/raid1/www/Hosts/bankrupt/CAR_Public/050411.mbx
C L A S S A C T I O N R E P O R T E R
Monday, April 11, 2005, Vol. 7, No. 70
Headlines
AVALONBAY COMMUNITIES: California Residents File Amended Lawsuit
CALIFORNIA: School Districts File Suit For Spanish-Language Test
CALIFORNIA: Los Angeles Sheriff Dep't Sued Over Jail Conditions
CAMDEN PROPERTY: Moves Suit V. Summit Merger To NC Federal Court
CANADA: Court Hearing Starts For Toronto Nurse's $600M SARS Suit
CARNIVAL CRUISE: Six Crewmembers Launch Overtime Wage Suit in FL
CIM INSURANCE: Firm Argues Motion For Dismissal Of IL Fraud Suit
DAIMLERCHRYSLER AG: MI Court Dismisses Lawsuit Over 1998 Merger
EBAY INC.: NY Customers Launch Fraud Suit V. Firm, Paypal, Essex
GENZYME CORPORATION: Biosurgery Shareholders Launch Fraud Suits
GTC BIOTHERAPEUTICS: Employees File Suit Due To Primedica Sale
HEALTH NET: Discovery Concludes in Consolidated ERISA Lawsuit
HILB ROGAL: JPMDL Transfers Insurance Brokers Litigation to NJ
LADISH CO.: WI Court Dismisses Consolidated Securities Lawsuit
LSG SKY: Recalls Chicken Sandwiches For Listeria Contamination
MARYLAND: Settlement Talks in Public Housing Dispute Collapses
MBNA CORPORATION: NY Court Certifies Currency Conversion Lawsuit
MONARCH CASINO: Seeking Dismissal of Consolidated NV RICO Suit
NANOPHASE TECHNOLOGIES: Working On IL Securities Suit Settlement
NANOPHASE TECHNOLOGIES: Pays Out IL Securities Suit Settlement
NAUTILUS GROUP: Files Motion To Dismiss Bowflex Suit in TX Court
NEW JERSEY: Starved Children Allowed To File Suit V. State, DYFS
NEW YORK: Wall Street Firms To Discuss Bond Offering Guidelines
PREMIERE GLOBAL: Subsidiary Faces TCPA Violations Lawsuit in MD
PRINTCAFE SOFTWARE: Reaches Settlement For PA Securities Suit
REXON INDUSTRIAL: Recalls 41T Rip Fences Due To Injury Hazard
SAFEGUARD SCIENTIFICS: Plaintiffs Appeal Suit Summary Judgment
SAWTEK INC.: Interlocutory Appeal For FL Securities Suit Stayed
SILICONIX INC.: Named As Defendant in DE Securities Fraud Suit
SOLAR INC.: Recalls 24T Flashing Pacifiers Due To Choking Hazard
TENNESSEE: Parents Testify in Lawsuit V. Alternative Schools
TITAN PHARMACEUTICALS: Securities, Derivative Lawsuits Dismissed
UICI: Plaintiffs Launch Consolidated Securities Suit in N.D. TX
USF CORPORATION: JPMDL Transfers WARN Violations Suits To E.D PA
UTAH: AG Says Utahns Eligible For $36M Remeron Court Settlement
VALASSIS COMMUNICATIONS: Plaintiffs Dismiss MI Securities Suit
WASHINGTON: Settles Braam Case, To Reform Foster Care System
WATSON PHARMACEUTICALS: Faces Antitrust Litigation Over Cipro
WATSON PHARMACEUTICALS: Plaintiffs Seek AWP Suit Certification
WATSON PHARMACEUTICALS: Faces Antitrust Suits in Various Courts
WATSON PHARMACEUTICALS: Plaintiffs Appeal CA Lawsuit Dismissal
WATSON PHARMACEUTICALS: Discovery Proceeds in Injury Suit in AR
WINTER SAUSAGE: Recalls Sausage Due To Listeria Contamination
WISCONSIN: Judge Dismisses Price-Fixing Lawsuit V. Madison Bars
New Securities Fraud Cases
BRADLEY PHARMACEUTICALS: Pomerantz Haudek Files Stock Suit in NJ
COLLINS & AIKMAN: Baron & Budd Files Securities Fraud Suit in MI
COLLINS & AIKMAN: Brain M. Felgoise Lodges Securities Suit in MI
COLLINS & AIKMAN: Marc S. Henzel Lodges Securities Lawsuit in MI
MBIA INC.: Lerach Coughlin Lodges Securities Fraud Lawsuit in NY
MBIA INC.: Marc S. Henzel Lodges Securities Fraud Lawsuit in NY
MBIA INC.: Stull Stull Lodges Securities Fraud Suit in S.D. NY
RHODIA S.A.: Lerach Coughlin Lodges Securities Fraud Suit in NJ
*********
AVALONBAY COMMUNITIES: California Residents File Amended Lawsuit
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AvalonBay Communities, Inc. faces an amended class action filed
in the California Superior Court for Los Angeles County, styled
"Julie E. Ko v. AvalonBay Communities, Inc. and Does 1 through
100."
The suit purports to be brought on behalf of all of the
Company's former California residents who, during the four-year
period prior to the filing of the suit, paid a security deposit
to the Company for the rental of residential property in
California and had a portion of the deposit withheld by the
Company, allegedly in excess of the damages actually sustained
by the Company. The plaintiff seeks compensatory and statutory
damages in unspecified amounts as well as injunctive relief,
restitution, and an award of attorneys' fees, expenses and costs
of suit.
CALIFORNIA: School Districts File Suit For Spanish-Language Test
----------------------------------------------------------------
A Salinas school district and several other districts around
California declared that they intend to file a class action
lawsuit to compel the state to test English-language learners
using Spanish-language tests, The KSBWChannel.com reports
According to the Alisal Union School District, which is one of
those who are intent on joining the suit, the state assessment
tests of students are not giving a true picture of how students
in their districts are doing, because many of the students are
English learners and don't understand English-language tests.
The districts want the state to allow them to administer tests
in Spanish, so the state can get a more accurate picture of a
student's academic performance.
Teacher Teresa Jiminez told the KSBWChannel she believes it
would level the playing field. "Our students in this district
are learning to speak English, so by the time they tested they
don't know a lot of English, yet if tested in Spanish, I'm sure
they will do much better than they do now," Ms. Jiminez said.
District officials noted that the class-action lawsuit would
enforce provisions of the federal No Child Left Behind Act,
which says students should be tested in a language most likely
to yield accurate data.
Attorneys for the districts stated that they plan to file the
lawsuit within the next two months.
CALIFORNIA: Los Angeles Sheriff Dep't Sued Over Jail Conditions
---------------------------------------------------------------
Three Los Angeles law firms launched a federal class-action
lawsuit against the Los Angeles County Sheriff's Department
alleging that unsanitary and overcrowded conditions led to an
epidemic involving more than 4,000 inmates who contracted highly
contagious staph infections, The Long Beach Press-Telegram
reports.
Attorney Cynthia Anderson-Barker told the Press-Telegram, "They
are forced to sleep on the floors or on benches without bedding
material. They eat and sleep in vermin-infested and unsanitary
and unsafe conditions. They sleep on the floor close to where
the toilets are overflowing. It all facilitates the spread of
infectious diseases."
Court documents revealed that last January, Los Angeles County
health officials said methicillin-resistant staphylococcus
aureus was spreading rapidly in the jails and the community. The
noted that it posed a growing threat to public health.
CAMDEN PROPERTY: Moves Suit V. Summit Merger To NC Federal Court
----------------------------------------------------------------
Camden Property Trust removed the shareholder class action filed
against it to the United States District Court for the Western
District of North Carolina, Charlotte Division. The suit also
names as defendants Summit Properties, Inc. and Summit's board
of directors.
On October 6, 2004, a purported class action complaint was filed
in the General Court of Justice, Superior Court Division, of the
State of North Carolina, County of Mecklenburg, by an alleged
Summit stockholder. This complaint 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:
(1) a declaration that each defendant has committed or
aided and abetted a breach of fiduciary duty to the
Summit stockholders,
(2) to preliminarily and permanently enjoin the Merger,
(3) to rescind the Merger in the event that it is
consummated,
(4) 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,
(5) unspecified compensatory damages and
(6) attorneys' fees.
On November 3, 2004, the Company 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.
CANADA: Court Hearing Starts For Toronto Nurse's $600M SARS Suit
----------------------------------------------------------------
In a recent hearing, Douglas Elliott, the lawyer at the helm of
a class action suit by a nurse infected with SARS two years ago
argued before the court that the public has every right to sue
the government if it suspects mistakes were made that may have
threatened its safety, The Canadian Press reports.
During the hearing, Mr. Elliott compared Toronto's 2003 SARS
outbreak to the tainted-water tragedy of Walkerton, Ontario,
where seven people died and thousands more fell ill five years
ago after drinking water contaminated with E. coli bacteria. In
such cases, according to Mr. Elliot, whose client, Toronto nurse
Andrea Williams, fell ill during a hospital visit in May 2003,
public health officials who make mistakes need to be held
accountable to the public and to victims, said Mr. Elliott. Mr.
Elliott told Superior Court Justice Maurice Cullity, who is
being asked to certify the $600-million class action, "Sometimes
public offices do not exercise reasonable duty of care ... and
this can result in disease and death."
As previously reported in the April 7, 2005 edition of the Class
Action Reporter, Ms. Williams, a nurse at North York General
Hospital, launched the $600 million suit against the province of
Ontario, the federal government and the city of Toronto last
year. In her suit, Ms. Williams alleges that officials,
believing the end of the outbreak to be at hand, ceased
protective measures for health-care workers when they ought to
have known the risk and potential for another fatal flare-up of
the disease.
Mr. Elliot argued before Justice Cullity, "Protection of the
public is a unique responsibility and one of the fundamental
duties of government. It was clearly irrational to declare an
end to an epidemic that had not ended." He further argued,
suggestions that public health authorities can't be held
responsible to provide a duty of care are false, noting that
public health officials were targeted by legal action last year
for their handling of the spread of West Nile virus.
For their part, federal lawyers tried to persuade Justice
Cullity to dismiss the suit, saying that the government isn't to
blame for Ms. Williams falling ill because neither hospital
infection protocols nor hospital-based illnesses in general fall
within the federal government's jurisdiction.
SARS though eventually claimed the lives of 44 Canadians, all of
them in the Toronto area.
Mr. Elliott said that protection of public health took a back
seat to political considerations on April 23, 2003, when the
World Health Organization issued a travel advisory urging people
to avoid nonessential visits to Toronto, the Canadian Press
states. The three levels of government "knew or ought to have
known" that due to the SARS incubation period, failing to
eradicate SARS would result in a resurgence of the disease, the
statement of claim alleges. It continues on to say that their
efforts shifted prematurely from controlling the outbreak to
dealing with the economic fallout in Toronto and "restoring the
public image." It is worth noting though that under Canadian
law, statements of claim contain allegations that have not been
proven in court.
Outside the courthouse, Mr. Elliott took particular aim at the
government of Ontario for "micromanaging" the handling of the
epidemic to the point of "true minutia." He referred to a high-
level provincial directive to hospitals on infection control
that explained the proper way to clean a bedpan and dispose of
urine. He told the Canadian Press, "Cleaning bedpans is
operational. It has nothing to do with policy."
The class action has yet to be certified, and lawyers
representing all three levels of government will make
submissions over the next week in an effort to quash the suit
before it begins.
CARNIVAL CRUISE: Six Crewmembers Launch Overtime Wage Suit in FL
----------------------------------------------------------------
Six Carnival Cruise Lines crewmembers launched a lawsuit seeking
class action status against the Miami-based company for unpaid
overtime, The Miami Herald reports. The suit, which was filed
last month in U.S. District Court in Miami, Florida was revealed
in a recent Carnival Corporation filing to the Securities and
Exchange Commission.
According to filing, the suit seeks as much as millions of
dollars in back pay, penalty wages and interest for current and
former crewmembers. The suit alleges that the crewmembers
typically worked 12- and 14-hour days, but were not paid for
work in excess of 10 hours a day or 70 hours per week. The six
crew members from Nicaragua, Romania, Bulgaria and India work
onboard four Carnival Cruise Lines ships as waiters, galley
stewards and cabin attendants. Julio Ayala, the attorney with
the Crewmember and Maritime Advocacy Center in Miami who
represents the crewmembers told the Herald, "Under a variety of
ways, they are cheating these crew members out of overtime pay."
Though Carnival spokesman Tim Gallagher declined to comment on
the allegations, he told the Herald, "We believe we have
meritorious defenses, and we intend to vigorously defend against
this action."
Mr. Ayala alleges that to avoid paying overtime, the supervisors
would tell crewmembers that if they were going to exceed 10
hours they should clock out and then report back to work. He
also alleges that supervisors deleted hours from workers' time
records to show they only worked 10 hours. The crewmembers'
employment contract allegedly says a week of work consists of 42
hours of base time and 28 hours of overtime, for a total of 70
hours per week. Therefore, the suit alleges that any work
exceeding 70 hours would entitle the crew members to extra
overtime pay.
CIM INSURANCE: Firm Argues Motion For Dismissal Of IL Fraud Suit
----------------------------------------------------------------
CIM Insurance of Southfield, Michigan is set to appear before
court on April 15 to argue its motion to dismiss a class action
complaint in front of Madison County Circuit Judge Nicholas
Byron, The Madison County Record reports. Represented by
Stephen Mudge of Reed, Armstrong, Gorman, Mudge and Morrissey of
Edwardsville, CIM is accused of violating the Illinois Consumer
Fraud Act.
Armettia Peach, who is represented by Daniel Cohen of The Lakin
Law Firm in Wood River, filed the class action complaint against
the insurance company in September 2002, over its sale of
extended protection plans. The six-count suit seeks up to
$75,000 per count, per class member.
In her suit, Ms. Peach alleges the insurance company
misrepresented itself when it said that it would receive the
full amount paid for an "Extended Protection Plan," (EPP), in
fact, according to her, Enterprise Car Sales in Glen Carbon,
which acted as an agent for CIM, where she purchased a vehicle
kept some of the money. Thus, Ms. Peach claims that the
protection plan contract was "inherently deceptive" because it
falsely leads consumers to believe EPPs are "pass through"
charges paid to CIM.
Furthermore, the complaint itself states, "Listing the cost of
the EPP in conjunction with other non-negotiable items (such as
licenses and taxes) suggests that charges for EPPs are similar
in nature and thus non-negotiable pass through charges."
DAIMLERCHRYSLER AG: MI Court Dismisses Lawsuit Over 1998 Merger
---------------------------------------------------------------
A federal court has rejected a lawsuit by billionaire investor
Kirk Kerkorian over the 1998 merger that U.S.-German automaker
DaimlerChrysler AG, which claims that company deceptions cost
him more than $1 billion, The Associated Press reports.
Mr. Kerkorian had sued DaimlerChrysler in 2000, alleging that
DaimlerBenz engineered a takeover of Chrysler Corporation in
1998, and then cheated him out of billions by casting the deal
as a merger of equals. The 87-year-old billionaire, who,
according to the latest list compiled by Forbes, has an
estimated net worth of $8.9 billion, contended that DaimlerBenz
saved billions on the transaction price by not pursuing a true
acquisition of the company.
DaimlerChrysler vehemently insisted that the merger was one of
equals and that Mr. Kerkorian, whose Tracinda Corporation was
Chrysler's largest shareholder at the time, grew disgruntled
when the stock price fell, AP reports.
In the recently released decision, U.S. District Judge Joseph
Farnan Jr. wrote, "After considering the evidence adduced at
trial, including the testimony of Mr. Kerkorian and other
Tracinda representatives, the Court finds that the corporate
governance issues, including the 'merger of equals' label, the
selection of the German AG form, and the voting status of
members of the management, were not significant to Tracinda."
The bench trial in Wilmington, Delaware had ended in February
2004.
In a news release, DaimlerChrysler Chairman Jurgen E. Schrempp
said the Company was pleased with the court's decision because
it confirmed, "once and for all, that the Tracinda case lacked
any merit and that all claims against DaimlerChrysler relating
to the 1998 merger were completely baseless," AP reports.
In a statement from Los Angeles, Tracinda attorney Terry
Christensen said the company was "clearly disappointed" with the
judgment, however the he added, "we are pleased that other
DaimlerChrysler shareholders who followed Tracinda's lead and
filed lawsuits based on our exact claims and key discovery were
successful in reaching a settlement with DaimlerChrysler."
As previously reported in the August 26, 2003 edition of the
Class Action Reporter, DaimlerChrysler, the world's fifth-
largest automaker had agreed to pay $300 million to settle an
investors class action that alleged Daimler-Benz AG
misrepresented the takeover of the American company as a "merger
of equals," when in fact Chrysler would be a subsidiary of
Daimler. "DaimlerChrysler admitted they did not want a jury to
hear those claims," Mr. Christensen pointed. "It is obvious that
as an individual shareholder, Tracinda was held to a different
standard."
Mr. Kerkorian was more pointed in his response to the verdict,
AP states, saying, "The Americans were laughed at in the German
Board meetings for having agreed to become a German corporation.
Daimler management marveled at the success of their project
Blitz and the takeover of an American icon."
EBAY INC.: NY Customers Launch Fraud Suit V. Firm, Paypal, Essex
----------------------------------------------------------------
Eleven shoppers from New York launched a class-action lawsuit
against eBay Inc., alleging that the online auction powerhouse
and its electronic payment subsidiary failed to grant refunds
when products weren't delivered or were defective, The
Associated Press reports.
Specifically, the disgruntled customers have sued eBay, PayPal
and the Essex Technology Group for breach of contract,
fraudulent inducement and violations of the Racketeer Influenced
and Corrupt Organizations Act (RICO).
Essex Technology is a Nashville, Tennessee-based electronics
liquidator that is very popular with eBay buyers looking for
cut-rate prices on overstocked and discounted laptops, gaming
equipment, digital cameras and other equipment.
Manhattan attorney Marina Trubitsky on behalf of class-action
customers, according to Newsday, filed the case last month in
New York State Supreme Court. The suit is actually based in
part on findings in a New York case against PayPal last year.
That's when New York Attorney General Eliot Spitzer said PayPal
made it tough for shoppers to get a refund on defective or
undelivered merchandise. A.G. Spitzer's investigators revealed
that PayPal's user agreement misrepresented certain terms and
conditions. San Jose, California-based eBay paid $150,000 to
settle that case.
GENZYME CORPORATION: Biosurgery Shareholders Launch Fraud Suits
---------------------------------------------------------------
Genzyme Corporation continues to face four class actions filed
in Massachusetts and New York regarding the exchange of all of
the outstanding shares of Biosurgery Stock and Molecular
Oncology Stock for shares of the Company's stock. Each of the
suits was filed on behalf of holders of Biosurgery Stock.
The first case, filed in Massachusetts Superior Court in May
2003, alleged a breach of the implied covenant of good faith and
fair dealing in the Company's charter and a breach of its board
of directors' fiduciary duties. The plaintiff in this case
sought an injunction to adjust the exchange ratio for the
tracking stock exchange. The Court dismissed the complaint in
November 2003, but the plaintiff in this case has appealed this
dismissal. This appeal was argued before the Massachusetts
Appeals Court in March 2005 and the Company is awaiting the
Appeals Court's ruling.
Two substantially similar cases were filed in Massachusetts
Superior Court in August and October 2003. These cases were
consolidated in January 2004, and in July 2004, the consolidated
case was stayed pending disposition of a fourth case, which was
filed in the U.S. District Court for the Southern District of
New York in June 2003. This case alleges violations of federal
securities laws, common law fraud, and a breach of the merger
agreement with Biomatrix in addition to the state law claims
contained in the other cases. The plaintiffs are seeking an
adjustment to the exchange ratio, the rescission of the
acquisition of Biomatrix, and unspecified compensatory damages.
GTC BIOTHERAPEUTICS: Employees File Suit Due To Primedica Sale
--------------------------------------------------------------
GTC Biotherapeutics, Inc. faces a class action filed by two
employees of one of its former subsidiaries in the Court of
Common Pleas for Philadelphia County in Pennsylvania seeking
damages, declaratory relief and certification of a class action
relating primarily to their GTC stock options.
The claims arise as a result of the Company's sale of Primedica
Corporation to Charles River Laboratories International, Inc. in
February 2001, which the Company believes resulted in the
termination of Primedica employees' status as employees of the
Company or its affiliates and termination of their options. The
plaintiffs contend that the sale of Primedica to Charles River
did not constitute a termination of their employment with the
Company or its affiliates for purposes of our equity incentive
plan and, therefore, that the Company breached its contractual
obligations to them and other Primedica employees who had not
exercised their stock options. The complaint demands damages in
excess of $5 million, plus interest.
HEALTH NET: Discovery Concludes in Consolidated ERISA Lawsuit
-------------------------------------------------------------
Discovery has concluded in the consolidated class action filed
against Health Net, Inc. on behalf of a class of subscribers in
a number of its large and small employer group plans in
Northeast America.
Two suits, styled "McCoy v. Health Net, Inc. et al.," and
"Wachtel v. Guardian Life Insurance Co." were initially filed
and later consolidated on April 23, 2003. These two cases have
been consolidated for purposes of trial.
Plaintiffs allege that the Company, Health Net of the Northeast,
Inc. and Health Net of New Jersey, Inc. violated the Employee
Retirement Income Security Act (ERISA) in connection with
various practices related to the reimbursement of claims for
services provided by out-of-network providers. Plaintiffs seek
relief in the form of payment of benefits, disgorgement,
injunctive and other equitable relief, and attorneys' fees.
During 2001 and 2002, the parties filed and argued various
motions and engaged in limited discovery. On April 23, 2003,
plaintiffs filed a motion for class certification seeking to
certify a nationwide class of Health Net subscribers. We opposed
that motion and the Court took it under submission. On June 12,
2003, the Company filed a motion to dismiss the case, which was
ultimately denied. On August 8, 2003, plaintiffs filed a First
Amended Complaint, adding Health Net, Inc. as a defendant and
expanding the alleged violations. On December 22, 2003,
plaintiffs filed a motion for summary judgment on the issue of
whether Health Net utilized an outdated database for calculating
out-of-network reimbursements, which the Company opposed. That
motion, and various other motions seeking injunctive relief and
to narrow the issues in this case, are still pending.
On August 5, 2004, the District Court granted plaintiffs' motion
for class certification and issued an Order certifying a
nationwide class of Health Net subscribers who received medical
services or supplies from an out-of-network provider and to whom
Defendants paid less than the providers' actual charge during
the period from 1997 to 2004. On August 23, 2004, the Company
requested permission from the Court of Appeals for the Third
Circuit to appeal the District Court's class certification Order
pursuant to Rule 23(f) of the Federal Rules of Civil Procedure.
On November 14, 2004, the Court of Appeals for the Third Circuit
granted our motion to appeal. On March 4, 2005, the Third
Circuit issued a briefing and scheduling order for our appeal
that calls for the Company's opening brief to be filed on or
before April 13, 2005. Meanwhile, Plaintiffs have filed a
motion to further amend their complaint to add additional class
representatives. Discovery concluded on March 10, 2005. A
pretrial hearing is set for May 6, 2005. No trial date has been
set.
HILB ROGAL: JPMDL Transfers Insurance Brokers Litigation to NJ
--------------------------------------------------------------
The Judicial Panel on Multi-District Litigation (JPMDL) ordered
the centralization and transfer of a class action filed against
Hilb Rogal & Hobbs Co. by Opticare Health Systems, Inc. to the
United States District Court for the District of New Jersey.
OptiCare Health filed the suit in August 2004 in the U.S.
District Court for the Southern District of New York
(Case No. 04-CV-06954) against a number of the country's largest
insurance brokers, including the Company, and several large
commercial insurers. In the amended complaint, the plaintiff
alleges, among other things:
(1) that the broker defendants engaged in improper steering
of clients to the insurer defendants for the purpose of
obtaining undisclosed additional compensation in the
form of commissions from insurers;
(2) that the defendants were engaged in a bid-rigging
scheme involving the submission of false and/or
inflated bids from insurers to clients; and
(3) that the broker defendants entered into unlawful tying
arrangements to obtain reinsurance business from the
defendant insurers.
The plaintiff alleges violations of federal and state antitrust
laws, conspiracy and violation of 18 U.S.C. 1962(c) and (d),
fraudulent concealment, misrepresentation, breach of fiduciary
duty, unjust enrichment and violation of state unfair and
deceptive practices statutes. The plaintiff seeks monetary
relief, including treble damages, an injunction, costs and other
relief.
On February 17, 2005, the JPMDL ordered that this case, along
with three other purported antitrust class actions filed in New
York, New Jersey and Pennsylvania against industry participants,
be centralized and transferred to the U.S. District Court for
the District of New Jersey.
In December 2004, two other purported class action suits were
filed in the U.S. District Court for the Northern District of
Illinois, Eastern Division, by Stephen Lewis (Case No. 04-C-
7847) and Diane Preuss (Case No. 04-C-7853), respectively,
against certain insurance brokers, including the Company, and
several large commercial insurers. Neither complaint has been
served on the Company.
In the complaints, plaintiffs allege, among other things, that
the defendants were involved in a scheme to manipulate the
market for commercial insurance by steering clients to the
insurer defendants for the purpose of obtaining undisclosed
additional compensation in the form of commissions from insurers
and by engaging in a bid-rigging scheme using false and/or
inflated bids from insurers to clients. The plaintiffs allege
violations of federal and state antitrust laws, conspiracy and
violation of 18 U.S.C. 1962(c) and (d), fraudulent concealment,
misrepresentation, breach of fiduciary duty, unjust enrichment
and violation of state unfair and deceptive practices statutes.
The plaintiffs seek monetary relief, including treble damages,
an injunction, costs and other relief.
These two lawsuits were not specifically identified in the order
issued by the JPMDL transferring the OptiCare litigation to the
U.S. District Court for the District of New Jersey, as noted
above, but the JPMDL noted in its order that additional related
actions had been filed in certain other jurisdictions, including
cases in the Northern District of Illinois, and that those
actions would be treated as potential "tag-along" actions.
Accordingly, the Lewis and Preuss cases also may be subject to
transfer by the JPMDL.
The OptiCare suit is styled "In Re Insurance Brokerage Antitrust
Litigation, case no. 2:05-cv-01168-FSH," filed in the United
States District Court in New Jersey, under Judge Faith S.
Hochberg. Representing the Company is Shawn Patrick Regan,
HUNTON AND WILLIAMS, 200 Park Avenue, New York, NY 10166 Phone:
212-309-1046.
Representing the plaintiffs are Joseph P. Guglielmo and Edith M.
Kallas, MILBERG WEISS BERSHAD & SCHULMAN LLP (NYC) One
Pennsylvania Plaza, New York NY 10119 Phone: 212-594-5300; and
Mark C. Rifkin, WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP, 270
Madison Avenue, New York, NY 10016 Phone: 212 545-4600 E-mail:
rifkin@whafh.com.
LADISH CO.: WI Court Dismisses Consolidated Securities Lawsuit
--------------------------------------------------------------
The United States District Court for the Eastern District of
Wisconsin's dismissal of the securities class action filed
against Ladish Co., Inc. is deemed final after plaintiffs didn't
file an appeal.
The suit, styled "Dean v. Ladish Co., Inc., et. al., Case No.
03-C-0165," also names two Company officers as defendants and
includes claims under the federal securities laws and state
common law. The suit seeks damages for stockholders who
purchased the common stock of the Company between March 10, 1998
and September 27, 2002, according to an earlier Class Action
Reporter story (April 3,2003) story. The complaint's
allegations, which the Company disputed, were based primarily on
accounting issues relating to the Company's restatement in 2002.
The suit is styled "Dean v. Ladish Company, Inc., case no. 2:03-
cv-00165-RTR," filed in the United States District Court for the
Eastern District of Wisconsin, under Judge Rudolph T. Randa.
The Company is represented by Brian Cothroll, Douglas Hagerman,
Andrew J. Wronski, Foley & Lardner LLP 777 E Wisconsin Ave - Ste
3200 Milwaukee, WI 53202 Phone: 414-271-2400 Fax: 414-297-4900
E-mail: bcothroll@foley.com, dhagerman@foley.com or
awronski@foley.com.
LSG SKY: Recalls Chicken Sandwiches For Listeria Contamination
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LSG Sky Chefs, Inc., an Orlando, Fla. firm, is voluntarily
recalling approximately 3,316 pounds of chicken wrap sandwiches
that may be contaminated with Listeria monocytogenes, the U.S.
Department of Agriculture's Food Safety and Inspection Service
(FSIS) announced today.
The products subject to recall are various size and weight bulk
packages of 8.75 oz. wraps of "7-ELEVEN BIG EATS, Deluxe, WHITE
CHICKEN MEAT WRAP WITH VEGETABLES AND SOY GINGER SPREAD ON A
CURRY FLOUR TORTILLA." Each package bears the message,
"Handmade on Monday 0328, Freshest Before 11:59pm, 0330," or
"Handmade on Tuesday 0329, Freshest Before 11:59pm, 0331." Each
package also bears the establishment code "EST. P-19682" inside
the USDA mark of inspection.
The chicken wrap sandwiches were produced on March 28 and 29,
2005, and were distributed to convenience stores in Florida on
March 29 and 30, 2005. The product has a two-day shelf life and
FSIS has been informed that product subject to recall has been
removed from store shelves. The problem was discovered through
company sampling. FSIS has received no reports of illnesses
associated with consumption of these products.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. However, Listeriosis
can cause high fever, severe headache, neck stiffness and
nausea. Listeriosis can also induce miscarriages and
stillbirths, as well as serious and sometimes fatal infections
in those with weakened immune systems including infants, elderly
and persons with chronic disease, such as HIV infection or
undergoing chemotherapy.
Media with questions about the recall should contact company
Vice President of Corporate Communications Dalene Nichols at
(972) 793-9209. Consumers with questions about the recall should
contact 7-Eleven Corporate Quality Assurance Manager Harold
Luebbert at (214) 841-6827. Consumers with food safety
questions can phone the toll-free USDA Meat and Poultry Hotline
at 1-888-MPHotline (1-888-674-6854). The hotline is available in
English and Spanish and can be reached from l0 a.m. to 4 p.m.
(Eastern Time) Monday through Friday. Recorded food safety
messages are available 24 hours a day.
MARYLAND: Settlement Talks in Public Housing Dispute Collapses
--------------------------------------------------------------
Settlement talks over ways to fix the federal government's
discrimination against black public housing residents in
Baltimore have broken down, according to a judge presiding over
the case, The Associated Press reports.
Legal experts speculate that the breakdown could only mean a
second trial in the 10-year-old case to decide on court-ordered
remedies that could involve providing more chances for black
public housing residents to move to the suburbs.
Last January, U.S. District Judge Marvin Garbis in Maryland
ruled that officials should desegregate Baltimore's public
housing by spreading the poor across the region, but he didn't
say how that would be done. He urged attorneys to reach an out-
of-court settlement. As previously reported in the Class Action
Reporter, Judge Garbis concluded that black public housing
tenants have been systematically consigned to segregated and
poor neighborhoods of Baltimore City as a result of the policies
of the United States Department of Housing and Urban Development
(HUD).
In his 322-page decision, the federal judge wrote, by not
placing more public housing residents in suburban counties, HUD
has failed to meet its obligations under the Fair Housing Act.
Judge Garbis also wrote that HUD must adopt a "regional
approach" to public housing that would disperse poor, black
residents instead of concentrating them in city neighborhoods.
The decision came in a class-action lawsuit brought by the
American Civil Liberties Union back in 1995 on behalf of 14,000
Baltimore public housing tenants, who had claimed local and
federal government policies had created "black ghettos," against
HUD, the Baltimore Housing Authority and elected city officials.
Judge Garbis ruled that the plaintiffs did not prove their claim
that the City of Baltimore had failed to take adequate steps to
try to reverse the effects of previous race discrimination in
public housing. However, the judge rebuked HUD for not ensuring
public housing "free from discrimination." Speaking before a
packed courtroom in downtown Baltimore, Judge Garbis said HUD
has been "effectively wearing blinders" through its failure to
provide more public housing beyond the city's boundaries. He
further said, "It is high time that HUD live up to its statutory
mandate" and consider "regional approaches to promoting fair
housing opportunities for African-American public housing
residents in the Baltimore region."
In his decision, the judge wrote, "Baltimore City should not be
viewed as an island reservation for use as a container for all
of the poor of a contiguous region" that includes surrounding
counties. In Baltimore, the decision noted, 97 percent of public
housing for families went to black families, mostly in poverty-
stricken neighborhoods. In 2000, the judge said, the city was 64
percent black, while the Baltimore region, comprising the city
and five suburban counties, was about 15 percent black.
As a result of a consent decree issued earlier in the A.C.L.U.
case, Baltimore demolished numerous high-rise projects and
replaced them with new housing in the 1990's. While praising
those improvements, Judge Garbis said, "There have not been
significant opportunities for African-American residents of
Baltimore City public housing to reside in racially mixed,
rather than predominantly African-American, areas." The case,
the judge said, will now move to the "remedial phase," in which
the court will hear evidence and take action intended to ensure
HUD officials adequately consider a regional approach to the
desegregation of public housing in the Baltimore region.
Lawyers for the plaintiffs, along with national housing and
civil rights advocates, hailed the decision and said it
underscores the importance of spreading public housing beyond
the city.
Later though, Judge Garbis referred the case to Magistrate Judge
James K. Bredar for settlement, hoping the parties would "take a
significant step towards a greater degree of racial fairness"
and calling for the input of suburban leaders to help craft a
solution. In a recently issued court order, Judge Garbis
rescinded that referral, because Judge Bredar had advised the
court that "not all of the parties were willing to engage in a
substantial discussion" and that "meaningful negotiation toward
a settlement has not occurred."
Leaders from several counties and Baltimore Mayor Martin
O'Malley had spoken against any remedy that would involve the
possible movement of city public housing residents to the
suburbs. But the end of efforts to find a solution apparently
had nothing to do with that political opposition, but rather
with the obstinacy of one of the parties.
Despite Judge Garbis' attempt to prod the parties to an
agreement, Judge Bredar said in a brief interview that "it's
fair to say that not only is there no settlement of this case,
there never were serious settlement discussions." He also adds,
"One of the parties was not prepared to enter into substantive
settlement negotiations," AP reports.
Judge Bredar though declined to say whether that party was HUD
or the American Civil Liberties Union, which is representing
black public housing residents in the class action lawsuit filed
in January 1995.
MBNA CORPORATION: NY Court Certifies Currency Conversion Lawsuit
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted class certification for a lawsuit filed against
MBNA Corporation, MBNA America Bank, N.A., and other card
issuers, styled "In Re Currency Conversion Fee Antitrust
Litigation."
The suit relates to foreign currency conversion fees to
customers. MasterCard and Visa applied a currency conversion
rate, equal to a wholesale rate plus 1%, to credit card
transactions in foreign currencies for conversion of the foreign
currency into U.S. dollars. They required the Company's banking
subsidiaries and other member banks to disclose the 1% add-on to
the wholesale rate if the bank chose to pass it along to the
credit cardholder. The Company's banking subsidiaries disclosed
this information in their cardholder agreements.
In January 2002, the Company and MBNA America were added as
defendants in the matter. The plaintiffs claim that the
defendants conspired in violation of the antitrust laws to
charge foreign currency conversion fees and failed to properly
disclose the fees in solicitations and applications, in initial
disclosure statements and on cardholder statements, in violation
of the Truth-in-Lending Act. The plaintiffs also claim that the
bank defendants and MasterCard and Visa conspired to charge the
1% foreign currency conversion fee assessed by MasterCard and
Visa and an additional fee assessed by some issuers.
Unlike most other issuers, in the United States the Company's
banking subsidiaries did not charge the additional fee on
consumer credit cards in addition to the fee charged by
MasterCard and Visa, but did charge such an additional fee on
business credit cards. The plaintiffs are seeking unspecified
monetary damages and injunctive relief. In July 2003, the court
granted a motion to dismiss certain Truth-in-Lending Act claims
against the Corporation and other defendants, but denied a
motion to dismiss the antitrust claims against the defendants.
In October 2004, a class was certified by the Court.
The suit is styled "In re: Currency Conversion Litigation, case
no. 1:01-md-01409-WHP," filed in the United States District
Court for the Southern District of New York, under Judge William
H. Pauley III. Representing the plaintiffs are Goldberg, Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., 55 East Monroe Street,
Suite 3700, Chicago, Illinois 60603 and Lerach Coughlin Stoia
Geller Rudman & Robbins LLP, 100 Pine Street, Suite 2600
San Francisco, CA 94111, Phone: (415) 288-4545, Fax:
(415) 288-4534.
MONARCH CASINO: Seeking Dismissal of Consolidated NV RICO Suit
--------------------------------------------------------------
Monarch Casino & Resort, Inc. is working for the dismissal of
the consolidated class action filed in the United States
District Court for the District of Nevada against it and other
manufacturers, distributors and casino operators of video poker
and electronic slot machines.
On April 26, 1994, and May 10, 1994, complaints in purported
class action lawsuits, styled "William Poulos v. Caesars World,
Inc. et al., Case No.94-478-Civ-Orl-22," and "William H. Ahern
v. Caesars World, Inc. et al., Case No. 94-532-Civ-Orl-22," were
filed in the United States District Court for the Middle
District of Florida (the "Florida Complaints") and subsequently
were transferred to the United States District Court for the
District of Nevada, Southern Division (the "Nevada District
Court"). On September 26, 1995, a complaint in a purported
class action lawsuit, styled "Larry Schrier v. Caesars World,
Inc. et al., Case No. 95-923-LDG (RJJ)," was filed in Nevada
District Court (along with the Florida Complaints, the
"Complaints").
The Complaints allege that manufacturers, distributors and
casino operators of video poker and electronic slot machines,
including the Company, have engaged in a course of conduct
intended to induce persons to play such games based on a false
belief concerning how the gaming machines operate, as well as
the extent to which there is an opportunity to win on a given
play. The Complaints charge Defendants with violations of the
Racketeer Influenced and Corrupt Organizations Act (RICO), as
well as claims of common law fraud, unjust enrichment and
negligent misrepresentation, and seek damages in excess of $1
billion without any substantiation of that amount. The Nevada
District Court consolidated the actions (and one other action
styled "William Poulos v. American Family Cruise Line, NV et
al., Case No. CV -S-95-936-LDG (RLH)," in which the Company is
not a named defendant).
The Plaintiffs moved to certify two classes of plaintiffs,
essentially encompassing all persons in the U.S. who have played
one or more of the defendants' video poker or electronic slot
machines in the prior ten years. That motion was opposed by the
defendants and subsequently, the court ruled in favor of the
defendants and denied the class certification motion. That
ruling was upheld on appeal. As a result, the named plaintiffs,
Poulos, McElmore and Schreier must proceed on behalf of
themselves, not a class. The plaintiffs have admitted that
they, personally, did not gamble in all of the establishments
owned by entities named as defendants in the suit, and have
offered to dismiss those defendants associated with casinos at
which they did not personally gamble.
The Company is included within the group of defendants to which
dismissal has been offered. Presently, the Company is in the
process of securing its dismissal with prejudice. It expects to
obtain a final order of dismissal by mid 2005.
NANOPHASE TECHNOLOGIES: Working On IL Securities Suit Settlement
----------------------------------------------------------------
Nanophase Technologies Corporation is working to settle the
securities class action filed against it, certain of its then-
current and former officers and the underwriters of its initial
public offering in the United States District Court for the
Northern District of Illinois.
Harbour Court LPI, a small stockholder of the Company, filed the
suit in 1998, alleging that the defendants had violated the
federal Securities Exchange Act of 1934 by making supposedly
fraudulent material misstatements and omissions of fact in
connection with soliciting consents to the Company's initial
public offering from certain of its preferred stockholders. The
supposed misrepresentations concerned purported
mischaracterization of revenue that the Company received from
its then-largest customer. The complaint further alleged that
the suit should be maintained as a plaintiff class action on
behalf of certain former preferred stockholders whose shares of
preferred stock were converted into common stock in connection
with the Company's initial public offering. The complaint
sought relief including unquantified compensatory damages and
attorneys' fees.
In September 2000, each defendant answered the complaint,
denying all wrongdoing. Following certain discovery, the
Company decided to avoid protracted litigation and resulting
defense costs by agreeing to settle all claims against all
defendants for $800,000, plus up to an additional $50,000 for
the cost of settlement administration. The settlement did not
admit liability by any party. The Court ordered final approval
of the settlement in January 2002 and dismissed the complaint
with prejudice.
In January 2003, the Court approved interim payment to
plaintiffs of $17,102 in settlement administration costs. In
January 2005, the Court approved an additional $4,628 in further
settlement administration costs and determined that
administration of the settlement had been completed. Because
both the settlement and the settlement administration costs were
funded by the Company's directors and officers liability
insurance, neither the settlement nor the settlement
administration costs payments have had a material adverse effect
on the Company's financial position or results of operations.
NANOPHASE TECHNOLOGIES: Pays Out IL Securities Suit Settlement
--------------------------------------------------------------
Nanophase Technologies Corporation is working on the settlement
of a securities class action filed in the United States District
Court for the Northern District of Illinois, against it, Joseph
Cross, its president and chief executive officer, and certain of
its officers.
In 2001, George Tatz, a purchaser of 200 shares of the Company's
common stock, filed the suit, alleging that defendants violated
the federal Securities Exchange Act of 1934 by making supposedly
fraudulent material misstatements and omissions of fact in
connection with the Company's s public disclosures, including
certain press releases, concerning its dealings with Celox, a
British customer. The complaint further alleged that the action
should be maintained as a plaintiff class action on behalf of
certain buyers who purchased shares of the Company's common
stock from April 5, 2001 through October 24, 2001. The
complaint sought relief including unquantified compensatory
damages and attorneys' fees.
Thereafter, plaintiff filed an amended complaint, alleging that
the Company and four of its officers (Joseph Cross, its chief
executive officer; Daniel Bilicki, its vice president of sales
and marketing; Jess Jankowski, its then-acting chief financial
officer; and Gina Kritchevsky, its then-current chief technology
officer) were liable under the federal Securities Exchange Act
of 1934 for making supposedly fraudulent material misstatements
and omissions of fact in connection with the Company's public
disclosures concerning its relationship with Celox and its
purportedly improper booking, and later reversal, of $400,000 in
revenue from a one-time sale to that customer treated as a bill
and hold transaction. The amended complaint alleged the same
class and sought the same relief as in plaintiff's initial
complaint. In November 2002, defendants answered the amended
complaint, denying all wrongdoing. Following certain discovery,
in June 2003, the Company decided to avoid protracted litigation
and resulting defense costs by agreeing to settle all claims
against all defendants for $2,500,000. Thereafter, the Court
certified the class alleged in the amended complaint.
In December 2003, the Court ordered final approval of the
settlement and dismissed the amended complaint with prejudice.
The settlement did not admit liability by any party. In January
2005, the Court ordered distribution of the net settlement funds
to the plaintiff class. Because the settlement was funded by
the Company's directors and officers liability insurance, the
settlement has not had a material adverse effect on the
Company's financial position or results of operations.
NAUTILUS GROUP: Files Motion To Dismiss Bowflex Suit in TX Court
----------------------------------------------------------------
Nautilus Group Inc. has made a response to a national class
action lawsuit about its Bowflex home gym by filing a motion in
Miller County asking for the suit to be dropped because of
technical reasons, The Texarkana Gazette reports. In its
motion, the company wants Circuit Judge Jim Hudson to drop the
suit, which centers on the mechanisms of the popular home gym
and its repair kits.
The lawsuit is based on customers' complaints that the Company
was not responsive to the repair kits tied to the equipments'
2004 recall. As part of their lawsuit, they want either the
money back that they paid for the home gyms or replacement of
the home gyms. According to the lawsuit, the company
voluntarily recalled the Pro Fitness Machine with the Lat Tower
for two safety reasons. First, the backboard bench on the
Bowflex could unexpectedly break and collapse when in the
incline position. Second, the Lat Tower attachment could rotate
forward and fall during use.
The suit further states that as part of the Company's recall,
customers were told to stop using the backboard bench and Lat
Tower and that in the meantime, they were to contact the Company
to get a free repair or replacement kit within two weeks.
However, lawyers for Bowflex customers say that kits were not
shipped for six weeks or many months later.
In its motion to dismiss the lawsuit, Nautilus' lawyers argue
that the complainants did not fashion the lawsuit in a way that
they can seek damages for the legal claims, namely unjust
enrichment. In addition, the Company alleges that the fraud
claim lodged by the consumers does not specify facts that could
sustain the claim.
The company is relying on its prior notices to customers to not
use the Bowflex equipment because it was deemed to be dangerous
after an investigation of the U.S. Consumer Product Safety
Commission. This led to the company's voluntary recall of the
home gym.
NEW JERSEY: Starved Children Allowed To File Suit V. State, DYFS
----------------------------------------------------------------
In a ruling that gives more protection to some 9,500 children
under state care, a federal judge has allowed three children
found starving in a South Jersey foster home to sue the Division
of Youth and Family Services for failing to protect them, The
Newark Star Ledger reports.
According to a spokesman the agency, it is attempting to settle
the case and has offered more than $10 million to compensate the
three boys and their older brother, which is the largest payment
in DYFS history. However, the guardian for the three boys told
the Star Ledger she has not accepted the offer, adding they have
"an even stronger lawsuit" as a result of the ruling.
Court records revealed that in October 2003, Collingswood police
found 19-year-old Bruce Jackson rummaging through a garbage can
for food, then discovered his three emaciated brothers, ages 10
to 14, in their home. None of the four weighed more than 45
pounds. Their adoptive parents, Raymond and Vanessa Jackson,
were indicted on charges of aggravated assault and endangering
the welfare of children. Vanessa Jackson is awaiting trial,
while her husband died of a stroke late last year.
The state had sought to dismiss the lawsuit filed on behalf of
the three juveniles. U.S. District Court Judge Stanley Brotman
in Camden rejected the state's claim of immunity and ruled the
children can sue for violations of their rights under the U.S.
Constitution and state law. Furthermore, the judge pointed out
that a 1991 law entitling children under state care to
appropriate food, clothing, housing, medical care and education
allows them to sue when those rights are denied.
Andy Williams, a spokesman for the Division of Youth and Family
Services told the Star Ledger, "We are working to settle the
case and have been for months. We have made a substantial offer
that would be the greatest monetary award in DYFS' history." He
also said that it would cover all four boys and be "in excess of
$10 million."
"We're waiting for a response," Mr. Williams said, adding that
one "stumbling block" has been determining how much would go to
the four Jackson children versus lawyers representing the three
younger ones. West Orange lawyer Michael Critchley is donating
his services for Bruce Jackson, now 20.
Mr. Critchley told the Star Ledger, "We've reached a settlement
in principle for $5 million as it pertains to Bruce Jackson,"
who is "severely and permanently injured" after years of
malnutrition.
Marcia Lowry, the court-appointed guardian for the three younger
Jackson children, told the Star Ledger it was "inappropriate, if
not unethical" to publicly discuss settlement negotiations. Ms.
Lowry said that the three youngsters "basically were tortured
through the deprivation of food" and deserves money from DYFS
for ignoring their plight despite repeated visits to the Jackson
home. The agency approved the Jacksons as foster parents in 1991
and subsequently placed the four youngsters there.
The lawsuit charges that DYFS caseworkers ignored phone tips and
other obvious signs that the children were being deprived of
nourishment. Since being removed from the Jackson home and
placed on normal diets, all four boys have gained weight and
grown taller.
Judge Brotman also wrote in his ruling that the case represents
an exception to the general rule that government has no
constitutional duty to guarantee the rights of citizens. The
state entered into "a special relationship" with the children
when it took them from their natural parents; it then placed
them in "a state-created danger," Brotman wrote. He said that
entitles them to sue. The judge also ruled the children can sue
under the state's Child Placement Bill of Rights Act of 1991.
Prior to his ruling, that had been an open question. Judge
Brotman also said the case raised "disconcerting questions about
DYFS' involvement in child placement cases in New Jersey."
NEW YORK: Wall Street Firms To Discuss Bond Offering Guidelines
---------------------------------------------------------------
Attorneys representing major Wall Street firms are set meet on
April 8, 2005 to discuss whether formal guidelines should be
drawn up covering due diligence for underwriting bonds,
according to the Bond Market Association said, The Reuters News
Agency reports.
The meeting was organized after a group of Wall Street firms
agreed to hand over about $6 billion to WorldCom Inc.
bondholders to settle a class-action lawsuit related to two big
debt offerings.
According to the Wall Street Journal, Bank of America
Corporation (BAC.N: Quote, Profile, Research) and Goldman Sachs
Group (GS.N: Quote, Profile, Research) representatives will
participate in the BMA meeting. Analysts believe that recent
scrutiny given for procedures used to evaluate the financial
health of companies that issue securities, or due diligence,
after fraud was uncovered healthcare company HealthSouth Corp.,
phone company WorldCom and energy company Enron Corp. in recent
years may also have been responsible for the meeting.
PREMIERE GLOBAL: Subsidiary Faces TCPA Violations Lawsuit in MD
---------------------------------------------------------------
Premiere Global Services, Inc.'s Data Communications subsidiary
Xpedite faces a class action filed in the Circuit Court for
Montgomery County, Maryland.
On February 22, 2005, Paul Worsham filed the suit, alleging that
the Company transmitted prerecorded telephone calls advertising
Data Communications' services to telephone numbers in Maryland,
including to Mr. Worsham's telephone number, in violation of the
federal Telephone Consumer Protection Act (TCPA) and applicable
Federal Communications Commission (FCC) rules. The complaint
also alleges violations of federal caller identification
requirements under FCC rules and violations of the Maryland
Telephone Consumer Protection Act. The complaint seeks
statutory damages under the federal and Maryland statutes for
each violation and injunctive relief. The Company has 30 days
from the date of service to file an answer in this matter, and
the court has scheduled a scheduling conference for May 27,
2005.
PRINTCAFE SOFTWARE: Reaches Settlement For PA Securities Suit
-------------------------------------------------------------
Printcafe Software, Inc. reached a settlement for a securities
class action filed against it and certain of its officers in the
United States District Court for the Western District of
Pennsylvania. The complaint alleges that the defendants
violated Sections 11, 12(a)(2) and 15 of the Securities Act of
1933 due to allegedly false and misleading statements in
connection with the Company's initial public offering and
subsequent press releases.
On June 28, 2004, an amended complaint was filed in the action
adding additional Printcafe directors as defendants. While the
Company believes this lawsuit is without merit, the parties have
reached an agreement in principle to fully and finally resolve
this litigation, subject to the Court's approval of the proposed
class action settlement. The Company anticipates executing a
written Stipulation and Settlement Agreement and jointly moving
for the Court's preliminary approval of the settlement with the
next 90 days. If preliminarily approved by the Court a final
fairness hearing will be scheduled accordingly.
REXON INDUSTRIAL: Recalls 41T Rip Fences Due To Injury Hazard
-------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Rexon Industrial Corp. Ltd., of East Windsor,
Connecticut and Sears Roebuck and Co., of Hoffman Estates,
Illinois is voluntarily recalling about 41,800 Table Saw's Rip
Fence Assembly.
The rip fence - a metal guide that keeps material being sawed
from shifting side to side as it passes through the cutting
blade - can come loose. This could result in kickback of the
material being sawed and possible injury to the operator. Rexon
on behalf of Sears has received 230 reports of the rip fence
bracket coming loose. No injuries were reported.
The rip fence on these saws is made of silver extruded aluminum,
is 31inches in length, and has an over-locking handle with a
black die-cast aluminum head. They were included with Craftsman
table saw model number 137.21830.
Manufactured in Taiwan, the devices were sold at Sears stores
nationwide from August 2002 through November 2004. The cost of
complete table saw is about $399, and the cost of the rip fence
is about $40.
The firm will provide free replacement parts with instructions
to consumers.
Consumer Contact: For additional information, contact the Sears
Craftsman Helpline at (800) 843-1682 between 8:30 a.m. and 7
p.m. ET Monday through Friday.
SAFEGUARD SCIENTIFICS: Plaintiffs Appeal Suit Summary Judgment
--------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
Eastern District of Pennsylvania's ruling granting summary
judgment in favor of Safeguard Scientifics, Inc. in the class
action filed against the Company and its former chairman Warren
V. Musser.
On June 26, 2001, the Company and Mr. Musser were named as
defendants in a putative class action filed in United States
District Court for the Eastern District of Pennsylvania.
Plaintiffs allege that defendants failed to disclose that Mr.
Musser had pledged some or all of his Company stock as
collateral to secure margin trading in his personal brokerage
accounts. Plaintiffs allege that defendants' failure to
disclose the pledge, along with their failure to disclose
several margin calls, a loan to Mr. Musser, the guarantee of
certain margin debt and the consequences thereof on the
Company's stock price, violated the federal securities laws.
Plaintiffs allege claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934.
On August 17, 2001, a second putative class action was filed
against the Company and Mr. Musser asserting claims similar to
those brought in the first proceeding. In addition, plaintiffs
in the second case allege that the defendants failed to disclose
possible or actual manipulative aftermarket trading in the
securities of the Company's companies, the impact of competition
on prospects for one or more of the Company's companies and the
Company's lack of a superior business plan.
These two cases were consolidated for further proceedings under
the name "In Re: Safeguard Scientifics Securities Litigation"
and the Court approved the designation of a lead plaintiff and
the retention of lead plaintiffs' counsel. The plaintiffs filed
a consolidated and amended complaint. On May 23, 2002, the
defendants filed a motion to dismiss the consolidated and
amended complaint for failure to state a claim upon which relief
may be granted. On October 24, 2002, the Court denied the
defendants' motions to dismiss, holding that, based on the
allegations of plaintiffs' consolidated and amended complaint,
dismissal would be inappropriate at that juncture.
On December 20, 2002, plaintiffs filed with the Court a motion
for class certification. On August 27, 2003, the Court denied
plaintiffs' motion for class certification. On September 12,
2003, plaintiffs filed with the United States Court of Appeals
for the Third Circuit a petition for permission to appeal the
order denying class certification. On November 5, 2003, the
Third Circuit denied plaintiffs' petition and declined to hear
the appeal. On November 18, 2003, plaintiffs' counsel moved to
intervene new plaintiffs and proposed class representatives,
which motion was denied by the Court on February 18, 2004.
On July 12, 2004, a third putative class action complaint
captioned "Mandell v. Safeguard Scientifics, Inc., et al." was
filed against the Company and Mr. Musser in the United States
District Court for the Eastern District of Pennsylvania. The
new complaint asserts similar claims to those asserted in the
consolidated and amended class action complaint. The complaint
also asserts individual claims on behalf of two individual
plaintiffs who had attempted unsuccessfully to intervene in the
consolidated action.
On August 10, 2004, the Court entered an order staying all
proceedings in the Mandell action pending the Court's ruling on
defendants' summary judgment motion in the consolidated action,
or until such later time as the Court may order. On November 23,
2004, the Court entered an order granting defendants' motion for
summary judgment. On December 17, 2004, the plaintiffs filed a
notice of appeal with the Court, seeking to appeal the Court's
orders granting summary judgment to defendants, denying class
certification and denying the motion to intervene new
plaintiffs, among other matters. The Court has not taken any
further action with respect to the Mandell action.
SAWTEK INC.: Interlocutory Appeal For FL Securities Suit Stayed
---------------------------------------------------------------
Sawtek, Inc.'s interlocutory appeal filing of the partial
dismissal consolidated class action filed against it in the
United States District Court for the Middle District of Florida
has been stayed.
In February 2003, several nearly identical putative civil class
action lawsuits were filed against the Company. The lawsuits
also named as defendants certain of its current and former
officers and Triquint Semiconductors, Inc. The cases were
consolidated into one action, and an amended complaint was filed
in this action on July 21, 2003.
The amended class action complaint is purportedly filed on
behalf of purchasers of the Company's stock between January 2000
and May 24, 2001, and alleges that the defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act, as well
as Securities and Exchange Commission Rule 10b-5, by making
false and misleading statements and/or omissions to inflate the
Company's stock price and conceal the downward trend in revenues
disclosed in its May 23, 2001 press release. The complaint does
not specify the amount of monetary damages sought.
The Company and the individual defendants filed their motion to
dismiss on September 3, 2003, and briefing on the motion was
completed on November 19, 2003. The court heard oral argument
on November 21, 2003, and issued an order partially denying the
motion to dismiss on December 19, 2003. Specifically, the court
found that the complaint was not barred by the statute of
limitations, but reserved ruling on the other aspects of the
motion to dismiss. Because the statute of limitations issue is
a novel question of law, the court stayed the proceedings in
this case to allow the defendants to file an interlocutory
appeal to the Eleventh Circuit Court of Appeals. Defendants
duly filed for interlocutory appeal on January 22, 2004. Because
the Court of Appeals is considering the identical issue in
another matter, the appeal process has been stayed, pending the
Court of Appeals' decision in the other matter.
SILICONIX INC.: Named As Defendant in DE Securities Fraud Suit
--------------------------------------------------------------
Siliconix, Inc. was named as a nominal defendant in an amended
class action complaint filed in the Delaware Court of Chancery,
New Castle County on behalf of all its non-Vishay
Intertechnology, Inc. shareholders. The suit also names as
defendants:
(1) Vishay Intertechnology, Inc.
(2) Ernst & Young LLP (independent registered public
accounting firm that audits the Company's financial
statements),
(2) Dr. Felix Zandman, Chairman and Chief Technical and
Business Development Officer of Vishay,
The suit purports to state various derivative and class claims
against the defendants including:
(i) the purported taking by Vishay of Siliconix sales
subsidiaries and the profits of those subsidiaries;
(ii) the purported taking by Vishay of Siliconix's SAP
software system without compensation to Siliconix;
(iii) the alleged use by Vishay of Siliconix's assets as
security for Vishay loans without compensation to
Siliconix;
(iv) the purported misappropriation by Vishay of Siliconix's
identity;
(v) the alleged taking by Vishay of Siliconix testing
equipment;
(vi) the alleged use by Vishay of Siliconix to save Vishay
certain credits made available by an Israeli business
development agency;
(vii) the alleged misuse by Vishay of Siliconix's patents to
help Vishay acquire General Semiconductor; and
(viii) the allegedly improper identification of Dr. Zandman as
a co-inventor on certain Siliconix patents
The action seeks injunctive relief and unspecified damages.
SOLAR INC.: Recalls 24T Flashing Pacifiers Due To Choking Hazard
----------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Solar Inc. of Tappan, New York is voluntarily recalling
about 24,000 Flashing Pacifiers or 2-in-1 Flashing Pacifiers
with Whistle Necklaces.
The nipple can detach from the base, posing a choking hazard to
young children.
The recalled pacifier necklace consists of a 28-inch
multicolored cord with a 3-inch plastic pacifier that comes in
assorted colors. A hole at the tip of the nipple is used as a
blowhole for the whistle. The pacifier handle operates as the
on-off button for the flashing light on both pacifiers.
"Flashing Pacifier" or "2-in-1 Flashing Pacifier with Whistle
Necklace" is printed on the packaging of the pacifiers.
Manufactured in China, the pacifiers were sold at small retail
stores, distributors, dollar stores and on Solar's Web site from
January 2004 through February 2005 for about $1.
Consumers should discard the pacifiers or return them to the
place where purchased to obtain a refund.
Consumer Contact: Contact Solar Inc. toll-free at (800) 837-6527
between 9 a.m. and 5 p.m. ET Monday through Friday.
TENNESSEE: Parents Testify in Lawsuit V. Alternative Schools
------------------------------------------------------------
After her two daughters were suspended from Knox County Schools'
Central High for 40-plus days and sent to an alternative school
program at night for being caught at school with an open bottle
of Hurricane malt liquor, the mother of the two children,
identified only by her initials, R.C., testified in Knox County
Chancery Court, "I agreed to that (night alternative program)
because that's all that was offered to me," The Knoxville News
Sentinel reports.
R.C. was one of 11 parents or grandparents who testified about
the Knox County school system's alternative education programs
for suspended students. In 1984, the Tennessee General Assembly
had passed a law allowing districts to set up alternative
schools for students with discipline problems. Proponents of
such schools say they allow troubled students to be in
classrooms rather than at home or on the streets, and they allow
students in regular schools to learn free of disruptive
behavior. A class-action lawsuit, filed on behalf of suspended
students, specifically challenges the quality of Knox County's
night alternative program in place this school year.
During the first day of trial, attorney Dean Rivkin, who is
representing the students with Brenda McGee, told Chancellor
Daryl R. Fansler, "This is a critical program for at-risk
students, and it's time to bring it up to standards." He also
told Chancellor Fansler, "The defendants have had over 20 years
to establish an alternative education program. It's been 20
years that the system has had to get it right, and they still
haven't," the News Sentinel reports.
During the hearing, Mr. Rivkin rattled off a list of things he
considers wrong with the night alternative program: It relies
too heavily on a computer program (called PLATO) for
instruction. It does not match the quality of the district's
daylong alternative program at the Richard Yoakley Alternative
Center, and does not offer students counseling to fix their
behavior problems. He also pointed out that according to the
State Board of Education, an alternative school is defined as "a
short term intervention program designed to develop academic and
behavioral skills for students."
Students assigned to the night alternative program attend three
hours a day, four evenings a week, while students at Yoakley
attend 6 1/2 hours a day, five days a week, according to one
testimony.
Marty McCampell, the attorney representing the Knox County Board
of Education and Superintendent Charles Lindsey, argued that the
law does not require the night school to be equal to Yoakley or
to a regular school, the News Sentinel reports. He also said,
"I do not think that those legislators contemplated that an
alternative school would be everything that is available in a
regular school - plus."
Several of the parents who testified complained that the night
school did not offer enough classes, such as honors courses or
electives. According to R.C.'s testimony, when her daughters
were suspended, one was taking English, creative writing,
history and art at Central, she said. The other was taking
Spanish, wellness, English and ecology. But, at the alternative
school, she said, they took only English. Another mother also
testified that she hired outside tutors, costing up to $45 an
hour, to teach her daughter honors chemistry, honors English and
Spanish II while she was suspended from West High School and
enrolled in the night alternative program for about a month.
"There was really nothing they could provide her," said the
mother, identified only as D.K. "They offered no labs." And no
counseling or courses in decision-making, she adds, the News
Sentinel reports.
Both parties in the case have previously argued about the
quality of the night alternative program during the 2003-04
school year. But they have settled that part of the suit, with
the school system allowing students to make up credits or appeal
D grades received in the program. Chancellor Fansler recently
approved that settlement.
TITAN PHARMACEUTICALS: Securities, Derivative Lawsuits Dismissed
----------------------------------------------------------------
The securities class actions and shareholder derivative suits
filed against Titan Pharmaceuticals, Inc. and certain of its
officers and directors have been dismissed.
On November 4, 2003, a purported class action suit entitled
"Patrick Magee v. Titan Pharmaceuticals, Inc., et al." was filed
in the United States District Court for the Northern District of
California on behalf of purchasers of the Company's common stock
during the period between December 1, 1999 and July 22, 2002.
Subsequently, several similar actions were filed in the same
court.
The complaints alleged that the Company and certain of its
executive officers violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 by issuing false and misleading
statements that failed to disclose certain key information
regarding iloperidone. The complaints sought unspecified
damages.
On November 6, 2003, a stockholder purporting to act on our
behalf filed a derivative action in the California Superior
Court for the County of San Mateo against the Company's
executive officers and directors and certain former directors
seeking unspecified damages, injunctive relief and restitution.
The Company was also named as a nominal defendant. The
derivative action is based on the same factual allegations as
the purported class actions and alleges state law claims for
breach of fiduciary duty, abuse of control, gross mismanagement,
waste of corporate assets and unjust enrichment.
All of the class action and derivative lawsuits filed against
the Company had been dismissed without prejudice. In every case,
the plaintiffs agreed to voluntarily dismiss the lawsuits after
discussion of the facts with the Company's counsel, without any
further legal action necessary by the Company. The Company, its
affiliates, and insurers made no payment in connection with
dismissal of the lawsuits, and have no obligation to make any
payments whatsoever to any plaintiffs or their counsel in
connection with the dismissals. Furthermore, Titan has no other
obligations in connection with the dismissals.
UICI: Plaintiffs Launch Consolidated Securities Suit in N.D. TX
---------------------------------------------------------------
Plaintiffs filed a consolidated amended securities class action
against UICI and certain of its officers and current and former
directors in the United States District Court for the Northern
District of Texas, Dallas Division, styled "In re UICI
Securities Litigation, Case No. 3-04-CV-1149-P."
In May and June 2004, the Company was named as a defendant in
four separate class action suits. On January 18, 2005,
plaintiffs, on behalf of themselves and a purported class of
similarly situated individuals who purchased the Company's
common stock during the period February 7, 2002 and July 21,
2003, filed a Consolidated Amended Complaint, alleging, among
other things, that the Company, Academic Management Services
Corporation (AMS), the Company's former chief executive officer,
and AMS' former president failed to disclose all material facts
relating to the condition of AMS, in violation of Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder.
The suit is styled "In re UICI Securities Litigation, case no.
3:04-cv-01149," filed in the United States District Court for
the Northern District of Texas, under Judge Jorge A Solis.
Representing the defendants is Robert R Summerhays of Weil
Gotshal & Manges - Dallas, 200 Crescent Court Suite 300 Dallas,
TX 75201 Phone: 214/746-7727 Fax: 214/746-7777 E-mail:
bob.summerhays@weil.com. Representing the plaintiffs are
Douglas R. Britton and Thomas E. Glynn, Lerach Coughlin Stoia
Geller Rudman & Robbins - San Diego, 401 B St Suite 1700 San
Diego, CA 92101 Phone: 619/231-1058 E-mail: DougB@Lerachlaw.com,
TomG@Lerachlaw.com; and Joe Kendall, Provost Umphrey Law Firm -
Dallas 3232 McKinney Ave Suite 700 Dallas, TX 75204 Phone:
214/744-3000 Fax: 214/744-3015 E-mail: Provost_Dallas@yahoo.com.
USF CORPORATION: JPMDL Transfers WARN Violations Suits To E.D PA
----------------------------------------------------------------
The Judicial Panel on Multidistrict Litigation (JPMDL)
transferred and consolidated three class actions filed against
USF Corporation to the United States District Court for the
Eastern District of Pennsylvania.
On November 19, 2004, the Teamsters National Freight Industry
Negotiating Committee (TNFINC) filed a suit against USF
Corporation, USF Red Star Inc. and USF Holland Inc. in the
United States District Court for the Eastern District of
Pennsylvania. On January 13, 2005, service of process was
effectuated on all three USF defendants. TNFINC alleges certain
violations of the National Labor Relations Act and asks for
damages. Additionally, TNFINC filed a class action suit on
behalf of the employees of USF Red Star alleging violations of
the federal Worker Adjustment and Retraining Notification Act
(WARN) similar to other WARN actions mentioned below.
The Company and/or USF Red Star, Inc. are currently named in
five class action lawsuits alleging violations of the federal
WARN Act. Three WARN class actions are pending in the United
States District Court for the Eastern District of Pennsylvania
and one each is pending in the United States District Court for
the District of Connecticut and the United States District Court
for the Western District of New York. The WARN action in the
Western District of New York was filed in late January 2005 by
former mechanics of USF Red Star's Buffalo, New York terminal.
On September 30, 2004 USF Red Star filed a motion to transfer
and consolidate the three original WARN actions with the
Multidistrict Litigation Judicial Panel (JPMDL Panel) requesting
that all three cases be consolidated and transferred to the
United States District Court for Northern District of New
York where USF Red Star's former headquarters are located in
Auburn, New York. On February 16, 2005, the JPMDL Panel
transferred three of the five WARN cases to the United States
District Court for the Eastern District of Pennsylvania.
UTAH: AG Says Utahns Eligible For $36M Remeron Court Settlement
---------------------------------------------------------------
Utah consumers who bought the antidepressant drug Remeron could
get part of a $36 million court settlement from a class action
lawsuit, the state attorney general said, The Associated Press
reports.
New Jersey-based drug maker Organon USA Inc. was sued in all 50
states after a 10-month investigation by attorney generals
offices in Oregon, Texas and Florida revealed that the company
tried to prevent consumer access to lower-cost generic versions
of the drug.
As previously reported in the October 22, 2004 edition of the
Class Action Reporter, the complaint had alleged that Organon
misled the U.S. Food and Drug Administration about the scope of
a new "combination therapy" patent it had obtained in order to
extend its monopoly. In addition, the complaint alleged that
Organon delayed listing the patent with the FDA in another
effort to deter the availability of lower-cost generic
substitutes. This resulted in higher prices to those who paid
for the drug. With annual sales in excess of $400 million at its
peak, Remeron is Organon's top-selling drug. Since Organon
allegedly delayed listing the patent with the FDA, lower-cost
generic substitutes couldn't be created and consumers wound up
paying higher prices, the suit said.
The settlement agreement though, which was filed in federal
court last October, still has to be approved by the courts,
according to a news release from the Utah attorney general. Once
the courts approve it, Utah consumers who bought Remeron, or the
generic equivalent known as mirtazapine, between June 2001 and
January 25, 2005, could apply for a portion of settlement funds.
Health insurance plans and other third-party payees are also
eligible for settlement funds.
The news release also stressed that claims must be filed by June
13 to be eligible with those consumers who want to opt-out of
settlement eligibility must do so in writing before April 27.
VALASSIS COMMUNICATIONS: Plaintiffs Dismiss MI Securities Suit
--------------------------------------------------------------
Plaintiffs voluntarily dismissed the securities class action
filed against Valassis Communications, Inc., its Chief Executive
Officer, Alan F. Schultz and its Chief Financial Officer, Robert
L. Recchia without any payment, compensation or fees being
provided to them.
The suit, filed in the United States District Court for the
Eastern District of Michigan, was filed on behalf of purchasers
of the Company's common stock (NYSE:VCI) between April 25, 2002
and October 23, 2002, inclusive, seeking to pursue remedies
under the Securities Exchange Act of 1934. The suit alleges
that defendants violated sections 10(b) and 20(a) of the
Exchange Act, and Rule 10b-5, by issuing a series of material
misrepresentations to the market during the Class Period, an
earlier Class Action Reporter story (November 24,2004) states.
WASHINGTON: Settles Braam Case, To Reform Foster Care System
------------------------------------------------------------
In Skagit County, four children who went through multiple
placements in foster care have settled their class action
lawsuit with the state of Washington for $500,000, according to
Bellingham lawyer Tim Farris, The Associated Press reports. Mr.
Farris, who represented the group of foster children said, that
settlement has not yet gotten final approval from the court.
The issue of foster children bouncing from home to home was one
focus of the class action, which was known as the Braam case. In
that case, the state agreed to pay $1.3 million and also to
enact sweeping reforms of the foster care system.
Even with the settlements from this case and others like it, Mr.
Farris and the other lawyers who worked on the Braam case say
they are worried that the Legislature isn't dedicating enough
money toward making those changes. State child welfare officials
have stated the reforms will cost about $50 million, but the
budget plans so far have proposed much less.
"These settlements ought to send a clear message to the
Legislature that if it doesn't provide funding to stop the
practice of multiple placements and mistreatment, that children
have the right to sue and they will sue for damages," Mr. Farris
told AP. "It is pay now or pay later."
As previously reported in the August 13, 2004 edition of the
Class Action Reporter, the Washington Department of Social and
Health Services reached a settlement in a class action lawsuit
brought on behalf of 13 foster children who accused the state of
violating foster children's constitutional rights to safe and
stable homes.
Under that settlement, the DSHS agreed to an independent five-
member panel to oversee the changes. Estimated to cost the state
up to $50 million, the changes include: improvements in mental
health treatment, better support and training of foster parents,
placing siblings together in foster care, better services for
teenagers and more in-person visits from caseworkers. The
ultimate goal being the reduction of the number of placements
and providing foster kids stable homes.
According to the lawyers that settlement reaches beyond the
status quo by forcing the state to keep its promises to foster
children and if the system doesn't improve, all parties involved
go back to court.
WATSON PHARMACEUTICALS: Faces Antitrust Litigation Over Cipro
-------------------------------------------------------------
Watson Pharmaceuticals continues to face various lawsuits and
class actions, alleging violations of federal antitrust laws,
related to its Ciprofloxacin hydrochloride product.
Beginning in July 2000, a number of suits have been filed
against the Company, Rugby Group and other company affiliates in
various state and federal courts alleging claims under various
federal and state competition and consumer protection laws.
Several plaintiffs have filed amended complaints and motions
seeking class certification. The defendants have opposed these
class certification motions, which remain pending.
As of March 7, 2005, approximately 42 cases had been filed
against the Company, Rugby and other Watson entities. Twenty-two
of these actions have been consolidated in the U.S. District
Court for the Eastern District of New York, styled "In re:
Ciprofloxacin Hydrochloride Antitrust Litigation, MDL Docket No.
001383." In May 2003, the court hearing the consolidated action
granted the Company's motion to dismiss and made rulings
limiting the theories under which plaintiffs can seek recovery
against Rugby and the other defendants. Portions of that
decision are expected to be appealed.
On May 28, 2004, the defendants, including the Company and
certain of its affiliates, filed motions for summary judgment in
the consolidated action pending in the U.S. District Court for
the Eastern District of New York, seeking dismissal of several
of the claims asserted by the plaintiffs, including claims
alleging violation of the antitrust laws. On July 9, 2004, the
plaintiffs filed oppositions to the defendants' summary judgment
motions, and the direct purchasers filed a cross-motion for
partial summary judgment on their claims. A hearing on these
motions took place on February 28, 2005. The court is expected
to rule on the motions by March 31, 2005.
Other actions are pending in various state courts, including New
York, California, Kansas, Tennessee, Florida and Wisconsin. The
actions generally allege that the defendants engaged in
unlawful, anticompetitive conduct in connection with alleged
agreements, entered into prior to Watson's acquisition of Rugby
from Aventis, related to the development, manufacture and sale
of the drug substance ciprofloxacin hydrochloride, the generic
version of Bayer's brand drug, Cipro. The actions generally seek
declaratory judgment, damages, injunctive relief, restitution
and other relief on behalf of certain purported classes of
individuals and other entities. The courts hearing the cases in
Wisconsin and New York have dismissed the actions. Plaintiffs
have appealed the dismissals. The appellate court in Wisconsin
has stayed the appeal at the request of the parties. In the
action pending in Kansas, the defendants are required to file
answers to the complaint by March 28, 2005.
In the action pending in the California Superior Court for the
County of San Diego (In re: Cipro Cases I & II, JCCP Proceeding
Nos. 4154 & 4220), the defendants have moved for summary
judgment. The court has set a status conference for April 8,
2005, at which the dates for a hearing on the pending summary
judgment motions and potential trial will be discussed. On July
21, 2004, the California Court of Appeal granted in part and
denied in part the defendants' petition for a writ of mandate
seeking to reverse the trial court's order granting the
plaintiffs' motion for class certification. Pursuant to the
appellate court's ruling, the majority of the plaintiffs will be
permitted to pursue their claims as a class.
In addition to the pending actions, the Company understands that
various state and federal agencies are investigating the
allegations made in these actions. Aventis has agreed to defend
and indemnify Watson and its affiliates in connection with the
claims and investigations arising from the conduct and
agreements allegedly undertaken by Rugby and its affiliates
prior to Watson's acquisition of Rugby, and is currently
controlling the defense of these actions. Discovery is ongoing.
WATSON PHARMACEUTICALS: Plaintiffs Seek AWP Suit Certification
--------------------------------------------------------------
Plaintiffs asked the United States District Court for the
District of Massachusetts to grant class certification with
respect to the first tier defendants in the class action filed
against Watson Pharmaceuticals, Inc., certain of its
subsidiaries, and numerous other pharmaceutical companies.
The suit alleges improper or fraudulent reporting practices
related to the reporting of average wholesale prices of certain
products, and that the defendants committed other improper acts
in order to increase prices and market shares. The suit is
styled "In re: Pharmaceutical Industry Average Wholesale Price
Litigation, MDL Docket No. 1456."
The consolidated amended complaint alleges that the defendants'
acts improperly inflated the reimbursement amounts paid by
various public and private plans and programs. The amended
complaint alleges claims on behalf of a purported class of
plaintiffs that paid any portion of the price of certain drugs,
which price was calculated based on its average wholesale price,
or contracted with a pharmacy benefit manager to provide others
with such drugs.
The Company filed an Answer to the Amended Consolidated Class
Action Complaint on April 9, 2004. Defendants in the
consolidated litigation have been divided up into two groups.
The Company and its named subsidiaries are contained in a large
group of defendants that is currently proceeding through the
pretrial discovery phase, while certain other defendants,
referred to as the "first-tier" defendants, are scheduled to
proceed on a more expedited basis. The class certification
motion has been briefed, but the court has not yet ruled.
WATSON PHARMACEUTICALS: Faces Antitrust Suits in Various Courts
---------------------------------------------------------------
Watson Pharmaceuticals, Inc. and certain of its subsidiaries are
named as defendants in various lawsuits filed by the Attorneys
General of numerous states, including Nevada, Montana,
Massachusetts, Wisconsin, Kentucky, Alabama and Illinois. The
suits are styled:
(1) State of Nevada v. American Home Products, et al.,
Civil Action No. 02-CV-12086-PBS, United States
District Court for the District of Massachusetts;
(2) State of Montana v. Abbott Laboratories, et al., Civil
Action No. 02-CV-12084-PBS, United States District
Court for the District of Massachusetts;
(3) Commonwealth of Massachusetts v. Mylan Laboratories, et
al., Civil Action No. 03-CV-11865-PBS, United States
District Court for the District of Massachusetts;
(4) State of Wisconsin v. Abbott Laboratories, et al., Case
No. 04-cv-1709, Wisconsin Circuit Court for Dane
County;
(5) Commonwealth of Kentucky v. Alpharma, Inc., et al.,
Case Number 04-CI-1487, Kentucky Circuit Court for
Franklin County;
(6) State of Alabama v. Abbott Laboratories, Inc. et al.,
Civil Action No. CV-2005-219, Alabama Circuit Court for
Montgomery County;
(7) State of Illinois v. Abbott Laboratories, Inc. et al.,
Civil Action No. 05-CH-02474, Illinois Circuit Court
for Cook County
These cases generally allege that the defendants caused the
states to overpay pharmacies and other providers for
prescription drugs under state Medicaid Programs by inflating
the reported Average Wholesale Price or Wholesale Acquisition
Cost, and by reporting false prices to the United States
government under the Best Prices rebate program. Several of
these cases also allege that state residents were required to
make inflated co-payments for drug purchases under the federal
Medicare program, and companies were required to make inflated
payments on prescription drug purchases for their employees.
These cases are in their early stages of pleadings.
On August 4, 2004, the City of New York filed an action in the
United States District Court for the Southern District of New
York against the Company and numerous other pharmaceutical
defendants alleging similar claims. The case was transferred to
the United States District Court for the District of
Massachusetts, and an Amended Complaint was filed on
January 26, 2005, styled "City of New York v. Abbott
Laboratories, Inc., et al., Civil Action No. 01-CV-12257-PBS,
United States District Court for the District of Massachusetts."
The Company's deadline for a responsive pleading has been
postponed, pending the court's decision on the Motion to
Dismiss filed in the consolidated case pending in the District
of Massachusetts.
On January 26, 2005, the Company was also named as a defendant
in similar cases or Amended Complaints filed by the New York
Counties of Onondoga, Rockland, and Westchester, styled:
(i) County of Rockland v. Abbott Laboratories, Inc., et
al., Civil Action No. 01-CV-12257-PBS, United States
District Court for the District of Massachusetts;
(ii) County of Westchester v. Abbott Laboratories, Inc., et
al., Civil Action No. 01-CV-12257-PBS, United States
District Court for the District of Massachusetts;
(iii) County of Onondaga v. Abbott Laboratores, Inc., et al.,
Civil Action No. 05-CV-0088-FJS-GHL, United States
District Court for the Northern District of New York
On March 8, 2005, the Company was named as a defendant in a
similar case filed by Erie County, New York, styled "County of
Erie v. Abbott Laboratories, Inc., et al., Index Number 2005-
2439." The Company has not yet been served with the complaint
or amended complaint in any of those actions. Additional actions
by other states, cities and/or counties are anticipated.
WATSON PHARMACEUTICALS: Plaintiffs Appeal CA Lawsuit Dismissal
--------------------------------------------------------------
Plaintiffs appeal the United States District Court for the
Central District of California's dismissal of a consolidated
securities class action filed against Watson Pharmaceuticals,
Inc. and certain of its present and former officers and
directors.
Beginning in November 2003, several securities class action
lawsuits were commenced, and on February 9, 2004, the federal
court issued an order consolidating all of the federal actions,
under the caption "In re: Watson Pharmaceuticals, Inc.
Securities Litigation, Case No. CV-03-8236 AHM." In addition to
the federal consolidated actions, two shareholder derivative
actions were filed in California Superior Court for the County
of Riverside, styled "Philip Orlando v. Allen Chao, et al., Case
No. 403717;" and "Charles Zimmerman v. Allen Chao, et al, Case
No. 403715."
These federal and state cases all relate to the drop in the
price of the Company's common stock in November 2001, and allege
generally that the Company failed to timely advise investors
about matters such as falling inventory valuations, increased
competition and manufacturing difficulties, and therefore, the
Company's published financial statements and public
announcements during 2000 and 2001 were false and misleading.
The shareholder derivative actions were dismissed without
prejudice on November 16, 2004. On August 2, 2004, the court
granted the defendants' motion to dismiss the federal
consolidated action, and allowed plaintiffs until August 30,
2004 to file an amended complaint. On August 30, 2004, the lead
plaintiff in the federal consolidated action notified the court
that it did not intend to file an amended complaint in response
to the court's order granting the defendants' motion to dismiss.
On September 2, 2004, the court entered a judgment of dismissal
in favor of the defendants. On October 1, 2004, one of the non-
lead plaintiffs in the consolidated action filed a Notice of
Appeal of the dismissal of the action with the United States
Court of Appeals for the Ninth Circuit, styled "Pension Fund v.
Watson Pharmaceuticals, Inc., USCA Docket No. 04-56791." The
court has set a briefing schedule for the appeal, but has not
yet set a date for oral argument on the appeal.
WATSON PHARMACEUTICALS: Discovery Proceeds in Injury Suit in AR
---------------------------------------------------------------
Discovery is ongoing in the consolidated class action filed
against Watson Pharmaceuticals, Inc., certain of its affiliates
and other pharmaceutical companies, in the United States
District Court for the Eastern District of Arkansas.
Beginning in early 2004, a number of product liability suits
were filed arising out of the use of hormone replacement therapy
products, including but not limited to estropipate and
estradiol. These complaints also name numerous other
pharmaceutical companies as defendants, and allege various
injuries, including ovarian cancer, breast cancer and blood
clots. As of March 7, 2005, approximately sixty-one cases were
pending against the Company and/or its affiliates in state and
federal courts representing claims by approximately 628
plaintiffs. Many of the cases involve multiple plaintiffs. The
majority of the cases have been transferred to, and consolidated
under the caption "In re: Prempro Products Liability Litigation,
MDL Docket No. 1507."
WINTER SAUSAGE: Recalls Sausage Due To Listeria Contamination
-------------------------------------------------------------
Winter Sausage Manufacturing, an East Point, Mich., firm, is
voluntarily recalling approximately 5,117 pounds of sausage that
may be contaminated with Listeria monocytogenes, the U.S.
Department of Agriculture's Food Safety and Inspection Service
(FSIS) announced today.
All of the products subject to recall bear the establishment
number "EST. 10158" inside the USDA mark of inspection. The
products subject to recall are various sized and weight packages
of:
(1) "Blue Ribbon, NATURAL CASING FRANKS." Each package
bears the sell by date "5-29-05."
(2) "WINTER'S PREMIUM DELI, Natural Casing Wieners." Each
package bears the sell by date "5-29-05."
(3) "OLD TYME DELI, SIGNATURE, Natural Casing, HOT DOGS,
LIPARI." Each package bears the sell by date "5-29-05."
(4) "The Butcher Shop, At Nino Salvaggio International
Market Place, Natural Casing, Hot Dogs." Each package
bears the sell by date "5-29-05."
(5) "WINTER'S PREMIUM DELI, Fully Cooked Smoked Kielbasa."
Each package bears the sell by date "5-29-05."
(6) "WINTER'S PREMIUM DELI, Fully Cooked Smoked Italian
Sausage." Each package bears the sell by date "5-29-
05."
(7) "WINTER SAUSAGE, Beef Hot Dogs, Skinless." Each package
bears the date code "089." These products were packaged
on March 30, 2005, and distributed to retail stores and
institutional customers in Michigan.
Also subject to recall are 40 to 60 lb. bulk cartons of "WORLD
FAMOUS TONY PACKO'S CAFE, Natural Casing, Hickory Smoked,
TOLEDO'S AUTHENTIC HUNGARIAN HOT DOG." Each package bears the
date code "O89." These products were packaged on March 30, 2005
and distributed to institutions customer in Ohio.
The problem was discovered through FSIS microbial sampling. FSIS
has received no reports of illnesses associated with consumption
of these products.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. However, Listeriosis
can cause high fever, severe headache, neck stiffness and
nausea. Listeriosis can also induce miscarriages and
stillbirths, as well as serious and sometimes fatal infections
in those with weakened immune systems including infants, elderly
and persons with chronic disease, such as HIV infection or
undergoing chemotherapy.
Media and consumers with questions about the recall should
contact Ron Eckert, company vice president, at (586) 777-9080,
ext. 224. Consumers with food safety questions can phone the
toll-free USDA Meat and Poultry Hotline at 1-888-MPHotline (1-
888-674-6854). The hotline is available in English and Spanish
and can be reached from l0 a.m. to 4 p.m. (Eastern Time) Monday
through Friday. Recorded food safety messages are available 24
hours a day.
WISCONSIN: Judge Dismisses Price-Fixing Lawsuit V. Madison Bars
---------------------------------------------------------------
Circuit Judge Angela B. Bartell recently ruled in price-fixing
lawsuit that downtown Madison bars did not illegally conspire to
raise prices when they voluntarily agreed to ban drinks specials
on weekend nights, The Associated Press reports. According to
the judge's ruling, the 24 bars that announced they would not
offer the deals on Friday and Saturday nights in 2002 were
reaching a political compromise to satisfy city officials who
had threatened more stringent regulations.
In effect, the ruling by Judge Bartell dismissed the antitrust
class action lawsuit that was filed last year by three
University of Wisconsin-Madison students along with a high-
powered Minneapolis law firm.
As previously reported in the February 15, 2005 edition of the
Class Action Reporter, the suit, which had a very strong chance
of forcing most downtown Madison bars into bankruptcy, had
sought "tens of millions of dollars" for customers who had
overpaid for drinks. The plaintiffs in the suit had asserted
that damages will be "in the tens of millions of dollars ..."
and have asked the court to certify a class "consisting of all
persons who have purchased alcoholic beverages from one or more
of the defendant drinking establishments ... on Friday or
Saturday nights since September 12, 2002." The plaintiffs
alleged that the bar owners formed a cartel, a clear violation
of anti-trust laws.
The bars representing about half of those near campus had
announced the voluntary ban on September 12, 2002, after some
Madison Common Council members threatened to ban drink specials
altogether. At the time, university officials were putting
pressure on bars to help them crack down on excessive drinking
by students at the UW-Madison, which commonly comes out near the
top in rankings of party schools.
Kevin O'Connor, a lawyer who represented 19 bars and the Dane
County Tavern League, told AP the decision "vindicates the bar
owners in the fact that they were simply trying to do what city
regulators wanted them to do." He also declares, "This was a
political compromise between the bar owners and the city."
The bars had withdrawn the voluntary ban after the lawsuit was
filed last year and a university-sponsored study showed serious
alcohol-related crime continued to rise despite the effort.
Alderman Michael Verveer, who represents the downtown area where
most of the bars are located, told AP bar owners had racked up
more than $250,000 in legal fees defending themselves. He also
praised the judge for "dismissing this ridiculous lawsuit." In
addition Mr. Verveer stated, "I'm particularly relieved for the
bar owners who hopefully will now be able to get a good night's
sleep. This has been a huge, huge burden placed up on them since
the suit was filed last year."
New Securities Fraud Cases
BRADLEY PHARMACEUTICALS: Pomerantz Haudek Files Stock Suit in NJ
----------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP
initiated a class action lawsuit in the United States District
Court for the District of New Jersey, against Bradley
Pharmaceuticals, Inc. ("Bradley" or the "Company") (NYSE:BDY)
and certain of its officers, on behalf of purchasers of the
common stock of Bradley during the period from October 8, 2003
to February 25, 2005, inclusive (the "Class Period").
Bradley Pharmaceuticals, Inc. is a specialty pharmaceutical
company that acquires, develops and markets prescription and
over-the-counter products in select markets.
The complaint alleges that, throughout the Class Period,
defendants made material statements about Bradley's sales,
income, costs, expenses and earnings, thereby inflating
Bradley's stock price. On February 28, 2005, the Company issued
a press release announcing that, since December 2004, the staff
of the Securities and Exchange Commission had been conducting an
informal inquiry of the Company to determine whether there have
been violations of the federal securities laws. In connection
with the inquiry, the SEC staff has requested that the Company
provide it with certain information and documents concerning
revenue recognition and capitalization of certain payments. In
light of the ongoing SEC staff inquiry and separate counsel's
review, the Company announced that it would delay the release of
its 2004 earnings. By the close of the trading day on February
28, 2005, the company's stock price was down to $9.75, a decline
of $3.50 per share, or almost 30%. The complaint alleges
violations of Section 10(b) and Section 20(a) of The Exchange
Act and Rule 10b-5.
For more details, contact Teresa Webb of Pomerantz Haudek Block
Grossman & Gross LLP by Phone: (888) 476-6529 by E-mail:
tlwebb@pomlaw.com or visit their Web site:
http://www.pomlaw.com.
COLLINS & AIKMAN: Baron & Budd Files Securities Fraud Suit in MI
----------------------------------------------------------------
The law firm of Baron & Budd, P.C. initiated a class action
lawsuit in the United States District Court for the Eastern
District of Michigan on behalf of purchasers of Collins & Aikman
Corp. (NYSE:CKC) ("Collins & Aikman" or the "Company")
securities during the period between May 6, 2004 and March 17,
2005, inclusive (the "Class Period").
The Complaint alleges that Collins & Aikman violated federal
securities laws by issuing false or misleading information and
that the Company failed to disclose and misrepresented the
following material adverse facts which were known to defendants
or recklessly disregarded by them. Specifically, the Complaint
alleges:
(1) the Company was not properly accounting for certain
supplier rebates;
(2) that the Company's financial statements would require
net adjustments of approximately $10-$12 million of
which $8-$10 million impact the previously reported
nine months ended September 30, 2004;
(3) that the Company's financial statements were not
prepared in compliance with the Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(5) that as a result of the foregoing, the Company's
financial statements were materially overstated at all
relevant times.
On March 17, 2005, Collins & Aikman issued a press release
stating that after the Company's internal review of vendor
rebates covered an aggregate of approximately $88 million of
vendor transactions in fiscal years 2002 through 2004, the
Company's management believed that their financial statements
required net adjustments of approximately $10-$12 million, the
majority of which primarily occurred in the previous nine months
ended September 30, 2004. The Company's shares reacted
negatively to this news and fell $0.39, down 23.93% from a
previous closing price at $1.63, and a drop of 80% from its
class period high of $6.17.
For more details, contact Randall K. Pulliam, Esq. or Max Jodry
of Baron & Budd, P.C. by Phone: 1-800-222-2766 by E-mail:
info@baronbudd.com or visit their Web site:
http://www.baronandbudd.com.
COLLINS & AIKMAN: Brain M. Felgoise Lodges Securities Suit in MI
----------------------------------------------------------------
The Law Offices of Brian M. Felgoise, P.C. launched a securities
class action on behalf of shareholders who acquired Collins &
Aikman Corp. (NYSE: CKC) securities between May 6, 2004 and
March 17, 2005, inclusive (the Class Period).
The case is pending in the United States District Court for the
Eastern District of Michigan, against the company and certain
key officers and directors.
The action charges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements to the market throughout the Class Period
which statements had the effect of artificially inflating the
market price of the Company's securities. No class has yet been
certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261
Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046 by
Phone: (215) 886-1900 or by E-mail: securitiesfraud@comcast.net.
COLLINS & AIKMAN: Marc S. Henzel Lodges Securities Lawsuit in MI
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Eastern
District of Michigan on behalf of all securities purchasers of
Collins & Aikman Corp. (NYSE: CKC) between May 6, 2004 and March
17, 2005 inclusive (the "Class Period").
The complaint charges Collins & Aikman, David Stockman, J.
Michael Stepp, and Bryce Koth with violations of the Securities
Exchange Act of 1934. More specifically, the complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts known to defendants or
recklessly disregarded by them:
(1) that the Company improperly accounted for certain
supplier rebates;
(2) that the Company's financial statements required net
adjustments of approximately $10 - $12 million;
(3) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(5) that as a consequence of the foregoing, the Company's
net income and financial results were materially
overstated at all relevant times.
On March 17, 2005, Collins & Aikman announced that after the
review of vendor rebates covered an aggregate of approximately
$88 million of vendor transactions in fiscal years 2002 through
2004, the company's management believes that net adjustments of
approximately $10 - $12 million are required primarily occurring
during fiscal 2004. News of this shocked the market. Shares of
Collins & Aikman fell $0.39 per share or 23.93 percent, on March
17, 2005, to close at $1.24 per share.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
MBIA INC.: Lerach Coughlin Lodges Securities Fraud Lawsuit in NY
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit in the
United States District Court for the Southern District of New
York on behalf of purchasers of MBIA, Inc. ("MBIA") (NYSE:MBI)
securities during the period between August 5, 2003 and March
30, 2005 (the "Class Period").
The complaint charges MBIA and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. MBIA is engaged in providing financial guarantee
insurance, investment management services, and municipal and
other services to public finance, and structured finance clients
on a global basis. The Company conducts its financial guarantee
business through its wholly owned subsidiary, MBIA Insurance
Corporation.
The Complaint alleges that, during the Class Period, defendants
issued materially false and misleading statements concerning the
Company's financial performance. Specifically, the complaint
alleges that these statements were materially false and
misleading because defendants failed to disclose and/or
misrepresented:
(1) that MBIA was materially overstating its financial
results by engaging in improper accounting practices.
As detailed in the complaint, MBIA has admitted that
its prior financial reports are materially false and
misleading and has announced that it is going to
restate its previously-reported financial results for
1998 and subsequent years. The Company has admitted
that it was improperly accounting for two reinsurance
agreements and has been subpoenaed by the SEC, the New
York Attorney General's Office and U.S. Attorney's
Office for the Southern District of New York regarding
documents that relate to the accounting treatment of
advisory fees, its methodology for determining loss
reserves and case reserves, and instances of purchase
of credit default protection on itself, among other
things;
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain its true financial
condition; and
(3) that as a result of the foregoing, the values of the
Company's earnings and net income were materially
overstated at all relevant times.
Beginning on November 18, 2004, the Company issued its first of
several press releases announcing that it had received subpoenas
from the SEC and the New York Attorney General's office
requesting information regarding certain of the insurance
products it had sold. Then, on March 8, 2005, the Company issued
a press release announcing that it would be restating its
financial statements for 1998 and subsequent years.
Specifically, the restatement is being made to correct the
accounting treatment for two reinsurance agreements that MBIA
entered into in 1998 with Converium Re (previously known as
Zurich Reinsurance North America).
Finally, on March 30, 2005, the Company advised the public that
the previously-announced investigations had now been broadened
and intensified. On that date, the Company issued a press
release announcing that it received additional requests from the
New York Attorney General's Office and SEC that supplement the
subpoenas it received in late 2004. The requests seek documents
relating to the Company's accounting treatment of advisory fees;
its methodology for determining loss reserves and case reserves;
instances of purchase of credit default protection on itself;
and documents relating to Channel Reinsurance Ltd., a
reinsurance company of which MBIA is part owner. The requests
cover the period January 1, 2000 to the present. Following this
announcement, shares of the Company's stock fell $4.36 per
share, or over 7%, to close at $52.28 per share, on unusually
heavy trading volume.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/mbia/.
MBIA INC.: Marc S. Henzel Lodges Securities Fraud Lawsuit in NY
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of all securities purchasers of
MBIA Inc., (NYSE: MBI) between August 5, 2003 and March 30,
2005, inclusive (the "Class Period").
The complaint charges MBIA, Joseph W. Brown, Gary C. Dunton,
Nicholas Ferreri, Neil G. Budnick, and Douglas C. Hamilton with
violations of the Securities Exchange Act of 1934. More
specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts
known to defendants or recklessly disregarded by them:
(1) that MBIA, during the Class Period, over-leveraged
itself, deeply under-reserved against possible credit
defaults, and overly exposed to guaranteeing risky
structured financings;
(2) that MBIA accelerated its recognition of current
income, by classifying many of its upfront guarantee
fees as advisory fees taken at closing, rather than as
accounted for over the life of the bonds insured;
(3) that MBIA improperly booked a $70 million payment
received from Converium Re (then called Zurich
Reinsurance North America) in 1998, which at the time
was depicted as a loss-reducing reinsurance recovery
for MBIA, but was, in substance, a loan;
(4) that as a result of this, MBIA financial statements
were materially overstated by $60 million;
(5) that MBIA artificially inflated premium income and
portfolio credit quality by insuring bonds in the
secondary market that were attracting prices lower than
their stale credit ratings would dictate;
(6) that MBIA's low loss ratios resulted from the Company's
practice to defer recognizing problems rather than
providing layers of excess collateral, other
underwriting protection, and its self-proclaimed
prowess at restructurings;
(7) that MBIA set forth an illegal scheme of covering the
loss, from the failed Allegheny Health, Education and
Research Foundation ("AHERF") bond issuance, with a
retroactive reinsurance policy, giving it a reinsurance
recovery of $170 million to cover the present value of
the future AHERF interest and principal payments, which
resulted in MBIA showing a better than 40% jump in
pretax income that year -- $565 million over what the
income figure would have been without resort to the
reinsurance;
(8) that MBIA was dumping on Channel Reinsurance Ltd., a
Bermuda reinsurer where MBIA owns a 17.4% interest,
performing but troubled policies from its existing
portfolio, with the proviso that it could make up any
quality problems later so that MBIA could buy time by
getting potential workout loans off its balance sheet
in order make its financial results appear better; and
(9) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company.
On November 18, 2004, MBIA issued a press release wherein it
announced that "it received identical document subpoenas today
from the Securities and Exchange Commission and the New York
Attorney General's office requesting information with respect to
non-traditional or loss mitigation insurance products developed,
offered or sold by MBIA to third parties from January 1, 1998 to
the present." On March 8, 2005, MBIA announced that it had
decided to restate its financial statements for 1998 and
subsequent years. The restatement was being made to correct the
accounting treatment for two reinsurance agreements that MBIA
entered into in 1998 with Converium Re (previously known as
Zurich Reinsurance North America). Then on March 9, 2005, MBIA
announced that it had received a subpoena from the U.S.
Attorney's Office for the Southern District of New York seeking
information related to the reinsurance agreements it entered
into in connection with the loss it incurred in 1998 on bonds
insured by MBIA Insurance Corp. that were issued by Allegheny
Health, Education and Research Foundation ("AHERF"). On March
30, 2005, after the market closed, MBIA announced that it
received additional requests from the New York Attorney
General's Office (NYAG) and the Securities and Exchange
Commission (SEC) that supplement the subpoenas it received in
late 2004. On this news, shares of MBIA fell $4.36 per share, or
7.7 percent, to close at $52.28 per share on unusually heavy
trading volume.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
MBIA INC.: Stull Stull Lodges Securities Fraud Suit in S.D. NY
--------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit was filed in the United States District Court for the
Southern District of New York, against MBIA Incorporated ("MBIA"
or the "Company") (NYSE:MBI), on behalf of purchasers of MBIA
publicly traded securities between August 5, 2003 and March 30,
2005, inclusive (the "Class Period").
The complaint alleges that MBIA violated federal securities laws
by issuing false or misleading information. On November 18,
2004, MBIA announced that it had received subpoenas from the
Securities and Exchange Commission ("SEC") and the New York
Attorney General's Office ("NYAG") requesting information with
respect to loss mitigation insurance products developed, offered
or sold to third parties from January 1, 1998 to the present. On
March 8, 2005, MBIA announced that it would restate its
financial statements for 1998 and subsequent years in order to
correct the accounting treatment for two reinsurance agreements
that MBIA entered into in 1998 with Converium Re (previously
known as Zurich Reinsurance North America). Then on March 9,
2005, MBIA announced that it had received a subpoena from the
U.S. Attorney's Office for the Southern District of New York
seeking information related to reinsurance agreements in
connection with the loss it incurred in 1998 on bonds insured by
MBIA that were issued by Allegheny Health, Education and
Research Foundation ("AHERF"). Finally, on March 30, 2005, MBIA
announced that it had received additional requests from the NYAG
and SEC supplemental to the 2004 subpoenas. On this news, MBIA
fell $4.36 per share, or 7.7% to close at $52.28 per share.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022by E-mail by
E-mail: SSBNY@aol.com or visit their Web site:
http://www.ssbny.com.
RHODIA S.A.: Lerach Coughlin Lodges Securities Fraud Suit in NJ
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the District of New Jersey on behalf
of purchasers of Rhodia S.A. ("Rhodia") (NYSE:RHA) securities
during the period between April 26, 2001 and March 23, 2004 (the
"Class Period").
The complaint charges Rhodia and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Rhodia develops, manufactures and markets chemical
products.
The complaint alleges that during the Class Period, defendants
engaged in a scheme to overstate Rhodia's reported financial
results by failing to record impairment on a timely basis in
order to:
(1) protect and enhance their executive positions and
substantial compensation;
(2) raise EUR 1 billion in Notes in a private placement on
May 28, 2003, as well as EUR 290 million in a private
placement of Notes with American investors in 2001; and
(3) enhance the value of their personal Rhodia securities
holdings and options.
The true facts, which were known to the defendants during the
Class Period but concealed from shareholders, were as follows:
(i) Rhodia was carrying an overvalued asset on its books in
the form of its ChiRex unit which was impaired and
should have been written down in a timely fashion but
was not;
(ii) Rhodia failed to write down its deferred tax assets to
recoverable values in 2002 and failed to do so in 2003
until the end of the year;
(iii) the Company failed to properly report its outstanding
debt; and
(iv) the Company failed to include disclosures to make it
possible for investors to understand the trends in its
business.
As a result of Rhodia's false statements, its securities traded
at artificially inflated levels during the Class Period.
On March 23, 2004, it was revealed that French securities
regulators were conducting an inquiry into the Company's
financial reporting. Following this news, Rhodia's stock
collapsed to below $1.50 per share. Subsequently, in March 2005,
it was reported that France's stock market regulator had found
that the Company had failed to disclose important information in
a timely fashion beginning in 2001.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/rhodia/.
*********
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
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
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