/raid1/www/Hosts/bankrupt/CAR_Public/050527.mbx
C L A S S A C T I O N R E P O R T E R
Friday, May 27, 2005, Vol. 7, No. 104
Headlines
ADVANCED MAGNESIUM: IN Judge Orders Residents To Allow Cleanup
AMERICAN EXPRESS: FL Court Holds Fairness Hearing For Settlement
AMERICAN EXPRESS: Asks NY Court To Dismiss Consumer Fraud Suit
AMERICAN EXPRESS: Asks NY Court To Dismiss Card Antitrust Suit
AMERICAN EXPRESS: AZ Court Refuses To Dismiss Consumer Lawsuit
AZTAR CORPORATION: AZ Court Nixes Certification For Fraud Suit
BLUE CROSS: Enters Suit Settlement on Suit Over Tobacco Proceeds
BROADCOM CORPORATION: Securities Suit Trial Set September 2005
BURLINGTON RESOURCES: Trial in OK Gas Royalties Suit Set in 2005
CALIFORNIA: Companies Propose Settlement in Music Club Lawsuit
CANADA: Crime Victim's Father Lodges Suit V. Federal Government
COMPUCREDIT CORPORATION: Consumers Launch Suit V. Payday Loans
CORE LABORATORIES: TX Court Refuses To Dismiss Securities Suit
CRAY INC.: Hagens Beerman Launches Securities Fraud Suit in WA
DOWNEY FINANCIAL: Reaches Settlement for CA Overtime Wage Suit
ENOGEX INC.: Faces Gas Producers' Antitrust Lawsuit in OK Court
EQUINIX INC.: NY Court Preliminarily OKs Stock Suit Settlement
GOLDMAN SACHS: Hires Firm To Defend V. NYSE Seatholder's Lawsuit
GUAM: Judge Joaquin Manibusan Hears Legal Arguments in EITC Case
HENRY SCHEIN: Reaches Settlement For TX Consumer Fraud Lawsuit
HENRY SCHEIN: Plaintiffs Seek Higher Attorney Fees in Settlement
ISRAEL: Tel Aviv Court Dismisses $4.56M Visa Cal Fees Complaint
JACK SCHROLD: Agrees To Refrain From Operating Credit Business
KENNETH COLE: CA Employees Launch Suit For Overtime Violations
KENTUCKY: City of Lexington Asks Court To Reassess Berry Ruling
KNOXVILLE COLLEGE: Students Launch Suit Over Money Owed to Them
MICHIGAN: Ann Arbor Center Lodges ADA Suit V. City of Ypsilanti
PATINA OIL: Faces Natural Gas Royalties Suit in CO State Court
PEROT SYSTEMS: Court To Rule on Striking of Suit Claims Appeal
PEROT SYSTEMS: Asks TX Court To Dismiss Securities Fraud Lawsuit
REGISTER.COM: NY Court Approves Consumer Fraud Suit Settlement
SBC COMMUNICATIONS: DC Appeals Court Reinstates Retirees' Suit
SPAM ZOMBIES: FTC, Gov't Partners Step Up Anti-Spam Campaign
TENET HEALTHCARE: Reaches Settlement For CA Consumer Fraud Suit
TENET HEALTHCARE: Wage, Hour Suits Coordinated in CA State Court
VEECO INSTRUMENTS: Shareholders Launch Securities Lawsuits in NY
VORNADO OPERATING: DE Court Approves Shareholder Suit Settlement
Asbestos Alert
ASBESTOS LITIGATION: Spodden Valley Pathway Closed Due to Risks
ASBESTOS LITIGATION: Jurors Award $500T in Madison County Trial
ASBESTOS LITIGATION: Texas Governor Signs Asbestos Bill Into Law
ASBESTOS LITIGATION: Asbestos Spill Causes Alarm in South Africa
ASBESTOS LITIGATION: Senate Group Rejects Asbestos Study Plan
ASBESTOS LITIGATION: Inquest Reveals Builder Died from Exposure
ASBESTOS LITIGATION: Group Calls for Legal Reforms to Hit Firms
ASBESTOS LITIGATION: ACC Appeals Lump Sum Award to Former Welder
ASBESTOS LITIGATION: Problems Hit Asbestos Removal Project in IN
ASBESTOS LITIGATION: Vit. E Derivative Halts Tumor Growth, Study
ASBESTOS LITIGATION: OH Plant Workers Show High Rate of Plaques
ASBESTOS LITIGATION: Judge Delays Trial for WR Grace Executives
ASBESTOS LITIGATION: Too Few Get Compensation Payouts, UK Report
ASBESTOS LITIGATION: DNR Probes Dumping of Asbestos in GA Park
ASBESTOS LITIGATION: District Warns Of Contaminated Garages
ASBESTOS LITIGATION: Shares Rise for Companies in Asbestos Suits
ASBESTOS LITIGATION: El Dorado Businesses Bear Asbestos Worries
ASBESTOS LITIGATION: Inquest Shows Electrician Died of Exposure
ASBESTOS LITIGATION: New York Has Naturally Occurring Asbestos
ASBESTOS LITIGATION: AU Council Applauds Quick Cleanup of Spill
ASBESTOS LITIGATION: TriMas Corp.'s Pending Cases Jump to 1,470
ASBESTOS LITIGATION: Mestek Inc. Named in More Than 300 Lawsuits
ASBESTOS LITIGATION: Moscow CableCom Discloses JM Ney's Lawsuits
ASBESTOS LITIGATION: Ampco-Pittsburgh Defense Costs Reach $2.6M
ASBESTOS LITIGATION: Celanese Corp. Subsidiaries Face 850 Cases
ASBESTOS LITIGATION: MP Blasts NSW Govt. for Overturning Policy
ASBESTOS LITIGATION: El Dorado County Responds to Asbestos Issue
ASBESTOS LITIGATION: Queensland Gives $120M for Asbestos Removal
ASBESTOS LITIGATION: New Zealander Awaits Cash Verdict from ACC
ASBESTOS ALERT: Neshkin to Pay US$15,500 Penalty for EPA Breach
ASBESTOS ALERT: Jewson Ltd. Fined for Illegal Dumping of Waste
ASBESTOS ALERT: UK Firm Fined for Importing and Storing Asbestos
New Securities Fraud Cases
ABLE LABORATORIES: Finkelstein Thompson Files NJ Securities Suit
ABLE LABORATORIES: Lerach Coughlin Lodges Securities Suit in NJ
ABLE LABORATORIES: Milberg Weiss Lodges Securities Lawsuit in NJ
ABLE LABORATORIES: Shalov Stone Lodges Securities Lawsuit in NJ
CRAY INC.: Lerach Coughlin Lodges Securities Fraud Lawsuit in WA
DORAL FINANCIAL: Stull Stull Lodges Securities Fraud Suit in NY
HARLEY-DAVIDSON: Lerach Coughlin Lodges Securities Lawsuit in WI
R&G FINANCIAL: Stull Stull Lodges Securities Fraud Lawsuit in NY
*********
ADVANCED MAGNESIUM: IN Judge Orders Residents To Allow Cleanup
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Madison Superior Court Judge Jack Brinkman ordered property
owners to allow HydroTech employees in their yards to clean up
debris from a January 14 fire at the Advanced Magnesium Alloys
Corporation plant, which forced thousands of residents to
evacuate, The Associated Press reports.
After the fire and the eventual lawsuit that followed, some
property owners refused to allow magnesium recycling plant
workers onto their properties to complete the cleanup required
by the Indiana Department of Environmental Management.
Judge Brinkman's order takes away the choice to refuse crews
permission to test and remove asbestos and other materials blown
from the fire. The judge's orders though only dealt with the
cleanup efforts and not a monetary settlement of lawsuits.
Court documents revealed that less than a week after the fire,
attorney Tom Hamer launched a lawsuit in Madison Superior Court
seeking class action status on behalf of some 8,000 residents
who were evacuated because of fumes from the chemical blaze. No
specific damage amount was sought in the, instead, compensatory
damages for loss of use of property, lessening property values,
all expenses caused by the evacuation and fire, economic losses
and disruption to plaintiffs were sought.
Mr. Hamer, who hopes to have the rest of the settlement done in
a month, told AP, "We have a letter of agreement," regarding the
lawsuit. "There is an entire settlement to the lawsuits. The
first phase deals with the cleanup and the second with the
distribution of money," he adds.
AMERICAN EXPRESS: FL Court Holds Fairness Hearing For Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
Florida held final fairness hearing for the nationwide
settlement of the class action filed against American Express
Company, alleging that the Company wrongfully collected amounts
assessed on converting transactions made in foreign currencies
to U.S. dollars and/or failed to properly disclose the existence
of such amounts in its Cardmember agreements and billing
statements.
Several state suits were initially filed, seeking, among other
remedies, injunctive relief, money damages and/or attorneys'
fees on their own behalf and on behalf of the putative class of
persons similarly situated.
On October 15, 2004, the U.S. District Court for the Southern
District of Florida granted preliminary approval of a nationwide
class action settlement to resolve all lawsuits and allegations
with respect to the Company's collection and disclosure of fees
assessed on transactions made in foreign currencies in the case
captioned "Lipuma v. American Express Bank, American Express
Travel Related Services Company, Inc. and American Express
Centurion Bank (filed in August 2003)."
The settlement that has been preliminarily approved by the Court
contemplates that the Company would deposit $75 million into a
fund that would be established to reimburse class members with
valid claims, make certain contributions to charitable
organizations to be identified later and pay attorneys' fees and
make certain changes to the disclosures in its Cardmember
agreements and billing statements regarding its foreign currency
conversion practices. The Company has established reserves to
cover the proposed payment that would be made to reimburse class
members and pay attorneys' fees. The preliminary approval order
enjoins all other proceedings that make related allegations
pending a final approval hearing including, but not limited to
the following cases:
(1) Environmental Law Foundation, et al. v. American
Express Company, et al., Superior Court of Alameda
County, California (filed March 2003);
(2) Rubin v. American Express Company and American Express
Travel Related Services Company, Inc., Circuit Court of
Madison County, Illinois (filed April 2003);
(3) Angie Arambula, et al. v. American Express Company, et
al., District Court of Cameron County, Texas, 103rd
Judicial District (filed May 2003);
(4) Fuentes v. American Express Travel Related Services
Company, Inc. and American Express Company, District
Court of Hidalgo County, Texas (filed May 2003);
(5) Wick v. American Express Company, et al., Circuit Court
of Cook County, Illinois (filed May 2003);
(6) Bernd Bildstein v. American Express Company, et al.,
Supreme Court of Queens County, New York (filed June
2003);
(7) Janowitz v. American Express Company, et al., Circuit
Court of Cook County, Illinois (filed September 2003);
(8) Paul v. American Express Company, et al., Superior
Court of Orange County, California (filed January
2004); and
(9) Ball v. American Express, et al., Superior Court of San
Joaquin, California (filed August 2004)
A final approval hearing was held in March 2005, and the Company
is awaiting the Court's decision.
AMERICAN EXPRESS: Asks NY Court To Dismiss Consumer Fraud Suit
--------------------------------------------------------------
American Express Company asked the United States District Court
for the Southern District of New York to dismiss the class
action, styled "Ross, et al. v. American Express Company,
American Express Travel Related Services and American Express
Centurion Bank."
The complaint alleges that American Express (AMEX) conspired
with Visa, MasterCard and Diners Club in the setting of foreign
conversion rates and in the inclusion of arbitration clauses in
certain of their cardmember agreements. The basis for these
allegations is the presence of an American Express lawyer at a
seminar where legal issues common to the financial services
industry were discussed. In-house financial institutions'
lawyers, including lawyers from American Express, attended the
meetings. The suit seeks injunctive relief and unspecified
damages. The class is defined as "all Visa, MasterCard and
Diners Club general purpose cardholders who used cards issued by
any of the MDL Defendant Banks...." American Express
cardholders are not part of the class.
AMERICAN EXPRESS: Asks NY Court To Dismiss Card Antitrust Suit
--------------------------------------------------------------
American Express Company asked the United States District Court
for the Southern District of New York to dismiss a class action
captioned "National Supermarkets Association, Inc., Mascari
Enterprises, Inc. d/b/a Sound Stations, and Bunda Starr Corp.
d/b/a Brite Wines and Spirits v. MBNA America Bank, N.A., MBNA
Corp., Citibank (South Dakota) N.A. and Citigroup,
Incorporated."
This lawsuit alleges that, by agreeing to issue American
Express-branded cards, MBNA and Citibank have conspired with the
Company in the alleged wrongful tying arrangement described in
the preceding paragraph. The Company stated in a regulatory
filing that it believes this lawsuit is without merit and is
contrary to the Department of Justice's successful efforts to
render unenforceable Visa's and MasterCard's rules that
prevented banks from issuing American Express-branded cards in
the United States. The Company also believes that this lawsuit
is susceptible to the same defenses available to the Company in
the direct actions filed against it. The Company has intervened
in this action and has filed a motion to have the case
dismissed.
The suit is styled "National Supermarket Association Inc. et al
v. MBNA America Bank, N.A. et al, case no. 1:04-cv-10318-GBD,"
filed in the United States District Court for the Southern
District of New York, under Judge George B. Daniels.
Representing the plaintiffs are:
(1) Eric James Belfi, Murray, Frank & Sailer, LLP, 275
Madison Avenue, Ste. 801, New York, NY 10016, Phone:
212-682-1818, Fax: 212-682-1892, E-mail:
ebelfi@murrayfrank.com;
(2) Blaine Howell Bortnick, Liddle and Robinson, LLP, 800
Third Avenue, 8th Floor, New York, NY 10022, Phone: 212
687-8500, Fax: 212 687-1505, E-mail:
bbortnick@liddlerobinson.com
(3) Gary B. Friedman, Noah L. Shube, Friedman & Shube, 155
Spring Street, New York, NY 10012, Phone: (212) 680-
5150, Fax: (212)-219-6446, E-mail:
garybfriedman@att.net
(4) Michael Goldberg, Glancy, Binkow & Goldberg L.L.P., 455
Market Street, Suite 1810 San Francisco, CA 94105
(5) Mark Reinhardt, Reinhardt, Wendorf & Blanchfield, E-
1250 First National Bank Building, 332 Minnesota
Street, St. Paul, MN 55101, Phone: (651) 297-2100
AMERICAN EXPRESS: AZ Court Refuses To Dismiss Consumer Lawsuit
--------------------------------------------------------------
The United States District Court for the District of Arizona
refused to dismiss the class action styled "Haritos et al. v.
American Express Financial Corporation and IDS Life Insurance
Company."
The suit is filed by plaintiffs who purport to represent a class
of all persons that have purchased financial plans from AEFA
advisors from November 1997 through July 2004. Plaintiffs allege
that the sale of the plans violates the Investment Advisers Act
of 1940 (the "IAA"). The suit seeks an unspecified amount of
damages, rescission of the investment advisor plans and
restitution of monies paid for such plans.
In June 2004, the Court denied the Company's motion to dismiss
the action as a matter of law. In February 2005, the Court
denied the Company's motion to dismiss the plaintiffs' Second
Amended Complaint.
The suit is styled "Haritos, et al v. American Express Fin, et
al, case no. 02-CV-2255," filed in the U.S. District Court for
the District of Arizona (Phoenix Division), under Judge Paul G.
Rosenblatt. Representing plaintiff John Haritos are:
(1) Robert C. Moilanen, Carolyn G. Anderson, Anne T. Regan,
Zimmerman Reed PLLP, 651 Nicollet Mall, Ste 501,
Minneapolis, MN 55402, Phone: (612)341-0400
(2) Barry Grant Reed, Hart Lawrence Robinovitch, Zimmerman
Reed PLLP, 14646 N Kierland Blvd, Ste 145 Scottsdale,
AZ 85254-2762, Phone: (480)348-6400
(3) Jon E. Drucker, Moss Gropen, Law Offices of Jon E
Drucker, 8306 Wilshire Blvd, #638 Beverly Hills, CA
90211, Phone: (323)931-6363
Representing the Company are:
(i) Eric Mogilnicki, Wilmer Cutler Pickering Hale & Dorr
LLP, 2445 M St NW, Washington, DC 20037-1420, Phone:
(202)663-6000
(ii) Robert S Stern, Esq, James P Maniscalco, Joseph T Hahn,
Morrison & Foerster LLP, 555 W 5th St, Ste 3500, Los
Angeles, CA 90013-1024, Phone: (213)892-5200
(iii) Peter K Vigeland, David W Bowker, Wilmer Cutler
Pickering Hale & Dorr LLP, 399 Park Ave, 31st Floor,
New York, NY 10022, Phone: (212)230-8800
(iv) William J Maledon, Esq, Jeffrey Bryan Molinar, Osborn
Maledon PA, PO Box 36379, Phoenix, AZ 85067-6379,
Phone: (602)640-9000
AZTAR CORPORATION: AZ Court Nixes Certification For Fraud Suit
--------------------------------------------------------------
The Superior Court of Maricopa County Arizona refused to grant
class certification for the lawsuit filed against Aztar
Corporation, arising from a $1 per day telephone surcharge
assessed to certain guests at check-in at the Tropicana Resort
and Casino in Las Vegas, Nevada and the Tropicana Casino and
Resort in Atlantic City, New Jersey (the "Tropicana Hotels").
The hotels are owned and operated by subsidiaries of the
Company.
Plaintiff, Aaron Dolgin, brings claims based upon:
(1) alleged violation of the Arizona Consumer Fraud Act;
(2) fraudulent advertising;
(3) breach of contract;
(4) breach of the implied-in-law covenant of good faith and
fair dealing; and
(5) unjust enrichment
The cause of action alleging fraudulent advertising has been
dismissed with prejudice. To the extent the complaint alleged
causes of action based upon the assessment of a telephone
surcharge by other properties owned and operated by subsidiaries
of the Company (exclusive of the Tropicana Hotels), those claims
have been dismissed without prejudice.
The plaintiff alleges that he was forced to pay the telephone
surcharge or lose his reservation deposit, whether or not he
intended to use the telephone in his room. The plaintiff claims
that he was in effect charged $1 extra per day for his hotel
room, thus rendering the advertised room rates misleading and in
breach of a contractual obligation to provide him a hotel room
for an advertised price that did not include the telephone
surcharge.
The plaintiff claims that the actual compensatory damages for
the purported class may exceed $3,000,000. The plaintiff also
claims, however, that further discovery and expert analysis is
needed to more accurately compute the amount of compensatory
damages plaintiff seeks on behalf of the purported class. The
plaintiff also seeks declaratory and injunctive relief, punitive
damages, pre- and post- judgment interest and attorneys' fees
and costs of suit.
The parties briefed the issue of whether this matter should be
certified as a class action. In an order dated February 28,
2005, the Court denied the plaintiff's motion to certify this
matter as a class action. As a result, only the plaintiff's
individual claims based on the single $1 telephone surcharge he
paid to the Tropicana Resort and Casino in Las Vegas, Nevada are
still pending. The possibility remains that the plaintiff may
appeal the denial of class certification.
BLUE CROSS: Enters Suit Settlement on Suit Over Tobacco Proceeds
----------------------------------------------------------------
Blue Cross and Blue Shield of Minnesota (Blue Cross) reports
that it entered a settlement agreement to end a class action
lawsuit that has been preventing the Company from launching its
plan to make Minnesota a healthier place to live and work. The
settlement agreement moves Blue Cross one step closer to
launching its tobacco proceeds spending plan as a result of its
1998 settlement with the tobacco industry.
The settlement between Blue Cross and the employer groups who
filed the class action received preliminary approval today from
a Dakota County court. It remains subject to final court
approval following notification of class members.
"When we sued the tobacco companies in 1994, we made the promise
that any funds we received would be used to benefit consumers by
improving the health of all Minnesotans. The court's preliminary
approval of the settlement agreement brings us a huge step
closer to fulfilling the pledge we made almost 11 years ago,"
said Mark W. Banks, MD, Blue Cross President and CEO.
The health plan had sued the tobacco industry for consumer fraud
and conspiracy. The Minnesota Department of Commerce, which
regulates health plans, and had jurisdiction over a portion of
the funds, approved the Blue Cross plan in 2002 to distribute
$30 million to fully insured Blue Cross groups and make other
health investments.
Today's agreement adds $11 million to funds to be distributed to
fully insured employer groups and for plaintiffs' attorneys fees
and costs. The additional funds will be taken out of prevention
and health improvement programs Blue Cross had proposed.
Preliminary approval by the court represents a significant
development toward releasing more than $400 million that Blue
Cross has earmarked for health improvement initiatives and other
health-related investment under the Healthier Minnesota plan.
Blue Cross received the money from the tobacco industry to
settle the consumer fraud and conspiracy lawsuit the health plan
filed against tobacco companies in 1994.
If the class action settlement receives final court approval,
Blue Cross will be able to move forward with the five-part plan:
(1) $30 million for community clinics serving the uninsured
and under-insured.
(2) $70 million will go to offset the deficit of the
Minnesota Comprehensive Health Association (MCHA). MCHA
provides health coverage to those who because of health
reasons aren't able to obtain coverage through other
channels. MCHA's deficit is underwritten by a tax on
insured health plans that are regulated by the state,
mainly small businesses. The Blue Cross contribution
will reduce the tax. Individual MCHA members are not
eligible for the distributions to individual Blue Cross
policyholders.
(3) $30 million will be distributed to approximately
200,000 fully-insured individuals and Medicare
Supplement members who had Blue Cross coverage on June
15, 2001.
(4) $41 million, less plaintiffs' attorneys fees and costs,
will be distributed to approximately 38,000 fully-
insured employer groups that had Blue Cross coverage at
any time from January 1, 1978 through June 15, 2001.
(5) $241 million will be invested in prevention and health
improvement programs to benefit all Minnesotans, which
we anticipate will save three dollars in future health
care costs for every dollar invested.
"By using these funds to make Minnesota a healthier place in
which to live and work, we will be improving people's lives and
keeping health care more affordable for everyone," said Mr.
Banks.
Blue Cross will begin notifying the eligible groups through
mailings and newspaper ads in June. Although the settlement
still needs the court's final approval, if there are no further
delays or legal challenges, all the funds could be distributed
to employers by late this year or early 2006. At the same time,
Blue Cross plans to distribute $30 million to individual and
Medicare Supplement policyholders who had Blue Cross coverage on
June 15, 2001, in accord with a Minnesota Department of Commerce
approved plan addressing the tobacco proceeds.
Details of the proposed settlement and Blue Cross' health
improvement initiatives are available at
http://www.bluecrossmn.com/public/healthandwellness/settlement.h
tml or on the Healthier Minnesota Tobacco Plan and Settlement
information line at 1 (866) 356-2426.
BROADCOM CORPORATION: Securities Suit Trial Set September 2005
--------------------------------------------------------------
Trial in the consolidated securities class action filed against
Broadcom Corporation and three of its executive officers is set
to begin in September 2005 in the United States District Court
for the Central District of California.
From March through May 2001, the Company and three of its
executive officers were served with a number of shareholder
class action complaints alleging violations of the Securities
Exchange Act of 1934, as amended. The essence of the
allegations was that the defendants intentionally failed to
disclose and properly account for the financial impact of
performance-based warrants assumed in connection with five
acquisitions consummated in 2000 and 2001, which plaintiffs
allege had the effect of materially overstating the Company's
reported and future financial performance.
In June 2001 the lawsuits were consolidated before the United
States District Court for the Central District of California
into a single action entitled "In re Broadcom Corp. Securities
Litigation." After denying the defendants' motion to dismiss
the complaint and a motion for partial summary judgment as to
some of the challenged disclosures, in October 2003 the court
issued an order certifying a class of all persons or entities
who purchased or otherwise acquired publicly traded securities
of the Company, or bought or sold options on the Company's
stock, between July 31, 2000 and February 26, 2001, with certain
exceptions. The parties have completed discovery.
In September 2004 defendants filed five motions for summary
judgment or partial summary judgment. Through an order issued
in November 2004, the court granted three of those motions for
partial summary judgment, granted in part and denied in part one
motion, and denied one motion. Plaintiffs have asserted that,
if liability is found, damages may exceed $4.5 billion (taking
into account the effect of the court's rulings granting partial
summary judgment in favor of the defendants), which the Company
vigorously disputes and believes to be substantially inflated.
The court has consolidated this action for trial with the
"Arenson, et al. v. Broadcom Corp., et al." matter described
below. In February 2005 the court scheduled trial to begin in
September 2005, ruled that the individual defendants were
asserting, and were entitled to assert, a defense of reliance
upon the advice of counsel, and reopened discovery concerning
that issue.
In February 2002 an additional complaint, entitled "Arenson, et
al. v. Broadcom Corp., et al.," was filed by 47 persons and
entities in the Superior Court of the State of California for
the County of Orange, against the Company and three of its
executive officers. The Company removed the lawsuit to the
United States District Court for the Central District of
California. The plaintiffs subsequently filed an amended
complaint in that court that tracks the allegations of the
federal class action complaint. The parties have completed
discovery.
In September 2004 defendants filed two motions for summary
judgment arguing that the plaintiffs had no damages or could not
adequately prove their damages. Through orders issued in October
and December 2004, the court denied one of those two motions and
granted the other motion as to 31 plaintiffs. By stipulation and
order entered by the court in January 2005, the parties agreed
that one of the dismissed plaintiff's claims could be reinstated
(subject to that plaintiff's agreement that its damages,
calculated in accordance with the court's prior orders, did not
exceed $745) but that five additional plaintiffs should be
dismissed because they did not incur any damages. Accordingly,
35 of the original 47 "Arenson" plaintiffs have been dismissed
and 12 plaintiffs remain. In addition, the parties stipulated
that the court's rulings on defendants' five motions for summary
judgment or partial summary judgment in the "In re Broadcom
Corp. Securities Litigation" class action are binding in the
"Arenson" matter. The court has consolidated this action
for trial with the "In re Broadcom Corp. Securities Litigation"
matter and has scheduled trial to begin in September 2005.
BURLINGTON RESOURCES: Trial in OK Gas Royalties Suit Set in 2005
----------------------------------------------------------------
Trial in the consolidated class action filed against Burlington
Resources, Inc. and its former affiliate, El Paso Natural Gas
Company, is expected to begin this year in the District Court of
Washita County, State of Oklahoma.
Two suits were initially filed, namely "Bank of America, et al.
v. El Paso Natural Gas Company, et al., Case No. CJ-97-68," and
"Deane W. Moore, et al. v. Burlington Northern, Inc., et. al.,
Case No. CJ-97-132." The suits were subsequently consolidated.
Plaintiffs contend that defendants underpaid royalties from 1982
to the present on natural gas produced from specified wells in
Oklahoma through the use of below-market prices, improper
deductions and transactions with affiliated companies and in
other instances failed to pay or delayed in the payment of
royalties on certain gas sold from these wells. The plaintiffs
seek an accounting and damages for alleged royalty
underpayments, plus interest from the time such amounts were
allegedly due. Plaintiffs additionally seek the recovery of
punitive damages.
The plaintiffs have not specified in their pleadings the amount
of damages they seek from the Company. However, through pre-
trial discovery, plaintiffs have provided defendants with
alternative theories of recovery claiming monetary damages of up
to $221 million in principal, plus $996 million in interest, and
unspecified punitive damages and attorney's fees.
The Company and El Paso Natural Gas Company have asserted
contractual claims for indemnity against each other. The court
has certified the plaintiff classes of royalty and overriding
royalty interest owners, and the parties are proceeding with
pre-trial discovery.
CALIFORNIA: Companies Propose Settlement in Music Club Lawsuit
--------------------------------------------------------------
Though it could put music publishers at a disadvantage, the mail
order record clubs Columbia House and BMG Direct proposed a
settlement in an ongoing class action suit with songwriters, the
Los Angeles Times reports.
The newspaper reports that the proposed settlement would no
longer require the record clubs to get permission first to sell
copy written music. Instead, they would merely post their
intentions online, and give the songwriters 30 days to object to
their music's usage.
Irwin Robinson, chief executive of Famous Music Publishing Cos.
and chairman of the National Music Publishers' Association,
express disappointment at proposed settlement and told the
Times, "This settlement turns the law on its head. When you
create art, it should be yours to keep unless you give
permission. It shouldn't be the artists' obligation to object."
Mr. Robinson along with other publishers plan to oppose the
settlement when it is officially presented in court on July 11.
According to BMG Direct, the proposed settlement will allow them
to greatly streamline the process of gaining rights from
songwriters. In a statement to the Times, BMG spokeswoman Paula
Batson said, "BMG Direct has always respected the rights of
music publishers and their copyrights and will continue to do
so. Publishers have the right to object to the use of their
songs on a club release and now under the settlement will have
additional technology to accomplish this quickly and easily."
Under the current law, music sellers are required to pay a
licensing fee to the songwriter. Traditionally, the record clubs
have paid songwriters about 75 percent of the legal requirement,
but helped extend the sales of albums beyond their retail life
span. In recent years, however, record clubs have added new
albums to their catalogs much sooner than in the past, which
according to publishers are actions that have negatively
affected their royalties.
The settlement would also allow for nearly $4 million from the
record clubs to be split up by songwriters and publishers whose
music was sold by the clubs after March 20, 1999. The publishing
rights issue though is what has divided the two sides.
Maxwell Belcher, attorney for the record clubs, told the Times,
"For years, the only way composers knew the clubs had used their
songs was they received a check in the mail. Now composers have
the ability to object. The settlement isn't perfect, but it's
the best we could do and a lot better than what the publishers
have let exist for decades."
Beebe Bourne of publisher Bourne Co. told the Times, "Its a huge
burden to make me check a website every day and hope I catch the
names of all of my artists. What is to stop the music club from
posting that they will pay only 15 percent of the legal rate? If
I miss that listing, we'll be out of luck with no right to sue."
Representatives for BMG Direct told the L.A. Times that they
intended to continue paying 75 percent of the statutory rate.
But they acknowledged that the proposed settlement would not
require them to do so.
CANADA: Crime Victim's Father Lodges Suit V. Federal Government
---------------------------------------------------------------
Jack McLaughlin, the father of a man who was beaten to death in
Winnipeg filed a class action lawsuit against the federal
government on behalf of all victims of crime, The CBC News
reports.
Mr. McLaughlin's 20-year-old son, Anthony, was killed after
getting into a bar fight in Winnipeg almost five years ago. The
man who killed him was sentenced to two years less a day in
jail, but served less than six months. According to him, the
federal government spends millions on prisons and programs for
criminals, but virtually ignores their victims. He adds that
victims of crime deserve compensation for the justice system's
failures.
He told CBC News, "What we're trying to do to the government is
say, 'Look. You either start keeping these people in jail for
reasonable times so that they're not reoffending, or if they're
deemed (likely) to reoffend, why are you letting them out? And
if you choose to let them out, then you have to be as
accountable as anybody else.'" In addition, he also told CBC
News, "All they ever talk about is how much they have to spend
on jails. But what they don't talk about is how much it really
costs society as a whole. We have a lot more victims out there
than we do criminals."
Mr. McLaughlin, who is working with a team of Winnipeg lawyers,
explains that his suit has the potential to become the largest
class action lawsuit in Canadian history, wherein every victim
of crime will be able to sign on to seek compensation.
COMPUCREDIT CORPORATION: Consumers Launch Suit V. Payday Loans
--------------------------------------------------------------
CompuCredit Corporation and five of the Company's subsidiaries
face a purported class action lawsuit filed in the Superior
Court of New Hanover County, North Carolina, entitled "Knox, et
al. vs. First Southern Cash Advance, et al, No 5 CV 0445."
The plaintiffs allege that in conducting a so-called "payday
lending" business, certain of the Company's Retail Micro-Lending
and Servicing segment subsidiaries violated various laws
governing consumer finance, lending, check cashing, trade
practices and loan brokering. The plaintiffs further allege that
the Company is the alter ego of its subsidiaries and is liable
for their actions. The plaintiffs are seeking damages of up to
$75,000 per class member.
CORE LABORATORIES: TX Court Refuses To Dismiss Securities Suit
--------------------------------------------------------------
The United States District Court for the Southern District of
Texas refused to dismiss the consolidated securities class
action filed against Core Laboratories NV and certain of its
officers.
In April 2003, four putative class action lawsuits were filed in
the United States District Court for the Southern District of
New York; these cases have since been consolidated and
transferred to the United States District Court for the Southern
District of Texas. On March 22, 2004, lead plaintiffs filed
their consolidated amended complaint, which generally alleges,
among other things, that the defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 by making false
and misleading statements about the Company's financial results
for 2001 and 2002 and by employing inadequate internal controls.
The amended complaint seeks unspecified monetary damages.
Defendants filed a motion to dismiss on May 21, 2004. On March
8, 2005, the Court denied without prejudice defendants' motion
to dismiss subject to Plaintiffs filing a Second Amended
Compliant that sets forth with particularity allegations that
meet the heightened pleading requirements of Federal Rule of
Civil Procedure 9(b) and the Private Securities Litigation
Reform Act of 1995. The order requires the Second Amended
Complaint to be filed by May 9, 2005 and requires the defendants
to answer or otherwise respond by July 8, 2005. If defendants
file a motion to dismiss the Second Amended Compliant,
plaintiffs shall have until August 22, 2005 to respond and
defendants shall have until September 12, 2005 to file a reply.
Discovery will remain stayed.
CRAY INC.: Hagens Beerman Launches Securities Fraud Suit in WA
--------------------------------------------------------------
Cray, Inc. (Nasdaq: CRAYE), a Seattle-based designer and
developer of high-performance computer systems, was hit with a
proposed class-action suit filed on behalf of investors. The
complaint charges Cray with hiding damaging information about
the Company's operational and financial problems while Cray's
executives sold $4.6 million in Cray shares at inflated prices.
Steve Berman, managing partner of Hagens Berman Sobol Shapiro
and lead attorney for the plaintiffs, filed the suit on May 24,
2005 in U.S. District Court in Seattle.
"We intend to show the leadership at Cray intentionally misled
investors through a well-orchestrated campaign of
misinformation," said Mr. Berman. "Their actions have hurt
thousands of individuals who should have had the benefit of the
same information that executives used when they sold their
stock."
According to the complaint, the defendants knew and concealed
several basic problems. Among these issues was the fact that
there were several unfavorable factors affecting the Company's
projected revenue. Cray had manufacturing problems and had
mismanaged many of its third-party contracts and flawed internal
policies had increased the unpredictability of Cray's revenue
reports.
The suit further states that Cray made false statements
regarding the financial status, stability and growth potential
of the Company. In several press releases, Cray announced
various quarterly results and forecasted revenues. The suit
claims that these statements were false and misleading to
investors because they were based on unstable factors, such as
prospective contracts; they misrepresented certain products and
their affect on the flow of revenue; and they belied the
Company's difficulty in managing a growing backlog of orders.
The complaint contends that the defendant's failure to disclose
its unreliable method of forecasting revenues and growth gave
investors an inaccurate sense of predictability of the
business's success.
Eventually, Cray's weaknesses were revealed, the suit states. On
February 3, 2005, the Company issued a press release alluding to
faulty accounting measures and internal controls, and an ever-
increasing backlog. As Cray made this and other disclosures over
the following months, the Company's stock sharply plummeted,
ending in a 35.6 percent loss on May 12, 2005.
"Investors were astounded when they finally learned of the
trouble Cray was in," Mr. Berman stated. "The Company's choice
to lie to investors and ignore basic problems in their business
model inevitably came to a head, and when it did, investors lost
millions."
The complaint charges the defendant with violating Rule 10(b)
and 20(a) of the Securities Exchange Act of 1934.
The proposed class action seeks to represent all those who
purchased shares of Cray stock at artificially inflated prices
from July 31, 2003 to May 12, 2005, and requests damages to be
awarded to the plaintiffs.
For more details, contact Steve Berman of Hagens Berman Sobol
Shapiro LLP by Phone: 206-623-7292 or by E-mail:
steve@hbsslaw.com OR Mark Firmani of Firmani & Associates, Inc.
by Phone: 206-443-9357 or by E-mail: mark@firmani.com.
DOWNEY FINANCIAL: Reaches Settlement for CA Overtime Wage Suit
--------------------------------------------------------------
Downey Savings and Loan Association reached a settlement for the
class action filed in Los Angeles Superior Court in California
by two of its former in-store banking employees, styled
"Michelle Cox and Mary Ann Tierra et al. v. Downey Savings and
Loan Association, case no. Case No. BC318964."
The complaint seeks unspecified damages for alleged unpaid
overtime wages, inadequate meal and rest breaks, and other
unlawful business practices and related claims. The plaintiffs
also seek class action status to represent all other current and
former California employees who held the position of branch
manager or assistant manager at in-store branches who were
treated as exempt and not paid overtime between July 23, 2000
and November 2002 and allegedly received inadequate meal/rest
periods since October 1, 2000.
At mediation in March 2005, the parties agreed to settle the
lawsuit. The settlement is subject to mutually acceptable
documentation and court approval.
ENOGEX INC.: Faces Gas Producers' Antitrust Lawsuit in OK Court
---------------------------------------------------------------
Enogex, Inc. faces a putative class action filed by G.M. Oil
Properties, Inc. in the District Court of Comanche County,
Oklahoma.
The petition alleges that the Company exercises a monopoly power
with respect to its gathering facilities within the state of
Oklahoma. The petition further alleges that, due to the alleged
monopoly power, the Company has caused damage to the plaintiff
and other small gas producers and marketers.
EQUINIX INC.: NY Court Preliminarily OKs Stock 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 the Company,
certain of its officers and directors and several investment
banks that were underwriters of the Company's initial public
offering (IPO).
Several cases were initially filed in the United States District
Court for the Southern District of New York, purportedly on
behalf of investors who purchased the Company's stock between
August 10, 2000 and December 6, 2000. In addition, similar
lawsuits were filed against approximately 300 other issuers and
related parties. The purported class action alleges violations
of Sections 11 and 15 of the Securities Act of 1933 and Sections
10(b), Rule 10b-5 and 20(a) of the Securities Exchange Act of
1934 against the Company and Individual Defendants. The
plaintiffs have since dismissed the Individual Defendants
without prejudice.
The suits allege that the underwriter defendants agreed to
allocate stock in the Company's IPO to certain investors in
exchange for excessive and undisclosed commissions and
agreements by those investors to make additional purchases in
the aftermarket at pre-determined prices. The plaintiffs allege
that the prospectus for the Company's IPO was false and
misleading and in violation of the securities laws because it
did not disclose these arrangements. The action seeks damages in
an unspecified amount.
On February 19, 2003, the Court dismissed the Section 10(b)
claim against the Company, but denied the motion to dismiss the
Section 11 claim. In July 2003, a Special Litigation Committee
of the Equinix Board of Directors 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 and the individual defendants currently or
formerly associated with those companies.
Among other provisions, the settlement provides for a release of
the Company and the Individual Defendants and the Company's
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. It is anticipated that any potential financial
obligation of Equinix to plaintiffs pursuant to the settlement,
of which such claims are currently expected to be less than $3.4
million, will be covered by existing insurance and we do not
expect that the settlement will involve any payment by the
Company. The Company has no information as to whether there are
any material limitations on the expected recovery by other
issuer defendants of any potential financial obligation to
plaintiffs from their own insurance carriers. The settlement
agreement has been submitted to the Court for approval. The
underwriter defendants have filed objections to the settlement
agreement.
On October 13, 2004, the Court certified a Section 11 class in
four of the six cases that were the subject of class
certification motions and determined that the class period for
Section 11 claims is the period between the IPO and the date
that unregistered shares entered the market. The Court noted
that its decision on those cases 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 the Equinix case. Until the settlement is finalized and
approved by the Court, or in the event such settlement is not
approved, the Company and its officers and directors intend to
continue to defend the actions vigorously.
GOLDMAN SACHS: Hires Firm To Defend V. NYSE Seatholder's Lawsuit
----------------------------------------------------------------
Goldman Sachs, which was sued over its role in advising the New
York Stock Exchange on its merger with Archipelago Holdings
Inc., hired the law firm of prominent antitrust attorney David
Boies to defend it in the civil suit, The Crain's New York
Business News reports.
As previously reported in the May 11, 2005 edition of the Class
Action Reporter, Bill Higgins, a longtime owner of a seat on the
New York Stock Exchange brought the lawsuit seeking class action
status against NYSE directors and Goldman Sachs, seeking an
injunction to stop the NYSE's proposed historic merger with the
electronic exchange and compensatory damages.
The suit, which was filed in New York State Supreme Court,
alleges that the deal is grossly skewed in favor of Archipelago
to the detriment of the 1,366 seat holders who collectively own
the NYSE. The seat holders charge the directors with a breach of
fiduciary duty for failure to act in the best interests of NYSE
members, while accusing Goldman Sachs of a conflict of interest
in acting as financial advisor to both parties.
Goldman is criticized in the suit for alleged conflicts. The
firm's bankers advised both the NYSE and Archipelago in the
merger, and Goldman owns a number of NYSE seats and is a major
shareholder in Archipelago. NYSE Chief Executive John Thain is
also a former senior Goldman executive.
Prominent securities law firm Grant & Eisenhofer, P.A., brought
the action jointly with the Philadelphia trial and appellate
firm Raynes McCarty. A person familiar with the matter says
Jonathan Schiller, managing partner at law firm Boies Schiller &
Flexner, is leading Goldman's defense.
GUAM: Judge Joaquin Manibusan Hears Legal Arguments in EITC Case
----------------------------------------------------------------
Federal Judge Joaquin Manibusan heard arguments to determine
whether a class action lawsuit related to the Earned Income Tax
Credit (EITC) should be dismissed, and whether the Attorney
General's Office should be sued along with the rest of the
government, which failed to pay the tax credit in recent years,
The Pacific Daily News reports.
Court documents reveal that Gov. Carl Gutierrez's administration
stopped paying the tax credit for the working poor in 1998,
calling it an unfunded federal mandate, and the current
administration continued the policy by denying taxpayers the
ability to claim it.
The government decision to deny the tax credit has triggered the
filing of three lawsuits that are currently making their way
through federal court: a class action lawsuit brought on behalf
of Christina Naputi and Marygrace Simpao, a class action lawsuit
brought on behalf of Julie Babauta Santos and a class action
lawsuit brought on behalf of Charmaine Torres.
As previously reported in the June 21, 2004 edition of the class
action reporter, acting governor Kaleo Moylan announced an
agreement to settle a class action lawsuit by Ms. Santos on the
government's failure to pay years of Earned Income Tax Credit
refunds to the island's thousands of low-income taxpayers. But,
that case stalled last November after Gov. Felix Camacho
challenged the settlement agreement in court.
Under that settlement, the local government would have been
required to put aside $20 million to pay 2004 tax credits in
full, and will continue to do so in future years. Taxpayers will
not see that money until after the tax filing season next year,
which ends April 15.
In the recent hearing, Judge Manibusan heard the government's
request to dismiss Ms. Torres' lawsuit, which asks the court to
force the government to give her and others the full amount of
the tax credit and to prevent the government from denying its
payment in the future. Attorney Daniel Benjamin represented the
governor's office during that hearing, while Assistant Attorney
General Steven Cohen represented the government as well as the
attorney general's office, which wants out of the case.
Assistant Attorney General Cohen argued before Judge Manibusan
that the attorney general should not be sued in the case because
he is not in a position to pay the tax credit even if the
plaintiffs win. According to him, the ability to pay the tax
credit rests in the hands of the governor, the Department of
Administration and the Department of Revenue and Taxation. "He
(the attorney general) renders advice, that's all he does. He
does not have the power to render a refund," Attorney General
Cohen adds.
Meanwhile, attorney Delia Lujan, who represented Ms. Torres,
countered that the attorney general's office, through legal
opinions, has prevented the government from paying the tax
credit. Ms. Lujan also contends that the attorney general
"injected himself into this action" when he signed last June's
settlement agreement in the Santos lawsuit.
One of Attorney General Benjamin's key arguments for dismissing
the case is that Ms. Torres did not exhaust all of the
administrative options available to her before bringing the case
to court. Judge Manibusan though pointed out that the tax
return did not allow taxpayers to claim the earned income
credit.
Attorney General Benjamin then countered that Ms. Torres still
should have tried to claim it by submitting a letter to Rev and
Tax or by attempting to file a separate tax form. He also adds
that the case should not be allowed to move forward as a class
action lawsuit.
Ms. Lujan argued that the completed tax forms were an attempt by
Ms. Torres to claim the tax credit and said the forms contain
all of the information the government needs to calculate the
amount of her earned income credit. She also adds that the
federal court rejected the government's request to dismiss the
Simpao case a couple of months ago and said the request to
dismiss the Torres case should also be rejected for the same
reasons.
Judge Manibusan told both side at the hearing that it is a
complicated issue that will take considerable research before he
issues his decision. "What seemed unclear this morning became
more unclear," he adds.
One of the reasons the Guam government eliminated the tax credit
is because it does not have access to Social Security money,
which is the funding source used to pay for the credits
elsewhere in the nation. Supplemental funding is important
because in many cases taxpayers receive more money from the tax
credit than they paid in taxes that year.
HENRY SCHEIN: Reaches Settlement For TX Consumer Fraud Lawsuit
--------------------------------------------------------------
Henry Schein, Inc. reached a settlement for a class action filed
against it and one of its subsidiaries in the District Court in
Travis County, Texas, entitled "Shelly E. Stromboe and Jeanne
Taylor, on Behalf of Themselves and all others Similarly
Situated vs. Henry Schein, Inc., Easy Dental Systems, Inc. and
Dentisoft, Inc., Case No. 98-00886."
The petition alleges, among other things, negligence, breach of
contract, fraud, and violations of certain Texas commercial
statutes involving the sale of certain practice management
software products sold prior to 1998 under the Easy Dental name.
In October 1999, the trial court, on motion, certified both a
Windows sub-class and a DOS sub-class to proceed as a class
action pursuant to Tex. R. Civ. P. 42. On October 31, 2002, the
Texas Supreme Court, on appeal, found that the trial court's
certification of the case as a class action was improper. The
Texas Supreme Court remanded the case to the trial court for
further proceedings consistent with its opinion. The trial
court ruled in the Company's favor on remand. As a result, only
certain individual claims asserted on behalf of the named
plaintiffs remained pending in the case as of the end of 2004.
Such claims were resolved in January 2005. By order dated April
7, 2005, the case was dismissed with prejudice as to all
plaintiffs based upon the settlement agreement.
HENRY SCHEIN: Plaintiffs Seek Higher Attorney Fees in Settlement
----------------------------------------------------------------
Plaintiffs filed an appeal seeking higher attorney's fees in the
settlement of the class action filed against Henry Schein, Inc.
in the Superior Court of New Jersey, Law Division, Morris
County, entitled "West Morris Pediatrics, P.A. and Avenel-Iselin
Medical Group, P.A. vs. Henry Schein, Inc., doing business as
Caligor, Case No. MRS-L-421-02."
The plaintiffs' complaint purported to be on behalf of a
nationwide class of all physicians, hospitals and other
healthcare providers throughout New Jersey and across the United
States. The complaint, as amended in August 2002, alleged
breach of oral contract, breach of implied covenant of good
faith and fair dealing, violation of the New Jersey Consumer
Fraud Act, unjust enrichment, conversion and promissory estoppel
relating to sales of a vaccine product in the year 2001. In
September 2004, the court denied class certification. As a
result, only certain individual claims asserted on behalf of the
two named plaintiffs remained pending in the case as of the end
of 2004. Such claims were settled in January 2005. Plaintiffs
applied to the court for an award of attorneys' fees and,
although a fee award was granted, have taken an appeal from that
decision seeking a higher fee. The matter is pending in the
Appellate Division.
ISRAEL: Tel Aviv Court Dismisses $4.56M Visa Cal Fees Complaint
---------------------------------------------------------------
The Tel Aviv District Court recently dismissed a $4.56 million
(NIS 20 million) class action suit against Visa Cal, The Haaretz
Daily reports.
The petitioners had claimed that Visa Cal charged illegal fees
on purchases made in foreign currencies using its credit cards.
According to them, when cardholders purchased in a foreign
currency other than dollars, the Company first converted the
purchase amounts into dollars, and then converted the dollars
into shekels. Visa Cal charged a fee on the conversions without
notifying customers.
The judge accepted the Company's position and ruled that for
technical reasons, the case could not be brought as a class
action suit. The court did not address the merits of the case
and also ordered the plaintiffs to pay $6,836.12 (NIS 30,000) in
court fees.
JACK SCHROLD: Agrees To Refrain From Operating Credit Business
--------------------------------------------------------------
An operator who charged consumers for services he did not
deliver and misrepresented customers' credit worthiness to the
credit reporting agencies has been banned for life from
operating a credit repair business. Settlement of the charges
also bars further violation of the Federal Trade Commission Act
and the Credit Repair Organizations Act (CROA), and requires the
defendant to pay $100,000 in civil penalties.
In 1999, Florida Attorney Jack Schrold settled charges that he
violated the FTC Act and CROA by making deceptive claims about
improving consumers' credit reports and requiring advance
payment for credit repair services. The court order settling
these accusations prohibited Schrold from saying he could
improve substantially consumers' credit reports by removing
accurate, but negative, information that was verifiable and not
obsolete, making false claims about the services he sold,
charging consumers before credit repair services were finished,
and violating CROA.
In 2004, at the FTC's request, the Department of Justice
initiated civil contempt proceedings against Mr. Schrold,
alleging that he was violating the 1999 order. He agreed to
settle the contempt allegations, and as a result of that
settlement the court has entered a modified order against him.
The court order requires him to pay $100,000 in civil penalties
and permanently bars him from:
(1) advertising, marketing, or selling any credit repair
service, or assisting others to do so;
(2) violating the FTC Act by representing directly or by
implication that he is able to improve substantially
consumers' credit reports by removing negative
information from them where such information is
accurate, verifiable, and not obsolete; and
(3) violating CROA.
The modified order also contains standard recordkeeping
provisions designed to assist the FTC in monitoring Schrold's
compliance.
Consumers should know that nothing you can do - or pay someone
to do - can legally remove negative information that is
accurate, verifiable, and not obsolete from your credit report.
Only time, a deliberate effort, and a plan to repay your bills
will improve your credit record. If your credit reports contain
inaccurate or incomplete information, however, you do have the
right to have that information corrected. This is something you
can do yourself. For information on disputing credit report
errors and other information about your consumer credit rights,
please visit the FTC's Web site at http://www.ftc.govor call
the 1-877-FTC-HELP (1-877-382-4357).
The Commission vote approving the filing of the modified order
was 5-0. The modified stipulated judgment and order for
permanent injunction and civil penalties was filed by the United
States Attorney's Office for the Southern District of Florida
and the Department of Justice's Office of Consumer Litigation,
at the request of the FTC, in the U.S. District Court for the
Southern District of Florida. It was entered by the court on
April 22, 2005. The matter was handled by the FTC's Midwest
Region.
Copies of the modified stipulated judgment and order are
available from the FTC's Web site at http://www.ftc.govand also
from the FTC's Consumer Response Center, Room 130, 600
Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works
for the consumer to prevent fraudulent, deceptive, and unfair
business practices in the marketplace and to provide information
to help consumers spot, stop, and avoid them. To file a
complaint in English or Spanish (bilingual counselors are
available to take complaints), or to get free information on any
of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-
382-4357), or use the complaint form at http://www.ftc.gov.The
FTC enters Internet, telemarketing, identity theft, and other
fraud-related complaints into Consumer Sentinel, a secure,
online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad. For more details,
contact Brenda Mack, Office of Public Affairs by Phone:
202-326-2182 or William J. Hodor, FTC Midwest Region - Chicago
by Phone: 312-960-5592 or visit the Website:
http://www.ftc.gov/opa/2005/05/schrold.htm.
KENNETH COLE: CA Employees Launch Suit For Overtime Violations
--------------------------------------------------------------
Kenneth Cole Productions, Inc. faces to overtime wage class
actions filed in California Superior Court in Los Angeles
County.
In 2004, a purported class action lawsuit was filed against the
Company on behalf of current or former store managers or
assistant managers. In 2005, a second purported class action
was filed on behalf of floor supervisors. In each lawsuit, the
plaintiffs allege, among other claims, that they worked hours
for which they were entitled to receive, but did not receive,
overtime compensation under California law. The lawsuits seek
damages, penalties, restitution, reclassification and attorneys'
fees and costs.
KENTUCKY: City of Lexington Asks Court To Reassess Berry Ruling
---------------------------------------------------------------
The city of Lexington is asking the full 6th U.S. Circuit Court
of Appeals to reconsider a ruling that would allow the alleged
victims of Ron Berry to sue the city in federal court, The
Lexington Herald-Leader reports.
Previously, a three-judge panel of the Court of Appeals had
ruled that former participants in the Micro-City Government
program who claim they were sexually and emotionally abused by
Mr. Berry can pursue claims against the city. The city filed
its appeal with the 12-member 6th U.S. Circuit Court of Appeals,
claiming that the three-judge panel erred when it said previous
class action lawsuits against the city were not properly
dismissed.
Court documents revealed that the participants allege that city
administrators and four previous mayors knew or should have
known that Mr. Berry was abusing children in the program for
disadvantaged youths. They further allege that the city
knowingly concealed Mr. Berry's conduct for political reasons.
In 2000, Mr. Berry was convicted of 12 counts of sodomy. He
started serving a three-year sentence at Green River
Correctional Complex in October 2002. Mr. Berry's victims filed
a series of lawsuits against the city starting in 1998. Two of
the lawsuits were settled for a total of $2.85 million, while
other class-action lawsuits followed but eventually were
dismissed.
The suits that were dismissed by the lower court were appealed
by the plaintiffs and eventually led to the ruling by the three-
judge panel. That panel decided that the first class action
lawsuit against the city was not properly dismissed because
other possible parties in the class action should have been
notified before the case was dismissed.
KNOXVILLE COLLEGE: Students Launch Suit Over Money Owed to Them
---------------------------------------------------------------
Approximately 100 students at Knoxville College launch a class
action lawsuit in Tennessee against the school and its President
Barbara Hatton, claiming that the school owes them money for
jobs worked on campus in 2003, The WATE.com, TN reports. In
addition the lawsuit also claims that Ms. Hatton used the
student money to "advance her personal power and individual
interests."
Through the years, teachers at the college have filed a number
of lawsuits about unpaid wages. The most recent suit was filed
earlier in May. Knoxville College began in 1875 and is now
known as a liberal arts work college, wherein students work to
help pay for their education. Currently, about 130 students are
enrolled. Tuition, room and board cost about $9,700 a year.
MICHIGAN: Ann Arbor Center Lodges ADA Suit V. City of Ypsilanti
---------------------------------------------------------------
The Ann Arbor Center for Independent Living initiated a class
action lawsuit under the Americans With Disabilities Act (ADA)
against the city of Ypsilanti in U.S. District Court in Detroit,
The Ann Arbor News reports.
The suit alleges that Ypsilanti officials failed to build curb
ramps in accordance with federal and Michigan building standards
during a multimillion-dollar resurfacing project, which included
sidewalks and intersections.
James Magyar, the center's president and CEO, told the Ann Arbor
News that disabled citizens are at risk for serious injury and
have been denied access to the city's buildings, programs and
activities. "If you are blind or in a wheelchair and the curb is
not cut to code, you have to travel in the street rather than in
the sidewalk, and that's not a good thing," Mr. Magyar adds.
According to the newspaper, the plaintiffs seek a court order to
reconstruct the existing intersections and sidewalks into
compliance. Additionally they wan the city to implement a
detailed oversight system to ensure future construction meets
requirements.
Jane Slider, a legal assistant for Ypsilanti City attorney John
Barr, told the newspaper that the city has not been served and
she could not comment on the lawsuit.
PATINA OIL: Faces Natural Gas Royalties Suit in CO State Court
--------------------------------------------------------------
Patina Oil & Gas Corporation faces a class action filed in the
District Court in Weld County, Colorado, styled "Jack Holman, et
al v. Patina Oil & Gas Corporation; Case No. 03-CV-09."
In January 2003, the Company was named as a defendant in a
lawsuit alleging that the Company had improperly deducted
certain costs in connection with its calculation of royalty
payments relating to the Company's Colorado operations.
In May 2004, the plaintiff filed an amended complaint narrowing
the class of potential plaintiffs, and thereafter filed a motion
seeking to certify the narrowed class as described in the
amended complaint. The Company has filed an answer to the
plaintiff's amended complaint.
PEROT SYSTEMS: Court To Rule on Striking of Suit Claims Appeal
--------------------------------------------------------------
The Third Appellate District of the California Court of Appeals
has yet to rule on plaintiffs' appeal of the striking of
monetary claims in the class action filed against Perot Systems
Corporation, alleging that it conspired with energy traders to
manipulate the California energy market.
This lawsuit, styled "Art Madrid v. Perot Systems Corporation et
al.," was filed in the Superior Court of California, County of
San Diego. The plaintiffs are seeking unspecified damages,
treble damages, restitution, punitive damages, interest, costs,
attorneys' fees and declaratory relief.
In September 2003, the Company filed a demurrer to the complaint
and an alternative motion to strike all claims for monetary
relief. In January 2004, the court granted the Company's
demurrer and did not grant the plaintiffs leave to amend their
complaint.
PEROT SYSTEMS: Asks TX Court To Dismiss Securities Fraud Lawsuit
----------------------------------------------------------------
Perot Systems Corporation asked the United States District Court
for the Northern District of Texas to dismiss the amended
consolidated securities class action filed against it, Ross
Perot and Ross Perot, Jr.
Eight purported class action lawsuits were initially filed,
alleging violations of Rule 10b-5, and, in some of the cases,
common law fraud. These suits allege that the Company's filings
with the Securities and Exchange Commission contained material
misstatements or omissions of material facts with respect to the
Company's activities related to the California energy market.
All of these eight cases have been consolidated in the Northern
District of Texas, Dallas Division in the case of "Vincent
Milano v. Perot Systems Corporation."
On October 19, 2004, the court dismissed the case with leave for
plaintiffs to amend. In December 2004, the plaintiffs filed a
Second Amended Consolidated Complaint. In February 2005, the
Company filed a motion to dismiss the Second Amended
Consolidated Complaint. The plaintiffs are seeking unspecified
monetary damages, interest, attorneys' fees and costs.
REGISTER.COM: NY Court Approves Consumer Fraud Suit Settlement
--------------------------------------------------------------
The Supreme Court of the State of New York approved the
settlement for the class action filed against Register.com, Inc.
by Brian Wornow, on behalf of himself and all others similarly
situated, in the Supreme Court of the State of New York,
alleging that the Company's SafeRenew program violates New York
law.
The Company's SafeRenew program was implemented in January 2001
on an "opt-out basis" to .com, .net and .org registrations
registered through the www.register.com website, and was
subsequently expanded to cover certain ccTLDs registered through
this website. Under the terms of its services agreement, at the
time a covered registration comes up for renewal, we attempt to
charge a registrant's on-file credit card a one year renewal fee
and, if the charge is successful, to renew the registration for
that additional one-year period.
The Company believes that the SafeRenew program was properly
adopted as an effort to protect its customers' online
identities. Plaintiff sought a declaratory judgment that the
SafeRenew program violates New York General Obligations Law
Section 5-903, and also asserted claims for breach of contract,
money had and received, and unjust enrichment. Plaintiff further
sought to enjoin the Company from automatically renewing domain
name registrations, an award of compensatory damages,
restitution, disgorgement of profits (plus interest), cost and
expenses, attorneys' fees, and punitive damages.
On September 6, 2002, the Company filed a motion to dismiss the
complaint in its entirety. On April 17, 2003, the Company's
motion was granted as to two counts (declaratory judgment and
breach of contract), but denied as to two other counts (unjust
enrichment and money had and received). On May 2, 2003,
Plaintiff filed a notice of appeal to the Appellate Division,
First Department of the two counts that were dismissed. On May
15, 2003, Plaintiff filed an amended complaint asserting new
causes of action against the Company for deceptive trade
practices in violation of New York General Business Law Section
349; conversion; and breach of the implied covenant of good
faith and fair dealing.
On June 9, 2003, the Company moved to dismiss Plaintiff's newly
asserted causes of action. On February 19, 2004, its motion to
dismiss the first, fourth and a fifth causes of action of
Plaintiff's amended complaint was granted. Plaintiff has
perfected an appeal from this ruling and on June 8, 2004 the
Appellate Division, First Department affirmed the dismissal of
all five counts. On July 30, 2004, the Company and the Plaintiff
entered into a settlement agreement, the terms of which were
subject to approval by the Court. In the second quarter of
2004, the Company recorded a provision of $1.4 million for the
settlement which it estimated to be its probable exposure net of
contributions to be made by its insurance carrier. The Court
granted final approval of the settlement agreement on January
24, 2005.
Pursuant to the settlement agreement, the Company agreed to set
up a fund of $2.0 million to be used to pay all properly
submitted refund claims to settlement class members as well as
Court-approved attorneys' fees and litigation expenses incurred
by class counsel. If the fund is oversubscribed during the
claims period specified in the settlement agreement, then the
Company agreed to contribute up to an additional $350,000 to
replenish the fund, after which contribution, if any, the
Company has no additional obligation to contribute to the fund.
As anticipated, the Company's initial contribution to the fund,
net of contributions made by its insurance carrier, will be
approximately $1.4 million.
SBC COMMUNICATIONS: DC Appeals Court Reinstates Retirees' Suit
--------------------------------------------------------------
The Court of Appeals for the District of Columbia Circuit ruled
that two retirees from SBC Communications, Inc. could pursue a
class action on behalf of certain SBC early retirees.
According to attorneys with Cohen, Milstein, Hausfeld & Toll,
the affected class members retired early pursuant to the
Enhanced Pension and Retirement Program ("EPR") that was offered
by SBC in the fall of 2000 to participants in the SBC Pension
Plan Non-bargained Program. Plaintiffs believe there are more
than 6,000 affected people who may have suffered an aggregate
loss of approximately $30 million dollars as a result of the
conduct challenged in the lawsuit.
The EPR Retirees covered by the proposed class are those who
accepted a so-called "enhanced grandfathered benefit" under the
terms of SBC's pension plan. The enhanced grandfathered benefit
was to be calculated in the same manner as the grandfathered
benefit available to certain long-term employees using the
formula of the SBC's traditional defined benefit plan based on
age, years of service, and average compensation over a five-year
averaging period. Only a subset of SBC employees could obtain
this benefit: for most employees, the Pension Plan had been
converted from a traditional defined benefit plan to a cash
balance pension plan.
The case was reinstated because the Court of Appeals held that
the Complaint sufficiently stated a claim that the EPR retirees
receiving the "enhanced grandfathered benefit" were
discriminated against as compared to retirees receiving the
ordinary "grandfathered benefit" under the plan. The Court said:
it is patently unreasonable for the Committee and other Plan
officials who are authorized to administer the Plan to interpret
the Plan in a manner that discriminates against plaintiffs in
direct contravention of the Plan's plain language.
Specifically, the Complaint alleged that in calculating the
pensions for the class members, the Plan was interpreted to omit
pay earned during the last pay period used to determine average
compensation. By contrast, ordinary "grandfathered" retirees
were treated more favorably; their average compensation for
pension calculation purposes was, according to the Complaint,
calculated using all of the compensation they earned during the
Plan's five-year averaging period.
According to Cohen, Milstein, Hausfeld & Toll attorney Marc
Machiz, co-lead counsel for the plaintiffs, "The Court's
decision is a terrific victory for a large group of early
retirees who we believe were shortchanged in their total pension
distributions by approximately $30 million dollars. This
decision reinstates the Complaint and sends it back to the trial
court. There we expect to be able to prove that the Plan treated
these early retirees less favorably than regular retirees in
violation of their Pension Plan. We'll be looking for the full
story of how that discrimination came about."
The Plan argued that the allegations of the Complaint, if true,
established "only that the Plan's record keeper which performs
ministerial functions as the mathematical calculation of pension
benefits, mistakenly paid certain Plan participants more then
they were entitled to under the Plan." But the Court disagreed,
because Plaintiffs alleged that the discrimination "was the
result of deliberate decisions made by officials responsible for
the administration of the Plan, not to ministerial errors."
Interested persons can contact plaintiffs' lawyers at
sbclitigation@cmht.com.
SPAM ZOMBIES: FTC, Gov't Partners Step Up Anti-Spam Campaign
------------------------------------------------------------
The Federal Trade Commission (FTC) and 35 government partners
from more than 20 countries have targeted the technology trick
used by illegal spammers to tap into consumers' home computers
and use them to send millions of pieces of illegal spam.
Spammers use hidden software that allows them to hijack
consumers' home computers and route spam through them. By
routing their emails through "zombie" computers, the spammers
are able to hide the true origin of the spam from consumers and
make it more difficult for law enforcement to find them.
Consumers often do not discover that they, themselves, have been
sending spam.
The FTC and its partners today announced "Operation Spam
Zombies," an international campaign to educate Internet Service
Providers and other Internet connectivity providers about
hijacked, or "zombie" computers that spammers use to flood in-
boxes here and abroad. Twenty members of the London Action Plan,
an international network combating spam, and 16 additional
government agencies who will participate in Operation Spam
Zombies will send letters to more than 3,000 ISPs around the
world, urging them to employ protective measures to prevent
their customers' computers from being hijacked by spammers. The
measures include:
(1) blocking a common Internet port used for e-mail when
possible;
(2) applying rate-limiting controls for e-mail relays;
(3) identifying computers that are sending atypical amounts
of e-mail and take steps to determine if the computer
is acting as a spam zombie. When necessary, quarantine
the affected computer until the source of the problem
is removed;
(4) providing plain-language information for customers on
how to keep their home computers secure; and
(5) providing or pointing their customers to easy-to-use
tools to remove zombie code if their computers become
infected.
The next phase of the operation will be to identify likely spam
zombies around the world as well as the providers that operate
the networks that are hosting them. The partners will then
notify these providers of the problem and urge them to implement
corrective measures.
"Computers around the globe have been hijacked to send unwanted
e-mail," said Lydia Parnes, Director of the FTC's Bureau of
Consumer Protection. "With our international partners, we're
urging Internet Service Providers worldwide to step up their
efforts to protect computer users from costly, annoying, and
intrusive spam `zombies.'"
The FTC has created a Web page,
http://www.ftc.gov/bcp/conline/edcams/spam/zombie/index.htm,for
this project. It includes a summary of the project, the letter
that the FTC and its partners are sending to ISPs, and a list of
participating agencies from around the world. The partners also
will post translations of the ISP letter on this Web site and
post other updates concerning this project.
The FTC, Department of Commerce, Department of Homeland Security
and 33 agencies from Albania, Argentina, Australia, Belgium,
Bulgaria, Canada, Colombia, Cyprus, Denmark, Germany, Greece,
Ireland, Japan, Korea, Lithuania, Malaysia, Netherlands, Norway,
Panama, Peru, Poland, Spain, Switzerland, Taiwan, and the United
Kingdom have joined in this project.
This year's campaign follows two similar campaigns targeting
other spam anonymizing techniques: "Operation Secure Your
Server" (2004) and a campaign against "open relays" (2003).
The FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them. To
file a complaint in English or Spanish (bilingual counselors are
available to take complaints), or to get free information on any
of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1-877-382-4357), or use the complaint form at
http://www.ftc.gov.The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of
civil and criminal law enforcement agencies in the U.S. and
abroad. For more details, contact Jen Schwartzman or Claudia
Bourne Farrell of the Office of Public Affairs by Phone:
202-326-2674 or 202-326-2181 or contact Markus Heyder or Don
Blumenthal, Bureau of Consumer Protection by Phone: 202-326-2644
or 202-326-2255, or visit the Website:
http://www.ftc.gov/opa/2005/05/zombies.htm.
TENET HEALTHCARE: Reaches Settlement For CA Consumer Fraud Suit
---------------------------------------------------------------
Tenet Healthcare Corporation reached a nationwide settlement for
the class action filed against it and certain of its
subsidiaries in California state court, alleging that the
plaintiffs paid unlawful or unfair prices for prescription drugs
or medical products or procedures at hospitals or other medical
facilities currently or formerly operated by the Company's
subsidiaries.
On March 14, 2005, the Company received preliminary court
approval for the settlement that should be nationwide in effect.
As part of the settlement, the Company made no admission of
wrongdoing and we continue to vigorously deny the allegations
made by plaintiffs in these actions. The settlement has two
primary components - injunctive relief governing the Company's
conduct prospectively for a period of four years; and
retrospective relief, including restitution and discounting of
outstanding unpaid bills, for covered patients who were treated
at the Company's hospitals during the settlement class period
(June 15, 1999 to December 31, 2004). The Company has also
agreed to make a $4 million charitable contribution to a health-
care-related charity specified by plaintiffs' counsel.
The Company continues to face similar lawsuits in Tennessee,
Louisiana, Florida, South Carolina, Pennsylvania, Texas,
Missouri and Alabama.
TENET HEALTHCARE: Wage, Hour Suits Coordinated in CA State Court
----------------------------------------------------------------
The two wage and hour lawsuits filed against Tenet Healthcare
Corporation have been coordinated in the Los Angeles Superior
Court in California.
The suit alleges that the Company's hospitals violated certain
provisions of the California Labor Code and applicable
California Industrial Welfare Commission Wage Orders with
respect to meal breaks, rest periods and the payment of
compensation for overtime and meal breaks and rest periods not
taken. Plaintiffs seek to certify this action on behalf of
virtually all non-exempt employees of the Company's California
subsidiaries.
The Company said in a regulatory filing that it will argue that
certification of a class in the action is not appropriate
because the Company's uniform policies comply with the
applicable Labor Code and Wage Orders. In addition, it is the
Company's position that each of these claims must be addressed
individually based on its particular facts and, therefore,
should not be subject to class certification.
VEECO INSTRUMENTS: Shareholders Launch Securities Lawsuits in NY
----------------------------------------------------------------
Veeco Instruments, Inc. faces ten putative class action
shareholder lawsuits filed in the United States District Court
in the Southern District of New York and in the Eastern District
of New York asserting claims for violation of federal securities
laws on behalf of persons who acquired the Company's securities
during the period beginning November 3, 2003 or April 26, 2004
and ending February 10, 2005. The lawsuits also name as
defendants its Chairman and Chief Executive Officer, and its
Executive Vice President and Chief Financial Officer.
The lawsuits allege claims against all defendants for violations
of Section 10(b) of the Securities Exchange Act of 1934 and
claims against the individual defendants for violations of
Section 20(b) of the Exchange Act.
Although these proceedings are in the preliminary stages, the
Company expects that these lawsuits will be consolidated into a
single action in which an amended and consolidated complaint
will be filed.
VORNADO OPERATING: DE Court Approves Shareholder Suit Settlement
----------------------------------------------------------------
The Delaware Court of Chancery approved the settlement of the
class action shareholder derivative lawsuit filed against
Vornado Realty, LP, Vornado Operating Company and its directors.
The lawsuit sought to enjoin the dissolution of Vornado
Operating, rescind the previously completed sale of AmeriCold
Logistics (owned 60% by Vornado Operating) to Americold Realty
Trust (owned 60% by the Company) and damages. In addition, the
plaintiffs claimed that the Vornado Operating directors breached
their fiduciary duties.
On November 24, 2004, a stipulation of settlement was entered
into under which the Company agreed to settle the lawsuit with a
payment of approximately $4.5 million or about $1 per Vornado
Operating share or partnership unit before litigation expenses.
On March 22, 2005, the Court approved the settlement.
Asbestos Alert
ASBESTOS LITIGATION: Spodden Valley Pathway Closed Due to Risks
----------------------------------------------------------------
Acting under emergency powers reserved for contaminated land,
Rochdale Council closed Woodland Road, a portion of the site of
an old Turner and Newall asbestos mill.
MMC Developments and Countryside Properties, who plan to turn
part of the valley into a home estate and children's nursery,
applied for council approval of the closure between Rooley Moor
Road and Dell Road to stop residents straying on to the land.
They said it was necessary for public safety. The road will be
closed for 19 months.
On a routine inspection, MMC discovered an area where land had
been unofficially removed from the site. However, a spokesman
denied that that was any asbestos exposed in the air. He said
that the Company continually checks capped areas weekly to guard
against any soil erosion that could expose asbestos.
Campaigners from a group against the proposed development, Save
Spodden Valley, said that they had not deliberately removed any
soil. But the group claimed that there has been exposed asbestos
on the site since at least September 2004.
Using new freedom of information laws, they say they found a
letter written by an MMC employee on September 10, 2004, which
cites six examples of exposed and visible asbestos above the
ground. They claim the letter lists examples of asbestos
insulation board, asbestos sheets, asbestos cloth and asbestos
fiber all visible to the naked eye in areas across the valley.
Save Spodden Valley has also obtained a draft report, prepared
in May 2004 by Rochdale council, confirming that land to the
north of the valley is contaminated.
Ian Kelley, managing director for Countryside Properties said
that the Company has no intention to develop the northern zone
where asbestos is known to exist.
"The developable area of the site has been investigated as
outlined in the environmental impact assessment. Over 80 tests
have been conducted and the report indicates that in this
specific area no major asbestos related concerns are present,"
Mr. Kelley said.
Mr. Kelley added that the Company's findings would soon be made
public through the appropriate channels.
ASBESTOS LITIGATION: Jurors Award $500T in Madison County Trial
---------------------------------------------------------------
Jurors at Madison County's first asbestos trial in two years
ruled in favor of an asbestos-disease victim, Willard King, and
his wife. They awarded a total of US$500,000 after deliberating
nearly nine hours in over two days.
Mr. King, aged 78, of Fenton, Mo., accused Bondex and Georgia-
Pacific, for causing his illness. He specified exposure from
working with a joint sealer and acoustic ceiling spray
containing asbestos on a home remodeling project in the early
1970s.
Mr. King, who is represented by Barry Julian of Alton and Troyce
Wolff of Texas, was diagnosed with mesothelioma on May 5, 2004.
Mr. King was too ill with terminal cancer to attend the trial.
The jury instead heard his testimony and cross-examination on
videotape recorded last fall. He and his wife were seeking a
total US$10 million in damages and US$40 million in punitive
damages.
Mr. King cannot remember the names of the products he used. But
his wife and daughter said they remember a product called Bondex
and a product made by Georgia Pacific. RPM, a paper Company,
owns the Bondex Corp.
The companies' lawyers mounted a defense that questioned whether
Mr. King used their products and whether he had enough exposure
to asbestos to cause his cancer.
Bondex International Inc. and its parent Company, RPM Inc., must
pay the judgment. The jury levied no punitive damages. Georgia-
Pacific however, was excused from liability in this case.
Jeff Hebrank of the Burroughs Firm in Edwardsville represented
Bondex and Georgia Pacific. Mark Phillips of Nelson Mullins in
Columbia, S.C. assisted Hebrank with the Georgia-Pacific
defense, and John Wendler, also of Burroughs, assisted with the
Bondex defense.
Mr. King was awarded a total of US$380,800 with the damages
broken down as follows:
(1) Loss of a normal life US$59,600;
(2) Pain and Suffering US$59,600;
(3) Emotional Distress US$59,600; and
(4) Medical Care and expenses US$202,000
To his wife, Elizabeth King, they awarded US$59,600 for loss of
services and US$59,600 for loss of companionship. This amounted
to US$119,200.
The Madison County Circuit Court has a national reputation for
asbestos litigation, but trials are rare. Hundreds of
mesothelioma suits are settled annually; most settlements are in
the US$3 million to US$5 million range.
ASBESTOS LITIGATION: Texas Governor Signs Asbestos Bill Into Law
----------------------------------------------------------------
Governor Rick Perry last week signed the Asbestos Lawsuit Reform
Bill, a legislation that limits asbestos lawsuits by requiring
those filing claims to pass medical criteria before the lawsuits
can proceed.
State Sen. Kyle Janek and Rep. Joe Nixon, Houston Republicans
who sponsored the bill, joined Gov. Perry at the signing
ceremony. Supporters say the law will weed out frivolous cases
to make room for those with serious asbestos-related health
problems.
The governor wants to make sure that people sickened by asbestos
exposure will have their day in court. He said the goal is also
to reduce "junk lawsuits" that he says have forced dozens of
innocent employers into bankruptcy.
Under the law, only those who have serious illnesses caused by
inhaling asbestos and silica would be allowed to sue companies
that made products containing those materials. The legislation
calls for a pulmonary function test, which measures breathing
and lung capacity.
It also expands time limitations for filing such lawsuits so
people who have been exposed to asbestos or silica fibers but
aren't yet ill can sue later on if they get sick. Those exposed
to asbestos will have two years after they meet the medical
criteria to file a lawsuit.
Critics say the plan will limit the ability of people injured by
asbestos exposure to hold companies accountable. Texas Watch, a
consumer advocate group that has criticized the measure for
failing to ensure asbestos victims will receive compensation,
called the new law "special interest, insurance industry-backed
asbestos legislation."
Texas ranks fifth in the nation in asbestos-related deaths. As
of December 2000, more than 600,000 asbestos-related lawsuits
costing US$54 billion had been filed in the United States,
according to a RAND Institute study.
ASBESTOS LITIGATION: Asbestos Spill Causes Alarm in South Africa
----------------------------------------------------------------
Due to the threat of public exposure, a huge asbestos spill at a
Durban road junction in South Africa raised concerns about the
transport of asbestos by road, The Mercury reports.
Authorities immediately put up a safety cordon more than 4 km.
long after a truck carrying 20 tons of chrysotile asbestos had
veered into an embankment and overturned, spilling its contents
over a distance of about 500 meters on the M7 near Bellair Road.
Further increasing the risks were the size of the spill, the
winds in the area and the danger of motorists driving through
the spill and spreading it.
Unable to immediately identify the asbestos, the first two
officers on the scene took no precautions and failed to wear
masks. The signage on the truck was reportedly in Portuguese.
The policemen were said to be suffering from serious signs of
exposure such as headaches, breathing difficulties and profuse
sweating.
As soon as asbestos was identified, all emergency staff were
decontaminated and medically examined as a matter of precaution.
The eThekwini fire department and Drizit Environmental Spill
Response were also called to the scene.
Drizit spokesperson Flynn Padayachee said, "The primary task was
the containment and the secondary task is now the recovery of
the product."
Authorities insisted that there was no need for alarm because
the spill was well contained. They maintained that raw asbestos
powder could only be dangerous after long-term exposure. They
advised motorists who passed the area during the spill to dust
their vehicles off with a brush.
However, members of the public and environmental activists
expressed their concerns. Earthlife said asbestos was dangerous
and a cause for concern. Spokesperson Bryan Ashe said more
caution was needed if asbestos was to continue to be transported
through the harbor.
ASBESTOS LITIGATION: Senate Group Rejects Asbestos Study Plan
-------------------------------------------------------------
Members of the Senate Judiciary Committee rejected an amendment
to restore liability coverage for workers who were exposed to
asbestos for more than 15 years, smoked and developed lung
cancer. They also shot down the idea to commission a study with
the Institute of Medicine "to determine whether there is a
causal link between asbestos exposure and lung cancer for
individuals who have had substantial exposure to asbestos but
have no evidence of bilateral pleural disease or of asbestosis."
The Committee, led by its chairman Sen. Arlen Specter, seeks to
establish a bill that would create a US$140 billion industry-
financed trust fund for asbestos victims, ending litigation
claims.
The author of the amendment, Sen. Edward M. Kennedy, D-Mass.,
blasted the Committee members for being unwilling to study the
link between asbestos exposure, smoking and lung cancer because
the result may be too costly to be covered by the US$140 billion
asbestos trust fund bill. He said there is scientific evidence
showing that people who smoke and were exposed to asbestos are
55 times more likely than other smokers to develop lung cancer.
"... If it is a scientific issue, let's get the best science and
let the researchers make a judgment decision. If you don't, you
are making a decision in this committee that those people are
going to be denied help and assistance and they are suffering,
suffering, suffering," said Sen. Kennedy, who added that the
bill was seriously flawed.
The bill as written would allow only non-smoking asbestos
workers who meet certain elevated requirements for exposure and
residents of Libby, Mont., where W.R. Grace owned an asbestos-
contaminated vermiculite ore mine to file claims.
Sen. Kennedy argued that W.R. Grace also owned a factory in
Easthampton as well as 200 locations across the country. The
closed Zonolite plant in Easthampton made attic insulation from
the contaminated vermiculite that was shipped into Easthampton
from the Montana mine. The plant operated between 1964 and 1983.
The Easthampton site received 258,000 tons of the contaminated
ore, according to the Environmental Working Group, a Washington,
D.C.-based watchdog.
The bill, as currently written, Sen. Kennedy said, wouldn't
allow Easthampton residents, including those who lived in the
area of the factory on Wemelco Way, to file a claim for a
suspected asbestos-related disease or any of the people who
lived in the cities and towns of the other 200 locations.
Sen. Kennedy said he plans to introduce an amendment to give
coverage to Easthampton residents and he will work with U.S.
Sen. Lindsey Graham, R-S.C., who is drafting an amendment to
have residents of all the locations covered by the liability
bill.
ASBESTOS LITIGATION: Inquest Reveals Builder Died from Exposure
---------------------------------------------------------------
An inquest revealed that a retired builder died because of
exposure to asbestos throughout his working life.
John Dickerson, aged 73, started working for building firms in
1947, before becoming a self-employed builder in 1970. He died
at his home in Lakeside Avenue, Long Eaton on April 7, 2005.
South Derbyshire deputy coroner Dr. Turlough Farnan said that
Mr. Dickerson suffered from malignant mesothelioma. He
discovered tiny fragments of asbestos lodged in the lungs. Dr.
Farnan recorded a verdict that he died from an industrial
disease.
ASBESTOS LITIGATION: Group Calls for Legal Reforms to Hit Firms
---------------------------------------------------------------
At a conference for asbestos victims' families and solicitors,
calls for the enactment of legal reforms to target companies,
which risk their employees' health by exposing them to asbestos,
resounded amidst the predicted rise of asbestos-related
diseases.
Charles Hill QC said these reforms were needed to make it easier
to obtain a remedy against these construction and shipbuilding
companies. Court actions for those afflicted by occupational
diseases are at a risk of being thwarted by a range of legal
hurdles including establishing who was responsible for the
asbestos and whether the threat was realized at the time the
exposure happened.
Mr. Hill told the conference that legal precedents in places
such as South Africa needed to be replicated in Northern Ireland
and politicians needed to consider changes.
He said, "The experience has been that it is very difficult to
get Westminster MPs interested in law reform and even the
government found it difficult to get the legislation through but
it is time for some areas of law to be reformed. I think it
should be dealt with by law reform where these companies should
be made more amenable by the sufferer in some way."
In 2004, 54 people died from mesothelioma, the most deadly
asbestos disease, and around 100 people die every year from
asbestos-related-diseases and the death toll is expected to
increase until 2025.
The Justice for Asbestos Victims Group, which organized the
conference, claimed that Northern Ireland's asbestos legacy
arises from its shipbuilding industry at Harland and Wolff, its
numerous power stations, including Kilroot and Coolkeragh, its
building industry and other allied trades where asbestos
materials where utilized. The group said it aimed to change "the
appalling lack of local services and information available to
victims."
ASBESTOS LITIGATION: ACC Appeals Lump Sum Award to Former Welder
----------------------------------------------------------------
New Zealand's Accident Compensation Corporation seeks to
overturn a Wellington Court decision, which ordered it to pay a
lump sum of $100,000 to the estate of welder Ross Lehmann, who
was afflicted with asbestos-related lung cancer and died in
November 2003. This August 2004 decision paved the way for those
exposed to asbestos before April 2002 to be given lump sum
compensation.
At the hearing at Wellington High Court earlier this week,
Justice Lowell Goddard reminded John Miller, Mr. Lehmann's
lawyer, that the ACC's appeal against a District Court ruling
last August that awarded the $100,000 lump sum payment was
strictly about interpreting the statute.
ACC opposed the ruling, arguing that the law did not allow it to
make payouts to people exposed to asbestos before April 2002.
ACC had told those who were paid lump sums to put the money
aside pending the result of the appeal.
ACC said he was entitled only a $67.72 weekly independence
allowance, which Mr. Miller says, is an insult.
Mr. Lehmann's widow, Dawn Lehmann, argued that eligibility
should be determined when someone was diagnosed, even if that
was after April 2002 and they had been exposed years earlier.
In 1960, Mr. Lehmann, a fitter and welder, helped install a new
boiler and asbestos-laden piping at the NZ Forest Products Plant
in Penrose. He was diagnosed in 2003.
ACC spokesman Fraser Folster said ACC knew how important the
case was and was financing both sides of the court case. He
said, "The law needs to be clarified urgently so dozens of
potential claimants for workplace asbestos diseases are left in
no doubt whether they can receive lump sum payments."
Wellington lawyer Hazel Armstong, who is also acting for 10 lump
sum recipients, said that without the money, asbestos victims
and their families were left with little to cover the expense of
coping with the fatal disease. She also represented the families
of five men who died from asbestos-related diseases. All five
had applied for lump sum compensation, but died before being
assessed.
Justice Goddard chose to reserve her decision on ACC's appeal
against this test case decision.
ASBESTOS LITIGATION: Problems Hit Asbestos Removal Project in IN
----------------------------------------------------------------
After initially expecting to spend no more than US$8 million and
finish within five years, cost overruns have temporarily put a
stop to asbestos removal at Lake County's government center.
Councilman Larry Blanchard, R-Crown Point, is also now doubting
the reliability of the air-quality testing conducted to assure
the program's effectiveness.
Removal at the government center began during the late 1980s in
the County Jail when a federal court ordered it for the benefit
of inmates. The work was extended during the late 1990s and the
early part of this decade through the court and administrative
buildings.
Having spent about US$12 million in more than 15 years, Lake
County officials were flooded with complaints about county
employees' health being put at risk during asbestos work. The
project was stopped last year after property tax bills raised
the public's ire about any discretionary spending.
Mr. Blanchard said the Company testing for asbestos fiber
concentrations is too closely connected to John Blosky,
president of Amereco Inc., a Valparaiso-based firm, overseeing
asbestos work. He further suggested that commissioners should
try competitive bidding to see if other companies could do the
work for less money.
Mr. Blosky had said earlier, "We test the air quarterly to meet
OSHA regulations. The air quality is fine when it comes to the
fiber concentration. Occasionally we will find asbestos fibers
in the dust from the fireproofing on the decking of the
building. The EPA says there is no safe level. The levels they
have are the same you would find in a school building."
ASBESTOS LITIGATION: Vit. E Derivative Halts Tumor Growth, Study
----------------------------------------------------------------
A Vitamin E-related compound can halt the growth of tumors
caused by asbestos exposure, said an Australian cell biologist,
the AAP reports.
Mesothelioma, an aggressive cancer that destroys the protective
membrane covering internal organs including the lungs, afflicts
those exposed to asbestos fibers. The disease remains dormant
for about 20 to 30 years before exhibiting symptoms. It
currently has no cure.
Gold Coast-based Griffith University researcher Jiri Neuzil said
alpha-TOS, which is closely related to Vitamin E, has already
proven its success in trials using mice. The five-year study,
which also involved researchers from Italy and the Czech
Republic, had also shown hints of suppressing breast cancer,
melanoma, lung cancer and colon cancer tumors in animal
experiments.
Dr. Neuzil said alpha-TOS would ultimately be put to the test in
human trials, which he hoped to begin within two years. He
considers it promising but he also admitted that in the past,
many experiments showing promise in mice have failed in humans.
Alpha-TOS was "selective" because it pursued mesothelioma cancer
cells but caused only minor damage, if any, to normal cells in
mice. Dr. Neuzil also said alpha-TOS was orally ingested by
humans as a health supplement but lost its promising anti-cancer
quality because the digestive system converted it to Vitamin E.
To prevent this conversion, he said alpha-TOS had to be
administered intravenously so it could reach tumors with its
anti-cancer feature intact.
Dr. Neuzil said he didn't know if the medical industry would
take on alpha-TOS as a cancer cure because it couldn't be
patented.
ASBESTOS LITIGATION: OH Plant Workers Show High Rate of Plaques
---------------------------------------------------------------
Out of the 236 former workers at an Ohio manufacturing plant
exposed to asbestos, 26.3% or 62 persons showed pleural plaques
or scarring of the chest wall lining, according to a study by
the University of Cincinnati. The percentage of workers with the
largest and heaviest exposure to the vermiculite ore comprised
44.1%. A total of 5.1% reflected workers with the lowest levels
of exposure.
The researchers presented the preliminary results of the study,
which was funded by the Agency for Toxic Substances and Disease
Registry of the Center for Disease Control and Prevention, in
San Diego last Tuesday at the annual International Conference of
the American Thoracic Society.
Pleural plaques are usually considered markers of previous
exposure to asbestos fibers. There is a potential increased risk
for other asbestos-related lung changes, including scar tissue
within the lungs and certain types of cancer such as
mesothelioma.
Until 1980, the Marysville plant used vermiculite ore mined in
Libby, Montana. Until 1990, more than 200 sites around the
country received shipments of vermiculite from the Libby mine.
Vermiculite ore from Libby has been shown to contain high levels
of asbestos, which could have become airborne and inhaled when
used in manufacturing. The Libby mine closed in 1990 and
vermiculite ore used now comes from other sources and is not
known to contain asbestos.
James Lockey, MD, professor of occupational and pulmonary
medicine at the University of Cincinnati College of Medicine,
led the study. Co-author Amy Rohs, MD, said, "There is clearly a
relationship with increasing exposure, but the pleural changes
also were seen in the low-exposed workers."
"The public health implications of these preliminary findings
are important in view of the national distribution of the Libby
vermiculite ore," the authors concluded.
The X-rays were taken during the past two years, and three
board-certified radiologists reviewed each independently.
Spirometry tests, which measure lung function, and health
histories also were taken. Although these were not assessed for
this study, they will be reported later when the complete study
findings are reviewed and published.
The workers were among a group of 513 employees at the Ohio
plant exposed to vermiculite and who took part in a 1980 study.
Of these 513 workers, 433 or 84% are currently alive. That
original study, published by Dr. Lockey in the June 1984 issue
of American Review of Respiratory Disease, initially showed that
exposure to vermiculite containing asbestos fibers could cause
pleural plaques.
Co-authors of the study were Kari Dunning, PhD, Jerome Wiot, MD,
Ralph Shipley, MD, Chris Meyer, MD, Tim Hilbert and Rakesh
Shukla, PhD, of the University of Cincinnati and Vikas Kapil,
DO, of the CDC/ATSDR.
Additional information on ATSDR and Libby asbestos can be found
at http://www.atsdr.cdc.gov/naer/index.html/.
ASBESTOS LITIGATION: Judge Delays Trial for WR Grace Executives
---------------------------------------------------------------
U.S. District Judge Donald Molloy pushed back by four months the
trial for W.R. Grace & Co. and seven of its executives, accused
of conspiring to hide the health dangers of asbestos-laced
vermiculite mined by the Company near Libby. The trial
originally scheduled for May 15, 2006 is now set for September
11, 2006.
Attorneys for W.R. Grace, a premier specialty and materials
firm, and its executives had asked the federal judge to postpone
the trial, arguing that the case was too large and complex to
meet the deadlines set by the judge.
Judge Molloy decided to set the trial later than he had first
planned "after considering the arguments of counsel and the
dates discussed for various deadlines in this case."
As previously reported in the February 25, 2005 edition of the
Class Action Reporter, W.R. Grace and seven of its top
executives were named in a 10-count indictment which accused
them of intentionally withholding numerous studies stating the
risk cancer-causing tremolite asbestos posed to its customers,
employees and Libby residents. Charges include conspiracy, wire
fraud, obstruction of justice and violations of the federal
Clean Air Act.
The Libby area has been declared a Superfund site and the
Environmental Protection Agency has spent more than US$55
million on cleanup so far.
Assistant U.S Attorney Kris McLean had asked for a September
2005 trial date, saying it was necessary in order for some
witnesses to testify. The prosecutor asserted that many of their
witnesses were slowly dying, several of which are victims and
fully intend to see this case go to court.
However, at a scheduling conference before Judge Molloy,
attorneys for the mining Company and its executives argued the
case was too complex.
"The parties have stipulated, and I concur, that due to the
number of defendants, the nature of the prosecution and the
existence of novel questions of law, it is unreasonable to
expect adequate preparation for the pretrial proceedings or for
the trial itself within the time limits established by the
Speedy Trial Act," Judge Molloy wrote.
The plea agreement deadline was set for July 31, 2006.
ASBESTOS LITIGATION: Too Few Get Compensation Payouts, UK Report
----------------------------------------------------------------
Less than one in 10 people made ill or injured by their work
ever receive any compensation from the state or from their
employers, reveals a new report from the Trades Union Congress,
which represents 70 affiliated unions in the United Kingdom.
The report, which appears in the latest edition of the TUC-
backed health and safety magazine Hazards, disclosed that every
year around 850,000 people suffer an accident or develop a
disease as a result of their job, but no more than 80,000
receive any compensation either from their employer or from the
state for their pain and suffering. It added that the costs that
workers and their families bear far exceed the costs of
compensation for work-related disease and injury.
The report claims that even workers dying of deadly asbestos
cancers more often than not receive nothing from the government
compensation scheme.
TUC general secretary Brendan Barber said that the current
system needs a "complete overhaul" to give workers better and
quicker access to justice. He added that instead of higher and
more compensation payouts, a better way is for employers to take
their workers' health and safety responsibilities more
seriously.
ASBESTOS LITIGATION: DNR Probes Dumping of Asbestos in GA Park
--------------------------------------------------------------
Georgia's Department of Natural Resources is investigating the
debris-dumping incident inside Amicalola Falls State Park in
north Georgia, the Associated Press reports.
Aside from the various piles of trash, including barbecue
grills, picnic tables and wire dumped on the East side of the
park discovered last week, asbestos-riddled ceiling tiles were
also found buried in the park. The tiles reportedly came from a
restroom that was demolished at the top of the falls in 1999.
State regulations require that asbestos be disposed of in
special landfills.
State parks director Becky Kelley said she wants to know who
provided instructions for the material to be buried in the park.
She added that she intends to take the proper action to prevent
the incident from occurring again.
The park is one of Georgia's most popular with more than 900,000
visitors in 2003.
ASBESTOS LITIGATION: District Warns Of Contaminated Garages
-----------------------------------------------------------
Authorities have temporarily fenced off derelict garages located
in Station Road in the Eastbourne area after environment experts
found that the wreckage contained asbestos fibers, Hailsham News
reports.
Pollution control team leader Nigel Taylor said that the results
taken from air samples show that the deadly fibers pose a health
risk only if people enter the site. He released a warning for
everyone to stay away because of the possible long-term effects
of exposure to asbestos, which can lead to various respiratory
illnesses, including a rare lethal cancer called mesothelioma.
The district council said that vandals have frequented these
garages, putting them and young children at risk. It said that
these acts of vandalism could lead to serious health
consequences. However provided people do not enter the site,
there should be minimal risk.
The district council has served the owner with a notice to clear
the area. It warned that if the owner fails to do so, the
council would knock down the garages itself.
ASBESTOS LITIGATION: Shares Rise for Companies in Asbestos Suits
----------------------------------------------------------------
Shares of companies with asbestos liabilities rose sharply on
Tuesday after the U.S. Senate settled an unrelated battle over
judiciary nominations. The shares surged on hopes that the
settlement would clear the way for the passage of asbestos
legislation.
The struggle over the judgeships last week had stalled progress
on the proposed trust fund to compensate victims of asbestos
contamination.
Senate Minority Leader Harry Reid warned that Democrats would
doom the asbestos bill if they lost their procedural rights on
judges. After the compromise was announced, Sen. Reid, an
opponent of the asbestos legislation, said it was "breathing
again."
Chicago-based USG Corp. shares rose US$4.03, or 9.3 percent, to
close at US$47.53 on the New York Stock Exchange. W.R. Grace &
Co., based in Columbia, Md., rose US$1.37, or 15 percent, to
US$10.50. New Orleans-based McDermott International rose
US$2.17, or 11 percent, to end at US$21.51.
These companies and others have faced numerous lawsuits by
people claiming to have contracted lung disease and other
injuries as a result of exposure to asbestos, a carcinogenic
material that was used in construction and manufacturing.
Asbestos-related personal-injury lawsuits have sent more than 70
companies into bankruptcy.
U.S. Sen. Arlen Specter, R-Pa., introduced legislation in April
to create a US$140 billion trust fund for asbestos victims
funded by manufacturers and insurers. The asbestos bill would
take injury claims out of courts and pay them from the fund, to
be financed by asbestos defendant companies and their insurers.
The judiciary committee has already had four working sessions on
the legislation. The bill has only seven publicly declared
supporters on the committee, but at least three more are thought
to be possible "yes" votes.
Ten votes are needed to get the legislation approved by the
judiciary committee.
ASBESTOS LITIGATION: El Dorado Businesses Bear Asbestos Worries
---------------------------------------------------------------
The asbestos scare in El Dorado County has prompted some buyers
to pull out of acquiring property in the area. Economic
development advocates worry that the publicity could discourage
people from moving their families to the site, which has gone
through several tests after asbestos was discovered in the soil.
The U.S. Environmental Protection Agency said last week that
children playing in El Dorado Hills Community Park might be
exposed to elevated levels of naturally occurring asbestos, a
substance that can lead to cancer.
Jon Morgan, director of the El Dorado County Environmental
Management Department, brushed their worries aside, saying that
as long as the county, the state and the federal government do
their jobs, there won't be any long-term economic impacts.
Mike Lyon, chief executive officer of William L. Lyon &
Associates Inc. of Sacramento, estimated that about 3 to 4
percent of El Dorado Hills home sales in escrow have been
canceled due to the asbestos issue. Since the demand for homes
in El Dorado Hills has long exceeded supply, Mr. Lyon and others
don't expect a big drop in sales.
El Dorado County Chamber of Commerce chief executive officer
Laurel Brent-Bumb said she thought economic impacts were
unlikely outside the housing market. She accuses the EPA of
"fear tactics."
Last October, the EPA did the study in response to a citizen
petition, filed in September 2003 under the Superfund law. Their
scientists found asbestos fibers in almost all of the 400 air
samples collected in over nine days.
Asbestos is found in serpentine rock, which occurs in greenish,
greasy-looking bands throughout the Sierra foothills and in 44
California counties. Asbestos trapped inside the rock does not
become a health hazard until the rock gets ground up, releasing
dust into the air.
The EPA said however that it does not know whether intermittent
exposure to asbestos at the concentrations found in El Dorado
Hills will cause disease. But the agency warned that the risks
of disease were highest in children, because diseases caused by
short-term exposure might take decades to appear.
El Dorado County residents started raising questions about the
potential hazards of naturally occurring asbestos in the 1990s.
The county enacted an asbestos law for large construction
projects in 2000. Developers and builders say they have
consistently followed the rules, which require them to suppress
dust by spraying construction sites and hosing off equipment
leaving the sites.
However, some county residents and business owners are demanding
tougher controls. The county is considering expanding the
asbestos ordinance to smaller construction projects.
Business leaders, like many homeowners, appeared to be trying to
get a handle on the situation. But so far there has been little
coordinated response from the business community. Some said
businesses need to take a more active role in gathering
information and addressing the EPA findings.
ASBESTOS LITIGATION: Inquest Shows Electrician Died of Exposure
---------------------------------------------------------------
An inquest last week on the death of a man revealed that
asbestos exposure was the cause resulting from the nature of his
work as an electrician, the Stourbridge News reports.
Geoffrey Norris, aged 65, of Brooke Street, Stourbridge died on
January 19, 2005 at Wordsley Hospital. His work involved
drilling into the asbestos roof of a pig farm.
At Dudley Coroners Court, Black Country Coroner Robin Balmain
recorded a verdict of industrial disease.
ASBESTOS LITIGATION: New York Has Naturally Occurring Asbestos
--------------------------------------------------------------
Information provided by the New York and New Jersey Geological
Surveys reveals places with increased risk for naturally
occurring asbestos in the area, CBS reports.
Asbestos, a mineral that occurs naturally in rock, could be
disturbed by development. The released fibers if inhaled can
cause a rare and lethal cancer called mesothelioma.
CBS 2's Marcia Kramer has learned that in New York, the Feds
believe that naturally occurring asbestos is found in eastern
Hoboken along the waterfront, Davenport Neck in New Rochelle, in
and around Port Chester and in Manhattan in the region from 57th
to 65th Street, between 9th and 10th Avenues.
The biggest site, however, is on Staten Island. The impacted
area covers about 30 square miles in the northern portion of the
borough.
The geological surveys also contain maps that illustrate the
approximate locations of rock formations that can contain
naturally occurring asbestos.
ASBESTOS LITIGATION: AU Council Applauds Quick Cleanup of Spill
---------------------------------------------------------------
A major cleanup followed the discovery of asbestos dumped along
15 kilometers of road at East Kurrajong in New South Wales
earlier this month.
Analysis showed the dumped fibro sheeting contained two forms of
asbestos, chrysotile and amosite, both known to cause cancer.
The Roads and Traffic Authority took responsibility for the
spill, which was reported by a nearby resident. Hawkesbury City
Council requested the state coordinator of WorkCover to approve
the immediate investigation and cleanup because of the hazardous
nature of the material and the heightened risk due to the
location. A Council spokesperson said that approvals normally
take up to seven days.
After the dispensation was received, four specially accredited
workers from a licensed contractor accomplished the
"painstakingly detailed and time-consuming" removal work in
three days, said the spokesperson. The waste was taken to a
waste management site licensed to accept asbestos. Not including
the cost of traffic control to ensure the safety of the workers,
the asbestos removal work cost more than US$12,000.
The spokesperson added that it appeared the material had been
dumped by a utility truck or van with its tailgate open, and the
vehicle had done U-turns and fishtails to get rid of the
material. He said however, that rain reduced the potential risk
to the residents.
The Council is now awaiting a clearance certificate from an
independent organization, which carries out testing including
air sampling. It has also applied for funding through the
Environment Trust Fund administered by the Department of
Environment and Conservation.
Hawkesbury City Council vowed to find the persons responsible,
take them to court, and impose fines to cut the costs of the
cleanup and discourage any further such action. Anyone who has
any information regarding the spill is urged to contact Garry
Baldry at Council on 4560 4542.
ASBESTOS LITIGATION: TriMas Corp.'s Pending Cases Jump to 1,470
---------------------------------------------------------------
As of April 30, 2005, TriMas Corporation was a party to about
1,470 pending cases involving about 19,000 claimants alleging
personal injury from exposure to asbestos containing materials
formerly used in both encapsulated and non-encapsulated gaskets
manufactured or distributed by certain of its subsidiaries for
use in the petrochemical refining and exploration industries.
The Class Action Reporter previously noted 1,041 of these cases
on August 20, 2004.
In addition, the Bloomfield Hills, MI-based Company acquired
various companies to distribute its products that had
distributed gaskets of other manufacturers prior to acquisition.
The Company believes that many of its pending cases relate to
locations at which none of its gaskets were distributed or used.
Total settlement costs for all such cases (exclusive of defense
costs), some of which were filed over 13 years ago, have been
about US$3.0 million. All relief sought in the asbestos cases is
monetary in nature. The Company does not have significant
primary insurance to cover its settlement and defense costs. It
believes that significant coverage under excess insurance
policies of former owners is available to the Company, but the
insurance carriers may dispute such coverage and such insurance
may ultimately not be available.
Further, the Company may be subjected to significant additional
claims in the future, the cost of settling cases in which
product identification can be made may increase, and it may be
subjected to further claims in respect of the former activities
of its acquired gasket distributors.
Relatively few of the claims have reached the discovery stage
and even fewer claims have gone past it. Based on the
settlements made to date and the number of claims dismissed or
withdrawn for lack of product identification, the Company
believes that the relief sought does not bear a reasonable
relationship to the Company's potential liability.
TriMas Corporation is a leading manufacturer of high-quality
transportation accessories, packaging systems, fastening systems
and industrial specialty products for the commercial,
manufacturing, and consumer markets.
ASBESTOS LITIGATION: Mestek Inc. Named in More Than 300 Lawsuits
----------------------------------------------------------------
Mestek, Inc. (NYSE: MCC) is currently a party to over 300
asbestos-related lawsuits, and in the past three months has been
named in about 12 new such lawsuits each month, primarily in one
county in Illinois where numerous asbestos-related actions have
been filed against numerous defendants. The total requested
damages of these cases are over US$3 billion.
To date, the Westfield, MA-based Company has had over 40
asbestos-related cases dismissed without any payment and it
settled about 25 asbestos-related cases for a de minimis value.
However, there can be no assurance the Company will be able to
successfully defend or settle any pending litigation.
Almost all of these suits seek to establish liability against
the Company as successor to companies that may have
manufactured, sold or distributed asbestos-related products, and
who are currently in existence and defending thousands of
asbestos related cases, or because the Company currently sells
and distributes boilers, an industry that has been historically
associated with asbestos-related products. The Company believes
it has valid defenses to all of the pending claims and
vigorously contests that it is a successor to companies that may
have manufactured, sold or distributed any product containing
asbestos materials.
In addition to the Lisle, IL site, the Company has been named or
contacted by state authorities and the EPA regarding the
Company's asserted liability or has otherwise determined it may
be required to expend funds for the remediation of certain other
sites in North Carolina, Connecticut and Pennsylvania. The
Company continues to investigate all of these matters. Given the
information presently known, no estimation can be made of any
liability, which the Company may have with respect to these
matters.
Mestek is a family of manufacturing companies that provide HVAC
(heating, ventilating and air conditioning) and metal forming
(machine tool, coil handling) products.
ASBESTOS LITIGATION: Moscow CableCom Discloses JM Ney's Lawsuits
----------------------------------------------------------------
Moscow CableCom Corp. (NASDAQ: MOCC) submitted its latest filing
to the Securities and Exchange Commission stating that in March
and April 2004, JM Ney, now known as Andersen Land Corp., was
served with a summons and a complaint in the Mass and Brienza
matters in which it and an excess of 100 other parties were
named as defendants in an asbestos-related civil action for
negligence and product liability. This matter was filed in the
Supreme Court of New York for the County of New York (although
the Brienza matter has been transferred to Nassau County) in
which the plaintiffs claim damages from being exposed to
asbestos and asbestos products alleged to have been manufactured
or supplied by the defendants, including JM Ney's former dental
division.
In addition, as originally reported in the Company's Form 10-Q
for the period ended November 30, 2004, in October 2004,
Andersen Land Corp. also received a summons in which it and
about 30 additional companies were named as defendants in an
asbestos-related civil action for negligence and product
liability filed in the Supreme Court of New York for the County
of New York.
In the case captioned, Jay K. Fleckner v. Amchem Products, Inc.
et al (New York State Supreme Court, County of New York, Index
113970-04), the plaintiff claims damages from being exposed to
asbestos and asbestos products alleged to have been manufactured
or supplied by the defendants, including JM Ney's former dental
division. The plaintiffs have not provided any specific
allegations of facts as to which defendants may have
manufactured or supplied asbestos and asbestos products, which
are alleged to have caused the injuries.
The Company believes that it has insurance that potentially
covers these claims and has notified its insurance carriers to
provide reimbursement of defense costs and liability, should any
arise. Based upon the answers to the interrogatories that have
been supplied by the plaintiffs' attorneys, it does not appear
to the Company that JM Ney manufactured any products containing
asbestos that are the subject of these matters. As of this date,
the Company has no basis to conclude that the litigation may be
material to the Company's financial condition or business. The
Company intends to vigorously defend the lawsuits.
From 1991 until March 22, 2002, Moscow Cablecom Corp. owned and
operated JM Ney as its primary operating subsidiary. JM Ney has
been renamed Andersen Land Corp in connection with the sale of
JM Ney's operating assets.
ASBESTOS LITIGATION: Ampco-Pittsburgh Defense Costs Reach $2.6M
---------------------------------------------------------------
Claims have been asserted against Ampco-Pittsburgh Corporation
(NYSE: AP) and its subsidiaries, alleging personal injury from
exposure to asbestos-containing components historically used in
some products of certain of the Pittsburgh, PA-based
Corporation's subsidiaries. Those subsidiaries, and in some
cases, the Corporation, are defendants (among a number of
defendants, typically over 50 and often over 100) in cases filed
in various state and federal courts.
For the three months ended March 31, 2005, open claims at the
end of the period reached 25,000. Gross settlement and defense
costs amounted to US$2,613,000. The number of claims settled or
dismissed during the period was estimated to be 78.
Of the approximate 25,000 claims pending as of March 31, 2005,
over 15,000 were made in six lawsuits filed in Mississippi in
2002. Substantially all settlement and defense costs were paid
by insurers.
The Corporation classifies its businesses in two segments --
Forged and Cast Rolls and Air and Liquid Processing.
ASBESTOS LITIGATION: Celanese Corp. Subsidiaries Face 850 Cases
---------------------------------------------------------------
Celanese Corporation (NYSE: CE) in its latest filing submitted
to the Securities and Exchange Commission revealed that Celanese
Ltd. and CNA Holdings, Inc., both U.S. subsidiaries, are
defendants in about 850 asbestos cases.
Because many of these cases involve numerous plaintiffs, the
Dallas, TX-based Company is subject to claims significantly in
excess of the number of actual cases. The Company has reserves
for defense costs related to claims arising from these matters.
It believes that there is no significant exposure related to
these matters.
Celanese Corporation was created in late 2004 and owns nearly
85% of Celanese AG and all of Celanese Americas Corporation
after a series of 2004 transactions led by the Blackstone Group.
Its primary operations include the manufacture of building block
chemicals like acetic acid and vinyl acetate monomers.
ASBESTOS LITIGATION: MP Blasts NSW Govt. for Overturning Policy
---------------------------------------------------------------
A Labor MP for Liverpool, Paul Lynch, accused his government
colleagues of risking the lives of constituents by reversing a
policy on the implementation of asbestos safety certificates.
Last November, the certificate scheme, which would assess the
amount and condition of asbestos in every house to be sold or
redeveloped in New South Wales, was approved.
In a letter sent last week to caucus members, Mr. Lynch said the
"do-nothing option abandons the responsibilities of government"
and "failing to take some real action will condemn to death
constituents of mine."
The asbestos safety certificates, proposed by the Asbestos
Diseases Foundation of Australia and the Australian
Manufacturing Workers Union, and championed by Mr. Lynch, were
to have been compulsory for people filing a development
application or selling a home. Licensed inspectors would have
carried out certification, which would have added between $150
and $250 to the cost of a home sale at a time when property
taxes have become contentious for the Government.
The union said 40,000 people were expected to become ill with
asbestos-related diseases over the next 40 years, many of whom
have not yet been exposed to the fibers. Thousands of people may
have been be exposed to asbestos when renovating homes built
during the 1960s in Sydney's south-west, or demolishing new
additions to older inner-city homes, the union said.
A spokeswoman for the Local Government Minister, Tony Kelly,
said the Government had decided against the plan because a
visual inspection of a house might not reveal hidden asbestos,
and might provide a "false sense of security."
As previously reported in the May 6, 2005 edition of the Class
Action Reporter, the New South Wales government opted to instill
new measures to improve community awareness about asbestos in
people's homes instead of making asbestos safety certificates
mandatory. Local Government Minister Tony Kelly said that they
decided not to go through with the plan because the scheme would
result in extra costs and delay, while not necessarily reducing
the risks.
Mr. Kelly provided a list of measures that he says, are aimed to
ensure home renovations were undertaken in the safest way
possible. These include training programs on asbestos safety for
owner-builders, warnings on all home building contracts, and
distribution of a brochure on asbestos safety to homeowners when
they applied for an owner-builder permit.
ASBESTOS LITIGATION: El Dorado County Responds to Asbestos Issue
----------------------------------------------------------------
A California county hounded by the issue of naturally occurring
asbestos will hit back with a multi-agency response plan to
assess and monitor its presence and launch an information
campaign on the health effects associated with asbestos
exposure.
Having been the subject of a federal study in recent months, at-
risk asbestos exposure sites will be watched closely by the
community for asbestos dust. In accordance with the Beacon Plan,
which stands for Be Active Community Outreach Network, the
county will be forming a 12-member Dust Prevention and
Enforcement Team to visually inspect construction sites. In
addition, the county will hire a geologist and air-quality
expert to get an accurate assessment of the asbestos levels.
A public campaign will be realized through the efforts of the
county public health department and Marshall Medical in
Placerville. They will work jointly to educate health care
workers and implement the dissemination of asbestos information.
The county will also host a toll-free hotline, (888) 394-4662,
to receive reports and answer inquiries.
The program follows a state Senate hearing and several public
meetings regarding a federal Environmental Protection Agency
report on naturally occurring asbestos in the county. The EPA
determined that during outdoor activities, exposure is magnified
up to 40 times the amount of asbestos dust as background levels.
The EPA said it would convene a task force of experts to
determine what kind of risk the asbestos poses. It may also
conduct a similar study in at least one other California county
where asbestos to known to be prevalent to determine if exposure
to the mineral dust is more common than currently known.
Asbestos is known to occur naturally in two-thirds of the
state's 58 counties.
ASBESTOS LITIGATION: Queensland Gives $120M for Asbestos Removal
----------------------------------------------------------------
Bowing to public pressure, the Queensland Government will be
allocating an extra $120 million in the state budget to replace
more than 1,100 asbestos-riddled roofs in 370 schools, The
Courier-Mail reports. The program would begin with a $7.2
million allocation to replace 70 roofs in 61 schools over the
next financial year.
Premier Peter Beattie told the Parliament that the work would be
carried out in over 10 years. However, parents and teachers said
the length of time allowed for removal of the potentially deadly
material was too long. Queensland Teachers Union president Steve
Ryan said that since the roofs would continue to deteriorate at
an "ever-increasing rate," he would like it speeded up.
Liberal deputy leader Bruce Flegg said that although he was
delighted with the decision, he would want Queensland to follow
the lead of the West Australian Government and replace all
asbestos school roofs in five years.
Mr. Beattie said he and key ministers agreed on "the importance
of planning to keep our children and teachers safe." He said the
acceleration of roof replacement in state schools would mean
"peace of mind for parents, students, teachers and others in our
school communities."
Under the Government's current rate of roof replacement,
elimination of asbestos school roofs would have taken 32 years.
Commonwealth Scientific and Industrial Research Organization's
principal research scientist Dr. Stephen Brown has reported that
asbestos roofs become visibly degraded after 15 to 20 years, so
that "an extremely low but measurable release of asbestos fibers
occurs from the degraded surfaces to air around such buildings."
Education Minister Anna Bligh refused to concede the Government
had backed down on the issue, or that the $120 million in
funding was an admission the roofs were not safe.
A 38-year-old asbestos roof at Moggill State School, in
Brisbane's west, will be among the first to be replaced over the
Christmas holidays.
ASBESTOS LITIGATION: New Zealander Awaits Cash Verdict from ACC
---------------------------------------------------------------
Entangled in a battle for lump sum compensation, the Accident
Compensation Corporation told a former consulting engineer that
he would be receiving $101,436 however it warned that it might
ask for the money back if its High Court appeal succeeds.
Jack Soeters, aged 67, was diagnosed with mesothelioma, a
terminal cancer of the lung lining caused by asbestos exposure.
He started experiencing breathlessness in March of last year. He
said that the cash is only meant to give his wife Lyn "a bit
more security."
The ACC had originally refused him a lump sum because his
asbestos exposure occurred before April 1, 2002, when the New
Zealand Government reintroduced this form of compensation. ACC
backed down in his and 25 similar cases after a district court
judge's ruling on the late Ross Lehmann's claim.
Mr. Soeters designed heating and air-conditioning systems for 40
years; he visited building sites to supervise the construction
of his projects. Asbestos was commonly used as insulation on
pipes and boiler flues, but he does not recall ever coming into
physical contact with it.
Researchers believe historic exposure will kill 12,000 New
Zealanders with asbestos cancers. Almost 17,000 people are on
the Government's voluntary register for people possibly exposed
to asbestos.
Raw asbestos imports ceased in 1991 and the Government is now
investigating banning all imports of products containing
asbestos, such as some vehicle clutch linings.
ASBESTOS ALERT: Neshkin to Pay US$15,500 Penalty for EPA Breach
---------------------------------------------------------------
Neshkin Construction Company, Inc. will pay a US$15,500 civil
penalty for violating Ohio's asbestos removal rules. The
asbestos abatement contractor was supposedly brought in to
properly dispose of remaining debris at the site.
The Cleveland-based Company agreed to the settlement with the
Environmental Protection Agency as a result of a 2003
investigation that found that asbestos-containing material was
not removed prior to the demolition of a former Giant Eagle
grocery store in Painesville Township, Lake County.
Airborne asbestos can pose health risks including respiratory
diseases. With an asbestos survey inspection and pre-
notification, the local health department and Ohio EPA can
ensure that any regulated asbestos-containing materials are
properly identified, removed and disposed.
Neshkin failed to perform a complete asbestos inspection survey.
It also did not notify the Lake County General Health District
or Ohio EPA prior to demolishing the structure. Dry asbestos-
containing material was not adequately wetted to prevent
emissions and had the potential to go airborne.
The EPA also cited the store's owner, EMMCO Corporation of
Beachwood, and the demolition Company, South Euclid Concrete and
Asphalt, for failing to provide advance notice about the
project.
Equal portions of the penalty will be used to benefit the Ohio
Environmental Education Fund and air pollution control programs.
Company Profile:
Neshkin Construction Co.
3214 Saint Clair Avenue Northeast,
Cleveland, OH 44114
Phone: (216) 241-3397
Description:
Neshkin Construction Company is a building firm and general
contractor that offers remodeling and restoration services.
ASBESTOS ALERT: Jewson Ltd. Fined for Illegal Dumping of Waste
--------------------------------------------------------------
Leamington building supplier Jewson Ltd. was fined GBP40,000 for
illegally dumping waste next to a residential area. The Rugby
Road branch pleaded guilty to four charges of illegally
depositing, keeping and treating controlled waste when it did
not have a waste management license. The Company was also
ordered to pay costs of GBP6,181 at Rugby Magistrates Court.
The Environment Agency brought the charges under Section 33 of
the Environmental Protection Act 1990.
On a tip from residents, Environment Agency officers inspected a
Jewson site in February 2004 and discovered that a former
storage compound at the rear of the site was being used to
stockpile wastes including asbestos cement.
The illegal operations reportedly continued over four months.
Both brown and white fragments of asbestos cement were found on
the site. As housing was located near the site, local residents
were greatly concerned as the material could have damaged their
health.
Speaking after the case, Gill May, an Environment Agency Officer
who led the investigation, said companies must ensure that they
manage their wastes so that they do not pose a risk to the
environment or human health.
"Companies who produce waste have a Duty of Care to ensure that
it is passed on to a registered waste carrier and is disposed or
treated at a suitably licensed waste management facility," said
Mr. Gill. He added that he hopes the imposed fine will serve as
a deterrent to others who are considering disposing their waste
illegally.
The court heard that the Company had no previous convictions and
entered a guilty plea, had cooperated fully with the Agency
during the investigation and had made no profit from the
activities. The Court was told that following the investigation
Jewson had spent GBP108,000 to dispose of all of the waste
materials at the site.
Company Profile:
Jewson Ltd
Merchant House
Binley Business Park
Coventry
West Midlands CV3 2TT, UK
Phone: +44-24-7643-8400
Fax: +44-24-7643-8401
Toll Free: +44-800-539766
http://www.jewson.co.uk/
Fiscal Year-End : December
2003 Sales (mil.) : GBP1,434.4
1-Year Sales Growth : 14.0%
2003 Employees : 9,400
Description:
With over 450 branches across the country, Jewson is the UK's
leading supplier of timber and building products to the trade
and general public. Jewson is part of the Saint-Gobain Building
Distribution Group, Europe's number one building materials
distributor, having been acquired by Saint-Gobain in April 2000.
ASBESTOS ALERT: UK Firm Fined for Importing and Storing Asbestos
----------------------------------------------------------------
Woking Magistrates Court found Capital Demolition Ltd. guilty of
illegally importing and storing white asbestos, known as
chrysotile, at its Addlestone site on May 13, 2004, reports The
Environment Times. The court imposed a fine of GBP14,000 for
bringing in the asbestos without a waste management license.
The Surrey demolition company had pleaded not guilty of the
allegations.
At a site visit, Environment Agency officers discovered a 40-
yard bin containing at least six cubic meters of what appeared
to be broken asbestos sheeting and flat cement board. Further
tests confirmed the presence of white asbestos.
When questioned at the time, Dennis Read, managing director of
Capital Demolition Ltd, wrongly informed officers that the
storage of the asbestos was legal as it was in line with recent
changes made to hazardous waste regulations.
However, no such changes in legislation have been made, and the
storage of asbestos without a proper waste management license
breaches Section 33(1) b of the Environmental Protection Act
1990.
Throughout the duration of the case a number of different
explanations were offered as to the origin of the asbestos.
These included it originating from several small jobs, and that
it had been fly-tipped at Brick Kiln Farm, Effingham, owned by
Mr. Read, and he had subsequently arranged for it to be brought
to the yard.
When interviewed on August 26, 2004, Mr. Read failed to recall
these previous explanations and said that the asbestos was from
demolishing a small compressor housing. However, the court heard
from waste expert Graham Strange that the demolition of the
compressor housing would have only accounted for less than a
fifth of the contents of the bin.
Martin Sawyer, the Agency's investigating officer, said, "It is
quite clear the majority of the asbestos must have been imported
by the Company. Capital Demolition is a well established Company
who specializes in all aspects of asbestos removal and should
have been well aware of their responsibilities in dealing with
such potentially hazardous waste."
Companies and individuals can contact the Environment Agency for
advice and information on waste disposal by calling 0870
8506506. To report environmental incidents, call the emergency
hotline on 0800 807060.
Company Profile:
Capital Demolition Ltd.
Capital House
Woodham Park Road Woodham
Addlestone Surrey KT15 3TG
Phone: 01932 346222
Fax: 01932 340244
http://www.capitaldemolition.sageweb.co.uk/
Description:
Established over 25 years ago, Capital Demolition Ltd. offers
asbestos removal services and prides itself for its extensive
experience in the demolition industry.
New Securities Fraud Cases
ABLE LABORATORIES: Finkelstein Thompson Files NJ Securities Suit
----------------------------------------------------------------
The law firm of Finkelstein, Thompson, and Loughran initiated a
lawsuit seeking class action status has been filed in the United
States District Court for the District of New Jersey on behalf
of all purchasers of publicly traded securities of generic drug
manufacturer Able Laboratories, Inc. (Nasdaq: ABRX) between
October 31, 2002 and May 18, 2005, inclusive (the "Class
Period"). Finkelstein, Thompson, & Loughran is investigating
similar claims at this time and welcomes inquiries from
potential class members concerning their rights and interests in
this matter.
The lawsuit alleges that Able Laboratories violated federal
securities laws by issuing false or misleading public
statements. Specifically, the lawsuit alleges that Able
Laboratories failed to disclose or indicate that Able
Laboratories' testing practices significantly deviated from
standard operating procedures employed in the industry, creating
a risk that the Company would suffer business disruptions which
would have a material adverse effect on the value of its
securities.
On May 19, 2005, Able Laboratories announced that it was
suspending all its product shipments due to quality control
problems resulting from significant departures from standard
industry operating procedures with respect to laboratory testing
procedures for their products. This prompted the immediate
resignation of Dhananjay Wadekaras the Company's Chairman and
CEO.
In reaction to this news, Able Laboratories' share price
plummeted, falling from a close of $24.63 on May 18, 2005 to a
close of $6.26 on May 19, 2005 -- a decline of $18.37, or 74.5%.
Thereafter, on May 23, 2005, Able Laboratories announced that it
was suspending all manufacture and distribution of its products,
was instituting a mass recall of all of its products, and was
withdrawing seven Abbreviated New Drug applications it had filed
with the FDA. On this news, the share price dropped again,
closing at $5.05 on May 23rd, 2005.
For more details, contact Finkelstein, Thompson & Loughran by
Phone: +1-866-592-1960 or by E-mail: contact@ftllaw.com.
ABLE LABORATORIES: Lerach Coughlin Lodges Securities Suit in NJ
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit on
behalf of an institutional investor in the United States
District Court for the District of New Jersey on behalf of
purchasers of Able Laboratories ("Able") (NASDAQ:ABRX)
securities during the period between October 30, 2002 and May
19, 2005 (the "Class Period").
The complaint charges Able and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Able is a generic drug development and manufacturing
Company that sells only its own products to customers. The
Company focuses on developing generic drugs that either have
large established markets or are difficult to manufacture and
therefore have limited or no competition.
According to the Complaint, during the Class Period, defendants
made numerous positive statements concerning the Company's
compliance with federal and state regulations and the Company's
future prospects. As alleged in the Complaint, these statements
were materially false and misleading because defendants failed
to disclose and/or misrepresented:
(1) that the Company's laboratory practices failed to
comply with federal and state regulatory standards,
including the Food & Drug Administration's ("FDA")
current Good Manufacturing Practices, or cGMP,
regulations, relating to the manufacture and other
processing of drugs;
(2) that existing material weaknesses in the Company's
disclosure and control procedures failed to identify
the risks inherent in the Company's aggressive sales
and marketing scheme whereby Able sought and obtained
dozens of FDA approvals to market drugs which
defendants knew or recklessly disregarded the Company
could not safely manufacture; and
(3) as a result of the foregoing, defendants' opinions and
statements concerning the Company's current and future
earnings lacked a reasonable basis at all times.
Then on May 19, 2005, Able announced that, based on preliminary
results of an investigation into a recent spate of product
recalls, it was suspending shipment of each of its products
"until such time as it can assure itself that the product has
been manufactured and tested in compliance with standard
operating procedures and current good manufacturing practices."
The Company also announced that it will be recalling additional
products in the future. Shortly thereafter, Able also announced
that defendant Wadekar had resigned as chairman and Chief
Executive Officer. These announcements had a catastrophic effect
on Able common stock as the shares plummeted nearly 75%, closing
at $6.26 per share, down $18.37 per share from its previous
close, on volume of 31.6 million shares - or 98 times average
trading volumes.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/able/.
ABLE LABORATORIES: Milberg Weiss Lodges Securities Lawsuit in NJ
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of Able Laboratories, Inc. ("Able Laboratories" or the
"Company") (Nasdaq: ABRX) between May 6, 2003 and May 18, 2005,
inclusive, (the "Class Period") seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The action, captioned Mirco Investors, LLC v. Able Laboratories,
Inc., is pending in the United States District Court for the
District of New Jersey against defendants Able Laboratories,
Dhananjay G. Wadekar (CEO, President), Robert Weinstein (CFO,
Treasurer to November 2004), Nitin V. Kotak (V.P. Finance and
Treasurer since December 2004).
The complaint alleges that the Company's Class Period earnings
releases and SEC filings contained materially false and
misleading representations because they failed to disclose that:
(1) the Company's product testing procedures failed to meet
standard industry practices and good manufacturing
practices established by the FDA;
(2) the Company was faced with potentially crippling
liabilities and fines stemming from its breaches of
good manufacturing practices;
(3) the Company's breaches jeopardized not only its current
drug offerings but also the likelihood that drugs in
development would gain FDA approval; and
(4) the Company's seeming success stemmed, in material
part, from costs savings achieved from cutting corners
and a failure to institute a system of operational
controls to ensure compliance with applicable
regulations and good manufacturing practices.
On May 19, 2005, defendants shocked the market when they
revealed that as a result of the Company's internal compliance
review Able Laboratories would be forced to undertake a complete
review of its operating practices after detecting that the
Company had engaged in "various improper laboratory practices"
and was "noncomplian(t) with standard operating practices in
these areas." Later that day, defendants announced the departure
of defendant Wadekar. In reaction to this announcement, the
price of Able Laboratories stock plummeted, falling by 74.5% in
one day, from $24.63 per share on May 18, 2005 to $6.26 on May
19, 2005, on extremely heavy trading volume of more than 31
million shares. On May 23, 2005, Able Laboratories announced
that it is recalling all of its products for safety testing and
taking the additional drastic step of withdrawing seven of its
"abbreviated new drug applications" due to commercial reasons
and "identification, in certain applications, of data upon which
the Company is no longer willing to rely." During the Class
Period, insiders sold a total of 480,666 shares for proceeds of
$9,533,047.00.
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 visit their Web site:
http://www.milbergweiss.com.
ABLE LABORATORIES: Shalov Stone Lodges Securities Lawsuit in NJ
---------------------------------------------------------------
The law firm of Law Firm Shalov Stone & Bonner LLP initiated a
class action in the United States District Court for the
District of New Jersey on behalf of all persons who purchased
the securities of Able Laboratories, Inc. (NASDAQ: ABRX), in the
period from May 6, 2003, through May 18, 2005.
According to the complaint, throughout the relevant time period,
the Company's earnings releases and SEC filings contained
materially false and misleading representations because they
failed to disclose that: the Company's product testing
procedures failed to satisfy standard industry and manufacturing
practices established by the FDA; the Company was confronting
potentially crippling liabilities and penalties resulting from
its breaches of proper manufacturing practices; the Company's
breaches endangered not only its present drug offerings, but
also the likelihood that drugs in development would gain FDA
approval; and the Company's apparent success was due, in
material part, from cost savings derived from cutting corners
and failing to put in place a system of operational controls to
ensure compliance with applicable regulations and manufacturing
practices. The lawsuit was filed in the United States District
Court for the District of New Jersey.
For more details, contact Thomas G. Ciarlone, Jr. of Shalov
Stone & Bonner LLP by Mail: 485 Seventh Avenue, Suite 1000, New
York, New York 10018 by Phone: (212) 239-4340 or by E-mail:
tciarlone@lawssb.com.
CRAY INC.: Lerach Coughlin Lodges Securities Fraud Lawsuit in WA
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit in the
United States District Court for the Western District of
Washington on behalf of purchasers of Cray, Inc. ("Cray")
(NASDAQ:CRAYE) securities during the period between July 31,
2003 and May 12, 2005 (the "Class Period").
The complaint charges Cray and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Cray is engaged in the design, development, marketing and
support of high-performance computer systems, commonly known as
supercomputers.
The complaint alleges that during the Class Period, defendants
made false and misleading statements about the dynamics of the
Company's business model. Defendants used the receipt of new
contracts as the Company's key business measure, rather that
business metrics having a direct bearing on revenue recognition,
including metrics that would measure the speed of on-site
acceptance testing or improved manufacturing processes.
Defendants relied on the receipt-of-contracts measure because
Cray's internal controls were flawed and ineffective. As a
result, it was difficult for Cray to manage basic operational
tasks, such as the development of software applications, or to
manage customer requirements and specifications for systems per
contract. These problems manifested themselves during the Class
Period in the form of unpredictable and repeatedly missed
quarterly guidance. Over time, a huge order backlog for Cray's
supercomputers developed. In the interim period, as alleged in
the complaint, defendants took steps to conceal the Company's
basic problems by misleading analysts about expectations for
future revenue recognition in later quarters and through
concealment of basic performance issues, such as losses in
performance of customer contracts and delays in the receipt of
critical parts to build computer systems.
On March 16, 2005, Cray revealed that it would delay the filing
of its Annual Report on Form 10-K and that, although it had not
completed its formal assessment process, it expected to identify
one or more material weaknesses in its system of internal
controls and that it would conclude that these controls were
ineffective. In addition, the Company revealed that its auditors
had expressed serious reservations, including whether or not the
auditors would be able to render an opinion on either the
Company's own assessment or its internal controls. Then on May
9, 2005, Cray revealed that it had received a notice from the
Listing Qualifications Department of The Nasdaq Stock Market
stating that it had failed to include an auditor's opinion on
management's assessment of internal control over financial
reporting in its Form 10-K/A filed on May 3, 2005. In response
to this news, the price of Cray's stock fell $0.74 per share
over the three-day period ending May 12, 2005, for a 35.6% loss,
closing at $1.34 per share on volume of 9.5 million shares
traded.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/cray/.
DORAL FINANCIAL: Stull Stull Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Southern
District of New York, on behalf of all persons who purchased the
publicly traded securities of Doral Financial Corporation
("Doral") (NYSE:DRL) between May 15, 2000 and April 19, 2005,
inclusive (the "Class Period") against Doral and certain of its
officers and/or directors.
The Doral complaint alleges that during the Class Period,
defendants, Doral Financial Corp., Salomon Levis, Richard
Melendez and Richard F. Bonini made materially false and
misleading statements regarding the Company's business and
prospects. Defendants failed to disclose to the investing public
that the Company was improperly overvaluing its floating rate
interest only ("IO") Strips, an important part of its mortgage
portfolio, and thereby substantially inflating its financial
results during the Class Period. As a result, during the Class
Period, the Company's net income and net gain on mortgage loan
sales were materially overstated, the Company's return on equity
and capital were materially overstated, and 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 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. According
to Doral, the restatements are necessary to correct the
accounting treatment for valuing Doral's IO Strip Portfolio.
Doral admitted that eventually it will be required to take a
charge of between $290 million and $435 million. As a result of
these false statements, Doral's stock price traded at inflated
levels during the Class Period, increasing to as high as $49.45
per share on January 18, 2005. The Company sold $740 million
worth of notes and $345 million worth of preferred stock during
the Class Period. However, after the truth was revealed in
Doral's press release on April 19, 2005, the Company's shares
fell to below $16 per share.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022 by E-mail:
SSBNY@aol.com or visit their Web site: http://www.ssbny.com.
HARLEY-DAVIDSON: Lerach Coughlin Lodges Securities Lawsuit in WI
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit in the
United States District Court for the Eastern District of
Wisconsin on behalf of purchasers of Harley-Davidson, Inc.
("Harley-Davidson" or the "Company") (NYSE:HDI) publicly traded
securities during the period between January 21, 2004 and April
12, 2005 (the "Class Period").
The complaint charges Harley-Davidson and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. Harley-Davidson and its subsidiaries
produce heavyweight motorcycles, offer a line of motorcycle
parts, accessories, apparel and general merchandise and provide
wholesale and retail financing and insurance programs primarily
to Harley-Davidson dealers and customers.
The complaint alleges that due to defendants' efforts, by 1997
demand for Harley-Davidson motorcycles was significantly
outpacing supply. With its motorcycles intentionally kept in
short supply, by 2000, Harley-Davidson's dealers were able to
charge 20% premiums over MSRP and to keep some customers waiting
up to 18 months for delivery. This confluence of the opportunity
for premium sales and the shortage of motorcycles provided
Harley-Davidson with a large modicum of control over its
dealers. Dealers who did not toe the line faced falling out of
grace with Harley-Davidson and could see their allotment of new
and hot selling models shrink. Defendants' ability to force
shipments on dealers was also aided by the perception that the
Company's motorcycles were in short supply so any disclosure
that certain dealers were overloaded would also have adversely
affected Harley-Davidson's ability to force other dealers to
accept additional inventory. As alleged in the complaint, as
dealers' showroom floors were crammed to full capacity, the
premium markups on motorcycle prices dealers had become
accustomed to receiving dried up and they were forced to slash
prices. As a result, Harley-Davidson's ability to force
motorcycle deliveries on its dealers dissipated. Then on April
13, 2005, defendants disclosed that Harley-Davidson would be
forced to cut production of new 2005 motorcycles, cutting 10,000
motorcycles in the second quarter of 2005 alone, due to
declining demand and burgeoning inventories at its dealers.
According to the complaint, during the Class Period, as
defendants continued reporting quarter after quarter of "record"
revenues and earnings, promising mid-teen earnings per share
growth rates in fiscal 2005 and that Harley-Davidson would break
the psychological barrier of shipping 400,000 new motorcycles by
2007, Harley-Davidson's stock price traded at inflated levels,
increasing to as high as $63.75 on July 14, 2004. During this
same period, defendants caused Harley-Davidson to repurchase
10.6 million shares for $564 million in fiscal 2004 and another
2.9 million shares for over $175 million during the first
quarter of 2005, further driving up the Company's stock price.
Meanwhile, the Company's top officers and directors sold almost
$92 million worth of their own shares, including the Company's
Chairman and Chief Executive Officer who sold over $50 million
worth of Harley-Davidson stock himself. Then, on the April 13,
2005 disclosure, the Company's stock price plummeted by 16.7% in
a single trading session, or $9.84 per share, and would fall a
total of 22% by April 15, 2005. Over $3.6 billion in market
capitalization was erased.
The complaint alleges that 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) demand for Harley-Davidson motorcycles was declining
and the Company's market share was shrinking;
(2) the number of unsold 2004 and 2005 model year
motorcycles in dealer inventories was growing
exponentially; and
(3) over-stocked inventories were running down the price
dealers could obtain for new motorcycles.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/harleydavidson/.
R&G FINANCIAL: Stull Stull Lodges Securities Fraud Lawsuit in NY
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of all persons who purchased the
publicly traded securities of R&G Financial Corporation ("R&G")
(NYSE:RGF) between April 21, 2003 and April 25, 2005, inclusive
(the "Class Period") against R&G and certain of its officers
and/or directors.
The Complaint alleges that R&G violated the federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that R&G used improper
accounting assumptions to value its interest only ("IO")
residuals used in securitization transactions. On March 25,
2005, R&G announced that it would restate its financial results
for fiscal years 2003 and 2004. Then on April 26, 2005, R&G
announced that it was subject to an informal SEC probe relating
to its restatement announcement. On this news, shares of R&G
fell from a close of $23.18 per share on April 25, 2005, to
close at $15.10 on April 26, 2005.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022 by E-mail:
SSBNY@aol.com or visit their Web site: http://www.ssbny.com.
*********
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 2004. All rights reserved. ISSN 1525-2272.
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are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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