/raid1/www/Hosts/bankrupt/CAR_Public/050803.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, August 3, 2005, Vol. 7, No. 152
Headlines
AMERICAN EXPRESS: Certification Sought For Ex-AEFA Clients' Suit
AMERUS GROUP: Faces Suits Over Senior Citizen Insurance Products
AVON PRODUCTS: NY Securities Fraud Suit Dismissal Deemed Final
AVON PRODUCTS: Seeks Writ of Certiorari For Suit Reinstatement
AVON PRODUCTS: Consumer Fraud Lawsuit Moved To FL Federal Court
BETTER BRAKE: Recalls 50,833 Caliper Bolts Due to Crash Hazard
BROADCOM CORPORATION: CA Court Preliminarily OKs Suit Settlement
CCC INFORMATION: IL Court Preliminarily Approves Suit Settlement
CCC INFORMATION: GA Court Affirms Consumer Fraud Suits Dismissal
CCC INFORMATION: CA Court Drops All Claims Except One in Lawsuit
COMMUNITY HEALTH: Faces Uninsured Patients' Lawsuit in AL Court
COMMUNITY HEALTH: Faces Uninsured Patients' Lawsuit in PA Court
COMMUNITY HEALTH: Faces Uninsured Patients' Lawsuit in IL Court
COMMUNITY HEALTH: Faces Uninsured Patients Lawsuit in IL Court
DT INDUSTRIES: SEC Obtains Final Judgment V. Michael Lesniewski
E-TAILERS: FTC Conducts Survey on Compliance For CAN-SPAM Act
EXPRESS SCRIPTS: Securities Fraud Suits Transferred to E.D. MO
EXPRESS SCRIPTS: NJ Court Nixes Certification For Consumer Suit
EXPRESS SCRIPTS: CA Court Dismisses Lawsuit For Consumer Fraud
EXPRESS SCRIPTS: CA Court Grants Summary Judgment For Fraud Suit
EXPRESS SCRIPTS: Faces Brach of Fiduciary Duty Suit in E.D. MO
FINISAR CORPORATION: Final Fairness Hearing Set January 2006
JETBLUE AIRWAYS: Privacy Suit Dismissed, No Damages to be Paid
MARSH & MCLENNAN: Firm Added as a Defendant in Axis Capital Suit
MCCLATCHY CO.: Employment Agencies File MN Price Inflation Suit
MITSUBISHI MOTORS: Recalls 1,179 Lancer Vehicles For Fire Hazard
NEW YORK: Middletown District Might Join Suit Over School Aid
NEW YORK: Verdict Issued Against Kickback Scheme Defendants
ONLINE FIRMS: FTC Files Deceptive Trade Suit V. 2 Online Firms
PALM INC.: Faces Third Amended Consumer Fraud Suit in IL Court
PERRIGO COMPANY: Recalls Infants' Oral Drops For Improper Dosing
REINKE MANUFACTURING: Recalls 548 Trailers For Collision Hazard
SOUTH KOREA: Class Action Legislation Filed to Combat Data Leaks
US UNWIRED: Asks LA Court To Dismiss Securities Fraud Lawsuit
VISTEON INVESTMANT: MI Judge Appoints Law Firm AS Lead Counsel
WAL-MART STORES: Hopes to Stop Huge Sex Discrimination Lawsuit
WALGREEN CO.: Three Pharmacists Added Racial Discrimination Suit
XEROX CORPORATION: IBEW Seeks To Be Lead Plaintiff in CT Lawsuit
XEROX CORPORATION: CT Court Refuses To Dismiss Securities Suit
XEROX CORPORATION: CT Court Yet To Rule on ERISA Suit Dismissal
XEROX CORPORATION: Plaintiffs Appeal NY Apartheid Suit Dismissal
XEROX CORPORATION: Continues To Face NY Race Discrimination Suit
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
AVON PRODUCTS: Schatz & Nobel Lodges Securities Fraud Suit in NY
MOLINA HEALTHCARE: Schiffrin & Barroway Lodges Stock Suit in CA
RAMP CORPORATION: Murray Frank Files Securities Fraud Suit in NY
RENAISSANCERE HOLDINGS: Chitwood Harley Files Stock Suit in NY
UBS-AG: Milberg Weiss Lodges Securities Fraud Suit in S.D. NY
*********
AMERICAN EXPRESS: Certification Sought For Ex-AEFA Clients' Suit
----------------------------------------------------------------
American Express Financial Advisors (AEFA), a division of
American Express (NYSE:AXP) was served with a Motion, asking the
Federal Court in Arizona to certify a class of more than 500,000
former AEFA clients (As of August 1, 2005, AEFA is known as
Ameriprise Financial, Inc.). In the Class Certification motion,
the former clients allege that AEFA violated fiduciary duties
and perpetrated a scheme to defraud its investing clients
through the Company's sale of Financial Plans.
Between 1999 and 2004, hundreds of thousands of former AEFA
clients sought and paid for financial advice based on the
Company's promise of informed, objective, personalized, and
unbiased advice. According to the former clients, despite these
promises, AEFA betrayed this trust and utterly failed to deliver
unbiased financial advice. Instead, the former clients allege
that the Company charted a course of business that defrauded and
manipulated AEFA's fee-paying advisory clients, using the
financial advisory segment of its immense sales organization to
advance AEFA's interests, in violation of the Investment
Advisers Act (IAA).
The class certification motion argues that in perpetrating its
scheme, AEFA executives enriched themselves by creating
incentive programs for financial advisors to sell American
Express proprietary products, which created an inherent conflict
of interest that impaired the advisor's ability to render
objective and unbiased advice. According to the Motion, this
kind of scheme constitutes a breach of fiduciary duty under the
federal regulation for investment advisors, the IAA. The IAA
allows for rescission -- or money back -- for violations of the
Act.
On February 17, 2005, the State of New Hampshire Bureau of
Securities Regulation commenced an action, with similar charges;
that case has now reached settlement. AEFA settled those claims
by agreeing to pay a total of $7.5 million to the State of New
Hampshire, with up to $2 million in restitution paid to
individual purchasers of the Financial Plans residing in New
Hampshire.
The Motion for Class Certification is anticipated to be heard in
Fall 2005. Copies of the New Hampshire Complaint, New Hampshire
Settlement, and the non-confidential portions of the Class
Certification Motion are available at http://www.zimmreed.com.
For more details, contact Carolyn Anderson of Zimmerman Reed,
Phone: (800) 755-0098, Web site: http://www.zimmreed.com.
AMERUS GROUP: Faces Suits Over Senior Citizen Insurance Products
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AmerUs Group Co. and/or certain of its subsidiaries face
nationwide class action lawsuits brought in federal courts in
California, Pennsylvania and Kansas as well as a lawsuit by the
attorney general and the insurance commissioner of California
and a lawsuit by the attorney general of Pennsylvania on behalf
of purchasers of insurance products.
In the Pennsylvania case, commenced on May 19, 2005, a
nationwide class action lawsuit was also filed in the Eastern
District of Pennsylvania against a subsidiary of AmerUs Group
Co. on behalf of purchasers of insurance products. The lawsuits
relate to the use of purportedly inappropriate sales techniques
and products for the senior citizen market. Some of the
complaints allege, among other things, that the defendants
engaged in the unauthorized practice of law, claims related to
the suitability of the products for, and the manner in which
they were sold to, the senior citizen market, pretext sales and
other violations of state insurance laws. The plaintiffs seek
civil penalties, restitution, injunctive relief, punitive
damages, attorneys' fees and other relief and damages.
The Company and/or certain of its subsidiaries are also
defendants in statewide class actions in California,
Pennsylvania and a recently filed case in Florida based on
claims and seeking relief similar to the claims and relief in
the nationwide class actions.
The Florida case was filed in the United States District Court
for the Middle District of Florida on July 7, 2005 against a
subsidiary of the Company on behalf of purchasers of insurance
products. On May 12, 2005, in one statewide class action, Cheves
v. American Investors Life Insurance Company, Family First
Advanced Estate Planning and Family First Insurance Services et
al., filed on October 20, 2003 in California state court, class
certification was granted by the court.
AVON PRODUCTS: NY Securities Fraud Suit Dismissal Deemed Final
--------------------------------------------------------------
The dismissal of the securities class action filed against Avon
Products, Inc. is deemed final after plaintiffs failed to appeal
the United States Second Circuit Court of Appeals' ruling
affirming the dismissal.
The suit was filed on behalf of certain classes of holders of
Avon's Preferred Equity-Redemption Cumulative Stock (PERCS).
Plaintiffs alleged various contract and securities law claims
related to the PERCS (which were fully redeemed in 1991) and
sought aggregate damages of approximately $145.0, plus interest.
A trial of this action took place in the United States District
Court for the Southern District of New York and concluded in
November 2001. In March 2004, the court rendered a decision in
favor of Avon and dismissed the complaint. The plaintiffs
appealed the court's decision to the United States Court of
Appeals for the Second Circuit, and in February 2005 the Court
of Appeals affirmed the decision of the District Court.
The suit is styled "Chartwell Associates, et al v. Avon Products
Inc., et al, case no. 1:91-cv-00806-PNL," filed in the United
States District Court for the Southern District of New York
under Judge Pierre N. Leval. Representing the Company are
Steven L. Holley and Stuart D. Meiklejohn of Sullivan &
Cromwell, 125 Broadway, NY, NY 10004, Phone: 558-4000, E-mail:
meiklejohns@sullcrom.com. Representing the plaintiffs is
Philippe Marc Salomon, Willkie Farr & Gallagher LLP (NY), 787
Seventh Avenue, New York, NY 10019, Phone: (212) 728-8000, Fax:
(212) 728-8111, E-mail: maosdny@willkie.com
AVON PRODUCTS: Seeks Writ of Certiorari For Suit Reinstatement
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Avon Products, Inc. filed a petition for a writ of certiorari
with the California Supreme Court in relation to a lower court
decision reinstating the claims in a class action filed against
it, styled "Blakemore, et al. v. Avon Products, Inc."
The suit was filed in the Superior Court of the State of
California, Los Angeles County on behalf of Avon Sales
Representatives who "since March 24, 1999, received products
from Avon they did not order, thereafter returned the unordered
products to Avon, and did not receive credit for those returned
products." The complaint seeks unspecified compensatory and
punitive damages, restitution and injunctive relief for alleged
unjust enrichment and violation of the California Business and
Professions Code. This action was commenced in March 2003.
The Company filed demurrers to the original complaint and three
subsequent amended complaints, asserting that they failed to
state a cause of action. The court sustained the Company's
demurrers and dismissed plaintiffs' causes of action except for
the unjust enrichment claim of one plaintiff. The court also
struck plaintiffs' class allegations.
Plaintiffs sought review of these decisions by the Court of
Appeal of the State of California and, in May 2005, the Court of
Appeal reinstated the dismissed causes of action and the class
allegations. The Company filed a Petition for Certiorari with
the California Supreme Court seeking clarification of the
standard for appellate court review of a trial court's decision
striking class allegations. The Company said in a disclosure to
the Securities and Exchange Commission that this action is a
dispute over purported customer service issues and is an
inappropriate subject for consideration as a class action.
The suit is styled "Blakemore et al v. Avon Products, Inc.,
B174825, B175973" filed in the Superior Court of California, Los
Angeles County under Judge Wendell Mortimer. Lawyer for the
plaintiffs is Jeffrey Huron of the Huron Law Group, 1875 Century
Park East, Suite 1000, Los Angeles, CA 90067, Phone:
310-284-3400, Fax: 310-772-0037, Website:
http://www.huronlaw.com.
AVON PRODUCTS: Consumer Fraud Lawsuit Moved To FL Federal Court
---------------------------------------------------------------
The class action filed against Avon Products, Inc. for deceptive
trade practices has been removed to the United States District
Court for the Southern District of Florida.
The suit, styled "Roqueta v. Avon Products, Inc.," was initially
filed in April 2005 in the Circuit Court of the Eleventh
Judicial Circuit in and for Miami-Dade County, Florida. The
action seeks general damages, special damages and punitive
damages for alleged violations of the Florida Deceptive and
Unfair Trade Practices Act and Florida statutes regarding
misleading advertisements, and for negligent and fraudulent
misrepresentation. The purported class includes "all persons
who have purchased skin care products from the Defendant that
have been falsely advertised to have an `anti-cellulite' or
cellulite reducing effect."
The Company removed the action to the United States District
Court for the Southern District of Florida and has moved to
dismiss the complaint for failure to state a claim upon which
relief can be granted.
BETTER BRAKE: Recalls 50,833 Caliper Bolts Due to Crash Hazard
--------------------------------------------------------------
Better Brake Parts in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling about 50,833 units of 9999 BBP /
6058 caliper bolts due to crash hazard. NHTSA CAMPAIGN ID
Number: 05E047000.
According to the ODI, certain Better Brake Parts (BBP) Caliper
bolts, P/N 6058, sold as replacement equipment for use on
various passenger vehicles. Due to an embrittlement condition,
these bolts may break without warning and the caliper could
become unanchored from the mounting bracket, possibly impairing
the braking ability of the vehicle. If the bolt breaks and the
caliper become unanchored, a vehicle crash could occur.
As a remedy, BBP will notify its customers and replace the bolts
free of charge.
For more details, contact BBP, Phone: 800-234-2231 OR the NHTSA
Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site:
http://www.safecar.gov.
BROADCOM CORPORATION: CA Court Preliminarily OKs Suit Settlement
----------------------------------------------------------------
The United States District Court for the Central District of
California granted preliminary approval to the settlement of the
consolidated securities class action filed against Broadcom
Corporation and certain of its current and former executive
officers.
From March through May 2001 the Company and three of its current
and former executive officers were served with a number of
shareholder class action complaints alleging violations of the
Securities Exchange Act of 1934, as amended. The essence of the
allegations was that the defendants intentionally failed to
disclose and properly account for the financial impact of
performance-based warrants assumed in connection with five
acquisitions consummated in 2000 and 2001, which plaintiffs
allege had the effect of materially overstating the Company's
reported and future financial performance. In
June 2001, the lawsuits were consolidated before the United
States District Court for the Central District of California
into a single action entitled "In re Broadcom Corp. Securities
Litigation."
In October 2003, the court issued an order certifying a class of
all persons or entities who purchased or otherwise acquired
publicly traded securities of the Company, or bought or sold
options on the Company's stock, between July 31, 2000 and
February 26, 2001, with certain exceptions. By a Stipulation of
Settlement dated as of June 24, 2005, the parties agreed to
settle the Class Action. Under the Stipulation, the Class
Action will be dismissed with prejudice in exchange for an
aggregate payment of $150 million in cash, which will be
distributed to class members after the payment of costs of
administering the settlement and any fees and costs the Court
may award to plaintiffs' counsel. The Company expects that its
insurance carriers will pay approximately $40 million of the
Settlement Fund. Of the remaining balance, $108 million was
paid by the Company into an escrow account in July 2005. Any
additional amount necessary to bring the Settlement Fund to $150
million will be paid into the escrow account by the Company no
later than two business days before the Court hearing on final
approval of the Stipulation.
In June 2005 the Court granted preliminary approval of the
Stipulation and the settlement set forth therein, set a hearing
date of September 12, 2005 on a motion for final approval, and
directed that a notice of the settlement be delivered to members
of the class and published in national media. However, the
settlement remains subject to the satisfaction of various
conditions, including without limitation "a commitment by the
Company's insurance carriers to fund their portion of the
Settlement Fund," and "final approval by the Court following the
notice period and consideration of any objections to the
settlement."
The Plaintiffs have agreed to dismiss the Class Action with
prejudice effective upon final Court approval. The Plaintiffs
and Defendants have also agreed to releases covering all
asserted and unasserted, known and unknown, claims relating to
the Class Action and the prosecution of the Class Action,
contingent upon final approval of the settlement. As part of
the settlement, the Company and the other Defendants continue to
deny any liability or wrongdoing with respect to the claims
raised in the Class Action. If for any reason the settlement
does not become final, or if the Stipulation is cancelled or
terminated, contributions to the Settlement Fund will be
returned to the parties who made them (less any notice or
administrative costs incurred pursuant to the Stipulation), the
parties will be restored to their respective positions in the
litigation as of June 20, 2005, and the Company will continue to
contest the claims on the merits.
In February 2002 an additional complaint, entitled "Arenson, Et
al. v. Broadcom Corp., et al.," was filed by 47 persons and
entities in the Superior Court of the State of California for
the County of Orange, against the Company and three of its
current and former executive officers. The Company removed the
lawsuit to the United States District Court for the Central
District of California, where it was consolidated with the Class
Action. The plaintiffs subsequently filed an amended complaint
in that court that tracks the allegations of the Class Action
complaint. The parties have completed discovery in this case.
Through orders issued in October and December 2004, the court
dismissed the claims of 31 plaintiffs on the ground that they
had sustained no damages. By stipulation and order entered by
the court in January 2005, the parties agreed that the claims of
one of the dismissed plaintiff could be reinstated (subject to
that plaintiff's agreement that its damages, calculated in
accordance with the court's prior orders, did not exceed $745)
but that five additional plaintiffs should be dismissed because
they did not incur any damages. Accordingly, the claims of 35
of the original 47 "Arenson" plaintiffs have been dismissed and
the claims of 12 plaintiffs remain. According to the opinion
provided by the plaintiffs' expert, the remaining plaintiffs
appear to have claims for no more than $1.6 million in potential
damages, which defendants contest and believe to be overstated.
The plaintiffs in the "Arenson" matter are not parties to the
proposed settlement of the Class Action, although the
Stipulation provides that the "Arenson" plaintiffs may elect
individually to become members of the class and participate in
that settlement in lieu of pursuing their claims in the
"Arenson" action. The Court has stayed further proceedings in
the "Arenson" matter pending the hearing on final approval of
the settlement in the Class Action.
The suit is styled "In re Broadcom Securities Litigation, case
no. 8:01-cv-00275-DT-MLG," filed in the United States District
Court for the Central District of California, under Judge
Dickran Tevrizian. Representing the plaintiffs are:
(1) Barbara A. Podell, Berger & Montague, 1622 Locust St
Philadelphia, PA 19103-6365, Phone: 215-875-3000
(2) Brian L. Williams and Madge S. Thorsen of Heins Mills &
Olson, 80 South 8th St, Minneapolis, MN 55402, Phone:
612-338-4605, E-mail: bwilliams@heinsmills.com
(3) Jonathan E. Behar, Lerach Coughlin Stoia Geller Rudman
and Robbins, 9601 Wilshire Boulevard, Suite 510, Los
Angeles, CA 90210, Phone: 310-859-3100, Fax: 310-278-
2148
(4) Marc A. Topaz, Schiffrin & Barroway, 3 Bala Plaza E
Ste 400, Bala Cynwyd, PA 19004, Phone: 610-667-7706
Representing the Company are Christine WS Byrd, Daniel P.
Lefler, David Siegel, Harry Arthur Mittleman, Jason M. Goldberg,
Layn R. Phillips, Peter J. Gregora of Irell & Manella, 1800
Avenue of the Stars, Ste 900, Los Angeles, CA 90067-4276, Phone:
310-277-1010, E-mail: lphillips@irell.com and Patrick Ryan of
Ryan Whaley and Coldiron, 900 Robinson Renaissance, 119 North
Robinson, Oklahoma City, OK 73102, Phone: 405-239-6040, E-mail:
pryan@ryanwhaley.com.
CCC INFORMATION: IL Court Preliminarily Approves Suit Settlement
----------------------------------------------------------------
The Circuit Court of Madison County, Illinois granted
preliminary approval to the settlement of the class actions
filed against CCC Information Services, Inc. and others,
consolidated as "In re Total Loss Class Action Litigation, Case
Nos. 01 L 157, et al."
The suits relate to the valuation of vehicles that have been
declared total losses by insurers. The proposed classes
represent all customers of the settling carriers who had a total
loss claim from January 28, 1989 to the present, for which the
Company's product and service (now called CCC Valuescope(R))
were used to perform the valuation.
On July 13, 2005, the Company signed a settlement agreement with
the plaintiffs and co-defendants in the suits, styled:
(1) LANCEY v. COUNTRY MUTUAL INS. CO., AND CCC INFORMATION
SERVICES INC., Case No. 01 L 113 (filed January 29,
2001);
(2) KMUCHA v. COLONIAL PENN INSURANCE COMPANY AND CCC
INFORMATION SERVICES INC., Case No. 03 L 1267 (filed
September 18, 2003);
(3) JACKSON v. ATLANTA CASUALTY COMPANY, INFINITY PROPERTY
& CASUALTY CORPORATION AND CCC INFORMATION SERVICES
INC., Case No. 03 L 1266 (filed September 18, 2003);
In connection with the settlement, the Company was added as a
party to the following additional cases, which assert claims and
seek relief substantially similar to the above cases, styled:
(i) BORDONI v. CGU INSURANCE COMPANY OF ILLNOIS AND CCC
INFORMATION SERVICES INC., Case No. 01 L 157;
(ii) SCHOENLEBER v. PRUDENTIAL PROPERTY AND CASUALTY
INSURANCE COMPANY AND CCC INFORMATION SERVICES INC,
Case No. 01 L 99;
(iii) RICHARDSON v. PROGRESSIVE PREMIER INSURANCE COMPANY OF
ILLINOIS AND CCC INFORMATION SERVICES INC., Case No. 01
L 149,
(iv) KNACKSTEDT v. ECONOMY PREFERRED INSURANCE COMPANY,
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY
AND CCC INFORMATION SERVICES INC., Case No. 01 L 153;
(v) HUFF AND MADISON v. HARTFORD INSURANCE COMPANY OF
ILLINOIS, HARTFORD INSURANCE COMPANY OF THE MIDWEST AND
CCC INFORMATION SERVICES INC., Case No. 01 L 158;
(vi) JACKSON v. NATIONAL GENERAL INSURANCE COMPANY AND CCC
INFORMATION SERVICES INC., Case No. 02 L 628;
(vii) PARCHMENT v. TRAVELERS PROPERTY CASUALTY INSURANCE
COMPANY OF ILLINOIS, TRAVELERS PROPERTY CASUALTY
COMPANY, AND CCC INFORMATION SERVICES INC., Case No. 02
L 1135; and
(viii) CARTER, VANOVER AND URKE v. ALLSTATE INSURANCE COMPANY,
NATIONAL-BEN FRANKLIN INSURANCE COMPANY OF ILLINOIS AND
CCC INFORMATION SERVICES INC., Case No. 02 L 717
The proposed settlement class consists of all customers of the
settling carriers who had a total loss claim from January 28,
1989 to July 18, 2005, for which the Company provided a
valuation to the carrier. This settlement includes no admission
of liability or wrongdoing by the Company or its customers. Upon
final approval of the settlement, the above-described cases will
be dismissed and the Company will receive releases with respect
to the matters raised in the lawsuits. The Company, in turn,
has agreed to pay for all costs of settlement administration and
certain other costs associated with the settlement. The Company
estimates that these costs will total approximately $8.0
million.
The Company also has agreed to engage the services of an
independent third party as a Court-appointed monitor to
periodically review its Valuescope methodology for five years
following settlement and to oversee the performance of various
product validation studies. Other settlement costs, including
the payment of claims made by class members, will be paid by the
insurance companies that are participating in the settlement. On
July 18, 2005, the Court granted preliminary approval to the
settlement, and a final approval hearing is scheduled for
December 20, 2005.
CCC INFORMATION: GA Court Affirms Consumer Fraud Suits Dismissal
----------------------------------------------------------------
The State Court of Fulton County, Georgia affirmed the dismissal
of three class actions filed against CCC Information Services,
Inc., namely:
(1) McGOWAN v. PROGRESSIVE CASUALTY INS. CO., PROGRESSIVE
INS. CO., and CCC INFORMATION SERVICES INC., Case No.
00VS006525 (filed June 16, 2000);
(2) DASHER v. ATLANTA CASUALTY CO. and CCC INFORMATION
SERVICES INC., Case No. 00VS006315 (filed June 16,
2000);
(3) WALKER v. STATE FARM MUTUAL AUTOMOBILE INS. CO. and CCC
INFORMATION SERVICES INC., Case No. 00VS007964 (filed
August 2, 2000)
The Plaintiffs in these three cases, each of whom seeks to
represent a nationwide class of insureds against the Company and
the named insurance company defendant, allege that CCC's
Valuescope valuation service provides values that do not comply
with applicable state regulations governing total loss claims
settlements. Plaintiffs assert various common law and statutory
claims against the Company and the insurance company defendants,
including claims under the Georgia Racketeer Influenced and
Corrupt Organizations (RICO) statute. Plaintiffs seek
unspecified compensatory, treble and punitive damages,
attorneys' fees and expenses. Each Plaintiff's claims were
dismissed with prejudice by the trial court.
Each of these cases was pending before the Court of Appeals of
Georgia (Case Nos. A06A0726, A05A1077, and A05A1090,
respectively) following the trial court's dismissal of the cases
with prejudice. On July 15, 2005, the Court of Appeals affirmed
those dismissals and no further appeals have been filed to date.
CCC INFORMATION: CA Court Drops All Claims Except One in Lawsuit
----------------------------------------------------------------
CCC Information Services, Inc. reached a settlement for the
class action filed against it in the Superior Court of the State
of California, County of Los Angeles, styled "ROGAN v. FARMERS
INSURANCE GROUP, FARMERS INSURANCE EXCHANGE, and CCC INFORMATION
SERVICES INC., Case No. SC076462."
Plaintiff asserts various common law and statutory claims
against his insurance company and against the Company, including
a claim under California Business & Professions Code Section
17200, et seq. Plaintiff seeks recovery of unspecified damages,
an accounting, restitution and disgorgement, on his own behalf
and on behalf of the general public, punitive damages, and an
award of attorneys' fees.
At a hearing on January 29, 2004, the court sustained the
Company's demurrer to all claims against it except for the
Section 17200 claim, which the court stayed pending a separate
action to which the Company is not a party. The court also
granted a motion to compel an appraisal of Plaintiffs' claims.
COMMUNITY HEALTH: Faces Uninsured Patients' Lawsuit in AL Court
---------------------------------------------------------------
Community Health Systems, Inc. faces a class action filed in the
Circuit Court of Barbour County, Alabama, (Eufaula Division),
styled "Arleana Lawrence and Robert Hollins v Lakeview Community
Hospital and Community Health Systems, Inc."
This alleged class action was brought by the plaintiffs on
behalf of themselves and as the representatives of similarly
situated uninsured individuals who were treated at the Company's
Lakeview Hospital or any of the Company's other Alabama
hospitals. The plaintiffs allege that uninsured patients who do
not qualify for Medicaid, Medicare or charity care are charged
unreasonably high rates for services and materials and that we
use unconscionable methods to collect bills. The plaintiffs
seek restitution of overpayment, compensatory and other
allowable damages and injunctive relief.
COMMUNITY HEALTH: Faces Uninsured Patients' Lawsuit in PA Court
---------------------------------------------------------------
Community Health Systems, Inc. faces a class action filed in the
Court of Common Pleas, Montgomery County, Pennsylvania, styled
"James Monroe v Pottstown Memorial Hospital and Community Health
Systems, Inc."
This alleged class action was brought by the plaintiff on behalf
of himself and as the representative of similarly situated
uninsured individuals who were treated at the Company's
Pottstown Memorial Hospital or any of its other Pennsylvania
hospitals. The plaintiff alleges that uninsured patients who do
not qualify for Medicaid, Medicare or charity care are charged
unreasonably high rates for services and materials and that the
Company use unconscionable methods to collect bills. The
plaintiff seeks recovery under the Pennsylvania Unfair Trade
Practices and Consumer Protection Law, restitution of
overpayment, compensatory and other allowable damages and
injunctive relief.
COMMUNITY HEALTH: Faces Uninsured Patients' Lawsuit in IL Court
---------------------------------------------------------------
Community Health Systems, Inc. faces a class action filed in the
Circuit Court of Madison County, Illinois, styled "Chronister,
et al. vs. Granite City Illinois Hospital Company, LLC d/b/a
Gateway Regional Medical Center."
The complaint seeks class action status on behalf of the
uninsured patients treated at Gateway Regional Medical Center
and alleges statutory, common law, and consumer fraud in the
manner in which the hospital bills and collects for the services
rendered to uninsured patients. The plaintiff seeks
compensatory and punitive damages and declaratory and injunctive
relief.
COMMUNITY HEALTH: Faces Uninsured Patients Lawsuit in IL Court
--------------------------------------------------------------
Community Health Systems, Inc. faces a class action filed in the
Circuit Court of Williamson County, Illinois, styled "Sheri Rix
v. Heartland Regional Medical Center and Health Care Systems,
Inc."
This alleged class action was brought by the plaintiff on behalf
of herself and as the representative of similarly situated
uninsured individuals who were treated at the Company's
Heartland Regional Medical Center. The plaintiff alleges that
uninsured patients who do not qualify for Medicaid, Medicare or
charity care are charged unreasonably high rates for services
and materials and that the Company uses unconscionable methods
to collect bills. The plaintiff seeks recovery for breach of
contract and the covenant of good faith and fair dealing,
violation of the Illinois Consumer Fraud and Deceptive Practices
Act, restitution of overpayment, and for unjust enrichment. The
plaintiff class seeks compensatory and other damages and
equitable relief.
DT INDUSTRIES: SEC Obtains Final Judgment V. Michael Lesniewski
---------------------------------------------------------------
The Securities and Exchange Commission stated that on July 26,
Judge Richard E. Dorr of the U.S. District Court in the Western
District of Missouri entered a final judgment against Defendant
Michael Lesniewski, pursuant to his consent, for his role in a
financial fraud scheme perpetrated at DT Industries, Inc. (DTI).
At the time of the illegal conduct, DTI was headquartered in
Springfield, MO. The final judgment permanently enjoins Mr.
Lesniewski, of Erie, PA, from violating the anti-fraud
provisions, among others, of the federal securities laws. The
final judgment also orders Mr. Lesniewski to pay $26,700 in
disgorgement and $5,678 in prejudgment interest and a $25,000
civil penalty.
The Commission's complaint alleged that Mr. Lesniewski, the
controller and general manager at DTI subsidiary Assembly
Machines, Inc. (AMI), manipulated AMI's books and records,
enabling AMI to reach projected earnings targets based on
guidelines established by DTI management. Specifically, the
Commission's complaint alleges that Mr. Lesniewski understated
AMI's costs of sales by failing to recognize all of AMI's actual
costs for certain projects. By not recognizing the actual costs
for these projects, Mr. Lesniewski artificially increased AMI's
profit margin. The incorrect profit margins were then
consolidated into DTI's financial statements. According to the
Commission's complaint, as a result of AMI's misstatements, in
August 2002 DTI restated its financial statements for fiscal
years 1999 through the first three quarters of 2002. The
Commission's complaint alleges that Mr. Lesniewski's fraud
caused DTI to understate its net losses by 1% to 29% in its
annual reports for fiscal years 1999, 2000 and 2001 and its
first three quarterly reports for 2002. The action is styled,
SEC v. Richard Rambahal, et al., Case Number 04-3086-cv-RED,
U.S.D.C. W.D. MO., filed March 4, 2004 (LR-19316; AAER-2284).
E-TAILERS: FTC Conducts Survey on Compliance For CAN-SPAM Act
-------------------------------------------------------------
In a survey to test whether top e-tailers are allowing consumers
to opt out of receiving promotional or marketing messages, the
Federal Trade Commission (FTC) has determined that 89 percent of
the online merchants it tested are honoring requests to halt
future mailings.
The CAN-SPAM Act, which became effective January 1, 2004,
requires that senders of commercial e-mail provide recipients
with a clear and conspicuous notice that they have the right to
opt out of receiving future marketing messages, provide a
mechanism to allow them to exercise that right, and honor
requests to be removed from future mailings.
To assess whether e-tailers were complying with the opt-out
provisions of the CAN-SPAM Act, FTC staff developed a list of
100 top e-tailers - those who make significant use of the
Internet to market their goods or services - and visited their
sites. Most of the sites solicited consumers to sign up for
special offers, promotions, updates and newsletters via e-mail.
FTC staff created three new e-mail accounts and opted in to
receive the offers and promotions once for each of the three e-
mail accounts and monitored the accounts for six weeks. Then
staff notified the e-tailers they wished to stop receiving
commercial e-mail messages.
The study showed a high rate of compliance with the CAN-SPAM
opt-out provisions. All of the e-tailers who sent e-mail to the
FTC accounts provided clear notice of recipients' right to opt
out of receiving future mail and provided recipients with an
opt-out mechanism. Eighty nine percent of the e-tailers honored
all three of the opt-out requests made by FTC staff and 93
percent complied with opt-out requests for at least some
accounts.
Copies of the report are available from the FTC's Web site at
http://www.ftc.govand also from the FTC's Consumer Response
Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580. The FTC works for the consumer to prevent
fraudulent, deceptive, and unfair business practices in the
marketplace and to provide information to help consumers spot,
stop, and avoid them. To file a complaint in English or Spanish
(bilingual counselors are available to take complaints), or to
get free information on any of 150 consumer topics, call toll-
free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form
at http://www.ftc.gov.The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of
civil and criminal law enforcement agencies in the U.S. and
abroad. For more details, contact Claudia Bourne Farrell,
Office of Public Affairs by Phone: 202-326-2181 or contact
Colleen Robbins, Bureau of Consumer Protection by Phone:
202-326-2548 or Catherine Harrington-McBride, Bureau of Consumer
Protection by Phone: 202-326-2452 or visit the Website:
http://www.ftc.gov/opa/2005/08/optout.htm.
EXPRESS SCRIPTS: Securities Fraud Suits Transferred to E.D. MO
--------------------------------------------------------------
The Judicial Panel on Multi-District Litigation transferred a
number of securities class actions filed against Express
Scripts, Inc. to the United States District Court for the
Eastern District of Missouri for coordinated or consolidated
pretrial proceedings. The suits are styled:
(1) Minshew v. Express Scripts, (Cause No. Civ.4:02-CV-
1503, United States District Court for the Eastern
District of Missouri);
(2) Lynch v. National Prescription Administrators, et al.
(Cause No. 03 CV 1303, United States District Court for
the Southern District of New York);
(3) Mixon v. Express Scripts, Inc., (Civil Action No.
4:03CV1519, United States District Court for the
Eastern District of Missouri);
(4) Wagner et al. v. Express Scripts (Cause No. 04cv01018
(WHP) United States District Court for the Southern
District of New York);
(5) Scheuerman, et al v. Express Scripts, (Cause No. 04-CV-
0626 (FIS) (RFT)) United States District Court for the
Southern District of New York);
(6) Correction Officers' Benevolent Association of the City
of New York, et al v. Express Scripts, Inc. (Cause No.
04-Civ-7098 (WHP)), United States District Court for
the Southern District of New York);
(7) United Food and Commercial Workers Unions and Employers
Midwest Health Benefits Fund, et al v. National
Prescription Administrators, Inc., et al. (Cause No.
04-CV-7472, United States District Court for the
Southern District of New York);
(8) Central Laborers' Welfare Fund, et al v. Express
Scripts, Inc., et al (Cause No. B04-1002240, United
States District Court for the Southern District of
Illinois)
All of these suits allege violations of federal securities law.
The complaints allege that the Company failed to disclose
certain alleged improper business practices and issued false and
misleading financial statements. The complaints allege that they
are brought on behalf of purchasers of Company stock during the
period October 29, 2003 to August 3, 2004. The complaints
request unspecified compensatory damages, equitable relief and
attorney's fees. Three of these cases have been consolidated,
an earlier Class Action Reporter story (March 17,2005) states.
EXPRESS SCRIPTS: NJ Court Nixes Certification For Consumer Suit
---------------------------------------------------------------
The Superior Court of New Jersey for the County of Camden, Law
Division refused to grant class certification for the lawsuit
filed against Express Scripts, Inc., styled "International
Association of Firefighters, Local No. 22, et al. v. National
Prescription Administrators and Express Scripts, Inc. Cause No.
L03216-02."
The suit alleges that the Company's subsidiary, National
Prescription Administrators (NPA), had breached agreements with
two benefit plans to whom NPA had provided services under an
umbrella agreement with a labor coalition client. The Company
was also named as a defendant under a theory of de facto merger.
The plaintiffs purport to bring the action on behalf of a class
of similarly situated plans. The lawsuit alleges that NPA had
not paid the plans the rebates to which they were entitled under
the agreement. Claims for unspecified money damages are asserted
under the New Jersey Consumer Fraud Act (the CFA), and for
breach of contract and unjust enrichment.
The Company filed answers denying liability. On July 23, 2004,
summary judgment was granted in favor of NPA and ESI on the
customer fraud counts. Plaintiff filed a motion to certify a
class of all members of the labor coalition, approximately 80
plans. The Company filed a response opposing the motion.
EXPRESS SCRIPTS: CA Court Dismisses Lawsuit For Consumer Fraud
--------------------------------------------------------------
The Superior Court for the State of California, Los Angeles
County granted Express Script, Inc.'s motion to dismiss the
class action filed against it and other companies, styled
"Anthony Bradley, et al v. First Health Services Corporation, et
al., case no. BC319292."
On July 30, 2004, plaintiffs filed a complaint as a putative
class action, alleging rights to sue as a private attorney
general under California law. The complaint alleges that the
Company, and the other defendants, failed to comply with
statutory obligations under California Civil Code Section 2527
to provide its California clients with the results of a bi-
annual survey of retail drug prices. Plaintiffs request
injunctive relief, unspecified monetary damages and attorneys
fees.
EXPRESS SCRIPTS: CA Court Grants Summary Judgment For Fraud Suit
----------------------------------------------------------------
The Superior Court of the State of California for Alameda County
granted Express Scripts, Inc.'s motion for summary judgment in
the class action filed against it, styled "Irwin v. AdvancePCS,
et al., Cause No. RG030886393."
This case purports to be a class action against the Company and
other pharmacy benefit manager (PBM) defendants on behalf of
self-funded, non-Employee Retirement Income Security Act (ERISA)
health plans; and individuals with no prescription drug benefits
that have purchased drugs at retail rates. The complaint
alleges that certain business practices engaged in by the
Company and by other PBM defendants violated California's Unfair
Competition Law.
The Court granted the Company's motion for judgment on the
pleadings in its favor but allowed plaintiffs to file an amended
complaint.
EXPRESS SCRIPTS: Faces Brach of Fiduciary Duty Suit in E.D. MO
--------------------------------------------------------------
Express Scripts, Inc. faces a class action filed in the United
States District Court for the Eastern District of Missouri,
styled "Local 153 Health Fund, et al. v. Express Scripts Inc.
and ESI Mail Pharmacy Service, Inc., case no. B05-1004036."
The suit, filed on May 27, 2005, alleges that certain of the
Company's business practices constitute a breach of fiduciary
duty, breach of contract, deceptive trade practices, conversion,
breach of the covenant of good faith and fair dealing, and
violations of New York state law. The complaint purports to be
a class action on behalf of current and former self-funded
Employee Retirement Income Security Act (ERISA) and non-ERISA
plans.
The suit is styled "Local 153 Health Fund v. Express Scripts,
Inc. et al, case no. 4:05-cv-00862-SNL," filed in the United
States District Court for the Eastern District of Missouri,
under Judge Stephen N. Limbaugh. Representing the Company are
Richard D. Batchelder and Brien T. O'Connor of ROPES AND GRAY
LLP, One International Place, Boston, MA 02110-2624, Phone:
617-951-7515, Fax: 617-951-7050, E-mail:
richard.batchelder@ropesgray.com or brien.oconnor@ropesgray.com.
Representing the plaintiffs are Evan D. Buxner of WALTHER GLENN
LAW ASSOCIATES, Ten S. Brentwood Boulevard, Suite 102, St.
Louis, MO 63117-1322, Phone: 314-725-9595, Fax: 314-725-9597, E-
mail: buxner@walther-glenn.com; or Mark L. Knutson, Jeffrey R.
Krinsk or Amy J. Lepine, FINKELSTEIN AND KRINSK, LLP, 501 W.
Broadway, Suite 1250, San Diego, CA 92101, Phone: 619-238-1333,
Fax: 619-238-5425, E-mail: fk@classactionlaw.com or
ajl@classactionlaw.com.
FINISAR CORPORATION: Final Fairness Hearing Set January 2006
------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated
securities class action filed against Finisar Corporation is set
for January 9,2006 in the United States District Court for the
Southern District of New York. The suit also names as
defendants:
(1) Jerry S. Rawls, President and Chief Executive Officer,
(2) Frank H. Levinson, Chairman of the Board and Chief
Technical Officer,
(3) Stephen K. Workman, Senior Vice President and Chief
Financial Officer, and
(4) an investment banking firm that served as an
underwriter for the Company's initial public offering
in November 1999 and a secondary offering in April
2000.
The suit was filed on behalf of all persons who purchased the
Company's common stock from November 17, 1999 through December
6, 2000. The complaint, as subsequently amended, alleges
violations of Sections 11 and 15 of the Securities Act of 1933
and Sections 10(b) and 20(b) of the Securities Exchange Act of
1934, on the grounds that the prospectuses incorporated in the
registration statements for the offerings failed to disclose,
among other things, that the underwriter had solicited and
received excessive and undisclosed commissions from certain
investors in exchange for which the underwriter allocated to
those investors material portions of the shares of the Company's
stock sold in the offerings and the underwriter had entered into
agreements with customers whereby the underwriter agreed to
allocate shares of the Company's stock sold in the offerings to
those customers in exchange for which the customers agreed to
purchase additional shares of the Company's stock in the
aftermarket at pre-determined prices. No specific damages are
claimed.
Similar allegations have been made in lawsuits relating to more
than 300 other initial public offerings conducted in 1999 and
2000, which were consolidated for pretrial purposes. In October
2002, all claims against the individual defendants were
dismissed without prejudice. On February 19, 2003, the Court
denied the Company's motion to dismiss the complaint.
In July 2004, the Company and the individual defendants accepted
a settlement proposal made to all of the issuer defendants.
Under the terms of the settlement, the plaintiffs will dismiss
and release all claims against participating defendants in
exchange for a contingent payment guaranty by the insurance
companies collectively responsible for insuring the issuers in
all the related cases, and the assignment or surrender to the
plaintiffs of certain claims the issuer defendants may have
against the underwriters. Under the guaranty, the insurers will
be required to pay the amount, if any, by which $1 billion
exceeds the aggregate amount ultimately collected by the
plaintiffs from the underwriter defendants in all the cases. If
the plaintiffs fail to recover $1 billion and payment is
required under the guaranty, the Company would be responsible to
pay its pro rata portion of the shortfall, up to the amount of
the self-insured retention under its insurance policy, which may
be up to $2 million. The timing and amount of payments that the
Company could be required to make under the proposed settlement
will depend on several factors, principally the timing and
amount of any payment by the insurers pursuant to the $1 billion
guaranty. The settlement is subject to final approval of the
Court, which cannot be assured.
On February 15, 2005, the Court issued an order providing
preliminary approval of the proposed settlement except insofar
as the settlement would have cut off contractual indemnification
claims that underwriters may have against securities issuers,
such as the Company. On April 13, 2005, the Court held a
further conference to determine the final form, substance and
program of class notice and set a hearing for January 9, 2006 to
consider final approval of the settlement.
JETBLUE AIRWAYS: Privacy Suit Dismissed, No Damages to be Paid
--------------------------------------------------------------
In dismissing a class action lawsuit, U.S. District Court Judge
Carol Bagley Amon in New York City ruled that JetBlue Airways
Corporation violated customers' privacy by turning over
passenger lists to the government, but the affected people are
not entitled to damages, The Associated Press reports.
The federal judge found that JetBlue had violated its agreement
not to share passenger data by sharing the information at the
behest of the Transportation Security Administration. However,
Judge Amon added that the passengers could not prove damage.
Additionally, in an order signed recently, Judge Amon also
rejected a claim that JetBlue unjustly enriched itself.
Court records revealed that New York-based JetBlue gave the
information to Torch Concepts of Huntsville, Alabama, a
Department of Defense subcontractor and a co-defendant in the
suit along with Little Rock-based data broker Acxiom Corporation
and SRS Technologies of Newport Beach, California, the main DOD
contractor in the case.
The plaintiffs sued after learning that in July 2002, the TSA,
sent JetBlue a written request asking that it supply passenger
data for a database being compiled by Department of Defense
contractors.
As previously reported in the September 25, 2003 edition of the
Class Action Reporter, the suit alleges that the Company sold
demographic data in October 2002 to Torch Concepts on about 40%
of the passengers JetBlue had provided information on, including
whether the passenger was a home owner or renter, years at the
residence, income, number of children, Social Security numbers,
occupation and vehicle information.
MARSH & MCLENNAN: Firm Added as a Defendant in Axis Capital Suit
----------------------------------------------------------------
Marsh & McLennan Cos. (MMC) stated in a regulatory filing with
the Securities and Exchange Commission that it was named as an
additional defendant in a purported securities class action
lawsuit filed against Axis Capital Holdings Ltd. (AXS), The
MarketWatch.com reports.
According to the filing, Marsh & McLennan was "served with
process" in the lawsuit on June 6. The filing revealed that
Marsh & McLennan unit MMC Capital Inc. formed Axis Capital
Holdings to develop an additional source of insurance and
reinsurance capacity after the September 11, 2001 terrorist
attacks. MMC Capital is a private equity firm that manages
investments and committed capital of more than $2 billion.
Marsh & McLennan stated in its filing that the lawsuit, which
was filed May 13, is on behalf of all persons and entities that
purchased or acquired Axis Capital's publicly traded common
stock from August 6, 2003, to October 14, 2004.
In addition, MMC's filing also stated that the suit alleges
violations of federal securities laws in connection with the
defendants' alleged failure to disclose alleged improper
business practices concerning incentive commission payments by
Axis, among others, and Marsh Inc., another Marsh & McLennan
unit. It also alleges that various entities and partnerships
managed by or associated with MMC Capital sold Axis Capital
common stock to members of the purported class knowing of the
alleged inflated valuation of such stock, according to MMC's
filing.
MCCLATCHY CO.: Employment Agencies File MN Price Inflation Suit
---------------------------------------------------------------
Four local employment agencies in Minneapolis, Minnesota filed a
class action against McClatchy Co., alleging misstatements in
the Audit Bureau of Circulations (ABC) reported circulation
volumes by the Company's "Star Tribune" newspaper from 1999
through the present.
The agencies that advertise in the Star Tribune filed the suit,
alleging that the newspaper overstated its paid circulation
rates, resulting in fraudulently inflated prices. The Amended
Complaint exposes the Star Tribune's practice of requiring
distributors and agents to order surplus papers; it asserts that
the Star Tribune required distributors to attest that their
return rates - a measure of unsold papers - were not more than
18-19% when, in fact, they were much greater. The suit alleges
that the newspaper inflated its paid circulation rates,
resulting in higher, unjustified advertising rates and seeks
reimbursement for the overpayments during the past 6 years.
The suit is styled "Masterson Personnel, Inc., et al. v. The
McClatchy Company and The Star Tribune Company, case no. 0:05-
CV-1274, filed in the United States District Court for the
District of Minnesota, under Judge Richard H. Kyle.
Representing the plaintiffs are:
(1) Clayton D. Halunen, Joni N. Thome, Halunen &
Associates, 220 South 6th Street Ste 2000, Minneapolis,
MN 55402 U.S.A, Phone: (612) 605-4098, Fax: (612) 605-
4099, E-mail: halunen@youhaverights.info or
thome@youhaverights.info
(2) Boris Parker, Floyd Earl Siefferman, Jr. of Saliterman
& Siefferman, PC, 220 S 6th St Ste 2000, Mpls, MN
55402, Phone: (612) 339-1400, E-mail:
bparker@saliterman-law.com
(3) Anne T. Regan, J. Gordon Rudd,Jr., Zimmerman Reed, 651
Nicollet Mall Ste 501, Mpls, MN 55402-4123, Phone: 612-
341-0400, Fax: 612-341-0844, E-mail: atr@zimmreed.com
or jgr@zimmreed.com
Representing the Company are Michael F. Cockson, Lianne Knych,
Faegre & Benson LLP - Mpls, 90 S 7th St Ste 2200, Mpls, MN
55402-3901, Phone: 612-766-7000, Fax: 6127661600, E-mail:
mcockson@faegre.com or lknych@faegre.com.
MITSUBISHI MOTORS: Recalls 1,179 Lancer Vehicles For Fire Hazard
----------------------------------------------------------------
Mitsubishi Motors North America, Inc. in cooperation with the
National Highway Traffic Safety Administration's Office of
Defects Investigation (ODI) is voluntarily recalling about 1,179
units of 2005 Mitsubishi / Lancer Evolution passenger vehicles
due to fire hazard. NHTSA CAMPAIGN ID Number: 05V335000.
According to the ODI, on certain vehicles, the turbo charger
coolant was incorrectly manufactured, and may allow coolant
leakage. If a leak occurs, during vehicle operation when the
manifold is hot, coolant may ignite and cause a vehicle fire.
As a remedy, dealers will replace the turbo charger coolant
hose.
For more details, contact Mitsubishi, Phone: 888-648-7820 OR the
NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web
site: http://www.safecar.gov.
NEW YORK: Middletown District Might Join Suit Over School Aid
-------------------------------------------------------------
The Middletown School District is poised to join a class action
lawsuit being brought by 16 small city school districts against
the state of New York for more funding, which could result in
additional aid of between $15 million and $42 million per year
for Middletown, depending on how a formula is calculated, The
Times Herald-Record reports.
The suit claims that the current formula does not factor in
demographics or wealth and is shortchanging small city
districts, violating the state constitution, which says all
children must get a sound education.
Middletown Superintendent Ken Eastwood told The Times Herald-
Record that the reasons for the shortfall are many, as are
methods of calculating state aid formulas. However, he pointed
out that the results are clear: "Regardless of which study you
look at, Middletown is not receiving its fair share."
According to the Association of Small City School Districts,
which is organizing the suit, small cities are innately more
diverse, poorer and with more people whose native language is
not English. These factors have been proven to require more
intervention. But with wealthier, less diverse suburban
communities receiving the same amount of state aid, small cities
are falling behind, the association says, and the local taxpayer
is footing the bill.
Back in June 2003, New York City won a lawsuit against the state
for more education funding after a decade in the courts. The
state Court of Appeals gave the Legislature and the governor a
year to solve the problem, but no action was taken, according to
Robert Biggerstaff, lawyer for the class action suit.
Mr. Biggerstaff told The Times Herald-Record, "The Court of
Appeals in 2003 said that every child must, under the
constitution, get a sound education." He adds, "In July 2004,
when the Legislature failed to pass reform for education finance
for the whole state, it was decided that state aid reform wasn't
going to happen without judicial intervention."
Cities taking part in the suit include Beacon, Albany and
Poughkeepsie, which just joined. Mr. Eastwood told The Times
Herald-Record that Middletown is likely to opt in. With four
lawsuits pending against the district from past and current
employees, the estimated $5,000 per year that participation in
the class action suit would cost the district is a drop in the
bucket of its annual legal fees.
Last week, the Middletown School District heard a presentation
on the suit. "This is unusual," commented board member William
Geiger, "to have Middletown being asked to be a plaintiff rather
than a defendant in the lawsuit."
NEW YORK: Verdict Issued Against Kickback Scheme Defendants
-----------------------------------------------------------
A jury in Brooklyn, New York, found that defendants Michael V.
Lipkin and Joshua Shainberg, both associated with the broker-
dealer Securities Planners, Inc., violated the antifraud
provisions of the federal securities laws for receiving
undisclosed stock kickbacks, and that Mr. Lipkin also violated
the antifraud provisions by making material misrepresentations
to brokerage customers. The jury reached its verdict after a
two-week trial in the United States District Court for the
Eastern District of New York before Magistrate Judge Viktor V.
Pohorelsky. The jury found the third defendant, Robert Shatles
(Shatles), not liable on a similar charge of receiving
undisclosed kickback payments. Mr. Shatles was associated with
another broker-dealer named S.D. Cohn.
The Securities and Exchange Commission's Amended Complaint,
dated Nov. 15, 2002, charged that all three defendants violated
Section 17(a) of the Securities Act of 1933, Section 10(b) of
the Securities Exchange Act of 1934, and Rule 10b-5, in
connection with their receipt of undisclosed kickbacks, and that
Mr. Lipkin violated the antifraud provisions by making material
false representations to brokerage customers.
The evidence at trial demonstrated that Mr. Shainberg and Mr.
Lipkin were branch office principals of Securities Planners,
which is now defunct. The jury found that both Mr. Shainberg
and Mr. Lipkin received undisclosed shares of stock issued by a
company called Alter Sales (subsequently known as ICIS
Management Group) in return for recommending that stock to
customers of Securities Planners. The evidence at trial
demonstrated that those undisclosed kickback shares were sold
from accounts for Mr. Shainberg's and Mr. Lipkin's benefit, and
the proceeds from those accounts were sent to a bank account in
the Bahamas. Ultimately, those proceeds were returned to the
United States to persons and entities associated with Mr.
Shainberg and Mr. Lipkin. The jury also found Mr. Lipkin liable
for participating in a scheme to defraud investors who purchased
Alter Sales securities. The jury found that Mr. Lipkin
(1) knew or recklessly disregarded that Alter Sales
securities were not a sound investment,
(2) knew that brokers under his supervision were making
false and misleading statements to their customers to
the effect that Alter Sales securities were a good or
sound investment, and
(3) participated in making those false statements to
customers.
The Court will determine at a later date the appropriate relief
and sanctions against Mr. Lipkin and Mr. Shainberg. The
Commission is seeking orders imposing permanent injunctions,
disgorgement plus prejudgment interest, civil monetary
penalties, and such other relief as the Court deems appropriate
against Mr. Lipkin and Mr. Shainberg. The action is styled, SEC
v. Lipkin, et al., Civil Action No. 99-7357 (LR-19317).
ONLINE FIRMS: FTC Files Deceptive Trade Suit V. 2 Online Firms
--------------------------------------------------------------
Two individuals and two corporations, who allegedly took in over
$5 million from consumers, are charged by the Federal Trade
Commission (FTC) with using deceptive marketing tactics when
selling their at-home certification programs for bartenders and
mystery shoppers.
The FTC alleges the defendants promised jobs as bartenders and
mystery shoppers, but delivered only useless certification
programs and general information on potential employers.
According to the FTC, the defendants' business activities not
only violated federal law, but also the terms of an October 2001
court order entered against the two individual defendants in an
earlier Commission case. One defendant has agreed to a lifetime
ban from telemarketing to settle the FTC's charges.
The FTC alleges that Stevan P. Todorovic and Michael G. Harvey,
and two corporations that Mr. Todorovic controls - American
Bartending Institute, Inc. and Intuitive Logic, Inc., based in
Santa Barbara, California - misrepresented the products they
were selling, charged consumers without authorization, and did
not fully disclose their refund conditions and shipping and
handling fees. All of these activities were barred by a prior
court order resolving a 2000 FTC complaint. The FTC also charges
that the defendants' new business practices violated the
Telemarketing Sales Rule (TSR).
According to the FTC, the defendants placed ads in the help
wanted sections of local newspapers saying, "BARTENDER TRAINEES
NEEDED," and "MYSTERY SHOPPERS NEEDED!" When job-seekers called
the listed numbers, the defendants' telemarketers pitched at-
home "certification" courses for bartenders and mystery shoppers
that cost between $58.90 and $98.90. The defendants led
consumers to believe that they would provide a valuable
"certification" that was necessary before consumers would be
eligible for available jobs. The defendants promised specific
earnings, job placement assistance, and a 30-day trial period,
during which customers could request and receive a refund. Yet
consumers who agreed to purchase the bartending or mystery
shopping programs received only an information booklet and an
open-book certification test. Upon being "certified" by the
defendants, consumers expected to be placed in jobs as mystery
shoppers or bartenders. Instead, the defendants provided lists
of potential employers who had not heard of the certification,
were not affiliated with the defendants' program, and often were
not hiring.
Based on these allegations, the FTC has filed both a new
complaint against the defendants as well as a civil contempt
action alleging violations of the prior district court order. In
the contempt action, the FTC alleges that the defendants
violated the 2001 federal court order by:
(1) Misrepresenting the products they were selling,
including a meaningless "certification" program and
alleged "job listings";
(2) Billing consumers without authorization or in amounts
greater than authorized; and
(3) Failing to disclose prior to a consumer's purchase all
of their refund conditions, or the amount of their
shipping and handling fees.
The Commission's complaint includes the above allegations and
also charges that the defendants violated the FTC Act by making
false earnings claims about their mystery shopping program and
violated the TSR by "upselling" third-party products to
consumers after the telemarketing sales pitch ended, without
identifying who was doing the selling or that the purpose of the
conversation was to make a sale. According to the FTC, the
defendants would also charge "upsell" products to the credit
card account a consumer gave for the previously purchased
product without getting the consumer's express consent for the
additional charge.
Defendant Michael G. Harvey, who is named in the new complaint
and in the contempt proceeding, has agreed to settle the charges
against him. The settlement imposes a lifetime ban on any future
telemarketing, and provides other restrictions to address the
deceptive practices challenged here and in the earlier
Commission case. If Harvey is found to have lied about his
financial condition, he would be responsible for $13.2 million
in consumer redress - the alleged combined injury from the two
cases.
The FTC brought its 2000 complaint against Mr. Todorovic,
Harvey, and Nationwide Information Service, Inc. The FTC alleged
in that case that the defendants had misrepresented their
auction information guides by promising specific information
about auction dates and times and the items that would be
available, but instead providing consumers only general
information that could be found elsewhere for free. The 2000
complaint also alleged that the defendants had engaged in
unauthorized billing and did not fully disclose the terms and
conditions of their refund policy. The October 2001 court order
settling the FTC charges barred the defendants from
misrepresenting their products, from billing consumers without
authorization, and from failing to fully explain any refund
policies prior to billing consumers. Defendants also paid
$535,000 in consumer redress.
The FTC received invaluable assistance in this matter from the
Better Business Bureau (BBB) of the Tri-Counties, the BBB of the
Southland, and the Santa Barbara police department.
The FTC has issued a new consumer alert, "The Secrets of Mystery
Shopping Revealed," warning consumers that "marketers who
promise lucrative jobs as mystery shoppers often do not deliver
bona fide opportunities." The alert is on the FTC's Web site at
http://www.ftc.gov/bcp/conline/pubs/alerts/mysteryalrt.htm.It
notes that becoming a mystery shopper for a legitimate company
does not cost anything, and describes where real job
opportunities can be found. The FTC says consumers should be
skeptical when considering mystery shopper promoters who
advertise in the "help wanted" section of newspapers; sell
"certification"; guarantee a job as a mystery shopper; charge a
fee for access to job opportunities; or sell directories of
companies that provide mystery shoppers.
The Commission vote to issue the complaint and to initiate civil
contempt proceedings against all defendants, and to accept the
consent in settlement of the court actions for one defendant,
was 4-0. The complaint and contempt action were filed on July
20, 2005, in the U.S. District Court for the Central District of
California, Western Division, in Los Angeles. The FTC's
litigation against Mr. Todorovic and his corporations continues.
Copies of the consumer alert, complaint, contempt order, and
proposed stipulated order for permanent injunction and final
judgment are available from the FTC's Web site at
http://www.ftc.govand also from the FTC's Consumer Response
Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580. The FTC works for the consumer to prevent
fraudulent, deceptive, and unfair business practices in the
marketplace and to provide information to help consumers spot,
stop, and avoid them. To file a complaint in English or Spanish
(bilingual counselors are available to take complaints), or to
get free information on any of 150 consumer topics, call toll-
free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form
at http://www.ftc.gov.The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of
civil and criminal law enforcement agencies in the U.S. and
abroad. For more details, contact Jackie Dizdul, Office of
Public Affairs by Phone: 202-326-2472 or contact C. Steven Baker
or Todd Kossow, FTC's Midwest Region by Phone: 312-960-5634 or
visit the Website: http://www.ftc.gov/opa/2005/08/abi.htm.
PALM INC.: Faces Third Amended Consumer Fraud Suit in IL Court
--------------------------------------------------------------
Palm, Inc. continues to face a third amended consumer class
action filed in Illinois Circuit Court, Cook County, styled
"Goldstein v. Palm."
The case alleges consumer fraud regarding the Company's
representations that its m100, III, V, and VII handheld personal
digital assistants, as sold, would provide wireless access to
the Internet and email accounts, and would perform common
business functions including data base management, custom form
creation and viewing Microsoft Word and Excel documents, among
other tasks. The case seeks unspecified actual damages and
indemnification of certain costs.
Following two successful motions to dismiss filed by the
Company, Plaintiff filed a third amended complaint which the
Company answered. The case is in the preliminary stages.
PERRIGO COMPANY: Recalls Infants' Oral Drops For Improper Dosing
----------------------------------------------------------------
Perrigo Company has initiated a voluntary nationwide recall of
all lots of concentrated infants' oral drops that are packaged
with a dosing syringe bearing only a "1.6 mL" mark containing
acetaminophen; acetaminophen, dextromethorphan HBr, and
pseudoephedrine HCl; or dextromethorphan HBr, and
pseudoephedrine HCl, the U.S. Food and Drug Administration (FDA)
announced in a statement.
The dosing syringe may be confusing in determining the proper
dose for infants under 2 years of age as directed by a doctor
and could lead to improper dosing, including overdosing. The
following products are being recalled to the retail level:
(1) Cherry Flavor Infant Pain Reliever 160 mg Acetaminophen
(0.5oz. and 1.0oz)
(2) Grape Flavor Infant Pain Reliever 160 mg Acetaminophen
(0.5oz. and 1.0oz)
(3) Cherry Flavor Cough and Cold Infant Drops (0.5oz)
(4) Cherry Flavor Decongestant and Cough Infant Drops
(0.5oz)
The directions on the bottle and carton labeling for infants
ages 2-3 years and weighing 24-35 pounds allow safe and
effective dosing for this age and weight group. However, these
products are also intended for use by children younger than 2
years and weighing less than 24 pounds. The labeling directs
consumers to ask a doctor for dosing directions for this age and
weight group.
The oral dosing syringe enclosed with these products is not
marked so as to accurately measure doses less than 1.6 mL when
prescribed by physicians for infants younger than 2 years and
weighing less than 24 pounds. Until recently these products were
provided with a dropper, not the oral dosing syringe, and the
dropper had two markings on it ("0.4 mL" and "0.8 mL"). The
single mark on the current syringe along with the changeover
from the dropper to this syringe has caused some confusion among
consumers and health-care professionals and may lead to improper
dosing. Taking more than the recommended dose (overdose) of
acetaminophen may cause liver damage. Consumers who have
questions should discuss this with their doctor to accurately
determine proper dosage.
In using an alternative over-the-counter product, parents and
doctors should thoroughly discuss the specifics about the
product and the dosing device, particularly the labeling and
marking, so that the proper dose can be measured and
administered correctly.
The confusion of the dosing syringe was noted after a physician
filed a complaint with the American Academy of Pediatrics.
The recalled products were sold nationally at retail chains
under the following store-brand labels: American Fare, Best
Choice, Brooks, Berkley & Jensen, CVS, Dollar General, Eckerd,
Equaline, Equate, Family Dollar, Food Lion, Good Neighbor,
GoodSense, Healthy Generations, Health Pride, Hy-Vee, Kroger,
Leader, Longs, Major, Medicine Shoppe, Meijer, Parklane, Publix,
Rite Aid, Safeway, Shop Rite, Sunmark, Target, Today's Health,
Top Care, Walgreen, Western Family, and Winn Dixie.
Perrigo is cooperating with the FDA in this recall and in the
effort to alert consumers and retailers about this issue.
Questions or concerns about a product described in this recall
should be directed to Perrigo's Consumer Affairs Department,
toll free, at 800-321-0105. Any adverse reactions experienced
with the use of these products should also be reported to the
FDA's MedWatch Program by phone at 1-800-FDA-1088, by fax at
1-800-FDA-1078, by mail at MedWatch, HF-410, FDA, 5600 Fishers
Lane , Rockville , MD 20852-9787, or on MedWatch's Website:
https://www.accessdata.fda.gov/scripts/medwatch/.
REINKE MANUFACTURING: Recalls 548 Trailers For Collision Hazard
---------------------------------------------------------------
Reinke Manufacturing Company, Inc. in cooperation with the
National Highway Traffic Safety Administration's Office of
Defects Investigation (ODI) is voluntarily recalling about 548
units of 2003-05 Reinke Trailers due to collision hazard. NHTSA
CAMPAIGN ID Number: 05V332000.
According to the ODI, on certain combination steel/aluminum
flatbed, dropdeck and aluminum flatbed trailers equipped with
mounted toolboxes, each toolbox is attached to the trailer with
a mounting system that includes two aluminum brackets, which may
have developed fatigue cracks along the bend radius lines. Small
cracks may further develop based on trailer usage. The bracket
may break causing the toolbox to separate from the trailer. If
the toolbox separates from the trailer while the trailer is in
motion, vehicles on the road are at risk of collision with the
toolbox and its contents.
As a remedy, owners will need to find a certified welder to have
the remedy performed. Reinke is providing the Aluminum gussets
along with detailed instructions for the welder. If owners are
not able to locate a certified welder, Reinke will perform the
service.
For more details, contact Reinke, Phone: 1-877-762-1001 OR the
NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web
site: http://www.safecar.gov.
SOUTH KOREA: Class Action Legislation Filed to Combat Data Leaks
----------------------------------------------------------------
Rep. Roh Hoe-chan of the progressive opposition Democratic Labor
Party in South Korea is looking to submit a bill, which
introduces a class action suit system against companies
responsible for leaking personal information, to the Assembly
this year, The Korea Times reports.
The proposed bill is aimed at protecting private information
held by companies. The 48-year-old lawmaker told The Korea
Times, "Leakage of personal data is possibly perilous but
victims cannot bring the case to the court, intimidated by the
big cost of complex and time-consuming litigation. That is why
we need the class action system for this case."
Rep. Roh predicts that should the country's unicameral
parliament pass the bill, which stipulates detailed regulations
on how to file a suit and progress to a trial, it will go into
effect after a six-month grace period, possibly early next year.
He also added, "The class action suit will serve as a deterrent
for companies ready to sell or abuse personal data for
commercial purposes. It will play a pivotal role in preventing
damages from personal data leakages."
However, Rep. Roh's attempt is likely to meet stiff opposition
from corporations that have been trying to make money with
personal information through such methods as an individual
database.
Personal data leakages recently emerged as a social problem of
late in tandem with an increasing number of unlawful private
data releases and mushrooming sophisticated financial frauds
such as "phishing." "Phishing" refers to the illegal luring of
sensitive private data by pretending to be someone trustworthy
with a real need for such information.
US UNWIRED: Asks LA Court To Dismiss Securities Fraud Lawsuit
-------------------------------------------------------------
Plaintiffs in the securities class action and shareholder
derivative suits filed against US Unwired, Inc. intend to file
an amended consolidated lawsuit in the United States District
Court for the Eastern District of Louisiana.
Clodile Romero, Jr. filed the federal securities class action on
behalf of all purchasers of the Company's common stock between
May 23, 2000 and August 13, 2002. The amended suit names the
Company and certain of its executive officers and directors as
defendants and alleges that the individual defendants issued
false and misleading statements to the investing public during
the period between May 23, 2000 and August 13, 2002 regarding
the Company's financial condition, which resulted in the
artificial inflation of the price of the Company's common stock
during that period. The plaintiffs seek compensatory damages,
costs and expenses.
Plaintiff's response is expected to be filed on or before August
12, 2005, and the Company's reply will be due within 30 days of
the plaintiff's response.
On August 25, 2004, a shareholder derivative action was filed by
Don Feyler, derivatively on behalf of the Company, against
certain of the Company's executive officers and directors, and
against the Company as a nominal defendant. This suit was filed
in the United States District Court for the Eastern District of
Louisiana and consolidated with the "Romero action." The suit
as amended, alleges that the individual defendants committed
violations of state law, including breaches of fiduciary duties,
abuse of control, gross mismanagement, waste of corporate
assets, and unjust enrichment during the period between May 23,
2000 and August 13, 2002. The plaintiff seeks damages and
equitable and/or injunctive relief, including restricting the
proceeds of the individual defendants' trading activities or
their other assets so as to assure that the plaintiff has an
effective remedy.
The Company and the individual defendants filed a motion to
dismiss on June 13, 2005. Plaintiff's response is expected to
be filed on or before August 12, 2005, and The Company's reply
will be due within 30 days of the plaintiff's response.
On October 21, 2004, another shareholder derivative class action
lawsuit was filed by Stephen Morris, derivatively on behalf of
the Company, against certain of its executive officers and
directors, and against the Company as a nominal defendant. This
suit, which was filed in the 14th Judicial District Court for
the Parish of Calcasieu in the State of Louisiana, alleges that
the individual defendants committed violations of state law,
including breaches of fiduciary duty, abuse of control, and
insider selling and misappropriation of information during the
period between May 23, 2000 and August 13, 2002. The plaintiff
makes essentially the same allegations as the plaintiffs in the
Romero and Feyler lawsuits described above and equitable and/or
injunctive relief.
The parties in this case have agreed to a stay of proceedings
pending a decision on a contemplated motion to dismiss in the
Romero and Feyler lawsuits described above. After the public
announcement of the execution of the Merger Agreement, on July
12, 2005, plaintiff Feyler filed a motion for leave to file a
Verified Second Amended Shareholder Derivative and Class Action
complaint.
In the proposed amended complaint, plaintiff seeks to add an
additional claim against our current directors for breach of the
duties of care, loyalty, candor and independence owed to our
public shareholders. Plaintiff alleges that the current
directors have violated their fiduciary duties by entering into
the Merger Agreement with Sprint to insulate themselves from
liability and without regard to the fairness of the transaction
to the Company's shareholders. Plaintiff's proposed amended
complaint alleges the new claim as a putative class action,
seeks to enjoin the Merger, and requests other relief including
an undisclosed amount of damages, costs, and expert and attorney
fees. The motion for leave to amend is scheduled to be heard by
the Court on August 3, 2005. As of July 24, 2005, plaintiff had
not asked the court to set a date for any injunction motion.
The suit is styled "Clodile Romero, Jr. Individually and on
behalf of all others similarly situated, v. US Unwired, Inc.,
William L. Henning, Jr., Robert W. Piper and Jerry E. Vaughn,"
filed in the United States District Court for the Eastern
District of Louisiana. The plaintiff firms in this litigation
are:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202 Phone:
410.332.0030, E-mail: pivenlaw@erols.com;
(2) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(3) Lerach Coughlin Stoia Geller Rudman & Robbins (San
Diego), 401 B Street, Suite 1700, San Diego, CA, 92101,
Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
info@lerachlaw.com;
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com;
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com;
(6) Lerach Coughlin Stoia Geller Rudman & Robbins
(Melville), 200 Broadhollow, Suite 406, Melville, NY,
11747, Phone: 631.367.7100, Fax: 631.367.1173, E-mail:
info@lerachlaw.com
VISTEON INVESTMANT: MI Judge Appoints Law Firm AS Lead Counsel
--------------------------------------------------------------
The law firm Keller Rohrback L.L.P. reports that the Honorable
Avern Cohn of the United States District Court for the Eastern
District of Michigan recently appointed the firm as Lead Counsel
for the Class in this ERISA class action brought on behalf of
the participants and beneficiaries in the Visteon Investment
Plan and the Visteon 401(k) Savings Plan (collectively the
"Plans"), who held and/or purchased Visteon Corporation
("Visteon") (NYSE:VC) stock in their plan accounts between
September 18, 2001 and May 10, 2005 (the "Class Period").
Judge Cohn also appointed the law firms of Schiffrin & Barroway,
L.L.P. and Sprenger & Lang, P.L.L.C. to serve on an executive
committee and appointed Stephen F. Wasinger P.L.C. as local
counsel for the Class.
The Complaint alleges that during the Class Period, the
Defendants breached their fiduciary duties to Plaintiffs and the
Class members by: failing to prudently and loyally manage the
Plans' assets; failing to provide participants with complete and
accurate information regarding Visteon stock sufficient to
advise participants of the true risks of investing their
retirement savings; failing to properly monitor the performance
of their fiduciary appointees, and remove and replace those
whose performance was inadequate; and breaching the duty to
avoid conflicts of interest.
For more details, contact Lynn Sarko, Esq., Beth Leland, Esq.
Erin Riley, Esq. or Jennifer Tuato'o, Paralegal of Keller
Rohrback, L.L.P., Phone: (800) 776-6044, E-mail:
investor@kellerrohrback.com, Web sites:
http://www.erisafraud.comor http://www.seattleclassaction.com.
WAL-MART STORES: Hopes to Stop Huge Sex Discrimination Lawsuit
--------------------------------------------------------------
Wal-Mart Stores, Inc., the world's largest retailer hopes to
derail history's biggest private civil-rights case next week by
arguing before a federal appellate panel that a massive gender-
discrimination lawsuit against it is too big, The Los Angeles
Times reports.
The suit accuses Wal-Mart of systematically favoring men over
women in pay and promotion. An appeals court ruling that backs
turning the case into a class action affecting as many as 1.5
million women not only would put billions of dollars at stake,
but also would set up a battle that both sides say would mean a
lot for other employers and employees.
According to Robin Cook, legal director for the U.S. Chamber of
Commerce, "It's a nightmare for business." In a brief filed to
support Wal-Mart's appeal of the class certification, the
chamber argued that allowing cases that large would create an
avalanche of lawsuits against U.S. businesses that would be so
hard to defend against that many companies would be encouraged
to settle regardless of the facts.
However, advocates for workers, argue that the case must remain
a class action because the courthouse is often the only place
where low-wage, non-union employees can stand up to corporate
giants such as Wal-Mart.
Linda Meric, executive director of an advocacy group called
9to5, National Association of Working Women told The Los Angeles
Times that a victory for the plaintiffs would "send a message to
employers that illegal discrimination won't be tolerated no
matter how big the corporation."
As previously reported in the June 21, 2001 edition of the Class
Action Reporter, six current and former Wal-Mart employees from
California, Illinois, Ohio, Texas and Florida filed the massive
nationwide sex discrimination class action lawsuit in U.S.
District Court for the Northern District of California against
Wal-Mart Stores, Inc. The case, which is believed to be the
largest such suit ever filed against a private employer, was
styled, Dukes v. Wal-Mart Stores, Inc. (Case No. C 012252 MJJ).
The class action suit charges that Wal-Mart discriminates
against its female employees in promotions, compensation and job
assignments in violation of Title VII of the Civil Rights Act of
1964 (Title VII). It also claims that women are largely
relegated to lower paying jobs and systematically denied
advancement opportunities.
Despite the fact that women comprise over 72% of the Wal-Mart
sales workforce, a very small percentage are represented in the
supervisory and managerial ranks:
(1) Men hold 90% of Wal-Mart store manager positions.
(2) Less than one-third of store management overall at Wal-
Mart is female -- a percentage far lower than the
number of female managers employed by Wal-Mart's major
competitors (56%), and lower than the percentage
employed by its competitors back in 1975.
(3) There is only one woman among Wal-Mart's 20 top
officers.
The class in this case may include more than an estimated
500,000 current and former female employees of Wal-Mart retail
stores in America, including Wal-Mart discount stores,
supercenters, neighborhood stores, and Sam's Club, making this
action potentially the largest sex discrimination case ever
litigated against a private employer.
According to the lawsuit, Wal-Mart's treatment of its female
employees includes a sexually demeaning atmosphere, where female
employees are told, "women do not make good managers", that "a
trained monkey" could do their jobs, and that women with kids
couldn't be managers.
Wal-Mart, a global retail giant, reported sales in excess of
$191 billion in 2000. Currently 3,153 stores are owned and
operated by Wal-Mart Stores, Inc. in the United States. Wal-Mart
employs more women than any other company in the United States.
"The industry leader should not be the discrimination leader. If
Wal-Mart's top competitors are able to promote qualified women
to more than half of their management jobs, why can't Wal-Mart?"
said plaintiffs' lead counsel Brad Seligman, Executive Director
of The Impact Fund, a nonprofit civil rights organization based
in Berkeley, CA.
"While women in America have made tremendous strides in the
battle for equality, Wal-Mart is living in the America of thirty
years ago. Wal-Mart should not be allowed to continue denying
women an equal chance to advance and earn a living sufficient to
support themselves and their families," says Sheila Thomas,
Litigation Director of Equal Rights Advocates, and a member of
the plaintiffs' legal team.
"This lawsuit marks the D-Day assault that will shatter the
glass ceiling for women at America's largest private employer."
said plaintiffs' attorney Joseph M. Sellers, who heads the civil
rights practice at Cohen, Milstein, Hausfeld & Toll, P.L.L.C. of
Washington, D.C., another of the lawyers representing the
plaintiffs.
"We hope that Wal-Mart's systematic and harmful oppression of
women will now be fully exposed," say Stephen Tinkler and Merit
Bennett, partners of the Santa Fe and Honolulu law firm of
Tinkler & Bennett, who have been litigating sexual harassment
claims against Wal-Mart since 1995.
The Impact Fund, Equal Rights Advocates, Public Justice Center
(Baltimore) and the private law firms of Cohen, Milstein,
Hausfeld & Toll, Davis Cowell & Bowe (SF) and Tinkler & Bennett
(Santa Fe, NM and Honolulu, HI) represent the female plaintiffs.
Plaintiffs' counsel includes some of the most experienced class
action and sex discrimination attorneys in the country.
Recently, the plaintiffs stated that they have examined Wal-Mart
payroll data that show the retailer paid women, on average, 5
percent less than less-qualified men in comparable positions.
However, Wal-Mart spokeswoman Sarah Clark stated that the
company did not discriminate. Any pay disparities are limited to
isolated areas, she adds. Ms. Clark also pointed out, "At over
90 percent of our stores there is no statistically significant
difference in the pay regarding men and women," Clark said.
The case gained steam in June 2004, when U.S. District Judge
Martin Jenkins in San Francisco certified it as a class action,
which included every female employee at any of the company's
3,600 Wal-Mart and Sam's Club stores in the United States since
1998, from cashiers to managers. In his ruling, Judge Jenkins
stated that he was convinced by data submitted by the
plaintiffs, which highlighted disparities in pay and promotion,
cutting across regions, that could not be explained by
education, experience or performance evaluations.
In November of that same year, Wal-Mart appealed immediately
appealed Judge Jenkins' ruling, thus putting the case on hold
until a three-judge panel of the 9th U.S. Circuit Court of
Appeals in San Francisco considered whether Judge Jenkins was
wrong to allow so large a class. That appellate panel's hearing
is scheduled for next week.
Along with denying the bias charges, the company argues that
Judge Jenkins erred by including virtually all female Wal-Mart
employees regardless of whether they claimed discrimination.
According to the retailer's lead attorney in the case, Theodore
Boutrous Jr. of Los Angeles-based Gibson Dunn & Crutcher, "The
judge has precluded Wal-Mart from arguing that certain
individuals should not be part of the class, that there were
reasons they might have received less pay or were passed over
for promotion." That procedural phase is "a fundamental part of
Title VII cases," he argued.
The result, he added, would be a class so disparate and unwieldy
that Wal-Mart effectively would be prevented from defending
itself.
Previously, the company also argued that store managers make the
employment decisions, which are based on local market
conditions, thus it was wrong of Judge Jenkins to lump all the
employees together.
Equally insistent that the class action decision was correct are
attorneys for the plaintiffs. One such attorney is Jocelyn
Larkin of the Berkeley, California-based Impact Fund, a public-
interest law firm that is leading the plaintiffs' team, who
said, "The judge did an incredibly careful job and considered
every legal and factual issue." She also pointed out that the
class is not unwieldy, because the plaintiffs' payroll data
already allow them to determine which women have been damaged
and by how much.
She goes on to tell The Los Angeles Times, "We're not arguing
that every woman was paid less in every circumstance," and
noted, "Some women at Wal-Mart have done well . . . (and) not
every woman would receive back pay or damages if the company
settled the case." She adds that moreover, "No court has ever
said to a defendant in a class action that you can litigate each
individual's claim. In that case there just wouldn't be a class
action." She then concludes, "That's why Wal-Mart's attack on
the certification order is really an attack on Title VII cases
generally."
University of California-Los Angeles Law School professor
Katherine Stone, a labor law expert told The Los Angeles Times
that the outcome of the appeal is key to the fate of the
discrimination lawsuit because class certification has become
"the crucial moment" for mass discrimination cases. She also
said, "If the class is certified, the defendants will usually
settle." But, if the plaintiffs' petition for a class action is
rejected, it becomes too expensive for plaintiffs' lawyers to
pursue their cases individually and they will "usually fold,"
she adds.
Regardless of the case's outcome at next week's circuit court
hearing, attorneys for both sides say an appeal to the U.S.
Supreme Court is very likely.
For more details, call (1-877-WOMAN-WM (966-2696)), visit:
http://www.walmartclass.comor http://www.CMHT.com,for a copy
of the Complaint in the case, Dukes v. Wal-Mart Stores, Inc.
WALGREEN CO.: Three Pharmacists Added Racial Discrimination Suit
----------------------------------------------------------------
Three pharmacists were recently added to the list of plaintiffs
in a federal lawsuit accusing drugstore chain Walgreen Co. of
racial discrimination against black managers, The Associated
Press reports.
The original lawsuit, which seeks class action status, was filed
in East St. Louis in June on behalf of 11 black current and
former Walgreen workers. The amended complaint would now include
three pharmacists, including two who no longer are with the
Deerfield, Illinois-based Company, whose stores operate under
the name Walgreens. If class action status is granted, attorneys
suing the company believe that it could represent thousands of
other blacks who worked at Walgreens in 45 states.
Plaintiffs in the original lawsuit are from Illinois, Indiana,
Missouri, Kansas, Florida, Texas and Michigan. The amended
petition names a Walgreen pharmacist in Missouri and two former
pharmacists - one in Texas, the other in Florida.
As previously reported in the June 22, 2005 edition of the Class
Action Reporter, the suit is specifically claiming that the
company has a "pervasive policy" of steering black employees to
work in stores in areas with mostly black or lower-income
customers, using an internal system to categorize stores based
on race and income.
In addition, the suit also alleges that black employees are
denied advancement opportunities because the company directs
them to its stores with lower profits, sometimes costing them
bonuses often tied to store sales and gross profits. It also
alleges that Walgreen categorizes its stores based on racial,
ethnic and income demographics and then uses that information to
intentionally "segregate" black management workers at stores
with large numbers of black or low-income customers.
The class covers more than 4,700 stores in 44 states. Walgreen,
which is the nation's largest drugstore chain by sales, has more
than 4,800 stores in 45 states and Puerto Rico, and 2004 sales
of $37 billion.
Some of the plaintiffs in the original suit include:
(1) John Tucker, a clerk in Missouri
(2) Angela Miller, a former store manager in Missouri
(3) Jovan Haney, an assistant store manager in Indiana
(4) Leon Bradley, an executive store assistant in Missouri
(5) Arien Jackson, a former assistant store manager
(6) William Strickland, an executive store assistant
(7) Oscar Green, a store manager in Florida
(8) Kevin Riddle, an executive store assistant in Florida
(9) Avery Anderson, a store manager in Michigan
(10) Malica Page, a former service clerk in Missouri
According to the suit, relief is also being sought for:
(i) Denying black employees promotions in retail and non-
retail management based on race
(ii) Deterring and prohibiting black employees from seeking
more desireable and/or higher paying positions and
promotional opportunities
(iii) Denying black employees training
(iv) Assigning and segregating blacks to harder, less
profitable store locations than white persons
(v) Assigning and segregating black employees to locations
and facilities in areas that have predominantly lower
income customers
(vi) Providing unequal terms and conditions of employment
(vii) Subjecting black employees to a racially discriminatory
work environment; and
(viii) Failing to hire blacks into the Assistant Store
Manager/Management Trainee positions on the same basis
as whites.
Tiffany B. Klosener, Amy L. Coopman and W. James Foland of the
Foland, Wickens, Eisfelder, Roper & Hofer firm in Kansas City
and Kent Spriggs of the Spriggs Law Firm in Tallahassee, Florida
are representing the class.
Tiffani Bruce, a Walgreen spokeswoman, said the company has more
than 163,000 employees, but does not publicly disclose how many
are black. Walgreen has about 16,000 pharmacists. She ale
reiterated, "We have zero tolerance for discrimination and have
a history of promoting diversity. We'll show that all of our
employees have equal opportunity."
XEROX CORPORATION: IBEW Seeks To Be Lead Plaintiff in CT Lawsuit
----------------------------------------------------------------
The International Brotherhood of Electrical Workers Welfare Fund
of Local Union No. 164 (IBEW) and Robert W. Roten filed a motion
to intervene as a named plaintiff and class representative in
the consolidated securities class action filed against Xerox
Corporation, and officers Barry Romeril, Paul Allaire and G.
Richard Thoman in the United States District Court in
Connecticut.
17 cases were initially filed and later consolidated in the
United States District Court for the District of Connecticut.
The consolidated action purports to be a class action on behalf
of the named plaintiffs and all other purchasers of common stock
of the Company during the period between October 22, 1998
through October 7, 1999. The amended consolidated complaint in
the action alleges that in violation of Section 10(b) and/or
20(a) of the Securities Exchange Act of 1934, as amended and SEC
Rule 10b-5 thereunder, each of the defendants is liable as a
participant in a fraudulent scheme and course of business that
operated as a fraud or deceit on purchasers of the Company's
common stock during the Class Period by disseminating materially
false and misleading statements and/or concealing material facts
relating to the defendants' alleged failure to disclose the
material negative impact that the April 1998 restructuring had
on the Company's operations and revenues. The amended complaint
further alleges that the alleged scheme:
(1) deceived the investing public regarding the economic
capabilities, sales proficiencies, growth, operations
and the intrinsic value of the Company's common stock;
(2) allowed several corporate insiders, such as the named
individual defendants, to sell shares of privately held
common stock of the Company while in possession of
materially adverse, non-public information; and
(3) caused the individual plaintiffs and the other members
of the purported class to purchase common stock of the
Company at inflated prices.
The amended consolidated complaint seeks unspecified
compensatory damages in favor of the plaintiffs and the other
members of the purported class against all defendants, jointly
and severally, for all damages sustained as a result of
defendants' alleged wrongdoing, including interest thereon,
together with reasonable costs and expenses incurred in the
action, including counsel fees and expert fees. On September
28, 2001, the court denied the defendants' motion for dismissal
of the complaint.
On November 5, 2001, the defendants answered the complaint. On
or about January 7, 2003, the plaintiffs filed a motion for
class certification. The Company and the individual defendants
filed their opposition to that motion on June 28, 2005. The
motion has not yet been fully briefed or argued before the
court.
On November 8, 2004, the IBEW filed a motion to intervene as a
named plaintiff and class representative. That motion has been
fully briefed, but has not been argued before the court. The
court has not issued a ruling. Separately, on June 8, 2005,
IBEW and Mr. Roten moved to substitute as lead plaintiffs and
proposed class representatives. That motion has been fully
briefed, but has not been argued before the court. The parties
are currently engaged in discovery.
The suit is styled "In Re Xerox Corporation Securities
Litigation, case no. 3:99-cv-02374-AWT," and is pending under
Hon. Alvin W. Thompson of the United States District Court for
the District of Connecticut. The Company is represented by:
(i) Alfred U. Pavlis, Daly & Pavlis, LLC, 107 John St.,
Southport, CT 06890, Phone: 203-255-6700, Fax: 203-255-
1953, E-mail: apavlis@dalypavlis.com
(ii) Andrew N. Vollmer, Gordon Pearson and Heather A. Jones,
Wilmer, Cutler & Pickering, 2445 M St., NW, Washington,
DC 20037-1420, Phone: 202-663-6000
Lawyers for the plaintiffs are:
(a) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(b) Hurwitz & Sagarin, 147 North Broad St., Po Box 112,
Milford, CT, 06460-0112, Phone: 203.877.8000,
(c) Milberg Weiss Bershad & Schulman LLP (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com
(d) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(e) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(f) Shepherd, Finkelman, Miller & Shah, LLC, 35 East State
Street, Media, PA, 19063, Phone: 877.891.9880, E-mail:
jshah@classactioncounsel.com
(g) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(h) Weiss & Yourman (New York, NY), The French Building,
551 Fifth Ave., Suite 1600, New York, NY, 10126, Phone:
212.682.3025, Fax: 212.682.3010, E-mail: info@wyca.com
XEROX CORPORATION: CT Court Refuses To Dismiss Securities Suit
--------------------------------------------------------------
The United States District Court for the District of Connecticut
refused to dismiss the consolidated securities class action
filed against Xerox Corporation, styled "Carlson v. Xerox
Corporation, et al." The suit also names as defendants KPMG
LLP, Paul A. Allaire, G. Richard Thoman, Anne M. Mulcahy, Barry
D. Romeril, Gregory Tayler and Philip Fishbach.
21 cases were initially filed and on September 11, 2002, the
court entered an endorsement order granting plaintiffs' motion
to file a third consolidated amended complaint. The defendants'
motion to dismiss the second consolidated amended complaint was
denied, as moot. According to the third consolidated amended
complaint, plaintiffs purport to bring this case as a class
action on behalf of an expanded class consisting of all persons
and/or entities who purchased the Company's common stock and/or
bonds during the period between February 17, 1998 through June
28, 2002 and who were purportedly damaged thereby.
The third consolidated amended complaint sets forth two claims:
one alleging that each of the Company, KPMG, and the individual
defendants violated Section 10(b) of the 1934 Act and SEC Rule
10b-5 thereunder; the other alleging that the individual
defendants are also allegedly liable as "controlling persons" of
the Company pursuant to Section 20(a) of the 1934 Act.
Plaintiffs claim that the defendants participated in a
fraudulent scheme that operated as a fraud and deceit on
purchasers of the Company's common stock and bonds by
disseminating materially false and misleading statements and/or
concealing material adverse facts relating to various of the
Company's accounting and reporting practices and financial
condition. The plaintiffs further allege that this scheme
deceived the investing public regarding the true state of the
Company's financial condition and caused the plaintiffs and
other members of the alleged Class to purchase the Company's
common stock and bonds at artificially inflated prices, and
prompted a SEC investigation that led to the April 11, 2002
settlement which, among other things, required the Company to
pay a $10 penalty and restate its financials for the years 1997-
2000 (including restatement of financials previously corrected
in an earlier restatement which plaintiffs contend was
improper). The third consolidated amended complaint seeks
unspecified compensatory damages in favor of the plaintiffs and
the other Class members against all defendants, jointly and
severally, including interest thereon, together with reasonable
costs and expenses, including counsel fees and expert fees.
On December 2, 2002, the Company and the individual defendants
filed a motion to dismiss the complaint. On July 13, 2005, the
court denied the motion.
XEROX CORPORATION: CT Court Yet To Rule on ERISA Suit Dismissal
---------------------------------------------------------------
The United States District Court for the District of Connecticut
has yet to rule on Xerox Corporation's motion to dismiss the
consolidated class action filed against it, styled "In Re Xerox
Corp. ERISA Litigation."
On July 1, 2002, a class action complaint captioned "Patti v.
Xerox Corp. et al." was filed, alleging violations of the
Employee Retirement Income Security Act (ERISA). Three
additional class actions (Hopkins, Uebele and Saba) were
subsequently filed in the same court making substantially
similar claims. On October 16, 2002, the four actions were
consolidated as In Re Xerox Corporation ERISA Litigation. On
November 15, 2002, a consolidated amended complaint was filed.
A fifth class action (Wright) was filed in the District of
Columbia. It has been transferred to Connecticut and
consolidated with the other actions.
The purported class includes all persons who invested or
maintained investments in the Xerox Stock Fund in the Xerox
401(k) Plans (either salaried or union) during the proposed
class period, May 12, 1997 through November 15, 2002, and
allegedly exceeds 50,000 persons. The defendants include the
Company and the following individuals or groups of individuals
during the proposed class period: the Plan Administrator, the
Board of Directors, the Fiduciary Investment Review Committee,
the Joint Administrative Board, the Finance Committee of the
Board of Directors, and the Treasurer. The complaint claims
that all the foregoing defendants were fiduciaries of the Plan
under ERISA and, as such, were obligated to protect the Plan's
assets and act in the interest of Plan participants. The
complaint alleges that the defendants failed to do so and
thereby breached their fiduciary duties.
Specifically, plaintiffs claim that the defendants failed to
provide accurate and complete material information to
participants concerning Company stock, including accounting
practices which allegedly artificially inflated the value of the
stock, and misled participants regarding the soundness of the
stock and the prudence of investing their retirement assets in
Company stock. Plaintiffs also claim that defendants failed to
invest Plan assets prudently, to monitor the other fiduciaries
and to disregard Plan directives they knew or should have known
were imprudent, and failed to avoid conflicts of interest.
The complaint does not specify the amount of damages sought.
However, it asks that the losses to the Plan be restored, which
it describes as "millions of dollars." It also seeks other
legal and equitable relief, as appropriate, to remedy the
alleged breaches of fiduciary duty, as well as interest, costs
and attorneys' fees.
The Company filed a motion to dismiss the complaint. The
plaintiffs subsequently filed a motion for class certification
and a motion to commence discovery. Defendants have opposed
both motions, contending that both are premature before there is
a decision on their motion to dismiss. In the fall of 2004, the
Court requested an updated briefing on the Company's motion to
dismiss and update briefs were filed in December.
The suit is styled "In Re Xerox Corporation ERISA Litigation,"
and is pending under Judge Alvin W. Thompson of the United
States District Court in Connecticut. Mr. Lynn Sarko of Keller
Rohrback LLP and Charles R. Watkins of Susman & Watkins are lead
counsel for the plaintiffs, while John F. McKenna of Goodman,
Rosenthal & McKenna,PC is liaison counsel for the plaintiffs.
For more information, contact Mr. Sarko by Mail: 1201 Third
Avenue, Suite 3200, Seattle, Washington 98101-3052 by Phone:
206-623-1900 or contact Mr. Watkins by Mail: Two First National
Plaza, Suite 600 Chicago, IL 60603 or by Phone: 312-346-3466.
XEROX CORPORATION: Plaintiffs Appeal NY Apartheid Suit Dismissal
----------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
Southern District of New York's dismissal of the class action
filed against Xerox Corporation and several other corporations,
alleging they provided providing material assistance to the
apartheid government in South Africa from 1948 to 1994, by
engaging in commerce in South Africa and with the South African
government and by employing forced labor, thereby violating both
international and common law.
The suit, styled "Digwamaje et al. v. IBM et al." was filed in
the United States District Court for the Southern District of
New York on September 27, 2002. Service of the First Amended
Complaint on the Company was deemed effective as of December 6,
2002. On March 19, 2003, Plaintiffs filed a Second Amended
Complaint that eliminated a number of corporate defendants but
was otherwise identical in all material respects to the First
Amended Complaint.
The plaintiffs claim violations of the Alien Tort Claims Act,
the Torture Victims Protection Act and Racketeer Influenced and
Corrupt Organizations Act (RICO). They also assert human rights
violations and crimes against humanity. Plaintiffs seek
compensatory damages in excess of $200 billion and punitive
damages in excess of $200 billion. The foregoing damages are
being sought from all defendants, jointly and severally.
The Company filed a motion to dismiss the Second Amended
Complaint. Oral argument of the motion was heard on November 6,
2003. By Memorandum Opinion and Order filed November 29, 2004,
the court granted the motion to dismiss. A clerk's judgment of
dismissal was filed on November 30, 2004. On December 27, 2004,
the Company received a notice of appeal dated December 24, 2004.
On February 16, 2005, the parties filed a stipulation
withdrawing the December 24, 2004 appeal on the ground that the
November 30, 2004 judgment of dismissal was not appealable. On
March 28, 2005, Plaintiffs submitted a letter requesting
permission to file a motion for leave to file an amended and
consolidated complaint. By Summary Order filed April 6, 2005,
the Court denied the request. In a second Summary Order filed
the same day, the Court amended its November 29, 2004, Opinion
and Order, which dismissed the action, so as to render the
Opinion and Order appealable and plaintiffs filed a new appeal
on May 3, 2005.
The suit is styled "Digwamaje, et al v. IBM Corporation, et al,
case no. 1:02-cv-06218-JES," filed in the United States District
Court for the Southern District of New York, under Judge John E.
Sprizzo. Representing the Company are Kristin M. Heine of
Driscoll & Redlich, 521 Fifth Avenue, Suite 3300, New York, NY
10175; and Kristofor T. Henning, Michael J. Holston and John F.
Schultz, Drinker Biddle & Reath LLP, 30 Broad Street, 30th
Floor, New York, NY 10004-2953. Representing the plaintiffs
are:
(1) Kweku J. Hanson, 487 Main Street, Harford, CT 06106,
Phone: (860) 728-5454
(2) Medi Moira Mokuena, 268 Jubilee Avenue, Halfway House
1685, Extension 12, Republic of South Africa
(3) Medi Mokuena, 268 Jubilee Avenue, Halfway House, P. O.
Box 8591, Johannesburg
(4) Paul M. Ngobeni, 914 Main Street, Suite 206, East
Hartford, CT 06108, Phone: (860) 289-3155
XEROX CORPORATION: Continues To Face NY Race Discrimination Suit
----------------------------------------------------------------
Xerox Corporation continues to face a class action filed in the
United States District Court for the Eastern District of New
York, styled `Warren, et al. v. Xerox Corporation."
Six black company sales representatives filed the suit on May 9,
2001. The plaintiffs allege that the Company has engaged in a
pattern or practice of race discrimination against them and
other black sales representatives by assigning them to less
desirable sales territories, denying them promotional
opportunities, and paying them less than their white
counterparts. Although the complaint does not specify the
amount of damages sought, plaintiffs do seek, on behalf of
themselves and the classes they seek to represent, front and
back pay, compensatory and punitive damages, and attorneys'
fees.
On March 11, 2004, the court entered an order certifying a
nationwide class of all black salespersons employed by Xerox
from February 1, 1997 to the present under Title VII of the
Civil Rights Act of 1964, as amended, and the Civil Rights Act
of 1871.
Meetings, Conferences & Seminars
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-------------------------------------------------
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10TH ANNUAL DRUG & MEDICAL DEVICE LITIGATION
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ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
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ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
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EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
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INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
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NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
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PAXIL LITIGATION
Online Streaming Video
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RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
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RECOVERIES
Big Class Action
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SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
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SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
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THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
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THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
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TRYING AN ASBESTOS CASE
LawCommerce.Com
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THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES AND ADVERSTISING
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
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The Meetings, Conferences and Seminars column appears in the
Class Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
AVON PRODUCTS: Schatz & Nobel Lodges Securities Fraud Suit in NY
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The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status has been filed in the United States District
Court for the Southern District of New York on behalf of all
persons who purchased the common stock of Avon Products, Inc.
(NYSE: AVP) ("Avon") between April 8, 2005 and July 18, 2005,
inclusive (the "Class Period").
The Complaint alleges that Avon violated federal securities laws
by issuing misleading public statements. Specifically,
defendants failed to disclose the following:
(1) that Avon was experiencing increasing resistance to its
expansion efforts in China;
(2) that Avon's revenue growth in its Central and Eastern
Europe markets was dramatically slowing from internally
forecasted levels such that Avon would not reach its
earnings projections;
(3) that Avon's expansion efforts in Russian were being
delayed due to a variety of adverse factors.
On July 19, 2005, Avon announced that its earnings for the
second quarter of 2005 would be below expectations because of
two factors: "an unexpected temporary decline in China as Beauty
Boutique owners reacted with concern to the imminent resumption
of direct selling in that country" and "lower- than-anticipated
revenue growth in Central and Eastern Europe resulting from
underperformance of several key marketing offers as well as
delayed expansion into new geographies within Russia." On this
news, Avon stock closed at $31.30 per share, a decline of $5.30
per share from the previous day's close.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa,
Phone: (800) 797-5499, E-mail: sn06106@aol.com, Web site:
http://www.snlaw.net.
MOLINA HEALTHCARE: Schiffrin & Barroway Lodges Stock Suit in CA
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The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Central District of California on behalf of all securities
purchasers of Molina Healthcare, Inc. (NYSE: MOH) ("Molina
Healthcare" or the "Company") between November 3, 2004 and July
20, 2005, inclusive (the "Class Period").
The complaint charges Molina Healthcare, J. Mario Molina, and
John C. Molina with violations of the Securities Exchange Act of
1934. More specifically, the Complaint alleges that the Company
failed to disclose and misrepresented the following material
adverse facts, which were known to defendants or recklessly
disregarded by them:
(1) that as the Company aggressively expanded through
acquisitions, Molina Healthcare underestimated the
financial impact of absorbing new members and failed to
close favorable contracts with providers;
(2) that as a result of the foregoing the Company
experienced significant increases in medical costs;
(3) that the Company failed to identify and mitigate the
impact of higher-than-expected catastrophic cases and
increased maternity costs; and
(4) as such, defendants' positive statements regarding the
Company's outlook were lacking in any reasonable basis
when made.
On July 20, 2005, after the market closed, Molina Healthcare
slashed its forecast for 2005, blaming rising medical costs, and
said it expects a loss in the range of 15 to 20 cents per share
for the second quarter. More specifically, Molina Healthcare cut
its earnings forecast to 73 cents to 80 cents per share for the
full year, from a prior $2.40 to $2.45 per share. On news of
this, shares of Molina Healthcare fell $20.00 per share, or
43.48 percent, to close at $26.00 per share on unusually heavy
trading volume.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP, 280 King of Prussia
Road, Radnor, PA, 19087, Phone: 1-888-299-7706 or
1-610-667-7706, E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
RAMP CORPORATION: Murray Frank Files Securities Fraud Suit in NY
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The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of shareholders who
purchased or otherwise acquired the securities of Ramp
Corporation ("Ramp" or the "Company") (AMEX:RCO), (Pink
Sheets:RCOCQ) between April 14, 2004, and May 20, 2005,
inclusive (the "Class Period"). It names as defendants, Andrew
Brown, Ron Munkittrick, Darryl R. Cohen, Mitchell Cohen, and BDO
Seidman LLP ("Seidman"), an accounting firm, which performed
audits for the Company for the years ended December 31, 2003 and
December 31, 2004.
The complaint alleges that during the Class Period, Ramp and
certain of the Company's executive officers issued materially
false and misleading financial statements to the investing
public regarding its financial performance and prospects in
violation of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint
alleges that on May 21, 2005, Seidman resigned as the Company's
auditor and advised Ramp that the Company's 2003 and 2004 audit
reports were unreliable. The complaint further alleges that as a
result of such information, Ramp stated that it would not file
its quarterly report on Form 10-Q for the quarter ended March
31, 2005 on time, which led to its defaulting on certain
debentures. It is also alleged in the complaint that Defendant
Brown resigned and was suspended on May 22, 2005, for potential
violations of Company policies and/or the law when he received
an unspecified amount of cash as a gift in December 2003. The
Company filed for reorganization under Chapter 11 of the
Bankruptcy laws on June 2, 2005, and the American Stock Exchange
notified it on June 6, 2005 that it was delisting the Company's
stock.
Upon disclosure of the news that Seidman had resigned and that
the Company's financial statements for 2003 and 2004 were
unreliable, the Company's stock did not trade for approximately
two weeks. On the day Ramp securities resumed trading, the stock
closed at $0.19, down from the closing price of $1.25 on May 20,
2005, a drop of approximately 85%.
For more details, contact Eric J. Belfi, Christopher S. Hinton
or Brad P. Dyer of Murray, Frank & Sailer, LLP, Phone:
(800) 497-8076 or (212) 682-1818, Fax: (212) 682-1892, E-mail:
info@murrayfrank.com, Web site:
http://www.murrayfrank.com/CM/NewCases/NewCases.asp.
RENAISSANCERE HOLDINGS: Chitwood Harley Files Stock Suit in NY
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The law firm of Chitwood Harley Harnes LLP initiated a lawsuit
seeking class action status in the United States District Court
for the Southern District of New York on behalf of all persons
(the "Class") who purchased the securities of RenaissanceRe
Holdings, Ltd (NYSE: RNR) ("RenaissanceRe" or the "Company")
during the period January 24, 2002 and July 25, 2005, inclusive
(the "Class Period"). The proposed class also includes claims
under the Securities Act of 1933 ("the Securities Act") on
behalf of purchasers of the 6.08% Series C preference shares
(NYSE:RNR-PC). The lawsuit was filed against RennaisanceRe,
James Stanard, Michael W. Cash, William Riker, John M. Lummis
and Martin J. Merritt ("Defendants").
The Complaint alleges that during the Class Period,
RenaissanceRe violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, SEC Rule 10b-5, and Sections 11
and 15(a) of the Securities Act of 1933. On February 22, 2005,
RenaissanceRe announced that it planned to restate its financial
statements for 2001, 2002 and 2003 to correct "accounting errors
associated with reinsurance ceded by the Company." RenaissanceRe
also announced that it "had discovered an error in the timing of
the recognition of premium on multi-year ceded reinsurance
contracts for the first three quarters of 2004." On April 8,
2005, Defendants issued a press release announcing that
RenaissanceRe received subpoenas from the U.S. Securities and
Exchange Commission and the Office of the Attorney General for
the State of New York, each of which requests information
related to Channel Reinsurance Ltd., a reinsurance company in
which RenaissanceRe is an investor. On July 11, 2005,
RenaissanceRe announced the resignation of Michael W. Cash,
Senior Vice President of Specialty Reinsurance, after he
voluntarily refused to accept the subpoenas of the SEC for
testimony concerning the Company's restatement. On July 25,
2005, RenaissanceRe announced that it had received a "Wells
Notice" from the SEC in connection with the ongoing
investigation into the restatement of the Company's financial
statements. The Wells Notice indicated that the SEC intends to
bring a civil enforcement action against Mr. Stanard alleging
violations of federal securities laws. On this news, the price
of RNR shares dropped from $47.23 on July 22, 2005 to at $42.27
on July 25, 2005, on extraordinarily heavy volume of 2.6 million
shares traded. The price of RNR's Series C preference shares
also dropped on this news on trading nine times heavier than
trading the previous day.
For more details, contact Lauren S. Antonino, Esq. of Chitwood
Harley Harnes, LLP, 1230 Peachtree Rd., Suite 2300, Atlanta, GA,
30309, Phone: 1-888-873-3999 ext. 6888, E-mail:
lantonino@chitwoodlaw.com, Web site: http://www.chitwoodlaw.com.
UBS-AG: Milberg Weiss Lodges Securities Fraud Suit in S.D. NY
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The law firm of Milberg Weiss Bershad & Schulman LLP ("Milberg
Weiss") initiated a class action lawsuit on behalf of all
persons who purchased from UBS-AG ("UBS") one or more of the UBS
proprietary funds ("UBS Funds") or non-proprietary funds
participating in the UBS Revenue Sharing Program (the "UBS Tier
I Funds," as defined below), from May 1, 2000 through April 30,
2005, inclusive (the "Class Period"), seeking to pursue remedies
under the Securities Act of 1993 (the "Securities Act") and the
Securities Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for
the Southern District of New York against defendant UBS and its
affiliated entities, Case No. 05cv6817.
The "UBS Tier I Funds" includes mutual funds in the following
mutual fund families: AIM, Alliance, American Funds, Columbia,
Davis Funds, Dreyfus, Eaton Vance, Federated, Fidelity, Franklin
Templeton, John Hancock, Hartford, Lord Abbett, MFS,
Oppenheimer, PIMCO, Pioneer, Putnam, Scudder, UBS Global Asset
Management, and Van Kampen.
The complaint alleges that during the Class Period, defendants
served as financial advisors who purportedly provided unbiased
and honest investment advice to their clients. Unbeknownst to
investors, defendants, in clear contravention of their
disclosure obligations and fiduciary responsibilities, failed to
properly disclose that they had engaged in a scheme to
aggressively push UBS sales personnel to steer clients into
purchasing certain UBS Funds and UBS Tier I Funds (collectively,
"Shelf Space Funds") that provided financial incentives and
rewards to UBS and its personnel based on sales. The complaint
alleges that defendants' undisclosed sales practices created an
insurmountable conflict of interest by providing substantial
monetary incentives to sell Shelf-Space Funds to their clients,
even though such investments were not in the clients' best
interest. UBS' failure to disclose the incentives constituted
violations of federal securities laws.
The action also includes a subclass of persons who held any
shares of UBS Mutual Funds. The complaint additionally alleges
that the investment advisor subsidiary of UBS, UBS Global Asset
Management created further undisclosed material conflicts of
interest by entering into revenue sharing agreements with UBS
financial Advisors to push investors into UBS proprietary funds,
regardless of whether such investments were in the investors'
best interests. The investment advisors financed these
arrangements by illegally charging excessive and improper fees
to the fund that should have been invested in the underlying
portfolio. In doing so they breached their fiduciary duties to
investors under the Investment Company Act and state law and
decreased shareholders' investment returns.
The action includes a second subclass of persons who purchased a
UBS Financial Plan that held Tier I mutual funds. The UBS
Financial Plans include, but are not limited to UBS Personalized
Asset Consulting and Evaluation Plan, InsightOne accounts,
and/or a resource management accounts.
For more details, contact Steven G. Schulman, One Pennsylvania
Plaza, 49th fl., New York, NY, 10119-0165, Phone:
(800) 320-5081, E-mail: sfeerick@milbergweiss.com, Web site:
http://www.milbergweiss.com.
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A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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