/raid1/www/Hosts/bankrupt/CAR_Public/050505.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, May 5, 2005, Vol. 7, No. 88
Headlines
APROPOS TECHNOLOGY: NY Court Preliminarily OKs Suit Settlement
BLUE MARTINI: NY Court Preliminarily Approves Lawsuit Settlement
COEUR D'ALENE: Plaintiffs To Appeal ID Medical Monitoring Suit
DIOMED HOLDINGS: MA Court Dismisses Lawsuit For Securities Fraud
DYNABAZAAR INC.: NY Court Preliminarily Approves Suit Settlement
EXOTICS.COM: SEC Launches Securities Fraud Lawsuit in NV Court
FARMERS INSURANCE: OR Court Bares $52M Judgment in Overtime Suit
FLORIDA: FL Senate OKs Bills For Streetlight Providers, Asbestos
GE MONEY: Faces Suit Over Monogram Bank's Finance Charges, Fees
GENERAL NUTRITION: Faces Consumer Suits v. Pro-Hormone Products
GENERAL NUTRITION: CA Court Approves Overtime Lawsuit Settlement
GENERAL NUTRITION: Reaches Settlement For NY Overtime Wage Suit
HEALTH NET: Inks FL Physician RICO Violations Lawsuit Settlement
JAKE'S FIREWORKS: Recalls 75T Artillery Kits For Injury Hazard
KW BROWN: SEC Launches Suit For Securities Act Violations in FL
LIQUIDMETAL TECHNOLOGIES: Asks FL Court To Dismiss Stock Lawsuit
NL INDUSTRIES: Court Yet To Rule on Lead Suit Summary Judgment
NL INDUSTRIES: CA Court Yet To Rule on Summary Judgment Appeal
NL INDUSTRIES: IL Court Grants Summary Judgment in Lead Lawsuit
PACIFIC CAPITAL: RAL Agreement Suit Moved To Santa Barbara, CA
PACIFIC CAPITAL: Plaintiffs Amend Refund Transfer Lawsuit in CA
PACIFIC CAPITAL: Plaintiffs Lodge Amended NY RAL Agreement Suit
REXHALL INDUSTRIES: SEC Issues Cease-And-Desist Order V. Exec
SIMPLICITY INC.: Recalls 575 White Cribs Due To Choking Hazard
SOUTH CAROLINA: Settlement Inked For Graniteville Accident Suit
STAAR SURGICAL: Plaintiffs To File Consolidated Securities Suit
THEGLOBE.COM: NY Court Preliminarily Approves Lawsuit Settlement
TOBACCO LITIGATION: FL Jury Nips Flight Attendant's Injury Suit
VERDISYS INC.: Reaches Settlement For TX Securities Fraud Suit
WATCHGUARD TECHNOLOGIES: Lead Plaintiff Deadline Set June 7,2005
WELLS REAL: Plaintiffs To Withdraw Suit Summary Judgment Appeal
New Securities Fraud Cases
BEARINGPOINT INC.: Milberg Weiss Launches Securities Suit in VA
ORANGE 21: Barrack Rodos Files Securities Fraud Suit in S.D. CA
TRIBUNE COMPANY: Goldman Scarlato Launches Securities Suit in IL
TRIBUNE COMPANY: Schiffrin & Barroway Files IL Securities Suit
*********
APROPOS TECHNOLOGY: NY Court Preliminarily OKs Suit Settlement
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The United States District Court for the Southern District of
New York granted preliminary approval for the settlement of the
consolidated securities class action filed against Apropos
Technology, Inc., certain of its current and former officers and
the underwriters of the Company's initial public offering (IPO).
In November 2001, the Company was named as a defendant in
shareholder class action litigation, alleging, among other
things, that the underwriters of the Company's IPO improperly
required their customers to pay the underwriters excessive
commissions and to agree to buy additional shares of the
Company's stock in the aftermarket as conditions of receiving
shares in the Company's IPO.
The lawsuit further claims that these supposed practices of the
underwriters should have been disclosed in the Company's IPO
prospectus and registration statement. In April 2002, an amended
complaint was filed which, like the original complaint, alleges
violations of the registration and antifraud provisions of the
federal securities laws and seeks unspecified damages.
The Company understands that various other plaintiffs have filed
substantially similar class action cases against approximately
300 other publicly traded companies and their public offering
underwriters in New York City, which along with the case against
the Company have all been transferred to a single federal
district judge for purposes of coordinated case management.
In July 2002, the Company, together with the other issuers named
as defendants in these coordinated proceedings, filed a
collective motion to dismiss the consolidated amended complaints
against them on various legal grounds common to all or most of
the issuer defendants. In October 2002, the Court approved a
stipulation providing for the dismissal of the individual
defendants without prejudice. In February 2003, the Court issued
a decision granting in part and denying in part the motion to
dismiss the litigation filed by the Company and the other issuer
defendants. The claims against the Company under the antifraud
provisions of the securities laws were dismissed with prejudice;
the claims under the registration provisions of the securities
laws were not dismissed as to the Company or virtually any other
issuer defendant. The Court also denied the underwriter
defendants' motion to dismiss in all respects.
In June 2003, the Company elected to participate in a proposed
settlement agreement with the plaintiffs in this litigation. If
ultimately approved by the Court, this proposed settlement would
result in a dismissal, with prejudice, of all claims in the
litigation against the Company and against any of the other
issuer defendants who elect to participate in the proposed
settlement, together with the current or former officers and
directors of participating issuers who were named as individual
defendants. The proposed settlement does not provide for the
resolution of any claims against the underwriter defendants, and
the litigation as against those defendants is continuing. The
proposed settlement provides that the class members in the class
action cases brought against the participating issuer defendants
will be guaranteed a recovery of $1 billion by insurers of the
participating issuer defendants. If recoveries totaling $1
billion or more are obtained by the class members from the
underwriter defendants, however, the monetary obligations to the
class members under the proposed settlement will be satisfied.
In addition, the Company and any other participating issuer
defendants will be required to assign to the class members
certain claims that they may have against the underwriters of
their IPOs.
The proposed settlement contemplates that any amounts necessary
to fund the settlement or settlement-related expenses would come
from participating issuers' directors and officers liability
insurance policy proceeds as opposed to funds of the
participating issuer defendants themselves. A participating
issuer defendant could be required to contribute to the costs of
the settlement if that issuer's insurance coverage were
insufficient to pay that issuer's allocable share of the
settlement costs. The Company expects that its insurance
proceeds will be sufficient for these purposes and that it will
not otherwise be required to contribute to the proposed
settlement.
Consummation of the proposed settlement is conditioned upon
obtaining both preliminary and final approval by the Court.
Formal settlement documents were submitted to the Court in June
2004, together with a motion asking the Court to preliminarily
approve the form of settlement. Certain underwriters who were
named as defendants in the settling cases, and who are not
parties to the proposed settlement, opposed preliminary approval
of the proposed settlement of those cases. The Court has issued
an order preliminarily approving the proposed settlement in all
respects but one. The plaintiffs and the issuer defendants are
in the process of assessing whether to proceed with the proposed
settlement, as modified by the Court. If the proposed
settlement, as modified by the Court, they will submit revised
settlement documents to the Court. The underwriter defendants
may then have an opportunity to object to the revised settlement
documents. If the Court approves the revised settlement
documents, it will direct that notice of the terms of the
proposed settlement be published in a newspaper and mailed to
all proposed class members and schedule a fairness hearing, at
which objections to the proposed settlement will be heard.
Thereafter, the Court will determine whether to grant final
approval to the proposed settlement.
The suit is styled "In Re Apropos Technology, Inc. Initial
Public Offering Securities Litigation," filed in relation to "IN
RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File
No. 21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
BLUE MARTINI: NY Court Preliminarily Approves Lawsuit Settlement
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The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Blue Martini
Software, Inc. and:
(1) Monte Zweben,
(2) William Zuendt,
(3) certain of its former officers and directors and
(4) Goldman Sachs and the other underwriters of our initial
public offering, or IPO.
The suit, styled "In re Blue Martini Initial Public Offering
Securities Litigation," claims that the defendants violated the
federal securities laws because our IPO registration statement
and prospectus allegedly contained untrue statements of material
fact or omitted material facts regarding the compensation to be
received by, and the stock allocation practices of, the IPO
underwriters. The plaintiffs seek unspecified monetary damages
and other relief.
Similar complaints were filed in the same Court against hundreds
of other public companies that conducted IPOs of their common
stock since the mid-1990s. On August 8, 2001, all IPO-related
lawsuits were consolidated for pretrial purposes before United
States Judge Shira Scheindlin of the Southern District of New
York. In accordance with Judge Scheindlin's orders, the company
did not answer the complaint, and no discovery was served. Also
in accordance with Judge Scheindlin's orders, plaintiffs filed
amended consolidated complaints on April 19, 2002.
The Company joined in a global motion to dismiss the IPO
Lawsuits on July 15, 2002. On October 9, 2002, the Company's
directors and officers were dismissed without prejudice pursuant
to a stipulated dismissal and tolling agreement between the
plaintiffs and certain individual defendants. On November 1,
2002, Judge Scheindlin presided over an all-day hearing on the
global motions to dismiss. On February 19, 2003, Judge
Scheindlin issued a ruling on the global motion to dismiss; with
respect to the Company, the motion was granted in part and
denied in part.
In June 2003, the Company joined in a tentative global
settlement that would, among other things, result in the
dismissal with prejudice of all claims against all issuers and
their officers and directors in the IPO-related lawsuits, and
the assignment to plaintiffs of certain potential claims that
the issuers may have against their IPO underwriters. The
tentative settlement provides that, in the event that the
plaintiffs ultimately recover less than $1 billion in settlement
or judgment against the underwriter defendants in the IPO-
related lawsuits, the plaintiffs would be entitled to payment by
each participating Issuer's insurer of a pro rata share of any
shortfall in the plaintiffs' guaranteed recovery. The tentative
settlement does not involve any payment or admission of
wrongdoing by the Company.
In July 2003, pursuant to the authorization of a special
litigation committee of the Board of Directors, the Company
entered into a non-binding memorandum of understanding
reflecting the settlement terms described above. In September
2003, in connection with the possible settlement, the Company's
officers and directors described above who had entered tolling
agreements with plaintiffs agreed to extend those agreements so
that they would not expire prior to any settlement being
finalized. In June 2004, the Company executed a final
settlement agreement with the plaintiffs.
On February 15, 2005, the Court issued a decision certifying a
class action for settlement purposes and granting preliminary
approval of the settlement, subject to modification of one
aspect of the settlement. The settlement remains subject to a
number of procedural conditions, as well as final approval by
the court.
The suit is styled "In Re Blue Martini Software, Inc. Initial
Public Offering Securities Litigation," filed in relation to "IN
RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File
No. 21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(v) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
COEUR D'ALENE: Plaintiffs To Appeal ID Medical Monitoring Suit
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Plaintiffs intend to appeal the dismissal of the private class
action filed against Coeur d'Alene Mines Corporation in the
Idaho State District Court for the First District in Kootenai
County, Idaho, styled "Baugh v. Asarco, et al., Docket No. 2002-
131." Defendants include mining companies including the
Company, and the Union Pacific Railroad Company. Plaintiffs are
eight northern Idaho residents seeking medical monitoring and
real property damages from the mining companies and railroad who
operated in the Bunker Hill Superfund site.
On July 14, 2004, the court heard argument on defendants'
motions for summary judgment. On September 3, 2004, judgment was
entered by the court in favor of defendants and against
plaintiffs, for costs, and plaintiffs' second amended complaint
was dismissed with prejudice. The plaintiffs filed a notice of
appeal on September 30, 2004. The parties agreed, through
stipulation, that costs would be waived and the appeal was
dismissed by order of the Supreme Court dated December 13, 2004.
DIOMED HOLDINGS: MA Court Dismisses Lawsuit For Securities Fraud
----------------------------------------------------------------
The United States District Court for the District of
Massachusetts dismissed with prejudice the amended securities
class action filed against Diomed Holdings, Inc. and its former
chairman.
The suit was initially filed against the Company, its former
chairman, its former chief executive officer and a former
director. On September 3, 2004, plaintiffs filed an amended
complaint in the action that named only the Company and its
former chairman. The amended complaint alleges violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and seeks unspecified damages on behalf of a purported class of
plaintiffs consisting of persons who acquired the Company's
common stock from February 1, 2002 through and including March
21, 2002. The Company is named only in the count alleging
violation of Section 10(b).
On October 21, 2004, the Company filed a motion to dismiss the
amended complaint on the ground that it fails to state a claim
upon which relief can be granted. On February 4, 2005, the court
ruled in the Company's favor and dismissed the lawsuit with
prejudice.
The suit is styled "Kent Garvey, et al. v. James Arkoosh, et
al.," pending in the United States District Court in
Massachusetts, under the docket number 04-CV-10438-RGS, under
Judge Richard G. Stearns. The plaintiff firm in this litigation
is The Law Office of Scott P. Lopez, Mail: 24 School Street -
8th Floor, Boston, MA, 02108, Phone: 617.742.5700, Fax:
617.742.5715, E-mail: Lopez@lopezlaw.com.
DYNABAZAAR INC.: NY Court Preliminarily Approves Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against DynaBazaar,
Inc. and:
(1) Scott Randall (former President, Chief Executive
Officer and Chairman of the Board),
(2) John Belchers (former Chief Financial Officer),
(3) U.S. Bancorp Piper Jaffray Inc.,
(4) Deutsche Bank Securities Inc. and
(5) FleetBoston Robertson Stephens, Inc.,
Several suits were initially filed by individual shareholders
who purport to seek class action status on behalf of all other
similarly situated persons who purchased the Company's common
stock between March 14, 2000 and December 6, 2000. The lawsuits
allege that certain underwriters of the Company's initial public
offering solicited and received excessive and undisclosed fees
and commissions in connection with that offering. The lawsuits
further allege that the defendants violated the federal
securities laws by issuing a registration statement and
prospectus in connection with the Company's initial public
offering which failed to accurately disclose the amount and
nature of the commissions and fees paid to the underwriter
defendants.
On October 8, 2002, the court entered an Order dismissing the
claims asserted against certain individual defendants in the
consolidated actions, including the claims against Mr. Randall
and Mr. Belchers, without any payment from these individuals or
the Company. On February 19, 2003, the Court entered an Order
dismissing with prejudice the claims asserted against the
Company under Section 10 (b) of the Securities Exchange Act of
1934, as amended. As a result, the only claims that remain
against the Company are those arising under Section 11 of the
Securities of 1933, as amended.
The Company has entered into an agreement-in-principle to settle
the remaining claims in the litigation. The proposed settlement
will result in a dismissal with prejudice of all claims and will
include a release of all claims that were brought or could have
been brought against the Company and its present and former
directors and officers. It is anticipated that any payment to
the plaintiff class and their counsel will be funded by the
Company's directors & officers liability insurance and that no
direct payment will be made by the Company. The proposed
settlement is subject to the execution of a definitive
settlement agreement, final approval of the settlement by the
Company's directors & officers liability insurance carriers and
by the plaintiff class, and the approval of the settlement by
the Court.
The suit is styled "In Re DynaBazaar, Inc. Initial Public
Offering Securities Litigation," filed in relation to "IN RE
INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No.
21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
EXOTICS.COM: SEC Launches Securities Fraud Lawsuit in NV Court
--------------------------------------------------------------
The Securities and Exchange Commission filed a civil action
against Exotics.com, Inc. (Exotics-Nevada), its sole officer,
four individual outside accountants, two outside attorneys and
several other individuals alleging that they knowingly
participated in a stock manipulation scheme and accounting fraud
during the period 1999 through 2002.
Exotics-Nevada is a Nevada corporation based in Vancouver,
British Columbia, which owned, operated and licensed adult Web
sites. The complaint, which was filed in the U.S. District
Court in Nevada, names individual defendants Firoz Jinnah of
Burnaby, British Columbia, Ingo W. Mueller and Barry F. Duggan
of Vancouver, British Columbia, Stephen P. Corso, Jr. of
Ridgefield, Connecticut, Brian K. Rabinovitz of Los Angeles,
California, Marlin R. Brinsky of Santa Monica, California, L.
Rex Andersen of Draper, Utah, Sean P. Flanagan and Daniel G.
Chapman of Las Vegas, Nevada, E. James Wexler of Scottsdale,
Arizona, James L. Ericksteen of Kamloops, British Columbia, and
Gary Thomas, of Playa Del Rey, California. In addition, the
complaint names the law firm of Flanagan & Associates, Ltd. of
Las Vegas, Nevada, as a relief defendant.
In its complaint, the Commission alleges that, during the period
1999 through 2002, the participants in the scheme engaged in
manipulative trading of Exotics-Nevada stock for the purpose of
artificially increasing the stock's price and trading volume and
were involved in or responsible for various false and misleading
public filings that Exotics-Nevada made with the Commission
and/or for the dissemination of a false and misleading press
release and fax and e-mail spam about Exotics-Nevada.
According to the complaint, the accountants fraudulently
participated in audits of Exotics-Nevada's year-end financial
statements and in a review of its quarterly financial statements
and failed to conduct those engagements in accordance with GAAS,
as required. The Commission also alleges in its complaint that,
among other things, the accountants prepared or created many of
Exotics-Nevada's books and records and then audited the
financial statements they created. According to the complaint,
they also caused their firms to issue false audit reports which,
together with the underlying financial statements, were
incorporated in Exotics-Nevada's public filings with the
Commission.
The complaint charges all of the primary defendants with
violating antifraud provisions of the federal securities laws,
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder, and charges Mueller, Jinnah, Duggan, Andersen
and Thomas with aiding and abetting Exotics-Nevada's violations
of those provisions. The complaint also charges Exotics-Nevada
with violating the reporting and books and records provisions,
Sections 13(a), 13(B)(2)(A) and 13(B)(2)(B) of the Exchange Act
and Rules 13a-1, 13a-11, 13a-13, 12b-20 and 12b-11 thereunder,
and charges Andersen, Jinnah, Duggan and Thomas with aiding and
abetting Exotics-Nevada's violations of those provisions. In
addition, the complaint charges Jinnah and Duggan with violating
the internal controls provision, Section 13(b)(5) of the
Exchange Act, and charges Exotics-Nevada with violating the
securities registration provisions, Sections 5(a) and 5(c) of
the Securities Act of 1933. The complaint also charges
Andersen, Corso, Rabinovitz and Brinsky with violating the
provision governing audit reports, Article 2 of Regulation S-X.
Finally, the complaint charges Mueller, Jinnah and Thomas with
violating the ownership reporting provisions, Sections 13(d) and
16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder.
The Commission is seeking permanent injunctions against all the
defendants, civil money penalties and disgorgement of all ill-
gotten gains by all of the defendants except Exotics-Nevada,
bars from serving as an officer or director of any public
company against Mueller, Jinnah and Duggan, and penny stock bars
against Mueller, Jinnah, Duggan, Flanagan, Chapman, Ericksteen
and Wexler. In addition, the Commission is seeking disgorgement
by relief defendant Flanagan & Associates of all funds it
received from the primary defendants.
The Commission staff acknowledges the assistance of the British
Columbia Securities Commission in its investigation. The
complaint is styled "SEC v. Exotics.com, Inc., et al., C.A. No.
CV-S-05-0531-PMP-RJJ, USDC, D. NV."
FARMERS INSURANCE: OR Court Bares $52M Judgment in Overtime Suit
----------------------------------------------------------------
Judgments totaling $52,498,388 have been entered in the United
States District Court for the District of Oregon against Farmers
Insurance Exchange for failing to pay overtime wages to its
claims representatives up through April 2003, Rudy, Exelrod &
Zieff, LLP; Lieff Cabraser Heimann & Bernstein, LLP; Lewis
Feinberg Renaker & Jackson, P.C.; and Stoll, Stoll, Berne,
Lokting & Shlachter, P.C. announced in a statement.
The recent court victories for claims representatives outside of
California are in addition to the landmark $210 million judgment
against Farmers Insurance Exchange in Bell v. Farmers Insurance
Exchange, Case No. 774013-0 (Cal. Supr. Ct.), for failing to pay
its California insurance adjusters overtime pay from 1993
through June 2001.
"The Farmers litigation has sent an emphatic message to the
entire insurance industry," stated Steven G. Zieff, a partner
with Rudy, Exelrod & Zieff. "We are gratified that our suits
have compelled Farmers to change its overtime pay practices."
"Claims Representatives will now be paid what they are owed for
the long hours they worked," added Lieff Cabraser Heimann &
Bernstein, LLP partner James M. Finberg.
"We believe these are the largest judgments ever entered as the
result of the trial of a Fair Labor Standards Act case," Finberg
noted.
In the liability phase of the federal suit, entitled "In Re
Farmers Insurance Exchange Claims Representatives' Overtime Pay
Litigation, MDL No. 1439 (D. Or.)," U.S. District Court Judge
Robert E. Jones in November 2003 held that Farmers' claims
adjusters who handle auto and low level property claims are
entitled to overtime under the Federal Fair Labor Standards Act
("FLSA") and the laws of seven states. Judge Jones further found
that Farmers' actions were willful and were not taken in good
faith, entitling plaintiffs to seek double damages on the lost
overtime wages during the damages phase of the trial.
Following the liability phase trial, Judge Jones appointed
former Oregon Supreme Court Justice Edwin J. Peterson as the
Special Master to oversee the damages phase of the litigation.
On January 27, 2005, a judgment was entered on behalf of the
Minnesota class in the amount of $3,933,068.66. On May 2, 2005,
a judgment was entered on behalf of the FLSA collective action
members, and the Illinois, New Mexico, Colorado, Washington,
Oregon, and Michigan classes in the amount of $48,565,320.54.
A group of Farmers personal lines claims representatives
recently filed a new class action lawsuit in Federal court in
Los Angeles against Farmers seeking unpaid overtime damages
under the FLSA and state overtime laws. Entitled Balliet v.
Farmers Insurance Exchange, Case No. CV 04-09148 TJH (C.D.
Cal.), the suit is on behalf of personal lines claims
representatives who are or were employed by Farmers:
(1) in states other than California, Colorado, Illinois,
Michigan, Minnesota, New Mexico, Oregon, or Washington,
and
(2) who did not opt into the current Farmers' case in
Oregon federal court; or
(3) who worked for Farmers after April 2003.
Farmers claims representatives who believe they may be eligible
to participate in this lawsuit and want more information, may
contact class counsel by Phone: 1-866-854-8550 or by E-mail:
info@farmersovertime.com.
FLORIDA: FL Senate OKs Bills For Streetlight Providers, Asbestos
----------------------------------------------------------------
The Florida Senate gave tentative approval to two bills that
would make it harder to file suits against street-light
providers and asbestos manufacturers, the St. Petersburg Times
reports.
Under the said legislation, a streetlight provider couldn't be
held liable for injuries under nonworking lights within 60 days
of the light being reported as not working; and only patients
who have been diagnosed by a doctor as having asbestos-related
disease would be allowed to sue a manufacturer.
However, the Senate's efforts could be more because of
gamesmanship during the 2005 session's last days as the Senate
failed to act faster in three other proposals to make the
state's tort system more business-friendly. Several items were
not discussed Tuesday, though they appeared on the Senate's
calendar:
(1) a plan to make it harder to sue businesses in slip-and-
fall cases or in cases where business visitors are
victimized by a criminal;
(2) a plan to give retailers limited product liability
immunity for merchandise they sell; and
(3) changes to the state's class-action requirements
The tort changes are a high priority of House Speaker Allan
Bense, R-Panama City, but have received less enthusiastic
response in the Senate. The session is scheduled to end Friday,
the St. Petersburg Times reports.
GE MONEY: Faces Suit Over Monogram Bank's Finance Charges, Fees
---------------------------------------------------------------
GE Money Bank faces a class action lawsuit filed in the United
States District Court for the Eastern District of Louisiana,
alleging that certain finance charges and fees charged to
customers in Louisiana by Monogram Credit Card Bank of Georgia,
which was merged with and into the Bank on February 7, 2005,
exceeded the amounts permitted by applicable Louisiana law.
Specifically, the plaintiffs allege that, prior to March 2000,
Monogram Credit Card Bank of Georgia was not a "State bank"
under the portion of the Federal Deposit Insurance Act that
entitles State banks to export interest rates permitted by the
law of their home state. Plaintiffs seek to recoup the alleged
overcharged finance charges and fees, interest on the alleged
overcharges, and disgorgement of assessed finance charges. The
lawsuit commenced in May 1998. In 2002, the Federal Deposit
Insurance Company intervened as a party.
The suit is styled "Heaton v. Monogram Credit Card, case no.
2:98-cv-01823-CJB-SS," filed in the United States District Court
for the Eastern District of Louisiana, under Judge Carl J.
Barbier. Representing the plaintiffs is Meyer H. Gertler,
Gertler, Gertler, Vincent & Plotkin, 127-129 Carondelet St. New
Orleans, LA 70130 Phone: (504) 581-6411. Representing the
defendants is Anthony Rollo, McGlinchey Stafford, PLLC 643
Magazine St. New Orleans, LA 70130-3477 Phone: 504-586-1200
E-mail: arollo@mcglinchey.com.
GENERAL NUTRITION: Faces Consumer Suits v. Pro-Hormone Products
---------------------------------------------------------------
General Nutrition Companies, Inc. continues to face five
substantially identical class action lawsuits filed in the state
courts of the States of Florida, New York, New Jersey,
Pennsylvania and Illinois. The suits, which also name various
manufacturers of products containing pro-hormones, including
androstenedione as defendants, are styled:
(1) Brown v. General Nutrition Companies, Inc., Case No.
02-14221-AB, Florida Circuit Court for the 15th
Judicial Circuit Court, Palm Beach County;
(2) Rodriguez v. General Nutrition Companies, Inc., Index
No. 02/126277, New York Supreme Court, County of New
York, Commercial Division;
(3) Abrams v. General Nutrition Companies, Inc., Docket No.
L-3789-02, New Jersey Superior Court, Mercer County;
(4) Toth v. Bodyonics, Ltd., Case No. 003886, Pennsylvania
Court of Common Pleas, Philadelphia County; and
(5) Pio v. General Nutrition Companies, Inc., Case No. 2-
CH-14122, Illinois Circuit Court, Cook County
On March 20, 2004, a similar lawsuit was filed in California,
styled "Guzman v. General Nutrition Companies, Inc., Case No.
04-00283."
Plaintiffs allege that the Company distributed or published
periodicals that contain advertisements claiming that the
various pro-hormone products promote muscle growth. The
complaints allege that the Company knew the advertisements and
label claims promoting muscle growth were false, but nonetheless
continued to sell the products to consumers. Plaintiffs seek
injunctive relief, disgorgement of profits, attorney's fees and
the costs of suit.
All of the products involved in these cases are third-party
products. The Company has tendered these cases to the various
manufacturers for defense and indemnification.
GENERAL NUTRITION: CA Court Approves Overtime Lawsuit Settlement
----------------------------------------------------------------
The Superior Court of California for Orange County granted final
approval to the settlement of the class action filed against
General Nutrition Corporation, styled "Capelouto v. General
Nutrition Corporation, Case No. 01-CC-00138."
On November 2, 2001, Matthew Capelouto, a former store manager
in California, filed the suit, alleging that the Company
misclassified store managers at its company-owned stores in
California as exempt from overtime requirements and/or required
them to work off the clock, and failed to pay them overtime, in
violation of California's wage and hour laws.
On October 23, 2003, an amended complaint was filed, adding
another named plaintiff, Lamar Wright, as well as claims for
failure to provide required meal periods and rest periods for
Company managers at company-owned stores in California. On May
13, 2004, the Company entered into an agreement in principle to
settle the claims of the putative class members, without
admitting any liability, for a total payment of approximately
$4.6 million. The Court gave final approval to the settlement
and the Company paid $4.1 million to fund its costs and the
payments made to class members that filed timely claims.
GENERAL NUTRITION: Reaches Settlement For NY Overtime Wage Suit
---------------------------------------------------------------
General Nutrition Corporation reached a settlement for the class
action filed against it by seven former employees in the United
States District Court for the Southern District of New York on
behalf of themselves and a purported class of other similarly
situated former employees employed by the Company within the
last six years and who allegedly worked but were not paid
overtime for hours worked in excess of 40 hours per week. The
suit is styled "Shockley v. General Nutrition Corporation, Case
No. 04-CIV-2336."
The complaint is brought under the federal Fair Labor Standards
Act and New York State Labor Law. The plaintiffs seek actual
damages, liquidated damages on claims asserted under the FLSA,
an order enjoining the Company from engaging in the practices
alleged in their complaint, and attorney's fees and the costs of
suit.
On October 29, 2004, the Company entered into an agreement to
settle the claims of the putative class members, without
admitting any liability, for a total payment of $170,000,
inclusive of class counsel's attorneys' fees and expenses. The
settlement is subject to approval by the court and the
plaintiffs' class.
The suit is styled "Shockley et al v. General Nutrition
Corporation, case no. 1:04-cv-02336-LAK," filed in the United
States District Court for the Southern District of New York,
under Judge Lewis A. Kaplan. Representing the plaintiffs is
Karl J. Stoecker, Law Offices of Karl J. Stoecker 275 Madison
Avenue New York, NY 10016 Phone: (212) 818-0080. Representing
the Company are Jennifer Lynn Gillman and Robert W. Pritchard of
Littler Mendelson, P.C., 885 Third Avenue, 16th Floor New York,
NY 10022 Phone: 212 583 2682 Fax: 212 832 2719 E-mail:
jgillman@littler.com and rpritchard@littler.com; and Brent
Edward Pelton, Lewis, Brisbois, Bisgaard & Smith, LLP 100 Wall
St. 9th Floor New York, NY 10005 Phone: 212-232-1300 Fax:
212-232-1399 E-mail: pelton@lbbslaw.com.
HEALTH NET: Inks FL Physician RICO Violations Lawsuit Settlement
----------------------------------------------------------------
Health Net, Inc. reached a multimillion-dollar settlement with
about 900,000 U.S. physicians for the class action charging it
with violations of the Racketeer Influenced and Corrupt
Organizations Act (RICO, BestWire reports.
Physicians and state medical societies filed the suit, alleging
that the Company violated RICO by routinely denying and delaying
payments for health-care services by using automated claims-
processing systems. Two other managed care companies, Aetna
Inc. (NYSE:AET) and a unit of Cigna Corp. (NYSE:CI), each
already have reached similar settlements with the physicians.
Aetna reached a $470 million agreement (BestWire, Oct. 1, 2004),
while Cigna HealthCare reached a $540 million settlement
(BestWire, April 23, 2004).
The settlement "will allow us to continue to enhance our working
relationship with the physicians who serve our members," Jay
Gellert, president and chief executive officer of Los Angeles-
based Health Net, said in a statement. "As part of the
settlement, Health Net has already begun to implement a number
of new business practices that will improve health
plan/physician relationships and contribute to improvements in
our operations."
The settlement would end class actions brought by physicians,
the first of which was filed in September 1999, the Company
said. Health Net estimated the direct and indirect costs to
implement the changes in business practices would be more than
$80 million over the four-year term of the agreement. The
settlement includes a $40 million payment to general settlement
funds and an expected award of as much as $20 million for the
plaintiffs' legal fees, BestWire reports. The settlement will
be presented for approval May 6 in U.S. District Court for the
Southern District of Florida in Miami.
According to a separate statement by the physicians'
representatives, however, "the dollar value of savings to the
physicians could equate to about $300 million over coming
years," and "the total value of (the) agreement is in excess of
$360 million," BestWire reports.
"The settlement with Health Net is certain to have an impact on
the other ... defendants that have yet to agree to terms with
the nation's physicians," Archie Lamb, the physicians' co-lead
counsel, told BestWire, noting the trial in the case is set for
September.
Among the changes Health Net said it agreed to implement are:
(1) "Enhanced" disclosure of certain claims-payment
practices;
(2) Conforming claims-editing software to certain editing
and payment rules and standards;
(3) Use of a uniform definition of "medical necessity" that
includes reference to generally accepted standards of
medical practice and credible scientific evidence; and
(4) Establish a billing dispute external review board to
provide prompt, independent resolution of billing
disputes.
The Company also released its first-quarter earnings, taking a
roughly $67 million pretax charge against earnings to account
for the settlement and related legal expenses. Net income rose
42% to $21.3 million, or 19 cents a share, from $15 million, or
13 cents a share, in the first quarter of 2004. Included is the
full effect of the $67 million pretax charge, or 36 cents a
share after tax, for severance benefits and litigation costs
related to the settlement of the lawsuit, Health Net said,
according to BestWire.
Health Net's total first-quarter revenues fell slightly to $2.91
billion from $2.92 billion. Health plan services revenues,
including revenues from its commercial, Medicare and Medicaid
health plans, also dropped slightly to $2.39 billion from $2.4
billion, as lower enrollment in health plans "almost completely
offset" improved commercial and Medicare premium yields across
the company's health plans, Health Net said.
"Our commitment to disciplined pricing resulted in lower
commercial enrollment in the first quarter of 2005," said Buddy
Piszel, Health Net's chief financial officer, in a statement.
"We believe that by year-end, our commercial enrollment will be
slightly above the level seen at the end of the first quarter of
2005, excluding New Jersey," he said.
JAKE'S FIREWORKS: Recalls 75T Artillery Kits For Injury Hazard
--------------------------------------------------------------
Jake's Fireworks, Inc. of Pittsburg, Kansas is cooperating with
the U.S. Consumer Product Safety Commission by voluntarily
recalling about 75,000 24-shot Excalibur Reloadable Artillery
Shell Kits.
The aerial shells are fused, shaped, and labeled in a way that
could cause consumers to unintentionally place them into the
launch tube upside down, resulting in a ground-level explosion.
Such an explosion can cause serious injuries to consumers in
close proximity of the device. The Company has confirmed one
incident where a consumer inadvertently placed an Excalibur
shell inside a tube upside down. No injuries were reported.
These 24-shot Excalibur Reloadable Artillery Shell Kits are sold
in a black box with plastic windows. The shell kits are a
consumer fireworks device that consists of a black plastic
launch tube and twenty-four display shells in a display box. "24
shot Excalibur Reloadable Artillery Shell Kits" and "World Class
Fireworks" are written on the front of the display box. Only the
model 24 shot Excalibur Reloadable Artillery Shell Kits are
included in this recall.
These items were sold at fireworks retailers, including display
stands and tents in states permitting the sale of consumer
fireworks, from Winter 2003 through Winter 2004 for about $30.
Consumers should stop using the fireworks immediately and return
the entire device to the store where purchased for a full refund
or contact Jake's Fireworks for further instructions. For more
details, contact the Company by Phone: (800) 766-1277 between
8 a.m. and 5 p.m. CT Monday through Friday, or visit the firm's
Web site: http://www.jakesfireworks.com.
KW BROWN: SEC Launches Suit For Securities Act Violations in FL
---------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court, Southern District of Florida, against two
affiliated investment advisers, K.W. Brown & Company and 21st
Century Investment Advisers, Inc. (collectively, the Advisers),
their affiliated broker-dealer, K.W. Brown Investments, Inc.
(Brown Investments), their principals, Kenneth W. Brown and
Wendy E. Brown, and a registered representative of K.W. Brown
Investments, Michael S. Cimilluca, Jr., alleging violations of
the antifraud, recordkeeping, and investment adviser reporting
provisions of the federal securities laws.
The Commission's complaint alleges that between 2002 and 2004,
Mr. Brown and Mr. Cimilluca improperly profited from trading in
securities that the Advisers also bought and sold on behalf of
their clients. According to the Commission's complaint, in
September 2002, Mr. Brown and Brown Investments hired Mr.
Cimilluca to day-trade the Brown Investments' proprietary
account (the Brown Trading Account). As compensation for his
day-trading, Mr. Cimilluca received 50% of all profits from the
Brown Trading account.
The Complaint also alleges that from September 2002 to May 2003,
Mr. Cimilluca was also responsible for executing Brown
Investments' customer trades, including trades for the Advisers'
clients who maintained their brokerage accounts at Brown
Investments. For these services, Mr. Cimilluca was only paid 1%
of all commissions generated from trades he executed. The
Commission's Complaint alleges that Mr. Cimilluca's compensation
structure gave him an incentive to steer more profitable trades
to the Brown Trading Account, and that he repeatedly allocated
better prices on securities transactions to the Brown Trading
Account than to the Advisers' clients. According to the
Commission's complaint, these favorable trades generated over
$330,000 in profits for the Brown Trading Account.
The Commission's complaint also alleges that the Advisers
routinely misstated their assets under management in Forms ADV
filed with the Commission between May 2002 and March 2004, and
failed to provide the Commission's staff with required books and
records on a timely basis.
The Commission's complaint charges the Advisers with violating
Section 17(a) of the Securities Act of 1933 (Securities Act),
Section 10(b) of the Securities Exchange Act of 1934 (Exchange
Act) and Rule 10b-5 thereunder, and with violating Sections 204,
206(1), 206(2) and 207 of the Investment Advisers Act of 1940
(Advisers Act) and Rules 204-1(a)(2) and 204-2(a)(8), charges
Kenneth Brown with violating, or aiding and abetting violations
of, Section 17(a) of the Securities Act, Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, and Sections 207, 204,
206(1), and 206(2) of the Advisers Act and Rules 204-1(a)(2)
and 204-2(a)(8) thereunder, charges Wendy Brown with violating,
or aiding and abetting violations of, Sections 204, 207, 206(1)
and 206(2) of the Advisers Act, and charges Cimilluca and Brown
Investments with aiding and abetting violations of Section 10(b)
of the Exchange Act and Rule 10b-5 thereunder and Sections
206(1) and 206(2) of the Advisers Act. The complaint seeks,
among other things, injunctive relief, disgorgement, and civil
penalties. Simultaneously with the filing of the Complaint, the
Advisers consented to the entry of an Order by the Court
appointing a Special Monitor to review and recommend changes to
the Advisers' compliance procedures.
The suit is styled "SEC v. K.W. Brown & Co., 21st Century
Advisors, Inc., K.W. Brown Investments, Inc., Kenneth W. Brown,
Wendy E. Brown, and Michael S. Cimilluca, Jr., No. 05-80367-CIV-
Middlebrooks/Johnson, S.D. Fla."
LIQUIDMETAL TECHNOLOGIES: Asks FL Court To Dismiss Stock Lawsuit
----------------------------------------------------------------
Liquidmetal Technologies, Inc. asked the United States District
Court for the Middle District of Florida, Tampa Division to
dismiss the consolidated securities class action filed against
it and certain of its present and former officers and directors.
Nine suits were initially filed in the United States District
Courts for the Middle District of Florida, Tampa Division, and
the Central District of California, Southern Division, alleging
violations of Sections 11 and 15 of the Securities Act of 1933
and Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. In August 2004,
four complaints were consolidated in the United States District
Court for the Middle District of Florida under the caption
"Primavera Investors v. Liquidmetal Technologies, Inc., et al.,
Case No. 8:04-CV-919-T-23EAJ." John Lee, Chris Cowley, Dwight
Mamanteo, Scott Purcell and Mark Rabold, were appointed co-lead
Plaintiffs. In September 2004, the other five complaints filed
in the Central District of California were transferred to the
Middle District of Florida for consolidation with the "Primavera
Investors" action.
The Lead Plaintiffs served their Consolidated Amended Class
Action Complaint on January 12, 2005. The Amended Complaint
alleges that the Prospectus issued in connection with the
Company's initial public offering in May 2002 contained material
misrepresentations and omissions regarding the Company's
historical financial condition and regarding a personal stock
transaction by the Company's chief executive officer. The Lead
Plaintiffs further generally allege that during the proposed
Class Period of May 21, 2002, through May 13, 2004, the
defendants engaged in improper revenue recognition with respect
to certain of the Company's business transactions, failed to
maintain adequate internal controls, and knowingly disclosed
unrealistic but favorable information about market demand for
and commercial viability of the Company's products to
artificially inflate the value of the Company's stock. The
Amended Complaint seeks unspecified compensatory damages and
other relief.
The suit is styled "Primavera Investors v. Liquidmetal Tech., et
al., 8:04-cv-00919-SDM-EAJ," filed in the United States District
Court for the Middle District of Florida, under Judge Steven D.
Merryday.
Lawyers for the defendants are:
(1) Michael L. Chapman and Tracy A. Nichols, Holland &
Knight, LLP, 100 N. Tampa St., Suite 4100, P.O. Box
1288, Tampa, FL 33601-1288, Phone: 813/227-8500, Fax:
813/229-0134, E-mail: michael.chapman@hklaw.com or
tracy.nichols@hklaw.com
(2) Tiffani G. Lee, Holland & Knight LLP, 701 Brickell
Ave., Suite 3000, P.O. Box 015441, Miami, FL 33131-
5441, Phone: 305/374-8500 ext: 7725, Fax: 305/789-7799
(fax), E-mail: tiffani.lee@hklaw.com
The plaintiff firms in this litigation are:
(i) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(ii) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(iii) Lerach Coughlin Stoia Geller Rudman & Robbins (D.C.),
1100 Connecticut Avenue, N.W., Suite 730, Washington,
DC, 20036, Phone: 202.822.6762, Fax: 202.828.8528, E-
mail: info@lerachlaw.com
(iv) Marc S. Henzel, 210 West Washington Square, Third
Floor, Philadelphia, PA, 19106, Phone: 215.625.9999,
Fax: 215.440.9475, E-mail: Mhenzel182@aol.com
(v) Milberg Weiss Bershad Hynes & Lerach, LLP (Boca Raton,
FL) 5355 Town Center Road - Suite 900, Boca Raton, FL,
33486, Phone: 561.361.5000, Fax: 561.367.8400
(vi) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(vii) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(viii) The Brualdi Law Firm, 29 Broadway - Suite 1515, New
York, NY, 10006, Phone: 212.952.0602, Fax:
212.952.0608,
(ix) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, e-mail:
newyork@whafh.com
(x) Geller Rudman, PLLC, 197 South Federal Highway, Suite
200, Boca Raton, FL, 33432, Phone: 561.750.3000, Fax:
888.262.3131, e-mail: info@geller-rudman.com
NL INDUSTRIES: Court Yet To Rule on Lead Suit Summary Judgment
--------------------------------------------------------------
The Court of Common Pleas, Cuyahoga County, Cleveland Ohio has
yet to rule on summary judgment on all claims in the class
action filed against NL Industries, Inc., styled "Jackson, et
al. v. The Glidden Co., et al. case no. 236835." Plaintiffs
seek compensatory and punitive damages for personal injury
caused by the ingestion of lead, and an order directing
defendants to abate lead-based paint in buildings. Plaintiffs
purport to represent a class of similarly situated persons
throughout the State of Ohio.
The trial court has denied plaintiffs' motion for class
certification. Defendants then filed a motion for summary
judgment on all claims.
NL INDUSTRIES: CA Court Yet To Rule on Summary Judgment Appeal
--------------------------------------------------------------
Plaintiffs have appealed the Superior Court of the State of
California, County of Santa Clara's granting summary judgment in
favor of NL Industries, Inc. in the class action filed against
it, styled "Santa Clara v. Atlantic Richfield Company, et al.,
case no. CV788657." The suit also names other former pigment
manufacturers, the Lead Industries Association (LIA) and certain
paint manufacturers.
The County of Santa Clara seeks to represent a class of
California governmental entities (other than the state and its
agencies) to recover compensatory damages for funds the
plaintiffs have expended or will in the future expend for
medical treatment, educational expenses, abatement or other
costs due to exposure to, or potential exposure to, lead paint,
disgorgement of profit, and punitive damages. Santa Cruz,
Solano, Alameda, San Francisco, and Kern counties, the cities of
San Francisco and Oakland, the Oakland and San Francisco unified
school districts and housing authorities and the Oakland
Redevelopment Agency have joined the case as plaintiffs.
Defendants filed a motion for summary judgment. In July 2003,
the court granted defendants' motion for summary judgment on all
remaining claims.
NL INDUSTRIES: IL Court Grants Summary Judgment in Lead Lawsuit
---------------------------------------------------------------
The Circuit Court of Cook County, Illinois, County Department,
Chancery Division granted NL Industries, Inc.'s motion for
summary judgment for the conspiracy count in the class action
styled "Lewis, et al. v. Lead Industries Association, et al.,
Case No. 00CH09800."
Plaintiffs seek to represent two classes, one of all minors
between the ages of six months and six years who resided in
housing in Illinois built before 1978, and one of all
individuals between the ages of six and twenty years who lived
between the ages of six months and six years in Illinois housing
built before 1978 and had blood lead levels of 10
micrograms/deciliter or more. The complaint seeks damages
jointly and severally from the former pigment manufacturers and
the LIA to establish a medical screening fund for the first
class to determine blood lead levels, a medical monitoring fund
for the second class to detect the onset of latent diseases, and
a fund for a public education campaign.
In March 2002, the court dismissed all claims. Plaintiffs
appealed, and in June 2003 the appellate court affirmed the
dismissal of five of the six counts of plaintiffs, but reversed
the dismissal of the conspiracy count. In May 2004, defendants
filed a motion for summary judgment on plaintiffs' conspiracy
count, which was granted in February 2005. The time for
plaintiffs' appeal has not yet run.
PACIFIC CAPITAL: RAL Agreement Suit Moved To Santa Barbara, CA
--------------------------------------------------------------
The class action filed against Pacific Capital Bancorp on
behalf of persons who entered into a refund anticipation loan
application and agreement (the "RAL Agreement") with the Company
from whose tax refund the Company deducted a debt owed by the
applicant to another RAL lender has been transferred to the
Superior Court in Santa Barbara, California.
The lawsuit was filed on March 18, 2003 in the Superior Court in
San Francisco, California as "Canieva Hood and Congress of
California Seniors v. Santa Barbara Bank & Trust, Pacific
Capital Bank, N.A., and Jackson-Hewitt, Inc." The Company is a
party to a separate cross-collection agreement with each of the
other RAL lenders by which it agrees to collect sums due to
those other lenders on delinquent RALs by deducting those sums
from tax refunds due to its RAL customers and remitting those
funds to the RAL lender to whom the debt is owed. This cross-
collection procedure is disclosed in the RAL Agreement with the
RAL customer and is specifically authorized and agreed to by the
customer.
The plaintiff does not contest the validity of the debt, but
contends that the cross-collection is illegal and requests
damages on behalf of the class, injunctive relief against the
Company, restitution of sums collected, punitive damages and
attorneys' fees. The Company has filed an answer to the
complaint and has also filed a cross-complaint seeking indemnity
from the other RAL lenders for which the funds were cross-
collected.
PACIFIC CAPITAL: Plaintiffs Amend Refund Transfer Lawsuit in CA
---------------------------------------------------------------
Plaintiffs filed an amended class action against Pacific Capital
Bancorp, on behalf of persons who entered into a refund transfer
application and agreement (the "RT Agreement") with the Company
from whose tax refund the Company deducted a debt owed by the
applicant to another refund anticipation loan (RAL) lender.
The suit was filed on May 13, 2003 in the Superior Court in San
Francisco, California as "Alana Clark, Judith Silverstine, and
David Shelton v. Santa Barbara Bank & Trust." The cross-
collection procedures mentioned in the description above of the
Hood case is also disclosed in the RT Agreement with each RT
customer and is specifically authorized and agreed to by the
customers. The plaintiffs do not contest the validity of the
debt, but contend that the cross-collection is illegal and
request damages on behalf of the class, injunctive relief
against the Company, restitution of sums collected, punitive
damages and attorneys' fees.
The Company filed a motion for a change in venue from San
Francisco to Santa Barbara. The plaintiffs' legal counsel
stipulated to the change in venue. Thereafter, the plaintiffs
have dismissed the complaint without prejudice. The plaintiffs
have filed a new complaint in San Francisco limited to a single
cause of action alleging a violation of the California Consumer
Legal Remedies Act. The Company has filed an answer to the
complaint and has also filed a cross-complaint seeking indemnity
from the other RAL lenders for which the money was cross-
collected.
PACIFIC CAPITAL: Plaintiffs Lodge Amended NY RAL Agreement Suit
---------------------------------------------------------------
Plaintiffs filed an amended class action against Pacific Capital
Bancorp on behalf of residents of the State of New York who
engaged Jackson Hewitt, Inc (JHI) to provide tax preparation
services and who through JHI entered into an agreement with the
Company to receive a refund anticipation loan (RAL). JHI is
also a defendant.
The lawsuit was filed on June 18, 2004, in the Supreme Court of
the State of New York, County of New York as "Myron Benton v.
Jackson Hewitt, Inc. and Santa Barbara Bank & Trust Co." As
part of the RAL documentation, the customer receives and signs a
disclosure form which discloses that the Company may share a
portion of the federal refund processing fee and finance charge
with JHI. The plaintiffs allege that the failure of JHI and the
Company to disclose the specific amount of the fee which JHI
receives is unlawful and request damages on behalf of the class,
injunctive relief, punitive damages and attorneys' fees.
Following the filing of a motion to dismiss the complaint by the
Company, the plaintiff has filed an amended complaint. The
amended complaint has added three new causes of action:
(1) a cause of action for an alleged violation of
California Business and Professions Code Sections
17200, and 17500, et seq, as a result of alleged
deceptive business practices and false advertising;
(2) a cause of action for an alleged violation of the
California Legal Remedies Act, California Civil Code
Section 1750, et seq;
(3) a cause of action for an alleged negligent
misrepresentation.
REXHALL INDUSTRIES: SEC Issues Cease-And-Desist Order V. Exec
-------------------------------------------------------------
The Securities and Exchange Commission issued an Order
Instituting Public Administrative and Cease-and- Desist
Proceedings Pursuant to Section 21C of the Securities Exchange
Act of 1934 and Rule 102(e) of the Commission's Rules of
Practice, Making Findings, and Imposing Remedial Sanctions and a
Cease-and-Desist Order (Order) against Dawn Diaz. Ms. Diaz, 41,
of Saugus, California, was Chief Financial Officer of Rexhall
Industries, Inc. (Rexhall) from February 2001 to July 2002.
She is a certified public accountant.
The Order finds that in preparing Rexhall's financial statements
for the first quarter of 2002, Ms. Diaz was presented with two
materially different calculations for raw materials inventory,
one of which was substantially higher than the other. Without
reconciling the two figures, and without bringing the
discrepancy to the attention of Rexhall's outside audit firm,
Ms. Diaz used the higher figure in preparing the financial
statements for the quarter. In fact, the higher figure that Ms.
Diaz used was incorrect. As a result, the company incorrectly
reported net income of $181,000 (earnings of $.03 per share) in
its Form 10-Q for the quarter. When the Company later
discovered that Ms. Diaz had used the incorrect figure, the
company restated its financial statements for the quarter to
reflect the correct figure. The restatement reported a net loss
for the quarter of $253,000 (a loss of $.04 per share) instead
of the previously reported net income of $181,000 (earnings of
$.03 per share).
Based on the above, Ms. Diaz is ordered to cease and desist from
causing any violations and any future violations of Sections
13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and
Rules 12b-20 and 13a-13 thereunder, and from committing or
causing any violations and any future violations of Section
13(b)(5) of the Exchange Act and Rules 13b2-1 thereunder. Ms.
Diaz is also denied the privilege of appearing or practicing
before the Commission as an accountant and may, after three
years, request reinstatement. Ms. Diaz consented to the
issuance of the Order without admitting or denying any of the
findings in the order.
SIMPLICITY INC.: Recalls 575 White Cribs Due To Choking Hazard
--------------------------------------------------------------
Simplicity, Inc. of Reading, Pennsylvania is cooperating with
the U.S. Consumer Product Safety Commission by voluntarily
recalling about 575 White Lancaster Cribs. The white paint on
the cribs can chip, posing a choking hazard to young children.
The recalled cribs are made of wood and painted white. Model
numbers 8554W-PT and 8554WW are printed inside the headboard and
on the envelope attached to the mattress support. The Simplicity
name, address, manufacturing date and model number are written
on a label found on the inside bottom of the headboard. The
Company has received four reports of consumers who noticed paint
peeling off their crib. No injuries have been reported.
These items were sold at department stores, Children's product
stores and Target.com from June 2004 through April 2006 for
about $200. For more details, contact the Company by Phone:
(800) 858-8323 between 8:30 a.m. and 5 p.m. ET Monday through
Friday or visit the Web site:
http://www.simplcityforchildren.com.
SOUTH CAROLINA: Settlement Inked For Graniteville Accident Suit
---------------------------------------------------------------
A settlement of the class action filed against Norfolk Southern
for the real property and personal property claims for the
citizens of Graniteville, South Carolina, as well as
compensation for the evacuation and minor injuries resulting
from the January 6, 2005 derailment in Graniteville has been
reached. Law firm Motley Rice LLC announced that it has
participated in the negotiation of the agreement in principal.
More than 20 lawsuits, ranging from personal injury to wrongful
death, have been filed since the January 6, 2005 accident. As
previously reported in the January 11, 2005 edition of the Class
Action Reporter, Nine people died from the toxic cloud and about
250 were hurt as a Norfolk Southern freight train crashed into a
parked train on January 6, 2005 in Graniteville, South Carolina.
The Norfolk Southern freight train was carrying chlorine gas,
when it struck a parked train about 2:30 a.m. at an Avondale
Mills facility in this textile town near the Georgia line.
Thirteen cars were derailed. Most of the injured were treated
for respiratory ailments and released, authorities said. At
least 46 people remained in the hospital, including 13 who were
in critical condition.
"We are pleased to be able to participate in bringing some
prompt economic relief to this community. We are pleased to see
the railroad coming forward and working in good faith with us to
provide the unfortunate victims of this derailment with a basis
for economic recovery without delay and without the necessity of
long drawn out litigation," Joe Rice, the Motley Rice Member who
led the negotiations said in a statement. "From the beginning
it has been our goal with this Class Action to ensure that
anyone affected by the derailment and the chlorine spill get the
help they needed and get it quickly. We are pleased that this
settlement has been reached."
The proposed Class Action Settlement will provide compensation
to owners of any real and personal property located in the
evacuation zone at the time of the derailment that suffered
damage from exposure to chlorine that have not already been
compensated by Norfolk Southern. In addition, it will compensate
each household that was subjected to the evacuation with a lump
sum payment and each individual who suffered minor physical
injury that did not require medical treatment. All of the
compensation will be paid by Norfolk Southern through a claims
process that will be administered by a court-appointed Special
Master and each of the citizens of Graniteville will be entitled
to have assistance from Class Counsel.
Mr. Rice stressed that, "This settlement is not intended to
resolve the claims for the families of the victims who died as a
result of the chlorine exposure nor the individuals who suffered
extensive direct exposure that resulted in hospitalization or
medical treatment."
Motley Rice will continue to work with the citizens of
Graniteville and its clients who suffered the significant
injuries as well as with the railroad to seek resolution of
these claims in the near future. However, at this time the
proposed Class Action Settlement will not address those claims.
The parties anticipate the Court will set a notice procedure and
hearing procedure that will allow this settlement to move
forward within the next thirty to sixty days.
"I commend the railroad for their willingness to step up and
assume responsibility. I am hopeful that this settlement will
allow my fellow Graniteville citizens to make quicker steps
towards recovery and put this tragic experience behind them.
Many people in this community were seriously injured and will
need additional help, but we are surely headed in the right
direction," expressed attorney, Baylen T. Moore who is
representing individuals injured during the derailment.
Motley Rice would like to thank Sheriff Hunt for assisting the
parties in ascertaining the facts concerning the time and scope
of the evacuations.
For more information on the Graniteville, South Carolina class
action, or on transportation litigation, please contact Motley
Rice by Phone: 1-800-967-0768 or visit the website:
http://www.motleyrice.com.
STAAR SURGICAL: Plaintiffs To File Consolidated Securities Suit
---------------------------------------------------------------
Plaintiffs intend to file a consolidated securities class action
against Staar Surgical Co. and its Chief Executive Officer,
alleging violations of federal securities laws.
Since September 1, 2004, multiple class action lawsuits have
been filed in the United States District Courts for the
Central District of California and the District of New Mexico on
behalf of all persons who acquired the Company's securities
during various periods between April 3, 2003 and September 28,
2004.
On December 15, 2004, the Court ordered consolidation of the
complaints that had been filed in the United States District
Court for the Central District of California and directed that
the plaintiffs file a consolidated complaint as soon as
practicable. The New Mexico action was voluntarily dismissed on
January 28, 2005.
The lawsuits generally allege that the defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, as amended, and Rule 10b-5 promulgated thereunder, by
issuing false and misleading statements regarding intraocular
lenses and implantable lenses, and failing timely to disclose
significant problems with the lenses, as well as the existence
of serious injuries and/or malfunctions attributable to the
lenses, thereby artificially inflating the price of the
Company's Common Stock. The plaintiffs generally seek to
recover compensatory damages, including interest.
THEGLOBE.COM: NY Court Preliminarily Approves Lawsuit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against TheGlobe.com,
Inc., certain of its current and former officers and directors
and several investment banks that were the underwriters of the
Company's initial public offering.
On and after August 3, 2001 and as of the date of this filing,
six putative shareholder class action lawsuits were filed on
behalf of purchasers of the stock of the Company during the
period from November 12, 1998 through December 6, 2000.
Plaintiffs allege that the underwriter defendants agreed to
allocate stock in the Company's initial public offering to
certain investors in exchange for excessive and undisclosed
commissions and agreements by those investors to make additional
purchases of stock in the aftermarket at pre-determined prices.
Plaintiffs allege that the Prospectus for the Company's initial
public offering was false and misleading and in violation of the
securities laws because it did not disclose these arrangements.
On December 5, 2001, an amended complaint was filed in one of
the actions, alleging the same conduct described above in
connection with the Company's November 23, 1998 initial public
offering and its May 19, 1999 secondary offering. A Consolidated
Amended Complaint, which is now the operative complaint, was
filed in the Southern District of New York on April 19, 2002.
The action seeks damages in an unspecified amount.
On February 19, 2003, a motion to dismiss all claims against the
Company was denied by the Court. On October 13, 2004, the Court
certified a class in six of the approximately 300 other nearly
identical actions and noted that the decision is intended to
provide strong guidance to all parties regarding class
certification in the remaining cases. Plaintiffs have not yet
moved to certify a class in theglobe.com case.
The Company has approved a settlement agreement and related
agreements which set forth the terms of a settlement between the
Company, the Individual Defendants, the plaintiff class and the
vast majority of the other approximately 300 issuer defendants.
Among other provisions, the settlement provides for a release of
the Company and the Individual Defendants for the conduct
alleged in the action to be wrongful. The Company would agree
to undertake certain responsibilities, including agreeing to
assign away, not assert, or release certain potential claims the
Company may have against its underwriters. The settlement
agreement also provides a guaranteed recovery of $1 billion to
plaintiffs for the cases relating to all of the approximately
300 issuers. To the extent that the underwriter defendants
settle all of the cases for at least $1 billion, no payment will
be required under the issuers' settlement agreement. To the
extent that the underwriter defendants settle for less than $1
billion, the issuers are required to make up the difference.
On February 15, 2005, the court granted preliminary approval of
the settlement agreement, subject to certain modifications
consistent with its opinion. Judge Shira Scheindlin ruled that
the issuer defendants and the plaintiffs must submit a revised
settlement agreement which provides for a mutual bar of all
contribution claims by the settling and non-settling parties and
does not bar the parties from pursuing other claims.
The suit is styled "In Re TheGlobe.com, Inc. Initial Public
Offering Securities Litigation," filed in relation to "IN RE
INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No.
21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
TOBACCO LITIGATION: FL Jury Nips Flight Attendant's Injury Suit
---------------------------------------------------------------
The Miami-Dade Circuit Court in Florida rejected a former flight
attendant's claims that her health problems were caused by
exposure to second-hand cigarette smoke aboard airliners, the
Associated Press reports.
Lorraine Swaty, who worked as a flight attendant for US Airways
Group, Inc. for 20 years, filed the suit, as part of a 1997
class-action settlement allowing individual flight attendants to
claim compensatory damages against cigarette companies for
health problems they say are related to smoke exposure abroad
aircraft. About 2,800 such lawsuits have been filed. Ms. Swaty
has chronic sinusitis.
The jury rejected Ms. Swaty's claims, marking the sixth time in
seven such cases that have gone to a jury since 2001 in which
cigarette companies have prevailed. Another case ended in a
mistrial in May 2002 and was later dismissed.
"We are extremely pleased with the verdict," Ronald S. Milstein,
senior vice president and general counsel at Lorillard Tobacco
Co., one of the manufacturers named in the lawsuit told AP. "We
look forward to continuing our defense in similar cases."
Ms. Swaty's attorney, Philip Gerson, did not immediately return
a telephone call seeking comment, AP reports.
VERDISYS INC.: Reaches Settlement For TX Securities Fraud Suit
--------------------------------------------------------------
Verdisys, Inc. reached a settlement for the consolidated
securities class action filed against it in the U.S. District
Court for the Southern District of Texas.
The lawsuit alleged that the Company and its former CEO, Dan
Williams, and its former CFO, Andrew Wilson, violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule
10b-5 promulgated thereunder. The lawsuits alleged that the
defendants had made material misstatements about the Company's
financial results. More specifically, the Complaints alleged
that the defendants had failed to disclose and indicate:
(1) that the Company had materially overstated our net
income and earnings per share;
(2) that the Company prematurely recognized revenue from
contracts between it, Edge and Energy 2000 NGC, Inc. in
violation of GAAP and its own revenue recognition
policy;
(3) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the company; and
(4) that as a result of recognizing revenue prematurely,
its financial results were inflated at all relevant
times.
Under terms of the agreement, the Company will issue to the
class 1,150,000 shares of common stock and pay up to $55,000 in
legal and administrative fees for the plaintiffs.
The suit is styled "Harper v. Verdisys Inc, et al, case no.
4:04-cv-01297," filed in the United States District Court for
the Southern District of Texas, under Judge Sim Lake.
Representing the Company is Michael T. Larkin of Adams and Reese
1221 McKinney Ste 4400 Houston, TX 77010 Phone: 713-308-0166
Fax: 713-652-5152 E-mail: michael.larkin@arlaw.com.
Representing the plaintiffs are:
(i) Thomas E. Bilek, 1000 Louisiana Suite 1302 Houston, TX
77002 Phone: 713-227-7720 Fax: 713-227-9404 E-mail:
tbilek@hb-legal.com
(ii) Samuel H. Rudman, Cauley Geller et al, 200 Broadhollow
Rd Melville, NY 11747 Phone: 631-267-7100
(iii) Jules Brody, Stull Stull & Brody, Six East 45th Street
New York, NY 10017 Phone: 21/687-7230
(iv) Joseph H Weiss, Weiss and Yourman 551 Fifth Ave
Ste 1600 New York, NY 10176 Phone: 212-682-3025 Fax:
212-682-3010
WATCHGUARD TECHNOLOGIES: Lead Plaintiff Deadline Set June 7,2005
----------------------------------------------------------------
Investors are advised that they have until June 7, 2005 to seek
appointment by the Court as one of the lead plaintiffs in the
class action lawsuit filed by Pomerantz Haudek Block Grossman &
Gross LLP) on behalf of purchasers of WatchGuard Technologies,
Inc. (NASDAQ:WGRD) securities during the period from February
12, 2004 to March 15, 2005, inclusive. The lawsuit was filed on
April 19, 2005 in the United States District Court, Western
District of Washington.
The complaint alleges that WatchGuard and certain of its
officers and directors knowingly or recklessly misrepresented
the Company's earnings throughout the Class Period, and thereby
caused the Company's stock price to trade at artificially
inflated prices in violation of the Securities Exchange Act of
1934.
The truth, known to each of the defendants but concealed from
the investing public, entailed that:
(1) WatchGuard's Q1-Q3 2004 reported financial results were
materially false and misleading due to inaccurate
income statement classification of early pay incentive
discounts taken by customers; under-accrual of customer
rebate obligations; and timing of revenue recognition
associated with specific products and services
(resulting from an overstatement of product revenue and
understatement of deferred revenue);
(2) the Company's February 12, 2004 projections were
materially false and misleading;
(3) The functionality and value of the Company's "Firebox
X" product was grossly overstated, and this product did
not materially or accurately improve the Company's
gross margins, streamline the Company's management or
otherwise reduce its reliance on custom components; and
(4) contrary to defendants' statements, the Firebox X was
not tracking as defendants claimed.
On March 16, 2005, WatchGuard disclosed that:
(i) certain errors were discovered in its audit process
and that it would need to reclassify early pay
incentive discounts from interest expense to reduce
its revenue for its previous financial results for
2002, 2003 and the first three quarters of 2004;
(ii) an error was discovered in the Company's handling of
lease incentives; and
(iii) the errors reflected a material weakness in the
Company's internal controls over financial reporting.
The market reacted swiftly to this disclosure, with the
Company's stock price falling to a closing price of $3.17 on
March 16, 2005.
For more details, contact Carolyn S. Moskowitz or Teresa L. Webb
of the Pomerantz Firm by Phone: 888.476.6529 (or 888.4-POMLAW),
toll free, or by E-mail: csmoskowitz@pomlaw.com or
tlwebb@pomlaw.com or visit the Web site: http://www.pomlaw.com.
WELLS REAL: Plaintiffs To Withdraw Suit Summary Judgment Appeal
---------------------------------------------------------------
The Superior Court of Gwinnett County, Georgia allowed
plaintiffs to withdraw its appeal of summary judgment granted in
favor of Wells Real Estate Fund I in the class action styled
"Roy Johnston v. Wells Real Estate Fund I, case no. 03-A00525-
6."
A limited partner holding Class B Units filed the suit on behalf
of all limited partners holding Class B Units as of January 15,
2003. The plaintiff alleged that the terms of the partnership
agreement were inconsistent with the original intent of the
parties thereto such that the alleged original intent would have
provided the limited partners holding Class B Units with a
priority in the allocation and payment of net property sale
proceeds.
On May 7, 2004, the Court granted summary judgment in favor of
the Partnership on grounds of statutes of limitation and laches.
By an order entered on December 14, 2004, the court granted the
plaintiff's motion to withdraw the notice of appeal, which had
previously been filed by the plaintiff.
New Securities Fraud Cases
BEARINGPOINT INC.: Milberg Weiss Launches Securities Suit in VA
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
securities class action lawsuit on behalf of purchasers of the
securities of BearingPoint, Inc. (NYSE: BE) between August 14,
2003 and April 20, 2005, inclusive, seeking to pursue remedies
under the Securities Exchange Act of 1934.
The action is pending in the United States District Court for
the Eastern District of Virginia against the Company, Randolph
C. Blazer (former Chief Executive Officer); Roderick C. McGeary
(former Chief Executive Officer during the Class Period); and
Robert S. Falcone (Chief Financial Officer from April 2003 to
January 2005).
The Complaint further alleges that the defendants' public
statements concerning BearingPoint's financial results,
international operations, and adequacy of the Company's internal
controls were false in that they failed to disclose facts:
(1) that the Company had materially overstated its net
income and earnings per share and undervalued its
goodwill by at least $250 million;
(2) that the Company had inflated its earnings by
improperly accounting for restructuring charges
relating to acquisitions;
(3) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that as a result, the Company's net income and
financial results were materially overstated during the
Class Period.
On the afternoon of April 20, 2005, defendants issued a press
release announcing that the Company's financial statements for
2003 and most of 2004 should not be relied upon, and would have
to be restated. In addition, defendants revealed that the
Company expected a loss for 2005, and that the SEC is
investigating the Company's accounting and internal controls. In
response to this news, the stock dropped dramatically by more
than 25%, on unusually high trading volumes.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado, by Mail: One Pennsylvania Plaza, 49th fl. New
York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail:
sfeerick@milbergweiss.com; or contact Maya Saxena, Joseph E.
White III, Ariel Acevedo by Mail: 5200 Town Center Circle, Suite
600 Boca Raton, FL 33486 by Phone: (561) 361-5000 by E-mail:
msaxena@milbergweiss.com or jwhite@milbergweiss.com, or visit
the Website: http://www.milbergweiss.com.
ORANGE 21: Barrack Rodos Files Securities Fraud Suit in S.D. CA
---------------------------------------------------------------
Barrack, Rodos & Bacine filed a class action lawsuit in the
United States District Court for the Southern District of
California on behalf of all investors who acquired common stock
of Orange 21, Inc. (Nasdaq: ORNG) ("Orange") in, or traceable
to, the company's initial public offering on December 14, 2004.
Orange 21, which changed its name from Spy Optic, Inc., designs,
develops and markets premium products for the action sports and
youth lifestyle markets, including sunglasses and goggles
marketed under the Spy Optic brand. On December 14, 2004, Orange
21 completed its IPO of common stock at $8.75 per share
(including 2.48 million shares sold by Orange 21 and 1 million
shares sold by No Fear, Inc.) for net proceeds of $20.2 million
to Orange 21 (and $8.1 million to No Fear). According to the
complaint, the Registration Statement issued in connection with
the IPO failed to disclose that Orange 21 was engaging in
copyright infringement and that its European operations were
underperforming and would have to be restructured, which would
adversely affect 2005 results.
On February 17, 2005, Orange 21 announced reduced earnings
expectations for 2005 due in part to changes in its European
infrastructure. On this news, Orange 21's stock, which had been
trading at $9.50 per share, lost 30% of its value.
For more details, contact Samuel M. Ward, Esquire, Barrack,
Rodos & Bacine, by Phone: 1-619-230-0800, by Fax:
1-619-230-1874, or Leslie Bornstein Molder, Esquire, Barrack,
Rodos & Bacine, by Phone: 1-215-963-0600, or by Fax:
1-215-963-0838.
TRIBUNE COMPANY: Goldman Scarlato Launches Securities Suit in IL
----------------------------------------------------------------
Goldman Scarlato & Karon, P.C. initiated a securities class
action in the United States District Court for the Northern
District of Illinois, on behalf of persons who purchased or
otherwise acquired publicly traded securities of Tribune Company
(NYSE:TRB) between January 24, 2002 and July 15, 2004,
inclusive. The lawsuit was filed against the Company, Dennis J.
Fitzimons, Donald C. Grenesko and Jack Fuller.
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
Defendants intentionally overstated the circulation of numerous
Tribune newspapers, including Newsday and Hoy, its Spanish
daily, in order to fraudulently take higher incentive payments
from the papers' advertisers. These inflated circulation numbers
had a direct impact on the Company's financial results, thereby
overstating its revenue and income by millions of dollars.
In July of 2004, Tribune reported that both Newsday and Hoy had
inflated circulation figures since 2001. The announcement set
off numerous investigations as well as issues with the Audit
Bureau of Circulation, a private body in charge of auditing
newspaper industry circulation figures. The Company eventually
announced that it would restate its circulation results, and
paid $95 million in costs, fines, refunds and investigation
costs. Shares of Tribune traded down to $41 at the close of
business on July 15, 2004 and have not recovered.
For more details, contact the Company by Phone: (888) 753-2796.
TRIBUNE COMPANY: Schiffrin & Barroway Files IL Securities Suit
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a securities
class action in the United States District Court for the
Northern District of Illinois on behalf of all securities
purchasers of Tribune Company (NYSE: TRB) between January 24,
2002 to July 15, 2004 inclusive.
The complaint charges Tribune, Dennis J. Fitzsimons, Donald C.
Grenesko, and Jack Fuller 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 circulation figures at Hoy and Newsday
publications were artificially inflated;
(2) that the Company lacked appropriate oversight over
circulation managers and their reporting practices;
(3) that by relying on the artificially inflated sales
figures defendants were able to secure additional ad
revenue and other income; and
(4) that as a result the Company's revenues were materially
overstated at all relevant times.
In June 2004, Tribune revealed that that two of its papers,
Newsday and Spanish-language publication Hoy, had inflated
circulation figures since 2001. The revelations forced Tribune
to reevaluate how it accounts for reevaluation. As a result,
Tribune admitted on July 15, 2004 that its reported circulation
numbers for Hoy and Newsday were overstated. Tribune announced
it was conducting an internal investigation and that it may
refund to advertisers all amounts that they had been
overcharged. Since the allegations about the Company's
circulation practices began to surface, Tribune's stock declined
from a high of $48.19 per share on June 7, 2004, to $41.58 on
July 15, 2004.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. by Mail: 280 King of Prussia Road Radnor, PA 19087
by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-
mail: info@sbclasslaw.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.
*********
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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