/raid1/www/Hosts/bankrupt/CAR_Public/060612.mbx
C L A S S A C T I O N R E P O R T E R
Monday, June 12, 2006, Vol. 8, No. 115
Headlines
ALLEGHENY ENERGY: July Trial Set for Securities Suit Settlement
BEST BUY: Still Faces Race, Sex Discrimination Suit in Calif.
BOUCHARD TRANSPORTATION: Faces Suit in Mass. Over 2003 Oil Spill
CHILDREN'S PLACE: July 7 Hearing Set for Calif. Suit Settlement
CINCINNATI BELL: Enters $36M Settlement for Broadwing Stock Suit
CINGULAR WIRELESS: Termination Fee Lawsuits Allowed to Proceed
FRANKLIN RESOURCES: Ill. Securities Suits' Dismissal Appealed
FRANKLIN RESOURCES: Asks Md. Court to Dismiss Mutual Funds Suits
FRANKLIN TEMPLETON: Faces Three Market-Timing Suits in Canada
GENERAL MOTORS: JPMDL Okays Transfer of N.Y. Stock Suit to Mich.
GENERAL MOTORS: Mo. Appeals Court Refuses to Hear "Gutzler" Plea
GUIDANT CORP: Fails to Send Warning on Heart Device, File Shows
HILLENBRAND INDUSTRIES: December Trial Set for Antitrust Suit
H&R BLOCK: Ark. Retirement Plan Lawsuit Moved to Kansas Court
INTERSTATE PHARMACY: $3.2 Deal in Drug Recycling Suit Approved
IPO LITIGATION: IPO Underwriters Appeal Certification of Suits
ISOLAGEN INC: Lead Plaintiffs, Counsel Chosen in Pa. Stock Suit
LOJACK CORP: Employee Files Labor-Related Suit in C.D. Calif.
LOREAL SA: Faces Suit in Calif. Over Alleged Deceptive Marketing
MASSEY ENERGY: Property Damage Lawsuits Remain Pending in W.Va.
MERRILL LYNCH: Settlement Talks in Ill. Racial Bias Suit Fail
MOHAWK INDUSTRIES: Supreme Court Orders Review of RICO Lawsuit
NEW YORK: Judge Dismisses "Double-Celling" Lawsuit by Inmates
OMNICARE INC: Ky. Court Mulls Consolidation of Securities Suits
OSI PHARMACEUTICALS: Seeks Dismissal of N.Y. Securities Lawsuit
PUBLIC STORAGE: Faces Calif. Suit Over Sale of Storage Insurance
PUTNAM FUNDS: Milberg Removed from Suit Over Trading Activities
SARA LEE: Discovery Ends in Ill. Consolidated Securities Suit
SYBRON DENTAL: Settles Calif. Suit Over Plan to Dispose of Stock
UNIVERSAL AMERICAN: Lead Plaintiff Appointed in N.Y. Stock Suit
New Securities Fraud Cases
ESCALA GROUP: Cohen, Milstein Files Stock Fraud Lawsuit in N.Y.
NEWPARK RESOURCES: Stull, Stull Files La. Securities Fraud Suit
VONAGE HOLDINGS: Goldman Scarlato Files Securities Suit in N.J.
XERIUM TECHNOLOGIES: Charles Piven Files Mass. Securities Suit
XERIUM TECHNOLOGIES: Schatz & Nobel Files Stock Suit in Mass.
*********
ALLEGHENY ENERGY: July Trial Set for Securities Suit Settlement
---------------------------------------------------------------
The U.S. District Court, District of Maryland, Northern Division
will hold a fairness hearing for the proposed $15.050 million
settlement of Allegheny Energy Securities Litigation on Jul. 14,
2006 at 11:00 a.m.
The suit was filed on behalf of all persons or entities who
purchased the securities of Allegheny Energy, Inc. between Apr.
23, 2001 and Oct. 8, 2002, inclusive. The class includes all
persons or entities who purchased Allegheny Energy Common Stock
(CUSIP Number AYE017361106) and/or Allegheny Energy 7.75% notes
due 8/1/05 (Cusip Number 017361aa4), and all persons or entities
who purchased call options or sold put options on Allegheny
Energy Common stock, during the class period.
The hearing will be held before the Honorable Andre M. Davis in
the U.S. District Court, Garmatz Federal Courthouse, Suite 4415,
101 West Lombard St., Baltimore, MD 21201.
Deadline to submit proof of claim is Aug. 14, 2006. Deadline to
file for exclusion is Jun. 26, 2006. Objections must be filed
by June 30, 2006.
For more information, contact:
(1) Deborah R. Gross, Esq. of the law Offices Bernard M.
Gross, P.C. 100 Penn Square East, Suite 450,
Philadelphia, PA 19107, Phone: (215) 561-3600, or
(2) Robert A. Wallner, Esq. of Milberg Weiss Bershad
& Schulman LLP, One Pennsylvania Plaza, New York, NY
10119, Phone: 212-594-5300
(3) Allegheny Energy Securities Litigation, c/o Archway
Claims Administration, 28220 Industry Drive, Valencia,
CA 91355, Phone: (800) 903-9994, E-mail:
http://www.alleghenysettlement.com.
BEST BUY: Still Faces Race, Sex Discrimination Suit in Calif.
-------------------------------------------------------------
Best Buy Co., Inc. continues to face a purported discrimination
class action in the U.S. District Court for the Northern
District of California, according to the company's May 10, 2006
Form 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended March 31, 2006.
On Dec. 8, 2005, the suit, "Jasmen Holloway, et al. v Best Buy
Co., Inc.," was filed, alleging that the company discriminates
against women and minority individuals on the basis of gender,
race, color and/or national origin with respect to the company's
employment policies and practices.
The action seeks an end to discriminatory policies and
practices, an award of back and front pay, punitive damages and
injunctive relief, including rightful place relief for all class
members.
The suit is "Holloway et al. v. Best Buy Co., Inc., Case No.
3:05-cv-05056-MEJ," filed in the U.S. District Court for the
Northern District of California under Judge Maria-Elena James.
Representing the plaintiffs are:
(1) Joshua Konecky, Clint J. Brayton, Todd M. Schneider and
W.H. Hank Willson, IV of Schneider & Wallace, 180
Montgomery St., Suite 2000, San Francisco, CA 94104,
Phone: (415) 421-7100, Fax: (415) 421-7105, E-mail:
jkonecky@schneiderwallace.com,
cbrayton@schneiderwallace.com,
tschneider@schneiderwallace.com and
wwillson@schneiderwallace.com; and
(2) Eve H. Cervantez, James M. Finberg, Bill Lann Lee,
Daniel M. Hutchinson and Gena E. Wiltsek of Lieff,
Cabraser, Heimann & Bernstein, LLP, Embarcadero Center
West, 275 Battery St., 30th Floor, San Francisco, CA
94111, Phone: 415/956-1000, Fax: 415-956-1008, E-mail:
ecervantez@lchb.com, JFinberg@lchb.com and
blee@lchb.com.
BOUCHARD TRANSPORTATION: Faces Suit in Mass. Over 2003 Oil Spill
----------------------------------------------------------------
Three Fairhaven, Massachusetts residents with beach property
affected by the April 2003 Buzzards Bay oil spill filed a suit
against Bouchard Transportation Co., the owner of the barge that
struck a rocky ledge in the bay, the SouthCoastToday reports.
The suit is filed in U.S. District Court in Boston on April 26,
2006. It was the second suit brought against the company by
plaintiff Claudia Martin of Fairhaven. She was originally
included in the suit filed by Mattapoisett residents in Plymouth
Superior Court on Sept. 29, 2004, but was later squeezed out.
The recent lawsuit excludes the Mattapoisett residents. It
names as plaintiffs Ms. Martin, as well as Murray and Victoria
Gintis.
The new suit was brought by Boston-based law firm Adkins,
Kelston & Zavez. If it is certified as a class action, it will
include entities from Falmouth to Dartmouth whose property
suffered oil damage.
Attorney Jason B. Adkins estimated that the class will include
at least 1,000 members with the amount of damages "far
exceeding" $5 million. According to him, the suit was filed in
federal court due to the size of the damages and the diversity
in jurisdiction. The plaintiffs are in Massachusetts and the
defendant is a New York company.
The lawsuit seeks recovery of lost rental income, lost property
value and lost use of beach property for swimming, fishing and
other activities.
Representing the Mattapoisett residents is attorney Martin E.
Levin of Stern, Shapiro, Weissberg & Garin, LLP, 90 Canal Street
Boston, Massachusetts 02114-2022 (Suffolk Co.), Phone: 617-742-
5800, Fax: 617-742-5858. Adkins, Kelston & Zavez on the Net:
http://www.akzlaw.com,Phone: 617-367-1040, Fax: 617-742-8280.
The suit is "Gintis et al. v. Bouchard Transportation, et al.,
Case No. 1:06-cv-10747-MEL, " filed in the U.S. District Court
of Massachusetts under Judge Morris E. Lasker.
Representing the plaintiffs are Jason B. Adkins, Noah N.
Rosmarin, and John P. Zavez of Adkins, Kelston and Zavez, P.C.,
90 Canal Street, 5th Floor, Boston, MA 02114, Phone: 617-367-
1040, Fax: 617-742-8280, E-mail: jadkins@akzlaw.com,
nrosmarin@akzlaw.com, jzavez@akzlaw.com.
CHILDREN'S PLACE: July 7 Hearing Set for Calif. Suit Settlement
---------------------------------------------------------------
The California Superior Court for the County of Stanislaus will
hold a fairness hearing on July 7, 2006 at 8:30 a.m. for the
proposed settlement in the class action, "In re Children's Place
Cases, J.C.C.P. No. 4418" or The Children's Place Retail Stores,
Inc. Litigation.
The case was brought on behalf of all persons who, from Nov. 12,
2003 to Oct. 21, 2005, purchased merchandise from The Children's
Place's stores in the state of California, used a credit card to
make the purchase(s), and whose telephone number was requested
by the firm.
The hearing will be held before the Honorable William A. Mayhew
to determine whether the proposed settlement is fair, reasonable
and adequate and should be finally approved by the court. It
will take place in Department 21 of the Stanislaus County
Superior Court, located at 2744 Second Street, Ceres, CA 95307.
Any objections or exclusion to and from the settlement must be
made by June 16, 2006. The deadline for submitting a proof of
claim is on Oct. 26, 2006.
For more details, contact Gene J. Stonebarger of Lindsay &
Stonebarger, 1107 9th Street, Suite 1020, Sacramento, CA 95814,
Phone: (916) 446-0032, Fax: (916) 446-0034, Web site:
http://www.lspclaw.com/index.jspand The Children's Place Retail
Stores, Inc. Litigation c/o Garden City Group, P.O. Box 91138,
Seattle, WA 98111-9238, Web site:
http://www.gardencitygroup.com/childrensplacesettlement.
CINCINNATI BELL: Enters $36M Settlement for Broadwing Stock Suit
----------------------------------------------------------------
Cincinnati Bell, Inc. reached an agreement to settle the
consolidated securities class action pending in the U.S.
District Court for the Southern District of Ohio, on behalf of
purchasers of the securities of the company's wholly owned
subsidiary, BRCOM Inc. (f/k/a Broadwing Communications Inc.)
between Jan. 17, 2001 and May 20, 2002, inclusive.
Between October and December 2002, five virtually identical
class actions were filed against Broadwing Inc. and two of its
former chief executive officers in U.S. District Court for the
Southern District of Ohio.
These complaints were filed on behalf of purchasers of
Broadwing's securities between Jan. 17, 2001 and May 20, 2002,
inclusive. They alleged violations of Section 10(b) and 20(a)
of the Securities and Exchange Act of 1934 by, inter alia:
-- improperly recognizing revenue associated with
Indefeasible Right of Use agreements; and
-- failing to write-down goodwill associated with the
company's 1999 acquisition of IXC Communications, Inc.
The plaintiffs sought unspecified compensatory damages,
attorney's fees, and expert expenses.
On Dec. 30, 2002, the "Local 144 Group" filed a motion seeking
consolidation of the complaints and appointment as lead
plaintiff. By order dated Oct. 29, 2003, Local 144 Nursing Home
Pension Fund, Paul J. Brunner and Joseph Lask were named lead
plaintiffs in a putative consolidated class action.
On Dec. 1, 2003, lead plaintiffs filed their amended
consolidated complaint on behalf of purchasers of Broadwing's
securities between Jan. 17, 2001 and May 20, 2002, inclusive.
This amended complaint contained a number of new allegations.
Cincinnati Bell Inc. was added as defendant in this amended
filing. The company's motion to dismiss was filed on Feb. 6,
2004. Plaintiffs filed their opposition on April 2, 2004, and
the company filed its reply on May 17, 2004.
On Sept. 24, 2004, Judge Walter Rice issued an order granting in
part and denying in part the company's motion to dismiss. The
order indicated that a more detailed opinion would follow, which
would provide further information regarding the portions of the
case dismissed.
On April 28, 2006, the company and plaintiffs entered into a
Memorandum of Understanding, which sets forth an agreement in
principle to settle this matter.
Under the MOU, the company and certain of its insurance carriers
will contribute a total of $36 million to settle the claims in
this matter and obtain in exchange a release of all claims from
the class members.
The suit is "In re Broadwing, Inc. Securities Litigation, Case
No. 1:02-cv-00795-WHR," filed in the U.S. District Court for the
Southern District of Ohio under Judge Walter H Rice.
Representing the plaintiffs are:
(1) William Kendall Flynn and Richard Stuart Wayne, Strauss
& Troy - 1, The Federal Reserve Building, 150 E Fourth
Street, 4th Floor, Cincinnati, OH 45202-4018, Phone:
513-621-2120, Fax: 513-621-2120, E-mail:
wkflynn@strausstroy.com or rswayne@strausstroy.com; and
(2) Paul David Young, Milberg Weiss Bershad Hynes & Lerach
LLP, One Pennsylvania Plaza, New York, NY 10119-0165,
Phone: 212-594-5300, Fax: 212-868-1229, E-mail:
pyoung@milberg.com.
Representing the company are:
(i) Peter J Beshar of Gibson Dunn & Crutcher LLP, 200 Park
Avenue, New York, NY 10166, Phone: 212-351-4084, E-
mail: pbeshar@gibsondunn.com; and
(ii) Grant Spencer Cowan, Frost Brown Todd LLC - 1, 2200 PNC
Center, 201 E 5th Street, Cincinnati, OH 45202-4182,
Phone: 513-651-6800, Fax: 513-651-6745, E-mail:
gcowan@fbtlaw.com.
CINGULAR WIRELESS: Termination Fee Lawsuits Allowed to Proceed
--------------------------------------------------------------
The U.S. Supreme Court rejected a request by Cingular Wireless,
an AT&T Corp. unit in California, to block class action
termination fee lawsuits filed against it, the Dow Jones
reports.
Cingular is facing three lawsuits over termination fee
provisions at its phone service contracts. The suits were filed
in court despite arbitration clauses in the customer's contracts
because provisions in California state law allow it. Cingular
had asked the Supreme Court to decide whether federal
arbitration laws overpower California state law so that it could
force the suits into arbitration.
One of the cases has been allowed to proceed in state court.
The company appealed and lost a motion from the California
Supreme Court.
The case is Cingular v. Mendoza, 05-1119.
FRANKLIN RESOURCES: Ill. Securities Suits' Dismissal Appealed
-------------------------------------------------------------
Plaintiffs are appealing to the U.S. Court of Appeals for the
Seventh Circuit an Illinois federal court's dismissal of four
class actions filed against various subsidiaries of Franklin
Resources, Inc. as well as certain Templeton Fund registrants.
The suits allege breach of duty with respect to the valuation of
the portfolio securities of certain Templeton Funds managed by
such subsidiaries. It is seeking, among other relief, monetary
damages and attorneys' fees and costs.
Several suits were initially filed in Illinois state courts.
The suits are:
(1) Bradfisch v. Templeton Funds, Inc., et al., Case No.
2003 L 001361, filed on Oct. 3, 2003 in the Circuit
Court of the Third Judicial Circuit, Madison County,
Illinois;
(2) Woodbury v. Templeton Global Smaller Companies Fund,
Inc., et al., Case No. 2003 L 001362, filed on Oct.
3, 2003 in the Circuit Court of the Third Judicial
Circuit, Madison County, Illinois;
(3) Kwiatkowski v. Templeton Growth Fund, Inc., et al.,
Case No. 03 L 785, filed on Dec. 17, 2003 in the
Circuit Court of the Twentieth Judicial Circuit, St.
Clair County, Illinois;
(4) Parise v. Templeton Funds, Inc., et al., Case No. 2003
L 002049, filed on Dec. 22, 2003 in the Circuit
Court of the Third Judicial Circuit, Madison County,
Illinois.
In April 2005, defendants removed these lawsuits to the U.S.
District Court for the Southern District of Illinois. On July
12, 2005, the court dismissed one of these lawsuits, "Bradfisch
v. Templeton Funds, Inc., et al.," and dismissed the remaining
three lawsuits on Aug. 25, 2005.
Plaintiffs are appealing the dismissals to the U.S. Court of
Appeals for the Seventh Circuit, according to the company's May
10, 2006 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended March 31, 2006.
FRANKLIN RESOURCES: Asks Md. Court to Dismiss Mutual Funds Suits
----------------------------------------------------------------
Franklin Resources, Inc. and certain of the Franklin Templeton
mutual funds, current and former officers, employees, and
directors asked the U.S. District Court for the District of
Maryland to dismiss the consolidated market timing/late trading
class action filed against them.
The defendants have been named in multiple lawsuits in different
federal courts in Nevada, California, Illinois, New York, and
Florida. The cases alleged violations of various federal
securities and state laws. It is seeking, among other relief,
monetary damages, restitution, removal of fund trustees,
directors, advisers, administrators, and distributors,
rescission of management contracts and 12b-1 plans, and/or
attorneys' fees and costs.
Specifically, the lawsuits claim breach of duty with respect to
alleged arrangements to permit market timing and/or late trading
activity, or breach of duty with respect to the valuation of the
portfolio securities of certain Templeton Funds managed by the
company's subsidiaries, allegedly resulting in market timing
activity. The majority of these lawsuits duplicate, in whole or
in part, the allegations asserted in the Administrative
complaint and the U.S. Securities and Exchange Commission's
findings regarding market timing in the SEC Order. The lawsuits
are styled as class actions, or derivative actions on behalf of
either the named funds or the company.
To date, more than 400 similar lawsuits against at least 19
different mutual fund companies have been filed in federal
district courts throughout the country. Because these cases
involve common questions of fact, the Judicial Panel on
Multidistrict Litigation ordered the creation of a multidistrict
litigation in the U.S. District Court for the District of
Maryland, entitled "In re Mutual Funds Investment Litigation."
The Judicial Panel then transferred similar cases from different
districts to the MDL for coordinated or consolidated pretrial
proceedings.
As of May 9, 2006, these market timing lawsuits are pending
against the company and certain of its subsidiaries, and in some
instances, name certain officers, directors and/or Funds. The
suits have been transferred to the MDL:
-- Kenerley v. Templeton Funds, Inc., et al., Case No.
03-770 GPM, filed on Nov. 19, 2003 in the U.S. District
Court for the Southern District of Illinois;
-- Cullen v. Templeton Growth Fund, Inc., et al., Case No.
03-859 MJR, filed on Dec. 16, 2003 in the U.S. District
Court for the Southern District of Illinois and
transferred to the U.S. District Court for the Southern
District of Florida on March 29, 2004;
-- Jaffe v. Franklin AGE High Income Fund, et al., Case
No. CV-S-04-0146-PMP-RJJ, filed on Feb. 6, 2004 in
the U.S. District Court for the District of Nevada;
-- Lum v. Franklin Resources, Inc., et al., Case No. C 04
0583 JSW, filed on Feb. 11, 2004 in the U.S. District
Court for the Northern District of California;
-- Fischbein v. Franklin AGE High Income Fund, et al.,
Case No. C 04 0584 JSW, filed on Feb. 11, 2004 in
the U.S. District Court for the Northern District of
California;
-- Beer v. Franklin AGE High Income Fund, et al., Case No.
8:04-CV-249-T-26 MAP, filed on Feb. 11, 2004 in the
U.S. District Court for the Middle District of Florida;
-- Bennett v. Franklin Resources, Inc., et al., Case No.
CV-S-04-0154-HDM-RJJ, filed on Feb. 12, 2004 in the
U.S. District Court for the District of Nevada;
-- Dukes v. Franklin AGE High Income Fund, et al., Case
No. C 04 0598 MJJ, filed on Feb. 12, 2004, in the
U.S. District Court for the Northern District
of California;
-- McAlvey v. Franklin Resources, Inc., et al., Case No. C
04 0628 PJH, filed on Feb. 13, 2004 in the U.S.
District Court for the Northern District of California;
-- Alexander v. Franklin AGE High Income Fund, et al.,
Case No. C 04 0639 SC, filed on Feb. 17, 2004 in the
U.S. District Court for the Northern District of
California;
-- Hugh Sharkey IRA/RO v. Franklin Resources, Inc., et
al., Case No. 04 CV 1330, filed on Feb. 18, 2004 in
the U.S. District Court for the Southern District of
New York;
-- D'Alliessi, et al. v. Franklin AGE High Income Fund, et
al., Case No. C 04 0865 SC, filed on March 3, 2004 in
the U.S. District Court for the Northern District of
California;
-- Marcus v. Franklin Resources, Inc., et al., Case No. C
04 0901 JL, filed on March 5, 2004 in the U.S.
District Court for the Northern District of California;
-- Banner v. Franklin Resources, Inc., et al., Case No. C
04 0902 JL, filed on March 5, 2004 in the U.S.
District Court for the Northern District of California;
-- Denenberg v. Franklin Resources, Inc., et al.,
Case No. C 04 0984 EMC, filed on March 10, 2004 in the
U.S. District Court for the Northern District
of California; and
-- Hertz v. Burns, et al., Case No. 04 CV 02489, filed on
March 30, 2004 in the U.S. District Court for
the Southern District of New York.
Plaintiffs in the MDL filed consolidated amended complaints on
Sept. 29, 2004. On Feb. 25, 2005, defendants filed motions to
dismiss, which are currently under submission with the court,
according to the company's May 10, 2006 10-Q filing with the
U.S. Securities and Exchange Commission for the period ended
March 31, 2006.
The suit is "In re Mutual Funds Investment Litigation, Case No.
1:04-md-15862-AMD," filed in the U.S. District Court for the
District of Maryland under Judge Andre M. Davis.
Representing the plaintiffs is H. Adam Prussin of Pomerantz
Haudek Block Grossman and Gross, LLP, 100 Park Ave., 26th Fl.,
New York, NY 10017-5516, Phone: 1-212-661-1100, Fax: 1-212-661-
8665, E-mail: haprussin@pomlaw.com.
Representing the company is Meredith Nelson Landy of O'Melveny
and Myers, LLP, 2765 Sand Hill Rd., Menlo Park, CA 94025, Phone:
16504732671, Fax: 16504732601, E-mail: mlandy@omm.com.
FRANKLIN TEMPLETON: Faces Three Market-Timing Suits in Canada
-------------------------------------------------------------
Franklin Templeton Investments Corp. continues to face three
market-timing class actions in Canada, according to the
company's May 10, 2006 10-Q filing with the U.S. Securities and
Exchange Commission for the period ended March 31, 2006.
Franklin Templeton is a subsidiary of Franklin Resources, Inc.,
and the investment manager of Franklin Templeton's Canadian
mutual funds.
The suits are seeking, among other relief, monetary damages, an
order barring any increase in management fees for a period of
two years following judgment, and/or attorneys' fees and costs.
The suits are:
-- "Huneault v. AGF Funds, Inc., et al., Case No. 500-06-
000256-046," filed on Oct. 25, 2004 in the Superior
Court for the Province of Quebec, District of Montreal;
-- "Heinrichs, et al. v. CI Mutual Funds, Inc., et al.,
Case No. 04-CV-29700," filed on Dec. 17, 2004 in
the Ontario Superior Court of Justice; and
-- "Fischer, et al. v. IG Investment Management Ltd., et
al. Case No. 06-CV-307599CP," filed on March 9, 2006 in
the Ontario Superior Court of Justice.
GENERAL MOTORS: JPMDL Okays Transfer of N.Y. Stock Suit to Mich.
----------------------------------------------------------------
The Judicial Panel on Multidistrict Litigation granted a motion
by General Motors Corp., General Motors Acceptance Corp. and
certain of the company's officers and directors to consolidate
for pretrial proceedings the action, "In re General Motors
Securities Litigation," in the U.S. District Court for the
Eastern District of Michigan.
On Sept. 19, 2005, a purported class action complaint, "Folksam
Asset Management v. General Motors, et al.," was filed in the
U.S. District Court for the Southern District of New York,
naming as defendants:
-- the company;
-- GMAC;
-- the company Chairman and Chief Executive Officer, G.
Richard Wagoner, Jr.;
-- Vice Chairman, John Devine;
-- Treasurer, Walter Borst; and
-- Chief Accounting Officer, Peter Bible (Class Action
Reporter, April 12, 2006).
Plaintiffs purported to bring the claim on behalf of purchasers
of the company's debt and/or equity securities from Feb. 25,
2002 tp March 16, 2005. The complaint alleged that defendants
violated Section 10(b) and, with respect to the individual
defendants, Section 20(a) of the Exchange Act (Class Action
Reporter, April 12, 2006).
The complaint also alleged violations of Sections 11 and 12(a),
and, with respect to the individual defendants, Section 15 of
the Securities Act, in connection with certain registered debt
offerings during the class period. In particular, the complaint
alleged that the company's cash flows during the class period
were overstated based on the reclassification of certain cash
items described in its 2004 Form 10-K (Class Action Reporter,
April 12, 2006).
The reclassification involves cash flows relating to the
financing of GMAC wholesale receivables from dealers that
resulted in no net cash receipts and the company's decision to
revise Consolidated Statements of Net Cash for the years ended
2002 and 2003 (Class Action Reporter, April 12, 2006).
The complaint also alleged misrepresentations relating to
forward-looking statements of the company's 2005 earnings
forecast that were later revised significantly downward (Class
Action Reporter, April 12, 2006).
In October 2005, a substantially identical suit was filed and
consolidated with the Folksam case as, "Galliani v. General
Motors, et al." The consolidated suit is now called, "In re
General Motors Securities Litigation" (Class Action Reporter,
April 12, 2006).
On Nov. 18, 2005, plaintiffs in the Folksam case filed an
amended complaint, which added several additional investors as
plaintiffs, extended the end of the class period to Nov. 9,
2005, and named as additional defendants three current and one
former member of the company's audit committee, as well as its
independent accountants, Deloitte & Touche LLP (Class Action
Reporter, April 12, 2006).
In addition to the claims asserted in the original complaint,
the amended complaint also added allegations regarding the
company's Form SEC 8-K dated Nov. 8, 2005, which reported that
its 2001 earnings would be restated and added a claim against
defendants Wagoner and General Motors Acceptance Corporation
Devine for rescission of their bonuses and incentive
compensation during the class period (Class Action Reporter,
April 12, 2006).
It also included further allegations regarding the company's
accounting for pension obligations, restatement of income for
2001, and financial results for the first and second quarters of
2005 (Class Action Reporter, April 12, 2006).
Neither the original complaint nor the amended complaint specify
the amount of damages sought and the defendants have no means to
estimate damages the plaintiffs will seek based upon the limited
information available in the complaint. Defendants have not yet
filed their response to the complaints, but intend to vigorously
defend these actions (Class Action Reporter, April 12, 2006).
On Dec. 13, 2005, defendants in "In re General Motors Securities
Litigation," and in certain other litigation against the company
filed a Motion with the JPMDL to transfer and consolidate those
cases for pretrial proceedings in the U.S. District Court for
the Eastern District of Michigan, (Class Action Reporter, April
12, 2006).
On Jan. 5, 2006, the defendants submitted to the JPMDL an
Amended Motion seeking to add to their original Motion several
other lawsuits pending against the company for consolidated
pretrial proceedings in the U.S. District Court for the Eastern
District of Michigan. The Panel heard these motions on March
30, 2006, (Class Action Reporter, April 12, 2006).
On Jan. 17, 2006, the court made provisional designations of
lead plaintiff and lead counsel, which designations were made
final on Feb. 6, 2006 (Class Action Reporter, April 12, 2006).
On April 17, 2006, JPMDL entered an order transferring "In re
General Motors Securities Litigation" to the U.S. District Court
for the Eastern District of Michigan for coordinated or
consolidated pretrial proceedings, according to the company's
May 10, 2006 Form 10-Q filing with the U.S. Securities and
Exchange Commission for the period ended March 31, 2006.
GENERAL MOTORS: Mo. Appeals Court Refuses to Hear "Gutzler" Plea
----------------------------------------------------------------
The Missouri Court of Appeals for the Western District declined
to hear General Motors Corp.'s appeal on the class certification
in the suit, "Gutzler v. General Motors Corp.," by the Circuit
Court of Jackson County, Missouri.
Initially filed on April 11, 2003, the suit's certified class is
comprised of "all consumers who purchased or leased a GM vehicle
in Missouri that was factory-equipped with Dex-Cool." The
coolant is included as original equipment in GM vehicles
manufactured since 1995. On Jan. 9, 2006, the class was
certified.
The court also certified two sub-classes comprised of:
-- class members who purchased or leased a vehicle with a
4.3-liter engine, and
-- class members who purchased or leased a vehicle with a
3.1, 3.4 or 3.8-liter engine.
On March 6, 2006, the Missouri Court of Appeals for the Western
District declined to hear the company's appeal of the class
certifications, and the company's petition to transfer the
matter to the Missouri Supreme Court for further review is
pending.
The company has been named as the defendant in 20 similar
putative class actions in various different federal and state
courts in the U.S. alleging defects in the engine cooling
systems in company vehicles; 14 cases are still pending in U.S.
courts including six cases that have been consolidated, either
finally or conditionally, for pre-trial proceedings in a federal
multi-district proceeding in the District Court for the Southern
District of Illinois.
GUIDANT CORP: Fails to Send Warning on Heart Device, File Shows
---------------------------------------------------------------
Judge Jack E. Hunter of the 94th State District Court in Nueces
County, Texas denied on June 6 an appeal by Guidant Corp. on his
order to make public 22 documents that it said contain
potentially sensitive information, according to Associated
Press. The judge ruled on June 5 that Guidant had improperly
designated as confidential the documents in one trial exhibit.
The disclosure shows that Guidant drafted a letter warning
doctors of a dangerous electrical malfunction in some of its
defibrillator heart devices, but the letter was not sent, the
report said. Instead, the company issued a more routine and
less-targeted "product update."
Guidant officials were reportedly worried about creating "undue
alarm" about the electrical problem.
The suit was brought by two Corpus Christi residents, Louis
Motal and Beatrice Hinojosa, who allegedly suffered mental
anguish upon discovery that the company's defibrillator heart
devices can malfunction. The case is set for trial on Sept. 18,
2006. It stands to become the first case to go to trial against
Guidant over defibrillator problems.
The company is facing more than 300 class actions and individual
lawsuits connected to defibrillator problems. Most of them were
filed in U.S. District Court and transferred under
"Multidistrict Litigation" rules to the court in Minnesota.
For more information, contact plaintiffs attorney Robert C.
Hilliard, and Robert J. Patterson of Watts Law Firm, L.L.P.,
Tower II Building, 14th Floor, 555 North Carancahua Street
Corpus Christi, Texas 78478-0801 (Nueces Co.), Phone: 361-887-
0500, Fax: 361-887-0055.
Guidant's attorney is Elmore James Shepherd of Shook, Hardy &
Bacon L.L.P., JP Morgan/Chase Tower, 600 Travis Street, Suite
1600, Houston, Texas 77002-2911 (Ft. Bend, Harris & Montgomery
Cos.), Phone: 713-227-8008, Fax: 713-227-9508.
Guidant is now owned by Natick-based Boston Scientific Corp.,
which bought it for $27 billion in April.
HILLENBRAND INDUSTRIES: December Trial Set for Antitrust Suit
-------------------------------------------------------------
A Dec. 5, 2006 class certification hearing is set for the class
action, "Funeral Consumers Alliance Inc et al. v. Service
Corporation International, Case No. 4:05-cv-03394," which is
pending in the U.S. District Court for the Southern District of
Texas against Hillenbrand Industries, Inc. and several other
defendants.
On May 2, 2005, a non-profit entity called Funeral Consumers
Alliance, (FCA) Inc. and several individual consumers filed a
purported class action antitrust lawsuit against three national
funeral home businesses:
-- Service Corp. International (SCI),
-- Alderwoods Group, Inc., and
-- Stewart Enterprises, Inc. together with the company and
its Batesville Casket Company, Inc. subsidiary, in the
U.S. District Court for the Northern District of
California.
This lawsuit alleged a conspiracy to suppress competition in an
alleged market for the sale of caskets through a group boycott
of so-called "independent casket discounters," that is, third
party casket sellers unaffiliated with licensed funeral homes; a
campaign of disparagement against these independent casket
discounters; and concerted efforts to restrict casket price
competition and to coordinate and fix casket pricing, all in
violation of federal antitrust law and California's Unfair
Competition Law.
It claimed, among other things, that Batesville's maintenance
and enforcement of, and alleged modifications to, its long-
standing policy of selling caskets only to licensed funeral
homes were the product of a conspiracy among Batesville, the
other defendants and others to exclude "independent casket
discounters" and that this alleged conspiracy, combined with
other alleged matters, suppressed competition in the alleged
market for caskets and led consumers to pay higher than
competitive prices for caskets.
The FCA Action alleged that two of Batesville's competitors,
York Group, Inc. and Aurora Casket Company, are co-conspirators
but did not name them as defendants. The FCA Action also
alleged that SCI, Alderwoods, Stewart and other unnamed co-
conspirators conspired to monopolize the alleged market for the
sale of caskets in the U.S.
After the FCA Action was filed, several more purported class
actions on behalf of consumers were filed based on essentially
the same factual allegations and alleging violations of federal
antitrust law and/or related state law claims. It is not
unusual to have multiple copycat class actions filed after an
initial filing, and it is possible that additional suits based
on the same or similar allegations will be brought against the
company and Batesville.
Batesville, the company and the other defendants filed motions
to dismiss the FCA Action and a motion to transfer to a more
convenient forum. In response, the court permitted the
plaintiffs to re-plead the complaint and later granted
defendants' motion to transfer the action to the U.S. District
Court for the Southern District of Texas.
On Oct. 12, 2005, the FCA plaintiffs filed an amended complaint
consolidating all but one of the other purported consumer class
actions in the U.S. District Court for the Southern District of
Texas.
The court in Texas also consolidated the only other purported
consumer class action, "Fancher v. SCI et al.," with the FCA
case for discovery purposes, though the plaintiffs in that case
filed and were proceeding under a separate amended complaint.
The amended complaints contain substantially the same basic
allegations as the original FCA complaint.
FCA plaintiffs are seeking certification of a class that
includes all U.S. consumers who purchased Batesville caskets
from any of the funeral home co-defendants at any time during
the fullest period permitted by the applicable statute of
limitations.
Fancher plaintiffs seek certification of a broader class: all
U.S. consumers and entities who purchased Batesville caskets
from any source at any time during the fullest period permitted
by the applicable statute of limitations.
Plaintiffs generally seek actual unspecified monetary damages,
trebling of any such damages that may be awarded, recovery of
attorneys' fees and costs and injunctive relief.
On Nov. 10, 2005, Batesville, the company, and other defendants
moved to dismiss the amended FCA complaint. On May 4, 2006,
after the defendants moved to dismiss the Fancher complaint, the
Fancher plaintiffs filed a notice of voluntary dismissal without
prejudice of their complaint. The court has not acted on this
notice.
A hearing on scheduling occurred on Dec. 6, 2005. As a result,
the class certification hearing is scheduled to occur on Dec. 5,
2006. The trial in the FCA matter is scheduled to begin on or
about Feb. 4, 2008.
The suit is "Funeral Consumers Alliance Inc et al. v. Service
Corporation International, Case No. 4:05-cv-03394," filed in the
U.S. District Court for the Southern District of Texas under
Judge Kenneth M. Hoyt with referral to Judge Calvin Botley.
Representing the plaintiffs are:
(1) Jonathan S. Abady of Emery Celli Brinckerhoff, 545
Madison Ave., New York, NY 10022, Phone: 212-763-5000,
Fax: 212-763-5001, E-mail: jabady@ecbalaw.com; and
(2) Gordon Ball of Ball & Scott, 550 W. Main Ave., Ste.
750, Knoxville, TN 37902, Phone: 865-525-7028, Fax:
865-525-4679, E-mail: gball@ballandscott.com;
Representing the defendants are:
(i) John F. Cove, Jr. and Richard Bruce Drubel, Jr. of
Boies Schiller Flexner, Phone: 510-874-1000 and 603-
643-9090, Fax: 510-874-1460 and 603-643-9010, E-mail:
jcove@bsfllp.com; and
(ii) Kenneth S. Marks of Susman Godfrey, LLP, 1000
Louisiana, Ste. 5100, Houston, TX 77002-5096, Phone:
713-946-9567, Fax: 713-654-6666.
H&R BLOCK: Ark. Retirement Plan Lawsuit Moved to Kansas Court
-------------------------------------------------------------
The class action, which was originally filed, on March 24, by
Debbie Jenkins of Mayflower, Arkansas against H&R Block Inc.
over the company's retirement plan has been moved to U.S.
District Court in Kansas City on June 2, the Kansas City
Business Journal reports.
In her lawsuit, Ms. Jenkins contends that Block indiscriminately
sold to consumers its Express Individual Retirement Accounts
(XIRA), and that it failed to adequately disclose significant
referral fees and commissions received by H&R Block's tax
preparers for recommending the plan, as well as maintenance fees
for the minimum required investment.
Ms. Jenkins' suit, which seeks unspecified monetary damages,
alleges that Kansas City-based H&R Block misled her and "at
least hundreds of thousands" of people who opened one of the
company's XIRA accounts.
H&R Block is facing a similar lawsuit filed by New York State
Attorney General Eliot Spitzer in New York State Supreme Court
on March 15. The case claims the company failed to adequately
disclose fees related to its XIRA product, failed to warn that
the interest paid would not cover the fees in certain instances,
and misleadingly described the interest rates on the plan.
The wrongful acts allegedly violated New York's consumer fraud
law and were a breach of the company's fiduciary duty to its
clients (Class Action Reporter, March 17, 2006).
At least 13 other class action are pending against H&R Block.
The suit is "Jenkins v. H&R Block Inc., Case No. 4:06-cv-00445-
JTM," originally filed in the U.S. District Court for the
Western District of Missouri under Judge John T. Maughmer.
Representing the plaintiffs are John G. Emerson of Emerson
Poynter LLP, 830 Apollo Lane, Houston, TX 77058, Phone: 501-907-
2555; and Scott E. Poynter of Emerson Poynter LLP, 2228
Cottondale Lane, Suite 100, Little Rock, AR 72202-2037, Phone:
(501) 907-2555.
Representing the defendants are:
(1) Brandon B Cate, John E. Tull and E.B. Chiles all of
Quattlebaum, Grooms, Tull & Burrow, PPLC, 111 Center
Street, Suite 1900, Little Rock, AR 72201-3325, Phone:
(501)379-1700 or (501) 379-1705; and
(2) Molly J. Moran, Matthew M. Neumeier, Richard P.
Steinken and Anton R. Valukas all of Jenner & Block LLP
One IBM Plaza, Chicago, IL 60611-7603, Phone: (312)
923-2885 or (312) 923-2749 or (312) 923-2938 or (312)
923-2903, Fax: (312) 840-7285 or (312) 840-7749 or
(312) 840-7338, E-mail: mmoran@jenner.com,
mneumeier@jenner.com, rsteinken@jenner.com.
INTERSTATE PHARMACY: $3.2 Deal in Drug Recycling Suit Approved
--------------------------------------------------------------
Lawyers in a class action against Interstate Pharmacy Corp. over
its sale of allegedly recycled drugs announced a $3.2 million
final settlement in the case, according to Star Bulletin.
The settlement was approved last year by Circuit Judge Eden
Hifo. It provides $2 million for distribution to about 3,000
nursing home residents in Hawaii represented in the class
action.
Interstate Pharmacy, which supplied drugs to nearly all long-
term care facilities in Hawaii, is accused of supplying drugs,
which have been returned to the company for various reasons.
The practice lasted for at least seven years, according to the
state Medicaid Fraud Unit.
Under the settlement, the University of Hawaii will receive $2.3
million that will be used for health programs benefiting the
elderly. Some $900,000 will go to 1,022 residents who are part
of the class action.
The suit was originally filed on behalf of the late Eleanor
Wallwork.
Case Background
In 2001, a class action was filed against PharMerica Inc. on
behalf of nursing-home patients who allegedly received
"recycled" medications from the early 1990s through 2000 from a
PharMerica institutional pharmacy, Interstate Pharmacy Corp., a
part of AmerisourceBergen's PharMerica Inc. subsidiary, in
Honolulu, Hawaii.
In September 2003, the Hawaii Circuit Court heard and granted
the plaintiffs' motion to certify the case as a class action.
The class consists of consumers who purchased drugs in product
lines in which recycling occurred.
Representing the plaintiffs are:
(1) Thomas R. Grande of Davis Levin Livingston Grande, 400
Davis Levin Livingston Grande Place, 851 Fort Street,
Honolulu, Hawaii 96813-4317, Phone: 808-524-7500,
Telecopier: 808-545-7802, Website:
http://www.lawyers.com/davislevin;and
(2) Rick J. Eichor of Price Okamoto Himeno & Lum, Attorneys
At Law, A Law Corporation, Suite 728, Ocean View
Center, 707 Richards Street, Honolulu, Hawaii 96813,
Phone: 808-538-1113, Fax: 808-533-0549.
IPO LITIGATION: IPO Underwriters Appeal Certification of Suits
--------------------------------------------------------------
The 2nd Circuit Court of Appeals heard on June 6 oral arguments
from lawyers of a group of Wall Street underwriters seeking to
decertify focus cases over the allocation of initial public
offerings in the late 1990s, according to MarketWatch.
Vincent DiBlasi, a lawyer for the defendants, said the class, as
currently defined, would allow individuals or institutions which
are also party to wrongdoing to benefit from the possible
compensation should the banks lose.
The focus cases are hundreds of lawsuits accusing the investment
banks in part of spurring institutional investors to buy
additional shares at higher prices once stocks began trading in
exchange for allocations of shares in other hot initial public
offerings. The practice allegedly created a demand for the
shares and boosted prices.
Defendants in the lawsuits include leading Wall Street banks
such as Bear Stearns, Credit Suisse Group, Lehman Brothers Inc.,
Morgan Stanley and Merrill Lynch & Co. (Class Action Reporter,
Sept. 30, 2005).
JPMorgan Chase & Co. was the fist to resolve the claims by
agreeing in principle in April to pay $425 million to settle the
litigation without admitting wrongdoing. Last year, Goldman
Sachs Group Inc. and Morgan Stanley agreed to pay $40 million
each.
ISOLAGEN INC: Lead Plaintiffs, Counsel Chosen in Pa. Stock Suit
---------------------------------------------------------------
The U.S. District Court for the Eastern District of Pennsylvania
has appointed lead plaintiffs and counsel in the consolidated
securities class action against Isolagen, Inc.
Initially, the company and certain of its current and former
officers and directors were named as defendants in several
purported securities class action cases in federal district
courts in Texas and Pennsylvania.
On Aug. 18, 2005, Elliot Liff brought an action, "Elliot Liff v.
Isolagen, Inc. et al., C.A. No. H-05-2887," in the U.S. District
Court for the Southern District of Texas. In this action, the
plaintiff purports to bring a federal securities fraud class
action on behalf of purchasers of the publicly traded securities
of the company between March 3, 2004 and Aug. 1, 2005, including
purchasers of Isolagen stock issued in connection with and
traceable to the company's June 2004 common stock offering.
The action asserts that the defendants violated Section 10(b) of
the Exchange Act and Rule 10b-5 by making certain false
statements and omissions to the investing public regarding the
company's business operations, management, and intrinsic value
of Isolagen's publicly traded securities. It also alleges
liability against the individual defendants under Section 20(a)
of the Exchange Act.
Subsequent cases filed against the company are:
-- "Michael Cummisky v. Isolagen, Inc. et al., C.A. No. 05-
cv-03105," in the U.S. District Court for the Southern
District of Texas filed on Sept. 6, 2005;
-- "Ronald A. Gargiulo v. Isolagen, Inc. et al., C.A. No.
05-cv-4983," in the U.S. District Court for the Eastern
District of Pennsylvania filed on Sept. 16, 2005; and
-- "Gregory J. Newman v. Frank M. DeLape, et al., C.A. No.
05-cv-5090," in the U.S, District Court for the Eastern
District of Pennsylvania filed on Sept. 23, 2005.
These actions make allegations against the defendants
substantially similar to those made in the Liff action.
Together, the Liff, Cummiskey, Gargiulo and Newman actions
comprise the "Federal Securities Actions."
The Liff and Cummiskey actions were consolidated on Oct. 7,
2005. The Gargiolo and Newman actions were consolidated on Nov.
29, 2005.
On Nov. 18, 2005, the company filed a motion with the Judicial
Panel on Multidistrict Litigation to transfer the Federal
Securities Actions plus a derivative action to the U.S. District
Court for the Eastern District of Pennsylvania.
The Liff and Cummiskey actions were stayed on Nov. 23, 2005
pending resolution of the MDL Motion. The Gargiulo and Newman
actions were stayed on Dec. 7, 2005 pending resolution of the
MDL Motion.
The MDL Motion was heard on Jan. 7, 2006 and a ruling was issued
on Feb. 23, 2006 transferring the actions pending in the
Southern District of Texas to the Eastern District of
Pennsylvania.
On April 4, 2006, the court appointed as lead plaintiffs:
-- Silverback Asset Management, LLC,
-- Silverback Master, Ltd.,
-- Silverback Life Sciences Master Fund, Ltd.,
-- Context Capital Management, LLC
-- Michael F. McNulty
and as lead counsel in the Federal Securities Actions, the law
firms of Bernstein Litowitz Berger & Grossman LLP and Kirby
McInerney & Squire LLP.
The suit is " Isolagen, Inc., Securities & Derivative
Litigation, Case No. 2:06-md-01741-RB," filed in the U.S.
District Court for the Eastern District of Pennsylvania under
Judge Ronald L. Buckwalter.
Representing the plaintiffs are:
(1) Richard Eugene Norman of Crowley Douglas, et al., 1301
McKinney, Suite 3500, Houston, TX 77010, US, Phone:
713-651-1771;
(2) Andrei V. Rado and Peter E. Seidman of Milberg Weiss
Bershad & Schulman, LLP, One Pennsylvania Plaza, New
York, NY 10119-0165, Phone: 212-594-5300;
(3) Evan J. Smith of Brodsky & Smith, LLC, Two Bala Plaza,
Suite 602, Bala Cynwyd, PA 19004, Phone: 610-667-6200,
E-mail: esmith@brodsky-smith.com;
(4) R. Tyler Tomlinson of Liederbach Hahn Foy Van Blunk &
Thompson, PC, 892 Second Street Pike, Suite C,
Richboro, PA 18954, Phone: 215-322-8300; and
(5) Marc S. Henzel of The Law Offices Of Marc s. Henzel,
273 Montgomery Avenue, Suite 202, Bala Cynwyd, PA
19004, Phone: 610-660-8000, E-mail: mhenzel182@aol.com.
Representing the company are:
(i) Charles W. Schwartz of Skadden Arps, et al., 1000
Louisiana St., Suite 6800, Houston, TX 77002, US,
Phone: 713-655-5160; and
(ii) Robert W. Hayes of Cozen O'Connor, 1900 Market Street,
Philadelphia, PA 19103, Phone: 215-665-2094, Fax: 215-
665-2013, E-mail: rhayes@cozen.com.
LOJACK CORP: Employee Files Labor-Related Suit in C.D. Calif.
-------------------------------------------------------------
Lojack Corp. is defendant in a purported class action in the
U.S. District Court for the Central District of California,
alleging violations of the Fair Labor Standards Act, the
California Labor Code and the California Business & Professions
Code,
The suit was filed on April 14, 2006 by an employee contending
that the company improperly credited breaks and overtime pay.
The suit seeks unspecified monetary and injunctive relief.
The suit is "Mike Rutti v. Lojack Corporation Inc., Case No.
8:06-cv-00350-DOC-RNB," filed in the U.S. District Court for the
Central District of California under Judge David O. Carter with
referral to judge Robert N. Block.
Representing the plaintiffs are John Glugoski and Matthew
Righetti of Righetti & Wynne, 456 Montgomery St., Ste. 1400, San
Francisco, CA 94104, Phone: 415-983-0900, E-mail:
jglugoski@righettilaw.com and matt@righettilaw.com.
Representing the company are Dan Chammas, Peter D. Holbrook and
Christopher C. Scheithauer of McDermott Will & Emery, 2049
Century Park E, 34th Fl., Los Angeles, CA 90067-3208, Phone:
310-277-4110 and 949-851-0633, E-mail: dchammas@mwe.com and
lbates@mwe.com.
LOREAL SA: Faces Suit in Calif. Over Alleged Deceptive Marketing
----------------------------------------------------------------
The law firm of Ross, Dixon & Bell, LLP filed a consumer class
action on behalf of persons who purchased Garnier Fructis hair
products during the past four years, believing they actually
strengthened hair.
Both the labeling and advertising of L'Oreal S.A.'s Garnier
Fructis shampoos and conditioners claim to make hair five times
stronger and five times smoother.
According to the complaint, filed in San Diego Superior Court,
L'Oreal "falsely promoted" its products "as able to make hair
'5x stronger,' '5x smoother,' and 'stronger with 80% less
breakage.'"
Garnier Fructis products, however, do not have any consumer
perceptible strengthening effect and L'Oreal's claims of their
strengthening efficacy misled or had the tendency to deceive the
public. Plaintiffs believe that the Garnier Fructis products,
which are the subject of "a pervasive, widespread, repetitive
advertising and marketing campaign," are in fact "nothing more
than deceptively packaged goods designed to take advantage of
the market for a product to strengthen hair."
Plaintiffs and the class seek injunctive relief, restitution,
damages, disgorgement, and corrective advertising concerning the
sale of these products.
"We believe that as a result of the misleading advertising,
anyone who bought a Garnier Fructis hair product during the
class period had expectations that they were purchasing products
that would strengthen their hair by a perceptible margin" said
Jason Hartley of Ross, Dixon & Bell LLP, lawyer for the
plaintiffs.
"Our research indicates there is absolutely no perceptible hair
strengthening effect, and the defendant should not continue
profiting from the sales of products that were deceivingly
represented and marketed."
Over the past year, L'Oreal sold more than $70 million worth of
Garnier Fructis shampoo products, which according to the suit
falsely claimed to strengthen hair.
The complaint: http://ResearchArchives.com/t/s?b37.
The suit is "Shana Hackett and Melissa Burton v. L'Oreal USA S/D
Inc., Case No. GIC 860024," filed in the Superior Court of the
state of California, County of San Diego.
For more information, contact Jason S. Hartley of Ross, Dixon &
Bell, LLP, Suite 400, 550 West "B" Street, San Diego, California
92101-3599, Phone: 619-235-4040, Fax: 619-231-8796; and Monica
H. Phillips of Ross, Dixon & Bell, LLP, Washington, DC, Phone:
(202) 662-2143, Fax: (202) 662-2190, E-mail:
mphillips@rdblaw.com.
MASSEY ENERGY: Property Damage Lawsuits Remain Pending in W.Va.
---------------------------------------------------------------
Massey Energy Co. and 12 of its subsidiaries continue to face
litigations alleging that defendants illegally transported coal
in overloaded trucks, causing damage to state roads, thereby
interfering with plaintiffs' use and enjoyment of their
properties and their right to use the public roads. Plaintiffs
seek injunctive relief and unquantified compensatory and
punitive damages.
An advocacy group representing residents in the Counties of
Boone, Raleigh and Kanawha, West Virginia, and other plaintiffs,
filed 16 suits in the Circuit Court of Kanawha County, West
Virginia in January 2003. The Supreme Court of Appeals of West
Virginia referred the consolidated lawsuits, and three similar
lawsuits against other coal and transportation companies not
involving the company's subsidiaries, to the Circuit Court of
Lincoln County, West Virginia, to be handled by a mass
litigation panel.
In March 2004, seven residents of Mingo County, West Virginia,
filed a similar lawsuit in the Circuit Court of Mingo County,
West Virginia, against the company and three subsidiaries,
raising similar claims and seeking similar relief. The Supreme
Court of Appeals referred this case to the mass litigation panel
also. The plaintiffs in all five trucking cases have requested
that the cases be further consolidated, the scope of their
claims be expanded statewide, claims be added against land
companies, and class action status be granted, according to the
company's May 10, 2006 10-Q filing with the U.S. Securities and
Exchange Commission for the period ended March 31, 2006.
MERRILL LYNCH: Settlement Talks in Ill. Racial Bias Suit Fail
-------------------------------------------------------------
Settlement talks in a racial class action filed against
brokerage firm Merrill Lynch & Co. failed to reach an agreement,
the company said, according to Reuters.
The suit was originally filed on behalf of financial advisor
George McReynold in federal court in Chicago in November. It
accuses Merrill Lynch of systematically discriminating against
African-American brokers in hiring, promotion and compensation.
It is asking compensatory and punitive damages. A status
hearing is set for June 21, 2006.
The suit is "McReynolds v. Merrill Lynch & Co., Inc., Case No.
1:05-cv-06583," filed in the U.S. District Court for the
Northern District of Illinois under Judge Robert W. Gettleman,
with referral to Judge Michael T. Mason.
Representing the plaintiffs are: Linda Debra Friedman and Mary
Stowell of Stowell & Friedman, Ltd., 321 South Plymouth Court,
Suite 1400, Chicago, IL 60604, Phone: 312-431-0888, E-mail:
lfriedman@sfltd.com, mstowell@sfltd.com.
MOHAWK INDUSTRIES: Supreme Court Orders Review of RICO Lawsuit
--------------------------------------------------------------
The U.S. Supreme Court has ordered a lower court to reconsider
its certification of a class action against Mohawk Industries
Inc., alleging violations of racketeering laws, The Atlanta
Journal-Constitution reports.
In June, the 11th U.S. Circuit Court of Appeals in Atlanta
allowed plaintiffs to sue the Calhoun, Georgia-based carpet
maker under the Racketeer Influenced and Corrupt Organizations
Act. The company is accused by current and former workers of
hiring thousands of illegal immigrants to keep wages low,
violating immigration laws, and forging documents. The suit was
filed in 2004 in the U.S. District Court for the Northern
District of Georgia.
On June 5, the Supreme Court, after hearing arguments on April
26, ruled that the appeals court should reconsider the case in
light of a separate opinion issued on the same day. In an 8-1
vote, justices voted to throw out a suit filed under RICO by
Ideal Steel Supply Corp. against National Steel Supply Inc.,
alleging that its competitor underpays New York taxes. Ideal
Steel claims it lost sales as a consequence of being undersold.
But the justices said Ideal Steel Supply could not use a RICO
lawsuit to recover damages because it had not suffered "direct"
injury, according to the report.
In the Mohawk suit, the point being argued is whether Mohawk and
its recruiters formed a separate "enterprise" that was a racket.
Mohawk denies this saying a contract with another company which
acted as recruiter, does not constitute creation of an
enterprise.
In Feb. 2004, the company filed a motion to dismiss the
complaint, which was denied by the court in April 2004. The
company then sought and obtained permission to file an immediate
appeal of the court's decision to the U.S. Court of Appeals for
the 11th Circuit (Class Action Reporter, Dec. 22, 2005).
In June 2005, the 11th Circuit reversed in part and affirmed in
part the lower court's decision. The company then filed a
motion requesting review by the full 11th Circuit. The court
refused to hear the case and the company appealed to the U.S.
Supreme Court (Class Action Reporter, Dec. 22, 2005).
The case raises the three pivotal questions in the immigration
debate:
(1) Are immigrants, legal or not, coming to work in the
U.S. because the economy needs them or because
companies exploit cheap labor to the detriment of U.S.-
born workers?;
(2) Should the front-line controls on illegal immigration
be the personnel offices of manufacturers?; and (3) and
(3) Will stricter checks on hiring documents for applicants
who look or sound foreign discriminate against all
Hispanics?
The original suit is "Williams, et al. v. Mohawk Industries,
Case No. 4:04-cv-00003-HLM," filed in the U.S. District Court
for the District of North Georgia under Judge Harold L. Murphy.
Representing the plaintiffs are:
(1) Bobby Lee Cook of Cook & Connelly, P.O. Box 370,
Summerville, GA 30747-0370, Phone: 706-857-3421, E-
mail: LisaDodd@alltel.net;
(2) Ronan P. Doherty, John Earl Floyd, Nicole G. Iannarone
and Joshua F. Thorpe of Bondurant Mixson & Elmore, 1201
West Peachtree St., N.W., 3900 One Atlantic Center,
Atlanta, GA 30309-3417, Phone: 404-881-4100, E-mail:
doherty@bmelaw.com, floyd@bmelaw.com,
iannarone@bmelaw.com and thorpe@bmelaw.com;
(3) Howard Foster of Johnson & Bell, 55 East Monroe St.,
Suite 4100, Chicago, IL 60603, Phone: 312-372-0770, E-
mail: fosterh@jbltd.com; and
(4) Matthew Daniel Thames of Goddard Thames Hammontree &
Bolding, Suite 209, P.O. Box 399, 101 N. Thornton Ave.,
Dalton, GA 30722-0399, Phone: 706-278-0464, E-mail:
mattatty@alltel.net.
Representing the defendants are, Steven Thomas Cottreau, Juan P.
Morillo and Virginia A. Seitz of Sidley Austin Brown & Wood,
1501 K. St., NW Washington, DC 20005, Phone: 202-736-8000, E-
mail: scottreau@sidley.com; and R. Carl Cannon and Rosemary C.
Lumpkins of Constangy Brooks & Smith, 230 Peachtree St., N.W.,
2400 Peachtree Center Tower, Atlanta, GA 30303-1557, Phone: 404-
525-8622, E-mail: ccannon@constangy.com.
NEW YORK: Judge Dismisses "Double-Celling" Lawsuit by Inmates
-------------------------------------------------------------
U.S. District Judge Gerard Lynch dismissed in May a class action
filed on behalf of New York state prisoners forced to share
cells, according to Associated Press.
The suit was filed in 1995 by inmates who allege New York's
policy of double-debunking some inmates in cells intended for
one prisoner violated the Constitution's protections against
cruel and unusual punishment. They said the practice puts them
at greater risk of assault, and subjects them to higher chances
of catching a disease.
In throwing out the suit, Judge Lynch rejected both the inmates'
claims that they were forced to live in unsanitary conditions,
and that their safety were jeopardized by being forced to share
a cell.
The inmates are represented by the law firm Fried, Frank,
Harris, Shriver & Jacobson LLP, Web site: http://www.ffhsj.com/.
OMNICARE INC: Ky. Court Mulls Consolidation of Securities Suits
---------------------------------------------------------------
The U.S. District Court for the Eastern District of Kentucky has
yet to rule on plaintiff's motion for consolidation of several
securities class actions filed against Omnicare, Inc.
On Feb. 2 and Feb. 13, 2006, respectively, two substantially
similar putative class actions:
-- "Indiana State Dist. Council of Laborers & HOD Carriers
Pension & Welfare Fund v. Omnicare, Inc., et al., No.
2:06cv26," and
-- "Chi v. Omnicare, Inc., et al., No. 2:06cv31"
were filed against the company and two of its officers in the
U.S. District Court For the Eastern District of Kentucky
purporting to assert claims for violation of Section 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.
The complaints, which purport to be brought on behalf of all
company shareholders, allege that the company artificially
inflated its earnings by engaging in improper generic drug
substitution and that the defendants have made false and
misleading statements regarding the company's business and
prospects.
Thus, the suit seeks, among other things, compensatory damages
and injunctive relief.
On March 7, 2006, the parties to both actions filed stipulations
agreeing that the cases should be consolidated and proposing a
scheduling order for the conduct of the actions upon
consolidation.
Those scheduling orders were entered on March 10, 2006. On
April 3, 2006 Plaintiffs in the HOD Carriers case formally moved
for consolidation and the appointment of lead plaintiff and lead
counsel pursuant to the Private Securities Litigation Reform Act
of 1995. That motion is currently pending.
The first identified complaint is "Indiana State District
Council of Laborers and HOD Carriers Pension and Welfare Fund,
et al. v. Omnicare, Inc., et al.," filed in the U.S. District
Court for the Eastern District of Kentucky.
Plaintiff firms in this or similar case:
(1) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com;
(2) Law Offices of Charles J. Piven, P.A., World Trade
Center-Baltimore,401 East Pratt Suite 2525, Baltimore,
MD, 21202, Phone: 410.332.0030, E-mail:
pivenlaw@erols.com;
(3) Lerach Coughlin Stoia Geller Rudman & Robbins, LLP,
(San Diego), 655 West Broadway, Suite 1900, San Diego,
CA, 92101, Phone: 619.231.1058, Fax: 619.231.7423;
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com;
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com; and
(6) Smith & Smith, LLP, 3070 Bristol Pike, Suite 112,
Bensalem, PA, 19020, Phone: 215.638.4847, Fax:
215.638.4867.
OSI PHARMACEUTICALS: Seeks Dismissal of N.Y. Securities Lawsuit
---------------------------------------------------------------
The U.S. District Court for the Eastern District of New York has
yet to rule on OSI Pharmaceuticals, Inc.'s motion to dismiss the
consolidated securities class action filed against it, certain
of its current and former executive officers, and the members of
its board of directors.
On or about Dec. 16, 2004, several purported shareholder class
actions were filed against the defendants. These suits were
brought on behalf of those who purchased or otherwise acquired
the company's common stock during certain periods in 2004, which
periods differed in the various complaints.
On Feb. 17, 2006, the lead plaintiff filed a consolidated
amended class action complaint seeking to represent a class of
all persons who purchased or otherwise acquired the company's
common stock during the period from April 26, 2004 through Nov.
22, 2004.
The consolidated complaint alleges that defendants made material
misstatements and omissions concerning the survival benefit
associated with the company's product, Tarceva, and the size of
the potential market of Tarceva upon approval of the drug by the
U.S. Food and Drug Administration.
It alleges violations of Sections 11 and 15 of the Securities
Act of 1933, as amended, and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated there under.
The suit seeks unspecified compensatory damages and other
relief.
On April 7, 2006, the company filed a motion to dismiss the
consolidated amended complaint. It expects briefing to be
concluded on the motion to dismiss by the end of June 2006.
The first identified suit in this litigation, "Kassover, et al.
v. OSI Pharmaceuticals, Inc., et al., case no. 04-CV-05505,"
filed in the U.S. District Court for the Eastern District of New
York under Judge Joanna Seybert.
Plaintiff firms in this litigation are:
(1) Dyer & Shuman, LLP, 801 East 17th Avenue, Denver, CO,
80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, E-
mail: info@dyershuman.com; and
(2) Schoengold & Sporn, P.C., 233 Broadway 39Th Floor, New
York, NY, 10279, Phone: 212.964.0046.
PUBLIC STORAGE: Faces Calif. Suit Over Sale of Storage Insurance
----------------------------------------------------------------
Public Storage, Inc. is defendant in a purported insurance class
action in the Superior Court of California, Orange County,
captioned, "Simas v. Public Storage, Inc."
Filed on January 2006, plaintiffs bring this action against the
company on behalf of a purported class, who bought insurance
coverage at the company's facilities. They are alleging that
the company does not have a license to offer, sell and/or
transact storage insurance. The suit was brought under
California Business and Professions Code Section 17200.
The company filed a demurrer to the complaint. While the
demurrer was pending, plaintiffs amended the complaint to allege
a national class and claims for unfair business practices,
quasi-contract, common counts, and negligent and intentional
misrepresentation.
PUTNAM FUNDS: Milberg Removed from Suit Over Trading Activities
---------------------------------------------------------------
Ohio Attorney General Jim Petro removed Milberg Weiss Bershad &
Shulman LLP as attorney for Ohio Tuition Trust Authority, the
state's college savings plan, in lawsuits against Putnam
American Government Income Fund, according to Bloomberg News.
Milberg Weiss and senior partners, David Bershad and Steven
Schulman have been indicted for alleged conspiracy to pay
kickbacks to plaintiffs in class actions.
Putnam American is run by Putnam Investments. The tuition trust
entered into a contract with Putnam Investments in July 2000 for
investment-management services and to offer a new line of
college savings investment options for the Tuition Trust's
CollegeAdvantage 529 Savings Plan. Putnam manages 17
CollegeAdvantage investment options.
Putnam is accused of engaged in improper short-term and late
trading with other mutual fund companies in 300 suits. The
Putnam International Equity Fund and Putnam International
Capital Opportunities Fund are the two College Advantage funds
affected by alleged market-timing activities (Class Action
Reporter, Dec. 23, 2006). The consolidated suit was filed in
federal court in Baltimore in October 2003.
Putnam is a unit of Marsh & McLennan Cos., Janus Capital Group
Inc., Franklin Resources Inc. and Invesco Funds Group.
SARA LEE: Discovery Ends in Ill. Consolidated Securities Suit
-------------------------------------------------------------
Discovery concluded in the consolidated securities class action
pending in the U.S. District Court for the Northern District of
Illinois against Sara Lee Corp.
On May 13, 2003, John Gallo, a purported the company
stockholder, filed a putative class action in the U.S. District
Court for the Northern District of Illinois on behalf of
purchasers of the company common stock between and including
Aug. 1, 2002 and April 24, 2003.
The complaint names the company, C. Steven McMillan, former
Chairman, President and Chief Executive Officer of the company,
and Lambertus M. de Kool, Executive Vice President and Chief
Financial and Administrative Officer of the company, as
defendants. The plaintiff seeks, among other things, class
action certification, compensatory damages in an unspecified
amount, and an award of costs and expenses, including counsel
fees.
Seven other putative class actions were filed in the U.S.
District Court for the Northern District of Illinois, and named
the company, Mr. McMillan, and Mr. de Kool as defendants.
The allegations in each of those complaints are substantially
similar to the allegations of the lawsuit described in the
immediately preceding paragraph.
Each of the foregoing actions was later consolidated in a single
proceeding, "In re Sara Lee Corp. Securities Litigation." On
Jan. 20, 2004, plaintiffs filed a consolidated amended
complaint.
The consolidated amended complaint contains similar allegations
that the defendants violated Sections 10(b) and 20(a) of the
U.S. Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by allegedly misstating or omitting material adverse
facts regarding the company's business, operations, management
and financial statements, and the value of the company common
stock, which allegedly enabled the company to complete
securities offerings, enabled the individual defendants to
increase their bonus compensation and caused the purported class
to purchase the company common stock at artificially inflated
prices.
The consolidated amended complaint, however, omitted the
previous allegations that the individual defendants or other
insiders sold their personally held company stock to the public
at artificially inflated prices.
On March 5, 2004, the company filed a motion to dismiss the
consolidated amended complaint. The motion was denied on Dec.
21, 2004, and the company's motion to take an immediate appeal
from that ruling was denied on May 26, 2005. On June 30, 2005,
the company filed its answer to the complaint, denying all
allegations of wrongdoing.
On Oct. 19, 2005, the company filed a motion for judgment on the
pleadings based on plaintiffs' failure to adequately plead loss
causation. The motion was fully briefed at the end of November
2005, and the company is currently awaiting the judge's ruling
on the motion.
On Dec. 15, 2005, plaintiffs filed their motion for class
certification. In early March 2006, as part of class
certification discovery, the company deposed both lead
plaintiffs' representatives.
In addition, the company served additional third-party subpoenas
on their investment advisors. Discovery on class issues closed
on May 15, 2006. The company's response in opposition to class
certification is due on June 14, 2006. Plaintiffs' reply is due
on July 31, 2006.
The suit is "In Re: Sara Lee Corp. Securities Litigation, Case
No. 03-CV-3202," filed in the U.S. District Court for the
Northern District of Illinois under Judge Hon. Charles R.
Norgle, Sr.
Plaintiff firms named in the complaint:
(1) Geller Rudman, PLLC, 197 South Federal Highway, Suite
200, Boca Raton, FL, 33432, Phone: 561.750.3000, Fax:
888.262.3131, E-mail: info@geller-rudman.com;
(2) Milberg Weiss Bershad & Schulman, LLP, (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com;
(3) Miller, Faucher & Cafferty, LLP, 30 North LaSalle
Street, Suite 3200, Chicago , IL, 60602, Phone:
312782.4880, E-mail: mmiller@millerfauchner.com;
(4) Much, Shelist, Freed, Denenberg, Ament & Eiger, P.C.,
200 N. LaSalle St., Ste. 2100, Chicago, IL, 60601,
Phone: 312.346.3100; and
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com.
SYBRON DENTAL: Settles Calif. Suit Over Plan to Dispose of Stock
----------------------------------------------------------------
Sybron Dental Specialties, Inc. settled a purported class action
in the Superior Court of the State of California, County of
Orange over the planned acquisition by Smile Acquisition Corp.
(Purchaser) of the company's stock.
On April 24, 2006, Dolphin Limited Partnership I, L.P. and City
of Pontiac General Employees' Retirement System, purported
holders of shares of common stock of the company, filed a class
action complaint, purportedly on behalf of themselves and all
others similarly situated, against the company, the company's
directors, Danaher Corp. and Smile, an indirect wholly-owned
subsidiary of Danaher.
The complaint alleges breach of fiduciary duties of loyalty, due
care, independence, good faith, and fair dealing; failure to
maximize shareholder value; impermissibly locking up the
proposed acquisition through allegedly improper defensive
measures; and failing to disclose material information to
shareholders in connection with the proposed acquisition.
According to the complaint, the plaintiffs were seeking, among
others, preliminary and permanent equitable relief, including an
injunction against consummation of the proposed acquisition and
an unspecified amount for the costs and disbursements of the
lawsuit, including reasonable attorneys' and experts' fees.
On May 5, 2006, an agreement in principle was reached to settle
the class action. The settlement resolves allegations by the
plaintiffs against Danaher, the Purchaser, the company and the
company's directors, in connection with the tender offer, and
includes no admission of wrongdoing.
Under the terms of the settlement, the parties agreed to reduce
the termination fees associated with the transaction to an
aggregate amount of $45 million in fees and expenses.
In addition, the parties have agreed that the company's
shareholders rights plan and other contractual restrictions will
not be applicable to tender offers offering the company's
shareholders above $47 in cash by third parties who sign and
deliver the same form of merger agreement that Danaher has
signed and comply with certain other conditions.
While the provisions of the agreement in principle are effective
immediately, certain other provisions of the settlement are, as
is customary, subject to court approval.
UNIVERSAL AMERICAN: Lead Plaintiff Appointed in N.Y. Stock Suit
---------------------------------------------------------------
The Western Washington Laborers-Employers Pension Trust was
appointed lead plaintiff in the consolidated securities class
action pending in the U.S. District Court for the Southern
District of New York against Universal American Financial Corp.
Several actions containing related factual allegations were
filed against the company and certain of its officers and
directors between Nov. 22, 2005 and Feb. 2, 2006. Plaintiffs
voluntarily withdrew one of these actions, while some of the
remaining ones were later consolidated.
In the first action, Robert Kemp filed a purported class action
complaint on Nov. 22, 2005, in the U.S. District Court for the
Southern District of New York. "Kemp" is purported class action
asserted on behalf of those shareholders of the company who
acquired the company's common stock between Feb. 16, 2005 and
Oct. 28, 2005.
Plaintiffs in the "Kemp" seek unspecified damages under Section
10(b) and 20(a) of the Securities Exchange Act of 1934 based
upon allegedly false statements by the company and Richard A.
Barasch, Robert A. Waegelein and Gary W. Bryant in press
releases, financial statements and analyst conferences during
the class period.
Another purported class action was filed by Western Trust
Laborers-Employers Pension Trust, a putative class member in the
Kemp Action who had filed a motion to be named as lead plaintiff
in that action, on Feb. 2, 2006, in the U.S. District Court for
the Southern District of New York.
The factual and legal allegations in the Western Trust Action,
which also purports to be a class action, are similar to those
in the Kemp Action.
By order dated May 1, 2006, the Kemp Action and the Western
Trust Action were consolidated, and Western Washington Laborers-
Employers Pension Trust was named lead plaintiff.
The first identified complaint is "Kemp v. Universal American
Financial Corp., et al., Case No. 1:05-cv-09883-JFK," filed in
the U.S. District Court for the Southern District of New York
under Judge John F. Keenan.
Representing the plaintiffs are Steven G. Schulman, Peter Edward
Seidman and David Avi Rosenfeld of Milberg Weiss Bershad &
Schulman, LLP, (NYC), One Pennsylvania Plaza, New York, NY
10119, Phone: 212-946-9356, (212) 613-5625 and 631-367-7100 Fax:
212-273-4406, (212) 868-1229 and 631-367-1173, E-mail:
sschulman@milbergweiss.com, pseidman@milberg.com and
drosenfeld@lerachlaw.com.
Representing the defendants are Joseph Francis Donley and Andrew
J. Levander of Swidler Berlin Shereff Friedman, LLP, 405
Lexington Avenue, New York, NY 10174, Phone: (212) 891-9524 and
(212) 698-3500, Fax: (212) 891-9598 and (212) 698-3500, E-mail:
joseph.donley@dechert.com and andrew.levander@dechert.com.
New Securities Fraud Cases
ESCALA GROUP: Cohen, Milstein Files Stock Fraud Lawsuit in N.Y.
---------------------------------------------------------------
The law firm Cohen, Milstein, Hausfeld & Toll, P.L.L.C., filed a
lawsuit in the U.S. District Court for the Southern District of
New York on behalf of its client and on behalf of other
similarly situated purchasers of Escala Group, Inc. (ESCL)
common stock between Sept. 5, 2003 and May 10, 2006, inclusive.
The company was created in September 2003 through the
integration of the auction businesses of Greg Manning Auctions,
Inc., a stamp and coin auction house, and Auctentia, S.L. of
Spain. Auctentia is the wholly owned subsidiary of privately-
owned Afinsa Bienes Tangibles, S.A., the largest shareholder of
Escala as well as one of its most important sources of revenues.
Several of Afinsa's officers are also officers and/or directors
of Escala. Escala, in turn, is the primary supplier of the
stamps sold by Afinsa.
The complaint charges Escala and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 (Exchange Act). The complaint
alleges that defendants omitted or misrepresented material
adverse facts about the company's financial condition, business
prospects, and revenue expectations during the Class Period.
Specifically, the complaint alleges that, during the Class
Period, defendants issued numerous materially false and
misleading statements, which caused Escala's securities to trade
at artificially inflated prices.
As alleged in the Complaint, these statements were materially
false and misleading because they misrepresented and failed to
disclose that:
-- the company's business model was based on a fraud;
-- Afinsa was overvaluing its stamp inventory in order to
attract investors;
-- Afinsa was paying its investors with money from newly
arrived investors rather than generated revenues;
-- Afinsa's revenues were generated through fraudulent
activities;
-- the company lacked adequate internal controls; and
-- as a result, the company's financial statements were
materially false and misleading when made.
According to the complaint, on May 9, 2006, Escala issued a
press release announcing that it had been advised that Spanish
judicial authorities, as part of an investigation into its
stamps-collectibles sector, had collected and were reviewing
documents from Afinsa and also Escala's offices in Madrid. In
addition, the company announced that certain members of the
board of directors of Afinsa, including an Afinsa representative
on Escala's board, were being questioned.
The complaint alleges that in response to the company's
announcements, the price of Escala stock dropped from $32.00 to
$12.23 per share and then to $6.55 per share on May 10, 2006.
Then, on May 11, 2006, Spanish prosecutors charged 11 people
involved in the scheme, including five individuals affiliated
with Afinsa, and Escala's stock collapsed to as low as $4.01 per
share, before closing at $4.34 per share.
Interested parties have no later than July 10, 2006 to request
that the Court for appointment as Lead Plaintiff of the class.
For more details, Steven J. Toll, Esq. and Robert Smits of
Cohen, Milstein, Hausfeld & Toll, P.L.L.C., 1100 New York
Avenue, N.W. West Tower, Suite 500, Washington, D.C. 20005,
Phone: 888-240-0775 or 202-408-4600, E-mail: stoll@cmht.com or
rsmits@cmht.com.
NEWPARK RESOURCES: Stull, Stull Files La. Securities Fraud Suit
---------------------------------------------------------------
Stull, Stull & Brody initiated a class action in the U.S.
District Court for the Eastern District of Louisiana on behalf
of a class of all persons who purchased or acquired publicly
traded securities of Newpark Resources, Inc. (NR) between Feb.
28, 2005 and April 16, 2006, inclusive.
The complaint alleges that defendants violated federal
securities laws by issuing a series of materially false
statements.
Specifically, defendants' class period representations regarding
Newpark were materially false and misleading when made because
the company failed to disclose irregularities with the
processing and payment of invoices by the company's subsidiary,
Soloco Texas, LP.
On April 17, 2006, Newpark issued a press release announcing a
company investigation into the processing and payment of
invoices at Soloco Texas LP, and that Newpark's chief financial
officer and former chief executive officer had been placed on
administrative leave pending the completion of the
investigation.
On this news, shares of Newpark plummeted to $1.28 per share, to
close on April 17, 2006, at $6.14 per share -- more than 17%
below the previous day's close.
Interested parties may request that the Court for appointment as
lead plaintiff no later than June 20, 2006.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody, Phone: 1-800-337-4983, Fax: 212/490-2022, E-mail:
SSBNY@aol.com, Web site: http://www.ssbny.com.
VONAGE HOLDINGS: Goldman Scarlato Files Securities Suit in N.J.
---------------------------------------------------------------
The law firm of Goldman Scarlato & Karon, P.C., initiated a
class action in the U.S. District Court for the District of New
Jersey, on behalf of persons who purchased or otherwise acquired
publicly traded securities of Vonage Holdings Corp. (VG)
pursuant to the company's Initial Public Offering on or about
May 23, 2006, inclusive. The lawsuit was filed against the
company and certain officers and directors and certain
underwriters.
The complaint alleges that the company and certain officers and
underwriters violated the federal securities laws by publishing
a materially false and misleading joint Registration Statement
and Proxy-Prospectus.
The complaint alleges that:
-- Vonage's insiders, who were seeking an exit strategy
after generating significant operating losses, pursued
a course of conduct designed to sell their over-priced
shares of the company to the public;
-- the company pre-sold at least 13.5% of its IPO shares
to company customers in violation of Rule 2310, which
requires that a customer must have a reasonable basis
for believing that the investment was suitable;
-- underwriter defendants violated the securities laws by
allowing the improper action to continue.
As a result of the alleged illegal conduct, shares of Vonage
sold in the IPO declined more than 30% in its first seven
trading days.
For more details, contact Mark S. Goldman, Esq. of The Law Firm
of Goldman Scarlato & Karon, P.C., Phone: 888-753-2796, E-mail:
info@gsk-law.com.
XERIUM TECHNOLOGIES: Charles Piven Files Mass. Securities Suit
--------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. commenced a securities
class action on behalf of shareholders who purchased the common
stock of Xerium Technologies, Inc. (XRM) pursuant and/or
traceable to the company's initial public offering on or about
May 16, 2005 through Nov. 15, 2005.
The case is pending in the U.S. District Court for the District
of Massachusetts against defendant Xerium 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.
Interested parties may move the court no later than Aug. 7, 2006
to serve as a lead plaintiff for the proposed class.
For more details, contact Law Offices Of Charles J. Piven, P.A.
at The World Trade Center-Baltimore, 401 East Pratt Street,
Suite 2525, Baltimore, Maryland 21202, Phone: 410/986-0036, E-
mail: hoffman@pivenlaw.com.
XERIUM TECHNOLOGIES: Schatz & Nobel Files Stock Suit in Mass.
-------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., filed a class action in
the U.S. District Court for the District of Massachusetts on
behalf of all persons who purchased or otherwise acquired the
common stock of Xerium Technologies Inc. (XRM) pursuant and/or
traceable to the company's Initial Public Offering on or about
May 16, 2005 to Nov. 15, 2005.
The complaint alleges that defendants violated federal
securities laws by issuing materially false statements.
Specifically, the Prospectus and Registration Statement issued
in connection with the company's IPO, contained untrue
statements, omitted to state other facts and was not prepared in
accordance with the rules and regulations governing its
preparation.
The complaint alleges that at the time of the IPO, Xerium was
undergoing "Cost Reduction Programs" which were negatively
impacting its business and forcing it to have customers seek out
other producers.
Among other things, the Prospectus purported to warn about the
potential negative impact of these programs, but failed to
disclose that business was then being negatively impacted by the
Cost Reduction Programs and the loss of business associated
therewith.
On Nov. 14, 2005, Xerium issued a press release announcing its
financial results for the third quarter of 2005, the period
ending Sept. 30, 2005. The company also reported that its Cost
Reduction Programs had severely impacted its results, causing
the company to experience declining net income. On this news,
Xerium common stock dropped from $9.51 per share to $6.85 per
share.
Interested parties may, no later than Aug. 7, 2006, request that
the Court for appointment as lead plaintiff of the class.
For more details, contact Wayne T. Boulton and Nancy A. Kulesa
of Schatz & Nobel, P.C., Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Maria Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2006. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *