/raid1/www/Hosts/bankrupt/CAR_Public/041130.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, November 30, 2004, Vol. 6, No. 237
Headlines
CANADA: Ontario Court Upholds Same-Sex Survivor Benefits Ruling
CENTERPOINT ENERGY: TX Overcharging Suit Moved To Federal Court
CERUS CORPORATION: Plaintiffs File Amended Securities Suit in CA
CNL HOTELS: Shareholders Launch Stock Fraud Lawsuits in M.D. FL
COPPER MOUNTAIN: Plaintiffs Dismiss Consolidated Securities Suit
COPPER MOUNTAIN: Executes Settlement For NY Securities Lawsuit
CORNELL COMPANIES: Asks TX Court To Dismiss Securities Lawsuit
DeCODE GENETICS: Asks NY Court To Approve Stock Suit Settlement
deCODE GENETICS: Shareholders Lodge Stock Fraud Suits in S.D. NY
DOBSON COMMUNICATIONS: Shareholders File Stock Fraud Suits in OK
FEDERAL MOGUL: Recalls 95T Tie Rod Assemblies For Crash Hazard
FORD MOTOR: LA State Police Mulls Dropping Crown Victoria Suit
FORD MOTOR: Lafayette City Considers Joining Crown Victoria Suit
GROUP 1: Appeals Court Reverses Consumer Suit Certification
GUITAR CENTER: Employees Commence Wage Violations Lawsuit in CA
HARLEY DAVIDSON: Recalls 464 Motorcycles Due To Crash Hazard
LOUISIANA: Court Battle To Focus On Funeral Insurance Policies
MASSACHUSETTS: Suit Filed Over Reselling Nonrefundable Tickets
MEDIA WORLD: Investors Consider Filing $40M Lawsuit in Australia
MEIJER DISTRIBUTION: Recalls 14.4T Snow Suits For Choking Hazard
NEW CENTURY: IL Court Hears Appeal of Consumer Lawsuit Dismissal
NEW CENTURY: Reaches Settlement For IL Consumer Fraud Lawsuit
NEW CENTURY: Plaintiffs Appeal CA Consumer Fraud Suit Dismissal
NEWSWEEK: Says Leeds Morelli Formidable Foe in Prejudice Cases
NORTH DAKOTA: Supreme Court To Hear Arguments Over Fuel Taxes
PROCTER & GAMBLE: Recalls 175T Vacuum Cleaners For Fire Hazard
PROPERTY CASUALTY: Lauds ISBA Opposed Rule 255 For IL Courts
PROVIDIAN FINANCIAL: CA Court OKs Securities Lawsuit Settlement
PTR INC.: SEC Sustains PA Stock Exchange Action V. Firm, Ex-VP
PROVIDIAN FINANCIAL: NY Court Grants Class Certification To Suit
SELECT MEDICAL: Stockholders Commence PA Securities Fraud Suit
SELECT MEDICAL: DE Investors Lodge Suits v. Welsh Carson Merger
SLM CORPORATION: Asks DC Court To Dismiss Consumer Fraud Lawsuit
SLM CORPORATION: Discovery Begins in Unfair Trade Practices Suit
SUMMIT PROPERTIES: Shareholders Launch NJ Suit V. Camden Merger
TRIPLEX MANUFACTURING: Recalls 3,431 Lights Due To Noncompliance
TUMBLEWEED COMMUNICATIONS: Asks NY Court To Dismiss Stock Suit
UTSTARCOM INC.: Shareholders Launch Securities Fraud Suit in ID
UTSTARCOM INC.: Working to Settle Securities Fraud Lawsuit in NY
VALICERT INC.: Working To Settle Securities Fraud Lawsuit in NY
VITALWORKS INC.: CT Court Dismisses Securities Violations Suit
WAL-MART STORES: FL Court Refuses To Certify Overtime Wage Suit
WYOMING REFINING: Law Firms Prepare Suit On 2002 Chemical Spill
ZIMBABWE: White Farmers To File Suit V. Government, U.K.
New Securities Fraud Cases
AUTOBYTEL INC.: Murray Frank Lodges Securities Fraud Suit in CA
*********
CANADA: Ontario Court Upholds Same-Sex Survivor Benefits Ruling
---------------------------------------------------------------
Ontario's Superior Court of Appeal ruled that gays and lesbians
who outlive their same-sex partners are entitled to retroactive
pension benefits, thus upholding a lower-Court ruling that the
federal government was wrong to leave the retroactive payments
out of its equality rights scheme back in 2000, the CTV.ca News
reports.
According to the Court's written ruling, "Excluding many of
those who were intended to be included is not rationally
connected to the objective of the law, which is to end the
discriminatory exclusion of same-sex partners from CPP
benefits."
"It is a victory," said Douglas Elliot, the lawyer pressing the
case, who told reporters at a news conference that this was
indeed an indisputable win. He further stated, "We are delighted
the Courts have stood up... and upheld the entitlement of gay
and lesbian same-sex survivors to the same pension benefits as
every other Canadian."
The ruling affects close to 1,500 widowed gays and lesbians
across the country, however Mr. Elliot concedes that he had not
won on all points, since the Court sided with Ottawa's decision
to withhold retroactive benefits from the estates of
approximately 200 claimants who have died since the case was
filed.
The case was about Bill C-23, which stated gays and lesbians
whose partners died before January 1998 are not entitled to
retroactive benefits. Gay activist George Hislop challenged Bill
C-23, which became a law in 2000. He had decided to pursue a
legal challenge of the benefits laws following the death of his
same-sex partner in 1986, on whom he had relied as breadwinner
for 28 years. Soon after a class action suit was filed to
challenge the 1998 cut-off, arguing benefits should be made
retroactive to April 1985, when equality on the basis of
sexuality was enshrined in the Charter of Rights and Freedoms.
In a decision that was quickly appealed by the federal and
provincial government, Ontario's Superior Court of Justice ruled
the 1998 date was discriminatory.
CENTERPOINT ENERGY: TX Overcharging Suit Moved To Federal Court
---------------------------------------------------------------
A class action lawsuit against Centerpoint Energy Inc. and its
predecessors (Reliant Energy and ARKLA Gas Co.) on behalf of
Company's customers that was filed in Texarkana, accusing them
of overcharging residential customers on both sides of the state
line and in several states, has been recently moved to federal
Court, the Texarkana Gazette reports.
As previously reported in the October 14, 2004 edition of the
Class Action Reporter, the suit against the gas companies, which
was filed in Miller County Circuit Court, alleges violations of
fraud, unjust enrichment and civil conspiracy concerning the
cost of natural gas delivered to customers. The customers are
represented by three local law firms: Patton, Roberts,
McWilliams, Greer & Capshaw; Nix, Patterson & Roach and Keil &
Goodson.
Circuit Judge Jim Hudson was assigned to the case, which
includes customers from Arkansas, Texas, Louisiana, Oklahoma,
Mississippi and Minnesota.
According to the lawsuit the issues of the case come down to:
(1) whether Centerpoint Energy and the other companies
artificially inflated the natural gas commodity costs
that were passed on to customers.
(2) whether Centerpoint Energy and the other companies
passed on to its customers fraudulently inflated costs
for natural gas.
(3) whether Centerpoint Energy and the other companies
misrepresented to its customers that it acquired
natural gas for sale to customers at the best possible
price.
However, Dennis Chambers, of Atchley, Russell, Waldrop &
Hlavinka, which is spearheading the effort for Centerpoint
Energy to fight the case recently filed a motion to have the
case moved from Miller County to the federal Court in Texarkana,
Arkansas. At least a handful of companies who had collateral
relationships with Centerpoint Energy are also joining the
effort in moving the case to federal Court.
Customers had sued some of those companies including Kinder
Morgan Texas and its sister companies. Other companies, like
Occidental Petroleum, Shell U.S. Gas & Power and Bechtel Corp.
still have to file motions moving the case to federal Court.
Plaintiffs say that the case is filed as a class action lawsuit
because they all have a similar or the same complaint against
Centerpoint Energy and that it saves them time and cost to try
it as one large suit rather than individual lawsuits.
CERUS CORPORATION: Plaintiffs File Amended Securities Suit in CA
----------------------------------------------------------------
Plaintiffs filed an amended consolidated securities class action
against Cerus Corporation and certain of its present and former
officers and directors in the United States District Court for
the Northern District of California.
In December 2003, several class actions were filed on behalf of
a purported class of persons who purchased our publicly traded
securities between October 25, 2000 and September 3, 2003. The
complaints alleged that the defendants violated the federal
securities laws by making certain allegedly false and misleading
statements regarding the compound used in the Company's red
blood cell system.
On May 24, 2004, the plaintiffs filed a consolidated complaint.
The consolidated complaint abandons the allegations raised in
the original complaints. Instead, the plaintiffs claim that the
defendants issued false and misleading predictions regarding the
initiation and completion of clinical trials, submission of
regulatory filings, receipt of regulatory approval and other
milestones in the development of the INTERCEPT Blood Systems for
platelets, plasma and red blood cells. The consolidated
complaint retains the same class period alleged in the original
complaints. The plaintiffs later filed an amended complaint in
the same court.
Plaintiffs in this litigation are Richard Laffin, Lionel Carnot
and Geatan Carnot. The suit names as defendants the Company
and:
(1) Stephen T. Isaacs
(2) Gregory W. Schafer
(3) David N. Cook
(4) John E. Hearst
(5) Howard G. Ervin
The suit is styled "In re Cerus Corporation Securities
Litigation, 03-CV-5517," filed in the United States District
Court for the Northern District of California, under Judge
Patricia V. Trumbull.
Lawyers for the defendants are Raymond M. Hasu and Terri Garland
of Morrison & Foerster LLP, 425 Market Street, San Francisco, CA
94105 USA Phone: 415/ 268-7000 Fax: 415/ 268-7522 E-mail:
Rhasu@mofo.com or tgarland@mofo.com
Lawyers for the plaintiffs are:
(1) Faruqi & Faruqi LLP, 320 East 39th Street, New York,
NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E-
mail: Nfaruqi@faruqilaw.com
(2) Lerach Coughlin Stoia Geller Rudman & Robbins (San
Diego), 401 B Street, Suite 1700, San Diego, CA, 92101,
Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
info@lerachlaw.com
(3) Lerach Coughlin Stoia Geller Rudman & Robbin (San
Francisco), 100 Pine Street, Suite 2600, San Francisco,
CA, 94111, Phone: 415.288.4545, Fax: 415.288.4534, E-
mail: info@lerachlaw.com
CNL HOTELS: Shareholders Launch Stock Fraud Lawsuits in M.D. FL
---------------------------------------------------------------
CNL Hotels & Resorts, Inc. faces two securities class actions
filed in the United States District Court for the Middle
District of Florida on behalf of purchasers of the Company's
securities.
On August 16, 2004, a shareholder filed a complaint, asserting
claims on behalf of two separate classes, those persons who
purchased shares of the Company during the class period pursuant
to certain registration statements and those persons who
received and were entitled to vote on the proxy statement dated
May 7, 2004, as amended.
The complaint alleges violations of Sections 11, 12(a)(2) and 15
of the Securities Act and Section 14(A), including Rule 14a-9
hereunder, and Section 20(A)of the Exchange Act, based upon,
among other things, allegations that:
(1) the defendants used improper accounting practices to
materially inflate the Company's earnings to support
the payment of dividends and bolster the Company's
share price;
(2) conflicts of interest and self-dealing by the
defendants resulted in excessive advisor fees,
overpayment for certain properties and the proposed
merger of the Company and CHC;
(3) the proxy statement and certain registration statements
and prospectuses contained materially false and
misleading statements; and
(4) the individual defendants and the Advisor breached
their fiduciary duties to the members of the class.
The complaint seeks, among other things, certification of the
class action, unspecified monetary damages, rescissory damages,
to nullify the various shareholder approvals obtained at the
2004 annual meeting, payment of reasonable attorneys' fees and
experts' fees, and an injunction enjoining the proposed
underwritten offering and listing until the Court approves
certain actions, including the nomination and election of new
independent directors and retention of a new financial advisor.
On September 8, 2004, a second putative class action complaint
was filed in the same Court containing allegations that are
substantially similar to those contained in the class action
lawsuit filed on August 16, 2004.
The suits are styled "Campbell v. CNL Hotels & Resorts Inc. et
al, 6:04-cv-01231-GAP-KRS" and Wong v. CNL Hotels & Resorts,
Inc. et al, 6:04-cv-01341-GAP-JGG," in the United States
District Court for the Middle District of Florida, under Judge
Gregory A. Presnell. The suits name as defendants:
(i) CNL Hotels & Resorts, Inc.
(ii) CNL Hotel Development Company
(iii) CNL Hospitality Corporation
(iv) CNL Financial Group, Inc.
(v) CNL Real Estate Group Inc.
(vi) Five Arrows Realty Securities II, LLC
(vii) CNL Hospitality Partners, L.P.
(viii) James M. Seneff, Jr.
(ix) Robert A. Bourne
(x) Thomas J. Hutchison, III
(xi) John A. Griswold
(xii) Charles E. Adams
(xiii) Lawrence A. Dustin
(xiv) Craig M. McAllister
(xv) Robert E. Parsons, Jr.
COPPER MOUNTAIN: Plaintiffs Dismiss Consolidated Securities Suit
----------------------------------------------------------------
Plaintiffs asked the United States District Court for the
Northern District of California to dismiss with prejudice the
consolidated securities class action filed against Copper
Mountain Networks, Inc. and two of its officers.
On October 20, 2000, a Copper Mountain stockholder, Ariel
Hernandez, on behalf of himself and purportedly on behalf of a
class of Company stockholders, filed a suit, alleging violations
of the federal securities laws arising out of recent declines in
the Company's stock price. Thereafter, approximately twenty-
three similar complaints were filed in the Northern District,
along with related derivative actions against certain of the
Company's current and former officers and directors in
California Superior Court (Aaron v. Gilbert, et. al.) and
Delaware.
The Complaints allege claims in connection with various alleged
statements and omissions to the public and to the securities
markets. The twenty-three Northern District Complaints have
been consolidated into a single action identified as "In re
Copper Mountain Networks Securities Litigation, case number C-
00-3894-VRW."
On June 23, 2004, the Northern District action was dismissed
with prejudice at the plaintiffs' request. Plaintiffs informed
the Court that, after additional investigation, they were unable
to identify facts necessary to support their allegations.
On November 15, 2000, a derivative complaint alleging securities
fraud against certain current and former Copper Mountain
officers and directors, titled Glassman v. Gilbert et. al, Civil
Action No. 18491-NC, was filed in the Delaware Chancery Court
based upon the same facts as those alleged In re Copper Mountain
Securities Litigation. On August 26, 2004, plaintiff
voluntarily dismissed that action.
COPPER MOUNTAIN: Executes Settlement For NY Securities Lawsuit
--------------------------------------------------------------
Copper Mountain Networks, Inc. executed the settlement for the
consolidated securities class action filed against it and
certain of its officers and directors in the United States
District Court for the Southern District of New York, now
captioned "In re Copper Mountain Networks, Inc. Initial Public
Offering Securities Litigation, Case No. 01-CV-10943."
In the amended complaint, the plaintiffs allege that the
Company, certain of its officers and directors and the
underwriters of its initial public offering (IPO) violated
section 11 of the Securities Act of 1933 based on allegations
that the Company's IPO registration statement and prospectus
failed to disclose material facts regarding the compensation to
be received by, and the stock allocation practices of, the IPO
underwriters.
The amended complaint also contains a claim for violation of
section 10(b) of the Securities Exchange Act of 1934 based on
allegations that this omission constituted deceit on investors.
The plaintiffs seek unspecified monetary damages and other
relief.
Similar complaints collectively referred to here as the "IPO
Lawsuits," were filed in the same Court against hundreds of
other public companies (Issuers) who conducted IPOs between 1998
and 2000. On August 8, 2001, the IPO Lawsuits were consolidated
for pretrial purposes before United States Judge Shira
Scheindlin of the Southern District of New York. On July 15,
2002, the Company joined in a global motion to dismiss the IPO
Lawsuits filed by all of the Issuers (among others).
On October 9, 2002, the Court entered an order dismissing the
Company's named officers and directors from the IPO Lawsuits
without prejudice, pursuant to an agreement tolling the statute
of limitations with respect to these officers and directors
until September 30, 2003. On February 19, 2003, the Court
issued a decision denying the motion to dismiss the claims
against the Company and almost all of the Issuers, and denying
the motion to dismiss the Section 10(b) claims against the
Company and many of the other issuers.
In June 2003, the Issuers reached a tentative settlement
agreement with the plaintiffs that would, among other things,
result in the dismissal with prejudice of all claims against the
issuers and their officers and directors in the IPO Lawsuits.
In addition, the tentative settlement guarantees that, in the
event that the Plaintiffs recover less than $1 billion in
settlement or judgment against the Underwriter defendants in the
IPO Lawsuits, the Plaintiffs will be entitled to recover the
difference between the actual recovery and $1 billion from the
insurers for the Issuers.
In September 2003, in connection with the tentative settlement,
those officers and directors who had entered tolling agreements
(described above) agreed to extend those agreements so that they
would not expire prior to any finalized settlement. In June
2004, the Company executed a final settlement agreement with the
plaintiffs. The settlement is still subject to a number of
conditions, including action by the Court certifying a class
action for settlement purposes and formally approving the
settlement. The Underwriter defendants have opposed both the
certification of a settlement class action and judicial approval
of the settlement.
The suit is styled, "In re Copper Mountain Networks, Inc.
Initial Public Offering Securities Litigation," related to "In
re Initial Public Offering Securities Litigation, No. 21 MC 92
(SAS)," filed in the United States District Court for the
Southern District of New York, under Judge Shira Scheindlin.
The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
CORNELL COMPANIES: Asks TX Court To Dismiss Securities Lawsuit
--------------------------------------------------------------
Cornell Companies, Inc. asked the United States District Court
for the Southern District of Texas, Houston Division to dismiss
the consolidated class action filed against it, Steven W. Logan,
its former President and Chief Executive Officer), and John L.
Hendrix, its former Chief Financial Officer.
Four federal putative class action lawsuits were initially filed
against the Company, styled as:
(1) Graydon Williams, On Behalf of Himself and All Others
Similarly Situated v. Cornell Companies, Inc, et al.,
No. H-02-0866, in the United States District Court for
the Southern District of Texas, Houston Division;
(2) Richard Picard, On Behalf of Himself and All Others
Similarly Situated v. Cornell Companies, Inc., et al.,
No. H-02-1075, in the United States District Court for
the Southern District of Texas, Houston Division;
(3) Louis A. Daly, On Behalf of Himself and All Others
Similarly Situated v. Cornell Companies, Inc., et al.,
No. H-02-1522, in the United States District Court for
the Southern District of Texas, Houston Division, and
(4) Anthony J. Scolaro, On Behalf of Himself and All
Others Similarly Situated v. Cornell Companies, Inc.,
et al., No. H-02-1567, in the United States District
Court for the Southern District of Texas, Houston
Division
The lawsuits were putative class action lawsuits brought on
behalf of all purchasers of the Company's common stock between
March 6, 2001 and March 5, 2002 and relate to the Company's
restatement in 2002 of certain financial statements. The
lawsuits involved disclosures made concerning two prior
transactions executed by the Company: the August 2001 sale
leaseback transaction and the 2000 synthetic lease transaction.
These four lawsuits were consolidated into the "Graydon
Williams" action and Flyline Partners, LP was appointed lead
plaintiff. As a result, a consolidated complaint was filed by
Flyline Partners, LP. Richard Picard and Anthony Scolaro were
also named as plaintiffs. Since then, the Court has allowed
plaintiffs to file an amended consolidated complaint.
The amended consolidated complaint alleges that the defendants
violated Section 10(b) of the Securities Exchange Act of 1934,
Rule 10b-5 promulgated under Section 10(b) of the Exchange Act,
Section 20(a) of the Exchange Act, Section 11 of the Securities
Act of 1933 and/or Section 15 of the Securities Act. The
amended consolidated complaint seeks, among other things,
restitution damages, compensatory damages, rescission or a
rescissory measure of damages, costs, expenses, attorneys' fees
and expert fees.
The suit is styled "Williams, et al v. Cornell Companies, et
al., 4:02-cv-00866," filed in the United States District Court
for the Southern District of Texas, Houston Division, under
Judge Vanessa D. Gilmore.
Lawyers for the plaintiffs are:
(1) Jan M. Adler and William S. Lerach of Lerach Coughlin
et al, 401 B St., Ste 1700, San Diego, CA 92101, Phone:
619-231-1058, Fax: 619-231-7423
(2) Dennis J. Herman of Lerach Coughlin Stoia et al LLP,
100 Pine St, Ste 2600, San Francisco, CA 94111, Phone:
415-288-4545, Fax: 415-288-4534
(3) Thomas E. Bilek, 1000 Louisiana St, Ste 1302, Houston,
TX 77002, Phone: 713-227-7720, Fax: 713-227-9404
(4) Timothy Joseph Crowley, Richard Eugene Norman, Crowley
& Douglas, 1301 McKinney, Ste 3500, Houston, TX 77010,
Phone: 713-651-1771, Fax: 713-651-1775
(5) Roger B. Greenberg, Schwartz Junell et al, 909 Fannin
Ste 2000, Houston, TX 77010, Phone: 713-752-0017, Fax:
713-752-0327 fax (fax)
E-mail: rgreenberg@schwartz- junell.com
(6) Sylvia Wahba, Milberg Weiss et al, 100 Pine St
Ste 2600, San Francisco, CA 94111 Phone: 415-288-4545
The lawyers for the defendants are:
(1) Paul R. Bessette, Michael John Biles, Jennifer Rene
Brannen, Akin Gump et al, 300 W 6th St, Ste 2100,
Austin, TX 78746, Phone: 512-499-6200, Fax: 512-499-
6290, E-mail: pbessette@akingump.com
(2) Timothy R. McCormick of Thompson & Knight, Ste 3300
1700 Pacific St, Dallas, TX 75201, Phone: 214-969-1103,
Fax: 214-880-3253
(3) Craig Louis Weinstock, Locke Liddell et al, 600 Travis,
Ste 3400, Houston, TX 77002, Phone: 713-226-1320, Fax:
713-223-3717
DeCODE GENETICS: Asks NY Court To Approve Stock Suit Settlement
---------------------------------------------------------------
deCODE genetics, Inc. is working to settle the consolidated
securities class action filed in the United States District
Court for the Southern District of New York, styled "In re
deCODE genetics, Inc. Initial Public Offering Securities
Litigation (01 Civ. 11219(SAS))," alleging violations of federal
securities laws in connection with deCODE's initial public
offering.
The suit was filed on behalf of certain purchasers of deCODE
common stock. The complaint names deCODE, two individuals who
were executive officers of deCODE at the time of its initial
public offering and the two lead underwriters for the Company's
initial public offering in July 2000 as defendants.
Similar allegations have been made in hundreds of other lawsuits
filed (many by some of the same plaintiff law firms) against
numerous underwriter defendants and issuer companies (and
certain of their current and former officers) in connection with
various public offerings conducted in recent years. All of the
lawsuits that have been filed in the Southern District of New
York have been consolidated for pretrial purposes before United
States District Judge Shira Scheindlin.
Pursuant to the underwriting agreement executed in connection
with the Company's IPO, the Company has demanded indemnification
from the Underwriter Defendants. The Underwriter Defendants
have asserted that its request for indemnification is premature.
Pursuant to an agreement the Individual Defendants have been
dismissed from the case without prejudice.
On July 31, 2003, the Company's Board of Directors (other than
Dr. Stefansson, who recused himself because he was an Individual
Defendant) approved a proposed partial settlement with the
plaintiffs in this matter, subject to a number of conditions,
including the participation of a substantial number of other
issuer defendants in the proposed settlement, the consent of
deCODE's insurers to the settlement, and the completion of
acceptable final settlement documentation. The settlement is
subject to a hearing on fairness and approval by the Court
overseeing the litigation. In conjunction with the plaintiffs,
the settling issuer defendants have filed a motion seeking the
Court's approval of the settlement.
The suit is styled, "In re deCODE genetics, Inc. Initial Public
Offering Securities Litigation," related to "In re Initial
Public Offering Securities Litigation, No. 21 MC 92 (SAS),"
filed in the United States District Court for the Southern
District of New York, under Judge Shira Scheindlin. The
plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
deCODE GENETICS: Shareholders Lodge Stock Fraud Suits in S.D. NY
----------------------------------------------------------------
deCODE genetics, Inc., its chief executive officer and its chief
financial officer face five securities class actions filed in
September and October 2004 in the United States District Court
for the Southern District of New York.
The suits allege violations of federal securities laws arising
from certain of the Company's public statements. The complaints
are brought by plaintiffs seeking to represent a purported class
consisting of all persons who purchased the Company's common
stock during the period from October 29, 2003 through August 26,
2004. The suit contends that it made misleading statements,
misrepresentations and omissions regarding its financial
performance, compliance with generally accepted accounting
principles and its internal controls.
The complaints apparently purport to connect these allegations
with the resignation of PricewaterhouseCoopers as the Company's
auditor, as noted in the Company's Form 8-K filed on August 26,
2004. The complaints all arise out of the same alleged
statements, and a motion to consolidate them before one Judge is
pending. The plaintiffs seek unspecified monetary damages and
other relief.
The suits are styled:
(1) Bassin v. deCode Genetics, Inc. et al, 1:04-cv-07050-
RJH filed 09/01/04, under Judge Richard J. Holwell
(2) Angeloni v. deCode Genetics, Inc. et al, 1:04-cv-07067-
SAS filed 09/02/04, under Judge Shira N. Scheindlin
(3) Brown v. deCode Genetics, Inc. et al, 1:04-cv-07182-
RJH, filed 09/09/04, under Judge Richard J. Holwell
(4) Hine v. deCode Genetics, Inc. et al, 1:04-cv-07361-RJH
filed 09/15/04, under Judge Richard J. Holwell
(5) Gentily v. deCode Genetics, Inc. et al., 1:04-cv-08002-
RPP, filed 10/12/04, under Judge Robert P. Patterson
DOBSON COMMUNICATIONS: Shareholders File Stock Fraud Suits in OK
----------------------------------------------------------------
Dobson Communications Corporation and certain of its officers
and directors face several securities class actions filed in the
United States District Court for the Western District of
Oklahoma. The suits allege violations of the federal securities
laws and seeking unspecified damages, purportedly on behalf of a
class of purchasers of the Company's publicly traded securities
in the period between May 19, 2003 and August 9, 2004.
In particular, the lawsuits allege:
(1) the Company concealed significant decreases in revenues
and failed to disclose certain facts about its
business, including that the Company's rate of growth
in roaming minutes was substantially declining, and
that it had experienced negative growth in October
2003;
(2) AT&T, the Company's largest roaming customer, had
notified the Company that it wanted to dispose of its
equity interest in the Company that it had held since
the Company's initial public offering, significantly
decreasing their interest in purchasing roaming
capacity from the Company;
(3) Bank of America intended to dispose of its substantial
equity interest in the Company as soon as AT&T disposed
of its equity interest in the Company;
(4) the Company had been missing sales quotas and losing
market share throughout the relevant period; and
(5) the Company lacked the internal controls required to
report meaningful financial results.
In addition, the lawsuits allege the Company issued various
positive statements concerning its financial prospects and the
continued growth in its roaming minutes, and that those
statements were false and misleading.
FEDERAL MOGUL: Recalls 95T Tie Rod Assemblies For Crash Hazard
--------------------------------------------------------------
The Federal Mogul Corporation in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation is voluntarily recalling about 95,071 Tie Rod
Assemblies.
According to the ODI, certain Federal Mogul Tie Rod Assemblies
shipped between December 3, 2003, and November 9, 2004 have a
pivot socket, which can insufficiently retain the stud. As a
result, some of these parts will exhibit premature wear and can
result in stud separation from the assembly, which could lead to
a vehicle crash.
Federal Mogul will notify its customers and provide a remedy
free of charge. The recall is expected to begin during
November/December 2004. For more details, contact NHTSA Auto
Safety Hotline: 1-888-327-4236.
FORD MOTOR: LA State Police Mulls Dropping Crown Victoria Suit
--------------------------------------------------------------
Just a week after attorneys won class action status for a
lawsuit that would include any Louisiana police department that
owns a Crown Victoria police car, State Police are taking into
consideration whether to drop the suit or not, the Associated
Press reports.
The Louisiana State Police fleet needs to replace 400 aging
Crown Victoria Police Interceptors, and Ford Motor Co. won't
sell to agencies that are suing it, thus effectively blocking
just about every law enforcement agency and municipality in
Louisiana from buying the cars.
According to attorney Mike Pulaski, Ford is trying to decide how
to apply its no-sale rule in the expanded case and that it may
mean that Ford will stop selling the cars to any agency that
doesn't opt out.
As previously reported in the September 2, 2004 edition of the
Class Action Reporter, the lawsuit is among many other class
actions in about a dozen states claiming that the model
particularly its gas tank is prone to fatal fires in rear-end
collisions, citing the deaths of 15 officers nationwide. The
lawsuits charge that Ford should pay because the cars are not as
safe as the buyers thought they were.
According to Ben Beychok, one of the attorneys who filed the
suit along with Tony Clayton and Alan Usry on behalf of the
state, "We feel we paid too much money when we bought the car
because we didn't know about the defect. The defect was never
disclosed, even though Ford knew about it years ago."
However, Ford contends that the deaths reflect officers' risky
work rather than a design flaw, and has won the only case to go
to trial so far. Despite its contention, Ford though has offered
plastic shields for the gas tank.
Former state Attorney General Richard Ieyoub filed Louisiana's
lawsuit last year on behalf of the State Police, but it has
continued under Charles Foti, who is in the unusual position of
supporting a suit as attorney general that he dropped as Orleans
Parish criminal sheriff.
Col. Henry Whitehorn, who oversees State Police, is currently
consulting with department attorneys and has not decided whether
to stay in the suit, Lt. Lawrence McLeary said.
FORD MOTOR: Lafayette City Considers Joining Crown Victoria Suit
----------------------------------------------------------------
The Lafayette City-Parish government is considering signing on
to a lawsuit filed on behalf of state troopers over Ford Motor
Co.'s Crown Victoria Interceptor, a popular law enforcement car,
which was recently certified as a class-action case, opening it
up to agencies throughout the state, the Lafayette Daily
Advertiser reports.
According to Lafayette City-Parish Risk and Insurance Supervisor
Ryan Domengeaux, they have actually purchased approximately 200
of the controversial police cars since 1992, and about 140 of
these are still in use.
Law enforcement agencies in at least nine states have filed
lawsuits against Ford, alleging that a design flaw in the
Interceptor, specifically in the location of the gas tank leads
to increased risk of an explosion in rear-end collisions. The
Louisiana lawsuit focused on a 1998 accident in which a trooper
died in an explosion after a rear-end collision. Ford attorneys
have defended the vehicles as safe and are downplaying the
alleged defects.
Although no Lafayette police cruisers have exploded due to the
alleged design flaw, Mr. Domengeaux said city-parish government
is considering joining the lawsuit if there is a prospect of
getting money to fix or replace potentially dangerous police
cars. "We are considering joining that class action if
appropriate. We have not made a final decision on that," he
said. "From a safety perspective, we are extremely concerned."
GROUP 1: Appeals Court Reverses Consumer Suit Certification
-----------------------------------------------------------
The United States Fifth Circuit Court of Appeals reversed the
certification for the federal class action filed against several
of Group 1 Automotive, Inc.'s subsidiaries, the Texas Automobile
Dealers Association (TADA) and other new vehicle dealerships in
Texas that are members of the TADA.
Two state court class action lawsuits and one federal Court
class action lawsuit have been filed, alleging that since
January 1994, Texas dealers have deceived customers with respect
to a vehicle inventory tax and violated federal antitrust and
other laws.
In April 2002, the state Court in which two of the actions are
pending certified classes of consumers on whose behalf the
action would proceed. On October 25, 2002, the Texas Court of
Appeals affirmed the trial court's order of class certification
in the state court actions. The defendant parties petitioned
the Texas Supreme Court for review of that certification
decision on appeal, and on March 26, 2004, the Court denied
those petitions. The defendant parties filed a motion for
rehearing of the denial on May 10, 2004, along with supporting
briefs. On September 10, 2004, the Texas Supreme Court denied
the motions for rehearing.
In the other action, on March 26, 2003, the Federal Court also
certified a class of consumers, but denied a request to certify
a defendants' class consisting of all TADA members. On May
19, 2003, the Fifth Circuit Court of Appeals granted permission
to appeal, and on October 5, 2004, the Fifth Circuit issued an
order reversing the District Court's certification ruling.
GUITAR CENTER: Employees Commence Wage Violations Lawsuit in CA
---------------------------------------------------------------
Guitar Center, Inc. faces a class action filed in California
State Court, for alleged violations of California's "wage and
hour" law. The plaintiff has alleged, among other things, that
the Company improperly failed to document and enforce break and
lunch periods for employees.
This litigation was recently filed and no discovery has yet
commenced, the Company said in a regulatory filing.
HARLEY DAVIDSON: Recalls 464 Motorcycles Due To Crash Hazard
------------------------------------------------------------
Harley Davidson Motor Company in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation is voluntarily recalling about 464 Year 2004 &
2005 FXD, Year 2005 FXDC, Year 2005 FXDCI, Year 2004 & 2005
FXDI, Year 2004 & 2005 FXDX, Year 2004 & 2005 FXDXI Motorcycle
components.
According to the ODI, certain aftermarket voltage regulator
covers, P/N/ 74593-04 that can be installed on 2004 and 2005
FXD, FXDX, FXDI, FXDXI Dyna Glide Motorcycles, or 2005 FXDC and
FXDXI Dyna Glide Motorcycles, may make contact with the front
fender under certain circumstances. As a result contact may
allow the cover and the fender to lock together, thereby
limiting suspension travel and steering, possible resulting in a
vehicle crash.
Harley Davidson will notify its customers and repair the
motorcycles by removing the accessory cover free of charge. The
recall is expected to begin during December 2004. For more
details, contact NHTSA Auto Safety Hotline: 1-888-327-4236 or
Harley Davidson: 1-414-343-4056.
LOUISIANA: Court Battle To Focus On Funeral Insurance Policies
--------------------------------------------------------------
Attorneys in a class action suit will appear before Judge Harry
Randow of the 9th Judicial District Court, and argue for and
against getting a recently-passed state law over the worth of
funeral insurance policies ruled as unconstitutional, the
Alexandria Town Talk reports.
According to Sen. James David Cain, D-Dry Creek, who authored
the bill passed by the Legislature this year, "I thought we were
helping people, and we did to a certain extent. But we got in
some quicksand."
The law states that funeral policies, some sold almost 60 years
ago, are worth just the face value, the monetary amount on the
policy. If a customer bought a whole-life burial policy, he paid
a certain amount each week or month until death. Some have face
values of $250 and $500, far less than the $5,000 or more that
funerals cost now.
The Louisiana funeral industry has for years fought having to
pay for what the policy described rather than the monetary limit
stated on the policy, according to Court papers. For instance,
if the policy stated that the deceased was entitled to a hearse,
embalming and a casket, those costs rose with inflation, and
funeral homes bore the brunt, Mr. Cain said. Some policyholders
were getting funerals that cost $15,000 to $20,000, Mr. Cain
adds, which was way above the cost of inflation.
Plaintiffs' attorney Robert Diliberto said the Louisiana Supreme
Court has denied attempts by the funeral home industry to fend
off class action court cases. He further states that according
to Court papers, funeral home and insurance lobbyists skirted
those rulings by pushing the law through the Legislature,
Mr. Cain, chairman of the Senate Insurance Committee, said
funeral home lobbyists misled him, as did a flawed legislative
Funeral Advisory Task Force recommendation, into authoring the
bill. "We weren't told exactly what the facts were," Mr. Cain
said. As the bill went through the legislative process, nobody
spoke against it, but then at a hearing after the bill became
law, elderly protesters packed an Insurance Committee room, Mr.
Cain further stated. Mr. Cain stated that he expects funeral
homes to honor the policies' description instead of the face-
value amount until the Courts pass judgment on the law.
MASSACHUSETTS: Suit Filed Over Reselling Nonrefundable Tickets
--------------------------------------------------------------
Airlines worldwide are allegedly ripping off passengers and the
government for more than $50 million every year in fees and
taxes they pocket after reselling nonrefundable tickets,
according to a passengers' class action lawsuit now pending in
Massachusetts claims, the Milford Daily News reports
Framingham attorney Evans J. Carter, who recently initiated the
lawsuit against 13 airlines in Middlesex Superior Court on
behalf of 16 frequent flyers said, "That seat is paid for twice
as far as these fees but they keep it." Mr. Carter is
specifically taking aim at add-ons known as the Passenger
Facility Charge User Fee (about $9), segment fees ($3.10 per
trip leg) and foreign landing taxes. A PFC is a government-
approved charge based on capital improvements at airports, a
scheme, which the Framingham attorney says keeps every airport
perpetually under construction.
Among the airlines named in the lawsuit, whose lead plaintiff is
Robert J. Harrington of Framingham, a business traveler who
forfeited a non-refundable US Airways ticket in 2002, are Delta,
American, Alaska, ATA, Continental, China Eastern, Lufthansa,
SwissAir, British Airways and Alitalia.
Give up your non-refundable seat today on one of the busiest
travel days of the year and the airline is sure to resell the
ticket for a windfall, it's a dirty little secret of the skies
that the government so far has been loathe to expose amid the
airlines' economic woes since 9/11, according to industry
experts who spoke on condition of anonymity.
The consultant called Mr. Carter's $50 million estimate for the
"unjust enrichments" too low. The source stated, "The airlines
have made a big business out of these fees," and that in fact,
an average of 26 percent of your ticket is now fees and taxes.
"They've passed so much on to consumers that it's difficult to
deduce what's a tax and what isn't," the industry consultant
added.
According to the source, the practice has gotten so out of hand
that the Department of Transportation issued a notice on
November 5 ordering airlines to stop taking out ads with eye-
popping low fares and fine print showing the real costs. DOT
said it will "no longer allow the separate listing of
'government-approved' surcharges" in fare ads.
"I understand the airlines are having their problems," Mr.
Carter said after dropping four bankrupt airlines from the
lawsuit, "however it just doesn't seem fair or right. They are
the least entitled to this money and they're the ones who keep
it."
The government also is losing out on federal excises taxes when
a seat is re-sold, the source added. "There needs to be some
clarity, some kind of policy the airlines would adopt en masse."
MEDIA WORLD: Investors Consider Filing $40M Lawsuit in Australia
----------------------------------------------------------------
Shareholders of Media World are planning to file a $40 million
class action lawsuit against the failed compression technology
Company before Christmas, following the failure of the Company's
Adams Platform compression technology, The Age reports.
The Media World shareholders told The Age that they had
contacted law firms Slater & Gordon and Maurice Blackburn
Cashman for legal advice and are seeking up to $40 million in
damages. Slater & Gordon managing partner Andrew Grech also
confirmed to The Age that the shareholders had approached his
firm several weeks ago. He also stated, "We are in the process
of investigating the matter on their behalf."
According to Mr. Grech, the group of shareholders, many of whom
have been holding onto scrip since Media World transformed from
being miner Werrie Gold four years ago, are aiming to sue the
technology's founder, Adam Clark, and the entire Media World
board including past directors.
Aside from Mr. Clark and the directors, those who verified the
compression technology for Media World's re-listing on the stock
exchange, namely American testing specialist The Tolly Group,
would also be included in the planned legal action, said Mr.
Grech. Accounting firm KPMG has also been targeted due to its
involvement in auditing the Company's April prospectus, he adds.
MEIJER DISTRIBUTION: Recalls 14.4T Snow Suits For Choking Hazard
----------------------------------------------------------------
Meijer Distribution Inc., of Grand Rapids, Michigan is
cooperating with the United States Consumer Product Safety
Commission by voluntarily recalling about 14,400 Children's Snow
Suits and Jackets.
These snowsuits and jackets have decorative compasses and corded
zipper pull tags that can come off, posing a choking hazard to
young children. The firm received one report of a young child
who removed the decorative compass from a jacket and placed a
plastic piece in her mouth. No injuries have been reported.
The children's snow suits and jackets were sold in children's
sizes 2T through 5T and 12M through 24M under the brand name,
"Falls-Creekr." The two-piece snowsuits included a jacket and
overalls. Both clothing items have a small compass attached to
the front of the jackets and were manufactured in a variety of
colors. The care label bears RN# 48711.
Manufactured in China and Philippines, the snowsuits were sold
at all Meijer retail stores in Michigan, Ohio, Indiana, Kentucky
and Illinois from August 2004 to October 2004. The snowsuits
sold for between $15 and $43.
Consumers can cut off the compasses and corded zipper pull tags
from the zipper pulls, or return the recalled snowsuits and
jackets to Meijer retailers for a refund.
Consumer Contact: Call Meijer toll-free at (866) 280-8419
anytime of visit the firm's Web site: http://www.meijer.com.
NEW CENTURY: IL Court Hears Appeal of Consumer Lawsuit Dismissal
----------------------------------------------------------------
Oral arguments on plaintiffs' appeal of the dismissal of the
class action filed against New Century Mortgage Corporation in
the Circuit Court of Cook County, Illinois, alleging violations
of the state's consumer fraud laws.
In December 2001, Sandra Barney filed the suit, alleging the
unauthorized practice of law and violation of the Illinois
Consumer Fraud Act for performing document preparation services
for a fee by non-lawyers. The suit seeks to recover the fees
charged for the document preparation, compensatory and punitive
damages, attorneys fees and costs.
The Company filed a motion to dismiss in February 2002. The
Court thereafter consolidated our case with other similar cases
filed against other lenders. In August 2002, the Court ordered
plaintiffs in all the consolidated cases to dismiss their cases
with prejudice.
The individual plaintiff filed her notice of appeal in September
2002 and the appeal was then consolidated with 36 similar cases
(Jenkins case). Appellate argument was heard on December 2,
2003. The appellate Court affirmed the dismissal of the
consolidated cases on December 31, 2003. The plaintiff then
timely filed a petition for leave to appeal the appellate
Court's decision. The Company's response to the petition was
filed in February 2004.
The Illinois Supreme Court granted leave to appeal the
consolidated cases, and consolidated the Jenkins case with a
similar appellate action also proceeding in Illinois (King
case). The plaintiffs/appellants filed their opening brief in
April 2004. The Company filed its consolidated response brief
in July 2004. The plaintiffs/appellants filed their reply brief
and oral argument was heard on September 28, 2004.
NEW CENTURY: Reaches Settlement For IL Consumer Fraud Lawsuit
-------------------------------------------------------------
New Century Mortgage Corporation reached a settlement in
principle for the class action filed in the Circuit Court of
Cook County, Chicago, Illinois seeking damages for receiving
unsolicited advertisements to telephone facsimile machines in
violation of the Telephone Consumer Protection Act, 47 U.S.C.
227, and the Illinois Consumer Fraud Act.
In April 2002, Paul Bernstein filed the suit. The plaintiffs
filed an amended complaint on May 1, 2003 and on September 18,
2003 the judge granted the Company's motion to dismiss with
respect to the Illinois Consumer Fraud Act and permitted the
plaintiff to replead on an individual, not consolidated, basis.
On September 30, 2003, the plaintiff filed a motion for class
certification and second amended complaint. The Court has
consolidated similar cases into three groups.
The Company sought and obtained an order permitting it to join
other defendants in this consolidated action and file a motion
to dismiss the second amended complaint. Oral argument on its
consolidated motion was heard on March 30, 2004. The judge
dismissed the Illinois Consumer Fraud count. At the class
certification hearing on August 10, 2004, the plaintiffs' motion
for class certification was withdrawn and the parties agreed to
a settlement in principle. Pursuant to the settlement, the
plaintiffs filed a third amended complaint seeking a nationwide
class.
NEW CENTURY: Plaintiffs Appeal CA Consumer Fraud Suit Dismissal
---------------------------------------------------------------
Plaintiffs are appealing the dismissal of a class action filed
against New Century Mortgage Corporation in the Superior Court
for Alameda County, California. The suit also named as
defendants:
(1) New Century TRS Holdings, Inc.,
(2) U.S. Bancorp,
(3) Loan Management Services, Inc., and
(4) certain individuals affiliated with Loan Management
Services
In September 2002, Robert E. Overman and Martin Lemp filed a
class action complaint, alleging violations of the California
Consumers Legal Remedies Act, Unfair, Unlawful and Deceptive
Business and Advertising Practices in violation of Business;
Professions Code 17200 and 17500, Fraud-Misrepresentation and
Concealment and Constructive Trust/Breach of Fiduciary Duty and
damages including restitution, compensatory and punitive
damages, and attorneys' fees and costs.
The plaintiffs filed an amended complaint in July 2003 and in
September 2003 the judge granted the Company's demurrer
challenging their claims in part. The Consumers Legal Remedies
claim was dismissed and the plaintiffs withdrew the Constructive
Trust/Breach of Fiduciary Duty claim.
The Company filed its answer to the plaintiffs' amended
complaint in September 2003. The Company then filed a 128.7
sanctions motion seeking dismissal of the case. On December 8,
2003, the Court granted the motion for sanctions against the
plaintiffs for filing a first amended complaint whose
allegations against New Century TRS and New Century Mortgage
were devoid of evidentiary support and ordered all those claims
stricken without prejudice.
On January 27, 2004, the Court entered a judgment of dismissal
without prejudice in the Company's favor. The plaintiffs filed
a notice of appeal on February 20, 2004 from the judgment
entered in the Company's favor and the order granting the motion
for sanctions. The plaintiffs also filed a motion with the
appellate Court to consolidate this appeal with three additional
appeals they have sought in similar cases against other lenders.
On May 28, 2004, the Court denied the motion. The
plaintiffs/appellants filed their opening brief on July 12, 2004
and the Company's response brief was filed on October 8, 2004.
NEWSWEEK: Says Leeds Morelli Formidable Foe in Prejudice Cases
--------------------------------------------------------------
A few years ago the Long Island, New York, law firm of Leeds,
Morelli & Brown, a small firm with just 15 lawyers, called Bear
Sterns saying approximately 50 minority employees at Bear
Stearns were ready to sue, possibly as a class, claiming they'd
been passed over for promotions because of their race. Leeds,
Morelli wanted $25 million, and threw in an incentive: the
alleged victims would agree to sign a waiver to drop any future
legal action.
To add pressure, Leeds, Morelli brought in legendary class
action attorney Melvyn Weiss, known for extracting huge awards
out of companies, for settlement talks, Senior Writer Charles
Gasparino reports in the December 6 issue of Newsweek (on
newsstands Monday, November 29). In the end Bear Stearns agreed
to pay $2 million, and it believed that was the last it would
hear from Leeds, Morelli. But the firm came calling again,
extracting yet another settlement out of Bear Stearns, based on
similar allegations from a different group of workers.
With its hardball approach in pressing discrimination claims,
Leeds, Morelli has become a quiet but powerful foe of Wall
Street. Newsweek reports that the firm, employing some of the
same tactics it used against Bear Sterns, has in recent years
won tens of millions of dollars in settlements by targeting many
of the biggest firms on the Street, including Prudential
Securities, JPMorgan Chase, Smith Barney and the Bank of New
York, according to people familiar with Leeds, Morelli's
actions. The cases are kept confidential as part of the
settlement deals, so nobody at those firms was willing to be
quoted by name for the report in Newsweek.
Nobody disputes that Leeds, Morelli is capitalizing on a
longstanding problem: the small number of minorities in the
brokerage business, as well as the relatively few women in
management. Many Wall Street executives say they're trying to
rectify the shortcomings. But those same executives are sharply
critical of Leeds, Morelli's methods-which include asking
current clients for names of other potential victims at their
firms. "These guys are the worst," says one Wall Street
executive who has dealt with Leeds, Morelli. "They're shakedown
artists."
The partners of Leeds, Morelli, publicly discussing their
business practices for the first time, say the criticism is
merely a sign of the firm's progress. "It's like David against
Goliath," says Lenard Leeds, a founding partner. He says Wall
Street remains a fertile area for discrimination suits because
the industry is still overwhelmingly white and male.
Not all of their clients are thrilled with their actions. Many
former clients of Leeds, Morelli, all of whom worked at
Prudential Securities, are suing the law firm, saying Leeds,
Morelli's modus operandi is to cut a lot of quick settlements,
and that the strategy has shortchanged them, but made the firm's
partners very rich. "They said I had a million-dollar case,"
says Brian Hodge, a former Prudential Securities back-office
employee who says he trained less-experienced white employees
who were then promoted over him. "But in the end, I received
$100,000, and they got a third."
Another sign of Leeds, Morelli's impact is that a once-obscure
line of insurance known as employment practices liability,
designed to guard against discrimination cases, has exploded in
popularity, and raised sharply in price. An executive at the
Chubb Group Insurance Cos. said Mr. Leeds, Mr. Morelli was a big
reason for the jump.
NORTH DAKOTA: Supreme Court To Hear Arguments Over Fuel Taxes
-------------------------------------------------------------
North Dakota's Supreme Court will hearing arguments in case
involving members of two of the state's American Indian tribes
against the state government over the alleged illegal pocketing
of more than $2 million in fuel taxes annually from tribal
members who buy gasoline on reservations by the state, the
Associated Press reports.
Both the state Tax Department and four plaintiffs in the case,
including a Mandaree road and building contractor, are
challenging rulings by Northwest District Judge Gary Holum, who
had ruled that the tax should not apply to tribal members who
buy fuel on reservations. He however has not ordered the state
to pay refunds. The judge has also declined to make the lawsuit
into a class action, which would make all tribal members who
bought gas on North Dakota reservations potentially eligible to
get their tax payments back.
The plaintiffs argued that tribal members who buy fuel on
reservations should not have to pay North Dakota's motor fuels
tax, which is 21 cents a gallon. They further claim that tribal
members pay $2.1 million annually in state fuel taxes, while the
state estimates the sum is roughly half that.
According to Dan Rouse, an assistant attorney general for the
Tax Department, no other state exempts Indians, who buy fuel on
reservations from its state tax.
The case does not affect the Standing Rock Sioux reservation,
where the tribe charges its own 21-cents-a-gallon tax on
gasoline and diesel fuel. The Tax Department administers the
tax, and the tribe collected just over $300,000 in revenue
during its last budget year.
In legal filings, the Tax Department is asking the Supreme Court
to conclude that a 1936 federal law, called the Hayden-
Cartwright Act, allows North Dakota to collect fuel taxes from
tribal members who buy gasoline on reservations.
However, the tribal members want the Supreme Court to affirm an
injunction that bars the state from keeping the fuel taxes they
pay. Three of the four plaintiffs are also challenging Judge
Holum's decision to drop them from the lawsuit, on the grounds
that the Tax Department never refused to pay them refunds.
Joan Mann, a member of the Three Affiliated Tribes, and two
Turtle Mountain Band of Chippewa members, Tracy Wilkie and
Christa Monette, were dismissed from the case earlier.
Ken Danks, owner of TEK Enterprises, a Mandaree road contractor,
was allowed to continue the lawsuit because the Tax Department
refused his request for a refund for fuel taxes he paid in 2000
and 2001.
The tribal members' attorney, Vance Gillette of Minot, argues in
a Court filing that Congress has not given explicit permission
for North Dakota to collect state fuel taxes from Indian buyers
on reservations. He further points out that the tax is
unenforceable unless there is a clear congressional
authorization for the tax. Mr. Gillette also contends the Tax
Department's appeal was filed too late, and the Supreme Court
does not have jurisdiction over it. According to his Supreme
Court filing, "The state agents refuse refunds, and attempt to
stall this case, such tactics merely delay the inevitable, and
delay justice for the Indian consumers stuck with the illegal
taxes."
Almost all North Dakota's tax collections for gasoline and
diesel fuel are used to build or repair roads. The state
Department of Transportation maintains 323 miles of roads on the
state's Indian reservations.
PROCTER & GAMBLE: Recalls 175T Vacuum Cleaners For Fire Hazard
--------------------------------------------------------------
Procter & Gamble Company (P&G), of Cincinnati, Ohio is
cooperating with the United States Consumer Product Safety
Commission by voluntarily recalling about 175,000 Sweep+Vac by
Swiffer Vacuum Cleaners.
In some cases, when the vacuum cleaner is left in the "on"
position, the rotor can lock up and cause the unit to overheat.
This poses a smoke and fire hazard. Procter & Gamble has
received 14 complaints of the Sweep+Vac overheating, including
one report of a fire with minor property damage. No injuries
have been reported.
The recalled Sweep+Vac by Swiffer is a battery-operated, upright
vacuum cleaner used to vacuum floors. The vacuum cleaner stands
about 4-feet-tall and has a green base and silver pole. The name
"Swiffer" is printed across the front of the base in white
letters. UPC numbers included in this recall are 37000-46522 and
37000-02553. The UPC numbers are printed on the product's
packaging. No other Swiffer products are involved.
Manufactured in China, the vacuum cleaners were sold at all
retail and grocery stores nationwide from September 2004 through
November 2004 for about $30.
Consumers should stop using the product immediately and
disconnect the Sweep+Vac by removing the top section of the
pole. To disconnect the vacuum cleaner, press the small green
button on the pole, about 12 inches below the handle, then pull
the handle straight out. This eliminates any possibility of the
unit overheating. Consumers should contact Procter & Gamble for
more information on returning the product to receive a refund.
For Disassembly Instructions go to
http://www.cpsc.gov/cpscpub/prerel/prhtml05/05057inst.pdf.
Consumer Contact: Consumers should contact (800) 487-5915 daily
between 9 a.m. and 6 p.m. ET or visit
http://www.swiffersweepandvac.comto receive shipping materials
to return the Sweep+Vac unit to Procter & Gamble and receive a
refund.
PROPERTY CASUALTY: Lauds ISBA Opposed Rule 255 For IL Courts
------------------------------------------------------------
The Illinois State Bar Association, according to the Property
Casualty Insurers Association of America, will likely oppose a
proposed rule change governing class action lawsuits that would
benefit Illinois consumers and businesses, the Insurance Journal
reports.
The proposed new Rule 225, which was supported by a broad
coalition of businesses, insurers and associations, including
the Illinois Civil Justice League, was unanimously rejected by
the ISBA board, whose full assembly will vote on whether to
support the proposal on Dec. 12, 2004.
According to Laura Kotelman, PCI regional manager and senior
counsel, "a class action suit can be a valuable and appropriate
litigation tool in many circumstances. However, in Illinois,
many jurisdictions have become the venue of choice for
frivolous, national class action suits that result in multi-
billion dollar awards. This proposal merely asks the Court to
ensure that the handling of class actions is fair and consistent
in every jurisdiction in Illinois and in many other states.
Approval of Rule 225 would enact meaningful reform that would
improve the practice of law in Illinois while benefiting all
consumers."
Ms. Kotelman also pointed out that the current Illinois class
action rule is not modeled after the Federal Rule of Civil
Procedure 23. Illinois does not have a superiority provision
requiring that a class action lawsuit must be "superior" to
other legal methods for the fair and efficient resolution of a
claim or controversy. Rule 225 would amend the Supreme Court
rules to include the superiority provision, and make it a
requirement.
The proposal also suggests that Illinois Courts should generally
not certify classes that substantially involve residents and
laws of other states, according to Ms. Kotelman. "We need to
defeat the perception that this is the place for 'out of state
lawyers' to seek to establish national law through Illinois
Courthouses. Let's not forget that Illinois taxpayers pay the
bill for these unwarranted class actions through the additional
costs for the operation of an already overburdened Court
system," Ms. Kotelman states.
During the recent election, Illinois proponents of class action
and tort reform backed Republican Lloyd Karmeier who handily
defeated Democrat Gordon Maag with a 54 to 46 percent margin in
a race for the Illinois Supreme Court, 5th District. This
district has long been a haven for frivolous lawsuits and
unwarranted class action suits.
"The election results demonstrate clearly that consumers in
Illinois understand this issue and want change," Ms. Kotelman
said. "Our hope is that Rule 225 will be adopted as a reform
amendment that will require all Illinois jurisdictions follow
the same class action federal rules, fair and balanced. It is
clear that the people of Illinois support that approach. PCI
hopes that the ISBA and the trial bar have heard the same
message and will react accordingly."
The Supreme Court Rules Committee is expected to make a decision
regarding this matter sometime in 2005.
PROVIDIAN FINANCIAL: CA Court OKs Securities Lawsuit Settlement
---------------------------------------------------------------
The United States District Court for the Northern District of
California granted final approval to the settlement of the
consolidated securities class action filed against Providian
Financial Corporation, styled "In re Providian Financial
Securities Litigation."
The suit alleges that the Company and certain of its officers
made false and misleading statements concerning its operations
and prospects for the second and third quarters of 2001 in
violation of federal securities laws. The class comprised those
persons or entities who acquired the Company's stock between
June 6, 2001 and October 18, 2001.
In July 2004, these actions were settled in principle on a
class-wide basis for $65 million to be funded by the Company's
insurance carriers, subject to finalization and Court approval.
The settlement received final approval from the Court in
September 2004, with approximately 14% of the settlement amount
to cover the plaintiffs' attorneys' fees and costs.
PTR INC.: SEC Sustains PA Stock Exchange Action V. Firm, Ex-VP
--------------------------------------------------------------
The Securities and Exchange Commission has sustained
Philadelphia Stock Exchange disciplinary action against PTR,
Inc., a Philadelphia floor broker and Exchange member
organization, and Dennis McBride, PTR's executive vice
president. The Exchange censured respondents, fined them
$86,000, jointly and severally, and suspended McBride from
Exchange membership or association with an Exchange member
organization for a period of three months.
The Commission found that respondents violated Exchange rules
(1) requiring that floor brokers make reasonable efforts to
ascertain whether orders submitted to them for
execution are for the account of a public customer or a
broker-dealer, and
(2) requiring that the approval of all participants in a
trade be obtained before a material change is made in
its terms.
In sustaining the Exchange's sanctions, the Commission noted
that McBride had been disciplined for similar misconduct less
than three years prior to the violations at issue. It stated
"the attitude displayed by McBride towards his regulatory
responsibilities evidences a disturbing disregard for the
standards that govern the conduct of securities professionals
doing business on the Exchange."
PROVIDIAN FINANCIAL: NY Court Grants Class Certification To Suit
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted class certification to consumer lawsuit filed
against Providian Financial Corporation, styled "Ross v. Visa,
U.S.A. Inc., et al." The suit also names as defendants Visa,
MasterCard, and a number of credit card issuing banks.
The suit, originally filed in the United States District Court
for the Eastern District of Pennsylvania, alleges that uniform
foreign currency surcharges allegedly imposed by the defendants
are the result of a conspiracy in restraint of trade and violate
the federal antitrust laws. The suit also alleges that the
defendant banks violated the Truth-in-Lending Act by failing to
separately identify these surcharges to their customers on their
monthly statements.
Similar lawsuits were subsequently filed in California and New
York. In August 2001, the Federal Judicial Panel on
Multidistrict Litigation transferred all of these cases to the
Southern District of New York. In January 2002, plaintiffs
filed an amended consolidated complaint, which the defendants
moved to dismiss. In July 2003 the Court granted the motion to
dismiss the plaintiffs' claim for actual damages under
the Truth-in-Lending Act, and denied the motion to dismiss the
plaintiffs' antitrust claims. The plaintiffs' motion for class
certification was granted on October 15, 2004. The case remains
in the discovery phase.
SELECT MEDICAL: Stockholders Commence PA Securities Fraud Suit
--------------------------------------------------------------
Select Medical Corporation faces a stockholder class action
filed in the United States District Court for the Eastern
District of Pennsylvania. The suit also names as defendants:
(1) Martin Jackson,
(2) Robert A. Ortenzio,
(3) Rocco A. Ortenzio,
(4) Patricia Rice
On August 24, 2004, Clifford C. Marsden and Ming Xu filed the
suit on behalf of the public stockholders of the Company,
alleging, among other things, failure to disclose adverse
information regarding a potential regulatory change affecting
reimbursement for the Company's services applicable to long-term
acute care hospitals operated as "hospitals within hospitals" or
as "satellites," and the issuance of false and misleading
statements about the financial outlook of the Company. The
complaint seeks, among other things, damages in an unspecified
amount, interest and attorney's fees.
SELECT MEDICAL: DE Investors Lodge Suits v. Welsh Carson Merger
----------------------------------------------------------------
Select Medical Corporation faces class actions filed in the
Court of Chancery of the State of Delaware, New Castle County,
opposing the merger between the Company and Welsh Carson
Anderson & Stowe.
On October 18, 2004, Garco Investments, LLP filed a purported
class action on behalf of the unaffiliated stockholders of the
Company. The suit also names as defendants the Company, Welsh
Carson and the Company's directors:
(1) Russell L. Carson,
(2) David S. Chernow,
(3) Bryan C. Cressey,
(4) James E. Dalton, Jr.,
(5) Meyer Feldberg,
(6) Robert A. Ortenzio,
(7) Rocco A. Ortenzio,
(8) Thomas A. Scully,
(9) Leopold Swergold, and
(10) LeRoy S. Zimmerman
The complaint alleges, among other things, that the Company's
directors violated their fiduciary duties by approving the
merger agreement before engaging in a full and fair sale process
or an active market check, and that Welsh Carson knowingly aided
and abetted the alleged breaches of fiduciary duty committed by
the director defendants. The complaint seeks, among other
things, to enjoin the defendants from consummating the merger
or, alternatively, to rescind the proposed merger in the event
it has been consummated or award rescissory damages.
On November 3, 2004, Terrence C. Davey filed a similar class
action in the same Court, on behalf of the unaffiliated
stockholders of the Company. The suit named the same defendants
and made similar claims with the prior lawsuit.
SLM CORPORATION: Asks DC Court To Dismiss Consumer Fraud Lawsuit
----------------------------------------------------------------
SLM Corporation asked the Superior Court for the District of
Columbia to dismiss the amended class action filed against it by
three Wisconsin residents over alleged excessive late fees on
loans.
The suit was filed on December 20, 2001 on behalf of all
borrowers who allegedly paid "undisclosed improper and
excessive" late fees over the past three years. The plaintiffs
sought damages of one thousand five hundred dollars per
violation plus punitive damages and claimed that the class
consisted of two million borrowers. In addition, the plaintiffs
alleged that the Company charged excessive interest by
capitalizing interest quarterly in violation of the promissory
note.
On February 28, 2003, the trial Court granted the Company's
motion to dismiss the complaint in its entirety. The Court of
Appeals affirmed the Superior Court's decision granting the
Company's motion to dismiss the complaint, but granted the
plaintiffs leave to re-plead the first count, which alleged
violations of the D.C. Consumer Protection Procedures Act.
The Court of Appeals affirmed the dismissal of the remaining two
counts with prejudice. On September 15, 2004, the plaintiffs
filed an amended class action complaint. On October 14, 2004,
the Company filed a motion to dismiss the amended complaint for
failure to state a claim and non-compliance with the Court of
Appeals' ruling.
SLM CORPORATION: Discovery Begins in Unfair Trade Practices Suit
----------------------------------------------------------------
Discovery is proceeding in the class action filed against SLM
Corporation and certain of its affiliates in the California
Superior Court for San Francisco County.
In July 2003, a borrower in California filed the suit in
connection with a monthly payment amortization error discovered
by the Company in the fourth quarter of 2002. The complaint
asserts claims under the California Business and Professions
Code and other California statutory provisions. The complaint
further seeks certain injunctive relief and restitution. On May
14, 2004, the Court issued an order dismissing two of the three
counts of the complaint.
SUMMIT PROPERTIES: Shareholders Launch NJ Suit V. Camden Merger
---------------------------------------------------------------
Summit Properties Partnership L.P. faces a class action filed in
the United States District Court for the Western District of
North Carolina, Charlotte Division by an alleged Summit
stockholder. This complaint also names as defendants Camden
Property Trust and each member of the Board of Directors of
Summit.
The suit, initially filed in the General Court of Justice,
Superior Court Division, of the State of North Carolina, County
of Mecklenburg, principally alleges that the merger and the acts
of the Summit directors constitute a breach of the Summit
defendants' fiduciary duties to Summit stockholders. The
plaintiff in the lawsuit seeks, among other things a declaration
that each defendant has committed or aided and abetted a breach
of fiduciary duty to the Summit stockholders, to preliminarily
and permanently enjoin the Merger, to rescind the Merger in the
event that it is consummated an order to permit a stockholders'
committee to ensure an unspecified "fair procedure, adequate
procedural safe-guards and independent input by plaintiff" in
connection with any transaction for Summit shares, unspecified
compensatory damages and attorneys' fees.
On November 3, 2004, Camden removed the lawsuit to the United
States District Court for the Western District of North
Carolina, Charlotte Division, and filed an Answer and
Counterclaim for declaratory judgment denying the plaintiff's
allegations of wrongdoing.
TRIPLEX MANUFACTURING: Recalls 3,431 Lights Due To Noncompliance
----------------------------------------------------------------
Triplex Manufacturing Company in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation is voluntarily recalling about 3,431 Model 9541-88
Tail Lights.
According to the ODI, certain Triples 4" round red stop and tail
lamps, P/N 9541-88, fail to comply with federal motor vehicle
safety standard no. 108, lamps, reflective devices and
associated equipment, sold for use as aftermarket and original
equipment for certain motor coaches.
As a remedy, Triplex will notify its customers and replace the
lamps free of charge. The recall is expected to begin during
December 2004. For more details, contact NHTSA Auto Safety
Hotline: 1-888-327-4236 or Triplex: 733-925-4700.
TUMBLEWEED COMMUNICATIONS: Asks NY Court To Dismiss Stock Suit
--------------------------------------------------------------
Tumbleweed Communications, Inc. asked the United States District
Court for the Southern District of New York to dismiss the
consolidated amended class action filed against it, styled "Liu
v. Credit Suisse First Boston, et alia."
The suit alleges the violation of federal and state securities
laws, purportedly on behalf of persons who acquired the common
stock of Tumbleweed (other than purchasers of Tumbleweed's
initial public offering) from August 6, 1999 to October 18,
2000.
In September 2004, the Court granted plaintiffs' motion for
leave to file a third amended complaint, and the Company filed a
motion to dismiss this case pursuant to Fed. R. Civ. P. 12(b).
An adverse outcome in this case could harm Tumbleweed's business
and operating results, the Company stated in a disclosure to the
Securities and Exchange Commission.
The suit is styled "Liu v. Credit Suisse First Boston Corp.,
1:04-cv-03757-SAS," filed in the United States District Court
for the Southern District of New York, under Judge Shira A.
Scheindlin.
Lawyer for the Company is Robert L. Dell Angelo of Munger,
Tolles & Olson LLP, 355 South Grand Avenue, 35th Floor, Los
Angeles, CA 90071-1560, Phone: (213) 683-9100, Fax:
(213) 687-3702. Lawyer for the plaintiffs is John G. Watts,
Yearout & Traylor, P.C., 800 Shades Creek Parkway, Ste 500,
Birmingham, Al 35209, Phone: (205)414-8160
UTSTARCOM INC.: Shareholders Launch Securities Fraud Suit in ID
---------------------------------------------------------------
UTStarcom, Inc. and two of its directors and/or officers face a
class action filed in the United States District Court for the
District of Idaho, purporting to assert claims under the federal
securities laws on behalf of a class of purchasers of the
Company's publicly traded securities in the period from April
16, 2003 through September 20, 2004.
The complaint refers to the Company's disclosures as to
"significant control deficiencies" related to revenue
recognition and as to the deferral of revenue recognition on a
particular transaction and the related lowering of the Company's
financial guidance. The complaint further alleges that the
defendants previously made positive statements regarding the
Company's business and financial performance that were false and
misleading because such statements failed to disclose problems
with the Company's internal controls and revenue recognition
policies and procedures and failed to disclose that the revenue
on the transaction at issue would need to be deferred, which
allegedly caused the price of the Company's publicly traded
securities to be artificially inflated. The complaint claims
that the plaintiff and other class members were damaged as a
result thereof, and seeks monetary recovery in their favor in an
unspecified amount.
UTSTARCOM INC.: Working to Settle Securities Fraud Lawsuit in NY
----------------------------------------------------------------
UTStarcom, Inc. is working to settle the consolidated securities
class action filed in the United States District Court for the
Southern District of New York against the Company, some of its
directors and officers and various underwriters for its initial
public offering.
Substantially similar actions were filed concerning the initial
public offerings for more than 300 different issuers, and the
cases were coordinated as "In re Initial Public Offering
Securities Litigation, 21 MC 92." In April 2002, a consolidated
amended complaint was filed in the matter against the Company,
captioned "In re UTStarcom, Initial Public Offering Securities
Litigation, Civil Action No. 01-CV-9604."
Plaintiffs allege violations of the Securities Act of 1933 and
the Securities Exchange Act of 1934 through undisclosed improper
underwriting practices concerning the allocation of IPO shares
in exchange for excessive brokerage commissions, agreements to
purchase shares at higher prices in the aftermarket, and
misleading analyst reports. Plaintiffs seek unspecified damages
on behalf of a purported class of purchasers of the Company's
common stock between March 2, 2000 and December 6, 2000.
The Company's directors and officers were dismissed without
prejudice pursuant to a stipulation. On February 19, 2003, the
Court granted in part and denied in part a motion to dismiss
brought by defendants including the Company. The order
dismissed all claims against the Company except for a claim
brought under Section 11 of the Securities Act of 1933, which
alleges that the Company's initial public offering registration
statement contained untrue statements of material fact and
omitted to state material facts required to be stated in the
registration statement, or necessary to make the statements
therein not misleading.
In June 2004, a stipulation of settlement and release of claims
against the issuer defendants, including the Company, was
submitted for preliminary approval by the Court. Under the
settlement, the plaintiffs will dismiss and release all claims
against participating defendants in exchange for a contingent
payment undertaking by the insurance companies collectively
responsible for insuring the issuer defendants in the
coordinated action, and the assignment or surrender to the
plaintiffs of certain claims the issuer defendants may have
against the underwriters.
Pursuant to the undertaking, the insurers would be required to
pay the amount, if any, by which $1.0 billion exceeds the total
amount ultimately collected by the plaintiffs from the non-
settling defendants in the coordinated action. The settlement
is subject to a number of conditions, including certification of
a class for settlement purposes and formal Court approval.
The suit is styled, "In re UTStarcom, Initial Public Offering
Securities Litigation, Civil Action No. 01-CV-9604," related to
"In re Initial Public Offering Securities Litigation, No. 21 MC
92 (SAS)," filed in the United States District Court for the
Southern District of New York, under Judge Shira Scheindlin.
The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
VALICERT INC.: Working To Settle Securities Fraud Lawsuit in NY
---------------------------------------------------------------
ValiCert, Inc. is working to settle the consolidated securities
class action filed against it and certain of its officers and
directors in the United States District Court for the Southern
District of New York, styled "In re Valicert, Inc. Initial
Public Offering Securities Litigation, No. 01-CV-10889 (SAS)
(S.D.N.Y.)," related to "In re Initial Public Offering
Securities Litigation, No. 21 MC 92 (SAS)."
The amended complaint is brought on purported behalf of all
persons who purchased Company common stock from the date of its
July 27, 2000 initial public offering through December 6, 2000.
It names as defendants the Company, its former chief executive
officer, its chief financial officer as well as an investment
banking firm that served as an underwriter for the IPO.
The complaint alleges liability under Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, on the grounds that the
registration statement for the IPO did not disclose that:
(1) the underwriter agreed to allow certain customers to
purchase shares in the IPO in exchange for excess
commissions to the paid to the underwriter; and
(2) the underwriter arranged for certain customers to
purchase additional shares in the aftermarket at
predetermined prices.
The complaint also appears to allege that false or misleading
analyst reports were issued. The complaint does not claim any
specific amount of damages.
Similar allegations have been made in lawsuits relating to more
than 300 other initial public offerings conducted in 1999 and
2000, all of which have been consolidated for pretrial purposes.
In February 2003, the Court issued a ruling on all defendants'
motions to dismiss, denying ValiCert's motion to dismiss the
claims under the Securities Act of 1933, but granting ValiCert's
motion to dismiss the claims under the Securities Exchange Act
of 1934.
In June 2003, ValiCert accepted a settlement proposal presented
to all issuer defendants in this case. Under the proposed
settlement, the plaintiffs will dismiss and release all claims
against the ValiCert Defendants in exchange for a contingent
payment guaranty by the insurance companies collectively
responsible for insuring the issuers in all the consolidated
cases, and the assignment or surrender of control to the
plaintiffs of certain claims the issuer defendants may have
against the underwriters. Under the guaranty, the insurers will
be required to pay the amount if any, by which $1 billion
exceeds the aggregate amount ultimately collected by the
plaintiffs from the underwriter defendants in all of the cases.
If the plaintiffs fail to recover $1 billion and payment is
required under the guaranty, Valicert would be responsible to
pay its pro rata portion of the shortfall, up to the amount of
the deductible retention under its insurance policy, which is
$500,000. The timing and amount of payments that Valicert could
be required to make under the proposed settlement will depend on
several factors, principally the timing and amount of any
payment required by the insurers pursuant to the $1 billion
guaranty. The proposed settlement is subject to approval of the
Court, which cannot be assured.
The suit is styled, "In re Valicert, Inc. Initial Public
Offering Securities Litigation, 01 Civ. 10889 (Sas)," related to
"In re Initial Public Offering Securities Litigation, No. 21 MC
92 (SAS)," filed in the United States District Court for the
Southern District of New York, under Judge Shira Scheindlin.
The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
VITALWORKS INC.: CT Court Dismisses Securities Violations Suit
--------------------------------------------------------------
The United States District Court for the District of Connecticut
dismissed the consolidated securities class action filed against
VitalWorks, Inc. and three of its individual officers and
directors.
The suit was filed on July 31, 2003, on behalf of purchasers of
the common stock of VitalWorks Inc. during the class period of
January 24, 2002 to October 23, 2002. Plaintiffs have asserted
claims against the defendants under Section 10(b) of the
Securities Exchange Act of 1934 and against the individual
defendants under Section 20(a) of the Exchange Act.
According to the Consolidated Complaint, the defendants are
alleged to have made materially false and misleading statements
during the Class Period concerning the Company's products and
financial forecasts. In addition, the Consolidated Complaint
alleges that the individual defendants acted as controlling
persons in connection with the Company's alleged securities law
violations. Compensatory damages in an unspecified amount, pre-
judgment and post-judgment interest, costs and expenses,
including reasonable attorneys' fees and experts' fees and other
costs, as well as other relief the Court may deem just and
proper are sought.
On November 14, 2003, the defendants filed with the Court a
motion to dismiss the Consolidated Complaint pursuant to Federal
Rules of Civil Procedure 12(b)(6) and (9)(b). In a decision
entered on October 1, 2004, United States District Judge Janet
Bond Arterton dismissed with prejudice the Consolidated
Complaint as to all defendants.
The consolidated suit is composed of three suits, pending under
Judge Janet Bond Arterton, styled:
(1) Pardo v. VitalWorks Inc, et al., 3:03-cv-00480-JBA
filed 03/18/03
(2) Gallo v. VitalWorks Inc, et al, 3:03-cv-00699-JBA filed
04/16/03
(3) Pincus v. VitalWorks Inc, et al., 3:03-cv-00700-JBA,
filed 04/16/03
WAL-MART STORES: FL Court Refuses To Certify Overtime Wage Suit
---------------------------------------------------------------
The 1st District Court of Appeal in Tallahassee refused to
reinstate class-action status for a lawsuit that sought to
represent 230,000 Wal-Mart Stores Inc. employees across Florida
over allegations that the retail giant forced many of them to
work without pay during breaks and after hours, the Associated
Press reports.
Though considered a clear victory for Wal-Mart, legal experts
were quick to point out that the ruling by the appeals Court did
leave the door wide open for another suit if the list of
plaintiffs is narrowed.
Lawyers for several former Wal-Mart Stores Inc. employees had
asked Circuit Judge Glenn Hess in Panama City to approve the
suit on behalf of all current and former hourly workers who had
been employed on or after July 13, 1997, however the lower Court
recently ruled that the class action should be denied since the
employee group is too broad.
According to District Judge Ricky Polston of the Court of
appeals, which upheld the lower Court's ruling, but disagreed
with Judge Hess' reasoning, "It includes members who never
worked off the clock and therefore have no interest in the
lawsuit." District Judges Peter Webster and Philip Padovano
agreed with Judge Polston opinion, however they added that the
ruling could change if the class was culled.
Judge Hess had ruled in January that a class action so large
would overwhelm the Court system as it tried to determine
damages. According to him, if a jury decided that Wal-Mart
cheated employees, thousands of separate trials then would then
have to be held to decide compensation for each worker.
Commenting on this reasoning Judge Polston wrote that the
"individualized nature of their damages claims should not bar
certification of the class."
WYOMING REFINING: Law Firms Prepare Suit On 2002 Chemical Spill
---------------------------------------------------------------
Gillette-based law firms Michaels & Michaels and the Carter Law
Office have tapped the services of Kreindler & Kreindler, the
firm that represented families of passengers of the 1996 TWA
Flight 800 disaster off Long Island, N.Y., and in the 1988 Pan
Am Lockerbie disaster to build a potential class action lawsuit
against the Wyoming Refining Co. in Newcastle, the Casper Star
Tribune reports.
Though no lawsuit has yet been filed, the firms' attorneys
stated that they are scheduling interviews and medical
examinations for Newcastle residents experiencing symptoms that
may be related to a 2002 chemical spill from the oil refinery.
According to the Carter Law Office, about 60 to 70 individuals
and families from Newcastle have indicated interest in pursuing
legal action.
In March 2002, the refinery accidentally spewed some 20 tons of
silica catalyst out of a smokestack during a 12-hour period,
blanketing a large portion of the town's residential
neighborhoods with a fine, brown dust. Dozens of residents
reported skin rashes and respiratory ailments immediately
following the spill, and now many suspect their exposure to the
chemical spill may have long-term health implications.
According to attorney Jeremy Michaels of Michaels & Michaels, "I
think, in this case, liability is abundantly clear because there
was a failure in the equipment at the refinery." Mr. Michaels
also said that the firms' potential clients report recurring
skin rashes, weeping sores, irritated throats and nasal
passages, a host of respiratory ailments and, in a few cases,
various forms of cancer.
Responding to Mr. Michaels' statement, Bob Neufeld,
environmental manager for Wyoming Refining Co., said he could
not comment on legal liability. However, Mr. Neufeld said, "The
fact is there was a malfunction at our refinery and as a result,
catalyst was released from the refinery and settled in the
neighborhoods northwest of the refinery." Furthermore, Mr.
Neufeld said that several people did take up an offer by the
Company to pay for visits to doctors immediately following the
spill, but so far, no one has made a formal request to the
refinery to pay for ongoing medical costs.
Legal experts believe that for the case to succeed, attorneys
must sort out which symptoms and ailments are likely the direct
result of an exposure to the catalyst spill. To that end,
plaintiffs must point to an analysis of the chemicals involved
in the spill. They must also extrapolate the potential future
health impacts of an exposure to make a claim for future health-
care costs.
ZIMBABWE: White Farmers To File Suit V. Government, U.K.
--------------------------------------------------------
After a four-year campaign of violent evictions in which 15
farmers have been murdered, white Zimbabwean farmers are set to
launch a œ12 billion ($22.7 billion) lawsuit against both the
British and Zimbabwean governments in international Courts,
seeking compensation for their lost farms and in damages, the
Zim Observer reports.
In what will be an unprecedented case, the farmers have tapped
the services of British law firms to bring a class action that
accuses the Zimbabwean government of human rights abuses and
failure to respect international treaties. The farmers are also
accusing the British government of reneging on agreements made
at independence in 1980.
The action emerged this weekend as England's cricketers prepared
to play the first match of what has been dubbed "the tour of
shame". Graffiti on walls near Harare sports club reading
"England go home" reflect the feeling of many towards the series
in a country whose president, Robert Mugabe, is starving his
people.
Zimbabwe, which is being described by the farmers' organization
Justice for Agriculture (Jag) as "on the threshold of genocide."
According to Pius Ncube, the Archbishop of Bulawayo, "by coming
and playing here the England cricket team are giving credibility
to this evil regime and its evil deeds." Pointing out that
President Mugabe has purged the Zimbabwean team of its most
experienced players because he wants an all-black side,
Archbishop Ncube adds, "It's no good arguing since sports and
politics don't mix. President Mugabe is patron of Zimbabwe
cricket and in this country everything is politicized."
According to John Worsley-Worsick, a spokesman for Jag, the
white farmers, who would once have crammed the stands for one of
those matches, are among the most virulently opposed to the
tour. He further adds, "To us this is yet another betrayal by
the British government."
Angry that the white farmers have often been portrayed as
villains because of their vast estates and affluent lifestyle,
Mr. Worsley-Worsick turned the blame on what for most is the
mother country. One of the triggers for land seizure, he
believes, was the British government's decision to stop funding
land reform. "By doing this they reneged on the Lancaster House
agreement signed at independence under which Britain agreed to
fund land reform unconditionally," he further adds.
Furthermore, Mr. Worsley-Worsick states, "The world saw us as
the culpable party because we had so much land, but 82% of us
purchased our land since 1980 and with full approval of the
Zimbabwe government. The problem is we inherited a colonial
system where the disparity between commercial agricultural land
and communal agricultural land was a disgrace."
President Mugabe had justified the eviction of white farmers on
the grounds that their land had been stolen in the first place,
Mr. Worsley-Worsick said.
The original white settlers were permitted by a royal charter to
explore for minerals but took land in breach of assurances given
by Queen Victoria to King Lobengula, a regional ruler, thus "we
inadvertently became the receivers of stolen property that
should have been rectified by the British government funding
land reform," Mr. Worsley-Worsick said.
According to Jag, by the time of independence, more than 37% of
the land was in the hands of white commercial farmers and in
talks that led to the Lancaster House agreement in 1979, Britain
promised to contribute generously to land resettlement, but
fifteen years later it had given a much smaller sum than
expected in Zimbabwe.
After Tony Blair came to power in 1997, the government citing a
lack of transparency, good governance and poverty alleviation
dropped the resettlement grants. "By pulling out they exposed us
terribly," said Mr. Worsley-Worsick. "They reneged on settling
their colonial culpability and that played into President
Mugabe's hands and threw us to the wolves."
Jag also stated that they have been compelled to seek redress
overseas because of the lack of justice in Zimbabwe and to that
extent have asked all the farmers to prepare extensive "loss
register" documents. So far more than 2,000 valuations have been
finished.
New Securities Fraud Cases
AUTOBYTEL INC.: Murray Frank Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Central District of California on behalf of purchasers of the
securities of Autobytel, Inc. ("Autobytel" or the "Company")
(Nasdaq:ABTLE) between July 24, 2003 and October 21, 2004,
inclusive (the "Class Period").
The Complaint alleges defendants knew or recklessly disregarded
that their statements were materially false and misleading when
made because:
(1) the Company inappropriately recorded revenue/income
associated with its dealer sales credits;
(2) as a result of this, the Company's financial results
were materially inflated;
(3) the Company's financial results were in violation of
GAAP;
(4) the Company lacked adequate internal controls to issue
earnings or projection reports;
(5) the Company was experiencing weaker than claimed CRM
revenues and zero growth in its dealer network size;
and
(6) as a result of the above, Autobytel'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. These revelations shocked the market, causing
Autobytel's share price to plummet the next day from the
previous day's close of $8.81, to close on October 22, 2004, at
$6.88, a one-day drop of nearly twenty two percent (22%) as a
result of this news.
For more details, contact Eric J. Belfi or Aaron Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.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 Se¤orin, 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.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *