/raid1/www/Hosts/bankrupt/CAR_Public/051227.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, December 27, 2005, Vol. 7, No. 256
Headlines
ABGENIX INC.: Shareholders Launch Lawsuit in CA Over Amgen Deal
AMERICAN EXPRESS: FL Judge OKs $75M Settlement Over Foreign Fees
APPLE COMPUTER: Settlement Over iPod's Faulty Battery Finalized
ASPEON INC.: CA Court Mulls Appeal of Securities Suit Dismissal
AUGUST TECHNOLOGY: Continues To Face MN Suit V. Rudolph Merger
BOSTON COMMUNICATIONS: Faces Consolidated Securities Suit in MA
CANADA: B.C. Litigation Seeks Repayment of PST on Legal Fees
CINGULAR WIRELESS: Faces Suit in CA Over Costly Cell Phone Calls
CONSTELLATION ENERGY: CA Court Dismisses Antitrust Fraud Lawsuit
CONSTELLATION POWER: WA Antitrust Fraud Suit Dismissal Appealed
CENTRAL FREIGHT: TX Court Mulls Securities Fraud Suit Dismissal
CRAY INC.: Plaintiffs Launch Consolidated Securities Suit in WA
DRUGSTORE.COM: Presents Revised Lawsuit Settlement to NY Court
DRUGSTORE.COM: WA Court Dismisses Securities Fraud Litigation
FAIRPOINT COMMUNICATIONS: Plaintiffs Appeal SC Remand Ruling
H&R BLOCK: County Judge OKs Settlement For "Rapid Refunds" Suit
HARVEST FOODS: Recalls Ashman's Ackees Due to Health Concern
HILTON CORPORATION: Reaches Settlement For HI Mold Injury Suit
INSWEB CORPORATION: Final Fairness Hearing Set April 2006 in NY
KENTUCKY: Lawyer Optimistic Insurance Firms Will Join Settlement
MARSH & MCLENNAN: Working On NYAG Probe, Civil Suit Settlement
MARSH & MCLENNAN: Continues To Face Broker Fee Agreements Suits
MARSH & MCLENNAN: Asks NY Court To Dismiss AXIS Capital Lawsuit
MARSH & MCLENNAN: Continues To Face Faces Market-Timing Lawsuits
NEW YORK: Restaurant Commences Lawsuit Over 3-Day Transit Strike
PIXAR: Shareholders Launch Securities Fraud Lawsuits in N.D. CA
PRICESMART INC.: CA Court Approves Securities Suit Settlement
QWEST COMMUNICATIONS: Lawyers Seek 24% Cut From $400M Settlement
RALPH LAUREN: Reaches Settlement for CA Employee Wardrobing Suit
RODALE INC.: PA Judge Dismisses Illegal Marketing Tactics Suit
SALESFORCE.COM: CA Judge Dismisses Consolidated Investor Lawsuit
VI TECHNOLOGIES: Asks NY Court To Dismiss Employee Overtime Suit
VIA NET.WORKS: Final NY Fairness Hearing Set April 24, 2006
VIISAGE TECHNOLOGY: MA Court Mulls Consolidation of Stock Suits
VIRGINIA: Charlottesville Resident Files Suit Over DNA Testing
VISA CHECK: Firm Releases Advisory Letter Regarding Settlement
WAL-MART STORES: To Appeal $172M Verdict in CA Lunch Break Case
WINNEBAGO INDUSTRIES: Trial in Iowa FLSA Suit Set March 6, 2006
YANKEE CANDLE: Continues To Face CA Labor Laws Violations Suit
New Securities Fraud Cases
NASH FINCH: Lockridge Grindal Files Securities Suit in MN Court
NORTHWEST AIRLINES: Milberg Weiss Bershad Files Fraud Suit in NY
SERACARE LIFE: Abbey Gardy Lodges Securities Fraud Suit in CA
SERACARE LIFE: Federman & Sherwood Lodges Securities Suit in CA
SERACARE LIFE: Schiffrin & Barroway Lodges Securities Suit in CA
*********
ABGENIX INC.: Shareholders Launch Lawsuit in CA Over Amgen Deal
---------------------------------------------------------------
Abgenix, Inc. (NASDAQ: ABGX) faces a shareholders' lawsuit,
alleging that the Fremont, California-based biopharmaceutical
company's agreement to be acquired by larger rival Amgen is
"inadequate," The San Jose Mercury News reports.
The Company agreed last week to be acquired by Thousand Oaks,
California-based biotechnology firm, Amgen, Inc. (NASDAQ: AMGN),
for $22.50 a share, or $2.2 billion. The deal is expected to
close by the end of March. According to a Securities and
Exchange Commission filing by the Company, the complaint, which
seeks class action status, also accuses the Company's directors
of violating their fiduciary obligations to shareholders in
negotiating and approving the merger agreement. The filing
revealed that the suit was filed in Alameda County Superior
Court.
The Company, which uses genetic engineering to create antibody
treatments for inflammatory and autoimmune disorders and cancer,
stated in the SEC filing that it believes the lawsuit is
"without merit." Its shares fell 2 cents to close at $21.48 on
the Nasdaq Stock Market.
AMERICAN EXPRESS: FL Judge OKs $75M Settlement Over Foreign Fees
----------------------------------------------------------------
A $75 million settlement between American Express Co. and
thousands of cardholders who contended in a class action lawsuit
that they paid hidden transaction fees for charges made in
foreign currencies was recent approved by a federal judge, The
Associated Press reports.
Approved recently by U.S. District Judge Cecilia M. Altonaga,
the settlement affects more than 833,000 cardholders who paid
some form of transaction fee from March 28, 1997, to October 15,
2004. Amounts may range from $15 to millions of dollars,
according to attorneys in the case.
Initially filed in state court in August 2003 and then
transferred to federal court, the suit claimed that American
Express failed to adequately inform cardholders that they would
be charged an adjustment of up to 2 percent for the conversion
of charges made in foreign currencies to U.S. dollars. Instead,
according to the lawsuit filed by Edward LiPuma, an anthropology
professor at the University of Miami who was represented by
attorneys Tucker Ronzetti and Adam Moskowitz, the fee was
embedded in the transaction amount that showed up on
cardholders' bills, making it "invisible to consumers." Asked
fro comment on the deal, Mr. Ronzetti told The Associated Press,
"We are pleased that the class is able to get substantial relief
and that American Express agreed to change its business
practices."
Although it settled the case, American Express did not admit to
any wrongdoing and maintained that its conversion practices were
fully disclosed, according to spokeswoman Judy Tenzer. However,
Ms. Tenzer points out that American Express did change its
notification practices to spell out the conversion fees more
clearly.
Mr. Ronzetti told Associated Press that about 8.8 million
notices have been mailed out to American Express cardholders
potentially affected by the settlement, with 833,751 responding
to file claims as of October 30, 2005.
The suit is one of many included in a nationwide settlement that
was preliminary approved by United States District Court for the
Southern District of Florida. The suits allege that the Company
violated the respective state's laws by wrongfully collecting
amounts assessed on converting transactions made in foreign
currencies to U.S. dollars and/or failing to properly disclose
the existence of such amounts in its Cardmember agreements and
billing statements. The plaintiffs in the actions seek, among
other remedies, injunctive relief, money damages and/or
attorneys' fees on their own behalf and on behalf of the
putative class of persons similarly situated, an earlier Class
Action Reporter story (November 24, 2004) reports.
On October 15, 2004, the Court granted preliminary approval of a
nationwide class action settlement to resolve all lawsuits and
allegations with respect to the Company's collection and
disclosure of fees assessed on transactions made in foreign
currencies in the case captioned "Lipuma v. American Express
Bank, American Express Travel Related Services Company, Inc. and
American Express Centurion Bank" (filed in August 2003), an
earlier Class Action Reporter story (November 24, 2004) reports.
The settlement that has been preliminarily approved by the Court
contemplates that the Company would deposit $75 million into a
fund that would be established to reimburse class members with
valid claims, make certain contributions to charitable
organizations to be identified later and pay attorneys' fees and
make certain changes to the disclosures in its Cardmember
agreements and billing statements regarding its foreign currency
conversion practices, an earlier Class Action Reporter story
(November 24, 2004) reports.
The preliminary approval order enjoins all other proceedings
that make related allegations pending a final approval hearing
including, but not limited to the following cases:
(1) Environmental Law Foundation, et al. v. American
Express Company, et al., Superior Court of Alameda
County, California (filed March 2003);
(2) Rubin v. American Express Company and American Express
Travel Related Services Company, Inc., Circuit Court of
Madison County, Illinois (filed April 2003);
(3) Angie Arambula, et al. v. American Express Company, et
al., District Court of Cameron County, Texas, 103rd
Judicial District (filed May 2003);
(4) Fuentes v. American Express Travel Related Services
Company, Inc. and American Express Company, District
Court of Hidalgo County, Texas (filed May 2003);
(5) Wick v. American Express Company, et al., Circuit Court
of Cook County, Illinois (filed May 2003);
(6) Bernd Bildstein v. American Express Company, et al.,
Supreme Court of Queens County, New York (filed June
2003);
(7) Janowitz v. American Express Company, et al., Circuit
Court of Cook County, Illinois (filed September 2003);
(8) Paul v. American Express Company, et al., Superior
Court of Orange County, California (filed January
2004); and
(9) Ball v. American Express, et al., Superior Court of San
Joaquin, California (filed August 2004)
APPLE COMPUTER: Settlement Over iPod's Faulty Battery Finalized
---------------------------------------------------------------
The San Mateo County Superior Court dismissed an appeal against
the settlement of a class action lawsuit against Apple Computer,
Inc., which was brought by customers over the iPod's
rechargeable battery.
On December 20, 2005, the court dismissed the appeal, which was
filed by individual objectors to the settlement. The appeal had
the potential to delay resolution of the case. Its dismissal
though signaled the finalization of the settlement, which
according to a notice posted on the iPod Settlement Web site:
http://www.appleipodsettlement.com/,means Apple and the
Settlement Administrator can move forward with claims
administration and claims fulfillment.
The web site notice also noted that deadlines relating to claim
submissions have not changed. Class members should comply with
the claim filing deadlines identified by the settlement. For
Generation 3 iPods, the claim form submission must be postmarked
within two years of the original product purchase date. The
deadline for submitting Generation 1 and Generation 2 iPod
claims expired on September 30, 2005.
Previously, Apple representatives confirmed that the settlement
over claims that the company misrepresented the capabilities of
the iPod's rechargeable battery was being appealed. The company
though stressed that it did not file the appeal, an earlier
Class Action Reporter story (November 30, 2005) reports.
According to the iPod Settlement Web site, the appeal was filed
on October 24, 2005 in San Mateo County Superior Court. As a
result, settlement benefits will not be provided unless and
until the appeal was resolved. The process, the Web site notes,
could take an extended period of time (up to a year or more), an
earlier Class Action Reporter story (November 30, 2005) reports.
Under the settlement approved by San Mateo County Superior Court
Judge Beth Labson Freeman, customers who bought iPod's first two
models will be entitled to either $25 cash or $50 credit at an
Apple store or if they paid Apple to repair an iPod battery, the
company must refund half of the cost to them. On the other hand,
those who own iPod's third model will be entitled to a free
replacement battery if it fails. Additionally, the settlement
stipulates that affected customers are only those who bought
their iPods before May 31, 2004. These customers must have
experienced battery failure to be eligible and all claims must
be postmarked by September 30, 2005, according to a Web site
created for the settlement, an earlier Class Action Reporter
story (September 1, 2005) reports.
The settlement covered U.S. owners of first, second or third-
generation iPods who purchased their devices before May 31,
2004. For third-generation iPod owners, Apple offered to extend
the one-year warranty for a second year. Third-generation iPod
owners who submit a claim could either get their battery
replaced for free or get a store credit for S$50, that can be
redeemed at the Apple Store online or at kiosks at brick-and-
mortar Apple Store locations, an earlier Class Action Reporter
story (November 30, 2005) reports.
Consumers who bought a first or second-generation iPod who
experienced a battery failure within two years of purchase could
get a $50 Apple Store credit, or a check payment of $25. And
those first, second or third-generation iPod owners who paid for
a battery replacement under Apple's iPod Battery Replacement
Program would be paid 50 percent of their costs, according to
the agreement, an earlier Class Action Reporter story (November
30, 2005) reports.
The suit, which was brought in December 2003 by the San
Francisco-based law firm Girard Gibbs & De Bartolomeo LLP,
claimed that Apple Computer Inc. misrepresented the durability
and usability of the internal, rechargeable Lithium-Ion battery
in the company's popular personal digital music player.
Specifically, the suit claimed that Apple failed to disclose
battery limitations on its first three iPod models. The device,
which has a rechargeable battery that cannot be replaced because
of its design, was advertised to have eight hours of play when
fully charged, but users complained that play time gradually
decreased after months of use, an earlier Class Action Reporter
story (August 30, 2005) reports.
For more details, visit: http://www.appleipodsettlement.com/.
ASPEON INC.: CA Court Mulls Appeal of Securities Suit Dismissal
---------------------------------------------------------------
The United States District Court for the Central District of
California has yet to rule on plaintiffs' appeal of the
dismissal of the consolidated securities class action filed
Aspeon, Inc., its Chief Executive Officer, and its former Chief
Financial Officer in the United States District Court for the
Central District of California.
In October and November 2000, eight purported class action
lawsuits were filed, alleging violations of the Securities
Exchange Act of 1934. After the defendants moved to dismiss
each of the actions, the lawsuits were consolidated under a
single action, entitled "In re Aspeon Securities Litigation,
Case No. SACV 00-995 AHS (ANx)," and the appointed lead
plaintiff voluntarily filed an amended and consolidated
complaint. The defendants moved to dismiss that complaint, and
on April 23, 2001, the Court entered an order dismissing the
complaint without prejudice. On May 21, 2001 the appointed lead
plaintiff filed a third complaint, styled as a "First Amended
Consolidated Complaint." On June 4, 2001, the defendants moved
to dismiss this complaint and on September 17, 2001, the court
dismissed the suit with prejudice and entered judgment in favor
of the Company and its officers.
On September 20, 2001, the lead plaintiff in the class action
suit appealed against the dismissal of the case. On January 21,
2003 the decision to dismiss the case was upheld but the lead
plaintiff was given the opportunity to remedy the deficiencies
in the complaint that had been filed. Accordingly on May 30,
2003 the plaintiff filed its "Second Amended Consolidated
Complaint" which again was subsequently dismissed by the Court.
On November 26, 2003 the lead plaintiff filed its "Third Amended
Consolidated Complaint," which was again dismissed with
prejudice in March 2004. The lead plaintiff has once again
appealed against the dismissal and the appeal is anticipated to
be heard before the end of 2005.
The suit is styled "Jay Spechler, et al v. Aspeon Inc, et al.,
case no. 8:00-cv-00995-AHS-AN," filed in the United States
District Court for the Central District of California, under
Judge Alicemarie H. Stotler. Representing the Company are
Donald A. Daucher, Jay C. Gandhi, Colleen Elizabeth Hushke,
Peter M. Stone, Paul Hastings Janofsky and Walker, 3579 Valley
Centre Dr, San Diego, CA 92130, Phone: 858-720-2500, E-mail:
dondaucher@paulhastings.com; and Eric J. Belfi, Murray Frank and
Sailer, 275 Madison Avenue, Suite 801, New York, NY 10016,
Phone: 212-682-1818. Representing the plaintiffs are Thomas C.
Bright, Solomon B. Cera, Steven Orrin Sidener, Gold Bennett Cera
& Sidener, 595 Market St, Ste 2300, San Francisco, CA 94105-
2835, Phone: 415-777-2230, Fax: 415-777-5189.
AUGUST TECHNOLOGY: Continues To Face MN Suit V. Rudolph Merger
--------------------------------------------------------------
August Technology Corporation continue to face a class action
filed in Minnesota Superior Court, opposing its proposed merger
with Nanometrics Inc. and Rudolph Technologies, Inc. The suits
also name each of the Company's board of directors as
defendants:
(1) Jeff O'Dell,
(2) James Bernards,
(3) Roger Gower,
(4) Michael Wright and
(5) Linda Hall Whitman
Two separate lawsuits that purported to be class action claims
were initially filed on February 4, 2005 and February 14,2005 on
behalf of the Company's shareholders. Both lawsuits were
brought in Minnesota State Court and claimed that the directors
had breached their fiduciary duties to the Company's
shareholders in connection with their actions in agreeing to the
proposed merger with Nanometrics Incorporated. The plaintiffs
in both actions sought various forms of injunctive relief
including an order enjoining the Company and its board of
directors from consummating the merger with Nanometrics.
The two proceedings were consolidated and heard as one case. On
April 19, 2005, the Court issued a 30-day stay of all
proceedings. On April 27, 2005, the plaintiffs scheduled a
hearing on a motion to amend the complaint. The hearing was
scheduled for June 9, 2005. On May 10, 2005 the Court issued an
order dismissing the complaint for asserting derivative claims
without complying with the rules governing derivative actions.
Thereafter the Court removed the hearing from the calendar.
On July 18, 2005, a purported shareholder class action lawsuit
asserting derivative claims was filed in Minnesota state court
against the Company and the individual members of the board
named above as well as Lynn J. Davis, who joined the board on
March 30, 2005 (the "Board"). The lawsuit claims the directors
have breached their fiduciary duties to the Company's
shareholders in connection with their actions in approving the
merger agreement with Nanometrics, Inc. and subsequently
terminating that merger agreement and entering into a new merger
agreement with Rudolph Technologies, Inc. The plaintiff seeks
various forms of injunctive relief including an order enjoining
the Company and the Board from consummating the proposed merger
with Rudolph.
The plaintiff in the lawsuit filed on July 18, 2005 is Robert
Etem, the owner of 4,200 shares of the Company's common stock.
Mr. Etem was also a plaintiff in the lawsuit described above
filed on February 14, 2005.
BOSTON COMMUNICATIONS: Faces Consolidated Securities Suit in MA
---------------------------------------------------------------
Boston Communications Group, Inc. faces a consolidated
securities class action filed in the United States District
Court for the District of Massachusetts.
Several complaints were initially filed on behalf of persons who
purchased its common stock between November 15, 2000 and May 20,
2005. The suits also names as defendants the Company's Chief
Executive Officer and its Chief Financial Officer. The
complaints allege that the defendants violated Sections 10(b)
and 20(a) of the Exchange Act as well as Rule 10b-5 promulgated
thereunder by allegedly failing to disclose adverse facts
regarding the Freedom Wireless, Inc. lawsuit, including that the
Company had willfully infringed the Freedom Wireless patents.
Plaintiffs filed an amended consolidated suit on October 12,
2005 to modify the commencement date to June 6, 2002. The
complaint alleges that the defendants violated Sections 10(b)
and 20(a) of the Exchange Act as well as Rule 10b-5 promulgated
thereunder by allegedly failing to disclose adverse facts
regarding the Freedom Wireless, Inc. lawsuit, including that the
Company had willfully infringed the Freedom Wireless patents.
Within ten days of the appointment of a lead counsel and a lead
plaintiff in this case, the parties will submit for the Court's
consideration a proposed schedule for this case, including
defendants' time to respond to the complaint by motion to
dismiss or otherwise.
The first identified complaint in the litigation is styled
"Rosenbaum Capital LLC, et al. v. Boston Communications Group,
Inc., et al., case no. 05-CV-11165," filed in the United States
District Court for the District of Massachusetts, under Judge
William G. Young. The plaintiff firms in this litigation are:
(1) Charles J. Piven, World Trade Center-Baltimore, 401
East Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com;
(2) Gilman & Pastor, Stonehill Corporate Center 999
Broadway Suite 500, Saugus, MA, 01906, Phone:
781.231.7850, Fax: 781.231.7840;
(3) Marc S. Henzel, 210 West Washington Square, Third
Floor, Philadelphia, PA, 19106, Phone: 215.625.9999,
Fax: 215.440.9475, E-mail: Mhenzel182@aol.com
(4) 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
CANADA: B.C. Litigation Seeks Repayment of PST on Legal Fees
--------------------------------------------------------------
The British Columbia provincial government in Canada may have to
refund hundreds of millions of dollars in illegally collected
sales tax on legal services since 1993, should a class action,
filed in the Supreme Court of B.C., be successful.
The suit was filed by the law firm of Poyner Baxter, LLP of
North Vancouver, which works predominantly in the field of class
action suits. The action follows a December 20 majority decision
of the British Columbia Court of Appeal, granting "a declaration
that to the extent that the Act purports to tax legal services
related to the determination of rights and obligations by courts
of law or independent administrative tribunals, it is
unconstitutional as offending the principal of access to
justice, one of the elements of the rule of law."
"This has been a shocking situation since the New Democratic
Party introduced this tax, the only professional fees in B.C.
subject to PST," said lawyer Jim Poyner. "Allegedly, the funds
were supposed to go to support Legal Aid, but they disappeared
into general revenue. In opposition, the Liberals repeatedly
demanded that the PST from legal fees go as intended to Legal
Aid, but this never happened. However, since forming government
in 2001, the Liberals have continued to collect these taxes, but
Legal Aid funding has been cut in half. To describe this
hypocrisy as shocking is an understatement."
Under B.C.'s "Class Proceedings Act," a suit is brought in the
name of one individual as "representative of a class." This
cites the case of one person who paid $8,050 in Provincial Sales
Tax on top of her solicitor's fees, but if certified by the
Supreme Court, the action will represent and potentially benefit
every individual and corporation in the province who has paid
PST on legal fees since it was introduced.
The complete text of both the Court of Appeal Judgment and the
Statement of Claim can be found at http://www.poynerbaxter.com.
For more details, contact Poyner Baxter, LLP, Suite 408 - 145
Chadwick Court, North Vancouver, B.C. V7M 3K1, Phone:
(604) 988-6321, Fax: (604) 988-3632, E-mail:
poyner.baxter@telus.net, Web site: http://www.poynerbaxter.com.
CINGULAR WIRELESS: Faces Suit in CA Over Costly Cell Phone Calls
----------------------------------------------------------------
Cingular Wireless, LLC, faces a lawsuit over widespread problem
cropping up whenever making cell phone calls near the Mexican
border, The San Diego Union Tribune reports.
The problem, which is believed to be so widespread among
Cingular customers, happens when a person makes a call near the
border his/her calls were being picked up by Mexican cellular
antennas, instead of Cingular's antennas on the U.S. side of the
border. In essence, the customer is being billed for making
international calls, even though he never set foot in Mexico.
The Utility Consumers' Action Network (UCAN), a consumer
advocacy group in San Diego, California filed the suit against
the wireless company. UCAN's attorney is seeking to get the
lawsuit, filed back in November 2004 in San Diego Superior
Court, certified as a class action case.
Cingular is opposing that effort though. The company said it is
working to fix the problem. Cingular spokesman Art Navarro told
The San Diego Union Tribune, "It's been an issue we've been
addressing for a while." He adds that the company established
teams of customer service representatives to investigate
complaints brought by customers who say their local calls were
inadvertently picked up by Mexican cellular networks.
In addition, Cingular asked two wireless carriers in Mexico,
Telcel and Telefonica, to redirect their antennas that are near
the border. Telefonica has done so already. Mr. Navarro told The
San Diego Union Tribune, "It's a very complex issue of
regulatory policy and wireless science. The issue is often
challenging to diagnose."
One of the plaintiffs in the UCAN lawsuit is Jose Castro of San
Ysidro, who according to court documents has incurred $2,500 in
charges for calls he made from his home, which is half a mile
from the Mexican border, to his family in Los Angeles. Alan
Mansfield, the attorney representing Mr. Castro and UCAN in the
lawsuit told The San Diego Union Tribune that the calls were
billed as international calls at $2.50 a minute.
Mr. Mansfield thinks the problem may have affected thousands of
Cingular customers, who live, work or visit areas near the
Mexican border. Some victims, according to him, may not even be
aware of it if they haven't read their Cingular bills closely.
He adds, "Mr. Castro's was a serious situation. Other people may
have gotten only $20 or $50 charges."
The number of people affected is not known, but the problem is
said to affect the swath of land three miles north of the
Mexican border. Mexican cellular antennas, some of which are
less than 150 feet south of the border, pick up the signal on
the U.S. side of the border and transmit the calls, incurring
international charges.
Mr. Mansfield told The San Diego Union Tribune that the problem
appears to be unique to Cingular customers. He noted that UCAN
has received no similar complaints from customers of other
wireless providers. While Mr. Mansfield said he has heard of
isolated cases of similar incidents happening near the Canadian
border, he pointed out that the area along the Mexican border is
the only place where the problem appears to be "systemic."
CONSTELLATION ENERGY: CA Court Dismisses Antitrust Fraud Lawsuit
----------------------------------------------------------------
The Superior Court of the State of California, County of San
Diego granted Constellation Energy Commodities Group, Inc.'s
motion to dismiss the proceedings against it and 29 other
companies, entitled "Wholesale Electricity Antitrust Cases I and
II, Case Nos. 4204 and 4205." Reliant Energy Services (Reliant)
and certain of its affiliates have joined the original
defendants as cross-defendants.
The proceeding is a putative class action brought by various
plaintiffs on behalf of California residents and alleges claims
under certain California antitrust and fair competition laws. In
general, the plaintiffs allege that Reliant and the other
original defendants engaged in certain anti-competitive actions
causing prices not reflective of market in the California
electricity markets. No action is required by the Company or
the other cross-defendants until the court addresses the pending
motions to dismiss filed by the original defendants.
CONSTELLATION POWER: WA Antitrust Fraud Suit Dismissal Appealed
---------------------------------------------------------------
Plaintiffs appealed the dismissal of the complaint filed against
Constellation Power Source, Inc., (now known as Constellation
Energy Commodities Group, Inc.), styled "City of Tacoma v. AEP,
et al."
The City of Tacoma filed the suit on June 7, 2004, in the U.S.
District Court, Western District of Washington, against over 60
companies, including the Company. The complaint alleges that the
defendants engaged in manipulation of electricity markets
resulting in prices for power in the western power markets that
were substantially above what market prices would have been in
the absence of the alleged unlawful contracts, combinations and
conspiracy in violation of Section 1 of the Sherman Act. The
complaint further alleges that the total amount of damages is
unknown, but is estimated to exceed $175 million.
On February 11, 2005, the Court granted the defendants' motion
to dismiss the action based on the Court's lack of jurisdiction
over the claims in question. The plaintiff has appealed the
dismissal of the action to the Ninth Circuit Court of Appeals.
The suit is styled `City of Tacoma v. American Electric Power
Service Corporation et al., case no. 3:04-cv-05325-FDB," filed
in the United States District Court for the Western District of
Washington, under Judge Franklin D. Burgess. Representing the
splaintiffs are Michael E. Kipling and Lawrence Locker, SUMMIT
LAW GROUP, 315 Fifth Avenue Ste 1000, Seattle, WA 98104-2682,
Phone: 206-545-0345, Fax: 206-545-0350, E-mail:
kipling@kiplinglawgroup.com or larryl@summitlaw.com.
Representing the Company is Peter D. Byrnes of BYRNES & KELLER
1000 Second Avenue, 38th Floor, Seattle WA 98104, Phone:
206-622-2000, Fax: 206- 622-2522, E-mail:
pbyrnes@byrneskeller.com.
CENTRAL FREIGHT: TX Court Mulls Securities Fraud Suit Dismissal
---------------------------------------------------------------
The United States District Court for the Western District of
Texas has yet to rule on Central Freight Lines, Inc.'s motion to
dismiss the consolidated securities class action filed against
it and certain of its officers and directors.
Several suits were initially filed, generally alleging that
false and misleading statements were made in the initial public
offering registration statement and prospectus, during the
period surrounding the initial public offering and up to the
press release dated June 16, 2004. The class actions were
subsequently consolidated, under the title In re Central Freight
Lines Securities Litigation. The Oklahoma Firefighters Pension
and Retirement System has been named lead plaintiff in the
consolidated action, and a Consolidated Amended Class Action
Complaint was filed on May 9, 2005.
The consolidated suit generally alleges that false and
misleading statements were made in its initial public offering
registration statement and prospectus, during the period
surrounding the initial public offering and up to March 17,
2005. On July 8, 2005, the Company responded to the suit by
filing a motion to dismiss. On August 23, 2005, the lead
plaintiff filed its opposition to this motion to dismiss, and on
September 12, 2005, the Company filed a response in which it
again requested dismissal of the Consolidated Amended Class
Action Complaint.
The suit is styled "In re Central Freight Lines Securities
Litigation, case no. 04-CV-177," filed in the United States
District Court for the Western District of Texas (Waco), under
Judge Walter S. Smith. Representing the plaintiffs are Michael
Klein of Smith Robertson Elliott Glen Klein & Bell, LLP, 221
West 6th Street, Suite 1100, Austin, TX 78701, Phone:
(512) 225-5808; and Michelle N. Peterson and Michael K. Yarnoff
of Schiffrin & Barroway, LLP, 280 King of Prussia Road, Radnor,
PA 19087, Phone: (610) 667-7706. Representing the Company are
John L. Malesovas, Malesovas & Martin, L.L.P., P.O. Box 1709,
Waco, TX 76703-1709, Phone: (254)753-1777; and Nicole M. Healy,
Kent W. Easter, Randolph Gaw and Lloyd Winawer of Sonsini,
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA 84306,
Phone: (415) 493-9300.
CRAY INC.: Plaintiffs Launch Consolidated Securities Suit in WA
---------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Cray, Inc. and certain of its current and former officers in the
United States District Court for the Western District of
Washington, on behalf of purchasers of its securities during
periods that begin as early as October 23, 2002, and end as
recently as May 12, 2005.
Several suits were initially filed, alleging federal securities
law violations in connection with the issuance of various
reports, press releases and in some cases, statements in
investor telephone conference calls. Each complaint requested
certification of the class described therein and seeks
unspecified damages, interest, attorneys' fees, costs and other
relief.
On October 19, 2005, the Court ordered the consolidation of
these cases into a single action and ordered that an amended
complaint be filed by November 15, 2005. The Company disputes
the allegations contained in the current complaints and intends
to contest them aggressively.
The consolidated suit is styled `Limantour v. Cray Incorporated
et al., case no. 2:05-cv-00943-TSZ,' filed in the United States
District Court for the Western District of Washington, under
Judge Thomas S. Zilly. Representing the Company is Lois Omenn
Rosenbaum, STOEL RIVES, 900 SW Fifth Avenue, Ste 2600, Portland
OR 97204, Phone: 503-294-9293, Fax: 1-503-294-9113, Email:
lorosenbaum@stoel.com. Representing the plaintiffs are:
(1) Steve W. Berman, HAGENS BERMAN SOBOL SHAPIRO LLP, 1301
5TH AVE, STE 2900, SEATTLE, WA 98101, Phone: 206-623-
7292, Email: steve@hbsslaw.com
(2) Elizabeth Ann Leland, Juli Farris Desper, Lynn Lincoln
Sarko, KELLER ROHRBACK, 1201 3RD AVE, STE 3200,
SEATTLE, WA 98101-3052, Phone: 206-623-1900, Fax: FAX
623-3384, E-mail: bleland@kellerrohrback.com,
jdesper@KellerRohrback.com, lsarko@kellerrohrback.com
(3) Christopher Ian Brain, TOUSLEY BRAIN STEPHENS, 1700
SEVENTH AVE, STE 2200, SEATTLE, WA 98101-1332, Phone:
206-682-5600, Email: cbrain@tousley.com
(4) Tamara J Driscoll, LERACH COUGHLIN STOIA GELLER RUDMAN
& ROBBINS (WA), 1700 SEVENTH AVENUE, STE 2260, SEATTLE,
WA 98101, Phone: 206-749-5544, Fax: 206-749-9978,
Email: tdriscoll@lerachlaw.com
DRUGSTORE.COM: Presents Revised Lawsuit Settlement to NY Court
--------------------------------------------------------------
drugstore.com, Inc. and the parties in the securities class
action filed against it, its underwriters and certain of its
present and former officers and directors presented a revised
settlement for the suit to the United States District Court for
the Southern District of New York.
On and after July 6, 2001, eight stockholder class action
lawsuits were filed in connection with our July 27, 1999 initial
public offering and March 15, 2000 secondary offering (together,
the Offerings). The complaints against the Company have been
consolidated into a single action and a Consolidated Amended
Complaint, which is now the operative complaint, was filed on
April 19, 2002. The suit purports to be a class action filed on
behalf of purchasers of the Company's common stock during the
period July 28, 1999 to December 6, 2000. In general, the
complaint alleges that the prospectuses through which the
Company conducted the Offerings were materially false and
misleading for failure to disclose, among other things, that:
(1) the underwriters of the Offerings allegedly had
solicited and received excessive and undisclosed
commissions from certain investors in exchange for
which the underwriters allocated to those investors
material portions of the restricted number of shares
issued in connection with the Offerings and
(2) the underwriters allegedly entered into agreements with
customers whereby the underwriters agreed to allocate
drugstore.com shares to customers in the Offerings in
exchange for which customers agreed to purchase
additional drugstore.com shares in the after-market at
predetermined prices.
The complaint asserts violations of various sections of the
Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended. The action seeks damages in an
unspecified amount and other relief. The action is being
coordinated with approximately 300 other nearly identical
actions filed against other companies or their former officers
and directors.
On July 15, 2002, the Company moved to dismiss all claims
against it and the Individual Defendants. On October 9, 2002,
the Court dismissed the Individual Defendants from the case
without prejudice based on stipulations of dismissal filed by
the plaintiffs and the Individual Defendants. On February 19,
2003, the Court denied the motion to dismiss the complaint
against the Company.
The Company has approved a settlement agreement and related
agreements, which set forth the terms of a settlement between
the Company, the plaintiff class and the vast majority of the
other issuer defendants or, in the case of bankrupt issuers,
their directors and officers. Among other provisions, the
settlement agreement provides for a release of the Company and
the Individual Defendants for the conduct alleged in the action
to be wrongful. The Company would agree to undertake certain
responsibilities, including agreeing to assign away, not assert,
or release certain potential claims it may have against its
underwriters. The settlement agreement also provides a
guaranteed recovery of $1 billion to the plaintiffs for the
cases relating to all of the approximately 300 issuers. To the
extent that the underwriter defendants settle all of the cases
for at least $1 billion, no payment will be required under the
issuers' settlement agreement. To the extent that the
underwriter defendants settle for less than $1 billion, the
issuers are required to make up the difference.
On February 15, 2005, the court granted preliminary approval of
the settlement agreement, subject to certain modifications
consistent with its opinion. The court ruled that the issuer
defendants and the plaintiffs must submit a revised settlement
agreement that provides for a mutual bar of all contribution
claims by the settling and non-settling parties and does not bar
the parties from pursuing other claims. These modifications
have been made. There
The suit is styled "In Re drugstore.com, 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:
(i) 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
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) 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
(iv) 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
(v) 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
(vi) 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
DRUGSTORE.COM: WA Court Dismisses Securities Fraud Litigation
-------------------------------------------------------------
The United States District Court for the Western District of
Washington dismissed the consolidated securities class action
filed against drugstore.com, Inc. and certain of its present and
former officers.
On and after June 25, 2004, several putative class actions were
filed for alleged violations of the federal securities laws.
The suits purport to have been filed on behalf of purchasers of
the Company's common stock between January 14, 2004 and June 10,
2004. The complaints generally allege that the defendants made
false and misleading statements about our prospects for fiscal
year 2004 and failed to disclose, among other things a negative
impact on the Company's gross margins from the integration of
our acquisition of Vision Direct and from our free 3-day
shipping promotion, and a negative impact on its sales growth
arising from cancellations of certain expired prescriptions.
On October 8, 2004, the Court issued an order consolidating the
individual actions. On November 1, 2004, the court appointed
lead plaintiffs and lead plaintiffs' counsel. On January 11,
2005, the Consolidated Amended Complaint was filed by the lead
plaintiffs. On March 15, 2005, the defendants moved to dismiss
the complaint, and October 19, 2005, the Court granted the
motion and dismissed all of the plaintiffs' claims. Applying the
heightened pleading standards of the Private Securities
Litigation Reform Act of 1995, or PSLRA, the Court found that
all of the allegedly false statements were "forward-looking
statements" and were accompanied by sufficient cautionary
language to fall under the safe harbor for forward-looking
statements provided by the PSLRA. Plaintiffs were granted 30
days to amend the complaint.
The suits are consolidated under "Frederick J. Elliot v.
Drugstore.com, Inc., et al.," Case No. CO$-1474RSM, pending
under Judge Ricardo Martinez.
FAIRPOINT COMMUNICATIONS: Plaintiffs Appeal SC Remand Ruling
------------------------------------------------------------
Plaintiffs appealed the General Court of Justice, Superior Court
Division of the State of North Carolina's ruling refusing to
remand a class action filed against Fairpoint Communications,
Inc. to state court.
Robert Lowinger filed the suit on June 6, 2005, on behalf of
himself and all other similarly situated persons against the
Company, the Company's Chairman and Chief Executive Officer,
certain of the Company's current and former directors and
certain of the Company's stockholders. The complaint alleges
violations of Sections 11 and 12(a)(2) and liability under
Section 15 of the Securities Act, and alleges that the Company's
registration statement on Form S-1 (which was declared effective
by the SEC on February 3, 2005) and the related prospectus dated
February 3, 2005, each relating to the offering, contained
certain material misstatements and omitted certain material
information necessary to be included relating to the Company's
broadband products and access line trends. The plaintiff seeks
rescission rights and unspecified damages on behalf of a
purported class of purchasers of the common stock "issued
pursuant and/or traceable to the Company's IPO during the period
from February 3, 2005 through March 21, 2005."
The Company removed the action to Federal Court. The plaintiff
filed a motion to remand the action to the North Carolina State
Court, which was denied by the Federal Magistrate. The plaintiff
has objected to and appealed the Magistrate's decision to the
District Court Judge. The Company will contest the appeal.
H&R BLOCK: County Judge OKs Settlement For "Rapid Refunds" Suit
---------------------------------------------------------------
A Kanawha Circuit judge gave preliminary approval to a $62.5
million settlement between H&R Block Inc. and an estimated 8
million consumers in more than two-dozen states that exchanged
tax refunds for upfront payments, The Associated Press reports.
The deal resolves four class action lawsuits as well as
potential claims alleging the nation's largest tax preparer
violated state consumer protection laws. The suit stems from the
company's offer of quick payments, formerly known as "Rapid
Refunds," to customers expecting tax refunds. In practice, these
refunds, which were also known as refund anticipation loans
(RAL) were actually loans repaid by those refunds that included
interest rates of between 29 percent and 750 percent.
While admitting no wrongdoing, H&R Block agreed to offer
payments to customers who took out these refund anticipation
loans. Depending on their state, consumers are eligible for
payments for loans taken out as far back as mid-June 1989.
Kansas City-based, H&R Block planned to resolve the allegations
through a 2003 lawsuit filed in West Virginia, one of the four
class actions. Last week, Judge Duke Bloom ordered lawyers to
mail information about the settlement's terms to affected
consumers by March 15, 2006. The judge scheduled a June 8, 2006
hearing to field any objections and give the deal final
approval.
The West Virginia class action is styled, "Deandra D. Cummins,
et al. V. H&R Block, Inc., et al., Case No. 03-C-134," and was
set for an October 17, 2005 trial in the Circuit Court of
Kanawha County. It relates to the Company's refund anticipation
loan (RAL) programs, an earlier Class Action Reporter story
(March 21, 2005) reports. Like the other suits, it alleges a
variety of legal theories, including allegations that, among
other things:
(1) disclosures in the RAL applications were inadequate,
misleading and untimely;
(2) the RAL interest rates were usurious and
unconscionable;
(3) the company did not disclose that it would receive part
of the finance charges paid by the customer for such
loans;
(4) breach of state laws on credit service organizations;
(5) breach of contract, unjust enrichment, unfair and
deceptive acts or practices;
(6) violations of the federal Racketeer Influenced and
Corrupt Organizations (RICO) Act;
(7) violations of the federal Fair Debt Collection
Practices Act; and
(8) that the company owes and breached a fiduciary duty to
its customers in connection with the RAL program.
On December 30, 2004, the trial court certified a class
consisting of all West Virginia residents who obtained RALs from
January 1, 1994 to present. On February 23, 2005, the U.S.
Supreme Court denied the Company's request to review the West
Virginia Supreme Court's decision not to review the trial
court's denial of the Company's motion to compel arbitration.
"Allowing us to get this behind us and focus on the future is a
great benefit to us," H&R Block spokeswoman Linda McDougall told
The Associated Press on Wednesday.
Despite the settlement, H&R Block continues to offer refund
anticipation loans, and the settlement requires the company to
explain tax filing options, costs and other details about the
loans. In a press statement, H&R Block said, "The goal is to
ensure that consumers have all the information they need to make
the best choices that meet their financial needs and to ensure
that the disclosures set the industry standard."
HARVEST FOODS: Recalls Ashman's Ackees Due to Health Concern
------------------------------------------------------------
U.S. Food and Drug Administration is announcing the recall of
some shipments of ackee, a tropical fruit imported from Jamaica,
because the fruit has levels of a naturally occurring toxin
called hypoglycin that are of health concern. The recall
involves 31 cases of Ashman's Ackees in Brine, distributed by
Harvest Foods, Hartford, CT. The products were sold in 19-oz.
cans and were shipped in early November to one wholesaler in New
York, and to retail stores and restaurants in New York,
Massachusetts, and Connecticut. No illnesses have been reported
to FDA concerning the Harvest Foods product.
The ingestion of under-ripe ackee has been linked to sudden
vomiting. Infrequently, high levels of hypoglycin can lead to
convulsions, coma, and death. Hypoglycins in the ackee are found
in toxic levels when the fruit is picked too early and is under-
ripe. Because of the potentially serious health issues
associated with consuming high levels of hypoglycin, FDA is
advising consumers not to eat Ashman's Ackees in Brine.
Consumers can return this product to the point of purchase.
Consumers who have eaten this product should contact their
doctors.
HILTON CORPORATION: Reaches Settlement For HI Mold Injury Suit
--------------------------------------------------------------
Plaintiffs' attorneys say that Hawaii Circuit Court Judge
Sabrina McKenna gave preliminary approval to a $1.8 million
settlement in a class action lawsuit between Hilton Corporation
and guests who stayed in a mold-infested Waikiki hotel tower,
The Associated Press reports.
Mold overtook the 453-room Kalia Tower in the Hilton Hawaiian
Village complex and forced its closure in 2002, about a year
after the $95 million building opened. Experts said that the
mold was a variety that can trigger asthma and also irritate the
eyes, nose and throat. However, no serious health problems were
reported. The mold is called erotium, a common form of mildew
found in Hawaii, which the hotel believes, was caused by high
humidity in the rooms.
The guests, who are suing the hotel, pointed out that the issue
here is one of disclosure. Their attorneys argue that the Hilton
should have told guests it had found mold in some of the rooms
at the Kalia Tower in June and July of 2002.
A statement from the law firm of Davis, Levin, Livingston and
Grande said that Hilton denied liability but agreed to the
settlement. Calls seeking further comment from Hilton
representatives at corporate headquarters in Beverly Hills,
California, regarding the deal were not returned.
The suit was filed by Honolulu attorney Thomas Grande in Circuit
Court on behalf of Florida resident Jeffrey Moffett, who is
seeking a refund on the charges he paid for a room in the Kalia
Tower, before the Tower was closed because of mold. Mr. Grande
sought class action status for all guests who stayed at the
Kalia Tower before it was closed, an earlier Class Action
Reporter story (May 26, 2003) reports.
According to court documents, Mr. Moffett stayed at the Kalia
Tower in July 2002, for 18 days, with his wife and son, and
asked to be moved because of the damp bed sheets experienced day
after day, during their stay in the Tower. The Moffetts asked
four times to be moved after noticing the damp bed sheets, and
were given four different reasons why they could not be moved.
On July 23, the Hilton moved the Moffetts, according to the
suit, and the next day the hotel company completely disclosed
the mold problem in the Kalia Tower and shut down all Kalia
rooms, an earlier Class Action Reporter story (May 26, 2003)
reports.
The lawsuit contends that Hilton knew of the excessive and
extensive mold growth in the Kalia rooms shortly after the Tower
opened in May 2001. The suit charges the Hilton with deception
and nondisclosure, however it does not make any health-related
claims and instead seeks room rent refunds, an earlier Class
Action Reporter story (May 26, 2003) reports.
The cost of cleaning up was more than five times the original
$10 million estimate. The tower reopened in September 2003.
Hilton sued 18 companies and individuals, saying design and
construction defects produced excessive humidity that encouraged
the mold to grow.
About 2,900 people who stayed at the building from June 14 to
July 23, 2002, will be eligible for $50 in cash or $150 worth of
travel coupons for each night they spent there, according to
Price, Okamoto, Himeno and Lum, the other law firm involved in
the lawsuit.
INSWEB CORPORATION: Final Fairness Hearing Set April 2006 in NY
---------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated
securities class action filed against InsWeb Corporation,
certain current and former officers and directors, and three
investment banking firms that served as underwriters for its
initial public offering in July 1999 is set for April 24,2006 in
the United States District Court for the Southern District of
New York.
A securities class action lawsuit was filed on December 5, 2001,
purportedly on behalf of all persons who purchased the Company's
common stock from July 22, 1999 through December 6, 2000. The
complaint, as subsequently amended, alleges violations of
Sections 11 and 15 of the Securities Act of 1933 and Sections 10
and 20 of the Securities Exchange Act of 1934, on the grounds
that the prospectuses incorporated in the registration
statements for the offering failed to disclose, among other
things, that the underwriters had solicited and received
excessive and undisclosed commissions from certain investors in
exchange for which the underwriters allocated to those investors
material portions of the shares of Company stock sold in the
offerings and the underwriters had entered into agreements with
customers whereby the underwriters agreed to allocated shares of
the stock sold in the offering to those customers in exchange
for which the customers agreed to purchase additional shares of
InsWeb stock in the aftermarket at pre-determined prices. No
specific damages are claimed.
Similar allegations have been made in lawsuits relating to more
than 300 other initial public offerings conducted in 1999 and
2000, all of which have been consolidated for pretrial purposes.
In October 2002, all claims against the individual defendants
were dismissed without prejudice. In February 2003, the Court
dismissed the claims in the InsWeb action alleging violations of
the Securities Exchange Act of 1934 but allowed the plaintiffs
to proceed with the remaining claims. In June 2003, the
plaintiffs in all of the cases presented a settlement proposal
to all of the issuer defendants.
Under the proposed settlement, the plaintiffs will dismiss and
release all claims against participating defendants in exchange
for a contingent payment guaranty by the insurance companies
collectively responsible for insuring the issuers in all the
related cases, and the assignment or surrender to the plaintiffs
of certain claims the issuer defendants may have against the
underwriters. The Company and most of the other issuer
defendants have accepted the settlement proposal. The
settlement was given preliminary approval by the Court in
February 2005, pending a modification to the settlement
documents. On September 1, 2005, the Court issued an order
providing preliminary approval of the proposed settlement and
set a hearing for April 24, 2006 to consider final approval of
the settlement. If the Court does not approve the settlement,
InsWeb would defend the lawsuit.
The suit is styled "In Re InsWeb Corporation 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
KENTUCKY: Lawyer Optimistic Insurance Firms Will Join Settlement
----------------------------------------------------------------
The attorney for members of a class action lawsuit filed against
the Diocese of Covington for priest sexual abuse is optimistic
that the church's insurance companies will sign on to a
settlement in which the Diocese agreed to surrender $40 million
in cash, investments and property, The ChallengerNKY.com
reports.
Attorney Bob Steinberg of Cincinnati told The ChallengerNKY.com
that lawyers in the case would report on their progress this
January 5, 2006 to federal Judge William Bertelsman in U.S.
District Court in Covington.
Lawyers for the class of plaintiffs, which includes about 375
people, and the church, revealed last summer that they'd reached
a $120 million settlement and expected the church's insurance
companies, Catholic Mutual and Firemen's Fund, to contribute $80
million of it. When they balked at that amount, the Diocese sued
them in federal court. However, the insurance companies may
have had a change of heart since parties in the case are talking
about reducing the size of the settlement. Mr. Steinberg told
The ChallengerNKY.com, "That ($120-million figure) was arrived
at based on an estimate of over 1,000 class members. The fact
that there is going to be less than 400 class members means that
it may not be necessary to have a $120-million settlement. We're
making really good progress in settlement negotiations." He
declined though to estimate a new settlement figure.
In July, a state judge granted approval a proposed settlement
between victims of sexual abuse and the Diocese. The settlement
would compensate victims, who were fondled, raped or sodomized
by priests and other church employees. The amounts paid out to
plaintiffs will depend on the size of the settlement fund, the
number and nature of claims and the severity of each victim's
abuse. The Covington Diocese spans 14 counties and has 89,000
parishioners, an earlier Class Action Reporter story (November
8, 2005) reports.
The settlement calls for a yet-to-be-named administrator to
evaluate the claims and pay the money. The administrator will be
asked to divide claims based on the severity and type of abuse.
Settlements will range from $5,000 to $450,000.
Cincinnati-based attorney Stan Chesley filed the class action
lawsuit in Boone County Circuit Court, claiming that 21 priests
and some other workers abused more than 150 victims in the
Diocese of Covington for decades while church officials did
nothing to stop the misconduct. According to the court filings,
from about 1956, information on the sexual abuse of minors by
diocesan priests has been concealed from the public, including
parents of children in schools and parishes where the alleged
perpetrators were assigned, as well as from family members of
employees of the diocese. Specifically, the suit accuses the
diocese, which is just across the Ohio River from Cincinnati, of
a 50-year cover-up of sexual abuse by priests and others, an
earlier Class Action Reporter story (February 18, 2003) reports.
Previously, attorneys revealed that there are more than 370
potential plaintiffs in the class action sex abuse case, but
that number may drop before a settlement is finalized. The
attorneys said that among the 373 people who mailed in
confidential claim forms saying a priest or other employees of
the Covington Diocese abused them, some are from people who
previously settled, while others are from people who were
allegedly abused at churches in other dioceses. The figure was
released during a recent status conference in the case in Boone
County Circuit Court in Burlington, Kentucky, an earlier Class
Action Reporter story (November 23, 2005) reports. People from
that group will be able to submit claims.
On January 9, 2006, Special Judge John Potter of Louisville is
set to hold a fairness hearing, during which anyone involved in
the lawsuit and dissatisfied with the proposed settlement can
argue against its approval. So far only three people have
objected to a proposed settlement. However, specifics about the
objections aren't known, since the papers were filed recently
and are currently under seal with the Boone County Circuit Court
clerk.
Mr. Steinberg told The ChallengerNKY.com that although the
Diocese might have to surrender the Marydale Retreat Center in
Erlanger to settle the suit, the plaintiffs are not asking the
Diocese to sell any schools or churches for the money. He
pointed out that experts hired by attorneys for members of the
class action suit say the buildings have little market value.
Besides, according to Mr. Steinberg, "The lawsuit is not an
attack against the church, and the schools and churches are
needed by the parishioners to practice their religion. We don't
want to interfere with that."
If the Diocese and insurance companies back off their fight in
federal court, attorneys can turn all their attention to Boone
Circuit Court, where the class action lawsuit is pending.
MARSH & MCLENNAN: Working On NYAG Probe, Civil Suit Settlement
--------------------------------------------------------------
Marsh & McLennan Companies, Inc. continues to work on the
settlement of the investigation and civil complaint filed by the
Office of the New York State Attorney General (NYAG) Eliot
Spitzer over broker compensation arrangements, generally and
compensation under placement or market service agreements,
specifically.
In April 2004, the NYAG commenced an investigation, and issued a
subpoena to the Company on April 7, 2004. The NYAG followed
with additional subpoenas in the summer and fall of 2004. On
October 14, 2004, NYAG filed a civil complaint in New York State
court against the Company and Marsh Inc. (collectively "Marsh")
asserting claims under New York law for fraudulent business
practices, antitrust violations, securities fraud, unjust
enrichment, and common law fraud.
The complaint alleged that market service agreements between
Marsh and various insurance companies (the "Agreements"),
created an improper incentive for Marsh to steer business to
such insurance companies and to shield them from competition.
The complaint further alleged that these Agreements were not
adequately disclosed to Marsh's clients or to Marsh's investors.
In addition, the complaint alleged that Marsh engaged in bid-
rigging and solicited fraudulent bids to create the appearance
of competitive bidding. The complaint sought relief that
included an injunction prohibiting Marsh from engaging in the
alleged wrongful conduct, disgorgement of all profits related to
such conduct, restitution and unspecified damages, attorneys'
fees, and punitive damages.
On October 21, 2004, the New York State Insurance Department
(the "NYSID") issued a citation, amended on October 24, 2004
(the "Amended Citation"), that ordered the Company and a number
of its subsidiaries and affiliates that hold New York insurance
licenses to appear at a hearing and show cause why regulatory
action should not be taken against them. The amended citation
charged the respondents with the use of fraudulent, coercive and
dishonest practices; violations of Section 340 of the New York
General Business Law relating to contracts or agreements for
monopoly or in restraint of trade; and violations of the New
York Insurance Law that resulted from unfair methods of
competition and unfair or deceptive acts or practices. The
Amended Citation contemplated a number of potential actions the
NYSID could take, including the revocation of licenses held by
the respondents.
On October 25, 2004, NYAG announced that it would not bring
criminal charges against Marsh. On January 30, 2005, Marsh
entered into an agreement (the "Settlement Agreement") with NYAG
and the NYSID to settle the NYAG Lawsuit and the Amended
Citation.
Pursuant to the Settlement Agreement, Marsh will establish a
fund of $850 million (the "Fund"), payable over four years, for
Marsh policyholder clients. As a general matter, U.S.
policyholder clients who retained Marsh to place insurance
between 2001 and 2004 that resulted in Marsh receiving market
service revenue are eligible to receive a pro rata distribution
from the Fund, provided that they notified Marsh of their
decision to participate in the Fund by September 20, 2005.
No showing of fault, harm or wrongdoing is required in order to
receive a distribution. No portion of the Fund represents a fine
or penalty against Marsh and no portion of the Fund will revert
to Marsh. Clients who voluntarily elect to participate in the
Fund will tender a release relating to the matters alleged in
the NYAG Lawsuit or the Amended Citation, except for claims
which are based upon, arise out of or relate to the purchase or
sale of Marsh securities. The Settlement Agreement further
provides that Marsh will not seek or accept indemnification
pursuant to any insurance policy for amounts payable pursuant to
the Settlement Agreement.
Marsh also agreed to undertake the following business reforms
within 60 days of the date of the Settlement Agreement:
(1) Marsh will accept compensation for its services in
placing, renewing, consulting on or servicing any
insurance policy only by a specific fee paid by the
client; or by a specific percentage commission on
premium to be paid by the insurer; or a combination of
both. The amount of such compensation must be fully
disclosed to, and consented to in writing, by the
client prior to the binding of any policy;
(2) Marsh must give clients prior notification before
retaining interest earned on premiums collected on
behalf of insurers;
(3) In placing, renewing, consulting on or servicing any
insurance policy, Marsh will not accept from or request
of any insurer any form of contingent compensation;
(4) In placing, renewing, consulting on or servicing any
insurance policy, Marsh will not knowingly use
wholesalers for the placement, renewal, consultation on
or servicing of insurance without the agreement of its
client;
(5) Prior to the binding of an insurance policy, Marsh will
disclose to clients all quotes and indications sought
or received from insurers, including the compensation
to be received by Marsh in connection with each quote.
Marsh also will disclose to clients at year-end Marsh's
compensation in connection with the client's policy;
and
(6) Marsh will implement company-wide written standards of
conduct relating to compensation and will train
relevant employees in a number of subject matters,
including business ethics, professional obligations,
conflicts of interest, anti-trust and trade practices
compliance, and record keeping.
The Company's Board of Directors has established a committee of
the Board to monitor compliance with the standards of conduct
regarding compensation from insurers and will make quarterly
reports to the Board of the results of its monitoring activity
for a period of five years. The Settlement Agreement further
provides that Marsh reserves the right to request that NYAG and
the NYSID modify the Settlement Agreement if compliance with any
portion thereof proves impracticable. On April 28, 2005, the
parties entered into Amendment No. 1 to the Settlement
Agreement, which modifies the scope of the application of the
business reforms provisions with respect to MMC operations
outside the United States. This amendment was included as an
exhibit to MMC's Quarterly Report on Form 10-Q dated March 31,
2005. In addition, in connection with MMC's October 2005 sale
of Crump Group, Inc., its U.S.-based wholesale broking business,
the parties entered into Amendment No. 2 to the Settlement
Agreement, dated September 27, 2005, for the purpose of
clarifying that the Settlement Agreement shall not apply to
Crump Group, Inc. following such sale.
Though Mercer Inc. ("Mercer") was not a defendant in the NYAG
Lawsuit, U.S. policyholder clients that retained Mercer to
place, renew, consult on or service insurance between 2001 and
2004 that related to Mercer receiving contingent commissions or
overrides are eligible to participate in the Fund.
On January 6, 2005, NYAG filed a felony complaint against former
Marsh employee Robert Stearns as to which Mr. Stearns has
entered a guilty plea. On February 15, 2005 and February 24,
2005, former Marsh employees, Joshua Bewlay and Kathryn Winter,
respectively, pled guilty to certain claims.
The Settlement Agreement does not resolve any investigation,
proceeding or action commenced by NYAG or NYSID against any
former or current employees of Marsh. As part of the Settlement
Agreement, Marsh apologized for the improper conduct of certain
employees. Marsh also agreed to continue to cooperate with NYAG
and NYSID in connection with their ongoing investigations of the
insurance industry, and in any related proceedings or actions.
NYAG has publicly stated that additional charges and/or guilty
pleas involving Marsh personnel and others are highly likely.
Investigations by the offices of attorneys general in 18
jurisdictions, and the departments of insurance or other state
agencies in 29 other jurisdictions remain pending. The
Company's Board of Directors has established a committee of the
Board to monitor compliance with the standards of conduct
regarding compensation from insurers. The committee will make
quarterly reports to the Board of the results of its monitoring
activity for a period of five years.
The Settlement Agreement further provides that the Company
reserves the right to request that NYAG and the NYSID modify the
Settlement Agreement if compliance with any portion thereof
proves impracticable. On April 28, 2005, the parties entered
into Amendment No. 1 to the Settlement Agreement, which modifies
the scope of the application of the business reforms provisions
with respect to Company operations outside the United States. On
May 20, 2005, the Company distributed notices to eligible
policyholders entitled to receive a distribution of at least $10
from the settlement fund.
Though Mercer Inc. (Mercer) was not a defendant in the NYAG
Lawsuit, U.S. policyholder clients that retained Mercer to
place, renew, consult on or service insurance between 2001 and
2004 that related to Mercer receiving contingent commissions or
overrides are eligible to participate in the Fund.
On May 20, 2005, Marsh distributed notices to eligible
policyholders entitled to receive a distribution of at least $10
from the Fund, pursuant to which eligible policyholders had
until September 20, 2005 to elect whether to participate in the
Fund. Approximately 70,000 eligible policyholders across the
United States have elected to receive a distribution, and will
receive approximately $750 million of the $850 million made
available under the Fund. As described above, each policyholder
electing to participate in the Fund, as a condition to such
participation, tendered a release relating to the matters
alleged in the NYAG Lawsuit and the Amended Citation, except for
claims which are based upon, arise out of or relate to the
purchase or sale of MMC securities.
The Settlement Agreement does not resolve any investigation,
proceeding or action commenced by NYAG or NYSID against any
former or current employees of Marsh. As part of the Settlement
Agreement, Marsh apologized for the improper conduct of certain
employees. Marsh also agreed to continue to cooperate with NYAG
and NYSID in connection with their ongoing investigations of the
insurance industry, and in any related proceedings or actions.
Since the filing of the NYAG lawsuit, ten former Marsh employees
have pleaded guilty to criminal charges relating to the matters
under investigation. On September 15, 2005, eight former Marsh
employees (including one individual who has since pleaded
guilty) were indicted on various counts relating to these same
matters. NYAG has indicated that its investigation of the
insurance industry is continuing.
Following the filing of the NYAG Lawsuit, the Company and
certain of its subsidiaries received notices of investigations
and inquiries, together with requests for documents and
information, from attorneys general, departments of insurance
and other governmental entities in a number of jurisdictions
(other than New York) that relate to the allegations in the NYAG
Lawsuit. As of August 3, 2005, offices of attorneys general in
21 jurisdictions have issued one or more requests for
information or subpoenas calling for the production of documents
or for witnesses to provide testimony. Subpoenas, letters of
inquiry and other information requests have been received from
departments of insurance or other state agencies in 31
jurisdictions. The Company and its subsidiaries are cooperating
with these requests from regulators. It is possible that the
Company or its subsidiaries could face administrative
proceedings or other regulatory actions, fines or penalties,
including, without limitation, actions to revoke or suspend
their insurance broking licenses.
In Australia, the Australian Securities and Investments
Commission (ASIC) requested information and documents from
insurers and brokers, including the Company, as part of an
examination of brokers' remuneration practices. ASIC released
its report on insurance broker remuneration arrangements on June
30, 2005. The report concluded that ASIC did not find evidence
of systemic misconduct, but it did identify deficiencies in
certain Australian brokers' management of conflicts of interest
and disclosure of remuneration. The report did not identify any
brokers by name, but indicated ASIC will be in contact with
individual entities to seek to remedy any potential breaches
identified. Subject to satisfactory resolution of such
breaches, ASIC said it is unlikely any enforcement action would
be required. The Company has not been contacted further by ASIC
and has had no indication from the regulator of deficiencies in
its practices and procedures in this area.
MARSH & MCLENNAN: Continues To Face Broker Fee Agreements Suits
---------------------------------------------------------------
Marsh & McLennan Companies, Inc., one or more of its
subsidiaries, and its current and former directors and officers,
continue to face numerous lawsuits, relating to matters alleged
in the New York Attorney General Lawsuit, relating to broker
compensation arrangements, generally and compensation under
placement or market service agreements, specifically.
Approximately twenty-one putative class actions purportedly
brought on behalf of policyholders were initially filed in
various federal courts, like the Southern and Eastern Districts
of New York, the District of New Jersey, the Eastern District of
Pennsylvania, the Northern District of Illinois, the Southern
District of Texas and the Northern District of California.
These actions generally include statutory claims for violations
of the Racketeering Influenced and Corrupt Organizations Act,
federal and state antitrust laws and state unfair business
practice laws, and common law claims for, among other things,
breach of contract, fraud, breach of fiduciary duty, breach of
duty of loyalty, and unjust enrichment. The complaints seek a
variety of remedies including unspecified monetary damages,
treble damages, disgorgement, restitution, punitive damages,
injunctive relief, an accounting, and attorneys' fees and costs.
The longest class period alleged in these policyholder cases
begins on January 1, 1994 and continues to February 4, 2005.
On February 17, 2005, the Judicial Panel on Multidistrict
Litigation transferred a number of these federal cases to the
District of New Jersey for coordination or consolidated pretrial
proceedings. A number of additional cases have since been
transferred to that court, and it is expected that nearly all
federal putative class actions by policyholders either now
pending or filed hereafter will be transferred there as well.
Five similar class or representative actions are pending in
state courts -- two in California, one in New York, one in
Massachusetts and one in Texas. Two putative class actions are
pending in Canada. There are at least two actions brought by
individual policyholders and additional suits may be filed by
other policyholders
On August 1, 2005, two consolidated amended complaints were
filed in the MDL Cases (one on behalf of a purported class of
"commercial" policyholders and the second on behalf of a
purported class of "employee benefit" policyholders), which as
against the Company include statutory claims for violations of
the Racketeering Influenced and Corrupt Organizations Act,
federal and state antitrust laws, state unfair business practice
laws, and common law claims for, among other things, breach of
fiduciary duty, breach of duty of loyalty, and unjust
enrichment. The complaints seek a variety of remedies including
unspecified monetary damages, treble damages, disgorgement,
restitution, punitive damages, declaratory and injunctive
relief, and attorneys' fees and costs. The class periods alleged
in the MDL Cases begin on August 26, 1994 and purport to
continue to the date of any class certification.
Six class or representative actions on behalf of policyholders
are pending in state courts. Two putative class actions are
pending in Canada. There are also several actions brought by
individual policyholders and others and additional suits may be
filed.
On January 21, 2005, the State of Connecticut commenced a
lawsuit against the Company, challenging its conduct in
connection with the placement of a loss portfolio transfer of
workers' compensation claims for the State of Connecticut's
Department of Administrative Services. The complaint alleges
that the Company violated Connecticut's Unfair Trade Practices
Act by, among other things, failing to disclose a $50,000
payment the Company received from the insurer in connection with
the transfer. The complaint seeks remedies that include an
accounting, actual and punitive damages, and the costs of
investigation and conduct of the lawsuit. On September 21,
2005, the State amended its complaint. In addition to its
allegations about the DAS transaction, the amended complaint
asserts that Marsh violated Connecticut's antitrust and unfair
trade practices acts by engaging in bid rigging and other
improper conduct that purportedly damaged particular customers
and inflated insurance premiums. The State also claims that
Marsh improperly accepted contingent commissions and concealed
these commissions from its clients.
Four purported class actions on behalf of individuals and
entities who purchased or acquired the Company's publicly-traded
securities during the purported class periods are pending in the
United States District Court for the Southern District of New
York. On January 26, 2005, the Court issued an order
consolidating these complaints into a single proceeding and
appointing co-lead plaintiffs and co-lead counsel to represent
the purported class. On April 19, 2005, the co-lead plaintiffs
filed a lengthy consolidated complaint.
The consolidated complaint names the Company, Marsh, Inc., the
Company's independent registered public accounting firm and
twenty of its present and former directors and officers and
certain affiliates, as defendants. The purported class period in
the consolidated complaint extends from October 14, 1999 to
October 13, 2004.
The consolidated complaint alleges, among other things, that the
Company inflated its earnings during the class period by
engaging in unsustainable business practices based on contingent
commissions. The consolidated complaint further alleges, among
other things, that defendants deceived the investing public
regarding the Company's business, operations, management, and
the intrinsic value of the Company's stock, and caused the
plaintiffs and other members of the purported class to purchase
the Company's securities at artificially inflated prices. The
consolidated complaint further alleges that the Company failed
to disclose that the revenue derived from MSA agreements with
insurers was part of an unlawful scheme, which could not be
sustained and which exposed the Company to significant
regulatory sanctions, and that the Company failed to disclose
certain alleged anti-competitive and illegal practices, such as
"bid rigging" and soliciting fictitious quotes, at the Company's
subsidiaries. The consolidated complaint further alleges that
the Company's revenues and earnings would have been
significantly lower had its subsidiaries not engaged in these
allegedly unlawful business practices, and that the Company's
earnings were allegedly overstated because the Company failed to
establish a reserve for contingent losses associated with its
allegedly improper activities.
The consolidated complaint further alleges that the Company
misled its clients and the investing public concerning, among
other things, its business ethics, its loyalty to its clients'
interests, the magnitude of its contingent commissions, and the
nature of any services provided to insurers in exchange for
contingent commissions. The consolidated complaint includes,
among other things, factual allegations similar to those
asserted in the NYAG Lawsuit. It also includes, among other
things, factual allegations concerning alleged misconduct at
Mercer and Putnam and alleged conflicts of interests associated
with MMC Capital. The consolidated complaint includes claims
for violations of Sections 10(b), 18 and 20(a) of the Securities
Exchange Act of 1934 and Sections 11 and 15 of the Securities
Act of 1933, based on the company's s allegedly false or
incomplete disclosures. In addition, the consolidated complaint
includes claims for common law fraud and deceit, negligent
misrepresentation, and violations of state securities laws,
which are being asserted on behalf of a subclass of municipal
and state pension funds. The consolidated complaint seeks
unspecified compensatory damages and attorneys' fees. Following
the announcement of the NYAG Lawsuit and related actions taken
by the Company, the MMC stock price dropped from approximately
$45 per share to a low of approximately $22.75 per share. All
defendants have filed motions to dismiss the consolidated
complaint.
Three individual shareholder actions have been filed against MMC
and others in various state courts around the country. MMC and
other defendants have removed two of these actions to federal
court.
Fourteen shareholder derivative actions have been filed against
the Company's current and former directors and officers in the
Court of Chancery of the State of Delaware, the United States
District Court for the Southern District of New York and the New
York Supreme Court for New York County. These actions allege,
among other things, that current and former directors and
officers of the Company breached their fiduciary duties with
respect to the alleged misconduct described in the NYAG Lawsuit,
are liable to the Company for damages arising from their
breaches of fiduciary duty, and must contribute to or indemnify
the Company for any damages it has suffered. Three of the
shareholder derivative actions filed in the Southern District of
New York have been voluntarily dismissed. The remaining five
actions pending in the Southern District of New York have been
consolidated under the caption In re Marsh & McLennan Derivative
Litigation, No. 04-Civ.-8516 (RMB). The five actions pending in
the Court of Chancery have been consolidated under the caption
"In re Marsh & McLennan Derivative Litigation, C.A No. 753." On
April 4, 2005, the plaintiffs in the Delaware Derivative Action
filed an amended and consolidated complaint that named American
International Group, Inc. (AIG), Maurice R. Greenberg, and ACE
Limited as additional defendants. Pursuant to an order of the
Court of Chancery approving a stipulation of the parties, the
Delaware Derivative Action is stayed pending a ruling on a
motion to dismiss the Southern District of New York securities
class action. The derivative action pending in the New York
Supreme Court has also been stayed pending resolution of the
Federal Derivative Action.
On August 24, 2005, two purported stockholders of MMC filed an
action in the Delaware Court of Chancery, allegedly on behalf of
MMC and Marsh, Inc., naming MMC's independent registered public
accounting firm as a defendant and alleging claims of breach of
professional duty, aiding and abetting and breach of contract
against such firm in connection with actions taken by its
personnel with respect to MMC and its subsidiaries. The parties
to this derivative action have agreed that it will also remain
stayed pending resolution of the motions to dismiss pending a
ruling on a motion to dismiss the Southern District of New York
securities class action.
MMC has also received six demand letters from stockholders
asking the MMC Board of Directors to take appropriate legal
action against those directors and officers who are alleged to
have caused damages to MMC based on the facts alleged in the
NYAG Lawsuit. MMC has advised the stockholders making demands
that their demands are under consideration by the MMC Board of
Directors. M.F. Henry, one of the stockholders who had made
such a demand, subsequently filed a shareholder derivative
complaint alleging that the Board of Directors had refused to
respond to her demand. Subsequently, her action was
consolidated in the Federal Derivative Action. Ms. Henry has
since filed an amended shareholder derivative complaint adding
as defendants three former Marsh employees who have pleaded
guilty to certain criminal charges. In addition to the
derivative claims already asserted in the Federal Derivative
Action, the amended Henry complaint purports to assert
individual claims against certain current and former directors
and officers of MMC, alleging violations of the federal
securities laws, including Sections 10(b), 14(a) and 20 of the
Securities Exchange Act of 1934. Lead counsel to plaintiffs and
counsel to defendants in the Federal Derivative Action have
submitted a stipulation seeking to stay the Federal Derivative
Action in favor of the Delaware Derivative Action. Henry has
objected to the proposed stay; the court is reviewing the
matter.
Twenty purported class actions alleging violations of the
Employee Retirement Income Security Act of 1974, as amended
(ERISA) have been filed in the United States District Court for
the Southern District of New York on behalf of participants and
beneficiaries of the Marsh & McLennan Companies Stock Investment
Plan (the "Plan"). On February 9, 2005, the Court issued an
order consolidating these complaints into a single proceeding
and appointing co-lead plaintiffs and lead counsel to represent
the purported class. Plaintiffs filed the Consolidated Class
Action Complaint on June 15, 2005, naming MMC and various
current and former employees, officers and directors as
defendants. The Consolidated Complaint alleges, among other
things that, in view of the purportedly fraudulent bids and the
receipt of contingent commissions pursuant to the Agreements,
the defendants knew or should have known that the investment of
the Plan's assets in MMC stock was imprudent. The Consolidated
Complaint also asserts that certain defendants failed to provide
the Plan's participants with complete and accurate information
about MMC stock, that certain defendants responsible for
selecting, removing and monitoring other fiduciaries did not
comply with ERISA, and that MMC knowingly participated in other
defendants' breaches of fiduciary duties. The Consolidated
Complaint seeks, among other things, unspecified compensatory
damages, injunctive relief and attorneys' fees and costs. The
amount of Plan assets invested in MMC stock at October 13, 2004
(immediately prior to the announcement of the NYAG Lawsuit) was
approximately $1.2 billion. The Consolidated Complaint alleges
that during the purported class period, which extends from July
1, 2000 until January 31, 2005, MMC stock fell from $52.22 to
$32.50. MMC and the other defendants have filed a motion to
dismiss the Consolidated Complaint.
On February 23, 2005, the plaintiffs in a shareholders
derivative suit pending in the Delaware Court of Chancery
against the directors and officers of American International
Group, Inc. (AIG) filed a consolidated complaint that named MMC,
Marsh, Inc., Marsh USA Inc., Marsh Global Broking Inc.
(collectively, the "MMC Defendants") and Jeffrey W. Greenberg as
additional defendants. This action alleges, among other things,
that the MMC Defendants and Mr. Greenberg aided and abetted the
current and former directors and officers of AIG in breaching
their fiduciary duties to AIG with respect to AIG's
participation in the alleged misconduct described in the NYAG
Lawsuit, including, but not limited to, illegal bid rigging and
kickback schemes. The consolidated complaint also asserts a
claim for unjust enrichment against the MMC Defendants. The
consolidated complaint asserts that the Company Defendants and
Greenberg are liable to AIG for damages arising from allegedly
aiding and abetting the AIG directors and officers' breaches of
their fiduciary duties, and also seeks the return of all
contingent commission payments made by AIG to the MMC
Defendants.
In addition, on May 6, 2005, the plaintiffs in a shareholder
derivative suit pending in the United States District Court for
the Southern District of New York (the "AIG Federal Suit")
against the directors and officers of AIG filed a consolidated
complaint that names the Company and Jeffrey W. Greenberg as
additional defendants and asserts claims against the Company and
Mr. Greenberg for allegedly aiding and abetting breaches of
fiduciary duties by AIG's directors and officers and for unjust
enrichment. On July 18, 2005, the plaintiffs in the AIG Federal
Suit filed an amended shareholder derivative complaint
containing substantially identical allegations against the
Company, Marsh USA, Inc., Marsh Global Broking, Inc. and Jeffrey
Greenberg.
Both the Delaware Chancery Court derivative action and the AIG
federal suit are stayed by orders of the respective courts,
approving stipulations to that effect filed by the parties. In
addition, plaintiffs' counsel in a federal securities fraud
purported class action against AIG and others (to which MMC is
not a party) relating to price declines in AIG's stock has
indicated that plaintiffs may assert claims against MMC in that
action.
MARSH & MCLENNAN: Asks NY Court To Dismiss AXIS Capital Lawsuit
---------------------------------------------------------------
Marsh & McLennan Companies, Inc. asked the United States
District Court for the Southern District of New York to dismiss
the consolidated amended securities class action filed against
it, Axis Capital Holdings, Inc. and certain of Axis' officers,
on behalf of all persons and entities that purchased or acquired
Axis Capital Holdings Limited (Axis) publicly traded common
stock during a purported class period from August 6, 2003 to
October 14, 2004.
On May 13, 2005, the Company was added to the suit, which was
initially filed against Axis and certain of its officers. The
complaint alleges violations of federal securities laws in
connection with defendants' alleged failure to disclose alleged
improper business practices concerning incentive commission
payments by Axis to (among others) Marsh Inc. With regard to
the Company, the complaint also alleges that various entities
and partnerships managed by or associated with MMC Capital Inc.
sold Axis common stock to members of the purported class knowing
of the alleged inflated valuation of such stock, and seeks
damages for alleged violations of federal securities laws.
The suit is styled "Dolan v. AXIS Capital Holdings Ltd. et al.,
case no. 1:04-cv-08564-RJH," filed in the United States District
Court for the Southern District of New York, under Judge Richard
J. Holwell. Representing the plaintiffs is Samuel Howard Rudman
of Lerach, Coughlin, Stoia, Geller, Rudman & Robbins, LLP, 200
Broadhollow Road, Ste. 406, Melville, NY 11747, Phone:
631-367-7100, Fax: 631-367-1173, E-mail: srudman@lerachlaw.com.
Representing the Company is Jennifer Laurie Conn of Gibson, Dunn
& Crutcher LLP (NYC), 200 Park Avenue, 48th Floor, New York, NY
10166, Phone: 212-351-4086, Fax: 212-351-5353, E-mail:
jconn@gibsondunn.com.
MARSH & MCLENNAN: Continues To Face Faces Market-Timing Lawsuits
----------------------------------------------------------------
Marsh & McLennan, Inc. and Putnam Investments Trust have
received complaints for over 70 civil actions based on
allegations of "market-timing" and in some cases "late trading"
activities.
These actions were filed in courts in various states. All of the
actions filed in federal court have been transferred, along with
actions against other mutual fund complexes, to the United
States District Court for the District of Maryland for
coordinated or consolidated pretrial proceedings. The lead
plaintiffs in those cases filed consolidated amended complaints
on September 29, 2004. The Company and Putnam have moved to
dismiss the various complaints pending in federal court in
Maryland.
The Company and Putnam, along with certain of their former
officers and directors, have been named in a consolidated
amended class action complaint (the "MMC Class Action")
purportedly brought on behalf of all purchasers of the publicly-
traded securities of the Company between January 3, 2000 and
November 3, 2003. In general, the MMC Class Action alleges that
the defendants, including the Company, allowed certain mutual
fund investors and fund managers to engage in market-timing in
the Putnam family of funds. The complaint further alleges that
this conduct was not disclosed until late 2003, in violation of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. The complaint alleges
that, as a result of defendants' purportedly misleading
statements or omissions, Company stock traded at inflated levels
during the Class Period. The suit seeks unspecified damages and
equitable relief.
The Company and Putnam have also been named as defendants in a
consolidated amended complaint filed on behalf of a putative
class of investors in certain Putnam Funds, and in another
consolidated amended complaint in which certain fund investors
purport to assert derivative claims on behalf of all Putnam
Funds. These suits seek to recover unspecified damages allegedly
suffered by the funds and their shareholders as a result of
purported market-timing and late-trading activity that allegedly
occurred in certain Putnam Funds.
The derivative suit seeks additional relief, including
termination of the investment advisory contracts between Putnam
and the funds, cancellation of the funds 12b-1 plans and the
return of all advisory and 12b-1 fees paid by the funds over a
certain period of time. In addition to MMC and Putnam, various
Putnam affiliates, certain trustees of Putnam Funds, certain
present and former Putnam officers and employees, and persons
and entities that allegedly engaged in or facilitated market-
timing or late trading activities in Putnam Funds are named as
defendants. The complaints allege violations of Sections 11,
12(a), and 15 of the Securities Act of 1933, Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, Sections 36(a) and (b), 47 and 48(a) of
the Investment Company Act of 1940, and Sections 206 and 215 of
the Investment Advisers Act, as well as state law claims for
breach of fiduciary duty, breach of contract, unjust enrichment
and civil conspiracy. Putnam has also been named as a defendant
in its capacity as a sub-advisor to a non-Putnam fund in a class
action suit pending in the District of Maryland against another
mutual fund complex.
A consolidated amended complaint asserting shareholder
derivative claims has been filed, purportedly on behalf of the
Company, against current and former members of the Company's
Board of Directors, two of Putnam's former officers, and the
Company as a nominal defendant (the "MMC Derivative Action").
The MMC Derivative Action generally alleges that the members of
MMC's Board of Directors violated the fiduciary duties they owed
to MMC and its shareholders as a result of a failure of
oversight of market-timing in Putnam mutual funds. The MMC
Derivative Action alleges that, as a result of the alleged
violation of defendants' fiduciary duties, MMC suffered damages.
The suit seeks unspecified damages and equitable relief. MMC has
also received two demand letters from stockholders asking the
MMC Board of Directors to take action to remedy alleged breaches
of duty by certain officers, directors, trustees or employees of
MMC or Putnam, based on allegations of market timing in the
Putnam Funds. The first letter asked to have the Board of
Trustees of the Putnam Funds, as well as the MMC Board, take
action to remedy those alleged breaches of fiduciary duty. The
second letter demanded that the Company commence legal
proceedings against the MMC directors, the senior management of
Putnam, the Putnam Trustees and MMC's auditor to remedy those
alleged breaches of fiduciary duty.
The Company, Putnam, and various of their current and former
officers, directors and employees have been named as defendants
in two consolidated amended complaints that purportedly assert
class action claims under Employee Retirement Income Security
Act (ERISA). The ERISA Actions, which have been brought by
participants in the Company's Stock Investment Plan and Putnam's
Profit Sharing Retirement Plan, allege, among other things,
that, in view of the market-timing trading activity that was
allegedly allowed to occur at Putnam, the defendants knew or
should have known that the investment of the plans' funds in
Company stock and Putnam's mutual fund shares was imprudent and
that the defendants breached their fiduciary duties to
the plan participants in making these investments. The ERISA
actions seek unspecified damages, as well as equitable relief
including the restoration to the plans of all profits the
defendants allegedly made through the use of the plans' assets,
an order compelling the defendants to make good to the plans all
losses to the plans allegedly resulting from defendants' alleged
breaches of their fiduciary duties, and the imposition of a
constructive trust on any amounts by which any defendant
allegedly was unjustly enriched at the expense of the plans.
Putnam has agreed to indemnify the Putnam Funds for any
liabilities arising from market-timing activities, including
those that could arise in the above securities litigations, and
MMC has agreed to guarantee Putnam's obligations in that regard.
NEW YORK: Restaurant Commences Lawsuit Over 3-Day Transit Strike
----------------------------------------------------------------
A New York restaurant commenced a multi-million-dollar class
action lawsuit seeking compensation for lost business during the
recent 3-day transit strike, The New York Post reports.
"I'm doing it for all the restaurant owners in New York City.
Somebody has to do this," Vlada Von Shats, the manager of
Russian Samovar, the lead plaintiff in the suit told the New
York Post. She also said that business was down about 70 percent
during the strike.
The suit seeks to force the transit union, the transit authority
and the city to pay the West 52nd Street restaurant $25,000 for
each day the strike was on, as well as the creation of a $15
million fund to compensate other eateries affected by the
strike. Filed in Manhattan Supreme Court, the suit blames the
union, the transit authority and the city for the strike.
Ms. Von Shats told The New York Post that it's not about the
money, pointing out that they hurt a lot of people, a lot of
people who are trying to support their families. The strike
cost the city untold millions in police overtime and lost
business and productivity at the very height of the Christmas
rush and forced millions of commuters, holiday shoppers and
tourists to carpool, take taxis, ride bicycles or trudge through
the freezing cold. But the strike did not cause the utter chaos
that many had feared, and traffic in many parts of town was
surprisingly light, according to report by Yahoo! News.
According to Mayor Michael Bloomberg, "In the end, cooler heads
prevailed. We passed the test with flying colors. We did what we
had to do to keep the city running, and running safely," Yahoo!
News reports.
The walkout was New York's first citywide transit strike in more
than 25 years. The workers left their jobs in violation of a
state law prohibiting public employees from striking. State
Justice Theodore Jones fined the union $1 million a day for
striking and under the state no-strike law, the rank-and-file
members were automatically docked two days' pay for each day
they stayed off the job, Yahoo! News reported.
PIXAR: Shareholders Launch Securities Fraud Lawsuits in N.D. CA
---------------------------------------------------------------
Pixar and certain of its officers face several securities class
actions filed in the United States District Court for the
Northern District of California on behalf of purchasers of the
Company's securities from January 18, 2005 to June 30, 2005.
On October 21, 2005, a putative shareholder class action lawsuit
was filed, alleging claims under Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder. The case is entitled "Mataraza v. Pixar,
et al., Case No. C-05-4290 JSW. A similar complaint entitled
"Grabell v. Pixar, et al., Case No. C-05-4431-MJJ," was filed on
November 1, 2005. Consistent with the usual procedures for
cases of this kind, it is anticipated that these cases (and any
other similar putative shareholder class action suits which
might be filed against Pixar) may be consolidated into a single
consolidated action.
PRICESMART INC.: CA Court Approves Securities Suit Settlement
-------------------------------------------------------------
The United States District Court for the Southern District of
California granted approval to the settlement of the
consolidated securities class action filed against PriceSmart,
Inc. and certain of its officers.
On November 17, 2003, the first in a series of seven federal
securities fraud class action lawsuits were filed against the
Company and certain of its former and present officers and
directors, now consolidated as "In re PriceSmart, Inc.
Securities Litigation, Lead Case No. 03cv02260L (LSP)." Six of
the complaints asserted claims against the Company, its former
President and Chief Executive Officer Gilbert Partida, and its
former Chief Financial Officer Allan C. Youngberg.
On behalf of a proposed class of persons who purchased the
Company's common stock between December 20, 2001 and November 7,
2003, plaintiffs asserted claims under Section 10(b) and Section
20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5
promulgated thereunder, based on the allegation that defendants
made material misstatements and omissions in connection with the
financial statements that were the subject of a financial
restatement. Plaintiffs seek damages on behalf of the proposed
class.
The seventh federal securities fraud complaint, styled
"Performance Capital L.P. v. PriceSmart, Inc., Case No.
03cv02561 JAH (S.D. Cal)," was filed by investors who purchased
the Company's Series A Preferred Stock in January 2002, as well
as on behalf of a class of common stock purchasers, and added a
breach of fiduciary duty claim against every then-current member
of the Company's current Board of Directors, as well as a claims
under Section 12(a)(2) and Section 15 of the Securities Act of
1933 relating to plaintiffs' purchase of Series A Preferred
Stock. The Company refers to this litigation as the Performance
Capital lawsuit. Plaintiffs sought damages on behalf of the
proposed class as well as rescission of their contracts with the
Company regarding the Series A Preferred Stock.
All of the federal securities actions were consolidated before
The Honorable John Houston in an order dated September 9, 2004,
which also appointed a lead plaintiff on behalf of the proposed
class of common stock purchasers. The lead plaintiff filed a
consolidated complaint on November 29, 2004, with an expanded
proposed class period of November 1, 2001 to December 16, 2003.
Defendants and the plaintiffs who brought the Performance
Capital lawsuit entered into a Stipulation of Settlement dated
September 3, 2004, which was preliminarily approved by Judge
Houston on September 30, 2004. On September 30, 2004, Judge
Houston also approved a stipulation appointing the plaintiffs in
the Performance Capital lawsuit as lead plaintiff for a proposed
sub-class made up of certain purchasers and holders of the
Company's Series A Preferred Stock, which the Company refers to
as the Series A Preferred Sub-Class. On November 8, 2004,
following notice to members of the Series A Preferred Sub-Class,
a settlement with the Series A Preferred Sub-Class was approved
and judgment was entered. Pursuant to the settlement, the
Performance Capital lawsuit has been dismissed and the Court
entered an order releasing claims that were or could have been
brought by the Series A Preferred Sub-Class arising out of or
relating to the purchase or ownership of the Company's Series A
Preferred Stock. As a term of the settlement, members of the
Series A Preferred Sub-Class were offered the opportunity to
exchange their Series A Preferred Stock for shares of the
Company's common stock at a conversion price of $10.00 per
share, and all members of the Series A Preferred Sub-Class
accepted this offer. The Company paid attorney's fees and costs
to counsel for the Performance Capital plaintiffs in the amount
of $325,000, which was covered by the Company's insurance
carrier.
Defendants and the parties to the remaining class action
lawsuits entered into a Stipulation of Settlement dated as of
May 12, 2005, which sets forth the terms of a settlement of all
claims, and is subject to final court approval. On May 27, 2005
Judge Houston issued an Order preliminarily approving the
settlement and setting August 18, 2005 as the date for a court
hearing as to whether the settlement shall be approved. Under
the proposed settlement, in exchange for a full release of all
claims plaintiffs would receive $2,350,000 (of which the
Company's directors and officers insurance carrier would pay 80%
and the Company would pay 20%, as the Company and the carrier
have agreed that effective as of March 1, 2005 the Company
satisfied the $1,000,000 retention on its insurance policy).
The suit is styled "IN re PriceSmart, Inc. Securities
Litigation, case no. 03-CV-2260," filed in the United States
District Court for the Southern District of California, under
Judge John A. Houston. Representing the Company is Julia Parry
of Latham and Watkins LLP, West Broadway, Suite 1800, San Diego,
CA 92101-8197 Phone: (619)236-1234. The plaintiff firms in this
litigation are Glancy and Binkow, 1801 Avenue of the Stars,
Suite 311, Los Angeles, CA, 90067, Phone: 310-201-9150, E-mail:
info@glancylaw.com; and Goodkind Labaton Rudoff & Sucharow LLP,
100 Park Avenue, New York, NY, 10017, Phone: 212.907.0700, Fax:
212.818.0477, E-mail: info@glrslaw.com.
QWEST COMMUNICATIONS: Lawyers Seek 24% Cut From $400M Settlement
----------------------------------------------------------------
A recent filing with the Denver federal court indicated that
attorneys plan to request fees of up to 24 percent, or nearly
$100 million, out of the $400 million shareholder class action
settlement with Qwest Communications, The Rocky Mountain News
reports.
The filing also estimated that the distribution to shareholders
would average 19 cents a share before court-approved fees. The
proposed settlement, which the court must approve, resolves the
major shareholder lawsuit against the Denver telco for its
accounting scandal of 1999-2002. The new filing was just
proposed language for an eventual notice to investors.
Michael Dowd, an attorney with the lead law firm Lerach Coughlin
Stoia Geller Rudman & Robbins, LLP of San Diego stresses, "The
description of the amount of fees doesn't necessarily mean we
will apply for that whole amount."
Mimi Hull, president of the Association of U.S. West Retirees,
comments that she will think it's outrageous if the attorneys
ask for even half the amount. She told The Rocky Mountain News,
"Shareholders have continued to take it on the chin time after
time, and that kind of compensation to attorneys is just
ridiculous, unconscionable."
The filing revealed that if attorneys get 24 percent in fees,
the average distribution to investors will go down to 14 cents a
share. The ultimate amount received by investors will depend on
how much stock they owned and when and how many valid claims are
filed.
Recently, U.S. West retirees filed notice to appeal the court's
decision that awarded plaintiff attorneys $16.3 million of a $50
million class action shareholder settlement. Curtis Kennedy, an
attorney for the Association of U.S. West Retirees, told The
Rocky Mountain News, "I just think these (awards) have gotten
out of hand. It's an example of greed gone wild with these trial
lawyers. Where does it end?," an earlier Class Action Reporter
story (September 23, 2005) reports.
Denver District Judge John Coughlin previously ruled that the
class action attorneys, led by the California law firm of Lerach
Coughlin, were entitled to their full request of $15 million,
plus $1.3 million in out-of-pocket expenses. The judge explained
his decision by saying that the lawyers had been the only ones
to step up to the plate and take on the risky case on behalf of
U.S. West shareholders, an earlier Class Action Reporter story
(September 23, 2005) reports.
The suit alleged that Qwest Communications had breached its
fiduciary duty by failing to pay a 53-cents-a-share, second-
quarter dividend after the merger with U.S. West in June 2000.
The plaintiffs originally sought $273 million in damages, but
lawyers settled the case for $50 million on the eve of the
scheduled trial an earlier Class Action Reporter story
(September 23, 2005) reports.
Although plaintiff attorneys usually get a contingency fee of
around 30 percent, Mr. Kennedy questioned whether it should
apply in a case where the final award is of such magnitude. The
Colorado Court of Appeals would hear an appeal by their side,
Mr. Kennedy said an earlier Class Action Reporter story
(September 23, 2005) reports.
Mr. Kennedy told The Rocky Mountain News that he particularly is
troubled by the court not requiring Mr. Lerach to provide
evidence of how it spent the $1.3 million, noting that it would
be easy to slip in bar or expensive restaurant tabs, limousine
services and the like. He pointed out, "If we were in federal
court, I think the judge would say that they have to show some
supporting paperwork," an earlier Class Action Reporter story
(September 23, 2005) reports.
RALPH LAUREN: Reaches Settlement for CA Employee Wardrobing Suit
----------------------------------------------------------------
Mediation is still proceeding for class action filed against
Polo Ralph Lauren Corporation and its Polo Retail, LLC
subsidiary in the United States District Court for the Northern
District of California.
On September 18, 2002, an employee at one of the Company's
stores filed a lawsuit, alleging violations of California
antitrust and labor laws. The plaintiff purports to represent a
class of employees who have allegedly been injured by a
requirement that certain retail employees purchase and wear
Company apparel as a condition of their employment. The
complaint, as amended, seeks an unspecified amount of actual and
punitive damages, disgorgement of profits and injunctive and
declaratory relief.
The Company answered the amended complaint on November 4, 2002.
A hearing on cross motions for summary judgment on the issue of
whether the Company's policies violated California law took
place on August 14, 2003. The Court granted partial summary
judgment with respect to certain of the plaintiff's claims, but
concluded that more discovery was necessary before it could
decide the key issue as to whether the Company had maintained
for a period of time a dress code policy that violated
California law. The parties are engaged in settlement
discussions, and during Fiscal 2005, the Company recorded a
reserve for our estimate of the settlement cost, the amount of
which is not material. The Company later reached an agreement
in principle on a settlement of this matter. The proposed
settlement would be subject to court approval and the proposed
settlement cost, of $1.5 million, does not exceed the reserve
the Company established for this matter in Fiscal 2005. The
state court action is covered by the proposed settlement
described above and would be dismissed upon the court's final
approval of the settlement.
On April 14, 2003, a second putative class action was filed in
the San Francisco Superior Court in California. This suit,
brought by the same attorneys, alleges near identical claims to
those in the federal class action. The class representatives
consist of former employees and the plaintiff in the federal
court action. Defendants in this class action include the
Company and its subsidiaries Polo Retail, LLC, Fashions Outlet
of America, Inc., Polo Retail, Inc. and San Francisco Polo, Ltd.
as well as a non-affiliated corporate defendant and two current
managers. As in the federal action, the complaint seeks an
unspecified amount of actual and punitive restitution of monies
spent, and declaratory relief. The state court class action has
been stayed pending resolution of the federal class action.
The suit is styled "Young v. Polo Retail, LLC et al., 3:02-cv-
04546-VRW," filed in the United States District Court for the
Northern District of California, under Judge Vaughn R. Walker.
Lead plaintiff is Toni Young. Lawyers for the plaintiffs are:
(1) Daniel L. Feder, Law Offices of Daniel Feder, 807
Montgomery Street San Francisco, CA 94133, Phone: 415-
391-9476, Fax: 415-391-9432, E-mail:
danfeder@pacbell.net
(2) Joseph Lewis Fogel, Tonita Marie Helton, Richard B.
Levy, Freeborn & Peters, 311 S. Wacker Drive, Suite
3000 Chicago, IL 60606 Phone: 312-360-6568, E-mail:
jfogel@freebornpeters.com or thelton@freebornpeters.com
Lawyers for the defendants are:
(i) Mary L. Guilfoyle and Joseph D. Miller, Epstein Becker
& Green, P.C., One California Street, 26th Floor, San
Francisco, CA 94111-5427, Phone: 415-398-3500, Fax:
415-398-0955 or E-mail: mguilfoyle@ebglaw.com or
jmiller@ebglaw.com
(ii) Patrick R. Kitchin, Law Office of Patrick R. Kitchin,
807 Montgomery Street, San Francisco, CA, Phone: (415)
677-9058 E-mail: prk@investigationlogic.com
RODALE INC.: PA Judge Dismisses Illegal Marketing Tactics Suit
--------------------------------------------------------------
U.S. District Judge Paul Diamond dismissed a class action
lawsuit that alleged publisher Rodale, Inc. used illegal
marketing tactics, The Associated Press reports.
The suit, which started in 2003 when several law firms that
specialize in class action cases filed it in the U.S. District
Court for Eastern Pennsylvania, alleges that the Rodale had a
practice of sending unordered books to customers, then billing
the customers, violating federal and state consumer protection
laws. The suit also alleges that Rodale had a program in which
it sent mailings to consumers, asking them to buy an initial
book. After the customer bought and paid for the first book,
Rodale allegedly sent additional books that were not ordered, an
earlier Class Action Reporter story (August 9, 2005) reports.
However, the federal judge dismissed the case recently on
procedural grounds, saying that the section of the Postal
Reorganization Act cited in the suit does not give private
individuals the right to sue. The act sets conditions for
sending unsolicited merchandise to consumers. The Federal Trade
Commission would be the appropriate party to file such a suit,
Judge Diamond concluded.
Rodale continues to use the practices outlined in the lawsuit,
company spokeswoman Mia Carbonell told The Associated Press. She
adds, "We are pleased with the outcome and we believe our
marketing practices are legitimate and a consumer-friendly
service that we offer our customers."
According to court papers from plaintiff lawyer Daniel Allanoff
of the Philadelphia firm of Meredith Cohen Greenfogel & Skinick,
when the customers balked at paying, "Rodale unleashed an
aggressive, sophisticated and effective collection campaign."
Mr. Allanoff also stated in court papers that Rodale used a
"negative option marketing scheme," treating customers as if
they've ordered the books unless they've taken steps to return
them or taken steps to stop the books from coming, an earlier
Class Action Reporter story (August 9, 2005) reports.
Rodale's lawyers though vehemently maintained that the wording
on the marketing material explaining the program was sufficient
to comply with the laws. Mr. Allanoff wants the suit to proceed
on behalf of all people adversely affected by the program for
the six years before the suit was filed. Previously, Rodale
raised questions about the first proposed class representative,
Michael Karnuth of Chicago. Research indicated he had actually
ordered and paid for the "unordered" book. Mr. Karnuth, a
lawyer, was replaced, an earlier Class Action Reporter story
(August 9, 2005) reports.
The Company later raised questions about his replacement, David
Wisniewski, also a Chicago attorney. Rodale's lawyers wanted
Judge Diamond to reject Mr. Wisniewski too since he said he
hadn't read all the marketing materials Rodale sent to him. He
had discarded much of it as "junk mail," without reading it.
However, Judge Diamond, of Philadelphia, disagreed and thus
ruled that Mr. Wisniewski is a suitable class representative, an
earlier Class Action Reporter story (August 9, 2005) reports.
Judge Diamond previously dismissed the two claims that allege
Rodale violated Pennsylvania consumer protection laws, because
the consumer protection laws of all 50 states would have to be
included in the suit, making the suit too unwieldy. The only
remaining claim, which was the latest to be dismissed, alleges
that Rodale violated the federal Postal Reorganization Act, an
earlier Class Action Reporter story (August 9, 2005) reports.
Rodale, represented by Gross, McGinley, Labarre & Eaton, an
Allentown law firm, previously appealed Judge Diamond's
certification of the case as a class action suit to the Third
Circuit U.S. Court of Appeals in Philadelphia. Depending on the
outcome, the case could benefit tens of thousands of consumers
across the nation that Rodale supposedly targeted, an earlier
Class Action Reporter story (August 9, 2005) reports.
The suit is styled, "WISNIEWSKI v. RODALE, INC., Case No. 2:03-
cv-00742-PD," filed in the United States District Court for the
Eastern District of Pennsylvania, under Judge Paul S. Diamond.
Representing the Plaintiff is DANIEL B. ALLANOFF of MEREDITH
COHEN GREENFOGEL & SKINICK, PC, 117 S. 17TH ST., 22ND FL.,
PHILADELPHIA, PA 19103, Phone: 215-564-5182, E-mail:
dallanoff@mcgslaw.com. Representing the Defendant are, GREGORY
A. CLARICK of MANATT PHELPS & PHILLIPS, LLP, 7 TIMES SQUARE, NEW
YORK, NY 10036, E-mail: gclarick@manatt.com; and PAUL A.
MCGINLEY, ERROL C. DEANS, JR. and SUSAN ELLIS WILD of GROSS,
MCGINLEY, LABARRE & EATON, LLP, 33 S. 7TH ST., P.O. BOX 4060,
ALLENTOWN, PA 18105-4060, Phone: 610-820-5450, Fax:
610-820-6006, E-mail: pmcginley@gmle.com, edeans@gmle.com and
swild@gmle.com.
SALESFORCE.COM: CA Judge Dismisses Consolidated Investor Lawsuit
----------------------------------------------------------------
A California federal judge dismissed with prejudice a
shareholder class action lawsuit against Salesforce.com Inc.,
The ITworld.com reports.
In his ruling, which essentially means that the claims can never
be brought against the defendant again, U.S. District Judge
Jeffrey White ruled that the plaintiffs in a July 2004 suit
failed to prove claims that Salesforce.com Chairman and Chief
Executive Officer Marc Benioff and Chief Financial Officer Steve
Cakebread violated the Securities Exchange Act of 1934 by
misleading shareholders prior to the company's initial public
offering (IPO).
The suit was originally filed in the United States District
Court for the Northern District of California, one of several
filed in that district that month with similar claims. The cases
were eventually consolidated. Judge White's ruling applies to
those cases.
Judge White ruled that Mr. Benioff and Mr. Cakebread did not
violate the Securities Exchange Act by failing to disclose prior
to the company's June 21, 2004, IPO a forecast that
Salesforce.com's fiscal 2005 revenue would not meet Wall Street
expectations. That announcement, made by the company on July 21,
sent the stock plunging from $16.06 to $11.05, just $0.05 above
the IPO price.
Additionally, Judge White wrote in his ruling that the
Securities Exchange Act "imposes no duty to disclose internal
forecasts in the context of an initial public offering."
Thomas Morrison filed the initial complaint on behalf of all
shareholders who purchased Salesforce.com's stock between June
21, 2004 and July 21, 2004. One of the issues raised in that
filing was Mr. Benioff's interview that appeared in The New York
Times before the IPO. After the interview, the U.S. Securities
and Exchange Commission made the company go through a cooling-
off period, which delayed the IPO. During that delay, the
company did not retract the statements made in the article or
give potential shareholders any indication that the company
would not perform as expected after its IPO, Mr. Morrison
claimed in the original filing.
When Salesforce.com did go public on June 21, the IPO price was
$11, rising to $17.20 on the first day of trading. However, on
July 21, the stock plunged on the earnings warning.
Mr. Morrison claimed in his original filing that Salesforce.com
executives knew the company would not perform as expected, yet
did not disclose that information pre-IPO, thus violating the
Securities Exchange Act.
The suit is styled, "In re salesforce.com, inc. Securities
Litigation, Case No. C-04-3009 JSW," filed in the United States
District Court for the Northern District of California under
Judge Jeffrey S. White. Chuo Zho has been appointed as lead
plaintiff in the suit. The plaintiff firms in this litigation
are:
(1) Green & Jigarjian LLP (proposed liaison counsel), 235
Pine Street, 15th Floor, San Francisco, CA, 94104,
Phone: 415.477.6700, Fax: 415.477.6710;
(2) Schiffrin & Barroway, LLP (proposed lead counsel) 3
Bala Plaza E, Bala Cynwyd, PA, 19004, Phone:
610.667.7706, Fax: 610.667.7056, E-mail:
info@sbclasslaw.com;
(3) Brian Felgoise, 230 South Broad Street, Suite 404,
Philadelphia, PA, 19102, Phone: 215.735.6810, Fax:
215/735.5185;
(4) Glancy and Binkow, 1801 Avenue of the Stars, Suite 311,
Los Angeles, CA, 90067, Phone: 310-201-9150, E-mail:
info@glancylaw.com;
(5) Kirby McInerney & Squire, LLP, 830 Third Ave., 10th
Floor, New York Ave, NY, 10022, Phone: 212.317.2300;
(6) Law Offices of Charles J. Piven, P.A., World Trade
Center-Baltimore, 401 East Pratt Suite 2525, Baltimore,
MD, 21202, Phone: 410.332.0030, E-mail:
pivenlaw@erols.com;
(7) Lerach Coughlin Stoia Geller Rudman & Robbin (San
Francisco), 100 Pine St., Suite 2600, San Francisco,
CA, 94111, Phone: 415.288.4545, Fax: 415.288.4534, E-
mail: info@lerachlaw.com;
(8) Murray, Frank & Sailer, LLP, 275 Madison Ave., 34th
Flr., New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@murrayfrank.com;
(9) Stull, Stull & Brody (Los Angeles), 10940 Wilshire
Boulevard - Suite 2300, Los Angeles, CA, 90024, Phone:
310.209.2468; and
(10) Weiss & Yourman (Los Angeles, CA), 10940 Wilshire
Blvd., 24th Floor, Los Angeles, CA, 90024, Phone:
310.208.2800, Fax: 310.209.2348, E-mail: info@wyca.com.
Representing the Company is John P. Stigi, III of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA 94304-1050,
Phone: (650) 493-9300, E-mail: jstigi@wsgr.com.
VI TECHNOLOGIES: Asks NY Court To Dismiss Employee Overtime Suit
----------------------------------------------------------------
V.I. Technologies asked New York State Court to dismiss a class
action filed by another former employee of its Melville plant.
The Company divested the Melville plant to Precision
Pharmaceuticals, Inc. in August 2001. Precision is also a party
to the suit.
The suit is a class action in which the lead plaintiff,
representing the class, claims that the Company underpaid
overtime to employees of the processing plant. The complaint
alleges an amount in excess of $125,000 in unpaid overtime plus
the costs of the action and reasonable attorney's fees due from
the two defendants.
On February 23, 2005, the Company filed a motion to dismiss the
class action allegations of the complaint. That motion is
currently pending before the court. The Company is in the
process of analyzing employee payroll records for the period in
question, which, based on the statute of limitations, the
Company believes to be from approximately February 1999 to
August 2001, and the Company intends to contest the claim.
VIA NET.WORKS: Final NY Fairness Hearing Set April 24, 2006
-----------------------------------------------------------
Final fairness hearing for the settlement of the consolidated
securities class action filed against VIA NET.WORKS, Inc.,
certain of the underwriters who supported its initial public
offering (IPO) and certain of our officers, styled "O'Leary v.
Via Net.works [sic] et al [01-CV-9720]," is set for April
24,2006 in the United States District Court for the Southern
District of New York.
An amended complaint was filed in April 2002. The Complaint
alleges that the prospectus the Company filed with its
registration statement in connection with its IPO was materially
false and misleading because it failed to disclose, among other
things, that:
(1) the named underwriters had solicited and received
excessive and undisclosed commissions from certain
investors in exchange for the right to purchase large
blocks of VIA IPO shares; and
(2) the named Underwriters had entered into agreements with
certain of their customers to allocate VIA IPO shares
in exchange for which the customers agreed to purchase
additional VIA shares in the aftermarket at pre-
determined prices, thereby artificially inflating the
Company's stock price.
The Complaint further alleges violations of Sections 11, 12
(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder arising out of the alleged failure to disclose and
the alleged materially misleading disclosures made with respect
to the commissions and the Tie-in Arrangements in the
prospectus. The plaintiffs in this action seek monetary damages
in an unspecified amount.
Approximately 300 other issuers and their underwriters have had
similar suits filed against them, all of which are included in a
single coordinated proceeding in the Southern District of New
York (the "IPO Litigation"). On June 30, 2003, the special
litigation committee of the board of directors of the Company
conditionally approved the global settlement between all
plaintiffs and issuers in the IPO Litigations. The special
litigation committee agreed to approve the settlement subject to
a number of conditions, including the participation of a
substantial number of other defendants in the proposed
settlement, the consent of the Company's insurers to the
settlement, and the completion of acceptable final settlement
documentation. The settlement would provide, among other
things, a release of the Company and of the individual
defendants for the conduct alleged in the action to be wrongful
by the plaintiffs.
Under the proposed settlement, the Company would agree to
undertake other responsibilities under the partial settlement,
including agreeing to assign away, not assert, or release
certain potential claims the Company may have against its
underwriters. In June 2004, a motion for preliminary approval
of the settlement was filed with the Court. The underwriters
filed a memorandum with the Court opposing preliminary approval
of the settlement. The court granted the preliminary approval
on February 15, 2005, subject to certain modifications. If the
parties are able to agree upon the required modifications, and
such modifications are acceptable to the court, notice will be
given to all class members of the settlement, a fairness hearing
will be held and if the Court determines that the settlement is
fair to the class members, the settlement will be approved. On
August 31, 2005 the court issued an order preliminarily
approving the settlement stipulation, certifying the settlement
classes and setting April 24, 2006 for the date on which a
"fairness" hearing will be held to consider the settlement and
any objections thereto. If at such time, the Court determines
that the settlement is fair to the class members, the settlement
will be approved, subject to any appeals that may be filed.
The suit is styled "O'Leary v. Via Net.works [sic] et al [01-CV-
9720] (SAS)," 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:
(i) 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
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) 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
(iv) 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
(v) 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
(vi) 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
VIISAGE TECHNOLOGY: MA Court Mulls Consolidation of Stock Suits
---------------------------------------------------------------
The United States District Court for the District of
Massachusetts has yet to rule on motions to consolidated eight
securities class actions filed in March and April 2005 against
Viisage Technology, Inc., Bernard C. Bailey, William K. Aulet
and Denis K. Berube and other members of the Company's Board of
Directors.
A motion has been filed by the so-called Turnberry Group
to consolidate these lawsuits into one action under the case
name: "Darquea v. Viisage Technology, Inc. et al., Civil Action
No. 05-10438-MLW." This motion also seeks to have the Turnberry
Group designated as lead plaintiff and its counsel designated as
lead counsel.
The suits allege violations of the federal securities laws by
the Company and certain of its officers and directors arising
out of purported misrepresentations in the guidance that the
Company provided on its anticipated financial results for fiscal
2004 following the release of its 2004 second and third quarter
results, which allegedly artificially inflated the price of the
Company's stock during the period May 3, 2004 through March 2,
2005.
The first identified complaint in the litigation is styled
"Ernesto Darquea, et al. v. Viisage Technology, Inc., et al.,
case no. 05-CV-10438," filed in the United States District Court
for the District of Massachusetts. The plaintiff firms in this
litigation are:
(1) Baron & Budd, P.C., 3102 Oak Lawn Avenue, Suite 1100,
Dallas, TX, 75219, Phone: 800-946-9646, E-mail:
info@baronbudd.com
(2) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (MA),
One Liberty Square, Boston, MA, 2109, Phone:
617.542.8300, Fax: 617.230.0903, E-mail:
info@bermanesq.com
(3) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (MA),
One Liberty Square, Boston, MA, 2109, Phone:
617.542.8300, Fax: 617.230.0903, E-mail:
info@bermanesq.com
(4) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(5) Dyer & Shuman, LLP, 801 East 17th Avenue, Denver, CO,
80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, E-
mail: info@dyershuman.com
(6) Kaplan Fox & Kilsheimer, LLP (New York, NY), 805 Third
Avenue, 22nd Floor, New York, NY, 10022, Phone:
212.687.1980, Fax: 212.687.7714, E-mail:
info@kaplanfox.com
(7) Klafter & Olson LLP, 2121 K St., NW Suite 800,
Washington, DC, 20037, Phone: 202.261.3553, Fax:
202.261.3533, E-mail: info@klafterolsen.com
(8) Law Offices of Brian M. Felgoise, P.C., Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net
(9) Lerach Coughlin Stoia Geller Rudman & Robbins
(Melville), 200 Broadhollow, Suite 406, Melville, NY,
11747, Phone: 631.367.7100, Fax: 631.367.1173, E-mail:
info@lerachlaw.com
(10) Paskowitz & Associates, Phone: 800.705.9529, E-mail:
classattorney@aol.com
(11) Roy Jacobs & Associates, 350 Fifth Avenue Suite 3000,
New York, NY, 10118, E-mail: classattorney@pipeline.com
(12) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(13) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(14) Seeger Weiss LLP (New York Old Address), 40 Wall
Street. The Trump Building, New York, NY, 10005, Phone:
212.584.0700, E-mail: info@seegerweiss.com
(15) Shapiro, Haber & Urmy LLP, 75 State Street, Boston, MA,
02109, Phone: 617.439.3939, Fax: 617.439.0134, E-mail:
info@shulaw.com
(16) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New
York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com
VIRGINIA: Charlottesville Resident Files Suit Over DNA Testing
--------------------------------------------------------------
Larry Monroe, a resident of Charlottesville, Virginia commenced
a federal class action lawsuit on behalf of himself and other
black men asked by police to submit to DNA testing in the hunt
for the serial rapist who has been forensically linked to at
least seven attacks between 1997 and 2004, The Daily Progress
reports.
The suit is the second filed by Mr. Monroe, who unsuccessfully
sued Charlottesville police Detective James Mooney for $15,000
last year, alleging that the detective harassed him into giving
a sample because he is black, not because he fit the description
of the rapist.
The first lawsuit, filed in July 2004, was dismissed in February
after General District Judge Robert H. Downer Jr. ruled that Mr.
Monroe consented to the search and Detective Mooney did not
search him out of racial animosity. However, Mr. Monroe's
lawyer, Deborah C. Wyatt, noted during the first case that the
rapist was described as a black man who is roughly 6 feet tall
with an athletic build, while Monroe is 5-foot-8 and weighs
about 300 pounds.
The practice of asking scores of black men for DNA samples was
curtailed in April 2004 after public outcry. Police Chief
Timothy J. Longo said investigators would adhere to stricter
guidelines when deciding whom to ask for samples.
Deputy City Attorney Lisa Robertson Kelley declined to comment
on the new lawsuit because she had not seen it but noted that
the first lawsuit was thrown out. She told The Daily Progress,
"The lawsuit was dismissed on a motion to strike, which means
that the plaintiff's evidence was so slim that the defendant
didn't have to put on a case." She adds, "We're pretty confident
that things will turn out the same way."
The new suit, which targets Detective Mooney, Chief Longo and
the city of Charlottesville, alleges two violations of
constitutional rights:
(1) The policy of asking Monroe and other black men to
provide their DNA for tests violates their
constitutional right to equal protection because the
same policy wasn't applied to all white men after
unsolved sexual assaults made by white assailants; and
(2) The policy constituted unreasonable seizures.
Filed last December 16, 2006 in U.S. District Court in
Charlottesville, the suit contends, "All government
classifications based on race are subject to strict judicial
scrutiny, including decisions regarding whom to speak with when
police are investigating a crime." It noted, "While race may be
a factor in such decisions, it may not be the only factor."
Asked for comment Chief Longo declined and instead said that he
had not had time to review the complaint. On the other hand,
Detective Mooney, who had not heard about the lawsuit, told The
Daily Progress, "It's been dismissed at every other level, so I
guess that's the next step."
Though Ms. Wyatt declined to name any other plaintiffs who could
join the class action, she told The Daily Progress that she'd
talked to several, at least one of whom said police showed him
"grisly pictures" to induce him to provide a sample.
Under class action rules, Mr. Monroe must get permission from a
judge to sue on behalf of others who have the same complaint.
The current suit also seeks $15,000 in damages. If class action
status is approved, and if others join the suit, the same amount
of compensation would be sought for each of the plaintiffs.
The lawsuit notes that reports were made for every man who
refused to submit to a DNA test. The investigating officer was
required to either get consent for the test or explain why he or
she couldn't, according to Ms. Wyatt. She told The Daily
Progress, "That was very distressing to me to learn. I suspect
[the reports are] still around."
Ms. Wyatt stressed that Chief Longo and Detective Mooney are
being sued in their official capacities only, not as
individuals. She explains to The Daily Progress, "It means we
are not going after them personally for what they've done." She
adds, "We want a ruling on this. We think people are entitled to
some compensation, but we thought it was appropriate only in an
official capacity."
The suit is styled, "Monroe v. City of Charlottesville, Virginia
et al., Case no. 3:05-cv-00074-nkm," filed in the United States
District Court for the Western District of Virginia, under Judge
Norman K. Moon. Representing the Plaintiff is Neal L. Walters of
SCOTT & KRONER, PC, P.O. BOX 2737, CHARLOTTESVILLE, VA 22902-
2737, Phone: 434-296-2161, Fax: 434-293-2073, E-mail:
nwalters@scottkroner.com.
VISA CHECK: Firm Releases Advisory Letter Regarding Settlement
--------------------------------------------------------------
The Law Firm of Constantine Cannon recently released the
following advisory letter to merchants concerning the Visa
Check/MasterMoney Antitrust Litigation:
"Dear Merchant,
This law firm, Constantine Cannon, is lead counsel for United
States merchants in the case called Visa Check/MasterMoney
Antitrust Litigation, CV 96-5238.
The settlement in the Visa Check/MasterMoney Antitrust
Litigation, which provides $3.383 billion in compensatory relief
and an injunction valued by the court in the range of $25-$87
billion to U.S. merchants and consumers over the next decade,
became final on May 31, 2005, and claim forms have been mailed
to members of the Class.
Class members who chose to consolidate their claim form after
receiving multiple claim forms at individual store locations
will receive a revised claim form. Class members that receive a
revised claim form will have 90 days from the mailing of the
revised form to submit their claim form or to challenge their
estimated cash payment.
Class members whose consolidation request has been submitted to
the Claims Administrator, The Garden City Group ("GCG"), by
December 28, 2005 do not need to take any other action to
preserve their rights to receive payment from the settlement
fund. GCG will be mailing all consolidated claim forms early in
2006.
Additional information regarding the claims process is available
by calling 1-888-641-4437 or visiting the case website at
http://www.inrevisacheckmastermoneyantitrustlitigation.com.
Sincerely,
CONSTANTINE CANNON
Lead Counsel for the Class
Counsel@www.InReVisacheckMastermoneyAntitrustLitigation.com
212-350-2799"
WAL-MART STORES: To Appeal $172M Verdict in CA Lunch Break Case
---------------------------------------------------------------
Wal-Mart Stores plans to appeal a $172 million judgment awarded
to thousands of employees who claimed that they were illegally
denied lunch breaks, The Associated Press reports.
The verdict, handed down last week by a California jury, found
that the world's largest retailer violated a 2001 state law. It
came after nearly three days of deliberations and four months of
testimony. In a prepared statement, Wal-Mart said it would
appeal.
The class action lawsuit in Alameda County Superior Court is one
of about 40 nationwide alleging workplace violations by Wal-
Mart, and the first to go to trial. In this verdict, the
Bentonville, Arkansas-based retailer was ordered to pay $57
million in general damages and $115 million in punitive damages
to about 116,000 current and former California employees.
The case, which needs nine jurors to side with it to prevail,
concerns a 2001 state law, which is among the nation's most
worker friendly. That state law stipulates that employees who
work at least six hours must have a 30-minute, unpaid lunch
break. If they do not get that, the law requires they be must
paid for an additional hour of pay. The suit covers former and
current employees in California from 2001 to 2005, an earlier
Class Action Reporter story (September 21, 2005) reports.
Brought in 2001 by a handful of San Francisco-area former Wal-
Mart employees, the case, which does not claim that employees
were forced to work off the clock during their lunch breaks took
four years of legal wrangling to get to trial. During that time,
Wal-Mart produced internal audits that plaintiffs' attorneys say
revealed the company knew it was not granting meal breaks on
thousands of occasions. That 2000 audit was given to top-level
executives, according to evidence submitted to jurors, an
earlier Class Action Reporter story (September 21, 2005)
reports.
Commenting on the ruling, company attorney Neal Manne told The
Associated Press, "We absolutely disagree with their findings."
He claimed that the state law in question could only be enforced
by California regulators and not by workers in a courtroom. He
conceded though that Wal-Mart made mistakes in not always
allowing for lunch breaks when the 2001 law took effect, but
maintains that the company is "100 percent" in compliance now.
Attorney Fred Furth, who brought the case on behalf of the
workers, told The Associated Press outside court that the jury
"held Wal-Mart to account."
The verdict comes as the company wages an intense public-
relations campaign to counter critics aiming to stop the
retailer's expansion and make it boost workers' salaries and
benefits.
WINNEBAGO INDUSTRIES: Trial in Iowa FLSA Suit Set March 6, 2006
---------------------------------------------------------------
Trial in the class action filed against Winnebago Industries,
Inc., styled "Jody Bartleson, et al vs. Winnebago Industries,
Inc., et al.," is set for March 6,2006 in the United States
District Court, Northern District of Iowa, Central Division.
Ms. Bartleson filed the suit on January 28, 2002, on her own
behalf and as a representative of "others similarly situated."
The suit alleges that such plaintiffs were wrongfully classified
by the Company as exempt employees when in fact they were non-
exempt employees entitled to recover overtime compensation for
work performed during the preceding three years. This suit was
brought under the Federal Fair Labor Standards Act as an "opt
in" class action, 21 people have joined the suit to date as
plaintiffs. The plaintiffs then amended their complaint adding a
claim under the Iowa Wage Payment Collection Act in order to
change the nature of the case from an `opt in' class action
where individual plaintiffs must take an affirmative act to join
the lawsuit to an `opt out' class action where all persons who
had been exempt salaried employees over the three-year period
preceding the filing of the lawsuit are included as plaintiffs
unless they individually seek to `opt out' of the lawsuit. In a
ruling by Chief Judge Mark W. Bennett, this amendment was
disallowed and the lawsuit therefore remained an `opt in' class
action with 21 participants.
YANKEE CANDLE: Continues To Face CA Labor Laws Violations Suit
--------------------------------------------------------------
Yankee Candle Co., Inc. faces a class action filed in California
State Court, charging it with violations of certain California
state wage and hour and employment laws with respect to certain
employees in its California retail stores.
This complaint was filed in February 2005 and the Company has
therefore only begun to investigate the allegations and have yet
to file its answer. The discovery phase of the litigation has
not yet begun. Procedural motions are currently pending in the
applicable California courts. While the Company intends to
vigorously defend itself against the allegations, it is too
early in the litigation process for it to fully evaluate or
predict the outcome of the litigation, the Company said in a
disclosure to the Securities and Exchange Commission.
New Securities Fraud Cases
NASH FINCH: Lockridge Grindal Files Securities Suit in MN Court
---------------------------------------------------------------
The law firm of Lockridge Grindal Nauen P.L.L.P. filed a
securities class action lawsuit on behalf of all persons who
purchased the common stock of Nash Finch Company ("Nash Finch"
or the "Company") (Nasdaq:NAFC) between February 24, 2005 and
October 20, 2005, inclusive (the "Class Period") seeking to
pursue remedies under the Securities Exchange Act of 1934 (the
"Exchange Act").
The action is pending in the United States District Court for
the District of Minnesota against defendants Nash Finch Company,
Ron Marshall (CEO) and Le Anne M. Steward (CFO & Senior Vice
President). A copy of the complaint filed in this action is
available from the Court.
The complaint alleges that Nash Finch made a series of false and
misleading statements with respect to its acquisition of
Roundy's Distribution Center, a mid-west food distributor. These
statements were false and misleading because Defendants knew or
recklessly disregarded that Nash Finch was operating far below
expectations, had significantly underreserved for the Roundy's
acquisition, the integration of Roundy's was not proceeding as
planned, and the Company's core business was under-performing.
On October 20, 2005, Nash Finch issued a press release
announcing lower fiscal 2005 earnings guidance. The Company
attributed the lower guidance to a decline in retail gross
margins and inadequate execution of pricing across its retail
operations and higher than expected acquisition integration
costs. In reaction to the announcement, Nash Finch shares
plummeted $12.76 per share, or 28.6%, to close at $30.04 on
October 21, 2005.
For more details, contact Gregg M. Fishbein, Esq. or Nathan D.
Prosser, Esq., Lockridge Grindal Nauen P.L.L.P., 100 Washington
Avenue South, Suite 2200, Minneapolis, MN 55401, Phone:
(612) 339-6900, E-mail: gmfishbein@locklaw.com,
ndprosser@locklaw.com.
NORTHWEST AIRLINES: Milberg Weiss Bershad Files Fraud Suit in NY
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman, LLP, filed a
class action lawsuit on behalf of purchasers of the securities
of Northwest Airlines Corporation ("Northwest" or the "Company")
(OTC: NWACQ) between April 21, 2005 and September 14, 2005
inclusive (the "Class Period") seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The action, numbered 05-CV-10653, is pending before the
Honorable Richard J. Holwell in the United States District Court
for the Southern District of New York against defendants Alfred
A. Checchi (Director), Bernard L. Han (CFO), Douglas M.
Steenland (CEO, President and Director) and Gary L. Wilson
(Chairman). Northwest is not named as a defendant in this action
solely because it is in chapter 11 bankruptcy.
The complaint alleges, among other things, that certain
Northwest insiders sold their Northwest securities for proceeds
in excess of $30 million while in possession of nonpublic
information regarding Northwest's plans to file for chapter 11
bankruptcy. The complaint further alleges that defendants made
materially false and misleading statements, throughout the class
period, with respect to Northwest's prospects. Specifically, the
complaint alleges, defendants maintained that Chapter 11
bankruptcy was "a possibility" and that the Northwest might have
"to consider" filing for bankruptcy if certain conditions were
not met. The complaint further alleges that defendants'
statements were materially false and misleading not only because
defendants failed to disclose that the Company's Chapter 11
bankruptcy filing was already imminently anticipated and being
planned for, but also because they failed to disclose that
filing for Chapter 11 protection was, in fact, a strategy that
defendants had adopted at least as early as April 2005 because
they viewed bankruptcy reorganization as the only way to dump
the crushing burden of Northwest's pension obligations on the
Pension Benefit Guaranty Corp., impose their will upon
Northwest's union to obtain givebacks of at least $1.1 billion,
and thereby compete with lower-cost discount carriers such as
JetBlue Airways, and so-called "legacy" rivals such as UAL Corp.
and US Airways Group Inc., that had already offloaded their
pension obligations and otherwise achieved significant savings
through bankruptcy reorganization.
The Company, on September 14, 2005, announced that it had filed
a voluntary petition for relief under Chapter 11, title 11,
United States Code, 11 U.S.C. sections 101, et seq. (the
"Bankruptcy Code"). On this news the Company's shares, which had
been trending downward, fell from a closing price of $1.87 on
September 14, 2005 to an opening price of $0.86 on September 15,
2005. The stock was delisted on September 26, 2005 but continued
to trade over-the-counter as a penny stock. As a result of
defendants' wrongful acts and omissions, and this material
erosion and decline in the market value of Northwest securities,
plaintiffs and other class members who purchased such Northwest
securities during the Class Period have suffered significant
losses and damages.
The complaint further alleges that, during the months preceding
the bankruptcy, insiders sold their Northwest shares to
unwitting investors for proceeds in excess of $30 million under
highly suspicious circumstances that raise the inference that,
at the time of the sales, defendants had material nonpublic
information that the Company had already planned to file for
bankruptcy and that the filing was imminently expected.
For more details, contact Steven G. Schulman, Peter E. Seidman
and Andrei V. Rado of Milberg Weiss Bershad & Schulman, LLP, One
Pennsylvania Plaza, 49th fl., New York, NY 10119-0165, Phone:
(800) 320-5081, E-mail: sfeerick@milbergweiss.com, Web site:
http://www.milbergweiss.com.
SERACARE LIFE: Abbey Gardy Lodges Securities Fraud Suit in CA
-------------------------------------------------------------
The law firm of Abbey Gardy, LLP, filed a class action lawsuit
in the United States District Court for the Southern District of
California on behalf of a class (the "Class") of all persons who
purchased or acquired securities of SeraCare Life Sciences, Inc.
("SeraCare" or the "Company")(Nasdaq:SRLS) between May 3, 2005
and December 19, 2005 inclusive (the "Class Period").
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period thereby
artificially inflating the price of SeraCare common stock. The
Complaint names as defendants SeraCare, Barry D. Plost, the
Company's Chairman, Michael F. Crowley, Jr., the Company's
President and Chief Executive Officer, Craig A. Hooson, the
Company's CFO, and Robert J. Cresci, a director.
The complaint alleges that throughout the Class Period
defendants directly participated in an accounting fraud, which
materially overstated the Company's financial results in
violation of Generally Accepted Accounting Principles ("GAAP").
Specifically, the complaint charges that throughout the Class
Period:
(1) defendants used improper revenue recognition policies
and practices;
(2) defendants failed to properly account for and value
inventory;
(3) defendants failed to prevent certain Board members from
exerting undue influence on the financial reporting
process of the audit process; and
(4) defendants failed to maintain adequate internal
controls and as a result were unable to ascertain the
true financial condition of the Company.
On December 20, 2005, the Company announced that the its
independent auditors raised concerns with respect to the
Company's financial statements, accounting documentation and the
ability to rely on representations of the Company's management."
Specifically, the auditor questioned certain of the company's
revenue-recognition accounting policies, the valuation of the
company's inventory and raised concerns regarding the perception
that a few members of the board were exerting "undue influence"
on the Company's financial reporting. On this news, SeraCare
shares fell from $19.30 to $10.04.
For more details, contact Susan Lee or Mark C. Gardy, Esq. of
Abbey Gardy, LLP, 212 East 39th St., New York, NY 10016, Phone:
(212) 889-3700 or (800) 889-3701 (Toll Free), E-mail:
slee@abbeygardy.com.
SERACARE LIFE: Federman & Sherwood Lodges Securities Suit in CA
---------------------------------------------------------------
The law firm of Federman & Sherwood initiated a class action
lawsuit in the United States District Court for the Southern
District of California against SeraCare Life Sciences, Inc.
(Nasdaq: SRLS).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The class period is
from May 3, 2005 through December 19, 2005.
For more details, contact William B. Federman of FEDERMAN &
SHERWOOD, 120 N. Robinson, Suite 2720, Oklahoma City, OK 73102,
Phone: (405) 235-1560, Fax: (405) 239-2112, E-mail:
federman@aol.com, E-mail: http://www.federmanlaw.com.
SERACARE LIFE: Schiffrin & Barroway Lodges Securities Suit in CA
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP, commenced a class
action lawsuit in the United States District Court for the
Southern District of California on behalf of all securities
purchasers of SeraCare Life Sciences, Inc. (Nasdaq: SRLSE)
("SeraCare" or the "Company") from February 9, 2005 through
December 19, 2005, inclusive (the "Class Period").
The complaint charges SeraCare and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. SeraCare engages in the manufacture and provision of
biological products and services for diagnostic, therapeutic,
drug discovery and research organizations worldwide. The
complaint alleges that defendants' Class Period representations
regarding SeraCare's financial statements, business, and
prospects were materially false and misleading when made.
Specifically, the defendants failed to disclose:
(1) that the Company, in violation of its own revenue
recognition accounting policies and practices,
improperly recognized revenue which served to
materially inflate the Company's financial results;
(2) that the accounting for and valuation of the Company's
inventory was faulty;
(3) that the defendants failed to prevent certain board
members from exerting undue influence on the Company's
financial reporting process and on the audit process;
(4) that throughout the Class Period, the timeliness,
quality and completeness of the Company's
implementation and testing of its internal controls
over financial reporting was lacking, such that the
Company lacked adequate internal control; and
(5) that the Company's financial statements were presented
in violation of Generally Accepted Accounting
Principles ("GAAP").
On December 14, 2005, SeraCare filed a current report on Form 8-
K wherein it stated that the Company was unable, without
unreasonable effort and expense, to file its annual report on
Form 10-K for its fiscal year ended September 30, 2005. Then, on
December 20, 2005, before the market opened, the Company
announced that "the chairman of the Company's audit committee
has received a letter from Mayer Hoffman McCann P.C. (MHM), the
Company's independent auditors, in which MHM raised concerns
with respect to the Company's financial statements, accounting
documentation and the ability of MHM to rely on representations
of the Company's management."
In reaction to this announcement, the price of SeraCare stock
fell dramatically, from $19.30 per share on December 19, 2005 to
$10.04 per share on December 20, 2005, a one-day drop of 47.98
percent on unusually heavy trading volume.
For more details, contact Darren J. Check, Esq. or Richard A.
Maniskas, Esq., of Schiffrin & Barroway, LLP, 280 King of
Prussia Road, Radnor, PA 19087, Phone: 1-888-299-7706 or
1-610-667-7706, E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
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Class Action Reporter is a daily newsletter, co-published by
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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