/raid1/www/Hosts/bankrupt/CAR_Public/060203.mbx
C L A S S A C T I O N R E P O R T E R
Friday, February 3, 2006, Vol. 8, No. 25
Headlines
ACE CASH: Employees Complain of Inadequate Rest, Meal Breaks
ACE CASH: TX Court Dismisses Managers' FLSA Violations Lawsuit
ALHAMBRA SCHOOL: Court Okays Gender Discrimination Settlement
ANDERSON PRIVATE: T-Mobile Pursues Attack on Call Record Selling
ANDRX CORP: Fla. Judge Chooses Lead Plaintiff in Investors' Suit
APPLE COMPUTER: IPod User Claims Player Can Damage Hearing
BABIES "R": Baby Products Retailers Complain of Price Fixing
BERKELEY PREMIUM: Facing Lawsuits over Dietary Supplements
BRADLEY PHARMACEUTICALS: Faces Consolidated N.J. Securities Suit
BRADLEY PHARMACEUTICALS: Faces Consolidated N.J. Derivative Suit
CALIFORNIA: Court Tackles Appellate Review Procedures under CAFA
CALIFORNIA: Judge Approves Settlement of ADA Suit V. Los Angeles
CHEVRON CORPORATION: Fraud Claimed on Failure to Disclose Suits
CROWN COLLEGE: Jury Awards Student Damages for Misinformation
EPIX PHARMACEUTICALS: Court Dismisses Securities Fraud Lawsuit
ESTEE LAUDER: Faces Amended FL Suit Alleging FDTPA Violations
ESTEE LAUDER: CA Court Gives Final OK to Antitrust Agreement
EXCELSIOR PRIVATE: Faces Lawsuits in MD Over Trading Practices
GENERAL MOTORS: AR Court Nixes Cost Argument in Bryant Case
ILLINOIS: Fate of Pending Lawsuits Rest on $10B "Price" Ruling
LIBERTY MUTUAL: Appeals Court Says CAFA Applies to Knudsen Suit
NORTEL NETWORKS: Continues Effort to Settle Securities Lawsuits
OHIO: Lawsuit over August 2005 Styrene Leak Moves Toward Trial
PILGRIM'S PRIDE: TX Court Consents to Pursuing Separate Claims
SPARK NETWORKS: Sets Mediation for CA Dating Services Suit
TECHNOCONCEPTS, INC.: Investors Suspect Fraud in Asset Transfers
TIME WARNER: Allotting $300M for Securities Suit Settlement Fund
WORLD AIRWAYS: Court Certifies Nigeria Flights Contract Suit
Asbestos Alert
ASBESTOS LITIGATION: Markel Notes S$31.3M A&E Loss Reserves
ASBESTOS LITIGATION: SafeWork Probes Exxon for Risks at Refinery
ASBESTOS LITIGATION: Senate Sets US$140B-Fund Debate on Feb. 6
ASBESTOS LITIGATION: Maremont Corp.'s Claims Increase to 61,900
ASBESTOS LITIGATION: Maremont Corp. Charges Insurers $1M in 4Q05
ASBESTOS LITIGATION: Maremont Estimates Claims Liability at $47M
ASBESTOS LITIGATION: CT Court Junks Hartford Suit v. Reinsurers
ASBESTOS LITIGATION: UK Court Regards Plaques Victims Ineligible
ASBESTOS LITIGATION: Owens Corning Assumes PI Claims at $6.811B
ASBESTOS LITIGATION: Court Remands Epperson Suit v. Shipbuilders
ASBESTOS LITIGATION: Plumber Charged US$3,000 for Removal Breach
ASBESTOS LITIGATION: USG Corp. Agrees to Settle Suits for US$4B
ASBESTOS LITIGATION: U.S. Senate Leader to Oppose Fund Bill
ASBESTOS LITIGATION: Bill Supporters Blast Sen. Reid for Remarks
ASBESTOS LITIGATION: USG Corp. Reports US$1.3B Sales in 4Q2005
ASBESTOS LITIGATION: DE Court Awards Widow in Suit v. Champlain
ASBESTOS LITIGATION: VA Merchant Charged For Removal Conspiracy
ASBESTOS LITIGATION: Sensus Metering Defends Suits in MS Courts
ASBESTOS LITIGATION: American Standard Posts $10B Sales for 2005
ASBESTOS LITIGATION: Japan Compensation Bill Passes Lower House
ASBESTOS LITIGATION: Crown Tags US$458M Loss to Debt, Asbestos
ASBESTOS LITIGATION: Aussie Court Orders Retrial for Mine Worker
ASBESTOS LITIGATION: Alcoa Seeks to Junk Clothing Exposure Suit
ASBESTOS LITIGATION: Ex-Rail Worker Sues CSX, Others for Damages
ASBESTOS ALERT: DEP Charges Two MA Firms for Asbestos Violations
ASBESTOS ALERT: Rotunda to Pay GBP11T for Handling Violations
ASBESTOS ALERT: OR Agency Charges Firm $1,800 for Removal Breach
ASBESTOS ALERT: Omni-Pac Charged GBP50,000 For Asbestos Breaches
New Securities Fraud Cases
DOT HILL: Charles J. Piven Files Securities Fraud Suit in CA
DOT HILL: Goldman Scarlato Files Securities Fraud Suit in CA
FARO TECHNOLOGIES: Murray Frank Sets Lead Plaintiff Deadline
FARO TECHNOLOGIES: Scott + Scott Sets Lead Plaintiff Deadline
REPSOL YPF: Lerach Coughlin Lodges Securities Fraud Suit in N.Y.
REPSOL YPF: Schatz & Nobel Lodges Securities Fraud Suit in N.Y.
*********
ACE CASH: Employees Complain of Inadequate Rest, Meal Breaks
------------------------------------------------------------
Ace Cash Express, Inc. faces a purported class action lawsuit in
California county court over meal periods and rest breaks.
On November 10, 2005, Latoya Jackson filed in the Superior Court
for the City and County of Alameda, a putative class action
against the Company and some of its subsidiaries alleging, among
other things, that it failed to provide adequate meal periods
and rest breaks to employees as required under California law.
According to the Company, because the suit purports to be class
action, the amount of damages for which the Company might be
responsible is uncertain. In addition, the Company adds that
any such amount depends upon proof of the allegations and on the
number of persons who constitute the class of plaintiffs (if
permitted by the court).
ACE CASH: TX Court Dismisses Managers' FLSA Violations Lawsuit
--------------------------------------------------------------
Ace Cash Express, Inc. reports that the United States District
Court for the Eastern District of Texas, Marshall Division,
dismissed the class action styled, "Webb et al v. Ace Cash
Express, Inc.," which is alleging violations of the Fair Labor
Standards Act (FLSA).
Rebecca Webb and Pamela List filed the suit on June 13, 2005,
seeking to recover overtime wages allegedly due to "center
managers" and "managers-in-training" who regularly worked in
excess of 45 hours per week. On January 25, 2006, the suit was
dismissed.
The suit is styled, "Webb et al v. Ace Cash Express, Inc., case
no. 2:05-cv-00254-LED," filed in the U.S. District Court for the
Eastern District of Texas, Marshall Division, under Judge
Leonard Davis. Representing the Company is John Gray Harrison,
Ogletree Deakins Nash Smoak & Stewart - Dallas, 8117 Preston Rd,
700 Preston Commons, Dallas, TX 75225-4324, Phone: 214/987-3800,
Fax: 12149873927, E-mail: john.harrison@odnss.com. Representing
the plaintiffs is John Dale Sloan, Jr., Sloan & Monsour, P O
Drawer 2909, 101 East Whaley St, Longview, Tx 75606, Phone:
903/757-7000, Fax: 19037577574, E-mail: jsloan@sloanmonsour.com.
ALHAMBRA SCHOOL: Court Okays Gender Discrimination Settlement
-------------------------------------------------------------
Senior U.S. District Judge Dickran Tevrizian approved on Jan. 31
a settlement of the gender discrimination suit between Alhambra
High School and some of its female students, according to San
Luis Obispo Tribune.
Under the settlement, the school district and city of Alhambra
in Phoenix agreed to build two new softball fields for girls,
fund girls' and boys' teams equitably, give female athletic
teams equal practice and competition time at athletic facilities
and give girls the same quality of coaches given to boys, the
report said.
The case called Title IX lawsuit, Cruz v. Alhambra School
District was settled in December and given preliminary approval
by a judge. It was launched by four female Alhambra High
athletes against the school district, the city and the school
board in 2004. The students, with lead plaintiff Lauren Cruz,
17, who plays softball, demanded equal sports facilities and
equipment for boys and girls from school administrators. The
suit later included all present and female students of the
school.
The suit was styled, "Lauren M. Cruz et al. v. Alhambra School
District et al., Case No. 2:04-cv-01460-DT-Mc," filed in the
United States District Court for the Central District of
California, under Judge Dickran Tevrizian with referral to Judge
James W. McMahon. Representing the Plaintiff/s are, Vicky L.
Barker and Nancy M. Solomon, Californaia Women Law Center, 3460
Wilshire Boulevard, Suite 1102, Los Angeles, CA 90010, Phone:
213-637-9900; and Claudia Center, Elizabeth Kristen and Patricia
A. Shiu, Legal Aid Society-Employment Law Ctr., 600 Harrison St,
Ste. 120, San Francisco, CA 94107, Phone: 415-864-8848, E-mail:
ekristen@las-elc.org. Representing the Defendant/s are:
(1) John W. Allen, Gary R. Gibeaut and Nancy Ann Mahan-Lamb
of Gibeaut Mahan and Briscoe, 6701 Center Drive West,
Suite 611, Los Angeles, CA 90045, Phone: 310-410-2020,
Fax: 310-410-2010;
(2) Elizabeth R. Feffer and Joseph M. Montes of Burke
Williams and Sorensen, 444 South Flower St., Suite
2400, Los Angeles, CA 90071-2953, Phone: 213-236-0600,
Fax: 213-236-2700, E-mail: jmontes@bwslaw.com;
(3) Harold W Potter of Jones & Mayer, 3777 N. Harbor Blvd.,
Fullerton, CA 92835, Phone: 714-446-1400, Fax: 714-446-
1448.
ANDERSON PRIVATE: T-Mobile Pursues Attack on Call Record Selling
----------------------------------------------------------------
T-Mobile USA, Inc. filed stipulated permanent injunctions
against two cell phone data brokers as part of efforts to help
protect the privacy of wireless customers.
T-Mobile filed the stipulated permanent injunctions in King
County, Washington, Superior Court against Anderson Private
Investigators and Global Information Group, Inc., two companies
T-Mobile believes unlawfully obtained and sold call records.
The injunctions prohibit the two entities, and related companies
and individuals, from engaging in this allegedly illicit
practice, including barring advertising that they can or will
obtain non-public information regarding any wireless telephone
subscribers.
"T-Mobile will continue to pursue organizations and individuals
that breach our customers' right to privacy," said Dave Miller,
senior vice president and general counsel of T-Mobile USA.
"This is a principle we must aggressively defend."
Previously, T-Mobile filed a suit and obtained Temporary
Restraining Order in the same Court to stop Locatecell.com, and
related companies and individuals, from allegedly engaging in
such illegal behavior. Prior to that, T-Mobile issued numerous
cease and desist letters against companies that were believed to
have illegally obtained and sold calling records. T-Mobile
continues a thorough internal investigation into the actions of
these companies.
T-Mobile endorses the need for federal legislation that
strengthens penalties against anyone that obtains, sells or
distributes, through fraudulent means, the private calling
records of mobile phone customers.
On the Net: T-Mobile USA, Inc.: http://www.t-mobile.com;
Anderson Private: http://www.andersoninvestigations.us/;and
Global Information Group, Inc.: http://www.global-
orders.com/newsignup.asp.
ANDRX CORP: Fla. Judge Chooses Lead Plaintiff in Investors' Suit
----------------------------------------------------------------
U.S. District Judge William P. Dimitrouleas appointed Pioneer
Investment Management Group, a Milan, Italy-based investment
management firm as lead plaintiff in an investors' lawsuit
against Andrx Corp. for failing to disclose serious problems
with its Davie manufacturing plant, The South Florida Sun-
Sentinel reports.
After Plantation, Florida-based Company revealed the problems on
Sept. 5, noting the U.S. Food and Drug Administration (FDA) had
suspended new generic drug approvals, Company stock sank more
than $3 the next day from $17.94 to $14.89. That, according to
its suit, resulted in significant losses to unsuspecting
investors, including Pioneer.
Attorneys are seeking class-action status, saying that all
Company investors between March 9, 2005, and Sept. 5, 2005,
similarly were hurt financially by the company's failure to
disclose the extent of problems discovered during three
government inspections. Attorney Kenneth Vianale of Boca Raton
told The South Florida Sun-Sentinel, "The allegations are that
the company knew full well it was in big trouble with the FDA
based on inspections of the plant -- that there were red flags
hanging out there," but Andrx's previous public statements never
revealed a problem related to good manufacturing practice. Mr.
Vianale's law firm, Vianale & Vianale, is serving as liaison
counsel to the New York firm of Murray, Frank and Sailer LLP,
which represents Pioneer.
Judge Dimitrouleas, who agreed that Pioneer had legal standing
in the case, declared the appointment down last month. He will
now await the Company's response to the lawsuit, which could
include a motion to dismiss. Once he rules on that motion, both
sides will gather evidence and question possible witnesses under
oath before the case goes to trial in a process that Mr. Vianale
says could take years.
In the meantime, the FDA is assembling an inspection team to re-
inspect the Company plant and examine its manufacturing
processes. That inspection should begin before March 1, an FDA
official said.
For the suspension on new drug approvals to be lifted, the
Company needs to correct more than 100 deficiencies related to
the production of a small number of drugs studied by FDA
inspectors. It must also show that its corrective actions carry
over to the production of other drugs at the plant.
For more details, contact Milberg Weiss Bershad Hynes & Lerach,
LLP (Boca Raton, FL), 5355 Town Center Road - Suite 900, Boca
Raton, FL, 33486, Phone: 561.361.5000, Fax: 561.367.8400 and
Vianale & Vianale, LLP, The Plaza - Suite 801, 5355 Town Center
Road, Boca Raton, FL, 33486, Phone: 561.391.4900, Fax:
561.368.9274, E-mail: info@vianalelaw.com.
APPLE COMPUTER: IPod User Claims Player Can Damage Hearing
----------------------------------------------------------
A Louisiana man is suing Apple Computer Inc. on allegations its
Ipod music player can cause hearing loss to users, according to
The Canadian Press.
John K. Patterson of Louisiana filed the suit in the U.S.
District Court in San Jose, California, complaining that Ipod
players are "inherently defective," and they did not carry
adequate warning regarding the health risk. According to the
Canadian Press, the complaint further claims the Ipod players
can produce sounds of more than 115 decibels, a volume that can
damage the hearing of a person exposed to the sound for more
than 28 seconds per day.
Mr. Patterson is seeking class action status for the case, and
is calling for Apple to take measures to make the product safer.
He did not specify how much he is asking as compensation for
damages. According to the report, he also did not say whether
he suffered hearing loss from the device.
The suit was styled "Patterson v. Apple Computer (5:06-cv-00699-
PVT)," filed in the U.S. District Court for the Northern
District of California under Judge Patricia V. Trumbull.
Representing the plaintiff(s) are: Steve W. Berman of Hagens
Berman Sobol Shapiro, LLP, 1301 Fifth Avenue, Suite 2900,
Seattle, WA 98101, Phone: 206-623-7292; Fax: 206-623-0594; E-
mail: steve@hbsslaw.com; and Lee M. Gordon of Hagens Berman
Sobol Shapiro, LLP, 700 South Flower Street, Suite 2940, Los
Angeles, CA 90017-4101, Phone: 213/330-7150; Fax: 213/330-7152;
E-mail: lee@hbsslaw.com.
Apple Computer Inc. on the Net: http://www.apple.com.
BABIES "R": Baby Products Retailers Complain of Price Fixing
------------------------------------------------------------
Six federal consumer class action cases are lodged in New
Jersey, Pennsylvania and Illinois in relation to an alleged
practice by Babies "R" Us of demanding minimum pricing levels
for merchandise, according to Newark Star-Ledger.
Newark Star mentioned the case as it reports of a complaint
against the scheme filed by two baby item retailers in a federal
court. According to the report, Britax infant car seat sold
online at Babyage.com, the Baby Club of America and Babies "R"
Us were all priced at $299.99. Both Babyage.com and Baby Club
alleged in a lawsuit that Babies "R" Us and parent Toys "R" Us
are forcing at least six manufacturers into demanding minimum
pricing levels for their merchandise
According to the suit, the strategy allows Babies "R" Us to
continue to compete with other retailers who could have sold
high-end cribs, strollers and baby carriers more cheaply. The
suit claims Babies "R" Us threatened to withhold their products
if retailers did not agree on the minimum pricing. Wayne-based
Toys "R" Us, in a statement, described the claims as without
merit.
BERKELEY PREMIUM: Facing Lawsuits over Dietary Supplements
----------------------------------------------------------
Federal authorities are suing Berkeley Premium Nutraceuticals
over alleged false advertising and illegal billing practices,
according to the Associated Press.
The target of the suit filed by the Federal Trade Commission is
Berkeley's dietary supplements Avlimil and Rogisen, which the
firm claimed to have sexual and night vision enhancing benefits.
The suit alleged that the claimed effects are untrue. It also
argued that the company is billing debit and credit cards
without customers' permission.
The lawsuit follows the admission of conspiracy to commit mail
and wire fraud by four former officials at Berkeley. The
company is currently under investigation by the FBI, the
Internal Revenue Service and the Food and Drug Administration.
Its owner Steve Warshak, his wife Carri, and mother Harriet, as
well as Cincinnati lawyer Paul Kellogg and related companies are
defendants in the FTC lawsuit. Berkeley is also facing class-
action consumer legal action and suits filed by at least six
states, including Ohio.
The case is styled "United States of America v. Contents of
Nationwide Life Insurance Annuity Account No. 0961 in the name
of Steve E. Warshak et. al (1:05-cv-00196-SJD-TSH)," filed in
the U.S. District Court for the Southern District of Ohio under
Judge Susan J. Dlott, with referral to Timothy S. Hogan.
Representing the defendant(s) are: Elissa J. Germaine of Latham
& Watkins, LLP of 505 Montgomery Street, Suite 2000, San
Francisco, CA 94111, Phone: 415-395-8256; E-mail:
elissa.germaine@lw.com; and Shane H. Freedman of Latham &
Watkins LLP, One Newark Center, 16th Floor, Newark, NJ 07102,
Phone: 973-639-7532; E-mail: shane.freedman@lw.com.
Representing the plaintiff are William E. Hunt, Assistant U.S.
Attorney, Atrium II, 221 E Fourth Street, Suite 400, Cincinnati,
OH 45202, Phone: 513-684-3711, Phone: william.hunt@usdoj.gov;
and Donetta Donaldson Wiethe, U.S. Department of Justice - 1,
Atrium II, 221 E Fourth Street, Suite 400, Cincinnati, OH 45202,
Phone: 513-684-3711, E-mail: donetta.wiethe@usdoj.gov.
BRADLEY PHARMACEUTICALS: Faces Consolidated N.J. Securities Suit
----------------------------------------------------------------
Bradley Pharmaceuticals, Inc. along with certain of its officers
and directors, were named defendants in thirteen federal
securities lawsuits that were consolidated on May 5, 2005 in the
United States District Court for New Jersey.
In the amended consolidated complaint, filed on June 20, 2005,
the plaintiffs allege violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, arising out of disclosures that plaintiffs allege
were materially false and misleading. Plaintiffs also allege
that the Company and the individual defendants falsely
recognized revenue. Plaintiffs sought an unspecified amount of
compensatory damages in an amount to be proven at trial.
The Company and the individual defendants filed its initial
response on July 20, 2005 seeking to dismiss the amended
consolidated complaint in its entirety with prejudice. Briefing
for that motion was completed on September 7, 2005, and the
parties are currently waiting for a decision from the District
Court. Discovery in the federal securities class action is
stayed and will not be scheduled until the Company's motion to
dismiss is adjudicated.
The suit is styled, "Esposito v. BRADLEY PHARMACEUTICALS, INC.
et al," filed in the U.S. District Court for the District of New
Jersey, under Judge Faith S. Hochberg with referral to Judge
Patty Shwartz. Representing the Plaintiff/s is JOSEPH J.
DEPALMA of LITE, DEPALMA, GREENBERG & RIVAS, LLC, TWO GATEWAY
CENTER, 12TH FLOOR, NEWARK, NJ 07102-5003, Phone: (973) 623-
3000, E-mail: jdepalma@ldgrlaw.com. Representing the
Defendant/s is JAMES P. FLYNN of EPSTEIN, BECKER & GREEN, PC,
TWO GATEWAY CENTER, 12TH FLOOR, NEWARK, NJ 07102-5003, Phone:
(973) 642-1900, E-mail: jflynn@ebglaw.com.
BRADLEY PHARMACEUTICALS: Faces Consolidated N.J. Derivative Suit
----------------------------------------------------------------
Bradley Pharmaceuticals, Inc. along with certain of its officers
and directors, were named as defendants in two related New
Jersey state court shareholder derivative actions that were
filed on April 29, 2005 and May 11, 2005, alleging breach of
fiduciary duty and other claims arising out of substantially the
same allegations made in the federal securities class action
litigation.
Plaintiffs seek an unspecified amount of damages in addition to
attorneys' fees. On July 19, 2005, with the parties' agreement,
these two related state shareholder derivative actions were
consolidated in the Superior Court of New Jersey and stayed in
their entirety pending a decision on the motion to dismiss the
consolidated federal securities class action lawsuit styled,
"Esposito v. BRADLEY PHARMACEUTICALS, INC. et al," which was
filed in the U.S. District Court for the District of New Jersey.
CALIFORNIA: Court Tackles Appellate Review Procedures under CAFA
----------------------------------------------------------------
The United States Court of Appeals for the 9th Circuit became
the first circuit to issue a ruling closely examining the
language regarding appellate review procedures under the Class
Action Fairness Act (CAFA) of 2005, according to McGlinchey
Stafford of http://www.cafalawblog.com/.
Declaring that a portion of the literal language of CAFA is at
odds with Congressional intent, the 9th Circuit held that
parties must pursue appellate review of a remand "not more than
seven court days after the district court's order," despite the
text of CAFA which says "not less . . . ."
The case styled, "Amalgamated Transit Union Local 1309, AFL-CIO
v. Laidlaw Transit Services, Inc., No. 05-56567," concerns a
labor dispute over California's meal and rest period laws, which
landed in San Diego Superior Court in April of 2005, some two
months after CAFA became law. The defendants removed, invoking
traditional diversity jurisdiction, federal question
jurisdiction and expanded diversity jurisdiction under CAFA.
The district court denied the plaintiffs' motion to remand on
October 5, and the plaintiffs sought appellate review by filing
a notice of appeal with the district court on October 11.
Subsequently, the defendant moved to dismiss the appeal in an
attempt to shut down the union's appeal efforts, arguing that
review is discretionary. The defendants also argued that the
plaintiffs had failed to comply with the permissive appeal
requirements of Federal Rule of Appellate Procedure 5. In
response, the plaintiffs opposed the motion to dismiss, and
filed their petition for permissive appeal on November 17, six
days after the lower court's adverse ruling.
According to 28 U.S.C. Section 1453(c)(1), a court of appeals
"may accept an appeal" from an order granting or denying remand
"if application is made to the court of appeals not less than 7
days after entry of the order." Considering whether "less"
really means "more," the 9th Circuit expressed concern over the
quandary: "We remain somewhat troubled that, in contrast to most
statutory construction cases where we are usually asked to
construe the meaning of an ambiguous phrase or word, we are here
faced with the task of striking a word passed on by both Houses
of Congress and approved by the President, and replacing it with
a word of the exact opposite meaning."
The court observed that a literal interpretation of CAFA's "not
less than" wording would, in effect, give aggrieved parties
unlimited time to seek appellate review. The court thus
declared an ambiguity in the language, which allowed it to
consider the legislative history of CAFA, and then found that a
literal interpretation of the language would be contrary to the
Act's legislative history, which shows that Congress backed away
from a draft provision concerning mandatory appellate review.
The three judge panel (Judges Alfred Theodore Goodwin, Atsushi
Wallace Tashima and Raymond C. Fisher) in this unsigned opinion
concluded that a judicial rewrite of the statute was the only
way to square the law with Congress's intent. The court's
search for guidance in an earlier Ninth Circuit decision, "Bush
v. Cheaptickets, Inc., 425 F.3d 683 (9th Cir. 2005)" was to no
avail, as the petition for permission to appeal in "Bush" was
filed on the seventh day, avoiding a conflict with CAFA's "not
less than" language.
The court also looked to the Tenth Circuit's decision in
"Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1093 no. 2
(10th Cir. 2005)," which concluded that the "not less than"
language was a "typographical error," and that "less" really
meant "more." Like its sister circuit, the Ninth Circuit
declared, "there is apparently no logical reason for the choice
of the word `less' in the statute."
Addressing the discretionary review issue, the court, after
reviewing the language of the statute and the legislative
history, found that Congress intended that courts of appeal have
discretionary review of district court rulings in remand
battles, and for that reason, applied Federal Rule of Appellate
Procedure 5 governing permissive appeals as the standard for
appellate review of CAFA remand decisions. However, though the
permissive appeal provisions of Rule 5 applied, the court waived
the technical requirements of the rule in this case, noting "our
duty to dismiss for failure to comply with these particular
rules is not mandatory." Even so, the court stressed that it
was not expanding the time limit for seeking review, and
observed that the plaintiffs had set the process in motion
within the court-interpreted seven-day time limit.
The suit is styled, "Amalgamated Transit Union Local 1309, AFL-
CIO v. Laidlaw Transit Services, Inc., Case No. 05-CV-1199," on
petition for leave to appeal from the U.S. District Court for
the Southern District of California under Judge Irma E. Gonzalez
with referral to Magistrate Judge Cathy Ann Bencivengo.
Representing the Plaintiff/s is Scott M, De Nardo of Neyhart
Anderson Freitas Flynn and Grosboll, 44 Montgomery St., Suite
2080, San Francisco, CA 94104, Phone: (415) 677-9445 or (415)
677-9440. Representing the Defendant/s is Theodore R. Scott
Luce Forward Hamilton and Scripps, 11988 El Camino Real, Del Mar
Gateway, Suite 200, San Diego, CA 92130-2594, Phone:
(858) 523-4325 or (858) 720-6300.
For more details, visit: http://ResearchArchives.com/t/s?4db
(Amalgamated Transit Union Local 1309 Opinion),
http://researcharchives.com/t/s?4dc(Bush Opinion) and
http://researcharchives.com/t/s?4d9(Pritchett Opinion).
CALIFORNIA: Judge Approves Settlement of ADA Suit V. Los Angeles
----------------------------------------------------------------
U.S. District Judge Dickran M. Tevrizian approved the final
settlement of an Americans With Disabilities Act (ADA) class
action, requiring Los Angeles County and the Los Angeles
Superior Court to take specific steps to make local courthouse
facilities more accessible to the disabled, The Metropolitan
News-Enterprise reports.
The settlement represents a final resolution of claims brought
four years ago by four disabled individuals, including Santa
Monica attorney David G. Geffen, who is paralyzed as a result of
a spinal cord injury and litigates disability, employment, and
personal injury cases. It essentially addresses access to
courthouses themselves, as well as restrooms, courtrooms, and
elevators. A number of changes were already implemented as a
result of a partial settlement of the case, which was reached at
a 2003 settlement conference.
With respect to restrooms, the court and county agreed that each
existing courthouse will have at least one pair of public
restrooms meeting federal accessibility standards under the ADA
for each four floors. In addition, under the settlement some
modifications of jury assembly and jury deliberations room
restrooms were to be made as well as the establishment of a
schedule for compliance. At the Stanley Mosk courthouse, for
example, the second floor east and seventh floor restrooms must
be brought into compliance within 30 months. The court, under
the settlement, will also be required to train employees to be
sensitive to the needs of disabled persons for adequate time to
reach and use accessible restrooms.
The agreement also includes provisions regarding witness
facilities. Where a witness is unable to access the existing
witness box, arrangements will be made to have the witness
testify in full view of the judge and jury using a microphone
that does not have to be held. As per rules of court, witnesses
will also be allowed to request that a proceeding be moved to a
courtroom with an accessible witness stand. However, the court
may deny that request if no such courtroom is available or if
there would be an undue burden on the court.
The plaintiffs were represented by attorneys Eve L. Hill, Paula
D. Pearlman, and Johanna Pirko of the Disability Rights Legal
Center at Loyola Law School, formerly the Western Law Center for
Disability Rights; Dan Stormer and C. Virginia Keeny of Hadsell
& Stormer in Pasadena; Nora Quinn, whose offices are in
Pasadena; and ACLU lawyers Mark Rosenbaum and Peter Eliasberg.
Principal Deputy County Counsel Kathleen Dougherty Felice and
Brenton F. Goodrich and Ira A. Weinreb of Parker, Milliken,
Clark, O'Hara & Samuelian represented the county, while the
court's attorneys were Gregory F. Hurley and Mike Drury of the
Costa Mesa office of Greenberg Traurig.
The suit is styled, "Deborah Miles, et al v. Los Angeles County,
et al, Case No. 2:02-cv-03932-DT-JTL," filed in the U.S.
District Court for the Central District of California under
Judge Dickran Tevrizian with referral to Jennifer T. Lum.
Representing the Plaintiff/s is Peter J. Eliasberg of ACLU
Foundation of Southern California, 1616 Beverly Blvd., P.O. Box
26907, Los Angeles, CA 90026-5752, Phone: 213-977-9500, E-mail:
peliasberg@aclu-sc.org and Eve L. Hill of Western Law Center For
Disability Rights, 919 S. Albany St., Los Angeles, CA 90015,
Phone: 213-736-1031. Representing the Defendant/s is Michael
Drury of Greenberg Traurig, 650 Town Center Drive, Suite 1700,
Costa Mesa, CA 92626, Phone: 714-708-6500, E-mail:
drurym@gtlaw.com; and Brenton F. Goodrich of Parker Milliken
Clark O'Hara & Samuelian, 333 S. Hope St., 27th Fl., Los
Angeles, CA 90071-1488, Phone: 213-683-6500.
CHEVRON CORPORATION: Fraud Claimed on Failure to Disclose Suits
---------------------------------------------------------------
Environmental group Amazon Watch has requested the Securities
and Exchange Commission to investigate Chevron Corp. for
allegedly failing to report a potential multi-billion dollar
liability arising from toxic contamination in the Ecuadorian
Amazon.
In a letter to SEC Chairman Christopher Cox, Amazon Watch
accused Chevron of breaking federal law and SEC rules by failing
to inform shareholders about a historic class action brought in
Ecuador by 30,000 people living in an area devastated by
extensive oil-related contamination.
The lawsuit alleges that Texaco (now Chevron) dumped 18 billion
gallons of toxic waste, containing 30 times more crude than the
Exxon Valdez spill, as it drilled for oil. Cancer rates, birth
defects and miscarriages have shot up consequently, Amazon Watch
says. A comprehensive clean-up has been estimated to be $6
billion not including health or personal damage claims.
The letter asserts that Chevron faces potential losses greater
than 10 percent of its total assets. The case could produce the
largest judgment ever against an oil company.
Atossa Soltani, Amazon Watch Executive Director said: "By
failing to disclose this massive and growing liability in its
filings, we believe Chevron management has misrepresented the
financial health of the company to shareholders and thereby
distorted the value of Chevron shares in the markets.
"The logical conclusion is that all shareholders who have
purchased Chevron stock since the case was accepted by the
Ecuadorian Court in 2003 may well have a legitimate claim of
fraud."
In a legal memo accompanying the letter, Amazon Watch alleges:
(1) Chevron failed to mention the lawsuit in its annual
10-K filings;
(2) Chevron's omission of the litigation is in direct
breach of Item 303 of SEC Regulation S-K;
(3) Chevron's silence breaches Item 103 of SEC Regulation
S-K, requiring disclosure of substantial "material
pending legal proceedings"; and
(4) Chevron's lead defense attorney has a conflict of
interest for negotiating a previous controversial
"release" with the Ecuadorian government.
Scientific results presented to the court show illegal levels of
toxic contamination at all 22 field sites, in some cases 2,500
times higher than EPA norms.
For details of the lawsuit, see: http://www.chevrontoxico.com.
Chevron Corp. on the Net: http://www.chevron.com.
CROWN COLLEGE: Jury Awards Student Damages for Misinformation
-------------------------------------------------------------
A Pierce County Superior Court jury found Tacoma-based Crown
College in violation of the state Consumer Protection Act in a
case of one student over school-to-school transfer of credits,
The NewsTribune.com reports.
As a partial victory for her and others who have filed class
action against the school, the jury said Latesha Gonzales may
have been misled to believe her school credits would transfer to
Gonzaga University. However, the jury awarded her only $2,000
in damages and dismissed a claim of fraud against the school,
saying there wasn't enough evidence to suggest it was
intentional. Crown waived $3,400 it said Ms. Gonzalez still
owed the school.
Ms. Gonzales had sought damages to cover $3,465 for a student
loan, plus lost wages, travel expenses and compensation for
mental anguish. Her lawyer Karen Lundahl plans to ask Judge
Kathryn Nelson to boost her damage award to $8,000 and to
require Crown to pay her attorneys fees, according to the
report. She will also ask the judge for an injunction requiring
Crown College to cease deceptive practices. Other students have
filed a class action against the school, claiming they were also
misled regarding the credit transfers, the quality of a Crown
education and their job prospects after graduation. The school
denied the claims. Crown's attorney is Grant Kinnear.
Though Crown is nationally accredited by an agency that oversees
career schools, traditional colleges, such as the University of
Washington or the University of Puget Sound, are regionally
accredited and most do not accept transfer credits from
nationally accredited schools (Class Action Reporter, March 23,
2005).
EPIX PHARMACEUTICALS: Court Dismisses Securities Fraud Lawsuit
--------------------------------------------------------------
Judge Patti Saris of the U.S. District Court for the District of
Massachusetts granted EPIX Pharmaceuticals, Inc.'s Motion to
Dismiss for Failure to Prosecute the previously disclosed
shareholder class action lawsuit against the company. Judge
Saris issued the dismissal without prejudice after a hearing on
Jan. 31.
On January 27, 2005, a securities class action was filed on
behalf of persons who purchased the Company's common stock
between July 10, 2003 and January 14, 2005 (Class Action
Reporter, Aug. 24, 2005). The complaint alleged that the
defendants violated Securities Exchange Act of 1934 by issuing a
series of materially false and misleading statements to the
market throughout the class period, which statements had the
effect of artificially inflating the market price of the
Company's securities.
After this initial complaint was filed, other similar actions
were filed against the Company and the same officers in the same
court. One of these later-filed complaints purports to be
brought on behalf of persons who purchased the Company's common
stock between March 18, 2002 and January 14, 2005.
ESTEE LAUDER: Faces Amended FL Suit Alleging FDTPA Violations
-------------------------------------------------------------
Estee Lauder Companies, Inc. faces an amended lawsuit in Miami
federal court under the Florida Deceptive Trade Practices Act
(FDTPA).
The original nationwide class action was filed on June 2005 in
the United States District Court for the Southern District of
Florida against one of the Company's subsidiaries. The
plaintiff, purporting to represent a nationwide class of
individuals "who have purchased skin care products from
Defendant that have been falsely advertised to have an 'anti-
aging' or youth-inducing benefit or effect," seeks injunctive
relief as well as compensatory and punitive damages for alleged
breach of express and implied warranties, negligent
misrepresentation and false advertising and unfair business
practices.
In September 2005, the Company moved to dismiss that complaint.
As a result, plaintiff dismissed all of her original claims and
filed an amended complaint under the FDTPA. The Company again
filed a motion to dismiss, for which briefing was concluded in
December 2005.
The suit is styled, "Hutto v. Estee Lauder, Inc., Case No. 1:05-
cv-21489," filed in the U.S. District Court for the Southern
District of Florida under Judge Paul C. Huck. Representing the
Plaintiff/s is Steven Craig Marks of Podhurst Orseck Josefsberg
et al, City National Bank Building, 25 W. Flagler St., Suite
800, Miami, FL 33130-1780, Phone: 305-358-2800. Representing
the Defendant/s are, Michael V. Ciresi and Jan M. Conlin of
Robins Kaplan Miller & Ciresi, LaSalle Plaza, 800 LaSalle Ave.,
Suite 2800, Minneapolis, MN 55402-2015, Phone: 612-349-8500 and
612-349-8571; and Lawrence A. Farese of Robins Kaplan Miller &
Ciresi, 711 Fifth Avenue, Suite 201, Naples, FL 34102, Phone:
239-213-1973 and 239-430-7070.
ESTEE LAUDER: CA Court Gives Final OK to Antitrust Agreement
------------------------------------------------------------
The United States District Court for the Northern District of
California granted final approval to the settlement of a class
action filed against Estee Lauder Companies, Inc., and other
cosmetic manufacturers and retailers.
The suit was initially filed back in 1998 at the Superior Court
of the State of California in Marin County on behalf of all U.S.
residents who purchased prestige cosmetics products at retail
for personal use from eight department stores groups that sold
such products in the United States (the "Department Store
Defendants"). The suit alleged that the Department Store
Defendants, the Company and eight other manufacturers of
cosmetics (the "Manufacturer Defendants") conspired to fix and
maintain retail prices and to limit the supply of prestige
cosmetics products sold by the Department Store Defendants in
violation of state and Federal laws. The plaintiffs sought,
among other things, treble damages, equitable relief, attorneys'
fees, interest and costs. The suit was later removed to federal
court.
On March 30, 2005, the United States District Court for the
Northern District of California entered a Final Judgment
approving the settlement agreement the Company entered into in
July 2003 with the plaintiffs, the other Manufacturer Defendants
and the Department Store Defendants. The time to appeal that
judgment has not yet expired. Assuming no appeal, the Final
Judgment will result in the plaintiffs' claims being dismissed,
with prejudice, in their entirety in both the Federal and
California actions. There was no finding or admission of any
wrongdoing by the Company or any other defendant in this
lawsuit. The Company entered into the settlement agreement
solely to avoid protracted and costly litigation.
In connection with the settlement agreement, the defendants,
including the Company, will provide consumers with certain free
products and pay the plaintiffs' attorneys' fees. To meet its
obligations under the settlement, the Company took a special
pre-tax charge of $22.0 million, or $13.5 million after-tax,
equal to $.06 per diluted common share in the fourth quarter of
fiscal 2003. On December 31, 2005, the remaining accrual
balance was $17.0 million. The charge did not have a material
adverse effect on the Company's consolidated financial
condition.
The suit is styled, "Azizian et al v. Federated Department
Stores, Inc. et al, Case No. 4:03-cv-03359," filed in the United
States District Court for the Northern District of California,
under Judge Saundra Brown Armstrong. Representing the
plaintiffs is Guido Saveri of Saveri & Saveri, Inc., 111 Pine
Street, Suite 1700, San Francisco, CA 94111-5630, Phone:
415-217-6810, Fax: 415-217-6813, E-mail: guido@saveri.com.
Representing the Company is Larry S. Gangnes, 1420 Fifth Avenue,
Ste. 4100, Seattle, WA 98101-2338, Phone: (206) 223-7036, E-
mail: gangnesl@lanepowell.com.
EXCELSIOR PRIVATE: Faces Lawsuits in MD Over Trading Practices
--------------------------------------------------------------
Excelsior Private Equity Fund II, Inc., ("Managing Investment
Adviser") certain of its affiliates and others were named in
five class actions, which allege that the defendants allowed
certain parties to engage in illegal and improper mutual fund
trading practices, which allegedly caused financial injury to
the shareholders of certain mutual funds managed by the Managing
Investment Adviser.
Each suit seeks unspecified monetary damages and related
equitable relief. The Managing Investment Adviser, certain of
its affiliates and others have also been named in two derivative
actions alleging breach of fiduciary duty in relation to
allegedly illegal and improper mutual fund trading practices.
The class and derivative actions were transferred to the United
States District Court for the District of Maryland for
coordinated and consolidated pre-trial proceedings. The cases
now fall under the title, "In re Mutual Funds Investment
Litigation, MDL-1586."
In November 2005, the Maryland court dismissed many of the
plaintiffs' claims in both the investor class action suits and
in the derivative suits. Plaintiffs' claims under Sections
10(b) and 20 of the Securities Exchange Act and under Section
36(b) of the Investment Company Act, however, have not been
dismissed. Currently, these rulings are subject to
reconsideration motions by the parties. It is anticipated that
discovery will commence soon with respect to plaintiffs'
remaining claims.
For more details, visit: http://ResearchArchives.com/t/s?4d3.
GENERAL MOTORS: AR Court Nixes Cost Argument in Bryant Case
-----------------------------------------------------------
The United States District Court for the District of Western
Arkansas nixes General Motors Corporation's argument that cost
of class notice counts toward amount in controversy in the
defective parking brake class action styled, "Bryant v. General
Motors Corporation, No. 05-4028," according to McGlinchey
Stafford of http://www.cafalawblog.com/.
Alleging that General Motors Corporation distributed vehicles
with defective parking brakes, plaintiffs originally filed suit
on February 4, 2005, prior to the effective date of the Class
Action Fairness Act (CAFA) of 2005, in the Circuit Court of
Miller County, Arkansas.
Relying on CAFA and 28 U.S.C. 1332, the Company removed the
action to federal court on April 7, 2005. The plaintiffs timely
moved to remand the case back to state court. In his motion to
remand, plaintiff Bob Bryant argued that his claim did not meet
the $75,000 minimum amount in controversy threshold under
Section 1332, and that even if his claim met the minimum, the
court still lacked supplemental jurisdiction over the remaining
class members' claims, since none of their claims met the
$75,000 minimum.
U.S. District Judge Harry F. Barnes, who relied on the U.S.
Supreme Court's recent decision in Exxon Mobil Corp. v.
Allapatah Services, Inc., 125 S.Ct. 2611 (2005), observed that
supplemental jurisdiction over the balance of the class members
may be proper as long as Mr. Bryant's claims satisfied the
amount in controversy. In assessing whether Mr. Bryant's claim
met the required jurisdictional amount, Judge Barnes was forced
to venture into uncharted territory by considering the
relatively novel issue of whether the cost of class notice
should be included in the calculation of the amount in
controversy, noting, "the parties and the Court have found no
case law holding whether or not the cost of class notice in a
putative class action counts toward establishing the amount in
controversy."
Searching for guidance, the court relied on the only authority
it could find -- the express wording of Section 1332 itself --
and concluded that the cost of notice does not count toward the
amount in controversy.
The plaintiff then turned to the CAFA jurisdictional issue and
the date of "commencement," arguing that CAFA did not apply to
the class, since the case was "commenced" on February 4, 2005,
14 days before CAFA took effect, and not upon the date of
service of process or removal of the action. Relying largely on
"Pritchett v. Office Depot, Inc., 404 F.3d 1232 (10th Cir.
2005)," the court declared that the action was commenced before
CAFA became law, upon the initial filing of the action, and thus
could not remain in federal court under CAFA.
Judge Barnes distinguished the facts of this case from
"Pritchett", in that here, the Company removed the case within
the 30 day deadline under 28 U.S.C. 1446 (b), but dismissed
the distinction, averring "the fact that GMC timely complied
with 1446 has little bearing on the statutory construction of
the term `commenced' in 9 of CAFA." "Pritchett" thus remains
a formidable roadblock to federal jurisdiction under CAFA for
class actions initially filed before February 18, 2005, absent a
"Knudsen" exception event.
For more details, visit: http://ResearchArchives.com/t/s?4d8
(Bryant Opinion), http://ResearchArchives.com/t/s?4da(Exxon
Opinion), http://researcharchives.com/t/s?4d9(Pritchett
Opinion) and http://researcharchives.com/t/s?4d7(Knudsen
Opinion).
ILLINOIS: Fate of Pending Lawsuits Rest on $10B "Price" Ruling
--------------------------------------------------------------
If plaintiff attorneys succeed in restoring the $10 billion
class action verdict by Illinois Supreme Court in "Price vs.
Philip Morris," they will also rescue other class actions, The
Madison County Record reports.
As it stands, the high court's decision would draw out a stream
of motions to dismiss class actions. Three defendants in a
proposed Madison County class action already moved to dismiss
because of the Price decision when plaintiffs recently moved the
Court to reconsider it. Comfortex, Hunter Douglas and Springs
argued in "Alsup vs. 3-Day Blinds" that Price barred any claim
that they manufactured, distributed or sold dangerous mini
blinds.
In Price, the court ruled that tobacco companies did not
improperly advertise light cigarettes, because the Federal Trade
Commission specifically authorized the advertising. The court
found that Illinois state law precludes such suits when a
federal agency has acted in this way. The unanimous ruling
stated, "The FTC could, and did, specifically authorize all
United States tobacco companies to utilize the words 'low',
'lower', 'reduced' or like qualifying terms, such as 'light,'"
(Class Action Reporter, Dec. 19, 2005). The Supreme Court
broadened that protection by ruling that federal authority did
not have to be express in order to be specific.
The case is known more commonly as "Sharon Price and Michael
Fruth v. Philip Morris USA Inc." Madison County Circuit Court
Judge Nicholas Byron's $10.1 billion judgment in the case stated
that Philip Morris USA violated the provisions of Illinois'
Consumer Fraud Act, when it described Cambridge Lights and
Marlboro Lights as having "lowered tar and nicotine" content,
which, among other statements, had the effect of deceiving 1.1
million Illinois smokers into believing that the "lights" were
safer than the more full-flavored regular cigarettes, (Class
Action Reporter April 21, 2003).
The record-setting award spotlighted southern Illinois'
reputation for plaintiff-friendly rulings. Business groups and
other critics say downstate civil courts, especially in Madison
County, are too generous with verdicts against deep-pocketed
defendants, (Class Action Reporter Dec. 16, 2005).
In Alsup, defendants argue that the U.S. Consumer Product Safety
Commission specifically authorized the design of the mini
blinds. Under Illinois consumer fraud law, no claim of damages
is allowed for actions that a federal agency specifically
authorized.
If the mini blind suit continues it will set records. It
appears to propose a class with a population between that of the
United States and that of India. Jeffrey Lowe of Clayton filed
it last Feb. 17, 2005 for Ronald Alsup of Edwardsville and
Robert Crews of Granite City.
Mr. Lowe wrote that cords on the blinds strangled 339 persons in
30 years, but the complaint sought damages for the living rather
than the dead. He further wrote, "The class is comprised of
hundreds of millions of individuals," and added that a billion
sets were in use in the United States. Mr. Lowe accused 61
defendants of negligence, consumer fraud, breach of implied and
expressed warranties, and civil conspiracy.
Most defendants filed motions to dismiss on Sept. 28, 2005
arguing that federal law pre-empted the claims. Attorney John
Briggs of St. Louis wrote for Marietta Drapery and Window
Covering that plaintiffs identified no connection between their
alleged injuries and his client's products or actions. He
specifically wrote, "Any action by a state court to ban all mini
blinds - exactly what the CPSC has decided not to do - would
frustrate the accomplishment and purpose of Congress' carefully
constructed regulatory scheme for consumer products."
A few defendants settled, and Circuit Judge Daniel Stack
dismissed them by joint stipulation. Judge Stack signed May
Department Stores out of the case on Jan. 27.
LIBERTY MUTUAL: Appeals Court Says CAFA Applies to Knudsen Suit
---------------------------------------------------------------
The United States Court of Appeals for the 7th Circuit recently
ruled that federal jurisdiction under the Class Action Fairness
Act (CAFA) of 2005 is proper for the case entitled, "Knudsen v.
Liberty Mutual Insurance Co., No. 05-8037," according to
McGlinchey Stafford of http://www.cafalawblog.com/.
Twice shot down for trying to remove on the basis of claimed
federal jurisdiction under the CAFA during removal battles in
federal district court, and shot down once before by the 7th
Circuit in one of the earliest of the circuit courts of appeals'
decisions interpreting CAFA, the Company now persuaded the court
that the newly amended class action satisfied the requirements
for federal jurisdiction under CAFA.
The new and possibly influential decision, penned by Judge Frank
H. Easterbrook, radically changes the course of the case, which
began in Illinois state court in March of 2000. The plaintiffs
asserted claims based on the methods Liberty Mutual allegedly
used to calculate reimbursement of medical expenses. The
plaintiffs sought to expand the class (post CAFA) on February
25, 2005, by including the insureds of Liberty Mutual Fire
Insurance Company, which was not a named defendant.
Contending that amending the class to include claims against a
previously unnamed defendant commenced a new cause of action
post-CAFA, the Company petitioned for removal, but was initially
unsuccessful in making the removal stick. The district court
remanded, and the Seventh Circuit affirmed in June 2005,
declaring: "Liberty Mutual Insurance Company cannot remove five
years after this suit was commenced just because a non-party
corporate sibling has been mentioned in plaintiffs' latest
papers."
However, the Seventh Circuit left the door open to removal in
its first opinion, if new claims were asserted against the
Company that did not relate back to the original petition, a new
cause of action could be "commenced" under CAFA and thus,
removal under CAFA may be proper. Logically, if the plaintiffs
asserted new claims not based on the same underlying acts as the
original pre-CAFA complaint, a new cause of action would
commence and removal could be successful.
The Company seized on its chance after the state court judge
certified the most recent amendments to the class, which covered
claims involving all of its affiliates and subsidiaries, claims
which were not based on the same underlying acts as the claims
in the original complaint. The Company again petitioned for
removal, only to suffer yet another remand by the district court
in December 2005.
The Company immediately appealed the ruling to the 7th Circuit,
hoping that this was just the scenario to which the court had
alluded in the Court's June 2005 opinion. Since the class
certification order was entered on September 29, 2005, "well
after the Class Action Fairness Act's effective date," the only
issue was whether the newly amended class claims related back to
the original complaint.
Since the original complaint did not provide the Company with
notice of claims based on acts performed by its newly named
affiliates and subsidiaries, the 7th Circuit concluded that the
amended class did not relate back to the pre-CAFA complaint.
Judge Easterbrook declared: "What causes the class definition of
September 2005 to initiate new claims is the fact that Liberty
Mutual does not adjust all demands for payment of all of its
affiliates' policies." The original March 2000 state court
filing, Judge Easterbrook added, "did not even hint that Liberty
Mutual might be accountable for underpayments" on claims for one
affiliate adjusted under a different system some 15 years
earlier.
Judge Easterbrook seemed to scold both the state court judge and
the plaintiffs, while validating CAFA's purpose: "The conduct of
plaintiffs and the state court judge in this litigation, turning
an arguable error in discovery into a sprawling proceeding in
which Liberty Mutual will be required to pay on account of other
insurers' decisions taken long ago under different rules . . .
illustrates why Congress enacted the Class Action Fairness Act."
Thus, in concluding, the court granted the petition for leave to
appeal, and directed the district court to revoke the remand and
decide the case on its merits.
The suit is styled, "Kirsten Knudsen, et al. v. Liberty Mutual
Insurance Company, No. 05-8010," on petition for leave to appeal
from the U.S. District Court for the Northern District of
Illinois, Eastern Division, D.C. No. 05 C 01849, Judge Ruben
Castillo presiding. Representing the Plaintiff/s is Robert A.
Holsten of Holstein Law Offices, LLC, 19 South LaSalle, Suite
1500, Chicago, IL 60603, Phone: (312) 906-8000. Representing
the Defendant/s is George Mario Velcich of Belgrade & O'Donnell,
PC, 20 North Wacker, Suite 1900, Chicago, IL 60606, Phone:
(312) 422-1700, E-mail: gvelcich@bodpc.com.
For more details on the opinion, visit:
http://researcharchives.com/t/s?4d7.
NORTEL NETWORKS: Continues Effort to Settle Securities Lawsuits
---------------------------------------------------------------
Nortel(x) Networks Corporation said it cannot predict whether
the mediation it entered in relation to two federal class
actions will result in a global settlement.
The company issued the statement as it elected to proceed with a
binding commitment for a new one year credit facility of US$1.3
billion. Nortel said if continues to pursue important
objectives, including the ongoing mediation efforts relating to
two of its significant pending class action lawsuits in the U.S.
In November 2005, Nortel Networks Corporation entered mediation
in relation to the consolidated securities class action filed
against it in the U.S. District Court for the Southern District
of New York (Class Action Reporter, Nov. 16, 2005).
The class actions were initially filed on behalf of shareholders
who acquired Nortel Networks securities between Oct, 24, 2000
and Feb. 15, 2001. The suits allege, among other things,
violations of U.S. federal and Canadian provincial securities
laws.
In September 2005, the company said a mediator has been jointly
appointed by two U.S. District Court Judges presiding over two
class action lawsuits pending in the U.S. District Court for the
Southern District of New York.
OHIO: Lawsuit over August 2005 Styrene Leak Moves Toward Trial
--------------------------------------------------------------
Attorneys involved in an Ohio lawsuit over a chemical that
leaked from a parked rail car in the East End, which forced the
evacuation of nearby homes and businesses for three days, said
that the case is moving one step closer to a trial,
ChannelCincinnati.com reports.
On August 28, 2005 a tanker owned by Houston-based Westlake
Chemical Corporation, leaked vapor from its load of styrene, a
chemical that is used to make plastics, synthetic rubber and
resins, which is a highly flammable liquid hazardous to breathe
in gaseous form. Residents in the area sued Westlake Chemical,
Indiana and Ohio Railway Corporation and Kinder Morgan Liquid
Terminals over the leak, (Class Action Reporter, Nov. 22, 2005).
The plaintiffs, both residents and business owners from Linwood
and the East End, were kept out of their neighborhoods for two
nights in late August as the railcar spewed dangerous levels of
styrene into the air.
The judge recently set the deadline for a settlement with the
defendants, but so far no agreement has been reached between
residents and the companies. Alan Statman, an attorney for the
plaintiffs told ChannelCincinnati.com, "From their point of
view, the longer they wait, the less money they have to spend."
The companies have paid about $2 million so far to the residents
of 800 homes and workers in 100 businesses that had to evacuate.
However, the class-action suit includes thousands of plaintiffs.
Defense attorneys argue that the case doesn't merit class-action
status, so a judge will rule on their motion during a Feb. 10,
2006 hearing. According to Joe Callow, another attorney for the
plaintiffs, "The longer the delay, the better for (the rail and
chemical companies). It creates frustration for people who want
closure."
PILGRIM'S PRIDE: TX Court Consents to Pursuing Separate Claims
--------------------------------------------------------------
Plaintiffs in the amended class action against Pilgrim's Pride
Corporation, which is in the United States District Court for
the Eastern District of Texas, Texarkana Division and is styled
"Cody Wheeler, et al. vs. Pilgrim's Pride Corporation," were
allowed by the court to proceed with their respective antitrust
claims asserted against the defendants in a separate cause of
action.
The complaint, filed on behalf of a class of chicken growers,
initially alleged that the Company violated the Packers and
Stockyards Act (7 U.S.C. Section 192) and breached fiduciary
duties allegedly owed to the plaintiff growers. The plaintiffs
also brought individual actions under the Packers and Stockyards
Act alleging common law fraud, negligence, breach of fiduciary
duties and breach of contract.
On March 14, 2003, the court entered an order dismissing the
plaintiffs' claim of breach of fiduciary duty and negligence.
The plaintiffs also dropped the charges of fraud prior to the
entering of the order by the court.
On September 30, 2005, plaintiffs amended their lawsuit to join
Tyson Foods, Inc. as a co-defendant. Two additional former
chicken growers were also added as plaintiffs to the lawsuit.
The amendment, which occurred 38 months after the lawsuit's
filing, also results in a virtual re-writing of the allegations.
Now plaintiffs contend that the Company and Tyson are involved
in a conspiracy to violate federal antitrust laws. Plaintiffs'
initial allegations, although still contained in the amended
lawsuit, are no longer the sole focus of the case.
On January 3, 2006, the Court entered an Order severing
Plaintiffs' Packers and Stockyards Act and antitrust claims.
The Court ordered that Plaintiffs: Cody Wheeler, Don Davis and
Davey Williams might proceed with their Packers and Stockyards
Act claims as set forth in Plaintiffs' Third Amended Complaint.
The Court also ordered that Plaintiffs: Mr. Wheeler, Mr. Davis,
Mr. Williams, Richard Grounds and Jerry Ward might proceed with
their respective antitrust claims asserted against the Company
and Tyson in a separate cause of action.
The amended suit is styled, "Wheeler et al v. Pilgrim's Pride
Corp et al., Case No. 5:06-cv-00004-DF," filed in the U.S.
District Court for the Eastern District of Texas, Texarkana
Division, under Judge David Folsom. Representing the plaintiffs
is C Paul Rogers, III of Locke Liddell & Sapp, 2200 Ross Ave,
Suite 2200, Dallas, TX 75201-6776, Phone: 214/740-8477, Fax:
214-740-8800, E-mail: cprogers@lockeliddell.com. Representing
the Company is Jennifer Parker Ainsworth, Wilson Sheehy Knowles
Robertson & Cornelius PC, 909 ESE Loop 323, Suite 400, P.O. Box
7339, Tyler, TX 75711-7339, Phone: 903/509-5000, Fax:
9035095091, E-mail: jainsworth@wilsonlawfirm.com.
SPARK NETWORKS: Sets Mediation for CA Dating Services Suit
----------------------------------------------------------
Spark Networks, PLC, reports that it is in the process of
scheduling mediation with plaintiffs in a class action lawsuit
pending in a county court in California, which will probably
occur in the end of February 2006.
On November 14, 2003, Jason Adelman filed a nationwide class
action complaint against the Company in the Los Angeles County
Superior Court based on an alleged violation of California Civil
Code section 1694 et seq., which regulates businesses that
provide dating services. The complaint included allegations
that the Company is a dating service as defined by the
applicable statutes and, as an alleged dating service, the
Comapny is required to provide language in their contracts that
allows:
(1) members to rescind their contracts within three days,
(2) reimbursement of a portion of the contract price if
the member dies during the term of the contract and/or
(3) members to cancel their contracts in the event of
disability or relocation.
Causes of action include breach of applicable state and/or
federal laws, fraudulent and deceptive business practices,
breach of contract and unjust enrichment. The plaintiffs are
seeking remedies including declaratory relief, restitution,
actual damages although not quantified, treble damages and/or
punitive damages, and attorney's fees and costs.
The suit seeks to be certified as a nationwide class action.
Since the case is a class action, it was assigned to the Los
Angeles Superior Court Complex Litigation Program.
The court has ordered a bifurcation of the liability issue. At
an August 15, 2005 Status Conference, the court set the
bifurcated trial on the issue of liability for March 27, 2006.
The parties have agreed in principle to continue the bifurcated
trial to approximately May 15, 2006 and extend the time for
filing briefs and completing discovery, in the case with respect
to the bifurcated trial. In addition, the parties are in the
process of scheduling a mediation, which in all probability will
occur before the end of February 2006.
TECHNOCONCEPTS, INC.: Investors Suspect Fraud in Asset Transfers
----------------------------------------------------------------
E-Cap Venture Fund II, L.L.C. and six other plaintiffs filed a
suit in Los Angeles Superior Court against TechnoConcepts, Inc.,
its CEO Anthony Turgeon, and other defendants.
The action alleges that the defendants orchestrated a series of
fraudulent transfers of the technology of TechnoConcepts, Inc.
(CA) in breach of express contractual covenants and in violation
of California law, all in an effort to fraudulently deprive the
plaintiffs of the fruits of their investments.
The complaint alleges that the defendants' scheme to strip
TechnoConcepts of its technology was accomplished through:
(1) a fraudulent transfer of the TechnoConcepts, Inc. (CA)
technology to TechnoConcepts, Inc. (NV); and
(2) be a succeeding fraudulent transfer of the same
technology to the Colorado public company,
TechnoConcepts, Inc.
The suit alleges that over an extended period of time the
defendants refused to divulge information required to be
disclosed to the plaintiffs as investors in the California
defendant, TechnoConcepts, Inc. (CA), and that defendants
actively concealed their fraudulent transfers from plaintiffs.
In essence, the plaintiffs charge that defendants hijacked the
assets of the Californian company at the expense of the
plaintiffs who were the very investors who had kept it alive so
that it could seek additional investment to develop its
technology.
Apart from plaintiffs' request for punitive damages for
defendants' fraudulent conduct in an amount to be determined by
a jury at trial, the complaint seeks compensatory damages and
injunctive relief.
Plaintiffs' attorney, Howard Loeb, a partner with the Law
Offices of Loeb, Kosacz & Sundberg, LLP, said: "Quite frankly, I
am puzzled that defendant TechnoConcepts, Inc. (CO) has not
filed an 8-K with the Securities and Exchange Commission
reporting the December 30, 2005 filing of this action."
Mr. Loeb added: "I don't understand how defendant
TechnoConcepts, Inc. (CO) could not consider this case material
when it involves an alleged scheme to fraudulently transfer
assets of TechnoConcepts, Inc. (CA) through TechnoConcepts, Inc.
(NV) to the public company TechnoConcepts, Inc. (CO) in
violation of California law and in contravention of the terms of
the written agreements and notes held by my clients."
"To protect my clients against any further transfers of such
assets, among other things, the complaint asks that the Court
appoint a receiver to take charge of TechnoConcepts technology.
I believe that my clients have a strong case and a good
probability of success that will result in a recovery of at
least several millions of dollars."
Technoconcepths on the Net: http://www.technoconcepts.com;Loeb,
Kosacz & Sundberg, LLP Howard Loeb: Phone: 805-777-7240 Ext. 11.
TIME WARNER: Allotting $300M for Securities Suit Settlement Fund
----------------------------------------------------------------
There is no assurance that Time Warner Inc.'s proposed
securities class action settlement will receive final court
approval, the company said at its financial statement for 2005.
A final approval hearing on the case is set Feb. 22, 2006.
In July 2005, Time Warner Inc. reached agreement in principle to
settle securities class action included in the matters
consolidated under the caption In re: AOL Time Warner Inc.
Securities & "ERISA" Litigation described in the Company's
Annual Report on Form 10-K for the year ended Dec. 31, 2004.
The settlement is reflected in a written agreement between the
lead plaintiff and the Company. On Sept. 30, 2005, the court
issued an order granting preliminary approval of the settlement
and certified the settlement class. The court scheduled the
final approval hearing next month.
In connection with reaching the agreement in principle on the
securities class action, the Company established a reserve of
$2.4 billion during the second quarter of 2005. Ernst & Young
LLP also agreed to a settlement in this litigation and will pay
$100 million.
Pursuant to the settlement, in October 2005 Time Warner paid
$2.4 billion into a settlement fund (the MSBI Settlement Fund)
for the members of the class represented in the action. In
addition, the $150 million previously paid by Time Warner into a
fund in connection with the settlement of the investigation by
the U.S. Department of Justice (DOJ) was transferred to the MSBI
Settlement Fund, and Time Warner is using its best efforts to
have the $300 million it previously paid in connection with the
settlement of its Securities and Exchange Commission
investigation, or at least a substantial portion thereof,
transferred to the MSBI Settlement Fund.
In addition to the $2.4 billion reserve established in
connection with the agreement in principle regarding the
settlement of the MSBI consolidated securities class action,
during the second quarter of 2005 the Company established an
additional reserve totaling $600 million in connection with the
other related securities litigation matters, described in pages
39-42 of the 2004 Form 10-K, that are pending against the
Company.
This $600 million amount continues to represent the Company's
current best estimate of its potential financial exposure in
these matters, including the remaining individual shareholder
suits, the derivative actions and the actions alleging
violations of the Employee Retirement Income Security Act
(ERISA).
The Company reached an agreement with the carriers on its
directors and officers insurance policies in connection with the
securities and derivative action described above and in pages
38-42 of the 2004 Form 10-K (other than the actions alleging
violations of ERISA described on page 39 of the 2004 Form 10-K).
As a result of this agreement, the Company has recorded a
recovery of approximately $185 million, which is expected to be
collected in the first quarter of 2006 and is reflected as a
reduction to "Amounts related to securities litigation and
government investigations" in the accompanying consolidated
statement of operations for the year ended December 31, 2005.
Update on Status of Government Investigations
As previously disclosed by the Company, the SEC and the DOJ had
been conducting investigations into the accounting and
disclosure practices of the Company. Those investigations
focused on advertising transactions, principally involving the
Company's America Online segment, the methods used by the
America Online segment to report its subscriber numbers and the
accounting related to the Company's interest in AOL Europe prior
to January 2002. During 2004, the Company established $510
million in legal reserves related to the government
investigations, the components of which are discussed in more
detail in the following paragraphs.
The Company and its subsidiary, AOL, entered into a settlement
with the DOJ in December 2004 that provided for a deferred
prosecution arrangement for a two-year period. As part of the
settlement with the DOJ, in December 2004, the Company paid a
penalty of $60 million and established a $150 million fund,
which the Company could use to settle related securities
litigation. The fund is reflected as restricted cash on the
Company's consolidated balance sheet at December 31, 2004.
During October 2005, the $150 million was transferred by the
Company into the settlement fund for the members of the class
covered by the consolidated securities class action described
above under the heading "Amounts Related to Securities
Litigation." In addition, on March 21, 2005, the Company
announced that the SEC had approved the Company's proposed
settlement, which resolved the SEC's investigation of the
Company.
Under the terms of the settlement with the SEC, the Company
agreed, without admitting or denying the SEC's allegations, to
be enjoined from future violations of certain provisions of the
securities laws and to comply with the cease-and-desist order
issued by the SEC to AOL in May 2000. The settlement also
required the Company to:
(1) Pay a $300 million penalty, which will be used for a
Fair Fund, as authorized under the Sarbanes-Oxley Act;
(2)
(i) Adjust its historical accounting for Advertising
revenues in certain transactions with Bertelsmann, A.G.
that were improperly or prematurely recognized,
primarily in the second half of 2000, during 2001 and
during 2002;
(ii) as well as adjust its historical accounting for
transactions involving three other AOL customers where
there were Advertising revenues recognized in the
second half of 2000 and during 2001;
(3) adjust its historical accounting for its investment in
and consolidation of AOL Europe; and
(4) Agree to the appointment of an independent examiner,
who will either be or hire a certified public
accountant.
The independent examiner will review whether the Company's
historical accounting for transactions with 17 counter-parties
identified by the SEC staff, principally involving online
advertising revenues and including three cable programming
affiliation agreements with related advertising
elements, was in conformity with GAAP, and provide a report to
the Company's audit and finance committee of its conclusions,
originally within 180 days of being engaged. The transactions
that would be reviewed were entered into between June 1, 2000
and December 31, 2001, including subsequent amendments thereto,
and involved online advertising and related transactions for
which revenue was principally recognized before January 1, 2002.
The Company paid the $300 million penalty in March 2005;
however, it will not be able to deduct the penalty for income
tax purposes, be reimbursed or indemnified for such payment
through insurance or any other source, or use such payment to
setoff or reduce any award of compensatory damages to plaintiffs
in related securities litigation pending against the Company.
As described above, in connection with the pending settlement of
the consolidated securities class action, the Company is using
its best efforts to have the $300 million, or a substantial
portion thereof, transferred to the settlement fund for the
members of the class represented in the action. The historical
accounting adjustments were reflected in the restatement of the
Company's financial results for each of the years ended December
31, 2000 through December 31, 2003, which were included in the
Company's 2004 Form 10-K.
The independent examiner has begun its review, which as a result
of an extension, is expected to be completed in the second
quarter of 2006. Depending on the independent examiner's
conclusions, a further restatement might be necessary. It is
also possible that, so long as there are unresolved issues
associated with the Company's financial statements, the
effectiveness of any registration statement of the Company or
its affiliates may be delayed.
Time Warner Inc. on the Net: http://www.timewarner.com/corp/.
WORLD AIRWAYS: Court Certifies Nigeria Flights Contract Suit
------------------------------------------------------------
Federal Judge Raymond J. Dearie granted nationwide class
certification to the suit filed against World Airways Holding
Inc. on behalf of passengers stranded in Nigeria and the U.S.
World Airways Holding Inc., operating as World Airways, Inc.,
previously decided to cease flight operations to Nigeria,
abandoning thousands of passengers with round trip tickets, and
leaving the majority of them stranded in Lagos, Nigeria.
John Doherty, a partner at Thacher Proffitt & Wood, LLP,
plaintiffs' co-lead counsel in the litigation, welcomed the
ruling. "The court's [] ruling is another important step toward
forcing World to honor its obligations to these passengers,"
said Mr. Doherty.
On Nov. 1, 2005, the U.S. Department of Transportation (DOT)
determined that World Airways violated United States laws and
regulations and engaged in unfair and deceptive practices in its
conduct of flights between the U.S. and Nigeria. The findings
were contained in a consent order entered between World and the
DOT. The consent order imposes a $350,000 fine on World
Airways.
"We sought a DOT investigation because we were certain World
Airways had broken the law. We are happy to see that the DOT
has succeeded in getting World to accept legal responsibility
for its misconduct. After almost two years of litigation, we
expect that a jury will come to the same conclusion as the DOT:
World Airways violated the law and engaged in unfair and
deceptive practices," said John Edozie, one of plaintiffs'
counsel.
In another development, World Airways, through its wholly owned
subsidiary, North American Airline, Inc. is currently seeking to
resume service to Nigeria. "I hope World is not trying to sneak
back into Nigeria without compensating the thousands of
passengers damaged by its conduct," said Mr. Edozie, one of
plaintiffs' counsel. "I expect that the people affected by
World's conduct and Nigerian public opinion will strongly oppose
any such effort."
The full text of Judge Dearie's decision is available at:
http://www.waclassaction.com.
According to an Oct. 6, 2005 issue of the Class Action Reporter,
complaints arising from the cancellation of World Airways'
flights to Nigeria were filed in January 2004 in:
(1) the U.S. States District Court for the Eastern District
of New York (six complaints);
(2) U.S. District Court for the Southern District of New
York;
(3) Superior Court of DeKalb County, Georgia;
(4) U.S. District Court for the Northern District of New
Jersey; and
(5) U.S. District Court for the Northern District of
Illinois).
In addition, there were:
(1) four individual complaints (all in the United States
District Court for the Eastern District of New York);
and
(2) thirteen small claims actions (one in California, three
in New Jersey, one in Georgia and eight in New York).
Seven of the eight small claims actions in New York were settled
for a total of $14,000 (or $2,000 per plaintiff). The purported
class action cases were consolidated for discovery purposes into
the Eastern District of New York.
The suit was styled "In re: Nigeria Charter Flights Contract
Litigation, case no. 1:04-md-01613-RJD-MDG," filed in the United
States District Court in New Hampshire, under Judge Raymond J.
Dearie. Representing the Company is Frank J. Costello, Zuckert,
Scoutt & Rasenberger, L.L.P., 888 Seventeenth Street, N.W.,
Washington, DC 20006-3309, Phone: (202) 298-8660, Fax: (202)
342-0683, E-mail: fjcostello@zsrlaw.com
Asbestos Alert
ASBESTOS LITIGATION: Markel Notes S$31.3M A&E Loss Reserves
-----------------------------------------------------------
Markel Corporation declares US$31.3 million of loss reserve
development, which caused the increase of the 2005 underwriting
loss, according to a SEC report. The reserves are primarily for
asbestos and environmental exposures and reinsurance bad debt.
The increase in A&E reserves was a result of the completion of
the Company's annual review of these exposures during the 2005-
3rd quarter. The increase in the allowance for potentially
uncollectible reinsurance was required to provide for potential
collection disputes with reinsurers and to increase reserves for
financially weak or insolvent reinsurers.
Improved underwriting performance on other lines of business in
2005 compared to 2004 partially offset the higher hurricane and
A&E losses. The Company recorded for a certain segment an
underwriting loss of US$28.8 million for the year ended December
31, 2005 compared to an underwriting loss of US$13.5 million in
2004.
Glen Allen, VA-based Markel Corporation sells specialty
insurance products and programs to a variety of niche markets.
ASBESTOS LITIGATION: SafeWork Probes Exxon for Risks at Refinery
----------------------------------------------------------------
SafeWork SA investigates Exxon Mobil Corporation for allegedly
exposing up to 3,000 people to asbestos dust at the Company's
old refinery south of Adelaide, The Australian reports.
Safework, South Australia's agency that checks occupational
hazards, inspected the site after two ex-contractors made the
allegations at an inquiry. They recounted of the refinery's
environmental management from the 1970s until the 1990s. Exxon
closed the refinery in December 2002.
Dean Thomas, a former health representative who worked at the
site from the 1970s until 1987, said up to 3,000 people at the
refinery had been exposed to asbestos dust and materials that
had been disturbed during refinery plant shutdowns.
Another contract worker, Mike Bagnall, said he was exposed to
"clouds of white dust which were found to be asbestos" when he
used a whipper snipper to cut grass on the site. He also
detailed widespread dumping of toxic materials and chemicals in
open pits, which were covered over.
Before an asbestos removal program in the early 1990s, pigeons
had pulled out pieces of plaster and asbestos insulation to make
nests in the plant.
Environment Protection Authority license coordinator for Exxon
Mobil, Rebecca Hughes, said the Company had completed a detailed
contamination assessment of the site in 2003, and had yet to
start clean-up work. She said the report did not mention
contamination and that the EPA was unaware of the asbestos
claims.
Exxon Mobil has said the hazards of asbestos used at the
refinery to insulate piping and equipment were well known and
"appropriate management of any risks associated with that have
been implemented at the refinery over many, many years."
ASBESTOS LITIGATION: Senate Sets US$140B-Fund Debate on Feb. 6
--------------------------------------------------------------
Senate Judiciary Committee Chairman Arlen Specter states that
the debate for the legislation to create a US$140 billion
asbestos compensation fund will be heard by the Senate on
February 6, 2006, Reuters reports.
Senate Majority Leader Bill Frist, a Tennessee Republican, said
he was determined to pursue the bill, despite a suggestion by
Senate Minority Leader Harry Reid, a Nevada Democrat, that the
debate be postponed to work on reforms in the wake of the
scandal regarding lobbyist Jack Abramoff.
Under the bill, asbestos victims would lose their right to sue
and claims would be paid instead by the US$140 billion fund to
be financed by asbestos defendant companies and insurers.
While the bill helps lift the litigation threat to firms, it has
stirred controversy in the business community. Small to medium-
size companies say they would have to pay more to the fund while
bigger companies would get a break from asbestos liabilities.
The American Insurance Association wrote to Senate Majority
Leader Frist to complain that the legislation as written does
not provide insurance companies with "certainty" and "finality"
at a cost they can afford. The bill would allow some asbestos
claims to return to the courts if the fund is slow getting
started, while insurers would already be paying billions to the
fund, the AIA said.
According to the letter, the insurers' portion of the funding,
US$46 billion, needs to be amended downwards to credit them for
the amounts they have paid out on asbestos claims since the
funding level was set back in 2003.
Asbestos fibers are linked to cancer and other lung-scarring
diseases. Hundreds of thousands of injury claims have clogged
courtroom dockets and helped push over 70 U.S. companies into
bankruptcy.
ASBESTOS LITIGATION: Maremont Corp.'s Claims Increase to 61,900
---------------------------------------------------------------
ArvinMeritor Inc. states that its subsidiary, Maremont
Corporation, defends about 61,900 multi-defendant asbestos-
related claims as of December 31, 2005, according to a
Securities and Exchange Commission report.
As of September 30, 2005, Maremont Corporation, together with
other firms, defended about 61,700 claims, as opposed to 69,600
claims in June 30, 2005, and 74,000 claims in September 30, 2004
(November 25, 2005, Class Action Reporter).
In cases where actual injury has been alleged, very few
claimants have established that a Maremont product caused their
injuries. Plaintiffs' lawyers often sue dozens or even hundreds
of defendants in individual lawsuits on behalf of hundreds or
thousands of claimants, seeking damages against all named
defendants irrespective of the disease or injury and
irrespective of any causal connection with a particular product.
Acquired by ArvinMeritor in 1986, Maremont manufactured
asbestos-containing friction products from 1953 through 1977.
Troy, MI-based ArvinMeritor Inc. makes commercial vehicle
components as well as for light vehicles. The Company has plans
to divest its light vehicle aftermarket products business that
makes mufflers, filters, and shock absorbers. DaimlerChrysler
and General Motors account for 16% and 12% of sales
respectively.
ASBESTOS LITIGATION: Maremont Corp. Charges Insurers $1M in 4Q05
----------------------------------------------------------------
In the three months ended December 31, 2005, ArvinMeritor Inc.
subsidiary Maremont Corporation charges insurance companies US$1
million for indemnity and defense costs of resolved asbestos-
related cases, according to a SEC report.
Maremont charged US$3 million for the same period in 2004.
Prior to February 2001, Maremont participated in the Center for
Claims Resolution and shared with other members in the payments
of defense and indemnity costs for asbestos claims. The CCR
handled the resolution and processing of claims on behalf of its
members until February 2001, when it was reorganized and
discontinued negotiating shared settlements.
Upon CCR's dissolution in February 2001, Maremont began handling
asbestos-related claims through its own defense counsel and has
taken a more aggressive defensive approach that involves
examining the merits of each asbestos-related claim. Although
the Company expects legal defense costs to continue at higher
levels than when it participated in the CCR, it believes its
litigation strategy has reduced the average indemnity cost per
claim.
Acquired by ArvinMeritor in 1986, Maremont manufactured
asbestos-containing friction products from 1953 through 1977.
Troy, MI-based ArvinMeritor Inc. makes commercial vehicle
components as well as for light vehicles. The Company has plans
to divest its light vehicle aftermarket products business that
makes mufflers, filters, and shock absorbers. DaimlerChrysler
and General Motors account for 16% and 12% of sales
respectively.
ASBESTOS LITIGATION: Maremont Estimates Claims Liability at $47M
----------------------------------------------------------------
ArvinMeritor Inc.'s subsidiary, Maremont Corporation, determines
that the most likely and probable liability for pending and
future asbestos-related claims over the next four years is US$47
million, according to a SEC report.
Maremont derived that assessment after conferring with Bates
White LLC, a consulting firm, which estimated Maremont's
reasonably possible obligation for asbestos injury claims at
US$35 million to US$54 million over the next three to four
years.
Bates White has updated the assessment as of December 31, 2005.
The consulting firm also helped update the cost of Maremont's
share of committed but unpaid settlements entered into by the
Center for Claims Resolution.
Acquired by ArvinMeritor in 1986, Maremont manufactured
asbestos-containing friction products from 1953 through 1977.
Troy, MI-based ArvinMeritor Inc. makes commercial vehicle
components as well as for light vehicles. The Company has plans
to divest its light vehicle aftermarket products business that
makes mufflers, filters, and shock absorbers. DaimlerChrysler
and General Motors account for 16% and 12% of sales
respectively.
ASBESTOS LITIGATION: CT Court Junks Hartford Suit v. Reinsurers
---------------------------------------------------------------
The Superior Court of Connecticut granted certain reinsurers'
motion for summary judgment in a suit where damages for their
failure to pay certain billings for asbestos and pollution
claims were sought.
Judge Dennis G. Eveleigh presided over the suit, with Case No.
CV03017822S, filed on December 14, 2005.
Hartford Accident and Indemnity Co., a unit of The Hartford
Financial Services Group, Inc., engaged in litigation against
Ace American Reinsurance Co. and certain upper-layer reinsures
under its Blanket Casualty Treaty.
The BCT is a multi-layered reinsurance program providing excess-
of-loss coverage in various amounts from the 1930s through the
1980s. The upper layers were established in 1950, mainly with
London Market reinsurers, including Lloyd's syndicates.
In December 2003, Hartford settled with MacArthur Company, an
asbestos insulation distributor then in bankruptcy, for US$1.15
billion. Hartford billed the reinsurer defendants under the BCT
for US$117 million of the settlement amount.
After the reinsurers refused to pay the MacArthur billing,
Hartford amended its complaint. Most of the reinsurer defendants
sought a declaration that they did not owe reinsurance for the
MacArthur settlement.
In April 2005, the Superior Court phased the proceedings,
hearing the MacArthur billing in April 2006, with other billings
to follow in subsequent trial settings.
In September 2005, the London Market reinsurer defendants moved
for summary judgment on the MacArthur-related claims. After
briefing and oral argument, the Superior Court granted the
defendants' motion.
If the decision of the Superior Court is affirmed on appeal,
Hartford may be unable to collect not only its billing for the
MacArthur settlement but also other current and future billings
to which the same relevant facts and legal analysis would apply.
The Company has recorded gross reinsurance recoveries of
asbestos and pollution losses under the BCT of US$586 million.
The Company has considered the risk of non-collection of these
recoveries in its allowance of US$335 million as of December 31,
2005 for all uncollectible reinsurance recoverables associated
with older, long-term casualty liabilities.
Hartford, CT-based Hartford Financial Services, Inc offers
personal and commercial property & casualty insurance products,
including homeowners, auto, and workers' compensation. The
Company sells its investment products through a distribution
network consisting of about 1,500 broker-dealers and about 500
banks.
ASBESTOS LITIGATION: UK Court Regards Plaques Victims Ineligible
----------------------------------------------------------------
The UK Court of Appeal ruled that people suffering from pleural
plaques, a thickening of the lining of the lungs caused by
asbestos exposure, are not eligible for compensation.
The ruling may prevent more than 100,000 plaques-related court
cases being brought in the future. The move may save insurers,
who, by a 2005 estimate, faced more than GBP1.4 billion (US$2.62
billion) in pleural plaques-related damages over the next 35
years.
Norwich Union PLC, part of UK's largest insurer Aviva PLC,
welcomed the ruling. Other insurers who may benefit include
Zurich Financial Services, Royal & SunAlliance and Lloyd's of
London, which wrote liability policies for many firms over the
past 30 years.
The decision overturned a previous court ruling that companies
should compensate employees who had developed pleural plaques as
a result of being exposed to asbestos at their workplace.
In the judgment, Lord Chief Justice Nicholas Phillips said, the
practice followed for the past 20 years by courts in these
cases, which have awarded compensation of between GBP5,000 and
GBP15,000 to claimants for the anxiety that they may develop a
serious illness, was "erroneous."
Granting permission to appeal, Justice Phillips said that a very
large number of claims or potential claims rested on the ruling.
The ruling likely will be appealed to the House of Lords, the
United Kingdom's highest court.
ASBESTOS LITIGATION: Owens Corning Assumes PI Claims at $6.811B
---------------------------------------------------------------
Owens Corning assumes that its current and future asbestos
personal injury claims amount to US$6.811 billion, according to
a Securities and Exchange Commission report.
This amount assumes a gross claim of US$7 billion less
Restricted Cash of US$109 million and less OC Asbestos Personal
Injury Liability Insurance Assets of US$80 million. The figures
are estimated as of December 31, 2005.
On December 31, 2005, the Company, its affiliated debtors,
debtors-in-possession, together with the Official Committee of
Asbestos claimants and the Legal Representative for the class of
future asbestos claimants, filed with the Bankruptcy Court a
Fifth Amended Joint Plan of Reorganization and a Disclosure
Statement.
Toledo, OH-based Owens Corning makes fiberglass and composite
materials. Its building materials unit accounts for 80% of
sales. The Company's composite materials unit makes glass fiber
materials that industrial customers use to combine with plastic
resins to make composite products.
ASBESTOS LITIGATION: Court Remands Epperson Suit v. Shipbuilders
----------------------------------------------------------------
The U.S. District Court of Virginia remanded an asbestos claim
to the Circuit Court in Newport News, VA and rejected the
defendant shipbuilders' removal motion, citing insufficiency in
the federal government contractor defense.
On January 11, 2006, Judge Jerome B. Friedman decided on Case
No. 4:05CV2953.
Lacy T. Epperson, Jr. alleged that his mother, Mary Adams
Epperson, developed mesothelioma by handling the asbestos-laden
clothes of both Mr. Epperson, Jr. and his father, Lacy T.
Epperson, Sr.
Mr. Epperson, Sr. worked as a pipe fitter at Northrop Grumman
Systems Corp., Newport News Shipbuilding and Drydock Co., and
Newport News Shipbuilding, Inc. from 1943 to 1949. Mr. Epperson,
Jr. also worked as a pipe fitter at the Shipyard from 1961 to
1964.
The Shipyard constructed, repaired, and renovated commercial
vessels and US Navy vessels. Mr. Epperson, Jr. asserted that
asbestos exposure occurred not only in Shipyard buildings and on
commercial vessels, but also on military vessels.
On October 24, 2005, the Shipyard filed for removal in the
Court. Its motion asserted the federal government contractor
defense, alleging that because they acted under the US Navy's
direction, they are immune from liability for injuries arising
out of asbestos exposure that occurred on Navy vessels.
On November 18, 2005, Mr. Epperson, Jr. moved for a remand,
claiming that defendants failed to establish a credible federal
defense. On December 6, 2005, the defendants opposed Mr.
Epperson, Jr.'s motion to remand; he countered them on December
12, 2005.
In addition, the Court ruled that as Mr. Epperson, Jr. only
sought relief on the theory of failure to warn, he should not
seek relief on any theory other than failure to warn and the
associated claim of the failure to establish safety procedures.
Gary Wheeler Kendall, Michie, Hamlett, Lowry, Rasmussen & Tweel,
P.C., Charlottesville, VA, represented Lacy T. Epperson, Jr.
Brian James Schneider, John D. Epps, Joseph Conrad Kearfott,
Hunton & Williams LLP, Richmond, VA, Kevin Joseph Cosgrove,
Hunton & Williams, Norfolk, VA, represented Northrop Grumman
Systems Corp., Newport News Shipbuilding and Drydock Co., and
Newport News Shipbuilding, Inc.
ASBESTOS LITIGATION: Plumber Charged US$3,000 for Removal Breach
----------------------------------------------------------------
The Massachusetts State Department of Environmental Protection
charged a local licensed plumber US$3,000 for asbestos handling
and removal violations, The Republican reports.
According to the DEP, Jeffrey Gladu, who works for a Connecticut
plumbing and heating firm, illegally removed and disposed of
asbestos insulation from the basement of a two-family house at
43 Strong St. in Springfield in 2004.
Mr. Gladu was replacing a boiler at the residence as a side job,
while using his employer's truck.
The DEP also charged property owner Luis Tirado with US$2,000,
since the agency discovered that he was also involved in the
illegal removal. The DEP imposed an additional US$6,700 but
suspended that penalty for a year as long as he hires a licensed
asbestos contractor to clean up the site. He was also warned not
to commit any more violations.
Michael Gorski, director of the DEP's office in Springfield, MA
said it would have cost less if the men had adhered to the
regulations.
ASBESTOS LITIGATION: USG Corp. Agrees to Settle Suits for US$4B
---------------------------------------------------------------
USG Corporation said that it has agreed to settle its asbestos-
related lawsuits for US$4 billion, a move expected to help its
emergence from a four-and-a-half year bankruptcy.
Company officials said the proposed settlement would be included
in a plan of reorganization and disclosure statement they expect
to file with bankruptcy court in February 2006. The documents
will outline the Company's plan to exit bankruptcy by July 2006
following court approval. The plan calls for USG to fully repay
debt holders and suppliers with interest.
"This agreement will allow us to keep our promises to provide
compensation to those who have been injured, to repay our
unsecured creditors in cash with interest, and to reward our
shareholders," said USG chairman and CEO William Foote.
The agreement calls for USG to pay US$900 million in cash into a
new trust to handle current and future asbestos injury claims.
The Company would pay an additional US$3.05 billion to the trust
through a contingent note.
The contingent payments would be paid as follows: US$1.9 billion
due 30 days after the adjournment of Congress' current session,
and another US$1.15 billion due six months after Congress'
adjournment.
If Congress passes legislation establishing a US$140 billion
national asbestos personal injury trust fund before the current
session adjourns, the contingent payment note would be cancelled
and no additional payments would be made, unless that
legislation is later found unconstitutional.
Financing for the contingent note would come from tax refunds,
new long-term debt and a US$1.8 billion rights offering to
existing stockholders, backed by Warren Buffett's Berkshire
Hathaway Inc. USG officials said Berkshire Hathaway would
acquire any shares not purchased by USG shareholders.
USG reported a 2005-4th quarter loss of US$1.78 billion, or
US$39.94 a share, on sales of US$1.34 billion. Results include
an after-tax charge of US$1.9 billion, or US$43.39 per share, to
settle asbestos personal injury liability cases.
ASBESTOS LITIGATION: U.S. Senate Leader to Oppose Fund Bill
-----------------------------------------------------------
Senate Minority Leader Harry Reid, a Nevada Democrat, said he
would try to curb legislation creating a US$140 billion asbestos
compensation fund from being debated on the US Senate floor on
February 6, Reuters reports.
A long time opponent of the legislation, Sen. Reid said in a
January 30-dated letter to Senate Majority Leader Bill Frist
that the adequacy and solvency of the proposed trust fund
remained in serious doubt.
"Please be advised that I intend to oppose the motion to proceed
to the asbestos legislation," said Sen. Reid in the letter.
"This bill is simply not ready for consideration by the full
Senate."
Sen. Frist countered that the Supreme Court had repeatedly asked
Congress to address the inefficient asbestos litigation system
that had benefited lawyers at the expense of asbestos victims.
Sen. Reid's spokesman Jim Manley said the senator would "urge
members of the caucus to oppose the bill" but was not counting
potential votes.
Asbestos is linked to cancer and other lung-scarring diseases.
Hundreds of thousands of injury claims have clogged courtroom
dockets and helped push more than 70 U.S. companies into
bankruptcy.
ASBESTOS LITIGATION: Bill Supporters Blast Sen. Reid for Remarks
----------------------------------------------------------------
The Council for Citizens Against Government Waste criticized
Senate Minority Leader Harry Reid, a Nevada Democrat, for his
comments about the Fairness in Asbestos Injury Resolution Act,
according to a Council press release.
The legislation establishes a trust fund to reimburse true
victims of asbestos exposure while limiting the actions of trial
lawyers.
In a letter to Sen. Reid, CCAGW president Tom Schatz said, "As
supporters of S. 852, CCAGW is concerned about the statements
you made to the press on the January 25, claiming that the bill
would leave victims `out in the cold.' In fact, this bill is
much better for victims than the current system.
"The FAIR Act would set up a trust fund to compensate anyone who
can prove he or she is suffering health problems because of
asbestos exposure. Because of the flood of asbestos lawsuits,
today victims must wait for years for compensation. Many die
waiting for their day in court. Of course, since many asbestos-
producing companies have already gone bankrupt, victims often
find it difficult to collect any judgment they receive.
"When they are able to receive financial remuneration, in some
cases attorneys may take up half of the judgment when the victim
finally receives it. The FAIR Act, however, would cap any
attorney fees at 5 percent. That is certainly a preferred
outcome for the victims, but not for the attorneys."
The CCAGW is part of the Citizens Against Government Waste, a
nonpartisan, nonprofit organization dedicated to eliminating
waste, fraud, abuse, and mismanagement in government.
ASBESTOS LITIGATION: USG Corp. Reports US$1.3B Sales in 4Q2005
--------------------------------------------------------------
USG Corporation reported 2005-4th quarter net sales of US$1.3
billion, an increase of US$166 million, or 14%, compared to the
2004-4th quarter, according to a Company press release.
The Chicago, IL-based Company achieved a record US$5.1 billion
in net sales for the full year, exceeding the previous year's
record sales by US$630 million, or 14%.
The Company's consolidated results included a pretax charge of
US$3.1 billion (US$1.9 billion, or US$43.39 per share, after
tax) in the 2005-4th quarter related to its plan to resolve its
asbestos personal injury liability and emerge from bankruptcy.
Net losses of US$1.8 billion (or US$39.94 a share) and US$1.4
billion (or US$32.92 a share) were recorded in the fourth
quarter and full year 2005, respectively.
The charge is related to an increase in USG's reserve for the
estimated cost of resolving asbestos-related liabilities,
including asbestos personal injury claims, asbestos property
damage claims, and other asbestos related claims and legal
expenses. The fourth quarter net loss also included a non-cash,
after-tax charge of US$11 million, or US$0.25 a share, (US$0.26
per share for the full year 2005).
"USG's businesses finished the year with solid performance,"
said Company Chairman and CEO, William C. Foote. "We delivered
on our promise to profitably grow our core businesses and pursue
select growth opportunities, and our continued focus on margin
improvement helped us manage persistent cost pressures."
USG Corporation's North American Gypsum division makes SHEETROCK
brand gypsum products and joint compound and DUROCK brand cement
board. It also manufactures abuse-resistant wall panels, poured
gypsum underlayments, and construction plaster products. The
Company's Worldwide Ceilings division offers interior ceiling
grid systems and acoustic tile. USG's Building Products
Distribution division distributes building products through L&W
Supply.
ASBESTOS LITIGATION: DE Court Awards Widow in Suit v. Champlain
---------------------------------------------------------------
The Supreme Court of Delaware reversed a prior court ruling and
granted a certain widow death benefits in a case against
Champlain Cable Corporation, formerly known as Haveg Industries.
On January 17, 2006, Chief Justice Myron T. Steele, together
with Justices Randy J. Holland, Carolyn Berger, Jack B. Jacobs,
and Henry duPont Ridgely, decided on Case No. 211,2005.
On April 29, 2005, the Superior Court of Delaware affirmed the
decision of the Industrial Accident Board's decision to deny
death benefits to Mary Hirneisen, the widow of John Hirneisen, a
former Champlain worker (Class Action Reporter, June 10, 2006).
The Supreme Court held that a worker's spouse has an independent
right to death benefits. For that reason and because Mrs.
Hirneisen satisfied all the requirements for recovering death
benefits, the Supreme Court reversed the Superior Court's
ruling.
On March 2003, Mr. Hirneisen died from lung cancer due to his
occupational exposure to asbestos. He worked for Champlain from
1940 until 1981 when he voluntarily retired.
Upon retirement, Mr. Hirneisen received pension from Champlain
and did not seek further employment. He had opted at the time to
receive a single life annuity pension that would cease upon his
death.
The Board concluded that retirement disqualifies an employee
from receiving workers' compensation benefits. The Board cited
that Mrs. Hirneisen is not entitled to spousal benefits because
her husband was not receiving, nor was he entitled to receive,
wage replacement benefits.
Mrs. Hirneisen attested entitlement to death benefits for the
work-related death of her husband. Therefore, the Superior
Court's ruling is reversed and the matter is remanded for
further proceedings.
Thomas C. Crumplar and Elizabeth B. Lewis of Jacobs & Crumplar,
P.A., Wilmington, DE, represented Mary Hirneisen.
Anthony M. Frabizzio and Stephen J. Milewski of Heckler &
Frabizzio, P.A., Wilmington, DE represented Champlain Cable
Corporation.
ASBESTOS LITIGATION: VA Merchant Charged For Removal Conspiracy
---------------------------------------------------------------
The Justice Department convicted Air Power Enterprises Inc.
president Nicanor Lotuaco for conspiracy to defraud the
Environmental Protection Agency, the Occupational Safety and
Health Administration, and the Small Business Administration.
Judge Jerome B. Friedman ordered Mr. Lituaco to pay a US$1
million fine and sentenced him to five months in jail, followed
by five months home detention, and three years supervised
release.
Norfolk, VA-based AC Environmental, Inc., Portsmouth, VA-based
Air Power, and James Schaubach, ACS president and Air Power vice
president, face sentencing within the next few weeks.
The defendants had fraudulently obtained 8(a) set-aside
contracts for minority-owned companies by submitting false
statements to the SBA, revealed Kelly Johnson, Acting Assistant
Attorney General for the Justice Department's Environment and
Natural Resources Division and Paul J. McNulty, U.S. Attorney
for the Eastern District of Virginia (July 15, 2005, Class
Action Reporter). They pleaded guilty in June 2005.
The defendants also admitted to submitting false documents to
the SBA regarding their eligibility to enroll in the SBA's 8(a)
program for minority-owned businesses and fraudulently obtaining
contracts at federal facilities under the program.
All four defendants admitted to buying these false certificates
from F&M Environmental Technologies, Inc., which pleaded guilty
in February 2001 to selling hundreds of such false training
certificates in Virginia, Maryland, and the District of
Columbia.
Mr. Schaubach and Mr. Lotuaco bought these false certificates
for their employees, who were not properly trained to conduct
abatements, and then used them to obtain contracts to conduct
asbestos, lead, and hazardous waste abatement at schools,
hospitals, and other public and governmental facilities.
Both ACS and Air Power, worked in the asbestos and lead
abatement and hazardous waste removal industries as abatement
and removal contractors. From 1999 through 2004, Air Power
received US$37 million in federal contracts under the SBA's 8(a)
program.
"Not only did the defendants defraud the federal government, but
they endangered the health and safety of their employees and the
public by falsely certifying that the workers had the proper
credentials to work on asbestos and lead abatement projects,"
said Sue Ellen Wooldridge, Assistant Attorney General for the
Justice Department's Environment and Natural Resources Division.
ASBESTOS LITIGATION: Sensus Metering Defends Suits in MS Courts
---------------------------------------------------------------
Sensus Metering Systems Inc., along with as many as 200 or more
firms, defends several asbestos-related lawsuits filed in
various Mississippi state courts by plaintiffs alleging
illnesses from asbestos exposure, according to a SEC report.
Plaintiffs seek unspecified compensatory and punitive damages.
As the suits are in their initial stages, the Company stated
that it is uncertain whether any plaintiffs who have dealt with
Sensus products were exposed to an asbestos-containing component
part of a product of a Company subsidiary or whether such part
could have been a contributing factor to the alleged illness.
Although the Company is entitled to indemnification for legal
and indemnity costs for asbestos claims related to these
products from certain subsidiaries of Invensys plc, such
indemnities are limited to the purchase price paid by the
Company related to the Invensys Metering Systems acquisition.
Raleigh, NC-based Sensus Metering Systems Inc. provides metering
and Automatic Meter Reading solutions for water, gas, electric,
and heat utilities as well as sub-metering entities worldwide.
ASBESTOS LITIGATION: American Standard Posts $10B Sales for 2005
----------------------------------------------------------------
American Standard Companies Inc. posted 2005 sales at US$10.264
billion, up 7.9% from US$9.509 billion in 2004 (up 7.2% in local
currencies), according to a Company release.
Full-year net income was US$2.56 per diluted share on a
Generally Accepted Accounting Principles (GAAP) basis, up from
US$1.42 in 2004. On an adjusted basis, net income per diluted
share was US$2.56, up 14.3% from US$2.24 in 2004 excluding an
asbestos charge taken in the 2004-4th quarter as well as
operational consolidation expenses and tax items in 2004 and
2005. The Company had estimated net income per diluted share of
US$2.54-US$2.58 on both a GAAP and adjusted basis.
For 2005, the Company generated a record US$820.4 million in net
cash provided by operating activities and a record US$511.5
million in free cash flow. In 2004, the Company had generated a
record US$764.7 million in net cash provided by operating
activities and a record US$504.5 million in free cash flow.
The Piscataway, NJ-based Company announced 2005-4th quarter net
income per diluted share of US$0.30 in accordance with GAAP, up
from the loss of US$0.41 per diluted share in the 2004-4th
quarter.
Excluding the impact of operational consolidation expenses and
tax items, net income per diluted share was US$0.46, the same as
2004-4th quarter adjusted for the same items and a 2004-4th
quarter asbestos charge.
Piscataway, NJ-based American Standard Companies Inc.
manufactures air-conditioning systems, plumbing products, and
automotive braking systems. American Standard's bathroom
contributions include plumbing fixtures under such names as
American Standard, Ideal Standard, and Porcher.
ASBESTOS LITIGATION: Japan Compensation Bill Passes Lower House
---------------------------------------------------------------
A package of bills aimed to compensate people suffering from
asbestos-related diseases cleared Japan's House of
Representatives, The Japan Times reports.
The bills, expected to clear the Diet with approval from the
Upper House later in February, also include support for people
who have lost family members to asbestos-related illness. They
include fortified measures to prevent similar problems in the
future.
The Government plans to accept financial assistance applications
in March 2006. Under the package, the Government will cover out-
of-pocket medical expenses and rehabilitation costs for people
suffering from asbestos-linked diseases, including mesothelioma,
a rare form of cancer. The Government will provide funeral
allowances for those who die from such diseases.
ASBESTOS LITIGATION: Crown Tags US$458M Loss to Debt, Asbestos
--------------------------------------------------------------
For the 2005-4th quarter, Crown Holdings Inc. posted a wide
US$458 million loss as the Company incurred charges for
refinancing and asbestos-related items, Dow Jones reports.
The US$458 million loss, or US$2.76 a share, compares to a
December 2004 loss of US$27 million, or US$0.16.
The Company's loss from continuing operations in the 2005-4th
quarter was US$428 million, or US$2.58 a share. Sales rose to
US$1.63 billion from US$1.58 billion.
In the 2005-4th quarter, the Company completed refinancing,
which consisted of the sale of US$1.1 billion in senior notes,
US$800 million credit facility and US$500 million in term loans.
As a result, the Company booked a 2005-4th quarter charge of
US$375 million, or US$2.26 a share.
Philadelphia, PA-based Crown Holdings Inc., formerly Crown Cork
& Seal Co., makes consumer packaging. Its product portfolio
consists of aerosol cans, food and beverage cans, paint cans,
plastic bottles and other containers, and metal caps, crowns,
and closures.
ASBESTOS LITIGATION: Aussie Court Orders Retrial for Mine Worker
----------------------------------------------------------------
The High Court of Australia ordered the retrial of the asbestos
case of Arthur Della Maddalena, who had won entirely due to
psychiatric claims, ABC NewsOnline reports.
The Court has ruled that Mr. Maddalena, a worker at a Wittenoom
asbestos mine in Western Australia, is entitled to compensation
from CSR Ltd, which owns Midalco, formerly known as Australian
Blue Asbestos. In a unanimous decision, the Court ruled that Mr.
Maddalena had suffered psychiatric injury caused by exposure to
asbestos, despite the fact that he does not suffer from
mesothelioma (October 15, 2004, Class Action Reporter).
Mr. Maddalena worked at the mines for around three and a half
years, between 1961 and 1966. He saw nine out of the 13 people,
who came from his Italian village to Wittenoom, die of asbestos-
related diseases, including his stepbrother.
Mr. Maddalena sought compensation in 1990 claiming to have the
symptoms of asbestos diseases as well as psychiatric injuries.
Psychiatrists who treated him had various assessments of his
injuries.
The High Court of Australia has ruled in a 3-2 decision that a
retrial is needed to consider broader issues than simply the
question of which company should be held liable.
ASBESTOS LITIGATION: Alcoa Seeks to Junk Clothing Exposure Suit
---------------------------------------------------------------
Alcoa Inc. fights to dismiss a wrongful death lawsuit filed by
an employee, representing his daughter who had allegedly died of
mesothelioma due to second-hand asbestos exposure, The Daily
Times reports.
Alcoa spokeswoman Melissa Copelan said the Company is waiting
for the outcome. Blount County Circuit Court Judge W. Dale Young
heard the motion but did not rule on the matter.
In the motion for judgment, attorneys for the Company contend,
"Tennessee has never recognized a duty of care in `clothing
exposure' premises cases. This is a case of first impression,
which is important to the proper development of Tennessee law."
Amanda Satterfield sued Alcoa Inc. and Breeding Insulation Co.
Inc., of Nashville, on December 8, 2003. In the suit, she
alleged Alcoa didn't warn Doug Satterfield, her father, of the
dangers of asbestos.
Ms. Satterfield's initial lawsuit sought US$10 million in
compensatory and US$10 million in punitive damages. The suit
also claimed that her father's exposure to asbestos dust led to
her exposure and eventual contracting of mesothelioma, a rare
form of cancer. On January 1, 2005, Ms. Satterfield died at the
age of 25.
Mr. Satterfield, aged 51, said that he hauled asbestos for Alcoa
starting in 1973. He served in the military from 1975 to 1978
and returned to work at Alcoa. He said he is still an employee
of the plant, but is temporarily disabled. He continued that
Alcoa does not want the case to go to trial.
According to Alcoa's motion, the plaintiffs failed to show that
Ms. Satterfield's "injury was a reasonably foreseeable
probability," and her premature birth in 1979 and her death were
not "reasonably foreseen" by the Company.
Pittsburgh, PA-based Alcoa Inc. produces alumina (aluminum's
principal ingredient, processed from bauxite) and aluminum. Its
vertically integrated operations include bauxite mining, alumina
refining, and aluminum smelting; primary products include
alumina and its chemicals, automotive components, and sheet
aluminum for beverage cans.
ASBESTOS LITIGATION: Ex-Rail Worker Sues CSX, Others for Damages
----------------------------------------------------------------
A former railroad worker, Thomas Jackson Black, and his wife,
Patricia A. Black, launched a suit against seven firms for his
exposure to asbestos during his nearly 40 years on the job, The
West Virginia Record reports.
In the suit filed on January 12, 2006 in the Kanawha Circuit
Court, Mr. Black alleged that he worked for the Chesapeake and
Ohio Railway Co., which later became part of CSX Transportation
Inc., from 1951 to 1960 and from 1967 to 1995.
Mr. Black claimed that he was exposed to asbestos dust and
fibers in the course of his duties as a laborer and crane
operator. This exposure, he said, caused him to suffer severe
and permanent injuries, including mesothelioma.
The defendants in the eight-count suit are CSX Transportation
Inc., Certainteed Corporation, Metropolitan Life Insurance
Company, Owens-Illinois; Rapid American Corporation; Union
Carbide and Vimasco Corporation.
Mr. Black said C&O, later CSX, did not provide a safe workplace,
did not provide proper safety equipment, did not warn its
employees of the dangers of asbestos and failed to teach them
the safe use and removal of asbestos.
Mr. Black further contended the other companies, which provided
asbestos and asbestos-containing materials, did not explain the
dangers of asbestos and sold products that were not fit for use.
Mr. Black also sued Metropolitan Life for conspiracy, citing the
1934 study backed by Met Life and Johns-Manville Corporation, in
which Dr. Anthony Lanza of Met Life did not say asbestos
exposure could be fatal.
Charleston, WV attorney James A. McKowen of James F. Humphreys &
Associates represents the Black couple. Also slated to represent
the Blacks are John Guerry III and William E. Applegate IV of
Motley Rice LLC, a South Carolina-based practice.
ASBESTOS ALERT: DEP Charges Two MA Firms for Asbestos Violations
----------------------------------------------------------------
The Massachusetts state Department of Environmental Protection
charges Franklin Analytical Services, Inc. with US$7,350 and
Kristie's Wrecking with US$5,750 for asbestos violations during
a June 2005 demolition job of a commercial property at 191
Bedford St. in Fall River, The Standard Times reports.
On June 6, 2005, a representative of the Division of
Occupational Safety alerted the DEP regarding possible asbestos
violations in the property's basement. DEP inspectors found
asbestos-containing material in loose chunks of dry asbestos
insulation on the floor, on the boiler and hanging off the pipes
attached to the ceiling.
State regulations stipulate wetting asbestos material during
removal and proper sealing of work areas.
DOS halted all work at the site and required the services of an
industrial hygienist to conduct an asbestos survey of the
building before completing demolition.
"The safety or workers and the protection of the general public
are the foundation of the state's asbestos regulations," said
Gary Moran, director of DEP's Southeastern Regional Office in
Lakeville. "Companies are required to provide training for their
employees regarding the appropriate method to identifying and
handling this dangerous material."
Kristie's Wrecking is required to enroll its employees in an
asbestos awareness course. After the course, the Company will
receive a US$1,750 credit on the fine.
Franklin Analytical is sanctioned to present a report to the DEP
with future measures to prevent similar violations. The Company
will pay US$3,675 to the state, with the remaining balance
suspended when the Company completes an auxiliary environmental
project.
COMPANY PROFILE
Kristie's Wrecking
700 Old Fall River Rd
North Dartmouth, MA
Tel: 508-985-0973
Description:
The Company is a wrecking and demolition contractor.
COMPANY PROFILE
Franklin Analytical Services, Inc.
401 Delano Rd
Marion, MA
Tel: 508-748-3156
Description:
The Company provides asbestos inspection, removal, and
consulting services.
ASBESTOS ALERT: Rotunda to Pay GBP11T for Handling Violations
-------------------------------------------------------------
The Southport Magistrates Court issued a total fine of GBP11,185
to Rotunda Group Ltd for not operating in accordance with their
Waste Management License, particularly accepting prohibited
wastes, according to an Environment Agency release.
Rotunda pleaded guilty for not complying with its waste
management license by knowingly permitting the deposit and
keeping of asbestos on an alternate site, which had no license
or exemption.
The Magistrates Court issued Rotunda a fine of GBP9,000. The
Company, which was trading as Southport Skip Hire, was also
ordered to pay GBP2,185 costs.
The Environment Protection Agency has a legal obligation to
regulate where special waste can be deposited, treated and
disposed. This is to minimize health risks and the damage to the
environment.
Environment Agency Officer Janet Eastham said, "Waste Management
Licenses are in place to impose strict criteria to protect the
environment and human health. The conditions imposed on a
license reflect, amongst other things, the types of waste
permitted. Sites that knowingly accept non-permitted waste, in
this case asbestos, are clearly illegal, irresponsible and anti-
social and we will continue to take action against anyone caught
doing so.
"This case should send a clear message to all producers and
carriers of waste to ensure they know how to safely manage their
wastes and check that the companies they deal with are licensed
and competent," Ms. Eastham added.
ASBESTOS ALERT: OR Agency Charges Firm $1,800 for Removal Breach
----------------------------------------------------------------
The Oregon Department of Environmental Quality charged a
Hillsboro business US$1,800 for removing asbestos without a
license from a West Salem dry cleaner, the StatesmanJournal
reports.
The owners of West Gate Dry Cleaners on Wallace Road called the
Department of Environmental Quality and reported In Kwon Lee
(doing business as PARTS), which did not have an asbestos-
abatement license.
Employees cut through asbestos-containing exterior wallboard
while removing dry-cleaning equipment.
On December 12, 2005, the Agency issued the fine to In Kwon Lee,
which has not responded to the Agency's January 3, 2006
deadline.
A respiratory hazard, asbestos fibers are known to cause lung
cancer and other diseases. The state regulates the handling and
disposal of any material containing more than 1% asbestos.
ASBESTOS ALERT: Omni-Pac Charged GBP50,000 For Asbestos Breaches
----------------------------------------------------------------
The Norwich Crown Court issued a GBP50,000 fine to Omni-Pac
(UK), GBP25,000 for each of two charges, after the Company
pleaded guilty to violating health and safety laws, according to
a Health and Safety Executive statement.
The Court also ordered the Company to pay prosecution costs
amounting to GBP86,000.
This criminal case follows an HSE investigation into the
condition of asbestos containing materials at the Company's site
in South Denes Road in October 2003.
Air samples showed a high level of asbestos at Omni-Pac. The
contamination primarily came from damaged and poorly maintained
asbestos insulation on top of dryers used to produce the
finished papier-mache egg cartons.
On November 7, 2005, the Company admitted breaching the Health
and Safety at Work etc Act 1974, with respect to the Company's
duties both to its employees and to others who were affected by
the way it conducted its undertaking.
"Omni-Pac failed to maintain the asbestos containing materials
throughout the site, particularly in those areas at high level
that were not readily visible. The Company failed to adhere to
its own procedures and consequently people could have been
exposed asbestos over a long period of time," HSE investigating
inspector Paul Carter said following the hearing.
COMPANY PROFILE
Omni-Pac (UK) Ltd
South Denes, Great Yarmouth
Norfolk, United Kingdom
Tel: 01493 855381
Fax: 01493 858464
http://www.omni-pac.info.co.uk/
Description:
The Company manufactures papier-mache egg cartons.
New Securities Fraud Cases
DOT HILL: Charles J. Piven Files Securities Fraud Suit in CA
------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Dot Hill
Systems Corp. (HILL) between April 23, 2003 and February 3,
2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of California against defendant Dot Hill and
one or more of its officers and/or directors. The action
charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements
to the market throughout the Class Period, which statements had
the effect of artificially inflating the market price of the
Company's securities. No class has yet been certified in the
above action.
For more details, contact The Law Offices Of Charles J. Piven,
P.A., The World Trade Center-Baltimore, 401 East Pratt Street,
Suite 2525, Baltimore, MD 21202, Phone: 410/986-0036, E-mail:
hoffman@pivenlaw.com.
DOT HILL: Goldman Scarlato Files Securities Fraud Suit in CA
------------------------------------------------------------
Goldman Scarlato & Karon, P.C., initiated a lawsuit in the
United States District Court for the Southern District of
California, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Dot Hill Systems Corp.
("Dot Hill" or the "Company") (HILL) between April 23, 2003 and
February 3, 2005, inclusive, (the "Class Period"). The lawsuit
was filed against Dot Hill and certain officers and directors
("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges
that during the Class Period, Defendants issued a series of
false and misleading statements due to improper revenue
recognition and poor internal controls. More specifically,
these statements were false and misleading because:
(1) The Company's accounting staff suffered from a lack of
necessary resources required to perform their functions
adequately;
(2) the Company routinely mis-classified expenses and
manipulated its cost of goods sold; and,
(3) the Company lacked adequate internal controls over
financial reporting.
On February 3, 2005, Dot Hill announced its preliminary fourth
quarter 2004 financial results and announced that it would
restate its 2004 results due to a data entry error that the
Company attributed to a material weakness in internal control
over its financial closing process. The Company also announced
that it had identified other errors that it deemed immaterial,
including the incorrect classification of certain product costs
as operating expenses, the failure to eliminate corresponding
revenue and cost of goods sold entries and the presence of
duplicate entries. Shares fell from $6.36 per share to $5.70
per share, or 10.4%, in reaction to the news.
For more details, contact Brian Penny, Esq. of The Law Firm of
Goldman Scarlato & Karon, P.C., Phone: 888-753-2796 E-mail:
info@gsk-law.com.
FARO TECHNOLOGIES: Murray Frank Sets Lead Plaintiff Deadline
------------------------------------------------------------
Murray, Frank & Sailer, LLP, which initiated a class action
lawsuit in the United States District Court for the Middle
District of Florida on behalf of shareholders who purchased or
otherwise acquired the securities of FARO Technologies, Inc.
("FARO" or the "Company") (FARO) between May 6, 2004 and
November 3, 2005, inclusive (the "Class Period"), reminds
interested parties that they have until February 6, 2006, to
move the Court to serve as lead plaintiff.
FARO and its subsidiaries develop, manufacture, market and
support software-based three-dimensional measurement devices for
manufacturing, industrial, building construction and forensic
applications. The complaint charges FARO and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934, and alleges that throughout the Class
Period defendants directly participated in accounting fraud
which materially misrepresented the Company's financial results
in violation of Generally Accepted Accounting Principles
("GAAP").
At or about the beginning of the Class Period, the Company
represented that it had implemented principles that purportedly
increased the Company's production capacity, among other
improvements, by eliminating overproduction, wait time,
inefficient processes, and product defects, among others. During
the Class Period, defendants issued strong results and positive
guidance, which they attributed to, in material part, the
Company's purported implementation of adequate controls and
efficient practices. However, the complaint alleges that
defendant's Class Period representations regarding its financial
performance and prospects were materially false and misleading
when made because the Company's internal inventory and
accounting controls and procedures were wholly defective and
inadequate during the Class Period.
On November 3, 2005, after the market closed, the Company
announced that it had incurred $1.6 million in "inventory
costing and consumption variances" related to the implementation
of a new accounting and inventory management system. Defendant
Simon Raab later admitted that the Company had not been able to
keep up with customer orders, which resulted in "substantially
more complex inventory management situations, and . . .
substantial inventory increases." In reaction to this news, the
price of FARO stock plummeted $4.39, or 19.6%, from its closing
price of $22.38 on November 3, 2005, to finally close on
November 4, 2005, at $17.99, on unusually heavy volume.
For more details, contact Eric J. Belfi or Christopher S. Hinton
of Murray, Frank & Sailer, LLP, Phone: (800) 497-8076 or
(212) 682-1818, Fax: (212) 682-1892, E-mail:
info@murrayfrank.com, Web site:
http://www.murrayfrank.com/CM/NewCases/NewCases.asp.
FARO TECHNOLOGIES: Scott + Scott Sets Lead Plaintiff Deadline
-------------------------------------------------------------
Scott + Scott, LLC, who at the direction of clients filed the
first of a number of similar securities fraud class actions
against FARO Technologies, Inc. ("FARO" or the "Company")
(Nasdaq:FARO) and certain officers on behalf of investors who
purchased FARO securities between May 6, 2004, and November 3,
2005, inclusive (the "Class Period"), now notifies investors
that if they purchased or otherwise acquired FARO securities on
any stock exchange during the Class Period, may no later than
February 6, 2006, move the Court to serve as lead plaintiff.
The complaint alleges that defendants violated provisions of the
United States securities laws causing artificial inflation of
the Company's stock price. According to the complaint, the
Company repeatedly issued false and misleading quarterly and
annualized financial guidance throughout the Class Period, in
knowing or reckless disregard of the deficient and defective
state of one or more of its controls and systems, with an
adverse impact on its inventory accounting, order fulfillment
and financial statements. It is further alleged that even
though defendants quietly placed a resource management system
into operation, defendants continued to conceal their deficient
and defective controls and practices, causing the newly
implemented system to supply false and erroneous information to
the Company's departments and functions, with a continued
direct, adverse impact on order fulfillment and corporate
earnings.
Finally, investors learned the truth about the adverse impact of
the Company's alleged defective and deficient inventory-related
controls and systems on FARO's financial performance. As a
result of defendants' shocking news and disclosures following
the close of the markets on November 3, 2005, the price of FARO
stock plummeted $5.88, from its closing price of $22.38 on
November 3, 2005, to finally close on November 7, 2005, at
$16.50, for a two-day loss of 26.38%, on combined volume of over
5.9 million shares.
For more details, contact David R. Scott of Scott + Scott, LLC,
Phone: (800) 404-7770, E-mail: drscott@scott-scott.com, Web
site: http://www.scott-scott.com.
REPSOL YPF: Lerach Coughlin Lodges Securities Fraud Suit in N.Y.
----------------------------------------------------------------
Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, initiated a
class action lawsuit in the United States District Court for the
Southern District of New York on behalf of purchasers of Repsol
YPF, S.A. ("Repsol" or "the Company") (REP) American Depository
Receipts ("ADRs") between July 28, 2005 and January 27, 2006
(the "Class Period").
The complaint charges Repsol and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Repsol engages in the exploration, development, and
production of crude oil and natural gas primarily in Spain and
Argentina.
The complaint alleges that, throughout the Class Period,
defendants issued numerous materially false and misleading
statements that, among other things, highlighted the Company's
proven reserves. Reserves are the estimates of oil and natural
gas a company has in the ground and expects to eventually pump
and sell. Reserves serve as a crucial metric for oil-company
investors trying to gauge a company's growth prospects. As
alleged in the complaint, these statements were materially false
and misleading because defendants failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company was materially overstating its proven
reserves. The Company has now admitted that it will
downgrade its proven reserves by 25% and take an asset
impairment charge of approximately EUR50 million;
(2) that the Company was experiencing increasing political
pressure in Bolivia which will have an adverse effect
on the Company's operations;
(3) that the Company was experiencing difficulties in its
production of gas in Bolivia;
(4) that contracts with the Company's existing customers
would likely not be extended due to complications in
extracting gas from certain fields in Argentina; and
(5) as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and its business prospects.
Then, on January 26, 2006, the Company filed its Form 6-K with
the SEC in which it announced that it was cutting its oil and
gas reserves estimate by 25 percent due mostly to problems that
it had experienced in Bolivia and Argentina. Upon this shocking
news, on January 26, 2006, Repsol ADRs closed at $27.99 per ADR,
a decline of $2.12 per ADR, or over 7%. On January 27, 2006,
Respol ADRs continued to decline, falling another $1.34 per ADR,
or approximately 5%, as the market continued to absorb the truth
about the Company.
For more details, contact William Lerach, Samuel H. Rudman and
David A. Rosenfeld of Lerach Coughlin Stoia Geller Rudman &
Robbins, LLP, Phone: 800-449-4900, E-mail: wsl@lerachlaw.com,
Web site: http://www.lerachlaw.com/cases/repsol.
REPSOL YPF: Schatz & Nobel Lodges Securities Fraud Suit in N.Y.
---------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., filed a lawsuit seeking
class action status in the United States District Court for the
Southern District of New York on behalf of all persons who
purchased the American Depository Receipts ("ADRs") of Repsol
YPF, S.A. ("Repsol" or the "Company") (REP) between July 28,
2005 and January 27, 2006, inclusive, (the "Class Period").
The Complaint alleges that defendants violated federal
securities laws by issuing misrepresentations concerning
Repsol's proven reserves. Reserves are estimates of oil and
natural gas a company has and expects to pump, a crucial metric
in gauging a company's growth prospect. Throughout the Class
Period, defendants failed to disclose the following:
(1) that Repsol was materially overstating its proven
reserves. Repsol has now admitted that it will
downgrade its proven reserves by 25% and take an asset
impairment charge of approximately EUR 50 million;
(2) that Repsol was experiencing increasing political
pressure in Bolivia which will have an adverse effect
on the Company's operations;
(3) that the Company was experiencing difficulties in its
production of gas in Bolivia; and
(4) that contracts with Repsol's existing customers would
likely not be extended due to complications in
extracting gas from certain fields in Argentina.
On January 26, 2006, the Company filed its Form 6-K with the SEC
in which it announced that it was cutting its oil and gas
reserves estimate by 25% due mostly to problems that it had
experienced in Bolivia and Argentina. On this news, on January
26, 2006, Repsol ADRs closed at $27.99, a decline of $2.12 per
ADR, or over 7%. On January 27, 2006, Respol ADRs continued to
decline, falling another $1.34 per ADR, or approximately 5%.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa of
Schatz & Nobel, P.C., Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
*********
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