/raid1/www/Hosts/bankrupt/CAR_Public/050414.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, April 14, 2005, Vol. 7, No. 73
Headlines
A.G. EDWARDS: Investors File Suit Over Promotion Of Mutual Funds
ARKANSAS: Bentonville School Board To Review Amendment 59 Deal
CALIFORNIA: Ex-Employee Lodges Overtime Wage Suit V. R&B Singer
CALIFORNIA: Official Discusses Effects of Williams Settlement
CANADA: Farmers Launch $7B Lawsuit V. Government Over BSE Crisis
CEQUENT TOWING: Recalls Hitch Receivers For Defect, Crash Hazard
CHOICEPOINT INC.: Consumers Initiate Fraud Lawsuit in CA Court
CHOICEPOINT INC.: Consumers Launch Privacy Lawsuits in C.D. CA
CHOICEPOINT INC.: Shareholders Launch Fraud Lawsuits in GA, CA
CHOICEPOINT INC.: Seeks Summary Judgment in FL Privacy Lawsuit
CHOICEPOINT INC.: Consumers Initiate Fraud Lawsuit in IL Court
CITIGROUP GLOBAL: Continues To Face NY Shareholder Litigation
CITIGROUP GLOBAL: Faces Litigation Due To Relationship W/ Enron
CITIGROUP GLOBAL: Working To Settle WorldCom Securities Lawsuit
CITIGROUP GLOBAL: Reaches Settlement For WorldCom Lawsuit in NY
CITIGROUP GLOBAL: NY Court Approves Settlement for TARGETS Suit
CITIGROUP GLOBAL: Reaches Settlement For NY Global Crossing Suit
CITIGROUP INC.: Plaintiffs Appeal NY Securities Suit Dismissal
DAIMLERCHRYSLER AG: IL Judge Dismisses Part Of Race Bias Lawsuit
DECODE GENETICS: NY Court Preliminarily Approves Suit Settlement
DECODE GENETICS: Shareholders Launch Securities Suit in S.D. NY
DIRECT GENERAL: Shareholders Launch Securities Suits in M.D. FL
DOBSON COMMUNICATIONS: Shareholders Launch OK Stock Fraud Suits
FRANCE: Ministers Begin Process Of Legalizing Class Action Suits
GABLES REALTY: Discover Proceeds in FL Lease Termination Lawsuit
GENERAL MOTORS: Recalls 707 SUVs For Brake Defect, Crash Hazard
GROUP 1: Forges Settlement For TX State, Federal Antitrust Suits
HYPERCOM CORPORATION: Shareholders Launch Fraud Suit in AZ Court
ILLINOIS: Krislov & Associates Lodges Suit Over Absentee Ballot
ISRAEL POSTAL: Emron Special Files Suit Over Undelivered Letters
L.S.K. SMOKED: Recalls Turkey, Pork For Listeria Contamination
MINNESOTA CORN: Parties Await Approval For $5.75 Mil Settlement
MOSSIMO INC.: Wolf Popper Commences Shareholders' Lawsuit in DE
NAUTILUS INC.: To Pay $950T Penalty For Not Reporting Defects
NEW YORK: Firm Sanctioned For Incorrectly Including Defendants
NEW YORK: Orange County Residents Join Suit V. DMV Rule Change
NOVASTAR HOME: Reaches Settlement For Employee Wage Suit in CA
PAWTUCKET CREDIT: Attorney Launches Lawsuit Over ATM Fees in RI
PFIZER INC.: Toronto Law Firm Launches $550M Lawsuit Over Bextra
PRAECIS PHARMACEUTICALS: Plaintiffs Seek MA Suits Consolidation
RADIO ONE: NY Court Preliminarily Approves Securities Settlement
ROGER WOOD: Recalls Sausage Products For Listeria Contamination
SLM CORPORATION: Plaintiffs Appeal Dismissal of DC Consumer Suit
TXU CORPORATION: Reaches Settlement For TX Securities Fraud Suit
UNION PACIFIC: Board Sued For Lost Profits, Settlements, Fines
UNITED STATES: PwC Study Reveals 2004 Securities Lawsuits Up 16%
UNUMPROVIDENT: NY Supreme Court Orders Preservation Of Evidence
VEECO INSTRUMENTS: Shareholders File Securities Suits in S.D. NY
New Securities Fraud Cases
AUDIBLE, INC.: Stull Stull Lodges Securities Fraud Lawsuit in NJ
BLUE COAT: Charles J. Piven Lodges Securities Fraud Suit in CA
BLUE COAT: Glancy & Binkow Lodges Securities Fraud Suit in CA
COLLINS & AIKMAN: Lasky & Rifkind Lodges Securities Suit in MI
DELPHI CORPORATION: Johnson & Perkinson Lodges ERISA Suit in MI
GLAXOSMITHKLINE PLC: Lerach Coughlin Files Securities Suit in NY
WATCHGUARD TECHNOLOGIES: Schiffrin & Barroway Lodges Suit in WA
*********
A.G. EDWARDS: Investors File Suit Over Promotion Of Mutual Funds
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A.G. Edwards & Sons Inc. faces a class-action lawsuit, alleging
the Company received millions of dollars in improper payments to
promote some mutual funds for the last five years, The St. Louis
Post-Dispatch reports.
The lawsuit, which was in filed St. Louis County Circuit Court,
alleges that a preferred group of mutual funds "received
increased visibility in the defendants' extensive mutual fund
network," after paying "secret kickbacks" to the brokerage. It
also contends that the alleged payments created conflicts of
interest between A.G. Edwards and its customers. The exact
payment amounts were not detailed in the suit. The suit also
alleged that A.G. Edwards does maintain a preferred list
including, but not limited to, Hartford Funds, American Funds,
Oppenheimer Funds, Evergreen Investments and Dreyfus Funds.
Jules Stull, of Stull, Stull & Brody of New York, one of three
law firms representing the plaintiffs, told the Post-Dispatch
the practice of sharing revenue with mutual fund companies on an
investment firm's preferred list is legal, but the Securities
and Exchange Commission requires that revenue-sharing agreements
be disclosed to investors.
ARKANSAS: Bentonville School Board To Review Amendment 59 Deal
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The Bentonville School Board will review by next week a possible
settlement in a lawsuit seeking refunds of over collected
property taxes, The Springdale Morning News reports.
Superintendent Gary Compton told the Springdale Morning News
board members initially planned a special meeting within this
week but two members could not attend, thus the board will now
review the settlement during its regular monthly meeting.
The settlement offer is connected to the class action lawsuit
that claims local school districts and governments violated
Amendment 59 of the Arkansas Constitution by over collecting
property taxes. As previously reported in the February 22, 2005
edition of the Class Action reporter, the suit was filed in 1997
and alleges that property owners in Benton County were
overtaxed. According to Dale Evans, one of the attorneys who
filed the suit, as soon as it was filed, property taxes in the
county were considered "paid under protest" allowing them to be
questioned in court.
Taxes paid before then traditionally could not be challenged,
however attorneys are protesting that fact, and the state
Supreme Court in 2000 said they can pursue their argument: That
taxpayers had no way of knowing the assessments were illegal.
Mr. Evans and Kent Hirsch both of whom filed the lawsuit back in
1997, claims local school districts and governments violated
Amendment 59 to the Arkansas Constitution by over collecting
property taxes for several years in the 1990s. Amendment 59
limits the increase in property tax revenue from reappraisals to
10 percent per year for each taxing entity such as a school
district or city. When a taxing entity's revenue collection
would increase more than 10 percent because of property
reappraisal, Amendment 59 triggers a mileage rollback though the
limit does not apply to increases resulting from new
construction or improvements.
Mr. Evans told the Springdale Morning News that representatives
of the Bentonville School District tentatively agreed to a $1.9
million settlement.
CALIFORNIA: Ex-Employee Lodges Overtime Wage Suit V. R&B Singer
---------------------------------------------------------------
A former employee of troubled R&B star R. Kelly launched a class
action lawsuit against the "I Believe I Can Fly" singer for
unpaid overtime wages, The KGET 17 reports.
According to the suit, Brandon Novak was a former assistant to
Mr. Kelly, who claims he was fired after complaining. The suit
demands that Mr. Kelly and his associates to pay Mr. Novak and
other employees at least two years worth of unpaid overtime,
plus damages and legal fees, according to the TV show Celebrity
Justice. KGET 17 reported Mr. Kelly had no comment.
CALIFORNIA: Official Discusses Effects of Williams Settlement
-------------------------------------------------------------
In an open discussion with members of the Westside Action Group,
the San Bernardino County Superintendent of Schools Herb Fischer
talked about the changes brought by the Williams settlement and
how local schools will be affected, The San Bernardino Sun
reports
The changes come as part of the state's settling of Williams v.
California, a class action suit filed in 2000 by 100 San
Francisco students against the California Department of
Education, then-Gov. Gray Davis and the state for failing to
provide adequate school supplies, classrooms and qualified
teachers. The suit's lead plaintiff was Eli Williams, who is now
a senior at Balboa High School in San Francisco.
As previously reported in the March 29, 2005 edition of the
Class Action Reporter, Judge Peter J. Busch had given final
approval for the settlement. To accomplish the settlement's
goal, additional funding was established, including:
(1) $800 million over four years to make emergency repairs
in the lowest performing schools (those ranked in the
bottom 3 deciles under the statewide Academic
Performance Index [API]);
(2) nearly $139 million for new instructional materials for
students attending schools in the bottom two API
deciles;
(3) $20 million to inventory facilities needs in the
lowest performing schools, and
(4) $30 million to build county superintendents' capacity
to oversee low performing schools and fund emergency
repairs in those schools next year.
Mr. Fischer told his audience that the staff at the county
superintendent's office now faces the daunting task of auditing
and inspecting 153 of the county's lowest-performing schools by
June 30. He specifically pointed out that under the settlement's
provision, education officials throughout the state must monitor
the schools' test scores, check teacher credentials, and ensure
there are enough textbooks and that facilities including
bathrooms and classrooms are clean and adequate.
During the discussion, Ratibu Jacocks, a member of the Westside
Action Group, which is a coalition of business and neighborhood
leaders who monitor issues facing area blacks, asked Mr. Fischer
whether "an outside agency' would be a better resource for the
Williams inspections.
To this question, Mr. Fischer answered that he does not plan to
hire additional staff to handle the new duties, since his office
is ultimately responsible for the oversight. He further told his
audience, "I have confidence in my staff. I felt they would be
more responsible than an outside agency and secondly, we were
only given $3,000 per school to complete this task."
More information is available at http://www.decentschools.com.
CANADA: Farmers Launch $7B Lawsuit V. Government Over BSE Crisis
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A group of farmers in Ontario and three other provinces filed a
$7-billion class-action lawsuit against the federal government
alleging its failure to protect against mad-cow disease led to a
crisis in the cattle industry, The CBC Ottawa reports.
According to a statement from the group, "The loss of billions
of dollars by the Canadian cattle industry was the result of
gross incompetence and negligence on the part of the Canadian
government."
Brought by farmers in Ontario, Quebec, Alberta, and
Saskatchewan, the suit contends that the government lost track
of nearly half the 191 cows from Britain that were supposed to
be tracked for signs of bovine spongiform encephalopathy (BSE)
to prevent them from being used in cattle food. It's believed
cattle contract the disease after eating food containing BSE-
infected animal remains, particularly the brain and spinal cord.
The claim also targets Australian-based animal-feed manufacturer
Ridley Corp., saying it should have stopped using cattle remains
in its Canadian food supply at the same time it stopped in
Australia in 1996. The Canadian government banned the use of
ruminant meat and bone meal in animal feed in October 1997, a
date the lawsuit says was too late. The claim further contends
that the BSE-infected cow, which caused the 2003 closure of the
U.S. border to Canadian cattle, contracted the disease by eating
Ridley-manufactured feed.
However, in a news release Ridley president and CEO Steve Van
Roekel downplayed the severity of the suit by saying, "We are
confident that the allegations will prove meritless. Ridley has
at all times been in full compliance with regulations relevant
to the May 2003 BSE case."
The cattle industry was plunged into crisis when the U.S. shut
its border to Canadian beef in May 2003, after a single case of
BSE showed up in Alberta. "Canadian cattle producers have lost
$7 billion and counting as a result of the BSE crisis, and they
deserve to be fully compensated," said attorney Cameron Pallet,
one of four lawyers on the legal team.
CEQUENT TOWING: Recalls Hitch Receivers For Defect, Crash Hazard
----------------------------------------------------------------
Cequent Towing Products is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
358 Hidden Hitch hitch receivers, model 64-6215.
The hardware in certain Hidden Hitch Brand hitch receivers
manufactured by the Company between December 2003 and December
2004, P/N 64-6215, and installed exclusively on 2004 Gulfstream
Endura Class C motorhomes. The hardware may become loose,
allowing the hitch and towed unit to separate from the towing
vehicle. Should the towed load separate from the towing
vehicle, a crash could occur, possibly resulting in serious
injury or death.
The Company will notify the affected Gulfstream customers and
replace the hitch hardware free of charge. The recall is
expected to begin on March 2005. Owners who do not receive the
free remedy within a reasonable time should contact the Company
by Phone: 1-800-529-5522 EXTENSION 477 or contact the NHTSA's
auto safety hotline: 1-888-327-4236.
CHOICEPOINT INC.: Consumers Initiate Fraud Lawsuit in CA Court
--------------------------------------------------------------
ChoicePoint, Inc. faces a class action filed on February 18,
2005 in the Superior Court of the State of California, County of
Los Angeles. The lawsuit alleges, among other things, violations
of California law in connection with the recent fraud incident
in Los Angeles.
On September 27, 2004, the Company found evidence of suspicious
activity by a few of its small business customers in the Los
Angeles area. The Company notified law enforcement authorities
in Los Angeles, and they commenced an investigation. These
customers opened ChoicePoint accounts by using stolen identities
and altered documents. These small business customers were able
to access information services containing primarily the
following: consumer names, current addresses and former
addresses, social security numbers, driver's license numbers,
other public filings information, including, but not limited to,
bankruptcies, liens and judgments, professional licenses, and
real property data, and in certain cases, credit reports.
The plaintiff purports to bring the lawsuit on behalf of a class
of others similarly situated and seeks injunctive relief and
damages in an unspecified amount. The Company intends to defend
the lawsuit vigorously, according to its disclosure with the
Securities and Exchange Commission.
CHOICEPOINT INC.: Consumers Launch Privacy Lawsuits in C.D. CA
--------------------------------------------------------------
ChoicePoint, Inc. faces two class actions filed in the United
States District Court for the Central District of California,
alleging violations of privacy and credit reporting laws.
On September 27, 2004, the Company found evidence of suspicious
activity by a few of its small business customers in the Los
Angeles area. The Company notified law enforcement authorities
in Los Angeles, and they commenced an investigation. These
customers opened ChoicePoint accounts by using stolen identities
and altered documents. These small business customers were able
to access information services containing primarily the
following: consumer names, current addresses and former
addresses, social security numbers, driver's license numbers,
other public filings information, including, but not limited to,
bankruptcies, liens and judgments, professional licenses, and
real property data, and in certain cases, credit reports.
The first suit was filed on February 22, 2005, alleging that the
recent incident in Los Angeles violates the federal Fair Credit
Reporting Act (FCRA), various California statutes and the
privacy rights of the plaintiffs. The plaintiff purports to
bring the lawsuit on behalf of a class of affected persons and
seeks an injunction to prevent the Company from disclosing
consumer information improperly and to require the Company to
allow the plaintiffs to be excluded from its databases. The
suit also seeks damages of up to $1,000 for each violation of
the FCRA and unspecified punitive damages.
Another suit was filed on March 8, 2005, alleging that the
recent incident in Los Angeles violates the FCRA and the
California Consumer Credit Reporting Agencies Act. The plaintiff
purports to bring the lawsuit on behalf of a class of affected
persons and seeks an injunction to prevent the Company from
disclosing consumer information improperly. The suit also seeks
actual damages of up to $1,000 for each violation of the FCRA
and punitive damages.
CHOICEPOINT INC.: Shareholders Launch Fraud Lawsuits in GA, CA
--------------------------------------------------------------
ChoicePoint, Inc. faces several securities class actions filed
in California and Georgia federal courts, related to the
September 27, 2004 incident when a few of its small business
customers in the Los Angeles area opened ChoicePoint accounts by
using stolen identities and altered documents.
These small business customers were able to access information
services containing primarily the following: consumer names,
current addresses and former addresses, social security numbers,
driver's license numbers, other public filings information,
including, but not limited to, bankruptcies, liens and
judgments, professional licenses, and real property data, and in
certain cases, credit reports.
On March 4, 2005, a purchaser of the Company's securities filed
a lawsuit against the Company and certain of its officers in the
United States District Court for the Central District of
California. The complaint alleges that the defendants violated
federal securities laws by issuing false or misleading
information in connection with the events described above.
Since then, additional complaints alleging substantially similar
claims have been filed by other purchasers of the Company's
securities in the Central District of California on March 10,
2005 and in the Northern District of Georgia on March 11, 2005.
Each of these lawsuits purports to be filed on behalf of a class
of the Company's shareholders who purchased the Company's common
stock between certain specified dates and seeks certification as
a class action and unspecified compensatory damages, attorneys'
fees, costs and other relief. The Company is also aware that
several law firms who specialize in representing investors have
issued notices to the public informing investors that a lawsuit
has been filed against the Company and soliciting individuals
who are interested in becoming lead plaintiffs of the putative
class. These other firms, or other plaintiffs, may have already
filed or may file in the future substantially similar claims
seeking substantially similar relief.
CHOICEPOINT INC.: Seeks Summary Judgment in FL Privacy Lawsuit
--------------------------------------------------------------
ChoicePoint, Inc. asked the United States District Court for the
Middle District of Florida, to grant summary judgment in its
favor in the class action styled "Fresco, et al. v. Automotive
Directions Inc., et al."
The suit alleges that the Company has obtained, disclosed and
used information obtained from the Florida Department of Highway
Safety and Motor Vehicles (DHSMV) in violation of the federal
Driver's Privacy Protection Act (DPPA). The plaintiffs seek to
represent classes of individuals whose personal information from
Florida DHSMV records has been obtained, disclosed and used for
marketing purposes or other allegedly impermissible uses by the
Company without the express written consent of the individual.
A number of the Company's competitors have also been sued in the
same or similar litigation in Florida. The Company has also
joined in a motion for judgment on the pleadings. The complaint
seeks certification as a class action, compensatory damages,
attorney's fees and costs, and injunctive and other relief.
CHOICEPOINT INC.: Consumers Initiate Fraud Lawsuit in IL Court
--------------------------------------------------------------
ChoicePoint, Inc. faces a class action lawsuit filed in the
Circuit Court of the First Judicial Circuit, Williamson County,
Illinois, alleging that the Company violated the Illinois
Consumer Fraud and Deceptive Practices Act.
The Company allegedly sold information that it received from
insurance agent customers through underwriting inquiries as
leads (names of individuals seeking insurance) for automobile
and homeowner's insurance to those same insurance agent
customers as well as their competitors. The complaint seeks
certification as a class action, compensatory damages,
attorney's fees and costs and injunctive and other relief.
CITIGROUP GLOBAL: Continues To Face NY Shareholder Litigation
-------------------------------------------------------------
Citigroup Global Markets, Inc. (formerly Salomon Smith Barney,
Inc.) and other investment banks continue to face a consolidated
securities class action filed in the United States District
Court for the Southern District of New York, alleging violations
of certain federal securities laws (including Section 11 of the
Securities Act of 1933, as amended, and Section 10(b) of the
Securities Exchange Act of 1934, as amended) with respect to the
allocation of shares for certain initial public offerings and
related aftermarket transactions and damage to investors caused
by allegedly biased research analyst reports.
On February 19, 2003, the Court issued an opinion denying
defendants' motion to dismiss. On October 13, 2004, the court
granted in part the motion to certify class actions for six
focus cases in the securities litigation. The Company is not a
defendant in any of the six focus cases. The underwriter
defendants in the focus cases have filed a petition to the
United States Court of Appeals for the Second Circuit seeking
review of this decision.
Also filed in the same court against the Company and other
investment banks were several alleged class actions that were
consolidated into a single class action alleging violations of
certain federal and state antitrust laws in connection with the
allocation of shares in initial public offerings when acting as
underwriters. On November 3, 2003, the court granted the
Company's motion to dismiss the consolidated amended complaint
in the antitrust case. An appeal to the Second Circuit of the
dismissal granted to the Company in November 2003 with respect
to the antitrust case relating to the allocation of shares for
certain initial public offerings is pending.
CITIGROUP GLOBAL: Faces Litigation Due To Relationship W/ Enron
---------------------------------------------------------------
Citigroup Global Markets, Inc. (formerly Salomon Smith and
Barney, Inc., now CGM), Citigroup, Inc. (Citigroup) and various
other Citigroup-related entities continue to face over 20 civil
lawsuits pending in state and federal courts throughout the
United States, alleging claims based on their dealings with
Enron Corporation. The majority of these cases have been brought
by purchasers and sellers of Enron equity and debt securities
and Enron-linked securities. Many of the plaintiffs in these
actions are large, institutional investors that had substantial
Enron and Enron-linked holdings.
The lawsuits collectively allege as against Citigroup and/or its
affiliates and subsidiaries, among other things, federal
securities fraud, state law claims of negligent
misrepresentation, fraud, breach of fiduciary duty, aiding and
abetting a breach of fiduciary duty and related claims. In most
of these lawsuits, Citigroup is named as a co-defendant along
with other investment banks alleged to have had dealings with
Enron. The majority of cases pending in the federal courts have
been, or are in the process of being, consolidated before a
single judge in the United States District Court for the
Southern District of Texas.
In addition, in five adversary proceedings in the Enron Chapter
11 bankruptcy, Enron and, in one case, its co-debtor affiliates
and subsidiaries, and the Official Committee of Unsecured
Creditors of Enron Corp., et al., have named Citigroup and/or
its affiliates or subsidiaries as defendants.
CITIGROUP GLOBAL: Working To Settle WorldCom Securities Lawsuit
---------------------------------------------------------------
Citigroup Global Markets, Inc. (formerly Salomon Smith & Barney,
Inc.) is working on the settlement of the consolidated
securities class action filed against it, WorldCom, Inc.,
certain of its officers and directors, and several other
WorldCom former auditors on behalf of individuals and entities
who purchased or acquired publicly traded securities of WorldCom
between April 29, 1999 and June 25, 2002.
The suit, styled "In Re: Worldcom, Inc. Securities Litigation,"
asserts claims against the Company under Sections 11 and
12(a)(2) of the Securities Act of 1933, as amended, in
connection with certain bond offerings in which it served as
underwriter, and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
under Section 10(b), alleging that it participated in the
preparation and/or issuance of misleading WorldCom registration
statements and disseminated misleading research reports
concerning WorldCom stock.
In 2003, the district court denied the Company's motion to
dismiss the consolidated class action complaint and granted the
plaintiffs' motion for class certification. Pursuant to an
order entered May 28, 2003, the District Court consolidated
approximately seventy-eight individual actions with the class
action for pretrial proceedings. The claims asserted in these
individual actions are substantially similar to the claims
alleged in the class action and assert state and federal
securities law claims based on the Company's research reports
concerning WorldCom and/or its role as an underwriter in
WorldCom offerings. Plaintiffs in certain of these actions filed
motions to remand their cases to state court. The District
Court denied these motions and its rulings were upheld on
appeal.
Numerous other actions asserting claims against the Company in
connection with its research reports about WorldCom and/or its
role as an investment banker for WorldCom are pending in other
federal and state courts around the country. These actions have
been remanded to various state courts, are pending in other
federal courts, or have been conditionally transferred to the
United States District Court for the Southern District of New
York to be consolidated with the class action. In addition to
the court suits, actions asserting claims against Citigroup and
certain of its affiliates relating to its WorldCom research
reports are pending in numerous arbitrations around the country.
These actions assert claims that are substantially similar to
the claims asserted in the class action.
On May 10, 2004, the Company announced that it had agreed to pay
$2.58 billion to settle the WorldCom class action suits. The
United States District Court for the Southern District of New
York granted approval to the proposed settlement on November 10,
2004.
CITIGROUP GLOBAL: Reaches Settlement For WorldCom Lawsuit in NY
---------------------------------------------------------------
Citigroup Global Markets, Inc. reached a settlement for the
class action filed against it and others in the United States
District Court for the Southern District of New York, styled
"Weinstein, et al. v. Ebbers, et al." The suit was brought on
behalf of holders of WorldCom securities asserting claims based
on, among other things, the Company's research reports
concerning WorldCom.
The court dismissed the suit with prejudice in its entirety.
The plaintiffs noticed an appeal of the dismissal to the United
States Court of Appeals for the Second Circuit on October 15,
2004. The parties have reached an agreement in principle on the
terms of a settlement of this action.
CITIGROUP GLOBAL: NY Court Approves Settlement for TARGETS Suit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York preliminarily approved the settlement of the class
action filed against Citigroup Global Markets, Inc., Citigroup,
Inc. and certain of its former employees, styled "In re Target
Securities Litigation.
On June 28, 2004, the court dismissed all claims under the
Securities Act of 1933, as amended, and certain claims under the
Securities Exchange Act of 1934, leaving only claims under the
1934 Act for purchases of Targeted Growth Enhanced Terms
Securities With Respect to the Common Stock of MCI WorldCom,
Inc. ("TARGETS") after July 30, 1999. On October 20, 2004, the
parties signed a Memorandum of Understanding setting forth the
terms of a settlement of all remaining claims in this action.
The settlement was preliminarily approved by the Court on
January 11, 2005.
CITIGROUP GLOBAL: Reaches Settlement For NY Global Crossing Suit
----------------------------------------------------------------
Citigroup Global Markets, Inc., Citigroup, Inc., Citigroup
Global Market Holdings, Inc. (CGMH) reached a settlement with
parties in the class action filed against them in the United
States District Court for the Southern District of New York,
styled "In Re: Global Crossing, Ltd. Securities Litigation."
The suit also names as defendants certain of Global Crossing's
officers and current and former employees.
The consolidated complaint was filed on behalf of purchasers of
the securities of Global Crossing and Asia Global Crossing. The
purported class action complaint asserts claims under the
federal securities laws alleging that the defendants issued
research reports without a reasonable basis in fact and failed
to disclose conflicts of interest with Global Crossing in
connection with published investment research.
On March 22, 2004, the lead plaintiff amended its consolidated
complaint to add claims on behalf of purchasers of the
securities of Asia Global Crossing. The added claims assert
causes of action under the federal securities laws and common
law in connection with the Company's research reports about
Global Crossing and Asia Global Crossing and for its roles as an
investment banker for Global Crossing and as an underwriter in
the Global Crossing and Asia Global Crossing offerings.
The Citigroup related defendants moved to dismiss all of the
claims against them on July 2, 2004. The plaintiffs and the
Citigroup related defendants have reached an agreement in
principle on the terms of a settlement of this action.
CITIGROUP INC.: Plaintiffs Appeal NY Securities Suit Dismissal
--------------------------------------------------------------
Plaintiffs appealed the dismissal of a consolidated securities
class action filed against Citigroup, Inc., Citigroup Global
Markets, Inc., and certain of its officers in the United States
District Court for the Southern District of New York, brought on
behalf of purchasers of Citigroup, Inc.'s common stock between
July 24, 1999 and July 23, 2002.
The complaint seeks unspecified compensatory and punitive
damages for alleged violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and for common law fraud.
Fourteen virtually identical complaints have been filed and
consolidated. The complaints allege that Citigroup misstated
the extent of its Enron-related exposure, and that Citigroup's
stock price fell once the true extent of Citigroup's Enron
involvements became known. Plaintiffs filed an amended
complaint on March 10, 2003, which incorporated the allegations
in the 15 separate actions and added new material as well. The
amended complaint focuses on certain transactions between
Citigroup and Enron and alleged analyst conflicts of interest.
The class period for the consolidated amended complaint is July
24, 1999 to December 11, 2002.
On June 2, 2003, Citigroup filed a motion to dismiss the
consolidated amended complaint. Plaintiffs' response was filed
on July 30, and Citigroup's reply was filed on October 3, 2003.
On August 10, 2004, Judge Swain granted Citigroup's motion to
dismiss the consolidated amended complaint. The plaintiffs filed
a notice of appeal in October 2004.
DAIMLERCHRYSLER AG: IL Judge Dismisses Part Of Race Bias Lawsuit
----------------------------------------------------------------
A federal judge dismissed claims by one of six plaintiffs in a
lawsuit accusing DaimlerChrysler AG's financing arm of
discriminating against black car-buyers, The Associated Press
reports.
DaimlerChrysler Services North America LLC in Farmington Hills,
Michigan, which does business as Chrysler Financial and
Mercedes-Benz Credit, had asked the U.S. District Court for the
Northern District of Illinois to dismiss all of the charges.
U.S. District Judge Mark Filip ruled that the case, which seeks
class-action status, could proceed with five of the six
plaintiffs, the Detroit Free Press reports.
According to Chris O'Hara, an attorney for the plaintiffs,
"We're very encouraged to win five out of six." On the other
hand, DaimlerChrysler spokesman James Ryan said, "We're
certainly pleased one plaintiff has been dismissed."
Former Chicago-area dealer Gerald Gorman and some of his
minority customers filed separate lawsuits against
DaimlerChrysler in February 2003.
The suits said that Chicago-area DaimlerChrysler executives
would not give loans or fair interest rates to customers at Mr.
Gorman's dealerships because they were located in neighborhoods
with many minorities and that the executives explained their
reasons with racist language.
In depositions, DaimlerChrysler Services employees testified
that the Company's longtime former Chicago zone manager, Erv
Sirovy, regularly used racist language in the office and asked
the race of a loan applicant at least once.
However, DaimlerChrysler has said it does not tolerate racism or
discrimination.
As previously reported in the February 5, 2003 edition of the
Class Action Reporter, a group of customers filed a class action
against DaimlerChrysler's financing subsidiary accusing it of
denying credit to customers in the Chicago area, based on race,
and repossessing vehicles of customers living in predominantly
black neighborhoods without justification or proper
notification.
The suit claims that the Chrysler financing subsidiary's
management systematically and intentionally denied low-interest
vehicle financing to creditworthy blacks in two Chicago
neighborhoods, based on the neighborhood in which they lived and
the dealership they selected to purchase the car. The suit also
contends that the practice still continues in the Chicago area
and Chrysler's Illinois sales zone.
Filed in the U.S. District Court for the Northern District of
Illinois on behalf of six black purchasers of Chrysler vehicles,
the suit seeks to represent all people of color in Chrysler's
Illinois sales zone who have been denied financing from Chrysler
despite their creditworthiness. The suit names DaimlerChrysler
Services North America, LLC, d/b/a Chrysler Financial Company,
LLC, a wholly owned subsidiary and captive financing arm of
DaimlerChrysler, as the defendant.
The suit describes meetings between Chrysler and its dealerships
in which Chrysler executives disclosed - using racist slurs and
derogatory comments - that Chrysler did not want to finance car
purchases by blacks, claiming they are inherently higher credit
risks.
According to the suit, Chrysler uses an automated computer
program called the ACE (Automated Credit Evaluation) System,
which is designed to give colorblind, objective credit
evaluations to customers applying for financing from Chrysler.
However, the complaint argues that Chrysler modified the ACE
System software with a "disabling switch" that rerouted all
applications from particular dealerships for subjective review
by an employee at Chrysler Regional Headquarters. The suit cites
two dealerships in which virtually every credit application
submitted by a black customer was denied financing regardless of
credit scores.
Plaintiff Jerrell Coburn, one of the six named plaintiffs,
received a score of 656 on the Empirica scale, a system used by
one of the three largest credit-reporting bureaus in the United
States, and a score that should have qualified him for Chrysler
promotional financing, according to the complaint. After
Chrysler denied his credit application, Mr. Coburn received
financing from another financial institution at a much higher
interest rate.
The suit claims Chrysler has denied financing to creditworthy
black applicants at two Chicago-area dealerships since at least
April 2001. In September of 2002, Chrysler began denying all
credit applications from the Marquette dealership, and continues
to deny financing to the dealership, the complaint states.
Another named plaintiff, Vanessa Dampeer, had a similar
experience; finding out Chrysler refused to finance her purchase
only after taking delivery of the Chrysler Sebring. "Overnight,
we went from zero percent financing to 14 percent," Ms. Dampeer
said.
Steve Berman, managing partner of Hagens Berman, one of the law
firms representing the plaintiffs, believes that other
dealerships around the country suffer from redlining by
Chrysler. "These extreme comments and policies existed at
Chrysler for too long to simply be an anomaly," he said.
Corroborated by several witnesses and detailed in the complaint,
two separate Chrysler zone managers charged meetings with racial
slurs and extremely derogatory comments such as:
(1) "We found out these 'mulingianos' (a derogatory racial
slur) were getting (sales contracts) bought and
(financing) approved by Chrysler when they should be
standing on the bus. And if it weren't for Rosa Parks,
those niggers would still be standing in the back of
the bus." (par. 77)
(2) "My whole office knows that I don't buy nigger paper."
(Meaning: My whole office knows that I don't provide
financing for black customers.) (par. 78)
(3) "Now you can see why I don't buy (financing for)
mulingianos." (par. 94)
Addressing a question about the disparity between financing
customers in minority populated neighborhoods and suburban
neighborhoods: "Well, you've got to give the nigger a little
credit for shopping in the suburbs where the washrooms are
cleaner, and he has a better chance of getting off the lot with
his new ride without getting killed." (par. 105)
The suit also states Chrysler leadership was well aware of the
attitudes and behaviors of its regional operations. According to
the suit, during a meeting in June 2002, Chrysler Financial Vice
President Brad Norman participated in a meeting in which the
Chicago zone manager stated, "Well guys, what did we decide to
do with Gerry's nigger deals?" At no time did the executive from
Chrysler's corporate headquarters in Detroit challenge the
racist remark, the suit contends.
The complaint also charges that when 70 Marquette dealership
customers obtained financing, Chrysler renounced the executed
financing agreements as 'nigger deals,' and unlawfully
repossessed all or some of the 70 vehicles. According to the
complaint, many of the vehicles were repossessed from owners who
never missed a payment or were only marginally late with a
payment.
Chrysler's attempts to repossess these vehicles began a series
of meetings that exposed Chrysler's allegedly racist policies.
In these meetings, Chrysler's regional zone manager asserted
that the only way the black purchasers of Chrysler vehicles
qualified for financing in the first place was through a
fraudulent conspiracy between dealership employees and insiders
within Chrysler, the complaint states. Despite having no
evidence, Chrysler's zone manager forced Marquette owner Gerald
Gorman into taking financial responsibility for the allegedly
fraudulent deals by threatening to close down his dealership
unless a full recourse deal was signed, the complaint argues.
In this deal, the zone manager promised to allow Mr. Gorman to
assist with collecting payments on the sales contracts, provide
notice to Gorman if customers fell behind in their payments, and
help mitigate the costs to Mr. Gorman as a result of the
repossessions, the suit states. According to the complaint,
Chrysler immediately began repossessing vehicles purchased by
blacks and returning them to the Marquette dealership, without
notifying Mr. Gorman.
The repossessions turned away customers from the dealerships and
severely hurt their bottom line, according to the complaint.
The two dealerships have filed suit against Chrysler, claiming
breached contracts and forced agreements brokered by Chrysler
zone managers resulted in severe financial losses.
The class action seeks damages related to civil rights
violations and the paying of higher interest rates by
plaintiffs, as well as punitive damages to deter the company
from discriminatory conduct.
For more details, contact Steve Berman by Phone: (206) 623-7292
by E-mail: steve@hagens-berman.com or contact Mark Firmani by
Phone: (206) 443-9357 by E-mail: mark@firmani.com or visit the
firm's Website: http://www.hagens-berman.com.
DECODE GENETICS: NY Court Preliminarily Approves Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against deCODE
genetics, Inc., two individuals who were executive officers of
the Company at the time of its initial public offering (the
"Individual Defendants"), and the two lead underwriters (the
"Underwriter Defendants") for its initial public offering in
July 2000 (the "IPO").
The suit was filed on April 20, 2002, and is styled "In re
deCODE genetics, Inc. Initial Public Offering Securities
Litigation (01 Civ. 11219(SAS))." The suit alleges violations
of federal securities laws in connection with the Company's
initial public offering.
The Company is aware that similar allegations have been made in
hundreds of other lawsuits filed (many by some of the same
plaintiff law firms) against numerous underwriter defendants and
issuer companies (and certain of their current and former
officers) in connection with various public offerings conducted
in recent years. All of the lawsuits that have been filed in
the Southern District of New York have been consolidated for
pretrial purposes before United States District Judge Shira
Scheindlin. Pursuant to the underwriting agreement executed in
connection with the Company's IPO, the Company demanded
indemnification from the Underwriter Defendants. The
Underwriter Defendants asserted that the Company's request for
indemnification is premature.
Pursuant to an agreement the Individual Defendants have been
dismissed from the case without prejudice. On July 31, 2003,
the Company's Board of Directors (other than its Chairman and
Chief Executive Officer, who recused himself because he was an
Individual Defendant) approved a proposed partial settlement
with the plaintiffs in this matter, subject to a number of
conditions, including the participation of a substantial number
of other issuer defendants in the proposed settlement, the
consent of the Company's insurers to the settlement, and the
completion of acceptable final settlement documentation. Any
direct financial impact of the proposed settlement is expected
to be borne by the Company's insurers.
In conjunction with the plaintiffs, the settling issuer
defendants filed a motion seeking the court's preliminary
approval of the settlement. On February 15, 2005, the court
granted the motion, subject to certain modifications. The
parties are directed to report back to the court regarding the
modifications. If the parties are able to agree upon the
required modifications, and such modifications are acceptable to
the court, notice will be given to all class members of the
settlement and a "fairness" hearing will be held. If the court
determines that the settlement is fair to the class members, the
settlement will be approved. There can be no assurance that
this proposed settlement will be approved and implemented in its
current form, if at all.
The suit is styled "In re deCODE genetics, Inc. Initial Public
Offering Securities Litigation (01 Civ. 11219(SAS))," related to
"In re Initial Public Offering Securities Litigation, Master
File No. 21 MC 92 (SAS)," filed in the United States District
Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
DECODE GENETICS: Shareholders Launch Securities Suit in S.D. NY
---------------------------------------------------------------
deCODE Genetics, Inc., its chief executive officer and chief
financial officer faces a consolidated class action filed in the
United States District Court for the Southern District of New
York.
Several suits were initially filed, alleging violations of
federal securities laws arising from certain of the Company's
public statements. The complaints are brought by plaintiffs
seeking to represent a purported class consisting of all persons
who purchased the Company's common stock during the period from
October 29, 2003 through August 26, 2004. The complaints also
allege that the Company made misleading statements,
misrepresentations and omissions regarding its financial
performance, compliance with generally accepted accounting
principles and its internal controls. The complaints all arise
out of the same alleged statements, and have been consolidated
before a single Judge. The plaintiffs seek unspecified monetary
damages and other relief.
Initial Pretrial Conference in the suit is set for April
29,2005, 11:00 AM before Judge Richard J. Holwell of the
Southern District of New York.
The lead case in the litigation is styled "Bassin v. deCode
Genetics, Inc., et al., case no. 1:04-cv-07050-RJH," filed in
the United States District Court for the Southern District of
New York, under Judge Richard J. Holwell. Lead counsel for the
plaintiffs is David Avi Rosenfeld, Lerach, Coughlin, Stoia,
Geller, Rudman & Robbins, LLP 200 Broadhollow Road, Ste. 406
Melville, NY 11747 Phone: 631-367-7100 Fax: 631-367-1173 Email:
drosenfeld@lerachlaw.com.
DIRECT GENERAL: Shareholders Launch Securities Suits in M.D. FL
---------------------------------------------------------------
Direct General Corporation and certain of its officers and
directors face four putative class action lawsuits filed in the
United States District Court for the Middle District of
Tennessee between January 31, 2005 and February 8, 2005.
In each of these lawsuits, the plaintiffs allege that the
Company and certain of its officers and directors made false and
misleading statements with respect to liabilities that had been
recorded for unpaid losses and loss adjustment expenses.
Plaintiffs allege that the Company's reported results did not
fairly and adequately represent its financial position, that
certain legislation in Florida which became effective in October
2003 negatively impacted the Company's business and increased
its liability and risk of litigation and that the Company failed
to adequately strengthen its loss reserves to account for this
increased risk. The lawsuits further allege that certain
officers and directors sold shares of Company stock while they
knew of the negative impact of the change but before it was
publicly released. The plaintiffs in the case seek to recover
damages on behalf of all purchasers of Company stock during a
class period to be determined and attorneys' fees on behalf of
themselves and others similarly situated.
DOBSON COMMUNICATIONS: Shareholders Launch OK Stock Fraud Suits
---------------------------------------------------------------
Dobson Communications Corporation and certain of its officers
and directors face several securities class actions filed in the
United States District Court for the Western District of
Oklahoma.
The suits allege violations of the federal securities laws and
seek unspecified damages, purportedly on behalf of a class of
purchasers of the Company's publicly traded securities in the
period between May 19, 2003 and August 9, 2004. In particular,
the lawsuits allege that the Company concealed significant
decreases in revenues and failed to disclose certain facts about
our business, including:
(1) that the Company's rate of growth in roaming minutes
was substantially declining, and that it had
experienced negative growth in October 2003;
(2) that AT&T Wireless, its largest roaming customer, had
notified the Company that it wanted to dispose of its
equity interest in the Company that it had held since
its initial public offering, significantly decreasing
their interest in purchasing roaming capacity from the
Company;
(3) that Bank of America intended to dispose of its
substantial equity interest in the Company as soon as
AT&T Wireless disposed of its equity interest in the
Company;
(4) that the Company had been missing sales quotas and
losing market share throughout the relevant period; and
(5) that the Company lacked the internal controls required
to report meaningful financial results.
The suits are pending in the United States District Court for
the Western District of Oklahoma. The first identified
complaint in the litigation is styled "Anthony Viscuso, et al.
v. Dobson Communications, Inc., et al." The plaintiff firms in
this litigation are:
(i) Charles J. Piven World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202 Phone:
410.332.0030, E-mail: pivenlaw@erols.com;
(ii) Federman & Sherwood 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com;
(iii) Law Offices of Brian M. Felgoise, P.C. Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net;
(iv) Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr,
New York, NY, 10016 Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(v) Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr,
New York, NY, 10016 Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(vi) Schatz & Nobel, P.C. 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(vii) Schiffrin & Barroway, LLP 3 Bala Plaza E, Bala Cynwyd,
PA, 19004 Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
FRANCE: Ministers Begin Process Of Legalizing Class Action Suits
----------------------------------------------------------------
In a bid to strengthen consumer rights, French government
ministers said they would begin the process of legalizing class-
action lawsuits, which allow claims on behalf of a group of
people, Bloomberg News reports.
At a press conference in Paris that was also attended by Justice
Minister Dominique Perben and Christian Jacob, the minister for
small businesses, Finance Minister Thierry Breton said, "We want
to devise a system that protects consumers as well as
companies." The officials are backing plans to form a working
group of lawyers, companies and consumers to propose
legislation.
As previously reported in the January 10, 2005 edition of the
Class Action Reporter, France's President, Jacques Chirac,
shocked business leaders by announcing that he had instructed
his government to introduce class action lawsuits, a move that
was welcomed by French consumer groups, but fiercely criticized
by big companies.
According to the consumer groups, introduction of collective
lawsuits would help redress the balance of economic power,
currently weighted in favor of producers, since unlike the
United States, France has few powerful consumer champions or
shareholder rights groups and independent pension funds capable
of taking on powerful companies. The government stressed though
that it would learn from the American's experience and prevent
any abuses of the system by unscrupulous lawyers.
However, Ernest-Antoine SeilliŠre, president of Medef, the
French employers' federation, warns that class action lawsuits
could have "catastrophic consequences" and added "We are very
active in trying to limit these measures," Bloomberg News
reports.
Francis Caballero, a Paris-based lawyer and a professor of civil
law at Nanterre University who drafted a bill to introduce
class-action lawsuits in France in 1986 disagrees with the Medef
president's sentiments, telling Bloomberg News "Class actions
are a formidable tool to establish a counterweight to companies'
power. We just have to make sure we avoid the excesses they have
in the U.S."
Minister Breton told Bloomberg News that one of the goals of the
group would be "to avoid an excessively litigious society. We'll
be looking at the experience of other countries, but we want to
take into account the situation in France."
The Ministry for Small Business will set up the working group to
study how to implement class-action suits, Minister Jacob adds.
The group will produce a document by October, as well as an
update on its work "before the summer." Under current statutes,
consumers in France must file lawsuits against corporations
individually. While consumer groups can sue companies, the
judgments in such cases are on their rights in principle.
Mr. Caballero stresses that a class-action law would enable
courts to decide issues more quickly and less expensively by
judging them once and distributing any damages to everyone
affected. France though should address concerns that have led to
abuses in the United States, he adds.
GABLES REALTY: Discover Proceeds in FL Lease Termination Lawsuit
----------------------------------------------------------------
Discovery is proceeding in the class action filed against Gables
Realty Limited Partnership in the Florida State Circuit Court,
alleging that fees charged when residents terminate their leases
prior to the end of term or terminate without sufficient notice
are not in compliance with state law.
The Company has appealed the Court's December 2004 Order
certifying the class. No trial date has been set. Discovery is
in progress with respect to many matters including, but not
limited to, the number of residents who were charged allegedly
improper fees, the amount of fees that were actually collected,
and reductions in actual damages due to unpaid rent that accrued
until the residents' premises were leased to a new resident.
GENERAL MOTORS: Recalls 707 SUVs For Brake Defect, Crash Hazard
---------------------------------------------------------------
General Motors Corporation is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 707 sport utility vehicles, namely:
(1) CHEVROLET / SUBURBAN, model 2005
(2) CHEVROLET / TAHOE, model 2005
(3) GMC / YUKON, model 2005
(4) GMC / YUKON XL, model 2005
On certain sport utility vehicles, the brake pedal pushrod
retainer may be missing. If the retainer is missing, the brake
booster pushrod could disengage from the brake pedal. This
could result in a loss of brakes, which could result in a crash.
Dealers will inspect the vehicles for the brake pedal pushrod
retainer and install one if its missing. The manufacturer began
contacting owners by telephone on March 10,2005. For more
details, contact Chevrolet by Phone: 1-800-630-2438 or GMC by
Phone: 1-866-996-9463, or contact the NHTSA's auto safety
hotline: 1-888-327-4236.
GROUP 1: Forges Settlement For TX State, Federal Antitrust Suits
----------------------------------------------------------------
Group 1 Automotive, Inc. reached a settlement for the three
class actions filed against certain of its Texas dealerships,
the Texas Automobile Dealers Association (TADA), and certain new
vehicle dealerships in Texas that are members of TADA.
Two state court class action lawsuits and one federal court
class action lawsuit were initially filed, alleging that since
January 1994, Texas dealers have deceived customers with respect
to a vehicle inventory tax and violated federal antitrust and
other laws.
In April 2002, the state court in which two of the actions are
pending certified classes of consumers on whose behalf the
action would proceed. In October 2002, the Texas Court of
Appeals affirmed the trial court's order of class certification
in the state action. The defendants requested that the Texas
Supreme Court review that decision, and the Court declined that
request on March 26, 2004. The defendants petitioned the Texas
Supreme Court to reconsider its denial, and that petition was
denied on September 10, 2004.
In the federal antitrust action, in March 2003, the federal
district court also certified a class of consumers. Defendants
appealed the district court's certification to the Fifth Circuit
Court of Appeals, which on October 5, 2004, reversed the class
certification order and remanded the case back to the federal
district court for further proceedings. In February 2005, the
plaintiffs in the federal action sought a writ of certiorari to
the United States Supreme Court in order to obtain review of the
Fifth Circuit's order. The defendants notified the U.S. Supreme
Court that they would not respond to the writ unless requested
to do so by the Court.
Also in February 2005, settlement discussions with the
plaintiffs in the three cases culminated in formal settlement
offers pursuant to which the Company could settle the state and
federal cases. The Company has not entered into the settlements
at this time, and, if it does, the settlements will be
contingent upon court approval. The proposed settlements
contemplate the Company's dealerships issuing certificates for
discounts off future vehicle purchases, refunding cash in some
circumstances, and paying attorneys' fees and certain costs.
Dealers participating in the settlements would agree to certain
disclosures regarding inventory tax charges when itemizing such
charges on customer invoices.
HYPERCOM CORPORATION: Shareholders Launch Fraud Suit in AZ Court
----------------------------------------------------------------
Hypercom Corporation, its chief executive officer and its chief
financial officer faces several purported shareholder class
action lawsuits filed in U.S. District Court, District of
Arizona, on behalf of purchasers of the Company's securities
during the period from April 30, 2004 to February 3, 2005,
alleging violations of the Securities Exchange Act of 1934.
These lawsuits are based on the Company's February 2005
announcement that certain leases in the United Kingdom had been
incorrectly accounted for as sales-type leases, rather than
operating leases, and that the Company would restate its
financial statements for the first three quarters of 2004. The
lawsuits seek damages against the defendants in an unspecified
amount.
ILLINOIS: Krislov & Associates Lodges Suit Over Absentee Ballot
---------------------------------------------------------------
A class action lawsuit has been filed by Clint Krislov of
Krislov & Associates, Ltd., in federal court in Chicago that
challenges a little known procedure for handling absentee
ballots which, Mr. Krislov asserts, deprives absentee voters
their civil rights under the Fourteenth Amendment to the United
States Constitution, specifically the denial of procedural due
process in the disqualification of absentee ballots.
Mr. Krislov was quoted: "Absentee voters already provide a
telephone number and an email address with their ballot. The
least officials could do is call them and give them 24 hours to
come down to defend their ballot!" Although the Illinois
Election Code requires notice given to those whose ballots are
rejected, there is no time requirement, nor any procedure to
defend a challenged ballot. As a result, rejected voters receive
notice of their rejected ballot months after the election, with
no way to have their ballot counted.
As noted in the case, ten ballots were rejected in just one
Highland Park precinct last November. Thus the numbers could
easily be enough to make a difference in the election result.
The case is titled Bruce Zessar v. Willard Helander, et al.,
United States District Court for the Northern District of
Illinois, No. 05-cv-1917, and is assigned to United States
District Judge David H. Coar. The plaintiff is represented by
Clinton A. Krislov of Krislov & Associates, Ltd. by Mail: 20
North Wacker Drive, Suite 1350, Chicago, Illinois 60606 by
Phone: (312) 606-0500 by Fax: (312) 606-0207 or by E-mail:
clint@krislovlaw.com. The following represents the defendants:
(1) Thomas A. Ioppolo of Illinois Attorney General's Office
by Mail: 100 West Randolph Street 13th Floor, Chicago,
IL 60601 by Phone: (312) 814-3313.
(2) Daniel L. Jasica of Lake County State's Attorney's
Office by Mail: 18 N. County Street, 3rd Floor,
Waukegan, IL 60085 by Phone: 847-360-6449.
(3) LeeAnn Richey of Office of the Attorney General by
Mail: 100 West Randolph Street by Mail: 13th Floor,
Chicago, IL 60601 by Phone: (312) 814-7087.
(4) Michael J Waller of Lake County State's Attorney's
Office by Mail: 18 North County Street, Waukegan, IL
60085 by Phone: (708) 360-6644.
(5) Carla Neuschel Wyckoff of Lake County State's
Attorney's Office by Mail: 18 North County Street, 3rd
Floor, Waukegan, IL 60085 by Phone: 847-377-3050.
ISRAEL POSTAL: Emron Special Files Suit Over Undelivered Letters
----------------------------------------------------------------
Emron Special Law Services launched a lawsuit against the
Israeli Postal Authority in Haifa District Court for failure to
deliver letters, asking the court to recognize the legal action
as a NIS 110 million ($25.2 million) class-action motion, The
Ha'aretz reports.
According to attorneys Dan Friedman and Yitzchak Younger, which
represents Emron, the suit claims that under the contract
between the postal service and each client, the authority
undertakes to deliver mail to its destination in exchange for
the NIS 1.30 charged for the stamp.
Specifically, the attorneys for Amron said that of the 700
million letters handled by the postal agency annually, 4.7% are
lost, never reaching their intended destination. Thus, Emron
argues the authority must repay customers for letters it failed
to deliver, in its case, four letters that cost a total of NIS
5.20 to send.
The plaintiff further argues that only the postal authority
knows the total number of affected senders, in the tens of
thousands. Emron also notes it isn't seeking damages, just
restitution for the price of the stamps.
L.S.K. SMOKED: Recalls Turkey, Pork For Listeria Contamination
--------------------------------------------------------------
L.S.K. Smoked Turkey Products, Inc., a Bronx, N.Y., firm, is
voluntarily recalling approximately 39,000 pounds of smoked
turkey and pork products that may be contaminated with Listeria
monocytogenes, the U.S. Department of Agriculture's Food Safety
and Inspection Service (FSIS) announced.
The products subject to recall are various sized and weight
packages of:
(1) 30 lb. bulk packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY TAILS."
(2) 30 lb. bulk packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY DRUMSTICKS."
(3) 30 lb. bulk packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY WINGS."
(4) 30 lb. bulk packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY NECKS."
(5) 35 lb. bulk packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED PORK NECK BONES."
The products listed above were produced on April 4, 2005, and
were shipped to distribution centers in Delaware, New Jersey,
New York and Florida for institutional use. Each box bears the
establishment code "P-19064" or "Est. 19064" inside the USDA
mark of inspection, along with a case code of "D-J-D."
The following products are also subject to recall:
(i) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED PORK HOCKS," with case and packaging codes
of 34438.
(ii) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY DRUMSTICKS," with case and
packaging codes of 14143.
(iii) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED PORK NECK BONES," with case and packaging
codes of 34422.
(iv) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY WINGS," with case and packaging
codes of 38542.
The products listed above were produced on April 4, 2005, and
were shipped to retail outlets in Delaware, New Jersey, New York
and Florida. Each product has a "sell by" date of 6-04-05 and
bears the establishment code "P-19064" or "Est. 19064" inside
the USDA mark of inspection.
The following products are also subject to recall:
(a) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED PORK RIB TIPS," with case and packaging
codes of 34464.
(b) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY DRUMSTICKS," with case and
packaging codes of 17142.
(c) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED PORK HOCKS," with case and packaging codes
of 34437.
(d) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY TAILS," with case and packaging
codes of 51681.
(e) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED PORK NECK BONES," with case and packaging
codes of 34420.
(f) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY NECKS," with case and packaging
codes of 10297.
(g) Two-pound packages of "L.S.K. SMOKED TURKEY PRODUCTS
INC., SMOKED TURKEY WINGS," with case and packaging
codes of 38540.
The products listed above were produced on April 4, 2005 and
were distributed to retail outlets in Delaware, New Jersey, New
York and Florida. Each product has a "sell by" date of 4-25-05
and bears the establishment code of "19064" or "Est. 19064"
inside the USDA mark of inspection.
The problem was discovered through FSIS regulatory 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 may contact
Company spokesman Alan Comroe at (718) 792-1300. 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.
MINNESOTA CORN: Parties Await Approval For $5.75 Mil Settlement
---------------------------------------------------------------
Farmers and the former executives of Minnesota Corn Processors
are awaiting a judge's approval for a $5.75 million settlement
in a lawsuit that accuses the executives of breaching their
responsibilities when they sold the business, The Associated
Press reports.
Attorneys for both parties appeared in Brown County District
Court for a final settlement hearing to determine whether the
agreement was fair with a ruling imminent by within a week, The
New Ulm Journal reported.
The class-action lawsuit, which was filed by the farmers,
claimed that former MCP executives misled shareholders when they
sold the business to Archer Daniels Midland in 2002. The suit
further claimed that the shareholders were not provided full
details of how eight executives would personally benefit from
the sale.
During the settlement hearing, the farmers' attorney Robert
Moilanen told District Judge John Rodenberg that nine farmers
submitted have written objections to the settlement. He cited
that some were mad over the fact MCP was sold, while others were
disappointed that a second offer from a third party wasn't
considered.
Others though thought that the agreement was "a quick settlement
by lawyers intending to enrich themselves," he said. However, he
reiterated, "This was anything but quick. It was long,
protracted and well-fought." In the end though, Mr. Moilanen
asked the court to reject the objections and to award his law
firm $1.9 million in fees.
For their part, attorney Patrick Williams, who represented the
executives, submitted an affidavit that he said showed that the
MCP sale price was fair according to industry standards and that
former CEO Dan Thompson conducted the merger well. Mr. Williams
pointed out that executives in Mr. Thompson's position have made
an average of $12.2 million in comparable transactions, while
Mr. Thompson only made $4.4 million in the sale.
MOSSIMO INC.: Wolf Popper Commences Shareholders' Lawsuit in DE
---------------------------------------------------------------
The law firm of Wolf Popper LLP initiated a class action lawsuit
on behalf of Mossimo, Inc. public shareholders (Nasdaq:MOSS) on
April 12, 2005 in the Delaware Court of Chancery, New Castle
County. The Complaint seeks to enjoin a proposed buy-out
transaction in which Mossimo's Chairman and Chief Executive
Officer seeks to buy out the outstanding public shares of
Mossimo for inadequate consideration.
For more details, contact James Kelly-Kowlowitz, Esq. of Wolf
Popper LLP by Mail: 845 Third Avenue, New York, NY 10022 by
Phone: 212.451.9635 or 877.370.7703 by Fax: 212.486.2093 or
877.370.7704 or by E-mail: irrep@wolfpopper.com.
NAUTILUS INC.: To Pay $950T Penalty For Not Reporting Defects
-------------------------------------------------------------
Nautilus Inc., of Vancouver, Washington, agreed to pay a
$950,000 civil penalty. The penalty, which has been
provisionally accepted by the U.S. Consumer Product Safety
Commission (CPSC), settles allegations that the company failed
to give CPSC timely reports on serious injuries and safety
defects with nearly 800,000 Bowflex fitness machines, CPSC
announced in a statement.
Under federal law, manufacturers, importers, distributors, and
retailers must immediately report information about potentially
hazardous products to the Commission. "The recent penalties
levied by CPSC send a strong message that failing to report
potential hazards is illegal," stated CPSC Chairman Hal
Stratton. "Companies need to understand that the quicker they
report product safety problems to CPSC, the quicker we can take
action together and protect consumers from injuries."
Between 1995 and December 2003, Nautilus made and sold about
420,000 Bowflex Power Pro fitness machines with a "Lat Tower"
and a backboard bench. The CPSC alleges that between December
1998 and July 2002, Nautilus knew of 27 incidents and 25
injuries to consumers when the backboard bench broke apart and
collapsed unexpectedly during use. The company allegedly knew,
but did not report to CPSC, that consumers suffered back, disc
and neck injuries and falls resulting in chipped teeth. In
addition, CPSC alleges that the Company failed to report a
June 2000 design change, intended to reinforce the bench by
adding a steel plate.
In January 2004, after the Company had finally reported in full,
CPSC and Nautilus announced the recall of Power Pro machines.
Between August 2002 and April 2004, Nautilus received 32 reports
of consumers suffering injuries when the seat pin on the Bowflex
Power Pro (with a "Lat Tower") and Ultimate fitness machines
unexpectedly broke or became disengaged during use. Nautilus, it
is alleged, failed to tell CPSC that users unexpectedly fell
back on the adjustable seat and suffered injuries. The injuries
included a blood clot, a laceration requiring stitches, pulled
ligaments and back, disc and neck injuries.
In November 2004, after the Company had finally reported in
full, CPSC and Nautilus announced a new recall of Power Pro and
Ultimate fitness machines.
Between January 1995 and April 2004, Nautilus made and sold
about 260,000 of the Bowflex Power Pro exercise machines without
a "Lat Tower." These fitness machines were equipped with an
incline support bracket for the workout bench. CPSC alleges that
between May 2001 and April 2004, Nautilus failed to report 28
injuries to consumers when the incline bracket broke or bent
unexpectedly during use. The injuries ranged from a laceration
requiring stitches to a fracture to back pain to numbness. In
August 2002, Nautilus made a design change to strengthen the
support bracket, but failed to report the defect or risk to CPSC
at that time.
In November 2004, CPSC and Nautilus announced a recall of the
Power Pro fitness machines.
After its first recall with CPSC last year, Nautilus worked with
CPSC to review its entire product line and cooperatively
determined the need for corrective measures. That review
resulted in two additional recalls last fall.
To see this press releases on CPSC's web site, including
pictures of the products involved, please go to
http://www.cpsc.gov/cpscpub/prerel/prhtml05/05152.html. The
U.S. Consumer Product Safety Commission is charged with
protecting the public from unreasonable risks of serious injury
or death from more than 15,000 types of consumer products under
the agency's jurisdiction. Deaths, injuries and property damage
from consumer product incidents cost the nation more than $700
billion annually. The CPSC is committed to protecting consumers
and families from products that pose a fire, electrical,
chemical, or mechanical hazard or can injure children. The
CPSC's work to ensure the safety of consumer products - such as
toys, cribs, power tools, cigarette lighters, and household
chemicals - contributed significantly to the 30 percent decline
in the rate of deaths and injuries associated with consumer
products over the past 30 years.
To report a dangerous product or a product-related injury, call
CPSC's hotline at (800) 638-2772 or CPSC's teletypewriter at
(800) 638-8270, or visit CPSC's web site:
http://www.cpsc.gov/talk.html.
NEW YORK: Firm Sanctioned For Incorrectly Including Defendants
--------------------------------------------------------------
Supreme Court Justice Bernard Fried has ordered the Manhattan
law firm of Dowd & Marotta to pay attorney's fees for
incorrectly including several defendants in a preliminary
injunction request arising from a corporate fraud and derivative
action claim, The New York Law Journal reports.
The case at the center of that decision, Adams v. Banc of
America Securities, 602297/04, had involved plaintiffs Mark
Adams and John Muldoon, acting on their own behalf and for
several trusts, who brought three separate yet related actions.
The first and second securities class actions, filed in federal
court, were dismissed, while the third, largely a shareholder
derivative claim, came before Justice Fried.
According to the plaintiffs, who were represented by Raymond
Dowd of Dowd & Marotta, the officers and directors of
IntraLinks, an Internet consulting firm, along with a number of
banks and others financial advisors issued new class G shares in
January 2001. The plaintiffs, who were minority shareholders,
claim they were excluded from the offer and thus their holdings
were diluted.
The second of several other allegations arose from what the
plaintiffs called a "freeze-out merger." In January 2004, the
defendant shareholders circulated term sheets for the proposed
re-capitalization of the company, but the following June, the
plaintiffs received a notice indicating that the defendants were
buying plaintiffs' shares for $0.035 per share, a transaction
that the plaintiffs claimed was fraudulent.
A third claim involved the role of defendant investment banks in
a failed initial public offering of IntraLinks. Allegedly, one
of these banks, JP Morgan Chase, refused to price the IPO
fearing a government investigation into its IPO allocation
practices.
Judge Scheindlin and a Southern District colleague, Judge Jed
Rakoff, dismissed these claims in two separate actions. The
state law claims before Justice Fried involved the same set of
facts. He dismissed all of the underlying substantive actions
and by referring to the federal decisions, Justice Fried agreed
that, "plaintiffs' claims and arguments . . . seem so ill-
defined and incoherent that they are, in the words of the
physicist Wolfgang Pauli, 'not even wrong.'" Additionally,
Justice Fried found structural problems with the complaint's
conflation of derivative and class action claims and improper
pleadings.
One claim against Fried, Frank, Harris, Shriver & Jacobson
involved tortious interference with a contract arising from term
sheets a Fried Frank associate sent to shareholders regarding
the alleged 2004 "freeze-out merger." According to plaintiffs,
the mailings interfered with the plaintiffs' rights under the
shareholder agreement and were meant to mislead them. Justice
Fried, like the federal judges, dismissed those claims, finding
the defendants had the necessary votes to effectuate the so-
called "freeze-out" transaction on their own. He also pointed
out that the defendants did not need to coerce or deceive the
plaintiffs to vote for the merger.
Justice Fried also dismissed the related claim against Fried
Frank, ruling that plaintiffs failed to show the law firm's
actions led to a breach of a contract with a third party as is
required under New York law for a tortious interference claim.
The judge held that the law firm's actions did not cause the
breach of any contract between the plaintiffs and other
shareholders. The judge also found that the plaintiffs should
not have moved for a preliminary injunction against Fried Frank
and other defendants: Banc of America Securities and JP Morgan
Chase. The injunction was sought to block the completion of some
transactions disputed by the plaintiffs.
In the end, the court held that four-lawyer Dowd & Marotta,
failed to offer adequate justification for the injunctive relief
it requested against Fried Frank and the two banks in oral
arguments or its court filings. "Counsel," Justice Fried wrote
referring a Dowd & Marotta's lawyer, "failed to articulate why
he sought to enjoin these three defendants based upon an
agreement to which none of them were parties." He further
wrote, "Counsel's conduct can be characterized as frivolous.
Significantly, counsel did not even attempt to provide a
meaningful explanation in opposition to the sanctions
application."
The judge instructed lawyers representing Fried Frank, Banc of
America, and JP Morgan to submit affidavits of the costs and
legal fees incurred in defending themselves. Though declining
to comment further, Mr. Dowd, who writes frequently for the Law
Journal, said Michael Armstrong of Kronish Lieb Weiner & Hellman
has taken charge of the underlying case, the Law Journal
reports.
Marc Zauderer of DLA Piper Rudnick Gray Cary represented Fried,
Frank, Harris, Shriver & Jacobson. Menachem Zelmanovitz of
Morgan, Lewis & Bockius represented JP Morgan Chase. Marshall
Beil of McGuireWoods represented Banc of America.
NEW YORK: Orange County Residents Join Suit V. DMV Rule Change
--------------------------------------------------------------
Three Orange County residents joined a class-action lawsuit
against a New York State Department of Motor Vehicles rule
change that would revoke the driving privileges of as many as
300,000 undocumented New Yorkers, The Times Herald-Record
reports.
The post-September 11 policy, which the DMV says is to prevent
fraud and abuse, requires drivers license holders to have a
valid Social Security number. However immigrant-rights
advocates, say the new rule could cost hundreds of thousands of
long-time New Yorkers their livelihoods.
In a news conference in Middletown, Hispanic American Group
Director George Figueroa said that the impact of the policy
would be particularly strong upstate, where public
transportation is limited. He also said that the three local
residents who joined the lawsuit are undocumented workers who
have been notified that they will soon lose their licenses.
As previously reported in the August 30, 2004 edition of the
Class Action Reporter, the Puerto Rican Legal Defense and
Education Fund (PRLDEF), a privately funded 501(c)(3) nonprofit
and nonpartisan organization filed a class action lawsuit in
State Supreme Court in Manhattan against the state policy.
According to the PRLDEF the policy is unlawful since it usurps
federal responsibility for immigration, oversteps state law on
issuing licenses and ignores due process. The group as well as
other immigrant advocates has denounced the policy as
discriminatory against non-citizens and dangerous to highway
safety.
Considered to be the first legal challenge to a new policy that
is characterized as a means of ferreting out fraud and foiling
would-be terrorists, the lawsuit names Gov. George E. Pataki and
the motor vehicles commissioner, Raymond P. Martinez, as
defendants. It is being filed on behalf of seven plaintiffs as
well as all New Yorkers denied a driver's license or identity
document for lack of a verifiable Social Security number or an
immigration document satisfactory to the Department of Motor
Vehicles.
According to the suit, most of the seven plaintiffs are here
without legal authorization, but two who are in the United
States legally also had their applications denied by motor
vehicles clerks without notice.
Cesar A. Perales, president of the Puerto Rican Legal Defense
and Education Fund said, "Clearly New York State has no
expertise in enforcing the immigration laws. It makes no sense
to me for New York State to have undertaken this new policy -
the federal government hasn't asked the governor and the
commissioner of motor vehicles to do this."
State officials have refused to make comments regarding the
lawsuit. However in recent interviews and at a public hearing a
few weeks back, Commissioner Raymond P. Martinez vigorously
defended as a public security measure his agency's move to
revoke the license of any driver unable to provide a verifiable
Social Security number or an immigration document granting a
year's legal residence and expiring in no less than six months.
NOVASTAR HOME: Reaches Settlement For Employee Wage Suit in CA
--------------------------------------------------------------
NovaStar Home Mortgage, Inc. (NMHI) and NovaStar Mortgage, Inc.
(NMI) reached a settlement for a class and collective action
filed against them in the United States District Court for the
Central District of California.
In July 2004, an employee of NHMI filed a class and collective
action lawsuit against NHMI and NMI in the California Superior
Court for the County of Los Angeles. Subsequently, NHMI and NMI
removed the matter to the United States District court for the
Central District of California. The plaintiff brought this
class and collective action on behalf of herself and all past
and present employees of NHMI and NMI who were employed since
May 1, 2000 in the capacity generally described as Loan Officer.
The plaintiff alleged that NHMI and NMI failed to pay her and
the members of the class she purported to represent overtime
premium and minimum wage as required by the Fair Labor Standards
Act and California state laws for the period commencing May 1,
2000.
In January 2005, the plaintiff and NHMI agreed upon a nationwide
settlement in the nominal amount of $3.1 million on behalf of a
class of all NHMI Loan Officers nationwide. The settlement,
which is subject to court approval, covers all minimum wage and
overtime claims going back to July 30, 2001, and includes the
dismissal with prejudice of the claims against NMI. Since not
all class members will elect to be part of the settlement, the
Company estimated the probable obligation related to the
settlement to be in a range of $1.3 million to $1.7 million.
The suit is styled "Dawn Robertson v. Novastar Mortgage Inc et
al, case no. 2:04-cv-08444-NM-CT," filed in the United States
District Court for the Northern District of California, under
Judge Nora M. Manella. Representing the plaintiffs are:
(1) Michael S. Duberchin of Michael S. Duberchin Law
Offices, 4768 Park Granada, Suite 212 Calabasas, CA
91302-3349 Phone: 818-222-7484;
(2) Andre E. Jardini, Knapp Petersen & Clarke 500 N Brand
Blvd, 20th Fl Glendale, CA 91203-1094 Phone: 818-547-
5000 E-mail: aej@kpclegal.com;
(3) Dennis F. Moss, Spiro Moss Barness Harrison and Barge
11377 West Olympic Blvd, 5th Floor Los Angeles, CA
90064 Phone: 310-235-2468 E-mail:
secretary@smbhblaw.com;
Representing the defendants are Maria A. Audero, Paul Grossman,
and Stephen P. Sonenberg, Paul Hastings Janofsky and Walker 515
South Flower Street, 25th Floor Los Angeles, CA 90071 Phone:
213-683-6000 E-mail: mariaaudero@paulhastings.com,
paulgrossman@paulhastings.com.
PAWTUCKET CREDIT: Attorney Launches Lawsuit Over ATM Fees in RI
---------------------------------------------------------------
A class action lawsuit charges Pawtucket Credit Union with
failing to have proper notices posted on its ATMs to advise of
its fees to out-of-network users, a violation that according to
the suit, could carry a $500,000 maximum penalty against the
seven-branch credit union under the federal U.S. Electronic
Funds Transfer Act, The Pawtucket Times reports.
The suit, which was filed in Superior Court by local attorney
Christopher Lefebvre, names as lead plaintiff city resident
Minoska B. Pena, who he said could be joined by numerous others
as part of the class.
Mr. Lefebvre told the Pawtucket Times that within hours of the
news release regarding the suit, PCU affixed a new notice
sticker to its ATM in the stand-alone kiosk across from City
Hall.
Robert Andrade, executive vice president and chief operating
officer for PCU, acknowledged the new sticker planted on the
Roosevelt Avenue kiosk but denied the credit union hadn't kept
up with the notice requirements. According to him, "We were
aware of the requirement to have the signs on the ATMs." He also
insisted that the notice stickers had all previously been
posted, but noted PCU uses an outside firm to service the cash
at the Roosevelt Avenue kiosk and the stickers could have been
removed by "vandalism." The stickers were already printed up, or
they would not have been so ready at hand to affix, he adds.
However, Mr. Lefebvre told the Pawtucket Times he had, over
several days, checked several PCU ATMs including the drive-
through at its Central Avenue headquarters before filing the
suit, and none had the stickers, which are required separately
from the fees notice that displays on the ATM screen.
As for the damages that would be decided in a jury trial, Mr.
Lefebvre, a 17-year attorney whose law office has keyed on
consumer issues for 10 years, told the Pawtucket Times that they
would be based on the number of out-of-network customers using
PCU's ATMs, times the fee, for the 365-day period prior to the
suit. He also said his compensation would come only from
reasonable attorneys' fees and costs as determined by the court.
A receipt filed in the case for Ms. Pena, the lead complainant,
shows she was charged a $1.50 fee for a $20 cash withdrawal at
the 150 Roosevelt Ave. kiosk on April 6, which left an account
balance of $8.32.
Mr. Lefebvre, who told the Pawtucket Times that he is being
assisted in the case by Daniel Edelman, a Chicago attorney with
wide experience in consumer claims, whom he was worked with
before, pointed out that by multiplying the $1.50 fee by the
likely thousands of similar transactions the prior year it would
yield a working figure for damages.
Mr. Andrade though maintains that once he learned of the sticker
complaints he notified his compliance department to check all of
PCU's ATMs. "We're aware of the law. If it was a temporary case
where it wasn't there," that would be rectified, he said.
PFIZER INC.: Toronto Law Firm Launches $550M Lawsuit Over Bextra
----------------------------------------------------------------
The Toronto law firm of McPhadden, Samac, Merner and Barry has
launched a national class action lawsuit against Pfizer, Inc.,
the maker of the pain-reliever Bextra, The 680News.com reports.
According to the firm, the $550 million suit is on behalf of
Canadians who suffered negative effects from the drug, including
heart attacks and death. The firm also stated that the initial
plaintiff is a Mississauga man who was taking Bextra for his
back condition.
Last week, both Health Canada and the U.S. Food and Drug
Administration requested that Pfizer voluntarily withdraw Bextra
from the market.
PRAECIS PHARMACEUTICALS: Plaintiffs Seek MA Suits Consolidation
---------------------------------------------------------------
Plaintiffs are requesting the consolidation of three securities
class actions filed against Praecis Pharmaceuticals, Inc. in the
United States District Court for the District of Massachusetts.
The suits also name as defendants:
(1) Chairman and (now former) Chief Executive Officer
Malcolm Gefter,
(2) President and (now former) Chief Operating Officer
Kevin F. McLaughlin,
(3) Chief Financial Officer and Treasurer Edward C.
English, and
(4) former President and Chief Operating Officer William K.
Heiden
Those purported class actions are captioned:
(i) Katz v. Praecis Pharmaceuticals, Inc., Malcolm Gefter,
Kevin McLaughlin, Edward English and William K. Heiden,
Civil Action No. 04-12581-GAO (filed December 9, 2004),
under Judge George A. O'Toole, Jr.
(ii) Schwartz v. Praecis Pharmaceuticals, Inc., Malcolm
Gefter, Kevin McLaughlin, Edward English and William K.
Heiden, Civil Action No. 04-12704-REK (filed December
27, 2004) under Judge Robert E. Keeton and
(iii) Bassin v. Praecis Pharmaceuticals, Inc., Malcolm L.
Gefter, Ph.D., Kevin F. McLaughlin, Edward C. English
and William K. Heiden, Civil Action No. 05-10134-GAO
(filed January 21, 2005) under Judge George A. O'Toole,
Jr.
The complaints generally allege securities fraud during the
period from November 25, 2003 through December 6, 2004. Each of
the complaints purports to assert claims under Sections 10(b)
and 20(a) of the Securities and Exchange Act of 1934 and Rule
10b-5 promulgated thereunder, and alleges that the Company and
the individually named defendants made materially false and
misleading public statements concerning the Company's business
and financial results, particularly relating to statements
regarding the commercialization of Plenaxis.
On February 7, 2005, a motion was filed to consolidate the three
actions and to appoint lead plaintiffs and lead counsel. On
February 18, 2005, the Company and the individual defendants
filed a brief response to that motion, reserving their rights to
challenge the adequacy and typicality, among other things, of
the proposed lead plaintiffs in connection with class
certification proceedings, if any. The Court has not yet
entered any Orders regarding the consolidation of the pending
cases or the appointment of lead plaintiffs and approval of such
plaintiffs' selection of lead counsel. At this time, plaintiffs
have not specified the amount of damages they are seeking in the
actions.
The plaintiff firms in this litigation are:
(1) Charles J. Piven World Trade Center-Baltimore, 401 East
Pratt Suite 2525, Baltimore, MD, 21202 Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) Dyer & Shuman, LLP 801 East 17th Avenue, Denver, CO,
80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, E-
mail: info@dyershuman.com
(3) Glancy Binkow & Goldberg LLP (LA) 1801 Ave. of the
Stars, Suite 311, Los Angeles, CA, 90067 Phone: (310)
201-915, E-mail: (310) 201-916, info@glancylaw.com
(4) Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr,
New York, NY, 10016 Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(5) Schatz & Nobel, P.C. 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(6) Schiffrin & Barroway, LLP 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(7) Shapiro, Haber & Urmy LLP 75 State Street, Boston, MA,
02109, Phone: 617.439.3939, Fax: 617.439.0134, E-mail:
info@shulaw.com
RADIO ONE: NY Court Preliminarily Approves Securities Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Radio One,
Inc. and certain of its officers and directors, styled "In re
Radio One, Inc. Initial Public Offering Securities Litigation,
Case No. 01-CV-10160."
Similar complaints were filed in the same court against hundreds
of other public companies (Issuers) that conducted initial
public offerings of their common stock in the late 1990s (the
IPO Lawsuits). In the complaint filed against the Company (as
amended), the plaintiffs claim that the Company, certain of its
officers and directors, and the underwriters of certain of its
public offerings violated Section 11 of the Securities Act of
1933 based on allegations that its registration statement and
prospectus failed to disclose material facts regarding the
compensation to be received by, and the stock allocation
practices of, the underwriters. The complaint also contains a
claim for violation of Section 10(b) of the Securities Exchange
Act of 1934 based on allegations that this omission constituted
a deceit on investors. The plaintiffs seek unspecified monetary
damages and other relief.
In July 2002, the Company joined in a global motion, filed by
the Issuers, to dismiss the IPO Lawsuits. In October 2002, the
court entered an order dismissing the Company's named officers
and directors from the IPO Lawsuits without prejudice, pursuant
to an agreement tolling the statute of limitations with respect
to the Company's officers and directors until September 30,
2003. In February 2003, the court issued a decision denying the
motion to dismiss the Section 11 and Section 10(b) claims
against the Company and most of the Issuers.
In July 2003, a Special Litigation Committee of the Company's
Board of Directors approved in principle a settlement proposal
with the plaintiffs that is anticipated to include most of the
Issuers. The proposed settlement would provide for the dismissal
with prejudice of all claims against the participating Issuers
and their officers and the assignment to plaintiffs of certain
potential claims that the Issuers may have against their
underwriters. The tentative settlement also provides that, in
the event that plaintiffs ultimately recover less than a
guaranteed sum from the underwriters, plaintiffs would be
entitled to payment by each participating Issuer's insurer of a
pro rata share of any shortfall in the plaintiffs guaranteed
recovery. In September 2003, in connection with the proposed
settlement, the Company's named officers and directors extended
the tolling agreement so that it would not expire prior to any
settlement being finalized. In June 2004, the Company executed
a final settlement agreement with the plaintiffs. On February
15, 2005, the Court issued a decision certifying a class action
for settlement purposes and granting preliminary approval of the
settlement subject to modification of certain bar orders
contemplated by the settlement. In addition, the settlement is
still subject to statutory notice requirements as well as final
judicial approval.
The suit is styled "In re Radio One, Inc. Initial Public
Offering Securities Litigation, Case No. 01-CV-10160," related
to "In re Initial Public Offering Securities Litigation, Master
File No. 21 MC 92 (SAS)," filed in the United States District
Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
ROGER WOOD: Recalls Sausage Products For Listeria Contamination
---------------------------------------------------------------
Roger Wood Foods, Inc., a Savannah, Ga., firm, is voluntarily
recalling approximately 10,700 pounds of sausage products that
may be contaminated with Listeria monocytogenes, the U.S.
Department of Agriculture's Food Safety and Inspection Service
(FSIS) announced.
Products subject to recall include:
(1) 1 lb. packages of "ROGER WOOD Preferred Recipe, BEEF
Smoked Sausage."
(2) 2.5 lb. packages of "ROGER WOOD, GREAT GRILLERS, smoked
sausage, made with chicken, turkey, pork and beef."
(3) 5 lb. packages of "ROGER WOOD, FAMILY PAK, Chicken,
Pork and Beef Wieners."
(4) 3 lb. packages of ROGER WOOD, FAMILY PAK, Chicken, Pork
and Beef Wieners."
(5) 4. lb. packages of "ROGER WOOD, FAMILY PAK, Chicken,
Pork and Beef Wieners."
The sausage was produced on March 10, 2005 and was distributed
to retail stores in Florida, Georgia, North Carolina and South
Carolina. Each of the products bear one of the following
establishment codes "EST. 8025" or "P-8025" inside the USDA mark
of inspection. Each label also bears "Sell By 5/13/2005." The
problem was discovered through regulatory sampling conducted by
the State of Georgia. 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
Chief Operating Officer Kevon Ledgerwood, at (912) 964-6335.
Consumers with questions about the recall should contact company
Sales Coordinator Mary Ann King, at (912) 964-6335. 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.
SLM CORPORATION: Plaintiffs Appeal Dismissal of DC Consumer Suit
----------------------------------------------------------------
Plaintiffs appealed the Superior Court for the District of
Columbia's dismissal of the class action filed against SLM
Corporation by three Wisconsin residents.
The suit, filed on December 20, 2001, sought to bring a
nationwide class action on behalf of all borrowers who allegedly
paid "undisclosed improper and excessive" late fees over the
past three years. The plaintiffs sought damages of one thousand
five hundred dollars per violation plus punitive damages and
claimed that the class consisted of two million borrowers. In
addition, the plaintiffs alleged that the Company charged
excessive interest by capitalizing interest quarterly in
violation of the promissory note.
On February 27, 2003, the Superior Court granted the Company's
motion to dismiss the complaint in its entirety. On March 4,
2004, the District of Columbia Court of Appeals affirmed the
Superior Court's decision granting the Company's motion to
dismiss the complaint, but granted plaintiffs leave to re-plead
the first count, which alleged violations of the D.C. Consumer
Protection Procedures Act. On September 15, 2004, the
plaintiffs filed an amended class action complaint. On October
15, 2004, the Company filed a motion to dismiss the amended
complaint with the Superior Court for failure to state a claim
and non-compliance with the Court of Appeals' ruling. On
December 27, 2004, the Superior Court granted the Company's
motion to dismiss the plaintiffs' amended compliant.
TXU CORPORATION: Reaches Settlement For TX Securities Fraud Suit
----------------------------------------------------------------
TXU Corporation reached a settlement for the consolidated
securities class action filed against it in the United States
District Court for the Northern District of Texas. The suit
also names as defendants:
(1) Erle Nye,
(2) Michael J. McNally,
(3) Brian N. Dickie,
(4) Biggs C. Porter,
(5) V.J. Horgan,
(6) Derek C. Bonham,
(7) J.S. Farrington,
(8) William F. Griffin,
(9) Kerney Laday,
(10) Jack E. Little,
(11) Margaret N. Maxey,
(12) J.E. Oesterreicher,
(13) Charles R. Perry and
(14) Herbert H. Richardson
On and after October 15, 2002, thirty securities Class Actions
(collectively, the "Securities Actions") were filed by the
plaintiffs named herein on behalf of themselves and all others
similarly situated in (or transferred to) the United States
District Court for the Northern District of Texas, Dallas
Division. The suits were filed on behalf of purchasers of the
Company's (NYSE: TXU) publicly traded securities during the
period between April 25, 2002 and October 11, 2002.
The complaints charged TXU and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The complaints alleged that during the class period,
defendants represented that the Company could succeed in the
competition created by deregulation. Defendants then
represented that TXU's European operations were improving, it
would succeed competition in the U.K. market and it was on track
to report EPS of $4.35+ and $4.60+ in 2002 and 2003,
respectively. As a result of these allegedly false statements,
TXU's stock traded at artificially inflated levels, as high as
$56 per share, an earlier Class Action Reporter story (January
16,2003) states.
By Order dated May 8, 2003, the Court consolidated the
Securities Actions under the caption "Schwartz, et al. v. TXU
Corp., et al., Civil Action No. 3:02-CV-2243-K." By Order dated
May 8, 2003, the Court appointed the Plumbers & Pipefitters
National Pension Fund, Arthur C. Nielsen, Jr., and Ronald Canada
as Lead Plaintiffs and appointed Lead Counsel in the
Consolidated Securities Action.
The Settling Parties have engaged in substantial arm's length
negotiations in an effort to resolve all claims that have been,
or could have been, asserted in the Consolidated Securities
Action, including conducting numerous meetings and telephone
conferences where the terms of the agreements detailed herein
were extensively debated and negotiated. The Securities
Defendants have denied and continue to deny that they engaged in
any wrongdoing of any kind, or that they violated or breached
any law, regulation, or duty owed to the Securities Plaintiffs.
They further deny that they have liability as a result of any
and all allegations contained in the Consolidated Securities
Action, and are entering into the Settlement to eliminate the
burdens, distractions, expense, and uncertainty of further
litigation.
The suit is styled "Schwartz, et al v. TXU Corp, et al, case no.
3:02-cv-02243," filed in the United States District Court for
the Southern District of New York, under Judge Ed Kinkeade.
Representing the plaintiffs are 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; and William S. Lerach Lerach Coughlin
Stoia Geller Rudman & Robbins - San Diego 401 B St Suite 1700
San Diego, CA 92101 Phone: 619/231-1058. Representing the
Company is David P. Poole, TXU Legal Dept 1601 Bryan St 21st
Floor Dallas, TX 75201 Phone: 214/812-6001 Fax: 214/812-6032 E-
mail: dpoole@txu.com.
UNION PACIFIC: Board Sued For Lost Profits, Settlements, Fines
--------------------------------------------------------------
A New York City lawyer initiated a lawsuit against the board of
directors for Union Pacific Corp., alleging that the board
members' inability to follow safety regulations has cost the
Company and, by extension, its shareholders millions of dollars
in lost profits, court settlements and government sanctions, The
Associated Press reports. The lawsuit was filed in a Utah
court, since Union Pacific is chartered in Utah, even though its
company headquarters are in Omaha, Nebraska.
In the suit, attorneys for David Jaroslawicz, who owns an
estimated 500 to 1,000 shares of stock valued at between $30,000
and $60,000, said that the lawsuit was filed on behalf of Union
Pacific Corp. shareholders and others seeking the repayment of
more than more than $100 million in lawsuit settlement funds and
structural changes to increase company oversight. His
allegations include:
(1) The Company paid $65 million to settle a class action
lawsuit related to a train wreck in Louisiana, in
addition to $38 million in remediation costs since
2000. A National Transportation Safety Board
investigation into the accident, which caused the
evacuation of 3,500 people, revealed numerous problems
with train tracks at the site.
(2) Since at least 1998, the company has been cited by the
Federal Railroad Administration for thousands of
defects.
(3) A federal court in 2002 sanctioned the company after a
manager ''secretly swapped suspect parts in a warning
signal'' at a railroad crossing that had been the site
of a fatal Union Pacific wreck. Several other courts
have reached similar conclusions in deadly crash
investigations.
Mr. Jaroslawicz told The Associated Press that he wanted to
"keep the board of directors honest" and hold them accountable
for failing to protect shareholders.
According to the complaint, their actions "permitted Union
Pacific, the railroad and their senior management to
continuously engage in the imprudent, illegal or unsound
business practices in the operations of the railroad and the
company."
UNITED STATES: PwC Study Reveals 2004 Securities Lawsuits Up 16%
----------------------------------------------------------------
Private securities class-action lawsuits increased 16 percent
from 2003 to 2004, with aggregate settlements topping $5
billion, the largest amount on record, according to a securities
litigation study by PricewaterhouseCoopers (PwC), The WebCPA
reports.
According to the Big Four firm's study, the mammoth amounts were
anchored by partial settlements at companies such as WorldCom,
which has thus far paid out $2.7 billion, followed by Raytheon
($510 million) and Bristol Myers ($300 million). The report also
pointed out that excluding the partial WorldCom settlement, the
average settlement value in 2004 was $26.6 million, which was up
18 percent over 2003, and 38 percent higher than the average
settlement value of the 578 private securities class actions
settled between 1996 and 2003.
PwC further said that, on average, the number of private
securities class actions filed in the U.S. was 188 per year from
1996 through 2003 with defendant companies in the high
technology and telecommunications sectors continuing to be the
most frequently sued. In 2004, high technology concerns were
involved in 30 percent of private securities litigation cases
filed, which was a 15 percent rise from the prior year, the
report said. The report added that other significant areas of
private securities class actions were health services and
pharmaceuticals, and banking and financial services.
UNUMPROVIDENT: NY Supreme Court Orders Preservation Of Evidence
---------------------------------------------------------------
New York's Supreme Court has ordered UnumProvident (NYSE:UNM) to
preserve additional evidence concerning its company practices in
a class action that seeks to stop UnumProvident from using
financial budgets and targets in its processing of disability
insurance claims. UnumProvident engaged in a fight to stop the
court from ordering it to preserve documents and data in the
case of Weiller v. New York Life, UnumProvident and Paul Revere,
Docket No.: 604285. In a lengthy decision, Justice Cahn of
Manhattan rejected UnumProvident's arguments and required the
company to save databases, emails, and other critical documents
to be used in the class action.
In the Weiller class action, Quadrino & Schwartz is pursuing a
reassessment of all claims denied or terminated by UnumProvident
under insurance policies issued by the following companies: New
York Life, John Hancock Life, The Equitable, National Life of
Vermont, Provident Mutual Life, General American Life, and
others. These other companies hired UnumProvident to administer
their entire book of disability claims and to subsequently make
decisions on those claims. UnumProvident used the same alleged
illegal claim practices in denying and terminating these claims
as they did with their own claims under policies issued by
Provident, Paul Revere, and Unum.
The Weiller case is one of three class actions being pursued by
Quadrino & Schwartz. All of the cases seek to stop the unlawful
practice of using budgets and financial targets in
UnumProvident's disability claims process. All of the disability
claims covered by the Weiller case are not part of the recent
government settlement that UnumProvident reached with most of
the States in the United States and the United States Department
of Labor.
For more details, contact Carolyn Lau, Marketing Coordinator of
Quadrino & Schwartz by Phone: (516) 745-1122 by E-mail:
cjl@quadrinoschwartz.com or visit their Web site:
http://www.disabilityinsurancelawyers.com.
VEECO INSTRUMENTS: Shareholders File Securities Suits in S.D. NY
----------------------------------------------------------------
Veeco Instruments, Inc. faces several securities class actions
filed in the United States District Court for the Southern
District of New York. The lawsuits also name as defendants the
Company's Chairman and Chief Executive Officer, and its
Executive Vice President and Chief Financial Officer.
On February 11, 2005, the Company issued a press release
announcing, among other things, the postponement of the release
of its financial results for the fourth quarter and full year
ended December 31, 2004 pending completion of an internal
investigation of improper accounting transactions at its
TurboDisc business unit and its expectation that this
investigation will lead to adjustments requiring the restatement
of the Company's financial statements previously issued for the
quarterly periods and nine months ended September 30, 2004.
Following the February 11 announcement, a putative class action
shareholder suit was filed asserting claims for violation of
federal securities laws on behalf of persons who acquired the
Company's securities during the period beginning November 3,
2003 and ending February 10, 2005. In addition, five putative
class action shareholder suits were filed in federal court in
the Eastern District of New York on behalf of persons who
acquired the Company's securities during the period beginning
November 3, 2003 or April 26, 2004 and ending February 10, 2005.
The suits seek unspecified damages and allege claims against all
defendants for violations of Section 10(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") and claims against the
individual defendants for violations of Section 20(b) of the
Exchange Act.
The lawsuits are filed in the United States District Court for
the Southern District of New York under Judge Colleen McMahon.
The suits are styled "L.I.S.T., Inc. v. Veeco Instruments, Inc.,
et al, case no. 7:05-cv-02189-CM," and "Kershaw v. Veeco
Instruments, Inc., et al, case no. 7:05-cv-02929-CM." The
plaintiff firms in this litigation are:
(1) Abbey Gardy, LLP 212 East 39th Street, New York, NY,
10016, Phone: 212.889.3700, E-mail: info@abbeygardy.com
(2) Brodsky & Smith, LLC 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987., Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com;
(3) Charles J. Piven World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com;
(4) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (New York,
NY), 825 Third Avenue - 30th Floor, New York, NY,
10022, Phone: 212.838.7797, E-mail: 212.838.7745, E-
mail: lawinfo@cmht.com;
(5) Dyer & Shuman, LLP, 801 East 17th Avenue, Denver, CO,
80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, e-
mail: info@dyershuman.com;
(6) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park
Avenue, New York, NY, 10017, Phone: 212.907.0700, Fax:
212.818.0477, E-mail: info@glrslaw.com;
(7) Law Offices of Brian M. Felgoise, P.C. Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net;
(8) Milberg Weiss Bershad & Schulman LLP (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com;
(9) Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com;
(10) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com;
(11) Schiffrin & Barroway, LLP 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com;
(12) Stull, Stull & Brody (New York) 6 East 45th Street, New
York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com;
(13) Wolf, Haldenstein, Adler, Freeman & Herz LLP 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
New Securities Fraud Cases
AUDIBLE, INC.: Stull Stull Lodges Securities Fraud Lawsuit in NJ
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the District of
New Jersey, against Audible, Inc. ("Audible" or the "Company")
(Nasdaq:ADBL), Donald R. Katz ("Katz") and Andrew P. Kaplan
("Kaplan"), senior executives officers and/or directors of
Audible, on behalf of purchasers of Audible securities between
November 2, 2004 and February 15, 2005, inclusive (the "Class
Period"). Also included are all those who acquired Audible's
shares in the secondary offering on November 18, 2004.
The complaint charges that Audible violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Audible reported
increased revenues and earnings, growth that defendants
represented would continue as the Company capitalized on
increasing demand for its products and a growing customer based.
Throughout the Class Period, defendants failed to disclose that:
(1) Audible's growth could not continue without material
investments in expensive strategic initiatives that
would severely erode the Company's earnings in the
foreseeable future; and
(2) Audible was about to embark on expensive strategic
initiatives that would constitute a material risk to
the Company's growth and its stock price.
On February 15, 2005, after the close of trading, Audible
announced that in 2005 it would be undertaking several
initiatives requiring substantial investments in infrastructure,
new business units and marketing and that these initiatives
would depress earnings and cash flow at least until 2006. On
this news, Audible stock plummeted, falling from $26.70 per
share on February 15, 2005 to $17.32 on February 16, 2005, a
decline of 35%. Prior to this disclosure, defendant Katz sold
150,000 Audible shares for gross proceeds of $3,675,000, while
defendant Kaplan sold 125,000 shares for gross proceeds of
$3,062,500 in the secondary offering.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022 by E-mail:
SSBNY@aol.com or visit their Web site: http://www.ssbny.com.
BLUE COAT: Charles J. Piven Lodges Securities Fraud Suit in CA
--------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Blue Coat
Systems, Inc. (NASDAQ: BCSI) between February 20, 2004 and May
27, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California against defendant Blue Coat and
one or more of its officers. The action charges that defendants
violated 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 the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202 by Phone:
410/986-0036 or by E-mail: hoffman@pivenlaw.com.
BLUE COAT: Glancy & Binkow Lodges Securities Fraud Suit in CA
-------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP initiated a Class
Action lawsuit in the United States District Court for the
Northern District of California on behalf of a class (the
"Class") consisting of all persons or entities who purchased or
otherwise acquired securities of Blue Coat Systems, Inc. ("Blue
Coat" or the "Company") (Nasdaq:BCSI) during the period February
20, 2004 to May 27, 2004 (the "Class Period").
The Complaint charges Blue Coat, and certain of the Company's
executive officers with violations of federal securities laws.
Plaintiff claims defendants' omissions and material
misrepresentations artificially inflated the Company's stock
price, inflicting damages on investors. Blue Coat is a developer
and distributor of "proxy" software, which helps corporations
control employee access to Internet websites and to potentially
dangerous downloadable files. The Complaint alleges that, from
its founding in 1996 through the beginning of the Class period,
Blue Coat had never turned a profit. On February 19, 2004, Blue
Coat announced an unprecedented increase in sales, and its first
profitable quarter. During a public conference call that same
day, defendants stated a belief that gross margins in the
following quarter would fall in the range of 68-69%. This news
drove the stock price up to $38.27 on February 20, 2004, on
unusually high volume of 1.3 million shares. Unbeknownst to
investors, these gross margin calculations did not reflect any
realistic expectations as to what could be achieved, given
material business issues of which the defendants would have been
aware. Almost immediately following the February 19 conference
call, certain defendants began selling large blocks of shares,
at prices ranging from $40-52 per share.
On May 27, 2004, Blue Coat made a surprise announcement that its
purported gross margin calculations had fallen short for the
fourth quarter of fiscal 2004 and profitability was lower than
that achieved in the third quarter. The next trading day, May
28, 2004, Blue Coat shares plummeted $11.45 per share to close
at $27.80 per share. By August 2004, Blue Coat shares fell as
low as $10 per share before recovering to approximately the $20
level.
In the summer of 2004, the SEC began an informal inquiry into
trading of Blue Coat stock in or about the fourth quarter of
fiscal 2004, which the Company initially characterized as
involving only "individuals or organizations outside the
company." By early 2005, however, the SEC had upgraded its
inquiry to a formal investigation. Instead of only individuals
or organizations outside the Company, the SEC was now focusing
on "whether certain present or former officers, directors,
employees, affiliates or others made intentional or non-
intentional selective disclosure of material nonpublic
information, traded in the Company's stock while in possession
of such information, or communicated such information to others
who thereafter traded in the Company's stock."
For more details, contact Glancy Binkow & Goldberg LLP by Phone:
(310) 201-9150 or (888) 773-9224 or by E-mail:
info@glancylaw.com or visit their Web site:
http://www.glancylaw.com.
COLLINS & AIKMAN: Lasky & Rifkind Lodges Securities Suit in MI
--------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in
the United States District Court for the Eastern District of
Michigan, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Collins & Aikman Corp.
("Collins & Aikman" or the "Company") (NYSE:CKC) between May 6,
2004 and March 17, 2005, inclusive, (the "Class Period"). The
lawsuit was filed against Collins & Aikman and David Stockman,
J. Michael Stepp and Bryce Koth ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
the Company failed to disclose or misrepresented that the
Company improperly accounted for certain supplier rebates of
approximately $10 to $12 million, that the Company lacked
adequate internal controls to determine its financial condition,
and that its results were not prepared in accordance with
Generally Accepted Accounting Principles.
On March 17, 2005, Collins & Aikman announced that after
reviewing approximately $88 million in vendor transactions
during the years 2002 to 2004, the Company found that
approximately $10 to $12 million in net adjustments would be
required. Shares of Collins & Aikman reacted negatively to the
news, shedding $0.39 per share, or nearly 24% to close at $1.24
per share.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
(800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com.
DELPHI CORPORATION: Johnson & Perkinson Lodges ERISA Suit in MI
---------------------------------------------------------------
The law firm of Johnson & Perkinson initiated a class action
lawsuit, in the United States District Court for the Eastern
District of Michigan, on behalf of participants and
beneficiaries of the Delphi Corporation's (NYSE:DPH) pension
plans.
The lawsuit, brought pursuant to the Employee Retirement Income
Security Act of 1974, is on behalf of those participants since
May 28, 1999 in the Delphi Savings-Stock Purchase Program for
Salaried Employees in the U.S., Delphi Personal Savings Plan for
Hourly-Rate Employees in the U.S., ASEC Manufacturing Savings
Plan and Delphi Mechatronic Systems Savings-Stock Purchase
Program.
The lawsuit alleges that plan fiduciaries breached such duties
and responsibilities by, among other things, failing to
investigate the prudence of an investment in Delphi stock and by
making misrepresentations about the Company's accounting
practices dating back to1999. Several current and former Delphi
employees have already chosen to participate in the lawsuit.
These employees are organizing a structure to direct the
lawsuit. Those employees who choose to participate in the
lawsuit can do so confidentially. It is unlawful for any
fiduciary or defendant to take any retaliatory action against
any employee who chooses to participate in the suit.
The complaint charges fiduciaries of the plans with violations
of the Employee Retirement Income Security Act of 1974. Delphi
is a global supplier of vehicle electronics, transportation
components, integrated systems and modules, and other electronic
technology to vehicle manufacturers. The complaint alleges that
during the Class Period, defendants knew or should have known
that Delphi issued materially false and misleading financial
statements caused by Delphi's improper accounting for off-
balance sheet financing and vendor rebates. Its earnings were
also misleading in part due to transactions, which Delphi is
still investigating. As a result of these false statements, the
Company's stock climbed to as high as $17.40 per share during
the Class Period. Delphi took advantage of this artificial
inflation, selling $400 million in preferred securities and $500
million in 6.5% unsecured notes. Upon the disclosures of the
need to revise its financial statements, Delphi's stock dropped
to as low as $5.41 per share before closing at $5.46 per share
on March 4, 2005, some 68% below the Class Period high of $17.40
per share and a one-day drop of 14%, on volume of 24 million
shares.
For more details, contact Robin Freeman of Johnson & Perkinson
by Phone: 1-877-266-2133 or 866-276-5446 or by E-mail:
email@jpclasslaw.com.
GLAXOSMITHKLINE PLC: Lerach Coughlin Files Securities Suit in NY
----------------------------------------------------------------
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 Southern District of New York on
behalf of purchasers of GlaxoSmithKline plc ("GlaxoSmithKline")
(NYSE:GSK) common stock and ADRs during the period between
February 21, 2001 and August 5, 2004 (the "Class Period").
The complaint charges GlaxoSmithKline and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. GlaxoSmithKline along with its
subsidiaries constitute a global healthcare group engaged in the
creation, discovery, development, manufacture and marketing of
pharmaceutical and consumer health-related products.
The complaint alleges that during the Class Period, the prices
of GlaxoSmithKline's stock and ADRs were artificially inflated
by defendants concealing deficiencies with the Company's
selective serotonin reuptake inhibitor ("SSRI") drug, Paxil, in
treating adolescent depression. On August 5, 2004, The Wall
Street Journal published an article that reported that a new
analysis by the FDA had confirmed the link between SSRIs
(including Paxil) and suicidal tendencies in young people. The
prices of GlaxoSmithKline's stock and ADRs, which were inflated
during the Class Period, declined as the falsity of defendants'
statements came to light.
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/glaxosmithkline/.
WATCHGUARD TECHNOLOGIES: Schiffrin & Barroway Lodges Suit in WA
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Western District of Washington on behalf of all securities
purchasers of WatchGuard Technologies, Inc. (Nasdaq: WGRD)
("WatchGuard" or the "Company") between February 12, 2004 and
March 15, 2005 inclusive (the "Class Period").
The complaint charges WatchGuard, Steven N. Moore, Edward J.
Bore, and James A. Richman 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 which were known to defendants
or recklessly disregarded by them:
(1) that the Company's product "Firebox X", contrary to the
defendant's claims, failed to streamline the Company's
inventory management and reduce its reliance on custom
components, while driving revenue growth and a return
to profitability in 2004;
(2) that the Company engaged in improper accounting
practices by inaccurately classifying income statements
of early pay incentive discounts taken by customers,
under-accruing of customer rebate obligations; and by
improperly recognizing revenue associated with specific
products and services;
(3) that because of the items listed in (2) the Company's
02/12/04 outlook was materially false and lacked in all
reasonable basis;
(4) that the Company lacked adequate internal controls;
(5) that as a result the Company's revenues were materially
overstated at all relevant times.
On March 16, 2005, WatchGuard disclosed that during the close
and audit process, certain errors were discovered in
WatchGuard's previously issued consolidated financial
statements. News of this shocked the market. Shares of
WatchGuard fell $0.08 per share or 2.56 percent to close at
$3.17 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com.
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