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/raid1/www/Hosts/bankrupt/CAR_Public/060123.mbx C L A S S A C T I O N R E P O R T E R Monday, January 23, 2006, Vol. 8, No. 16 Headlines ALLIANCE GAMING: Moves for Summary Judgment in NV Stock Lawsuit ALLSTATE INSURANCE: Settles Overcharging Suit Filed by Drivers ALTRIA GROUP: Cigarette Smokers Demand Lung Cancer Screening BURLINGTON COAT: CA Court Gives Preliminary OK to Overtime Suit C8 SCIENCE: Launches Research on C-8's Effect on Human Health CARROLL INDEPENDENT: Facing $1B Suit for Polluting Water Source CENTENNIAL COMMUNICATIONS: Faces Unfair Trade Practices Lawsuits CINTAS CORPORATION: CA Court Orders Arbitration for Houston Case CINTAS CORPOARTION: EEOC Intervenes in Serrano Racial Bias Case CINTAS CORPORATION: EEOC, DFEH Administrative Action Terminated DARDEN RESTAURANTS: Provides Update on CA Settlement's Progress FISHER-PRICE: Recalls 614T Chairs Due to Strangulation Hazard GREAT ATLANTIC: Nets Share in NY Visa/Mastercard Antitrust Deal JOHNSON & JOHNSON: Facing Class Action over Price Overcharging MERIX CORPORATION: OR Court Stays Proceedings in Derivative Suit MIZUNO USA: Recalls Gloves Containing Potentially Harmful Mold NATIONAL SEMICONDUCTOR: Discovery Proceeds in CA Injury Lawsuit OHIO: German Camera Maker Held Liable in Anti-camera Lawsuit OREGON STATE: Court to Hear AOC's Complaints Later This Month OWENS CORNING: MA Suit Status Conference Set For November 8,2005 ROBERTSON STEPHENS: Settlement Hearing Set February 10, 2006 SOLECTRON CORPORATION: CA Stock Settlement Hearing Set for March SYNTACE USA: Recalls 2.3T Handlebar Stems Due to Injury Hazard TELSTRA GROUP: Facing AU$300M Suit for Disclosure Rules Breach THE OLD LINE: NM County Court OKs Class in Policyholders' Suit UNITED STATES: EEOC Ordered to Pay Record $1M to Pasadena Firm WESTPOINT CORPORATION: Funds' Collapse May Give Rise to Lawsuits WORLDCOM INC.: Provides Updates on "Right-of-Way Litigation" New Securities Fraud Cases FARO TECHNOLOGIES: Wechsler Harwood Files Securities Fraud Suit SFBC INTERNATIONAL: Hanzman & Criden Files Securities Fraud Suit SFBC INTERNATIONAL: Mager & Goldstein Files FL Securities Suit ********* ALLIANCE GAMING: Moves for Summary Judgment in NV Stock Lawsuit --------------------------------------------------------------- Alliance Gaming Corporation moved for a summary judgment in the consolidated securities class action lawsuit filed against it and certain of the Company's officers in the United States District Court for the District of Nevada. Company officers named in the suit are: (1) Robert Miodunski, (2) Robert Saxton, (3) Mark Lerner, and (4) Steven Des Champs The complaint alleges violations of the Securities Exchange Act of 1934 stemming from revised earnings guidance, declines in the stock price, and sales of stock by insiders. The court has also appointed lead counsel and lead plaintiff, although plaintiffs have yet to file a consolidated suit. Recently, the plaintiffs filed a consolidated complaint, all as is customary in such cases. The Company and the other defendants then moved for summary judgment, and that motion is currently being briefed. The first identified complaint is styled "Tyler, et al. v. Alliance Gaming Corporation, et al., Case No. 04-CV-821" The class period in the suit is from January 15, 2004 to June 7, 2004. The plaintiffs firms involved in this or similar litigation are: (1) Lerach Coughlin Stoia & Robbins LLP (San Francisco) Mail: 100 Pine Street, Suite 2600, San Francisco, CA, 94111 Phone: 415-288-4545 Fax: 415-288-4534 or E-mail: info@lcsr.com; (2) Geller Rudman, PLLC Mail: 197 South Federal Highway, Suite 200, Boca Raton, FL, 33432 Phone: 561-750-3000 Fax: 888-262-3131 E-mail: info@geller-rudman.com; (3) Brian Felgoise, 230 South Broad St., Suite 404, Philadelphia, PA, 19102, Phone: 215.735.6810, Fax: 215/735.5185; (4) Brodsky & Smith, LLC, 11 Bala Ave., Suite 39, Bala Cynwyd, PA, 19004, Phone: 610.668.7987, Fax: 610.660.0450, E-mail: esmith@Brodsky-Smith.com; (5) 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; (6) Wechsler Harwood, LLP, 488 Madison Ave., 8th Floor, New York, NY, 10022, Phone: 212.935.7400, Fax: info@whhf.com; and (7) Wolf Haldenstein Adler Freeman & Herz, LLP, 270 Madison Ave., New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, E-mail: newyork@whafh.com. ALLSTATE INSURANCE: Settles Overcharging Suit Filed by Drivers -------------------------------------------------------------- Allstate Insurance settled a Madison County class action over high-risk insurance sold to drivers without admitting wrongdoing, according to Madison St. Claire Record. The case, which was filed by Priscilla Spencer and seven other plaintiffs in 2002, claims the insurer improperly added charges to premiums and denied discounts to clients. The defendant is represented by Roger Heidenreich of Sonnenschein Nath and Rosenthal, St. Louis; the plaintiffs by Stephen Tillery of St. Louis and Jay Angoff of Jefferson City, Mo. Mr. Tillery's team will receive 29% of the settlement, of which each plaintiff will receive $5,000. Circuit Judge Nicholas Byron set a May 24 hearing on a joint motion for approval. ALTRIA GROUP: Cigarette Smokers Demand Lung Cancer Screening ------------------------------------------------------------ Philip Morris USA is facing a federal class action suit filed by a group of heavy Marlboro smokers demanding tests for early detection of lung cancer, Reuters reports. The lawsuit is filed in U.S. District Court in Brooklyn on behalf of current and former Marlboro smokers over 50 years old who smoked a pack or more a day for 20 years. The plaintiffs want an annual low-dose CT scan of the chest, which is used to minimize cancer-causing side effects of an actual CT scan. Studies indicate that a low-dose CT scan can help in the early detection of cancer, although this finding remains to be firmly established. Annual scans cost about $500 each, according to Jerome Block, a New York attorney representing the plaintiffs. Whereas, the class size is about "tens of thousands." The plaintiffs, from New York, are not seeking compensatory or punitive damages, the report said. According to a spokesman for Altria Group Inc., the parent of Philip Morris, his company has not seen the lawsuit. The suit is styled, "Caronia et al. v. Philip Morris USA, Inc., Case No. 1:06-cv-00224-JBW-SMG," filed in the United States District Court for the Eastern District of New York, under Jack B. Weinstein with referral to Judge Steven M. Gold. Representing the Plaintiff/s are, Steven J. Phillips of Levy, Phillips & Konigsberg, LLP, 800 Third Ave., 13th Floor, New York, NY 10022, Phone: (212) 605-6200, E-mail: sphillips@lpklaw.com. BURLINGTON COAT: CA Court Gives Preliminary OK to Overtime Suit --------------------------------------------------------------- The Superior Court of California for the County of Alameda granted preliminary approval to a settlement for class action lawsuit filed against Burlington Coat Factory Warehouse Corporation. The plaintiff, who is a former Company employee, filed the putative class action styled, "Lewis v. Burlington Coat Factory Warehouse Corporation," on behalf of himself and certain current and former management-level employees at the Company's California stores. The plaintiff alleges that the Company violated a California state law by classifying these employees as "exempt" managerial/executive employees for purposes of the payment of overtime compensation and failing to pay them the overtime premium required for non-exempt employees. The lawsuit also claims that the Company failed to provide employees with meal and rest periods required under California law. In his complaint, the plaintiff is seeking certification as a class, damages and penalties in unspecified amounts, statutory damages, restitution, disgorgement, injunctive and declaratory relief, and costs of litigation, including attorney fees. The Company filed an answer denying the claims and asserting various affirmative defenses on December 22, 2004. On July 22, 2005, the Company entered into an agreement with the plaintiffs to settle this claim. The settlement is subject to court approval. On October 21, 2005, the Court granted preliminary approval to the settlement. C8 SCIENCE: Launches Research on C-8's Effect on Human Health ------------------------------------------------------------- The three members of the C-8 Science Panel, chosen to determine whether a probable link exists between C-8 and human disease, will be in Parkersburg, WV, to announce the onset of their research on Wednesday, Jan. 25, 2006 at 8:30 a.m. at the Wingate Inn. The Science Panel is part of a class action settlement of a lawsuit involving releases of a chemical known as C-8 from DuPont's Washington Works in Wood County, West Virginia. The Science Panel will conduct a series of community epidemiology studies and evaluate an ongoing study of DuPont's workers. The court also approved Plaintiffs' decision to use settlement funds for a separate C-8 Health Project, under the direction of Brookmar, Inc. The Project involves collection of data from class members including C-8 blood levels, clinical blood tests, as well as medical and demographic history. This data set represents a portion of what the Science Panel will evaluate to answer the question of whether a probable link exists between C- 8 and human disease. The C-8 Health Project is not the Science Panel's community study. Under the terms of the settlement, both parties agreed to each Science Panelist and each is independent from DuPont and Plaintiffs. After several months of interviews, the parties selected Drs. Savitz, Fletcher & Steenland. Dr. Tony Fletcher is an environmental epidemiologist at the London School of Hygiene and Tropical Medicine, in the Public and Environmental Health Research Unit, and serves as President of the International Society for Environmental Epidemiology. Dr. Nelson Kyle Steenland is Professor at the School of Public Health at Emory University in Atlanta, Georgia. Prior to coming to Emory, he worked for 20 years at the National Institute for Occupational Safety and Health (NIOSH), which is part of CDC. Dr. David Savitz recently joined the Mount Sinai School of Medicine as Professor of Community and Preventive Medicine and as the Director of the Center of Excellence in Epidemiology, Biostatistics, and Disease Prevention. He is the author of the book, Interpreting Epidemiologic Evidence. Until recently, he was Professor and Chair of the Department of Epidemiology at the University of North Carolina School of Public Health. Each epidemiologist brings a history of specialized research in environmental and occupational exposures, and will bring unique perspectives to the study. For more information, contact Lisa Collins of C8 Science Panel (http://www.c8sciencepanel.org),Phone: +1-304-483-1355. CARROLL INDEPENDENT: Facing $1B Suit for Polluting Water Source --------------------------------------------------------------- Residents of Parkton in northern Baltimore County filed a $1 billion lawsuit against a fuel company, the operators of the gas station and store, and a property owner alleging toxic contamination of well water. Law firm Peter Angelos filed the suit in Baltimore County Circuit Court on Jan. 9 in behalf of three home owners Charles and Doris Belt, Craig and Patricia Timlin and Tony Hill. All live on Rayville Road in Parkton. The defendants are Middletown Road property owner Jerry Phillips, Carroll Independent Fuel Company, which leases the property, and Richard and Janet Wiser, who sublease the property and operate Wally's Citgo and Wally's Country Store. The case claims gasoline additive methyl tertiary butyl ether, MTBE, was discovered in well water at 11 of 26 homes near the station on Middletown Road. The pollutant they said contaminated their wells, caused health problems and will reduce property values. The substance was discovered in a monitoring well at Wally's Citgo in October. According to a recent test by the Maryland Department of the Environment two of 34 wells had alarming MTBE levels above 20 parts per billion. Each of the lawsuit's five counts asks for $200 million in punitive damages, and in excess of $25,000 for each plaintiff in actual damages, according to the report. The plaintiffs want a court-supervised trust fund to be established to monitor their health. They also want to receive damages for decreased property values, new water sources, and carbon filtration systems for their wells. A jury trail has been requested. John Phelps, one of three owners of Carroll Independent Fuel, insists the company complied with all the Maryland Department of the Environment's safety requirements. CENTENNIAL COMMUNICATIONS: Faces Unfair Trade Practices Lawsuits ---------------------------------------------------------------- Centennial Communications Corporation faces several lawsuits in which plaintiffs have alleged, depending on the case, breach of contract, misrepresentation or unfair practice claims relating to its billing practices, including rounding up of partial minutes of use to full-minute increments, billing send to end, and billing for unanswered and dropped calls. The plaintiffs in these cases have not alleged any specific monetary damages and are seeking certification as a class action. A hearing on class certification in one of these cases was held on September 2, 2003 in a state court in Louisiana. Subsequent to such hearing, a new judge was assigned to the case and the plaintiffs renewed their motion seeking class action status in December 2004. The decision of the court with respect to class certification is still pending. CINTAS CORPORATION: CA Court Orders Arbitration for Houston Case ---------------------------------------------------------------- Cintas Corporation faces a class action lawsuit styled, "Larry Houston, et al., v. Cintas Corporation," alleging racial discrimination. The suit was filed on August 3, 2005, in the United States District Court for the Northern District of California on behalf of African-American managers. On November 22, 2005, the Court entered an order requiring the named plaintiffs in the "Houston" lawsuit to arbitrate all of their claims for monetary damages. The suit is styled, "Houston et al v. Cintas Corporation, Case No. 3:05-cv-03145-JSW," filed in the United States District Court for the Northern District of California, under Judge Jeffrey S. White. Representing the Plaintiff/s is Roberta L. Steele of Goldstein, Demchak, Baller, Borgen & Dardarian, 300 Lakeside Drive, Suite 1000, Oakland, CA 94612, Phone: (510) 763-9800, Fax: 510 835-1417, E-mail: RLS@gdblegal.com. Representing the Defendant/s is Nancy L. Abell of Paul, Hastings, Janofsky & Walker, LLP, 555 South Flower St., 25th Floor, Los Angeles, CA 90071-2371, Phone: 213 683-6162, Fax: (213) 627-0705, E-mail: nancyabell@paulhastings.com. CINTAS CORPOARTION: EEOC Intervenes in Serrano Racial Bias Case --------------------------------------------------------------- The United States Equal Employment Opportunity Commission (EEOC) intervened in the class action lawsuit styled, "Mirna E. Serrano, et al., v. Cintas Corporation," which is alleging racial discrimination, and is seeking relief damages and fees. The suit was filed on May 10, 2004, in the United States District Court for the Eastern District of Michigan, Southern Division on behalf of female service sales representative job applicants at all Company locations in Michigan. On September 6, 2005, a Magistrate Judge granted plaintiffs' motion for leave to file a second amended complaint to expand the lawsuit to a nationwide claim. On November 15, 2005, the EEOC intervened in "Serrano" to participate in the lawsuit in continuation of an EEOC charge filed on April 17, 2000, by Mirna Serrano with the EEOC Detroit District office. The suit is styled, "Serrano v. Cintas Corporation, Case No. 4:04-cv-40132-PVG-DAS," filed in the United States District Court for the Eastern District of Michigan, under Judge Paul V. Gadola with referral to Judge Donald A. Scheer. Representing the Plaintiff/s are: (1) Robert K. Dawkins of Equal Employment Opportunities Commission (Detroit), 477 Michigan Ave., Suite 865, Detroit, MI 48226, Phone: 313-226-4600, Fax: 313-226- 2778, E-mail: robert.dawkins@eeoc.gov; (2) James K. Fett and Lawrence A. Fields of Fett & Fields (Pinckney), 805 E. Main St., Pinckney, MI 48169-3266, Phone: 734-954-0100, E-mail: jim@frflaw.com and larry@frflaw.com; (3) Rachel J. Geman and Gena E. Wiltsek of Lieff, Cabraser, (New York), 780 Third Ave., 48th Floor, New York, NY 10017-2024, Phone: 212-355-9500, Fax: 212-355-9592, E- mail: rgeman@lchb.com and gwiltsek@lchb.com; and (4) William G. Tishkoff of Tishkoff & Assoc. (Ann Arbor), 407 N. Main, Suite 200, Ann Arbor, MI 48104-1158, Phone: 734-663-4077, E-mail: will@tishkofflaw.com. Representing the Defendant/s is Gregory M. Utter of Keating, Muething, (Cincinnati), One East Fourth St., Suite 1400, Cincinnati, OH 45202, Phone: 513-579-6540, Fax: 513-579-6457, E- mail: gmutter@kmklaw.com. CINTAS CORPORATION: EEOC, DFEH Administrative Action Terminated --------------------------------------------------------------- An administrative action filed with the United States Equal Employment Opportunity Commission's (EEOC) Washington, D.C. office and the California Department of Fair Employment and Housing (DFEH) by James Morgan against Cintas Corporation was terminated by the federal agency. Alleging racial discrimination in compensation and training opportunities the action was originally filed on December 15, 2004. On July 15, 2005, the EEOC terminated the processing of an administrative action. On August 3, 2005, Mr. Morgan joined the class action lawsuit, "Robert Ramirez, et al., v. Cintas Corporation," which filed in the United States District Court for the Northern District of California, under Judge Jeffrey S. White. On November 2, 2005, the Court entered an order requiring Mr. Morgan to arbitrate all of his claims for monetary damages. The suit is styled "Ramirez et al v. Cintas Corporation, case no. 3:04-cv-00281-JSW," filed in the United States District Court for the Northern District of California, under Judge Jeffrey S. White. Representing the plaintiffs is Paul Strauss of Miner Barnhill & Galland, 14 W. Erie Street, Chicago, IL 60610, Phone: 312-751-1170, E-mail: pstrauss@lawmbg.com. Representing the Company is Rachael Rowe, 6800 Cintas Blvd., Cincinnati, OH 45262, Phone: 513-754-3640. DARDEN RESTAURANTS: Provides Update on CA Settlement's Progress --------------------------------------------------------------- Darden Restaurants, Inc. is providing an update on the settlement reached in two class actions filed against it Superior Court of Orange County, California, alleging violations of the state's wage and hour laws. In March 2002 and March 2003, three current and former hourly restaurant employees filed two purported class actions against the Company, alleging violations of California labor laws with respect to providing meal and rest breaks. Although the Company continues to believe it provided the required meal and rest breaks to its employees, to avoid potentially costly and protracted litigation, the Company agreed during the second quarter of fiscal 2005 to settle both lawsuits and a similar case filed in Sacramento County, for approximately $9.5 million. Terms of the settlement, which do not include any admission of liability by the Company, received preliminary judicial approval, and claims administration is underway. During the quarter ended November 27, 2005, the Company paid $3,720 towards the settlement of these claims. The remaining $5,780 was paid in December 2005 and is included in other current liabilities at November 27, 2005. FISHER-PRICE: Recalls 614T Chairs Due to Strangulation Hazard ------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Fisher-Price, of East Aurora, N.Y., is voluntarily recalling about 614,000 units of Fisher-Pricer Laugh & Learn Musical Learning Chairs. According to the Company, a child can become lodged between the seatback and side table of the chair, possibly leading to an entrapment of the neck. This can pose a strangulation hazard to young children. Fisher-Price has received three reports of young children getting their necks lodged between the seatback and the side table of the toy, including one report of a child receiving a welt on the neck. The recalled Laugh & Learn Musical Learning Chair is a plastic infant toy that measures about 17 inches high. It plays music and teaches children numbers and letters. It also features a blue chair with four green plastic legs and a side table with a purple base and white top. The table holds a clock, book, and a lamp. Smiley faces are displayed on the lamp and seat back. "Fisher-Price" is written on the front of the chair. The packaging states that the toy is intended for children 12 months through 36 months of age. The model numbers are H4609, H7167 through H7173, H8157, H8998, and J0272 through J0275 can be found on the underside of the seat of the chair. Pictures of recalled product: (1) http://www.cpsc.gov/cpscpub/prerel/prhtml06/06068.jpg Manufactured in China, the chairs were sold at all discount department and toy stores nationwide from May 2005 through January 2006 for about $27. Consumers should take the recalled musical chair away from children immediately and contact Fisher-Price to receive a free repair kit that contains a plastic piece that connects in between the seatback and side table, preventing the possibility of entrapment. Consumer Contact: Contact Fisher-Price at (866) 552-3914 anytime or visit the firm's Web site: http://www.service.fisher- price.com. Consumers can also view a video clip about this recall (standard version http://www.cpsc.gov/vnr/asfroot/fpchair.asxor a higher quality version http://www.cpsc.gov/vnr/asfroot/fpchairhq.asx- broadband connection recommended) (transcript http://www.cpsc.gov/trans/fpchair.html).This is in "streaming video" format (http://www.cpsc.gov/streaming.html). Various sounds of the Laugh & LearnT Musical Learning ChairT = http://www.cpsc.gov/vnr/audio/06068.mp3(transcript http://www.cpsc.gov/trans/fisheraudio.html) GREAT ATLANTIC: Nets Share in NY Visa/Mastercard Antitrust Deal --------------------------------------------------------------- In connection with a settlement reached in New York for the VISA/Mastercard antitrust class action litigation, Great Atlantic & Pacific Tea Co. Inc. is entitled to a portion of the settlement fund that will be distributed to class members. Members of the class action lawsuit consisted of all businesses and organizations in the United States that accepted Visa and MasterCard debit and credit cards for payment at any time during the period October 25, 1992 to June 21, 2003. The class plaintiffs claimed that, through their "Honor All Cards" policies, Visa and MasterCard forced merchants to accept Visa and MasterCard signature debit card transactions at supracompetitive prices. In April 2003, Visa and MasterCard settled with the plaintiffs' class by agreeing to pay $3.05 billion over time into a settlement fund. Pursuant to our initial review of our historical records as well as estimates provided by the Claims Administrator, we recorded an estimated pretax recovery of $1.5 million as a credit to "Selling, general and administrative expense" in our Consolidated Statements of Operations during the 12 and 40 weeks ended December 3, 2005. During the fourth quarter of fiscal 2005 and into fiscal 2006, we will continue to work with the Claims Administrator to ensure that all monies owed to the Company in connection with this litigation are received. This process may result in additional recoveries being recorded in future periods. The suit is styled "In re Visa/MasterCard Antitrust Litigation, case no. 1:03-md-01575-JG-RLM," filed in the United States District Court for the Eastern District of New York, under Judge John Gleeson. Representing the Company are Randi Dale Adelstein, Gary R. Carney, Jr., and Kenneth Anthony Galloe of Paul, Weiss, Rifkind, Wharton & Garrison, LLP, 1285 Avenue of the Americas, New York, NY 10019-6064, Phone: 212-373-3000, E- mail: radelstein@paulweiss.com, gcarney@paulweiss.com, kgallo@paulweiss.com. Representing the plaintiffs are: (1) Anne M. Lockner, K. Craig Wildfang of Robins, Kaplan, Miller & Ciresi, L.L.P., 2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, MN 55402-2015, Phone: (612) 349-8500, Fax: (612) 339-4181, E-mail: amlockner@rkmc.com or kcwildfang@rkmc.com; (2) David P. Germaine, Daar & Vanek P.C., 225 W. Washington, 18th Floor, Chicago, IL 60606, Phone: 312- 474-1400, Fax: 312-474-1410, E-mail: dgermaine@daarvanek.com; (3) Joseph Michael Vanek, Daar, Fisher, Kanaris & Vanek, P.C., 200 South Wacker Drive, Suite 3350, Chicago, IL 60606, Phone: 312-474-1400, E-mail: jvanek@daarvanek.com; (4) Mitchell H. Macknin, Bruce S. Sperling of Sperling & Slater, P.C., 55 W. Monroe Street, Suite 3300, Chicago, IL 60603, Phone: 312-641-3200, Fax: 312-641-6492, E- mail: mhmacknin@sperling-law.com, bss@sperling-law.com; (5) Jeffrey S. Cashdan, Dwight J. Davis, Joseph J. Loveland, Reginald Smith of King & Spalding LLP, 191 Peachtree Street, Atlanta, GA 30303-1763, Phone: 404- 572-4600, E-mail: jcashdan@kslaw.com, ddavis@kslaw.com, jloveland@kslaw.com or rsmith@kslaw.com; and (6) Mark L. Weyman, Anderson, Kill, Olick & Oshinsky P.C., 1251 Avenue of the Americas, New York, NY 10020, Phone: (212) 279-1000, E-mail: mweyman@andersonkill.com. JOHNSON & JOHNSON: Facing Class Action over Price Overcharging -------------------------------------------------------------- Federal Judge Patti B. Saris in Boston intends to certify a nationwide class action against four big drugs company for defying pricing rules set out by the Average Wholesale Price formula. According to Bloomberg News, Johnson & Johnson, Bristol-Myers Squibb Co., AstraZeneca Plc and GlaxoSmithKline Plc, stands to face repayments worth hundreds of millions of dollars should they be found guilty of overcharging. The government uses the Average Wholesale Price formula to set reimbursements from federal health programs. Plaintiffs claim the companies artificially inflated the figures to consumers and third-party payers. The judge excluded drugs made by Schering-Plough Corp., for lack of evidence it caused anyone harm. The report said the decision only affects companies that make drugs that must be administered by physicians. Tom Sobol, a managing partner at Hagens Berman LLP in Boston, is acting in behalf of consumer groups such as the Florida Alliance of Retired Americans who have complained against the drugmakers practices. The groups represent patients, including the Congress of California Seniors and the states of Illinois, Kentucky, New Jersey, Wisconsin, Minnesota, Nevada and Montana. The suit is styled, "In re Average Wholesale Price Litigation, Case No. 1:01-cv-12257-PBS," filed in the United States District Court in Massachusetts, under Judge Patti B. Saris. Representing the Plaintiff/s are, David J. Bershad and J. Douglas Richards of Milberg Weiss Bershad Hynes & Lerach LLP, One Pennsylvania Plaza, 49th Floor, New York, NY 10119, Phone: 212-594-5300. Representing the Defendant/s are, Daniel E. Reidy, Jeremy P. Cole, Jessie A. Witten, Tina M. Tabacchi, and Toni-Ann Citera of Jones Day, 77 West Wacker Drive, Chicago, IL 60601-1692, Phone: 312-782-3939, E-mail: tmtabacchi@jonesday.com, jawitten@jonesday.com, tcitera@jonesday.com; and Jeffrey I. Weinberger, Munger Tolles & Olson, 355 S. Grand Avenue, Suite 3500, Los Angeles, CA 90071- 1560, Phone: 213-683-9100. MERIX CORPORATION: OR Court Stays Proceedings in Derivative Suit ---------------------------------------------------------------- The Multnomah County Circuit Court in Oregon stayed all proceedings on pending derivative litigation against Merix Corporation. On July 2, 2004, two derivative lawsuits were filed in the Circuit Court for the State of Oregon, County of Multnomah, against certain of the Company's officers and directors based on the same allegations made in the class action lawsuit styled, "In re: Merix Securities Litigation, Lead Case No. CV 04-826- MO." The Company is named as a nominal defendant in these derivative lawsuits, which were recently consolidated under the common caption, "In re: Merix Corporation Derivative Litigation, Lead Case No. 0407-06807." On April 29, 2005, plaintiffs filed a consolidated shareholder derivative complaint in which they allege breaches of fiduciary duties and mismanagement by the defendants. Plaintiffs seek unspecified damages from the defendants, purportedly on behalf of the Company, as well as the derivative plaintiffs' attorneys' fees and costs. On August 31, 2005, the United States District Court for the District of Oregon, the federal court hearing the class action lawsuit granted a motion to stay discovery in this state-court derivative action. On September 13, 2005, the state court stayed all proceedings in the derivative lawsuit pending further developments in the federal class action lawsuit, including all proceedings on a motion that the defendants filed on July 7, 2005 to dismiss the consolidated shareholder derivative complaint. MIZUNO USA: Recalls Gloves Containing Potentially Harmful Mold -------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Mizuno USA, Inc., of Norcross, Ga. voluntarily recalled 12,800 Mizuno "Gamer" baseball gloves. Consumers should stop using recalled products immediately unless otherwise instructed. These gloves could contain aspergillus mold. Such mold usually does not affect healthy individuals, but could cause respiratory or other infections in individuals with chronic health problems or in individuals who have impaired immune systems. So far no such case has been reported. The recall includes all Mizuno "Gamer" baseball gloves. These gloves have the word "Gamer" printed on the palm of the gloves. They are sold at sporting goods stores nationwide from July 2005 through October 2005 for about $80. The gloves were manufactured in the Philippines. Consumers should stop using the gloves and contact Mizuno USA, Inc. for information on how to receive a free replacement baseball glove. Consumer Contact: Mizuno USA, Inc., Phone: (800) 966-1211 between 8:30 a.m. and 5:30 p.m. ET Monday through Friday. NATIONAL SEMICONDUCTOR: Discovery Proceeds in CA Injury Lawsuit --------------------------------------------------------------- Discovery is proceeding in the class action filed against National Semiconductor Corporation and a number of its suppliers in California Superior Court, alleging damages for personal injury. Plaintiff James Harris filed the suit in January 1999 on behalf of the Company's former and present employees, alleging that cancer and/or reproductive harm were caused to employees as a result of alleged exposure to toxic chemicals while working at the company. Plaintiffs claim to have worked at sites in Santa Clara and/or in Greenock, Scotland. In addition, one plaintiff claims to represent a class of children of company employees who allegedly sustained developmental harm as a result of alleged in utero exposure to toxic chemicals while their mothers worked at the Company. Although no specific amount of monetary damages is claimed, plaintiffs seek damages on behalf of the classes for personal injuries, nervous shock, physical and mental pain, fear of future illness, medical expenses and loss of earnings and earnings capacity. The court has required the Scottish employees to seek their remedies in Scottish courts. The court has also denied plaintiffs' motion for certification of a medical monitoring class. Discovery in the case is proceeding. OHIO: German Camera Maker Held Liable in Anti-camera Lawsuit ------------------------------------------------------------ Jefferson County Common Pleas Judge David E. Henderson recently refused to free German speed camera vendor Traffipax from liability in an ongoing Steubenville, Ohio anti-camera lawsuit, theNewspaper.com reports. The case may be certified as a class action in a hearing next Monday, the report said. A final hearing on the case is scheduled March 9. Attorney Gary M. Stern filed the class action lawsuit on Nov. 23, 2005 on behalf of his wife, who received two speeding tickets. Mr. Stern claims that the cameras are unconstitutional for a number of reasons among those are that motorists don't have the right to appeal. Court documents pointed out that the traffic cameras read the speed of cars driving by, and if you are in excess of the speed limit, you are mailed an $85 ticket, an earlier Class Action Reporter story (November 24, 2005) reported. Mr. Stern claims that his wife was not driving the vehicle at the time of the alleged offense and charges that the city failed to follow the terms of its own ordinance which required fourteen days of advance notice before installing the cameras. In addition, he also cites constitutional problems with the ordinance, claiming "Persons who wish to contest their citations are limited to a hearing that is not subject to any prescribed rules of procedure or evidence, and is not heard by an impartial tribunal, but is decided by a police officer employed by the very department that issued the citation, whose decision is final and not subject to judicial review or further appeal, all of which violate the due process rights guaranteed by the Ohio and the United States constitutions." Jefferson County Common Pleas Judge David E. Henderson in December issued a preliminary injunction against the speed camera program in city of Steubenville, Ohio, TheNewspaper.com reported (Class Action Reporter, Dec. 9, 2005). As a result of that injunction, the city shut down the camera system and those who have received tickets was freed of liability unless the case is resolved in the city's favor. Since September 23, Steubenville has collected $225,000 in revenue from the camera program, which issued the $85 tickets to anyone going just 5 MPH over the speed limit. The suit is styled, "APRIL STERN v. THE CITY OF STEUBENVILLE, OHIO and TRAFFIPAX, INC., Case No. 05 CV 524," filed in the Court of Common Pleas of Jefferson County, Ohio, under Judge David E. Henderson. Representing the Plaintiff is GARY M. STERN of STERN, STERN & STERN CO., LPA, 108 South Fourth St., Steubenville, OH 43952, Phone: (740) 284-1211, Web site: http://www.sternlawyer.com/complaint.htm. OREGON STATE: Court to Hear AOC's Complaints Later This Month ------------------------------------------------------------- A federal court hearing on the lawsuit filed by patients' rights group against the Oregon State Hospital in Salem will be heard on Jan. 31, 2006, in Portland, according to Statesman Journal. The Oregon Advocacy Center filed the suit last month in behalf of forensic patients, whom advocates said endured unsafe conditions due to negligence of state officials. Meanwhile, the Legislative Emergency Board will consider a $9.1 million request to bolster forensic-program staffing and reduce the patient population that just might convince the group to settle the case. "If the E-Board does not provide the requested funds, it will pretty much rule out a settlement," Bob Joondeph, the executive director of OAC said. "If the money is approved, the case may settle before the hearing." The fund would allow 30 people to be added to the 122-year old hospital, develop community-based housing for 71 patients and carrying out plans to transfer 100 patients to new facilities. The suit is styled, "Jeanniton v. Oregon State Hospital, Case No. 3:05-cv-00656-HA," filed in the United States District Court for the District of Oregon, under Judge Ancer L. Haggerty. Representing the Plaintiff/s is D. Michael Dale of Law Offices of D. Michael Dale, P.O. Box 1032, Cornelius, OR 97113, Phone: (503) 357-8290, Fax: (503) 357-8290, E-mail: michaeldale@dmichaeldale.net. Representing the Defendant/s is Marc Abrams, State of Oregon, Department of Justice, 1162 Court St., NE Salem, OR 97301, Phone: (503) 947-4700, Fax: (503) 947-4791, E-mail: marc.abrams@state.or.us. OWENS CORNING: MA Suit Status Conference Set For November 8,2005 ---------------------------------------------------------------- A June 12, 2006 trail date was slated for the class action filed against certain of Owens Corning's current and former directors and officers that is pending in the United States District Court for the District of Massachusetts. The Company is not named in the suit. The suit, filed on April 30, 2001 and styled "John Hancock Life Insurance Company, et al. v. Goldman, Sachs Co., et al., CA No. 01-10729-RWZ," purports to be a securities class action on behalf of purchasers of certain unsecured debt securities of the Company in offerings occurring on or about April 30, 1998 and July 23, 1998. The complaint alleges that the registration statements pursuant to which the offerings were made contained untrue and misleading statements of material fact and omitted to state material facts which were required to be stated therein and which were necessary to make the statements therein not misleading, in violation of sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The amended complaint seeks an unspecified amount of damages or, where appropriate, rescission of the plaintiffs' purchases. The defendants filed a motion to dismiss the action on November 20, 2001. A hearing was held on this motion on April 11, 2002, and the Court issued a decision denying the motion on August 26, 2002. On March 9, 2004, the Court granted class certification as to those claims relating to written representations but denied certification as to claims relating to alleged oral representations. Mediation was conducted on November 2, 2005, at which mediation the plaintiffs and the underwriter defendants agreed to settlement terms. A status conference on this matter was held on November 8, 2005. A trial was scheduled to commence on June 12, 2006, as to the director and officer defendants. The suit is styled, "Hancock Mutual Life, et al v. Goldman Sachs & Co., et al, Case No. 1:01-cv-10729-RWZ," filed in the United States District Court for the District of Massachusetts under Jugde Rya W. Zobel. Representing the Defendant/s are, David A. Bunis, Daniel J. Cloherty and William H. Kettlewell, Dwyer & Collora, LLP, 12th Floor, 600 Atlantic Ave., Boston, MA 02210- 2211, Phone: 617-371-1000, Fax: 617-371-1037, E-mail: dbunis@dwyercollora.com, dcloherty@dwyercollora.com and wkettlewell@dwyercollora.com; and Richard L. Stone and Mark A. Strauss of Kirby, McInerney & Squire, LLP, 830 Third Ave., 10th Floor, New York, NY 10022, Phone: 212-371-6600, Fax: 212-751-2540. Representing the Defendant/s are, Timothy C. Blank, Joseph A. Tate and Kevin T. Kerns of Dechert, LLP, 200 Clarendon St., 27th Floor, Boston, MA 02116, Phone: 617-728- 7100, Fax: 617 426-6567, E-mail: timothy.blank@dechert.com; and John D. Donovan, Jr. of Ropes & Gray, LLP, One International Place, Boston, MA 02110, Phone: 617-951-7566, Fax: 617-951-7050, E-mail: jdonovan@ropesgray.com. ROBERTSON STEPHENS: Settlement Hearing set February 10, 2006 ------------------------------------------------------------ The United States District Court for the Southern District of New York will hold a fairness hearing for the proposed settlement in the matter, "Anthony V. DeMarco v. Robertson Stephens and Paul Johnson, Civil Action No. 03-C-590 (GEL). The case was brought on behalf of all persons who purchased shares or the common stock of Corvis Corporation (N/K/A Broadwing Corp.) during the period of August 22, 2000 through May 25 2001. The Hearing will be held on February 10, 2006, at 10:00 p.m., before the Honorable Gerard E. Lynch in Courtroom 6B of the United States Courthouse, 500 Pearl St., New York, NY 1007. Deadline for filing a proof of claim or any objections to the settlement is on January 27, 2006. For more details, contact Jack Zwick of Weiss & Lurie, 551 Fifth Ave., Suite 1600, New York, NY 10176, Phone: 212-682-3025 or (888) 593-4771, Fax: 212-682-3010, E-mail: info@wllawny.com; Patrick V. Dahlstrom of Pomerantz Haudek Block Grossman & Gross, Phone: (312) 377-1181, Fax: (312) 377-1184, E-Mail: pdahlstrom@pomlaw.com, Web site: http://www.pomerantzlaw.com; and Corvis/Robertson Stephens Securities Litigation, c/o/ Berdon Claims Administration, LLC, P.O. Box 9014, Jericho, NY 11753- 8914, Phone: (800) 766-3330, Fax: (516) 931-0810. SOLECTRON CORPORATION: CA Stock Settlement Hearing Set for March ---------------------------------------------------------------- A preliminary settlement with parties in the consolidated securities class action filed against Solectron Corporation and certain of its officers styled, "In re Solectron Corporation Securities Litigation, Case No. C-03-0986 CRB," is slated for a final approval hearing on March 3, 2006. On March 6, 2003, a putative shareholder class action lawsuit was filed in the United States District Court for the Northern District of California, 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 complaint alleged that the defendants issued false and misleading statements in certain press releases and SEC filings issued between September 17, 2001 and September 26, 2002. In particular, plaintiff alleged that the defendants failed to disclose and to properly account for excess and obsolete inventory in the former Technology Solutions business unit during the relevant time period. Additional complaints making similar allegations were subsequently filed in the same court, and pursuant to an order entered June 2, 2003, the Court appointed lead counsel and plaintiffs to represent the putative class in a single consolidated action. The Consolidated Amended Complaint, filed September 8, 2003, alleges an expanded class period of June 18, 2001 through September 26, 2002, and purports to add a claim for violation of Section 11 of the Securities Act of 1933, as amended, on behalf of a putative class of former shareholders of C-MAC Industries, Inc., who acquired Solectron stock pursuant to the October 19, 2001 Registration Statement filed in connection with Solectron's acquisition of C-MAC Industries, Inc. In addition, while the initial complaints focused on alleged inventory issues at the former Technology Solutions business unit, the Consolidated Amended Complaint adds allegations of inadequate disclosure and failure to properly account for excess and obsolete inventory at Solectron's other business units. The complaint seeks an unspecified amount of damages on behalf of the putative class. On June 14, 2004 the lead plaintiffs filed a Motion for Class Certification seeking to have the court declare this matter as a class action. The court heard the Motion on October 1, 2004 and granted the motion. In August 2005, the parties reached an agreement in principal to settle the litigation on terms not material to the Company. The parties are currently negotiating the terms of the formal written settlement agreement, which they expect to execute and file with the Court in November 2005. A settlement hearing is scheduled for March 3, 2006 to determine final approval of the settlement. The suit is styled, "In re Solectron Corporation Securities Litigation, Case No. C-03-0986 CRB," filed in the United States District Court for the Northern District of California, under Judge Charles R. Breyer. Representing the Defendant is Ellen H. Ehrenpreis, Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto CA 94304-1050 Phone: 650-493-9300 or by Fax: 650-565-5100. Plaintiff firms in this litigation are: (1) Cauley Geller Bowman Coates & Rudman, LLP (New York), 200 Broadhollow, Suite 406, Melville, NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173; (2) Green & Jigarjian LLP, 235 Pine Street, 15th Floor, San Francisco, CA, 94104, Phone: 415.477.6700, Fax: 415.477.6710; and (3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com. SYNTACE USA: Recalls 2.3T Handlebar Stems Due to Injury Hazard -------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Syntace USA, of Olney, Illinois, is voluntarily recalling about 2,300 units of F99 (Force 99) Bicycle Handlebar Stems. According to the Company, the recalled bicycle stems can crack or break under normal conditions, causing the rider to fall and suffer serious injury. No incidents or injuries have been reported. The recalled bicycle handlebar stem is black. Stems with production codes 01 03 through 45 04, and stems with no production code are included in this recall. The production code is the bottom set of numbers located on the end of the stem. Manufactured in Taiwan, the recalled products were sold at all bicycle dealers, mail order magazines and on the Internet from May 2003 through July 2005 for about $90. Remedy: Consumers should stop using bicycles equipped with the recalled handlebar stem immediately and contact Syntace for instructions to receive a free replacement stem and installation. Consumer Contact: For additional information, contact Crystal Trout at Syntace USA at (800) 448-3876, extension 233, between 8 a.m. and 4 p.m. CT Monday through Friday, or log onto http://www.syntaceusa.com- consumers also can e-mail the firm at syntaceusa@syntace.com or write to: Syntace USA, 1902 Miller Drive, Olney, Ill. 62450. TELSTRA GROUP: Facing AU$300M Suit for Disclosure Rules Breach -------------------------------------------------------------- Telstra Group shareholders filed a AU$300 million suit against the Australian telephone firm in a Federal Court in Sydney, alleging breach of stock exchange disclosure rules. According to AFX, the suit claims the company made selective disclosures by first briefing the government and journalists about its financial woes last year before informing the Australian stock exchange. Telstra is 51.8% owned by the government. Telstra's stock closed at $5 on August 10, the day before results were issued. It fell 18c on August 11, the day the results were released to market. Shares fell a further 24c between August 11, when analysts received information that the Australian Securities & Investments Commission (ASIC) found the rest of the market did not, around the time of the government briefing and September 7, when Telstra issued an earnings downgrade (Class Action Reporter, Dec. 20, 2005). Telstra then warned profits could fall by up to 10% in the year to June 2006 and that it had underinvested in capital expenditures during the previous three to five years. Shareholders who bought Telstra shares between the release of its annual results on Aug. 11 and the profit warning in the week of Sept. 5 claims they were overcharged for being kept in the dark about the firm's finances. Some 50 shareholders have raised such concern. Law firm Slater and Gordon said this could increase to several thousands, according to the report. Slater and Gordon Spokesman Michael Salmon said early estimates indicate shareholders were overcharged some AU$300 in the four- week period alone. The firm said anyone who bought Telstra shares between Aug. 11 and Sept. 7 is eligible to join the suit. THE OLD LINE: NM County Court OKs Class in Policyholders' Suit -------------------------------------------------------------- The Second Judicial District Court, Bernalillo County, New Mexico certified as a class action the lawsuit styled, "Lisa M. Enfield v. The Old Line Life Insurance Company of America, No. CV-2001-01367." The suit was filed one behalf of all present and former policyholders who purchased their policies from the Company, between January 1, 1980, and June 11, 2002, and who have, since February 23, 1995, paid their premiums on a monthly, quarterly or semi-annual basis. It alleges breach on contract by the Company. The plaintiffs specifically claim that in the Company's life insurance policies, it agreed to charge its policyholders no more than the Maximum Annual Life Insurance Premium listed in the Table of Premiums in each policy. However, if a policyholder paid for the Company's policy on a monthly, quarterly or semi-annual basis, according to plaintiffs, the Company adds an extra charge to the stated maximum premium amount. Plaintiffs want this extra charge, or "modal premium," above the maximum annual premium to be recovered with prejudgment interest. In addition, through their suit, they also seek reimbursement of costs incurred in the litigation and an award in attorney's fees. UNITED STATES: EEOC Ordered to Pay Record $1M to Pasadena Firm -------------------------------------------------------------- Ballard, Rosenberg, Golper & Savitt LLP said that the federal district court ordered the U.S. Equal Employment Opportunity Commission to pay $1,022,653.69 in attorneys' fees and expenses to a Pasadena immigration law firm which the EEOC unsuccessfully sued for sexual harassment and pregnancy discrimination. In a 17-page written ruling, U.S. District Judge Dickran Tevrizian found that the EEOC's lawsuit against Robert L. Reeves & Associates "was unreasonable, frivolous and without foundation." The award is believed to be, by far, the largest ever issued against the EEOC. Linda Miller Savitt, a partner with the management-side employment law firm of Ballard, Rosenberg, Golper & Savitt in Universal City, represented Reeves and his firm throughout the case, including a 10-day jury trial, which ended in a unanimous defense verdict on November 2, 2005. John J. Manier, a senior counsel with Ballard, Rosenberg, Golper & Savitt, prepared the briefs in support of Reeves' request for fees and expenses. Mr. Reeves maintained that the EEOC either knew or unreasonably failed to learn that its lawsuit was part of a scheme by two of Mr. Reeves' former law associates, Daniel Hanlon and Colin Greene, to destroy Mr. Reeves and his firm. In 2001, a Los Angeles Superior Court judge found Hanlon and Greene liable to Mr. Reeves for interference with contract and prospective economic relations, misappropriation of trade secrets and related claims, and awarded Reeves and his firm a total judgment of nearly $200,000. The California Supreme Court upheld that award in a unanimous decision in 2004. Judge Tevrizian agreed that "either the EEOC knew it was being used as a primary weapon in Hanlon's and Greene's campaign to destroy (Reeves' firm), or it maintained a studied and inexcusable ignorance of this fact." Judge Tevrizian noted that before the EEOC filed its suit against Mr. Reeves, the only persons it interviewed were Mr. Hanlon, Mr. Greene and Nikki Mehrpoo Jacobson -- despite Mr. Greene's prior service as the firm's in-house counsel before the EEOC in a pregnancy-bias charge brought by former employee Judith Quilaton, Mr. Greene's romantic relationship with Ms. Jacobson, Mr. Hanlon's role as decision-maker in the firm's termination of Ms. Quilaton, and Mr. Hanlon's and Mr. Greene's unlawful conduct when they left the firm in 1999. Judge Tevrizian rejected the EEOC's attempt to distance itself from Mr. Hanlon and Mr. Greene. Instead, he found that Mr. Hanlon, Mr. Greene and Ms. Jacobson "schemed ... to elicit the EEOC to expand the (Ms. Quilaton) matter to include alleged sexual harassment," even though Ms. Quilaton's pregnancy-bias claim "eventually proved to be so baseless that the EEOC did not even appeal" from Judge Tevrizian's summary dismissal of the claim. Although the EEOC purported to sue Mr. Reeves on behalf of 7-10 people identified by Mr. Hanlon, Mr. Greene and Ms. Jacobson, the agency's investigator, Deborah Kinzel Barnes, admittedly never spoke with any of these individuals before filing suit, and Ms. Jacobson was the only woman Ms. Barnes interviewed with respect to alleged sexual harassment. Judge Tevrizian concluded that "the EEOC basically sought to parlay a few isolated jokes and comments into bad-faith, exaggerated allegations of a hostile work environment." In addition, Judge Tevrizian found that the EEOC's conduct throughout the case, in discovery and at trial, made "improper use of the legal system to prosecute what it knew, or should have known, were groundless claims." As examples, Judge Tevrizian cited the EEOC's requests for private information from third parties not involved in the case, its refusal to "provide 'even the most basic factual allegations' underlying the supposed claims" of three individuals, and its "flagrant disregard for the attorney-client privilege" in seeking discovery directly from Reeves' current and former attorneys, including Greene. Judge Tevrizian further ruled that "the EEOC's lawsuit was unreasonable and frivolous" as to all 12 individuals on whose behalf it purported to bring claims. He noted that the EEOC did not appeal from his earlier summary dismissal of claims on behalf of six of these individuals. Although a divided federal appellate court panel ruled that the EEOC had sufficient evidence to proceed to trial as to the other six "claimants," Judge Tevrizian found "the testimony and jury verdict at trial" showed none of these claims was based on any credible evidence. In particular, Judge Tevrizian cited many inconsistencies in the individuals' testimony, the repeated use of the term "personal space" in witness testimony, which had been coached by the EEOC, and the EEOC's "gross" exaggeration of several of the claims. Tevrizian pointed out that the testimony of Nikki Mehrpoo Jacobson was exaggerated and even fabricated. Judge Tevrizian found "[Ms.] Jacobson's contradictions and distortions are particularly troubling because Jacobson provided the anonymous tip which initiated the EEOC's sexual harassment investigation and was the only woman the EEOC interviewed on this issue before rendering its 'cause' finding." Judge Tevrizian ruled that Mr. Reeves and his firm were entitled to an award of $995,780.72 in attorneys' fees and $26,872.97 in additional expenses, for a total award of $1,022,653.69. A copy of Judge Tevrizian's written order can be obtained from Linda Miller Savitt of Ballard Rosenberg Golper & Savitt, LLP, E-mail: lsavitt@brgslaw.com, Web site: http://www.brgslaw.com/. WESTPOINT CORPORATION: Funds' Collapse May Give Rise to Lawsuits ---------------------------------------------------------------- Preparations are up to file class actions in relation to the collapse of the financing firms of troubled Westpoint Corporation. Brisbane Courier Mail said lawyers acting for Westpoint investors are planning suits aimed at recouping money from the firm's financial planners. According to AAP News, IMP (Australia) is also doing the same. Law firm Slater and Gordon is targeting unnamed financial planners to recoup funds for an unspecified number of Westpoint investors. Joanne Rees of Slater and Gordon said dozens of investors have already approached the firm. The report said about 6000 investors face major losses when the funds went bankrupt, and some $300 million are involved. Perth lawyer Charlie Grollow, of IMF (Australia) said he had talked to about 100 people. Ms. Rees said they are targeting financial planners because there is little chance anything can be recovered from Westpoint. But they are investigating first which financial planner recommended the firm's high-risk promissory notes to investors. The investment firm of former Westpoint executive director Richard Beck Beck, Kebbel, led the fund raising for mezzanine finance to fund apartment projects. Seven Westpoint mezzanine financing firms called in administrator Geoff Totterdell from PricewaterhouseCoopers last month. Two of them are already in liquidation. WORLDCOM INC.: Provides Updates on "Right-of-Way Litigation" ------------------------------------------------------------ Prior to its July 21, 2002 filing of voluntary petitions for relief in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 11 of Title 11 of the U.S. Bankruptcy Code, WorldCom, Inc., was named as a defendant in five putative nationwide and twenty-five putative state class actions involving fiber optic cable on railroad, pipeline and utility rights-of-way. The complaints, collectively labeled by the Company as "Right- of-Way Litigation" allege that the railroad, utility and/or pipeline companies from which the Company obtained consent to install its fiber optic cable held only an easement in the right-of-way, and that the consent of the adjoining landowners holding the fee interest in the right-of-way did not authorize installation. The complaints also allege that because such consent was not obtained, the fiber optic network owned and operated by the Predecessor Company trespasses on the property of putative class members. In addition, the complaints allege causes of action for trespass, unjust enrichment and slander of title, and seek injunctive relief, compensatory damages, punitive damages and declaratory relief. By July 21, 2002, twenty-two putative class actions remained pending. In the remaining eight cases, class certification had been denied and/or the action had been dismissed. These cases were stayed as a result of the Company's bankruptcy filing, initially as a result of the automatic stay provisions of the Bankruptcy Code, and presently by operation of the discharge injunction incorporated into the modified Second Amended Joint Plan of Reorganization. To date, the Bankruptcy Court has denied all motions to lift the automatic stay or the discharge injunction. Certain of the right-of-way plaintiffs filed individual and/or putative class proofs of claim in the bankruptcy proceedings. To date, the Bankruptcy Court denied all pending motions to certify classes with respect to these proofs of claim, and has declined to extend the bar date to allow the late-filing of claims by unnamed class members. The Company, which collapsed when an accounting fraud to inflate earnings and hide expenses was uncovered, has re-emerged as MCI Inc., now based in Ashburn, Virginia. New Securities Fraud Cases FARO TECHNOLOGIES: Wechsler Harwood Files Securities Fraud Suit --------------------------------------------------------------- Wechsler Harwood LLP filed a class action suit on behalf of all securities purchasers of Faro Technologies, Inc. between May 6, 2004, and November 3, 2005, inclusive. The action, entitled, Johnson v. Faro Technologies, Inc. Case No. 6:06-cv-57-ORL- 18DAB, is pending in the United States District Court for the Middle District of Florida, and names as defendants, the Company, its Chief Executive Officer and Chairman, Simon Raab, its Executive Vice President, Secretary, Treasurer and a director, Gregory A. Fraser, and its Chief Financial Officer, Barbara R. Smith. A copy of the complaint is at: http://www.whesq.com. The complaint charges FARO and with violations of the Securities Exchange Act of 1934, and alleges that throughout the Class Period, these defendants directly participated in accounting fraud which materially misrepresented the Company's financial results in violation of Generally Accepted Accounting Principles (GAAP). The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that, at or about the beginning of the Class Period, the defendants represented that the Company had implemented practices that purportedly increased the Company's production capacity by, among other improvements, eliminating overproduction, wait time, inefficient processes, and product defects. During the Class Period, defendants issued strong results and positive guidance, which they attributed in material part to the Company's purported implementation of adequate controls and more efficient practices. The Complaint alleges that defendants' Class Period representations regarding the Company's financial performance and prospects were materially false and misleading when made because the Company's internal inventory and accounting controls and procedures were wholly defective and inadequate during the Class Period. The truth began to emerge on July 18, 2005. On that day, the Company issued a press release revealing that it had a backlog of unfilled customer orders that had grown significantly in the second quarter of 2005 and that, as a result, the Company significantly lowered its earnings guidance for that quarter. Further, on November 3, 2005, after the market closed, the Company announced that it had incurred $1.6 million in "inventory costing and consumption variances" related to the implementation of a new accounting and inventory management system. Defendant Simon Raab later admitted that the Company had not been able to keep up with customer orders which resulted in "substantially more complex inventory management situations, and . . . substantial inventory increases." In reaction to this news, the price of FARO stock plummeted $4.39, or 19.6%, from its closing price of $22.38 on November 3, 2005, to finally close on November 4, 2005, at $17.99, on unusually heavy trading volume. The Complaint also alleges that during the Class Period, before the truth was revealed to investors, defendants sold or caused to be sold more than 1.48 million of their own shares of FARO stock, for net proceeds of approximately $40.9 million, including through the use of highly complicated forward sales transactions that allowed defendants to both realize immediate profits and avoid current tax liabilities. For more information, contact Jeffrey M. Norton of Wechsler Harwood LLP (http://www.whesq.com),488 Madison Avenue, 8th Floor, New York, New York 10022, Phone: 877-935-7400 (ext. 286); E-mail: jmn@whesq.com. SFBC INTERNATIONAL: Hanzman & Criden Files Securities Fraud Suit ---------------------------------------------------------------- Hanzman & Criden initiated a class action in the United States District Court for the Southern District of Florida on behalf of all persons who purchased the publicly traded securities of SFBC International, Inc. (NASDAQ:SFCC) between February 17, 2004 and December 15,2005, inclusive. A copy of the complaint may be obtained from the court, or by calling (305) 357-9010. The complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements concerning SFBC's business condition. Specifically, defendants touted the Company's strong revenue, earnings, and its ability to outperform competitors and obtain large contracts from drug companies, because of the large numbers of participants its facilities could handle, and its ability to quickly recruit participants for drug trails. SFBC's financial success, however, was the result of business practices that were improper and reckless, and if discovered, would cause the Company to lose its credibility for accurate drug testing, and thus lose customers, expose the Company to fines and possible lawsuits from victims of faulty drugs, and face heavy regulation such that its ability to outperform competitors and quickly recruit large groups of participants could no longer be sustained. When news of SFBC's improper business practices was revealed to the market beginning on November 2, 2005, through the end of the Class Period on December 15, 2005, the Company's stock price fell more than60% from $41.49 to $15.78. For more information, contact Kevin Love at Hanzman & Criden, E- mail: klove@hanzmancriden.com, Phone: (305) 357-9000. SFBC INTERNATIONAL: Mager & Goldstein Files FL Securities Suit -------------------------------------------------------------- The law firm of Mager & Goldstein LLP initiated class action in the United States District Court for the Southern District of Florida on behalf of all purchasers of securities of SFBC International, Inc. between February 17, 2004 and December 15, 2005, inclusive. The Complaint alleges that defendants violated federal securities laws by issuing materially false and misleading statements during the Class Period regarding the Company's operations, business condition and compliance with applicable regulations. Specifically, defendants reported increasing revenue during the Class Period as a result of the Company's ability to successfully recruit individuals to participate in drug trials. However, SFBC's financial strength actually resulted from a series of improper recruiting and business practices, that if revealed would destroy the Company's credibility for reliable drug testing and subject the Company to fines, possible lawsuits and heavy regulation. On November 2, 2005, SFBC's improper business and recruitment practices were revealed to the market, with subsequent announcements over the next several weeks. As a result, the Company's stock price plummeted from $41.49 on November 2, 2005 to $15.78 on December 15, 2005, a drop of 61.9%. For more information, contact Jayne Arnold Goldstein, 2825 University Drive, Suite 350 Coral Springs, Florida 33065, Phone: 866-849-7545 (toll free), 954-341-0844, Fax: 954-341-0855; E- mail: jgoldstein@magergoldstein.com; or Lee Albert, One Liberty Place, 21st Floor, 1650 Market Street, Philadelphia, PA 19103; Phone: 866-284-3280 (toll free), 215-640-3280, Fax: 215-640-3281; E-mail: lalbert@magergoldstein.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, Teena Canson and Lyndsey Resnick, Editors. Copyright 2006. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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