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C L A S S A C T I O N R E P O R T E R
Friday, July 8, 2005, Vol. 7, No. 134
Headlines
BERKELEY PREMIUM: TX AG Abbot Joins Effort V. Unapproved Drugs
BRIDGESTONE FIRESTONE: Firm Files CA Suit, Seeks Recall of Tires
BLUE BIRD: Recalls 45 Ultra LF Buses For Injury, Accident Risk
COACHMEN RV: Recalls 135 Motor Homes Because Of Fire Hazard
DOREL JUVENILE: Issues Alert on Safety of 1st Tubside Bath Seats
DUPONT CORPORATION: Reaches Resolution For RI Lead Litigation
FIRST CREDIT: To Pay $20T Fine For Harassing Consumers in PA
FOUR WINDS: Recalls 26 Majestic Motor Homes Due to Fire Hazard
GALLAGHER & CO.: IL Judge Sets Hearing Date For Fiduciary Suit
GENERAL MOTORS: Recalls 6,698 Vehicles Because Of Crash Hazard
HURRICANE ROOFING: PA Attorney General Files Consumer Fraud Suit
ILLINOIS: Judge Dismisses Lawsuit Seeking Reparations For Slaves
JMC INVESTMENTS: RI AG Lynch Seeks TRO Due To Homeowner Fraud
K. JAMES: Barred From Doing Business Due To PA Consumer Fraud
LAND ROVER: Recalls 2,845 Freelander SUVs Due To Injury Hazard
MASSACHUSETTS: MWRA, BWSC Close to Settling Suit Over Flooding
MAYTAG CORPORATION: Faces Suit Over Deceptive Business Outlook
MERCK & CO.: Texas Attorney General Abbot Launches Vioxx Lawsuit
MID BUS: Recalls 2,706 School Buses Due To Defective Microswitch
MITSUBISHI MOTORS: Recalls 3,760 Eclipse Cars For Crash Hazard
ROLF PRIMA: Recalls 879 Bicycle Rear Wheels Due to Injury Hazard
SUNDOWNER TRAILERS: Recalls Horse Trailers For Accident Hazard
TECUMSEH POWER: Recalls 21T Lawn Tractors Due to Injury Hazard
TIFFIN MOTORHOMES: Recalls 265 Motor Homes Due To Fire Hazard
TOYOTA MOTOR: Recalls 11,592 Tacoma Trucks For Seatbelt Defect
UNIVERSITY OF BERKELEY: PA AG Files Fraud Suit V. "Diploma Mill"
U.S. GRAND PRIX: Lawyers Say Fans Deserve More Than Just Refunds
VAN-CON INC: Recalls 406 2002-05 School Buses For Injury Hazard
VOLKSWAGEN OF AMERICA: Recalls 39,583 Jetta Cars For Fire Hazard
WAL-MART STORES: OK Employees File Suit Over Alleged Retaliation
Asbestos Alert
ASBESTOS LITIGATION: Fibermark Says Lawsuits Were Named in Error
ASBESTOS LITIGATION: Kaiser Aluminum Files Reorganization Plan
ASBESTOS LITIGATION: Halliburton Says KBR Settlements Completed
ASBESTOS LITIGATION: IntriCon Corp's Suits Drop to 117 in 1Q05
ASBESTOS LITIGATION: AIG's Changes in Estimates Raise Reserves
ASBESTOS LITIGATION: Empire State Bldg. Assoc. In Case Limbo
ASBESTOS LITIGATION: Exide's French Subsidiary Faces 45 Claims
ASBESTOS LITIGATION: UK Blaze Prompts Measures to Limit Risks
ASBESTOS LITIGATION: Tyler Pipe Fined US$1.5Mil for 33 Breaches
ASBESTOS LITIGATION: Allianz Considers Claim Reserves Adequate
ASBESTOS LITIGATION: DE Court Sees Upsurge in Asbestos Filings
ASBESTOS LITIGATION: Eircom Deals with Claims from 115 Employees
ASBESTOS LITIGATION: Royal & Sun Alliance Strengthens Reserves
ASBESTOS LITIGATION: Converium Holding Retains $49.2Mil Reserves
ASBESTOS LITIGATION: Wilshire Group to Pay $50T Fine for Breach
ASBESTOS LITIGATION: DNR Results Confirm Safety at Praxair Site
ASBESTOS LITIGATION: Roof Removal in Cyprus Homes to Cost GBP2MM
ASBESTOS LITIGATION: Japan Govt to Take No Action Against Kubota
ASBESTOS LITIGATION: Lehmann Widow to Give Up Battle Against ACC
ASBESTOS LITIGATION: Court Vacancy Impact on FAIR Bill Uncertain
ASBESTOS LITIGATION: Hardie Says Firm Was Always Keen on Payouts
ASBESTOS LITIGATION: USGS Map Spots Asbestos Sites on Eastern US
ASBESTOS LITIGATION: KY County W.D. Fails to Test for Asbestos
ASBESTOS LITIGATION: Flytipped Waste at School Alarms UK Council
ASBESTOS LITIGATION: UN Inspection Uncovers Health Hazards at HQ
ASBESTOS LITIGATION: FM Creditors Withdraw Bid to Hire Lobbyists
ASBESTOS LITIGATION: Tasmanian Govt Seeks to Amend Law on Claims
ASBESTOS LITIGATION: More Japan Firms Link Deaths to Asbestos
ASBESTOS ALERT: Canadian Firm Fined Over Undisclosed Asbestos
ASBESTOS ALERT: OR Court Overturns Judgment in Suit V. La Grand
ASBESTOS ALERT: CA Couple Sues 2 Firms for Bungled Flooring Job
ASBESTOS ALERT: Nichias Links 141 Worker Deaths to Operations
New Securities Fraud Cases
AUTHENTIDATE HOLDING: Marc S. Henzel Files Securities Suit in NY
GUIDANT CORPORATION: Scott + Scott Expands Suit's Class Period
HARLEY-DAVIDSON INC.: Spector Roseman Lodges Stock Lawsuit in WA
NAVARRE COPRORATION: Wechsler Harwood Lodges Stock Lawsuit in MN
UNITED AMERICAN: Schatz & Nobel Files Securities Suit in E.D. MI
*********
BERKELEY PREMIUM: TX AG Abbot Joins Effort V. Unapproved Drugs
--------------------------------------------------------------
Texas Attorney General Greg Abbott joined a multi-state effort
to crack down on sales and fraudulent free "trial offers" of
unapproved drugs sold by Cincinnati, Ohio, businessman Steve
Warshak.
Mr. Abbott filed suit in a Dallas County district court against
Mr. Warshak and his firms: Berkeley Premium Nutraceuticals,
Lifekey Inc., Boland Naturals Inc., Warner Health Care and
Wagner Nutraceuticals. The companies sell 15 products
nationwide with the names Altovis, Enzyte, Mioplex, Numovil,
Suvaril and many others. They lure consumers with advertising
gimmicks such as the "Smiling Bob" Enzyte commercials and others
that resemble advertisements of genuine drugs.
"We believe this businessman is duping consumers on two fronts,"
said Mr. Abbott. "Not only is he advertising that these products
cure diseases when they don't, but we also believe he has
schemed to get consumers' private information for `free trials'
of products in order to ship products later and bill them. I am
asking the court to order refunds for these consumers and put a
stop to these practices."
Mr. Warshak manufactures, markets and distributes various
nutritional products and dietary supplements and advertises
"free trial offers" nationally on TV, radio and the Internet, as
well as through direct mail. The companies tout the products,
packaged to resemble genuine pharmaceutical drugs, as useful in
treating or preventing various diseases. However, no case
studies exist to support such claims and the U.S. Food and Drug
Administration has not approved these products for use as drugs.
In addition, Mr. Abbott, joined by Arkansas, Ohio, Illinois,
North Carolina and Oregon, contends the "trial offer" that
consumers can obtain by toll-free call or Internet is a ruse to
obtain credit card information. The company advertises the offer
initially as a 30-day free trial, but does not tell consumers up
front that they will continued to be billed for the product if
they do not cancel future orders.
When consumers complained about being billed after this initial
period for up to an additional 60 days, representatives
explained that, to achieve optimum results, the consumers should
take the products for at least 90 days. The company also made it
difficult for consumers to stop these billings.
Mr. Abbott is requesting civil penalties of $25,000 per
violation of the Texas Food, Drug and Cosmetic Act, and $20,000
per violation of the Texas Deceptive Trade Practices Act, as
well as an injunction to stop such practices.
BRIDGESTONE FIRESTONE: Firm Files CA Suit, Seeks Recall of Tires
----------------------------------------------------------------
The Pasadena law firm of Lisoni & Lisoni initiated a federal
class action lawsuit against Bridgestone Firestone North
American Tires LLC and Bridgestone Firestone Corporation, which
seeks damages and the recall of 30 million Firestone Steeltex
tires the firm says are defective, The Whittier Daily News
reports. The suit, filed in the United States District Court in
Los Angeles, California, involves Firestone Steeltex R4S, R4SII
and A/T tires.
According to Joseph L. Lisoni, who operates the law firm along
with his wife, Gail, "This case has been going on for five
years, and pursuant to President Bush's request that these big
class actions be filed in federal court, we put it in federal
court." The action was initially filed August 12, 2002, in
Riverside Superior Court.
Mr. Lisoni told the Whittier Daily News that the National
Highway Traffic & Safety Administration has on three occasions
denied their petitions to recall the tires, but instead settled
for the recall of 490,000 Firestone Steeltex A/T tires in
February 2004.
Early last year when Bridgestone Firestone made the recall, the
tires was being linked to SUV crashes that killed five people.
Bridgestone manufactured 30 million Steeltex R4S, R4SII, and A/T
tires, which come as original factory equipment on Ford and GMC
pickup trucks and SUVs as well as on ambulances and motor homes.
Additionally, Mr. Lisoni told Whittier Daily News that Firestone
Steeltex tires are failing all over the country, causing
property damage, injury accidents and more than 50 deaths to
date.
BLUE BIRD: Recalls 45 Ultra LF Buses For Injury, Accident Risk
--------------------------------------------------------------
Blue Bird Body Company is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 45 Ultra
LF commercial buses, models 2003-2006.
On these commercial buses equipped with vapor door assemblies,
the two piece curved connecting rods, when used as an element of
the door actuation linkage in conjunction with a vapor medium
pneumatic differential engine, may be subject to fatigue failure
resulting in bending or breaking of the connecting rod.
A broken connecting rod can allow the door panel to move freely
in an uncontrolled manner, leaving passengers inside the vehicle
unprotected by the door panel and enabling a protruding door
panel to strike persons or objects outside the vehicle.
The Company is working with Vapor Bus International to notify
owners and have the repair performed on their vehicles. The
remedy consists of replacing the two piece connecting rod with a
one piece connecting rod. The manufacturer has not yet provided
an owner notification schedule. For more details, contact the
Company by Phone: 478-822-2242, contact Vapor by Phone:
847-777-6400 or contact the NHTSA Auto Safety Hotline:
1-888-327-4236.
COACHMEN RV: Recalls 135 Motor Homes Because Of Fire Hazard
-----------------------------------------------------------
Coachmen RV Company, LLC is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 135 motor homes, namely:
(1) COACHMEN / CROSS COUNTRY, model 2005
(2) COACHMEN / SPORTSCOACH ELITE, model 2005
(3) COACHMEN / SPORTSCOACH ENCORE, model 2005
On these motor homes, containing a 50 amp transfer switch built
by Intellitec, the material used for the wire lugs was changed
from nickel plated to copper lugs. The copper lugs are softer
than the nickel-plated lugs and do not retain the torque of the
screw that clamps the wire connector. When the torque is
relaxed, the lugs can become loose resulting in excessive heat
within the connected wire that could result in a fire.
The Company will be working with Intellitec to notify owners and
have the repair performed on their vehicles. For more details,
contact the Company by Phone: 1-574-825-1174, or contact the
NHTSA's auto safety hotline: 1-888-327-4236.
DOREL JUVENILE: Issues Alert on Safety of 1st Tubside Bath Seats
----------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Dorel Juvenile Group, of Columbus, Indiana, warns
parents and caregivers who purchased the Safety 1st Tubside Bath
Seats. The company has sold about 250,000 units to date. The
bath seats are not intended and should not be used with certain
non-traditional or sunken bathtubs. In these types of tubs, the
bath seat can break, tip over and a child can fall into the
water.
Dorel Juvenile Group has received nine reports of breakage due
to use of Tubside Bath Seats in non-traditional or sunken
bathtubs. An additional 67 reports of breakage due to handling,
assembly and unknown reasons also were received. There was one
report of a child bumping his forehead when a bath seat tipped
over in a non-traditional tub, resulting in a bruise.
These Safety 1st Tubside Bath Seats have model number 44301
engraved on the bottom of the base. "Safety 1st" is printed on
the front of the units. They are white and blue, have a swivel
seat and an elbow cushion on the attachment arm. These seats are
intended for use with children from 5 months to 10 months of
age.
Consumers are urged to ensure that these bath seats are used in
accordance with the instructions:
(1) This product is NOT for use with the following style
tubs: Tubs with edge width less than 3 « inches or
greater than 5 « inches, Tubs with depth (top to
bottom) less than 12 inches or greater than 15 inches,
and Free standing (legged or pedestal), oval, drop-in,
or spa type tubs
(2) DO NOT use the bath seat if the Red Warning Label on
the arm is exposed.
(3) ALWAYS keep child within arm's reach. Children have
drowned when left unattended in bath seats.
Discount department and other mass merchants sold these bath
seats from December 2003 through August 2004 for about $20.
Consumers who have a Tubside Bath Seat should check the
dimension of their tubs. If they have a non-traditional or
sunken bathtub outside the specified dimensions, or have a
broken unit the consumer should immediately stop using the
Tubside Bath Seat and contact the firm for information on how to
get a $20 rebate toward the purchase of any other Dorel Juvenile
Group product. Consumers should not return product to retail
stores.
For more information, contact Dorel Juvenile Group at
(888) 698-6681 between 8 a.m. and 4:30 p.m. Monday through
Friday or visit the firm's Web site: http://www.safety1st.com.
DUPONT CORPORATION: Reaches Resolution For RI Lead Litigation
-------------------------------------------------------------
DuPont Corporation will make a multimillion-dollar contribution
to the Children's Health Forum (CHF) for lead paint remediation,
public education, and compliance programs in Rhode Island. CHF
is a national non-profit organization focused on preventing
childhood exposures to lead hazards, Rhode Island Attorney
General Patrick C. Lynch announced in a statement dated June
30,2005.
Mr. Lynch also announced that the State of Rhode Island has
moved to dismiss the Company from the pending public-nuisance
litigation filed against the Lead Industries Association Inc.
Lawyers for Mr. Lynch's office filed a motion to dismiss the
Company from the lawsuit with the Rhode Island Superior Court on
June 30,2005. There is no settlement agreement.
The retrial against the remaining six defendants-Atlantic
Richfield, American Cyanamid, ConAgra, Millennium, NL
Industries, and Sherwin Williams-is scheduled to start in
September before Superior Court Associate Justice Michael A.
Silverstein. The State's first trial against the lead-pigment
companies, which, Mr. Lynch maintains, made and sold lead-based
paint for decades despite knowing its harmful health effects,
especially on children, ended with a hung jury in October 2002.
"From the outset, I've said that my office would pursue this
litigation for the explicit purpose of ensuring that the
children of Rhode Island-particularly those in the inner cities-
are protected from the hazards of lead poisoning," Mr. Lynch
said. "What makes this announcement so gratifying is that this
money will go straight to cleaning up the mess. It presents a
great opportunity for the Attorney General's Office to make a
real and lasting impact on the health and safety of Rhode
Island's children."
The Company also will contribute $1 million to the Brown
University Medical School, to assess the ways in which this
important public health problem can be better addressed, Mr.
Lynch announced.
"I'm hopeful that our next generation of doctors will be able to
see the difference we all made by seizing this opportunity and
cleaning up our community," said Mr. Lynch. "I look forward to
the day when Rhode Island communities are fully protected from
this widespread and persistent problem."
For more details, visit the Website: http://www.riag.ri.gov/
FIRST CREDIT: To Pay $20T Fine For Harassing Consumers in PA
------------------------------------------------------------
An Illinois-based debt collection company will pay $20,000 in
fines and costs following claims that it used threatening,
abusive and harassing tactics when contacting Pennsylvania
consumers located in Allegheny, Berks, Crawford, Fulton, Mercer,
Northampton and York counties, Pennsylvania Attorney General Tom
Corbett announced in a statement.
Mr. Corbett said his Bureau of Consumer Protection took action
against First Credit Services Inc., doing business as Stanley
Weinberg & Associates, 1200 Roosevelt Road, Glen Ellyn,
Illinois. The action resolves alleged violations of
Pennsylvania's Consumer Protection Law, Fair Credit Extension
Uniformity Act and the federal Fair Debt Collection Practices
Act.
Investigators said company employees typically contacted
consumers by telephone in an attempt to collect past due
financial obligations. In several cases, consumers complained
that the callers used overly aggressive and abusive tactics
including illegally contacting neighbors, family members,
friends and employers in an attempt to collect the debts owed.
According to the legal action, the company allegedly:
(1) Repeatedly called consumers with the intent to abuse,
annoy or harass.
(2) Used profane, obscene or other abusive language.
(3) Made an unreasonable number of calls to consumers in a
short period of time.
(4) Contacted third parties to inform them that consumer
owes a debt.
(5) Contacted consumer's place of employment when
representatives knew such calls were prohibited.
(6) Falsely claimed to be an attorney or from a law firm.
(7) Falsely represented the legal status of any debt.
(8) Used deceptive means to collect debts or obtain
financial status of consumers including falsely
claiming to order a credit report to obtain asset
information.
"Consumers must know that abusive, harassing and threatening
behavior on the part of a debt collector is illegal in
Pennsylvania," Mr. Corbett said. "In this particular case, we
heard from residents who claimed to have been told that their
salaries would be garnished, their homes would be taken away and
that they were in serious legal trouble."
Mr. Corbett said an elderly York County woman complained that
the company contacted her neighbor claiming to be a Pittsburgh
law firm with an urgent matter involving the consumer. Another
consumer from Berks County said that the company contacted her
parents to inform them that their daughter was in serious
trouble with the law. She said the company also continued to
contact her at work even though she repeatedly asked them to
cease calling.
Under the terms of the legal agreement, the company is
permanently barred from violating state and federal debt
collection laws. In addition, First Credit Services will pay
$20,000 in civil penalties and investigation costs.
The legal agreement was filed in Commonwealth Court. The case
was handled by Senior Deputy Attorney General John M. Abel of
Corbett's Bureau of Consumer Protection in Allentown. For more
details, contact the Pennsylvania Office of Attorney General,
Strawberry Square, Harrisburg, PA 17120 by phone: 717-787-3391
or visit the Website: http://www.attorneygeneral.gov.
FOUR WINDS: Recalls 26 Majestic Motor Homes Due to Fire Hazard
--------------------------------------------------------------
Four Winds International is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 25 Majestic motor homes, model 2006.
On these motorhomes, built on Ford Chassis Cab vehicles equipped
with 5.4L or 6.8L gasoline engines, the fuel jumper line may
have an incorrect end form. The fuel line may separate at the
connection to the main fuel bundle. If the fuel line separates,
an operator may notice a gasoline odor and/or fuel on the
ground, loss of power and the engine will eventually stall.
Fuel leakage in the presence of an ignition source could result
in a fire.
The Company is working with Ford to notify owners and have the
repair performed on their vehicles. Ford dealers will install
an external retention clip at the fuel jumper line to the main
fuel bundle connection. The recall is expected to begin during
July 2005. For more details, contact Ford by Phone:
1-800-392-3673, the Company by Phone: 1-574-266-1111, or contact
the NHTSA's auto safety hotline: 1-888-327-4236
(TTY 1-800-424-9153), or visit the Website:
http://www.safercar.gov.
GALLAGHER & CO.: IL Judge Sets Hearing Date For Fiduciary Suit
--------------------------------------------------------------
Madison County Circuit Judge Philip Kardis scheduled a July 14
hearing date for Chicago-based Gallagher & Co.'s motion to
dismiss a lawsuit over contingency fees, The Madison County
Record reports.
According to court documents, a day after the Illinois insurance
broker Arthur J. Gallagher said that the company would no longer
collect the now-controversial contingency fees from insurance
companies, East Alton plaintiff's firm SimmonsCooper initiated a
class action lawsuit on October 27, 2004, claiming Gallagher &
Co. breached its fiduciary duties.
Represented by Stephen Tillery, SimmonsCooper claims that
Gallagher & Co.'s receipt of commissions from insurance
companies for insuring its clients was "ill-gotten."
SimmonsCooper, the named plaintiff in the suit is claiming that
it purchased health and life insurance through Gallagher, which
is the world's fourth largest insurance broker.
The firm claims in its suit, "Plaintiff seeks the disgorgement
of all monies from commissions received by Gallagher during the
period which Gallagher engaged in deceptive acts and practices.
These sums constitute ill-gotten gains acquired at the expense
of SimmonsCooper and other people who trusted and relied upon
Gallagher to treat them honestly and fairly."
Additionally, SimmonsCooper claims that Gallagher's alleged
concealment caused them to pay higher premium rates to insurance
companies, and had they been truthful, they could have utilized
the information to obtain a lower premium.
The suit is seeking an order certifying the class and appointing
Mr. Tillery as counsel to represent the class, an order
requiring Gallagher to disgorge all monies it received during
the period it received undisclosed contingent commissions,
punitive damages, pre-judgment interest, and an award for
reasonable attorneys' fees and costs.
Theodore MacDonald of Burroughs, Hepler, Broom, MacDonald,
Hebrank, and True of Edwardsville represent Gallagher & Co. in
the case.
GENERAL MOTORS: Recalls 6,698 Vehicles Because Of Crash Hazard
--------------------------------------------------------------
General Motors Corporation is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 6,698 vehicles, namely:
(1) CHEVROLET / KODIAK, models 2003-2005
(2) GMC / TOPKICK, models 2003-2005
Certain 2003-2005 Model Year 4500/5500 Series Chevrolet Kodiak,
School Bus Chassis and GMC Topkick Vehicles and 2003-2004 Model
Year GMS School Bus Chassis vehicles equipped with an 8.1L
Engine and Hydromax Brake System have a power steering hose that
may come into contact with a portion of the intermediate
steering shaft. A hole could be worn in the hose and a loss of
hydraulic fluid would occur.
If there is sufficient amount of fluid loss, the driver will
hear a noise from the power steering pump, the brake warning
light and warning tone will activate. Increased effort may be
required for steering and braking, increasing the risk of a
crash.
The Company will notify its customers and dealers will reroute
the power steering hose. If the steel braiding of the hose is
exposed, dealers are to replace the hose. This remedy will be
at no charge to the consumer. The recall is expected to begin
July 5,2005. For more details, contact Chevrolet by Phone:
800-630-2438 or GMC by Phone: 866-996-9463 or contact NHTSA's
auto safety hotline: 1-888-327-4236.
HURRICANE ROOFING: PA Attorney General Files Consumer Fraud Suit
----------------------------------------------------------------
Attorney General Tom Corbett's Bureau of Consumer Protection
filed a lawsuit against a Lackawanna County home improvement
contractor who allegedly accepted thousands of dollars from
consumers for contracted roof work that was either never started
or shoddy. The suit seeks to permanently prohibit the
contractor from operating in the state until all consumer
restitution is paid.
Mr. Corbett identified the defendant as Ben Hannon, the owner of
Hurricane Roofing & Construction Company, 526 Cameron Ave.,
Scranton. The suit alleges numerous violations of
Pennsylvania's Unfair Trade Practices and Consumer Protection
Law.
Investigators said Mr. Hannon entered into contracts with
consumers to perform roof work on their homes. Prior to starting
the jobs, Mr. Hannon required a deposit that typically
represented half of the total contract costs. Consumers stated
that they paid Mr. Hannon between $1,000 and $4,000 in deposits
to begin their projects.
Mr. Corbett said his office heard from five consumers who each
claimed that they paid Mr. Hannon a deposit and he failed to
show-up at their homes to begin the work. In two other cases,
Mr. Hannon allegedly performed shoddy roof work and failed to
make the needed repairs.
"We're asking the court to permanently prohibit Ben Hannon from
entering into new contracts with consumers until he fully
refunds the homeowners whom we have identified as victims in our
lawsuit," Mr. Corbett said. "These alleged business practices
are both intolerable and illegal and if allowed to continue,
could result in additional homeowners being defrauded."
According to the lawsuit, a Clarks Summit couple paid Mr. Hannon
a $4,000 deposit on a contract to install a new roof. Mr.
Hannon cashed the check and promised to begin work within a
week. Despite numerous desperate calls from the homeowners, Mr.
Hannon never returned to perform the work nor did he refund the
couple's money.
A similar complaint was received by a consumer located in
Peckville who said she paid the defendant $2,400 to perform roof
repairs on her home. In a formal complaint filed with Mr.
Corbett's office, the consumer said Mr. Hannon accepted the
payment and she never saw him again nor did he return any of her
calls requesting a refund.
The suit also accuses Mr. Hannon of performing shoddy roof work
on two consumers' homes. In one instance, a Scranton homeowner
said his roof began to leak just three weeks after Mr. Hannon
repaired it. He said the defendant refused to return to the job
site and correct the problem or refund the $900 payment.
In addition, the complaint accuses Mr. Hannon of failing to
provide consumers with a required notification of their legal
right to cancel a contract within three business days. The
Commonwealth also claims that Mr. Hannon failed to register his
business with the Pennsylvania Department of State as required
under the Fictitious Names Act.
Mr. Corbett said the lawsuit asks the court to require the
defendant to:
(1) Permanently cease conducting business in the state
until the restitution sought in the complaint is paid
to consumers.
(2) Refund consumers who come forward with legitimate
complaints.
(3) Pay civil penalties of $1,000 per violation and $3,000
for each violation involving a consumer age 60 or
older.
(4) Pay the Commonwealth's investigation costs.
(5) Appoint a receiver to determine and collect Hannon's
assets to satisfy the order.
Homeowners who suspect that they are entitled to restitution in
this case are asked to contact Mr. Corbett's Office at
1-800-441-2555 to obtain a complaint form. Complaints can be
filed electronically by visiting Mr. Corbett's Website:
http://www.attorneygeneral.gov.
The lawsuit was filed in Lackawanna County Court. The case is
being handled by Senior Deputy Attorney General J.P. McGowan in
Corbett's Bureau of Consumer Protection Office in Scranton.
ILLINOIS: Judge Dismisses Lawsuit Seeking Reparations For Slaves
----------------------------------------------------------------
R.J. Reynolds Tobacco Co., JP Morgan Chase & Co. and 15 other
companies won dismissal of a federal lawsuit that requested
reparations for the enslavement of Africans in the United States
more than 140 years ago, The Winston-Salem Journal reports.
The victory the companies earned comes from a recent ruling by
Judge Charles Norgle of U.S. District Court in Chicago, which
stated that the plaintiffs failed to show any injury done to
them that can be traced to the companies. He ruled that the
courts couldn't resolve a question as broad as what is owed to
the descendants of slaves.
In dismissing the case with prejudice, the judge wrote in his
ruling, "The historical record clearly shows that the President
and Congress have the constitutional authority to determine the
nature and scope of the relief sought in this case, not the
courts."
Previously in January 2004, Judge Norgle dismissed the case
without prejudice, which allowed the plaintiffs to amend their
complaint. The lawsuit was one of four filed in 2002 that asked
for restitution, punitive damages and the creation of a
historical commission to study the companies' actions before the
U.S. Civil War ended more than 200 years of slavery in North
America in 1865.
The reparations lawsuits, which all requested class action
status for descendants of slaves in the United States, were
filed in California, Illinois, Louisiana and New York. They were
transferred to Judge Norgle's Chicago court in October 2002.
An attorney for the plaintiffs, Benjamin Obi Nwoye, told the
Winston-Salem Journal that though he hadn't seen the decision
yet he plans to appeal. He further told Winston-Salem Journal,
"We obviously are disappointed by the dismissal, but this is not
a fight that will end with the District Court's decision. We are
hopeful that we will get justices who are fair-minded so the
descendants of slaves can be repaid for the work of their
forefathers."
The other defendants named in the reparations suits were:
FleetBoston Financial Corporation, CSX Corporation, Aetna Inc.,
Brown Brothers Harriman & Co., New York Life Insurance Co.,
Norfolk Southern Corp., Lehman Brothers Corp., Lloyd's of
London, Union Pacific Railroad, Brown & Williamson, Liggett
Group Inc., Canadian National Railway, Southern Mutual Insurance
Co., American International Group and Loews Corporation.
JMC INVESTMENTS: RI AG Lynch Seeks TRO Due To Homeowner Fraud
-------------------------------------------------------------
Rhode Island Attorney General Patrick C. Lynch's office filed a
Verified Complaint and a Motion for a Temporary Restraining
Order (TRO) in Providence County Superior Court, naming
businesses and individuals engaged in a scam that is costing
Rhode Islanders their homes. The case was brought before
Associate Justice Daniel A. Procaccini in Providence County
Superior Court on June 30,2005.
Judge Procaccini granted the Attorney General's Motion for a TRO
that will remain in effect until a Preliminary Injunction
hearing, slated for July 20th, is held. The TRO enjoins the
defendants from any communication or contact with the three
complainants and restrains the defendants from transferring or
conveying any property associated with the complainants, as well
as any property of current or new customers or homeowners.
The Court filing, naming JMC Investments LLC, 45 Shawmut LLC,
Michael Solotke, Rick Simpson, and Ronnie C. Ramos, alleges that
shortly after foreclosure notices were published in the local
paper, JMC and/or Shawmut and/or their employees or agents
solicited individual homeowners, claiming that they could save
the house from foreclosure by offering a reduced and affordable
monthly payment scheduled.
To date, a Johnston woman, a Providence woman, and a Cranston
couple have filed complaints with the Attorney General's Office.
Each complainant specifically expressed that they did not want
to sell their property and were assured by the defendants that
foreclosure could be avoided without selling their homes.
Believing the defendants' promises that they would maintain
ownership of their homes, the complainants signed various
documents. At the time of the transactions, copies of some or
most of the documents were not provided to the complainants.
When, at a later date, the complainants attempted to either
refinance the mortgage or sell the property, it was discovered
that they had unknowingly and unintentionally executed deeds
conveying their homes to 45 Shawmut LLC.
"What these individuals did not know," Mr. Lynch said, "was that
when they signed on the dotted line, they signed their homes
away. As a direct and proximate result of the defendants'
fraudulent actions and misrepresentations, the complainants no
longer have an interest in their personal residences. The
execution of the deeds has resulted in the conveyance of their
interests in the properties to Shawmut. And in each of the
instances involving the complaints we've received, the fair
market value of the real estate is substantially higher than the
outstanding liens."
Mr. Lynch said that JMC is falsely advertising its services via
mail and on the Internet as a foreclosure specialist helping
homeowners save their homes from being sold at foreclosure by
offering various solutions. "Their advertisements warn
prospective clients against real estate agencies that will sell
property at very little or no profit to the owner," Mr. Lynch
said. "But that is exactly what JMC does. The bottom line for
consumers is to beware of signing any papers without adequate
knowledge or legal representation. You run the risk of not only
having the rug-but your home, as well-pulled right out from
under you."
The sparse documentation provided to consumers, Mr. Lynch said,
is clear evidence that the defendants were not disclosing the
true nature of the transactions. There are no documents
providing the terms and conditions of refinancing nor is there
evidence that the original mortgages have been, or will be,
discharged. There are no disclosures indicating the principal
amount, interest rates, interest payments, fees, or terms of the
loans. The rights and obligations of the parties, as would
normally be stated in a mortgage or a note, are nowhere to be
found.
Rhode Island General Laws gives Superior Court the jurisdiction
to issue temporary or permanent injunctions to restrain and
prevent violations of the Unfair Trade Practices and Consumer
Protection Act and to make any additional judgments that may be
necessary to restore monies or property that may have been
acquired by means of any practice declared to be unlawful.
"These unscrupulous actions have caused irreparable harm to
Rhode Island consumers," Mr. Lynch said. "To take advantage of
people who are extremely vulnerable due to enormous financial
pressures is nothing short of despicable."
JMC Investments, LLC and 45 Shawmut LLC, are limited liability
companies with a principal place of business at 45 Shawmut
Avenue, Central Falls. Rick Simpson of Pawtucket, Michael
Solotke of Riverside, and Ronnie Ramos of Cumberland, are
principals, agents, and/or employees of JMC and/or 45 Shawmut.
Stating that there is reason to believe that others have been
victimized by this scam, Mr. Lynch urges victims, or anyone with
information or questions, to contact his office's Consumer
Protection Unit at 401/274-4400, pressing "1" at the first
voicemail prompt, and then "1" again, or visit the Website:
http://www.riag.ri.gov/
K. JAMES: Barred From Doing Business Due To PA Consumer Fraud
-------------------------------------------------------------
A Cambria County home improvement contractor is barred from
conducting business in the state until more than $6,000 is
returned to consumers who hired him to perform various home
improvement projects that he never started, Pennsylvania
Attorney General Tom Corbett announced in a statement. The
contractor will also pay $3,000 in fines and investigation
costs.
Mr. Corbett said a legal agreement was reached with his Bureau
of Consumer Protection and Kevin W. James, individually, and
doing business as K. James Roofing and Remodeling, 1717 Winter
St., Johnstown, Cambria County. Investigators said Mr. James
through July 2004 violated the state's Consumer Protection Law
by failing to honor the contracts that he entered into with
homeowners located in Cambria and Somerset counties.
In one case, a Somerset County couple hired Mr. James to replace
the roof on their home in Davidsville. The couple paid him a
down payment of nearly $2,500 and was told that work on the roof
would begin immediately. He failed to start any of the repairs
as promised in their signed contract. The couple stated that
repeated calls to the contractor went unanswered and when they
finally did reach him, he indicated that he "had no money" and
that he "was not going to jail."
In another consumer complaint, a Cambria County consumer said he
wrote Mr. James a check for $527 to perform remodeling work on
his home immediately. The consumer said he failed to show-up to
start the repairs and after numerous telephone calls informed
the homeowner that his money would be returned. According to
the consumer, Mr. James claimed that the consumer's refund check
was in the mail. The homeowner said he never received a refund
after Mr. James cashed his check.
"The allegations against Mr. James are serious," Mr. Corbett
said. "He's accused of breaking state law and violating the
trust of several consumers by accepting payment to perform
various jobs and then refusing to deliver on those promises or
return consumers' money."
The court agreement requires Mr. James to:
(1) Forfeit his right to conduct business in Pennsylvania as
a home improvement contractor until $6,000 in
restitution is paid to six consumers.
(2) Pay $3,000 in fines and the Commonwealth's
investigation costs.
(3) Permanently cease violating Pennsylvania's Consumer
Protection Law.
The "Assurance of Voluntary Compliance" agreement was filed in
Cambria County Court. The case was handled by Deputy Attorney
General Margie A. Anderson of Corbett's Bureau of Consumer
Protection in Ebensburg. For more details, contact the
Pennsylvania Office of Attorney General, Strawberry Square,
Harrisburg, PA 17120, Phone: 717-787-3391 or visit the Website:
http://www.attorneygeneral.gov.
LAND ROVER: Recalls 2,845 Freelander SUVs Due To Injury Hazard
--------------------------------------------------------------
Land Rover is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by voluntarily recalling 2,845
Freelander sport utility vehicles, models 2002-2005.
On these vehicles, it is possible to operate the interior door
handle to open the door when the child safety lever is in the
"on" position. The occupant may open the door inadvertently
while the vehicle is in motion and fall out into the traffic,
causing possible personal injury.
Dealers will inspect and replace the latch assembly. The
manufacturer has not yet provided an owner notification
schedule. For more details, contact the Company by Phone:
1-800-637-6837 or contact the NHTSA's auto safety hotline:
1-888-327-4236 (TTY: 1-800-424-9153); or visit the Website:
http://www.safercar.gov.
MASSACHUSETTS: MWRA, BWSC Close to Settling Suit Over Flooding
--------------------------------------------------------------
Approximately a decade after two massive rainstorms caused a
sewer line to flood at least a hundred homes in Roslindale with
raw sewage, the Massachusetts Water Resources Authority (MWRA)
and the Boston Water and Sewer Commission (BWSC) are close to
settling a multimillion-dollar class action lawsuit, The West
Roxbury & Roslindale Transcript reports.
An unidentified person involved in the deal told West Roxbury &
Roslindale Transcript that the settlement totals about $6
million. Additionally, a spokeswoman for the MWRA confirmed the
settlement in principle, but she stressed that it didn't know
when the money would be finalized, released or distributed.
Spokeswoman Ria Convery told the West Roxbury & Roslindale
Transcript, "It's hard to tell how long it takes [for a final
settlement]. The hard part is getting the settlement in
principle." Ms. Convery though declined to discuss any specifics
of the deal.
Jeanne Richardson, a spokeswoman for the Boston Water and Sewer
Commission also declined to comment saying only, "There's been
an ongoing discussion for a few years."
According individuals familiar with the two organizations, the
MWRA is a quasi-public government agency and has a board of
directors, rather than the governor's office, making decisions,
while the Boston Water and Sewer Commission is independent of
the city and has a board of commissioners. More than 200
neighbors who said they had raw sewage flood their houses filed
the class action lawsuit in 1999.
Jamy Buchanan, the lawyer representing the residents told the
West Roxbury & Roslindale Transcript, "After all these years,
the ultimate settlement will be a great step forward for justice
and for all these people in this neighborhood who have worked
very hard." Ms. Buchanan said though that she would neither
confirm nor deny a potential settlement.
In a 1999 West Roxbury & Roslindale Transcript article, Mt.
Buchanan said that they tried to resolve the dispute, but the
MWRA at the time did not believe it was liable, and called the
flooding an "act of God."
In that same article, Ms. Convery told the West Roxbury &
Roslindale Transcript that the sewer lines were designed for 25-
year storms, but not the two 50-year storms that swept Boston in
1996. She reiterates, "It was more than the system was designed
for. About 99.9 percent of the time, we're cool."
MAYTAG CORPORATION: Faces Suit Over Deceptive Business Outlook
--------------------------------------------------------------
Barry Yellen, a New York-based investment adviser and trustee
for trust fund clients initiated a lawsuit, which accuses Maytag
Corporation and two top executives of deceiving the public about
the company's business outlook this spring, The Associated Press
reports.
Filed in U.S. District Court in New York, the suit alleges that
the deception in March prompted thousands of people to buy the
company's stock at artificially inflated prices that later
plummeted. It goes on to allege that the Newton-based company,
chairman and CEO Ralph Hake and executive vice president and CFO
George Moore were trying to push up the purchase price of the
company. Maytag disclosed that it was for sale in May, after the
stock price had dropped.
Mr. Yellen's lawyers are seeking class action status on behalf
of all buyers of Maytag stock between March 7 and April 21.
According to Ralph Stone, a New York lawyer representing Mr.
Yellen, the amount of alleged damages to all stock buyers could
run into the tens of millions dollars, although it hasn't yet
been calculated. George LaMarca of the Des Moines law firm
LaMarca & Landry also represents Mr. Yellen.
The suit is accusing the defendants of violating sections of the
U.S. Securities Exchange Act and seeks unspecified compensatory
damages and other relief.
In addition, the lawsuit also accuses the defendants knowing in
February that internal forecasts had been reduced to less than
$1 a share, and that the company had "missed its 2005 business
plan forecast for January by an enormous 78 percent." It also
alleges that Maytag overstated projections to inflate its stock
price and attract buyers get a higher offer from Ripplewood
Holdings of New York, which was in a potential deal with Maytag.
MERCK & CO.: Texas Attorney General Abbot Launches Vioxx Lawsuit
----------------------------------------------------------------
Texas Attorney General Greg Abbott filed a lawsuit against one
of the largest drug companies in the nation for misrepresenting
the safety of the painkilling prescription drug Vioxx. The
company also falsely touted the safety of the drug, knowing it
caused a higher risk of heart attack and cardiovascular
problems. Despite those potential health hazards, the company
still pushed to place Vioxx on the state's Medicaid list for
approved medicines.
Mr. Abbott alleges Merck & Co. of New Jersey aggressively
marketed the drug to the medical community, and in doing so,
willfully misrepresented its own studies and the concerns of
physicians suggesting the drug may increase the risk of heart
problems. The Texas Medicaid program reimbursed pharmacists $56
million for Vioxx prescriptions they filled for patients over a
five-year period. Mr. Abbott is invoking a provision in state
law that allows for that amount to be automatically tripled to
$168 million, which Merck would have to pay to the state of
Texas for acts of fraud.
"This is a prime example of a company's drive for profit
steamrolling its duty to be safe," Mr. Abbott said. "Drug
companies have an ethical, legal and professional responsibility
to conduct meticulous clinical studies to ensure the safety and
effectiveness of drugs for human consumption. Yet in this case,
Merck took extreme measures to get this drug approved for
widespread use, including for Medicaid patients, without the
proper respect for good science and the concerns of peers."
Merck, which began marketing Vioxx in 1999 after brief clinical
trials, finally conceded the health concerns and voluntarily
withdrew the product in September 2004. The suit claims Merck's
costly promotional campaign aimed to convince consumers the drug
was not only safe, but that they should demand it from their
health care professionals for pain. The company also allegedly
tried to intimidate or threaten physicians and researchers who
questioned the safety of Vioxx. The company even routinely
misrepresented or concealed published evidence, including its
own, showing possible harmful effects of the drug.
The Medicaid program reimbursed pharmacists for Vioxx
prescriptions at the rate of about $1.94 per 25-milligram pill,
the most commonly prescribed dosage. Pharmacists filled more
than 700,000 prescriptions under the Medicaid program in these
years, accounting for over 29 million pills.
If the facts about Vioxx had been known earlier, Mr. Abbott
contends, physicians and their Medicaid patients would have
chosen other nonsteroidal, anti-inflammatory agents like generic
naproxen, which costs about $0.33 per daily equivalent dose.
According to the lawsuit, the company's repeated failure to
disclose the adverse effects of Vioxx, while offering it to the
state's Medicaid program as a safe painkiller, directly violates
the Texas Medicaid Fraud Prevention Act. The Attorney General
requests restitution to the state of Texas, plus interest, for
all Medicaid payments made to the company for Vioxx
prescriptions, as well as civil penalties of up to $10,000 per
violation of this law.
Mr. Abbott continues in his efforts to crack down on companies
that have defrauded the Texas Medicaid program and taxpayers.
Distinguishable from the Vioxx case, many of these lawsuits have
often relied on insider information and whistleblowers as
sources.
In May 2004 the drug giants Schering-Plough and Warrick
Pharmaceuticals settled a long-fought Texas whistleblower
lawsuit and returned $27 million to the Texas program after the
state exposed an unlawful wholesale pricing scheme. Dey Inc.
settled a similar case for $18.5 million in June 2003. Earlier
this month, ResCare Inc. settled a whisteblower case involving
one of its Fort Worth subsidiaries, The Citadel Group Inc., for
$2.15 million. Attorney General Abbott has also joined multi-
state efforts and the federal government in the past to recover
tens of millions of dollars for the state of Texas.
To view the complaint, visit this Website:
http://www.oag.state.tx.us/newspubs/releases/2005/063005vioxx.pd
f.
MID BUS: Recalls 2,706 School Buses Due To Defective Microswitch
----------------------------------------------------------------
Mid Bus Corporation is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 2,706
school buses, namely:
(1) MID BUS / GUIDE DW, model 2002-2005
(2) MID BUS / GUIDE SW, model 2002-2005
(3) MID BUS / GUIDE XL, model 2002-2005
(4) MID BUS / SC, model 2002-2005
These Mid Bus 2002-2005 model year guide DX, Guide SW, Guide XL
and SC School buses, manufactured between January 7,2002 and
April 30,2005, have microswitches that are used internally to
position the stop arm sign in the open and closed positions.
These microswitches may malfunction in extremely cold weather,
causing the sign to open or close in an improper position or not
to open at all. Should the stop arm not perform properly, a
child or pedestrian may be endangered by passing motorists
should the motorist not stop at the correct location.
The Company will notify its customers and replace the original
switch with a switch pack that is not sensitive to extreme cold
weather and will inspect to ensure the microswitch heater wiring
is properly connected, free of charge. The recall is expected
to begin on August 2005. For more details, contact the Company
by Phone: 419-358-2500 or contact the NHTSA Auto Safety Hotline:
1-888-327-4236.
MITSUBISHI MOTORS: Recalls 3,760 Eclipse Cars For Crash Hazard
--------------------------------------------------------------
Mitsubishi Motors North America, Inc. is cooperating with the
National Highway Traffic Safety Administration by voluntarily
recalling 3,760 Mitsubishi Eclipse cars, model 2006.
On certain Eclipses, one of the four seals inside the master
cylinder may have been installed improperly. As a result, the
master cylinder may unexpectedly bypass hydraulic braking force
pressure and allow a longer than normal pedal stroke. Should
this condition occur, the braking distance required to stop the
vehicle may increase and could lead to a vehicle crash.
Dealers will replace the master cylinder assembly. The recall
is expected to begin on June 28,2005. For more details, contact
the Company by Phone: 1-888-648-7820 or contact the NHTSA's auto
safety hotline: 1-888-327-4236.
ROLF PRIMA: Recalls 879 Bicycle Rear Wheels Due to Injury Hazard
----------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Rolf Prima Inc., of Eugene, Oregon is voluntarily
recalling about 879 units of 2003 Rolf Prima Vigor and Elan
Bicycle Wheels (rear wheel only).
The rear wheel freehub mechanism can malfunction causing no
resistance when pedaling. The bicycle rider could lose balance,
fall and suffer injuries.
These 2003 Rolf Prima Vigor and Elan wheels were sold in a front
and rear wheel set. Only the rear wheel is affected. "Rolf Prima
Vigor" or "Rolf Prima Elan" are written on the wheel rim. The
wheel models have serial numbers between 03926 and 06586. The
serial number is located on the rim, under the yellow rim tape
and is not visible from the outside of the wheel. The tire, tube
and rim strip must be removed.
Manufactured in the United States, the wheels were sold at all
bicycle specialty stores nationwide from March 2003 through
December 2003 for about $850 per set.
Contact your local bicycle retailer to have them inspect your
wheels to determine if they are included in the recall. If so,
the dealer will provide a free repair. Repair kits will be
available in 6 to 8 weeks.
Consumer Contact: For additional information, contact Rolf Prima
Inc. at (800) 741-6941 between 8 a.m. and 5 p.m. PT Monday
through Friday or visit: http://www.rolfprima.com.
SUNDOWNER TRAILERS: Recalls Horse Trailers For Accident Hazard
--------------------------------------------------------------
Sundowner Trailers, Inc. is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 7 Sundowner Sunlite horse/stock trailers, model 2005.
These trailers were equipped with Dexter Predator
electric/hydraulic brake systems and were not factory equipped
with a storage battery. The break-away system battery does not
have enough amp hours to maintain braking for the required 15
minutes in case of trailer break-away when using the
electric/hydraulic brake system. If the trailer were to come
loose from the tow vehicle, it is possible that the current
break-away battery would not be able to maintain braking action
for the required 15 minutes, which could result in a crash or
injury/damage to the operator and/or the horses/stock.
Dealers will install a battery and battery box and rewire the
trailer through the storage battery. They will also apply a
notice label on or by the battery location informing them that
the break-away system is tied into the storage battery. The
recall is expected to begin on June 28,2005. For more details,
contact the Company by Phone: 1-800-654-3879, ext. 2149, or
contact the NHTSA's auto safety hotline: 1-888-327-4236
(TTY 1-800-424-9153), or visit the Website:
http://www.safercar.gov.
TECUMSEH POWER: Recalls 21T Lawn Tractors Due to Injury Hazard
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Tecumseh Power Co., of Grafton, Wisconsin is voluntarily
recalling about 21,000 units Lawn Tractors.
The axles on these lawn tractors can crack and break if subject
to extreme load amounts. Should the axle break, it could cause a
loss of control and result in injuries to the rider.
These lawn tractors have a 6-speed MST206-545C Peerless
transaxle and a 17.5, 18, 18.5 or 19 horsepower engine. The
recalled tractor and transaxle model number information is
located below the tractor seat, and on the transaxle housing.
The recalled transaxles have a date of manufacture code (DOM)
between 4275 and 5047 followed by the letter "G", which can be
found on the Transaxle ID Label.
BRAND NAME, COLOR, HP, RETAILER, TRACTOR MODEL NO.
(1) Poulan Pro, Black, 18.5, Various Hardware Dealers,
96012000300
(2) Poulan, Black, 17.5, Various Hardware Dealers,
96012001100
(3) Poulan Pro, Black, 19, Various Hardware Dealers,
96012001700
(4) Poulan Pro, Black, 18.5, Various Hardware Dealers,
96012002700
(5) Southern States, Red, 17.5. Southern States Dealers,
96012002200
(6) Poulan Pro, Black, 18, The Home Depot, 96016000200
(7) Craftsman, Grey, 18, Orchard Supply Hardware, 275390
With transaxles manufactured in Brazil, the lawn tractors were
sold at all home and hardware stores nationwide from December
2004 through May 2005 for between $750 and $1,300.
Consumers should immediately stop using their lawn tractor, and
contact Tecumseh for assistance in identifying affected units,
and free repair if necessary.
Consumer Contact: Call Tecumseh toll-free at (888) 271-4048
between 7:30 a.m. and 4 p.m. CT Monday through Friday, or visit
Tecumseh's Web site: http://www.tecumsehpower.com.
TIFFIN MOTORHOMES: Recalls 265 Motor Homes Due To Fire Hazard
-------------------------------------------------------------
Tiffin Motorhomes, Inc. is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 265
motorhomes, namely:
(1) TIFFIN / ALLEGRO, model 2005
(2) TIFFIN / ALLEGRO BAY, model 2005
(3) TIFFIN / ALLEGRO BUS, model 2005-2006
(4) TIFFIN / PHAETON, model 2005
(5) TIFFIN / ZEPHYR, model 2005
On certain motor homes containing a 50 Amp transfer switch built
by Intellitec, the material used for the wire lugs was changed
from nickel plated to copper lugs. The copper lugs are softer
than the nickel plated and do not retain the torque of the screw
that clamps the wire connector. When the torque is relaxed, the
lugs can become loose resulting in excessive heat within the
connected wire that could result in a fire.
Dealers will replace the changeover box. The recall is expected
to begin during July 2005. For more details, contact the
Company by Phone: 1-256-356-8661 or contact the NHTSA auto
safety hotline: 1-888-327-4236 (TTY 1-800-424-9153), or visit
the Website: http://www.safercar.gov.
TOYOTA MOTOR: Recalls 11,592 Tacoma Trucks For Seatbelt Defect
--------------------------------------------------------------
Toyota Motor North America, Inc. is cooperating with the
National Highway Traffic Safety Administration (NHTSA) by
voluntarily recalling 11,592 Tacoma pickup trucks, models 2005.
These pickup trucks are equipped with a bench seat. The seat
position and seat belt buckle sensor connector pins are
incorrectly positioned due to a wire harness manufacturing
process error. In this condition, the seat position and seat
belt buckle sensor may not function as designed, affecting the
adaptive air bag deployment, which if the vehicle is involved in
a crash, could result in improper occupant restraint.
Dealers will inspect the seat position and seat belt fastening
condition sensor connector. An additional sub-wire harness will
be installed to correct the connector pin manufacturing error,
if necessary. The recall is expected to begin during late July
2005. For more details, contact the Company by Phone:
1-800-431-4331 or contact the NHTSA's auto safety hotline:
1-888-327-4236 (TTY 1-800-424-9153), or visit the Website:
http://www.safercar.gov.
UNIVERSITY OF BERKELEY: PA AG Files Fraud Suit V. "Diploma Mill"
----------------------------------------------------------------
Pennsylvania Attorney General Tom Corbett filed a civil lawsuit
against a former New Mexico State Trooper accused of operating
an Erie-based online "diploma mill" and phony accreditation
institution that sold thousands of bogus Associate, Bachelor's,
Masters, Doctorate and Honorary degrees to individuals
nationally and internationally.
The complaint and separate motion for special injunction seeking
to shut down the online business was filed in Erie County Court.
The legal action investigated by Mr. Corbett's Bureau of
Consumer Protection additionally seeks to permanently prohibit
the defendant from engaging in business in the state and require
the payment of fines and costs. During a news conference at his
Erie Office, Mr. Corbett identified the defendants as 50-year-
old Dennis James Globosky, last known address 204 German St.,
Erie, and Globosky's businesses, "The University of Berkley,"
"The University of Berkley Online," UofB Inc., and
"accreditation institution" New Millennium Accrediting
Partnership for Educators Worldwide or "N.A.P.F.E.W." Globosky
served on the New Mexico State Police force from 1978-1979.
According to the lawsuit, Mr. Globosky is operating from offices
located at 2700 West 21st St., Suite 24, Erie, despite
representations in advertising materials that the University has
numerous satellite offices throughout the U.S., including
Berkley, Michigan and Chicago, Illinois. Various documents claim
that "N.A.P.F.E.W." has a Washington, D.C. mailing address.
Mr. Corbett's investigators said Mr. Globosky, who holds a high
school diploma from Wattsburg Area High School in Erie County,
refers to himself in promotional materials for the University as
Dr. Globosky, Director of Academic Administration. He
advertises, promotes and sells the academic degrees through the
Internet on websites including www.berkley-u.edu plus 17 feeder
sites.
The online University catalog includes pictures of buildings and
academic structures that appear to have been taken from
legitimate colleges and universities, including Harvard. Another
picture falsely depicts a large structure as part of the so-
called campus when in reality the photograph is of an Erie
industrial park where Mr. Globosky and his University occupy one
small suite.
The online advertisements claim that University of Berkley
Online offers "the lowest tuition prices and HIGHEST QUALITY
educational programs to be found in the world." The ads claim
that degrees can be earned "completely from home" and require
"no studies, no exams... no attendance," a "flat fee" and "no
waiting." Consumers are encouraged to obtain Bachelor's,
Masters and other degrees in various majors including Business
Administration, Education, Psychology, Biology, Mathematics,
Political Science, Electrical Engineering and Computer Science-
Information Technology. Doctoral degrees are offered in various
fields including Philosophy, Education, Psychology, Business
Administration and Theology. The degrees are awarded based on
"life experience."
The costs associated with obtaining a degree range from $2,065
to $4,995. Those who pay for the degree receive a diploma, a
transcript with a grade associated with each particular course
and other records, including a notarized document claiming that
the degree is officially accredited and authentic. The so-called
degree earners are also given contact information, monitored by
the defendants, that enables employers, businesses or genuine
education institutions to "verify" the authenticity of the
degrees.
"We will prove to the court that this operation is 100 percent
designed to defraud consumers, prospective employers,
businesses, universities and any other organizations or
government agencies seeking workers or volunteers," Mr. Corbett
said. "Bogus outfits like this also enable unscrupulous
individuals to use these degrees to misrepresent their
educational background and enhance their credibility and/or
employment and promotion opportunities."
In the course of our investigation, it was learned that
individuals attempting to use the alleged bogus degrees were
terminated from several different positions, including library
director and president of an institute of technology and arts.
Other individuals with "University of Berkley" credentials
include an assistant police chief, a journalist, and a self-
proclaimed expert witness in structural engineering.
The complaint lists other misrepresentations including:
(1) Consumers will be mentored and receive personalized
attention from a specifically designated professor or
Faculty Instruction Coordinator.
(2) Fictitious staff members and nonexistent credentialed
professors.
(3) Claims that the institution is accredited by
"N.A.P.F.E.W.," which in reality was created by the
defendant and has no recognized official standing.
(4) Claims that "real staff" is available to answer
questions.
(5) University of Berkley degrees are accepted worldwide by
a number of institutions including Cambridge-England,
Harvard Business Services, Penn State University,
Edinboro University, American Express, Pfizer,
Microsoft and Dean Witter.
(6) Claims that "preeminent leaders in their fields" have
received degrees from the University.
The lawsuit states that Mr. Globosky, since the late 1990's,
claims to have awarded 12,500 degrees and continues to award
several hundred each year. If true, Mr. Globosky's gross
revenues would exceed $34 million. Additionally, Mr. Globosky
is accused of falsifying statements to the Pennsylvania
Department of Education regarding accreditation, certification
and other legal issues associated with operating as a
"university" in the Commonwealth.
Mr. Corbett said, "Federal authorities have also been notified
that Mr. Globosky has allegedly done business with Libyan,
Iranian and other foreign nationals whose countries have been or
continue to be subject to economic sanctions monitored by the
U.S. Treasury Department."
The complaint asks the court to find the defendant liable for
violations of Pennsylvania's Unfair Trade Practices and Consumer
Protection Law and Department of Education statutes. The lawsuit
also asks the court to:
(i) Permanently shut down the online business barring any
additional sales of degrees by Mr. Globosky or any
entity associated with him.
(ii) Require the defendant to permanently forfeit his right
to conduct business in the Commonwealth.
(iii) Pay civil penalties of $1,000 per violation and $3,000
for each violation involving a consumer age 60 or
older.
(iv) Require the defendant to pay restitution to those who
can document harm caused by the alleged illegal
activity.
(v) Require the defendant to pay the Commonwealth's
investigation costs.
Mr. Corbett said the petition for preliminary injunction asks
the court to force the business to immediately disband, take
down its website and halt any other activity associated with the
sale of diplomas. The petition also seeks to freeze all of the
defendants' personal and corporate accounts.
"Today, I'm asking the court to take the necessary steps to shut
down what we maintain is an illegal enterprise that has the
potential to cause serious harm," Mr. Corbett said. "These
fraudulent businesses also destroy the credibility of legitimate
educational institutions that offer Pennsylvanians and others
actual online degrees that help better their lives."
The lawsuit was filed in Erie County Court. The case is being
prosecuted by Senior Deputy Attorney General Darrel J. Vandeveld
of Corbett's Bureau of Consumer Protection in Erie. For more
details, contact the Pennsylvania Office of Attorney General
Strawberry Square, Harrisburg, PA 17120 by phone: 717-787-3391
or visit the Website: http://www.attorneygeneral.gov
U.S. GRAND PRIX: Lawyers Say Fans Deserve More Than Just Refunds
----------------------------------------------------------------
Fans who attended the boycotted U.S. Grand Prix should receive
more than the ticket refunds offered by Michelin, according to
attorneys who filed lawsuits, The Associated Press reports.
The attorneys contend that the French tire manufacturer, the
seven Formula One teams that withdrew their cars, the
Indianapolis Motor Speedway and others also should pay fans for
travel and other expenses.
Henry Price, an Indianapolis attorney seeking to lead a class
action suit over the boycott, told The Associated Press that the
100,000 people who attended the race June 19 are entitled to
much more than the $75-$150 ticket price.
The suit stems from a debacle at the U.S. Grand Prix wherein 14
out of 20 cars taking part in the event refused to race after
tire manufacturer Michelin earlier told its partners that racing
was unsafe after they failed to find out what had caused two
crashes in practice at the Indianapolis Motor Speedway.
Previously, after the debacle at the Indiana racetrack, Michelin
offered to refund money to those who bought race tickets and buy
20,000 tickets for those wanting to return for the 2006 race.
However, Mr. Price told The Associated Press that the fans could
cost themselves additional compensation if they accept that
offer. He pointed out, "Michelin could take the position that
it's a settlement, and anyone who did that would give up the
rest of his or her rights."
As of the moment Michelin has yet not provided any details on
how it will distribute the ticket refunds or whether it would
put any conditions on them. Michelin spokesman Phil Romba though
told The Associated Press that his company hopes to finalize
plans within a week saying, "We're doing this because it's the
right thing to do. Our focus is on the fans."
Indianapolis Motor Speedway spokesman Ron Green declined comment
Wednesday on the suits. He said track officials and Michelin
were still working on the refund plan.
"When that's finalized, it will be released so the message
remains the same," he said.
William Bock III, another lawyer who filed a lawsuit over the
race in state and federal courts, told The Associated Press that
Michelin's stated desire to compensate the fans is unofficial.
He explains, "We have been in regular communication with several
hundred fans who have contacted us since our lawsuit has been
filed. None have been contacted by Michelin."
As previously reported in the June 23, 2005 edition of the Class
Action Reporter, Mr. Bock filed a suit over the race on behalf
of Formula One fan, Larry Bowers, a Colorado resident. Mr. Bock
and his client are seeking for compensation from the motor
sport's governing body FIA, the Formula One Administration
(FOA), tire manufacturer Michelin as well as the Indianapolis
Motor Speedway, accusing them of "fraud".
According to Mr. Bowers suit, only six out of 20 cars those
using Bridgestone tires instead of Michelin took part in the
race, which was won by Ferrari's Michael Schumacher ahead of
teammate Rubens Barrichello.
VAN-CON INC: Recalls 406 2002-05 School Buses For Injury Hazard
---------------------------------------------------------------
VAN-CON, Inc. in cooperation with the National Highway Traffic
Safety Administration's Office of Defects Investigation (ODI) is
voluntarily recalling about 406 units of 2002-05 VAN-CON School
Buses due to injury hazard. NHTSA CAMPAIGN ID Number: 05V308000.
According to the ODI, VAN-CON 2002 through 2005 Model year 15,
16, 20, 25 and 30 passenger buses built on GMC, Chevrolet and
Ford chassis' microswitches, which are used internally to
position the stop arm sign in the open and closed positions may
malfunction in extremely cold weather. This malfunction can
cause the sign to open or close in an improper position, or to
not open at all. Should the stop arm not perform properly, a
child or pedestrian may be endangered by passing motorists
should they not stop at the correct location.
As a remedy, VAN-CON will notify its customers and Specialty
Manufacturing will provide free of charge a service kit (Part
No. 005178) with a switch pack that is not sensitive to extreme
cold weather and will inspect to ensure the microswitch heater
wiring is properly connected free of charge.
For more details, contact VAN-CON by Phone: 732-356-8484 or
Specialty Manufacturing by Phone: 800-951-7867 or the NHTSA Auto
Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site:
http://www.safecar.gov.
VOLKSWAGEN OF AMERICA: Recalls 39,583 Jetta Cars For Fire Hazard
----------------------------------------------------------------
Volkswagen of America, Inc. is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 39,583 New Jetta cars, model 2005.
On these cars, equipped with a 2.5L gasoline engine, a fuel
supply line clamp located in the engine compartment may not be
positioned properly and could cause a fuel leak. Fuel leakage,
in the presence of an ignition source, could result in a fire.
Dealers will inspect the position of the engine compartment fuel
supply line clamp and, if necessary, replace the clamp. The
recall is expected to begin on July 2005. For more details,
contact the Company by Phone: 1-800-822-8987, contact the
NHTSA's auto safety hotline: 1-888-327-4236
(TTY 1-800-424-9153), or visit the Website:
http://www.safercar.gov.
WAL-MART STORES: OK Employees File Suit Over Alleged Retaliation
----------------------------------------------------------------
Two employees of Wal-Mart Stores Inc. and another former worker
initiated a lawsuit seeking class action status, alleging that
the retailer retaliated against workers who file workers'
compensation claims, The Associated Press reports.
In their lawsuit, which was filed in state court, Wal-Mart
employees Molly Self and Tammy Mathes allege that after filing
claims for on-the-job injuries, the company either reduced their
hours, cut their pay or demoted them. Meanwhile, former employee
Janna Balak claims she was forced to resign as a condition of
her settlement of a workers' compensation claim.
Additionally, the women are claiming in their suit that many
Wal-Mart employees are afraid to file workers' compensation
claims for fear of retaliation and that understaffing at the
stores creates an environment "where workplace injuries are
inevitable."
The women are seeking damages of more than $10,000 for lost
wages and benefits, lost earning capacity, humiliation and
emotional distress.
Alex Yaffe, a spokesman for the Oklahoma City law firm that
represents the women told The Associated Press, "We think this
is a company-wide policy that potentially affects thousands of
people. There are over 30,000 people employed by Wal-Mart in
Oklahoma and 1.6 million nationwide. There are a ton of folks
that could be affected."
For their part, Wal-Mart spokeswoman Christi Gallagher told The
Associated Press that the company was not yet served with the
lawsuit and thus could not comment on the case. She however
pointed out that the company has adequate systems to address
workers' compensation claims and that safety is a top concern.
She also reiterated, "Safety is paramount in every decision we
make both for customers and our associates." Ms. Gallagher
though stated that she could not provide information on how many
workers' compensation claims are filed against the company each
year.
According to the suit, Ms. Self is currently working at the Wal-
Mart store in El Reno and Ms. Mathes is at a store in Moore,
while Ms. Balak was formerly employed by the Moore store.
Asbestos Alert
ASBESTOS LITIGATION: Fibermark Says Lawsuits Were Named in Error
----------------------------------------------------------------
In its latest filing to the Securities and Exchange Commission,
FiberMark, Inc. (OTC: FMKIQ), maker of specialty fiber-based
materials, said that over the last several years, certain of its
debtors or its predecessors have been named as defendants in a
large number of asbestos lawsuits, including several class
action lawsuits.
It is the debtors' position that they were named in error, and
the vast majority of such lawsuits have been dismissed on that
basis. The debtors have never been found liable on any asbestos-
related claim. A total of 11 Proofs of Claim were filed in the
Chapter 11 Case with respect to such lawsuits. All of such
Proofs of Claim have since been disallowed by orders of the
Bankruptcy Court.
Based upon the Company's experience, it expects that the future
cost of complying with existing environmental laws, and the
Company's liability for known environmental claims under those
laws, will not have a material adverse effect on the Company's
financial condition or results of operation. However, new
information, changes in environmental laws or how they are
interpreted, or more vigorous enforcement by regulatory
authorities may give rise to additional expenditures or
liabilities that could be material to the Company's financial
condition and results of operations.
The Company's 11 U.S. and European facilities produce products
from a variety of natural and man-made materials - cotton, metal
and synthetic fibers, wood pulp, and recovered paper - for a
broad range of applications.
ASBESTOS LITIGATION: Kaiser Aluminum Files Reorganization Plan
--------------------------------------------------------------
Kaiser Aluminum Corporation, together with Kaiser Aluminum &
Chemical Corporation and 19 of their subsidiaries, filed a plan
of reorganization and a related disclosure statement in the U.S.
Bankruptcy Court for the District of Delaware.
The disclosure statement is subject to approval by the
Bankruptcy Court, and certain provisions of the plan regarding
the treatment of asbestos and other personal injury claims
remain under negotiation. In addition, the plan must be voted
upon by Kaiser's creditors and ultimately confirmed by the
Bankruptcy Court. Once the disclosure statement is approved by
the Bankruptcy Court, the company will commence solicitation of
approval of the plan by the creditors. No assurance can be given
that the plan will receive the necessary approvals by creditors
or be confirmed by the Bankruptcy Court, or that the
transactions contemplated by the plan will ultimately be
consummated.
Based on the recent pace of the reorganization process and
assuming there are no prolonged delays in the plan approval
process, the company would expect to emerge from Chapter 11
during the fourth quarter of 2005.
Consistent with disclosures in Kaiser's Annual Report on Form
10-K for the year ended December 31, 2004 and its Quarterly
report on Form 10-Q for the period ended March 31, 2005, the
company's restructuring would resolve pre-petition claims that
are currently subject to compromise. Those claims include, among
others, retiree medical, pension, asbestos and other tort, bond
and note claims. The plan would also result in the cancellation
of the equity interests of current stockholders and the
distribution of equity in the emerging company to creditor
constituents.
The majority of the new equity would be distributed to two
voluntary employee benefit associations that were created in
2004 for salaried and hourly retirees in connection with the
cancellation of retiree medical plans. All pre-petition personal
injury claims relating to asbestos, silica, coal tar pitch and
hearing loss would be permanently resolved by the formation of
certain trusts funded primarily by Kaiser's rights to proceeds
from certain of its insurance policies.
Complete details are included in the plan and disclosure
statement, which the company is filing with the U.S. Securities
and Exchange Commission as attachments to a Form 8-K. The
company also has posted the documents in the "Restructuring"
section of its web site at www.kaiseraluminum.com.
Kaiser Aluminum President and Chief Executive Officer Jack A.
Hockema said, "In February of 2002, we said that Chapter 11
would provide us with the tools we needed to restructure our
balance sheet and return to sustained long-term profitability.
The plan we filed today provides those tools. We are now well on
our way to completing our goal of emerging with a solid
financial position, a strong balance sheet and the capability to
grow in our key transportation and industrial markets."
Mr. Hockema said, "None of this would have been possible without
the employees, customers, suppliers and other supporters who
stuck with us through this period, and we thank them. Our job
now is to complete the reorganization and drive this company to
its full potential in terms of customer service, quality,
product development and financial performance."
Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading producer
of fabricated aluminum products for aerospace and high-strength,
general engineering, automotive and custom industrial
applications. Upon emergence, the company also expects to
continue to own its 49% interest in Anglesey Aluminium Limited,
which operates an aluminum smelter in Wales.
ASBESTOS LITIGATION: Halliburton Says KBR Settlements Completed
---------------------------------------------------------------
Halliburton Company (NYSE: HAL) disclosed that its division,
Kellogg Brown & Root, Inc. was a defendant in a large number of
asbestos and silica related lawsuits. However, KBR has settled
these claims through a Prepackaged Plan of Reorganization under
Chapter 11 of the United States Bankruptcy Code originally filed
in December 2003.
In January 2005, funding for these settlements was completed.
The Plan's sponsor believes that the impact of the Plan of
Reorganization and subsequent settlements will not have an
impact on the Plan or the Plan's sponsor's ability to continue
as a going concern.
The Plan's sponsor has the ability and intent to fund any
contributions due under the Plan and any costs of Plan
administration.
Headquartered in Houston, TX, Halliburton is one of the foremost
engineering/construction and oilfield services firm in the
world. Its KBR division has two segments: Government and
Infrastructure, and Energy and Chemicals.
ASBESTOS LITIGATION: IntriCon Corp's Suits Drop to 117 in 1Q05
--------------------------------------------------------------
IntriCon Corporation (AMEX: IIN), formerly known as Selas
Corporation of America, revealed that the number of asbestos-
related lawsuits it faced dropped from about 123 on December 31,
2004 to 117 suits as of March 31, 2005. Named along with a
number of other parties, the Company stated that these claimants
allege that they contracted asbestos-related diseases as a
result of exposure to asbestos products or equipment containing
asbestos.
Due to the non-informative nature of the complaints, the Arden
Hills, MN-based Company does not know whether any of the
complaints state valid claims. The lead insurance carrier has
informed the Company that the primary policy for the period July
1, 1972 to July 1, 1975 has been exhausted. Similarly, certain
carriers have informed the Company that the primary policies for
the period August 1, 1970-1973 have also been exhausted. In both
cases, the carriers have said that they will no longer provide a
defense under those policies.
In turn, the Company has requested that the carriers
substantiate their respective positions. The Company has
contacted representatives of the Company's excess insurance
carrier for some or all of this period.
The Company, a manufacturer of precision microminiature
components and molded plastic parts, believes it has additional
policies available for other years that have been ignored by the
carriers. As settlement payments are applied to all years a
litigant was deemed to have been exposed to asbestos, the
Company believes when settlement payments are applied to these
additional policies, the Company will have availability under
the years deemed exhausted.
If the Company's insurance policies do not cover the costs and
any awards for the asbestos-related lawsuits, the Company will
have to use its cash or obtain additional financing to pay the
asbestos-related obligations and settlement costs. There is no
assurance that the Company will have the cash or be able to
obtain additional financings on favorable terms, or at all to
pay asbestos related obligations or settlements should they
occur.
However, the Company does not believe that the asserted
exhaustion of the primary insurance coverage for this period
will have a material adverse effect on the financial condition,
liquidity, or results of operations of the Company. Management
believes that the number of insurance carriers involved in the
defense of the suits and the significant number of policy years
and policy limits to which these insurance carriers are insuring
the Company, make the ultimate disposition of these lawsuits not
material to the Company's consolidated financial position or
results of operations.
The Company's wholly owned French subsidiary, Selas SAS filed
insolvency in France and is being managed by a court appointed
judiciary administrator. The Company may be subject to
additional litigation or liabilities as a result of the French
insolvency.
ASBESTOS LITIGATION: AIG's Changes in Estimates Raise Reserves
--------------------------------------------------------------
American International Group, Inc. (NYSE: AIG) has determined
that certain accounts should be adjusted for the year ended
December 31, 2004 to reflect changes in estimates made in the
fourth quarter of 2004. The aggregate effect of these changes in
estimates resulted in an after tax charge of about US$1.19
billion. Most significant of the changes in estimates was an
after tax charge of US$850 million representing an increase in
reserve for asbestos and environmental losses and loss expenses.
The reserves carried for these claims at March 31, 2004 were
US$1.93 billion gross; US$628 million net. In the fourth quarter
of 2004 AIG increased its estimates for asbestos and
environmental reserves by US$1.45 billion gross and US$850
million net of reinsurance.
Any resulting adjustments are reflected in operating income
currently. It was management's belief that the General Insurance
net loss reserves were adequate to cover all General Insurance
net losses and loss expenses as at March 31, 2004. However, in
the fourth quarter of 2004, AIG recorded a change in estimate
with respect to its reserves for asbestos and environmental
exposures.
The estimation of loss reserves relating to asbestos and
environmental claims on insurance policies written many years
ago is subject to greater uncertainty than other types of claims
due to inconsistent court decisions as well as judicial
interpretations and legislative actions that in some cases have
tended to broaden coverage beyond the original intent of such
policies and in others have expanded theories of liability. The
insurance industry as a whole is engaged in extensive litigation
over these coverage and liability issues and is thus confronted
with a continuing uncertainty in its efforts to quantify these
exposures.
The vast majority of these asbestos and environmental claims
emanate from policies written in 1984 and prior years.
Commencing in 1985, standard policies contained an absolute
exclusion for pollution related damage and an absolute asbestos
exclusion was also implemented. The majority of AIG's exposures
for asbestos and environmental claims are excess casualty
coverages, not primary coverages. Thus, the litigation costs are
treated in the same manner as indemnity reserves. That is,
litigation expenses are included within the limits of the
liability AIG incurs. Individual significant claim liabilities,
where future litigation costs are reasonably determinable, are
established on a case basis.
With respect to known asbestos and environmental claims, AIG
established over a decade ago specialized toxic tort and
environmental claims units, which investigate and adjust all
such asbestos and environmental claims. Each claim is reviewed
at least semi-annually utilizing the aforementioned approach and
adjusted as necessary to reflect the current information. In
both the specialized and dedicated asbestos and environmental
claims units, AIG actively manages and pursues early settlement
with respect to these claims in an attempt to mitigate its
exposure to the unpredictable development of these claims.
With respect to asbestos claims handling, AIG's specialized
claims staff continues to operate in a manner to mitigate such
losses through proactive handling, supervision and resolution of
asbestos cases. Thus, while AIG has resolved all claims with
respect to miners and major manufacturers (TierOne), its claims
staff continues to operate under the same proactive philosophy
to resolve claims involving accounts with products containing
asbestos (TierTwo), products containing small amounts of
asbestos, companies in the distribution process, and parties
with remote, ill defined involvement in asbestos (TiersThree and
Four). Through its commitment to appropriate staffing, training,
and strong management oversight of asbestos cases, AIG mitigates
to the extent possible its exposure to these claims.
In order to test the overall reasonableness of the asbestos and
environmental reserves established using the ground-up approach,
AIG uses primarily two methods, the market share method and the
frequency/severity or report year method. Based on the results
of the market share and frequency/severity methods, AIG's
initial estimate of the carried asbestos and environmental
reserves were within the range of indications from both methods.
At year-end 2004, however, AIG considered a number of additional
factors and issues, to determine the appropriate reserve that
should be carried for these claims. After considering all of
these factors, in connection with its year-end actuarial review
of asbestos and environmental reserves, AIG recorded a US$650
million increase in net asbestos reserves, and a US$200 million
increase in net environmental reserves. The corresponding
increases in gross reserves were US$1.2 billion for asbestos and
US$250 million for environmental exposures.
ASBESTOS LITIGATION: Empire State Bldg. Assoc. In Case Limbo
------------------------------------------------------------
Empire State Building Associates LLC and numerous other New York
City building owners are defendants in an action entitled
Stanislawa Staniszek v. A.C.& S. Inc., et al., which is part of
the New York City Asbestos Litigation pending before the New
York State Supreme Court.
Mr. Staniszek, now deceased, allegedly suffered from
mesothelioma and other related conditions that resulted from
asbestos exposure while employed as a project supervisor at
various locations, including the Empire State Building.
A Note of Issue, filed over two years ago, placed the case on
the Court's trial calendar. However, the matter was removed from
any trial cluster assigned by the Court and no new trial date is
set. The Company awaits further activity in the case by
plaintiff's counsel, before pressing for further discovery.
Empire State Building Associates LLC, an investor group led by
New York real estate maven Peter Malkin, holds the master lease
on the Empire State Building through 2076.
ASBESTOS LITIGATION: Exide's French Subsidiary Faces 45 Claims
--------------------------------------------------------------
Exide Technologies (NASDAQ:XIDE) disclosed in the latest filing
it submitted to the U.S. Securities and Exchange Commission that
its principal French subsidiary, Compagnie Europeene
D'Accumulateur, faces employee claims alleging asbestos-related
illnesses.
Since 1982, the French governmental agency responsible for
worker illness claims received 45 of these claims. This
represents an increase to the 34 claims previously reported in
the March 11, 2005 edition of the Class Action Reporter.
From 1957 to 1982, Compagnie Europeene D'Accumulateur operated a
plant using crocidolite asbestos fibers in the form of battery
cases, which, when formed, encapsulated the fibers. About 1,500
employees worked in the plant over the period.
For some of those claims, CEAC is obliged to and has indemnified
the agency in accordance with French law for about US$260,000
and US$378,000 in calendar 2003 and 2004, respectively. In
addition, the Company has been adjudged liable to indemnify the
agency for about US$200,000 and US$107,000 during the same
periods to date for the dependents of four such claimants. The
Company is not yet required to indemnify or make any payments in
2005.
Although the Company cannot predict the number or size of any
future claims, the Company does not believe resolution of the
current or any future claims, individually or in the aggregate,
will have a material adverse effect on the Company's financial
condition, cash flows or results of operations.
Headquartered in Lawrenceville, NJ, Exide Technologies is a
worldwide producer of lead-acid batteries. The Company provides
power for private, commercial, and military transportation. It
also makes batteries that supply standby to industries that
require uninterrupted power sources, such as Internet, utility
and telephone companies, computers and wireless communications.
ASBESTOS LITIGATION: UK Blaze Prompts Measures to Limit Risks
-------------------------------------------------------------
Authorities immediately launched actions to limit health risks
after last week's fire, which engulfed the St. Leonards Warrior
Square's social club, exposed asbestos sheets located underneath
the building's roof lining, The Hastings Observer reports.
The intensity of the fire caused one of the cylinders containing
pressurized gas to explode causing massive structural collapse
to the gable end of the roof leading to the release of the
asbestos fibers.
Network Rail, operator of Britain's rail infrastructure, asked
Hastings Borough Council to take control of the clean-up
operation.
Asbestos debris blown onto the platform forced officials to
close the St. Leonards Warrior Square Station until the next
day. St. John's Road remained closed until four days after the
incident. The nearby play area would also stay shut until work
is completed.
In the meantime, the Council's environmental health officers
would continue to monitor air quality.
Hastings Council officer Kevin Boorman, on-site to oversee the
clean-up work, confirmed that the basement areas to the opposite
properties have been inspected, along with all ledges and
windowsills using a hydraulic platform. He added that the
contents of the building have already been sprayed with PVA glue
to bind it as a temporary measure and prevent fibers being
dispersed.
Police have launched a full investigation into the cause of the
fire. No casualties were reported.
ASBESTOS LITIGATION: Tyler Pipe Fined US$1.5Mil for 33 Breaches
---------------------------------------------------------------
The Texas Commission on Environmental Quality imposed a US$1.5
million penalty on Tyler Pipe Co. for 33 air and water quality
violations at its plant in East Texas, according to a news
release filed by the state.
As part of an agreed order, Tyler Pipe will contribute US$1
million of the fine to fund five supplemental environmental
projects in the area. The projects include removing asbestos and
lead from local schools, funding abandoned tire cleanup efforts
and household hazardous waste and unauthorized trash dump
cleanups.
The state said that during investigations in 2002 and 2005, it
found violations in air emissions, water effluent, permits and
record keeping.
However, this environmental fine is not the first for the
company.
In March, Tyler Pipe pleaded guilty in federal court in Tyler to
two felonies and agreed to pay a US$4.5 million fine for
violating environmental laws and hiding information from
government regulators. Officials with Tyler Pipe acknowledged in
two counts prosecuted under the U.S. Clean Air Act that they
concealed information from regulators when they rebuilt a 60-
foot, pollution-emitting furnace in violation of federal law and
didn't seek permits. The new cupola built in 1998 continued to
use a 1960s pollution-control device.
When Tyler Pipe put up the new cupola, emissions of carbon
monoxide, lead and particulate matter increased, jeopardizing
the health of Smith County residents and people in the
surrounding area, Environmental Protection Agency officials said
then.
Tyler Pipe President David Green has said previously that the
company plans to spend at least US$55 million on pollution
controls and other improvements at the foundry.
Headquartered in Tyler, TX, Tyler Pipe is owned by McWane Inc.,
a private company located in Birmingham Alabama. Currently Tyler
Pipe has foundries in Texas and Pennsylvania, and
coupling/gasket production facilities in Missouri and
California.
ASBESTOS LITIGATION: Allianz Considers Claim Reserves Adequate
--------------------------------------------------------------
Allianz AG's US casualty insurance unit Fireman's Fund has
sufficient funds for asbestos claims, said the unit's chief
executive Chuck Kavitsky in an interview with Boersen-Zeitung,
AFX News reports.
Both Allianz and peer Muenchener Rueckversicherungs AG have in
the past few years had to put aside millions of euros in
additional reserves for asbestos claims in the US.
As previously reported in the Sept. 20, 2002 edition of the
Class Action Reporter that Allianz AG said it will pump US$750
million into its U.S. unit, Fireman's Fund, to cover asbestos-
related claims, doubling the Novato, California-based division's
reserves to US$1.51 billion. However, the Company submitted a
SEC filing, which was picked up by the CAR on July 23, 2004,
that said no revision of the loss reserves related to asbestos
and environmental claims was necessary in 2003.
The total net reserve for asbestos and environmental claims
exposure related liabilities for the Allianz Group's U.S. based
subsidiaries at December 31, 2003 was EUR906 million compared to
EUR1.25 billion, excluding inter-company reinsurance agreements.
The total gross reserve for asbestos and environmental claims
exposure related liabilities at December 31, 2003 was EUR1.263
billion.
Commenting on the current market situation, Mr. Kavitsky said he
sees the insurance market becoming softer. However, he added,
"But we are not moving in the areas that have become the
softest," he said.
A soft market means that insurance supply is high and prices are
low, weighing on insurer's earnings.
Fireman's Fund last year contributed EUR4.6 billion in gross
premiums to Allianz's total EUR88.2 billion premiums. The unit
swung from a combined ratio of 129 in 2002 to 89 in the first
quarter of this year.
A combined ratio below 100 pct means the insurer took more in
premiums than it paid out in claims.
ASBESTOS LITIGATION: DE Court Sees Upsurge in Asbestos Filings
--------------------------------------------------------------
While the number of new asbestos lawsuits has dropped sharply in
Madison County, Delaware court is experiencing an upsurge in
filings, reports The Madison Record.
A clerk at New Castle County Superior Court, in Wilmington,
Del., confirmed that an upsurge in asbestos cases started in
June. This report appeared to coincide with a recent statement
from Mike Angelides, an attorney with SimmonsCooper law firm of
East Alton. He said that SimmonsCooper had expanded to New York,
Chicago and Delaware.
However, SimmonsCooper cannot actually file suits in Delaware
since only an attorney from the state can do that.
An attorney for a defendant in some of the new Delaware asbestos
suits said the firm of Bifferato, Gentilotti and Biden filed
most of the suits. In Delaware, the third name stands out.
Joseph R. Biden III, son of U. S. Senator Joe Biden (D-
Delaware), is a partner in the firm. He reportedly plans to run
for Delaware Attorney General next year.
ASBESTOS LITIGATION: Eircom Deals with Claims from 115 Employees
----------------------------------------------------------------
Eircom Group plc has received claims from about 115 employees or
former employees alleging injuries caused by exposure to
asbestos. Of these, 98 related to exposure at one particular
property in 1985.
In addition, a composite Irish High Court action for
unquantified damages and costs initiated on behalf of 97 of
these has remained dormant since 1997. One further case relating
to the same location initiated in the Irish High Court in 2003
has not progressed to any extent since.
The Dublin, Ireland-based Company revealed that about 120
premises currently or previously occupied by the Group contain
or have contained asbestos. In 1987, the Group began a program
of removing asbestos from some of its premises and introduced
safety measures and a warning procedure.
As of March 31, 2005, about 33 premises occupied by the Group
were identified as containing asbestos and these have been
identified, controlled and monitored. In summary, as of May 30,
2005, 5 claims have been settled; one case was withdrawn and the
remaining claims have been inactive for several years with the
exception of 2 claims, which have been inactive since 2003.
Given the uncertain nature of this kind of litigation, and the
lengthy period of time before asbestos-related injuries become
manifest, there can be no assurance that future claims will not
be made against the Group.
Formerly known as Telecom Eireann, Ireland's #1
telecommunications company returned to public trading with a
public offering on both the Irish and London stock exchanges in
2004.
ASBESTOS LITIGATION: Royal & Sun Alliance Strengthens Reserves
--------------------------------------------------------------
Royal & Sun Alliance Insurance Group plc revealed that it has
significant exposure arising from insurance contracts
underwritten in previous years.
In particular, the Company, which is U.K.'s second-biggest
property and casualty insurer, has exposure to asbestos and
environmental claims in the United States and in the United
Kingdom, other employer liability claims in the United Kingdom
and workers' compensation claims in the United States. The
Company further asserted that it maintained significant reserves
for these exposures.
In addition, the Liverpool giant said that the prevalence of
asbestos-related claims is a more recent development in the
United Kingdom than in the United States. As such, there is less
data and information relating to asbestos claims in the United
Kingdom available to conduct its U.K. asbestos reserving
analysis and thus more potential for variability in ultimate
outcomes.
The position in the United States is particularly problematic,
as plaintiffs have expanded their focus to defendants beyond the
"traditional" asbestos manufacturers and distributors. This has
arisen as a consequence of the increase in the number of
insureds seeking bankruptcy protection because of asbestos-
related litigation and the exhaustion of their policy limits.
Plaintiffs are now seeking to draw in a wide cross section of
defendants who previously only had peripheral or secondary
involvement in asbestos litigation. There are also indications
that plaintiffs may seek damages by asserting that insurers had
a duty to protect the public from the dangers of asbestos.
The Company specifically cited a proposed U.S. legislation that
could adversely affect its business. It referred to Senate Bill
852, which was introduced to the U.S. Senate in April 2005. The
amended bill includes establishing a privately financed trust
fund to provide payments to individuals with asbestos related
illnesses and removal of asbestos claims from the tort
litigation system for the duration of the fund.
The Company said that the prospects for the trust, which would
be financed by primary insurers, reinsurers and industrial
enterprises, are higher than they have been in recent years but
there are concerns that the bill contains several loopholes
which would allow cases to revert to the tort system at various
points of the trust fund's life. It believes that this would
undermine the certainty and finality that insurers and defendant
manufacturers seek.
During the fourth quarter 2004, the Company undertook a detailed
review of reserves held by its U.S. business and, in line with
others in the industry, identified the need to strengthen its
U.S. loss reserves. As a result, the Company strengthened these
loss reserves by GBP160 million. GBP95 million related to
workers' compensation business with the balance across a number
of lines including specialty and core segments.
The adverse loss reserve development for 2004 was mainly due to
reserve strengthening for asbestos in the United Kingdom
following publication of revised estimates for future
mesothelioma deaths and workers' compensation in the United
States following the fourth quarter 2004 detailed review. These
increases in reserves, in particular the reserves for asbestos,
have incident dates going back a number of years and so have
impacted the cumulative redundancy/(deficiency). Of the GBP338
million 2003 cumulative deficiency reported, GBP148 million
relates to U.K. asbestos reserves and arose from the adoption of
the latest U.K. Health & Safety Executive data tables which
indicated a higher incidence of claims, but over a longer
period.
Total net outstanding asbestos and environmental claims reserves
at the end of 2004 amounted to GBP1,181 million. Net asbestos
and environmental reserves have increased from GBP1,147 million
at the end of 2003, primarily as a result of the increase in
asbestos reserves of GBP151 million before the effect of
discounting following reports received from independent
actuarial consulting firms offset by settlement of claims and
exchange movements. The asbestos and environmental reserves are
mainly in the United Kingdom and the United States (about
GBP1,137 million), and to a lesser extent in Canada (about GBP44
million). Amounts recoverable from reinsurers as of December 31,
2004 amounted to GBP381 million.
In light of this, reserves were strengthened by GBP101 million
before the effect of discounting in the United Kingdom and by
GBP106 million before the effect of discounting in the United
States. Asbestos reserves were also strengthened in Australia.
U.S. asbestos reserves were further strengthened by GBP80
million. United Kingdom asbestos reserves were increased by
GBP179 million. In 2004 asbestos reserves in the United Kingdom
were strengthened by GBP148 million before the effect of
discounting, following publication of revised estimates for
future mesothelioma deaths.
ASBESTOS LITIGATION: Converium Holding Retains $49.2Mil Reserves
----------------------------------------------------------------
Switzerland-based Converium Holding AG (NYSE: CHR) estimated
that its total loss and adjustment expense reserves for US-
originated asbestos and environmental losses was about US$49.2
million or 0.6% of its total net reserves as of December 31,
2004. The same period last year held reserves worth US$45.8
million. In addition, the survival ratio for asbestos and
environmental reserves was 13.6 years.
The Company disclosed that its exposure to liabilities for
asbestos and environmental impairment stemmed from its assumed
reinsurance contracts, primarily arising from business written
by Converium Rckversicherung (Deutschland) AG. Its asbestos and
environmental exposure primarily originates from US business
written through the London Market and from treaties directly
written with reinsurers in the United States. It cancelled
relevant London Market reinsurance contracts in 1966 and 1967.
At the time, the Company reduced its participation in asbestos
and environmental-exposed US treaties, with the eventual result
that Converium Rckversicherung (Deutschland) AG ceased property
and liability underwriting in the United States in 1990.
Converium believes that its exposure to environmental impairment
liability and asbestos-related claims is relatively small due to
the diminutive amount of business written prior to 1987 for
Converium AG and CRNA. Additionally, CRNA is protected by a stop
loss agreement with Zurich Insurance Company, a wholly owned
subsidiary of Zurich Financial Services, for business effected
prior to June 1, 1993.
Converium Holding AG, a reinsurance business spun off from
Zurich Financial Services, provides treaty and facultative
coverage for risks including accident and health, credit and
surety, e-commerce, third party and professional liability,
life, and special casualty. The company operates in more than 60
countries throughout the world.
ASBESTOS LITIGATION: Wilshire Group to Pay $50T Fine for Breach
---------------------------------------------------------------
A restaurant group accused of negligently releasing asbestos
into the air at Marie Callender's in Midvale pleaded guilty to a
violation of the Clean Air Act.
California-based Wilshire Restaurant Group admitted to the
violation, which allegedly occurred during a 1999 repair of a
roof at the business. Wilshire officials said the employees who
obtained and reviewed bids to fix the roof of the restaurant
failed to tell the winning roofer that the job included the
removal of asbestos felt.
As part of a plea agreement, the U.S. Attorney's Office said
Wilshire will have to pay a fine of US$50,000. In addition, the
group would also have to make a US$50,000 contribution to the
Western States Project to help provide environmental-
enforcement.
According to the Associated Press report, sentencing is set for
September 7th.
ASBESTOS LITIGATION: DNR Results Confirm Safety at Praxair Site
---------------------------------------------------------------
A Missouri Department of Natural Resources official confirmed
that airborne asbestos is not a problem near the site of the
Praxair Inc. plant in St. Louis. The Company's contractors
previously announced that tests it took were negative of the
carcinogenic substance but DNR had decided to run its own tests.
As previously reported in July 1, 2005 edition of the Class
Action Reporter, company officials said that "chunks" of
asbestos mixed with other debris were left on the ground in and
around the facility after gas containers, which used asbestos as
filler, exploded. They sought to hasten the cleanup effort to
limit the possibility of asbestos fibers becoming airborne,
endangering the health of residents.
An onsite coordinator for the DNR, John Whitaker, said the
agency conducted its own tests, where air pumps were set up to
draw air through filters. Those filters were then analyzed with
an electron microscope for asbestos fibers, and all results came
in lower than the level of concern, which would have been .01
fibers per cubic centimeter.
Mr. Whitaker said some debris cleanup must still be done but
that DNR's test results were a good sign. DNR's tests help to
confirm what Praxair and city agencies have been saying, that
there was nothing problematic in air tests near the site of the
fire.
Headquartered in Danbury, CT, Praxair, Inc. (NYSE: PX) is
working to serve St. Louis customers from a facility in Cahokia.
The Company produces and sells atmospheric gases as well as
process and specialty gases for the chemicals, food and
beverage, semiconductor, and health care industries.
ASBESTOS LITIGATION: Roof Removal in Cyprus Homes to Cost GBP2MM
----------------------------------------------------------------
The chairman of the House Refugee Committee, which was tasked to
handle the removal and management of asbestos in refugee estates
and Turkish Cypriot residences, said that the problem was far
greater than initially thought, The Cyprus Mail reports.
In a committee hearing, Aristofanis Georgiou said more than GBP2
million would be needed to remove the asbestos roofs from over
1,000 homes and other structures. The request for the funding
would be sent to the finance ministry so that the asbestos would
be removed under the safety criteria set by the Labor Ministry.
President Tassos Papadopoulos ordered the creation of a
committee tasked to handle the removal and management of the
asbestos. The committee gave the state a month to inform them
about the committee's authority and the expected cost of
removal.
Deputy leader of the centrist Democratic Rally (DISY) party,
Lefteris Christophorou said the delay was unacceptable and
constituted gross negligence on behalf of the state. He stated
that for 30 years, refugees were exposed to the harmful effects
of asbestos with no response from the state.
The opposition deputy said the state was responsible for the
situation and urged the government to realize that it could not
fool around with people's health using the excuse that previous
governments had also refused to put their hand deep in their
pocket. Asbestos roofs, which were used extensively in the past,
could still be found largely in government buildings.
Previous governments in power have caused Cyprus to miss a 2004
EU deadline for the removal of all asbestos.
ASBESTOS LITIGATION: Japan Govt to Take No Action Against Kubota
----------------------------------------------------------------
Amid reports that Kubota employees died of asbestos-related
illnesses from exposure at its factories, Osaka (Kyodo)
officials moved to question the machinery maker over its labor
conditions. However, the Japanese government has confirmed that
it would not take action against the Company because there are
no laws restricting the use or production of asbestos.
In turn, the Company has not apologized, citing the fact that
the link between the factory and their health remains unclear.
The Company used asbestos from 1954 through 1975 at the
company's former Kanzaki plant in Amagasaki, Hyogo Prefecture in
western Japan to make reinforced water pipes. Asbestos had been
used extensively in Japan as an insulation material and in roof
tiles until the mid-1980s because of its insulating properties.
In October, laws were revised to basically ban the production
and import of asbestos and the production and use of cement
slabs and slating whose asbestos content exceeds 1 percent.
At a news conference, Kubota Corp. official Keisuke Sesaki told
city officials in Amagasaki, Hyogo Prefecture the details of the
work exposure that caused the death of 79 workers. Of that
number, 74 worked at the Amagasaki factory and four had duties
that made them visit the plant frequently. In addition, 18
workers at the two plants who have since retired are currently
being treated for asbestos-related diseases.
The company said that it paid 2 million yen to each of the three
nearby residents who suffer from the asbestos-related cancer
mesothelioma. In paying this amount, Kubota took into
consideration the substantial medical fees they were being
forced to shoulder. The firm said if residents around other
factories suffer health problems, it is ready to pay them
consolation money.
The Health, Labor and Welfare Ministry claimed it would not
issue any administrative order against the firm. It said that
during the period the workers are believed to have come into
close contact with the substance, the health risks associated
with asbestos were not generally known, adding that there was no
legal framework restricting its use or production.
The Environment Ministry stated it is unaware of any cases of
health hazards involving residents living around an asbestos-
related plant.
"We followed laws and regulations properly (at that time), but
it is extremely regrettable that the health of local residents
was harmed," Kubota official Taichi Ito said at the news
conference.
As of April 26, 69 of the dead workers and 14 of the retirees
have been recognized as being eligible for workers' accident
compensation insurance. Another 10 have also applied.
Amagasaki officials said the city health office would deal with
queries regarding the health risks posed by asbestos, while
other queries will be handled by the division of the municipal
government tasked with pollution issues.
ASBESTOS LITIGATION: Lehmann Widow to Give Up Battle Against ACC
----------------------------------------------------------------
Auckland widow Dawn Lehmann said she would be forced to sell her
home if the Accident Compensation Corporation demanded that she
repay the lump sum of $97,000, which was given as her
entitlement after her husband's death due to asbestos-related
lung cancer.
The Accident Compensation Corporation won the appeal against the
estate of Ross Lehmann, a former welder who died in November
2003 from an illness he contracted from exposure to asbestos
about 40 years ago at New Zealand Forest Products.
Last year, the Wellington District Court set a precedent when it
ordered the lump sum award to Mr. Lehmann's widow. It was the
first time a lump sum had been awarded for asbestos victims
exposed before April 2002, paving the way for other asbestos
victims. Prior to the ruling, victims in New Zealand were
entitled only to a $67 independence weekly allowance for their
lifetime.
After the High Court agreed with the ACC, there was talk that
the Lehmanns planned to appeal the decision to the Court of
Appeal. However, Mrs. Lehmann said she has given up on any
further legal battles, saying she could not afford it.
If the appeal did not proceed, the High Court decision would
stand. ACC would then take 25 other people who had had asbestos-
related lump-sum payments of about $100,000 to the district
court, to get the money back. However, another recipient could
then choose to launch his own appeal.
Mrs. Lehmann's son, John, said that his mother had spent most of
the money on huge legal bills, a new car, a cataract operation
and hearing aids. He said his mother had had to deal with the
major emotional upheaval of her husband's death after 50 years
of marriage on top of the trauma and stress of a legal fight. He
added, "You are dealing with pretty much a cold type of
organization. They don't care."
Mr. Lehmann said he had written to Prime Minister Helen Clark
and ACC minister Ruth Dyson asking for a clarification of the
law which was not clear on lump sum payments and which meant
judges had to guess what it meant.
As previously reported in the July 1, 2005 edition of the Class
Action Reporter, the ACC said it was deferring moves to seek the
return of the compensation payments until after the appeal
process on the landmark Lehmann case ends. Following a decision
by Justice Goddard in the High Court earlier this month, ACC had
filed 19 district court appeals against payments to asbestos
sufferers.
ACC spokesman Richard Braddell said the organization had not yet
had formal notification that the appeal had been dropped. He
said ACC had always believed its position was correct and it
would be a matter for the board to decide how to proceed if and
when it got notification the appeal had been dropped.
On the son's appeal to have the ACC "write the whole thing off,"
Gerard McGreevy from the ACC commented, "Our job is to
administer the law as it was given to us by parliament and we
don't have any discretion to make any changes or to do things on
individual circumstances."
ASBESTOS LITIGATION: Court Vacancy Impact on FAIR Bill Uncertain
----------------------------------------------------------------
Senate Judiciary Committee Chairman Arlen Specter said he is
unable to determine whether the upcoming nomination of a Supreme
Court justice would put the asbestos legislation on hold.
Sen. Specter, a co-author of the asbestos bill, chairs the
Senate Judiciary Committee that will hold hearings on President
Bush nominee to replace Supreme Court Justice Sandra Day
O'Connor, who recently announced her retirement. The White House
said Pres. Bush was not likely to announce any decision on a
replacement until after he returns from a trip to Scotland this
week.
The asbestos bill, which Specter co-sponsored with Vermont
Democrat Sen. Patrick Leahy, would put a stop to burgeoning
asbestos injury claims and pay them instead from a US$140
billion privately financed fund. Companies facing asbestos
lawsuits and their insurers would finance the fund over 30
years.
Asked if Sen. Specter could still get the asbestos legislation
done when he and the rest of the Senate will soon be focusing on
a Supreme Court nomination, he said, "That's impossible to say."
But with the court nomination coming up, it might be best to get
the asbestos measure brought up for a vote quickly, said Sen.
Specter at a news conference.
The Senate panel approved the legislation 13-5 in May however,
four of the Republicans who voted for the bill warned they would
oppose the legislation in its current form if it came to a vote
on the Senate floor. At the moment, a dispute still persists
over how much each individual manufacturer or insurer would pay
into the fund.
Sen. Specter has been trying to build more support for the
measure through negotiations with other senators. Meanwhile, he
has also been urging Sen. Frist, who serves as Senate majority
leader, to bring the measure to the floor for a vote.
ASBESTOS LITIGATION: Hardie Says Firm Was Always Keen on Payouts
----------------------------------------------------------------
In an attempt perceived by many as rewriting history, James
Hardie Industries clarified in its annual report that it had
always wanted to compensate asbestos sufferers. It stated that
the board actually considered extra funding for victims as long
ago as October 2003.
However, this statement contradicts public declarations at the
time that directors' duties to shareholders prevented them
releasing money for compensation without strict legal liability.
The annual report contains a six-page history of the affair,
because, the company says, its actions and objectives "have
frequently been misunderstood or misreported." It stated that on
October 29, 2003, the Company disclosed a $800 million shortfall
in the foundation it set up in 2001 to deal with asbestos
claims. It added that in its efforts to offer the foundation
further funding and in the interests of all stakeholders,
Hardie's directors needed to "take considerable time" to work
through a range of complex factors.
This contrasts with a company statement to the stock exchange on
October 29, 2003, that "there can be no legal or other
legitimate basis on which shareholders' funds could be used to
provide additional funds to the foundation and the duties of the
company's directors would preclude them from doing so."
In an interview with The Herald last week, chairwoman Meredith
Hellicar said the company's prior public statements on
directors' duties were "badly drafted" and put the company's
position "in an inflammatory way." Ms. Hellicar said the company
needed time to determine the size of the shortfall and to lobby
the government to reduce the costs of the asbestos compensation
system before shareholders' funds were committed.
"That [October 2003] statement at the time was very, very
damaging. But it was a correct statement of the legal obligation
and it needed to be said before the shareholders went berserk
and abandoned the company," said Ms. Hellicar.
The company has already agreed, in principle, to pay AUD1.5
billion to asbestos disease victims, with its annual payments
capped at 35 percent of its free cash flow until 2012. However,
a final, binding agreement between James Hardie, the NSW
Government and unions is yet to occur.
ASBESTOS LITIGATION: USGS Map Spots Asbestos Sites on Eastern US
----------------------------------------------------------------
In its ongoing effort to update existing national-scale
databases on asbestos occurrences, the U.S. Geological Survey
published a report containing a regional map and an associated
database that inventory 324 locations of naturally occurring
asbestos in the Eastern United States. The map is based on a
search of scientific literature and does not identify any new
occurrences of asbestos.
USGS Open File Report 2005-1189, "Reported Historic Asbestos
Mines, Historic Asbestos Prospects, and Natural Asbestos
Occurrences in the Eastern United States," demonstrates that
previously published maps and data compilations at regional and
national scales can contain inaccurate locality information and
may not consider a number of published natural asbestos
occurrences that appear in historic literature.
This USGS publication identifies the specific types of asbestos
present from Alabama to Maine. Previous regional to national
scale maps generally do not describe the specific types of
asbestos reported at any given occurrence. The map includes
different types of asbestos and asbestiform minerals and does
not attempt to distinguish between substances that may or may
not pose a risk to human health.
"USGS is updating its existing compilation of information on
asbestos localities because of strong interest expressed by the
public health, geologic, and environmental communities. This
updated compilation is the first step towards better
understanding the geologic factors that contribute to the
presence of asbestos across the Nation," said USGS Acting
Director Patrick Leahy.
Naturally-occurring asbestos has recently become the focus of
concern and attention from the public health community, due to
the potential exposures that may result if the asbestos-bearing
rocks are disturbed by natural erosion or human activities.
The USGS provides reliable scientific information to describe
and understand the Earth; minimize loss of life and property
from natural disasters; manage water, biological, energy, and
mineral resources; and enhance and protect our quality of life.
The USGS is organized with a Headquarters and Eastern Region
facility in Reston, Virginia. Central Region and Western Region
offices are located in Denver, Colorado, and Menlo Park,
California, respectively.
This report is available online at
http://pubs.usgs.gov/of/2005/1189/.
ASBESTOS LITIGATION: KY County W.D. Fails to Test for Asbestos
--------------------------------------------------------------
The Boone County Water District in Kentucky failed to test for
three consecutive years its water supply for possible asbestos
content, The Cincinatti Post reports.
Asbestos pipes were installed in the 1950s and 1960s before
people knew the health effects of the mineral.
The Kentucky Division of Water, which safeguards the state's
water quality, informed water districts back in 1994 that they
will test for asbestos in 2002, 2003, and 2004. However, the
initial notice was misfiled in Burlington, and the division
didn't send out a reminder.
Although Boone County Water District General Manager Phillip
Trzop claimed responsibility for the missed tests, he stressed
that there is no health hazard. The district has never tested
for asbestos before, so Mr. Trzop did not know if there's more
or less of it in the water this year. He said he had no reason
to believe tests in any other years would have yielded different
results.
The officials of Boone County Water District, which supplies to
nearly 60,000 customers, found that asbestos content in the
water is 1 million fibers per liter.
According to the US Environmental Protection Agency, anything
below 7 million fibers per liter is still acceptable. EPA also
adds that lifetime exposure to asbestos levels above 7 million
fibers per liter can cause lung disease or cancer.
To complete the required three-year cycle, the district plans to
test its water for asbestos for the next two years. Starting
2012, the cycle will be repeated.
Two other water suppliers in Boone County did not undertake the
required asbestos test: The Walton Waterworks, which supplies
water to more than 3,600 customers, and The Trapp Water Co. in
Burlington, which hauls water to rural customers in Boone
County. No other water suppliers in Boone, Kenton, Campbell or
Hamilton counties failed to do the asbestos testing when
required.
ASBESTOS LITIGATION: Flytipped Waste at School Alarms UK Council
----------------------------------------------------------------
The dumping of hazardous asbestos sheets outside St. Augustine's
RC Primary and Nursery School in Dunfield Road, Bellingham,
prompted teachers and parents to contact Lewisham council staff.
However, school secretary Catherine Young was disappointed
earlier action was not taken as it took four days before council
staff took the pile away.
Ms. Young said that the school considered using cameras to
combat the issue of flytipping, which she claims to be a regular
occurrence.
"We take fly-tipping very seriously and have an excellent track
record in keeping the borough's streets clean and safe," a
council spokesman defends. He added that the fly-tip was first
reported on June 28, and the council immediately acted.
The spokesman asserted that the tip consisted of asbestos so
they consulted the Corporation of London to give specialist
advice on the safe removal of asbestos.
Flytipping is the illegal deposit of waste onto land. Flytipped
waste generally consists of large items of rubbish that are
dumped illegally on land instead of being disposed of properly
at a landfill site.
ASBESTOS LITIGATION: UN Inspection Uncovers Health Hazards at HQ
----------------------------------------------------------------
While developing a six-year renovation plan set to commence in
2007, the United Nations discovered potentially dangerous
asbestos in the cracks and pipes of its New York headquarters.
Aside from leaky pipes lined with asbestos, the building houses
a creaky air conditioning system and a locked room with outdated
electrical equipment that pulsed with vast energy that disabled
computers on the floor below.
Peter Wendeborn, one of the architects working on the plan,
found asbestos behind the wall after peeling the cover of an air
conditioning unit in a conference room of the UN Secretariat
building. He said that around 4,000 units around the U.N.
building contained asbestos. He said that the hazardous material
also lined the giant snaking pipes, many of which are crumbling,
rusting, or leaking.
The UN complex revealed an intermittently functioning HVAC
system, lack of sprinklers, and an outdated fire alarm system.
According to Mr. Wendeborn, the buildings will only be gutted
internally and retrofitted, therefore retaining the shell as it
is more expensive to tear down the place.
The UN has been working for years on a US$1.2 billion Capital
Master Plan to renovate its headquarters completed in 1952.
Financing has not been finalized since the United States
declined to make an interest free loan, instead offering it at
5.54%. The United Nations invited diplomats, US congressmen and
media to take the "dirty" tour of the building to partly secure
the necessary funding.
The plan hit a snag as the New York City Legislature refused to
approve designs to build a 30-story office in an adjacent park
as a temporary home for the 3,400-plus people working at the UN.
Brooklyn is an alternative site across the East River while
other suggestions include a new tower at the World Trade Center
site or even a moored cruise ship.
The UN complex draws some 800,000 tourists a year, with visitors
paying up to US$11.50 for tours in several languages.
ASBESTOS LITIGATION: FM Creditors Withdraw Bid to Hire Lobbyists
----------------------------------------------------------------
Shortly after a court hearing on June 15, creditors of Federal-
Mogul Global Inc. withdrew a request to use company funds to pay
a lobbying firm to oppose the asbestos bill working its way
through Congress.
Citing that the FAIR currently brewing in the Senate is
"extremely disadvantageous" for the automotive parts maker, a
committee of its unsecured creditors asked Judge Richard T.
Lyons to authorize the hiring of the Federalist Group LLC to
help persuade Congress to scrap the legislation. In the
committee's request, a flat monthly fee of US$40,000 would be
charged to the Federal-Mogul estate.
The Southfield, Mich.-based Company filed for bankruptcy in 2001
under a flood of lawsuits alleging that asbestos in the
company's insulation and gasket products caused injury and
death. The case is pending before Judge Lyons of the U.S.
Bankruptcy Court for the District of Delaware.
Senate Bill 852, known as the Fairness in Asbestos Injury
Resolution Act of 2005, seeks to create a US$140 billion
industry-financed trust fund to compensate people who have been
injured from exposure to the fiber. The Senate Judiciary
committee approved the FAIR Act in a 13-5 vote last May 26.
The committee noted that the company would be required to
contribute an "onerous" US$2.5 billion to the trust fund. That
is "the largest amount from any single asbestos defendant," the
committee asserted.
Both the federal bankruptcy trustee and a committee of "property
damage claimants" opposed the request, saying the use of estate
funds to pay for the lobbying activities of a creditors' group
was improper under bankruptcy laws.
"If the debtor believes lobbying efforts are necessary and would
be effective, the debtor should pursue the lobbying efforts
directly," the trustee said. The creditors' interest in the FAIR
Act is only indirect, the trustee noted, because the legislation
might affect the amount left in Federal-Mogul's bankruptcy
estate to pay their claims.
The property-damage committee added that the lobbying firm did
not fit the category of "professionals" that may be hired with
court approval under bankruptcy laws.
ASBESTOS LITIGATION: Tasmanian Govt Seeks to Amend Law on Claims
----------------------------------------------------------------
The Tasmanian Government expects to finalize a position paper on
the survivorship provisions relating to claims by the estates of
asbestos victims by the end of the year, confirmed State
Attorney-General Judy Jackson. Further legislative changes to
protect asbestos victims and their families are also being
considered.
Unlike other Australian states, Tasmania remains to be the only
state where families of asbestos victims cannot continue a claim
for pain and suffering after the victim has died.
As previously reported on the January 7, 2005 edition of the
Class Action Reporter, the Legislative Council passed a bill to
remove asbestos-related diseases from the Limitations Act 1974,
removing the six-year deadline on claims. Under the new laws, a
person can claim up to 12 years from when the injury was caused,
or three years from when the injury was discovered. There is
also some provision for retrospective application to cover those
who knew they were ill but were prevented from claiming because
of the old laws.
However, Lawyer Margaret Kent says the current Tasmania law
still is unfair and leaves asbestos victims in an "obscene race
against death" to try to finalize legal arrangements to provide
for their families. She expressed that there needs to be a
government law passed to allow a claim to survive after the
victim's death.
ASBESTOS LITIGATION: More Japan Firms Link Deaths to Asbestos
-------------------------------------------------------------
After Kubota Corporation revealed last week that the deaths of
79 workers were linked to exposure at its asbestos-producing
plants, more companies have now come forward to disclose deaths
caused by the carcinogenic material, The AAP reports.
This development led the Japan Asbestos Association to ask all
24-member companies to investigate past health problems, which
the industry group vows to disclose.
Seven Japanese companies said 51 employees who had handled
asbestos had died in recent decades.
Chemical products maker Nippon Valqua Industries Ltd said 20 of
its plant workers had likely died from asbestos-related cancer
mesothelioma and other respiratory illnesses known to result
from the inhalation of asbestos fibers.
Taiheiyo Cement Corp. said 16 employees died from similar
afflictions between 1973 and 2004.
Mitsubishi Materials Kenzai Corp said one employee died of black
lung disease caused by asbestos in 1993 and another of lung
cancer in 2001.
Asahi Glass Co said one employee who had used protective gear
containing asbestos while working at a cathode-ray tube
manufacturing plant had died, but that it wasn't clear whether
the death was linked to the use of the tainted clothing.
Twelve others employed at three construction materials makers -
Nozawa Corp, Japan Insulation Co, and a contractor of Japan
Insulation - also died of black lung. However, the companies
asserted that the link with asbestos hadn't been confirmed.
Asbestos was widely used in Japan as insulation and in roof
tiles until the 1980s, and the government officially banned the
shipment or production of asbestos only last year.
ASBESTOS ALERT: Canadian Firm Fined Over Undisclosed Asbestos
-------------------------------------------------------------
For failing to tell contractors of the presence of asbestos in a
store they were demolishing, a Toronto company was fined
$30,000, The London Free Press reports.
Martin Donat, southwest manager of the Ontario Labor Ministry's
construction program, said the company had sent out tenders to
demolish a store at Argyle Mall in November 2001. However,
property owner First London East Developments failed to provide
contractors with a report that included drawings, plans and
specifications that would show where asbestos was, Mr. Donat
said.
The Company was convicted last week.
Company Profile:
First London East Developments Inc.
259 Yorkland Rd., Suite 300
North York, Ontario
ASBESTOS ALERT: OR Court Overturns Judgment in Suit V. La Grand
---------------------------------------------------------------
The Court of Appeals of Oregon on June 15, 2005 reversed and
remanded a trial court decision, which ruled for a summary
judgment in favor of La Grand Industrial Supply Co. The
plaintiff filed the appeal on a claim arising out of a former
employee's alleged exposure to asbestos while working at a
foundry in the early 1960s.
Judge Rick T. Haselton presided over the case styled, "Donna
West, Personal Representative of the Estate of Wendell Lee West
v. La Grand Industrial Supply Co."
Mr. West worked on the night shift at Western Foundry in Tigard
in 1963 and 1964. During that period, he and his coworkers used
asbestos gloves provided by their employer. The use of those
gloves created asbestos dust in the workplace. He claimed that
the dust from these gloves caused him to become afflicted with
mesothelioma, the asbestos-related disease that was the primary
cause of his death. However, other than knowing that Western
Foundry provided his gloves, Mr. West had no knowledge of who
manufactured, supplied, or distributed the gloves.
Among the products that La Grand supplied to its customers from
1961 to 1972 were asbestos gloves. From April 1964 to December
1964, while Mr. West was working at Western Foundry, La Grand
sold at least US$14,000 in industrial products to Western
Foundry. Nothing in the record specifically identifies the
nature of those products and whether they included asbestos
gloves. There is also no evidence in the summary judgment record
of Western Foundry purchasing industrial supplies from any other
source during the period of his employment.
The Appeals Court disagreed with the trial court's conclusion
that the plaintiff had failed to present sufficient evidence to
find that La Grand had, in fact, supplied to the foundry
asbestos gloves that were worn, causing injury from exposure to
asbestos fibers. In particular, La Grand had argued that the
affidavit submitted by Joachim Hillner, one of Mr. West's fellow
workers at the foundry, was inadmissible.
Mr. Hillner, who was an employee at the Western Foundry in
Tigard, OR, from 1960 to 1993, testified that he and the other
workers regularly used or wore asbestos-containing products. He
recalled the use of asbestos-containing gloves, which, he says,
were sold by La Grand, the major supplier of foundry products to
Western Foundry from 1960 through 1975. He added that he
personally observed dust being created from the asbestos gloves.
La Grand asserted that nothing in the affidavit showed that Mr.
Hillner had personal knowledge about the source of the foundry's
asbestos gloves. It questioned whether the gloves were supplied
during the period of Mr. West's employment. La Grand also
contended that Mr. Hillner's job as a foundry helper and later
as a molder and coremaker placed him at the foundry and not in
the office where supplies were ordered.
The Appeals Court stated that no explicit statement by Mr.
Hillner as to his personal knowledge and competence was
necessary. It concluded that the testimony is sufficient to
support a finding that La Grand supplied asbestos gloves to
Western Foundry and that Mr. West was injuriously exposed during
his employment to asbestos fibers from those gloves. The Court
ruled that the inference drawn from the disclosed facts held the
testimony "reasonable and permissible." Consequently, the
Appeals Court held that the trial court erred in granting
summary judgment.
Robert K. Udziela argued the cause and filed the briefs for
appellant. R. Daniel Lindahl argued the cause for respondent.
With him on the brief were Jeanne F. Loftis and Bullivant Houser
Bailey, PC.
Company Profile:
La Grand Industrial Supply Co
2620 SW 1st Ave
Portland, Oregon
Phone: (503) 224-5800
Fax: (503) 224-0639
ASBESTOS ALERT: CA Couple Sues 2 Firms for Bungled Flooring Job
---------------------------------------------------------------
A couple filed a lawsuit against Lowe's Companies Inc. and A.G.
Floor Covering Inc. for a botched flooring job, which exposed
them and some workers to hazardous asbestos levels, reports The
Daily Bulletin.
Represented by Bill Sullivan of San Diego, Ron and Lisa Caron
are demanding that these companies cover the losses from the
incident in Rancho Cucamonga, CA.
The liability dispute originated last February 9 when Mr. Caron
hired Lowe's Companies Inc. to replace the carpet and tiles in
his house. In turn, Lowe's contracted A.G. Floor Covering to do
the US$4,600 job.
A.G. Floor Covering's attorney Alex Gilanians said that Mr.
Caron misled A.G. Floor Covering into believing that Lowe's had
authorized the removal of the existing flooring. He stated that
Mr. Caron also failed to disclose that the linoleum may contain
asbestos, exposing the workers to the carcinogenic material. He
asserted further that it is not in the company's scope of work
to remove flooring.
Upon learning that Lowe's faced numerous asbestos-related
lawsuits, Mr. Caron sent linoleum and tile samples to H2
Environmental Consulting Services Inc. for testing. This
revealed the presence of asbestos, as high as 60% in one sample.
H2 Environmental Vice President Thomas Haley advised him that
his house has now become uninhabitable due to the risks and that
it would require extensive environmental cleanup and disposal of
most of their belongings into a special asbestos disposal site.
Mr. Caron said that A.G. acted immediately and gave him checks
totaling US$2,200 as payment for the evaluation and for the
letter H2 Environmental must write the South Coast Air Quality
Management District to alert them to the situation.
For four months now, the Carons have been living in an Ontario
hotel. A.G. initially footed the Carons' hotel bill but for
various reasons, has stopped paying for this as well, saying
that the Carons were "taking advantage of A.G. Floor Covering's
cooperation."
Mr. Gilanians claimed A.G. offered to pay for the asbestos
cleanup "without admission of liability" and only for the
"purpose of customer satisfaction." The offer also included the
replacement of some of the couple's "essential living needs."
While Mr. Gilanians would not reveal the amount of the lump sum
offered to the couple, Mr. Caron said it was US$26,000, which
included an estimated US$16,200 for the cleanup completed in the
past few weeks.
Company Profile:
Lowe's Companies Inc. (NYSE: LOW)
1000 Lowe's Blvd.
Mooresville, NC 28117
Phone: 704-758-1000
Fax: 336-658-4766
Toll Free: 800-445-6937
http://www.lowes.com
Fiscal Year-End : January
2005 Sales (mil.) : US$36,464.0
1-year Sales Growth : 18.2%
2005 Net Income (mil.) : US$2,176.0
1-Year Net Income Growth : 15.9%
2005 Employees : 162,000
1-Year Employee Growth : 10.2%
Description:
Ranked as the #2 home improvement chain, Lowe's has almost 1,100
stores in 48 states. It provides products for home improvement
and repair projects.
ASBESTOS ALERT: Nichias Links 141 Worker Deaths to Operations
-------------------------------------------------------------
Nichias Corporation disclosed that 141 of its employees died of
cancer and lung disease over the last three decades probably
caused by the company's production of asbestos insulation, The
Japan Times reports.
The employees who died of mesothelioma and pneumoconiosis were
employed at five factories and other construction sites where
sealing materials, thermal insulation and other building
materials are made, company spokesman Ikuo Kawamura said.
Nichias used asbestos from 1937 up to last year.
Mr. Kawamura clarified that 100 plant workers and 41
construction workers died between 1976 and 2004, while 24 others
are being treated for illnesses linked to asbestos. The workers
who died were exposed to lethal types of asbestos that the
company banned in 1972.
No illnesses or deaths have been reported among workers who
joined the company after that year. The company does not know of
residents living near the firm's plants who are diagnosed with
asbestos-related illnesses.
The company provided compensation to all of the victims and the
patients diagnosed with cancer likely caused by exposure to
asbestos, the Company said.
Company Profile:
Nichias Corporation
1-1-26 Shibadaimon, Minato-ku, Tokyo 105-8555
Phone: 81-3-3433-7261
Fax: 81-3-3438-670
http://www.nichias.co.jp/nichias-E/index.htm
Email: info@nichias.co.jp
Description:
Nichias Corporation is a Japanese company that provides high-
technology ceramic and polymer products for a range of
applications including fire-resistant construction materials,
electronic components and insulation for spacecraft.
New Securities Fraud Cases
AUTHENTIDATE HOLDING: Marc S. Henzel Files Securities Suit in NY
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of purchasers of AuthentiDate
Holding Corp. (NASDAQ: ADAT) publicly traded securities during
the period between September 29, 2003 and May 27, 2005 (the
"Class Period").
The complaint charges AuthentiDate and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. AuthentiDate provides web-based content authentication
services that address the verification of digital information in
all business processes.
The complaint alleges that during the Class Period, defendants
made materially false and misleading statements regarding the
Company's business and prospects, specifically about revenues to
be derived from an agreement with the U.S. Postal Service. The
Company also concealed certain internal control problems. These
false statements caused AuthentiDate stock to trade at
artificially inflated levels, reaching as high as $18.69 per
share in January 2004. Taking advantage of this artificial
inflation, AuthentiDate completed a private placement of its
stock in February 2004, raising $69 million in net proceeds.
AuthentiDate's CFO and former CEO also took advantage of the
inflation, selling 156,000 shares of their AuthentiDate stock
for proceeds of $1.7 million.
On April 13, 2005, AuthentiDate announced the dismissal of its
accounting firm PricewaterhouseCoopers LLP. Later, on April 29,
2005, AuthentiDate filed a Form 8-K with the SEC disclosing it
had hired a new accounting firm and also that on April 15, 2005,
its CFO had sent a letter to certain members of the Company's
Board of Directors, advising them of the existence of corporate
governance issues. The Company hired special counsel to
investigate the letter.
Then, on May 27, 2005, the Company issued a press release
announcing that "its ongoing discussions with the United States
Postal Service regarding the status of its Strategic Alliance
Agreement had reached a critical stage with the receipt of a
second notice from the Postal Service stating that it had failed
to attain the performance metrics required by the Strategic
Alliance Agreement during the period February 2005 through April
2005." On this news, AuthentiDate's stock collapsed to $2.94 per
share on volume of 1.28 million shares.
For more details, contact the Law Offices of Marc S. Henzel, 273
Montgomery Ave., Suite 202, Bala Cynwyd, PA, 19004, Phone: 610-
660-8000 or 888-643-6735, Fax: 610-660-8080, E-Mail:
mhenzel182@aol.com.
GUIDANT CORPORATION: Scott + Scott Expands Suit's Class Period
--------------------------------------------------------------
Scott + Scott, LLC is expanding the former Class Period for the
shareholder class action lawsuit it filed against Guidant
Corporation (NYSE: GDT) has been expanded and now includes
securities purchases between December 15, 2004, and June 23,
2005. The deadline for filing lead plaintiff petitions remains
August 23, 2005. For a summary of the claims against the
defendants, see
Originally, the suit was filed in the United States District
Court for the Southern District of Indiana on behalf of
purchasers of Guidant Corporation (NYSE: GDT - News) securities
during the period between December 15, 2004 and June 17, 2005,
inclusive (the "Class Period").
On June 24, 2005, Guidant announced that it would voluntarily
advise physicians about important safety information regarding a
number of its medical devices. Guidant further stated that the
FDA may classify Guidant's actions in this regard as a recall.
Guidant also stated that as a precautionary measure, physicians
should discontinue implants of the suspect devices pending
further notice. On this news, the shares fell $4.70 per share
(6.85%), to close at $63.90 per share on unusually heavy volume.
The Complaint alleges that insiders at Guidant were motivated to
commit this fraudulent scheme in order, among other reasons, for
them to sell their personally held Guidant stock at artificially
inflated prices. Guidant insiders sold a total of 894,081 of
their personally held shares for gross proceeds of
$65,703,975.00.
For more details, contact Neil Rothstein or Amy K. Saba of Scott
+ Scott, LLC, Phone: +1-619-251-0887 or 1-800-332-2259, E-mail:
nrothstein@scott-scott.com or asaba@scott-scott.com.
HARLEY-DAVIDSON INC.: Spector Roseman Lodges Stock Lawsuit in WA
----------------------------------------------------------------
The law firm of Spector, Roseman & Kodroff, P.C. initiated a
securities class action lawsuit in the United States District
Court for the Eastern District of Wisconsin, on behalf of
purchasers of the common stock of Harley-Davidson, Inc.
("Harley" or the "Company") (NYSE: HDI) between January 21, 2004
through April 12, 2005, inclusive (the "Class Period").
The complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of Harley securities.
It is specifically alleged that throughout the Class Period, the
Company failed to disclose and misrepresented the following
material adverse facts, which were known to defendants or
recklessly disregarded by them:
(1) that the much-touted gap between the consumer demand
for Harley's products and the available supply had
disappeared;
(2) that the Company, in an effort to mask the decline in
demand, shipped excess inventory to dealers;
(3) that the profitability of the Company's Financial
Services Division was being negatively impacted by
interest rate fluctuations;
(4) as a result, the Company's financial results were
materially inflated at all relevant times; and
(5) that the Company's projections regarding future growth
lacked any reasonable basis when made.
On April 13, 2005, Harley announced that they decided to limit
short-term production growth. This action would result in a
negative change to Harley's previous guidance for both shipments
and earnings growth for 2005. News of this shocked the market.
Shares of Harley fell $9.84 per share or 16.74 percent, on April
13, 2005, to close at $48.93 per share.
For more details, contact Robert M. Roseman of Spector, Roseman
& Kodroff, P.C., Phone: +1-888-844-5862, Web site:
http://www.srk-law.com.
NAVARRE COPRORATION: Wechsler Harwood Lodges Stock Lawsuit in MN
----------------------------------------------------------------
The law firm of Wechsler Harwood LLP ("Wechsler Harwood") filed
a class action lawsuit in the United States District Court for
the District of Minnesota on behalf of purchasers of the
securities of Navarre Corporation ("Navarre" or the "Company")
(Nasdaq:NAVR) between July 23, 2003 and May 31, 2005, inclusive
(the "Class Period"), seeking to pursue remedies under the
Securities Exchange Act of 1934 (the "Exchange Act") against
defendants Navarre, Eric H. Paulson (Navarre's chief executive
officer, president and chairman) and James Gilbertson (Navarre's
chief financial officer).
The Complaint alleges that throughout the Class Period
defendants continually reported record results for the Company
every quarter that were supposedly achieved by successful
execution of Navarre's business strategy. However, these
representations concerning the Company's financial results and
its business were materially false and misleading for the
following reasons:
(1) defendants had materially inflated Navarre's reported
income by failing to properly recognize expenses
relating to executive deferred compensation;
(2) defendants' apparent success was principally
attributable to improper accounting;
(3) The Company's financial results, reported in press
releases and SEC filings were not, contrary to
defendants' express representations, prepared in
accordance with generally accepted accounting
principles;
(4) the certifications signed by defendants Paulson and
Gilbertson in Navarre's SEC filings, which attested to
the purported accuracy of the financial results
included therein, were false because the financial
results were artificially inflated through improper
accounting;
(5) during the third fiscal quarter of 2005, Navarre
improperly recognized millions of dollars in deferred
tax benefits as income; and
(6) Navarre was actually -- contrary to its representations
-- experiencing a significant slowdown in demand for
its anti-virus software products that was materially
and negatively impacting its overall business.
On May 31, 2005, Navarre issued a press release announcing that
it would postpone release of the Company's fourth quarter and
fiscal year 2005 results pending an accounting review focused on
the recognition of deferred compensation expense for payments
made to defendant Paulson and the classification of fiscal 2005
tax items. In response to this announcement, the price of
Navarre common stock dropped from $9.00 per share on May 31,
2005 to $8.02 per share on June 1, 2005, a one-day drop of 10.8%
on unusually heavy trading volume.
The Complaint further alleges that defendants were motivated to
commit the alleged wrongdoing in order that Navarre insiders,
including defendants Paulson and Gilbertson, could sell their
personally held Navarre shares at artificially inflated prices.
The Complaint alleged that during the Class Period, insiders
sold a total of 1,269,000 shares, for total proceeds of
$16,183,254.58.
For more details, contact Virgilio Soler, Jr., Shareholder
Relations Department of Wechsler Harwood, LLP, 488 Madison
Avenue, 8th Floor, New York, NY, 10022, Phone: (877) 935-7400,
E-mail: vsoler@whesq.com.
UNITED AMERICAN: Schatz & Nobel Files Securities Suit in E.D. MI
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Eastern District of Michigan on behalf of all persons who
purchased the common stock of United American Healthcare
Corporation (Nasdaq: UAHC) ("United American" or the "Company")
between May 26, 2000, and April 22, 2004, inclusive (the "Class
Period").
The Complaint alleges that United American and certain of its
officers and directors violated federal securities laws.
Specifically, defendants failed to disclose the Company's
improper business and financial relationship with a legislator
having oversight of United American's Healthplan. The Complaint
further alleges that this relationship was in violation of the
Company's contract with Tennessee and has caused the State of
Tennessee to place United American's Healthplan under
administrative supervision. As a result, investors could not
accurately assess the extent to which United American's ongoing
operations, reported revenue, and income were dependent upon the
improper political payments scheme.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa of
Schatz & Nobel, P.C. by Phone: (800) 797-5499 by E-mail:
sn06106@aol.com or visit their Web site: http://www.snlaw.net.
*********
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
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without
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