/raid1/www/Hosts/bankrupt/CAR_Public/051111.mbx
C L A S S A C T I O N R E P O R T E R
Friday, November 11, 2005, Vol. 7, No. 224
Headlines
4 POINTS: OOIDA Files Suit in FL Over Katrina Relief Contract
ACCREDITED HOME: Lawyer Argues 'Avery' Being Used as Thin Excuse
AMERIGROUP CORPORATION: Shareholders File Stock Suits in E.D. VA
AVISTA CORPORATION: WA Court Dismisses Securities Fraud Lawsuit
BERKSHIRE HATHAWAY: Face Amended Brokerage Antitrust Suit in NJ
CAPITAL AUTOMOTIVE: Shareholders File Suit V. Flag Fund Merger
CHEVRON CORPORATION: $6B Suit's Leaders Fear Threats, Break-in
ENSERCO ENERGY: Former Worker Fights Subpoena For him to Testify
GENERAL REINSURANCE: TN Court Mulls Dismissal of ROA Lawsuits
GENERAL REINSURANCE: AL Court Refuses To Dismiss Conspiracy Suit
GENERAL REINSURANCE: Faces Second Amended Securities Suit in NY
INDIANA: Sex Offender Visitation Policy Argued Before High Court
ISRAEL RAILWAYS: Lawyer Files Suit in Tel Aviv Over Late Trains
KEYSPAN CORPORATION: NY Court Approves Investor Suit Settlement
LOUISIANA: Hurricane Katrina Victims to Sue FEMA Over Denied Aid
NORTHERN IRELAND: U.K. to Keep Close Eye on Trauma Civil Action
ONEOK INC.: Appeals Jury Award in Yaggy Gas Leak Suit Verdict
POTTERY BARN: Recalls 900 Tea-Light Holders Due to Fire Hazard
QWEST COMMUNICATIONS: Reaches $400M Deal in Consolidated Lawsuit
REFCO INC.: Mulls Class Action Status For Customers' Complaints
SUMMIT PROPERTIES: Executes Settlement For NC Shareholder Suit
TARGET CORPORATION: Recalls 290T Tea Light Candles For Fire Risk
THANE INTERNATIONAL: Recalls 290T Air Purifiers For Fire Hazard
VITRIA TECHNOLOGY: Final Fairness Hearing Set April 2006 in NY
WELLS REAL: GA Court Yet To Rule on Appeal of Lawsuit Dismissal
WEYERHAUSER CO.: Continues To Face Canadian Antitrust Litigation
WEYERHAUSER CO.: Seeks Review of Lawsuit Summary Judgment Ruling
WEYERHAUSER CO.: Settling With Opt-Out Plaintiffs in PA Lawsuit
Asbestos Alerts
ASBESTOS LITIGATION: Sempra, SDG&E Respond to Abatement Lawsuit
ASBESTOS LITIGATION: Pepco Reports 400 Dismissed Cases in 3Q05
ASBESTOS LITIGATION: TODCO Defends Lawsuits in MS Circuit Courts
ASBESTOS LITIGATION: Legrand Subsidiary Workers Seek Payments
ASBESTOS LITIGATION: Harsco Records 31,393 Pending Suits in 3Q05
ASBESTOS LITIGATION: Hercules Inc. Notes 31,075 Claims in 3Q05
ASBESTOS LITIGATION: HPC Deals With Insurers to Reimburse Costs
ASBESTOS LITIGATION: Navigators Group Holds 146 Pending Claims
ASBESTOS LITIGATION: Goodrich Faces Claims as Coltec's Successor
ASBESTOS LITIGATION: St. Paul Cites US$264Mil Net Loss in 3Q05
ASBESTOS LITIGATION: Hartford Financial Still Confronts Claims
ASBESTOS LITIGATION: MSA Named in About 3,000 Liability Lawsuits
ASBESTOS LITIGATION: Rogers Corp. Deals With 212 Pending Claims
ASBESTOS LITIGATION: Cytec Posts Asbestos Liability at US$48.3M
ASBESTOS LITIGATION: JPN Firm Devises Coating to Tame Asbestos
ASBESTOS LITIGATION: ABB Set to Recover Investment Grade Status
ASBESTOS LITIGATION: TX Jury Awards Widow US$25.7M in Alcoa Suit
ASBESTOS LITIGATION: Hardie to Announce Update on Claims Deal
ASBESTOS LITIGATION: General Motors Settles Claims With Equitas
ASBESTOS LITIGATION: Cooper Battles PepsiAmericas, Pneumo Abex
ASBESTOS LITIGATION: MeadWestvaco Defends 200 Lawsuits in 3Q05
ASBESTOS LITIGATION: Todd Shipyards Named in 597 Injury Lawsuits
ASBESTOS LITIGATION: Allegheny, Affiliates Face 841 Injury Suits
ASBESTOS LITIGATION: Thomas & Betts Defends Suits in Five States
ASBESTOS LITIGATION: General Cable Corp Discloses 43,000 Claims
ASBESTOS LITIGATION: Viacom Posts 104,000 Pending Claims in 3Q05
ASBESTOS LITIGATION: Cooper Resolves 98,444 Pneumo Abex Claims
ASBESTOS LITIGATION: Albany Int'l. Battles 24,406 Injury Claims
ASBESTOS LITIGATION: Macerich Allocates $3.3M Remediation Costs
ASBESTOS LITIGATION: Washington Group Int'l. Faces Injury Suits
ASBESTOS LITIGATION: Moen Inc Defends 35 Personal Injury Suits
ASBESTOS LITIGATION: IL Court Denies Remand of Suit V. Travelers
ASBESTOS LITIGATION: Court Remands Westmiller Suit V. Viad Corp.
ASBESTOS LITIGATION: NY Court Allows 3rd Party Claim V. DuPont
ASBESTOS LITIGATION: Texas Appeals Court Favors Dow Chemical Co.
ASBESTOS LITIGATION: CG&E, PSI Handle 130 Pending Injury Suits
ASBESTOS LITIGATION: Sealed Air Posts Update on Grace Settlement
ASBESTOS LITIGATION: Tenneco Inc. Continues to Battle Claims
ASBESTOS LITIGATION: Ingersoll-Rand Settles Claims for US$12.5M
ASBESTOS LITIGATION: Midwest Generation Incurs US$68M Liability
ASBESTOS LITIGATION: CIRCOR Expects Drop in Mississippi Filings
ASBESTOS LITIGATION: AFG Raises Projection of Defense Costs
ASBESTOS LITIGATION: Supreme Court Rules Against Garlock Sealing
ASBESTOS LITIGATION: MD Court Rules on Third-Party Injury Claims
ASBESTOS LITIGATION: KY Court Rejects Remand of the Miller Suit
ASBESTOS LITIGATION: BNS Co. Named in 74 New Claims, 604 Total
ASBESTOS LITIGATION: UIC, Detroit Stoker Claims Drop to 12,897
ASBESTOS LITIGATION: PA Court Junks Henkel Suit V. Two Insurers
ASBESTOS ALERT: Appeal Court Bars Claims Under Survival Action
ASBESTOS ALERT: ADEQ Urges El Paso to Resolve Asbestos Violation
ASBESTOS ALERT: Chevron Phillips to Resolve Liability Dispute
New Securities Fraud Cases
BOSTON SCIENTIFIC: Curtiss V. Trinko Files Securities Suit in MA
HCA INC.: Lerach Coughlin Files Securities Fraud Suit in M.D. TN
HCA INC.: Schatz & Nobel Lodges Securities Fraud Suit in M.D. TN
MOTIVE INC.: Schiffrin & Barroway Lodges Securities Suit in TX
PIXAR ANIMATION: Stull Stull Lodges Securities Fraud Suit in CA
*********
4 POINTS: OOIDA Files Suit in FL Over Katrina Relief Contract
-------------------------------------------------------------
The Owner-Operator Independent Drivers Association (OOIDA)
initiated a lawsuit in U.S. District Court in central Florida
against 4 Points Logistics of Leesburg, Florida, and Lipsey
Mountain Spring Water of Norcross, Georgia, The eTrucker
reports.
The suit seeks more than $5 million from the companies, claiming
that hundreds of truckers who contracted to haul ice and water
for Hurricane Katrina victims were paid less than half the
contracted rate. Icehouse Cartage Express of Hamilton, Missouri,
Grain Express of Emporia, Kansas, and Northstar Express of
Middletown, New York joins OOIDA in the suit. OOOIDA is seeking
class action status for the suit so as to include any trucker
who was involved in such contracts.
OOIDA claims that three days after Hurricane Katrina hit, Lipsey
Water entered into a contract with Florida to supply ice and
water to victims. According to them, Florida officials agreed to
pay rates well above market average because the need was urgent
and the truckers would be hauling through a dangerous, storm-
torn region.
The suit charges that rather than pass the high rates on to
truckers, Lipsey and 4 Points split the money, the suit charges.
Jim Johnston, OOIDA president, told The eTrucker that the deal
amounted to "rank profiteering." According to Mr. Johnston,
"Together, they have seized this unfortunate opportunity to make
as much money as they can from the efforts of others without any
thought about the impact their opportunism will have on future
disaster relief efforts. Why should truckers put themselves at
risk to make less money than they could delivering other
freight, only to make a whole lot of money for folks who
contributed nothing but to serve as middlemen?"
According to OOIDA, the contracts provided payments of $1,600
per truck per day plus an additional $403 per truck per day for
ice shipments. OOIDA explained that the provisions were intended
to reward drivers who pitched in to help and to provide an
incentive so drivers wouldn't take other jobs. It is seeking for
the full payment of the compensation promised to the drivers.
After transporting the ice and water to Stennis Air Force Base
in Florida, the drivers were required to wait before unloading.
On average, they ran their refrigerated units 10 days or more
before making final delivery, according to OOIDA. 4 Points
agreed to pay each trucker $60 per hour of detention, 24 hours a
day, which amounted to $1,440 per day for their services and use
of their equipment, OOIDA said. However, OOIDA claims that
after the drivers completed delivery, 4 Points changed the terms
of the detention deal and limited payment to 10 hours per day,
or $600 per truck per day. Maggie Lee of Double Wing Trucking,
based in Seattle, told The eTrucker that 4 Points failed to pay
her $25,000 she was owed and as a result, she missed a payment,
and one of her company's five refrigerated trailers was
repossessed recently.
Derek Schroth, 4 Points' attorney though told The eTrucker that
all the blame lies with Lipsey, pointing out, "The problem is
that Lipsey is failing to pay 4 Points, so they can't pay their
haulers." He also told The eTrucker, "Once we get paid, we'll
send the money." The lawyer added that 4 Points was considering
its own action against Lipsey, perhaps in concert with the OOIDA
action.
The suit is styled, "Owner-Operator Independent Drivers
Association, Inc. et al v. 4 Points Logistics, LLC et al, 5:05-
cv-00440-WTH-GRJ," filed in the United States District Court for
the Middle District of Florida, under Judge Wm. Terrell Hodges,
presiding, with referral to Judge Gary R. Jones. Representing
the Plaintiff/s are, Michael R. Freed of Brennan, Manna &
Diamond, PL, Humana Centre Building, 76 S. Laura Street, Ste.
2110, Jacksonville, FL 32202, Phone: 904/366-1500, Fax:
904/366-1501, E-mail: mrfreed@bmdpl.com; and Paul D. Cullen and
Joyce E. Mayers, The Cullen Law Firm, PLLC, 1101 30th St., N.W.,
Suite 300, Washington, DC 20007-3770, Phone: 202/944-8600, Fax:
202/944-8611. Representing the Defendant/s are, Derek A. Schroth
Bowen & Campione, P.A., 600 Jennings Ave., P.O. Box 926, Eustis,
FL 32726, Phone: 352/589-1414, Fax: 352-589-1726, E-mail:
dschroth@bowencampione.com; and I. William Spivey, II of
Greenberg Traurig, P.A., 450 S. Orange Ave., Suite 650, P.O. Box
4923, Orlando, FL 32802-4923, Phone: 407/420-1000 Ext 398, Fax:
407/420-5909, E-mail: spiveyw@gtlaw.com.
ACCREDITED HOME: Lawyer Argues 'Avery' Being Used as Thin Excuse
----------------------------------------------------------------
Three months after an Illinois Supreme Court decision that wiped
out a $1.2 billion verdict in Avery vs. State Farm, a prominent
member of the plaintiff's bar is arguing that the decision did
not change the law and that defense attorneys seek to use it as
"a thin excuse," The Madison County Record reports.
In an October 28 pleading, Gary Peel, of the Lakin Law Firm in
Wood River, wrote that the Court simply corrected a trial
judge's error and rejected a plaintiff's weak case. Mr. Peelis
asking Madison County Circuit Judge Nicholas Byron to deny
reconsideration of an order that certified Paul and Ladonna
Wratchford as representatives of a national class in a suit
against Accredited Home Lenders, which Judge Byron certified
last January. The Wratchfords claim that Accredited improperly
added a $20.90 courier fee to the mortgage on their home in Wood
River.
The Company argued that it charged the fee on all mortgages, to
cover "transmittal and administrative services." In September,
after the Supreme Court overturned the Avery verdict, Accredited
attorney Kevin Babb of Edwardsville asked Byron to reconsider,
noting "striking parallels" between the Wratchford case and
Avery.
Mr. Babb wrote that under Avery, the court could not define a
class in a way that precluded a defendant from introducing
material evidence. He pointed out that under Avery, the
Wratchfords could not establish a method of identifying class
members without individual inquiries, nor could they prove
damages under Avery. In addition, Mr. Babb also wrote that under
Avery, the court could not certify a class action because no
question of fact or law predominated. In response, Mr. Peel
urged Judge Byron to reject Mr. Babb's interpretation, writing,
"Avery involved primarily contract claims, but this case does
not involve any contract claims." He adds that the Wratchfords
sought recovery for consumer fraud and unjust enrichment.
Mr. Peel stated that a portion of the decision that Judge Babb
quoted on class definition applied only to an error in jury
instructions. That error, according to him, has no bearing on
class definition. He further wrote, "To the extent that Avery
says anything relevant to the current action, it only supports
the court's previous decision to grant plaintiff's motion for
class certification. In contrast to Avery, this case involves a
uniform fee described in a uniformly false manner to every
single class member. Nothing in Avery suggests that it is
inappropriate to certify a class based on such a set of facts.
Defendant is using Avery as a thin excuse to reargue its
formerly rejected argument that the `courier fee' was reasonable
because it was for `transmittal and administrative services'
that might have exceeded $20.90 for some customer. Defendant
cannot cure its fraud now by simply changing the representation
it used from false to true."
Mr. Peel contends that any analogy between Avery and the
Wratchford case would fail. He pointed out that a plaintiff in
Avery admitted that State Farm's supposed deceit cost him
nothing, adding that the plaintiff admitted that State Farm did
not deceive him. He also said, "The problem with defendant's
argument is that defendant did not charge class members for
`transmittal and administrative services.' Defendant charged
class members for `courier fees.' They are not the same thing."
Mr. Peel concluded in his argument, "Defendant has failed to
show either that Avery has changed the standard for nationwide
certification or that nationwide certification was improper in
the present case in light of the standards set forth in Avery."
Judge Byron has set a November 23 deadline for Mr. Babb to reply
to Mr. Peel.
AMERIGROUP CORPORATION: Shareholders File Stock Suits in E.D. VA
----------------------------------------------------------------
Amerigroup Corporation faces four securities class action
complaints filed in the United States District Court for the
Eastern District of Virginia on behalf of persons who acquired
the Company's common stock between April 27, 2005 and September
28, 2005. These complaints are captioned:
(1) Nieves v. AMERIGROUP Corp., et al., Civil Action No.
2:05-cv-578;
(2) Pearson v. AMERIGROUP Corp. et al., Civil Action
No.2:05-cv-591;
(3) Murphey v. AMERIGROUP Corp. et al., Civil Action
No.2:05-cv-600;
(4) Kling v. AMERIGROUP. et al., Civil Action No.2:05-cv-
601
The Actions purport to allege claims against the Company,
Jeffrey L. McWaters, James G. Carlson, Stanley F. Baldwin, E.
Paul Dunn, Jr., and Kathleen K. Toth for alleged violations of
Sections 10(b) and 20(a) and Rule 10b-5 of the Securities
Exchange Act of 1934. The complaints allege that the Company
issued a series of materially false and misleading statements
regarding its financial statements and business and prospects.
Among other things, the Actions seek compensatory damages and
attorneys' fees and costs. The Actions, and any subsequently
filed related actions, will be consolidated into a single
consolidated action. The Actions are in the early stages, and no
prediction can be made as to the outcome.
AVISTA CORPORATION: WA Court Dismisses Securities Fraud Lawsuit
---------------------------------------------------------------
The United States District Court for the Eastern District of
Washington granted Avista Corporation's motion to dismiss the
consolidated securities class action filed against it. The suit
also names as defendants:
(1) Thomas M. Matthews, the former Chairman of the Board,
President and Chief Executive Officer of the Company,
(2) Gary G. Ely, the current Chairman of the Board,
President and Chief Executive Officer of the Company,
and
(3) Jon E. Eliassen, the former Senior Vice President and
Chief Financial Officer of the Company.
The suit, styled "In re Avista Corp. Securities Litigation,"
alleges violations of the federal securities laws in connection
with alleged misstatements and omissions of material fact
pursuant to Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934. The plaintiffs allege that the Company did not
have adequate risk management processes, procedures and
controls. The plaintiffs further allege that the Company engaged
in unlawful energy trading practices and allegedly manipulated
western power markets. The plaintiffs assert that alleged
misstatements and omissions regarding these matters were made in
the Company's filings with the Securities and Exchange
Commission and other information made publicly available by the
Company, including press releases. The class action complaint
asserts claims on behalf of all persons who purchased,
converted, exchanged or otherwise acquired the Company's common
stock during the period between November 23, 1999 and August 13,
2002.
The Company filed a motion to dismiss this complaint in October
2003 and the plaintiffs filed an answer to this motion in
January 2004. Arguments before the Court on the motion were
held on March 19, 2004. On April 15, 2004, the Court called for
additional briefing on what effect, if any, the FERC proceedings
have on this case. On July 30, 2004, the Court denied the
Company's motion to dismiss this complaint, holding, among other
things, that the FERC proceedings may ultimately have some
evidentiary value relevant to the disclosure issues raised in
this case, but they do not preclude the resolution of those
issues by the Court. In November 2004, the Company filed its
answer to the complaint denying the plaintiffs' allegations.
On June 13, 2005, the Company filed a motion for reconsideration
of its earlier motion to dismiss this complaint, based, in part,
on a recent United States Supreme Court decision with respect to
the pleading requirements surrounding a sufficient showing of
loss causation. In July 2005, the plaintiffs responded to the
Company's motion for reconsideration and the matter is scheduled
for arguments in September 2005 before the United States
District Court for the Eastern District of Washington. On
October 19 2005, the Court granted the Company's motion for
reconsideration and granted the Company's motion to dismiss.
The order to dismiss was issued without prejudice, and the Court
has allowed the plaintiffs until November 10, 2005 to amend
their complaint.
The suit is styled "The Hackett Group, et al v. Avista
Corporation, et al., case no. 2:00-cv-00262-RHW," filed in the
United States District Court for the Eastern District of
Washington, under Judge Robert H. Whaley. Representing the
Company are Curt Roy Hineline, David M. Jacobson and Evan L.
Schwab, Dorsey & Whitney LLP - SEA, U S Bank Center, 1420 5th
Avenue, Suite 3400, Seattle, WA 98101, Phone: 206-903-8800, Fax:
206-903-8820, E-mail: jacobson.david@dorsey.com,
schwab.evan@dorsey.com; and Donald Gene Stone of Paine Hamblen
Coffin Brooke & Miller - SPO, 717 W Sprague Avenue, Suite 1200,
Spokane, WA 99201-3503, Phone: 509-455-6000, Fax: 15098380007,
E-mail: don.stone@painehamblen.com. Representing the plaintiffs
are:
(1) Randi D. Bandman and Michael Reese, Milberg Weiss
Bershad Hynes & Lerach LLP - CA(SF), 100 Pine Street,
Suite 2600, San Francisco, CA 94111, Phone:
(2) Karl P Barth, Lovell Mitchell & Barth LLP, 1420 Fifth
Avenue, Suite 2200, Seattle, WA 98101, Phone: (425)
452-9800, Fax: (425) 452-9801, E-mail:
kbarth@lmbllp.com
(3) Steve W Berman, Hagens Berman Sobol Shapiro LLP
1301 Fifth Avenue, Suite 2900, Seattle, WA 98101,
Phone: 206-623-7292, Fax: 12066230594, E-mail:
steve@hbsslaw.com
BERKSHIRE HATHAWAY: Face Amended Brokerage Antitrust Suit in NJ
---------------------------------------------------------------
Berkshire Hathaway, Inc. and General Reinsurance Corporation
face an amended multi-district litigation filed in the United
States District Court for the District of New Jersey, styled "In
Re: Insurance Brokerage Antitrust Litigation, MDL No. 1663
(D.N.J.)."
In February 2005, the Judicial Panel on Multidistrict Litigation
transferred several different cases to the District of New
Jersey for coordination and consolidation. Each consolidated
case concerned allegations of an industry-wide scheme on the
part of commercial insurance brokers and insurance companies to
defraud a purported class of insurance purchasers through bid-
rigging and contingent commission arrangements. The Company and
General Reinsurance were not parties to the original,
transferred cases.
On August 1, 2005, the named plaintiffs - fourteen businesses,
two municipalities, and three individuals - filed their First
Consolidated Amended Commercial Class Action Complaint, and the
Company and General Reinsurance (along with a large number of
insurance companies and insurance brokers) were named as
defendants in the Amended Complaint. The plaintiffs claim that
all defendants engaged in a pattern of racketeering activity, in
violation of Racketeer Influenced and Corrupt Organizations
(RICO), and that they conspired to restrain trade. They further
allege that the broker defendants breached fiduciary duties to
the plaintiffs, that the insurer defendants aided and abetted
that breach, and that all defendants were unjustly enriched in
the process. Plaintiffs seek treble damages in an unspecified
amount, together with interest and attorneys fees and expenses.
They also seek a declaratory judgment of wrongdoing as well as
an injunction against future anticompetitive practices.
CAPITAL AUTOMOTIVE: Shareholders File Suit V. Flag Fund Merger
--------------------------------------------------------------
Capital Automotive REIT faces a class action relating to the
proposed agreement and plan of merger pursuant to which Flag
Fund V LLC, a Delaware limited liability company advised by DRA
Advisors LLC, will acquire the Company and its subsidiaries,
including its Partnership, through the mergers of the merger
subsidiaries of Flag Fund V into the Company.
The suit, filed in the Circuit Court for Baltimore, Maryland, is
styled "Adams Family Trust et al. v. Capital Automotive REIT et
al." The suit alleges, among other things, that the merger
consideration to be paid to the company's common shareholders in
the merger is unfair and inadequate and unfairly favors insiders
and that its Board of Trustees failed to exercise ordinary care
and diligence in the exercise of their fiduciary obligations.
The complaint seeks, among other relief, certification of the
lawsuit as a class action, a declaration that the merger
agreement was entered into in breach of the Company's Board's
fiduciary duties, and an injunction preventing completion of the
merger unless and until the Company adopts and implements a
process such as an auction to obtain the highest possible price
for the Company.
CHEVRON CORPORATION: $6B Suit's Leaders Fear Threats, Break-in
--------------------------------------------------------------
Four Ecuadorian key principals in a $6 billion environmental
class action lawsuit against Chevron Corporation are saying that
their lives are in danger following a series of threats and a
break-in, The All Headline News reports.
The principals filed a legal petition with the Inter-American
Commission on Human Rights of the Organization of American
States (OAS), stating that the four high-profile leaders in the
first ever class action lawsuit to force U.S.-based Chevron,
which was once known as ChevronTexaco, to stand trial in Latin
America on environmental charges, are in need of immediate
security protection.
Alejandro Ponce Villacis, one of the Ecuadorian lawyers
mentioned in the petition, told The All Headline News, "As a
reputable public company, Chevron needs to state publicly and
forcefully that it is not connected to these illegal
activities." The petition, according to Mr. Villacis, seeks
protection for Pablo Fajardo Mendoza; the 33-year-old lead
lawyer from Sushufindi; Ponce Villacis, 37, from Quito; Ermel
Chavez, 36, President of the Front for the Defense of the Amazon
(FDA), the organization that brought the lawsuit; and Luis
Yanza, 43, the FDA's coordinator for the lawsuit.
The lawsuit alleges that Chevron dumped more than 18 billion
gallons of toxic waste directly into the rainforest over a 26-
year period, which is roughly 30 times the size of the Exxon
Valdez disaster. Court documents revealed that an estimated
30,000 people are affected and that the only comprehensive
damage assessment, completed in 2003 by the American firm Global
Environmental Operations, concluded that cleanup would cost at
least $6 billion, an earlier Class Action Reporter story (August
26, 2005) reports.
The petition alleges that on October 28, a computer and
documents relating to the lawsuit were stolen from the law
office of Ponce Villacis, while money and other items of value
were left untouched. Then in the same month, an anonymous caller
to the office where Fajardo Mendoza is employed said he was
carrying out a "cleansing" of the region of politically
undesirable elements.
ENSERCO ENERGY: Former Worker Fights Subpoena For him to Testify
----------------------------------------------------------------
A former Enserco Energy employee under investigation for alleged
manipulation of gas prices asked a federal judge to quash a
subpoena for him to testify in a civil case on the same matter,
The Associated Press reports.
According to documents filed in U.S. District Court, Matthew
Reed claims that testifying in a class action suit against the
Golden-based natural gas company and other trading companies
would violate his Fifth Amendment privilege not to incriminate
himself.
In his court filing, Mr. Reed pointed out that he is a target of
a criminal investigation by the U.S. Attorney's Office and
shouldn't be forced to testify in the case filed in a New York
federal court. The U.S. Commodity Futures Trading Commission
fined Enserco $3 million for fraud in 2003. The commission's
investigation found that Enserco, a so-called middleman trading
company for natural gas, falsely reported the prices at which
they bought or sold gas. Those prices were then reported to
industry publications that compile price indices on which buyers
and sellers base negotiations.
The commission is currently embroiled in a civil action against
Mr. Reed as an individual for his alleged role in the case, but
it will not continue until the criminal investigation by the
U.S. Attorney in Denver is completed.
GENERAL REINSURANCE: TN Court Mulls Dismissal of ROA Lawsuits
-------------------------------------------------------------
The United States District Court for the Western District of
Tennessee has yet to rule on General Reinsurance Corporation's
motion to dismiss the ten lawsuits filed against it by doctors,
hospitals and lawyers that purchased insurance through
Reciprocal of America (ROA) or certain of its Tennessee-based
risk retention groups. These complaints seek compensatory,
treble, and punitive damages in an amount plaintiffs contend is
just and reasonable.
Seven complaints were initially filed. The Company is also
subject to actions brought by the Virginia Commissioner of
Insurance, as Deputy Receiver of ROA, the Tennessee Commissioner
of Insurance, as Liquidator for three Tennessee risk retention
groups, and a federal lawsuit filed by a Missouri-based hospital
group.
The first of these actions was filed in March 2003 and
additional actions were filed in April 2003 through July 2004.
In the action filed by the Virginia Commissioner of Insurance,
the Commissioner asserts in several of its claims that the
alleged damages being sought exceed $200 million in the
aggregate as against all defendants. These ten cases are
collectively assigned to the U.S. District Court for the Western
District of Tennessee for pretrial proceedings. The Company has
filed motions to dismiss all of the claims against it in these
ten cases and the court has not yet ruled on these motions. No
discovery has been initiated in these cases.
The suit is styled "In Re Reciprocal of America (ROA) Sales
Practices Litigation, case no. 2:04-md-01551-JDB," filed in the
United States District Court for the Western District of
Tennessee under Judge J. Daniel Breen. Representing the
plaintiffs are:
(1) Jere L. Beasley, BEASLEY ALLEN CROW METHVIN PORTIS &
MILES, P.O. Box 4160, Montgomery, AL 36103-4160, Phone:
334-269-2343
(2) Patrick H. Cantilo, CANTILO & BENNETT LLP, 7501-C North
Capital Of Texas Highway, Ste. 200, Austin, TX 78731,
Phone: 512-478-6000, Fax: 512-404-6550, E-mail:
phcantilo@cb-firm.com
(3) William H. Farmer, FARMER & LUNA, 333 Union St., Ste.
300, Nashville, TN 37201, Phone: 615-254-9146, Fax:
615-254-7123, E-mail: bfarmer@farmerluna.com
(4) Jef Feibelman, BURCH PORTER & JOHNSON, 130 N. Court
Avenue, Memphis, TN 38103, Phone: 901-524-5000, Fax:
901-524-5024
(5) Jonathan P. Lakey, PIETRANGELO COOK, 6410 Poplar
Ste. 190, Memphis, TN 38119, Phone: 901-685-2662, Fax:
901-685-6122, E-mail: jlakey@pietrangelocook.com
(6) Robert G. Methvin, Jr., MCCALLUM & METHVIN, PC, The
Highland Building, 2201 Arlington Ave., S. Birmingham,
AL 35205, Phone: 205-939-0199, Fax: 205-939-0399, E-
mail: rgm@mmlaw.net
(7) B. J. Wade, GLASSMAN EDWARDS WADE & WYATT, P.C., 26 N.
Second Street, Memphis, TN 38103, Phone: 901-527-4673,
Fax: 901-521-0940,
GENERAL REINSURANCE: AL Court Refuses To Dismiss Conspiracy Suit
----------------------------------------------------------------
The Circuit Court of Montgomery County Alabama refused to
dismiss the consolidated class action filed against General
Reinsurance Corporation by a group of Alabama hospitals.
Two suits were initially filed against the Company. The first
suit was filed in the Circuit Court of Montgomery County by a
group of Alabama hospitals that are former members of the
Alabama Hospital Association Trust (AHAT). This suit alleged
violations of the Alabama Securities Act, conspiracy, fraud,
suppression, unjust enrichment and breach of contract against
the Company and virtually all of the defendants in the federal
suits based on an alleged business combination between AHAT and
Reciprocal of America (ROA) in 2001 and subsequent capital
contributions to ROA in 2002 by the Alabama hospitals. The
allegations of the AHA Action are largely identical to those set
forth in the complaint filed by the Virginia receiver for ROA.
The Company previously filed a motion to dismiss all of the
claims in the AHA Action. The motion was granted in part by an
order in March 2005, which dismissed the Alabama Securities Act
claim against the Company and ordered plaintiffs to amend their
allegations of fraud and suppression.
Plaintiffs in the AHA Action filed their Amended and Restated
Complaint in April 2005, alleging claims of conspiracy, fraud,
suppression and aiding and abetting breach of fiduciary duty
against the Company. The Company filed a motion to dismiss all
counts of the Amended and Restated Complaint in May 2005. The
Special Master appointed by the court heard arguments on July
13, 2005 and recommended denial of the motion on July 22, 2005.
The second suit, also filed in the Circuit Court of Montgomery
County, was initiated by Baptist Health Systems, Inc., a former
member of AHAT, and alleged claims identical to those in the
initial AHA Complaint, plus claims for breach of fiduciary duty
and wantonness. These cases have been consolidated for pretrial
purposes. Baptist filed its First Amended Complaint in April
2005, alleging violations of the Alabama Securities Act,
conspiracy, fraud, suppression, breach of fiduciary duty,
wantonness and unjust enrichment against the Company.
The Company filed a motion to dismiss all counts of the Amended
and Restated Complaint in May 2005. The Special Master heard
arguments on July 13, 2005 and on July 22, 2005, recommended
dismissal of the claim under the Alabama Securities Act, but
recommended denial of the motion to dismiss the remaining
claims. The AHA Action and the Baptist action claim damages in
excess of $60 million in the aggregate as against all
defendants. On July 22, 2005, the Court denied the Company's
motion to dismiss.
GENERAL REINSURANCE: Faces Second Amended Securities Suit in NY
---------------------------------------------------------------
Plaintiffs filed a second consolidated amended class action
against General Reinsurance Corporation in the United States
District Court for the Southern District of New York, styled "In
re American International Group Securities Litigation, Case No.
04-CV-8141-(LTS)."
The suit is a putative class action asserted on behalf of
investors who purchased publicly-traded securities of American
International Group (AIG) between October 1999 and March 2005.
The Company and its former Chief Executive Officer Ronald
Ferguson are identified as defendants in this matter. The
Complaint alleges that AIG and certain other defendants violated
federal securities laws, but does not assert any causes of
action against the Company or Mr. Ferguson. Plaintiffs' counsel
in this action have filed a motion for leave to amend their
Complaint.
On June 7, 2005, the Company received a second Summons and Class
Action Complaint in a putative class action asserted on behalf
of investors who purchased AIG securities between October 1999
and March 2005, captioned "San Francisco Employees' Retirement
System, et al. vs. American International Group, Inc., et al.,
Case No. 05-CV-4270," United States District Court, Southern
District of New York. The Complaint alleges that AIG and
certain other defendants violated federal securities laws, and
that the Company aided and abetted securities fraud or conspired
to violate federal securities laws.
Both actions have been assigned to the same judge. At a July
2005 conference, the court ruled that the plaintiffs in case no.
04-CV-8141 would be lead plaintiffs. The court has not yet ruled
on those plaintiffs' motion for leave to amend their complaint,
nor has the court established a schedule for responses to the
complaint or any other further proceedings. At a July 2005
conference, the court ruled that the plaintiffs in case no. 04-
CV-8141 would be lead plaintiffs. On September 27, 2005, the
plaintiffs in case no. 04-CV-8141 filed a Consolidated Second
Amended Complaint. The Complaint asserts various claims against
AIG, and various of its officers, directors, investment banks
and other parties. Included among the defendants are the
Company, Mr. Ferguson, Mr. Napier and Mr. Houldsworth (whom the
Complaint defines as the "General Re Defendants").
The Complaint alleges that the General Re Defendants violated
Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5
through their activities in connection with the AIG transaction
described in "Governmental Investigations," above. The Complaint
seeks damages and other relief in unspecified amounts. The
General Re Defendants' pleadings in response to the Complaint
are due to be filed on December 14, 2005. No discovery has taken
place.
The suit is styled "IN RE American International Group, Inc
Securities Litigation, case no. 1:04-cv-08141-JES," filed in the
United States District Court for the Southern District of New
York, under Judge John E. Sprizzo. Representing the plaintiffs
are Thomas A. Dubbs of Goodkind Labaton Rudoff & Sucharow LLP,
100 Park Avenue, New York, NY 10017, Phone: 212-907-0700, Fax:
212-818-0477, E-mail: tdubbs@glrslaw.com; and Louis Gottlieb,
Goldman Gruder & Wood, 200 Connecticut Avenue, Norwalk, CT
06854, Phone: (212) 907-0872, Fax: (212) 883-7072, E-mail:
lgottlieb@glrslaw.com. Representing the Company are Steven Ian
Froot of Boies, Schiller & Flexner, LLP, 570 Lexington Avenue,
New York, NY 10022, Phone: (212)-446-2300, Fax: (212)-446-2350,
E-mail: sfroot@bsfllp.com; and George Abraham Zimmerman,
Skaddden, Arps, Slate, Meagher & Flom LLP (NYC), Four Times
Square, New York, NY 10036, Phone: (212) 735-2000 x2047, Fax:
(212)735-2000, E-mail: gzimmerm@skadden.com.
INDIANA: Sex Offender Visitation Policy Argued Before High Court
----------------------------------------------------------------
A state of Indiana's prison policy violates state law and the
U.S. Constitution by prohibiting virtually all visitations
between minors and child sex offenders, according to an attorney
for the Indiana Civil Liberties Union, The Associated Press
reports.
In statements before the state Supreme Court, ICLU attorney Ken
Falk, who is representing inmates in a class action lawsuit,
said not every imprisoned child sex offender poses a risk to
minors and some visits should at least be allowed if a physical
barrier separated the inmate and child.
For its part the state told justices, who could take weeks or
even months to rule on the case, that the policy was designed to
protect children. In a legal brief they also pointed out that
there had been past incidents when children were sexually abused
in visiting areas while guards were present. The same brief
cites that one prison official even recalled a grandfather being
caught on videotape physically molesting his granddaughter.
Under a policy imposed by the Department of Correction in 2001,
inmates who had been convicted of sex offenses against minors
were not allowed visits from children. The agency contends that
the offenders had a high risk of committing sex crimes again and
could traumatize children in psychological as well as physical
ways. In 2002, that policy was revised to allow certain child
sex offenders who had been denied visitation with children to
request a review for reconsideration. If granted permission, the
child visitor had to be an immediate family member and not a
victim of the offender. However, Mr. Falk argues that the
standards for getting permission were extremely difficult to
meet, and between September 2002 and June 2003, only nine
offenders were allowed visitation with a minor under the policy.
The ICLU claims that state law does provide some restrictions on
visitation involving child sex offenders, but prohibits it
outright only if there are reasonable grounds to believe it
would be unsafe. Mr. Falk said the DOC's policy exceeds the
law's provisions and that people have a federal constitutional
right to associate with family members and others, and inmates
had those rights. That included some child sex offenders,
according to Mr. Falk. He told justices, "The prisoner should be
allowed to visit if they can show they are not trying to gain
gratification during the visit." Mr. Falk also said that every
state prison had non-contact visitation areas, and isolated
visits could be arranged.
However, Deputy Attorney General Frances Barrow counters that
even if a child sex offender and minor were separated by a
physical barrier, "you still have that psychological affect of
face-to-face contact." She pointed out that there were more than
2,000 child sex offenders in state prisons, and suggested the
DOC would have to hire more guards to supervise an increase in
visits if the policy was not in place. In addition, according to
her, doing so would cost the cash-strapped agency to train
guards to recognize certain types of abuse and evaluate more
offenders to determine if they posed a risk.
ISRAEL RAILWAYS: Lawyer Files Suit in Tel Aviv Over Late Trains
---------------------------------------------------------------
An attorney initiated a lawsuit in Tel Aviv District Court
against Israel Railways over its trains' frequent late arrivals
and departures, The Ha'aretz reports.
The plaintiff, attorney Avner Gabbay, who lives in Kfar Sava and
takes the train frequently, asked the court to recognize the
suit as a class action. He said in his submission to the court,
"frequent and lengthy delays in the trains' schedule have become
a daily occurrence in recent months . On some lines, the
schedule appears to be a mere recommendation from Israel
Railways' point of view."
On the Tel Aviv-Kfar Sava line, according to Mr. Gabbay, delays
have been a frequent occurrence since last May. However, he
pointed out that there are also delays on other lines, and
therefore the class action should cover all Israel Railways
passengers. The suit, which places damages stemming from such
delays at tens of millions of shekels, noted that Israel
Railways does offer to compensate passengers for delays
exceeding half an hour. The standard compensation though is one
free ticket, good only for the line on which the delay occurred.
That offer is worthless for regular passengers, who buy monthly
passes rather than individual tickets, according to Mr. Gabbay.
In addition, he contends in his submission that even those
passengers who might benefit from a free ticket are often not
aware that they are entitled to compensation.
The suit asked the court to order Israel Railways to set clear
rules on compensating passengers for delays and to inform
passengers clearly of their right to compensation. It also asked
the court to ensure the rules provide appropriate compensation
to passengers who purchase monthly passes.
KEYSPAN CORPORATION: NY Court Approves Investor Suit Settlement
---------------------------------------------------------------
The United States District Court for the Eastern District of New
York approved the settlement of a consolidated securities class
action filed in the United States District Court for the Eastern
District of New York against KeySpan Corporation and certain of
its current and former officers and directors.
The lawsuit alleges, among other things, violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended, in connection with disclosures relating to or following
the acquisition of the Roy Kay companies.
In June 2004, the parties entered into a settlement agreement
which provided for the parties to settle the action for $13.8
million, all of which is to be funded by the insurance carrier
providing liability coverage for KeySpan's directors and
officers. The court approved the settlement on September 29,
2005 and the matter is now concluded.
The suit is styled "Dinallo et al v. Keyspan Corporation et al.,
case no. 1:01-cv-05852-ARR-MDG," filed in the United States
District Court for the Eastern District of New York,under Judge
Allyne R. Ross. Representing the plaintiffs is Ira Michael
Press of Kirby McInerney & Squire, 830 Third Avenue, 10th Floor
New York, NY 10022, Phone: (212)317-2300, Fax: (212)751-2540, E-
mail: ipress@kmslaw.com. Representing the Company are Michael
J. Chepiga and Paul Christopher Gluckow, Simpson Thacher &
Bartlett LLP, 425 Lexington Avenue, New York, NY 10017-3909,
Phone: 212-455-2598, Fax: 212-455-2502, E-mail:
M_chepiga@stblaw.com or pgluckow@stblaw.com.
LOUISIANA: Hurricane Katrina Victims to Sue FEMA Over Denied Aid
----------------------------------------------------------------
12 Louisiana residents are joining a class action against the
Federal Emergency Management Agency, stating that the agency has
"failed to fulfill its mandate" in providing housing assistance
to the storm's victims, the New York Times reports.
Russell Hayward and others are set to join the suit, which will
be filed in Federal District Court in New Orleans, Louisiana.
The suit charges FEMA with imposing "retroactively inconsistent
rules," in Mr. Hayward's case and others. In addition, it also
asserts that the federal agency has been inexcusably slow in
processing applications and has unfairly denied claims from
large families and unrelated individuals sharing the same
address. The plaintiffs reiterated that they are not seeking
damages, but immediate assistance.
Mr. Hayward of Long Beach, Mississippi recounts that when the
government check arrived 38 days after Hurricane Katrina
destroyed the trailer that he and her wife Tammy lived in, they
bought some towels, sheets and dishes. According to him, he and
his wife paid for emergency dental care and kept receipts for
everything linked to the $2,358 assistance check, which came
without explanation. However, three weeks later a letter
arrived at the couple's temporary home with friends in Texas,
specifying that the check they had receive was for rental help.
Mr. Hayward claims that when he called FEMA to ask about more
aid, he was denied additional help because he had misspent the
initial money.
A construction worker by profession, Mr. Hayward explains that
he is joining the suit, because, "I'm 42 years old and I have
never asked the government for a thing. I'm not just out for me.
I'm out for everyone that got hit and hurt. Everybody has been
done wrong."
With civil rights lawyers providing legal assistance throughout
the Gulf Coast, investigating claims related to housing,
employment, voting rights, education and environmental issues,
the soon to be filed complaint is likely to be one of many that
FEMA and other government entities will face in coming months.
Though cases against the federal government are difficult to
make, attorneys behind the case say that federal statutes
broaden FEMA's responsibilities in major disasters.
Howard O. Godnick, a lawyer with Schulte Roth & Zabel, a New
York law firm handling the case without charge for the Lawyers
Committee for Civil Rights Under Law told The New York Times,
"The declaration of disaster by the president and the
appropriation of funds by Congress established FEMA's
responsibilities as mandatory, not discretionary. We just want
to get the victims the benefits to which they are entitled and
for which the money has already been allocated."
Officials at FEMA told The New York Times that they could not
respond until they had a chance to review the complaint.
However, Nicol Andrews, a spokeswoman, did point out that the
agency had paid out more than $1 billion in temporary housing
assistance to nearly half a million applicants. She also
reiterated that the agency had informed the public about the
rules in several ways, including television and radio
announcements in shelters.
Ms. Andrews told The New York Times that rental assistance
checks were sent by the Treasury Department and explanations of
payment were mailed out by FEMA; the two were timed to arrive at
roughly the same time. "We are trying to work with everyone,"
she adds.
Aside from Mr. Hayward's, the complaints include accounts like
that of William Davis, from the Ninth Ward neighborhood of New
Orleans. Mr. Davis, also a construction worker, has 12 siblings,
several of whom lived off and on in their mother's home before
the hurricane. FEMA generally approves only one assistance
payment per household, and Mr. Davis said he was denied rental
help or a trailer because a brother had applied using the same
address. Mr. Davis, 52, who is now living in a hotel in Bossier
City, Louisiana told The New York Times, "Every time you call
FEMA nobody knows nothing, and all they say is 'no.'"
NORTHERN IRELAND: U.K. to Keep Close Eye on Trauma Civil Action
---------------------------------------------------------------
The class action trauma case being taken by 5,000 active and
retired police officers that served in the city of Derry in
Northern Ireland during the Troubles will be keenly watched
across the United Kingdom, according to a legal expert, The
Belfast Telegraph reports.
David Capper, a reader in law at Queen's University, told The
Belfast Telegraph that the proceedings at the Northern Ireland
High Court would have "profound" implications for other
organizations
In one of the biggest trauma civil actions ever taken in British
judicial history, the officers are suing the chief constable and
the Policing Board for injuries caused by "a failure to diagnose
or treat" post-traumatic stress disorder. Officers involved in
the case range in rank from constable to chief superintendent
with 2,000 of them still serving in the Police Service of
Northern Ireland, an earlier Class Action Reporter story
(November 10, 2005) reports.
The High Court battle, which began recently will center around
12 main test cases and could land the Government with a multi-
million pound payout.
Mr. Capper told The Belfast Telegraph that the action is the
biggest civil action law suit ever seen in Northern Ireland, and
could well become the longest-running such case in UK legal
history. He added that the outcome could have important
implications for other emergency services. He also told The
Belfast Telegraph, "It will be keenly watched by an awful lot of
commentators and an awful lot of interested parties. Its
implications are profound across the UK."
Explaining the central points of the case, Mr. Capper told The
Belfast Telegraph:
(1) "It's all about duty of care issues. It is not a
question of police officers becoming sick in the course
of their duties and therefore being entitled to
compensation."
(2) "Being exposed to this sort of problem goes with the
territory to a very large extent."
(3) "What they are alleging is that, having been in
horrific situations, they were not provided with
adequate after-care.
(4) "The liability of the police service will be judged in
the light of the knowledge of post traumatic stress
disorder at that time, not in the light of the
knowledge of post traumatic stress disorder that we
have today."
(5) "Another key point is the extent to which the police
service was aware that officers were suffering.
(6) "An employer cannot be liable for failing to do what
the employer didn't know about, or couldn't reasonably
be expected to know about."
ONEOK INC.: Appeals Jury Award in Yaggy Gas Leak Suit Verdict
-------------------------------------------------------------
The Kansas Supreme Court has yet to rule on ONEOK Inc.'s appeal
of a residential class verdict and the attorney fee award in the
class action filed three years ago against it in Wyandotte
County Court in Kansas, in connection with the natural gas
explosions and eruptions of natural gas geysers that occurred
at, and in the vicinity of, the Company's Yaggy facility in
January 2001.
The suit, which was originally filed in Reno County but later
moved by District Judge Richard Rome to Wyandotte County,
Kansas, hearing alleges that the January 2001 gas leaks in
ONEOK's Yaggy storage field northwest of Hutchinson is believed
to be responsible for a series of explosions that destroyed
several businesses and killed two people in Hutchinson, an
earlier Class Action Reporter story (September 27,2004) states.
The lawsuit includes anyone who owns a business or property in
the county, with attorneys contending that a gas leak and deadly
explosions in 2001 devalued all those properties.
While the plaintiffs sought damages in excess of $50 million
exclusive of punitive damages, the jury awarded $5 million in
actual damages to the residential class. No damages were awarded
to the business class. No punitive damages were awarded. The $5
million is covered by insurance. The jury awarded the
plaintiffs in the residential class $5.0 million in actual
damages, and the judge ordered the payment of $2.0 million in
attorney fees and $0.6 million in expenses, all of which is
covered by insurance. In the other class action relating to
business claims, the jury awarded no damages. The jury rejected
claims for punitive damages in both cases.
On April 11, 2005, the court denied the plaintiffs' motion for a
new trial and denied a post-trial motion filed by defendants.
The Company filed its notice of appeal of the residential class
verdict and the attorney fee award. The cases have now been
transferred to the Kansas Supreme Court for appeal. With the
exception of appeals, all litigation regarding the Company's
Yaggy facility has been resolved.
POTTERY BARN: Recalls 900 Tea-Light Holders Due to Fire Hazard
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Pottery Barn Outlet, of San Francisco, California is
voluntarily recalling about 900 units of "Spooky Tree Tea-Light
Holders."
The recalled candleholders could allow tea lights to have a high
flame. This poses a fire hazard and risk of burn injuries to
consumers. This product was previously recalled by Pottery Barn
on October 16, 2002. Pottery Barn Outlet has received one report
of a flare up. There are no reported injuries. During the
previous recall, there were 10 reports of candleholders flaring
and one consumer reported receiving a minor burn from the candle
wax.
The recalled candleholders are constructed of black wire and
stand about 18 inches high. The tree branches hold six tea light
candles in orange glass pots.
Manufactured in China, the holders were sold at all 13 Pottery
Barn Outlet and Williams-Sonoma Marketplace Outlet stores
nationwide from September 2005 through October 2005 for about
$23.
Remedy: Consumers should stop using the candleholders
immediately and return them to the Pottery Barn Outlet store for
a refund or exchange.
Consumer Contact: For additional information, contact Pottery
Barn Outlet at (800) 586-5615 between 7 a.m. and 5 p.m. PT
Monday through Saturday.
QWEST COMMUNICATIONS: Reaches $400M Deal in Consolidated Lawsuit
----------------------------------------------------------------
Qwest Communications settled its consolidated class action
shareholder suit for $400 million, erasing a huge dark cloud
stemming from an accounting scandal in 1999-2002, Rocky Mountain
News reports.
During a recent conference call, Qwest CEO Dick Notebaert said,
"This lawsuit has been a significant overhang on our stock in
our opinion, and its settlement represents an important step for
the company."
The proposed settlement resolves the biggest chunk of
shareholder lawsuits alleging that the Denver firm misled
investors and inflated its sales by billions of dollars during
the tenure of former CEO Joe Nacchio. Specifically, the deal
will cover Denver, Colorado-based Qwest, some former executives
and its board of directors.
However, an unidentified source familiar with the proposed
settlement, stated that the settlement does not include former
Mr. Nacchio and former Chief Financial Officer Robert Woodruff.
The plaintiffs in the case told The Rocky Mountain News that
they plan to proceed to trial against both defendants. According
to Qwest, Arthur Andersen, a co-defendant and firm's former
auditing firm, would be contributing $10 million to Qwest to
help settle the claims. The class in the $400 million settlement
includes all individuals who purchased Qwest stock between May
24, 1999, and July 28, 2002.
In a recent telephone interview with The Rocky Mountain News,
Mr. Notebaert likened the importance of resolving the company's
largest litigation to settling accounting fraud allegations with
the Securities and Exchange Commission for $250 million last
year. However, the tentative settlement isn't a sure thing yet,
since the plaintiffs in the consolidated lawsuit, which is being
led by the New England Health Care Employees Pension Fund, have
the option of terminating the agreement if Qwest isn't allowed
to distribute the $250 million SEC settlement to the class of
shareholders. That effectively would make the recent agreement a
$650 million settlement.
The class action settlement consolidates many lawsuits but
doesn't cover eight similar but smaller lawsuits filed mostly by
pension funds. One of those pension funds, the California State
Teachers' Retirement System, or Calstrs, told The Rocky Mountain
News that it intends to separately pursue litigation against
Qwest, Mr. Nacchio and others.
REFCO INC.: Mulls Class Action Status For Customers' Complaints
---------------------------------------------------------------
Refco Inc. is contemplating a move to have the lawsuits filed by
customers who are demanding their money back consolidated into a
class action, stating that it would be the most cost-effective
way to settle a dispute that already involves more than $1.8
billion in customer claims, The BusinessWeek reports.
The commodities broker told U.S. Bankruptcy Judge Robert Drain
in a recent filing that 45 customers of its Refco Capital
Markets Ltd. unit have sued to get their money back since Refco
filed for bankruptcy on October 17. According to Refco's filing
their claims total $1.84 billion, and "hundreds or thousands
more account holder complaints likely will be filed." Judge
Drain set a November 18 hearing date on Refco's request for a
class action.
SUMMIT PROPERTIES: Executes Settlement For NC Shareholder Suit
--------------------------------------------------------------
Summit Properties, Inc. executed a settlement agreement with
parties in the purported class action complaint filed against
it, Camden Property Trust, and member of the Company's board of
directors, in the United States District Court for the Western
District of North Carolina, Charlotte Division.
An alleged Summit stockholder filed the suit initially in the
General Court of Justice, Superior Court Division, of the State
of North Carolina, County of Mecklenburg, alleging that the
merger between the Company and Summit and the acts of the Summit
directors constitute a breach of the Summit defendants'
fiduciary duties to Summit stockholders. The plaintiff in the
lawsuit seeks, among other things:
(1) a declaration that each defendant has committed or
aided and abetted a breach of fiduciary duty to the
Summit stockholders,
(2) to preliminarily and permanently enjoin the Merger,
(3) to rescind the Merger in the event that it is
consummated
(4) an order to permit a stockholders' committee to ensure
an unspecified "fair procedure, adequate procedural
safe-guards and independent input by plaintiff" in
connection with any transaction for Summit shares,
(5) unspecified compensatory damages and
(6) attorneys' fees.
On November 3, 2004, the Company removed the lawsuit to the
United States District Court for the Western District of North
Carolina, Charlotte Division, and filed an Answer and
Counterclaim for declaratory judgment denying the plaintiff's
allegations of wrongdoing. On March 10, 2005, the parties to
the action agreed on and executed a binding memorandum of
understanding setting forth the terms of a settlement of the
litigation. The parties also agreed, subject to the conditions
described below, to enter into a stipulation of settlement and
use best efforts to gain approval of the settlement by the
court. Under the terms of the settlement, the defendants admit
to no wrongdoing or fault. The memorandum of understanding for
the proposed settlement of the litigation contemplates a
dismissal of all claims with prejudice and a release in favor of
all defendants of any and all claims related to the Merger that
have been or could have been asserted by the plaintiffs or any
members of the putative class. In connection with negotiations
relating to the memorandum of understanding, the parties agreed
to include, and have included, in the joint proxy
statement/prospectus relating to the Merger additional
disclosures regarding the merger.
On September 23, 2005, the parties to the action executed a
stipulation of settlement. Under the terms of the stipulation,
the defendants admit to no wrongdoing or fault. The stipulation
contemplates a dismissal of all claims with prejudice and a
release in favor of all defendants of any and all claims related
to the merger that have been or could have been asserted by the
plaintiffs or any members of the putative class. In connection
with negotiations relating to the stipulation, the parties
agreed to include, and have included, in the joint proxy
statement/prospectus relating to the merger additional
disclosures regarding the merger.
The stipulation of settlement is subject to the customary
conditions, including final court approval of the settlement.
If the conditions are satisfied, subject to final court approval
of the settlement and dismissal of the action by the court with
prejudice, the plaintiff's counsel will seek and Camden, as
successor to the Company, will pay an amount not to exceed in
the aggregate $383,000 in settlement of this action for
attorneys' fees and expenses. Subject to any order of the
court, any attorneys' fees and expenses awarded by the court to
plaintiff's counsel will be paid by Camden, as successor to the
Company, on behalf of all defendants within five business days
after final court approval of the settlement.
The suit is styled "Krantz v. Summit Properties In, et al, case
no. 3:04-cv-00558," filed in the United States District Court
for the Western District of North Carolina, Charlotte Division
under Judge Graham Mullen. Representing the plaintiffs is Bruce
M. Simpson of James, McElroy & Diehl, 600 S. College St.
Charlotte, NC 28202 Phone: 704/372-9870 Fax: 333-5508.
Representing the Company are John O. Farley, Stephen D. Poss of
Goodwin Proctor, LLP, Exchange Place Boston, MA 02109 Phone:
617/570-1000 Fax: 523-1231; and George V. Hanna, III, Moore &
Van Allen 100 No. Tryon St. Suite 4700 Charlotte, NC 28202-4003
Phone: 704/331-1000 Fax: 331-1159.
TARGET CORPORATION: Recalls 290T Tea Light Candles For Fire Risk
----------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Target Corporation, of Minneapolis, Minnesota is
voluntarily recalling about 290,000 units of Homer Brand Tea
Light Candles.
According to the Company, the recalled candles can burn with a
high flame and melt the plastic holders. This poses a fire
hazard and a burn hazard to consumers. Target has received
reports of 33 incidents, some involving minor property damage.
There have been two reports of minor injuries, including a
finger cut and a cheek burn from hot wax.
The recalled tea light candles were sold in the following six
different scents/colors: Coastal Mist (Blue), Wild Currant
(Red), Sandalwood (Brown), Tahitian Vanilla (Ivory), Sonoma Pear
(Green) and Jasmine (White).
The tea light candles measure 1 r inches wide by _ inch high.
Each of the candles comes in a plastic holder. They were sold 12
candles to a box. "Home" and "Tea lights" are printed on the top
of the box. "Distributed by Target Corporation" and the name of
the candle scent are printed on the bottom of the box.
Manufactured in China, the candles were sold exclusively at
Target stores nationwide from March 2005 through September 2005
for about $3.
Remedy: Consumer should stop using the tea light candles
immediately and return them to the nearest Target store for a
Target GiftCard worth the value of the returned candle plus
applicable state tax.
Consumer Contact: For additional information, contact Target at
(800) 440-0680 between 7 a.m. and 6 p.m. CT Monday through
Friday, or visit Target's Web site: http://www.target.com.
THANE INTERNATIONAL: Recalls 290T Air Purifiers For Fire Hazard
---------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Well Brain International Ltd., of Tsimshatsui, Hong
Kong, China and Thane International Inc., of La Quinta,
California is voluntarily recalling about 290,000 units of
Perfect Air UltraT Air Purifiers.
An overheating capacitor in these air purifiers can cause arcing
in a connecting wire, which poses the risk of fire. Thane has
received six reports of incidents involving these air purifiers
catching on fire or melting. Thane has also received six units,
which were returned by customers and show some evidence of
melting and/or charring. No injuries have been reported.
The Perfect Air UltraT is an air filtration device to counter
indoor air pollution. It measures approximately 12 inches high,
15 inches wide and 6 inches deep, and weighs about 3.2 pounds.
The outer casing is made of white plastic and has a gray
function plate that is inserted into the top of the unit. The
purifier has four stacked tubular rows with a series of
horizontal vents along the length of each row. "Perfect Air
UltraT" is not written on the unit, but is written on the
instruction booklet included with the unit.
Manufactured in China, the air purifiers were sold through
television infomercials and via direct sales on Thane's Web site
from February 2004 through December 2004 for about $100.
Remedy: Consumers should stop using the air purifiers
immediately and contact Thane for instructions on how to return
them and receive a coupon for credit toward other Thane
products.
Consumer Contact: Call Thane toll-free at (800) 895-0986
anytime, visit Thane's Web site at http://www.thane.comor e-
mail the firm: thane@ecustomerresponse.com.
VITRIA TECHNOLOGY: Final Fairness Hearing Set April 2006 in NY
--------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated
securities class action filed against Vitria Technology, Inc.,
certain of its officers and directors and the underwriters of
its initial public offering (IPO) is set for April 24,2006 in
the United States District Court for the Southern District of
New York.
In November 2001, the Company and certain of its officers and
directors were named as defendants in a class action shareholder
complaint filed in the United States District Court for the
Southern District of New York, now captioned "In re Vitria
Technology, Inc. IPO Securities Litigation, Case No. 01-CV-
10092."
In the amended complaint, the plaintiffs allege that the
defendants violated federal securities laws because the
Company's IPO registration statement and prospectus contained
untrue statements of material fact or omitted material facts
regarding the compensation to be received by, and the stock
allocation practices of, the IPO underwriters. The plaintiffs
seek unspecified monetary damages and other relief.
Similar complaints were filed in the same court against hundreds
of public companies that first sold their common stock since the
mid-1990s. The IPO Lawsuits were consolidated for pretrial
purposes before United States Judge Shira Scheindlin of the
Southern District of New York. Defendants filed a global motion
to dismiss the IPO-related lawsuits on July 15, 2002. In
October 2002, the Company's officers and directors were
dismissed without prejudice pursuant to a stipulated dismissal
and tolling agreement with the plaintiffs. On February 19,
2003, Judge Scheindlin issued a ruling denying in part and
granting in part the Defendants' motions to dismiss.
In June 2003, Vitria's Board of Directors approved a resolution
tentatively accepting a settlement offer from the plaintiffs
according to the terms and conditions of a comprehensive
Memorandum of Understanding negotiated between the plaintiffs
and the Issuers. Under the terms of the settlement, the
plaintiff class will dismiss with prejudice all claims against
the Issuers, including Vitria and its current and former
directors and officers, and the Issuers will assign to the
plaintiff class or its designee certain claims that they may
have against the IPO underwriters. In addition, the tentative
settlement guarantees that, in the event that the plaintiffs
recover less than $1.0 billion in settlement or judgment against
the underwriter defendants in the IPO Lawsuits, the plaintiffs
will be entitled to recover the difference between the actual
recovery and $1.0 billion from the insurers for the Issuers.
In June 2004, Vitria executed a final settlement agreement with
the plaintiffs consistent with the terms of the Memorandum of
Understanding. The settlement is still subject to a number of
conditions, including action by the Court certifying a class
action for settlement purposes and formally approving the
settlement. The underwriters have opposed both the certification
of the class and the judicial approval of the settlement. On
February 15, 2005, the Court issued a decision certifying a
class action for settlement purposes and granting preliminary
approval of the settlement subject to modification of certain
bar orders contemplated by the settlement. In addition, the
settlement is still subject to statutory notice requirement as
well as final judicial approval.
On August 31, 2005, the Court reaffirmed class certification and
preliminary approval of the modified settlement in a
comprehensive Order. In addition, the Court approved the form of
Notice to be sent to members of the settlement classes, which
will be published and mailed beginning November 15, 2005. The
Court has set a Final Settlement Fairness Hearing on the
settlement for April 24, 2006. The settlement is still subject
to statutory notice requirement as well as final judicial
approval.
The suit is styled "IN RE VITRIA TECHNOLOGY, INC. INITIAL PUBLIC
OFFERING SECURITIES LITIGATION," filed in relation to "IN RE
INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No.
21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
WELLS REAL: GA Court Yet To Rule on Appeal of Lawsuit Dismissal
---------------------------------------------------------------
Plaintiffs seek opportunity to appeal the dismissal of a class
action filed against Wells Real Estate Investment, Inc.'s
president and director Leo. F. Wells III in the Superior Court
of Gwinnett County, Georgia.
A suit styled "Hendry et al. v. Leo F. Wells, III et al., Civil
Action No. 04-A-2791 2," was initially filed. The Court granted
the plaintiffs' motion to permit voluntary dismissal of this
suit, and it was subsequently dismissed without prejudice. In
November 2004, the same plaintiffs filed a second putative class
action complaint against, among others, Mr. Wells, Wells Capital
and Wells Management, styled "Hendry et al. v. Leo F. Wells, III
et al., Civil Action No. 04A-13051 6."
On January 28, 2005, the defendants filed motions for summary
judgment and motions to dismiss the plaintiffs' claims.
Pursuant to orders entered July 1, 2005, the Court granted the
defendants' motions to dismiss and for summary judgment on all
counts in the complaint. Thus, this action has now been
dismissed, subject to the plaintiffs' right to file a notice of
appeal within the required time period. On August 3, 2005, the
plaintiffs filed a motion requesting the Court to re-enter the
orders to give the plaintiffs an opportunity to file a motion
for reconsideration or notice of appeal. Both the plaintiffs
and the defendants have filed briefs supporting their respective
positions, and the plaintiffs' motion is still pending before
the Court.
The suit is styled "HENDRY VS WELLS ET AL, case no. 04-A-13051-
6," filed in the Gwinnett Superior Court, Georgia, under Judge
Ronnie K. Batchelor. Lawyers Merle Arnold, William Droze, Kevin
Maxim, J. Kirk Quillian, Daniel Reinhardt, Donald Swift and
Thomas Tate represent defendants Leo F. Wells, Wells Capital
Inc., Wells Management Co., Inc. and Wells Real Estate Fund I.
Lawyer Vincent Gresham represents plaintiffs Karen Beneda,
Robert Beneda, James Hendry and William Mullin.
WEYERHAUSER CO.: Continues To Face Canadian Antitrust Litigation
----------------------------------------------------------------
Weyerhauser Co. and other linerboard manufacturers continue to
face a class action filed in the Superior Court of Justice in
Ontario, Canada, alleging antitrust violations on behalf of all
Canadians who purchased corrugated products, including sheets
and containers and/or linerboard, during the period of time from
1993 and continuing until at least the end of 1995.
La Cie McCormick Canada Company filed the suit in March 2004,
seeking relief under various theories for $25 million in general
damages and $10 million in punitive damages. At this stage, the
company cannot calculate what portion of the damages requested
would be argued as the Company's responsibility. Canadian law
does not provide for a trebling of antitrust damages, the
company said in a disclosure to the Securities and Exchange
Commissions.
WEYERHAUSER CO.: Seeks Review of Lawsuit Summary Judgment Ruling
----------------------------------------------------------------
Weyerhauser Co. asked the United States Supreme Court for a
discretionary review of the United States Ninth Circuit Court of
Appeals' ruling upholding summary judgment denial in the
Company's favor in the class action filed against it, alleging
that from 1996 to the present, the company had monopoly power or
attempted to gain monopoly power in the Pacific Northwest market
for alder logs and finished alder lumber. The suit was
initially filed in the United States District Court in Oregon.
In April 2003, the jury returned a verdict in favor of one of
the plaintiffs in the amount of $26 million, which was
automatically trebled to $79 million under the antitrust laws.
The company recognized a pretax charge of $79 million in the
first quarter of 2003. The company's motion for a judgment
notwithstanding the verdict was denied in July 2003. The
company appealed the matter. A hearing on the appeal occurred
in December 2004. The company plans to ask for discretionary
review by the U.S. Supreme Court.
In January 2005, the company received a copy of a "complaint in
equity" filed in U.S. District Court in Oregon to set aside the
judgment in the Initial Alder Case on behalf of a plaintiff who
did not prevail in the jury trial held in April 2003. The
plaintiff alleges a fraud was committed on the court during the
initial trial and argues that as a result the judgment against
the plaintiff should be vacated and a new trial set on
plaintiff's claim of monopolization of the alder sawlog market.
The complaint alleges damages after trebling of $20 million.
The company denies the allegations in the complaint and is
actively defending the matter. The appeals court upheld the
decision. In September 2005, the company asked for
discretionary review of the Initial Alder Case by the U.S.
Supreme Court.
In April 2003, two separate lawsuits were filed in U.S. District
Court in Oregon alleging that the company violated antitrust
laws by monopolizing the markets for alder sawlogs and finished
alder lumber. The first suit (the Westwood case) was settled in
March 2004, for approximately $35 million. The second suit was
brought by Coast Mountain Hardwoods, Inc., a Canadian company
that sold its assets to the company in 2000. In April 2004, the
company announced a settlement of the Coast Mountain case for
$14 million.
WEYERHAUSER CO.: Settling With Opt-Out Plaintiffs in PA Lawsuit
---------------------------------------------------------------
Weyerhauser Co. is working to settle with opt-out plaintiffs in
the two civil antitrust lawsuits filed against it and other
major containerboard and packaging producers in the United
States District Court for the Eastern District of Pennsylvania.
The suits were filed in May 1999. The complaint in the first
case alleged the defendants conspired to fix the price of
linerboard and that the alleged conspiracy had the effect of
increasing the price of corrugated containers. The suit
requested class certification for purchasers of corrugated
containers during the period from October 1993 through November
1995. The complaint in the second case alleged that the company
conspired to manipulate the price of linerboard and thereby the
price of corrugated sheets. The suit requested class
certification for purchasers of corrugated sheets during the
period from October 1993 through November 1995.
In September 2001, the district court certified both classes. In
September 2003, the company, Georgia-Pacific and International
Paper requested preliminary approval of a $68 million settlement
of the class action litigation. The company recognized a pretax
charge of $23 million in the third quarter of 2003, representing
the company's portion of the settlement. Final approval of the
settlement occurred in December 2003.
Approximately 165 members of the classes opted out of the class
and filed thirteen lawsuits against the company and other
producers. The company has settled three of the lawsuits and
recognized a charge of $12 million in the first quarter of 2005.
It is possible that additional class members that opted out may
file lawsuits against the company in the future. The company has
not recorded a reserve for the remaining opt-out cases and is
unable to estimate at this time the amount of charges, if any,
that may be required for this matter in the future.
Asbestos Alerts
ASBESTOS LITIGATION: Sempra, SDG&E Respond to Abatement Lawsuit
---------------------------------------------------------------
Utilities distributor Sempra Energy continues to defend itself
against a suit, which the San Diego County filed last August 30,
2005 for asbestos-related violations. In Sempra's 2005-3rd
quarter report to the Securities and Exchange Commission, the
Company contended that those claims lacked merit.
A complaint for Civil Penalties against Sempra Energy, SDG&E,
and others were filed for allegedly violating certain legal
requirements applicable to the abatement, handling and disposal
of asbestos-containing materials during the demolition of a
natural gas storage facility in 2001. The complaint seeks an
unspecified penalty amount but involves potential monetary
sanctions in excess of US$100,000.
In the March 4, 2005 Class Action Reporter edition, Sempra
Energy and SDG&E, in January 2005, received a grand jury
subpoena from the US Attorney's Office in San Diego seeking
documents related to this matter and are fully cooperating with
the investigation.
San Diego, CA-based Sempra Energy (NYSE: SRE) distributes
natural gas to some 6.2 million customers and electricity to 1.3
million customers through its Southern California Gas (SoCalGas)
and San Diego Gas & Electric (SDG&E) utilities.
ASBESTOS LITIGATION: Pepco Reports 400 Dismissed Cases in 3Q05
--------------------------------------------------------------
In its 2005-3rd quarter report to SEC, Pepco Holdings Inc (NYSE:
POM) reports that, since the Company's initial filings in 1993,
additional individual asbestos suits have been filed against
Pepco, and about 400 cases dismissed with prejudice, either
voluntarily by the plaintiff or by the Court.
Of about 250 remaining asbestos cases pending against Pepco,
about 85 cases were filed after December 19, 2000 and have been
tendered to Mirant Corp for defense and indemnification pursuant
to the terms of the Asset Purchase and Sale Agreement.
During 1993, Pepco was served with Amended Complaints filed in
the state Circuit Courts of Prince George's County, Baltimore
City and Baltimore County, Maryland in separate ongoing,
consolidated proceedings known as "In re: Personal Injury
Asbestos Case." Pepco and other corporate entities were brought
into these cases on a theory of premises liability.
Under this theory, the plaintiffs argued that Pepco was
negligent in not providing a safe work environment for employees
or its contractors, who allegedly were exposed to asbestos while
working on Pepco's property. Initially, a total of about 448
individual plaintiffs added Pepco to their complaints. While the
pleadings are not entirely clear, it appears that each plaintiff
sought US$2 million in compensatory damages and US$4 million in
punitive damages from each defendant.
While the aggregate amount of monetary damages sought in the
remaining suits, excluding those tendered to Mirant, exceeds
US$400 million, Pepco believes the amounts claimed by current
plaintiffs are greatly exaggerated.
Washington, DC-based Pepco Holdings distributes electricity to
more than 1.8 million customers and natural gas to nearly
120,000 customers through its utility subsidiaries. The Company
also has international energy interests.
ASBESTOS LITIGATION: TODCO Defends Lawsuits in MS Circuit Courts
----------------------------------------------------------------
TODCO (NYSE: THE) defends several cases that have been filed in
Mississippi Circuit Courts involving 764 plaintiffs that claim
personal injury from asbestos exposure in the course of their
employment by the Defendants between 1965 and 2002, according to
the Company's 2005-3rd quarter report to the Securities and
Exchange Commission.
The complaints name as defendants some of TODCO's subsidiaries
and some of Transocean's subsidiaries, in which TODCO may owe
indemnity, and other unaffiliated defendant companies, including
companies that allegedly manufactured drilling related products
containing asbestos that are the subject of the complaints.
The number of unaffiliated defendant companies involved in each
complaint ranges from around 20 to 70.
The complaints allege that the defendant drilling contractors
used asbestos-containing products in offshore drilling
operations, land based drilling operations and in drilling
structures, drilling rigs, vessels and other equipment and
assert claims based on, among other things, negligence and
strict liability, and claims authorized under the Jones Act. The
plaintiffs seek awards of unspecified compensatory and punitive
damages.
Based in Houston, Texas, TODCO provides services to exploration
and production businesses operating in the Gulf of Mexico, in
the Gulf Coast inland marine region, as well as in Trinidad and
Venezuela. TODCO, which was a part of the R&B Falcon business
Transocean acquired, operates a fleet of about 70 drilling rigs.
Transocean controls 22% of the Company.
ASBESTOS LITIGATION: Legrand Subsidiary Workers Seek Payments
-------------------------------------------------------------
Electrical equipment maker Legrand Holdings SA states that, in
the second half of 2001, about 180 current and former employees
of BTicino SpA, its main Italian subsidiary, commenced two class
actions and three individual suits against the Italian social
security agency for early retirement payments citing alleged
exposure to asbestos during the manufacture of products at the
Company's Torre del Greco facility.
BTicino, the employer, is a party to the suit, as is customary
under Italian law. If the employees prove long-term (at least 10
years) exposure to asbestos, they may be entitled to retire
early and, as a result, could receive higher retirement payments
over the course of their retirement, which the social security
agency could seek to recover from the Group.
Legrand Holdings SA, long known for its light switches, makes
dimmers, timers, and circuit breakers for nearly every
application. Other products include heating controls, audio and
video house porters, video security systems, and distribution
cabinets.
ASBESTOS LITIGATION: Harsco Records 31,393 Pending Suits in 3Q05
----------------------------------------------------------------
Harsco Corp (NYSE: HSC) states that, as of September 30, 2005,
there are 31,393 pending asbestos personal injury claims filed
against it, according to the 10-Q report submitted to the
Securities and Exchange Commission.
The New York Supreme Court for New York County in New York State
recorded 26,293 of the Company's pending cases. Almost all of
the NY complaints contain a standard claim for damages of US$20
million or US$25 million against about 90 defendants, regardless
of the individual's alleged medical condition, and without
identifying any Company product as the source of plaintiff's
asbestos exposure.
Various Mississippi state courts recorded 4,772 pending cases,
in which most contain a standard claim for an unstated amount of
damages against the numerous defendants (typically 240 to 270),
without identifying any Company product as the source of
plaintiff's asbestos exposure. Significantly, 2,877 of those
cases were filed in, or removed to, the Mississippi federal
district court, which is in the process of transferring them to
the federal Multidistrict Asbestos Docket in Philadelphia.
In accordance with an order of the MDL court entered several
years ago, the transferred cases are deemed "administratively
dismissed," subject to being reinstated only when each
individual plaintiff can demonstrate both a present physical
injury and that asbestos exposure resulted from the products or
activities of identifiable defendants.
The other claims, totaling about 328, are filed in various
counties in several state courts, and in certain Federal
District Courts, and those complaints assert lesser amounts of
damages than the New York cases or do not state any amount
claimed.
As of September 30, 2005, the Company has obtained dismissal by
stipulation, or summary judgment prior to trial, in all cases
that have proceeded to trial. To date, the Company has been
dismissed from 11,808 cases.
As of September 30, 2005, the Company was listed as a defendant
in about 258 pending cases in the New York Supreme Court for New
York County that have been designated as Active or "In Extremis"
and assigned to trial groups. To date, the Company has been
dismissed as a defendant prior to trial in all New York cases
that have proceeded to trial. The number of these dismissals is
currently about 1,496.
The Company has not paid any amounts in settlement of these
cases, with the exception of three settlements for nominal
amounts paid by the Company's insurance carrier. The Company's
insurance carrier has also paid all legal costs and expenses to
date. The Company has liability insurance coverage available
under various primary and excess policies that the Company
believes will be available, if necessary, to substantially cover
any liability that might ultimately be incurred on these claims.
ASBESTOS LITIGATION: Hercules Inc. Notes 31,075 Claims in 3Q05
--------------------------------------------------------------
As of September 30, 2005, Hercules Inc (NSYE: HPC) declares
about 31,075 unresolved asbestos-related personal injury claims,
of which about 985 were premises claims and the rest were
products claims, according to the Company's 2005-3rd quarter
report submitted to the Securities and Exchange Commission.
There were also about 1,535 unpaid claims, which have been
settled or are subject to the terms of a settlement agreement.
Moreover, as of September 30, 2005, there were about 1,146
claims which have either been dismissed without payment or are
in the process of being dismissed without payment, but with
plaintiffs retaining the right to re-file should they be able to
establish exposure to an asbestos-containing product for which
the Company bears liability.
Between January 1, 2004 and December 31, 2004, the Company
received about 8,305 new claims, about one third of which were
included in "consolidated" complaints naming one hundred or more
plaintiffs and a large number of defendants, but providing
little information connecting any specific plaintiff's alleged
injuries to any specific defendant's products or premises.
Between January 1, 2005 and September 30, 2005, the Company
received about 3,130 new claims, none of which were in
consolidated complaints. For the same period, the Company spent
about US$31.3 million on these matters, including about US$24.1
million in settlement payments and about US$7.2 million for
defense costs.
Based in Wilmington, Delaware, Hercules Inc.'s pulp and paper
division supplies water-treatment chemicals and services to the
pulp and paper industry, and its Aqualon subsidiary makes
thickeners for water-based products such as latex paints,
printing inks, and oral hygiene products. Burdened by debt and
open to a buyer, the Company has survived a proxy fight waged by
former minority stakeholder International Specialty Products.
ASBESTOS LITIGATION: HPC Deals With Insurers to Reimburse Costs
---------------------------------------------------------------
Hercules Inc. (NYSE: HPC) undertook efforts to negotiate with
certain of its other excess insurance carriers for reimbursement
of defense costs and indemnity payments relating to these
asbestos-related liabilities, according to a Securities and
Exchange Commission report.
However, those efforts did not progress at a rate satisfactory
to the Company. As a result, on November 27, 2002, the Company
sued the solvent excess insurance carriers that provided
insurance coverage for asbestos-related liabilities in the
Superior Court of Delaware, New Castle County. In August 2004
and continuing through October 2004, the Company entered into
settlements with all of the insurers named in that lawsuit. The
lawsuit was dismissed in early November 2004.
Effective August 23, 2004, the Company entered into a
comprehensive settlement agreement with respect to those
insurance policies issued by certain underwriters at Lloyd's,
London, and reinsured by Equitas Ltd and related entities. As
part of that settlement, during 2004-3rd quarter, Equitas paid
US$30.0 million to the Company and placed US$67.0 million into a
trust. The First Settlement Agreement generally provides for the
payment of money to the Company in exchange for the release by
the Company of past, present and future claims under those
policies and the cancellation of those policies; the agreement
by the Company to indemnify the underwriters from any such
claims asserted under those policies; and the impact on the
settlement should federal asbestos reform legislation be enacted
on or before January 3, 2007.
If federal asbestos reform legislation is enacted into law on or
prior to January 3, 2007, the Company will be required to return
any funds remaining in the trust to Equitas should certain
criteria be met.
On October 8, 2004, the Company entered into a comprehensive
settlement agreement with respect to certain insurance policies
issued by various insurance companies operating in the London
insurance market, and by one insurance company located in the
United States. Under the terms of the Second Settlement
Agreement, in 2005, the Company began to receive payments from
the participating insurers, which will total about US$102.2
million over a four-year period ending in 2008.
The payments will be placed by the insurance companies into a
trust, which have been and are continuing to be used to
reimburse the Company for costs it incurs to resolve asbestos
claims from and after October 8, 2004. As of September 30, 2005,
US$35.3 million of the US$102.2 million has been placed into the
trust.
The Second Settlement Agreement generally provides for the
payment of money to the Company in exchange for the release by
the Company of past, present and future claims under those
policies and the cancellation of such policies; and the
agreement by the Company to indemnify the released insurers from
any such claims asserted under those policies.
The Company also reached settlement agreements with additional
insurers whose level of participation in the Company's insurance
program is substantially lower than the aggregate participation
of the other insurers referred. The Other Settlement Agreements
originally provided for cash payments to be received by the
Company at various times commencing in 2004 and ending in 2011.
During 2004, however, one insurer elected to pre-pay its
obligations at a discounted rate. As a result of that pre-
payment and other scheduled 2004 payments, combined with US$6.0
million of payments received during the nine months ended
September 30, 2005, the Company has received all amounts due
under the Other Settlement Agreements.
In addition, effective October 13, 2004, the Company reached a
confidential settlement agreement with the balance of its
solvent excess insurers whereby a significant portion of the
costs incurred by the Company with respect to future asbestos
product liability claims will be reimbursed, subject to those
claims meeting certain qualifying criteria.
As a result of the above settlements, the Company is expected to
have available to it a combination of cash and trust fund monies
which can be used to pay or reimburse the Company for a
significant portion of the defense costs and settlement payments
that may be incurred by the Company with respect to its
asbestos-related liabilities.
There have been no changes made regarding the underlying basis
of the asbestos-related assets and liabilities during the nine
months ended September 30, 2005.
The Wilmington, DE-based Company adjusted its accrual for
present and future potential asbestos claims before anticipated
insurance recoveries at December 31, 2004 to US$260.2 million,
reflecting the low end of the range noted above in accordance
with generally accepted accounting principles.
ASBESTOS LITIGATION: Navigators Group Holds 146 Pending Claims
--------------------------------------------------------------
The Navigators Group Inc (NASDAQ: NAVG) divulges that its
exposure to asbestos and environmental liability principally
stems from marine liability insurance written on an occurrence
basis during the mid-1980s.
The Company's participation on such risks is in the excess
layers, which requires the underlying coverage to be exhausted
prior to coverage being triggered in our layer. In many
instances the insurer participates in the defense and ultimate
settlement of these claims, and it is generally a minor
participant in the overall insurance coverage and settlement.
The Company counted 146 claims at September 30, 2005, of which
26 are new claims and nine are settled or resolved. As of
December 31, 2004, the Company counted 129 claims.
The reserves the New York, NY-based Company has established for
asbestos exposures are for:
(1) Estimated losses for excess insurance policy limits exposed
to class action suits against two insureds involved in the
manufacturing or distribution of asbestos products;
(2) Other insureds not directly involved in the manufacturing or
distribution of asbestos products, but that have more than
incidental asbestos exposure for their purchase or use of
products that contained asbestos;
(3) Attritional asbestos claims that could be expected to occur
over time; and
(4) The 2004 settlement of a large claim exposed to a class
action suit which settlement will be paid over seven years
starting in June 2005.
For the three months ended September 30, 2005, the Company
recorded its gross of reinsurance loss reserves for asbestos at
US$74,799.00. Its net reserves are at US$30,221.00. For the nine
months ended September 30, 2005, the Company recorded its gross
of reinsurance loss reserves for asbestos at US$74,799.00. Its
net reserves are at US$30,221.00.
The Navigators Group's main insurance subsidiaries, Navigators
Insurance and NIC Insurance, write ocean and marine insurance
including hull, energy, liability, and cargo insurance, as well
as property insurance for onshore energy concerns. The Company
also formed a division specializing in professional liability
insurance.
ASBESTOS LITIGATION: Goodrich Faces Claims as Coltec's Successor
----------------------------------------------------------------
A leader in aerospace systems, Goodrich Corp (NYSE: GR) reports
that a limited number of asbestos-related claims have been
asserted against it as "successor" to Coltec or one of its
subsidiaries.
In May 2002, the Company completed the tax-free spin-off of its
Engineered Products segment, which at the time of the spin-off
included EnPro Industries Inc and Coltec Industries Inc. At that
time, two subsidiaries of Coltec were defendants in a
significant number of personal injury claims relating to alleged
asbestos-containing products sold by those subsidiaries.
The Company believes that it has substantial legal defenses
against these claims, as well as against any other claims that
may be asserted against it. In addition, the agreement between
EnPro and the Company that was used in the spin-off provides the
Company with an indemnification from EnPro covering, among other
things, these liabilities.
The success of any such asbestos-related claims would likely
require, as a practical matter, that Coltec's subsidiaries were
unable to satisfy their asbestos-related liabilities and that
Coltec was found to be responsible for these liabilities and was
unable to meet its financial obligations
If the Company is ultimately found to be responsible for the
asbestos-related liabilities of Coltec's subsidiaries, it
believes such finding would not have a material adverse effect
on its financial condition, but could have a material adverse
effect on the results of operations and cash flows in a
particular period. However, because of the uncertainty as to the
number, timing and payments related to future asbestos-related
claims, there can be no assurance that any such claims will not
have a material adverse effect on the Company's financial
condition, results of operations and cash flows.
Charlotte, NC-based Goodrich Corp, formerly known as tire maker
BFGoodrich, is now focused on its three aerospace divisions: the
Engine Systems, the Airframe Systems, and the Electronic
Systems.
ASBESTOS LITIGATION: St. Paul Cites US$264Mil Net Loss in 3Q05
--------------------------------------------------------------
The St. Paul Travelers Companies Inc. (NYSE: STA) reports, in
its 2005-3rd quarter report to the Securities and Exchange
Commission, that its net asbestos losses and expenses paid in
2005's first nine months were US$264 million, compared with
US$199 million in the same period of 2004.
About 36% in 2005's first nine months and 15% in 2004's first
nine months of total net paid losses relate to policyholders
with whom the Company previously entered into settlement
agreements that would limit its liability. The increase in net
payments in 2005 over 2004 was primarily driven by inclusion of
the SPC business for 2005's full nine-month period and
substantial reinsurance recoveries in the 2004-3rd quarter.
These recoveries related to gross payments made in prior
quarters. At September 30, 2005, net asbestos reserves totaled
US$3.67 billion, compared with US$3.11 billion at September 30,
2004. The increase in reserves was driven by a provision to
strengthen reserves in the 2004-4th quarter.
A portion of the Company's loss reserves are for asbestos and
environmental claims and related litigation, which aggregated
US$4.11 billion at September 30, 2005.
The St. Paul, MN-based Company offers personal and commercial
(the company is the second largest business insurer in the US,
behind AIG) liability and casualty, property, workers'
compensation, auto, marine, and other coverage to companies of
all sizes in North America and the UK.
ASBESTOS LITIGATION: Hartford Financial Still Confronts Claims
--------------------------------------------------------------
The Hartford Financial Services Group Inc (NYSE: HIG) continues
to receive asbestos claims, which relate primarily to bodily
injuries asserted by people who came in contact with asbestos or
products containing asbestos, according to a report filed to the
Securities and Exchange Commission.
As of September 30, 2005, the Hartford, CT-based insurer
recorded net reserves of US$2.7 billion, US$2.3 billion and
US$371 for asbestos and environmental, respectively, which is
within an estimated range, unadjusted for covariance, of US$2.0
billion to US$3.1 billion.
The process of estimating asbestos and environmental reserves
remains subject to a wide variety of uncertainties. Due to these
uncertainties, further developments could cause The Hartford to
change its estimates and ranges of its asbestos and
environmental reserves, and the effect of these changes could be
material to the Company's consolidated operating results,
financial condition and liquidity.
The Hartford Financial Services Group Inc offers a variety of
personal and commercial property & casualty insurance products,
including homeowners, auto, and workers' compensation. The Group
owns Hartford Life, which offers individual and group life
insurance, annuities, employee benefits administration, asset
management, and mutual funds (managed both in-house and by
Wellington Management).
ASBESTOS LITIGATION: MSA Named in About 3,000 Liability Lawsuits
----------------------------------------------------------------
Safety equipment and systems manufacturer Mine Safety Appliances
Co (NYSE: MSA) reveals that it presently defends itself against
about 3,000 product liability lawsuits primarily involving
respiratory protection products allegedly manufactured and sold
by the Company.
In the August 12, 2005 Class Action Reporter edition, the
Pittsburgh, PA-based Company revealed that it currently faces
about 2,800 product liability lawsuits.
These lawsuits represent a total of around 32,000 plaintiffs.
About 90% of these lawsuits involve plaintiffs claiming they
suffer from silicosis, with the remainder alleging they suffer
from other or combined injuries, including asbestosis. These
lawsuits typically allege that these conditions resulted in part
from respirators that were negligently designed or manufactured
by the Company.
Consistent with the experience of other companies involved in
silica and asbestos-related litigation, there has been an
increase in the number of asserted claims that could potentially
involve the Company.
Mine Safety Appliances makes protective equipment for workers in
the fire service, construction, homeland security industries,
and miners. The Company produces air-purifying respiratory
equipment, gas masks, and head protection gear, much of which
carries the MSA brand. Its products are sold in about 120
countries.
ASBESTOS LITIGATION: Rogers Corp. Deals With 212 Pending Claims
---------------------------------------------------------------
As of October 2, 2005, specialty materials manufacturer Rogers
Corporation (NYSE: ROG) states that it defends about 212 pending
asbestos claims, primarily in Illinois, Pennsylvania, and
Mississippi, compared to 232 claims at January 2, 2005,
according to a Securities and Exchange Commission report.
The Rogers, CT-based Company cannot provide any meaningful
disclosure about the total amount of the damages sought for most
of the lawsuits do not include specific dollar claims for
damages, and many include a number of plaintiffs and multiple
defendants.
Cases involving the Company typically name 50-300 defendants,
although some cases have had as few as 6 and as many as 833
defendants. In 2005's first nine months and the whole of 2004,
the Company was able to have about 74 and 84 claims dismissed,
respectively, and settled 7 and 8 claims, respectively.
The Company has, however, settled a small number of cases for
which the Company's insurance carriers have paid the majority of
costs. Payments related to such settlements totaled about US$1.4
million in the 2005-3rd quarter and about US$4.4 million in
2005's first nine months.
Settlements are made without any admission of liability.
Payments may vary depending upon a number of factors, including
the jurisdiction where the action was brought, the nature and
extent of the disease alleged and the associated medical
evidence, the age and occupation of the claimant, the existence
or absence of other possible causes of the claimant's alleged
illness, and the availability of legal defenses, as well as
whether the action is brought alone or as part of a group of
claimants.
To date, the Company has been successful in obtaining dismissals
for many of the claims and has settled only a limited number.
The majority of settled claims were settled for immaterial
amounts, and the Company's insurance carriers have paid the
majority of such costs.
ASBESTOS LITIGATION: Cytec Posts Asbestos Liability at US$48.3M
----------------------------------------------------------------
Cytec Industries Inc (NYSE: CYT) divulges that it holds its
asbestos-related liability at US$48.3 million and US$50.4
million at September 30, 2005 and December 31, 2004,
respectively, according to a Securities and Exchange Commission
report.
The related insurance receivable was US$34.6 million at
September 30, 2005 and US$34.2 million at December 31, 2004.
The Company is the subject of numerous lawsuits and claims
incidental to the conduct of its or certain of its predecessors'
businesses, including lawsuits and claims relating to product
liability, personal injury including asbestos, contractual,
employment and intellectual property matters.
During the nine-month period ending September 30, 2005, there
were 27,947 claimants. The Company listed 8,560 claimants
associated with claims closed during the period and 1,434
claimants associated with claims opened during the period.
Moreover, the Company posted 20,281 claimants at the end of the
nine-month period.
The West Paterson, NJ-based Company produces chemicals from
which it makes engineered materials, specialty chemicals, and
additives used in treating water and in industrial processes.
ASBESTOS LITIGATION: JPN Firm Devises Coating to Tame Asbestos
--------------------------------------------------------------
A manufacturer of ceramic coatings, Nippan Kenkyujo, develops a
coating that can render asbestos harmless, in which the process
prevents the fibers from being inhaled, the Asia Times Online
reports.
Beginning December, Nippan Kenkyujo will offer three products,
including one that can be colored. In its first year, Nippan
Kenkyujo predicts JPY500 million (US$4.2 million) sales.
For the time being, the Company will manufacture the coating at
its Kanagawa prefecture plant. It will consider collaborating
with outside plants as sales grow.
Created by mixing a catalyst in silicon dioxide, the product
upon application, makes asbestos fibers undergo a chemical
reaction in which they are bound in bundles of up to several
hundred fibers each and then hardened.
When used, the substance is diluted with water and then directly
applied to asbestos or asbestos-containing architectural
material by a roller or brush. Typical sealants are different
because they merely harden asbestos' surface.
Asbestos fibers have a diameter of about 20 nanometers, which is
about 1/5000th the diameter of hair. When fibers are airborne
and inhaled, they can lead to health problems. If bundled,
however, they become heavier and will not be released in the
air.
ASBESTOS LITIGATION: ABB Set to Recover Investment Grade Status
---------------------------------------------------------------
Swiss-Swedish engineering giant ABB Ltd, in a move that will
likely attract more quality-conscious investors and dispel hedge
funds that boosted the instability of stocks and bonds in recent
years, is set to regain investment grade status, The Associated
Press reports.
During 2005, ABB turned profitable again on robust demand for
power and automation equipment in the United States and China.
The Company, with more than US$20 billion in annual sales, has
also substantially reduced its debt.
But it's the likely resolution of ABB's costly asbestos problem
in the United States that prompted Standard & Poor's to hint at
a possible upgrade to investment grade after it put the
company's junk BB-plus rating on positive watch.
ABB is still facing more than 100,000 pending asbestos lawsuits
in the US, which stem from workers who have come into close
contact with asbestos-insulated boilers produced by ABB's US
unit Combustion Engineering.
The Company has proposed a US$1.43 billion settlement, which has
already been approved by a majority of claimants but still needs
to be confirmed by two US courts. Analysts have suggested that a
final resolution of ABB's case could come in late 2005 or next
spring.
Standard and Poor's credit analyst Maria Bissinger said,
"Supported by ABB's improved financial profile, the ratings
could be raised when it appears that uncertainties resulting
from ABB's pending asbestos settlement ... have finally abated."
ASBESTOS LITIGATION: TX Jury Awards Widow US$25.7M in Alcoa Suit
----------------------------------------------------------------
A Dallas jury awards widow Barbara Behringer US$25.7 million in
an asbestos lawsuit involving aluminum producer Alcoa Inc.'s
operations in Rockdale, Texas, according to the Rockdale
Reporter.
Doctors diagnosed Mrs. Behringer with pleural mesothelioma in
November 2003. Her first husband, John Alford, died the previous
year "from lung cancer and asbestosis," said attorney Jeffrey
Simon of Waters & Kraus LLP.
"Mr. Alford was a pot tender at Alcoa's Rockdale Operations
during the 1950s," Mr. Simon said. "He was exposed to large
amounts of asbestos and dust produced while relining smelting
pots. Mrs. Behringer subsequently breathed the asbestos
particles as she shook out the dusty clothes and checked pockets
during her twice-weekly washing of Mr. Alford's work uniforms."
The jury agreed with Mr. Simon's assessment and awarded Mrs.
Behringer US$13.7 million in compensatory damages, which
includes US$1.5 million to her current husband, Leroy Behringer,
and US$12.0 million in punitive damages.
Alcoa spokesman Jim Hodson said the US$12.0 million award in
punitive damages would be reduced as Texas now has a law
limiting punitive damages in such cases. The US$12.0 million
award will likely drop to around US$3 million, a Bloomberg News
report indicated.
Mr. Hodson said the Company would appeal the verdict.
Mr. Simon said the case's outcome was significant because, to
the jury, it extended the duty of a company to protect third
parties. He added the jury assessed Alcoa "100% responsibility"
for Mrs. Behringer's disease.
Alcoa's attorneys had asserted Mrs. Behringer's mesothelioma was
not caused by asbestos and pointed out the relatively low number
of women diagnosed with the disease.
ASBESTOS LITIGATION: Hardie to Announce Update on Claims Deal
-------------------------------------------------------------
James Hardie Industries NV intends to update the market on the
status of its asbestos compensation negotiations with the New
South Wales Government when the Company reports a near doubling
of its half-yearly net profit, The Age reports.
Hardie representatives and the NSW Government are now up to
draft 11 of the compensation deal to pay victims of the asbestos
products the company used to manufacture.
Currently valued at about AUD1.685 billion, the deal could
potentially be worth as much as AUD4.5 billion over the next 40
years.
Hardie's asbestos payout funds are currently expected to dry up
by the end of June 2006, according to a spokesman from the
Company's compensation fund, the Medical Research and
Compensation Foundation.
Victims, unions and NSW Premier Morris Iemma have been angered
at the Company's delay to finalize a compensation deal, after a
draft agreement was reached just before Christmas in 2004.
Analysts are forecasting an interim net profit of about US$110
million (AUD150 million), nearly double the US$61.1 million
(AUD83 million) in the first half of 2004/05, when Hardie was
suffering from production issues at three of its US plants.
Shaw Stockbroking research director Scott Marshall said Hardie
was continuing to power ahead in the US, where it makes more
than three quarters of sales of its fiber cement home cladding,
its core product. Goldman Sachs JBWere analyst Matthew McNee
noted that a US housing boom had helped Hardie.
"Besides the outcome of the asbestos funding issue, we see the
other significant factor driving the company's prospects being
the timing and magnitude of any potential slowdown in the US
housing sector," Mr. McNee said in a report to clients.
ASBESTOS LITIGATION: General Motors Settles Claims With Equitas
----------------------------------------------------------------
Automobile maker General Motors Corp (NYSE: GM) and Equitas Ltd
announced that they have reached a comprehensive asbestos
settlement agreement, the Dow Jones reports.
The agreement settles all GM claims, including any North
American third-party asbestos and pollution-related liabilities
from as early as the mid-1950s, against underwriters at Lloyd's
of London reinsured by Equitas.
GM spokesperson Geri Lama said, "GM continues to pursue coverage
for asbestos and other third-party liabilities from its primary
insurer, Royal Indemnity Insurance and its parent companies,
Royal & Sun Alliance Insurance Group Plc and Royal & Sun
Alliance Insurance Plc. It is prosecuting its claims for
insurance coverage against the Royal insurers in state court in
Michigan."
ASBESTOS LITIGATION: Cooper Battles PepsiAmericas, Pneumo Abex
--------------------------------------------------------------
Cooper Industries LLC, on May 31, 2005, filed and served
PepsiAmericas Inc., Pneumo Abex LLC, and the Trustee of a Trust,
which was established in 2000 from the proceeds of an insurance
settlement related to Pneumo Abex and its subsidiaries,
according to a report filed to the Securities and Exchange
Commission.
In the case styled Cooper Industries, LLC v. PepsiAmericas,
Inc., et al., Case No. 05 CH 09214 (Cook Cty. Cir. Ct.), Cooper
asserts that it was entitled to access monies that previously
were in the Trust and that were spent to purchase the insurance
policy.
Cooper claims that Trust funds should not have been distributed
for environmental expenses and instead claims that the monies
should have been distributed for underlying Pneumo Abex asbestos
claims indemnified by Cooper. Cooper complains that
PepsiAmericas deprived it of access to money in the Trust
because of the Trustee's decision to use money in the Trust to
purchase the insurance policy.
PepsiAmericas has not filed a response to the complaint, but it
will deny and vigorously contest the claim. Pneumo Abex, the
corporate successor to PepsiAmericas' prior subsidiary, has
previously filed papers that deny the claim. Pneumo Abex has
filed papers and otherwise asserted that Cooper is not a
beneficiary of the Trust and that Cooper's claims lack merit.
Minneapolis, MN-based PepsiAmericas Inc. is the world's #2 Pepsi
bottler behind Pepsi Bottling Group. The Company operates in 19
US states and holds about 20% of the US market for Pepsi
products.
ASBESTOS LITIGATION: MeadWestvaco Defends 200 Lawsuits in 3Q05
--------------------------------------------------------------
As of October 31, 2005, MeadWestvaco Corporation (NYSE: MWV)
currently faces about 200 asbestos-related personal injury
lawsuits, according to the Company's 10-Q report to the
Securities and Exchange Commission.
Typically, these suits also name many other corporate
defendants. All of the claims against the Company resolved to
date have been concluded before trial, either through dismissal
or through settlement with payments to the plaintiff that are
not material to the company. To date, the costs resulting from
the litigation, including settlement costs, have not been
significant.
As of September 30, 2005, the Stamford, CT-based Company has
litigation liabilities of about US$33 million, a significant
portion of which relates to asbestos. Should the volume of
litigation grow substantially, it is possible that the company
could incur significant costs resolving these cases. After
consulting with legal counsel and after considering established
liabilities, it is the Company's judgment that the resolution of
pending litigation and proceedings is not expected to have a
material adverse effect on the company's consolidated financial
condition or liquidity.
MeadWestvaco Corp is the result of a merger between Mead and
Westvaco. The Company has sold its Papers business to investment
firm Cerberus Capital Management for. MeadWestvaco's two largest
divisions, Packaging and Papers had accounted for about 80% of
sales. The Company owns about 1.2 million acres of timber.
ASBESTOS LITIGATION: Todd Shipyards Named in 597 Injury Lawsuits
----------------------------------------------------------------
Todd Shipyards Corporation (NYSE: TOD) defends in 597 civil
actions by parties alleging damages from past exposure to toxic
substances, generally asbestos, at closed former Company
facilities.
The cases generally include as defendants, aside from the
Company, other ship builders and repairers, ship owners,
asbestos manufacturers, distributors and installers, and
equipment manufacturers and arise from injuries or illnesses
allegedly caused by exposure to asbestos or other toxic
substances.
The Company assesses claims as they are filed and as the cases
develop, analyzing them in two different categories based on
severity of illness. The Company categorizes certain diseases
including mesothelioma, lung cancer and fully developed
asbestosis as "malignant" claims. All others of a less medically
serious nature are categorized as "non-malignant".
The Company is currently defending about 26 "malignant" claims
and about 571 "non-malignant" claims. The Company and its
insurers are vigorously defending these actions.
As of October 2, 2005 the Seattle, WA-based Company has recorded
a bodily injury liability reserve of US$7.3 million and a bodily
injury insurance receivable of US$5.4 million. This compares to
a previously recorded bodily injury reserve and insurance
receivable of US$7.3 million and US$5.3 million, respectively,
at April 3, 2005.
Todd Shipyards Corporation, through subsidiary Todd Pacific
Shipyards, repairs, maintains, overhauls, and builds government-
owned and commercial vessels. The US Government, primarily
through the Navy and the Coast Guard, accounts for more than 90%
of the Company's sales.
ASBESTOS LITIGATION: Allegheny, Affiliates Face 841 Injury Suits
----------------------------------------------------------------
As of October 12, 2005, Allegheny Energy Inc. (NYSE: AYE), with
Monongahela Power Co, the Potomac Edison Co, and West Penn Power
Co, reports that it faces 841 pending asbestos cases alleging
bodily injury involving multiple plaintiffs and multiple sites.
Allegheny had 836 open cases remaining in West Virginia, and
five in Pennsylvania.
These suits have been brought mostly by seasonal contractors'
employees and do not involve allegations of either the
manufacture, sale or distribution of asbestos-containing
products by Allegheny. These suits arise out of historical
operations and are related to the installation and removal of
asbestos-containing materials at Allegheny's generation
facilities.
Various foreign and domestic insurers, including Lloyd's of
London, insured Allegheny's historical operations. Asbestos-
related litigation expenses have to date been reimbursed in full
by recoveries from these historical insurers, and Allegheny
believes that it has sufficient insurance to respond fully to
the asbestos suits.
In connection with a settlement, Allegheny received payment from
one of its insurance companies in the amount of US$625,000 on
July 5, 2005, with the next payment of US$625,000 due July 1,
2006. As part of the settlement, Allegheny released this
insurance company from potential liabilities associated with
claims against Allegheny alleging asbestos exposure.
The Greensburg, PA-based Company's Allegheny Power unit provides
electricity to some 1.5 million customers in five states and
natural gas to more than 200,000 customers through its regulated
utilities Monongahela, Potomac Edison, and West Penn Power.
ASBESTOS LITIGATION: Thomas & Betts Defends Suits in Five States
----------------------------------------------------------------
Thomas & Betts Corporation (NYSE: TNB) and its 1995-acquired
subsidiary Amerace Corp are subject to asbestos lawsuits in
Mississippi and four other states, related to either undefined
and unidentified or historic products.
Amerace is one of hundreds of defendants and Thomas & Betts is
one of dozens of defendants in each case. To date, no asbestos-
containing product of Amerace or Thomas & Betts has been
identified in these cases.
In the Amerace cases, 23 lawsuits have been dismissed and
agreement has been reached for dismissals in fifty additional
cases. Potential exposure at this time, if any, cannot be
estimated. Management believes, however, that there is no merit
to these claims that damages, if any, are remote and believes
that a loss is not probable in any of these cases.
In Thomas & Betts' Annual Report on Form 10-K for the fiscal
year ended December 31, 2004, its subsidiary, L.E. Mason (Red
Dot), acquired in 1999, was previously subject to certain
asbestos lawsuits. During the 2005-2nd quarter, Thomas & Betts
was dismissed, with no liability, from all such asbestos
lawsuits in which it was named as a defendant.
Memphis, TN-based Thomas & Betts provides electrical connectors,
HVAC equipment, and transmission towers to the commercial,
communications, industrial, and utility markets. It has three
business segments: electrical, HVAC, and steel structures.
ASBESTOS LITIGATION: General Cable Corp Discloses 43,000 Claims
---------------------------------------------------------------
Subsidiaries of General Cable Corporation (NYSE: BGC) have been
named as defendants in lawsuits alleging exposure to asbestos in
products manufactured by the Company, according to a report
filed to the Securities and Exchange Commission.
As of September 30, 2005, there were about 9,700 non-maritime
claims and 33,300 maritime asbestos claims outstanding. As of
September 30, 2005 and December 31, 2004, General Cable had
accrued about US$2.5 million and US$3.0 million, respectively,
for these lawsuits.
Headquartered in Highland Heights, Kentucky, General Cable Corp
makes aluminum, copper, and fiber-optic wire and cable products.
The Company has three operating segments: industrial and
specialty, energy, and communications. General Cable also
produces power cables, automotive wire, mining cables, and
custom-designed cables for medical equipment and other products.
ASBESTOS LITIGATION: Viacom Posts 104,000 Pending Claims in 3Q05
----------------------------------------------------------------
Viacom Inc. (NYSE: VIA) defends lawsuits claiming various
personal injuries related to asbestos and other materials, which
allegedly occurred principally as a result of exposure caused by
various products manufactured by Westinghouse, a predecessor,
generally prior to the early 1970s.
The Company is typically named as one of a large number of
defendants in both state and federal cases. The plaintiffs have
not identified which of the Company's products is the basis of a
claim. Claims against the Company in which a product has been
identified principally relate to exposures allegedly caused by
asbestos-containing insulating material in turbines sold for
power-generation, industrial and marine use, or by asbestos-
containing grades of decorative micarta, a laminate used in
commercial ships.
As of September 30, 2005, the Company had about 104,000 pending
asbestos claims, as compared with about 112,140 as of December
31, 2004 and about 112,200 as of September 30, 2004. Of the
claims pending as of September 30, 2005, about 73,860 were
pending in state courts, 27,570 in federal courts and about
2,570 were third party claims.
During the third quarter of 2005, the Company received about
2,360 new claims and closed or moved to an inactive docket about
3,050 claims.
To date, the New York, NY-based global media Company has not
been liable for any third party claims. The Company's total
recovery costs for the years 2004 and 2003 for settlement and
defense of asbestos claims after insurance recoveries and net of
tax benefits were about US$58.4 million and US$(8.7) million,
respectively. A portion of such costs relates to claims settled
in prior years. If proceeds received in 2003 from an insurance
commutation were excluded from the Company's total costs in
2003, the Company's total costs after insurance recoveries and
net of tax benefits would have been US$56.6 million.
Filings include claims for individuals suffering from
mesothelioma, a rare cancer, the risk of which is allegedly
increased primarily by exposure to asbestos; lung cancer, a
cancer which may be caused by various factors, one of which is
alleged to be asbestos exposure; other cancers, and conditions
that are substantially less serious, including claims brought on
behalf of individuals who are asymptomatic as to an allegedly
asbestos-related disease.
Claims identified as cancer remain a small percentage of
asbestos claims pending at September 30, 2005. In a substantial
number of the pending claims, the plaintiff has not yet
identified the claimed injury.
ASBESTOS LITIGATION: Cooper Resolves 98,444 Pneumo Abex Claims
----------------------------------------------------------------
Cooper Industries Ltd (NYSE: CBE) reports that, from August 28,
1998 through September 30, 2005, it resolved 98,444 Pneumo Abex
Corp asbestos-liability claims, according to the Company's 10-K
report to the Securities and Exchange Commission.
From August 28, 1998 through September 30, 2005, the Company
states a total of 137,170 Abex Claims filed and 38,726 pending
Abex Claims at September 30, 2005, that are Federal-Mogul
Corporation's responsibility. In the three months ended
September 30, 2005, 1,199 claims were filed and 4,152 claims
were resolved. Since August 28, 1998, the average indemnity
payment for resolved Abex Claims was US$2,062 before insurance.
The Company spent a total of US$77 million on defense costs for
the period August 28, 1998 through September 30, 2005. Existing
insurance coverage has provided 50% to 80% of the total defense
and indemnity payments for Abex Claims.
In October 1998, Cooper sold its Automotive Products business to
Federal-Mogul. These discontinued businesses, including the Abex
product line obtained from Pneumo-Abex in 1994, were operated
through subsidiary companies, and the stock of those
subsidiaries was sold to Federal-Mogul pursuant to a Purchase
and Sale Agreement dated August 17, 1998. Federal-Mogul
indemnified Cooper for certain liabilities of these subsidiary
firms, including liabilities related to the Abex product line
and any potential liability that Cooper may have to Pneumo
pursuant to a 1994 Mutual Guaranty Agreement between Cooper and
Pneumo.
On October 1, 2001, Federal-Mogul and several of its affiliates
filed a Chapter 11 bankruptcy petition and indicated that
Federal-Mogul may not honor the indemnification obligations to
Cooper. To date, Federal-Mogul had not rejected the 1998
Agreement, which includes the indemnification to Cooper.
If Federal-Mogul rejects the 1998 Agreement, Cooper will be
relieved of its future obligations under the 1998 Agreement,
including specific indemnities relating to payment of taxes and
certain obligations regarding insurance for its former
Automotive Products businesses. To the extent Cooper is
obligated to Pneumo for any asbestos-related claims arising from
the Abex product line, Cooper has rights, confirmed by Pneumo,
to significant insurance for such claims.
Houston, TX-based Cooper Industries Ltd makes electrical
products, tools, hardware, and metal support products. Its
subsidiary, Cooper B-Line, makes metal support products that
include conduits, cable trays, and fasteners.
ASBESTOS LITIGATION: Albany Int'l. Battles 24,406 Injury Claims
---------------------------------------------------------------
Albany International Corporation (NYSE: AIN) states that, as of
October 21, 2005, it was still defending against 24,406 asbestos
related claims, according to the Company's 2005-3rd quarter
report to the Securities and Exchange Commission.
Albany is a defendant in suits brought in various United States
courts by plaintiffs who claim to have suffered personal injury
as a result of exposure to asbestos-containing products
previously manufactured by Albany. Albany's production of
asbestos-containing paper machine clothing products was limited
to certain synthetic dryer fabrics marketed during the period
from 1967 to 1976 and used in certain paper mills.
As of July 22, 2005, the Company faced 24,452 injury claims,
29,411 claims as of December 31, 2004, 28,838 claims as of
December 31, 2003, 22,593 claims as of December 31, 2002, 7,347
claims as of December 31, 2001, 1,997 claims as of December 31,
2000, and 2,276 claims as of December 31, 1999.
About 19,222 of the claims pending against Albany are filed in
various counties in Mississippi.
As of October 21, 2005, Albany had resolved, by means of
settlement or dismissal, 13,646 claims, and had reached
tentative agreement to resolve an additional 4,563 pending
claims. The total cost of resolving all 18,209 such claims was
US$6,426,000. Of this amount, US$6,391,000, or 99%, was paid by
the Company's insurance carrier.
Brandon Drying Fabrics Inc, a subsidiary of Geschmay Corp, is a
separate defendant in most of these cases. Brandon was defending
against 9,608 claims as of October 21, 2005. This compares with
9,549 such claims as of July 22, 2005, 9,985 claims as of
December 31, 2004, 10,242 claims as of December 31, 2003, 11,802
claims as of December 31, 2002, 8,759 claims as of December 31,
2001, 3,598 claims as of December 31, 2000, and 1,887 claims as
of December 31, 1999.
Albany acquired Geschmay Corp, formerly known as Wangner Systems
Corp, in 1999. Brandon is a wholly owned subsidiary of Geschmay.
In 1978, Brandon acquired certain assets from Abney Mills, a
South Carolina textile manufacturer. Among the assets acquired
by Brandon from Abney were assets of Abney's wholly owned
subsidiary, Brandon Sales Inc which, among other things, had
sold dryer fabrics containing asbestos made by its parent,
Abney. It is believed that Abney ceased production of asbestos-
containing fabrics prior to the 1978 transaction.
As of October 21, 2005, Brandon has resolved, by means of
settlement or dismissal, 7,092 claims for a total of US$152,499.
Brandon's insurance carriers initially agreed to pay 88.2% of
the total indemnification and defense costs related to these
proceedings, subject to the standard reservation of rights. The
remaining 11.8% of the costs had been borne directly by Brandon.
The Company, in some of these cases, is named both as a direct
defendant and as the "successor in interest" to Mount Vernon
Mills, from which the Company acquired certain assets in 1993.
Certain plaintiffs allege injury caused by asbestos-containing
products allegedly sold by Mount Vernon many years prior to the
acquisition.
The Albany, NY-based Company is the world's #1 maker of paper
machine clothing. It produces around 35% of the monofilament
yarn used in its paper machine clothing and relies on
independent suppliers for the remainder. The Company markets
these products to paper mills in 25 countries through a direct
sales staff.
ASBESTOS LITIGATION: Macerich Allocates $3.3M Remediation Costs
---------------------------------------------------------------
During its acquisition of Fresno Fashion Fair in December 1996,
the Macerich Company (NYSE: MAC) reserves US$3.3 million to
cover the removal of asbestos found in structural fireproofing
at the Center, according to a Securities and Exchange Commission
report.
Testing data conducted by professional environmental consulting
firms indicates that the fireproofing is largely inaccessible to
building occupants and is well adhered to the structural
members. Moreover, airborne asbestos concentrations were well
within OSHA's permissible exposure limit of 0.1 fcc.
Since the establishment of the reserve, the Santa Monica, CA-
based Company has incurred US$2,690,000 in remediation costs
through September 30, 2005. It incurred US$9,000 and US$79,000
in remediation costs for the nine months ending September 30,
2005 and 2004, respectively. An additional US$610,000 remains
reserved at September 30, 2005.
Built primarily through acquisitions and redevelopment, the
Macerich Co is a fully integrated, self-administered real estate
investment trust (REIT) that acquires, redevelops, and manages
shopping malls and strip centers. The firm's operating
subsidiaries include Macerich Property Management and Westcor
Partners.
ASBESTOS LITIGATION: Washington Group Int'l. Faces Injury Suits
---------------------------------------------------------------
Construction and engineering firm Washington Group International
Inc (NYSE: WGII) states that it defends various lawsuits
resulting from allegations that third parties sustained injuries
and damage from the inhalation of asbestos fibers found in
materials used in construction projects, according to a
Securities and Exchange Commission report.
In addition, based on proofs of claim filed with the court
during the pendency of its bankruptcy proceedings, the Company
is aware of other potential asbestos claims against it, although
the bankruptcy court disallowed most of those proofs of claim in
July 2005.
Asbestos-related lawsuits against the Company result from
allegations that third parties sustained injuries and damage
from the inhalation of asbestos fibers contained in materials
used in construction projects and that it allegedly was
negligent or failed to protect the plaintiff or claimant from
the dangers of asbestos.
Previously, the Company had determined that all of its asbestos
claims are fully insured except for claims relating to a
subsidiary acquired in 1986. Subsequently, the Company reviewed
the 1986 stock purchase agreement and has obtained and reviewed
the insurance policies obtained by the prior owners of the
subsidiary.
Based in Boise, Idaho, Washington Group International remains
one of the world's largest construction and engineering firms,
even after a stint with bankruptcy. The group provides design
and construction services for customers in the defense, energy
and environment, industrial process, infrastructure, mining, and
power industries. It also operates mines and offers
environmental management and facilities and operations
management.
ASBESTOS LITIGATION: Moen Inc Defends 35 Personal Injury Suits
--------------------------------------------------------------
A subsidiary of Fortune Brands Inc (NYSE: FO), Moen Inc declares
that it currently defends about 35 cases claiming personal
injury from asbestos, and has been dismissed as a defendant in
about 230 other cases, according to a Securities and Exchange
Commission report.
In addition, agreed dismissal orders are pending with the court
in an additional 10 cases. The Company do not anticipate that
the court will object to the entry of these pending orders as
both parties have agreed to the terms of the orders. All of
these suits name multiple defendants.
Lincolnshire, IL-based Fortune Brands Inc is a leading US
producer and distributor of distilled spirits and golf
equipment. The firm, which spun off office products company ACCO
World Corp, has added former Allied Domecq brands Sauza,
Courvoisier, Canadian Club, and Clos du Bois to its stable of
imbibables.
ASBESTOS LITIGATION: IL Court Denies Remand of Suit V. Travelers
----------------------------------------------------------------
The U.S. District Court for the Southern District of Illinois on
Oct. 27, 2005 denied two contractor companies' motions to remand
the insurance coverage case against Travelers Casualty & Surety
Company.
Judge David R. Herndon junked the motion, concluding that
removal was proper and the Court has jurisdiction over the
contractors' cause of action.
Delta Asphalt, Inc. and Southern Illinois Asphalt Company, Inc.,
highway and paving contractors, asked the Court to remand the
case because it concerns controversial issues of Illinois law.
Travelers countered that federal courts do not have discretion
to remand actions for money damages.
On June 21, 2005, the two asphalt companies filed their
complaint in the Circuit Court of Madison County, Illinois. They
contended that Travelers owed them a duty to defend and
indemnify certain costs associated with an asbestos injury suit
styled, Mt. Vernon, Illinois, Gray v. Union Carbide Corp., et
al.
The complaint also contained breach of contract claims seeking
reimbursement for defense and indemnity costs incurred in the
underlying state court action. It sought compensatory damages of
at least US$308,155.00 arising out of Travelers alleged breach.
It contended that Delta Asphalt is a Missouri corporation with
its principal place in Cape Girardeau County, Missouri; that
Southern Illinois Asphalt Company, Inc., is an Illinois
Corporation with its principal place of business in Williamson
County, Illinois; and that Travelers is an insurance company
organized under the law of Connecticut.
On August 3, 2005, Travelers removed the case to this Court
based on diversity jurisdiction. Thereafter, the contractors
moved to remand arguing that based on the United Supreme Court's
decision in Wilton the Court should abstain from exercising its
jurisdiction under the Declaratory Judgment Act to hear an
insurance coverage dispute involving purely issues of state law.
Travelers countered that this argument was inapplicable to the
facts of this case. Travelers added that under Quackenbush,
federal courts do not have broad discretion based on abstention
principles to remand actions that seek monetary damages.
The Court agreed with Travelers, citing that federal courts have
a "strict duty to exercise the jurisdiction that is conferred
upon them by Congress." However, federal courts should forego
jurisdiction when considerations of judicial economy overwhelm.
The Court ruled that it does not have discretion to remand the
plaintiffs' common law claims for breach of contract. It further
declined to remand the declaratory judgment claim as well as the
common law claims for breach of contract.
ASBESTOS LITIGATION: Court Remands Westmiller Suit V. Viad Corp.
----------------------------------------------------------------
Since Viad Corporation failed to prove that removal was proper,
the U.S. District Court for the Western District of Washington
ruled in favor of the plaintiff in the asbestos-related suit
styled, "Marian Westmiller v. Imo Industries, Inc., et al.,"
with Case No. C05-945RSM.
On October 20, 2005, the Court granted the plaintiff's motions
to remand and to strike a statement, and remanded the case to
King County Superior Court.
Marian Westmiller filed this action in King County Superior
Court on behalf of herself and as personal representative of the
estate of her husband, Lloyd Westmiller, who died of lung cancer
related to asbestos exposure. Mr. Westmiller worked as a
pipefitter at Puget Sound Naval Shipyard in the 1950s.
The case was removed to this Court by Viad Corporation under the
federal officer removal statute, which orders for removal of any
agency or U.S. officer sued in an official or individual
capacity for any act under the color of such office.
Mrs. Westmiller based her contention on a "failure to warn"
theory of liability, under Washington State law. In removing the
case to this Court, defendant Viad offered the Declaration of
Charles Cushing, a naval architect and marine engineer, as
support. Viad is named as the successor-in-interest to Griscom-
Russell Company, now defunct.
The United States Navy was involved in the manufacture of any
Griscom-Russell equipment used on U.S. Navy vessels, as the
desalination units manufactured for those vessels were designed
and built to the precise and exacting specifications of the
United States Navy. Griscom-Russell would not have been able to
deviate from those specifications. According to the Navy's
specifications, Griscom-Russell would not have been able to
affix, to its products, any type of warning or cautionary
statement concerning alleged health hazards from the
installation, use or maintenance of the products. Whether
certain equipment used aboard U.S. Naval vessels should have
warnings was determined solely by the Navy. Griscom Russell
could have had no discretion whatsoever to affix any warnings of
its own to the products it delivered to the Navy.
Plaintiff moved to strike the Cushing Declaration. She argued
that Dr. Cushing's references to specifications were
inadmissible under the best evidence rule.
The Court granted the plaintiff's motion to strike the said
statement. In the court opinion, Judge Ricardo Martinez said
that although Viad cited specific sections from his deposition,
Dr. Cushing's statements still amount to mere speculation and
are not admissible.
To substitute for the challenged Charles Cushing declaration,
Viad submitted the testimony of Admiral Lehman presented to a
New York District Court in Neshiet v. General Electric, et al.
Mr. Westmiller worked in the shipyard during the 1950's, and
Admiral Lehman's affidavit does not relate to that time period
with sufficient specificity to establish a colorable defense.
While Viad admits that it has no specific evidence of Navy
control in the form of the actual military specifications, it
argues that at this stage of litigation, before discovery, it
should not be forced to come forward with such evidence.
The Court ruled to remand the case since Viad failed to submit
evidence that it received "reasonably precise specifications
with respect to warnings during the relevant time period."
Janet L. Rice, Kristin M. Houser, Schroeter Goldmark & Bender,
Seattle, WA, represented Marian Westmiller.
James Edward Horne, Robert H. Fulton, II, Kingman Peabody
Pierson & Fitzharris, Christine E. Dinsdale, Michael Ryan
O'Clair, Soha & Lang PS, Kevin C. Baumgardner, Mark B. Tuvim,
Corr Cronin Michelson Baumgardner & Preece, Ronald C. Gardner,
Gardner Bond Trabolsi McDonald & Clement, Seattle, WA,
represented the defendants.
Headquartered in Phoenix, AZ, Viad Corp, formerly known as The
Dial Corporation, offers convention and event services, exhibit
design and construction, and travel and recreation services.
ASBESTOS LITIGATION: NY Court Allows 3rd Party Claim V. DuPont
--------------------------------------------------------------
An asbestos supplier can sue an employer for indemnification,
held the Appellate Division of the Supreme Court of New York on
September 30, 2005.
Lena C. Tedesco, the widow of Frank Tedesco, brought action
against Insulation Distributors, Inc., the corporation that
supplied products to her husband's employer, E.I. du Pont de
Nemours and Company (DuPont). The Supreme Court, Niagara County,
James B. Kane, J.H.O., dismissed the third-party complaint, and
IDI appealed.
Mrs. Tedesco filed her claim, alleging that products supplied to
DuPont by Insulation Distributors, Inc., among others, exposed
her husband to asbestos and caused his death. IDI thereafter
commenced a third-party action against DuPont seeking
indemnification.
IDI was dissolved on December 29, 1999, before Frank Tedesco was
diagnosed with asbestos-related illnesses. DuPont contended that
IDI lacks the capacity to sue DuPont since its claim for
indemnification did not arise before its dissolution.
The Appellate Division held that although a claim for
indemnification does not accrue until a judgment for damages has
been entered, this claim is based on the widow's suit based on
her husband's exposure to asbestos. Since this occurred prior to
the company's dissolution, the Court concluded that the Supreme
Court erred in dismissing the third-party complaint and ordered
its reinstatement.
In addition, the Appellate Division held that DuPont "may be
liable to [IDI] for all or part of the plaintiff's claim against
[it]."
Damon & Morey LLP, Buffalo (Amy Archer Flaherty of Counsel), for
Insulation Distributors, Inc.
Lipsitz & Ponterio, LLC, Buffalo (John Ned Lipsitz of Counsel),
represented Lena C. Tedesco.
Phillips Lytle LLP, Buffalo (Paul F. Jones of Counsel),
represented DuPont.
ASBESTOS LITIGATION: Texas Appeals Court Favors Dow Chemical Co.
----------------------------------------------------------------
The Court of Appeals of Texas on October 27, 2005 upheld a trial
court's ruling to grant summary judgment for the asbestos injury
suit, tagged as Case No. 14-03-00984-CV, brought by a widow and
her two children against Dow Chemical Company.
Carold J. Wortham and her children, Robin Johnson and Lance
Wortham, asserted errors in the Brazoria County Court's granting
of summary judgment in favor of Dow. The Worthams argued that
Dow failed to satisfy the requirements for the granting of a
summary judgment.
Hugh Wortham worked as an employee of the Dow Badische Company
from 1962 through 1996. Following his death from lung cancer,
the Worthams filed this personal injury and wrongful death and
survival action against 31 defendants. They filed suit against
Dow as the successor-in-interest to Dow Badische. They also
alleged Dow was liable under a theory of joint venture, and
asserted negligence and gross negligence claims against the
Company.
In 1958, Dow and BASF Overzee, N.V., entered into an agreement,
forming the Dow Badische Company. In 1978, Dow sold its stock in
Dow Badische to the Luchem Corporation.
The trial court granted the two summary judgment motions filed
by Dow. The first motion requested summary judgment on the
Worthams' successor-in-interest claims, "potential" claims
regarding Dow's engineering or construction services provided to
Dow Badische, and negligence claims on no-evidence grounds.
Dow's second motion for summary judgment addressed the claim
that Dow was liable as a joint venturer.
In the opinion by Justice Eva M. Guzman, the Court held that
there is no evidence that Dow owned the Dow Badische premises at
the time of Wortham's exposure, nor that Dow ever operated the
Dow Badische facility. The evidence reflects that Dow and Dow
Badische were separate corporations and were operated
separately.
After 1961, the employees "loaned" to Dow Badische by Dow became
Dow Badische employees, and they no longer received their pay
from Dow. Hugh Wortham, who was never a Dow employee, started
working for Dow Badische in 1962. There is no evidence that he
ever worked with or around any asbestos-containing product
supplied or manufactured by Dow, and no evidence that Dow ever
owned, operated, or controlled the Dow Badische facility.
Although the Worthams alleged that Dow was liable because it
provided health and safety services to Dow Badische, there is no
proof that Wortham's injuries were caused by Dow's negligence in
providing these services.
The Court of Appeals of Texas rejected the Worthams' assertion
of errors in the judgment and concluded that Dow's motions
addressed all of their causes of action. Accordingly, the Court
affirmed the trial court's judgment.
Richard J. Clarkson represented Carold J. Wortham.
ASBESTOS LITIGATION: CG&E, PSI Handle 130 Pending Injury Suits
--------------------------------------------------------------
Subsidiaries of energy holding company Cinergy, Cincinnati Gas &
Electric Co. and PSI Inc., have been named as defendants or co-
defendants in lawsuits related to asbestos at their electric
generating stations. Currently, there are about 130 pending
lawsuits.
In these lawsuits, plaintiffs claim to have been exposed to
asbestos-containing products in the course of their work at the
CG&E and PSI generating stations. The plaintiffs further claim
that as the property owner of the generating stations, CG&E and
PSI should be held liable for their injuries and illnesses based
on an alleged duty to warn and protect them from any asbestos
exposure.
A majority of the lawsuits to date have been brought against
PSI. The impact on CG&E's and PSI's financial position or
results of operations of these cases to date has not been
material.
Of these lawsuits, one case filed against PSI has been tried to
verdict. The jury returned a verdict against PSI in the amount
of about US$500,000 on a negligence claim and a verdict for PSI
on punitive damages. PSI appealed this decision up to the
Indiana Supreme Court. In July 2005, the Indiana Supreme Court
upheld the jury's verdict.
In addition, PSI has settled a number of other lawsuits for
amounts, which neither individually nor in the aggregate, are
material to PSI's financial position or results of operations.
The Company is currently evaluating the effect of the Indiana
Supreme Court's ruling on its existing docket of cases.
Cinergy Corp. was created on October 24, 1994, from the merging
of The Cincinnati Gas & Electric Company and PSI Energy, Inc.,
the largest electric utility in Indiana. Based in Cincinnati,
Ohio, Cinergy Corp. (NYSE:CIN), is one of the leading
diversified energy companies in the U.S.
ASBESTOS LITIGATION: Sealed Air Posts Update on Grace Settlement
----------------------------------------------------------------
Packaging giant Sealed Air Corp (NYSE: SEE), in a Securities and
Exchange Commission filing, disclosed that it expects that the
settlement agreement between the Company and W.R. Grace & Co.
will become effective upon Grace's emergence from bankruptcy
with a plan of reorganization.
Although Grace filed a proposed plan of reorganization with the
Bankruptcy Court in January 2005, the Company cannot predict
when a final plan of reorganization will become effective.
On November 27, 2002, the Company reached an agreement in
principle with the committees appointed to represent asbestos
claimants in the W. R. Grace & Co. bankruptcy case to resolve
all current and future asbestos-related claims made against the
Company and its affiliates, the fraudulent transfer claims, and
indemnification claims by Fresenius Medical Care Holdings, Inc.
and affiliated companies in connection with the Cryovac
transaction. The parties signed a definitive settlement
agreement as of November 10, 2003.
On June 27, 2005, the U.S. Bankruptcy Court in the District of
Delaware, where the Grace bankruptcy case is pending, signed an
order approving the definitive settlement agreement. Although
Grace is not a party to the settlement agreement, it is directed
to comply with the agreement.
On March 31, 1998, the Company completed a multi-step
transaction that brought the Cryovac packaging business and the
former Sealed Air Corporation's business under the common
ownership of the Company.
The Company described the Cryovac transaction, contingencies
related to the Cryovac transaction, and the case of Thundersky
v. The Attorney General of Canada et al. in the Company's Annual
Report on Form 10-K for the year ended December 31, 2004 and the
case of Her Majesty the Queen in Right of the Province of
Manitoba v. The Attorney General of Canada et al. in the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2005.
The Company has learned that six new putative class proceedings
have been brought in various provincial and federal courts in
Canada seeking recovery from the Company and its subsidiaries
Cryovac, Inc. and Sealed Air (Canada) Co./Cie, as well as other
defendants including W. R. Grace & Co. and W. R. Grace & Co.-
Conn, for alleged injuries suffered by any Canadian resident.
Grace has acknowledged that its agreement to defend, indemnify
and hold harmless the Company and its affiliates in respect of
any liability and expense, including legal fees and costs, in
the Thundersky proceeding also applies to the six new putative
class action proceedings.
In April 2001, Grace Canada, Inc. obtained an order of the
Superior Court of Justice, Commercial List, Toronto, Ontario,
Canada (Court File No.01-CL-4081) recognizing the Chapter 11
bankruptcy proceeding in the United States of America involving
Grace Canada, Inc.'s U.S. parent corporation and other U.S.
affiliates of Grace Canada, Inc. and enjoining all new actions
and staying all current proceedings against Grace Canada, Inc.
related to asbestos under the Canadian Companies' Creditors
Arrangement Act. That order has been renewed repeatedly and now
extends through November 30, 2005.
In September 2005, Grace Canada, Inc., brought a motion to
extend the injunction and stay to actions involving asbestos
against the Company and its affiliates and affiliates of Grace
Canada, Inc., and to actions against Her Majesty the Queen in
Right of Canada relating to the alleged manufacture, sale or
distribution of asbestos or asbestos-containing products by
Grace in order to stay all of the eight actions as to those
defendants (plus an additional action to which neither the
Company nor any of its affiliates is a party), as well as to
extend the stay through April 1, 2006.
Grace Canada, Inc. has proposed that Grace's plan of
reorganization in the U.S. bankruptcy proceeding would provide
for the resolution of all claims regarding Grace's manufacture,
sale or distribution of asbestos or asbestos-containing products
in Canada. The plaintiffs in the Thundersky action will oppose
the motion of Grace Canada, Inc. in order to permit the
Thundersky action to proceed. The motion is currently set to be
heard in mid-November 2005.
Headquartered in Saddle Brook, NJ, Sealed Air is a global
manufacturer of a wide range of food and protective packaging
materials and systems.
ASBESTOS LITIGATION: Tenneco Inc. Continues to Battle Claims
-------------------------------------------------------------
Tenneco Inc., formerly Tenneco Automotive, disclosed in its
latest filing to the Securities and Exchange Commission that it
continues to defend itself against legal proceedings initiated
by claimants alleging health problems as a result of exposure to
asbestos. Many of these cases involve significant numbers of
individual claimants and the Lake Forest, IL-based Company was
joined with more than 200 defendants coming from a variety of
industries.
A small percentage of these claimants allege that they were
automobile mechanics who were exposed to the Company's former
muffler products. A considerable number appear to involve
workers in other industries or otherwise do not include
sufficient information to determine whether there is any basis
for a claim against Tenneco. The Company firmly believes that it
is unlikely that mechanics were exposed to asbestos by its
muffler products and that they would not be at increased risk of
asbestos-related disease based on their work with these
products.
Additionally, the plaintiffs either do not specify any, or
specify the jurisdictional minimum, dollar amount for damages.
As major asbestos manufacturers continue to go out of business,
Tenneco said, it may experience an increased number of these
claims.
To date, with respect to claims that have proceeded sufficiently
through the judicial process, the Company has regularly achieved
favorable resolution in the form of a dismissal of the claim or
a judgment in its favor. However, the Company stated that it
could receive unfavorable judgments and be subject to cash costs
or non-cash charges to its earnings.
ASBESTOS LITIGATION: Ingersoll-Rand Settles Claims for US$12.5M
---------------------------------------------------------------
Ingersoll-Rand Company Limited revealed that a subsidiary, IR-
New Jersey, is a defendant in numerous asbestos-related lawsuits
in state and federal courts. In virtually all of the suits a
large number of other companies have also been named as
defendants.
The claims against IR-New Jersey generally allege injury caused
by exposure to asbestos contained in certain of IR-New Jersey's
products. Although IR-New Jersey was neither a producer nor a
manufacturer of asbestos, some of its formerly manufactured
products utilized asbestos-containing components, such as
gaskets, purchased from third-party suppliers.
All asbestos-related claims resolved to date have been dismissed
or settled. For the nine-month periods ended September 30, 2005
and 2004, total costs for settlement and defense of asbestos
claims after insurance recoveries and net of tax were about
US$12.5 million and US$12.3 million, respectively.
For the six months ended June 30, 2005, total costs for
settlement and defense of asbestos claims after insurance
recoveries and net of tax were about $7.7 million as compared to
$7.9 million for the six months ended June 30, 2004. (Class
Action Reporter, August 12, 2005)
ASBESTOS LITIGATION: Midwest Generation Incurs US$68M Liability
---------------------------------------------------------------
Midwest Generation, a subsidiary of Edison Mission Energy, faces
between 170 and 190 cases for which the Company is potentially
liable and that had not been settled and dismissed at September
30, 2005. The Chicago, IL-based Company had recorded a US$68
million liability at September 30, 2005.
Midwest Generation entered into a supplemental agreement with
Commonwealth Edison and Exelon Generation Company on February
20, 2003 to resolve a dispute regarding interpretation of its
reimbursement obligation for asbestos claims under the
environmental indemnities set forth in the Asset Sale Agreement.
Under this agreement, Midwest Generation agreed to reimburse
Commonwealth Edison and Exelon Generation for 50% of specific
existing asbestos claims and expenses less recovery of insurance
costs, and agreed to a sharing arrangement for liabilities and
expenses associated with future asbestos-related claims.
As a general matter, Commonwealth Edison and Midwest Generation
apportion responsibility for future asbestos-related claims
based upon the number of exposure sites that are Commonwealth
Edison locations or Midwest Generation locations. The
obligations under this agreement are not subject to a maximum
liability. The supplemental agreement has a five-year term with
an automatic renewal provision (subject to the right of either
party to terminate). Payments are made under this indemnity upon
tender by Commonwealth Edison of appropriate proof of liability
for an asbestos-related settlement, judgment, verdict, or
expense.
Midwest Generation is a subsidiary of Rosemead, CA-based Edison
International's (NYSE: EIX) merchant energy business, Edison
Mission Energy. Edison has created a cosmopolitan image through
Edison Mission, which markets energy and has non-regulated power
plant interests internationally.
ASBESTOS LITIGATION: CIRCOR Expects Drop in Mississippi Filings
---------------------------------------------------------------
Like many other manufacturers of fluid control products, CIRCOR
International Inc. defends itself against a growing number of
product liability actions brought by individuals who seek
compensation for their alleged exposure to airborne asbestos
fibers.
Its subsidiaries, Leslie, Spence, and Hoke, collectively have
been named as defendants or third-party defendants in asbestos
related claims brought on behalf of about 22,000 plaintiffs
typically against anywhere from 50 to 400 defendants. In some
instances, the Company has also been named individually and as
successor in interest to one or more of these subsidiaries.
These cases have been brought in state courts in Alabama,
California, Connecticut, Georgia, Illinois, Louisiana, Maryland,
Massachusetts, Michigan, Mississippi, Montana, New Jersey, New
York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania,
Rhode Island, Texas, Utah, Virginia, Washington and Wyoming with
the vast majority of claimants having brought their claims in
Mississippi.
The cases brought by most claimants seek unspecified
compensatory and punitive damages against all defendants in the
aggregate. However, the complaints filed on behalf of claimants
who do seek specified compensatory and punitive damages
typically seek millions or tens of millions of dollars in
damages against the aggregate of defendants.
Of the approximately 22,000 plaintiffs who have brought claims
against its subsidiaries, all but about 500 have been in
Mississippi. Recently in Mississippi, the courts have rendered
decisions and the legislature has passed legislation aimed at
curbing certain abusive practices by plaintiff attorneys
pursuant to which large numbers of unrelated plaintiffs would be
grouped in the same case against hundreds of defendants. As a
result of the recent changes, many of these "mass filings" have
been or are expected to be dismissed. While it is possible that
certain dismissed claims would be refiled in Mississippi or in
other jurisdictions, any such refilings likely would be made on
behalf of one or a small number of related individuals who can
demonstrate actual injury and some connection to its
subsidiaries' products.
Any components containing asbestos formerly used in Leslie,
Spence and Hoke products were entirely internal to the product
and, the Company contends, would not give rise to ambient
asbestos dust during normal operation or during normal
inspection and repair procedures. Moreover, its insurers have
been paying the vast majority of the costs associated with the
defense of these actions, particular with respect to Spence and
Hoke for which insurance has paid all defense costs to date.
The Company negotiated a revised cost sharing understanding with
Leslie's insurers which results in Leslie being responsible for
29% of its defense costs. In light of the foregoing, the Company
currently believes that it has no basis on which to conclude
that these cases may have a material adverse effect on its
financial condition, results of operations or cash flows.
However, due to the nature and number of variables associated
with asbestos related claims, it is unable to reliably estimate
the ultimate costs of these claims.
Headquartered in Burlington, MA, Circor International Inc.
designs, manufactures, and supplies valves, related products and
services to OEMs, processors, manufacturers, and the military.
Circor was spun off from Watts Industries (now Watts Water
Technologies) in 1999.
ASBESTOS LITIGATION: AFG Raises Projection of Defense Costs
-----------------------------------------------------------
The increase in the number of direct insurance claims from
peripheral defendants has caused American Financial Group, Inc.
to increase its projection of future defense cost and loss
exposure, according to the latest Securities and Exchange
Commission filing.
AFG recorded a 2005 third quarter pre-tax charge of US$179
million, net of US$26 million in reinsurance recoverables. This
charge resulted in an increase in asbestos reserves of US$124
million and environmental and other mass tort reserves of US$55
million. At September 30, 2005, AFG's asbestos and
environmental reserves were US$475 million, net of reinsurance
recoverables. At that date, AFG's three-year survival ratio was
21.8 times paid losses for the asbestos reserves and 13.2 times
paid losses for the total asbestos and environmental reserves
(16.8 and 10.6 times paid losses, respectively, excluding
amounts associated with the 2003 settlement of asbestos related
coverage litigation for A.P. Green Industries).
This study reviewed open and closed asbestos and environmental
claims at June 30, 2005. With respect to asbestos, it
considered both direct insurance and assumed reinsurance,
products and non-products exposure, paid claims history, the
pattern of new claims, settlements and projected development.
However, the Company revealed that as has been reported by
others, the asbestos legal climate remains very difficult to
predict. While some progress has been made in state asbestos
tort reform, that progress has been somewhat offset by increased
claims costs, increased defense costs, the assertion of non-
products theories and an increasing number of claims against
small to mid-sized insureds.
In addition, the study revealed that the estimates of industry
ultimate losses and AFG's historic premium market share have not
changed since the 2001 study. There has also been no
significant change in AFG's payment patterns. In the 2005
study, additional weight was given to claims associated with
peripheral defendants bringing direct insurance claims.
The Company concluded that while tort reform is helping in some
jurisdictions, the legal climate in many jurisdictions continues
to deteriorate, with larger verdict values being experienced.
Expanding coverage interpretations by some courts also has led
to increased exposure to some policies in certain jurisdictions.
Headquartered in Cincinnati, OH, American Financial Group, Inc.
is a holding Company, which through subsidiaries, is engaged
primarily in property and casualty insurance, focusing on
specialized commercial products for businesses, and in the sale
of retirement annuities, life, and supplemental health insurance
products.
ASBESTOS LITIGATION: Supreme Court Rules Against Garlock Sealing
----------------------------------------------------------------
Federal maritime principles could apply to an action against
manufacturers of asbestos products, held the Supreme Court of
Virginia in affirming the circuit court decision.
On November 4, 2005, the Supreme Court upheld the judgment
against Garlock Sealing Technologies, LLC in the suit brought by
Michael Little, the executor of the Estate of Zebulon A. Little,
Jr.
Garlock Sealing appealed the ruling handed down by Judge Vincent
Conway, Jr. of the Circuit Court of the City of Newport News.
Zebulon A. Little, Jr., initially sued Garlock Sealing
Technologies and 14 other defendants for exposure to asbestos
contained in products they manufactured. Mr. Little alleged that
the exposure caused him to contract mesothelioma. He died before
trial began and Michael Little, the executor of his estate,
revived the case as a wrongful death action.
Mr. Little settled, non-suited, or dismissed his claims against
all defendants except Garlock Sealing. He then proceeded against
Garlock Sealing, the sole defendant.
Zebulon Little, Jr. began work as a machine installation worker
at the Newport News Shipbuilding and Drydock Company from April
1961 to December 1963. After a brief stint at the United States
Marine Corps, he returned in February 1968 and resumed his
duties. He performed repairs on submarines, and he worked on
construction of submarines that were located on the navigable
waters of the James River.
In creating gaskets, Mr. Little created visible airborne dust
that contained asbestos. The dust covered his hands and
clothing, and he inhaled asbestos-laden dust. He was also
exposed to asbestos when he repaired or replaced gaskets or
packing. Garlock Sealing manufactured the material used to
create the gaskets.
The removal of asbestos pipe covering that was attached to
valves or flanges, which were not manufactured by Garlock
Sealing, caused further exposure to asbestos dust.
During trial, Garlock Sealing presented evidence that the
asbestos contained in the products Mr. Little used had been
manufactured or distributed by other entities. Garlock Sealing
requested that the jury apportion damages among other makers of
asbestos-containing products, including three entities that were
bankrupt.
The circuit court permitted the jury to apportion damages among
Garlock Sealing, manufacturers who settled before trial, and
manufacturers who were never parties to this litigation. The
jury returned a verdict for the plaintiff in the amount of
US$467,818.59 and apportioned 30% of the damages to Garlock
Sealing and 29% of the damages to three entities that were
bankrupt. The circuit court entered a final judgment that
required that Garlock Sealing pay the 29% of damages apportioned
to the bankrupt entities as well as the 30% of damages
apportioned to Garlock Sealing. Thus, Garlock Sealing's total
liability was 59% of the verdict or US$276,012.96.
In its appeal, Garlock Sealing argued that a manufacturer of a
product has no duty to warn of the dangers or defects of
products manufactured by others. It also argued that maritime
principles of law should not control the resolution of the
claims since Mr. Little's work aboard ships "has no effect on
maritime activities." Garlock Sealing asserted that because of
the latency of the disease, there could be no relationship
between its failure to warn and traditional maritime activity.
Garlock Sealing argued that the circuit court erred in its
apportionment of damages. The Company asserted that according to
principles of maritime law, damages are assessed according to
the percentage of fault assigned by a jury and that principles
of joint and several liability do not apply. It also protested
having to compensate the plaintiff for damages apportioned to
three bankrupt insolvent companies.
In its opinion, the Supreme Court held that ship repair is a
maritime activity. Mr. Little's task to install and maintain the
gaskets was necessary to enable the submarines to operate
properly.
The Supreme Court also refused to permit Garlock Sealing to
"obtain an apportionment of liability among itself and 10
entities that were not parties to this litigation and then
complain about the method of apportionment." The Court added
that it would not allow a litigant to invite error and then take
advantage of the situation created by his own wrong.
ASBESTOS LITIGATION: MD Court Rules on Third-Party Injury Claims
----------------------------------------------------------------
The Maryland District Court on September 9, 2005 handed down a
ruling to determine whether coverage existed for third party,
asbestos-related, bodily injury claims brought by Porter Hayden
Company against National Union Fire Insurance Company of
Pittsburgh, PA and American Home Assurance Company.
After Porter Hayden filed for Chapter 11 protection, the action
was removed and the insurers commenced second declaratory
judgment action concerning coverage under additional
comprehensive general liability and second-layer excess
liability policies. Following withdrawal of the reference and
consolidation of actions, insurers moved for partial summary
judgment.
National Union Fire Insurance Company of Pittsburgh,
Pennsylvania and American Home Assurance Company filed a joint
motion for partial summary judgment regarding three key issues
as to the scope of coverage: (1) the trigger of coverage; (2)
the method by which any coverage is to be allocated among any
triggered policies; and (3) the application of "completed
operations" aggregate limits.
Judge Andre M. Davis of the District Court denied the insurers'
motion as to trigger of coverage, granted the insurers' motion
as to allocation, and granted in part the insurers' motion as to
completed operations.
Judge Davis held that under Maryland law, coverage for third-
party asbestos-related bodily injury claims was triggered upon
exposure, exposure-in-residence, and manifestation of disease.
The law also states that coverage had to be allocated among all
policies triggered by claims through application of pro rata,
time-on-the-risk formulation. Aggregate coverage limits for
completed operations in policies in effect after insured's
operations were completed applied to claims that triggered those
policies. Judge Davis further stated that factual issues existed
as to whether insured's operations were "completed" during
relevant time periods and which, if any, claims against insured
were subject to aggregate policy limits. Nevertheless, any
portion of bodily injury that occurs after completed operations
will be subject to the aggregate limits of any policies that
were in effect after Porter Hayden's operations were completed.
Porter Hayden's predecessors (H.W. Porter Company, a New Jersey
corporation, and Reid-Hayden, Inc., a Maryland corporation)
commenced operations in the mid-1920s. Shortly thereafter, H.W.
Porter acquired Reid-Hayden and operated it as a subsidiary. The
two corporations merged in 1966 and became Porter Hayden
Company, a Maryland corporation, which has maintained its
headquarters continuously in Baltimore.
From inception, Porter Hayden and its predecessors conducted
operations connected with asbestos. Porter Hayden and its
predecessors installed insulation containing asbestos from the
1920s until 1973. In or about 1973, Porter Hayden ceased using
insulation materials that contained asbestos. Porter Hayden may
have continued to remove or work with pre-existing insulation
containing asbestos in connection with the installation of
replacement non-asbestos insulation, through the 1980s.
By the mid-1950s, Porter Hayden had developed a separate line of
business in which it sold, handled, or distributed asbestos-
containing insulation materials manufactured by third parties,
and other products, without associated installation operations.
Porter Hayden stopped accepting new insulation installation
contracts in about 1989 and, since about 1992, has had no
ongoing operations as an installer of insulation.
Since 1976, Porter Hayden has been sued by thousands of persons
alleging bodily injury caused by exposure to asbestos. In
December 2000, Porter Hayden brought a judgment action in the
Circuit Court for Baltimore City seeking a declaration as to the
meaning of certain provisions in two insurance policies issued
by National Union to Porter Hayden in the mid-1980s with regard
to the third-party, asbestos-related, bodily injury liability
claims pending and expected to be brought against it. That state
court declaratory judgment action proceeded toward resolution in
state court.
By January 2002, when Porter Hayden filed its amended complaint,
the number of pending claims brought by persons expressly or
implicitly alleging bodily injury in the period April 1, 1984 to
April 1, 1986 exceeded 70,000.
In March 2002, Porter Hayden filed for Chapter 11 Bankruptcy in
the bankruptcy court of this district. National Union then
removed the declaratory judgment action to this court as an
adversary proceeding related to the Porter Hayden bankruptcy.
National Union and American Home brought a second declaratory
judgment action as an adversary proceeding within the Porter
Hayden bankruptcy case.
The bankruptcy court granted leave to the Official Committee of
Unsecured Creditors of Porter Hayden to intervene in both
adversary proceedings, and the Committee is now litigating these
cases on behalf on Porter Hayden. At the parties' request, and
after conferring with the bankruptcy court, the District Court
withdrew the reference of these matters to the bankruptcy court
and consolidated the two adversary proceedings in the present
action.
The seven insurance policies at issue include four primary
comprehensive general liability policies issued by National
Union to Porter Hayden from April 1, 1984 to April 1, 1988. Each
of these policies contains standard form CGL policy language
concerning the insuring agreement. Specifically, the policies
provide that the company will pay on behalf of the insured all
of its obligations to pay damages because of "bodily injury ...
to which this insurance applies, caused by an occurrence."
Elisa A. Eisenberg, Jackson and Campbell PC, Washington, DC,
represented National Union Fire Insurance Company and American
Home Assurance Company.
Robert E. Johnston, Spriggs and Hollingsworth, Washington, DC,
stood for Porter Hayden Company.
ASBESTOS LITIGATION: KY Court Rejects Remand of the Miller Suit
---------------------------------------------------------------
The Western District Court of Kentucky on September 28, 2005
denied the motion to remand the asbestos-related suit styled,
"Tommy Miller and Versie Miller v. Occidental Chemical
Corporation, et al.," with Case No. Civ.A. 105CV124R.
In the court opinion, Judge Thomas B. Russell concluded that the
removal was timely filed and the City of Bowling Green was
fraudulently joined; therefore, the motion to remand should be
denied. Also, the City of Bowling Green should be dismissed.
Tommy Miller filed his claims for injury allegedly arising out
of his employment in a plant constructed with asbestos. He filed
this action for judgment in Warren Circuit Court, Bowling Green,
Kentucky, seeking judgment against asbestos product defendants:
Occidental, Cytec, Plastics Engineering, Durez, Union Carbide
Corporation, General Electric Company, and Eaton Corporation.
Mr. Miller also sued property owner defendants: Cutler-Hammer,
Inc. and the City of Bowling Green, along with Eaton
Corporation.
The Millers cited products liability, negligence, breach of
warranty and misrepresentation against the asbestos product
defendants. While for the property owner defendants, they
indicated punitive damages, loss of consortium, negligence, and
breach of warranty.
The complaint was filed on July 13, 2005 and on August 19, 2005,
Durez filed a Notice of Removal, accompanied by a written
consent to removal on behalf of Occidental. On August 22, 2005,
Cutler-Hammer, General Electric Company, Cytec, Eaton, Plastics
Engineering, and Union Carbide Corporation each filed separate
notices of consent to removal. Since then, both General Electric
Company and Union Carbide Corporation have been dismissed from
the case pursuant to settlement agreements. The remaining
defendants, then, are: Occidental, Cutler-Hammer, Cytec, Eaton,
Plastics Engineering, and the City of Bowling Green. No notice
of consent to removal has been filed by the City of Bowling
Green.
Durez based its removal on this court's diversity jurisdiction,
because, it argues, the City of Bowling Green was fraudulently
joined and should not be included in the diversity analysis.
For their motion to remand, the Millers argued that the removal
was defective because of the six defendants who filed their
consents to removal separately from the initial notice of
removal filed by Durez. The rule of unanimity requires that all
defendants who have been served or otherwise properly joined in
the action must either join in the removal, or file a written
consent to the removal.
The Court held that while the Federal Rules of Civil Procedure
did not permit the defendants to file their notices of consent
separately from the notice of removal filed by Durez, Sixth
Circuit law does not support this construction of the rules. The
procedure followed by the defendants in this case, then, was
proper.
In addition, the defendants argued that the joinder of the City
of Bowling Green, which would defeat diversity, is fraudulent
because there is no colorable basis for a claim against the City
of Bowling Green.
As part of a post-World War II economic reconstruction plan, the
City of Bowling Green issued a number of industrial revenue
bonds in order to promote the economic development of the area.
The City contracted with Cutler-Hammer to build a factory that
the City would then lease to the Company. The industrial revenue
bonds were also used to purchase some of the machines used in
the Cutler-Hammer factory. Machines purchased with such bond
money were labeled with the name of the city so that Cutler-
Hammer could keep track of which machines were so purchased.
Even assuming that Mr. Miller's work with the machines did have
some impact on his asbestos exposure, this fact would not change
the city's legal relationship to Cutler-Hammer. Therefore, the
City of Bowling Green was fraudulently joined and the motion to
remand must be denied.
Eric J. Jacobi, William R. Kenealy, Clay, Kenealy, Wagner &
Adams PLLC, Louisville, KY, represented the Millers.
Rebecca F. Schupbach, Wyatt, Tarrant & Combs LLP, James M. Gary,
Weber & Rose, Patrick W. Gault, Weber & Rose, Louisville, KY,
Julie M. Payne, Matthew W. Breetz, Stites & Harbison, PLLC,
Louisville, KY, A. Timothy Jones, Eric Allen Ludwig, Hawkins &
Parnell LLP, Atlanta, GA, Lynn K. Fieldhouse, Scott T. Dickens,
Tachau, Maddox, Hovious & Dickens, PLC, Ridley M. Sandidge, Jr.,
Reed, Weitkamp, Schell, Cox & Vice, Louisville, KY, Douglas W.
Gott, Bell, Orr, Ayers & Moore, Bowling Green, KY, H. Eugene
Harmon, Bowling Green, KY, for stood for the defendant.
ASBESTOS LITIGATION: BNS Co. Named in 74 New Claims, 604 Total
--------------------------------------------------------------
Since 1994, BNS Holding, Inc.'s subsidiary, BNS Co., has been
named as a defendant in a total of 604 asbestos claims as of
September 30, 2005, according to the holding company's latest
filing submitted to the Securities and Exchange Commission.
In many cases these claims involve more than 100 other
defendants. Fifty-four of those claims were filed prior to
December 31, 2001. These claims stem from toxic tort injuries
related to the alleged use of asbestos material in pumps sold by
its former pump division, and other product liability claims
relating to the use of machine tools sold by divisions of BNS
Co. which were sold many years ago. Most of these suits are
toxic tort claims resulting primarily from the use of small
internal seals that allegedly contained asbestos and were used
in small fluid pumps manufactured by BNS Co.'s former pump
division, which was sold in 1992.
As of September 30, 2005, BNS Co. has received notice of another
74 claims.
In 2002, 42 claims were settled for an aggregate of about
US$30,000 exclusive of attorney's fees. In September 2004 three
Pennsylvania claims were granted Summary Judgment and have been
closed. In February 2005 we were notified that five NJ claims
were granted summary judgment in November 2004 and are now
closed. In addition, 2 claims have been dismissed and 3 claims
closed through summary judgment in Pennsylvania. In March 2004,
68 of the MI claims were settled and/or dismissed, only one
claimant received any money (US$500.00), all others were
dismissed.
The Company is unable to identify the number and location of
fluid pumps manufactured by BNS Co. and, therefore, is unable to
estimate the aggregate number of unasserted claims which might
be filed in the future. This product line was introduced in the
late 1800s. The materials alleged to contain asbestos were used
for an undetermined period of time ending in the late 1960s. BNS
Co. (then named Brown & Sharpe Manufacturing Company) sold its
pump division in 1992 but remains subject to claims related to
products manufactured prior to that date.
In October 2005, the Company and its insurers settled two claims
for an aggregate of US$150,000 and an additional two claims were
dismissed. There were 302 known claims open and active as of
September 30, 2005. However, under certain circumstances, some
of the settled claims may be reopened.
In April 2004, three Michigan claims were dismissed. In October
2004 one claim was dismissed. In November 2004, 20 claims were
dismissed. In December 2004, 56 claims were dismissed with seven
of these claims settling for US$500.00 each for a total of
US$3,500. In May 2005, seven claims were dismissed. In June
2005, 55 claims were dismissed. In August 2005, 25 claims were
dismissed and 6 settled for US$500.00 each.
The Company believes BNS Co. has significant defenses to any
liability for toxic tort claims on the merits. It should be
noted that, to date, none of these toxic tort claims have gone
to trial and therefore there can be no assurance that these
defenses will prevail. Settlement and defense costs to date have
been insignificant.
In the late 1980s, insurance companies began issuing policies
with specific exclusions for claims relating to asbestos. BNS
Co. has identified continuous insurance coverage from 1974
through 1988 that does not include such exclusions, with
estimated aggregate coverage limits of about US$158 million for
these policy years. The Company estimates that the aggregate
remaining self insured retention relating to these policy years
is about US$3.3 million. Additionally, the Company has
identified secondary evidence (such as past billings),
indicating that BNS Co. had additional insurance coverage from
1970 through 1973 that does not include such exclusions.
The Company is currently in the process of confirming that these
policies were in place and the amount of the remaining self
insured retention relating to these years. Although there are no
indications that the aforementioned insurance coverage has
eroded from past claims, there is no assurance of this due to
incomplete Company insurance records. Policies issued for BNS
Co. beginning in 1989 contained exclusions relating to asbestos.
BNS Co.'s insurance records for the periods prior to 1970 are
incomplete and do not indicate what insurance coverage is
available to BNS Co. for asbestos and other product liability
claims arising prior to that time.
The estimated aggregate coverage limits relate to a number of
insurance carriers. In general, these carriers have acknowledged
the evidence of coverage but have declined to verify the
coverage or limits until such time as the limits apply.
BNS Co. annually receives retroactive billings or credits from
its insurance carriers for any increase or decrease in claims
reserves as claims are filed, settled or dismissed, or as
estimates of the ultimate settlement and defense costs for the
then-existing claims are revised. In addition, the Company has
recorded a liability of US$499 on the consolidated balance sheet
relating to the open and active claims against BNS Co. as of
September 30, 2005.
As of November 5, 2005, no known toxic tort or asbestos claims
have been filed against BNS Holding, which came into existence
in December 2004 and has never conducted any active business
operations. There can be no assurance, however, that monies
received by BNS Holding from its wholly-owned subsidiary by way
of reimbursement for "public company reporting costs" that were
formerly the responsibility of BNS Co. or by way of dividends or
otherwise might not under some circumstances be subject to
claims against BNS Co.
The Company expects that its BNS Co. subsidiary will continue to
be subject to additional toxic tort claims in the future.
Based in Middletown, RI, the Company became a holding company
for BNS Co. in December 2004. BNS Co was engaged in the
metrology business and the design, manufacture, and sale of
precision measuring tools and instruments, and manual and
computer controlled measuring machines. BNS Co. sold its
remaining assets in June 2004.
ASBESTOS LITIGATION: UIC, Detroit Stoker Claims Drop to 12,897
--------------------------------------------------------------
As of September 30, 2005, United Industrial and Detroit Stoker
were named in 12,897 pending asbestos-related claims, compared
to about 21,123 pending claims as of December 31, 2004 and about
21,114 pending claims as of September 30, 2004. Claims were
filed in Arkansas, California, Louisiana, Michigan, Minnesota,
Mississippi, New Jersey, New York and North Dakota.
Neither United Industrial nor Detroit Stoker fabricated, milled,
mined, manufactured or marketed asbestos, and neither made or
sold insulation products or other construction materials that
have been identified as the primary cause of asbestos-related
disease in the vast majority of claimants. Rather, they made
several products, some of the parts and components of which used
asbestos-containing material fabricated and provided by third
parties. The use of asbestos-containing materials ceased in
about 1981.
Cases typically name 80 to 120 defendants, although some cases
have as few as 6 and as many as 250 defendants. As of this date,
United Industrial and Detroit Stoker have not gone to trial with
respect to any asbestos-related personal injury claims.
Accordingly, neither has been required to pay any punitive
damage awards. In addition, some previously pending claims have
been settled or dismissed (with or without prejudice).
Management continues to believe that a majority of the claimants
in pending cases will not be able to demonstrate that they have
been exposed to the Company's asbestos-containing products or
suffered any compensable loss as a result of any such exposure.
This belief is based in large part on two factors: the limited
number of asbestos-containing products they sold and their
access to sales, service, and other historical business records
going back over 100 years. In addition, because of the limited
and restricted placement of the asbestos-containing products,
liability cannot be presumed because, even if an individual
contracted an asbestos-related disease, not everyone who was
employed at a site was exposed to their asbestos-containing
products.
To date, settlements of claims have been made without any
admission of liability. Before paying any settlement amount,
they require proof of exposure to their asbestos-containing
products and proof of injury to the plaintiff. In addition, the
claimant is required to execute a release from any liability for
asbestos-related injuries or claims.
During 2004, Detroit Stoker was named as a defendant in two
cases in Arkansas alleging personal injuries to one and about
199 plaintiffs, respectively, as a result of silica or
refractory ceramic fiber exposure in addition to asbestos
exposure. The pleadings in these two cases name about 32 and 68
defendants, respectively, and include no allegations specific to
Detroit Stoker.
The insurance coverage potentially available to United
Industrial and Detroit Stoker is substantial. Following the
institution of asbestos litigation, an effort was made to
identify all of the primary and excess insurance carriers from
1940 through 1990. There were about 40 such carriers, all of
which were put on notice of the litigation. In November of 1999,
a Participation Agreement was entered with their primary
insurance carriers. The agreement is an advance understanding
that supplements all of the contracts of insurance, without
altering the coverage of those contracts, that creates an
administrative framework within which the insurers and United
Industrial and Detroit Stoker can more efficiently and
effectively manage the large quantity of on-going litigation.
Company recorded an estimated insurance recovery as of December
31, 2002, of US$20,343,000 reflecting the estimate determined to
be probable of being available to mitigate the potential
asbestos liability through 2012. The Company continuously
evaluates this insurance receivable and believes it is
appropriately valued at September 30, 2005.
The Company's asbestos liability was US$31,852,000 and
US$31,334,000 at September 30, 2005 and 2004, respectively, and
its insurance receivables for asbestos-related liabilities were
US$20,343,000 and US$20,236,000 at September 2005 and 2004,
respectively.
ASBESTOS LITIGATION: PA Court Junks Henkel Suit V. Two Insurers
---------------------------------------------------------------
The Eastern District Court of Pennsylvania on November 1, 2005
dismissed the complaint brought by Henkel Corporation against
The Hartford Accident & Indemnity Corporation, et al. Tagged as
No. CIV.A. 05-1266, the suit sought to resolve whether the
defendant insurers had a duty to cover defense and indemnity
costs filed by asbestos personal injury claimants against
Henkel.
Henkel Corporation, as the successor of Loctite Corporation,
sought insurance coverage from Hartford Accident and Indemnity
Company and Liberty Mutual Insurance Company for the defense and
indemnity costs they incurred and will continue to incur in
connection with suits filed by claimants who have allegedly been
exposed to Permatex-brand, asbestos-containing products.
Henkel seeks monetary damages for defense and indemnity costs in
the defense of past and pending actions, declaratory relief to
require defendants to honor their coverage obligations to
Henkel, and punitive damages and attorneys' fees due to
defendants' intentional and bad-faith conduct.
According to the complaint, Loctite acquired Permatex Company,
Inc. by a subsidiary merger in 1972. Six years later, in 1978,
Permatex Company, Inc. merged into Loctite. From 1976 to 1985,
Hartford and Liberty issued Comprehensive General Liability
and/or Completed Operations and Products Hazards policies to
Loctite.
Personal injury claimants filed in the Superior Court of New
Jersey (Middlesex County), Court of Common Pleas (Philadelphia
County), and Supreme Court of the State of New York (New York
County), respectively, against Permatex Industrial Corporation
and/or Permatex, Inc., among others. The actions did not name
Loctite or Permatex Company, Inc. as defendants, nor were the
lawsuits filed against Permatex, Inc. or Permatex Industrial
Corporation as successors-in-interest to Loctite or any of its
predecessors.
Hartford and Liberty refused to assume the duty to defend Henkel
against these claims. Henkel asserted that it is entitled to
defense and indemnity coverage in connection with the past,
pending, and future asbestos products liability cases arising
from Permatex-brand, asbestos- containing products.
Henkel contended that the plaintiffs have mistakenly named
Permatex, Inc. and/or Permatex Industrial Corporation, instead
of Loctite or Permatex Company, Inc., as the parties potentially
responsible for the alleged injuries caused by exposure to
Permatex-brand products. Henkel asserted that neither Permatex,
Inc. nor Permatex Industrial Corporation ever manufactured,
sold, or distributed any asbestos-containing products or assumed
any liabilities for Permatex-brand products that contained
asbestos. Instead, Henkel insisted that Loctite, as a result of
its acquisition of and merger with Permatex Company, Inc., is
the party potentially responsible for injuries caused by
Permatex-brand products that contained asbestos.
Hartford and Liberty continued to deny that they have a
contractual duty to defend Henkel (or its predecessor Loctite).
Hartford asserted that the complaint should be dismissed under
Federal Rules of Civil Procedure, for lack of subject matter
jurisdiction, failure to state a claim, and failure to join
necessary and indispensable parties, respectively.
Judge Eduardo C. Robreno held that because the legal treatment
of this issue is the same under both Pennsylvania and
Connecticut law, there is no actual conflict in this case and
the Court may rely on the law of either or both jurisdictions.
He also concluded that because Hartford insured neither
Permatex, Inc. nor Permatex Industrial Corporation, the insurer
is not responsible for defending the underlying actions. Since
the insured Loctite was not named in the claims against Henkel,
the Court granted the motion to dismiss the suit.
William John Brennan, Butera, Beausang, Cohen & Brennan, King of
Prussia, PA, stood for Henkel.
David Newmann, Hogan & Hartson L.L.P., Philadelphia, PA,
represented Hartford and Liberty.
ASBESTOS ALERT: Appeal Court Bars Claims Under Survival Action
--------------------------------------------------------------
Asbestos-related claims cannot be brought under survival and
wrongful death actions since they are covered under workers'
compensation, held the Court of Appeal of Louisiana on Oct. 28,
2005.
In determining that asbestos is both an oxygen compound and a
metal compound, the Court ruled that injuries resulting from
exposure are considered occupational diseases covered by
workers' compensation.
In support of Defendant Eaton Corporation's motion for summary
judgment, Tulane University chemistry professor Dr. Harry E.
Ensley testified that that the forms of asbestos contain both
oxygen and metals combined with other elements in fixed
proportions and concluded that asbestos is both an oxygen
compound and a metal compound.
Case No. 39,952-CA styled, "J.B. ADAMS, et al, Plaintiffs-
Appellants v. Asbestos Corporation Ltd., et al, Defendants-
Appellees," is an ongoing litigation initiated by the heirs of
Walter Counts, a former Libby-Owens-Ford Company employee, who
died of lung cancer on November 28, 1997.
LOFC was added as a defendant in 1999, and in 2001, Eaton Corp
was added as a successor-in-interest to LOFC.
On August 4, 2003, Eaton sought to dismiss the motion for
summary judgment seeking to have the Plaintiffs' survival and
wrongful death actions on the grounds that workers' compensation
provides the exclusive remedy. Eaton offered the affidavit of
Tulane University chemistry professor Dr. Harry E. Ensley. Eaton
also included a statement of undisputed fact providing that
asbestos is an oxygen compound and a metal compound, other than
lead.
Dr. Ensley testified that he studied asbestos' chemical
composition and structure of its various forms and that
chemistry involves the study of compounds and their
constituents.
Anticipating the Plaintiffs' arguments, Dr. Ensley stated that
no commonly used term in chemistry would limit either "oxygen
compounds" or "metal compounds" to something less than all
chemical compounds containing at least one atom of oxygen or one
atom of metal, respectively. He also stressed that although
asbestos is classified as a mineral, which is defined as "an
element of chemical compound that is normally crystalline," does
not change the fact that it is also an oxygen compound and a
metal compound.
To counter Eaton's move, the Plaintiffs offered the affidavit of
Dr. Rene A. De Hon, a professor with doctorates in geology and
geochemistry, who stated that while asbestos contains oxygen and
metals, it is neither an oxygen compound nor a metal compound.
Dr. De Hon explained that minerals are classified according to
their chemical composition and the crystalline structure of
their constituent atoms. He further explained that asbestos is a
silicate mineral and is considered a silicate compound.
Moreover, it is the physical properties of asbestos, rather than
its composition that make it a health risk.
At the hearing on the motion for summary judgment, Eaton
objected to Dr. De Hon's affidavit on the grounds of relevance
arguing that as a geologist he was not qualified to discuss
chemical compounds. The trial court ordered the affidavit
admitted, noting that he would give it the "proper
consideration."
The trial court ultimately granted Eaton's motion for summary
judgment dismissing the wrongful death and survival actions of
the plaintiffs on the grounds that workers' compensation
provides the exclusive remedy. In the reasons for judgment, the
trial court concluded that asbestos is included in the 1952
version of La. R.S. 23:1031.1 as both an oxygen and a metal
compound.
Presiding Judge James E. Stewart, together with Judges J. Jay
Caraway, Charles B. Peatross, D. Milton Moore III, and John
Larry Lolley, reviewed the case that was appealed from the First
Judicial District Court for the Parish of Caddo, Louisiana Trial
Court No. 434,376, presided by Hon. Judge Scott J. Crichton.
LeBlanc & Waddell, by Jody E. Anderman, Brian F. Blackwell,
Baron & Budd, by Lawrence G. Gettys, Kevin D. McHargue, Sherri
A. Saucer, served as counsels for Plaintiffs Appellants.
Phelps Dunbar, by H. Alston Johnson III, Jane H. Barney, Annette
N. Peltier, served as counsels for Defendants Appellees.
COMPANY PROFILE
Eaton Corporation (NYSE: ETN)
Eaton Center, 1111 Superior Ave.
Cleveland, OH 44114-2584
Phone: 216-523-5000
Fax: 216-523-4787
http://www.eaton.com
Description:
Operating in 27 countries, Eaton Corporation's product lines
include electrical power distribution and control equipment,
engine components, and hydraulic and fluid power products for
aerospace, automotive, and other industrial uses. The Company is
also one of the world's largest manufacturers of golf club
grips. Eaton spun off its semiconductor equipment operations as
Axcelis Technologies.
ASBESTOS ALERT: ADEQ Urges El Paso to Resolve Asbestos Violation
----------------------------------------------------------------
In September 2005, the State of Arizona, on behalf of the
Arizona Department of Environmental Quality informed El Paso
Natural Gas Company of its intent to require a civil penalty and
preventive actions by the Company to resolve a Notice of
Violation issued by the ADEQ for alleged regulatory violations
related to its handling of asbestos-containing asphaltic pipe
coating.
To date, the likely penalty and the costs associated with any
preventive actions are unknown.
Houston, TX-based El Paso Natural Gas is an indirect wholly
owned subsidiary of El Paso Corporation.
COMPANY PROFILE
El Paso Corporation (NYSE: EP)
1001 Louisiana St.
Houston, TX 77002
Phone: 713-420-2600
Fax: 713-420-4417
http://www.elpaso.com/
Description:
El Paso Corporation is primarily engaged in gas transportation
and storage; oil and gas exploration and production; and gas
gathering and processing. After expanding into various non-
regulated energy industries, the Company is going back to its
roots as a natural gas company.
ASBESTOS ALERT: Chevron Phillips to Resolve Liability Dispute
-------------------------------------------------------------
Chevron Phillips Chemical Company LLC divulged in its latest
filing submitted to the Securities and Exchange Commission that
it is a party to certain asbestos lawsuits for which the
financial responsibility between CPChem and ConocoPhillips is
disputed.
On July 1, 2000, Chevron Corporation and Phillips Petroleum
Company, now ConocoPhillips, combined its worldwide
petrochemical businesses, excluding Chevron's oronite additives
business, to form Chevron Phillips Chemical Company LLC. Chevron
and ConocoPhillips each own 50 percent of Chevron Phillips
Chemical.
CPChem, ConocoPhillips and Chevron are attempting to resolve
whether ConocoPhillips or CPChem has financial responsibility
for these lawsuits. In the meantime, ConocoPhillips is managing
and defending these lawsuits. In the event the financial
responsibility for these lawsuits is ultimately determined to
rest with CPChem, CPChem may be required to record a charge to
operations that could be material to the period reported.
Company Profile:
Chevron Phillips Chemical Company LP
10001 Six Pines Drive
The Woodlands, TX 77380
832.813.4100
http://www.cpchem.com/
Fiscal Year-End December
2004 Sales (mil.) US$9,558.0
1-Year Sales Growth 36.2%
2004 Net Income (mil.) US$605.0
1-Year Net Income Growth 8,542.9%
2004 Employees 5,300
1-Year Employee Growth (2.8%)
Description:
Among the largest US petrochemical firms, CP Chem produces
ethylene, propylene, polyethylene, and polypropylene --
sometimes used as building blocks for the company's other
products such as pipe. CP Chem also produces aromatics such as
benzene and styrene, specialty chemicals such as acetylene
black, and drilling and mining chemicals. The Company has formed
several petrochemicals joint ventures in the Middle East. Most
of CP Chem's operations are located in the US.
New Securities Fraud Cases
BOSTON SCIENTIFIC: Curtiss V. Trinko Files Securities Suit in MA
----------------------------------------------------------------
The Law Offices of Curtis V. Trinko, LLP, initiated a class
action lawsuit on behalf of purchasers of the securities of
Boston Scientific Corporation ("Boston Scientific" or the
"Company") (NYSE: BSX) between March 31, 2003 and August 23,
2005, inclusive (the "Class Period").
The action, Civil Action Number 05-CV-12157 (JLT), is pending in
the United States District Court for the District of
Massachusetts against defendants Boston Scientific Corporation,
and certain senior officers.
The complaint alleges that, during the Class Period, Boston
Scientific and the Individual Defendants violated provisions of
the Securities Exchange Act of 1934, causing Boston Scientific's
stock to trade at artificially inflated levels. Specifically,
the complaint alleges that Boston Scientific and the Individual
Defendants failed to disclose material facts and made false and
misleading statements of material fact concerning the Company's
abilities to satisfy the FDA's regulations governing the
Company's medical device product quality controls. The complaint
further alleges that the Individual Defendants sold over $400
million in Company stock as a result of insider trading.
According to the complaint, on August 23, 2005, investors
learned of the defendants' broad-based concealment of its failed
quality control program and the risks the Company faced as a
result of such failure. As a result, Boston Scientific's stock
price dropped $1.23 per share, or 4.5% to $25.92, on volume of
15.8 million shares - and nearly $19.98 per share or 43.4% from
its Class Period high of $45.81 on April 5, 2004.
For more details, contact Curtis V. Trinko, Esq. of The Law
Offices of Curtis V. Trinko, LLP, Phone: 212-490-9550, Fax:
212-986-0158, E-mail: ctrinko@trinko.com.
HCA INC.: Lerach Coughlin Files Securities Fraud Suit in M.D. TN
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action on behalf of an
institutional investor in the United States District Court for
the Middle District of Tennessee on behalf of purchasers of HCA,
Inc. ("HCA") (NYSE:HCA) publicly traded securities during the
period between January 12, 2005 and July 12, 2005 (the "Class
Period").
The complaint charges HCA and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. HCA is the nation's largest chain of for-profit hospitals.
The complaint alleges that during the Class Period, defendants
caused HCA's shares to trade at artificially inflated prices by
issuing false statements concerning the Company's purported
financial successes while concealing that HCA's operational
metrics had substantially deteriorated. Defendants' positive
statements had their intended effect, inflating the Company's
stock price by almost 50% from less than $40 per share on
January 11, 2005 to its Class Period high of over $58 per share
on June 22, 2005, during which time defendants sold almost 1
million shares of the Company's stock at inflated prices,
pocketing more than $48 million in proceeds.
According to the complaint, on July 13, 2005, HCA issued a
profit warning for its 2Q 2005 disclosing that:
(1) contrary to defendants' statements that HCA had been
experiencing trends beneficial to its "operating
results," in reality the Company was then experiencing
negative operational trends which were driving down
HCA's revenues and decreasing the Company's
profitability;
(2) despite defendants' statements that the Company was
experiencing "a moderation in the growth in its
uninsured patient admissions and emergency room
visits," the Company's uninsured admissions and
emergency room visits were actually increasing more
rapidly than insured admissions and emergency room
visits, which defendants knew was increasing the
Company's bad-debt expense and reducing HCA's
profitability;
(3) notwithstanding defendants' statements lauding the
Company's "favorable change in its estimated provision
for doubtful accounts," and "substantial(ly)
improv(ing) ... financial performance" due to its
"improving bad debt trends," HCA's provision for
doubtful accounts was actually increasing as a
percentage of revenues; and
(4) defendants had materially limited surgeries at certain
hospitals due to illegal misconduct.
On this news, HCA's stock fell approximately $5 per share on
nearly six times the average daily trading volume over the
preceding 12 months. Soon thereafter, the Securities and
Exchange Commission and the U.S. Department of Justice opened
formal investigations into Class Period insider trading at HCA.
For more details, contact William Lerach of Lerach Coughlin
Stoia Geller Rudman & Robbins, LLP, Phone: 800-449-4900, E-mail:
wsl@lerachlaw.com, Web site: http://www.lerachlaw.com.
HCA INC.: Schatz & Nobel Lodges Securities Fraud Suit in M.D. TN
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., filed a lawsuit seeking
class action status in the United States District Court for the
Middle District of Tennessee on behalf of all persons who
purchased the securities of HCA, Inc. (NYSE:HCA) between January
12, 2005 and July 12, 2005 (the "Class Period").
The Complaint alleges that HCA violated federal securities laws
by issuing false or misleading public statements. On July 13,
2005, HCA issued a profit warning for the second quarter of
2005, disclosing adverse business trends, which, according to
the Complaint, were contrary to its previous positive statements
and representations. Prior to this disclosure, the Complaint
alleges that company insiders sold almost one million shares of
HCA stock for more than $48 million in proceeds. After the
disclosure, HCA stock fell from a close of $54.57 on July 12,
2005, to close at $49.74 on July 13, 2005.
For more details, contact Wayne T. Boulton and Nancy A. Kulesa
of Schatz & Nobel, P.C., Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
MOTIVE INC.: Schiffrin & Barroway Lodges Securities Suit in TX
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP, initiated a class
action lawsuit in the United States District Court for the
Western District of Texas on behalf of all securities purchasers
of Motive, Inc. (Nasdaq: MOTV) ("Motive" or the "Company")
between April 21, 2005 and October 26, 2005 inclusive (the
"Class Period").
The complaint charges Motive, Scott L. Harmon, and Paul M. Baker
with violations of the Securities Exchange Act of 1934. More
specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse
facts, which were known to defendants or recklessly disregarded
by them:
(1) that the Company improperly recognized $5.2 million in
revenue from a licensing agreement, which materially
inflated its revenue figures;
(2) the Company's financial statements were presented in
violation of Generally Accepted Accounting Principles
("GAAP"); and
(3) that the Company lacked the necessary personnel and
controls to issue accurate financial reports and
projections.
On October 4, 2005, after the close of the market, Motive
announced that it expected core revenue for the third quarter of
2005, which excludes impact from business acquisitions, to be in
the range of $15.5 million to $17.5 million, compared to core
revenue of $23 million for the same period last year. In
reaction to this announcement, the price of Motive stock fell
dramatically, from $6.26 per share on October 4, 2005 to $4.01
per share on October 5, 2005, a one-day drop of $2.25 per share,
or 35.94 percent, on unusually heavy trading volume. On October
27, 2005, Motive, prior to the opening of the market, issued a
press release announcing financial results for the quarter ended
Sept. 30, 2005, as well as the decision to restate its financial
results for the quarters ended March 31, 2005 and June 30, 2005
and the six-month period ended June 30, 2005. In reaction to
this announcement, the price of Motive stock fell, from $4.12
per share on October 26, 2005 to $3.66 per share on October 27,
2005, a one-day drop of $0.46 per share, or 11.17 percent, on
unusually heavy trading volume.
For more details, contact Darren J. Check, Esq. and 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.
PIXAR ANIMATION: Stull Stull Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action in
the United States District Court for the Northern District of
California on behalf of purchasers of the publicly traded
securities of Pixar Inc. ("Pixar" or the "Company") (NASDAQ:
PIXR) between January 18, 2005 and June 30, 2005 (the "Class
Period").
The complaint alleges that Pixar violated federal securities
laws by making false or misleading public statements.
Specifically, the Complaint alleges that Pixar made improper
projections concerning the expected sales of "The Incredibles"
videos given recent trends in the home video market. On June 30,
2005, Pixar lowered its 2Q05 earnings guidance to $0.10 per
diluted share from $0.15, as a result of disappointing sales of
"The Incredibles" home video units and an increase in Pixar's
reserves for video returns. On this news, Pixar stock fell from
a close of $50.05 per share on June 30, 2005, to close at $43.06
per share on July 1, 2005. On August 26, 2005, Pixar announced
that the SEC had commenced an investigation in connection with
Pixar's reported sales of "The Incredibles" videos.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody, 6 East 45th Street, New York, NY 10017, Phone:
1-800-337-4983, Fax: 212/490-2022, E-mail: SSBNY@aol.com, Web
site: http://www.ssbny.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
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