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C L A S S A C T I O N R E P O R T E R
Monday, April 25, 2005, Vol. 7, No. 80
Headlines
AMVAC CHEMICAL: Continues To Face Foreign Field Workers' Lawsuit
AMVAC CHEMICAL: Banana Workers Complaints Still Pending in MI
AMVAC CHEMICAL: Continues To Face Banana Workers' Suits in LA
AMVAC CHEMICAL: Trial in CA DBCP Litigation Set On July 17,2006
AMVAC CHEMICAL: Nicaraguans Launch DBCP Personal Injuries Suit
BIG DOG: Recalls 1418 2005 Motorcycles Due To Crash Hazard
BROADWING INC.: Stay of Discovery Remains Pending in OH Lawsuit
BROADWING INC.: Trial in ERISA Lawsuit Set May 2006 in OH Court
CANADA: St. Andrews College Faces $15 Mil Sexual Abuse Lawsuit
CHIRON CORPORATION: Plaintiffs Withdraw Two CA Securities Suits
CHIRON CORPORATION: Plaintiffs Dropped Negligence Lawsuits in FL
CINCINNATI BELL: Faces Consumer Fraud Lawsuits in Ohio, Kentucky
CLAYTON HOMES: Investors Urged To Approve $5M Lawsuit Settlement
COMMERCE BANCORP: Plaintiffs File Consolidated Fraud Suit in NJ
COMPUTER SCIENCES: Settles Overtime Pay Lawsuit in CA For $24M
CVS CORPORATION: MA Court Denies Summary Judgment in Stock Suit
CVS CORPORATION: Pension Plan Participants File ERISA Suit in MA
FRANCE: Canadian Firm Invited To Paris Class Action Conference
HANGER ORTHOPEDIC: Plaintiffs File Consolidated Suit in E.D. NY
HECLA MINING: ID High Court Dismisses Personal Injury Appeal
HERCULES INC.: NY Court Dismisses Vietnamese Agent Orange Suit
HERCULES INC.: Discovery Proceeds in LA Personal Injury Lawsuits
HERCULES INC.: PA Court Yet To Rule on ERISA Suit Certification
IMPROVEMENT INC.: Locklear Electric Lodges Junk Faxes Suit in IL
LENNAR HOMES: Solicitation Letters Sent To Natomas Homeowners
LUFKIN INDUSTRIES: To Appeal TX Decision in Race Bias Lawsuit
MORGAN STANLEY: Reaches $41.5M Settlement For Mutual Fund Suits
OHIO: Prisons Hope To Settle Inmates' Medical, Dental Care Suit
PNC FINANCIAL: Reaches Settlement for PA Consolidated Stock Suit
SHARP ELECTRONICS: Recalls 373T Televisions Due To Fire Hazard
SPARTAN CHASSIS: Recalls 4735 Motor Homes For Defective Gauges
TENNESSEE: ADA Suit Would Require Hospital Improvements
TEXAS: LULAC Leaders File Discrimination Suit V. City of Houston
TOWNSEND AND TOWNSEND: Former Partners Sue For A Share Of Fees
TRILINI INTERNATIONAL: Recalls Marshmallows For Undeclared Eggs
VERMONT: Judge Orders Proposed Cuts To Medicaid Program Halted
WAL-MART STORES: Quebec Worker Wants To File Suit Over Closure
New Securities Fraud Cases
BIOGEN IDEC: Stull Stull Lodges Securities Fraud Lawsuit in MA
BLUE COAT: Brian M. Felgoise Lodges Securities Fraud Suit in CA
BLUE COAT: Paskowitz & Associates Lodges Securities Suit in CA
DORAL FINANCIAL: Zwerling, Schachter Files Securities Suit in NY
ELECTRONIC ARTS: Chitwood Harley Lodges Securities Lawsuit in CA
SHARPER IMAGE: Marc S. Henzel Lodges Securities Fraud Suit in CA
SHARPER IMAGE: Schiffrin & Barroway Lodges Securities Suit in CA
XYBERNAUT CORPORATION: Marc S. Henzel Lodges Stock Lawsuit in DE
*********
AMVAC CHEMICAL: Continues To Face Foreign Field Workers' Lawsuit
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AMVAC Chemical Corporation continues to face a lawsuit, styled
"Patricson et al. v. Dole Food Co., et al.," alleging damages
sustained from injuries caused by plaintiffs' exposure to 1,2-
Dibromo 3-Chloropropane (DBCP) while applying the product in
their native countries.
Two identical suits were initially filed in October 1997 in the
Circuit Court, First Circuit, State of Hawaii and in the Circuit
Court of the Second Circuit, State of Hawaii. Other named
defendants are:
(1) Dole Food Co.,
(2) Dole Fresh Fruit,
(3) Dole Fresh Fruit International,
(4) Pineapple Growers Association of Hawaii,
(5) Shell Oil Company,
(6) Dow Chemical Company,
(7) Occidental Chemical Corporation,
(8) Standard Fruit Company,
(9) Standard Fruit & Steamship,
(10) Standard Fruit Company De Costa Rica,
(11) Standard Fruit Company De Honduras,
(12) Chiquita Brands,
(13) Chiquita Brands International,
(14) Martrop Trading Corporation, and
(15) Del Monte Fresh Produce
The ten named plaintiffs are citizens of four countries -
Guatemala, Costa Rica, Panama, and Ecuador. Punitive damages
are sought against each defendant. The plaintiffs were banana
workers and allege that they were exposed to DBCP in applying
the product in their native countries. The case was also filed
as a class action on behalf of other workers so exposed in these
four countries. The plaintiffs' allege sterility and other
injuries.
For the last seven years, the focus of the case has been on
procedural issues. The defendants moved to dismiss under the
doctrine of "forum non conveniens." Under this doctrine, the
foreign plaintiffs would have to sue in their own countries
rather than using the United States courts. The plaintiffs wish
to keep the cases in the United States and have them remanded to
state court. The plaintiffs also contend that the federal court
does not have jurisdiction. In September 1998, the court
granted defendants' motion to dismiss based on the grounds of
"forum non conveniens." A number of conditions were imposed
including consent to jurisdiction in the four foreign countries
for the ten named plaintiffs, use of discovery taken in the
United States, the requirement that the plaintiffs file suits in
their home countries by December 9, 1998, and the agreement by
defendants to pay any judgment, if any, that might be entered in
the foreign countries. The court order also provided that the
plaintiffs could return to the United States if the foreign
countries refused to accept jurisdiction. The court then
dismissed the case on March 8, 1999.
The plaintiffs subsequently appealed to the Ninth Circuit Court
of Appeal. The Ninth Circuit issued its decision on May 30,
2001, holding that the federal court did not have jurisdiction.
A petition for writ of certiorari (a writ of a superior court to
call up the records of an inferior court or quasi-judicial body)
was filed in United States Supreme Court on October 5, 2001 and
the United States Supreme Court subsequently granted a hearing.
Oral argument was held on January 22, 2003. On April 22, 2003,
the United States Supreme Court issued its decision in favor of
the plaintiffs, holding there was no jurisdiction in federal
court. This vacates the order dismissing the case under the
"forum non conveniens" doctrine. One September 5, 2003, the
U.S. District Court in Honolulu issued an order that the case
will be remanded to state court unless there is an objection
filed by September 18, 2003. As the U.S. Supreme Court has
issued its final decision on the lack of federal court
jurisdiction, the case will be remanded to state. Once the case
reaches state court, the defendants will have to decide whether
they will file a motion to dismiss under "forum non conveniens"
pursuant to state court procedures.
No activity took place on this case throughout 2004 or to date
as apparently, the suit has not been officially received in the
state court upon remand. The plaintiffs' attorneys reported
that the ten plaintiffs filed suit in their home countries by
December 9, 1998, alleging in excess of two million United
States dollars ($2,000,000) per plaintiff. The suit in
Guatemala was served on the Company in March 2001, but no
defendant has been required to answer. Suits in the other
countries have not been served. The Company has engaged local
attorneys in the countries to defend these foreign suits. No
discovery has taken place on the individual claims of the
plaintiffs.
AMVAC CHEMICAL: Banana Workers Complaints Still Pending in MI
-------------------------------------------------------------
AMVAC Chemical Corporation continues to face five complaints
filed on May 1996 in the United States District Court for the
Southern District of Mississippi, alleging damages sustained
from injuries caused by plaintiffs' (who are former banana
workers and citizens of a Central American country) exposure to
1,2-Dibromo-3-Chloropropane (DBCP) while applying the product in
their native countries. The five complaints are styled:
(1) Edgar Arroyo-Gonzalez v. Coahoma Chemical Co., Inc., et
al,
(2) Amilcar Belteton-Rivera v. Coahoma Chemical Co., Inc.,
et al,
(3) Eulogio Garzon-Larreategui v. Coahoma Chemical Co.,
Inc., et al,
(4) Valentin Valdez v. Coahoma Chemical Co., Inc., et al
and
(5) Carlos Nicanor Espinola-E v. Coahoma Chemical Co.,
Inc., et al.
Other named defendants are:
(i) Coahoma Chemical Co. Inc.,
(ii) Shell Oil Company, Dow Chemical Co.,
(iii) Occidental Chemical Co.,
(iv) Standard Fruit Co.,
(v) Standard Fruit and Steamship Co.,
(vi) Dole Food Co., Inc.,
(vii) Dole Fresh Fruit Co.,
(viii) Chiquita Brands, Inc.,
(ix) Chiquita Brands International, Inc. and
(x) Del Monte Fresh Produce, N.A.
The cases were initially filed in the Circuit Court of Harrison
County, First Judicial District of Mississippi. These cases
have been removed to U.S. District Court for the Southern
District of Mississippi, Southern Division. The federal court
granted defense motions to dismiss in each case pursuant to the
doctrine of "forum non conveniens." Unlike the Patrickson case,
the court did not establish detailed procedures or deadlines for
the filing of suits in the foreign countries by the five
plaintiffs.
Defendants have learned that plaintiff Valentin Valdez has filed
a suit in Panama, but they have not been served. On January 19,
2001, the court issued an unpublished decision, finding that
there was jurisdiction in federal court, but remanded just one
case (Espinola) back to the trial court to determine if a
stipulation which limited the plaintiff's recovery to fifty
thousand dollars ($50,000) was binding. If the stipulation is
binding, that case will be remanded to state court. If the
stipulation is not binding, that case will be dismissed along
with the others, requiring the plaintiffs to litigate in their
native countries. A deposition of the plaintiff Espinola was
scheduled but was never taken. The federal court then ordered
remand to state court. The attorneys for Dow Chemical Co. filed
a motion for reconsideration, explaining that the plaintiffs
attorneys did not produce their client for deposition. This
motion is still pending.
No activity took place on this matter throughout 2004 or to
date. No discovery has taken place on the individual claims of
these plaintiffs. If the Espinola case is tried in Mississippi
state court, the maximum recovery is fifty thousand dollars
($50,000). Without discovery, it is unknown whether any of the
plaintiffs were exposed to the Company's product or what statute
of limitation defense may apply.
AMVAC CHEMICAL: Continues To Face Banana Workers' Suits in LA
-------------------------------------------------------------
AMVAC Chemical Corporation continues to face a consolidated
complaint filed in Louisiana state court, alleging personal
injuries from alleged exposure to 1,2-Dibromo-3-Chloropropane
(DBCP) and seeking punitive damages are also sought.
In November 1999, the Company served with three complaints filed
in the 29th Judicial District Court for the Parish of St.
Charles, State of Louisiana entitled "Pedro Rodrigues et. al v.
Amvac Chemical Corporation et. al," "Andres Puerto, et. al v.
Amvac Chemical Corporation, et. al" and "Eduardo Soriano, et al
v. Amvac Chemical Corporation et. al." Other named defendants
are:
(1) Dow Chemical Company,
(2) Occidental Chemical Corporation,
(3) Shell Oil Company,
(4) Standard Fruit,
(5) Dole Food,
(6) Chiquita Brands,
(7) Tela Railroad Company,
(8) Compania Palma Tica, and
(9) Del Monte Fresh Produce
These suits were filed in 1996, they were not served until
November 1999. The plaintiffs (approximately three thousand nine
hundred) are primarily from the countries of the Philippines,
Costa Rica, Ecuador and Guatemala. In November 1999, the cases
were removed to the United States District Court for the Eastern
District of Louisiana. The plaintiffs filed a motion to remand
the cases back to the state court in December 1999. In February
2000, the plaintiffs' attorneys withdrew their motion to remand
the cases to state court without prejudice, stating that they
would wait for an appellate court determination on similar
issues in the Mississippi and Texas cases.
Dow Chemical Company, Shell Oil Company and Occidental Chemical
Corporation contend that the vast majority of these plaintiffs
were included in the settlement of some fifteen thousand
plaintiffs in another litigation. In September 2002, the
plaintiffs' attorneys finally evaluated their list of plaintiffs
who had settled previously. They agreed that the plaintiffs who
settled with Dow Chemical Company, Shell Oil Company, and
Occidental Chemical Corporation were now only proceeding against
the grower defendants. The plaintiffs who had not settled
previously would continue with the suit against all defendants,
including the Company. Thus, out of the approximately three
thousand nine-hundred plaintiffs, about three hundred and
fourteen are left (one hundred and sixty-seven are from Ecuador,
one hundred and two are from Costa Rica and forty-five are from
Guatemala).
The plaintiffs filed a consolidated third amended complaint in
October 2002 with Soriano as the lead case. Each plaintiff
seeks in excess of the minimum jurisdiction of federal court for
diversity of citizenship cases, seventy-five thousand dollars
($75,000). AMVAC has answered the third amended complaint.
With the United States Supreme Court holding there was no
federal court jurisdiction in the Patrickson case, the federal
court judge issued an order to the parties in April 2003 as to
why the cases should not be remanded to state court. The
defendants argued that there was still federal court
jurisdiction because of diversity of citizenship, but this
diversity did not exist at the time the suites were originally
filed in 1996 and accordingly, the court remanded the cases to
state court in June 2003. In state court, the three cases were
assigned to two different judges. The defendants considered
filing another motion to dismiss based on "forum non
conveniens." In Louisiana, all defendants must join in making
such a motion. By this time, unfavorable anti-"forum non
conveniens" laws had passed or were pending in several of the
countries where the plaintiffs resided. Several of the
defendants were against consenting to jurisdiction in those
countries, which is a condition required by an order of
dismissal under "forum non conveniens." As a result, these
cases will now be litigated in state court in Louisiana. The
state court has not yet scheduled any case management or status
conferences. It is likely that the three cases will be
reconsolidated in state court. No activity took place on this
matter throughout 2004 or to date. As in the other banana
worker's cases, no discovery has taken place on the individual
claims of the plaintiffs. Thus, it is unknown as to how many of
the plaintiffs claim exposure to the Company's product and
whether their claims are barred by applicable statutes of
limitation.
AMVAC CHEMICAL: Trial in CA DBCP Litigation Set On July 17,2006
---------------------------------------------------------------
Trial in the personal injury litigation filed against AMVAC
Chemical Corporation is set for July 17,2006 in Los Angeles
Superior Court in California.
In March 2004, twenty-five plaintiffs, all residents of
Nicaragua, filed suit in state court in Los Angeles County,
California, claiming personal injuries from alleged exposure to
DBCP while working on banana plantations in their home country.
The complaint is entitled "Tellez et al v. Dole Food Company,
Inc. et al." The suit also named as defendants:
(1) Dole Food Company, Inc.,
(2) Dole Fresh Fruit Company,
(3) Standard Fruit Company,
(4) Standard Fruit and Steamship Company,
(5) Dow Chemical Company,
Punitive damages are also sought against all defendants. The
plaintiffs claim personal injuries for sterility, reduced sperm
counts and other reproductive injuries. They claim exposure
from working on banana plantations in Nicaragua from dermal
contact with 1,2-Dibromine-3-Chloropropane (DBCP), inhalation of
vapors, and from drinking water allegedly contaminated with
DBCP.
The Company was served with the complaint on April 12, 2004 and
filed an answer on May 5, 2004. On May 6, 2004, Dow Chemical
removed the case from state court to the United States District
Court for the Central District of California. The case was
subsequently remanded to state court. On September 2, 2004, the
plaintiffs were permitted to file an amended complaint that
dropped seven plaintiffs and added eighteen others, for a total
of thirty-six plaintiffs. To date, the parties have worked on a
comprehensive case management order that would permit obtaining
plaintiffs' medical records in Nicaragua and starting
depositions of eighteen of the plaintiffs in Los Angeles and
independent medical examination scheduled to take place in May
2005. At a status conference on February 9, 2005, a trial date
for July 17, 2006 was scheduled. No discovery has yet taken
place on the individual claims of the plaintiffs.
AMVAC CHEMICAL: Nicaraguans Launch DBCP Personal Injuries Suit
--------------------------------------------------------------
AMVAC Corporation faces three complaints filed in Nicaragua, by
plaintiffs claiming damages for personal injuries based on
alleged exposure to 1, 2-Dibromo-3-Chloropropane (DBCP) in
groundwater. The complaint also names as defendants:
(1) Dow Chemical Company,
(2) Shell Oil Company,
(3) Occidental Chemical Corporation,
(4) Del Monte Fresh Produce,
(5) Chiquita Brands,
(6) Ameribrom and
(7) three Chevron entities
It is reported that these plaintiffs claim damages for sterility
and that there are approximately three hundred and fifty
plaintiffs named in these three cases.
The Company has not been served to date and has not seen the
complaints, the Company said in a regulatory filing. The
Company disputes that the Nicaraguan courts have jurisdiction
over it and contests the allegations.
BIG DOG: Recalls 1418 2005 Motorcycles Due To Crash Hazard
----------------------------------------------------------
Big Dog Motorcycles, LLC in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation is voluntarily recalling about 1418 units of 2005
BIG DOG / CHOPPER, BIG DOG / CHOPPER DT, BIG DOG / MASTIFF, BIG
DOG / PITBULL, BIG DOG / RIDGEBACK motorcycles.
According to ODI, on certain motorcycles, the primary sprocket
nut may back off the engine maim shaft. This could cause the
primary drive to lock up and cause a crash, which could occur
without prior warning.
As a remedy, dealers will inspect and replace the drive sprocket
nut. For more details, contact Big Dog by Phone: 316-267-9121
or the NHTSA Auto Safety Hotline: 1-888-327-4236.
BROADWING INC.: Stay of Discovery Remains Pending in OH Lawsuit
---------------------------------------------------------------
The stay of discovery remains in effect in the consolidated
securities class action filed against Broadwing, Inc. in the
United States District Court for the Southern District of Ohio,
styled "In re Broadwing Inc. Securities Class Action
Lawsuits, (Gallow v. Broadwing Inc., et al), Case No. C-1-02-
795."
Between October and December 2002, five virtually identical
class action lawsuits were filed against the Company and two of
its former Chief Executive Officers on behalf of purchasers of
the Company's securities between January 17, 2001 and May 20,
2002, inclusive, and alleged violations of Section 10(b) and
20(a) of the Securities and Exchange Act of 1934 by, inter alia:
(1) improperly recognizing revenue associated with
Indefeasible Right of Use (IRU) agreements; and
(2) failing to write-down goodwill associated with the
Company's 1999 acquisition of IXC Communications, Inc.
The plaintiffs seek unspecified compensatory damages, attorney's
fees, and expert expenses. On December 30, 2002, the "Local 144
Group" filed a motion seeking consolidation of the complaints
and appointment as lead plaintiff. By order dated October 29,
2003, Local 144 Nursing Home Pension Fund, Paul J. Brunner and
Joseph Lask were named lead plaintiffs in a putative
consolidated class action.
On December 1, 2003, lead plaintiffs filed their amended
consolidated complaint on behalf of purchasers of the Company's
securities between January 17, 2001 and May 20, 2002, inclusive.
This amended complaint contained a number of new allegations.
Cincinnati Bell Inc. was added as defendant in this amended
filing. The Company's motion to dismiss was filed on February
6, 2004. Plaintiffs filed their opposition on April 2, 2004 and
the Company filed its reply on May 17, 2004.
On September 24, 2004, Judge Walter Rice issued an Order
granting in part and denying in part the Company's motion to
dismiss. The Order indicates that a more detailed opinion will
follow. Until the detailed opinion is issued, there is no way of
knowing which portions of the case have been dismissed. In the
interim, Judge Rice directed that the stay of discovery will
remain in effect.
BROADWING INC.: Trial in ERISA Lawsuit Set May 2006 in OH Court
---------------------------------------------------------------
Trial in the consolidated class action filed against Broadwing,
Inc. is set for May 2006 in the United States District Court for
the Southern District of Ohio, Western Division. The suit is
styled "In re Broadwing Inc. ERISA Class Action Lawsuits, (Kurtz
v. Broadwing Inc., et al), Case No. C-1-02-857.
Between November 18, 2002 and January 10, 2003, four putative
class action lawsuits were filed against the Company and certain
of its current and former officers and directors. Fidelity
Management Investment Trust Company was also named as a
defendant in these actions. These cases, which purport to be
brought on behalf of the Cincinnati Bell Inc. Savings and
Security Plan, the Broadwing Retirement Savings Plan, and a
class of participants in the Plans, generally allege that the
defendants breached their fiduciary duties under the Employee
Retirement Income Security Act of 1974 (ERISA) by improperly
encouraging the Plan participant-plaintiffs to elect to invest
in the Company stock fund within the relevant Plan and by
improperly continuing to make employer contributions to the
Company stock fund within the relevant Plan.
On October 22, 2003, a putative consolidated class action
complaint was filed in the U.S. District Court for the Southern
District of Ohio. The Company filed its motion to dismiss on
February 6, 2004. Plaintiffs filed their opposition on April 2,
2004 and the Company filed its reply by May 17, 2004. On
October 6, 2004, the Judge issued a Scheduling Order in these
matters. According to the Scheduling Order, discovery was
permitted to commence immediately and must have been completed
by November 15, 2005. A ruling on the Company's motion to
dismiss is still pending.
CANADA: St. Andrews College Faces $15 Mil Sexual Abuse Lawsuit
--------------------------------------------------------------
St. Andrew's College in Aurora, Canada faces a $15-million
class-action lawsuit, which alleges that John Bradley, a music
teacher who worked at the prestigious institution between 1951
and 1964, sexually abused students, The Globe and Mail reports.
Bryan McPhadden, the lawyer who launched the suit on behalf of
the alleged victims, told the Globe and Mail, two former
students at the prestigious private school are involved in the
suit at this point, but he expects for others who may have been
abused to contact him.
Mr. Bradley, now 85, was charged in April 2004, by York Regional
Police with one count of indecent assault on a boy, then 13, in
the 1960-61 school year. In February 2004, the alleged victim,
who is now in his late 50s, filed a complaint against Mr.
Bradley, who moved in 1964 from St. Andrew's to Royal St.
George's College in Toronto where he taught and was choirmaster
until his retirement in 1987. Mr. McPhadden told The Globe and
Mail that the charge against Mr. Bradley is working its way
through the courts, and that the former teacher is due to make
his next appearance in a Newmarket court on June 20.
The suit also alleges that in September 1956, another victim, a
former boarding student, then 13, first came into contact with
Mr. Bradley, and then until the spring of 1961, he committed
sexual assaults on the victim. With regards to this victim the
suit alleges that the assaults took place at various locations
at St. Andrew's, which was established in 1899, including Mr.
Bradley's private quarters at the school and the boys' washroom
at Macdonald House, a residence at the school.
The suit contends that the victim was unable to disclose the
abuse earlier "given his fear, embarrassment and denial," and
given the situation, "he felt alone, awkward, and confined to
secrecy." It also contends that at the time the abuse was
occurring, the victim "feared punishment from his parents and
ridicule and embarrassment from his friends and peers, and as
such, he attempted to hide same from persons around him." It
goes on to add that, as a result of the abuse, the victim has
experienced difficulties with female sexuality, become alienated
from family, and suffered serious and permanent injury.
In addition, the suit also names the victim's mother as a
plaintiff and asks for damages to cover expenses she has
incurred on the victim's behalf, including traveling expenses to
visit him and "the provision of nursing, housekeeping and other
services."
Madam Justice Ellen Macdonald of the Ontario Superior Court had
ruled recently that the suit could go ahead using pseudonyms in
the form of initials, and ordered that their names or any
information that could disclose their identities not be
published.
The lawsuit puts St. Andrew's in a similar situation as Upper
Canada College (UCC), which was sued by a number of students
after charges of sexual assault were laid against Douglas Brown,
a former teacher, who was subsequently convicted and sentenced
to prison for three years. In that suit, UCC reached a
settlement with the victims, who were also represented by Mr.
McPhadden that established a process under which claims could be
made for compensation. Earlier this year, the school announced
it was selling some assets to raise money needed to settle those
claims.
CHIRON CORPORATION: Plaintiffs Withdraw Two CA Securities Suits
---------------------------------------------------------------
Plaintiffs voluntarily dismissed two securities class actions
filed against Chiron Corporation and certain of its officers in
the United States District Court for the Northern District of
California.
Between October 2004 and December 2004, five securities class
action lawsuits were filed against the Company and certain
Chiron officers on behalf of purchasers of its securities for
class periods ranging from July 23, 2003 through October 13,
2004. Four of the suits were filed in the United States
District Court for the Northern District of California. One
action, although originally filed in the United States District
Court for the Eastern District of Pennsylvania, was later
transferred to the United States District Court for the Northern
District of California.
In February 2005, the Court approved the voluntary dismissal of
two of the five class actions. The three remaining complaints
allege, among other things, that the defendants violated certain
provisions of the federal securities laws by making false
statements preceding the suspension of Chiron's license to
manufacture FLUVIRIN vaccine, and seek unspecified monetary
damages and other relief from all defendants.
CHIRON CORPORATION: Plaintiffs Dropped Negligence Lawsuits in FL
----------------------------------------------------------------
Plaintiffs Ruth Rosenbaum and Frosene Steevens dropped the class
action filed against Chiron Corporation and ASAP Meds, Inc. in
the Circuit Court of the 11th Judicial Court, in and for Miami-
Dade County, Florida in connection with the suspension of our
license to manufacture FLUVIRIN vaccine.
With respect to Chiron, plaintiffs alleged, among other things,
negligence and third party beneficiary breach of contract, and
sought damages. Ms. Rosenbaum and Ms. Steevens voluntarily
dismissed the complaint in January 2005.
CINCINNATI BELL: Faces Consumer Fraud Lawsuits in Ohio, Kentucky
---------------------------------------------------------------
Cincinnati Bell Wireless Company and Cincinnati Bell Wireless
LLC face a class action complaint filed in Hamilton County,
Ohio, alleging that the plaintiff and similarly-situated
customers were wrongfully assessed roaming charges for wireless
phone calls made or received within the Company's Home Service
Area and/or within major metropolitan areas on the AT&T Wireless
Network.
The complaint asserts several causes of action, including
negligent and/or intentional misrepresentation, breach of
contract, fraud, unjust enrichment, conversion and violation of
the Ohio Consumer Sales Practices Act. The plaintiff seeks
economic and punitive damages on behalf of himself and all
similarly-situated customers.
On January 31, 2005, another class action complaint against
Cincinnati Bell Wireless Company and Cincinnati Bell Wireless
LLC was filed in Kenton County, Kentucky. The allegations
raised and damages sought by plaintiffs in this action are very
similar to those previously described.
CLAYTON HOMES: Investors Urged To Approve $5M Lawsuit Settlement
----------------------------------------------------------------
Investors who owned stock in Clayton Homes when the company was
sold to Berkshire Hathaway in 2003 are being asked to approve
the $5 million settlement of a Denver pension fund's lawsuit
challenging Clayton's sale, The Knoxville News Sentinel reports.
A hearing on the class-action lawsuit, which was filed in July
2003 by the Denver Area Meat Cutters and Employers Pension Plan,
is set for May 16 in Blount County Circuit Court. The presiding
judge, Honorable Dale Young will approve or reject the
settlement for shareholders who held Clayton stock continuously
between April 1, 2003, and August 7, 2003.
Court documents show that Warren Buffett and his Berkshire
Hathaway holding corporation announced the purchase of Clayton
Homes for $1.7 billion on April 1, 2003, Clayton and Berkshire
filed a certificate of merger in Delaware on August 7, 2003, and
Clayton's stock stopped trading on the New York Stock Exchange.
Owners of 52.4 percent of Clayton's stock approved the
acquisition at a specially called shareholders meeting July 30,
2003, however the Denver pension plan's legal challenge has
dogged the deal since then.
The pension plan was among Clayton's shareholders who believed
the $12.50 per share paid by Berkshire was too low. Their
lawyers estimate that there were 47 million shares of Clayton
stock held by investors between April 1 and August 7.
According to the proposed settlement, stockholders are to get an
estimated 10 1/2 cents per share before attorneys' fees and
expenses and the cost of claims administration are deducted.
The pension fund's lawyers are seeking attorneys' fees totaling
one-third of the $5 million settlement fund plus reimbursement
of expenses of up to $175,000.
Clayton Homes spokesman Chris Nicely told The Knoxville News
Sentinel, "If no one opts out or appeals the decision, this will
conclude all issues associated with Berkshire's purchase of
Clayton."
Mr. Nicely statement might hold true though, if Leland Wykoff, a
Pigeon Forge resident who owned about 300 shares and was
dissatisfied with the price Berkshire paid for Clayton Homes,
objected to the deal. Mr. Wykoff, who is considering objecting
to the settlement told The Knoxville News Sentinel, "The
proposed settlement is inadequate in every regard. The proposed
settlement fails to adequately compensate the shareholders for
the damages they suffered. Given the shares of Clayton Homes
surged over a dollar per share above the offer price from
Berkshire Hathaway, a settlement offer of approximately 10 cents
per share fails to come close to the known damage." He also said
that it appears the settlement includes Clayton Homes insiders,
including family members, officers, directors and a Clayton
family foundation, that together held about 30 percent of the
company's stock. "The proposed settlement seems to further
injure public shareholders by allowing the Clayton Foundation to
share in proceeds from the settlement. Thus, those who did wrong
are rewarded for that wrongdoing," Mr. Wykoff adds.
COMMERCE BANCORP: Plaintiffs File Consolidated Fraud Suit in NJ
---------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Commerce Bancorp, Inc. and certain of its current and former
officers and directors in the United States District Court for
the District of New Jersey, Camden Division.
The suit alleges that the defendants violated federal securities
laws, specifically Sections 10(b) and 20(a) of the Securities
Act of 1934 and Rule 10b-5 of the Securities and Exchange
Commission. The plaintiffs seek unspecified damages on behalf
of a purported class of purchasers of the Company's securities
during various periods.
COMPUTER SCIENCES: Settles Overtime Pay Lawsuit in CA For $24M
--------------------------------------------------------------
Counsel for the plaintiffs report that the parties have reached
a settlement of an overtime pay class action lawsuit against
Computer Sciences Corporation ("CSC"). The settlement, which was
preliminarily approved today by U.S. District Court Judge George
P. Schiavelli of the Central District of California, resolves
all of the named plaintiffs' and class members' overtime claims
against CSC in exchange for the payment by defendants of $24
million. Current and former employees will be entitled to make
claims from a fund created by the settlement.
The suit was filed by plaintiffs on behalf of themselves and
approximately 30,000 current and former employees of CSC for
alleged violations of the Fair Labor Standards Act ("FLSA"),
California's Unfair Competition Law, and the wage and hour laws
of 13 states. Defendants deny any liability.
The proposed FLSA collective action includes all persons who
worked for CSC as an Associate Member of Technical Staff
("S01"), Member of Technical Staff B ("S02"), Member of
Technical Staff A ("S03"), Senior Member of Technical Staff
("S04"), or Computer Scientist ("S05") at any time between
November 12, 2000, and April 1, 2005. The state law classes
include the same persons from January 6, 2000, for all states
(except New York and Maine), Guam, and Puerto Rico, for New York
from October 1, 1998 and for Maine from January 6, 1998. The
groups do not include a limited group of centralized, non-client
based help desk employees with the title of Customer Support
Analyst.
Counsel for named plaintiffs and class members are James M.
Finberg of Lieff Cabraser Heimann & Bernstein, LLP, Todd F.
Jackson of Lewis, Feinberg, Renaker & Jackson, P.C., and Steven
G. Zieff of Rudy, Exelrod & Zieff, LLP. Similar lawsuits, filed
by Joseph Antonelli of the Law Office of Joseph Antonelli, Kevin
T. Barnes of the Law Office of Kevin T. Barnes, and Michael J.
Procopio of the Law Office of Michael J. Procopio, are also
included as part of this settlement.
CVS CORPORATION: MA Court Denies Summary Judgment in Stock Suit
---------------------------------------------------------------
The United States District Court for the District of
Massachusetts denied CVS Corporation's motion for summary
judgment in the consolidated securities class action filed
against it, styled "In re CVS Corporation Securities Litigation,
No. 01-CV-11464 (JLT)."
Beginning in August 2001, a total of nine actions were filed
against the Company, asserting claims under the federal
securities laws. The actions were subsequently consolidated and
on April 8, 2002, a consolidated and amended complaint was
filed. The consolidated amended complaint names as defendants
the Company, its chief executive officer and its chief financial
officer, and asserts claims for alleged securities fraud under
sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 thereunder on behalf of a class of persons who
purchased shares of the Company's common stock between February
6, 2001 and October 30, 2001.
On June 7, 2002, all defendants moved to dismiss the
consolidated amended complaint. The court denied the motion on
December 18, 2002, and on January 24, 2003, defendants
accordingly filed an answer to the consolidated amended
complaint. Discovery on merits issues concluded in September
2004 and expert discovery concluded in December 2004. On January
14, 2005, all defendants filed a motion for summary judgment. On
March 8, 2005 this motion was denied and a trial date has been
set for May 9, 2005.
The suit is styled "In re CVS Corporation Securities Litigation,
No. 01-CV-11464 (JLT)," filed in the United States District
Court in Massachusetts, under Judge Joseph L. Tauro. The
Company is represented by:
(1) John J. Clarke, Jr., Dennis E. Glazer, Helen Harris,
Trisha Lawson, Davis Polk & Wardwell 450 Lexington
Avenue New York, NY 10017 Phone: 212-450-4000;
(2) Michael S. Gardener and Kevin M. McGinty, Mintz, Levin,
Cohn, Ferris, Glovsky & Popeo, PC, One Financial Center
Boston, MA 02111 Phone: 617-542-6000 Fax: 617-542-2241
E-mail: mgardener@mintz.com
The plaintiffs are represented by:
(i) Nancy F. Gans, Moulton & Gans, PC, 33 Broad Street
Suite 1100 Boston, MA 02109 Phone: 617-369-7979 Fax:
617-369-7980 E-mail: nfgans@aol.com
(ii) Charles S. Hellman, Jared Specthrie, Milberg Weiss
Bershad & Schulman LLP One Pennsylvania Plaza New York,
NY 10119-0165 Phone: 212-594-5300 Fax: 212-868-1229
(iii) Thomas G. Shapiro, Shapiro Haber & Urmy LLP 53 State
Street Boston, MA 02108 Phone: 617-439-3939 Fax: 617-
439-0134 E-mail: tshapiro@shulaw.com
(iv) Benjamin J. Sweet, Michael K. Yarnoff, Schiffrin &
Barroway, LLP 280 King of Prussia Road Radnor, PA 19087
Phone: 610-667-7706 Fax: 610-667-7056
CVS CORPORATION: Pension Plan Participants File ERISA Suit in MA
----------------------------------------------------------------
CVS Corporation faces a class action filed in the United States
District Court in Massachusetts, asserting claims under the
Employee Retirement Income Security Act, styled "Fescina v. CVS
Corp., et. al., No. 04-CV-12309 (JLT)."
The purported class includes persons who were participants in or
beneficiaries of the CVS 401(k) plan between December 1, 2000
and October 30, 2001. The suit was filed in the United States
District Court for the District of Massachusetts and designated
as related to the Securities Action. The complaint names as
defendants the Company, its chief executive officer, certain
members of the CVS Board of Directors, and certain unnamed
fiduciaries.
The suit is styled "Fescina v. CVS Corporation et al, case no.
1:04-cv-12309-JLT," filed in the United States District Court in
Massachusetts, under Judge Joseph L. Tauro. Representing
plaintiff Joseph Fescina is Deborah R. Gross of Law Office of
Bernard M. Gross, PC Suite 200 1515 Locust Street 2nd Floor
Philadelphia, PA 19102 Phone: 215-561-3600 Fax: 215-561-3000 E-
mail: debbie@bernardmgross.com
FRANCE: Canadian Firm Invited To Paris Class Action Conference
--------------------------------------------------------------
After French President Jacques Chirac announced at the beginning
of the year that he had instructed his government to introduce
class action legislation and intended to use Quebec's class
action regime as the basis for the French legislation. France's
prominent employers' federation, the Confederation of French
Industry (the MEDEF), and the influential CCIP, the Paris
Chamber of Commerce and Industry, recently sponsored a class
action conference in Paris, The Mondaq News Alerts reports. The
French president's announcement, which came at a time when the
United States is attempting to tighten its grip on class action
suits, sparked widespread unease in the French legal and
business communities.
At the prestigious conference that was sponsored by MEDEF and
CCIP, Davies Ward Phillips & Vineberg LLP partners, Lucien
Bouchard, Guy Du Pont and David Stolow from the Montreal office,
gave the keynote presentation on the Quebec class action
experience. In his speech, Mr. Bouchard said, "An important
debate has begun in France on the question of class actions and
we were pleased to share our observations based on the Quebec,
Canadian and American experience."
Davies was the only Canadian firm invited to speak at the
conference. Mr. Du Pont explained, "Over the last few years,
Davies has been involved in very complex and important class
action suits, which have given us a very specific expertise in
this field."
Their presentation examined the evolution of the class action
scheme in Quebec including the firm's recent constitutional
challenge to Quebec's class action legislation. This challenge,
which has, in effect, brought the entire class action regime in
Quebec to a standstill, was argued last month before the Quebec
Court of Appeal.
The Paris conference attracted over 350 persons, representing
many of the leaders of the French legal and business communities
and included senators, judges, lawyers, in-house counsel,
journalists, professors, advisors, consultants and directors and
officers of some of the foremost corporations in France. Among
those corporations represented were: Vivendi Universal, L'OREAL,
BNP Private Equity BNP Paribas, France Telecom, PSA Peugeot, the
Walt Disney Company, Bristol-Myers Squibb, McDonald's France,
Johnson & Johnson, Microsoft France, Philip Morris France,
Renault and Hewlett Packard France.
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.
Consumer groups, who support such a move by that government
pointed out that 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."
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.
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, 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.
For more details, contact Nicolas Rubbo, Marketing Manager
Montr‚al, Davies Ward Phillips & Vineberg LLP by Phone:
514-841-6451 by Fax: 514-841-6499 or by E-mail: nrubbo@dwpv.com
OR Christine Arnott, Marketing Manager Toronto, Davies Ward
Phillips & Vineberg LLP by Phone: 416-367-6902 by Fax:
416-863-0871 or by E-mail: carnott@dwpv.com.
HANGER ORTHOPEDIC: Plaintiffs File Consolidated Suit in E.D. NY
---------------------------------------------------------------
Plaintiffs filed a consolidated amended securities class action
against Hanger Orthopedic Group, Inc. in the United States
District Court for Eastern District of New York, styled "In re
Hanger Orthopedic Group, Inc. Securities Litigation, No. 1:04-
cv-2585."
Between June 22, 2004 and July 1, 2004, five putative securities
class action complaints were filed against the Company. Four
were filed in the Eastern District of New York, namely:
(1) Twist Partners v. Hanger Orthopedic Group, Inc., et
al., No. 1:04-cv-02585 (filed 06/22/2004, E.D.N.Y);
(2) Shapiro v. Hanger Orthopedic Group, Inc., et al., No.
1:04-cv-02681 (filed 06/28/2004, E.D.N.Y.);
(3) Imperato v. Hanger Orthopedic Group, Inc., No. 1:04-cv-
02736 (filed 06/30/2004, E.D.N.Y.);
(4) Walters v. Hanger Orthopedic Group, Inc., et al., No.
1:04-cv-02826 (filed 07/01/2004, E.D.N.Y.)
One is pending in the United States District Court for the
Eastern District of Virginia, styled "Browne v. Hanger
Orthopedic Group, Inc., et al., No. 1:04-cv-715 (filed
06/23/2004, E.D. Va.)."
The complaints asserted that the Company's reported revenues
were inflated through certain billing improprieties at one of
the Company's facilities. The plaintiffs in "Browne"
subsequently dismissed their complaint without prejudice, and
the four remaining cases were consolidated into a single action
in the Eastern District of New York.
On February 15, 2005, the lead plaintiffs in the Consolidated
Securities Class Action filed a Consolidated Amended Complaint.
The Amended Complaint asserts that the Company's reported
revenues were inflated through certain billing improprieties at
some of the Company's facilities. In addition, the Amended
Complaint asserts that the Company violated the federal
securities laws in connection with a restatement announced by
the Company on August 16, 2004, restating certain of the
Company's financial statements during 2001 through the first
quarter of 2004. The Amended Complaint purports to allege
violations of Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder, as well as
violations of Section 20(a) of the Exchange Act by certain of
the Company's executives as "controlling persons" of the
Company.
HECLA MINING: ID High Court Dismisses Personal Injury Appeal
------------------------------------------------------------
The Idaho Supreme Court dismissed the plaintiffs' appeal of the
dismissal of the class action filed against Hecla Mining
Corporation and several corporate defendants on behalf of three
plaintiff classes of Coeur d'Alene Basin residents and current
and former property owners.
On January 7, 2002, a class action complaint was filed in the
Idaho District Court, County of Kootenai, against several
corporate defendants, including the Company. The complaint
pursues three types of relief: various medical monitoring
programs, real property remediation and restoration programs,
and damages for diminution in property value, plus other damages
and costs the plaintiffs allege resulted from historic mining
and transportation practices of the defendants in the Coeur
d'Alene Basin.
On August 18, 2004, the District Court of Kootenai County issued
its Opinion and Order with respect to a number of Summary
Judgment Motions filed by the defendants in the litigation. In
the Order, the Judge dismissed all of the plaintiff's claims
against the defendants, asserting that in each case the
applicable statute of limitations had been exceeded prior to
filing the lawsuit. The Court held that Hecla Mining Company
had completely ceased discharging mill tailings into the South
Fork of the Coeur d'Alene River in 1968 and that all mill
tailings were deposited on lands within ten years of that date
or by 1978. The Court stated that the action was brought in
2002, and the four-year statute of limitations had expired.
Therefore, the Court held that the lawsuit against the Company
was time barred. In September 2004, the plaintiffs filed a
Notice of Appeal, appealing the District Court's dismissal
decision to the Idaho Supreme Court. On December 13, 2004 the
Idaho Supreme Court, pursuant to a stipulation among the
parties, dismissed the appeal and ordered each party to bear its
own costs and attorney fees.
HERCULES INC.: NY Court Dismisses Vietnamese Agent Orange Suit
--------------------------------------------------------------
The United States District Court for the Eastern District of New
York dismissed the class action filed against Hercules, Inc. by
The Vietnam Association for Victims of Agent Orange/Dioxin and
several individuals who claim to represent between two and four
million Vietnamese.
The plaintiffs allege that Agent Orange used by the United
States during the Vietnam War caused them or their families to
sustain personal injuries. The suit is styled "The Vietnam
Association for Victims of Agent Orange/Dioxin, et al. v. The
Dow Chemical Company, et al., Civil Action No. 04 CV 0400
(JBW)." That complaint alleges violations of international law
and war crimes, as well as violations of the common law for
products liability, negligence and international torts.
The defendants moved to dismiss this case on several grounds,
including failure to state a claim under the Alien Tort Claims
Statute, lack of jurisdiction and justiciability, the bar of the
statute of limitations, failure to state claims for violations
of international law, and the "government contractor defense." A
hearing on these motions was held on February 28, 2005. By
order dated March 10, 2005, the Court dismissed this lawsuit.
The Company anticipates that plaintiffs will appeal the Court's
decision.
The suit is styled "Vietnam Association for Victims of Agent
Orange/Dioxin et al v. Dow Chemical Company et al, case no.
1:04-cv-00400-JBW-JMA," filed in the United States District
Court for the Eastern District of New York, under Judge Jack B.
Weinstein. Representing the plaintiffs is Constantine Peter
Kokkoris of Abberley & Koolman, 521 Fifth Avenue New York, NY
10175 Phone: 212-349-9340 Fax: 212-587-8115 E-mail:
cpk@kokkorislaw.com.
HERCULES INC.: Discovery Proceeds in LA Personal Injury Lawsuits
----------------------------------------------------------------
Discovery is continuing in the class actions filed against
Hercules, Inc. on behalf of direct and contract employees of
Georgia Gulf, alleging personal injury due to groundwater
contamination.
By Order dated May 6, 2003, the U.S. District Court for the
Middle District of Louisiana remanded to the 18th Judicial
District Court for the Parish of Iberville, Louisiana, a total
of nine consolidated lawsuits, including two lawsuits in which
the Company is a defendant. These two lawsuits, styled "Jerry
Oldham, et al. v. The State of Louisiana, et al., Civil Action
No. 55,160, 18th Judicial District Court, Parish of Iberville,
Louisiana," and "John Capone, et al. v. The State of
Louisiana, et al., Civil Action No. 56,048C, 18th Judicial
District Court, Parish of Iberville, Louisiana," were served on
the Company in September 2002 and October 2002, respectively.
The "Oldham" case is a purported class action comprised of
approximately 2,000 plaintiffs who are or were direct employees
of Georgia Gulf, and the "Capone" case is a consolidated action
by approximately 44 plaintiffs who are or were contract
employees at Georgia Gulf. Both actions assert claims against
the State of Louisiana, the Company, American PetroFina, Inc.,
Hercofina, Ashland Oil, International Minerals and Chemicals,
Allemania Chemical, Ashland Chemical and the Parish of
Iberville. The purported class members and plaintiffs, who
claim to have worked or lived at or around the Georgia Gulf
plant in Iberville Parish, allege injury and fear of future
illness from the consumption of contaminated water and,
specifically, elevated levels of arsenic in that water. As to
the Company, plaintiffs allege that the Company itself and as
part of a joint venture operated a nearby plant and, as part of
those operations, used a groundwater injection well to dispose
of various wastes, and that those wastes contaminated the
potable water supply at Georgia Gulf.
On October 17, 2002, the Company removed these matters to
federal court. In January 2003, the U.S. District Court for the
Middle District of Louisiana consolidated the "Oldham" and
"Capone" matters with other lawsuits (including the "Batton"
matter, discussed below) in which the Company is not or was not
a party. Plaintiffs sought remand which, as noted above, was
granted by Order dated May 6, 2003. In March 2004, Atofina,
successor to American PetroFina, Inc. was dismissed without
prejudice.
In January 2005, plaintiffs filed a motion to add the Company
and other defendants to a case captioned "Georgenner Batton, et
al. v. The State of Louisiana, et al, Civil Action No. 55,285,
18th Judicial District Court, Parish of Iberville, Louisiana;"
that motion was granted by the Court in February 2005. The
"Batton" lawsuit is a purported class action comprised of
plaintiffs who are or were contract employees of Georgia Gulf
since 1995 and who are asserting nearly identical allegations as
the plaintiffs in the "Oldham" lawsuit. Plaintiffs have filed a
motion to certify the purported classes of plaintiffs in the
"Oldham" and "Batton" matters, and a hearing is set for December
5-7, 2005.
HERCULES INC.: PA Court Yet To Rule on ERISA Suit Certification
---------------------------------------------------------------
Plaintiffs asked the United States For the Eastern District of
Pennsylvania to grant class certification to the lawsuit filed
against Hercules, Inc., styled "Charles Stepnowski v. Hercules
Inc.; The Pension Plan of Hercules Inc.; The Hercules Inc.
Finance Committee; and Edward V. Carrington, Hercules' Vice
President Human Resources, Civil Action No. 04-cv-2296."
An Amended Complaint was filed on June 16, 2004. Styled as a
class action, the Amended Complaint seeks benefits under the
Pension Plan of Hercules Incorporated (the "Plan"), and alleges
violations of the Employee Retirement Income Security Act, 29
U.S.C. Section 1001 et seq. (ERISA). Under the Plan, eligible
retirees of the Company may opt to receive a single cash payment
of 51% of the present value of their accrued benefit (with the
remaining 49% payable as a monthly annuity). The Amended
Complaint alleges that the Company's adoption of a new interest
rate assumption used to determine the 51% cash payment
constitutes a breach of fiduciary duty and a violation of the
anti-cutback requirements of ERISA and the Internal Revenue
Code. The Amended Complaint seeks the payment of additional
benefits under ERISA (as well as costs) and seeks to compel the
Company to use an interest rate assumption that is more
favorable to eligible retirees. The Amended Complaint seeks to
establish a class comprised of all Plan participants who retired
(or who will retire) on or after December 1, 2001.
On August 23, 2004, the Company filed a Motion to Dismiss and
Motion to Strike Plaintiff's Class Allegations. The plaintiffs
also filed a Motion to Certify This Action As a Class Action.
Responsive pleadings have and continue to be filed.
IMPROVEMENT INC.: Locklear Electric Lodges Junk Faxes Suit in IL
----------------------------------------------------------------
Locklear Electric of Wood River commenced a class action lawsuit
against a business that sent it an unsolicited fax, The Madison
County Record reports.
According to a suit, which was filed in Madison County Circuit
Court, "The unsolicited fax constitutes an unlawful taking of
Locklear's fax paper, toner ink, and electricity." Locklear's
suit, which is the second class action filed this week in
Madison County and the 41st overall for the year, against
Improvement Inc. of Scottsdale, Arizona claims that on February
10 it received one or more unwanted faxes from the company.
Furthermore, the suit claims that Improvement Inc. is liable for
$1,500 in damages for each separate unsolicited fax it sent.
Locklear had filed a similar class action complaint against
National Association of Preferred Providers six days after
President George W. Bush signed the Class Action Fairness Act
into law on February 18.
As previously reported in the February 28, 2005 edition of the
Class Action Reporter, the Alton law firm of Schrempf, Blaine,
Kelly & Darr filed that suit, which identifies additional
plaintiffs as "all persons and entities within the state of
Illinois." It specifically alleges that the National Association
of Preferred Providers and its registered agent, Michael Rable,
of Houston, unlawfully sent unsolicited fax advertisements to
the plaintiffs. The suit also alleges that the unsolicited faxes
consumed the plaintiff's paper, toner and electricity, thus they
are seeking compensation from $500 to $1,500 per unsolicited
fax.
Legal experts explain that in order for the Locklear's newest
suit to be unaffected by a new federal law which governs whether
class action lawsuits are filed in state or federal court, the
complaint claims, "the aggregate of the class is less than $5
million." They explain that the new Class Action Fairness Act
calls for all cases seeking more than $5 million in damages are
to be heard in federal court.
According to the complaint, Improvement did not obtain "prior
express invitation or permission" before sending the fax
advertisement in violation of the Federal Telephone Consumer
Protection Act, which states that it is unlawful for any person
to use a fax machine to send an unsolicited advertisement.
In addition, Locklear is also seeking an injunction to prohibit
and prevent future violations. Locklear is represented in the
case, which has been assigned to Circuit Judge Daniel Stack, by
Lanny Darr of Schrempf, Blaine, Kelly & Darr of Alton.
LENNAR HOMES: Solicitation Letters Sent To Natomas Homeowners
-------------------------------------------------------------
Residents in a North Natomas neighborhood have been receiving
letters in their mailboxes from a Southern California law firm
that is urging them to join in a class-action lawsuit against a
homebuilder, KCRA-TV reports.
The letters say that the homes in a specific Natomas area, which
are only about 5 years old, are experiencing defects, including
leaky roofs and faulty plumbing. It also says that the residents
can join the lawsuit with no out-of-pocket costs. The
solicitation claims to be a newsletter investigating a lawsuit
against the builder, Lennar Homes.
At first, homeowner Todd Lange responded to the letter, but then
backed off. He told KCRA-TV, "When someone offers you something
for free, you better be very careful about what you're signing.
According to California Building Industry Association
representative Kim Dellinger, "We typically find that the first
contact these lawyers have with the homeowners is when they
respond to the mailing, and they use scare tactics to encourage
people to sign up for a lawsuit."
The law firm involved said that if builders did high quality
work, homeowners wouldn't need a lawyer. "If a person can't get
good customer service and satisfaction, then someone needs to
hold builders accountable for their mistakes," plaintiffs'
attorney Fred Adelman told KCRA-TV.
Some homeowners were perfectly happy with their homes, while
others were not. Lisa Iwanyczko said that her builder responded
very quickly and without any hassle, and that she was impressed,
however she told KCRA-TV that she is not surprised to see the
letter because she has heard several complaints.
LUFKIN INDUSTRIES: To Appeal TX Decision in Race Bias Lawsuit
-------------------------------------------------------------
Lufkin Industries, Inc. intends to appeal the United States
District Court for the Eastern District of Texas' decision,
awarding back pay and ordering the Company to pay plaintiffs'
court costs and attorneys' fees in the class action filed
against it, alleging race discrimination in employment.
An employee and a former employee filed the suit on March
7,1997. Certification hearings were conducted in Beaumont,
Texas in February 1998 and in Lufkin, Texas in August 1998. In
April 1999, the Court issued a decision that certified a class
for this case, which included all persons of a certain minority
employed by the Company from March 6, 1994, to the present. The
Company appealed this class certification decision by the
District Court to the U.S. Court of Appeals for the Fifth
Circuit in New Orleans, Louisiana. This appeal was denied on
June 23, 1999.
The case was closed from 2001 to 2003 while the parties
unsuccessfully attempted mediation. Trial for this case began in
December 2003, but was postponed by the District Court and was
completed in November 2004. The only claims made at trial were
those of discrimination in initial assignments, promotions and
compensation. On January 13, 2005 the District Court entered
its decision finding that the Company discriminated against
African-American employees when awarding initial assignments and
promotions. The District Court also concluded that the
discrimination resulted in a shortfall in income for those
employees and ordered that the Company pay those employees back
pay to remedy such shortfall, together with pre-judgment
interest in the amount of 10%, compounded annually. The
Company's preliminary estimate is that the total amount of back
pay that it would be required to pay to the class of affected
employees could total up to $6 million (including interest). In
addition to back pay with interest, the Court:
(1) enjoined and ordered the Company to cease and desist
all racially biased assignment and promotion practices,
(2) ordered the Company to pay court costs and
(3) agreed to consider a request for awarding plaintiffs'
attorneys' fees against the Company.
On January 27, 2005, the plaintiffs moved for an interim award
of attorney fees and costs, which they estimated to be $6.5
million, but to date the District Court has not ruled on this
request. The Company has reviewed this decision with its outside
counsel and intends to appeal the decision to the U.S. Court of
Appeals for the Fifth Circuit. The Company believes that after
a full and fair review by the appeals court of the evidence, the
Court of Appeals will determine that the plaintiffs have not
established their claims of discrimination by the Company
against the plaintiffs and will enter a decision to that effect
and will dismiss the case against the Company.
The suit is styled "McClain, et al, v. Lufkin Industries, case
no. 9:97-cv-00063-HC," filed in the United States District Court
for the Eastern District of Texas, under Judge Howell Cobb.
Representing the plaintiffs are:
(1) Morris J. Baller, Teresa Demchak, Meetali Jain, Nina
Rabin, Goldstein Demchak Baller Borgen 300 Lakeside Dr
Suite 1000 Oakland, CA 94612 Phone: 510-763-9800 Fax:
15108351417 E-mail: mjb@gdblegal.com, dem@gdblegal.com,
mjain@gdblegal.com, nrabin@gdblegal.com;
(2) Timothy Borne Garrigan, Stuckey Garrigan & Castetter
2803 North Street PO Box 631902 Nacogdoches, TX 75963-
1902 Phone: 936/560-6020 Fax: 19365609578 E-mail:
tbgstugar@cox-internet.com
(3) Darci E. Burrell, Linda M. Dardarian, Joshua G.
Konecky, Saperstein Goldstein Demchak & Baller 300
Lakeside Dr Ste 1000 Oakland, CA 94612 Phone: 510/763-
9800 Fax: 15108351417 E-mail: deb@gdblegal.com,
jgk@gdblegal.com
Representing the Company are Christopher V. Bacon, Douglas
Edward Hamel and John H. Smither, Vinson & Elkins, 1001 Fannin
St Suite 2300 Houston, TX 77002-6760 Phone: 713/758-2222 Fax:
17136155014 E-mail: cbacon@velaw.com, dhamel@velaw.com.
MORGAN STANLEY: Reaches $41.5M Settlement For Mutual Fund Suits
---------------------------------------------------------------
Morgan Stanley is set to pay $41.5 million to settle two class
action lawsuits charging that mutual funds owned by the
brokerage firm defrauded investors by overvaluing their assets,
The Consumer Affairs reports.
Court documents show that Van Kampen Prime Rate Income Trust, a
Morgan Stanley subsidiary, agreed to pay $31.5 million, while
Morgan Stanley will pay $10 million to settle a suit involving
the Morgan Stanley Senior Loan Fund. Morgan Stanley has denied
it defrauded investors and did not admit any wrongdoing as part
of the settlements.
According to Paul Geller, one of the lawyers handling the cases,
each settlement sum represents the difference between what
investors paid for their shares and what they would have paid if
the shares had been fairly priced.
Mr. Gellar also told The Consumer Affairs that U.S. District
Judge Richard Howell in Manhattan gave preliminary approval to
the Morgan Stanley settlement and is expected to give final
approval on May 25. U.S. District Judge William Hart in Chicago
was advised of the settlement agreement in the Van Kampen suit,
he adds.
OHIO: Prisons Hope To Settle Inmates' Medical, Dental Care Suit
---------------------------------------------------------------
The state is trying to settle a class-action lawsuit brought by
inmates alleging inadequate health care, according to Reginald
Wilkinson, director of the Ohio Department of Rehabilitation and
Correction, The Associated Press reports.
The director of Ohio's prison system told The Associated Press
that a final agreement will depend on how much it will cost Ohio
to make changes to the way it provides prison medical treatment.
He adds, "If we thought the dollar amount was going to be so
exorbitant it would just not be good for state government, then
we would probably invoke our options to appeal, or go to court."
Kim Norris, spokeswoman for Attorney General Jim Petro, told AP
both sides are working toward an agreement.
Filed in October 2003, the lawsuit, which was certified as a
federal class-action suit last year, alleges that Ohio prisoners
receive inadequate medical and dental care because state
officials are deliberately indifferent to their needs. In
addition, the suit contends that the prisoners have a
constitutional right to health care because they are confined
and depend on the state. Currently both sides are studying a
600-page report that was prepared by a team of prison health
care experts hired by the state and attorneys for the inmates to
aid in the settlement.
That report, submitted in January, documented numerous problems
with health care. Treatment of HIV, for example, "was found to
be so profoundly inadequate as to amount to no care at all," the
report said. Additionally, the report found that the system of
contracting with doctors led to a "low-bid" approach to care.
The report also said that most patients "seem to be seen by
physicians for only a brief encounter with very little
documented physician evaluation."
Though the report doesn't indicate the cost of making changes,
Mr. Wilkinson is optimistic and told The Associated Press, "From
the deliberations and the discussions we've had with plaintiffs'
counsel and the consultants, we think we're going to be able to
keep that cost down more than what I would have been able to
speculate a year ago or six months ago."
However, Mr. Wilkinson adds that medical costs continue to be a
concern with or without a lawsuit. He also said that the state
would spend an additional $5 million this year on prescription
drugs and particularly psychotropic drugs to treat mental
illness.
As previously reported in the October 17, 2003 edition of the
Class Action Reporter, the Prison Reform Advocacy Center, based
in Cincinnati, filed the lawsuit in federal court against the
state's prison system, which includes the Mansfield Correctional
and Richland Correctional Institutions, on behalf of three
inmates who allege that Ohio prisoners receive inadequate
medical and dental care because state officials are deliberately
indifferent to the their needs.
Specifically, the suit alleges that the state's prisons have
failed to provide proper emergency care to critically ill
inmates who later died and have hired incompetent medical
providers with disciplinary problems and criminal backgrounds.
It also claims that prisoners suffer from medical- and dental-
staffing shortages, delays in tests and referrals to specialists
and use of less effective and cheaper drugs and procedures.
Plaintiffs' lawyers asked U.S. District Judge Sandra Beckwith to
make the lawsuit a class action that would represent all Ohio
inmates who have had similar problems, AP reports.
PNC FINANCIAL: Reaches Settlement for PA Consolidated Stock Suit
----------------------------------------------------------------
PNC Financial Services Group, Inc. reached settlement agreements
relating to certain lawsuits and other claims related to three
2001 transactions (labeled the "PAGIC transactions") that gave
rise to a financial statement restatement the Company announced
on January 29, 2002 and that were the subject of a July 2002
consent order between the Company and the United States
Securities and Exchange Commission and a June 2003 Deferred
Prosecution Agreement between the United States Department of
Justice and PNC ICLC Corp., one of its indirect non-bank
subsidiaries.
The several putative class action complaints filed during 2002
in the United States District Court for the Western District of
Pennsylvania arising out of the PAGIC transactions have been
consolidated in a consolidated class action complaint brought on
behalf of purchasers of the Company's common stock between July
19, 2001 and July 18, 2002. The consolidated class action
complaint names the Company, its Chairman and Chief Executive
Officer, its former Chief Financial Officer, its Controller, and
its independent auditors for 2001 as defendants and seeks
unquantified damages, interest, attorneys' fees and other
expenses. The consolidated class action complaint alleges
violations of federal securities laws related to disclosures
regarding the PAGIC transactions and related matters.
In August 2002, the United States Department of Labor began a
formal investigation of the Administrative Committee of the
Company's Incentive Savings Plan ("Plan") in connection with the
Administrative Committee's conduct relating to the Company's
common stock held by the Plan. Both the Administrative Committee
and PNC are cooperating fully with the investigation.
In June 2003, the Administrative Committee retained Independent
Fiduciary Services, Inc. (IFS) to serve as an independent
fiduciary charged with the exclusive authority and
responsibility to act on behalf of the Plan in connection with
the pending securities litigation referred to above and to
evaluate any legal rights the Plan might have against any
parties relating to the PAGIC transactions. This authority
includes representing the Plan's interests in connection with
the Restitution Fund set up under the Deferred Prosecution
Agreement. The Department of Labor has communicated with IFS in
connection with the engagement.
On December 17, 2004, the Company entered into a tentative
settlement of the consolidated putative class actions, reflected
in a Memorandum of Understanding between the plaintiffs and the
Company, its former and current executive officers who are
defendants in the lawsuit, and AIG Financial Products
Corporation. The tentative settlement is subject to completion
of final documentation, court approval and other conditions,
including some that are outside the control of the parties.
SHARP ELECTRONICS: Recalls 373T Televisions Due To Fire Hazard
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Sharp Electronics Corporation, of Mahwah, New Jersey is
voluntarily recalling about 373,000 27-Inch Sharp Conventional
Tube (CRT) televisions.
Power button can break allowing objects to be inserted through
the opening. Foreign materials such as crayons, metal objects or
straws can ignite posing a fire hazard. Sharp has received 23
reports of fires. One incident is reported to have resulted in
$20,000 in property damage. The others resulted in minor
property damage. No injuries have been reported.
The recalled 27-inch Sharp conventional tube televisions include
models 27RS50, 27RS100 and CSR5027. The model number can be
found on the label on the back of the television.
Manufactured in Mexico, the televisions were sold at all
electronics retailers, department stores and mass merchandisers
nationwide from March 2001 through February 2005 for about $250.
Consumers should immediately unplug and stop using these
recalled televisions and contact Sharp Electronics Corp. for a
free repair. For more details, contact Sharp Electronics Corp.
at (800) 291-4289 anytime or log onto the firm's Web site:
http://www.sharpusa.com/tvor consumers can also email Sharp at
TV@sharpsec.com.
SPARTAN CHASSIS: Recalls 4735 Motor Homes For Defective Gauges
--------------------------------------------------------------
Spartan Chassis, Inc. in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
is voluntarily recalling about 4735 2002-2005 SPARTAN / K2,
2003-2004 SPARTAN / ME, 2002-2005 SPARTAN / MG, 2004 SPARTAN /
MGNAT, 2002-2005 SPARTAN / MGTRA, 2003-2005 SPARTAN / MM, 2002
SPARTAN / MMJAY, 2002-2005 SPARTAN / MMTRA, 2004-2005 SPARTAN /
NVS, 2003 SPARTAN / SG, 2002-2004 SPARTAN / SP.
According to ODI, on certain motor homes equipped with NGI air
pressure gauges located on the dash panel is giving a false
reading.
As a consequence, the low air warning will sound, but there may
not be enough time to react before the spring (park) brake
engages, increasing the risk of a crash.
As a remedy, dealers will use a jumper harness containing a 33-
ohm resistor, which will shift the resistance curve of the air
pressure sender to match the alarm point of the current gauge.
For more details, contact Spartan by Phone: 517-543-6400 or the
NHTSA Auto Safety Hotline: 1-888-327-4236.
TENNESSEE: ADA Suit Would Require Hospital Improvements
-------------------------------------------------------
A lawsuit that was filed in U.S. District Court for the Eastern
District of Tennessee five years ago, which is entitled Access
Now et al vs. Community Hospital of Andalusia has reached a
settlement that though not monetary will still cost hospitals
involved in the suit nonetheless, The Ledger Independent
reports.
Charles Ferguson, one the lawyers from the firm of de la O and
Marko, told The Ledger Independent that the Title III class
action suit has reached a settlement that requires hospitals
named in the suit to rectify violations of the American with
Disabilities Act of 1992. He adds, "Four hospitals are named in
the suit, Life Point, HCA -- which is Columbia hospitals, Tenet
and Triad."
The suit is based on architectural barriers that disabled
patients have come across while using the facility, Mr. Ferguson
said.
He pointed out that the proposed settlement requires the
hospitals to make modifications and alterations that involve
public restrooms, paths of travel, parking and other public
areas within the facility. These modifications are to be done
with the express purpose of improving or providing equal access
to and usability of the facilities by person with disabilities,
he adds.
According to Mr. Ferguson, a Title III class action suit does
ask for monetary damages to persons who have been discriminated
against, instead the suit asks only that privately owned
entities, which are used by the public comply with the ADA. Mr.
Ferguson told The Ledger Independent," The plaintiffs are
trailblazers. They may never derive benefit of the services they
are requesting, but others will. They are heroes to the
disabled."
A court hearing in the Eastern District of Tennessee will be
held June 13 to determine if the proposed settlement is fair and
reasonable and should be given final approval by the court. Mr.
Ferguson said objections to the settlement can be made on June
13, but he sees no reason any should be made saying, "I think
the court will approve the settlement. I foresee no objections."
TEXAS: LULAC Leaders File Discrimination Suit V. City of Houston
----------------------------------------------------------------
Local leaders of the League of United Latin American Citizens
filed a class-action complaint with the U.S. Justice Department
on behalf of Latino city of Houston employees, some of whom
claim they have been discriminated against, The Houston
Chronicle reports.
According to Johnny Mata, District VIII spokesman for the League
of United Latin American Citizens, "LULAC has received numerous
complaints of discrimination against Hispanics who have been
subjected to a hostile working environment."
The complaint, which was also sent to the U.S. Department of
Transportation and then distributed to the media, details
numerous incidents of alleged mistreatment of Latino city
employees, which include allegations of ethnic and sexual
harassment and discriminatory hiring, firing and promotions.
Mr. Mata told The Houston Chronicle, "We've made a good-faith
effort to work with several city administrations, including the
current one, to no avail."
Frank Michel, Mayor Bill White's spokesman, told The Houston
Chronicle that LULAC leaders would not release a copy of the
complaint to the city legal department and with specific
employees involved, according to him, comment could be further
limited. "But what the mayor has said emphatically is that
discrimination on the basis of race or ethnicity is against the
law, against city policy, and we've taken great care not to
violate either one," he adds.
Several of the incidents cited in the complaint center on
alleged mistreatment at the city aviation department, where some
Latinos claim they have been passed over for promotions and
generally treated badly. However, the complaint also includes
claims of arbitrary dismissals and maltreatment in departments
including the public library and public works and engineering.
Commenting on the current problems the city faces, David J.
Leal, a former engineer who alleges he was fired for bringing
attention to the inequitable treatment of Latinos told The
Houston Chronicle, "I think what the city needs is the best
people in the best positions, period, regardless of what the
race, ethnicity or gender or anything is, and that's not what's
happening."
TOWNSEND AND TOWNSEND: Former Partners Sue For A Share Of Fees
--------------------------------------------------------------
Former equity partners, Duane Mathiowetz and K.T. "Sunny"
Cherian, are dueling with Townsend and Townsend and Crew over
whether they should get a cut of the firm's bounty from an
antitrust class action against Microsoft Corporation, The
Recorder reports.
The duo sued their old firm for breach of contract, each seeking
at least $700,000 in damages asserting that they are entitled to
a pro-rated cut for contingency cases the firm was working on
before the pair left for Howrey Simon Arnold & White two years
ago. Though their complaint in San Francisco Superior Court
doesn't refer to any particular litigation, the Microsoft case
is at least one point of contention.
According to Townsend Chairman James Gilliland Jr., his firm
expects to collect $30 million to $32 million in fees for its
role as lead class counsel in an antitrust class action against
the software giant. Mr. Gilliland told The Recorder, "That, I
suspect, is what this is really about."
Mr. Cherian confirmed to The Recorder that the recovery in the
Microsoft case is one issue, but declined to elaborate further
on the suit. Mr. Mathiowetz though did not return calls seeking
comment.
Worth up to $1.1 billion in vouchers for California consumers,
the settlement in the 27 coordinated actions was announced about
three months before the partners left the firm in 2003. More
than a year later that a San Francisco Superior Court judge
formally approved the settlement, then awarded $101 million in
fees to be split among more than 30 firms. Townsend estimates it
will collect about a third of the money, though some firms are
still squabbling over how to split it up.
At the heart of the former partners' dispute is a disagreement
over how Townsend has interpreted its partnership agreement in
the past. The firm maintains that the date that it actually
gets the money in hand determines who reaps the benefits. Under
longstanding policy, Mr. Gilliland explained that the firm's
equity partners all get a cut of any contingency fee paid while
they're at the firm. However, those who leave to practice law
somewhere else don't get to reap the benefits of contingency
fees the firm receives later, he points out.
Mr. Gilliland told The Recorder, "If a partner leaves the firm,
and remains active in the practice of law, [he] does not retain
any interest in ongoing contingency cases." The firm has never
split such fees with former equity partners practicing
elsewhere. "To the extent there have been any contingency
recoveries since they left the firm, and more particularly with
regard to this Microsoft fee, they are not entitled to receive
any," he adds.
Mr. Mathiowetz and Mr. Cherian though have a completely
different take on the partnership agreement. According to their
suit, the firm's "practical interpretation" of that contract has
previously been that equity partners are entitled to a pro rata
share of contingency fees, based on their compensation during
the years the firm pursued the cases. It didn't matter "whether
those equity partners continued with the firm or had withdrawn
from it," says the complaint by David Zeff, of San Francisco's
Law Offices of David M. Zeff.
The duo also allege in Mathiowetz v. Townsend and Townsend and
Crew, 440446 that the firm hasn't paid them what they're owed
for their interests in the partnership. They're asking the court
to appoint an appraiser to set an appropriate "buyout price."
Mr. Gilliland maintains that his firm has paid the two former
partners all the capital they're due under their partnership
agreement though he did decline to name a dollar figure.
TRILINI INTERNATIONAL: Recalls Marshmallows For Undeclared Eggs
---------------------------------------------------------------
Trilini International Import LLC, 41 Terrace Place, Brooklyn, NY
11218 is recalling FRUIT MARSHMALLOWS because it may contain
undeclared eggs and unmerchantable food color acid red.
Consumers who are allergic to eggs may run the risk of serious
or life-threatening allergic reactions if they consume this
product.
The recalled FRUIT MARSHMALLOWS, distributed in 240 g plastic
wrapped trays, code date 10/05/2005, were sold in New York
State, Boston and Florida.
The recall was initiated after routine sampling by New York
State Department of Agriculture and Markets Food Inspectors and
subsequent analysis of the product by the Department Food
Laboratory personnel revealed the presence of undeclared eggs
and unmerchantable food color acid red in FRUIT MARSHMALLOWS in
packages which did not declare eggs and unmerchantable food
color acid red as ingredients on the label.
No illnesses have been reported to date in connection with this
problem. Consumers who are allergic to eggs and purchased FRUIT
MARSHMALLOWS are urged to return them to the place of purchase.
Consumers with questions may contact the company at
(718) 439-1700.
VERMONT: Judge Orders Proposed Cuts To Medicaid Program Halted
--------------------------------------------------------------
Superior Court Judge Matthew Katz halted planned cuts in a
Medicaid program that provides home care for 1,800 elderly and
disabled people, The Barre Montpelier Times Argus reports.
According to Judge Katz, the cuts couldn't go through unless the
state first provided public notice and then submitted the
changes to the Legislature for review.
The ruling came in response to a class action lawsuit filed by
Vermont Legal Aid's Senior Citizens Law Project, which alleges
that the state sought to impose the steps without putting them
out for the required public comment and without getting the
needed legislative approval.
In a press statement, Vermont Legal Aid said, "The plaintiffs in
the case are all severely disabled and require significant
assistance with personal care. All need assistance in their
homes with basic daily activities such as toileting, bathing,
grooming, dressing, meals, housekeeping and transportation. Most
require care seven days a week, although the state only provides
for part of their needs."
Judge Katz's order in Washington Superior Court halted two
program cuts. The state will not be able to impose a 5.5-hour
per week cap on coverage for help with such things as
housekeeping, laundry, shopping and transportation. Another cut,
in bathing assistance, also will not take place. The state was
looking to achieve about $2 million in annual savings with the
cuts.
Legal Aid stated, "Many beneficiaries would have lost several
hours of care each week." Legal Aid lawyer William Dysart also
added, "Our clients would be forced to either make do with less
care or leave their homes and enter nursing homes. This would
have increased costs for the state and been devastating to our
clients."
Patrick Flood, commissioner of the Department of Aging and
Independent Living, told The Barre Montpelier Times Argus that
an inability to cut services will mean no new people can be
admitted to the program. "Because we still have a budget deficit
in this program, we're going to have to stop admissions to this
program, because that's the only other way we can contain the
costs. And I think that's really unfortunate," he reasons.
Mr. Dysart told The Barre Montpelier Times Argus that the
state's move to halt new admissions to the program might face
the same legal challenge, which there wasn't opportunity for
public comment and legislative scrutiny.
WAL-MART STORES: Quebec Worker Wants To File Suit Over Closure
--------------------------------------------------------------
A Wal-Mart employee who is about to lose his job in Quebec,
where the retail giant is closing a big box store to avoid a
union, is seeking permission from the Quebec courts to file a
class-action suit on behalf of himself and 180 who will lose
their jobs, The National Union of Public and General Employees
reports.
Alain Pednault is seeking $10,000 for himself and each of the
other workers on grounds that Wal-Mart is violating the Canadian
Charter of Rights and Freedoms, which guarantees freedom of
association to all citizens. The store at the center of the
dispute was unionized last year and will be set to close on May
6.
According to Gilles Gareau, who is representing Mr. Pednault,
his client filed a statement in Quebec Superior Court arguing
that Wal-Mart has implemented "an effective system for
preventing the exercising of a fundamental right." He added that
this is "clear from the recent decisions reached by the Quebec
Labor Relations Commission" finding Wal-Mart is "guilty of
harassment and intimidation of its employees."
In the lawsuit application Mr. Pednault argued that the closing
of the store, which is taking place under a false economic
pretext, has aggrieved each member of the group. In an effort to
improve working conditions, the applicant (Mr. Pednault)
participated in a unionization process involving the employees
of the respondent (Wal-Mart). An application for certification
was filed with the Quebec Labor Relations Commission in October
2004 that would enable the employees to join the United Food and
Commercial Workers Canada Union (UFCW Canada).
The Commission granted the group's application for certification
in January 2005. In early February, Wal-Mart announced to the
members of the group, and to the media across Quebec, that it
planned to close the JonquiŠre store. The reason given by the
Wal-Mart was and remains the poor performance of the store.
However, according to the text of the class action suit, the
real reason for the store closing is the unionization of its
employees, which was a first, in light of the fact that no other
North-America Wal-Mart store had ever been successfully
unionized.
New Securities Fraud Cases
BIOGEN IDEC: Stull Stull Lodges Securities Fraud Lawsuit in MA
--------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the District of
Massachusetts, on behalf of all securities purchasers of Biogen
Idec Inc. ("Biogen" or the "Company") (NASDAQ:BIIB) between
February 18, 2004 and February 25, 2005, inclusive (the "Class
Period").
The complaint charges Biogen, William Rastetter, and James
Mullen with violations of the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following materially adverse
facts known to defendants or recklessly disregarded by them:
(1) that TYSABRI posed serious immunity-system side
effects;
(2) that TYSABRI, like other MS drugs, made patients
susceptible to progressive multifocal
leukoencephalopathy ("PML") by changing the way certain
white blood cells function thereby allowing PML, a
normally dormant virus, to run rampant within the human
body;
(3) that defendants knew and/or recklessly disregarded
documented facts that MS drugs can cause greater
incidents of PML to occur; and
(4) that defendants concealed these facts in order to fast
track TYSABRI for FDA approval so that they could reap
the financial benefits from the sales of the drug.
On February 28, 2005, before the market opened, Biogen announced
a voluntary suspension in the marketing of TYSABRI(R)
(natalizumab), a treatment for multiple sclerosis (MS) because
of two serious adverse events that have occurred in patients
treated with TYSABRI in combination with AVONEX(R) (Interferon
beta-1a) in clinical trials. News of this shocked the market.
Shares of Biogen fell $28.63 per share, or 42.44 percent, to
close at $38.65 on unusually high trading volume.
Fro 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.
BLUE COAT: Brian M. Felgoise Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The Law Offices of Brian M. Felgoise, P.C. filed a securities
class action on behalf of shareholders who acquired Blue Coat
Systems, Inc. (NASDAQ: BCSI) securities 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 the Company and certain
key officers and directors.
The action charges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements to the market throughout the Class Period
which statements had the effect of artificially inflating the
market price of the Company's securities. No class has yet been
certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261
Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046 by
Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com.
BLUE COAT: Paskowitz & Associates Lodges Securities Suit in CA
--------------------------------------------------------------
The law firm of Paskowitz & Associates initiated a class action
lawsuit in the United States District Court for the Northern
District of California on behalf of all purchasers who purchased
Blue Coat Systems, Inc. securities during the period February
20, 2004 to May 27, 2004 (the "Class Period"). The lawsuit was
filed against Blue Coat Systems, Inc. ("Blue Coat" or "the
Company") (Nasdaq: BCSI), its Chief Executive Officer Brian M.
NeSmith, and the Chief Financial Officer Robert Verheecke, and
alleges fraud involving the statements made to investors as
described below. The case has been assigned to the Hon. Marilyn
Patel.
The Complaint alleges that Blue Coat had been an unprofitable
company for the 8 years since its founding in 1996. However, on
February 19, 2004, Blue Coat announced an unprecedented increase
in sales, and its first profitable quarter, which ended January
31, 2004. This good news drove the stock price up to $38.27 on
February 20, 2004. The individual defendants, knowing that gross
margins impact profitability stated their belief that gross
margins in the following quarter, ending April 30, 2004, would
fall in the range of 68 to 69%, when they knew these gross
margin levels were unrealistic. Almost immediately following the
February 19, 2004, announcement, the individual defendants began
selling large blocks of shares. CEO NeSmith sold 127,877 shares
for gross proceeds of $5.57 million and CFO Verheeke sold 21,400
shares for gross proceeds of $1,009,000. The prices at which
these insiders sold ranged from $40-52 per share.
Blue Coat shares continued to sell at high prices through the
fourth quarter of 2004, which was due to end on April 30, 2004.
Toward the end of the quarter, however, with no adverse news
having been announced. Blue Coat shares began falling
precipitously. On April 27-29, 2004, shares dropped almost $10
per share on unusually high volume.
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 that profitability was lower
than that achieved in the third quarter. Instead of increasing
only 2-3%, operating expenses increased 8.5%. 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.
In the summer of 2004, the SEC began an informal inquiry into
trading in Blue Coat's stock concerning the fourth quarter of
fiscal 2004, which the Company initially characterized as only
involving "individuals or organizations outside the company." On
February 28, 2005, however, the SEC asked for additional
information, and subpoenaed two unidentified company executives
to testify. Following this, the SEC upgraded its informal
investigation into a formal investigation. Blue Coat admitted on
April 7, 2005 that the SEC insider trading investigation was now
focusing on whether certain present or former officers,
directors, employees, affiliates or others made 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 then traded in the
Company's stock.
For more details, contact Paskowitz & Associates by Phone:
800-705-9529 or by E-mail: classattorney@aol.com.
DORAL FINANCIAL: Zwerling, Schachter Files Securities Suit in NY
----------------------------------------------------------------
The law firm of Zwerling, Schachter & Zwerling, LLP initiated a
class action lawsuit in the United States District Court for the
Southern District of New York on behalf of all persons and
entities who purchased the common stock of Doral Financial Corp.
("Doral" or the "Company") (NYSE: DRL) during the period from
January 17, 2001 through April 18, 2005 (the "Class Period").
The deadline to file a motion seeking to be appointed lead
plaintiff is June 20, 2005.
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. Statements issued by the defendants were
materially false and misleading when made because they failed to
disclose that the Company used actual 90-day London interbank
offer rates ("LIBOR") rates instead of the forward LIBOR curve,
which is customary, to value its floating rate interest only
("IO") Strips. As a result of such unusual methodologies, during
the Class Period:
(1) the Company's IO Strip portfolio was materially
overvalued;
(2) the Company's net income and net gain on mortgage loan
sales were materially overstated;
(3) the Company's return on equity and return on capital
were materially overstated; and
(4) the Company's reported net capital was materially
overstated.
Defendants also failed to disclose to investors that the
Company's risk management, hedging strategies, and internal
controls were deficient and would not protect the value of
Doral's IO Strip portfolio in a rising-rate environment, despite
repeated reassurances to the contrary.
On April 19, 2005, Doral announced that it was restating its
financial results for 2000 through 2004. The restatements were
made to correct the accounting treatment for the value of its IO
Strip portfolio. The company said the restatement will result in
a decrease in the fair value of the securities by $400 to $600
million. It said it estimates it will eventually have to take a
$290 million to $435 million charge for the required
adjustments. In a press release, the Company stated that
"management concluded that the previously filed interim and
audited financial statements for the periods from January 1,
2000, through December 31, 2004, could be materially affected
and, therefore, should no longer be relied on and that the
financial statements for some or all of the periods included
therein should be restated." Since January 3, 2005, the price of
Doral's common stock has dropped from $48.50 a share to below
$16 a share.
For more details, contact Kevin McGee, Esq. or Willy Gonzalez of
Zwerling, Schachter & Zwerling, LLP by Phone: 1-800-721-3900 or
by E-mail: kmcgee@zsz.com or wgonzalez@zsz.com.
ELECTRONIC ARTS: Chitwood Harley Lodges Securities Lawsuit in CA
----------------------------------------------------------------
The law firm of Chitwood Harley Harnes LLP filed a securities
fraud class action complaint in the United States District Court
for the Northern District of California against Electronic Arts
Inc. ("Electronic Arts" or the "Company") (NASDAQ: ERTS),
Lawrence Probst III, and Warren Jenson on behalf of purchasers
of ERTS securities during the period between January 25, 2005
and March 21, 2005 (the "Class Period"). The civil action number
for this case is C05-01648 (MJJ).
The complaint charges Defendants with violations of the
Securities Exchange Act of 1934. The complaint alleges that
Electronic Arts and the Individual Defendants made material
misrepresentations and/or omitted to make material disclosures
throughout the Class Period by knowingly disseminating false
projections for the Company's fourth quarter, ended March 31,
2005. When Electronic Arts announced on March 21, 2005 that its
results for the fourth quarter would fall materially short of
its January projections, which Defendant Jenson, in a telephone
interview with Bloomberg News, explained was due to poor sales
of holiday releases, the price of Electronic Arts stock fell
$11.20 per share, or 16.8%, on unusually high trading volume of
more than 39.5 million shares.
The complaint alleges that the January 25, 2005 projections
lacked a reasonable basis when made and that Defendants issued
the inaccurate projections so that they could sell their
personally held Electronic Arts stock at artificially inflated
prices. As the complaint details, between the time Defendants
issued the projections on January 25, 2005 and the time the
truth was disclosed on March 21, 2005, numerous Electronic Arts
insiders sold over 900,000 shares of the Company's stock for
gross proceeds in excess of $58 million.
For more details, contact Lauren S. Antonino or Leslie Glover
Toran of Chitwood Harley Harnes LLP by Phone: 1-888-873-3999 or
by E-mail: LAntonino@chitwoodlaw.com or LToran@chitwoodlaw.com.
SHARPER IMAGE: Marc S. Henzel Lodges Securities Fraud Suit in CA
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The Law Offices of Marc S. Henzel initiated class action lawsuit
in the United States District Court for the Northern District of
California on behalf of purchasers of Sharper Image Corporation
(NASDAQ: SHRP) common stock during the period between February
5, 2004 and August 4, 2004 (the "Class Period").
The complaint charges Sharper Image and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. Sharper Image is a specialty retailer of products in the
electronics, recreation and fitness, personal care, houseware,
travel, toy, gifts and other categories.
The complaint alleges that during the Class Period, defendants
made false and misleading statements regarding the Company's
business and prospects. As a result of these false statements,
Sharper Image stock traded at inflated levels during the Class
Period, whereby the Company's top officers and directors sold
more than $18 million worth of their own shares. According to
the complaint, the true facts, which were known by each of the
defendants but concealed from the investing public during the
Class Period, were as follows:
(1) the Company businesses, including wholesale, Internet
and catalog, were cannibalizing the Company's retail
and infomercial sales;
(2) the Company's profitability was being adversely
affected by a drastic slow down in the Company's key
product, the Ionic Breeze family of air purifiers;
(3) when defendants attempted to acquire infomercial blocks
of time in early 2004, they learned that these extra
blocks of time had already been acquired as a result of
the Olympics and the Presidential election, and the
additional costs associated with infomercial time were
seriously impacting the Company's margins associated
with the Ionic Breeze family of products; and
(4) as a result, the Company's Q2 2004 projections of
earnings per share of $0.09-$0.11 were grossly
overstated.
On August 5, 2004, Sharper Image announced that Q2 2004 results
would be much worse than previously represented, with EPS of
only $0.03-$0.05 versus prior representations of $0.09-$0.11. On
this news, Sharper Image shares fell 23%.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
SHARPER IMAGE: Schiffrin & Barroway Lodges Securities Suit in CA
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The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of all securities
purchasers of Sharper Image Corporation (Nasdaq: SHRP) ("Sharper
Image" or the "Company") between February 5, 2004 and August 4,
2004 inclusive (the "Class Period").
The complaint charges Sharper Image, Richard Thalheimer, Tracy
Wan, Anthony Farrell, and Jeffrey Forgan with violations of the
Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts known to
defendants or recklessly disregarded by them:
(1) that growth in the Company's wholesale channels was
causing a slowdown in sales at Sharper Image's
catalog/Internet and retail stores;
(2) that the demand for the Company's key product - the
Ionic Breeze family of air purifiers - had dramatically
slowed;
(3) that the Company lacked new products to sell to
consumers which caused the Company to overly rely on
Ionic Breeze sales to meet forecasts;
(4) that margins associated with the Ionic Breeze were
materially impaired, due to limited availability of
infomercial time and the higher costs associated
therewith; and
(5) as a consequence of the above, the Company's
projections lacked in all reasonable basis.
On August 5, 2004, Sharper Image announced that it believed that
sales and gross margin were adversely impacted. Sharper Image
updated its earnings guidance for the second quarter to a range
of $0.03 to $0.05 per diluted share. The earnings per share
guidance was based on lower than expected sales for the second
quarter. News of this shocked the market. Shares of Sharper
Image fell $6.06 per share or 23.77 percent, on August 5, 2004,
to close at $19.43 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.
XYBERNAUT CORPORATION: Marc S. Henzel Lodges Stock Lawsuit in DE
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The Law Offices of Marc S. Henzel initiated class action lawsuit
in the United States District Court for the District of Delaware
on behalf of all persons (the "Class") who purchased the
securities of Xybernaut Corporation (Nasdaq: XYBRE) during the
period March 27, 2003 and April 8, 2005 (the "Class Period").
The Complaint charges Xybernaut, Edward G. Newman, Steven A.
Newman, M.D., and Thomas D. Davis with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. More specifically, the Complaint
alleges that the Company omitted or misrepresented material
facts about its financial condition, business prospects, revenue
expectations and internal controls during the Class Period.
On March 14, 2005, Xybernaut announced that it was seeking an
extension of time within which to file its annual report with
the Securities and Exchange Commission ("SEC"). On March 31,
2005, after the close of trading, Xybernaut belatedly revealed
that it was in dire financial and regulatory straits. The
Company issued a press release that day, which stated, in part:
"Xybernaut Corporation (Nasdaq: XYBR - News) announced today
that the filing of its Form 10-K and other related reports for
the year ended December 31, 2004, anticipated to occur today,
will be further delayed, pending completion of an internal
investigation undertaken by its Audit Committee." The press
release stated that independent counsel had been engaged to
assist in an internal investigation of, "among other things,
concerns brought to the Audit Committee's attention relating to
the internal control environment of the Company, the propriety
of certain expenditures and the documentation of certain
expenses of the Chairman and CEO of the Company, the Company's
transparency and public disclosure process, the accuracy of
certain public disclosures, management's conduct in response to
the investigation, and the propriety of certain major
transactions." The press release further stated that the Company
had received a subpoena from the Northeast Regional Office of
the SEC seeking "documents and other information relating to the
sale of Company securities by any person identified as a selling
shareholder in any Company registration statement or other
public filing."
On this news, the Company's share price, which at one time had
traded as high as $2.23 per share due to the Company's positive
press releases and false and misleading representations during
the Class Period, closed at $0.42 per share on March 31, 2005,
and then dropped further by almost fifty percent (50%), to close
at $0.24 per share on April 1, 2005.
On April 8, 2005, after the close of trading, Xybernaut
announced in a press release that "investors and others should
refrain from relying upon the Company's historical financial
statements... for the years ended December 31, 2002 and 2003,
and interim quarterly reports for the quarters ended March 31,
2003, June 30, 2003, September 30, 2003, March 31, 2004, June
30, 2004 and September 30, 2004." On the heels of this shocking
news, trading was again heavy and the Company's price per share
fell to $0.13 per share.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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