this to happen." The case was initially filed in May 2000. Shortly after the inception of the suit, Judge Biernat ruled that the case would not proceed as a class action. The class action issue was then litigated in the Michigan Court of Appeals and the Michigan Supreme Court for the next 3 years, with two different panels of the Court of Appeals reversing Judge Biernat, and then with the Supreme Court affirming Judge Biernat's denial of class action status and sending the case back to him for further proceedings in November 2003. The homeowners' attorneys then filed a motion asking Judge Biernat to reconsider his earlier denial, which he did in an opinion issued this morning. The ruling means that the case will now proceed on behalf of thousands of homeowners, rather than just the few dozen people who initially brought the suit. Judge Biernat stated in his opinion that "after much careful consideration of the record and pleadings filed since the Court's initial decision denying class certification, the Court is persuaded to reconsider its denial." The Judge added, "whether to certify a class in this case has always been a close decision." Mr. Mantese said, "Judge Biernat's opinion was thoughtfully written, he made the right decision, and the homeowners of the City of Warren will finally be able to have their day in Court." MICHIGAN SUGAR: Settles With Residents Bothered By Plant Odors -------------------------------------------------------------- A judge recently approved a settlement of a class-action lawsuit filed against Michigan Sugar Company, wherein it promised to reduce or eliminate dust and odors that plaintiffs say came from the former Monitor Sugar plant, which was bought by Michigan Sugar, the DetNews.com reports. The Company also agreed to pay out $1.75 million to up to 3,800 families living near the plant. The settlement grants $3,500 to each of seven named plaintiffs in the case and $1,500 to everyone who's made a complaint to environmental officials about the pollution or showed written interest in joining the lawsuit, even if they live outside the designated boundaries. Bay County Circuit Judge Lawrence M. Bielawski granted class action status and approved the settlement, The Bay City Times reported. The details of the agreement were worked out while Monitor Sugar's parent Company, Illovo Sugar Ltd. of South Africa, was negotiating to sell the Company to its growers, said Dick Leach, director of community and government affairs for Michigan Sugar. NEKTAR THERAPEUTICS: Shareholders Launch Stock Fraud Suit in CA --------------------------------------------------------------- Nektar Therapeutics faces a securities class action filed in the United States District Court for the Northern District of California, styled "Rhodes v. Nektar Therapeutics et al., Case No. C 04 3735." The suit also names as defendants the Company's Chairman, Chief Executive Officer, and the Company's President, Nektar AL. The complaint alleges the defendants made certain material misrepresentations to the market in violation of the federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5. The named plaintiff seeks unspecified damages on behalf of a purported class of purchasers of the Company's common stock during the period from March 4, 2004 through August 4, 2004. No class has been certified in the suit and no trial date has been scheduled. The suit is styled Rhodes, et al. v. Nektar Therapeutics, et al., Case No. 04-CV-03735, pending in the United States District Court for the Northern District of California. The plaintiff firms in this litigation are: (1) Charles J. Piven, World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202, Phone: 410.332.0030, E-mail: pivenlaw@erols.com (2) Green & Jigarjian LLP, 235 Pine Street, 15th Floor, San Francisco, CA, 94104, Phone: 415.477.6700, Fax: 415.477.6710 (3) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, e-mail: sn06106@AOL.com (4) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com NEW JERSEY: Drug Makers Face Suit On Amiodarone "Over-Promotion" ---------------------------------------------------------------- Just recently a class action lawsuit was filed in New Jersey that accuses drug makers of promoting amiodarone for common heart ailments in an effort to boost profits, the Knight Ridder Newspapers reports. The suit, which was filed by David Harris, a Naples, Florida attorney who filed it in Atlantic County Superior Court in New Jersey, contends that more than 1,000 people died, 100 had vision problems and thousands of others suffered severe medical complications. Mr. Harris states, "It's our belief there has been one long over-promotion of this drug." Patients taking amiodarone have died from lung and liver damage, gone blind or suffered from other side effects. Yet it's routinely prescribed for common heart rhythm problems despite the availability of safer alternatives. The FDA has approved amiodarone only for more severe disorders, called ventricular arrhythmias, and then only as a treatment of last resort. Wyeth, which sells the drug under the brand name Cordarone, was the first Company to sell the drug. Amiodarone is also currently sold by several generic manufacturers, as well as under another brand name, Pacerone. According to recent data, doctors wrote more than 2 million prescriptions in a single year for atrial fibrillation and other heart conditions that amiodarone wasn't approved to treat. A Knight Ridder investigation last year found that those prescriptions represented 82 percent of all the amiodarone dispensed from retail pharmacies during the 12-month period ending July 31, 2003. In the lawsuit, which named Wyeth and several other makers of amiodarone as defendants, patients and their families accused the drug makers of a nearly 20-year scheme to push doctors to prescribe the drug for unapproved uses while concealing and downplaying its risks. According to Karen Muccino, one of five plaintiffs in the suit, her father, Dr. John Muccino, 69, had suffered from chronic atrial fibrillation since he was in his 40s and that when his heart was out of rhythm it made him tired. Ms. Muccino further states that he was put on various medications over the years with varying degrees of success and then in October 2002, doctors put him on amiodarone. About a year later he developed a dry cough. The cough worsened and by New Year's Day 2004 he was very ill with what he thought was a bad cold. Within days he was hospitalized with what seemed to be pneumonia. A lung biopsy, however, found it was amiodarone lung damage, Karen Muccino said. Her father died after being taken off a respirator on February 20. To read Knight Ridder's investigation of the off-label use of drugs, including amiodarone, go to http://www.realcities.com/mld/krwashington/news/special_packages /riskyrx/. NEW MEXICO: Albuquerque Nearer to Pact in 10-Year McClendon Suit ---------------------------------------------------------------- A protracted legal battle over jail conditions that has hounded city and county officials for nearly 10 years and cost taxpayers millions might finally be heading toward a resolution, according to Nick Bakas, chief public safety officer for Mayor Martin Chavez. However, the process will take months and the outcome is not guaranteed, the Albuquerque reports. Mr. Bakas stated that the city and county have agreed to a settlement that could bring an end to federal oversight of the Metropolitan Detention Center within the next nine months. The lawsuit, known as the McClendon case, dates to 1995, when inmates of the old Downtown City-County Jail alleged cruel treatment because of overcrowding. Filed in federal Court in 1995 as a class action, the suit alleged "grossly and inhumanely overcrowded" conditions at the old Downtown jail. Mayor Martin Chavez, who was serving his first term at the time and other city and county officials, were named as defendants. According to Mr. Bakas and Bernalillo County Attorney Tito Chavez, lawyers representing inmates and the city and county have agreed to allow independent auditors to inspect the jail over a period of six to nine months to determine whether it meets minimum constitutional requirements and the minimum standards set by the American Correctional Association. Brian Pori, one of the original lawyers who represented inmates in the McClendon case, said attorneys representing all parties in the case would have to agree on three auditors. If they can't agree, they will submit names to U.S. District Judge Martha Vazquez. The auditors will be hired as independent contractors by the city and the county and the dollar amount of the contracts will be determined through negotiations with the auditors, Mr. Bakas said. They will inspect for compliance to standards for the general population and psychiatric and medical-classified inmates, they will then report back to all parties involved in the lawsuit with their findings and once all standards are met, the lawsuit will be dismissed, according to both Mr. Bakas and Mr. Pori. As part of an original agreement in 1996, the city and county agreed to pay attorney fees for the inmates. Mr. Bakas estimates both governments have spent about $2.5 million on those fees. The case also prompted the county to earmark $86 million to build a new jail. NEW YORK: Comptroller's Office Receives 300 Claims Over Arrests --------------------------------------------------------------- As the deadline to sue the city of New York rapidly approaches, the comptroller's office has received 300 notices of claim from protesters and bystanders who claim they were falsely arrested during the Republican National Convention in August, according to Jeff Simmons, the press secretary for Comptroller William Thompson, the New York Newsday reports. Mr. Simmons states that the National Lawyer's Guild-New York City Chapter submitted the individual claims against the city on Wednesday afternoon in connection with convention-related arrests. He further states that by law, claimants have 90 days from an incident in which to file a claim, and another year from that to file a lawsuit. Previously, 48 such claims had been filed with the comptroller's office during the last three months and with the influx of claims it will take several days to process them all, he adds. The high number of claims filed against the city came as a surprise and marked the latest development surrounding arrests made during the four-day convention held at Madison Square Garden. Earlier this week, lawyers filed a lawsuit in U.S. District Court seeking class-action status for the nearly 2,000 people alleging their constitutional rights were violated when they were arrested or detained by police. It also seeks unspecified amounts for physical and mental anguish. NORTH CAROLINA: NC Court Bars Furniture Dealer Because of Fraud --------------------------------------------------------------- A North Carolina furniture dealer who took money for furniture he never delivered has been ordered to leave the furniture business in North Carolina and pay nearly $800,000 to the state, Attorney General Roy Cooper announced in a statement. "North Carolina's furniture industry has a proud history, and I will not stand by while companies use that reputation to take advantage of consumers," said AG Cooper. "This case involves a sad set of circumstances, but I hope it will serve as a warning to consumers and also to dealers who might be thinking about treating customers unfairly." At AG Cooper's request, Wake County Superior Court Judge Henry W. Hight Jr. signed an order that permanently bars Henry R. Privette from working in the furniture industry in North Carolina. The order against Mr. Privette, who ran Carolina Furniture and Miller Burns International, was entered by the Court yesterday. The judge also ordered that Mr. Privette, who has declared bankruptcy, pay a total of $778,723 to the state to provide refunds to Mr. Privette's customers. It was unclear Wednesday whether Mr. Privette has assets to cover the judge's ordered payment. The ruling resolves a lawsuit first filed by AG Cooper against Mr. Privette in 2003. The Attorney General's Office took Privette to Court to make him deliver the furniture he had sold or pay refunds to consumers after getting a temporary ruling barring Privette from taking additional orders until existing customers had received their furniture. AG Cooper's office received hundreds of complaints about Mr. Privette from consumers across the country. According to customers whose furniture orders did not arrive when promised, Mr. Privette failed to let them know that their items would be delayed. He also refused to give them the option of canceling for a full refund in violation of federal rules. In some cases, Carolina Furniture told consumers that their furniture was ready for delivery and accepted their full payment but still failed to deliver the furniture or pay refunds. Carolina Furniture continued to collect advance payments for furniture orders it never fulfilled despite warnings from the Attorney General's office that the practice was illegal. A typical complaint is that of a woman in New York state who paid half the cost for her furniture upfront. Months later, Privette called her to say that the furniture was ready but that she had to pay the $1,579 balance. The customer paid the amount and scheduled a delivery date. When the furniture did not arrive as scheduled, she called Privette and was told that her furniture would arrive by 8 PM. The furniture never arrived, and the woman never received a refund. Mr. Privette's business was an online operation that used a High Point address but was actually located in Calabash. In July of 2003, Privette's companies filed for bankruptcy. Federal bankruptcy Court found that he had hidden, falsified and mutilated business records in an attempt to hide his fraudulent activities. "Both the furniture industry and furniture shoppers can learn some lessons from this case," said Cooper. "We want customers to have a good experience when they buy North Carolina products, and we won't tolerate companies that cheat consumers operating in our state." For more details, contact Noelle Talley, Public Information Officer, N.C. Department of Justice by Phone: (919) 716-6484 or (919) 716-6413 by Fax: (919) 716-0803 or by E-mail: ntalley@ncdoj.com. PEOPLESOFT INC.: DE Judge Rejects Shareholder's Suit Settlement --------------------------------------------------------------- The Delaware Chancery Court judge, who is overseeing the legal squabbling between PeopleSoft, Inc. (Nasdaq:PSFT) and hostile suitor Oracle recently rejected a settlement that PeopleSoft had arranged with a group of dissident shareholders, the IDG News Service reports. PeopleSoft negotiated the deal in May to resolve claims bought by a number of shareholders unhappy with the methods the Company used to fend off Oracle's unsolicited takeover bid. As previously reported in the June 1, 2004 edition of the Class Action Reporter, PeopleSoft, Inc. under the settlement's terms, agreed to change some provisions in its controversial customer guarantees known as the Customer Assurance Program and to leave decisions about Oracle's bid in the hands of the board's independent directors. The Company and the plaintiffs submitted their settlement agreement to the Court in July, and were awaiting approval. However, spurred by Oracle's decision to raise its bid from $21 to $24 cash per share, PeopleSoft shareholders just recently filed a fresh lawsuit. That lawsuit concerned only PeopleSoft's actions after June 17, the day on which the shareholders signed the settlement agreement. The case's presiding judge, Leo Strine of Delaware's Chancery Court, decided to eliminate the confusion of one settled suit and one current one by rejecting the settlement. According to the lead counsel for the shareholders, Bruce Jameson, of Prickett, Jones & Elliott PA, "The judge said, in light of the way events have evolved, that he didn't view the benefits under the settlement as sufficient to justify releasing claims that rose prior to June 17." Mr. Jameson adds, that Judge Strine has also scheduled further hearings on Oracle's case against PeopleSoft for December 13 and 14, virtually assuring that the case will continue into next year. Oracle has asked the Delaware Court to invalidate several anti-takeover provisions PeopleSoft is using to prevent Oracle from acquiring the Company. REPUBLIC BANCORP: Seeks Judgment, Arbitration, Relief in NC Suit ---------------------------------------------------------------- Republic Bancorp, Inc. filed a petition for Declaratory Judgment, Order Directing Arbitration, and Injunctive Relief for the class action filed against it in North Carolina State Court, by certain of its Deferred Deposit customers. The suit seeks to enjoin one of the Company's Marketer/Servicers from continuing to market and service deferred deposit transactions in the state of North Carolina. Other Marketer/Servicers, with whom the Company has no contractual agreement with, were also named as Defendants in separate lawsuits. The state Court suit alleges that the Company's Marketer/Servicer is not authorized to engage in payday lending operations, that it is operating in violation of several consumer protection statutes and other state law violations. The Plaintiffs seek a Declaratory Judgment that the Company's Marketer/Servicer is unlawfully operating in North Carolina, and the Plaintiffs are seeking an injunction barring further alleged violations and an unspecified award of money damages. The Complaint specifies that the Plaintiffs do not assert claims against any bank. In this regard, the Company filed a Petition for Declaratory Judgment, Order Directing Arbitration, and Injunctive Relief on September 24, 2004 in the United States District Court, Eastern District of North Carolina, Southern Division. The petition seeks to require the Plaintiffs in the North Carolina State Court action to submit to arbitration and, also seeks an injunction enjoining the Plaintiffs from seeking to adjudicate any dispute in any non-arbitral forum, except a small claims tribunal with jurisdiction. SPECTRALINK CORPORATION: CO Court Approves Stock Suit Settlement ---------------------------------------------------------------- The United States District Court in Colorado granted final approval to the settlement of the consolidated securities class action filed against SprectraLink Corporation and certain of its officers and directors. On January 14, 2002, the Company issued a press release announcing preliminary financial results for the fourth quarter of 2001 and revising downward its estimates for year 2002 results of operations. Shortly after the press release, the Company's stock price declined and the Company and certain of its officers and directors were named as defendants in four lawsuits filed between February 7, 2002 and March 6, 2002, three of which were filed in the United States District Court for the District of Colorado and one of which was filed in the Colorado District Court for the City and County of Denver. In each of the lawsuits, plaintiffs, who purport to be purchasers or holders of SpectraLink common stock, initially sought to assert claims either on behalf of a class of persons who purchased securities in SpectraLink between July 19, 2001 and January 11, 2002, or in the case of two of the lawsuits (one filed in the United States District Court and one in the Colorado District Court), derivatively on behalf of the Company. Two of the lawsuits filed in the United States District contained essentially identical claims alleging that SpectraLink and certain of its officers and directors violated Sections 10(b) and 20(a) and Rule 10b-5 under the Securities Exchange Act of 1934, as a result of alleged public misstatements and omissions, accompanied by insider stock sales made in the months prior to the decline in the price of SpectraLink's stock after the January 14, 2002 press release. In the cases brought as derivative actions, the plaintiffs allege that the officers and directors of SpectraLink violated fiduciary duties owed to SpectraLink and its stockholders under state laws by allowing and/or facilitating the issuance of these same alleged public misstatements and omissions, misappropriating nonpublic information for their own benefit, making insider stock sales, wasting corporate assets, abusing their positions of control, and mismanaging the corporation. The plaintiffs in these derivative cases allege that SpectraLink has and will continue to suffer injury as a result of these alleged violations of duty for which the officers and directors should be liable. The cases are designated as follows: (1) Wilmer Kerns, Individually And On Behalf of All Others Similarly Situated, Plaintiff, vs. SpectraLink Corporation, Bruce Holland and Nancy K. Hamilton, Defendants (United States District Court Civil Action Number 02-D-0263); (2) Danilo Martin Molieri, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. SpectraLink Corporation, Bruce Holland and Nancy K. Hamilton, Defendants (United States District Court Civil Action Number 02-D-0315); (3) Evie Elennis, derivatively on behalf of SpectraLink Corporation, Plaintiff(s), v. Bruce M. Holland, Anthony V. Carollo, Jr., Gary L. Bliss, Michael P. Cronin, Nancy K. Hamilton and John H. Elms, Defendants), and SpectraLink Corporation, Nominal Defendant (United States District Court Civil Action Number 02-D-0345); and (4) Roger Humphreys, Derivatively on Behalf of Nominal Defendant SpectraLink Corporation, Plaintiff, v. Carl D. Carman, Anthony V. Carollo, Jr., Bruce M. Holland, Burton J. McMurtry, Gary L. Bliss, Michael P. Cronin, John H. Elms, and Nancy K. Hamilton, Defendants (Colorado District Court Case. No. 02CV1687). The Kerns and Molieri purported class actions were consolidated, and the plaintiffs filed a Consolidated Amended Complaint in these Consolidated Actions. In January 2003, the Court denied a motion to dismiss that amended pleading, and discovery commenced. The Court certified a class of all purchasers of publicly traded common stock of SpectraLink from April 19, 2001 through January 11, 2002, inclusive. On November 26, 2003, the Lead Plaintiffs in these Consolidated Actions moved the Court for permission to file a second consolidated amended class action, which would have deleted certain of the original claims, would have extended the class period so that it would commence on February 1, 2001 instead of April 19, 2001, and would have added more detail on claims relating to alleged improper revenue recognition. The Company filed an opposition to that motion. On March 5, 2004, the Magistrate Judge entered his Order denying plaintiffs' motions, and plaintiffs appealed that decision to the district Court. On April 16, 2004, the parties to these Consolidated Actions held a mediation in San Francisco. The parties entered into a Memorandum of Understanding settling the case for $1.5 million, subject to certain terms and conditions, including approval by the Court. The Court granted preliminary approval to the settlement, and a final hearing for approval of the settlement was scheduled for October 7, 2004. An Order and Final Judgment was entered on October 7, 2004, ending the litigation. The two derivative actions were stayed pending resolution of the motion to dismiss in the consolidated class action, and plaintiff's counsel in the Elennis derivative action filed an unopposed motion for relief from the stay and filed an amended complaint and then a corrected amended complaint. Prior to the entry of the stays in each of the derivative cases, the defendants had filed motions to dismiss. In August 2003, Defendants moved to dismiss the amended and corrected Elennis complaint. The Court denied that motion on March 22, 2004. No discovery has been conducted in either of the derivative actions. The defendants in the derivative actions engaged in settlement discussions with the derivative plaintiffs in light of the settlement of the Consolidated Actions and the parties have reached an agreement in principle settling both derivative cases. The settlement is conditioned upon reaching agreement on written settlement documents and on Court approval. SHERWIN WILLIAMS: Lead Paint Litigation Trial Set For April 2005 ---------------------------------------------------------------- Trial in the litigation filed against Sherwin Williams Co. by the State of Rhode Island over its lead pigments and lead-based paints is set for April 2005. The Company's past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is a defendant in a number of legal proceedings, including purported class actions, separate actions brought by the State of Rhode Island, and actions brought by various counties, cities, school districts and other government- related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs are seeking recovery based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practices and consumer protection laws, enterprise liability, market share liability, nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company believes that the litigation is without merit and is vigorously defending such litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief, the Company stated in a disclosure to the Securities and Exchange Commission. During September 2002, a jury trial commenced in the first phase of the action brought by the State of Rhode Island against the Company and the other defendants. The sole issue before the Court in this first phase was whether lead pigment in paint constitutes a public nuisance under Rhode Island law. This first phase did not consider the issues of liability or damages, if any, related to the public nuisance claim. In October 2002, the Court declared a mistrial as the jury, which was split four to two in favor of the defendants, was unable to reach a unanimous decision. This was the first legal proceeding against the Company to go to trial relating to the Company's lead pigment and lead-based paint litigation. The State of Rhode Island has decided to retry the case and a trial has been scheduled for April 2005. The suit, filed by then Attorney General Sheldon Whitehouse (D) in 1999, was the first suit filed by a state against the lead paint industry. According to the state's complaint, the defendants marketed and sold lead-based paint until it was banned in 1978, despite the knowledge that it was toxic. The companies named in the suit include: (1) American Cyanamid Co. (2) Atlantic Richfield (3) ConAgra Grocery Products Co. (4) Cytec Industries Inc. (5) DuPont Co. (6) Millennium Inorganic Chemicals Inc. (7) NL Industries Inc. and (8) Sherwin-Williams Co. The suit, styled "State of Rhode Island v. Lead Industries Association, Inc., et al., Case No. 99-5226," is filed in the Superior Court for the State of Rhode Island, under Judge Michael Silverstein. The suit was filed by RI Attorney General Sheldon Whitehouse, 150 South Main Street, Providence, RI 02903. Counsel for the plaintiffs are Leonard Decof, Decof & Grimm, One Smith Hill, Providence, RI 02903 and John J. McConnell Jr. of Ness, Motley, Loadhold, Richardson & Poole, 321 South Main Street, P.O. Box 6067, Providence, RI 02940. Counsel for the Company are Shelia High King of Cetrulo & Capone, The Heritage Building, 321 South Main Street, Providence, RI 02903; Lawrence G. Cetrulo and Nancy Kelly of Cetrulo & Capone, Exchange Place, 53 State Street, Boston, MA 02109; and Paul Michael Pohl, Charles H. Moellenberg Jr., Laura E. Ellsworth of Jones, Day, Reavis & Pogue, 500 Grant Street, 31st Floor, Pittsburgh, PA 15219. SERVICE CORPORATION: TX Court Approves Stock Lawsuit Settlement --------------------------------------------------------------- The United States District Court for the Southern District of Texas, Houston Division granted approval to the settlement of the class action filed against Service Corporation International, styled "In Re Service Corporation International; Cause No. H-99-0280." The consolidated suit was filed in January 1999 and includes numerous separate lawsuits that were filed in various United States District Courts in Texas. The suit has been certified as a class action and names as defendants the Company and three of the Company's current or former executive officers or directors (the Individual Defendants). The Consolidated Lawsuit has been brought on behalf of all persons and entities who: (1) acquired shares of Company common stock in the merger of a wholly-owned subsidiary of the Company into Equity Corporation International (ECI); (2) purchased shares of Company common stock in the open market during the period from July 17, 1998 through January 26, 1999 (the Class Period); (3) purchased Company call options in the open market during the Class Period; (4) sold Company put options in the open market during the Class Period; (5) held employee stock options in ECI that became options to purchase Company common stock pursuant to the merger; and (6) held Company employee stock options to purchase Company common stock under a stock plan during the Class Period. Excluded from the class definition categories are the Individual Defendants, the members of their immediate families and all other persons who were directors or executive officers of the Company or its affiliated entities at any time during the Class Period. The plaintiffs in the Consolidated Lawsuit alleged that defendants violated federal securities laws by making materially false and misleading statements and failing to disclose material information concerning the Company's pre-need funeral business and other financial matters, including in connection with the ECI merger. The Consolidated Lawsuit sought recovery of an unspecified amount of monetary damages. A Motion to Dismiss the Consolidated Lawsuit filed by the Company and the Individual Defendants was pending before the Court. On April 20, 2004, the Company announced that it had entered into a memorandum of understanding to settle the Consolidated Lawsuit. The terms of the proposed settlement call for the Company to cause to be created a settlement fund in May 2004 totaling $65,000 in settlement of the claims. The Company and its insurance carriers have also entered into an agreement providing for the payment by the Company's insurance carriers of $30,000 towards this settlement, which resulted in direct payments made by the Company of approximately $35,000. At a hearing on November 4, 2004, the Court entered an order approving the settlement. Subject to appeal, all claims under the Consolidated Lawsuit have been dismissed. The Company may also have additional potential liability for those who have opted out of the Consolidated Lawsuit. The most significant opt out claim is the subject of the T. Rowe Price Lawsuit discussed below. Several other related lawsuits have been filed against the Company and the Individual Defendants in Texas State Courts by former SCI and ECI shareholders. These lawsuits include the following matters: (1) Charles Fredrick v. Service Corp. International, Case No. 31820-99-2, In the District Court of Angelina County, Texas, filed February 16, 1999; (2) Thomas G. Conway, John T Conway and Trust U/W/O George M. Conway, Jr. v. Service Corporation International, No. 2004-28511; In the 127th Judicial District Court of Harris County, Texas, filed May 28, 2004 (the Conway Lawsuit) (3) T. Rowe Price Balanced Fund, Inc., et al. v. Service Corporation International, et al, No. 2004-429637; In the 270th Judicial District Court, Harris County, Texas, filed June 7, 2004 (the T. Rowe Price Lawsuit) These lawsuits allege, among other things, violations of Texas securities law and statutory and common-law fraud, and seek compensatory and exemplary damages. The plaintiffs in the Conway Lawsuit have not opted out of the Consolidated Lawsuit, and therefore they are precluded from prosecuting the Conway Lawsuit. For that reason, the Company expects the Conway Lawsuit to be dismissed in the near future. The plaintiffs in the other lawsuits have opted out of the Consolidated Lawsuit. The plaintiffs in the T. Rowe Price Lawsuit consist of investment companies and trust funds who were former ECI and SCI shareholders and who have opted out of the proposed settlement of the Consolidated Lawsuit. They allege that the Company and the Individual Defendants violated the Texas Securities Act by making materially false and misleading statements and failing to disclose material information concerning the Company's business and other financial matters, including in connection with the ECI merger. The T. Rowe Price Lawsuit seeks recovery of at least $32,000 in actual damages plus unspecified exemplary damages. The plaintiffs in the Conway Lawsuit also filed a separate arbitration styled "Thomas G. Conway et al v. Service Corporation International, et al; Cause No. 70 Y 168 00748 02" before the American Arbitration Association (AAA) (Conway action). The Conway action raised claims distinct from those claims alleged in the Conway Lawsuit. The Company has recently settled the Conway action. SERVICE CORPORATION: FL Court OKs Grave Desecration Settlement -------------------------------------------------------------- The Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, General Jurisdiction Division approved the settlement of the consumer class actions and individual suits filed against Service Corporation International, Inc., one of its subsidiaries and several related entities. The class action, styled "Joan Light, Shirley Eisenbert and Carol Prisco v. SCI Funeral Services of Florida, Inc. d/b/a Menorah Gardens & Funeral Chapels, and Service Corporation International; Case No. 01-21376 CA 08," was filed on December 19, 2001. On August 19, 2003, the Court certified a class comprising all persons with burial plots or family members buried at Menorah Gardens & Funeral Chapels in Florida. Excluded from the class definition were persons whose claims had been reduced to judgment or had been settled as of the date of class certification. The defendants appealed the trial Court's order regarding class certification. The plaintiffs alleged that defendants failed to exercise reasonable care in handling remains by secretly: (1) dumping remains in a wooded area; (2) burying remains in locations other than the ones purchased; (3) crushing vaults to make room for other vaults; (4) burying remains on top of the other or head to foot rather than side-by-side; (5) moving remains; and (6) co-mingling remains The plaintiffs in the Consumer Lawsuit alleged that the above conduct constituted negligence, tortious interference with the handling of dead bodies, infliction of emotional distress, and violation of industry specific state statutes, as well as the state's Deceptive and Unfair Trade Practices Act. The plaintiffs sought an unspecified amount of compensatory and punitive damages. The Court granted plaintiffs' motion for leave to amend their complaint to include punitive damages. Plaintiffs also sought equitable/injunctive relief in the form of a permanent injunction requiring defendants to fund a Court supervised program that provides for monitoring and studying of the cemetery and any disturbed remains to insure their proper disposition. Counsel for plaintiffs in the Consumer Lawsuit also represented individuals who filed numerous separate lawsuits setting forth individual claims similar to those in the Consumer Lawsuit. These lawsuits include "Sheldon Cohen, surviving son of Hymen Cohen, deceased v. SCI Funeral Services of Florida, Inc., d/b/a Menorah Gardens & Funeral Chapels and Service Corporation International; Case No. 02014679; In the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida," and "Marian Novins, surviving daughter of Harold Wells deceased v. SCI Funeral Services of Florida, Inc. d/b/a Menorah Gardens &Funeral Chapels, and Service Corporation International; Case No. 0307886; In the Circuit Court of the 17th Judicial Circuit, in and for Broward County, Florida, General Jurisdiction Division." In December 2003, the Company entered into an agreement in principle to settle the Consumer Lawsuit and the individual related lawsuits. A settlement agreement pertaining specifically to the Consumer Lawsuit was filed with the Court on March 2, 2004. On October 28, 2004, the Court entered an order approving the settlement. Subject to appeal, all claims under the Consumer Lawsuit have been dismissed. The terms of the proposed settlement call for the Company to make payments totaling approximately $100,000 in settlement of these claims. On April 21, 2002, additional plaintiffs filed a lawsuit styled "Sol Guralnick, Linda Weinr, Joan Nix, Gilda Schwartz, Paul Schwartz, Ann Ferrante, Steve Schwartz, Nancy Backlund, Jamie Osit, Corey King, Marc King, Barbara Feinberg Clark v. SCI Funeral Services of Florida, Inc. d/b/a Menorah Gardens and Funeral Chapels and Service Corporation International; In the Circuit Court in the 15th Judicial Circuit, Palm Beach County, Florida; Case number CA024815AE" (Guralnick Lawsuit), making essentially the same allegations as the Consumer Lawsuit with the exception that it does not contain class allegations. In addition to the Guralnick Lawsuit, counsel filed a lawsuit containing cemetery mismanagement allegations styled "Diane Wolff, Arlene Benowitz, Michael Wolff, Randee Wolff Blumstein, and Martha Freedberg v. SCI, Funeral Services of Florida, Inc. a Florida corporation d/b/a Menorah Gardens & Funeral Chapels, Service Corporation International, a Texas Corporation, Menorah Partnership, a Florida General Partnership, and Sharon Gardens Limited Partnership, a Florida Limited Partnership; In the Circuit Court in the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Case No. 2003CA013025" (Wolff Lawsuit). In October 2004, the Company reached an agreement for settlement of the Guralnick and Wolff Lawsuits. SERVICE CORPORATION: Shareholders File Consolidated Suit in TX -------------------------------------------------------------- Service Corporation International faces a class action filed in the United States District Court for the Southern District of Texas, Houston Division, styled "Conley Investment Counsel v. Service Corporation International, et al; Civil Action 04-MD- 1609." The lawsuit resulted from the transfer and consolidation by the Judicial Panel on Multidistrict Litigation of several lawsuits, namely: (1) Edgar Neufeld v. Service Corporation International, et al., Cause No. CV-S-03-1561-HDM-PAL, filed in the United States District Court for the District of Nevada; (2) Rujira Srisythemp v. Service Corporation International, et. al., Cause No. CV-S-03-1392-LDG-LRL; In the United States District for the District of Nevada;" (3) Joshua Ackerman v. Service Corporation International, et. al.; Cause No. 04-CV-20114; In the United States District Court for the Southern District of Florida. The consolidated suit names as defendants the Company and three of the Company's current and former executive officers or directors. The suit is a purported class action filed in connection with the circumstances surrounding the consumer lawsuit pending in Florida State Court, styled "Joan Light, Shirley Eisenbert and Carol Prisco v. SCI Funeral Services of Florida, Inc. d/b/a Menorah Gardens & Funeral Chapels, and Service Corporation International; Case No. 01-21376 CA 08," (see related story above). The plaintiffs allege that the Company failed to disclose, or falsely stated, material information relating to the circumstances surrounding the Consumer Lawsuit. SERVICE CORPORATION: Faces Consumer Fraud Lawsuit in TX Court ------------------------------------------------------------- Service Corporation International faces a class action filed in the County Court of El Paso County Texas, County Court at Law Number Three, styled "David Hijar v. SCI Texas Funeral Services, Inc., SCI Funeral Services, Inc., and Service Corporation International, Cause Number 2002-740." The Hijar Lawsuit is a putative class action brought on behalf of all persons, entities and organizations who purchased funeral services from the Company or its subsidiaries at any time since March 18, 1998. Plaintiffs allege that federal and Texas funeral related rules (Rules) required the Company to disclose its markups on all items obtained from third parties in connection with funeral service contracts and that the failure to make required disclosures of markups resulted in fraud and other legal claims. The Company believes that the plaintiffs' interpretation of the Rules is incorrect, it stated in a disclosure to the Securities and Exchange Commission. The Lawsuit seeks to recover an unspecified amount of monetary damages. The plaintiffs' counsel has pursued two arbitration claims raising similar issues in California. The Company has recently filed a complaint for declaratory relief in Federal District Court for the Central District of California relating to these arbitration claims. Each side in the Lawsuit filed motions to summarily establish that its interpretation of the Rules was correct, and the judge has ruled in favor of the plaintiffs. This ruling allows the plaintiffs to proceed with the case. No class has been certified. The International Cemetery and Funeral Association, the Texas Funeral Directors Association, the National Funeral Directors Association, the National Funeral Directors and Morticians Association, Inc., the Texas Funeral Service Commission, and three industry competitors filed Amicus Curiae briefs asserting that their interpretation of the Rules was the same as the defendants. Additionally, the Federal Trade Commission provided the Company with an informal staff opinion supporting the defendants' argument. UNISOURCE ENERGY: Asks AZ Court To Dismiss Shareholder Lawsuit -------------------------------------------------------------- UniSource Energy Corporation asked the Superior Court for the State of Arizona to dismiss the class action filed against it, and its directors styled "Pennsylvania Ave. Event Driven Fund v. UniSource Energy Corp., et al." The Pennsylvania Avenue Event Driven Fund filed the suit in August 2004 on behalf of the holders of the Company's common stock, relating to the proposed acquisition of the Company by an affiliate of Saguaro Utility. The plaintiff alleges, among other things, that members of UniSource Energy's board of directors breached their fiduciary duties to UniSource Energy's shareholders in connection with the proposed acquisition by tailoring the acquisition to meet the specific needs of Saguaro Utility and basing the acquisition on financial results of UniSource Energy that were subsequently restated to recognize additional net income. The plaintiff is seeking to enjoin the acquisition, which was approved by shareholders of UniSource Energy in March 2004. The lawsuit requests an order: (1) declaring that the action is properly maintainable as a class action; (2) decreeing that the acquisition agreement was entered into in breach of the directors' fiduciary duties and is therefore unlawful and unenforceable; (3) enjoining the consummation of the acquisition until a new sale process is adopted; (4) ordering directors to exercise their fiduciary duties to obtain a transaction that is in the best interest of UniSource Energy's shareholders; (5) rescinding, to the extent implemented, the acquisition; and (6) awarding the plaintiff the costs of its action, including attorney's and experts' fees VIROPHARMA INC.: PA Court Approves Securities Lawsuit Settlement ---------------------------------------------------------------- The United States District Court for the Eastern District of Pennsylvania granted final approval to the settlement of the consolidated securities class action filed against Viropharma, Inc. and certain of its directors. The suit seeks an unspecified amount of damages on behalf of an alleged class of persons who purchased shares of the Company's common stock at various times between July 13, 1999 and March 19, 2002. The suit alleges that the Company and/or such directors and officers violated federal securities laws by misrepresenting and failing to disclose certain information regarding Picovir (pleconaril), an earlier Class Action Reporter story (April 5,2004) states. The Company filed a motion to dismiss this action in August 2002. In April 2003, the Court granted in part and denied in part the Company's motion to dismiss the consolidated complaint. In March 2004, the Company entered into an agreement in principle with plaintiffs' counsel to settle this litigation. The parties subject to the litigation then entered into a stipulation and agreement of the settlement dated June 29, 2004. Under the terms of the settlement, the Company's insurance carriers assumed the obligation to pay the settlement amount of $9.0 million from the Company's insurance coverage. The settlement will therefore not result in the payment of any funds by the Company. On July 12, 2004, the Court issued an order granting preliminary approval of the settlement. A hearing on the proposed settlement was held in November 2004. Asbestos Alert ASBESTOS LITIGATION: MT Hospital Uses $3.5M to Boost Treatment -------------------------------------------------------------- A US$3.5 million federal appropriation proved to be a lifesaver for the administrators of St. John's Lutheran Hospital who were earnestly looking for ways to handle the projected deluge of asbestos-related victims. As health screenings five years ago revealed there would be hundreds of victims to treat in the coming years, the hospital located in Libby, Montana allocated funds to be used specifically for construction, renovation and equipment that the U.S. Health Resources and Services Administration mandated. They also added more clinic space and a new emergency room. Then came a new information system and a tele-radiology department that allows X-rays, CT scans and ultrasound images to be digitally transmitted to and from health-care providers at other hospitals and clinics. "What this has provided is 24-hour radiologist coverage," said Jeanie Gentry, director of support services at St. John's. "Now, through partnering with Kalispell Regional Medical Center [and other hospitals] we always have radiology available, and that's helped save lives." Since St. John's no longer subsidizes the Center for Asbestos Related Disease with the annual US$250,000 payment from W.R. Grace, the hospital is using that money for other improvements. This donation was pledged as part of a broad plan by W.R. Grace to help Libby residents who have been diagnosed with an asbestos-related illness. This year an "ancient" CT scanner, literally worn out from asbestos screening, was replaced. There is crossover care between St. John's and the CARD clinic. "We all share the same patients and the same goals," Ms. Gentry said. "The focus is on more integrated patient care." Other health-care resources, such as the grant-funded Asbestos Related Disease Network, help patients with needs that might otherwise fall through the cracks, she noted. Another important resource is Community Health Care, a federal government program that subsidizes health-care costs for the uninsured. Ms. Gentry added, "I feel we're embarking on a great journey that will help us stay ahead of community expectations." ASBESTOS LITIGATION: Missouri Residents Oppose Landfill Proposal ---------------------------------------------------------------- Residents near the proposed demolition landfill site at the Pink Hill Road and Missouri 7 are raising questions regarding the community's health once operations begin. In a public hearing last week, a community member Wayne Myslivy expressed concern that the air could be contaminated with asbestos and lead dust since the landfill accepts construction waste from older buildings. The Missouri Department of Natural Resources informed them that a permit would have to be issued before construction on the landfill can begin. Residents are encouraged to write in their comments until December 1, and the decision will be made by December 31. Developers anticipate it would operate from about 6:30 a.m. to 5 p.m. on weekdays and 6:30 a.m. to noon on Saturdays. The landfill would accept materials such as cut or shredded tires, wood and concrete. The landfill itself is about 19 acres in a 130-acre piece of land. Another issue Mr. Myslivy brought up was noise from construction equipment and the blasting the contractors would have to do in the rock quarry before it can be an acceptable dumpsite. "There's a lot of buffer around what people will see and hear," said project manager Tom Evans. He added the project would not generate half the traffic the asphalt and quarry did. The landfill will also take oil-contaminated soil, but representatives from the Missouri Department of Natural Resources said there will be tests done on the oil to make sure it's not hazardous. Likewise, there would be an onsite retention pond that would catch the oil that could be washed away by rain. Still, Mr. Myslivy remained worried the proposal doesn't offer enough safeguards. He said that at some point, contaminated dirt is going to go into that dump which is precariously located within several hundred yards of three grade schools. Commenting on the low turnout of residents at the hearing, Mr. Myslivy said he never received notice about the public hearing and worried that not many neighbors knew what was happening. Matt Bowen, who owns Pink Hill Acres, said his Company purchased the land in 1988 to operate an asphalt Company. The asphalt Company has since moved to M-7 and U.S. 50. "We don't intend to make any enemies," he said, indicating the blasting needed to prepare the site would be minimal. "We would make an effort to consult the citizens." Lisa Danbury, with the Mid American Regional Council, spoke in favor of the project. She said the landfill would provide a place for construction materials that are currently filling up other landfills. Mr. Bowen estimates it would take about 20 years for the landfill to reach capacity, then the land surrounding the hole could be built on. ASBESTOS LITIGATION: Neighbors Call for Gate's Safe Demolition --------------------------------------------------------------- Fears of asbestos poisoning are brewing in Drayton Road, Borehamwood, where the 1920s Gate Studios complex is scheduled for demolition. Nearby homeowners last week called on Hertsmere Borough Council to make sure demolition workers make any asbestos in the building safe, before it is knocked down to make way for a new housing estate. The Gate, built in 1928, is thought to have an asbestos-laden roof, although a detailed report is yet to be completed on the building. Linda Brown, whose house backs onto the studios complex, said, "I am concerned. You hear so much about asbestos, and I have windows open all the time, and children coming over to stay. I would like to know when they are going to demolish the building. We haven't had any notification of when they are starting the demolition." Pauline Poole, also from Drayton Road, said that the residents should be informed of the presence of asbestos. A spokesman from Hertsmere Borough Council said that asbestos is likely to be in the roofs as buildings of that age used the substance heavily. He added, "Before any demolition takes place the developers will be required to complete a detailed asbestos report. If there is asbestos in the building, legislation requires the Health and Safety Executive to ensure the demolition is safe." The Gate Studios complex was built in 1928, and is widely believed to be Britain's oldest surviving sound stage. A campaign to have it listed as a site of national heritage failed, and it is now due to be demolished and replaced with 130 new houses and flats. ASBESTOS LITIGATION: Ground Chemicals Fail to Deter Land Buyers ---------------------------------------------------------------- Warnings against digging more than two feet into the ground because of cancer-causing chemicals haven't dissuaded people from buying 130 of the 150 former missile silo plots the federal government is selling in Missouri. Much of the property is being bought back by the previous owners - farmers who owned the land before the government took it 40 years ago to install the silos. The Air Force removed the solid-fueled Minuteman II missiles and destroyed the underground silos years ago, but the soil is still contaminated with fuel, asbestos and polychlorinated biphenyls, or PCBs, found in waterproof coatings on the silos and underground fuel storage tanks. Some farmers said they purchased the plots just to ensure that no one else grabbed them. "I didn't really want to buy it back, but it has a frontage on a blacktop road that is well-traveled," said Mary Gorrell, who bought a plot on her farm near Sedalia. "We were afraid someone would buy it and it would become a public nuisance." Retired farmer Eugene Wells, who leases his Johnson County farm for grazing, turned down an offer to buy a silo site. Besides the price of US$2,200 for 2.8 acres of land, Mr. Wells said, he was concerned about deed restrictions, including a stipulation that the buyer and all future owners of the land could not make any claims against the government if the ground were disturbed and required cleanup. "Why should I be responsible?" Mr. Wells asked. "The government is the one that contaminated the land." Military officials said that as long as the land is not disturbed, the contaminants should not be hazardous to humans or livestock. Missouri has asked the military to help pay for a state registry to track the sites and inspectors who could check the property each year, said James Werner of the Missouri Department of Natural Resources. "We increasingly learn that the risks, at least the urgent risks, are not so much an immediate and acute health risk," Mr. Werner said. ASBESTOS LITIGATION: Awareness Week Scheduled to Educate, Inform ---------------------------------------------------------------- As Australia observes National Asbestos Awareness Week, a variety of nationwide activities have been planned to mark this event. The organizers intend to make people aware of the tragedy caused by asbestos-related illnesses. The Australian Council of Trade Unions says there is still a poor level of awareness of the dangers of handling and disposing of asbestos products. ACTU President Sharan Burrow says the asbestos problem that has been plaguing the country for so long will continue to do so for decades. "We've had almost 2,000 deaths from mesothelioma," she said. Ms. Burrow added, "That's one of the cruelest diseases and for every case there's another two of either lung related cancer or other illness. If adults in our community aren't aware then children will in fact be all too often at risk." Coinciding with the launch, the New South Wales Government has committed $100,000 to improving community education about the dangers of asbestos. State Workplace Relations Minister John Della Bosca says a state Government-funded program will be established to ensure homeowners and renovators are aware of the risks of dealing with asbestos. "The outreach program will include full-time work and travel throughout New South Wales, raising awareness of the dangers of asbestos in the community, through local councils, hospitals, libraries, shopping centers and the media," he said. ASBESTOS LITIGATION: FL Jury Awards $400T to Ex-Safety Director ---------------------------------------------------------------- A jury gave a US$400,000 award to Lee county school district's former safety director to make up for loss wages and mental anguish he suffered after being terminated by the district. Ernie Scott lost his job after blowing the whistle on hazards the district allegedly ignored to the federal authorities. They announced the verdict on Nov. 8 and gave him US$127,000 more than he asked for. Mr. Scott said upper level management interfered with his duties by going around him, and cutting corners. When he reported woes with fire codes, indoor air quality or asbestos and they fell on deaf ears, he went to the media. When they eliminated his job, he sued. "I didn't see it as blowing the whistle. I saw it as protecting," said Mr. Scott. For years, he helped uncover numerous safety problems at Lee County schools. The award miffs school board member Elinor Scricca. "Misguided. Plainly misguided," she says about the jurors. "That they deliberated only 58 minutes told me they did not thoroughly review the evidence. He played on their emotions." Board member Bob Chilmonik's jaw dropped. "It was a David and Goliath thing. I learned in the corporate world when a company goes against a worker, sometimes the jury sides with the worker." The school district has ten days to get the judge in the case to override the jury award. If that fails, it has 30 more days to send the case to the district Court of appeals. But even that won't be the last time they deal with the former employee. He is involved in a separate case along with dozens of teachers and students who claim they were exposed to asbestos and toxic mold. ASBESTOS LITIGATION: Asbestos Used on Rise in Asia, Says Expert --------------------------------------------------------------- Asia needs to ban the use of asbestos and conduct studies on people who have become ill from exposure or asbestos-related diseases will never end, according to a specialist. A law largely prohibiting use of asbestos took effect in Japan last month, but few other Asian economies have taken similar action, said Ken Takahashi, a professor in the environmental epidemiology department at the University of Occupational and Environmental Health in Kitakyushu. His concerns are at the center of a three-day conference in Tokyo that began last week. The Global Asbestos Congress 2004 brings together some 420 researchers, civic group representatives and relatives of people who have asbestos-related diseases from more than 36 countries to discuss problems caused by asbestos and their possible solutions. The conference was organized by Japanese civic groups and researchers. Mr. Takahashi, an epidemiologist specializing in asbestos- induced illnesses, gave a presentation on disease prevention in Asia. While asbestos exposure has dropped in South Korea, Taiwan and Singapore, its use is on the rise in countries that include China, Vietnam, Thailand and Indonesia, the professor said. Unfortunately, exact figures on asbestos use and the number of people with asbestos-related diseases are not available in these countries. Although Japan banned asbestos use in principle, construction workers may still inhale the substance when they repair or tear down old buildings. In Japan, where asbestos exposure peaked in the 1970s, the number of people who have died of mesothelioma has increased in recent years. The figure was 500 in 1995 but grew to 878 in 2003, according to the Ministry of Health, Labor and Welfare. About 70 percent to 80 percent of the victims were believed to have been exposed to asbestos, Mr. Takahashi said. He estimated that 2,440 people a year will die of mesothelioma between 2035 and 2039. He feels strongly that all of Asia needs to ban the substance or strive to gradually cut its use, stressing that governments and researchers need to study patterns of asbestos use and the number of victims of the diseases the substance causes. The governments should also reconsider whether exposure limits under the law are low enough to protect the health of construction workers, he said. Some parts of Asia do not require health checks for workers exposed to airborne asbestos, and Mr. Takahashi said Japan can help its Asian neighbors establish better systems to supervise workers' health. "Not just researchers, but also non-governmental organizations, media and people suffering from asbestos-related diseases need to inform the public of this problem from various viewpoints," he said. ASBESTOS LITIGATION: Wolseley Reports Liability of GBD27.9M ----------------------------------------------------------- The world's number one distributor of heating and plumbing products, Wolseley plc (NYSE: WOS), claims that its level of insurance cover significantly exceeds that of expected future claims. No impact to its profit or cash flow is therefore expected to arise in the future. There were 308 outstanding claims at this year's fiscal year end compared to 484 claims in 2003. In accordance with UK GAAP, the Company has recognized a discounted liability of GBD27.9 million in respect to asbestos litigation. An equal debtor account of GBD27.9 million is shown in other debtors reflecting the discounted sum recoverable from insurers in respect of this liability. The West Berkershire, UK-based Company believes that the international nature of Wolseley's operations exposes it to the potential for litigation from third parties. In the US, the risk of litigation is generally higher than that in Europe in such areas as workers' compensation, general employer liability and environmental and asbestos litigation. In the case of asbestos litigation, the Company employs independent professional advisers to actuarially determine the potential gross liability, which necessitates the application of certain assumptions relating to claims development and the cost of settling such claims over the remaining lifetime of the potential litigants, which is about 50 years. Wolseley Insurance provisions represent an estimate, based on historical experience, of the ultimate cost of settling outstanding and potential claims. Environmental and legal liabilities include known legal claims and environmental liabilities where the costs and timing of any payment is inherently uncertain. Included in this provision is an amount of GBD27.9 million related to asbestos litigation involving certain Group companies. GBD26.2 million was the amount recorded in 2003. The liability has been actuarially determined as of July 2004 based on advice from independent professional advisors. The provision and the related receivable have been stated on a discounted basis using a long-term US treasury rate of 5%. The provision for asbestos litigation as reported under US GAAP would be GBD45.9 million (2003: GBD33.8 million), of which GBD38.1 million (2003: GBD25.1 million) is an undiscounted amount with the balance representing a discounted amount. ASBESTOS LITIGATION: MI Agencies Agree on Plan for Quincy Site -------------------------------------------------------------- Two federal agencies are trying to agree on a plan for dealing with asbestos at the former Quincy copper smelting site. The National Park Service plans to develop the site as a visitor center for the Keweeenaw National Historical Park and Isle Royale National Park. But the U.S. Environmental Protection Agency placed boundaries around the site last July after asbestos was discovered there. "Here we have two governmental agencies and there seemed to be a lack of understanding as to what each agency was responsible for going there, and how the future collaboration on that site could be enhanced, said Frank Fiala, superintendent of the historical park. Representatives from the EPA, the park, outside consulting firms and attorneys from both sides met last month in Chicago to discuss the situation. The meeting was helpful, said Brian Kelly, the onsite coordinator for the emergency response branch of the EPA. "We were able to come up with a plan for moving forward on the site," Mr. Kelly said. "There are people involved at the local, state and federal levels, and everybody wants to see a positive outcome, we just all need to work together to work that out." A number of issues regarding the site were discussed, Mr. Fiala said, primarily asbestos removal and containment. ASBESTOS LITIGATION: Solbec's Cancer Drug Testing A Huge Success ---------------------------------------------------------------- Australian-based Solbec Pharmaceuticals Ltd. (ASX:SBP) said its cancer drug, Coramsine, is effective in both treating and preventing mesothelioma in a "mouse model" of the cancer. If used in combination with the immune triggering compound, CpG, Coramsine resulted in the total remission of the cancer. The Company, which is known for developing anti-cancer agents and hormone replace products, said that the study showed that the combination therapy displayed a much greater response than that seen with either agent on its own. This type of therapy was used to maximize the immunological effect of Coramsine. The Coramsine, CpG combination therapy potentially has the added effect of stimulating lasting immunity against the cancer as attempts to cause tumor formation in a treated, "cured" mouse failed. The Company noted that the aim of the study, which confirms and extends earlier findings conducted by Solbec, was to learn how Coramsine primes the immune system and whether it could bring about long term remission of mesothelioma. Further research will set out to confirm these findings. "If this finding is replicated in patients with mesothelioma or other cancers, we believe that Coramsine could play an important role in clinical management of malignancy," said Professor John Papadimitriou. "The results go a long way toward confirming that Coramsine causes an immune response to cancer. The proof will come by trial[s using] combination therapy in humans," said Stephen Carter, Solbec's managing director. Shares in Solbec Pharmaceuticals jumped 68 percent later that day after the biotech company announced that the new drug had proven effective in treating asbestos-related cancer. Solbec shares were up 8.5 cents to 21 cents at 1330pm (AEDT) on a volume of 24.9 million shares. The research, conducted by scientists at the University of Western Australia's Tumour Immunology Group, formed part of a program funded by Solbec, with support from the federal government's Biotechnology Innovation Fund. ASBESTOS LITIGATION: Cancer Victim Accepts US$4M Settlement ----------------------------------------------------------- Luke Lindau, a 78-year-old Arlington Heights man who suffers from mesothelioma, has decided to forego his chance to face the people responsible for his illness in Court. Instead Mr. Lindau settled for a substantial sum of nearly US$4 million, according to his attorney Scott Hendler. "We believed that the defendants' herculean efforts to delay this trial would only hurt Mr. Lindau," Mr. Hendler said. "His interests were paramount to our decision to settle." An asbestos suit against 59 defendants filed a year ago in Madison County Circuit Court came close to trial in recent weeks. But various legal maneuvers -- including defense motions to transfer and then remove the case to federal Court -- ultimately landed and stalled in appellate Court, which was considering an emergency motion to stay the trial. In a recent edition of the Class Action Reporter dated Nov. 19, it was reported that Circuit Judge Daniel Stack dismissed 60 potential jurors in an asbestos lawsuit filed in Madison County Circuit Court. Trial was said to be averted because the 5th Judicial Appellate Court was still mulling over Stack's ruling Nov. 8 that denied transferring the case to Cook County, a jurisdiction closer to where the plaintiff Luke Lindau resides. Mr. Hendler, who called the settlement a "favorable amount," said his client had wanted to tell his story in Court "to help prevent this type of thing from happening to other people in the future." According to his complaint, Mr. Lindau alleged that during the course of his employment and during home remodeling work, he was exposed to, ingested or otherwise absorbed large amounts of asbestos fibers emanating from certain products he worked around and that they were manufactured or sold by the defendants. A former union painter, he was diagnosed with mesothelioma in October 2002. "We expect that the overall recovery from all defendants, including individual trust funds established by defendants that sought bankruptcy protection but are still viable and profitable businesses... is a reflection of the merit with which the defendants viewed Mr. Lindau's claims against them and the trial team that represented him," according to a statement from Mr. Hendler. "I think we were able to accomplish this because the defendants did not consider the emergency appeal to have much chance of success," Mr. Hendler said. "The trial judge indicated he would reset the case for December 13 if the appeal were rejected." Defendants Bondex and Georgia Pacific, represented by Jeff Hebrank, have yet to issue a comment. Scott Hendler's co-counsel was Mike Bilbrey of the Edwardsville firm, Bilbrey & Hylla. Mr. Hendler is managing attorney of Hendler Law, a national trial firm representing victims and their families in mesothelioma and pharmaceutical drug injury litigation throughout the country. ASBESTOS LITIGATION: Tower Properties Reaches US$50T Settlement ---------------------------------------------------------------- Tower Properties (OTC:TPOP), owner of the 31-story Commerce Tower downtown, has paid US$50,000 to settle asbestos claims brought by attorney Gregory Leyh, a former tenant in the building. The claims stemmed from the aftermath of a fire on the 23rd floor of the building in July 2000. Mr. Leyh alleged that Tower Properties turned down his request to remove asbestos from the open-ceiling space between his office and the fire-damaged space. In the April 2, 2004 edition of the CAR newsletter, the Company disclosed in its filing to the Securities and Exchange Commission that it had a pending suit with a former tenant, who was alleging alleged fraud, gross negligence, nuisance and breach of contract. The plaintiff had sought to represent a class for damages for alleged excessive rent, property damage and medical monitoring. Plaintiff originally filed suit in June 2001, then voluntarily dismissed it on May 30, 2003 and immediately filed another suit, this time, seeking punitive damages and an order requiring removal of the asbestos. After a judge refused to certify the case as a class action on behalf of all the building's tenants, Mr. Leyh proceeded on his own. In reaching the settlement, Mr. Leyh said he rejected Tower Properties' request that the terms be kept confidential. "The reason I was put in this position was because Tower wanted to keep secret the fact that its building is currently contaminated by asbestos. I won't perpetuate that secret with a confidential settlement," he said. Tower Properties' attorney, Spencer Brown of Deacy & Deacy, denied Mr. Leyh's assertion. "The settlement and the form of the settlement have absolutely nothing to do with any effort on the part of Tower Properties to hide from its tenants the fact that the building has asbestos-containing fireproofing," he said. "It's common knowledge, because the owners of the building have told the tenants about the presence of asbestos in the building." ASBESTOS LITIGATION: Archicentre Stresses Home Renovation Risks ---------------------------------------------------------------- Asbestos dust can be a deadly side effect of renovations, says a leading Tasmanian architect. Children and other family members run a high risk of contracting asbestos-related diseases during a renovation, says Michael Cooper, state manager of Archicentre, Australia's largest designer of home renovations and home inspection Company. The likelihood of contamination increased if they lived in the home while renovation went on. Mr. Cooper, who also runs the building advisory service of the Royal Australian Institute of Architects in Tasmania, said there were hundreds of thousands of renovations each year in Australia. Promoting National Asbestos Awareness Week, Mr. Cooper said a third of all houses built in Australia before 1982 contained asbestos. He said asbestos in sheet products was usually embedded but if the sheets started to weather or break killer fibers could attack the lungs. The real problem began when people renovated and started cutting, sanding, drilling, grinding, or pulling up materials and caused the deadly dust. "The bottom line is that people need to realize that a renovation can be extremely hazardous and there needs to be constant monitoring of the site to ensure the family's safety." Archicentre was often alarmed to find renovations which involved asbestos dust had already been started without the owners receiving specialist advice from licensed asbestos removalists. On a population basis, Australia had the highest incidence of mesothelioma, a cancer caused by exposure to asbestos. The Asbestos Diseases foundation of Australia has estimated the number of people diagnosed with asbestos related diseases will not peak until 2020. By then there will be 13,000 cases of mesothelioma and 40,000 cases of asbestos related lung cancer. Mr. Cooper said removal and disposal of asbestos cement sheet should only be done by a licensed asbestos removal Company, and admittedly, it could add substantially to the cost of renovation or maintenance. Specialists would take precautions like wearing protective masks and clothing, using hand tools for cutting not power tools, not abrading or breaking up the product whenever possible, wetting the product before working with it, and wetting any residue before sweeping. Archicentre, which claims to be a leading authority on building construction, advised homeowners doing any renovations to have a health and safety plan if they were doing it themselves. If professional builders or tradesmen were doing the job, part of the contract should clearly include a reference to health and safety matters and an existing public risk insurance policy. ASBESTOS LITIGATION: UK Court Summons Huntsman to Face 5 Charges ---------------------------------------------------------------- HMP Equity Holdings Corp. reports that following an investigation by the U.K. Health and Safety Executive, a summons was served on its subsidiary Huntsman Advanced Materials (UK) Ltd to appear in Magistrates Court on November 2004 to answer five charges. The charges cite violations of the Health and Safety at Work Act arising from what is alleged to have been asbestos contamination caused by construction activity at the Advanced Materials facility in Duxford, U.K. between November 2002 and January 2003. Although the Company does not believe this matter will result in the imposition of fines and other costs material to the financial condition of the Company, it is too early to predict the outcome of the case. The Company has been named as a "premises defendant" in a number of asbestos exposure lawsuits. These suits often involve multiple plaintiffs and multiple defendants, and, generally, the complaint in the action does not indicate which plaintiffs are making claims against a specific defendant, where the alleged injuries were incurred or what injuries each plaintiff claims. There are currently 43 asbestos exposure cases pending against the Company. Among the cases currently pending, management is aware of one claim of mesothelioma. Originally known for pioneering innovations in packaging, and later, rapid and integrated growth in petrochemicals, Huntsman companies today employ 15,000 people in more than 40 countries, with annual revenues of approximately US$9.5 billion. ASBESTOS LITIGATION: RAND Prompts Michigan to Mimic Ohio's Law -------------------------------------------------------------- According to one of the leading public policy research institutions in the U.S., asbestos litigation is choking the Court system and threatening manufacturing plants across Michigan. And despite attempts by Congress, the situation is getting worse. The RAND Institute for Civil Justice, an independent research program within the RAND Corporation, recently released a report stating that an Ohio law could help ease the burden placed on the Courts and provide a roadmap for Michigan to follow to protect businesses from pre-emptive lawsuits from plaintiffs who aren't really sick. It could supposedly also make it easier for the true victims to get relief. The Ohio law requires that those who have been exposed to asbestos and later sue for medical damages meet specific medical criteria before a lawsuit can proceed. RAND reports that, "Such a benchmark is long overdue and an obvious solution to the unbridled legal atmosphere that's prevailed nationwide." Asbestos lawsuits have bankrupted nearly 70 companies nationwide and cost them US$70 billion. Roughly 50,000 workers lost jobs last year because of the lawsuits. Michigan businesses, particularly the auto industry, have been hit hard by such lawsuits. Southfield auto supplier Federal Mogul, for example, was sued into bankruptcy because it bought a Company that made asbestos brake linings. Ford Motor Co. has 45,000 claims pending against it. According to industry research, at best, half of all potential asbestos claims have been filed. At worst, one-fifth has been filed. That creates a total potential cost for claims in the range of US$200 billion to US$265 billion. Asbestos claims can be filed based on exposure, not injury. An estimated two-thirds of claimants do not have any symptoms, but worry they might get sick in the future. So they sue now because they're afraid there won't be any money later. Attempts by Congress to establish funds to pay claims to try and protect businesses from lawsuits haven't been effective. The idea that the companies that use asbestos and their insurers pay into a fund where affected workers could make claims makes sense. Workers would give up their right to sue, but still get money to cover their damages. Those who have developed serious diseases would be able to claim a larger payout. However, the parties involved can't agree on the fund amounts and the estimates continue to escalate. The RAND Institute study concludes, "Ohio's law is a logical step and one Michigan should follow." ASBESTOS LITIGATION: PA Judge Grants Halliburton's Plan for DII ---------------------------------------------------------------- Halliburton Co., the world's No. 2 oil field services Company, posted a quarterly loss as gains in its energy business were outweighed by US$230 million in charges to fund its asbestos settlement. U.S. Bankruptcy Judge Judith Fitzgerald found a proposed US$1.5 billion settlement of asbestos claims between two subsidiaries of Halliburton Co. and insurers "fair and reasonable." At a hearing in Pittsburgh, Judge Fitzgerald gave two parties until Nov. 23 to contest the deal. She said that the agreement will be considered approved if there are no objections. Court approval would clear the way for Halliburton to complete a US$4.8 billion plan to settle all current and future asbestos claims as soon as year's end. The agreement involves insurers and Halliburton subsidiaries KBR and DII Industries. The Company had stated in its latest filing to the Securities and Exchange Commission that it intends to issue 59,500,000 shares of common stock that will be contributed to DII Industries, LLC Asbestos PI Trust, the trust created under the plan of reorganization of some of their subsidiaries. The assets of Asbestos PI Trust will be used to fund the payment of unsecured asbestos personal injury claims against its subsidiaries. The shares of common stock that may be offered under this prospectus will be offered by Asbestos PI Trust or by those to whom the selling stockholder may pledge, donate or transfer shares covered by this prospectus. Upon the Company's funding of Asbestos PI Trust, the trust will beneficially own 59,500,000 shares of common stock, which, after issuance, would constitute 11.9% of its outstanding common stock (using its 442,167,852 outstanding shares as of November 16, 2004 for purposes of calculation). Asbestos PI Trust, or its members, donors or other transferees, may sell up to 59,500,000 shares of common stock under the registration statement. The Company will include in a supplement to this prospectus, to the extent that may be required by the applicable SEC rules and regulations, any change in the information concerning the selling stockholder, any additional information concerning the manner of sale and the name of any other person who may sell, transfer or dispose of shares of common stock under this prospectus. In connection with the transfer of its common stock into Asbestos PI Trust, Halliburton and Alan R. Kahn, the managing trustee of Asbestos PI Trust, will enter into a stockholder agreement. The stockholder agreement provides for specified registration rights in favor of Asbestos PI Trust and describes the manner and volume in which Asbestos PI Trust may sell its shares of our common stock. Although the stockholder agreement does not restrict Asbestos PI Trust's right to vote its shares, it places limitations on Asbestos PI Trust's ability to take certain actions in its capacity as a stockholder of our common stock. As of September 30, 2004, the aggregate indebtedness of its subsidiaries was about US$109 million, and other liabilities of its subsidiaries, including trade payables, accrued compensation, advanced billings, income taxes payable and other liabilities (other than asbestos and inter-company liabilities) were about US$5.7 billion, and accrued asbestos and silica liabilities were about US$4.4 billion. ASBESTOS LITIGATION: Papers Expose Washington Chemical Cover-up ---------------------------------------------------------------- The lengths to which management at the Washington Chemical Company went to cover up the dangers of asbestos to its workforce are staggering. Documents reveal directors knew their workers were at risk, yet did nothing. They failed to warn employees of the dangers or provide safety devices, rarely carried out medical tests and went as far as to change Company recruitment rules to avoid paying out compensation to future asbestos victims. Papers from the Washington Chemical Company and sister firm Newalls Insulation in Newcastle show the extent to which thousands of employees were misled and their lives put at risk. A university lecturer in Manchester has compiled Company documents from the 1930s to the late 1970s. The 240 cassettes of microfilm detail the lengths they went to try to stop the Government from extending asbestos restrictions and to cover up the affect of the deadly dust. They reveal more than 20,000 people were exposed to asbestos by working at the chemical Company or at Newalls. Only 800 were ever given a medical. Towering over their homes, children regularly played in the mountains of asbestos dust unaware of the threat. Minutes from the board of Newalls Insulation show how the Company tried to limit the amount of compensation it paid to asbestosis victims by changing employment rules. These included stopping hiring people with chest problems and later those who had worked in mines as they had more chance of getting asbestos related diseases. A letter from parent Company Turner & Newall's solicitors to the firm in 1977 said, "It has not been practical for Newalls to adopt a system of warning men of the risk of contracting asbestosis or other respiratory disability." In one set of minutes in 1940, after a man who worked filling mattresses died of asbestosis, the Company decided men would be moved around in jobs so they could not claim compensation. The minutes related, "Mr. Collins said that this work will not come within the asbestos scheme if it is only occasional and suggested therefore that this fact should continually be borne in mind and that where ever the making of mattresses in the areas became necessary different men should be engaged in the work on difference occasions." The factory inspectors were introduced after the Asbestos Act, implemented in 1931, laid out restrictions for some workers who deal with asbestos. Unions wanted men who worked with insulation to be given medicals, but the firm decided only a handful would, to avoid setting a precedent and to stop the unions from going to the Government. Calls from factory inspectors for everyone working with insulation to wear masks were suppressed. The minutes said, "Mr. Collins said he thought that the present problem was largely a tactical or psychological matter for the management rather than a legal problem." The directors felt the Government would eventually crack down on asbestos practices but chose to resist any extension of the rules as long as it could. Workers who were entitled to medicals found the Medical Board dealing with these was so behind in its work it did not attend the factory for more than 18 months. Union protests over the delay were ignored. The extent the Board would go to avoid paying compensation was shown when one woman died of asbestosis and lung cancer. Letters between directors agreed to "resist any suggestion that death was due to asbestosis" and say her death was due to cancer. Washington Chemical Company made asbestos-containing products including fireproofed mattress for trains, lagging for pipes and spun glass, which could be found in insulation in buildings. The firm's contracting arm Newalls Insulation had workers spraying ships with asbestos mixed with magnesium, many in Tyneside yards. ASBESTOS LITIGATION: MSA Named in Less Than 300 Liability Suits ---------------------------------------------------------------- Various lawsuits and claims are pending against the world's largest manufacturer of safety equipment and systems, Mine Safety Appliances Company. These lawsuits are primarily product liability claims. The Pittsburgh, Pennsylvania-based Company has been named as a defendant in about 2,125 lawsuits involving primarily respiratory protection products allegedly manufactured and sold by the Company. Collectively, these lawsuits represent a total of about 30,200 plaintiffs. About 85% of these lawsuits involve plaintiffs alleging they suffer from silicosis, with the remainder alleging they suffer from other or combined injuries, including asbestosis. Of the 320 non-silicosis claims, only a handful alleges asbestos-related injuries. These lawsuits typically allege that these conditions resulted in part from respirators that were negligently designed or manufactured by the Company. Consistent with the experience of other companies involved in silica and asbestos-related litigation, there has been an increase in the number of asserted claims that could potentially involve the Company. Management cannot determine the Company's potential maximum liability for such claims, in part because the defendants in these lawsuits are often numerous and the claims generally do not specify the amount of damages sought. ASBESTOS LITIGATION: Hardie Payouts End as MRCF Seeks Liquidator ---------------------------------------------------------------- James Hardie asbestos victims have suffered another setback as the multinational forced the compensation body into provisional liquidation and again threw their claims in doubt. The Medical Research and Compensation Foundation was set to file for provisional liquidation after Hardie refused to adequately cover its liabilities. The move will put a moratorium on 700 claims currently before the foundation and has sparked speculation that Hardie is planning to again cut and run from asbestos victims. The foundation's Managing Director Dennis Cooper said the application for liquidation was a last resort and one the foundation had desperately wanted to avoid. But with notice of claims worth about $80 million and the foundation having only about $40 million in cash, he said he had no choice. "We've been waiting since July for the promises of James Hardie to be converted into dollars," said Mr. Cooper. He also said Hardie had offered to cover only the next six months' worth of claims, and even then only once the foundation had used up the last of its money. This would have placed future claimants at even more risk. Asked whether it was possible Hardie was trying to cut off the foundation altogether, the foundation's lawyer Nancy Milne said, "It may well be." A source close to the negotiations between Hardie and asbestos victims over compensation also speculated the Company may be preparing to again leave sufferers in the lurch. The foundation will file evidence ahead of a scheduled Court hearing on December 2. Meanwhile, James Hardie Chair Meredith Hellicar continues to defend the employment of the former chief executive Peter Macdonald as a consultant on $74,000 a month. "This man is not evil incarnate, he was a very, very effective chief executive and our shareholders were very concerned about the loss of his knowledge and experience," she said. Earlier this week, delegates at the Global Asbestos Congress in Tokyo, representatives from 40 countries, endorsed calls for a global ban on James Hardie products in support of Australian asbestos victims, a day after the Company warned that boycotts in Australia were beginning to affect its sales. ASBESTOS LITIGATION: Ballantyne Settles NY Case, Battles 2 More ---------------------------------------------------------------- In February 2004, Ballantyne of Omaha Inc. (OTC: BTNE) settled an asbestos-related lawsuit in a case in the Supreme Court of the State of New York entitled Prager v. A.W. Chesterton Company, et al, including Ballantyne. Ballantyne, a leading manufacturer and marketer of motion picture theatre projection room equipment, is also a defendant in two other asbestos cases. One entitled Bercu v. BICC Cables Corporation, et. al., in the Supreme Court of the State of New York and one entitled Julia Crow, Individually and as Special Administrator of the Estate of Thomas Smith, deceased v. Ballantyne of Omaha,Inc. in Madison County, Illinois. In both cases, there are numerous defendants including Ballantyne. At this time, neither case has progressed to a stage where either the likely outcome or the amount of damages, if any for which Ballantyne may be liable can be determined. An adverse resolution of these matters could have a material effect on the financial position of Ballantyne. ASBESTOS LITIGATION: Illinois Power Co. Faces 39 Pending Suits -------------------------------------------------------------- Illinois Power Co. has been named in a number of lawsuits, along with numerous other parties, which have been filed by certain plaintiffs claiming varying degrees of injury from asbestos exposure at generating plants formerly owned by the Company. A total of 109 lawsuits have been filed, with 26 of them settled and 44 of the lawsuits dismissed. As of September 30, 2004, 39 lawsuits were pending. Four of these pending asbestos lawsuits were served during the third quarter of 2004. Most of these pending lawsuits were filed in the Circuit Court of Madison County, Illinois. The number of total defendants named in each case is significant with as many as 130 parties named in a case to as few as five. The average number of parties is 70 in the pending lawsuits. Each lawsuit seeks unspecified damages in excess of US$50,000, which, if proved, typically would be shared among the named defendants. The Company recorded a reserve with respect to the pending lawsuits with the belief that the final disposition of these proceedings will not have a material adverse effect on its financial position, results of operations or liquidity. In the October 1, 2004 edition of the Class Action Reporter, it was reported that when the Illinois Commerce Commission approved Ameren Corp.'s proposed purchase of Illinois Power earlier this year, several groups raised objections to an "asbestos rider," which was a surcharge devised to cover asbestos-related claims. Ameren has since then modified its proposal, and agreed to restrict the use of a surcharge. Beginning in 2007, 90% of cash expenditures in excess of the amount included in base electric rates will be recovered by the Company from a US$20 million trust fund financed with contributions of US$10 million each by Ameren and Dynegy. ASBESTOS LITIGATION: ALSTOM Tackles Various Claims Worldwide ------------------------------------------------------------ Headquartered in Paris, France, the ALSTOM Group (Euronext Paris: ALS) reported in its latest filing to the Securities and Exchange Commission that it has not in recent years suffered any adverse judgment, or made any settlement payment, in respect of any U.S. personal injury asbestos claim. Between October 31, 2002 and September 30, 2004, a total of 185 cases involving about 17,742 claimants were voluntarily dismissed by plaintiffs, typically without prejudice, allowing them to refile these cases in the future. The Group designs, builds and services technologically advanced products and systems for the energy and transport infrastructure and accordingly is subject to regulations regarding the control and removal of asbestos-containing material and identification of potential exposure of its employees to asbestos. It has been the Group's policy for many years to abandon definitively the use of products containing asbestos by all of its operating units worldwide and to promote the application of this principle to all of the Group's suppliers, including in those countries where the use of asbestos is permitted. In the past, however, the Group has used and sold some products containing asbestos, particularly in France in the Marine Sector and to a lesser extent in the other Sectors. As of September 30, 2004, in France, the Group is aware of about 2,408 asbestos sickness-related declarations accepted by the French Social Security authorities concerning the Group's employees, former employees or third parties. All of such cases are treated under the French Social Security system, which pays medical and other costs of those who are sick and which pays a lump sum indemnity. Out of these 2,408 declarations, the Group is aware of about 237 asbestos-related cases from employees or former employees. They have instituted judicial proceedings against certain of the Group's subsidiaries with the aim of obtaining a Court decision holding these subsidiaries liable for an inexcusable fault which would allow them to obtain a supplementary compensation above the payments made by the French Social Security funds of related medical costs. Decisions of the Courts of Appeal have all confirmed these findings of inexcusable fault. In March 2004, the French Supreme Court (COUR DE CASSATION) rendered its first decisions on the appeals lodged by a subsidiary of the Group's Marine Sector. The French Supreme Court has confirmed the inexcusable fault, but has reversed the Court of Appeal's decisions which had ordered the Group's subsidiary to pay damages as the damages are to be directly compensated by the Social Security funds (CAISSE PRIMAIRE D'ASSURANCE MALADIE). In May 2004, the French Supreme Court confirmed the finding of inexcusable fault in six decisions rendered in relation to cases in the Group's Marine Sector, while confirming that the damages were to be definitively borne by the Social Security funds. In the current cases within the Group's Marine Sector, the Social Security authorities have not in fact attempted to charge the Group subsidiary the financial consequences of occupational disease, including those arising out of the inexcusable fault pursuant to article 2 paragraph 2 of the decree of 16 October 1995. In the other Sectors, the Group estimates that most of the current cases will be governed by the same terms, pursuant to the above-mentioned decree. In addition, in the United States, as of September 30, 2004, the Group was subject to about 155 asbestos-related personal injury lawsuits, which have their origin solely in the Company's purchase of some of ABB's power generation business, for which the Group is indemnified by ABB. The Group is also currently subject to two class action lawsuits in the United States asserting fraudulent conveyance claims against various ALSTOM and ABB entities in relation to Combustion Engineering, Inc., for which the Group has asserted indemnification against ABB. CE is a United States subsidiary of ABB, and its power activities were part of the power generation business purchased by the Group from ABB. In January 2003, CE filed a "pre-packaged" plan of reorganization in United States bankruptcy Court. This plan was confirmed by the bankruptcy court and the United States federal district Court. The plan has been appealed and has not yet become effective; consummation of the plan is subject to certain specified conditions. In addition to its protection under the ABB indemnity, ALSTOM believes that under the terms of the plan it would be protected against pending and future personal injury asbestos claims, or fraudulent conveyance claims, arising out of the past operations of CE. At the end of the third quarter of 2004, the Group was subject to about 48 other asbestos-related personal injury lawsuits in the United States involving about 528 claimants that, in whole or in part, assert claims against ALSTOM which are not related to ALSTOM's purchase of some of ABB's power generation business or as to which the complaint does not provide details sufficient to permit the Group to determine whether the ABB indemnity applies. Most of these lawsuits are in the preliminary stages of the litigation process and they each involve multiple defendants. The allegations in these lawsuits are often very general and difficult to evaluate at preliminary stages in the litigation process. In those cases where ALSTOM's defense has not been assumed by a third party and meaningful evaluation is practicable, the Group believes that it has valid defenses and, with respect to a number of lawsuits, the Group is asserting rights to indemnification against a third party. The Group is also subject to asbestos-related or other employee personal injury related claims in other countries, including in the UK. The Group is subject to about 145 asbestos related claims currently ongoing in the UK. The ALSTOM Group is mostly known for building the TGV, the world's fastest train, Singapore's automatic metro and almost the entire fleet of metros for the city of Paris. The Group builds power plants and has supplied around 20% of the world's total installed capacity in power generation. ALSTOM employs 75,000 people in over 70 countries worldwide. ASBESTOS ALERT: 9/11 Workers Sue EPA for Misleading Statements -------------------------------------------------------------- Several Ground Zero workers sued the federal government last Tuesday for allegedly lying about air quality after the World Trade Center attacks. The suit accuses officials of the Environmental Protection Agency of misleading the public with statements about the safety level of dangerous contaminants released into the air after the twin towers were destroyed in a terror strike. The plaintiffs say they were sent to work without proper protective gear, exposing them to PCBs, asbestos, benzene and other known carcinogens. Among those making claims are city correction officers, a National Guard medic and a city paramedic sent to help with the cleanup. A federal marshal charges he lost two months of work because of shortness of breath and other ailments triggered by his work at the site. Their attorneys are asking a judge to classify the case as a class action to include all workers sent to Ground Zero after the attacks. Among those named as defendants are former EPA director Christie Whitman and officials from the Occupational Health and Safety Administration. The lawsuit accuses Ms. Whitman of authorizing news releases in the day after the attacks that were "false and misleading." ASBESTOS ALERT: DEQ Hits Owner with $1T Fine for Unsafe Removal ---------------------------------------------------------------- For failure to follow procedures for safe asbestos removal, the Oregon Department of Environmental Quality issued a US$1,000 penalty against the owner of a property being remodeled at 232 NW Georgia in Bend. Responding to a citizen complaint in May 2004, DEQ staff discovered about 48 square feet of shattered cement asbestos board and shingles that had been removed and placed in a dumpster on the property by a person whom the owner, David Gordon of Portland, had hired. The open accumulation of asbestos-containing waste material likely released asbestos fibers in to the air, exposing neighbors and the public to asbestos. While in that friable state, it may have continued to release asbestos fibers. Laboratory analysis revealed that the cement asbestos board on Gordon's property contained 10 percent chrysotile asbestos. Asbestos fibers are a respiratory hazard proven to cause lung cancer, mesothelioma, asbestosis and other respiratory diseases; they also are a hazardous air contaminant for which there is no known safe level of exposure. To protect human health and the environment, state and federal laws set strict requirements on the removal, handling and disposal of material containing over 1 percent asbestos. An Oregon-licensed asbestos abatement contractor is required to handle the removal of friable asbestos-containing materials. A licensed asbestos abatement contractor would have wet the material during removal, placed it in leak-tight containers, clearly labeled the containers as asbestos-containing and disposed of it in a timely manner to prevent emissions of asbestos fibers into the air. Nonfriable cement asbestos board siding can be safely handled by homeowners and general contractors, provided the material is not broken and remains wetted and intact during removal, transportation and final disposal. As there are various handling and notification requirements for different types of asbestos containing materials, contacting DEQ is recommended before starting any related project. Immediately after Mr. Gordon discovered the broken cement asbestos board, he hired a licensed asbestos abatement contractor to properly dispose of all the asbestos containing waste material. Appeal procedures allow 20 days for Mr. Gordon to either pay or appeal the penalty. ASBESTOS ALERT: Death of Ex-Navy Worker Caused by Mesothelioma -------------------------------------------------------------- An inquest heard a 78-year-old Scunthorpe man died of malignant mesothelioma after years of working in asbestos-filled environments. Hubert Frederick Lacey, a retired engine driver from Grosvenor Street, passed away at Lindsey Lodge Hospice in December last year. Giving evidence at Pittwood House, Scunthorpe, his son Keith Lacey told the inquest his father had joined the Royal Navy in 1943. "He left the Royal Navy and worked on railways as a cleaner and progressed to fireman, then driver," said Mr. Lacey, a police officer. He went on to say his father was diagnosed with mesothelioma, after working in asbestos environments of lagging and insulation. Recording a verdict of death by mesothelioma, coroner Stewart Atkinson, said he was extremely cautious with asbestos. "I don't think we necessarily know enough about it but clearly he seems to be a man who more likely than not has been in an area where asbestos has been." ASBESTOS ALERT: Post Office Break-in Attempt Fosters Closure ------------------------------------------------------------ An asbestos scare at the Australian Post Office building erupted two weeks ago necessitating all staff of the Department of Ageing, Disability and Home Care to seek medical attention. The entire second floor has already been cordoned off. Fortunately, the area of the building occupied by Australia Post was not affected. Bathurst Regional Council, which owns the building, immediately alerted WorkCover about the possible presence of asbestos in the building. A WorkCover spokesman said a door was damaged during an attempted break-in on the night before the asbestos was discovered. Council was in the process of sealing the door when a fire alarm went off. The spokesman said one DADHC employee leaned up against the door, getting some asbestos particles on his clothing. Two other DADHC employees also brushed up against the door. ASBESTOS ALERT: UK Inquest Reveals Asbestos as Cause of Death ---------------------------------------------------------------- A garage owner from Welford, who suffered more than a year of pain after contracting mesothelioma, an asbestos-related cancer, finally succumbed to death last Oct. 1. David Wilshaw, 64 years old, of Headland Road, became ill in August 2003, but was not diagnosed until February 2004. At an inquest into his death, his daughter Tina Barnes said when he was diagnosed with the disease he tried to think where he could have caught it. "He could only think that it may have been from brake linings when work was being carried out at his garage," she said. A postmortem carried out by Dr. Olga Stores, consultant pathologist at Warwick Hospital, showed a tumor caused by cancer cells in his chest. Histology tests also identified the presence of asbestos fibers. The cause of death was given as mesothelioma. Warwickshire coroner Michael Coker recorded a verdict of industrial disease. ASBESTOS ALERT: Break-in Sets Off Health Scare at UK High School ---------------------------------------------------------------- A Derbyshire school reopened last Monday after an asbestos scare the previous week forced it to halt classes and send students home. More than 1,400 pupils were asked to leave the Derbyshire secondary school after it was found that asbestos had been disturbed during a break-in that night. While safety checks were carried out, the school remained closed after fears burglars may have exposed the dangerous substance in a classroom. Intruders broke into a computer suite and corridor at Mill Hill School, in Peasehill Road, Ripley, at around 4:10 a.m. A ceiling at the school was damaged after a projector was ripped out, head teacher David Anstead said. He added that there was only "a remote possibility" asbestos dust escaped. Parents were informed immediately and staff supervised students, who were unable to go home, in an uncontaminated area of the school. The area had been sealed off and licensed asbestos contractors were employed to remove the risk. Safety checks by environmental health officials have concluded that none of the fibers escaped into the corridors. Due to this asbestos presence, the school officials ready prepared an emergency plan for these rare circumstances. ASBESTOS ALERT: Officials Probe Exposure at Brisbane High School ---------------------------------------------------------------- While renovating a staff room, unwary students and teachers from a Brisbane high school risked exposure to potentially deadly asbestos materials. It was learned that in April, more than 30 students and staff at Macgregor State High on Brisbane's south side were involved in the demolition of two cement sheeting walls, not knowing that they contained the carcinogen. An anonymous tip-off about the asbestos threat alerted education officials, who continue to investigate. The Macgregor initial investigation found that two manual arts teachers and two male Year 12 students demolished the walls in the manual arts staff room. Another four teachers were in the room during the work and 23 Year 8 students, 15 boys and eight girls, transferred the materials to industrial bins. After consulting Queensland Health, principal Karyn Hart contacted each student's family to inform them of the risks to the exposure and offer access to independent health checks. Education Queensland insists there was an "extremely low risk" to those involved in the work. However, experts warn that there is no minimum safety level and inhaling just one asbestos fiber could lead to cancer. Last October 8, the Class Action Reporter published a related story that revealed Australian State Government contractor, Q- Build Industries, paid children to remove deadly asbestos materials from a worksite in Monto High School in central Queensland in September of 2002. Opposition education spokesman Rob Messenger accused Education Queensland of failing to ensure the safety and health of students and staff. "It is absolutely disgraceful that lives have been endangered on at least two occasions," he said. On November 1, Education Queensland wrote to all principals ordering that no students be involved in work that might expose them to asbestos. Macgregor Parents and Citizens Council president Andy Willows- Keetley said he was satisfied with the school's and Education Queensland's response to the incident. "Obviously it's a concern when children are exposed to any kind of danger, be it asbestos or chemicals," he said. ASBESTOS ALERT: ICI Awards GBD85T to Widow of Ex-Plumber/Welder ---------------------------------------------------------------- A widow was awarded GBD85,000 following the asbestos-related death of her husband who was exposed to asbestos in his work as a plumber and welder from 1953 to 1966 for chemical Company Imperial Chemical Industries (NYSE: ICI). Her 74-year-old husband developed mesothelioma, a cancer commonly linked to asbestos, after he worked for chemical Company ICI for 33 years. The unnamed worker, whose job included removing lagging from pipes, died in February 2002. His solicitors said that during this time, his employer failed to warn of the risk of asbestos exposure. ICI also did not provide any devices for protection. Figures have revealed that Teesside accounts for one in ten deaths from the disease in Britain. The situation is expected to get worse as more cases come to light years after workers were exposed to the deadly material. The extent of the area's industrial past was revealed after the compensation was awarded to a Redcar widow. The scale of the problem emerged as the latest case was settled out of Court. Legal executive Helen Martin, from Archers Law, of Stockton, said figures showed that Teesside has one of the worst records for mesothelioma deaths. She said, "Due to strong industrial links, Teesside already accounts for almost ten percent of these deaths in Great Britain, and this is set to rise considerably." For a long time, the dangers of asbestos use were not widely understood, but the annual total of mesothelioma deaths has increased from 153 cases in 1968 to 1,862 in 2002. Occupations with the highest risk of asbestos exposure are metal plate workers, vehicle body builders, plumbers, gas fitters, carpenters, electricians, sheet metal and construction workers, electrical engineers, plant operators and production fitters. Company Profile: Imperial Chemical Industries PLC (London: ICI) 20 Manchester Sq. London W1U 3AN, United Kingdom Phone: +44-20-7009-5000 Fax: +44-20-7009-5001 http://www.ici.com Fiscal Year-End December 2003 Sales (mil.) GBD5,865.4 1-Year Sales Growth 5.7% 2003 Net Income (mil.) GBD20.2 1-Year Net Income Growth (87.5%) 2003 Employees 35,030 Description: The ICI Group comprises the International Businesses of National Starch and Chemical Company, Quest International, Uniqema, and ICI Paints - as well as the Regional & Industrial Group, made up of businesses which are more regional in their scope with principal locations in India, Pakistan, and Argentina. ASBESTOS ALERT: DEQ Fines Crown and SMAF with More Than $71,000 ---------------------------------------------------------------- A Bend-based real estate development partnership and its contractor face more than US$71,000 in environmental fines related to the demolition of the historic Brooks-Scanlon crane shed. The Oregon Department of Environmental Quality issued a US$64,500 penalty against Crown Investment Group. It also planned to issue a US$7,200 fine against Prineville-based SMAF Construction. The agency said that the incident likely exposed employees and members of the public to asbestos contamination. At this point, the extent of the problem is unclear since Crown Investment Group and its contractor SMAF Construction never performed a required survey of the building prior to the Aug. 20 demolition. The asbestos was discovered after the fact, when an investigator from the DEQ visited the site. The agency's laboratory samples revealed parts of roofing material that contained up to an alarmingly high 45% asbestos content. This story about the unlawful tearing down of the crane shed first came out in the October 8, 2004 edition of CAR. It was reported that a Deschutes County judge had found Crown Investment Group in "willful contempt of Court" for having short-circuited the legal process when it leveled the building without the permission of the city or the Court. The Company was then ordered to pay a US$100,000 penalty, which the judge said would be used by the city to construct a memorial for the crane shed. The agency had issued multiple "notices of non-compliance" against Crown and SMAF for failing to remove asbestos from the 67-year-old building prior to the Aug. 20 demolition. The partnership also failed to secure a permit from the city for the work, which was done after dark using steel cables and bulldozers. Crown partner Jim Reckling said he hadn't seen the most recent fine, which was sent out last Monday by the Department of Environmental Quality, and didn't want to comment. "I'm not going to give you anything because I haven't seen anything. You know more about it than I do," he said. A representative at SMAF Construction said he was not aware that the Oregon DEQ was considering fines against his Company. "I'm really not sure what is coming at us. I probably should not say a hell of a lot until we know some facts," said Scott Porfily, the principal agent for SMAF Construction. Both Crown and SMAF can appeal the fines to the agency. Appeals not resolved administratively are sent to an administrative Court judge for a hearing. City Councilor John Hummel said he was pleased that the state seemed to take the asbestos issue seriously. But even as the financial penalties mount, some observers say it's not enough to deter similar abuses in the future. In fact, Crown has already submitted a redevelopment plan to the city for the crane shed site. The partnership has plans for a mixed-use retail, office and residential mall that mimic the crane shed's architectural style, including the massive domed roof. The planning commission will look at the project Dec. 13 at its regular meeting. Company Profile: SMAF Construction 2260 N.W. Industrial Park Way P.O. box 672 Prineville, OR 97754 Phone: (541) 447-5643 Fax: 541-447-2190 http://www.powellbutte.net/smafconstruction.html SMAF Construction, owned partly by former Crook County Commissioner Frank Porfily and his son, Scott Porfily, is a local construction Company, which answers to a variety of excavating needs. ASBESTOS ALERT: Transgrid Workshop Closed Due to Asbestos Find ---------------------------------------------------------------- The Transgrid workshop in Orange has been shut down due to asbestos contamination that occurred in 1986. According to testing carried out by Sydney firm, Environmental and Safety Professionals, asbestos was found in 13 of 30 dust samples taken in the McLachlan Street workshop. The report was dated March 10, 2004 but the workshop was not closed until last month. Its report said, "There is a significant amount of asbestos containing dust located predominantly around the perimeter of the workshop building and the welding bay." It further indicated that the testing was only conducted from floor level to four meters up the wall but there was likely to be more asbestos containing dust above that mark. The report concluded that the sheets represented a "low risk situation" but still necessitated a removal of the material. The asbestos-contaminated dust was found on beams, an overhead crane, a wall ledge above workbenches, on top of a brick wall and on top of an electrical box. The inspection also found damaged asbestos cement sheeting. Transgrid corporate manager Joe Zahra said the contamination occurred when the building's corrugated asbestos roof was removed in 1986. "Back in 1986 it was removed as a maintenance thing, not an asbestos thing ... [The removal] would be done vastly different today," he said. Transgrid undertook a statewide audit of sites in 2001 but the Orange workshop was not included because it was considered asbestos free after the roof was removed. Tests were undertaken in March following concerns raised by existing Transgrid employees who worked in the workshop in 1986. Since only a few people used the workshop at that time, the Company did not believe the risk merited urgency for action. Mr. Zahra said no action was taken between March and October due to the low level of risk. The Company staff had asked that the workshop be listed as an asbestos site with the Department of Health so that the department can provide monitoring and ensure that future complaints can be linked to this occurrence. Transgrid had expressed support for this listing. The workshop would remain closed indefinitely, as there was said to be an abundance of other suitable buildings at the Transgrid center. Company Profile: TransGrid 201 Elizabeth St PO Box A 1000 SYDNEY SOUTH NSW AUSTRALIA 1235 Phone: 61 2 9284 3000 http://www.transgrid.com.au/ Description: TransGrid is the owner, operator and manager of the high voltage electricity transmission system throughout New South Wales (NSW), Australia. The Company transmits electricity across NSW through 12,016 kilometers of high voltage transmission lines supported by about 20,000 structures that are made from concrete, wood or steel, along what are commonly known as easements. Its high voltage electricity system also comprises 76 substations and power station switchyards. ASBESTOS ALERT: Asbestos Fear Leads to Evacuation at HI School ---------------------------------------------------------------- Students and faculty were evacuated from a four-classroom building last Nov. 12 at a school in Honolulu County, Hawaii after asbestos was disturbed during renovations while classes were in session. Release of the deadly dust apparently occurred several weeks ago as workers were sanding and scraping the outside of Building I of the King Intermediate School in Kaneohe in preparation for painting, according to Lea Albert, complex-area superintendent for the Castle-Kahuku area. However, the school's management plan did not indicate the presence of asbestos in the paint, so classes continued in the two-story, cinder-block building while work was going on outside. Faculty members were simply asked to keep windows and doors closed. But after staff raised concerns over the dust, tests were conducted that revealed asbestos, most likely from the plaster under the paint, Ms. Albert said. The school informed the parents by letter sent through the students, announcing that asbestos had been detected. The building will be properly cleaned, sealed with a primer and repainted, and air quality will be monitored before students are allowed to return, the letter stated. "We wish to assure you that the school cares deeply for both students and employees and is taking every precaution to ensure a safe campus at King Intermediate," Ms. Albert and Principal Cynthia Chun wrote in the letter. King Intermediate, which has about 900 students, has been undergoing renovations for more than a year. 57 Builders Ltd., a private contractor, is handling the work. Company Profile: 57 Builders Ltd 2001 Kahai St Honolulu, Hawaii 96819 Phone: (808) 841-0889 New Securities Fraud Cases AUTOBYTEL INC.: Scott + Scott Lodges Securities Fraud Suit in CA ---------------------------------------------------------------- The law firm of Scott + Scott, LLC initiated a class action lawsuit in the United States District Court for the Central District of California on behalf of purchasers of Autobytel Inc. ("Autobytel") (Nasdaq:ABTL) common stock during the period between July 24, 2003 and October 21, 2004 (the "Class Period"). The complaint charges Autobytel and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Autobytel is an automotive marketing services Company that helps dealers and manufacturers through its marketing, advertising and customer relationship management tools and programs, primarily through the Internet. The Complaint alleges that during the Class Period defendants disseminated materially false and misleading statements concerning the Company's results and operations. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were that the Company inappropriately recorded revenue/income associated with its dealer sales credits and that as a result of this, the Company's financial results were materially inflated. That the Company's financial results were in violation of Generally Accepted Accounting Principles and that the Company lacked adequate internal controls to issue earnings or projection reports. Finally, that the Company was experiencing weaker than claimed customer relationship management ("CRM") revenues and zero growth in its dealer network size and that as a result of the above, the Company's financial results were materially inflated at all relevant times. On October 21, 2004, the Company revealed its third quarter 2004 financial results would be rescheduled because the Audit Committee and Board of Directors of the Company were directing an internal review of the accounting treatment of certain credits that were recognized as revenue during the preceding quarters. Upon the revelation of these illegal acts, the Company's shares fell to $6.88 from $8.81, a drop of over 28%. Autobytel Inc. will restate some previous financial statements after an internal review uncovered accounting errors. The Irvine, California Company expects to restate its financial statements for the second, third and fourth quarters of 2003, full-year 2003 and the first and second quarters of 2004. In addition, its report for the quarter ended Sept. 30, 2004 will be further delayed until the restated statements are filed. As a result, it expects to receive a notification from Nasdaq that it is not in compliance with listing requirements and that its stock may be delisted. For more details, contact Scott + Scott, LLC by Mail: 108 Norwich Avenue, Colchester, CT 06415 by Phone: 860/537-3818 or 800-404-7770 (EST) or 800-332-2259 (PST) or 619-233-4565 (California) by Fax: 860/537-4432 or by E-mail: AutobytelLitigation@scott-scott.com or nrothstein@scott-scott.com. JAKKS PACIFIC: Lasky & Rifkind Files Securities Fraud Suit in NY ---------------------------------------------------------------- The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the United States District Court for the Southern District of New York, on behalf of persons who purchased or otherwise acquired publicly traded securities of JAKKS Pacific, Inc. ("JAKKS" or the "Company") (NASDAQ:JAKK) between October 26, 1999 and October 19, 2004, inclusive, (the "Class Period"). The lawsuit was filed against JAKKS and certain officers and directors ("Defendants"). The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants issued a series of false and misleading statements during the Class Period. More specifically, the complaint alleges that the statements were false and misleading because they failed to disclose that the Company had obtained their license with World Wrestling Entertainment ("WWE") as a result of its participation in an illicit bribery scheme, and that this scheme would substantially impact the Company's past and future operating results. In response to the announcement of problems with the WWE, the price of JAKKS stock fell dramatically, falling from $24.15 on October 18, 2004 to $18.81 per share on October 19, 2004. For more details, contact Lasky & Rifkind by Phone: (800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com SEARS ROEBUCK: Squitieri & Fearon Lodges Securities Suit in IL -------------------------------------------------------------- The law firm of Squitieri & Fearon, LLP initiated a securities class action in the United States District Court for the Northern District of Illinois against Sears Roebuck & Co. on behalf of persons who sold shares of Sears securities ("Sears" or the "Company") (NYSE:S) during the period from November 8, 2004 through November 16, 2004 (the "Class Period"). The lawsuit charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period about the Company and by failing to disclose material information about the Company's plan to merge with Kmart and that when the market learned the truth, the price of Sears securities increased substantially. For more details, contact Lee Squitieri, Esq. of Squitieri & Fearon, LLP by Mail: 32 East 57th Street, 12th Floor, New York, NY 10022 by Phone: (212) 421-6492 or by E-mail: lee@sfclasslaw.com. SIRVA INC.: Milberg Weiss Lodges Securities Fraud Lawsuit in IL --------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP initiated a class action lawsuit on behalf of purchasers of the securities of Sirva, Inc. ("Sirva" or the "Company") (NYSE:SIR) between November 25, 2003 and November 9, 2004, inclusive (the "Class Period") seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action is pending in the United States District Court for the Northern District of Illinois, Eastern Division (Chicago) against defendants Sirva, Brian P. Kelley (CEO, Pres.) Joan E. Ryan (CFO), James W. Rogers (Chairman) and Richard J. Schnall (director). The complaint alleges that Sirva's financial statements issued during the class period, in its IPO prospectus, press releases, quarterly and annual SEC reports and its secondary prospectus, were materially false and misleading because: (1) Sirva's insurance and claim reserves were grossly inadequate and unreasonable and (2) as a result of the foregoing, the earnings and shareholders' equity reported by the Company were materially inflated, violated generally accepted accounting principles and failed to give a fair representation of Sirva's true results and financial condition. In addition, the complaint alleges that defendants mischaracterized Sirva's business structure, calling it "asset- light" and scalable, which (if that were true) would have given it financial flexibility, allowing it to weather lulls in business without incurring high-fixed costs. In fact, as the Company would later admit, its business, especially its European operations, were "asset-intensive" and saddled with high fixed- costs that presented a serious, but undisclosed, risk to Sirva's operations and ability to maintain profitability. On November 9, 2004, Sirva announced, in a press release discussing its third quarter 2004 results, that it would take a $15.2 million charge to bolster its insurance reserves, which severely and negatively impacted its earnings. Its insurance business had deteriorated to the point that the Company would discontinue entire lines of its insurance business. In addition, the Company also reported poor results from its European operations. In a follow-up conference call, Sirva's CEO, defendant Kelley, stated that the reason behind the disappointing European results was high fixed costs, a situation that was being remedied through a substantial restructuring. These disclosures caused Sirva's stock price to drop from $23.78 per share on November 9, 2004 to $17.95 per share on November 10, 1004, a one-day drop of 24.5%, on unusually heavy trading volume. During the Class Period, entities in which defendants Rogers and Schnall had financial and controlling interests sold 6,403,476 shares in the IPO and 15,022,831 shares in the secondary offering (21,426,307, total), thereby giving defendants a strong incentive to create the illusion that the Company's financial performance was better than it actually was. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165 by Phone: (800) 320-5081 by E-mail: sfeerick@milbergweiss.com or visit their Web site: http://www.milbergweiss.com. UNITED RENTALS: Marc S. Henzel Files Securities Fraud Suit in CT ---------------------------------------------------------------- The law offices of Marc S. Henzel initiated a class action lawsuit in the United States District Court for the District of Connecticut on behalf of all securities purchasers of United Rentals, Inc. (NYSE: URI) from October 23, 2003 through August 30, 2004 inclusive (the "Class Period"). The complaint charges United Rentals, Wayland R. Hicks, Bradley S. Jacobs, John N. Milne, and Joseph B. Sherk with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company, in an effort to generate a more favorable stock price and raise capital, manipulated its financial results through the use of restructuring charges, asset writedowns, and debt refinancing; (2) that the Company improperly delayed recognition of bad accounts receivable; (3) that as a result of these manipulations, the Company's announced financial results were in violation of Generally Accepted Accounting Principles ("GAAP"); and (4) that the Company's financial results were materially inflated at all relevant times. On August 30, 2004, United Rentals announced that it had received notice that the SEC was conducting a non-public, fact- finding inquiry of the Company. The notice was accompanied by a subpoena requesting the production of documents relating to certain of the Company's accounting records. News of this shocked the market. Shares of United Rentals fell $4.39 per share, or 21.53 percent, to close at $16.00 per share on August 30, 2004 on unusually heavy trading volume. For more details, contact the Law Offices of Marc S. Henzel by Mail 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E- Mail: mhenzel182@aol.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Seorin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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