/raid1/www/Hosts/bankrupt/CAR_Public/051011.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, October 11, 2005, Vol. 7, No. 201
Headlines
ALLIED MUTUAL: Few Policyholders Interested in Insurance Pact
AMERICAN INTERNATIONAL: Policyholder Sues Company, Subsidiary
AMERICAN SUZUKI: Recalls 1,673 Various SUV's Due to Crash Hazard
BROWN-FORMAN: Faces Consumer Lawsuits For Advertising To Minors
BROWN-FORMAN: Tableware Purchasers File Antitrust Suit in CA
CATHOLIC CHURCH: KY Court Rules For Church in Sex Abuse Lawsuit
CIENA CORPORATION: NY Court Approves Securities Suit Settlement
COLORADO: Opening Arguments to Start Soon on Rocky Flats Lawsuit
CYBERONICS INC.: TX Court Consolidates Securities Fraud Lawsuits
DAIMLERCHRYSLER CORPORATION: Recalls 136 Trucks For Crash Hazard
ELECTRONICS BOUTIQUE: NY Court Mulls Overtime Lawsuit Dismissal
ESTEE LAUDER: Plaintiffs Appeal CA Antitrust Settlement Approval
ESTEE LAUDER: Subsidiaries Face False Advertising Lawsuit in CA
GAMESTOP CORPORATION: Seeks Transfer of Overtime Lawsuit To TX
GENERAL MOTORS: Recalls 123,292 2005-06 Vehicles For Fire Hazard
HYUNDAI MOTOR: Recalls 12T Santa Fe Vehicles For Crash Hazard
IRWIN UNION: Plaintiffs Appeal Settlement For PA RESPA Lawsuit
LONGS DRUG: CA Court Certifies Lawsuit V. Employee Application
MEDTRONIC INC.: Faces Litigation Due To Defective Defibrillators
MITSUBISHI FUSO: Recalls 1,848 2001-2003 Trucks For Crash Hazard
NEWS CORPORATION: Court Preliminarily OKs NY, DE Investor Suits
NEWS CORPORATION: Plaintiffs Appeal DE Investor Suit Dismissal
NORDSTROM INC.: Plaintiffs Appeal CA Court Settlement Approval
ODYSSEUS MARKETING: FTC Seeks Halt To Spyware, Adware Operation
OHIO: Judge Certifies Consumer Fraud Suit V. Cincinnati Bengals
OKLAHOMA: Court Reverses Certification For Grand Lake Lawsuit
ORCA BAY: Recalls Crab Legs, Claws Due to Listeria Contamination
PANTRY INC.: Plaintiffs Seek Remand of NC Lawsuit To State Court
READER'S DIGEST: Working To Resolve Shareholder Fraud Lawsuits
RESIDENTIAL FUNDING: Appeals Court Dismisses Claims in IL Suit
RESIDENTIAL FUNDING: IL Court Nixes Stay of Interest Act Lawsuit
RESIDENTIAL LOAN: IL Consumer Fraud, Interest Act Lawsuit Stayed
SARA LEE: Seeks Review of Refusal To Dismiss IL Securities Suit
SECURITY CAPITAL: Plaintiffs Seek Documents Related To DE Suit
SERAGEN INC.: Lawsuit Settlement Hearing Set November 2, 2005
SUPREME GREENS: Settles FTC False Marketing, Unfair Trade Suit
WAL-MART STORES: Aiming To Settle Suit As CA Court Hears Appeal
WAL-MART STORES: Female Employees File Gender Bias Suit in GA
WAL-MART STORES: Faces EEOC Gender Discrimination Lawsuit in KY
WAL-MART STORES: Faces Several Employee Wage, Overtime Lawsuits
New Securities Fraud Cases
ARBINET-THEXCHANGE: Schiffrin & Barroway Lodges Fraud Suit in NJ
GENERAL MOTORS: Law Firms Lodge Securities Fraud Suit in S.D. NY
IMMUCOR INC.: Pomerantz Haudek Files Securities Fraud Suit in GA
SPECTRUM BRANDS: Bruce G. Murphy Lodges Securities Suit in GA
TEMPUR-PEDIC INTERNATIONAL: Milberg Weiss Files Fraud Suit in KY
*********
ALLIED MUTUAL: Few Policyholders Interested in Insurance Pact
-------------------------------------------------------------
Though Iowa's largest-ever settlement of a class action lawsuit
was approved recently, its payout fund of $100 million to $135
million drew scant attention from potential recipients as of
late, The Des Moines Register reports. According to attorneys,
they have received 45,000 claims from Allied Mutual Insurance
policyholders who are eligible to claim the money, even though
at least 305,000 notices have been sent.
Brad Brady, an attorney for plaintiffs who sued Allied Mutual in
1998, told The Des Moines Register, "I don't think anybody is
satisfied with 45,000 (responses)."
The suit had claimed that the policyholder-owned company
improperly transferred assets to publicly held Allied Group of
Des Moines. Both Allied companies were sold to Columbus, Ohio-
based Nationwide Mutual Insurance Co. in 1998 for $1.57 billion.
Policyholders of Allied Mutual received $110 million from
Nationwide at the time of the sale. They sued though to collect
more in a case that went through five judges and saw seven
appeals to the Iowa Supreme Court. After all the legal
wrangling, both sides finally agreed in July to the settlement
that would have Nationwide pay a minimum of $100 million and a
maximum of $135 million more to Allied Mutual customers who
owned policies as of February 18, 1993.
Attorneys told The Des Moines Register that policyholders, both
for auto and home insurance, could receive as much as 40 percent
of the premiums they paid in during a three-year period between
1990 and 1993. They estimated that as many as 25 percent of
potential claimants are from Iowa. Polk County District Judge
Donna Paulsen said she was satisfied that both sides have done
their best to notify policyholders.
The settlement was one of the richest paydays for lawyers
involved in a state lawsuit. Judge Paulsen approved $28.5
million for the plaintiffs' attorneys, who said they spent
35,000 hours on the case. Eleven law firms are listed as
participants in the Allied Mutual case, including six from Iowa.
Nationwide hired four of the Iowa firms, and they did not
provide a breakdown of fees they charged.
AMERICAN INTERNATIONAL: Policyholder Sues Company, Subsidiary
-------------------------------------------------------------
Toni Swain Orrill, a New Orleans resident whose house was
severely damaged in Hurricane Katrina, initiated a class action
suit against American International Group (AIG) and its
subsidiary, Audubon. The suit charges that the company has
failed to help its policyholders who are in desperate need of
assistance after the hurricane.
AIG and Audobon were the underwriters and service providers of
Louisiana Citizens Fair Plan (FAIR), which provides homeowners'
policies of last resort to those who cannot get insurance
elsewhere, including many poor people in New Orleans and the
surrounding area. The class action suit is on behalf of
Louisiana's FAIR plan policyholders -- about 400,000 people. The
suit alleges that AIG has completely failed to provide any way
for its policyholders whose homes have been damaged to initiate
a claim or even reach its offices to find out how to do that, or
to provide temporary disaster relief provided under their
policies.
Mrs. Orrill's husband, Ray, an attorney who represents his wife
in the suit, said, "My wife has called and emailed the insurance
company over 60 times, and could never get through. It is
outrageous that she, and so many others whose homes were
severely damaged in the storm, cannot even get through to their
insurers, much less get relief from them. Someone had to take a
stand." Ray Orrill said that another insurer, Allstate, provided
his wife with a FAIR claim form as a courtesy, after failing to
get any response from AIG. She submitted it to AIG almost thirty
days ago and has not received a response.
Americans for Insurance Reform (AIR) learned of Toni Swain
Orrill's situation when she called the hotline it set up to
assist Katrina victims when they encountered obstacles to
receiving assistance from their insurers. According to AIR co-
founder and spokesperson Joanne Doroshow, "This is the worst
case that we have seen of a complete failure of an insurance
company to respond to the immediate and dire situation of its
Katrina policyholders. Many FAIR policyholders were struggling
economically before the storm hit, and some are now reaching the
point of severe impoverishment due to AIG's failure to help
them. Many have still not received the temporary living expenses
they are entitled to under their policies."
Over a month after Katrina, AIR's hotline is still receiving
calls from people who cannot reach AIG insurance adjusters. One
woman whose home was devastated reports she's been completely
unable to reach any AIG representative to request temporary
funds or a visit from an adjuster. Another caller said she's
been passed around from number to number and AIG has been
largely unresponsive to her.
For more details, contact AIR's Hotline: 888-450-5545 or visit
http://insurance-reform.org.
AMERICAN SUZUKI: Recalls 1,673 Various SUV's Due to Crash Hazard
----------------------------------------------------------------
American Suzuki Motor Corporation in cooperation with the
National Highway Traffic Safety Administration's Office of
Defects Investigation (ODI) is voluntarily recalling about 1,673
units of 1999-2005 Grand Vitara and 2001-06 XL-7 sports utility
vehicles due to crash hazard.
According to the ODI, on certain SUVs equipped with 16-inch
wheels, the front brake disks may break under severe driving
conditions. The breakage can occur in condition where the
vehicle is driven on a regular basis on extremely steep paved
down-slopes while continuously applying the brakes. The front
brakes may become inoperative and the vehicle may pull to one
side. This could result in a crash without prior warning.
As a remedy dealers will replace the front brake discs on these
vehicle. The recall is expected to begin during October 2005.
These vehicles are located on St. Thomas Island (Virgin
Islands).
For more details, contact Suzuki, Phone: 787-622-0600 OR the
NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web
site: http://www.safecar.gov.
BROWN-FORMAN: Faces Consumer Lawsuits For Advertising To Minors
---------------------------------------------------------------
Brown-Forman Corporation and many other manufacturers of
spirits, wine, and beer are defendants in a series of
essentially similar class action lawsuits seeking damages and
injunctive relief for alleged marketing of beverage alcohol to
underage consumers.
Nine lawsuits have been filed to date. The first three were
filed against eight defendants, including the Company and
styled:
(1) Hakki v. Adolph Coors Company, et al., District of
Columbia Superior Court No. CD 03-9183 (November 2003);
(2) Kreft v. Zima Beverage Co., et.al., District Court,
Jefferson County, Colorado, No. 04cv1827 (December
2003); and
(3) Wilson v. Zima Company, et.al., U.S. District Court for
the Western District of North Carolina, Charlotte
Division, No. 3:04cv141 (January 2004).
Two virtually identical suits with allegations similar to those
in the first three lawsuits were filed in Cleveland, Ohio, in
April and June, 2004, respectively, against the original eight
defendants as well as an additional nine manufacturers of
spirits and beer, and are now consolidated as " Eisenberg v.
Anheuser-Busch, U.S. District Court for the District of Northern
Ohio, No. 1:04cv1081."
Five similar suits were filed in 2005, styled:
(i) Elizabeth H. Sciocchette v. Advanced Brands, Albany
County, New York Supreme Court No. 102205 (February 16,
2005);
(ii) Roger and Kathy Bertovich v. Advanced Brands, Hancock
County, West Virginia, Circuit Court No. 05-C-42M
(February 17, 2005);
(iii) Jacquelin Tomberlin v. Adolph Coors, Dane County
(Madison, Wisconsin) Circuit Court, (February 23,
2005);
(iv) Viola Alston v. Advanced Brands, Wayne County,
Michigan, Circuit Court No. 05-509294, (March, 30,
2005), and
(v) Craig Konhauzer v. Adolph Coors Company, Broward County
Florida Circuit Court, No. 05004875 (March 30, 2005)
In addition, the Company received in February 2004, a pre-
lawsuit notice under the California Consumer Protection Act
indicating that the same lawyers intend to file a lawsuit there
against many industry defendants, including the Company,
presumably on the same facts and legal theories.
The suits allege that the defendants have engaged in deceptive
marketing practices and schemes targeted at underage consumers,
negligently marketed their products to the underage, and
fraudulently concealed their alleged misconduct. Plaintiffs
seek class action certification on behalf of:
(a) a guardian class consisting of all persons who were or
are parents of children whose funds were used to
purchase beverage alcohol marketed by the defendants
which were consumed without their prior knowledge by
their children under the age of 21 during the period
1982 to present; and
(b) an injunctive class consisting of the parents and
guardians of all children currently under the age of
21.
The lawsuits seek a finding that defendants engaged in a
deceptive scheme to market alcoholic beverages to underage
persons and an injunction against such alleged practices;
disgorgement and refund to the guardian class of all proceeds
resulting from sales to the underage since 1982; and judgment to
each guardian class member for a trebled award of actual
damages, punitive damages, and attorneys fees. The lawsuits,
either collectively or individually, if ultimately successful,
represent significant financial exposure.
The Company, in coordination with other defendants, is
vigorously defending itself in these cases, four of which are
pending on motions to dismiss.
BROWN-FORMAN: Tableware Purchasers File Antitrust Suit in CA
------------------------------------------------------------
Brown-Forman Corporation's subsidiary Lenox, Inc. continues to
face a class action filed in the United States District Court
for the Northern District of California, on behalf of a class of
consumers who purchased tableware sold in the United States from
May 1, 2001, through the present. The suit also names as
defendants Federated Department Stores, the May Department
Stores Company and Waterford Wedgwood U.S.A.
In November 2004, plaintiffs filed a consolidated complaint
alleging that the defendants violated Section 1 of the Sherman
Act by conspiring to fix prices and to boycott sales to Bed,
Bath & Beyond. The cases are consolidated in the U.S. District
Court for the Northern District of California, Nos. C-04-3514VRW
and C-04-3622VRW. Plaintiffs seek to recover an undisclosed
amount of damages, trebled in accord with the anti-trust laws,
as well as costs, attorney fees and injunctive relief.
The suit is styled "Young v. Federated Department Stores, Inc.
et al., case no. 3:04-cv-03514-VRW," filed in the United States
District Court for the Northern District of California, under
Judge Vaughn R. Walker. Representing Lenox, Inc. are Tammy
Albarran and Terri Garland, Morrison & Foerster, 425 Market
Street, San Francisco, CA 94105, Phone: (415) 268-7657, E-mail:
talbarran@mofo.com or tgarland@mofo.com. Representing the
plaintiffs are Henry A. Cirillo, Michael P. Lehmann and Alex C.
Turan of The Furth Firm LLP, 225 Bush Street 15th Floor, San
Francisco, CA 94104, Phone: (415) 433-2070, Fax: 415-982-2076,
E-mail: Hcirillo@furth.com, mplehmann@furth.com or
aturan@furth.com.
CATHOLIC CHURCH: KY Court Rules For Church in Sex Abuse Lawsuit
---------------------------------------------------------------
Judge John G. Heyburn II of the U.S. District Court in
Louisville, Kentucky ruled that the Holy See is a foreign state
that enjoys certain immunity protections in a lawsuit by three
men who allege the Vatican covered up the sexual abuse of
children by priests, The Associated Press reports.
Judge Heyburn essentially rejected the victims' argument that
the Holy See is an international religious organization ruling
that it is a foreign state subject to provisions of the Foreign
Sovereign Immunities Act. The 1976 act restricts when foreign
states can be sued in American courts, although it provides
exceptions, such as when the states engage in commercial or
certain harmful activities in the United States. In addition,
the act also requires that service of a lawsuit follow strict
protocols. In this case, it required documents to be translated
into Latin and served to the Vatican foreign minister,
Archbishop Giovanni Lajolo.
In his ruling, Judge Heyburn said the suit had actually been
sent to Archbishop Lajolo's boss, Cardinal Angelo Sodano, and
that "strict compliance" with the act was necessary. In his
ruling, Judge Heyburn wrote, "That compliance is admittedly
difficult and is made more so by the absence of any
accommodation from the Holy See." Because the victims made
"good faith efforts," the judge gave them 60 days to properly
serve Archbishop Lajolo with the documents.
William McMurry, lawyer for the plaintiffs, told The Associated
Press that he was encouraged that Judge Heyburn hadn't dismissed
the suit outright, and had only found a technical problem with
the way the papers were served. In an phone interview, he told
The Associated Press, "We have 60 days to correct a technical
error, after which we can get to the merit of the case, and
ultimately a court will determine that the Vatican can be held
accountable in American courts for the sexual abuse of children
by Roman Catholic priests in this country."
Filed by Mr. McMurry last year on behalf of three men who say
they were abused as far back as 1928, the suit alleges a cover
up by the Vatican to protect priests who molested American
children. The lawsuit argues that the Holy See engaged in both
commercial and harmful activity in the United States and that
the case should go forward. Mr. McMurry, who in 2003
represented 243 abuse victims in reaching a $25.7 million
settlement with the Archdiocese of Louisville, is seeking to
have the suit certified as a class action case. The case is
thought to be the first sexual-abuse suit to name the Vatican as
sole defendant and would be the first class action suit against
the Vatican regarding clerical sexual abuse.
Judge Heyburn's ruling is significant because it says that the
Holy See's religious activity is irrelevant to the immunity
protections it enjoys as a foreign state. In the long run the
ruling could have implications for other cases in which the Holy
See is named as a defendant in the clerical sexual abuse
scandal.
Individuals though familiar with the matter pointed out that if
the judge finds that Archbishop Lajolo was properly served, Mr.
McMurry will still have to establish jurisdiction by convincing
the court that an exception to the immunity protections of the
Foreign Sovereign Immunities Act should be granted.
CIENA CORPORATION: NY Court Approves Securities Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of a
consolidated securities class action filed against Ciena
Corporation, as a result of its merger with ONI Systems
Corporation.
Beginning in August 2001, a number of substantially identical
class action complaints alleging violations of the federal
securities laws were filed against ONI Corporation and:
(1) Hugh C. Martin, ONI's former chairman, president and
chief executive officer;
(2) Chris A. Davis, ONI's former executive vice president,
chief financial officer and administrative officer; and
(3) certain underwriters of ONI's initial public offering
The complaints were consolidated into a single action, and a
consolidated amended complaint was filed on April 24, 2002. The
amended complaint alleges, among other things, that the
underwriter defendants violated the securities laws by failing
to disclose alleged compensation arrangements (such as
undisclosed commissions or stock stabilization practices) in the
initial public offering's registration statement and by engaging
in manipulative practices to artificially inflate the price of
ONI's common stock after the initial public offering. The
amended complaint also alleges that ONI and the named former
officers violated the securities laws on the basis of an alleged
failure to disclose the underwriters' alleged compensation
arrangements and manipulative practices. No specific amount of
damages has been claimed.
Similar complaints have been filed against more than 300 other
issuers that have had initial public offerings since 1998, and
all of these actions have been included in a single coordinated
proceeding. Mr. Martin and Ms. Davis have been dismissed from
the action without prejudice pursuant to a tolling agreement. In
July 2004, following mediated settlement negotiations, the
plaintiffs, the issuer defendants (including Ciena), and their
insurers entered into a settlement agreement, whereby the
plaintiffs' cases against the issuers are to be dismissed.
The plaintiffs and issuer defendants subsequently moved the
court for preliminary approval of the settlement agreement,
which motion was opposed by the underwriter defendants. On
February 15, 2005, the district court granted the motion for
preliminary approval of the settlement agreement, subject to
certain modifications to the proposed bar order, and directed
the parties to submit a revised settlement agreement reflecting
its opinion.
COLORADO: Opening Arguments to Start Soon on Rocky Flats Lawsuit
----------------------------------------------------------------
With jury selection under way since last week, opening arguments
are expected to begin in a federal class action lawsuit filed by
Gertrude Babb and several other property owners on behalf of
about 13,000 people who owned property near the former Rocky
Flats nuclear weapons plant at the time it was shut down in
1989, The Associated Press reports.
Court records show that Mrs. Babb, who has been waiting 15 years
for her day in court against the companies that operated the
plant northwest of Denver, lost tens of thousands of dollars
when she and her late husband sold 13 acres near the former
Rocky Flats nuclear weapons plant. The couple were worried that
plutonium and other hazardous materials were wafting onto their
land.
Attorneys for the property owners claim that Dow Chemical Co.
and Rockwell International Corporation mishandled radioactive
waste over four decades, resulting in lower property values in
nearby residential areas.
However, Dow, Rockwell and the Energy Department deny the
allegations, saying plutonium releases never posed a significant
health risk or caused significant property damage. They pointed
out that the releases were the result of events outside the
companies' control, such as a 1969 windstorm.
In a recent court filing, defense attorneys even pointed out,
"The public good from the operation of the Rocky Flats plant --
including both the economic benefits generated by the plant and
the plant's contribution to national security -- has far
outweighed any harm to class members from the plant's
operation."
According to individuals familiar with the matter, the federal
government under contracts Dow and Rockwell had with the Energy
Department would pay any damages. In addition, the government is
also paying the companies' legal bills.
The plant made plutonium triggers for nuclear weapons. The
property owners say Dow, which operated Rocky Flats from the
1950s through 1975, and Rockwell, which took over in 1975 and
operated the plant until it was shut down in 1989, improperly
stored or otherwise mishandled plutonium-laced waste, resulting
in contamination of soil and groundwater. The plaintiffs claim
that large fires at the plant and windstorms and other natural
events helped to spread the waste outside the plant's
boundaries. That contamination, plus what the property owners
said was a stigma attached to houses near the plant, resulted in
plummeting property values. According to one of the plaintiffs'
attorneys, Merrill Davidoff of Philadelphia, damages could reach
$500 million.
Though a 14-year, $7 billion cleanup project is to be completed
by next year and much of the 6,240-acre site will be transformed
into a wildlife refuge, some neighbors and environmentalists
believe the cleanup has not gone as smoothly as the government
and its contractors have reported. In September for instance,
the Energy Department said that crews had found five radioactive
"hot spots" outside the established cleanup area. The news
prompted contractor Kaiser Hill to remove tons of soil around
the site where thousands of barrels of plutonium-tainted oil was
stored in the 1950s and 1960s.
Attorneys for property owners also stated in a recent court
filing, "The releases and contamination began under Dow,
continued under Rockwell, persist to the present, and will
continue into the indefinite future, as the result of
operational and waste-storage practices that Dow and Rockwell
conducted intentionally, and which have led and will lead to
offsite releases of plutonium and the contamination of area
properties."
Attorneys for Rockwell and Dow countered though that the
property owners couldn't prove their case. They also contend
that all plutonium has been removed, which means there is no
ongoing, class-wide trespass as the lawsuit claims. In addition,
the attorneys also argue that property owners failed to provide
evidence of any change in market value that could be blamed on
releases of hazardous materials.
The suit is styled, "Cook, et al v. Rockwell Intl. Corp., Case
No. 1:90-cv-00181-JLK," filed in the United States District
Court for the District of Colorado, under Judge John L. Kane.
Representing the Plaintiff/s are:
(1) Gary B. Blum of Silver & DeBoskey, P.C., 1801 York St.,
Denver, CO 80206, U.S.A, Phone: 303-399-3000, Fax: 303-
399-2650, E-mail: blumg@s-d.com;
(2) Stanley M. Chesley of Waite, Schneider, Bayless &
Chesley Co., L.P.A., 1513 Fourth and Vine Tower, One
West Fourth St., Cincinnati, OH 45202, U.S.A, Phone:
513-621-0268;
(3) Merrill Gene Davidoff, Jennifer E. MacNaughton, Peter
B. Nordberg, Ellen T. Noteware, Bernadette M. Rappold,
Stanley B. Siegel and David F. Sorensen of Berger &
Montague, P.C., 1622 Locust St., Philadelphia, PA
19103, U.S.A, Phone: 215-875-3084, 215-875-3000 and
215-875-3051, Fax: 215-875-4671, 215-875-4604 and 215-
875-5707, E-mail: mdavidoff@bm.net,
jmacnaughton@bm.net, pnordberg@bm.net,
enoteware@bm.net and dsorensen@bm.net;
(4) Bruce H. DeBoskey of Silver & Deboskey, P.C., 1801 York
St. #700, Denver, CO 80206-5607, U.S.A, Phone: 303-399
-3000;
(5) Kenneth A. Jacobsen of Jacobsen Law Offices, LLC, 12
Orchard Lane, Wallingford, PA 19086, U.S.A., Phone:
610-566-7930, Fax: 610-566-7940;
(6) David Evans Kreutzer of Colorado Department of Law,
1525 Sherman St., 5th Floor, Denver, CO 80203, U.S.A,
Phone: 303-866-5667, Fax: 303-866-3558, E-mail:
david.kreutzer@state.co.us;
(7) Louise M. Roselle of Waite, Schneider, Bayless &
Chesley Co., L.P.A., 1513 Fourth and Vine Tower, One
West Fourth St., Cincinnati, OH 45202, U.S.A, Phone:
513-621-0267, Fax: 513-381-2375, E-mail:
louiseroselle@wsbclaw.com;
(8) Clisham, Satriana & Biscan, LLC, 1512 Larimer St., #400
Denver, CO 80202, U.S.A, Phone: 303-468-5403, Fax: 303-
942-7290, E-mail: satrianad@csbattorneys.com;
(9) Holly Brons Shook of Silver & DeBoskey, P.C., 1801 York
St., Denver, CO 80206, U.S.A, Phone: 303-399-3000, Fax:
303-399-2650, E-mail: shookh@s-d.com;
(10) Ronald Simon of Simon & Associates, 1707 N. St., N.W.
Washington, DC 20036, U.S.A, Phone: 202-429-0094, Fax:
202-429-0075, E-mail: ron@1707law.com; and
(11) John David Stoner of Chimicles & Tikellis, L.L.P., 361
West Lancaster Ave., One Haverford Centre, Haverford,
PA 19041-0100, U.S.A
Representing the Defendant/s are:
(i) Joseph John Bronesky and Christopher Lane of Sherman &
Howard, L.L.C.- 17th St., Denver, CO, United States
District Court Box 12, 633 Seventeenth St., #3000
Denver, CO 80202, U.S.A, Phone: 303-299-8450 and 303-
299-8422, Fax: 303-298-0949 and 303-298-0940, E-mail:
jbronesk@sah.com and clane@sah.com;
(ii) Wendy S. White, Timothy P. Brooks, Patrick M. Hanlon,
Amy Horton, Franklin D. Kramer and Edward J. Naughton
Of Goodwin Procter, LLP-DC, 1800 Massachusetts Ave.,
N.W. #800, Washington, DC 20036, U.S.A, Phone: 202-
828-2000, Fax: 828-2000;
(iii) Michael K. Isenman of Goodwin Procter, LLP-DC, 901 New
York Ave., NW #700, Washington, DC 20001, U.S.A, Phone:
202-346-4000, Fax: 202-346-4444, E-mail:
misenman@goodwinprocter.com;
(iv) Lester C. Houtz of Bartlit, Beck, Herman, Palenchar &
Scott-Colorado, 1899 Wynkoop St., #800 Denver, CO
80202, U.S.A., Phone: 303-592-3177, Fax: 303-3140, E-
mail: lester.houtz@bartlit-beck.com;
(v) Douglas J. Kurtenbach, S. Jonathan Silverman and Mark
S. Lillie of Kirkland & Ellis-Illinois, 200 East,
Randolph Drive, #5400 Chicago, IL 60601, U.S.A, Phone:
312-861-2225 and 312-861-2089, Fax: 861-2200 and 312-
660-0452, E-mail: mlillie@kirkland.com;
(vi) Douglas M. Poland of LaFollette, Godfrey & Kahn, P.O.
Box 2719, One East Main St., Madison, WI 53703-2719,
U.S.A, Phone: 608-257-3911, Fax: 608-257-0609, E-mail:
dpoland@gklaw.com; and
(vii) Louis W. Pribila of Dow Chemical Company, 2030 Dow
Center, Midland, MI 48674, U.S.A, Phone: 517-638-9511,
Fax: 638-9410.
CYBERONICS INC.: TX Court Consolidates Securities Fraud Lawsuits
----------------------------------------------------------------
The United States District Court for the Southern District of
Texas ordered consolidated the two securities class actions
filed against Cyberonics, Inc. and certain of its current
officers.
On June 17, 2005, a putative class action lawsuit was filed
against the Company and certain of its current officers in the
United States District Court for the Southern District of Texas.
The lawsuit is styled "Richard Darquea v. Cyberonics Inc., et
al., Civil Action No. H:05-cv-02121." A second lawsuit with
similar allegations, styled "Stanley Sved v. Cyberonics, Inc.,
et al., Civil Action No. H:05-cv-2414," was filed on July 12,
2005. The complaints generally allege, among other things, that
the defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 by making false and misleading
statements relating to the Company's Vagus Nerve Stimulation
Therapy System device (the "VNS Device").
Specifically, the plaintiffs allege that the defendants failed
to disclose that the U.S. Food and Drug Administration (the FDA)
had "safety and efficacy concerns" about the use of the VNS
Device for the treatment of depression and that the defendants
failed to disclose the existence of certain "manufacturing and
quality practices," as detailed in the FDA's December 22, 2004
Warning Letter, that negatively impacted the Company's prospects
for obtaining FDA approval to use the VNS Device to treat
depression. Plaintiffs seek to represent a class of all persons
and entities, except those named as defendants, who purchased or
otherwise acquired Company securities during the period June 15,
2004 through October 1, 2004. The complainants seek unspecified
monetary damages and equitable or injunctive relief, if
available.
On July 28, 2005, the Court consolidated the two cases under
Civil Action No. H-05-2121, styled "In re Cyberonics, Inc.
Securities Litigation" and entered a scheduling order. Under the
terms of the order, the Court will select a lead plaintiff who
will then have 60 days to file an amended complaint. Defendants
will have 60 days to answer or respond to the amended complaint.
If defendants move to dismiss the amended complaint, lead
plaintiff will have 60 days to respond and defendants will have
45 days to file a reply.
DAIMLERCHRYSLER CORPORATION: Recalls 136 Trucks For Crash Hazard
----------------------------------------------------------------
DaimlerChrysler Corporation in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation (ODI) is voluntarily recalling about 136 units of
2006 Dodge / RAM150 and 2005 Dodge / RAM1500 REGCAB SWB four
wheel drive pickup trucks due to crash hazard.
According to the ODI, on certain 4-wheel drive pickup trucks,
the totally integrated power module (TIPM) may contain incorrect
transfer case calibration set points, potentially resulting in
inadvertent transfer case default to neutral. If this occurs and
the parking brake is not applied, the vehicle may roll away and
cause a crash without warning.
Dealers will reprogram the TIPM with new software that prevents
the potential for this condition. The recall is expected to
begin during November 2005.
For more details, contact DaimlerChrysler, Phone: 1-800-853-1403
OR the NHTSA Auto Safety Hotline: 1-888-327-4236 or
1-800-424-9153, Web site: http://www.safecar.gov.
ELECTRONICS BOUTIQUE: NY Court Mulls Overtime Lawsuit Dismissal
---------------------------------------------------------------
The United States District Court for the Western District of New
York has yet to rule on Electronics Boutique Holding
Corporation's motion to dismiss the class action filed against
it and subsidiary Electronics Boutique of America, Inc., on
behalf of its current and former employees.
On October 19, 2004, Milton Diaz filed a complaint on behalf of
a group of current and former employees to whom the Company
allegedly failed to pay minimum wages and overtime compensation
in violation of the Fair Labor Standards Act (FLSA) and New York
law. The plaintiff moved to conditionally certify a group of
similarly situated individuals under the FLSA and in March 2005,
there was a hearing on this motion.
In March 2005, the plaintiff filed a motion on behalf of current
and former store managers and assistant store managers in New
York to certify a class under New York wage and hour laws. In
March 2005, the Company also filed a motion to dismiss the New
York state law claims.
The suit is styled "Diaz v. Electronics Boutique of America,
Inc. et al., case no. 1:04-cv-00840-JTE," filed in the United
States District Court for the Western District of New York,
under Judge John T. Elfvin. Representing the plaintiffs is
Judith Ann Biltekoff of Sullivan, Oliverio & Gioia Mail: 600
Main Place Tower, Buffalo, NY 14202-3706 Phone: (716) 854-5300
Fax: 716-854-5299 E-mail: jbiltekoff@soglawny.com. Representing
the Company are John G. Horn and Robert C. Weissflach of
Harter, Secrest and Emery LLP, Twelve Fountain Plaza Suite 400
Buffalo, NY 14202-2293 Phone: 716-845-4228 Fax: 716-853-1617 or
E-mail: jhorn@hselaw.com or rweissflach@hselaw.com; and Samuel
S. Shaulson of Morgan, Lewis & Bockius LLP, 101 Park Avenue 37th
Floor New York, NY 10178-0060 Phone: (212) 309-6718 Fax:
(212) 309-6001 E-mail: sshaulson@morganlewis.com.
ESTEE LAUDER: Plaintiffs Appeal CA Antitrust Settlement Approval
----------------------------------------------------------------
The United States District Court for the Northern District of
California granted final approval to the settlement of a class
action filed against Estee Lauder Companies, Inc., and other
cosmetic manufacturers and retailers.
The suit was initially filed in the Superior Court of the State
of California in Marin County on behalf of all U.S. residents
who purchased prestige cosmetics products at retail for personal
use from eight department stores groups that sold such products
in the United States (the "Department Store Defendants"). The
suit alleged that the Department Store Defendants, the Company
and eight other manufacturers of cosmetics (the "Manufacturer
Defendants") conspired to fix and maintain retail prices and to
limit the supply of prestige cosmetics products sold by the
Department Store Defendants in violation of state and Federal
laws. The plaintiffs sought, among other things, treble
damages, equitable relief, attorneys' fees, interest and costs.
The suit was later removed to federal court.
On March 30, 2005, the United States District Court for the
Northern District of California entered a Final Judgment
approving the settlement agreement the Company entered into in
July 2003 with the plaintiffs, the other Manufacturer Defendants
and the Department Store Defendants. The time to appeal that
judgment has not yet expired. Assuming no appeal, the Final
Judgment will result in the plaintiffs' claims being dismissed,
with prejudice, in their entirety in both the Federal and
California actions. There was no finding or admission of any
wrongdoing by the Company or any other defendant in this
lawsuit. The Company entered into the settlement agreement
solely to avoid protracted and costly litigation.
In connection with the settlement agreement, the defendants,
including the Company, will provide consumers with certain free
products and pay the plaintiffs' attorneys' fees.
The suit is styled "Azizian et al v. Federated Department
Stores, Inc. et al, case no. 4:03-cv-03359," filed in the United
States District Court for the Northern District of California,
under Judge Saundra Brown Armstrong. Representing the
plaintiffs is Guido Saveri of Saveri & Saveri, Inc., 111 Pine
Street, Suite 1700, San Francisco, CA 94111-5630, Phone: 415-
217-6810, Fax: 415-217-6813, E-mail: guido@saveri.com.
Representing the Company is Larry S. Gangnes, 1420 Fifth Avenue,
Ste. 4100, Seattle, WA 98101-2338, Phone: (206) 223-7036, E-
mail: gangnesl@lanepowell.com.
ESTEE LAUDER: Subsidiaries Face False Advertising Lawsuit in CA
---------------------------------------------------------------
Two of Estee Lauder Companies, Inc.'s subsidiaries face a
nationwide class action filed in the Superior Court of
California for the County of San Diego. The complaint names
other defendants, including manufacturers and retailers.
The plaintiff is seeking injunctive relief, restitution, and
general, special and punitive damages for alleged violations of
the California Unfair Competition Law, the California False
Advertising Law, and for negligent and intentional
misrepresentation. The purported class includes individuals "who
have purchased skin care products from defendants that have been
falsely advertised to have an 'anti-aging' or youth inducing
benefit or effect."
GAMESTOP CORPORATION: Seeks Transfer of Overtime Lawsuit To TX
---------------------------------------------------------------
The United States District Court for the Northern District of
Texas, Fort Worth Division has yet to rule on GameStop
Corporation's motion to transfer a collective action filed
against it, alleging violations of the Fair Labor Standards Act
(FLSA).
On October 20, 2004, former Store Manager John P. Kurtz filed a
collective action lawsuit against the Company in U.S. District
Court, Western District of Louisiana, Lafayette/ Opelousas
Division, alleging that the Company's salaried retail managers
were misclassified as exempt and should have been paid overtime,
in violation of the FLSA. Mr. Kurtz is seeking to represent all
current and former salaried retail managers who were employed by
the Company for the three years before October 20, 2004. He is
seeking recovery of unpaid overtime, interest, penalties,
attorneys' fees and costs. On January 12, 2005, the Company
filed an answer to the complaint and a motion to transfer the
action to the Northern District of Texas, Fort Worth Division.
GENERAL MOTORS: Recalls 123,292 2005-06 Vehicles For Fire Hazard
----------------------------------------------------------------
General Motors Corporation in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation (ODI) is voluntarily recalling about 123,592 units
of 2006 Buick / Rainer, 2006 Cadillac / Escalade, 2005-06
Chevrolet / Corvette, 2006 Chevrolet / Express, 2005-06
Chevrolet / Silverado, 2006 Chevrolet / Tahoe, 2006 Chevrolet /
Trailblazer, 2006 Chevrolet / Trailblazer EXT, GMC / Envoy, 2006
GMC / Envoy XL, 2006 GMC / Savana, 2005-06 GMC / Sierra, 2006
GMC / Yukon, 2006 Hummer / H2 and 2006 Isuzu / Ascender vehicles
due to fire hazard.
According to the ODI, certain vehicles may have been built with
a power steering hose that is not to specification. Under
extreme steering maneuvers, such as turning the steering wheel
fully to the left or right while braking, the hose may fracture
and leak fluid. If this were to occur, power steering assist
would be lost and increased steering effort would be required.
On vehicles equipped with hydro-boost power brakes, it could
also result in a loss of power brake assist and increased
braking effort would be required. If the power steering fluid
spray onto hot engine parts, an engine compartment fire could
occur.
As a remedy, dealers will inspect the power steering hose(s) for
two suspect date codes and replace them if required. The recall
will begin on October 14, 2005.
For more details, contact Chevrolet, Phone: 1-800-630-2438, GMC,
Phone: 1-866-996-9463, Buick, Phone: 1-866-608-8080, Cadillac,
Phone: 1-866-982-2339, Isuzu, Phone: 1-800-255-6727, Hummer,
Phone: 1-800-732-5493 OR the NHTSA Auto Safety Hotline:
1-888-327-4236 or 1-800-424-9153, Web site:
http://www.safecar.gov.
HYUNDAI MOTOR: Recalls 12T Santa Fe Vehicles For Crash Hazard
-------------------------------------------------------------
Hyundai Motor Company in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling about 12,000 units of 2005 Santa
Fe vehicles due to crash hazard.
According to the ODI, on certain vehicles equipped with an
advanced airbag feature, the occupant classification (OCS)
installed in the right front seat of the vehicle may misclassify
a child restraint seat (CRS) as an adult. This may occur if the
CRS is installed after an adult has been seated in the right
front seat. If there has not been a "key on" "key off" cycle
with the right front passenger seat empty prior to installation
of the CRS. The possibility of misclassification of a CRS as an
adult may allow the right front airbag or side impact airbag to
deploy in a crash and could result in injury to the right front
occupant.
As a remedy, dealers will reprogram the vehicle's OCS Electronic
control unit (ECU) to remove the feature that may cause the CRS
to be recognized as an adult. The recall is expected to begin
during December 2005.
For more details, contact Hyundai, Phone: 1-800-633-5151 OR the
NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web
site: http://www.safecar.gov.
IRWIN UNION: Plaintiffs Appeal Settlement For PA RESPA Lawsuit
--------------------------------------------------------------
Seven plaintiffs appealed the settlement of the consolidated
class action filed against Irwin Union Bank and Trust Co.,
alleging that the plaintiffs obtained second-lien mortgage loans
from either Community Bank of Northern Virginia or Guaranty
National Bank of Tallahassee and that they were charged interest
rates and fees violating the Pennsylvania Secondary Mortgage
Loan Act.
Six cases were initially filed. Plaintiffs additionally claim
that the banks were not the actual lenders on the loans, but
rather that the banks "rented" their banking charters to
affiliates for the purpose of facilitating the assessment of
"illegal" fees and that the affiliates either split the fees or
kicked back the fees in violation of Real Real Estate Settlement
Procedures Act (RESPA). Plaintiffs sought to hold the Company's
subsidiary liable primarily on the basis that the subsidiary was
an assignee of the mortgage loans.
In December 2003, the U.S. District Court for the Western
District of Pennsylvania gave its final approval to a proposed
$41.1 million settlement for all six cases, inclusive of
attorney's fees. The settlement represents payment to
approximately 44,000 borrowers nationwide. A group of seven
plaintiffs' class action counsel appealed the settlement on
various grounds. Oral arguments in those appeals occurred in
February 2005 and the court's decision is pending.
The suit is styled "DAVIS, et al v. COMMUNITY BANK OF NO, et
al., case no. 2:02-cv-01201-GLL," filed in the United States
District Court for the Western District of Pennsylvania under
Judge Gary L. Lancaster. Representing the Company is Larry K.
Elliott of Cohen & Grigsby, 11 Stanwix Street, 15th Floor,
Pittsburgh, PA 15222-1319, Phone: (412) 297-4900. Representing
the plaintiffs are:
(1) Eric G. Calhoun, Lawson, Fields, McCue, Lee & Campbell,
14135 Midway Road, Suite 250, Addison, TX 75001, Phone:
(972) 490-0808
(2) Michael E. McCarthy, 2500 Lawyers Building, Pittsburgh,
PA 15219, Phone: (412) 281-1288
(3) R. Hoyt Rowell, III, Ness, Motley, Loadholt, Richardson
& Poole, P.O. Box 1792, Mt. Pleasant, SC 29465, Phone:
(843) 216-9471
LONGS DRUG: CA Court Certifies Lawsuit V. Employee Application
--------------------------------------------------------------
The California Superior Court for San Diego County granted class
certification to the lawsuit filed against Longs Drug Stores
California, Inc., styled "Rankin v. Longs Drug Stores
California, Inc."
The lawsuit was certified as a class action on July 19, 2005 and
alleges that the Company's employment application violates
California Labor Code Section 432.8 by inquiring about criminal
convictions within the last seven years, without providing an
exception for misdemeanor marijuana convictions more than two
years old. The plaintiff seeks to recover statutory damages and
attorneys' fees for him and all similarly situated individuals
who applied for employment with the Company during the class
period.
MEDTRONIC INC.: Faces Litigation Due To Defective Defibrillators
----------------------------------------------------------------
Medtronic, Inc. faces several lawsuits related to its February
2005 recall of a subset of its implantable cardioverter
defibrillators (ICDs) and cardiac resynchronization therapy
defibrillators (CRT-Ds), including certain of the Marquis VR/DR
and Maximo VR/DR ICDs and certain of the InSync I/II/III Marquis
and InSync III CRT-D devices.
On February 11, 2005, the Company voluntarily began advising
physicians about a potential battery shorting mechanism that may
occur in the devices. The Company provided physicians with a
list of potentially affected patients and recommended that
physicians communicate with those patients so they could manage
the potential issue in a manner they felt was appropriate for
their individual patients.
Subsequent to this voluntary field action, later classified by
the FDA as a Class II Recall, putative class actions and
individual actions have been filed against the Company in
various state and federal jurisdictions, including one case in
the United States District Court for the Southern District of
Florida seeking to be consolidated for certain purposes under a
process known as Multi-District Litigation. Additional putative
class actions were also filed in Canada. The complaints
generally allege strict liability, negligence, warranty and
other common law and/or statutory claims; and seek compensatory
and punitive damages. The putative class action complaints also
seek class certification.
As of the date hereof, the Company is unaware of any confirmed
injury or death resulting from a device failure due to the
shorting mechanism that was the subject matter of the field
action, the Company said in a disclosure to the Securities and
Exchange Commission.
MITSUBISHI FUSO: Recalls 1,848 2001-2003 Trucks For Crash Hazard
----------------------------------------------------------------
Mitsubishi Fuso Truck of America, Inc., in cooperation with the
National Highway Traffic Safety Administration's Office of
Defects Investigation (ODI) is voluntarily recalling about 1,848
units of 2001-02 FE640 and 2003 FH210 trucks due to crash
hazard.
According to the ODI, on certain medium duty trucks, the
cylinder head idler gear shaft bolt may have been insufficiently
tightened during initial assembly. Continued operation in this
condition could cause the bolt to loosen, resulting in abnormal
noise from improper gear alignment. The bolt could break,
causing the engine to stall and not restart, increasing the risk
of a crash.
As a remedy dealers will check the idler shaft bolt. If the bolt
cannot be removed by hand, a modified idler shaft bolt will be
installed. If the bolt is loose enough to be removed by hand, a
new idler gear, idler shaft, and a modified idler shaft bolt
will be installed. The recall is expected to begin on December
20, 2005.
For more details, contact Fuso, Phone: 1-856-467-4500 OR the
NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web
site: http://www.safecar.gov.
NEWS CORPORATION: Court Preliminarily OKs NY, DE Investor Suits
---------------------------------------------------------------
The settlement for several consolidated securities class actions
filed in received complaints relating to a number of purported
class actions filed in Delaware and New York Courts, related to
the merger of Fox Entertainment Group, Inc. (FEG) into its
direct wholly-owned subsidiary Fox Acquisition Corporation has
been preliminarily approved
In March 2005, Fox Acquisition completed its offer to the
holders of Class A common stock of FEG to exchange 2.04 shares
of the Company's Class A common stock for each outstanding share
of FEG's Class A common stock validly tendered and not withdrawn
in the exchange offer. Shortly thereafter, the Company effected
a "short form" merger of FEG with and into Fox Acquisition
Corporation. Each share of FEG Class A common stock not
acquired in the Offer, other than the shares owned by the
Company, was converted in the "short form" merger into 2.04
shares of the Company's Class A common stock. The Company issued
approximately 357 million shares of News Corporation's Class A
Common Stock valued at approximately $6.3 billion in exchange
for the outstanding FEG Class A common shares. After the
consummation of the offer and the subsequent merger, Fox
Acquisition Corp changed its name to "Fox Entertainment Group,
Inc." As a result of the Offer, the Company's ownership
interest increased from approximately 82% to 100%.
Several suits were initially filed in the Court of Chancery in
the State of Delaware. The complaints generally allege, among
other things, that the Company and the members of the FEG board
of directors have breached fiduciary duties owed to the public
stockholders of FEG, including as a result of News Corporation
offering to acquire shares of FEG Class A common stock at an
unfair price and at a time that disadvantages the FEG
stockholders. The complaints generally seek declaratory and
injunctive relief and damages in an unspecified amount.
The Company is currently aware of 17 purported class action
complaints that were filed in January 2005 at the Court of
Chancery of the State of Delaware challenging the FEG Offer. The
Delaware complaints are captioned:
(1) Allen v. News Corp., et al., No. 979-N;
(2) Mascarenhas v. Fox Entertainment Group, et al., No.
980-N;
(3) Shemesh v. Fox Entertainment Group, et al., No. 981-N;
(4) Striffler v. FEG Holdings, et al., No. 982-N;
(5) Howard Vogel Ret. Plan v. Powers, et al., No. 984-N;
(6) Doniger v. News Corp., et al., No. 985-N;
(7) Engle v. Murdoch, et al., No. 986-N;
(8) Shrank v. Murdoch, et al., No. 988-N;
(9) Blackman v. Fox Entertainment Group, et al., No. 991-N;
(10) Fishbone v. News Corp., et al., No. 994-N;
(11) Kennel v. News Corp., et al., No. 995-N;
(12) Millner v. News Corp., et al., No. 996-N;
(13) Pipefitters Locals v. Fox Entertainment Group, et al.,
No. 1003-N;
(14) Molinari v. News Corp., et al., C.A. No. 1018-N;
(15) Seaview Services v. Fox Entertainment, et al., C.A. No.
1026-N;
(16) Teachers' Retirement System of Louisiana v. Powers, et
al., C.A. No. 1033-N; and
(17) New Jersey Building Laborers' Pension Fund v. Powers,
et al., C.A. No. 1034.
The Shrank action, No. 988-N, was voluntarily dismissed on
January 19, 2005.
The Company is also currently aware of two purported class
action complaints raising substantially similar claims that have
been filed in the Supreme Court of the State of New York, County
of New York, and one that has been filed in the US District
Court for the Southern District of New York, which were filed in
January 2005. The New York complaints are captioned: "Shrank v.
Murdoch, et al., Index No. 600114/2005;" and "Green Meadows Ptr.
v. Fox Entertainment, et al., No. 100706/2005." The US Southern
District of New York complaint is captioned "Gary Kosseff v. Fox
Entertainment Group, Inc., et. al., No. 05 Civ. 1942 (LLS)."
On January 21, 2005, certain plaintiffs in the Delaware lawsuits
filed a motion that seeks to consolidate the Delaware actions.
In addition, the Company has filed motions to dismiss and to
stay discovery, and the plaintiffs have filed a motion for
expedited proceedings. On February 3, 2005, the Court of
Chancery denied the Company's motion to stay discovery, and
granted the plaintiffs' motion for expedited discovery and
motion to consolidate. The consolidated Delaware complaint was
styled "In re Fox Entertainment Group, Inc. Shareholders
Litigation, Consol. C.A. No. 1033-N."
Each of the consolidated Delaware complaint and the New York
Supreme Court complaints generally alleges, among other things,
that News Corporation and the members of the FEG board of
directors purportedly breached fiduciary duties owed to the
public stockholders of FEG in connection with the FEG Offer by:
(i) offering to acquire their shares at an unfair price;
(ii) offering to acquire their shares at a time that
disadvantages the public stockholders;
(iii) having FEG appoint directors who are neither
independent nor disinterested to a special committee
created to consider the FEG Offer; and
(iv) failing to adequately disclose information material to
the FEG Offer, including disclosure with respect to the
FEG 2005 budget.
The US Southern District of New York complaint also generally
alleges, among other things, some of the foregoing matters. The
plaintiffs filed an amended complaint on February 24, 2005 in
the US Southern District of New York alleging violations of the
federal securities laws in addition to the foregoing matters. On
February 24, 2005, the US Southern District of New York denied
the plaintiffs' motion for expedited proceedings. As for
relief, the plaintiffs seek, among other things, an order that
the complaints are properly maintainable as a class action; a
declaration that defendants have breached their fiduciary duties
and other duties to the plaintiffs and other members of the
purported class; injunctive relief; unspecified monetary
damages; attorneys' fees, costs and expenses; and such other and
further relief as the Court may deem just and proper.
A memorandum of understanding setting forth the terms of a
settlement with respect to the aforementioned litigation was
entered into by the plaintiffs and the named defendants as of
March 2, 2005. Among other conditions, the settlement is
subject to negotiation of final settlement documentation,
confirmatory discovery by the plaintiffs, court approval of the
settlement and dismissal with prejudice of the litigation. On
June 15, 2005, the parties entered into a stipulation of
settlement in the consolidated Delaware action. In an Order
dated June 23, 2005, the Chancellor, among other things,
(i) preliminarily approved the stipulation of settlement;
(ii) preliminarily certified the class for settlement
purposes; and
(iii) set a hearing for September 19, 2005
Among other conditions, the settlement is subject to final court
approval of the settlement and dismissal with prejudice of the
litigation.
NEWS CORPORATION: Plaintiffs Appeal DE Investor Suit Dismissal
--------------------------------------------------------------
Plaintiffs appealed the Court of Chancery of the State of
Delaware's ruling dismissing the consolidated class action filed
against The News Corporation Limitied (TNCL), predecessor of
News Corporation, styled "In re General Motors (Hughes)
Shareholders Litigation, Consolidated Civil Action No. 20269-
NC."
The lawsuit relates to TNCL's acquisition of stock in Hughes
Electronics Corporation (DirecTV) on December 22, 2003, which
was subsequently transferred to the Fox Entertainment Group
(FEG). The complaint alleges that TNCL aided and abetted an
alleged breach of fiduciary duty by the Board of Directors of
Gemstar (GM) allegedly owed to a class of certain GM
shareholders. The plaintiffs allegedly seek "appropriate
equitable relief" including rescissory remedies to the extent
feasible.
On August 30, 2004, TNCL filed a brief in support of its motion
to dismiss the complaint. On October 18, 2004, the plaintiffs
filed their opposition to the motion. The Company filed its
reply on November 17, 2004. The oral argument was heard on March
7, 2005. On May 4, 2005, the court issued its decision granting
the motion to dismiss. Plaintiffs have appealed the decision
and the Company has cross-appealed on jurisdictional and
improper service issues.
NORDSTROM INC.: Plaintiffs Appeal CA Court Settlement Approval
--------------------------------------------------------------
The United States District Court for the Northern District of
California has yet to decide on final approval for the
settlement of the antitrust class action filed against
Nordstrom, Inc. and other department store and specialty
retailers.
Nine separate but virtually identical class action lawsuits were
initially filed in various Superior Courts of the State of
California in May, June and July 1998, and later consolidated in
Marin County Superior Court in California. In May 2000,
plaintiffs filed an amended complaint naming a number of
manufacturers of cosmetics and fragrances and two other
retailers as additional defendants.
Plaintiffs' amended complaint alleges that the retail price of
the "prestige" or "Department Store" cosmetics sold in
department and specialty stores was collusively controlled by
the retailer and manufacturer defendants in violation of the
Cartwright Act and the California Unfair Competition Act.
Plaintiffs seek treble damages and restitution in an unspecified
amount, attorneys' fees and prejudgment interest, on behalf of a
class of all California residents who purchased cosmetics and
fragrances for personal use from any of the defendants during
the four years prior to the filing of the amended complaint.
Defendants, including the Company, have answered the amended
complaint denying the allegations. The defendants have produced
documents and responded to plaintiffs' other discovery requests,
including providing witnesses for depositions.
The Company entered into a settlement agreement with the
plaintiffs and the other defendants on July 13, 2003. In
furtherance of the settlement agreement, the case was re-filed
in the United States District Court for the Northern District of
California on behalf of a class of all persons who currently
reside in the United States and who purchased "Department Store"
cosmetics from the defendants during the period May 29, 1994
through July 16, 2003. The Court has given preliminary approval
to the settlement. A summary notice of class certification and
the terms of the settlement was disseminated to class members.
On March 30, 2005, the Court entered a final judgment approving
the settlement and dismissing the plaintiffs' claims and the
claims of all class members with prejudice, in their entirety.
On April 29, 2005, two class members who had objected to the
settlement filed notices of appeal from the Court's final
judgment to the United States Court of Appeals for the Ninth
Circuit. It is uncertain when the appeals will be resolved, but
the appeal process could take as much as two years or more. If
the Court's final judgment approving the settlement is affirmed
on appeal, or the appeals are dismissed, the defendants will
provide class members with certain free products and pay the
plaintiffs' attorneys' fees, awarded by the Court of $24
million.
The suit is styled "Azizian et al v. Federated Department
Stores, Inc. et al, case no. 4:03-cv-03359," filed in the United
States District Court for the Northern District of California,
under Judge Saundra Brown Armstrong. Representing the
plaintiffs is Guido Saveri of Saveri & Saveri, Inc., 111 Pine
Street, Suite 1700, San Francisco, CA 94111-5630, Phone:
415-217-6810, Fax: 415-217-6813, E-mail: guido@saveri.com.
Representing the Company is Larry S. Gangnes, 1420 Fifth Avenue,
Ste. 4100, Seattle, WA 98101-2338, Phone: (206) 223-7036, E-
mail: gangnesl@lanepowell.com.
ODYSSEUS MARKETING: FTC Seeks Halt To Spyware, Adware Operation
---------------------------------------------------------------
The Federal Trade Commission asked a U.S. District Court judge
to halt an operation that secretly installed spyware and adware
that could not be uninstalled by the consumers whose computers
it infected. The defendants used the lure of free software they
claimed would make peer-to-peer file sharing anonymous. The
agency alleges the stealthy downloads violate federal law and
asked the court to order a permanent halt to them.
According to the complaint filed by the FTC, Odysseus Marketing
and its principal, Walter Rines, advertised software they
claimed would allow consumers to engage in peer-to-peer file
sharing anonymously. With claims like "DOWNLOAD MUSIC WITHOUT
FEAR," and "DON'T LET THE RECORD COMPANIES WIN," the defendants
encouraged consumers to download their free software. The agency
charges that the claims are bogus. First, the software does not
make file-sharing anonymous. Second, the cost to consumers is
considerable because the "free" software is bundled with spyware
called Clientman that secretly downloads dozens of other
software programs, degrading consumers' computer performance and
memory. Among other things, this accumulated software replaces
or reformats search engine results. For example, consumers who
downloaded the spyware may try to conduct a Google or Yahoo!
search. Their screens will reveal a page that appears to be the
Google or Yahoo! search engine result, but the page is a copy-
cat site, and the order of the search results is rigged to place
the defendants' clients first. The bundled software programs
also generate pop-up ads and capture and transmit information
from the consumers' computers to servers controlled by the
defendants.
The FTC charged that the defendants have an obligation to
disclose that their "free" software download caused spyware and
adware to be installed on consumers' computers. But instead, the
FTC alleges, they hide their disclosure in the middle of a two-
page end-user licensing agreement buried in the "Terms and
Conditions" section of their Web site. In addition, the FTC
alleges that the defendants deliberately make their software
difficult to detect and impossible to remove using standard
software utilities. Although the defendants purport to offer
their own "uninstall" tool, it does not work. In fact, it
installs additional software, according to the FTC's complaint.
The FTC charges that the practices of Odysseus Marketing and
Walter Rines are unfair and deceptive and violate the FTC Act.
The agency will seek a permanent halt to the practices. The
defendants are based in Stratham, New Hampshire.
The Commission vote to authorize staff to file the complaint was
4-0. The complaint was filed in the U.S. District Court for the
District of New Hampshire.
Copies of the complaint 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, DC
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 Laura
Sullivan, Bureau of Consumer Protection by Phone: 202-326-3327
or visit the Website:
http://www.ftc.gov/opa/2005/10/odysseus.htm.
OHIO: Judge Certifies Consumer Fraud Suit V. Cincinnati Bengals
---------------------------------------------------------------
Hamilton County Common Pleas Judge Robert Ruehlman granted class
action status to a lawsuit by Cincinnati Bengals fans, which
claim that the team improperly refused to allow them to cancel
their season tickets, The Associated Press reports.
In essence, Judge Ruehlman's ruling allows anyone who purchased
tickets based on a 1997 brochure to join the lawsuit, which
could end up including as many as 3,000 people. Aside from
granting class action status, the judge also dismissed lawsuits
filed by the Bengals against some people who stopped paying for
their tickets.
Attorney Janet Abaray, who represents six people who brought the
lawsuit against the Bengals last year, alleging unfair consumer
practices told The Associated Press, "This has been very
stressful for the people involved, particularly for class
representatives who had counterclaims brought against them. This
is a huge relief to them."
Ms. Abaray also told The Associated Press that a class action
lawsuit against the team would seek compensation, payment for
emotional distress and punitive damages.
The ticket dispute involves fans who bought seat licenses sold
to raise money for construction of the new Paul Brown Stadium,
which had opened in 2000, based on the brochure, which allowed
buyers to lock in prices for six, eight or 10 years. Fans signed
an agreement acknowledging they gave up their seat license if
they stopped buying tickets. However, a second document that
arrived with the seat assignments stated that the fans were
obligated to keep buying tickets through the full term of the
license, and that disputes must go to arbitration, an earlier
Class Action Reporter story (September 29, 2005) reports.
The fans eventually sued the team after it sent them letters
threatening to turn their cases over to collections agencies,
which they said could jeopardize their credit ratings. The
Bengals were trying to collect a total of $5.8 million,
according to Ms. Abaray. She pointed out, "This is not a trivial
amount of money. The Bengals are strong-arming people to collect
the money," an earlier Class Action Reporter story (September
29, 2005) reports.
The Ohio Supreme Court refused in April to hear an appeal of a
decision by the 1st Ohio District Court of Appeals, which said
Judge Ruehlman erred when he upheld the Bengals' position that
the dispute had to go to arbitration. The decision allowed the
lawsuit to go forward, an earlier Class Action Reporter story
(September 29, 2005) reports.
OKLAHOMA: Court Reverses Certification For Grand Lake Lawsuit
-------------------------------------------------------------
The Oklahoma Court of Civil Appeals reversed a lower court's
decision to grant class action status to a lawsuit over water
quality in Grand Lake O' The Cherokees near Tulsa, The
Springdale Morning News reports. The court's ruling means that
any relief to individual property owners will be based on the
impact, if any, of the poultry companies alleged pollution on
individual properties.
Janet Wilkerson, a spokeswoman for the poultry companies told
The Springdale Morning News that excessive nutrients in the
rivers and streams entering lakes in eastern Oklahoma is "a
complex issue that must be addressed with specific evidence as
opposed to sweeping accusations and generalizations like the
ones made in this lawsuit."
Earl Hatley, Grand Riverkeeper in Oklahoma and part of the
Waterkeepers group founded by Robert F. Kennedy Jr., contends
though, "If the court isn't going to accept a class action, how
do you deal with the issue."
Charles Shipley, a Tulsa environmental attorney, initiated a
lawsuit against Arkansas companies Tyson Foods Inc., Simmons
Foods Inc. and Peterson Farms Inc. in 2001 on behalf of four
property owners around Grand Lake. The suit claims that poultry
litter polluted the lake and other poultry waste entering the
streams and rivers in Missouri that feed Grand Lake in Oklahoma.
Even with the legal setback, Mr. Shipley told The Springdale
Morning News that the decision could be appealed to the Oklahoma
Supreme Court, or hundreds of individual lawsuits could be filed
against the companies.
ORCA BAY: Recalls Crab Legs, Claws Due to Listeria Contamination
----------------------------------------------------------------
Orca Bay Foods, Inc. of Renton, Washington is conducting a
nationwide voluntary recall of approximately 40,000 pounds of
"red king crab legs and claws" because they have the potential
to be contaminated with Listeria monocytogenes, an organism
which can cause serious and sometimes fatal infections in young
children, elderly people, and immuno-compromised individuals.
Healthy individuals may suffer only short-term symptoms (fever,
headaches, stiffness, nausea, abdominal pain and diarrhea).
Listeria infection can cause miscarriages and stillbirths among
pregnant women. If persons recently consumed this product and
experienced the listed symptoms they should visit their
physician.
No Illnesses have been reported to date in connection with this
problem.
The frozen crab legs were sold to retailers and food service in
10 and 20 lb cases labeled "Orca Bay Seafood's, Inc. Renton, WA
98055". Each case was marked with a size, either "4-6", "6-9",
"9-12", "12-14" or "selects", "broiler claws", and "splits". The
product is sold thawed and/or frozen by weight in the frozen
food and/or seafood departments in stores.
The recalled crab legs were distributed retail in Florida,
Illinois, New York, North Carolina, through Sam's Club; Indiana
through Roundy's; New Jersey through Shop-Rite (Wakefern), New
York through Wegmans, Michigan through Spartan; Washington State
through Associated Grocers, City Fish, Jack's Fish Spot &
Metropolitan Markets. The product also entered commerce through
food service distributors in Alaska, California, Colorado,
Florida, Georgia, Hawaii, Illinois, Indiana, Massachusetts,
Maryland, Michigan, Mississippi, Nebraska, Nevada, New Mexico,
New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania,
Tennessee, Utah, Washington State and Wisconsin. The recalled
product would have been in retail outlets on/about May 20, 2005
through August 10, 2005, however the majority of the suspect
product is under our direct control in the Renton, WA processing
facility.
Consumers who have purchased red king crab legs during the
specified time period from the retail stores identified are
urged to return them to the place of purchase for a full refund.
Consumers with questions may contact the company at
1-800-932-ORCA.
The potential for contamination was noted after routine testing
by the United States Department of Commerce (USDC) revealed the
presence of Listeria monocytogenes in our bulk crab legs and
claws. Orca Bay retains the USDC for this inspection service to
give our customers added assurance through an independent
evaluation.
The distribution of the suspect product lots has been suspended
which FDA and the company continues to investigate the source of
the problem.
PANTRY INC.: Plaintiffs Seek Remand of NC Lawsuit To State Court
----------------------------------------------------------------
Plaintiffs asked the United States District Court for the Middle
District of North Carolina to remand amended class action
against Pantry, Inc. in the, styled "Constance Barton, Kimberly
Clark, Wesley Clark, Tracie Hunt, Eleanor Walters, Karen
Meredith, Gilbert Breeden, LaCentia Thompson, and Mathesia
Peterson, on behalf of themselves and on behalf of classes of
those similarly situated vs. The Pantry, Inc.," to state court.
The suit, filed in June 2004, seeks class action status and
asserts claims on behalf of the Company's North Carolina present
and former employees for unpaid wages under North Carolina Wage
and Hour laws. The suit also seeks an injunction against any
unlawful practices, damages, liquidated damages, costs and
attorneys' fees.
The suit originally was filed in the Superior Court for Forsyth
County, State of North Carolina. On August 17, 2004, the case
was removed to the United States District Court for the Middle
District of North Carolina and on July 18, 2005, plaintiffs
filed an Amended Complaint asserting certain additional claims
under the federal Fair Labor Standards Act on behalf of present
and former store employees in the southeastern United States and
adding one additional named plaintiff, Chester Charneski.
The Plaintiffs have filed a motion to remand the case to the
Superior Court for Forsyth County, which is presently pending
before the federal district court.
The suit is styled "BARTON, et al v. THE PANTRY, INC., case no.
1:04-cv-00748-NCT," filed in the United States District Court
for the Middle District of North Carolina, under Judge N.C.
Tilley, Jr. Representing the plaintiffs are Robert M. Elliot
and J. Griffin Morgan of ELLIOT PISHKO MORGAN, P.A., 426 Old
Salem Road, Winston-Salem, NC 27101, Phone: 336-724-2828, Fax:
336-714-4499, E-mail: rmelliot@epmlaw.com; and Charles Joseph,
JOSEPH & HERZFELD, LLP, 757 Third Ave., 25th Floor, New York, NY
10017, Phone: 212-688-5640. Representing the Company are
Kimberly Jo Korando, Kirk Alan Parry, Jr., Carl N. Patterson,
Kerry A. Shad, Donald Hugh Tucker, SMITH ANDERSON BLOUNT DORSETT
MITCHELL & JERNIGAN, POB 2611, Raleigh NC 27602-2611, Phone:
919-821-6671, Fax: 919-821-6800, E-mail: kkorando@smithlaw.com,
aparry@smithlaw.com, cpatterson@smithlaw.com,
kshad@smithlaw.com, dtucker@smithlaw.com.
READER'S DIGEST: Working To Resolve Shareholder Fraud Lawsuits
--------------------------------------------------------------
Reader's Digest Association, Inc. is working to resolve four
legal actions commenced against it, its directors and the DeWitt
Wallace-Reader's Digest Fund, Inc. and the Lila Wallace-Reader's
Digest Fund, Inc. (the Funds), challenging the original
recapitalization transaction announced in April 2002. Three of
the four actions were purported class actions. The fourth action
was brought by individual stockholders.
On October 15, 2002, the Company entered into a revised
agreement with the providing for a series of actions that
resulted in all shares of its Class B Voting Common Stock (Class
B Stock) and Class A Nonvoting Common Stock (Class A Stock)
being recapitalized into a single class of Common Stock with one
vote per share. The October 15, 2002 recapitalization agreement
replaced the recapitalization agreement that the Company entered
into with the Funds on April 12, 2002. The transactions
contemplated by the October recapitalization agreement were
completed on December 13, 2002. As a result:
(1) the Company repurchased approximately 4.6 million
shares of Class B Stock from the Funds for $100.0 in
cash in the aggregate;
(2) each share of Class A Stock was recapitalized into one
share of Common Stock having one vote per share;
(3) Each remaining share of Class B Stock was recapitalized
into 1.22 shares of Common Stock;
(4) the Company amended its charter to, among other things,
reflect the reclassification of the stock, divide its
Board of Directors into three classes and eliminate
action by written consent of its stockholders; and
(5) the Company reclassified as long-term debt the $100.0
borrowed under the Term Loan Agreement on May 20, 2002
to repurchase stock.
On June 30, 2002, the $100.0 was classified as short-term debt
pending completion of the recapitalization transactions.
The parties in two of the three class actions, which were
brought on behalf of holders of Class B Stock, entered into a
settlement agreement, subject to court approval, with respect to
the settlement of those actions. The third class action, which
was brought on behalf of holders of Class A Stock, was dismissed
with prejudice by the Court of Chancery of the State of Delaware
pursuant to a comprehensive settlement agreement that was
approved by the Court of Chancery on February 12, 2003. The
fourth action was voluntarily dismissed.
RESIDENTIAL FUNDING: Appeals Court Dismisses Claims in IL Suit
--------------------------------------------------------------
The United States Seventh Circuit Court of Appeals dismissed
several claims in the class action filed against Residential
Funding Corporation, alleging violations of the Illinois
Interest Act.
The suit was filed in October 2003 in the United States District
Court for the Southern District of Illinois, alleging that the
originator of the mortgage loan at issue, Mortgage Capital
Resources, violated the Illinois Interest Act by assessing fees
that were impermissible and unreasonable, and the plaintiffs
seek two times the amount of interest, discount and charges
assessed the borrowers. In addition, plaintiffs allege the
excessive fees caused finance charges to be understated and they
seek to rescind the mortgage loans under the Truth in Lending
Act. Plaintiffs are attempting to hold the Company liable as the
assignee of the mortgage loans, seeking a nationwide class,
exclusive of Missouri.
The Company filed a motion to dismiss the suit asserting that,
among other things, plaintiffs' claim under the Illinois
Interest Act was impliedly repealed by a subsequent amendment to
this statute. Although the trial court denied this motion, the
U.S. Court of Appeals for the Seventh Circuit reversed this
denial and granted the motion to dismiss with regard to the
Illinois Interest Act claims. The trial court subsequently
denied class certification with regard to the remaining claims.
The suit is styled "Reiser, et al v. Residential Funding
Corporation, case no. 3:03-cv-00619-DRH," filed in the United
States District Court for the Southern District of Illinois,
under Judge David R. Herndon. Representing the plaintiffs are
Eric G. Calhoun of Lawson, Fields et al., Generally Admitted,
14135 Midway Road, Suite 250 Addison, TX 75001, Phone:
972-490-0808, E-mail: ecalhoun@lfclaw.com; and Richard J.
Pradarits, Jr., Attorney at Law, 14135 Midway Rd., Suite 250,
Addison, TX 75001, Phone: 972-490-0808, Fax: 972-490-9545, E-
mail: rpradarits@lfclaw.com. Representing the Company are
Thomas L. Allen, Roy W. Arnold, Nina M. Faber, and Peter J.
Kennedy of Reed Smith, 435 Sixth Avenue, Pittsburgh, PA 15219-
1886, Phone: 412-288-3169, E-mail: tallen@reedsmith.com,
rarnold@reedsmith.com, nfaber@reedsmith.com, and
pkennedy@reedsmith.com; and Richard K. Hunsaker, Robert H.
Shultz, Jr. and James A. Telthorst, Heyl, Royster et al. -
Edwardsville, Generally Admitted, 103 West Vandalia Street, P.O.
Box 467, Edwardsville, IL 62025, Phone: 618-656-4646, E-mail:
rhunsaker@hrva.com, rshultz@hrva.com, jtelthorst@hrva.com.
RESIDENTIAL FUNDING: IL Court Nixes Stay of Interest Act Lawsuit
----------------------------------------------------------------
The Circuit Court of St. Clair County in Illinois refused to
stay the class action filed against Residential Funding
Corporation.
This case asserts the identical Illinois Interest Act claims
alleged in "Reiser, et al v. Residential Funding Corporation,
case no. 3:03-cv-00619-DRH," filed in the United States District
Court for the Southern District of Illinois, but in state rather
than federal court. Specifically, this statewide class action
lawsuit alleges that all loans originated by Mortgage Capital
Resources in Illinois violate the Illinois Interest Act and
Illinois Consumer Fraud Act. Plaintiffs seek damages from the
Company as the assignee of the loans, in the amount of two times
the amount of interest payable over the life of the loans, plus
all fees and charges assessed to the borrowers.
In August 2004, the trial court granted class certification. In
light of the decision in the "Reiser" case, and the pendency of
"Clark" case at the Illinois Supreme Court, the Company sought a
stay of the suit until the Illinois Supreme Court has ruled in
"Clark," a motion which the court denied.
RESIDENTIAL LOAN: IL Consumer Fraud, Interest Act Lawsuit Stayed
----------------------------------------------------------------
The Circuit Court of Cook County, Illinois stayed the putative
statewide class action filed against Residential Loan Centers of
America, alleging violations of the Illinois Interest Act and
the Illinois Consumer Fraud Act.
The putative statewide class action was filed in July 2004.
Plaintiffs allege that the Company violated the Illinois
Interest Act and Illinois Consumer Fraud Act on first-lien loans
originated with interest rates exceeding 8% when it assessed
fees and charges on such loans in excess of 3% of the loan
amount. Plaintiffs seek damages in the amount of two times the
amount of interest payable over the life of the loans, plus all
fees and charges.
The Company asserts that it relied on federal law to preempt the
Illinois Interest Act at the time of origination. This case has
been stayed until the Illinois Supreme Court renders a decision
in a similar lawsuit.
SARA LEE: Seeks Review of Refusal To Dismiss IL Securities Suit
---------------------------------------------------------------
The United States District Court for the Northern District of
Illinois, Eastern Division refused to review its ruling,
refusing to dismiss the consolidated securities class action
filed against Sara Lee Corporation and:
(1) C. Steve McMillain, chairman, president and chief
executive officer
(2) Lambertus M. de Kool, Executive vice president and
chief financial officer
John Gallo, a purported Sara Lee stockholder, filed a putative
class action lawsuit in the United States District Court for the
Northern District of Illinois, Eastern Division, on May 13, 2003
on behalf of purchasers of Sara Lee common stock between and
including August 1, 2002 and April 24, 2003. The plaintiff
sought, among other things, class action certification,
compensatory damages in an unspecified amount, and an award of
costs and expenses, including counsel fees. Seven other
putative class action lawsuits were filed in the same court
against the same defendants. The allegations in each of those
complaints are substantially similar to the allegations of
the lawsuit described in the immediately preceding paragraph.
Each of the foregoing actions has been consolidated in a single
proceeding, styled "In re Sara Lee Corp. Securities Litigation."
On January 20, 2004, plaintiffs filed a consolidated amended
complaint. The consolidated amended complaint contains
allegations that the defendants violated Sections 10(b) and
20(a) of the United States Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder by allegedly misstating or
omitting material adverse facts regarding Sara Lee's business,
operations, management and financial statements, and the value
of Sara Lee common stock, which allegedly enabled Sara Lee to
complete securities offerings, enabled the individual defendants
to increase their bonus compensation and caused the purported
class to purchase Sara Lee common stock at artificially inflated
prices.
On March 5, 2004, Sara Lee filed a motion to dismiss the
consolidated amended complaint, and on December 21, 2004, Sara
Lee's motion to dismiss was denied. The Company moved to take
an immediate appeal from that ruling, but was denied on May 26,
2005. On June 30, 2005, Sara Lee filed its answer to the
complaint, denying all allegations of wrongdoing. Discovery has
commenced and is in its initial stages.
The suit is styled "In re Sara Lee Corporation Securities
Litigation, case no. 1:03-cv-03202," filed in the United States
District Court for the Northern District of Illinois, Eastern
Division, under Judge Charles R. Norgle, Sr.
Law firm for the defendants is Jenner & Block, LLC, One IBM
Plaza, 330 North Wabash Avenue, 40th Floor, Chicago, IL 60611,
Phone: (312)-222-9350. The plaintiff firms in this litigation
are:
(1) Ademi & O'Reilly, LLP, 3181 South 27th Street,
Milwaukee, WI, 53215, Phone: 866.264.3995, Fax:
414.482.8001, E-mail: inquiry@ademilaw.com
(2) Bull & Lifshitz, 18 East 41st St., New York, NY, 10017,
Phone: 212.213.6222, Fax: 212.213.9405,
(3) Cauley Geller Bowman Coates & Rudman, LLP (New York),
200 Broadhollow, Suite 406, Melville, NY, 11747, Phone:
631.367.7100, Fax: 631.367.1173,
(4) Chitwood & Harley, 1230 Peachtree Street, N.E., 2900
Promenade II, Atlanta, GA, 30309, Phone: 888.873.3999,
(5) Faruqi & Faruqi LLP, 320 East 39th Street, New York,
NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E-
mail: Nfaruqi@faruqilaw.com
(6) Glancy and Binkow, 1801 Avenue of the Stars, suite 311,
Los Angeles, CA, 90067, Phone: 310-201-9150, E-mail:
info@glancylaw.com
(7) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(8) Much Shelist Freed Denenberg Ament & Rubenstein, PC,
Chicago, IL, Phone: 800-470-6824, Fax: 312-621-1750,
(9) Pomerantz,Haudek, Block, Grossman & Gross, 100 Park
Avenue, 26th Floor, New York, NY, 10017-5516,
212.661.1100,
(10) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New
York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com
SECURITY CAPITAL: Plaintiffs Seek Documents Related To DE Suit
--------------------------------------------------------------
Plaintiffs have submitted their initial request for the
production of documents related to the consolidated class action
filed against Security Capital Corporation in the Court of
Chancery of the State of Delaware, in and for New Castle County.
The suit was filed in connection with an offer made by Brian
Fitzgerald, the Chairman of the Company's Board of Directors,
President and Chief Executive Officer, and, through Capital
Partners, the controlling person of the Company's majority
stockholder, CP Acquisition, L.P. No. 1 (CPI), to acquire by
merger all of the outstanding Class A Common Stock and Common
Stock of Security Capital, other than shares held by Mr.
Fitzgerald, Capital Partners, CPI and certain other persons, at
a price of $9.00 per share.
Three complaints were initially filed, also naming as defendants
each then-member of its Board of Directors and CPI. Each of the
complaints allege that the defendants breached their fiduciary
duties to the putative class and that the then-proposed Initial
Capital Partners Offer was unfair, inadequate and not the result
of arm's-length negotiations. Each complaint sought an
injunction against the proposed merger or, if the merger was
consummated, the rescission of the merger, as well as money
damages, attorneys' fees, expenses and other relief. The Court
issued an order of consolidation, consolidating the three
complaints into one class action.
Mr. Fitzgerald and Capital Partners have increased their offer
to $10.60 per share, and offers to acquire the entire Company
for $11.00 and $13.00 per share have been submitted by others.
In addition, on June 7, 2005, the Company announced that it had
retained UBS Securities LLC to conduct a formal sale process for
the Company, and that Mr. Fitzgerald and Capital Partners have
declared their full support for that sale process and committed
to sell the shares they control if appropriate value is achieved
in the transaction.
SERAGEN INC.: Lawsuit Settlement Hearing Set November 2, 2005
-------------------------------------------------------------
The Court of Chancery of the State of Delaware, on and for New
Castle County will hold a fairness hearing for the proposed
settlement in the matter Sergio M. Oliver, et al., v. Boston
University, et al., C.A. No. 16570-NC, filed on behalf of all
holders and beneficial owners of shares of common stock of
Seragen, Inc. on November 4, 1997 and on August 12, 1998.
The hearing will be held before The Honorable Vice Chancellor
Noble, on November 2, 2005 at 2:00 p.m., at the New Castle
County Courthouse, 500 North King St., Wilmington, DE 19801.
For more details, contact Michael A. Weidinger of Morris, James,
Hitchens & Williams, LLP, 222 Delaware Ave., Wilmington, DE
19801, Phone: (302) 888-6995 OR In re Seragen Securities
Litigation, c/o The Garden City Group, Inc., Claims
Administrator, P.O. Box 9000 #6351, Merrick, NY 11566-9000,
Phone: (800) 283-0455.
SUPREME GREENS: Settles FTC False Marketing, Unfair Trade Suit
--------------------------------------------------------------
Three individuals and two companies have settled Federal Trade
Commission charges over their roles in the deceptive marketing
of Supreme Greens, an herbal supplement. The FTC has alleged
that these defendants and others promoted the product for the
prevention, treatment, and cure of cancer, heart disease,
arthritis, and diabetes. They also touted Supreme Greens'
ability to cause substantial weight loss.
In two separate settlement agreements, Supreme Greens developer
Alejandro Guerrero and his company, Health Solutions, Inc. (both
of Upland, California), and Michael Howell (Fontana,
California), Gregory Geremesz (Upland, California) and their
company, Healthy Solutions, LLC (Upland, California), have
agreed not to make false or unsubstantiated claims about the
health benefits, performance, efficacy, or safety of any food,
drug, or dietary supplement. Guerrero will also pay $65,000 or
transfer to the Commission title to his 2004 Cadillac Escalade.
Howell and Geremesz will pay $5,000 and $10,000, respectively,
to the Commission.
In June 2004, the FTC filed a lawsuit in the United States
District Court for the District of Massachusetts alleging that
Direct Marketing Concepts, Inc., ITV Direct, Inc., and their
president, Donald W. Barrett; and Alejandro Guerrero, Michael
Howell, Gregory Geremesz, and their companies, Health Solutions,
Inc., and Healthy Solutions, LLC, had deceptively marketed
Supreme Greens. The Commission also alleged that Direct
Marketing Concepts, Inc., ITV Direct, Inc., and Donald W.
Barrett; and Allen Stern and his companies, Triad ML Marketing,
Inc. and King Media, Inc., had deceptively marketed Coral
Calcium Daily. The Commission subsequently amended its complaint
to name Robert Maihos as an additional liability defendant, and
Lisa Stern, Steven Ritchey, and BP International, Inc. as relief
defendants. (The litigation continues against all of the
defendants other than Guerrero, Howell, Geremesz, and their
companies.)
The original Supreme Greens infomercial ran on cable television
(including the Outdoor Channel and the PAX Television network),
beginning in August 2003. In that infomercial, Guerrero and host
Donald Barrett claimed the product can prevent, treat, and cure
cancer, heart disease, arthritis, and diabetes. They also touted
Supreme Greens as causing substantial weight loss, and claimed
that the product was safe for use by pregnant women, children -
including those as young as one year old - and any person taking
any type of medication.
The settlements announced today prohibit Guerrero, Health
Solutions, Inc., Howell, Geremesz, and Healthy Solutions, LLC
from making the types of claims alleged in the FTC's complaint
for Supreme Greens or any substantially similar product. The
orders also prohibit them from misrepresenting that any dietary
supplement can prevent, treat, or cure any disease, or that
Guerrero is a medical doctor, Doctor of Oriental Medicine, or
Ph.D. In addition, the orders enjoin them from making false or
unsubstantiated health benefit, performance, efficacy, or safety
claims for any food, drug, or dietary supplement. Finally, the
orders prohibit these five defendants from misrepresenting the
existence, contents, validity, results, conclusions, or
interpretations of any test or study, in connection with the
marketing or sale of any food, drug, or dietary supplement.
The Guerrero/Health Solutions, Inc. order provides for judgment
in the amount of $65,000 in favor of the Commission. That
judgment can be satisfied either by a payment of that amount to
the Commission, or by Guerrero transferring to the Commission
free and unencumbered title to his 2004 Cadillac Escalade. The
order also contains a $1.47 million avalanche clause, which will
become due immediately if the court finds that Guerrero or
Health Solutions, Inc. misrepresented their financial condition.
The order also requires them to notify current and future
dietary supplement distributors, resellers, and sales agents of
the settlement, and to stop doing business with them if they use
any of the promotional materials prohibited by the order.
The Howell/Geremesz/Healthy Solutions, LLC order provides for
judgment against Howell in the amount of $5,000, and against
Geremesz in the amount of $10,000. This order also contains a
$2.7 million avalanche clause and a distributor notification
provision. Finally, both orders contain various record-keeping
requirements to assist the FTC in monitoring the defendants'
compliance with the orders.
The Commission vote authorizing staff to file the
Guerrero/Health Solutions, Inc. stipulated final order was 5-0;
the vote authorizing staff to file the Howell/Geremesz/Healthy
Solutions, LLC stipulated final order was also 5-0. Both orders
were filed in the U.S. District Court for the District of
Massachusetts, and they were entered by the Court on September
28, 2005, and September 29, 2005, respectively.
Copies of the stipulated final order are available from the
FTC's Web site at http://www.ftc.govand also from the FTC's
Consumer Response Center, Room 130, 600 Pennsylvania Avenue,
N.W., Washington, D.C. 20580. The FTC works for the consumer to
prevent fraudulent, deceptive, and unfair business practices in
the marketplace and to provide information to help consumers
spot, stop, and avoid them. To file a complaint in English or
Spanish (bilingual counselors are available to take complaints),
or to get free information on any of 150 consumer topics, call
toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint
form at http://www.ftc.gov.The FTC enters Internet,
telemarketing, identity theft, and other fraud-related
complaints into Consumer Sentinel, a secure, online database
available to hundreds of civil and criminal law enforcement
agencies in the U.S. and abroad. For more details, contact
Mitchell Katz, Office of Public Affairs by Phone: 202-326-2161
or Heather Hippsley or Shira Modell, Bureau of Consumer
Protection, by Phone: 202-326-3285 or 202-326-3116 or visit the
Website: http://www.ftc.gov/opa/2005/10/supreme.htm.
WAL-MART STORES: Aiming To Settle Suit As CA Court Hears Appeal
---------------------------------------------------------------
Wal-Mart Stores, Inc. is in settlement talks for the class
action filed against it in the United States District Court for
the Northern District of California, styled "Dukes v. Wal-Mart
Stores, Inc."
The suit was filed in June 2001 on behalf of all past and
present female employees in all of the Company's retail stores
and wholesale clubs in the United States. The complaint alleges
that the Company has engaged in a pattern and practice of
discriminating against women in promotions, pay, training and
job assignments. The complaint seeks, among other things,
injunctive relief, front pay, back pay, punitive damages, and
attorneys' fees.
Following a hearing on class certification on September 24,
2003, on June 21, 2004, the District Court issued an order
granting in part and denying in part the plaintiffs' motion for
class certification. The class, which was certified by the
District Court for purposes of liability, injunctive and
declaratory relief, punitive damages, and lost pay, subject to
certain exceptions, includes all women employed at any Wal-Mart
domestic retail store at any time since December 26, 1998, who
have been or may be subjected to the pay and management track
promotions policies and practices challenged by the plaintiffs.
The class as certified currently includes approximately 1.6
million present and former female Associates.
The Company believes that the Court's ruling is incorrect, the
Company said in a disclosure to the Securities and Exchange
Commission. The United States Court of Appeals for the Ninth
Circuit has granted the Company's petition for discretionary
review of the ruling. The Court of Appeals heard oral argument
from counsel in the case on August 8, 2005. There is no
indication at this time as to when a decision will be rendered.
If the Company is not successful in its appeal of class
certification, or an appellate court issues a ruling that allows
for the certification of a class or classes with a different
size or scope, and if there is a subsequent adverse verdict on
the merits from which there is no successful appeal, or in the
event of a negotiated settlement of the litigation, the
resulting liability could be material to the Company. The
plaintiffs also seek punitive damages which, if awarded, could
result in the payment of additional amounts material to the
Company.
According to a March 14,2005 Class Action Reporter story, the
Company started settlement talks with attorneys for the
plaintiffs in the suit, which has the potential of representing
1.6 million female employees. Settlement talks have been
ongoing for several months and recently gained momentum,
according to The Recorder. Both sides allegedly hired a well-
known class-action mediator, Hunter Hughes III of Atlanta, to
handle the negotiations.
The suit is styled "Dukes et al v. Wal-Mart Stores, Inc., case
no. 3:01-cv-02252," filed in the United States District Court
for the Northern District of California, under Judge Martin J.
Jenkins. Representing the plaintiffs is Brad Seligman of The
Impact Fund, 125 University Avenue, Berkeley, CA 94710, Phone:
510-845-3473 ext 304, Fax: 510-845-3654, E-mail:
bs@impactfund.org. Representing the Company is Nancy L. Abell
of Paul, Hastings, Janofsky & Walker LLP - Employment, 555 South
Flower Street, 25th Floor, Los Angeles, CA 90071-2371, Phone:
213 683-6162, Fax: (213) 627-0705, E-mail:
nancyabell@paulhastings.com.
WAL-MART STORES: Female Employees File Gender Bias Suit in GA
-------------------------------------------------------------
Wal-Mart Stores, Inc. faces a class action filed in the United
States District Court for the Northern District of Georgia,
styled "Mauldin v. Wal-Mart Stores, Inc., alleging gender
discrimination.
The suit was filed on October 16,2001 on behalf of female Wal-
Mart Associates who were participants in the Associates Health
and Welfare Plan at any time from March 8, 2001, to the present
and who were using prescription contraceptives. The class seeks
amendment of the Plan to include coverage for prescription
contraceptives, back pay for all members in the form of
reimbursement of the cost of prescription contraceptives, pre-
judgment interest, and attorneys' fees. The complaint alleges
that the Company's Health Plan violates Title VII's prohibition
against gender discrimination in that the Health Plan's
Reproductive Systems provision does not provide coverage for
prescription contraceptives.
The class was certified on August 23, 2002. On September 30,
2003, the court denied the Company's motion to reconsider that
ruling.
The suit is styled "Mauldin v. Wal-Mart Stores, case no. 1:01-
cv-02755-JEC," filed in the United States District Court for the
Northern District of Georgia, under Judge Julie E. Carnes.
Representing the plaintiffs are:
(1) Kirk E. Chapman, Douglas J. Hoffman, Janine L. Pollack,
Jennifer Templeton Schirmer, Milberg Weiss Bershad &
Schulman, One Pennsylvania Plaza, 48th Floor, New York,
NY 10119-0165, Phone: 212-594-5300
(2) George Albert Stein, Office of George Albert Stein,
1355 Peachtree Street, NE Suite 150, Atlanta, GA 30309,
Phone: 404-881-6500
(3) Sigmund Wissner-Gross, Heller Horowitz & Feit, 292
Madison Avenue, New York, NY 10017, Phone: 212-685-7600
Representing the Company are Mark A. Casciari, Allen William
Groves, Alissa Lipson and Antonia-Anna R. Palmer of Seyfarth
Shaw, 55 East Monroe Street, Suite 4200, Chicago, IL 60603-5803,
Phone: 312-346-8000, E-mail: agroves@seyfarth.com or
apalmer@seyfarth.com.
WAL-MART STORES: Faces EEOC Gender Discrimination Lawsuit in KY
---------------------------------------------------------------
Wal-Mart Stores, Inc. continues to face a lawsuit filed in the
United States District Court for the Eastern District of
Kentucky, styled "EEOC (Janice Smith) v. Wal-Mart Stores, Inc."
The suit brought by the Equal Employment Opportunity Commission
(EEOC) on behalf of Janice Smith and all other females who made
application or transfer requests at the London, Kentucky,
Distribution Center from 1995 to the present, and who were not
hired or transferred into the warehouse positions for which they
applied. The class seeks back pay for those females not selected
for hire or transfer during the relevant time period. The class
also seeks injunctive and prospective affirmative relief. The
complaint alleges that the Company based hiring decisions on
gender in violation of Title VII of the 1964 Civil Rights Act as
amended. The EEOC can maintain this action as a class without
certification.
The suit is styled "EEOC v. Wal-Mart Stores Inc, case no. 3:01-
cv-00065-JMH," filed in the United States District Court for the
Eastern District of Kentucky, under Judge Joseph M. Hood.
Representing the plaintiffs are Michelle Eisele, E. Paige
Freitag, Gwendolyn Young Reams, and Laurie A. Young of the Equal
Employment Opportunity Commission, 101 W. Ohio Street, Suite
1900, Indianapolis, IN 46204-4203, Phone: 317-226-7949, Fax:
317-226-5571. Representing the Company is Kathryn A.
Quesenberry of Woodward, Hobson & Fulton, LLP, 101 S. Fifth
Street, 2500 National City Tower, Louisville, KY 40202, Phone:
502-581-8025, Fax: 502-581-8111, E-mail: kquesenberry@whf-
law.com.
WAL-MART STORES: Faces Several Employee Wage, Overtime Lawsuits
---------------------------------------------------------------
Wal-Mart Stores, Inc. continues to face numerous cases
containing class-action allegations in which the plaintiffs have
brought claims under the Fair Labor Standards Act (FLSA),
corresponding state statutes, or other laws. The plaintiffs in
these lawsuits are current and former hourly Associates who
allege, among other things, that the Company forced them to work
"off the clock," or failed to provide work breaks, or otherwise
claim they were not paid for work performed. The complaints
generally seek unspecified monetary damages, injunctive relief,
or both. Class certification has yet to be addressed in a
majority of the cases.
Class certification has been denied or overturned in cases
pending in Arizona, Arkansas, Florida, Georgia, Indiana,
Louisiana, Maryland, Michigan, Nevada, North Carolina, Ohio,
Texas, West Virginia, and Wisconsin. Some or all of the
requested classes have been certified in cases pending in
California, Colorado, Massachusetts, Minnesota, New Mexico,
Oregon, and Washington. Conditional certifications for notice
purposes under the FLSA have been allowed in cases in Georgia,
Michigan, and Texas.
The Company is a defendant in "Savaglio v. Wal-Mart Stores,
Inc.," a class-action lawsuit in which the plaintiffs allege
that they were not provided meal and rest breaks in accordance
with California law, and seek monetary damages and injunctive
relief. The case is set for jury trial beginning on September 6,
2005, in the Superior Court of Alameda County, California. The
Company believes that it has substantial factual and legal
defenses to the allegations at issue.
A putative class action is pending in California challenging the
methodology of payments made under various Associate incentive
bonus plans, and a second putative class action in California
asserts that the Company has omitted to include bonus payments
in calculating Associates' regular rate of pay for purposes of
determining overtime.
The Company is currently a defendant in four putative class
actions brought on behalf of assistant store managers who
challenge their exempt status under state and federal laws,
which are pending in California, Michigan, New Mexico, and
Tennessee. Conditional certification for notice purposes under
FLSA has been granted in one of these cases (Comer v. Wal-Mart
Stores, Inc.). Otherwise, no determination has been made as to
class certification in any of these cases.
New Securities Fraud Cases
ARBINET-THEXCHANGE: Schiffrin & Barroway Lodges Fraud Suit in NJ
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP, initiated a class
action lawsuit in the United States District Court for the
District of New Jersey on behalf of all securities purchasers of
Arbinet-thexchange, Inc. (Nasdaq: ARBX) ("Arbinet" or the
"Company") who bought pursuant and/or traceable to the Company's
Initial Public Offering ("IPO") on or about December 16, 2004
and between December 16, 2004, and June 21, 2005 inclusive (the
"Class Period").
The complaint charges Arbinet-thexchange, Inc., J. Curt
Hockemeier and John J. Roberts with violations of the Securities
Exchange Act of 1934. More specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts known to defendants or
recklessly disregarded by them:
(1) that Arbinet was experiencing a shorter than average
call duration and a mix shift to wireless calls from
wired calls, which led to a decrease in the average
number of minutes the Company transacted on the
exchange;
(2) that the Company due to credit problems was forced to
suspend trading for two of its largest customers;
(3) that the Company's international offerings were not
adequately differentiated from its competitors, thereby
jeopardizing Arbinet's ability to grow abroad; and
(4) that a result of the foregoing, the defendant's
positive statements about the Company's condition and
progress lacked in all reasonable basis.
On June 21, 2005, Arbinet lowered its guidance for both the
second quarter and all of 2005. On this news, shares of Arbinet
fell $4.00 per share, or 34.78 percent, on June 22, 2005, to
close at $7.50 per share.
For more details, contact Darren J. Check, Esq. or Richard A.
Maniskas, 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.
GENERAL MOTORS: Law Firms Lodge Securities Fraud Suit in S.D. NY
----------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP and the Law Offices
of Avv. Pietro Adami 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 General Motors Corporation ("General
Motors" or the "Company" (NYSE:GM) between February 25, 2002 and
March 16, 2005, inclusive (the "Class Period").
Murray, Frank & Sailer LLP and the Law Offices of Avv. Pietro
Adami are seeking to pursue remedies under the Securities
Exchange Act of 1934 against defendants General Motors, General
Motors Acceptance Corporation, Peter R. Bible, Walter G. Borst,
John M. Devine, and G. Richard Wagoner, Jr.
The complaint alleges that defendants issued or caused to be
issued materially false and misleading statements to the
investing public with respect to the Company's financial
performance and condition during the relevant time.
In addition, the Complaint alleges that during the fourth
quarter of 2004 and the first quarter of 2005, defendants, with
knowledge or reckless disregard of facts then in their
possession, disseminated materially false and misleading
projections with respect to GM's first quarter and year 2005
revenues, earnings, and cash flow. During the Class Period,
defendants capitalized on the advantageous debt ratings assigned
to the Company as a result of defendants' materially false and
misleading statements and omissions, by causing GM to issue more
than $18 billion in debt securities. When the true facts finally
began to come out at the end of the Class Period, the price of
GM stock, which had closed at $32.71 on March 15, 2005, declined
by $4.57 per share, or 14 percent, to close at $28.14 per share
on March 16, 2005. The prices of the Company's debt securities
also declined in the market. Murray, Frank & Sailer LLP and its
predecessor firms have devoted its practice to shareholder class
actions and complex commercial litigation for more than 15 years
and have recovered hundreds of millions of dollars for
shareholders in class actions throughout the United States.
For more details, contact Eric J. Belfi, Christopher S. Hinton
or Bradley 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.
IMMUCOR INC.: Pomerantz Haudek Files Securities Fraud Suit in GA
-------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross, LLP,
initiated a class action lawsuit in the United States District
Court, Northern District of Georgia, Atlanta Division, against
Immucor, Inc. ("Immucor") or the "Company") (Nasdaq:BLUD)
(Nasdaq:BLUDE) and certain of its officers and directors, on
behalf of purchasers of the common stock of Immucor during the
period from January 7, 2005 to August 29, 2005, inclusive (the
"Class Period").
The Complaint alleges that throughout the Class Period,
defendants knowingly or recklessly misrepresented the Company's
prospects, financial results and operations. The Company also
concealed certain internal control problems, all of which caused
the Company's stock price to trade at artificially inflated
prices in violation of Section 10(b) and 20(a) the Securities
Exchange Act of 1934 (the Exchange Act).
The true facts, which were known by the defendants during the
Class Period but concealed from the investing public, were:
(1) the Company lacked requisite internal controls to issue
accurate financial results and projections and to
prevent insider trading violations by its officers and
directors;
(2) the Company lacked the necessary personnel to issue
accurate financial reports and projections; and
(3) the Company's financial statements were presented in
violation of Generally Accepted Accounting Principles
(GAAP").
These false statements caused Immucor stock to trade at
artificially inflated levels during the Class Period, trading as
high as $ 34.98, which allowed top officers to reap millions of
dollars in insider trading proceeds. As the market learned the
true information about Immucor, the inflation caused by
defendants' misrepresentations was removed and the price of
Immucor common stock fell by nearly 13% from its Class Period
high.
On Friday, August 26, 2005, Immucor announced that the SEC had
formalized its probe into payments made by its Italian
subsidiary to people associated with government medical
facilities. The fact that the SEC upgraded its investigation
from an informal inquiry into a formal investigation indicates
the severity of Immucor's actions.
On August 29, 2005, after the market closed, Immucor announced
that it had revised its net income for fiscal 2005 to account
for a previously unrecorded accrual for employee bonuses and
furthermore made an announcement that it had accepted the
resignation of defendant Steven Ramsey from the post of Chief
Financial Officer.
On this news, Immucor's stock collapsed to as low as $22.67 per
share before closing at $24 per share on a staggering volume of
6.2 million shares. This volume is nearly ten times the average
daily volume, wherein the average trading volume in Immucor
common stock over the previous three months was 791,802 shares.
For more details, contact Teresa Webb or Carolyn S. Moskowitz of
Pomerantz Haudek Block Grossman & Gross, LLP, Phone:
(888) 476-6529, E-mail: tlwebb@pomlaw.com or
csmoskowitz@pomlaw.com.
SPECTRUM BRANDS: Bruce G. Murphy Lodges Securities Suit in GA
-------------------------------------------------------------
The Law Offices of Bruce G. Murphy initiated a class action
lawsuit on behalf of all persons who purchased or otherwise
acquired the securities of Spectrum Brands, Inc. ("Spectrum
Brands" or the "Company") between January 4, 2005 and September
6, 2005, inclusive (the "Class Period"), and sustained damages.
The action is pending in the United States District Court for
the Northern District of Georgia against the Company, and
certain of its former officers and directors. According to the
complaint, defendants violated sections 10(b) and 20(a) of the
Exchange Act, and Rule 10b-5, by issuing a series of material
misrepresentations to the market during the Class Period.
The complaint alleges that throughout the Class Period,
defendants were well aware that the Company's growth model
depended upon strong and consistent sales of its core battery
products, while at the same time acquiring and integrating
diversified brands. Accordingly, throughout the Class Period,
defendants consistently represented
(1) that the Company was growing through acquisitions and
diversifying revenues while maintaining sales of
existing products and leveraging existing brands;
(2) that the combination of Rayovac and United presented a
"compelling value proposition";
(3) that management of the Company had an outstanding track
record for successfully integrating acquired brands
"while maintaining marketplace momentum" of its legacy
brands;
(4) that defendants were able to drive revenue growth of
its core brands by cross selling its legacy products to
accounts acquired through acquisitions;
(5) that the representations and warranties contained in
the United Merger Agreement were true and accurate at
all relevant times;
(6) that the Company was achieving "record" sales during
the Class Period with double-digit increases in battery
sales, "exceptional performance" across the board and
with integrations proceeding according to plan; and
(7) that by the end of the Class Period the integration of
United was substantially complete and also proceeding
according to plan.
The representations concerning defendants' ability to acquire
and integrate diverse brands such as United and Tetra, while
maintaining robust sales of its core battery products, were
either patently untrue, or Defendants recklessly disregarded the
Company's true operational and financial condition. Unbeknownst
to investors, throughout the Class Period, the Company suffered
from a host of undisclosed adverse factors that negatively
impacted its business and caused it to report financial results
that were materially less than the market expectations
defendants had caused and cultivated.
It was only at the end of the Class Period that investors
ultimately learned that the Company was operating far below
expectations and realized that Spectrum Brands had significantly
inflated sales of its battery products during the 1st and 2nd
quarter of 2005. Accordingly, on July 28, 2005, when defendants
reported results for the 3rd fiscal quarter of 2005, the price
of Spectrum Brands stock declined over $8.00, falling over 20%
to closing at $30.10 per share.
The bad news, however, was not over. On September 7, 2005, prior
to the market opening, defendants revealed that earnings for the
fourth quarter ending September 30, 2005 would be "substantially
lower" than the guidance previously reported. Defendants
attributed the shortfall to weak sales and "high (retail)
inventory levels." The unexpected news prompted additional
analyst downgrades. Analyst William Schmitz noted that "(a)fter
two earning warnings in six weeks, we believe already low
investor faith in this roll-up is likely to dissipate." In
response to the September 7, 2005 news, the stock dropped
another 13% on volumes of 4.26 million. In total, the stock lost
31% of its value in response to the disclosures.
For more details, contact The Law Offices of Bruce G. Murphy,
Esq., 265 Llwyds Lane, Vero Beach, FL 32963, Phone:
(828) 737-0500, E-mail: bgm@brucemurphy.biz.
TEMPUR-PEDIC INTERNATIONAL: Milberg Weiss Files Fraud Suit in KY
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman, LLP, initiated
a class action lawsuit on behalf of purchasers of the securities
of Tempur-Pedic International, Inc. ("Tempur-Pedic" or the
"Company") (NYSE: TPX) between April 22, 2005 and September 19,
2005, inclusive (the "Class Period"), seeking to pursue remedies
under the Securities Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for
the Eastern District of Kentucky, against defendants Dale E.
Williams (CFO), Robert B. Trussell Jr., (CEO), H. Thomas Bryant
(President) and P. Andrews McLane (Chairman). The Honorable Karl
S. Forester is the Judge presiding over the action.
The Complaint alleges that by the beginning of the Class Period
investors became concerned that well-heeled competitors, such as
Sealy, Serta and Simmons, were making significant inroads into
the visco-elastic market that could challenge Tempur-Pedic's
dominance or, at the very least, erode its profits if it was
forced to slash prices in order to compete. Defendants allayed
these concerns by misrepresenting that its business was not
suffering from the effects of competition and would continue to
grow strongly. Well into the Class Period, defendants reiterated
aggressive sales and earnings guidance for 2005, even after the
Company had begun to experience a slowdown. Defendants' Class
Period representations were materially false and misleading when
made because they failed to disclose that:
(1) demand for Tempur-Pedic's products was slowing as
competitors were gaining a foothold in the visco-
elastic market;
(2) defendants' repeated express assurances that the
competition was not having a materially negative, or
any, impact on the Company, even in response to express
concerns raised by analysts, were untrue and provided
false comfort to investors while inflating the price of
Tempur-Pedic stock so insiders could sell their shares;
and
(3) in light of increasing competition that was already
having a noticeable effect on the Company's business,
defendants' guidance, reiterated on July 21, 2005,
lacked any reasonable basis.
Defendants were motivated to commit the wrongdoing alleged
herein in order to sell their personally held Tempur-Pedic stock
at artificially inflated prices. During the Class Period,
insiders and entities associated with insiders, sold a total of
5,620,591 shares of Tempur-Pedic common stock at artificially
inflated prices, for proceeds of $131,910,207. Of that amount,
$124,550,000 was sold by TA Associates, a controlling
shareholder that has two nominee directors on Tempur-Pedic's
board of directors - Jeffrey S. Barber and Chairman P. Andrews
McLane, who is also a managing director of TA Associates.
On September 19, 2005, Tempur-Pedic issued lower guidance for
2005, which it attributed to a number of factors, including
competition that it had said was not and would not have a
negative impact, at least not one large enough to cause it to
lower its 2005 guidance, which was reiterated less than a month
before this announcement.
In response to this announcement, the price of Tempur-Pedic
common stock plummeted, falling 28.5% in one day, to $11.70 per
share on July 20, 2005 from $16.38 per share on July 19, 2005,
on unusually heavy trading volume.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado of Milberg Weiss Bershad & Schulman, LLP, 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.
*********
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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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
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