/raid1/www/Hosts/bankrupt/CAR_Public/060127.mbx
C L A S S A C T I O N R E P O R T E R
Friday, January 27, 2006, Vol. 8, No. 20
Headlines
180SOLUTIONS INC.: Group Files Complaint V. Adware Installations
AGF MANAGEMENT: Warns of Possible Lawsuit Liability
BLOOMING IMPORT: Issues Allergy Alert on Undeclared Sulfites
CALIFORNIA: Court Grants Plaintiffs' Remand Motion in Hotel Case
CNH AMERICA: Granted Indemnity in El Paso Labor Lawsuit
CLEAR CHANNEL: Appeals Court Affirms Ruling in "Heerwagen" Case
CUNARD LINE: Faces Suit over Luxury Liner's Aborted Stops
DOUBLEDAY BOOKS: Readers Sue to Recover Value of Lost Time
FORD MOTOR: Appeals Court Reverses Ruling for NJ "Danvers" Case
FORD MOTOR: IL Court Denies Request for Attorneys' Fees, Costs
HOMELITE CONSUMER: Leaf Blowers Recalled for Laceration Hazard
ILLINOIS: Lawsuit Accuses CPD of Illegally Confiscating $3.6M
ILLINOIS: Retired Workers File Class Action to Recoup Wages
JTS COMMUNITIES: Homeowners Sue to Recoup Value of Missing Land
LES SCHWAB: Ex-Employees Launch Sexual Discrimination Suit in WA
MAXTOR CORP.: Investors Oppose Merger with Seagate Technology
MERCK & CO.: Appeals Court Affirms Dismissal of Securities Suit
MERCK & CO.: NJ Judge Denies CAFA Jurisdiction for VIOXX Lawsuit
NEW HAMPSHIRE: DOC, Ex-Officer Face Inmates' Sexual Assault Suit
OHIO: Court Tackles Class Certification Issue in Title VII Case
OHIO: Prisoner Freed by Court Sues State over Parole Procedure
PFIZER INC.: IL Judge Dismisses CAFA Argument for "Smith" Case
SPORTS AUTHORITY: Investors Say Sale Price Undervalues Firm
TRANSFIRST HEALTH: Judge Says "Lander" Case not Subject to CAFA
UNITED STATES: Lawsuit over State Aid to Disabled Goes to Trial
WAL-MART STORES: Court Allows PA Labor Lawsuit to Proceed
Asbestos Alert
ASBESTOS LITIGATION: Dana Corp. Notes 27T Drop in Injury Claims
ASBESTOS LITIGATION: Union Pacific Posts US$296M Income for 4Q05
ASBESTOS LITIGATION: PPG Posts US$113 Million Earnings for 4Q05
ASBESTOS LITIGATION: Court Orders Continuity of Case v. 13 Firms
ASBESTOS LITIGATION: Court Voids July 2003 Ruling in AcandS Suit
ASBESTOS LITIGATION: Allocates US$323.3M Recoveries Through 2019
ASBESTOS LITIGATION: Crane Posts 89,017 Pending Claims in 4Q2005
ASBESTOS LITIGATION: Crane Co. Notes US$35.3Mil Income for 4Q05
ASBESTOS LITIGATION: NY Supervisor Convicted for Removal Scandal
ASBESTOS LITIGATION: Japan Govt. to Tighten Asbestos Ban in 2006
ASBESTOS LITIGATION: Group Urges U.S. Congress to Pass FAIR Act
ASBESTOS LITIGATION: Japan Govt. to Provide Aid to Victims, Kin
ASBESTOS LITIGATION: Stay Postponed in Federal-Mogul Bankruptcy
ASBESTOS LITIGATION: Corning Inc. Records US$8M Charge for 4Q05
ASBESTOS LITIGATION: EPA Settles With Archdiocese Over Breaches
ASBESTOS LITIGATION: OR Court Grants $11M Payment to Homeowners
ASBESTOS LITIGATION: Lawyers to Mount Damages Suit v. JPN Govt.
ASBESTOS LITIGATION: Claimants Move to Lift Owens Corning Stay
ASBESTOS LITIGATION: Hospital Files for Class Action v. WR Grace
ASBESTOS LITIGATION: Grace Opposes Hospital's Class Action Move
New Securities Fraud Cases
AMKOR TECHNOLOGY: Federman & Sherwood Files PA Securities Suit
MILLS CORPORATION: Finkelstein, Thompson Files Securities Suit
MILLS CORPORATION: Federman Sherwood Files Securities Fraud Suit
SFBC INTERNATIONAL: Murray, Frank Files Securities Fraud Suit
*********
180SOLUTIONS INC.: Group Files Complaint V. Adware Installations
----------------------------------------------------------------
The Center for Democracy & Technology (CDT), a high-profile
consumer advocacy group is asking the Federal Trade Commission
(FTC) to pull the plug on the "illegal and deceptive practices"
used by adware vendor 180Solutions, Inc. to install unwanted
software on millions of computers, according to eWeek.
A complaint from the nonprofit CDT accuses the Company of using
a complicated web of affiliate partnerships to deliberately
trick consumers into downloading and installing intrusive adware
programs. The group wants the FTC to slap the Company with
hefty fines and block the company and its affiliates from future
use of the deceptive and unfair installation of software.
In a 91-page complaint, CDT revealed that it spent the last two
years investigating complaints that the Company was turning a
blind eye to the installation of its adware through security
exploits, botnets and instant messaging worm attacks. In a
statement issued Jan. 23, CDT said, "We are urging the FTC to
use all the tools at its disposal to bring these practices to a
halt, since 180Solutions has repeatedly failed to adequately
police its own distribution network."
CDT, which also runs the Anti-Spyware Coalition, also said that
the Company continues to use the shady tactics even after being
warned by technology experts, privacy advocates and its own
auditors that its practices were unethical, and in several
cases, illegal.
The Company, which distributes advertising through free software
programs like 180search Assistant and Zango, is no stranger to
controversy. It is already facing a class action lawsuit over
the alleged installation of adware through security
vulnerabilities and for making the programs virtually impossible
for computer users to remove. Attorneys Shawn M. Collins and
David J. Fish of The Collins Law Firm initiated that lawsuit in
an Illinois district court.
Filed on behalf of residents of the United States and the state
of Illinois, the suit charges that the Company downloaded
spyware on computers illegally causing a number of damages. The
company's alleged illegal practices include deceptively
distributing spyware files and preventing users from removing
them, engaging in deceptive misconduct to download its spyware
without users' knowledge or consent and lying to consumers about
its spyware, an earlier Class Action Reporter story (Sept. 15,
2005) reports.
Counts include computer fraud and abuse, violating Electronic
Communications Privacy Act/Wiretap Act (United States), Trespass
to Personal Property/Chattels, Consumer Fraud Act, Negligence,
Computer Tampering and Invasion of Privacy, (Illinois).
Numerous examples are given for each, an earlier Class Action
Reporter story (Sept. 15, 2005) reports.
On page 11 of the complaint it is stated, "Finally, the public
health and safety is also threatened by 180solutions' spyware
because it was distributed at an Internet site (and thus
financially supported an Internet site) showing child
pornography," an earlier Class Action Reporter story (Sept. 15,
2005) reports.
At the bottom of page 14, it is also stated, "180Solutions
intended to profit, and did actually profit from its wrongful
conduct by being able to obtain more adverting money by virtue
of being downloaded onto more computers" and 180solutions knew
that its conduct was deceptive and misleading [.]" and so on. A
jury trial is demanded, an earlier Class Action Reporter story
(Sept. 15, 2005) reports.
Ben Edelman, a harsh critic of the adware/spyware sector,
previously published evidence of nonconsensual installations of
180solutions through security exploits. His work was featured
in the CDT complaint, which lists several instances of the
Company's software being installed in conjunction with other
noxious programs via security exploits.
Despite the filing, the director of malware research at anti-
spyware vendor Sunbelt Software, Eric Howes is not at all
surprised by the CDT complaint. In an interview with eWeek, he
said, "My sense is that the CDT is fed up with the runaround
they were getting from 180Solutions. It has finally sunk in
that these guys are using a business model that is fundamentally
corrupt." He adds, "It has to change and it's clear it won't
change until someone puts a gun to their head and forces them to
change."
After reading the massive complaint, Mr. Howes told eWeek that
it was clear that the CDT gave 180Solutions ample time to clean
up its act. He points out, "The stunning thing to me is that
180Solutions has been well aware of rampant problems with
distributors and they sat back and allowed it to go on." Mr.
Howes adds, that 180Solutions "stubbornly refused" to make the
necessary changes to a business model that rewards criminal
activity.
The company typically pays per-installation affiliate fees to
third parties, but despite the company's public statements that
third-party affiliates are being policed, Mr. Howes told eWeek
that Company software are still being distributed via botnets
and IM worms.
Ari Schwartz, deputy director at the CDT, told eWeek that the
Company and its affiliates have caused "immeasurable harm" to
individual Internet users and to the Internet itself. He added,
"This Company's brazen distribution practices saddle innocent
Internet users with intrusive software that they neither want
nor need and contribute to a general sense of wariness and
distrust that threatens to stifle the growth of the medium."
Mr. Schwartz also said that CDT alerted the Company about its
investigations and warned it that several of its affiliations
were using deceptive installation tactics. According to him,
"180Solutions was initially cooperative, halting certain
practices, and even going so far as to file lawsuits against
some affiliates. However, throughout that period, CDT received
a nearly continuous stream of new complaints about 180Solutions
and its affiliates."
"After more than two years of investigation and discussion, CDT
concluded that 180Solutions' underlying business model is
fundamentally flawed, and that until it is changed, consumers
will continue to become unwitting victims of its deceptive
software installations," Mr. Schwartz said. He pointed out CDT
was disappointed that it wasn't able to convince 180Solutions to
clean up its practices saying, "We would always prefer to
resolve issues of this sort through dialogue and voluntary
improvements, but in this case we tried and were unable to reach
an agreement that protects consumers."
In addition to the broad "pattern of practice" complaint that
was filed, CDT also joined with the Technology Law & Public
Policy Clinic at the University of Washington School of Law to
file a separate complaint targeting the Company's ongoing
relationship with a specific affiliate, CJB.NET.
For more details, visit: http://researcharchives.com/t/s?4b2
(FTC Complaint) or http://researcharchives.com/t/s?4b3(Class
Action Complaint)
AGF MANAGEMENT: Warns of Possible Lawsuit Liability
---------------------------------------------------
AGF Management Limited noted certain claims and potential
claims, including class action lawsuits, related to its
agreement with the Ontario Securities Commission, in its
financial results for the year ended Nov. 30, 2005.
On Dec. 16, 2004 the OSC reached an agreement with five mutual
fund companies (including AGF) over allegations of market timing
in Canada's mutual fund industry. As a result of the agreement,
AGF has compensated individual investors in certain
international funds targeted by market timers between August
2000 and June 2003, the company mentioned in its financial
statement.
Selling, general and administrative expenses for the year ended
November 30, 2004 included $29.2 million in investor
compensation and $1.8 million in expenses relating to amounts
due to AGF unitholders. During the year, the entire $29.2
million was deposited into a trust account and all but $6.7
million (consisting of outstanding checks and institutional
accounts) has been disbursed as at Nov. 30, 2005. It is
anticipated that this amount will be disbursed in the first
quarter of 2006.
AGF expects that none of these claims or potential claims will
have a material adverse effect on the consolidated financial
position of the Company. It posted solid financial results for
2005, with net income of $91.8 million, an increase of 19 per
cent from $77.3 million in fiscal 2004.
BLOOMING IMPORT: Issues Allergy Alert on Undeclared Sulfites
------------------------------------------------------------
Blooming Import Inc. is recalling Golden Lion Brand Dried
Ziziphus Jujuba Mill (Dates) because the fruit contains
undeclared sulfites. People who have severe sensitivity to
sulfites run the risk of serious or life-threatening allege
reactions if they consume this product.
The recalled Golden Lion Brand Dried Ziziphus Jujuba Mill
(Dates), packaged in uncoded 12-ounce, heat-sealed plastic bags
were sold in New York City.
The recall was initiated after routine sampling by New York
State Department of Agriculture and Markets Food Inspectors, and
subsequent analysis of the product by Food Laboratory personnel,
revealed the presence of undeclared sulfites in Golden Lion
Brand Dried Ziziphus Jujuba Mill (Dates). The packages do not
declare sulfites on the label. The consumption of 10 milligrams
of sulfites per serving has been reported to elicit severe
reactions in some asthmatics. Anaphylactic shock could occur in
certain sulfite-sensitive individuals upon ingesting 10
milligrams or more of sulfites. No Illnesses have been reported
to date in connection with this problem.
Consumers who have purchased Golden Lion Brand Dried Ziziphus
Jujuba Mill (Dates) are advised to return it to the place of
purchase. Consumers contact, Phone: 1-800-680-3838.
CALIFORNIA: Court Grants Plaintiffs' Remand Motion in Hotel Case
----------------------------------------------------------------
U.S. District Judge Susan Illston granted the plaintiffs' motion
to remand to state court three consolidated putative class
actions, "Sneddon v. Hotwire, Inc., No. C 05-0951 SI, 2005 WL
1593593 (N.D.Cal. June 29, 2005)," involving Internet travel
services (discounted hotel rooms) originally filed in San
Francisco Superior Court in January and February of 2005, and
removed by the defendant to federal court under the Class Action
Fairness Act (CAFA) of 2005 based on the date of commencement of
the actions, but denied plaintiffs' motion for costs and
attorney's fees.
Looking to reported decisions across the country, including
"Pritchett v. Office Depot, Inc., 404 F.3d 1232 (10th Cir.
2005)," the district court declared that the courts have
"unanimously considered" the "commencement" date of an action
under CAFA to be "the date the action is filed in state court,
not when the case is removed to federal court." In addition,
the court also held that since CAFA did not apply to the removed
action, CAFA's provision allowing the aggregation of plaintiffs'
claims to meet the jurisdictional amount in controversy
requirement could not be used in these cases, and remanded the
cases to state court, according to McGlinchey Stafford of
http://www.cafalawblog.com.
However, the court declined to award the plaintiffs their
requested attorney's fees and costs, noting that the removal by
the defendants "was prompt and the issue raised was a new one."
The suit is styled, "Sneddon v. Hotwire, Inc. et al, case No.
3:05-cv-00951-SI," filed in the U.S. District Court for the
Central District of California, under Judge Susan Illston.
Representing the Plaintiff/s are:
(1) Adam Gutride of Gutride Safier, LLP, 835 Douglass St.,
San Francisco, CA 94114, Phone: 415-271-6469, Fax: 928-
438-1285, E-mail: gutridelaw@earthlink.net;
(2) Blake M. Harper of Hulett Harper, LLP, 550 West C. St.,
Suite 1600, San Diego, CA 92101, Phone: 619-338-1133,
Fax: 619-338-1139, E-mail: office@hulettharper.com; and
(3) Wayne Lamprey of Goodin MacBride Squeri Ritchie & Day,
LLP, 505 Sansome St., Suite 900, San Francisco, CA
94111, Phone: 415-392-7900, Fax: 415-398-4321.
Representing the Defendant/s are, Martha A. Boersch and Peter
Eliot Davids of Jones Day, 555 California St., 26th Floor, San
Francisco, CA 94104-1500, Phone: 415-626-3939, Fax: 415-875-
5700, E-mail: mboersch@jonesday.com and pdavids@jonesday.com.
For more details, visit: http://researcharchives.com/t/s?4aband
http://researcharchives.com/t/s?4a4(Pritchett Case).
CNH AMERICA: Granted Indemnity in El Paso Labor Lawsuit
-------------------------------------------------------
A court of appeals affirmed a decision ordering El Paso
Tennessee Pipeline Co. to indemnify CNH America for payments it
made to cap retiree health costs, CNH said at its fourth quarter
2005 report.
In December 2002, a purported class action lawsuit was filed in
the Federal District Court for the Eastern District of Michigan
against El Paso (formerly Tenneco, Inc.) and CNH America
(Yolton, et. Al v. El Paso Tennessee Pipeline Co., and Case
Corporation a/k/a/ Case Power Equipment Corporation, Docket
number 02-74276). The lawsuit alleged breach of contract and
violations of various provisions of the Employee Retirement
Income Security Act arising due to alleged changes in health
insurance benefits provided to employees of the Tenneco, Inc.
agriculture and construction equipment business who retired
before June 1994.
The changes resulted from an agreement between an El Paso
subsidiary and the International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America (UAW) in
1993 to cap the amount of retiree health costs. The UAW
retirees were to bear the costs above the Cap. CNH America and
El Paso are parties to a 1994 agreement under which El Paso
agreed to be responsible for the health costs of pre-June 1994
retirees. El Paso also agreed to indemnify CNH America against
claims related to this responsibility.
The lawsuit arose after El Paso notified the retirees that they
would be required to pay the portion of the cost of those
benefits above the Cap. The plaintiffs also filed a motion for
preliminary injunction, asking the court to prevent El Paso
and/or CNH America from requesting the retirees to pay the
health costs over the Cap.
On March 9, 2004, the court granted plaintiffs' motion for
preliminary injunction and ordered CNH America to pay the costs
of health benefits above the Cap for the purported plaintiff
class from March 2004. With El Paso, CNH America appealed the
district court's orders to the Sixth Circuit Court of Appeals.
The district court had also ruled in CNH America's favor on its
summary judgment motion and ordered that El Paso indemnify CNH
America by making the monthly payments of approximately $1.8
million to cover the amounts above the Cap. El Paso filed its
appeal of the summary judgment award with the Sixth Circuit
which appeal was consolidated with the appeal of the preliminary
injunction.
On January 17, 2006, the Sixth Circuit Court of Appeals affirmed
all the decisions of the district court including the order
requiring El Paso to indemnify CNH America. El Paso may request
that the en banc Sixth Circuit Court of Appeals reconsider the
panel decision, which the en banc court would accept only if it
found the issues extraordinary.
CNH believes the court is unlikely to grant an en banc review
with respect to the indemnification issue. While CNH is unable
to predict the outcome of this proceeding, CNH believes it has
good legal and factual claims and defenses, and CNH will
continue to vigorously pursue its claims and defend against this
lawsuit.
The suit is styled, "UAW Intl U, et al. v. El Paso TN Pipeline,
et al., Case No. 2:02-cv-74276-PJD," filed in the U.S. District
Court for the Eastern District of Michigan, under Judge Patrick
J. Duggan. Representing the Plaintiff/s is Roger J. McClow of
Klimist, McKnight, 400 Galleria Officentre, Suite 117,
Southfield, MI 48034-2161, Phone: 248-354-9650, E-mail:
rmcclow@kmsmc.com. Representing the Defendant/s are, Norman C.
Ankers of Honigman, Miller, (Detroit), 660 Woodward Avenue,
Suite 2290, Detroit, MI 48226-3506, Phone: 313-465-7000, Fax:
313-465-7307, E-mail: nankers@honigman.com; and Charles A.
Freeman of Gardner, Carton, 191 N. Wacker Drive, Suite 3700,
Chicago, IL 60606-1698, Phone: 312-569-1000, Fax: 312-569-1000.
CLEAR CHANNEL: Appeals Court Affirms Ruling in "Heerwagen" Case
---------------------------------------------------------------
The United States Court of Appeals for the Second Circuit
affirmed a lower court ruling refusing to certify a class action
filed against Clear Channel Communications, Inc.
Melinda Heerwagen filed the suit styled, "Heerwagen v. Clear
Channel Communications," on June 13, 2002 in the United States
District Court for the Southern District of New York. The
plaintiff, on behalf of a putative class consisting of certain
concert ticket purchasers, alleges that anti-competitive
practices for concert promotion services by us nationwide caused
artificially high-ticket prices.
On August 11, 2003, the Court ruled in the Company's favor,
denying the plaintiff's class certification motion. The
plaintiff has appealed this decision to the U.S. Court of
Appeals for the 2nd Circuit, and oral argument was held on
November 3, 2004.
On January 10, 2006, despite flaws in the lower court's
analysis, the 2nd Circuit ultimately agrees with the denial of
class certification, because the relevant geographic market is
local and not national.
The suit is styled, "Heerwagen v. Clear Channel Comm., et al.,
Case No. 2:02-cv-04503-JES," on appeal from the United States
District Court for the Southern District of New York, under
Judge John E. Sprizzo. Representing the plaintiffs is Stephen
J. Fearon, Jr., Squitieri & Fearon, L.L.P., 420 Fifth Avenue,
18th Floor, New York, NY 10018, Phone: (212) 575-2092, E-mail:
stephen@sfclasslaw.com. Representing the company is Jonathan M.
Jacobson, Wilson Sonsini Goodrich & Rosati (NYC), 12 East 49th
Street, 30th Flr., New York, NY 10017, Phone: 212-999-5858, Fax:
212-999-5899, E-mail: jjacobson@wsgr.com.
For more details, visit: http://researcharchives.com/t/s?4af.
CUNARD LINE: Faces Suit over Luxury Liner's Aborted Stops
---------------------------------------------------------
Passengers of the Queen Mary 2 are suing the owner of the luxury
liner that earlier was forced to cancel three stops due to a
broken propeller. More than 200 of the people on board the
cruise ship, owned by Cunard Line Ltd., have contacted British
firm Capital Law to file a class action, according to AFX.
The Queen Mary 2 skipped stops in the Caribbean islands of St.
Kitts and Barbados, and Salvador in Brazil after its propeller
was damaged upon leaving Florida. The ship's owner, Cunard, a
unit of Carnival Corp., offered a 50% refund to about 1,000 ship
passengers, but ticket holders refused the discount saying it
does not compensate cost of cancelled flights or hotel bookings.
Cunard President Carol Marlow considers the compensation offer
generous.
The Queen Mary 2 is sailing two days behind schedule. It is
expected to complete its journey when it docks in Los Angeles
Feb. 22.
DOUBLEDAY BOOKS: Readers Sue to Recover Value of Lost Time
----------------------------------------------------------
A suit was initiated in a Washington federal court seeking
compensation for lost time reading the "embellished" memoirs of
James Frey in a book "A Million Little Pieces," the Seattle
Times reports.
Attorney Mike Myers filed the suit, which is seeking class
action status on behalf of two Seattle residents representing
more than 2 million people who bought the novel. Mr. Myers told
The Seattle Times that his suit differs from those filed in
Illinois and California because it seeks compensation for "the
lost value of the readers' time" rather than refunds. Doubleday
offered refunds to people who bought the book directly from the
publisher.
Chicago law firm Dale and Pakenas previously sued the publishing
company Doubleday Books in a Cook County, Illinois court,
alleging consumer fraud (Class Action Reporter, Jan. 17, 2006).
The company acted on behalf of Pilar More, who said she felt
cheated after knowing key details of the memoir were fabricated.
The book tells of Mr. Frey's recovery from alcohol and drug
addiction.
The suit is seeking status as a class action. Lawyer Thomas
Pakenas said it might take up to 60 days to get a decision,
according to Herald News. The suit did not specify how much it
is seeking for damages (Class Action Reporter, Jan. 17, 2006).
Mr. Frey previously admitted on "Larry King Live" at CNN that he
added some details to his story, but insisted that is part of
memoir-writing.
FORD MOTOR: Appeals Court Reverses Ruling for NJ "Danvers" Case
---------------------------------------------------------------
The U.S. Court of Appeals for the 3rd Circuit reversed a federal
district court's ruling in the case styled, "Danvers Motor Co.,
Inc. v. Ford Motor Co., 04-3950 (3rd Cir., Dec. 19, 2005),"
according to Robert Loblaw of
http://appellatedecisions.blogspot.com.
In November 2000, a putative nationwide class of Ford dealers
brought suit, claiming that the Company's recently-introduced
Blue Oval Program ("BOP") violated state and federal law. A New
Jersey district court dismissed the case without prejudice for
lack of standing.
Instead of appealing, the plaintiffs revised their complaint and
filed it anew on May 6, 2002. The Company responded with a
motion to dismiss, which prompted Plaintiffs' last effort, an
"amended and supplemented" complaint filed on January 7, 2003.
However, in an unpublished opinion, the district court held that
eight of the nine named Plaintiffs "do not yet have an injury
that will support constitutional standing."
The eight dealers appealed their dismissal for lack of standing
to the 3rd Circuit. In its order that reverses the district
court's decision, the appeals court pointed out that because
their complaint alleges concrete and particularized injuries
that are fairly traceable to the Company's behavior and
redressable in court, it reverses the decision and remands the
case for further proceedings.
The suit is styled, "DANVERS MOTOR CO., et al v. FORD MOTOR
COMPANY, Case No. No. 02-CV-02197," on appeal from the U.S.
District Court for the District of New Jersey, under Judge
Dennis M. Cavanaugh with referral to Judge Mark Falk.
Representing the Plaintiff/s is ERIC LEWIS CHASE of BRESSLER,
AMERY & ROSS, ESQS., 325 COLUMBIA TURNPIKE, FLORHAM PARK, NJ
07932, Phone: (973) 514-1200, E-mail: echase@bressler.com.
Representing the Defendant/s is JAMES STEVEN DOBIS of DOBIS
RUSSELL & PETERSON, 326 SOUTH LIVINGSTON AVE., LIVINGSTON, NJ
07039, Phone: 973-740-2474, E-mail: jdobis@drp-law.com.
For more details, visit: http://researcharchives.com/t/s?4b0.
FORD MOTOR: IL Court Denies Request for Attorneys' Fees, Costs
--------------------------------------------------------------
The U.S. District Court for the Southern District of Illinois
denied the plaintiffs' request for nearly $50,000 in attorney's
fees and costs claimed to have been incurred in connection with
a motion to remand in the case styled, "Phillips v. Ford Motor
Company, No. 05-CV-503," which was removed under the Class
Action Fairness Act (CAFA) of 2005, according to McGlinchey
Stafford of http://www.cafalawblog.com.
Previously the Court granted the plaintiffs' remand motion on
the grounds that the initial lawsuit was commenced prior to
CAFA's enactment date. In this lawsuit, the plaintiffs
originally brought a class action in Illinois State Court filed
in October 1999, alleging that Ford Motor Company committed
fraud by using a defective vehicle painting process for its
model years 1988 through 1997. The plaintiffs subsequently
amended their complaint in April 2001, to remove model years
1988, 1996, and 1997 vehicles from the scope of the lawsuit. In
September 2003, the Court certified a class that included owners
of vehicles for the model years 1989 through 1996.
In April 2005, the plaintiffs filed their second amended
complaint, well after CAFA's February 18, 2005 effective date.
The second amended complaint added two additional class members
and revised the class definition to comport with the Court's
certification order by including Ford vehicles manufactured in
the model year 1996. The Company timely removed the case to
federal court on July 15, 2005, arguing that the amended
complaint had "commenced" a new action and thus, CAFA was
applicable. But, the plaintiffs disagreed, and filed their
motion to remand, arguing that no new action was commenced by
the actions taken in the second amended complaint. The Court
later ruled that remand motion was proper.
After the District Court's remand decision, the defendant
requested permission from the U.S. Court of Appeals for the 7th
Circuit to file an appeal (which had not been decided at the
time of the District Court's opinion), countered by the
plaintiffs filing a motion with the District Court, seeking
their attorney's fees and costs incurred in filing the remand
motion.
Addressing the motion for attorney's fees, the Court held that
while there is a presumption in the Seventh Circuit favoring an
award of fees in the context of a successful remand motion, the
defendant's removal was based on an interpretation of a recently
enacted statute with considerable uncertainty as to how CAFA
should be construed, so an award of attorney's fees and costs
would be inappropriate in this case.
The Court also noted that the plaintiffs' request for $50,000 in
fees based on their alleged 130 attorney hours in writing the
motion "shocks" the court, and rather than considering awarding
a lesser amount, would deny attorney's fees and costs
altogether, as an appropriate sanction for a request that was
"so exorbitant as to constitute an abuse of the process of the
court asked to make the award."
The suit is styled, "Phillips et al v. Ford Motor Company, Case
No. 3:05-cv-00503-DRH-CJP," filed in the U.S. District Court for
the Southern District of Illinois under Judge David R. Herndon
with referral to Judge Clifford J. Proud. Representing the
Plaintiff/s are:
(1) Arthur W. Aufmann of Edward T. Joyce & Associates, Cook
County, 11 South LaSalle St., Suite 1600, Chicago, IL
60602, Phone: 312-641-2600;
(2) Phillip A. Bock of Diab & Bock, Generally Admitted, 20
N. Wacker Drive, Suite 1741, Chicago, IL 60606, Phone:
312-334-1970, Fax: 312-334-1971, E-mail:
phil@diabbock.com;
(3) Charles W. Chapman of Charles W. Chapman, Chartered,
Generally Admitted, 301 Evans Ave., Wood River, IL
62095, Phone: 618-254-1127, E-mail:
carlitat@lakinlaw.com;
(4) Michael J. Freed and Christopher J. Stuart of Much,
Shelist et al., Cook County, 191 North Wacker Drive,
Suite 1800, Chicago, IL 60606-1615, Phone: 312-521-
2000;
(5) Bradley M. Lakin, L. Thomas Lakin and Jeffrey A.J.
Millar and Robert W. Schmieder, II of Lakin Law Firm,
Generally Admitted, 300 Evans Ave., P.O. Box 229, Wood
River, IL 62095-0027, Phone: 618-254-1127, Fax: 618-
254-3032, E-mail: bradl@lakinlaw.com,
caroll@lakinlaw.com, jeffm@lakinlaw.com and
robs@lakinlaw.com;
(6) Tod A. Lewis and Paul M. Weiss of Freed & Weiss, LLC,
Cook County, 111 West Washington St., Suite 1331,
Chicago, IL 60602, Phone: 312-220-0000, E-mail:
paul@freedweiss.com;
(7) Patricia S. Murphy of Schultz & Murphy, Generally
Admitted, 26 East Washington, 2nd Floor, Belleville, IL
62220, Phone: 618-233-1500, E-mail: TrishL22@aol.com;
and
(8) Randy Patchett of Patchett Law Office, Generally
Admitted, 104 West Calvert, P.O. Box 1176, Marion, IL
62959, Phone: 618-997-1984, Fax: 618-998-1495, E-mail:
patchettlawoffice@ll.net.
Representing the Defendant/s are, Ketrina G. Bakewell, Paul V.
Stearns, Peter W. Herzog, III and Christopher A. Hoffman of
Bryan Cave - St. Louis, Generally Admitted, 211 North Broadway,
One Metropolitan Square, Suite 3600, St. Louis, MO 63102, Phone:
314-259-2000 and 314-259-2371, Fax: 314-552-8371 and
314-259-2020 E-mail: kgbakewell@bryancave.com,
pvstearns@bryancave.com, pwherzog@bryancave.com and
christopher.hoffman@bryancave.com; and Robert H. Shultz, Jr. and
Joseph P. Whyte of Heyl, Royster et al. - Edwardsville,
Generally Admitted, 103 West Vandalia St., P.O. Box 467,
Edwardsville, IL 62025, Phone: 618-656-4646, E-mail:
rshultz@hrva.com and jwhyte@hrva.com.
For more details, visit: http://researcharchives.com/t/s?4a3.
HOMELITE CONSUMER: Leaf Blowers Recalled for Laceration Hazard
--------------------------------------------------------------
The U.S. Consumer Product Safety Commission, and Homelite
Consumer Products Inc., of Anderson, S.C., are recalling 1,550
units of Homelite Vac Attack II Blower. Consumers are advised
to stop using the recalled products immediately.
The company said the blowers have missing doors covering the
vacuum inlet. This exposes the blower's fan blade, posing a
risk of finger laceration to the user. No incidents or injuries
have been reported.
The recalled blower is used outside to blow, vacuum or mulch
leaves. "Homelite" is printed on the top of the blower. The
blower is red with a black nozzle, and weighs about 10 lbs.
Model number UT08542 or UT08542A is printed on the operator's
manual. Only blowers missing the black cover over the fan are
included in the recall. "Homelite" and "Vac Attack II" are
written on the fan cover. A bag connects to the blower to
collect the leaves or mulch.
The blowers, manufactured in China, were sold at Home Depot
stores nationwide from September 2005 through November 2005 for
about $99. Consumers should stop using these blowers immediately
and return them to a Home Depot store for a new blower or a full
refund.
Consumer contact: Homelite (http://www.homelite.com),Phone:
(800) 242-4672 (toll-free) between 8 a.m. and 5 p.m. ET Monday
through Friday.
ILLINOIS: Lawsuit Accuses CPD of Illegally Confiscating $3.6M
-------------------------------------------------------------
A class action lawsuit accuses the Chicago Police Department
(CPD) of illegally confiscating $3.6 million from people who
were arrested, according to United Press International.
Attorney Thomas Peters told The Chicago Tribune, "If a private
person or a corporation did this, they would be indicted. They
took the money and kept it. It's theft."
However, Police counsel Sheri Mecklenburg emphatically
disagreed. According to Ms. Mecklenburg, who also disputed the
amount, "If we owe people money, we will pay it back."
The suit was filed in 2004, when Elton Gates said $113 was
wrongly taken from him during his arrest. It covers all arrests
between February 2002 and December 2004 where money was neither
evidence nor subject to forfeiture. Mr. Gates sued after being
repeatedly told the officer was not available to personally
release the money as required by the Department's policy.
Recently, Mr. Peters accused the Department of refusing to
disclose the location of the money or names of the affected
people. However, Ms. Mecklenburg countered that the Department
was determining who qualifies to have their money returned.
ILLINOIS: Retired Workers File Class Action to Recoup Wages
-----------------------------------------------------------
Four retired city workers are suing the city of Chicago for
denying them back pay under last year's settlement with labor
unions, the Chicago Tribune reports.
The suit, which seeks class action status, accuses the City of
campaigning for the early retirement of workers through a buyout
program with a secret intention to deny them retroactive pay for
hours they worked before quitting.
The plaintiffs are John Marcatante, carpenter John Klaes,
electrician Jerry Whitley and machinist foreman Thomas Sadowski.
They are seeking back pay, an adjustment of retirees' pensions,
compensatory damages, and legal fees and costs. They are
represented by lawyer Thomas Geoghegan. The suit could include
more than 1,000 other retired workers, according to the report.
Mr. Marcatante said 140 more retirees have already indicated
intention to join.
According to the report, the dispute stems from a four-year
labor contract between City Hall and more than 30 unions that
replaced an agreement that expired July 1, 2003. The deal
guarantees back pay to 8,000 active union members for the more
than two years spent negotiating the deal. The term excludes
those who retired during the negotiations period.
JTS COMMUNITIES: Homeowners Sue to Recoup Value of Missing Land
---------------------------------------------------------------
A group of homeowners filed a class action against builder JTS
Communities of Sacramento, California claiming they received
less lot square footage than promised by the firm in its sales
brochure. The suit alleges that the missing area is up to 168
square feet, according to Inman.com. This is the third suit
filed against JTS for the discrepancy.
The defendant says the square footage advertised in its brochure
is an estimate, and acknowledged there are discrepancies of up
to 168 square feet for some 200 houses built between 1998 and
2004. It denies, however, that it intentionally misled anyone.
JTS general counsel Ian Craig said the company is cooperating
with an investigated conducted by the California Department of
Real Estate.
Brandon Gallardo is the lead plaintiff. He said 26 families
interested in joining the class action have contacted him. Mr.
Gallardo is claiming damages of much as $150,000 that includes
the amount he believes he overpaid, the amount he will lose in
relation to the discrepancy, and punitive damages for what he
believes is JTS's intentional misrepresentation. Mr. Craig
denies the misrepresentation allegation.
JTS informed the homeowners of the discrepancy in late November
2004 saying it was the result of the building department's
requirement to revise the plans.
Rob Ward, an attorney with the Burdman Law Group in Sacramento
and San Diego, California, is representing two families in
arbitration with JTS.
Mr. Gallardo has contacted California legislators seeking to
pass a "Gallardo Act" into law. The act would adopt an
"acceptable margin of error" of 4% or less in stated square
footage, according to the report.
LES SCHWAB: Ex-Employees Launch Sexual Discrimination Suit in WA
----------------------------------------------------------------
Two former Les Schwab employees initiated a class action lawsuit
in a Seattle federal court against the tire company, alleging
that it denied them promotions, training and other employment
opportunities because they are women, The News Tribune reports.
Plaintiffs Magen Morris of Tacoma and Jennifer Strange of
Eatonville worked in the office and clerical side of the retail
stores. Ms. Morris worked at Les Schwab stores in Tacoma,
SeaTac and Bellevue as well as at the company's headquarters in
Prineville, Oregon. Ms. Strange on the other hand worked in
Puyallup.
The women allege in their suit that they were denied advancement
in the Company because of their gender, even though they were
willing to change store locations to move into management. They
also claim that the Company has a practice of discrimination,
saying that it has never hired a female manager for its retail
stores. In addition, they also claim that the Company
systematically excludes women from working on the sales and
service side of the stores - experience required for getting a
management position.
Lynn Ellsworth, a Tacoma attorney representing the women,
criticized the company. She told The News Tribune, "For a
company with that kind of longevity and size to have never had
any female managers is simply difficult to believe in this day
and age. We hope we can open employment opportunities for all
genders to work at Les Schwab in management positions."
Ms. Morris and Ms. Strange were still working for the Company
when they filed discrimination complaints with the federal Equal
Employment Opportunity Commission and the Washington State Human
Rights Commission. In retaliation, according to the lawsuit,
the Company made it difficult for the women to continue working,
and they were eventually let go or left.
According to Warren Martin, the other Tacoma attorney on the
case, Ms. Morris had worked at the company for six years. Ms.
Strange also worked there for several years, but Mr. Martin was
unclear on how long.
Ms. Ellsworth, quoting from an EEOC determination issued on Aug.
25, 2005, told The News Tribune that the federal agency found
"reasonable cause" to believe the discrimination charges are
true.
The suit is styled, "Strange et al. v. Les Schwab Tire Centers
of Oregon Inc et al., Case No. 2:06-cv-00045-RSM," filed in the
U.S. District Court for the Western District of Washington,
under Judge Ricardo S. Martinez. Representing the Plaintiff/s
is Lewis Lynn Ellsworth of GORDON THOMAS HONEYWELL MALANCA
PETERSON & DAHEIM (TAC), 1201 PACIFIC AVE., STE. 2100, P.O. BOX
1157, TACOMA, WA 98401, Phone: 253-620-6500, Fax:
1-253-620-6565, E-mail: lellsworth@gth-law.com.
MAXTOR CORP.: Investors Oppose Merger with Seagate Technology
-------------------------------------------------------------
Shareholders of Maxtor Corp. are suing the company and its
directors, alleging self-dealing and breach of fiduciary duty in
connection with the proposed sale of Maxtor to Seagate
Technology.
Maxtor Corporation's current report on form 8-K, filed on Jan.
25 states that on Jan. 20, 2006, Theodore F. Vahl commenced a
purported shareholder class action lawsuit in the Superior Court
of the State of California, County of Santa Clara, against
Maxtor Corporation, the company's chairman and chief executive
officer, and certain members the board of directors. The
complaint alleges that the defendants violated their fiduciary
duties in connection with the proposed merger of the Company
with Seagate Technology.
Maxtor said the action is seeking equitable relief, including an
injunction against Seagate's acquisition of Maxtor as well as
the creation of a constructive trust to benefit the plaintiffs.
It believes the lawsuit is without merit.
On Dec. 20, 2005, Seagate entered into an agreement and plan of
merger with Maxtor, and MD Merger Corp., a direct wholly-owned
subsidiary of Seagate, by which Seagate has agreed to acquire
Maxtor for $1.9 billion in stock. The deal would unite the two
largest makers of computer disk drives, according to Dow Jones.
Under the agreement, Maxtor shareholders will receive 0.37 of
one Seagate share for each share held.
MERCK & CO.: Appeals Court Affirms Dismissal of Securities Suit
---------------------------------------------------------------
The U.S. Court of Appeals for the 3rd Circuit affirmed the
dismissal of class action securities litigation against Merck &
Co., according to Robert Loblaw of
http://appellatedecisions.blogspot.com.
The suit styled, "In re Merck & Co. Securities Litigation, No.
02-cv-03185," alleged that the Company failed to disclose
accounting problems at wholly owned subsidiary Medco, and that
Company officials made false and misleading statements about
Medco's status. The appeal stems from the issue of whether
securities class action plaintiffs can unilaterally change
counsel for an appeal.
The initial complaint was filed on July 2002 in the United
States District Court for the District of New Jersey. Union
Investments Privatfonds GMBH, was appointed lead plaintiff in
November 2002, and it filed its corrected amended complaint in
March 2003. At the time, Union's lead counsel was Bernstein
Litowitz Berger & Grossman LLP. Defendants filed a motion to
dismiss pursuant to Rule 12(b)(6), and the district court
granted it in July 2004. Union appealed that decision in August
2004. Only then did it hire Milberg Weiss Bershad & Schulman
LLP as its counsel for this appeal.
Under the Private Securities Litigation Reform Act (PSLRA) of
1995, the district court must approve lead class counsel, and
the 3rd Circuit concludes that this requirement extends to
appellate counsel. However, since the court is affirming
dismissal, it concludes that requiring after-the-fact approval
is unnecessary.
Plaintiff firms involved in this or similar cases:
(1) Alfred G. Yates, Jr., 429 Forbes Avenue, Pittsburgh,
PA, 15219, Phone: 412.391.5164;
(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) Glancy and Binkow, 1801 Avenue of the Stars, Suite 311,
Los Angeles, CA, 90067, Phone: 310-201-9150, E-mail:
info@glancylaw.com;
(4) Holzer & Holzer, LLC, 1117 Perimeter Center West, Suite
E-107, Atlanta, GA, 30338, Phone: (770) 392-0090, Fax:
(770) 392-0029, E-mail: mfistel@holzerlaw.com;
(5) Kaplan Fox & Kilsheimer, LLP (San Francisco, CA), 100
Pine St., 26th Floor, San Francisco, CA, 94111, Phone:
415.772.4700, Fax: 415.677.1233, E-mail:
info@kaplanfox.com;
(6) Kirby McInerney & Squire, LLP, 830 Third Avenue, 10th
Floor, New York Ave, NY, 10022, Phone: 212.317.2300;
(7) Law Offices of Marc S. Henzel, 335 Central Avenue,
Lawrence, NY, 11559, Phone: 516.374.0707, Fax:
516.295.3473, E-mail: securitiesfraud@comcast.net;
(8) LeBlanc & Waddell, LLC, 201 St. Charles Avenue, Suite
3204, New Orleans, LA, 70170, Phone: 504.523.9900, Fax:
504.522.9300;
(9) Lite, DePalma, Greenberg & Rivas, LLC, Two Gateway
Center, 12th Floor, Newark, NJ, 07102-5003, Phone:
973.623.3000;
(10) Milberg Weiss Bershad Hynes & Lerach LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300;
(11) Rabin & Peckel, LLP, 275 Madison Avenue, 34th Floor,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com;
(12) Shapiro Haber & Urmy, LLP, 75 State St., Boston, MA,
02109, Phone: 617.439.3939, Fax: 617.439.0134, E-mail:
info@shulaw.com;
(13) Spector Roseman & Kodroff (San Diego), 1818 Market
Street, Suite 2500, Philadelphia, PA, 19103, Phone:
215.496.0300, Fax: 215.496.6611;
(14) Wechsler Harwood, LLP, 488 Madison Avenue 8th Floor,
New York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com;
(15) Weiss & Yourman (New York, NY), The French Building,
551 Fifth Ave., Suite 1600, New York, NY, 10126, Phone:
212.682.3025, Fax: 212.682.3010, E-mail: info@wyca.com;
and
(16) Wolf Popper, LLP, 845 Third Avenue, New York, NY,
10022-6689, Phone: 877.370.7703, Fax: 212.486.2093, E-
mail: IRRep@wolfpopper.com.
For more details, visit: http://researcharchives.com/t/s?4b1.
MERCK & CO.: NJ Judge Denies CAFA Jurisdiction for VIOXX Lawsuit
----------------------------------------------------------------
The New Jersey Superior Court ruled that an action styled,
"International Union of Operating Engineers v. Merck & Co.,
Inc., No. ATL-L-3015-03, 2005 WL 2205341 (N.J. Super. July 29,
2005)," which was commenced on October 30, 2003 is not subject
to the provisions of the Class Action Fairness Act (CAFA) of
2005, according to McGlinchey Stafford of
http://www.cafalawblog.com.
Judge Carol E. Higbee, of the Superior Court of New Jersey,
noted that the Class Action Fairness Act of 2005 would not apply
to a nationwide class action filed in New Jersey State Court
against the Company by users of the drug VIOXX, since CAFA was
only intended to apply to actions commenced on or after the date
of its enactment, February 18, 2005. In granting the
plaintiffs' motion for class certification, Judge Higbee
dispelled all doubt, if any existed, that CAFA would not apply
to this class action, which was commenced on October 30, 2003,
noting, "Congress specifically narrowed the Class Action
Fairness Act to exclude lawsuits that were pending at the time
the legislation was enacted regardless of whether class
certification had been granted yet."
In it's ruling, the Court cited the 10th Circuit's "Pritchett v.
Office Depot decision at 420 F.3d 1090 (10th Cir. 2005)," which
stated that Congress specifically narrowed CAFA to exclude suits
pending upon its enactment. In addition, Judge Higbee also
referred to Pritchett's discussion of CAFA's legislative history
including the uncannily prophetic statement of a House
Representative that "the Class Action Fairness Act would not
effect the numerous class actions pending against Merck due to
its withdrawal of VIOXX."
For more details, visit: http://researcharchives.com/t/s?4a5and
http://researcharchives.com/t/s?4a4(Pritchett Case).
NEW HAMPSHIRE: DOC, Ex-Officer Face Inmates' Sexual Assault Suit
----------------------------------------------------------------
New Hampshire's Department of Corrections (DOC) and a former
officer were named as defendants in a class action lawsuit filed
by inmates at the Shea Farm halfway house in Concord, The
Associated Press reports.
The civil class action lawsuit was filed against the department
and former corrections Sgt. Douglas Tower of Goffstown. It is
accusing Sgt. Tower of sexually assaulting three female inmates
at Shea Farm. The suit did not specify compensation.
Currently, Sgt. Tower also faces four criminal counts of raping
four female inmates.
For more details, contact Douglas, Leonard & Garvey, 6 Loudon
Rd., Suite 502, Concord, NH 03301, Phone: 603-224-1988,
603-229-1988 or 1-800-240-1988, E-mail: mail@nhlawoffice.com.
OHIO: Court Tackles Class Certification Issue in Title VII Case
---------------------------------------------------------------
In the appeal for the case, "Reeb v. Ohio Department of
Rehabilitation & Correction, 04-3994," the U.S Court of Appeals
for the 6th Circuit addresses for the second time whether class
action certification is appropriate in a Title VII lawsuit by
female prison guards who are claiming sex discrimination,
according to Robert Loblaw of
http://appellatedecisions.blogspot.com.
Four named female employees of the Belmont Correctional
Institution ("Belmont"), a prison operated by the State of Ohio,
filed the class action lawsuit in the U.S. District Court for
the Southern District of Ohio against Belmont and certain
officials under Title VII of the Civil Rights Act of 1964. They
alleged in their suit that female corrections officers have been
treated differently from similarly situated male corrections
officers and accordingly have been denied promotions, denied
leave and overtime, given undesirable positions, and replaced by
men. The plaintiffs specifically requested money damages and an
injunction, though they did not specify the conduct they sought
to have enjoined.
The District Court's initial decision to certify the class was
reversed and remanded in an earlier decision, but the district
court did the same thing on remand. A divided 6th Circuit
reverses, concluding that the individualized damage
determinations preclude class certification. However, in
dissent, Judge Damon Keith argues that class certification is a
necessary tool to remedy discriminatory policies in the
workplace.
The suit is styled, "Reeb v. Ohio Department of Rehabilitation &
Correction, Case No. 2:00-cv-00774-ALM-TPK," on appeal from the
U.S. District Court for the Southern District of Ohio under
Judge Algenon L. Marbley with referral to Judge Terence P. Kemp.
Representing the Plaintiff/s is Nicholas E. Kennedy of Kennedy
Reeve & Knoll, 98 Hamilton Park, Columbus, OH 43203, Phone:
614-228-2050, Fax: 614-288-3320, E-mail:
nkennedy@krkattorneys.com. Representing the Defendant/s are,
Richard Nicholas Coglianese and Jack Wilson Decker of Ohio
Attorney General Office, Phone: 614-466-2872 and 614-644-7257,
Fax: 614-728-7592 and (614) 644-7253, E-mail:
rcoglianese@ag.state.oh.us and elsreview@ag.state.oh.us.
For more details, visit: http://researcharchives.com/t/s?4ae.
OHIO: Prisoner Freed by Court Sues State over Parole Procedure
------------------------------------------------------------
A Brooklyn, Ohio man who was wrongly imprisoned initiated a
class action lawsuit that seeks compensation for himself and
others who were jailed under similar circumstances, according to
the Cleveland Plain Dealer.
The Ohio Supreme Court released Henry Hernandez, 33, from Lorain
Correctional Institution on Jan. 12. Before his release, Mr.
Hernandez served time for a parole violation.
Mr. Hernandez told The Cleveland Plain Dealer that the judge for
his case never mentioned parole after he served seven years for
cocaine possession. After his February 2005 release, he was
sent back to prison in October for leaving the state.
According to the state, a judge didn't need to approve Mr.
Hernandez's parole, since it is required for first- and second-
degree felonies.
Mr. Hernandez's lawyer, Alphonse Gerhardstein, said more than
1,000 inmates have experienced a similar situation. He told The
Cleveland Plain Dealer, "Now we just need to clean up the mess."
The suit was filed in U.S. District Court in Cleveland and names
the Ohio Department of Rehabilitation and Correction and Adult
Parole Authority officials as defendants. It calls for
corrected records for affected inmates and reimbursement for
prison fees and wages they lost.
The suit is styled, "Hernandez v. Wilkinson et al., Case No.
1:06-cv-00158-JG," filed U.S. District Court for the Northern
District of Ohio under Judge James S. Gwin. Representing the
Plaintiff/s are, Alphonse A. Gerhardstein of Gerhardstein Branch
& Laufman Co. LPA, Ste. 1409, 617 Vine St., Cincinnati, OH
45202, Phone: 513-621-9100, Fax: 513-345-5543, E-mail:
agerhardstein@gblfirm.com; and David A. Singleton and Ohio
Justice & Policy Center, Ste. 1301, 617 Vine Street, Cincinnati,
OH 45202, Phone: 513-421-1108, Fax: 513-562-3200, E-mail:
dsingleton@prisonreform.com.
PFIZER INC.: IL Judge Dismisses CAFA Argument for "Smith" Case
--------------------------------------------------------------
U.S. District Judge Michael J. Reagan, writing for the Southern
District of Illinois, dismissed Pfizer, Inc.'s argument that the
Class Action Fairness Act (CAFA) of 2005 applied to the
litigation styled, "Smith v. Pfizer, Inc., 05-cv-0112-MJR (S.D.
Ill. March 24, 2005)," according to McGlinchey Stafford of
http://www.cafalawblog.com.
In this case, the plaintiff, Mary Smith, filed her putative
class action against Pfizer in the Circuit Court of Madison
County, Illinois, on December 28, 2004, regarding the
prescription pain relief drug, Bextra. She sought the costs of
medical monitoring and testing for early detection of injuries,
which might occur from ingesting the drug.
Ms. Smith expressly did not sue for any personal injuries
suffered by her or any other class members. The Company later
removed it, citing federal jurisdiction under the CAFA.
Judge Reagan initially conducted a pre-CAFA federal
jurisdictional analysis, ultimately deciding that the Company
could not show the requisite $75,000 amount in controversy
necessary to maintain the action in federal court. The Company
then tried to invoke CAFA jurisdiction, arguing that "commenced"
meant the date the case was removed to federal court, rather
than the date the complaint was initially filed in state court.
However, Judge Reagan pointed to both the plain reading of the
statute and the legislative history to show that CAFA was never
intended to apply retroactively, and like all of the other
courts to consider the particular question, remanded to case to
state court.
The suit is styled, "Smith v. Pfizer Inc., Case No. 3:05-cv-
00112-MJR-PMF," filed in the U.S. District Court for the
Southern District of Illinois under Judge Michael J. Reagan with
referral to Judge Philip M. Frazier. Representing the
Plaintiff/s are:
(1) Matthew H. Armstrong of Schlichter, Bogard et al. - St.
Louis, MO, Generally Admitted, 100 South Fourth Street,
Suite 900, St. Louis, MO 63102, Phone: 314-621-6115,
Fax: 314-621-7151, E-mail: marmstrong@uselaws.com;
(2) Grant L. Davis, Scott S. Bethune, Timothy L. Brake,
Shawn G. Foster and Thomas C. Jones of Davis Bethune et
al, 1100 Main Street, Suite 2930, Kansas City, MO
64105, Phone: 816-421-1600, Fax: 816-472-5972, E-mail:
lstevens@dbjlaw.net;
(3) Michael B. Marker of Rex Carr Law Firm, Generally
Admitted, 412 Missouri Avenue, East St. Louis, IL
62201, Phone: 618-274-0434, Fax: 618-274-8369, E-mail:
mmarker@rexcarr.com;
Representing the Defendant/s are, James D. Arden and Richard F.
O'Malley of Sidley Austin LLP - Chicago, One South Dearborn
Street, Chicago, IL 60603, Phone: 312-853-7000; and James J.
Bentivoglio and Robert H. Shultz, Jr. of Heyl, Royster et al. -
Edwardsville, Generally Admitted, 103 West Vandalia Street, P.O.
Box 467, Edwardsville, IL 62025, Phone: 618-656-4646, Fax: 618-
656-7940, E-mail: jbentivoglio@hrva.com and rshultz@hrva.com.
For more details, visit: http://researcharchives.com/t/s?4a6.
SPORTS AUTHORITY: Investors Say Sale Price Undervalues Firm
-----------------------------------------------------------
Shareholders in Sports Authority are suing the sporting goods
retailer to block plans to take the firm private, according to
Denver Post. The proposed sale of Sports Authority to private
equity firm Leonard Green & Partners LP for $1.3 billion deal
inclusive of debt entitles shareholders to receive $37.25 per
share.
Investors claim the company failed to make a market check of the
firm's value so that its current sale price shortchanges them.
Amand Partners, acting on their behalf, filed a lawsuit seeking
class action status on Jan. 23 in Delaware Chancery Court in
Wilmington.
TRANSFIRST HEALTH: Judge Says "Lander" Case not Subject to CAFA
---------------------------------------------------------------
U.S. District Judge Rodney W. Sippel ruled that the federal
court did not have jurisdiction under the Class Action Fairness
Act (CAFA) of 2005 in the case, "Lander and Berkowitz, P.C. v.
Transfirst Health Services, Inc., Case No. 4:05cv527, 2005 WL
1457910 (E. D. Mo. May 19, 2005)," since it was "commenced"
prior to CAFA's effective date, according to McGlinchey Stafford
of http://www.cafalawblog.com.
Lander and Berkowitz, P.C., filed their Missouri state court
class action against the company and other defendants on
February 17, 2005, the day on which Congress passed CAFA and the
day before President Bush signed CAFA into law on February 18.
Claiming original subject matter jurisdiction under CAFA, the
defendants removed the case.
The plaintiffs countered by filing their motion to remand on the
grounds that CAFA was not applicable since the action was filed
before its effective date. The defendants though argued that
Congressional enactment on February 17 was the effective date,
not the date on which the President signed the legislation.
However, in interpreting Section 9 of CAFA, which states, "the
amendments made by this Act shall apply to any civil action
commenced on or after the date of enactment of this Act," the
Court concurred with the plaintiffs' argument that presidential
signature is required before an act becomes law. The court
found that the date of enactment of CAFA was February 18, 2005,
the day on which President George W. Bush signed it into law,
and thus it lacked subject matter jurisdiction under CAFA.
Accordingly, the court ordered that the case be remanded to the
Circuit Court for the City of St. Louis, State of Missouri. It
is further ordered that plaintiff's request for an award of
attorneys' fees is denied.
The suit is styled, "Lander & Berkowitz, P.C. v. Transfirst
Health Services, Inc. et al., Case No. 4:05-cv-00527-RWS," filed
in the U.S. District Court for the Eastern District of Missourri
under Judge Rodney W. Sippel. Representing the Plaintiff/s are,
Joseph V. Neill, 5201 Hampton Avenue, St. Louis, MO 63109,
Phone: 314-353-1001, Fax: 314-353-0181, E-mail:
neill5300@aol.com; and John S. Steward of BURSTEIN LAW FIRM,
P.C., 225 S. Meramec, Suite 925, Clayton, MO 63105, Phone: 314-
725-6060, Fax: 314-862-9895, E-mail: glaw123@aol.com.
Representing the Defendant/s is Charles S. Kramer of RIEZMAN
BERGER, P.C., 7700 Bonhomme Avenue, Seventh Floor, Bonhomme
Place, Clayton, MO 63105, Phone: 314-727-0101, Fax: 314-727-
6458, E-mail: ckramer@riezmanberger.com.
For more details, visit: http://researcharchives.com/t/s?4a7.
UNITED STATES: Lawsuit over State Aid to Disabled Goes to Trial
---------------------------------------------------------------
The federal class action filed by the Disability Law Center to
speed up the release of government aid to disabled people is
under trial in Utah's U.S. District Court, according to The Salt
Lake Tribune.
There are 2,225 Utah residents on waiting lists for assistance
from the Division of Services for People with Disabilities,
which says it does not have enough money, and is prioritizing
more urgent cases. The Disability Law Center says this violates
the Americans with Disabilities Act (ADA) and the Rehabilitation
Act. Its suit says forcing people with developmental and
physical disabilities to wait for services is discriminatory,
because it places them at risk of institutionalization. The
state denies the claimed violation, and insists the list moves
at a reasonable pace, according to the report.
Advocates for people with disabilities have long called on the
government to solve the problem by increasing funding or giving
the division the leeway to distribute its $163 million budge to
the people.
The Disability Law Center's lawsuit has obtained class action
status. Qualified residents on the waiting list for services,
therefore, may benefit should the suit succeed. The report
lists six lead plaintiffs representing the class in court
documents. It includes a 45-year old man with Down syndrome,
who has been on the waiting list since 1996.
WAL-MART STORES: Court Allows PA Labor Lawsuit to Proceed
---------------------------------------------------------
A Pennsylvania state court judge on Jan. 16 certified a class
action suit against Wal-Mart stores for withholding meal and
rest breaks to workers, or compensating them for time worked on
those hours, Workers World reports.
Philadelphia County Court of Common Pleas Judge Mark Bernstein
made the decision after seeing routine skipping of breaks and
non-payment of those extra work in Wal-Mart's computer records.
The report said the Pennsylvania suit could cover nearly 150,000
current and former employees.
Wal-Mart is also facing a class action in Alameda County
Superior Court. It 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 (Class Action Reporter, Dec. 27, 2005).
The case concerns a 2001 state law stipulating 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.
The Pennsylvania class action is expected to be heard in
September the report said. In Orlando, Florida, a federal
Judicial Panel on Multidistrict Litigation will hear a motion to
centralize six lawsuits in the US District Court for the
District of Nevada. The cases are from federal courts in
Alaska, Delaware, Hawaii, Idaho, Nevada and South Dakota.
Asbestos Alert
ASBESTOS LITIGATION: Dana Corp. Notes 27T Drop in Injury Claims
----------------------------------------------------------------
Dana Corporation discloses a drop in active pending asbestos-
related product liability claims by 27,000 claims, from 115,000
at June 30, 2005 to 88,000 at September 30, 2005, according to
the Company's 10-Q report to the SEC.
The reduced number of claims was due to the dismissal or removal
to a suspense docket of a large number of claims during the
2005-3rd quarter, including about 12,000 claims in Mississippi.
The Toledo, OH-based auto parts manufacturer had accrued US$112
million for indemnity and defense costs for pending asbestos-
related product liability claims at September 30, 2005, compared
to US$139 million at December 31, 2004.
At September 30, 2005, the Company had recorded US$87 million as
an asset for probable recovery from its insurers for both the
pending and projected claims, compared to US$118 million
recorded at December 31, 2004, solely for pending claims. During
the 2005-2nd quarter, the Company received the final payment due
it under an insurance settlement agreement that the Company had
entered into with some of its carriers in December 2004.
In October 2005, the Company signed a settlement agreement with
another of its insurers in which it will receive cash payments
totaling US$8 million from the insurer in exchange for the
release of all rights to coverage for asbestos-related bodily
injury claims under the settled insurance policies. The Company
had a net amount recoverable from its insurers and others of
US$24 million at September 30, 2005, compared to US$26 million
at December 31, 2004.
Until 2001, most of the Company's asbestos-related claims were
administered by the Center for Claims Resolution. Since then,
the Company has controlled its legal strategy and settlements
using Peterson Asbestos Consulting Enterprise to administer its
claims. The Company has been working with the CCR, other former
CCR members, its insurers and the claimants over a period of
several years in an effort to resolve these issues.
Through September 30, 2005, the Company had paid US$47 million
to CCR claimants and collected US$29 million from its insurance
carriers with respect to these claims. At September 30, 2005,
the Company had a net receivable of US$10 million that it
expects to recover from available insurance and surety bonds
relating to these claims.
Dana Corporation's products include axles, brakes, and
driveshafts, as well as engine, filtration, fluid-system,
sealing, and structural products. The Company also caters to
firms that make commercial and off-highway vehicles.
ASBESTOS LITIGATION: Union Pacific Posts US$296M Income for 4Q05
----------------------------------------------------------------
Union Pacific Corporation reported 2005-4th quarter net income
of US$296 million, or US$1.10 per diluted share, compared to
US$79 million, or US$0.30 per diluted share in the fourth
quarter of 2004, according to a Company press release.
In the 2005-4th quarter, the Company reported operating income
of US$533 million compared to 2004's US$451 million, which
excludes the US$247 million pre-tax, non-cash asbestos charge.
The 2004 results include the impact of a non-cash charge for
unasserted asbestos claims of US$154 million after-tax, or
US$0.58 per diluted share. Excluding the asbestos charge, 2005-
4th quarter diluted earnings per share increased by 25%.
Full year 2005 net income was US$1.0 billion or US$3.85 per
diluted share, versus US$604 million, or US$2.30 per diluted
share in 2004. The 2005 full year results include a non-cash
income tax expense reduction of US$118 million after-tax, or
US$.44 per diluted share.
The 2004 full year results include the impact of the non-cash
asbestos charge. The comparison of 2005 and 2004 earnings,
excluding the tax and asbestos items, would be US$3.41 per
diluted share versus US$2.89 per diluted share, an 18% increase.
"Union Pacific is operating more efficiently, allowing us to
handle record volumes and recover more rapidly from challenges
such as hurricanes, the Kansas washouts and severe winter
storms," President and CEO Jim Young said. "We have gained
traction throughout the year with our operating initiatives. I
am particularly pleased that we converted strong revenue growth
into a significant increase in operating income."
Omaha, NE-based Union Pacific Corporation's principal operating
firm, Union Pacific Railroad, covers 23 states across the
western two-thirds of the United States. It carries low-sulfur
coal for electrical power generation and covers chemical-
producing areas along the Gulf Coast.
ASBESTOS LITIGATION: PPG Posts US$113 Million Earnings for 4Q05
----------------------------------------------------------------
PPG Industries reported 2005-4th quarter net income of US$113
million, or US$0.68 a share, including US$3 million, or US$0.02
a share, to reflect the net increase in the current value of the
Company's obligation under its asbestos settlement agreement
reported in May 2002, according to a Company press release.
The Company's 2005-4th quarter net income includes after-tax
charges of US$17 million, or US$0.10 a share, for the impairment
of certain assets in the Company's specialty chemicals business;
and US$10 million, or US$0.06 a share, for direct costs related
to the impact of hurricanes Katrina and Rita.
The Company estimates after-tax earnings were also reduced by
about US$11 million, or US$0.06 cents a share, due to lower
sales volumes resulting from the hurricanes.
For all of 2005, PPG recorded net income of US$596 million, or
US$3.49 per share, including after-tax charges of US$117
million, or US$0.68 cents a share, for legal settlements net of
insurance recoveries; US$21 million, or US$0.12 a share, for
direct costs related to the impact of hurricanes Katrina and
Rita; US$17 million, or US$0.10 a share, for the impairment of
certain assets in the company's specialty chemicals business;
US$12 million, or US$0.07 a share, for debt refinancing; and
US$13 million, or US$0.08 a share, to reflect the net increase
in the value of the company's obligation under its asbestos
settlement agreement.
In the fourth quarter 2004, PPG reported net income of US$183
million, or US$1.06 a share. This included after-tax charges of
US$6 million, or US$0.03 cents a share, to reflect the net
increase in the value of the company's asbestos settlement
agreement.
For all of 2004, PPG recorded net income of US$683 million, or
US$3.95 per share. This included after-tax charges of US$19
million, or US$0.11 cents a share, to reflect the net increase
in the value of the company's asbestos settlement agreement.
"We faced many notable headwinds this quarter and during the
entire year, including the economic fallout from the hurricanes,
historical peaks in energy costs and demanding conditions in
some of the markets we serve," said Charles E. Bunch, PPG's
chairman and CEO. "Despite these challenges, we achieved record
annual and fourth quarter sales, which were supported by all-
time high chlor-alkali pricing. In addition, in the quarter we
delivered on our commitment made earlier this year to fully
recover our coatings margins to the prior year level."
Pittsburgh, PA-based PPG Industries Inc. supplies coatings,
glass, fiberglass, and chemicals worldwide. The Company has
about 50 production facilities in the United States and about
108 worldwide, including subsidiaries, joint ventures and equity
affiliates.
ASBESTOS LITIGATION: Court Orders Continuity of Case v. 13 Firms
----------------------------------------------------------------
For a plaintiff's and a trial court's failure to follow
regulations, the Florida District Court of Appeal ordered the
continuation of an asbestos lawsuit against 13 defendants.
Judge Melanie G. May, together with Judges Gary M. Farmer and
George A. Shahood, heard the case that was decided on January
11, 2006.
On August 28, 2005, James C. Parsons sued 54 defendants in the
Seventeenth Judicial Circuit Court in Broward County. When the
first emergency petition was filed on September 6, 2005 in the
Appeals Court, not all defendants were served.
The remaining defendants are Genuine Parts Company, Bridgestone
Firestone North American Tire, Mack Trucks, Inc., International
Truck and Engine Corporation, Daimler-Chrysler Corporation,
Freightliner, LLC, Borg-Warner Corporation, Honeywell
International, Inc., fka Allied Signal, Ford Motor Company,
General Motors Corporation, Dana Corporation, Pneumo Abex, LLC,
and Metropolitan Life.
On December 5, 2005, the defendants were notified that trial
would be on December 13, 2005 and they were served a motion for
continuance on December 7, 2005. On December 8, 2005, the
Circuit Court denied the motion, which prompted the defendants
to file petitions of relief. The Appeals Court issued a stay on
December 12, 2005.
Because Mr. Parsons and the Circuit Court failed to follow the
Florida Rules of Civil Procedure and the Omnibus Order, the
Appeals Court granted the defendants' petitions for mandamus,
quash the orders denying the defendants' motions for
continuance, and issue the writ of mandamus.
The Appeals Court remanded Mr. Parson's lawsuit to the trial
court for proceedings.
Steven L. Brannock and Meagen Peek Luka of Holland & Knight,
LLP, Tampa, Thomas M. Burke and Chris N. Kolos of Holland &
Knight, LLP, Orlando, represented Genuine Parts Company,
Bridgestone Firestone North American Tire, Mack Trucks, Inc.,
and International Truck and Engine Corporation.
Jeffrey M. Bell of Bell & Melamed, LLC, Fort Lauderdale,
represented Daimlerchrysler Corporation, Freightliner, LLC, and
Borg-Warner Corporation.
Jack R. Reiter and Anthony N. Upshaw of Adorno & Yoss, LLP,
Miami, represented Honeywell International, Inc., fka Allied
Signal.
Michael R. Holt of Rumberger, Kirk & Caldwell, Miami, Robert M.
Perez of Salas, Ede, Peterson & Lage, L.L.C., South Miami, and
Nancy W. Gregoire of Bunnell, Woulfe, Kirschbaum, Keller,
McIntyre, Gregoire & Klein, P.A., Fort Lauderdale, represented
Ford Motor Company, and General Motors Corporation.
Evelyn M. Fletcher of Hawkins & Parnell, LLP, Atlanta, Georgia
represented Dana Corporation, and Pneumo Abex, LLC.
David A. Jagolinzer and Case A. Dam of The Ferraro Law Firm,
P.A., Miami, represented James C. Parsons.
ASBESTOS LITIGATION: Court Voids July 2003 Ruling in AcandS Suit
----------------------------------------------------------------
The U.S. Court of Appeals for the Third Circuit voided a July
2003 arbitration decision that favored The St. Paul Travelers
Companies, Inc. in a lawsuit filed by ACandS, Inc., according to
a Travelers press release.
The 2003 decision had ruled that third-party asbestos injury
claims against ACandS were subject to the aggregate limits of
the policies issued by Travelers to ACandS, which had been
exhausted. The Third Circuit's decision was based on ACandS's
bankruptcy proceedings. However, the court did not reject any of
St. Paul Travelers' coverage positions.
As a consequence, the Third Circuit renewed a case which, based
on the 2003 decision, had been dismissed in September 2004 by
the U.S. District Court for the Eastern District of
Pennsylvania.
In that case, ACandS asserted that each asbestos injury claim
against it is subject to a separate occurrence limit under
insurance policies issued by Travelers, while Travelers asserted
that such claims are subject to a single occurrence limit, which
had been exhausted.
St. Paul, MN-based St. Paul Travelers Companies, Inc. offers
personal and commercial liability and casualty, property,
workers' compensation, auto, marine, and other coverage to
companies in North America and the United Kingdom.
ASBESTOS LITIGATION: Allocates US$323.3M Recoveries Through 2019
----------------------------------------------------------------
Foster Wheeler Ltd. divulges that as of September 30, 2005, it
allocated about US$323.3 million in actual and probable
insurance recoveries for pending and expected future asbestos
liabilities through 2019, according to a SEC report.
Of that amount, about US$24.0 million is recorded in accounts
and notes receivable and about US$299.3 million is recorded as
asbestos-related insurance recovery receivable on the condensed
consolidated balance sheet.
Under an interim funding agreement, which was terminated in
2003, insurers paid a substantial portion of the Company's costs
incurred before 2002, and a smaller portion of the costs
incurred in connection with resolving asbestos claims during
2002 and 2003.
On February 13, 2001, litigation was commenced against certain
of the Company's subsidiaries by certain insurers that were
parties to the interim funding agreement seeking to recover from
other insurers amounts previously paid by them under the interim
funding agreement and to adjudicate their rights and
responsibilities under our subsidiaries' insurance policies.
As of September 30, 2005, about US$165.2 million of the
Company's asbestos insurance asset was contested by its
subsidiaries' insurers in this litigation. The Company has had
to cover a substantial portion of its settlement payments and
defense costs out of our working capital.
Clinton, NJ-based Foster Wheeler Ltd.'s Engineering and
Construction group designs and builds facilities for the oil and
gas, chemical, pharmaceutical, and other industrial markets. Its
Power Products & Services unit makes steam-generating units and
related equipment for power and industrial plants.
ASBESTOS LITIGATION: Crane Posts 89,017 Pending Claims in 4Q2005
----------------------------------------------------------------
Industrial products manufacturer Crane Co. declares that, as of
December 31, 2005, it faces 89,017 asbestos-related injury
claims pending in various state and federal courts, according to
a SEC report.
The Company lists about 25,000 pending claims in New York, about
33,000 claims in Mississippi, about 9,000 claims in Texas and
about 4,000 claims in Ohio.
In the October 28, 2005 Class Action Reporter, the Company had
88,925 claims for the three months ended September 30, 2005 as
opposed to 78,632 for the same period in 2004. Of these claims,
the Company noted that it faced about 25,000 claims in New York,
about 33,000 claims in Mississippi, and about 4,000 in Ohio.
Since the comprehensive master settlement agreement's
termination on January 24, 2005 the Company has been resolving
claims filed against it in the tort system.
The Company's total pre-tax cash payments for settlement and
defense costs net of payments from insurers and including
certain legal fees and expenses relating to the terminated MSA
in the years ended December 31, 2005, 2004 and 2003 totaled
US$45.3 million, US$28.1 million and US$7.9 millions,
respectively.
Stamford, CT-based Crane Co. states the gross settlement and
defense costs incurred, before insurance and tax effects, in the
years ended December 31, 2005, 2004 and 2003 totaled US$45.1
million, US$40.9 million and US$21.1 millions, respectively.
In 2006, the Company does not expect significant reimbursements
from insurers as the Company's cost sharing agreement with
primary insurers has been essentially exhausted. The Company
continues to negotiate with several of its excess insurers whose
policies provide substantial insurance coverage for asbestos
liabilities.
Crane Co. makes fluid handling equipment, aerospace components,
engineered materials, merchandising systems, and controls. The
Company serves the power generation, general aviation,
commercial construction, food and beverage, and chemical
industries.
ASBESTOS LITIGATION: Crane Co. Notes US$35.3Mil Income for 4Q05
----------------------------------------------------------------
Crane Co. reports that its 2005-4th quarter net income was
US$35.3 million, or US$0.58 a share, compared with net income of
US$46.4 million, or US$0.78 a share in the 2004-4th quarter,
according to a Company press release. The 2004 net income of
US$46.4 million included a US$6.5 million gain from the
Victaulic divestiture, as well as a US$9.1 million reduction in
the Company's asbestos liability.
In the October 28, 2005 Class Action Reporter, the Company
reported a 2005-3rd quarter profit of US$40 million, or US$0.66
a share, compared to a 2004-3rd quarter net loss of US$205.2
million, or a loss of US$3.48 a share, when it took a US$238.4
million net charge on asbestos and environmental matters.
Fourth quarter 2005 sales increased US$20.7 million (4%),
including core business growth of US$26.9 million (5%), and
unfavorable foreign currency translation of US$6.2 million (1%).
Operating profit of US$55.1 million rose 19% compared with
US$46.2 million in the 2004-4th quarter before the reduction in
asbestos liability. After the reduction, the Company reported an
operating profit of US$60.3 million in the 2004-4th quarter.
During the 2005-4th quarter, before asbestos-related payments,
the Company generated cash flow from operating activities of
US$98.2 million compared with US$66.3 million generated in the
2004-4th quarter.
Asbestos-related fees and costs, net of insurance recoveries,
were US$20.8 million in the 2005-4th quarter up from US$19.7
million in the 2004-4th quarter. Capital expenditures were
US$9.5 million in the 2005-4th quarter, compared with US$6.9
million in the 2004-4th quarter.
Stamford, CT-based Crane Co. manufactures industrial products,
including fluid handling equipment, aerospace components,
engineered materials, merchandising systems, and controls. The
Company serves the power generation, general aviation,
commercial construction, food and beverage, and chemical
industries.
ASBESTOS LITIGATION: NY Supervisor Convicted for Removal Scandal
----------------------------------------------------------------
A 37-year-old construction supervisor was convicted for his role
in a massive asbestos-removal scam involving more than 1,500
buildings across New York, including schools, churches and
hospitals, New York Newsday reports.
Sheon DiMaio was sentenced to three-and-a-half years in federal
prison. He worked for AAR Contractor, Inc., an Albany, NY-based
asbestos firm formerly owned by Alexander and Raul Salvagno,
according to U.S. Attorney Glenn Suddaby.
In the April 15, 2005 Class Action Reporter, Alexander, 38, and
his father Raul, 72, had begun serving jail sentences of 25 and
19 years, respectively. They were ordered to pay US$25 million
in fines and restitution.
The Salvagnos set up a bogus testing lab that falsified tests
for 1,555 projects to help them carry out their fraud scheme.
Before the Salvagnos' long trial, Mr. DiMaio pleaded guilty to
conspiracy to violate the Clean Air Act and the Toxic Substances
Control Act, and to violating the Clean Air Act. He admitted
engaging in years of illegal asbestos removals on behalf of the
Salvagnos and AAR.
Asbestos has been determined to cause cancer and asbestosis, a
lung disease that is nearly always fatal. The U.S. Environmental
Protection Agency has determined no safe level of asbestos
exposure. Prosecutors said the Company has put hundreds of
workers and other individuals at risk because of the fraud.
ASBESTOS LITIGATION: Japan Govt. to Tighten Asbestos Ban in 2006
----------------------------------------------------------------
Officials of Japan's Ministry of Health, Labor and Welfare said
it plans to completely phase out the use of asbestos, starting
with a wider ban on the carcinogenic substance in fiscal 2006,
The Asahi Shimbun reports.
By this summer, the Ministry will revise the Industrial Safety
and Health Law's enforcement regulations to block the use and
the making of asbestos-containing products, the officials added.
However, five asbestos-containing products that are still used
at existing facilities will be permitted for the time being
because an alternative is not yet available. One of those
products is the sealant used in pipe connections at chemical
plants. The Ministry intends to devise a substitute material by
fiscal 2008.
The increasing number of reports of health problems caused by
the material convinced the ministry that tighter restrictions
were needed.
The use of crocidolite, a highly toxic blue asbestos, and
amosite, which is brown asbestos, was completely banned in 1995,
while the use of chrysotile, or white asbestos, was partially
banned in 2004.
Japan imported 110 tons of asbestos from January to November in
2005. According to the Ministry officials, the figure is
expected to drop to several dozen tons after the new ban takes
effect.
ASBESTOS LITIGATION: Group Urges U.S. Congress to Pass FAIR Act
----------------------------------------------------------------
The Council for Citizens Against Government Waste spurs Congress
to pass S. 852, the Fairness in Asbestos Injury Resolution Act,
which creates a trust fund to indemnify true asbestos exposure
victims while limiting the actions of trial lawyers, PR Newswire
reports.
More than 730,000 individuals have raised asbestos-related legal
claims, with an estimated 300,000 claims currently pending.
Studies have found that up to 90% of these claims were by people
who have not suffered any physical impairment.
The moves of trial lawyers not only damage the legal system and
those being sued, true victims of asbestos exposure are also
suffering because of them. Because the courts are beset with
asbestos suits, some victims die of their health problems before
they are compensated. When victims are compensated, their
lawyers may take up to half of their judgment.
Corporations and their insurers would fund the trust fund
established by the FAIR Act.
"The asbestos situation is a debacle viewed by trial lawyers a
never ending revenue stream," CCAGW President Tom Schatz said.
"Millions of dollars are annually wasted on fraudulent suits,
causing job loss and burdening taxpayers. Passage of the FAIR
Act is vital both to true victims of asbestos exposure and to
the industries entangled in litigation."
The Council for Citizens Against Government Waste is the
lobbying arm of Citizens Against Government Waste, a
nonpartisan, nonprofit organization dedicated to eliminating
waste, fraud, abuse, and mismanagement in government.
ASBESTOS LITIGATION: Japan Govt. to Provide Aid to Victims, Kin
----------------------------------------------------------------
The Japanese Government approved legislation to financially aid
people suffering from asbestos-related diseases and those who
have lost family to such illnesses, while stepping up preventive
measures against similar problems.
The legislation stipulates that the Government will set
standards for certifying asbestos-linked conditions, including
mesothelioma. It will be submitted to the current Diet session
and is expected to be enacted later in January.
The Government has yet to finalize specific sums, but has said
that patients will receive JPY100,000 in monthly recuperation
money under the law.
The Government will pay condolence money and funeral fees to the
next of kin of victims of asbestos-linked diseases who died
before the law's implementation and who were not covered by
current industrial accident insurance plans.
Patients can apply for financial aid during the three years from
the time the law takes effect, possibly in March. The Government
will also compensate family members of asbestos victims who
missed the deadline to claim workers' compensation.
ASBESTOS LITIGATION: Stay Postponed in Federal-Mogul Bankruptcy
----------------------------------------------------------------
At a January 20, 2006 hearing, several parties in the resolution
of Federal-Mogul Corporation's bankruptcy proceedings failed to
comply with the requirements of the Bankruptcy Court for the
issuance of a stay for all pending Pneumo Abex asbestos claims,
according to a Cooper Industries Ltd. statement.
On Dec. 19, 2005, Cooper and other parties involved in the
resolution of the Federal-Mogul bankruptcy proceeding had
reached an agreement regarding Cooper's participation in
Federal-Mogul's asbestos claimants' trust. The issuance of the
stay is a critical term of the proposed settlement.
In a settlement that will resolve more than 38,000 pending Abex
claims, the proposed agreement is subject to court approval,
approval of 75% of the current Abex asbestos claimants and other
approvals. Future claims will be resolved through the bankruptcy
trust, and Cooper will be protected against future claims by a
ruling to be issued by the district court upon plan confirmation
(December 23, 2005 Class Action Reporter).
Houston, TX-based Cooper Industries, Ltd. makes electrical
products, tools, hardware, and metal support products.
ASBESTOS LITIGATION: Corning Inc. Records US$8M Charge for 4Q05
----------------------------------------------------------------
Corning Inc. recorded a required market-to-market charge of US$8
million, pretax and after-tax, in the 2005-4th quarter
reflecting the increase in Corning's common stock from September
30, 2005 to December 31, 2005, according to a SEC report.
Beginning with the first quarter of 2003, the Company has
recorded total net charges of US$643 million to reflect the
initial settlement and to mark-to-market the value of its common
stock.
On March 28, 2003, the Company announced that it had agreed with
the representatives of asbestos claimants for the settlement of
all current and future asbestos claims against it and Pittsburgh
Corning Corporation, which might arise from PCC products or
operations. The Company recorded a charge of US$298 million in
the 2003-1st quarter (November 4, 2005 Class Action Reporter).
The charge included the value of 25 million shares of Corning
common stock that the Company will contribute as part of the
settlement if the PCC plan of reorganization is approved and
becomes effective.
Corning, NY-based Corning Inc. makes fiber-optic cable. Once
known for its kitchenware and laboratory products, Corning now
derives 40% of its sales from optical fiber and cable products
and communications network equipment made by its
telecommunications unit.
ASBESTOS LITIGATION: EPA Settles With Archdiocese Over Breaches
----------------------------------------------------------------
The US Environmental Protection Agency states that it has
settled with the Archdiocese of Philadelphia over alleged
asbestos violations in some of its schools, including three in
Bucks County, the Bucks County Courier Times reports.
The Bucks schools are Holy Ghost Prep in Bensalem, Our Lady of
Grace in Penndel and St. Bede the Venerable in Northampton. The
Archdiocese and the three schools heeded the complaints when
they were announced last April 2005.
The EPA's complaint was based on a 2003 inspection of 12
Archdiocese buildings. The EPA cited breaches of the Asbestos
Hazard Emergency Response Act, which requires management plans
to inspect and monitor the material. The EPA stated the
violations do not indicate that any students or other people
were exposed to asbestos.
According to an EPA statement, as part of the agreement, the
Archdiocese listed US$69,000 it spent to comply with the
asbestos management requirements in the 12 affected schools. It
also agreed to enforce an asbestos management plan for its 222
schools.
Used for building insulation and fire resistance, asbestos has
fibers that can cause cancer or asbestosis when inhaled. The EPA
has banned or restricted its use in manufacturing and
construction.
ASBESTOS LITIGATION: OR Court Grants $11M Payment to Homeowners
----------------------------------------------------------------
An Oregon federal court approves US$11 million to resolve a long
running asbestos contamination dispute brought by 13 families
from the North Ridge Estates subdivision in Klamath Falls,
Oregon against developer MBK Partnership, US Newswire reports.
Under the terms of the agreement, MBK, its partners, and their
insurers will pay the agreed amount for compensation and
litigation costs.
Of the US$11 million, the majority will be used to compensate
the homeowners and will allow them to relocate to new permanent
residences. The remainder will reimburse the US Environmental
Protection Agency for the cost of its ongoing investigations.
The consent decree also provides for a receiver to hold title to
the property and search for a purchaser willing to implement
final cleanup measures to be selected by EPA.
"Asbestos contamination is a serious risk to the health and
well- being of individuals," said Sue Ellen Wooldridge,
Assistant Attorney General for the Justice Department's
Environment and Natural Resources Division. "Because of this
settlement, 17 families most affected by the contamination,
including some with small children, will be able to relocate to
new homes without fear of further exposure to asbestos."
"EPA welcomes this settlement," said EPA Regional Administrator
Michael Bogert. "The consent decree allows North Ridge Estates
homeowners to relocate to a safer neighborhood, away from any
potential exposure to asbestos, and resolves a complicated and
protracted dispute."
MBK was a partnership of local real estate developers Melvin
Stewart and Maurice Bercot, and local physician Kenneth Tuttle.
ASBESTOS LITIGATION: Lawyers to Mount Damages Suit v. JPN Govt.
----------------------------------------------------------------
Lawyers of asbestos-related disease sufferers would file a
damages lawsuit against the Japanese Central Government, citing
that its delayed prohibition of asbestos use has increased the
number of victims, The Yomiuri Shimbun reports.
The suit will be filed as early as April 2006.
Comprising 36 lawyers, the legal team also claims that a redress
bill submitted to the current Diet session is inadequate, and is
demanding that the Central Government provide a wide range of
support while clarifying the legal responsibility of the Health,
Labor and Welfare Ministry and the Environment Ministry.
The counsel aims to invite as plaintiffs sufferers of asbestos-
linked diseases not covered by the bill, and families who have
lost members to asbestos-related deaths.
The suit will be the first to widely cover asbestos-related
damages, including the claims of residents in neighborhoods near
asbestos factories.
ASBESTOS LITIGATION: Claimants Move to Lift Owens Corning Stay
----------------------------------------------------------------
About 2,122 Asbestos Personal Injury Claimants in Ohio ask the
US Bankruptcy Court to lift Owens Corning's automatic stay to
allow them to proceed in the Ohio state courts to litigate their
claims.
Alan B. Rich, Esq., at Baron & Budd PC, in Dallas, Texas, tells
the Court that during the five and a half years the Ohio state
tort cases against the Debtors have been stayed, the Asbestos
Claimants have suffered great harm in that some have either died
or been diagnosed with mesothelioma and did not live long enough
to have their claims heard by the state court. Others continue
to suffer from the Debtors' actions, without remedy. There is no
practical apparatus available to liquidate their claims before
the Bankruptcy Court, thus they seek to liquidate their claims
in the state courts. He notes that the Ohio lawsuits contain no
issues of federal law.
Mr. Rich points out that the Bankruptcy Court is prohibited from
resolving the litigation between the Asbestos Claimants and the
Debtors because it lacks jurisdiction. At the same time, due
process of law requires that the claims of the Asbestos
Claimants be tried and resolved in an appropriate forum.
Lifting the stay and allowing the Asbestos Claimants to move
forward with their claims against the Debtors in the state
courts will not impose any prejudice on either the Debtors or
their estates, Mr. Rich asserts. Moreover, he continues,
granting relief from the stay would actually benefit the Debtors
by saving them the cost of duplicating, in the federal district
court, litigation already underway in the state courts.
Mr. Rich emphasizes that time is of the essence to the Asbestos
Claimants, many of whom are old or gravely ill. If the stay is
not lifted and the reference to their cases is withdrawn, the
Asbestos Claimants would be forced to shoulder the additional
expense of duplicating their lawsuits.
Mr. Rich also believes that the Asbestos Claimants will prevail
on the merits of their claims against the Debtors because of the
Debtors' history of being found liable in the tort system for
asbestos injuries.
(Owens Corning Bankruptcy News, Issue No. 124; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ASBESTOS LITIGATION: Hospital Files for Class Action v. WR Grace
----------------------------------------------------------------
Anderson Memorial Hospital asks the Bankruptcy Court to certify
an opt-out class action on behalf of itself and other similarly
situated property owners whose buildings were, are, or will be
contaminated with asbestos fibers released from asbestos-
containing surfacing materials for which the W.R. Grace & Co. is
legally responsible. Anderson has filed asbestos property damage
claims against the Debtors' estate.
Daniel A. Speights, Esq., at Speights & Runyan, in Hampton,
South Carolina, relates that the Debtors' sales and shipping
records identified thousands of buildings with W.R. Grace &
Co.'s surfacing products. Thus, when the Debtors advanced their
note campaign pursuant to the Court's Bar Date Order, they had,
at their disposal, physical and mailing addresses of those
buildings with asbestos property damage claims.
However, Mr. Speights notes, the Debtors made no attempt to mail
individual notices of the Bar Date to those potential claimants
and have relied instead on notice by publication.
Mr. Speights asserts that since the notice to known creditors
was inadequate, a class certification may be the only means by
which many property damage creditors can receive proper notice
by which their claims can be discharged.
Mr. Speights points out that there are thousands of asbestos
property damage claims currently pending in the Debtors'
bankruptcy case that fit within the Anderson class definition.
Moreover, "numerosity does not require that joinder of all
parties be impossible, only impracticable and inefficient,"
Mr. Speights reminds the Court, citing Ardy v. Federal Kemper
Insurance Co., 142 F.R.D. 105, 111 (E.D.Pa.1992).
It is not necessary for every class member to have identical
claims, Mr. Speights asserts. Rather, the "commonality
requirement will be satisfied if the named plaintiffs share at
least one question of fact or law with the grievances of the
prospective class." Krell v. Prudential Insurance Co. of
America, 145 F.3d 283, 310 (3d Cir.1998).
Mr. Speights maintains that Anderson's claim is typical of the
absent class members' claims because the claims are united by:
-- Federal and state regulations, which require the eventual
removal of friable asbestos materials regardless of the exact
product involved; and
-- Grace's civil conspiracy liability, which renders all the
defendants responsible for the damage caused by their co-
conspirators' products as well as their own.
Mr. Speights further argues that adequacy focuses on whether or
not any conflict exists between the named representative and the
absent class members related to the action's subject. The issue
is whether or not Anderson's counsel is generally able to
conduct the suit and whether the class representative's
interests are antagonistic to those of the rest of the class.
Civil Rule 23(b)(3) permits class certification in those
instances where "the Court finds that the questions of law or
fact common to the class predominate over any questions
affecting only individual members and a class action is superior
to other available methods for the fair and efficient
adjudication of the controversy."
Mr. Speights points out that the class' cohesiveness is
emphatically demonstrated by the Debtors' insistence that the
Court entertain the legal issues in the estimation proceeding
that they claim apply to the broad spectrum of PD claimants.
Mr. Speights contends that common issues like whether Grace's
asbestos containing-surfacing materials are hazardous, whether
these products release asbestos fibers under foreseeable uses,
whether Grace tested its products for fiber release potential
and whether the defendants owed or breached any duties to
building owners clearly predominate over individual issues like
actual notice or individual damages.
(W. R. Grace Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ASBESTOS LITIGATION: Grace Opposes Hospital's Class Action Move
----------------------------------------------------------------
James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, P.C., in Wilmington, Delaware contends that the
proposed certification would frustrate rather than advance W.R.
Grace & Co.'s recent movement toward resolution, and would
pervert rather than implement the core requirements of Rule 7023
of the Federal Rules of Bankruptcy Procedure.
"Daniel A. Speights' motion for class certification [on
Anderson's behalf] is just more of the same from a would-be
member of an official committee who appears constitutionally
incapable of appreciating the interests of the bankruptcy
process or even following the basic rules of litigation," Mr.
O'Neill tells the Court.
According to Mr. O'Neill, the proposed certification would spell
immediate delay as class notice is given, opt out rights are
exercised, and class claims are litigated -- all without knowing
whether there really are any actual bona fide claimants beyond
those who timely met the Bar Date. It would manufacture
immediate uncertainty over the number of potential claims, just
as progress is being made in filtering out the myriad invalid
claims that Mr. Speights already has lodged.
"It would further complicate the already difficult task of plan
negotiations, as Mr. Speights would re-emerge, phoenix-like as a
major obstacle to reaching consensus," Mr. O'Neill argues.
As in Anderson's case, Mr. O'Neill maintains that asbestos
property damage litigation in general is beyond mature, and, it
is virtually ossified. Individual claimants not only have ready
access to counsel and the courts, they already have come forward
to press their claims.
As the U.S. Court of Appeals for the Seventh Circuit underscored
in "In the Matter of Rhone-Poalenc Rarer Inc.," class
certification should be avoided where litigation is mature and
claimants have both the means and the opportunity to litigate
claims individually.
Accordingly, the Debtors ask Judge Judith Fitzgerald to deny
Anderson's request.
(W. R. Grace Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
New Securities Fraud Cases
AMKOR TECHNOLOGY: Federman & Sherwood Files PA Securities Suit
--------------------------------------------------------------
Federman & Sherwood initiated a class action in the United
States District Court for the Eastern District of Pennsylvania
against Amkor Technology, Inc. (AMKR). 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 October 27, 2003 through
July 1, 2004. Plaintiff seeks to recover damages on behalf of
the Class.
For more information, contact William B. Federman of Federman &
Sherwood (http://http://www.federmanlaw.com),120 N. Robinson,
Suite 2720, Oklahoma City, OK 73102, Phone: (405) 235-1560; Fax:
(405) 239-2112; E-mail: wfederman@aol.com.
MILLS CORPORATION: Finkelstein, Thompson Files Securities Suit
--------------------------------------------------------------
Finkelstein, Thompson & Loughran initiated a putative class
action in the United States District Court for the Eastern
District of Virginia on Jan. 20, 2006 against The Mills
Corporation, The Mills Limited Partnership, and certain of its
officers, on behalf of persons who purchased Mills common stock
between Aug. 14, 2003 through and including Jan. 6, 2006.
According to the publicly available docket maintained by the
court clerk, no other complaint is currently pending against the
Company.
The lawsuit alleges that Mills violated federal securities laws
by issuing false or misleading public statements. Specifically,
the complaint alleges that Mills and various of its officers,
throughout the class period, overstated the Company's net income
and funds from operations in violation of Generally Accepted
Accounting Principles, and misrepresented the adequacy and
quality of its internal controls over financial reporting.
On Oct. 31, 2005, Mills announced that its conference call
discussing third quarter results would be delayed because the
company needed additional time to review its accounting, and
further announced the Company expected results to be lower than
initially anticipated. On January 6, 2006, Mills announced that
that:
(1) it needed to restate its financial results for fiscal
year 2000 through the third quarter of 2005;
(2) that it had internal control weaknesses and
deficiencies in regards to its accounting practices;
(3) that it would write off ten predevelopment business
projects, constituting a $71 million charge;
(4) that 17 executives and/or officers were either
terminated or retired;
(5) that a $4.1 million dollar loan would not be repaid and
that Mills had facts available in 2000 sufficient to
make this determination, but that the $4.1 million loan
had been improperly reported in all of Mills'
financials from 2000 through the third quarter of 2005;
(6) that Mills was in default of certain provisions of its
line of credit and other project-related loans;
(7) that Mills had entered into a new $150 million credit
line to provide short term liquidity; and
(8) disclosed that investors should no longer rely on its
financial statements for the period from fiscal year
2000 through the third quarter of 2005. Thereafter, on
January 12, 2006, Mills announced that the Securities
and Exchange Commission had launched an informal
investigation into its earlier announcement that a
restatement of its financials for nearly five years
would be required.
In response to the October 31, 2005 announcement, the price of
Mills common stock dropped from a closing price of $53.50 on
October 31, 2005 to close at $45.68 per share on November 1,
2005 -- a dramatic drop of nearly 15%. As a result of the
subsequent January 6, 2006 announcement, the price of Mills
common stock further dropped from a close of $42.23 on January
6, 2006 to a close of $41.05 on January 10, 2006, constituting
an additional decline of 3%.
For more information, contact Finkelstein, Thompson and
Loughran's Washington, D.C., Phone: (877) 337-1050; E-mail:
contact@ftllaw.com.
MILLS CORPORATION: Federman Sherwood Files Securities Fraud Suit
----------------------------------------------------------------
Federman & Sherwood initiated a class action in the United
States District Court for the Eastern District of Virginia
against The Mills Corporation (MLS). 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 August 14, 2003 through
January 6, 2006. Plaintiff seeks to recover damages on behalf
of the Class.
For more information, contact: William B. Federman of Federman &
Sherwood (http://www.federmanlaw.com),120 N. Robinson, Suite
2720, Oklahoma City, OK 73102, Phone: (405) 235-1560; Fax: (405)
239-2112; E-mail: wfederman@aol.com.
SFBC INTERNATIONAL: Murray, Frank Files Securities Fraud Suit
-------------------------------------------------------------
Murray, Frank & Sailer LLP and the law offices of Avv. Pietro
Adami initiated a class action lawsuit in the United States
District Court for the District of New Jersey on behalf of
shareholders who purchased or otherwise acquired the securities
of SFBC International, Inc. between Aug. 4, 2003 and Dec. 15,
2005, inclusive. SFBC International, Inc., Lisa Krinsky, Arnold
Hantman, and E. Cooper Shamblen are named as defendants.
The complaint alleges that defendants engaged in a scheme to
defraud shareholders and cause the Company's stock to be
artificially inflated through the issuance of statements
misrepresenting the quality of the Company's services and the
regulatory risks facing the Company given its business
practices. In carrying out clinical trials for drug candidates,
SFBC recruits human subjects to participate in the studies.
During the Class Period, SFBC cited its strength in recruiting
people willing to undergo drug trials so that data could be
compiled for manufacturers in reporting increasing revenue and
higher profit margins. With the stock inflated as a result of
the defendants misrepresentations, defendants completed two
equity offerings resulting in proceeds of approximately $163.96
million and the individual defendants sold personally held
shares of SFBC stock resulting in proceeds of approximately
$24.91 million.
However, undisclosed to investors were numerous conflicts of
interests and violations that would ultimately impair the
Company's ability to sustain its ongoing business operations at
levels declared by defendants. Moreover, the ongoing violations
could expose the Company to significant losses resulting from
regulatory action and customer loss.
On Nov. 2, 2005, Bloomberg News published an article entitled
"Big Pharma's Shameful Secret," exposing SFBC's recruitment
techniques as faulty and its clinical practices as fraudulent.
The article reported that, among other ethical and regulatory
violations, SFBC had paid drug trial participants to discourage
them from reporting adverse reactions to the drug tests, a
scheme that led manufacturers to continue with testing, and
failed to implement certain controls necessary to insure proper
study conditions and test results. Over the next several weeks,
more information became public about SFBC's improper recruiting
techniques, resulting in the resignation of Gerald Seifer,
SFBC's Vice-President of Legal Affairs. SFBC's stock fell from
$41.49 on Nov.2, 2005 to $15.78 on Dec. 15, 2005, a drop of over
60%.
For more information, contact Eric Belfi or Christopher Hinton
of Murray, Frank & Sailer LLP (http://www.murrayfrank.com)Phone:
(800) 497-8076; (212) 682-1818; Fax: (212) 682-1892; E-mail:
info@murrayfrank.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Teena Canson and Lyndsey Resnick,
Editors.
Copyright 2006. All rights reserved. ISSN 1525-2272.
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